1981-02-05

ROUTINE PROCEEDINGS


Hon. Don Mazankowski (Vegreville):: Madam Speaker, under the provisions of Standing Order 43 I rise on a matter of urgent and pressing necessity.
In light of the grossly insufficient amount of funding available to meet current Farm Credit Corporation loan demands which is threatening the viability of thousands of farmers, particularly the young and those starting new operations, and given the failure of the government to respond in a positive way, I move, seconded by the hon. member for Athabasca (Mr. Shields):
That the minister take the necessary immediate steps to increase the level of funding of the Farm Credit Corporation by at least $150 million and to ensure that the lending rate not exceed the current level of 12.75 per cent.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


DROUGHT ASSISTANCE
Mr. Jack Shields (Athabasca):: Madam Speaker, I too rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. I would ask members to give serious consideration to passing this resolution unanimously.
Whereas the eight-member review board which oversees drought assistance programs such as the herd maintenance assistance and fodder procurement programs in drought-affected areas of Canada is currently comprised of two members from Manitoba, three from Saskatchewan, three from Ontario and one from southern Alberta, and whereas the province of Alberta, particularly the northern regions where the effects of drought are equally devastating and are so sorely
under-represented on this board, I move, seconded by the hon. member for Vegreville (Mr. Mazankowski):
That the Minister of Agriculture immediately appoint a representative from northern Alberta to sit on the review board in order to correct this glaring inequity.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CHINESE NEW YEAR
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, I rise under the provisions of Standing Order 43 on an urgent matter which I am sure will have unanimous support.
Today is the Chinese New Year, and it is the year of the rooster. I am told we must beware of this because the rooster is a loner, a deep thinker, he dreams a lot but takes no action, is sometimes disliked but never a bore. In honour of this day I move, seconded by the hon. member for Vancouver-Kingsway (Mr. Waddell): '
That this House recognizes the many contributions of Canadians of Chinese descent and wishes them and all Canadians good health, prosperity and happiness in the year of the rooster. "Gung Hai Fat Choy".


Some hon. Members:: Hear, hear!


Madam Speaker:: Order, please. This motion contains good wishes which I am sure we all want to extend to the Chinese community, but I cannot accept it under the provisions of Standing Order 43.


REGIONAL DEVELOPMENT
Mr. Lloyd R. Crouse (South Shore):: Madam Speaker, I rise under Standing Order 43 on a matter of urgent and pressing necessity concerning the province of Nova Scotia.


Madam Speaker:: Order, please. Will the hon. member for South Shore (Mr. Crouse) proceed, please.

February 5, 1981


Lloyd Roseville Crouse: Yes, Madam Speaker, as soon as we have a little order behind me.
Whereas the Deputy Prime Minister (Mr. MacEachen) did not appear at a recent meeting of Atlantic provinces health ministers on an urgent matter respecting medicare, failed to make any announcement on the long overdue business plan for Sydney Steel, and has failed to date to support his colleague, the minister for DREE, on the urgent matter of approving construction of a new fish plant at Lockeport where over 305 people are unable to find work, I move, seconded by the hon. member for Central Nova (Mr. MacKay):
That this House calls upon the government and the Deputy Prime Minister to explain the obvious lack of priorities for our province and its economic future, while today before cabinet the question of a massive bail-out for Massey-Fergu-son holds the spotlight, since this aid will benefit workers in other countries while our people in Sydney and Lockeport walk the streets for lack of employment opportunities.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


COMMUNICATIONS
Mr. Bruce Halliday (Oxford):: Madam Speaker, I too rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
Canada is about to lose its world leadership role in the development of Telidon, our unique version of videotex technology, unless a few million dollars are provided by the federal government. 1 therefore move, seconded by the hon. member for Cariboo-Chilcotin (Mr. Greenaway):
That this House directs the government to heed the warning of senior officials of the Department of Communications and supply the necessary funding of $24 million over the next two years so that the final research and marketing of Telidon can be completed, having as it does a potential for 100,000 new jobs by 1990.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NUCLEAR ARMAMENTS
Mr. Terry Sargeant (Selkirk-Interlake):: Madam Speaker, 1 rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity.
On Tuesday of this week the United States Secretary of Defence announced that he was seriously considering the deployment of the neutron bomb. In light of the fact that this weapon's deployment would only serve to heighten East-West tension, and in light of the fact that the neutron bomb, a weapon that destroys people but leaves buildings and property unharmed, would increase the risk of all-out nuclear war, 1 move, seconded by the hon. member for Saskatoon East (Mr. Ogle):
That this House instructs the government to join with the government of The Netherlands, which yesterday voted to reject the deployment of the neutron bomb in western Europe, and, further, that this House instructs the government to communicate this country's grave concerns regarding this matter to the government of the United States.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, 1 rise under the provisions of Standing Order 43. Whereas one Patrick Aimee McCaffrey of North Battleford, Saskatchewan, a former employee of the Department of Indian Affairs and Northern Development, has submitted a list to the RCMP of 65 names of persons allegedly involved in suspicious dealings with the department and, further, has alleged that two complete house packages and a full semi-trailer of building material destined for the Red Pheasant reserve have gone missing, I move, seconded by the hon. member for Prince George-Peace River (Mr. Oberle):
That the Minister of Indian Affairs and Northern Development immediately request the RCMP to conduct an investigation of the accounting and auditing procedures of the Saskatchewan region of the Department of Indian Affairs and Northern Development in order to determine whether there is any further evidence of theft or conversion and report their findings to this House.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.
February 5, 1981


THE CABINET
Mr. Geoff Scott (Hamilton-Wentworth):: Madam Speaker,
I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity, but somehow I doubt that my motion will receive unanimous support.


Some hon. Members:: Oh, oh!


Geoffrey Douglas Scott: In view of the fact that at least two cabinet ministers have been booed off public platforms as a result of a Prime Ministerial directive which gives marching orders that, under no circumstances, will cabinet ministers make speeches anywhere in this country to any group unless they lead off discussing the Constitution and energy, I move, seconded by the hon. member for Edmonton-Strathcona (Mr. Kilgour):
That the chief puppeteer instruct the marionettes on the Treasury benches to stick to their portfolio responsibilities when they go out to speak to Canadians.


Some hon. Members:: Hear, hear!


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


TELECOMMUNICATIONS
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, I too rise under the provisions of Standing Order 43. A private American corporation, Satellite Business Systems, has applied to the U.S. Federal Communications Commission for permission to link its transmission services to five major Canadian cities. The minister's own department has shown that transborder data transmission will lead to re-centralization of control by multinationals over their subsidiaries and a consequent loss of jobs in Canada. The Clyne commission agrees.
I therefore move, seconded by the hon. member for New Westminster-Coquitlam (Miss Jewett):
That since the proposed service will require Canadian permission, the government refuses to grant authorization for further foreign intrusion which threatens Canada's independence and telecommunications future.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Some hon. Members:: No.


REGIONAL ECONOMIC EXPANSION
Mr. David Kilgour (Edmonton-Strathcona):: Madam Speaker, I rise under the provisions of Standing Order 43 to ask the unanimous consent of the House to discuss an important matter of urgent and pressing necessity.
In view of the fact that again yesterday there were demonstrations in the Matapedia valley about the setting up of a paper mill, and since the Minister of Regional Economic Expansion (Mr. De Bane) would rather deal with development in Africa than in his own area where he was parachuted, of course, I move, seconded by the hon. member for Cariboo-Chilcotin (Mr. Greenaway):
That the House condemn the thoughtless and irresponsible election and referendum promises made by the Minister of Regional Economic Expansion.


Madam Speaker:: In order to be put, such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE PRIME MINISTER
Mr. Bill McKnight (Kindersley-Lloydminster):: Madam Speaker, I rise under the provisions of Standing Order 43. Last night in Brandon the Prime Minister (Mr. Trudeau), in a desperate attempt to aggrandize his own shallow self-interest, insinuated that if Westminster, the Progressive Conservative Party of Canada, seven Canadian premiers, the energy producing provinces, the editorial writers of Canada and the majority of Canadian citizens disagree with his policies, then the "Prime Minister must be doing something right".
In light of the fact that the Prime Minister has accomplished nothing except to postpone forever energy self-sufficiency for our country and to split our regions irrevocably with his constitutional proposals, I move, seconded by the hon. member for Lisgar (Mr. Murta):
That this House condemns the statements made by the Prime Minister, which have only served to encourage alienation and force Canadians to seek an alternative to a centralist regionally dominated government.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.

February 5, 1981
Oral Questions



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is for the Secretary of State for External Affairs. When the minister met British ministers last November 10 did he say that if Canada was forced to choose, "his government would drop patriation rather than the charter?"


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, on Tuesday afternoon the Prime Minister suggested the course of conduct which he would follow henceforth with respect to questioning of this kind. He asked us to observe the same rule, namely, that we would not henceforth discuss the details of our conversations or meetings with members of the British government. However, I would say that I stand by everything 1 have said in the House.


Some hon. Members:: Oh, oh!


Mark R. MacGuigan: The whole course of conduct of the British government throughout these meetings shows that they are prepared to follow the undertaking which they have made, namely, to present, with their support, our resolution to the British Parliament.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, throughout this week and at other periods during this Parliament, we have suggested to the government that it would be better for them and better for Canada if they would tell the whole truth to the people of Canada about our Constitution instead of hiding facts from the people of this country.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, the Secretary of State for External Affairs has backed away from saying publicly what he may well have said privately, which is that the priority of his government is to have another country change our rights and keep our Constitution. He declines to say that publicly, although there is very good evidence that he has said it privately.
May 1 ask the Secretary of State for External Affairs whether, in that meeting on November 10, with British officials in Westminster, he said that the Government of Canada would seek to entrench a charter of rights, even if we were not seeking the patriation of our constitution?


Mark R. MacGuigan: Madam Speaker, 1 stand by my previous answer. The Right Hon. Leader of the Opposition appears to have obtained, in some manner or other, all of the documentation in this matter. If he wants it made public, he may make it public.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, the minister has now given his view that the documents on which I am basing my questions are documents which are official and do reflect the facts. That is the clear implication of what he has just said.
Let me ask the Secretary of State for External Affairs this: is it the policy of the Government of Canada, given a choice, that it would prefer having the entrenchment of the charter of rights to having our Constitution home? Is that the policy of the Government of Canada?


Mark R. MacGuigan: Madam Speaker, I am not sure that question in those terms ought to be addressed to me. But 1 can say that I know of no discussions in cabinet on that point.


Mr. Lawrence:: What do you discuss in cabinet?


Charles Joseph Clark: Madam Speaker, my supplementary question is also for the Secretary of State for External Affairs. Why will the Government of Canada not tell the Parliament of Canada what representations were made on behalf of Canada?


Mark R. MacGuigan: Madam Speaker, the government, through its government spokesman, has told Parliament and the country the substance of the whole course of dealings between our two governments. All that matters to this debate is on the public record. The opposition is trying to concentrate on details which are entirely out of context with the entire course of dealings.
There is simply no question, nor could there be a question, about the obligation of the British government in this matter, nor about the position which the Canadian Government is taking.


Some hon. Members:: Hear, hear!


INQUIRY WHETHER CONDITIONS WERE STIPULATED BY BRITISH GOVERNMENT
Hon. Jake Epp (Provencher):: Madam Speaker, I would like to direct my question to the Secretary of State for External Affairs. I want to relay to the minister that if it is details we are talking about, we are seeing whether those details are the truth as the minister is giving them.
Can the minister tell the House whether on November 10, 1980, he was told by Westminster that Westminster could not have Canadian constitutional proposals if those proposals were being challenged in the Supreme Court of Canada?


Mark R. MacGuigan: Madam Speaker, the position which the British government has taken is to respect the principle and their obligations; it is to raise questions about the manner of implementation, particularly with respect to timing. Matters which were raised in all of the discussions, which the opposition would like to see as negative elements, were always in the long
February 5, 1981

run, and usually in the short run, put in a very positive context by the British government.


Some hon. Members:: Hear, hear!


Arthur Jacob (Jake) Epp: Madam Speaker, I would like to ask another question of the same minister, which is in reference to information from his own department. Mr. St. John-Stevas said:
This question of highest importance since British Parliament could not not proceed if matter before Canadian courts.
That is not what the minister has been saying. In view of that British statement is this the reason why the government will not refer to the Supreme Court of our own country the legality of what they are asking another country to do to our Constitution?


Some hon. Members:: Hear, hear!


Mark R. MacGuigan: Madam Speaker, the judgment of the Court of Appeal in Manitoba given this week indicates that the Government of Canada has no cause to fear any reference to the courts in this matter.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Read the judgment.


Mark R. MacGuigan: Madam Speaker, the reason why we have not decided to make any such reference is, as the Prime Minister has said repeatedly, because this is a political matter. It is not primarily a legal matter.


ACTIONS OF BRITISH HIGH COMMISSIONER IN CANADA- REQUEST FOR INVESTIGATION AND RESPONSE
Mr. Edward Broadbent (Oshawa):: Madam Speaker, I preface my question with the observation that there is no doubt in our minds that the British government and the official opposition in Great Britain have taken the correct constitutional position on this matter, namely, that they should not change a comma or a semi-colon of a resolution which comes from the Parliament of Canada.


Some hon. Members:: Hear, hear!


An hon. Member:: You are even beginning to sound like a Liberal!


John Edward Broadbent: The Colonel Blimps to my right may take a different colonial position, but that is the position of my party.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Madam Speaker, my question-


Some hon. Members:: Oh, oh!


Madam Speaker:: Order, please. Can we get back to the questions?
Oral Questions


John Edward Broadbent: Madam Speaker, it is obvious that Margaret Thatcher's "presence" in their caucus yesterday caused them a little trouble.


Some hon. Members:: Oh!


John Edward Broadbent: Quite seriously, I would like to ask the minister, given the responsible position taken by the government of Great Britain and their official opposition, is he aware that the British High Commissioner to Canada has directly attempted to influence Canadian Members of Parliament, and other Canadians, on this important Canadian internal matter?


Some hon. Members:: Oh!


Mark R. MacGuigan: Madam Speaker, I have had some reports of that nature.


An hon. Member:: What did you do about it?


Mark R. MacGuigan: If they were true, I might say that such conduct would, of course, be doing a great disservice to the government of the United Kingdom. It would be conduct completely unacceptable to this government. As the Leader of the New Democratic Party knows, among other incidents reported have been those involving some Members of Parliament including, I think I might say, the hon. member for Vancouver-Kingsway. I am in the process of investigating these, reports and considering what action should be taken, if any.


John Edward Broadbent: Madam Speaker, I am pleased to hear that the minister is investigating this inappropriate activity.
Would the minister tell hon. members at what point the House of Commons may expect a full report on these serious allegations?


Mark R. MacGuigan: Madam Speaker, because of the seriousness of the matter I would not, and I am sure that the government would not wish to act precipitously. It will probably take us some days to investigate and to decide on the best course of action.


John Edward Broadbent: Madam Speaker, to be perfectly clear, if the minister finds that the British High Commissioner has in fact attempted to influence members of the House of Commons as well as, 1 understand, other Canadians, on an essentially internal affair, will he file a protest in the strongest possible terms with the British High Commissioner pointing out that the activity which he has undertaken is in flat contradiction to the commitments which his own government made in Great Britain?


Mark R. MacGuigan: Madam Speaker, such conduct, if true, would not indeed represent the policy of the government of the United Kingdom. Certainly the course of action suggested by the hon. member would be one of the alternatives considered.

February 5, 198
Oral Questions


INQUIRY WHETHER TIME FACTOR MENTIONED BY BRITISH REPRESENTATIVES
Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Madam Speaker, it is clear that the NDP has now declared itself a colony of the Liberal Party.


Some hon. Members:: Hear, hear!


Henry Perrin Beatty: My question is also for the Secretary of State for External Affairs, who on Sunday made the following statement on Canadian television:
There's never been a problem with the British government on the issue of principle. They accept this principle entirely. The only question they have ever raised with us is the question of timing.
How does the Secretary of State for External Affairs square that statement with the Canadian minutes of the meeting with the British held on November 10, which indicate that the British opened the meeting by:
-saying that passage at Westminster dependent on how soon measure reaches London and what it contains.


Mark R. MacGuigan: Madam Speaker, as I said earlier, I do not propose to comment on the details of whatever records hon. members opposite think they have. But I will say that the record as a whole clearly sustains the positions which we on this side have enunciated.


Henry Perrin Beatty: Madam Speaker, there is certainly a three-line whip here, and the Prime Minister has imposed it on the Secretary of State for External Affairs. Does the minister not feel that having made this statement to the Canadian people on nation-wide television on Sunday-in which he said, in effect, that there has never been disagreement on the issue of principle-he has a responsibility to justify it, in view of the documents of the Canadian government which indicate that his statement is flatly untrue?


Mark R. MacGuigan: Madam Speaker, the hon. gentleman is quite in error. As I indicated in the House on Tuesday, we have received some half dozen confirmations from members of the British government, including Prime Minister Thatcher, of their acceptance of the principle involved. There has never been any question of the principle in the discussions with any representative in the British government. The discussions have been about the subsidiary matters, the timing and how they are to handle their backbenchers.


COURT ACTION BY PROVINCES
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, I direct my question to the Secretary of State for External Affairs. On November 10 the minister told Mr. Stevas that the legal proceedings initiated by the provinces were essentially a delaying tactic. Is the minister accusing the provinces in his representation to the British government of an abuse of legal process? How could the minister do such a thing, considering that he was once a dean of law and understands the right of
provinces and of any individual in this country to appeal to the courts for decisions and relief?


Mark R. MacGuigan: Madam Speaker, as the hon. member is also a lawyer, he might wish to read the decision of the Manitoba Court of Appeal, which essentially takes the position that there is no legal dispute involved. That is exactly the position taken by the Government of Canada.


Ramon John Hnatyshyn: Madam Speaker, I take it from the answer the minister gave that he does consider the legal proceedings to be an abuse of the legal process and that is his response.


PROPOSALS MADE TO PROVINCE OF SASKATCHEWAN
Ramon John Hnatyshyn: Madam Speaker, I should like to put a supplementary question to the Minister of Justice. I can understand the Leader of the New Democratic Party wanting to wrap another blanket around himself and the Liberal Party, especially in view of the fact that today the government of Saskatchewan has come out in opposition to the constitutional package. What was proposed to the province of Saskatchewan? What did it turn down? Would the minister now give the details, in view of the fact that the provincial attorney general has indicated the opposition of that provincial government to the package and has criticized the Minister of Justice for not making a reference to the Supreme Court of Canada?


Mr. Lalonde:: What about Ontario and New Brunswick?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, during the course of this long investigation by the House of Commons in the committee, I have talked to a lot of the attorneys general. They have called me and discussed many aspects of this resolution that is about to be voted upon by the House of Commons and the Senate. Some of them made suggestions, and some asked questions. I had that kind of discussion with Mr. Romanow and he can make up his mind when we have finished, whether he accepts it or not. Our position is well known, that we were to patriate the Constitution, that we were to give a mechanism for an amending formula and, at long last, the great desire of John Diefenbaker to have a charter of rights in the Canadian Constitution will be realized.


Some hon. Members:: Hear, hear!


Mr. McDermid:: What about property rights?


Charles Joseph Clark: Why did you vote against it?
February 5, 1981


SUMMER YOUTH EMPLOYMENT PROGRAM
Mr. David Orlikow (Winnipeg North):: Madam Speaker, my question is for the Minister of Employment and Immigration. Several days ago the minister announced the details of the summer employment program for students. Given that this year's employment situation is much worse than it was a year ago, would the minister explain why his employment program for students for this summer will offer $20 million less than the same program last year?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, the hon. member made one mistake. The rate of unemployment for this year is identical to what it was last year at the same time, so that the premise upon which the question is based is not accurate. 1 would ask the hon. member to look at the entire announcement. We indicated that we were putting $59 million into a new program to deal with the employment problems faced by the disabled as well as those faced by the chronically unemployed, many of whom are young people. Our objective is to allocate our resources to try to find long-term jobs in the private sector for young people so that they can have a permanent job record and not just rely upon temporary summer employment.


David Orlikow: 1 wish to ask a supplementary question, Madam Speaker. The minister announced about two weeks ago his program for the employment of handicapped people. Most of us thought it was a good program. It is now obvious that what the minister has given with one hand, he has taken away with the other. Given the fact that we have continuing announcements of further plant closures and lay-offs, so that the unemployment situation this summer will undoubtedly be worse than it was last year, would the minister reconsider his proposals and bring forth more money for employment programs for students in the coming summer?


Lloyd Axworthy: Madam Speaker, we are always prepared to review programs and to try to make sure we are doing the best thing. I go back to the basic philosophy that we are trying to adopt, which is to use our very scarce resources in the most effective manner, that is, to target upon those who have the most difficult employment problems. It certainly is our judgment that where we should focus is upon those who have high levels of unemployment in the regions where jobs are scarce, and that in many cases we should apply that money to deal with the problems of the disabled and, on the general level of youth employment, let the general market take care of it with the stimulation of the economy that was so graciously provided by my colleague, the Minister of Finance.
Oral Questions


NATIONAL ENERGY PROGRAM
Mr. Jean-Guy Dubois (Lotbiniere):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. When the budget and the new energy policy were introduced, grants up to $800, or 50 per cent of the costs of heating system conversions such as from oil to electricity, were to be provided. Many Canadians are wondering what progress is being made in the discussions with the Quebec government and Hydro-Quebec, as they are apparently unwilling to go along with this proposal and could therefore deprive Quebecers, who are of course Canadians, of this grant. Can the minister tell us how his discussions in this regard are progressing?


Marc Lalonde: Madam Speaker, I should like to report to the House and the hon. member that I met with the Quebec energy minister, Mr. Berube, last Tuesday, and that we discussed this specific issue. Mr. Berube told me that he intends to send us an official notice of the decision made by the Quebec government in this regard in the very near future. I believe that this will be a matter of days rather than weeks or months. As soon as I know the Quebec government's decision in this regard, I shall be happy to inform my colleague and the House of the results of the consultations now going on with the Quebec government. In any event, we are looking forward to the time when this program is available to all Quebecers.


NATIONAL DEFENCE
Hon. Allan B. McKinnon (Victoria):: Madam Speaker, my question is directed to the Minister of Supply and Services. The signed contract between McDonnell Douglas and the Canadian government at Schedule A, Table 1, shows as a "firm commitment" new work on DC-9s, super 80s, DC-10 stretch, and KC-lOs in the amount of $83 million for each of 1980 and 1981. This is the kind of work that could be done at the McDonnell Douglas plant in Mississauga where hundreds of workers have been laid off. Has this firm commitment, particularly for 1980, been fulfilled and, if not, why not?


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, the hon. gentleman is aware that some questions were asked in the House recently relating to the lay-offs in Malton at McDonnell Douglas affecting about 700 employees. 1 have been made aware of that, as has the whole House. It is the result of a slowdown, a softening of the market, for the civilian aircraft that the hon. gentleman has described. Effectively that

February 5, 1981
Oral Questions
has had a negative impact on the offset program as it affects those particular components.


Allan Bruce McKinnon: A supplementary question, Madam Speaker. Another section of the same contract calls for a progress review at Milestone 6 on January 7 this year. A payment of over $11 million to McDonnell Douglas was also due on January 7, and one would presume it was contingent upon the progress review. Is the fulfilling of the $83 million firm commitment not a prerequisite to passing the progress review? Could the minister tell us if he has paid the $11 million?


Mr. Blais:: Madam Speaker, I am not in a position to advise the hon. gentleman if the specific commitment relating to the KC-10 and the DC-10 in terms of the time-frame envisaged by Milestone 6 would entitle the full payment at that particular time. I will review the question of whether the payment has been made, and advise the hon. gentleman. I will advise him as well about the conditions that were met. I can tell the hon. gentleman that, to the best of my knowledge, the payments that have been made are in accordance with the terms of the contract and the strict enforcement of those terms.


PUBLIC SERVICE
Mr. Bill Kempling (Burlington):: Madam Speaker, my question is for the President of the Treasury Board. During the federal clerks' strike last year, many non-designated CRs continued to attend their jobs. A number of these people are now being reprimanded by disciplinary committees of some union locals and have been threatened with suspension from the union. Is the minister aware of this? Could he tell me what protection an employee has if the threat of union membership suspension becomes a fact?


Hon. Donald J. Johnston (President of the Treasury Board):: Madam Speaker, I would be most distressed to think that those CRs who fulfilled their legal obligations to the employer, namely, the Government of Canada, during the period of the strike, are being disciplined in this fashion by the unions. That has not been brought to my attention and 1 would be most concerned if that is the case. They are our employees, obviously. I should like to have any additional information the hon. gentleman has with respect to this brought to my attention.


William James Kempling: Madam Speaker, the reprimand is in the form of a letter which states as follows:
The Union executive would recommend the strongest disciplinary action against those non-designated CRs who did not fully take part in the strike.
It goes on to say:
A substantial contribution to the strike fund would cause the executive to review the member's case.
It gives seven days for a response in writing to the discipline committee, asks that the reply be marked private and confidential, and gives the address. Finally, it says to make all cheques payable to local 627. What protection does the government have for employees who are threatened with this type of blackmail and extortion?


Donald James Johnston: Madam Speaker, 1 will take the hon. member's question and concern under consideration. This is the first time this has been brought to my attention. As I say, these people are employees of the Government of Canada. The letter the hon. member refers to is counselling or would appear to counsel illegal activities on the part of those employees who honour their obligations to us.


SUMMER YOUTH EMPLOYMENT PROGRAM
John Horton McDermid: Madam Speaker, my question is to the Minister of Employment and Immigration. The minister recently announced the new summer youth employment program. Will the minister tell us why, to date, this new program has not been advertised, and why, according to his own officials, there are no plans for an advertising campaign for this youth program until at least the first week in March? With a deadline date for applications of March 16, does he consider the approximate two-week notice to young people adequate, or is he really hoping that by delaying the advertising he will not have to bother with as many applications, considering that his own figures indicate the number of jobs have decreased by some 30,000?


Lloyd Axworthy: Madam Speaker, the program for summer youth employment is one that has been brought forward by this government over several summers. It is well known to the students and to the educational system. It has certainly been our experience that there does not have to be a massive advertising campaign in order to generate response. In fact we already have a number of responses. As the hon. member well knows, information is being supplied through a number of employment centres in existence in the universities and community colleges. The program is already generating a high degree of response.
As the hon. member also knows, we made a revision to the program this year to put even more responsibility on the local Member of Parliament by again asking the member to undertake local reviews of these projects and provide for some management administration and certainly information development for these programs. Therefore we have no reservations at all, knowing that it is a well-known program which will be widely used. We request the co-operation of the hon. member and other hon. members to make sure that the judgment on the wide range of applications is judiciously done.
February 5, 1981


John Horton McDermid: Madam Speaker, this has to be the first government program where Members of Parliament are being asked to do the advertising. It is ridiculous. My supplementary question is to the Deputy Prime Minister, in the absence of the minister responsible for government advertising. Can the minister tell us just what priority he has assigned to the advertising of the summer youth employment program and how he determines which issues warrant adequate advertising, if not those that will affect a very large, young and unemployed portion of the population?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I will draw that question to the attention of the responsible minister so that he can give an answer in the detail the question deserves and the hon. member would like to have.


