1981-05-26

ROUTINE PROCEEDINGS


Mr. Geoff Scott (Hamilton-Wentworth):: Madam Speaker, under the provisions of Standing Order 43 I rise on a matter of urgent and pressing necessity. In view of the fact that 500,000 Canadian home owners who secured their mortgages initially at 12 per cent in 1976 will have to renegotiate them at the staggering rate of at least 18.5 per cent, and perhaps as high as 20 per cent, forcing many people to sell their homes, and since HUDAC officials are expressing the view that this situation is far more serious than the government will admit, I move, seconded by the hon. member for Surrey-White Rock-North Delta (Mr. Friesen):
That this House instruct the Minister of Finance to implement immediately a mortgage interest deductibility program to protect the average home owner in Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. Don Blenkarn (Mississauga South):: Madam Speaker, in a release dated May 13, 1981, the Minister of Finance (Mr. MacEachen) indicated that in the month of March, 1981, he had a surplus of $836 million. The fact of the matter is that this surplus was there because the minister revalued certain government assets to the tune of $1,268 billion. Actually in March the minister lost $432 million. Last year in the month of March the government spent $4.9 billion and received in taxes $4,862 billion for a loss of only $47 million. Canada was nine times worse off in March this year than last. I therefore
move, seconded by the hon. member for St. Catharines (Mr. Reid):
That the Minister of Finance today on motions explain to the House why he reclassified assets and liabilities during the month of March so as to pretend to show a surplus in national accounts and explain to the House why he issued what can only be described as a misleading release to the public dated May 13, 1981.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ENVIRONMENTAL AFFAIRS
Mr. Neil Young (Beaches):: Madam Speaker, I rise under the provisions of Standing Order 43. Since waste disposal negotiations between the United States federal government, the state of New York, and Hooker Chemicals and Plastics Corporation, will form the basis for agreements with several hundred other waste disposal companies in the New York state area, since Canadian interests are not represented at these negotiations, and since the Canadian public do not want their environmental concerns represented by the company responsible for the Love Canal waste disposal site, I move, seconded by the hon. member for Hamilton Mountain (Mr. Deans):
That this House instruct the Minister of the Environment to advise the U.S. government immediately of Canada's concerns in this matter and insist that we have representations at these discussions to protect Canada's interests and protect our lakes and waterways from becoming a sewage system for U.S. industrial wastes.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. Otto Jelinek (Halton):: Madam Speaker, I rise today under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that the

May 26, 1981
Minister of Finance (Mr. MacEachen) has repeatedly refused to extend the provisions of the small business development bond program, citing the government's inability to absorb additional costs, and because a new study by the Canadian Federation of Independent Business recently concluded that the SBDB program will, in fact, produce a net gain in government revenue of $77 million in the first year alone, I move particularly since the government refuses to take any action in order to reduce the damaging interest rates in this country, seconded by the hon. member for St. John's West (Mr. Crosbie):
That this House instruct the Minister of Finance to amend immediately the provisions of the small business development bond program to include venture or working capital and to render unincorporated businesses, farmers and fishermen eligible to receive such benefits, and further that the program itself be extended beyond the December 31, 1981, deadline.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


METRIC CONVERSION
Mr. Bill Domm (Peterborough):: Madam Speaker, I rise on a matter that becomes more urgent and pressing every day, especially in view of the six-month lead time foreign scale manufacturers will require in order to supply the Canadian grocery store guinea pigs on January 1, 1982. In the last month the Retail Council of Canada stated "it would be desirable to defer initiation of the scale conversion process until it is clear that the U.S. is close to catching up with Canada". The Canadian Federation of Retail Grocers stated the same thing, that Canada should not convert until the Americans, our neighbours to the south, do. Loblaw companies, on behalf of the corporate chains, stated "We would recommend that the timing of retail scale conversion in Canada be set to coincide with the conversion of the industry in the U.S." I therefore move, seconded by the hon. member for Red Deer (Mr. Towers):
That the government respond to the clearly expressed wishes of those most affected by metric scale conversion and immediately take steps to halt the scheduled conversion program in the retail food stores and follow the most sensible course of a co-ordinated conversion with our major trading partner and tourist source, the United States of America.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HEALTH CARE
[Stage Direction]
5.0.	43
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, I rise under the provisions of Standing Order 43.
Whereas this morning at a meeting of the Standing Committee on Health, Welfare and Social Affairs the members, by unanimous vote, directed the Minister of National Health and Welfare (Miss Begin), and the Minister of Indian Affairs and Northern Development (Mr. Munro), to provide primary health services to the James Bay Cree until such time as the terms of the James Bay and Northern Quebec Agreement are fulfilled, and given the fact that all doctors serving the Cree will have left the area by June 19 and no replacements will arrive until September, and that there are serious and urgent health problems facing the James Bay Cree, I move, seconded by the hon. member for Oxford (Mr. Halliday):
That the Minister of National Health and Welfare immediately ensure that adequate and comprehensive health care services are provided to the Cree of northern Quebec on a temporary, humanitarian basis, to alleviate their very serious health problems.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NEGOTIATION OF SALE TO RUSSIA-MOTION UNDER S.O. 43
Mr. Garnet M. Bloomfield (London-Middlesex):: Madam Speaker, I rise on a matter of urgent and pressing necessity. Given the announcement today that Canada has negotiated a huge grain sale to the Soviet Union, I move, seconded by the hon. member for St. Boniface (Mr. Bockstael):
That this House convey its support for the work being done by the minister responsible for the Wheat Board in expanding Canadian grain sales abroad.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


SHIPMENTS THROUGH PORT OF CHURCHILL-MOTION UNDER
[Stage Direction]
5.0.	43
Mr. Rod Murphy (Churchill):: Madam Speaker, my motion under the provisions of Standing Order 43 is on the same topic.
In light of the long-term grain agreement with the U.S.S.R., which is a strange way to conduct an embargo, and in view of the neglect of the Port of Churchill by the federal government, I move, seconded by the hon. member for Dauphin (Mr. Lewycky):
May 26, 1981

That the government now commit itself to ship 4 per cent of grain shipments through this port and further commit itself to building a merchant marine so that we can ship our grain on Canadian ships.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HAZARDOUS SUBSTANCES
Hon. David Crombie (Rosedale):: Madam Speaker, I too rise to propose a motion under the provisions of Standing Order
43.
Whereas the American government has asked the Captan manufacturers to show cause why Captan should not be banned, and whereas the health protection branch in Canada has urged that a ban, or severe restriction, be placed on Captan, and whereas the Canadian government has refused to make any information public while the Americans published last August their information on potential health hazards, and further, any information Canadians have so far obtained they have obtained from the United States, where it has been public for over nine months, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the Minister of Agriculture and the Minister of National Health and Welfare be directed to make public immediately all information concerning Captan.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN NATIONAL RAILWAYS
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam Speaker, I rise under the provisions of Standing Order 43.
Canadian National Railway pensioners were notified last week that they would be getting a cost of living increase in their pension cheques for the year 1981 only. This increase varied from a high of $25 per month to a minimum of $8.18 per month for a widow whose husband retired in 1971. While this increase could not be considered satisfactory under any circumstances, the fact that it is for the current year only adds insult to injury.
Oral Questions
I therefore move, seconded by the hon. member for Red Deer (Mr. Towers):
That the Minister of Transport instruct CNR to make this paltry increase a part of the basic pension rate ensuring thereby that these underpaid pensioners will continue to get this money beyond December 31, 1981.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PROPERTY RIGHTS
Mr. Bill Yurko (Edmonton East):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity.
Now that the government has acknowledged the error of its ways, accepted good advice and agreed to amend Bill C-48 to modify the clause dealing with appropriation without compensation, I move, seconded by the hon. member for Yukon (Mr. Nielsen):
That this House reaffirm and uphold the principle that no private property, ownership rights, or proprietary interests will be expropriated by government or any Crown corporation of government without due compensation and/or access to due process of law.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is directed to the Minister of Finance. It has to do with the high cost of housing and interest rates. I put it to the Minister of Finance that he is prepared to have his government pay $1.5 billion for an oil company but is not prepared to come to the aid of Canadians who are facing high interest rate charges and who are faced with the prospect of not being able to renew their mortgages.
The minister will recall that in the throne speech the government promised, and I quote:

May 26, 1981
Oral Questions
-to assist those unable to bear the burden of renegotiating their home mortgages in the present abnormal situation so that the spectre of foreclosure will be avoided.
That was a firm commitment made in the throne speech opening this Parliament, before $1.5 billion was spent on Petrofina. Does the Minister of Finance intend to honour that commitment, or will that commitment to Canadians be abandoned, and will Canadians who are facing renewal of their mortgages now in many cases be forced simply to let their houses go?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, as I mentioned yesterday in reply to a question from a member of the opposition, there was indeed a similar situation existing in the country respecting interest rates at the time the Speech from the Throne was made public and announced. We were all very deeply concerned about the very sharp increase in interest rates not only in Canada but also in the United States. It was in that context that that was commitment made.
Subsequently, however, as the Right Hon. Leader of the Opposition recalls, interest rates in Canada dropped sharply, and the fact of the matter was that after very careful monitoring by the government, and after co-operation arranged with financial institutions by the minister responsible for the Canada Mortgage and Housing Corporation, most home owners-indeed all-were able to renegotiate without any difficulty in that situation.
Since that time I have given the assurance to the House that I am monitoring the current interest rate situation and the impact it may have on the ability of those who are currently renegotiating their mortgages, and that is the commitment I restate now.


Charles Joseph Clark: Madam Speaker, for those Canadians who might have missed that, the clear message of the minister is that he intends to abandon absolutely the promise he gave to Canadians. His word is worth nothing. That is what he is saying.


REQUEST FOR INTRODUCTION OF MORTGAGE TAX CREDIT PROGRAM
Charles Joseph Clark: Madam Speaker, the Minister of Finance talks about the easy situation Canadians are facing. Perhaps he would like know, as the House should know, that a typical Canadian home owner trying to renew this year a $30,000 mortgage will be paying $90 a month more in interest alone than he or she would have had to pay if that renewal had occurred when this government came to office. Ninety dollars a month is the high cost of Allan MacEachen.
In light of this burden which is being placed upon Canadians, many of whom are faced with the prospect of losing their homes, will the Government of Canada not honour its obligation and honour its word, recognizing that $90 a month more now than would have been paid when this government was elected is indeed a heavy burden for most Canadians? Will the
Government of Canada not do what it should do and bring in the kind of measure my government proposed, a mortgage tax credit, which would have met all that extra cost, or will the government take some other action? Will the minister help those Canadians who are now paying $90 a month more for the "privilege" of having a do-nothing Minister of Finance?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, the only suggestion the Leader of the Opposition is ever able to make when he asks questions on the orders of the day in so far as the economy is concerned, is that we should spend more money. Every day he gets up and says, "Let's have a new program. Let's add to the deficit. Let's increase expenditures"-


Mr. Nielsen:: What about Petrofina?


Allan Joseph MacEachen: -while his former minister of finance, the hon. member for St. John's West, looks away in embarrassment at the naivete of the Right Hon. Leader of the Opposition.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The difference, Madam Speaker, is the direction of the spending. This government is prepared to spend $500 million to aid the OPEC countries because it cannot sign an energy agreement. This government is prepared to pay $1,500 million for an oil company that the country does not need, but it ignores the needs of ordinary Canadians who are being driven into bankruptcy or driven out of their homes.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The minister, who is interested in spending, might know that while he was out of the country, running away from his responsibilities last week, the Minister of Labour indicated that he intended to bring in expensive new programs. He said, and I quote, "I don't give a hoot how much it costs." That is the spending of the Liberal party.
The Minister of National Health and Welfare in the Minister of Finance's absence last week indicated that she proposes higher child tax credits-Allan gets out of town and the government starts to spend everything it can. That is the position of this government.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, when is this government going to recognize that the Conference Board of Canada, Wood Gundy, Data Resources, that everyone knowledgeable about the housing industry is indicating there is going to be an increase of at least 15 per cent per year in the price of houses in Canada unless there is some change in the government's policy? I ask the Minister of Finance will he not accept his responsibility to help those Canadians who are already paying too much for housing and who are going to be facing further
May 26, 1981

increases? Will he come home to his responsibilities, and will he help those Canadians in need?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: The Leader of the Opposition has included a lot of political polemic in his so-called question, and he alluded to the Canadianization program which is part of the NEP and which is widely accepted by the Canadian people. He ought to remember the stand he took on Petro-Canada and which sent him down the chute.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: I am telling you that if he takes the same attitude on the Canadianization program, he will have the same retreat into political oblivion.


Some hon. Members:: Hear, hear!


EFFECT OF MONETARY POLICY ON HOUSING COSTS
Hon. James A. McGrath (St. John's East):: Madam Speaker, I have a supplementary question for the Minister of Finance. Executives of HUDAC are presently meeting in Ottawa on what has been described as the worst housing crisis in Canadian history. The Conference Board of Canada estimates the cost of financing a single detached home will be 81 per cent higher this year than in 1979. That is a direct result of the government's monetary policy and high interest rates. People are being forced to sell their homes, with nowhere else to go because housing starts are going down and the vacancy rate in major cities is practically non-existent.


Some hon. Members:: Order, order.


James Aloysius McGrath: Madam Speaker, that is a crisis, and it is clearly the responsibility of the government to face up to that critical situation. I ask the Minister of Finance, who is a compassionate man, what does he propose to do about it?


Allan Joseph MacEachen: Madam Speaker, the hon. member has denounced the monetary policy being followed by the Government of Canada. What we are doing is supporting the monetary policy of the Governor of the Bank of Canada.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: I would remind the hon. member that his colleague from St. John's West, in a speech not very long ago in this House, gave his support to Governor Bouey in the current circumstances, and that is the monetary policy we are supporting.
However, I would also remind the hon. member, before he gets carried away by a lot of intemperate inaccuracies, that housing starts, for example, were higher in April, 1981, than at any time since November, 1978. And the hon. member is totally wrong when he talks about the housing industry being in a state of crisis, because there has been considerable accel-
Oral Questions
eration in the rate of housing starts in Canada at the present time.


SITUATION IN ATLANTIC PROVINCES
James Aloysius McGrath: Madam Speaker, my supplementary question is directed to the same minister. It is true that the Governor of the Bank of Canada may be responsible for monetary policy, but the Minister of Finance and his colleagues are responsible for the welfare of Canadians, and the minister has failed to live up to that responsibility. Because of the critical situation we face today, people are being forced to sell their homes, and housing starts are beginning to decline at a rapid rate.


Allan Joseph MacEachen: No. They are going up.


James Aloysius McGrath: We have been told that today. I want to put a position to the minister regarding our own region, the Atlantic provinces. The average industrial wage in Atlantic Canada this year will be just under $16,500. The family income required to purchase a new home has increased from $17,500 in 1979 to $31,800 in 1981. Given these startling statistics, and given the fact that the people of the Atlantic provinces, more so than people in any other part of the country, want to own their own homes, what is the minister prepared to do to help the young people of his own region to satisfy their dreams and aspirations? Under him, the dream of home ownership is becoming a dream which will be unfulfilled.


Allan Joseph MacEachen: No, Madam Speaker, I do not agree at all with the very pessimistic approach taken by the hon. member with respect to the possibility of home ownership in the country. Recently the statistics indicated a very sharp increase in the number of housing starts in Canada. I do not believe it is to anybody's benefit to create a false picture of what is the situation.


Miss MacDonald:: Take off your rose-coloured glasses.


Allan Joseph MacEachen: But I want to remind the hon. member of this point: no Canadian will ever have his dreams or aspirations fulfilled in the next five or ten years-


Mr. Crosbie:: Under this government.


Allan Joseph MacEachen: -unless the government, at the present time, takes the very difficult decision of doing the things that are required to arrest inflation in Canada.


Charles Joseph Clark: Unless he is Maurice Strong.


Allan Joseph MacEachen: If hon. members opposite want to ensure-


Charles Joseph Clark: Pay for the pork-barrelling and ignore the home owner.

May 26, 1981
Oral Questions


Allan Joseph MacEachen: -lower interest rates in the future, and that young people will be able to-


Charles Joseph Clark: Let them give one million bucks to Maurice Strong.


Allan Joseph MacEachen: -to provide for home ownership, then they ought to get behind the battle I am fighting against inflation in Canada.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


HAZARDOUS SUBSTANCES
Mr. Simon de Jong (Regina East):: Madam Speaker, my question is directed to the Minister of National Health and Welfare. The Department of National Health and Welfare made certain recommendations to the Department of Agriculture concerning the use of the fungicide Captan, which is apparently strongly linked to cancer, birth deformities, and miscarriages. Will the minister make public the recommendations of her department to the Department of Agriculture? Will she also state what her own department will do to control the use of Captan in such non-agricultural uses as wallpaper, cosmetics, and pharmaceuticals?


Hon. Monique Begin (Minister of National Health and Welfare):: Madam Speaker, I have no hesitation in making public the letter and the recommendations which I sent to my colleague the Minister of Agriculture, and also, if required- and if the Minister of Agriculture feels this appropriate since he is in a client relationship with my department-in making public also the basic study which gives an update of scientific literature about the dangers of the fungicide Captan which are known at the present time, and in this regard, I do not agree with the preamble of the hon. member. However, if we are to follow the rules of the game, this question would be better addressed to the Minister of Agriculture himself since he has the legal responsibility to publish these documents. I would certainly not object to it.


Simon Leendert de Jong: Madam Speaker, in fact the Minister of Agriculture was asked and, as usual, he gave an answer which nobody quite understands yet.


ROLE PLAYED BY DEPARTMENT OF AGRICULTURE COMMITTEE
Simon Leendert de Jong: My supplementary question is directed to the same minister. On May 22 the Minister of Agriculture established a 17-member committee to
review the Captan issue and other issues relating to fungicides, herbicides, etc. Does this new committee replace the role the Department of National Health and Welfare has played in terms of its recommendations for the registration of these chemicals? If so, what new technology and what new capacity would this committee bring to the job that the Department of National Health and Welfare does not have?


Monique Bégin: No, Madam Speaker. The role of Health and Welfare is quite clear. I am looking into the eventual need of making the procedure for giving health advice more stringent and formal. Our role is not replaced by that committee. If the hon. member had read the press release it would be absolutely obvious to him that my advice to the agriculture department concerns the exact state of knowledge we have with regard to Captan, and any recommendations. The basic recommendation is to ban Captan from domestic household use-and there was a wide misinterpretation of what I had recommended- because of small open spaces in city gardens where children and, perhaps, pregnant mothers may be exposed to it. So we want to ban the household use of Captan and not its use by farmers in wide open spaces, and according to more strict control and eventual limitation of its use. It is not a ban which we are recommending for farmers. Rather, the committee will study other recommendations which will change the use of a great many of these products.


THE ADMINISTRATION
Simon Leendert de Jong: Madam Speaker, my final supplementary question is directed to the Prime Minister. What we have here is a special committee established by the Department of Agriculture which seems to all of us to begin to replace what the Department of Health should be doing, despite what the Minister of National Health and Welfare has just said. As well, the Minister of the Environment, in a news release of March 31, 1981, stated that his department will become thoroughly involved with toxic materials and that it would become a major priority of his department-


Madam Speaker:: Order, please.


Simon Leendert de Jong: The Minister of the Environment states that he is concerned about toxic materials which are not even included for discussion by the committee established by the Minister of Agriculture. The Department of Health is really being ignored. Who is in charge of the question of chemicals and toxic substances in Canada?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, since this particular chemical substance is used in relation to agriculture it was deemed that the Minister of
May 26, 1981

Agriculture should be put in charge of this particular aspect of environmental and health concerns.
It frequently occurs that a particular subject matter falls within the purview of several departments. We attempt to put the minister who is more directly concerned in charge.
The Minister of Agriculture is presently attending the World Food Conference. He is frequently available in the House, and he will be happy to deal with hon. members' questions as soon as he returns.


THE ECONOMY
John Carnell Crosbie: Madam Speaker, my question is for the Minister of Finance. In a speech which I gave a week or so ago I advised the public not to blame Governor Bouey but to blame the government which got us into this mess, and which will do nothing to get us out.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: On October 29, 1979, the present Minister of Employment and Immigration was the housing critic for the party in opposition at a time when mortgage rates were 11 Vi per cent-8 per cent lower than they are now. At that time he said this:
If there is a requirement to raise interest rates, there is an equal requirement to help those people who are hurt by those interest rate increases.
That was the policy of the Liberal party on October 29, 1979. Interest rates have risen 7 per cent to 8 per cent since then, and mortgage interest rates are hurting hundreds of thousands across the country. When will the minister observe the requirement to help those people who are hurt by these interest rate increases and who did not cause them?


Allan Joseph MacEachen: Madam Speaker, I think I answered that question in reply to a question put by the Leader of the Opposition.


Flora Isabel MacDonald: When did you answer a question.


ASSISTANCE TO HOME OWNERS
John Carnell Crosbie: Madam Speaker, the minister is giving us more gibberish from Gabon. The minister's policy is the Gabon policy-return to the jungle. Is that his advice to Canadians?


Some hon. Members:: Oh, oh!


John Carnell Crosbie: All we need are tree houses and we can swing from tree to tree!
My question to the minister is this: on March 11, 1980, the minister said that the federal government will consider special assistance to home owners if interest rates soar under the new
Oral Questions
floating rate approach. Interest rates have now gone up 5 per cent more than they were in March of 1980.
I have in my hand a letter from a man whose mortgage is at 11.25 per cent now and will be raised to 19 per cent-


Some hon. Members:: Order.


Madam Speaker:: Order, please.


John Carnell Crosbie: -he has already stopped buying groceries, clothing-


Madam Speaker:: Order, please.


John Carnell Crosbie: My question to the minister is: here is one of thousands of Canadians, who has cut down spending on groceries, clothing, maintenance-


Madam Speaker:: Order, please.


John Carnell Crosbie: What action will the minister now take to carry out his commitment?


Madam Speaker:: I am sure the hon. member heard me call Order. I must remind him that when I do call for order he must resume his seat and find out why-


John Carnell Crosbie: We cannot hear you because of the din by members opposite.


Madam Speaker:: -I am calling him back to order. I think the hon. member knows his question has been a bit lengthy.


John Carnell Crosbie: When will the minister take action to carry out that commitment made on March 11, particularly in view of the fact that housing starts in Newfoundland, for example, will be down 25 per cent this year from the housing starts forecast?


Allan Joseph MacEachen: Madam Speaker, once again I want to remind the hon. member, as I reminded the hon. member for St. John's East, that there has been a very sharp increase in housing starts, both in urban and rural centres in all parts of Canada.


John Carnell Crosbie: That is the past.


Allan Joseph MacEachen: The hon. member says that that is the past. I am talking about the month of April, 1981, which showed an increase of 50 per cent, which showed a very substantial increase in housing starts over April of 1980.
The hon. member has quoted statements which were made more than a year ago about the interest rate situation which existed at that time. The hon. member knows that at that particular time we monitored the situation very carefully. We entered into discussions with financial institutions, and arrangements were made by the minister responsible for Canada Mortgage and Housing Corporation to assist where required. The fact of the matter was that because of the very rapid increase in incomes which took place between the original negotiation for the mortgage and its renewal, the problem

May 26, 1981
Oral Questions
was handled and managed. I have said in the House of Commons, Madam Speaker, that I am taking the same attitude at the present time.
I want to tell the hon. member for Kingston and the Islands that she will never have to worry that the hon. member for St. John's West will qualify as secretary of state for external affairs after his views about Gabon.


Some hon. Members:: Hear, hear!


RESTRICTIVE TRADE PRACTICES
Hon. Sinclair Stevens (York-Peel):: Madam Speaker, in the absence of the Minister of Consumer and Corporate Affairs my question is directed to the Prime Minister. In view of the fact that the inquiry into the marketing of uranium in Canada has been going on for 44 months, and since we can only presume that Mr. Bertrand would not have been dumped into the Anti-dumping Tribunal without that inquiry being completed, would the Prime Minister confirm that the inquiry has been completed, that a report is in position, and would he indicate when it will be made public?


Pierre Elliott Trudeau: Madam Speaker, it is my understanding that the report has been completed and that it was Mr. Bertrand's intention to hand it over to the relevant people had he not been involved in a premature leakage of his change of functions. I understand that the report has been completed and that Mr. Bertrand has transmitted it.


Sinclair McKnight Stevens: Madam Speaker, my recollection is that Mr. Bertrand's shift was announced by the government and not leaked.


REQUEST THAT REPORT BE MADE PUBLIC
Sinclair McKnight Stevens: I would like to follow up my line of questioning. If the report is complete, and since it may touch on certain former ministers and senior public servants, as well as various mining and other companies in Canada, would the Prime Minister or perhaps the Attorney General of Canada, since I see he is preparing himself to answer my question, indicate what is intended with respect to the report? Will it all be made public? Can we be assured that none of the report will be changed; and, above all, will prosecutions or other action be taken?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, I can tell the hon. member that the director has sent his report to the Attorney General of Canada. We received it last week and we
have begun to examine it. We shall have to make the decisions concerning the recommendations it contains in the weeks to come, and we are not in a position to make any other comment before the review by the Department of Justice is completed.


HEALTH CARE
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Madam Speaker, my question is directed to the Minister of Health and Welfare. The minister knows that the Health, Welfare and Social Affairs Committee this morning requested her to convene a meeting involving herself, the Minister of Indian Affairs and Northern Development, Quebec authorities, and the James Bay Cree. The meetings were to resolve questions of jurisdiction and funding regarding the health care of the James Bay Cree. Pending the outcome of such meetings, the committee moved that the Departments of National Health and Welfare and of Indian Affairs and Northern Development should continue to meet their responsibilities for the health care of the James Bay Cree. Will the minister now permit her department to meet its responsibility for the health care of the Cree and to prevent another outbreak of gastroenteritis like the one which last year took the lives of several infant children?
[ Translation]


Monique Bégin: Madam Speaker, I do not know if it is customary to repeat the discussions held in a committee. The situation is this; this morning, an amendment to the main motion, which I welcome since finally all the interested parties will be able to have a round-table discussion on the health of Indians and health infrastructures, was passed. I objected to the amendment for the simple reason that-and I can repeat it to the House-since the transfer of powers and responsibilities several months ago, the federal Minister of National Health and Welfare cannot get into the health stations, such as the hospitals, and so on, unless it is at the request of the Cree Indians and the province of Quebec. I suggested to the hon. members that they amend their resolution for that very reason, but they refused to do so. Therefore, I am unfortunately unable to act on the basis of the amendment.


PROVISION OF SERVICES FOLLOWING DEPARTURE OF DOCTORS
James Douglas Manly: Madam Speaker, the committee requested that the departments continue their historic obligations in this way. There is nothing in the James Bay agreement that absolves these departments from that responsibility. Summer is the time when sewage and water problems become most acute, and the problem of gastroenteritis is going to come to the fore again. I ask the minister
May 26, 1981

what steps is she going to take to ensure that there will be adequate medical attention for the people of that area when the doctors finally leave in another two or three weeks from the hospital at Chisasibi?

Hon. Monique Begin (Minister of National Health and
Welfare): Madam speaker, I thought that 1 had made myself clearly understood. We have given an answer to this same question I do not know how many times. The immediate responsibility for the health of the James Bay Indians is no longer mine. I am not even authorized to go into health stations, for instance. It seems to me that I am explaining my position very clearly. I have spoken with the Quebec authorities about this matter. After the meeting this morning, I spoke once again with my officials, and they assured me that they have very recent information to the effect that health workers of Quebec, those who were hired under contract, as well as the board of directors for health of the Cree Indians, are working very well at this moment and that all health workers are in place. I cannot give the hon. member any other assurance. The following step will be to see to it that the health infrastructures, including sewers and drinking water, are in place, at least in a basic but sufficient form, and I shall see to it as requested by the committee.


RESTRICTIVE TRADE PRACTICES
Mr. Chris Speyer (Cambridge):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. The minister will know that ten years have elapsed since the formation of the uranium cartel, and that in 1976 the government invoked an order in council which has really effectively prevented the people of Canada from understanding the facts and details with respect to that cartel and government participation in the cartel.
In light of the answer by the Prime Minister that the report is now completed, and in light of the fact that 12 major firms have settled their anti-trust lawsuits in the United States, will the minister immediately rescind the order in council so that freedom of speech and freedom of disclosure can again see the light of day in this area?


Some hon. Members:: Hear, hear!

