1982-03-30

Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, today is an historic day in the judicial history of Canada marked by the swearing in of Madam Justice Bertha Wilson as a judge of the Supreme Court of Canada. The appointment of this respected and accomplished jurist has been applauded by Canadians from coast to coast.
The appointment of the first woman to the Supreme Court of Canada was a result, in part, of strong representations by the official opposition and by widespread public input. In view of the imminent patriation of the Canadian Constitution, including the Charter of Rights and Freedoms, which will substantially increase the role and power of the Supreme Court of Canada in the determination of the rights and liberties of Canadian citizens, it is incumbent upon legislators to reassess the process of appointment to the Supreme Court of Canada, now the sole prerogative of the Prime Minister. I therefore move, seconded by the hon. member for Cambridge (Mr. Speyer):
That this House direct an immediate reference to the Standing Committee on Justice and Legal Affairs on the process of judicial appointments to the Supreme Court of Canada, including the involvement of the House of Commons in the review and confirmation of nominees to the Supreme Court of Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. Don Blenkarn (Mississauga South):: Madam Speaker, UTAP funding provided to the province of Ontario has been totally exhausted by the province using the moneys for grade separations in urban areas. Grade separations are worth-while
construction work using totally Canadian labour and Canadian materials, and completed grade separations improve both the productivity of road transport and the railways. I therefore move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That the Minister of Transport immediately embark on a program to make substantial funds available to municipalities and provinces to share-cost new grade separations.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EMPLOYMENT
Mr. Albert Cooper (Peace River):: Madam Speaker, it is of vital importance that great numbers of women be trained in non-traditional jobs, so that women in clerical and stenographic positions will not find themselves out of work in this age of high technology. Therefore I move, seconded by the hon. member for Kingston and the Islands (Miss MacDonald):
That the Minister of Employment and Immigration consider, as a priority, training women in non-traditional jobs, particularly as the number of women currently participating in such government sponsored retraining programs has decreased from 22 per cent to 11 per cent in the past six months.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENSIONS
Mr. Neil Young (Beaches):: Madam Speaker, I rise under the provisions of Standing Order 43. In view of the recent proposal by the Minister of National Health and Welfare to provide homemakers with retirement incomes by splitting the spouse's Canada Pension Plan cheque down the middle, and

March 30, 1982
giving half to the husband and half to the wife, I move, seconded by the hon. member for Oshawa (Mr. Broadbent):
That this House direct the government to stop treating the problems of older women with sleight of hand approaches to pension reform, and that it be further directed to use the additional revenue it will receive from the recent budget and the energy agreements to provide decent and adequate pensions to all retired Canadians immediately.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CALL FOR REMOVAL OF EXCISE TAX ON NATURAL GAS AND HOME HEATING OIL-MOTION UNDER S.O. 43
Mr. Gordon Towers (Red Deer):: Madam Speaker, I rise to take exception to a reply given by the Prime Minister during question period yesterday. He said the way to bring down interest rates and thereby stimulate our economy is to "bring down inflation, to bring down costs", etc. Yet he says one thing and does another. His government has been the most profligate spender in our history and is doing literally nothing to check spending and cut outlays. He demonstrates daily that the situation is clearly beyond him, and he has no quotations from Chairman Mao to bail him out.
I move, seconded by the hon. member for Pembina (Mr. Elzinga):
That, if he is to be credible, the Prime Minister should practice what he preaches. Bring down costs-as he says-and a good starting point would be the removal of the nearly 30 per cent excise tax on natural gas and oil for home heating purposes, thereby cutting home owners' heating costs by almost one third.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, in view of the fact that members of the steelworkers' locals of northern Canada, Quebec and Labrador, have travelled to Ottawa today to plead with the government for an extension of the temporary remission order affecting isolated posts living allowances, and whereas the Minister of Finance and the Minister of National Revenue have rejected a meeting with this visiting delegation, but have passed the steelworkers
off to the Minister of Indian Affairs and Northern Development, who has no authority over taxation policy, I move, seconded by the hon. member for Yukon (Mr. Nielsen):
That the Minister of Finance and the Minister of National Revenue be severely censured by this House for refusing to meet with steelworkers' locals from across Canada, and for placing the entire mining industry of northern Canada in jeopardy by their failure to negotiate with all affected groups a fair and acceptable taxing policy for the north.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENITENTIARIES
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, on Friday of last week the Solicitor General reneged on his commitment to close Kingston prison for women, the only federal prison for women in Canada. For over 50 years governments have been wavering on what to do with the Kingston prison, an institution that, as the director of the Elizabeth Fry Society has stated, "is not fit for bears". Therefore I move, seconded by the hon. member for Churchill (Mr. Murphy):
That this House direct the minister either to close the Kingston prison for women or immediately improve and upgrade the institution to create and ensure a humane environment for the women inmates.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AUTOMOTIVE INDUSTRY
Mr. Joe Reid (St. Catharines):: Madam Speaker, an all too often forgotten victim of the November 12 budget is the automobile dealer who is trying to sell cars at exorbitant interest rates and trying to operate a leasing business. Over 2,500 dealers, leasing upwards of 800,000 automobiles, will lose a full 15 per cent of their depreciation allowance on the cost of new cars due to the budget's halving of the capital cost allowance. Therefore I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That, as this tax measure is expected to result in a surge of auto dealer bankruptcies and closures, the Minister of Finance should heed the warning signs and withdraw the proposal before it is too late to rescue 2,500 dealers.
March 30, 1982


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


BANK OF CANADA
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, I move, seconded by the hon. member for Beaches (Mr. Young):
That this House directs the Bank of Canada to take immediate steps to bring down interest rates and thereby to improve consumer purchasing, job opportunities and to reduce inflation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SPACE SHUTTLE COLUMBIA
Mr. Jack Burghardt (London West):: Madam Speaker, I rise under the provisions of Standing Order 43. Upon the successful completion of the third space shuttle launch today, I move, seconded by the hon. member for St. Catharines (Mr. Reid):
That this House commend those Canadians, particularly from the National Research Council and Spar Aerospace Limited, for planning and building the Canadarm which superbly executed all tests required of it during the seven-day mission. It is an achievement of international significance for which Canadians can be very proud.


Madam Speaker:: If the House wants to applaud it may do so, but I am afraid I cannot put the motion to the House.


Some hon. Members:: Hear, hear!


DISASTERS
Mr. Howard Crosby (Halifax West):: Madam Speaker, on March 5, 1982, the Zapata Scotian, an ocean-going drilling rig, broke away from its berth in the port of Halifax and floated free in the harbour, constituting a danger to harbour users and facilities. The Zapata Scotian was taken under tow,
Oral Questions
and damage was averted. The Government of Canada has made a claim exceeding $5 million for the few hours of assistance provided, and arrested the Zapata Scotian to secure this atrocious claim. I move, seconded by the hon. member for Western Arctic (Mr. Nickerson):
That the Minister of National Defence and the Minister of Justice direct their officers and agents to withdraw this ridiculous claim and obstruction and allow the Zapata Scotian to pursue the vital work of exploring our Atlantic coast resources.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Stan J. Hovdebo (Prince Albert):: Madam Speaker, I rise under the provisions of Standing Order 43. Since farm bankruptcies across Canada have increased a disastrous 54 per cent in the first two months of 1982, and since thousands of others are predicting the same or a similar fate before summer, I move, seconded by the hon. member for Humboldt-Lake Centre (Mr. Althouse):
That, if this government cannot increase the money available to farmers through the Farm Credit Corporation and the small business bond, it reinstate the Farmers' Creditors Arrangement Act which was originally passed in 1934 to avert a similar disaster to the industry in 1982.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. John Thomson (Calgary South):: Madam Speaker, I wish to put a question to the Minister of State for International Trade with respect to the deal between General Motors and Iraq for the sale of cars. Has General Motors received formal notification from Iraq that it is not its intention to accept delivery and pay for the cars which are sitting on the Halifax docks?

March 30, 1982
Oral Questions


Hon. Ed Lumley (Minister of State (International Trade)):: Madam Speaker, I cannot honestly say whether General Motors has received formal notice. I have been told by the Iraqi ambassador, who has just returned from Baghdad, that the deal will not be consummated.


REASONS FOR NOT COMPLETING DEAL
John William Thomson: Madam Speaker, can the minister tell us why the deal will not be consummated with the Iraqis? What are the grounds for cancelling or withdrawing from the contract?


Edward C. Lumley: Madam Speaker, first, I do not think the Iraqi authorities acknowledge that there is a contract for the second fleet of cars. I am informed that this particular contract was still being negotiated. The reason given to me by the Iraqi authorities for not exercising the option on the second lot of 12,500 cars was the fact that they felt the mechanical problems with the first
13,000	cars were such that they did not want to take the second order.


DATE WHEN GOVERNMENT INFORMED
John William Thomson: Madam Speaker, I am informed by General Motors that they do have a contract which they consider binding. I would have thought the minister might know whether or not a contract exists. But let me put this question to him. When did the Canadian government first become aware that Iraq was not satisfied with the cars? Further, what steps did the government take to ensure that the Canadian taxpayer would not end up footing a bill for $80 million?


Edward C. Lumley: Madam Speaker, if my memory serves me correctly, I was informed some time during last summer. I then arranged to go to Baghdad during the month of September. I think it was around the end of September or the beginning of October.


Howard Edward Crosby: Write that one down.


Edward C. Lumley: We obviously had ongoing discussions with the Iraqi ambassador and the embassy even as late as six weeks ago prior to his departure for Baghdad. I also sent a note to my counterpart, the Minister of Trade for Iraq, to see if he could resolve this particular situation.
Obviously the Government of Canada does not produce cars, and I am not a mechanic myself. We had hoped that we would be successful because the Malibu, as the hon. member knows, is a very good car. It just so happened that this particular model has not worked to the customer's satisfaction.


INDUSTRY
Hon. Roch La Salle (Joliette):: Madam Speaker, my question will also be directed to the Minister of State for International Trade. Some time ago, I asked him a question about the survival of the footwear industry. The minister is well aware of the very difficult situation now facing this industry, and that the answer is to apply the over-all quota system to leather footwear as well. Has the minister since had an opportunity to discuss the matter with his colleague, the Minister of Industry, Trade and Commerce, and if so, did the Minister of Industry, Trade and Commerce recommend that leather footwear should again be included in the over-all quota system?


Edward C. Lumley: Madam Speaker, my colleague, the Minister of Industry, Trade and Commerce and I have had meetings with representatives of the shoe manufacturing industry, with respresen-tatives of the shoe retailing industry, and with importers. There is some conflicting information as to whether the retail sales figures are down similar to what the shoe manufacturers have indicated is the case with respect to domestic orders. We are, however, discussing the whole sector at the present time.


INQUIRY WHETHER MEASURES WILL BE TAKEN TO AVOID JOB LOSSES
Roch La Salle: Madam Speaker, I have a supplementary for the Minister of Industry, Trade and Commerce. The minister knows perfectly well that the industry is in extreme difficulty. Since the matter was raised some time ago and a number of members on both sides of the House have given their support on this issue, the minister should be able to inform us today when he is finally going to give an answer to this major industry and prevent the loss of thousands of jobs. Would the minister also be able to inform us today whether, in view of the information he now has, he is willing to support the request made by the footwear industry and work together with his colleague to find a solution that will prevent the loss of jobs not only in Quebec but throughout the country?


Hon. Herb Gray (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, as my colleague, the Minister of State for International Trade, just said, we have had some very useful meetings with manufacturers, importers and retailers, and our colleagues have had some very useful discussions with spokesmen for the footwear industry. Their recommendations are now being reviewed at the cabinet level, and as soon as cabinet
March 30, 1982

is ready to reach a decision, I shall certainly be able to make a statement on this important matter.


AUTOMOTIVE INDUSTRY
Mr. Edward Broadbent (Oshawa):: Madam Speaker, my question is for the Minister of State for International Trade concerning the automotive industry in general. Almost one job in seven in Canada is, directly or indirectly, connected with that industry. These involve workers in plastics, iron, and the fabrication of all kinds of finished products and all kinds of minerals. I ask the minister, since at this point 22 per cent of that market has been taken over by Japanese products, why does the government not have in place a requirement that Japanese firms either purchase parts or assemble vehicles here in Canada, which would put Canadians to work?


Edward C. Lumley: Madam Speaker, as the hon. member knows, we are very cognizant of and concerned about the situation in the automobile industry in Canada. That is one of the reasons we undertook the recent trade mission to Japan and asked the Japanese government for three possible areas of voluntary restraint: one, with respect to importation of automobiles during the current fiscal year; second, a ceiling with respect to commercial vehicles; third, a commitment to negotiate a content proposal for the future.
The negotiations are still ongoing and, as the hon. member knows, the Japanese government announced yesterday they have come to a decision with respect to the United States, and hopefully our recommendations will now be their first priority.


DEFICIT IN AUTOMOTIVE TRADE WITH JAPAN
John Edward Broadbent: Madam Speaker, the countries of France, Mexico, Australia and the United States, as well as a number of others, have firm agreements with the Japanese respecting either quotas or production within their countries of parts for Japanese vehicles. Considering that we have an automotive trade deficit with Japan of $1.5 billion, representing a net loss of 15,000 Canadian jobs, why is it that, unlike other countries which have protected their automotive industries, the Government of Canada has been so gutless in its dealings with Japan?


Edward C. Lumley: Madam Speaker, the hon. member forgets for a second that we are one of the few countries in the world which has a trade surplus with Japan. While most of the countries the hon. member mentioned have a substantial trade deficit with Japan, we have a $400 million trade surplus. France, for example, has
Oral Questions
severe restrictions on Japanese automobiles; however it only sells the Japanese $1 billion worth of goods. We happen to sell them over $4 billion worth.


REQUEST THAT JAPANESE PLANT BE ESTABLISHED IN CANADA
John Edward Broadbent: Madam Speaker, the Japanese, like people in any other country, cannot expect to have a favorable trade balance with every nation in the world.
I would tell the minister that they buy our resources not for our good but for their own.


Some hon. Members:: Hear, hear!


John Edward Broadbent: They are not doing us a favour in buying our raw materials; it is primarily for their benefit.
Is the minister prepared to get at least as tough as some of these other countries are in protecting their automotive industries, and will he within a matter of weeks get a specific commitment from the Japanese either to produce parts or vehicles here, which would be fair for the Canadian consumer as well as the auto worker, or, if not, will he have the courage to tell the Japanese he is going to put an emergency 15 per cent surcharge on all their automotive products coming into Canada?


Ramon John Hnatyshyn: Where did you buy your shirt Ed?


Edward C. Lumley: Madam Speaker, I share with the hon. member the belief that the automotive trade deficit with Japan needs to be rectified. However, I am a bit surprised that the hon. member's party, with a number of seats in western Canada, would make so little of the fact that we sell a substantial amount of goods from western Canada to Japan.


Some hon. Members:: Oh, oh!


Edward C. Lumley: I would have thought, Madam Speaker, that the jobs created by the export of coal, lumber, canola and wheat, etc.-


Ian Deans: The export of jobs.


Edward C. Lumley: -would be just as important to western Canadians as the export of automobiles is to central Canadians.


FINANCE
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question is for the Minister of Finance. Revenue Canada is asking Canadians to pay their 1981 taxes based on the November, 1981, budget, as if that budget were law today. The department has issued a bulletin to that effect. The minister knows full well that his phantom budget is a subject of great uncertainty today because no legislation has been presented on

March 30, 1982
Oral Questions
the budget, and there has not even been a Ways and Means motion in connection with the many changes that he has announced with regard to the budget itself. Why is the minister asking Canadians to pay their taxes based on the budget when the legislation has not even been made public?


Mr. Jarvis:: Disgrace!


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, the Ways and Means motions have been made public, and it is on that basis that taxes have been collected in this country for ever and a day.


Mr. Andre:: They have not been voted on.


DISCUSSION OF TAX CHANGES
Michael Holcombe Wilson: Madam Speaker, there has never been a budget in this country which has been the subject of so much uncertainty as this particular one. We have not seen the Ways and Means motion for the December 18 changes. I remind the minister of that fact. This particular request is in contempt of Parliament. The minister has limited the rights of Parliament to consider, debate and vote on the particular motions. The minister made a further withdrawal yesterday by stating that he would introduce draft legislation on the sales tax changes and allow many companies to present their views on those particular changes. Why is he allowing companies to make representations on the sales tax proposals when he has precluded and pre-empted Canadians and Parliament from discussion of the regular tax changes which were introduced in the budget?


Allan Joseph MacEachen: Madam Speaker, there has been no effort to preclude discussion on the budgetary changes which were made on November 12. I believe that no budget has been subjected to such a large amount of discussion throughout the country. I know of no other budget in the history of Canada which has been brought before the House three times by the opposition in non-confidence motions and which has been approved three times. Therefore it has been extensively discussed. We will produce-


Michael Holcombe Wilson: We have not seen the legislation.


Allan Joseph MacEachen: -draft legislation which will be discussed and considered by all hands. Then we will have the legislation before the House of Commons, and hon. members will have ample opportunity, as they have had in the past, to deal with this legislation. There is absolutely no difference in the treatment of this budget, in that characteristic, than that of any former budget in the history of the country. If the hon. member had consulted with the hon. member for St. John's West, he would have received that information without showing his lack of knowledge on the floor of the House.


Mr. Clark:: That is a falsehood.


AUTOMOTIVE INDUSTRY
Hon. Ron Huntington (Capilano):: Madam Speaker, my question is directed to the Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion. The Canadian car rental industry has made the claim that the capital cost allowance item in the November 12 budget has caused the postponement of some 40,000 new cars. The 250 per cent tax increase in the taxable benefits item in the new budget has caused the further cancellation and postponement of many thousands of new cars and a loss of thousands of man-years of work. I am wondering if this minister can acquaint us with the negotiations, and with representations he has made to his colleague, the Minister of Finance, concerning the removal of these two job-destroying items in the November 12 budget?


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: Madam Speaker, some months ago I did meet with a delegation representing the Canadian car rental industry. I certainly took steps to see that its concerns were brought to the attention of the Minister of Finance. It is my impression that the Minister of Finance has made announcements in response to the concerns of the car rental people, particularly with respect to an analysis of some of their major concerns about the capital cost allowance. They indicated that their concerns were certainly not as severe as they first feared.


REQUEST THAT MINISTER RESIGN
Arthur Ronald Huntington: Madam Speaker, although this minister is on record as saying that he would resign from a government that allowed interest rates to increase, he is also on record as committing very large sums of money to protect jobs in troubled industries. But his best efforts to protect jobs have been wiped out by these two items in the budget. The Minister of Industry, Trade and Commerce and Regional Economic Expansion should normally be outraged at this contradictory economic policy. I am going to ask him in all seriousness if he will resign now in protest over this contradiction in government economic policy.


Herbert Eser (Herb) Gray: I think I am going to stay here to make sure that the contradictions in the Conservative Party policy, which was rejected by the people in the last election, do not have a chance of occurring again.
March 30, 1982


PUBLIC SERVICE
Howard Edward Crosby: I have a question, Madam Speaker, for the Minister of Employment and Immigration on the rules governing his department's employees. The minister must be aware of the unfortunate case of his departmental employee, Paul McNeill, who, like Neil Fraser, dared to express his opinion but who has a family to support and cannot risk loss of employment. He has spent $12,000 to remove urea formaldehyde foam insulation from his home in Halifax and believes the government has a responsibility, and I agree with him.
Would the minister explain why action was taken by his officials against Mr. McNeill for expressing the widely held view on government responsibility for UFFI? Would he tell the House whether he thinks the sweeping provisions of his department's Code of Conduct are justified in a free and democratic society?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: As the hon. member knows, the code of conduct is a set of guidelines for the activity of public servants in a department. Those guidelines were simply drawn to the attention of the gentleman in question, reminding him that that is the code of conduct of which he was aware before he accepted his present position and employment. They were simply drawn to his attention, and he could then draw his own conclusions as to whether he wanted to proceed with his activities in the private organization he was sponsoring, or whether he would continue in terms of his own activities in that department. No coercion was applied to him.


Howard Edward Crosby: The minister can say that there was no coercion applied, but the fact is that the employee had to withdraw from activities that other Canadians are entitled to carry on.


APPLICATION OF CHARTER OF RIGHTS
Howard Edward Crosby: I want to ask the Prime Minister, bearing in mind that there are over 500,000 federal public employees and over 300,000 provincial public employees, which means that almost one in ten of our work force is a public employee, will he stand now in this House and say with respect to the new Canadian Charter of Rights and Freedoms, that public servants have the same rights as every other Canadian to express their views provided they do not go beyond the rules that apply in a free and democratic society. Does this Charter of Rights have any meaning, or does it not?


Right Hon. P. E. Trudeau (Prime Minister):: It has a lot of
meaning, Madam Speaker, and I am glad that the opposition is beginning to realize its importance.


An hon. Member:: Say that to Neil Fraser.


Pierre Elliott Trudeau: The hon. member is not asking me to interpret any clause of that Charter, I take it. It will be interpreted by the courts. As I said earlier about any civil servant or any
Oral Questions
citizen who thinks that his freedom of speech is in some way curtailed, he has a right to appeal under the Charter.


IMMIGRATION
Mr. Cyril Keeper (Winnipeg-St. James):: My question, Madam Speaker, is for the Minister of Employment and Immigration. The minister stated in a recent interview that
20.000	to 25,000 skilled workers would be hired abroad because there is a shortage of skilled tradespeople and technicians in the Canadian labour market. Given the further fact of
1.119.000	unemployed, many of whom are skilled workers, Canadians are skeptical of the minister's claim. Will the minister therefore identify the 25,000 skilled jobs, so that Canadians can apply for them?


Lloyd Axworthy: It may be, Madam Speaker, that at this particular time this Member of Parliament does not allow himself to keep abreast of the past happenings in the House of Commons. If he did he would be aware that we tabled in this House last November a report on immigration levels, which were arrived at after close consultation with the private sector, with the provinces, and with all the groups interested in immigration. At that time the immigration level was set so that we would bring in 23,000 to 25,000 skilled workers. It should come as no surprise to the hon. member that that is so, because it was a report tabled in Parliament at that time. It was based on the labour demand, after consultation with all the key groups involved in making those decisions.


REQUEST THAT INDUSTRY TRAIN CANADIAN WORKERS
Cyril Keeper: Obviously there is a policy of importing workers for skilled jobs, and the training policies which the minister has employed, based upon the incentives to industry, have failed. That is why he continues to have to import 25,000 workers a year. I ask him whether or not he would be prepared to approach the specific companies involved that are going to hire the 25,000 workers, and tell them that they must train Canadian workers for those jobs.


Lloyd Axworthy: I would like to remind the hon. member, Madam Speaker, that basically we have been importing skilled workers into this country for over one hundred years. That is the basis upon which this country has been built, using the skills of a wide variety of people.
The kind of approach that the hon. member and his party seem to be recommending, that we would not draw upon the continuing strength of people coming to these shores, is a very serious statement. I would hope that the New Democratic Party would not associate itself with that kind of reactionary

March 30, 1982
Oral Questions
position. The fact of the matter is that we do have a system in this country that anybody making application to come to work as a skilled worker, is first tested as to whether there is a Canadian who is available for the job. If the hon. member knew more about the way the immigration department works and the employment department works, he would not ask such stupid questions.


VETERANS AFFAIRS
Mr. Dan McKenzie (Winnipeg-Assiniboine):: My question is for the Minister of Veterans Affairs. As Mr. McCracken has completed his study into the lengthy delays in processing veterans' pensions, I would like to ask the minister if he or his department have implemented any of the recommendations of the McCracken report to speed up the processing period.


Hon. W. Bennett Campbell (Minister of Veterans Affairs):: Yes, Madam Speaker. Since receiving the report a couple of weeks ago we have been actively reviewing all of the recommendations. Quite a number of them have been implemented so far and others will be implemented in the foreseeable future.


CASE OF NEW BRUNSWICK APPLICANT
A. Daniel McKenzie: Would the minister double check and report back to the House on whether all the recommendations or some of them have been implemented, because I have just received a letter from a veteran in Saint John, New Brunswick, that he has been informed by a Veterans Affairs' official that he will have to wait from two to four years to have his disability pension processed.


W. Bennett Campbell: I would like to know the source of that advice, Madam Speaker, because that is not correct. We have been speeding up the process and we will continue to do so until it reaches a satisfactory level. I might also indicate that in the past number of months not only has the process been speeded up but we have also reduced the backlog substantially. In fact at the moment that backlog has been reduced by approximately 1,000.


PUBLIC SERVICE
Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, I have a question for the hon. member for Ottawa-Vanier as the chairman of the Miscellaneous Estimates Committee, with respect to the ongoing business of the committee. As the chairman knows, the President of the Treasury Board and the
Chairman of the Public Service Commission have both indicated before the committee that they endorsed the proposal to give the parliamentary committee the job of trying to clarify the political rights of public servants. With respect to the ongoing business of the committee, would the chairman indicate to the House what his views are with respect to that, whether or not he has had any consultation with the President of the Treasury Board on how that would be accomplished, and generally his reflections on the propriety of that, so that this important matter can be publicly aired.
[ Translation]


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Madam
Speaker, I do not think it would be in order for me to discuss the matter, but if the House were to decide, in its wisdom, to refer the matter to us, I am sure the committee would start considering the matter at once and report as necessary.


TERMS OF REFERENCE
Walter David Baker: Again with regard to the further business of the committee, Madam Speaker, the chairman knows that the President of the Treasury Board is appearing before the committee next Monday with respect to his estimates. Would he please speak to the President of the Treasury Board and ask him to appear with draft terms of reference for a committee, and other suggestions he has with respect to the hearing of this matter, particularly in view of the fact that it is common knowledge in the country that it is improper to limit public servants' discussions to matters of philosophy, as has been suggested by the Prime Minister.


Pierre Elliott Trudeau: No, no.
[ Translation]


Jean-Robert Gauthier: Madam
Speaker, the chairman of the committee, who is about three feet away from me, has understood the question. If he is willing to prepare referral orders for discussion with the House Leader, the other committee would be willing to consider the matter, as I said before.


ADMINISTRATION OF JUSTICE
Mr. David Kilgour (Edmonton-Strathcona):: Madam
Speaker, my question is directed to the Right Hon. Prime Minister. The Prime Minister has probably read in the Edmonton Journal the article by Paul Jackson on RCMP espionage activities, which subsequently appeared in yesterday's and today's Journal de Montreal. Could the Prime
March 30, 1982

Minister inform the House whether he intends to provide the 33 documents requested and necessary in order to adequately defend the RCMP officers on trial, who seem to have been manipulated for partisan ends?


Pierre Elliott Trudeau: Madam Speaker, I have not read the articles referred to by the hon. member which appeared in several Canadian newspapers, but I am glad he brought this to my attention. I shall check the allegations made in the articles and see whether they should be looked into.


ALLEGATIONS CONCERNING PRODUCTION OF DOCUMENTS
Mr. Peter Elzinga (Pembina):: Madam Speaker, my question is also for the Prime Minister. At one time the Prime Minister was a great advocate of a just society and of freedom of information. It is obvious he no longer believes in that. I am sure he is aware that the release of this documentation is essential for a fair trial for the RCMP officers who have been charged. It is alleged that these documents will shift the blame from the RCMP to Liberal politicians and bureaucrats. Will the Prime Minister respond to those allegations, plus the allegation that his government colleagues are investigating the possibility of destroying these documents? I would appreciate a response from the Prime Minister so that we can be assured that the RCMP will not be hung out to dry.


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, these documents have been the subject of questions in the House before. I indicated that those which are being withheld are being withheld on the grounds of national security and cabinet confidentiality. They were not withheld from the McDonald commission. The McDonald commission had unprecedented access to all of the documents affecting Canada's national security and cabinet material relating to the subject of their inquiry. They were quite satisfied, as their report indicated, that the allegations which the hon. member made against members of this government and former members of this government cannot be substantiated by that material.


PUBLIC SERVICE
Mr. Rod Murphy (Churchill):: Madam Speaker, I have a question for the President of the Treasury Board. Workers at Les Terrasses de la Chaudiere in 1978 sent a complaint to the Department of National Health and Welfare about the working conditions in that area, and their health. Three years later we still do not have a full and comprehensive health-related study for the workers in that complex. Will the minister guarantee that those workers who are pregnant or who are ill and are working in that complex can seek transfers to other
Oral Questions
places of employment in the federal government, without any loss of pay?


