1981-12-07

ROUTINE PROCEEDINGS


Mr. Chuck Cook (North Vancouver-Burnaby):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. The government has decided to discriminate against all retail sales employees by taxing the long-standing purchase discount benefits offered by their employers, which inevitably means an increase in consumer prices at a time when this country can least afford it. Therefore I move, seconded by the hon. member for Calgary North (Mr. Wright):
That this House condemn this arbitrary and totally unfair taxation and inflation-fuelling policy which will hurt all retail employees and all Canadian consumers.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ADMINISTRATION
Mr. Gordon Taylor (Bow River):: Madam Speaker, the Liberal government is all mixed up. The Liberals reward Governor Bouey for raising bank interest rates by increasing his salary to over $100,000. The same government "rewards" the farmers who produce the food to feed Bouey and the rest of us by cutting their capital cost allowance in half, providing too little for the Farm Credit Corporation to even begin to meet the needs, and enacts budget provisions that make it impossible for farmers who have been working 40 and 50 years to retire. Therefore I move, seconded by the hon. member for Prince George-Bulkley Valley (Mr. McCuish):
That this House recommends that the Minister of Finance and the Prime Minister of Canada be referred to the best psychiatrists available to ascertain if this twisted thinking can be cured before the whole country goes down the tube.
I will personally pay the costs if a cure can be found.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



EXTERNAL AFFAIRS


Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, my motion concerns the fate of the Soviet dissident Andrei Sakharov. I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That this House express its grave concern to the Soviet authorities about the reported forced hospitalization and treatment being accorded to Nobel Peace Prize winner Andrei Sakharov, and his wife, both of whom are on a hunger strike, and further, that the House consider this action and the refusal of the Soviet authorities to permit their son's wife to join her husband in the United States, to be violations of human rights as set out in the Helsinki Final Act.


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


Some hon. Members:: Agreed.


Madam Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.


Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, in light of statements attributed to the Governor of the Bank of Canada that the high level of the minimum wage contributes to inflation, and in light of the fact that the recently announced salary increase of the governor exceeds the yearly level of the minimum wage, I move, seconded by the hon. member for Selkirk-Interlake (Mr. Sargeant):

December 7, 1981
5.0.	43
That the governor be invited to live for 12 months on only his increase in salary and that he then prepare a submission for Parliament on his views regarding inflation and minimum wage earners and, failing this, that he be asked to resign.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



THE ECONOMY


[Stage Direction]
5.0.	43
Mr. Bill Wright (Calgary North):: Madam Speaker, in an interview last Thursday the Prime Minister stated that the blame for high interest rates lies with the banks, the market economy, and individuals who want good returns on their Canada Savings Bonds, not his government. What he should have said was that interest rates are determined by the government's Bank of Canada rate, the government's Bank of Canada control over treasury bill prices, and government borrowings. I move, seconded by the hon. member for Bow River (Mr. Taylor):
That the government admit that it alone is responsible for high interest rates.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



GOVERNMENT OF CANADA


Mr. Bill Domm (Peterborough):: Madam Speaker, recent reports have indicated the regrettable and shameful fact that the Lieutenant-Governor of Saskatchewan has, as his official vice-regal residence, two rooms in a downtown Regina hotel, where he finds it increasingly difficult to accommodate his wife, and he feels that he may not be able to offer appropriate quarters to the Queen on her next visit. I move, seconded by the hon. member for North Vancouver-Burnaby (Mr. Cook):
That this House assure the Governor General of Canada and Mrs. Schreyer that no notion is being entertained of transforming Rideau Hall into a heritage tourist attraction and thus requiring that he and his wife move into furnished rooms in a downtown hotel.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



THE BUDGET


Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, given the claim of the November 12 budget that 12 million Canadians will realize federal income tax reductions amounting to $2.4 billion, yet total federal revenues are projected to increase by more than some $9 billion in the same period, I move seconded by the hon. member for Don Valley West (Mr. Bosley):
That the Minister of Finance be directed by this House to admit that more than $10 billion of new federal revenues for 1982 will come one way or another from every Canadian consumer in the form of cunningly disguised energy taxes, increased federal sales taxes, inflated prices due to taxes on production and other concealed surtaxes, all of which will be especially damaging to low and middle income Canadians who will face an over-all federal tax burden of more than $400 per capita or almost $2,000 for the average family of four.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

[ Translation]



HAZARDOUS SUBSTANCES


Mr. Terry Sargeant (Selkirk-Interlake):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
Whereas tests conducted by the federal government have revealed that about 40 per cent of the homes insulated with urea formaldehyde foam constitute a serious health hazard, and whereas the Minister of Consumer and Corporate Affairs (Mr. Ouellet) has acknowledged the government's moral responsibility in this matter, I move, seconded by the hon. member for Churchill (Mr. Murphy):
That the minister provide immediate assistance to these victims of a negligent government.


Madam Speaker:: Under the provisions of Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.
December 7, 1981



THE BUDGET


Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of some urgency. One of the many areas in which the recent federal budget creates undue and unwarranted hardship for Canadians is that of tax penalties related to life insurance policies. Under the terms of the budget, a policyholder would be required to report accrued investment income on the policy or annuity every three years, even though no income is actually received. I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That the Minister of Finance, having recognized the misguided advice he received from department officials and having thus changed parts of his budget, now take immediate steps to cancel this insane tax measure with respect to life insurance policies.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



MINES AND MINING


Mr. Doug Anguish (The Battiefords-Meadow Lake):: Madam Speaker, I rise on a matter of urgent and pressing necessity under Standing Order 43. I move, seconded by the hon. member for Humboldt-Lake Centre (Mr. Althouse):
That this House support a full-scale inquiry into the proposed shutdown of Eldorado Nuclear's uranium mine and mill at Uranium City before any further action is taken towards the shutdown of that operation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Charles Henry (Chuck) Cook: Madam Speaker, my question is directed to the Minister of Finance.
Oral Questions
The minister's budget papers indicate that he intends to include in taxable income any discount received by a retail sales person on the purchase of goods from the retailer. This policy means that every retail sales person must now receive a higher salary, which will then be passed on to the consumer. Will the minister reconsider this budget provision, as it will only contribute to inflation?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, the hon. member has asked me to consider his representations. As I have said on previous occasions in the House, I have been listening to many representations since the presentation of the budget. I would be happy to include his particular aspect in that review.


EFFECT OF EMPLOYEE DISCOUNTS ON PRICES
Charles Henry (Chuck) Cook: Madam Speaker, I am sure that the hundreds of thousands of retail employees across the country, and particularly retired ones, will keep the minister's answer in mind the next time they go to the polls. My supplementary question is a simple one. Does the minister not realize that employee discounts have kept down prices in department stores for decades?


Allan Joseph MacEachen: Madam Speaker, when the hon. member presents a question which is not rhetorical, I would be glad to answer it.


REQUEST THAT POLICY BE CHANGED
Charles Henry (Chuck) Cook: Madam Speaker, it may be a first for the parliamentary telecast. I should point out that special arrangements have been made in all Woodward's department stores in Alberta and British Columbia in order that they could hear the answers this minister is giving to these questions. The Retail Council of Canada pointed out that 1,500,000 retail employees are affected by this budget proposal. If we include families, why will the minister not reassure over 5 million Canadians that he will change this horrendous, unfair budgetary policy which affects all Canadians?


Allan Joseph MacEachen: Madam Speaker, I think the hon. member ought to be a bit more certain about his facts before he lets out all these dire prophecies to the employees of these companies. What I have said in my budget is that certain taxable benefits were to be considered and that administrative arrangements would be made by the Minister of National Revenue. Until these are made available, I do not think the hon. member ought to raise fear in the way that he is doing.

December 7, 1981
Oral Questions BANK OF CANADA


EFFECT OF ACTION ON INTEREST RATES
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, one of the principal causes of the slowdown in retail sales which we have suffered in the past few months has been the very high interest rate policy followed by the government. Last week, following its monetary policy, the Bank of Canada clearly took specific action in the marketplace to maintain interest rates at current levels, or possibly even to push them higher. Since high interest rates are the single most important factor in causing the current recession, record bankruptcies and high mortgage rates, why did the bank take the action of attempting to force interest rates higher?


Allan Joseph MacEachen: Madam Speaker, obviously the purpose of the government is to achieve a lowering of interest rates. As the hon. member realizes, in the past several months there has been a rather rapid decline in interest rates. We have the lowest rates now since a year ago.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: The hon. member referred to the operations of the Bank of Canada last Thursday, presumably at the treasury bill operation.


Michael Holcombe Wilson: Through the week; through the week.


Allan Joseph MacEachen: I have not discussed the day-to-day operations of the Bank of Canada. It is not my intention to carry out the functions of the Governor of the Bank of Canada, but clearly it is the intention of the governor, as well as it is the intention of the government, to bring about as rapid a decrease in interest rates as can be justified in current inflationary circumstances. As the hon. member knows, the basic thrust of the budget was to provide some support for the decline in interest rates through very substantial reduction in our financial requirements, and thereby reduce pressures on the market and give some rather important signals to the community that we were serious about reducing inflation. That is the basic thrust of the budget. It is intended to support a decline in interest rates over time.


BANKS AND BANKING
Michael Holcombe Wilson: Madam Speaker, my supplementary question is also for the Minister of Finance. Last week we had the Governor of the Bank of Canada saying that he was responsible for interest rates. Later in the week the Prime Minister said that the high interest rates were the fault of Canadians. Because there is obviously some confusion between the two parts of the government, because there is some
very major concern on the part of Canadians over the very high bank profits announced in the past week, would the minister explain to the House why he will not refer the matter of interest rates and bank profits to the Standing Committee on Finance, Trade and Economic Affairs for a full review of these two very important factors?


Allan Joseph MacEachen: Madam Speaker, I will give consideration to the hon. member's representations. He is suggesting that the question of bank profits and interest rates be referred to the standing committee. That is a matter to which I will give consideration because I believe that the question of bank profits in particular is one that ought to receive, certainly, the scrutiny of the House of Commons. It has been receiving that scrutiny on a daily basis by questions in the House. It is a matter of concern in the present circumstances. I will be glad to consider whether that particular question should be referred to the committee.


Mr. Clark:: And interest rates too. The minister nods.


HOUSING
Mr. Edward Broadbent (Oshawa):: Madam Speaker, my question is for the Minister of Public Works who is in charge of housing. The last thing the people of Canada want at this point is a committee looking into bank profits; they want an excess profits tax to be levied and the money used for housing.
On Friday the Minister of Finance once again showed that he did not take housing as a serious problem. This was followed on Saturday in Thunder Bay by a spokesman for the housing industry who appeared before the NDP task force on the economy, saying, "Somebody is pulling the wool over our eyes,'' referring to the statements of the minister and others. That same businessman noted that in Thunder Bay alone there were more than 60 homes up for sale, subject to power of sale. Although those families do appear in statistics, will the minister admit that there are thousands of other families in Canada who have to pay $200 or $300 or more in increased mortgage payments now, who do not show up in statistics nor do they get any benefit from the government's budget?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, this morning I had the opportunity to discuss these very concerns with the minister of housing for the province of Ontario. He was responsive to the initiatives that were taken by the Minister of Finance in setting aside $350 million for the next two years through the budget which would, first of all, assist people faced with mortgage renewal problems who had difficulty after they had to put a fair amount of their income toward mortgage renewal. The officials and the minister of housing for this province felt that would be of assistance to
December 7, 1981

many families at this time, Thunder Bay being one of the cities affected.
On the second point of interest rates, there is no question that the reduction in interest rates over the last five to seven weeks has made it much easier for people to meet increased interest rates over and above those that pertained when they took out the mortgages they are now seeking to renew.


REQUEST THAT EXCESS PROFITS TAX BE LEVIED ON BANKS TO PROVIDE HOUSING FUNDS
John Edward Broadbent: Madam Speaker, the minister's answer provides not one bit of benefit for the 60 families in Thunder Bay. That is the first point. Second, he did not answer the question that, notwithstanding the slight drop in interest rates, in my judgment, and in the judgment of those with expertise, outside the House of Commons and the industry, we are still left with thousands of families who are suffering because they have to increase their monthly mortgage payments. The minister did not deal with that. However, I would like to ask him another question.
Considering that the final bank profits are now in, and they are up $1.7 billion, will the minister take some reasonable action and speak to the Minister of Finance and request that we have fair taxes for the banks; and specifically considering the fact that if their profits were at the same level at which they were last year, we would have $700 million in additional revenue which we could use for housing, will he request the Minister of Finance to levy an excess profits tax to get that $700 million from the banks and put it into housing?


Some hon. Members:: Hear, hear!


Paul James Cosgrove: Madam Speaker, the Minister of Finance has already indicated, subsequent to the introduction of the budget, that he believes the banks can do more to assist Canadian home owners, even with the provisions introduced in the budget which are taken for granted. As I have indicated, there has been an allocation of $350 million toward meeting mortgage renewal difficulties and toward stimulating new rental construction. I believe that, as well. I know that some of the banks, for example, have come up with mortgage renewal plans that will cost the banks some few millions of dollars. I would hope that the industry, including the trust companies which, by the way, have a larger portfolio in mortgages for home owners than do the banks, and all other financial institutions, including credit unions, could be more flexible and could allocate on a voluntary basis a larger proportion of their portfolios toward solving the problems of home owners.


Some hon. Members:: Hear, hear!
Oral Questions


QUERY RESPECTING PROVISION OF ASSISTANCE TO HOME OWNERS
John Edward Broadbent: Madam Speaker, I will try asking a question of the Minister of Finance. I say to the minister, first of all, that some 150,000 Canadian families renewed mortgages at the excessive rate of 23 per cent in August, September and October. As a result of that interest level, the banks are currently taking in an additional $20 million a month from these families. A short time ago the minister promised he would do something about these Canadians who have been particularly badly hit. Today, will he tell us one plan of action or one specific proposal that he intends to bring forward to the House to help these people who are going seriously into debt?


Allan Joseph MacEachen: Madam Speaker, the same question was raised some days ago by the House leader of the New Democratic Party, and at that time I said that I intended to have that matter referred to the group which was established by the government to maintain consultation with the Canadian banks. That is the follow-up that I am taking in order, if possible, to assist those particular home owners caught in that period of very high interest rates.


PRESENCE IN GALLERY OF LAW ENFORCEMENT MINISTERS OF THE PROVINCES
Madam Speaker:: I would like to draw the attention of the House to the distinguished presence in our gallery of the law enforcement ministers of the provinces who are attending a conference in Ottawa and who have honoured us with their
visit.


Some hon. Members:: Hear, hear!


CANADA POST
Mr. Bud Bradley (Haldimand-Norfolk):: Madam Speaker, my question is directed to the minister responsible for the Canada Post Corporation. The minister will be aware that the corporation proposes to force municipalities to send their public utility bills via first class mail at the planned 30 cent rate. These are bills which, in the past, have been delivered either by their own employees or by organizations such as Boy Scouts or Girl Guides for 9 cents to 10 cents per unit. This represents a 200 per cent increase in the cost of delivering these bills.
Is the minister not aware of the tremendous cost burden that this will place on these municipalities at a time when all levels of government are reducing their assistance to municipalities?

December 7, 1981
Oral Questions
If he is aware, is he prepared to take some steps to correct this injustice?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Madam Speaker, the Canadian Post Office has always had exclusive responsibility for carrying the mails in Canada. When we considered the Canada Post Corporation Bill, this matter was discussed at length and all aspects were carefully examined. Examples such as the one just given by the hon. member were raised at the time and were discussed and dismissed. I should also like to remind the hon. member that this bill was passed unanimously by the House, all members present on both sides of this House approving the bill.


EFFECT ON SMALL COMMUNITIES
T.A. Bud Bradley: Madam Speaker, I could see a step being taken to force the municipalities to do so at the 17-cent level, which would not be such an immediate burden to them, but to enforce something which has not been enforced in the past and at the same time to increase the rate to 30 cents is something which is not acceptable and cannot be carried by these municipalities.
The proposal that large municipalities can pre-sort in excess of 5,000 bills and thus pay a reduced rate of 21 cents whereas small communities with less than 5,000 subscribers have to pay the full 30 cents, is somewhat puzzling. Surely they can sort 1,000 letters in small post offices as easily and as quickly as 5,000 in larger ones. Does the minister not feel that this is an act of further discrimination against small communities that do not have 5,000 subscribers, and will he take some steps to correct this?
[ Translation]


André Ouellet: Madam Speaker, I feel it is not a matter of cost but of principle as to whether or not carrying the mails is to be the exclusive privilege of the Canadian Post Office. And as soon as we make any exceptions to this rule, it is obvious that only profitable routes would be attractive to private businesses, so that in remote areas of Canada, mail services would have to be provided by the Canadian Post Office. Now, in order to guarantee and protect postal services in the smaller municipalities, we must keep our exclusive rights in cities where the volume is much larger, so that the Canadian Post Office may collect sufficient revenue in order to provide the same level of service in all parts of Canada.


THE BUDGET
Frederick William Wright: Madam Speaker, my question is for the Deputy Prime Minister and Minister of Finance. A number of unemployed coal miners from Cape Breton have been offered jobs in Fernie, B.C., to commence February, 1982. They accepted these jobs on condition they receive a housing subsidy, but this now becomes a taxable benefit under the minister's budget. The employer is concerned that many of these miners will now decide not to move. Can the minister tell the House whether he is planning any changes to his budget to encourage these miners to accept these jobs and thus gain employment?


Allan Joseph MacEachen: Madam Speaker, I thank the hon. member for drawing my attention to this particular case. When I have any announcements to make about any adjustments, I will be letting the House know.


Mr. Dick:: How soon?


THE DISABLED AND THE HANDICAPPED
Mr. Peter Lang (Kitchener):: Madam Speaker, my question is for the Prime Minister. An article in the Toronto Star this past weekend stated that in the near future a minister would be designated to co-ordinate the government's efforts and the government's response with regard to the report of the Special Committee on the Disabled and the Handicapped. Can the Prime Minister advise the House whether he is in a position to announce which minister will take the responsibility of coordinating the government's efforts in this regard?


Right Hon. P. E. Trudeau (Prime Minister):: Yes, Madam Speaker. I have asked the Secretary of State to study the excellent report of the committee presided over by the hon. member for Don Valley East. Various government departments now are seeking ways in which it can be implemented and the Secretary of State will ensure the co-ordination of that work. The Minister of Justice is also involved in the study of amendments which might be required to various statutes so as to try to make the disabled more equal members of society.


Some hon. Members:: Hear, hear!


INDUSTRY
Mr. Derek Blackburn (Brant):: Madam Speaker, my question is for the Minister of Finance. Given the fact that the city of Brantford is presently experiencing one of the most severe unemployment crises in Canada, with general unemployment soaring to 17 per cent and as high as 23 per cent in the manufacturing sector, can the minister, as the chairman of the cabinet committee on ILAP, tell the House if he is presently considering Brantford as a community for designation under the program? If Brantford is designated, could the minister ensure that the financial commitment is such that the community, so depressed by massive lay-offs in the agricultural implement sector and related industries, will benefit more in immediate job creation than the earlier ILAP grants to Windsor and Sept-Iles?


Allan Joseph MacEachen: Madam Speaker, I am aware of the situation that exists in the city of Brantford. I have had correspondence, and my staff, I believe, has had meetings with representatives of the city. I want to say that it is one of a number of communities which is presently under consideration for possible assistance under ILAP.


QUERY RESPECTING MEASURES TO CREATE JOBS
Derek Nigel Ernest Blackburn: Madam Speaker, my supplementary question is for the Minister of Employment and Immigration, but he is absent today. Therefore I will put my question to the Minister of Industry, Trade and Commerce. Can the minister tell the House what progress has been made as far as he is concerned in designating Brantford under ILAP? Also, what measures is the minister contemplating to create immediate jobs for the thousands of workers who are laid off in Brantford and whose unemployment insurance benefits have either run out or will run out in the next few weeks, thus adding tremendous financial strain and burden on those thousands of families in Brantford and district?


Hon. Herb Gray (Minister of Industry, Trade and Commerce):: Madam Speaker, as the Minister of Finance has said, the city of Brantford is one of a number of communities being actively considered for possible designation under the Industry and Labour Adjustment Program. With respect to the current situation in Brantford, I hope that my hon. friend and the community will recall the steps we took to help ensure the continuing operation of both White Farm and Massey-Fergu-son. Without the active intervention of the federal government in co-operation with the government of Ontario, both firms would not be there today to provide the employment they are providing and to provide a basis for a return to work as the American and other markets improve in the coming months.
With respect to the plight of those whose unemployment insurance is expiring, I am sure that the Minister of Employment and Immigration will soon be announcing the forthcom-
Oral Questions
ing winter segment of the Canada Community Development Program which will provide an opportunity for employees in communities such as Brantford to get short-term direct employment, and assist them to requalify for unemployment insurance. This is being done while the government is actively looking at the possibility of designating Brantford under the Industry and Labour Adjustment Program. The situation there and in other communities with similar difficulties is one we consider to be very serious, and we are looking at in a most serious fashion.


John Edward Broadbent: Would you repeat that answer?


CONSOLIDATED COMPUTER INC.-REQUEST FOR REFERRAL TO STANDING COMMITTEE
Paul Wyatt Dick: Madam Speaker, my question is addressed to the President of the Treasury Board. First, I have to compliment the Minister of Industry, Trade and Commerce for having recently announced the sale of Consolidated Computer, for a loss by the way of $91 million to the federal government. As the President of the Treasury Board is so concerned about the government loss of money that he is having an internal inquiry in his department, I ask him whether he will refer this matter to one of the standing committees so that we can have a public inquiry to find out why the government lost $91 million in this venture.


Hon. Donald J. Johnston (President of the Treasury Board):: Madam Speaker, this question is not unlike one I responded to last week posed by the hon. member for Mission-Port Moody. We would have no objection whatever to one of the standing committees looking into this matter. It seems to me it might be something which the Public Accounts Committee might want to take on. We have indicated also we would have no objection to making the results of our own investigation public. If that is of any interest to the Chairman of the Public Accounts Committee, the hon. member for Vancouver-Quadra, then the hon. member might direct the question to him.


MICROSYSTEMS INTERNATIONAL-REQUEST FOR REFERRAL
Paul Wyatt Dick: Madam Speaker, I have a supplementary question. In 1975 I requested the government to launch an inquiry into why it lost $38 million in Microsystems International. That was not done at the time. Since these are related industries in the computer field, I was wondering whether the President of the Treasury Board would refer that matter as well, because we do not want these things to continue, and maybe there could be some help and some direction given to the officials.


Donald James Johnston: Madam Speaker, hon. members will know that a great deal has happened in government since 1975 in terms of improved accountability, improved internal audit, and

December 7, 1981
Oral Questions
improved controls. Hon. members of this House I hope are interested in assuring that taxpayers receive value for their money. If there are any lessons to be learned from these past experiences we will be most grateful. That is why, as I said, we certainly have no objection whatsoever to the Public Accounts Committee on its own initiative looking into the CCI matter. The other matter can also be addressed by the Public Accounts Committee, I presume, but, as I say, since 1975 so many reforms have taken place I hope that kind of problem will not arise again.


THE BUDGET
Flora Isabel MacDonald: Madam Speaker, my question is directed to the Minister of Finance. I am concerned about the impact of the budget on older men and women who for many years have owned permanent cash value life insurance. Many find that they have insufficient income in their later years and they use the cash value of their policies to purchase annuities to supplement their retirement income. Because the budget proposes to increase the disposition cost retroactively, it would appear that older people will have to pay more tax and, therefore, will have less money available for their retirement income. Is it the minister's intention to decrease the retirement income of senior citizens, as the budget measure proposes and, if that is not his intention, what is it?


Allan Joseph MacEachen: Madam Speaker, to be brief, the answer to the first question is no, and to the second part of the question the answer is, to establish a greater sense of fairness in the tax system.


USE OF CARS FOR BUSINESS PURPOSES
Flora Isabel MacDonald: Madam Speaker, 80 per cent of these people who purchased these life insurance policies in the first place earned less than $30,000 a year, and are the ones who are going to suffer as a result of this measure.
My supplementary question to the minister concerns a phone call made by the Parliamentary Secretary to the Minister of Finance to one of my constituents on Friday afternoon. My constituent was told that the government is now discussing the budget measure which imposes a new tax on those who must use their cars almost exclusively for business purposes, and he was told "we will have to make provision for such people". Since I presume the parliamentary secretary was speaking on behalf of the government, I should like to know what provision the government is making for these employees, sales persons and others, who use their cars primarily as mobile offices.


Allan Joseph MacEachen: Madam Speaker, I find it surprising that a private telephone call between the parliamentary secretary and some unidentified citizen is now the basis of a question in the House of Commons. I will be glad to find out from the parliamentary secretary what was actually said, before I answer the hon. member's question.


EXTERNAL AFFAIRS
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, I have a question for the Secretary of State for External Affairs, who may be behind the curtains. If he is not coming in perhaps I could address my question in his absence to-


An hon. Member:: He is coming in.


Donald W. Munro: Madam Speaker, the Secretary of State for External Affairs, in reply to a question on Friday, indicated to me that Mr. Ivan Head, who was at the time the Prime Minister's foreign policy adviser, had been invited to speak before a group in Moscow at the Soviet Institute for U.S.A. and Canada, and that no other Canadian had been invited to attend that particular meeting. Will the minister indicate to me how it was that this invitation came to be extended to Mr. Head, and why it was that there were no other Canadians at the meeting?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, that was somewhat before my arrival on the scene. I will have to take that question as notice, and undertake to get an answer for the hon. member.


REQUEST FOR REPORT ON 1977 MEETING
Donald W. Munro: Madam Speaker, perhaps I might direct my supplementary question to the Prime Minister since he was in office at the time in 1977 when Ivan Head was the foreign policy adviser to the Prime Minister and spoke to the Soviet Institute for the U.S.A. and Canada in Moscow, without any other Canadians being there. Did the Prime Minister receive a report following that particular meeting, and what was the nature of that report, if he is prepared to let us have it?


Pierre Elliott Trudeau: Madam Speaker, I cannot recall, but it seems to me that this question period is reserved for urgent questions, and if this one goes back to 1977 I would think the proper way to ask it would be to place it on the Order Paper.
December 7, 1981


THE DISABLED AND THE HANDICAPPED
Mr. Jim Schroder (Guelph):: Madam Speaker, I was pleased to hear the Prime Minister's response that the Secretary of State is to be responsible with regard to disabled persons. Is the Minister of State in a position to advise the House of his plans to co-ordinate the government's response to the report of the Special Committee on the Disabled and the Handicapped?


Hon. Gerald Regan (Secretary of State):: Madam Speaker, basically the responsibilities I have been given are those of co-ordinating the responses of the various departments and agencies of the government to the recommendations contained in the "Obstacles" report. Each department will be responsible for its responses to the particular recommendations. I might say that my role is that of co-ordinator.
If I might be permitted, I should like to add that the Minister of National Health and Welfare is today speaking at the United Nations General Assembly debate on the International Year of Disabled Persons to report on Canada's progress in response to the needs of disabled persons in Canada.


MINES AND MINING
Douglas Keith Anguish: Madam Speaker, I would like to direct a question to the Minister of Energy, Mines and Resources regarding Eldorado Nuclear's announced shutdown of the Beaverlodge Mine at Uranium City. I hope the minister realizes that this will not only allow Eldorado Nuclear to throw 830 some odd people out of work, but will affect the contractors, as it were, in regard to that mine and mill operation, as well as the total community of 3,000 people who will be left without a source of livelihood. What consultation was there between Eldorado Nuclear and or the minister's department, the municipal corporation of Uranium City, the employees of the mill and the mine, and the union at Uranium City?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, concerns expressed by members of the NDP would carry a little bit more weight if, at their 1981 national convention, they had not passed a resolution which reads in part as follows, "that the NDP supports the phasing out of existing nuclear projects, including uranium mining".


Some hon. Members:: Oh, oh!


Marc Lalonde: I would hope that the NDP would be a little bit more consistent in its position.
As far as the question raised by the hon. member is concerned, as I indicated last week, indeed I was advised a few weeks ago of the intention of Eldorado Nuclear to close the
Oral Questions
mine as it is impossible to operate this mine in current circumstances because of the fact that the ore is diminishing.
As a matter of fact I refer the hon. member to the statement made to the Saskatchewan New Democratic Party energy minister who said, and I quote, "All mines eventually run out of ore and must close." This being said, we have taken extra steps to try to ensure that this closing will take place in the most humane and in the most accommodating way for the people concerned. All departments which have responsibilities in this area have been invited to co-operate, and we have received the assurance from the government of Saskatchewan of full co-operation in order to take care of this regrettable situation.