SHIPBUILDING
Margaret Anne Mitchell: Madam Speaker, my question is to the Minister of Energy, Mines and Resources. Dome Petroleum, which the minister has extolled as a Canadian company, intends to construct a large barge for its exploration efforts in the Beaufort Sea. Although Dome originally approached a Vancouver shipyard which has the capacity and the manpower to do this, it now appears Dome will have this craft built in Singapore, with a resultant loss of some 150 jobs in Vancouver. In addition, a ship was recently built for Dome in Louisiana for use in the Beaufort Sea, which resulted in the loss of about 50 more jobs. Will the minister inquire into these allegations and demand that Dome build these vessels in Canada so that Canadian workers and Canadian shipbuilders will obtain the benefits of development of our Arctic resources? Will he also confirm that Canadian tax dollars are being used to subsidize the construction of vessels built in foreign countries?


Marc Lalonde: Madam Speaker, 1 will certainly bring the point raised by the hon. member to the attention of Dome Petroleum. I was advised by Dome that they intended to have some of their vessels built in British Columbia. I will inquire about the most recent allegation by the hon. member, but 1 wish to inform her that, to my knowledge, there is no subsidy for having ships built abroad.


Margaret Anne Mitchell: In view of the tremendous potential there is in the Arctic and northern Canada for development of advanced Canadian technology in the resource and maritime industries, and the fact that this potential is in danger of being taken over by foreign interests if we do not get a move on, what steps are the minister and his government taking to develop an industrial strategy related to the development of northern resources, energy in particular? What research and
Oral Questions
development funds are being invested? Also, what plans and programs are under way to retrain Canadians so that we do not have to import foreign skilled labour?


Marc Lalonde: Madam Speaker, I am happy the hon. member has raised this very important question. As she knows, there is now a bill before a parliamentary committee of this House, Bill C-48, the Canada Oil and Gas Act, which gives the minister authority to impose very strict working conditions on the oil industry on Canada lands. This will mean the right to insist on Canadian ownership, Canadian services and equipment, and also the employment of Canadians. This bill is before the House. I hope it will be passed very soon so that we will be in a position to impose those conditions upon those who are benefiting from the exploitation of resources on Canada lands.


INCOME TAX
Mr. W. Kenneth Robinson (Etobicoke-Lakeshore):: Madam Speaker, my question is for the Minister of National Revenue. The Federal Court of Canada ruled that, for income tax purposes, a father cannot claim a deduction for child care expenses. This is the ratio for the Gillespie case. As the minister knows, under the Income Tax Act the mother and not the father is irrevocably assumed to have custody of a child. Will the minister consider an amendment to the Income Tax Act whereby, if the father pays for child care expenses and has receipts for them, he can claim a deduction from his income tax?


Hon. William Rompkey (Minister of National Revenue):: Madam Speaker, I thank the hon. member for his question. We are now applying the law on the basis of the way it stands, that is, if the father is to claim a deduction for the children he must show proof that he has had a divorce or a legal separation. Otherwise the custody is in the mother's name and she claims the deduction. Of course, amendments to the Income Tax Act come under the purview of my colleague, the Minister of Finance.


THE BUDGET
Mr. Bill Wright (Calgary North):: Madam Speaker, my question is for the Deputy Prime Minister and Minister of Finance. On page 50 of the budget papers it is stated that the Canadian ownership accounts to be set up by the government will tax Canadian oil consumption up to $4 per barrel. This amounts to $2.7 billion per year. Can the minister confirm that when this tax is imposed up to $2.7 billion could leave the

February 5, 1981
Oral Questions
country each year to help pay for nationalizing the oil industry?


Allan Joseph MacEachen: No, Madam Speaker, 1 could not confirm that. It is a limit that is placed upon a proposed ownership charge, and the ownership charge that might arise from acquisition of Petrofina has not yet been determined. That will be known only when the final financial details are available. Certainly it is not the intention to require that sum of money to make this particular acquisition.


Frederick William Wright: 1 did not say it would. I asked could it. There is a difference. Given that the $2.7 billion is provided from the budget, and given interest rates at the time of the budget, can the minister confirm that the government is prepared to pay up to $16 billion for the purchase of foreign-controlled Canadian oil companies? If he does not agree with that figure, what is the figure the government has determined?


Allan Joseph MacEachen: No, Madam Speaker, I could not agree with that conclusion of the hon. member. A decision has been taken to make one acquisition. The cost to the taxpayers is not yet determined, but there will be a cost. One would only reach the sums of money the hon. member mentions by major additional acquisitions, and no decisions have been reached on that matter as of today.


FITNESS AND AMATEUR SPORT
Hon. Steven E. Paproski (Edmonton North):: Thank you, Madam Speaker, for your recognition.


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: My question is for the minister responsible for physical fitness and amateur sports. Since he took the fitness test he has not been able to get into the House, so I will direct the question to his parliamentary secretary. This is his great chance.
My question deals with a communique issued by the minister and has to do with travel contributions to Canadian universities. It stated that this is a "new federal assistance program". How can the minister justify calling this assistance program new when Canadian universities received grants in the 1978-79 athletic year from the federal government, and in the 1979-80 athletic year as well? Since these grants were originally on a trial basis and not intended to be perpetual, does this mean that these grants are now part of a permanent program, and since Simon Fraser-


Some hon. Members:: Oh, oh!


Steve Eugene Paproski: I want to make sure you are going to become a good minister so I will give you another couple, because she is liable to cut me off.


Some hon. Members:: Oh, oh!


Madam Speaker:: Order. The hon. member is disappointing me after my recognizing him, but he is liable to get cut off if he does not come to his question.


Steve Eugene Paproski: What is the amount being given to each of these conferences within the CIAU and to Simon Fraser for the athletic year 1980-81 out of the total grant?


Mr. Louis R. Desmarais (Parliamentary Secretary to Minister of Labour):: Madam Speaker, I thank the hon. member for his question. I should like to tell him that I will endeavour to obtain the statistics he is asking for, and as soon as I have them I can assure him he will be the first to know.
*	* V


FORECAST OF REDUCTION IN CASH FLOWS OF OIL COMPANIES
William Hunter (Bill) McKnight: Madam Speaker, I will attempt to be brief. I would like to direct my question to the Minister of Energy, Mines and Resources.
Mr. Bell, vice-president of PetroCan, is reported in the Toronto Star to have made the statement that cash flows of the oil companies of Canada this year would be reduced by 25 per cent from that of last year. Does the minister agree with Mr. Bell's statements and, if he does not, will he give us some figures that I am sure his department must have?


Marc Lalonde: Madam Speaker, before agreeing or disagreeing 1 should like to read Mr. Bell's statement. I have not read that statement, but I would be happy to read it and comment to the hon. member.


DIFFERENCE IN ESTIMATES OF OIL COMPANY CASH FLOWS
William Hunter (Bill) McKnight: Madam Speaker, I am sure that someone from Petro-Canada must consult with the minister occasionally before making statements. 1 should like to direct my supplementary question to the Minister of Finance.
In reply to a question by my colleague, the hon. member for Calgary Centre, the Minister of Finance said in this House that the cash flow of the oil companies of Canada this year would be up 28 per cent. How does he balance that with the statement made by Mr. Bell in the Toronto Star that it will be reduced by 25 per cent this year?


Allan Joseph MacEachen: Madam Speaker, I have not seen Mr. Bell's estimate. I would have to see it and examine the
February 5, 1981

comparative statistics in order to reach a conclusion. 1 still stand by what I said in the House.


INDIAN AFFAIRS
Mr. Stan Schellenberger (Wetaskiwin):: Madam Speaker, my question is for the Minister of Indian Affairs and Northern Development.
As the guardian of the James Bay settlement which was entrenched in an act of Parliament, and since the minister has an obligation to ensure that services under that act are in fact given to the native people of that region, and since court actions are now showing that in fact that is not the case, how can the minister secure settlements with other natives in other regions of this country when they cannot even trust the legislation passed in the last few years?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, 1 have gone into this in a fairly extensive way, certainly with Charlie Watt of the Inuit and Billy Diamond of the Cree, who were involved in the James Bay settlement. Might I say that we are concerned in a back-up way to ensure that health services under the agreement are provided in this area. The court action is now pending and it very much involves the whole question of whether or not Quebec has been providing adequate health services. In addition, the court will deal with the claim of Quebec that it has endeavoured to, but has been impeded from doing so. When questions like this are before the courts I do not think either the hon. member or I should go any further in commenting until the matter has been concluded in the courts.


Stanley Kenneth Schellenberger: Madam Speaker, Parliament needs assurance that the agreement is being upheld. Will the minister tell us why the government has so far ignored Section 10 of the act which states clearly that yearly reports are to be submitted to this Parliament? Those reports have not been submitted for the past three years. Can the minister state why that is the case?


John Carr Munro: Yes, I am well aware of that, and I am taking action. I might indicate that while the hon. member is offering this indictment he is also including his own administration of about ten or 11 months ago. Certainly I have asked for speed in respect of this matter and I hope to correct that very shortly, indeed. I would reiterate that once these court decisions are determined and the court has made a ruling, if it has identified areas of federal responsibility in which we have been deficient we will take action to correct it.
Business of the House FEDERAL GOVERNMENT SIGNS


COST OF IDENTIFICATION PROGRAM
Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, I wish to direct my question to the Minister of Supply and Services. It is my understanding that it is the intention of the government by the end of March, 1982, to spend in the vicinity of an additional $4.4 million on alterations to already existing federal government signs across the country, in addition to the $1 billion which has already been spent. I understand that the word "Canada" and a small Canadian flag over the last "a" in the word is to be added to the signs. Can the minister tell the members of this House whether this information is accurate and, if it is, does he not think the government could find a more useful way to spend such an enormous amount of Canadian taxpayers' money, particularly in light of the severe economic difficulties facing the government and the country?


Hon.   J.-J. Blais@Minister of Supply and Services: Quite to the contrary, Madam Speaker, I feel the investment is one that is required, and one that all members of this House undoubtedly support except, evidently, from his comment, the hon. member for Parry Sound-Muskoka. The Canada word mark is part of the federal identity program and is much desired at this very crucial time in our history.


Stan Darling: Madam Speaker, is the minister telling members of the House that, in the opinion of his government, this Canada word mark project deserves priority status? The government certainly must be having difficulties in finding ways to spend the money. Is that what he is telling us?


Jean-Jacques Blais: Madam Speaker, the Canada word mark, and the decal, which is made available in order to affix that decal on all government rolling stock, on all government equipment and hardware that is able to take the decal, are in effect a very sound and very good program and investment. It is not a question of priorizing it over expenditures. It is part of the government's ongoing programs, and its priority is equal to that of other expenditures which are being made in the normal course.


BUSINESS OF THE HOUSE
Mr. Pinard:: Madam Speaker, following the agreements I was talking about yesterday, this is the third one:
That no more than one additional member from each party shall speak in the debate at the second reading stage of Bill C-24, to amend laws relating to fiscal transfers to the provinces;
That, after the said members have spoken, the question shall be put and, if carried, the bill shall be referred to a Committee of the Whole;
That no debate shall be permitted at any stage after the second reading stage of the said bill, provided that the House or the Committee of the Whole shall be permitted to divide on any motion or clause related to the said bill;
That immediately the bill is reported from Committee of the Whole, notwithstanding any Standing Order, all questions necessary for the disposal of the

February 5, 1981
Business of the House
report stage and third reading stage of the said bill shall be put forthwith and successively;
That a special committee to be composed of seven members to be named at a later date be appointed to act as a parliamentary task force on the federal-provincial fiscal arrangements, to report no later than June 26, 1981, in order that its views may be considered in the negotiations with provinces leading to new arrangements to begin with the 1982-83 fiscal year;
That the committee examine the programs authorized by the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, focussing, in particular, on fiscal equalization, the tax collection agreements, the Canada Assistance Plan, and Established Programs Financing; and that this examination take place within the context of the government's expenditure plan as set out in the October 28, 1980 budget;
That the committee shall have all of the powers given to standing committees by Section (8) of Standing Order 65;
That the committee have the power to retain the services of expert, professional, technical and clerical staff as may be deemed necessary;
That the provisions of sections (4) and (9) of Standing Order 65 be suspended in application to the said committee; and
That, notwithstanding the usual practices of this House, if the House is not sitting when an interim or final report of the committee is completed, the committee may make the said report public before it is laid before the House.


Mr. Nielsen:: Madam Speaker, we have no problem in giving our consent to the order being sought. I consulted yesterday with the government House leader and the House leader for the New Democratic Party in connection with the speaker on behalf of our party. The hon. member for Calgary Centre will be our speaker and, since he has already taken part in the debate, both other House leaders have given their consent to suspend Standing Order 37(1) so as to enable the hon. member for Calgary Centre to be our spokesman in this matter.
One other matter which is not mentioned in the order put forward is that, as part of the arrangement, it has been agreed that when we are at the committee stage, Clause 3 will be dropped from the bill and will not pass.


Allan Joseph MacEachen: It will be defeated.


Erik Nielsen: It will be defeated.


Mr. Knowles:: Madam Speaker, it is correct that the order proposed by the government House leader comes to us as a result of the discussions we have had, and we are prepared to concur in it. There is one reservation I should like to make, but it does not detract from our readiness to pass the motion, and that is that we never did settle the question of whether this new parliamentary task force should have the right to travel as it does its work. I simply reserve the right to the committee to ask for that if it finds that it needs it. That can be done later.
As stated by the hon. member for Yukon, we understand that the government and the official opposition will see to it that Clause 3 of the bill is not carried when we get into Committee of the Whole. We may find ourselves in the unusual position of being the only party to vote for something the government has put before us. We shall still vote for Clause 3.
However, we welcome the implementation of the assurance that, since Clause 3 is to be dropped, there is to be the parliamentary task force outlined in this motion.
I have just one other thing to say. It is not often that the Progressive Conservative Party and the New Democratic Party find themselves in the same boat.


Erik Nielsen: But never in bed.


Stanley Howard Knowles: That is right. Just as the Progressive Conservative Party wishes its one speaker today to be a member who has already spoken, so we would like permission for the hon. member for Winnipeg-Birds Hill, who has already spoken, to be our one speaker in the debate today. 1 believe that is agreed among the House leaders, and I trust unanimous consent will be given thereto.


Madam Speaker:: The House has heard the proposed order. Does the House unanimously agree to this order? The suggestion of the hon. member for Yukon was not quite a modification, but it seemed to be an amendment. At any rate, does the House agree to the order as proposed by the President of the Privy Council, including the reservations made by the two other members who spoke?


Some hon. Members:: Agreed.


Madam Speaker:: So ordered.


WEEKLY STATEMENT
Erik Nielsen: Madam Speaker, I will now ask the usual Thursday question. Can the government House leader give us an indication of what his plans are for the business for the remainder of today when we are through with Bill C-24, and for tomorrow and as far as he can go into next week?
[ Translation]


Yvon Pinard: Madam Speaker, the hon. members are aware that tomorrow is an opposition day. Next week, we shall proceed with the second reading of the bill to provide supplementary borrowing authority to the government. We are hoping to give second reading to this bill in the middle of next week, preferably on Tuesday, and if so, we would like to begin second reading of Bill C-57 to amend the Excise Tax Act.
As we all know, the Joint Committee on the Constitution must report by February 13, next Friday. I understand that it might report earlier; in such a case, I would be happy to review the order of business for next week in consultation with my colleagues of the opposition parties, but 1 must emphasize that it is urgent to give second reading to Bill C-59, and we would appreciate it if this could be done early next week.


Erik Nielsen: I have just one brief question with respect to that order, Madam Speaker. Could the government House leader give us an indication of how soon the government intends to move on the report from the joint committee once it is tabled in the House?


Yvon Pinard: Madam Speaker, at this time our intention is to deal with that report and with the Constitution as soon as
February 5, 1981

possible after the report is made but, as I just said to my hon. colleague, I will first talk to him and to the House leader of the New Democratic Party before determining the day on which the conclusion of the debate on the Constitution will start.


Stanley Howard Knowles: Madam Speaker, 1 have just two questions I should like to put to the minister today with respect to House business.
First, has the Acting Minister of Veterans Affairs yet indicated to the government House leader how soon he might have his legislation ready? We hope it will soon be before the House.
My second question relates to the fourth report from the Standing Committee on Transport, which I understand is a unanimous report which the members of that committee would like to have discussed, even if only for a couple of hours. Has the minister discussed this matter with the chairman of the committee, the hon. member for Northumberland-Miramichi? Can he indicate whether arrangements could be made next week for a short debate on that report?


Yvon Pinard: Yes, Madam Speaker, on the first point I will talk to the Acting Minister of Veterans Affairs about the request made by my hon. colleague.
On the second point, I have talked to the chairman of the Standing Committee on Transport, and it all depends on the progress we make next week on Bill C-59 dealing with borrowing authority. If we can complete the second reading stage of that bill early next week, I would be willing to consider a short debate on the report of the Standing Committee on Transport, but before committing myself I would like to have a conversation with the Minister of Transport.

I have commenced discussions but with the proviso that we deal with Bill C-59 in the way I have just mentioned. However, 1 have an open mind as to the possibility of debating very shortly the report which the hon. member is talking about.


Mr. Hargrave:: Madam Speaker, could the government House leader give us some indication of the government's plans with respect to the new taxation legislation dealing with the two natural gas bills? Could the government House leader also indicate, if possible, whether there might be some assurance after second reading that both of those bills might be referred to a standing committee of the House of Commons so that appropriate witnesses may be heard? I am sure he is aware of the very grave concern among the producing provinces of natural gas about these two taxation measures.


Yvon Pinard: Madam Speaker, this legislation is part of our national energy policy, which is very important to all Canadians. The suggestion just made by the hon. member, however, is very interesting. I am not in a position now to tell him what we will do with the legislation as to whether we will decide to deal with it in a standing Committee rather than in Committee of the Whole House, but 1 can say that I will consider his
Point of Order-Mr. Nielsen
suggestion very seriously. I will talk to the minister responsible for the matter, and I will speak to the House leader of the hon. member's party in an effort to come to some kind of arrangement. If we can agree on limiting debate on second reading so that the standing committee can deal with the issue, that may help to conclude an arrangement.


POINT OF ORDER
Madam Speaker:: After the point of order raised Monday by the hon. member for Yukon (Mr. Nielsen), I had an opportunity to read Hansard for yesterday and Monday, as he had asked me to do, in connection with the tabling of certain documents in the House. In his intervention last Tuesday, the hon. member for Yukon had informed the Chair of his intention to raise a point of order about some of the answers given by the Prime Minister (Mr. Trudeau) and the Secretary of State for External Affairs (Mr. MacGuigan) during question period.
The hon. member for Yukon then alleged that several times the hon. ministers concerned had referred to or quoted long excerpts from a letter which the Prime Minister is said to have received from the United Kingdom Prime Minister, Mrs. Thatcher.
It seems to me the Standing Orders are clear about the obligation of a minister to lay upon the table a state paper from which he has already quoted. I am sure all hon. members know Citation 327 in Beauchesne's fifth edition. It is true that the hon. ministers referred to that letter during question period, put after close examination of Hansard I was unable to find a passage which appeared to me as being a direct quotation. Having consulted the precedents, may I draw the hon. members' attention to a ruling of one of my predecessors, Mr. Lamoureux, which can be found at page 9599 of Hansard for November 16, 1971, and I quote:
I have to agree with the contention that if the reference made to a public document is not, as the citation says, a quotation from that document, it would be very difficult for the Chair to rule that the document ought to be tabled.
If a document has been actually cited or quoted in debate by a minister of the Crown, it has to be tabled. If only reference is made to it, I do not see how there can be an obligation to table it.
In his remarks yesterday the hon. member for Yukon stated that the Chair had the duty to order the government to table the letter in question. He rested his argument on Citation 327 in Beauchesne's fifth edition whose relevant section reads as follows:
To be cited, a document must be quoted or specifically used to influence debate.
I confess I was somewhat surprised by this citation, so I made it my duty to check the sources on which this Section (5)

February 5, 1981
Order Paper Questions
of Beauchesne's Citation 327 might have been based. Now, the precedents of 1957 and 1975 which can be found do not mention the fact that a document is used specifically to influence debate. One might even wonder whether the Chair can determine if a document did or did not influence debate. It is an extremely difficult judgment for the Chair to make. Therefore, I must return to the first section of the citation which is itself based on a quotation of Erskine May, and which did not change in any way the fundamental rule followed until now by all my predecessors. Indeed that is the ruling made in similar circumstances by Mr. Speaker Jerome on March 4, 1975. Among other things, he said, and I quote:
Surely, a reasonable interpretation of the words "quotation from a document" must mean a quotation from the body of a document-
He then specified just what constituted quoting. And, on April 8, 1976, along the same line of thought, he added:
However, this certainly has never been held to apply to a situation in which a minister-
-as in this case-

has simply been asked a question about a document and given an answer.
Therefore an attempt to secure information based on a certain document certainly does not entail that it is necessary to table the said document.
Under the circumstances, I see no reason why my opinion should differ from that of my predecessors, and I cannot find any Standing Order under which the Prime Minister might be forced to table the document in question.



ROUTINE PROCEEDINGS


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 65, 160, 1,630, 1,802 and 1,814.


Mr. Cossitt: During each of the past three years, what is the estimated number of persons (a) boarding (b) disembarking from passenger trains at Brockville, Ontario (c) arriving in Brockville, Ontario on trains from (i) Ottawa (ii) Montreal, for combining two trains into one before proceeding to Toronto (d) arriving in Brockville from points west of Toronto for transfer to trains proceeding to (i) Montreal (ii) Ottawa?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: The Canadian Transport Commission advises that VIA Rail Canada is unable to supply the requested information. An analysis has been performed on data filed by Canadian National Railways for the years 1976 and 1978. From the information, an estimate of passenger flows has been prepared for these years at Brockville. It was not possible to segregate passenger counts between departures and arrivals, nor was it possible to separate passengers by direction of travel. The following estimates are annual totals.
1976	1978
(000's)	(000's)
(a) (b) Passengers boarding and
disembarking at Brockville:	51.5	54.9
(c)	Passengers travelling through Brockville on trains combined from or split into Montreal and Ottawa sections:
Montreal section	90.4	110.0Ottawa section	89.7	104.7(d)	Passengers travelling through Brockville from and to southwestern Ontario on trains combined from or split into Montreal and Ottawa sections:Montreal section	5.5	5.3________ Ottawa section	32.8	33.2
Note: Totals in (d) are included in totals in (c).
Estimates for (c) and (d) assume through Montreal-Toronto passengers travel on trains which do not stop in Brockville.


Mr. Cossitt: 1.	Did the former Minister of Transport or a member of his staff request Mr. Pierre Franche, chairman of the National Harbours Board, to telephone the hon. member for Leeds-Grenville and discuss the situation at the Prescott grain elevators and, if so, did Mr. Franche fail to do so until reminded by the Minister of Transport's office on Monday, November 19, 1979?
2.	Did Mr. Franche, in a telephone conversation on Monday, November 19, 1979, with the hon. member for Leeds-Grenville, advise that he would re-examine the situation and contact the member again by Monday, November 26, 1979, and, if so (a) did he make such a contact and, if not, for what reason (b) did Mr. Franche deny any knowledge of casual or temporary help being hired at the Prescott grain elevators and, if so, what are all the reasons that such a denial was made?
3.	Did Mr. Franche state that he had been looking into the situation at Prescott for some weeks and, if so, how could such a denial as mentioned in part 2 be made legitimately?


Robert Theodore Bockstael: The National Harbours Board advises as follows: 1. Yes, the Minister of Transport requested on the morning of November 19, 1979, that the chairman telephone the hon. member for Leeds-Grenville; this was done in the afternoon.
2. The chairman advised he would review the alleged increase in casual help and call him by Friday, November 23 or Monday, November 26, 1979.
February 5, 1981

(a)	The chairman did not make any further contact in light of the statements in the Prescott Journal, November 21, 1979. The Minister of Transport was so advised on November 22, 1979.
(b)	The chairman was not aware of the alleged increase in casual help. Upon inquiring subsequently, it was established that there was nothing abnormal in the increased casual help requirements since it was the height of the harvest season and there was a grain elevator strike in Montreal.
3. The chairman had reviewed the reorganization and dismissals that occurred. There was nothing abnormal in the requirement for increased casual help during this period.


Mr. Cossitt: 1.	Was Mr. Eric Procter deported from Canada by immigration authorities following an RCMP and departmental investigation and, if so (a) was it determined thauhe had worked in Canada without paying income tax (b) did he marry shortly before being deported and did immigration authorities consider this a marriage of convenience to avoid deportation (c) on what date was he deported and to what location?
2.	Since his deportation, has Mr. Procter returned to Canada in the neighbourhood of Edmonton, Alberta or elsewhere and did he re-enter Canada on a ministerial permit and, if so, what are all the reasons for granting the permit?
3.	To the knowledge of the government, has Mr. Procter a criminal record in England and, if so, what are the details of his record?


David Michael Collenette: I am informed by the Department of Employment and Immigration and the Solicitor General as follows: 1. Mr. Eric Procter was ordered deported from Canada by an adjudicator at an immigration inquiry held on February 15 and March 12, 1980.
(a)	No.
(b)	He married Bernice Lee on March 11, 1980, which is the day before he was ordered deported. The commission did not consider this to be a marriage of convenience to avoid deportation.
(c)	Mr. Procter was deported to England on July 19, 1980.
2.	Since his deportation, Mr. Procter has returned to Canada to the city of Edmonton as a permanent resident. No minister's permit was issued.
3.	A search of RCMP criminal record files, based only on the name Eric Procter, failed to reveal a file under this name which contained a criminal record from England. It should be pointed out, however, that a complete search of these records or identification to a particular file cannot be made without fingerprints.


Mr. Cossitt: 1. Is the Department of Transport planning to move the personnel branch of its depot at Prescott, Ontario, to Toronto and, if so (a) how many persons will be involved (b) is the minister aware that his predecessor made a commitment that
Order Paper Questions
this branch would not be moved and, if so, what are all the reasons for this change in policy (c) will the government consider reversing such a decision or plan?
2. Docs the government consider it possible to hire personnel in the constituency of Lecds-Grenville by using a staff over 200 miles away in the city of Toronto and, if so, for what reason?


Robert Theodore Bockstael: 1. No. (a), (b) and (c). Not applicable.
2. The Prescott personnel office, which recruits for the Canadian Coast Guard, has authority to hire skilled and semi-skilled tradespersons, ship crews and support staff for a large district stretching as far as Lake St. Clair. The hiring of marine specialists and licensed professionals is done by the regional office in Toronto because the search frequently extends across Canada. Recruitment based on this arrangement appears to work well and there are no plans for reorganization in this area.


Mr. Herbert: In each of the past ten years, what was the value of contract change orders approved by Defence Construction (1951) Ltd. and what was the value of the change orders as a percentage of the value of original contract completions?