Hon. Donald J. Johnston (President of the Treasury Board):: Madam Speaker, there has been an interdepartmental Treasury Board and PSAC committee working on this. I understand great progress has been made. A considerable amount of money has been spent trying to take remedial action in Les Terrasses. I assume that these matters have been taken into consideration.


APPLICATION OF CANADA LABOUR CODE TO FEDERAL GOVERNMENT WORKERS
Rodney Edward Murphy: Madam Speaker, the minister refuses to answer my question. I asked him a specific question. While the study for which we have been waiting three years takes place and before the government acts on the recommendations, can those workers who are pregnant or ill be transferred to other federal government jobs? Will he guarantee them that option? I have a supplementary question.
For the last two years we have been waiting for changes to Part IV of the Canada Labour Code which deals with occupational safety for workers. One of the questions that has to be asked, and hopefully the minister will answer it, is whether federal government workers will be included under Part IV of the Canada Labour Code. Will the minister guarantee that he will not oppose attempts to include federal workers under Part IV of the Canada Labour Code?


Donald James Johnston: Madam Speaker, the hon. member for Churchill is looking for a lot of guarantees today. I have said in the past that the record of the federal government with respect to health and safety is almost without parallel in this country. We will continue to take whatever steps are appropriate to ensure that that continues.


INDIAN AFFAIRS
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, my question is to the Minister of National Health and Welfare who last week, in response to questions from the hon. member for Cariboo-Chilcotin, stated in the House that no Indian woman had lost her status since she had become a cabinet minister in 1976. Since that time the Minister of Indian Affairs has publicly refuted her claim by stating that 1,810 Indian women had lost their status between 1976 and 1980. I would have expected the Minister of National Health and Welfare to have come into the House and corrected her misleading statements, but she has not. I am asking her now, when is she going to correct those statements, and do so here in the House, so that they will not remain uncorrected on the records of Parliament.

March 30, 1982
Oral Questions


Madam Speaker:: Order. This question should be addressed to the minister responsible for Indian Affairs. I do not feel that the Minister of National Health and Welfare was acting in her administrative capacity when this incident occurred.


Some hon. Members:: Oh, oh!


POSITION OF MINISTER OF NATIONAL HEALTH AND WELFARE
Flora Isabel MacDonald: I will try it this way, Madam Speaker. Is the Minister of National Health and Welfare going to stand by the belligerent statements she made in the House that no Indian woman had lost her status since she became a minister, in spite of the fact that the Minister of Indian Affairs has publicly corrected her by stating that 1,810 Indian women lost their status between 1976 and 1980?


Madam Speaker:: I am afraid I cannot allow a question that is not related to a minister's ministerial responsibility. The question may be asked of the minister responsible for Indian Affairs.


CORPORATE AFFAIRS
Mr. Chris Speyer (Cambridge):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. It concerns Uranium Canada. Counsel for Uranium Canada describes the corporation as follows: it has no employees, no separate place of business, no assets other than $9 and, I quote, "whose acts are directly and completely controlled by the Minister of Energy, Mines and Resources." In other words, this is nothing more than a shell corporation which is insulating senior energy officials from potential criminal conduct. The Attorney General of Canada alleges there is reasonable and probable grounds to believe that a conspiracy to fix uranium prices has occurred. In those circumstances, will the minister instruct counsel to withdraw the technical defence of Crown immunity and permit a trial to go on as the other defendants are having, or does he believe that Crown corporations are above the law?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: To begin with, Madam Speaker, I would draw the hon. member's attention to the fact that the matter is before the courts. It is improper to bring before the House of Commons quotes from arguments used by counsel before the courts. It is a long-established rule that parliamentarians abstain from commenting on a particular case. As far as the question raised by the hon. member is concerned, I indicated yesterday that I never gave any instruction to Uranium Canada or counsel for Uranium Canada in this regard, and I do not intend to start doing it now.


REQUEST FOR PRODUCTION OF BERTRAND REPORT
Chris Speyer: Madam Speaker, this is just another example in a long history of cover-ups on this important matter. My supplementary question is to the Minister of Justice. The minister knows that in the province of Ontario it is the practice of the court that there be full disclosure made to all of the accused. What reason is there not to hand over the Bertrand report to the accused in this particular trial?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, I was reading a document and did not hear the question. I am sorry. If the hon. member wants to repeat his question, I will answer it.


Chris Speyer: Madam Speaker, my question is to the Minister of Justice. As the minister knows, there is a long tradition in Ontario courts of full disclosure so that an accused can know exactly the case he has to meet. In this particular case the defence has asked that the Bertrand report be turned over to it so that the accused can defend themselves. Why is counsel acting on behalf of the minister refusing to give the accused the Bertrand report, and why does he not make it public for the people of Canada?


Joseph Jacques Jean Chrétien: Madam Speaker, reports prepared by the office involved have always been handled in this way. In the present case I was not aware that there was a motion before the court. I will look into this and report to the hon. member. This is the first time the problem has been brought to my attention.


TRANSFER OF URANIUM CANADA SHARES TO MINISTER
Ramon John Hnatyshyn: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. Yesterday the minister stated in the House in connection with the prosecution for price fixing against Uranium Canada that the Crown corporation was acting independently and that the board of directors of Uranium Canada, and not the minister, was instructing counsel.
On May 1, 1981, all of the qualifying shares of the directors were transferred to the Minister of Energy, Mines and Resources and are now held by the minister. In other words, there is no board of directors. The Crown corporation is a shell. It operates only on the instructions of the minister and the cabinet under order in council. I want to ask the minister why he misled the House yesterday. What is he trying to cover up? What is he trying to hide? Can he not, for once, tell the truth in this House?


Some hon. Members:: Hear, hear!


Marc Lalonde: Madam Speaker, I refer the hon. member to the answer I gave in the House yesterday. If he reads that answer, he will find that he is not quoting me appropriately, adequately or fairly.
March 30, 1982

The hon. member referred to a transfer of shares. Indeed, there is always a minister who is the shareholder of any Crown corporation. My hon. friend knows the difference between directors, officers and shareholders of a corporation. The shareholder in this case is the Government of Canada. Ministers are shareholders, on behalf of the government, of various Crown corporations.


REQUEST THAT MINISTER ISSUE INSTRUCTIONS TO URANIUM CANADA
Ramon John Hnatyshyn: Madam Speaker, the point is that under the authorizing act Uranium Canada could do nothing during this whole episode without specific direction from a minister and the cabinet by order in council. The minister insists on trying to avoid ministerial responsibility in this matter. He knows Uranium Canada was an instrument of the government and the ministry.
Will the minister not accept his responsibility and tell us whether he will instruct Uranium Canada to remove itself from the position it is adopting of taking itself out of this prosecution and giving itself a different class of protection which the ordinary citizen in Canada does not have?


Marc Lalonde: Madam Speaker, I answered this question in the House yesterday, and I have answered it again today. I have not given any instructions to Uranium Canada or to counsel for Uranium Canada, and I do not intend to give any. Counsel for Uranium Canada is free to invoke any argument he, as counsel for that corporation, finds appropriate. I do not intend to interfere with the operation of the trial.


FINANCE
Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, my question is for the Minister of Finance. He has removed himself to the back seats.


Michael Holcombe Wilson: Where he should be.


Mr. Kempling:: Here he comes.


Frank Oberle: The question is a follow-up to a series of questions which had been posed to him on earlier occasions, and it has to do with the small business bond.
The minister undertook in this House several weeks ago to review the bond procedure in order to examine whether private investors and other banking institutions should not be allowed to purchase and issue these bonds with a government guarantee. 1 wonder if the minister could report today whether this review is complete and whether a new position has been arrived at by the government.
I am particularly concerned about the fact the Federal Business Development Bank, which is a banking institution of
Oral Questions
last resort and the institution to which most people in dire straits would go, cannot issue these bonds. It is particularly difficult for people in rural areas, farmers and small businessmen in outlying regions where our banking institutions are more reluctant than they are in the cities to make venture capital loans.


Allan Joseph MacEachen: Madam Speaker, the hon. member will be aware that the reason the small business bond is attractive to the banks and the reason financial institutions can make available lower rates of interest to borrowers through the bond is because of the tax situation of the banking institutions. It is not appropriate in all cases even for the banks to participate in the bond because of their lack of tax room. In a sense that is the limiting factor in the proposal made by the hon. member, which otherwise could be considered.


AVAILABILITY OF PROGRAM
Frank Oberle: Madam Speaker, that is precisely the question. Why can the bond not be made available or why can it not be based on other criteria? Certainly a private investor could be offered the same advantage the banks are getting and, contrary to the minister's contention, the banks do not like the bond. They do not find it attractive. Credit unions, caisses populates and the Federal Business Development Bank are not in a position to issue these bonds.
Since the bond is seen by the minister-according to his pronouncements-as a meaningful aid to businesses in dire straits, why can the concept not be broadened to include private investors and the institutions I have named, namely, credit unions, caisses populaires and, more important, the Federal Business Development Bank?


Allan Joseph MacEachen: Madam Speaker, as the hon. member himself has mentioned, because of the reasons I have given and because of the ability of banks to use their tax room, the bond has flowed a total of $2,597 billion into the private sector. That is a rather substantial sum of money. In the last month alone an additional more than $110 million has been made available through the bond.
What the hon. member is asking for is really a new instrument altogether, because this particular instrument, at least based upon what the hon. member has stated and my understanding of it, would not appear to be designed to handle those situations. Of course I would be glad to review again the suggestion the hon. member has included today in his question.


Madam Speaker:: The hon. member for Surrey-White Rock-North Delta.


Mr. Friesen:: Madam Speaker, my question is directed to the Prime Minister, who will know that the-

March 30, 1982
Oral Questions


Madam Speaker:: Order please. I must apologize. Did I see the Right Hon. Leader of the Opposition rising?


Charles Joseph Clark: Yes, Madam Speaker.


Madam Speaker:: I will recognize him.


FINANCE
Charles Joseph Clark: Madam Speaker, my question is directed to the Minister of Finance, and it relates to the circulation of tax forms which ask Canadians to pay tax in relation to proposals Parliament has not seen. The minister has indicated that he is proposing flexibility- that is his word for it-in dealing with the budget proposals. By publishing these tax forms is the minister saying that there will be no changes in the budget proposals respecting IAACs, capital cost allowance, RRSPs and capital gains reserves?


Allan Joseph MacEachen: Madam Speaker, first of all, it is the Minister of National Revenue who, in the normal course, distributes tax forms, not the Minister of Finance. That is the first error in the right hon. member's question. The second error is his suggestion that the tax forms are based on taxes Parliament has not seen. All the tax changes have been seen by Parliament. They are all included in the ways and means motions. That ought to be known to the Right Hon. Leader of the Opposition. Never in the history of the country has a minister of Finance ever precluded the possibility of changes until the bills themselves were before the House; otherwise, it would be total contempt for the parliamentary process.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


QUERY RESPECTING DRAFT LEGISLATION
Charles Joseph Clark: Madam Speaker, my supplementary question is directed to the Minister of Finance, who has demonstrated more contempt for the parliamentary process than any minister of Finance in history.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The minister keeps defending his budget by promising to change it. That is what makes this situation so unique, Madam Speaker. I should like the minister, either directly or through the Minister of National Revenue, to indicate whether the deliberate publication of those tax forms, as a matter of government policy, indicates that no change will be contemplated or allowed by the minister in the matters I have specified.
Let me ask the minister another question, Madam Speaker. Will he tell the House whether he is considering publishing draft budget legislation before he introduces the budget bills relating to any aspect of the budget?


Allan Joseph MacEachen: Madam Speaker, in reply to the first question, the practice that has been followed is the practice that has been followed following every budget that has ever been produced in the history of the House of Commons.


Mr. Nielsen:: With 18 changes?


Allan Joseph MacEachen: The answer to the second question is yes. The answer was given several days ago to the hon. member for Etobicoke Centre who asked the question.


Charles Joseph Clark: Good Lord!


PRIVILEGE
[Stage Direction]
MISS MacDONALD^ALLEGED MISLEADING STATEMENTS OF MISS BEGIN
Flora Isabel MacDonald: Madam Speaker, I rise on a question of privilege regarding certain misleading statements made in the House by the Minister of Health and Welfare (Miss Begin) on March 22, 1982, as reported at page 15667 of Hansard.


Madam Speaker:: Order, please. If the hon. member for Kingston and the Islands (Miss MacDonald) has a question of privilege to raise in the House, she should give me notice of that with a brief statement so that I can consider whether it is a question of privilege. That is the only way I can hear the hon. member's question of privilege, unless it arises from the proceedings of today.


Flora Isabel MacDonald: That is right.


Madam Speaker:: The hon. Minister of National Health and Welfare (Miss Begin) has not spoken in the House today. That is why I immediately interrupted the hon. member because it can hardly arise from that.


Flora Isabel MacDonald: Madam Speaker, I raise this question of privilege at the first opportunity that I have to raise it in the House following the questions which I put today to the Minister of National Health and Welfare. This is the first day that, first, I could be recognized by the Speaker and could put that question since the minister made her misleading statement; and second, since she has been in the chamber. It could not have been put to her beforehand. I therefore raise it on the basis that this question was raised in the House of Commons today and these misleading statements remain on the record of Parliament. I know of no other way to get them corrected than to ask the minister to rise in her place and do so, through this question of privilege.



March 30, 1982


Madam Speaker:: I think I can assist the hon. member by reminding her now that what she considers to be a misleading statement by a minister or by another member of the House does not necessarily constitute a question of privilege; it is often a matter of debate. If the hon. member has a question of privilege, even though she alleges she was not able to ask the question before today-although I think I recognized her some time last week-that does not mean I can waive the requirement for the hon. member to give me notice of her question of privilege and a brief statement of what constitutes that question of privilege.


Erik Nielsen: This becomes a little difficult, Madam Speaker. Since the recent changes, the rules have not precluded a question of privilege from being raised during question period. A practice has developed since the recent changes where questions of privilege and points of order have been deferred until after the question period is over. Had the incident been raised as a question of privilege when it happened, I am sure it would have been treated in a far different fashion. I see you are already nodding in the negative, Madam Speaker, even though I have not finished my submission. Perhaps by the time I have, I will have been able to convince you.
The question arises because of the intervention of the Chair in not permitting the minister to reply. The question that the hon. member for Kingston and the Islands (Miss MacDonald) was putting to the minister was based upon a statement made by the minister in this House. It is totally irrelevant, in my submission, that the statement made by the minister was made in an area which does not concern her jurisdiction.
I might cite as a precedent in that connection the incident that gave rise to the minister's statement in the first place. It was a question and a supplementary put by the hon. member for Cariboo-Chilcotin (Mr. Greenaway) in connection with statements made by the minister in a speech. At that time the Chair permitted both questions and both answers.
That is where the difficulty started. The minister is now on the official record of the proceedings of this House as having made statements which the hon. member for Kingston and the Islands wishes to question. Indeed, she cites the intervention of the Minister of Indian Affairs and Northern Development (Mr. Munro). We have two ministers of the Crown, both in this place, saying totally different things.
The question of the hon. member for Kingston and the Islands would surely be a proper one, directed as it was to the minister and asking whether she was going to allow her misleading statement to stand. Is that a statement that exposes the government's position or is the correct statement the one made by the Minister of Indian Affairs and Northern Development?
In terms of the question before the Chair, surely that has nothing to do with ministerial responsibility in the particular portfolio she or he holds; it has to do with the accuracy, indeed the validity, of statements made to members in this House. Not only has the questioner a right to put the question, but it would seem to me that the minister has an obligation to
Privilege-Miss MacDonald
answer. The question can only be put to someone on the government benches and it can only be answered by the minister who made the statement. The Minister of Indian Affairs and Northern Development cannot answer for the Minister of National Health and Welfare whether something that the Minister of National Health and Welfare has said is true or needs correction. Surely it is only the minister who made the statement who can make the necessary correction.
Indeed, in the past when the matter of a doubtful or misleading statement has been drawn to the attention of a minister, normally the minister has stood in the House and said, "What I said was correct and I stand by it," or "What I said was incorrect and it should be amended to such and such an extent." That was the opportunity that was being given to the Minister of National Health and Welfare, whose statement is in question, by the hon. member for Kingston and the Islands. I submit she should have been allowed to answer about the correctness or otherwise of the statement if for no other reason than to clear her own reputation.
If, based on the ruling of the Chair a moment ago, Your Honour feels that it is more appropriate-and I submit it is not-for us to raise a question of privilege based on what are alleged to be misleading statements by way of formal written notice, then of course we will do so. But there is an entirely different question here, in my submission, and that is the right of a member to question ministers with respect to statements made by them in the House and, perhaps even more important, the right of ministers to respond.


Some hon. Members:: Hear, hear!


Madam Speaker:: I just want to straighten out a number of facts. When the question was asked by the hon. member for Cariboo-Chilcotin (Mr. Greenaway), I remember very well that I was not clear, from the way the question was formulated, whether I should allow the Minister of National Health and Welfare to answer, but I let it go. Things go very fast in the House. I let it go because I was not sure whether it was time for me to intervene. I really did not know whether or not the question was directed to her ministerial responsibilities, by the way the question was formulated. Subsequently, I believe it was the Minister of Indian Affairs and Northern Development (Mr. Munro) who answered further questions on this particular subject which I allowed, if my memory is correct.
Today it was quite clear to me, having heard of course the previous questions, that in my conception of what are the ministerial responsibilities of National Health and Welfare, this matter did not belong to her ministerial responsibilities. This is why I did not allow the minister to answer. It is certain that the proceedings wherein the Minister of National Health and Welfare made a statement arising out of the questions asked by the hon. member for Cariboo-Chilcotin took place at another sitting. Since it was at another sitting, I have no choice but to apply the rule whereby the hon. member for Kingston

March 30, 1982
Privilege - Miss MacDonald
and the Islands, whose right it is to raise a question of privilege, should give notice of the question of privilege, which I could hear subsequently.


Erik Nielsen: I wonder whether the Chair would please deal with my second submission, that is, the right of Members of Parliament to question ministers of the Crown on statements made in this place during its proceedings and on which members may wish to question their validity. That was my second submission. I maintain that we have the right as Members of Parliament to question ministers of the Crown with respect to the nature, misleading or otherwise, of statements they have made in this place. That is what was stopped today.


Madam Speaker:: The particular statement to which the hon. member is referring was made in the House and normally hon. members are allowed to question ministers about statements made in the House; but as I explained a few minutes ago, there was a slight slip in that particular instance as to whether the minister ought to have been allowed to answer. I felt today that I should not allow it twice. The hon. member might contest it; I would think it is a fair point. I will look into it to see how I can remedy it. Of course hon. members are allowed to ask questions of ministers on statements they have made in the House. That is objectively right, but the context we are discussing is slightly different. I submit to the hon. member that, since in the first instance I let it go because I was not quite sure, perhaps he can accept my explanation today. I decided not to let it go because I was quite sure it was not within the hon. member's ministerial responsibilities.


Erik Nielsen: There is one last point which I might leave with the Chair. I will not comment on the treatment of the Chair with respect to the original question of the hon. member for Cariboo-Chilcotin. Perhaps it should have been stopped; perhaps the minister should not have been allowed to answer it. But the fact remains that the statement is on the record and the allegation is that it is misleading. This is what we were attempting to deal with today.
While the Chair has it under consideration, it might well wish to consider the fact that we should not be burdened with the difficulties now confronting the Chair, in terms of the Chair's original decision or lack of it, in trying to deal with the record in the way we did today. I do not think the matter would be worthy of pursuit as a question of privilege if we could be assured that the exchange, which the minister was denied from responding to today, would be allowed for instance tomorrow.


Madam Speaker:: 1 will look at the rule to see exactly how it is worded. My impression now is that I could not allow the hon. minister to answer a question which does not relate to her administrative responsibility. That is my position now and, therefore, I would have to answer, without having checked further, that I do not think I would be able to allow it tomorrow.
To pursue what the hon. member just discussed, I do not believe I am burdening hon. members because of the slight slip
which I will admit might have happened the other day. The proceedings took place on a day other than today. It is quite clear that under any circumstances the hon. member for Kingston and the Islands, if she wishes to raise a question of privilege, may do it in the normal fashion. I refer her to Standing Order 17(2) whereby she may send me notice of her question of privilege, and I will hear her at another time.


Charles Joseph Clark: Madam Speaker, I rise just very briefly on this matter. In considering whatever it is you will be considering tomorrow, you might want to pay heed to the fact that, in addition to allowing the question of the hon. member for Cariboo-Chilcotin (Mr. Greenaway), you at some considerable time later in the question period allowed me to direct a question on the same matter to the Minister of National Health and Welfare (Miss Begin). If a slip were made in the first instance, Your Honour would want to consider whether or not the fact that that line of questioning was allowed to continue after some time for the Chair to reflect would have any bearing upon the judgment and the standards you would want the House to follow subsequently.


Madam Speaker:: Yes, I would want to do that. Could I ask the Right Hon. Leader of the Opposition (Mr. Clark) whether the hon. Minister of National Health and Welfare answered the question or whether it was answered by the Hon. Minister of Indian Affairs and Northern Development?


Charles Joseph Clark: The question was answered by the Hon. Minister of National Health and Welfare, as reported on page 15671 of Hansard.


CORPORATE AFFAIRS
Hon. Elmer M. MacKay (Central Nova):: Madam Speaker will recall that yesterday the Minister of Justice (Mr. Chretien) indicated that he would be providing me with some information about the Consolidated Computer matter today. I want to thank the minister who I believe has remained in the chamber for that purpose. I wonder whether he might have the indulgence of the House to fulfil that commitment.


Madam Speaker:: This can be done only with unanimous consent, because at this particular time we cannot continue question period. Does the House agree?


Some hon. Members:: Agreed.


Joseph Jacques Jean Chrétien: Madam Speaker, I was willing to give the answer during question period, but I did not know how to do it because the occasion did not arise. I should like to inform the hon. member that the reference was made to the Department of Justice, according to Section 4 of the Department of Justice Act which requires the minister to see that the
March 30, 1982

administration of the public sector is in accordance with the law. It is under this section of the Department of Justice Act that my department is conducting an inquiry into the matter at this time. If there are other proceedings, I will inform the House of Commons.
While I am on my feet, the hon. member for Cambridge (Mr. Speyer) asked me a question as well.


Madam Speaker:: Order, please.


Joseph Jacques Jean Chrétien: I will try to do it tomorrow.


Madam Speaker:: The hon. minister has had unanimous consent to answer one question, not a second one.



ROUTINE PROCEEDINGS


Benno Friesen: Madam Speaker, I have the duty and the honour to present a petition containing something over 2,000 names. It was presented to me by Mr. David Shoesmith and Mr. Norman Carr of Sarnia. The subject of the petition has to do with their concern that $100,000 was paid to the family of Clifford Robert Olson. In part the petition indicates that the undersigned believe the pay-off of $100,000 to the convicted killer, Clifford Olson, is grossly unjust. It goes on to indicate that in any event the $100,000 should be immediately retrieved and given to the families of the victims.
I want to add that from what they have told me they gathered these names at their own expense. They paid their own air fares to come to Ottawa to present the petition to me. They were particularly concerned that so little attention was paid in the area of public sympathy for the families and that a lot of notoriety-


Madam Speaker:: Order. The hon. member is not allowed to debate the petition. He should just announce the title, and then the petition is received by the House.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 3,544, 3,681, 3,715, 4,042 and 4,044.
Order Paper Questions


Mr. Andre: 1.	What official policy, if any, governs the awarding of contracts by Petro-Canada, or any of its subsidiary corporations, to Canadian-owned companies as distinct from American-owned companies involved in the supplying or servicing of the Canadian oil and gas industry?
2.	Will the government table a copy of any written communication to Petro-Canada informing the corporation as to its obligations with respect to supply or service contracts?
3.	In the case of the Petro-Canada drilling site (a) PEX Fina Berland 11-3159-24 W5 (b) Bedford Dolphin off the coast of Nova Scotia, was the mud-supplying contract awarded to an American-owned company and, if so, in each case, was the contract awarded despite equally competitive bids made by Canadian companies?
4.	As of January 1, 1979, what were the annual expenditures by Petro-Canada on oil and gas exploration and development and what amount was allocated to the purchase of supplies and services from other (a) companies (b) Canadian-owned companies?


Marc Lalonde: The Minister of Energy, Mines and Resources reports as follows:
2.	As per act, Petro-Canada is an independent agent and it is the policy of the Government of Canada not to interfere in the administration of a proprietary corporation.
Petro-Canada reports as follows:
1.	Petro-Canada has always believed that, wherever and whenever possible, contracts and business should be given to Canadians. It has been the corporation's goal since inception not only to seek Canadian partners in joint venture, but whenever possible to maximize the use of Canadian suppliers of goods and sevices.
3.	(a) and (b) The particular instances of specific contracts signed by Petro-Canada are considered by the corporation to be of a managerial decision-making nature and of such a nature as to provide information which might give an undue advantage to competitors.
4.	Information is not available in the form requested.


Mr. Herbert: 1.	How many Canadians are known to have epilepsy?
2.	Does the government finance research in this area and, if so, what amount was made available in the last year for which figures are available?


Mr. Doug Frith (Parliamentary Secretary to Minister of National Health and Welfare):: In so far as the Department of National Health and Welfare is concerned:
1.	There are no accurate figures available. The best estimate indicates that there are between 200,000 and 240,000 people with epilepsy in Canada.
2.	Yes, $27,079 in 1981-82.
In so far as the Medical Research Council is concerned:
1.	To be answered elsewhere.
2.	Yes, $774,846 in 1981-82.

March 30, 1982
Order Paper Questions ELDORADO NUCLEAR LIMITED


Mr. Herbert: 1.	Since 1977, who was the (a) Chairman of the Board (b) President and Chief Executive Officer (c) Vice-President of Eldorado Nuclear Limited?
2.	Since 1977, were the shares held in trust by the Minister of Energy, Mines and Resources and were appointments to the Board of Directors made by the Minister?
3.	(a) Does the shareholder approve all capital budget submissions (b) do the Minister of Finance and the President of the Treasury Board play a part in the approval process and, if so, what part?
4.	Is the broad outline of any capital investment proposal of Eldorado Nuclear Limited included in the capital budget submission for shareholder approval?


Marc Lalonde: Eldorado Nuclear Limited reports as follows:
1.	(a) and (b) Mr. N. M. Ediger. (c) Jan. 1, 1977-Jan. 31, 1979, Mr. C. G. Baschenis. Since Nov. 19, 1979, Mr. M. J. Moreau.
2.	Since 1977, all the shares of ENL have been held in trust by the Minister of Energy, Mines and Resources save for those shares held by directors as directors' qualifying shares. In 1981, these shares were no longer required by law and were thus returned to the minister of EM&R. Since 1977, appointments to the board of directors have been made by the minister acting as the sole shareholder of the corporation.
3.	(a) and (b) Eldorado Nuclear Limited's annual capital budget is prepared internally for ENL's board of directors and is then reviewed by the Minister of Energy, Mines and Resources, the Minister of Finance and President of the Treasury Board, who recommend the capital budget to the governor in council for approval.
4.	Capital investment proposals of a significant nature are described and included in the capital budget proposal.