Hon. Marc Lalonde (Minister of Energy, Mines and
Resources): Madam Speaker, I do not have the authority to repeal orders in council.
Oral Questions


REPETITION OF REQUEST
Chris Speyer: Madam Speaker, I pose exactly the same question to the Prime Minister, who does have the power.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, the hon. member may not have noticed, but I was talking to the Minister of National Health and Welfare when the question was being asked. Will the hon. member please repeat it?


Chris Speyer: It has been ten years since the formation of the uranium cartel. We know that there has been a restrictive series of orders in council; one in September of 1976 and one in April of 1977. One of them is still in place, and that limits freedom of speech and limits freedom of disclosure.
In light of the Prime Minister's answer to the effect that the inquiry is now ready to be published, and in light of the fact that the major uranium firms have settled their anti-trust lawsuits in the United States, will the Prime Minister take immediate action to ensure that this order in council, which is odious to all of us who believe in free speech, is immediately rescinded?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, the hon. member declares that the order in council is odious to everyone who believes in free speech. I would like to remind the hon. member and the House that these orders in council were adopted in defence of Canadian interests against the extraterritorial application of American law.
If the hon. member remembers the circumstance, it was the American uranium industry and government which took restrictive measures preventing the entry into the United States of competitive Canadian producers, and that is why many countries joined with Canada in an international understanding in order to make sure that the Canadian industry would not be destroyed by the American industry. When the case was taken to the American courts, the Canadian government took action to make sure that American law would not be binding and compelling on Canadian citizens and corporations. That is the circumstance with respect to what the hon. member described as odious legislation.


Some hon. Members:: No, no!


Pierre Elliott Trudeau: The hon. member asks if I will consider rescinding these orders in council. I will certainly take that under advisement. If there is no longer any danger of damage or of prosecution to Canadian nationals, then I see no reason why we should not make it public.

May 26, 1981
Oral Questions PUBLIC SERVICE


THREATS TO CUSTOMS OFFICIALS-MANNING OF ISOLATED POSTS
Rodney Edward Murphy: Madam Speaker, my question is directed to the President of the Treasury Board. Yesterday the Public Service Alliance of Canada released an extensive report on the health and safety hazards of customs inspectors. This document gives information on case after case where officials have been threatened or beaten up at isolated posts at Canada's borders. These locations are well known to criminal elements, escaped convicts and smugglers. Will the minister authorize funding which will allow two persons to be at these posts for every shift of the day?


Hon. Donald J. Johnston (President of the Treasury Board):: Madam Speaker, I was somewhat surprised to read of the report, not having received a prior copy or having had discussions with the Public Service Alliance with respect thereto. Obviously the report will be studied, and if it is decided that there are safety issues involved of the magnitude that have been discussed at the press conference and in today's press, then clearly some action may be required.


RIGHT TO REFUSE DANGEROUS WORK
Rodney Edward Murphy: Madam Speaker, the minister admits that there have been extensive discussions over the years, but what we need is action because the beatings and the threats are still taking place. This report also lists work place hazards which the customs officials face, especially exhaust fumes, carbon monoxide and nitrogen dioxide and other fumes which are hurting the health of these workers. Since the minister has shown little sympathy for allowing federal government employees the protection of part IV of the Canada Labour Code, will the minister guarantee the right to refuse work which is dangerous, to all customs officials?


Donald James Johnston: Madam Speaker, I am somewhat astonished by the allegation that I have shown little concern about the health and safety of public service employees. In fact, I have pointed out to the hon. member for Churchill on a number of occasions that the standards established by the Treasury Board with respect to employees of the public service have, in nearly every instance, exceeded those provided for under part IV of the Canada Labour Code. The hon. member is aware of that. Therefore the allegation is completely and totally without foundation.
Our safety record and our concern for the health of employees are well known. As I pointed out a moment ago, if we determine that there is validity to these allegations, and the facts justify action, then appropriate action will be taken.


ADMINISTRATION OF JUSTICE
Mr. David Kilgour (Edmonton-Strathcona):: Madam Speaker, my question is for the Minister of Justice.
A Quebec newspaper reports today that over 325,000 people have signed a petition asking all levels of government to ban the sale of pornographic material to minors.
Would the minister tell us whether he intends to change Bill C-53 so as to include a ban on pornographic publications involving minors, children? Would the minister also inform us whether he intends to amend the Criminal Code or the Excise Tax Act in order to prohibit more adequately the import of pornographic material using minors into Canada?


Joseph Jacques Jean Chrétien: Madam Speaker, the purpose of Bill C-53 which is now before the House is to amend the Criminal Code in order to put teeth into the provisions regarding pornography with minors. When the bill is sent to committee, the hon. member can put his suggestions, if he has any, to members of that committee. We are ready to proceed with consideration of this bill. However if we can come to an agreement with opposition parties for quick passage so that the bill can be sent to committee, we shall of course give due consideration to any suggestions hon. members may wish to make.


INQUIRY WHETHER MINISTER INTENDS TO TAX PORNOGRAPHIC PRODUCTS
David Kilgour: Madam Speaker, unfortunately, the bill the minister refers to does not cjeal, to my mind, with the import of pornographic material involving minors.
I should also like to put a supplementary to the Minister of National Revenue. According to Mrs. Sheila Finestone, retiring president of the Federation des Femmes du Quebec, present laws dealing with the sale, display and publicity of pornographic material are not being enforced.
Does the Minister of National Revenue intend to levy new taxes or increase present ones on that kind of material? In addition, does the minister intend to amend the Excise Tax Act or departmental regulations in order to slow down or put a stop to the import into Canada of pornographic material involving children?


Hon. William Rompkey (Minister of National Revenue):: Madam Speaker, the levying of taxes and amendments to the act in question are not under my purview, but under that of the Minister of Finance. We implement the act as the law exists, and my officials screen pornographic material and
May 26, 1981

prohibit its import into Canada. We intend to enforce the law as it presently exists. With regard to the future law, I will, of course, be consulting with my colleagues, the Minister of Justice and the Minister of Finance.


METRIC CONVERSION
Mr, Bill Domm (Peterborough):: Madam Speaker, my question is for the Minister of State for Small Businesses and Tourism. It stems from two notices which arrived in my office this morning. One is a transcript of one sentence from the executive director of the Metric Commission in which he says the members in the sector dealing with scales in the retail food industry at a scheduled meeting for conversion of scales had, and I quote:
-agreed that the conversion to metric in Canada in 1982 should be more closely tied to our trading partner to the south, the United States-
For that reason the executive director was recommending a delay in the implementation of metric at this time.
In light of the minister's answer in the House a week ago that he would take into consideration the submissions of the Canadian Federation of Retail Grocers and the major corporate chains, and now that he has the Metric Commission opposed to the implementation of metric at this time, will the minister finally represent the small business sector in Canada and go before cabinet to delay forcing metric conversion, making Canadian measurement illegal in January, 1982?


Hon. Charles Lapointe (Minister of State (Small Businesses and Tourism)):: Madam Speaker, the hon. member should have read the second paragraph of the notice that was sent to me by the task force on metric scale conversion in the retail food sector; he would then have indicated that in fact the task force recommends to defer initiation of the scale conversion process, however in the second paragraph it is mentioned that should the government decide to go ahead, it will be willing to co-operate fully with the government.


REQUEST THAT MINISTER INTERCEDE
William Henry (Bill) Domm: Madam Speaker, I would like to read what the executive director said in his second paragraph:
However, if the federal government proceeds against the wishes of this sector to publish that part of the Gazette making Canadian measurement illegal, the working group on scales in the retail food industry will continue to meet to minimize the costs and the confusion.
The third paragraph reads:
The committee members called upon the government-
Oral Questions


Madam Speaker:: Order, please. Does the hon. member have a question, or does he just want to read a communique to the minister?


William Henry (Bill) Domm: Madam Speaker, I have a question, but we continue to get bad answers from the other side.
However, my supplementary question is also for the Minister of State for Small Businesses and Tourism. Will he intercede and remove the order in council causing fines, imprisonment and lockups if people continue using imperial measurement in 1982 and 1983? Will the minister represent the small business sector, or will he go the route of the last two cabinet ministers on the government side who failed to listen to the small business sector?


Madam Speaker:: Order, please.


Some hon. Members:: Oh, oh!


Erik Nielsen: Do we not receive an answer?


NEGOTIATIONS WITH PROVINCE OF ALBERTA ON PRICING AGREEMENT
Mr. Peter Elzinga (Pembina):: Madam Speaker, my question is for the Right Hon. Prime Minister. Because of the impasse as far as reaching an energy agreement with the producing provinces is concerned, will the Prime Minister give consideration to instructing his Minister of Energy, Mines and Resources to send the Petro-Canada negotiating team responsible for negotiating the Petrofina agreement to Alberta to negotiate a pricing agreement?


An hon. Member:: What about Maurice Strong?


Mr. Andre:: He is too busy on his ranch in Colorado.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I think the hon. member has the answers, Madam Speaker.


ENVIRONMENTAL AFFAIRS
Hon. George Hees (Northumberland):: Madam Speaker, I wish to address a question to the Minister of the Environment. As the minister has had several meetings with officials of the United States government since President Reagan's visit to Canada when he assured Canadians that the American government would work with the Canadian government to greatly decrease acid rain, would the minister advise the House what movement there has been so far on the part of the

May 26, 1981
Oral Questions
American government to work in this direction? If there has been none so far, what action is planned immediately by that government?


Hon. John Roberts (Minister of State for Science and Technology and Minister of the Environment):: Madam Speaker, as the hon. member may know, I have, on several occasions, visited Washington to discuss with officials of the American administration our common problem which is caused by the acid rain generated in our two countries. So far, the response that we have received from the administration is encouraging. I can tell the hon. member that we expect to begin the formal process of negotiation of the international accord governing air quality standards probably in the third week in June.


RESTRICTIVE TRADE PRACTICES
Hon. Bill Jarvis (Perth):: Madam Speaker, my question is for the Right Hon. Prime Minister. It seeks some clarification of earlier answers with respect to the report of the uranium inquiry. As I understand it, the report is completed and has been referred to the Attorney General. Pursuant to the Minister of Consumer and Corporate Affairs, undertaking in the House on March 4 when he indicated that, when completed, the findings would be made public, is the Prime Minister in a position to tell the House when he expects that report to be made public?


Pierre Elliott Trudeau: No, Madam Speaker.


ASSURANCE SOUGHT RESPECTING UNEXPURGATED REPORT
William Herbert Jarvis: Madam Speaker, second and more important, the Prime Minister will be aware that from time to time reports received by government, usually those dealing with security and intelligence, have had certain sections expurgated before they are made public. Is the Prime Minister prepared to undertake to the House that the report resulting from the uranium inquiry is not of that character and that the report, once made public, will be a complete report with no expurgated sections?


Pierre Elliott Trudeau: Madam Speaker, I have not seen the report myself. I do not know its contents and, therefore, I cannot answer a hypothetical question.
I would point out to the hon. member that when reports are expurgated the reason is indicated, and generally it is done in agreement with the authors of the report or, at least, with their approval, because they recognize, too, that they may have some matters in a report which could be confidential or
desirable to keep in camera. I cannot answer in this particular case because I do not know.


Mr. Hnatyshyn:: What about the accused?


FINANCE
Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, I have a question for the Minister of Finance. During the minister's absence last week questions were directed to the government House leader with regard to the possibility, and the government's intention, of extending the small business development bond to cover unincorporated businesses for working capital inventory, and an extension beyond the year which would benefit many people, including farmers and fishermen, those who are unincorporated. There was an undertaking that there would be discussions upon the minister's return. Have those discussions been held and, if so, what is the position of the government with regard to that extension?


Allan Joseph MacEachen: Madam Speaker, I am currently having discussions with the minister of state on that matter.


Walter David Baker: Is the minister aware of the petitioning and the urgings that have been made to him by the Federation of Independent Business, agricultural interests, and others with regard to this matter? Will he give an undertaking to the House that he will expedite his consideration with the minister of state so that a statement or announcement can be made by the government with respect to this most important matter?


Allan Joseph MacEachen: Madam Speaker, I obviously will expedite consideration of the matter. If there is any new announcement to be made, I will advise the House immediately.


PRIVILEGE
Madam Speaker:: The other day the hon. member for Annapolis Valley-Hants (Mr. Nowlan) raised a question of privilege concerning a matter involving access by members to this building. In raising the question of privilege, he did not allege that he had personally been impeded or obstructed when entering the building. Therefore, on those grounds I do not find a prima facie case of privilege.
The hon. member did raise an important point as a result of which I have asked the Sergeant-at-Arms to hold discussions with the Royal Canadian Mounted Police, who have jurisdic-
May 26, 1981

tion outside the building, in order to find out why the incident he raised in the House had taken place. Discussions were also held with the office of the Solicitor General.
I was given an assurance by these two sources that in future any security measures taken will cause a minimum of inconvenience to members. I might add that these discussions will be ongoing because I understand there are a number of new officers on the Hill who have only recently received their training. Perhaps they are not aware of the identity of members of Parliament. I think they need to be better apprised of who is who in this House and not raise suspicions where obviously there should not be any.
I must tell hon. members that some changes have occurred in the procedures in the interests of both safety and security. Some members will have noticed that the buses no longer park illegally on the wrong side of the street. That important aspect of safety had been overlooked. In an effort to accommodate the members, the bus drivers were dropping them off on whatever side of the street was more convenient. I understand the importance of that when it is raining or snowing, but in the interests of safety I ask hon. members to accept that minor inconvenience.
Standard procedures regarding security have recently been revised. There have been some slight changes. These matters are under constant consideration and periodically new procedures are adopted which the security office feel may be better.
The hon. member for Athabasca (Mr. Shields) is not in the House. He reported an incident which occurred inside the building, which is clearly within my jurisdiction. I would simply say that corrective measures will be taken in that case. It was an unfortunate incident and I am sure it will not occur again.


POINT OF ORDER
John Carnell Crosbie: Madam Speaker, I rise on a point of order just to make sure there is no misunderstanding about my reference to that wonderful country of Gabon, which is a progressive and developing nation and an oil producer. My reference to swinging from a tree and going back to living in tree houses applied to Canada, not to Gabon where housing conditions and interest rates are likely better than in Canada. My point was that the Minister of Finance (Mr. MacEachen)-


Madam Speaker:: Order. I am sure that if that is what the hon. member said, it will be obvious to anyone who reads Hansard that his reference was not to Gabon but to Canada. Unless the hon. member wants to correct something he said, members usually do not correct after question period what they said during question period.


John Carnell Crosbie: Madam Speaker, I gave you notice today of a question of privilege regarding the Minister of Employment
Privilege-Mr. Nickerson
and Immigration (Mr. Axworthy) who is not here. I would like to adjourn that matter because of his absence.


Madam Speaker:: Order. There are other hon. members who are ahead of the hon. member for St. John's West. It is just a matter of one notice arriving at one hour and another arriving at another hour. I take questions of privilege in the order in which they arrive. The one I received first was from the hon. member for Western Arctic (Mr. Nickerson).


PRIVILEGE
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, this is the first time I have ever pre-empted the hon. member for St. John's West (Mr. Crosbie). Unlike the hon. member for St. John's West, it is a very unusual occurrence when I rise on such a matter. In fact, this is the first time I have raised a question of privilege since becoming a member of this House. It is not something I do lightly.
My concern deals with what I consider to be rather improper partisan behaviour on the part of the Minister of Indian Affairs and Northern Development (Mr. Munro). I gave Your Honour notice of this a week ago. I would have preferred to raise the matter when the minister was in the House, but he has not been here for seven days, I have no idea when he will return and under our rules questions of privilege should be raised at the earliest opportunity. Therefore, with no disrespect to the minister, whose presence I would have preferred, I will with your permission proceed today.
It seems that the minister in question finds it difficult to draw a distinction between what might be described as party affairs and public affairs. The House already has the benefit of your ruling, Madam Speaker, with respect to the opening of constituency offices throughout the north. I believe it was handed down on March 26.
My question of privilege today goes back to April 23 when, in reply to a question from myself, the minister said with regard to recent NEB decisions on the pipeline and other matters that "consultations will be held with all those people who feel seriously affected by this decision". He was referring to the people of the north.
I submit that that undertaking to consult with the people is good. However, it is the manner in which the consultations have taken place which cause me concern. Public meetings were held in Yellowknife on May 15 and 16. The meetings were organized, executed and put into effect not by the government, not by the minister's office but by the Liberal party. I wish to read two brief quotations from the literature circulated in connection with these meetings. The first is:
-the Liberal Party of the Northwest Territories has invited the Minister to attend a "Public Meeting" in Yellowknife on May 15th and 16th.

May 26, 1981
Privilege-Mr. Nickerson
Referring to the topics to be discussed, the material reads:
These three topics for discussion were chosen by the Liberal Party of the N.W.T.-
I might point out that the meeting was chaired by the local Liberal president. That evening there was a $40 a plate dinner held for party fund raising purposes, attended by the minister. You paid $40 if you wanted to see the hon. Minister of Indian Affairs and Northern Development.
I submit, Madam Speaker, that there are three areas of privilege involved here. First of all, there is the question of misleading the House in the minister's reply. He said that all people would be consulted, whereas in fact it turns out that only those people who were willing to attend a Liberal party gathering were the people who were consulted. I submit the minister is using his ministerial authority for partisan purposes. I know this is always a matter of degree, but I submit that in this case he has overstepped the line.
He has in a way insulted the public service, particularly those members employed within the Department of Indian Affairs and Northern Development. He has in fact shown that he has little or no confidence in the people who work for that department. He does not trust them to be part of the consultative processes, but would prefer to leave that to the party organization. Can you imagine, Madam Speaker, the chagrin of departmental officials who are pressured into paying $40 to the Liberal coffers in order to hear what their minister has to say to them?
1 submit that in doing these things the minister in a way has impaired my ability to do my job as a member of Parliament representing my particular constituency of Western Arctic.
I submit that I was to a certain extent misled in the House, and that neither I nor my constituents could take part in these consultations unless we were prepared to attend a Liberal party function. To many people in the west and north that is something, of course, which they would avoid at any cost.
I submit the possibility exists that public servants, those people employed within the department, were under some undue pressure to attend these partisan functions, and it is difficult for me to get independent advice from members of the public service.
That is really what I wanted to say, Madam Speaker. May I conclude by saying I do not want to see Hamilton-style politics pollute the north. I think they have enough of that in Hamilton. So far the political process in northern Canada has been rather unsullied and we do not want the extension of Hamilton-style politics into the north. We do not want to have to belong to a certain party before getting a job in the public service or being awarded a contract. We in the Northwest Territories or the Yukon do not want association with the alleged, rather unsavoury elements of society that I am led to believe is the case in Hamilton.


Madam Speaker:: In spite of the fact that the hon. minister is not present in the House, I think I can rule on this particular
question of privilege. I may remind hon. members that it is not necessary that ministers be in the House in this regard. I would have agreed to defer this question but the hon. member chose to raise it anyway, and I commend him for that because, indeed, questions of privilege cannot be delayed indefinitely, and if privilege exists it may be so important that the House cannot function before it is settled. However, I feel I can make a ruling at this time, and I am glad the hon. member chose to raise the matter today.
I must inform the hon. member that the minister in question may choose to consult whomever he wishes in the process of carrying out his departmental responsibilities. If he did tell the hon. member he would consult, I do not think he gave details as to whom he would consult, and the hon. member did not elaborate on that. At any rate, the minister is free to consult in the manner in which he himself sees fit. I certainly have no jurisdiction in respect of how a minister of the Crown discharges his departmental responsibilities in that regard, or as to whether he pleases his officials by consulting or bypassing them. That depends entirely on the style of the minister, who is free to adopt his own working methods. Of course, the Chair cannot intervene in this particular case.
The hon. member was not very explicit about the alleged impairment of his ability to discharge his duties as a member of Parliament in this House, and I think that is a very important aspect. I gather he did not feel his ability was considerably impaired or, for that matter, impaired at all. Therefore, it is difficult for me to determine that he might have a case of privilege.
The hon. member complains that he cannot obtain impartial information from officials. I think the hon. member could get the information he requires, if he persisted, from officials or from the minister. It is up to him to find ways of extracting that information from the government, its ministers or its services. I cannot help him in this particular regard through the process of a question of privilege. Therefore, I have to say that I do not find there is a prima facie case of privilege in the hon. member's question.


POINT OF ORDER
Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, I rise on a point of order. I meant to raise this question before you got to the stage of questions of privilege. My point of order arises in relation to the question period.
It is my understanding that members in this part of the House would normally be allowed to ask four questions during the question period, but it seems that this principle has been steadily eroded during the last month or two. May I respectfully suggest that, if the first round of questions and answers were shorter, more members, especially those in the back benches, could ask questions. Perhaps hon. members should
May 26, 1981

lose the right to ask supplementary questions if they cannot make their original questions shorter. I noticed that being the case with previous Speakers in this House. I say this respectfully, but I wonder what has happened to our right to ask four questions.


Madam Speaker:: First of all, 1 am not sure how many precedents there are of Speakers determining that a second supplementary question cannot be asked when the first question is rather long, but I find that an interesting suggestion.
Having regard to the second point raised by the hon. member that members of the NDP have a right to ask four questions, I think the hon. member's mathematics are not very accurate. I suggest that members of the NDP are entitled to ask about one third of the questions asked by members of the Conservative party. That does not work out to four questions on most days. There are days when I allow members of the NDP to ask four questions because they are entitled to a little more than one third. As a result, I do allow four questions once or twice a week, but usually three. That practice has been consistent since the beginning of the time I have been in this chair. I think if the hon. member looks at the statistics he will find that proportion is just about right.
If the hon. member looks back in Hansard, I think he will find that on many occasions when questions by members of the Conservative party have been unduly long and have taken up quite a lot of the time of the House during the question period I have allowed members of the NDP to ask about one third of the questions, in spite of the fact that on those days the proportion allowed members of the NDP did not work out to one third. On some days I have to work on the basis of time rather than on numbers.
I take note of the hon. member's suggestion about the length of questions. I myself find that questions tend to be very long, and I try to discipline hon. members.


An hon. Member:: And the answers too.


Madam Speaker:: The answers tend to be equally long and 1 do discipline members on the government side when answers are lengthy. Hon. members must realize that when the questions are long it is very difficult to cut off the answer, or to allow less time for the answer than for the question. However, I have heard hon. members complain when the answer on the other side was simply "No". They do not seem to appreciate that kind of short answer, so it is very hard for the Speaker to please everyone. I know that, and I just try to be as fair as possible.
Privilege-Mr. Crosbie PRIVILEGE


MR. CROSBIE-NOTICE OF QUESTION TO BE RAISED
John Carnell Crosbie: Madam Speaker, I gave Your Honour notice this morning of an important question of privilege which involves the Minister of Employment and Immigration (Mr. Axworthy) and a letter from him which is misleading and in which false information is obviously deliberately contained.
The minister is not here today. I do not think he will be here until Thursday, according to his office. I will not be here Thursday and Friday because of other public business. I am prepared to go ahead and argue this either tomorrow-there is ample precedent for it-or I can wait until next Monday when presumably the minister will be here. I am quite willing to wait until next Monday, which appears to be the first day, unless Your Honour wants to direct otherwise.


Madam Speaker:: There is no reason for the minister to be present in the House. If I need to hear the minister once the hon. member has raised his question of privilege, I can defer my ruling on that question of privilege and wait until the minister is heard. However, I can hear the question of privilege, and I urge the hon. member to raise his question of privilege today. If 1 need further clarification from the minister, I can hear that later; but if the hon. member wishes, I can hear his question today. In fact, I prefer that the matter not be deferred.


John Carnell Crosbie: Madam Speaker, because I checked with the minister's office and was told he was not here, I did not bring the documents and the things I need to make the point now. I can go upstairs and get them and bring them down in a few minutes' time, or else I can go ahead tomorrow.


Erik Nielsen: Madam Speaker, may I speak very briefly on this point? While it is true that there is nothing in the Standing Orders or in our rules which prevents questions of privilege from being raised in the absence of a minister or a member who it is anticipated will be involved in the question of privilege, nevertheless it has been a long-standing practice traditionally in this House that courtesy is extended to the minister or member involved in a question of privilege and that the question not be raised until he is here. That is particularly true with respect to questions of privilege which involve allegations of untruthfulness, allegations of misconduct or allegations which affect ministers or members personally.
I have some knowledge of the nature of the subject matter of the question of privilege which the hon. member for St. John's West (Mr. Crosbie) intends to raise, and it does involve allegations of such a nature. In this particular circumstance I urge the Chair that it might be far more appropriate to await the return of the minister before the question is raised.


Madam Speaker:: I am not saying that I rule out that the hon. member should defer his question of privilege to another day, especially owing to the fact that, thinking that the hon. minister would not be here, the hon. member does not have the
9924

May 26, 1981
Privilege-Mr. McKinnon
documents he needs with him and therefore cannot raise the question.
The hon. member for Yukon (Mr. Nielsen) points out that there is nothing in the Standing Orders which says a question of privilege has to be heard by the other party who is affected by the question of privilege. There is indeed absolutely nothing. Those are the Standing Orders, and it is in my discretion to hear the question of privilege even if the minister whose conduct is questioned in the question of privilege is not present in the House.
There has to be a balance in relation to a question of privilege. If an hon. member has a question of privilege, then it has to be dealt with very rapidly. If we defer questions of privilege for several days and they are serious, then I wonder what the meaning of the Standing Order is and what the meaning of a question of privilege is. If it is urgent, it is urgent and therefore has to be heard immediately. So it is a balance between these two things which I am trying to reach.
I do not like deferring questions of privilege. Thanks to some hon. members, I have gained a lot of experience respecting questions of privilege. An hon. member's insistence on raising a question of privilege in the presence of a particular minister calls for a debate rather than simply exposing a question of privilege. It might be in the interest of the House that questions of privilege be raised independently of whether a minister is present or not present.
I will accept the hon. member's suggestion that he raise his question of privilege tomorrow because he does not have the documents, but I urge hon. members to raise questions of privilege at the earliest opportunity. If hon. members are not here to defend themselves, sometimes I can rule independently of hearing them, and if I need to hear them I can ask them to rise in the House on another day.
MR. MCKINNON-notice of question to be raised


Hon. Allan B. McKinnon (Victoria):: Madam Speaker, I am rising to serve notice that I intend to raise a question of privilege tomorrow. I would be pleased to tell Your Honour why I am waiting until tomorrow. The chairman of the Standing Committee on External Affairs and National Defence wishes to conduct his own investigation into this matter. I think it will take one or two days. A piece of documentary evidence which would be extremely useful to me is in French only, and I have not been able to have it translated as yet. I am not confident that I understand its full meaning.
The question of privilege concerns an attempt to falsify the minutes of a meeting of the Standing Committee on External Affairs and National Defence, and I will give Your Honour notice tomorrow.


Madam Speaker:: I have said repeatedly that I need not have oral notice in the House of a question of privilege. The hon. member can walk out of the House now and give me a written notice of his question of privilege, and that will suffice. Questions of privilege are subject to notice to the Chair in writing,
in which notice the member should give an indication of what the question of privilege is all about. I do not need oral notice in the House.



ROUTINE PROCEEDINGS


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 137, 1,026, 1,559, 1,600, 1,608, 1,908, 2,195, 2,204, 2,234, 2,322, 2,370 and 2,407.


Mr. Greenaway: 1.	For each year 1975 to date, by province, how many earth receiving stations for the reception of satellite broadcast signals were licenced by (a) CRTC (b) the Department of Transport and, in each case, what were the reasons for approval?
2.	For the same years, by province, how many earth receiving stations for the reception of satellite broadcast signals have been established without licences?
3.	Have any such cases been prosecuted and (a) if so (i) how many (ii) where were they located (iii) what was the outcome of the prosecutions (b) if not, for what reason?


