1981-02-13

ROUTINE PROCEEDINGS


Mr. Dave Nickerson (Western Arctic):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas the latest figures released by Statistics Canada indicate an annual inflation rate of 12 per cent, with food for home consumption up 15 per cent since a year ago, led by the price of fresh vegetables which is now 42'A per cent higher than under the Conservatives 12 months previously, and whereas the Liberals have deliberately caused an increase in the price of heating oil of 9 per cent in one single month, I move, seconded by the hon. member for Okanagan-Similkameen (Mr. King):
That this House condemns the Grit government for squeezing the Canadian consumer between unprecedented high prices on the one hand and declines in real wages on the other.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CONSTITUTION
Mr. Bill McKnight (Kindersley-Lloydminster):: Madam Speaker, I rise under the provisions of Standing Order 43. In view of the fact that Premier Blakeney of Saskatchewan has fallen off the fence and, by chance, landed on the side of the people of Canada, much to the disappointment of the hon. member for Oshawa (Mr. Broadbent) and the hon. member for Mount Royal (Mr. Trudeau), I move, seconded by the hon. member for Winnipeg-Assiniboine (Mr. McKenzie):
That this House urge that the federal New Democratic Members of Parliament from the Province of Saskatchewan vote against the constitutional package, as their constituents are requesting, and that the House direct the NDP
House leader not to physically abuse his colleagues who stand to oppose this legislation.


Some hon. Members:: Hear, hear!


STATUS OF WOMEN
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, I rise under the provisions of Standing Order 43 to move the following motion. Given that the minister responsible for the status of women tried to mothball the Conference on Women and the Constitution scheduled for February 14 and 15, and given that hundreds of women from all across Canada have emerged to stage this important conference in defiance of the minister's dictates, I move, seconded by the hon. member for Nepean-Carleton (Mr. Baker):
That the minister responsible for the status of women emerge from the cocoon in which he is trying to shield himself from the views of women and make it a priority to attend the conference on February 14 and 15 so that he can be informed on the issues of importance to women, who have flown here from all parts of the country.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


BELL CANADA
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, I rise under the provisions of Standing Order 43. As you know, Bell Canada has asked for a 30 per cent increase with respect to some of its rates. This year that increase will yield it $183 million in addition to what it currently makes, and next year it will yield $550 million in additional revenue. I therefore move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House inform Bell Canada that its line to the public purse may be disconnected unless it spends more energy improving services and less lobbying for outrageous and unwarranted 30 per cent increases.


Some hon. Members:: Hear, hear!

February 13, 1981


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


REQUEST THAT HOUSEHOLDER MAILINGS BE USED FOR ACCEPTABLE PURPOSES-MOTION UNDER S O. 43
Mr. Marcel Dionne (Chicoutimi):: Madam Speaker, I rise under Standing Order 43 to ask the unanimous consent of the House to move a motion on an urgent matter of pressing necessity.
In view of the fact that members' services allow all members to send householder mailings to their constituents four times a year; considering that the contents of such mailings should reflect the facts rather than convey false and heinous information; whereas the member for Okanagan-Similkameen (Mr. King) suggests in his last mailing that the government's patria-tion plan would make the people in Montreal, Chicoutimi, Toronto and Windsor more equal than those in Grand Forks, Merritt, Osoyoos, Penticton and Westbank; and since the member suggests as well to his constituents that they must be ready to become second-class citizens if the government's patriation plan is passed, I move, seconded by the member for Manicouagan (Mr. Maltais):
That, since this household mailing is only deceitful and heinous literature, the printing costs be incurred by the hon. member for Okanagan-Similkameen or by his own political party.


Madam Speaker:: The House has heard the motion of the hon. member. The presentation of such a motion pursuant to Standing Order 43 requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

[DOT] (U10)


DEVELOPMENT OF BAY OF FUNDY TIDAL POWER-MOTION UNDER S.O. 43
Hon. J. Robert Howie (York-Sunbury):: Madam Speaker, I rise under the provisions of Standing Order 43 to move a motion. Whereas the production of electric power from the tides in the Bay of Fundy has, for many years, been the subject
of repeated studies which have shown this renewable energy project to be feasible and capable of producing over 4,000 megawatts of electric energy, and whereas the Premier of Nova Scotia has journeyed to New York to explore plans for the further development of this tremendous electric power potential, I move, seconded by the hon. member for Carleton-Charlotte (Mr. McCain):
That this House commend the Premier of Nova Scotia for his leadership and direct the minister of energy to make a solid financial commitment to substantial assistance for the development of Fundy tidal power in Canada by Canadians and for the benefit of all Canadians, particularly those who live in the maritime provinces.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
Mr. Jim Fulton (Skeena):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that those Canadians who have donated their hard-earned dollars to the Conservative party have been getting questionable political benefits in return, and since Joey has been spending party funds to have Numero Uno fly around to cut and wash his hair, making Joe's haircuts of more value than a pensioner's monthly income, I move, seconded by the hon. member for Kamloops-Shuswap (Mr. Riis):
That Joe come clean and return the hundreds of dollars he has ripped off from
donors to the Conservative Party used in the interests of keeping him pretty, and that at all future times he trim his own fat wages-


Madam Speaker:: Order, order. This is really an abuse of Standing Order 43.


AIRPORTS
Mr. David Kilgour (Edmonton-Strathcona):: Madam Speaker, under the provisions of Standing Order 43, I seek the unanimous consent of the House to move a motion related to an urgent matter.
Considering that the federal government has at last made up its mind about Mirabel and decided to resell the land expropriated in 1969; and considering that the federal government has acknowledged that many of those parcels of land are in a
February 13, 1981

pitiful condition, I move, seconded by the hon. member for Bruce-Grey (Mr. Gurbin):
That the House commend the government for its decision and particularly for confessing thereby that massive expropriations were a monumental mistake, provided, however, it makes public amends for having devastated what were then the most beautiful arable lands in Quebec.


Madam Speaker:: The House has heard the hon. member's motion. Pursuant to the provisions of Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIR SAFETY
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam Speaker, I rise under the provisions of Standing Order 43 to move a motion. A recent study done by the University of Dayton Research Institute in Ohio shows that 18 of 25 serious aircraft crashes studied could be mainly attributed to landing in a heavy rainfall. Taking into account the fatal crash of a Texasgulf jet last Wednesday as it was trying to land in heavy rain at Westchester County airport I move, seconded by the hon. member for Yukon (Mr. Nielsen):
That the Minister of Transport obtain assurances from his air administrator and from Canadian and all foreign airlines that they are not allowing planes to land in Canada in a heavy rainfall and that he report back to the House as soon as possible.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FISHERIES
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, in view of the fact that the Standing Committee on Fisheries and Forestry has not been convened since November 6 of last year for the purpose of discussing Fishery management policy, and given the number of urgent seasonal problems developing in the fishing industry on both the east and west coasts, which must be addressed immediately by members of this House, I move, under the provisions of Standing Order 43, seconded by the hon. member for Carleton-Charlotte (Mr. McCain):
Oral Questions
That the Standing Committee on Fisheries and Forestry be given an immediate reference from this House, which would permit the hearing of witnesses from both the fishing industry and the Department of Fisheries and Oceans, in relation to the new east coast licensing plan, the groundfish management plan for 1981, the 1981 herring roe management plan and the crisis in chinook salmon stocks, all of which have imminent and urgent importance to fishermen.


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 to the Minister of Finance who will know that the annual inflation rate is now at 12 per cent, the highest in the last six years. He will also know that while the Government of Canada preoccupies itself with constitutional and other questions, this increase in inflation is hitting hardest at lower and middle-income Canadians. Earlier in this session the Minister of Finance refused to bring in any action of relief, an energy tax credit or anything of that kind. In light of the fact that fuel oil costs for homes have gone up 37 per cent over last year, will the minister now consider bringing in an energy tax credit or some other means of relief for Canadians who are suffering from the government's failure to deal with economic policy and to deal with inflation?


Some hon. Members:: Hear, hear!


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, the Leader of the Opposition referred to a concern about the Constitution. 1 remind him that for the last weeks the House has dealt almost exclusively with economic matters through a number of tax bills that were before the House. Therefore I am surprised at the Leader of the Opposition suggesting there has not been ample opportunity to deal with or that we have not been concerned with economic questions. I have no intention of introducing the energy tax credit proposal which had been part of my predecessor's budget because it would do little good for the Canadian people in the present circumstances. For example, the first benefit would only have been available in March, 1982.

February 13, 1981
Oral Questions


MEASURES TO STOP DECLINE IN REAL WAGE INCOME
Charles Joseph Clark: Madam Speaker, I take it the Minister of Finance intends to do nothing at all to help low and middle-income earners across the country who are facing 12 per cent inflation this year and who receive from the Government of Canada no solace or help at all. May I deal with another problem of economic policy which the government is ignoring. The minister will know that real wages have been steadily declining. He will know that the Economic Council of Canada estimates that there will be a further decline this year. He must know that will lead to serious labour difficulties. Will the minister tell the House of Commons what the government intends to do to stop that decline in real wages and to head off the labour difficulties which are surely going to follow if the government continues to do nothing about the decline in real wages of Canadians across the country?


Allan Joseph MacEachen: Madam Speaker, I would first like to comment on the allegation of the Leader of the Opposition that the government has done nothing at all to assist consumers in Canada. The first thing we did was to bring in a price regime for energy that was less expensive than the one he supported when he was Prime Minister of Canada. The second thing we did was to provide immediately an increase in pensions for our senior citizens which came into effect in 1980, not like the proposal advocated by the right hon. gentleman which would have come into effect for the first time in the pockets of the people in March, 1982. That is what we did. I think it compares very favourably with the non-action of his government. The right hon. member talked about the decline in real wages which has existed in this country. It is obviously related to another phenomenon in the economy, namely, declining productivity, and the decline in the output per worker in the country which is very persistent.


An hon. Member:: What are you going to do about it?


Allan Joseph MacEachen: The right hon. member and hon. members in the Tory party are asking what are we going to do about it. I ask him what is the economy going to do about it because we are not advocates of running the economy.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: We still believe in the market system which prevails in Canada.


GOVERNMENT STANCE AGAINST INFLATION
Charles Joseph Clark: Madam Speaker, the only thing the Minister of Finance believes in is abandoning his responsibility to give economic direction to the country. He talked about there being an energy pricing regime brought in and, yes, there has been. That has stopped the development of jobs and heavy oil development and has caused
an increase of 37 cents a gallon in the price of gas, and has caused an increase of 37 per cent in the price of fuel oil for homes. That is what the pricing regime of the Liberal government is doing, and the people cannot stand very much more of that.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Not very long ago when speaking to the IMF- the minister laughs at the burden he imposes upon the people of the country. Not long ago when speaking to the IMF, the Minister of Finance said, and I quote, "a firm stance against inflation must remain a key element in any economic strategy". Will the Minister of Finance tell us where is his firm stance against inflation?


Allan Joseph MacEachen: Madam Speaker, I will be glad to give one illustration to the right hon. gentleman illustrating my firm stance against inflation, a firm stance against increasing expenditures which are advocated daily by his supporters in the House. If he believes in taking a stand against inflation he ought to discourage his supporters from getting up in the House every day asking the government to spend more and more, and thereby add to the deficit. That is the firm stance I am talking about.


FORECASTS RESPECTING INFLATION RATES-REQUEST FOR NEW BUDGET
Hon. John C. Crosbie (St. John's West):: Madam Speaker, my question is directed to the Minister of Finance whose stance is as firm against inflation as his promises were during the election when he said, "Vote Liberal and the price will stay down." Now we know heating costs are up 36.8 per cent since last year despite the minister's promise. That is how firm his stance is. In the minister's budget of October 28 he forecast the inflation rate for 1980 at 9.7 per cent, and it was actually 11.2 per cent. For 1981, only three months ago, he forecast inflation to be 10.2 per cent, and it is now 12 per cent.


An hon. Member:: Boy, what a record.


John Carnell Crosbie: Will the minister tell this House whether he is going to revise and table new projections, or is he going to resign because of this monumental failure? Just what is the explanation for this extraordinary falseness of his projections of just three months ago?


Allan Joseph MacEachen: Madam Speaker, the hon. gentleman should go back and compare the projections which he made in the December, 1979, budget for the annual rate in 1980, and his projection for 1981. I ask him to compare those, and then ask another question.


John Carnell Crosbie: Madam Speaker, this minister cannot answer questions; he can only ask them. Well, I have the answer. I forecast an 11 per cent increase for 1980 and an 11.4 per cent increase for 1981. The minister's projections are nowhere near
February 13, 1981

that. The minister is incapable of being honest with the public of Canada.


An hon. Member:: That's right.


John Carnell Crosbie: Just so the minister cannot escape, I will read from his budget on the inflation side, page 18, "the outlook for the remainder-"


Madam Speaker:: Order. The hon. member is getting argumentative and I have a feeling he is preparing for quite a lengthy quotation. I would like him to ask his question.


John Carnell Crosbie: Madam Speaker, the minister has promised a firm stance against inflation. Is he now going to bring in a budget which will introduce policies for that firm stance, and will he now roll back the increase in the price of heating fuel and gasoline, increases of over 37 per cent which have come about in the last 12 months? Will he follow up on his firm promise of January 23 to the people of Port Hawkesbury whom he fooled for the last time last February?


Allan Joseph MacEachen: Madam Speaker, I want to advise the hon. member that I have no intention of responding to his daily request for an additional budget. When the budget was presented last October, I clearly stated that the foremost problem facing the Canadian economy was inflation, and that budget established a medium-term assault on the problem of inflation in the form of supporting monetary restraint, in the form of reducing the deficit over time, and in the form of restraining government expenditures. That is the medium-term policy, and it will take some time to succeed.


Charles Joseph Clark: Tell us about Petrofina.


Allan Joseph MacEachen: If the hon. gentleman opposite, the Leader of the Opposition, or any of the various economic spokesmen have a different proposal or if they want to establish, for example, mandatory wage and price controls, then let them get up and say so, and not provide a different answer every day to the economic problems of the nation.


POWER OF GOVERNMENT TO DEAL WITH ECONOMIC EMERGENCIES
Mr. Edward Broadbent (Oshawa):: Madam Speaker, I have a question for the Prime Minister. Just before Christmas he acknowledged outside the House that the government did have the power, if it declared there was an economic emergency, to take special action. Since today, if we exclude food prices, we have the highest level of inflation in the past 33 years, the lowest level of industrial capacity in 18 years, and more than one million unemployed, the highest level of unemployment since the depression, will the Prime Minister finally acknowledge that we have an economic crisis and instruct the Minister of Finance to bring in a new budget to deal with it?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I am happy to see that the Leader of the New
Oral Questions
Democratic Party has now revised his constitutional positions on the matters of energy and inflation. He was advocating all the time that at any moment the federal government could bring in control of prices and wages, but particularly prices. He now understands that it can only be done under the emergency power, under the BNA Act. It cannot be done without that power.
He will recall that after the 1975 imposition of wage and price controls the matter went to the Supreme Court of Canada, and it was judged there that the only reason controls were intra vires was that there was in effect an emergency recognized as such by all the governments of Canada. This is not the situation now. We do not see the premiers asking for stronger federal intervention in order to curtail what the hon. member describes as a crisis.


REQUEST FOR INVOLVEMENT OF PROVINCIAL PREMIERS
John Edward Broadbent: Madam Speaker, it is the Prime Minister who has revised his position, not me. It was my question before Christmas which pointed out that we had an economic crisis and that the Prime Minister had authority to act.
At the time he brought in a wage control program we had a level of inflation lower than that which we have now. We had a level of unemployment lower than what we have now. Will the Prime Minister not take some initiative, contact the premiers, point out to them that the problems right now have nothing to do with increasing wages but everything to do with escalating prices, and ask for their support to bring in special powers to deal with the inflation which is affecting every family in the country?


Pierre Elliott Trudeau: The hon. member is right. At this time the greatest inflationary pressure is coming from higher energy costs. If the Leader of the New Democratic Party looks at the recent report on inflation, he will see that that is one of the principal factors and that, of course, is because of the world price of energy.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: In Canada we are keeping energy prices below the world price. We are not, as had been advocated by the Tory party, going to 85 per cent of world prices. That is the difference between us.
In so far as wages are concerned, the hon. member is right. They are not at the level they were at when we brought in controls in 1975, at which time the average settlements were in the area of 20 per cent. That is why the country was particularly concerned. We believe now that there is a more voluntary concern about the state of the economy and more co-operation, except from the Tories, in the fight against inflation.


John Edward Broadbent: Madam Speaker, that is precisely the point. The Prime Minister waited last time until wages went way up

February 13, 1981
Oral Questions
until he did anything to control the economy. What we are asking from this side is why, in order to avoid the level of industrial disputes now taking place in Canada because workers have experienced a net loss of income in each of the past three years and will have a net loss of income in 1981, the Prime Minister is waiting for wages to catch up? Why does the government not act now on the price side whether it is in housing, in food, or in any other sector, so that the ordinary worker does not have to push up his wages?


Pierre Elliott Trudeau: Madam Speaker, the hon. member suggests some area of concern. He knows that the two main areas of concern now are food prices and energy prices. It would be interesting to hear from the hon. member how he would expect us to control food prices and, perhaps, to control energy prices any more than we are doing now in so far as Canadian production of energy is concerned.


RAILWAYS
Hon. Jake Epp (Provencher):: Madam Speaker, I should like to ask a very straightforward question of the Right Hon. Prime Minister. Has the cabinet made a decision on the Crowsnest Pass freight rates?


Pierre Elliott Trudeau: Yes, Madam Speaker, we have made a decision not to deal with the Crowsnest Pass freight rates until there is a very strong demand from representatives of western farm groups and other groups to touch the Crowsnest rates.


Arthur Jacob (Jake) Epp: If that is the position of the government at present, can the Prime Minister explain to us why the minister in charge of the Canadian Wheat Board would be phoning his past political friends telling them to start the campaign, that he has lost the fight in cabinet on Crow rates and that the campaign to oppose the government's position should start?


Pierre Elliott Trudeau: I cannot comment on those phone calls about which I know nothing, but I can tell the hon. member that some farm leaders have met with the Minister of Transport, with other ministers, and with myself, in recent weeks, and some of them have advocated reopening the Crow rate and examining a new approach to transportation in the west, which would mean changing the Crow rate. I told them-and yesterday I said it publicly-that we do not want to fiddle with the Crow rate unless there is some very strong feeling throughout the west that this rate should be reopened and the question re-examined. I imagine that any phone call along the lines referred to by the hon. member would have been to tell these community leaders exactly what I told them, that is "if you want the Crow rate to be reopened and re-examined, you had better say it loud and clear because we will not do it on our own initiative."


PENSIONS
Thomas Edward Siddon: Madam Speaker, my question is for the Minister of National Health and Welfare as she is responsible for the National Pensions Conference to be held in Ottawa from March 31 to April 2. I want to ask the minister why it is that the conference coordinator, Mr. Guy Fortier, has written the following to the president of the Professional Institute of the Public Service of Canada:
I am very sorry that we cannot accede to your request to have the Professional Institute of the Public Service of Canada attend the National Pensions Conference . .. there are literally hundreds of separate organizations such as yours-
I want to ask the Minister of National Health and Welfare why she is denying those public servants who represent the largest pension funds in Canada the opportunity to attend and to participate in this conference.


Hon. Monique Begin (Minister of National Health and Welfare):: Madam Speaker, I am not aware of that particular letter. The conference will accommodate the maximum participation. Right now we think that more than 300 participants plus media representatives will be active at the Conference Centre. The participation will be divided equally among the main players, and surely, as the hon. member says, the superannuation officials, both employers and employees, are the key players in the pension system in Canada. Therefore, I will look into the particular letter referred to by the hon. member, which, of course, was given to us out of context. By the way, Madam Speaker, I welcome the interest of the Tory party in this matter. It is now a month before the conference and this is the first question we have had from them on this subject. This is remarkable progress.


EXCLUSION OF GOVERNMENT EMPLOYEES
Thomas Edward Siddon: Madam Speaker, although the minister pleads ignorance of this question, it is a fact that her officials have directed that some 16,900 members of PIPS will not be allowed to attend this conference, and I presume that neither will the 500,000 Canadians who are employed by the Government of Canada who have entrusted over $20 billion in the form of an unfunded liability into the hands of the Government of Canada.
My supplementary question is directed to the President of the Treasury Board. Does the minister, who is responsible for the pensions of public service employees, and in fact is benefiting from the third party benefit which the government receives by way of a $2 billion annual subsidy to the government's budget, condone the exclusion of his own employees from this very important pensions conference?