Mr. Munro (Esquimalt-Saanich): 1.	What is the current status of the financial accounts winding up the three Southeast Asian Tripartite Commissions for Supervision and Control (Viet Nam, Cambodia and Laos)?
2.	What was the total cost of the operations?
3.	What contribution was made to the operations by each of the signatories to the Geneva agreements of 1954 and 1961?
4.	Are any of the signatories still in default and, if so, which ones and in what amount?
5.	Were efforts made to collect from those in default and, if so, what were such efforts?
6.	On what date was the last attempt made to settle the account and in what manner was the demarche taken?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: In so far as the Department of External Affairs is concerned, the answer is as follows:
1. The financial accounts with respect to the operations of the ICSC are the responsibility of India as the designated administering power under the Geneva agreements. India presented a final statement of account, including recoverable
costs incurred by Canada, to the co-chairmen of the 1954 Geneva Conference-the United Kingdom and the U.S.S.R.- in 1973. An appeal was subsequently addressed to the contributors-the United Kingdom, France, the U.S.S.R., the People's Republic of China and the Democratic Republic of Viet Nam-to settle the outstanding debts of the commission, including those owed to the member powers, by financial contributions to the common fund. This appeal, as was the case with previous appeals dating back to commencement of the commission, was not responded to by all of the contributing powers. As a result, the accounts remain open until such time as the contributing powers meet their financial obligations.
2.	The total cost of the operation for Canada was $10,509,000 of which $5,573,000 was non-recoverable and $4,936,000 was recoverable. The total cost of the operations for the three supervisory powers is not known as we do not have access to the complete records of expenditures for India and Poland.
3.	The contributing powers to the common fund set up for the Viet Nam and Cambodia Commissions-the United Kingdom, the U.S.S.R., France and the People's Republic of China-were responsible for 25 per cent each of the costs. The contributing powers to the commission for Laos and their respective financial responsibilities are: People's Republic of China, France, United Kingdom, U.S.A. and U.S.S.R. (17.6 per cent); Burma, Cambodia, Laos, North Viet Nam, South Viet Nam, Thailand (1.5 per cent); Canada, India, Poland (1 per cent). The precise contributions of countries other than Canada are not available from our records.
4.	The common fund is considered the administrative debtor for funds owed to the participating countries in the ICSCs and the contributing powers have a collective responsibility to meet the financial obligations to the fund. Certain contributing powers have made no contributions to the fund (People's Republic of China, Democratic Republic of Viet Nam) and have never evinced any desire to meet their financial obligations.
5 and 6. Various efforts have been made to have the contributing powers meet their financial obligations to the common fund, but these have not been received with any enthusiasm. Canada has made various direct approaches to the Indian government, the governments of the contributing powers and the co-chairmen of the 1954 Geneva Conference regarding reimbursement of the outstanding amounts- $3,208,043-owed to Canada. Our last official demarches were made in 1978 but the subject has been brought up informally from time to time since then by our embassy in Moscow and our high commission in London. We are not optimistic that the amounts owing either to Canada or to the other participants will be recovered but the accounts remain open and further efforts will be made to obtain reimbursement.
March 30, 1982


Mr. Corbin: 1.	How many pilots are employed by Air Canada and how many (a) speak (i) French (ii) English (iii) another language as their mother tongue (b) indicated (i) French (ii) English (iii) French and English as their language of work?
2.	What percentage of all the pilots is represented by each group in Part 1 ?


Mr. Jesse P. Flis (Parliamentary Secretary to Minister of Transport):: The management of Air Canada advises as follows:
I and 2. Available statistics relate to the employee's principal language. The latest figures compiled in November 1981 are:
English	1,638	86.5	per centFrench	226	12.	percentOther	30	1.5	per cent
It has not been found necessary to record preferred language of work. As an indication of the interest among pilots in being able to work in French, 77 have requested and hold copies of the French-language version of the pilot manuals (4.1 per cent).


David P. Smith: Madam Speaker, if question No. 3,571 could be made an order for return, that return would be tabled immediately.


Madam Speaker:: The questions enumerated by the parliamentary secretary ha ve been answered. Is it the pleasure of the House that Question No. 3,571 be deemed to have been made an order for return?


Some hon. Members:: Agreed.


OFFICIAL TRAVEL OF UNDERSECRETARY OF STATE FOR EXTERNAL AFFAIRS
Mr. Cossitt: 1.	During the time that he served as undersecretary of state for external affairs, what is a complete list of all trips made by air by Mr. A. E. Gotlieb, presently the Canadian Ambassador to Washington, including the (a) points of origin and destination (b) reason for the trip (c) class of travel used (d) names and job designations of any persons accompanying him at government expense (e) total cost?
2.	On how many occasions did Mr. Gotlieb travel First class?
3.	Did Mr. Gotlieb fly on the Concorde on any journey, particularly on a return trip from Paris, and, if so, what are all the reasons justifying the use of the Concorde and how much more did this cost the taxpayer compared to regular economy fare?
Return tabled.
Farm Loans


David P. Smith: Madam Speaker, I ask 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 Monday, March 29, consideration of Bill C-88, respecting loans to farmers, as reported (without amendment) from the Standing Committee on Agriculture; and Motion No. 1 (Mr. Hamilton, Qu'Appelle-Moose Mountain).
Thomas Gordon Towers: Mr. Speaker, in rising to take part in the debate on this bill, I want to bring to the attention of the House two or three things that I think are quite significant. First, I believe the Minister of Agriculture (Mr. Whelan) has not fulfilled his responsibility in the manner in which he could have and should have. Certainly there has been a real lack of imagination on his part. This is evidenced by the lack of programming that has taken place and the lack of interest that he has portrayed by not doing the things required in order to have a healthy agricultural community in Canada. You can have the most productive land in the world and you can have the best farmers in the world, Mr. Speaker, but unless the government sets the climate for continuing production, production which the world requires, then the agricultural industry and those involved in it will suffer as a consequence.
Over the last ten years I feel that the agricultural community in Canada has suffered great neglect as a result of the administration of the present Minister of Agriculture. I well remember when he first took office. He said that he was going to be a minister of agriculture who answered the phone. I think that about all he has done over the years is answer the phone. Unfortunately, no one else has filled the vacancy created by the minister while he answers the phone. While I recognize the importance of this bill, which will supply more funding to the farmers all across Canada, nevertheless that is not the answer to the agricultural problems in Canada today.
We have a government which seems to be ever incessant in its tax demands. It places the burden on those people who are producing and who are working, but fewer and fewer people are carrying the load. My first question, then, to the minister and to members opposite is this: is anyone listening? Does

March 30, 1982
Farm Loans
anyone actually know what has happened? The warning flags are out and Members of Parliament better realize that. Farmers and those in the agricultural industry are slipping further and further into debt. Sure, we get extra financing for a short time, but this financing is at an ever-increasing rate of interest. High interest costs are causing the problems facing the farming community. Those of us who have many farmers in our constituencies recognize that last summer the crunch started to come when interest rates escalated to an all-time Canadian high. It was at that time that farmers got into trouble. Farmers were prepared to carry a reasonable rate of interest, say 10 per cent or 11 per cent, but once interest rates got up into the high teens and low twenties, that is when their serious problems commenced. Farmers had to start selling off parts of their farming operations. That is why the situation is so serious, and that is why I say that the warning flags are out.
I would venture to say that this year the net income of agricultural producers will be down 25 per cent. That is a 25 per cent drop simply because the input costs of those involved in the agricultural industry will rise somewhere between 10 per cent and 15 per cent.
I will explain and give one example to you, Mr. Speaker, and through you to the House, of where the government is responsible for some of the cost. I asked the Minister of Finance (Mr. MacEachen) yesterday whether he would consider abolishing the excise tax on home heating fuels, natural gas and home heating oil. Farmers also have to heat their homes just like all other consumers in Canada.
The Prime Minister (Mr. Trudeau) says we have to bring prices down to control inflation. We agree with him about that. We agree with the Prime Minister that inflation has to be controlled. But you have to recognize it was the same Prime Minister who told us some seven years ago that inflation was wrestled to the ground. Where is inflation today compared to seven years ago? Inflation is running rampant. The government does not know how to handle a situation like this. Yet the government is adding to inflation by levying an extra excise tax on fuel for home heating, such as natural gas and oil.
There are farmers in our area whose costs to heat their poultry houses, their hog barns and their homes are $1,000 a month. Almost one third of that cost is going into the federal coffers through excise tax. It would seem to me that if the Minister of Agriculture had any clout or if there was any desire on the part of those in the cabinet to improve the situation, one of the things they would want to do would be to refrain from placing an extra burden on those in the productive end of agriculture. Why can the government not bring costs down? Why do we have to have extra burdens placed on those people who are trying to produce and who are working longer hours perhaps than any other sector of our community? Yet the government will not see fit to cut back on that tax.
I want to tell you something else, Mr. Speaker. Many rural communities have natural gas supplied by co-ops which they have set up and are running themselves. These co-ops have to collect this tax. At the present time the government will not wait a reasonable length of time, say 90 days, for that tax. We have discussed this 90-day collection time before in the House.
I am sure that if you had your way, Mr. Speaker, the message would get through to the cabinet and they would wait at least 90 days before requiring money from the co-operatives. But no, the Minister of Finance said yesterday he is not prepared to change that tax at the present time. To me that is totally unacceptable. It is not realistic to require co-operatives to pay money over before they collect it. Because of that requirement, the co-operatives have a continuous loan in the vicinity of $100,000. I do not think that is just, Mr. Speaker, and I am sure you do not either.


David P. Smith: You are out of order.


Thomas Gordon Towers: It is not out of order.


David P. Smith: You cannot drag the Speaker into the debate.


Thomas Gordon Towers: I am speaking to you through the Speaker, if you would only listen.


Mr. Deputy Speaker:: Order, please. I am sure the hon. member realizes that remarks should be addressed to the Chair. The Chair takes a broad view of the remarks addressed through him to the House.


Thomas Gordon Towers: The problem, Mr. Speaker, is that members opposite cannot face the truth. I said earlier that the farming community is going to have a drop of approximately 25 per cent in their net income this year. This is really serious because it is going to put an extra strain on their finances. At the present time the price of beef and pork is down 10 per cent to 15 per cent. Barley is down about $1 a bushel, and wheat is down about $2. So how can we expect the farming community to cope with this 10 per cent or 15 per cent increase in the cost of production? Because that is what it is. They are caught in the squeeze and we have a government which will not move even a little to help them.
Why should we bring in legislation to increase production costs, which is what is happening with the increase in the gasoline tax? We have to remember, Mr. Speaker, that our producers have to compete with the United States, and at the present time the price of gasoline there is approximately 10 per cent or 15 per cent less than here. We are putting producers in a strait-jacket, and it is totally unacceptable.
I do not like statistics, Mr. Speaker, but I am going to put some on record to show the current situation in the agricultural industry. I am glad to see the Minister of Veterans Affairs (Mr. Campbell), the former premier of one of our great provinces, is here listening to this debate because I know his province's economy depends a great deal on agriculture. Repayment arrears to the Farm Credit Corporation are increasing in all provinces with the exception of British Columbia. Compared to 1980, the arrears for 1981 in Alberta increased from 8.7 per cent to 9.7 per cent; in Saskatchewan, 6.1 per cent to 7.3 per cent; Manitoba, 5.5 per cent to 9.1 per cent; Ontario, 5.9 per cent to 7.6 per cent; Quebec, 6.1 per cent to 9 per cent; New Brunswick, 8.9 per cent to 11.2 per cent;
March 30, 1982

Nova Scotia, 9.6 per cent to 12.8 per cent; Prince Edward Island, 8.9 per cent to 10.7 per cent; Newfoundland, 30.6 per cent to 35.9 per cent. The over-all average increase was from 6.7 per cent to 8.3 per cent.
That is the trend, Mr. Speaker. Farmers are delaying their repayments with the result that there is not as much money to lend out as there should be. Therefore, we have to recognize there is a problem out there, it is increasing, and these changes to the FCC will not really have that much effect on the overall operation of the corporation or the farming community.
One of the fears I have concerning this bill is the suggestion made by the Minister of Agriculture in committee when he said that perhaps the corporation could go to Switzerland to borrow cheap money. Mr. Speaker, I want to warn the government and the farmer that what may be cheap money today may not be so cheap down the road. If rumours of depreciation of the dollar ever materialize, those loans will no longer be cheap. I would far rather have the Minister of Agriculture accept the amendment of the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) and allow the FCC to borrow money within our own economic community. The money might come from farmers selling their farms, or they might have had a good year with extra money available which they could put into the FCC and not have to pay tax on until such time as they are ready. There might be other groups or individuals who are prepared to do the same thing. It is a great way to Canadianize the system. Far better to do that than to try and Canadianize some of those Swiss banks.
The attempt by this government to Canadianize the industry is one of the reasons we now have higher energy costs than the United States. A great portion of the funding for this program comes out of the agricultural community because farmers use a lot of energy. A lot of their tax dollars are being siphoned off to buy oil companies which are not going to find or produce another barrel of oil, and I do not think they are going to make oil any cheaper. In fact, if we recognize what some Crown corporations have done to Canada, they will in fact increase the cost to the consumer.
I think the minister is on the wrong track by not accepting the amendment proposed by the hon. member for Qu'Appelle-Moose Mountain. The only excuse the Minister of Agriculture could give us last night for not accepting this amendment was that his advisers were against it. Well, for goodness sakes! I would like to ask hon. members opposite, who is running the Department of Agriculture? It is certainly not the Minister of Agriculture, if he is relying on his advisers. He is the man who should be running that department. He should be running it instead of answering the phone, as I said earlier.
We must recognize that there are problems on the horizon and that unless something is done very quickly, there will be continuing problems. I recognize that while the Minister of Agriculture, I believe in all honesty, is trying to do something, he still does not seem to have the desire or the ability to
Farm Loans
accomplish anything which will be of significant benefit. He will not be able to do this unless he changes his ways.


Some hon. Members:: Hear, hear!


Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, I rise to speak on this bill today. I come from a riding which is a very rich agricultural area, especially in the southern and western parts. When I read the history of my area, the riding of Victoria-Haliburton, I could understand why the early settlers came there. They arrived by water and by land, and they undertook to clear this very fertile soil and to make homes for their families for generations to come. We do have some industry. We have a mixed riding. Today I want to discuss the agricultural industry. There are a number of farmers in my riding who are in milk and grain production, and in every other segment of the agricultural industry.
There are a number of features in this bill with which I agree. I might even say that some of them are long overdue. However, considering the state of the agricultural industry in Canada, I would have to ask if this bill is too late to be truly effective in revitalizing the agricultural industry. This bill would have to be implemented in tandem with a policy of low interest rates. All hon. members in this House are aware, even those who are not directly involved in agriculture, that high interest rates are killing off the farms at a rate not seen in our country since the great depression.
I am encouraged by the provisions of this bill which would allow the Farm Credit Corporation to advance loans to nonfarmers who can provide a plan indicating they would become viable within five years. However, unless we can provide some assurance that they will remain on their farms for five years or more, Bill C-88 will be just another exercise in futility. What chance will they have to survive if farmers of long experience and of proven good management are selling out, some for small profits and others just to cut their losses? There were more than 8,000 farm failures in 1981, a large percentage of which were bankruptcies. A vast majority involved experienced farmers.
I want to see more people, especially young people, getting started in farming. For some people it is the only way of life they want. However, almost every day people tell me that they simply cannot afford the large down payment required today, mostly due to the provisions in the November 1981 budget concerning capital gains reserves and income averaging annuity contracts. After a lifetime of hard work, looking forward to the day when he can retire in comfort, the farmer of today must get a large down payment on the sale of his farm just to pay the capital gains tax, a tax on money he hoped to collect in the future.
There are some aspects of this bill which farmers can applaud, although not too loudly. There is no indication in Bill C-88 that the Minister of Agriculture (Mr. Whelan) and the Minister of Finance (Mr. MacEachen) are on the same wavelength. One giveth and the other taketh away. The Minister of Agriculture has been reported as saying that the Farm Credit Corporation will have $1 billion to lend out by June of this year. I notice that this bill will authorize the

March 30, 1982
Farm Loans
corporation to obtain a total of $350 million from the Consolidated Revenue Fund. This is based on a formula whereby the corporation would be able to obtain from the government 25 times its capitalization of $14 million.
Let us assume that the Farm Credit Corporation fund will be swollen by an additional $150 million this year through payments by mortgage holders. This would make a total of $500 million available to the Farm Credit Corporation to make new loans. What would be the source of the other $500 million? It would presumably be through the provisions of Clause 8 of this bill which revises Section 13 of the Farm Credit Act. This revised section would authorize the Farm Credit Corporation, with the approval of the Minister of Finance, to borrow money by any means, including the issuing and selling of bonds, debentures, notes and other evidence of the indebtedness of the corporation.
Under subsection (2) we find that the Minister of Finance may lend the Farm Credit Corporation money out of the Consolidated Revenue Fund. So far, so good. But we then come to subsection (3), which states that the aggregate amount outstanding pursuant to subsections (1) and (2) shall not at any time exceed 25 times the capital of the corporation. By my calculations, this brings us back to the $500 million, not the $1 billion trotted out by the Minister of Agriculture.
I would like some assurance from the minister that this is not some more of the razzle-dazzle practised so skilfully by the Minister of Finance. I would like to have some assurance from the Minister of Agriculture that the $350 million from the Consolidated Revenue Fund, plus the $150 million payment from mortgage holders, will be separate and distinct from the corporation's authorization to borrow money on the market.
There is also the question of what rates of interest will apply where funds other than those from the Consolidated Revenue Fund are loaned by the Farm Credit Corporation. Funds raised through bonds and debentures will command a higher rate of interest than the rate presently charged by the Farm Credit Corporation. There is nothing in this bill to indicate whether these higher rates of interest will be subsidized by the federal government.
I am not too pleased with Clause 14 of this bill. It authorizes the Farm Credit Corporation to keep its funds and accounts in the Bank of Canada and other financial institutions in and out of Canada. I think it should state "any financial institution in Canada", period.
I would like to go back for a moment to the question of the presumed authorization of the Farm Credit Corporation to borrow money on the open market. I think that some clarification of this section is called for. However, let us assume that the corporation does float bonds and debentures on the money market. I would like to see some provision in this bill whereby the Farm Credit Corporation would be able to issue bonds such as the Small Business Development Bond and that the interest be made tax deductible. If it works for business it should work for the farmer.
I certainly go along with the phrase of the Minister of Agriculture quoted yesterday by the member for Qu'Appelle-Moose Mountain (Mr. Hamilton), when the minister stated that the future of agriculture is ahead of us. I believe that, Mr. Speaker, and I also believe in the interest of the Minister of Agriculture. I think he tries. Probably he is not getting the support he should. I have found in my dealings with the Minister of Agriculture that I always get along very well with him. He has been very receptive. We meet and we chat quite often. But I think the government has a responsibility to our agricultural industry, the oldest industry that has a future in Canada, if it is managed properly by the department and encouraged.
The interest rate the farmer has to pay today to obtain conventional loans from the bank makes it absolutely impossible for him to borrow money and carry on. This is what is hurting our farming community probably more than anything else. It is also hurting every other industry. It leaves the farmer very uncompetitive in a market that fluctuates up and down.
Another point is that the return the farmer receives on his product is going down. The attitude of the banking industry toward the farmer and the agricultural industry is such that over 8,000 farmers last year had to declare bankruptcy. There probably will be many more. This is something our country cannot afford.
Our farmers are faced on practically every product with a decrease in their returns. This is something they may have to take for granted. When they go to the bank to arrange a loan-which is practically a necessity with every farmer today, not all but the vast majority of them-and when they go to sell their product, they are not sure what they will get for it on the market.
Many farmers come to me with their problems, and I can recall a few of them. In one case I might mention, the farm was handed down from father to son for generations. As the method of farming changed, the son who inherited the farm was forced to buy new machinery. He was forced to go, as some people would say, "mod" if he wanted to stay in existence. He goes to the Farm Credit Corporation; he goes to his bank; he borrows money. He has no idea that there will be an increase in interest rates three years down the road. Probably he was underfinanced by the Farm Credit Corporation. They gave him all kinds of advice, that he had to buy a certain type of machinery to be successful or he would not get a loan, or he had to increase his production of whatever the commodity may have been or he would not qualify for a loan. He would not have the cash flow. Today, not only have the returns and the cash flow gone down, but his interest rate has gone up. It leaves him in a very tight position.
When he goes back to the Farm Credit Corporation, he is told, "You are doing things all in the wrong way; your cash flow is not high enough". What is this man to do? He can get no more money from his bank. The Farm Credit Corporation should, to my mind, give him more money. I know there are
March 30, 1982

exceptions; I will not stand here and say there are not. There are exceptions. But there also should be consideration. The Farm Credit Corporation should be acting to promote the agricultural industry. Its goal is the betterment of the agricultural industry, but it is letting this farmer down. He is going to lose the family farm; he has teenage daughters going to school; he has a small family; he is going to go through the embarrassment of asking, "How many lives is this going to ruin?"
How many people that make that decision in respect of this gentleman have to worry about their pay cheque? I think some of our people representing probably every segment of our government, those who have to deal with the real world of people, are not understanding enough. They are too inconsiderate; they go out with a blank piece of paper and forms and regulations. There is no end to it.
Also the farmer, if he is successful, probably has to wait. I had a phone call this morning. A young farmer who had over $70,000 collateral to put up and who wanted to borrow $40,000 to increase his farm machinery for custom work-I will deal with that in a moment-goes to the Farm Credit Corporation and is told he has to wait six weeks before they would even look at his case. That is what he had to do. Imagine waiting six weeks in the spring of the year before he can have his case even considered! This man is a proven farmer and a very aggressive farmer. We should have a more positive approach and a more understandable approach by all our representatives-and I do not stop just at the Farm Credit Corporation. After all is said and done, they are civil servants, they are there to serve their fellow men as well as being representatives of the government. Of late, 1 have had too many complaints about the standoffish attitude of some who are filling these positions. They are not a credit to the department.
I certainly go along with the remarks of the member from Qu'Appelle-Moose Mountain who moved this motion. He is a positive thinker. There are many suggestions he offered, not only this amendment but in his speech last night, that the minister should take into consideration. I think the minister will take these into consideration.
I wish to stress again, my friends, that the farmer is finding himself in dire straits. We have to look on the farmer today as a businessman. He is a businessman. When we see that the Japanese farmer can borrow money at 3.5 per cent interest, how does this stack up with our Canadian farmer who is paying anywhere from 17 per cent to 20 per cent interest, of the preferred rate which I think is now 16.25 per cent from the Farm Credit Corporation?
We are neglecting our farmers. We have a commodity here, my friends, that we will not have to worry about on the world markets. We should be catering to a hungry world, for we find hunger in many parts of the world. This is an industry the products of which will always be in demand.
So I appeal to the minister to take into consideration the lending practices of the Farm Credit Corporation and to ensure there is a little bit of understanding on the part of those people who represent him throughout the country.
Farm Loans
I heard the minister say yesterday in respect of farm credit corporations that if they were given too much range with respect to the principle of the Small Business Development Bond the money supply for other industry would dry up. I need only think back to last November when the Government of Canada borrowed bond money from Canadians at 19'/2 per cent interest. That dried up a lot of money for businesses. Yesterday the minister talked of the money that was available to him and the Farm Credit Corporation. I would encourage the minister to secure as much of that money as possible and make it available to our farmers in Canada so that they can eke out an existence in a healthy agricultural community.


Stanley J. Hovdebo: Mr. Speaker, I am happy to speak on this bill amending the Farm Credit Act. Probably no area of the economy is more affected by the vagaries of the marketplace than farming. Only in agriculture is the market system still expected to work. Only the farmer is expected to put his product on the shelf and accept what is offered. The idea that supply and demand, the open market, will dictate how much a farmer will make is as outmoded as the walking plough. However, some still believe it is the panacea for the industry.
Bill C-88 before us is concerned with the survival of the farmer. I state it that way because it is important that we emphasize the end result of not providing the farm community with the kinds of programs which allow it to survive in a more natural way. I could spend a considerable amount of time developing a scenario about the need for credit to survive. Unfortunately, the Farm Credit Corporation has become an agency which controls to some extent the hope of survival for many farmers.
It is a pretty good indication of the ineffectiveness of our agricultural policy when we must recognize that the Farm Credit Corporation, which was originally set up to assist farmers to develop and grow, has become an agency of survival, and it is not doing too well at that. When you look at the bankruptcy rates and the number of liquidations, you can see that the corporation is not doing particularly well in helping farmers to survive. We now have a situation where the corporation which was set up for development has become the corporation to which farmers look to survive.
During the last week a group of Ontario farmers visited Ottawa. I am sure many members here met with them. They call themselves the Canadian Farmers' Survival Association. That group indicated that thousands of farmers will not survive the next couple of months.
Yesterday my colleague from Humboldt-Lake Centre (Mr. Althouse) read into the record the recommendations which that group made when they were here. Ideally, if farmers generally are given the kind of policy and security they should have, we would not have to be looking at amendments to the Farm Credit Act. There would be no increase in debt. As it is, their indebtedness is steadily increasing. I again refer to my
15964

