1981-06-02

ROUTINE PROCEEDINGS


Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, under Standing Order 43 I rise in the expectation that I shall receive unanimous consent for my resolution. Today being June 2, the anniversary of the Queen's coronation, I move, seconded by the hon. member for Bow River (Mr. Taylor):
That on behalf of this House the Speaker send a message of gratitude, good wishes and loyalty to Her Majesty on the occasion of this, the 28th anniversary of her coronation as Queen of Canada.


Some hon. Members:: Hear, hear!


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Madam Speaker:: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Albert Cooper (Peace River):: Madam Speaker, I rise on a matter urgent to the entire newspaper industry of Canada. Whereas this industry receives less than 7 per cent of Canada's newsprint production, the rest being exported, and whereas a number of pulp and paper mills are threatened with strikes, which will severely reduce newsprint supplies, and in view of the proposed adversiting tax changes for newspapers instigated by the government, which will impose severe hardships on the industry, and which have been described by
Patrick O'Callighan as "Unprecedented attempts to intrude into the traditional freedom of the press", I move, seconded by the hon. member for Bow River (Mr. Taylor):
That this House request the merciless Minister of Finance to cease his Big Mac attack on the newspaper industry, that the government encourage the mills to avoid any strikes, and encourage these mills to allocate a further 2 per cent of their production to Canada, in order that Canadians may continue to read such earth-shaking events as the Prime Minister's infamous sheik-yer-bootie two-step hustle, or the NDP Leader's enjoyment of Cuban cigars, plus the profound political insight provided daily by columnists such as Allan Fotheringham.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there inanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. Ron Stewart (Simcoe South):: Madam Speaker, I rise under Standing Order 43. There is an omission which is inconveniencing thousands of residents along the west shore of Lake Simcoe who regularly commute from Barrie to Toronto. Present service is inadequate, and surveys taken indicate there is both commuter demand and potential. The president of VIA Rail has stated that provinces should contract with VIA Rail to "run trains where local interests feel they should go". Residents of Simcoe South are caught between conflicting jurisdictions, VIA Rail and GO, neither of which presently satisfy popular demand. I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That the Minister of Transport use his good offices with VIA Rail and GO (Ontario) to expedite a contract or a swap of passenger runs which will result in improved commuter service and passenger profits for the rail carrier.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


PETRO-CANADA COMMONS DEBATES
[Stage Direction]
June 2, 1981

Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, I rise under the provisions of Standing Order 43. A cloud of suspicion and mistrust hovers over the Petro-Canada takeover of Petrofina of last February. I raised this with the minister at the time, and believe that we need a full public disclosure, especially in light of the newspaper reports today alleging some rather serious improprieties in the share transactions. I move, seconded by the hon. member for Comox-Powell River (Mr. Skelly):
That the Minister of Energy, Mines and Resources make public all of the materials gathered to date by his department and that of Consumer and Corporate Affairs, together with those of the Ontario Securities Commission, and further, that the minister establish a special public inquiry into the whole matter.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Peter Elzinga (Pembina):: Madam Speaker, I rise under the provisions of Standing Order 43. Alberta hog producers will not receive any payment whatsoever under the Agriculture Stabilization Act, as per the Minister of Agriculture's announcement of May 21, even though the subsidization of pork production in some other provinces, through programs such as weaner pig subsidies, interest subsidies, manpower assistance programs, hog transportation subsidies, and the like, is often greater than the emergency support which was provided by the Alberta government, which the federal minister has conveniently ignored in determining who will receive payment. Therefore I move, seconded by the hon. member for Vegreville (Mr. Mazankowski):
That this House instructs the Minister of Agriculture to acknowledge the unfairness of the federal decision, and make the payout to hog producers across Canada equal, and also instructs the minister to expose all forms of government assistance in all provinces of Canada to ensure fair treatment in the future for our hog producers no matter in what province they produce.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE LATE WALTER R. SHAW MOTION UNDER S.O. 43
Mr. Tom McMillan (Hillsborough):: Madam Speaker, I rise under the provisions of Standing Order 43. Many Canadians across the country joined all Prince Edward Islanders, regardless of political persuasion, in mourning the death over the weekend of Dr. Walter R. Shaw, premier of Prince Edward Island from 1959 to 1966. In light of Mr. Shaw's life-long service to his beloved province and to his country in the fields of agriculture, politics, history, and community life, I move, seconded by the hon. member for Peace River (Mr. Cooper):
That this House expresses its profound sadness at the death of a great Canadian.


Madam Speaker:: I am sure the House would want to express its sentiments by its applause.


Some hon. Members:: Hear, hear!


THE LEADER OF THE NEW DEMOCRATIC PARTY
Mr. Doug Lewis (Simcoe North):: Madam Speaker, I rise under the provisions of Standing Order 43. Last week the NDP leader's tour was a disaster as a result of lost airplane seats, and this week is rapidly going up in smoke as he spent hours discussing the relative merits of Cuban cigars with fellow socialist, Fidel Castro. Therefore I move, seconded by the hon. member for Cambridge (Mr. Speyer):
That this House invite the hon. member for Oshawa, also known as the hon. member from La Mancha, to return to the country from which he receives his pay cheque and participate in the business of running a democracy.


FISHERIES
Miss Coline Campbell (South West Nova):: Madam Speaker, I rise on a matter of urgent and pressing necessity. Since the fishing industry in southern Nova Scotia is totally paralysed because of the poor market conditions for haddock, I move, seconded by the hon. member for Missisquoi (Mr. Bachand):
That the Minister of Fisheries and Oceans order the Fisheries Prices Support Board to convene immediately to see if it can assist the Fishing industry and get the plants and Fishermen back in operation at this most critical time in the Fishery.


Madam Speaker:: Is there consent for this motion?


Some hon. Members:: Agreed.
June 2, 1981


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HUMAN RIGHTS
Mr. Neil Young (Beaches):: Madam Speaker, I rise under the provisions of Standing Order 43 to propose a motion which I am sure will receive the unanimous consent of the House. Since the U.S. based National States Rights Party, which describes itself as "by far the largest white racist party in America", has established its mailing address at one of Canada's post offices in Toronto's east end and has distributed copies of its publication "The Thunderbolt" to many households in that area, and since on Sunday last the Ku Klux Klan engaged in a public cross burning in British Columbia, I move, seconded by the hon. member for Winnipeg-St. James (Mr. Keeper):
That this House condemn in the strongest terms the race hatred and intimidation used by organizations such as the National States Rights Party and the Ku Klux Klan, and since prohibitory orders have been issued by the post office against the National States Rights Party and "The Thunderbolt" magazine, that the Postmaster General investigate the possible use of other post offices by this organization.


Madam Speaker:: Is there unanimous consent for the presentation of this motion?


Some hon. Members:: Agreed.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.


Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question is directed to the Prime Minister. Ever since the announcement of the Petro-Canada takeover of Petrofina, we on this side have been very concerned about the obvious indications of insider trading leading up to the acquisition of the company by Petro-Canada. I am sure the Prime Minister is aware of the article which appeared this morning in The
Oral Questions
Toronto Sun which outlined substantial profits that were made in the period leading up to the takeover. It makes some very serious allegations as to the involvement of cabinet ministers and of a senator. What steps has the Prime Minister taken to assure himself that these allegations are not true? Can he assure the House that no cabinet minister made any material profit as a result of insider trading in these shares?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I have not had the time nor, I must say, the inclination to read the Sun article.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I remember that this kind of innuendo was brought up in the House a few weeks ago by members opposite, and the Minister of Consumer and Corporate Affairs undertook to refer the matter to the Ontario Securities Commission, which he did. We will hear from the Ontario Securities Commission, which is looking into this matter as it should, and I am sure the securities commission will be able to give the hon. member assurance that no cabinet minister was involved.


Mr. Clark:: You are sure of that?


Mr. Crosbie:: That is very casual.


ROLE PLAYED BY MAURICE STRONG
Michael Holcombe Wilson: Madam Speaker, I am very, very surprised at the statement by the Prime Minister that he does not have the inclination to look into this article, which has some very serious allegations contained in it.


Pierre Elliott Trudeau: I never read garbage.


John Carnell Crosbie: Start looking.


Michael Holcombe Wilson: The article further alleges that a company connected with Maurice Strong was also involved in very substantial profits arising out of the transaction. Since Mr. Strong was in a position of trust as a principal participant in the negotiations leading up to the takeover, has the Prime Minister had any discussions with Mr. Strong to assure himself that Mr. Strong is not involved with Sofigen, the company alleged to be involved in these profits.


Pierre Elliott Trudeau: Madam Speaker, as to the preamble to the question, 1 am surprised that the hon. member is surprised. I think it is well-known that I do not read the newspapers very much, but I particularly do not read those that publish garbage.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: As to the question itself, no, I have not spoken to Maurice Strong about it.


John Carnell Crosbie: You don't care about it.

June 2, 1981
Oral Questions


Pierre Elliott Trudeau: Never garbage. That is what you are reading all the time.


Michael Holcombe Wilson: Madam Speaker, I am sure the Prime Minister is going to realize very soon that this is a matter of great concern to Canadians at large, and they do not regard this as garbage, rather they regard it as a very serious matter.


Some hon. Members:: Hear, hear!


STATUS OF INVESTIGATION INTO TAKEOVER
Michael Holcombe Wilson: Madam Speaker, the Prime Minister referred a minute ago to the steps taken by the Minister of Consumer and Corporate Affairs, who agreed under some pressure from us about two months ago to undertake an investigation.
Would the Prime Minister outline the status of the investigation to this House? In addition, would he advise the House whether this investigation, as it is presently constituted, will address the allegations which are outlined in The Toronto Sun article?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs and Postmaster General):: Madam Speaker, it is obvious that this investigation is continuing. It is now being carried out by officials of my department in the Bureau of Corporate Affairs, by the Ontario Securities Commission and by the Quebec Securities Commission. It is obvious that the allegations published today in a Toronto newspaper will indeed be followed up and studied by the people who are now making that investigation.


QUERY RESPECTING DETAILS OF INVESTIGATION
Hon. Allan Lawrence (Durham-Northumberland):: Madam Speaker, my question is also for the Prime Minister. Even if the Prime Minister does not read garbage, fortunately or unfortunately a lot of people in this country do read garbage.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Allan Frederick Lawrence: He should not try to slough off an important matter such as this, which I suggest to the Prime Minister casts a cloud, certainly over all cabinet ministers if not all members of this House. May I just say, for the benefit of the Prime Minister, that the allegation is that there were purchases of Petrofina stock made just prior to the takeover by PetroCan. This involves a senator and his wife, two unnamed cabinet ministers, and a named cabinet minister, through an investment company, and some of these through nominee accounts.
These are important allegations that should not and cannot be sloughed off by the Prime Minister. If for nothing other than his own peace of mind, I would have imagined he would have inquired into the matter and would have reported here today. Will the Prime Minister please tell us what investigations he has made and what are the results of those investigations into alleged improprieties on the part of members of his cabinet?


Pierre Elliott Trudeau: Madam Speaker, I take note of the admission by the hon. member that some people do read garbage, namely, the people on the other side of the House. I can say that that is their problem. In so far as cabinet ministers are concerned, my information is that one was named, the member from Hamilton. I inquired of him, and he has already protested to the paper, asking for an apology because there is absolutely no foundation in fact in the allegations made against that minister. I hope the newspaper will make a very strong apology.
In the case of other allegations of unnamed people, I do not know. If there are some people who made money in a way they should not have, I trust the Ontario Securities Commission will determine that. As the Minister of Consumer and Corporate Affairs told the House, he is also making an investigation. Between the two of them, one a federal investigation and the other an investigation by the Ontario Securities Commission, we will find out if there are some guilty people. If so, I hope their names will be made public and that they will be taken to trial. However, I do not know of any. Until the Ontario Securities Commission in particular has finished its inquiry, I think it is a bit premature to publish the names of "guilty persons".


PUBLICATION OF REPORT
Allan Frederick Lawrence: There are a couple of corrections implicit in that. At least one cabinet minister reads garbage. The second correction involves the investigation by the Minister of Consumer and Corporate Affairs who has been quoted as indicating that in all likelihood the federal investigation, apart from the Ontario Securities Commission investigation, will not be made public. I would like the Prime Minister to expand on this and indicate to us why in any event before it is even completed there is an indication that it may not be made public. Why can we not have an understanding and commitment from the Prime Minister now, regardless of which names are mentioned, that that report will be made public. We have every right to know.


Pierre Elliott Trudeau: Madam Speaker, the hon. member says that we now have the admission of one cabinet minister that he reads garbage. The important admission is the one by the hon. member in his two questions that in fact it is garbage he has been reading. That is the main point. In so far as the Ontario Securities Commission is concerned, I have no control over it. I trust that Premier Bill
June 2, 1981

Davis, a good Conservative, will ensure that any truth that should come to light will come to light.


THE ECONOMY
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, I want to turn to some other garbage, the government's economic policy. My question is to the minister whose genius speaks for itself, the Minister of Finance. Is the minister aware that Governor Bouey told the Senate committee on national finance, and I quote from the transcript:
I think the economy is not all that far off from being as close to potential as it should be.
However, the Economic Council of Canada has stated in its annual report:
-this country is not making full use of its available human resources and of its plant, machinery and equipment.
I would ask the minister whose advice is he currently following; is he following the advice of Governor Bouey when he says that Canada is working at full potential, or is he following the advice of the Economic Council of Canada which says that Canada is not working at its full potential?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, in certain cases I follow the advice of neither. I want to make it clear to the hon. member that in so far as the administration and thrust of monetary policy are concerned, and I have stated so frequently, I obviously support the Bank of Canada, but it is not my intention to comment and adjudicate upon every statement made either by the Governor of the Bank or the chairman of the Economic Council before any committee to which they are summoned. I am not going to get into that business, and it is not my responsibility to vet their opinions.


EFFECT OF HIGH INTEREST RATES ON GROWTH AND PRODUCTIVITY
Bob Rae: Madam Speaker, it is the minister's responsibility to make up his mind as to whether or not he thinks the economy is at its full potential, and what policy he intends to carry out to see that that takes place. That is what we are waiting to hear from the minister. I would like to ask the minister this supplementary question before he gets totally agitated. When the chairman of the Economic Council tells the finance committee, as he did on Friday, that the interest rate policy of the government is above what is sensible from the point of view of achieving this general objective of full capacity, full potential and the full use of our economy, is the minister not concerned that the effect of high interest rates at the present time is to discourage real growth and real productivity in the economy, particularly
Oral Questions
when all the evidence suggests that unless we have an economy working at capacity we are not going to achieve the growth and productivity he says he wants?


Allan Joseph MacEachen: Madam Speaker, first of all, though 1 heard about the testimony given by the chairman of the Economic Council, based upon news reports, I have not been able to receive a transcript. I have attempted to get a transcript. 1 have learned that oftentimes the transcript of the actual evidence carries a somewhat different interpretation than abbreviated newspaper accounts. I have not seen the testimony of the chairman of the Economic Council.
The hon. member talks about the necessity of growth and what our policy is in that regard. He ought to know that in the fourth quarter of last year the annual rate of growth in the economy was 8 per cent, and in the first quarter of this year it was 3 per cent to 6 per cent, a rate of growth which, in my opinion, is not compatible with the long-term necessity of reducing inflationary expectations in this country. If he believes in fighting inflation, then he ought to put that particular fact into his calculations.


RELATIVITY OF TAXES ON BANKS AND ON INDIVIDUALS
Bob Rae: Madam Speaker, the calculations which are given to us by the Economic Council, and the calculations given to us on what is really going on in the economy from the point of view of idleness in the economy, idle hands and idle machinery and lost hopes, are published and there for all to see, and the minister can put them into his calculations if he wants.
The final question I have for the minister has to do with the proposals he has been making on a so-called tax-based incomes policy. When the industrial wage since 1970 has gone up 150 per cent, whereas direct taxes on persons have gone up 300 per cent, and when bank profits have gone up 210 per cent, but their taxes paid to the Canadian public have gone up 14 per cent, and when you put those figures into your calculations, which I hope you will take the trouble to do, how can you go around the country talking about punishing workers-


Madam Speaker:: Order, please. The hon. member should know that he must address the Chair.


Bob Rae: Madam Speaker, how can the minister go around the country saying to workers that they are to be the ones whose taxes are going to be clawed back by the government, when we see that their taxes have gone up 300 per cent and the taxes of the banks have gone up 14 per cent over the last ten years?


Allan Joseph MacEachen: Madam Speaker, the hon. gentleman asks me to explain that. That is not difficult, because at no point have I ever made a statement to the effect that I intended to claw back taxes from the workers of the country.

June 2, 1981
Oral Questions
That is the kind of exaggerated hyperbole the hon. member uses every day, but that does nothing to help us solve our economic problems.


PRESENCE IN SPEAKER'S GALLERY OF PROVINCIAL AND TERRITORIAL HOUSING MINISTERS
Madam Speaker:: I would like to draw the attention of the House to the presence in our gallery of several ministers of housing from the Canadian provinces and territories, including the Hon. P. Binns from Prince Edward Island, the Hon. F. Hudson from Nova Scotia, the Hon. W. Smishek from Saskatchewan, the Hon. A. McCallum from the Northwest Territories, and the Hon. Gary Filmon from Manitoba.


Some hon. Members:: Hear, hear!


PETRO-CANADA ACQUISITION OF PETROFINA-INQUIRY OF MINISTRY
Charles Joseph Clark: Madam Speaker, my question is directed to the Prime Minister, who should know that the Ontario Securities Commission is not responsible for the propriety of the actions of his ministers. The moral standards of his government are his business and the business of this Parliament, and those are the matters which are at issue and in question here.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: In his reply to one of my colleagues the Prime Minister said he was sure-he used the words "I am sure"- that the Ontario Securities Commission will exonerate any minister. He has said that he has asked at least one question of the Minister of Indian Affairs and Northern Development. The Prime Minister of Canada has a positive obligation to satisfy himself as to the propriety of actions, and to satisfy the people of Canada as to the propriety of actions-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Hon. members on the government side are trying to shout this question down, but I will proceed with it-in order to satisfy the Parliament of Canada as to the propriety of the actions of ministers of the Crown.
Will the Prime Minister of Canada tell this House now whether he has personally investigated and personally satisfied himself that no minister of his government has profited from insider information in relation to the Petrofina deal. And if he has not conducted that inquiry of each of his ministers, will he tell this House of Commons why he has not done that duty to protect the moral standard of his government?


Pierre Elliott Trudeau: Madam Speaker, it is clear that the purpose of the Securities Commission of Ontario is not to inquire into the moral standards of ministers of my government but to find if there is any whiffle of truth to the allegations or innuendoes made by hon. members opposite. If there is any, I take it the Ontario Securities Commission will let us know.


John Carnell Crosbie: Very casual.


Pierre Elliott Trudeau: Of course I am very casual. I have not asked all my ministers. One was named. I asked him. I have not asked the others if they were involved in anything. I have not asked them either if they have stopped beating their wives. Has the right hon. member opposite stopped beating his wife?


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Madam Speaker:: Order.


Charles Joseph Clark: Madam Speaker, I will not dignify that last comment, coming from that source, with a response.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The House of Commons has an interest in the propriety of the actions of the ministers of any government, but I must say particularly of this government.
I hear an interjection coming from a minister of the Crown who is known to fly in the jets of companies which have had dealings with ministries for which he has been responsible.


PUBLICATION OF INQUIRY RESULTS
Charles Joseph Clark: Madam Speaker, the Prime Minister has said an inquiry is being undertaken. We know that when inquiries are into oil companies, the results are published immediately. When they are into the conduct of this government, as they are with respect to the uranium cartel, those inquiries are hidden. May we have an undertaking that as soon as this inquiry is completed its results will be published and made available in total to the House of Commons and to the people of Canada?


Pierre Elliott Trudeau: Madam Speaker, as to the allegation of hon. members opposite, I am reminded that the Minister of Energy, Mines and Resources indicated to the House that cabinet ministers heard about the Petrofina deal at 5 p.m. on Thursday, January 29, when the market was closed. It remained closed until the deal was announced the following Tuesday, February 3. That is sufficient prima facie evidence that the cabinet was-


An hon. Member:: What does that mean?


Pierre Elliott Trudeau: I do not just go around suspecting people of being dishonest. I know that is a different attitude toward life

than that of the Leader of the Opposition, but that is my attitude.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, the attitude of the Prime Minister is not to answer questions which are put in this House. That one thing is very clear.


REQUEST FOR EARLY PUBLICATION
Charles Joseph Clark: Madam Speaker, the minister's statement had to do with the cabinet as a whole. As I recall it, it did not refer to members of the cabinet committee which might have been involved in discussing this matter. Since the rights and proprieties of Parliament and of the cabinet are at issue here, we would prefer to have a parliamentary inquiry into this matter, but this government refuses that. This government has established its own internal inquiry, which it can hide, just as it has so far hidden the results of the Bertrand report into the implication of the Government of Canada and its ministers in the uranium cartel.
The Prime Minister has refused to answer my question. Will he give us an undertaking now that, as soon as that report is finished, it will be published in total and made available without modification and without delay to the House of Commons and to the people of Canada?


Pierre Elliott Trudeau: Madam Speaker, the right hon. member accuses me of not answering questions, but he fills his questions with many spurious allegations, and he follows many detours, as he has done just now by including all kinds of allegations in his question. I find that it is my duty to answer some of those allegations rather than to go on to the rhetorical questions which came at the end. If the right hon. member would ask a straight question without all the fanciful preamble, he would get a straight answer.


Some hon. Members:: Hear, hear!


REQUEST FOR COMMITMENT TO PUBLISH REPORT
Charles Joseph Clark: For the
third time, Madam Speaker, will the Prime Minister give this House of Commons an unconditional undertaking that the report of the investigation which is being conducted by his colleague, the Minister of Consumer and Corporate Affairs, will be published in total without modification immediately on its completion?


Pierre Elliott Trudeau: Madam Speaker, I will ask the Minister of Consumer and Corporate Affairs.


Some hon. Members:: Oh, oh!
Oral Questions FISHERIES


ALICE ARM, B.C.-CLOSING OF AMAX MINE
Mr. Jim Fulton (Skeena):: Madam Speaker, my question is directed to the Minister of Fisheries and Oceans. Late last week the Minister of Fisheries and Oceans requested that the Amax operation at Alice Arm be closed, and that was done. The reason the minister stated in his telex to the company last week for his request for closure has now been confirmed to be true; in fact the tailings at about five parts per million are above the 100 metre level.
Could the minister tell this House what steps or modifications he has requested of the company so that the tailings will not resurface? Is it his position today that that mine can reopen without modification?


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, I have just returned after some days of absence. I saw the information alluded to by the hon. member.
Yes, the company did comply with the request I made of it. We are checking into the material which seems to have surfaced above the level which was permitted by the regulations. I am meeting some of my officials to discuss this very question at three o'clock, and I hope to answer the hon. member's question more fully tomorrow.


MINISTER'S POSITION
James Ross Fulton: Madam Speaker, it is costing the company an estimated $350,000 a day to be closed down, while the minister travels in other areas of the country. The minister had a study done which demonstrates that the tailings ponds on land could be undertaken safely and economically for a cost of $26 million, or $ 1 million per year of mine operation, which is only a 2 per cent difference in return on investment.
Since four out of five of the government's own scientists recommended against marine dumping, which has now been proven to pollute the environment above the one hundred metre level, will the minister now either recommend to the company that they use on-land tailings ponds, or support the idea of a full public inquiry?


Roméo LeBlanc: Madam Speaker, my absence had nothing to do with the delay. The fact is, and we said so in the telegram, that delay was caused pending examination of the material by scientists. Surely the hon. member, who has been doing his best to have the whole operation closed down, cannot today have the comfort of saying he is trying to stop the company from losing money because we are asking that precautions be taken. He had better make up his mind what he wants to do.
The fact is, Madam Speaker, that we are checking into this problem, and in this situation we will take a responsible position and do what is necessary. I am not going to prejudge the scientists' recommendations.

June 2, 1981
Oral Questions


MODIFICATION OF DUMPING OPERATION
James Ross Fulton: Madam Speaker, the minister sort of callously brushes aside the $350,000 a day costs that are accruing to the company, but it is abundantly clear to this House that four out of five scientists recommended against it. Has the minister recommended to the company any modifications in the dumping which has proven to be polluting contrary to the special order in council, and is it his position that the mine can reopen today?


Roméo LeBlanc: Madam Speaker, I will recommend changes if they are necessary, when I have the information and not only the rhetoric of the hon. member.


