1982-06-18

ROUTINE PROCEEDINGS


Mr. Walter McLean (Waterloo):: Madam Speaker, on Monday night at the annual meeting of the Waterloo Riding Federal Liberal Association a resolution was adopted calling on the Liberal government to abandon its high interest rate policy. Instructions were given to represent such a position at the fall policy convention of the national Liberal Party. I move, therefore, seconded by the hon. member for Provencher (Mr. Epp):
That this House urges the Libera! government to heed the words of the Waterloo Liberal policy chairman, Victor Cote, that "I don't think you have to be an economist to know there is something wrong with the current policy", and speedily introduce a new economic policy.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PARLIAMENT
Mr. Charles Turner (London East):: Madam Speaker, I wish to move a motion under the provisions of Standing Order 43. On June 18, 1962, the people of Canada elected four Liberal members under the leadership of the Right Hon. Lester B. Pearson, and one NDP member. These five members continue to serve the House of Commons on behalf of the people of Canada. They are the hon. member for Windsor West (Mr. Gray), the hon. member for Beauharnois-Salaberry (Mr. Laniel), the hon. member for Hamilton East (Mr. Munro), the hon. member for Essex-Windsor (Mr. Whelan), and the hon. member for Winnipeg North (Mr. Orlikow). Therefore I move, seconded by the hon. member for Mission-Port Moody (Mr. Rose):
That this House sends its congratulations to these Members of Parliament, wishes them good health and happiness, and prays that they may continue to serve the people of Canada and the House of Commons for many years to come.


Some hon. Members:: Hear, hear!


Madam Speaker:: The hon. member for Calgary West (Mr. Hawkes).


THE DISABLED AND THE HANDICAPPED
Mr. Jim Hawkes (Calgary West):: Madam Speaker, last evening, because of the leadership and dedication of the hon. member for Brandon-Souris (Mr. Dinsdale), the proposed new National Training Act was amended in committee to provide equality of opportunity for handicapped people in federal training programs. Therefore I move, seconded by the hon. member for Hamilton-Wentworth (Mr. Scott):
That this House instructs the government to bring forward new initiatives that will ensure equality of opportunity for handicapped people in the work place.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PARLIAMENT
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, I do not think my motion will have any trouble receiving unanimous consent. This is an important day for two distinguished members from the city of Winnipeg in addition to those mentioned by the hon. member for London East (Mr. Turner). The hon. member for Winnipeg North Centre (Mr. Knowles) is 74 today, and his outstanding record of service is widely known and admired. The hon. member for Winnipeg North (Mr. Orlikow) today celebrates his twentieth year, as noted earlier, as a Member of Parliament, crowning a career which includes being a member of a school board, being on a city council, and being an MLA. I therefore move, seconded by the hon. member for Brant (Mr. Blackburn):
That this House offers both these gentlemen congratulations and best wishes on this important day in their lives.

June 18, 1982


Some hon. Members:: Hear, hear!


Madam Speaker:: The hon. member for Cowichan-Malahat-The Islands (Mr. Manly).


INDIAN AFFAIRS
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Madam Speaker, yesterday in his speech the hon. member for Prince George-Peace River (Mr. Oberle) said, and I quote from page 18561 of Hansard:
-in British Columbia responsible native political leaders have been starved out and the department has purchased itself the kind of help from among the Indians who may be prepared to sell out their brothers and sisters for their own selfish gain. They will no doubt be the representatives at the conference.
This is a slur on many responsible Indian leaders in British Columbia, and particularly on Chief James Gosnell, who was elected by the Aboriginal Peoples Constitutional Conference in British Columbia to be the spokesman for British Columbia Indians at the constitutional conference. Chief Gosnell is a fighter for his people and is not the kind of person-


Some hon. Members:: Order.


Madam Speaker:: Order, please. Is the hon. member making a speech or presenting a motion?


James Douglas Manly: Madam Speaker, I move:
That the House give the hon. member for Prince George-Peace River unanimous consent to rise in his place at the earliest opportunity and withdraw the remarks and apologize to the Indian people of British Columbia and to their leaders.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE MINISTRY
Mr. Geoff Scott (Hamilton-Wentworth):: Madam Speaker, under the provisions of Standing Order 43, and seconded by the hon. member for Calgary West (Mr. Hawkes), I move:
Given the fact that the salary of the Minister of Finance now stands at $102,100. which means that at 25 cents a throw he can play 408,400 video games of Pac-Man, and since this could take several years of the minister's time, that we all send the man packing.


THE ECONOMY
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, whereas the dollar has reached its lowest level since Confederation, and interest rates have reached their highest level in many months, I move, seconded by the hon. member for Waterloo (Mr. McLean):
That the Minister of Finance (Mr. MacEachen) explain to the House how he has managed to have a dollar that is so devalued, interest rates and unemployment that are so high, and galloping inflation, all at the same time, something economists have never seen before.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ENVIRONMENTAL AFFAIRS
Mr. Derek Blackburn (Brant):: Madam Speaker, I too rise under the provisions of Standing Order 43 to present a motion on a matter of urgent and pressing necessity. In view of the fact that negotiations with the United States with respect to acid rain have collapsed almost totally, and whereas the lacklustre and ineffectual performance of the Minister of the Environment has contributed to a considerable degree to this failure, I move, seconded by the hon. member for Mission-Port Moody (Mr. Rose):
That the minister immediately reactivate the subcommittee on acid rain, a request the committee members themselves made many months ago, so that the committee can continue its discussions on acid rain with its United States political counterpart where progress was being made last year before its work was abruptly terminated by the government.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE MINISTRY
Mr. Albert Cooper (Peace River):: Madam Speaker, whereas all things that come from on high are not necessarily good for one's health, I move, seconded by the hon. member for Okanagan North (Mr. Dantzer):
June 18, 1982

That if the Minister of Finance is out walking on Parliament Hill today, he keep his head up so that he does not get run over by a falling truck.