David Michael Collenette: I am informed by the Departments of Communications and Transport as follows:
1.	(a) Television receive earth stations are licensed by the Department of Communications under the Radio Act.
(b) Not applicable. This function was assumed by the Department of Communications approximately 12 years ago.
Department of Communications television receive earth station licences issued, by provinces, for the year 1975 to 1980:
1975	1976	1977	1978	1979	1980B.C.	1	1	6	7Alta.	1	3Sask.	1	1	1	8Man.	2	3Ont.	1	12	21Que.	3	3	12	14	21	63N.B.	3N.S.	1	2P.E.I.	2Nfld.	1	1	1	1	2	2Yukon	3	6	6	6	6N.W.T.	1	2	4	4	4	4
May 26, 1981

In each case, television receive earth station licences were approved when the applicant satisfied the licensing requirements of the Department of Communications.
2.	No statistics are available on the number of unlicensed earth stations for the years 1975 to 1979. The following figures are estimates only for the current year:
B.C.	60
Alta.	13
Sask.	6
Man.	12
Ont.	16
Que.	7
N.B.	1
N.S.	2
P.E.I.	0
Nfld.	4
Yukon	9
N.W.T.	17
3.	It appears that most of the unlicensed earth stations are being used to receive signals from U.S. satellites that carry television programs. In view of the fact that this matter is closely linked to the recent CRTC report on the extension of television services to remote areas, which is currently under review by the Minister of Communications and the CRTC, no enforcement action has been initiated. However, the over-all situation is being monitored and some investigations are being made. Enforcement action could be taken in specific situations prior to a resolution of the broadcasting policy and regulatory issues.


Mr. Cook: 1.	How many illegal dish antennas are operating in (a) British Columbia (b) Alberta (c) Saskatchewan (d) Manitoba (e) the Yukon (0 the Northwest Territories (g) Ontario (h) Quebec (/') New Brunswick (j) Nova Scotia (k) Prince Edward Island (1) Newfoundland?
2.	Of the illegal dish antennas in British Columbia and the Yukon, how many are operating in areas where there is poor reception or no reception of the CBC signal?
3.	Has the government ever forced the closing down of an illegal dish antenna in British Columbia or in the Yukon and, if so, near which communities were they situated?
4.	Does the government intend to close down any of the illegal dish antennas it is presently aware of and, if so, near which communities are they situated?
5.	Did the government receive complaints from the American government regarding illegal dish antennas in Canada pirating TV signals from the U.S. Satcom 1 satellite and, if so, what was the government's response?


Mr. Peter Stollery (Parliamentary Secretary to Secretary of State and Minister of Communications):: In so far as the
Department of Communications is concerned, the answer to the above question is as follows:
(a) British Columbia	60	(g) Ontario	16(b) Alberta	13	(h) Quebec	7(c) Saskatchewan	6	(i) New Brunswick	1(d) Manitoba	12	(j) Nova Scotia	2(e) Yukon	9	(k) Prince Edward Island	0(0 N.W.T.	17	(1) Newfoundland	4
Order Paper Questions
2.	It is estimated that there are five unlicensed earth stations in British Columbia and two in the Yukon operating in areas where there is poor or no reception of CBC signals from standard television transmitters.
3.	Both the CRTC and the Department of Communications have communicated with many persons owning or operating such facilities to advise them of the illegalities involved. To our knowledge, such notification resulted in the closing down of an unlicensed installation in Whitehorse.
4.	It appears that most of the unlicensed earth stations are being used to receive signals from U.S. satellites that carry television programs. In view of the fact that this matter is closely linked to the recent CRTC report on the extension of television services to remote areas, which is currently under review by the Minister of Communications and the CRTC, no enforcement action has been initiated. However, the over-all situation is being monitored and some investigations are being made. Enforcement action could be taken in specific situations prior to a resolution of the broadcasting policy and regulatory issues.
5.	No complaints have been received from the American government regarding unlicensed earth stations in Canada pirating TV signals from U.S. satellites. The unauthorized reception of satellite television program signals, including those from Canadian satellites, is also a problem in the United States. It is understood that the government of the United States does not consider the direct reception of U.S. satellite signals in Canada to be permissible under existing international agreements.


Mr. Cossitt: With reference to the answer to question No. 31 which states in part, that A. V. Enguibarov, commercial counsellor at the U.S.S.R. Embassy made a visit to Brockville, Ontario (a) what was the date of this visit (b) was any reason given to the Department of External Affairs for the visit (c) does the government have any knowledge from any source whatsoever as to what he did while in Brockville, Ontario?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: (a) Mr. A. V. Enguibarov visited Brockville on April 14, 1979.
(b) and (c) In so far as the Department of External Affairs is concerned, Mr. Enguibarov was not required to state, and did not volunteer, the reasons for his visit to Brockville.


Mr. Cossitt: Did the Minister of State for Multiculturalism receive letters in support of the constitutional ads and, if so (a) how many (b) from whom including any members of Parliament in the opposition?

May 26, 1981
Order Paper Questions


Hon. Jim Fleming (Minister of State (Multiculturalism)):: The Minister of State for Multiculturalism has received favourable responses. However, records are not maintained in such a way as to provide an accurate answer to this question.


Mr. Cossitt: 1.	(a) How many vehicles at the Embassy of the U.S.S.R. in Ottawa are registered in the name of Mr. A. V. Enguibarov (b) was the total five in 1978 (c) what are all the reasons given that he requires so many vehicles?
2.	Did he use one of the vehicles on his trip to Brockville, Ontario as referred to in the answer to question No. 31 and, if so, what was the licence number, make, model and colour?


Mark R. MacGuigan: 1.	(a) In 1981, no vehicles at the Embassy of the U.S.S.R.
in Ottawa are registered in the name of Mr. Enguibarov.
(b)	In 1978, six vehicles were registered in the name of Mr. Enguibarov.
(c)	From 1978 to 1980, all vehicles used by the personnel of the Soviet trade mission were registered in the name of Mr. Enguibarov. The number of vehicles registered to, and used by, Mr. Enguibarov and other members of the Soviet trade mission is commensurate with the size of the personnel of the trade mission and is not considered disproportionate or excessive.
2.	For the trip in question (to Brockville, Ontario), Mr. Enguibarov used a red 1978 Buick Electra, licence No. CDA 248.


Mr. Beatty: 1.	Is CBC planning to show the documentary "Ten Years After" in the near future and (a) if so, on what date (b) if not, for what reasons?
2.	What role does CBC Toronto have to play in the decisions to distribute CBC documentaries?
3.	Will CBC distribute the program to independents who would like to borrow it?


Peter A. Stollery: I am informed by the Canadian Broadcasting Corporation as follows: 1. No.
(a)	Not applicable.
(b)	The program does not meet a basic criterion for a CBC documentary on a controversial issue, namely that it make a serious attempt to include all points of view. In the corporation's judgment, the research for the program was not complete, which left the final production badly out of balance.
2.	The senior officers at the CBC's English network headquarters in Toronto have the operational responsibility for deciding which programs will be carried on the national network.
3.	No.


Mr. Herbert: In each of the past five years, how many authorized person-years in the Public Service have not been used and what is the estimate for the current year?


Donald James Johnston: The unused authorized person-years in the last five years were as follows:
1975-76	11,952
1976-77	8,972
1977-78	5,298
1978-79	8,367
1979-80	5,788
Although the data for 1980-81 are incomplete, the unused person-years should be in the order of 6,000. Unlike financial planning, the person-year authorities are not discounted for expected lapses. Therefore these data reflect unused authority after the facts.


Mr. Cossitt: Are there any other files, in addition to the Taschereau Papers, that have been retained in the Public Archives and not made public after the 30-year statutory limit and, if so, what is the name of each file?


Peter A. Stollery: I am informed by the Public Archives as follows: there are approximately 6,000 files of public records in the Public Archives of Canada that have not been made public after the 30-year statutory limit. These Files are in the exempted category as defined by cabinet directive June 23, 1977.
As well, approximately 1 per cent of collections of private papers of individuals and organizations in the Public Archives have some access control for a specified time period. This access control is usually a condition of their acquisition and is implemented to protect personal privacy.
A list of each file in the exempted category is not readily available and would require an inordinate amount of work, time and cost. However, these files are readily identifiable in the existing lists and indexes that serve as finding aids to the public records under the custody of the Public Archives.


Mr. Cossitt: Did order in council number 1966-1749 dated September 9, 1966, provide for the setting up of an Advisory Council on Public Records and, if so (a) on what
May 26, 1981

date was it set up (b) what are the names and qualifications of the (i) present members (ii) previous members of the council?


Peter A. Stollery: I am informed by the Public Archives as follows: the Public Records order (P.C. 1966-1749, dated 9 September, 1966) provided for the establishment of the Advisory Council on Public Records (ACPR). The order in council specified that the council was to be under the chairmanship of the Dominion Archivist who would nominate 12 members and present the nominations to the Treasury Board for approval.
(a)	The members were appointed on February 8, 1967, under the authority of Treasury Board minute T.B. 664903. The first meeting was held on July 17, 1967.
(b)	The Public Records order states that nine members are to be appointed from government departments and agencies, including the Treasury Board at all times. Traditionally, these people have been records managers of major government departments with a great deal of experience in the Field of records management. Three members from outside the public service are appointed as representatives of the Canadian Historical Association (CHA), The Canadian Political Science Association (CPSA) and the Records Management Institute (RMI).
Present Members	
Dr. W.I. Smith Dominion Archivist Chairman, ACPR	1968-1981
Mr. F. Boileau Chief, Information Resources Indian and Northern Affairs	1975-1978 1980-1981
Mr. Y. Cloutier Director, Records Management Systems National Defence	1975-1981
Mr. R J. Denault Records Manager Industry, Trade and Commerce	1979-1981
Chief Supt. W. Drew Director, Records Management Royal Canadian Mounted Police	1975-1981
Mr. J.G. Dumont Chief, Records Management Ministry of Transport	1972-1981
Professor D. M.L. Farr Paterson Centre for International Programs Carleton University (CHA Representative)	1967-1981
Mr. H. Greffe Records Manager Public Works	1977-1981
Mrs. E.V. Reynolds Senior Analyst Records Management Employment and Immigration Canada	1968-1971 1980-1981
Mr. EJ. Riley Records Manager Revenue Canada-Taxation	1972-1981
Professor D.C. Rowat Department of Political Science Carleton University (CPSA representative)	1977-1981
Order Paper Questions
Mr. A. Scharf Records Manager Canada Post (RMI representative)
Mr. R.M. Westington
Task Force on Access to Information and Privacy Administrative Policy Branch Treasury Board Canada
(ii) Previous Members
Dr. W.K. Lamb Dominion Archivist Chairman, ACPR
Mr. J. Cardillo
Chief, Records Management Division Department of National Defence
Mr. W.A. Cole
Paperwork Management Advisor Management Improvement Branch Treasury Board
Mr. E.R. Forde
Office Services Department
Central Mortgage and Housing Corporation
Mr. W.R. Greene Chief of Records Department of Public Works
Mr. G.E. Logan Chief Records Officer
Department of National Health and Welfare Mr. F. Mills
Coordinator of Registries Post Office Department
Mr. J.C. O'Reilly Records Manager Department of Transport
Mr. P.R. Parent
Director, Administrative Services Branch Department of Labour
Superintendent A.C. Potter
Officer-in-Charge
Central Registry
Royal Canadian Mounted Police
Mr. Louis Sabourin
Dean of the Faculty of Social Sciences
University of Ottawa
(CPSA representative)
Mr. K.G. Stethem Chief, Central Registry National Research Council
Superintendent R.M. Allan
Officer-in-Charge
Central Registry
Royal Canadian Mounted Police
Dr. George Buxton (CPSA representative)
Dr. A.A. Day
Head, Historical Division
Department of External Affairs
Mr. R.G. Moir
Chief, Records Management Branch National Revenue-Customs and Excise
Mr. A.J. Banerd Program Branch Treasury Board
Mr. J.H. Crossan Program Branch Treasury Board
1973-1981
1967-1972
1967-1968
1967-1972
1967-1970
1967-1968
1967-	1976
1968-	1972
1968-1970
1968-	1971
1969-	1970
1970-	1972

May 26, 1981
Order Paper Questions
Mr. L.R. Hale Records Manager Dominion Bureau of Statistics	1970-1976
Mr. D.F. Wall Assistant Secretary to the Cabinet Privy Council Office	1970-1972
Mr. T.L. Williams Chief, Records Management Division Department of National Defence	1972-1975
Mr. G. Cousineau Deputy Secretary Treasury Board	1972-1973
Mr. L.N. Gervais Paperwork Manager Finance/Treasury Board	1972-1973
Mr. J.E. St. Arnaud Records Manager Department of Transport	1972-1975
Superintendent G.R. Hamelin Director, Records Services Royal Canadian Mounted Police	1972-1975
Mr. M.A.J. Lafontaine Deputy Secretary Treasury Board	1973-1977
Dr. K.D. McRae (CPSA representative)	1973-1976
Mr. G.E.F. Belkic Assistant Records Manager Department of Consumer and Corporate Affairs	1974-1975
Mr. W.J. Pearce Records Manager Department of Indian and Northern Affairs	1975-1978
Mr. R.A. Paquette Records Manager Regional Economic Expansion Department	1977-1980
Mr. H. Rodgers Information Systems Division Administrative Policy Branch Treasury Board Canada	1977-1980


Mr. Herbert: that: the total amount of loan approvals and export credit insurance made by the Export Development Corporation for each of the past five years to the United Kingdom are as follows:
Year
Loans Signed Exports Insured Canadian $ (000) Canadian $ (000)
1977
1979
First three months of 198]
$ 1,540	$111,578
Nil	$128,543
Nil	$122,205
$14,555	$118,438
$ 8,750	$178,563
Nil	$ 34,423


Mr. Gamble: Is the Canadian International Development Agency sponsoring a Third World Village at the Salon de la Femme in Montreal from April 24 to May 3, 1981, for the second year "to help visitors understand the situation in developing countries" and, if so, what (a) is the total budgeted cost for 1981 (b) was the total budgeted cost and the actual cost of the exhibit in 1980?


Mark R. MacGuigan: Yes.
(a)	The 1981 budgeted cost is $85,000.
(b)	The 1980 budgeted cost was $22,000, and the actual cost was $32,000.


Mr. Herbert: 1.	By province, what amount was contributed by the Canada Mortgage and Housing Corporation in the past Five years under the Public Housing Program, where the federal and provincial governments built the projects in partnership, and what number of units were built?
For each of the past five years, what was the total amount of loan approvals and export credit insurance made by the Export Development Corporation to the United Kingdom?


Hon. Herb Gray (Minister of Industry, Trade and Commerce):: In so far as the Department of Industry, Trade and Commerce is concerned, Export Development Corporation states
2.	What was the amount paid by the corporation in the last full year for which figures are available for ongoing operating subsidy costs for the projects?


Hon. Paul J. Cosgrove (Minister of Public Works):: I am
advised by Canada Mortgage and Housing Corporation as follows:
1.	See list below.
2.	See list below.
	No. of	Estimated Net Federal Contribution
	Units	$000
Nfld.	150	3,950PEL	20	429N.S.	220	3,540N.B.	
Federal-Provincial Rental Housing Projects Under Section 40 of the NHA, by Province, 1976 to 1980
	1977		1978
	Estimated Net		Estimated Net
	Federal		Federal
No. of	Contribution	No. of	ContributionUnits	$000	Units	$000101	2,922	194	5,44880	1,883	10	235423	7,389	524	10,0201979	1980Estimated Net	Estimated NetFederal	FederalNo. of	Contribution	No. of	ContributionUnits	$000	Units	$000187	5,902	165	6,50137	922	42	1,082524	10,983	391	9,785
May 26, 1981

Order Paper Questions
Federal-Provincial Rental Housing Projects Under Section 40 of the NHA, by Province, 1976 to 1980
1976	1977	1978	1979	1980Estimated Net	Estimated Net	Estimated Net	Estimated Net	Estimated NetFederal	Federal	Federal	Federal	FederalNo. of	Contribution	No. of	Contribution	No. of	Contribution	No. of	Contribution	No. of	ContributionUnits	$000	Units	$000	Units	SOOO	Units	SOOO	Units	SOOOQue.	Ont.	720	Man.	100	563	Sask.	1,282	29,076	940	19,633	1,085	24,618	697	18,226	694	19,594Alta.	62	B.C.	Yukon	N.W.T.	21	757	18	1,014	110	5,595	116	6,115	85	5,868Canada	1,693	38,534	1,562	32,841	1,923	45,916	1,661	42,711	1,377	42,830
Federal Subsidies Paid Under Section 40 of the NHA for Federal-Provincial Rental Housing by Province, 1980
Nfld.	Federal Subsidies Paid $000 1,350
P.E.I.	510
N.S.	9,680
N.B.	4,750
Que.	1,222
Ont.	13,333
Man.	4,148
Sask.	8,567
Alta.	1,291
B.C.	18,397
Yukon	259
N.W.T.	808
Canada	64,315
Note: Subsidy payments made in 1980 are paid against 1979 operating expenses and may also be for operating expenses for years prior to 1979. Also not all projects approved in the last few years would have been under administration during 1980.

[Translation)


David Michael Collenette: Mr. Speaker, if questions Nos.
1,006	and 2,093 could be made orders for return, those returns would be tabled immediately.


Madam Speaker:: The questions enumerated by the hon. parliamentary secretary have been answered. Is it the pleasure of the House that questions Nos. 1,006 and 2,093 be deemed to have been made orders for return.


Some hon. Members:: Agreed.


Mr. Benjamin: 1. Since February 1978, what were the maintenance expenditures by (a) CPR (b) CNR (i) per car mile (ii) on a time basis for box cars and hopper cars in grain service?
2.	Since February 1978, what were the maintenance expenditures by (a) CPR (b) CNR for (i) box cars (ii) hopper cars (iii) freight car average in the total fleet of freight cars per car mile and on a time basis?
3.	Since February 1978, what was the monthly average number of Canadian railway passenger cars and freight cars in the United States, by type of car, and how many were owned by (a) CPR (b) CNR?
4.	Since February 1978, what was the monthly average number of U.S. owned railway passenger cars and freight cars in Canada, by type of car?
5.	Since February 1978, by week, how many grain cars were (a) unloaded at (i) Thunder Bay (ii) Churchill (iii) Vancouver (iv) Prince Rupert by CPR and CNR (b) leased by (i) CPR (ii) CNR (iii) the Canadian Wheat Board?
6.	Since February 1978, by month, how many grain cars spotted by (a) CPR (b) CNR at country elevators licenced by the Canadian Grain Commission were returned empty or which grain company agents repaired because the cars were unfit for loading?
Return tabled.


Mr. McGrath: 1.	(a) What is the role of the Atlantic Salmon Board (b) how many meetings has the Board had since its inception (c) in which locations have the meetings been held?
2.	Was the Board consulted by the government before it extended the Atlantic Salmon Compensation Program?
3.	To whom and in what amounts is compensation being paid under the Program?
4.	Will there be any change in the Atlantic commercial salmon fishery this year and, if so (a) what are the proposed changes (b) have the changes been discussed with the Board?
5.	How many commercial salmon Fishermen currently hold licences in (a) Newfoundland (b) Nova Scotia (c) New Brunswick (d) Prince Edward Island?
6.	What was the total value of the Atlantic commercial salmon fishery for the past fiscal year?
7.	How much salmon was caught commercially during the 1980 season and
what was the total value?	i
8.	How many salmon were caught by sports fishermen in the four Atlantic Provinces during 1980?
9.	Did the government offer to transfer the total surveillance of salmon rivers in Atlantic Canada to the provinces and, if so, on what date?
10.	How many salmon hatcheries does the government maintain in the four Atlantic Provinces and what is the location and cost of operation for each hatchery?
11.	What is the estimate of the number of salmon taken by Indians in New Brunswick during the 1980 season?
12.	Has the government concluded a new multinational agreement to control salmon fishing in the North West Atlantic and, if so, which countries were involved?
Return tabled.

May 26, 1981
Excise Tax


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


Madam Speaker:: Shall the remaining questions be allowed
to stand?


Mr. Friesen:: Madam Speaker, 1 rise on a point of order. Since January 21 my question No. 2,003 has been on the Order Paper. I believe I have asked about this before. It is of particular importance today now that an announcement respecting a large wheat sale to the Soviet Union has been made. The question has to do with how much credit has been extended to the Soviet Union and to the other eastern bloc countries. I understand that the western hemisphere countries have extended credit to the eastern bloc countries to the tune of $65 billion, which puts us in a very vulnerable position. I wonder if the parliamentary secretary could see to it that this question is answered as quickly as possible because I think it is germane to the headlines in the newspapers today.


David Michael Collenette: Yes, Madam Speaker, I shall follow this matter up.
1 ask, Madam Speaker, that the remaining questions be allowed to stand.


Madam Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of Bill C-57, to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs.
Madam Speaker:: As hon. members know, there are 135 motions standing on the Order Paper at the report stage of Bill C-57. I have not had an opportunity to examine all the motions to determine their procedural acceptability or, in any case, to group them for debate. However, for the moment, I suggest the following: Motions Nos. 1 and 3 could be grouped for debate and voted on separately.
Motion No. 2 is acceptable for debate and, if required, will be voted on separately.
Motions Nos. 4 and 5 will be debated together and a vote on motion No. 4 disposes of motion No. 5.
Motions Nos. 6 and 7 could be debated together with an affirmative vote on motion No. 6 disposing of motion No. 7. However, a negative vote on motion No. 6 will necessitate the question being put on motion No. 7.
Motions Nos. 8, 13 and 58, standing in the name of the minister, are similar in nature and could be debated together, with a vote on motion No. 8 disposing of motions Nos. 13 and 58.
Motions Nos. 9 and 34 are similar and could be grouped for debate. However, as one motion refers to aircraft gasoline and the other to aircraft parts, separate votes will be required on these motions.
Motion No. 10, standing in the name of the hon. member for Kamloops-Shuswap (Mr. Riis), seeks to import a new proposition and offends the royal recommendation attached to the bill. I might quote for the benefit of hon. members Citation 437(1) of Beauchesne's fifth edition as follows:
An amendment setting forth a proposition dealing with a matter which is foreign to the proposition involved in the main motion is not relevant and cannot be moved.
Also Citation 773(7) reads in part:
An amendment is out of order ... if it extends the objects and purposes, or relaxes the conditions and qualifications as expressed in the royal recommendation.
I might also add a reference to Citation 516(2) of Beauchesne's fifth edition which reads in part:
-No motion can therefor be made to impose a tax, save by a minister of the Crown,... nor any alternative made in the area of imposition.
The hon. member may wish to offer argument on the procedural acceptability of his motion, and if so he can do that the next time the bill is before the House for consideration.
Motions Nos. 11 and 12 will be debated together and a vote on motion No. 11 will dispose of motion No. 12.
Motions Nos. 14 to 26 could be grouped for debate and, if required, will be voted on as follows: Question to be put on motion No. 14 by itself. Question to be put on motion No. 15 and, if in the affirmative, this will obviate the question having to be put on motion No. 16. If in the negative, then the question will be put on No. 16.
Likewise for motions Nos. 17 and 18. An affirmative vote on motion No. 17 will negate the question being put on motion No. 18. A negative vote on motion No. 17 will necessitate the question being put on motion No. 18.
Question will be put on motion No. 19 by itself. Question will be put on motion No. 20 and, if in the affirmative, the question will not have to be put on motion No. 22. If in the negative, the question will be put on motion No. 22.
Question will be put on motions Nos. 21 and 23 separately. Question will be put on motion No. 24 and, if in the affirmative, this will negate the question having to be put on motions Nos. 25 and 26. However, in the case of a negative vote, the
May 26, 1981

question will have to be put on motions Nos. 25 and 26 separately.
Motions Nos. 27 and 28 could be grouped for debate and a vote on motion No. 27 will dispose of motion No. 28.
Motions Nos. 29, 30, 31, 32, 33 and 35 will be debated separately and voted on separately.
Motions Nos. 36, 37, 38, 39, 40, 41, 42 and 43 could be grouped for debate, with the question being put on motion No. 36. An affirmative vote on this motion would dispose of motions Nos. 37, 38, 39, 40, 41, 42 and 43. Motions Nos. 40, 41, 42 and 43 seem to be consequential and hinge on the fact that motion No. 36 will carry in the affirmative.
However, in the Chair's opinion, should motion No. 36 be negated, then the question on motions Nos. 40, 41, 42 and 43 is not necessary, including the putting of the question on motion No. 37 which is identical to motion No. 36. This leaves the putting of the question on motions Nos. 38 and 39 separately.
Motion No. 44 will be debated separately and voted on separately.
This is the suggestion that the Chair would like to make at this point. This being a complex bill, as indicated by the number of motions proposed by hon. members, the Chair would welcome any suggestions hon. members may have in order to facilitate further consideration of the bill.


Hon. Pierre Bussieres (Minister of State (Finance)):: Madam Speaker, I rise on a point of order. As you will recall, motions Nos. 8, 13 and 58 deal with a particular provision of this very complex bill, namely the quarterly indexation of taxes on spirits and tobacco. There is on the Order Paper an amendment to have this quarterly indexation become semiannual. The committee has received representations from the industry and the provincial boards to have annual indexation. To introduce an amendment providing for annual indexation, I would need the authorization and the agreement of the House to table two ways and means motions, one concerning the Excise Act and the other concerning the Excise Tax Act, and I would also need the leave of the House to table the amendments related to these two notices of a ways and means motion to adjust the indexation from quarterly to annual. If I had the unanimous consent, I would proceed in this way, Madam Speaker.


Donald Alex Blenkarn: Madam Speaker, I have had consultations with members on this side, and while we are not at all happy with indexing, we are quite prepared to have the minister do what he can to improve what we say is a bad bill. This might be some improvement. It certainly is not the kind of thing that we would like to see happen, but we would certainly give unanimous consent to allow the minister to file what may be an improvement over what is already there.
Excise Tax


Hon. Marcel Lambert (Edmonton West):: Madam Speaker, with the greatest respect, may I say that I fail to see the necessity of the move, using ordinary common sense. Unless there is a difference in the incidence of tax, which the minister has not indicated in his remarks this afternoon is the case, how can he possibly justify this request? What the bill calls for is quarterly indexing, which is in effect quarterly compounding. The minister proposes to move to a yearly basis. My fundamental mathematics tells me that quarterly compounding yields a greater result than annual compounding. Therefore, since it is not an increase in the incidence of tax in the sense that the minister wishes to present, and it is open to any hon. member including a government minister to move for a reduction in tax without notice, I fail to see why it is necessary to obtain the consent of the House, first, to the tabling of a ways and means motion, and second, why there need be consent of the House. As a matter of fact, I think at the time the minister is discussing his subamendment, his amendment of six months which is already on the Order Paper, he could move to change it to one year by way of an amendment to an amendment. I fail to see how this is necessary procedurally.
Now, it may be alleged that annual compounding or indexing annually will yield a greater result. I still have not been able to resolve that and there is no proof of that, merely the fact that it has been said. I want to make sure that that is so. 1 am not objecting to the proposed change, but, as I say, I do not think it is necessary procedurally.


Pierre Bussières: Madam Speaker, the experts of the taxation division of the department inform me that a change from a quarterly indexation to an annual indexation exceeds the scope of the original ways and means notice of motion, so that we would need to have a second ways and means notice of motion for the amendments to be consistent with the ways and means motion, which would not be the case since the extension, if I may call it that, of the original ways and means motion, would not allow us to move an amendment to have annual indexation, but only semi-annual indexation.


Madam Speaker:: Order, please. The hon. member for Nepean-Carleton (Mr. Baker).


Walter David Baker: Madam Speaker, I wonder if it would be appropriate to defer for a moment discussion as to the consent. I would like to take a look at the actual text of the amendment. If I may have a copy of it, it would be helpful. We could return to it a little later in order to see the matter dealt with. If that is agreeable to the Chair, I think it would expedite the business.
[ Translation]


Madam Speaker:: As I understand it, the hon. members of the opposition are not clear as to whether the motion that the hon. minister wants to move is made necessary by the fact that

May 26, 1981
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it exceeds the one that we already have before us. Consequently, would the hon. minister accept the suggestion made by the hon. member for Nepean-Carleton to the effect that he could perhaps give him an idea of what his new text contains so that he can ascertain whether it is really necessary to have unanimous consent to table new amendments?


Marcel Joseph Aimé Lambert: Madam Speaker, I am not suggesting-


Madam Speaker:: I am sorry, but I think we have found a solution to the problem. The minister will give hon. members some idea of the wording, and then they can determine among themselves whether the proposal should be accepted.
[ Translation]


Pierre Bussières: Madam Speaker, am I to understand that, if I have unanimous consent after the documents are examined, I could proceed as I have requested, at any time later today?


Madam Speaker:: It is my understanding that as soon as hon. members have read the text, the hon. minister can ask for unanimous consent.