STATE OF INDUSTRY IN SOUTHERN NOVA SCOTIA
Coline M. Campbell: Madam Speaker, my question is also for the Minister of Fisheries and Oceans. He is aware that this is the third week that the fishing industry has been paralysed in the southern end of Nova Scotia, due to the poor market conditions in the groundfish industry. Has the minister asked the Fisheries Prices Support Board to look into the problem, since both the Province of Nova Scotia and the dragger fishermen have asked him to do so, and if so can they not convene immediately this week to look into the urgency of the situation and, if not, will he ask them to do so?


Roméo LeBlanc: Madam Speaker, if I remember correctly, the legislation states that the Prices Support Board examines the situation at the end of a fishing season to see if the fishermen's income has been affected by factors such as markets. In this case, since the fishing has not taken place, it is difficult for the board to make a judgment, but I will ask them to examine this and see if there is in fact any room under the legislation as it exists for them to make recommendations to the government.


NATIONAL DEFENCE
Ronald Alexander Stewart: Madam Speaker, my question is for the Minister of National Defence and relates to the alarming rate of resignations and early retirement of long service senior Armed Forces personnel, a rate abnormally higher than the normal rate of attrition. I ask the minister is he aware that this phenomenon is as a result of low morale, unification, lack of separate identity, and because our forces are underequipped, undermanned and overextended? I also ask whether he is taking steps to stem this exodus, by monitoring morale and other problems created by unification, as I did through this direct mailer I hold in my hand, to my constituents in the Armed Forces, and is he aware that Armed Forces
personnel were ordered by their superior officers not to reply to me through this questionnaire?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, I would rather answer in French the question just put to me by the hon. member concerning the allegedly very low morale of our Armed Forces, and the early retirement of certain of our generals and senior officers. Such retirements are normally due to the fact that our senior officers, because of their outstanding competence and very thorough training in the Armed Forces, want to launch a new career in private enterprise or in the public service, anxious as they are to serve their country in a different capacity.
Madam Speaker, I have no indication that morale in the Armed Forces is at its lowest; on the contrary, since this government has re-equipped the Armed Forces with the best equipment possible and considering that their pay scale has recently been raised to a satisfactory level, I think that the morale of the Armed Forces is better than it has ever been.


REPLIES TO QUESTIONNAIRE
Ronald Alexander Stewart: Madam Speaker, in my view the minister's reply indicates his office has little or no understanding of this serious problem. Will the minister explain why 86 per cent of the respondents to the questionnaire said that morale was low, 84 per cent favoured separate identities and uniforms, and 74 per cent said unification was not working and was not effective?


J. Gilles Lamontagne: Madam Speaker, I am fully aware of the questionnaire mentioned by the hon. member; I have it here in my hand. 1 believe the hon. member sent a questionnaire to his constitutents in the Armed Forces, concerning their identity, education, satisfaction, their morale and so on. Madam Speaker, 1 think one can indeed expect a reaction to a questionnaire which begins with a sentence like this, and I quote:
I am very proud of the Canadian Armed Forces personnel, but I believe their morale is very low, that they are underequipped and that our Armed Forces are over-extended.
In my opinion, when a questionnaire begins on such a negative note, I cannot understand how people can answer in an unbiased mood.


POSSIBLE INVOLVEMENT OF CANADIAN TROOPS IN MIDDLE EAST
Hon. Allan B. McKinnon (Victoria):: Madam Speaker, my question is also for the Minister of National Defence. Will he inform the House whether Canada has been approached, either officially or unofficially, by any foreign government or
June 2, 1981

international agency, to supply troops for service in the Middle East?


J. Gilles Lamontagne: To my knowledge, I do not think there has been any official demand for Canada's participation in the Sinai area by Egypt, Israel, or any other country. I think it is under very serious consideration by the Department of External Affairs at the moment, and no decision has been taken on the project.


STATEMENTS BY MINISTER ON CANADIAN COMMITMENTS
Allan Bruce McKinnon: Madam Speaker, I would have directed my supplementary question to the Secretary of State for External Affairs had he been here, but I assumed that the Minister of National Defence, since he spoke two weeks ago in a committee and said "at the present moment discussions are very unofficial," would now admit they are having unofficial discussions. He said also at that time that if Canadian troops were requested for peacekeeping purposes he would give it favourable consideration. He also said if they required troops for the rapid deployment force, that Canada would listen to such a request with sympathy.
Does the minister not feel that in answering so favourably he is giving a part commitment to employ our forces, and neither one of these commitments are under the United Nations which is concomitant to our supplying the forces, and would he care to tell us why he is making these partial commitments?


J. Gilles Lamontagne: Madam Speaker, I think when I answered one of the questions in the media I said really that Canada would look with sympathy on any official request, as I mentioned before. To my knowledge there has not been any official request as far as Canadian troops participating in that venture is concerned. And I said at the time that we will look with sympathy, not meaning that we would decide to be involved in it, but you know very well the high credibility of Canada as far as peacekeeping is concerned. I think that everywhere we have been, the credibility of Canada as far as effectiveness and efficiency in terms of peacekeeping are concerned, has been very high. This is why I say we will look with sympathy, because I do not think Canada wants to refuse to keep the peace in any way we can in any part of the world. This is one of our aims.


TRANSPORT
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, my question is for the Minister of Transport. Just over a year ago, as reported at page 1532 of Hansard, I asked the minister about rabbits-Volkswagen Rabbits, that is. The
Oral Questions
question concerned a serious and recurring compound failure of the braking system in Volkswagen Rabbits. At that time the minister undertook to investigate the matter and to bring about remedial action through representations to Volkswagen.
The minister should be aware that in December of this year an internal report produced evidence that there have been over one hundred documented brake failures in Volkswagen Rabbits in Canada, over 1,000 in the United States, and that, in fact, these brake failures are far in excess of the rate of failures in similar cars. For example, in the case of all similar class vehicles there was only one other failure in all other types of vehicles.
Since 12 months have passed since I First raised this question, can the minister tell the House why he has chosen to do nothing to ensure the absolute safety of owners of Volkswagen Rabbit cars? Is it true that the minister has instructed his officials to back off Volkswagen, to avoid embarrassment or potential costly recalls to them?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, the last allegation is certainly false. I would not do that, for sure.
Recently there was a communique from my department with regard to the number of automobiles recalled in the last year. At the time I was assured that none were pending. The hon. member has again raised the question of the Volkswagen Rabbit, which I will look into again, but I have no reason to believe there were any difficulties with respect to that car.


MINISTERIAL ACTION
Thomas Edward Siddon: Madam Speaker, I personally received a large number of documented complaints with respect to accidents involving Volkswagen Rabbits, with brake failure as the principal cause. Bearing in mind that Volkswagen has refused to meet the repair costs to owners resulting from these failures, and given the fact that there have been many accidents and that there could well be more accidents and possible deaths, and in order to prevent a recurrence of further such accidents in the future, is the minister prepared to implement the defect notification procedures of the Motor Vehicle Safety Act and to demand compensation from Volkswagen? I might add that Volkswagen has chosen to compensate owners who take Volkswagen Canada to small debts court, but otherwise it refuses to meet the costs of repair.


Jean-Luc Pepin: Madam Speaker, I now recall very clearly that, indeed, action was taken with regard to this matter. Volkswagen issued instructions to people as to the proper use of the car.
On the subject of recall in general, I am sure the hon. member would like to know that 50 per cent of people who are entitled to repairs free of charge do not avail themselves of that right.

June 2, 1981
Oral Questions THE ECONOMY


STATEMENT BY PREMIER OF ALBERTA
Mr. Stanley Hudecki (Hamilton West):: Madam Speaker, my question is for the Minister of State for Finance. In a recent speech the Premier of Alberta implied that responsibility for high interest rates can be attributed to the failure to reach an energy agreement with the federal government. Can the minister confirm or deny this theory?


Hon. Pierre Bussieres (Minister of State (Finance)):: Madam Speaker, obviously one could speculate indefinitely about the causes of higher interest rates. However, I would indicate that it is the very nature of our economic system which explains that increases in interest rates are due, first and foremost, to a greater demand for money and for credit, and to all sorts of other developments occurring on the money markets.


NUCLEAR ENERGY
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, my question is for the Prime Minister and is a different one from the others on this topic in which he was engaged earlier. A few days ago the Prime Minister defended Canada's participation in the international uranium cartel as being in the public interest, to paraphrase him somewhat. Yesterday, in a leaked document from an internal study conducted by EMR, various options to rescue and expand the atomic energy industry, which is currently suffering from terminal economics, were discussed.
Does the government have any hard evidence to prove that expansion of the nuclear industry, considering all the risks involved, is, indeed, in the so-called public interest? Will the Prime Minister assure the House that before any more nuclear reactors are imposed on the people of Canada, or any more money-losing exports are made to foreign countries, a detailed and comprehensive study will be undertaken to prove that our nuclear industry is, indeed, in the Canadian public interest?

Hon. Marc Lalonde (Minister of Energy, Mines and
Resources): Madam Speaker, at present there are no plans to build new reactors in Canada. I think it will be several months, even years before decisions are made with respect to that. As far as potential exports are concerned, the hon. member is no doubt aware of the fact that we are now negotiating with various countries, namely, Korea and Roumania, for the sale of additional reactors. This would ensure the viability of our nuclear industry and would also allow us to create new jobs which would certainly benefit all Canadians.


Mark Willson Rose: Madam Speaker, Dr. Strangelove would have been enthusiastic about a reply of that nature.


POSSIBLE ALTERNATIVES
Mark Willson Rose: Among the options offered by the EMR study to rescue the nuclear industry are the following: lowering Canada's international safeguard provisions, the milk-cow policy of building border stations to export power to the United States, and increasing federal subsidies in order to entice more provinces to build yet more nuclear reactors. Has the minister considered a no expansion policy for the atomic industry and the redirection of the hundreds of millions of dollars we are spending on this industry annually, shifting these funds into decommissioning and into waste disposal studies for the existing industry, as well as increasing encouragement incentives for conservation and a switch to alternative energy sources and technology?


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


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, my hon. colleague probably received a watered down version of the study conducted by my officials because that was one of the options mentioned. The study was conducted by a departmental official, but, as I said, it is only a draft. We will be consulting with the industry and with those concerned, including groups opposed to nuclear power. Such consultations will take place this week and the next. Afterwards, the study will be reviewed, examined and improved and hopefully we will at some time in the future be able to make public a study which will be the final result of our consultations. Until then, however, it remains a working paper enumerating various options, of which the hon. member only gave a partial list. So I would suggest that he perhaps try to get a copy under the table somewhere.


COMPENSATION TO FARMERS FOR EMBARGO ON SHIPMENTS TO RUSSIA
Mr. Charles Mayer (Portage-Marquette):: Madam Speaker, my question is for the Prime Minister. It involves the promised compensation by the government to western grain producers as a result of the grain embargo which was imposed on Russia after Russia invaded Afghanistan. The Prime Minister is involved and concerned with foreign affairs, and I think rightly so. What I would like to have from the Prime Minister is his commitment that he will become involved and concerned with foreign affairs as they affect Canadian grain producers, and see that the compensation payment which has been long
June 2, 1981

promised by his government is forthcoming as quickly as possible.


Pierre Elliott Trudeau: Madam Speaker, the hon. member talks about my involvement in foreign affairs, but he neglects to mention that we have just concluded, with the Soviet Union, the largest grain contract ever for the sale of Canadian wheat.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I do not know if members opposite are beefing because we are selling it to the Communists. Is that their point of view?


Mr. McKnight:: Not true.


Pierre Elliott Trudeau: The hon. member says "Not true".


An hon. Member:: Answer the question.


Pierre Elliott Trudeau: The question of compensation was dealt with by myself and others in this House. We have said that when we were able to ascertain the amount of damages, damages would be paid to the western grain producers.


REQUEST THAT PAYMENTS BE EXPEDITED
Charles James Mayer: Madam Speaker, the Prime Minister's retort about the Russian wheat sale has absolutely nothing whatsoever to do with the question I asked. The Prime Minister should well know that the Canadian Wheat Board in this country is responsible for negotiating sales.
We have had assurances from the Minister of Agriculture that payments will be forthcoming in the next few days-that has been going on since last August. Will the Prime Minister pursue this matter? There have been studies done by the Library of Parliament and the University of Saskatchewan. Almost a year has passed since the end of the last crop year in which the compensation payments were due, and everyone agrees that there is some money due. Will the Prime Minister pursue this matter as quickly as possible to see that these compensation payments are forthcoming as quickly as possible?


Pierre Elliott Trudeau: Madam Speaker, the hon. member says that the recent wheat sales to the Soviet Union have nothing to do with this matter. He was the one who, in the preface to his question, raised doubts about the utility of my ventures in foreign affairs. That is why I say foreign affairs had something to do-


Mr. McDermid:: He did not.


Pierre Elliott Trudeau: He did in his question. You read it. Read the "blues". That was the preface to his question.
Privilege-Mr. J. C. Munro


PRIVILEGE
Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, I have a question of privilege relating to remarks made by the Leader of the Official Opposition (Mr. Clark), who talked to the Prime Minister (Mr. Trudeau), through you, Madam Speaker, about the morality of his ministers and made all sorts of innuendoes, naming me with particular reference to a Toronto Sun article this morning.
May I tell the Leader of the Official Opposition and all hon. members of this House that until I saw The Toronto Sun article this morning I did not even know of the existence of this company. I did not even know that there was such a company, and I informed the media of that fact. I have never had any dealings whatsoever with Petro-Canada stock of any kind, or Petrofina stock of any kind, either buying it, selling it, or even talking about it to anyone. That is the situation with respect to the "garbage" in The Toronto Sun this morning.
However, since we are on the subject of political morality, it is a well-known fact that Canadians appreciate the leaders of their country displaying guts and having guts. I wonder if the Leader of the Official Opposition would care to show this House and the Canadian people that he, indeed, has guts, and instead of making innuendoes of a most debasing kind, whether he would stand up in this House and make a charge and put his integrity on the line to back that up.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, on this question of privilege, let me remind the Minister of Indian Affairs and Northern Development (Mr. Munro) that his name was brought into the debate in this chamber by his leader and his Prime Minister (Mr. Trudeau).


Some hon. Members:: That's right!


Mr. Andre:: Read the transcript!


Charles Joseph Clark: May I also tell the minister that according to the general standards that I and other hon. members of this House accept, we will naturally accept his word as a minister and as an hon. member of this House as to what he has just now said arising out of a question of privilege.
The minister asks me to make a charge. Madam Speaker, I will make a charge. The charge is that this government is afraid to have a public inquiry into all elements of the Petrofina acquisition, elements which involve a significant profit being made by a company controlled by a well-known Liberal, Mr. Maurice Strong, and elements that involve a great deal of money being lost by Canadians because of the amount that they have to pay at the gas pump and elsewhere for this acquisition of Petrofina.


Some hon. Members:: Hear, hear!

June 2, 1981
Privilege-Mr. J. C. Munro


Madam Speaker:: I see now that I have listened to the two speakers that there is no question of privilege involved, except that the point has been made that if there is a personal charge to make, it should be made. Otherwise, the House must accept the statement of the hon. Minister of Indian Affairs and Northern Development (Mr. Munro). In the absence of a charge, I guess the matter must be closed.
[ Translation]


André Ouellet: Madam Speaker, an article today in The Toronto Sun reports the following:

In a letter sent to former Petrofina chairman, Pierre Nadeau, Ouellet stated the investigation, while still not complete, would 'likely not' be made public.


Madam Speaker:: Order, please! I understand that the hon. minister may wish to continue the debate which begun during the Oral Question Period, but unless he rises on a question of privilege concerning issues arising from the debate, I cannot allow him to pursue the matter.


André Ouellet: Madam Speaker, I rise on a question of privilege which concerns me personally. During the Oral Question Period certain questions were asked by the Leader of the Official Opposition (Mr. Clark), who lacked the necessary fortitude to direct a question to me personally so that I could clarify an article published in The Toronto Sun where I was quoted inaccurately.


Madam Speaker:: Order, please! I do not believe that this constitutes a question of privilege. The minister would probably like to explain his position, but the Leader of the Official Opposition or another opposition member might ask a question later on. However, today, we cannot allow the debate to continue. The Oral Question Period has been over for five minutes already.


André Ouellet: Madam Speaker, my question of privilege is quite simple. It was alleged that the study made by my department will not be made public, but I can confirm to the House that it will be.


Madam Speaker:: I note that the minister has taken advantage of the fact that I allowed him to add to his question of privilege. He took this opportunity to announce something in the House. I am certain that hon. members will take note of this announcement and that other questions will be asked when the report is available. However, I must now put an end to what is essentially a debate.


Allan Frederick Lawrence: Madam Speaker, if Your Honour could almost automatically turn what the minister said, which was not really a question of privilege, into a ministerial statement, then I think, in fairness, the rest of us as well would then have
an opportunity to question him on something which should have been said a long time ago.


Some hon. Members:: Hear, hear!


Madam Speaker:: I am no fairy who can transform things in the House into something else.


Some hon. Members:: Oh, oh!


Madam Speaker:: That is entirely up to the minister. [Translation]


Charles Joseph Clark: Madam Speaker, the hon. member has just raised a very important question. There has been no statement on motions since this government was elected. Today, the Minister of Consumer and Corporate Affairs and Postmaster General (Mr. Ouellet) has made a statement about an issue raised during the Oral Question Period. This was not an answer because no questions were addressed to the minister. It was a policy statement, since the Prime Minister (Mr. Trudeau) replied that he was not certain about the matter, and then the minister expressed certainty. This is clearly a statement, and I believe that under our Standing Orders, it is essential for Madam Speaker to allow hon. members to reply and to ask questions, such as whether this report will be published in the next year or the next century. This is a rather important question for the House of Commons.


Madam Speaker:: The Right Hon. Leader of the Opposition must recognize that I did interrupt the hon. minister as soon as I realized that he was making a statement. He had only spoken two sentences when I interrupted him. I have to have an idea about what an hon. member is saying to the House before interrupting him. I did interrupt the minister after his second sentence. I think that this time we must really put an end to this debate.


MR. STEWART-DISTRIBUTION OF QUESTIONNAIRE TO ARMED FORCES PERSONNEL
Ronald Alexander Stewart: Madam Speaker, I rise on what I consider something that has impeded my ability to function properly as a member of this House. On October 11, 1974, at page 343 of Hansard, the then minister of national defence, the Hon. James Richardson, stated as follows:
Mr. Speaker, I also wish to confirm in unqualified terms that any member of the Armed Forces is able to write to a member of Parliament on any subject with exactly the same freedom as any other citizen of Canada.
Apparently this is not the case in 1981. In March of this year, while carrying out my duties as member of Parliament for Simcoe South, I distributed a questionnaire in my riding and to members of the Armed Forces at Base Borden concerning a very public document, the Fyffe report. This report was brought down at the request of the then minister of national defence, my colleague the hon. member for Victoria (Mr. June 2, 1981

McKinnon). I have since collaborated on the same type of questionnaire with the hon. member for Winnipeg-Assiniboine (Mr. McKenzie), who has experienced the same result.
It has been brought to my attention, Madam Speaker, that Armed Forces personnel have been ordered not to reply to this questionnaire. Despite this edict, I received almost 200 written replies, most of them signed, and dozens of telephone calls. One respondent wrote as follows:
Service personnel are instructed not to answer this questionnaire.
A second stated as follows:
My husband received your questionnaire at his office but was strongly instructed through a letter ... not to answer the form.


Madam Speaker:: Order, please. I would appreciate it if the hon. member, rather than reading these kinds of documents to me, would give me some indication that there is an official document telling members of the Armed Forces that they cannot answer the questionnaire. I am not sure that that constitutes a question of privilege, for the hon. member at any rate. It might be a matter of privilege for members of the Armed Forces but probably not a question of privilege for a Member of Parliament.
Unless the hon. member can produce a document in order to begin exposing his question of privilege that the Armed Forces have in fact and officially been asked not to answer a questionnaire, I will not hear him any longer. If he does have some more documents that he can quote, I will listen.


Ronald Alexander Stewart: Madam Speaker, the real question is, how does one carry out one's duties if people are not allowed to answer a simple questionnaire? The reason given by the Armed Forces is the Queen's rules, which I have here. I do not think the Queen's rules should take precedence over this House and a member of Parliament doing his duty.
That is the whole point. If you find there is a prima facie case, I should like to move that this question go to the proper committee for study.


Madam Speaker:: The hon. member for Winnipeg-Assiniboine (Mr. McKenzie) on the same question of privilege. I did get a notice so I will hear the hon. member.


Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam Speaker, I wish to speak on the same question of privilege. I distributed one of these questionnaires in my riding and received a fair number of them back. They have now slowed down because a directive was issued in Winnipeg to the Armed Forces.
Your Honour said you wanted to know if there had been any official statement made to Armed Forces personnel, so I will just read this brief letter that I received from a serviceman in my riding, as follows:
It was my every intent to respond to your questionnaire with the utmost sincerity. However, my superiors have informed me that I am forbidden from doing so according to Queen's Regulations and Orders for the Canadian Forces (QR & O), article 19.36 (2) (c) and (f). This article forbids the disclosure of information or opinion by any serving member.
Privilege-Mr. Stewart
That is a key point, Madam Speaker. A serviceman cannot express his opinion. The letter continues:
As you can see, in the light of this, I am not free to communicate with you on this subject regretful as this may be. I would appreciate it very much if in the course of your discussions on this topic you would maintain confidence with regard to my name and person.
Be assured nonetheless that I am a keen supporter of you and the fine work that you are doing on behalf of your constituents and the Parliament of Canada.


Some hon. Members:: Hear, hear!


A. Daniel McKenzie: Mr. Speaker, I just thought I would put that in!
The hon. member for Simcoe South (Mr. Stewart) referred to the statement made by the then minister of national defence in 1974, that members of the Armed Forces could write to a member of Parliament "on any subject with exactly the same freedom as any other citizen of Canada."
The reason the matter was raised on October 10, 1974 was because the sitting member for Egmont obtained a newsletter issued by the then chief of defence staff to the armed services instructing personnel not to write to their members of Parliament with respect to any personal problems they might have.
There is a definite conflict here, Madam Speaker. We thought that one defence minister had cleaned up the whole matter on October 11, 1974 by saying that members of the Armed Forces could write to their member of Parliament, but the Queen's Regulations are still on the order paper when they should have been removed at that time. There is definitely a question of privilege here.
Who can give us a better opinion on the Fyffe report than members of the Armed Forces? We are very interested in having their opinion.
I think we should have a statement from the Minister of National Defence (Mr. Lamontagne) to the effect that he will remove this regulation or have the subject matter referred to the defence committee so that it may be cleared up once and for all. We have two different statements from two different defence ministers or defence chiefs. I feel we have a bona fide case of privilege.


Mr. D. M. Coilenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, I note that you have suggested in recent days that one does not have to proceed with a question of privilege if the minister concerned is not present in the House. I would respectfully ask that you delay dealing with this matter until the Minister of National Defence (Mr. Lamontagne) can come to the House, since the matter deals with government policy. There have been statements on this matter in previous Parliaments. I would ask that you defer it to another day.


An hon. Member:: Why did he run out?


David Michael Collenette: I did not have any knowledge that this question was to be raised, and I believe that the Minister of National Defence did not know that it was to be raised today.

June 2, 1981
Privilege-Mr. Stewart


Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, I think the suggestion made by the parliamentary secretary is a good one. The minister was here today and so was his parliamentary secretary. I think it would be helpful if the minister were in the House and could explain the impact of the Queen's Regulations, particularly in view of the intimation as to the effect of those regulations on constituents. Naturally, you would have to wait for an explanation, but after that, as the First Commoner, you might want to look at this matter and discuss it. I have some feeling about the matter and I am going to look at some precedents myself with respect to it, because I say with respect that I think the matter may very well have an aspect of privilege to it which I would like to reserve the right to argue.
It may well be that it is the kind of thing that should be discussed by the Speaker and the minister with respect to those regulations. If there are people who have the vote but do not have the right to inform their member of Parliament so that he or she can conduct himself or herself on the floor of the House of Commons, then I think it is a rather important question going beyond merely a question of privilege.