Mrs. Ursula Appolloni (Parliamentary Secretary to Minister of National Defence):: The information is not readily available from the records maintained by Defence Construction (1951) Ltd. as the company's statistics are not compiled on this basis. To provide this information would entail the examination of a very large number of individual contracts for each of the past ten years and for this the company does not have the necessary resources. However, an analysis of the value of change orders as a percentage of the value of the original contracts for fiscal years 1976-77 and part of fiscal year 1977-78 was prepared in 1977 for the Royal Commission on Financial Management and Accountability. The results of this analysis were as follows:
Major Construction Minor Construction Repair and Maintenance
Award Value $37,221,803 8,444,149 5,727,472
Change
Orders


[Stage Direction]
Per cent Variation
7.8
4.8 7.7
An analysis of the value of change orders as a percentage of the value of original contracts completed to date in the fiscal year 1980-81 is as follows:
Major Construction Minor Construction Repair and Maintenance
Award Value $46,032,337 5,082,610 23,147,306
Change
Orders
[Stage Direction]
Per cent ^ Variation 8.4 6.1
3.7
Madam Speaker:: The questions enumerated by the hon. parliamentary secretary have been answered. Shall the remaining questions be allowed to stand?


Mr. Tom Cossitt (Leeds-Grenville):: Madam Speaker, I did not want the parliamentary secretary to think that I had

February 5, 1981
Order Paper Questions
fainted away. I hate to raise once more points of order on similar questions that I have raised time and time again. However, I feel compelled to do so because in the meantime nothing has happened. I know that I usually get a lecture in response to this question and get told about the percentage of questions the government has answered. No doubt the parliamentary secretary will point out that the government answered 24 of my questions yesterday-maybe it was 27.


David Michael Collenette: It was 32.


Thomas Charles Cossitt: Nevertheless, they were all on the same subject and they were about six months over due, so he cannot boast very much.
Specifically, my question is this: I have questions Nos. 121 and 122 on the Order Paper concerning defeated Liberal candidates, defeated Liberal Members of Parliament and so on, who have received public appointments. I have raised this point before and it should not take months simply to tell us the number of judges who have been appointed or the number of people who have been appointed to boards or commissions. Every day we read in the paper about one or two appointments. Surely we could get a complete list so that we could see it all in total.
Also, I have been continually asking about the Taschereau papers, which Michael Pitfield returned to the Public Archives at the request of the security committee of the cabinet and the Prime Minister (Mr. Trudeau). Those questions have stood on the Order Paper, including others about Michael Pitfield, for months and months. I have asked this question before and 1 have been told the matter would be looked into. It seems as though Mr. Pitfield is some sort of an invisible ogre in the Langevin Block who secretly runs this country. We cannot find out what he is doing, what he has done, or what he is going to do. He is untouchable. I do not think that is right. He is the senior public servant in the land and he is accountable to Parliament.


An hon. Member:: He is too busy for you.


Thomas Charles Cossitt: The hon. member opposite says Mr. Pitfield is too busy for me. If Mr. Pitfield is too busy to answer questions to which the people of this country are entitled to have answers, then he should not be the senior civil servant in Canada. He should not be in that position at all if he is too busy to answer questions. Perhaps someone else should be hired-


Some hon. Members:: Order!


Madam Speaker:: The hon. member is entering into debate.


An hon. Member:: What is your point of order?


Thomas Charles Cossitt: If the hon. member would listen. Madam Speaker, perhaps he would hear.
I have one final item which I would like to raise with the parliamentary secretary. A minister in the present cabinet told me he had signed answers to my questions. I am not referring to the Minister of Supply and Services (Mr. Blais), since those questions were dealt with before when answers were delayed. The other minister told me he signed them last November. They are still on the Order Paper. Can the parliamentary secretary clarify once and for all, when questions are sent back to the Privy Council Office by ministers of the Crown, how long are they kept hidden there until they are sent back here?


David Michael Collenette: Madam Speaker, I would like to deal with the hon. member's last point first. When answers are tabled in the House they have been approved by the respective ministers. But it is also the obligation of the President of the Privy Council (Mr. Pinard) as government House leader, and myself as parliamentary secretary, to ensure that those answers in that final tabling conform to the rules of the House and to the spirit of the law and government legislation.
I would like to explain briefly to the House that with respect to answers tabled concerning the Minister of Supply and Services, which were signed some months ago,-and the hon. member received assurances from the minister in the committee-they did come forward to the Privy Council. 1 did read them. But, Madam Speaker, there is a directive which I think the hon. member for Leeds-Grenville (Mr. Cossitt) will be pleased to hear about and which he will accept.
Notwithstanding the fact that Bill C-43 has yet to pass the House, the affairs of the government will be conducted as if that bill is now law. In that particular instance, dealing with the questions with respect to Supply and Services on, I think it was, Crown Assets Disposal Corporation, I sent those answers back for further clarification to ensure that the answers fully recognized the ambit of the law now before the House of Commons. Hence the delay.
The hon. member has said there are other answers coming from another department. He has not told me which department, so therefore it would be difficult for me to follow it up to make sure that this is, indeed, the case. I do not want to go on too long, but we dealt with this the last time the hon. member for Leeds-Grenville had the floor with respect to questions on the Order Paper.
1 cannot let the remarks of the hon. member with respect to Mr. Pitfield pass, since the Prime Minister (Mr. Trudeau) appeared before the Miscellaneous Estimates Committee before Christmas. The Prime Minister answers in this House for the senior public servant. The hon. member for Leeds-Grenville was not there to ask questions of the Prime Minister concerning Mr. Pitfield and the administration of affairs. I think that answers the particular point raised by the hon. member.


Thomas Charles Cossitt: On a question of privilege, Madam Speaker. The parliamentary secretary apparently has a bad memory, or poor ears. He raised this same point with respect to Mr. Pitfield. He pointed out that I had not been at the Committee on Miscellaneous Estimates when the Prime Minister was
February 5, 1981

there. I cannot recall the exact date when this occurred. 1 pointed out that I was in the Kingston General Hospital having a heart check-up. The hon. member was already aware of that. I therefore suggest that what he says today means that he is either not listening or he has misunderstood what I said to him.
It is an affront of the privileges of this House when the parliamentary secretary says that the Prime Minister was there. Does he mean, in effect, that should cover everyone, including Mr. Pitfield? I can only say that when other ministers appear they do not seem to fear bringing their deputies with them. Why does the Prime Minister of this country fear bringing his deputy with him? Maybe the parliamentary secretary can tell us that.


Madam Speaker:: It seems to me that this is a question which should have been asked at the committee hearings. The hon. member is placing me in an impossible situation since he is discussing what should be discussed in another forum.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, December 15, 1980, consideration of the motion of Mr. Bussieres (for the Minister of Finance) that Bill C-24, to amend laws relating to fiscal transfers to the provinces, be read the second time and referred to the Committee of the Whole.
Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, I would like to thank the House for waiving Standing Orders to allow me to participate for what amounts to a second time in the second reading debate on Bill C-24, respecting fiscal transfers to the provinces.
When second reading on Bill C-24 commenced on December 15 last we had some excellent contributions by the minister, the hon. member for Mississauga South (Mr. Blenkarn) in particular, and by the hon. member for Broadview-Greenwood (Mr. Rae). They pointed out the concerns of their respective parties with regard to this piece of legislation with its three clauses.
The first two clauses deal with what is commonly referred to as the equalization arrangements in this country. They deal with changes brought about, or made necessary, as a result of new developments in the western provinces, in particular the tremendous growth in resource revenues. These are the provinces which contain the oil and gas, which recently have gone up so much in value.
Fiscal Transfers to Provinces
We must maintain a nation with some degree of equality to each citizen, no matter where he lives, so that Canadians living in one province can enjoy services provided by the government, at a level roughly equivalent to those services provided in another province. The original motivation for equalization was, in fact, from my part of the country, from the prairies. During the twenties, thirties and, indeed, the early forties, this was an extremely impoverished part of the country-at least before Leduc. There was a great deal of resentment and bitterness felt by western Canadians until 1930 because the resources did not belong to the provinces. Then, during the 1930s, there was the depression which had such an enormous impact on the prairie provinces. It created real hardships, to the point where the province of Alberta defaulted on bonds.
During this time there was an interest by those provinces in having some fairness with respect to the taxation scheme. Corporate taxes were collected at the headquarters of companies, and those were companies which earned their incomes right across Canada from coast to coast usually had their headquarters in Toronto or Montreal. Since taxes were collected in Ontario or Quebec the western provinces had no accessibility to them. The western provinces, of course, had the same kinds of obligations, as did the eastern ones, to provide roads, hospitals and so on.
The Rowell-Sirois Commission was an outgrowth of that kind of concern and frustration. It is rather ironic to recall that the greatest objection to sharing or to any sense of equalization in those days came from the Liberal premier of Ontario, Mitch Hepburn. We did arrive, primarily as the result of the Rowell-Sirois report of 1952, although the present scheme was worked out in 1966, at an equalization scheme which has worked reasonably well. This equalization scheme is based on a fairly complicated revenue-sharing arrangement. It is a complicated formula which considers the normal types of revenues.
One of the types of revenues which is considered as part of the equalization formula is the funds raised by the provinces in offering land for exploitation of mining companies or energy companies. In the case of Alberta-and I am aware that the other two provinces are similar-in order to have a fair or even-handed approach to industry with regard to exploitation of the natural resources, the province has in place a system whereby companies offer closed bids for the right to explore a given piece of land.
As oil prices have increased and as new technology increased the prospects of further oil and gas discoveries, the price of that land increased dramatically. The price has increased to the extent that the amount of money collected by the provinces for these reports of land sales is very substantial and has thrown a tremendous skew into the equalization program, causing the federal government, with the consent of the provinces, to move this amendment which would remove those types of revenues from the equalization formula.
The second amendment to the equalization formula was probably included in the first instance simply because it makes

February 5, 1981
Fiscal Transfers to Provinces
common sense, and that is that no province with an average income higher than the national average shall be the beneficiary of equalization. We in this party-and 1 know the New Democratic Party shares the same view, as I am sure does the Liberal Party-feel strongly that the question of equalization goes to the core of what Canada is all about in a real sense. It is a tremendously complex, difficult problem, with which the nation will have to deal in the near future. Goodness knows, there are enough things threatening to tear this country apart, and to add to the current problems a major dispute over the question of equalization would, indeed, be serious.
For that reason we concur with and strongly endorse the notion of establishing a special task force on the question of equalization. In fact the hon. member for Mississauga South moved a Standing Order 43 on January 28 which was exactly to that effect, that this task force be set up. We very much welcome the acceptance of this suggestion by the government and the concurrence by the New Democratic Party. We look forward to participating in that task force, to helping broaden the understanding of the elements of equalization, not just to Parliament, but to the nation, and at least starting the process of building a newer and better way of sharing in this country which is not quite as fractious, disruptive and damaging as the sharing procedures which are being attempted through the National Energy Program.
The other aspect of today's proceedings which is absolutely vital is the question of the Public Utilities Income Tax Transfer Act. This act goes back to 1946, but in its current form it goes back to 1966. It rebates to the provinces 95 per cent of the income tax collected from privately owned utilities. The reason for the act is very simple. It is based on the fundamental principle which must underline all federal taxation, namely, that taxpayers of equal circumstance, no matter where they are located in this country, should be taxed equally by the federal government. The tax system should not have built into it a bias which says that if one happens to live in this or that province one shall pay less or more federal tax.
PUITTA, the Public Utilities Income Tax Transfer Act, put into the system this kind of fairness because of the development of provincially-owned utilities which, because of the BNA Act, are non-taxable by the federal government and which, as a result, caused a distortion. The users of publicly-owned utilities were not in fact paying the corporate taxes which users of services provided by privately-owned utilities were paying. Simply stated, it was absolutely inequitable.
PUITTA removed that inequity. Hence, we are in the situation today where we have agreed that we will leave PUITTA in place. I am not sure what my reaction should be, whether I should be thankful, happy or mad. It is rather like being faced with a robber who, by use of argument, force or some other means, you convince not to rob you. What should one's feelings be at the end? Is one suppose to be grateful to the potential robber because he did not commit the robbery? The reality is that no fair-minded Canadian could accept the repeal of PUITTA, nor could this party.


Erik Nielsen: The NDP does.


Harvie Andre: Yes, the New Democratic Party could accept such a repeal because to them fairness is not part of the equation.


Mr. Evans:: Mr. Speaker, I rise on a point of order. 1 have been listening with great interest to the hon. member, but there is an error in his analysis. The bill did not repeal PUITTA, it reduced the payments from 95 per cent to 50 per cent. I know that this does not affect the hon. member's analysis, but knowing that he wishes to be accurate in everything he says, I thought I would make the point.


Mr. Taylor:: Mr. Speaker, on a point of order, the government, months before the bill was introduced, brought in the measures contained therein by order in council, which is completely contrary to representative government.


Harvie Andre: Mr. Speaker, I thank the hon. member for Bow River (Mr. Taylor) for defending me. The parliamentary secretary is half right. In fact the initial move by the then minister of finance, now the Minister of Justice (Mr. Chretien), was to repeal the act in total. As a result of representations, he backed up half way. To go back to my analogy, as the result of many arguments we convinced the robber to take only half the cash in our pocket. Finally, we have convinced the robber to leave us with all the cash which belong to us. The hon. parliamentary secretary is correct, we were only half way home earlier, but now we are all the way home.
As I say, PUITTA simply puts equity into the system. The socialists are more interested in state ownership than in equity. They are struck on that ideology-


Mr. Blaikie:: State ownership is equity.


Harvie Andre: -so that any biases, distortions, arm-twisting or thievery which will encourage people to look to state ownership as a way to relieve the pain or the losses is to be encouraged. The fact that it might be unfair, inequitable, or downright mean is immaterial, just as long as it has the intent or purpose of promoting socialism, and this new nirvana which will save us all once big brother runs the whole darn country and all aspects of it. All concerned, thinking Canadians who love freedom and democracy, pray that we will never see the day and that we will keep up the lonely battle against the forces of international socialism.
I will not intrude on the time of the House too much longer. I am pleased that this agreement has been reached. The removal of this threat to the Public Utilities Income Tax Transfer Act is something to which this party is absolutely and firmly committed. We are obviously going to vote with the government when we defeat that clause. The question of an analysis by Parliament of the fiscal transfers arrangements between the provinces and the federal government and of equalization, is something that we believe is very valuable for the country and it is a responsibility that Parliament should assume.
February 5, 1981

We look forward to working with members from the government side of the House and with members of the New Democratic Party on this task force in the hope that we can provide a report that will be of benefit not just to the government but to the country.


William Alexander (Bill) Blaikie: Mr. Speaker, Bill C-24 is an act to amend certain arrangements made over the years relating to fiscal transfers to the provinces. It is an attempt to deal with certain imbalances and anomalies that have arisen within the established equalization formula as a result of the significant increases in revenues that the energy producing provinces have experienced since 1973, anomalies such as that which has put Ontario, at present a have province, in a category where it qualifies for equalization payments. To the extent that this bill deals with something that is as fundamental to Canadian federalism as equalization, so fundamental in fact that the principle of equalization payments is to be enshrined in the Constitution, this must not be regarded as a minor piece of legislation.
We are dealing with a principle that goes back to the Rowell-Sirois Commission in pre-World War II days which progressively developed into the perception and consensus that it was the federal government's responsibility to bring all the provinces up to a common level of revenue and services.
The problem we now seem to be facing with respect to the question of resources revenue is twofold.
I wonder if I could have a little quiet on the other side of the House, Mr. Speaker. I can hardly hear myself think.
The resource revenues place greater demands on the federal government, as there is a higher level of revenue for all provinces to be brought up to and secondly, to the extent that the government has not had adequate access to these new revenues it has experienced difficulty in affording the resulting increase in the cost of equalization.
This bill is one in a series of attempts to deal with this problem. On the one hand it reduces those revenues that the federal government must calculate into the equalization formula and thus saves the government money. On the other hand it allows the producing provinces to build up such things as heritage funds, funds which we in this party acknowledge as necessary to the future of the economies of those provinces which now depend on rich, but nevertheless depleting, nonrenewable resources.
In all these manoeuvres there is, as always, somebody who ends up with the short end of the stick. As the hon. member for Broadview-Greenwood (Mr. Rae) said in debate on this same bill on December 15, 1980, it is neither the federal government nor the producing provinces which lose out as a result of these changes; it is the people of the have-not provinces who lose as a result of them. In this way it can be said that we are actually moving away from the equalization ideal, if the essence of equalization is indeed to help the have not provinces to maintain a level of revenue and services equal to some national standard. What is at stake here is the idea of national standards, an idea which I will deal with more fully
Fiscal Transfers to Provinces
when I speak of federal-provincial fiscal transfers as they pertain to health care in Canada.
This is why we in the New Democratic Party have called for a parliamentary task force on equalization. In the intergovernmental negotiations that will undoubtedly take place, Members of Parliament, representative of and concerned about all regions and provinces of Canada, should have a chance to study and to make recommendations about the way the imminent restructuring of equalization should take place for the benefit of Canadians, and not just for the benefit of the more powerful. Ways must be found to solve whatever problems there are, ways which do not endanger the standard of services available to Canadians in the have-not provinces, or wherever they may live. Canadians who have lost what the hon. member for Broadview-Greenwood has called "the game of geological roulette" must be assured a full share of the quality of life which is available in Canada.
In this context I should like to speak about the problem of those federal-provincial transfer payments which fall under the description of the Established Programs Financing Act, that arrangement between the federal government and the provinces which was arrived at in 1977 and which defines federal contributions for hospital insurance, the Medicare Act, post secondary education, and extended health care services.
At the time of its passing the NDP opposed this arrangement for reasons that merit repetition at this time. We were worried about several things. In addition to the obvious unconditional nature of the revenues transferred to the provinces via the transfer of tax points, there was a dangerous vagueness about the extent to which the revenue transferred to the provinces via the basic cash payment could be expected to be conditional upon this money being spent on the purposes for which it was intended. We were worried about the maintenance of a level of services consistent with the potential combination of federal money and unabated provincial support for these programs. A transitional additional payment was thrown in by the federal government for the sake of the poorer provinces. They would receive transitional cash payments equal to what was needed to bring them up to the national average. This was in recognition of the fact that richer provinces would receive more revenue from the tax point transfers than poorer ones.
Furthermore, the $7.63 per capita part of the basic cash payment which was included by the federal government in lieu of the termination of the agreement called the revenue guarantee, now appears to have been correctly perceived by the provinces as unconditional, if Justice Hall's conclusions are to be heeded in this matter. This points to the vagueness of a poorly worded and poorly conceived document.
Without getting into any more detail of what is a very complicated arrangement, the important thing to notice about all this is that the Established Programs Financing Act has resulted in a serious lowering of provincial contributions to health care, on a percentage basis. The result of this has been a serious cutback in services and quality of care available to Canadians who live in the provinces governed by those who

February 5, 1981
Fiscal Transfers to Provinces
have seen their new found economy in health care spending or direct federal government input into health care, as an opportunity to save money. There was an element of restraint in the 1977 arrangements both federally and provincially. Provincial governments would not have to spend a dollar to get a dollar as they did under the former 50-50 cost-sharing arrangement. There would be an incentive for competency. But there was also supposed to be freedom for innovation and expansion of health care as provincial governments used their new found freedom from federal strictures to respond more adequately to the needs of their people. The question then becomes one of whether the provinces have lived up to the moral as well as the administrative bargain that was reached in 1977.
With respect to individual provinces, one's judgment on the extent to which they have lived up to the bargain will in all likelihood be a combination of statistical and financial evidence, combined with a general impression of health care services in the respective provinces and observations about whether people, with respect to provinces, perceive their health care system to be in a state of relative decline.
I note this combined idea of measurement because the Minister of National Health and Welfare (Miss Begin), when asked by myself and others in question period, time after time, as to what she intends to do about delinquent provinces such as Alberta, Manitoba and Ontario, is fond of bringing up the province of Saskatchewan. This is supposed to be a bold political stroke on her part, or so it would seem from the self-satisfied smile which envelopes her when she devastates us like that. The Liberals, of course, have the dubious luxury of not having any provincial governments to speak about.
The fact remains that, statistically, the Saskatchewan government is shown in a document prepared by the Liberal finance department to be one of the few provinces where provincial per capita contribution has gone up since 1977 and where it can be said that all federal increases have been passed on to residents in the form of expanded health care program funding.
Further, it should be noted for the minister's benefit that the people of Saskatchewan have not risen up in righteous anger like the people of other provinces. Indeed, the Canadian Health Coalition cannot get anything going in Saskatchewan because health care is not an issue there. The government of that province is concerned about health care, and the people know it. Because health care in Saskatchewan is supplemented and complemented by other social programs of a preventive nature, it reduces the need for purely crisis-oriented medicine. Let us be done with the cheap shot misrepresentations about Saskatchewan which have been popularized in this House by the Minister of National Health and Welfare and her cohort in this, the hon. member for Winnipeg-Assiniboine (Mr. McKenzie), and let us look at two of the greatest transgressors in the deterioration of medicare which Canada has experienced since block funding was introduced. I am speaking, of course, about Manitoba and Ontario.
In Manitoba, according to the same document prepared for the Department of Finance to which I referred earlier, federal funding has increased by 18 per cent to 19 per cent while the provincial government manages to contribute 13 to 16 per cent less than it did in constant dollars in 1975-76. A view of aggregated health function spending shows a growth in the federal share from 45 per cent before established programs financing to 52 per cent today, while the provincial per capita contribution has gone down from $163.45 in 1975-76 to $142.09 in 1979-80. The downward trend was overcome only once in that period, in 1976-77 when it went up, not uncoincidentally, in the last year of the NDP government in Manitoba.
These are the statistics, damning enough, but the human reality is far more significant. Tired, overworked nurses, underpaid and understaffed maintenance personnel, cranky doctors, people waiting on stretchers in halls for hours in order to be admitted to emergency or in order to have their laundry changed on Monday mornings because they no longer hire people on the weekends, postponed elective surgery, the aged, the infirm and chronically ill being sent home prematurely because of a lack of space, and a general lack of confidence, are some of the problems.
The people of Manitoba used to take pride in their health care system. Over the years they elected members of Parliament who were part of the fight for medicare, such as the hon. member for Winnipeg North Centre (Mr. Knowles) who fought for medicare against the reactionary and insensitive machinations of the Conservatives and the usual procrastination, reluctance and general lack of conviction characteristic of the Liberal party. The people of Manitoba will no doubt take steps to restore their pride in the way they look after each other come the next general election in Manitoba.
Now let us look at Ontario, a province which, because it never had a New Democratic government, has even more structural attacks on the principles of medicare than Manitoba. In Ontario, atrocities like widespread extra billing, hospital charges and premiums are piled on top of the kinds of things which Manitobans have had to put up with in the last few years. What an irony that, in one of the richest provinces in Canada, the political culture has not yet matured to the point where people in Ontario do not have to pay for their health care through the regressive mechanism of premiums.
Statistically, according to the document I have been referring to throughout, the federal share of health care funding in Ontario has gone from 41.5 per cent before established programs financing to 52.4 per cent at this time. Real provincial expenditures have decreased by 3 per cent while, in addition to federal increases, the people of Ontario have experienced a 27 per cent increase in what they paid through premiums.
Using figures submitted to the Hall commission, which were approved by the government of Ontario, we see that while increasing provincial per capita expenditures by a paltry 3.6 per cent, the government of Premier Bill Davis has managed to reduce its own funding by 29.3 per cent amid real federal increases of 27 per cent and real premium increases of 27 per cent. What, pray tell, are the people of Ontario paying for?
February 5, 1981

The "big blue machine" turns out to be a reference to the way in which the health of the people of Ontario is being choked off by the ham-handed and blind, stupid restraint of the Progressive Conservative Party of Ontario.
What is the answer? Under the present system the federal government, because it gave up the carrot in 1977 and has only the stick, has the threat to cut off funding. It is a very serious threat unless, of course, you are Alberta and have the political cheek to say, as the government of Alberta did the other day, that you are prepared to do without federal funding in order to get your own way and keep on being a province where extra billing and opting out take place at intolerable levels. Little Peter has threatened to run away from home.
The more serious question is what has happened to the Minister of National Health and Welfare who once threatened the provinces. She now challenges the NDP to recommend the same thing. When we complained about the state of medicare in some provinces, she challenges us to recommend this as if it were something that she in her new found wisdom had never thought of.
Justice Hall recommended against any withdrawal of federal funding. He recommended against what the Minister of National Health and Welfare threatened to do so many times in the last two election campaigns. We are prepared to accept the wisdom of this judgment by Justice Hall, as long as it is accompanied by a commitment on the part of the federal government to change the Established Programs Financing Act in such a way as to make the provinces more accountable for the maintenance of certain national standards.
We suggest the introduction of a new form of 50-50 cost sharing. It would preserve the notion of flexibility while reconstituting health care and post-secondary education in Canada as a joint-federal-provincial responsibility, something we act together on, not something the federal government throws money at and then forgets about.
What we in this party are afraid of, and what I now warn the Canadian people about, particularly those in the poorer provinces or in provinces where the governments are hostile to medicare is that the federal government, instead of trying to rebuild and re-establish a co-operative federalist approach to health care and post-secondary education, will try to get out from under what remains of its responsibility in this area.
Contrary to the centralizing image of the Prime Minister (Mr. Trudeau) on important social and practical matters such as health care, he has literally given away the store. On economic matters he seems to want power, only not to use it. He idly contemplates power while our economy falls apart for lack of planning and direction.
Let me return to the topic of medicare. We suggest the federal government should not compound the error of most provincial governments by negotiating the renewal of Established Programs Financing, as it must be renewed in the coming year, with a view to saving money. The goal should be to stimulate provinces to greater responsibility for medicare
Fiscal Transfers to Provinces
and for the federal government to maintain its sense of responsibility over health care.
One of the reasons the federal government has given in the last little while about its need to save money in respect of federal-provincial transfer payments, particularly in the statement in the budget as to how the Minister of Finance (Mr. MacEachen) looks forward to and anticipates saving money in the upcoming renegotiation of federal-provincial fiscal arrangements, is the revenue squeeze the government has been in of late.
Indeed it would be ironic if, at the same time the Liberal government was moving to solve the revenue problem, as it did in respect of its recent National Energy Program by having accrued to it more of the revenues coming from resources in this country, it was doing so by trying to get out of its responsibilities in those areas where Canadians have traditionally looked to the federal government for leadership.
In 1977, when the present arrangement of Established Programs Financing was brought into being against the criticisms and opposition of the NDP, we were warned by the father of medicare, Mr. Douglas, the then hon. member for Nanaimo-Cowichan-The Islands, just what was involved in this particular rearrangement of the federal government's responsibility in health care. Let me conclude by quoting him as follows:
The fact is that this bill will destroy the very thing which since 1945 successive federal governments have been seeking to establish, namely, national standards for the people of Canada by which the federal government, through equalization payments and sharing the cost of programs on a 50-50 basis, could assure that a little province like Prince Edward Island would be able to give its people services that are comparable to the wealthiest province of Canada, the province of Ontario.
He went on to state:
This country was founded by men and women who had a dream that it was possible to bring together diverse groups of people with different cultural backgrounds, who spoke different languages but who could live together in a spirit of tolerance and good will. They believed it was possible that the strong would help the weak, that the wealthy provinces would help succor the poorer provinces and that we would build a standard of Canadian living which would be our pride. If we fail to do that, then we are not worthy of those in whose footsteps we follow.
My plea to the government and the Canadian people is the same as that of Mr. Douglas at the time. We should make up our minds that we will not allow the apathy which seems to be creeping into the federal government in respect of the attitudes of provincial governments toward our health care, to destroy the Canadian dream, of which medicare is an integral part.