Hon. Donald J. Johnston (President of the Treasury Board):: Madam Speaker, I do not know where the hon. member gets his numbers. I intend to sit down with him one of
February 13, 1981

these days and explain how the pension accounts actually work.


Some hon. Members:: Oh, oh!


Donald James Johnston: I understood him to say in his preamble to the question that we were excluding 16,000 people of the PIPS group from attending this conference. The point is that my colleague, the Minister of National Health and Welfare, has responded to that question. The conference is being sponsored by her department. I thought her answer made perfect sense, that the key players in this are the employer and employee groups who are the direct participants in this fund. I would be more than happy to receive any representations that PIPS has to make with respect to the government pension plan, as I have in the past from other groups. As the hon. member has pointed out, we are the employer and obviously we are concerned with their pension plans, and if they have specific representations I would be delighted to receive them myself.


SUBMISSION OF PIPS REPRESENTATIONS TO CONFERENCE
Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, the minister having said that he would be delighted to receive the representations, would he be prepared to give an undertaking to the House that he would take the representations to that conference as one of the employers?


Donald James Johnston: Madam Speaker, the Treasury Board will be represented at that conference. The Treasury Board representatives at that conference-


Some hon. Members:: Oh, oh!


Donald James Johnston: I am sorry, Madam Speaker, additional questions are being asked at the same time-


Charles Joseph Clark: Monique Begin is answering for you.


Madam Speaker:: If I may help the minister, he may simply answer the question that has been asked and not concern himself about those that are shouted across the floor.


Charles Joseph Clark: Ask Monique Begin, Don.


Donald James Johnston: We intend, as the largest employer in Canada, to put forward the point of view of Treasury Board.


RAILWAYS
Mr. Stan J. Hovdebo (Prince Albert):: Madam Speaker, my question is for the Right Hon. Prime Minister. It concerns the question put by the hon. member for Provencher, and it is really supplementary to it. With regard to the speech given on Wednesday by the minister responsible for the Wheat Board in which he unequivocally supported the continuation of the
Oral Questions
Crowsnest freight rate, it is clear that the minister was speaking for cabinet when he made that policy statement that there will be no changes in the Crow rate?


Pierre Elliott Trudeau: Madam Speaker, I believe that that is the answer I gave a moment ago. At present there is no decision and no intention in cabinet to change the Crow rate. I understand that even the western premiers cannot agree on whether or not it should be changed. Apparently the province of Saskatchewan is opposed to any change. The other two prairie provinces want change.
[DOT] (M40)


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Madam Speaker, I am being urged by the Tory party-and now by the NDP-to tell the west what is good for it in the area of grain transportation.


Mr. Hnatyshyn:: God help us.


Pierre Elliott Trudeau: I think they would be the first to tell us that that is not the right approach.


Mr. Nielsen:: Double-tracking.


Pierre Elliott Trudeau: At the present time our policy is not to touch the Crow rate, but if there is a general feeling in the west that the question must be reopened, then we would be happy to do so.


Arthur Jacob (Jake) Epp: Will you do the same with the Constitution?


HALL REPORT RECOMMENDATIONS
Stanley J. Hovdebo: Madam Speaker, I like that statement except for "the present time" part of it. Regardless of the statements being made by the various ministers who are indulging in an attempt to establish public opinion across the west, there is a great deal of consensus among farmers that the Crowsnest freight rate should stay as is.
My supplementary question is for the Minister of Transport, but perhaps his parliamentary secretary, the hon. member for St. Boniface, could answer it. In its deliberations on the Crowsnest freight rate is the Department of Transport taking a good look at the recommendations in the report of Mr. Justice Emmett Hall on grain handling and transportation, and considering extending the Crow benefits to other products to alleviate some of the concerns of the people who are bothered by the level of Crow rates?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: Madam Speaker, the Ministry of Transport has been receiving delegations from various commodity representatives and groups interested in freight rates in the west. Their representations are being taken into consideration. At some future date the minister will be making recommendations to cabinet.

February 13, 1981
Oral Questions


Charles Joseph Clark: Which minister?


Robert Theodore Bockstael: The Minister of Transport will be bringing recommendations to cabinet for its authorization or approval.


MINISTER'S STATEMENT
Hon. Don Mazankowski (Vegreville):: Madam Speaker, I should like to direct a supplementary question to the Prime Minister. Could he enlighten the House on whose behalf the Minister of Agriculture was speaking when he stated the following in a recent speech:
The debate on the Crowsnest pass freight rate has gone on for too long and I hope it can be resolved quickly.
-preferably by August 1? For whom was the Minister of Agriculture speaking, if the minister in charge of the Canadian Wheat Board was stating government policy?


Pierre Elliott Trudeau: He was speaking for all of us, Madam Speaker.


AUTOMOTIVE INDUSTRY
Hon. Sinclair Stevens (York-Peel):: Madam Speaker, in the absence of the Minister of Industry, Trade and Commerce, perhaps I could direct my initial question to the Acting Minister of Industry, Trade and Commerce. Could that minister indicate when we will hear a statement with respect to the current negotiations involving Chrysler Canada Ltd.? Will that statement be made first in the House? May we be assured that the press or a press conference will not be arranged first, rather than coming to the House and making a statement in the House?


Erik Nielsen: The question is for you, Lapointe.


Arthur Jacob (Jake) Epp: Just say "yes".


Hon. Charles Lapointe (Minister of State (Small Businesses)):: Madam Speaker, I apologize to the House and to the hon. member. I did not hear the thrust of his question.


Sinclair McKnight Stevens: Madam Speaker, I should like to repeat the main thrust of my question to the minister. It involves the current negotiations with respect to Chrysler Canada. When may we have a statement in the House concerning the minister's determination to date with respect to those negotiations? May we be assured that statement in fact will be made in the House and will not be made first to the press, or even in a press conference?
[ Translation]


Charles Lapointe: Madam Speaker, the Minister of Industry, Trade and Commerce is now engaged in ongoing consultations with spokesmen for the industry and the United Auto Workers, and the government will soon be in a position to make a decision in that respect.


Sinclair McKnight Stevens: Madam Speaker, in view of the minister's non-answer, I feel I have no alternative but to go to the Prime Minister. Would he indicate whether in fact there has been an agreement in principle between the Government of Canada and Chrysler Canada with respect to the current guarantee and other loan arrangements upon which agreement may be reached?


Pierre Elliott Trudeau: Madam Speaker, I apologize. I have not been following the exchange. There have been discussions between the government of Ontario and the Government of Canada, but as far as I know no final decision has been taken.


John Carnell Crosbie: Wake up. This is question period.


IMPACT OF PRICE ON CONSERVATION MEASURES AND DEVELOPMENT OF ALTERNATIVE SUPPLIES
Mr. G. M. Gurbin (Bruce-Grey):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. It relates to the conservation programs of the federal government. The minister will know that the usage of CHIP has increased by a factor of about four in the last year or so and that there has been a great deal of interest in oil furnace conversions and other federal government conservation programs. Could the minister tell the House what impact he feels energy pricing has had on conservation, or whether people are now responding to conservation because they have a fear about energy supplies?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, it is extremely difficult to give an answer to the question raised by the hon. member. It is of a nature which concerns consumer habits. It is interesting to see that petroleum consumption in Canada last year went down by about 3 per cent. It is the view of the government that it would be completely irresponsible to rely essentially or mainly on increases in price alone to reduce consumption. Our position and our view is that people are interested in new and alternate forms of energy and that the government programs to increase conservation, to substitute oil for gas, and to insulate their homes better, are still the best means of ensuring oil self-sufficiency in the country, rather than socking it to the consumers by much higher prices.


Some hon. Members:: Hear, hear!
February 13, 1981


Gary Michael Gurbin: Madam Speaker, my supplementary question is also directed to the Minister of Energy, Mines and Resources.
I think most Canadians now know that we have a problem, or certainly an arising problem, in terms of energy supply. That is precisely the point. The effect or impact of energy pricing on supply is one factor and on conservation it is another factor. In addressing the supply problem, could the minister tell the House what impact he feels pricing has on the development of the alternative supplies we must have to replace oil which is not there because of the government's energy pricing program? Are we backing ourselves into a position where not only do we have subsidization of every energy system in the country, but also a rationing system?


Marc Lalonde: Madam Speaker, 1 once again thank the hon. member for his question. Of course when we prepared the National Energy Program we kept in mind the view expressed by the hon. member, namely that we must promote the development of alternative energy sources to eliminate eventually the need to subsidize available forms of energy through public funds. The advantage of the National Energy Program is that it clearly shows the prices that we shall have to pay for oil and gas in the next ten years. For instance, the price of oil will double within four years and will nearly quadruple by the end of this decade. This is a clear indication to the industry and those interested in alternative forms of energy that they may make specific plans and market new products or alternative energy sources which will certainly be competitive in oil, as they already know the level of prices they will be facing in 1985, 1987 and 1990. I believe this is the wisest policy for us to follow.


ENVIRONMENTAL AFFAIRS
Mr. Derek Blackburn (Brant):: Madam Speaker, my question is for the Minister of the Environment. Would he explain to the House why AECD has allowed Rio Algom Mines of Elliot Lake to dump on a continuous basis-24 hours a day- low-grade radioactive tailings into lakes which were once pure and natural, an environmental tragedy that over the last quarter century has destroyed the entire Serpent River system in northern Ontario?


Hon. John Roberts (Minister of State for Science and Technology and Minister of the Environment):: Madam Speaker, generally I have confidence in the AECD supervision of that process, but I shall investigate the information which the hon. member has brought to my attention today and report back to him.
Oral Questions


Derek Nigel Ernest Blackburn: Madam Speaker, my supplementary question is for the same minister. Does the government intend to allow Rio Algom to build several proposed dams, some out of radioactive tailings, in order to reverse the flow of water in several streams which could easily result in the destruction of Elliot Lake's most popular recreational lake, Lake Dunlop?


John (Moody) Roberts: Madam Speaker, from the point of view of my responsibilities 1 would be concerned that, if any such development is to take place, it be done in a way which is consonant with the safe protection of the environment, and I would essay every course of action to ensure that this took place.


FITNESS AND AMATEUR SPORT
Hon. Steven E. Paproski (Edmonton North):: Madam Speaker, my question is for the Minister of Fitness and Amateur Sport. The minister is not giving the National Indian Brotherhood the $1.2 million for recreational activities which was allocated in this year's estimates. Many of the programs are already under way. Why is the minister discriminating against these people?


Hon. Gerald Regan (Minister of Labour):: Madam Speaker, I thank the hon. member for his question and particularly for his concern in relation to the Indian people. Some years ago the Department of Fitness and Amateur Sport was authorized to carry out an experimental program which involved expenditures, and for the past year expenditures reached approximately $1.2 million, to cover status and non-status people in the country in the recreational and athletic field.
After being in existence for some years, a decision has been taken with respect to the program. The department, as the hon. member is well aware since he was the former minister, is very small and compact and does not have representatives in all the different parts of the country. This department is poorly structured to carry out supervision or monitoring of the effectiveness of these programs and how they are carried out. As a consequence a decision has been taken that a similar amount of money will be utilized for other purposes related to the health and welfare of the Indian people.


Steve Eugene Paproski: Madam Speaker, the minister's statement is neither candour, nor rhetorical, nor tongue in cheek; he speaks with a forked tongue.


Some hon. Members:: Oh, oh!


Gerald Augustine Regan: You have to be nicer than that to me.

February 13, 1981
Oral Questions FISHERIES


CHINOOK SALMON FISHING RESTRICTIONS IN BRITISH COLUMBIA-NEGOTIATIONS WITH U.S. AUTHORITIES
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Madam Speaker, I direct my question to the Minister of Fisheries and Oceans. In his policy of shutting down the Fraser River to gill-netters and in his answers in the House yesterday, the minister displayed an appalling lack of the understanding of the geography of the lower mainland of British Columbia. The salmon destined for the Fraser must swim through American waters where, during the season, the American fishermen fish seven days a week. Why does the minister not strike up discussions with the United States to shut down the American fishermen, rather than the Canadian fishermen?


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, the very purpose of the agreement which we are trying to reach with the United States on the whole issue of salmon interception is to deal with this type of problem. As the hon. member knows very well, the treaty which governs the management of the Fraser River is not the creation of this administration. That treaty goes back some years and we are attempting to have it changed. In fact I hope everybody, including the United States, will accept the reality that the chinook stocks have been over-exploited, that they are endangered and that we have to take difficult and painful measures to deal with the problem. I believe I would be irresponsible if I did not ask all elements of the industry to share equally in this effort of conservation.


Benno Friesen: Madam Speaker, that is my point; all elements are not sharing equally. I would like some assurances, rather than merely statements of hope, that the Americans will not continue to Fish for those salmon destined for the Fraser River while the Canadian fishermen are not allowed to fish. Would the minister give the House the data on which he based his policy of curtailment of the sports fishery? Would he publish the studies on which he based that policy?


Roméo LeBlanc: Madam Speaker, the hon. member likes to have it both ways. On the one hand he supports the policy that all elements of the Fishery should share in the constraints of conservation measures and, on the other hand, he seems to be arguing that we should not have asked that the sports fishermen also have some restrictions.


Benno Friesen: I did not say that.


Roméo LeBlanc: The reality is that the chinook salmon, especially the Fraser River chinook, have been decreasing in numbers quite dramatically. This is a trend which must be arrested, especially if we are ever to enhance the Fraser River and bring it up to its potential. We hope to take over direct management of the system. This situation is known by all the advisers. The difFiculty in this situation can best be described in a phrase which I will borrow from the Minister of Justice- "Everybody wants to go to heaven, and nobody wants to die."


PUBLIC SERVICE
Hon. Ron Huntington (Capilano):: Madam Speaker, I have a question for the President of the Treasury Board, who was the former chairman of the Standing Committee on Public Accounts and a hard-working member of the House while he worked on the whole matter of accountability which was launched when the Auditor General of Canada said that government spending is out of control.
In the proposed management structure which Treasury Board is bringing down to correct the situation and bring spending under control by putting in place value for money concepts, is the minister's plan, both phase one and phase two, an actual means whereby Treasury Board is raising the membership of the Professional Institute of the Public Service of Canada, and is he using this management structure to amend the Public Service Relations Act through Treasury Board regulations rather than through legislative introduced in this chamber?


Donald James Johnston: Madam Speaker, I thank the hon. member for his question. I have noted accusations in the press made by some of the unions with respect to this new management category. I pointed out when this policy was initially introduced last July, I believe, that there would be no raid in this phase on any union groups whatsoever. To do so would require amendments to the act in question. Effectively, what we are doing is creating a management category consisting of the executive group now in place, and other members, particularly the PM Seven Group, who at the moment are effectively excluded from bargaining units. So there is no raid on the Professional Institute ranks as suggested by some observers in the press.


Arthur Ronald Huntington: Madam Speaker, would the President of the Treasury Board then assure us that phase two will not be a mushroom in the growth of another level of bureaucracy whereby the management group tries to compete with the science, professional and trade groups in terms of pay and numbers? I hope that the minister will not create another level of bureaucracy in his attempt to bring financial management under control and put systems management into place. I hope that the fear the Professional Institute has of phase two, that some 11.3 per cent of their membership could be removed from the union category, is unfounded. Surely the government will not create a bureaucratic category whereby management will compete with our top professional scientists in terms of pay. For instance, hospital administrators do not expect to compete with doctors.


Donald James Johnston: Madam Speaker, as I indicated, the establishment of this management group is something, as the hon. member knows, which has been recommended by all independent observers-the Auditor General, the D'Avignon Commission and the Lambert Commission. We are in the initial stages of it, if you like, almost at an experimental stage. I think we all
February 13, 1981

recognize the importance of having a definable, responsible and accountable management category. 1 am just as interested, as the hon. member is, and all members on this side of the House, in ensuring that the size of the bureaucracy does not mushroom through this very important exercise in management accountability.


Some hon. Members:: Hear, hear!


PRIVILEGE
Madam Speaker:: Would the hon. Minister of Fisheries and Oceans (Mr. LeBlanc) like to revive the question of privilege which was raised yesterday by the hon. member for Skeena (Mr. Fulton)?


Roméo LeBlanc: With your permission, Madam Speaker, I would like to say, first, that 1 just became acquainted with the point raised by the hon. member for Skeena. I would also like to check the record very carefully and, of course, give my colleague, the Minister of Indian Affairs and Northern Development (Mr. Munro) a chance to do so. He is absent at this time. With your permission, Madam Speaker, perhaps we can put this off until Monday or Tuesday next. I believe both of us will be here on Monday.


POINT OF ORDER
Charles Joseph Clark: Madam Speaker, I rise on a point of order to simply correct a figure which I gave earlier in the course of the question period. In fact, the price of gasoline at the pump has gone up, on average, 32 cents a gallon in 1980. That price, of course, is still rising.


PRIVILEGE
Sinclair McKnight Stevens: Madam Speaker, as you know, I indicated last Friday that I would like to raise a question of privilege at the earliest possible opportunity. Subsequently, on Monday, my colleague, the hon. member for Yukon (Mr. Nielsen) tabled a formal motion which I would like to move with respect to my question of privilege.
I first intended to proceed with my question of privilege today but I see that the Minister of Industry, Trade and Commerce (Mr. Gray) is not in his seat. Unless there is some indication that he will be here later, perhaps I could defer my
Point of Order-Miss MacDonald
argument. But before deferring it I would like to indicate, at least, that if there is any confusion concerning the motion, the thrust that I will be making-and I give this to you, if you like, in the form of a new notice-is that the minister misled the House a week ago Friday by indicating in his answer that the negotiations with Massey-Ferguson were still under active review and that he had no statement to make at that time.
Subsequently, I will be showing in the course of my argument-


Madam Speaker:: Order, please. That is sufficient notice to the Chair of the kind of question of privilege the hon. member intends to rise on. If he wishes to defer until such time as the minister is here, that is quite acceptable.


Sinclair McKnight Stevens: Madam Speaker, in fairness to the minister and the other three ministers involved, I want to indicate the thrust of my argument in order that it will be recorded in Hansard in a formal way they will not be able to say I have caught them off guard.
Various cabinet meetings have been held and I want to disclose what was decided at those meetings. The four ministers involved are the President of the Treasury Board (Mr. Johnston), the Minister of Industry, Trade and Commerce, the Minister of State for Economic Development, Mr. Olson, and the Minister of Finance (Mr. MacEachen). I think it is important that they come prepared, if you like. A press release was prepared between the hours of 1 and 1.30 Friday morning concerning this matter. This is what I hope they will be willing to respond to when we get into the substantive argument which I will be making, hopefully, on Monday.


POINT OF ORDER
[Stage Direction]
miss Macdonald-activities of British high COMMISSIONER
Flora Isabel MacDonald: Madam Speaker, I rise on a point of order. Earlier this week, on February 11, in answer to questions in the House, the Secretary of State for External Affairs (Mr. MacGuigan) indicated that he would be prepared to make a report to the House by the end of the week with respect to his investigation of the alleged activities-as he said, the "totally unacceptable" activities-of the British High Commissioner. I would like to ask, in light of the minister having made that commitment to the House earlier, if he is now prepared to do so, particularly in light of the remarks of the Prime Minister (Mr. Trudeau) at his press conference yesterday.


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, I did not make a commitment to the House. What I said was that I hoped to be able to do so by the end of the week. In fact, I am ready for a question on that subject today, and if Madam Speaker-


Charles Joseph Clark: You said a statement.

February 13, 1981
Privilege-Mr. Smith


Mark R. MacGuigan: -wants me to reply to a question at this point 1 would be very happy to do so.


Some hon. Members:: Oh!


Madam Speaker:: 1 am afraid Oral Question Period is over and 1 cannot allow any further questions.


Charles Joseph Clark: Madam Speaker, what is of concern to us-and this issue has been raised before-is that this government has developed the practice of moving away from statements on motions which allow the House of Commons to be the place in which policy is first announced. This denies members of the House of Commons the opportunity to reply to policy announcements. We were given a clear indication by the Secretary of State for External Affairs (Mr. MacGuigan) that he intended to make a statement. We naturally interpreted this to be a statement in the normal course, a statement on motions. He is now backing away from that commitment. In backing away from it he is repeating a pattern of this government by refusing to allow the House of Commons to deal in the first instance with matters which should be raised here, particularly when a promise was given. I hope that promise was not rhetorical, tongue-in-cheek or less than candid.