Madam Speaker:: I should like to accommodate the parliamentary secretary with respect to allowing the minister to intervene in this question of privilege, but it is so clearly not a question of privilege to me that I think I will rule immediately. I have a tendency to do that because when members insist on the presence of the minister in order to bring up their question of privilege, I have had the experience that the purpose in most cases is to turn the matter into a debate.
I have a precedent here from which I can quote. I think it will allow hon. members to agree with me that this does not constitute a prima facie case of privilege. It is a case on which Speaker Jerome ruled on February 20, 1975 and had to do with Air Canada and a labour dispute, at which time the corporation had asked its members not to answer a questionnaire. So the situation is quite similar. The then Speaker ruled that he could not extend the definition of a question of privilege to that particular circumstance, and he said as follows:
The consequences of extending that definition of privilege to innumerable areas outside this chamber into which the work of an MP might carry him, and particularly to the great number of grievances he might encounter in the course of that work, would run contrary to the basic concept of privilege.
Speaker Jerome went on to say concerning the definition of privilege that he could not find that there had been an impediment to the member of Parliament in his work because certain members had not been allowed to answer a questionnaire.
I would say that this has to do with the administration and the rules within the Armed Forces. If hon. members feel that those rules are not helpful to them in the carrying out of their work, they should file a grievance in the appropriate place, that is to say, with the minister. This matter should be discussed with the minister either in the House or elsewhere.
The hon. member for Nepean-Carleton (Mr. Baker) I think was very close to admitting that it might not be a question of privilege. My judgment now is that it is not a question of privilege.
If the hon. member wants the minister to explain the rules and procedures within the Armed Forces, then I think he will recognize that can be done in the House on other occasions, that it is debate but does not constitute a prima facie case of privilege.


Mr. Taylor:: Madam Speaker, I rise on a point of order. Does that ruling mean that members of the Armed Forces are second-class citizens and may not contact a member of Parliament?


Madam Speaker:: No, it does not mean that.


MR. MCKINNON-NOTICE OF QUESTION TO BE RAISED
Allan Bruce McKinnon: Madam Speaker, I do not intend to speak on the substance of that question of privilege. However, one day last week I rose in my place and stated that I was going to raise a question of privilege on the following day concerning the Minister of National Defence. Yet the minister was again absent from the House. Is there any way by which either a member who feels he has had his privilege abused could warn a minister to be in the House for that specific reason and therefore expect the minister's attendance? It is well known that we must submit a letter to you, Madam Speaker, detailing the subject at issue. Is there any way by which your office could warn a minister of an impending question of privilege?


Madam Speaker:: I think the hon. member is right in wanting to expose his question of privilege as much as possible when the minister is present in the House, but there is no way by which the Chair can force a minister to come into the House or to act as a messenger for members.
Notice of a question of privilege is very confidential. When I receive a statement from a member, I refer it to no one but keep it to myself. I ask for the statement because I want to prepare myself for the particular question of privilege and the ruling on it in the House. However, nothing prevents hon. members from phoning a minister's office or coming to whatever arrangement they want to with a minister. That is outside of the knowledge of the Chair and is something in which the Chair should not intervene.


MR. FORREST ALL-NOTICE OF QUESTION TO BE RAISED
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Madam Speaker, I would not wish to comment in any way upon the ruling which you have just rendered for our benefit. However, I would like to serve notice, because the question of privilege, with all deference, I think has been misconstrued. The matter has been dealt with in this chamber. If I am incorrect in that, then at least it has been dealt with in committee. However, I will refresh my memory about it.
June 2, 1981

At a later time, then, I will rise on a question of privilege. It does not necessarily affect my privilege beyond that with which you have already dealt; I accept that. Nevertheless, it does indeed affect the privilege of 87,000 men and women who are not allowed to communicate, which gives rise to a question of privilege. I appreciate that you have put it in one context, but I reserve the right to view it in an other context.
Mladam Speaker: I am sure the hon. member realizes that some 80,000 members of the Armed Forces do not participate in the privileges as defined relating to members of Parliament. Those are two different matters. If the hon. member does have a question of privilege based on something else, I can hear him at another time. He does not have to give me oral notice but should send me a statement in writing.


POINT OF ORDER
Hon. Stanley Knowles (Winnipeg North Centre):: Madam Speaker, it was my intention to raise a point of order this afternoon with respect to something which happened during the adjournment debate last night. However, the two ministers who are involved, although they were here, are not now in the chamber. I simply wish to reserve the right to raise the point at a later date.


PRIVILEGE
Mr. Tom Cossitt (Leeds-Grenville):: Madam Speaker, my question of privilege arises from an incident which occurred in the Centre Block of the Parliament Buildings yesterday, June 1. May I briefly relate the incident as quickly as I can and then proceed to state quickly how it interferes with my privileges and with the privileges of other members of this House.
At approximately 2.30 p.m. yesterday a group of school children were being escorted through this building by a summer student tour guide, who I understand is a very competent person. Her name is Lorraine Seguin, whose home I believe is in the electoral district of Timiskaming in northern Ontario. Suddenly, a man who had been accompanying the group, without identifying himself to anyone as a senior employee of the House of Commons, threw his hands up in the air and commenced to harangue the guide who was addressing the group in French. Apparently this group was predominantly French-speaking. Miss Seguin is quite competent both in the French language and in the English language. In front of all of these people, the man in question reportedly said to her: "What you say is not true. Your French is no good. You do not know what you are talking about. I will remember you after this is over."
Privilege-Mr. Cossitt
Those present were not only embarrassed but shocked. The exhibition was not a credit to the House of Commons. It was certainly not a credit to the competent people who work within the House. The official involved was a man by the name of Jean-Noel Tremblay who, I understand, holds the position of Director of Public Relations for the House of Commons. This is a position I did not know existed, nor have I ever heard of a competition being held for it. He is a former Progressive Conservative member of this House, which I readily admit. He is also a former member of the Union Nationale cabinet in Quebec.
Having led into this question of privilege by describing the incident which interfered with the performance of the guide's duties, I point out that there were other groups in the building at the time. One of these groups was from my constituency. There were other groups here who, I am sure, were from constituencies of other members. It has always been the privilege of a member of the House of Commons to invite or to host groups who are visiting these premises and to see that they are courteously treated and advised of what goes on here-


Madam Speaker:: Order. It seems to me that the hon. member is complaining about an incident which took place between two employees of the House of Commons. The hon. member should know that a matter such as that should not be raised in the House. Rather, he should write to me or talk to me in my office so that proper redress can be taken, if such redress is necessary. It is certainly not a question that should be discussed in the House.
I hear the hon. member, but I ask him what other question of privilege is there? The hon. member must very quickly tell me what the privilege is. Members can still bring groups to the House of Commons. There are occasions when some discourtesy is displayed but we always try to correct it.


Thomas Charles Cossitt: Madam Speaker, I will state my question of privilege very briefly. One of our privileges as members of Parliament is to bring groups to the Parliament Buildings, and we are permitted to help school children learn about the Government of Canada. I related the incident first simply to show what happened so I could go on to explain my question of privilege. A group from my riding was interfered with in that they could not proceed until this incident was over. I know there were other groups interfered with. Certainly the group involved was interfered with.
Could you give us some idea by way of clarification as to what on earth this Jean Noel Tremblay was doing in the House of Commons? I have not heard of his being hired either through an announcement or anything else, yet he is called the Director of Public Relations. Yesterday he interfered with a group which, in my opinion, was very bad public relations-


Madam Speaker:: Order, please. If the hon. member wants to come to my office, I will give him full details of whatever functions people in the House occupy. I am telling the hon. member that this does not constitute a question of privilege, although he is relating it to the functions of a member. I said

June 2, 1981
Tabling of Documents
before that one has to distinguish between the essential functions of a member of Parliament and other functions he might choose to perform but which do not qualify to be called essential functions.
It is very desirable that groups be brought to the House of Commons to visit Parliament. It is an excellent education. I do everything I can to make the tours interesting for our visitors. I try to do everything in my power to facilitate those tours. If something went wrong, I would be glad to look into it. I assure the hon. member I will take the proper redress, if redress must be taken.



ROUTINE PROCEEDINGS


Marc Lalonde: Madam Speaker, I wish to table two notices of Ways and Means Motions to amend the Petroleum Administration Act.


Michael Holcombe Wilson: Madam Speaker, I rise on a point of order in connection with the notice of a ways and means motion just tabled by the Minister of Energy, Mines and Resources (Mr. Lalonde). Over the past year a somewhat questionable practice has crept into the activities of the House. On four or possibly five occasions the minister introduced as a ways and means motion a levy which was in fact a tax. I raise this at this time because, by doing it in this manner, there is no opportunity for those on this side of the House to question the minister as to the nature of the tax and the necessity for it.
I believe the minister owes the House an explanation. As I understand it from the calculations I have done, the various means which the government has at its disposal for financing the cost of the subsidy to maintain a single price for energy in this country have provided the government with a surplus of $250 million. Therefore, there is no basis at this time for introducing an additional tax which would further supplement that $250 million surplus.
It is important that the minister stand in his place and make comments as to why it is necessary to introduce this tax at this time. The minister should state why it is necessary to impose this on the Canadian people at this time and explain the future direction this tax will take.


Madam Speaker:: I refer the hon. member to Standing Order 60(1) which reads:
A notice of a Ways and Means motion may be laid upon the Table of the Flouse at any time during a sitting by a Minister of the Crown,-
That is exactly what has happened. The Standing Order continues:
-but such a motion may not be proposed in the same sitting.
The minister has done exactly what the Standing Order requires him to do. Therefore, I cannot accept the hon. member's point of order.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David Michael Collenette: Madam Speaker, the following questions will be answered today: Nos. 2,083,2,216,2,300,2,332, 2,406 and 2,471.


Mr. Gilchrist: 1.	Has the government considered the request of the Canadian Association of University Teachers to abolish federal sales tax on all university purchases rather than continuing the present practice of only allowing an exemption on certain items used directly in teaching and research and, if not, for what reasons?
2.	Will the government, in consultation with manufacturers and user groups, establish a list of chemicals available from Canadian production in order to allow all others duty-free entry into Canada thus avoiding the need to create a huge bureaucracy to consider the merits of each individual chemical which Financially penalize university research and, if not, for what reasons?


Pierre Bussières: 1.	The Excise Tax Act now provides relief from the federal sales tax for a range of goods designed for use directly in teaching and research. Extending relief to all goods acquired by educational institutions would entail a significant revenue cost and thus does not appear feasible given the current fiscal position of the government. As well, an extension to all goods would be difficult to administer.
2.	This issue has been and continues to be the subject of extensive discussions between representatives of universities, manufacturers and government departments. There are several Canadian manufacturers who specialize in the production of fine chemicals for laboratory use. It has been estimated that these producers are in a position to supply approximately 90 per cent, by value, of the chemicals purchased by universities for use directly in teaching or research. The remaining 10 per cent is made up of several thousands of different chemicals, most of which are used only in very small volumes by universities. It would be very costly for customs officials to check each individual importation against a list of chemicals available in Canada to determine whether it should be allowed duty-free entry or whether it should be subject to duty. Officials are now working with representatives of the Canadian Association of University Business Officers to identify specific chemicals not
June 2, 1981

available in Canada on which the duty would represent a substantial cost to the universities. When these have been identified, action will be taken to provide for their duty-free entry under the Chemicals and Plastics Tariff Reduction Order.


Mr. Miller: 1.	Did Horizon Insulation Limited insulate any homes under CHIP and, if so, how many?
2.	Were cheques issued by CHIP to home owners endorsed over to Horizon Insulation Limited and, if so, how many and what was their value?
3.	How many homes insulated by the company were inspected by CMHC and how many were judged to comply with CMHC standards?
4.	(a) How many bags of insulation were used in the homes by the company and what square footage was to be covered (b) did the amount of insulation used for the square footage comply with CMHC standards?
5.	Were payments made to the home owners before the work was completed by the company and, if so, was this acceptable under CHIP provisions?


Hon. Paul J. Cosgrove (Minister of Public Works):: I am advised by Canada Mortgage and Housing Corporation as follows:
1.	Yes but the exact number is not available.
2,	3, 4 and 5. The computer system is not programmed to provide this information. The information could only be obtained through a manual check of the over 950,000 CHIP applications approved since the inception of the program. The labour costs involved in such a task would be prohibitive.


Mr. Halliday: For what reason does the government's fiscal year run from April 1 to March 31, rather than from January 1 to December 31?


Pierre Bussières: The
fiscal years are chosen for reasons of administrative convenience. The federal government's fiscal year end was changed from June 30 to March 31 in 1906 after Parliament began sitting for a longer period each year. This change, to March 31, made it possible to prepare the public accounts for tabling while the House was still in session. There have been no convincing reasons put forward since that date to warrant changing the fiscal year end to another date. It is not uncommon for the fiscal year of governments to differ from the calendar year. All provincial governments in Canada, and many governments of other industrialized countries, have chosen fiscal years which differ from the calendar year.


Mr. Stewart: 1.	Did the Department of Transport purchase a mobile home valued at $42,390 from City Motors, Corner Brook, Newfoundland and, if so, for what purpose?
2.	Were public tenders called and, if so, what firms or companies submitted bids and what was the amount in each case?
Order Paper Questions


Hon.   J.-J. Blais@Minister of Supply and Services: 1.	A contract in the amount of $42,390 was awarded by the Department of Supply and Services to City Motors, Corner Brook, Newfoundland, on behalf of the Department of Transport for the supply of two mobile homes to be used as housing accommodation at Deer Lake, Nfld.
2.	No. However bids (requests for proposals) were solicited from 13 firms listed on official Departmental Source Lists. In response to this solicitation three firms submitted bids and the details are as follows:
(i)	City Motors (Nfld) Ltd., Corner Brook Nfld.
$21,195 each.
(ii)	Lush Ltd., St. John's Nfld.-bid on two models:
(a)	$22,835 each;
(b)	$23,415 each.
(iii)	Williams Mobile Homes Ltd., Gould, Nfld.-
$25,800 each.


Mr. Herbert: 1.	By province, what was the amount paid by the Canada Mortgage and Housing Corporation in the last year for which figures are available for all ongoing operating subsidy costs for public housing?
2.	What number of units were subsidized in each province?


Paul James Cosgrove: I am advised by Canada Mortgage and Housing Corporation as follows: see list below.
Federal Subsidies Paid on Public Housing Units Under the National Housing Act, by Province, 1980
	Federal	No. of
	Contributions	Units
	Paid	Subsidized'
	$000	
Newfoundland	3,480	3,713Nova Scotia	10,159	6,929Prince Edward Island	2,117	788New Brunswick	9,108	4,155Quebec	35,339	31,034Ontario	130,582	107,518Manitoba	16,598	14,654Saskatchewan	8,685	6,843Alberta	13,168	10,283British Columbia	30,910	15,454Yukon	665	319North West Territories	6,098	1,327Canada	266,909	203,017
* Units under administration as at December 31, 1979.
Note: Subsidy payments made in 1980 are paid against 1979 operating
expenses and may also be for operating expenses for years prior to 1979.

June 2, 1981
Excise Tax


Mr. McKinnon: Did the Department of National Defence award a $386,390 contract to SED Systems Inc. for design and fabrication of the Canadian Mission Control Centre for the SARSAT program and, if so, on what date and at what location will the Centre be built?


Hon.   J.-J. Blais@Minister of Supply and Services: The Department of Supply and Services placed a $386,390 contract on behalf of the Department of National Defence for the design and fabrication of the Canadian Mission Control Centre for the SARSAT program.
The delivery date of the Canadian Mission Control Centre is February 10, 1982.
The control centre which is the computer based SARSAT system controller, is to be delivered and installed in the Rescue Co-ordination Centre at CFB Trenton, Astra, Ontario.


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


Madam Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, May 28, consideration of Bill C-57, to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs, and motions Nos. 1 and 3 (Mr. Blenkarn).
Mr. Gordon Towers (Red Deer):: Mr. Speaker, in the few minutes I have left in the time allotted to me, I want to bring to the attention of the House the fact that I take exception to the statement by the Minister of Energy, Mines and Resources (Mr. Lalonde) that he is trying to keep down the cost of oil and gas in Canada and that Canadians are enjoying a cheaper price than people in other parts of the world. Naturally they are to a degree because the province of Alberta is prepared to grant that concession. Nevertheless, there are two or three points that have to be made.
Canadians must be aware of the cost of this subsidy, this one-price system across Canada. The federal government is paying out $3.6 billion each year for this subsidy so that there will be this one price across Canada. This works out to approximately $150 per person, or $600 per family. Normally a family is referred to as four persons, which seems reasonable.
With each family paying $600 a year to provide that subsidy, plus additional taxes, over a four-year period that works out to approximately $4,500. It is one of those instances where the minister has not been honest with the Canadian people. When you consider that the people are taxed three and a half cents a gallon for Petrofina, plus the oil subsidy, it will cost them about $4,500 over four years. The Canadian people should be aware of that.


Mr. Sid Parker (Kootenay East-Revelstoke):: Mr. Speaker,
I welcome the opportunity to speak on Bill C-57, to amend the Excise Tax Act and the Excise Act to provide for a revenue tax with respect to petroleum and gas. I rise to express my concern over the provisions in this bill which will raise the excise tax on beer and ale products far ahead of the relative tax increases on hard liquor.
I understand this tax will increase 29 per cent for beer, 155 per cent for wine and 6 per cent for hard liquor. This government's economic policies and tax policies are enough to drive anyone to drink. However, if the Canadian public is going to turn to drinking, the situation should be improved so that there will be more of a concession for soft liquor rather than hard liquor. As a result of the extra cost of the excise tax, the transportation of beer and so on, the average worker will be forced to change his style of drinking from beer to hard liquor.
As we know, the brewery industry creates a lot of employment. I would like to relate the figures for British Columbia. The B.C. beer industry employs directly 1,160 people, the B.C. winery employs 309 and the B.C. distillers 389 people. It is obvious that the beer industry employs almost twice as many people, to say nothing of those employed by related industries, including return of bottles and other activities connected with serving beer.
Everyone knows that beer is the drink of the working people. The working people expect to be able to relate more to soft liquors than hard liquors. It seems to me that only the Canadian government would adopt a policy changing the emphasis from soft liquor to hard liquor, a policy which encourages people to use hard liquor rather than soft liquor. The government appears to be doing this by placing a heavy tax burden on beer drinkers in Canada and a lesser tax burden on those who drink hard liquor. I think this is wrong, and I am sure we will increase social problems if we allow this kind of taxation to take place. People will turn to the use of hard liquor and we will see an increase in related problems, including drinking and driving and more alcoholism.
I should like to make a few comments based on a study which has already been carried out. It indicates that we have already seen the impact of this change in consumer drinking habits. Since the change was announced last April, hard liquor sales have increased by nearly 5 per cent while beer sales have dropped off 3.6 per cent and wine sales have decreased at least 2 per cent. I suggest this pattern will have an effect on the health of Canadians and increase traffic dangers because of an increase in alcoholism.

June 2, 1981

It is important to note that beer is the traditional drink of the average working Canadian. We cannot overemphasize that fact. I would urge the government to reconsider this bill before us because it will result in heavier taxation of the working people of Canada, which in turn will change their drinking habits.
The impact of this measure on the agricultural sector will also be severe. Some 63 per cent of agricultural products used by the liquor industry in Canada is used by the brewery industry. If this trend in decreasing beer sales continues, there will be a very severe impact on the producers of hops who supply the breweries. We can ill afford to see this decrease in our agricultural base.
We should be encouraging people to produce more agricultural products and to increase our agricultural base, particularly those who supply our brewery industry which uses such a significant amount of agricultural produce. Last year brewery purchases of agricultural products amounted to almost $100 million.
How much harder can we hit the working people? We are increasing costs to the brewery industry not only by increasing taxes, but also through the increase in the cost of energy and the cost of transporting their products in this province and throughout Canada.
Let me also comment on the indexation formula in this bill. It is the government's intention to increase indexation automatically without having to come back for parliamentary approval. That is not good enough. We do not want to see any increase in taxes without parliamentary approval. The fact that this government intends to index taxation on an ongoing, automatic basis without having to come back to Parliament for consideration and debate, and without allowing representatives of the industry to point out the difficulties such an increase will have, is something I do not think any member of Parliament should allow to happen.
It is difficult enough to try to make changes when we are allowed to consider and debate a taxation measure, but to allow indexing of taxation to take place automatically, with its consequential impact on the brewery industry, or on any other industry, without bringing a bill before Parliament for debate is unacceptable. We do not agree with that aspect of this measure.
The second part of our amendment would eliminate all taxes on liquor as proposed in this bill. We are saying the government should go back to the drawing board and come up with a tax system which will discourage increased use of hard liquor and encourage growth of the Canadian brewery industry. If it is the intention of people to drink alcoholic products, we would like to see them drink soft liquors. Our taxation system should be directed to making it easier for working people to drink soft liquors rather than hard liquors, which appears now to be the trend. We feel this is right because of the effect to use of hard liquor can have on the individual and because of the increase in social problems within the family, within the community and throughout Canada.
Excise Tax
It has been a privilege to speak on this bill, Mr. Speaker. Thank you very much.


Mr. Bill Kempling (Burlington):: Mr. Speaker, I should like to add some comments to the debate on this bill. In particular, I want to speak to the amendments which deal with the definition of "manufacturing". I want to demonstrate to members what happens when definitions are loose and imprecise, and when bureaucrats decide to play games with definitions such as that of manufacturing.
In 1977 a Toronto-based entrepreneur decided to become a manufacturer of bicycles. The company involved was long established in the bicycle trade. The management and senior staff could be classed as experts on bicycles. The company was started by Harry D. Shields and it bore his name as a limited liability private corporation. Mr. Shields, Sr. had retired from active participation in the business and the company was being managed and operated by his son Lome Shields, who had grown up in the business, so to speak. He would be considered an expert in the Canadian market and in the sourcing of bicycles and components from suppliers anywhere in the world.
At the time of the events I am going to relate the bicycle manufacturing industry in Canada was in serious condition. The largest manufacturer, CCM, had posted several years of losses and the owners believed the company would not survive if some tariff protection was not put in place. After a hearing before the Anti-dumping Tribunal a tariff was placed against bicycles manufactured in South Korea and Taiwan.
Mr. Shields' knowledge of the Canadian market alerted him to the possibility that the Anti-dumping Tribunal would bring down a decision against imported bicycles from Taiwan and South Korea. He made a basic decision, sir, to become a manufacturer of bicycles. He set about organizing his venture. He leased a plant, acquired machinery and began assembling a staff to get production off the ground.
In manufacturing, if you are large enough you can design a product, build a prototype, test it, source components, place orders to subcontractors for some of those components and begin to manufacture. That is the textbook approach.
In Lome Shields' case he knew the market because he had been in it for years. He knew he could sell all the bicycles he could make, so his task was to get hold of that market first and then search around for Canadian components after he had a good hold on the market. Like most manufacturers, his market sense told him it would be more profitable if he could ship from the end of his production line to his customers rather than build to inventory. He had pre-sold a year's production on this basis.
With all the excitement and pressure to get his operation off the ground, Mr. Shields had not reckoned with the bureaucracy of the Department of National Revenue. There has been an ongoing debate between Revenue Canada and the Department of Industry, Trade and Commerce regarding the difference between manufacturing, assembling, processing and producing. If we go through the numerous statutes, we will find a