ATTENDANCE OF ELDORADO NUCLEAR OFFICIALS AT STANDING COMMITTEE MEETING
Douglas Keith Anguish: Madam Speaker, I don't know how the minister can make such a mockery of such a serious issue as closing down a community of 3,000 people.


Some hon. Members:: Oh, oh!


Douglas Keith Anguish: If the NDP were to close down a mine, we would certainly make sure that the people were taken care of first.


Some hon. Members:: Hear, hear!


Douglas Keith Anguish: I would like to know how the minister can justify the closing down of one operation in the nuclear cycle while another is intended to be subsidized in eastern Canada at hundreds of millions of dollars. I refer to the heavy water plants at Glace Bay and Port Hawkesbury. They are subsidized with hundreds of millions of dollars, with no foreseeable market for heavy water anywhere in the near future. I would like to know how the minister reconciles that.


Madam Speaker:: Order, please. Question please.


Douglas Keith Anguish: My question to the minister is: will he assure us that the officials of Eldorado Nuclear will be at the meeting tonight of the Standing Committee on National Resources and Public Works to answer questions that we have in regard to this serious problem?


Marc Lalonde: Madam Speaker, the mockery to the people of Canada is the kind of resolution that has been passed by the New Democratic Party convention in 1981. The mockery is for the hon. member to stand up in the house and take positions which are in full contradiction to the position of his own party across the country.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!

December 7, 1981
Oral Questions


Marc Lalonde: In response to the question raised by the hon. member, I invite him to read Hansard once in a while. I was in the House last week and I indicated that the officials of Eldorado Nuclear would indeed be before the committee tonight, if my hon. friend has any questions to ask.


THE CONSTITUTION
Charles Joseph Clark: Madam Speaker, my question is for the Prime Minister. The Prime Minister will know that over the weekend, and after the passage of the resolution in the House of Commons, the Minister of Justice said-and I believe I am quoting him correctly-the government was "still open to discuss" the final compensation issue. He also gave as his view that if the agreement of the province of Quebec could be secured to that matter, the agreement of the other nine provinces would be relatively easy.
Could the Prime Minister tell us, first of all, whether the Minister of Justice was stating a policy of the government in his responses, and second, whether there is any initiative which the federal government is considering to take now to bring the people of Quebec into the constitutional Accord before the constitutional resolution leaves Canada in the next few days?


Pierre Elliott Trudeau: Madam Speaker, the answer to the last question is no, we are not taking any positive initiative now. The government has said, and the Minister of Justice and I have said, that the Constitution will still be amendable once it is in Canada. If there are reasonable solutions to problems which Quebec sees, we will discuss them in Canada among Canadians, as the Right Hon. Leader of the Opposition always said we should be doing. That is our position at this stage.
I think even the Leader of the Opposition was convinced last week that Mr. Levesque would not sign anything with Canada. The Leader of the Opposition offered him a compromise on compensation, and another on language, I believe. The Leader of the Opposition, in his speech, said that he would really ask these questions of Mr. Levesque-and I may be paraphrasing-to see whether Mr. Levesque really believed in Canada or not. As the Leader of the Opposition knows, he got a negative answer from Mr. Levesque on those proposals that he made.
It seems to me that we cannot now hold off the patriation of the Constitution and the intention of Canada to have an amending formula which will permit us to continue discussions between provinces, hopefully including Quebec.


THE DISABLED AND THE HANDICAPPED
Hon. W. G. Dinsdale (Brandon-Souris):: Madam Speaker, I have a supplementary question for the Secretary of State. May
1	congratulate him on assuming his new responsibilities for the disabled. It is an action that we on this side have been recommending for the past ten years. I would like to ask the Secretary of State, as my first question to him, what action is he contemplating on the two basic recommendations, at least the last of the two basic recommendations that our Special Committee on the Disabled made in respect to action which must be taken during the International Year of Disabled Persons if we are to establish credibility?
Because of the long delay in government action on behalf of the disabled, we suggested that Parliament Hill become completely accessible during the International Year of Disabled Persons. That has been accomplished. Prior to that, the disabled came through the garbage entrance.
Even more fundamental is the second recommendation that the disabled must be brought under the terms of reference of the Canadian Human Rights Code during the International Year of Disabled Persons. We have just three weeks to go. Will he be able to act upon that vitally important recommendation of the committee, which action is necessary if our credibility is to be maintained?


Gerald Augustine Regan: Madam Speaker, I thank the hon. member for his question. I would like to pay tribute to him for his long-term and very sincere interest in this very difficult question.


Some hon. Members:: Hear, hear!


Gerald Augustine Regan: At the same time may I acknowledge the extremely valuable work that has been provided by the hon. member for Don Valley East as chairman of the committee, and his continuing interest in this field.


Some hon. Members:: Hear, hear!


Gerald Augustine Regan: I hope that both of these hon. members, and others, will be available to assist me in relation to the responsibility of co-ordinating responses to the recommendations. The hon. member is probably aware of the fact that the government has already acted upon 56 of the recommendations in the report. My officials are working on this issue, and I expect to be able to file a report on the government's achievements with regard to phase 1 of the recommendations before the Christmas recess.
I have recently undertaken the task of co-ordinating phases
2	and 3, and will be reporting in due course to the House with reference to those. I hope that the information which the hon. member has asked for will be well covered in the report that I will table before the Christmas recess.
December 7, 1981


REQUEST FOR INTRODUCTION OF LEGISLATION
Walter Gilbert Dinsdale: I thank the hon. minister for his response and point out that the 56 recommendations that have been accepted are really the easy ones, and the one important recommendation now is to assure human rights to the disabled community before the year is ended. The reputation of our committee is dependent upon that. It was a most special committee, indeed. All seven members from all parties buried the partisan hatchet in the interest of the disabled during their international year.
Will the minister assure the House now that that legislation will be on the Order Paper, and perhaps he could work out an agreement to have passage of that legislation with minimal debate before the end of the International Year of Disabled Persons?


Gerald Augustine Regan: Madam Speaker, the hon. member may be aware of the fact that the Minister of Justice is studying the application of the particular recommendation and measure which he has mentioned. I will undertake to obtain more information on its present status from the Minister of Justice.
May I also say to him with reference to his remarks that some of the measures which have already been undertaken may be those that were the easiest for the government to respond to, I think that is the case with some of them. Obviously, there should be quick responses in those circumstances. In others, I think there were considerable difficulties which were overcome and that substantial progress has been made. Despite the hon. member's understandable zeal, he will realize that some of the recommendations which require physical alterations, and some which require changes in law and the expenditure of substantial amounts of money, will obviously take longer to meet than the easier ones. However, we are committed to moving forward very rapidly to meet all of these recommendations.


ROYAL CANADIAN MOUNTED POLICE
Mr. Maurice Harquail (Restigouche):: Madam Speaker, my question is for the Solicitor General. It has to do with the new federal-provincial agreement on RCMP services. I suspect it is an appropriate question today. Can the minister indicate to the House how the negotiations are progressing, especially with regard to services in New Brunswick?


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, 1 am glad to inform all hon. members that the RCMP contracts have been agreed to in principle by all of the provinces and territories which have been utilizing these services. A contract is being drafted. It has been signed by a number of provinces. A number of others are waiting only for drafting and a proper
Petitions
occasion at which both parties can meet and sign it. As to the particular question, I went to New Brunswick on Friday under the impression that there were some outstanding matters between the parties. I am glad to report there are none. The agreement is being drafted now and may well be signed before Wednesday.



ROUTINE PROCEEDINGS


[Stage Direction]
Fourth report of the Special Committee on the Disabled and the Handicapped, in both official languages-Mr. Smith.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Charles Henry (Chuck) Cook: Madam Speaker, as is my duty as a member of this House, I wish to present a petition on behalf of the employees of Woodward's Stores Limited of Vancouver, British Columbia. The purpose of this petition, signed by 1,420 employees of the downtown Vancouver store, is to indicate to the government that the highly regressive measures introduced in last month's budget will increase their cost of living as employee productivity and retirement benefits will now be subject to taxation.
The nature of this petition is to demand that the government reconsider these punitive tax measures in order to restore the morale of all Canadians, to maintain the concept of rewards and incentives for employee productivity and to ensure that the members of Canada's work force are not rendered wards of the state.
The petitioners hope, Madam Speaker, that in your examination of their petition you will find the petition in order, sense the urgency and desperation of their plea and that you might use the discretionary power vested in your office to allow discussion and referral to committee at the earliest possible moment.
If I can bootleg one line, the Minister of Finance (Mr. MacEachen) suggested that I was causing concern among retail clerks. That is not true. This petition demonstrates that.


Madam Speaker:: Order. That does not come under petitions.
13776

December 7, 1981
Time Allocation


BUSINESS OF THE HOUSE
Marc Lalonde: That, in relation to Bill C-48, an act to regulate oil and gas interests in Canada lands and to amend the Oil and Gas Production and Conservation Act, one additional sitting day shall be allotted to the consideration of the third reading stage of the bill; and that 15 minutes before the expiry of the time provided for government business on that day, any proceedings before the House shall be interrupted, if required, for the purpose of this order and, in turn, every question then necessary in order to dispose of the said stage of the bill shall be put forthwith and successively, without further debate or amendment.
He said: Madam Speaker, I have just presented a notice of motion concerning Bill C-48. This bill has been before the House for a whole year and I think that the situation could not be summarized more aptly than it was on December 11, 1980, almost a year ago today, by the hon. member for Etobicoke Centre (Mr. Wilson) who was the opposition energy critic at the time, in a statement he made regarding the tabling of this bill, and I shall quote Mr. Wilson in English:

This delay is shocking, Mr. Speaker. It is irresponsible to expect companies to operate in an environment when they have no idea what the ground rules will be ...
This delay, going back to 1970, has cost Canada valuable years in reaching oil self-sufficiency. It is important that we get on with the job now.
That is what he said on December 11, 1980.
[ Translation]
Madam Speaker, 1 must say the hon. member for Etobicoke Centre has never spoken wiser words. In fact, I have never objected to having any bills, and especially Bill C-48, being given detailed and attentive consideration by the members of this House. I have even encouraged such consideration and debate during the past year. Today, however, it seems to me that most if not all members of the House have had a chance to expound on this subject. According to our calculations, 235 members have spoken to this bill at various stages. For six months, the Committee on National Resources and Public Words held public hearings and considered amendments to the bill. We heard 140 witnesses during over 70 committee meetings which totalled over 130 hours. Hundreds of amendments to this bill were proposed and the government accepted about one hundred.
For the sake of comparison, Madam Speaker, I would like to remind the House that this bill has been discussed twice as long as the Foreign Investment Review bill and three times as long as the Bank Act bill. I feel that this gives us a good indication of the extent to which this very important bill has been considered by Parliament, and that, as the member for Etobicoke Centre on the opposite side said so eloquently, it is extremely important to proceed with its adoption. The Committee on National Resources and Public Works tabled its
report in July. We started debate on the bill in July, and when the session resumed this fall, Bill C-48 was practically the only legislation for consideration before the House until the debate on the Constitution. In fact, we debated and voted on fifty-seven motions proposed by the government and the opposition, motions that had already been considered in committee.
Madam Speaker, granted, there is a time for consideration, reflection and study, but there is also a time for making decisions. Parliament is not exclusively engaged in contemplation. Furthermore, Parliament should not be prevented from deciding on the bills that are before it. There comes a time when decisions must be made. Parliament must decide on matters that are of primary importance to Canada. Bill C-48 is one of the main parts of the government's energy policy and the program for Canadianization of the oil industry in Canada. It must be obvious to everyone that we must decide now what is to happen in this respect. I feel that one year to consider a bill should be ample to allow all members of the House to make their positions known and to vote knowledgeably on this bill.
Therefore, I hope, Madam Speaker, that all members will agree that the House proceed without delay to adopt the bill on third reading, a bill that has received every necessary and reasonable consideration. I should like to point out that the government has been extremely patient and has shown every consideration for the wishes expressed by the opposition, both at the committee stage and during consideration of the bill in the House. I hope the members of this House will agree to proceed without delay to pass the bill on third reading.


Hon. Erik Nielsen (Yukon):: I find it strange, Mr. Speaker, that this motion would be moved at a time when I am only half way through my speech with regard to the bill. I am not suggesting for a moment that the minister had anything personal in moving the motion at this stage, although I will say when he speaks of bringing the matter on, speaks of the length of the debate on the bill, that if the government had not been so singularly obsessed, in almost a paranoid fashion, with the constitutional debate and their eagerness to pass that resolution, we would have accomplished a good deal more in the House of Commons in connection with the economic ills of the country.


Some hon. Members:: Hear, hear!


Erik Nielsen: The minister belittles the stature of Bill C-48 as a bill, although he has admitted that it is one of the major components of a national energy policy. We have seen only the tip of the national energy policy, of which this bill is a part.
Closure in any form is a most reprehensible course of action for any government to take.


Some hon. Members:: Hear, hear!
December 7, 1981


Erik Nielsen: What it is doing is muzzling the opposition. What it would like to do, of course, since the Prime Minister (Mr. Trudeau) has described us all as nuisances-forty feet off the Hill we are nobodies-is to get rid of the opposition entirely. We are mere nuisances over here. To heck with any debate on subjects as important as Bill C-48. If the truth were known, the government would like to introduce this kind of measure on every single piece of legislation introduced to the House, notwithstanding our record of co-operativeness.


Some hon. Members:: Oh, oh!


Mr. Smith:: Whose record?


Erik Nielsen: I was waiting for the jeers and the laughter from the government side. If they had done their homework, they would find that since this Parliament began we have come to agreement with them on 33 occasions with regard to dozens of pieces of legislation.


An hon. Member:: Wonderful!


Erik Nielsen: If they want, I can state them all for the record. How many times have these hon. members over there imposed closure? They take the cake. They would like to walk off with Parliament entirely; but they take the cake, the prize for imposing closure. In this session of Parliament they have invoked closure no less than eight times.


Some hon. Members:: Shame.


Erik Nielsen: That is an historical record. Never before in the history of the Canadian Parliament has any government muzzled the opposition on eight separate occasions.


An hon. Member:: It is a reflection on the opposition.


Erik Nielsen: They have done this twice by pure closure and six times by Standing Order 75c. That is a most shameful record. Rather than adopting this course, this arrogant government, instead of whining that we are speaking too much, should be adopting the open mind and attitude of obtaining suggestions from knowledgeable people, such as the hon. member for Calgary South (Mr. Thomson) and the hon. member for Calgary Centre (Mr. Andre), who know the oil and gas industry, I might add, a good deal better than the minister and his supporters on the other side.
That is why debate is important and why these members should not be muzzled by closure. It is not a question of the nature of the measure before us; it is a stigma that the government will not be rid of because of their propensity and obsession, every time they do not get their own way, for imposing closure. "We have heard enough", they say. "You have spoken enough; we do not want to hear you any more; now shut up." That is exactly what closure means. This government stands indicted for imposing closure more times on an opposition than any other in the history of the Parliament of Canada. They should be ashamed of that.


An hon. Member:: They have no shame.
Time Allocation


Erik Nielsen: They have no shame is exactly right. They are too damned thick-skinned, arrogant and uncaring to have any shame about them.


Some hon. Members:: Hear, hear!


Ian Deans: For a number of reasons we shall oppose the government's motion of closure. The problem in the House has to do with the way the members are not made aware of the program that the government intends to proceed with during the course of any one session.
There are some serious problems that go to the very root of the government's intention to use closure time after time. I suggested some months ago during a discussion similar to this that there were other ways to order the business and affairs of the House that would allow all of the members to be involved. I suggest again that that would be one of the more constructive approaches that we might take to avoid the need to use closure under Standing Order 75c on an occasion such as this.
We are asked to make a decision that enough has been said about a very important piece of legislation. It is not for me to decide, nor is it really for the government to decide, whether enough has been said, whether all that should be said has been said and every opportunity has been given to members so as to influence the course of affairs of the country in a constructive, sensitive and sensible way. While it may be possible for me from time to time to think that enough has been said on any one topic, I suggest that that does not necessarily mean that it is the considered judgment of the vast majority of the members of the House that that is true. There are times when topics are raised in the House that I frankly think, after the first speaker has spoken, that we have heard enough; but that does not mean that in truth that is the case.
I should like to suggest that once one starts to use closure- and I think this is where the hon. member for Yukon (Mr. Nielsen) is quite correct-with each attempt, with each usage, it becomes easier. Therefore, the test of whether or not every opportunity has been afforded all members to express their genuine concern on behalf of the people they represent becomes a test that, in essence, is not really applied equally or fairly in every instance.
I should like to suggest to the government one thing they might consider to avoid this kind of confrontation arising time after time. I believe at the beginning of every session members of the government, such as the House leader and perhaps others within that group who manage the affairs of the government for the House, should get together with the representatives of the official opposition and the NDP. Then they should sit down at the beginning of the session and go over the program for the particular session that the government anticipates it would like to see proceeded with and completed. We might then together prioritize that program in order to have our input in what areas we believe will be very controversial and how those areas can be best handled both in terms of the time allocated in the House and the time allocated in committee to deal with such matters.

December 7, 1981
Time Allocation
This is not intended in any way to inhibit the government's right to proceed with other matters which from time to time arise. But it allows us to look in the over all at all matters to be considered by government, within reason, and then to make a determination as to which of those matters are likely to evoke the most debate, which of those matters are likely to create the greatest uproar, and which of these matters are likely to take the longest period of time. Then we could, together with the government, make an effort to establish an order which would allow the government to proceed with all its business. At the same time it would allow the opposition to review adequately in the House, in committee and if need be back in the House, as was the case with this particular piece of legislation, all ramifications of the legislation. If we are ever to get to that point, the need to use closure would be so infrequent that we would not likely see Standing Order 75c used at all for the balance of this Parliament.
I put to those who manage business for the government that it is not nearly good enough to manage business on the basis of one week to the next. One cannot expect people to deal adequately with the legislative program of the government unless they are aware of what it is. One cannot deal with legislation if one is given notice of the intent to have the matter debated in the House and referred on Thursday for the following Monday discussion. In dealing with such matters in the Ontario legislature during minority government, it has been my experience that we were well able to look at the government's over-all program, to come to grips with those matters which were of vital importance to the majority of members and to put them into an order which enabled us to establish a time-frame within which they could be dealt. To the best of my recollection, we never had to use closure during the five years that I was House leader of the official opposition and of the third party during the time of minority government in Ontario.
We will not support this motion because it is a further slide down the slippery slope. I do not want to go any farther down it. I think we have seen enough closure in the House. Now we want to see co-operation and orderly dealing with the business of the House. The only way it can be done is if the government takes the opposition into its confidence in terms of what it proposes to consider over the course of a session and together we establish a way in which those matters can be dealt with adequately by everyone and proceeded with through the House and committees to achieve the ultimate result of passage.


Mr. Roy MacLaren (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, the motion before us relates to Bill C-48 which the House has been considering for almost a year. During that period, the draft legislation has been subjected to most careful and detailed scrutiny which has surpassed that given to most legislation before the House. The complexity of the bill and the magnitude of the task that the legislation must accomplish requires no less than the careful scrutiny the bill received.
Over a six-month period, the bill was before the Standing Committee on National Resources and Public Works. At more than 70 meetings of that committee, hon. members heard testimony from officials and received deputations and representations from a variety of Canadians from the Arctic, from sub-Arctic areas and from the Atlantic and Pacific regions-in fact from all Canadians who have a real interest in the development of petroleum resources in the Canada lands. In all, 140 witnesses appeared before the committee to give their views on the bill. Some of their suggestions, when incorporated with those presented by hon. members of the opposition, assisted the government in putting forward some 100 amendments for the draft legislation. Since the adoption of the amendments, another 57 amendments have been brought forward in the House, most of which simply repeated suggestions put forward in committee. We have allowed every opportunity for a fair and full debate. Perhaps we have even been overly flexible with respect to the length of debate on Bill C-48. Indeed, there were some 235 major interventions on the bill during the course of consideration in the committee and in the House. The bill has, in fact, been before us for a period longer than the constitutional resolution. There comes a time when the House must make its decision. That time has now arrived. We on this side of the House assume responsibility for taking that decision.
The hon. member for Yukon (Mr. Nielsen) spoke against time allocation on Bill C-48, but he knows as well as I the reasons why such allocation has now become necessary. It is the obstruction on the part of hon. members of the opposition which has delayed the passage of this important legislation.


Ian Deans: Not us.


Roy MacLaren: The hon. member for Hamilton Mountain (Mr. Deans) denies obstruction. But I remind him that colleagues in his party made clear their purposes in committee. For example, on October 19 the hon. member for Comox-Powell River (Mr. Skelly), when referring to members of the New Democratic Party, said:
We had to resort to a filibuster and to delaying tactics. This was hard on everyone, including government members who had to sit and listen.
Hon. members opposite said that it was necessary because we would not listen.


Ian Deans: That is correct.


Roy MacLaren: The fact is that we did listen. Hon. members opposite know that perfectly well. The wide range of amendments which the government brought forward and were adopted at committee stage amended the legislation in such a way as to take into account the valid proposals of hon. members, particularly concerning the rights of native peoples and the fragile environment encountered in the frontier lands, whether offshore or in the Arctic.
Clearly unanimous approval of every aspect of Bill C-48 was not to be expected, but there is no question that the legislation is long overdue. For years we have operated under anachronistic legislation which would have been improved at an earlier
December 7, 1981

stage by Bill C-20, but that bill died at a time when a general election was called.
I have no disagreement with the hon. member for Etobicoke Centre (Mr. Wilson) who, almost a year ago today, made the following statement:
The broad objectives of this legislation are worthwhile and certainly acceptable. One might go so far as to say that they are motherhood; they are intended to increase production and Canadian ownership, as well as to provide a very stable tax environment. I agree with the minister when he says that it is important to have this legislation.
I agree with that, Mr. Speaker. It is basically for this reason that we have brought forward a motion for time allocation at this stage. After all, if hon. members opposite and the energy spokesman for the official opposition consider that the bill is important and even that it is a "motherhood" issue, it would clearly be wrong to continue the prolonged obstruction that it has encountered.
This bill has been brought forward against a background of significant progress in the implementation of the National Energy Program. During the past year major agreements have been reached with the governments of Alberta, British Columbia and Saskatchewan. At the moment we are engaged in serious discussion with the governments of Newfoundland, Nova Scotia and British Columbia with regard to offshore resources.
An attractive price regime has now been established. That is one incentive for the more rapid development of the petroleum resources in the frontier lands which, when taken in conjunction with the petroleum incentive program, will ensure that Canada achieves oil self-sufficiency to match our self-sufficiency in other energy forms.
Against this background, I cannot understand how the official opposition can justify their continued obstruction of a bill which will ensure, among other things, greater Canadian participation in the Canada lands. For many years, we on this side and some members of the New Democratic Party have urged that legislation be put in place to ensure that Canadians have a greater opportunity to participate in the development of their own petroleum resources. This bill contributes to that objective, Mr. Speaker. When coupled with other aspects of the National Energy Program, it will ensure that, for the first time, Canadians have a real opportunity to participate in their own petroleum development.
That policy has the broad support of the Canadian people, Mr. Speaker. A recent survey conducted by the Canadian Petroleum Association showed that 84 per cent of the people surveyed support the thrust of the legislation now before us. Not only does the great majority of the public support such a policy, but so does the government of Alberta which has undertaken to offer petroleum incentives which, among other things, will enhance the Canadianization of our petroleum industry. So also does the government of Saskatchewan. So does the government of Ontario also for example, supports this Canadianization, as we have seen from its recent acquisition
Time Allocation
which will involve it to a greater degree in the Canadian petroleum industry.
We cannot sit and listen indefinitely, Mr. Speaker. It is time for Parliament to act; it is time for the government to act.


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member's time has expired.


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, the hypocrisy of the parliamentary secretary never fails to amaze me. He can stand up and spout things that I know he does not believe. He can take the most outrageous misinterpretations of statements made by members of this party and put them forward as fact. I must say that he serves the right minister in terms of the fidelity with which he treats facts and presents them to the House.
The parliamentary secretary said that my colleague, the hon. member for Etobicoke Centre (Mr. Wilson), had indicated that it is about time this bill came forward because we have been waiting ten years for it. I should like to set the record straight, Mr. Speaker. Ten years is approximately right; in fact, it is 11 years. In April, 1970, the then minister of energy in the Liberal government said that the government was withdrawing the rules and regulations for Canada lands in order to replace them soon with better rules and regulations. "Soon" was seven years! In 1977 the government brought forward a set of regulations which were not good, but were not bad. As a result of what they brought forward then there was a spurt of activity in the north. Then came the National Energy Program which brought to a halt much that was being accomplished and that we had expected would continue in the north.
The parliamentary secretary said that great progress had been made as a result of the National Energy Program. He pointed to the agreements made with the provinces as examples of progress. As a result of those agreements, however, the federal government abandoned its crude oil pricing schedule for domestic crude, it abandoned the export tax on natural gas and it abandoned the proposal to treat old oil and new oil in the same way. What he calls the great progress in the National Energy Program was really backtracking from some of the more absurd proposals that were brought in in the first place. That is what the government defines as progress, Mr. Speaker.
Judging from statements he made at the Liberal Party convention in Toronto a couple of weeks ago, I know that the parliamentary secretary will join with me in hoping that we see progress in the budget very soon because there is a need for more backtracking there as well.
The parliamentary secretary says that we should be pleased with the national energy policy and what it is achieving. I have before me the latest issue of Oilweek magazine which quotes the minister as saying, "I wish to refer hon. members to the figures published in Oilweek magazine". So the minister uses figures from this publication. A chart in the magazine shows that on November 18, 1981, there were 281 rigs drilling, while on November 18, 1980, there were 446 rigs drilling. Is that progress, Mr. Speaker? In one year half of the drilling capacity in the country has been wiped out. The parliamentary

December 7, 1981
Time Allocation
secretary seems to think that is progress. A little more progress like that and there will be no rigs drilling at all, Mr. Speaker. That will be just marvellous progress!
There is no question that this bill has been before us for a long time, Mr. Speaker, but we have not been dealing with it exclusively for a full year. I can recall taking a few months off last summer and talking about the Constitution and the budget. Other subjects were raised during the year that interfered with the debate on Bill C-48 as well.
It has taken so long to go through the House because it is a bad, bad bill. It is one of the worst bills ever brought forward by any government. It establishes a precedent for the democratic free world. I have researched this subject, Mr. Speaker, and it appears that this is the first time in any democracy that a government proposes to confiscate private property without compensation. It is the first time any democratic government in any democratic free nation has presented this kind of legislation. That is an incredible precedent, Mr. Speaker, and a year is not nearly long enough to discuss the bill fully.
Perhaps the parliamentary secretary should go over to the Senate and listen to the discussion on the bill there. He claims that everything that needs to be said has been said, but if he were following the proceedings before the Senate Committee on Banking, Trade and Commerce he would realize that a lot more needs to be said.
Far from being perfect or even getting a passing grade, this bill is a bad piece of legislation. We would do Canada a service if we were to toss it out. If we were really interested in Canada and not in the political reputation of the Minister of Energy, Mines and Resources (Mr. Lalonde), that is what we would do. If we were dealing with something other than political pride, then hon. members opposite would join us in throwing this bill out, throwing it back to the bowels of the civil service where it came from, because it is an atrocious piece of legislation. I would certainly identify with the problems which were alluded to by the House leader for the New Democratic Party concerning the way this House functions, the necessity to co-operate, and so on.
It is frustrating in the extreme, to go before a committee, to debate in the House, to discuss in Committee of the Whole or whatever procedure, bills of such tremendous importance as this bill and, whether sitting around the committee table or in the House, be faced by a bunch of members who know that their only purpose and reason for being there is to say "aye" when the minister orders it. Independent thinking is intolerable to the backbenchers or frontbenchers of the Liberal Party. They do not tolerate independent thinking. Therefore, I can perhaps understand some of their frustration and the reason they applaud bringing in closure today. It is because they have been sitting there for a year, with different characters coming in and participating in different stages, but they have not been allowed to have a single independent thought, and they have not been allowed to examine the legislation from any other point of view. They must always say, "Is this not wonderful?
The minister is such a brilliant man! This Liberal government is so sensational!" Their sole role is to say, "Aye, sir, aye", when ordered to do so. They are never allowed to think. If they dare think, they will be back there behind the curtains forever. Their chances of going on a trip? Zip! Their chances of becoming parliamentary secretaries? Zip! Their chances of getting any of these nice perks are shot if they ever dare think. Therefore, "For goodness sakes, do not think!" is the cardinal rule of the Liberal backbencher. They must say, "Aye, aye, aye!"
If they were thinking, and I assume that some of them have the capacity of doing so from time to time, they would have listened to some of the things said. Yes, they might have heard some things being said by the industry, which many of them hate. However, they would have listened. Perhaps, if they did not like what the industry had to say, they would have listened to what the legislative council in the Northwest Territories and the legislative council of the Yukon Territories had to say. They would have heard their concerns. They would have heard their feelings of exasperation at being treated as a bunch of colonials by this bill.
What this bill does for the Northwest Territories and Yukon is the same thing that the Dutch East India Company did to India. The government established Petro-Canada as a kind of governor of this enormous territory. This benevolent Crown corporation will now have more to do with the development of the Northwest Territories and the Yukon than the democratically elected legislatures of those two territories. It is colonialism of the worst sort.
If hon. members opposite had the capability to think, they would have thought a little bit about what those people were saying. They would have thought about what those democratically elected legislators were saying. Hon. members would have said, "Maybe we should not be so rash in the manner in which we put forward this legislation".
This situation is really sad. I think that this House would do itself a service by devoting several days of debate and discussion to the quality of the democracy that exists and to the nature and way this place operates. The reality is that much of what we do is basically fraudulent. Hon. members opposite, and particularly backbenchers of the government party, sit in committee and participate in debate, claiming they are speaking as individual MPs. However, in fact they are automatons, robots who say, "Aye, sir, aye", and nothing more.
We call this a democratic Parliament, a parliamentary system which has its tradition; but in a sense we are deceiving the people of Canada if we claim that Parliament, in fact, functions as it should. It does not. Whatever comes out of the bowels of the bureaucracy, rubber-stamped by the cabinet, becomes holy writ.
[ Translation]