Some hon. Members:: Oh, oh!


Madam Speaker:: Oral Questions.



ORAL QUESTION PERIOD


Hon. Sinclair Stevens (York-Peel):: Madam Speaker, my question is for the Minister of Finance. Would he explain to the House why Canada has to live with a 18.25 per cent prime rate, a rate higher than such countries as Japan, Switzerland, Holland, the United Kingdom, West Germany, France, the United States and Belgium-indeed it is twice the rate of places such as Singapore or Spain-bearing in mind the havoc it is wreaking on millions of Canadians from coast to coast?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I think the hon. member is quite aware of the trends of the last short period which have resulted not only in pressure on the Canadian currency but also in a very regrettable rise in the prime bank rate yesterday. Short-term interest rates have been strengthening in the United States. That has an impact on Canada. The United States currency has strengthened against the Canadian dollar and against all currencies. That is the explanation why, at the present time, the Canadian currency and the Canadian prime rate have been affected.


EXCHANGE VALUE OF DOLLAR-LEVEL OF RESERVES
Sinclair McKnight Stevens: Madam Speaker, I have a supplementary question for the Minister of Finance. The minister must be aware of the fact that today our dollar touched the low of 77 cents in relation to the United States dollar. That is 7 cents below where it was when the minister introduced his budget last November. The minister has lost $1.4 billion in our foreign exchange fund so far during the month of June defending the dollar. This is at the rate of $100 million for every business day. Would the minister indicate to the House what exactly his strategy is with respect to the Canadian dollar? How does he intend to recover those lost reserves? Is the minister going to back into the lines of credit that were established, or sell off gold that we now hold?


Allan Joseph MacEachen: Madam Speaker, I think the expression used by the hon. member when he described the use of reserves
Oral Questions
was that they were being lost. The expression has also been used in the House that these reserves have been spent.


Mr. Lawrence:: It is a hemorrhage.


Allan Joseph MacEachen: The hon. member knows that what happens is that American dollars are transferred and converted into Canadian dollars. These are added to the cash balances of the Government of Canada. There are no funds lost. There are no funds spent. American dollars are converted into Canadian dollars. I believe that is a very important point for the hon. member to understand.


GOLD RESERVES
Sinclair McKnight Stevens: Madam Speaker, I have another question for the Minister of Finance who must be aware of the fact that he began this month with reserves of approximately $2.8 billion. He is now left with approximately $1.3 billion in reserves. How does the minister intend to replenish that loss of funds? Does he intend, as is rumoured, to continue selling off gold, or does he intend to back into lines of credit? Would the minister inform the House whether he is going to try to clear the picture by finally bringing in a new budget at the earliest opportunity so as to get some certainty back into the Canadian business community?


Allan Joseph MacEachen: Madam Speaker, it is not the intention of the Government of Canada to sell off its gold reserves. As I believe the hon. member knows, my predecessor had established a practice of selling off, as appropriate, certain amounts of gold reserves.


Mr. Gamble:: That is good advice.


Allan Joseph MacEachen: But that has not been the practice in an effort to iron out fluctuations in the Canadian dollar. We do have standby lines of credit with the banks and we draw on these as required. I believe the hon. member will agree with me that the use of these reserves for the purposes indicated does not represent a loss. It does not represent an expenditure. It represents a transfer of American currency into Canadian dollars which are added to the cash balance.


Sinclair McKnight Stevens: Is it a good thing?


Allan Joseph MacEachen: The hon. member is attempting to create the impression that these funds are in some way lost and have vanished into thin air, but that is not the case.


LEVEL OF INTEREST RATES-GOVERNMENT POSITION
Miss Pat Carney (Vancouver Centre):: Madam Speaker, my question is also for the Minister of Finance. The average Canadian is so angry at the minister's economic policies that one of them has come to Parliament Hill and placed a truck on a crane outside this chamber right now. The reason, of course, is the increase in interest rates, which means that Canadians
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June 18, 1982
Oral Questions
renewing their mortgages may be paying between 19.25 per cent to 20.25 per cent, and owners of small businesses, like the man outside with the crane, will be paying between 19.75 per cent and 22.25 per cent on loans just to stay in business. A major retailer in Vancouver, Margetson-Lee, is going under. What answer does the minister have to give to these businessmen and Canadians? How can he reconcile these latest increases in rates with his promise made to the House on June 1 that he proposed to do everything possible to bring interest rates down?


Allan Joseph MacEachen: Madam Speaker, it is the intention of the government to do everything possible to bring down interest rates. There are various proposals which are being made to bring down interest rates that, in my view, would be more damaging to the Canadian economy than the present situation. 1 have noted that the Right Hon. Leader of the Opposition on one or two occasions was asked with respect to the inter-relationship between the Canadian and the American dollar and between Canadian and American interest rates, and that he himself acknowledged that he had not found a different way of handling the problem.