Hon. Pierre Bussieres (Minister of State (Finance)):: Mr. Speaker, I was very glad to hear the hon. member for Win-nipeg-Birds Hill (Mr. Blaikie) quote Mr. Douglas at the end of his speech because those very generous words somehow offset his mean and partisan attack on the attitude of some provinces and even of the central government with regard to the financing of certain established programs which, by the way, are not affected by this bill.
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February 5, 1981
Fiscal Transfers to Provinces
The purpose of this bill which was rather well explained, if I may say so, by the hon. member for Calgary Centre (Mr. Andre), is to amend two statutory programs. The first one deals with the equalization payments authorized under the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, and the second with the payments made under the Public Utility Income Tax Transfer Act. It will be recalled, that the equalization program is intended to transfer enough revenue to the poorer provinces to help them provide a reasonable level of service to the public without having to impose on taxpayers levels of taxation which would be greater than their ability to pay. I would like to indicate that the equalization program is based on a province's ability to provide these services. For the purposes of the program, the revenues that each province would get through average levels of taxation, according to its own tax base, are assessed and its future revenues, in cases where the province is above average, are adjusted upwards. This is a way of ensuring that the provinces have sufficient financial resources to finance public services.
The equalization program is one of the most important programs implemented by the federal government. I want to assure the House that the government is as firmly committed as ever to this program. As the hon. member indicated, it is such an important program that it was examined during the constitutional discussions with a view to including the equalization principle in the Canadian Constitution. The fact that the amounts paid out under this program are quite considerable clearly shows the federal government's commitment to this principle.
The basis of the equalization formula is a revenue fund from which the provinces can draw. As the bill indicates, the revenues are generated by oil and natural gas and in particular they come from the sale of Crown leases and reservations on oil and natural gas lands. The reason why these two sources of revenue are removed from the revenue fund is that since 1975-76 especially there has been a very rapid increase of these oil revenues which throws off balance so to speak the fund made of these various sources of revenues.
Therefore, over a two-year period, the revenues generated by the sale of Crown leases on oil and natural gas lands will be removed for purposes of equalization. 1 would also like to indicate that as a result of representations made in the course of the debate on this bill, the government decided to remove clause 3 of the bill on reimbursements under the Public Utility Income Tax Transfer Act. It has repeatedly been indicated during the debate-and the hon. member for Calgary Centre has reaffirmed it-that the financial consequences of this bill would be limited but that they would affect especially the province of Alberta. I should like to point out that it would also affect Newfoundland and Prince Edward Island. Many organizations, consumer groups, Members of Parliament, even the Minister of State for Economic Development, Senator
Olson, and my hon. colleague, the Minister of Employment and Immigration (Mr. Axworthy), have strongly argued that this provision should be withdrawn from the bill. Therefore, I am pleased to inform the House that as a result of those representations the government will drop Clause 3 from this bill.
Apparently we will have to proceed in the following manner: when the bill reaches Committee of the Whole and the Chair calls Clause 3, the government will vote against it.
That change will not affect the two other provisions of the bill dealing with equalization payments namely the revenue and the average personal income for the three years on the basis of which no fiscal equalization payment may be paid to a province.
We also heard the leader of the government in the House suggest that a task force be set up to study the 1977 act on fiscal transfers, as well as the Canadian welfare system and equalization program. I have a feeling that the task force could come up with interesting suggestions before we renegotiate those various programs with the provinces. I am confident the hon. members who are appointed to the force will work constructively and positively in an effort to help the government-through those programs-to communicate better with the provinces.
I should like, in closing, to thank very briefly the House leaders of the opposition parties, as well as the critics of those parties, the government House leader, the hon. member for Calgary Centre and the hon. member for Broadview-Green-wood (Mr. Rae), for their co-operation which resulted in a speedy passage of the bill this afternoon.
I think this week could be declared parliamentary efficiency week since we completed study of the income tax bill yesterday and we shall proceed with third reading of Bill C-24 within a matter of minutes. Therefore, I thank all the hon. members for their co-operation.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon-Mr. Ethier in the chair.
Clauses 1 and 2 agreed to.
The Deputy Chairman:: Shall Clause 3 carry?


Some hon. Members:: Agreed.


Some hon. Members:: No.
Clause 3 negatived: Yeas, 9; nays, 47.


[Stage Direction]
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Ethier):: When shall the bill be read the third time?


Some hon. Members:: Now.
February 5, 1981


Pierre Bussières: that the bill be read the third time and do pass.


[Stage Direction]
Motion agreed to, bill read the third time and passed.

[Stage Direction]
The House resumed, from Friday, January 30, 1981, consideration of the motion of Mr. Bussieres (for the Minister of Finance) that Bill C-59, to provide supplementary borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, this is the third time in little over a year that the House has been faced with a borrowing authority bill; this is the second borrowing authority bill presented to the House in this session of Parliament. The House will recall that in July of this year the government was given authority to borrow $12 billion. That was only eight months ago. So far in this fiscal year the government has borrowed from the public in general, on the open market and elsewhere, a total of $9 billion of new money. That is the figure, according to the Deputy Prime Minister and Minister of Finance (Mr. MacEachen), as of last January 15. Obviously there has been some borrowing since then, but in his statement the minister estimated he would need another approximate $3 billion to meet his requirements for this fiscal year.
When we went into this fiscal year the government had outstanding borrowing capacity, which had not lapsed, of $2.9 billion. To the $2.9 billion borrowing authority of the government at the beginning of the fiscal year one would normally add the $12 billion authorized in July, to give the government a total borrowing capacity in this fiscal year of $14.9 billion. As of December 15 the government had used up $9 billion of its $14.9 billion borrowing authority. At that point it still had $5.9 billion, and I remind hon. members of the minister's statement with respect to Bill C-54. Unfortunately for the government, Bill C-54 was altered by House order, so his speech on that bill was actually off the topic. The minister indicated that we had $5.9 billion left, and of that amount he anticipated he would need only $3 billion to the end of the fiscal year. That would leave the government at the end of March, 1981, with $2.9 billion of borrowing authority.
The government is coming to us and saying, in addition to the $2.9 billion of borrowing authority, that it needs an additional $14 billion. In other words, the government wants us to give it a blank cheque to borrow a total of $16.9 billion in the period ending March 31, 1982, which is more than the government has shown it needs for this fiscal year. Indeed it is significantly more than the government has shown in its budget for next fiscal year.
Borrowing Authority
If one is to examine the budget presented by the minister last October 28, hon. members will note on table 1 the amount required for borrowing. Hon. members will also note the deficit in the revenue and expenditures on a national accounts basis. The deficit for the year 1981-1982 set out in table 3 is $10,060 million, and the note to that table indicates that it is an average amount. However, if we go back to the summary of transactions, we find that the amount the government will require, according to its budget figures, is no more than $11 billion. On the one hand, the government is saying that it will have borrowing authority for $16.9 billion, but on the other hand the government tells us in that fiscal year it will need only $11 billion. The House is being asked to approve the borrowing of $5.9 billion more than the government budgetary requirements indicate. This is an unconscionable request of this House of Commons. There is no way that responsible Members of Parliament, responsible as Parliament is to control the public purse, can in any conscience grant this request for the right to borrow money. I say, "No way". The government's figures do not add up. The government does not need that much money; there is no real requirement for it. The government is asking this House to approve $5.9 billion in borrowing authority over the maximum amount the government could possibly need, that is, in accordance with its budget.
The government tells us its budgets are right and it is capable of managing people's affairs; that is what we hear. The minister was in Toronto the other day talking about his monetary and fiscal policy, his policy of gradualism and his policy of restraint. We know about this government's restraint attitude. It is so restrained that the government is asking us to give it $5.9 billion more than it even wants in its budget! Is that restraint?
Let us look at some of the government's problems. It is only when we are responsible and pay attention to what is ongoing on a fiscal basis in this country that we, as Members of Parliament, earn our pay and earn the respect of the citizens of Canada. The problems of the government financing are simply horrendous.
Today, again, interest rates determined by the Bank of Canada stayed at 17.11 per cent. Some would ask, "Well, isn't it marvellous the government is able to keep interest rates at the same level of 17.11 per cent as it did last week?" But, the wire service report this afternoon, after the Bank of Canada's auction of treasury bills, indicated that the Bank of Canada so interfered with the bid on treasury bills this week that it was able to keep the 17.11 per cent rate from going to where it should have gone, that is, to 17.30 per cent. We will know exactly what happened at five o'clock this afternoon when the Bank of Canada report comes out, but it is clear from the information leaked so far that the Bank of Canada again cranked up the printing press, bought up treasury bills and increased the amount of government monetizing in order to keep the interest rate where, I ask hon. members? It kept it at 17.11 per cent, but that is the highest rate the Bank of Canada has ever had in its entire history. Is that managing?

February 5, 1981
Borrowing Authority
The disaster of it is this: we owe the government, as of last week, a net debt-and I am talking net, net, net debt-of well in excess of $80 billion. The worst of that net, net, net debt is that most of it, a good half of it, is what any accountant would call a current liability.
Every week the government goes to the financial markets and must borrow at least $1 billion. In some cases it borrows up to $1,500 million every week. That is just to roll over its treasury bills and pick up an extra $100 or $200 million to cover its deficit. It is a weekly performance. Those treasury bills are written for 90 days, 91 days or 182 days. They are short-term loans. They are due. They are what an accountant would call a current liability. Of that current liability, in the statement of last week, the government owed $20.9 billion on treasury bills alone.
In addition to that, the government owes on Canada Savings Bonds not quite $17 billion. I want to speak for a moment about that form of debt, namely, that in connection with Canada Savings Bonds. As you know, Mr. Speaker, those bonds can be cashed at any time without notice. Therefore, they are a current liability of the government. Today we have a Canada Savings Bond interest rate of 11.5 per cent. We all know by looking at every bank advertisement across the country that one can go today to any savings bank, chartered bank or trust company in Canada and receive 13 per cent on one savings account. We all know that guaranteed investment certificates are being marketed today at 13.5 per cent, sometimes 13.75 per cent. Some smaller institutions offer interest on those certificates even up to 14 per cent.
We all know, if we have any intelligence at all, that the forward outlook for interest rates this year indicate that interest rates will remain high for the balance of the year. When one looks at the bid price of commercial paper running six or nine months down the road, and when one looks at one year paper, the rates quoted on the commercial market are close to 15 per cent, if not higher. That must indicate something.
It must indicate that the market believes interest rates are likely to remain in the 15 per cent range, at least for the balance of the year, while the Bank of Canada rate today, by its manipulations, is only 17.11 per cent. The interest rate forecasts indicate that at no time this year will the Bank of Canada rate, to wit, the rate at which the Government of Canada can borrow money, be below 15 per cent. That is a horror! We in this country have been faced with interest rates in the 17 per cent range on the Bank of Canada basis for eight weeks now, and there is no prospect of those rates declining. We are talking about that rate when we talk about government debt, money which it must borrow.
The Minister of Finance indicated in the budget that his cost of carrying borrowed money for this fiscal year would be $10.25 billion, but that projection was made on October 28 when interest rates were 5 per cent to 7 per cent less than today. That projection is wrong by a full four months. It
indicates that the government's budgetary handling of debt costs is wrong. What I am afraid of-and what a number of members on this side and surely members opposite are afraid of-is that under this bill we will be giving the government borrowing authority so that it can borrow money to pay the interest on the money borrowed at the high interest rates that this high-interest government has created.
When we get into this whole problem we must look very seriously at where we are going in Canada. The late John Diefenbaker said, "Where are we going, where are we going?"
1 should like to read into the record the remarks of Richard Thomson, chief executive officer of the Toronto-Dominion Bank, at the annual meeting of its shareholders. He said:
The high level of Canadian inflation and the expectation of it continuing at even higher levels set a floor on Canadian interest rates as the Bank of Canada sought to maintain Canadian interest rates above the rate of inflation.
He went on to say:
As United States rates jumped to new highs, the Canadian authorities, particularly the Bank of Canada, had the option either to increase Canadian interest rates or to witness a decline in the Canadian exchange rate.
The government, in its management, decided to keep interest rates high in Canada so that it could keep the dollar high. Well, let us look at the dollar for a moment. It has not done very well recently. At noon today it was only at 83.56 cents in New York.
The government has succeeded in keeping the interest rates exceptionally high. The disaster of that is that the bulk of the borrowing in Canada is being done by the government itself. So, when we on this side of the House talk about the terror of high interest rates to people who hold mortgages-and it is a terror-and when we talk of high interest rates affecting consumers-and it is really hurting them-and when we talk of high interest rates destroying business, particularly small business, the fact of the matter is that we are all paying for the disaster of high interest rates because we are all Canadians. We are all stuck with paying this horrendous rate on what amounts to current account borrowing which the government foists upon us.
It has been suggested that we could allow our dollar to drop, that we would be far better off to allow that to happen. A drop in the dollar would add to inflation about one-third of a per cent for every 1 per cent drop in the dollar. 1 suppose the truth of the matter is that if we really wanted to manage our economy properly then we could have both a strong dollar and low interest rates.
We all know that the budget of October 28 has been a disaster. Every financial organization from the Economic Council of Canada to the C. D. Howe Institute, every spokesman for every bank and every economic group, has panned that budget. The Economic Council of Canada's analysis of the budget indicated that it caused a 1 per cent rise in inflation alone for 1981. The budget is a disaster. Instead of encouraging energy activity, drilling, construction and encouraging investment into Canada, the budget drives investment out. No wonder our dollar goes down despite high interest rates. If we worked it the other way around, if we encouraged development
February 5, 1981

in Canada, got rid of that energy package or reversed it, and did everything possible from a tax point of view to encourage development which is available in western Canada and the rest of the country, in terms of pipelines in the east and so on, we would be going ahead.
The only thing this government has done so far with respect to its energy package is to make a deal to spend $1.5 billion to pay shareholders of Petrofina $120 per share for shares which six months ago sold for $60. That is what the government has done. Isn't that dandy? My friend says they should have expropriated them at $60 rather than pay $120. And what did they receive? Some 1,100 service stations. Really, that does not make sense. Do we need to buy a bunch of used service stations when we are trying to build Canada?
Only recently the Petrofina station in Lome Park reopened because the company, in desperation, finally turned it over to a local operator for next to nothing in terms of rent. The operator is having a hard time to make any money since nobody wants to buy the product, and there are too many service stations around, anyway. We have all driven around our constituencies and seen those whitewashed service stations. But, what does the government do? It goes out and spends $1.5 billion to buy a bunch of used service stations. That is stupid.
There are many things the government should be doing. It should be encouraging new investment. What is the use of paying the Belgians $120 a share for assets which are already here? If they really wanted some service stations, why not build new ones? It would create some employment. But, what does the government give us? Nothing but a bunch of used service stations.


John Leslie Evans: You know as well as we do that we are buying a stream of future benefits. You are saying future benefits are not worth it. We say they are.


Donald Alex Blenkarn: The parliamentary secretary is talking about future benefits. I think the future benefits for most people in Canada should take the form of more jobs and higher pay packets-in terms of real value in their pay packets tomorrow than they have today. The assurance of the past four years, to most people, has been that their purchasing power for the same amount of work and effort has been less and less. Indeed, on average, Canadians probably slipped behind very close to 4 per cent in 1980.
The government must reduce its borrowing requirements, and it cannot be done by buying new service stations and borrowing money at 17 per cent or 17.5 per cent. The government must learn to better manage its accounts and not to borrow as much. What bothers me is the quantum of the debt requirements of this government for new money every year. The requirements in the budget were approximately $11 billion, and it was indicated that the requirements would be less for next year. That is not good enough, but it is good. However, I fear that in fact this will not be the case.
Borrowing Authority
The problem is that the government's borrowing is beginning to crowd out the private entrepreneur, people who wish to take out mortgages and others, in terms of their ability to borrow money. When the government goes to the financial market it is with the highest possible credit rating, at least in its own country, although that may not be the case abroad. When the government goes to the financial market and is prepared to offer 17 per cent for money, as is the case with this government, it forces those persons who need money to match or better the government.
These people who must better or meet the government's ability to borrow in the marketplace are eventually crowded out. As the governor of the Bank of Canada has said, there is no limit as to how much the government will pay-it has a printing press and is able to pay. The effect of the government's willingness to pay these high rates of interest is that it crowds out business and development, and we end up with an economy which performs at less than its potential. As the Economic Council of Canada indicated at page 63 of its report:
There has been no evidence that this has happened,-
It was referring to the crowding out.
-but lenders have insisted on shorter duration agreements and new instruments with extendable terms. This means that the government must refinance a larger portion of its debt each year and thus it may face a debt management problem.
As a result, the government goes further into debt, crowds out other forms of investment, and deals more and more in the short term because people have no confidence in it all the time absorbing all the available money in the system. The result of the enormous deficit and borrowing requirements authorized by this bill is that it puts jobs and the hopes of Canadians in serious jeopardy.
I should like to speak for a moment about what I perceive to be some of the problems. I hope the task force committee which will be looking at the financial arrangements between the federal government and the provinces will become involved with some of these problems. In my view the most serious problem in this country is set out in the report of the Economic Council of Canada:
A good part of the persistent federal deficit can be attributed to below potential performance. Moreover, because the resource royalties and surplus on the Canada and Quebec Pension Plans, the combined deficit of all governments in Canada is expected to be replaced by a surplus . . . However, it is the large federal deficit, rather than the over-all government sector-
This is the cause of the problems of the federal government.
Because the federal government carries out the equalization system in Canada and because it has become involved in matters which constitutionally belong to the provinces-and as a result it no longer has the resources or other revenues to balance out-obviously it becomes necessary for the federal government to reduce its expenditures. The first step of the government should be to cease its involvement in matters of provincial concern.
Throughout the 1960s and 1970s this government entered into one field after another which, by virtue of the British North America Act, were within the competence of provincial

February 5, 1981
Borrowing Authority
governments. An hon. member from the New Democratic Party spoke this afternoon about medicare. While it is great to have a national standard, the operations of hospitals and medical services clearly fall within the scope of the provinces.


John Leslie Evans: Are you against medicare?


Donald Alex Blenkarn: Of course not, but who must pay for it? Part of the expense must be transferred to the provinces in order to stop this federal borrowing. Let us let the provinces handle some of the problems they should have handled all along.
We in this Parliament have a tendency of wanting to get into every act in the country. For example, the budget of the minister responsible for CMHC for this year is in excess of $1.3 billion. I am not against housing-and governments have certain responsibilities with regard to housing-but does the federal government have any responsibility in the area of housing? I have heard members of this House, including some of my colleagues from Vancouver, cry about the housing problems in that city. The province of British Columbia is well off and can look after its own housing problems; it does not need to come to the federal government for assistance. This government should stick to the areas in which it performs well and not go into areas of provincial jurisdiction, because it merely gets into the position of needing to borrow more money.
As the result of the government's involvement in matters of provincial jurisdiction, the bureaucracy grows larger and the financial markets of the country become upset. The Economic Council of Canada suggested that the provinces, because of their resource potential and their methods of taxation, should have access to revenue and should have surplus revenue. We all know, when a government has surplus revenue, that the funds quickly disappear into new social programs and more government.
The problem with which the task force will have to deal is that equalization goes to the root of the federal deficit and, to some extent, to the root of our constitution. This problem should be attended to and solved immediately. When we talk about constitutional patriation, we must also look at the revenue or the dollar and cents end of the matter. It is absolutely foolhardy for provinces, with their surpluses or their easily-carried deficits, to be able to expand their programs while the federal government is requesting borrowing authority for $14 billion.
The government has gotten itself into a backward mess. It has become involved in fields in which it does not belong. However, the government is remaining in those fields, is trying to borrow money, is upsetting the entire interest market in Canada, is crowding out private borrowers and is upsetting the mortgage and business investment markets. It will not get down to the brass tacks of understanding where its responsibilities and those of the provinces lie.
I am glad this task force has been appointed. It will bring to the attention of the House the place where the responsibilities of this government begin and end.
In the couple of minutes that I have left, I should like to return to some of the provisions in the budget and to compare them with what could have been done to get Canada going again and to bring interest rates down, so that the country could grow and federal tax revenues would be more buoyant.
Last year's Crosbie budget contained a provision relating to registered retirement savings plans. If those plans had invested their funds in stock market equities and a capital gain was made, it would have been taxed as a capital gain when the plans were dissolved and not as income as is the case at present. That measure would have encouraged more Canadians to enter the equity market and would have lessened the debt field. It would have had the tendency of keeping rates down considerably, at the same time as providing equity capital for the burgeoning commercial activities that need frontend money in Canada. That provision is not included in the present budget, and that is one of the reasons we do not have the growth that we need to support our dollar and to avoid continually raising interest rates and bringing money into the country to finance debt.
There is the question of the capital gains tax itself. Recently, the government issued a white paper or a pink paper on capital gains taxes. This paper attempts to justify the capital gains tax. I was surprised that the President of the Treasury Board (Mr. Johnston) did not comment on the paper as, prior to his election to Parliament, he made many comments regarding capital gains. He said the tax was ridiculous, wasteful and harmful but he has not commented on this paper. 1 would be interested to see the government do what it should-bring that paper before the finance committee where it could be discussed and the justification for capital gains tax examined.
I know that one of my colleagues would like to speak before five o'clock, Mr. Speaker, so I will conclude my remarks.


John Leslie Evans: I rise on a point of order, Mr. Speaker. I wonder if the hon. member would entertain a question?


Donald Alex Blenkarn: Certainly.


John Leslie Evans: I listened very carefully to what the hon. member had to say. At one point he indicated that the government was asking for $5.6 or $5.9 billion more than the projected requirement. In the budget papers for 1981-82 the projected deficit is $13.7 billion and the borrowing authority is requesting $14 billion. Could the hon. member explain or tell me where his figures are to be found? I would like to know from where he gets $5.9 billion in excess borrowing authority.


Donald Alex Blenkarn: Mr. Speaker, I will be delighted to inform the Parliamentary Secretary to the Minister of Finance (Mr. Evans) from where the figures come. If he has a copy of the budget before him, he will see on page 23, "Table 3, Government of Canada, Revenues and Expenditures, National
February 5, 1981

Accounts Basis". In a column headed "1981-82", which is the next fiscal year, the surplus or deficit-and it is deficit-is shown as $10,060 million.


John Leslie Evans: From where did you get 5.9?


Donald Alex Blenkarn: If you start on the basis of what the Minister of Finance indicated to the House on January 15 that in this fiscal year the government had borrowed $9 billion-


John Leslie Evans: It expires on March 31.


Donald Alex Blenkarn: All except $2.9 billion.


John Leslie Evans: That was used last year.


Donald Alex Blenkarn: It does not expire; you still have it.


John Leslie Evans: No.


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member for Mississauga South (Mr. Blenkarn) has the floor.


Donald Alex Blenkarn: The borrowing authority that the government obtained was for $12 billion. It had $2.9 billion, so that gives $14.9 billion. It spent $9 billion, so it has $5.9 billion left. The minister indicated that he needs $3 billion in order to finish the year. This will leave him with the $2.9 billion that he had at the outset.


John Leslie Evans: A point of order. The hon. member is simply wrong-


The Acting Speaker (Mr. Ethier):: Order, please. What began as a question and an answer is now debate. The hon. member for Vegreville (Mr. Mazankowski).


Donald Frank Mazankowski: Mr. Speaker, I did not want to cut off the hon. member for Mississauga South (Mr. Blenkarn) or the very interesting debate that was going on. The hon. member's comments have been most incisive, and I certainly want to associate myself with them. I think his description of the package before us and the performance of this government as a bit of a horror show was most apt.
The $14 billion borrowing authority that the government is asking Parliament to approve must be examined against the background of successive budgetary deficits. On page 43 of the budget document presented to the House on October 28, it is shown that for the past four years the accumulation of budgetary deficits amounts to some $40.1 billion. The projected figure for the next four years for the total anticipated budgetary deficit is $51.8 billion. That is almost $92 billion in budgetary deficits which have accumulated over a period of eight years. That clearly shows a government out of control, and I think most Canadians would find those figures incredible and shocking.
We are not capitalizing on the production potential of the country; instead we are following a philosophy of trying to borrow ourselves rich. We are not stimulating the economy or the production capacity of the country so that it can support
Department of Public Works
expensive government programs. This is very disturbing. We are mortgaging our future and placing an almost impossible burden on our children and our children's children.
The hon. member for Mississauga South spoke of the country's net debt. By March our gross national debt will exceed $120 billion and the net debt will exceed some $80 billion. The interest on that debt is in excess of $12 billion annually. We are spending $1 in $4 on interest on that debt.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
[ Translation]

The Acting Speaker (Mr. Ethier):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Lisgar (Mr. Murta)-Transport-Crowsnest Pass rates-Establishment of short-term study-Reported lobby by food processors; the hon. member for Burlington (Mr. Kempling)-Bankruptcies-Re-Mor management investment-C & M Financial Services-Investigation conducted by committee of Ontario Legislature; the hon. member for York-Peel (Mr. Stevens)-Energy-Projected price increases for crude oil.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's Order Paper, namely, notices of motions (papers), private bills and public bills.


PRIVATE MEMBERS' MOTIONS FOR PAPERS
The Acting Speaker (Mr. Ethier):: Is there unanimous consent that all notices of motions prior to No. 35 stand, by unanimous consent?


Some hon. Members:: Agreed.
DEPARTMENT OF PUBLIC WORKS Mr. Hal Herbert (Vaudreuil) moved:
That an order of the ttouse do issue for a copy of the document prepared in or before October. 1970, which was either submitted to cabinet or prepared for submission to cabinet and which dealt with the restructuring of the Department of Public Works including the option to form it into a Crown corporation.