Mr. Andre Maltais (Manicouagan):: Mr. Speaker, initially I did not intend to take part in the debate on the motion of closure presented by the Minister of Energy, Mines and Resources (Mr. Lalonde), but considering that the debate on
December 7, 1981

the bill has been going on for more than a year, I feel it should be made clear to the members of the opposition that the line has to be drawn somewhere. Personally, I would be the first to protest any attempt to gag the House whenever a bill is at all controversial, if the time allotted to consider the bill was not sufficient. However, Bill C-48 was tabled in the House more than a year ago, and I feel that anyone who wants to extend the debate is clearly showing signs of bad faith.
Earlier, I was listening to the member for York-Peel (Mr. Stevens) speak to this bill, when he asked to extend the debate again for a few days, so that certain improvements could be made. The surprising thing is that during the ten minutes he spent talking, the hon. member made no new proposals aside from criticizing the measure of closure. In my view, if the hon. member had any desire to be effective, he would have used his ten minutes to suggest at least a few improvements, if he is so convinced there is room for any. One of the important elements that has been added to the bill during the past year, Mr. Speaker, concerns future discussions with native peoples because Bill C-48 is not placing any restrictions on the debate on land titles or rights that apply directly to native peoples throughout Canada. I believe that just now the member for York-Peel could usefully have proposed some concrete elements, in discussing native peoples and the environment.
In fact, Bill C-48 is intended to provide a framework for the implementation of new legislative provisions that are to govern the development of both gas and oil resources. This bill will help us exercise more government control over resources that belong to all Canadians. Of course this bill could be debated for ages. We could even add or delete a few commas! But let us at least give this bill a chance to be enacted. Later, if necessary, it could be tabled again in Parliament, when amendments could be proposed. Mr. Speaker, in debates like this one it is hard to understand why, instead of pressing on, instead of wanting to pass legislation, the opposition seems to be literally obstructing the parliamentary process and democracy. For one whole year, the opposition has had an opportunity to make its position clear, as have the members on the government side, and whatever the member for York-Peel may have said in this regard just now, he is very little concerned with the backbenchers of his own party or those on the government side. Members who were genuinely interested in the subject have all had an opportunity to speak to this bill, and to discuss it in committee.
So, anyone who says that we are blindly accepting measures presented directly by cabinet is ignoring the critical faculties of the members on all sides of this House. To the members opposite and to the members of my own party I can say that I have personally taken part in a number of discussions on native rights to ensure that the rights of these first owners of this country are not neglected by legislation that is of course creating a framework for the development of natural resources. The bill says clearly that in future, native peoples
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could claim any royalties to which they would be entitled. In no way does the bill affect native rights. It simply confirms the right of Parliament to continue to negotiate with the native people those provisions which could bring them revenue and also confirms their ownership of these lands for the years to come. It is important to note this. Another aspect of Bill C-48 which might be mentioned is the environmental aspect. In my opinion, some worthwhile provisions contained in this bill will guarantee the harmonious development of oil and gas resources and ensure that we shall have no cause to regret in the future whatever action is taken under this bill.
Mr. Speaker, I would not want to be guilty myself of what I deplore and talk about nothing, but I really want the opposition to understand, as we do on this side of the House, that some decision must be made after one year of debate on this issue. Something which many people deplore about the government is that we do not often have the courage to draw the line, even though imperfectly. Obviously, if I were to go over this bill, I might want to make some very personal changes and add my own personal touch to it. However, on the whole, I am satisfied. The bill provides guarantees which I am very happy to accept. We should at least give this bill a chance to see the light of day and quit dragging on about matters which have been debated according to the rules of democracy. In view of what was said in committee and all the representations made to the minister and to the standing committee of the House, no one can say that the process of democracy has not been respected.
I understand that some members may not be happy about this bill and that some people would have preferred another formula to ensure the development of Canadian oil and gas resources, but the fact is that the government is responsible for the decisions to be made in this regard. I believe that only the people may show their appreciation or disapproval of such a bill when they go to the polls every four years. It is important for the opposition to be heard and to express its views, but afterwards, we have to vote. As a last resort, the opposition will be able to revert to this issue in the next election, and if the people really condemn the government party at that time, they will obviously show it. Until then, the opposition should respect those that the majority of Canadians have elected to act on their behalf. This is important. We often have the impression that some people are trying to play a role or to speak on behalf of other people because they are convinced that only they can speak the truth.
Under a democratic system, the government is allowed to govern and the opposition to act in character, of course, and even to oppose measures, while abiding by the rules of the game, and making sure as well that no time is wasted. Considering the present economic problems in this country, I think it would be rather irresponsible for the opposition to ask for additional time in order to repeat over again same things that

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have been said for quite some time in the House and in committee on that bill.
Mr. Speaker, since my time is almost up, I merely want to say to the parties opposite that I would be the first, along with others in the House to object to being gagged if all the time required to discuss this bill had not been allotted, but since a year has elapsed since the bill was introduced, I think that every democratic rule has been complied with and that it is rather unfortunate that we have to resort to the gag, because we would like to proceed with the co-operation of the parties opposite.


Mr. Jim Hawkes (Calgary West):: Mr. Speaker, I stand today with a sense of outrage. Today was the first time in over a year that I have put on my parliamentary button. I took it off the night after the brief debate when Liberal members opposite moved closure on the Constitution of Canada. Liberal members stood in this House and voted for closure after a short debate. This morning I decided that possibly the Parliament of Canada could work. I put on my button, and at my first opportunity to speak in this house I again face closure.
I would like to remind hon. members of the Liberal Party of Canada that they may have a tendency to blame the cabinet and the government, but their fund raisers, volunteers and votes in this House of Commons have sustained the government. Never in the history of this country have there been so many closure motions faced by a Parliament. Eight times members of this cabinet have moved closure in this House during this Parliament. I remind hon. members opposite that very shortly after the introduction of the constitutional resolution, closure was moved. A cabinet cannot do this. A cabinet cannot deny Canadians the freedom of speech which this House represents unless that cabinet is sustained by its backbenchers. I say to hon. members opposite that they must examine their consciences on each and every occasion a cabinet minister says that it is a good idea to move closure. Hon. members opposite must weigh the pros and cons to see whether or not they are culpable and part of a system which is gradually eroding democracy piece by piece in this country. Hon. members opposite must accept responsibility for that. I suggest to Liberal voters in Quebec, Nova Scotia, Newfoundland or wherever they are found that they must begin to judge members by the contributions they make to informed discussion and to democracy in this House.
It is our responsibility, and I will encourage our candidates in the ridings, to make voters aware of how often members opposite have stood in this House and voted for closure. There is nothing in terms of the long-term impact on the functioning of the Parliament of Canada that is as damaging as this record of closure.
The parliamentary secretary stood earlier in this House and talked about obstructionism. I put a different word on debate in this house. If we have a government that values this House,
then we should all learn from each other. We come from various parts of Canada. This is a forum. We come from Newfoundland, Vancouver Island and the Northwest Territories. We come to this chamber as representatives of people in our communities and regions. We come to bring that perspective to the debates of this House. The extent to which closure is used as a tool to cut off our instructional process is eroding public confidence in the ability of this chamber and the Parliament of Canada to act on behalf of the Canadian people.
On each occasion closure is used, it becomes easier to use it on the next occasion. The proof of that lies in the fact that we are considering the ninth motion of this kind brought forward by this government.
If hon. members opposite are pleased with last Wednesday's vote on the Constitution of Canada, I remind them that they could not have stood in this House and voted for that resolution or the accord if this party, led by the former prime minister of Canada, had not fought for seven days to keep them from getting to a closure motion. That is what the filibuster was all about; it was not on the Constitution of Canada. It was to stop the cabinet from moving a closure motion on the fundamental law of this country.


Some hon. Members:: Hear, hear!


Frederick James (Jim) Hawkes: Mr. Speaker, I stand here today representing the people of Calgary West and facing a closure motion on Bill C-48, the Canada oil and gas act. There is a sense of tiredness in this party about trying to educate members opposite to the impact of this legislation on the future supply of oil and gas for Canadians. In my riding, in my neighbourhood and on my street, there are many people who work in the oil and gas industry as janitors, secretaries, engineers and geologists. I see them day after day. I have lived among them all of my life. I tell hon. members that the present bill will not produce the desired consequences. It will not produce the oil and gas Canadians could have and do need, the oil and gas which will become even more important in the future.
The minister has a choice. He can read the speeches of the hon. member for Calgary Centre (Mr. Andre) and the hon. member for Calgary South (Mr. Thomson) as a student trying to learn about the industry which is important to the future of this country, or he can read them with a closed mind believing that members on this side have no interests other than those of obstructionists.
In the meantime I say to the minister that a number of my friends and neighbours have left this country with their skills, their money and their equipment. They are not here today to help us find the oil and gas this country needs. One of the reasons they are not here is Bill C-48.
The hon. member for Calgary Centre said earlier today that never in the history of a democratic government has there been a piece of legislation which simply moves in, without compensation, to seal 25 per cent of the assets of people who have their money invested in the shares of these companies, includ-
December 7, 1981

ing the pension funds. What this legislation does is steal 25 per cent of the assets of Canadians who have invested in these companies, or in pension funds, without compensation. That is one of the things it does, and that is one of the things that has chased Canadians with talents, skills, equipment and money out of this country. The United States, Australia, New Zealand and other countries are benefiting from this policy promoted by the Liberal Party of Canada. This policy is probably more important in world economic terms than the North-South dialogue, particularly in its potential to influence events as we go down the road.
One of the problems results from his lack of understanding that in the world today, because of the actions of the OPEC cartel and things of that kind, there is a worldwide shortage of human beings with the skills, knowledge and experience needed to find oil and gas, get it out of the ground and into our homes, our cars and buses. These people are in short supply in the world today.
When the government decides to strengthen the hand of the Department of Energy, Mines and Resources and to trust the advice of its officials, then I suggest the first thing it should do is compare the salaries paid to the officials of that department with the salaries paid to those in the private sector. The minister should remember that there is a shortage and then ask himself whether in that competitive labour market he is getting advice from the best brains, the most knowledgeable people. Is the minister, who knew little about this industry when he started, getting the best advice? If the minister cannot come to the conclusion, on the basis of plain common sense, that the government can, is and will be competing in the competitive market for the best brains, then he better be careful about how much responsibility he is giving his officials and how much advice he is taking from them.
I suggest to the minister that any objective observer would have to come to the conclusion that a government department is never going to be able to get the kind of talented and experienced human beings required to run this industry. When the minister has that clear in his mind he should look again at Bill C-48 and recognize that for each individual play there is going to be a bureaucrat determining the rules.


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. gentleman but his allotted time has expired.


Mr. Maurice Foster (Algoma):: Mr. Speaker, I am glad to have the opportunity of saying a few words on the motion before the House this afternoon to limit the time for debate on Bill C-48.
This bill is very important to all Canadians, and certainly to those involved in the oil and gas industry, with particular reference to the Canada lands, some 300 million acres in the north and on the east coast. The bill has been before the House for over a year now, and it is clear that even though it has had very extensive study in committee, with extensive debate at second reading and at the report stage, there is now under way a long filibuster on third reading.
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It seems to me that the opposition has the right to oppose a bill of this nature, but at some stage a decision has to be taken on what is the will of the House. During some 70 meetings the committee studying the details of this bill heard not only from representatives of oil companies but from people in the north and from other countries.
One feature of the bill that is often misunderstood, and about which there are outlandish cries of concern, is that feature regarding the federal government's 25 per cent share of oil and gas leases in the Canada lands. Bill C-48 does away with the existing system in almost all respects and adds one new element, namely, the 25 per cent Crown share.
Another related and very important component of the system is the federal government's cash incentives, the PIP grants, available to explorers, which will offset the 25 per cent Crown share. Thus there will be no free ride because the federal government is making grants for exploration. The government will be paying its way throughout the exploration and development stage and there will be no discrimination against foreign oil companies because they will receive the same 25 per cent cash incentive available to all Canadian companies. In fact, when the Crown agency converts to a working interest during the exploration stage, the federal government, in effect, will be paying nearly twice for its interest during the balance of that stage, because the private interest holder will continue to receive the minimum 25 per cent exploration grant in respect of his 75 per cent interest, while the Crown agency will pay 100 per cent of its working 25 per cent interest. Thus nearly 44 per cent of exploration costs will be met by or on behalf of the federal government.
Having regard to the fact that oil and gas resources are 100 per cent owned by Canadians in the first place, and the fact that Canadians have been funding frontier exploration and development through their tax dollars by an amount equal to much more than 25 per cent, Canadians should be entitled to at least a 25 per cent share of any oil and gas rights issued under the new act.
Regarding the 25 per cent Crown share of existing oil and gas rights, the rationale is equally sound. The fact is that Canadian taxpayers have been paying for the bulk of oil and gas exploration expenditures made in the frontier regions. Of the frontier development expenditures of $4.5 billion to $5 billion to date, some 75 per cent, or over $3 billion, has been provided through tax dollars in write-off provisions. Thus there is no case to be made for the suggestion that the 25 per cent Crown share is expropriation without compensation.
Furthermore, 85 per cent to 90 per cent of the total expenditure involved in exploring for oil and bringing a field into production is incurred after the production system has been approved. Since the Crown share will be in the form of a working interest not later than the time of the approval, the Crown agency will be paying a proportionate share of these major costs. That is, bringing the field into production and, as I said, paying 85 per cent to 90 per cent of the total expenditure. Of course, at that stage the Crown agency, whether it be Petro-Canada or another Crown corporation, will have con-

December 7, 1981
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verted their carrying interest into a working interest and will be paying their full share.
To ensure a fair distribution of past costs, there is a new provision for ex gratia payments on 25 per cent of the exploration expenditure made up to December 31, 1980 in respect of any oil and gas discovery which results from a well which is spudded prior to that date and which qualifies to be declared a significant discovery prior to December 31, 1982. The amount of payments to be made out of the Crown share of production will be fully reflected in the value in time of the qualifying expenditures. Thus, the government cannot accept the views of some companies that repayment should be in terms of the full market value of their reserves which have already been delivered.
Finally, our attention should be directed to the significant difference between the current Canada lands regime and the proposed Bill C-48 package. Currently, holders of exploration rights are required to return at least 50 per cent of their acreage to the Crown, which could involve up to 30 per cent of their discoveries, prior to obtaining production rights. Furthermore, the rights holder thereby loses a portion of the production area of the field. While some explorers have said that this imposes less of a burden than the proposals in Bill C-48, their actions contradict this view. In several cases they have opted for special renewal permits on their entire acreage, thus accepting the 25 per cent Petro-Canada back-in. They have done this in preference to moving directly to lease, yielding 50 per cent of their acreage but avoiding a Petro-Canada back-in. They are thereby recognizing a preference for the new system which allows them, among other things, to retain production rights in the entire area of an oil and gas field.
I would like to emphasize again the point that the people of Canada actually own 100 per cent of the Canada lands and the oil and gas which these regions contain. This amounts to approximately 300 million acres. Private companies may explore and develop these oil and gas resources but only on the full understanding that the federal government, as the landlord, can set a regime that is appropriate to the circumstances and in protection of the national interest. This is a basic principle which all governments must follow in managing their resources.
Therefore, Mr. Speaker, it seems important to me that we move on with this bill now. We have been without firm legislation for the past ten years, since the oil and gas land regulations have been in abeyance. This bill has been thoroughly aired, both in the House and in the committee. People who are interested are now concerned about the delay that is taking place at third reading, when amendments cannot be brought in anyway. I think it is important that we proceed now to pass this bill. The House has had an opportunity to discuss it in detail. I believe it is a waste of time to filibuster this bill at third reading. We should be putting in place a new oil and gas regulation regime for this important sector of our economy instead of wasting the time of the House. I would urge
members to get on with the job and pass this bill and bring its beneficial effects into being.


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, there are several types of legislation that this House deals with. One type of legislation is that with which there is a considerable amount of agreement from all sides, such as housekeeping matters which have to be dealt with rather quickly and expeditiously. We on this side of the House have tried to be as co-operative as possible as far as these issues are concerned. We have heard this afternoon that rapid consent has been given to approximately 33 pieces of legislation during this session of Parliament. If that is contrasted to what happened in 1979, I think you will find, Mr. Speaker, that during this session of Parliament it is evident that we have tried to be much more co-operative than the previous opposition.
Another type of legislation is that of a financial nature, such as the budget, with which we know there will not be agreement. The rules of the House, under the Standing Orders, provide a system of time allocation so that these matters can be reasonably and adequately debated before they come to a vote.
A third type of legislation is the type that is before us today, Bill C-48. This is a highly controversial piece of legislation which contains radical and new ideas that are not acceptable to the vast majority of Canadians. The traditional system which has developed over the decades in Canada for dealing with this type of legislation has been for the government to introduce the legislation, but rather than deal with it all at once, debate it over a period of time. There is a process of negotiation which is supposed to take place, and until this government was elected, this process by and large did go on. A majority government would get its way but the process would allow for consideration of other ideas and for the government to modify the proposals which it would have put forward. This process would prevent a radical change taking place virtually overnight.
I believe that this parliamentary process is a good one and should be inherent in the Constitution of Canada. We are now seeing this parliamentary process being abused and thrown away by the government. It does not care for the established principles of democracy and parliamentary procedure. Had the government brought forward legislation similar to Bill C-20, it would have been dealt with expeditiously. Bill C-20 was considered by the government, the opposition parties, by the industry and by people in the areas which would be affected, and there was a general consensus that Bill C-20 was the proper way to go. All that work went for nought and the government introduced Bill C-48, a bill with radical proposals; the concept of Canada lands and the continued colonialization and exploitation which the government wishes to see continue in the north, the idea that the minister can hand out gas and oil dispositions to anyone he wants. You do not get in line to come on a first come, first served basis or put in a bid at public tender; you just go to the back door of the minister's office and ask for a disposition at some particular area and ask, "What can I do for you?"
December 7, 1981

The notion of the oil and gas lease has grown up over many years in Canada. Companies would know what they were embarking upon when they signed an oil and gas lease in the north or in the provinces which issued these instruments. That will not be the case any longer under this legislation. The best that companies can do is to have something called a licence to produce. I do not know what kind of title that is. I am not surprised that property rights were not included in the new Constitution. What type of ownership is a licence to produce? It is practically meaningless. The idea is that whether you want it or not, you are going to have Petro-Canada in there as a 25 per cent or more partner. They are going to take that 25 per cent from you. It is confiscation, not, as the Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. MacLaren) said, obstruction on the part of the opposition. It is obstruction of the parliamentary process by this government; that is what it is.
Unlike the Parliamentary Secretary to the President of the Treasury Board (Mr. Kelly), who I am afraid is beyond hope and redemption, the Parliamentary Secretary to the Minister of Energy, Mines and Resources must have some spark of intelligence beneath that flint-like exterior. If he were to bring that little intelligence that he possesses to bear on this question, he would see what he has been party to. He must be able to see what the Minister of Energy, Mines and Resources (Mr. Lalonde) has been putting him up to.
This has been a shameful display of government arrogance. This is what the government intends to do. It came in with Bill C-48, it is going to take 25 per cent, confiscate it and do all the other things I mentioned. The government is not going to brook any opposition. It is going to do precisely and exactly what it had in mind in the first instance. It remains of that mind, not having listened to any of the arguments proposed by the opposition, other governments in Canada that have been involved or people in the oil and gas industry.
During the committee stage, this party proposed between 50 and 60 amendments. How many of those were accepted by the government? I will tell the House how many. Not one single amendment. I can believe that, out of the 58 amendments presented, after careful reflection 54 might not have been in the best interest of the country. However, I am sure that at least four, three, two or one, had they been looked at and carefully examined by members opposite, would have been found to have at least some merit. But no, that did not happen. The government made up its mind a year ago when this bill was introduced that it would not listen to the opposition.
That is one reason the government has run into so much trouble over the period of time it has taken. Another reason is all that has been going on in the meantime, all the time devoted to the Constitution and other issues. The government could have come in with Bill C-48, listened to the arguments and said, "No, we have listened to what you have to say and we realize that what you are saying makes some sense"-
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The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but his allotted time has expired. [Translation]
The member for Vanier has the floor.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: For Ottawa-Vanier, Mr. Speaker! I appreciate the opportunity to say a few words in this debate. I wish to remind the member who just took his seat that the House has spent twenty-eight days considering Bill C-48. There have been seventy committee meetings at which 140 witnesses were heard. I think it is time the government took action and that the House decided on this very important bill. Mr. Speaker, I also want to stress a very important aspect of Bill C-48, namely, the Canadianization of our industry. Bill C-48, an act to regulate oil and gas interests in Canada lands and to amend the Oil and Gas Production and Conservation Act, will enable the government to have more control over the development of regions under its jurisdiction, namely the Canada lands, and also to increase the level of Canadian participation.
This bill is therefore directly linked to one of the three primary objectives of the National Energy Program, Canadianization, which will give Canadians an opportunity to increase their participation in the energy sector, especially in the oil and gas industry. Mr. Speaker, one can hardly overestimate the importance of this bill, as it represents one of the major concerns of our National Energy Program. Its aim is to provide a basic framework for the sound management and profitable development of Canada's considerable oil resources, and more specifically in lands owned by the government in the North or adjacent to our coasts. The bill will also give Canadians a fair share in the development of their oil industry, while guaranteeing safeguards for the population and environment of these remote regions. Our program, Mr. Speaker, confirms the principle that Canadians are entitled to participate more fully in the activities of their oil industry, but it also wants to be fair to Canadians with respect to setting oil prices and royalties. These objectives are entirely compatible with our desire to guarantee the security of our oil supplies.
One cannot deny that Canadianization is progressing satisfactorily. In fact, the majority of Canadians are in favour of this measure. Since the National Energy Program was announced about a year ago, foreign participation has dropped by about 6 per cent and foreign control by about 10 per cent. Both the governments of oil producing provinces and the vast majority of Canadian citizens are supporting our Canadianization efforts. It is clear that Canadians see the National Energy Program and the Canadianization project as the two key stages in achieving two objectives, namely, 50 per cent Canadian participation and energy self-sufficiency by the end of this decade. If we take into account the rate of Canadianization since the National Energy Program was announced, we can safely assume that we are close to achieving these two objectives. Actually, the Canadian oil and gas industry can look to a

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very promising future, thanks to the National Energy Program and to these specific provisions of Bill C-48.
Naturally, as a state-owned corporation, Petro-Canada is committed to promoting Canadianization, and more specifically, the growth of our national industrial capability for providing the goods and services required for oil exploration. I want to stress the importance of the Canadianization program in connection with the development of our resources in offshore areas adjacent to the coasts. Thanks to this provision, Canadian industries will not only be taking part in the exploration of offshore resources, they will also be providing the equipment required to explore these resources. The National Energy Program also requires companies engaged in prospecting for oil and gas in offshore areas adjacent to the coasts and in the Canada lands to allow Canadians to compete on a normal basis as suppliers of goods and services. The Canadianization of the ancillary land facilities will allow new jobs to be created in Quebec and the Atlantic provinces and promote industrial development. Moreover, the use of Canadian goods and services will contribute to the development of new techniques likely to be exported which may have positive effects on our balance of payments.
Thanks to the Canadian corporation Petro-Canada and the oil incentive program, as well as the other measures which favour Canadianization under the National Energy Program, Canadians will participate to a large extent in the development of our offshore resources. Mr. Speaker, Petro-Canada is playing an increasingly important part in achieving the Canadianization objective set forth in the National Energy Program and the specific aims of Bill C-48. Over its past five years of operation, Petro-Canada has acquired much experience as an active participant in the Canada lands, a high degree of operational efficiency, and has played an active part in the development of new technologies, as well as an important though modest part on various international scenes. Since 1976, the corporation has been involved in digging 90 of the 153 wells in frontier areas and has been associated with the projects involved in every oil and gas discovery both on the east coast and in the Arctic islands. The corporation has for two years been operating drilling boats off the coast of Labrador, one of the most difficult drilling areas in the world, and it is now operating a drilling program off the Nova Scotia continental shelf. It is the only wholly-Canadian oil corporation in Canada, ranking sixth among the major oil and gas corporations, and it is involved in oil products marketing. I have had the pleasure to see Petro-Canada signs in my own constituency, and I feel that we should be proud to have Petro-Canada service stations in our constituencies.
Because of the experience it has gained, Petro-Canada has reached the following conclusions, and I should like to summarize these conclusions about the corporation and the impact Bill C-48 will have on the energy policy. Mr. Speaker, foreign investments in Canada's petroleum and gas industry are higher
than in any other country, a fact which is reflected in the number of permits held on Canada lands as much by the extent of foreign ownership as by the size of individual international oil companies' land holdings. If we are to make room for Canadians, Mr. Speaker, and if we do not want to wait for years and years before production begins in the less promising remote expanses of land, it is imperative that we make changes in the land system. The aims and techniques set forth in Bill C-48 are moderate under the circumstances, they are not unheard of on international oil markets, and they are geared to the purposes of the energy policy.
Mr. Speaker, the Canada lands are a huge area of sedimentary basins whose enormous potential requires large scale and high risk investments; skilful development and sophisticated technology are necessary. That region must have a competitive commercial environment and uninterrupted participation on the part of international corporations while we encourage new Canadian investments in frontier areas. The proposed tax system and land management meet that requirement. Just like any other country whose oil potential is significant, Canada must strike the proper balance between measures designed to encourage activities which generate new supplies and its desire to achieve a balanced and orderly industrial energy growth and responsible tax levies on the development of its new supplies. The policy appears to be commercially attractive and internationally competitive, and it will bring on stream the desirable contribution of the Canada lands so as to achieve self-sufficiency sooner than expected. Bill C-48 also sets up the structure for the deliberate action required if we want to offer full and competitive business opportunities to Canadian industrial, engineering and service companies. Those are my opinions, Mr. Speaker, after serious reflection, and they are shared by many members on this side of the House and, I believe, by many Canadians as well.