Mr. Clark:: That is a falsehood.


Allan Joseph MacEachen: I hope, if hon. members have a different way, or have an alternative, that they will bring it forv/ard.


REQUEST THAT BUDGET PROVISIONS BE WITHDRAWN
Pat Carney: Madam Speaker, my supplementary question is directed to the Minister of Finance. While he tells Canadians to abandon hope, our alternative, as he requested, is for him to abandon his budget.
A special government survey of business investment intentions for 1982 indicates that for the first time in 14 years there may be no real increase in business investment and that investment plans for the year are down 5 per cent in the last six months. The minister knows that the reason for this drop in investment is because of the hostile environment created by his budget provisions. How can he justify his delay in withdrawing those measures in the budget which are creating the depressed economy?


Allan Joseph MacEachen: Madam Speaker, 1 once again disagree totally with the hon. member's premise. The hon. member has the very false idea that the recession through which Canada is going at the present time is somehow related to the tax measures of the last budget.


Some hon. Members:: It sure is.


Allan Joseph MacEachen: If she pursues that line of logic, she might explain how these tax measures could affect the United States, how they could affect West Germany, or how they could affect
every European country. Could she explain how the tax measures in the Canadian budget have brought about 30 million unemployed in the OECD area? Her questions and her analyses are so amateurish that they hardly deserve a reply in the House of Commons.


REQUEST THAT INCREASE IN PRIME RATE BE HALTED
Hon. Edward Broadbent (Oshawa):: Madam Speaker, when it comes to running the financial affairs of the country, the Minister of Finance is the last person in Canada who should call anyone else an amateur.
The Government of Canada has had the brilliant policy of favouring a perpetual rise in interest rates as a means of artificially propping up the dollar. As every Canadian knows, that has not worked to keep the dollar up, but it has worked in the destruction of businesses and jobs. Considering that since the Versailles meeting alone the prime rate has gone up a full 1.25 per cent and that, as a result, with understated figures,
1.000	businesses are likely to go right out of business and
25.000	more men and women will likely lose their jobs when those businesses disappear, will the Minister of Finance take immediate steps to ensure that there will not be another rise in the prime rate in Canada?


Allan Joseph MacEachen: Madam Speaker, the hon. member asks that the government take immediate steps to prevent a further rise in the prime rate. I assure him that no one regrets more the increase in the prime rate at the present time.
I want to assure the hon. member that, rather than favouring an increase in the prime rate, and rather than favouring an increase in the bank rate, the government and the Governor of the Bank of Canada have done everything possible under the circumstances to prevent a further rise in the Canadian bank rate, and subsequently in the Canadian prime rate. The hon. member can be assured that we are doing everything possible to prevent these increases. But I do not believe that there is an alternative policy to be employed in the present circumstances that would not have the effect, in a very short time, of putting additional pressure on current interest rates in Canada. I wonder if the hon. member believes that it is possible for this country to insulate and isolate itself, in a sense, from all the market forces in other countries. That is the alternative policy that he must have deep in his mind when he asks a question like the one he just asked a moment ago.


John Edward Broadbent: I have no such empty-headed isolation policy in mind. The minister has already heard in the House today that there are least a half dozen countries, and many more industrial countries, that have interest rates which are substantially lower than our interest rates that are due to the interest rate policy pursued by the Government of Canada.
June 18, 1982


REQUEST FOR CHANGE IN GOVERNMENT POLICY
John Edward Broadbent: Madam Speaker, considering that other countries are able to have lower interest rates, not simply because they do not have the same proximity to the United States as we do, but because they primarily have sound economic policies provided by their governments for their people to create business confidence, why does the Minister of Finance not duplicate that? In short, why does he not announce that there will be a major new direction in government policy in Canada by the end of next week at the latest, and restore some international confidence in the Canadian economy?


Allan Joseph MacEachen: Madam Speaker, the hon. member is correct in saying that there are some countries that have lower prime rates than Canada. The two notable cases which he could bring to mind, of course, are Japan and the Federal Republic of Germany.
The reason in both cases is that they have been able to establish inflation rates much lower than Canada's. The hon. member knows that, and must understand that it is a basic fact of life. Further to that, he understands as well that there is quite a difference in the relationship between Canada and the United States. The size of our trade account and the size of our capital flows with the United States are very large indeed in comparison to any of these other countries.
We have benefited in the past from our economic relations with the United States. We have benefited from that very large market, and in these circumstances we are being harmed by that very same source because of the extraordinarily high real interest rates in that country and the impact that this has on our capital markets and on our currency. That is the point that has to be understood. These rates in the United States, as Mr. Brock said this past week, are tragically high. They are holding back recovery in the United States and in Canada. That is the difference between our situation and that of the other countries to which the hon. member makes reference.


ROLE OF RESEARCH AND DEVELOPMENT
John Edward Broadbent: Madam Speaker, since the two points that the minister has just made are indeed inextricably related and should show the Government of Canada the reason for change, I would ask him to consider that it is true that West Germany and Japan have had lower inflation rates but the reason for this is that they have had an industrial manufacturing strategy policy for years which has emphasized research and development. They have put emphasis on creating a first rate manufacturing sector. Why does the Government of Canada not duplicate that instead of selling off resources, getting us into more debt in the short run in that line?
Second, considering the minister's reference to the United States, I, too, agree with what he said. We have carried on
Oral Questions
major trading with the United States, but considering that that trade has resulted in massive, billion dollar deficits with the United States in manufacturing goods, which has caused the drain on the dollar, why does the Government of Canada not move to redress that imbalance which would produce a better value for the Canadian dollar and more jobs for Canadians?