February 5, 1981
Department of Public Works
He said: Mr. Speaker, I will readily admit that my motive in putting this motion on the Order Paper was not to get production of the document referred to since I was already aware of its content. However, I believed it would give me an opportunity once again to shed some further light on a difficulty I have been working on over the years. 1 refer to the continuing duplication of efforts in various departments. This afternoon I want to discuss specifically property management and construction work as it applies to the public service.
The parliamentary secretary mentioned that the document was a cabinet paper. I might take issue with that. As far as I am aware, it never got to the cabinet table. I suspect it was just a presentation for the approval of the Prime Minister (Mr. Trudeau). As I understand the story, this document was presented at the time of the October crisis in 1970, and as a result, it was put away for the time being. Eleven years later, we are still talking about what was proposed in 1970 and what still has not been done in 1980.
My original interest in this subject predates my entry into the House of Commons in 1972. I must admit that, as a construction man, in those days I was somewhat concerned about the efficiency, or lack of efficiency, in the Department of Public Works. I was anxious to find out for myself just what the situation was in that department. To put the parliamentary secretary at rest, I am not going to be too critical of the department this afternoon. In fact, I have been suggesting all along that the problem is that this department has not had a full opportunity to take over, as was proposed in 1970, complete control of construction activity and property management in the public service. It was not until 1975 that I started to put case files together. The more I did so, the more concerned I became.
It may be advisable to say a few words about the department by way of introduction. The Department of Public Works provides accommodation and related realty services to government departments and agencies. These services include construction of buildings, purchase and disposal of land and other real property, rental of premises and the maintenance, improvement and operation of properties owned or leased by the Government of Canada. In addition, on request the department supplies government departments and agencies with technical and construction management services for capital projects.
In his report, the Auditor General commented that there are two principal systems in planning for the acquisition of space. The planning and control system is used to plan the department's internal resource requirements based on projected work load. In order to be fully effective as a foundation for departmental planning and forecasting, the planning and control system must be linked to an extensive data base which includes cost inventory and other operating data. This data base has not been fully developed. Furthermore, actual expenditures were not being systematically compared to plans or budgets to determine the quality of the original plans, nor could changes in the level of funding be related to changes in resources required for individual projects.
The Auditor General concluded that the management of eight of nine projects examined did not demonstrate a reasonable standard of due regard for economy.
Among the Auditor General's recommendations, one can read that the role of the Department of Public Works and its program objectives should be clarified. The department commented on the recommendations and agreed with this one. For the past several years the department has been seeking approval for a modified role and mandate in the context of proposals concerning the rationalization of real property operations in the federal government. I might add that in place of "the past several years", one should read "a minimum of 14 years". In fact, in these short remarks, in which I can only lightly gloss over the problem, I shall be talking of the history of the past 17 years.
The Glassco proposals of some 17 years ago created considerable interest in reform. In 1964, a committee of senior public servants was convened to review the proposals and to make recommendations to ministers. The Glassco commission singled out for special mention the fact that real property activities had become diffused among a large number of departments. It suggested that the Department of Public Works should be made responsible for the planning and supervision of all construction required by civil departments and agencies.
As I said earlier, while I obviously have a few criticisms of the department to make, the reason I mention these and put them on the record is because I have felt all along that these criticisms are being used as excuses by other departments which have not, for various reasons, wanted to co-operate in this exercise of developing for the Government of Canada a single construction company.
Looking at some figures, we see that the Department of Transport from 1975 to 1977 carried out construction amounting to $160 million to $180 million a year.
In the Post Office Department-and this was looked after by the Department of Public Works-construction activity in those same years was running at $50 million to $75 million a year. 1 mention this because with the Post Office becoming a Crown corporation, it is possible that this construction workload may be taken away from the Department of Public Works.
I want to refer to the Department of National Defence; construction in those same years ranged from $50 million to $70 million per year. This work, of course, was carried out by Defence Construction (1951) Limited. I will say right now that if I had any criticism to make of any construction department, it would be DCL.
My reasons there are best illustrated by the construction work that was carried out at the St. Jean military base in Quebec. Construction figures for 1976-77 were $14 million; for 1978, $36 million; and 1978-79, $27 million. Sixteen contractors on that site had extras or additional amounts added to their contracts exceeding 20 per cent of their original signed contracts. That construction exercise at St. Jean, as everyone knows, went considerably over budget. Whether that
February 5, 1981

was justified or not, I believe all construction work should be under the same set of rules and regulations.
It is extremely difficult for the construction industry to cope with the varying tendering methods of various departments, the Ministry of Transport, the Ministry of National Defence and, rather strangely, the Department of Indian Affairs and Northern Development which gets into the construction act as does, for example, the Department of Veterans Affairs.
I have put on the record before and I should like to mention again, that I saw absolutely no reason why the Department of Indian Affairs and Northern Development should be building some steps on the east corner of the Parliament Buildings. I inquired the reason why that department was building them and was told at that time that department was responsible for the canal which belonged to Parks Canada, which in turn is part of the Department of Indian Affairs and Northern Development. I want to put on the record once again that those steps down to the canal cost us over $500,000, and $500,000 to me represents something like $1,000 a week in interest alone to walk down those stone steps. I suggest that work should better have been done by the Department of Public Works, where it would have been publicly tendered.
Back in 1969 the mood was to change the Department of Public Works into a Crown corporation. 1 do not support that particular proposal. I believe that situation now has been put aside, and I doubt there is any inclination to make it into a Crown corporation. I am not sure that would resolve any problems at all.
The deputy minister at that time, who was put into his job by the Prime Minister with the specific responsibility for reorganization of the Department of Public Works, was Mr. John MacDonald, who today, in 1981, is the chairman of the Tariff Board court. He was saying that the responsibility of the proposed new corporation-whether one talks of a Crown corporation or a reorganized Department of Public Works is unimportant-would include the integration of the existing Defence Construction Limited. Twelve years ago it was being suggested that Defence Construction Limited should be wound up in its present form.
I received a rather interesting answer to a question I put on the Order Paper in connection with Defence Construction Limited. I must admit I found it rather amusing and I should like to read it. I was asking why the work of Defence Construction Limited could not be equally well carried out by the Department of Public Works, and the answer contained the phrase:
"Each time this matter was considered it was agreed that in order to meet the objectives of the Department of National Defence a quick response capability was required."
Of course, I could not resist the temptation then to ask a question as to why the Department of Public Works was unable to provide a quick response capability. "The decision", they say in the answer, "did not imply that the Department of
Department of Public Works
Public Works was unable to provide a quick response capability." In fact, I think wc had a bit of a runaround on that one.
I notice in the estimates for the year just concluded-and I assume this week we are to see the new figures-that the Department of Public Works budget is presently at $754 million, and I believe in supplements there was another $1 million added. In any event, the total for the year is some $755 million. That is quite a sum of money. In fact, if one adds the construction activities of Transport, National Defence and so on, one comes to a sum in excess of $1 billion.
The problem back in 1970 was one which is continually being experienced in our public service, the initialling of some agreement between deputy ministers and then changing position. At that particular time the two deputy ministers concerned were Mr. Simon Reisman, who was secretary of the Treasury Board, and John MacDonald to whom I have already referred. They were in essential agreement on the direction in which we were to be going.
However, the usual forms of delay were brought in, additional task forces were put into operation, additional studies were required, and then in 1970 Simon Reisman became deputy minister of finance. His place as secretary of the Treasury Board was taken by Mr. A. W. Johnson.
Reisman had expressed strong support for the MacDonald proposals from the very beginning and, indeed, with regard to several major points, had urged similar action upon the Department of Public Works previous deputy minister through 1968 and 1969. That, of course, was prior to the appointment of Mr. MacDonald who was sent there for the express purpose of reorganization.
There then obviously was some reluctance on the part of Treasury Board to proceed. I found it quite interesting that just a couple of months ago, on going through the minutes of a meeting of the Standing Committee on Communications and Culture, the same Mr. Johnson appeared as a witness, that is, Mr. Johnson who is now the president of the Canadian Broadcasting Corporation. Let me quote him as follows:
I want to say something about my own preoccupation with efficiency because I really want to make it clear to the committee how strongly I feel about efficiency.
He went on to state:
I reflected a great deal ... on the line of questioning about the comprehensive audit and efficiency.
He went on to state:
My interest in this field goes back a long way. My first five years in government were spent doing efficiency studies. I appeared on a platform with James Macdonell-
That was our last Auditor General.
-and with Walter Gordon, who was then in the consulting business in 1952. 1 published an article on efficiency in government and business in 1962... As Secretary of the Treasury Board here in Ottawa, I was responsible for supervising the experimentation that was being done in the field of PPBS which has now got the new name of "Efficiency and Effectiveness".
He then said:
I do favour a comprehensive audit in the field of economy and efficiency.
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As late as two months ago Mr. Johnson, who was then secretary of the Treasury Board, was talking about efficiency in the public service, yet despite all the studies that were done and the general agreement, there was no inclination to proceed to give the authority for the necessary reorganization of Public Works.
Why I am opposed to this overlapping of responsibility is that so often throughout the public service we find not only is there an overlap but there is, sometimes, something missing as a result. This makes it possible for everyone to blame everyone else for what is not done.
As late as last summer I pursued for some time some restructuring of our Canadian embassies in foreign countries, where I felt there were too many people duplicating effort from too many different departments. The Prime Minister issued a communique at that time in which he decided that the work of three ministries would be co-ordinated under one ministry. I sent him a note suggesting that was fine as a start, but then we should start incorporating the other four which are represented in our foreign embassies.
The reason 1 did this was that back some few years ago- five years almost-we had some difficulties in our coastal waters. 1 put a question on the Order Paper concerning surveillance of coastal waters and found that six different ministries have responsibility for surveillance of our coastal waters. This meant at that particular time that it was possible for six ministers to pass the buck when we had difficulty in a search and rescue operation.
There is so little opportunity in 20 minutes to say everything one would like. There is so much more I want to say and it is unfortunate I will not be able to develop the theme 1 wanted to, discussing changes in ministers as well as the change in deputy ministers. I will only name them. We went from Mr. Arthur Laing to Mr. Jean-Eudes Dube, and they have changed fairly regularly in the past several years. It is in part these changes at this level and the problems respecting the responsibilities of deputy ministers which leads us into a situation where if nothing can be done in a very, very short period of time, the chances are that all we need to do is wait for the next change, either in a ministerial or deputy ministerial position, and then we can go back to sleep for another year.
This work has been going on now for something like 17 years, according to the records I have here. This was dealt with very thoroughly in the Senate study on the accommodation program of the Department of Public Works. The recommendations deal specifically with what I have been proposing, the co-ordination of the activities of all construction and property management under one head. I hope some day someone will do something to get rid of this overlapping responsibility, which results in a waste of money and decreased efficiency.


David Michael Collenette: Mr. Speaker, since I know how concerned the hon. member is about this subject, I suggest he be given a
few more minutes to continue, if he wants to develop his theme. I do not know whether he wants to continue for a little while longer. I would certainly be prepared to yield the floor to him.


The Acting Speaker (Mr. Ethier):: Is that agreed?


Some hon. Members:: Agreed.


Stanley Howard Knowles: Are you short of speakers this afternoon?


Mr. Herbert:: Thank you very much, Mr. Speaker, and I thank as well the members of this House.
Yes, it is true that I came with a relatively limited amount of material, knowing we are ordinarily limited to 20 minutes, but there is quite a bit more I would very much like to put on the record.
I would particularly like to develop the theme concerning the various responsibilities. Well after the conclusion of the task force sessions, and despite efforts over a two-year period, it was not possible to develop the necessary accord with the Treasury Board Secretariat-I referred to that before, and the gentleman concerned-for combining forces to move the mandate ahead.
The primary reason was that early in 1970 Simon Reisman was moved from the Treasury Board. Constitutional doctrine and practice holds that a minister is responsible not only for the direction of his department but also for its administration. The statutes also provide for the appointment of a deputy minister, but they are silent on his role. The minister is more than fully occupied by the overwhelming questions of policy and, as I have said here in the House often, that probably is a good thing. As a result the minister will not likely delve into the administration of his department and will, in my opinion quite rightly, leave the administration to his deputy minister.
The pressures of ministerial responsibility force the division of labour along reasonably clear and acceptable lines. I have also suggested that that is a good thing because probably most of our ministers-and I say this not unkindly at all but as an objective comment-are not sufficiently trained to be departmental administrators. Those who have the ability and knowledge to get into the administration of a department are probably smart enough to keep their fingers off.
A well-known gentleman who was very involved at that particular time, Gordon Robertson, was the clerk of the Privy Council at that time. He had been consistently sympathetic to what the Department of Public Works was proposing and, of course, the intent was to make a single designated agency. The Department of Public Works was battling the Ministry of Transport, the National Capital Commission-which 1 have not already mentioned-the Department of National Defence, the Department of Agriculture and the Department of Indian Affairs and Northern Development.
Revenue dependency was a contentious issue between the Department of Public Works and the Treasury Board Secretariat. I have made little reference in my remarks- because time did not permit-to revenue dependency, in which
February 5, 1981

I firmly believe and 1 hope one day will be the method by which we operate. If I may, I would just like to refer to the Senate committee document produced in September, 1978. The document indicates that only under revenue dependency will the Department of Public Works be faced with the same kind of financial discipline which constrains private developers, a discipline which should lead to the construction of less costly buildings.
My original suggestion some years ago was that the estimates which are presented in the blue book to which I have referred already-assuring a total for the Department of Public Works of some $755 million for last year-should in fact be reduced to the salary of the minister and his automobile. I have been frustrated over the years in trying to get answers in committee with respect to the various amounts that are spent by departments for accommodation and so on and, of course, we always receive the same answer, that the moneys are actually spent by the Department of Public Works, and the figures are only given to carry in its estimates. I think the problem which will have to be very clearly identified is that if we ever get to full revenue dependency, we will have to lay down the law to various departments that the figures which will become part of their budgets must, of necessity, be fully understood so that they will be able to answer for those expenditures in committee.
I appreciate this opportunity to continue, but because I intentionally brought with me material only for a 20-minute speech, if I try to go on any longer I fear that 1 will include material which is not particularly relevant to the subject under discussion. May 1 only say again that my objective this afternoon is to point out once again the inefficiencies and the inadequacies of allowing six or seven different departments to have their own construction companies and their own construction forces. It would be much more efficient to centralize everything in one organization and, if the excuse for not doing that is any alleged inadequacy, weakness or inefficiency in the Department of Public Works, to ensure first that that department is a top-notch efficient construction organization which can operate in the most efficient possible fashion. If that can be accomplished, then we will have not only a substantial reduction in the number of personnel working in total throughout the various departments, but it will also be possible, via the reorganization, to identify better the millions of dollars which we are spending in the field of construction, acquisition of land, acquisition of building, etc.
I hope that in the very near future some positive move will be made to bring in the necessary changes which will result in these efficiencies.


David Michael Collenette: Mr. Speaker, before I refer to the point at hand, the motion of the hon. member for Vaudreuil (Mr. Herbert), I would like to pay a sincere tribute to him because he is one of the few members of this House who takes advantage of this provision in the rules for the use of this time every second Thursday-but really most Thursday, because we do not have many private members' private bills-on notices of
Department of Public Works
motions for the production of papers. I hope more hon. members of this House could be encouraged to use this period. It has been noted that the hon. member for Vaudreuil is often on his feet on Thursdays during this hour. That is because he takes advantage of the rules as they were intended, and perhaps other members could follow suit. When they look at pages 94 and 95 of the Order Paper hon. members will notice that there are only perhaps half a dozen notices of motions for the production of papers. If we are to continue to justify this hour being left in our rules, hon. members must take advantage of it. I hope other hon. members will follow the lead of my colleague, the hon. member for Vaudreuil.
I am very pleased to participate in this debate. I do not propose to focus on the substantive questions which the hon. member for Vaudreuil raised, that is the contemplated restructuring of the Department of Public Works in 1970. Rather, my remarks will deal in a more formal way with the protection of confidentiality of government documents.
I would like to explore the background to the important constitutional convention involved while we talk about protection of cabinet documents. Some of the remarks that I will make will follow on the heels of the debate we have had on Bill C-43, which I believe we debated last week. I think it is very appropriate that I deal with this aspect of the notice of motion put forward today by the hon. member for Vaudreuil.
In the few moments that 1 have I would like to examine the way other jurisdictions deal with executive powers and confidentiality of documents, and to look at the system of government where the executive is accountable to Parliament, such as ours. I will outline various examples.
I shall refer also to the positions taken by other parties represented in the House as well as to views put forward by persons knowledgeable of our constitutional institution. There is a general acceptance in our society, especially among members of this House, that the cabinet system should be allowed a certain degree of confidentiality so that it can make decisions in an atmosphere which is removed from the strains of public pressure. If ministers were expected to consider important issues and make decisions in a fish bowl, that is in full public view, they would inevitably feel inhibited in collectively deciding what is in the best interests of this country. They would be subject to the pressures of those who cry the loudest of the most effective of the lobby groups. This is a real concern in society today, and notwithstanding the fact that we protect the confidentiality of cabinet documents, we see that our system of government is becoming more and more imprisoned by the actions of effective lobby and power groups. In a sense the rights, responsibilities and the duty toward the ordinary citizen in society seem often to get on the wrong side of issues, or to get the short end of the stick. We find very effective, powerful, well-financed lobby groups able to influence decisions. It is my contention that if we were to make the system much more accessible, we would see this tendency to increased pressure

February 5, 1981
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from lobby groups become even stronger and perhaps work to the detriment of our democratic system.
The principal rationale for claiming protection for cabinet papers is that these documents reveal the process whereby the government, as a whole, establishes collective responsibility for actions that will be taken by individual members or by the Crown. Therefore, 1 think it is well accepted that the principal role of cabinet is political rather than administrative and that its political function merits special protection. This protection is founded on the convention that cabinet solidarity is essential to the maintenance of confidence in the ministry. Disclosing papers reflecting the process whereby ministers establish collective responsibility would jeopardize the unity and hence the viability of the ministry.
The confidentiality attached to cabinet documents is not merely a time-honoured tradition, but an important constitutional convention applicable in all parliamentary democracies based on the British system. It is recognized in the United Kingdom, in Australia and New Zealand, as well as in this country.
The authoritative statement of this convention is to be found in the judgment rendered by Lord Reid in his landmark decision, 1 believe in 1968, in the case of Conway versus Rimmer. That decision concerned the question of Crown privilege, but in it Lord Reid gives the views as to why the workings of cabinet ought not to be made public. In part, that decision read:
I do not doubt that there are certain classes of documents which ought not to be disclosed whatever their content may be. Virtually everyone agrees that cabinet minutes and the like ought not to be disclosed until such time as they are only of historical interest. But I do not think that many people would give as the reason that premature disclosure would prevent candour in the cabinet. To my mind the most important reasons is that such disclosure would create or fan ill-informed or captious public or political criticism. The business of government is difficult enough as it is, and no government could contemplate with equanimity the inner workings of the government machine being exposed to the gaze of those ready to criticize without adequate knowledge of background and perhaps with some axe to grind.
In Canada the principle has been reflected in various official pronouncements over the years. I want to refer briefly to the 1973 guidelines applicable to notices of motion for the production of papers. Specifically, these guidelines provide for an exemption for "cabinet documents and those documents which include a Privy Council confidence''. In June, 1977, the same approach is reflected in a green paper issued by the then secretary of state concerning public access to government documents. The green paper specifically endorsed the idea that there should be an exemption for cabinet documents in any future access to information legislation.
It is interesting to note-and too often some of us forget- that the official opposition, when it formed the government for a brief period in 1979, also felt that cabinet documents ought not to be made public. I refer to their proposed freedom of information legislation contained in Bill C-15 which put forth a quite articulate and most detailed exemption covering all types of cabinet records. That particular exemption would have authorized the withholding of any proposals or recommendations prepared or submitted to cabinet, as well as other
related documents such as agenda of cabinet and documents reporting the deliberations or decisions of cabinet.
The exemption of the previous government also encompassed records used for or reflecting consultations among ministers of the Crown on matters relating to the making of government decisions or the formulation of government policies. As well included in the Conservative freedom of information bill was an exemption from the right of access to records containing briefings to ministers of the Crown in relation to matters that were before, or proposed to be brought before, cabinet. Finally, the exemption also covered draft legislation as well as cabinet discussion papers which were defined as being records containing background explanations, analysis of problems, or policy options submitted or prepared for submission to cabinet.
1 should point out that I was quite surprised, I believe last Thursday night, by statements of the Right Hon. Leader of the Official Opposition (Mr. Clark) when he intervened in second reading debate of the access of information legislation put forth by the hon. Secretary of State and Minister of Communications (Mr. Fox) in Bill C-43. The Leader of the Opposition claimed that this government's exemption for cabinet documents had been extensively broadened to include discussion papers with "background explanations, analysis of problems or policy options". As well, the Right Hon. Leader of the Opposition expressed shock at finding in this government's exemption "records used for briefing ministers in relation to matters that are before or proposed to be brought before cabinet".
1 would suggest that if the Right Hon. Leader of the Opposition had been curious enough to read his own legislation on freedom of information before participating in the debate last week, he would have seen that, save for a very minor technical change, the cabinet document exemption in Conservative Bill C-15 in the Thirty-first Parliament is identical to the exemption in Bill C-43. I point this out not so much to correct the statements of the Leader of the Official Opposition-which should be done anyway-but to show to this House how two major parties can be in agreement with the nature and scope of confidentiality to be accorded to cabinet documents.
As well, by the very practice they followed during the short period of time the Conservatives were running the country, the previous government endorsed the principle of cabinet confidentiality. To my knowledge, the outgoing administration also abided by the guidelines which came into force in 1973 respecting the motions for the production of papers.
There is broader agreement between the two main parties, to which I would like to refer at this particular point in time. When the Standing Committee on Regulations and Other Statutory Instruments came up with its own proposals for freedom of information legislation in 1978, its report contained a recommendation to the effect that documents prepared expressly for or in connection with the deliberations or deci-
February 5, 1981

sions of cabinet or the cabinet committee should be the subject of an exemption. 1 emphasize that the standing joint committee was composed of members of all parties represented in the House, as well as representatives from the other place. Therefore, on this particular aspect there was a parliamentary consensus in the full sense of the word.
Even among expert groups interested in the subject of government openness and freedom of information, there is a recognition that cabinet documents and cabinet procedures are worthy of special treatment. I refer in particular, to the model bill on freedom of information prepared in March of 1979 by the Canadian Bar Association. That model bill listed the exemptions which the Canadian Bar Association felt should apply to limit public access to government documents. The first exemption listed is the one dealing with cabinet records. In other words, the Canadian Bar Association probably felt that among all classes of information needing protection, cabinet records should stand out prominently.
This brief overview of the practices followed in other jurisdictions, of the constant position adopted by succeeding governments in this country, and of the views of the legal experts which l have given in the last few minutes, will show there has been over the years a consensus that the workings of cabinet should not be made public in a premature fashion, and that they should not be made public to the point where it would make the reaching of decisions a most difficult, if not impossible process. Therefore 1 would recommend that this House, in all its wisdom, reject the motion put forth by my good friend from Vaudreuil. As I said earlier, he put forward this motion with the best of intentions, with the best of motivations and with sincerity.
I wish to underline that the government is committed to the concept of open government. It has introduced legislation on access to information which is now before this House. We wish to proceed with that legislation and to comply with its spirit. Indeed, earlier this afternoon, in reply to the point of order of the hon. member for Leeds-Grenville (Mr. Cossitt), I dealt with the fact that answers tabled in the House, in response to questions on the Order Paper, must comply strictly with the provisions of Bill C-43, notwithstanding that the bill is not yet law. 1 think it is a very commendable directive which the Prime Minister (Mr. Trudeau) has given to the government and to all of us on this side of the House.
Cabinet confidentiality should be preserved if we are to preserve the integrity of responsible British parliamentary democracy in the traditional mold.
[ Translation]


Mr. Raymond Savard (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, in answer to the hon. member for Vaudreuil (Mr. Herbert) I will have to make a brief review of the history of the Department of Public Works. First of all, however, I want to congratulate him for his interest in the Department of Public Works and at the same time try to reassure him and dispel some of his concerns.
Department of Public Works
If I may, I will go back a number of years to make a brief review of public works. In 1841-and that is quite a while ago of course-the Bureau of Public Works was created as an organization of the province of Canada, much in the same way as our Crown corporations today. In the early days of confederation the departments of marine, fisheries, railways and canals shouldered most of the responsibilities previously belonging to the Department of Public Works.
In 1879 the minister of public works was responsible for administering and directing the execution of all public works, except in cases specifically identified in other statutes. In its 1962-63 recommendations on real property the Glassco Commission pointed out that quite a number of departments were responsible for real property services. It recommended that DPW have exclusive jurisdiction over property management, excepting National Defence; over planning and supervision of all construction works required by the departments, as well as hiring the required experts. It would also be in charge of management of real property, planning of federal real property, acquiring such property through purchases or rentals, disposing of surplus real property, and applying the Municipal Grants Act. The costs were to be charged to departments and organizations in exchange for accommodation and real property services.
In 1964 a committee of senior officials was set up to study the recommendations of the Glassco Commission and emphasize the need for establishing a central real property index, the advantage of including all annual outlays for real property in the maintenance and operations budget of client departments, the merit of profitability studies-build ourselves or contract out-the excessive dispersal of real property acquisitions among six large federal departments and organizations, and the waste of resources resulting from keeping professional and technical staff in several departments.
In 1965 the consulting firm of Peat, Marwick and Mitchell made a thorough study of DPW operations. Their recommendation was to consolidate the internal management of the department. They suggested three possibilities: first, two operational groups, housing design and construction, each supported by district offices under a general directorate for planning policies at the central administration; second, six nearly independent regional offices directed by a small central administration responsible for policies and co-ordination; third, keeping a centralized department with specific responsibilities for planning and operations shared among the central administration and the regions.
In November, 1965, Treasury Board approved a new structure for DPW. This would give the department a solid base to delegate a large part of its responsibilities and operational authority to field offices and would satisfy the accounting requirements between DPW as a service department and its client departments. Following the consulting firm's report, DPW suggested that Treasury Board should appoint it the

February 5, 1981
Department of Public Works
only real property agency for the federal government. In April, 1967, Treasury Board approved that suggestion and organized with DPW's clients discussions on the department's new mandate.
In June, 1969, a joint task force was established consisting of representatives from Treasury Board and Public Works, It was its responsibility to propose a solution in order to achieve a more efficient management of federal activities in the building and real property fields. In December, 1969, a central agency draft report recognized that the government's principles in real property management were obsolete, more specifically that building and real property management was still fragmentary, and that DPW's operations were based on conflicting objectives of service and control.
The report recognized the need for the central agencies and the various departments to take part in the solution of these problems. The same report recommended the creation of a Department of Public Works headed by a minister, staffed by a limited number of people, and responsible for a Crown corporation. Federal Property of Canada Limited, which would be the main operational agency that would satisfy the federal government's property needs. Those were Treasury Board's recommendations; the joint task force did not publish a final report.
In December 1969, the person who was to be appointed deputy minister of public works, Mr. J. A. MacDonald, saw the need for an important restructuring of the Department of Public Works. He specified the motivational requirements for the staff employed in central service agencies and drew a parallel with the private sector where success is rewarded and failure penalized. He also indicated the need to be cost conscious, which he considered a difficult if not impossible task under a system of parliamentary votes. He concluded by saying that the Department of Public Works should be made into a Crown corporation. He inquired of the Prime Minister (Mr. Trudeau) about the possibility for quick passage of an act authorizing the establishment of the proposed corporation. In reply, the Prime Minister asked the minister, Arthur Laing, and the deputy minister to undertake a comprehensive study of the whole organization and its operation and to submit a detailed report to the government. On December 22, 1969, the Prime Minister replied to a question asked at a press conference, that federal real property management could be more effective and that he had asked for all possible solutions to be analysed. He did not reject the possibility of creating a Crown corporation which would be responsible for some of the activities of the department.
A joint task force from Treasury Board and DPW was established in January, 1970, to examine the concepts outlined by the deputy minister and to prepare the comprehensive report requested by the Prime Minister. In this report published in June, 1970, the task force indicated that by creating a departmental agency without the status of corporation, would amount to establishing an owner corporation. The report also mentioned several problems that remained to be solved: first, autonomy for job classification and rates of pay; second, the difficulty of consolidating all property services in a single agency, and particularly the problem of related costs; third, quality assurance.
At the end of August, 1970, as cabinet would probably be considering the issue in the Fall, the deputy minister was informed that a full document would be needed to make a decision in principle about the type of real property management system deemed appropriate. Implementation plans and schedules were also requested. As a result the Privy Council received in mid-September a paper entitled "Proposals for Real Property Management".
Among the issues discussed in this report is the possibility of maintaining a departmental structure, while taking as much advantage as possible of the flexibility provided in existing statutes, to give to the service the businesslike thrust which was considered necessary. The report expressed the same opinion as the Glassco report, to the effect that the level of autonomy sought by senior management is due more to present or historical operational deficiencies in the system than to unavoidable weaknesses. While the working paper considered, as usual, other structural possibilities including that of a Crown corporation, it noted that, whether this might be acceptable or not at the present time, it is not necessary to prove that the departmental formula is totally unacceptable before considering a corporate structure. Each formula can be valid depending on the circumstances. It is then to be concluded that the departmental formula could be used if department managers availed themselves of the maximum flexibility provided by the statutes, if they had specific terms of reference, if they could operate according to a cost price method, and finally, if they received the co-operation required to gain the necessary level of autonomy as concerns management.
The principle of revolving funds would relieve the department from the process of the annual budget. The task force brought forward six points in favour of this type of organization: First, it would make it possible to do away with the former image of Public Works; second, it would improve commercial relations with the department's clients; third, it would be easier for the department to create an environment and a motivation beneficial to a self-financing system; fourth, it would help to attract and to keep the required managers, experts and technicians; fifth, it would show the availability of various control mechanisms suitable for a service organization; sixth, it would allow the department to be less service-oriented.
During the following months, the matter was discussed at various meetings attended by Treasury Board officials and representatives of the Privy Council. Consequently, at the beginning of June, 1971, the Prime Minister advised the
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minister and the deputy minister of public works that the restructuration of DPW would not be included in the legislative program of the government for 1971-72.
With regard to the current situation, we became aware over the last few years that is was necessary to improve the management of government programs and keep Parliament better informed. The Glassco commission, the Auditor General and the Lambert commission, considered those questions and made recommendations likely to bring about improvements. Moreover, the department had to consider those questions because of recent financial constraints. The Auditor General, the Lambert commission and the Standing Senate Committee on National Finance have recognized the necessity to divulge and justify rental costs of premises. Each one of them recommended the billing of rental costs and the management of DPW operations according to revenues as a first step toward that goal. In the spring of 1979 an interdepartmental committee under the Treasury Board Secretariat recommended that a plan be drawn up to ensure management of the DPW space rental program according to the revenues collected.
In view of the foregoing, DPW is currently working on the development of a system to collect from its client departments and corporations the utilization costs for the premises and the services provided to them. This system is supposed to allow DPW activities to become revenue dependent. This revenue dependency will be secured directly by way of changes based on market rates for premises and professional services.
By billing the department for expenses related to premises, management and professional services provided by DPW and its operating costs according to the revenue dependency principle, the efficiency and effectiveness of the department would be improved, as well parliamentary control over premises costs, would be reduced. The proposed system must provide for the management of space leased by the Department of Public Works or belonging to the Crown. The Department of Public Works is responsible for some 9,500 buildings and over 8 million square metres of space leased at an estimated annual cost of $650 million in 1979-80, with operating and maintenance annual costs of $492 million. This system must also provide for real property management as well as the management of professional services provided by DPW, such as planning and management of assets, architectural and engineering services, and purchase and disposal of real property. Those services are estimated at $135 million each year. The assets-


The Acting Speaker (Mr. Ethier):: Order. The hon. member for Vaudreuil (Mr. Herbert) on a point of order.