Mr. Ted Miller (Nanaimo-Alberni):: Mr. Speaker, it is disappointing that we have to deal with Bill C-48 again by means of closure. Bill C-48 is one of the most important bills that the government has introduced in its short term and for the term it has had under its previous administration as a Liberal government.
In my opinion, the government has taken a very narrow approach to Bill C-48 in terms of what the bill attempts to do for energy production. So far as the future of Canada is concerned, it is certainly important. The bill also has a great impact on many people in Canada, not only those who are dependent upon producing oil and those who are consuming oil, but also on our northern people and on some important offshore resources that employ many Canadians.
I am particularly disappointed that the government reneged on a commitment in committee to put this bill and all its implications before the people in the north so as to allow them to have direct input. It is not sufficient with a bill of this
December 7, 1981

nature to expect the northern people, the fishermen on the east or west coast to compile adequate briefs on such short notice so as to make adequate representations of their concerns in Ottawa.
We are concerned that closure is being imposed upon us in the House without our having any legal information from the government, particularly from the Minister of Indian Affairs and Northern Development (Mr. Munro), which would indicate what impact Bill C-48 will have on native land claims. We have been asking for that information for some time and it is not forthcoming. If anyone is obstructing the progress of Parliament, democracy and this bill, it is the government itself. The government certainly cannot expect the opposition parties to approve a bill that is so seriously flawed in many respects. Obviously, the "C" in Bill C-48 stands for closure.
The east and west coast fishing industry is poorly represented in Bill C-48, despite representations from the fishermen and allied workers in British Columbia, the Newfoundland fishermen, food and allied workers, the Canadian Arctic Resources Committee and the eastern federation of fishermen. We observe that little is contained in Bill C-48 that would indicate to those groups that the government is really concerned about protecting the offshore fishing resource which is so important, particularly in eastern Canada, the Atlantic provinces and Quebec.
The Minister of Fisheries and Oceans (Mr. LeBlanc) has been particularly silent on Bill C-48. We were expecting some comment from the minister. We were also expecting some comment from the Minister of the Environment (Mr. Roberts), who has so far failed to release the terms of reference as to how the environment will be protected under this Bill.
It seems to me and to the New Democratic Party that the only minister who has had very much input into Bill C-48 is the Minister of Energy, Mines and Resources (Mr. Lalonde). In fact, it is a power grab not only for resources, but it is a power grab by the Minister of Fisheries and Oceans and the Minister of the Environment. It is also a power grab to take away jurisdiction from the Minister of Indian Affairs and Northern Development.
We have just had an example in the Northwest Territories at Hall's Beach, where a cargo ship ran aground and we had pollution from diesel fuel leaking into that very sensitive environment. Bill C-48 does not address, in fact it confuses, jurisdiction over Arctic resources, Arctic pollution and offshore pollution in Canada. The Edgar Jordain lay on that beach for nine months before the federal government and its departments reached any conclusion as to how that particular oil spill would be cleared up. There were jurisdictional problems with the coastguard, the Ministry of Transport, the Department of the Environment, the Department of Fisheries and Oceans and the Department of Indian Affairs and Northern Development. There also were jurisdictional problems between insurance companies and the ship owner. We cannot afford in our offshore and northern resources to have jurisdictional problems. The bill does not adequately address the
Time Allocation
jurisdiction and the responsibilities of the Department of Fisheries and Oceans and of the Minister of the Environment.
Also the bill is seriously flawed in the area of jobs for Canadians. My party has moved a number of amendments which would have provided some assurance that Canadians would receive the full benefit of this massive bill and its implications in terms of offshore, northern development and the types and number of jobs required if there is to be full scale exploitation of offshore oil and gas. Sourcing provisions have been ignored. Canadians should have the opportunities, particularly those in areas which are hard pressed by unemployment or dependent upon the fishing industry. We are looking to some alternative to fishing on the east coast. The people there should have had some guarantees in the bill. They should have been provided with an opportunity to build the necessary ships and oil rigs and to provide all the technology which goes into offshore exploration and exploitation of oil and gas. There are inadequate provisions in Bill C-48, despite the input of various groups such as the shipbuilding and mechanical industries, despite the amendments proposed by my party to guarantee that those jobs existed for Canadians. We do not have any complaint about other nations having some access to those jobs, but when there are over one million people unemployed, there should be opportunities to train them for skilled, well-paying jobs so that they can contribute to the national economy rather than to national unemployment. There should have been some opportunity given by the government to those Canadians who find themselves unemployed, or to those Canadians, for example, in the Fishing industry in Atlantic Canada who find themselves employed but in receipt of wages and incomes far below the poverty line, far below what they can adequately survive and raise families on.
Closure is no way to deal with important bills on which the House of Commons is prepared to expend time and effort. The hon. member for Hamilton Mountain (Mr. Deans) made a fine suggestion this afternoon. He said that there should be some opportunity to determine the legislative program of the government before the session begins or early in the session so that we can judge the time which bills require. It is not time that matters in this particular case. We may have had a year, but we still find we are discussing a flawed bill, a bill which is the result of the government not listening to anyone other than the oil interests.


Mr. Kelly:: That is untrue.


Edward Allan Miller: To the greatest extent the oil industry has been well represented before committee, but what about people who are affected by northern developments and offshore resources? What about fishermen who are dependent upon a healthy environment for the production of stocks? Bill C-48 will pass because of the weight and power of the government, but we in the opposition would certainly be remiss if we did not oppose closure and a very flawed bill which does not consider its implications on the environment, on northern people, and on

December 7, 1981
Time Allocation
the fisheries and oceans aspects of the Canadian way of life. We will be voting against closure and against Bill C-48.


Norman Kelly: Mr. Speaker, I am pleased to have an opportunity to participate in the concluding debate on Bill C-48. In particular, I want to use the few moments allotted to me this afternoon to read into the record of the House portions of the "Forum" column carried in the October 1981 issue of The Roughneck, a small spunky periodical which I believe is published monthly in Alberta.
I have chosen this column as my topic this afternoon for two reasons. First, it was written by a small producer who is a member of a group which, in the struggle between the Titans, is easily and often ignored. Second, its author, Joe Mercier, offered a rational-that is, a calm and balanced view of both the national energy policy and its critics. I should like to start with the latter, those critics whom hon. members of the official opposition champion so emotionally, vociferously and, as we have seen this afternoon, so blindly in the House. The author wrote:
-the National Energy Program is the long time work of well educated civil servants who feel that they are doing the best they can for Canadians. They won't be dissuaded by industry criticism that lumps them as inept, malicious facist-communists. Being avid readers of the industry press, they are quick to point out the inaccuracy, exaggeration and hypocisy of the industry arguments, especially those from the independents. Some examples they choose:
-Putting total blame on the national policy for the exodus of small Canadian producers to the United States
-Doing the same for the rig exodus and exaggerating the numbers -Pretending dismay and surprise at the 25 per cent back-in on Canadian lands when the industry was alerted to that provision in 1976 and provided with draft implementation of it in 1978
-Embellishing the opportunity in Australia without mentioning that the government back-in there will be 50 per cent, or failing to suggest that American targets are not as good as those in Alberta and are as subject to bureaucratic regulations and interference as are Canadian targets.
In dealing with the national energy policy, he critically pointed out:
No question-the small producer faces severe problems. He is overextended under high interest rates with little cash flow and no means of raising equity capital...
His largest, single problem is a lack of markets for natural gas ...
His second problem is the inability to raise equity capital. Stock prices are down and there is no assistance from government in improving them.
His third problem could well eclipse the other two-the unbelievable complexity and paper work, dozens of taxes, and production forms, drilling incentive applications and back-ins. Now we have to add proof of Canadian ownership rating applications and justification for PIP grants and proof of non-avoidance under the Canadianization rules ...
His fourth problem is a lack of input with governments chiefly because of the assumption by politicians that the larger independents are speaking for him.
For the small producer the recommended cures are relatively simple-for cash flow-bring rationality into the marketing of natural gas. If the bureaucrats in Ottawa and Edmonton and the large independents sincerely wish to help the small producer they should start here. Not only would a rational market save the small producer but it would at last bring an effective effort from the industry in making a creditable determination of surplus reserves, reasonable exports and expansion of the gas markets .. .
The largest contributions undoubtedly could be made by the federal government if it would allow a full tax write-off against other income for the purchase
of shares in Canadian companies. That provision alone would do more for Canadianization than any other provision intended for that purpose . ..
For a continuing input into government policies and regulations that affect us, we would suggest that the spokesmen for the... independents follow the example of the majors in making reasonable specific criticisms.
Obviously, Mr. Mercier is concerned, obviously he is anxious to defend and promote the interests of small producers and just as obviously, the small producers want to reach an accommodation with the national government that respects the basic interests and prosperity of both sides. I commend him and his point of view to the Minister of Energy, Mines and Resources (Mr. Lalonde) and to the members of this House.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: Order, please. 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 Esquimalt-Saanich (Mr. Munro)-McDonald Royal Commission-Query respecting report abridgements, (b) Preparation of index to report; the hon. member for Moose Jaw (Mr. Neil)-Agriculture-Establishment of western grains research foundation, (b) Availability of funds; the hon. member for Prince Albert (Mr. Hovdebo)-Agriculture-Refinancing of Co-operative Implements of Winnipeg, (b) Amount of federal government assistance.



ROUTINE PROCEEDINGS


[Stage Direction]
The House resumed consideration of the motion of Mr. Lalonde:
That, in relation to Bill C-48, an act to regulate oil and gas interests in Canada lands and to amend the Oil and Gas Production and Conservation Act, one additional sitting day shall be allotted to the consideration of the third reading stage of the bill; and that 15 minutes before the expiry of the time provided for government business on that day, any proceedings before the House shall be interrupted, if required, for the purpose of this order and, in turn, every question then necessary in order to dispose of the said stage of the bill shall be put forthwith and successively, without further debate or amendment.
Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, this has been an amazing two hours. On this side we have
December 7, 1981

watched hon. members opposite read the speeches prepared for them by the bureaucracy. Absolutely no independent facts went into those speeches in this discussion of the most important loss in a free democracy, the loss of freedom to debate a bill through the imposition of closure.
The hon. member for Scarborough Centre (Mr. Kelly) referred to an article written by a Joe Mercier as if that gentleman were speaking for independent people in the west. Mr. Mercier, of course, is in a good position: he is a very close personal friend of the Minister of Energy, Mines and Resources (Mr. Lalonde) and he has a close relationship with Petro-Canada. That is the point that we have been making- that certain people who have close Liberal contacts end up with very favoured positions.


Norman Kelly: Mr. Speaker, for the record, I should like to point out that Mr. Mercier is a well-known, highly respected and admired member of the business community in Alberta. It was on that basis that I quoted him.


Harvie Andre: He is also a Liberal and a good friend of Marc!


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member for Lethbridge-Foothills (Mr. Thacker).


Blaine Allen Thacker: Mr. Speaker, I have obviously hit a raw nerve. Close patronage friends of the Liberal government are going to benefit under this program. There is no doubt that the federal oil policy will cost 60,000 people their jobs, and there is no doubt that the number of rigs drilling in the west has dropped by 50 per cent. The bulk of the people who had those jobs come from central Canada. They are young men and women from Ontario and Quebec who went to Alberta to get a job. Now, as the result of hon. members opposite not fulfilling their role, these people do not have a job.
I believe hon. members opposite have forgotten the fundamental rule of a parliamentary democracy, which is responsible government. Instead, we have the cabinet lined up against all the rest of us. The cabinet is responsible to this House, Mr. Speaker, and we as individual members have to respond to the needs and desires of our constituents. It should not matter what the cabinet says.
When a bill is presented to this House, each member should analyse it to see whether it hurts his or her constituents, the region or the nation as a whole, and that is what members of this party do. We immediately recognized that there were some fundamental national and regional problems with the constitutional resolution, so we raised objections and forced the government to change the resolution. But hon. members opposite stood up and voted for a motion of closure on that constitutional resolution. Or they were going to do that until we stopped them with a six or seven-day debate which blocked them from taking refuge in the rules. That allowed the Supreme Court to hand down its decision. Finally, the government went back to the table and brought in the very changes that this party had identified as necessary.
Time Allocation
This party has proposed dozens of amendments to Bill C-48. They are not spurious amendments, Mr. Speaker, but good amendments that would help people in the north. Today the government brought in a closure motion.


Gordon Edward Taylor: Lalonde clones!


Blaine Allen Thacker: This is clearly the worst bill that has ever come before this House, Mr. Speaker. It is full of drafting errors and the concepts are wrong. It should be withdrawn. It provides for confiscation. If we allow it to go through, we are putting in place a precedent that will let the government take away 25 per cent of Canada lands without compensation. If that can be done for Canada lands, then why can it not be done for farm lands? Surely nothing could be more important to our country than farm land? What is to stop the government bringing in a bill to take away 25 per cent of a person's farm? Here is a precedent for it and hon. members opposite have approved it as a policy. Indeed, it could be said that the government is taking 25 per cent of the farm land by means of the capital gains tax.
The people who live in Yukon and the Northwest Territories are being forever foreclosed by this bill. Those territories will never become provinces and they will never get control, management and ownership of their natural resources. Hon. members opposite do not seem to understand that there are human beings who live there, who love and have a feeling for the land.
As an Albertan, and knowing the history of Alberta, I know how they feel. In 1905 when Alberta was created, a central Liberal government decided that the people of Alberta could not control their resources and that the mighty Liberal government in Ottawa could make better decisions about the disposition of those resources than the people of Alberta. Even though Alberta had a provincial Liberal government from 1905 to 1921, the people rallied and demanded ownership of their resources. Their efforts were unsuccessful. In 1921 they turned out that provincial Liberal government and put in a UFA government. That particular party felt so strongly about obtaining ownership of the provincial resources that at an annual provincial meeting in 1924 it debated a resolution to separate the province from Canada. The people in Yukon and Northwest Territories feel just as strongly, Mr. Speaker.
In 1930 Alberta gained control of its resources, Mr. Speaker. Fortunately a Conservative prime minister, R. B. Bennett, came to power. But it took ten years, Mr. Speaker. During the depression the resources could not be developed, but things began to pick up in the 1940s. When the then premier of Alberta came to the federal government to seek money to develop the resources, none was available. The government in central Canada decided not to put money into the Alberta resources but through Royal Dutch Shell the people of the Netherlands did, as did the people of the U.K. through Gulf and BP, and as the people of the U.S.A. did through Esso.
We take a bloody dim view of a Liberal government now attacking those companies as if they were somehow evil and

December 7, 1981
Time Allocation
corrupt. They were prepared to put their money into Alberta when the federal government would not. Hon. members opposite do not seem to understand that. We are not threatened by those multinational corporations.


Mr. MacBain:: Shame.


Blaine Allen Thacker: Only a central Canadian would think that. Only a Liberal backbencher who does not have the spine to stand up to the cabinet and say "That is not right and we are not going to put up with it" would-


Arthur Allister MacBain: Oh, oh!


Blaine Allen Thacker: If I were a citizen of Yukon and the Northwest Territories, I would be marching. I would be throwing bricks. I would start a revolution if I had to, to get control of those resources.


Arthur Allister MacBain: Oh, another Levesque! Why don't you go to Quebec?


Blaine Allen Thacker: The only thing hon. members opposite understand is power.


Gordon Edward Taylor: Why don't you stand up and talk? Won't Trudeau let you stand up and talk?


Blaine Allen Thacker: The hon. member for Niagara Falls (Mr. MacBain) seems to be rather exercised. Where was he on the Constitution? The hon. member for Niagara Falls has done nothing on the Constitution.


Arthur Allister MacBain: I spoke for it. Your party did not even vote for it, or half of them did not.


The Acting Speaker (Mr. Ethier):: Order, please.


Mr. Henri Tousignant (Temiscamigue):: 
The Acting Speaker (Mr. Ethier):: Order, please. It being 5.05 p.m., the two hours provided for the consideration of the motion now before the House under the provisions of Standing Order 75c have expired. Accordingly, pursuant to this standing order, it is my duty to interrupt the proceedings and put every question necessary to dispose of the motion.
The question is on the motion of the Minister of Energy, Mines and Resources (Mr. Lalonde). Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Ethier):: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Ethier):: All those opposed to the motion will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Ethier):: In my opinion, the yeas have it.
And more than five members having risen:


Madam Speaker:: I declare the motion carried.



Mr. Pinard:: Madam Speaker, after consultation with my colleagues, we have come to an agreement to allow the House to sit from seven o'clock to ten o'clock tonight in order to deal with the fifth day of debate on the budget. If you seek unanimous consent, Madam Speaker, I think you will obtain a favourable response.


Erik Nielsen: Madam Speaker, we have had those discussions and we have come to that agreement. I take it that the final day of debate for Bill C-48 will be next Wednesday, is that correct?


Yvon Pinard: That is correct, Madam Speaker.


Ian Deans: Madam Speaker, we also understand the agreement to be as the House leader said.

December 7, 1981
Order Paper Questions


Madam Speaker:: Is it agreed that the House will sit from 7 p.m. to 10 p.m.?


Some hon. Members:: Agreed.


Yvon Pinard: I understand that the hon. member for Yukon meant Wednesday of this week.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David P. Smith: Madam Speaker, the following questions will be answered today: Nos. 2,712, 3,090, 3,144, 3,180, 3,294 and 3,329.


Mr. Beatty: Since October 14, 1975, did the government conduct or finance studies on the subject of subliminal advertising in either the electronic or print media and, if so (a) by whom were they conducted (b) what were their conclusions (c) what was the nature of the work (d) on what date were they completed (e) what was the cost (f) what action resulted from the recommendations (g) from whom can copies be obtained?


Gerald Augustine Regan: No, since October 14, 1975, the government has not conducted or financed studies on the subject of subliminal advertising in either the electronic or print media.
(a), (b), (c), (d), (e), (0 and (g) Not applicable.


Mr. Clarke: 1.	During the period 1970-80 did the Canadian Commercial Corporation acquire shares or other ownership interest in any other corporation, limited liability company or unincorporated company and, if so, what was the (a) name of the corporation, limited liability company or unincorporated company and any subsidiaries thereof (b) percentage of equity acquired (c) cost of acquisition (d) book value of the acquisition?
2.	Does the Canadian Commercial Corporation have a plan to change the present portion of ownership in any of these enterprises and, if so, what is the plan?


Hon. Ed Lumley (Minister of State (Trade)):: In so far as
the Canadian Commercial Corporation is concerned:
1.	Yes, November, 1976.
(a)	Hermes Electronics Limited, Dartmouth, Nova Scotia.
(b)	10 per cent (527,855 common shares and one preference share).
(c)	$3,000,001.
(d)	$1.
2.	Interests sold in September, 1980.


Mr. Herbert: Is the government giving consideration to establishing or financing a study on the magnitude and nature of the turnover of academic staff in Canadian universities and on the factors which encourage or inhibit turnover?


David P. Smith: I am informed by Statistics Canada and the Secretary of State as follows: Statistics Canada collects information annually on the number of full-time academic staff newly appointed to Canadian universities. This information appears in publication 81-241, "Teachers in Universities". Data on the number of academic staff leaving the university teaching community is also available on request from the education, science and culture division.
Presently, the program does not investigate the variety of factors which may or may not encourage or inhibit this turnover.
The Secretary of State is not planning such a study.


Mr. McKinnon: 1.	Did the Department of National Defence and the Post Office order a light truck from Chrysler Canada Ltd. at the cost of $1,256,660 under contract numbers 72.TS.P0023-1-4067 (OTS81-00140) and 30TV.1091 W-3630222 (2TV81-00059) and, if so, what type and for what purpose?
2.	Did the Department of National Defence place a contract in the amount of $3,967,000 with Diemaco Inc. for the repair and overhaul of small calibre weapons, components and accessories under contract number MC50.2790538 (2MC81-01106) and, if so, what calibre and how many weapons are being overhauled?
3.	Did the Department of National Defence place a $248,000 contract with Diemaco Inc. for a small arms replacement program under contract number 30RW.3131202 (2RW81-01348) and, if so, for what purpose and what calibre of weapons are involved?
4.	Did the Department of National Defence place a $62,519 contract with Diemaco Inc. for small calibre weapons under contract number MC50.2749075 (2MC81-01202) and, if so, what calibre and how many weapons are being purchased?


Hon.   J.-J. Blais@Minister of Supply and Services: 1. The
Department of Supply and Services placed two contracts with Chrysler Canada Ltd., on behalf of the Department of National Defence and the Post Office for light trucks as follows:
(a)	Department of National Defence: The contract is for 89 light pick-up trucks with crew cabs at a total cost of $1,246,595.55. These trucks are required for general duty purposes at 17 Canadian Forces Bases across Canada.
(b)	Post Office: The contract is for one light commercial van at a total cost of $10,063.84. It was for multi-purpose duties in the collection and delivery of mail in Edmonton, Alberta.
2. The Department of Supply and Services placed a contract with Diemaco Inc. on behalf of the Department of National Defence for the repair, overhaul, modification and reduction to spares of National Defence calibre weapons, components and accessories at an estimated value of $3,967,000. The workload negotiated for this contract during the period August 1, 1981
December 7, 1981

to July 31, 1983, in order to satisfy the Department of National Defence's requirements is as follows:
	August 1,	August 1,
	1981 to July	1982 to July
	31, 1982	31, 1983
	(quantities)	(quantities)
Rifle 7.62mm, FN, Cl A1	4000	5700Rifle 7.62mm, FN, C2A1	250	250Machine gun cal .50M2HB flexible and fixed	240	180Submachine gun 9mm Cl	3000	3000Machine gun 7.62mm C5A1 flexible	250	300Magazine, cartridge, 9mm 10 rounds	500	500Magazine, cartridge, 9mm 30 rounds	2500	2500Bayonet scabbard	2000	2000Repair of piston gun gas cylinder for Rifle 7.62mm, FN, C1A1	4250	6000Pistol 9mm	800	1000Magazine 7.62mm, 20 rounds	15000	20000Magazine 7.62mm, 30 rounds	4000	4000Bayonet Cl	3500	3500Modification of machine gun Cal. 30 M1919A4 to machine gun 7.62mm C5A1	250	370Preservation of rifle 7.62mm C1A1	0	150003.	The Department of Supply and Services placed a contract with Diemaco Inc. on behalf of the Department of National Defence in the amount of $248,000. The purpose of this contract is to define for government evaluation, alternatives and production implementation requirements to supply 5.56mm weapons and/or combinations thereof plus associated material as may be required for the planning of a small arms replacement program.4.	The Department of Supply and Services placed a contract with Diemaco Inc. on behalf of the Department of National Defence in the amount of $62,518.76 for the supply of spare parts in support of the Department of National Defence's submachine gun 9mm Cl and mount Ml 13A1 carrier.


Mr. Dantzer: Are the results of the Department of National Health and Welfare's summer surveys of the elderly and attitudes towards the elderly now available and, if not, on what date will they be available?


Hon. Monique Begin (Minister of National Health and Welfare):: The results of the survey on pension issues, conducted by the Department of National Health and Welfare are currently being analysed and prepared for publication. The results of the survey are scheduled for release on or before December 31, 1981.


Mr. Herbert: With reference to the answer to question No. 1,554 of the first session of the Thirtieth Parliament, on what date was metric stationery made available for general use in the public service?


Hon.   J.-J. Blais@Minister of Supply and Services: The
metric paper sizes referred to in question No. 1554 of the first session of the Thirtieth Parliament were not approved by the
The Budget-Mr. Mazankowski
Canadian Government Specifications Board committee on paper sizes (now the Canadian General Standards Board), thus this size was not made available for general use in the public service.
The National Standard of Canada for paper sizes, CAN2-9. 60M-76, issued in 1976, includes, for general correspondence use, the size designated P4 which is 21.5 + 28 cm, and is the same size as the SV2 4- 11 inch paper generally used for correspondence purposes.
The paper sizes recommended in the National Standard were implemented for use throughout the public service by the federal identity program in 1979.


David P. Smith: I ask, Madam Speaker, that the remaining questions be allowed to stand.


Madam Speaker:: The questions enumerated by the Parliamentary Secretary have been answered. Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, November 18, consideration of the motion of Mr. MacEachen that this House approve in general the budgetary policy of the government.
Hon. Don Mazankowski (Vegreville):: Madam Speaker, I understand that I have roughly 15 minutes left in the speech which I started on November 18, 1981.
In my opening remarks I referred to the fact that, in the 13 years that I have been a member of the House, I never had the experience of seeing a budget which was so roundly and universally condemned. In short, I think that members of the House and Canadians at large are recognizing this budget as a formula for economic disaster. If one studies the budget, one can see that it inflicts irreparable damage and hardship on literally everyone and provides relief to no one. It provides no hope or encouragement and it is incumbent upon all of us in the House who believe in representative democracy to fight the passage of this budget in the hope that it will eventually be withdrawn. It destroys the motivation to invest, to produce, to build.
In the time I have remaining, Mr. Speaker, I will deal particularly with the dociiment entitled "Economic Development for Canada in the Eighties". All I can say is that it is a document which is couched in bureaucratic language that emanates from the ivory towers in Ottawa. It clearly offers

December 7, 1981
The Budget-Mr. Mazankowski nothing in the way of hope or encouragement for increasing the productive capacity of Canada. In effect, it is really a job creation program for loyal Liberals because in that document one sees that there will be the creation of at least a half dozen commissions, task forces and boards which will serve to do nothing more than obstruct, frustrate and harass the private sector; all done in the name of outlining a new industrial strategy.
I must say that this is viewed in many quarters with some degree of suspicion. It is interesting to note the recent publication of a document entitled "Spectrum" put out by the Canadian Imperial Bank of Commerce, the issue entitled "Canada's National Priorities and the Changing World Economy", written by Mr. Russell E. Harrison, chairman and chief executive officer of the Canadian Imperial Bank of Commerce. He points out that there are fewer than 20 years remaining in the twentieth century, the twentieth century that Sir Wilfrid Laurier said would belong to Canada. He further points out that we have but 19 years in this century to fulfil the Canadian dream to which Laurier gave expression-that our astonishing potential, our skills and our aspirations provide the basis for a strong economic finish to the year 2000.
He does point out that Canada ranks among the ten most important countries and economies of the more than 150 members of the United Nations. He also points out that despite our size and strength, Canada has lagged behind most other industrialized countries in recent years in the critical areas such as real growth, productivity gains, employment and ability to control inflation. He goes on to point out:
The dimensions of our national economic dilemma deserve careful scrutiny.
He points out that the four main aspects of our economic dilemma can be summarized as inflation, lack of growth, productivity and competitiveness. There is absolutely nothing in this document that addresses those crucial problems. He goes on to say:
Our problems are to a very real extent "made in Canada".
I certainly agree with that. He continues:
-we should be improving economic efficiency and encouraging new productive investment, especially in sophisticated high technology product and service areas ... The services sector is the most rapidly expanding sector.
We should be doing more to promote growth in the new high technology industry.
-our over-all investment in research and development, measured as a percentage of gross national product, ranks well behind other successful industrial countries such as Japan, West Germany and Sweden. ...
We can no longer rely on riding the coattails of a dominant world power as we have done for most of our history. There is no longer a single dominant economic power in the world, let alone one with which Canada has a privileged relationship. . . . An emphasis on one or two markets, especially ones which are our major competitors, will no longer suffice. We would do well to note that this is central to the strategy of successful countries such as West Germany and Japan. ... It is market forces-
He is referring back to this document which is supposed to outline a comprehensive industrial strategy. He points out that
you cannot rely strictly upon the guesswork of government to develop an over-all industrial framework. He points out:
It is market forces, not government guesswork, which should guide our economic development and our economic pruning. The industrial landscape in Canada and many other countries is littered with government-sponsored industrial concerns which challenge market forces rather than respond to them.
This is not to say that the role of government is not important, but the role of government does begin with the creation of a healthy economic climate that will contain inflation, provide for the responsible management of monetary aggregates, moderation in public expenditures and a stimulative taxation, regulatory environment, and an effective, longterm approach to energy pricing and supplies. It is this kind of structure and approach that is not contained in the budget and therefore does not provide any hope for our country.
It is very discouraging when one reads that document to find that there is nothing in it to give any hope to individual Canadians and companies to capture the tremendous wealth and potential that we have in this country. What else does the document say? It is almost laughable when one reads on. It points out that as an incentive to agriculture, this government announced it is going to have consultation to develop an agri-food strategy. It says it is continuing its review of the Foreign Investment Review Agency.
For the fishery sector, this government says it is reviewing fisheries policy. For forest-based industries, the government says it will continue consultations. For the mining industry, the government says it will continue consultations and make a report later this year.
For transportation in western Canada, the government says it will continue its meeting this year to try to develop an action plan. I should say there has been nothing done by this government to deal with transportation since 1979 when the Progressive Conservative Party was in office. All we hear about is the vanishing $4 billion western development fund which is now down to $1.3 billion. We are not sure what it is going to be spent on. Suffice it to say it is merely a slush fund.
The government says that to stimulate increased Canadian exports it will create an export trade development board to co-ordinate policy formation. In the final section of the Economic Development Paper on Human Resources, the government again skirts the problem in favour of inaction. It is going to review the labour market policies and have consultations to try to discover what initiatives might be taken for education and job training.
The Minister of Employment and Immigration (Mr. Axworthy) is trying to identify manpower needs and develop strategies to meet them. Canada Employment and Immigration is trying to increase its analytical capability. The entire strategy of this document entitled "Economic Development for Canada in the Eighties" reads as if the entire government had been on holiday for the last ten years and is now trying to engage in consultations and co-ordination, develop ideas, create new offices and agencies to try and figure out what is 'going on and then figure out what to do.
December 7, 1981

It will mean nothing more than an obstacle, another action of this government which will discourage investment and production and thereby discourage growth. This budget penalizes investment in this country. We need investment in order to create wealth, produce jobs and have individual Canadians exploit their full potential. We must have investment and increased productivity. We must have investment to advance technological change. We must curtail the mass exodus of capital, manpower, expertise and machinery which is fleeing from this country. There is nothing in this budget which addresses that problem.
As for the impact of the budget on the Toronto stock market, within a week after the budget was introduced it was recorded that the Toronto Stock Exchange index was reduced by some $6 billion. That is hardly an indicator of investor confidence. This lack of confidence comes on the heels of the 12 months of disaster that has been perpetrated on this country by the unfortunate National Energy Program which has been brought in. It has been disastrous.