March 30, 1982
Farm Loans
colleague's speech where he indicated the level in the change of debt over the past ten years.
In considering the need for farm credit, we should examine the capacity of the farm community to borrow. Canadian farmers have been a very good bet for the lending agencies. The repayment rates under various federal programs are invariably outstanding. The records of the Farm Credit Corporation and the Canadian Wheat Board will attest to that. Further, Canadian farmers are not over their heads as far as the total debt carried is concerned.
A 1981 farm survey conducted by the Farm Credit Corporation showed that Canadian farmers had 85 per cent equity on average net assets of something over $400,000. This indicates that farmers have the capacity to carry farm credit if it is available for long terms and at interest rates that are less than usurious.
Until a few years ago, any rate over 6 per cent was considered usury. It then went to 12 per cent and more recently operating loans for farmers have been at 23 per cent. As interest rates tripled between 1977 and 1981, one need hardly ask why a credit-intensive industry such as farming has got into so much difficulty. Clearly the difficulty in the farming community is related not to the ability to produce but to borrowing capacity.
Since the Government of Canada is supposed to be the lender of last resort, when talking about the problems of lending we must talk about the problems of the Government of Canada. In many discussions on farm credit, myths have been propounded by people who should know better. One myth has been the criticism of the banks which say that a shortage of money is not the problem but rather poor farming practices. That criticism of farmers by the lending institutions is a myth.
Every Member of Parliament who lives in an agricultural riding knows it is not correct. Case after case is brought to our attention by sound applicants who have been turned down by the banks or discouraged from applying for small business bonds. They have been turned down for a limited amount of farm credit by the Farm Credit Corporation emergency fund. They are seeking any kind of financing just to be able to keep on farming.
The actual number of farm bankruptcies filed in the bankruptcy branch of the Department of Consumer and Corporate Affairs in 1979 was 125. That number is fairly small, given that there are more than 300,000 farmers in Canada. Yet the year to year increase in bankruptcies is significant, and the percentage increases are staggering. In 1979 there were 125. In 1980 there were 222, an increase of 77.6 per cent. In 1981 there were 261, an increase of 17.6 per cent. We recently received a report on the first two months of 1982, and according to that report the total for those two months was 63, an increase of 54 per cent over the same two months in 1981. Clearly the increase in farm bankruptcies has not stopped, regardless of what the bankers of Canada say or what little the Minister of Agriculture (Mr. Whelan) does.
The second myth about farmers is that they are all rich and do not need increased farm credit. A recent study by George L. Brinkman for the Economic Council of Canada entitled "Farm Income in Canada" tried to show the profitability of Canadian farms. The study pointed out that if capital appreciation is taken into account, farms have profitability similar to businesses of a similar size. Yet farmers know, as do most hon. members here this afternoon-it is too bad the economists do not know-that capital gain does not produce cash for expenses and credit for investment. Assets can be liquidated, but liquidation also means the viability of a farm is likely to be in question. Further, fixed assets on a farm are only valuable if someone wants to buy them, and that is not always the case in areas where agriculture may be a depressed industry.
The group which visited us last week, the Canadian Farmers' Survival Association, pointed out to us that in some areas of Ontario the price of land, which was running at $1,000 an acre last year or the year before, has dropped to $250 an acre, so even fixed assets become a liability.
Most of us who have examined Bill C-88 have come away with the feeling that it does not meet the major test for longterm credit legislation and that it does not provide reasonable amounts of money at reasonable cost repayable over a ten-year term or longer. Farm Credit Corporation money currently costs 16.75 per cent, and that level might be increased if what the Minister of Agriculture suggests should be the basis for borrowing is in effect. Yet within this bill there does not seem to be any guarantee that the Farm Credit Corporation will be able to borrow at the same rate as government bonds which, at the moment, is 1.25 per cent lower than the 16.75 per cent the Farm Credit Corporation is charging.
Historically the Farm Credit Corporation has always trailed the prime rate offered by the chartered banks. In the 19771981 period the gap was about 1.65 per cent. There does not appear to be any guarantee in this bill which would maintain the historical difference between Farm Credit Corporation and bank prime rates. Perhaps the minister should consider giving a guarantee that Farm Credit Corporation rates will continue to track below the prime rates charged by the banks or, because his policies have been so inadequate in the funding of farms in the past and in keeping the level of income high enough to survive, perhaps the minister should guarantee a level much lower than that. Perhaps he should guarantee a level of 3.5 per cent, which would be somewhat of a service rate in the lending of money to farmers who are having problems. In his speech yesterday the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) suggested that it might be possible to have a rate of one-half prime. Any of these proposals would be much better than what is in the bill now; the bill makes it possible for Farm Credit Corporation loans to cost more than bank loans in the future.
A second criticism many of us have raised concerns longterm credit in general. Is credit truly long term if the bank has the option of converting a loan into a demand note with a
March 30, 1982

floating rate? That does not seem to me to fill the requirement of long-term credit at a fixed rate.
I note in this Farm Credit Corporation bill that there is a bit of wandering about in relation to trying to establish ten years as a possible term for a fixed rate. It is striking to note that the government is considering getting out of the business of longterm loans to farmers. The Farm Credit Corporation was the traditional supplier of more than 70 per cent of long-term credit; now it supplies 20 per cent. The gap in the marketplace has been filled, of course, by the banks, but banks-particularly the Canadian chartered banks-do not enter the lending field without throwing their weight around.
We saw that most recently when the Canadian Farmers' Survival Association visited our caucus. In its five-point plan the association wanted the reinstatement of the Farmers' Creditors Arrangement Act of 1934. That request was a serious request. That legislation served the purpose of giving farmers economic security in return for the socially and economically desirable activity of providing food for Canadians. However, what was the response of the Minister of Agriculture? He said we cannot bring that law back because if we brought it back, that would frighten the banks out of agricultural lending. It is not good enough that farmers have shown outstanding ability to repay their loans; the banks still had to be able to foreclose, if they wished, before they would consider lending to farmers.
I am pleased that the survival association continues to help the farmers. I may not agree with its methods in every case but at least it is attempting to help. I commend its motto, "Never negotiate out of fear but never fear to negotiate," to the Minister of Agriculture.
In many ways it appears that partial privatization through the Farm Credit Corporation is the way the government wants agriculture to go today. The Farm Credit Corporation has been a rather underworked agency in recent years. In the peak lending years, 1965 to 1968, between 10,000 and 12,000 loans were granted, but in 1981 under 5,000 loans were granted. If the government can convince me that privatization will come close to meeting the demand and that it may have a case for taking this step-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member but the time allotted to him has expired. He may continue only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Stanley J. Hovdebo: Mr. Speaker, I wish to thank the House for its agreement. I have just another paragraph that I should like to put on the record.
The government does not claim that the privatization of the Farm Credit Corporation will solve the problem; rather, it
Farm Loans
claims that in time, as the mechanisms for borrowing are put in place and the corporation establishes itself in the financial markets, a progressively larger portion of its funds could be obtained directly from that source. The government is suggesting that it is going to get out of this entirely and that this action will therefore force the corporation to become a private organization lending money at the going rate. This kind of luxury would be a disaster for many Canadian farmers. It does them little good, as they are going under, to be told "hold your breath". The great fault of this bill is that it tells too many people to wait.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Saskatoon West (Mr. Hnatyshyn)-Emergency Measures-Query respecting introduction of legislation, (b) Request that order in council be rescinded; the hon. member for Surrey-White Rock-North Delta (Mr. Friesen)-Emergency Measures-Criteria for release of criminals; the hon. member for Selkirk-Interlake (Mr. Sargeant)-Canadian Armed Forces-Provisions for single parent members, (b) Request that pay be increased.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of Bill C-88, respecting loans to farmers, as reported (without amendment) from the Standing Committee on Agriculture; and Motion No. 1 (Mr. Hamilton, Qu'Appelle-Moose Mountain).
Mr. G. M. Gurbin (Bruce-Grey):: Mr. Speaker, I rise to speak on the amendment proposed by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton). I think a number of different things should be dealt with as we debate the bill, which will be discussed further on third reading, and that a little bit of background would help put the whole bill, and specifically the amendment, in context. The amendment is the key to the whole bill. I will try to expand upon some of the points that have already been dealt with by the hon. member for Qu'Appelle-Moose Mountain in his remarks.

March 30, 1982
Farm Loans
The first point I would raise is the terrific interest that the government shows in this legislation. I know it is not the decent thing to criticize the government, but 1 would like to honour those members of the opposition parties who have participated in the debate. They have brought forward important points and issues that affect agriculture today. I regret that those members of the government who represent rural ridings have not participated more actively.
People who are facing the loss of their jobs in the auto industry or those involved in business or some economic activity may be wondering whether farming deserves all the attention it gets and whether farmers are worse off than many other segments of the economy. It is important to point out, however, that this is a primary industry. Whatever happens in farming, as in forestry and mining, for instance, has significant repercussions throughout the economy. The multiplier effect- whether that would be seven or any other figure-generates wealth in the economy. It has been a traditional base in Canada. We are in danger of losing a significant portion of that base, Mr. Speaker.
We have learned that Canadians are paying more in taxes than they are for food or shelter. At the very least, that raises the question of the level of taxation, whether on oil, gas or fuels, that is required for agricultural production and whether the return to the farmer at the farm gate is adequate. Interest rates are a significant factor in the cost of production today. This view is supported by many farm groups.
The question of interest rates has traditionally been dealt with by the Farm Credit Corporation. In the last ten years the interest portion of agricultural production has increased by approximately 645 per cent. That is a fantastic increase, Mr. Speaker. If the farmer or the consumer compares the actual return on a pound of beef or a bushel of corn at the farm gate ten years ago with the price received today, it is evident that there has not been a six times increase in price. The increase in the interest cost is the most important single issue and the one that we have to deal with effectively and quickly if we are to maintain that base in agriculture.
The most important part of the bill appears on page 4 in Clause 13(1) which reads as follows:
The corporation may, with the approval of the Minister of Finance, borrow money by any means, including issuing and selling bonds, debentures, notes and other evidences of indebtedness of the corporation.
The key word and the one that the amendment makes reference to is "bond". The amendment offered by the hon. member for Qu'Appelle-Moose Mountain reads as follows:
That Bill C-88, an act respecting loans to farmers, be amended in Clause 8 by adding immediately after line 31 at page 4 the following:
"(1.1) For greater certainty, the expression 'bonds' referred to in subsection
(1) includes 'small business development bond'."
Members of the New Democratic Party have suggested that this measure could be more appropriately dealt with by the taxation department, and perhaps that is so. But the point is that the concept be understood and accepted by the lawyers acting for the Minister of Agriculture (Mr. Whelan) on this amendment-and he had a little trouble with that yesterdayand that the concept of the bond be understood, de facto, to be a part of the new legislation as it affects farm credit.
When we consider that different people look at the question in different ways, we must remember the bottom line. Whether it is individual lenders to the Farm Credit Corporation or lending institutions that lend money to individual farmers, they use the principle where, through taxation devices, there is an opportunity for borrowers to have effective rates of interest which are considerably lower than those prevailing through the monetary policy of the Bank of Canada, as described and in fact dictated by government policy.
The situation now, whether interest rates are 10 per cent or 25 per cent, as they have been, is that we cannot afford at the agricultural level to continue paying those costs and expect agriculture to survive. If we look at Japan and a number of other countries, we see that they are able with a number of devices to take advantage of significantly lower rates. We are forced in world markets, and even in domestic ones, to compete with those different producers. Perhaps the United States is the best example of a country which is able to produce with the advantage of low interest rates as part of its cost of production.
Other amendments have been proposed. The one proposed by the Canadian Federation of Agriculture is in part the same idea as the amendment about which we are talking now. I should like to quote from the presentation of Mr. Kirk on behalf of the Canadian Federation of Agriculture, wherein he said that the federation would like an amendment to change the title of the act from:
-an act to provide for the extension of long-term mortgages to farmers to an act to extend short-intermediate and long-term credit services to the farmers.
The bond principle can be applied in a number of ways. It could be a short-term bond. In fact, the legislation could be drafted in many ways. Recently I talked with representatives of the Bank of Montreal who indicated that they have bonds which they are turning into ten-year time frames because they know producers cannot carry repayments on principal and interest over normal five-year periods. The bond principle can be adjusted to any number of periods of time, but the bottom line is lower interest rates if we are to achieve the goals which in fact are necessary at this time.
The key point made by the Canadian Federation of Agriculture was that indeed the situation was very difficult because long-term capital had not been provided at reasonable interest rates. There is an immediate problem today, not tomorrow. Over the past several months a problem has been brought into sharper focus, and perhaps will be brought to an unfortunate climax within the next several months, and that is that farmers need more capital, particularly operating capital, for planting. Spring planting is coming and there are a number of farmers who are now technically bankrupt. There are farmers who will not be able to borrow enough money to provide seed and fertilizer to work the land. This will have repercussions-if they do not plant, they cannot harvest. The only cash flow to
March 30, 1982

which some producers can look now is from cash crop. The short-term problem must be addressed immediately.
There has been the extraordinary appearance on the farm scene of different groups. Some are concerned farm women who are trying to address the problem and have met with both provincial and federal ministers of agriculture in Ontario. Also the Canadian Farmers' Survival Association met with Members of Parliament from all parties to bring forward its specific suggestions and concerns. No matter what is the mechanism, there is a general consensus among all farm organizations and all actively participating farmers that there must be a shortterm solution with lower interest rates.
I should like to follow my specific comments with a problem which I have experienced in the past two or three months with the Minister of Agriculture concerning the bill. This specifically refers to the amendment so I think it is quite appropriate. The minister has made a number of comments. Last Friday I looked through some of the commentaries which have been made on the agricultural scene. "Phooey on Bouey" is one quote of the Minister of Agriculture. This quotation appeared in an article by Roy MacGregor in Today. The article went on:
-"MacEachen said he was going to make the banks bleed. Hell, he gave them a transfusion".
Those comments of the Minister of Agriculture are very appealing to people who are in distress in the agricultural community, people who are facing foreclosures or receiverships, people who see interest rates continuing to climb because there is no resolution of the problem. But indeed they create confusion and should raise some serious question, if not a question of privilege in so far as the Minister of Agriculture is concerned. The minister talked about raising additional funds through private borrowing. He went so far as to say in February of this year that he would have an extra $1 billion for farmers to borrow through the Farm Credit Corporation. He commented upon this in such a manner that we should question what kind of a game he is playing with the agricultural community.
We have awaited this legislation for several years. We heard about it all last summer as the minister talked with different farm groups that were facing difficult problems. Now we have this promise finally coming off with new legislation, and we have the Minister of Agriculture talking about providing an extra $1 billion from private funding. The situation is that he is out in the country saying "Phooey on Bouey" and "Mac-Eachen has given the banks a transfusion", which are in direct contradiction to stated cabinet policy.
The Prime Minister (Mr. Trudeau) suggested that he should have resignations from people within cabinet if they do not support or choose to criticize cabinet solidarity and cabinet policy. Yet the Minister of Agriculture is out in the country doing precisely that, I hope honestly to tell the farm community what he thinks. I would be more concerned that he is doing it to placate or hoodwink them a little at the same time, because he stands up in the House and votes for the budget
Farm Loans
and the principles involved in the budget. We must take it that at least in the House he is supporting the Minister of Finance (Mr. MacEachen) and the high interest rate policies of the government. He cannot have it both ways. He is a pretty capable fellow at speaking out of both sides of his mouth at the same time. This is something which should be seriously questioned by the House, because I think there is a serious question of conflict. I do not know what is his ultimate purpose in doing that, but I think it does not serve any good purpose for the agricultural community or the country to be getting a number of mixed signals. I really question how honest it was for him to do it.
My final point in speaking to the amendment concerns optimism. We all know what agriculture in Canada can do. We all know that it can produce more and that there will be world markets for agricultural products. We all know that there will be large numbers of people who will have to be fed. But this optimism and indeed the hope for economic recovery and the required renewal, if we are to achieve our potential not only in agriculture but in other areas, are seriously questioned by the whole country.
I think the specific point we come down to is whether or not the Minister of Agriculture can come up with $1 billion in the short term, whether the interest rate will be satisfactory, so that farmers and capable producers will be able to survive in the long term. It is a question of whether the Minister of Agriculture will be able to get from Treasury Board the additional $26 million on top of the $14 million that has already been asked for, making the capital base sufficient to allow him to borrow that extra $1 billion. That is a serious question. From all indications we now have a situation where the Minister of Agriculture has demonstrated that he is really impotent in being able to bring forward agricultural problems to cabinet productively.
The total contribution which the federal government has made to those segments of the agricultural community that are in distress now is $5 million, and that is for the whole country. The rest is money borrowed from the Consolidated Revenue Fund which provided a program for about 135 farmers. That program finished three months ago, but that money has to be repaid. The only contribution that has been made is $5 million. The minister has said publicly that there is no way there can be any kind of stabilization for the year 1981. He is now coming up with a supply management program which may or may not be what agriculture wants. But he has been unable to bring forward the kind of support that agriculture needs at this time from cabinet.
I look forward to speaking on third reading of this bill if I have the opportunity.


Mr. Charles Mayer (Portage-Marquette):: Mr. Speaker, I will speak very briefly at report stage. I will speak specifically to the amendment moved by my colleague, the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton).

March 30, 1982
Farm Loans
In my opinion, this amendment is very straightforward and very worth while. For the life of me I cannot understand why the government does not accept it and be proud that we have someone in the House who can move an amendment which makes as much sense as this one.
What the amendment seeks to do is to make it easier for the Farm Credit Corporation to make use of the small business bond principle. That is a very simple and straightforward principle. It would aid farmers in terms of making financing available to them at a lower rate of interest. We know that interest rates are the biggest problem that faces our farmers this spring as they go to the fields to put crops in the ground enabling them to harvest this fall.
The hon. member for Bruce-Grey (Mr. Gurbin) who just spoke pointed out that if you do not seed, you do not harvest. That should be obvious even to the Minister of Finance (Mr. MacEachen). Yet if farmers are not able to get enough financing to seed, there will be no harvest. Among other things this amendment seeks to make it easier for farmers to finance their spring operations.
What does the Minister of Agriculture tell us in response to the amendment? Last night, as reported in Hansard at page 15930, the Minister of Agriculture said:
However, because Section 13(1) does not exclude what the hon. member is suggesting, the amendment as suggested is not necessary, again according to my legal advisers. In cither case, the concept of the small business bond would require complementary amendments, I am told, of the Income Tax Act,-
My response to that is, so what? If it requires an amendment to the Income Tax Act, let us amend it. Let us not give the income tax people a chance to say that they cannot bring forward that kind of an incentive to farmers because we did not do it on this side of the House, because we did not do it with the bill in front of us. That is absolute nonsense. I think it is totally irresponsible for the Minister of Agriculture to put up that kind of what I call stupid argument against the amendment, because that is exactly what it is.
Just to emphasize what the hon. member for Bruce-Grey said, I revert to what the Minister of Agriculture said before Christmas. He said farmers are gutless, they are not doing anything. If there is ever an example of a gutless farm leader, it is the Minister of Agriculture. We have a very simple, straightforward amendment to put through but he does not even have the guts to stand up to his department. If that is the case, why have a minister of agriculture? All he has to do is say, "I am sorry, don't bother driving me around in my car, it will save the taxpayers some expense; I will just do what the department tells me to do." Why have a minister of agriculture? I think a lot of farmers are beginning to ask that question.
The minister talked about the banks. I do not know whether I can quote him exactly, but I can paraphrase him. The minister referred to the banks and some of their lending practices as being scandalous and fraudulent. You would think from that statement that if the minister had a chance to do something in terms of lowering interest rates paid to banks he
would do something about it. That is what the amendment is designed to do. Specifically, Section 13(1) will read:
The corporation may, with the approval of the Minister of Finance, borrow money by any means,-
And the amendment is there to make sure that "by any means" specifically includes the small business development bond concept. Again, you would think that a minister who would want to accuse the banking system in this country of being fraudulent and scandalous in some of their lending practices would have enough courage himself to follow through on some of the things he is saying. This goes back to what went on during the period when the bells rang some two weeks ago. We talked about Parliament and the way it was supposed to work. If it is going to work, then it seems to me that the government should be willing to accept amendments that are not all-encompassing. This amendment does not change the intention of the act. The Speaker did not rule this amendment out of order. It is simply there to define further how the act is supposed to work. If we are to have a parliamentary system, it seems to me that there should be no reason why this kind of amendment is not accepted and accepted gladly by the government.
The Minister of Finance says that the banks should bleed a little bit. One of the ways to make the banks bleed a little bit is to have things set up so that we pay a little less interest when borrowing money. When I say "we", I am talking about the farmers. I am a farmer. But what does the government do? It does not want to accept the amendment because it has some hot shot advisers in the department of whom the minister is afraid. We pay their salaries and the minister is responsible for them, but he is afraid to go against their advice. That is some minister of agriculture.
Again, the ultimate in hypocrisy is when the Minister of Finance supports the Governor of the Bank of Canada. Obviously the Minister of Agriculture supports that. But what does he do when it comes time to do something about things? It is easy to say "Phooey on Bouey." Instead of making the banks bleed, we give them a transfusion. But when it comes time to accept a very simple, straightforward amendment in terms of clarifying how a particular section of the act should work, we do not do so.
Very briefly, I find it most unfortunate that I have to rise and use my time this afternoon to point out how inadequate and foolish are some of the statements which the Minister of Agriculture made yesterday when he talked about this very important bill. It is a very important bill, at least it can be in the way farmers are able to finance their operations.
I hope that at third reading I will be able to outline why I think this bill can be very significant in terms of agricultural finance. Let me close simply by saying that I think it most unfortunate that the government did not see fit to accept this simple, straightforward and very helpful amendment. It would have improved the act. If it were an improved act, it would better serve the farming community, and if the community is better served then everyone in this country is better served.


Mr. Deputy Speaker:: Is the House ready for the question?
March 30, 1982


Some hon. Members:: Question.


Mr. Deputy Speaker:: All those in favour of the motion please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
Motion (Mr. Hamilton, Qu'Appelle-Moose Mountain) negatived.


Miss Begin (for the Minister of Agriculture) moved: that the bill be concurred in.


[Stage Direction]
Motion agreed to.
Monique Bégin: that the bill be read the third time and do pass.


Charles James Mayer: Mr. Speaker, this is a very important bill with respect to agricultural finance. Perhaps I should qualify that and say it has the potential to become a very important bill. Without being too facetious and without being too disrespectful of the minister, I wonder if he really understands how significant this bill can be. Farmers make up a very small percentage of the population and do not account for very much in terms of political significance or importance. However, they are very important because they produce the most basic commodity of all: food. They have done a very good job of producing high quality food for the Canadian consumer. Not only that, but they have increased production to the extent that agricultural exports account for a significant part of our total exports.
Even though we import a lot of off-season fruits and vegetables, peanuts and other things we cannot grow because of our climate, we still have a significant trade surplus in food. By that I mean that when you add up all of our food exports and subtract our food imports, we still have a significant surplus. The larger the surplus, the easier it is for our dollar and interest rates; the easier it is for interest rates, the better it is for everyone in the country. A lot of people like to buy Japanese cars, and we have a problem in that we have too many of them here. We know that is causing problems for jobs in the automotive industry. However, we are a lot better off trading grain for Japanese cars or cameras than we are simply sending them our dollars. So the production and export of food is very important to this country.
It is also important-I have said this before many times and I like to say it every time I get the chance-because the less money the consumer spends on food, the more he has left over to spend on other things, which by and large means a higher standard of living for the country.
Probably the main reason why agriculture has been so productive is that we have made use of more capital. We now have to invest a tremendous amount of dollars to create a job in agriculture. Recent figures indicate that it takes more
Farm Loans
dollars to create a job in agriculture than it does in most manufacturing industries. That gives an idea of how capitalintensive farmers have become. The more that is so, the more problems we have when interest rates fluctuate. As interest rates go up, the farmer operating on borrowed money has to pay more interest. That causes problems, and that is why this bill is important.
Now, Mr. Speaker, the main reason I think this bill has the potential to be very significant to Canadian agriculture, one which could be used in the small business community because the same principle applies, is because of Section 13, which provides:
The corporation may, with the approval of the Minister of Finance, borrow money by any means, including issuing and selling bonds, debentures, notes and other evidences of indebtedness of the corporation.
Let me tell the House why that is important. I grew up in the middle of Saskatchewan. I see everyone in the House is overjoyed at that, really sitting on the edge of their chairs!


Some hon. Members:: Hear, hear!


Charles James Mayer: At any rate, there are some things which need to be said from a western perspective, and I sometimes think we do not say them often enough. We should say them more often, is perhaps a better way of phrasing it. In the early days of western agriculture we had a branch banking system, which still exists. That sytem works in such a way that there is a central bank with several small branches throughout the country. In the early days in Saskatchewan, at least where I grew up, many of those branches were net deposit banks in the fall of the year. By that I mean that when a farmer sold his grain, he put his money in the bank in the fall and the head office of the bank decided where the money would be invested. In almost all cases the money was taken out of the small community and sent to the larger centres to be used to develop areas away from where it was generated.
I can remember my father telling me a story, and I hope he is watching this afternoon. He went into a sub-branch of a branch bank, if you can follow that, Mr. Speaker, and they refused to cash a grain cheque for him. That is how short of cash some of those banks were many years ago. That did nothing to help the immediate area, and that is what has happened in many cases now.
The farmer's pension plan is his land. Economists call this forced savings. Farmers do not have any choice, they do not have a lot of spare cash to spend on recreational activities; they try to pay for their land. They do that because land is very important to people who earn their living from it, and also because it is, in effect, their pension fund. So they are forced to pay for the land. However, when they sell out they take the proceeds and in many cases deposit it in trust accounts, in banks or invest it in stocks and bonds. The situation is still the same in most cases; the money leaves the immediate area of where it was generated. So it is then unavailable to farmers for use in agriculture. This act, however, could mean that they

March 30, 1982
Farm Loans
would be able to tap that source of funds. In other words, the money generated from agriculture can stay in the industry to assist younger farmers in becoming established.
There is another reason why 1 think this bill can be very important. Any small business, including a farm, a machinery dealership or any other business run by one man or a family, will try to generate the capital to pay for that business within the lifetime of the operator. In other words, if the farmer wants to own his land, he has to do it in his lifetime. He borrows the money; he pays it back.
That is not the case in terms of larger corporations which can go to the market and issue equity shares. If one buys a share from General Motors, General Motors is not obligated to pay back the value of the share. It is obligated to pay back some kind of dividend on that investment. That simply means that a large corporation is able to obtain equity financing. General Motors, or any of the companies listed on the stock market, is not obligated to repay the value of the share. All it is obligated to pay is some kind of dividend on the share. That is not the case with most small businesses. Any small business must regenerate its capital every time there is a new generation of owners. This is also true with regard to farms. That is why it is once again important that we try to establish some means of keeping the money generated in agriculture working in agriculture.
This bill is very significant, it seems to me, because of Clause 13. If the Minister of Agriculture (Mr. Whelan) can make the Minister of Finance (Mr. MacEachen) understand my two areas of concern, I am sure the Minister of Finance will agree to go along with some of the suggestions which have been made concerning Clause 13 of this bill.
As I said, this bill is also very important in terms of assisting farmers to finance their operations because of the increased capital farmers need. My guess is that as recently as 20 years ago, a farmer could have taken somewhere between $50,000 and $75,000, and set himself up in a mixed farming operation. Right now, a farmer could easily spend that kind of money on one ordinary tractor, and could spend considerably more than that to purchase a larger four-wheel-drive tractor. Twenty years ago a farm could be completely equipped with the money that one spends today on one tractor. A farmer could have purchased a section of land, livestock and machinery and still have had operating capital left over. That is an indication of the amount of money farmers need today to operate their farms on a yearly basis. It is increasingly important that we recognize the demands farmers are placing on the capital market in order to continue operations.
However, even though all of my dreams would come true in terms of how Clause 13 would work, that is not the total answer as far as farm financing is concerned. Surely the government has an obligation to see that farm incomes at least keep pace with inflation. I believe it was the hon. member for Red Deer (Mr. Towers) who accurately pointed out that prices of all commodities have drastically dropped over the last couple of years while input costs have risen. Fuel prices have
risen largely because of taxation by the federal government. The costs of fertilizer, repairs and machinery have risen. Interest rates have risen, as have taxes. Virtually every farm operating cost is up, yet the prices of most farm commodities are down. I do not expect there will be any increases in the prices of farm commodities this coming year. The government has a role to play in attempting to see that prices are adequate, because if they are adequate there is less demand for financing. Farmers who earn an adequate income can get by with borrowing less.
There are areas that this government could pursue in connection with the Americans in order to increase prices of feed and cereal grains in world markets. I am not so sure that it is doing enough in that respect. There has been a great deal of comment recently to the effect that the federal government has been reneging on its responsibility toward a nationally coordinated and at least partially funded stabilization program for both beef and hogs, yet we see nothing on the horizon in this context. I wish there were some evidence of leadership, genuine interest and care. I am sure there are some avenues that the federal government and the Minister of Agriculture could pursue to ensure that the members of the farming community receive better incomes, and then the necessity for borrowing would be less.
The capital gains issue is another problem for farmers. If there were a different system of capital gains where a farmer paid less in capital gains when he disposed of his farm after working for many years to pay for it, the need for farm financing would also be less. Some people simply ask, "Well, why would that be?" That is because a farmer considers his piece of land to be his retirement fund. He pays for it over his productive lifetime. He decides how much money he will need to live on for the rest of his life. That is one of the determining factors in the price he asks for his land. However, if he must deduct a big chunk of capital gains tax from that price, then he must ask for more money for his land. That drives up the price of land, and that is what is happening. Therefore, if we had a more sensible approach to capital gains, the need for farm financing would considerably decrease.
1 do not think I need relate the problems the last budget has caused by the removal of the IAAC provisions and their replacement with forward averaging. That is really a system whereby the federal government has a bigger tax grab on income farmers and businessmen derive from the sale of capital assets upon retirement or at any other time when capital assets are sold.
Again referring back to the amendment proposed by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), it is clearly evident that the small business bond concept introduced in the November 12 budget is just not working. In fact, I do not know of one small business bond which has been granted since November 12. I do not understand why the government does not admit that this type of bond is not working. We must at least give the government credit for caring or seeing the situation clearly enough to realize that
March 30, 1982

there is a need, and for attempting to address it with a small business bond. However, it should now be evident to the government, approximately four months after the introduction of the budget, that the small business bond concept is not working and that prior to the budget the Small Business Development Bond concept was working. I believe many people who are knowledgeable in this area would agree that if the government is serious about meeting that need, it should return to the provisions of the Small Business Development Bond. That would make a lot of sense to a lot of people.
I do not believe farm financing should be considered to be the total solution to any of the problems. In fact, the real solution is to do something about farm income so that farmers will be in a position to generate as much of their capital requirements as possible from their own operations without having to go to the government or to the banks. I hope this bill will allow the Farm Credit Corporation to begin expanding its loans so that it can meet the needs of a higher percentage of farmers who have come to rely upon it.
The first loan I ever took out was a Farm Credit Corporation loan. I remember it well. In fact, I still have the piece of equipment I bought with that original loan. Your Honour is nodding. You must think I am pretty old and that it must have been a good piece of equipment. It was a good piece of equipment. It just goes to show that the Farm Credit Corporation has well served many people in this country. However, in the last number of years it has been unable to meet the need because it has been strapped for funds. Therefore, if this bill allows, the Farm Credit Corporation to go to the market to obtain additional funds, the corporation will be back in the position where it can once again meet the needs of the farming community.
I would like to stress that it would be helpful if farmers were given an opportunity to lend money through a small business bond, an agribond or some other concept which could come into play as a result of this bill. If farmers were given a chance to lend money to the Farm Credit Corporation, I believe many would choose to do so, even at a lower interest rate. I believe many farmers would be willing to accept somewhat less of a return on their money if they knew that it was staying in their own communities to help young farmers. Presently they are not getting that opportunity. We really will not know whether my thinking and my suggestion on this matter is correct until it is tried.
Let me give an example. Many people who grow up in a community have a sense of identity with that community. They have lived there for 30, 40 or 50 years, they choose to retire and they feel that they have been well served by their community. They would like to put something back into that area. If they are given an opportunity, through some kind of an agribond concept that would bear less interest, they would be willing to accept that if they knew that the money they were lending to the Farm Credit Corporation was going to help their community.
Farm Loans
I could give many examples showing how that system has worked across the United States, where they have a unit banking system. Banks there are owned, by and large, in small communities in the same way as a grocery store. The first line of thinking of any of those local banks is that their community should survive, since that in itself means the survival of the community. We could make use some of the pride that individuals have in their communities, in agriculture, in small towns, if we would offer agribonds at a lower rate of interest, provided the people offering that money to the Farm Credit Corporation know where that money is going.
I could touch on many other areas of farm financing. As I have said, this can be a significant bill. The Minister of Agriculture will get my support and the support of my colleagues if he attempts to get the Minister of Finance to let the Farm Credit Corporation borrow money, by any means, in order that that corporation may be in a better position to fulfil its mandate of providing adequate financing for the farmers. If we can do that we will be serving the farming community, we will serve the consumers and also serve the whole country.
Again, I have to congratulate the minister for this bill, or at least for this one clause, because it can be a very significant bill as a result of the inclusion of Section 13.