Harold Thomas Herbert: Mr. Speaker, the parliamentary secretary has quoted from a document published in 1970, the very one requested in my motion. I suggest he could now let us see this document as he has read approximately two thirds of it.
Borrowing Authority


The Acting Speaker (Mr. Ethier):: This suggestion may be discussed some other time. The hour provided for the consideration of private members' business having expired, 1 do now leave the chair until eight o'clock tonight.
At six o'clock, the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Bussieres (for the Minister of Finance) that Bill C-59, to provide supplementary borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Donald Frank Mazankowski: Mr. Speaker, at the commencement of my remarks regarding this particular bill earlier today, I mentioned this country's growing gross national debt, the net debt, the fact that the interest on that particular debt is in excess of $12 billion annually, and the burden all that imposes upon Canadians. I spoke as well of the failure of the government to act in a responsible manner and of its lack of sound fiscal management.
A year ago this government won an election on the pretext that Canadians could get a "free lunch" when it comes to energy prices. It fought the election campaign on the pretext that this country could continue to borrow against the future. Now we are faced with some harsh realities that are the result of those election promises. We are paying more for energy and we face an increasing deficit over the next few years.
As I pointed out earlier, the combined deficits over on eight-year period amount to some $92 billion. Energy prices have increased 50 per cent since the defeat of the Conservative government and the country is faced with the prospect of larger deficits.
The government has failed to bite the bullet; it has failed to level with the Canadian people. The Parliamentary Secretary to the Minister of Finance (Mr. Evans) shakes his head in a negative manner, but he knows that is the case; the record speaks for itself.
It is unfortunate that this government still has not learned its lesson. It continues on a policy course that has not changed.

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Consider the tremendous potential of the country, particularly in the area of energy, and then consider the trend toward continued reliance on oil imports which will cost $20 billion to $30 billion annually.
The government should take steps to stimulate the private sector and get involved with the major producing component in our society-and that really is the answer to economic activity. Rather than providing the incentives and the climate that would motivate the private sector to take up the challenge, however, the government is involved in the wholesale takeover of a number of enterprises. Another corporation has just been gobbled up by Petro-Canada at a cost to the Canadian taxpayer of $1.5 billion. It is nationalizing, confiscating, destroying industries which are viable and productive and which provide jobs in the economy and spin-off tax dollars for the coffers of the government. It is really drunk with the philosophy of government ownership. It is doing this in the name of promoting Canadianization of industry. It is not Canadianization, it is nationalization. Surely there are more ways to encourage Canadian ownership of our economy than through government ownership.
Why not look at ways and means of encouraging individuals to participate in the ownership of Canadian industry. That is what this country is all about. That is what built this country. The government is not satisfied with that approach. It wants the whole loaf, to be totally involved. The government is on a course which is going to stifle, if not kill, the enterprising spirit of Canadians. It is a course which will discourage private enterprise and private investment. It will certainly impede the ability of our basic and fundamental industries to pursue a course of fulfilling their utmost potential. Above all, it will discourage innovation.
We have a government which is pursuing a policy of inconsistency as well. As one who comes from western Canada, I cannot help but note the government's deliberate attack on an industry that is based in western Canada. It tackles the oil industry in the west while on the other hand is attempting to hold on to and bail out industries in central Canada, in the course of creating deep divisions, discord and bitterness.
This government takes the position that jobs are more important in central Canada than they are in the west. However, when one looks at it, this narrow approach which the government is following is in effect hurting the central heartland of Canada. The development of resources in the west impact clearly upon central Canada. It clearly impacts upon its ability to provide jobs in manufacturing activities and economic spin-off.
One finds it almost preposterous when looking at the policy stance upon which this government has embarked. Every institution, council and advisory group is warning the government that it must change its direction. The latest one is the chairman of the board of the Toronto-Dominion Bank, Richard M. Thomson. I wish to quote what he has to say about how
we can turn the economy around in this country. I quote from a speech he made to his shareholders on January 21, 1981:
Central Canada, particularly Ontario, must not look upon the development of energy resources in the west and, indeed, off the east coast as an expensive burden but rather as an opportunity for the further development of Canadian manufacturing, the further integration of the Canadian economy and the development of secure petroleum supplies. It is most important that Ontario and Quebec get strongly behind the energy developments in both the west and off the east coast. This is enlightened self-interest; it means more employment for Canadians, an increased level of energy security and a stronger and more developed Canadian economy in the 1980s.
There can be nothing more truthful than that statement. What has happened is that this government has failed to enunciate an over-all economic development policy which will provide economic help and stimulus to all regions of Canada by providing a positive economic climate.
Why do we not have an economic blueprint for the eighties from this government? What are its goals and its short, medium and long-term objectives? What will be the role of the private sector? Will the government continue along the destructive route that it has established itself on at the present time?
What can we expect in terms of increased productivity, another very urgent problem in this country? What about investment? We will require a lot of investment, both public and private. What kinds of incentives will there be to encourage private investment, to build our railway infrastructure, and to build and develop our energy potential?
What about innovation, research and development, human resource development, training and re-training and developing skills for our work force? What about regional economic opportunities? We clearly have the potential to develop realistic goals in that area.
What about federal-provincial co-operation? That is clearly a fundamental requirement. We need to have the support, co-operation, working and meshing together of federal and provincial policies. That is a fundamental requirement. Will we, instead, have more unilateralism?
I hope this government realizes very quickly it will have to adopt a co-operative approach which will create confidence within the industry and trust with its provincial counterparts. I know what can be achieved if we work in an environment of co-operation and consultation, particularly with the provinces.
I had some experience when our government addressed some of the problems with respect to grain handling and transportation, port development and urban transportion. As a federal government, we approached the provinces, indicating to them that the problem of solving our grain handling and transportation difficulties was a joint effort. They respond to the challenge. Instead of a government which is going to the provinces seeking their co-operation, we have a federal government which is constantly attacking those provinces. As a result, we are not getting any satisfaction or results in the solution of our deepest and most fundamental problems.
This government is preoccupied with the constitution. This government's intransigence with respect to its energy program
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has created a vacuum of economic leadership in this country. As a result, as I said earlier, it has created deep division. We in this nation have failed to capitalize on the tremendous opportunities within our grasp. Indeed, we have failed to capitalize on some of our basic fundamental and indigenous strengths in each of our regions. I want to deal with some of those in more detail.
There can be no question that energy holds the key to our economic recovery. It holds the key to individual opportunities. It clearly holds the key to providing a more balanced economic growth and development in this nation.
The potential of our oil and gas industry for jobs, the advancement of technology, research and development, and industrial spin-off throughout the whole of Canada is almost staggering. It has been quoted that we are looking at 350,000 jobs, and hundreds of billions of dollars worth of economic activities spread throughout the land, yet we have a National Energy Program that is universally condemned. It is destructive to the industry and antagonistic to the producing provinces. It is creating division in this country and is detrimental to job opportunities, particularly for young Canadians.
It is creating a situation which penalizes exploration and penalizes Canadian companies. It is driving expertise, investment, equipment and machinery out of the country.
There is talk of exploration activity being reduced by 30 per cent to 40 per cent. I have here a summary of cancellations, postponements or reductions in exploration budgets totalling almost $18 billion. There is reduced economic activity. We talk about the exodus of drilling rigs from this country, 60 rigs have been moved from Canada. There are an additional 60 committed to move from Canada by April 30, 1981. When these rigs leave, they do not leave for six months but for a minimum of two years. I have said in this House before that every time one of these oil drilling rigs leaves the country, it is like closing down a factory which employs 40 to 50 people. Some 16 servicing rigs have moved. Contractors forecast the following casualities to occur by May 15, 1981: 200 rigs out of service in Canada without contracts; 86 additional service rigs out of service and scheduled to move out of Canada. I am reading from the report put out by the drillers' association which goes on to indicate:
The drilling and servicing fleet being moved from Canada in the 184 days since the NEP was issued will eliminate 7,200 jobs at the field level, the downstream effect is estimated to eliminate another 1,800 jobs, or a total of 25,000 Canadian jobs destroyed. The drilling and servicing equipment forecast to be out of service by NEP will affect the jobs of about 10,000 people at the field level. If the shut down continues, the spin-off effect could cause the loss of jobs for an other 25,000 Canadians.
On the present forecast trend 60,000 Canadian jobs are threatened by mid-1981.
Jobs in the west are just as important to the workers there as they are to people in central Canada. The megaprojects are shelved. Each synthetic oil recovery plans was scheduled to produce some $250 billion to $300 billion in economic activity
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over the life of these projects. Some 40 per cent of that money was to be spent in central Canada on steel, equipment, pipe, valves, engines, turbines, electrical equipment and vehicles.
Let us consider heavy oil. I happen to be interested in heavy oil because there is a fair amount of it produced in my constituency, yet the vice-president of Hudson's Bay Oil and Gas said just recently in Lloydminster, as reported in the Edmonton Journal of January 28:
The National Energy Program has made development of much of the heavy oil reserves around Lloydminster uneconomic . . .
Sedgewick, who said he was speaking on behalf of the Canadian Petroleum Association . . . told the Lloydminster Chamber of Commerce the new 8-per-cent petroleum revenue tax and the new split in revenues upset "A fine balance" in Saskatchewan oil fields.
It goes on:
The company cancelled the drilling of 350 wells and a thermal recovery pilot project scheduled for the Saskatchewan side after the energy program was announced.
We have evidence from the oil producers of southwestern Saskatchewan wherein they point out that those wells producing something in the order of 40 to 50 barrels per day are uneconomic. They will not be brought into service again when they are being forced to shut down for servicing because it is simply uneconomical to do so.
As a result of the National Energy Policy, Husky has had to cut back its development program of 300 wells by half for 1981, and there are serious concerns about the $300 million in expenditures proposed for various projects in Saskatchewan. Mr. Blair noted that a major portion of about 600 of Husky's 1,800 to 2,000 wells in the Lloydminster area may be shut in and the economic situation is recovery of the lifting cost.
Let us go on to look at other predictions. Imperial estimates that the energy policy will reduce domestic oil supply by 180,000 barrels per day by 1985 and by 600,000 barrels per day by 1990. Importing 600,000 barrels per day for one year at the current international oil price of $40 a barrel would cost $8.7 billion.
We find another quotation from Gulf:
The recently announced national energy policy means increased reliance for Canada on imported oil-at a cost of $55 billion during the next five years.
It goes on to state:
Canada's dependence on imported oil will rise to almost 600,000 barrels a day

Then we must consider the province of Alberta, and this is where a very fundamental difference crops up between negotiations with Alberta and the federal government. The federal government predicts that under its National Energy Program, imports will be reduced to zero by 1990. Alberta has a different version. It suggests that under the National Energy Program, net imports will rise steadily to reach 525,000 barrels a day in 1985 and 734,000 barrels per day by 1990. When we look at this, we must realize that we could be spending another $20 billion to $30 billion per year to meet our oil import needs. The National Energy Program suggested that its objectives were security, opportunity and fairness. It is quite clear that all the evidence we have now been able to gather would point out that security of supply or self-sufficiency in petroleum products by 1990 will not be achieved.

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When we consider opportunity, let us look at all the jobs being lost and the massive exodus. Let us look at fairness. As an Albertan 1 have to tell the House-and this view is shared by many Albertans-that it is not fair. Let me ask whether it is fair that we should be buying oil from Venezuela and other OPEC countries at $43 a barrel, while paying the government of Alberta $17.75 a barrel for conventional crude, which works out to 41 per cent.
Last July, Alberta proposed more rapid oil price increases, but not that much more rapid. Under Alberta's plan domestic oil would be selling for $19.25 this month instead of $17.75. In other words, Alberta proposed to sell its declining conventional oil at 45 per cent of the Venezuelan price but this government turned it down. Who are the bad Canadians, who is being unfair? Why is there a freeze in relations between Edmonton and Ottawa? Why are the oil sands projects not going ahead? Why is our industry faltering, and why are tertiary oil recovery projects collapsing?
The fact of the matter is that the program is clearly not fair; it is certainly not fair to Alberta and it is clearly not good for Canada. I can tell the House that Alberta's determination to fight this policy will not wane, and that the government of the province of Alberta has the support of its people.
We look at the National Energy Program and what it proposes to extract through taxes imposed on natural gas and oil. If one looks at the maximum amount it is able to recover with the Canadian ownership charge, one finds it works out to the shifting of some $37.5 billion from the coffers of the producing provinces to the federal government. Most look upon that not as an encroachment but, rather, as a raid. Out of the $37 billion which will be extracted over the next three years, some $2 billion will be put into a so-called western development fund. I can tell hon. members that that is pretty small potatoes when we consider the massive shift which has taken place. The Minister of Transport (Mr. Pepin) indicated in the committee one day that he thought part of that $2 billion would be used for transportation. He has now told me that might be very difficult.
The Hon. Leader of the New Democratic Party (Mr. Broad-bent) aligns himself with the policies of this government and attempts to herald himself as the great preserver of resource ownership for the provinces. It was my impression that ownership rights are now entrenched in the constitution; ownership now rests with the provinces. The Leader of the New Democratic Party suggests that he can tell the province of Alberta how it should handle its royalty and taxing measures. He suggests Alberta is losing some $600 million. I do not think the people of Alberta need any of that hollow wisdom emanating from the mouth of the Leader of the New Democratic Party.
Ownership is an existing constitutional right for the provinces, and this government is attempting to waffle and weasel out of it. We are clearly missing the boat in terms of exploiting our energy potential in this country. That is one of our natural strengths, and we are not taking advantage of it.
There are some other natural strengths we have which this government is failing to recognize. Agriculture is one of them. What I am trying to say is that by the government's motivating and providing a climate which would be conducive for these industries to flourish, we could be generating much more revenue for Canada and for Canadians. Agriculture is clearly one of those basic and fundamental industries which is being shortchanged by this government.
The movement of grain once again is in jeopardy. The other day the Minister of Transport said we will have to ration grain cars unless we make some changes to the Crow rate. I hope the Minister of Transport will cease associating himself with that statement, because all it does is further impair our reputation as a reliable supplier of grain.
It certainly does nothing to build up confidence in the minds of the producers we are asking to produce amounts of grain which would give us the opportunity to export 30 million tonnes of grain by the year 1985 or 35 million tonnes by 1990. We need an investment of some $14 billion to $15 billion in our railroad system, and much of this could come from private funds.
We could be looking at investment incentives such as incentives similar to MURBs or RRSPs, but this government has no imagination. It thinks everything which must be done simply by government ownership and by government control.
With respect to port development, this is another area in which we need co-operation with the provinces and with industry, but we have a federal government which would rather fight with the provinces than work with them.
With respect to freight rates, we must remove the anomalies which mitigate against the further processing and manufacturing of agricultural products and particularly grain products in Western Canada.
Western Canada has 27 per cent of the Canadian population but only about 17 per cent of the manufacturing activity. Only 8 per cent of the manufacturing activity takes place in the prairie provinces. I am not suggesting that the prairies should be an industrial giant like central Canada, but there certainly is potential for further processing and manufacturing of agricultural products on the prairies. There is no co-operation today. The two levels of government are in conflict.
There must be greater diversification in the agricultural industry. Today we are importing almost one third of our food basket; one third of our food basket is composed of imported foods. We are not expanding our productive potential in agriculture.
We have a problem in the beef industry today. The government has lifted all restrictions on beef and veal. There have been massive increases in imports, which cause depressed prices. We were promised a meat import law by this government. We are into the second month of 1981, and we still have no meat import law. Cattle producers are in serious trouble in this country. They have been losing money for the last two years. Many of the producers in my part of the country are saying they will either quit or face bankruptcy. Here again we
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have a situation in which there are some anomalies in terms of freight rates, feed freight assistance and pricing policy.
The size of western Canada's hog industry has been reduced by about 50 per cent in the last eight years. Ontario's industry has increased by 35 per cent, and Quebec's has doubled. There are some distortions which are creating that.
We all know that input costs have increased dramatically. Interest costs are crippling beef producers. The Farm Credit Corporation is out of money. It cannot lend any more money to producers, and this government fails to act.
I moved a motion under Standing Order 43 in the House today. It was rather strange that all the Liberals involved with agriculture seemed to agree. The Parliamentary Secretary to the Minister of Agriculture (Mr. Ostiguy) and the chairman of the Standing Committee on Agriculture cheered me on and said, "Yes, yes, we are all for it", but nothing is happening. I asked on a urgent basis for at least $150 million in increased funding, and I hope the government seriously considers that.
I am pleased that the government made some changes with respect to the Small Business Development Bond, and I commend the Minister of State for Finance (Mr. Bussieres) because I think he is a reasonable person. I think the small business development bond will be well accepted. I hope the government will apply that to unincorporated farmers as well as incorporated farmers. 1 hope the minister will still consider that, because there should not be any magic in applying for a Small Business Development Bond either as an incorporated farmer or as an unincorporated producer. I hope the minister will look at that, because I think we are dealing with the same kinds of producers here.
I turn now to the herd maintenance program. I have never seen a program as half-baked, badly-administered and grossly unfair as the herd maintenance program. It is really a charade; it is unbelieveable. I was talking to a constituent yesterday, and he said, "Trying to get information from that infamous Zenith number is like approaching the Kremlin. First of all, it is difficult to get through, and once you get through, you cannot get any answer." There have been petitions. The area of northeastern Alberta including Lloydminster, Bonnyville, St. Paul, Two Hills, Vermillion and Vegreville suffered just as much drought and hardship as the areas which suffered in the provinces of Saskatchewan and Manitoba. There was way less than 80 per cent of the normal yield. As a matter of fact, it was 25 per cent to 50 per cent below the normal yield. Petitions have been submitted, and representations have been made. The evidence is clearly documented. Applications are in and appeals have been filed, but nothing has happened. We have an appeal board now. My colleague, the hon. member for Athabasca (Mr. Shields), moved a motion under Standing Order 43 recommending to the minister that someone from the northern part of Alberta be added to the appeal board. There is a gentleman on the board who represents the province of Alberta, but he hails from Taber. There really is a serious drought situation in northeastern Alberta, but nothing has happened. If it is intended to help producers, let it help all
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producers who were affected. There should be no discrimination.
In my own way I have attempted to outline some of the areas which I think are crucial to economic recovery in this country. Some industries and sectors provide the impetus to build an economy that is strong, productive and provides jobs. However, all of this must be done in a climate of freedom where there is some flexibility for individual Canadians, so that people can be enterprising, innovative and able to participate in our growth.
There is a need for urgent action now, not only in certain areas and regions, but there needs to be a general rethinking of this government's total economic approach. At one time I thought this government was on the road to working with private industry and the private sector as a partnership. But it has certainly shelved that policy. That is most unfortunate. It is unfortunate that the approach of the current government is, in my opinion, destroying the political and economic fabric of my country. I do not like what I am seeing.
Unless there are some dramatic changes, I think we will see increased hardship, increased frustration and perhaps a deeper division between regions and between Canadians. It could result in some very serious implications for our country and for individual Canadians.
There is no question-and I am speaking as a westerner- that western Canadians want to participate in the economic social and political activities of this country. We have much to offer. We have demonstrated that we are prepared to share. We have shared in the past, and we will continue to share in the future. But, for goodness sake, I hope this government stops exploiting division in this country. I hope it will start governing as a national government, rather than attacking half of the country and governing the other half.
The election is over. Canadians recognize that the government has broken a lot of promises. But, now is the time to get on with the job, to provide leadership, both political and economic, because we have a tremendous potential; it would be a shame if we lost that opportunity.


Mr. Roy MacLaren (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, I have listened with attention as I always do to the hon. member for Vegreville (Mr. Mazankowski) who has just finished speaking.
I regret that I was not in the House to hear his complete statement. Although it is not my intention to delay consideration of the bill now before us, I do, however, want to make a comment or two in response to his statement. He did make some observations which are not justified by the current situation. 1 refer particularly to the many questions of energy policy upon which he touched. I regret that time does not permit me to respond to all of them. However, I do want to emphasize that it is important that we keep in mind, as we look at the energy policy, that it does offer the private sector major incentives to develop in particular the offshore and the

February 5, 1981
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Arctic resources of our country. These are among the most promising sectors for new oil exploration. The policy also offers opportunities for further development of the conventional oil areas of Canada. Additionally, the policy does offer, by a new price incentive mechanism, the opportunity for tertiary or enchanced recovery in conventional areas.


An hon. Member:: Everybody is moving out and shutting down.


Roy MacLaren: The details of those incentive programs are under discussion with the industry. The hon. member opposite is clearly drawing some early conclusions from what he regards as evidence to the contrary.


John Horton McDermid: Leave Etobicoke, go out west and you will find out.


Roy MacLaren: I would remind the hon. member opposite that when he refers to self-sufficiency and quotes various people who believe that we shall not achieve self-sufficiency by 1990, he concentrates, as many have done, on the supply side of the equation. He paid no attention to the vital role that conservation and substitution will play in our energy future. Nor for that matter, if he does want to concentrate on the supply side of the equation, does he quote those who have taken the contrary point of view from his. In quoting from recent submissions to the National Energy Board, he overlooks, for example, the predictions of Dome Petroleum, which indicate self-sufficiency by 1990, by increased supply only, without taking into account the role conservation and substitution can play.
The hon. member opposite, in referring to the criticism of the program by the head of one chartered bank, conveniently overlooked the contrary testimony of the chairman of another chartered bank. I make that point merely because there can be honest differences of opinion on policy. But it is equally evident that there are benefits to all Canadians in the program through Canadianization, through the gradual implementation of a made-in-Canada pricing policy, and through the more equitable sharing of revenue from this dynamic sector of our economy.
In his statement the hon. member opposite did not refer to the fact that in Canada the price of oil has risen quite substantially in the past six years, from $6.50 a barrel in 1974 to its current price. This is a level which does not satisfy many in western Canada, but which does, nevertheless, represent a very substantial increase of about 20 per cent annually over those past six years.


Donald Frank Mazankowski: Forty-one per cent of the world price.


Roy MacLaren: That being the case, a massive financial problem has been created for the national government of this country when the volume of revenue directed to Alberta is taken into account.
The previous government grappled in its own way in its aborted budget with the same fundamental policy challenge
facing Canada today. It is a policy challenge to the federal structure of our country which the recent governments have attempted to meet in a variety of ways.
For example, the federal deficit has grown, something which has not pleased everyone in Canada. This government and the previous one acted to constrain the growth rate in the wellhead price of oil. Also, we have phased out certain equalization payments concerning energy revenues. All those factors combined have still not prevented the rapid increase in government deficit. They have not prevented the provincial share of energy revenue from growing rapidly to the point at which the equalization system in this country is being called into question. They have brought into question the ability of the national government to sustain the equalization system, which has been a basic characteristic of the Canadian confederation in recent years. When the hon. member addresses himself to the National Energy Program in the future, I would ask him to bear in mind that one of the fundamental reasons for the approach taken in that program is fairness, in the sense of enabling the national government to offer those essential services, with which he is fully familiar, for the benefit of all Canadians, and to increase the share of revenue flowing to the national government to meet the legitimate demands of the Canadian people.