An hon. Member:: Rubbish.


Donald Frank Mazankowski: The hon. member says rubbish. He should go to western Canada and find out for himself. This National Energy Program is an unmitigated disaster. It has particularly hurt the drilling and servicing sector which is 95 per cent Canadian owned. With regard to the exploration sector, all that has happened is that this activity has shifted south of the border.
I had directed to me a copy of the October 5 Houston Business Journal. It is headlined "Canadian connection: Energy, money, politics blur borders". I quote briefly from the article:
Houston oilmen call the visiting Canadian oilmen "snowbacks". They began to migrate south in 1974 when the first signs of nationalism and anti-Americanism appeared in the rhetoric of Canadian politicians. But since October 1980, when the national energy policy was passed by Pierre Trudeau's government, what was once a trickle of snowbacks has turned into a deluge.
One unofficial estimate places the amount of Canadian exploration and development money spent in the United States since the passage of the NEP at about $2.5 billion. Much of that has found its way to Houston.
Several new oil and gas companies have been formed here backed by Canadian money. Large established Canadian oil companies, such as Dome Petroleum Ltd., have opened offices here. Many small and medium-sized Canadian independents have set up U.S. subsidiaries here to take farm-outs in U.S. operations.
They total something like two dozen new Canadian branch operations which have been opened in the United States. Some 226 rigs and more than 100 service rigs have left Canada for the United States. I quote:
Although designed for cold weather, many of the rigs have come to Texas. Some Canadian contractors are selling rigs to firms here rather than just moving them south-
In the Edmonton Journal of October 5 it is reported that some 235 rigs have now left Alberta for the United States as well as over 100 service rigs. Looking at that in terms of employment, each rig employs about 40 or 50 people and service rigs employ about ten people each. Imagine what that does. That is over 10,000 workers misplaced as a result of a
The Budget-Mr. Mazankowski
deliberate government policy. It is no wonder that division, anger and outrage is created in the country.
In my constituency of Vegreville The Wainwright Star Chronicle carried the headline "Jurassic quitting Canada". This is a very human story, Mr. Speaker. The November 25 edition of The Wainwright Star Chronicle reported as follows:
"It was the hardest thing I've ever had to do."
So says Jim Voll, who laid off 30 employees here and will take Wainwright-based Jurassic Well Servicing's remaining rigs south to Oklahoma.
The decision was taken in the light of federal and provincial policies which continue to destroy the small operator. . .. Last fall's National Energy Program . .. agreement in September set the stage for the move.
And the recent federal budget was the final straw. . ..
"There was just nothing in the budget to encourage us to stay."
Government induced depression in the oil industry here has meant there's just too little work here to remain in business. ...
The Wainwright-based company had operated 10 rigs from here, but sent six to the Oklahoma oilfields last spring. The final four will follow by the new year, Voll says, and the Wainwright office closed for good.
That is in my home riding; that is one of the major centres in my constituency. So much for Canadianization and the promotion of Canadian ownership! They are driving the expertise, the investment and jobs south of the border.
If one were to peruse the budget to see what it was supposed to do for Canadianization and promoting Canadian ownership, one notices that the taxes introduced in the National Energy Program, such as the petroleum, gas and revenue tax and the natural gas liquid tax, proportionately hit harder at the independent oil and gas producers, which are largely Canadian owned. It affects them more severely than the large multinational, integrated oil companies. There is nothing to redress that situation in this budget.
Second, Canadian oil and gas producers need now new equity and new capital to survive and grow. The November 12, 1981, budget restricts interest cost deductibility which will make this process more difficult.
Third, Americans continue to have full interest cost deductibility. Thus, foreigners will find it cheaper to invest in Canadian oil and gas activities than will Canadians.
Fourth, by deeming an interest benefit on loans made for employee stock purchase plans, it destroys a very important mechanism which many Canadian companies use to attract good staff and to motivate their staff to increase Canadian-owned shareholdings of their companies.
Fifth, the November 12 budget requiring the payment of taxes even for non-cash corporate reorganizations will severely affect the ability of many junior oil and gas companies, which are, again, largely Canadian owned, to reorganize their affairs so as to survive the adverse effects of other aspects of the National Energy Program. It penalizes those reorganizations and reduces the ability of junior Canadian oil and gas companies to contribute to the Canadianization of the oil and gas industry.

December 7, 1981
The Budget-Mr. Mazankowski
The National Energy Program is not a Canadianization policy; it is a nationalization policy. There is a fundamental difference between the two of them; there is no question about that.
Let us look at agriculture, a very important industry to western Canada, particularly to my constituency of Vegreville. As far as this budget concerns agriculture, it is a cop-out. Canada's farmers are caught in the squeeze of high interest, high inflation, high input costs and low commodity prices. In our society we know that farmers are price-takers. They do not have the luxury of passing on the impact of high input costs, high inflation and high interest to the consumer.


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but his allotted time has expired. He may continue with unanimous consent of the House.


An hon. Member:: Is there unanimous consent?


The Acting Speaker (Mr. Ethier):: Order, please. I asked if there was unanimous consent. An hon. member was rising in his place; therefore, I have to recognize him.


Mr. MacLellan:: Mr. Speaker, I am quite prepared to allow the hon. member to proceed, if he so wishes, for a few minutes.


The Acting Speaker (Mr. Ethier):: Therefore, I take it there is unanimous consent.


Donald Frank Mazankowski: I want to thank my hon. friend for his courtesy; it is most appreciated. Maybe some day I will have the good fortune of returning that particular gesture. I do appreciate it very much.
I should like to deal briefly with two very important high input matters as they relate to the production of food. I think many farmers, particularly in eastern Canada, who have experienced a dramatic increase in the price of fuel, may very well be pointing the finger at the people of western Canada, particularly at the producing provinces of Alberta and Saskatchewan. It should be pointed out that at the present time Alberta and Saskatchewan sell oil for Canadian consumption at a figure of some $21.25 a barrel. More than $10 per barrel is tacked on in the way of federal taxes. This works out at a price of more than $31 at the refinery level. We are still importing some 400,000 barrels a day at roughly $42.38 a barrel.
The high energy cost, the high fuel cost, is attributable to the rip-off which is occurring by the federal government on the backs of the producers. Roughly 57 cents a gallon in the form of federal taxes is levied upon fuel which is used for the production of food. The excise tax of some seven cents is refunded upon application. So really 50 cents a gallon is levied against the producers of Canada for the production of food. This is a very substantial amount of revenue in the hands of the government.
As a matter of fact, if one were to look at the increase in the price of fuel in 1981, 75 per cent of the increase was attributable to federal taxes. Canadian food producers consume about
900 million gallons of diesel fuel and gasoline on an annual basis. If there is a 50 cent per gallon federal tax levied on that fuel, that amounts to some $450 million.
I believe it is terrible to think that the Government of Canada, which wants to pursue a cheap food policy, would have the audacity to impose that kind of taxation on the farmers of Canada who have no way of recovering that cost. Surely there is room for a 25, 30 or maybe even a 40 cents rebate. A 30 cents rebate would amount to some $270 million.
Let us look at fertilizers. At the present time the equivalent federal tax for the natural gas that is used for producing a tonne of ammonia is equal to $25 per tonne. Under the new energy agreement by 1985 the federal tax will increase to some $72 per tonne. If the federal government wanted to provide some relief to the producers of Canada, it could do so by modifying that tax. As it is, it is a federal government rip-off. There are substantial federal government revenues being generated on the backs of the producers who cannot recover and pass this cost along. The government is, in effect, penalizing the producers of Canada and not coming to their aid. I suggest that if this government were interested in preserving an effective food production system, this tax should be exempted or at least modified or reduced. It is one of our natural resources that should be used as a benefit for all Canadians, not as a benefit to or as an instrument for a major tax grab by the government.
We meet here today at a time when our agricultural industry is being severely threatened. It is a situation that is most serious throughout the country. Perhaps it is more serious in Ontario than it is anywhere else. Out of the 230 farm bankruptcies that have been reported since the beginning of the year, some 126 have occurred in the province of Ontario.


The Acting Speaker (Mr. Ethier):: Order, please. It being six o'clock, I do now leave the chair until seven o'clock.
At 6 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 7 p.m.
Russell Gregoire MacLellan: Mr. Speaker, I am pleased to have the opportunity to address the House on the recent budget presented by the Minister of Finance (Mr. MacEachen). I must say at the outset that this budget confirms very clearly the government's firm commitment to economic leadership, the determination to counter the forces of inflation and to maximize economic opportunities for Canadians in all parts of Canada. This can be seen throughout the document. That is why I am strongly supportive of the measures which the Minister of Finance proposed.
The minister presented a responsible budget. Its themes of restraint, equity and economic renewal are certainly appropriate to the changing social and economic conditions we face in

Canada today. One of the ways the minister has striven to meet these goals is through reform of the tax incentive structure. A year ago he announced that he would take a hard look at tax incentives. He has done precisely that. Tax incentives tend to pyramid, with the result that a number of profitable corporations or wealthy individuals have very little or no tax. On the other hand, there has been a large group of individuals and corporations which have not been able to take full advantage of these tax benefits. These people and companies can be found primarily in the smaller communities of the country, in particular in those provinces which suffer most from economic and social disparities. That is why I welcome the review and that is why I applaud the results. Moreover, I hope the Minister of Finance will continue to examine and improve the federal tax structure, for I believe corporate tax incentives can be a very positive force for both national and regional economic development. The Government of Canada demonstrated that concern last year through the creation of the 50 per cent investment tax credit program which is helping to bring much needed development to those parts of Canada where it is sorely needed. I believe that further consideration of the regional effects of all elements of corporate tax incentives could contribute substantially to the equitable distribution of economic opportunity and to the more effective use of underutilized resources.
I am sure hon. members on both sides of the House recognize that national economic renewal cannot be achieved overnight; there is no quick solution. However, the budget and its accompanying economic development statement form the nucleus of a comprehensive economic approach to economic development in Canada which, if followed, will bring about the renewal we are all seeking.
This summer the Minister of Regional Economic Expansion (Mr. De Bane) was a member of the ministerial committee which prepared the new economic development policy framework. I know that the document entitled, "Economic Development for Canada in the Eighties" fully reflects his determination to deal with the problems of inflation, high interest rates and unemployment through a long-term comprehensive program of industrial renewal.
Today I should like to focus on the basic principles which will guide the direction of these national policies and programs, and to say a few words on what they mean for Canada's regions. Quite simply, the government's priority is national economic renewal. Its policy focuses squarely on industrial innovation, as well as the restructuring and improving of the processes of adjustment in all areas of Canada. To this end it states clearly that "regional economic development will be central to public policy planning at the federal level". I am most reassured by this statement, for I have long held that the regional character of Canada's economic environment is of prime importance to all of us.
Along with the Minister of DREE I have also emphasized the need for a comprehensive framework for economic de-
The Budget-Mr. MacLellan
velopment which must surely be based on the support and strengthening of our regional economies. I am sure all members of the House, and particularly those who were members of the Standing Committee on Regional Development who have worked closely with the minister, appreciate the complexities of integrating national and regional development objectives. The committee members in particular will also recognize that the main directions for the regional policy were enunciated in documents tabled at the standing committee some time ago.
The main elements outlined at that time, as hon. members will recall, were the development of human resources, the need to overcome barriers to growth, the requirement to promote industrial renewal and adjustment and to enhance interregional linkages by allowing the free flow of goods, services, capital and people within Canada.
Not only are these goals appropriate for the regional needs of our country, I am pleased to say they have also been given and accepted as central to the government's over-all policies and priorities for national economic development. It is now clear that this government is firmly committed to the development of our regions. This fundamental commitment will now be seen as being integral to the decision-making process of all our economic departments.
1 am most pleased with the central position that regional economic development has been given. DREE has fully participated in the formation of the government's new economic policy framework, and is now embarked on an elaboration of that statement for each region of this country that will enable this policy to become a reality.
The objective, if I may paraphrase the words of Ontario's minister of industry, is to forge and strengthen the economic links which bind our nation together. We must recognize that the Government of Canada cannot achieve these goals alone. Both the federal and provincial governments have economic development responsibilities. Therefore, joint planning and co-ordination is essential.
The federal government has forged some important new links in the past few months, first with the signing of federal-provincial agreements on energy and second with the federal-provincial agreement on a made-in-Canada Constitution, which contains a commitment by both levels of government to regional development and equalization. Let us continue to strengthen those links.
I believe that federal and provincial governments can and must work side by side to realize the economic opportunities that are before us. I also believe that the federal government's role in the implementation of regional development programs needs to be more clearly defined, recognizing once again that both levels of government have economic development responsibilities. Let us sit down together and discuss our plans and strategies. Let us seek to establish common objectives and priorities for regional development programs. Let us determine where the federal government can make its best contribution, and where the provincial governments can make their best contribution.

December 7, 1981
The Budget-Mr. MacLellan
Planning and co-ordination of regional policies will be no less difficult than the energy negotiations or the constitutional negotiations. But I believe they can be equally rewarding.
A new set of economic relationships will build on our strengths which can be found all across our country. A new set of relationships will include the Atlantic region, Quebec, Ontario and the west in a genuine and just economic partnership. Co-ordinated strategies for the development of Canada's regions-complementary strategies-are essential to the building of that economic partnership.
The development of industry, natural resources, transportation, exports and Canada's human resources requires that the national government gain a thorough understanding of the circumstances and concerns in each region. Furthermore, the economic development framework accompanying this budget promises that special attention will be given to those areas of the country with the lowest per capita incomes and highest unemployment.
In this way, we will be working to reduce those economic and social disparities that exist between the various regions of Canada. These disparities are particularly prevalent in Canada's rural and more remote areas and among our native peoples. But in order to attack disparities, we must have accurate information for planning our programs. However, to date, even measuring these disparities has been a real challenge. But as members of the Standing Committee on Regional Development know, DREE has placed a high priority on the development of a small-area data system which will greatly assist our planning. It will also enable members of the House to gain a better understanding of economic circumstances in their own areas. In the near future, the Minister of DREE expects to be in a position to advise members of the House of a new, more comprehensive data system that will be able to respond to their real needs for information and statistics about their constituencies.
I would now like, Mr. Speaker, to look at some of the regional development issues we will face in the coming decade. We are indeed fortunate that throughout the 1980s, there will be genuine prospects for growth in every region of Canada. Of course, our regional dynamics mean that there are distinct problems that must be faced. The opportunities, as well as the constraints, must be addressed if we are to meet the challenge successfully.
The Atlantic region has areas that have begun to prosper in recent years, but there are also too many areas, such has my own constituency of Cape Breton-The Sydneys, where a great deal remains to be done. Nevertheless, the Atlantic region is, in fact, entering the 1980s well positioned for a decade of solid growth. The challenge here is to promote the expansion of enterprises capable of taking advantage of new markets, products and technologies which are emerging in world industrial markets.

Quebec is facing specific problems of industrial readjustment, especially in labour-intensive, low technology industries
such as the textile, clothing and shoe industry. That province has a large number of mature industries that will have to meet stiffer and stiffer international competition. While in the seventies emphasis has been put mainly on public investments, ways must now be found at all costs to increase investments in the private sector. Emphasis must be put mainly on high technology industries, promoting industrial research and the creation of export industries, especially those connected with the processing of national resources. Local and community development, aimed in the first place at areas where unemployment is highest and per capita disposable income is the lowest, must be a priority. We must also give back to Montreal its role as Canada's first trading centre, promoting the growth of its industrial and service industries and reconfirming its international status.
Ontario remains one of the strongest provinces in confederation, but there has been a relative weakening of its position within the national economy over the last decade. It is increasingly apparent that the Ontario economy must undergo a process of industrial renewal in order to adapt to changing conditions in international trade and to capture the opportunities which will be generated by major energy and other resource projects elsewhere in the country.
For several years, now, the west has been the fastest growing region in Canada, and the prospects for the future are that this rapid growth will continue. Economic growth has not been even, however. The west is now faced with a number of constraints: soil and water supply problems in the dry southern prairies; the inadequacy of the transportation systems, especially the bulk handling export delivery system; and, most critically, the short supply of skilled manpower. These, then, are the major regional development challenges we must face in the eighties.
I know that with this new policy framework, we will be able to meet these challenges. By recognizing the regional dynamics that underlie our country's economic and political structure, we will be able to achieve the renewal we seek, for economic renewal through the promotion of initiatives in the priority areas of industry, natural resources, transportation, exports and human resources can come about only through a development policy based on the needs of Canada as a whole, and its distinctive regional components.
As the government of Canada strengthens its capacity to integrate regional development concerns into its total policymaking process, I know that we will be able to make great strides toward achieving our goals of equity and economic renewal. This understanding of the needs of all Canadians in all regions is central to the economic development policies of the Government of Canada.
In this budget, the Government of Canada has pledged itself to the principles of equity, restraint and economic renewal. I,

along with the Minister of Regional Economic Expansion, endorse these principles.


Some hon. Members:: Hear, hear!


Mr. Douglas Neil (Moose Jaw):: Mr. Speaker, I wish I had as much enthusiasm as the hon. member who spoke previously with respect to the budget, because I listened with interest on November 12 last, when the Minister of Finance (Mr. Mac-Eachen) presented his budget in the House. He stated that there were three themes to his budget: restraint, equity and economic renewal. With respect to restraint, he said, in part:
There is need for restraint on the part of the government and restraint on the part of all Canadians.
With interest rates running at 20 per cent, unemployment at record highs, more lay-offs on a daily basis, inflation rate at about 12.8 per cent, and increased energy costs amounting to an additional $1,400 a year per family, individual Canadians have little choice but to exercise restraint. The government's restraint program, on the other hand, is to increase expenditures by some 20 per cent.
The minister talked of equity and about an overhaul of the tax plan to clear what he called loopholes. It was a Liberal government and a succession of Liberal finance ministers who brought in these so called loopholes. But they were not loopholes when Benson, Turner, Macdonald and Chretien introduced them in the House. At that time they were tax incentives, incentives to encourage growth in the economy, to create new jobs, and to encourage construction and incentives for individuals to invest and for business to expand.
The Minister of Finance was a member of that government when all these measures were brought in. I do not ever recall the Minister of Finance, before he assumed his portfolio, standing up in his place in the House and saying that the measures, when they were introduced by former finance ministers, were unfair. On the contrary, he applauded them. On Thursday evening, November 12, very piously, in an attempt to cleanse his soul, I would suggest, he almost made it appear that those who had been making use of the incentives that he and his colleagues had passed as the law of the land were doing things which were not quite legitimate. I think he will have difficulty in persuading young working people who were borrowing money from the banks to buy RRSPs and claiming back interest as an expense, that they were taking advantage of a loophole; or that individuals who were making use of income-averaging certificates or who were deferring the capital gains tax after having sold the capital assets under agreements for sale were taking advantage of a loophole.
The minister spoke of economic renewal when he said:
This decade offers exceptional opportunities for strengthening and diversifying growth in every region in Canada.
He tabled a major policy document on economic development for Canada in the eighties, and the hon. member who spoke previously referred to that document.
In the last decade that I have been here in Parliament successive Liberal governments and finance ministers in the
The Budget-Mr. Neil
past have always talked of major policy changes, industrial strategy, and the opportunity for Canada and Canadians in the decade of the seventies. Did it take place? Let us examine the record. In 1970-71, the budget was for $14.6 billion. The last budget we have, the 1980-81 budget, is for $65.5 billion. In 1970-71, the beginning of this decade, the gross public debt was about $37.5 billion. In 1980-81, the gross public debt is over $122 billion. The interest on our public debt now exceeds our total budgetary expenditure of ten years ago. Our inflation rate has climbed to over 12 per cent. Unemployment is over 8 per cent, with almost one million unemployed people in our country. Bankruptcies of small businesses and farms are increasing, there are daily lay-offs in industries, and there are mortgage foreclosures because individuals cannot renew their mortgages and meet the high payments required monthly. Our standard of living is well below that of most developed countries.
We had exceptional opportunities in the seventies, and the government blew it because, under the leadership of the present Prime Minister (Mr. Trudeau), the Liberal Party has moved to the left, toward socialism. The government abandoned the principles of its predecessors who realized that this country was built on individual initiative and a free enterprise system tempered with compassion for the sick, the unfortunate and the elderly. The policies and the programs of this government has been such since the present Prime Minister took over that, generally speaking, Canadians have lost the initiative and the desire to risk their future and their capital on an enterprise which not only has to struggle in the marketplace, but, worst of all, is also plagued with complicated and uncertain tax laws, and, on top of that, government red tape, bureaucratic indifference and all the frustrations that go with the operating of a business.
It is a sad commentary on this great country of ours. The budget that was handed down on November 12 is of great concern not only to my constituency but to the whole of the country. Not only does it affect the economy, but it affects individuals and businesses.
I would now like to examine a few of the proposed changes. Let us consider the effect of the provision regarding interest deductibility. What does that mean to small businesses and to small corporations, and what will it mean to employee-sharing programs? I would suggest it means a drying up of capital and the possible disappearance of many small businesses. Small businesses are the backbone of our economy because they are Canada's major employer. Small businesses create jobs. Do we want to see business initiative disappear even further? Do we want to deny our young people the right to invest without a reasonable prospect of a return on that investment? More and more young people are reluctant to take over their parents businesses because of tax problems and government red tape, both provincial and federal.
Over the last two or three years I have talked in particular with two businessmen from my constituency who had excel-

December 7, 1981
The Budget-Mr. Neil
lent, well organized and well paying businesses. They had sons who, they thought, would take over their businesses. The opportunity was there for their sons. However, in both instances the sons told their fathers that in no way could they take over the businesses. With all of the risk, all of the problems and all of the government red tape, as well as the bureaucratic procedures that have to be followed, the sons told their fathers they would sooner get jobs elsewhere.
The sons went off to university, got degrees, moved out of the province and are working for major companies. There is a good chance those two businesses will disappear because the young people who have the initiative to make a go of business are not there.
What about interest deductibility that is being denied or restricted to the amount of income from investment? I ask the Minister of Finance what is the situation with respect to a young farmer who borrows money from the bank or the Farm Credit Corporation to buy some land? Generally speaking, because he has payments on machinery and other expenses, he does not really have an income. Is he going to be denied the right to claim the income that he pays on his loan as an expense? The government is not in a position to answer that question. The question has been asked. But that situation is all up in the air.
What about taxation on life insurance? Nearly everyone has life insurance. When one is young, newly married and starting out in life, one buys life insurance to guarantee that one's wife and children will be taken care of if something happens to the breadwinner. It is a secondary consideration that the insurance will create some sort of an estate for the individual on retirement. But what does this budget do? It taxes policyholders every three years on accrued interest and benefits. A few days ago I received a letter from Life Underwriters Association of Canada. The letter gives an example of a purchaser aged 25 who opted for a $25,000 whole life contract with an annual premium of $237.25 paid with after-tax dollars. By choosing to use his dividends to purchase paid up additions, he hoped to offset the ravages of inflation.
I should point out that the death benefit by the time this individual reaches the age of 73 totals $131,575. But under the present regulations proposed in this budget, this individual would have to pay a total of $28,357.43 in income tax on money that he never even saw. He would be paying that $28,357 out of after-tax dollars.
It is almost unbelievable what has been set down in this budget. There are proposed changes in the Small Business Development Bond program, but one has to be almost in bankruptcy before one can qualify for these bonds. I talked to a banker a few days ago and asked whether he was lending any money under the Small Business Development Bond program. He told me that he had been doing so for some time, but that since the budget came down he had not. "Why would I lend money to an individual on the verge of bankruptcy?", he asked me. "There is no government guarantee on the loan. I would be foolish to lend money," he said.
Let me refer to The Globe and Mail issue for Saturday, December 5, 1981. In it, there is an article about Small Business Development Bonds and the Farm Credit Corporation. Hon. members will recall that in the budget some $45 million was set aside to help farmers in need under the Farm Credit Corporation. I want to put on the record part of the article that appeared in last Saturday's The Globe and Mail. It commences:
Despite a flood of applications for the low-interest emergency farm aid promised in the federal budget a month ago, only three farmers across the country have received any money from the program.
The article continues:
Farmers can't apply for the federal money unless they have been turned down for a Small Business Development Bond first, and many banks have not been processing those applications because the federal government has not made clear who is eligible for the bonds, which the budget made available to unincorporated farmers.
On November 12, almost a month ago, the government handed down a budget. But the government does not know who qualifies for the Small Business Development Bonds. It cannot even tell the banks who qualifies. This is unbelievable.
Capital cost allowances have been cut in half for the first year. Has the government considered the effect this has on business, on industry and on farmers? Can the minister not see that this will have a very serious effect on the farm implement manufacturing industry and, on the farm implement dealers around the country? If farmers are restricted by the capital cost allowance, they can claim in the first year, they, along with other businessmen will not buy in the early part of the year. They will wait until the last day of the year. They would be foolish to do otherwise.
What concerns me, however, are the changes with respect to capital gains, particulary as they affect farmers and small business people. Over the years farmers and small business people have traditionally looked upon their business or their farm as the means by which they might have some money when they reach retirement to buy themselves a home and to supplement their old-age security pension. In many cases the only asset that a farmer and a small businessman has when reaching the age of retirement is land, inventory and machinery. When there was no capital gains tax in effect, there was no problem. In 1972 when the capital gains tax was brought into being as a result of the white paper on taxation, the problems began. Even so, a farmer or businessman had the opportunity of purchasing income-averaging certificates and the right to sell land or assets on time and to defer capital gains.
The capital gains tax has had a real effect on land values, and farmers are now faced with substantial capital gains. A farmer who sells his farm usually moves into the city or town and often buys a house, and it takes a pretty good chunk of the money realized on the sale of the farm to pay for that home. What does this budget do? It takes away the right of the person who has a capital gain to invest in income-averaging certificates. It takes away the right of a farmer or a business-
December 7, 1981

man to sell land or assets on terms over a period of time and to defer that income.
What is even worse is the fact that this government is changing the rules in the middle of the taxation year. This is just like running a horse race with the opportunity of deciding when the race is going to end. Obviously you will end the race when your horse is ahead. That is what the government is trying to do by changing the rules in the middle of the taxation year.
There are many farmers and businessmen in this country who, based on the rules, regulations and the law which existed this year, sold their farms and their businesses, anticipating they would be able to purchase income-averaging certificates until the end of March of next year. This opportunity was cut off on November 12.
I talked with one farmer who, as a result of the November 12 budget, will be faced with a tax liability of some $100,000.
1 talked to another farmer who wanted to make arrangements to divide his land among his family to be disposed of on his death. As a result of this budget, he is faced with a tax liability of some $71,000 and he has only three quarters of a section. This is unbelievable.
It seems to me that the very least this government could do is to say to those farmers, businessmen and people who incur a capital gain this year and who have based their sales and plans on the laws that existed, the law will not be changed as of November 12 but will remain the same until the end of the taxation year. That is only fair. In a few minutes I will come to another aspect of the unfairness of this budget.
Having regard to capital gains, I suggest that the minister should set up an all-party committee to consider perhaps the elimination of the capital gains tax, the exemption of capital gains from taxation up to a certain amount, or perhaps the updating of the valuation day. This was promised by the Liberals in the 1979-80 election campaign. The present leader of the Liberal Party in Saskatchewan said at a news conference in Regina, "If you elect a Liberal government, we will update evaluation day." What did the Liberal government do? It took away any benefit the farmer or businessman had when it comes to capital gains.
Such a committee should also give some consideration to the Farm Credit Corporation. The Minister of Agriculture (Mr. Whelan) has complained about money being expensive. The interest rates on loans from the Farm Credit Corporation have increased I believe to 16.25 per cent or 16.75 per cent.
On numerous occasions members of this party, including myself, have suggested to the minister that perhaps one solution to the capital gains situation in relation to farmland would be to allow farmers who have capital gains to invest the capital gain portion of the selling price with the Farm Credit Corporation in the form of bonds. If a farmer did this and undertook to leave the money there for a period of five years, there would be no capital gains tax on that portion. The farmer could be paid interest at the rate of 5 per cent or 6 per cent, and that would not be taxable. The result would be that money would be made
The Budget-Mr. Lang
available to farmers at cheap rates, particularly to young farmers.
I should like to read part of a letter I received the other day from a young farmer. He says:
I am ... 21 years old and have lived on the farm all of my life. I now wish to farm for a living and am now renting three quarters of (a section of) land. I now have an opportunity to buy a half section of land. My father is well established financially and operationally but he is a small farmer and is limited in helping me get established. He is helping by renting his machinery to me and is partly financing me to buy this land. I will be working it off in a construction job and will subsidize my farming operation with this income.
Although all these things are in my favour (my young age, experience of living on the farm and renting land, my father's help with machinery and financing me, my subsidizing the farm) I find that a loan from Farm Credit Corporation at its high interest rate makes repayment possibilities so close and risky it is unsafe and unwise to buy.
He wrote to me and asked, "What can I do?"
1 would suggest to the Minister of Finance that he examine the proposal put forth by this party to allow farmers to put capital gains into the Farm Credit Corporation which would enable it to lend money to young farmers at perhaps 7 per cent or 8 per cent, a rate with which they could live.
Finally I come to the matter of taxation of severance pay. The taxation of severance pay rules apply to all public servants, members of the armed forces and the RCMP or anyone who receives superannuation from the government. Within the last week I have had two telephone calls from people who are government employees, one in the Armed Forces and the other in the RCMP. They face compulsory retirement because of their age. They knew what the tax law was, and they made their arrangements based on that law. The money that they were expecting to put into RRSPs or income-averaging securities never came in time to beat the November 12 budget. What happened is that these individuals are now faced with the fact that their severance pay is completely taxable. One of these people is faced with a tax burden of $7,000 or $8,000. It is absolutely unfair that the rules were changed in midstream. The Minister of Finance and the bureaucrats who worked on this budget never considered the effect of this budget on individual Canadians, the farmers, businessmen and corporations. If they had, they would not have brought in a budget such as this.
It is clear that the budget has caused hardship, confusion and anger across the country. One solution would be for the government to withdraw this budget, but I doubt very much that it would do so.
I suggest that the provisions of this budget should not be implemented until they can be studied by the various concerned committees. If the Minister of Finance is not prepared to do this, I think his only alternative is to resign.