Pierre Elliott Trudeau: Madam Speaker, since reference was made to a statement I made in a press conference yesterday, I want to inform the Leader of the Opposition (Mr. Clark) that I did not make a statement at that press conference. I merely answered questions. A question was asked of me and I gave the answer. I think every day of the week the Leader of the Opposition and his cohorts have the opportunity to do the same, if they can think as fast as members of the press.


Some hon. Members:: Hear, hear!


Mark R. MacGuigan: Madam Speaker, I really want to say it is not my understanding that I made any kind of commitment to the House, certainly not as to a statement of motions. But I can assure the Leader of the Opposition that I will be prepared to answer a question with respect to this matter on Monday. I will not make any statement outside the House until then.


PRIVILEGE
Mr. David Smith (Don Valley East):: Madam Speaker, my question of privilege is one which 1 believe relates to all members of the House. I am referring to a radio advertisement which is currently being broadcast on Canadian stations. I myself heard it on a Toronto station. I believe it constitutes a slur on the integrity of all Members of Parliament, in that it sets out a fact situation which, if it were the case, would constitute an offence under the Criminal Code of Canada. The advertisement is a 60-second clip.
I have a transcript of it here and with your indulgence, Madam Speaker, I would like to read it into the record. It is a conversation between a person called "Jiffy", who is allegedly the owner of a supermarket, and a person called "Miles Pleasant", who describes himself as "your local MP" It goes as follows:
Jiffy here!
Jiffy, this is your local MP, Miles Pleasant.
Oh?
I have received a complaint from a customer of yours, a Mrs. Meanswell.
Oh, yeah?
Says they've misplaced the Highliner fillets in sauce!
Misplaced them! But they're here in the Highliner case file under "Fish".
She says they should be with the other frozen entrees like frozen lasagna . . .
But... but.. .
Now see here, Jiffy, they're tender white fillets covered in yummy sauce. You just eat 'em and eat 'em. I ate 'em, so I know.
Yes, but...
Mrs. Meanswell suggests the very least you can do is to put up a sign saying, "If you're looking for Highliner fillets in sauce, they're not here!"
What?!
Oh, about your application to build a parking lot adjacent to your supermarket, it's on my desk right now ...
Oh, I see ...
The Meanswells are great, uh, friends of mine.
I'll look into it sir.
Then there is music and the advertisement ends up by asking: "Will Mr. Jiffy get his parking lot? Will he put up the sign at the frozen entree case saying, If you're looking for Highliner fillets in sauce, they're not here"?
I would submit that constitutes a prima facie case of contempt of the integrity of Parliament.
I have looked at a number of precedents. I do not intend to cite all of them, but I would like to refer to one made by the Hon. T. C. Douglas in a debate on Thursday, June 4, 1964, at page 3917 of Hansard. He is referring to a press report and this is what he says:
I do not raise this on any basis of personal resentment, Mr. Speaker. I say this is a reflection on the integrity of all members of the House. What is to my mind even worse, it helps to feed the cheap cynicism that is all too prevalent with reference to Parliament and its membership.
That is the same way I felt with respect to this ad when I heard it on the radio. I would submit that it is, in fact, an affront to Parliament and all its members and that we have a prima facie case of contempt of the House.


Madam Speaker:: I will look into the advertisement, and examine it to see whether it really reflects on the ethics of parliamentarians. I will rule on the matter later.


MR. NIELSEN-STATEMENT BY MR. CHENIER
Erik Nielsen: Madam Speaker, I rise on a brief question of privilege which arose out of the proceedings during the adjournment debate last night when I spoke to the question of federal land dispositions in the Yukon. The hon.
February 13, 1981

member for Timmins-Chapleau (Mr. Chenier) read what was obviously a departmentally prepared reply. At page 7203 of Hansard for February 12, 1981, the Parliamentary Secretary to the Minister of Indian Affairs and Northern Development said this:
The hon. member for Yukon (Mr. Nielsen) highlighted this controversy by alleging improprieties in the department-
In other words there was a direct accusation against me that I had alleged improprieties. At that time, I intervened and said "That is not true."


Madam Speaker:: I have to interrupt the hon. member. He could raise this question of privilege at this time if the content of his question of privilege flowed from the deliberations of today. But if it flows from yesterday's proceedings, he knows the usual notice is required. I will accept that notice and hear him later on.


Erik Nielsen: Madam Speaker, I was simply trying to save the time of the House. All I wanted to add to the question raised today, so that I will not take up the time of the House tomorrow, was that if the departmental official who prepared that written reply had referred to page 6544 in Hansard for January 26, 1981, he would have found that no such words and no such allegations were made by me.
1 would urge parliamentary secretaries and others who have the responsibility for delivering written replies prepared in the department to look at them a little more carefully before they accuse members on this side of making improper allegations.


Some hon. Members:: Hear, hear!


Madam Speaker:: I very much like the representation, and I suppose the House has accepted it as such.



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation)

[Stage Direction]
Report of Special Joint Committee on the Constitution of Canada-Mr. Joyal.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]
Order Paper Questions

Miss Coline Campbell (South West Nova):: Madam Speaker, I have the honour to present the third report of the Standing Committee on Fisheries and Forestry. If the House gives its consent, I intend to move concurrence of this report later.


PETITION
Thomas Edward Siddon: Madam Speaker, I have the duty to present a petition on behalf of large numbers of British Columbia herring fishermen who oppose the 1981 management plan for the season which is to open in the next few weeks. The 1981 herring management plan was developed without regard for the advice of the minister's own officials and experts. The last minute changes in the area licensing and lottery draw selection procedure were totally contrary to the 1980 plan which has never been tested. Therefore, these petitioners have asked as follows:
Wherefore, the undersigned do hereby protest any attempt by the Government of Canada to impose an eleventh hour decision of area licensing upon the British Columbia Herring Fishery without an opportunity to provide adequate input on this very serious measure, and do pray that the House of Commons will correspondingly reject any such proposal and instead will instruct the minister to implement the 1980 Herring Roe Plan, which had been the product of extensive consultation with the fishermen.
Therefore, on behalf of these petitioners, I ask for serious consideration of their strong appeal to the Minister of Fisheries and Oceans (Mr. LeBlanc) and to the Government of Canada through this House.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John Evans (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Madam Speaker, the following questions will be answered today: Nos. 259, 699, 988, 1,497, 1,732, 1,847 and 1,848.
I ask, Madam Speaker, that the remaining questions be allowed to stand.
7220

February 13, 1981
Order Paper Questions


Mr. Herbert: 1.	Were official requests received from the Quebec Housing Corporation for Canada Mortgage and Housing Corporation funding of senior citizen housing projects in the constituency of Vaudreuil and, if so, for which projects?
2.	Will the projects be eligible under the National Housing Act for loan insurance and interest rate write-down subsidy assistance?
by 13 cents for a bottle of table wine and 44 cents for a bottle of fortified wine. The tax on sparkling wine was reduced by 17 cents per bottle.
2. Any change to the tax rate changes noted in 1. above would be announced to Parliament by the Minister of Finance.


Hon. Paul J. Cosgrove (Minister of Public Works):: 1 am
advised by Canada Mortgage and Housing Corporation as follows: 1. CMHC funded the following senior citizens' housing projects in the constituency of Vaudreuil:
Name of Project	Municipality
Foyer de Rigaud
Manoir Roger Bernard
C. A. Dorion
C. A. Laurent Bergevin
C. A. Denis Benjamin Viger
St-Polycarpe
St-Zotique
Rigaud Pierrefonds Dorion lie Perrot
St-Raphael de 1'ile Bizard
St-Polycarpe
St-Zotique
2. The first six projects were approved under the old social housing programs and are therefore not eligible for interest rate write-down subsidy assistance. In the case of the St-Zotique project, CMHC insured a loan under the National Housing Act to Quebec Housing Corporation and will contribute subsidy assistance in the form of an interest rate write-down.


Mr. Clarke: 1.	For the fiscal year 1978-79, how many contracts were let by the Ministry of State for Urban Affairs for professional services, to persons who at any time within the past five years, had been employed in indeterminate positions under the Public Service Commission?
2.	How many contracts were (a) for less than one year (b) for one to two years (c) over two years?
3.	How many contracts were let outside the National Capital Region?
4.	What was the total cost of all such contracts?


Paul James Cosgrove: The
information is not readily available as the ministry was disbanded in March, 1979. To provide an accurate reply would entail a thorough and lengthy examination of all relevant files currently in the Public Archives. The costs and the time required to obtain all this information would be prohibitive.


Mr. MacKay: 1.	What was the government's estimate of tax expenditures available to the manufacturing sector in 1979, by province and territory, created by the (a) lower corporate income tax rates on manufacturing and processing profits (b) investment tax credit on manufacturing investments (c) two-year write-off on manufacturing estimates?
2.	What was the government's estimate of tax expenditures available to small business in 1979, by province and territory, created by the (a) lower or small business income tax rate (b) sales tax exemption on up to $50,000 on manufacturing sales?
3.	What was the government's estimate of tax expenditures available for research and development in 1979, by province and territory, created by the (a) immediate write-off on R and D expenditures (b) additional allowance of 50 per cent of incremental R and D expenditures (c) investment tax credit on R and D expenditures?
4.	What was the government's estimate of tax expenditures available to the resource sector in 1979, by province and territory, created by the (a) fast write-off for Canadian exploration expenses (b) fast write-off for Canadian development expenses (c) 33V5 per cent earned depletion allowance (d) excess of tax depreciation over book depreciation (general) (e) investment tax credit on resource investments?


Hon. Pierre Bussieres (Minister of State (Finance)):: The
aggregate values of these tax expenditures in 1980, as given in the most recent tax expenditure account are as follows:
1.	Manufacturing:
(a)	lower corporate tax rate on manufacturing and processing profits, $600 million;
(b)	investment tax credit in the manufacturing sector, $170 million;
(c)	two-year write-off, $500 million.
2.	Small business:
(a)	reduced small business income tax rate, $1,200 million;
(b)	sales tax exemption, $20 million.
3.	Research and Development:
(a)	immediate write-off on R and D expenditures, $63 million;
(b)	allowance on incremental R and D, $34 million;
(c)	investment tax credit on R and D, $45 million.
4.	Resource Sector:


Mr. Cossitt: 1.	Did the Minister of Finance's statement in the House on April 21, 1980, indicate a price increase in Ontario wines and, if so, is he aware that the Ontario Grape Growers Marketing Board is concerned about such increases and the effect it will have on the grape growers and wine producers in Ontario?
2.	Is the minister prepared to alleviate any problems such an increase has created and, if so, to what extent?


Pierre Bussières: 1. The
April 21, 1980, statement increased the excise taxes on wines
(a)	preferential treatment of exploration and development expenses, $1,250 million;
(b)	accelerated capital cost allowances, $370 million;
(c)	the investment tax credit on capital expenditures by resource industries, $125 million.
It is not possible to provide a breakdown of these amounts by provinces and territory. Tax data on the claims of these items are not available by province. Moreover, the concept of
February 13, 1981

residency is not applicable to corporations in the same manner as it is to individuals. The taxation of corporations is determined by their place of business. However, over one-half of taxable income is earned by corporations which operate in more than one province. The financial accounts of corporations are not broken down by province. Nor do separate tax accounts exist by province. Taxable income for provincial corporate income tax purposes is allocated according to a formula which generally distributes income in proportion to the shares of wages and salaries paid by each corporation in a province and the corporation's sales in the province. While this formula clearly does not necessarily reflect the provincial incidence of the tax expenditure itemized, the following distributions of taxable income for the manufacturing sector and the resource sector provide some indication of the provincial pattern of corporate activity in these sectors.
Share of Taxable Income by Province for Selected Sectors, 1978
Newfoundland	Percentage in round figures Manufacturing Resource Sector Per cent 1 X	
Prince Edward Island	-	XNova Scotia	2	1New Brunswick	1	-Quebec	22	3Ontario	46	9Manitoba	3	2Saskatchewan	1	5Alberta	9	70British Columbia	14	8Yukon	-	-Northwest Territories	-	2Total	100	100
All Industries
2

37
3
20 12
Notes: 1. -less than one-half of one percent
2.	X suppressed for confidentiality
3.	Totals may not add due to rounding
Source: Statistics Canada, 61-208, Preliminary Data on Corporate Income Taxes


Mr. Stewart: For each year 1975 to 1979 in the constituency of Simcoe South, what organizations or community groups were in receipt of financial assistance from the Secretary of State under the (a) Multiculturalism Directorate (b) Official Language Minority Groups Directorate (c) Community Groups Program (d) Citizen's Participation Directorate and, in each case, what was the amount?


Mr. Peter Stollery (Parliamentary Secretary to Secretary of State and Minister of Communications):: Department of the Secretary of State: the Grants and Contributions Secretariat and the Secretary of State's records both indicate that since 1977-78 no financial assistance has been given to organizations or community groups in the Simcoe South constituency from the programs specified in Mr. Stewart's question. Prior to 1977-78 no records indicating Secretary of State funding by
Order Paper Questions
riding were maintained by the Grants and Contributions Secretariat or the Secretary of State's office.


Mr. Herbert: 1.	What is the present (a) authorized (b) actual personnel strength of the Canadian Pension Commission?
2.	How many positions are designated (a) unilingual English (b) unilingual French (c) bilingual and, in each case, how many persons occupying the positions have indicated their willingness to relocate in Prince Edward Island?


Hon. J. Gilles Lamontagne (Minister of National Defence):: 1.	(a) 232 Head office staff;
128	District office staff.
(b) 214 Head office staff;
129	District office staff.
2.	At Head office:
(a)	136;
(b)	1;
(c)	69;
2 French or English.
There are twenty-four commissioners appointed to the Canadian Pension Commission by order in council. These positions do not have a language designation. Because the Canadian Pension Commission is not scheduled to relocate to Prince Edward Island until 1983, staff have not yet been required to officially indicate their willingness to relocate. See also reply to question No. 82, part 4, answered July 2, 1980.


Mr. Herbert: 1.	What is the present (a) authorized (b) actual personnel strength of the War Veterans Allowance Board?
2.	How many positions are designated (a) unilingual English (b) unilingual French (c) bilingual and, in each case, how many persons occupying the positions have indicated their willingness to relocate in Prince Edward Island?


J. Gilles Lamontagne: 1.	(a) 33;
(b) 31.
2.	(a) 9;
(b)	None;
(c)	14.
There are eight employees who are order in council appointees and their positions do not have a language designation. The War Veterans Allowance Board officially relocated to Charlottetown, Prince Edward Island, in June, 1980.

February 13, 1981
Excise Tax


Madam Speaker:: The questions enumerated by the parliamentary secretary have been answered. Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Allan Joseph MacEachen: that Bill C-57, to amend the Excise Tax Act and Excise Act and to provide for a revenue tax in respect of petroleum and gas, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, the bill which we are considering this afternoon is an important one which seeks to implement two major parts of the energy program of the government and a number of changes in federal sales and excise tax measures.
The bill consists of five parts. Part I introduces amendments in the federal sales tax system, such as the application of tax to marginal manufacturing activities and to advertising inserts in newspapers.
Part II contains provisions for the new tax on natural gas and gas liquids. Part III deals with changes in the taxation of alcoholic beverages and technical provisions of the Excise Tax Act. Part IV establishes an 8 per cent tax on petroleum and gas revenues under a separate act; and Part V prescribes the commencement date for the various provisions in the first four parts of the bill.
Without going into the details of the different provisions at this time, I would like to take some minutes to elaborate on some of the more significant provisions of Bill C-57. Perhaps the most important amendment in Part I is the reduction in the federal sales tax from 12 per cent to 9 per cent as originally proposed by the Minister of Justice (Mr. Chretien) in his budget of November, 1978.
This measure, which has had a substantial stimulative effect on the Canadian economy, has been continued in force since November, 1978, by way of a remission order under the Financial Administration Act. Other tax changes, including a few increases in federal sales and excise taxes, have also been administered since that time on the basis of the ways and means motions in accordance with our traditional practice. This bill covers these outstanding proposals, extending back to 1978.
Bill C-57 also contains a number of important amendments relating to the structure of the federal sales tax, which I announced in my October budget speech. As many tax practitioners and taxpayers are aware, the current federal sales tax system contains serious inequities and anomalies. These include the taxing of goods at different trade levels, and thus different prices, the lack of a comprehensive appeal system, the avoidance of tax by shifting some manufacturing operations beyond the taxing point and the bias favouring imported goods over domestic products.
These inequities are well documented. Numerous reports, including the Carter Royal Commission Report, the 1975 discussion paper and a report of the commodity tax review group, have all highlighted them and proposed potential solutions. Unfortunately, there appears to be little public appreciation of the seriousness of these inequities. However, I do not believe that the existing inequities can continue. For this reason, I announced in my October budget an amendment to correct one of the most serious deficiencies of the existing act-the shifting of otherwise taxable activities, sometimes referred to as marginal manufacturing activities, beyond the tax point.
I have received certain representations from the business community on this proposal. While they are generally sympathetic to the need for this change, they would have preferred a comprehensive reform of the sales tax system. I Find the emphasis placed on the need for comprehensive reform encouraging. The inclusion of marginal manufacturing in the tax base is an important step in this regard. But I wish to emphasize that this is only a first step and that other inequities and structural deficiencies in the act will have to be dealt with in the near future.
Let me briefly explain what the problem of marginal manufacturing is. Put very simply the value of any operations performed by a manufacturer prior to the sale of the goods, are included in the manufacturer's sale price and hence form part of the base for the federal sales tax purposes. This includes such operations as assembling and packaging. When these operations are performed beyond the tax point, however, by a person who is not the licensed manufacturer of the goods, the value added through these functions escapes the tax. This is clearly inequitable, as one person is required to pay tax on a series of specific operations as part of a manufacturing process while no tax liability is imposed on another person who performs essentially the same operations.
A second less obvious but perhaps more important fact is that the incidence of tax avoidance through marginal manufacturing is most prevalent in the case of imported goods. In fact, from the information and submissions which I have received, it would appear to be confined almost exclusively to imported goods. Importers frequently import goods in unassembled and unpackaged form, pay tax on them at the point of importation on relatively low values, and escape tax on packaging and assembling operations subsequently performed in Canada.
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A study prepared by my officials suggests that the resulting biases in the application of tax are of a serious order of magnitude. For most imports, the effective rate of tax is two or three points lower than on comparable goods produced domestically. This is a disparity of 20 per cent to 35 per cent in the burden of tax, a substantial proportion. For example, in the case of toys, the federal sales tax as a per cent of the sale price to retailers is 7.4 per cent for domestic goods as compared to 3.3 per cent for imported toys. Other examples include golf balls at 8.3 per cent for domestic products and 3.5 per cent for imports, and coffee makers at 8 per cent and 4.6 per cent respectively.
It has been suggested that although my budget proposals will resolve the inequities in respect of the application of tax to marginal manufacturing activities, some importers may choose to move their packaging offshore to minimize their added tax burden. Of course, Mr. Speaker, this would not necessarily be successful. First, the packaging value added abroad would be rolled into the value for duty, and thus would attract both duty and tax. Secondly, as the product would be more bulky, shipping costs could be expected to increase significantly. Nevertheless, I do recognize that in some instances, this will occur. It is for this reason that I emphasized in my budget the need for other major changes in the application of the tax.
This bill also proposes a number of important changes in sales tax exemptions, administrative provisions and taxes on alcohol and tobacco products. These will be dealt with in greater detail obviously as we come to them in our study of the bill in committee. One amendment, however, which has received a great deal of attention is the proposal relating to the taxation of printed advertising materials and the sales tax exemption for newspapers.
This bill addresses two issues relating to the sales tax exemptions for newspapers. First, it proposes amendments to ensure that the sales tax exemption is confined to newspapers and does not get extended to publications whose content is primarily advertising. Second, it extends the tax to apply to advertising materials such as catalogues and flyers which are not an integral part of a newspaper, but are inserted into newspapers primarily for distribution purposes.
I received a number of representations following the October budget from small weekly newspapers concerning the proposal that the exemption for newspapers be limited to publications which have no more than 70 per cent advertising content in 50 per cent of the issues in the previous three months. Some publishers expressed concern that while the advertising content of their publications was generally less than 70 per cent, occasionally they could exceed this limit for seasonal or other factors. In response to these concerns, and to provide some safety margin, I tabled a new motion on January 22, 1981, proposing that the 70 per cent limit be raised to 75 per cent. I believe that this new limit will provide a fair criterion for separating tax exempt newspapers from other forms of taxable printed matter and will address the specific concerns of the community newspapers.
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The second issue concerns the taxation of printed advertising materials. Prior to the October budget, all printed advertising material was taxable except those materials which were inserted in a newspaper for distribution purposes. Newspaper inserts were exempt from tax under a provision which exempted articles and materials used in the manufacture of a newspaper. This relief placed direct mail firms, the post office and door to door distribution firms at a competitive disadvantage in relation to newspapers. It was clearly inequitable because identical printed advertising materials were taxable when distributed by them but exempt when inserted in a newspaper. To correct this problem, amendments are being proposed to ensure that federal sales tax applies to all printed advertising materials, including those which are inserted in newspapers for distribution purposes. The new proposals will establish equitable tax treatment for alternate modes of distribution.
I wish to assure hon. members that the newspaper itself will not attract tax, nor will advertisements appearing on the regular pages of newspapers. The tax will apply only to advertising inserts.
The exemptions provided to newspapers and to certain other goods under the excise tax act constitute important tax concessions. Such concessions to one part of the community must be financed through higher taxes in other areas. The amendments proposed in this bill are designed to ensure that these tax preferences are properly targeted.
This bill also provides authority for two new energy-related taxes which I proposed in my budget. Part II of Bill C-57 imposes a special tax to be known as the natural gas and gas liquids tax while Part IV of the bill imposes the 8 per cent petroleum and gas revenue tax.
The gas tax will apply to all sales of Canadian natural gas and natural gas liquids, which are propane, butanes and ethane, regardless of whether the sales are to domestic or foreign buyers. The rate of tax is 28 cents per gigajoule on gas effective November 1, 1980, for domestic sales and February 1, 1981, for export sales. The tax rate will be increased in three stages to reach 70 cents per gigajoule on January 1,
1983.	Equivalent rates of tax apply to gas liquids.
The petroleum and gas revenue tax will be imposed under a separate act. Under this tax, effective January 1, 1981, all oil and gas producers are subject to a tax of 8 per cent of their net operating revenue from the production of oil and gas. In order to ensure that the tax base is not eroded, no deductions are permitted for exploration and development expenditures, capital cost allowances, interest payments or royalty payments to governments. The tax applies to all persons who receive income from oil and gas production. In order to ensure equal treatment of taxpayers, whether or not they are liable for normal corporate income tax, the petroleum and gas revenue tax is non-deductible for income tax purposes.
These taxes are obviously an important part of the government's new energy program as announced in my budget. The program has three important objectives, namely, security of