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, I rise tonight to make a few points with respect to the borrowing authority legislation for 1981-82. Bill C-59 asks this House to give the government authority to borrow some $14 billion. You will recall, sir, that in July, 1980, just some six months ago, Parliament passed, on division, a borrowing bill respecting some $12 billion. So this Parliament is really being asked to approve $26 billion by way of a blank cheque. I do not believe I have a mandate from my constituency to approve a blank cheque in the sum of $26 billion. We need only look at the bill to realize the gravity of the situation. It authorizes the Minister of Finance (Mr. MacEachen) to borrow:
-in addition to the sums now remaining unborrowed ... by the issue and sale or pledge of securities of Canada, in such form ... at such rates of interest and on such other terms and conditions as the governor in council may approve . . . fourteen billion dollars-
The government's financial administration is so bad that it must add an extra clause to this bill which allows it to borrow this money in any currency other than that of Canada.
What an enormous crime this is against the citizens of this country! Historically, the role of Parliament has always been the elected people against the Crown-the government- insisting that the king and the government give details as to what the money is for. In ages past our predecessors were prepared to go to the block. They were prepared to lose their heads and hold back supply until they received a satisfactory answer as to how the money would be spent.
I am convinced that the massive deficit of our federal government is distorting our whole Canadian way of life. From my own background as a solicitor 1 know that it is poisoning the relationship between the people and their government.
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People are now actively interested in finding out what the penalty is if they do this or that to avoid taxes. They are actually devising schemes now with a view to evading taxes rather than the lawful avoidance of taxes. The underground economy is growing at an enormous rate. All of this flies in the face of a legitimate and fair income tax system, at least as it is perceived by the people.
Our deficit is poisoning federal-provincial relationships. It is leading to enormous disunity. It is absolutely clear to me, at least, that if it were not for this enormous deficit we would not have a government elected by central Canada.
The Minister of Energy, Mines and Resources (Mr. Lalonde) does not understand the oil industry. He is attacking the oil industry in western Canada, which is one of our most successful industries and which could provide enormous spinoffs to central Canada. A government elected by one side of the country is attacking the only successful industry we have.
It would be a legitimate subject of discussion if the government were proposing a tax on resource revenue, as long as it included electricity, mines and minerals as well as oil and gas from the west. We could not object to that because Parliament can impose any mode of taxation it wishes. But to impose a tax only on one segment of the industry is grossly unfair and simply wrong.
I wish to make a few comments about the government's financial situation. Then 1 wish to conclude my remarks tonight with some general comments. 1 believe we must set up yet another special parliamentary task force. We created one today which will deal with fiscal arrangements. We need a task force which will look at the whole area of government finance, both in terms of revenue and in terms of expenditures, including tax expenditures, as they are generally known.
When one looks at the finances of this government, one must look first at the Bank of Canada's weekly financial statistics sheet. 1 am looking at one such sheet for January 29, 1981. This should be required reading before anyone is permitted to stand in his place. It is a sobering document. It shows that the federal deficit is some $80.1 billion. It shows that $20.9 billion is owed by way of treasury bills. It shows some $16.9 billion is owed by way of Canada Savings Bonds. It also shows some $42.2 billion which is owed through all sorts of other securities. We know that between $7 billion and $10 billion of this total is owed to agents or lenders outside Canada. Indeed, we know that much more is owed outside because many of the intermediaries from whom we have borrowed by way of treasury bills and Canada Savings Bonds have themselves borrowed on the international market. That is how the massive petroleum dollar is recycled. We notice from this document that the federal debt as of January 29, 1981, was $10.9 billion greater than it was on January 30, 1980. We know that the Bank of Canada, which is a creation of the federal government, holds Government of Canada securities of $15.3 billion. That is $2 billion greater than it was on January 30 of last year. The meaning of this is that the government is creating an extra $2 billion which is not tied to productivity. That is what causes inflation.
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Frankly, I am amazed that members of the NDP could fall for such a scheme, since they claim to be helping the ordinary person in this country. Yet, the inflation which they cause, in conjunction with the government by these massive deficits, are hurting the very people whom they purport to stand for. They have let down the poor and the elderly of this country.
There are a few facts which I want to read from the 1979-1980 public accounts. I see from this document that the budgetary revenue for 1979-80-the reason I use these years is that this information is in the public accounts and is certified as being correct by the Auditor General-is some $40 billion. To that figure we must add the money flowing to the government from the Canada Pension Plan, from insurance programs and from annuities amounting to some $1.9 billion. So that the total revenue into the government to the end of 1980 was $41.9 billion.
Incidentally, the average senior citizen believes that the contributions he or she has made over the years to the Canada Pension Plan have gone into a separate account, are invested wisely and are receiving a return from a solid, guaranteed account. Of course, that is not true at all. That money is spent in the day to day operating budget of this government.


Miss Begin:: Only in Alberta, in the provinces.


Blaine Allen Thacker: It is not there.


Monique Bégin: Yes, it is. Check your facts.


Gordon Edward Taylor: Well, why borrow then?


Blaine Allen Thacker: Mr. Speaker, the Minister of National Health and Welfare (Miss Begin) is claiming that Canada Pension Plan moneys are put into a separate account. I would like her to show me the account because not one share certificate was bought.


Monique Bégin: It is in the legislation. You don't even know your facts.


Blaine Allen Thacker: The money has been spent over the years. When one looks at the budgetary expenditures-


Monique Bégin: You don't know how to read it.


Blaine Allen Thacker: -one will see that some $51.5 billion was spent. If we add to that loans to Crown corporations such as Petro-Canada and CMHC of some $1.4 billion, it is no wonder that at the end of the year the government must go out into the marketplace to get enough money to meet net financial requirements.


Monique Bégin: You don't know anything.


Gordon Edward Taylor: Why don't you stand up and make a speech or dry up.

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Mr. Deputy Speaker:: Order, please. The hon. member has the floor. I am sure there will be an appropriate opportunity to reply to what the hon. member is saying.


Blaine Allen Thacker: Thank you, Mr. Speaker. If we take the budgetary revenue of $40 billion and add the Canada Pension Plan input of $1.4 billion and subtract the budgetary expenditures of $51.5 billion and the loans to Crown corporations, there is a net financial requirement of $10.4 billion. This is the amount which the federal government will have to borrow from the Canadian capital market and the international market. That figure is not a figment of my imagination. That figure comes from the public accounts of Canada.
The government is really taking that money from the Canadian capital market, and this is causing serious problems because the government is competing against our citizens and private corporations for money, which may be invested in small and large businesses to create jobs, give people cash flow, bring on new products for sale in the international market and bring more money into the country, thereby creating more income tax revenue. The government has the advantage of being able to pay any rate of interest. Everyone knows that it has a deep pocket and that it can reach far into it.
I often wonder how the NDP can sanction such action because it does not bode well for senior citizens and the working man that party purports to represent. Such action fuels inflation. There are simply too many dollars chasing too few goods, and this distorts the productivity of the nation, which is really the bottom line because, whether we like it or not, we are competing in the international market. The only time Canada can move up an inch on the rest of the world is when we are exporting more than we are importing.
Canada also takes money from the international money market to pay for the deficit. In effect, what we are doing by borrowing in the international money market is competing against the lesser developed countries which could really use this money. We are doing the same thing in the oil industry. Canada is out in the international money market in spite of the fact that we are a country of a mere 23 million people sitting on the assets of half a continent. Morally, we should be self-sufficient in money and oil, but we are not. Canadians are out there like beggars competing and taking money from lesser-developed countries. This is absolutely wrong, and any government which would get us into such a situation and then carry on is clearly making a grave mistake.
Once again, members of the NDP seem to back this policy of the government. If one listens to their rhetoric, one comes away with the belief that they are interested in the poor people of the world. If they are really interested in the poor people, they should be standing up and fighting this type of program which is making us competitors in the world for oil and money. Canada should be a supplier of energy and money to the world. In this way we could really do something for the North-South dialogue.
Let us look for a moment at the revenue details. There are basically three types of revenue at the federal level. There is revenue from the personal income tax and corporate income tax, different forms of sales tax and then our return on investments. Let us look at the figures involved and then ask a few questions. Personal income tax revenue for 1980 was $16.8 billion, corporate income tax revenue was $6.9 billion and a tax on non-residents raised $.8 billion, for a total of $24.5 billion. That is the total revenue from people and corporations. Some $4.6 billion was raised by way of sales tax. Customs duties brought in $3.0 billion and excise duties amounted to $.9 billion. Oil export charges brought in $.7 billion. An excise tax on gasoline raised $.4 billion, and various other taxes raised $.5 billion. The total through direct taxation, was $34.9 billion.
The government receives returns on its investments. The Bank of Canada returned $1 billion. CMHC returned $.8 billion, and the Farm Credit Corporation returned $.2 billion. Our Post Office raised $1.1 billion, and from other sources the government received $.2 billion for a total of $5.1 billion. The grand total of all our revenue is $40 billion.
We must ask, and it is something at which the task force should really take a look, whether we are, by way of our individual income tax, paying a fair share. Is $16.8 billion out of $40 billion a fair percentage to collect by way of personal income tax, corporate income tax and non-resident tax? When that sum is contrasted with the sum of $34.9 billion, the amount raised by direct taxation and duties, we cannot say that our income tax system is progressing.
Again, we have the NDP agreeing with the government on direct sales taxes, which are not progressive at all and which clearly hurt the bottom end of the spectrum more than would a progressive income tax. If members of the NDP were genuinely concerned about progressive income tax, they would be fighting these sales taxes, but I do not hear them doing that at all.
What are our effective rates of income tax? Again, I must go to statistics for 1978, which are the last statistics available. The statistics include a detailed analysis of the returns. Some 14.3 million income tax returns were filed. If one received an income of $15,000, only 26 per cent of the taxpayers of the nation would pay more tax, and the effective rate would be 8.77 per cent tax. On an income of $20,000 only 13 per cent of the taxpayers earned more, and the effective rate was 10.88 per cent. On earnings of $30,000 only 2 per cent of the taxpayers of the nation earned more, and the effective rate of tax was 13.94 per cent. On earnings of $40,000, which is what many MPs earned a short while ago, only 1 per cent of all the taxpayers in all the nation earned more, and the effective rate was 14.93 per cent. At the magic figure to which MPs aspire of $50,000 only one fifth of I per cent of taxpayers would earn more money. Even at that high rate the taxpayer's effective rate on total income is only 17.47 per cent.
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1 should like to contrast that with some statistical information on Canadian incomes classified by occupation. There were 9.5 million workers in Canada with an average income of $12,979, and they constituted 79 per cent of the total taxpayers in the nation. In 1978 there were only 485,000 business proprietors in the country. That is a drop in the bucket because they are the people on the front lines, the man and wife at the corner store who work 80 or 90 hours a week. Their average income was $10,755, and they accounted for 3.33 per cent taxpayers.
Next we come to the poor old farmer, the person for whom I am trying to have the capital gains tax removed. There were 267,000 of them, and their average income was $10,741, the lowest of any class in our society. They constituted only 1.84 per cent of taxpayers. That is why some of us feel so strongly about farmers being ripped off by this capital gains tax. The roll-over provision is no longer effective because of what inflation has done to the value of land. The roll-over provision, based on the 1971 value, is insufficient for the 1.84 per cent of the population with an average income of $10,741.
I should like now to turn to the expenditure side of the government ledgers. We find three types of expenditures there. There are budgetary expenditures through all the line departments, loans and advances to Crown corporations and tax expenditures. The latter are the deductions such as marital exemptions and personal exemptions and superdepletion to oil companies, etc. The total amount spent by the departments is $51.5 billion. Some of the major expenditures should be examined in detail by the task force. For instance, the Department of Employment and Immigration spent $2.3 billion. We always need to examine these expenditures with a view to cutting them back or eliminating them. If we could manage that, then we could balance the budget, and that should be the goal of any government. We come next to the Department of Energy, Mines and Resources and the oil price subsidy to find that the difference between the cost of imports and exports to the end of 1980 was $2 billion.
We know that for this year the actual outflow of money to subsidize imported oil will be $6.8 billion. We would not have to spend that money if we were self-sufficient in oil, as we could be. That could have an enormous effect on our fiscal balance.
Figures with respect to the Department of Finance are interesting. According to the public accounts of Canada, in 1980 we spent $8.5 billion to serve the public debt of $80 billion which 1 already mentioned. Fiscal transfers accounted for $3.5 billion; national defence, $4.3 billion; family allowances, $1.7 billion; hospital insurance, $2.4 billion; medicare, $.8 billion; Canada assistance, $1.6 billion; old age security, $6.3 billion and education, $1.6 billion.
I list these items because 1 think the task force should examine them. A non-partisan task force that uses some common sense and listens to people across the country would surely come to the conclusion that our federal finances must be
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put in order. 1 am sure we would all be prepared to listen to some rational and reasonable suggestions from that body.
Should we as taxpayers spend $2.8 billion net on oil import subsidies? Surely those should be paid by the people who use the product. For instance, if I want to drive my big GMC Suburban, as 1 do, and it costs $40 to fill it, I do not think people who are paying income tax should have to subsidize me. If I were paying it all at the pump, I would think seriously about how far I would drive, whereas now 1 go anywhere 1 want. The point is that other taxpayers should not have to pay for my gas. That does not happen in any other country.
These things come home to roost, Mr. Speaker. In 1973-74 when the OPEC nations increased the price of oil, Japan and Germany immediately faced facts and told their citizens that they would have to pay for it, whereas in Canada and in the United States the governments subsidized the increase with tax dollars. The effect of that is now being felt, eight years later. It is destroying our automobile industry. In 1973-74 Japan and Germany retooled their automobile industries to produce gas-efficient engines and cars. We continued in the old way and encouraged Canadians to buy big cars.
Flolding down the price of fuel was a signal to Ford, GM and Chrysler to continue producing the monster vehicles we all wanted. Now, seven years later, they cannot compete with Japan and Germany which are taking an enormous percentage of our automobile industry.
The decision the government made six or seven years ago, which it thought was in the best interests of the country, turned out to be wrong. But will it change that decision? Absolutely not. It insists on paying to one province basically, but it could be three provinces, less than 50 per cent of world price for oil while paying world price to other countries. The government dictated that Petro-Canada must take oil from Mexico. It turned out that the oil is 60 per cent sludge. We pay world price when 30,000 barrels of the stuff is sludge.
The Prime Minister (Mr. Trudeau) went to another country and said, "We will send our national oil company over here, and it will spend $250 million." That is absurd.
1 want now to deal with the public debt. If we did not have the debt, we would save $8.5 billion. The hard reality is that if you do not owe money, you do not pay interest. If we had been realistic about gas prices since 1973 and if we had presented a reasonable program of tax increases to the citizens of Canada, we would not have that debt. Then, if we needed to help the automobile industry or to develop the oil industry, we would be able to go into debt. We would be able to go to the lenders and say, "We want to go into debt for $15 billion, not for operating funds, but to build something. We want to put two tar sand plants in, we want to fix the railways and we want to doubletrack the railways through the mountains." We would be able to make those moves when we need to.
The only problem with the Keynesian theory is that governments forget the other side of it. Keynes was absolutely correct. In bad times it is legitimate for governments to go into debt collectively to stimulate production. However, when times

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are good, and I submit all of the 1950s and 1960s were good times, they should have a balanced budget.
I think it is a fair criticism of the government that during the good years it took this nation into massive debt instead of balancing the budget and reducing taxes.
What would be the effect of putting an upper level on incomes? Although a Member of Parliament earns $50,000 a year, he still has a family allowance cheque coming into his home. The theory is that when you receive a high income, the tax system will take care of that and, therefore, you achieve equity.
We know in actual fact the tax system is not doing that. Our income tax system is raising only 16 per cent of our tax revenue. Sales taxes, which impact on poor people, take a much larger percentage.
Those who earn the top incomes, such as Members of Parliament, can afford tax solicitors and tax accountants to help them find all the tax shelters, whether it is a 100 per cent write-off for films, aeroplanes or super depletion where there is a $1.10 deduction against income for every $1 invested. This is done at the cost of ordinary citizens. Therefore, we are not achieving equity.
The same is true of old age security. 1 know of many senior citizens who care about this nation. They do not feel comfortable about our deficit and would be delighted to give up their right to old age security. The basis is very simple. They have worked hard, and they feel that this nation has treated them well. They were able to put money aside for their own pension plans. They therefore feel benefits should go to other people.
There could be a limit of $40,000 or $50,000. Those who earn above that would cease receiving family allowances and old age security. The Canadian people are prepared to make that kind of contribution to this nation.
A problem arises if people do not perceive the tax system to be fair. Unfortunately, that is the situation in this country today. People do not feel our tax system is fair and equitable. That is why they are beginning to cheat. This is the reason why the underground economy is doing so well.
1 discussed the first type of expenditure. The next one is loans and advances which we, through our government, make to Crown corporations. Petro-Canada is clearly number one in this regard. Over the last five years we have pumped a billion dollars into Petro-Canada. The government had to borrow that on the market.
We are faced with a situation where we have to pay, through our Canada Savings Bonds and treasury bills, 13 per cent and 14 per cent on that $1 billion. The cost of that is about $130 million to $150 million a year.
In return for that money, we took Petro-Canada preferred shares. That is perfectly logical when you are creating a corporation. However, when we look at those shares, we see there are non-cumulative dividends. This means that if Petro-Canada in any one year does not pay a dividend on those
shares, it is lost for all time. That does not strike me as being fair in terms of a business decision. The people of Canada expect their members of Parliament to ensure that they get a fair rate of return.
The other aspect is that Petro-Canada borrowed an additional $1.5 billion in order to buy Pacific Petroleums. In order to do that, it had to give preferred shares to the banks, which it did. Those shares have cumulative dividends. The banks have an absolute guarantee that they will always get their rate of return. The rate of return is tied to a couple of international monetary markets. If they feel a little shaky about it, they can make a call and Petro-Canada has to redeem those shares, plus accumulated dividends. The government has given a guarantee.
If they want to redeem those shares, they can insist on a premium of 2 per cent, so the banks cannot lose. The ultimate sweetener was that by doing it that way, they would not have to pay any income tax on the interest earned on the $1.5 billion they lent. That is an incredible situation.
A deputy minister of finance was on the board of Petro-Canada. The deal closed about November 1, and that special tax loophole was closed in the November 1978 budget. The man was clearly left in a conflict of interest situation, however innocent and well-intentioned. It was an enormous rip-off.
In spite of that, Petro-Canada was not doing well. The government stepped in and gave it a preferential back-in to the extent of 25 per cent, but it had to pay. It does that. It was still not making money, so when the Liberals came back into power they poured in another $80 million. Petro-Canada is still not doing well, so now we have the ultimate confiscation. It now has an absolute right to confiscate 25 per cent of our Canadian oil and gas companies.
The final insult is that Petro-Canada needs to buy another oil company. It is buying Petrofina. Six months ago, the shares were in the $60 range. When there is a potential sale in the wind, there are a lot of sales. Suddenly the shares went up to $86. I would like to see a list of those who bought the $60 shares and ran them up to $86.
Petro-Canada then made an offer of $120 per share. There was a doubling of the share value in six months. How will they pay for that? There will be a levy on every Canadian who drives up to a gas pump. Canadians will have to pay that for an oil company which has not added one barrel of oil to our reserves.
Petrofina has never gone out on its own to search for oil. It has never done the analyses, taken the risks or found anything because it does not have the necessary skills. This is not to criticize the officials of Petro-Canada, but the minute Petrofina becomes part of government, it will be part of a bureaucracy with a special way of doing things. That will kill the initiative to produce like Canadian Hunter does. Once the Canadian Union of Public Employees moves in, 1 wonder how efficient Petrofina will be.
I wonder if that is a wise use of our taxpayers' money. In the oil industry the provinces control the leases available and the
February 5, 1981

rate of production from oil wells. The federal government determines whether there will be exports, sets the price for oil and sets the tax rate in terms of profits and rates of return. Under those circumstances the oil industry is like a utility. Ownership does not mean very much.
Why are we so worried about the multinationals when we are now in the position of taking our hard earned tax dollars and buying these companies? Capital will leave this country. Petrofina will be laughing all the way to the bank. As I said, six months ago its shares were worth $60, and now they will be sold to the Canadian government for $120. What will Petrofina do with that massive amount of money? It will take it across the border to the United States, put it into drilling companies there and make a bundle.
Will we have any more oil? No. We have simply taken over a company which was working and paying taxes. It could not produce oil unless the province involved said it could have a lease. The rate of production was set by the provinces. The price and the tax was set federally. I would be interested in hearing what the governments says about that in terms of a general argument.


Mr. Kaplan:: It is so that Canadians will get the profits.


Blaine Allen Thacker: Let us look at that. If Canadians owned shares of Petrofina, I believe their rate of return would have been something in the order of $8 per share. If they put up $60 to buy a share and got an $8 return, that would have been a reasonable rate. However, we are paying $120 per share. What kind of rate of return is that?


Robert Phillip Kaplan: Ten times cash flow.


Blaine Allen Thacker: What about the $120 we had to borrow? At 15 per cent interest, that will more than use up what the dividend will be, so we will lose money.


Robert Phillip Kaplan: We are not borrowing it. You said yourself we are raising it by a tax.


Mr. Deputy Speaker:: The hon. member for Lethbridge-Foothills has about one minute in which to conclude his speech. I am sure other hon. members will have an opportunity to reply.


Blaine Allen Thacker: The last major point I was going to cover was with respect to tax expenditures. I have spoken about this in earlier debates. I believe this special task force should take a real look at tax expenditures.
In conclusion, I am convinced then that there is no need for this deficit, and there is no need for a $14 billion borrowing authority. We need to review the whole area of tax from the point of view of fiscal transfers, revenues, expenditures and tax expenditures, because in my opinion, with an honest look at the whole picture, we in this country could very easily and with very little manoeuvring-and certainly without hurting the people of the nation-have a balanced budget. It would lead to people feeling that the tax system was fair. They would then
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be prepared to pay their fair share because they would feel they were getting service from their government. I wish we could do that, but it sounds from the interjections on the other side that this is not even in their contemplation; maybe they will change someday.


Mr. Les Benjamin (Regina West):: Mr. Speaker, for 13 years in a row I have listened to the Liberals and the Tories sounding like kettles calling pots black, whether in or out of office. I am amused by the protestations regarding a fair tax system. I am amused by the protestations from one or the other, Grit or Tory, in or out of office, about borrowings and deficits. Both of those parties for 113 years have done exactly the same thing when in office. Neither one of them has learned anything, at least in the last 45 years. In fact, I find it amusing when they get up to tell us about the errors of socialism and communism. They say free enterprise is the best, the end all and the be all. We have had it for 113 years and there have not been any socialist governments in Ottawa.
Who got us into all this trouble? I ask the hon. member for Lethbridge-Foothills (Mr. Thacker), or the hon. member for Vegreville (Mr. Mazankowski) what got us into all this trouble in the first place. There were no socialists in power. This was caused by good old free enterprise.
On the question of borrowing $14 billion, in addition to money not yet borrowed, I would just ask what it is being borrowed for. I listened to the hon. member for Lethbridge-Foothills and the hon. member for Vegreville. I wish the latter would quit being bitter because he really is a nice guy. He would have made a good minister, a damned good minister. He was a good one while he was there, although he had some dumb colleagues. The hon. member for Lethbridge-Foothills, who just sat down, talked about the Department of National Revenue and its spending. He mentioned hospitals, medicare and so forth. I did not hear him say that this spending should be reduced. I am sure he did not mean that. Far be it from anybody in this chamber to make that suggestion.
I find it passing strange that people from a province which has its mess of potash or pot of message, sitting on $6 billion or $7 billion, should have the second highest medical and hospital premiums of any province in Canada. They should be bloody well ashamed of themselves. I ask the hon. member from Lethbridge, or any other member from Alberta, whether that is any fair kind of taxation, any Christian or moral treatment through government financing?
A worse case is that of hon. gentlemen who come from Ontario and rave in this place about national government spending on medicare.


An hon. Member:: How come so many people are moving into Alberta, by the thousands?


Leslie Gordon Benjamin: They are moving to Saskatchewan too. Do not worry. We all take turns being up and down, and when one is casting stones, one had better board up his glass windows. I have not heard any member of the Liberal or Conservative

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parties, either in or out of government, ever talk about the unfairness of a tax system which carries on the books of Canada right now an amount equal to our present deficit; $15 billion in deferred unpaid corporate income taxes.
By the way, Mr. Speaker, my credit union manager said today 1 could have a loan for a car at 17.75 per cent interest. If we only charged those corporations 10 per cent interest on the unpaid debt they owe the people of Canada, we would have another $1.5 billion. Where are those great restraint artists, the Tories and the Grits, every time we suggest something about the fairness of our tax system in this place? They say we cannot do that, it would hurt the people who sent us here and who we represent.
The thing about borrowing by our governments, national, provincial or municipal, is that those borrowings have to accomplish one of two things. On the one hand they represent deadweight debt. Let me take my friends in the Liberal and Conservative parties back to some fundamental economics of the dirty thirties and forties. Tommy Douglas and Clarence Fines showed you how to do it. The one is a deadweight to pay off genuine costs and expenditures of government for the people of our society. That is a deadweight debt and all of us share in the costs of recovering that debt.
Then there is the self-liquidating debt. It is not a debt, it is an investment. If a private corporation borrows $1.5 billion to buy out another oil company or some shopping centre, for some reason or other that kind of borrowing is quite all right and totally moral. However, if the government borrows for the same kind of purpose, that is terrible. There is something holy about a private dollar and something unholy about a public dollar. That is the nineteenth century stuff we are still hearing in this place.
Every industrial nation in the world, whether it is private enterprise, socialist, middle of the road like the Liberals-and that is where all accidents happen, in the middle of the road- have massive borrowings and massive investments in corporations which are in concert with the private sector or the co-operative sector. One could call this a cartel or whatever he likes. It is only here and south of the 49th parallel that people seem to think it is terrible if the government borrows a dollar, because deficits grow bigger and everything else. The CPR borrows and the shareholders have no say in that. At least the shareholders here and in our constituencies have something to say. If you go to an annual meeting of a major private corporation in this country and dig into their wastes and extravagance, you will have trouble. We are not pure here. We all agree we make mistakes. We all agree that at one time or another, individually and collectively, as the government or as the House of Commons, we may have spent or misspent money. If it is a private dollar, it is okay.
The hon. member for Vegreville was crying the blues for the oil companies. He mentioned oil drilling rigs and service rigs. Some of my relatives are in the oil well drilling and service rig
business, and I have been around with them since 1945. In fact, one uncle was in on the first operations in Turner Valley in the thirties. Oil drilling rig companies and service rig companies are nothing more than contractors for petroleum corporations. They do drilling and oil well servicing for oil corporations. Very few, if any, oil companies which amount to anything have very many, if any, drilling rigs or service rigs. They contract that work out. The boys who operate the drilling rigs and the service rigs follow the oil corporations wherever they happen to be going in the world. As far as I am concerned, whatever the volume of flight of drilling rig companies or service rig companies out of western Canada, or any other part of Canada, there is at this moment, it is nothing new. It means these companies are victims, as are the people of Canada, of corporate blackmail. They will follow corporations which do not like a particular government, whether it is the one now in Canada or in some other country in the world. That has been their history and tradition and the way they operate.
I wish this government had some more intestinal fortitude, but it wants to be in the middle of the road. It wants to try to please everyone, but it pleases no one. At least my friends in the Conservative party end up pleasing somebody. It may not be the country, but they please a lot of friends, most of whom do not even live here. At least they will please somebody; I will say that for them, if they want to take that as a compliment.
When we borrow for investment purposes, whether it is a public dollar or a private dollar, that borrowing will be liquidated by those who use either the service or the product produced. I am sure my friend, the hon. member for Leth-bridge-Foothills, would not have said a word in this place had a private corporation spent $1.5 billion to buy out Petrofina because he knows dammed well that Petro-Canada or whoever bought Petrofina would recover that investment out of charges to customers. The takeovers and the gambling which goes on between private corporations outbidding one another to take over what would be good business operations boggles the mind. Shareholders have little or no say.
There is no annual meeting or even a special annual meeting of shareholders. The bidding goes up and up and up between several private corporations, and if one wants to read the history of private takeovers for even just the last couple of years, one can find outrageous above-market prices paid. The stock exchange has shut down trading in shares a week or ten days later. However, if a government does this or if a Crown corporation does it, all of a sudden, overnight, that is terrible.
Well, we cannot have it both ways. It is still the people's money. It will still have to be recovered from those who use or buy the product of a particular operation which has been bought, whether it be public or private. Let us not have two standards. If we want to place strictures upon national, provincial and municipal borrowing in terms of what it returns to the people or to government-and assuming it is a self-liquidating debt-then we must place exactly the same strictures on private corporations, which do not have to answer and are not even accountable, as this government is, even when it does not like it, and that is most of the time.
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I would like to give an illustration with respect to borrowing. My province was bankrupt toward the end of the war and had a credit rating of zero or less. It was like the Welsh story. When a soccer game was lost, a man said the score was 20 to zero, and "We were lucky to get zero". That was the case with the credit position of my province in 1944. However, over the course of the next 20 years we borrowed $600 million just for our power operation alone and another $250 million for our telephones. We took electricity to every town, village and farm, and we took telephones everywhere. It was a self-liquidating debt, and we now own those services. We borrowed the money in New York, Switzerland, Toronto; you name it. Even Mr. Diefenbaker helped us borrow some money with debentures in 1960, God bless him. That was public borrowing. It was self-liquidating debt. We did it in a little place like ours with less than one million people. Everyone said we were stubble-jumpers and that we did not know how to run anything, but we went ahead and did it anyway. However, it was investment; it was not debt. It was investment; it was not an expenditure, and if this government had the courage of its talk, it would be borrowing twice this much money.
We need $1 billion a year for the next 15 years just in our transportation system, and my friend, the hon. member for Medicine Hat (Mr. Hargrave) would like to have $50 million of it spent on stock cars. That would be an investment. The people who ship cattle would pay for those stock cars over the next 30 or 40 years.
But we sit around beating each other's brains out. We are like the hound dog sitting on a cactus. We have all those needles up our backsides, and we just sit and howl.
We need to invest another $1 billion a year in housing and in the lumber industry. If that requires government borrowing as well as private borrowing, we bloody well should borrow, because it is self-liquidating.
My friend, the hon. member for Vegreville, made a point in the latter part of his remarks to which 1 listened carefully. I think he was perfectly right. We disagree on how to do it, but there is so much to be done in this country. We have the people with the necessary brains and know-how. We have the resources. We have little or no excuse, when we think of other places. We rely on nineteenth century theory and practice. When are we going to learn? Hon. members opposite and to my right all sound like R. B. Bennett, Herbert Hoover and Mackenzie King. They sound like 1930 all over again.