Peter Joseph Lang: Mr. Speaker, in taking part in this debate I will take three approaches; the economy in general, the budget in relation to the economy, and then the international influence on our economy.

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The number one complaint about the economy that I hear from my constituents in Kitchener is not inflation. It is, rather, a combination of feelings and thoughts which I would characterize as uncertainty, fear, anger and hopelessness. This mood of the people is a number one problem. They do not have any confidence or belief that our economic problems can be beaten and, without that confidence, there is less chance that any measure directed at dealing with the economic problems facing us will be accepted as a positive course or that it will have a positive impact.
The Minister of Finance emphasized that point and its importance in his budget speech when he said, "The key which can open the door to our future is a change in our attitudes and expectations. We will move much more quickly to noninflationary growth if the conviction spreads that we are heading back toward stable prices and lower interest rates".
People do not expect miracles. Canadians have tightened their belts, but they do not want to tighten their belts on a rollercoaster that is leading nowhere and from which the weak fall off. Many Canadians perceive this to be the situation, and I will deal with this particular issue during my speech.
Before focusing on the economic problems and courses of action we have taken and can take, I would like to point out that members of the House have identified high interest rates, inflation, unemployment, low productivity and foreign ownership as our major enemies. Unlike most hon. members, many Canadians do not see the need to sacrifice one against the other, and I agree with that view.
The Economic Council of Canada concurred with this in its report of October, 1981, and offered two concrete proposals to bring down inflation while at the same time lowering interest rates and lessening the negative impact on unemployment and economic slowdown.
John Kenneth Galbraith also seems to agree on this point and, further, offers different proposals which I will discuss in more detail later.
Turning now to the economy in general, I would like to discuss what I see to be our approach to the macroeconomic and structural aspects of the Canadian economy. The first area is economic measures which have already been taken outside the budget that serve to set the economic framework in which the budget will operate. I support the principle of a strong national government with the necessary tools to face our economic challenges. I do not support the "community of communities" principle espoused by the opposition. I see this principle leading to the further balkanization of our country, resulting in ten fiefdoms fighting common enemies with uncoordinated and often contradictory strategies.
Canada must have a strong national government to direct, co-ordinate and unify our country's attack on our economic problems. Our government has gone a long way toward this goal through the Constitution, the National Energy Program and the energy agreements between the national government and some provinces. The increased revenues from multinationals and the long-term reduced capital outflow have done much
more than any five budgets in the past to enable us to reduce our deficit, thus easing the pressure on interest rates and inflation, as well as helping to balance our current account deficits over the long-term.
The second area that must be considered is the impact of the United States economic strategy. Any Canadian budget is based, to a large degree, on the estimated economic performance of the United States. The United States owns and controls over 60 per cent of the energy and manufacturing sectors of our economy. As well, it is our largest trading partner, with 70 per cent.
President Reagan now concedes that the United States economy is in a recession that, as he put it, "none of us predicted." Let us consider the dramatic changes in the economic policy in the United States since it was first proposed in the 1980 election campaign. In that campaign, President Reagan set forth his platform of massive tax cuts, massive cuts in social spending as advised by David Stockman, a massive decrease in defence spending, monetary restraint, which was a policy advanced by Paul Volker, a balanced budget by 1984, reduced inflation and strengthening of the economy through supply side economics. Even then, many political and economic observers said that the arithmetic did not add up.
What has happened since the election campaign? President Reagan appointed David Stockman as the director of the Office of Management and Budget, or OMB, in the United States. In this capacity, he has control of the United States budget and is a major influence on United States economic and social strategy. This is similar to the role of the Minister of Finance in Canada.
Mr. Stockman's major problem was reconciling President Reagan's contradictory campaign promises of raising defence spending, cutting income taxes and balancing the budget all at once. Mr. Stockman's supply side approach to economics was premised on faith, as he admitted, not on economic factors or economic studies, but on faith.
When President Reagan's economic platform was put into the OMB computer, Mr. Stockman was shocked by the results. It showed that the United States deficit would be $82 billion in 1982 and $116 billion by 1984, a level unprecedented in peacetime. David Stockman realized that if this occurred, the stockmarket would panic, interest rates would go higher and long-term inflation would be a certainty. Therefore, the OMB computer was reprogrammed by supply side economists. Instead of being given the orthodox assumptions of how the economy would behave, it assumed a fast decline in prices and interest rates and a huge increase in productivity. Even when these irresponsible assumptions were fed into the computer- which the United States economy has since shown not to be valid-the deficit still showed $60 billion annually, which was also unprecedented in peacetime.
President Reagan has also promised to increase defence spending by $1.6 trillion over the next five years. This is more than double the annual United States budget. This increased defence spending has resulted in such a massive deficit that
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there is now excessive monetary restraint, which still leaves unquestionably high interest rates.
David Stockman's most disconcerting admission was that the administration's budget was based on shaky premises which did not add up. He stated:
None of us really understand what's going on with all these numbers. You've got so many different budgets out and so many base lines and such complexity now people are getting from A to B and its not clear how they are getting there. Its not clear how we got there.
This is the man who designed the U.S. budget. Even so, Reagan's economic plan was a political success. It was not a success on Wall Street though. The inflation rate was declining, but Stockman conceded this was due more to good luck with grain harvests and world oil supplies than anything Reagan had done. Stockman's original idea that the dramatic political moves would affect the market's expectations of continued high inflation was wrong. He discussed what had gone wrong in this way:
The defence numbers got out of control and we were doing that whole budget-cutting exercise so frantically. In other words, you were juggling details, pushing people, and going from one session to another, trying to cut housing programs here and rural electric there, and we were doing it so fast we didn't know where we were ending up for sure . .. and it didn't quite mesh. That's what happened. But, you see, for about a month and a half we got away with that because of the novelty of all these budget reductions.


Erik Nielsen: Sounds like U.S. News and World Report.


Peter Joseph Lang: Hon. members opposite may not understand the importance of the impact of the U.S. economy on the Canadian economy, but it is of significant importance. If we want to understand how our budget operates in this economy, we should be aware of what is happening in the United States.
There was nothing new about Reagan's new Republicanism in which the oil companies win and the poor lose. Stockman said it too. He stated:
Power is contingent... The power of these client groups turned out to be stronger than I realized. The client groups know how to make themselves heard. The problem is, unorganized groups can't play this game.
Stockman's final analysis of the whole mess:
Whenever there are great strains or changes in the economic system it tends to generate crackpot theories, which then find their way into the legislative channels.
I have a number of points to make on the fiasco of President Reagan's program on which the U.S. budget director has reported.
First, the importance of Canada gaining control of its own economy through Canadianization with the National Energy Program and through the Foreign Investment Review Agency is underlined. However, the timing of this is also important, as will be discussed later. We must use economic strategy increasingly and tools that target on domestic inflation, interest rates and economic growth.
We cannot assume any positive impact on our economy from the United States. Adjustments in our policy may have to be considered in light of this new information that David
The Budget-Mr. Lang
Stockman has given us since our own budget was outlined. However, it is a good sign that Mr. Stockman has had the courage to tell it like it is, which may generate enough political pressure on President Reagan to get his act together.
The third area I will consider with respect to the economy in general is monetary policy. The responsibility of the Bank of Canada, and I quote Governor Bouey:
-is to discharge its parliamentary mandate, to regulate credit and currency in the best interests of the economic life of the nation.
Until now we have seen monetary policy being used as the bulwark of anti-inflationary methods by most countries of the western industrialized world. Paul Volker of the U.S. Federal Reserve Board has been the pacesetter, and again we have seen the dramatic impact of U.S. measures in Canada. Our interest rates follow theirs like a slow but persistent tracking dog, not getting up to the same peaks or as deep into the valleys but nevertheless always on track.
It is of interest to note Governor Bouey's comments on this in the 1980 annual report of the Bank of Canada. It states this:
Although control over the rate of monetary expansion is an essential component of an effective anti-inflationary policy it should not be the only element. If it is left to carry the whole load it may, to be effective, have to involve such high interest rates as to be very disruptive to the functioning of the economy. Very high interest rates have an uneven impact on the economy, affecting particularly those areas of activity that typically involve the use of large amounts of credit, as for example, house building. The slowing of inflation will be accomplished with much less economic and social strain if policies elsewhere in the economy help the process.
Despite these statements we see that the recent fall in Canadian interest rates has been impeded by the Bank of Canada. This is inconsistent with the bank's own guides to action, the value of the Canadian dollar and the growth in money supply as measured by Ml.
If this continues, it will hold interest rates unnecessarily high and deepen the recession that is already causing widespread lay-offs. The constituents in my riding are well aware of this.
Governor Bouey used to state that a strong dollar meant that we could lower interest rates, but he is now letting our dollar rise relative to all other currencies. The other determinant of interest rate policy has been the growth of the money supply. Instead of letting the money supply grow by up to 4 to 8 per cent per year, the target announced, the Bank of Canada has allowed no growth at all in the past 12 months. In fact, the Ml money supply has declined by $1 billion from October 1980, from $25.2 billion to $24.2 billion.
The Bank of Canada itself has said the minimum to keep our economy growing without inflation is $26 billion, or we are short of $1.8 billion. Hence, the Bank of Canada has the elbow room to ease up on tight money allowing some increase in growth and decreased interest rates. When money is kept this tight, it means that interest rates are higher than necessary and are only exacerbating inflation.
I would now like to consider the budget in relation to the economy. Looking at general economic policy and the budget, we can see a number of adjustments that have validity and can

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The Budget-Mr. Lang
be made to improve our prospects. First, considering restraint, we have seen that there has been excessive monetary restraint and that we can increase our money supply without any inflationary impact, leading to an immediate decrease in pressure on interest rates as well as increased employment and productivity in the short term.
Next I would like to consider expenditure control. I have received numerous representations from my constituents on the importance of expenditure. In this area, the government has a rate of expenditure growth of 16.3 per cent for this fiscal year. Apart from public debt charges, the total dollar amount charges that will be spent are less than the amount forcast in the budget of October, 1980.
The government has had to pay an additional $2 billion in public debt charges because of higher interest rates. It is this increase, not new spending programs, which accounts for the unexpected increase in our expenditures to 16.3 per cent.
The budget sets out a program for steady reduction of the deficit. Financial requirements are expected to decline from $9.8 billion in 1981-82 to $6.6 billion in 1982-83. Most important, financial requirements are less than anticipated in the October 1980 budget. They are $1.2 billion less in 1981-82 and $1.8 billion less in 1982-83.
The second major principle of the budget is equity. There is little question that the major inequity we have in our economy today is high interest rates. The increased revenues from the multinational oil companies as a result of the energy agreement as well as fiscal measures discussed above are in the right direction in terms of alleviating pressure on interest rates.
Aid has been targeted to home owners with mortgages coming due, small businesses and farmers. These groups have borne an inequitable burden of the fight against inflation. My constituents inform me that this aid is not having the desired impact, partly due to poor co-operation from the banks. Further pressure on the banks is required. It is important to note that an excessive increase in bank profits due to higher interest rates is not an equitable situation, as clearly they are not bearing any of the burden in the fight against inflation. In fact, they appear to be profiting from it.
Considering equity further, we have the suggestions of more direct price-cost control advocated by John Kenneth Galbraith. Adding to this adjusted monetary and fiscal policies, as he suggests, enables us to deal with the cost-push component of inflation with considerably less negative impact on interest rates. Furthermore, he points out that decreasing interest rates frees up capital for industrial modernization and economic growth. Just as important, in terms of equity, employment prospects are dramatically improved.
I am disappointed that we have not seen more constructive alternatives put forward by the official opposition. Is it because, in their own self interest to gather power, they are afraid to propose constructive measures that will always have a downside to them and hence lay the opposition open to criticism? Nowhere in this debate have I heard direct price cost
controls being discussed, and despite both their merits and detractions, they have been used with varying degrees of success against cost push inflation since World War II. They have been used by many countries such as the U.S., Britain, Switzerland, West Germany and Canada.
I do not put it forward as a panacea, Mr. Speaker. However, I ask a number of questions. Is it wise to abandon completely the major bulwark of anti-inflationary policy in the past, a policy that has proven by experience in many countries to be at least partially successful. On adopting monetary restraint to deal with excessive total aggregate demand, the new and as yet unproven anti-inflationary theory, should we abandon totally the cost push theories of inflation and direct price cost controls? Is not the inequity of excessive monetary restraint, which cuts aggregate demand through high interest rates, decreasing economic growth and unemployment, greater than the inequity of direct price cost controls? Should we not consider the pros and cons of adding direct price cost controls to monetary and fiscal restraint by taking some of the burden off monetary restraint, which would allow further output and hence higher employment, as well as lower interest rates? By dealing with domestic inflation more directly, we can also lessen the negative impact of U.S. policies. Although, as the Minister of Finance (Mr. MacEachen) pointed out in the budget, we cannot insulate ourselves from the United States, nevertheless, we must face the reality, as enunciated by David Stockman, that unless the United States takes dramatic steps to control defence spending or totally changes its program, both of which are unlikely, the U.S. will continue with stagflation, volatile interest rates and inflationary pressures for some time to come.
Hence, I believe, further consideration of direct price cost controls is essential, as well as being more equitable in terms of dealing with the inequities of high interest rates and high unemployment.
Another aspect of equity in the budget is the new tax reform measures. Again, I have had numerous representations about the closure of tax expenditure loopholes. Many of my constituents feel that, in some measure, the Department of Finance has miscalculated the impact on the economy and individuals. As well, they feel that in addition to catching those who are abusing these tax loopholes, the middle class, the productive sector of our society, those who are working for a living, will be hard hit and that there will be tremendous discouragement through the efforts of working and saving. The Minister of Finance has indicated that appropriate adjustments will be made to the withdrawal of these tax incentives to ensure that the desired impact is obtained. This should also deal with other concerns that have been raised in regard to loss of high risk venture capital necessary to junior Canadian oil and gas companies as well as to new high technology industries.
Now let us consider economic growth, the third major principle of the budget. We have seen that we do not have to wait for inflation to be brought under control before allowing the economy to grow.
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The above measures, past experience, as well as economic theory, allow for growth associated with increased capital formation and productivity, while protecting against inflationary growth. Thus, we can move on with implementing the strategy contained in the budget's document "Economic Development for Canada in the Eighties".
I should like to highlight briefly some of these points. First, the start-up of the megaprojects and other natural resource industries; second, measures for increasing industrial investment, as well as research and development; third, facilitating increased transportation capacity, particularly in export trade expansion in grain, coal, fertilizers and forest products; fourth, increased export trade by implementing the strategy contained in the budget for export development and by lower value of the Canadian dollar relative to other currencies; and fifth, facilitating the education and training of human resources, particularly for application in microelectronics technology and megaprojects.
The last area of consideration is the international structural aspects of our economy. Most Canadians are aware of the large degree of foreign ownership and control of both the energy and non-energy sectors of our economy. In fact, our economy is often referred to as a branch plant economy. The government has recognized this with the Canadianization aspects of the National Energy Program and with the Foreign Investment Review Agency. I believe that the government has also recognized that the pace and timing of gaining further control of our economy is critically important. We must be aware of the problems of capital outflow, current account deficit, decreased foreign investment and retaliatory measures, which are threatened by the U.S. either directly through the General Agreement on Tariffs and Trade or, indirectly, which can result from moving too quickly on re-owning our economy, or which can result from the inappropriate timing of these measures, such as in times of economic stress.
Another aspect in considering structure in the economy is tax reform, which was briefly discussed earlier. The government has introduced measures to increase tax equity. This is welcomed. Again, we must be aware of the timing and pace of these reforms so as not to introduce further stress to an already embattled economy. There are dangers to decreasing business investment, decreasing capital formation, decreasing employment and decreasing incentives for high risk venture capital.
The incentive for risk-taking, increased productivity, and the entrepreneurial spirit must not be hampered. The Minister of Finance has indicated the importance of ensuring a positive impact on the economy with respect to tax reform. He has also indicated an openness to adjustments where further equity can be obtained.
I have already discussed in the House my concern with tax on unrealized accrued income on life insurance savings and the impact on dependants, jobs and business investments that are involved.
Again on the international level, Mr. Speaker, because of the failure of the U.S. approach so far, this places even more
The Budget-Mr. Oberle
pressure on Canada to take a leadership role in a truly equitable fight against inflation. It is not unusual to have economists split on what the economic future holds; but it is unusual when the director of the economic strategy of the major economy in the free world, the United states economy, indicates that his strategy has been a failure. Budget Director, David Stockman, has done exactly this. Again, I am hopeful that this admission in itself will produce changes in the U.S. policy; but as yet we have no evidence of this change. It is incumbent upon Canada to take a leadership role in showing that inflation can be beaten, unemployment reduced and economic growth proceed on the basis of output and productivity.
For the western world to go through a recessionary period, with the tremendous social damage and inequity involved, would be truly devastating, particularly if the battle against inflation is not won. This would seriously endanger any attempts to control inflation in the future. People are hurting in this fight against inflation and they expect positive results for their sacrifice.
United States policies have endangered the probability of positive results. This is yet another impelling reason for Canada to approach inflation in terms of targeting more closely on domestic inflation, as opposed to targeting on inflation as a whole in Canada. There is little we can do about foreign inflation, Mr. Speaker, other than setting an example of how to beat inflation. I believe this can be done with the economic framework we now have and the economic measures discussed above. By recording success in controlling domestic inflation, which again can be recorded with the GNE deflator, as opposed to the CPI, we can instil a sense of confidence in Canadians, and, by our success, give an example to other countries in the western industrialized world.


Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, I could not help but be somewhat amused when I listened to the hon. member for Kitchener (Mr. Lang) speak about the budget, not so much our budget but that of the United States. If I were a Liberal these days, I would probably prefer to speak about Mr. Stockman and his budget much more than I would about the document we are discussing in the House this evening. I wonder whether the hon. member knows that inflation in the United States is 5 per cent below that of our own, that interest rates are 5 per cent below ours, and that all signs point toward the fact that the Americans are indeed in much better control of their economy than we could ever hope to be, particularly after this budget.
I doubt whether there has ever been a budget that was more universally rejected, that was so off the target as this one. It is fair and equitable only in the sense that the devastation is universal. The minister has not forgotten anyone in his compulsory restraint program. Our offices are flooded with mail daily. Our constituents are calling this document cynical, cruel and callous. It was received with disgust, dismay and outright anger. The only theme is a major attack on the private sector and more government intervention in every sphere of economic

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activity. It is a frontal attack on the middle class, on small business and on the farm sectors, and it robs the poor.
There is no better example than the one I must cite where the government, expecting and planning for a massive increase in unemployment, is intending in its budget to impose a measure which will tax severance pay that companies pay the employees they have to lay off.
The message to us is to reduce our expectations. The minister in charge of housing interprets that to mean that we must learn to sit on orange crates again. The ownership of a home or the affordability to rent decent shelter is no longer a social right under the government but a privilege which is conferred on the deserving by their government. Those who have a few dollars to invest are taxed on money they have not yet earned or may never earn. In the past, farmers were allowed to average income from a farm sale, which is the only profit they would have made in their lives. Now they must pay tax on all their income the first year. Even life insurance premiums, unrealized accrued income, will be taxed. They are calling that a closing of the loophole!
Why do they do these things? It is quite obvious to anyone who has sat across from these social engineers for the last ten years that Canadians should not be greedy and save for old age; after all, their government will look after them from cradle to grave! Why should they save money in life insurance? Why should they build up assets or equity in farmland? There is no need to do that because the government looks after them when they are old! It appears that the government, having realized that conventional textbook measures are ineffective in solving the stubborn and chronic problems of inflation, unemployment and high interest rates, has only made the problem worse. But the government has not yet come to understand why these conventional measures are no longer effective. The normal tinkering to stimulate economic growth or to slow it down has not worked. The reason for all this is quite obvious to even the most casual observer. The government is overlooking the facts that private sector activity in the economy is no longer the most dominant factor and that the public sector is not playing by the same rules. For instance, how can we expect to bring down interest rates when the government competes in the marketplace totally unrestrained, as if there were no tomorrow?
The banks are blamed for the fact that thousands of businesses go bankrupt and people lose their homes. Yet any cash the banks may have had to invest in Small Business Development Bonds or mortgages was skimmed off by the latest issue of Canada Savings Bonds which the government guaranteed at 5 per cent above market rates. They are forgetting that the public sector now leads in every sphere of economic activity. Energy prices, indiscriminately set by governments, are a major cost to all industries and all individuals, so are other government-regulated or controlled services such as transportation, communications and postal rates. For example, postal rates have seen an increase of 60 per cent. The public sector continues to lead in wage and salary settlements and spends money as if there were no tomorrow. One of the themes of the
budget is restraint-restraint, indeed! It would not matter how well the lesson contained in the Liberal budget were received or how much the average Canadian restrained his demand on the economy. Unless the government begins to practise what it preaches, things can only get worse. The message in this budget and all indications from the initial response to it indicate that things will get much worse.
The financial wizards of the Liberal government all lament the fact that our productivity has fallen way behind that of other industrial nations, and claim that to be a major contributing factor to our economic ills. I agree, but when was a planned and controlled economy ever productive? I should like the Minister of Finance (Mr. MacEachen) to tell me of one example where a government-controlled economy ever produced anything but inefficiency, waste and shortages, and particularly shortages in people's confidence in themselves. I see nothing in the budget to restore any of the confidence we have already lost, I see no economic renewal in the budget at all.
Last week one of my colleagues said in the House that we could see a move toward a collective farm sector. It was during the question period and it brought spontaneous laughter from the other side. I wonder how much longer farmers will continue to produce cheap food below the cost of production just because the government tells them to. The only sectors in the agricultural industry which are still viable are those that operate under the control of supply management through marketing boards. It is quite apparent that the beef and red meat industries will have to be organized under such a scheme if they are to survive. I am philosophically opposed to marketing boards, but they are the only thing which will keep farmers alive. It is direct control, and it only works domestically. We have only to look at the Milk Marketing Board. We used to sell a lot of cheese to the European Economic Community; we do not any longer because the marketing board has taken care of that. It is not because free enterprise no longer works but because one cannot just intervene a little in the economy, just like one cannot be a little pregnant. Once one starts, one must go all the way. All the way is what tumbles around in the cupboard of the former brain kitchen of the Prime Minister (Mr. Trudeau)-the head of Jim Coutts. I will tell the House what he said. He shed his obligation to secrecy just recently. He is now at large, away from the loony bin. He is so convinced of the virtues of the economic order to which he and his former boss subscribe that he is testing his theories on the public platform. He competed in an election and he made a speech to a Liberal convention. He is not content with government ownership of the energy sector alone, even though modern day socialists no longer believe, as did Karl Marx, that the state must own the tools and machines of production. They think, rightly so, that if we control and own the energy which drives the machines and own and control the resources which are fed through the machine, the rest can well be left to the proletariat. But Jim Coutts wants to go further. He wants the state to own the lumber industry. Would that be good news to lumber people? He wants the high tech business controlled and
December 7, 1981

owned by government, he wants the agricultural sector in some way controlled by the government. Some of the anger which has fed back to our offices was a result of the fact that we overlooked that some Canadians think they have a right to the ownership of their property. The rejection of the budget has something to do with this, because people fear and mistrust those social reformers opposite. They actually thought that Jim Coutts could have his way and could assume complete control and ownership of our farm industry some day! Fortunately 'the people of Spadina opted for a somewhat less radical and dangerous representative of the social democrats. It is said that there is a difference between the Liberals and the social democrats; at least the people of Spadina believe that.
One of the great features of our system is the right of the electorate to receive as much punishment as it keeps asking for. My advice to anyone who has difficulty understanding the theme of the budget is to read it in conjunction with the speech that Jim Coutts delivered to the Liberal convention. That will put it in better focus. It is a giant step forward, a planned economy, not much different from that which operates in the Union of Soviet Socialist Republics. Jim Coutts and his former boss believe that the failure of the Soviets to feed themselves has nothing to do with the way their economic order is arranged but has something to do with the 53 consecutive crop failures experienced in the Soviet Union. The Lord must not be smiling at our friends behind the Iron Curtain.
What this budget represents is an inevitable consequence of 12 years of pursuing the socialist notion of taking from each according to his ability and giving to each according to his need. That is equity, according to the government.
I always like to refer to the professor of political science from New York who tells his students that in order to understand this concept of socialism they just have to look around the classroom and say to the students who receive 95 per cent in tests, that they should give up some of their marks to those who only achieve 55 per cent. That way, everyone would end up with equal passing marks-about 70 per cent or 75 per cent. That seems fair. After adjusting all the scores, everyone would be equal! The question is, would the student who earns 95 per cent work as hard the following year? Would the student who only received 65 per cent work at all? In fact, quite soon all students would score well below the passing grade. Compulsory assignments and severe punishments would be needed in order to raise the grade of even the most capable to the passing level.
Productivity in our economy has long ago fallen below the passing level. Too many people with great ability have registered themselves among the needy. More and more of us are throwing up our hands, no longer able to bear the load being placed on us.
This budget, sir, is the first of the compulsory assignments and the punishment which is needed to raise the passing grade of our activity-except that it is not going to work. The government will just find someone else to blame. The Minister
The Budget-Mr. Oberle
of Finance tells us that it is the banks that are to blame for businesses, large and small, going under, and for the people who are losing their farms and their homes. Oil price increases are the fault of the multinational corporations.
As I said earlier, it is not possible to intervene just a little bit. It is hardly the fault of the oil companies when the government doubles taxes through order in council and then the price of gasoline and heating oil increases, or when the Bank of Canada increases the prime lending rate. If a government adopts these measures, then it must go all the way and tax excessive profits. That is what the NDP wants to do. It wants to bring in a windfall profits tax. If bank profits can be legislated, then it may be necessary to bring in such a measure.
Jim Coutts wants to go further, however. He wants more nationalization in order to solve the problem completely. I suppose bank employees would have nothing to lose-they would get 17 weeks maternity leave, indexed pensions and all the perks which fall under the security blanket that comes with a public service job. Of course, the banks would not register any more profit and therefore would not have any money to lend to small business in order to create new jobs. But without the need to be accountable to those greedy shareholders, the banks, the oil companies or any other government enterprise would undoubtedly take up the slack by hiring a lot of new people themselves, thereby making life easier for everyone else.
Sir, it is not going to work. I will tell you what the theme of this budget is-it is the same as every other budget since our Prime Minister (Mr. Trudeau) proclaimed his new society.
As Churchill said 40 years ago, you can remove the inherent vice of free enterprise and capitalism, which is the unequal distribution of blessings, and replace it with the inherent virtue of socialism, which is the equal distribution of misery. Even that only works in theory because there really is no misery for those who are on the inside. The socialists always look after themselves.
I sometimes wonder what Liberal members tell their constituents when they go home to lecture them and explain why and how ordinary people should restrain their demands on the economy. I am sure some constituents must ask, "What have you done lately to cut back your own demands, or the government's? What about some of the friends of the party or the higher echelons of the bureaucracy?" What about Mr. Cam-peau, here in Ottawa? He is a builder-is he suffering? Of course not, because the Liberals are looking after him. What about Mr. Bouey, for instance, although one should be fair to him. After all, he only accepted a 9 per cent increase in his salary, although he chastises everyone else for taking as much as 10 per cent or even 12 per cent. Mr. Bouey is one of these neat flow chart people who work with percentages. Such people dominate the public service these days-the social engineers who figure everything in percentages. He got a 9 per cent increase in his salary. This amounted to $9,000 and brought his salary to $104,000 per year. The average Canadian earning $15,000 or $20,000 and asking for a 10 per cent increase will get only $2,000 and end with $22,000 per year.
13808


Some hon. Members:: Hear, hear!
[ Translation]


Hon. Charles Lapointe (Minister of State (Small Businesses and Tourism)):: Mr. Speaker, I am glad to take part in this debate, first because it will give me the opportunity to point out the importance of the small business sector for the Canadian economy, and second, because the government has recognized this importance and taken action to promote the development of Canadian small businesses both in the past and in this budget.
Detailed analysis of this budget shows that it contains several provisions to assist small businesses. First, it relies on the many incentives developed by the government in the past to assist small businesses. Second, it contains a series of new measures which will be especially beneficial to small businesses, and finally, it promotes a climate which will promote the development of small and large businesses in Canada.
But what about the base which had already been established? Before the budget, certain tax measures were designed especially for small businesses. Nothing has changed in this regard. These measures are too numerous to list them all, but I would like to mention some of the most important. As everyone knows, there is, of course, the reduced income tax rate for small businesses, which is about 21 per cent lower than that applied to large businesses. This provision means a loss in revenue of $1 billion a year for the Government of Canada.
December 7, 1981


Mr. Kempling:: Read your mail.