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supply and ultimate independence from the world oil market; a fair pricing and revenue-sharing regime which recognizes the needs and rights of Canadians in all provinces; and greater Canadian ownership and control of the oil and gas industry. The two taxes contained in this bill are essential for the achievement of these objectives.
Revenues from the two new taxes will, of course, assist in the financing of new energy-related programs announced in the National Energy Program. These include incentive payments for exploration and development of oil and gas, grants for conversion from oil to gas, electric heating or other fuels, subsidies for gas pipeline extension into areas dependent on imported oil, and increased incentives for home insulation. All of these programs are important in achieving our goal of energy security.
The natural gas tax forms part of the over-all pricing strategy set out in the national energy program. That document outlined various goals for oil and gas pricing. They include providing adequate incentives for supply without giving unwarranted profits to producers, providing an impetus to conservation without undue shocks to the Canadian economy and encouraging consumers to switch from oil to gas.
The tax is an important instrument in serving those goals. Even with the full implementation of the tax, the price of gas to Canadian consumers will decline relative to oil prices, on a heat equivalent basis, from roughly 85 per cent to 65 per cent. There will be, therefore, a major incentive to switch from oil to gas.
The tax also has an important role in ensuring that the difference in the returns to producers from exported gas as opposed to domestic sales is not increased, thus not adding to incentives to find gas solely for export markets. Under existing arrangements the returns to producers from exporting are high. This creates an undesirable bias in the system to find gas and export it. On a long-term basis such a policy does not make a lot of sense for this country. As I indicated in my budget, our preferred approach to redress this bias would have been to impose an export tax on gas which would have captured some portion of the difference between the world price and the Canadian price. However, the producing provinces and Members of Parliament objected strongly to this approach. For this reason 1 proposed a tax on all sales of gas. Some have criticized the application of this tax to gas destined for export. But, as Canadians, are we really prepared to say that the gas used in Canada to serve Canadian needs will be taxed while gas sold abroad would be exempt? I, for one, was not prepared to put in place a tax which further increased the incentives to ship gas abroad rather than using it at home.
Let me turn now to another of our energy objectives-a fair division of revenues. Oil and gas prices have increased dramatically in the last few years and will continue to rise under the National Energy Program. In the absence of changes in the fiscal regime, the increase in prices would generate additional profits for the industry and would result in an inappropriate sharing of revenue between the federal and provincial governments.
Under the oil regime, Canadians in all provinces, through the federal government, bore much of the burden of rising energy prices. But they received few of the benefits. In recent years the federal government has received about 10 per cent of petroleum production revenue. Provincial governments and the industry have each been receiving about 45 per cent of revenues. It is to redress this imbalance that I have proposed the petroleum and gas revenue tax and have made certain changes to the income tax depletion allowances for oil and gas. I do not believe this tax intrudes into areas which provinces can legitimately claim as solely their own. The rate of tax, 8 per cent, reflects the capacity of the oil and gas industry to pay and brings its contributions more closely in line with what other industries are required to pay. The new fiscal structure is also more fair to companies in different circumstances. The new 8 per cent tax is the same, regardless of whether the company pays income taxes. The replacement of depletion allowances by a grant system also contributes to fairness in the fiscal regime. The depletion allowances benefited taxable companies who were generally the larger foreign producers, while the new incentive grants will be available to both taxable and non-taxable companies and will be better targeted in favour of Canadian companies.
In general, under the new proposals the industry will be left with significant levels of cash flow even compared to the high levels for 1978 or 1979. Although the cash flow of the industry will be obviously reduced from what it would have been if the old fiscal regime had been allowed to continue, nevertheless the industry is left with adequate cash flow to finance the levels of exploration and development expenditures necessary to increase our energy supplies. For example, cash flow in 1981 is projected to be up 28 per cent over the 1979 levels.
These are the main elements of this important bill. Undoubtedly there will be discussion in the House but even more detailed discussion and consideration of the proposals in the committee. From what I have said it is obvious that this is an important bill. It brings into law necessary changes in the sales and excise tax system which address real deficiencies in that structure as it now stands.
The energy taxes are also important. They are warranted at the present time, and I believe they deserve the support of members of the House.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, although we have been exposed in three budgets to proposals with regard to changes in the excise tax, this is the first time we are talking about a bill in that respect-after three budgets. As a matter of fact, there are additional ways and means motions which find their way into this legislation, and I am talking about those which appear in Votes and Proceedings of December 17 dealing with petroleum and natural gas.
This is a very wide-ranging subject. We always used to think of sales tax as being that hidden manufacturers' tax. When I first came into this House it was 6 per cent. Then Walter Gordon, of unlimited memory proposed in 1963 that that sales
February 13, 1981

tax would apply to practically everything including productive machinery and all sorts of things. Of course, that was when the Liberals were in their 60 days of action.


Allan Joseph MacEachen: Decision.


Marcel Joseph Aimé Lambert: Sixty or one hundred, I do not know.


Allan Joseph MacEachen: Decision.


Marcel Joseph Aimé Lambert: "Decision". Well, it was 60 days of unmitigated daily disasters, as we recall it. Experts were hired for the preparation of the budget, which was then found to be contrary to practice. Amateur tinkerers were working with an amateur minister, and National Revenue officials were not consulted at all either with respect to income tax or customs or excise tax. Then when they were in deep trouble it was rumoured that the deputy minister of national revenue on the one side of that department just merely took off and went fishing, leaving the minister to wriggle on the end of the hook he had so fashioned.
In any event, now we are coming to these proposals, and while this debate will only last for today, because of the importance of the subject matter being covered I am very pleased to have participated through, shall we say, informal channels, to have this bill referred to the Standing Committee on Finance, Trade and Economic Affairs rather than being considered as a ways and means bill in Committee of the Whole.
There are some very contentious areas. The minister has quite candidly admitted that one of the areas which will be very difficult and which will excite a great deal of controversy is the so-called marginal manufacturing. I will not talk too much about that. My colleague, the hon. member for Capilano (Mr. Huntington), will have something to say because he knows what it is all about. My colleague, the hon. member for Burlington (Mr. Kempling), will also have something to say. While our colleague, the hon. member for Bow River (Mr. Taylor), brought out during debate on income tax the other day some real horror stories with respect to the application and interpretation of the Income Tax Act, the hon. member for Burlington has a whole book of horror stories of incidents about the application and administration of excise tax.
As far as the public is concerned the excise tax is a hidden tax. It is the indirect tax that the retailer has had to include in his price. Somewhere along the line it is included prior to the contact between the retailer or distributor and the consumer.
Provincial sales tax, on the other hand, is not included directly in price, except in the case of some things like alcohol, cigarettes and a few others. By and large sales tax is computed and applied at the time of sale. This means that regardless of who buys a pair of shoes, trousers or whatever the goods might be, and regardless of income, sales tax is paid. All consumers pay the same level of sales tax. This is regressive and contrary to the principle of ability to pay. I saw the Parliamentary Secretary to the Minister of Finance (Mr. Evans) shaking his head a moment ago. The parliamentary secretary, with his
Excise Tax
more inflated salary than mine, pays precisely the same amount of sales tax as I do.


John Leslie Evans: Not for clothing and footwear for children.


Marcel Joseph Aimé Lambert: Again the hon. gentleman, in his inimitable fashion, is talking about oranges and apples. I am talking about the same commodity. I am talking about furniture, for instance. If he buys a chair and I buy a chair or table, he pays the same amount of tax as I do, and we both pay the same amount as a person earning half our income.


John Leslie Evans: We pay the same price for a car, too.


Marcel Joseph Aimé Lambert: Taxation is justified in a number of ways. Our friends from the far left-and the government too-clothe themselves with the wraps of sanctity when it comes to income tax by saying that all tax should be on the basis of ability to pay, but that does not apply in the case of federal sales tax. In Ontario, however, when it comes to the question of provincial sales tax, there is an adjustment on the annual filing of income tax returns. When people in Ontario pay their share of provincial income tax, there is an allowance, albeit small, but it is an adjustment so that the lower income earner gets a break in respect of the quantum of estimated provincial sales tax he or she may have paid. There is nothing like that with regard to federal sales tax.
Adding federal sales tax to the cost of commodities is a means of providing fodder for that ever-widening mouth of the government's requirement for funds to spend. Ministers and senior bureaucrats are always looking for ways and means of spending money. They insist that they must spend more. Our bureaucracy is set up on the basis of encouraging spending more money because he who has the administration of a larger budget-or today a bigger envelope or purse-naturally merits a higher salary and usually merits a greater number of people under him.
There is an incentive to spend more money. In order to do so, one must get more money. We have a ludicrous situation today because of the economically and abysmally stupid practice of subsidizing petroleum products. These subsidies frankly are not holes in a rice bag; they are the bottom out of the rice bag.
But the federal government has programs requiring more and more money, and so do many of the provincial governments. True enough, there is the incidence of inflation, a great one now. We have not just achieved double-digit inflation this month, we have reached 12 per cent, the highest in six years. This is a great example arising out of the series of budgets with which the minister has been connected in the past years, when controlling inflation was to be the main aim of the government. Government spending programs were going to be limited. But now we see the truth behind the whole scheme where this government comes out to get more and more money, sometimes trying to legitimize it. We have here an extension of the sales tax on graphic art. Initially a mistake

February 13, 1981
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had been made and the tax applied to serigraphs. It was admitted to have been a clerical error, but the tax applied. Now, because an injustice seems to have been created by the application of the tax in the first place, it is being corrected by extending the tax to other works of art, limited editions and the whole field. In other words, two wrongs are going to make a right in this case, the right being the government wanting and needing more money.
There is a proposal in this bill dealing with the newspaper printing problems, the 70 per cent advertising content which has been raised to 75 per cent. I have copies of briefs here which show that the determination of whether a publication is recognized as a newspaper depends on advertising content. Some of these publications have been in existence for 50 years and some for even 100 years, and yet, if its advertising content does not meet the 70 per cent criterion and its editorial content does not meet the 30 per cent criterion, it is not recognized. The percentage has now been increased to 75 per cent. Incidentally, that does not cover the cost of operation, particularly in the case of the weekly press. I am looking at my own constituency where we have the flag ship of the Southam Press. In a newspaper which, on a Wednesday night may run from 140 to 160 pages and on a weekend certainly exceeds 100 pages, we see inserts four, six or eight pages long by supermarkets and department stores, plus inserts of Canadian Tire, Beaver Lumber and a number of others. At one time that advertising was distributed by hand from home to home and came out of the commercial printing press. Now much of that work is done in commercial printing plants and comes out as inserts in the big dailies. The big dailies have a much wider base on which to spread their costs and they can carry these inserts, but they will not pay tax on them. I know of some instances where the big chains which publish the newspapers control the commercial printing plant and, therefore, it is all within the house operation.
Let us look at this in another way. In order to legitimize the excessive amount of advertising which appears in specific editions of our daily newspapers-we get an eight or 12 page section in our dailies and 98 per cent or 99 per cent of that section will be whole page advertising-the back page will carry anywhere from one column down one side, or perhaps three or four inches across the top, some wire copy merely saying that this section is part of the newspaper, and this carries some of the editorial content.
I say to the minister that the increase of 70 per cent to 75 per cent in permitted advertising content will not save the weekly newspapers. I am quite aware of the fact that they are already trying to make very strong representations, and I think we should take a look at both sides of the question.
I hope we will recognize within this act the margin at which a person or a firm is a true manufacturer. There was the small manufacturer notch years ago, and I remember that it used to be $3,000 a year. Well, today, an industrious man with a jack-knife could almost whittle $3,000 worth of goods. We have to provide for a realistic increase in that ceiling so that the small manufacturer does not become involved in the Excise
Tax Act. In so far as the marginal manufacturer is concerned, the smell of the value added tax emanates from the legislation so that if the goods are imported for boxing purposes or for packaging purposes, to put them in English and French as required, or for the change to cater to Canadian distribution, the value of the tax on the goods is added so that the goods will then be sold for tax.
May I call it one o'clock, Mr. Speaker?


The Acting Speaker (Mr. Blaker):: Order, please. The Chair will expect to see the hon. member again at two o'clock to hear his continued intervention.
It being one o'clock, I do now leave the chair until two o'clock this afternoon.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Marcel Joseph Aimé Lambert: Mr. Speaker, I wish to terminate my remarks at this time because I realize there are a number of members who wish to speak in the limited time available in the balance of today, but in summary I should like to return to the newspaper proposal and so the representations which have been made to myself and my leader. If I referred to the Canadian Community Newspapers Association assessment of the tax, it would put it before members most succinctly. First, the tax is a tax on newspapers.


John Leslie Evans: That is not true.


Marcel Joseph Aimé Lambert: It is the first in North America. It fails to define a newspaper except by volume of advertising content. Anything with less than a 75 per cent advertising content is deemed to be a newspaper. In the context of today's operating conditions, it will be detrimental and discriminatory on smaller papers. It will increase the cost of newspaper production since central plant markets for other products may be reduced. Enforcement will be very difficult because of the numbers involved; that is, not only the number of newspapers, but the number of publications.
The Deputy Prime Minister and Minister of Finance (Mr. MacEachen) must wonder about the fact that it is one of those taxes which has a clear passage through to consumers and will simply increase the cost of living all the way around. As soon as it is on it will be reflected in the CPI. Does that do a great deal of good to the country? Coupled with rapidly escalating material costs, the tax affects newspaper support at a time that coincides with diminishing retail sales. So, the newspaper operation is caught between the two pincers of a jaw.
[DOT] (MIO)
The tax is confusing, and its ramifications are far more extensive than could possibly have been intended in this legis-
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lation. Frankly, the local newspaper, in more instances than may be imagined, is probably the sole remaining local forum in many communities. If this tax strikes deeply and hard at those community newspapers, it is another knock on what we would like to have as the true system of free local press.
Free press is abused by both the press and others in many ways. I feel completely at ease here, because outside one distributive paper which contains some editorial comment- and the ads pay for its production and distribution, and there is no annual subscription-other than two city dailies, there are no newspapers distributed in my riding. Therefore, 1 am not arguing on behalf of a particular constituent. Surely, all those in this House who represent rural ridings in particular will want to be at the committee hearings when they start next week or the week after to hear what the tax people and the newspaper association people have to say.
I will conclude my remarks because a number of my colleagues wish to speak, and I am sure there will be other speakers from other parties. I hope the committee will deal with this bill quickly. It must return to the House some time before Easter, and there is a lot of other work to be done, including a companion piece of legislation called the customs tariff which also goes back Anno Domini in its origin, not having been considered by the House for nigh unto three years.


Mr. Bob Rae (Broadview-Greenwood):: Mr. Speaker, because of the fact there has been agreement to move this matter to committee, I do not think it is necessary, particularly on Friday afternoon, that I deliver a lengthy address on the taxation policies of the government, the nature of the government's energy policy or any of the other topics on which a speech could be made. Because of the importance of the measures contained in Bill C-57, however, 1 do wish to give the minister an indication of some of the questions which we will be raising in committee with respect to this bill, questions which would involve officials from this department, representatives at other levels of government and representatives from the industry.
1 will deal first with the non-oil and gas issues and refer the minister to two or three areas which have already been touched upon somewhat by the hon. member for Edmonton West (Mr. Lambert). There is the question of the new definition of newspapers, the impact of the government's plan to tax those newspapers which, in its opinion, have an unduly high advertising content, and the effect it will have on the community newspapers.
I expect the government has had studies performed to determine how many newspapers would be involved and how many have a content of more than 75 per cent advertising. This is a very important factual question. Just how many people and what kind of community publications will be affected? We are also entitled to know whether the tax will have the effect of restricting communications and the ability of smaller businesses and smaller community publications to communicate with a fairly wide public.
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As the minister will know, the definition of advertising is sometimes a tricky one. There are many community newspapers printed in Canada's non-official languages which have a very high advertising content because of the fact many of them include government advertising for government programs. This question is of great concern to me because many multicultural publications have a difficult time surviving.
If the impact of this legislation will be to reduce the quantity of those publications and the ability of the publishers of those publications to make a living, then this must be taken into account. Obviously, the government is concerned with publications which have as their primary or sole concern the publishing of advertisements for various businesses. The government is intent on arriving at a definition which will eliminate these publications from the category of newspapers.
However, as the hon. member for Capilano (Mr. Huntington) called out in the middle of the speech of the hon. member for Edmonton West, "The question is what is a newspaper and what is news". There are instances in many community publications where an ad could be defined as advertising in some context but, in another context, could be considered a very important aspect of the dissemination of information.
Since the minister has now returned to his seat, let me repeat, there is the question of heavy government advertising in many third language publications and the fact that these vehicle communications are terribly important to many communities in our country. I would like some hard factual information from the minister's department as to what forms of publications it hopes to deal with, what precise effect the government's proposal will have on the dissemination of information and the provision, in many cases, of a very useful service, and whether the taxation of this service will help the economy or eliminate an unnecessary loophole which presently exists.
There are many other areas with which one could deal in excise tax legislation. 1 am sure the minister is aware of many small businesses which have complained and lobbied vigorously with respect to the effect of the 9 per cent federal sales tax on cosmetics. I am sure he is also aware of the tax change being put on sales to the retailer trade level. I appreciate the justification from the department that the purpose of this tax is to eliminate tax avoidance arrangements which place Canadian cosmetic manufacturers at a disadvantage compared to importers of cosmetics. I think it is also important for us to realize that while this may be the intention of the department, in eliminating the previous arrangement of sales tax on cosmetics, we will again want to hear representations from the business community to see whether this is, in fact, the effect. We will want to judge for ourselves whether the government's purpose is well served by a measure that we will have put in.
We have also received letters from small independent retailers concerned about the new changes in retail sales tax. Shifting the imposition of the sales tax will have little, if any, effect upon the large retail chains, since they often deal