Donald Alex Blenkarn: Motion No. 1
That Bill C-57, to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas, be amended in Clause 1 by striking out lines 9 to 13 at page 2.


Mr. Knowles:: Madam Speaker, I rise on a point of order. Since Your Honour indicated that we will be grouping motions Nos. 1 and 3 for debate, should not motion No. 3 also be put now?


Madam Speaker:: Yes, the hon. member is correct.


Donald Alex Blenkarn: Motion No. 3
That Bill C-57, to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas, be amended in Clause 1 by striking out lines 26 to 34 at page 2 and lines 1 to 6 at page 3.


Marcel Joseph Aimé Lambert: Madam Speaker, I hope we can carry on today following discussions with the hon. minister and my colleagues in the New Democratic Party. There was a half day of debate at second reading, a large number of days were spent hearing witnesses from the public at large, and there was discussion in committee. Now that we have reached this particular stage on the first set of motions, perhaps we might allow a rather wide-ranging debate on all aspects of the bill. This would certainly help clean up the passage of the bill. I think the minister should recognize that particular fact. Otherwise there will be a long, long hot summer with this particular bill, because every aspect of it will be repeated at each stage of debate.
The minister will remember that the House leader of the opposition, the minister, myself and our colleagues in the New Democratic Party agreed that there should be a short one-day
debate in order to expedite the passage of the bill to committee to hear witnesses. Now, it is only fair that the minister agree at this point to let other hon. members make what, in effect, will be second reading debate speeches at this stage when we are considering motions Nos. 1 and 3 standing in the name of the hon. member for Mississauga South (Mr. Blenkarn).
If the hon. minister wants another reason why that should happen, it is that we are dealing with clause 1 of the bill. When we are dealing with amendments at report stage, particularly to clause 1 which incidentally is a definition clause, surely to goodness we can expect a wide-ranging debate. This is the practice of the House. To simply say that we will be limited to the terms of these amendments would be a denial of the practices of the House. I think it would not do anything constructive in terms of the continuity and effectiveness of this particular debate. Therefore, I propose to review what has happened leading up to this particular point.
I should like to refer to the number of witnesses in committee. It was interesting to see the wide spectrum of the source of these witnesses. There were representatives from the city of Medicine Hat, the Hobbema Four Band Council-
[ Translation]
-regional and metropolitan weeklies, select newspapers from Quebec, the Quebecor Inc. group, the South Shore weeklies and Michael Publishing Inc-

-and suburban newspapers. Then there was the Canadian Association of Provincial Liquor Commissioners, the Association of Canadian Distillers, the Canadian Construction Association, the Independent Petroleum Association of Canada, the Retail Council of Canada, the Canadian Petroleum Association, the Canadian Organization of Small Business, the Federation of Alberta Gas Co-Ops Ltd., the Canadian Wine Institute, Dome Petroleum Limited, and the Canadian Federation of Independent Business. If my memory serves me correctly, there may have been some others, but I do not have the exact textual indication of who they were.
This bill is an omnibus bill. Although it deals with the excise tax, it ranges far and wide on the commodities it touches. Not only does it do that but, even more so, I suggest it creates wide departures from the normal course of the calculation of the excise tax and, shall I say, its impact.
In the past the excise tax has always been known as the "manufacturers' sales tax". It was imposed upon the price at which a manufacturer was selling his commodity. But the legislation before us does not do that. We will now be recognizing a switch which had been hinted at and advocated by the Porter commission report to shift the incidence of the excise tax away from the manufacturer to the wholesaler, bringing it closer to the ultimate consumer and, of course, yielding that much more money to the Crown since there has been no change in the rate of tax. There is no doubt in my mind that in
May 26, 1981

its amendments to this particular bill the government is seeking to maximize revenues to the Crown in any way it can.
There was no indication by the Minister of Finance (Mr. MacEachen) at the time of the budget that it was his intention to shift the incidence of the excise tax away from the manufacturers' level to the wholesalers' level, but we see exactly that in the item we are discussing at the present time dealing with cosmetics. A distributor of cosmetics who does not manufacture those cosmetics and who does not sell them to retailers but to beauty parlours and other establishments which actually use them as materials in their business are to charge excise tax on such articles which they import. This is clearly a wholesale distributors' tax.
Why was it imposed? It may be that having heard the representations from the organizations most seriously affected the government may change its mind. I do not know since I have not looked at all of the government's amendments. It is remarkable that if there are to be changes here it must be that beauty was able to get to the beast. This is a rather strange circumstance and since there is not a great deal of tax involved it is a particular point on which the government can yield at no great cost to itself to give the appearance of being reasonable.


Mr. Fox:: Not only appearance.


Marcel Joseph Aimé Lambert: As the Minister of Communications (Mr. Fox) has said, it is all a question of appearance.


Francis Fox: No, not only appearance but a reality of reasonableness.


Marcel Joseph Aimé Lambert: Certainly being cosmetic it is a matter of appearance.
In any event, I gather from the chairman of the committee, who was nodding his head sagely when I was referring to the change, that there has not been an elimination but a modifying change. However, there is an area called "marginal manufacturing'', which is an area about which I expect to hear a great many remarks from members in this House because, frankly, it is a value added tax when it is imposed at the level of the marginal manufacturer. Goods are imported and packaged, and whatever the added value of the packaged goods may be, then it is taxed. It is clearly a value added tax, something which was referred to in the Porter commission report. There have been indications by the government that it was studying the question of the federal excise tax internally as it applied to goods manufactured or imported into Canada. There have been odd references to it, but there has been nothing concrete and no firm study or green paper that I can recall which was ever examined by a committee of this House.
The third point I wish to raise is the indexation of taxation on a quarterly basis. The government made an amendment to put it on a six-months basis and this afternoon the minister indicated that the government is considering a yearly indexation of the excise tax on alcohol and tobacco, alcohol being distilled spirits, beer and domestic wines. It will be based on the increase in the CPI in that subgroup.
Excise Tax
If ever there was a devastating critique of precisely what this was imposing from the distributors' point of view, then the brief of the provincial liquor commissioners would be a complete answer to the nonsense proposed by the government. Any little thing which contributed to the increase, for example, in the price of wine, whether it be a fall in the value of the Canadian dollar resulting in imported wines costing a little more, or whether it is a strike by liquor commission employees who receive a wage settlement causing prices at the liquor commission to rise, if there are increased costs for heating buildings, if distillers in Scotland increase the price of their product or if there is just general inflation, it is all considered under the CPI of the particular subgroup and there is a quarterly-let us change it now to periodic-stop in the calculation of new tax, which is then added on. It is, in effect, compounding on an annual basis, according to the amendment proposed by the minister this afternoon. This is so, not only because of influences on the price within the subgroup, but influences from extraneous sources and the minister receives additional revenues without having to come back to the House. He gets an increase in taxes, not just like the ad valorem tax. Already the sales tax is on an ad valorem basis because it is 9 per cent of the manufacturers' cost. Now we are going to get an additional factor, compounded once a year, without the minister coming back to the House.
I think that this is a most pernicious proposal and one which this House should reject out of hand. It just means that Parliament is being asked again to yield its control over taxation. It is as if we had asked to let the Minister of Finance increase income tax, with the rate changed on an annual basis, with reference to the CPI. That would be outrageous; Parliament would be absolutely impotent to control taxation. Of course, there is this built-in interest on the part of the government to see inflation go up. All it is is a snowball in the spring rapidly rolling downhill, getting bigger and bigger. However, that is the principle involved in the indexation of excise tax on the alcohol subgroup.
I see the Ontario government has fallen for this, too. It is a bureaucratic move. It is beautiful. However, I cannot congratulate the provincial treasurer of Ontario for doing it, and I would oppose him to the end. I will not only suggest but I recommend to this House that we never accept that principle. It is far too easy. Ministers of finance and their bureaucrats think that this is apple pie because they do not have to face up to their legislatures for tax increases. That is the net result of the proposal put forward by the minister in his budget and which is included in Bill C-57. Whether it happens quarterly, half yearly or yearly, there is that compounding feature which creates a snowball and, of course, much more revenue for the Crown, benefiting entirely from inflation.
The government does not know how to cope with inflation, so it is saying that it will index taxes based upon inflation. If this House and this Parliament dares accept that principle in this particular case, in the subgroup of alcohol-oh, and do not the purists clasp that to their bosoms-

May 26, 1981
Excise Tax


Mr. Deputy Speaker:: I regret to interrupt the hon. member, but according to my understanding of the rules, he is allowed 20 minutes.


Marcel Joseph Aimé Lambert: Thank you very much, Mr. Speaker.


Mr. Deputy Speaker:: Is the hon. member actually moving on behalf of the official opposition?


Marcel Joseph Aimé Lambert: Yes.


Mr. Deputy Speaker:: Thank you.


Marcel Joseph Aimé Lambert: This subgroup of alcohol and tobacco are considered to be social sins, the devil's goods, in the minds of some people. Therefore, I suppose it is that much easier to make this House swallow this first bitter pill. However, that is not the way it will work. This House has to reject the principle out of hand, because the next step will be for manufactured goods generally, and all other goods and services which are subject to the federal excise tax, to be made subject to indexation. The special sales tax on airline tickets is a classic example. That is a sales tax. It comes under the excise tax and it will be subject to indexation under the CPI. Everything is going to be gathered up together in one big, fat snowball to go rolling down the hill, picking up everything in its way and finishing up at the bottom with everyone in a great smash. The thing is pernicious.
When I think that the government of Ontario, in its recent budget, has adopted that principle in certain of its statutes, all I can say is shame. It is a bad principle and should be repudiated in the same way I am asking this House to repudiate the attempt of the government on this occasion to bring that principle in.
It is not brought in by the back door. It is being done openly. The Minister of Finance said that he wishes to benefit from additional revenue. He needs the additional revenue. However, he does not have the gumption to come before us with his budget and face up to Parliament. It is Parliament that decides whether the government shall get the money. We allow indexation and then the government does not have to meet. It goes on generally. Soon the government-


Mr. Deputy Speaker:: Order, please. I would like to call the hon. member's attention to a Standing Order which is quite clear. Section 75, subsection 9 states:
-no member shall speak more than once or longer than twenty minutes during proceedings on any amendment at that stage, except that the Prime Minister, the Leader of the Opposition, a Minister of the Crown or other member sponsoring a bill and the member proposing an amendment, may speak for not more than forty minutes.


An hon. Member:: That is what this is, an amendment.


Mr. Deputy Speaker:: It is my understanding that the amendment stands in the name of hon. member for Mississauga South (Mr. Blenkarn). The hon. member is not proposing the amendment at this stage, and the 20-minute rule would apply to him.


Marcel Joseph Aimé Lambert: With the greatest of respect, I moved the amendment on behalf of the hon. member for Mississauga South (Mr. Blenkarn), and there are many other amendments in his name. He is precluded from speaking by his absence on a task force. I am taking all of these amendments and I am proposing all the amendments. I submit that the Speaker has to recognize it.


Mr. Deputy Speaker:: In the rules of the House there is a procedure by which hon. members lay down amendments at the report stage. The procedure has been observed up to this point. My understanding is that the rule would allow the hon. member 20 minutes at this stage. If this is going to be a 40-minute procedure for every one of the amendments in the name of the hon. member for Mississauga South, I would respectfully wish to defer my decision on the matter for the moment and I will confer with the Table and Madam Speaker. But certainly my first presumption, on the reading of the rule, is that it is abundantly clear. The hon. member for Edmonton West (Mr. Lambert).


Marcel Joseph Aimé Lambert: I will not argue with the Chair but I will simply say that it has been my experience and that of other senior members of this House, when dealing with this particular feature, that it has always been indicated that it would apply whether it was the hon. member proposing or he who was proposing in lieu. In other words, since, in effect, I am proposing the amendment, I have the 40 minutes, and I will continue on that basis.


David Michael Collenette: A point of order. Mr. Speaker, you have correctly pointed out the rule of the House to the hon. member for Edmonton West (Mr. Lambert). I was in the House a little while ago when Madam Speaker was in the chair, and quite distinctly the motion was moved in the name of the hon. member for Mississauga South (Mr. Blenkarn). I do not think we are going to put up any great fuss, but we would certainly support the Chair and the Chair's interpretation of the rules.
I must set the record straight. Motion No. 1 was read. Motion No. 3 was then read after it was drawn to the attention of the House by the hon. member for Winnipeg North Centre (Mr. Knowles) that they were being grouped together. In both cases the hon. member for Mississauga South (Mr. Blenkarn) moved the motion. He was in the House and in both cases the motions were seconded by the hon. member for Edmonton West (Mr. Lambert).


Marcel Joseph Aimé Lambert: Again, it was our argument that the motion would not have to be seconded. The motion was moved by me on behalf of the hon. member for Mississauga South.


Mr. Deputy Speaker:: We will check Hansard later. Meanwhile the hon. member will be allowed to proceed. The Chair has, however, indicated the interpretation is subject to a review of Hansard.


Marcel Joseph Aimé Lambert: And also authorities.
May 26, 1981

We have, as I indicated, three departures from the usual consideration of excise tax. I intend to talk about indexation. My colleagues will take on the petroleum and natural gas tax section, that portion marked part IV of the bill, since it will be part IV of the Excise Tax Act. Others will deal with a variety of subjects, for instance, marginal manufacturing. Included also will be the manufacture of alcohol by individuals in limited quantities and oddly for limited periods, but I will let those hon. members speak for themselves. There will be others who will speak about a change in newspapers.
Representations made with regard to the incidence of the excise tax have now resulted in an increase, according to a government amendment, of 75 per cent to 80 per cent of advertising matter before a publication will attract excise tax. We will see what reaction there is to that. I found as a result of the representations, certainly from the small weeklies and the small city dailies, that this is an absolute killer. It did not affect the large newspapers as much. Certainly over the period of time during which calculations could be made, percentages could be worked out so that the independent inserts could be calculated. Large papers, precisely because of their volume, could escape tax. An eight or 12-page paper coming out on a weekly or bi-weekly basis and carrying inserts with it because that was deemed to be the best distribution in the district of such advertising inserts, would attract sales tax or federal excise tax. I am not talking about the distribution of full catalogues within the folds of newspapers. That is not the purpose, and that in itself can be dealt with. I am sure that no new newspaper would insist that it has the right to distribute, say, a Sears catalogue within the confines of a 16-page newspaper.


Mr. Cullen:: Except O'Callaghan.


Marcel Joseph Aimé Lambert: I heard the hon. member for Sarnia-Lambton (Mr. Cullen). I can always stand up to the representations of the gentleman to whom he referred, even though I find that Ontario Liberals have a great deal more difficulty digesting his other views. They are so "right" in so far as a Canadian's concept of Canada is concerned, the right to resources and so forth, that I commend his particular articles as mandatory reading for all Ontario Liberals.


Jack Sydney George (Bud) Cullen: He might be "right" but not correct.


Marcel Joseph Aimé Lambert: In any event, when I consider his original political views and where they are now, certainly he has my sympathy. In so far as the newspaper machine for which he works, that is quite a colossus.
I think that we, as Canadians, have to pay some attention to the size of some of the newspapers in the big chains. I am not one who gets worried about bigness by itself, but there comes a point when we have to look at the absence of healthy competition and alternatives, something which is happening here in Canada at the present time, unfortunately.
One area about which I must say something, and on which my colleague, the hon. member for Etobicoke Centre (Mr. Wilson) will have a great deal more to say, is the petroleum
Excise Tax
and natural gas tax of 8 per cent. It is a revenue tax of 8 per cent which, in itself, is a punitive tax to which the government has no right. As a matter of fact, the Alberta appeal court, in so far as revenues for natural gas owned by the provinces are concerned, has declared them beyond the powers of the Government of Canada. I agree with that decision. This is just another public raid by a treasury which has absolutely no business mounting a campaign to spoliate provincial natural resources owned either by the governments of those provinces or by the people of those provinces. The Government of Canada does not have any jurisdiction in that respect. It has never exercised its jurisdiction with respect to the gold, nickel, copper and other products of Ontario. It has never touched the gold of Quebec. It would not dare. What about electricity? Is the federal government going to make a descent upon the electricity coming from James Bay? What about that which is produced at Manic or will the federal government go after the electricity generated from Churchill Falls which is taken by the Quebec government from the Newfoundland government? It would not dare.
This is another attempt to try to get at people, many of them, like the Indian bands of Alberta perhaps some in Saskatchewan, who have oil and gas wells from which they derive revenue and on which they are building economies for themselves.
The first trust company established by Indian councils is in Alberta. They depend upon the revenues of the natural gas and oil produced in the Hobbema area. What does the Minister of Finance say? He says "I want 8 per cent of that". He wants 8 per cent of revenue to which he has no right. He has no right to levy income tax on income treaty Indians have earned on reserves. Provincial governments have no right to levy taxes of any kind in those reserves. No municipal government or any other government can levy a tax with regard to Indian lands. However, because there are revenues from oil and gas coming from under Indian lands belonging to those treaty Indians, the Minister of Finance through Bill C-57 says he wants his share, his pound of flesh.
I am not going to place myself in the role of the courts of Canada with regard to the legality of the imposition of that tax, but I will say this. There is no more right in the Government of Canada under the Constitution, the British North America Act, to levy such a tax on revenues from oil and gas produced on Indian lands than on oil and gas produced and owned by a provincial government, as declared by the appellate division of the Supreme Court of Alberta.
What this has done to Canadian interests in the oil industry is astronomical. It is worse than a pirate's raid. They are federal buccaneers. They are out to raid provincial funds, whether in Saskatchewan, Alberta or British Columbia. It provides a beautiful precedent for a raid on the forest industries of Quebec, Ontario and British Columbia or for a share of revenues emanating from the production of pulp products or lumber. What about a share in gold, silver and all our other

May 26, 1981
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metals? It makes a nonsense of what is clearly written in the Constitution, that the natural resources shall belong to a province. I find their conception of the Constitution absolutely indecent, and that is a very mild term.
Under Bill C-48, the Government of Canada has established what it calls Canada lands, including the lands in the Northwest Territories and Yukon. What will those who have aspirations to provincial status get? A sucked out lemon! In fact the federal government will not be able, nor would it want, to grant to the peoples of the territories and the Yukon their natural resources.
The Inuit, the Dene Nation and other native peoples in those territories should almost be up in arms at the Government of Canada proceeding with Bill C-48. It is a raid on lands that the Government of Canada is merely holding in trust for the people of Canada under our federal system. They are ultimately to be delivered to the peoples inhabiting those territories when they become provinces. If in the past the government had behaved towards the lands of Alberta and Saskatchewan as it is today trying to behave with regard to the lands in the territories, there would not be any resources left for the people of Alberta and Saskatchewan.


Mr. Deputy Speaker:: Order, please. The hon. member has had 43 minutes which I think is ample time.


Marcel Joseph Aimé Lambert: I am almost finished, Mr. Speaker.


Mr. Deputy Speaker:: The hon. member for Broadview-Greenwood.


Mr. Rae:: Mr. Speaker, if the hon. member for Edmonton West wants to complete his remarks, I am sure there will be unanimous consent to allow him to continue.


Mr. Deputy Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Marcel Joseph Aimé Lambert: Mr. Speaker, I will not abuse the generosity of my colleagues this afternoon. There will be plenty of opportunity on the particular subject. As for my general remarks, I think I have made my point: there is not much in this bill that I like.


Some hon. Members:: Hear, hear!


Bob Rae: Mr. Speaker, I will be happy to hear again the speech the hon. member for Edmonton West (Mr. Lambert) has promised. The main concern I want to express this afternoon is that we had an agreement from the minister that after a very brief second reading we would have an intensive review of this legislation in committee where we might cross-examine a group of witnesses and make a greater attempt to find a consensus as to what modifications could be made.
What is really disturbing about the government's response to the criticisms that have been made on a number of measures contained in the bill is that the government was really only
prepared to move in one area and one area alone. There was a general consensus on the part of the committee that the cosmetics industry was being treated in a way that was discriminatory. There was a tax on a group of people we did not think should be taxed, those who own and operate beauty parlours. Apart from that change-


Ian Gardiner Waddell: A cosmetic change.


Bob Rae: I suppose one could describe it as a cosmetic change. The hon. member for Vancouver-Kingsway (Mr. Waddell) has obviously been reading my notes. Apart from that change, there has really been no progress. It is the absence of any progress or response from the Minister of Finance (Mr. MacEachen) and the Minister of State for Finance (Mr. Bussieres) with respect to a number of amendments which have been put forward that I want to deal with this afternoon.
There are 135 motions dealing with this measure. I see the minister nodding in the affirmative, obviously with somewhat of a heavy heart. There will obviously be a difficult and I dare say boring and protracted debate on a number of matters which are of importance to particular groups of Canadians, indeed to all Canadians. I think this debate could be shortened if we could have some indication from the government that they are prepared to move on a number of measures which have been put forward in a constructive spirit.
Speaking on behalf of our caucus, and in particular the hon. member for Kamloops-Shuswap (Mr. Riis) and our energy critic, the hon. member for Vancouver-Kingsway, particular proposals have been made which have really met with a simple brick wall response. I could give the minister an indication of what this looks like to us.
We see a brick wall when we are faced with the matter of indexation of taxation on alcohol. The government has moved from indexation every three months to indexation every year. Nevertheless, the principle involved, that the government should not be seen to be or, indeed, not be a beneficiary of inflation has been rejected by the government. The government has now given itself a stake in inflation whereas we regard the imposition of this kind of a tax and any adjustments thereto as something that should be done every year at the time the budget is introduced.
Once the government has accepted the principle that this is going to be an annual change, why should it tie its hands when it could introduce this at the time of the budget and it can be debated, when the real effect of that legislation on the three major industries can be seen? I find that the notion of increasing tax automatically by virtue of indexation is something that in other instances the government has rejected, and it is something which should not be accepted in this particular instance.
We have proposed other amendments that have been treated with equal disdain by the government. The simple proposition that those people who collect taxes on behalf of the govern-
May 26, 1981

ment, many small businesses, should receive some form of compensation from the government has been rejected out of hand. Indeed, we may even have difficulty moving it because of the ruling of Madam Speaker in respect to its being in order in that it obviously provides for some expenditure by the government. The government should be moving that kind of a motion.
This is the government that talks about its willingness and eagerness to assist small business, when in fact its interest rate policies are, as we all know, having the harshest possible effect on that community, driving many into bankruptcy. Those that are not driven into bankruptcy are facing tremendous problems. Many of them are being forced into receivership and many are forced simply to walk away from or sell their businesses because of the problems high interest rates are causing them. Yet when we propose a concrete measure which would give the government a means to compensate these industries and small proprietors for a service they are providing the government, the government says no.
I find that astonishing when we know-and the hon. member for Kamloops-Shuswap will be pointing this out in some greater detail-that there are instances in each and every province of compensation being paid. I should say there are two exceptions. In Newfoundland, for reasons which perhaps the hon. member for St. John's West (Mr. Crosbie) can explain to us, compensation has been limited for the collection of sales tax. Of course, there is no compensation in Alberta because in the land of milk and honey there is no sales tax, so obviously there can be no necessity for providing compensation. The province of Saskatchewan provides 5 per cent on the first $300 of sales tax and 1 per cent on the balance. The provinces of Manitoba, Quebec and Ontario provide, in some instances, a maximum of $1,000. Some have no maximum, but the principle has been adopted that those people who collect the sales tax for a province should not be punished by the provincial government but should in fact be compensated for providing that provincial government with a service. When we suggest that the government do something specific for smaller businesses then, of course, members of the government simply hold up their hands and say: "No way, this is something we do not want to get into; this is something these people should be providing the federal government with gratis, and we will have nothing to do with it".
Again we received a series of briefs ranging from wholesale rejection of the tax, in some instances, to very specific and concerned suggestions, for example, from a group of newspaper publishers in Quebec and in English-speaking Canada, having regard to the impact the government's measures on taxation of advertisements and advertising supplements in those newspapers will have on their business. I can assure the House that this is a subject of concern to a great many communities across our country.
It is the proposal of the government to tax these supplements and to introduce an arbitrary definition of what is a newspaper. This is something which affects the life of literally hundreds of communities across Canada, yet the government's
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consistent response has been: "No, we do not see that we can change it". The government and bureaucracy has made a fundamental decision with regard to these distinctions and they are not going to be tampered with.
Before the Secretary of State and Minister of Communications (Mr. Fox) leaves, there is one amendment we put forward in respect of which I want him to take a particular interest, and it has to do with the government's philistine decision that it intends now to tax all original prints and will not make any distinction between reproductions that are simply manufactured and original prints which are, by their very definition, of a limited nature.
Let me say that we have had intensive discussions with people in the department who are concerned with this matter, and I think I can honestly say that this department simply does not understand what every artist and every art dealer has indicated to the government, at great effort, is a well-known distinction. There is a distinction between an original print and a reproduction which is simply reproduced photomechanically and distributed across the country. There is a difference between an Elvis Presley poster and an Alex Colville lithograph. For the government not to appreciate that there has been a fundamental decision taken by the federal government, which we support and have supported, namely, that works of original art are to be exempt from the sales tax, and for the government to say, once that decision has been taken, that there is no such thing as an original print, is simply to show that the Department of Finance has been philistine in its understanding of what is going on in the artistic community today.
The fact of the matter is that most or a great percentage of contemporary artists in Canada today are working in a variety of fields and mediums which cannot be described as works of art in the sense they have been defined by the Department of Finance; they are working in the area of prints and the manufacture thereof for limited sale and distribution. There is a distinction. In fact, there is a conceptual distinction, an artistic distinction, between them and, as I say, the photomechanical reproduction of a poster or a painting.
Many of us have in our offices or homes reproductions of well-known works of art. They are not original prints and there is no reason they should not be regarded as manufactured and taxed; but there is a distinction between those and an original print produced by the artist himself and distributed on a limited basis throughout the country. As the hon. member for Kamloops-Shuswap says, it is a slap in the face for the artistic community and simply indicates that the ministers involved have not taken the time to become sufficiently interested in the sort of problems which have been raised in the committee and in correspondence by a whole range of people.
The government must give every citizen who has to deal with it a tremendous sense of frustration, because no matter how reasonable a proposition that is put forward, the government rejects it. It does not matter how much the person putting forward the proposition shows that he is not simply trying to evade taxes but is simply showing that the imposition

May 26, 1981
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of the tax will create a hardship or an anomaly. In this case the tax will split the artistic community in two, and it will mean that if an artist wants his work to be regarded as tax exempt by the government he will have to work in oils or water colours, because those are the only products that are going to be exempt. When there are people working in a whole range of artistic media, it is absurd simply to say that these are the people we are going to single out.
My colleagues will be discussing as well a fundamental question which was touched on by the hon. member for Edmonton West and which, of course, is a preoccupation of all Canadians. That question is the problem of the system of taxation of petroleum and gas which has been imposed on the country, on the industry and on the provinces.
The other day in the House the Minister of Finance said, when he was criticizing us for one thing or another, that the government has imposed taxes on oil companies but that the government does not seem to have received very much help from the New Democratic Party. I want to say to the minister that there is a very simple reason for that. If he had listened to the representations we made at second reading, he would understand from whence flows our opposition to the notion of the excise taxes that have been imposed. Those taxes impose a tremendous hardship on the ordinary Canadian when they are not accompanied by any form of a tax credit, for which we have consistently argued for at least three years in this House and outside this House. We have argued that the government has to distribute some of the surplus it is collecting to ordinary Canadians in the form of progressive tax credits.
There is another reason as well. From one point of view I suppose the imposition of this tax could be seen simply as a tool being used in the bargaining or in the preamble to bargaining in the banana steps the government is taking as it tip-toes its way up to the clear need for an energy agreement between the producing provinces and the federal government. However, simply taken on its own, it clearly is a tax which is a complete infringement of provincial jurisdiction. It hits the little guy. It has consistently been shown, by a series of representations which we have received from a number of producers and a number of workers in the industry, to be a tax which is having a very serious effect on employment, on the level of production and on the livelihood of people in western Canada. As a representative from eastern Canada and, indeed from the city of Toronto, which is frequently regarded by many people in the west as the heart of the problem, let me say that I think there has been a caricature in eastern Canada and in the press of eastern Canada of what the oil industry is all about.
In imposing this kind of blanket tax the government has hurt worst not the large oil companies, from which we heard very few representations on the government's energy policy other than of a very general kind, but those people who provide all the service and all the contracting and other work which needs to be done in the production of oil and natural gas. As
the hon. member for Kamloops-Shuswap says, these are small business people. These are people who are not millionaires. These are not people who are simply burning $100 bills in order to have a good time. These are people who have been put out of work by the imposition of a tax which has had the effect of hitting smaller businesses much harder than larger businesses. This tax affects the cash flows of smaller businesses more than it affects the cash flows of larger industries, and coming from a government which says that its goal is to Canadianize the industry, it is a joke because its effect will be to decrease the power of Canadian small businesses in the oil and gas field and to force them to sell to multinationals. I think the evidence shows that the government has been quite prepared to subsidize multinational companies, but has not been prepared to do anything to stimulate growth in a real way in the Canadian small business sector.
In closing, I will take just a couple of minutes to indicate one other basic fact of life with which we have to deal at the present time, and that is that there is an extraordinary sense of uncertainty and unease about developments in the modern economy. I am referring specifically to the problems of inflation and interest rates. These are problems which eat at the heart of any stable and healthy economic system. These are phenomena which hit the ordinary Canadian very hard indeed, and these are problems which I think provide the basic background to our discussions today.
If I may say so to the minister, any proposals which have the effect of increasing the cost for small business at a time when it is hit by the extraordinary effect of high interest rates are misdirected and are of no help to the economy at the present time. Any proposals which have the effect of making it more difficult to achieve the kind of energy agreement which would be livable for all Canadians, producers and consumers-and we simply have to find a way of living together and providing for the just claims of both producers and consumers-are simply regressive and are an exercise in useless and fundamentally destructive rhetoric which is of no help in finding a solution to this problem.
Very fundamental challenges are facing the country in finding a solution to the problem that we do not have an energy agreement and to the problems of inflation and high interest rates. As I have said on many occasions, it concerns me deeply that the Prime Minister (Mr. Trudeau) cannot find it in himself to become concerned about issues which really affect the cost of living, the cost of working and the cost of providing for the basics of the Canadian family. I regret that that is the case, but I look forward to hearing some productive indications from the minister that the government is prepared to accept some of the proposals we have put forward which, in our view, would provide for a more progressive and fairer excise tax system in this year accepting, as we all do, that the government is going to be producing some major changes in the excise tax system and that this is something which we will be debating next year.
May 26, 1981