June 2, 1981
Excise Tax
variety of definitions which are usually qualified by the words "for the purposes of the act". If we go through the rulings of the Supreme Court of Canada, the appeal courts of the provinces, the Tariff Board and the Anti-dumping Tribunal, we will see this same pattern recurring regarding mix-ups and misunderstandings of definitions.
If we pursue the matter further through regulations and rulings, we will find another maze of meanings which could be shaded, tilted, twisted or made to stick merely by adding the words "for the purposes of the act". For example, if the words "for the purposes of the act" were put in, we could say that all apples are oranges-and that is just about the way some things happen.
Some rulings have no statutory or regulatory authority. They are departmental rulings whose authorities are ministerial memos. This is where Lome Shields ran afoul of Revenue Canada. Mr. Shields called himself a manufacturer. Revenue Canada's excise division called him a manufacturer of bicycles and gave him an excise tax licence. He was allowed to import $100,000 worth of production equipment duty-free because it was to be used to manufacture bicycles. The Department of Industry, Trade and Commerce said he was a manufacturer and allowed him to label the product "Made in Canada". Canada Manpower gave him a $15,000 grant to teach new employees to manufacture bicycles. Statistics Canada considered Lome Shields a sporting goods manufacturer. The Ontario department of labour classed him as a manufacturer.
But Mr. Shields had not reckoned with a National Revenue dominion customs appraiser, Mr. John Peillard, who was doing his job. Mr. Peillard decided that Mr. Shields was an assembler of bicycles and thereby levied a 17.5 per cent duty on all parts he imported for his bicycles. In spite of the fact that all Mr. Shields' competitors were importing the same components duty free, Mr. Shields could not get Mr. Peillard to move from his decision. Mr. Peillard said that there was a ruling that 20 per cent Canadian content had to be evident before Mr. Shields could call himself a manufacturer. But he did not show the ruling to Mr. Shields. It was written, he said, in a ministerial memo, and that memo was confidential.
I told hon. members that I believe Mr. Shields had pre-sold a year's production based on an existing tariff under which manufacturers imported components duty free. To confound the matter further, it would have been possible, believe it or not, to import a complete bicycle at 16.5 per cent, and yet the components were bearing a 17.5 per cent duty. However, Mr. Shields' plan was to increase his Canadian content gradually as his market grew. He could offer subcontractors sufficient volumes to warrant tooling for certain components.
An uncontrollable hidden factor was foreign exchange. The dollar was unstable against most European and Asian currencies, but Shields did not know that was to play a part in the calculation of the 20 per cent Canadian content. If the dollar went down, the Canadian content would decline. Revenue Canada could then collect 17.5 per cent, assuming he reached
the 20 per cent. So aside from competition in the marketplace, all the problems of starting up a manufacturing company, training people, arranging financing and so forth, Mr. Shields had to deal with a confidential ruling, the contents of which could not be revealed to him, which would add a 17.5 per cent duty to several components he used in the manufacture of his product. The Revenue Canada official told him that the ruling was in a ministerial memo which was confidential. He could not see the memo, he could be told only the gist of it; but even if Mr. Shields was able to prove Canadian content, he still had to contend with the Canadian dollar. A drop in the dollar would cause the tariff to be imposed.
There was a further penalty. The Revenue Canada official had the final say as to what constituted 20 per cent Canadian content. For instance, he would not allow freight, overhead, packaging or profit to be part of the cost.
In a country which is crying out for manufacturing and which has a terrible current account and balance of payments problem, can hon. members believe that a manufacturer would, could or should have to jump through these hoops in order to do business?
Of course, the result of the imposition of the 17.5 per cent duty on the imported components of Mr. Shields' bicycles meant that a calculated profit became a loss. Customs duties of $310,000 meant that on every bicycle produced money was lost. After a period of time Mr. Shields' bankers decided they could no longer finance the operation. Applications were made by Mr. Shields to the Department of Industry, Trade and Commerce for assistance under the enterprise development program, but they came to nothing because the EDP had already mounted a $7.5 million rescue mission respecting CCM. What Mr. Shields did not know was that part of the deal was that the program would not fund an operation competing with CCM.
As Mr. Shields twisted and dangled on the bureaucratic string, various government departments were sealing his fate. He appealed to the then minister of national revenue, who is now a senator in the other place. The then minister saw the injustice. He could see that an even-handed approach to the problem was not being taken. He told Mr. Shields he would sort out the details and write to him. After numerous telephone calls to the minister, Shields received a letter prepared by the bureaucracy over the minister's signature which told him that no help would be forthcoming. The $310,000 customs duty had done its job. Seeing no relief, the banks placed Harry D. Shields Limited in receivership.
Lome Shields was not finished, however. He launched an appeal to the Tariff Board and, some 20 months later, the board heard his case. I recommend that everyone read this case. It is appeal No. 1498 and was heard October 8 and 9 of 1979. The Tariff Board ruled that there was no regulatory or statutory basis for the 20 per cent Canadian content, and Revenue Canada had to refund the duties levied against Mr. Shields' company. What that meant was that $230,000 was sent to the receiver in bankruptcy, and a further $80,000 in customs duties was cancelled. But it was too late. Harry D.
June 2, 1981

Shields Limited was closed. It was bankrupt. Approximately one hundred people lost their jobs. Several suppliers went unpaid, and the tragedy is that an enterprise which came out of the shoot alive and kicking was to die because of the stupidity and rigidity of the bureaucracy. Somebody decided that CCM would live and that Harry D. Shields would be strangled in the web of the bureaucracy.
What happened to Lome Shields? He lost his business. In order to live he sold most of his personal assets. He had a nervous breakdown. His father had a stroke which the doctors say was a direct result of stress and the bankruptcy of the business. The Department of National Revenue held $230,000 of Lome Shields' money for more than two years. The government used that money. When the Tariff Board said there was no statutory or regulatory basis for collecting the $230,000, the government returned the money, but no interest was paid. It was just a cheque in an envelope.
We hear much in this House about justice, about helping those who cannot help themselves, about the just society, about participatory democracy and about a charter of rights. Well, just ask Lome Shields how he feels about those cheap slogans which were born in an advertising office to adorn a speech or an election platform but, when put to the test, were cold and meaningless.
To Lome Shields, there is no democracy in Canada. If a bureaucrat decides you are to be taxed, you are taxed whether it is legal or not. Lome Shields learned that we are not all equal. If your business has loans guaranteed by the government, then you are more equal than a competitor who does not have those guarantees.
To the government, the competition policy means that the government eliminates competition from those who might challenge a company with loans guaranteed by the government, as they did with Harry D. Shields Ltd. And what happened to Mr. Peillard, the Dominion Customs appraiser? He was transferred to the electrical industry sector. One hundred people lost their jobs.
This is not, Mr. Speaker, an isolated case. There are many more people who have been turned off by imprecise definitions that vary from statute to statute, regulation to regulation. That is why I urge the government members to support our amendments and then follow through by placing the definitions of "manufacturing", "assembling", "processing" and "producing" before the committee of this House for resolution. Let us make a move against the bureaucracy so we will not have a repeat of the Lome Shields affair.
There are untold numbers of businessmen in Canada who live in fear of the government bureaucracy. Those businessmen and thousands more who will follow them are part of the solution to the economic problem we face. They are part of the solution to the unemployment problem. More than one million unemployed Canadians want that problem solved.
Businessmen who live in fear of the bureaucracy will tell you horror stories. When I asked some of them: "Why do you not
Excise Tax
speak out?" one of them replied: "Look, I do not want a tax job done on me". That is pretty shattering. When I tried to establish that is not the way Revenue Canada operates, this is what they replied: "Those guys have all the definitions and regulations and rulings, and they twist and turn them to suit the statutes and regulations". And then he went on the say: "For example, take the term 'manufacturing' "-the very thing we are talking about today. You see, Mr. Speaker, it comes back from many sources. If the government believes that a competitive market serves the consumer best, it will take a new look at many of the regulations and procedures.
When the bureaucracy acts in such a way that it makes loans, grants or loan guarantees to one industry and then hassles that industry's competitors, it effectively eliminates any choice for the consumer, and that is what happened to Lome Shields. He knew the market, he knew what would sell, he was trying to serve that market but he was frustrated in his endeavours.
There are many ways to handle the situation. The government could have said, as they did to the automobile industry, "Here is your Canadian content; we want a commitment from you that you will increase the Canadian component value on a schedule so that you will work toward an increasing Canadian content over a period of time". However, regardless of the method, it must be evenhanded. There is a constant battle over tariff rules and interpretations. You might recall a few months ago a number of businessmen from Manitoba descended on Ottawa because they had to pay a higher rate of duty on automotive products in their part of Canada than did businessmen in the same trade in Ontario. And this was just the result of an interpretation by people at the port of entry.
I have put forward to the members of the government a proposal that they do not support the change in the definition of "manufacturing", that they urge the minister to withdraw this section and refer it to a standing committee of this House, and that we begin to sort out the definitions of "manufacturing", "assembling", "processing" and "producing". You see, Mr. Speaker, I have confidence that we in this House have sufficient talent on all sides to solve this problem. I would like us to do that and to hand it back to the bureaucracy with the intruction that these are the definitions that they must use, and to get on with it.
In conclusion, let me say there are those who believe that there are two continuous struggles in this country. One is between the political parties whose ideology may differ, and there is an opportunity, as we know, to sort that out at election time. However, the real battle is between the government bureaucracy and the elected representatives of the people, and that is the battle we all must begin to fight. The bureaucracy is best served when the political battle is hot and when the party in power has a passive back bench.
I have issued the challenge, Mr. Speaker, to the government members. Now let us see if they are equal to the challenge and the task.

June 2, 1981
10178_______________________________________
Excise Tax


BUSINESS OF THE HOUSE
David Michael Collenette: Mr. Speaker, as you know, under our House order of last Friday there will be two deferred votes this evening on Bill C-61. I am sorry, it is one deferred vote on Bill C-61. As a result of discussions between the parties, it has been agreed that that vote will be taken at 9.45 p.m. instead of ten o'clock.


William James Kempling: Yes, Mr. Speaker, we have had discussions and we concur that the vote will be taken at 9.45 p.m.


Stanley Howard Knowles: Yes, Mr. Speaker, it was agreed that the vote be deferred to a time to be set by the House leaders and we have agreed on 9.45 p.m. I do not object to two votes being taken but I think that technically only one vote was set for tonight.


Mr. Deputy Speaker:: The hon. member is perfectly correct; one vote at 9.45 p.m. tonight.


EXCISE TAX ACT AND EXCISE ACT
[Stage Direction]
The House resumed consideration of Bill C-57, to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs, and motions Nos. 1 and 3 (Mr. Blenkarn).
Hon. Bud Cullen (Sarnia-Lambton):: Mr. Speaker, when the debate on report stage of this bill began, the hon. member for Edmonton West (Mr. Lambert) made what I thought was a good suggestion, given the number of amendments we have, namely that we consider the report stage as something like almost a second reading and then carry on with the vote. I do not know whether I have missed something in the interim, but it seems to me that seems to be the policy we are following. I do not know what the quid pro quo is. The other problem that you have is that if I have an amendment, and I happen to have one-


Mr. Deputy Speaker:: Order, please. The House is debating the first and third amendment which by decision of the Speaker are grouped for debate.


A. Daniel McKenzie: Mr. Speaker, I am greatly saddened by many parts of Bill C-57, to amend the Excise Tax Act. Time does not permit me to expose all of the almost punitive provisions that are contained in this act. However, I will focus in on one of the greediest parts of the bill.
I should say at the outset that I am astounded by the lack of feeling and understanding shown by the Liberal government in its attempt to index taxes on beer, wine and spirits. By no means am I suggesting that the Liberal government has probably driven thousands of Canadians to drink-maybe it has. Rather, my message is that the Liberals are discriminating against those Canadians who do like to partake every once in a while. With this hew and unprecedented indexing of taxes on beer, wines and spirits, Canadians can expect to pay up to $23.64 for a case of beer. This is a disgraceful increase of close to 160 per cent. Not only does the government seem to want to drive the cost of everyday goods and services up and up, but it also appears to want to soak Canadians for every penny it can get.
The government has been hearing a great deal lately from the opposition about inflation; and well they should. Inflation at 12.6 per cent, a new modern day record, is not a record that the Liberals should be proud of. The problem is, however, that the Grits seem bent on stimulating, not slowing down, this rapid climb toward world fame and lack of fortune. What does this mean for the average working Canadian? It means their dollar buys about one third as much as it did in 1971. They must pay about 7 per cent more for normal borrowing privileges than they had to pay when the Conservatives were in power. They have to pay about 60 cents more per gallon for gasoline and they are paying 15.2 per cent more just to eat than they had to pay last year. Now the Liberals are asking average Canadians to turn their pockets inside out and empty them just to buy a bottle of beer. When are the Grits going to get off the backs of the little guy and girl? That is a good question and I will give some of the answers right now.
The Liberals only have one solution to their years and years of overspending. They must raise more revenues to pay for their blank cheque spending habits. They will force average Canadians to fork over more and more money through a hidden tax which will be tacked on year after year, with no parliamentary say or control over it, and this is a very dangerous precedent.
The finance minister has said that the tax to be applied to this "all-beverage" class is simply a percentage tax and is therefore like many other levies imposed by the government. I submit, Mr. Speaker, that this is a percentage tax. It is not, as the minister has claimed in this House, an ad valorem tax. In the strict sense an ad valorem tax is a constant percentage of the total sale price which is tacked on year after year. This percentage tax is changed only after all-party consultation and parliamentary voting has taken place.
This new scheme which is being deviously plotted by the Liberals would result in a submerged tax which would be indexed to the CPI rate of the all-beverage group. This means that whenever the price of production, the price of raw materials, the price of marketing, or any other price indicator, goes up by a certain percentage, the tax on the beverage will go up by a corresponding amount. This will amount to a piling
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on of taxes and, eventually, will probably force one of the government's main income earners out of business.
Indexation does not necessarily have to be a bad thing. For example, indexation of personal income tax was introduced at the request of Mr. Robert Stanfield to protect taxpayers from inflation and to attempt to instil in the government better fiscal management and discipline. The government was not to profit from inflation by automatically collecting higher revenues from people because they obtained cost of living increases to keep up with inflation. By indexing personal income tax the government forced itself to manage the economy better, so that it could collect more revenue based on real wage gains. As members know, the government has been trying hard to do away with indexation of personal income tax and we in the official opposition have been trying to stop it.
By indexing taxes on spirits the government is managing to do exactly the opposite of what indexation of personal income tax is doing. It is taking advantage of a formula which is meant to protect the consumer against inflation and fiscal mismanagement. Through the indexation of taxes on goods the government can not only protect its revenues but will be taxing people on inflation and doing it without referring the matter to Parliament. It will also be creating a thicker smokescreen which will hide from public scrutiny its lack of policies to fight inflation.
The Minister of Finance (Mr. MacEachen) has said that this is just another percentage tax. I would like to tell the minister something of the percentages ordinary Canadians must work with now. When citizens want to buy a home- something about which every Canadian has dreamed but because of Liberal policies will probably never achieve-they must pay close to 20 per cent mortgage rates. Those people who are renewing their two, four or five-year mortgages will be stampeded into paying twice as much per month as they paid in the past. If they are overwhelmed by this excess burden they must sell their dream home or have the banks foreclose on them. This has been the case in Toronto recently, where over
3,000	people have been literally booted out of their homes because of high interest rates. It is no wonder ordinary Canadians need the odd drink just to settle their nerves. But now the Grits will deny them that choice, too.
Here is another percentage for the Minister of Finance to ponder awhile. Since 1960 bankruptcies have gone up by a totally unacceptable 758 per cent. These numbers do not even include businesses which collapsed but did not make use of the Bankruptcy Act, those which were placed in receivership, liquidated by secured creditors, or those which simply closed up shop because they could no longer cope. It is no wonder thousands of workers and a multitude of businesses are fleeing for their financial lives to the United States.
I should add here that this financial bastion for Canadian businesses may soon be closing its doors. This, of course, is due to the preferential treatment given to Canadian firms over American firms in the National Energy Program. The Liberals are causing a backlash in the United States which will begin taking its toll on Canadian firms shortly if the energy program
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is not abandoned soon. The end result will be that Canadian firms will have no place left to go. They will have migrated to the United States where the economic and political climate is more favourable. They will be stifled there, too, because American firms in Canada have received such a beating from the Liberal government. This is reciprocity in quite a different form, for which we only have the Grits to blame.
I would like to return to the matter of bankruptcies for a moment. There have been some 27,000 personal bankruptcies since the beginning of 1980. How can the Liberals even think of adding insult to injury by putting beer, wine and spirit prices out of reach? What other commodity will they try to index in the future?
It seems that the Liberals are desperate for cash. Only now do they realize that they have grossly overstepped their spending bounds. Only now do they realize that the Progressive Conservative Party was perfectly right in its policy of reducing the NDP-Liberal created deficit. Only now will the Liberal party attempt to cut their expenditures to an acceptable level.
Now, though, they are using every and any means they can to extort money from the average Canadian. This money grabbing begins at the provincial level where the Grits are trying to finagle profits made on resources by western provinces through new equalization schemes. Of course, the provinces quickly saw through this federal ploy and they are fighting tooth and nail to save their new-found riches. Therefore, the Grits have once again created division in the country. First, there was the Constitution, then the National Energy Program and now there is the equalization scheme. Along the way they batter average Canadians by imposing hidden taxes on beverages.
The money grabbing continues. We see in this bill new taxes on oil and gas. The devastating effects that these new taxes will have on the oil and gas sector, as well as on the energy service sector, have been excellently explained by many of my colleagues in the debate yesterday and in the debate on this bill on Tuesday last. Therefore, I will restrict my comments to motion 22 in this bill.
At the outset of my remarks I described the indexation of taxes as being discriminatory. It is not discriminatory simply because of its adverse effects on the average working Canadian, but also because of the way it applies to the various items in the all-beverage subgroup.
During committee hearings the Minister of Finance entertained briefs from the Brewers Association of Canada. These briefs showed clearly that the result of excise levies introduced in April, 1980 was to initiate a swing from beer and wine to hard liquor. This is clearly demonstrated by facts and figures. The annual percentage change in sales for beer, wine and distilled spirits between 1974 and 1980 was 1.7 per cent, 8.3 per cent and 3.3 per cent respectively. After the announcement of the excise levies in 1980 the percentage change in sales for the April, 1980 to January, 1981 period was negative 3.6 per cent for beer, negative 1.8 per cent for wine and positive 4.6 per cent for spirits. During the committee hearings the minister said it was neither his intention nor his job to influence the
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alcoholic beverage choice of Canadians. Nonetheless, the effect of his April, 1980 announcement was to discourage the consumption of beer and wine in favour of the consumption of hard liquor, as can be seen in the figures 1 have quoted.
As you will recall, Mr. Speaker, the April, 1980 announcements included sharp and unprecedented excise levy increases of 29 per cent for beer and 155 per cent for wine, compared with a nominal increase of only 6 per cent for distilled spirits. The result was substantially to reduce the relative tax burden on distilled spirits compared to beer. If the unintentional shift in consumption choices from beer to distilled spirits is to be corrected, then the traditional relationship should be restored by increasing the levy on distilled spirits by a proportionate amount. If the shift in consumption from low to high alcoholic content beverages is not reversed, the economic impact on the brewing industry and on agricultural producers who depend on the brewing industry will be severe. In addition, the negative impact on jobs will be significant, as the production and distribution of beer and wine are much more labour-intensive than similar operations for spirits.
As an example of the potentially negative impact on jobs, I would like to quote from a speech given by my hon. friend for St. Catharines (Mr. Reid). He said:
-the wineries and the grape growers employ over 18,000 persons. Is not that a segment of the community worth considering? In its brief to the standing committee, the Canadian Wine Institute hit the nail on the head when it stated that neither winemaking nor grape growing is a profitable business.
For the information of members of this House let us say that in so far as wine production is concerned, the net return is less than 5 per cent of the capital cost investment. That is not a great venture from a profit-making point of view. There are already declining sales and, thanks to that earlier 155 per cent increase in the excise tax announced last April, this cannot fail to continue as the government loads quarterly increases onto the retail cost of wine. With this decline will come the collapse of the smaller wine industries-the cottage wine industries-which have improved the taste and quality of domestic wines. It will also lead to lay-offs in the larger wine industries.
This is but one example of what a seemingly minute tax can do to a thriving industry.
Furthermore, there is overwhelming evidence showing that a higher incidence of alcohol-related health problems, crime and accidents is related to a relatively higher level of distilled spirits consumption. This factor in itself should be sufficient to convince policymakers of the dangers involved in encouraging, through the tax system, the increased consumption of hard liquor. No country has ever set out to use the tax system to encourage, via the price mechanism, the shift in consumption patterns toward hard liquor and away from naturally brewed and fermented products such as beer, wine and cider; in fact, a number of countries have done exactly the opposite.
The proposal to index alcoholic beverage excise levies should be automatically dropped in favour of continuing to seek changes to rates of these taxes and duties by having them approved by Parliament as part of the traditional budgetary process. It is my feeling that most ordinary Canadians believe that government is there to serve and protect them in a reasonable and responsible fashion. This means that Canadians believe that, through debate and the normal voting procedure, decisions and policies are made which will serve to better society as a whole. This tax completely violates both the trust which Canadians have put in the system and the system itself.
During committee consideration the minister stated he did not believe indexing would affect the stability of the industry. However, one of the effects of the indexing scheme is that it would exacerbate the sales situation existing since the excise levy increases of April, 1980. Soon the price of two dozen bottles of beer will have increased by 157 per cent, as I stated earlier. The price of a 25-ounce bottle of inexpensive gin will increase by only 101 per cent. Obviously, this will further accelerate the shift in consumption patterns to hard liquor and away from beer and wine.
I will conclude my statements by calling on the Minister of Finance to eliminate this section of Bill C-57 which will index taxes on beer, wine and spirits to the CPI rate for all beverages and for once get off the back of the little guy who, by far, will suffer the most if this provision is approved.


Mr. Bill Wright (Calgary North):: I would like to turn to the second part of this bill, which is a tax on natural gas and natural gas liquids. As everyone in this House is aware, the Minister of Finance (Mr. MacEachen) stood in his place and said; "We have no intention of taxing natural gas, of putting a tax on natural gas exported to the United States". Then he turned right around and said: "We are going to tax all natural gas in Canada, whether it is consumed domestically or exported". As everyone is aware, the appeal court of Alberta recently ruled against the federal government taxing another government, namely, the government of Alberta. This is dealt with in a section of the British North America Act. This case has now been appealed to the Supreme Court of Canada. Hopefully the Supreme Court of Canada will render a decision on the side of the producing provinces.
The petroleum gas tax or revenue tax is clearly a tax on provincial resources. We and all of the provinces understand this to be illegal. I will probably come back to this point when the bill comes up for the third reading because I question whether we should discuss this bill on third reading. As I understand it, we are simply reporting the bill to the House, but there is a question in my mind as to whether we should actually be discussing certain parts of this bill while they are before the Supreme Court of Canada.
I would like to draw attention to something which is pretty important. Total exports of natural gas in 1978 were approximately 882 billion cubic feet. In 1979, under a Conservative government, exports rose to one trillion cubic feet. In 1980, under a Liberal government, they again declined to 800 billion cubic feet, which is the lowest total exports in the last five years. In addition, natural gas exports in 1978, in dollar terms, were $2.2 billion; in 1979, $3.1 billion; in 1980, $4 billion, in spite of a decrease in volume. Basically, the reason is that we tie the price of exports of natural gas to the price of imported oil. Even though they are unrelated, this government has a formula whereby it ties the two together. Therefore, we cannot export as much gas as we want. The government would be receiving $1.5 billion annually if it did not tie the price of natural gas to the price of imported oil. Of course, once again it is anxious not to give Alberta anything more than it possibly can. I cannot help but think how our balance of payments would be helped with that $1.5 billion per year, and I cannot help but think what it would do for interest rates in Canada if an additional $1.5 billion was coming in.
The natural gas companies in western Canada, which are mostly in Alberta, have stated that they could export 50 per cent more gas than they are allowed to at present if they could take it out of the ground and had a market for it. It is quite evident that many of these companies will go broke. These are average-sized Canadian companies which cannot get their natural gas out of the ground for at least five years. When they go to the bank they can only borrow funds to 25 per cent of real value. They cannot sell their gas because it is shut in by the policies of the government. They cannot export that gas.
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I should like now to come to what I consider to be an unbelievable tax which the government is going to introduce on wine, beer, spirits and tobacco. I am not opposed to a tax on any of these products but I am opposed to a tax which is indexed and which will automatically increase as inflation does. This is the first tax that the government will use on industry in general. If it gets away with this, we can expect that the tax on all items will be indexed against inflation. You and I, Mr. Speaker, will pay tax in future on every item we buy and that tax will be indexed to inflation. This is just the first step and I shall come back to it briefly in my conclusion.
I should like now to deal with Part IV of Bill C-57, which imposes an 8 per cent tax on petroleum and gas revenues. This is a tax at the wellhead and can also be interpreted as a tax on provincial resources. It will affect exploration and development by the whole petroleum industry. The Minister of Energy, Mines and Resources (Mr. Lalonde) stood in this House and said that drilling is not declining. Every week and month last fall he told us that. He said that there was a surplus of oil rigs and that drilling companies were expanding because they anticipated an expansion of exploration and development. That did not come about because of the national energy policy, Mr. Speaker. There are now only 50 per cent of the rigs operating in Canada that were operating one year ago. Approximately $2 billion is flowing out of the country each year and will continue to do so for the next five years because of the national energy policy.
In the province of Saskatchewan one company shut down 190 wells within the last five months and another company shut down 125 wells. This begs the question, how could they possibly shut down producing wells? It is very simple. It was because they were losing money. Even though they are not allowed to shut wells down, they simply wait until the wells need repairs and then do not repair them. The repairs are put off indefinitely. This practice will continue until we notice a drop in production from these marginal wells. The Minister of Finance and the Minister of Energy, Mines and Resources continue to hold that this will not happen and that it is not happening. I could give the names of companies, Mr. Speaker, but I shall not embarrass them.
It is interesting that the oil industry raises 70 per cent of its funds internally while the utilities, most of which are owned by governments, raise less than 50 per cent of their capital internally. That is a turn around for the industry. The cash flow of the oil and gas industry in Canada has been reduced by 20 per cent to 40 per cent on account of the policies of the government which wants to control the oil industry.
I could go on and tell why this is being done, Mr. Speaker. I have said, as have others in this House before, that if anyone really wants to know what kind of Canada we will have in future, they should read the writings of the Prime Minister (Mr. Trudeau). He is nothing but a socialist. Any communist will tell you that the socialists are the tool of the communist party, of the communist world.