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directly with the manufacturer, buying in volume. They pay the 9 per cent federal sales tax on the f.o.b plant price, which excludes freight. The small retailer who utilizes the services of a wholesaler ends up paying the federal sales tax not only on the manufacturers' price but also on the freight from the manufactures premises to the wholesaler.
While I understand that the Department of Finance considers this to be a minor inequity and has so far not indicated any change in its policy, we will also want to see the precise effect this has on smaller businesses. We will want to see whether it does have the effect of reducing competition by giving, in a sense, an advantage to larger retailers which is not available to smaller retailers because larger retailers have different buying practices, as of necessity, than smaller retailers. This is the kind of question which I think we will be looking at in committee. I appreciate the opportunity to discuss these things in committee, since they are the kinds of details which I think can best be solved at committee level. They are basically factual questions, as to what the real effect of the changes will be, and can, 1 think be more effectively changed in committee than in the House.
The third general item I wanted to raise with the minister is that, as I am sure he is aware, we have all heard from the Canadian Wine Institute and from the wine industry. We have also heard vigorous representations from the Brewers' Association of Canada about the permanent increases now being built into the taxation of alcohol which may be unfair. This may have the effect of building in prohibitively high increases in the tax on these items. This also seems to me to be a factual question put forward by the Brewers' Association. Something the committee will need to consider is whether the separate indexes for beer, wine and spirits will result in a further distortion of existing relative tax burdens between beer, wine and spirits. Again, the relative impact of these increases seems to me to be an important question to be considered with respect to these industries.
There is one general question about the effect of the over-all excise taxes with which I think we must deal. This matter has been mentioned before by the hon. member for Edmonton West; that is, that the excise tax in general is, of necessity, not a progressive tax. This tax falls heavier, not on the consumer, but on the small businessman. It has a more serious effect on small business as opposed to large business, particularly at a time when we are entering a period of high interest rates and the costs of doing business are so high for the smaller businessman. Something which we will want to look at very hard indeed is the impact these kinds of measures are having on the relative power of small business as compared to large corporations.
It is within the context of the relationship between smaller and larger businesses that I wish to deal with the question of the 8 per cent production tax on petroleum and natural gas. As 1 understand it, the dilemma facing the federal government is this: the federal share of this very significant revenue source is too small. It amounts to roughly 10 per cent of the revenues from oil and natural gas, the other 90 per cent being shared
almost equally between the industry and the provinces. This has been indicated several times in the House and, if I understand the Conservative position correctly, they have indicated this as well. If one looks at the figures over the last ten years dealing with the relative importance of resource revenues on provincial revenues, he will notice that there is no category of revenue which compares to natural resources in terms of increase.
There has been a tenfold increase in the revenues from oil and natural gas over the last ten years. There is no other industry where this has occurred; not the steel industry, manufacturing industry or in agriculture. You cannot take any other sector and compare the rise in the value of those goods with the rise in the value of oil and natural gas. Because this resource is a depleting one, and because of the pressure of OPEC price increases, one can predict that the price of oil and natural gas will increase dramatically. The federal government has obviously taken the view that if it does not now act quickly, to increase the federal share of that rapidly increasing resource revenue, not only will its fiscal position be threatened but the fiscal imbalance between the federal and provincial governments will simply be increased.
Again, if I understand the federal government's position, it has two or three choices. It could have done what the Conservatives did, which was to impose an excise tax on the sale of gas at the pump. The second thing it could have done was deal with the problem of its tax share through the income tax system. The third thing it could have done, and which it has done, is impose a tax, basically a kind of royalty, at source-a production tax. Obviously, for political reasons, the government could not take the first route, having denounced the Conservatives for introducing an 18-cent excise tax.


John Leslie Evans: Who else denounced that tax?


Bob Rae: The hon. member for Ottawa Centre (Mr. Evans) asks who else denounced the tax. I also denounced it. I remember my speech very well and I do not regret having made it.


John Leslie Evans: Keep the record clear.


Bob Rae: I want to say to the hon. member for Ottawa Centre that, having rejected that kind of excise tax, I do not see how the federal government can now turn to another kind of excise tax and think it has done anything more progressive. Instead of simply attacking the buyer at the pump it has attacked the buyer at every single level. I do not see anything more progressive in the excise tax, which the government has put forward, than that which the Tory party put forward in its brief period in government.
I was not intending to give a highly partisan speech this afternoon, but the member for Ottawa Centre seems to be moving in that direction, much against my will.


An hon. Member:: Much against your nature!
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Bob Rae: I was not going to say nature, but I am happy to give that kind of a speech. I would rather deal with some purely factual questions in respect of the effect which this excise tax is going to have.
1 come back to my three choices. As I understand it, the second course, the income tax route, which the government could have taken, was rejected. I would imagine it was rejected because in the government's view corporations could have found a way to reduce their tax burden through their own internal accounting procedures, rapid depreciation and so forth.
Since the first choice was ruled out for political reasons, let us deal with the choice between the other two; that is, between the income tax route and the royalty route, which the government has taken. The problem with the 8 per cent production route-a question about which we will want to examine Department of Finance and Department of Energy officials very closely-is that it affects all producers equally even though all producers are not equal, either in size, in origin or in terms of whether they are genuinely independent Canadian companies. But it is the differential impact of the 8 per cent increase which has caused the most concern. Obviously the other problem is that the 8 per cent royalty affects the petroleum industry in some provinces more than it does in others, and in that way it affects the resource revenue going to those provinces. Which route is best for the federal government? Is it to go the excise tax route, as it has gone, or what I call the royalty route, the 8 per cent tax at source, or is it to go the income tax route? Our preference would be for the government to go the income tax route and build into the income tax system the kinds of distinctions, variations and discrimination which the government wants to carry out. It cannot do this by virtue of the 8 per cent royalty tax because the effect will be the same right across the board with no exceptions. It will have a much harsher effect on smaller companies than it will on larger companies. This is ironic, Mr. Speaker, in view of the declared intention of the government to carry out a policy that will discourage foreign ownership.
In this connection, I would like to hear from the industry and from those people who are aware of what is going on in the industry to find out whether this is really the case. The evidence we have seen so far is that the smaller producers and smaller exploration companies, most of whom are Canadian, are much harder hit than those companies which have achieved a very high degree of vertical integration. I refer to the multinational companies who are in a better position, through their own internal power and by the fact that they carry out not only production but also refining, distribution, merchandising and retailing of oil and natural gas to diversify their own production and increase their power compared to the smaller producers.
This is a purely factual and important question. In my opinion, it should be removed from the purely partisan discussion which we have seen so far. The Minister of Energy, Mines and Resources (Mr. Lalonde) has said that more drilling is going on this year than last year. Members of both my party
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and the Conservative Party, who know what drilling activity is in fact going on in Alberta, British Columbia and Saskatchewan, say that is not the case. They say there is extensive evidence that drillers are leaving the country at a great rate. I have not been in this House very long but it seems to me this is a factual question. It is a question which can be resolved by looking at what drilling activity was carried out last year and what companies' intentions were last year for the next year or two. We know that companies do not do things from month to month but plan for year to year, and we can look at what effect the petroleum and gas revenue tax has on the whole of the industry, whether it really is part and parcel of the Canadianization proposals of the government or whether it contradicts the Canadianization proposals. 1 think this is a genuine problem.
When the government introduced the 8 per cent tax, it did so, as I suggested at the beginning of my remarks, not to further the Canadianization of the industry, not to encourage self-sufficiency but to deal with a third problem, a genuine one, one which is recognized by all members of the House; that is, the federal government has to get a greater revenue share of a resource which is rapidly depleting. The current revenuesharing arrangements are the source of what the Leader of the Opposition (Mr. Clark) quite correctly describes as a severe fiscal imbalance within confederation. I hope the minister will recognize, in attempting to carry that out, and avoiding the income tax route for the reasons I have described-I am not sure those reasons are prohibitive but they obviously weighed heavily on the government's mind-that it is possible, it will have the effect of not increasing Canadianization of the industry but decreasing it. That tax and its effect will fall more heavily on smaller companies simply engaged in the production of oil and gas. These companies do not do anything else. They do not refine, distribute or retail. This will have a lesser net impact on the cash flow of the larger multinationals. If the name of the game is cash flow, and we are told all the time by those in the industry that is the name of the game and the nature of the problem. Then that is a purely factual question which has to be answered.
The other source of concern, expressed by a number of producing provinces, is that this is a form of taxation which directly conflicts and cuts into their source of taxation. Some members who come from non-producing provinces say, "Well, they have lots of oil and gas anyway." But if you are living in Alberta, British Columbia or Saskatchewan and see the federal government unilaterally, if you will, occupy part of a field- not the whole field-which up to that time had been occupied by a provincial government, you will clearly know the dramatic effects this will have on that provincial government's future budgetary and financial management plans.
I do not know who is right in terms of figures, Mr. Speaker. I do not know whether the Department of Energy, Mines and Resources or the Department of Finance is right when they say the reduction in the provincial share will be two percentage points, or whether the spokesmen for the governments of Saskatchewan, Alberta and British Columbia are correct when

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they say a reduction in the provincial share and the relationship between the provincial, federal and producers share will be changed far more dramatically by this than the Minister of Finance (Mr, MacEachen) has suggested in the national energy policy released on budget night. I do not know the answer to that question, but I do know there are conflicting stories and conflicting figures. I say to the minister that the effect will be significantly different from that set out in his budget.
There will be a reduction in the ability of certain provinces to provide for their future. The relationship between the federal and provincial governments will be affected because of a serious difference as to what the impact of their share will be. This clearly has to be resolved in committee.
Our party would have preferred an income tax measure which would allow the government to discriminate between Canadian and non-Canadian companies as they said they intend to do in order to increase Canadianization. We would have preferred to see the federal government deal with the problem of excess royalties at the provincial level in a more imaginative way than has been evidenced so far.
After suggestions from our party and the official opposition last week, the minister agreed to establish a committee. We do not know whether that committee will deal with the very large provincial surpluses and how capital surpluses can be recycled. That is a fundamental question which the minister did not deal with in his budget.
I come back to one point. The 8 per cent tax the government has put on is an excise tax, just as the 18-cent tax was an excise tax. On the night of the Crosbie budget, the present Minister of Industry, Trade and Commerce (Mr. Gray) expressed concern about the effect of an excise tax on Canadians. It fell equally on those able to pay and those less able to pay.
It increased the costs for workers who have to drive, through no fault of their own, 20 miles to work rather than use public transportation. That creates inequality. That is what is wrong with relying too heavily on the excise tax system for government revenues. There are certain problems inherent in it.
At the time of the Crosbie budget, we suggested the way to get around that was with a cost of living tax credit. The Crosbie budget included an energy tax credit, as the hon. member for St. John's West (Mr. Crosbie) does not hesitate to remind us every time he gets up on his feet. The effect of the energy tax credit put forward by the Conservatives was miniscule because it was going to be delayed. Its introduction was to be phased in so the over-all impact would not have been felt for some two years. It would have in no way compensated for the price increases and the excise tax proposed in the Crosbie budget. It was clearly stated in the projections.
We know what the effects of the energy price increases will be. They will be even more serious if the government reaches an energy agreement with the producing provinces. We know what the impact will be of further OPEC price increases.
Energy costs will rise substantially. Contrary to the position taken by the Minister of Industry, Trade and Commerce, the government has consistently taken the position that it will not recycle its surplus from the production of oil and gas in the form of an energy tax credit.
If I understand correctly, the surplus will be essentially used on what the minister calls the supply side. The government will use it for the economic development envelope. I simply say with regard to the supply side and the demand side that you have to walk on both legs.
The differential impact as a result of oil price increases which are part of the government's budget will have a strong impact on lower-income people. The effects will be felt in a discriminatory way by people who through no fault of their own have a low income and must pay high energy costs. If this is allowed to continue, the government is betraying the fundamental image it presented to the Canadian public at the time of the Crosbie budget. The government is saying let bygones be bygones and look to the future. It is not going to recycle this money in the form of a cost of living tax credit, energy tax credit or whatever it might be called. The principle is the same.
The government is limiting its ability to provide a greater degree of fairness. It is limiting its ability to provide the growth in the economy which will be necessary so that Canadians can buy the capital and consumer goods on which the minister is concentrating all his efforts in the economic development envelope.
I realize the policy options we are putting forward have been rejected by the government. The minister will not stand up on this Friday afternoon and say that he will change the policy because he has decided to recognize the wisdom of the opposition. However, I say to the minister that there is a fundamental contradiction in what the government has done. It rejected the Crosbie budget because it provided for an excise tax. However, it has put on an excise tax which will have a much more serious effect on consumers, provincial revenues and the relationship between the federal and provincial governments than the Crosbie budget.
The government has refused to introduce a cost-of-living tax credit which would recycle some of the surpluses that have accrued in order to provide some equity between the supply side and demand side, the social policy envelope and the economic policy envelope. For those reasons I believe the government is missing an opportunity. Rather than being the source of federal-provincial conflict, it could produce a greater degree of unanimity. As I said on other occasions, we cannot go into every budget facing a constitutional crisis. We cannot go into every economic decision with such tremendous hostility between the producing and the consuming provinces. An agreement between the producing and consuming provinces and the federal government is essential for the future of this country.
The federal government must show leadership and concern for the consuming provinces and the consumers of Canada. Energy costs have been rising. It is not only the cost of gas, but
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heating oil and gas for the home. The government must use some of its surplus to help those who are so badly affected by these rising costs. I think then the consumers of Canada would say, "All right, if the government is prepared to exercise some leadership in this direction, we are prepared to go that extra bit and try to Find an agreement with the producing provinces". But, as long as the government is determined to suck up whatever surplus there is, to go into provincial Fields and to take up that surplus and run with it and not to put it to the use that the consumers of the country can see is good, then it is simply pitting consumer against producer in what is really an unfruitful and ultimately a very destructive course of action for the country.
This question of the sharing of oil and gas revenues is, in my opinion, one of the fundamental problems facing the country. The fact that we do not have an agreement is something which is clearly preventing the kind of investment, the kind of understanding and the kind of growth which would help a great deal in resolving not only our energy problems but also our constitutional and economic problems as well.
The government has decided not to take a course of action which would allow it to show leadership where leadership has to be shown and to take its share of responsibility and say to the oil companies that they do not need to take anymore. As the hon. member for Vancouver-Kingsway (Mr. Waddell) has pointed out on many occasions, the key to the solution, is not cutting back on the public ownership of the largest multinationalists but by increasing the public ownership of the largest multinationals. The contradictory effect of the policies put forward by the government would be to increase the power of the multinationals and not nationalize, and that includes all of them except for one which has just been nationalized. In that way the power of all the others will be increased, the power of the Canadian independents will be decreased and the consumer will continue to regard any price increases as simply going into the coffers of the multinational oil companies. Rather than deal with that fundamental question and also the question of Canadianization, the federal government has chosen to follow certain policies. This is a difficult mix to get right, and I am not condemning the government for having failed to get it right, but in our view they have failed to do so and in failing they have missed an opportunity which may never come again.
As the stakes become higher, as the value of the resource becomes higher, and as the price of the resource gets higher, the cost of Finding a solution also increases. In the government's failure to find a solution, just as the Tories' failure to find a solution in their budget, it is costing all Canadians very dearly indeed.


Arthur Ronald Huntington: Mr. Speaker, I thank my colleagues for giving me the privilege of speaking on Bill C-57 which I consider to be one of the most confusing bills for the small and medium-size enterprise sector in Canada we have seen for a long time. I also appreciated the Minister of Finance (Mr. MacEachen) coming over to advise me that he had to
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catch a plane for Halifax and therefore could not be present in this House for the few comments I have to offer.
I am very surprised that the Minister of Industry, Trade and Commerce (Mr. Gray) is not here, and even more surprised that the Minister of State for Small Businesses (Mr. Lapointe) is not here in light of the tremendous mail load and communication load which I am sure most members have had from the business community in their constituencies. All the work done by the small business secretariat in paper burden removal and in trying to address the regulatory burden of the small business community has been wiped out in this bill.
This bill has given us a very sloppy and carelessly worded piece of legislation which has left confusion, not only in the business community, but confusion in the minds of the civil servants in Canada seeking clarification as to its intent.
Section 29.3 is an example of bureaucrats, which we need in this type of society, writing regulations and legislation for an area of activity in our communities they know nothing about. Perhaps they are concerned about a Supreme Court decision made sometime in the past which gave us a ruling that allowed advertising to be classed as being part of a newspaper and therefore not taxable. Ever since then they have been trying to find a way to increase the level of taxation as far as sales tax on that factor of advertising.
In presenting Section 29.3 in the amendments which the Minister of Finance has in this legislation, they are not asking themselves the basic question, "What is news"? When considering the answer to that question you are dealing with the heart of the free press. When I was agreeing with my colleague from Edmonton West (Mr. Lambert) I noticed the Minister of Finance shaking his head, saying I was wrong. I hope somebody will explain the apparent lack of understanding of that key issue because that is what they are doing. They are putting in legislation without addressing answers to key fundamental questions like that. What is advertising content? Who in the design phases of this legislation answered that question, so that there could be clarity given to the community at large?
There is the 75 per cent advertising formula, and the bill sets a threshold of 50 per cent of the issues. We have the pre-Christmas season when there is heavy advertising and we have the First quarter of the year when there is low advertising content. We need some kind of an average. This threshold goes along for three months and then an audit is done, all the bookkeeping has to be changed and the lineage count revised. This is an additional burden put on the community. If you do not meet the threshold for the quarter your penalty in terms of tax is retroactive for that quarter. How can anyone responsible for the delivery of payrolls, for solvency at the bank and for looking after the demands of organized labour manage to stay solvent as an economic unit with this type of burden added?
I do not think it is right for the hon. member opposite to stand behind the curtain and laugh at this. He obviously does not know, feel or care a tinker's darn about the concerns of people who are adding to the value of goods, creating meaningful payrolls, and paying income and sales tax. What is so

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funny about it? Go out there and earn your living. Be responsible for delivery of payroll and you will not find it a bit funny.


Some hon. Members:: Hear, hear!