Some hon. Members:: Hear, hear!


Mr. Murray Cardiff (Huron-Bruce):: When I spoke on this bill at second reading, Mr. Speaker, I noted that there were a couple of difficulties which would need to be addressed at the committee stage. For example, I was told a year ago by Farm Credit Corporation officials that they would like to see a clear legislative guideline allowing them to treat a farmer's spouse as an equal partner, so that in a case where both the husband and the wife run and operate a farm, each would qualify for farm credit funding.
The present bill contains no such spelled-out provision, so 1 raised the matter in committee again. The matter has been discussed and the Farm Credit Corporation was given a clear indication that both spouses actively engaged in farming could receive farm credit funding.
I suppose they will run into the difficulty of a farm wife who has a job as a schoolteacher or who works in the nursing profession or is doing some office work, but we would certainly expect to see her taking her place beside her spouse operating that farm actively and helping in its operation, and that should be recognized as a partnership and should qualify for that type of funding.
I accept these assurances from the Farm Credit Corporation, but I know that other members also will want to monitor the situation as time passes to ensure that the policy works in practice. Otherwise we shall know that we need to give legislative expression to the equality between men and women which we on all sides of the House recognize as essential to the Constitution of our country.
The Minister of Agriculture (Mr. Whelan) appears to believe that no legislative mechanism needs to be provided to

March 30, 1982
Farm Loans
ensure fair treatment for partners who happen also to be married. I for one am going to give the minister the opportunity to prove himself right, now that his officials have indicated the intention to deal equitably with spouses in this regard,
On second reading also I noted that while we were increasing the potential of farm credit lending by $1,875 billion, we were not automatically ensuring that the corporation would have access to the funds, allowing the lending of anything like that amount. Each year the corporation receives only a fraction of its authorized capital and is accordingly enabled to borrow 25 times that capital addition. We in this party have been arguing that the Farm Credit Corporation has been given too little funding for some years back to allow it to meet the needs of agriculture.
The present bill giving the Farm Credit Corporation access to privately borrowed funds should provide the flexibility to permit the annual authorization of capital to match the perceived need for funding for land acquisition. Treasury Board should no longer need to keep its eyes so much on the need to lend the Farm Credit Corporation 25 times the amount of capital it authorizes each year, since a part of what the corporation borrows can now come from sources other than the Consolidated Revenue Fund. For this reason, the bill is an improvement on the present situation. Yet it is worth noting that during the period since the present minister first took charge of the agriculture portfolio, the percentage of long-term credit provided to agriculture by the Farm Credit Corporation has fallen from some 70 per cent to a mere 25 per cent. In other words, there has been a very significant erosion of the Farm Credit Corporation's role.
It is no use blaming the banks for the failure to keep the corporation supplied with funds. This legislation is overdue as a means of ensuring that the farmers are not forced into the hands of the banks for land purchases. We will have to ensure that the corporation is enabled by this bill to move back in the direction of a greater rate of participation in farm financing.
Bear in mind, Mr. Speaker, that farmers are not to blame for the high cost of land or for the ridiculously high cost of financing high-cost land. This is the fault of a high-spending government with too little concern for the role of investment in creating wealth, one that is responsible for putting us as a country in the position of having to pay unsupportable costs for investment in land or in any other kind of capital business plant. This bill helps to repair the damage caused farmers by government policies over some years that have made land very high in price and land financing next to impossible.
This leads me to a point I wish to emphasize strongly, Mr. Speaker. In my part of Ontario we have reached the point where the high cost of land and land financing is leading to a steady erosion of Canadian ownership of Canada's farm land. Among those who have stayed on the land, while many of their fellows have moved into our cities, there is a very strong commitment to retain the tradition of family-owned and operated farms. Canadians as a whole benefit enormously from the commitment of these people to a life of hard work, to
tremendous productivity, and to producing very high quality and inexpensive food.
The measure of the success of our farmers is that Canadians take their farming industry almost for granted. Indeed, Canadian farming is so efficient and productive that it could almost be taken for granted, if it were not for the tremendous burdens imposed on farmers in financing their operations.
It is so much in the interests of Canada to ensure that family farms survive, and that this pool of dedicated and productive talent is not dissipated, that we should make every effort possible to ensure that public policy does not undermine the family farm. And yet, that is what the policy of high interest rates is doing. In the past two years, when even the best and most well-established farmers have lost a good deal of the equity they had built up in their operations over a lifetime, our farmers have, in effect, been subsidizing the consumer.
It could be argued that farmers have to compete for a market like other businessmen, and most farmers do not object to the principle of a competitive market for many of their products. My point is that farmers are willing to compete to sell their product to the Canadian consumer, but the high cost of financing their operations reduces their capacity to compete.
It is not inefficiency in their production but inefficiency in this government's policy that has pushed farmers into the position of seeing their investment erode. For many of them, this erosion to date has simply meant that they own less of their operation than they did two years ago. For an increasing number, however, it means that they no longer own anything. The alarming bankruptcy figures are only the tip of the iceberg. Many who have not gone bankrupt have been forced to sell out just short of bankruptcy; otherwise, the bankruptcy figures would be far worse. Even as they are, the bankruptcy figures are a national shame and disgrace. They are evidence of a bankruptcy of policy, a bankruptcy that is made doubly evident by the attempt of last November's budget to take away the retirement funds which many of our farmers have been building toward, throughout their working careers, by scrimping, saving, making do with small disposable incomes so that they would have capital with which to retire. They do not have indexed pensions. Most of them do not even own a home when they leave the farm. All their retirement needs must be supplied from the sale of their farming operation. The government has shown its insensitivity toward this fact by regarding farmers as though they were profiteers.
As for young farmers, those who must supply the next generation of food producers, the government's policy has made it more and more difficult for the young to enter a farming career. Land costs are very high. I do not for a moment suggest that this government is solely responsible for the increase in the value of land during the past decade or more, but if land costs reflect the value of land directly, they are high because there is a high market value for land.
March 30, 1982

Given the demonstrated capacity of our farmers to use land efficiently, young or beginning farmers do not so much regret the high value of the land they wish to purchase, but they regret the high financing costs. Farm credit helps in many cases to make the difference between allowing a young farmer to make a career in farming or not. That is why this bill is a valuable piece of legislation in so far as it will make that difference, I hope, to a great many young farmers.
As I say, for two years there has been a growing apprehension in my part of Canada that our farm financing policy is not working well enough. Foreign ownership of our land has become more than a threat. It is an alarming and growing reality. In the community I represent, and very close to my own home, there are numbers of farms that have been bought by numbered companies. Certainly we are very suspicious that those numbered companies have been established for the sole purpose of buying agricultural land, particularly in the area that I represent. We know that is a fact that we can substantiate. It is becoming more evident all the time.
The reasons are not hard to see. Our young potential farmers have to borrow to buy land. They have to borrow at upwards of 16 per cent and often at a great deal more than that. Foreign capital looking for a safe haven is attracted to Canada's farm land for two reasons. One is that investment in land in a country with a peaceful constitutional history is a safe place to store wealth. Another is that our farm land is still a relatively good value compared to land in many European countries where urban sprawl has eaten up a good deal of the available land and where the demand for food by consumers is high because of the dense urban population.
What makes the purchase of our farm land particularly attractive to foreigners is that the high cost of farm financing here inevitably has a depressive effect upon the demand for land by Canadian purchasers. In Germany, for example, mortgage rates for house purchases are low, presently no more than about 10 per cent. Since there are no exchange controls preventing a German house owner from mortgaging his house and investing the proceeds here, it is clear that a German investor of ordinary means can compete for Canadian farm land at a rate of interest well below anything a young Canadian farmer could hope to get. I say this not by any means to criticize the German policy by which such low interest rates are maintained, but rather to point out at what a disadvantage our high interest rates place Canadians who wish to buy and farm our land.
What is true in the case of Germany is true in the case of other European countries as well. Perhaps the only thing that has kept back an even greater flood of foreign investment capital to buy our available land is that many foreigners have too little confidence in the ability of this government to maintain the value of our currency, to feel secure in investing here.
Paradoxically, then, we are vulnerable to foreign speculation in our land, but protected from even greater vulnerability by the perceived economic incompetence of this government. This is poor comfort to our young farmers.
Farm Loans
To put this problem of increasing foreign purchases of our land in perspective, let me mention the situation in a township which I know very well. In that township during the past year, foreign land ownership, according to reliable figures prepared by the Federation of Agriculture, have increased from 320 acres to more than 2,300 acres. In the adjoining township it has gone from zero to 1,100 acres. I think the latest statistics would even show an increase from that.
A little farther north in Bruce County, near the growing community that surrounds the Bruce nuclear power development, recent figures have shown that 2,000 acres in a single part of one township have recently been purchased by foreign investors. No one can blame farmers who sell to foreign investors. They are the customers who are able to meet the costs of the purchase. No one can blame young Canadian farmers either for not meeting the price; they are caught by the high interest rate policy of the government.
The vast majority of those who have land to sell would like to see their land pass into the hands of owners who live on the land and farm it. They do not care whether the owner is Canadian-born or a recent immigrant who intends to farm it and live on it; what they do care about is seeing the family farm survive. Heaven knows, we are all immigrants if we go back just a few generations. What farmers in this part of Canada, and I suspect elsewhere throughout Canada, do not want to see is absentee ownership. Neither do the municipal governments in the rural areas want to see an erosion of the social character of their township.
We found many townships and communities that had greater amounts of foreign ownership dominating those areas. Often the new buyers come in and remove the existing buildings, which results in a lower assessment value. There is not as good a tax structure base. There is also a problem when putting in field tile in municipal ditches, which we have to do in that part of Ontario. It is often difficult to find the proper owner to get permission. Co-operation has always existed in the communities throughout Ontario, and I am sure throughout Canada where the farmers have worked together. All of a sudden there are new problems to face. Everyone worked on line fences or property fences. This is something that is disappearing. We have had many families living on the farms helping to shape the local society ever since the land was settled. We hate to see that disappear as well.
Because this problem of foreign ownership has sprung up only within the past two or three years, it is apparent that the policy of high interest rates and inadequate funding for the Farm Credit Corporation is involved. It may well be that we should be looking now, not when the dikes have burst, at the radically harmful social and economic effects to Canada of a policy that allows our excellent and highly developed farm land to pass into foreign hands while the generation of Canadians who would become our food producers and would maintain a competitive efficiency we have come to take for granted are driven away from agriculture.
I should also mention that in some of our deliberations in committee I raised the matter of transferring existing farm

March 30, 1982
Farm Loans
credit mortgages. Section 16(f) of the act states that the mortgage given to secure the loan shall contain a covenant by the borrower that he will not use the proceeds for any purposes except those approved by the act, and that he will not dispose of the property without the consent of the corporation.
Clause 11(4) of Bill C-88 states that if the borrower sells the land without FCC permission, the loan becomes due immediately. This clause may make it easier for the Farm Credit Corporation to refuse to allow farm takeovers by foreigners, but it does not prohibit them from allowing foreigners to take over the existing Farm Credit Corporation mortgages. That is solely at the discretion of the Farm Credit Corporation. 1 would have felt more comfortable if it had been written into the act that the legislation would disallow the transfer of that mortgage. It is something we have to watch closely and give support to Farm Credit Corporation officials in cases of transfers of mortgages such as that. We in Parliament should labour to ensure that it never becomes the norm of Canadian agriculture, because if it does, our days of cheap, domestically-produced food are gone forever.
In saying that, I support this present bill. I want to note that the bill arrives on a scene that is rapidly changing. We can be glad that the Farm Credit Corporation is able to do the job it does, and we hope it will recover some of the ground it has lost through the underfunding to which I referred earlier.
But already, as we pass this bill into law, it is apparent that we have not solved the embarrassing problem of farm financing. A warning is being sounded daily by our farmers that we are not doing enough to ensure the continuance of the family farm in Canada and that we are permitting this most vital of all sectors to fall into the hands of those who do not have the same vital interest in feeding Canadians efficiently and cheaply as do those Canadians living on the land. It is not just young farmers who want to buy land who are sounding this warning. It is also being sounded by retiring farmers who are ready to sell their land, as well as municipal councillors who are watchful of the social character of the communities they serve. In accepting the present bill we should listen to the warning they are giving and recognize that the bill has not made us secure in the agricultural sector, but has merely made us less insecure.
The means of producing our food should never pass from the hands of Canadians into the hands of foreigners, or even of absentee owners. If this happened, there could come a day when it would be more expedient for foreign owners to withdraw our land from production than to keep it in production. Erosion of the family farm is an invitation to further land exchanges which lead to corporate farming. These are matters Parliament should address.
In welcoming this bill, as far as it goes, I look forward to seeing legislation along the lines we have suggested earlier, which even the Minister of Agriculture seemed to regard with approval when he said, earlier in debate, that in the future consideration could be given to providing special tax concessions on bonds sold by the Farm Credit Corporation or on
registered retirement saving funds placed with the corporation by retiring farmers.
We are in agreement, then, that what we have here is welcome legislation, but it is not enough. Let us hope that while the Farm Credit Corporation makes good use of the provisions in this bill, for the sake of Canadian agriculture the minister will concern himself with preparing further measures to ensure that agriculture for which he has responsibility remains Canadian agriculture.
In conclusion, I would just like to add that this bill is something long overdue. Agriculture needs this measure very badly. I have said before that agriculture needs the proper tools with which to work. Financing is one of those tools. Financing is like farm equipment. It does not matter what part of the country; we know that if machinery is not kept up to date, crops cannot be grown. I strongly believe that farm credit can and will be an important tool. We look forward to seeing this legislation in place very quickly and working for farmers.


Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Mr. Speaker, I am pleased to be able to take part in the debate today and to associate myself with the comments of my colleagues who have spoken earlier in the debate. Clearly, the legislation we are dealing with today will be of benefit to Canadian farmers. It is not our intention to delay passage of the bill, but I think it is important that we put some remarks on the record with regard to the crisis in Canadian agriculture today, and with regard to the fact that this bill and other measures which have been proposed by the government will not do enough to deal with the urgent situation confronting Canadian farmers.
As someone keenly interested in the problems of Canadian farmers, Mr. Speaker, I know you will appreciate the fact that a story that is told in my neck of the woods perhaps describes the situation of Canadian farmers today as graphically as anything else I could tell the House. They tell a story about two farmers in my constituency who live near each other. They bought tickets on a lottery and were hoping that one of them would have the good fortune to win a million dollars. One farmer turned to his neighbour and asked: "If you win the million dollars on the lottery, how do you intend to spend it? What will you do with it?" His neighbour's comment was: "Well, what I would do is sell my farm and move to Florida. I would put all the money in the bank and simply live on the interest and have happy days for the rest of my life." He turned to his friend and said, "Now, if you win the million dollars, what would you do?" His friend said: "Well, I kind of like farming. I think I would stay in farming until the million was gone." I do not think there is any more accurate way of describing the plight of Canadian farmers today than to repeat that story because notwithstanding repeated commitments by the government, and particularly by the Minister of Agriculture (Mr. Whelan), record numbers of Canadian farmers are being driven off the land.
Bill C-88 before us today will be helpful in terms of increasing the amount of capital available to Canadian farmers.
March 30, 1982

There is no opposition on this side of the House to the bill. It is a bill that we believe is necessary and should have been passed long ago. Indeed, the bill was in the works during the time of the Clark government, and the real question is why it has taken the Minister of Agriculture so long. He was restored to his office as Minister of Agriculture over two years ago, and the question Canadian farmers should be asking him is why he has been so slow in taking the step he is taking in the House today.
The most important element of the bill is that it would enable the Farm Credit Corporation to go outside the Consolidated Revenue Fund-outside the government-and seek funds in the private market in the hope of raising enough capital to enable it to lend money to a larger number of Canadian farmers.
No doubt the most critical issue facing Canadian agriculture today is the question of low returns for farmers and ever-escalating prices as they attempt to do their job. Certainly the most important component of those ever-increasing costs is the cost of financing. I do not think anyone who has attended a meeting of his local federation of agriculture or of any commodity group would be unaware of the fact that farmers in all parts of the country find themselves in a very serious cash bind. They find that even if they are capable of getting loans from their local banks or from some government agency, it is very difficult, no matter what commodity a farmer is in today, to even be able to pay the carrying charges on loans. This is why it is essential that instead of simply applying band aids to the problems facing Canadian farmers, the Minister of Agriculture should be interceding with his colleague, the Minister of Finance (Mr. MacEachen), to address the critical problem of interest rates in Canada.
What has been done by this government since the election in 1980 to bring down interest rates? What we have seen, what Canadian farmers have seen, what business people have seen and what home owners have seen is successive increases in interest rates and very little action taken by the government to insulate the weakest and poorest members of our society from the tremendous burden which has been inflicted on them by the government. This is why it is essential that the Minister of Agriculture, if he is to do his duty on behalf of Canadian farmers from one coast to the other, stops simply talking about the banks, trying to shift the blame on them and trying to blame other people for the government's high interest rate policy and, instead, deals directly with the Minister of Finance and insists that the Minister of Finance change policies which have been disastrous for Canadian farmers, just as they have been disastrous for home owners and small business people in this country. Until the government is prepared to come to grips with the consequences of its economic scorched-earth policies which are putting such an unfair burden on ordinary Canadians, there is no way this measure or other measures currently before the House will ensure that Canadian agriculture remains viable for the future.
The simple fact is that the true minister of agriculture in Canada is not the gentleman who often wears a green hat and who attends meetings of federations of agriculture around the
Farm Loans
country. The true minister of agriculture in Canada today is the Minister of Finance. He is the one who decides what the policies are which will directly affect Canadian farmers. He is the one who decides how much money will be allocated to the Farm Credit Corporation as authorized lending capital. He is the one who is responsible for interest rates in Canada. He is the one who makes decisions which affect the day to day lives of Canadian farmers, just as he is the one whose decisions affect the day to day lives of other Canadians in other sectors. I think Canadian farmers are beginning to weary of hearing the Minister of Agriculture attempt to shift the blame. The fact is that he is part of a cabinet which has consciously adopted a policy of high interest rates and is consciously attempting, by putting a burden on ordinary Canadians, to squeeze them very seriously.


Mr. Tousignant:: Mr. Speaker, I rise on a point of order. The hon. member is complaining about interest rates. Can he give us a solution? He is blaming the government for interest rates. What can he offer?


Henry Perrin Beatty: Mr. Speaker, I noticed you did not rule on whether that is a point of order. Clearly it is not, but I am delighted to respond to my colleague's question because there is a number of things which could be done by the government. No effort has been made by the government, particularly during the big-spending sixties and seventies, to control the federal deficit. A major component in the inflation we have today is a direct result of this government's high spending programs. If, as the Minister of Finance says, the reason for high interest rates today is that inflation is running at a record level-and it is, as a result of the minister's policies-then the most significant thing the government could have done was to get some control of its spending and bring the deficit under control. Instead, it has moved consistently in the other direction.
It was the Progressive Conservative government that proposed the concept of the small business development bond which was designed to give some relief to Canadian farmers and small business people so they would have a buffer to ease the burden of high interest rates. In the budget of the Minister of Finance, brought down the day after Remembrance Day last November, we find that he is actually counting on the fact that the Small Business Development Bond will cost the Canadian government less money this year than last year. In other words, the terms for lending are more restrictive this year than they were last year. An applicant will have to demonstrate that he is virtually insolvent before he is eligible for financing under the program. I will admit that the Minister of Agriculture, the Minister of Finance and their Liberal colleagues are doing everything they can to ensure that small business people and farmers are virtually insolvent. But that is not the way to deal with their problems, Mr. Speaker.
I have illustrated two ways in which the government could have acted, Mr. Speaker. Unless it is prepared to come to grips

March 30, 1982
Farm Loans
with the whole question of the government deficit and inflation, which is caused by federal government spending, there is no way that adequate relief will be found for farmers, particularly with the palliatives that have been put before parliament today. Bill C-88 will not provide the required relief. I suggest that no member on the government side could in honesty claim that this bill will bring an end to farm bankruptcies.
Last year alone there were 261 farm bankruptcies in the country, 140 of them in the province of Ontario. Anyone who has had the opportunity of meeting with farmers in any part of the country knows that under the tenure of the government, since the last election, the problems facing them have become more and more acute. The threats of bankruptcies have increased dramatically. The problems that young farmers face who are trying to get into farming and continue with the family farm, become more and more insurmountable as each day passes.
For the government to try to shift the blame to someone else by saying that it is held hostage to international events and that it has nothing to do with the inflation rate in Canada which is higher than that in the United States, or that it has nothing to do with the interest rates it is directly responsible for, is doing a disservice to Canadians.
If we are to attack the economic problems facing farmers or any other Canadian, the first thing we must do is deal honestly with the situation and admit that the federal government's policies have been wrong-headed. A policy designed to reduce inflation by jacking up interest rates, is contradictory.
When the cost of inventory for a business increases, do we seriously, expect that business to sell its goods for less this year than it did last year? Naturally, whenever possible, it will attempt to increase the selling price in order to cover cost. And if the costs to working people increase, do we expect unions to settle for less money next year than they do this year? Clearly the incentive will be for them to increase their demands.
Far from being a cure for inflation in Canada today, high interest rates are a serious contributing factor and are a tremendous burden on ordinary Canadians.
On February 23, 1982, the Kitchener-Waterloo Record ran an article on the front page with the heading "Whelan vows $1 billion in aid-" This occurred at the closed meeting with Canadian farmers. The second paragraph of the article reads as follows:
But Whelan reportedly also told the farm leaders that if they quoted him to the press, he will deny it.
Indeed he has, Mr. Speaker. It is not good enough for the Minister of Agriculture to go around the country saying one thing to farmers and then come back here and support the government's high interest rate policies. It is not good enough for him to continue to tell one story to Canadian farmers and support policies which have been very damaging to farmers and which affect their ability to stay in business.
When my friend across the way bootlegged in a question under the guise of a point of order he asked me what could be done by the government or if anything could be done to
provide relief to Canadian farmers. I have mentioned one thing, Mr. Speaker. We have to get inflation under control. Interest rates must be brought down. The government washes its hands of responsibility but it is directly reponsible, Mr. Speaker, and must be held accountable for the consequences of its policies.
There is the matter of the small business bond. The government policies in this respect are far too restrictive. Each member can ask how many farmers he knows who have been able to qualify for the bond or how many small businessmen have been able to qualify for it this year. The government is tightening up on eligibility. People now have to carry a much heavier burden and they are doing so without the assistance they so desperately need.
Another element of the budget which is obviously affecting farmers is the IAAC, the Income Averaging Annuity Contract. For the family farmer, his pension is in the land. But the Minister of Finance abolished the IAAC provision for some unspecified income-averaging provision which has still to be spelled out. There are serious doubts about the tax treatment of the farmer who is forced to sell the family farm.
There is the matter of capital gains tax on the family farm. In its budget the Progressive Conservative government provided for capital gains tax relief for family farmers. What happened to that since the 1980 election? Have members of the Liberal caucus tried to stress to the Minister of Finance- the real minister of agriculture today-that it is time some relief was given to bona fide family farmers?
All Canadians are desperately affected by the health and vitality of Canadian agriculture, Mr. Speaker. I cannot walk through any community in my constituency without recognizing that when farmers are doing well, people in the towns are also doing well. If we are serious about redressing our trade imbalance, if we are serious about ensuring that we are not held hostage in the future with food the way we have been with oil in the past, then it is essential that the family farm be kept alive. To do that we must ensure fair prices for the farmer. We must ensure that the price he has to pay for goods and services needed to conduct his business, is fair. We have to ensure that interest rates do not become a crushing burden which makes it impossible for him to carry on. We must provide incentives to the Canadian family farmer to keep him on the land and for young farmers to come back to the business and remain in it.
There seems to be a philosophy within the Department of Finance that all they need to do in times of high inflation is to turn the screws on ordinary Canadians-to slow down the economy, put a few thousand people out of jobs, and that as time improves they can turn the screw the other way. People will then be happy, businesses will be open, productivity will increase and we will be back where we were before. That simply is not the case, Mr. Speaker.
If a family farmer of 45 years of age who has experience in farming, knows his business and is at the peak of his productivity, is forced off the land today and into the city to seek a job, does the government really seriously believe that even if
March 30, 1982

the economy recovers within two or three years, he is going to move back to the farm and start all over again? Surely anyone concerned with the problems facing agriculture today must admit that the philosophy that seems to be present in the Department of Finance is not very sound in reality. It would be helpful if the bureaucrats who devise the policies that farmers have to live with could spend some time in rural Canada and have the opportunity to talk to people there about the effect of those policies. Ordinary Canadians are suffering at the hands of people who simply do not understand their problems or are indifferent to the consequences of the policies they promote.
We support this measure, Mr. Speaker, because any relief for Canadian farmers and anything that can be done to increase the amount of capital available from the Farm Credit Corporation, is a positive move. But let us not kid ourselves. This measure is only a first step. It will help to relieve some of the burden created by government policy, but it does not address the root cause of the problems. Until the Minister of Finance is prepared to recognize that the policies he has been following have been dangerous to ordinary Canadians, until he is prepared to change those policies and to provide some relief for ordinary people who are carrying a burden too heavy for many of them to bear, these problems will continue for farmers and for people in other areas.
I call upon the Minister of Agriculture to do his duty on behalf of Canadian farmers by going to the Minister of Finance and saying that it is time for those policies to be changed. If he would do that, the Minister of Agriculture would serve Canadian farmers better than anything else he has done to date.


Mr. Gordon Taylor (Bow River):: Mr. Speaker, I want to say a few words about this bill. The government has put some good things and some bad things in the bill. I want to compare it with a road. Let us assume that the government is trying to build a good road. We will call it the "agricultural road", a road which will encourage farmers to produce, to invest their moneys, to remain on farms, to expand and to pass on the assets to their children. This would be an excellent agricultural road.
I would like to deal with some of the good things in the bill and then deal with some of the government roadblocks which are hurting the farmers of the country and undoing many of the good things it is trying to do. When we talk about checks and balances, we must remember that in any particular way of life they are important, but if they do not give something that is equal or good, if one is far heavier than the other, we end up with a very bad picture. I see in front of us a road which is badly filled with roadblocks.


An hon. Member:: What about potholes?