Allan Joseph MacEachen: Madam Speaker-


Mr. Nielsen:: Do you understand the question?


Allan Joseph MacEachen: Madam Speaker, the hon. member has raised a number of points-


John Edward Broadbent: Yes, in reply to yours!


Allan Joseph MacEachen: -and I have no complaint about that. I believe the hon. member has accepted a good part of my analysis of the situation.


John Edward Broadbent: But want some action to get out of it.


Allan Joseph MacEachen: Madam Speaker, yes, he has related a better performance in the Federal Republic of Germany, for example, to its insistence or emphasis on research and development, as I understood the question. I have no intention of dismissing that as an important factor, because the Government of Canada is also placing a very strong priority on research and development.


Some hon. Members:: Oh, oh!


John Edward Broadbent: Who are you kidding?


Allan Joseph MacEachen: But when I listened to the Chancellor of the Federal Republic of Germany at the Summit, a friend of the hon. member for Oshawa-


Allan Frederick Lawrence: And of your own Prime Minister.


Allan Joseph MacEachen: -his explanation, as I understood it, for the strong performance in the Federal Republic of Germany at the present time was the restraint demonstrated by the trade unions in their wage settlements.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: I think it is worth telling the hon. member, in the interest of dialogue, that the Chancellor pointed out to us that the largest industrial union in the world, the German Metalworkers, recently made a settlement lower than the rate of inflation in an effort to bring the rate of inflation down further, in that country. But I believe that is a very important element in any economic policy. I ask the hon. member, does he subscribe to the belief that in the present circumstances wage settlements and income demands, not just those of workers but of those in all sections of society, including managers, executives and businessmen, in order to get us out of this difficulty, ought to be restrained and that those people

June 18, 1982
Oral Questions
should reduce their income demands upon the economy? Does he agree with that?


Some hon. Members:: Hear, hear!


Madam Speaker:: The Right Hon. Leader of the Opposition.


Charles Joseph Clark: Madam Speaker, I will wait until the Minister of Public Works has finshed having his nervous breakdown before I put my question.


Some hon. Members:: Oh, oh!


Mr. Cousineau:: How low can you get, Joe?


NATIONAL ENERGY PROGRAM
Charles Joseph Clark: Madam Speaker, we have just heard the Minister of Finance referring once again to policies in countries other than Canada and refusing to address the urgent need for his government to act in a way which will solve problems which his government has created here in Canada. A moment ago he said that his government wants to do and is doing everything possible to prevent increases in interest rates in this country. He knows that the National Energy Program is driving investment out of this country which could create jobs, investment which must earn high interest rates in order to be kept here or be brought back. Why, then, if he is doing everything possible, will he not withdraw or change the National Energy Program?


Some hon. Members:: Hear, hear!


Mr. Lalonde:: It is supported by all the provinces.


Allan Joseph MacEachen: Madam Speaker, the hon. member has raised the question of the National Energy Program and has asked us to withdraw the program as a way of helping the current situation. The National Energy Program is an essential part of the policy of this government-


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: -because we believe that it is essential that Canadians get greater ownership and control of this strategic sector of our economy. That is our belief, and the right hon. gentleman-


Mr. Andre:: Why are you putting the boots to the Canadian-owned companies then?


Allan Joseph MacEachen: -is entitled to have a different view, but that is the view of the Government of Canada.
Recently the Minister of Energy, Mines and Resources did make-


Allan Frederick Lawrence: You want government control, not Canadian control.


Allan Joseph MacEachen: -some very important adjustments in order to assist this industry and in order to provide a greater cash flow for the various firms in the industry. That is our attitude. We are prepared to make adjustments as a result of changing circumstances, but we are not prepared to withdraw the National Energy Program.


Some hon. Members:: Hear, hear!


Allan Frederick Lawrence: And you are wrong!


FINANCE
Charles Joseph Clark: The
Acting Prime Minister, the Minister of Finance, knows that his program has bankrupted Canadian energy industries and has aided only the Arabs. But the point we are making here is that he has just solemnly said that he is prepared to do everything possible to prevent high interest rates. It is absolutely 100 per cent clear that the National Energy Program is driving away investment and that we must use high interest rates to bring investment back here. If he were telling the truth about wanting to bring interest rates down, he would get rid of the National Energy Program because it is driving interest rates up. That is absolutely clear.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: He says that he wants to do everything possible to bring interest rates down. He has brought in a budget, the effect of which has been to drive investment out of this country and to undermine investor confidence which must be restored by high interest rates. If he wants to do everything possible to decrease interest rates in this country, why will he not withdraw those provisions of his budget which are causing increases to interest rates in this country? If he wants to be believed and wants us to think that he is telling the truth-


Some hon. Members:: Question.


Charles Joseph Clark: -why will he not withdraw those measures of his government which are causing interest rates in Canada to go way up?


Allan Joseph MacEachen: Madam Speaker, I want to tell the Right Hon. Leader of the Opposition that there are no such measures in the budget which are causing-


Some hon. Members:: Oh, oh!


Harvie Andre: Read it, for goodness' sake!
June 18, 1982


Allan Joseph MacEachen: -interest rates to be sent way up, as the Leader of the Opposition puts it. There are no such measures. The Leader of the Opposition knows that, because he cannot specify such measures.