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 Burlington (Mr. Kem-pling)-Automotive Industry-(a) Export of parts to European and Japanese car manufacturers, (b) Discussions with European and Japanese manufacturers; the hon. member for Algoma (Mr. Foster)-Employment-Inquiry respecting increase in funding of community development program; the hon. member for St. Catharines (Mr. Reid)-Excise Tax- Application to liquor sales-Purpose of indexation.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of Bill C-57, to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs, and motions Nos. 1 and 3 (Mr. Blenkarn).
Hon. Michael Wilson (Etobicoke Centre):: Mr. Speaker, I am very pleased to participate in this debate this afternoon. This is a very important piece of legislation we are considering, particularly as it relates to the oil and gas industry and the future energy supplies in this country.
Bill C-57 contains two taxes which have proved to be the most damaging elements of the National Energy Program the government announced last October. These are punitive taxes and they have had an extremely damaging impact on the oil and gas industry.
Over the period of time between the announcement of this program and the end of last year, we on this side of the House drew attention to the many concerns people observing the scene have had regarding the impact of the energy program, but at that time we could not point to specific results. As Your Honour may recall, last week in the House I drew attention to some of these results. Drilling activity this year compared with last year at this time is down over 50 per cent. Sales of potential petroleum properties are down by 70 per cent this year compared with last year. The number of drilling rigs which already have left the country is 139.
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Those are the specific facts which have proved to us very clearly the impact of this energy program. These are shortterm problems. These are problems which are with us today in Alberta, but they also have an impact on the rest of Canada, and we will be discussing this tomorrow in debate.
However, there are some very serious long-term problems that I wish to discuss because they must be faced today. The minister, whether it be the Minister of Finance (Mr. Mac-Eachen) or the Minister of Energy, Mines and Resources (Mr. Lalonde), must show that he is sensitive to these concerns, that he is listening to what is going on around him, what I am sure he is hearing day in and day out from the people affected by these taxes.
My party and I have proposed amendments to Bill C-57 on oil and gas taxes, the effect of which is to totally remove the production tax and the excise tax on natural gas, thereby requesting the government to seek other forms of revenue. We have no quarrel with the government's seeking more revenue through oil and gas revenues. My colleague the member for St. John's West (Mr. Crosbie) made some specific proposals in his budget which raised the federal take to 24 per cent. So in principle we have no concern over this.
I should say that we feel very strongly that the government must respect provincial jurisdiction and not fight the energy battle on the backs of consumers, which is what is happening today with the endless price increases we have had since the end of 1979, many of which have only resulted in putting the tax revenues in the pockets of the federal government. The amount that has gone to the industry and producing provinces is a small part of that which has been collected over the past year and a half. We also believe that the government must take care that the burden placed on the industry, the source of production, must be fair and that the price and tax regime in Canada must be competitive with other countries in the world. Because people and equipment, as we have seen with the 139 drilling rigs, can move to more favourable jurisdictions.
Now, in all these areas this government has failed miserably, as we see from the statistics I referred to earlier. For that reason we propose to amend this bill by deleting the production tax and the excise tax on natural gas. There are many options available to the government to raise the funds it feels are necessary. The self-sufficiency tax in our 1979 budget clearly demonstrated that there are ways to seek agreement with the provinces. We had agreement in principle on that tax, as evidenced by an exchange of letters between the province of Alberta and our government. We could have, as they do in the United States, such things as a windfall profits tax or an excise tax on the end product, again as we proposed.
In previous debates we have drawn attention to the impact of production and excise taxes and have warned of the possible results. Now we have the clear evidence of these results, not just in the deadlock with Alberta but in the operating decisions taken by individual companies to cut back severely the amount of money they propose to spend. For Canada to have any

May 26, 1981
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chance at all of meeting the objectives of the National Energy Program, self-sufficiency in particular, these two taxes must be withdrawn. We will be pressing very hard, Mr. Speaker, to bring some sense into the mind of the minister to withdraw these taxes, go back to the drawing board and come back here with something that makes more sense in terms of the government achieving its objectives.
Last fall the National Energy Board commenced hearings on the supply and demand situation in Canada, during the middle of which the National Energy Program was announced and the board asked the companies to come back with revised predictions as to the impact of this program. They have not at this stage released their report but I would like to summarize for the House some of the key elements set out in the evidence.
The first topic is the impact of the National Energy Program on cash flow. Company after company indicated that there is a very serious immediate impact on their cash flow. The reduction ranged from 20 per cent, 25 per cent to a third, and in some cases as high as 40 per cent. The conclusion reached was that the decrease in the producer cash flow will have an adverse impact on the economics of existing conventional oil and gas production and will affect the exploration budgets and the ability of the companies to keep production up over the immediate period ahead. PetroCan itself reported that the NEP would result in considerably lower netbacks to producers this year and for the next two years. In the longer term, although price increases would tend to offset the initial decreases, all companies' cash flow would be hurt over the short term. It is that immediate impact that is so evident in the statistics I referred to earlier.
As a result of this reduction in cash flow there is also an expected reduction in the ability of independent, Canadian-owned companies, the ones that are intended to be helped by this program, to seek financing from the banking community as well as the private sector. As I said, this will impact directly on their exploration and development budgets, and its impact on the smaller companies will be quite severe.
The direct cash flow to these smaller Canadian companies will lead to increased investment in exploration because of the grants; that is an expected result of the program. But the over-all cash flow impact related to their production activities will be lowered, according to the presentations made to the NEB. Nova, a very strong Canadian company, indicated that the National Energy Program assists Canadian companies in exploration programs, but they say there are few Canadian-owned companies large enough to make the investment required in frontier exploration, oil sands and heavy oil development. These are large projects requiring significant financial strength and which are certainly not helped by the NEP and these taxes under consideration today. So again, it is expected that the exploration and development budgets in Canada will decline to somewhere between 25 and 50 per cent below the projections in place prior to the announcement of the National Energy Program.
What this means to the future oil supply in Canada must also be projected. Company after company stated that our goal
of self-sufficiency is pushed much further into the future directly as a result of this program. In addition, reserves that were economic prior to October 28 suddenly became uneconomic, and the principal culprit is the 8 per cent production tax which is part of Bill C-57.
I think we are all aware that the proposed pricing schedule does not provide sufficient incentive, which is another factor, but the combination of the 8 per cent tax and the insufficient pricing schedule has set back the timing for the achievement of self-sufficiency in this country severely; in the view of some observers, well into the next century. So the NEP, and in particular this tax on production, has had a direct impact on one of the key goals that we have set out, that of self-sufficiency.
One can draw the conclusion that the National Energy Program is totally counterproductive to the objective of selfsufficiency. We should consider the precarious nature of the world today, particularly the Middle East. Day in and day out we are reminded of the very precarious nature of the polictical situation there, whether it is the conflict between Iraq and Iran, the arms build-up in the Middle East, the current conflict between Syria and Israel, or the concerns of observers as to the over-all intentions of the Russians in that part of the world. There is no sense whatsoever in the government setting self-sufficiency as an objective and then taking a route to self-sufficiency which totally undermines the objective, particularly when we face these risks in other countries.
Another element of this is in the area of marginal production. This particularly affects southwestern Saskatchewan and southeastern Alberta. There are many wells which were economic prior to October 28; right now they are not productive or economic. There is no indication in any of the amendments of the government that it recognizes this problem and is proposing any difference in the impact of the production tax, which is a very blunt instrument indeed. I believe this is a major shortcoming in the bill.
We have all heard of the deadlock currently in place between the federal government and the government of Alberta. One result of this deadlock is the fact that the megaprojects, the heavy oil project at Cold Lake and the Alsands synthetic crude Project, are on hold. They may well never go ahead if there is not a decision soon on the future of energy development in the country. These projects are one of the key elements in achieving self-sufficiency in Canada. In 1990, according to the National Energy Program, 50 per cent of production will be from non-conventional sources of oil.
The problem is not only the deadlock between the province and the federal government. There is still the problem, as set out by a number of observers at the NEB hearings, that the pricing proposals, combined with the production tax, make these projects uneconomic under current circumstances. These major projects are not likely to proceed under the National Energy Program, without some agreement between Alberta and Ottawa.
May 26, 1981

This also affects heavy oil and heavy oil upgrading. The production tax is right at the heart of the problems which the industry is facing in maintaining production on an economic basis. The production tax, combined with the insufficient pricing schedule, will not result in these projects going ahead.
My colleague mentioned that the excise tax on natural gas has been declared unconstitutional by the Alberta Court of Appeal. Apart from the direct impact on the production and exploration activities of the industry, it is another reason we believe the government should withdraw these two key elements of the National Energy Program and rethink the ways in which revenue can be raised.
In passing, I should like to note that the production tax affects frontier production. Today I released the amendments we are proposing to Bill C-48, the Canada Oil and Gas Act. One concern of the various witnesses who appeared before the committee was that the production tax comes up time and again as being a key element in making production in that part of the country less economic and, therefore, less likely to proceed. There is such a layering of taxes, starting with the production tax on frontier development, that while there could be some surge in exploration activity because of the generous grants which have been provided, the next step toward bringing the fields into production could well be held back by the size of the production tax, together with the other elements of Bill C-48 which our amendments propose to remedy.
A final point on the impact of the National Energy Program on our economy concerns the balance of payments. This year we will be paying somewhere around $5.5 billion to $6 billion for oil imports. It will be a very, very heavy drain on our economy. The production tax will perpetuate that drain and might well see it increased because of the significant increases we are likely to see in oil prices over the next ten to 15 years.
It is one of the causes of the very high interest rate policy the government has been following. Since we have this drain on our balance of payments, we are forced to keep interest rates up to support the level of the Canadian dollar. If that oil was produced in this country, the pressure would be off and it would provide Mr. Bouey with a great deal more flexibility in the monetary policy he has been following. So it is essential that the production tax and the excise tax be deleted. We are proposing that in our amendments to the legislation.
I repeat that we will be opposing the taxes in the strongest possible way because of their very serious impact on this industry, on our energy future and on our economy in general.


John Carnell Crosbie: Mr. Speaker, just before dealing with several other points we wish to bring forward in discussing the excise tax amendments, I want to mention first how obvious it is that the provisions of this legislation are part of the scheme of hypocrisy which the government is now advancing in Canada. The taxes to which my hon. friend just referred-the tax on natural gas and gas liquids and the 8 per cent tax on petroleum and gas revenues- are part of the new, so-called energy policy which has done tremendous economic damage to the country.
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I just want to refer to an address which the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) made on May 6 to the Conference Board of Canada in Toronto to show how hypocritical either this legislation is or his address was. On page 2 of his address he said:
Of the three percentage point rise in inflation that we have witnessed in the last five months, two percentage points are the direct result of the recent increases in energy prices that were set out in the National Energy Program. Put another way, energy accounted for almost 25 per cent of the over-all increase in the consumer price index in the last five months.
Then on the same page he said that the annual rate of increase in the consumer price index has now gone up to 13.9 per cent in those same five months. He said that 25 per cent of the over-all increase was due to the National Energy Progam. What is the National Energy Program? It is a whole series of taxes imposed by the government. In other words, the Minister of Finance indicts his government. He should have said, to put it another way, that this government has accounted for almost 25 per cent of the over-all increase in the consumer price index in the last five months.
These taxes, and others imposed by the government, for example the petroleum compensation charge and the Canadian ownership charge, have resulted in energy price increases in the last five months. They are the cause of the 11 increases in the price of oil and oil products since February, 1980. Of the 11 increases, eight have been increases in federal taxes alone- taxation increases going to the federal government alone. Not one cent of those eight increases will go to the gas or oil producers. Not one cent of those eight increases will go to the provincial governments. They are federal tax increases-eight of the last 11 increases in the price of gasoline at the pump. Eight of the last 11 increases in heating oil, and every one of those increases, apply to all of the products which come from a barrel of oil in addition to gasoline. So it is the government of the Minister of Finance which says that it is battling inflation by putting on these inflationary tax increases. It is their own National Energy Program which they should change.
In the same speech the minister says that he has identified energy as a source of two thirds of the rise in consumer inflation which we have experienced in the last five months. Two pages on in the speech he has it up from 25 per cent to two thirds. He goes on to say:
I have argued that higher energy prices cannot be avoided.
That is nonsense, Mr. Speaker. Higher energy prices could have been avoided if the Government of Canada had chosen not to have eight tax increases in the price of oil products in the last year. We did not have to have the Canadian ownership charge. We did not have to have Petro-Canada buy Petrofina, which resulted in a Canadian ownership charge, putting the price of gasoline up 3.5 cents a gallon just a month ago. We did not have to have the petroleum compensation charge which has put the price up $3.30 a barrel, I think it is, this year, and I have forgotten the total altogether.
The Minister's speech is rife with hypocrisy. He tries to put the blame on energy cost increases when it is the government's

May 26, 1981
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increases that are responsible. The increases have not gone to Alberta or the companies, they have gone to this government.
Further on in his speech, the minister says that interest rates will continue to rise until demand weakens to the point at which a resistance to further price and cost increases begins to take hold. What kind of nonsense is that? The minister is in this House day after day boasting about how demand has increased in Canada over the last few months. He boasts about how in the first quarter of this year and the last quarter of last year we had an 8 per cent growth rate. This is how he answers questions when anyone questions him about the present state of the economy; he boasts about how demand has increased and how the economy has grown. Then in his speech he says that interest rates will rise until demand weakens. This is the "man" in the government who boasts about this growth in the last quarter of 1980 and the first quarter of 1981, and who is determined to keep on with higher interest rates until they stop that growth. He cannot have it both ways. He must stop talking nonsense and start telling the truth.
The minister went on in his speech to say that he will strongly resist demands for blanket protection which he continues to hear from the consumers. So be it, Mr. Speaker. We will see how long he keeps on that course. He looks to me now like a man who is weakening. He looks to me now like a man who is under very heavy pressure from the Liberal caucus because they can see their seats vanishing. They will not be back in this chamber in three or four years' time if they do not change the minister's talk about there being no blanket protection for Canadians who are suffering from these fantastic interest rates.
1 want to pass on to another point which is in this bill, one which is not widely known, and that is the effect of this legislation on the fishermen of Newfoundland, Labrador and the Atlantic provinces. There is a clause in this bill which changes a whole pattern of conduct for the sale of fishing gear in the Atlantic provinces, in British Columbia and wherever there are commercial fishermen. I have a letter before me from the Bay Bulls Trading Company in St. John's West. It is dated February 17, 1981 and reads:
Dear Sir:
We have just been advised of the imposition of a 9 per cent federal sales tax on all fishing equipment.
Although gear supplied to fishermen by wholesalers or fish plants holding FST exemption licences is exempt-about 70 per cent of all inshore fishing gear in Newfoundland and Labrador is distributed through general retail stores without licences.
In other words, in Newfoundland in particular but also in Nova Scotia and other areas there are small stores scattered about the many small fishing communities which have for years sold fishing equipment to the commercial fishermen federal sales tax exempt. There is no federal sales tax charged to them on the equipment. They did not have to collect it from the fishermen and then try to obtain an exemption from the department. That involves immense paperwork. The author of the letter, Mr. Earle, who is an experienced man in Newfoundland, says in his letter:
Consequently, because Newfoundland inshore fishing equipment sales amount to approximately $10 million per annum, one could expect $7 million to be sold through these smaller outlets.
Because small stores have neither the staff nor the time to make rebate claims to the federal sales tax department on a continuous basis, they will mark up the gross cost, (cost plus FST) and Fishermen inthe future will pay not 9 per cent, but rather 11 per cent extra on 70 per cent of the fishing equipment purchased.
Mr. Earle concludes that Newfoundland fishermen will pay approximately $770,000 additional in hidden taxes to the federal government through the change in this legislation every year.
What is the purpose of this, Mr. Speaker? We are told that the whole purpose of this provision is to stop some sports fishermen, or some people who are buying fishing equipment and who are not commercial fishermen, from receiving this exemption. Surely the amount of equipment which could be sold to people who are not commercial fishermen and not entitled to the exemption is minuscule. Perhaps it would amount to a few hundred thousand dollars, compared with the millions of dollars worth of equipment sold to commercial fishermen who will now be taxed because the people they deal with have not the facilities to obtain a federal sales tax licence exemption and have no facilities to handle the hundreds of requests they will have to make for exemptions when they sell equipment to Fisherman Brown, Fisherman Smith, Fisherman McGrath and fishermen of the various towns and communities of the Atlantic provinces and the west coast.
I brought this problem up with the minister. I have written to him about it and I have brought it up in committee. The only reason it has been suggested there should be this change is the reason I have given you, Mr. Speaker, which was the reason given by the minister in the committee. That is to say, to make sure that the exemption from federal sales tax for fishing gear is confined to genuine commercial fishermen. If the equipment is used for recreational fishing, most of that equipment should be taxable because no exemption is available for that type of equipment. So, Mr. Speaker, to try to close this little gap through which there is a small amount of tax exemption being claimed by people who should not have it, the government will make thousands upon thousands of commercial fishermen in Canada suffer, since they will be paying this 9 per cent federal sales tax even though they could claim an exemption were there provision for them to obtain such an exemption, and if the little stores they dealt with could hire the extra staff to master all the complexities of applying for hundreds of claims every year to obtain these exemptions.
The minister must have been anticipating my comments today since I received a letter from him today replying to my correspondence. The letter is dated May 19. I hope what he says in the letter will work out. He says that this is a complex problem. I agree. He says there is no easy solution. I agree. Then he says:
Nevertheless, I am informed that my colleague, the Hon. William Rompkey, Minister of Revenue, has developed new administrative procedures to resolve most of the difficulties described in your letter. First, goods which, by their design, are restricted to use solely in commercial fishing activities, for example, large nets, sinkers, floats, and metal panel opening devices, may be sold to dealers exempt of tax. Secondly, dealers will be allowed to purchase certain of
May 26, 1981

the goods which are normally used only in commercial fishing, such as fishing twine, hooks, lures and jiggers, exempt of tax, provided that they agree to collect tax on sales to persons other than commercial fishermen.
These are the arrangements which the Minister of National Revenue (Mr. Rompkey) is putting into effect to try to get around this problem. I hope these measures are successful in getting around the problem. The Minister of National Revenue is from a fishing constituency. He is now applying the iron heel of the tax collector to thousands of fishermen; he is collecting income tax from them with unparalleled ferocity. I am told that there is a little irritation in his district at the savage way in which fishermen are being treated by the national tax collector, the hon. member for Grand Falls-White Bay-Labrador. But if the Minister of National Revenue can do something to assist the fishermen with these administrative arrangements, I am sure that will help him in his extremity; and he is going to be an extremist before he ever passes through that district and gets re-elected to this House again.
There should not be any need for these cumbersome administrative arrangements. I do not know how in the name of heaven these new administrative procedures are going to work. I can only hope they do work because the minister would not change this legislation and go back to the old system despite my reasoning with him, the letters and correspondence we have had with him, and the correspondence also sent to him by the minister of fisheries of Newfoundland, who has once again been showing his concern for the problems of the ordinary fishermen of Newfoundland. Well, so much for that problem.
We have before us today, Mr. Speaker, a terrible piece of legislation. I am a lawyer. I have not practised since 1972; I have been too busy involving myself in public affairs, God help me! However, Bill C-57 is an illustration. How can the people of Canada possibly deal with the laws we are passing and the tax arrangements that we are making? It is a job for me to try to figure out what section is where in this piece of legislation before us. One would have to be a lawyer and a chartered accountant. One must be able to deal with Chinese inscrutability to try to understand the provisions of this legislation.
Where are we headed? How can we expect the ordinary person in Canada to understand what is happening and going on when even in this chamber with our expertise we cannot understand it? We had a committee, and perhaps it is still functioning, on subordinate legislation or on regulations. I think the hon. member for Willowdale (Mr. Peterson) was the chairman. I do not know if the committee has reported, but if it has, it does not seem to be getting us anywhere. One just has a feeling of complete and utter despair when one deals with amendments like this and the other financial amendments that we have in this House. When I was a minister, I could not bear to look at the bills I was trying to get through the House, they were so bad. It is even worse when one is in the opposition and must look at them and try to understand them. The ministers do not have to look at them or understand them. They have
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civil servants to tell them what is in them, how to understand them and what to say.
Another item that we are worried or concerned about on this side is the effect on universities of the provisions relating to their purchases of equipment which, up to date, have been exempt from federal sales tax if the equipment was used in their activities. There is a section in this legislation which puts the universities completely at the mercy of the tax gatherer and the people of national revenue when they import equipment. I do not have time in this speech to go into it in detail, but I have a letter dated May 21, 1981, addressed to the Minister of State for Finance (Mr. Bussieres) who is sitting opposite now.


An hon. Member:: Smiling!


John Carnell Crosbie: Did I pronounce his name correctly? Anyway, he is my good friend, mon bon ami. This letter was trying to reason with the Minister of State for Finance in connection with the purchase of equipment. I am sure the minister has received this letter. It will be brought up when we get into this particular subject, because we are going to move an amendment that the word "design" be removed from the relevant section of the legislation.
Just to give one example, though, because time runs on quickly, this university gentleman from the Association of University Teachers gives the example of a Croft grinder purchased recently by the University of Manitoba is deemed by customs not to be designed for use in classroom instruction and is therefore subject to federal sales tax. It is pointed out in the letter what a ridiculous conclusion that is. He says the new regulations are being interpreted by customs to mean equipment which is specifically and only used for university research, and that if it is used by anyone else, it is not designed for universities and they have to pay federal sales tax upon it.
Then he gives the example of computers, which I do not have time to go into today; the different treatment of computers at the University of Calgary compared to York University. He goes on to show how the government claims it wants the universities to do more and to spend more in research and development but, on the other hand, the government is taking further moneys away from the universities through amendments to this Excise Tax Act which are going to cost the universities millions of dollars when they buy equipment during succeeding years once this legislation is passed.
I only have time to refer to that problem today. However, I ask the minister, what is the point of our having a House of Commons finance committee conduct hearings and take evidence relating to the problems if there are going to be no changes? Surely that is one change that the government can still adopt. If it is equipment to be used by a university for teaching, research, or whatever, never mind whether it is designed so it can be used by other people in addition to universities. Allow them to have a federal sales tax exemption, as was the case in the past.
The hon. member for Edmonton West (Mr. Lambert), a very knowledgeable veteran in this House, has already men-