Arthur Ronald Huntington: What this type of legislation does is deliver us more and more of the control to the centre. We do not allow the boardrooms and owners of the nation any decision-making basis at all, so that decisions can be made in respect of the large and diverse activities of the nation. They have to come crawling in for grants. This will bring an avalanche of requests from the newspaper industry, and it will bring an avalanche of requests for specific rulings to clear up all of the problems in the regulations in this one area.
The hon. member for Edmonton West said that his riding was only serviced by two major dailies. We have two major dailies in my riding but we also have a very hard hitting and very talented weekly newspaper with a Sunday issue, so they are bi-weekly.
That organization has some 700 housewives and school students out delivering that community newspaper on Wednesdays and Sundays. In that community newspaper are fliers from building supply houses, chain stores and grocery stores. These are printed by different presses, the operators of which are trying to eke out a living. The presses are trying to meet good payroll standards throughout the community. That total distribution operation and that bi-weekly operation grew from a mimeographing service within the riding. That very fundamental operation has a solid payroll and a good balance sheet, but it is threatened by this type of legislation, which totally discriminates against it. How can such operations compete? How can the different presses in the community compete when the regulations now give the total cost leverage advantage to Pacific Press, which prints both the Vancouver Sun and the Vancouver Province?
The Liberals, along with their NDP cohorts, continue to label the Progressive Conservative Party of Canada as the party of the multinationals. Let me reply to that by saying that this legislation attacks the small and medium enterprise sector of Canada as nothing I have seen in this House in the last six years attacks it. This delivers unfair advantage to the Thompson and Southam chains. What backroom deal did hon. members opposite make with them to bring in a piece of legislation like this which puts an oppressive cost structure on all weekly and community papers across the land? It is just not fair. There is no equity. There is no fair sharing principle. It does not promote the just society hon. members opposite keep referring to in their rhetoric. Their deeds and their legislation are completely contrary to the principle of fairness.
There is a small business secretariat. There is a Minister of State for Small Businesses, but the small business secretariat is really just a political tool which is totally misused. Sixty-five per cent of the meaningful work created in Canada is created by the small and medium-enterprise sector which, on an individual basis, does less than $20 million a year in sales.
This place just does not represent that community which is not organized and does not have economic clout or economic leverage. I plead with hon. members on the government side to consider these small enterprises which create payrolls. It is true that some of them are marginal payrolls, but if small enterprises could be provided with all the benefits of the big monopolies, they would be monopolies themselves. As it is, some of them grow into very successful enterprises.
This piece of legislation is obviously the result of lobbying by the Thompson and Southam chains. It is obviously the result of the lobby of the Canadian postal service. That service, incidentally, wants to deliver all the mails and wants to change the definition of the word "letter" so that it will include all the electronic media. That service also wants a total monopoly over all communications, and the next thing it will go after will be talk. The government included that in its bill and it took a lot of work in committee to get it to recognize the folly of it. The Post Office is subsidized massively, to the tune of some $500 million or more a year, and now it wants to corral the distribution of advertising and fliers and everything else. At least community newspapers get to the doorsteps at present. There is no guarantee that they will get to the doorsteps through the Post Office, at least on time. Quite often advertised sale is over before the flier arrives through the Post Office. When we get to committee I will plead with hon. members opposite to be prepared to change their minds on that aspect, because the existence of all those independent newspapers is at stake.
With respect to this same issue, it is interesting that a very successful and productive printing enterprise in Vancouver, recently bought out by Southam, now finds itself in the deplorable position of losing all its flier and printing business. It is losing that business even to the Americans. The American multinational accounts in Canada can produce overruns in the United States, pay the sales tax on entry and have a delivered cost less than that of the printing industry in Canada.
When I criticize bureaucrats for creating confused legislation, believe me, there is some justification for it. We have to be out in that rough and tumble world of work to understand the downsides, the triggers and the traps which exist in this type of operation.
I have here a package of regulations with respect to different aspects of this legislation which officials are trying to draft. When I pick up the telephone and talk to departmental officials, they just cringe. They say, "We don't know". That is one aspect about which I feel very strongly, and I hope the government will think seriously about it as we approach discussion at committee stage.
I wish to discuss another inequity. I listened attentively to the Minister of Finance when he was talking about this legislation delivering solutions to anomalies, about different tax levels and about the avoidance which is taking place. Believe me, there is no tax avoidance going on out in the legitimate business world. Businesses do not wildly pay taxes. They hire lawyers and chartered accountants to advise them of the threshold at which they must pay tax. The tax department
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knows, encourages and puts that game in place. It is a very expensive exercise today to keep from moving into a retroactive tax position because of the lack of clarity in much of the law. I keep saying, please give us back the decision-making base which the government removed in 1972 in the tax legislation produced by the coalition NDP-Liberal government.
We have been slipping. In question period today the Minister of Finance talked about productivity being the key. I am glad he understands that because productivity is the key. It is the key to maintaining our quality of life; it is the key to licking inflation; it is the key to being able to service the world at large and to service the Third World more effectively. The gross national product can only be increased through productivity. However, what oppresses productivity is the complicated nature of the rules under which the wealth-creating sector must operate.
Listen to the howls on this: why tax profits? Profits are a new national resource. Profit is new working capital. The more profits generated in this country, the less we have to borrow abroad. The more profits we create, the bigger the tax revenue because that is what we have been taxing. Let us not tax profits. Let us create that wealth, that Canadian capital, and move to a tax on net cost of value added. This 9 per cent tax is tinker toy stuff, and as long as we have it in the system, that system will get worse and worse and more and more confused.
1 think the Minister of Finance was misleading us when he gave credit to a government member for the reduction in tax from 12 per cent to 9 per cent. That is fantastic, but now what is the government doing with this legislation? It is moving the threshold of the tax up another notch and including all the partial manufacturers. I think this is a good move because if we assume value for duty on imported merchandise, which the minister thinks he is addressing with this tax, at 100 per cent of base and use 100 as the base, under the old tax-let us say the pre-January, 1981 base-when there was a 10 per cent duty factor and a 9 per cent federal tax, there was a multiplier of 155. In other words, if the world price was $1, the landed Canadian price would be $1.55. If there was a 17.5 per cent duty rate, it would be 164.5 or $1.64. Under the new budget by moving the threshold up to include the partial manufacturers, 155 becomes 143, so there is now a factor of 1.43, not 1.55.
I am using figures which come from an average of about 930 imported items. With the 17.5 per cent in the duty column, instead of the factor being 1.645 it is now 1.52. So the multiplier of the partial manufacturer has come down.
Let me also put this on the record. When you have a manufacturer's sales tax at the manufacturing level, there is a tremendous multiplier effect on the cost of consumer goods. An item which has the federal sales tax applied at the manufacturing level and which costs $5.50, to round off $5.49, would cost $5 at the retail level if the federal sales tax were not put on it.
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Once again I say that if the aim is to make the country more productive, which the Minister of Finance recognizes as being the key factor in addressing most of the nation's problems, then let him move to the adoption of a net cost value added tax so that the value added at each stage is taxed, and any value added tax which was in any component of the cost can be subtracted in order to get a net value added tax. This would turn the whole matter of production back to the managers. As a result, they would not be buying big cars, putting extra facades on buildings, buying expensive furniture, or travelling first class unnecessarily, and thus building up all these allowable expenses which are charged against profits. The government would be taxing all the waste which exists in the community. Let the government start taxing waste in this land and let it leave profits as an incentive and a new form of wealth, and then let us watch this country grow.
I have another pet theory which should be considered in parallel. We are always looking for answers. I say: let the government get rid of the federal sales tax, which is nothing but inflationary, nothing but a drag and a charge against the payroll package of the work-force in Canada, and let it collect the cost of all social programs from an end-user tax. All of a sudden we will find that the country has turned into one of the most efficient industrialized nations in the world because each and every person will be able to measure what they are demanding of the government in terms of their own wallet or purse.
I do not see any resolution of our problems until we get right back to the basic philosophy of taxation and clean up all these artificial impediments which we have built into our system. I make this appeal once again most sincerely and most constructively.
There is another anomaly in our system which I find very serious. We have just enlarged the threshold and embraced partial manufacturing in the sales tax sector. The words of the Minister of Finance are in Hansard. While he thinks he is making the system more equitable, he is really just reacting to a self-centred lobby, and I know something about that because I lobbied before I came into politics. What has the minister done about the inequities in the definition of small manufacturers? Genstar has ready-mix concrete plants, and is doing a couple of billion dollars in business. It is a Canadian company whose president and senior executives operate out of San Francisco and which owns massive horizontally and vertically integrated subdivisions, using their own concrete products, their own building supply yards, and everything else. It is a beautifully run organization which is getting bigger and bigger. However, in terms of its ready-mix concrete operations, it is classified as a small manufacturer.
Next door to Genstar, or in the same vicinity, within a half mile, there is another organization doing $2 million in sales, which had the idea of buying cement, sand, gravel and different compounds, mixing them together and having the dry product packed for sale. If on a Saturday or on a Sunday I wanted to build a little form for something, I could buy a few bags of this ready-mix, add water to it and pour it in, and I

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would feel that I was pretty good at doing something with my own hands. Now the second company has to pay sales tax on the selling price of its product. The smaller company gets the sand, gravel and cement on a tax-exempt basis and has to pay the federal sales tax only on the selling price of the finished bag. The large company, which adds water to the same stuff pays the sales tax on the cost of the cement only, and does not pay it on the sand, the gravel, the administration and the profit. The small company is doing its best, is a good employer, employs good engineers and builds a beautiful little business which is doing $2 million in sales. Genstar is doing $2 billion in sales because it is a ready-mix manufacturer operating under the definition of a small manufacturer, and it pays the sales tax only on the cement. I am told that it does not have to collect the federal sales tax on the selling price of their dry products. It sells their product at 5 per cent below the lowest price the other company can ask.
Let me tell the government that when it brings in legislation with definitions such as the definition for small manufacturer or marginal manufacturer when it causes this type of confusion, it pretty well destroys any chance of improving the productivity of the industrial sector in Canada. What we need in Canada is more manufacturing, because if you move from a primary industry like mining or agriculture into secondary manufacturing where you have the value add, you get a far better multiplier factor in the economic community at large. However, somehow or other we do not think of that in terms of our taxation legislation. We work against ourselves, and then wonder why we are slipping from a very enviable situation in comparison to other industrialized nations, slipping down past all of them to end up in the garbage can.
There is not a nation in the world which that has been as blessed as we are with our hydro and mineral potential, with our nuclear potential in terms of peaceful uses, and with our natural resources. Everything the federal bureaucracy does suppresses the magic of adding to the value of goods and adding to the wealth of the country.
These games played with definitions should, I think, be of serious concern to all of us. I plead with the Minister of Finance, who is not present in the House now, to rid himself of the attitude that it is tax avoidance. It is not. There is no tax avoidance going on in the legitimate business sector. It cannot risk it, it cannot afford it, it does not want it, but there are all kinds of grey areas, so let us clean them up.
Now I should like to move to another small problem which I have been made aware of relating to Clause 4.4 of the bill, and that is the matter of marginal manufacturing. A small company started with one store and a couple of partners. They worked very hard, their wives were involved in the business, and they found the right combination. The company started to grow. The next thing you know, they had a second store, a third store and a fourth store. Then they started to buy Canadian-made products, and rather than go to a packager, they decided to instal their own packaging room and some equipment. They assembled and packaged their products and sent them out to their four stores. Under the new regulations
they can do that and can buy on a federal tax paid basis, provided the product is only used in the store in which it is packaged. They have four other stores, so they must collect the federal sales tax, if they continue this operation, at the retail price. On one Canadian-made product they were paying about 24.9 cents in the way of tax; now they have to pay 47 cents. I could give chapter and verse on a series of products from both American and Canadian manufacturers which causes them anxiety. It is no longer worth having four or five people at work in a packaging room when they own more than one store.
For example, they used to buy large spools of rope. They used to eye splice, cut them off and sell them to length. Now that is partial manufacturing; it is cheaper to have it done either in the United States or elsewhere and purchase it already cut than retaining the four or five jobs in the organization which, by the way, kept people employed year-round even though it was a seasonal activity. It is all disturbed and distorted within the system.
The waste rag business is also affected, because it has such a high degree of unusable products in its operations. I am talking about successful companies, good tax-paying companies, with good payrolls and with 20 or 30 employees. They now find it is hardly worth the effort to stay in the game. They can buy bailed rags from the United States and bring them into Canada. In that way they can stay in the marketplace, whereas if they continue to run their own operations, they are not competitive.
When we design these things, it is important that the Minister of State for Small Businesses be given some muscle and some power rather than just be a political label. He should be instructed to have conference after conference with the different sectors involved so that the correct answers can be found.
I have already given the House what I think is the answer. The net cost value add tax system would turn the country back to the managers. It would eliminate, almost overnight, all the waste in the industrial sector. Hon. members know how conscious I have been of waste in the government sector. The waste in the government sector is nothing compared to the waste which exists at large in this land and out in the business sector because of the basic taxation system.
I should like to return to the remarks made by the Deputy Prime Minister and Minister of Finance during question period this morning. He said that the issue is our national productivity. We will never resolve that issue, as long as our present taxation system remains in place and as long as the government brings down confusing legislation, such as Bill C-57.
I have dealt with the small business sector. I could go on to the things we do to ourselves in terms of tariffs. For example, another small enterprise in my constituency is concerned about clean air for industrial and grain workers. There are many grain elevators in my constituency. This company has designed a beautiful little pack which goes on one's back. It has an air
February 13, 1981

hose and a mask, and the person wearing it can have forced, clean, filtered air. It requires a little motor with a peculiar little fan. It is a DC portable motor, and it must be brought in from outside. Through its stupid, idiotic definitions in terms of tariff items, the government forces the company to pay an excise duty and federal sales tax on the motor as it comes in, when they should be paying federal sales tax on the whole thing. They should be able to buy that motor and fan duty and tax free, so that the product can remain of Canadian manufacture. Because of the way that tariff item reads now, they should go down to the United States to have that item manufactured, then bring it into the country on a fully-finished basis. The things we do to ourselves, which affect people who have not had the background experience of the rough and tumble of the work world, are totally negative.
Another tariff item that troubles people is the peculiar light dentists use when they are examining mouths. If it is attached to a dental chair, it comes into the country duty free. If it is unattached, the dentists must pay duty on it. Why? They can buy the light, send it to Italy to be attached to a chair, and then it can be brought in duty free. But, if they want to buy the light and attach it to something made in Canada, they must pay duty on it. I could refer to example after example of negative traps and tricks which interfere with the Canadian value add.
I realize time is precious and one of my colleagues wants to say a few words. In conclusion, I should like to indicate that our very complex tax act is interfering with the productivity we so desperately need in the country. We need to return to a simple tax act. We need to return to an incentive system where the minds and brains of people are sparked and given a vitamin shot. We need to return the decision-making base to the managers and boardrooms of the country instead of leaving it in the halls of the big buildings in Ottawa. We should not tax profits; we should tax net value add, which I will explain in another speech some time. That would allow us to manage and to tax costs and would wring out the waste in the land. We should be given legislation which defines the behaviour expected of the business community. We should not structure the business community because that adds burden upon burden and confusion upon confusion for the creative sector. We should think about bringing in legislation which provides employee ownership plans, the same kind of tax haven which has been given in retirement savings plans. Then we should spread the ownership of the industry in the private, small and medium-enterprise sectors, and the ownership of larger corporations among the employees under some kind of a tax-exempt plan.
For goodness' sake, we should take the power to give research and development grants away from the bureaucracy. We should strengthen research in the universities so that we will have qualified people to send out to fill the positions and the need in our industries. We should include an incremental incentive for the spending of research dollars in the industry; then we could resolve the research and development dilemma in the country.
Excise Tax
I have debated this issue for hours in previous Parliaments. For goodness sake, let hon. members hear that debate and share the decision-making base. We talk about sharing. The decision-making base should be shared among the people taking the risk, not in the halls where people say, "That tax point is ours; we can spend it more wisely than you can, dummy." That is not the proper attitude, it is not the way to resolve the problems in the land.
I will sit down now, and I hope the hon. member for Medicine Hat (Mr. Hargrave) might be recognized next.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, I apologize to the hon. member for Capilano (Mr. Huntington). 1 think he will realize it was a great tragedy for Canada and the people of the country that he did not have an opportunity, as minister responsible for small business, to bring this type of philosophy into the tax laws of this nation.

My remarks will be brief in order to allow the hon. member for Medicine Hat (Mr. Hargrave) to have the floor. On this particular occasion I will only deal with a part of this bill primarily because it is an example of where the government has changed its mind and has done something as the result of advice from Members of Parliament. 1 would like to see that attitude continue in committee.
I am talking about a very historic matter in Canadian political history. According to this excise tax legislation, it is now legal to have an alcoholic still. If anyone knows the history of alcohol in this country, what I have just said immediately becomes significant. This question of the overconsumption of alcohol for drinking purposes runs through our political history. Because of the tremendous concern over this problem, we have put the damper on individuals owning their own alcoholic still.
Alcoholic distillation is an ancient process which many people have used to reproduce the waste of the products in the country around them for many purposes in addition to drinking. There is a little section on definitions in this bill. What the government has done to remove the great penalties found in the existing legislation is to call alcohol, "denatured spirits", rather than call it "denatured alcohol".
Canadians will soon realize that they have finally received some freedom. As long as they remember to call the product "denatured spirits" they will not be stepping on the toes of the police. Over the years many hon. members have tried to point out that there is more wealth in the waste in our system than there is in the product. I have mentioned this point in the House so many times that the nickname I was given when I first came here was Johnny Appleseed, because I kept trying to say that there is more money in trees than in grass.


Arthur Ronald Huntington: Oh, no, there isn't.

February 13, 1981
Excise Tax


Francis Alvin George Hamilton: I am not
talking about the type of grass to which the hon. member is referring; I am referring to cereal grains. The question of the utilization of waste is very important to the economics of Canada. Half of our fishing production is waste. A large proportion of our agricultural production is waste. Sixty per cent of our forestry production is waste. This is all because we are not using the knowledge which is there, to utilize this for waste in the interests of the people and the country.
Alcoholic stills might seem like a small item, but experts calculate that with the privilege of having stills and using the waste of the farm, fishery and other industries-even the housewife could use it if she wants-we could produce 3 per cent to 5 per cent of the total energy needs of this nation, which run into billions of dollars. I congratulate the Minister of Finance (Mr. MacEachen) whom I accused in one of my earlier speeches of having zigged when he should have zagged. In this case he did zig when he should have zigged!
This change was in the Crosbie budget. It also included a tax deduction for people who paid wages to their spouses; a proposal that the cost of renewable energy hardware could be written-off in two years and a proposal for Small Business Development Bonds which would have cut interest rates just about in half. I could mention a couple of other points, but I am talking about stills. As long as the producer is careful to call the product spirits instead of alcohol, this legislation will get him off the hook and allow him to own a still. I have not seen too many headlines on this matter, but it makes the farmers dance in their yards.
Instead of brewing their alcohol out in the bush or in the bluffs, they can now brew it in their home, pay the wife to watch it-which is tax deductible-and produce $4,000 to $5,000 worth of alcohol. That was the intent of the Crosbie budget. This legislation, however, has a limitation, which is that these spirits can only be used for experimental purposes and only for fuel by the individual.
It will cost between $6,000 and $10,000 to build an efficient still to handle such waste products as frozen grains, certain vegetables and the list of 60 or 70 plants which can be put through a still to make spirits. I suggest to the government that it broaden these regulations and add a clause to allow the farmer or individual who owns the still-in addition to using the spirit for his tractor, car, or truck, keeping the motor clean and preventing wear and tear-to sell his legitimate surplus to a legitimate gasoline station, even Petro-Canada. The oil company which buys this surplus spirit would be able to sell it to customers along the highway. If gasohol is sold with a 10 per cent to 20 per cent mix and the price remains the same, many car operators will use it exclusively because it enables the car to run two to three times longer. Instead of disposing of the car at 75,000 or 100,000 miles, it will now run for 200,000 miles or 300,000 miles.
If an amendment is introduced which will allow that individual who owns this still to sell his surplus, which will be controlled through licence and checked by the R.CMP, to a legitimate gasoline filling station, which will keep records of
what is received and what is sold, then the operation will be economical for the farmer and will warrant the price of from $6,000 to $10,000 for a still. A still operator must put through a certain amount of volume to make it pay, because the price of alcohol is only $2 to $3 per gallon.
Beside the economic advantages of allowing the individual to sell a surplus up to a certain amount, say 2,500 gallons, which would cover the great majority I am sure, then the farmer will produce 3 per cent to 5 per cent of our total energy requirement from a renewable resource, namely, waste. The product will add to the life of the motors of the cars and, socially, it will stop the bootlegging. The farmer cannot be expected to throw away his surplus spirits. Since we are dealing with denatured alcohol which cannot be consumed, the farmer will give it to his friends, or, in some cases, peddle it, under the table. This will mean the continuation of what has been going on for the past 60 years to 80 years with the Mounted Police patrolling the roads every night, watching for smoke and trying to smell mash.
People live in an atmosphere of expecting that sooner or later they will be going to jail. Since the government has gone so far as to say the producer can use it for his own use, it should now make it legitimate by saying he can sell his surplus to a legitimate filling station operator. This is the case in 36 states of the United States. With our farmers living just across the road from American farmers who have these opportunities,
I think it is important that we match them. This would not reduce or increase the revenue to the tax collector at all. It would solve a social problem, produce new wealth, fight inflation and make the cars and engines last longer. I think it is a measure which could easily be put in place.
I would now like to talk about the human aspect of this measure. The place where it would do the most good is in the areas of Canada where it is also most needed. I think of Cape Breton where the minister comes from. If there is any part of the world which needs more money it is Cape Breton. The opportunity is available to them, with their fish and farm combination, to make an extra $5,000 a year very easily, working along with their present jobs, utilizing waste, serving their country and making the engines of the district last longer.
I am also reminded of the vast regions of Quebec which are away from cities, northern Ontario, the prairies, B.C., even the Yukon and Northwest Territories. It would be possible to utilize waste in those areas by making this spirit still available up to economic levels where farmers could use it without abusing it. I think the limit should be set at 2,500 gallons, which I know was the figure to be used in the regulations under the previous administration. By using a simple device like this the worry would be taken off the RCMP, the farmer could sleep at night without worrying and, above all, we could make use of the wealth of this nation in a very constructive way.
February 13, 1981

I will conclude by congratulating the minister for accepting this proposal from the Crosbie budget. He should go whole hog and take advantage of the work that the Department of Agriculture has done, not only through the speeches of the minister but in the pamphlets which have been prepared to explain the operation of a still, its dangers and its good points. This information should be sent out to several hundred thousand people who live on the land, who work in the bush, who are on the farms and beside the sea. It would take a year or so to put a still of the size I am talking about into operation. More progress could be achieved by broadening the legislation in the way I suggest.
I would like to thank the House, Mr. Speaker, for letting me take this time to talk about such an historic occasion-when stills finally became legal in our country.