Mr. Lewis:: It is the small business desperation bond, and you know it.


Charles Lapointe: I hear the hon. members opposite, who are rarely in great numbers in the House, say that this is nonsense. Perhaps it is nonsense in their opinion to help

December 7, 1981
The Budget-Mr. C. Lapointe
businesses that are experiencing financial hardship, and nonsense also to allow unincorporated businesses to be eligible for this program, because they believe that to assist the Canadian economy only the richer segments of our society need be helped.
Under the Small Business Development Bond program, the Government of Canada will be spending an additional $82 million.
Another provision affecting small business and contributing to the development of this sector, which is one of the objectives of this budget, is the two-year extension on the business corporate surtax. But, as the Minister of Finance stated in his budget speech, small businesses will be exempt from the surtax payable on that part of their income which is eligible for the reduced small business tax rate. This will allow small businesses to save approximately $100 million in income tax over the next two years.
As of 1982, the employer's weekly contribution to the unemployment insurance plan will be reduced by about 9 per cent, which means that the employer's contribution will go down from $2.52 to $2.31. That too, Mr. Speaker, is a measure that the small business community had requested. I think that will allow small businesses to save approximately $75 million a year.
The provisions announced by the Minister of Finance in his budget speech with respect to small manufacturers will also help the small business community. The federal tax rate on income from manufacturing and processing operations will decrease from 15 to 10 per cent. Under the existing tax provisions, a small business had to separate its eligible manufacturing operations income from all its other income using complicated calculations if its total yearly income was above $50,000. Previously, a corporation which was mainly involved in manufacturing and whose total income did not exceed $50,000 did not have to make these calculations. Now, the budget proposes that a small business which is mainly involved in manufacturing should no longer have to separate its income derived from the manufacturing side of its operation from other revenues to benefit from the reduced tax rates which apply to manufacturing revenues. I think that in addition to reducing paperwork, this measure will make it possible once again for small businesses involved in processing and manufacturing to benefit from a still more beneficial system.
One of the major themes of this budget is equity. It is the underlying theme of the changes made to the manner in which dividends from private businesses are treated. Before this budget, the owner of a private business owned by Canadian interests could be paid by his business an income comparable to that of an executive, without having to pay quite as much in income tax. For instance, the owner of a private corporation could be paid up to $30,000 on which he had to pay only the tax rate applicable to small businesses, that is 25 per cent. The employees and unincorporated businessmen paid comparable incomes were subject to an average tax rate of 35 per cent.
As I indicated earlier, one of the main objectives of the government was to develop a more equitable tax system. That
is why some provisions in the budget are designed to eliminate a certain imbalance. They will make sure that the decision as to whether a business should be incorporated is based on the financial benefits the business stands to gain rather than on mere fiscal considerations. They will make sure also that the tax deductions granted to small businesses are directed to those which are in full expansion and need them most. There is a third reason, Mr. Speaker, why this budget is beneficial to small businesses. It will foster an economic climate in which all Canadian businesses will begin to thrive as the worldwide recession dies down. I mean, of course, the considerable effort which the government has made in this budget to reduce its deficits and its borrowings. As my colleague the Minister of Finance suggested, this effort will alleviate the pressures exerted on the loan markets, reduce the interest rates and leave more room for borrowers seeking funds. The budget is a step in the right direction for this government which is constantly trying to slow down the growth of its spending, leave more room for the private sector and promote entrepreneurship, while assuming its responsibility for leadership and assistance.
I did not mention the many other means which are available to provide financial assistance to small businesses. I am thinking of the Federal Business Development Bank with a lending and borrowing capability of over $2 billion, which helps out more than 40,000 businesses. I am thinking also of the risk capital of the Federal Business Development Bank which has invested more than 40 million dollars in over 150 manufacturing companies in this country. In addition, there is, as you know, Mr. Speaker, the Small Businesses Loans Act pursuant to which 1.4 billion loans are guaranteed by the Canadian government to 24,000 businesses. I could mention many more programs, such as the National Research Council Programs, the Industrial Research Assistance Program, the Small Business Development Program, the Regional Economic Expansion Department program, the Suppliers' Establishment Funds, the Supply and Services Department Program.
Mr. Speaker, considering this wide range of opportunities, it is obvious that over the last few years and even now in the present budget the government has done its very best to aid small businesses and has promoted original policies, as I mentioned earlier, when I compared our fiscal system to those of countries similar to our own. The present budget respects this commitment and is an efficient way of helping small Canadian businesses build a better future for themselves.
I would like to remind hon. members, as the Minister of Finance has mentioned several times in this House, that he is ready to listen to proposals by groups of people and Members of Parliament in order to determine whether or not in some cases certain adjustments may be justified for the sake of equity. As Minister of State for Small Businesses, Mr. Speaker, I shall and do live up to my responsibilities to see to it that all the concerns of small businessmen are brought to the attention of my cabinet colleagues.
December 7, 1981

Mr. Speaker, I would like to take advantage of the few minutes I have left to address another topic which also concerns and affects small businesses, more particularly in Ontario and Quebec. I would like to deal for awhile with the new Canadian policy on behalf of the shoe industry. I would like to quote from a paper which was presented or read at the Quebec National Assembly, during the presentation of the Parizeau Budget in 1979:
The traditional textile, clothing, shoe and furniture industries which in 1977 had lost 20,000 jobs and were in some cases threatened with total elimination, were saved by the adoption of radical policies. The federal government agreed to pursue a strict and responsible policy of quota imposition for three to four years to protect three of those industries. And the Quebec government removed the sales tax from those four areas for a year ... it is most important that we agree on the objective. For three years the governments will give an exceptional assistance to those traditional industries. We shall do everything possible to reach a specific objective, which is to make them competitive within three years with their American and Western European counterparts. We will not ask them to compete with Taiwan or Korea. That would not be possible. But I must give those industries the solemn warning that, at the end of those three years, they cannot expect an extension of this exceptional government help. It is up to them to undertake right now the work of reorganization and modernization which is necessary to their survival.
Mr. Speaker, this speech by the Minister of Finance in Quebec is exactly what we have sought to implement after four years of protective measures on behalf of the shoe industry.
Total imports during the period from 1977 to 1981 increased by 9.2 million pairs of footwear compared with 1975. More than 80 per cent of that disastrous increase consisted of footwear made of materials other than leather. Of the other 20 per cent, leather footwear, more than two thirds came from both developed and state-trading countries. So, a cursory look at those figures prove clearly, Mr. Speaker, that the sad state of affairs with regard to low-production-cost countries is caused by a sharp increase in footwear imports other than leather and cannot be blamed on increased imports of leather footwear from those countries. Since 1977, the situation has changed considerably. For instance, the value of the Canadian dollar is no longer what it was and Canadian producers have improved their productivity, thanks not only to the steps taken by the Quebec government, as mentioned by the Quebec Minister of Industry and Tourism, but also to the restructuration program of the government of Canada.
The Canadian leather and man-made fabric shoe industry is protected, moreover, by a 24.4 per cent rate of value for duty advances in the case of nine countries, including Italy and Brazil; in addition, it is still possible to resort to the normal protection of compensatory rights and anti-dumping rules as provided for in federal legislation. The Anti-dumping Tribunal, which made the study of the industry on which our new policy is based, indicates on page 112 of its report that it is now satisfied that the Canadian footwear industry is now able to compete with the imports from developing economies and state-trading countries.
In 1980, Canadian producers had over 70 per cent of the domestic leather footwear market, industrialized countries 20 per cent and underdeveloped countries 10 per cent. Among the latter, Brazil represented almost half the imports. With regard
The Budget-Mr. C. Lapointe
to that country, the Tribunal recognizes in its report and concludes on page 113 that, "the necessity of special measures of protection in the case of Brazil is somewhat less urgent as imports from that source are subjected to a 50 per cent advance for duty". And this, Mr. Speaker, in addition to the 24.4 per cent rate on any imported footwear. Again, as far as Brazil is concerned, Mr. Speaker, two weeks ago, it levied a 15 per cent export tax on that footwear. Now considering the small share of the leather footwear market held by other underdeveloped countries, you will agree, Mr. Speaker, that it would be almost impossible to justify any unilateral action to our trade partners, even if there were some international mechanisms such as, for example, the multi-fiber agreement on textile and clothing now in effect. It would not be possible at all to justify such an exception under our GATT agreements.
As for footwear other than leather on which we imposed a quota, the Tribunal concluded also, on page 123, that the greater part of the increase in imports from underdeveloped countries would be absorbed by footwear other than leather, and that Canadian manufacturers especially would suffer. That prejudice could be ascribed to substitution.
Now, the decision of the government of Canada to impose quotas on footwear other than leather is based on real statistics and on the findings of the Anti-dumping Tribunal. In addition, it must also be kept in mind that if we had imposed quotas on leather footwear, which would have affected mostly our trading partners of the European Economic Community and the United States, it is quite obvious that many Quebec and Ontario manufacturers of leather footwear already exporting much of their production to those markets, would also have been subjected to retaliatory measures and would have been unable to export their footwear to those markets. With this new restructuration and modernization program for which we have earmarked $17 million to bring special assistance to footwear manufacturers so they will expand their export activities by closing our markets to all but leather footwear, I think we can hope that the workers and the manufacturers will be able to get a handle on the new situation and develop a much more dynamic and much more competitive footwear industry. In any event, before the end of the week my colleague the Minister of Industry, Trade and Commerce (Mr. Gray), the Minister of State (Finance) (Mr. Bussieres) and myself will meet with the footwear manufacturers and the spokesmen for the labour force in that industry.
I wanted to take the opportunity offered in this speech to clear up the situation on that subject because we have been getting political flak from the government of Quebec which has been saying that the footwear industry will go belly up. I also wanted to demonstrate the originality of our tax system for small Canadian businesses with all the new measures contained in the budget we are studying now, and that small Canadian businesses will continue to be the backbone of our economic development and that, for the government of Canada, it will remain the most important sector of our economy.

December 7, 1981
The Budget-Mr. Althouse


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, before this budget was brought down, I had a very modest list of items which I had hoped would be in it. These items applied to agriculture, which is my area of concern. I thought we might see some much needed improvement in funding for stabilization programs in the agricultural community.
During this International Year of the Disabled Persons, I hoped that there would be at least a minor bow in recognition of that fact by providing for some equality in the application of the Income Tax Act for people who are mentally handicapped. There are families of mentally handicapped people who do not have the same kind of tax options which are available to families of physically disabled people.
I had sent letters to the various ministers involved in the hope that there would be some recognition of this situation during this year of the disabled and that it would be corrected. It would not cost the people of Canada very much and it would, in fact, give some recognition to those families with mentally disabled people who are sometimes faced with a great financial cost.
I had hoped that there would be some increased funding to the Farm Credit Corporation through the introduction of a means of recycling the funds which go from one farming generation to the next. I would have liked to have seen a method whereby the farmer who was selling the farm would be allowed to reinvest his money in the Farm Credit Corporation bond at a reduced tax rate to encourage the recycling of money which, in turn, would be more available since the Farm Credit Corporation at the present time supplies only between 5 per cent and 10 per cent of the required funds for refinancing.
I had also hoped that some means would be provided in this budget to allow the Farm Credit Corporation to provide for additional sources of funding, either from private or government sources. With the exception of $45 million, that too did not happen.
Since we have just experienced a fairly heavy tax regime under the National Energy Program and the energy agreements between the federal government and the producing provinces, I had hoped that the tax increases would not be too great. There are some sectors of our economy, such as the banks and oil companies which are making tremendous profits from the high interest rates, and I would like to have seen a tax leveled on these windfall profits. That did not happen either.
I thought that it might have been time for the recognition of the workers who are not working under a union contract and have to supply most of their own equipment for their trade, whether it be carpentry, plumbing or farming; that there would be some allowance for them to write off part of their tools as part of their jobs. That was not in the budget either.
One of the main farm planks in the Liberal Party campaign during the last election was a change in the valuation day for farmland from the end of 1971 to the end of 1974. This was
one of the few planks in the Liberal Party platform, and I was extremely distressed to see that it was not included in the budget. Since there was no change to the valuation day, no changes in the Farm Credit Corporation, no monies for the stabilization program I was beginning to wonder where the Minister of Agriculture (Mr. Whelan) had been when the proposals for the budget were being drawn up. Those are some of the things which were not provided for in the budget.
What we did get were changes to the income-averaging annuity program which were not particularly welcomed in the farming community. I believe that these changes were aimed more at the professional athletes, perhaps entertainers and presidents of large corporations who receive large sums of money on the termination of contracts. In these areas the changes to the income-averaging annuity program contract may have some element of fairness because these people are not at the end of their careers. Most of them will again take jobs and be part of the economy. However, as this provision applies to retiring farmers, I maintain that the effect, on balance, is unfair.
The provision for income-averaging annuity has been beneficial to farmers since it first came into effect in 1972 because it was offered in recognition of the fact that while farmers may not be producing very much in the way of income tax payments during their careers-I will elaborate on this point later-they do find themselves facing retirement with fairly large sums of money in some cases, and this income-averaging annuity contract allowed the farmer to average his income on a forwarding basis, thus spreading the effects of that income, which had been accumulated sometimes up to 50 years, over the ensuing five to 10 years. This protection is not longer available to the farmer.
The effective elimination of the IAAC, if we can use that short term, will probably produce a tendency for farmers to sell less land and in smaller parcels, which will not make it any easier for the rest of the community continuing to farm. With this tendency, it also means that these sales will take place over a number of years in an effort to effect the same kind of tax averaging which was available under the IAAC program. The more worrisome effects of the program's elimination are the different reactions to this from the operators of small and medium-sized farms as opposed to the reaction from farmers with larger operations. The farmers who sold their farms in 1981 with the understanding that they would be able to use the income averaging annuity program to spread their tax burden are especially affected by this budget. These people were caught on November 12. I have received phone calls from several who have been caught in the unhealthy position of having sold their land under an agreement of sale in order to spread the income over the next four or five years. As of budget date, they will have to consider all of the sale as income this year, even though they will not receive the income until five years down the road. They will have to pay tax on that income.
December 7, 1981

Most of those who called face the prospect of having to borrow money to pay the tax. They will have no money left to purchase a house or even to pay rent on one so that they will have a place to live in their retirement years. This is simply because of the manner in which this program has been implemented.
Another change in the income tax as it affects farmers is in the capital gains reserve. As of November 12, after the budget, sellers of land will no longer be able to average the payment of income tax on capital gains when the purchaser makes payment to the vendor over a number of years. I discussed some of the problems by using the example of the man who had sold his land and will receive payments over five years who finds himself in the unenviable position of having no money to pay his tax and no money for the next year and a half of his retirement.
This kind of financing will probably be wiped out. About 10 per cent of the sales that now take place are financed on vendor-purchase agreements. That may not sound like much, but I remind hon. members the Farm Credit Corporation finances less than 10 per cent of the land transactions that take place in this country. Therefore, we are talking about a program that will affect more land transactions than the Farm Credit Corporation and will affect them very negatively.
The budget tends to create a regressive tax system in relation to capital gains rollovers when parents transfer farmland to children. The Minister of Agricuture takes great joy in pointing out that the rollover provision is still there, and it is. Flowever, the effect will be different, depending on the income and the size of the farming operation that is being rolled over.
Two or three accountants have brought examples which indicate that the small or medium-sized farmer, because he has no other source of income to retire with, is forced to sell his small holding at full or nearly full market value. This means he will be paying capital gains tax on that property. It also means that his sons, daughters or grandchildren will have to pay full or nearly full market value for that property. At today's interest rates, it creates a very difficult situation.
The larger operation, because of being able to generate more cash flow and higher net incomes, finds it possible to turn over some, if not all, of the land at the V-day value. On the larger operations we can see where the rollover will apply, and no capital gains tax collected. The next generation will not be forced to pay as high a price for the total assets for which they will be working.
The net result shoult not be too surprising because it is a consistent theme of this budget. The net result is a regressive tax, a tax that falls most heavily on the lower-income people, those with less assets than the amount of tax that falls on those with more assets and higher incomes.
Other changes to the tax laws as they affect farmers in this budget have to do with the Small Business Bond and Small Business Development Bond. The Small Business Development Bonds have been extended. We have a new instrument, the
The Budget-Mr. Althouse
small business bond, which is now available for unincorporated farms, small businesses, fishermen, and will be available as of November 12. The budget states it is available for farms or businesses in financial difficulty. The program may be used after December 31 until the end of 1982. That is what the budget states.
A week ago last Friday I asked the Minister of Agriculture when the regulations and description as to who would be eligible for these bonds would be published. He told me they would be available next week. A week has passed. To date the banks do not have any guidelines as to who is eligible for the small business bond and who is not. Farmers in dire straits have been contacting their bankers. Some will have their land placed in receivership and in the hands of the sheriff before the end of this month, and to date there is still no action on this aspect of the budget. We have the small business bond promised in the budget, but no action. As long as there is no description of who is eligible and who is not, the proposal and offer are of no use to anyone.
The last change in the budget to affect farmers is the changes to the capital cost allowance. To give some idea of the effect, I will run through a brief description of a possible purchase.
Suppose a farmer purchases a $80,000 used tractor and receives $50,000 for his trade-in. The difference he must pay is $30,000. Prior to the budget, he would have shown an acquisition of $80,000 and a disposal of $50,000 in his Class 10 assets on his capital cost schedules, which depreciates at 30 per cent. In other words, from this transaction he would gain $9,000 of capital cost allowance, 30 per cent of $30,000.
After the budget, he would show an acquisition of $80,000. However, he can only depreciate the asset at the new rate of 15 per cent, which would be equivalent to $12,000. In addition, he would have to deduct his trade-in at 30 per cent of $50,000, which equals $15,000. Therefore, he has lost the difference between $15,000 and $12,000, or $3,000 of capital cost allowance because of the new budget.
The loss is even worse than that. Prior to the budget he could show an increase of $9,000. Now he has to show an additional $3,000. His loss in relation to the capital cost allowance schedule is $12,000. Assuming a 35 per cent tax bracket, it is costing the farmer $4,200 in tax to trade one tractor in for another.
I do not think there is very much incentive for a farmer to trade in his equipment. There is no incentive to take the equipment off the lots of dealers. Dealer inventories are increasing at a rapid rate. At today's interest rates, this will have a very negative effect on those small businessmen supplying farm equipment.
Prior to the budget we were seeing a tremendous number of lay-offs in the farm equipment Field. Factories are closing and workers are being laid off right across the country. International Harvester, one of the largest farm equipment manufacturers, now faces the prospect of going into receivership. Massey-Ferguson faced the same problem last year. White

December 7, 1981
The Budget-Mr. Althouse
Farm Equipment was refinanced, went bankrupt and was revitalized over the past year. This aspect of the budget will worsen the prospects for the farm equipment industry and employment in that industry. I think that when one looks at the situation in agriculture, had the minister been able to convince the Minister of Finance (Mr. MacEachen) of the true state of affairs in agriculture, I am sure it would not have received such short shrift in the budget. There must be some understanding on the government side that there is a lot of money in agriculture or that there is some ability to pay higher taxes, because the government certainly did levy higher taxes on the farm sector. I think this is a misconception. I would refer government members to a very small booklet entitled "Agricultural Facts". It does not take long to read. It has all the data laid out in very simple terms. In that booklet it shows that net farm incomes in Canada in 1973 were $3.3 billion. It was the same in 1980.
Over the same period of time, output in agriculture increased two and a half times, and yet incomes remained virtually the same. If one converts the income in 1980 to 1973 dollars, the net income has decreased almost by half. It is $1.74 billion instead of $3.3 billion. Prospects for 1981 are supposed to be slightly better. They are expecting that it may hit $4 billion this year, an increase of about 12 or 15 per cent. The outlook for 1982 is that it will decrease to $3.4 billion.
While net incomes in agriculture have deteriorated, if one takes into consideration the inflationary effects, productivity has still increased. Even using 1973 dollars, productivity has increased. Agriculture is one of the few sectors of this economy that is more than pulling its weight in terms of productivity versus income received. The thanks they get for it are extra taxes. 1 do not think that is acceptable in terms of fighting inflation; it is not acceptable in terms of equity of taxation. It makes absolutely no sense to me, Mr. Speaker.
When we look at the effects of the budget on agriculture, we have to ask ourselves why the Minister of Finance has introduced this kind of budget. He has told us that he is trying to fight inflation. How is he fighting inflation? By reducing government deficits, he says. He is hoping to increase taxes and decrease spending, thereby reducing the deficit. The minister's economic theory is that because he is doing these things, ' inflation will drop. I think that is an invalid theory.
I should like to spend a few moments now reviewing some of the reasons for reaching this conclusion. I will simply go back to the historic statistics and try to find some rationale for that kind of theory. If the theory has any legitimacy, it should show up in the statistics over the past.
When we go back to the early 1930s, we see the 1930 to 1935 federal budgets had six straight deficits, and not just little deficits but deficits equivalent to $25 billion in today's dollars. What happened to the price level during this time when government spending was in a whirlwind state? Price levels dropped by 26 per cent over that six-year period. They dropped, while government deficits were at an all-time high.
Right after that period during the Second World War, government budget deficits were equivalent to $75 billion in today's dollars. The price level rose about one per cent a year. It is not true that the elimination of budget deficits ends inflation. There was no deficit in 1973. The federal government had a surplus. Along with the surplus budget, in 1973 there also happened to have been the highest rate of inflation we have had for the past 20 years. In 1974 we followed it with an even larger surplus; and the inflation rate rose even higher. I do not see any correlation between budgets and inflation, deficits and inflation.
The other reason for the kind of fiscal policy that this government is embarking upon is to get rid of the burden of the national debt. Today it stands at roughly $100 billion. This year the federal government will have to pay about $15 billion in interest on that debt. Approximately one fifth of the debt is held by the Bank of Canada, which is wholly government-owned and, each year, hands over to the government all the money that it takes at the end of the year, over and above that amount. Of the remaining $80 billion in bonds, $70 billion is held by Canadians. It remains in the country. The government paid them $11 billion, but it is spent within the country.
I maintain that as long as the money is used to produce productive assets, it is an asset to the economy and not a liability. Spending is considered that way even by the economists to my right. As long as it is in the private sector, then in economic theory I see no reason that it should make any difference if it is spent in the public sector, so long as it is spent on productive assets.
In the end, when one finishes doing the arithmetic, one is left with about $9 billion of the $100 billion, $8 billion of which Canadian bondholders had left after tax and was not lost to Canada; and they are fellow Canadians. The real burden of the debt to Canada was about $1 billion which is the approximate cost of maintaining the $8 to $10 billion that is held by foreigners.
That money, which had to be raised from the people of Canada and paid out, went to foreigners. The real burden of that so-called burdensome debt to the country is the amount that we paid to foreigners. We need an economic policy that attempts to gain more control of our economy. We must concentrate more in the area of ordinary Canadians to overcome any so-called burden, thus improving the economy to the point that it would begin to fight inflation with a will.
In closing, I repeat that I see the agricultural sector as perhaps the only sector that is producing more than it takes from the economy. Because it has been doing that, it has had to suffer low net incomes, family incomes that are as low as $8,000 to $12,000 during the period of time when factory workers are earning $12,000 to $15,000. It has had to borrow money in order to expand its productive plants. Because it has had to do this, the amount of money that is owed by farm people has increased. Because of that, when we get into a period of time such as at present when interest rates are extremely high, it is especially burdensome to the agricultural sector.

This budget did not attack the problem of high interest rates in any real and meaningful way. It provided for a small panacea in the form of the small business bond. Those small business bonds have not been activated in any real sense of the word. Until that happens, there will be absolutely no help for the Canadian agricultural sector. It has been a totally negative kind of budget, a regressive budget and one which I think we should vote against. The minister should start over and discuss with the agricultural people of Canada the kind of things that are required in order for them to stay in business. The minister should discuss with the home owners of this country the kind of programs they need to maintain their homes. The minister should discuss with the unemployed the kinds of programs they need in order to get them working again. It is not time to cut back nor to reduce spending. It is time to create employment to get this economy working at close to full capacity again, instead of at a 60 to 80 per cent capacity.