May 26, 1981
Excise Tax
tioned the automatic indexing of the excise taxes on liquor, beer, wine and tobacco. This is just a terrible precedent which has now been picked up by two provinces already, and I can understand why. The minister of finance for Newfoundland badly needs money, every cent he can get. The minister of finance for Ontario badly needs money. They are both going to sqeeze us until our pips squeak. That is the nature of finance ministers: they have to raise money.
The minister here is in the same box, but he creates a precedent for the provinces to index their taxation on liquor, beer, wine and tobacco. He wants to increase the tax as the cost of living increases every three months. I think there is going to be a change to make it every six months or every year. The government will not have to come back to this House any longer to ask for increases in the taxes on alcohol, beer, wine or tobacco. The people of Canada will just automatically have the cost of those products increased every three months, six months or every year as the cost of living goes up.
Surely, a government which is devoted, as it says it is, to fighting inflation should not include that kind of a provision in the legislation and ask the members of this House to pass it, so that automatically, if the cost of living goes up-I have forgotten which index we are using, and it does not much matter what index we are using-the taxes on those products increase. Very shortly we will have this as a feature of every one of our consumer taxes. It will not stop with just alcohol, wine, beer and cigarettes; that is only the start. Members of this House have little power anyway. We are in a presidential system. Once the government has a majority we might just as well all stay at home for the effect we can have on affairs, because the government demonstrates, with this bill that it refuses to listen to us or to the people who come before committees.
The government argues that indexing the excise tax is something similar to indexing exemptions under the personal income tax. There is not a word of truth in that.
I have to conclude now because my time is up. However, just let me say that indexing income tax does not protect government from inflation. It imposes greater burdens on the taxpayer. It exposes the taxpayer to the greater burdens of inflation. It does nothing to restrain the government in its operations. It does nothing to restrain government in its expenditures. It has the exact opposite effect of indexing personal income tax. It is completely inconsistent.
We hope the government will reconsider this provision and join with us in eliminating it from this bill before debate is finished in this chamber.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, I rise today to indicate a number of concerns that we have regarding Bill C-57, to amend the Excise Tax Act and the Excise Act, as well as to introduce some levies, which I suspect most members of the House realize are inappropriate, relating to the oil and gas industry and the provincial ownership of those resources.
I speak as a relatively new member of the House. I have really appreciated the opportunity of participating in the discussions via the finance committee and listening to the various witnesses that came before us, such as the city of Medicine Hat, the Hobbema Four Band Council from Alberta, the Canadian Community Newspapers Association, the Canadian Construction Association, Canadian Federation of Small Business, Federation of Alberta Gas Co-ops, the Canadian wine industry, the Canadian Federation of Independent Business, and a whole number of excellent witnesses who came before the committee because they were given an opportunity to react to Bill C-57.
These people were not trying to avoid paying taxes. They were not attempting to dodge around the legislation. They came before the committee because they had serious concerns about it. There were obvious weaknesses attached to the legislation. There were areas that had been almost obviously overlooked and perhaps provisions which had been assembled in haste. They wanted to draw our attention to those problems in the proposals in Bill C-57, based on years of expertise in the field of newspapers, distilling liquors and oil and gas development. We owe them something. I am sure the minister recognizes that we cannot ask witnesses upon witnesses to appear before the committee, listen intently to their concerns, become involved in elaborate discussions with them, read their intensive and extensive briefs, and then ignore them. What is that going to say to the people of Canada in terms of our Parliament and the committees of Parliament if we invite witnesses and then simply ignore what they say? The word would go out quickly, the word would spread as quickly as a grass fire on the prairies, that there is no point in raising issues with the subcommittee of the House because the government will simply ignore them.
We on this side are optimistic that the government will not ignore these witnesses and that it will come forward recognizing that there are some real weaknesses in Bill C-57 as it is presently drafted. In an effort to gain revenues perhaps the government moved too hastily in some areas. We hope now that it has the courage, in the interests of the country, to say that it is prepared to accept and make changes in certain areas.
What are some of these areas? I shall try not to mention points that we will be discussing in detail but will simply highlight half a dozen areas in the legislation about which I suspect every member in the House would agree that yes, concern is legitimate and changes are necessary.
This is the International Year of the Disabled. There is a clause in Bill C-57 saying that if you have a problem with your foot or ankle and a brace or a device is necessary to correct the problem, it is tax exempt. But if you have a problem with your back, your shoulder, your thigh, or any other part of your body, a brace is not tax exempt. Furthermore, if you are suffering from multiple sclerosis and need an entire body brace, you have to pay for it, yet if you have a problem with
May 26, 1981

your foot or your ankle, consideration will be given to covering the cost of any such device. Surely anyone will agree that that simply must be a bureaucratic oversight. The plight of people who suffer from serious physical problems must be recognized. Here is an opportunity to do that, particularly as this is the International Year of the Disabled.
Then there is the matter of newspapers. The present legislation will have a significantly detrimental effect on our small weekly community newspapers across Canada and on the small metropolitan dailies. It will remove some of their much needed advertising revenues. Surely in a country such as Canada, where information to the consuming public is so important that if a firm is to have a particular special or give the consumer a particular break we would agree that it should be widely known, that sort of information should be put in people's hands. The present legislation in attempting to get around the problem of certain firms slipping catalogues into our newspapers seems to have gone overboard, and by taxing one, two and three-page supplements in a newspaper is overreacting to the problem. We have proposed a number of amendments which hopefully will get around this problem without any serious difficulty at all.
I listened with interest at the beginning of today's proceedings when Madam Speaker indicated that motion No. 10 was really inappropriate in that it was asking the government to expend some funds to recognize the tax collecting role of the small business sector. I will argue that. But it seems that if the government were to introduce something of that nature, it would be quite appropriate.
It seems to me that earlier today we heard the Minister of State for Small Businesses and Tourism (Mr. Lapointe) stand up and say that the government is committed to the small business sector of Canada. We on this side certainly support that. If the small business sector is doing a real service for the federal government by collecting federal sales tax voluntarily, although they do not have a choice-nevertheless small businesses are prepared to co-operate, go through all the paper work and red tape necessary-the federal government should recognize that assistance by allowing small business to retain a small portion of the federal sales tax collected, up to a maximum of, say $1,000. This would not make any difference to the medium and large firms across Canada, but to small family operations it would make quite a difference. Most important, it would be an indicator by the government, a gesture, which says to the small business community yes, we recognize the role you are playing and the assistance you are giving us and this is our way of showing that appreciation.
It is interesting to note that every provincial government does allow a certain retention of sales tax collected, with the exception of Alberta. Alberta does not collect any sales tax so there is no need. Perhaps every other province recognizes the small business sector, assists it and has a number of programs in place which allows small business to retain a certain amount of the provincial sales tax they collect.
Again, we have put up a recommendation and a solution to this problem as we might call it. It is certainly within the
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government's ability to recognize the value of small business and to do something along the lines I have suggested as a demonstration of its concern and interest in the small business sector.
My colleague, the hon. member for Broadview-Greenwood (Mr. Rae) mentioned the art community. Again, surely to say that art is exempt from federal sales tax, but not original prints must be a bureaucratic oversight. Anyone who has paid any kind of attention to what is going on today in the art world in Canada would recognize the real place original prints take. We see them in art dealers' shops and in displays across the nation. These are quite different from the photo mechanical reproductions, posters and so on, which so many of us are able to acquire so easily. I say it is necessary, particularly during this time of repatriating the Constitution, of trying to build a support for Canada, of trying to instil in Canadian people a pride in our country, to recognize the role played by the artistic community. Original prints as an art form should be recognized and encouraged. I am sure all of us can recall a number of struggling artist friends or acquaintances. Here is one small way to say that we recognize their role in the development of Canadian society. I am sure that the provision imposing a tax on art is a bureaucratic oversight.
Then there is the matter of assisting learning institutions across Canada by providing tax exemption for materials used in classrooms, various utensils, instruments and other apparatus. These items should be recognized as being tax exempt, so this provision must be an oversight by the government.
One area particularly close to me is the construction equipment amendment that we have proposed, recognizing that construction equipment is exempt from federal tax but that dynamite is not. This is not a major provision because I am sure the amount of revenue the government can accrue by this clause is minimal. We are saying that in many parts of Canada where blasting is a very important function of the construction industry, the cost of dynamite is included in the construction cost. If we are to exempt construction materials, we should certainly exempt dynamite.
I do not need to say much about tax indexation this afternoon. A number of previous speakers have elaborated on that in some detail. It is so important, though, that I want to spend a moment or two on it. It is certainly a dreadful and horrendous foot in the door. This particular move will give the government a vested interest in inflation. It will be hoped that inflation continues because then revenues will continue. It is a way for the government to raise taxes without ever having to mention it in the House of Commons. It will be taxation by the back door. The government will look good. As far as the people of Canada will be concerned, the government will not be raising taxes again on tobacco, beer, domestic wines or distilled spirits. However, it will be taking place through indexation.

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We would have a difficult time trying to find a tax expert or financial adviser who says that indexation of taxation is a good idea. I have had the opportunity of speaking to a number of people in the financial field. I asked how they felt about this. I raised this with chambers of commerce in my constituency, asking what they thought about this proposal. I have yet to find an individual who says that indexation of taxation is a fine idea, particularly for a government that almost on a daily basis reminds those in the opposition it wants to wrestle inflation to the ground. This seems to be a peculiar route to follow.
My colleague from Vancouver will have a great deal to say, along with other members of the opposition, about the tax on natural resources in the west, mainly natural gas and petroleum. This is very clearly an inappropriate tax.
1 was very impressed when the mayor and a number of representatives from the municipality of Medicine Hat appeared before our committee. They went on at some length. Years back the city fathers of Medicine Hat felt it would be appropriate to take advantage of the natural gas deposits in their area. They developed those deposits in the interests of the citizens and the entrepreneurs of Medicine Hat. Inexpensive energy was an attraction for companies and firms wishing to move to Medicine Hat.
The representatives of Medicine Hat asked the committee to please give them some recognition. They pointed out that they are not a private company or firm, but a level of government. Recent court decisions have made it clear that governments are not to tax other governments. The city of Medicine Hat ought to be given recognition of their foresight and for the fact that they are a level of government taking advantage of a natural resource beneath them.
As one of many in the House concerned with the small business sector, and as our party critic or spokesman, I was impressed by the tales and stories brought to the committee regarding the impact of this tax on the small business sector in provinces like Alberta in particular. The large oil companies will not feel this or be bothered by it. Those who will really be hurt will be the thousands of small firms which service the oil industry.
I grew up in southern Alberta in the oil fields of Turner Valley. I know the kind of people who provide for the infrastructure of our oil and gas industry. They are not rich people. They are not, as is sometimes conjured, individuals with oil wells pumping in their back yards. These are small firms struggling to provide a service to the Canadian economy and, essentially, do a first class job.
These people tell us that levying this tax will reduce business and possibly drive them out of business. It will certainly have that result. In fact, we have already seen the beginning of it. Very impressive witnesses made presentations before the committee showing the linkage between the service firms which serve the petroleum industry and the effect this legislation will have on those small entrepreneurs. Again, this is from a
government that, almost on a weekly basis if not a daily basis, reminds us of its concern for small business.
What do they mean by that? Do they mean small business in certain parts of Canada? I do not want to be cynical or negative, but one gets the impression they are particularly interested in going out on a limb to service small business in certain parts of Canada. Let us ask for a demonstration from the government that it is in fact interested in encouraging, nurturing and recognizing the role of small business in all parts of Canada.
We will have many more comments to make as we go through the 135 amendments-my gosh-to this particular bill. I ask the minister this afternoon to remember those witnesses who came some distance and went to a great deal of effort to indicate to us some of the problems associated with Bill C-57. I ask the minister to recognize that their request is not to avoid paying taxes or avoid being responsible individuals or firms, but to stop what appear to be bureaucratic oversights. I ask him to consider that and show us in good faith that the government is prepared to listen to the witnesses and to our voices in the opposition and come forward with some recommendations very quickly.


Benno Friesen: Mr. Speaker, I want to associate myself with the remarks of the previous speaker, the hon. member for Kamloops-Shuswap (Mr. Riis) in his sane, reasoned, dispassionate and very sensible appeal to the minister.
I was told by one of the groups lobbying the minister at the time the measure was before the committee that the minister at that time promised that if serious representations were made to him at report stage about what are apparent deficiencies in the legislation, he would give serious attention to representations in order to improve this legislation. If that message got back to the witnesses who appeared before the committee, I agree with the hon. member for Kamloops-Shuswap, they will be watching these proceedings to see whether the government is taking seriously the commitment made by the minister that he will give attention to representations made by witnesses, members of the government's back benches and opposition members regarding serious shortcomings in this provision.
While watching the news on television at home this past week, I saw a news report on the meeting of the consumer affairs minister for the province of British Columbia with a number of citizens, citizen's groups, representatives of the Vancouver city council and people in the downtown Vancouver area around Carroll Street who were very concerned about the liquor outlet store in that area. It served largely what are called the winos, or alcoholics. These people were concerned that the government store in that area was perpetuating the problem of alcoholism in that community. The B.C. minister of consumer affairs was taking notes, meeting with the people of that area, wanting to hear what they had to say in order to see whether the government store should be closed down in an attempt to provide some relief to the community on a very serious social problem there. The lesson to be learned is that
May 26, 1981

when the government acts, it inevitably affects social needs and social reactions in that part of the community.
I would like to draw the minister's attention to some of the social effects of this particular bill on the people in the community. Members of the House know me well enough to appreciate that the tax relating to liquor and alcoholic beverages will not affect me much. I think probably the whole alcoholic industry could be diverted to the production of gasohol and in this way would probably serve us a lot better. In any event, the change will not really affect me, and I have no axe to grind in this regard. However, I am concerned about the social effects of this particular piece of legislation.
I have before me statistics, which have been given, I am sure, to every hon. member, regarding the apparent effect of tax legislation on wine, beer and distilled spirits, and the change in consumption patterns resulting from taxes levied on those products.
It is my understanding that prior to April, 1980, and the imposition of these tax changes, for the period 1974 to 1980, the average annual percentage change in respect of beer was
1.7	per cent, in respect of wine 8.3 per cent, and in respect of distilled spirits 3.3 per cent. However, between April, 1980, and January, 1981, the percentages of sales compared to the previous period were as follows: a decrease of 3.6 per cent for beer, a decrease of 1.8 per cent for wine, but an increase of 4.6 per cent in respect of distilled spirits. If we accept these statistics, we see that there has been a radical change in the consumption of what we call hard liquor.
My question to the minister and those on the treasury benches generally is whether it is in the interest of the government to bring about tax changes which encourage an increase in the consumption of hard liquor. Given the fact that the public is going to continue drinking beer, wine and hard liquor, is it in the interest of the government to encourage the public to increase consumption of hard liquor by changes in the tax structure?
The government has an obligation to look at the social effects of the tax measures it brings forward. In the measure the government now wants to validate through Bill C-57 it is implicitly saying it wants people to be deterred from drinking those beverages with less alcoholic content, and wants them instead to drink beverages with greater alcoholic content.
I keep wondering in the back of my mind what percentage of the revenue the government collects through these taxes is being spent on programs to alleviate problems it creates through the encouragement of the consumption of alcoholic beverages? The government collects "X" millions of dollars per year in taxes on alcoholic beverages. What percentage of that revenue is it spending on health measures, rehabilitation, and so forth? It seems to me the government is making money on something that is a potential health hazard to Canadians.
Secondly, I am concerned, as are other members, about the indexation provisions of this measure, what can become a hidden tax, and I am concerned for two reasons. This measure
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perpetuates increases in the future. An automatic continuation of these increases is wrong. The government is already making money on inflation in the way it is indexing taxes and in the way taxes are increased by percentages. In this way it is creating a situation in which it makes more money on inflation. I think the minister has to agree with that. The government increases its revenues every year because of the percentage basis on which it operates. If it does that in this area, it seems to me it is perpetuating something without examination, and that is wrong. One of the fundamental functions of Parliament is to examine and re-examine. Through indexing this increase, the government is taking that function away from Parliament, making it an automatic process.
The third subject matter I wish to speak to relates to clause 12 and really has to do with social policy as it is affected by taxation. Clause 12 deals with the tax to be imposed on the sales of metric scales. The clause reads:
(2) The tax imposed by section 27 shall be imposed only on fifty per cent of the sale price if manufactured in Canada or fifty per cent of the duty paid value if imported, of metric retail scales having a maximum weighing capacity of one hundred kilograms and specifically designed for the weighing of goods in retail operations, when sold or imported before January 1, 1984.
If there is one policy other than the government's policies on energy and the Constitution which creates alienation, particularly in western Canada, it is its policy on metric conversion. In this bill the government indicates it is going ahead with its metric policy by which all retailers will have to buy scales in metric-they are being forced to buy new equipment-but the government is going to be very nice and will impose the federal tax on only 50 per cent of the value of those scales. "Aren't we great guys? What a wonderful lot we are", they say. Let me say to the minister that if he wants to increase the feeling of hostility out there in the small business community, he simply has to continue the imposition of metric by compulsion and then punish that community through taxation for obeying government orders. That is wrong. Then it compounds that sense of hostility by making it look as though the government is doing the small businessman a favour by taxing only 50 per cent of the value of the scales.
I am concerned about the social effects this kind of legislation will have on the business community and the consumer, because the small businessman has to pass this tax on to the consumer. If witnesses are correct, the change to metric will cost us at least $500 million and the consumer will have to pay that. Mr. Speaker, I see that it is six o'clock.


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
[Stage Direction]
May 26, 1981
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Mr. Deputy Speaker:: When the House rose at six o'clock, the hon. member for Surrey-White Rock-North Delta (Mr. Friesen) had the floor.


Benno Friesen: Mr. Speaker-


M. Pinard:: Mr. Speaker, I am sorry to interrupt the hon. member, but I am told by the Minister of State for Finance (Mr. Bussieres) that he has had consultations with his colleagues on the other side and that they have come to an agreement. So before my hon. colleague goes on with his speech, perhaps we could settle that matter by reverting to motions.


Mr. Deputy Speaker:: Is there unanimous agreement to reverting to motions?


Some hon. Members:: Agreed.



ROUTINE PROCEEDINGS


Pierre Bussières: Mr. Speaker, as I explained briefly this afternoon, I ask the unanimous consent of the House to table two notices of ways and means motions, one concerning the Excise Tax Act and the other Excise Act. I have already indicated that this is necessary because we want to amend the provision concerning the quarterly indexation for tobacco and alcoholic beverages to provide for a yearly indexation. My explanations failed to convince the hon. member for Edmonton West (Mr. Lambert), and he was quite right since the tabling of a ways and means motion is justified if the period over which the indexation will apply is being changed, thus bringing about a change in revenue. As I said, I failed to convince the hon. member this afternoon, but following our discussions and after examining this provision concerning the new period, the hon. member for Edmonton West informed me that a ways and means motion was required to make such a change.
Therefore, Mr. Speaker, with the unanimous consent of the House, I shall now table the two ways and means motions and ask the House to approve them. I shall also ask the unanimous consent of the House to table the amendments related to these ways and means motions, namely three amendments which will provide for a yearly indexation instead of a quarterly indexation. I wish to thank the hon. members for their excellent co-operation.


Mr. Deputy Speaker:: The minister asks the unanimous consent of the House to table two ways and means motions. Is there unanimous consent?


Some hon. Members:: Agreed.


THE EXCISE ACT (2)
Pierre Bussières: That a Ways and Means Motion to amend the Excise Act, notice of which was tabled in the House on Tuesday, May 26, 1981, be concurred in.


[Stage Direction]
Motion agreed to.

Pierre Bussières: That a Ways and Means Motion to amend the Excise Tax Act. notice of which was tabled in the House on Tuesday, May 26, 1981, be concurred in.


[Stage Direction]
Motion agreed to.
Pierre Bussières: Mr. Speaker, of course, the three amendments Nos. 8, 13 and 58 already tabled are automatically withdrawn and replaced by the three amendments I have just tabled.


Mr. Deputy Speaker:: As something which follows from what the minister has just done, the minister is seeking agreement to withdraw two amendments from the Order Paper.


Stanley Howard Knowles: Three.


Marcel Joseph Aimé Lambert: Mr. Speaker, may I suggest that perhaps the substituted amendments could occupy the same numerical positions as the original amendments because they fall into sequence as to, shall we say, the "logicality" of the debate. We are quite in agreement with that.	[DOT]


Mr. Deputy Speaker:: In order to have it clear, there is, first, unanimous consent respecting the two ways and means motions of the minister, and then two amendments will be withdrawn, but the same numerical sequence will be followed.


Stanley Howard Knowles: Three others.


Mr. Deputy Speaker:: Three others will be withdrawn, but there will be the same numerical sequence for the new material. Is that agreed?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: It is so ordered.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of Bill C-57, to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs, and motions Nos. 1 and 3 (Mr. Blenkarn).
Benno Friesen: 1 do
not know what right the hon. member for Edmonton West (Mr. Lambert) has to talk about the "logicality" of the debate
May 26, 1981

here. I have been here seven years and I do not know if the debates have always followed the route of logic.
At the dinner hour break I had been trying to make the point that Bill C-57 shifts the tax on alcoholic beverages in such a way that it changes the lifestyle of people. Figures indicate that the consumption of beer has decreased whereas the consumption of hard liquor has increased, and I am not so sure that is good for the country. My colleague, the hon. member for Bow River (Mr. Taylor) reminded me today that another factor enters into it, and that is that beer is really the working man's beverage, and he is right. A man does not come from the docks or the saw mill or the logging camp, and the fisherman and construction worker do not come off the job and go to the liquor store, and buy a $12 or $14 bottle of whiskey; they buy a six pack. So what we have here is another tax on the working man. If the government can find a way to tax the working man, they will find it, and this is a very important factor in this tax legislation before us.
Finally, the provisions on page 2, subparagraph 3 regarding the definition of a manufacturer or producer have some implications that seem at first to be innocuous but are actually fairly far-reaching. When one shifts the tax from the manufacturer and puts it on the wholesaler or distributor on products like cosmetics and so forth, I think two things can happen. I may have misunderstood the legislation and I would gladly hear an explanation from the minister on this, but it seems to me that we are changing the base of taxation because there is a manufacturer's price and a wholesale price. If you have a 9 per cent federal tax on the manufacturer's price of, say, a $10 item, you have a 90 cent tax. The wholesaler is going to add his 40 or 50 per cent, which now makes it a $14 or $15 item, and the tax will now be $1.40. I say there is a subtle shift here which provides more revenue for the government. Simply by changing the definition of a manufacturer, the government increases its income.
Second, it would appear to me that the cost of collection is going to be much higher. It is one thing to go to half a dozen manufacturers and have them collect the federal sales tax; it is another thing to go to all of the wholesalers and distributors and collect it from them. It seems to me that you increase the tax but you also increase the expense, and I am not too sure that the economics justifies the shift, but it appears that the consumer is going to be the loser because the bottom line is that the government will make that much more, which means inevitably that the consumer will pay that much more.
I really end with what I started with, that when the government brings forward a piece of legislation which is supposed to be a routine tax measure, in this case the excise tax, it behooves the government to look at all the shifts that take place.
I want to emphasize the cost that these provisions represent to the country in terms of human relations. There is no way in which the government can pretend to be Canadianizing the country with a national energy policy when the policy implications themselves tear the country apart. You can talk about Canadianization by buying out oil companies such as
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Petrofina-and to me one of the most odious things about the policy is that the government now requires other companies to collect the tax to help support a competitor, which does not seem exactly right to me-but in buying out the other companies the government is going south of the border to use American funds to buy out existing companies in Canada and calls it Canadianization. There is no way the government can genuinely talk about Canadianizing an industry when in the process of doing so it brings about tensions in the country which have the potential of tearing it apart. I think, Mr. Speaker, at the outset of the debate we indicated there are possible serious repercussions from this legislation, and as the debate goes on I believe you will find there are many other issues that are going to impinge on the government. We will wait to see whether the minister was serious when he said before the committee that he will listen intently and be willing to introduce amendments that will prove to those witnesses who came before the committee that the government indeed is listening.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my comments will be very precise on one section of these motions. Starting with No. 46 and going on to No. 51, my comments have to do with a subject known as gasohol which you have heard discussed before.
As this House probably knows, gasohol is now legal and encouraged in over 30 nations in the world. One nation, namely Brazil, requires it for all motor vehicles. Canada, however, has been lagging behind, and I am very pleased to support clauses of the bill dealing with gasohol, although of course they put it in words that are a little bit difficult for the layman to grasp. When you have a legal still on your farm or in your home you no longer call the product alcohol, you call it denatured spirits. Now if we get that point clear in our mind, then we see that the various clauses of this bill lay down the terms for having a legal still if you are producing denatured spirits. In plain English this means alcohol that you cannot drink.
These proposed amendments dealing with gasohol try to make the terms of this excise tax act workable. In dealing with the question of a licence, the bill says that a special temporary licence to encourage or engage in the manufacture of denatured spirits may be granted by the minister to any person. It must be obvious to any thinking person, Mr. Speaker, that if you are granted a temporary licence and later on you find its duration is for one year, you will not want to build a still. For all practical purposes, the still that we are talking about costs anywhere from $4,000 to $25,000. Now I have seen pictures of these stills. Because they are illegal in Canada, all it is legal for me to do is to look at them.
I think the type of still which will serve the purposes we are trying to achieve in this innovation will suit the average home or farm. If we look at the figures of the Department of Agriculture, we find that they calculate, for example, that on the average grain farm in western Canada there are approxi-

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mately 1,000 bushels of grain which are usually classified as waste. At one time this grain was used to feed chickens and pigs. Now they do not have chickens and pigs on farms because they cannot afford them, so they must get rid of the waste in another way. By putting it through an alcohol still, they can get rid of this waste in a very useful fashion, as long as it is called spirit. When a farmer makes alcohol, he has relatively no fuel costs because there is another waste product on his farm called straw. It is a difficult chore to get rid of straw. By bailing this straw and placing it into a furnace, he can apply a steady heat to the still which keeps it from getting too hot and exploding. Therefore, he does not look upon it as a cost; he is just getting rid of a waste product. Elowever, it is a cost to the commercial manufacturers. After the farmer has used the straw to distil the alcohol, he passes on the heat to his barn or his home to heat them. This is a second use of the waste product for heating. He takes off the alcohol which is worth $4 for every bushel of waste grain he puts through. In addition, he gets 42 pounds of mash with a very high protein rating and tremendous digestibility. Having gone through the distillation process, it is much easier for animals to digest. Therefore, more meat is put on the animal or more milk is produced, whatever the case may be.
If the farmer puts in a still to meet all these conditions and to give him some form of relative or comparative advantage over the commercial manufacturer of alcohol, he will require a still which costs from $4,000 to $8,000 depending upon his plans. He will not spend that amount of money if he has a licence for only one year because he will never get his money out of the still.
The first motion simply deals with this matter. If we take out the first two or three lines and include a clause which takes away all ambiguity, then a person, a group of persons or even a group of people connected with a corporation, because 15 per cent of our farms are now incorporated, can take advantage of it.
I do not think I am asking too much when I ask all hon. members in the House to support this series of motions. I have described in some detail the common-sense approach of not limiting licences to one year and of not limiting them to one person. Farm activity is organized either by a single farmer, a farmer and his son, a farmer and two or three of his neighbours or, in some cases, farmers' co-operatives, who use the same still. Therefore, this legislation must be workable and economic for farmers, and it must satisfy the types of organizations used by farmers when dealing with these problems.
The advantages of a legal still are obvious. It will only provide enough alcohol to meet 2 per cent to 5 per cent of our total energy needs. The Americans are going at it much harder. They are planning to satisfy 8 per cent or 10 per cent of their total energy needs from alcohol. By giving large subsidies to big companies, small companies and individuals, they will reach in the fall of this year, the target they set some years ago of producing around two billion gallons per year.
This takes up a very big proportion of energy, but it worries many thinking people in the United States because farmers
and some of the companies that are heavily subsidized by the program are taking advantage of the subsidies to reduce their costs. They are producing more and more alcohol but are using good farm land to produce waste in order to make alcohol. Good farm land is needed much more desperately in the world to feed people.
The concept in these motions is to give enough economic leeway to the project so that farmers, either an individual or a group of individuals in any structure they like, can pick up the waste on their various farms and make good use of it; it must be a viable operation. We do not want them to use good grain or vegetable land, which should be used for the production of human food or cattle feed, to produce alcohol for the automotive industry.
Let me make one point clear. This legislation is modest in U.S. terms. The variation in each of the United States which have legalized the still is great. Limits should be imposed in one of these motions in such a way that no one will be going into production of alcohol as a big business. It will be simply for the purpose of getting rid of waste and allowing the person to make money. The country will benefit in that farmers will produce alcohol that cannot be drunk for use in the gasoline tanks of tractors, trucks or automative machinery which takes that type of fuel. It does not give any more miles per gallon, but it keeps the motor clean and the motor lasts two or three times as long. This is important in this day and age when car motors, particularly small ones, only last 100,000 miles. By keeping the motor clean with the addition of alcohol to the gasoline at a one to nine ratio, or 10 per cent alcohol, it will last two of three times longer; in other words 200,000 or
300,000	miles. The same ratio is maintained for tractors and trucks.
Those are the main points I wanted to mention. Of course the motions do not make sense unless one has the act in front of one, and if one is really astute, one would have the old act as well. If one reads these acts, one finds that these motions are carefully drawn. Unless there is some legal opposition to them, I think every member in the House could support them.
Turning now to the duration of the permit, it must be at least five years to warrant building the stills, and the five-year term should be renewable. It will be the responsibility of the minister and his staff, which really means the excise people and the Mounted Police, to decide if there is any abuse of the act. Therefore, cause must be shown before it can be taken away.
The quantity a farmer can produce should be extended to cover the majority of farmers, and the period of time should be set for a minimum of five years for any person legally operating a still with no interference at all. The state will have the power, through the permit and through the bonding procedure, to make sure the law is not abused.
I do not think I am speaking out of line when I say that representatives of the RCMP have seen the plans for the stills which will be offered under the regulations, as have the excise people. Both are satisfied that no one will fool the government and that it will not create a hardship. If we put the bill
May 26, 1981

through today as it is, it will not work because no one will build a still with a temporary permit of one year and no one will build a still if it does not satisfy one's particular needs. In other words, perhaps it will take the waste of two or three farms to keep the still operating efficiently.
There may be other matters which can be covered when we come to a detailed discussion of the motions which are before us. I think the four or five motions which deal with stills can be grouped together and voted on. They are simply designed to help in every way an individual, or a group of individuals, who wish to have a still. There is nothing in these regulations to stop a city person from having a still. Plants can be grown in a city garden, or waste can be picked up around a city, which can be used in making alcohol. Artichokes are better than grain, and sugar beets are also very good for making alcohol- any number of substances can be used for this purpose.
So long as we make it legal for those who wish to make alcohol within reasonable economic limits, I think this legislation is a big step forward. It puts us in tune with the progressive nations of the world. Above all, it allows us to move forward into the area of renewable energy resources, while at the same time it allows us to get rid of our waste. I would ask, therefore, that members of all parties give serious consideration to voting for the five motions which are before us. I think one of the motions should be dropped, but that can be decided upon later on.
Most members of Parliament do not talk about alcohol, but we have lived with this religious phobia in Canada too long. Now that there is a perfectly legitimate use for this type of alcohol, I think we should let this legislation go through.