Gordon Edward Taylor: "Potholes" is not a strong enough word. Some of them are almost wells. Vehicles will almost disappear if they are driven on this road. It is similar to removing a bridge with the vehicles going right into the ravine.
One good thing in the bill is that the government is providing the Farm Credit Corporation with the ability to borrow
Farm Loans
money. The FCC has built up a very credible group of men and women. I do not know any of the women, but I know the men are very credible, and if there are women working in the FCC I assume they are credible as well. They have built up experience and are highly respected in the communities in which they are working. The move in the bill to give the corporation authority to borrow from other sources, not simply depend upon taxation or government grants to do its job, is a real advance. A similar board in the United States has had such authority for quite a long time. It has built up expertise and has been able to borrow and lend at very reasonable rates. This is one good thing about the bill, but there is a little roadblock.
Just when one starts to become enthusiastic about the borrowing, one finds that it must be approved by the minister of Finance (Mr. MacEachen). Will the operations of these credible people, who find that they are able to borrow, be nullified by the Minister of Agriculture (Mr. Whelan)? The Minister of Agriculture is in one place, boards are all over the country. I question this roadblock; that any borrowing is subject to the approval of the minister. It may well be that this will undo all the good the borrowing will do.
A five-member board to work out FCC policy is reasonable. It will now be increased in size to seven members. Why must all boards in the country be enlarged? No wonder people talk about bureaucrats. Is there any reason that a five-member board could not carry out the same work as would a seven-member board? This is simply another method of providing more jobs and less work, and this is what many people on the land think. Farmers who work the land are not able to hire people whenever they feel like it. They must look at their income and expenditures. They have to do a lot of extra work themselves.
How different it is when we talk about boards, particularly those of the federal government. We see this in almost every department-enlarging boards all the time with more bureaucrats. There is no increase in the amount of work which is ongoing. The board is not doing any more work today than it did last year, and tomorrow it will not do any more than today. Even if it is, its members should be able to expand and increase their capacity to do more work, rather than simply hiring more people every time a little more work comes along. The increase in the membership of the board is another roadblock.
There are other severe roadblocks the government is putting in the way of farmers. The hon. member for Wellington-Dufferin-Simcoe (Mr. Beatty) mentioned some of them. For example, he mentioned capital gains. A few weeks ago there was a debate in the House during which we requested the government to give consideration to eliminating capital gains on cultivated land to keep down the price of food, but the government refused. Rather than eliminating capital gains tax on farm land, it increased this tax and made it more burdensome.

March 30, 1982
Farm Loans
The first appearance of the budget indicated that if a farmer sold land on an instalment basis for $200,000 and he only collected $25,000, he would pay capital gains on the whole $200,000. How ridiculous can this be! How could the Minister of Finance or the Minister of Agriculture bring in a proposition which means farmers must pay capital gains on money they have not even received or may never receive? They are expected to go out and borrow money at today's rate of interest to pay capital gains on land, because they are selling it, yet only collecting part of the capital. 1 want to expand further on this matter at eight o'clock.
[ Translation]


Mr. Deputy Speaker:: It being six o'clock, I do now leave the chair until eight o'clock this evening.
At 6 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
The Acting Speaker (Mr. Ethier):: Order, please. When the House rose at six o'clock the hon. member for Bow River (Mr. Taylor) had the floor.


Gordon Edward Taylor: Mr. Speaker, at the six o'clock adjournment I had just started to speak about capital gains taxes as they affect our farmers. In my view, capital gains tax is very unfair. A farmer or a businessman whose only pension is his land or his business, pays taxes on his land or his business all his life. When a farmer or a businessman reaches retirement age and wants to use his pension-his land or business which is his nest egg-what does the government do? It takes another chunk of it in capital gains tax. This form of taxation is one of the grievances that many farmers have. Farmers are not in favour of capital gains taxes. The capital gains taxes that are levied now by government are more unfair than they have been for a number of years. When a farmer comes to receive his pension-his land-often he is only able to sell it on the instalment plan no matter whether he sells his farm to a son, to a daughter, or to someone outside the family. Seldom can a farmer sell a family farm to a large corporation, and farmers do not want to do this because they want to retain their family farms. Consequently, most often a farmer has to sell his farm on the instalment plan.
Take for instance a farm that has been brought up to a value of $200,000. Selling that farm on an instalment plan means that the farmer accepts a very small amount of that sum over a period of years. Perhaps he is given a down payment of $10,000 but the original budget said he would have to pay capital gains tax on the full $200,000. That is a most unfair proposition. After some discussion and representations against this proposition, the minister told us in December that if the farm was being sold to the farmer's family the payments could be spread over ten years, but if the farm was sold to an outsider, the payments would be spread over five years. But the plan is still most unfair. It takes the pension right out of the
farmer's pocket. That was the pension he built up in order to have a decent standard of living for the rest of his life and to have enough money to look after his family. Instead, what we are doing is saying to the farmer, "You have been working building up a nest egg but now the government will grab up a chunk of it." That means that many of our farmers have been unable to complete the deal they started prior to November 12. They cannot live on the balance that would be left. Would any hon. member here upon retirement like it if the government suddenly were to tax a big chunk of his or her pension? If that were done it would put many people in this House in a precarious financial position.
But how much more does this measure affect our farmers and our businessmen whose only pension and only hope of retirement is his land or business? I suggest that we do unto others as we would like others do unto us. We are not doing that in this bill. Our farmers are agonizing over this situation and are being aggravated by it. I have received letters expressing this agony and letters that would make you cry. Farmers are saying that this budget has ruined their hopes. The things they have worked for for 50 years have now gone down the drain. Their wives and family are going to suffer as well as themselves. Others have said: now I cannot sell my land, or expand my business, because of these capital gains taxes. But this government still clings to capital gains tax. Not only that, it has even done away with the once in a lifetime exemption. The government wants every cent it can get, regardless of whether that drives our farmers and businessmen to the poorhouse. It is not fair, and I tell the people it is not fair. The people across this country will support the fact that the farmer's pension is his land. We are now digging into those pensions and interfering with their retirement.
The hon. member for Temiscamingue (Mr. Tousignant) asked the minister before the adjournment how he would lower interest rates. Well, I do not think it is so difficult. We now have an interest rate of 16.75 per cent. That is better than 24 per cent or 25 per cent, certainly, but it is still too high. I want to suggest that the practice of the Farm Credit Corporation making money on farm loans is not fair. When you make a loan to a business, it adds the cost to its product and the consumer pays. When you make a loan to a farmer, the farmer cannot add the cost to his product. It has to come out of his margin of profit and that margin is sometimes pretty low or non-existent. That is why there has been so many farm bankruptcies. We keep taking and taking from the farmer and it is getting to the point where there is just nothing left. He cannot pass these costs on like other people and for that reason the government would be justified in having a different policy on loans to farmers.


Some hon. Members:: Hear, hear!


Gordon Edward Taylor: It could very well say it does not have to make money in this way. This money belongs to the taxpayer, and
March 30, 1982

certainly the taxpayer will get the benefit if we keep the rate reasonably low so that the cost of food will remain stable.
The hon. member for Lethbridge-Foothills (Mr. Thacker) urged the government a few months ago not to apply capital gains tax to cultivated land, but the government said there was no difference. There is a difference and it should be recognized. The Alberta government recognized it. It cut the rate for farm loans to 12 per cent, and 6 per cent for new farmers. If the Alberta government can do it, why can the federal government not do it? If the federal government can make low interest or no-interest loans to countries all over the world; if it can write off millions of dollars in such loans, surely it can help Canadian farmers produce food at a reasonable price.


Some hon. Members:: Hear, hear!


Gordon Edward Taylor: That is something members opposite better take cognizance of, because farmers are getting angry and they are not going to stand for this kind of thing very much longer.
This government has heaped abuse and abuse on farmers. Most farmers require their guns to protect their livestock, their chickens, their turkeys. Some of them have guns for enjoyment; they work long hours and need some relaxation. But our gun laws today are aggravating farmers. No one objects to gun laws if they are going to stop criminals, but our gun laws are not doing that. A lot of murders today are commited with the use of knives, hatchets and clubs. We do not put up any laws against them, but we say you cannot have guns, or you have to register them. If you have a revolver you cannot take it in your vehicle to go to target practice without written permission from the RCMP.
The administration of these gun laws has become a millstone around the necks of the RCMP and those who want to use guns for recreation purposes. It is time the government started to look at the use of guns. The bill introduced by the hon. member for Notre-Dame-De-Grace-Lachine East (Mr. Allmand) is a bad bill. Even though it is not as bad as some articles have said, it is still bad when you start putting more and more restrictions on the proper use of firearms. That is another grievance hanging around the necks of farmers, and they are getting fed up with it.
Another grievance relates to metrication. We have made our farmers foreigners in their own country. The hon. members can smile if they like; go out and visit some farm homes and find out for yourselves. There was no need to apply metrication to farm produce. For years the Canadian Wheat Board did the conversion when necessary right at the port. There was no difficulty. The farmers knew what they were selling, how much of it and what they should get for it. Then we introduced a new language, which they do not understand, and which made them, as one farmer said to me, foreigners in their own country. He was born here, lived here all his life, and now he is a foreigner. He cannot understand the weights and measures, the temperatures, and does not know whether he is being paid properly or not.


Walter David Baker: Even the cows are confused.
Farm Loans


Gordon Edward Taylor: This government, without the consent of Parliament, has gone ahead and imposed metric on the people of Canada. This is another totalitarian act which the farmers and a lot of other people do not appreciate. The government would be very wise to abolish metric and say to people, you can use metric if you want to, or you can use the imperial measurement. It should not tell them what they have to do. The government is spending thousands, perhaps millions, to tell people what is good for them, why they should use metric. Every time people see that on television they feel like kicking the TV out of the house. They are so angry with this government-


Walter David Baker: Even the cows are angry.


Gordon Edward Taylor: You are building up anger across the country item by item. When you do that, you will eventually reach the boiling point, and this government had better be watching for that boiling point.
With regard to language, why must we have packages marked in two languages in western Canada? There is no reason at all. The people from Quebec will understand how the people of Alsace-Lorraine felt when the Germans marched in.
I remember as a young boy reading that story over and over and almost weeping for those people because they were having their last lesson in their own language. Well, we better watch that in this country, too. Let us have freedom of choice. Let us encourage the use of both languages, but let us stop imposing it on people.


The Acting Speaker (Mr. Ethier):: I regret to interrupt the hon. member, but the Chair wishes to be clear. Are we discussing Bill C-88, an act respecting loans to farmers? That is what I thought was before the House.


Walter David Baker: He was just clearing his throat.


The Acting Speaker (Mr. Ethier):: I would like the hon. member to tell me how his remarks relate to the matter under discussion.


Gordon Edward Taylor: Mr. Speaker, I am speaking on this bill, and if you would visit some farms you would know how close this is to the hearts of farmers. One of the reasons they have to pay more taxes and borrow more money is because of these other programs this government imposes on them.


Some hon. Members:: Hear, hear!


Gordon Edward Taylor: The farmers are reaching a point where they are getting pretty fed up with the things this government is doing. Just consider the IAACs. For years farmers were able to sell their land on the instalment plan, and then invest the money in IACCs and live off the interest. The purchaser was happy because he paid by instalments. The farmer and his wife were happy because they could live decently on the pension they had built up over the years, and then this government says, do away with IAACs.

March 30, 1982
Farm Loans


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


Gordon Edward Taylor: Mr. Speaker, on a point of order. I started at 5.50 p.m.; that is only 30 minutes.


The Acting Speaker (Mr. Ethier):: I can recognize the hon. member on a point on order, but if it is to debate the time allotted to him, his allotted time has expired according to the rules. The hon. member for Brant.


Gordon Edward Taylor: On a point of order, Mr. Speaker, I wanted to say that I started at ten minutes to six, and have only spoken for 30 minutes.


The Acting Speaker (Mr. Ethier):: The hon. member was entitled to 20 minutes. He spoke for ten minutes before the supper break and ten minutes after the supper break, which is a total of 20 minutes. As a matter of fact, the Chair gave the hon. member an extra two minutes. The hon. member for Brant.


Gordon Edward Taylor: On a point of order. Look up your rules.


The Acting Speaker (Mr. Ethier):: Order. At the request of the hon. member, I will read Standing Order 75(9), which states:
When debate is permitted, no member shall speak more than once or longer than 20 minutes during proceedings on any amendment at that stage, except that the Prime Minister, the Leader of the Opposition, a minister of the Crown or other member sponsoring a bill and the member proposing an amendment, may speak for not more than 40 minutes.
I did not hear the hon. member proposing an amendment. The hon. member is not the Prime Minister, is not the Leader of the Opposition and is not a minister of the Crown. The hon. member was allotted 20 minutes.
The hon. member for Brant.


Gordon Edward Taylor: On a point of order, Mr. Speaker. You are reading the Standing Order concerning the report stage. We are at third reading of this bill.


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


Gordon Edward Taylor: Ask the Table officer. Forty minutes are allotted on third reading.


The Acting Speaker (Mr. Ethier):: Order, please. We are at third reading, and there is no debate on this here. I think the hon. member is again debating. I have just read. Standing Order 75(9), which very clearly states that hon. members are allotted 20 minutes to participate in debate with the exception of those I have mentioned.


Walter David Baker: Mr. Speaker, I was wondering whether we could consult with the Table. I did, and I believe I heard correctly that we are at third reading. I believe the clerk at the table did indicate that. If that is the case, then the hon. member's time has not expired.


Gordon Edward Taylor: We are on third reading of the bill.


The Acting Speaker (Mr. Ethier):: We always stand to be corrected and I have been corrected at this time. I sought information before, I received information and we were referring to Standing Order 75(9). However, we are on third reading and the hon. member is allowed 40 minutes. I hope he will pardon me for interrupting and I would confirm he has eight minutes left.


Some hon. Members:: Hear, hear!


Gordon Edward Taylor: Mr. Speaker, I was referring to the elimination of IAACs, something which the farmers used for many years. They would sell their land, which they had built up over many years, by the instalment plan and live off the interest of the IAACs. What did this government do? It eliminated the IAACs. The farmers cannot use this benefit any longer. This is another grievance they have.
Why is this government so deliberately trying to hurt the farmers of this country, not only the western farmers, but also the Ontario, maritime and Quebec farmers? They are all being hurt by this type of legislation. The farmers want to put their investments into RRSPs, but the government even cuts that down and tells them to put their investments into forward averaging. Forward averaging is not at all satisfactory. In the first place, the farmers must put in the whole sum. Second, they may never get it back. They may live long enough, but they may not. The government offers them something as if it were something, but it is not a substitute for the IAACs and RRSPs.
The government has made a mess of the Small Business Development Bond. By the way, when it first came out it was a help to people. It enabled people to get financing at a reasonable rate. However, farmers and businessmen were doing too well on that, so what did the government do? It said they could not have it unless they were down and out, completely broke, and then they could apply for the Small Business Development Bond.
We could go on and on concerning the burdens the government has built up and heaped upon the shoulders of the farmers and businessmen. It is certainly a burden on the farmers who work the land. We should look at capital cost allowance, recognized for years as an expense of business. What did the government do? It said, no, they may only claim half the first year. Has any hon. member opposite ever had to buy a combine? One does not buy a combine in January, February or May of any year. One buys a combine in the fall when it is needed to cut the wheat. The government cuts the allowance in half and says the farmer has only had it for three months that year. Where is the ordinary common sense of this government? One buys a combine in the fall because it is used in the fall. Then it sits there for several months. The government has said that the farmers and businessmen may only have half the capital cost allowance. Let me tell hon. members that this not only hurts the farmers, it also hurts the industries in Ontario and Quebec. I can name-
March 30, 1982


Walter David Baker: And New Brunswick.


Gordon Edward Taylor: -a number of dealers who cancelled their orders for farm equipment this last fall after the budget came down. The farmers are not going to buy this plan. They will put up with the old equipment. It will be more costly, perhaps, and they will not be able to do as much work. The government is imposing that penalty on them because it cuts the capital cost allowance in half.
The government is so money-hungry it is taking money out of the pockets of the farmers, the businessmen and the old age pensioners. The government tells the pensioners that it will give them extra money through the supplementary allowance, but it takes three times as much away in the cost of fuel and energy.
This government is making a complete mess of this country. It is affecting not only the farmers but also the businessmen. The government has no common sense about what is good. It is not trying to reflect the thinking of the people. All it is doing is governing, governing, governing, and grabbing, grabbing, grabbing! The government wants every cent it can get. It does not matter how much it hurts the people who are paying the money. It will have its pound of flesh. The government might learn, as Shakespeare mentioned, that when one takes that pound of flesh, one may also be taking the blood of the country. That is exactly what the government is doing today. It is time it awakened and started to use some common sense in some of these programs. The farmers are becoming more and more angry. I tell hon. members that it will reach the boiling point if this government does not wake up pretty soon.


Some hon. Members:: Hear, hear!


Mr. Derek Blackburn (Brant):: Mr. Speaker, I usually say it is a pleasure for me to speak on any particular bill in this House. However, when it comes to a bill such as Bill C-88, which deals with loans to farmers, I cannot honestly say it is a pleasure, because what we are really referring to in this bill is a pretty sad story right across our country. It refers to a virtually neglected group within our society. I am not saying that in any cheap way to gain sympathy outside this chamber or among the farmers in my constituency.
I can recall when I first moved to Brant county in 1959 that there were approximately 2,300 farmers. Today we have about 800. Admittedly, back in the 1960s there were some farmers who either did not have the gumption or the intelligence, perhaps, or the will, or the money, or the inclination to hang in, hold on, expand, modernize and so on in order to keep up with changing conditions. Therefore, it was natural that some would fall by the wayside. It was natural that some would give up in the early sixties and the mid-sixties. It was natural that some farmers' sons and daughters would move off the farms. When there is such a reduction in the total number of farmers in one relatively small but very rich farming area of southern Ontario, a reduction from 2,300 to approximately 800 farmers, it obviously must mean something other than just a lack of will or determination.
Farm Loans
When we speak about Bill C-88, we are speaking about the plight of many farmers today. In effect, the only problem facing them today is the problem of financing their operation because of the lack of sufficient cash flow.
There is an even worse situation or even worse problem today when it is virtually impossible for many farmers to get credit at all. They simply cannot afford to borrow any more. The cash flow, in other words, has become virtually a trickle and in many cases has dried up.
At the same time, Mr. Speaker, we have a situation in which their operating costs are soaring, due to increased energy costs, such as gasoline and diesel fuel, heating costs, drying costs, the cost of fertilizer, and the rising cost of farm machinery. They cannot borrow money; they cannot afford the carrying charges.
Because they cannot afford farm machinery, this is having a very serious adverse effect on the agricultural implement industry, whose Canadian centre, one might say, is also in my constituency in the city of Brantford. Massey-Ferguson and White Farm are both experiencing difficulty in selling their products. The reason they cannot sell combines, at $ 120,000 or $130,000, is that farmers cannot afford to buy on borrowed money. That is another major problem.
In addition, Mr. Speaker, beef producers, hog producers, and cash croppers specifically, are all in trouble. Commodity prices are lower than they were two years ago. All of this is adding to their woes. Then we have Bill C-88 which is a bill to allow the Farm Credit Corporation to seek funding from sources in addition to the Consolidated Revenue Fund. I would not care, if this bill gave the Farm Credit Corporation the right to allow the corporation to use funds from every financial institution in the country-$100 million, $500 million, $1 billion, it makes no difference-the problem is that farmers cannot afford 16.75 per cent interest. Many farmers have had to borrow from banks at higher interest rates than that.
So we get back to the budget, we get back to the No. 1 problem of this country, high interest rates. You can put $100 million, $500 million or $1 billion into the fund, but as long as you are artificially forcing these rates higher and higher- 16.75 per cent is about as high as farm credit has been, I believe, and it may go even higher-it is not going to help the farmer who is carrying charges or a debt load on an annual basis in my constituency that may go as high as $50,000 or $60,000 just to pay interest on money borrowed.
Last summer I visited several farmers, most of them young farmers, who back in the 1970s had been encouraged by both government and the banks to go out and borrow, borrow, borrow in order to expand and modernize. I suppose it makes sense. In order to keep up with technological change in the farming industry, farmers had to spend more money and to spend more money they had to borrow. The banks were throwing it at them. Banks managers never went near the farm, never did profit appraisals. They said: "Here is the money at 8 per cent or 9 per cent, take $200,000, take

March 30, 1982
Farm Loans
$300,000." Now, of course, with the interest rates the banks are charging, from 17 per cent to 19 per cent, the farmers, most of whom are young, ambitious and aggressive, are being forced out of business or forced into a nervous breakdown or a severe depression because they cannot see their way out of this tunnel.
One farmer not far from my city of Brantford told me that the Farm Credit Corporation officer told him: "Look, you have two farms, put the two together and sell them, they are worth about $1.2 million." The farmer said: "Fine, you get me a buyer and I will sell tomorrow." Who can buy a $1.2 million farm operation if, in addition to the amount of the market value of the farm, you are borrowing money at 16 per cent to 18 per cent interest?
Here we are, Mr. Speaker, in a very real dilemma. It does not matter how much money the Farm Credit Corporation can provide, if the interest rates are maintained at a very high level, farmers will not derive any benefit at all. They may keep the wolf from the door for a few more months, they may keep the bailiff away for a few more months, but in the long run the farmers are going deeper and deeper into debt.
Let us look at some of these statistics, Mr. Speaker, with respect to the financial crunch that farmers find themselves in. One could argue that most small businesses today are in trouble; but let us face it, the farmer cannot pass on those added costs as can most other businesses. Most farmers today operate under marketing boards and marketing agencies where prices are pretty well set well ahead, and it is pretty difficult to tack on the added costs of either a mortgage or simply a bank loan for machinery.
Let us look at some of the farm net incomes. In 1973 net farm income was $3.3 billion. In 1980 it was $3.25 billion but in 1973 dollars that was approximately $1.74 billion. In 1981 it was $4 billion net farm income. In 1982 the estimated farm income is going to drop to $3.4 billion. If we read that figure in terms of 1973 dollars the net farm income will be $3.3 billion. We had net farm income, taking into consideration the inflationary figure, of $1.45 billion in 1981. That is a pretty bad picture for the farm industry. The average farm income in 1973 was $12,692 per farm. In 1980, if we look at it in terms of 1973 figures, we get an average or net income per farm of $5,576 in 1973 dollars.
I do not know of any other industry in this country, Mr. Speaker, that is getting so far behind. On the one hand you have very high interest rates; then in the centre you have falling prices in beef, in hogs, in commodities, in most grains, and on the other hand, you have inflation eating away at what income a farmer can get. So, in an inflationary sense, you had an average farm income in 1980 of $5,576 per farm in terms of 1973 dollars.
I do not know how much longer the good farmers of this country, the aggressive farmers, the productive farmers, can tolerate this kind of adversity on a day to day basis. Farmers generally, by nature, are optimists. If they have a bad year as a result of the weather, they always say that the next year will be better, and they are always hoping. Governments successively have taken farmers for granted because they know
farmers like the rural way of life, enjoy their work, hard as it is, with long hours, and, nonetheless, still prefer it to working in a factory, running a business in a city, being a professional or living in a large metropolis. Successive governments have assumed that no matter how bad conditions were on the back concession, the people would stay. You cannot live on love. You cannot live in the past. You cannot remain a farmer simply because you like the fresh air on the back concession. We have reached the point where it is financially impossible for a growing number of farmers to remain on the farm. The banks are either foreclosing or putting such pressure on the farmers as to make their lives miserable. Many are going bankrupt.
Ontario, for example, has been hard hit. Last year in the province of Ontario there were 27 farmers who went out of business. That may not sound like a lot when looking at the total number, but 27 farms going belly-up represents millions of dollars. More than that, it represents back-breaking years of hard work and sweat, all for a dream, an ideal; not a rich life but a comfortable one. Those hopes and dreams are down the tube, not because the farmers were lazy or inefficient, it is not because there is not a market out there. It is because the government has deliberately, through the Governor of the Bank of Canada, set interest rates at such a high level they cannot borrow. There are no further extensions on their line of credit and their cash flow is drying up. This is indeed a very serious matter.
Farm incomes in 1982 are projected to decline by 21 per cent over 1981. Interest charges have tripled since 1977. In 1981, farmers paid out more in interest charges than their projected income for 1982. Credit is now almost as big an item of overhead as feed. The feed goes for a useful purpose. The credit goes for two-legged hogs-the bankers.
My party does not see this bill as something to pin our hopes on. The private money market is very high at present. The minister has not brought in any changes to the Bank Act or Income Tax Act that would allow the Farm Credit Corporation to offer a tax break to people investing in FCC/agri-bonds. However, I would urge him to press the cabinet for such a change because agriculture desperately needs more low-cost credit.
This government doled out a paltry $45 million in low-interest loans through the Farm Credit Corporation. Part of this bill is to authorize those loans. It was a good idea, but much more money is needed if we are to rescue the many deserving young farmers who invested money in good faith and now see those investments going down the drain. We need these farmers desperately. The workers in my riding who produce farm machinery need these farmers. The many hungry people around the world need these farmers.
It has always bothered me when we discuss major farm problems that one third of the world population goes to bed hungry. Indeed, one third of the world population is starving.
March 30, 1982

This country has fantastic resources. Farming is certainly one of them. We have the expertise, the know-how and the land. We know how to look after that land and make it produce. We have a farm force in this country second to none in the world in intelligence, integrity, education, skills, know-how and determination. We can manufacture all the farm implements we need right here, yet last year we had a net imbalance in agricultural products to the tune of $1.34 billion. That is another mess which the Liberal government has thrown at us.
We have a small population. We can produce far more than we do. We could export far more. We could even give away a great deal of our farm produce if the government paid the farmers a decent price for their investment, hard work and expertise.
What is the government doing? It is doing everything it can to dissuade young people from farming. The government is doing everything it can to depress not only economically, but emotionally those farmers who are struggling to keep their heads above water. Through its high interest rate policy, the government is doing everything it can to make farming almost an impossibility.
What young person today 18 or 19 years of age who was born on a farm would think of buying out his father for half a million or a million dollars when he knows he can work his whole lifetime and never own that property, unlike his father and grandfather who had that sense of accomplishment after years of hard work? Then we have the problem of farmers who at the end of their working life, because of the changes in the budget with respect to the IAACs, are not able to retire as comfortably as they would like.
Farmers do not want charity. They do not want any special treatment. What they want from this government is some consideration for the very severe economic squeeze in which they now find themselves. They are asking for decent prices and interest rates. In fact, the entire country is in trouble as a result of the high interest rate policy which is driving farmers off the land.
At the present time, beef and pork producers are in the most trouble with cash crop farmers not far behind. We have heard a lot of talk from the minister about having a new hog stabilization plan in place by April 1. What do we see? We see nothing, and April 1 is just 48 hours away.
We have heard a lot of talk from the minister about a new plan for beef producers and maybe a new marketing board system. What are the results so far-nothing. We are watching an entire industry in deep trouble and here we are debating a bill that will help just a little when a lot of help is required. The over-all interest rate policy of the government must be changed, but the Minister of Agriculture (Mr. Whelan) must do more to provide the tools to agriculture so that farmers can help themselves.
I would like to quote a few more statistics. Let us look at the return on labour, management and equity as a percentage of equity. We have to look at farms today as a small business or industry. In 1971, the percentage was 6.5 per cent. It rose to an all-time high of 10.9 per cent in 1974. In 1980 it had fallen
Farm Loans
to 4 per cent. This is one of the few, if not the major industry in this country that is going down successively year by year. It is not even holding its own.
Let us look at realized net income as a percentage of total cash receipts. In 1971 it was 28 per cent. In 1974 it rose to 40 per cent. In 1981 it was down to 22 per cent, and the projection for 1982 is 18 per cent. We can see that the battle farmers are fighting is downhill all the way.
Is it any wonder that many are voluntarily giving up farming? Is it any wonder that there are more and more bankruptcies every year? Is it any wonder that farmers' young sons and daughters do not want anything to do with farming? They would rather go to the city where hopefully they can find steady jobs. What will happen to our rural way of life? Just because the banks, thanks to this government, want to gouge farmers and take the last pound of flesh and the last drop of blood from them, will we lose a whole way of life? Will we lose half of those 250,000 farmers?
I started my speech by saying that when I moved to Brant county in southern Ontario in 1959, there were 2,300 farmers. That is not bush country. That is some of the finest farming country in Canada. Today there are 800 farmers. How much longer will this continue? Will it continue until there are only 100,000 farmers in the entire country. What is the bottom line of Governor Bouey and the Minister of Finance (Mr. Mac-Eachen)? Is the bottom line a thousand farm bankruptcies a year- two thousand? What is the bottom line when it comes to broken dreams and lost hope? Those are the questions the governor of the Bank of Canada, in his so-called valiant effort to fight inflation, should keep in mind.
Many economists love to juggle figures, percentages and decimal points, but every time we look at these figures we should remember that they represent human beings, most of whom are part of a long tradition of a rural way of life and farming. They are proud to be farmers. They are proud to be producing products the country and the world desperately need, yet they are being kicked around on almost every side. They are being kicked around by banks, the Farm Credit Corporation itself, the government and the Bank of Canada. I do not know how much longer they can take it.
I have sent several appeals to the Minister of Agriculture from farmers in my riding who are financially on their last legs. Most of them were turned down at the agency level of the Farm Credit Corporation. One or two got as far as the appeal board. I appealed to the minister on their behalf, and to the best of my knowledge tonight not one of them was given a break. The old argument was that the FCC cannot be overruled and that the appeal board cannot be overruled. These are not fly-by-night farmers, they are well-established farmers who are lacking in only one thing. They are not lacking in determination, ambition or desire to work, but in cash flow. Surely to God the Minister of Agriculture can come up with something better than another $45 million in loans and an

March 30, 1982
Farm Loans
interest rate of 16.75 per cent, which is three times what it was five years ago.
I have spoken about farmers in my own county, but in so doing I hope it will be understood that I have spoken on behalf of farmers across Canada who find themselves in dire straits. I sincerely hope the Minister of Agriculture, the Minister of Finance, the cabinet and the Governor of the Bank of Canada will finally concede that their tight monetary policy which they first introduced in 1975 is not working in this country. I do not care about the United States, I do not care about England-it is not working here.
One of the main reasons it is not working here-and this relates to this bill and the farm industry-is that we have such a tremendous outflow of money as a result of our net deficit in trade in manufactured goods. It was $21 billion in 1980. If it were not for our raw materials and our farm exports, the overall net imbalance or deficit in trade would be horrendous. Why are we punishing primary producers who sell wheat around the world to help with our balance of payments? Why are we penalizing them? Why are we hurting them? Why are we making it almost impossible for them to go on or even to keep their heads above water? This is one of the most crucial sectors in our entire economy.
It seems to me that the Minister of Agriculture has lost his clout in the cabinet. About a year ago he had many brave words to say to farm groups about the banks. He said he would do what he could. He said he would tell the bankers to smarten up and to put some heart into their transactions. I do not think he has done much. If he has tried, I do not think he has succeeded. Otherwise, why would he bring in a piece of legislation in which he demands 16.75 per cent on these government-guaranteed FCC loans?
There is something else that makes me angry. The banks are damned careful about lending other people's money. That is really what it amounts to. Every cent they lend through the FCC to a farmer is guaranteed by the government. The banks will not lose. Mr. Speaker, you know and I know that the banks never lose, but in this case many farmers will. They will lose their livelihood, unless the Minister of Agriculture improves upon Bill C-88.
I hope in the next year or so I will not have to stand here and tell this House that the number of farmers in Brant country has shrunk from 800 to only 600. I do not know what will happen to the farm economy, the rural way of life and the farm industry itself if we do not get things turned around, if we do not put a little humanity back into our planning and our legislation and if we do not let farmers get on with the job they like most. They do not do it just to make money, but they want to keep their heads above water. They want to work and produce and have a reasonable return on their investment and hard work.