An hon. Member:: Where does Karl Marx fit in?


Leslie Gordon Benjamin: My hon. friend has been working very hard. Many of his predecessors in his party and in the party opposite have been working very hard to prove that Karl Marx was right.


Gordon Edward Taylor: You are doing well.


Leslie Gordon Benjamin: Karl Marx said that capitalism will destroy itself. If we look around the world, we find that in nation after nation there is greed. When greed and selfishness has been
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supreme, people have risen up in rebellion, and the first people who were executed or sent to labour camps were not ex-Nazis or ex-free enterprisers. The first people who were executed or sent to labour camps were former socialists, trade union leaders or co-operative or farm leaders. That is the history of that, which is again why I say that we have not learned anything in 45 years. So-called private enterprise governments in western Europe for decades have adopted a system of borrowing to finance, and the investment is either by the state alone, the state in conjunction with private corporations or a three-way combination with the co-operative movement.
Alberta, believe it or not, has more money sunk into Crown corporations than Saskatchewan. I do not hear them complaining about the borrowings guaranteed by the province of Alberta. I do not hear them complaining about the borrowings for their Crown corporations. I just do not hear them.


An hon. Member:: Don't confuse them with the facts.


Leslie Gordon Benjamin: Surely the question is not how much is being borrowed, but what is it being borrowed for? Should we be borrowing more for things that should be done for which we have been waiting many years? That is the type of question that should be dealt with in a bill such as C-59.
The repercussions and the results of the mindless Proposition 13 syndrome, which was imported into Canada from California over the last several years, is now catching up to California. What we hear are statements such as: "Too much government taxes. Our property taxes are too high," and so on. This sort of thing has spread like the bubonic plague, but it is now catching up to them and it will catch up here too. It does not matter whether it is a Conservative government, a Liberal government, an NDP government, or whatever, we need to have a planned economy. This fact has been recognized everywhere except in the northern part of North America.
We need a mixed economy. In other words, we should have a plan for the next five, ten, 15 or 20 years. However, if you mentioned a five-year plan 30 years ago, automatically you were labelled a communist. But if General Motors laid out a plan for the next 25 years, that was okay. This is the sort of scenario that we are moving toward. There is no real choice in the route we take no matter which party in this House is in power. Even if you have to hold your nose, you have to get on with it.


Some hon. Members:: Oh, oh!


Leslie Gordon Benjamin: Even if hon. members do not believe it philosophically, the reality of the survival of a decent, moral and civilized democratic society is a planned and mixed economy. In other words, we must have an industrial strategy, Mr. Speaker. That sort of thing has been proven and shown by example in a host of countries, many of which are not as well off as we are.

February 5, 1981
Borrowing Authority
I do not want to hear any more about this terrible borrowing. We should be borrowing more than we are as an investment.


John Horton McDermid: The Liberals would agree with that.


Leslie Gordon Benjamin: I am sure that my good friend from Vegre-ville could have been the minister of transport for at least four years. I believe, and he will tell me if I am wrong, that he would have put a lot of public investment into several areas of transportation in Canada.


Donald Frank Mazankowski: Private too.


Leslie Gordon Benjamin: Of course, private too. There is a mix. But without that kind of planning and investment which is self-liquidating, any government would be helpless.


Gordon Edward Taylor: Why didn't you vote against them?


Leslie Gordon Benjamin: 1 have voted against this government more often than my hon. friend. In fact, we have some interesting figures about the number of times the Tories voted with the Grits and the number of times the NDP did. You should take a look at them, they are funny. Talk about being in bed, Mr. Speaker, I find that on a given night when I want to be in bed with them, there ain't room because Bill Davis, Hatfield and all the federal Tories are in bed with the Grits. The Tories have voted with them more often than we have, so there ain't room in the bed for us any more.


Jean-Jacques Blais: Don't worry, it is no big thrill.


Mr. Deputy Speaker:: Order, please. 1 am sure the hon. member is aware of the item before us for debate tonight.


Leslie Gordon Benjamin: As a former colleague in this House said on the same matter a number of years ago, "Even if it is true, we are going to keep a tight hold on our pyjama bottoms."


Some hon. Members:: Oh, oh!


Leslie Gordon Benjamin: When one talks about interest rates, which governments have to pay to the Bank of Canada, to private lenders or to foreign lenders, a great deal of fuss is made about it. The two gentlemen who spoke before me from the Official Opposition made some fuss about it. They should, because they have a lot of constituents, just like the rest of us, who are getting hit pretty hard by these interest rates. When you are faced with 17.75 per cent on a car which will be obsolete in two years, it is a problem.


John Horton McDermid: Borrow more, and that will fix it up.


Leslie Gordon Benjamin: I find it passing strange that you can never convince these free enterprisers about mortgage rates and consumer loans for essentials that we should have interest rates based on income, based on ability to pay or based on a similar system to our income tax. The answer we hear to a suggestion like that is, "No, you have to pay the market price. You can go down to the lovey-dovey finance company if your credit rating
is no good and you do not have a secure job." That is private enterprise. Then these private enterprises have the nerve to get up and cry about interest rates. These free enterprisers leave me cold. They leave me frozen on both sides.


Some hon. Members:: Oh, oh!


Leslie Gordon Benjamin: I do not know why the hon. members are not up here trying to save these free enterprises. They just will not let them.
To return to a point I made earlier, I find it incredible that you can pay 18, 19 or 20 per cent to have a decent place in which to live and they can let the corporate sector in this country have $15 billion in interest free loans at the expense of the taxpayers of Canada. So, I say do not talk to me about a free and fair tax system when the corporate sector not only has those deferred taxes, but pays a lower volume of taxes than the private individual. The hon. member for Lethbridge-Foothills ought to take a look at that angle. It would hurt a lot of shareholders who would probably have to take 25 cents or 50 cents a share less in dividends of corporate profits in order to pay their fair share of the cost of running this country.


An hon. Member:: That is an old Arnold Peters speech.


Leslie Gordon Benjamin: So, if hon. members want to worry about the tax system for individual taxpayers, I suggest that they take a look at the other side of the coin.
When we consider borrowing I urge that we consider it as an investment in the assets of this nation so we can have a return on that investment over several generations and we can leave a hell of a lot more for others than there is at the moment.


An hon. Member:: That is a big, big debt.


An hon. Member:: That is fuzzy thinking.


Mr. Arnold Malone (Crowfoot):: Mr. Speaker, the last speech would make Mao Tse-tung look as though he should be the president of General Motors.


Some hon. Members:: Oh, oh!


Arnold John Malone: I am used to receiving a lot of gas from this compost heap to my left, but tonight I think was the best example of what socialism would do to Canada. The speech by the hon. member for Regina West (Mr. Benjamin) struck straight against individual ingenuity. All 1 can say after hearing a speech like that is that if the hon. member had his way, the government would be producing for itself until it choked. It would collapse in the cancer of its own growth and development. It would be without any individual initiative that should go-
February 5, 1981



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Mr. Jack Murta (Lisgar):: Mr. Speaker, I rise tonight regarding a question I raised in the House a few days ago with the Minister of Transport (Mr. Pepin). It concerns the whole matter of grain transportation and, more specifically, the Crowsnest Pass rate. My objective tonight is not to discuss in any way the pros and cons of our grain transportation problems, because I believe the issue has been discussed enough in those terms.
My purpose tonight is to ask the Minister of Transport or his parliamentary secretary about the establishment of a task force. I believe this is necessary in order to resolve the problem of the Crowsnest Pass rate, which is very important matter to the whole economy of western Canada. It is my opinion that at this time the government must proceed toward the resolution of the freight rate issue.
It is interesting to note that most farm organizations in western Canada are now at the point of advocating a change in the terms of the rates. Obviously, all farm organizations do not agree on the type of change, but nevertheless it is very significant that these organizations, which generally represent most of the farmers in western Canada, are advocating a change at this time.
As 1 understand it, one of the stumbling blocks to implementing a change in the rate, is the tremendous amount of bickering in cabinet. The Minister of Transport is certainly not the master of his own destiny; he is being stopped by various cabinet ministers. We hear that two of those cabinet ministers are Senator Hazen Argue, the minister responsible for the Canadian Wheat Board and Senator Olson, who is responsible for the economic development portfolio. It is interesting to note that both of these gentlemen, who are perceived as being against any change or study of the Crowsnest Pass rate, are non-elected members of cabinet. I think the fact that both men are non-elected is a great disservice to Canada at the present time. The government should listen to the majority of people in western Canada. Unquestionably, the majority of people want a change in the rates. The exact details of any change could be worked out by a task force, and from time to time the Minister of Transport has indicated one might be established.
I think a task force should address two or three specific matters. Obviously, the terms of reference must be established first of all. There should be a very specific time limit as we do not want to be seen as studying the grain transportation problem in western Canada yet again. The task force proposals
Adjournment Debate
could then come before Parliament to be debated. If any legislative changes were required in order to facilitate the task force findings, they could be done at that time. This would take the issue out of the realm of pure politics for a short period of time.
In my opinion, any change which occurs in the rate must address itself to the livestock industry first and then to the processing industry. I think both industries are being harmed at the present time. In western Canada there exists a chance for increased economic growth and diversification, but that will only occur through some change in terms of the Crowsnest Pass rate. In other words, change must be just that-it must be a change. It must not be just an adjustment in terms of what we already have. The Crow rate issue has become an issue of regional development in western Canada. This is why it is vitally important that the issue be reviewed outside the political sphere by a task force. I believe there is a chance for growth and diversification in western Canada through proper changes to the Crowsnest Pass rate. If we allow this opportunity to slip by, I am very much afraid that it will impede the long-term growth of that very important region of the country.


John Leslie Evans: Mr. Speaker, I thank the hon. member for Lisgar (Mr. Murta) for giving me an opportunity to speak on this matter. From what he has said tonight,
I can see that he shares my concerns, the concerns of the Parliamentary Secretary to the Minister of Transport (Mr. Bockstael) and those of the Minister of Transport (Mr. Pepin) about the urgency of this very important matter, and about the need to move toward a speedy resolution of the now famous, or I guess I should say infamous, Crowsnest Pass rates.
The minister has held many meetings during his western visits in the last few months to discuss the problems that flow from the Crow rate. Indeed, may I say here that he has received congratulatory notes from parties equally concerned. If I may paraphrase the comments, these urge him to continue his courageous efforts in seeking a resolution to the Crow rate. The hon. member for Lisgar also encouraged the minister, and 1 believe the tone of his comments was congratulatory as well.
I could go on and indicate the reasons changes are needed in the Crow rate, but I think the hon. member for Lisgar covered this area tonight, and I note that he too was urging a speedy resolution. I can refer the hon. member to the recent speeches by the Minister of Transport. In speeches to the Saskatchewan Wheat Pool and the Alberta Wheat Pool the Minister of Transport outlined in detail his position on the Crow rate. He emphasized his desire to seek a resolution openly and in full consultation with those most directly concerned. In speeches in Calgary and Regina before Christmas, the minister suggested that it would be useful to appoint a small task force, as has also been suggested by the hon. member for Lisgar, to work with concerned farm organizations to try to develop a consensus among those who are most directly affected by the Crow rate.

February 5, 1981
Adjournment Debate
The hon. member for Lisgar has indicated that he realizes and understands fully the need for the development of consensus between those interest groups which, in some cases, have very divergent opinions with regard to the most appropriate method of solving this particular problem. Naturally, the government is anxious to consider the views of all those interested and would therefore seek the opinions of eastern food processors as well as the opinions of western farmers and in particular would consider the proposals forwarded by the western agricultural conference and the Prairie Farm Commodity Coalition.
In conclusion, may i assure the hon. member that the minister and his cabinet colleagues are working to resolve this most difficult problem as quickly as possible.
BANKRUPTCIES-RE-MOR MANAGEMENT INVESTMENT-C & M FINANCIAL SERVICES-INVESTIGATION CONDUCTED BY COMMITTEE OFONTARIO LEGISLATURE


William James Kempling: Mr. Speaker, on January 23, as reported at page 6503 of Hansard, I asked a question of the Minister of State for Finance (Mr. Bussieres) with regard to the bankruptcy of Astra Trust and its various associated companies. Hon. members are aware that a committee of the Ontario legislature has been examining the matter of Re-Mor Investment Management and C & M Financial Services and the relationship of these two companies with Astra Trust. It has now been shown that the three companies are interconnected through common ownership of share stock.
Let me deal with the question 1 put to the minister regarding the approval of the application to Astra Trust. We now know, through evidence given at the committee of the Ontario legislature, that the application for a trust licence was put to the Department of Finance on three occasions. I believe that the original application was submitted in 1972. At that time inquiries were made.
We know that the Superintendent of Insurance turned down the applications on two occasions due to concerns about some of the proposed directors. All of this information came out in testimony before the committee, although it has been denied in this House. Part of the testimony presented by some officials of the Department of Finance was given after reference to notes. They were not direct statements made by officials of the Department of Finance, but were statements from notes of lawyers.
One comment was that the Department of Insurance was mainly concerned with the financial details of the application and that the information supplied by the RCMP was not very reliable. 1 find that view to be absolutely incredible. Of course the proof of the accuracy of the RCMP reports is evidenced by the order to wind up Astra Trust and by the bankruptcy of Re-Mor and C & M. We note that fraud charges have been laid, and 1 am sure more charges will follow in this amazing and complicated financial collapse of three companies.
There is ample evidence from the report and evidence of the Ontario legal committee to cause the Government of Canada to conduct a full inquiry into this whole financial mess. It is known that the Superintendent of Insurance recommended against a trust licence. We know that extreme pressure was applied. The sworn evidence shows in the notes and other documents that dozens of memos and phone calls were made. One note quotes Senator Stanbury, in an August 11, 1975 note, as saying there would be pressures, problems and flack if this application were turned down.
What magic did these people in Astra Trust have? What hold did they have that they could keep this thing going for a number of years?
Phone calls and visits to the office of the then minister of finance occurred over a period of about two years. There was lobbying and pressure, and a dramatic turnabout occurred somewhere between October 21, and November 12, 1976, when the Astra Trust application was approved. When dealing with private investors in a trust environment there is a special set of conditions. Many trust clients are unsophisticated investors, while others are state trustees bound by the court to administer an estate in a particular way. Speculative investors do not normally seek out a trust company.
The troubles that settled on Astra Trust began almost at the start. Within 30 days of the issue of the Astra Trust licence, there was a stock split, five to one. The evidence of the committee shows that one major shareholder made $1.5 million on the split. He had real inside information. Other people made lesser amounts. Shares were put into a voting trust without authorization. It is evident that insiders made a bundle.
One of the people doing the lobbying for Astra Trust became a director and benefited by the five to one split. That causes one to wonder about the conflict of interest of former Members of Parliament. The person I referred to was a former Member of Parliament, a parliamentary secretary and chairman of the justice committee of the House of Commons.
I cannot believe that the Department of Insurance did not know of the five to one stock split; I cannot believe that the department was unaware of the agency certificates that were being issued; I cannot believe that the department was unaware of this misadventure in Spain when $2 million was invested in a condominium unit that was bankrupt before people got there. I find it strange that the operations of C & M were not more closely monitored when it was a condition of the granting of the charter that it be closed down.
If one turns over the coin, one must assume that the people directing Astra Trust felt secure in their operation. One would assume that a newly-chartered trust company would be very careful in its start-up operation. One would not think it would engage in stock splits and insider special deals, issue questionable certificates, open more branches than authorized, or venture into a condominium development in Spain without first clearing these matters and discussing them with the Department of Insurance or officials in the government in order to ensure that they were operating within the guidelines.
February 5, 1981

They must have felt they had adequate protection from some source that would allow them to operate in this loose fashion.
There is ample evidence and a sufficient number of unanswered questions to support a full inquiry into this matter. Beyond that, the trust industry would benefit from an airing of the matter. It just will not go away; the industry has been hurt badly by the Astra Trust fiasco. The time to act is now. I hope the minister will shoulder his responsibility and order a full inquiry into the matter.


John Leslie Evans: Mr. Speaker, on Monday, January 26, warrants issued by the Deputy Speaker of the Ontario legislature were served on Richard Humphrys, Superintendent of Insurance, and Richard G. Page, director of the trust and loan division of the Department of Insurance, requiring them to appear before the Ontario standing committee on the administration of justice. It is clearly established by legal precedent that a provincial body is without authority to investigate or inquire into the administration and management of a federal agency. This is a major principle.
Accordingly, Messrs. Humphrys and Page, although they appeared before the committee as required, took the position through counsel and at the direction of the minister, that since the only matters being studied by the committee that were within their knowledge involved their duties and actions as officers of a federal department of government, they were not required to give evidence before the committee. Their view was supported by the deputy attorney general of Ontario at the same session. The committee then asked if Mr. Humphrys would answer questions relating to evidence already given to the committee and to the interaction between federal and provincial legislation and regulatory activities.
After consideration and consultation with the minister, counsel wrote to the committee indicating that it did not seem possible to respond to this modified request without breaching the constitutional principle. The committee insisted on the validity of the warrants, and on January 29 counsel filed an application for a judicial review of their validity.
The government takes the view that matters relating to Astra Trust and the alleged involvement of Re-Mor and C & M are being adequately investigated by the Ontario Provincial Police, the RCMP and persons in charge of the liquidation of Astra, Re-Mor and C & M.
The minister is satisfied that the actions of the department of insurance in the matter were appropriate and there was no improper pressure applied to department officials at any time. A charter was granted to Astra Trust after careful investigation and inquiry, whether by the RCMP or other bodies, into every matter brought to the attention of the department. Close co-operation with the Ontario authorities took place at the time, and subsequently.
The department had no knowledge of the formation of Re-Mor and only learned of its existence in the spring of 1980. Termination of the activities of the trust company followed
Adjournment Debate
soon after. The department had no authority to look into the affairs of Re-Mor even had it known of the company's existence.
The principals seeking to form Astra Trust undertook to close down C & M after the trust company was formed, but the department had obtained a fully audited statement by an independent auditor of C & M before a trust company charter was granted. The audit report was without qualification.


ENERGY-PROJECTED PRICE INCREASES FOR CRUDE OIL
Hon. Sinclair Stevens (York-Peel):: Mr. Speaker, this evening I would like to refer the Minister of Energy, Mines and Resources (Mr. Lalonde)-and 1 am sorry he is not in the chamber-to an exchange that we had over eight months ago on June 4, as it appears at page 1740 of Hansard. At that time we were discussing the possibility that the government might not be able to enter into an agreement with the province of Alberta and other producing provinces with respect to the price of oil in this country. At that time, the energy minister said:
-we are in the process of negotiation.
That was on June 4, 1980. I asked the minister at that time, and I quote:
Since this is the first time since mid-1977 that we are coming to the conclusion of an existing crude oil pricing agreement between Alberta and Canada, I would ask the minister: On July 1, in the absence of a further extension to the June, 1977, agreement-
Is it not true that Alberta may raise the price of oil unilaterally? The minister replied:
I have stated repeatedly in this House that our purpose is to achieve a negotiated agreement. This is still our objective and first priority. I hope by the end of the month to be able to announce to my hon. colleague that indeed we have reached agreement.
I think it is only fair eight months later, almost to the day, that we ask the minister what has gone wrong. We have learned various things in the interval. For example, we have learned that in the energy program which was brought in with the budget on October 28 that prices are going to rise. In January, 1980, the price was $14.75 per barrel. By August, 1980, it had gone up to $16.75, up $2. By January, 1981, the price reached $17.75 per barrel.
The rather astounding thing which has received so little publicity is that this government has gone on to indicate it intends to raise the price of conventional oil to $66.75 by 1990. This will mean that roughly, between the time I asked that question and 1990, the government has in mind increasing it by $52 per barrel. That works out to an average per year increase contemplated by this government of over $5 per barrel.
During the campaign we were unfortunately forced into, and which we lost, the government lambasted us for raising the price of oil too quickly. Hon. members will recall in the budget debate they belabored the then minister of finance, who stated

Adjournment Debate
we were prepared to raise the price of oil in stages by $4 a barrel in 1980 and by $4.50 a year thereafter, subject to further adjustment after 1982 if necessary. In short, we were contemplating a lower price increase than is this government. We were truthful, they were deceitful. That is only part of the utter deceit this government exhibits and the utter contempt in which it holds the Canadian public. We find the real thing that government craved after as far as energy was concerned was revenue.
We have the startling fact revealed that in 1980 the total take from energy revenue sources was $2.3 billion. By 1983 this government anticipates that the revenue will jump by $6.7 billion to $9 billion. How would you feel if you were a member of the industry and saw a revenue increase during the same time-frame of only $2.1 billion, especially if you were a resident of the province of Alberta, while at the same time you saw a revenue increase on the part of this government of $3.4 billion, or if you take the three western producing provinces, a revenue increase of $4.5 billion?
In short, that minister misled this House when he said in answer to my question on June 4 that his top priority was one of negotiation with the hope of reaching an agreement. He misled this House by knowing at that time he intended to bring in a proposal which would gouge the people of the provinces of Saskatchewan, Alberta and British Columbia, and the industry itself. In short, I would suggest that is why we have no agreement in this country.


Mr. Deputy Speaker:: Order, please. There are certain terms that are parliamentary and the hon. member is coming very close to an unparliamentary term. If he said "misled", I think he would have to stop at that, but the suggestion that there was a knowing misleading of the House, by the traditions of the House, is unparliamentary. I invite the hon. member to rephrase his remarks.


Sinclair McKnight Stevens: Mr. Speaker, I am not clear in what respect you feel I have said something that is unparliamentary.


Mr. Deputy Speaker:: I believe the tradition of the House is that it is a breach and an unparliamentary expression to say that another hon. member has knowingly misled the House. If the hon. member confines his remarks simply to saying that the House has been misled, that is acceptable.


Sinclair McKnight Stevens: Mr. Speaker, I think if you and the officer at the Table check the record, you will find that 1 did not say, as Your Honour has indicated, that he knowingly misled the House. I simply stated he misled the House, that it was deceitful and that he was gouging the people of those three fine provinces. In short, I was indicating that what has been revealed, mainly in the budget and the so-called national energy policy, since our question of June 4, has brought out very clearly the utter deceit and contempt in which this government holds the Canadian public with respect to this question of energy pricing and with respect to this government's handling of the entire energy issue in this country.
In short, we have an 18 cents-plus per gallon increase in the price of gasoline. Hon. members opposite did that by deceit; they will pay the penalty.


Roy MacLaren: Mr. Speaker, I do not suppose engaging in similar intemperate remarks to those of the previous speaker-


Sinclair McKnight Stevens: They are true, though.


Roy MacLaren: -would advance our understanding of the pricing policies of this government, so perhaps I should take a moment and attempt to explain to the hon. member the basis of that policy.
It is evident from the hon. member's remarks that he does not understand the National Energy Program, which sets out the wellhead pricing schedule we intend to implement. Starting from a price of $16.75 for conventional oil in mid-1980, the price is to rise by one dollar increments every six months until mid-1983 when the increases will be accelerated, so that by 1990 the price of conventional oil will have reached $63.25 per barrel. The oil sands reference price will start at the international price level and move ahead at a considerably higher rate. Intermediate, between those two pricing schedules, will be a third pricing schedule to encourage tertiary recovery of oil.
The pricing elements then become the basis for establishing the blended price for all consumers, to which reference has been made in the Speech from the Throne and elaborated upon in the national energy policy.
The government stands ready to negotiate with Alberta the implementation of this pricing system. In preparation for that negotiation, officials of the two governments have been holding a number of meetings to clarify differences in data interpretation and to make recommendations to ministers regarding the issues to be settled at the ministerial level in the price negotiation.
1 must emphasize that the federal government is eager to settle these pricing matters in the interests of all Canadians. At the moment, however, we are still awaiting an indication from the Alberta government as to its readiness to proceed.
The issue of oil prices cannot be separated from the issue of revenue sharing. The National Energy Program will ensure that the Alberta government has revenues far in excess of its expenditures for decades to come, while at the same time providing for a fair and equitable sharing of costs and benefits by all Canadians.
As we enter this all-important negotiation, we shall make it quite clear that nothing the federal government has said or done is meant to challenge the oil-producing provinces' indisputable ownership of their resources. Under these conditions there is no reason why a satisfactory resolution of the pricing issue should not be expeditiously reached in a manner which will best serve the interests of all regions of Canada.
February 5, 1981


COMMONS IM H AT I S
[Stage Direction]
Adjoinunit ill Dvhate
Mr. Deputy Speaker:: The motion to adjourn the House is At 10.29 p.m. the House adjourned, without question put, now deemed to have been adopted. Accordingly this House pursuant to Standing Order, stands adjourned until tomorrow at 11 a.m.
6961

Friday, February 6, 1981