Mr. G. M. Gurbin (Bruce-Grey):: Mr. Speaker, I am very pleased to be able to join in this debate tonight, and to be called upon to follow the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton). Much of the emphasis of my remarks will be in tune with the comments made by my hon. friend.
I would first like to discuss the bill from the aspect of the confusion caused to people who are trying to understand what it is we are debating. This is an omnibus bill which covers a number of areas. It has really been an effort to put into one measure matters which do not necessarily fit together. While we talk about fuel alcohol in one instance, we also talk about the excise tax on natural gas, which includes the area of small business. I think the way in which this legislation has come forward is not the most appropriate, and it is therefore confusing. On a broad scale, what this legislation indicates is the approach and philosophy which this government has toward the raising of revenues. Unfortunately, many of the measures in the bill before us look for ways to close what could be considered loopholes in many small business areas. In many instances it seems as though it will take as much money to collect these revenues as it would cost the government in lost revenues were they not collected. In this way it is really not a very productive effort.
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One matter which I wish to deal with very briefly is the fact that small business will feel the brunt of this legislation in many ways. First, it will be imposed upon to do more paperwork. The small businessman will have to comply with government regulations in a number of ways. Apart from placing a double layer of revenue on the final cost of a product, this legislation will impose a burden on that very sector of the economy which we hope would help to revitalize the whole Canadian economy. In this way it is a measure which is difficult to support.
One of the other major issues I wish to deal with is the petroleum and natural gas revenue tax. This is a tax which has an unfortunate consequence, particularly at a time when we are trying to achieve self-sufficiency, and trying to move toward alternative sources of energy, away from oil and into the use of natural gas. The net effect of this tax has been to create a large number of what can be called "marginal wells", areas of marginal production which are very questionable economically. We have ended up in a position where we find our natural gas exports to the United States markedly decreased. The market for natural gas is not there because of this increased tax.
Before I deal with the question of fuel alcohols I would like to deal with the 8 per cent petroleum and natural gas revenue tax. The point should be made that this tax is applied right at the wellhead, with a couple of major consequences. One of them is the effect this tax has on producers, particularly those in marginal areas. The tax does nothing to help in terms of improving exploration and development, nor does it assist in making the necessary steps needed to improve our net production of energy in this country. Thus at the producer level, this tax is having a detrimental effect.
In addition, this taxation places another layer on the taxation which already exists on the oil industry, with the cumulative effect of a 50 per cent decrease in exploration which has been seen in the last year or so. There has also been a 70 per cent decrease in the amount of land coming under exploration. In total, we are looking at about 20,000 workers in the oil industry who will be out of jobs this summer. This, in turn, will have a tremendous economic impact on the whole country. Finally, by placing this tax at the wellhead, the federal government puts itself in direct confrontation with the oil-producing provinces.
The fact is, Bill C-57 includes an aspect which is now before the Supreme Court, that is, the natural gas and gas liquids tax. It is a very serious constitutional debate in terms of the relationships between the federal government and the provinces.
I would now like to discuss the section of the bill which was dealt with by the hon. member for Qu'Appelle-Moose Mountain. The situation we have in Canada at the present time is that anyone who wishes to produce spirits or alcohol, whatever you wish to call it, is required to post a $200,000 bond. This does not mean that one must pay $200,000 but there is a significant economic factor involved for small producers. Also,

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there is a $7.50 per gallon excise tax on the alcohol which is produced. That is the way the law stands now.
More important than these two aspects is that one must pay a $250 annual licence fee, and it is necessary to have inspections performed involving other additional costs. These regulatory measures are clearly not conducive to the production of fuel alcohol. Perhaps the most obvious symbol of all these difficulties can be found in Gentle Ben and Mr. Thomas. Through Mr. Thomas's considerable ability in media relations, he has reached the point where he has been called into court. This was the first instance in which Canada recognized the fact that alcohol could be used as a fuel. It was a milestone in the evolution of fuel alcohol. There is another gentleman who I think is also worthy of mention. He is Dr. Les Emery, who has done a considerable amount of work in this field. He is looking at the use of units smaller than the individual farm, but ones which would have an economic viability, to spur on the development of all fuel alcohols.
I think the particular problems of the bill have been well identified by the previous speaker. If one is really serious about trying to replace some of one's own requirements with alcohol, one has an immediate difficulty because of the longevity of the terms of reference of the bill now. A temporary permit which would last for one year would clearly give no incentive and, in fact, would take away the desire of anyone to make any sizeable investment. At the end of the year, as it now stands, it could result in people having to actually physically dismantle their apparatuses and cease operations. That is clearly something which must be changed and must be expanded. Five years is a good idea, and should also be renewable on a five-year term unless there are clear problems. So that is one major point in that whole issue.
The second matter is whether or not it should be confined to personal use. The idea of a co-operative development also has a particular appeal in some ways. If a person or a farmer is producing fuel alcohol, even in small quantities, he will probably be producing more than he can actually use in his vehicles on the farm. He should be able to sell his overproduction on the commercial market in some way, whether to other farmers, local people or to a company of some sort. There have been indications that companies will be glad to accept this overproduction. If he does not have that access, then there is another major block in the economics of the evolution of the whole process. So the provision must be expanded to cover more than personal use.
Another point I would like to make is that under section 76 of the bill, there is an inclusion that those who apply for these licences should provide a specific diagram to the minister or his representatives who would decide whether these licences would be approved. It is very important that this measure be revised so that it would not be necessary for anyone, particularly farmers, to present technical drawings which we would normally expect from engineers. That is a weakness in the legislation which could cause real difficulty for many people.
The measure should be revised or at least clarified so there would be an understanding that sophisticated, engineering-type descriptions would not be required. Indeed, many people would not really know the complete network of materials required when they first started, and that could solve another problem.
The five amendments which the Conservative party has presented address these difficulties in many ways, and we would like to support them. It is important, when we are looking at this whole issue, to establish some of its bases. We must clearly understand that we are dealing only with the specific area of the regulatory aspect of allowing the production of fuel alcohols, and it must be put in a broader framework which must include the production and end use aspects. It must be considered in the context of helping to achieve selfsufficiency of the whole country by whatever mode of fuel is used.
One question becomes very important. How much of our total transportation requirements will be met through the use of fuel alcohol? Another question is, on which fuel alcohol would we like to put major emphasis? We can look at the United States as an example to see what it has been doing. Last year, in 1980, it produced approximately 100 million gallons of ethyl alcohol, ethynol, to provide an adjunct to its normal transportation fuel requirements. To put that in context, in one year the United States uses approximately 50 billion gallons of gas and diesel fuel. Even with the dedications shown so far, with the hopes for the future, and with the feedstock being used, although it may be of economic importance what we have is a fairly limited added source of transportation fuels required all across North America. By 1985, the United States hopes to produce about 10 per cent of its requirements. That would be about 500 million gallons. What has been achieved this year, or what is likely to be achieved because of a number of things which are happening in the United States right now, is approximately 110 million gallons of fuel.
We must be careful to keep the perspective in mind that what we can do with the fuel alcohols is to stretch some of our normal requirements. If large amounts of grains and other agricultural products were dedicated, and 1 am not referring to waste products here, we would end up with some degree of competition on the feedstock market. The price of grains would increase or we would face a shortage in one area or another. Then the controversy of food versus fuel would indeed be very well fuelled. There is a very important sector, particularly in the farming area, which can be well served by the development of these facilities. I would encourage that development, but 1 think the total picture must be kept in perspective.
1 might mention that the difficulties will be in the actual technical aspects. Although the process of distillation and fermentation is 6,000 years old, when we get into some of the newer techniques which will optimize the economics, more and more sophisticated apparatus is required which will need more careful attention and management during the ongoing produc-
May 26, 1981

tion. The buildings are more sophisticated. These developments are difficult for a private or individual person to keep up with and, as time goes on, it may either improve or get worse. This is one of the reasons, why, in my own personal view, I think that a small number of farmers working together in a co-operative type of group makes more sense because then they would be able to keep up and would have access to the newest techniques. The other aspect, of course, is that efforts are being made for the future in genetic engineering to optimize the processes required to break down the starch or cellulose from which we would be working.
The end uses are another important point for individual users to remember. One hundred per cent alcohol or a typical gasohol, which is anywhere from 10 to 20 per cent alcohol, can be used without any difficulty in most current engines. However, there may be difficulties because too much of our feedstock resources would be dedicated to that area and also because of the mechanics of the end uses, and so on. So although engines may seem to be working well now, other problems may be created.
I tried to convey to hon. members that we are dealing only with one aspect of this bill right now. Agriculture Canada has been doing a fair amount of work in trying to explain the processes and concepts of the whole issue, and should be commended for it. What I fear we have right now is one sector of government operating almost in oblivion of another. This is not unusual. It is a difficulty which needs to be watched and addressed. But we now have before us ways to open up opportunities. Yet I think individuals are in grave danger of being taken in by those who would capitalize on this opportunity with equipment which does not comply with a certain standard or that will not produce as expected. I think there is a danger for the individual who is trying to produce something. People need to have access to up-to-date important mechanical, technical and biological information that will make it possible for them to be efficient and effective.
We need co-operation and understanding. We probably need a drive by Agriculture Canada to make information of this sort available to people. I hope we are successful in passing this bill.
We have attempted, while addressing this bill, to free ourselves of our dependence on imported oil so as to become self-sufficient in energy in the future. This is a move which needs support. It is an important move and is something which should have been done several years ago. We seem to be two years behind in terms of what we are proposing right now in comparison to the American experience, and that is too bad. As an example, the American small producer, by making a telephone call, has access to a licence which allows him to produce.
This bill needs to be supported. Until now we have been discriminating against renewables. I think it is time that we got this measure and many more like this one passed through Parliament.
Excise Tax


Mr. Gordon Taylor (Bow River):: Mr. Speaker, Bill C-57 is designed to provide money for the federal treasury. We all realize that money is necessary for the federal treasury. However, an excise tax or a tax that goes through the back door or one that is questionable in that it does not have the support of the people of the country, may well backfire and be counterproductive in the long run.
I shall try tonight to show why the excise tax on natural gas and the production tax are ill advised. Both of these taxes are hurting the country. Both are preventing development. Both are driving capital and jobs out of the country. I find it difficult to understand why the government insists on proceeding with this type of taxation in spite of all the evidence now available showing the terrible effect it is having on our country. I shall try tonight to show how some of these things are actually working out.
For instance, the excise tax on natural gas is a tax which does not hit the large oil companies. It is not a tax on those with plenty of money. It has no bearing on ability to pay. It is actually taxing the people who can least afford to pay. In addition, it is hurting Canadian food production.
The increase in natural gas immediately affects the chemical industry. Consequently fertilizer prices have to rise. The use of the gas itself in industries such as the Alberta provincial gas co-operatives also has a detrimental effect on production. The biggest effect it has and the greatest damage that is being done is that of cutting down production. It takes money from the farmers' pockets. As a result, the farmer cannot buy as much fertilizer so he resorts to summerfallow. In turn, less extensive use of the land is made which means less production and less dollar return for the farmer. Consequently, with fewer dollars, the farmer is unable to buy the machinery or the clothes he wants. Fewer manufactured goods are purchased. In a nutshell, almost every segment of industry in the country is affected.
A few weeks ago representatives of the Alberta gas co-ops were here to make representations to the finance committee. I was very disappointed indeed that the finance committee did not pay attention to the strong arguments presented. These men were all producers themselves. They tried to show what effects there are when the production of food is cut down.
Any tax that will cut down on food production in Canada is dangerous. Our farmers have to make a living if they are to stay on the land. Already, with high interest rates and the cost-price squeeze, many farmers are not able to keep their heads above water. Some have gone into bankruptcy, as 1 mentioned the other day when discussing the bankruptcy bill. Some are on the verge of bankruptcy, not knowing which way to turn at the present time. Some are going into receivership. Possibly the majority are those who are simply saying "what is the use" and are giving up and not producing anywhere near what they can. All of these consequences will be very detrimental to the country.
I urge government members to pay attention to what this excise tax will do to agriculture in Canada. They are not hurting the multinationals; they are hurting ordinary everyday

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industry in Canada. They are hurting the farmers, the shops and all the stores. Workers are being laid off. Every segment of industry in Canada is being affected. I do not know why the government persists in keeping this tax or why it is doing other things which hurt our farmers. Even without the extra tax now being levied at the gas pumps it is most difficult for farmers to continue on the land.
I want to read into the record a letter which was published in a number of papers throughout Canada. It was written by a farmer from Three Hills, Alberta, by the name of J. T. Bishop. He wrote:
1 must protest the totally unfair tax on petroleum products to pay for the Petrofina takeover. This tax is as unjust as the English Tea Tax that precipitated the Boston Tea Party and the American War of Independence.
Hard pressed western farmers, because of their high energy use, are forced to pay 10 to 20 times as much as the average Canadian to buy service stations for eastern Canadians we will never use. In addition, because of the wide use of natural gas in Alberta, Albertans must pay more tax on natural gas than all the rest of Canada combined and have nothing to show for it. In my case, with several large broiler barns in operation demanding high consumption of natural gas to maintain the necessary heat for chicks, I will pay probably 10 times as much in this sector as the average farmer who heats only a home and possibly a shop.
1 am fully in agreement with the principle of Canadian ownership, but totally opposed to the principle of government ownership with all the inefficiency and feather bedding invariably involved that fattens the bloated federal bureaucracy and Liberal political hacks.
If I must pay into buying Petrofina for PetroCan, 1 should be issued shares in it according to how much I pay and be able to collect dividends as an investment to offset the hardship created by these forced payments. This would be fair to everyone. I would be contributing to the Canadianization of the industry and as a part owner of the company I could be proud of PetroCan and support it.
As a state-owned company I pledge that I will never buy a gallon of gas from PetroCan as long as 1 can get it anywhere else. In addition, such a completely unfair tax raises the importance of the objectives of West-Fed as the only way we can get fair treatment for the west.
That was signed by a farmer, not a red neck revolutionist but an ordinary farmer who worked his way up to where he is today. Now he sees his investment disappearing because of unfair taxation. This excise tax on natural gas is completely discriminatory. It hurts British Columbia and hurts Alberta even more because we have made use of natural gas. This discriminatory tax should be wiped out. Rather than unite this country, it will turn those who are supporters of the present government against them. They can see how unfair this tax is.
1 support the plea made today by the hon. member for Etobicoke Centre (Mr. Wilson). He asked the government to consider totally removing the excise tax and the production tax as well. This tax will only add fuel to the fires of separation in western Canada. It will build up disunity in eastern Canada as well. It is finding its way into almost every industry in eastern Canada. Not only does this tax not do anybody any good, but it is wrong. The hon. member for Edmonton West (Mr. Lambert) said that this tax defies all conventions. One government does not tax another. The Queen in right of the federal government should not tax the Queen in right of the provincial government. A provincial government should not tax another provincial government. This is a long-established principle.
This government pays no attention to conventions. They have a majority, so they do what they want, regardless of whether the people want it or not. I do not know how long the people of Canada will put up with that kind of attitude. This government will not listen to reason. Even though the Supreme Court of Alberta declared this illegal, it makes no difference to this government. They continue to collect the tax in spite of that court order. We wonder why our boys and girls are going wrong and are defying the law. This government sets the example of defying the law. I repeat, they are collecting a tax ruled illegal by the Supreme Court of Alberta.
Under our conventions, no government of any political stripe has ever taxed another government in order to fill its treasury. That is not right. It is wrong and this government will not listen. I do not know how long the people of Canada will put up with this government's attitude. I certainly do not think those in the west will tolerate it. It is getting worse every day.
This government is pouring oil on the fire. It is similar to the story of the Pilgrim's Progress where one fellow was trying to put out a fire by pouring water on it while someone on the other side of the fire was pouring on gasoline to keep it going. That is what this government appears to be doing.
For years our Indian people have been on the verge of starvation. Ask any member who has visited a home on an Indian reserve whether he felt proud to be a Canadian. In the last few years, the Indians have been trying to get on their feet by developing their natural resources. In spite of the fact the law states that Indian reserves should not be taxed, the federal government is levying a tax on natural gas on Indian reserves. This government is denying our native people the opportunity of becoming self-sufficient and being in a position of making a contribution to this country. Our native people want to live a life they can be proud of and give their children the education they deserve instead of living in poverty and facing near starvation.
We hear a lot of talk about the poor and the hungry of other countries. Visit some of those in Canada who are hungry. Indian people are being forced to go back to where they were 20 years ago. After having got to where they are today through hard work, the government insists on its pound of flesh, regardless of what it does to our native people. Shakespeare wrote about taking your pound of flesh, but said you must not drop one ounce of blood. This Minister of Finance and this government insist on taking their pound of flesh, even from those on the reserves. I do not know how long the Indian people will put up with that.
The government will not listen to the people. I cannot remember when any government was so indifferent to what is going on in the country. It just does not care. We ask question after question and all we get are frivolous answers, even from the Prime Minister (Mr. Trudeau). When we talk about hunger and starvation in this country, he grins and laughs. Before he begins to feed those in the rest of the world, he should start at home and look after our people. We have many who are hungry.
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Western Indians are endeavouring to raise their standard of living through development of their natural resources. Rather than make it harder for them, we should be helping them. An export tax on a non-renewable resource will severely cripple a number of reserves. It should be withdrawn, and withdrawn rapidly.
If following this debate the government totally removes the excise and production taxes, it will be showing that it is listening to the people and trying to do something for this country. They are trying to fill their coffers in this way. If this goes too far, it will be like the French revolution. When the people were hungry and had no bread, it was said, "Let them eat cake". The Canadian people would not accept such talk. The people of Canada should be respected. Their thinking should be reflected, not defied by the government, as is happening today.
There is another angle we could talk about all evening. There will be another opportunity for that. This tax is not only unfair, but illegal. It defies all conventions. It is destroying the growth of our agricultural industry. If that is not reason to withdraw the tax, I do not know what is.
In addition, there is a new 9 per cent tax applicable to advertising inserts, catalogues and newspaper inserts. Who is this going to hit. Is it going to hit the big chains? I suggest that is not the case at all, but rather that it is going to hit the small weekly newspaper people who provide a service to the people of these areas. As the hon. member for Kamloops-Shus-wap (Mr. Riis) said this afternoon, these inserts advertise the bargains. This is the only way the people have of knowing what the bargains are so that they can make their dollar go a little further, and they have to do that because they have so few of them and because they buy so little.
M0)
Now the government is saying not even the newspapers can carry these inserts. This will mean a loss of several millions of dollars to our newspaper industry. Can our weeklies stand this type of taxation, and what will it do? I suggest this is a measure against the freedom of the press. The press should be able to provide news to the people and carry these inserts to cover that cost. If the government simply wants to say to the newspapers they cannot carry Simpsons or Eaton's advertisements, it should say that. Do not hit every newspaper in this country with some form of blanket taxation, saying they cannot carry inserts of any kind because it is going to tax every cent it can, making it completely uneconomical for them to exist.
This is the first time a tax of this kind has ever been devised in North America. Who dreams up these tax measures for the Liberal party? Does the government have a special corps of some type of animal that dreams up tax measures which have never been levied before? This is the first time this kind of tax has ever been levied, and it is detrimental and discriminatory to our smaller newspapers. Not only that, it is an inflationfuelling tax on the consumers and it threatens the existence of our local newspapers. It is a counterproductive tax. I would
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ask again why this government wants to get money through this kind of a tax measure. This is really beyond me.
Then we come to another clause of this bill which contains an aspect regarding health care of the people. Some excise taxes are now being eliminated in respect of hospitals to keep the cost of medicare down. Our hon. Minister of National Health and Welfare (Miss Begin)-


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


Gordon Edward Taylor: Thank you, Mr. Speaker. I am sorry because I just barely started.


The Acting Speaker (Mr. Ethier):: The hon. member may continue with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Joe Reid (St. Catharines):: Mr. Speaker, as the federal member representing the riding of St. Catharines I am naturally interested in any kind of legislation that affects the wine industry in the Niagara region. I have had the opportunity of reading the submission by the Brewers Association to the House of Commons Standing Committee on Finance, Trade and Economic Affairs. Both the wine and the beer industries stand to suffer from the introduction of indexation, a new means of cost taxing related to the consumer price index.
I spent the past weekend in the city of St. Catharines attending the Folk Arts Festival and I took the opportunity, as I very often do, of showing guests around the community, pointing out the natural beauty of the area. I was far too often faced with the question, why are there so many acres of abandoned vineyards, non-productive acres lying in waste? I admit that some of this production has been lost as a result of the expansion of urban centres, including that of St. Catharines, but many acres have been lost to productivity because of this government's lack of concern for agriculture in the Niagara peninsula. Many of these vineyards have been abandoned because of the shortsighted economic policies of this government, of which the excise tax was an example in the first place. The indexing of that excise tax simply represents a further aggravation of a glaring and blatant lack of concern on the part of this government for the grape growers and the wine industry in our community. On the one hand the government claims it is concerned about the Canadianization of agricultural products and industry, but this is Canadianization that has taken the form of lip service only. The government discriminates against the wine industry by indexing its costs to the consumer price index.
For those of you who say this is not a precedent, let me expand on that further. Not only is it a precedent, it is discriminatory. The Finance Department claims this is based on the formula that applies to indexation of personal income taxes and is, therefore, presumably not discriminatory. In response I say to you, Mr. Speaker, what utter rubbish and
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nonsense. The Canadian people can thank a great Canadian and former leader of this party, the Hon. Robert Stanfield, for having instigated the indexation of personal income taxes. That particular indexing is based on real wage gains, not on cost of living increases given to help track inflation. Had it been based on cost of living increases, most Canadians would now be employees of the Liberal government.
The indexation proposed by Bill C-57 is not based on that formula. The tax on beer, wines and spirits, if indexed to the consumer price index, and as it applies to the alcoholic beverage subgroup, is a good example of this fact. Let me illustrate this point.
As the price of beer rises, whether by reason of increases in the cost of production, the cost of ingredients or the cost of packaging, this government automatically takes an additional share. This government takes its share of the inflationary expectations of the industry. This government has inflationary expectations and by this indexing lends a hand to that inflation. This government is feeding on inflation.
It has been stated that the basic reason for this indexing is to protect government revenues from erosion which has come about as a result of inflation. It has already been shown, only too often, that this government does not have the strength to fight inflation. Worse than that, this indexing form of taxation erodes the will and the desire of the government to even attempt to fight against this higher cost of living facing all of us. As I demonstrated a moment ago, the indexation of the tax on alcoholic beverages is not comparable to indexation of personal income taxes. That being the case, it is discriminatory-
We have something that is far worse. What we are really talking about is the establishment, as we have suggested often here today, of a precedent in the form of taxation. This is a precedent which can be used by the present or any future government to index any tax in relation to the consumer price index. The government will and has said that this is not something that will or can be called a precedent. Any intelligent, thinking person knows better than that. How can a precedent not be a precedent when it is a precedent? If that is a tongue twister, I would like you to try to untangle some of the circumlocutions in the answers and responses of the Minister of Finance (Mr. MacEachen) when he tries to explain that this is not a precedent.
I cannot expect some people to follow that form of argument, nor can I object too strongly to this proposed new form of taxation. Canadians expect their government to be responsible, to manage the nation's business effectively and to be fiscally circumspect. Canadians do not expect their government to lie back and say, as it does in this instance with this indexation, that inflation is running out of control, that the government has no policies to combat inflation and that as a result it is taking an attitude of "I'm all right, Jack". That kind of approach looks after the government first and the Canadian consumer last.
Further, in recognizing the importance of fiscal responsibility, the Fathers of Confederation left with this House of Commons responsibility for fiscal matters. In Bill C-57 this government is saying that the Minister of Finance does not need to consult the House on future increases in taxation of alcoholic beverages because taxation will automatically increase. As long as the present government is in power, we do not have to concern ourselves with the possibility of a decrease because the consumer price index will continue to rise to record heights. What we have is underhanded taxation without representation. I am sure all members of this House will agree that automation in industry is one thing, but automation in the field of taxation is quite another.
We have been awaiting a new budget since the Minister of Finance introduced his ill-fated budget of October, 1980. As we all know, the measures introduced at that time have failed to have an impact on ever-rising interest rates and our out-ofhand inflation. As we know, the minister is reluctant to present a new budget because that would be a public admission that the government has been inept at dealing with the economic situation which exists in this country today.
If Bill C-57 passes with Ways and Means motion No. 22 included in it, that will be a further indication of two major points. The first is that the government truly has been bankrupt and is bankrupt in its economic policy. The second is that the government will continue to shift the burden of fiscal mismanagement on to those who can least afford to pay. I shudder when I see so much hardship being inflicted on those who can least afford to pay. The hardship is inflicted on hard-working, honest people.
I would like to return to an earlier comment about the growing number of vineyards in the Niagara region which are now going out of production. The people of St. Catharines take pride in the wines of that area. We were delighted to see so many Canadians not only trying Ontario wines but also preferring them and representing them as having an improved taste culture which competes with that of imported wines. As indicated in the brewers' submission, according to surveys there has been a 1.8 per cent decline in wine sales in the period between April, 1980, and January, 1981, compared with the same period just one year ago, and beer sales dropped 3.6 per cent in the same period compared with the previous year. This decline is related directly to the excise tax this government imposed on those two beverage sale markets. If that decline in beer and wine sales continues, then both those industries will have to face up to far more serious problems than they had a year ago.
Let us carry this one step further by projecting beer and wine prices if Bill C-57 is approved. According to the Brewers' Association, in ten years' time beer will cost $23.64 for 24 bottles, almost one dollar per bottle, an increase of 157 per cent. In the first instance, wines generally were subject to a percentage increase of 155 per cent. Now wines generally will be subject to a further increase of 125 per cent over the next ten years. This surely is not acceptable to this House. I ask the
May 26, 1981

government, and particularly the Minister of Finance or his assistant, the Minister of State for Finance (Mr. Bussieres). Is it this government's intention to put brewers and wine makers out of business? Is it their intention to kill that goose which lays the golden eggs and which produces so much revenue dollars to the government today? If it is, I would appreciate knowing sooner rather than later because we could then inform local manpower offices to be prepared for such an event.
Does the Minister of State for Finance know that in Ontario alone the wineries and the grape growers employ over 18,000 persons? Is that not a segment of the community worth considering? In its brief to the standing committee, the Canadian Wine Institute hit the nail on the head when it stated that neither winemaking nor grape growing is a profitable business. For the information of members of this House let me say that in so far as wine production is concerned, the net return is less than 5 per cent of the capital cost investment. That is not a great venture from a profit-making point of view. There are already declining sales and, thanks to that earlier 155 per cent increase in the excise tax announced last April, this cannot fail to continue as the government loads quarterly increases onto the retail cost of wine. With this decline will come the collapse of the smaller wine industries-the cottage wine industries-which have improved the taste and quality of domestic wines. It will also lead to lay-offs in the larger wine industries.
I spoke earlier of the fuel which indexation will add to the inflationary situation. We are not speaking just of increased retail costs for agricultural or alcohol products. We shall have a larger administrative cost and an administrative burden which will add enormously to the cost of operations of, for example, the various provincial liquor control boards and, I might add, to the expansion of paper work which most of us see as an ever-increasing problem. Every three months, new price lists will have to be prepared, circulated, distributed and posted. As is the case with respect to weekly interest rate announcements, consumers will be able to bank on increases in the cost of their alcoholic beverages. This will come to be an accepted thing. We are building yet another bureaucratic nightmare.
I would like to conclude by reinterating the points I have attempted to make in this House this evening. First, the indexing of the tax on the alcoholic beverage subgroup of the consumer price index is a recognition on the part of this government that it has failed in its economic policies and that it has given up trying to fight inflation. That is a defeatist approach in every sense of the word.
Second, that indexation is in itself inflationary and will simply add to the inflationary spiral and the inflationary expectations of Canadians. Their own government expects increases in the consumer price index, and it intends to profit by them.
Third, the indexing sets a dangerous precedent which will, just as surely as I stand here this evening, be adopted by other governments, and it will be adopted by this government in relation to other products.
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Fourth, the indexation is discriminatory as it presently stands, and damaging to the wine and beer industry in particular. I repeat my earlier question: if the government is trying to put those industries out of business, then let it be honest and say so rather than going through the long drawn out and painful process of eliminating them.
Finally, I want to say that it is most distressing to me to answer questions in my home town community of St. Catharines when asked about those abandoned vineyards. The proposed indexing formed part of my response, and I hope that this House will have the wisdom to reject the government's irresponsibility in this respect so that I will not be faced at some future date with the question: did they not once grow grapes here? That is the future if this government continues in its approach to the agricultural industry in the Niagara peninsula.
The government has shown little interest in the Niagara fruitlands. The Parliamentary Secretary to the Minister of Agriculture (Mr. Ostiguy) may be an embarrassment to the minister but he is a millstone around the necks of the grape growers of Niagara. Let us eliminate now this built-in conflict of interest and get rid of the consumer price indexing of government revenue.


Mr. Fred McCain (Carleton-Charlotte):: During my years as a member of an elected body I have never had occasion to almost look at the government of my land or of my province with shame. I have had, Mr. Speaker, sharp differences of opinion and philosophy which cause me no shame, but I have to say to you that the two-party government we have today makes me wonder if I should not in fact be ashamed. I sat in this House this afternoon and watched people plead for the consumers, the farmers and the fishermen of this land while the second part of the government sits on its fanny without a word to say as we heap punishment upon punishment in the form of taxes on everyone who spends money in this country. For those who are ready to proclaim that they are going to arrive on white horses and look after the downtrodden of this land, there is a thunderous silence in the minority portion of this government, those who sit on my extreme left.