Mr. Irenee Pelletier (Sherbrooke):: Mr. Speaker, I am pleased to have the opportunity to say a few words in this budget debate and, because of allocation of time, I should like first to inform my colleagues of the economic conditions which now prevail in the Sherbrooke area. In the last few years, the Department of Regional Economic Expansion opened a regional office in Sherbrooke where business people of the area could apply for assistance given to small and middle-sized businesses in the queen city of the Eastern Townships. For our area, the opening of this office was a significant step because in the past we had to send all our applications to Montreal. I have indicated to this House, more than once, that we have several institutions of higher learning in our area, namely, Sherbrooke University, Bishop University, the College Champlain, the Sherbrooke College and several other specialized schools and every year too large a number of our young people must leave the Eastern Townships area to go to Montreal or to other places in Quebec as well as outside Quebec, to find work.
This means that we educate them but they go and find jobs somewhere else. This is a very sad situation which should be corrected at once and which should be given the highest priority. This is a collective responsibility which involves the federal government, the provincial government, municipalities, intermediary bodies, the business community and all the people of the Estrie area. We can no longer tolerate this brain drain. The greatest wealth of our area are its people and among them the most skilled are leaving. These young people are a significant asset for our development but because of our industrial structure, because of the lack of investments, and because also of the lukewarm interest shown by governments, including the federal government, it is with sadness that we see a large number of our young people going to other places in Quebec and in Canada. Several steps were taken the last year,
The Budget-Mr. Pelletier
and periodically various people take counsel together with regard to the ways and means of co-ordinating the efforts of groups and individuals towards the economic development of Sherbrooke and the Eastern Townships.
About a month ago, a study commissioned by the City of Sherbrooke to a Montreal firm on the Sherbrooke economy, showed that its economic conditions, despite obvious shortcomings, had still a significant potential. This new report considers several aspects of the economic conditions of our area and puts forward suggestions to correct the present situation. Following a rather accurate analysis of the economy of the area, of its healthy and not-so-healthy sectors, in the last chapters of the report possible action and an over-all strategy are suggested foFthe forthcoming years. I sincerely hope that this report will be considered and that as soon as possible we shall come up with a policy that will make it possible to speed up the economic development of that area. For the past decade, studies about Sherbrooke have been undertaken by a variety of people: provincial governments, federal government, university regional agencies and firms of all kinds. I humbly suggest that it is about time-and according to the last report the willingness and the dynamics are there-to launch as of now the economic renewal of the area.
Several opportunities are open to us and personally I think that our approach should be based on a co-ordination of efforts at all levels of government. I sincerely believe that we have available to us several tools which should allow us to make significant progress in the economic development of Sherbrooke. I am thinking in particular of the fact that Sherbrooke University was designated by the federal government as a first-rate centre in electronics. The scientists at Sherbrooke University in electronics have been among the pioneers in this field and this honour with the grants connected to it, should make it possible for the industry of the area to take advantage of the knowledge and the opportunities for development in that leading industry. But there again we will have to make sure that what is done in our area will be of assistance to the small and middle-sized businesses. The University is willing to dispense its knowledge to all those who would like to take advantage of it, and I think that if we could further increase an already well established co-operation between the University and the local economic agents, this could have an extremely positive impact on our area.
It is in the best interests of the economy-oriented organizations in our area to co-ordinate their efforts. Permanent coordination and co-operation should be arranged between the various economic components in the Sherbrooke area. We certainly are not short of economic agencies and organizations to do considerable work. What we need is a co-ordination of our efforts.
Most of our regional economy-oriented organizations have developed plans of action and intervention for the area. We must absolutely make sure that there is a follow-up to our

December 7, 1981
The Budget-Mr. Pelletier
interventions and we must always be careful that what has been gained is thriving and stable. Moreover, not only the new industries that wish to settle in our area but our existing businesses must maintain frequent and numerous contacts so that businessmen, governments at all levels, intermediate bodies, the industrial commission and all organizations involved in economic promotion in our area will work together.
It is impossible during this debate to deal with all the aspects of the question and all the important opportunities available in our area. I will come back to that later. However, for the time being, let me remind you that we have a reasonably progressive service sector, some rather important organizations and the labour force we need to undertake the economic renewal of the area. The authors of the report which I quoted a while ago stated the following in the first paragraph of their document:
Economic growth is for the most part based on the confidence of the business community in its future. Several leaders should not hesitate to assert themselves and to exercise their leadership. The basis of Sherbrooke's economy-
-in spite of some deficiencies however-
-is healthy, in spite of difficult economic conditions. Sherbrooke's economy has at present various assets which help generate significant advantages. The people of Sherbrooke only have to take the opportunities. However important the strategy is, it remains that the determination and confidence of the business community to attain the economic future which is within the reach of their ambitions and their opportunities are also essential.
I shall simply add that I intend to devote all my energy to the development of the area. I urge all parties concerned to support the efforts of all those men and women who strive to improve the current economic situation. On the federal government level, I intend to make use of all available opportunities and openings to help our region, so that we may, to the extent of our ability, efforts and possibilities, bring to Sherbrooke the continuing economic development it has been seeking for such a long time.
On June 19 last, Mr. Speaker, the Minister of Industry, Trade and Commerce (Mr. Gray) and the Minister of Regional Economic Expansion (Mr. De Bane) announced the new textile and clothing policy for Canada. The ministers indicated that the government of Canada had started negotiations aimed at extending the restrictive agreements with our suppliers. This textile policy for Canada, I must point out, was favourably received at the time by both industry and workers. Six months after this new policy was announced, we can say that all in all, it has helped the industry significantly, but that some areas, especially the glove industry, have been affected, and the Minister of Industry, Trade and Commerce will have to look into this particular problem. Generally speaking, we can say that the textile industry now is one segment of our economy that is doing fairly well. I should like however, to return to that announcement made last June which reads in part as follows:
The government intends to propose a readjustment program designed to ensure that the Canadian textile and clothing industry is viable and competitive
and to revitalize the economy of communities that are most vulnerable to foreign competition.
The minister announced, and I quote:
A new program for which more than $250 million has been earmarked by the government over the next five years will be set up for the following purposes:
1-	To create new jobs in the communities affected by industrial readjustment;
2-	To make it possible for displaced workers to benefit from new job opportunities; and
3-	To promote the modernization of viable businesses in the textile and clothing industry.
These $250 million-if I understood well the announcement made last June-will be spent essentially in Canadian communities with textile and clothing plants, therefore mostly in Quebec. Approximately a month ago, more specifically on October 26 last, the Prime Minister announced the creation of the Canadian Industrial Renewal Board, the terms of reference of which included, and 1 quote:
To promote the restructuration, regrouping and modernization of our textile and clothing industries, renew the economic basis of communities which depend largely on these industries and are therefore more likely to be adversely affected by the increasingly freer trade of these products, and to help the workers affected by these changes.
Mr. Speaker, this announcement is of tremendous importance for Sherbrooke and the Eastern Townships. In spite of efforts made by the governments in the past few years to help diversify our industrial structure to a greater extent, we have not yet succeeded in the Eastern Townships in giving impetus to the industrial restructuring process, which is of the utmost importance for the future of our region. Recent statistics indicate that the Eastern Townships area is one of the least advanced in Quebec with respect to its industrial structure. The communique states that the creation of the Canadian Industrial Renewal Board will work in close co-operation with the federal departments under the guidance of a special committee of ministers chaired by the Prime Minister so as to make sure that the industrial renewal, inasmuch as it affects the economy of the regions, the community groups and the labour force, does indeed meet the social and economic needs involved.
One of the basic characteristics of this new strategy is the pooling of efforts from the private and public sectors with a view to increasing competition in the designated sectors, diversifying the economic base of the communities involved and ensuring that the workers will benefit from new job opportunities. Finally, it is stated in the communique that in the coming months it will submit to the special committee of ministers recommendations concerning the communities which should be the first to benefit from the special assistance program. The board will also remain in close contact with the provincial authorities as well as labour leaders, employers and the communities involved. Mr. Speaker, I want to say right now that at the earliest opportunity I intend to get in touch with the
December 7, 1981

chairman of the board, in co-operation with local organizations. We want to make sure that the Eastern Townships and the Sherbrooke area will draw maximum benefits from the funds made available to the board. We intend to meet the members of that organization as soon as possible and, along with local organizations, I will not miss an opportunity of making recommendations to that committee. Mr. Speaker, a significant event took place in Sherbrooke last October. For the first time a subcommittee of the Canadian Parliament unanimously adopted a reference of the House of Commons to undertake a survey in Quebec within the DREE hearings to study on site the economic situation of those two regions, namely the Eastern Townships and the Gaspe peninsula. This first experiment in Quebec and the third in Canada has turned out to be a real success.
We cannot, for the time being, foretell what will happen, as the report will be tabled only in a few weeks' time, on the recommendations of the subcommittee which visited those two areas in Quebec. But we can, right now, state that all those who presented a paper before the members of the subcommittee unanimously expressed their satisfaction at the fact that a committee from the House of Commons had come to study and discuss economic problems at the grass root level. The reports which were presented in perce and Sherbrooke have shown that there was a widespread desire to see the Department of Regional Economic Expansion getting more deeply involved in the development of those areas whose economic growth is slow. While DREE's contribution to the economic development in Quebec was readily acknowledged, the desire was expressed that the Department of Regional Economic Expansion, which is supposed to help the deprived areas, enlarge its terms of reference and be provided with financial means and additional powers so that it may provide faster, more direct and more efficient aid. 1 can assure you, Mr. Speaker, that those field trips last fall have demonstrated to us the importance of providing the representatives of the people with the opportunity to see in situ the impact of some of their policies. We were able to detect a few shortcomings in DREE's policies, but also some of its benefits. Now we have to improve the procedures, as many speakers have suggested, so that this department may become the real co-ordinator of federal interventions and help the economic situation of the less advanced areas in Canada.
I sincerely hope that the new legislation governing the Department of Regional Economic Expansion, which the minister says is supposed to be tabled early in 1982, will fulfil the wishes of the groups we met over the last two years, who would like DREE to redirect its economic action at the regional level. When the law is tabled I shall elaborate on that a little further but for the time being, Mr. Speaker, I only want to point out that DREE has proved a big help in the economic field in many regions of Canada, and must redirect its course so as to
The Budget-Mr. Pelletier
play a more efficient part as the foremost dynamic force in areas of slow economic growth.
Mr. Speaker, statistics recently published about the unemployment rate fail, in my humble opinion, to express the seriousness of the situation in my area. We are a town, and have often been described as such, of institutions. I sincerely hope that we will examine the plight of this area as soon as possible. The unemployment problem among young people is a responsibility of all levels of governments and of private industry as well. We should work together to suggest means to resolve this problem and help young workers.
Even though I have pointed out, on many occasions but especially over the last few years, the stunning number of jobless young people in our area, I ought to add that there are many mature workers who are out of work as well and I feel we should make a special effort to help them make a decent living. Unemployment is a social scourge that government should and must endeavour to eliminate, by working in cooperation with all persons concerned. No one can look with equanimity at the waste of talent and intelligence caused by this unused potential. If the government does not respond to my cries of alarm, at least it should not be insensitive to the distress of the many unemployed workers.
Mr. Speaker, it seems to me that a good way to co-ordinate the economic policies that I mentioned earlier, would be to hold an economic conference on the area in question. At the first stage, we could hold a meeting in Sherbrooke, and at the second stage extend it to the whole region and in this manner we could exercise a greater pressure on the different levels of governments.
Let us first agree on the priorities, the directions at the Sherbrooke level, let us examine the specifics of action. When this is done, we can invite the greater area of the Eastern Townships to join us in a common development effort, because the economic development of the Sherbrooke area is very closely linked to that of the Eastern Townships, and vice versa. That economic summit, in addition to enabling us to see what the situation is and determine the directions to follow, will also enable us to establish the major priorities for the area over the next few years. I submit that this is essential. In the last few years, we had economic summits in our area on the textile, footwear and furniture industries, therefore an economic summit would enable us to know the state of all industries in Sherbrooke and give us the opportunity to decide on the direction we want to follow for our area.
On the economic level-


The Acting Speaker (Mr. Blaker):: Order, please. I am sorry to interrupt the hon. member.

December 7, 1981
Adjournment Debate
I am sorry. I did think that perhaps the hon. member would like to complete his remarks, but in accordance with Standing Order 40, a motion to adjourn the House is now deemed to have been made and seconded.
Is the hon. member for Yukon (Mr. Nielsen) rising on a point of order?


Erik Nielsen: Mr. Speaker, I am sure the hon. member would obtain unanimous consent if he only had a minute or two to go, and if I could then call it ten o'clock.


Irénée Pelletier: Mr. Speaker, I still have seven or eight minutes at my disposal, but I would prefer to resume tomorrow.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Donald W. Munro: Mr. Speaker, on November 25, at page 13240 in Hansard, I put two questions to the Solicitor General (Mr. Kaplan) relating to the documents and the report of the McDonald Commission. The first of these was to seek his assurance that those deletions, which we all understand were made in the report, are in safekeeping and will be made available to the public in due course; second, that because of the complexity and the volume of the report, some effort be made to prepare an index to the three documents. What I therefore seek is an assurance that the abridgements will be preserved and made available to the public in due course; second, we would like an index.
My worries are of three kinds. The first concerns these deletions. I quite understand the qualms of the commissioners when they say that they feel it is desirable and in the public interest to withhold some of the report, particularly if there is a risk of imperilling the security of Canada. They also consider that the identity of individuals and organizations should be safeguarded, particularly as they might be liable to prosecution in the course of time. In the report, they did not wish to prejudice the process. That is quite understandable.
What I find to be a little lacking in assurance, giving me cause to worry, is that this particular government, which has a record of having lost or mislaid or deliberately allowing certain
documents to be destroyed which now ought to be in the public domain, might cause these particular chapters of the McDonald commission report to disappear as well.
I think, for example, of the loss of the Mackenzie King diary, one of the important Mackenzie King diaries related to the Gouzenko papers. That document has disappeared. 1 quite recognize that it did not disappear at the archives. However, somehow or other, it was not properly safeguarded until the executors had a chance to look at it, and it has now disappeared. I am sure it is a valuable document because it specifically dealt with the Gouzenko matter.
The second problem involving my mistrust of the government in these matters arises from the fact that after the usual 30 years of preventing the public scrutiny of documents related to the Taschereau-Kellogg report on the Gouzenko matter, we learned that an extra ten years would be added for reasons which were never clear. Subsequently we learned that another solicitor general of another government tried to get access to those documents to see whether they ought to be made public, but he was denied access to them.
The next stage in that particular operation was that the Liberal government was returned to office and ordered, under some pressure I should add, those documents to be re-examined to see whether they could be released. Now they are released. But we have no certainty that in the interim some of them have not disappeared. I do not want the McDonald commission documents to disappear.
The third misgiving I have is the mystery surrounding the Featherbed files and where they went. Nobody seems to be able to say where they went. If they can disappear, what about documents relating to the McDonald commission?
Fourth, there was the deliberate destruction of the Checkmate files, which is reported upon in the McDonald report. Those four reasons give me ample cause to have misgivings about the lost documents.
All these matters, together with the refusal of cabinet to accept final responsibility for RCMP actions, as mentioned by the Prime Minister (Mr. Trudeau) give me concern. In a 1977 press conference, the Prime Minister stated:
It is a matter of stating as a principle that the particular minister of the day should not have a right to know what the police are doing constantly in their investigative practices, what they are looking at, and what they are looking for, and the way in which they are doing it.
That, I suggest, is not a proper expression of ministerial responsibility and gives me concern about the possible loss of these documents.
On those grounds, I think I am amply justified in seeking the assurance of the government that these documents are in safekeeping and that they will, in due course, be made available to the public.
The other matter of the index arises mainly from the complexity of this report. It is a long report and contains thousands of pages. It is not easy to follow one's way through
December 7, 1981

it. An index would be most helpful. I would appreciate getting from the government some sort of an assurance that the index that has been prepared by the commission itself, which I believe was put on a computer tape, will be available in due course. I hope not too far down the road that it will be available to the general public so that we will all be able to find our way through this very complicated report. I do hope I will get those two assurances, although I doubt it.


Mr. Roger Simmons (Parliamentary Secretary to Minister of the Environment and Minister of State for Science and Technology):: Mr. Speaker, I thank the hon. member for Esquimalt-Saanich (Mr. Munro) for raising this issue tonight.
I am pleased to respond on behalf of the Solicitor General (Mr. Kaplan). As the hon. member will understand, I will resist the temptation to respond to the nonsense about papers which have disappeared-


Donald W. Munro: It is not nonsense, it is true.


Roger Simmons: -and to his mistrust of the government, which does not come exactly as a startlingly new revelation.
However, the hon. member does raise a couple of important points that need response. First, with respect to abridgments in the report. The report of the commission was, as the House knows, published on August 25, 1981. The report dealt with matters of national security, and because it was obviously not in the public interest to disclose those matters that could adversely affect national security, the report was edited, with the concurrence of the commissioners.
As a result of that editing process, less than 3 per cent of the report was deleted on the grounds of not disclosing the identity of targets, endangering sources, not disclosing the precise means of implementing intrusive and other clandestine operating methods and techniques, and not disclosing information relating to allied or other friendly security-intelligence agencies.


An hon. Member:: We know all that.


Roger Simmons: Mr. Speaker, does the hon. member want the response? I shall give it in my fashion, not his. If he has a little patience, he may learn something.
There was the assurance that nothing was deleted which reported conduct of any individual which was criticized by the commission.
In addition, with regard to the third report, there has been agreement with the commission to delay publication of those chapters of Part IV of the report that recommend referrals of particular matters to the attorneys general and to the commissioner for possible disciplinary action. These chapters, together with related material identified by the commissioners, have been conveyed to the attorneys general for their consideration.
The hon. member has asked where the deletions have been made, but the House will understand that that sort of informa-
Adjournment Debate
tion cannot be disclosed lest that disclosure would reveal clues to the precise matters which have been expurgated. It is not, therefore, possible to go beyond stating the grounds on which the deletions were made. As for the report as presented to the governor in council, it has been filed with the Privy Council office where it is under the control and in the care of the custodian of the documents and records of the commission, the Clerk of the Privy Council and secretary to the cabinet.
With regard to the editing done to the report, it should be recalled that the government made as few deletions as was consistent with our security needs, that those made had the full support of the commissioners, and that the publication of the report constitutes an unprecedented public disclosure of our security affairs.
The second matter raised by the hon. member in his questions was access to an index to the report. Upon inquiry, I have ascertained that no computer records or index of the report was made by the commission. I can also inform the House that the government is not considering the preparation of an index to these volumes.
The report is the result of the extensive work conducted by the commission, not the government. I would remind the hon. member that this report has been publicly available for more than three months, giving ample time for him to have read it. It should be noted that the report contains a detailed and lengthy table of contents and has been cross-referenced. For this reason, the government sees no reason to go to the expense of preparing the index that has been proposed by the hon. member.


AGRICULTURE-ESTABLISHMENT OF WESTERN GRAINS RESEARCH FOUNDATION -(B) AVAILABILITY OF FUNDS
Douglas Charles Neil: Mr. Speaker, on October 21 last I posed a question, as recorded at page 12023 of Hansard, to the Minister of Agriculture (Mr. Whelan) to determine whether or not he supported the presentation of a group of western farm organizations which set up the Western Grains Research Foundation. Their presentation requested that the $9 million presently in the Prairie Farm Emergency Fund be paid to their foundation and that a voluntary levy of one tenth of 1 per cent on grain sales also be part of their funding.
The minister indicated he had not met with the foundation, but they had met with his officials and he had not, at the time I asked the question, had an opportunity to see the report from his officials.
In response to my supplementary question, recorded again at page 12023 of Hansard, he seemed to try to cast a doubt on the fact that the $9 million in the Prairie Farm Emergency Fund in fact belonged to the producers. He said, "He knows that that money belongs to both the government-", and after interruption he continued by saying, "-was contributed to by the producers". If one refers back to the debate on February 3, 1981, at page 6845, one will see that the minister referred to the fund in the following terms:

December 7, 1981
Adjournment Debate
Having this money work for prairie farmers through research is the ideal situation because, after all, it is the farmers' money.
The debate in question on that date was on second reading of a private member's bill, Bill C-245, proposed by myself, to repeal the Prairie Farm Assistance Act and to set up a trust consisting of four trustees, three of whom would be producers listed in permit books as actual producers, one from each of the three prairie provinces, and as the fourth a man expert in the field of research and development in cereal and oilseeds, who would be the chairman of the trust. The trustees would hold the $9 million presently in the Prairie Farm Emergency Fund in trust and use the interest earned on the money for research and development in cereal and oil seeds suitable for production in the Canadian Wheat Board area.
I raised the point in the debate that some $9,066,972 has been standing to the credit of the Prairie Farm Emergency Fund since 1972 and that the government has been using that money without payment of interest since that time. It is farmers' money; and if interest had been paid since the inception of the fund, the fund itself would have doubled or tripled in size by this time. At rates that have prevailed for the past year, the fund would have been earning between $3,500 and $4,000 per day. As each day goes by, this interest is lost to research in the Canadian Wheat Board area.
The minister was not prepared to approve my bill in February of 1981, arguing that his department was in the process of putting the final touches to his own bill which he would be presenting to Parliament. Almost a year has gone by, Mr. Speaker, and his bill has not yet seen the light of day.
He did agree during the debate on February, 1981, to send the subject matter of my bill to committee for a study, but such a study has never taken place. In the meantime, the Grains Research Foundation has been set up by a group of western farm organizations-I should say the group of western farm organizations, including all the western farm organizations with one exception-and the aims and objects of the trust that they propose to set up is the same as the aims and objects which I set forth in my Bill C-245. I have indicated to the foundation that they have my complete and full support.
I believe it is incumbent upon the Minister of Agriculture to indicate his reaction to the Western Grains Research Foundation proposal, and whether or not he is prepared to introduce legislation transferring the $9 million to that foundation. I caution him that every day of delay on his part means between $3,500 and $4,000 lost to western grain research, and it is he who must assume full responsibility and answer to the western grain producers.
I know his answer has been that the money is in a non-interest bearing fund, but I think it is an absolute disgrace that producers' money has sat in an account since 1972, been used by the government and has not drawn one cent of interest.
If the minister is indicating that he plans on bringing in a bill of his own, I would suggest that he do so without further delay. I would like to tell him quite frankly, however, that if
his bill is such that he or his department retains control of the fund and it does not provide for control of the fund by the producers of western Canada, he will certainly not gain the approval of members on this side of the House.
In closing, I want to make it quite clear that it was not my intention, and it is not the intention of the Western Grains Research Foundation when they submitted their proposal, to downgrade or detract from the great work that the research branch of the Department of Agriculture has carried out. They are doing excellent work, but they are limited in their funds and they are doing research in areas that would not ordinarily be the priority of producers who had their own ideas on what should be done. This foundation would not detract from the department, but would give the producer an opportunity to decide what particular type of research he wants. There is a shortage of researchers, I would like to point out. In talking to the research foundation members, I found out that perhaps it might be part of their plan to fund some senior students who would like to further their education in order to become researchers. I understand that university students from Canada who are taking their degree do not wish to further their education because it is not worth it. It is only people from abroad who take their Master's degree or do their doctorate in research.
It is my hope that the Parliamentary Secretary to the Minister of Agriculture (Mr. Ostiguy) in responding to my remarks tonight will at least give us some indication of what the minister plans to do with respect to the $9 million, and I would hope that he appreciates the fact that there is a great deal of urgency because of the interest lost on this money on a daily basis.


Some hon. Members:: Hear, hear!


Mr. Marcel Ostiguy (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I should like to mention the timeliness of the hon. member's question considering that the Conference on Agricultural Outlooks for the Eighties opened this morning. As the hon. member most appropriately remarked, it was precisely on October 21, 1981, the very day that he asked the Minister a question on this issue, that the Federation of Agriculture and the Western Grain foundation submitted to the officials of the Department of Agriculture a proposal providing for a transfer of funds, the Prairie Farm Emergency Fund in order to promote research.
Since then the Minister has been and continues to be in close contact with the President of the Treasury Board, and this very day he was meeting with the representatives of both organizations, that is Mr. Hamilton of the Canadian Federation of Agriculture and Mr. Strath of the Western Grain Research Foundation, to consider whatever changes Agriculture Canada or the Treasury Board might have to make in
December 7, 1981

order to make this $9 million fund provide better support for research.
The hon. member is no doubt aware that agricultural research is dealt with directly in the document tabled by the Minister of Agriculture (Mr. Whelan) entitled "The Agri-food Strategy for the Eighties". Agriculture Canada does realize that research is a must and we agree with the hon. member that part of those funds could be transferred to the producers. We hope that following the meeting the Minister is having today and tomorrow with the spokesmen for both organizations, he will be able to give us an answer before the end of the year. I do not have a definite answer at this moment. However during these meetings table hold in the next two or three days here in Ottawa as I just said, with the representatives of both organizations, and as we know the federal-provincial conference of ministers of agriculture will also be held here on Wednesday-the minister will have ample opportunity to discuss this issue with all parties concerned. Let us not forget that Agriculture Canada has invested over $200 million in agricultural research. We are all aware of the fact that Canadian agriculture must develop and improve its productivity, as the various speakers were saying this morning in presenting their papers at the meeting of the federal conference on agriculture for the eighties, and also that its development is directly related to that of research.


AGRICULTURE-REFINANCING OF CO-OPERATIVE IMPLEMENTS OF WINNIPEG.-(B) AMOUNT OF FEDERAL GOVERNMENT ASSISTANCE
Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, my intervention tonight is with regard to a problem of Co-op Implements of Winnipeg, a farm co-operative which has been producing implements in the west for a number of years. Since its organization in Canada in 1958, Co-op Implements have made dramatic progress. Gross sales for the fiscal year ending October 31 this year have increased 84 per cent, from $57 million in 1978 to $105 million in 1981. The work force of Co-op Implements has increased 27 per cent in this timeframe, from 773 in October 1978 to 982 on October 31, 1981. Expenditures on research and development by Co-op Implements have increased 464 per cent in that period, from $285,000 in 1978 to $1.6 million in 1981, 1.5 per cent of its sales, which is a very good record for any industry. Co-op Implements have turned around from $3.8 million loss in 1978 to $1.6 million profit in 1979. Despite the soaring interest costs, heavy investments in research and development and a million dollar employee training program in 1980, losses were kept below $1 million. The final results for 1981 are not yet available, but it would seem they will break even. Except for one factor, this year they would have made a profit.
The interest bill of Co-op Implements for 1981 was $105 million. They have an interest bill of approximately $35,000 a
Adjournment Debate
day. It is another case of interest rates affecting the viability of an industry.
The key line of this report on Co-op Implements is probably this last line which says that profits would have been assured in 1981 had the supposed equity package been in place. Mr. Speaker, my intervention is exactly on that basis.
The proposed package was a $35.5 million package. Nine and a half million dollars was to be raised by the organizations in the co-ops in western Canada. Five million dollars was to be raised by the membership of Co-Op Implements, by farmers such as myself. Seven million dollars was to be raised by the provinces. The fourth group to contribute to this package was $14 million by the federal government.
On December 4, 1981, the Minister of Agriculture (Mr. Whelan) made the following statement in a press release: Financial Aid to Co-op Implements
-Agriculture Minister Eugene Whelan today announced that cabinet has proposed a total of $14 million in federal funding to assist Co-operative Implements of Winnipeg.
That was a very misleading statement. If one were to turn to the second last paragraph of the same press release, one would find that it states that:
The outstanding portion of this contribution, about $7.5 million, will be forgiven as part of the total assistance to the company.
The request was for $14 million. The suggestion by the federal government is for $6.5 million. The $7.5 million majority of the federal contribution is a loan, a write-off. The governments of Saskatchewan, Manitoba and Alberta have asked for a $14 million contribution in cash from the federal government. This is somewhat similar to the contribution which was asked for previously by the Government of Ontario when Chrysler Canada Ltd. was in trouble.
The proposal of the Minister of Agriculture is not new to the governments of the prairies, and it was not acceptable when it was known. It will not become acceptable because it has been made public.
Let us look at some comparisons. During the last couple of weeks, $6.5 million in grants was given to a hotel complex in Windsor which will be operated by the Hilton Corporation. Thirty million dollars in grants was given to what we called in the west the Deutz company, which produces diesel tractors in the east. This $30 million was contributed to these companies so as to give them a basis for operation; but instead, a company in the west, which is Canadian owned and Canadian operated with 1,000 employees, was offered a paltry $6.5 million, compared to the $14 million that it requested. I want to know from the minister or his parliamentary secretary right now exactly what we can expect from the federal government in this situation. How much can we expect, and when can we expect it?


Marcel Ostiguy: Mr. Speaker, in reply to the hon. member for

December 7, 1981
Adjournment Debate
Prince Albert (Mr. Hovdebo) concerning Co-operative Implements of Winnipeg, I must say that the figures he has quoted are almost accurate, except that he stated that the government contributed to Massey-Ferguson, to Chrysler and to White Implement. I would like to remind the hon. member that these companies received a loan guarantee while Co-operative Implements of Winnipeg received grants on various occasions, of which the first was an interest-free grant of $7 million, I believe, which, with $3 million in interest, would represent, according to my calculation about S10 million in direct assistance.
We recognize the magnificent contribution of this company in western Canada. It manufactures fine equipment, but we still have to look at its operations, and this is why it will perhaps be impossible to go any further this evening, as the minister and the department are now considering, along with the provinces, the various means available to save or to assist
financially Co-operative Implements of Winnipeg. The hon. member himself mentioned the high interest rates, but it still remains that various farm machinery manufacturers are going through a rather difficult period. Of course, the American and European markets are not as sound as they were. Equipment costs, wages, and everything else have increased in the last few years, and it seems that farmers are thinking twice about investing heavily in farm machinery. As I said earlier, I am sorry that I am not able to provide more information, but we are aware of the situation described by the hon. member for Prince Albert.


The Acting Speaker (Mr. Blaker):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow afternoon at two o'clock.
At 10.33 p.m. the House adjourned, without question put, pursuant to Standing Order 2(1).

Tuesday, December 8, 1981