IMPACT ON INTEREST RATES
Charles Joseph Clark: Just so that I can be clear and the people of Canada can be clear-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: -I would like to ask the minister another question. We know that it is not the position of at least 27 members in the Liberal Party who have attacked the budget and the national energy policy because of their effects on creating unemployment in Canada and driving interest rates up, but just so that we have some understanding of the extent of the ignorance and naivete of the Minister of Finance-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: -is he telling the House of Commons that the National Energy Program has no effect on Canadian interest rates and that the budget he brought in has no effect on Canadian interest rates? Is that what he is telling us?


Allan Joseph MacEachen: What 1 am telling the Leader of the Opposition is that the specific measures in the budget have not had and do not have the effect of sending interest way up in Canada.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: When the Leader of the Opposition wants to mention specific measures that he has in mind which are having the effect of sending interest rates up, then I will consider them. He is unable to do it, and if he refers to naivete and ignorance of economic policy, I do not think that there is a better demonstration than that given by him every time he rises to ask a question on the economy.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


MEASUREMENT OF IMPACT
Charles Joseph Clark: Madam Speaker, I am prepared to take such glimmers of progress as we can find. The Minister of Finance has changed his position again. He said that the government is not pushing interest rates way up. Is he prepared to concede that this budget policy and his energy programs are pushing interest rates a little bit up in Canada?


Some hon. Members:: Oh, oh!


Charles Joseph Clark: If he is prepared to accept the reality that they are, and if he wants to be believed when he says that he is
Oral Questions
doing everything possible to bring interest rates down, will he change those provisions of his policy which he indicates are pushing interest rates a little way up in Canada?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, 1 have not made any such indication. I have asked the Leader of the Opposition for the third time to specify the specific items in the budget that he believes are sending interest rates way up. For the third time he has failed to do so, and he has failed to do so because he does not know.


Some hon. Members:: Hear, hear!


THE ECONOMY
Hon. Don Mazankowski (Vegreville):: Madam Speaker, surely the Minister of Finance should recognize by now that his economic policies have produced the worst of all possible worlds. Through his economic policies he has created crippling interest rates, destructive inflation, higher unemployment, no growth, no confidence in the economy, and a disaster for the Canadian dollar. Furthermore, he has caused farm bankruptcies and business bankruptcies to reach an all time high. How long does the minister intend, as Minister of Finance, to pursue these destructive policies which are destroying the economic fabric of Canada?


Allan Joseph MacEachen: Madam Speaker, when the hon. member wants to ask a question rather than make a series of rhetorical statements, 1 will be pleased to answer his question. I do not intend to get on to this kind of rhetorical trend that the opposition is using when its members really cannot put together concrete specific questions.


DOME PETROLEUM-GOVERNMENT POSITION
Donald Frank Mazankowski: Madam Speaker, in addition to the record number of business failures, small business failures, and farm bankruptcies, we now know that on the horizon there is a number of big name bankruptcies looming, and specifically Dome Petroleum. May I ask the Minister of Finance if the government is considering any kind of a bail-out provision for Dome Petroleum and, if so, what is it? Has he had any discussions with the Minister of Energy, Mines and Resources, or are we simply going to ignore the small business enterprises and bail out some of the pets of the Government of Canada?

June 18, 1982
Oral Questions


Allan Joseph MacEachen: I thank the hon. member for ending his statement with a question. The answer to that question is no.


SMALL BUSINESS
Mr. David Orlikow (Winnipeg North):: Madam Speaker, I wish to direct a question to the Minister of Finance. Governments, both federal and provincial, have been urging Canadian business to concentrate more on new fields such as microelectronics and high technology. Given the fact that the Canadian government and provincial governments are amongst the highest purchasers of these kinds of products, given the fact that small business in Canada is almost 100 per cent Canadian owned and provides 60 per cent of all the jobs in Canada, and given the fact that in the United States 30 per cent of all government purchases are specifically directed to small business, would the government give consideration to adopting that kind of policy, so that small business which is facing increasing difficulties and thousands of bankruptcies- would be able to survive in the difficult period we are experiencing?


Allan Joseph MacEachen: Madam Speaker, the question is directed to me. It seems to be a question more clearly directed to the Minister of Industry, Trade and Commerce, but I will take notice of the question on his behalf because it has to do with policy.


REQUEST FOR ASSISTANCE MEASURES
David Orlikow: This is a supplementary, Madam Speaker, to a question asked a few moments ago by one of the Conservative Party members. In testimony before the Finance, Trade and Economic Affairs committee which has been looking into bank profits, it has become apparent that our Canadian banks have been very ready to make very large loans to large Canadian corporations for takeover purposes, loans which these companies have not been able to repay, and on which very frequently they have not even been able to meet the interest payments. At the same time Canadian banks have been calling in loans of small businesses, increasing the demand for collateral, and have been forcing, as the minister knows, close to 5,000 small businesses this year into bankruptcy. Can the minister say what specific steps, if any, he is going to propose to alleviate the difficulties of the small business community; or are we to except, not 10,000 bankruptcies, which we will have at the present rate, but possibly 15,000 bankruptcies by the end of 1982.