Walter David Baker: Mr. Speaker, I rise on a point of order. There was a House order indicating that this business would end at 3.45 today. I want to tell the government House leader that we do not intend to call a vote with respect to this matter. If that is the case, and if everyone is willing, perhaps we could continue the debate until four o'clock.


Mr. Knowles:: We will agree to that, Mr. Speaker. We may call "on division" but we will not force a recorded vote.


Mr. Pinard:: We agree with that proposal, Mr. Speaker.


The Acting Speaker (Mr. Blaker):: It is understood, then, that the debate will continue until four o'clock, at which time I will put the question but there will not be a recorded division.


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I would first of all like to express my thanks to the government House leader and to our own House leader, not only for the 15 minutes which we will gain but for the successful negotiating which was done to permit-


Stanley Howard Knowles: Are you not going to thank me, too?


Herbert Thomas (Bert) Hargrave: Of course. I also thank the hon. member for Winnipeg North Centre (Mr. Knowles). I do so not only for the time allowed me to participate in this debate but for arranging that this subject be referred to the standing committee. To me that is very important.
I would like to begin my remarks by saying that I consider this legislation the most significant of all legislation necessary to implement the National Energy Program launched by the October 28 budget. I say that because it offends and contradicts the very roots and fundamental concepts of Alberta and Saskatchewan's entry into confederation in 1905 and the subsequent transfer of our natural resources in 1930.
My remarks will deal almost entirely with the implications of this bill on our natural gas resources and the total natural gas industry. These remarks will also be appropriate for the companion tax provisions, that is, the petroleum and gas revenue tax or the 8 per cent wellhead tax.
Excise Tax
Natural gas in Alberta, especially in southern Alberta, is very much a part of our heritage. It is part of our history from our very beginning. Natural gas is inextricably a part of our survival of the drought and depression of the 1930s and the ten year adjustment period following. That 20-year period of our history was, in reality, a lost generation and the memories and scars are still evident. Our natural gas history began about 100 years ago when the first gas wells were drilled in the communities of Medicine Hat, Alderson and Bow Island. They were drilled by a Mr. J. A. Grant, who came out west from Sarnia, Ontario.
After that early beginning, Medicine Hat quickly developed its own complete utility system for heating, electric power generation and even street lighting. Even in my day, as a schoolboy, I can remember the town's natural gas street lights which were never turned off because gas was so plentiful. In those early days the city regularly flared a gas well at the CPR station to entertain visiting dignitaries, including Rudyard Kipling, who was sufficiently impressed as to observe that surely Medicine Hat had all hell for a basement.
Those early gas wells were drilled with cable tools and walking beam rigs. The drilling derricks were built from 2x12 planking and took months to build. The drilling operations took years, very often with shutdown periods while the owners went off to arrange more money to carry on the operation. I can well remember one such well about 15 miles from our ranch which carried on for years and eventually made a big strike. This caused great enjoyment at first and then total disappointment followed because gas had been struck and not oil. Other than heating a caretaker's shack, that particular well was of no use, since there was no market for the gas. The enormous derrick eventually blew down and was used as firewood by neighbouring farmers. The well burned for several years before it was eventually sealed off by a new conservation authority. All of this took place about 50 years ago, but I can remember it vividly.
I have said that natural gas resources are part of our heritage. The modern-day development of the total natural gas industry began in the late 1930s and throughout the 1940s. Today's enormous gas industry, including gas wells, pipelines, petrochemical plants, compression stations and a vast array of natural gas service industries all began when a former Alberta premier, Ernest C. Manning, now Senator Manning, passed the necessary Alberta legislation to allow the export of natural gas and oil in 1949. That provision was applicable across provincial borders as well as the United States border.
The total natural gas development was a significant factor in the long, slow recovery following the lost generation about which I spoke. This was particularly so in the agricultural sector of southern Alberta. I would say it was at least a partial compensation for those drought years.
I am referring to gas development, of course. For the first time in our history as a province we were able to begin catching up to other parts of the prairies, which do not have

February 13, 1981
Excise Tax
our severe semi-arid climate, and this thanks to the newly developed part of our natural gas heritage.
Today, with this proposed legislation, all of this Alberta natural gas heritage, this Alberta way of life, is severely threatened in two ways; first, as to the constitutional legality as a result of this legislation, and second, as to the very obvious and crippling implications to come on the implementation of this act and the related petroleum and gas revenue tax.
The Alberta Court of Appeal has already heard the submission of the governments of Alberta and Canada on this issue. Its decision has not yet been brought down. Alberta is claiming that the federal government has no right to tax our natural gas for two fundamental reasons. First, Section 125 of the British North America Act says it all in just 15 words. It reads: "No lands or property belonging to Canada or any province shall be liable to taxation." Second, natural resources in Alberta, Saskatchewan and Manitoba were formally and legally transferred from the federal government in 1930 to the prairie provinces. I emphasize most emphatically that this 1930 transfer means that in those provinces we own those natural resources. Surely it takes precedence over the sweetheart deal between the Prime Minister (Mr. Trudeau) and the Leader of the New Democratic Party (Mr. Broadbent) which referred to "management and control" subject to a federal override.


Thomas Edward Siddon: That was an NDP sell-out.


Herbert Thomas (Bert) Hargrave: That deal was, of course, made in the constitutional debate.
The Alberta argument was countered by federal lawyers who insisted that this position only applies to resources still in the ground and that all commodities become liable to taxation once they are in transit. Where do we stop with this argument? Our agricultural soils are a natural resource. Should a product of those soils, such as wheat, become taxable in transit? What about the case of our hydro potential from our rivers or from gas-fired electrical energy? Should this energy and end product become taxable in electrical transmission systems? The implications here are staggering, since it should surely include Ontario and Quebec hydro. It must surely be apparent now in the prolonged constitutional debate that Alberta is chiefly concerned about the complete takeover of Alberta's resources, by way of a referendum or by any other means. This is a very real concern in Alberta now.
I would now like to give some indication of the impact this legislation will have dealing with natural gas only. My remarks apply primarily to southern Alberta, but they do cover a much wider area as well. My city of Medicine Hat has developed and owned all of its own utilities beginning about 100 years ago. It includes electrical utilities generated from natural gas. Medicine Hat's population, including nearby Redcliff, is about 40,000. A large greenhouse industry faces staggering cost increases. Nine separate greenhouse operations face increases of 100 per cent, 102 per cent, 106 per cent, 166 per cent and 200 per cent respectively. These costs are for this excise tax only. They do not include the 8 per cent wellhead tax. A typical home owner in Medicine Hat using about 15 Mcf per
month is now paying 50 per cent more. A senior citizen's home is paying 40 per cent more. The absolute dollar impact on the total city gas consumption is S6.5 million or about $18,000 a day. This is for the first incremental stage only.
I come now to the commercial uses in the city. A co-op shopping centre has an increase in gas costs of 77 per cent and an increase of 16.5 per cent for electrical costs. The gas costs for our district hospital, which services the whole rural community, have increased 106 per cent. Its electrical bill is up 23 per cent. All residential, commercial and industrial electrical costs have increases ranging from 13 per cent to 26 per cent. Again, these cost increments do not reflect the 8 per cent wellhead tax or the present very high interest rates. Easily the most severe impact of the gas cost increases will be felt by our senior citizens, especially those farmers, mostly from Saskatchewan, who seem to enjoy retirement in Medicine Hat with the comforts of natural gas.
The town of Brooks has already suffered more severely than Medicine Hat. Brooks has a population of 9,000 and has grown very quickly as a result of the oil and gas industry. Some 25 specialized service industries are based at Brooks and have already experienced severe cutbacks. There are another 175 businesses directly related to the oil and gas industries. Brooks expects a 30 per cent to 35 per cent reduction in its business activity, because of the National Energy Program, most of it as a result of the natural gas section within that policy. The number of drilling rigs in the Brooks area has already decreased from 70 to 50. Quite recently, and I find this most interesting, two rigs have left for Australia. The balance of this local reduction in drilling rigs has either moved to the United States or they have shut down. In the Brooks service area, less than 10 per cent of the companies have any affiliation with multinationals. More than 70 per cent of supplies, manufactured goods, fabricated goods and vehicles originate right here in central Canada.
I want to say a word or two about the Federation of Alberta Gas Co-ops Ltd. I am sure members of all parties will remember the 18-member board of directors of this rural, provincewide national gas consumer group which visited members of Parliament and other groups about two weeks ago. This federation is made up of 77 user-member gas co-ops, five county-owned utilities and other private gas utilities throughout Alberta. These 85 user-member-owned utilities provide over
40,000	natural gas services to over 140,000 rural people with a 40,000-mile distribution system. Their brief to all members of Parliament documents in some detail their concerns about this new legislation. They point out that 85 per cent of Alberta's rural population have homes which are heated by natural gas. They have, justifiably, concerns about the impact of fertilizer costs because, of course, natural gas is a major input component of commercial fertilizers. These gas co-ops have advanced a very sensible suggestion, namely, that the 30-day pay period for the tax be extended to 90 days.
All of the various cities, towns, rural associations and many others have grave concerns and misgivings about this legislation and the companion petroleum and gas revenue tax. I can
February 13, 1981

certainly understand and appreciate these concerns. A very wide selection of both gas producers and consumers should be encouraged to appear before the standing committee when the bill is sent there. That is the very least the Minister of Finance (Mr. MacEachen) and the Minister of Energy, Mines and Resources (Mr. Lalonde) can arrange. It is my understanding that this is the government's intention.
As I indicated earlier, we in southern Alberta consider our natural gas resource as part of our 100-year heritage. It would be difficult to place a monetary value on this aspect of our gas heritage resource. I can only add that Alberta's other financial Heritage Trust fund-and most of you know what I am referring to-pales in insignificance in comparison to our natural gas heritage resource.


The Acting Speaker (Mr. Blaker):: It being four o'clock, pursuant to agreement made earlier this day, it is my duty to interrupt the proceedings and put every question related to the second reading stage of Bill C-57. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: On division.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
The Acting Speaker (Mr. Blaker):: It being four o'clock, the House will now proceed to the consideration of private member's business as listed on today's Order Paper, namely, notices of motions, public bills and private bills.


PRIVATE MEMBERS' MOTIONS
[Stage Direction]
Item No. 25 allowed to stand by unanimous consent.

J. Robert Howie: That the Standing Committee on Health, Welfare and Social Affairs be empowered to examine, inquire into and report from time to time appropriate measures for the prevention, identification and treatment of abused persons involved in interfamily violence and in particular, without limiting the generality of the foregoing, to address the issue of battered wives and dependants and for such other measures in the same matter as the committee may consider desirable.
He said: Mr. Speaker, a few years ago this House took a giant stride forward in recognizing and coming to grips with the battered child syndrome. The House Standing Committee
Family Violence
on Health, Welfare and Social Affairs conducted an in-depth study involving more than 300 different authorities into the question of child abuse which is a broad continuum stretching from deprivation and child neglect on the one hand to the physical battery of children on the other.
The line of demarcation between federal and provincial jurisdictions was traced, responsibilities of parties identified and sound recommendations for remedial action were made. Today I want to ask the House to consider a similar measure related to the broader spectrum of family violence and interfamily violence.
Inasmuch as we have focused the light of truth on the social and legal problems related to child battery, I think the time has long past when spouse battering should come out of the closet and we should attempt to identify the basic elements and seek remedies.
The excellent report on this subject by the Canadian Advisory Council on the Status of Women, published just one year ago, interprets the statistics, puts to rest some old myths, identifies some causative dynamics, takes a realistic look at what is being done and addresses the question of what remains to be done.
The facts speak for themselves. Battering is rarely a onetime occurrence. The Canadian Advisory Council on the Status of Women reports that one in ten Canadian women are battered and most of them have nowhere to go for help, and those who seek help face high legal and financial barriers.
There is no geographical, financial, educational or class exclusion to the perpetrators of this form of violence. We know that 50 per cent of the husbands of battered women interviewed by transition houses were beaten as children, compared to about one third of the women. We know that 55 per cent of the husbands were working; that the one transition house which asked whether the mate had a criminal record found that 34 per cent did, and that the husband's educational level tended to be, like his wife's, about grade 11.
It bears repeating that these statistics should not be interpreted as statistics on battered wives across Canada. They are statistics on one group of battered wives who went to transition houses for help in 1978.
This does not reduce the impact or the validity of the statistics. Still they must not be used to conclude that middle or upper-class women are rarely battered. Many transition house workers spoke of the web of silence around middle and upper-class wife battering. The information on middle-class wife battering comes primarily from doctors, lawyers, police and social workers who refer women to transition houses, and also for middle-class women who may phone for advice but do not stay in the house. These reports and the statistics confirm the conviction that wife battering is just as common in middle and upper-class homes.
Wife beating has been condoned throughout history. The Canadian advisory council report refers to the first known written laws, thought to date from about 2500 B.C., which proclaimed that the name of any woman who verbally abused

February 13, 1981
Family Violence
her husband was to be engraved on a brick which was then to be used to bash out her teeth.
Wife beating and wife killing were recognized rights of men in Greek and Roman societies. Throughout the middle ages wife beating was openly encouraged and the Renaissance brought no relief to women. The eighteenth and nineteenth centuries also spawned laws that proclaimed man's right to abuse his wife. British law textbooks in the nineteenth century still stated that the husband had, by law, power and dominion over his wife and could beat her, but-and here we have the emergence of the first delicate sense of justice in the exception, which states-"but not in a cruel or violent manner".
What are the causes of wife battering? Alcohol, mental illness, natural male aggression, violence passed on from one generation to the next, status imbalance, alienation and the inability to communicate, stress-social pathology?
Alcohol is in fact present in a large number of cases of wife abuse and although it may be a facilitator, its role as a causal factor may be more prominent in the social use of alcohol to legitimize violence and to reinforce a certain image of family relationships.
Wife battering is too widespread to be explained primarily by mental illness. There are many theories and there are many commentaries on the theories, but perhaps the time has come for us to look for cause in the wider society rather than in the individual or the particular family. Wife battering is not a modern phenomenon, and there are many facilitators like alienation, alcohol, status imbalance, stress and social pathology.
Any examination of the phenomenon of family violence has got to take a look at the family as an institution and the relationships between not the individuals, but the individual roles within the family that perpetuate this form of violence; indeed the institution of the family has to be explored in the context of legal and medical institutions against the background of wife battering and family violence in the privacy of the marital home.
The Canadian Advisory Council on the Status of Women has made some excellent recommendations for a series of changes to the Canada Assistance Plan, a federal-provincial cost sharing arrangement for social services, that would help battered wives. The council recommended modifications to provide more funds for transition houses for battered women, to base a needs test applied to the women on their own income rather than their husband's income, and to loosen residency roles because the houses do not exist in every community. The council recommended an emphasis in the justice system on wife battering as a serious criminal offence.
I believe that as parliamentarians we should address these recommendations and we should also invite the interdepartmental committee of senior civil servants who have been looking at this problem to share their thoughts with us.
The role of family violence and the law, medical response, the role of social agencies, the inevitable cycle of despondency and frustration, marriages outside the law, all invite study.
Transition houses, police crisis intervention, police training programs, United Way initiatives, legal initiatives in Canada, are all indicators of what can be done to help alleviate a serious critical and unjust situation.
In my personal view the question of long-range prevention, and an inventory of emergency services and support services along with legal reforms, are high priorities for early action. What I have been describing for the past few minutes is not one problem, it is many problems; complex problems, interwoven problems and problems that have been with us since the emergence of civilization. The fact that it has existed for centuries is no excuse for one more day's delay. Last year an estimated 50,000 Canadian women were battered, some of them to death. How much longer do we have to wait before we take action?
This is not a political question, it knows no bounds of race, creed, religion or politics. We have before us a human problem and I believe that we have accumulated the intelligence, the desire and the ability to finally do something about it. In the name of humanity, Mr. Speaker, I urge this House to pass my resolution so we can take one giant step forward on the high road to a just and compassionate society.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, I am very pleased and honoured to have the opportunity to speak to the motion brought to the House by the hon. member for York-Sunbury (Mr. Howie). I think it is an excellent motion.
When one reflects for a moment or two that homes across Canada can be the showcase of the best of human relations, one must also recognize that the worst of human relations can also be present there. As the hon. member has articulated very clearly and thoroughly in his presentation, they can be very dangerous places.
We are discussing a topic which has touched in one way or another the lives of all of us in the House. I would be surprised if everyone here did not know of someone who, at sometime in his or her life, had not been affected by family violence in one form or another, be it child abuse, wife battering, or sexual assaults. It is interesting to note that nearly half of the rape victims in Canada are either married or living common law. We are not talking about a situation involving strangers but rather something close to the family unit.
In the motion put forth by the hon. member he mentioned family violence relating to interfamily squabbles. I think the term would be "intra", within the family, as opposed to violence between families. It is fair to say that wives and children are the two groups we are primarily concerned about this afternoon. They are two groups that do not really have a voice and they are powerless in Canadian society. They do not have a lobby group in Ottawa and consequently more responsibility falls on our shoulders to raise this issue in the public consciousness and to take steps in the direction we are taking today. The hon. member mentioned a number of causes of
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family violence I should like to add one more to the very thorough list presented and that is, unemployment.
I think it is recognized now that unemployment results in a whole host of social costs to Canadians, costs such as increased suicides, alcoholism, hospitalization of one kind or another, prison terms, delinquency and, indeed, family violence. During periods of unemployment a person loses the ability to provide for a family, loses self-esteem, becomes frustrated and despondent. This often results in violence against other persons, including children and wives. At the moment, in Canada, family violence is a growing concern as is our concern about unemployment, the two being not causal but certainly related.
I listened with interest when the hon. member for York-Sunbury indicated that family violence cuts across all lines of society. It is not relegated to any particular sector of society. It is not an upper-class or a lower-class phenomenon but is found in all walks of life. One in ten wives is battered. Recently I read that in the United States there is a wife abuse in 60 per cent of all marriages. A recent study estimated that in metropolitan Toronto about 50,000 wives could be considered battered in one way or another.
In Vancouver, over an 18-month period, 800 wives came forward as victims of serious wife battering and physical abuse. The sad thing is that there is very little research on this topic in Canada or elsewhere. The study previously mentioned by the hon. member is one of the major studies, and it is one of the very few which exists on this topic. It is something we often take for granted. I would like to remind members of the House of the phrase "rule of thumb" which is one we have all heard and perhaps used ourselves. When we look at the origin of that term, it goes back to the old English common law when it was appropriate to beat your wife as long as it was for a good reason. You could not beat your wife with a stick thicker than your thumb. In other words, the "rule of thumb". When we consider the origin of that term we realize this problem has been around for some time.
Canadian statistics indicate that somewhere between 200,000 and 225,000 children per million feel the results of child abuse. I think by all accounts that is a very conservative statistic. The frequency and amount of child abuse in our society today is an increasing phenomenon and a very serious one. It is much greater than indicated by statistics. "Spare the rod, spoil the child" is a statement which is still heard very much within Canadian society today.
I read a 1977 task force study carried out in the province of Ontario which found that within the provincial context, very serious staff hampered the ability to deal with family violence. There are very serious shortages of resources and agencies to deal with this. I am certain Ontario is not unique in this respect. To begin to appreciate the seriousness of this problem, we find, looking at the logs of police work, depending on the municipality or the area of Canada involved, that between 10 per cent and 30 per cent of police calls have to deal with family disputes and family violence. One could almost say it has become a national pastime for many Canadians to beat their children or a husband, his wife. It is not a very pleasant
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thing to have to say. We must consider the pain, embarrassment and shame which result.
Obviously, we must increase community services, increase community resources and support systems. Transition homes of one kind or another are needed. Certainly we need large numbers of counsellors to deal in a professional way with this very serious problem. There is dearth of crisis centres across Canada to deal with family violence, child abuse, wife battering and rape. The latest statistic I have been able to obtain indicates that only 35 rape crisis centres exist across the country. When we consider the large metropolitan areas, that statistic is a poor implication of our concern as a society with these very serious problems.
The hon. member indicated the need for police training. There is a need for a new consciousness and a new awareness of that kind of training in our policy forces. Right now I suspect that a policeman is rather hesitant or reluctant to become involved in family violence and family disputes and will tend to avoid that kind of conflict instead of intervening.
With respect to the whole matter of our legal system, we certainly need to have laws with teeth in them and which show some sensitivity to this problem. I think it would be fair to say, as a generalization at least, that our legal system is rather "macho" in nature, especially when we think of the lawyers and judges within the system. It is a male-dominated system and rather macho in interpretation, which certainly does not result in sensitivity to this very crucial question.
There is also the matter of parenting skills. One assumption we in society make is that anyone is capable of raising a family. Our school system does not particularly reflect a concern regarding the development of parenting skills. 1 think we are dealing with perhaps one of the most sensitive of human relations, the raising of children. We are also dealing with the liaison between a husband and a wife. Yet no training in parental skills is really introduced in society. It is assumed that we all know inherently or have some innate ability. All of us here would certainly agree that that is not necessarily the case.
Finally, with respect to a public awareness program, there should be more of the kind of thing which is occurring here today. Members of Parliament are speaking out and recognizing the seriousness of this issue in Canadian society. The more the public is aware of the needs these crisis situations create, the more likely it is that solutions will be found.
In my community of Kamloops there is often a hesitation to accept a transition home, a halfway house or a transition home for young children with problems of one kind or another in the community. This public reaction is almost predictable. With public awareness and a more sensitive attitude toward this serious situation, the natural knee-jerk negative response would not be as common as we find it today.
It is with a great deal of pleasure that I say that our party will certainly endorse this motion. I congratulate the hon.