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, normally I am able to say it is a pleasure to rise and speak about a bill, but such is not the case tonight. We are at the third reading stage of this bill. It was given first reading and we had a full debate at second reading on the principle of the
bill. Hon. members on this side of the House and, indeed, some government backbenchers, speaking about the principle of the bill generally, agreed that farmers need more assistance. Hon. members on all sides of the House then suggested in committee a large number of improvements to the bill in an effort to demonstrate that bills emanating from this House genuinely reflect the work, skills, efforts and knowledge of individual members. Unfortunately, those ideas were not accepted by the government and the minister responsible, and now we find that the bill is back in its original form, as it came to us from the bureaucracy through the cabinet. To my mind that is regrettable because this has often been the case. This indicates to me that this Parliament is not playing the role it should. Our collective wisdom should be brought to bear on problems or situations in such a way as to improve our country.
Perhaps you were in the chair this afternoon, Mr. Speaker, when an amendment from this side was rejected. It was a perfectly sound and logical amendment which would have improved the bill and the condition of farmers in this country, yet it was rejected. I really wonder why it has to be that way. Why is it that a government in power does not accept good amendments or suggestions from members of the House of whatever party? I believe hon. members in the back benches opposite have to take more individual responsibility for representing the genuine interest of their constituencies.
I doubt that this FCC bill even qualifies as a band-aid measure because the amounts of money involved are so small. The FCC has done a lot of good things for the farmers of this country and could do much more if it had the financial wherewithal; and it could have the financial wherewithal, Mr. Speaker.
Government expenses this year will increase by 22 per cent but its revenue sources have also increased enormously. Revenues from oil are coming in by the trainload and buildings to store the money cannot be put up fast enough. The government is taking all the new sources of sales tax but nothing is available for the farm community. Being of a socialist turn of mind the government wants to get into all sorts of new ventures rather than keeping the existing areas strong. This can be seen in the estimates as they relate to established programs financing, health care and post-secondary education. The blue book shows a cut of some $469 million in these areas. After the government had expanded into these programs and got the provinces involved it decided to pull out, leaving the burden on the provinces. Some of them cannot pick up the difference, Mr. Speaker. Seven provinces east of Sasksatchewan have enormous deficits and for the federal government to unload this extra burden on them is unfair.
When you contrast the band-aid measure this bill offers with the incredible harm the government has wreaked on the farm community with its budget measures, its energy security bill, the economic policy including high interest rates and deficits, you will see just how shameful it is, Mr. Speaker. If I
March 30, 1982

were a government backbencher I would be ashamed to go into my riding and tell people that this is what we are doing for farmers. The farmers I represent would not tolerate it, Mr. Speaker. They would probably beat me up and kick me out of the riding and, quite properly so. That does not seem to happen to government backbenchers. They seem to be able to go into their ridings and get away with this. That is just amazing, because it is clear that they are not representing their constituents' interests.
I believe we should always start out with the thought of what Canada would be and remember what Canada was in 1968. We were a unified nation then, with Expo 67 just behind us. We had an incredible sense of what it was to be Canadian. We had a new, fresh Prime Minister (Mr. Trudeau) and a new, fresh government. People were expecting great things. We had balanced budgets and the national debt was almost non-existent. We had a first rate health insurance plan, a medicare plan and post-secondary education. Because of low tuition fees tens of thousands of students from modest-income families had the benefit of university education and were able to go out and develop exciting careers for themselves. Farmers were healthy and wealthy; they were prosperous. As a nation we were growing. There was a sense that the country was charging ahead and starting to fulfil its real role in the world as a peace-keeper and supplier of food.
Where are we today? There is a separatist government in the province of Quebec. There is incredible disunity between Anglophone Canadians and Francophone Canadians. There is incredible disunity between rural Canadians and urban Canadians. The first separatist member has been elected to a legislature in the west. We have a national deficit of over $14 billion per year and the accumulated national deficit is over $100 billion. The cost of interest to service that debt amounts to some $17 billion. That $17 billion is not spread evenly over the population, Mr. Speaker, but is concentrated in the hands of people with wealth. This means we are developing a class society.
If you had possessed $1 million at the beginning of the year what would you have done with it, Mr. Speaker? Would you have put it in a business to develop jobs and a future for young people? Of course not, because the risks are just enormous. You would have loaned it to your government at 19.5 per cent interest and at the end of the year you would have had $195,000 in your pocket, having taken no risk at all.
This government is creating a class society of very, very rich and very, very poor. That is exactly what is happening in many Third World countries today as a result of totalitarian government where there is a concentration of power in a monarch, a dictator or, in a socialist nation, where all decisions are made by a small group of men and women in a cabinet and in a bureaucracy. No country that has permitted power to be concentrated in a small group has been successful.
The only way to success is when the capital of a nation is divided into millions and millions of decisions-farmers making decisions with respect to their small amount of capital, for instance. An hon. member who spoke earlier told us that at
Farm Loans
one time there had been 2,300 farmers in his riding and that now there are only 800. That was 2,300 people making decisions on their portion of the national income, Mr. Speaker.
What is happening at the federal level. There are now over 400 Crown corporations, and all of them have special taxing provisions and therefore are not carrying their fair share of the tax load. The tax base is being eroded and as a result the rest of us pay more taxes but we do not have a proportionate say in the decisions made about the income of this nation. That is being drained into the central government where 36 men and women in the cabinet and a bureaucracy make the decision about how our wealth should be spent.
The hon. member for York-Peel (Mr. Stevens) has often said that we all know what a slave is; it is simply someone whose human rights have been taken away completely and all decisions with respect to that person are made by the master. The slave in an economic sense is someone who is taxed 100 per cent and all the economic rent from that person and all the decisions respecting that rent are made by other people.
In this nation, when we add up the taxes paid to all levels of government, we find that 55 per cent of our individual economic rent goes to government. That means that somebody else makes the decisions about how it is spent, so we are 55 per cent slaves. And as the hon. member asks, how long do we permit this to go on-until we are 70 per cent, 80 per cent, or 100 per cent slaves, as is the case in so many other nations? We have to draw the line, Mr. Speaker. I believe that if the backbenchers opposite were to reflect the true interests of their constituents they would put a stop to this.
I have pointed out that in 1968 when the Liberal government came to power there was a tremendous feeling of national unity in the country and we were all climbing the mountain, so to speak, as a nation. As a result of $469 million coming out of the estimates for the Secretary of State (Mr. Regan), concerning post-secondary education, and for the Minister of National Health and Welfare (Miss Begin), concerning our health system, these programs are now in disarray. Farmers are dropping like flies. The government has dissipated the trust that people put in it when it was First elected, and it has been elected continuously but it has not been honouring that trust. The Prime Minister has an obligation to think of all regions of the country and to make a genuine effort to ensure that they feel comfortable in the nation. He has failed in that fundamental trust, that fiduciary relationship.
Mackenzie King understood that and had members in all regions of the country. He had powerful members and ministers in every region. Prime Minister St. Laurent and Prime Minister Diefenbaker would never have done to the nation what this Prime Minister has done. As a result we have an elected separatist government in Quebec and an elected separatist member in the west. We also have an incredible alienation which saddens me as a Canadian. No longer are we charging up the mountain to conquer the world and be a powerful nation in support of peace, security and decency in the world. We cannot represent that to the world because we

March 30, 1982
Farm Loans
are not unified within ourselves. This goes back to the man at the top and the men and women around him.
Back in 1974-76 the government felt it could make decisions with a small cabinet and bureaucracy rather than take advantage of millions and millions of individual decisions. At that time there was a surplus of grain which could not be sold, and we were at the peak of our beef production cycle. What did the government do in its wisdom? It collected statistics and had people sitting at desks in Ottawa making decisions. Rather than trusting farmers, it establised the LIFT program and threw open the borders to the importation of more beef, with the result that we were swamped with beef. It destroyed the cattle market. We paid farmers to sow their land into pasture. As a result there was a dramatic increase in beef production and the bottom fell out of the beef market. We lost thousands and thousands of beef men in the country. At the same time grain had suddenly disappeared.
Had there been proper marketing there would not have been a grain surplus, and there was a crying need for food in the world. The previous speaker gave statistics as to the number of people who go to bed hungry every night. We should never cut back production in the farm community. We should be doing everything possible to enhance more production. I wanted to give another example of government believing it could do better, and I have more examples which I will give later. Every farmer who voted for the Liberal Party in 1980 has been betrayed; they have been genuinely stabbed in the back.
I should like now to deal with capital gains tax. Canada was developed by poor people who came from other lands because there was no chance in the social or economic structures of their countries to get ahead. This started in the early 1600s with French Canadian farmers along the St. Lawrence as well as those who settled in Nova Scotia. Then there were the United Empire Loyalists after the American war of independence. Next we developed the west. Millions of our ancestors came from every country in the world to obtain land. They knew that if they obtained a piece of this territory they could make decisions for themselves. They were prepared to work hard, to live and to die young, because it was tough on the western plains. As a result, we have all had a chance and are surely better off for it.
Not once was there a tax upon the capital of those farms. It was believed then that people had a right to work hard, to amass a bit of capital and to make decisions. Millions of those decisions led to a wise over-all result. The situation was different than it was in the socialist and totalitarian states from where they came where all decision-making on the capital and wealth of the nation was in the hands of a small group.
I recall a debate in the House some time ago when the Minister of Energy, Mines and Resources (Mr. Lalonde) indicated that his family was on the same parcel of land in the province of Quebec for nine generations. That will never happen again. The Lalonde family will not be on that land nine generations from now. It will probably be there for one more generation, or perhaps two at the most. The capital gains tax is such that the land cannot be passed on to the next generation
which usually has only one member who wants to be a farmer. The other members of the family usually leave the farm to become doctors, lawyers or teachers. Because of the enormous increase in the value of land due to inflation, land cannot be transferred to a member of the next generation. Farmers cannot do justice to the other members of the family because values have risen so much that they do not have adequate cash to leave land to one member of the family and cash to the others. It is impossible for the person taking over the farm to assume an equal burden and pay off the other sons and daughters. This has virtually become impossible, with the result that farmers are leaving.
As the last speaker indicated, farmers in his area have dropped from 2,300 to 800. Some of them were sold to existing farmers, often corporations. They will continue to concentrate and become bigger and bigger. Then we will find big industry becoming involved in farm production, which will want a rate of return of 20 per cent, like the oil industry. Canadians will be worse off and paying through the nose. Indeed, I expect Canadians will be lined up for food, as is the case in Poland, before they realize it.
It is a shame that the government never directs its attention to the fact that we are an enormous food importer. Despite the fact that we have a small population, some of the best farm land in the entire world, and a skilled and dedicated farming community which is determined to make the country work, we are enormous importers of food. We are not self-sufficient in many items but we could be; it is a shame.
The role of government has increased enormously. In the energy area we see a government which believes it can operate the entire oil industry with Crown corporations, it is in for the lesson of its life. Regretfully the people who pay for those lessons are the taxpayers of the nation. We poured $2 billion into Petro-Canada for the government to have a "window" on the oil industry. Now that it has a window on the oil industry, is the industry any better for it? Is there more oil in the country? Is the price of gasoline at the pump any cheaper? It is not one cent cheaper, and it will not be.
Before the government became involved, the oil industry was the most regulated industry in the country. The provinces decided whether leases would be granted and where. The provinces decided all environmental considerations and the costs. The provinces decided the rate of production from the well based upon conservation measures. The federal government decided the price of the oil and whether any would be exported. When governments control where they drill, how fast they produce, the price, and whether it is exported, what is the oil industry? It is a utility.
We were really paying multinational corporations a fee for the cost of their money. They had the front-end load to buy leases from the provinces, to pay the Canadian service industry, to conduct seismic studies, to drill wells, to do the mud-ding, the cementing, the steelwork and the production, to build pipelines, to do the refining, to build further pipelines and to pay truckers and retailers. All this part of the industry was
March 30, 1982

Canadian-owned. We were just getting the capital to develop from multinationals, and the cost of the capital was between 3 per cent and 5 per cent.
The government came along, believing it needed a window on the industry, and converted equity, which was costing 3 per cent to 5 per cent, to debt. We borrowed $2 billion from people with money, and we are paying 19.5 per cent interest on it. We bought shares. We had to borrow that money in other countries, therefore the flow of money out of Canada today is 19.5 per cent as compared with 3 per cent to 5 per cent for equity.
This is totally absurd because we went through this during the 1920s and 1930s. The bulk of the capital in this country was then in the form of debt. Most of it came from Britain. In those bad years capital flowed out of the country because of the interest rate. All the bright intellectuals, the Liberal reformers, the CCFers at that time and the intellectuals who were speaking from the universities, all said, we have to stop that. We have to convert it to equity because then the flow of money out of the country will be in the form of dividends. If there is a good year, there is a dividend. If there is a bad year, no money leaves the country. The great debate occurred and the solution was to change that debt to equity which is precisely what happened. But this government comes along and reverses the policy, and it is costing Canadians very dearly.
No doubt you read a few days ago, Mr. Speaker, that some $10 billion has flowed out of this country as a result of the National Energy Program. This has dramatically affected our farmers, as 1 will point out to you in a moment. That money did not produce any new wells. It was used to buy back equity in the form of shares. Statistics Canada reported that an additional $8 billion has moved out of Canada. The government knows the money has gone but it does not know where it has gone. I can tell you where that money has gone. It came from the pockets of our own citizens, modest income citizens and our Canadian businesses, particularly those in the oil and gas industry and it has been invested in the United States.
If you visit Denver today, it is just like Calgary was before the National Energy Program came into being. In Denver there is a dynamic climate of expansion with people investing money to find oil. Some lose a lot, but they find a little. But they are finding almost enough now to make the United States oil self-sufficient.
At one time the United States was importing over eight million barrels of oil a day. Now the United States imports only four million barrels of oil a day. The United States will become oil self-sufficient. The irony of that is, the United States is achieving that goal with our money. In the meantime, Canada still imports 450,000 barrels of oil a day. The goal of self-sufficiency has been lost.
Some of our western oil wells are being shut down because the government has made a decision to continue importing oil. All that money, $3 billion or $4 billion a year, creates jobs in Saudi Arabia, Mexico, Nigeria and Venezuela. This defies
Farm Loans
rational understanding, and it makes me wonder what is going on over on the government side.
People are taking money out of Canada because of the business climate here. Our ancestors came here to get a chunk of capital, a chance to build a future for themselves, their children and their grandchildren. As a result of the government nationalizing everything, concentrating decision-making power in the cabinet and a small bureaucracy, people are losing confidence, which they should. People are taking their money elsewhere. These are the same people who built this country. They now feel jeopardized living here. I can give you the names and addresses and introduce you to several leading farmers and ranchers in my riding, Mr. Speaker. They have come to me in all honesty and sincerity. Already three or four of them have sold their Canadian assets, taken the money and moved to the United States.
The Liberal government is doing to this country what previous politicians have done to countries around the world, forcing their citizens to uproot themselves, go to a strange land where a strange language is spoken. Yet people who came here were prepared to endure that pain for a generation so their children, their grandchildren and their great-grandchildren would have the opportunity to succeed. People are leaving Canada now because of the uncertainty.
I have talked to many farmers about the Farm Credit Corporation bill and the budget. Farmers know what the problem is. We learned the lesson in the west in the last generation. It is a shame that we have to repeat it. The existing government is made up mostly of academics who have never met a payroll in their lives, have never operated a farm, and have no idea what it is like to produce something new. You can almost guess their past when you see them. They have been to the finest schools, the finest universities, often ending up at the London School of Economics. In the end they came out totally imbued with the idea that a small group of people can make decisions affecting this huge country of ours.
The government decided to get into deficit financing. This government took over at a time when there was a very low national debt. The budgets were balanced yearly. It decided it could offer people all sorts of programs with a low capital tax and borrow the difference. The first year everything was great. We went from 1969 right through to 1978. This government was able to buy people with their own money. But the interest to service the debt was rising. Members on this side were sounding the alarm, saying, look, folks, it cannot go on. We have been through this. But the government was able to buy people with their own money. The government got away with it.
But now the government must stop. Even the socialist Liberal government recognizes it has to stop. We are now seeing socialist taxes to match socialist programs. But what happened in the meantime? People had borrowed money for house mortgages, perhaps for houses which were too big. When we had all the programs and low tax, people had extra money. People paid too much for land, too much for businesses and too much for their homes. When there are deficits too

March 30, 1982
Farm Loans
much money chases too few goods, driving up the value of those goods. We call it inflation. The situation has to stop. It is to be stopped with high interest rates.
The Governor of the Bank of Canada said, as he has warned for years, "If you, the government, will not exercise fiscal responsibility, I will exercise my duty as the Governor of the Bank of Canada and I will put up the rates. That will hurt people. It will cause unemployment." The real fault does not lie with the Governor of the Bank of Canada, it lies at the feet of this government. During all of those years it got people to believe in deficit government financing. The government did not heed the calls from this side or the calls from responsible economists. Canadians are now having to pay for it. They are dropping like flies, particularly in the farming community.
Farmers cannot tolerate high interest rates. They have a front-end load. Farmers have to borrow money in the spring to buy seed, fertilizer and enormous quantities of fuel to get the crops seeded. They have to summerfallow. They have to spray chemicals to kill weeds. They have to spray to control pests. Then in the fall they harvest the crops. Farmers have an enormous front-end load, and high interest rates simply destroy them.
Other societies have learned this fact. The admonition in the Bible about usurious interest rates is not in the Bible because of some religious doctrine, it is there as a result of a society's practical experience, having endured high interest rates. It failed because of high interest rates. That is what is happening to Canada today. High interest rates so demoralize people that they drop like flies and then society turns to all sorts of radical political solutions. This happened in the west in earlier generations. That is why we had the Social Credit Party and the United Farmers' Party. The CCF grew out of those economic dislocations of governments taking people into deficit financing.
Farmers have the extra burden of high energy costs, for which this bill does nothing. When our government was in power there was a special tax credit for farmers to help them with their high energy costs. Farmers are enormous consumers of energy. The present Liberal government threw out that rebate. Instead, it imposed a series of taxes. I saw the figures for the province of Alberta. A litre of gasoline in Alberta is 33 cents. There are six individual taxes imposed by the federal government on that litre of gasoline. The Alberta government has one charge, the ownership royalty, which goes to the citizens as owners. When you get to the bottom of these figures you find the federal government collects 42 per cent of the value of that 33-cent litre. Just think about the fact that 42 per cent of the value goes to the federal government through six taxes. Twenty per cent of the value of a litre of gasoline goes to the people of Alberta as owners and the remaining percentage value goes to the industry for producing, refining and selling the gasoline to us.
The farmers bear a triple load. They not only pay on the fuel they use in their cars, but they have to buy chemicals, fertilizer and extra quantities of fuel to produce food. Why, as a wise
Parliament, should we not give them special rebates? If we on this side formed the government we would, because the Progressive Conservative Party understand the special plight of farmers. Unfortunately, the Liberal government does not.
Another thing happening is that high inflation is leading us into a situation where we will soon become a society of landlords and serfs. According to statistics, the number of owner farmers is dropping dramatically while the number of tenant farmers is increasing. That is a quantum leap backwards some 900 years in history, Mr. Speaker, to feudal times. The government ridiculed Khomeini for taking Iran back some 1,300 years in terms of religious doctrine. This government is taking Canada back 900 years to feudal times. Serfs have no security of tenancy, so someone who wants to be a farmer has no guarantee that his children or grandchildren can be farmers. That is exactly what kings did in feudal times. They would give a farm to a man because he was a good soldier and had served the monarch well, but at the end of his life the land came back to the king and he gave it to someone else. That is exactly what is going to happen in Canada as a result of these deficits which are leading us to a class society.
The cheap food policy, Mr. Speaker, which even Liberal members now admit we have, was a concious policy of this government. In 1968 we were charging up the mountain, we were excited about being Canadians, we were unified and our governments were pulling together in a co-operative form of federalism. Canadians were enjoying a rising level of wealth, they had more cash in their pockets, and this was a great opportunity for the government to oversee a distribution of wealth to the farmer in order to sustain their farms and permit the same number of farmers to continue. Canadians spend some 17 per cent of their income on food, and this cheap food policy has been borne primarily by the farmer.
Seventy-five years ago, when the land was first broken, the soil was almost 100 per cent fertile. Now, a relatively short time later, we are down to nearly 50 per cent. At the present rate of decline the soil will be sterile in another 50 years time, and that is a perfect recipe for another dust bowl.
The Roman empire fell because it did not look after its agriculture. There were other reasons, such as getting into deficits and the concentration of power. What is now the Sahara desert in Northern Africa was once the world's most fertile area. Government's throughout the Middle East had enormously productive land. The Cedars of Lebanon were destroyed by governments which did not pay attention to their farmers, their forests and their land. Members opposite may think we will not one day have food lines, and I hope we do not, but, I believe, at the rate of progression of these things we will.
The Minister of Agriculture (Mr. Whelan) should not be going across this land bragging that Canadians pay less for a basket of food than people in any other country in the world. He should be going into the cities and explaining to people why we need to spend more than 17 per cent of our income on food. It probably should be in the order of 23 per cent to 25 per cent
March 30, 1982

so that farmers can remain on the land and improve productivity. Only then will we have a future for our children and grandchildren. I just do not understand why members opposite do not have this feeling for the future that we certainly have on this side. They should adopt the tradition of the Iroquois nation which required band leaders, before making any decision, to think about the effect of those decisions seven generations later. As a result of that policy the Iroquois survived for many generations until we came along with our guns and alcohol.
In summary, Mr. Speaker, where are the members opposite when we speak of capital gains? They seem to be in favour of them. Where are they with respect to energy costs? They rejected an energy rebate for farmers, and, indeed, have added six separate taxes which increases the cost of production enormously. They do not speak out against deficits, therefore we can assume they are in favour of them. They must also be in favour of the inflation which flows out of deficits, and they must be in favour of high interest rates which ultimately flow from inflation.
Mr. Speaker, there is no need for all of this. Let us never forget what Canada was like in 1968. Government's can and do hurt people, Mr. Speaker, and the Liberal Party is a prime example of that. The government will be cited in the textbooks of future generations as a classic example of how a socialist party, trying to concentrate wealth, can take the energetic and dynamic young people climbing a mountain and destroy them.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, as we near the end of this debate I would like to spend a few minutes recapping the arguments made in this discussion. First of all, the main thrust of the amendment is to increase the amount of capital which the Farm Credit Corporation has available to lend to farmers. The amendments will mean that the FCC is no longer restricted to the government as a source of funds. Possible sources of funds will be retiring farmers who have managed during good years to accumulate a bit of a surplus. We are also told that sources such as pension funds, foreign and domestic banks, and government bonds will also be available to the FCC. However, none of this is spelled out in the act and the minister was not very specific in committee as to just which source of funds the FCC would first be turning to.
It has been assumed, Mr. Speaker, that there would be some form of agribond or small business bond, call it what you will, the form of which would require changes in the Income Tax Act, and a definite policy from the Minister of Finance (Mr. MacEachen). Those changes have not been forthcoming. There has been no indication by the Minister that such changes will be made available so that these sources of funds can be utilized by the FCC.
I believe hon. members on all sides of this chamber have in mind a system of taxation which would defer tax on capital gains on the sale of farm properties, as long as the owner of the funds reinvested the money in an acceptable way so the money could be borrowed again by farmers who are continuing on in
Farm Loans
business. This would allow the Farm Credit Corporation or the credit unions out in the country to have access to this money. They would not have to pay the normal rate of interest because payment had not been made on the capital gains. Therefore, it is usually estimated that a compensatory rate would be approximately half of the current interest rate. The lending institution, whether the Farm Credit Corporation or the credit union, could relend that money to beginning or expanding farmers for about one per cent more than that. This would certainly maintain the refinancing of agriculture from one generation to the other at lower rates. This fits in with our concept in this party of attempting to make sectors of the economy more or less self-sufficient in terms of refinancing to ensure growth of that industry in future years.
There has also been some discussion during this debate about the farm income problem. Our party believes this is the main reason we have a shortage of farm credit. Our analysis is that the farm market prices have not been adequate. The government has not provided adequate marketing legislation and accompanying stabilization programs which would make it possible for farmers to recover their costs and a return on the efforts that they have put into their agricultural production. Because that has not occurred, farmers in this country have incurred an increasingly larger debt. We have outlined the magnitude of that debt, running from about $6 billion in 1974 to close to $22 billion at the present time. This debt has been incurred in the space of a mere eight years. Farmers are facing an annual shortfall of between $2 billion and $3 billion just to cover most of their costs. We have pointed out how the returns to agriculture have dropped to the point at which they are now approaching zero.
We have heard representations from various farm groups producing any number of commodities. They have told us a number of things about their particular sectors of agriculture. For instance, I note that grain producers in western Canada are now at the point at which most of them are no longer able to carry out continuous cropping. For those hon. members who have some doubt about my words, I would ask them to consult the latest issue of Grainews. An article by a producer of grain points out that for the size of farm he is operating, which is slightly larger than average, a very efficient-sized operation, the price of wheat at the farm must exceed $4.80 per bushel to enable him to continue buying the fertilizer and chemicals required to continuously crop his product. Instead, along with virtually 80 per cent of the grain farmers in western Canada, he will be taking another option starting this year. For some it will be the continuation of an option started years ago. He will be going back to a 50-50 summer fallow cropping practice.
For some hon. members who are not familiar with the prairies, let me say that about half the prairies do have enough rainfall to allow more concentrated cropping production. However, with the current price of wheat and barley, the most profitable option now is go back to a 50-50 summer fallow practice. Total production will be down, but the financial position on each of those farms will be better by switching back to that old practice.