Allan Joseph MacEachen: Madam Speaker, the hon. member had based his question on evidence which he alleges was presented
before the Standing Committee on Finance, Trade and Economic Affairs. I am pleased that the committee is studying all these questions. When the committee reports, which I hope will be very soon, I will be pleased to consider any specific recommendations which its members propose with respect to the operation of the banks and the practices which they follow in making loans. If the committee recommends legislative changes to the Bank Act, based upon the evidence, then of course that would also be considered by the government.


THE ECONOMY
Mr. Vince Dantzer (Okanagan North):: Madam Speaker, my question is also directed to the Minister of Finance. The minister may know that in the last week of May, Liberals in the province of British Columbia held a convention. He may know also that several of his colleagues in the cabinet, also attended that meeting and that among them was the government leader in the Senate. The Vancouver Sun dated May 29 quotes that person as saying the following:
The federal government has major initiatives up its sleeve designed to revive the economy and create jobs-
Did the Government-and you will remember that this was before the congress at Versailles-on May 28 have major initiatives up its sleeve, to revive the economy and create jobs, while still controlling inflation?


Allan Joseph MacEachen: Madam Speaker, there are lots of things up one's sleeve. The important thing is when they are taken out.


QUERY RESPECTING CABINET POLICY
Vincent Martin Dantzer: Madam Speaker, I would hope that the Minister of Finance would shake his sleeve and tell the 1.2 million unemployed what major initiatives he has, and this government had on May 28 of this year. Otherwise, can he explain to this House if it is a policy of this cabinet, in which he is the Acting Prime Minister, to allow ministers to flim-flam the people of western Canada and mislead them by double-talk and double-think?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, I have not seen the statement to which the hon. member refers. I have not discussed the matter. 1 will be pleased to look into the source of the hon. member's information. I would tell him in reply to his interest that, as I indicated earlier in the week, I intend to be making a statement to the House. Whatever is up the sleeve or out of the sleeve will be disclosed at that time.


Some hon. Members:: Hear, hear!
June 18, 1982


AUTOMOTIVE INDUSTRY
Mr. Bud Bradley (Haldimand-Norfolk):: Madam Speaker, my question is directed also to the Minister of Finance. In the minister's budget of November 12 he reduced the capital cost allowance on automobile rentals from 30 to 15 per cent. Since that time he has rescinded part of that directive and has actually increased the capital cost allowance on daily rentals. I suppose that would include people such as Hertz and Avis. He has increased it to 40 per cent. At the same time he left the automobile dealers of this country, who lease cars, at the original 15 per cent rate. Will the minister, in order to correct this obvious imbalance which he has created, make an announcement in his economic statement to correct this double standard and give the automobile dealers of Canada who lease cars the same advantages as are given to the daily renters?


Allan Joseph MacEachen: Madam Speaker, if the hon. member can convince me that I have created a serious imbalance, or that 1 have applied a double standard, then of course I would be pleased to consider his representations. I do not believe that either has happened, that there is an imbalance or that there is a double standard in application.


REQUEST THAT MINISTER TAKE ACTION
T.A. Bud Bradley: Madam Speaker, I do not know what we have to do to convince the minister that there are problems facing small business in this country. One of the problems is that of the small businesses and the car dealers who lease cars. If a car dealer in Canada leases 400 cars at 15 per cent capital cost allowance, he stands to lose $67,000 in the first year. Now Statistics Canada tells us that car sales in Canada are at a ten-year low. The car dealers of Canada, Madam Speaker, do not need this Minister of Finance. They wrote to him on March 6, they have telephoned him numerous times since then, and they have yet to get an answer from the Minister of Finance. My supplementary to the minister is very simple: just what does he propose to do to correct this screw-up he has created?


Allan Joseph MacEachen: Madam Speaker, as I said to the hon. member, if he has a serious proposal to make and if he wants to demonstrate that there is an imbalance or a double standard, 1 would be pleased to listen to him, but in his question he has cited some statistics which I do not believe are correct or will stand up under examination.


T.A. Bud Bradley: Read your mail, Allan.


Allan Joseph MacEachen: If the hon. member wants to demonstrate that he has a case, I wish he would do so and not rely, as is the custom every day in the House of Commons, on rhetorical and abusive language in order to make a point.
Oral Questions FINANCE


AUTHORITY TO DISPOSE OF TAXPAYERS' PROPERTIES
Mr. Bill Kempling (Burlington):: Madam Speaker, 1 have a question for the Minister of National Revenue. In the budget papers of November 12 last, it is stated that the minister may acquire and dispose of any interest in a taxpayer's property that the minister is given the right to acquire in legal proceedings or under a court order. What is the dollar amount which would trigger the Department of National Revenue's seizing a taxpayer's home and selling it from under him, and what is the status of such a seizure if an objection or an appeal has been registered and has not been heard?


Hon. William Rompkey (Minister of National Revenue):: Madam Speaker, as far as I know the department does not actually get involved in seizing homes. There have been more instances in which, if all efforts to come to an agreement with the taxpayer have been exhausted, we obviously apply to the courts for the moneys that are owing to us. The sheriff in such a case would take whatever course of action is open to him under provincial law. However, to my knowledge there are no cases in which the Department of National Revenue has seized and sold homes. If indeed the member has a specific case he wants me to look into, I would be glad to do that.


William James Kempling: Madam Speaker, I am trying to prevent specific cases. I am wondering why this is in the act.


Marc Lalonde: Hypothetical.