Bob Rae: What are you the tool of?

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Frederick William Wright: I hear to my left the pinko Peter Pan of politics. He has had his opportunity to speak on this bill. He does not disagree with what I am saying about the socialists; he just thinks it is funny.
1 should like to quote briefly from a brief submitted to the Standing Committee on Finance, Trade and Economic Affairs by the Independent Petroleum Association of Canada. On page 9 of the brief there appears the following passage:
We are mindful of the government's intention to direct three objectives of the National Energy Program, namely:
1)	Security of supply and the ultimate independence from the world oil
market;
2)	A fair pricing and revenue sharing regime; and
3)	Greater ownership and control of the oil and gas industry.
The Minister of Finance has stated that "That two taxes contained in this Bill are essential for the achievement of these objectives.''
It is the position of the Independent Petroleum Association that the first objective, that of security or supply, is not possible under this Fiscal regime ... It is also our contention that a fair price and revenue sharing program that places the Canadian oil and gas industry in Financial jeopardy to continue in Canada when more attractive foreign opportunities exist, is not conducive to future exploration and development in this country. Lastly, the ownership and control objective as stated by the minister has no place in an Excise Tax Act.
Mr. Speaker, this is submitted by an association of companies which are Canadian controlled, not foreign controlled, and which are moving to the United States. It is not the case that I cannot find Liberals to agree with this, but they are prepared to say: "We are going to change it in the future and it won't be that bad". But it is already that bad. Everyone should be aware that it will take two to five years to bring back the oil rigs that have gone to the United States.
The IPAC group concludes with this question:
Is it then the intention of the government to enact selective tax legislation for every segment of the industrial base at some time in the future?
That being the case, the stability of the entire business and investment community will be in question. If it is not the intent of the government, why should tax laws be enacted which are so clearly discriminatory to one sector? That is the essence. It is a tax not upon one industry but upon all industries. This bill is a tax not upon one segment of the economy but upon all segments of the economy.
I shall summarize some of the items in Bill C-57. The national energy policy, which really brought about this bill, has reduced the cash flow of the oil and gas companies by 20 per cent to 40 per cent. Their earnings have been decreased by 60 per cent to 70 per cent.
This is a tax which does not approach earnings normally by simply taxing profits. The government does not want to do that. The government wants to tax these companies before they make profits.
This is a bill which does not help our balance of payments problems. It does not do one thing to help our balance of payments. This bill does not do one thing to help the deficit of Canada. We hear the Liberals telling us that they are going to reduce the deficit. How can the government reduce the deficit
when it buys oil companies which do not produce one more barrel of oil? Money is leaving Canada. How is our deficit being helped when Canadian companies are taking their money across the border to the United States? There are companies in Canada doing nothing else but raising funds for Canadian companies that operate in the United States. As I mentioned before, approximately $2 billion a year is being raised for this purpose.
This is a bill which goes one step further toward government ownership of business in this country. Of course, the government likes to cloud the horizon by saying it is not trying to take over all business. Of course not. But if hon. members read the writings of the Prime Minister (Mr. Trudeau), they will find that he wants to control everything. Having 51 per cent will control all businesses in Canada. Last week, I believe, in Montreal the Prime Minister said: "All businesses in Canada at one time or another will have to come to the government for assistance". What a ridiculous statement to make. Of course, we know how ridiculous he is after listening to him during question period. I would be ashamed to belong to the same party as anyone making a statement like that. This is a statement with which the Liberals will have to live forever.
We regard this bill, this tax on industry, as punitive. If that is not a strong enough word to describe it, then I say it is vindictive. This government is out to get industry and private enterprise because the government wants to socialize or nationalize, if you will, industry in Canada.


The Acting Speaker (Mr. Ethier):: Order, please. Pursuant to Standing Order 40, it is my duty to inform the House that the questions to be raised tonight at the time of adjournment are as follows:


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. Since it has been agreed and ordered that there is to be a recorded vote at 9.45 p.m. tonight, does that not wash out the late show?


David Michael Collenette: Mr. Speaker, we did not specifically rule out the late show, but it is usual custom if we do have an ordered or a deferred vote-


Stanley Howard Knowles: It is not usual custom. It is in the Standing Orders.


David Michael Collenette: -then we do not have the late show.


The Acting Speaker (Mr. Ethier):: It seems there is agreement. Therefore, we will dispense with the late show. As a result the notation I just made regarding Standing Order 40 will be withdrawn.


Mr. Scott Fennell (Ontario):: Madam Speaker, my colleague the hon. member for Calgary North (Mr. Wright) in his closing comment said that the government is out to get private enterprise and entrepreneurs. I maintain the government is out to get Canadians generally. The government does not select; it wants to get everybody.
June 2, 1981

I am delighted to speak to Bill C-57, an act to amend the Excise Tax Act. I would call it an act of confiscation. In the days since this bill was brought before the House, the Minister of Finance (Mr. MacEachen) has been heard to say that if injury of significant disadvantage is experienced by any group, he would remove the burden in the subsequent budget.
Those are lovely words, but who is the minister kidding? He is not fooling me nor is he fooling the public. Once that government grabs a little bit of money, it hangs on for dear life to it because it is known that this government never gives it back. The government's game is to take more and more and more. This government has no intention of rescinding anything it presents to this House.
I believe that the 8 per cent energy tax is totally immoral and is probably the most damaging tax imposed in Canada. It is not only destroying the possibility of self-sufficiency in the oil industry, it is destroying the Canadian economy. It is being felt in Ontario, Quebec and the eastern provinces. With this government's spending spree, it is obvious it loves to feed the inflation fire. That is the key problem in Canada today because it is ravaging the life of all Canadians.
This government, through the National Energy Program, has not only written off the western potential, the western spirit, the western hope, but has completely desecrated the Canadian economy. This government is more interested in buying service stations, maybe for the real estate, and oil from Mexico than in encouraging, through appropriate tax relief, oil production in Canada. This government will be so overcome by greed that it will dry up the source of supply, similar to what happens to a poorly managed dairy farm.
The wellhead tax on the production of gas and petroleum products is a cannibalization of not only the petroleum industry but the producer and the Canadian public. In Canada the price of gasoline has increased 60 cents since this government took over, all of which increase has gone into the government's coffers. Europeans pay $4.50 a gallon. Although a great deal of that price goes into government coffers, it pays for imported oil because the Europeans do not have the possibility of self-sufficiency. In this country, at the rate this government is going, I would say that in two or three years gasoline will cost $9 a gallon or $2 a litre. But the producer in the west will get nothing from any rise in price, nor will Canadian industry. All the funds will flow back into Ottawa. That is the government's game. Its plan is not to pay back loans from other people but to spend money.
Governments are elected, in theory, to tailor spending programs to revenues. This government throws out that theory; that is of no concern to it. It theorizes, not knowing how much it will take in, that everything it takes in will be given away, along with everything else we will have in the next 20 years. The government grabs money from every source it can. It is a wonder it has not jumped on the western farmer and the Ontario farmer. Their prices have gone up. Next it may place an indexed tax on wheat and really destroy this economy. That is the only thing we have left. We have no industy. Nothing
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has been done to encourage industry in this country. The government has created a complete division in this country.
Originally, under the British North America Act that is now being rescinded any royalty on resources belonged to the provinces. This tax inflicts upon the provinces a wound that will be deep and will have significance for many years to come. The federal government has the right to raise all the taxes it wants by a revision to the Income Tax Act. It could follow a logical system of raising money.
I said before in this House that maybe it is time to get some imaginative plagiarism of taxes from other countries, for example for building up industry. The United States had the same problem with the multinational oil companies. They put on a windfall profits tax which had a beginning and an end. In essence, it was indexed so that each year the windfall profits tax became less. It was a smaller percentage of the sale price of the fuel. We have never come up with an original program like that. We just hammer the citizens of this country over the head with a two by four. We do not use logic and we destroy the country in the process.
The Liberals love going to the trough. That is their expertise-they go to the trough and get all they can. If they want to get a lot out of the trough, I will tell them how to do it. Put the price of oil up to 75 per cent of the world price. Put on a windfall profits tax. Then watch the development in this country. Watch the industrial base in Ontario grow. The federal government will get more money than it ever dreamed of. Ontario will survive. My riding would benefit, as would Quebec and the maritimes.
We are only kidding ourselves. By the time we get up to 75 per cent of the world price, the government will take so much of that price there will be nothing left for the producer. I say put the price up now, put on a windfall profits tax and abolish this 8 per cent tax which cannot even be deducted from your profit and loss account. The petroleum industry would benefit, the drilling rigs would come back into Canada, service industries would develop and people would be employed in the west and in Ontario. The entire economy of this country would get moving from coast to coast. The automobile manufacturers in Scarborough will again be busy building trucks. That plant is now shut down about five days out of ten. Why? Who in the west can afford to buy trucks when there is no revenue coming in?
The government's greed is absolutely incredible. It recently put up the export tax because it is short of money and we have a balance of payments problem. Why not drop the tax and allow more products to be exported across the border? More revenue will flow back into Canada. It will come back into the hands of the producers and service industries which the government has the right to tax.
Export our products to those who want them. The Americans want our gas but at a reasonable price. Every time we sell our product, it leads to exploration for new gas. New oil will also be found. When you drill for gas, you do not know

June 2, 1981
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whether you will hit gas or oil. Therefore, more oil and gas will be brought on stream. Oil and gas from the north will come on stream much faster. At present we may have to wait 50 years before this oil comes on stream.
This government follows the easy way of bringing in oil-at the expense of the taxpayers. If this government were really sensible, it would bring back depreciation allowances, exploration expenses and development expenses which could be written off. I suggest it get rid of its petroleum incentive program. It is a joke. In fact, it states in an amendment that it is a joke. The government says that if you choose not to take the incentive program, you can deduct the amount you would get from your 8 per cent royalty tax. That is just money going through the system, that is all it is. It does not give anything to the oil industry. Everything that is given to them is taken away. In effect, you are putting them in the position of a possible 30 per cent negative cash flow. You are not giving them anything and the government is losing everything. It is losing revenue on the income of taxpayers throughout Canada.
We must get rid of the National Energy Program and the 8 per cent royalty. The government calls it an excise tax, but I call it a royalty because that is what it is. The government says it wants to Canadianize the industry. I accept that. I believe that is sound. At least some companies have worked hard to do this under this incentive, but it could have been done in a much better way which would have put us in a better light in the eyes of other countries.
This incentive of a depletion allowance, exploration and development expenses should apply to Canadian companies only. Believe me, Mr Speaker, it would get money out of the banks and back to work in this country. What has flowed south across the border will come back into Canada. The drilling rigs will return to this country and the economy will be booming. However, this government wants to hold this country down. I do not understand the reason for it, but they are against anything of a positive nature.
This excise tax hits the people of my riding. The government is putting indexation on the last pleasure of the working man. High interest rates are slowly but surely eroding his home base. He does not know if he can hang on to his house. The tragedy is the indexing of the tax on beer. I refer specifically to beer. It will never be a tax with representation. This tax on beer will never come before this House of Commons. We will never be able to speak on this tax again, nor the tax on wine and spirits.
The working man who works from eight to four of five can no longer afford many pleasures because of the inflation brought about by this government. Now the government is taking away his last pleasure. He is again being hit over the head by a two by four.
I am told it is to protect government revenues derived as a result of this tax from erosion. What about the erosion of the working man's pleasure? What about the erosion of his income? What is the government doing to the working Canadian? It is stripping him of his last pleasure. He is not only being hit with excessive income tax, but now the little bit
of money he has left in his pocket to buy a small case of beer at the end of the week is being taken away from him.
Perhaps the government is dedicated to solving the problem of alcoholism in this country, I do not know. But I do know one thing about this measure. The government will lose more than it will gain because there are still many people with initiative in this country who will start to produce their own beer in their basements. Who could afford to pay $22 for 12 pints of beer, which I understand will be the price in about 1988? The government is taking away homes with high interest rates and it is now taking away the average man's beer. What are you going to do with that man on the street? This reminds me very much of what happened in Germany in the 1930s. People lost their homes, they began to starve, and then a powerful dictator came along to solve all their problems. God help us so that that does not happen here in this country.
I believe the indexing of the tax on beer is totally immoral and is a concept totally the reverse of that which Robert Stanfield had when he suggested the indexing of income tax. Indexing of income tax was meant to protect the working man against inflation and fiscal mismanagement, the cause of inflation. The government is now going to reverse that concept. The minister keeps talking about the next budget when he will take indexing out. I think the government had better start indexing itself because the government keeps taking money in.
I received an advertisement today which talks about a sudsidy of $800 to reduce consumption of petroleum products. The government is going to give each Canadian citizen $800. Do you realize, Mr. Speaker, that the government will have to borrow that $800 in Switzerland at 15 per cent interest rate, compounded over 5.5 years, which will mean it will have to pay back $1,600? Furthermore, the money will be taken away from the taxpayer to pay that loan back.
Why does this government not get to work, instead of continually increasing taxes, to find ways of cutting taxes and protecting the working Canadian? He is being rubbed the wrong way and pushed too far. This government is on a binge. This is the only way it can control Canadians, by taking everything away from them.
While we are talking about inflation, which I referred to as basically resulting from mismanagement by this government over the last 13 years, let me point out that in a recent Gallup poll 65 per cent of Canadians indicated approval of severe reductions in government spending, similar to what is taking place south of the border. They are talking about general reductions, and the majority of people expect a positive effect on the Canadian economy and our inflation. Instead of always coming to the trough here trying to get more money, why do members across the way not sit back in their offices and try to figure out how to cut spending?
The next part of this bill deals with small weekly newspapers. The Kent commission has been currently trying to determine the detrimental effects of control of the press basically by three groups in this country, the Toronto Star, Southam and
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Thomson. The Toronto Star stayed out of it because it has only one paper, but it is sold right across this country and it gets the Liberals elected every time. During the time the Kent commission has been questioning this monopoly control the government has been planning to fiit small weeklies, the independent press in this country which combats these large chains of newspapers. They are the only papers which can still tell the truth.
The government has now found a new tax with which to hit and hammer them over the head, like with a two by four. The government is going to tax those weeklies on all their advertising and the supplements they carry. Advertising and advertising inserts are how these newspapers manage to carry on. Most of these weeklies do not make a lot of money. They are operated by individual owners who are trying to make a buck in small towns. These small newspapers are the only defence we have in print against those three major papers everyone knows about.
I hope the minister will reverse these taxes when it is shown they are hurting some specific industries. I hope he will abolish this tax so as not to kill the small independent newspapers of this country. Members on that side think these advertisers can distribute their material through the mail. The trouble is that the inserts carried by these weekly newspapers come out on Wednesday for sales that take place on Thursday, Friday and Saturday. Can you imagine putting these inserts in the mail? By the time they got to us the sale would be over and the prices would be marked up 50 per cent. Furthermore, this would involve another tax on the public.
This whole measure is supposed to give the appearance of this government's efficient commerce. To me, the government has done an absolutely disastrous thing by bringing forward this tax. I can only hope that, as in my wildest dreams, we can in some way defeat the government on this measure, as 1 think it represents an absolute disaster to Canada, the west and our national economy.


Thomas Edward Siddon: Mr. Speaker, I too would like to make some remarks about Bill C-57, presently before the Flouse, entitled "an act to amend the Excise Tax Act and the Excise Act and to provide for a revenue tax in respect of petroleum and gas".
Let me say at the outset that there are certain aspects of this bill, as with any piece of government legislation, which will be helpful to Canadians, in particular those that deal with exemptions from excise tax as set out under Part I. This party generally supports the nature of those exemptions, with a couple of exceptions.
We have proposed an amendment relating to the exemption for utensils, instruments and equipment used in university teaching and research. This party would like to see the adoption of a minor amendment to clause 12 of the bill which would rule out the requirement that such devices be specifically designed for research, thereby exempting all such equipment employed in the conduct of research and teaching up to 50 per
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cent of the time. We would recommend the removal of the reference to the word "design" in the second line of clause 12.
In addition, we feel that included in the list of fuel sales tax exemptions there ought to be an exemption on fuels used in pilot training. If one has regard for the tremendously increased cost that Canadians of all ages must anticipate if they want to enter into pilot training, with the new Revenue Canada ruling that will disallow any tax benefit for flying training time in excess of the first 35 hours it becomes very important that a certain measure be introduced to ensure that the practice of flight training is given as much consideration as are other aspects of vocational and academic training programs in this country.
With that said, I think it is fair to say that speakers for this party, and in many cases my colleagues in the party to the left, have taken extreme exception to numerous aspects of the proposed legislation in Bill C-57. As the hon. member for Ontario (Mr. Fennell) pointed out a few minutes ago, this move toward indexation of revenue sources, whether it be federal or provincial, as in the case of the recent budget by the province of Ontario which included indexing of that province's revenue sources, is a very retrograde step. It seems to me governments are elected to serve the people, that the people of this country are not here to serve their governments. The practice of indexing income tax exemptions under the Income Tax Act must be retained and the government should not even begin to contemplate, as the Minister of Finance (Mr. Mac-Eachen) has often implied, deindexation of exemptions under that act. In that way government does serve the needs of the people by ensuring that the timeless pace of inflation does not erode the basic minimum income people are entitled to enjoy tax free within this country.
On the other hand, the indexation of government revenue sources such as that proposed respecting the spirits, wine and tobacco provisions of Bill C-57, and the move by Ontario to index provincial gasoline tax revenue, really must be recognized as being inflationary because indexation, as in the case of the present bill, on a quarterly basis relating to the consumer price index component of cost arising from those particular consumables-the basic process of calculating an increased rate of tax revenue on an ad valorem basis rather than on a straight value basis-has an amplifying effect. If the revenue is tied to a certain percentage of the retail sales price of a particular commodity, then every time there is an increase in the tax to keep track of that indexing formula, it will have a reflected effect on the consumer price index and then will lead a quarter later to the need to index the rate of tax up once again. There is an amplifying effect which fuels inflation inherent in these provisions to index tax revenue sources to the consumer price index. Therefore it is wrong.
Of course, as many of my colleagues have pointed out, there is a change in balance between the excise tax rate assigned to certain spirits and to alcoholic beverages of 40 per cent alcoholic content or higher. Changing the ratio of taxation on

June 2, 1981
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those alcoholic beverages compared with beer and wine leads to a situation in which people will ultimately be more inclined to buy hard alcoholic beverages as opposed to beer and wine. This is completely contrary to what is advocated by leading health and alcoholism authorities and to the practices of many other nations, most notably France, where in fact the rate of excise taxation against wine on a per unit alcohol basis is very, very much lower than against alcoholic spirits.
The brewing and wine-making industries made representations at the committee stage in opposition to this kind of indexing which, by the year 1991, I believe, could lead to Canadians paying some $26 for a 24-pack of beer compared with only $16 for a bottle of gin. The effect of that is quite obvious. The average Canadian making a visit to the liquor store is much more likely to buy hard alcoholic spirits than beer or wine.
As 1 said a few moments ago, the amplifying effect of this method fuels inflation because the rates of taxation are continually indexed upwards as the consumer price index rises, and the consumer price index will rise as tax revenues are increased. This is a very regressive measure and quite unacceptable to this party.
I want to talk for a short while about the energy aspects of Bill C-57, in particular the so-called natural gas and liquid natural gas tax provisions as set out in Part II of Bill C-57 and also the producers' tax and producer royalty provisions contained within Part IV of the bill.
Hon. members may recall that in the early autumn of 1980 a number of questions were asked of the government, and of the Minister of Finance in particular, as to whether he intended to introduce an export tax on natural gas. There were denials, most vehemently from the hon. Leader of the Government in the Senate, the senator from British Columbia, who pledged that there would be no such tax on British Columbia natural gas resources, as did the former leader of the Liberal party in British Columbia, Mr. Gordon Gibson.
In fact, hon. members may recall that over 32,000 residents of British Columbia sent in petitions to this House in the months of October and November opposing any tax on the export of natural gas and, by implication, on all forms of natural gas, whether exported or consumed within the province, because those are viewed by the residents of British Columbia, Alberta and the other western provinces as resources to which they are entitled under the provisions of the British North America Act and part of the deal under which British Columbia, willingly and happily, entered into confederation in 1871.
One might ask why the provinces are so anxious to maintain title to natural resources. The fact is that people, those in the more remote regions of Canada at least, are convinced they get better value for their tax dollar and for their resources by seeing those dollars invested and spent wisely and close to home by their municipal and provincial governments. Last autumn at the Union of British Columbia Municipalities meeting, the mayors of British Columbia unanimously opposed the imposition of a federal tax on the natural resources of
British Columbia because those resources and the revenues they are capable of earning ultimately translate into the building of schools, roads, facilities, services and employment opportunities for the people of British Columbia.
There is a big revenue grab coupled with what I call the big lie which the Minister of Energy, Mines and Resources (Mr. Lalonde) and his colleagues regularly put out about how wealthy the western resource-producing provinces are. I invite more hon. members on the government side to visit towns like Calgary and Edmonton in January or February, or at any time of the year, and to view the lack of sidewalks in my own community, the lack of closed drainage ditches, the lack of adequate, completed parks, the lack of adequate hospitals and the lack of adequate playground equipment and facilities. These things are enjoyed in Ontario and Quebec, the much more established part of Canada. We are building an infrastructure out there which this part of Canada has enjoyed for over a century, and this costs money.
Therefore, if the per capita income from natural resources is as large as the Minister of Energy, Mines and Resources often likes to proclaim-some $1,600 per person-he should be honest with the people of Canada and let them realize how large the per capita income is in other parts of this country which comes from manufacturing and industry. How large is the per capita income from government in the Ottawa area? How large is the per capita income in some of the less affluent parts of Canada because of government gratuities and redistribution under the formal procedure of equalization, to which all provinces agree? However, to go around perpetrating this big lie and proclaiming that the people of western Canada are greedy, selfish and too fat cat is absolutely intolerable to western Canadians. We invite the minister and others to travel to British Columbia, Alberta and elsewhere to see roads sliding down the sides of mountains. I invite them to travel to many of our backwoods areas where there is not the pavement there is in most parts of Ontario and Quebec.
Much building and investment must be carried out in western Canada, and western Canadians, thank you very much, would like to have more say about how those investments are made than the federal government believes is necessary. If they are not allowed, within the confines of confederation, to make those decisions, then we cannot fault western Canadians for looking for another way. There is a lack of trust. History has proved that the Liberal big spenders in Ottawa have no sense of value and no sense of thriftiness when it comes to reinvesting the great bounty we as Canadians all enjoy.
It is interesting to speculate as to why Alberta and Saskatchewan have heritage funds and why the province of British Columbia has a B.C. Resources Investment Corporation or a British Columbia Petroleum Corporation. Why is it that we are able to put something away for tomorrow and invest in the building and development of our future when the government in Ottawa is bankrupt and leading our country down the same road to absolute economic chaos?
I think the natural gas tax which has been levied through the budget and as reflected in Bill C-57 is nothing more than a
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revenue grab. Then the government imposes an 8 per cent production tax and, in addition to that, a producers' royalty on people who actually pay royalties to others for investing in our oil and gas industry.
The negative effect of these provisions of the National Energy Program are visible everywhere in our country today. For example, I imagine the bureaucrats, cabinet ministers and government members who contemplated imposing an 8 per cent producers' tax did not bother to calculate the rate of return on investment to determine whether investors in western Canadian oil and gas exploration could absorb such a level of taxation. And, of course, the massive number of jobs being lost in western Canada, the migration of whole industries associated with drilling rigs heading south where the rate of return is much larger, is indicative of the fact that this government is incompetent to do a quantitative analysis of the consequences of its policies before implementation.
I imagine, Mr. Speaker, that the government did not consider that a higher tax on natural gas, starting at 30 cents a thousand cubic feet or 28 cents a gigagoule and rising to double that amount within two years, would have an impact on farmers or on the important production of synthetic fertilizer from natural gas. It has now had that fact brought to its attention by the federation of Alberta gas co-ops and other groups, who made representations to the effect that the food we eat is really produced from our natural resources and that any increase in cost to the producer will ultimately be reflected in the cost of living index.
Of course, this government in its budget imposed a tax across the board at the wellhead which has its impact on home heating fuels; but that is compounded in western Canada where most people rely on natural gas for heating and comfort, which is a change from the way it was when I was a small boy 30 years ago and we had no timber, just a bit of coal, and we certainly did not have the warmth and convenience of natural gas.
Then suddenly this government increases home heating costs to western Canadians, indeed to the people of Ontario and Quebec that burn natural gas, by some 33 per cent from last October until next winter. That is a cost which has to be borne by the old age pensioners. I had the residents of a Kiwanis subsidized housing project in my riding receive a surtax on their December heating bill and every subsequent month which comes directly out of their old age pension, the supplement and widows' benefits. That surtax arises out of the National Energy Program. The plastics which are so essential to our manufacturing industry, the plastics that we waste too much of in this country, are also being taxed excessively.
We are doing this to initiate a concept of nationalization of our major industries in the energy sector. We started with the Petro-Canada acquisition and pretended that Canada was buying an oil company, but of course we were borrowing money through the chartered banks by assigning the term preferred shares to the banks who, in turn, conveyed that trust
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to foreign lenders, which made it possible for Canada to attempt to purchase a major part of the Canadian petroleum industry.
We now have across Canada brand-new Petro-Canada service centres that western Canadians avoid like the plague. In shopping centres which are competing with established centres they are putting in pizza parlours, convenience stores and clothing stores, which is again an example of the kind of irritant that western Canadians feel. It is an Ottawa Liberal attempt to invade and intrude into private sector business principles and traditions in western Canada which is totally repugnant to western Canadians. Of course, that leads to the question of which Liberal fat cats get the leases on these spaces. How many of these smaller deals, much smaller than the one that Mr. Strong apparently profited from tremendously by setting up the acquisition of Petrofina for the government, are benefiting people who happen to be friends, backers or bagmen of the Liberal party?
The Grits and their corporate friends are reaping high profits, and I suggest it is high time the government and the people of Canada know where these profits from high interest rates are going. I suggest that the high interest rates and high rates of return on investments being earned in Canada are being sucked off by certain financial institutions, friends of the Liberal party, who we will see emerge as the new Power Corporations of the future which want to take control of our oil and gas industry because they have special access to government and cabinet. I will name names. I am thinking of the Campeaus, the Strongs, the Desmarais and the McCains. I do not know how much others there are but it would seem to me-and this is certainly an irritant to western Canadians- that these individuals prominently connected with the Liberal party are probably somehow linked to high interest rates and the profits being accrued therefrom, and to the power plays being made in an attempt to grab a controlling interest in the oil and gas industry in Canada, particularly in the offshore areas.