March 30, 1982
Farm Loans
We spoke to farmers from Ontario, some from Bruce and Grey counties. I understand that the hon. member for Bruce-Grey (Mr. Gurbin) will be speaking soon. I spoke to corn producers from eastern Ontario as well. They told us that even if they got their land for nothing, given the current cost of seeding and caring for an acre of corn, and given the current cost of fertilizer, chemicals, fuel and machinery, the return on that acre of corn will not pay its own way. We know that the same situation exists in the livestock industry. We hear many jokes around the auction markets. Farmers ask each other how things are going, and one will tell the other that things are going a little better this year as he will produce only 50 per cent or 25 per cent as many cattle as he did last year. Their objective is to lose less money.
I think, being realistic, we must recognize that this bill, granting a bit more capital to the Farm Credit Corporation, will do very little to solve the real problem in agriculture today. Another $45 million or $75 million is a drop in the bucket considering the $2 billion to $3 billion in losses that the farmers will have to put up with this year.
The government is not willing to infuse money into agriculture. It has not provided improvements to the marketing system, and it has not provided stabilization programs. We are one day away from a deadline imposed by the minister himself for a stabilization program for hogs. We will await with interest the coming of April 1. The amount of activity that has gone on between the provinces and the farm groups would indicate that the minister has not come up with an agreement on a stabilization program for hogs. There has been no talk of improved marketing and no serious talk of improved beef marketing. As a result, farmers are going out of business.
I recently attended the annual meeting of one of the major marketing boards. It was attended by the leaders of that industry, an industry which operates under a supply management system and a cost-of-production formula. A great many delegates are not too far from bankruptcy themselves, even with the cost-of-production formula. Of course, part of the reason is that the cost-of-production formula assumes that a good chunk of the money invested in those operations can be borrowed at a rate of 11 per cent. Of course, we cannot get money at 11 per cent interest. The difference between the interest rate of 18 per cent to 21 per cent, which money really costs, and the assumed rate of 11 per cent has created a deficit in most of these operations because they relied on the assumed rate.
We have heard about bankruptcies in this debate. However, for every bankruptcy there are probably five or six farmers who are voluntarily going out of business. In this country we know that for every farmer who goes out of business, three other workers in the economy lose jobs because the economy will no longer continue to support those jobs. At the moment, well in excess of one million workers are unemployed in this country. The fiscal and monetary policy of the government has been creating a lack of jobs for workers. It has been creating unemployment for workers and farmers. When a country has unemployment it does not have production.
I have outlined some of the things that those farmers who are still in existence will do to stay in business. They will cut back grain production. Lifestock producers are also going to cut back production because of bankruptcies and market conditions. Employers in other sectors are laying people off. We have this great country gradually winding down, producing less and less, and all of this, according to the Minister of Finance and the government, to fight inflation.
How can you fight inflation by reducing the amount of goods and services produced? The old economic axiom for inflation was too much money chasing too few goods, yet we are attempting to fight inflation by producing even fewer goods. It is a wrong-headed policy, and it went wrong with our agricultural policy. That is why this particular debate on agriculture and its importance to the economy in general has been an important one.
I regret that more funds were not made available to farmers, to agriculture in general, in an attempt to turn this situation around. However, I hope that some government members will at least have received the message, and they will take it to cabinet through the Minister of Finance and the Prime Minister (Mr. Trudeau), and that current policy will be reversed very soon so that this country's farmers, workers and the economy can once again go forward progressively.


Some hon. Members:: Hear, hear!


Gary Michael Gurbin: I rise with very little time remaining, Mr. Speaker, at the end of this debate on Bill C-88. It is a discussion that may not interest many people, because there is such a small number of people directly involved in agricultural production. However, many consumers, many people in Canada should have a feeling for the importance of this type of legislation, albeit legislation that falls far short of the mark we would have hoped to achieve with the changes in this bill.
This Farm Credit Corporation legislation has been ongoing now for approximately 20 years. Originally as intended it would have provided the kind of stable, secure financing that agriculture needs if it is to continue to provide the cheap food that this country is able to produce. While many people may not relate to the Farm Credit Corporation, they can certainly relate to the price of food in their baskets each week as they go to the supermarket, and in the long run it is those people we have to be concerned about.
We see a government at this point in time whose policies over the past in dealing with inflation, with interest rates and taxation policies, have put a terrific amount of pressure on consumers as well as on agriculture. At this point in time we see the agriculture community threatened with its very survival; and this survival, from the point of view of this change to the Farm Credit Corporation legislation is still not secure.
It is not secure because the capital that we are considering for the expansion of farms across the country is not necessarily
March 30, 1982

going to be provided on the basis that is required; that is to say, if we do get more capital we cannot be confident that this kind of legislation will provide interest rates that are affordable. That is the key factor, which has been pointed out by two county federations of agriculture we met with and talked with in the last few weeks. First on the list each time was the interest rate problem.
The government that was going to "wrestle inflation to the ground" now has been wrestling for long enough. They holler at Uncle Sam or they holler at somebody else when they get into trouble. It is really not the responsibility of anyone but this Liberal government to make sure that the productive sectors of the economy, whether it is agricultural or mineral areas or forestry, are able to survive and produce jobs for the country, because of the multiplier effects of this kind of production.
The changes we have in this bill are a start. They offer a potential for new sources of revenue apart from the Consolidated Revenue Fund so that the Farm Credit Corporation can expand from the limited amount of capital it has had available for agriculture.
The interest rate to be recommended we have yet to see, but the expansion of that capital will depend very much on the ability of the Minister of Agriculture (Mr. Whelan) to convince his cabinet colleagues, and with Treasury Board in particular, of the need to provide an additional amount. This will amount to $26 million in addition to the $14 million he is asking for now, in order to bring himself into a position where he can fulfil his promise of $1 billion in additional funding for the Farm Credit Corporation.
I doubt very much, Mr. Speaker, that most of the members opposite have an understanding of that problem. I suspect that the Minister of Agriculture knows his problem, but his influence with the cabinet and his impact has been so little lately, I would have very real concern that he will be successful in that endeavour.
As we approach the end of this debate, Mr. Speaker, the important thing I would like to add is, in addition to the difficulties that might present themselves for the resolution of these problems, there is the question of what is to be done in the short term. Even with these changes in the Farm Credit Corporation financing arrangement we still have a very real short-term problem. As mentioned before, the spring planting is going to bring this into sharper focus in the next several months, particularly if we are to allow farmers the ability to even maintain a cash flow for survival, in order that they can put their crops in the ground. We have a situation now where this ability is threatened for this large segment of the agricultural community.
We need to pay immediate attention to stabilization programs. The provinces have indicated their desire to co-operate with the federal government in stabilization programs in a number of commodity areas, particularly in beef and pork. We
Farm Loans
know, because of the number of representations we have had from the federation of agriculture nationally, and from different farm organizations, that we need a moratorium on any further bank foreclosures. We need to ensure that the Small Business Development Bond system will work effectively for agricultural producers. We know that we must have additional, significant discussions with the Minister of Agriculture federally, with a hopeful impact on the federal cabinet, so that there can be arrangements, through new legislation, the old Farmers' Creditors Arrangement Act, or through some new mechanism, so that some of these people, with interest mounting hour by hour, will be able to come to some better arrangements or terms with their creditors and continue in the actual farm practice.
The future we have in the agricultural community, Mr. Speaker, might reflect the future we have in all of Canada. I have real concern, and I think members from across the country have a feeling for the difficulties that we might face, if we are not able to address these difficulties effectively. We are facing the possibility of upheaval, not just in the agriculture community but in the entire social structure of the country. This is being felt most directly by agriculture; and certainly in areas where auto workers, and workers in a variety of industries are being severely impacted upon by the policy we have had in the last few years.
We have a real problem, and we are threatened with the lack of response from the government so far, and its inability to deal with these problems. We are threatened with changes in the social fabric that will threaten our future as a country. We have seen regional difficulties arise and a number of other problems. We have seen people lose interest in what the federal government is doing and in what political parties are doing. In the long run that is a very serious and very real threat that is destroying the kind of spirit, the kind of hope, the kind of future we would all love this country to enjoy. Thank you.


The Acting Speaker (Mir. Ethier):: Is the House ready for the question?


Some hon. Members:: Question.


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


Some hon. Members:: Agreed.


An hon. Member:: On division.


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

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.
[Stage Direction]
March 30, 1982
Adjournment Debate

Ramon John Hnatyshyn: I rise with respect to a question, Mr. Speaker, I put to the Prime Minister (Mr. Trudeau) on March 24. It had to do with promulgation of the emergency planning order by cabinet in May, 1981.
You will recall, Mr. Speaker, that I have been speaking out against this planning order for, I think, good and justifiable reasons. The planning order in question constitutes a very serious threat to the civil liberties of Canadians. It is one to which I have taken exception for a variety of reasons.
My question to the Prime Minister on March 24 was about the plans of the government to introduce emergencies legislation. I expressed concern at that time over the fact that the present War Measures Act, which is the only legislation we have on the books at the present time specifically dealing with emergency situations, does not embody Article 4 of the International Convenant on Civil and Political Rights.
I pointed out that the minister responsible for emergency planning, the President of the Privy Council (Mr. Pinard), has publicly acknowledged that an emergency situation would override those freedoms enunciated in the Charter of Rights and the War Measures Act. It simply does not provide the comprehensive legislative foundation to meet the broad range of peacetime, international and wartime contingencies.


David P. Smith: When?


Ramon John Hnatyshyn: The parliamentary secretary asks when the President of the Privy Council said this. It was in a speech he delivered to the conference on emergency planning and emergency arrangements. It was a federal-provincial conference reported in the July-September 1981 Digest. I will quote him specifically. The parliamentary secretary might take note of this. He said:
First, I noted that Canadian emergencies legislation does not explicitly embody the human rights safeguards set out in Article 4 of the International Convenant on Civil and Political Rights-
Like the International Convenant, the Canadian Charter of Rights and Freedoms recognizes that most human rights are not absolute and that certain limitations on them are inevitable.
He went on to say, relating to the inadequacy of the War Measures Act with respect to peacetime emergencies, as follows:
But the events of October 1970 raised serious questions about relying on the War Measures Act for dealing with domestic and peacetime emergencies.
On March 24 I asked the Prime Minister when we might expect legislation with respect to peacetime emergencies and general emergencies legislation, and when we might expect the proposals to receive first reading. The Prime Minister neglected or refused to answer that question.
I subsequently received information, through a response to the President of the Privy Council to the Standing Joint Committee on Regulations and Other Statutory Instruments,
that there is no immediate intention of introducing any emergencies legislation. What this government has done is come in by the back door. It has circumvented Parliament by the enactment of a massive emergency planning order by order in council rather than introducing emergencies legislation so that Parliament, the elected representatives of the people, has the opportunity of assessing and analysing the powers which the government intends to give itself in an extraordinary situation. I say to the Parliamentary Secretary to the President of the Privy Council (Mr. Smith) that further in his response to the Senate and House of Commons Standing Joint Committee on Regulations and Other Statutory Instruments he said that the government will use the royal prerogative if a peacetime emergency arises and Parliament is dissolved or cannot otherwise be assembled. To quote him specifically, he said:
If Parliament were dissolved, or if the pace of the crisis at hand did not allow the time to assemble Parliament, the government would be forced to act in reliance on the Crown prerogative-
What we have here is the worst of both worlds. We have the government enacting this massive planning which will allow mandarins, public servants of our country, to put into place the extraordinary powers in the hands of government ministers and of the cabinet of this country. What the President of the Privy Council tells us is that if an emergency now arises, the government will take its responsibility and move to deal with that emergency.
Having acted, as the President of the Privy Council said, extra-legally-which in simple terms means outside the law- the government would then conceivably come back to Parliament asking for indemnification for actions taken without proper legislative authority. That contravenes principles, which I thought existed in our country, of government under the rule of law. If the government has no immediate intentions of asking for enabling legislation, there will be an irresistible temptation on the part of the government at the time of any emergency to put into effect this massive-and expensive, I venture to say-planning order without any parliamentary approval whatsoever. Members of the House of Commons should have an opportunity to decide what kind of legislation we want to pass, if we should pass any at all, and whether we are prepared to deal by way of legislation with emergencies of an environmental or peacetime nature. These are very important questions.
The government acts outside Parliament to put in place a huge planning order which would have severe implications for the rights and freedoms of Canadian citizens, including a national information service put forward by the Prime Minister, a food rationing program put forward by the Minister of Agriculture (Mr. Whelan) with the capacity of the Minister of Communications (Mr. Fox) to take control over all of the telecommunication facilities in our country. That is not the kind of democracy of which I can be very proud. This is not the attitude of a government which is sensitive to liberties in our country.
March 30, 1982

I ask the parliamentary secretary to tell us when the elected representatives of the people of Canada will have an opportunity to debate this matter and when we will hear the proposals of the government.


David P. Smith: Mr. Speaker, it is very unfortunate that the opposition has tried to exploit this issue politically. The hon. member for Saskatoon West (Mr. Hnatyshyn) said that the government has attempted to circumvent Parliament by giving itself a number of powers and enacting a massive planning order. What has to be understood by the Canadian public is that what the government did was bring up to date an emergency planning order which has been on the books for many, many years. I have traced the order back into the forties. It was most recently brought up to date in 1965.
The responsibility for drawing up certain plans, about which the opposition has made the most noise, is that given to the Solicitor General (Mr. Kaplan), and the hon. member knows exactly what 1 am talking about. Yesterday I read the 1965 order, and that phrase was there virtually verbatim. What I am saying to the hon. member is that that particular item was in an emergency planning order which was on the books the entire time the Clark government was in office and the hon. member was a minister. If it offended him, why did his government not rescind it? Did that government rescind it? Of course it did not rescind it. Why did that government not rescind it? The reason it did not rescind it is that obviously it is incumbent upon any responsible government to have in place certain plans to deal with emergencies which may arise. It is as simple as that.


Ramon John Hnatyshyn: Why an order?


David P. Smith: That order was issued under the royal prerogative. I think the hon. member is fully aware of that. It does not grant unto itself any powers, and the hon. member knows that. It has repeatedly been characterized by the Leader of the Opposition (Mr. Clark) as giving the government powers which it did not in fact previously have. That is not the case at all. What it does is allocate responsibility for preparing various plans.
The government does not have any plans to bring in legislative proposals in the immediate future. This is something the President of the Privy Council (Mr. Pinard) is considering quite seriously. He is discussing it with the provincial governments.
With respect to the point the hon. member raised, I have not had an opportunity to read that speech, but I can assure the hon. member that the President of the Privy Council has repeatedly said-I have heard him and discussed this with him, and I know the Prime Minister (Mr. Trudeau) has discussed it with him-that the Charter of Rights does apply. I will be happy to look at that speech and read it with an open mind, but there is certainly no doubt in my mind that the position of the President of the Privy Council is that the
Adjournment Debate
charter does apply. He and the Prime Minister are of the same mind on that issue.


EMERGENCY MEASURES-CRITERIA FOR RELEASE OF CRIMINALS
Benno Friesen: Mr. Speaker, last Wednesday I rose in the House to ask a question of the Solicitor General (Mr. Kaplan) about the provisions within orders in council that deal with emergency planning and the powers given to the Solicitor General to empty jails so that people who had not been convicted of a crime could be put in them and then they could be used as civilian internment camps. There are several things that disturb me about this whole issue of civilian internment camps and the so-called emergency planning orders, Mr. Speaker. What disturbs me most is the amount of deception in the ranks of government and the statements made by government members.
The first deception came when I first raised the question last October 29 in this House. At that time I put much the same kind of question to the Solicitor General. He replied, at page 12291 of Hansard, in part as follows:
Madam Speaker, there are no such orders in council.
After that subject began to be ventilated properly he naturally admitted that there are such orders in council.
The other day, when I asked him about the efficacy of releasing people convicted of a criminal offence in order to make room for people who had not been charged with a criminal offence, he said, as reported at page 15766 of Hansard:
Madam Speaker, the member can see from the question he has asked what difficult issues arise.
I think that qualifies as the greatest understatement of the year. Why bring in an order in council to deal with regulations in an emergency situation if there is no legislation in place that ought to limit those emergency powers? It seems to me that the correct approach is the customary one; bring in the legislation and then bring in the regulations.
I have heard the Prime Minister (Mr. Trudeau) say in the House several times in answer to questions that if there are people who are aggrieved by the process of emergency planning, if it should happen that people should be incarcerated without due process of law, as a result of the new Charter of Rights and Freedoms they will have recourse to the courts. I listened to that with interest, Mr. Speaker.
The Parliamentary Secretary to President of the Privy Council (Mr. Smith) ought to be an authority on the subject. On December 17, 1980, he spoke in this House in a debate I initiated for the production of papers. At page 14183 of Hansard he said:
-I would hope that the following brief description of the anticipated procedures would help to alleviate the concerns about possible internment requirements that have been expressed by hon. members.
As he was the lead-off speaker for the government I take it he was its spokesman. I believe he spoke from a prepared text so

March 30, 1982
Adjournment Debate
we have to assume that he was speaking on behalf of the government. He listed five different procedures that will be available to the citizens of Canada if they feel they have been aggrieved by the process initiated by the emergency planning orders. At page 14183 of Hansard he said:
First, it is and will continue to be a function of the security service-
We still do not know what was involved in the security service for Canada. He continued:
Second, as a safeguard against possible abuse, any intelligence to be used in support of this identification program must first be presented for examination to a review committee composed of senior officials of the security service-
Third, the review committee would examine the information presented to ensure that stringent guidelines protecting the rights and civil liberties of individuals are respected.
Fourth, only if the Parliament of Canada declared a national emergency in relation to war or public order and subject to the passage by this House of specific enabling legislation, could internment action actually be taken.-
Fifth, as a final safeguard against potential injustice, such legislation would guarantee a detainee the right to appeal his detention to an independent advisory committee appointed by the incumbent minister of justice-
It is important to point out that in those five steps which the Parliamentary Secretary to President of the Privy Council gave in the House on December 17 there was no mention of the judicial process or appeal to the courts. It was simply an in-house system of review committees which the government will set up.
I wonder how many Japanese during World War II found the courts available to them when they aggrieved. I wonder how many of the 465 members of the Quebec society in 1970, when they were interned without questioning, without habeas corpus, had the courts available to them for appeal. The minister has never answered the question. He needs to justify before the bar of this House the wide-sweeping powers given to him which permit him to release people convicted of criminal offences in order to make room for people who have never been charged or convicted of any crime.


Mr. Alain Tardif (Parliamentary Secretary to Solicitor General):: Mr. Speaker, in answer to a question asked on March 24, 1982, by the member for Surrey-White Rock-North Delta (Mr. Friesen) concerning, and I quote:

-criteria to release convicted criminals in order to make room for people who have not been convicted of a crime.
Item 6 in column 1 of Part II of the schedule to order in council PC 1981-1305 of May 21, 1981, authorized the Solicitor General in the case of war to:
-facilitate the selective reduction and transfer of prison populations to provide for the establishment of civilian internment camps.
I should like to emphasize that the order makes clear that these proposed measures will only come into effect in the case of war. They are not available in the case of lesser emergencies. The Leader of the Opposition (Mr. Clark) has done a disservice to the cause of emergency planning by claiming falsely that the government has already established civilian
internment camps. I should also like to point out that the present order in council provides for essentially the same measures which were contained in its predecessor, PC 19651041, published in The Canada Gazette, Part II, on June 23, 1965, assigning responsibility at the time to the Minister of Justice.
The tasks relating to internment in wartime, transferred from the Minister of Justice to the Solicitor General by order in council, have been public knowledge since 1965, and the opposition has nothing more to attack now than it had at any time since 1965.

As the minister indicated, Mr. Speaker, a responsible government should be prepared to protect Canadians in a wartime emergency, and that is the reason for this order in council, namely, to provide the authority for planning such measures. There is no question of their implementation.

I should also like to note that so far this matter has a low priority. I have not yet seen any options from my officials in this regard, and none are yet in preparation. Let me assure the hon. member, however, that any options developed, including an option reflecting Item 7 in Part II of the Schedule to PC 1981-1305, would be required to include all safeguards for civil liberties provided in the Canadian Charter of Rights and Freedoms and to ensure that the safety of the public would have the fullest consideration. The only regulations now in existence in this area are those which were used in World War II to incarcerate civilians. These regulations were a serious infringement of civil rights at the time and should not be the sole basis available on the shelf to turn to in the urgent event of a war crisis.


CANADIAN ARMED FORCES-PROVISIONS FOR SINGLE PARENT MEMBERS. (B) REQUEST THAT PAY BE INCREASED
Mr. Terry Sargeant (Selkirk-Interlake):: Mr. Speaker, I would like to welcome the new Parliamentary Secretary to the Minister of National Defence (Mr. Henderson). This is the first opportunity I have had to deal with him in his new position as parliamentary secretary. I hope he proves to be more enlightened and enlightening than his predecessor and his minister in answering questions that I have put to them in this House.
I want to expand on my question of yesterday and address what the Department of National Defence refers to as "People and People Progress".
Yesterday, I directed a question to the Minister of National Defence (Mr. Lamontagne) about the salaries of low-ranked Armed Forces personnel. What prompted me to raise that question was the sad case of Rhonda Gordon, a private at CFB Winnipeg, and a single parent. Right now a private's salary is $705 per month or an annual gross of $8,460. For comparison, the poverty line according to Statistics Canada for a family of
March 30, 1982

two in a city the size of Winnipeg is $9,912. A private like Rhonda Gordon, struggling to raise her five-year-old daughter, falls almost $1,500 below the poverty line.
From her gross salary, deductions were taken for her quarters, which she shared with another woman in order to save money, and for her rations. That left her with a take-home pay of only $360 a month, which was not enough to feed her daughter and pay for daycare, which is not provided at the base. Instead she paid her parents living in Gimli, some 60 miles from CFB Winnipeg, $120 a month to care for her daughter.
I am sure members of this House can well understand that Rhonda Gordon wanted to be with her daughter. But when she approached one of her supervisors at CFB Winnipeg, he advised her to apply for welfare as a protest over the pay received by first-year privates. She was advised to apply for welfare. What kind of life is that? Our first-year privates live below the poverty line, and are then advised to apply for social assistance.
In the fall of 1979 the base social worker at CFB Calgary reported that 400 families there were eligible for welfare. You can be sure the slick recruitment ads for the Armed Forces do not mention anything about that. When I think of it, "There's no life like it" may be the safest and most accurate promise that can be made by our Armed Forces to new recruits.
What did Rhonda Gordon do? In her own words she pulled a "Klinger." Refusing to go on welfare and to live without her daughter, she feigned mental illness and was released. It should come as no surprise that Rhonda Gordon is not the first to leave the Armed Forces because the salaries at the bottom level are too low.
When rents at CFB Calgary began their 69 per cent increase in 1979, 57 service people left the forces because they could not afford to stay. The annual attrition rate at CFB Calgary is 25 per cent. One senior officer there complained that with the rent increases which bring base housing costs into line with regional Calgary costs, his troops were now among the working poor. That was in 1979. Now two and one half years later precious little has been done to remedy the situation.
What has been the response of the Department of National Defence? In 1980 when reports of military families being eligible for social assistance benefits were made public, an Armed Forces newsletter published in Ottawa attempted to minimize the importance of the problem. It claimed stories of military families being eligible for welfare were largely based on emotion and were supported only by hypothetical examples.
Let me refer to the Calgary cases, as reported in the Montreal Gazette on May 14, 1980. Let me quote briefly from the story, leaving out the names. Mrs. A.:
-is four months pregnant. She can't afford maternity clothes, eats a lot of macaronni and cheese and has only $4 to see her family through next week.
Adjournment Debate


Mrs.   B.@: - was surprised to find a welfare hamper on her doorstep last Christmas shortly after her husband applied for welfare but then decided not to accept it.


Mrs. C.:: Shortly after ... had her first baby, her husband had to take a part-time job to help pay for medical expenses.
But money problems are not the only things these women have in common. They are all married to soldiers at the Canadian Forces Base in Calgary.
Those cannot be called hypothetical, Mr. Speaker.
On November 27 the Minister took the magnanimous step of increasing armed forces salaries by 3 per cent. Even after that Rhonda Gordon is still $1500 beneath the poverty line and unable to bring her daughter to live with her.
To deal with hardships brought about by rent increases the minister announced a special case allowance where rents are 12.5 per cent higher than the national average. However, that will hardly address the basic problem here: low pay for the lowest ranked Armed Forces people.
One woman at CFB Uplands in Ottawa summed it up as well as anyone:
The complaints are really complaints about salaries. Between rent increases and salary increases, some people have actually lost money.
I was surprised and a bit alarmed at the minister's response when I asked him yesterday about what provisions existed for single parents like Rhonda Gordon who cannot afford to have their children with them. Did he show any compassion for her or any of the other working poor in the Armed Forces? Not at all. He said:
In this unfortunate case the lady concerned knew very well the conditions of enlistment and the current pay levels, and whatever we could do for her child would be done through welfare. There is nothing I can do more than that, beyond telling her that she should have known all this before she enlisted in the Armed Forces.
It is distressing, Mr. Speaker, that the minister should be so uncaring.


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


Terence James (Terry) Sargeant: Mr. Speaker, am I not allowed seven minutes?


Mr. George Henderson (Parliamentary Secretary to Minister of National Defence):: Mr. Speaker, I would like to point out to the hon. member for Selkirk-Interlake (Mr. Sargeant) that the figures he quoted in his questions to the Minister of National Defence (Mr. Lamontagne) in the House yesterday are grossly inaccurate. I would suggest that if he is to take up the cause of one of his constituents he does it with a background of solid knowledge rather than on the basis of what may have been erroneously reported in the newspapers. I would also suggest that he acquaint himself with what is commonly referred to, and understood by most people, as "take-home pay".
I do not believe the hon. member is doing anyone any good by misrepresenting the facts as he did yesterday. The hon. member will understand that in dealing with the matter he brought to the House yesterday, we are not at liberty to
15996

March 30, 1982
Adjournment Debate
divulge the exact amount earned by any individual due to the provisions of the Canadian Human Rights Association. However, the rates of pay for members of the military are on public record and can serve to indicate the general range of salary with which we must concern ourselves.
With respect to the particular case in question, let us examine the pay levels. On enrolment in March 1981 the pay for a private recruit was $608 monthly. On April 1, 1981, the forces were granted a pay increase of some 12.31 per cent for enlisted personnel, and then on October 1, 1981, a further adjustment of 3 per cent was made. Therefore, by anyone's calculations this would amount to an annual pay increase of just under 16 per cent-not 3 per cent as erroneously stated by the hon. member yesterday.
Thus, as of the first of October, 1981, the minimum pay that a private soldier would have received after basic training amounted to $746 per month. Then after one year of service private soldiers receive a further pay increase commonly referred to as the first level of incentive pay, which raises their earnings to $956 monthly.
By anyone's calculations these figures show that a private who enrolled in March 1981 has seen his or her salary increase
by over 55 per cent over a one-year period. I challenge the hon. member to offer other examples in the economy where an individual's salary increase over a one-year period would be so great.
If one is to subtract standard deductions for income tax, unemployment insurance, pension contributions and so on, plus accommodation-including utilities, incidentally-at $106 per month, one finds a disposable monthly income of some $543, or $271.50 every two weeks. I stress that this is disposable income, not take-home pay, as indicated by the hon. member. There is a substantial difference in the two terms and the amount is substantially more than the $180 quoted by the hon. member.


The Acting Speaker (Mr. Ethier):: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow afternoon at two o'clock.
At 10.30 p.m., the House adjourned, without question put, pursuant to Standing Order.

Wednesday, March 31, 1982