William James Kempling: No, it is not hypothetical. The government has the power under the Income Tax Act to seize and sell chattels. It has the power to garnishee wages. It has the power to seize and sell assets, and the power to seize a taxpayer's bank account.


REASONS FOR DEPARTMENTAL POWERS
William James Kempling: Madam Speaker, I want to ask the minister why he is seeking the power to seize and dispose of a taxpayer's home. How much power does he want?


Bill Rompkey: Madam Speaker, we do not want, need or request any more power than we have at the present time, I know of no instances in which homes have been seized or sold by the Department of National Revenue.


William James Kempling: Why is it in the budget?


Bill Rompkey: I do know that in some cases it is proper for the department to put liens on bank accounts and to extract moneys from bank accounts; that is, proper under the law.


Charles Joseph Clark: Why are you seeking new power?


Bill Rompkey: I know of no cases in which homes have been seized and sold. If the hon. member has evidence of that, I would like to hear from him.

June 18, 1982
Oral Questions


Charles Joseph Clark: Read your budget. Maybe you missed the last two pages of the budget.


WORLD ASSEMBLY OF FIRST NATIONS
Mr. Simon de Jong (Regina East):: Madam Speaker, I wanted to address my question to the Secretary of State, but he is not here. The Minister of Indian Affairs and Northern Development and his parliamentary secretary are not here. I would like to address my question to anybody in the government who might be able to answer it. It is an important question, and time is running out.
My question concerns the type of government support that will be made available to the World Assembly of First Nations which will be held in Regina next month. This Assembly will attract indigenous people from all over the world. Thousands of people are expected to attend this event. Entertainers, and the international press will be there. On March 9, 1 wrote to the Prime Minister asking what type of support the assembly will be receiving from the federal government, but as yet I have not received a response. It is important that we are informed, because many people will be coming to Regina. There is a shortage of facilities in Regina. The organizers need some assistance from the government. Is the government prepared to say at this time whether it will be supporting the assembly?


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, the decision taken on that matter by the government is that the Assembly should be supported out of the regular budgets and existing programs of the various ministries. I can inform the hon. member, for example, that the RCMP has been invited to play a support role at that Assembly and that the force is delighted to do so.


REQUEST FOR ASSISTANCE
Simon Leendert de Jong: Madam Speaker, it is good to know that the government is willing to provide assistance in the form of RCMP officers, but is the government also willing to make assistance available in the form of providing accommodation, food, and health services to the 25,000 or
30,000	people who are expected to descend upon Regina next month? It is good to have police there if problems do arise, but what about some assistance to prevent problems from occurring?


Robert Phillip Kaplan: Madam Speaker, the police role to which I refer is not one of crowd control. It is participation in the event. The RCMP will be doing that because it was requested to do so.
With respect to the larger question, the support that will be forthcoming from the government will be limited to that which
can be provided by departments out of existing budgets and existing programs.


HOUSING
Mr. John McDermid (Brampton-Georgetown):: Madam Speaker, I have a question for the Minister of Finance. What words of encouragement and what hope can the minster give young people in Canada who wish to own their own homes?


Allan Joseph MacEachen: Madam Speaker, when young people in Canada address inquiries to me directly, I will be pleased to respond, but I will not attempt to provide advice and responses through the hon. member. He has a responsibility also to provide whatever advice he is asked for.


Allan Frederick Lawrence: Our advice is for you to get out.


PROPERTY TAX DEDUCTIBILITY PROGRAM-GOVERNMENT POSITION
John Horton McDermid: Madam Speaker, the minister knows very well downpayments are not the problem. The problem is carrying charges. The minister will be making a financial statement. Is he considering a mortgage interest and property tax deductibility program to get the construction industry out of the doldrums it is in today?


Allan Joseph MacEachen: Madam Speaker, if the hon. member is referring to the mortgage and tax deductibility program introduced in this House by my predecessor, 1 think the answer quite clearly is no.


Mr. Hnatyshyn:: Only in Saskatchewan you say.


AIRPORTS
Mr. Fred McCain (Carleton-Charlotte):: Madam Speaker, my question is directed to the Minister of Transport. I would like to know if he is still planning to divert flights which might affect Atlantic Canada or travellers to and from Atlantic Canada to Mirabel and, if so, has he consulted the various ministers of transport, the Atlantic Provinces Transportation Commission, the chambers of commerce of Atlantic Canada, or any others who might give advice on this matter respecting the cost and difficulty involved in any such transfers of flights?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, I know my hon. friends opposite try these days to
June 18, 1982

invent all kinds of questions having to do with Mirabel, but we have never had such intentions, so consequently I cannot comment further.


Fred Alward McCain: Madam Speaker, I hope that means the minister has abandoned the idea of transferring any flights within Canada to Mirabel.


COST OF GROUND TRAVEL BETWEEN DORVAL AND MIRABEL
Fred Alward McCain: Madam Speaker, if the minister is still considering this, which apparently he is, has he given any consideration to the cost which will be imposed upon the traveller who arrives in Montreal on a flight diverted to Mirabel and who may connect with Atlantic Canada? Conversely, has he given any consideration to the additional cost in terms both of time and money which will be involved for flights connecting from Dorval to Mirabel to other points of destination?


Jean-Luc Pepin: Madam Speaker, this question is very elementary. We investigated all possibilities, as 1 said, and at all times we had the interests of the carriers, the interests of travellers, and the interests of governments in mind. We were looking at all costs that any of the scenarios previously described would incur. The question is really a basic one. We looked at all possibilities. We looked at all factors.