Bob Rae: Point of order, Mr. Speaker. I do not know whether the hon. member was here earlier this afternoon, in fact I do not think he attended a single meeting of the finance committee which discussed this bill at great length. I was at every single one of those meetings, I gave a speech at some length today, I did not have the opportunity to speak at as great a length as the hon. member for-


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member for Carleton-Charlotte (Mr. McCain) was expressing his opinion and I am sure the hon. member for Broadview-Greenwood (Mr. Rae) wanted to express his point of view, but that, in my view, is debate and each member will have that opportunity.

May 26, 1981
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Fred Alward McCain: Mr. Speaker, it is useless to say that I have said anything that is untrue. There has been a thunderous silence.


An hon. Member:: Rubbish.


Fred Alward McCain: And it was coupled with a vote last week against the home owners and the farmers in a motion of confidence in this House. So not only is there thunderous silence there, it is accompanied by a vote of heresy by that party.
In this country, Mr. Speaker, only the strong are going to survive. That is an old saying. The Spartans had a way of testing their boy babies by exposing them to the elements for a period of time and if they survived, they brought them back, suckled them and made them soldiers. I want to say here that it is not enough to be strong to survive; they have to be strong and rich to survive. They have to be part of the elite of the economic feudalism which this government is creating because the small guy cannot survive. I commented last week in this House that a friend of mine is paying $7,200 on his mortgage and he will buy nothing else except food, clothing and fuel, and when he buys that fuel, he is going to pay the full scope of taxes and when he buys that clothing, if it happens to be a polyester fibre or a derivative of the hydrocarbon industry, he is going to pay the tax. If he ever has money enough to put a rug in that house, he is going to pay two taxes, the wellhead tax on the gas from which the material is derived and then, after the rug is made, he will have to pay tax on the tax on the cost of production of the rug, thereby paying twice.
This, Mr. Speaker, is the most iniquitous tax structure that I have ever seen imposed in this land, and at the same time these taxes are coming in to fatten the revenues of this government which it will spend at will to open new offices in Moncton, Fredericton and Saint John, to hire more and more people to manage more and more regulations and to bring in more and more new programs at a time when they claim they are going to save money.
This is a government of which Canadians certainly cannot be proud and which they must look at with regret. This is the first time that any government, except in wartime, has passed on the full burden of taxation to production. They have passed it on to the farmers, fishermen and lumbermen. At a time when you cannot afford to build a home and perhaps not even buy one already built, these taxes are coming in as an inflationary factor in the ever growing cost of that home. With regard to the farmer, I have heard the Minister of Consumer and Corporate Affairs (Mr. Ouellet) make excuses for the price of food. Well, I make no excuses for the price of food except that there is a Liberal government in this land. Oh, I forgot, it is a two-party government so 1 had better remain consistent through the evening.


An hon. Member:: Nobody is paying any attention to what
you say-


Fred Alward McCain: Well, in that case how do you have knowledge of what I have said and any cause for reply? If no one is
paying attention, Mr. Speaker, you would not expect an interjection, would you? Well, every now and then you sit on a porcupine quill and you have to respond.


An hon. Member:: Where is your amendment?


Fred Alward McCain: I thought they were not paying any attention. They do not pay any attention but something is bothering them. It must be their own negligence getting to their conscience, their abandonment of their principles, of responsibility for farmers, fishermen and consumers, all of whom are hurt, every last one of them.
Now, Mr. Speaker, we have reached the point in the trucking industry where you cannot make a long-term contract for trucking, but you can get a contract if you are prepared to accept the increment in rate which the industry may deem to be required as a result of additional taxation. And of course fuel is a part of it. That is a rather unstable situation for a producer of goods to have to live with. Having taxed the raw material to make the fibre for the rug and then the rug itself, you tax the transportation fuel which takes the rug to its destination. When this is coupled with the taxes imposed at the provincial level, I wonder what the first tax now amounts to. It probably approaches 20 per cent instead of the percentage you thought it was going to be when you read the bill and said "here is a tax on an article used for production". It is a pyramid of taxation and it is feeding inflation. It is feeding an inflation which is not entirely the same as historic periods of inflation have been. One thing which is lacking in this inflationary period is a lack of goods. There are goods all over the place; every shelf is full. Merchants are trying to reduce their inventories at a very serious sacrifice of profits because they cannot afford to pay the interest rates on them. As we tax here, we are ensuring that there will not be money to buy these goods. We are enhancing the demands of the people of the country who feed on inflation and require more to survive, as we tax and tax more. There are other ways to combat this.
The provinces set an example in earlier crises in home construction by removing the tax on building materials. It happened, for example in the province of New Brunswick. It began to appear that the province was losing revenue which it could ill afford to lose and that it was not necessarily accomplishing the purpose it hoped to accomplish because of the contradictory measures of the federal government. So, here we go again; we are again discouraging purchasing at a time when our shelves are full.
We require a full and complete fiscal monetary policy. There is only one portion of the objective a government must reach for which is being satisfied by this bill and this instrument of taxation across the board. If the government constrains itself to its present expenditure guidelines, I suppose it will reduce the deficit. This of course will reduce the demand on the money market, this of course will in fact have a favourable impact upon inflation, but this is the only aspect of
May 26, 1981

it which can in any way slow down or tone down the inflationary expectations of this land.
It does not make much difference what we look at. When we start taxing hydrocarbons at the wellhead, we are raising the cost of virtually everything in the country. We are raising the cost of transportation, agriculture, fishing, forestry and highway construction, because we are raising the cost of asphalt. We are raising the cost of everything virtually because of our maximum dependence upon the imported or local hydrocarbons as resources.
I would like to ask a question because I do not know the full answer. Perhaps the member of the government who is responsible for the bill will be able to give me the answer in due time. I would like to make a fairyland assumption, for the moment. Let me assume that there were absolutely no taxes on gas or oil as it arrives at our shores. I ask the minister what would be the cost of gasoline at the pump if we bought S32 per barrel oil from Saudi Arabia and the federal government did not tax a whit. What would be the price of gasoline in that event? It would be a little higher than it is today, unless there is a very serious error in my calculations.
We have brought on a lot of these taxes on the assumption that the equalization of the cost of petroleum products in this land can be accomplished by federal taxation on petroleum. If the federal government abandoned taxation on petroleum products and allowed Saudi Arabian oil to come into the eastern refineries of Canada which serve that part of Canada east of the Ottawa valley, as they have traditionally, how much additional oil would be necessary? If there were no federal tax of any kind, I think it would be rather interesting to see how little more would be necessary.
We are now paying for the cheapest barrel of oil we can get, approximately $1.55 to $1.56 per gallon. When we relate that to a 35-gallon barrel of oil, how much more would we actually need without a federal tax? I think it would be revealing. I think the people of this nation, the farmers in particular, would find that the tax on the fuel they use in their fields is really not so much for equalization as it is to feed the hunger of the spending machine of the Liberal government.
We have heard the Minister of Consumer and Corporate Affairs and the Minister of Finance (Mr. MacEachen) indicate many times that they would try to serve the people of the country. 1 plead with them to get down to fiscal monetary responsibility which is such that we do not have to tax the living daylights out of the people of this land.
On the one hand we say to the provinces, as one example, that we will charge them more for RCMP services. Then the minister responsible for that service is quoted in The Globe and Mail last week as saying that the provincial ministers will not negotiate. As soon as I read that article, I telephoned the minister in New Brunswick responsible for that, and he said, "That is outrageous nonsense. Certainly we have tried to negotiate. We have tried to obtain a gradual change in the charges of the federal government for the RCMP". Also he said that he had asked as well the preceding minister, the hon.
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member for Notre-Dame-de-Grace-Lachine East (Mr. All-mand) to respond.
In the negotiations in 1975 or 1976, it was agreed that the cost would go up by one percentage point per year. It went from 44 per cent to 45 per cent of the cost to 50 per cent to 51 per cent of the cost from that period until now. Now in one fell swoop the federal government, in its urge to save money, will charge the provinces another $100 million.
Not only does this bill impose additional taxes on the consumers of Canada, it imposes them at a time when the government is imposing upon the provinces further reason for them to tax by withdrawing its support from the programs to which they have been accustomed ever since the RCMP has rendered municipal and provincial services in co-operation with the federal government. The only portion which is negotiable is: "We will provide the service if you will pay us what we want". This is what the federal minister said to the provincial ministers responsible for police services. Those ministers are prepared to negotiate and to escalate into a fair position of cost-sharing for the RCMP.
We should look at the contradiction. We tax more here and we pay less to the provinces. So the taxpayer will be hooked twice; once here and once when the bigger bill is issued to the provinces.
Let us look at the extremes and the desperation. This is where shame must enter into the hearts of some supporters of the government. We will tax hospitals, hospital equipment, research equipment and health centre equipment at a time when the provinces are pleading with the federal government not to cut those block grants which are going to them. The provinces, out of their money, will be required to equip the hospitals, the universities or the research centres with the help of taxpayer dollars. Again the health units, which are the responsibility of the provincial governments, will be paying more money. We are taxing more, spending more, opening offices, reducing our cost-sharing payments to the provinces and hitting the taxpayer coming and going, as we escalate taxes and increase prices and charges to the provincial governments. Why is this necessary?
Today the fishermen of this land are buying virtually all of their nets from Japan. With just a little care and caution in its price system, Mr. Speaker, do you realize that Japan can make those fishing nets cheaper than our fibre manufacturers can make them with the wellhead tax and the other taxes which have been applied to the hydrocarbons which are necessary to make those fibres? Japan imports all of its oil and gas. On top of that, we will be taxing these nets. By refusing to pass this tax on to the producers of goods and services in this country, we are denying them our own Canadian markets and leaving them vulnerable to countries which, with just a little price manipulation, can produce those fibres from hydrocarbons and their derivatives cheaper than we can produce them, though they import every single barrel of petroleum they need and every bubble of gas. This is what we are doing to our land. We

May 26, 1981
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are not only taxing the consumer, we are taxing the producer. We are taxing the producer of goods in this country to the point where he may well be deprived of his own country's market. That is carrying it too far, Mr. Speaker. Yes, there is no question or doubt, only the strong can survive, if they are rich.
Before this bill goes further, and before some of those who are listening tonight give consideration to a favourable vote in support of this bill, I wish to remind this House once more that a combination of the inflationary structures in the agricultural community in which I live, plus the increments in interest which are being paid bankers, means that the cost of interest on the cost of processing potatoes has gone up tenfold, and it has risen fifteenfold on seed potatoes in a ten-year period. I am not one who gives a lot of statistics, but I promise members of this House that I can put those figures down in black and white for any individual who wishes to question my contention. There is not much difference between the costs incurred by the potato industry and those incurred by the fishermen. When will this government turn around and recognize that there are little guys buying homes and tractors, producing food, fishing for food, and that by helping them it can also help the consumer? The government might also make a contribution to reducing inflation if it would open fewer offices and allow more people to be employed in the private sector.


Harvie Andre: Mr. Speaker, I join in the debate this evening to side with my colleagues who have expressed concern about the provisions of Bill C-57. Some of our concerns have been expressed by and large in the amendments which have been placed on the Order Paper and which we are now debating. We hope that the government will give recognition to some of the arguments made by members on this side of the House. We feel that the amendments put forward are important and would serve the legislation and the country well.
Several of my colleagues have talked about the indexing provisions which have been introduced for the first time in regard to excise taxes at the federal level, the indexing of taxes on alcohol and tobacco. It is passing strange, if not alarming, to listen day after day to the Minister of Finance (Mr. MacEachen) when he is questioned about interest rates and their high level. He is asked to take action to reduce these interest rates, and his answer to recommendations of members on this side is usually along the line, "Well, in an era of high inflation we have no choice. We have high inflation because of people's expectations. Because prices are going up, people expect high inflation, therefore they are borrowing money and, therefore, in order to limit the money supply, we must keep our interest rates high."
It is no wonder that people who have high expectations in terms of inflation expect it to continue when they see this government bringing in legislation which it says it must have in order to protect its revenues. In fact, that is inflationary. One day the Minister of Finance will criticize workers and unions who look for cost-of-living clauses in their contracts. He indicates that these kinds of provisions are inflationary, this
sort of indexing of salaries is inflationary. Yet, the next day he introduces legislation to index his own revenue sources. It is no wonder that any rational observer looking at the performance of this minister will conclude that there is no way the minister and the government will attack inflation. What they are attempting to do is to protect their revenues upon which the government operates, basically the same way as an individual or business operates to protect himself. This government is not acting on behalf of the nation as a trustee. It is operating as a corporate entity on its own in competition with the private sector. Just as the private sector moves to protect its welfare from inflation by raising prices, so does the government move to protect itself from inflation. The same is true for an individual who seeks to protect his salary from inflation.
The government is supposed to adopt the role of a trustee in terms of the rest of the population. It is not supposed to be competing with the private sector. It is not supposed to be designing systems to ensure that it can continue to extract funds from the private sector. It is supposed to be concerned about the whole country. But that is not the way this government behaves. Instead of acting responsibly by coming forward annually with a budget to raise or lower taxes according to need in an open and forthright manner, the government resorts to ploys such as the ones before us to index its revenue sources so that it will be protected. It does this to avoid the embarrassment and political cost of having to be open and honest about its revenue sources.
I would ask the government to re-examine its intent. I know that it has looked at the province of Quebec, the province of Ontario and others. The government says, "if the provinces are doing this, then why shouldn't we?" One good reason why the government should not is that it is supposed to be the national government, it is supposed to provide leadership. It cannot, on the one hand, demand more power from the provinces and on the other follow the bad examples set by those provinces which have resorted to indexation to protect their revenues.


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



PROCEEDINGS ON ADJOURNMENT MOTION

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

[Stage Direction]
(A) EXPORT OF PARTS TO EUROPEAN AND JAPANESE CAR MANUFACTURERS
(B) DISCUSSIONS WITH EUROPEAN AND JAPANESE MANUFACTURERS
Mr. Bill Kempling (Burlington):: Mr. Speaker, on April 13, in Hansard, at page 9191, I asked the Minister of Industry, Trade and Commerce (Mr. Gray) questions regarding the
May 26, 1981

auto parts manufacturers in Canada and the discussions the minister had with the U.S. government authorities when he visited Washington to pursue amendments to the auto pact. I asked as well if the minister had discussions with Japanese and European government trade officials regarding their automobile exports to Canada. We all realize the automobile industry and its component parts is having a difficult time. We all know as well that the solution is not an easy one.
All North American manufacturers of automobiles are coming out of a year of massive losses, coupled with the very high cost of tooling required to produce smaller fuel efficient cars. So one can see quite readily that a fast solution will not be found. Only time and a change in buyer preference will turn around this industry. Most manufacturers are producing their version of the world car. Industry spokesmen tell us that by the end of this decade there will be only five major automobile manufacturers left in the world. There may be a few smaller manufacturers producing for a local market; but the industry experts say there will be only five major manufacturers in 1990. I believe that is a valid analysis.
We hear every month about joint projects such as Volkswagen and Renault co-operating to design an automatic transmission that will be used by both manufacturers. We have also heard of Volvo and Renault developing a fuel efficient gasoline engine that will be used by both manufacturers. We see as well that Honda and British Leyland have an agreement to use Honda components with British Leyland sheet metal work and body, and so on.
We see these agreements and arrangements being made by various manufacturers because the cost for one of them to do it is tremendous, but two of them can share the cost and benefit from it. This is driving the industry together. The point of my question is, what is Canada doing to get some of the world car component parts business because the world car will be the volume car of the future? Can we get some of the component parts business? What can we get? In Burlington at the Oakville plant there is a very aggressive company called Tridon Limited. Tridon, after many years of research and development, is in the production of two very saleable items. One is a windshield wiper and the other is a flasher. It is selling that windshield wiper in 43 different countries in the world to original equipment manufacturers and to users as well.
The point is, what are the prospects for Canadian businessmen developing other products that could be used in world car production? This is the way we have to look. If we do not look at the world car market and try to get a piece of it, by the end of the decade our auto parts business will be simply non-existent.	.
A look at the auto parts industry in Canada will show that 70 per cent of the production facilities are subsidiaries of U.S. companies. Many of them have no sales force, and are really a manufacturing facility which builds on demand for the U.S. parent. I make no comment as to whether this is good or bad, only that it is hardly an atmosphere in which one could likely get component parts business for the world car market. We have had ample evidence from past history where development
Adjournment Debate
funds have been given to a company who has used those funds to develop a product, only to have the venture close down and production transferred to the foreign parent. I know we can all catalogue such cases.
I believe there is a place for Canadian components on the world car market. We have leverage because we have a good sized market of our own here. I believe we are the fifth or sixth largest user of Japanese automobiles. That is a sizeable market. We must not abandon this market or allow it to slip from our hands and go across the border in the reconstitution of the North American automobile industry.
We have heard very little, if anything, from the minister. He roars and he issues press releases which get headlines, but that is about all we see. All we have heard from the Washington talks is that the Americans feel it is not an opportune time to renegotiate the auto pact agreement. I believe that secretly industry, trade and commerce officials agree with that assessment. Fresh on the heels of press releases and headlines about a reduction in quotas of Japanese cars is a story that the Japanese will ask for a 5 to 8 per cent increase over last year. While the minister flops from one disaster to another, the opportunities of the world car slip from our hands forever. There is a market there. Tridon and others have proved it can be done.
I feel that this whole matter is lost in the depths of the Department of Industry, Trade and Commerce and that we are only reacting to crises as they surface. The automobile industry contributes substantially to the economy of Canada.
I urge the minister to recognize the potential of the world car component parts business and to encourage and assist the automotive parts manufacturers to get a sizeable share for Canada.


Mr. Gerald Laniel (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Mr. Speaker, I am pleased to answer the question of the hon. member for Burlington (Mr. Kempling) who seldom has the opportunity of putting questions in his capacity as whip of the official opposition; we know his questions and interventions are always positive and serious. [English]
In trying to reply to this question, I want to give the hon. member a little bit of history, about which he probably knows, but I want to put it on the record.
One major effect of the auto pact has been the rationalization of the industry resulting in its transformation from a basic domestic supplier to a North American one for both original equipment and replacement markets. That was to the benefit of Canadian industry.
In relation to manufacturing, the automotive parts industry consists of four types of companies: divisions of U.S. auto manufacturers; foreign-owned multinational divisions; Canadi-

May 26, 1981
Adjournment Debate
an-owned multinational companies; and wholly-owned Canadian companies.
In the first two groups, the disposition of funds rests largely in the U.S. to the extent that financial resources generated by U.S. branch plants cannot be regarded as always being available for use in Canada and in such activities as developing new markets, research and development, purchases of advanced equipment, or generally accommodating the Canadian operation to changing market conditions.
As the world car concept advances, rationalization on a world scale will affect various divisions of U.S. vehicle manufacturers. As an example, suspension components for the General Motors J-Car will be produced in only two GM plants in the world, one of which is located in Canada.
We recognize that a problem does exist with some U.S. auto parts manufacturers in Canada who have no Canadian domestic or export sales force and who carry out export functions through their U.S. head office. Indeed, there are successful Canadian-owned companies in the automotive sector which do not participate in the lucrative offshore markets.
Recently, a greater emphasis has been placed on investment in Canada by the department. A mission of Canadian automotive parts manufacturers visited Japan in March of this year to meet with Japanese companies interested in joint ventures or licensing agreements leading to production in Canada of automotive parts for Japanese vehicles. Comprising the mission were a number of Canadian subsidiaries of U.S. parents.
The mission was extremely useful from the point of view of interest generated and contact established, and negotiations are continuing.
I want to bring to the attention of the hon. member that in reply to the Minister of Industry, Trade and Commerce (Mr. Gray) about the increased importation of Japanese cars into Canada and the possible request for an increase in quota was that better and more participation of Canadian industry-


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


EMPLOYMENT-INQUIRY RESPECTING INCREASE IN FUNDING OF COMMUNITY DEVELOPMENT PROGRAM
Mr. Maurice Foster (Algoma):: Mr. Speaker, on November 17, I asked a question of the Minister of Employment and Immigration (Mr. Axworthy) concerning the community development program and whether additional funding could be provided to this program. Indeed, some time early in the new year, additional funding was provided to this program, at least in my constituency.
The arguments I want to put before the minister tonight relate to how the program will be carried out this coming fall because there has been a wide variation in the amount of funding over the past three or four years. In the year 1980-81, under this program $376,373 was provided to the constituency
of Algoma. When the Conservatives were in power in 1980, no funding was provided under the Canada Works program. In the year 1978-79, my constituency received $1.5 million and in 1977-78, $1.8 million.
This program of employment during the winter months when there are high seasonal lay-offs is very important. It does not so much affect the communities in my constituency with a large industry such as a steel mill, a pulp and paper mill or a uranium mine, but it does affect the dozens of smaller villages, hamlets and rural townships throughout the vast area, some 400 miles in the Algoma-Manitoulin area.
Many of these communities have high seasonal lay-offs and the people are unable to find other work. Some must apply for unemployment insurance benefits or welfare. This is certainly true in the 12 Indian bands in the constituency.
My request to the minister tonight is that adequate funding be provided in the upcoming year for the community development program. Indeed, I hope there will be increased funding and that it will be targeted to the high unemployment areas of the country. Last year funding was provided right across the country, $100,000 to every constitutency whether it was needed or not. I feel that the program operated in 1978-79 which was targeted to the high unemployment areas was much more useful and beneficial.
It is important to note that over the past four or five years of this program the department has developed an excellent staff of young people who are dedicated, helpful and imaginative. They have developed a lot of expertise at operating direct employment programs. These people are available. There is a certain amount of additional overhead by having capable, competent staff like that, but it really pays off in value for the dollar spent. Often we are just displacing dollars that would be spent on welfare or unemployment insurance. People want to see value for the money spent for the work that is carried out.
I hope the minister will be successful when he puts this program before cabinet and that cabinet will hear these representations and will provide adequate funding for the community development program in the coming winter months. I hope the application forms will soon be made available in order that they can be processed over the summer months so that the projects can be approved, started on time and carried out during the winter months, providing much-needed employment in many of the slow growth areas of our country, at the same time carrying out very worth-while community projects, such as community halls, fire halls, and any number of other worth-while community projects carried out under this program over the last several years.


Peter A. Stollery: Mr. Speaker, I am pleased that the hon. member in his question has acknowledged the extent of the response across the country to the Canada community development projects.
May 26, 1981

As the hon. member is aware, the government decided, immediately upon taking office, to initiate this direct job-creation program as a replacement for the Canada Works program which had been terminated by the previous government.
Through this program, $105.5 million was originally made available for the creation of jobs with a particular impact on the winter months of 1980-81. Early in this calendar year, an additional $4.5 million was made available to the program for the creation of additional employment opportunities. While these jobs were created across the country, they were concentrated in those areas and groups beset by high unemployment. As a result of this government's initiative, almost 20,000 people worked over the winter months who would otherwise have been unemployed. Some 60 per cent, or almost 12,000, of these persons are still working today.


EXCISE TAX-APPLICATION TO LIQUOR SALES-PURPOSE OF INDEXATION
Joseph Lloyd Reid: I rise in respect of a question I addressed to the Minister of Finance (Mr. MacEachen) on May 15, and I submit the answer given was not only unsatisfactory but, perhaps, by a sin of omission was misleading to the House. I am in the hands of the Chair in that regard, but I suggest the minister misled the House in saying that the excise tax on alcoholic beverages to the alcoholic beverages subgroup, having regard to the consumer price index sale, was not discriminatory. Specifically the minister stated that a different tax system, an ad valorem tax system, applied to other commodities. This suggests that although we are talking about two different and separate tax systems, the end result is the same. That suggestion is unmitigated nonsense and I am surprised it should come from the Minister of Finance.
Perhaps it is best that I begin by trying to distinguish between these two systems and establish what we are talking about when we refer to an ad valorem tax and indexation. An ad valorem tax simply establishes the tax percentage rate applicable to a particular commodity. It is voted on in Parliament and the taxation rate does not change unless Parliament changes it, either by way of increasing or decreasing it. As the value of that particular commodity changes, the amount of tax may change but the applicable percentage rate does not.
Indexation on the other hand, as it applies in this case to the consumer price index, represents an entirely new trend in taxation policy. It sets a precedent which I find reprehensible. The percentage rate of taxation is pegged to the consumer price index, meaning that the government's percentage of taxation increases at a rate equal to the change or the increase in the consumer price index. What makes this so disturbing is that the change in percentage, unlike an ad valorem tax, is accomplished without parliamentary approval.
With the definition of these terms somewhat clarified, I should like to again refer to my question to the minister, pointing out that it was based on fact. The indexation of the excise tax on alcoholic beverages is discriminatory. No other
Adjournment Debate
tax is based on the consumer price index, and if the minister honestly believes that the effect of this taxation will be the same as an ad valorem tax, I invite him to make it an ad valorem tax so that the taxes all fall within the same system.
Of course the reason this was not made an ad valorem tax is that these are different tax systems, and the net return from indexation of the tax to the consumer price index will be far greater with the increase in consumer price index than it would have been on an ad valorem basis. It is the government's greed which has singled out these industries for this kind of tax. It is an established fact that beer and wine sales are down. My expectation in this regard is that this decline in sales will continue as long as this government continues to burden industries with higher retail costs as a result of a higher form of taxation.
The consumer, already in a financial squeeze, will simply cut back his or her purchases of alcoholic beverages. To an already closely run industry, a further drop in sales could only have a disastrous effect. If the government does not care about the wine or beer industries in particular, then let me add that the government is actively promoting inflation and inflationary expectations by the application of this indexing method.
Canadians expect interest rates to go up every week. This proposed indexation will give them a second expectation, and that is that every three months the cost of alcoholic beverages as a result of the indexed tax will increase as well.
I ask the parliamentary secretary, or whoever is speaking tonight on behalf of the Minister of Finance: does the minister propose to extend this precedent to other commodities, just as I indicated he might be able to do-and he can do-as he has in connection with the beverages we are talking about this evening? If he does not propose to add a form of indexing to other commodities, then how can he justify this continued discrimination against the wine, beer and spirit industries, particularly in view of the fact that they are now facing undue hardships?


Peter A. Stollery: Mr. Speaker, the hon. member for St. Catharines (Mr. Reid) sought an explanation of the taxes on alcoholic beverages in his questions to the Minister of Finance (Mr. MacEachen) on May 15, 1981.
The Excise Act and the Excise Tax Act impose commodity taxes on most goods imported into or manufactured in Canada. The great majority of these taxes are ad valorem levies; that is to say, they are expressed as a percentage on the sale price. The federal sales tax which is the main levy, is imposed at the rate of 9 per cent on most goods, except building materials, which are subject to a 5 per cent rate.
Since the federal sales tax is a percentage of the price, it automatically increases as prices increase. No special mechanism is required to achieve that relationship. Indeed, the system has functioned in that manner for more than 75 years.

May 26, 1981
Adjournment Debate
However, in the case of alcoholic beverages and tobacco products the commodity tax levies are structured somewhat differently. The bulk of the taxes on these goods are not expressed as a percentage of the price. Rather, they are expressed as an amount per unit of product. To illustrate, the levy on spirits was $16.25 per proof gallon of alcohol, and the levy on beer was 42 cents per gallon. These specific levies were increased in April, 1980 to $17.15 per gallon for spirits and to 54 cents per gallon for beer.
In the absence of discreet changes in such specific levies on alcoholic beverages, their real value falls as prices rise. Even with the increase in April, 1980, the real value of taxes on these goods is less than it was in the late 1960s.
Federal revenues should keep up with the growth in prices of products, as do those provincial mark-ups which are expressed
in percentage terms, and as does the general sales tax which is imposed on most goods as a percentage of value.
For these reasons, the government introduced a measure to adjust automatically the levies on alcoholic beverages in line with changes in prices. While this change does increase federal taxes on these products, it does not discriminate against beer, wines and spirits. Rather, it places the commodity tax levies on those goods on approximately the same basis as the commodity tax levies on all other goods.


The Acting Speaker (Mr. Ethier):: Order. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at two o'clock p.m.
At 10.24 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, May 27, 1981