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


Mr. Robert Wenman (Fraser Valley West):: Mr. Speaker, I enter this debate with a growing concern over the direction the government is taking with regard specifically to my region of the country, western Canada. It runs completely counter to the good of this region and thereby to the good of the entire country. The energy provisions in this bill are designed for short term financial benefits and narrow political gains in central Canada. In the long run they will be disastrous for both the economy and the political viability of this nation. The friction and ill feeling caused by these measures, not to mention the legal precedents being established daily, weekly and monthly in our courts, will in the long run fan the flames of western discontent to unmanageable proportions. Instead of a co-operative form of federalism, we will be faced with a never-ending series of confrontations between competing levels of government.

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It is impossible to understand the consequences of this bill under discussion without looking at the historical background and the trends in the present dispute between Ottawa and the provinces. It has been suggested, unfairly, that the main difference between Quebec separatism and western alienation is that the former is rooted in cultural aspirations while the latter is predominantly based on economic considerations. This belief places undue emphasis on contemporary disputes between Ottawa and the western provinces and ignores the evolution of a unique western Canadian political identity.
It is true, however, that the debate over resources that we are participating in today has brought the economic aspects to the forefront more than at any time in our history. The oil and gas resources in question generate billions of dollars in revenue, not just to the provincial government concerned but to the municipal and federal, regional and city governments as well. This generation of resource wealth in our economy is significant at every level of government, and because of that everyone wants to grab an overly large share of the pie. Not only that, but in the case of Alberta the oil and gas industry accounts, directly or indirectly, for one half of the jobs in that province.
With stakes so high we should not be surprised to see that provincial leaders are unprepared to make concessions which might serve as a precedent for further loss of ownership and control in the resource sector. However, since the revenue is so large, Ottawa's stake truly is very, very high; but because of that it should not be perceived in terms of a little bit more revenue. At stake is not just revenue; if they believe that is all that is important, then they are making a big mistake.
An attitude of belligerence is being perceived in the west. It is an attitude which reflects the belligerence of the central government, regardless of its political orientation. It is an attitude of belligerence expressed by the centre to its parts. Is that really worth exchanging for a few points of revenue? Personally, I do not think so.
The legal issues in this debate are also of critical importance, but I do not feel that the legal issues should be the be-all and end-all. After all, we are subject to continually changing political circumstances which should not be left at the mercy of arbitrary courtroom discussion. A legally right position is not necessarily a morally right position, or a right position as it relates to equity within the relationships of the governments in this partnership. Even if we have a federal government which can legally take revenue, and even if we have court decisions coming down on the side of federal resource control, that does not necessarily make the trend right. As we discuss this issue and as we look at the legality of it, the dollar bills involved, let us not lose sight of the morality of it. Let us not lose sight of the equity as it relates to the partners of this great nation.
Provincial efforts to develop their resources have not been made any easier by the fact that the west, especially the prairies, was originally conceived as hinterland to the industrial heartland of central Canada. It is worth noting that while the British North America Act originally granted ownership of resources to the three original provinces of Canada, similar rights were not achieved in eastern Canada until long after provincial status was achieved. The reason for this is not all that flattering to federal governments of that era, either Conservative or Liberal governments. I would like to think that throughout history the party with which I sit had, in fact, been righteous always, but that is not true of any of the parties here. Alienation is not limited to the Liberal Party of Canada, the New Democratic Party or the Conservative party. Alienation is much bigger than that. It is, in fact, separate and apart from the various political entities which have controlled this country in the past and which, of course, are attempting to maintain the status quo. As my hon. friend for Richmond-South Delta (Mr. Siddon) was speaking he mentioned alienation, and I heard the Minister of National Health and Welfare (Miss Begin) holler across the chamber, "What does that have to do with this bill, these western concerns you are talking about? Get back to the bill."


Miss Begin:: Are you sick?


Robert Lloyd Wenman: No. You are the Marie Antoinette of Canadian unity as far as the west is concerned.


The Acting Speaker (Mr. Ethier):: Order, please. If hon. members wish to entertain discussions, perhaps they can withdraw behind the curtain. Right now we are discussing Bill C-57 and the Chair would like to hear remarks with respect to this bill.


Robert Lloyd Wenman: Mr. Speaker, I want it to be understood that sometimes the banter which goes back and forth in this House of Commons is reflective of the central attitude of belligerence. In fact, that is the intent and purpose of this bill as seen by western Canada.


An hon. Member:: The truth hurts.


Monique Bégin: Pretty stupid.


Robert Lloyd Wenman: When the minister calls a western concern about a tax on natural gas, which is inequitable and unfair, stupid, I am sorry she is in that frame of mind. That is the kind of attitude which is building the resentment which is, in fact, western alienation.


An hon. Member:: Stop talking about alienation.


An hon. Member:: Talk about the bill.


Robert Lloyd Wenman: Mr. Speaker, I hope the asides of members opposite will be reported. They ask me to stop talking about alienation and start talking about the bill. If there is any member of this House of Commons who can separate western concerns and western alienation from this bill which we are discussing I would invite them to come to western Canada in order to express that kind of separation. Mr. Speaker, I invite you to try to make that separation. The two are so intensely
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intertwined. If we could only get the message across, if all the speakers who have spoken here could get that message across and none other, then we would, in fact, be accomplishing a significant amount. Of course, the most important step which we would accomplish would be that this bill would not pass if an understanding of the situation in the west were held by members opposite.
In the interim between 1867 and 1930, when the prairie provinces were granted ownership of their resources, minerals had become an increasingly important source of revenue. At that point they were negotiable, the federal government was willing to say to the provinces, "All right, we will give you this revenue sharing. We will give you this source of revenue." Times have changed. At that time the government was a small part of our lives, now it is such a big part of our lives that the centre must acquire more revenue to waste in various massive government expenditure programs. The federal government granted provincial status to Manitoba in 1870 and to Alberta and Saskatchewan in 1905, but Ottawa retained control over their natural resources until 1930. When ownership was finally transferred to the provinces, the principle of control was that set out in section 109 of the BN A Act of 1867, which reads:
All lands, mines, minerals, and royalties belonging to the several provinces of Canada, Nova Scotia and New Brunswick at the Union, and all sums then due and payable for such lands, mines, minerals, or royalties, shall belong to the several provinces of Ontario, Quebec, Nova Scotia, and New Brunswick in which the same are situate or arise, subject to any trusts existing in respect thereof, and to any interest other than that of the province in the same.
The intent of the British North America Act at that time was very clear, but it has become less clear through central government practice.
At the same time, the prairie provinces were extended the right to impose direct taxes within the province, a right conferred on the original provinces by section 92.2 of the BN A Act. However, the BNA Act also granted considerable powers to the federal government which were to have far-reaching implications for provincial jurisdiction.
Those far-reaching implications are being felt over a hundred years later in the bill which is before us today. They are implications and not intentions which were established at the beginning of confederation. It is those intentions which are being challenged here today in our opposition to this bill. Specifically, section 91 of the BNA Act conferred upon the Parliament of Canada the authority to regulate trade and commerce and the power to raise money by any mode or systems of taxation. I do not believe that, at the time these powers were conferred on the respective governments in 1867, they were intended to be absolute. Unfortunately, over time, they have become regarded in this way. The provincial view is that provincial Crown ownership is, in the words of Alberta's energy minister Merv Leitch, the "key to the answer to nearly all questions of jurisdiction over natural resources". In this view federal action is limited strictly and absolutely to specified circumstances of truly national dimensions or emergency.
Two early court cases, Smylie v R. (1900) and Brooks-Bid-lake v A.G. British Columbia (1923) supported this view. Both cases involved the right of provinces to place certain conditions
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on the sale of timber abroad. Both judgments ruled in favour of provincial jurisdiction. More recent decisions show that the passage of time has modified legal views on the question of resource ownership. The federal position today is that Section 91 of the BNA Act gives them considerable scope for acting within the realm of resource control. They agree that the two cases I referred to earlier, Smylie and Brooks-Bidlake, do not apply when there is a question of provincial property, proprietary rights, versus federal powers over trade, commerce and taxation.
Two recent Supreme Court decision, Canadian Oil and Gas v. The Government of Saskatchewan (1977) and Central Canada Potash v. The Government of Saskatchewan, seem to support the federal position. In the first case, the government of Saskatchewan expropriated all oil and gas rights in the province and set up royalty and tax structures which would have effectively allowed the government to gather for itself all excess profits resulting from the sharp rise in the price of oil. The Supreme Court ruled that this represented an indirect taxation and was hence beyond provincial control because oil price increases would be passed on to the consumer instead of being taken directly from the producer. Moreover, it was found to intrude upon federal authority over trade and commerce because 98 per cent of Saskatchewan's oil was exported at that time. The second case, Central Canada Potash, involved an attempt by the Saskatchewan government to legislate the rationing of potash production between various producers. The potential of Central Canada Potash would have been greatly reduced by this action, and it appealed to the Supreme Court, which ruled that the issue was one of external trade, and thus the responsibility of the federal government. These decisions were the latest development in a process best summarized by S. I. Bushnell:
The present trend of the interpretation of the trade and commerce power by the Supreme Court of Canada towards restriction of provincial power over matters which have economic ramifications outside the province, lead to the conclusion that control over natural resources has passed to the dominion through the trade and commerce power.
The decision in this court case is, in fact, one of the most significant in setting this trend toward federal control and ownership of resources. It is this trend, which is being established by precedent, which is so alarming to western Canada. This trend is further fortified by bills like this which set another form of precedent and another form of taking control. This affects the very basis, future, and potential of the provinces.
We have more recently seen the federal government employ the trade and commerce provision to hold down the price of domestic oil and use its tax power to capture the difference between the domestic price and the export price. Efforts by the provinces to halt this process have been countered by federal government measures, which were apparently legal, according to the strictest letter of the law, but which were hardly equitable to the producing provinces.

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When one gets down to a debate of legality versus equitabil-ity, one finds western Canada to be in an impossible situation, because how can unequal parts ever be equal? When all the power and all the structure is based at the centre, and we are seeking equity, how can we possibly get it when we do not have the legal capacity or the power structure to make the changes? For example, when both Alberta and Saskatchewan attempted to raise royalty rates to take advantage of a massive oil increase in 1973, Ottawa responded by removing deductibility on royalty payments on federal income taxes paid by all companies. Rather than place such a heavy burden on the producers, who backed down? Was it the federal government, which should have backed down in the interest of Canada, in the interest of the region and in the interest of the producer? No, it was the provincial government which backed down in a spirit of compromise and a spirit of reality, it gave in; but by giving in, it gave everything that it had. It gave away the few levers of power that it had in a spirit of good will and in an attempt to come to some sort of compromise. Now it is left with very little.
The Lougheed government is attempting to use the only tool left to it, and that is control over production. However, this federal government and this House of Commons have allowed even that to be taken from Alberta, from the regions, and from the provinces. It has not just affected Alberta. It has affected the whole of Canada. We seem to view this so often as a set-up between a province and the country. But it is not a province versus the country; it is all for the benefit, or should be for the benefit, of the country. However, the federal government is prepared to take back this last tool through what it defines as an emergency. This Energy Supplies Emergency Act leaves very little in the hands of the provinces, and much less than was originally envisaged in the BNA Act of 1867.
In the words of Professor A. Thompson, the game is over if, in addition to setting prices unilaterally, Ottawa can compel the resource-owning provinces to sell. At that point, no real bargaining power is left to the province. De facto expropriation has occurred.
Can we move to de facto expropriation, the federal government, in fact, accomplishing expropriation of its parts? That is the question. Can we? The federal government seems willing to bargain with that, to play with that, and to take that chance of making the big grab; and it is losing all, because I do not think that the western part of this country can possibly accept that one last straw. That is what we are reaching.
It is so hard to explain that in this House of Commons. It is so hard to explain that to hon. members opposite who say we should get on with the issue of the bill when that is, in fact, the heart and soul and the very basic issue of the most important problem facing Canada today. It is that one more little step which is breaking the relationship of the parts to the centre.
Today we are discussing part of the enacting legislation of the National Energy Program which has continued this tradition of federal intrusion into provincial rights, but has again added a new precedent and a new element. Besides continuing to hold the price of oil below world levels and introducing new
tax on net revenues, the federal government, for the first time, introduced a natural gas-


The Acting Speaker (Mr. Ethier):: Again I must interrupt the hon. member; his allotted time has expired.


Mr. Pat Nowlan (Annapolis Valley-Hants):: Mr. Speaker, I am also glad to participate in the debate during the report stage of Bill C-57 which is now before the House. In view of the limited time we have on such a fundamental bill, I will try to make my remarks fairly short and concise. I guess this is always an interesting challenge for any hon. member, and it certainly is for this hon. member. I do not intend to become involved with this question of alienation of regions today.
We have heard quite a bit from hon. members, and certainly from those from the west. I think they have justification to feel very aggrieved at certain elements of this excise tax bill, which is what it is, in terms of how it affects the natural resources of a very specific part of the country, namely, western Canada. Without getting into the exchange which has taken place between hon. members from time to time, my fundamental concern with this bill is what will be done if this bill is enacted. Certainly, those in the viewing public and in the galleries must feel that this is pretty dry subject matter. It is the type of thing which does not only relate to regional alienation, but also raises the fundamental question of how the whole parliamentary process alienates the people.
The indexation of excise taxes started out on a quarterly basis, and I gather it is now based on the cost of living on a yearly basis. This really takes away the very real and historic reason as to why there is such an institution as Parliament. You, Your Honour, know well your history, and some of us know our history to a point. This whole parliamentary process started with the fundamental battle of the power of the purse. Parliament was not called together to legislate laws relating to all the social injustices of the land and to pass unemployment insurance bills and medicare bills which have evolved as society has evolved. It was a fundamental fight between the old king and his dukes and lords to try to raise the money so that the king could fight the wars of the crusades. That, in an elementary way and oversimplified to a point, is how Parliament-from the French word "pari" meaning to speak-came to oversee expenditures. I do not know about the ladies but, in effect, the lords and dukes said, "Look, Mr. King, we are going to provide the horses to fight the crusades and money to help pay the soldiers, so we want to have something to say about when we fight and who we fight, or if we fight all the time and whether we are going to have another War of the Roses for 100 years." It is the basic principle, the power of the purse from which the parliamentary system evolved and accordingly, it is how society evolved. At least once a year Parliament had a budget and the elected representatives of the people could decide what would be done with the money.
Some people might suggest that we may be getting into that kind of imperial trapping here with the long-time government
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by one party. In effect, the people were able to tell the rulers or the prime minister of the day that they did not like a particular tax and that they would not vote for it.
Once the principle of indexation of the excise tax is established, Mr. Speaker, why would the government stop there? Why not have an indexation of income tax and corporation tax? In many countries, as in this, the parliamentary process has fallen into disrepute and it is under attack because of the social order of the day. We all know that of the 150 countries that constitute the United Nations, only about 25 have the type of government that we have.
As the intention of this bill is to index taxes, it is not beyond the realm of argument that the next thing would be to index income taxes and then corporation taxes. In that case, why need Parliament meet? Everything could be tied to a computer and to the cost of living. All we would have to do is push a button at home. That is what I find iniquitous and why I reject this bill.
Traditionally, ministers of finance have had to come into this chamber and face the people who are sent here to talk about finances and the taxes of the day.
The problem is not just the alienation of region against region which appears in this bill, but there is also the potential for a further alienation of the public from the whole parliamentary process.
There is a specific example of this which affects everyone who imbibes at all. It is something about which the working man, about whom we properly hear so much, should be aware and concerned, and that is the effect of indexation of the excise tax on the price of beer. Other members have spoken of how the iniquitous increases are beginning to challenge the way the Canadian consumer spends his leisure time if he wants to have some liquid refreshment. I do not think any country has ever tried to influence social mores by means of a tax bill and I do not think that the Minister of Finance (Mr. Mac-Eachen) wants to do this either, but such is the direct effect of the excise tax.
It will mean a 29 per cent increase in the price of beer, a 155 per cent increase in the price of wine, but only a 6 per cent increase in the price of distilled spirits. When this indexation is compounded to 1991, it is clear that the cost of a two-dozen case of small bottles of beer will have increased by 157 per cent and will cost the consumer $23.64. By the same indexing principle, compounded to 1991, a 25-ounce bottle of relatively inexpensive gin will have increased 101 per cent but will only cost $16.42.
It does not take a teetotaler to appreciate the effect this will have on our social mores. We have to recognize that there are those who like to imbibe. Rightly or wrongly, the libation at five o'clock or six o'clock has become a way of life in most western industrialized countries-even in Russia I am told they imbibe the odd vodka. I do not know if they have beer in Russia, but if they do, I am sure that the working man who goes to his commune and votes for his commissars would not put up with a massive increase in the price to the tune of
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$23.64 for a two dozen case, compared to someone paying $16.42 for his gin or vodka. Revolutions have started on less provocation than the sledge-hammer approach of this excise tax index, compounded to produce this result.
While this appears to be a dry debate, there are elements which have some very real liquid connotations. As long as we talk only about the libation liquid and not about blood in the streets from the revolution which my hon. friend for Halifax-West (Mr. Crosby) mentioned, we need not worry, but all the same, revolutions have been started for less.
I say very seriously that this bill is bad in principle. It means more than the alienation of the region which is involved in the wellhead tax and the production tax on the natural resources of the west when there is no such tax on the natural resources of other parts of the country such as nickel, copper or electricity. The attitude is to grab some money-take it from the well. There will surely be alienation of the people who will be hit by this excise tax compounded and indexed to the cost of living. The government, which is not supposed to profit from inflation, has tried, as we all know, to index away the effects of inflation on personal income tax. But through this bill, if the cost of living goes up, so does the excise tax and the revenue to the government.
For that reason alone, I would have no hesitation in voting against this bill and I am glad to have the opportunity to speak against it this afternoon because of the effect it will have on the parliamentary process.
I see it is just about six o'clock, Mr. Speaker, so before I go on with my other points, may I call it six o'clock?


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Mr. Deputy Speaker:: When the House rose at 6 p.m., the hon. member for Annapolis Valley-Hants (Mr. Nowlan) had the floor.


John Patrick (Pat) Nowlan: Mr. Speaker, in view of the order of the House earlier, I know we have limited time and there are not many minutes left. Without reviewing what I said before the supper break, I do want to say that Bill C-57 is a pretty dry sounding bill. It deals with excise tax and what it will do to Canadians from coast to coast, be they high income or low income Canadians, be they people who like spirits or wine or people who like beer. This bill packs a hefty wallop. Revolutions have been caused by incidents less iniquitous than those contained in this bill. Canadian people who, in the heat of the summer, might like their draught of beer are going to be rather

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concerned with the indexing provided by this bill. The minister may laugh, he may like the odd beer too, I do not know about that. But Canadians from coast to coast will realize that for the first time we are putting an indexing clause in a tax bill, not to help the aggrieved taxpayer to pay his taxes, but rather a clause whereby taxes will rise if the cost of living increases. This will occur to such an extent that a case of two dozen beer in small bottles, not the great big quarts that people in Atlantic Canada used to know in the days of yore, will increase by 157 per cent by 1991. Therefore, in 1991 a case of two dozen beer will cost $23.64. On the other hand, there will be an increase of 101 per cent on a bottle of gin, whoever drinks that, or vodka and some of the other imported liquor under indexation and the compounding of it, which is adding tax to tax. However, a 25-ounce bottle of gin or vodka will cost $16.42.
This is an iniquitous tax. If this Parliament approves a bill that forever and a day establishes a precedent for future days, not in the days of yore, then all taxes might as well be calculated according to the cost of living index. Why not calculate the personal income tax according to the cost of living index? Why not calculate corporation tax or for that matter any other type of tax in that way?
I say to hon. members that this is a fundamental affront to the whole reason why this place first began many years ago when the old dukes and the lords sat together and addressed the king. 1 am not referring to Mackenzie King but to the old royal kings. It might have been Mackenzie King, too, but in the old days they said "Look, Mr. King, you cannot fight the wars of the crusades unless we have a say in what you are going to do." That is why Parliament started under the old English system. It was the power of the purse, and who was going to impose taxes. Did the people have the right to send representatives to the capital of the land to discuss taxes?
But when there is an excise tax which affects items in this country, let alone beer which some people like to enjoy, I say it is an iniquitous bill. For that reason alone, I am very happy to speak against it in a constructive way.
I said earlier that we are not talking about the alienation of regions. We all know now that people think different things about members of Parliament, about what members can do and what they cannot do. Many people think that members of Parliament are trying to do things to them through the back pocket or via the open door.
I believe in this place. These are the words of the late right hon. gentleman from Prince Albert whose shadow still falls from time to time on this House, to its betterment. This is the only institution that is the embodiment of the personification of 22 million or 24 million Canadians, however many there may be tomorrow, on June 3, when we are all supposed to sign our census forms. Parliament is the living organ from coast to coast.
I could speak a long time about this. While men opposite, those in government, political adversaries, respected colleagues
take a position, and I respect a person who does, I am sad about one thing. I am afraid that government ministers, not those on the back bench, have really lost touch with old Joe Canadian, old Jane Canada, Ms. Canadian, Mrs. Canadian and Mr. Canadian. They have been in power too long. They really have lost touch.
Getting off the subject of beer, which does not make this bill dry but makes it rather interesting, let us come to those things that other members have talked about in a serious vein. My whip tells me that I only have about two minutes left. I will not repeat all that was said about the inequities of the production tax, the 8 per cent wellhead tax, taxation of the natural resources in the west when we do not tax other natural resources such as nickel, copper or electricity in other parts of the country.
After we adjourned, the six o'clock news had confirmation that this national energy policy, which should be called nationalization of energy productivity, has failed. When I walked into the lobby at six o'clock, I heard over television an announcement by the Minister of Energy, Mines and Resources (Mr. Lalonde) that those little old Canadians who worried about 18 cents in an election a short two years ago will now pay another nine cents a gallon because this energy policy is failing.
I wonder whether the hon. member for Lincoln (Mr. Mack-asey) would stand in this House and tell us what a gallon of gas-not a litre-costs. Before the nine cents was added at six o'clock, because of what is happening in the national energy scene, the basic price of gasoline in this country was $1.60 a gallon.
The only thing that saved the government and fooled the people was the conversion to metric. We all got tied up with litres-a litre this, a litre here and a litre there. How many people know how many increases there have been since the election? Before tonight there were 11 increases. Eighteen cents was the dishonest open Sesame for the finance minister for whom I have no sympathy because that is how he engineered the takeover.
I understand my time is just about up. While metric and conversion to metric might save the government in the short term, unfortunately, to paraphrase another famous quote, in the long term Canadians from coast to coast are going to rue the day, and Bill C-57 is one of the instruments that should be put down, voted down and talked down by every Canadian from coast to coast.


Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, I will not take too much time in this debate because much of what can be said has already been said. There are two or three points that are probably worth repeating and there are a number of new points I want to make in order that we can tie this matter together. Anyone who happens to have inadvertently tuned into this tonight must surely wonder why the House of Commons is devoting so much time to this piece of legislation, given that there are so many much more basic and
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fundamental problems confronting the country that ought to be dealt with.
I was speaking to my good friend Sid Parker over supper-


Some hon. Members:: Order.


Ian Deans: I realize I should not use his name, but I cannot remember his riding.


John Patrick (Pat) Nowlan: And he's a good friend?


Ian Deans: He said he cannot help but wonder when we will begin to deal with the fundamental problems confronting the Canadian economy and the people of Canada. If legislation such as this, which under normal, more buoyant conditions would be seen as fine tuning the economy, is brought forward by a government faced with an economy that desperately needs new rings and valves, we have a major problem confronting us. I am surprised that we are being asked to do what we are being asked to do tonight.
I was looking at some statistics that I am sure you, Mr. Speaker, on behalf of your constituents have been looking at and worrying about. I can tell from the additional grey in your hair that it has been bothering you immensely. I know you have recognized in reading over this bill the impact of some of the proposals that have been put before us.
This bill is designed to inflict greater hardship. You would swear that if the government had sat down to find ways to undermine the economic fabric of the country, they would have come up with legislation such as this. If the government had fully understood the problems confronting this nation at the moment, the difficulties facing the average family, whether they live in British Columbia and cannot afford to buy a house, on the east coast and cannot find a job, in central Canada in Ontario or Quebec and find the entire manufacturing sector being undermined or in the mid-west, Alberta or Saskatchewan and see the effect of the government's taxation policies on their natural resources, it would know that people in all regions of this country are asking why, in the face of the evident problems, the tax on natural gas is being raised.
Why is this being done at this time when people are being asked to switch to metric, whether rightly or wrongly, and I will not enter into the debate on its merits at the moment. The government is asking us to switch to metric, but it has not recognized that small businesses in every single part of this country must lay out dollars they cannot recover from the sale of a product or produce they have available for the consuming public. This is simply because of the bank interest rates that have so detrimentally affected their ability to carry inventory.
Why would the government not eliminate the tax entirely on all of the equipment necessary for the very smallest of businesses to convert from today's weights and measures standards to the metric system which for one reason or another the government has decided must be put in place today no matter what the cost or burden?
My colleague for Kamloops-Shuswap (Mr. Riis) spoke about the effect of this on small business. He pleaded with the
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government to rethink this ridiculous 50 per cent reduction from their tax burden in order to accommodate the changeover to metric. He pleaded with the government to go the whole way and remove the burden now from people who cannot afford to pay for something they frankly do not think they need. They should not be required to pay the tax at all. It might even be said that the government ought to foot some of the bill. After all, it is the government that made the determination that this changeover must take place.
I do not want to devote a lot of time to another matter that undoubtedly has taken a lot of time of the House over the last few days, namely the changes in tax on beer, wine and spirits.
I think my colleague, the hon. member for Kootenay East-Revelstoke (Mr. Parker), said earlier today that this tax was aimed at the beverage of the working man. Is that not always the case. You never seem to tax the beverage of the affluent, you always hit the working man's pint of beer, and it has been that way since time began and taxes were instituted. This government follows that slavishly as if somehow or other there were no alternative ways to meet the tax burden that, over the course of the last many years, it has allowed the consuming public, the taxpaying public and the families of Canada to bear year by year.
This government speaks of its deficit and its tax problems as if somehow or other someone else created the problem or as if this problem were created by some other government. It fails to recognize what everybody else in the country knows, that we have been governed by Liberals for so long, in spite of that brief interlude of government by Conservatives, which reared its ugly right head, the Liberals have to assume the entire responsibility.
There is a tendency on the part of government now to introduce measures that would allow it to benefit directly from inflation. This is not the only government which has indexed its tax system to enable it to benefit from the inflation it claims day by day it is trying to fight. The province of Ontario just recently announced that it too was going to get on the inflation bandwagon as it affects the taxes it raises by indexing its taxes in some areas to the level of inflation so it would be able to reap the benefit of its own inadequacies and mismanagement.
I say to you that when a government is so incredibly negligent in its approach to the levying of taxes and, in fact, to the expenditure of funds generally, one cannot help but wonder whether this country has in fact any possibility of recovery, given that the Liberals have at least three more years to wreak their havoc on everyone.
There is an alternative, however.


An hon. Member:: Not the NDP.


Ian Deans: There is an alternative to these measures. It is an alternative that we in this party, in spite of the bleatings and hootings from certain Liberal backbenchers who rarely get to their feet to speak, suggest could be pursued by this

June 2, 1981
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government. It is an alternative that, if the public of Canada were made aware of, and knew what has really taken place, they would embrace.
I suggest to you that my colleague, the hon. member for Broadview-Greenwood (Mr. Rae), when speaking during the question period, put some statistics before the House that are almost mind-boggling. It is hard to believe, without having the information provided by an independent source in front of you, that the conditions of the economy of this country have deteriorated to the level to which they have deteriorated.
I know, Mr. Speaker, that you know, and perhaps two or three other members would know if only they would take off their muzzles, rise to recognize it and do what they really feel they should be doing, that in spite of the fact that the average wage has risen only 150 per cent in the last ten years, the direct taxes levied by this government on the people of Canada, those very same wage earners, has risen by 300 per cent in the same period of time. I know my hon. friend, the member from Revelstoke sitting beside me knows, as I know that other members of the House know, that during that very same period of time bank profits, which the president of the Royal Bank and the Governor of the Bank of Canada seem to think are fair and reasonable in this country, rose by 210 per cent. Remember that wages in those ten years rose by 150 per cent, and taxes on wages in those ten years rose by 300 per cent. Bank profits during those ten years rose by 210 per cent. Do you know what the tax increase was on the banks during that period? Would you believe it was 14 per cent?
How can this government bring forward this piece of legislation which inflicts this burden upon people in this economy who frankly cannot afford to meet the commitment or the bill? At the same time, while sitting back watching the wage earners of this country being ripped off day after day by this government which does not care about their capacity to meet their needs, the government is turning a blind eye to the fact that banks, which have been able to take unfair advantage of the inflationary spiral fed by the policies of this government and its predecessor and supported day after day shamelessly by the Governor of the Bank of Canada and the bank presidents of this country, have seen their tax burden increased by only 10 per cent over ten years. These people who have reaped so much of the benefit over these ten years, with wages, I must say, considerably in excess of the wages of average individuals working eight hours a day, 40 hours a week, 50 weeks a year producing products that should be able to be sold in this country and across the world, these people who have benefited so greatly from government policies and supported by them almost without question, have seen their tax burden increase by only 14 per cent.


Stanley Howard Knowles: That is no burden.


Ian Deans: As my colleague, the hon. member for Winnipeg North Centre (Mr. Knowles), says quite rightly, that is no burden. You have heard, Mr. Speaker, as have I, my colleague, the hon. member for Winnipeg North Centre, rise in his place for years putting before the government the plight of
the pensioners of Canada, asking the government day after day if it does not understand that the pensioners in this country are unable to meet the ever-increasing cost of living, that they are unable to meet the inflationary spiral that inevitably affects every single part of their life because of the inadequate income levels they receive. Every day he rises and the government turns a deaf ear to that plea.
What purpose does the House of Commons serve if we are not able to deal with the major problems that confront the average individual from coast to coast in this country? What is it that we say to people today as they walk out and away from their homes, not because they do not want to live there, not because they have not worked hard every day or made the effort, but because we, sitting in the House of Commons, have no vehicle for bringing under control the policy of this government which seems bound and determined to undermine the very fabric of the economy of this country and the people who live here? I say to you, Mr. Speaker, this must exist in your constituency as in mine and in that of most other members, and you must have seen the way in which those young families have given almost everything they have to buy a home they were barely able to afford, only to be faced with such an increase in interest rates that not only are they forced to leave the home, but forced to leave their investment in that home behind them because they could not sell it to anyone else at current interest levels. The people who are living in the same communities cannot afford to assume the mortgage either. Why does this House of Commons not have the time to deal with that important matter? Why is it not possible for us to have a debate on what could and should be done to try to resolve that, when we can find time to talk about an excise tax which works an even greater hardship? We should be trying to find solutions to existing problems.


Neil Young: That's the Liberals.


Ian Deans: As my colleague, the hon. member for Beaches (Mr. Young), says, "That's the Liberals", and I suppose if we think about it and look back over the years, that is the history of the Liberal party. It has always said many good things, but when it came time actually to perform, the performance has never lived up to the expectations the Liberals have been able to raise.
Any day now the Minister of Finance (Mr. MacEachen) will be coming forward with one form or another of wage controls. As I pointed out earlier, wages have fallen far behind for four consecutive years. The wages of workers have fallen behind increases in the cost of living. That has happened for four consecutive years, yet the Minister of Finance, shored up by the Governor of the Bank of Canada, has the audacity-


Bob Rae: Chutzpah.


Ian Deans: -or chutzpah, to suggest that somehow these workers whose wages have not even kept pace with the inflationary spiral are responsible for the inflation we have and that he will move by one mechanism or another. He can have TIP
June 2, 1981

or direct wage controls; he can call it what he likes; the fact of the matter is that he will move to restrict further the wages of those people while at the same time allowing the banks to continue to operate as they have. Together with the Bank of Canada and the Government of Canada, the banks have forced prices up and up and up. By a policy decision, they have forced small businesses into bankruptcy in record numbers in the last two years. As a matter of conscious decision they have forced small family farms into bankruptcy right across this country in record numbers over the last two years. As a matter of policy they have decided that there will have to be those who fall by the wayside. Inevitably those who fall by the wayside will be those who had little to begin with, and they will lose what little they have worked for.
I say it is an affront for the government to come forward with a legislative proposal of the type we have in this bill. It is a disgrace that we should be here tonight speaking about these changes, which are unnecessary and destructive, when we should be dealing with much more serious and much more far-reaching problems.


Mr. Douglas Roche (Edmonton South):: Mr. Speaker, I am always amused when I hear a member of the New Democratic Party attacking the Liberal government on its energy and economic policies. It is just hilarious. I tell the hon. member for Hamilton Mountain (Mr. Deans) that the New Democratic Party had its chance to support a decent government and its energy and economic policies in 1979. You elected to choose that bunch over there. That is what you have to live with. I think it is ridiculous for the New Democratic Party to come in here tonight and raise hell with the government. Why are you not here defending members of this government? You put them there.


Mr. Deputy Speaker:: Order, please. The hon. member's remarks should be addressed to the Chair.


Douglas Roche: Mr. Speaker, I intended to address you. It is not my intention tonight to delay the continued process of this legislation, which was already been extensively examined, but I cannot remain silent in the face of the deepening crisis respecting the energy policies and price increases which are brought about by the National Energy Program, and I cannot remain silent in the face of the intended actions of the government through Bill C-57.
Not only as an Albertan but also as a Canadian I am opposing the taxes in this legislation in the strongest possible way because of the very serious impact there will be on the industry, our energy future and the economy in general.
The arguments our party has put forward in opposing this legislation have been very clearly and extensively delineated, particularly by my colleague, the hon. member for Edmonton West (Mr. Lambert), who did an outstanding job in his analysis, and the hon. member for Etobicoke Centre (Mr. Wilson) and the hon. member for Medicine Hat (Mr. Hargrave), who also made distinctive contributions to this debate.
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What are we facing here tonight? As was the case in the Constitution debate, again the government is impervious to the comments of hon. members who have a larger view of the power and the potential of Canada than the narrow, centralist concept espoused, most notably by the Prime Minister (Mr. Trudeau) and his chief energy aid, the Minister of Energy, Mines and Resources (Mr. Lalonde). As a result of what I call the continued centralist introspection which comes through in the government's policies and legislation, particularly respecting the Constitution, energy and economic fields, we have a country which is tied up in knots.
I returned this morning from a conference of educators in Winnipeg. We were discussing some of the larger questions of development and Canada's role therein. Some of those educators from across Canada turned their attention to the inability of Canada to make clear, comprehensive policies in the development field when we are at such an impasse in our federal-provincial relations. The people who were there this morning are intelligent, and they were asking why we have this continued impasse in federal-provincial relations in this country. It is madness, so much so that one person even suggested that if somebody could figure out a way to solve the federal-provincial deadlock and stop the wars which are going on in this country, that person would deserve the Nobel peace prize.
What we have now is a second imposition of a cutback in production by the province of Alberta. Alberta has now cut back production by 120,000 barrels a day in an effort to make clear to the federal government that a fair and just energy policy and pricing scheme and formula must be arrived at in the interests of all Canadians. We have had imposed on us a levy at the pump to pay for the resulting increased importation of oil.
We already know we are paying $5.5 billion a year- perhaps it will go up to $6 billion before this year is out-for imported oil while oil is lying in the ground in Canada which could be used instead. We have been through this many times in the House of Commons. I will not delay the debate any more tonight except to ask, on behalf of the people who sent me here and on behalf of Canadians as a whole, when this impasse will come to an end. When will we stop seeing oil rigs being driven out of the oil-producing provinces? Up to now, 139 oil rigs have been driven out of the country; 63 more are to follow. Each one of them is worth at least 60 jobs. Drilling activity is down 50 per cent. Canadians are being asked to put up with all of this. That is a policy of madness.
Is it too late? I do not believe it is too late. The people of western Canada are very anxious and concerned. They do not want to turn their backs on the rest of Canada. And I do not want to be accused of being an alarmist or crying wolf when I say again that the incidence of separatist feeling is increasing in western Canada and particularly in my own province of Alberta. I want to say that to the government again in a plea to have them hear voices other than the 20 people in Ottawa who, according to Richard Gwyn, have the ear of the Prime

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Minister. The Alberta gas co-ops sent 126 oil and gas well service industry representatives to Ottawa to speak in very clear terms of severe cutbacks, lay-offs, massive budgetary reductions and idle drilling rigs, and I want to know why those distinguished industry representatives cannot be heard here. Let me quote, Mr. Speaker, just one paragraph from their brief. It is well worth hearing again. They said:
On behalf of our members, and for the benefit of all Canadians who are, or will, use natural gas or natural gas by-products as a source of energy, we protest the imposition of the recently announced natural gas excise tax.
This excise tax will have particularly harsh effects on those with low or fixed incomes, unskilled wage earners, elderly pensioners, and farmers who have only limited opportunity to recover this additional cost.
Now, Mr. Speaker, are the Alberta gas co-ops not worth listening to? Is the Alberta Chamber of Commerce, which submitted a brief along the same lines, not worth hearing? These are the voices of responsible, moderate and productive groups in our country who want to move Canada into an era of high production, one of which we are capable and which must be achieved if we are to have energy self-sufficiency before the year 2000. I have already lost hope that we will have it by 1990. These people ask, and properly so, why is it that our resources are to be taxed when others, such as gold, uranium and hydroelectric power found in other provinces, are not? That is a question I would invite some member of the government to stand up tonight and answer. I would like to know why the government is so determined to nationalize the petroleum industry, why we see this same kind of philosophy in its attempted takeover of the CDC, a philosophy which we see espoused in so many of the government's policies.
We in Alberta, Mr. Speaker, want to participate fully in the continued development of our country. I say to you that the Prime Minister, who is giving some attention these days to North-South problems, is not going to achieve gains in the North-South if he is unable to solve some of the east-west tensions in our own country. That is something which needs the attention of our government in a much larger way, taking into account the responsible voices who are pleading with the government to get on with the job of developing our country and allow each region to participate fully so that we can proceed together in a world that needs our productive ability. It is not right that bankruptcies are up 300 per cent in one year in Alberta, a province that is supposed to have one of the most dynamic economies in our country. The deleterious effects of the cutback in oil production in Alberta are being felt in the secondary industrial aspects of our society.
I say to you, Mr. Speaker, that the combination of constitutional, energy and economic policies carried on by this government, which we see continued tonight in the government's determination to push Bill C-57, are destructive and are going to destroy our country. I do not want to be around in a few years' time when my children come to me and say: "Where were you when it was clearly apparent what was happening to our country, where was your voice?" I tell you, Mr. Speaker, that here I am, one of many people in this House representing millions of people who are fed up with the way in which our country is being mismanaged. This government must really be
a lover of animals because I am telling you, it is sending our country to the dogs tonight.


Mr. J. R. Ellis (Prince Edward-Hastings):: Mr. Speaker, I am going to be reasonably brief in my remarks this evening. First of all, I want to do as my colleague, the hon. member for Edmonton South (Mr. Roche) did and direct a few words at the previous speaker, the hon. member for Hamilton Mountain (Mr. Deans) who had the audacity, the bravery, the courage to take on the banks from the very, very safe position of being unable to do a confounded thing about it. He knows very well that in doing that, by supporting his friends across the way as that party did a year or so ago, he will never be able to do anything about it. I want to go on record as well as having said to my friends on the left that they had an opportunity to put into place a government that would have taken action on all of our economic problems and they blew it.


An hon. Member:: You too defended Bouey.


John Raymond Ellis: And my guess is that they will continue to blow it.
Tonight I want to deal with one very small segment of this bill, that is motion No. 9 in the name of the hon. member for Edmonton West (Mr. Lambert), and I thank him for putting it on the Order Paper. He and I had some discussions on this, and while I could not possibly attend the various meetings in committee-and I make no bones about the fact that I do not get very involved in tax bills-they bother me more than just a little bit. Nonetheless, this particular item is one in which I am particularly interested. It has to do with the removal of the provision for commercial air service operators to deduct the tax on aviation gasoline used in flight training. This is an example, Mr. Speaker, of the government, as it has done in the past, taking a pot-shot at a very small segment of the economy, one with very little ability to fight back because it is not as big as the airlines, the banks or many other segments of the economy. In fact, it is made up of some very fine people who are very concerned about that segment of the economy.
The commercial air service operators who provide flight training are very concerned that the importance of this training is being lost sight of, as evidenced by these tax measures. In the mini-budget of April 21 last year, the sales tax exemption for commercial aircraft was amended to exclude aircraft used in flight training. In the same budget it was confirmed that refunds of the excise tax on aviation gasoline, which was imposed in December, 1978 ostensibly for non-commercial users, would not be available for flight training activity.
Now, Mr. Speaker, I want to take a moment and put on the record a picture of one of these small fixed-base operators. The one I will use as an example is a man named Jim Marker. Jim Marker has been involved in the education of students of flying in the Belleville area. In fact, he has been involved in all sorts of flying in the Belleville area for these many years. He is a very dedicated man. I doubt very much if he has ever taken a cent out of the business which he has supported so loyally for these past two decades. As a matter of fact, I know he has put money into the business on a regular basis. In fact, his position

as a vice-president of a major corporation in the Belleville area is all that allows him to do this job as well as he does.
There was a need for better facilities for flying in the Belleville area a couple of decades ago. At that time there were no government measures which would allow for the development of this sort of industry in a small community like Belleville. Jim Marker bought the land, and having bought it he cleared it, cut down the trees and made it ready. He erected a small building on it to act as an office and a centre for pilots. It contained a room in which pilots would receive their ground schooling. In the very early days, of course, in the spring, it was all mud, so Jim went out and bought gravel with money out of his own pocket and spread that gravel on the runway to keep the mud down.
Obviously, any activity of this sort requires aircraft. So Jim went out and bought the aircraft, again out of his own pocket. In order to repair the aircraft he trained himself to be a first class mechanical engineer capable and licensed by the Department of Transport to repair aircraft. When it was obvious in the wintertime that the cost of having the snow removed from the runway to allow flights in the wintertime would be too expensive, Jim went out and bought a secondhand grader. He keeps the grader in excellent shape in order to keep the runway clear through all types of weather, all winter long.
In the summertime, of course, grass grows up over the runway, for it is a grass airstrip. While I had an opportunity in the few years when I was mayor of the city of Belleville to quietly help him by lending him some parks equipment every once in a while, to keep the grass under control, that has not been the case since. So Jim went out and bought a tractor to cut his own grass. He rides around in the evening and on Saturdays to cut the grass, since it is necessary to keep it done. He has built more hangars. In fact, he has been the strongest supporter of general aviation in the area that this country has ever seen. He stands out as a monument, as one who has devoted a good part of his life to general aviation. Now, Mr. Speaker, Jim will be taxed again. He has one voice in this House of Commons, and I am proud to be that voice. I hope that members of the House will understand that I am speaking on behalf of all the Jim Markers all across Canada who are oppressed by this particular tax.
The commercial flying training segment of the Canadian air transport industry has, over the years, served Canada very well, not only in times of national emergency but through its continued support in the development of the vital Canadian air transport system. This segment of the industry formed the nucleus for the British Air Commonwealth training program, a major contribution throughout all of the Second World War.
The benefits of a vigorous air transport industry to the development of Canada and its economic and cultural growth have been well recognized. The survival and the continued growth of this dynamic industry is dependent upon the preservation of a healthy, well-equipped and professional pilot training service. It is essential that Canada maintain an adequate
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pool of well-trained and experienced pilots to meet the present and future requirements for all classes of commercial air services, as well as government air services, corporate operations, military support and any future national emergencies. I know that one of the young men who trained in the Belleville area now flies for Air Canada. I should not really say only one, Mr. Speaker, since I know that there are more than one, there are a few. Some have gone to the military. The interest in flying training is something that, when engendered in a young man, usually turns out for the best of the country. Without that vital support, the Canadian air transport industry would be unable to accommodate the requirements of the public for essential air services from Canadian resources.
It is obvious that up to date professional training organizations play an important role in achieving and maintaining an acceptable level of Canadian flight safety, not only within the air transport industry but throughout the private and corporate sectors as well. Acquisition of modern, well-equipped aircraft is essential in order to train pilots to operate safely and efficiently in today's complicated environment. Flying training facilities and operations traditionally receive an exceptionally low potential return on investment, particularly as potential pilot entry into commercial aviation must, of necessity, be within an age group which is not able to afford high cost training.
As I said a moment ago, Jim Marker has probably not taken a red cent out of his operation in Belleville, yet it is open to people who fly across Canada. We have pilots who drop in to Jim Marker's facilities; the guest book is filled with people's names, from east, west, south and north. They land and use the facilities at no cost. There is no $5 landing fee in Belleville.
It must be recognized that virtually all flying training schools, such as the one about which I have been speaking, and clubs, are also licensed to conduct other commercial air services, some of which are exempt from the sales tax and gasoline excise tax. Mr. Marker has a small charter operation and runs some sightseeing flights. He maintains personnel at his facilities year round to service aircraft. He also maintains pilots and instructors who are on duty all the time. With relatively small fleets of aircraft, it is not possible to dedicate an aircraft to any one class for which the operator is licensed, but the aircraft must be utilized in all phases of the operation. The same aircraft Jim uses to take someone up to do aerial photography is the one that I may well use, if I happen to be in Belleville. Just recently I took the mayor, the city manager and some other very important people from the Moira River Conservation Authority for a flight up and down the Moira River. At that time the river was in flood and some 500 or 600 acres of the city were under water and many thousands of acres outside the city. The same aircraft I used for that trip will be used for flying training one day and for a charter flight the next.
It is also important, of course, to learn appropriate lessons from past experience. In 1977, in the national interest, the Department of Manpower and Immigration deemed it necessary to restrict the issuance of Canadian work permits to

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foreign helicopter pilots. As a result of this action, it became necessary for Employment and Immigration Canada to establish and support a two-year training program at a cost of some $2 million to upgrade the skills and experience level of Canadian pilots to ensure that Canada could continue to provide the necessary helicopter air services in the public interest. This experience graphically emphasizes the importance of maintaining policies which will support provision of regular and continuous professional pilot training and the economic fallacy of eroding this segment of the industry. Having regard to this fact, Mr. Speaker, it appears to be entirely inconsistent to now impose tax measures which would burden flying training costs and inhibit this activity.
A further adverse effect has now been produced by the sales tax on aircraft parts and equipment, inasmuch as such items bought for transportation of persons, freight or mail, if also used for flying training, will be fully taxed despite their part use for tax exempt activity.
As I said when I started out, this is a very narrow segment of the bill. It is one which is of importance to maybe a dozen hon. members in the House on both sides. However, it is extremely important. It is often overlooked. The little airport in Belleville which is run by Jim Marker, as I said earlier, does not charge $5. If the hon. member from Essex-Windsor (Mr. Whelan) happens to be flying over in his aircraft and finds he has to land, he can get in there safely. He knows that the radio facilities which are there are provided free of charge. There is no input from the federal government. Here we are, adding another tax on top of all of those taxes that the ordinary user of aircraft gasoline is faced with. The figure last fall was around 13 cents a litre, and now it is closer to 17 cents a litre. That is just in taxes and fees charged by the various levels of government against the private aircraft user, and particularly those who are using it for flying training.
It is coming at us from all sides. At another time and in another place, I intend to spend some time talking about the effect of the move by the Department of Revenue to reduce the income tax exemption for flying training to 35 hours. That is another very unsafe way of collecting a very few pennies. However, those few pennies are very important to those of us who are involved in flying training. They are very important to a segment of the economy in which people have dedicated a tremendous part of their lives to this very important activity. I want to say, as strongly as I possibly can, that this motion No. 9, in the name of the hon. member for Edmonton West is one that I want to support as strongly as I possibly can.