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member for bringing it to the floor of the House. We look forward to action and results emanating from this motion.


Mrs. Celine Hervieux-Payette (Parliamentary Secretary to Solicitor General):: Mr. Speaker, first I would like to thank the hon. member for York-Sunbury (Mr. Howie) for presenting this motion. I would like to express my full support for the motion.

All the hon. members in the House today are certainly aware that this government has committed itself to finding solutions to the problem of family violence, especially the odious issue of wife battering and child abuse, as I believe that one seldom occurs without the other. Recently, the Canadian Advisory Council on the Status of Women published a brochure entitled The Battered Wife in Canada, an Anonymous and Silent Victim. I hope that this brochure can be distributed in our institutions throughout the country because I believe that the major problem in this regard is one of ignorance and silence and the fact that the population is kept in the dark or would prefer not to hear about it.
However, I would like to point out some of the initiatives taken by our government. First of all, since the Speech from the Throne, an inter-departmental committee including representatives from the Council on the Status of Women, from the Department of Justice, from the Department of the Solicitor General and from the Department of National Health and Welfare has undertaken a study on family violence and particularly on the problem of battered wives. Each of the three line departments represented has sponsored projects and taken certain initiatives: for instance, the Department of Justice has financed conferences, public assemblies and legal information brochures, as well as experimental projects to help the victims; the Department of the Solicitor General of Canada has offered a training program to the RCMP in the area of family violence and has also financed conferences and workshops, as well as a vast research and experimentation program to improve the response of the legislators to the plague of family violence; third, the Department of National Health and Welfare has now under way 40 research and experimentation projects related to family violence including transition houses. These programs are ongoing and I am convinced that others will be implemented.
Nevertheless, if we agree to a reference of this issue to the Standing Committee on Health, Welfare and Social Affairs, it is because of the existence of a real need which was readily identified by the interdepartmental committee but which to a great extent still remains without an answer. I wish to emphasize the need to bring this issue to the attention of the public and to provoke and sustain the interest of Canadian men and women as well as their desire to solve this problem. Whoever abuses a member of our society is committing a crime against society as a whole.
This is not interfering in family relations, whether we are talking about women or children. Our society already recognizes as its duty to protect children, but not yet unfortunately in the case of battered wives. We must, through all available means, give protection to all abused persons, women being by far the largest in number. And I do not hesitate to add, Mr. Speaker, that this is probably the most odious-most often committed and yet the most rarely reported crime in Canada at this time.
The study of the matter will not be easy because it fills one with horror and the interest it attracts is not only a desire for information. One can stay awake all night fuming with rage just thinking about something like this. Until now, women's organizations alone have been trying to really deal with this. I am grateful that two of my male colleagues have agreed to consider the matter and are prepared to deal with it. Even though women's groups are still at the consciousness-raising level, I think we must go one step further and see how we could deal with the situation and solve the problem.
We must concentrate on identifying and treating the battered wives who are a product of family violence. For the time being we would only be wasting time in searching for causes without really helping the half million battered women in Canada, and that I think is a conservative estimate. We must help these women now, Mr. Speaker, without regard for the number of their injuries, the level of socially accepted violence or the frequency of the incidents, because from the victims' point of view, these situations are unacceptable. Mr. Speaker, it is with great sincerity that I support this motion and recommend that it be implemented as soon as possible by the interdepartmental committee.


Flora Isabel MacDonald: Mr. Speaker, as much as we all would like to think of Canada as one of the more enlightened countries in the world, a country where law and order is well established and a country where the human rights of each and every individual is respected by all others, I am sad to say that such is not always the case.
The resolution introduced by my colleague, the hon. member for York-Sunbury (Mr. Howie), this afternoon focuses on one of the ongoing tragedies in Canadian society, and that is violence within the family. It is a problem which cries out for government action but, more than that, it demands of each and every Member of Parliament that we have a better awareness and a much greater willingness to tackle the problem than we have shown in the past.
Violence is always tragic, but violence within the family is even more so, for the victims are so vulnerable and so defenceless. They are preyed upon by the very people to whom they give their trust and on whom they depend. Family violence is far more widespread than reported cases indicate. According to a study done by the University of Windsor, there are ten unreported cases for every case reported. There are ten unreported cases of battered wives to every reported case.
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This is why family violence is so difficult to combat. It goes on in the privacy of the home and is very often hidden by the victim in order to protect the very thing that has turned against him or her-the family.
Now I want to focus very briefly, as others have, on one aspect of family violence, that is, wife battering. That is the subject we have been discussing this afternoon. All forms of violence are horrifying, as the hon. member for Montreal-Mer-cier (Mrs. Hervieux-Payette) said, but wife battering has not received the attention or concern that its seriousness merits. For example, the laws concerning child abuse in Canada are far ahead of those regarding wife battering. It is now mandatory for citizens outside the family to report known cases of child abuse, but this is not the case in the abuse of wives. Indeed, most provinces, sir, a woman still cannot sue her husband for damages because those damages have been caused by an assault committed during marriage.
The rape of a woman by her husband is not yet a criminal offence. I know that legislation is about to come before us, but I would like to see it brought forward much more quickly for second reading. It was only in 1968, 12 years ago, Mr. Speaker, that severe physical abuse became valid grounds even for divorce in Canada.
The problem of wife beating is real and it is very serious. Most Canadians have no idea just how widespread it is. Of all the forms of family violence, and there are many, three quarters of the hundreds of thousands of cases which take place involve wife beating.
In 1978, just two years ago, it was estimated that some
500,000	or half a million, Canadian women were beaten by their husbands or their live-in companions. That is one in every ten women who are married or living common law were physically abused.
The figures are staggering. The Vancouver police, when they formed their estimates in that city, said they receive, on average, 44 domestic calls about violence on Fridays, Saturdays and Sundays, and that on other days in the week the average number of these calls is 38 a day. We know that more than twice as many women as men are murdered by members of their own families.
This incidence of violence is an issue which we simply cannot ignore, and that is why I am pleased to see that my colleague has brought it to the floor of the House this afternoon. It is an issue to which we must begin to give much more priority. We can begin that by asking the Standing Committee on Health, Welfare and Social Affairs to look into this matter and recommend measures for the prevention, identification and treatment of victims of family violence.
Not enough is being done at the moment. For example, the transition houses, about which my hon. friend spoke, which give shelter to battered wives, are too few and are underfunded. About half the female population does not have ready access to transition houses, and those who do must qualify for welfare before they can get into a transitional house. I know
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that from my own experience as a member of the board of directors of one such interval house in Kingston.
Women who are forced to flee to transition houses often have to do so in the middle of the night with scarcely more than the clothes on their backs. They are forced out into the cold, into the dark, as a result of severe physical abuse. According to statistics-and statistics can never tell the whole story-one out of every three such women has been beaten not just once or twice, but daily or weekly. They leave their homes in sheer desperation, and therefore the financial situation of the family of which they were once part, should not be a criterion for receiving financial assistance. For these women who are driven out, no matter what social background they come from, are truly destitute.
If this resolution is referred to committee, then the possibilities of preventive action could be investigated. Better educational and counselling programs could be recommended. Not just the general public, but police forces throughout the country, as the hon. member for Kamloops-Shuswap (Mr. Riis) said, should become more sensitive to the problem.
It has been found that half the callers pleading for a police presence during husband and wife disputes were only given advice over the phone, but no physical protection. Couples should have better access to counselling, and the public should be made aware of the severity of the problem. Women should be encouraged to speak up and speak out if they are being abused. So many battered wives live in a world of private terror; they are afraid to stay and yet they are afraid to leave. These women must be provided with more financial and moral support than they have at present.
If this resolution is referred to the committee, it could also look into the legal aspects of wife battering to determine whether or not the laws on our books are adequate to protect wives who have been beaten and who are physically abused. For example, it could ask how effective restraining orders are. In a case study published last year by the Advisory Council on the Status of Women we were told of a woman, who, after she and her daughter had both been severely beaten by the husband, got the court to pass a restraining order on him. Not only did the restraining order not dissuade him from beating his wife again, nearly to the point of death, but when he was brought up on charges of attempted murder, he was given a suspended sentence for assault. He paid no fine, he spent no time in jail, but his wife still has the scars she received while he was under a restraining order.
Wife battering is, as has been said, a multidimensional problem, which calls for changes in the fields of law, education, medicine, social services, the economy and in the attitude of the public.
We must listen to what women have to say and we must be prepared to help. Indeed, sir, women are beginning to speak out more and more about this issue, in conferences, and in seminars across the country where they are meeting to discuss problems which women have in society. One such conference will be held here tomorrow, right on Parliament Hill, and I refer of course to the constitutional conference on women.

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Hundreds of women from all across the country will be gathering together to discuss women's rights, family law, the role of the social services, women in employment and women in education. We in this chamber can do our part this afternoon by taking the resolution of my colleague seriously and referring it to committee instead of allowing it to be talked out.


Mr. Normand Lapointe (Beauce):: Mr. Speaker, I am very pleased to have the opportunity to speak to this motion. The Department of National Health and Welfare has been concerned for some time now with the prevention of family violence and countermeasures have been taken in that area. Several projects have been developed to help people take sound and positive life habits and thus avoid that kind of situation. For instance, a number of activities within the Health Protection Branch are aimed at fostering women's interest in their condition and keeping them well informed on their health and that of their family. An information kit on women and drug addiction has been developed, including a report on alcohol and violence. The Social Service Programs Branch is deeply concerned with family violence.
In the last three years the marriage counselling service has sponsored and Financed 20 symposia throughout Canada. These meetings of specialists in various branches reviewed the common aspects of family law and social services, particularly reform of family law, custody and visiting privileges, alimony payments, arbitration, counselling standards, legal procedures and the responsibility of the public and the specialists.
The report on abused and neglected children drafted by the Standing Committee on National Health and Welfare led to the establishment of a plan of action at the ministerial level and to the creation of a position of co-ordinator for the information program on child abuse within the social services division which has begun to play an important role in the field of public teaching by co-ordinating and circulating information through films and printed matter.
Consultations have been undertaken with provincial authorities and private organizations to determine early detection methods, interdisciplinary measures and appropriate treatment so as to help the abused children and the people responsible for the abuse. In addition, the national welfare grants program has sponsored 14 projects on mistreated children since January 1977 and we have begun the last stage of a two-year study on basic legislative questions related to child abuse. The Department of National Health and Welfare and the Department of Justice have funded an exhaustive study on sexual offences against children and young people.
While continuing our efforts and supporting programs to fight child abuse we now consider that the most urgent aspect of family violence is the case of battered wives. Under the
department's two major grants programs, namely, the national welfare grants program and the national health research and development program, funds have been earmarked for over 40 pilot projects and research concerning family violence and sexual violence.
Through the Canada Assistance Plan we have paid for 50 per cent of services offered to neglected and mistreated children. Through that same plan we also share with the provinces half the cost of a great many financial and support services for victims of family violence. These funds help administer transition homes for battered wives.
We are also endeavouring, in concert with the Canadian Nurses' Association and the Canadian Association of Social Workers, to make the members of those two more aware of the problem of battered wives and inform them of the steps they can take. In fact, the social workers' association has set up a group of experts chaired by a department representative.
The problem is serious and far more widespread than anyone of us would dare admit. The efforts of the department are no more than a start and we are aware of it. The problem has now been identified but much remains to be done in determining the causes of wife battering and developing preventive measures, interdisciplinary services and appropriate care to help not only its victims but also those responsible for such ill treatment. We support whatever steps can contribute to educate the public and develop means to fight against the physical abuse of women; we therefore support the motion to refer the matter to the Standing Committee on Health, Welfare and Social Affairs, Mr. Speaker.


Stanley Howard Knowles: Mr. Speaker, it is refreshing this afternoon to sense the unanimity in this House. The hon. member for Kamloops-Shuswap (Mr. Riis) has spoken for us, and we hope that before the hour finishes the motion will have been passed.


Some hon. Members:: Hear, hear!


Mr. Gary F. McCauley (Parliamentary Secretary to Minister of Consumer and Corporate Affairs and Postmaster General):: Mr. Speaker, I am delighted to rise in support of the motion of my good friend and colleague from New Brunswick, the hon. member for York-Sunbury (Mr. Howie). Indeed it is high time that this issue was brought out of the closet into the cold and harsh light of day, that it was discussed and acted upon.
The hon. member for Kamloops-Shuswap (Mr. Riis) has spoken of the need for public awareness. In that connection I am sure my colleagues in the House would want to congratulate the Canadian Broadcasting Corporation for its presentation on Sunday, February 1, in the drama series "For The Record: A Far Cry From Home". For those of us who saw it, it was a compelling and frightening drama on the issue of wife battering. It made a lasting impression upon me, and I am sure all of us who saw it came away with the feeling that this
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cannot go on in a country such as ours. I congratulate the corporation which from time to time receives barbs from this august assembly; but in this case it deserves our heartiest congratulations for doing a tremendous job in bringing this issue to public awareness.


Stanley Howard Knowles: Hear, hear!


Gary Francis McCauley: I also want to congratulate the various women's groups throughout the country which are working so hard to do something for battered wives in particular. In that connection I want to pay particular tribute to two groups in my own constituency of Moncton. There are two associations. One is called "Crossroads for Women". Its objective is to provide a shelter service for women who have been battered and abused, and to set up a referral service to aid women who are in crisis situations. The shelter or transition house which the association is trying to establish will accommodate women and their children. Also there is another project called "Project Aware". It is sponsored by the YWCA in Moncton. It provides access for women to assistance and resources to enable them to become self-sufficient. Both of these groups were to be funded under the Canada community services project. Unfortunately the money for that province ran out.
I have implored the Minister of Employment and Immigration (Mr. Axworthy) to see if more money cannot be found somewhere for these worthy groups and their worthy projects. I am pleased to report that the minister is very sympathetic to my pleas and to these women in my riding. I trust the money will be forthcoming in the near future.
The hon. member for Kingston and the Island (Miss MacDonald) quite correctly said that statistics do not tell the whole story, but we need to hammer the facts of this story home by statistics. In 1978 an estimated 500,000 Canadian women or one in ten of those married or living common law were battered by the men with whom they lived.
Two thirds of all divorce applications are filed by women. More than one quarter of these divorces are requested on grounds that include physical cruelty. Eight out of ten of the women seeking shelter in a Canadian transition house have been beaten while they were pregnant. One of three residents in homes for battered women have been beaten weekly or daily. Those are frightening and shocking statistics.
The ramifications go beyond the beating of women and the beating of children. Fifteen per cent of Canadian police killed between 1961 and 1973 died while investigating domestic disputes. My colleague, the hon. member for York-Sunbury will recall a very tragic incident in the province of New Brunswick a few years ago in which two RCMP officers were killed in circumstances such as this. So the ramifications go beyond even the serious situation which we know exists in the homes of this country.
The government is most concerned about the reported increase in these statistics. On January 12, 1981, the Minister of Justice (Mr. Chretien) tabled Bill C-53 which contains
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measures which would impose strict penalties for several of the problems associated with domestic or family violence. Such provisions resulted from careful study of the present legal sanctions within the federal sphere of responsibility and of the current use of these sanctions.
Pursuant to passage of clause 18, of Bill C-53, what is now called common assault, a summary conviction offence, will become what is referred to as a "hybrid" offence of assault. Under this hybrid offence, the Crown will elect whether to proceed by way of summary conviction where the maximum penalty is six months and/or a $500 fine, or by indictment where the maximum penalty would be two years' imprisonment. Because the offence is hybrid, the police will be able to arrest an assailant without actually finding that person committing an assault. This is terribly important, as the hon. member for Kingston and the Islands has pointed out. The police will operate on the belief that it is in the best interest of the public to take the assailant into custody in cases were they have reasonable and probable grounds to believe the offence is likely to be repeated.
This will be especially helpful in cases of wife battering where the police may be called by a neighbour. Their arrival on the scene usually stops the beating. At the present, unless the wife has sustained injuries sufficient to constitute the offence of assault causing bodily harm, the police are unable to arrest unless they actually see the assault occurring. This, of course, is rarely the case. As a result, where the wife does not seek shelter away from the house and the husband is not arrested, frequently when the police leave the scene, notwithstanding that they believe the tension has been defused, the wife is again beaten by the husband.
This amendment to the assault section of the Criminal Code will provide a tool to the police to arrest without actually seeing the assault. Their judgment in assessing each situation becomes all important, and we can only hope that individual police departments will ensure that officers answering domestic calls will receive specialized training. To this end, federal and provincial police forces are working together to develop such police training.
Of course, once an arrest is made, the prosecution of a case falls within the responsibility of a provincial Crown attorney. There is some dispute about whether such matters ought to be dealt with in family court or in criminal court. The legal forum in which a case is presented often depends on the local situation regarding such things as the availability of court time, the availability of a prosecutor, and the procedures established by the local judges and so on.
However, the federal Department of Justice has awarded research and demonstration grants to obtain further information on the legal process in such cases and to assist complainants in the court process. For example, the Women's Research Centre in Vancouver is preparing a report on the legal process, and a demonstration project for a complainant consultant is under consideration for Windsor, Ontario. Under this project information would be provided to those assaulted in domestic situations about their legal rights and this would

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further assist those victims who proceed with assault charges as they move through the court process, whether in family court or in criminal court. It is anticipated this project will assist the Crown attorneys in processing these cases brought before the courts.
In relation to the abuse of children, the Minister of Justice announced, in co-operation with the Minister of National Health and Welfare (Miss Begin), that a national study would be established under the chairmanship of Dr. Robin Badgely on the sexual abuse of children. The study is expected to last two years. In addition, the federal government, in conjunction with the province of Nova Scotia, is funding a study on child abuse. Also, in Clause 6 of Bill C-53, serious responsibilities and sanctions are imposed on parents, guardians and others in authority not to molest their charges or permit them to engage in sexual misconduct.
As it has been demonstrated that the rules of evidence need to be amended to permit one spouse to be compellable and compellent to give evidence against the other spouse in child abuse cases, the necessary amendment to the Evidence Act is proposed in Bill C-53. These legislative measures are the one
area within the federal sphere of responsibility involving domestic violence where the federal government can take immediate action.
Notwithstanding these current initiatives the government supports further study and action and would welcome the assistance of the Standing Committe on Health, Welfare and Social Affairs. Therefore, in concluding this debate, I am pleased to indicate that the Government of Canada supports the motion of the hon. member for York-Sunbury.


The Acting Speaker (Mr. Blaker):: Is the House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mr. Blaker):: Is it the pleasure of the House to adopt the motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mr. Blaker):: It being 5 p.m., this House stands adjourned until Monday next at 2 p.m.
At 4.57 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, February 16, 1981