Some hon. Members:: Hear, hear!


Mr. Howard Crosby (Halifax West):: I thank Your Honour for the opportunity to make some remarks on Bill C-57 which is now before the House, an act to amend the Excise Tax Act and the Excise Act. At the outset, I would say that it is not my intention to direct my remarks to all the provisions of this bill
of which there are 133, but rather I want to look at some of the background of these specific provisions which we now have before us and consider them in the light of the policies from whence they come.
It is simplistic to say that the provisions for the implementation of the government's tax measures are contained in this bill. In order to understand them and appreciate the basis for those provisions, we must look at what the government intends in terms of its revenue gathering and its aims and goals for the people of Canada which it exercises through its taxation policy. Just this weekend in the maritimes we have seen evidence of the conflicting views which exist in Canada with respect to the goals for the nation, and for the goals of the private sector versus those of the public sector, and how those goals intermesh.
The Prime Minister of Canada (Mr. Trudeau), in a speech before the Council of Maritime Premiers in Fredericton, New Brunswick, just this past day, said that the federal government can no longer take responsibility for redistributing wealth in Canada and that it has lost control of the resources and the financial capability of Canada to the extent that it can no longer take on this responsibility. Premier Lougheed of Alberta, speaking in Halifax just the day before, indicated in his speech that he welcomes that. He welcomes it for a very good reason, because through Canada, in the private sector and among the provinces, there is the ability to accomplish many of the goals through the exercise of the abilities and capabilities of the private sector.
Therefore, the Prime Minister, in suggesting to Canadians that his federal government can no longer take responsibility for redistributing the wealth of Canada may, in the end result, be appealing to a sense of entrepreneurship which has not been exercised here in Canada heretofore. The province of Alberta, through the private sector in Alberta, and acting through the government of Alberta, may be willing to take up that challenge and achieve these goals in that particular area. This challenge would not only be for that particular area, but for all Canadians. So we must realize that behind the taxation measures which we see before us is the real government policy, the real strength of this nation in terms of what we are able to accomplish through policies and through government and the different trends which have now become evident.
As I have already indicated, on the one part the Premier of Alberta is taking the attitude and the position that the private sector can accomplish much, while on the other, the Prime Minister of Canada is saying that unless drastic measures are taken the government can no longer take responsibility for redistributing wealth in Canada. We have to ask, who ever asked the Prime Minister of Canada to take that kind of responsibility? Certainly we want and require a level of services which is standardized throughout Canada so that all Canadians will receive services. However, to go beyond that and to talk about the authority and the power to redistribute wealth is an entirely different proposition. Therefore, when the Prime Minister of Canada stands before the Council of Maritime Premiers and before Canadians and says that he no
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longer has the ability to redistribute wealth in Canada, many people welcome that remark and say that it never was his authority, and that it never was his responsibility to take on that challenge.
I want to relate some of those general remarks to the provisions in this bill because what we are looking at is an attempt to regain that ability to redistribute wealth and to regain the power and authority to gather in all the funds, the money which gives authority to that power. In the world we live in we have to recognize that money is power, that those who control the purse strings and those who have the financial resources can exercise control well beyond the simplistic dollars which are involved, because, as I have said, money is power in so many ways. So we have to look at these provisions in that light. Is this really an attempt to gain power? What is the government trying to do through the exercise of its legislative authority through this House of Commons under Bill C-57?
I say to Your Honour and to other people in this House that it is merely an implementation of a government policy to gain the financial capability which it perceives it has lost. Therefore, in spite of the Prime Minister's words, he does want, and he wants on behalf of his government and his party, to regain the ability to redistribute wealth in Canada and, in that way, control not only the private sector and that which is rightfully in the public sector, but control the whole economy. We have to look at the provisions of Bill C-57 in that light.
In that connection, I want to refer to the change which is evident in federal-provincial financial arrangements which have already been announced by the Government of Canada and by the Prime Minister, and have been evidenced by his establishment, through this House of Commons, of the task force on federal-provincial fiscal arrangements. Again we see this shift and concern on the part of the Government of Canada for its eroding position in relation to its revenue-gathering abilities, and as it relates those revenue-gathering abilities to its capacity to control the economy and the people of Canada.
What we have through this federal-provincial task force is a vehicle to spread the message of the Government of Canada, which we hear time and time again in this House in other ways and which we see evidenced here in this Bill C-57; that is, that the government needs more money. That is its problem. It is not getting its money.
I will explain why the Government of Canada is not getting the money that it needs to exercise the kind of financial and economic control that it has in the past. The reason is very simple. It is that the wealth of this country has shifted from the manufacturing sector, from the pure business community, to the natural resource community; that is to say, the wealth of this country is now evidenced by its natural resources and its ability to deal with those natural resources. The funds from them are now very clearly flowing to the provinces and the people who control the natural resources; they are not going through the same process as they have gone through in the past. In particular, that means that those who control the
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manufacturing and secondary industries in this country no longer have the financial clout and power that they had in the past. The government has to adjust to this change.
What the government is really doing is shifting taxation to that resource area in a way that has not been done in the past. What is at stake is not any great policy; it is just the gathering of dollar bills and the philosophy that with those dollar bills the future of this country can be controlled. We must examine the provisions of Bill C-57 in that light and ask what the end product will be, and why the government is moving in this direction.
Even though I come from eastern Canada, a part of the country that does not share the resource revenues at the present time, I have sympathy for the western provinces and for the philosophy espoused by Premier Lougheed in Halifax, Nova Scotia, the other night.
What the premier is objecting to is this reaction by the Government of Canada to the shift in power. The government is not willing to let the economy take its course, and transmit wealth. It is holding on to what it perceives as belonging to it in a way that works to the detriment of those people in the private sector and the resource-producing provinces which now have control of this wealth. It is not a simple matter of legislating a tax by means of this bill; it is a matter of legislating, assisting and conniving the transfer of power that the government seeks through this bill.
What I am referring to, Mr. Speaker, is the 8 per cent tax on petroleum and natural gas that will be imposed when this bill is passed. I realize and recognize, as do many Canadians, that to a great extent this will benefit many people in Canada. But we have to ask ourselves whether the fact that it is beneficial to a great many people is justification for the action. It is a question to which I am prepared to answer that I do not think it is the proper way to do it-to legislate through this Parliament the transfer of authority from the provincial authority that has these resources, to the federal authority that wants to hold on to its ability to redistribute wealth in Canada.
There are other methods to accomplish the same end but they involve agreement, reconciliation and understanding between the regions of the country. The ultimate result of enforced policy is rejection of that policy. That is what will happen if Parliament insists on this transfer of wealth through a legislative provision which implements a government policy of requiring that wealth produced by the resources of western Canada, and in particular Alberta and Saskatchewan, being transferred back to the central authority by means of an act of Parliament.
I do not believe that will work, Mr. Speaker. I believe that the government is making a serious mistake in taking that approach to the problem. It is avoiding the real issue, which is that there is a rationalization through which we can reach a mutual agreement for a sensible pricing formula for oil and gas. I realize that it may not be the price that the premier of Alberta would like and it may not be the price that we in

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eastern Canada are willing to pay at this point because we want the lowest acceptable price that can be enforced on the people of western Canada, and the governments concerned, for their oil and gas.
I think this bill avoids the real issue, Mr. Speaker. The government may think that it is solving its immediate problem by gathering revenue through this source, but an enlarged problem faces us in the years ahead. That problem can only be resolved if agreement is reached on what is a fair and equitable distribution of the resources and the proceeds of the sale of the oil and gas owned by the western provinces.
I am not one of those who says that we should go through with this because we in the east will benefit from it and it will remove our immediate problem. I think the problem has to be attacked on a broader base. The government is shying away from its responsibility in this area and it is just simplistic to blame the governments of Alberta and, to a certain extent, Saskatchewan, for the failure to reach agreement on an appropriate price for oil and gas and to substitute this taxation measure for that agreement.
I think that members on this side of the House are right when they object to Parliament being a party to the enforcement of this government policy. The government, concerned with its eroding position with respect to revenues, is simply using this taxation policy as a means of transferring resources.
In the case of the east coast, that area of Canada which borders on the Atlantic Ocean and which claims submarine lands that lie under it, the government is not even giving it the benefit of a statutory implementation of its policy; it is simply attempting to seize those resources, whereas it is depriving the western provinces through a taxation policy. The government will not face up to the claim of the provinces of Nova Scotia and Newfoundland to these resources. It simply denies their claim and uses its powers and capacity as the central authority to seize them.
This is more than a shame for the Government of Canada, Mr. Speaker; it is a shame for all members of Parliament opposite who participate in it. They are denying to the people of the Atlantic coast, particularly in the provinces of Nova Scotia and Newfoundland, the possibility of going beyond their dependence on federal transfer payments and federal welfare payments and moving into a new era where the resources can be developed for the benefit of the people.
We can see how the central government contributes to this strife and difficulty which sets region against region. I hope we on the east coast will not be drawn into the centralist view of coming down on those western provinces which have, by their own fortuitous circumstances, achieved a measure of wealth. I hope that we will not support the federal government in this war on western Canada and the seizure of its assets on the basis that the federal government will distribute those assets across Canada, perhaps to the momentary benefit of eastern Canada.
It is evident from the policy of the government on Bill C-48, the Canada Oil and Gas Act, that it plans the same kind of
future for Newfoundland and Nova Scotia if those provinces are able to achieve the level of resource richness enjoyed in western Canada.
Whether hon. members opposite recognize it or not, the central government is setting itself not only against the western area of the country but against the east coast as well. It will not be very long before the province of Newfoundland and the province of Alberta are joined in battle. The battle they will be joining is the implementation of the policy now before us. Through its legal capabilities, its lawyers, its counsel, its many consultants, the federal government knows a great many techniques by which to accomplish its end. Unfortunately, the new techniques which the government uses to accomplish its ends are not acceptable to the people of Canada. The technique of establishing a taxation policy to accomplish ends that were not intended to be within the power and authority of the Government of Canada are not acceptable. But that is what is happening via this bill. The government is using its taxation policy to accomplish its end, and its end is the control of wealth in Canada. That would be acceptable only if the control of wealth was for the purpose of establishing and supporting federal programs required by all Canadians. But that is not the end purpose of the Government of Canada. Its purpose is to go further and control all Canadians and to gain control for the purpose of perpetuating itself in office, and for no higher purpose than that.
Let me turn to some of the specific provisions in the bill beyond that provision to which I have already referred, and that is the taxation on natural resources, in other words, our oil and gas. There are other areas in which the government has tried to enforce its policy. I am thinking of the taxation of beer and wine which again is unacceptable to a great many people. We ought to foster, through government policy, moderation in the use of spirits. We ought to ensure that taxation permits moderation and encourages people to utilize beer and wine, the more moderate spirits, over the alcoholic liquors. There are many other things I could mention but as my time is coming to an end, I want to conclude by saying that there are serious objections to this bill. We will have to take them into consideration when we vote.


Mr. Simon de Jong (Regina East):: Mr. Speaker, I am pleased to join in the debate on Bill C-57. Essentially I want to talk about the impact this bill will have on the artists of Canada.
Various speeches have been made in this House outlining some of our objections to this bill. I understand even the hon. member for Winnipeg North Centre (Mr. Knowles) has talked about the inequities and evil of taxing spirits covered by this bill. In any event, I leave that topic to other members.
I wish to speak on the imposition of the sales tax on prints and original works of art, of which there are limited editions and copies. I shall talk about the government's stupidity in imposing a sales tax on these works of art. This is a provision about which the whole artistic community is scratching its
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head. In fact, the artistic community is downright angry at the blatant lack of wisdom in the imposition of such a tax under Bill C-57. What the bill essentially fails to do is to distinguish between original prints and reproductions manufactured by mechanical means. It is the inability of people in the Department of Finance to see that difference and to express that difference in law.
What the proposal will do is to reclassify artists and master printers as manufacturers. This is something which the visual artists in this country are not quite willing to accept. The effect of Bill C-57 will make works of art more expensive. It will make it more difficult for artists to sell their work to the private sector and to galleries. The income of over 50 per cent of full-time artists is roughly $6,000 a year or less, and making their work more expensive will make it more difficult for them to sell it. A fair number of individual artists supplement their income by having a run of sometimes 30, 40 or, at the most, 100 prints. These are wood block prints, stone prints and various other kinds of prints. These prints are generally sold through galleries. They provide an important subsidy to many visual artists. The sale of prints is also very important to a fair number of galleries. The selling of prints is generally the bread and butter for a lot of small private commercial galleries. This tax imposes an extra burden. It also adds an extra burden on the publishing and printing industry, that small section of our publishing industry which prints original fine art graphics. This tax is a needless hindrance. As well, it has some interesting implications with regard to the general acceptance of the free flow of art through international boundaries. Through this bill we will create a blockage, if you can call it such, of works of art coming in from other countries.
Most of the Inuit and native people's art consists of variations of prints. Again, an extra tax is being imposed on this art form. It is a stupid piece of legislation because it will cost more to collect the tax than the amounts of money which will accrue to the government. It is a blind interference in the art community. Furthermore, this tax will be difficult to apply. It will be a bureaucratic nightmare.
Through this bill, the government is discriminating against a particular form of art. Prints are one form of art. There are other forms of art, for instance, oils, acrylics and so on. What this tax does is to make one particular type of art form more expensive because of the extra sales tax being imposed on print making.
The artistic community has long felt that the government does not have a coherent artistic and cultural policy for Canada. The artistic community has long complained that the actions of one ministry work against the interests and the programs of another ministry. Tonight we have a typical example of how the actions and the thinking of a group of bureaucrats in the tax department are totally at odds with the stated intention of the government in the area of cultural policy.
Right now we have the Applebaum committee which is travelling across the nation trying to put together a coherent government policy on culture. Members of this committee are
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listening to representations and receiving briefs from right across Canada. Yet the government does not wait for those recommendations and findings to come in. The government is acting on its own in this area. It is an area which will certainly not win the government any points in the artistic community. Instead, the government will make it more difficult for artists to survive in Canada and it will force some artists to leave Canada and attempt to sell their prints in the United States. This bill will not help the young collector, for example, the young professional person who wishes to start a small modest art collection. These are the people who generally start their collections by buying a few prints. Now the cost of prints will be even higher.
In the well thought out document entitled "A Strategy for Culture" put together by The Canadian Conference of the Arts, the authors urged that there should be tax incentives for private investors. Yet the opposite is to be found in Bill C-57 which is before us tonight. The authors of this document urge that taxation policies should be used in a systematic way as a vehicle to encourage cultural development. But we have the exact opposite in this bill tonight. The writers also urge that the visual artists and craftsmen should, in all cases, be exempt from paying sales tax on materials and production equipment and from charging sales tax on their finished work. What we have tonight is the very opposite. We have a government which has set up commissions and which states certain goals, but in its action does exactly the opposite. This is not only true in the cultural field. We have seen examples of this in many other fields. There is always the promise, always the good talk. In fact, someone called it the sweet talk from the Liberals. However the reality is to be found in what the Minister of Finance (Mr. MacEachen) says and does.
The government has indicated that it wants to develop a coherent cultural policy. However, the history of this government in the area of culture is a dismal one. Most of the major artistic institutions in this country are on the verge of bankruptcy, yet there is no immediate action from this government. All we get is another royal commission. We have artists leaving the country because they cannot make a living in Canada selling their works of art. Instead of offering assistance, the government makes it even more difficult for artists to survive in this country.
In one of their major recommendations, the Canadian Conference of the Arts recommended that the Department of Communications have some muscle, that it have some influence in what other departments do and what their policies are in terms of the arts. Bill C-57 in front of us clearly indicates that the minister in charge of cultural affairs in Canada has very little power in cabinet, even when it comes to such a minor matter, and it surely is minor to the government, as sales tax on prints.
I again return to the question of why the government is doing this. Is there any rationale? Surely fundamental wisdom would suggest that it is more of a hassle imposing this tax than

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it will be a benefit. The amount of money collected under this tax will be negligible. The cost of enforcing it will surely be more than what will be collected under the tax. What gives? Where is the rationale? There is no rationale.
I suggest this is just a blind bureaucracy grinding along, having its own impetus, its own power to drive it forward. Rational arguments cannot stop it. It is honest to suggest that what we find in this bill is not rationality but irrationality. It will not benefit anybody. It will hinder the growth and development of Canadian artists in this country.
In conclusion, this provision in Bill C-57 is not one that will earn the government many high points in the artistic community of this country. They will view this as another example of a blind bureaucracy grinding away with a total lack of commitment and will to make certain that we have a coherent cultural policy. Even on such a small matter they cannot be swayed from their determined path. It is an indication to the artistic community that we have a government which, despite all its brave words about Canadian culture, is not willing to take some positive steps in that direction but in fact is so ignorant that it imposes further hardships on artists in Canada today.
For that reason, and for the many other reasons my colleagues have mentioned during this debate, we will not be able to support the bill in front of us this evening.


Donald W. Munro: Mr. Speaker, I thought I would have a good lead-in if I followed the hon. member for Halifax West (Mr. Crosby). I now find I have an equally good lead-in following the hon. member for Regina East (Mr. de Jong). He talked about confusion. I have never seen a more confused bill in my life. It is from beginning to end a mass of confused notions bringing together such disparate elements as indexation of a variety of products such as beer, tobacco and wine on the one hand, and on the other petroleum, aviation, aviation fuel, flying training, prints and books. To cap it all, there is a shift from the imperial to the metric system in measuring some of the matters on which there will be levies.
We probably have to put it down to the fact that this bill is no more than a desperate search for funds required to live up to commitments which had better not been made at all. It is a frantic look for funds. In order to deal with the unusual purchase of Petrofina, which produced not one additional drop of petroleum in this country at a cost of $1.5 billion, there is to be a levy on all home owners for heating and all car owners for driving.
Instead of investing in Canada, this government seems determined to invest in Belgium, Saudi Arabia, Venezuela, and Mexico when the billions that are going overseas might be better spent here. In order to make up for that loss, there has been a scrambling around with this bill. I have forgotten how many pages there are. I am working at pages 75 and 76 because I think that is the convenient place to work.


An hon. Member:: There are 116.


Donald W. Munro: The bill has 116 pages. It is a desperate effort to find more funds. I mention that one of the peculiarities of this bill is that in one set of clauses they deal with the levy on absolute alcohol content. There is to be a levy there of 54 cents per gallon on absolute alcohol content. I am not quite sure I know what absolute alcohol content is, but I stress the point that the tax is to be levied at so many cents per gallon. That is on page 75. In the next section we see that there is a levy of 27 cents per gallon on absolute alcohol, and in the third one, five cents per gallon on beer or malt. In the next part dealing with tobacco, cigars and cigarettes, it is so much per pound or per thousand. Going to the bottom of page 76, we find they talk about absolute ethyl alcohol. The ethyl is obviously metric. Here we have so many dollars per hectolitre.
I defy anybody on the opposite side of the House to make a comparison and tell me how much $11.88 per hectolitre is in dollars per gallon. Is there anyone opposite who can do so? I bet the Metric Commission cannot do it. How about it? How many dollars per gallon is $11.88 per hectolitre? Work it out. While they are working it out, I will go to the next one.
They are still trying to figure that out over there. You can talk about confusion, but why should one type of absolute alcohol have a levy placed on it per gallon, and poor old ethyl be subject to a metric level?


An hon. Member:: What about Mabel?


Donald W. Munro: They have not got to "mabel" syrup at all. In any event, this is just one of the idiocies or confusions brought about by this particular bill.
Have you got it worked out yet? Apparently he has not.
On the serious side, and that is serious enough, we have to wonder whether the government should really be using tax incentives or disincentives to change the drinking patterns of the people of this country. You know what this government has done? We have a breakdown of the statistics on the changes in drinking habits of the people of this country from 1974 to 1980. There has been a drop in the consumption of beer as a result of levies placed on it, I think per gallon, but I am not sure, of 3.6 per cent over a matter of nine months, and a drop in wine consumption, but an increase of 4.6 per cent in the consumption of distilled spirits. This may very well be because of the distinction between gallons and litres, a litre being smaller with more of it being bought, but in any event there was an increase in the consumption of distilled liquor. I think that is a very dangerous trend. I am sure all our police forces in this country would deplore this emphasis on hard liquor, as certainly the beer industry does.
I wonder, however, whether it is the distilling industry which has this particular government by the left hand, that is urging it to increase the levy on beer while decreasing the levy percentagewise on distilled spirits in order that it can contribute more to that Liberal party.
I should like to draw the attention of the Minister of Agriculture (Mr. Whelan), since he cannot calculate the dif-
June 2, 1981

ference between gallons and hectolitres, to the economic effect of this shift in consumption from high to low alcoholic content beverages on the agricultural industry. The economic impact on the brewing industry and on the agricultural producers, who depend on the brewing industry, will be severe. That is pointed out in a letter I have from the Brewers Association of Canada. Some 63 per cent of the value of agricultural products destined for use in producing all domestically consumed alcoholic beverages is purchased by the brewing industry, and it is being taxed more heavily. If beer sales continue to decline, the brewing industry agricultural purchases, which amounted to almost $100 million in 1979, will decline accordingly. According to the figures which are produced here, that decline will turn out to be something of the order of 8 per cent or 9 per cent.
1 should like to go on and quote further from this particular letter. I admit that it is biased in favour of the brewing industry and against the distilling industry, but the indexation notion is criticized severely.
I see the Speaker is becoming a little anxious. I reserve my right to come back to this when the matter comes forward again under other amendments.


Mr. Deputy Speaker:: Order, please.


YOUNG OFFENDERS ACT
[Stage Direction]
The House resumed from Friday, May 29, consideration of the motion of Mr. Kaplan that Bill C-61, respecting young offenders and to repeal the Juvenile Delinquents Act, be read the second time and referred to the Standing Committee on Justice and Legal Affairs, and the amendment thereto of Mr. Lawrence (p. 9497).
Mr. Deputy Speaker:: Order, please. It being 9.45 p.m., pursuant to an agreement made earlier this day, the House will now proceed to the taking of the deferred division on the motion standing in the name of the hon. member for Durham-Northumberland (Mr. Lawrence), an amendment to Bill C-61, an act respecting young offenders and to repeal the Juvenile Delinquents Act.


[Stage Direction]
Call in the members.
Mr. Kaplan moved: that the bill be read the second time and referred to the Standing Committee on Justice and Legal Affairs.


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


Some hon. Members:: Agreed.


Stanley Howard Knowles: On division.
Motion agreed, bill read the second time and referred to the Standing Committee on Justice and Legal Affairs.


Madam Speaker:: It being 10.15 p.m. this House stands adjourned until two o'clock tomorrow afternoon pursuant to Standing Order 2(1).
At 10.18 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, June 3, 1981