THE ECONOMY
Mr. Arnold Malone (Crowfoot):: Madam Speaker, my question is directed to the Minister of Finance. Bearing in mind that the inflation rate is unacceptably high, that bankruptcies in the country are running rampant, that our dollar is at a record low level, and that the number of unemployed is the highest ever, would the Minister of Finance, who has used-today and frequently-the words "recession", tell us what is his definition of a depression? Most Canadians losing their businesses and homes consider this to be a depression.


Allan Joseph MacEachen: Madam Speaker, 1 do not have a definition of a depression because I do not think we are in a depression.


Arnold John Malone: Madam Speaker, perhaps 1 can help the minister by telling him that psychological depression is listening to an answer given by the Minister of Finance. An economic depression is receiving the results of actions taken by the Minister of Finance.


HIGH INTEREST RATES
Arnold John Malone: May 1 ask the Minister of Finance more specifically what is the reason that we have a
Point of Order-Mr. Andre
program of high interest rates if the result of such a program is for farmers, fishermen, businessmen and investors in the country to lose their businesses? What advantage is that to the country?


Allan Joseph MacEachen: Madam Speaker, 1 have explained, and the Prime Minister has explained, that we do not have a program of high interest rates. High interest rates exist, but they are certainly not sought or promoted by the Government of Canada.


PETITION
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the two hundred and seventy-first report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for Hamilton-Wentworth (Mr. Scott) on Thursday, June 17, 1982, and finds that the petition meets the requirements of the Standing Orders as to form.


POINT OF ORDER
Harvie Andre: Madam Speaker, the point of order 1 raise at this time is basically the same as the point of order I raised last year on June 1, March 31 and March 24, and which has been raised several times in the past by myself and others, going back to 1969 when the rules were changed in regard to the handling of the estimates and appropriation bills.
About this time last year, Madam Speaker, you summarized and clarified the position of the Chair in regard to this matter. If I might quote briefly from your remarks which appear in Hansard for June 12, 1981, on page 10456 you stated:
In 1971 the Chair ruled that items in the Estimates that attempt to amend existing statutes are of order. This was confirmed by most subsequent rulings.
In 1974 and 1976 the Chair went further and dealt with the question of matters of substance being put in the Estimates. The Speaker, in effect, ruled that the Appropriation Act is not the place to seek authority to do something such as to establish a program. Rather, the Appropriation Act should only seek authority to spend the money for a program that has been previously authorized by a statute.
In 1977 the Chair continued to lay down these principles that should be followed in the use of the Estimates and added that it makes no difference whether the item attempted to spend a large sum or simply one dollar. The distinction is unimportant. The test is whether or not the government is putting forward a spending estimate under authority it already possesses, or whether it is really seeking new legislative authority to do something.

June 18, 1982
Point of Order-Mr. Andre
You then quoted a previous Speaker and added in your own words:
In other words, the government may not by the use of an Appropriation Act obtain authority that it does not have under existing legislation.
In summary, Madam Speaker, you indicated first that estimates that amend legislation are out of order, saying that: "the Appropriation Act is not the place to seek authority" for a new program, and that the test bust be whether the government already has the authority to spend or the estimates seek that authority. You said that the government may not use the Appropriation Act to seek authority that it does not already have.
Based on that test, Madam Speaker, and based on those clear rulings made by yourself and your predecessors, I believe that there are a number of votes in the Main Estimates, 198283 which violate those principles laid down by yourself and your predecessor.
I should like to deal first with a number of votes which basically try to do the same thing, that is, they seek authority which does not appear in existing legislation. I should like to read from one of those votes, Madam Speaker. Communications Vote 1, which appears on page 3-6 of the Main Estimates, reads as follows:
Communications-Operating expenditures, the grant listed in the Estimates, contributions and authority to spend revenue received during the year ... 97,961,000.
The offending words are "and authority to spend revenue received during the year". What the vote says is that $97,961,000 is requested for operating expenditures for the grant listed in the estimates-although no grant is listed in the estimates-for contributions and the authority to spend additional money which will come into the Department of Communications by way of revenue. That is what that spending authority seeks to do, Madam Speaker.
I refer Your Honour to the definitions in the Financial Administration Act. Section 2(d) reads in part as follows:
"public money" means all money belonging to Canada received or collected by the Receiver General or any other public officer-
It goes on to define that as "money received or collected for or on behalf of Canada". Therefore, all money received by the government, whether the Department of Communications, the Receiver General or anybody else, through licences, fees or anything else, is public money according to the definition in the Financial Administration Act.
Section 11 provides that "all public money shall be deposited to the credit of the Receiver General". That is to say, all receipts in whatever form, licences, fees or what have you, are by definition public moneys and, by definition, are to go to the Receiver General and therefore, by definition, are to go into the Consolidated Revenue Fund.
Section 19 of the Financial Administration Act provides:
-no payments shall be made out of the Consolidated Revenue Fund without the authority of Parliament.
Section 20 states:
All estimates of expenditures submitted to Parliament shall be for the services coming in course of payment during the fiscal year.
That is to say, the estimates for the following year must clearly define the amount of money to be spent for that particular service. An estimate cannot just say that a department has additional authority to spend whatever receipts may come in by virtue of fees or licences or whatever.
Section 21 provides that where an appropriation is made for any purpose in any act of Parliament, there must be a warrant from the governor in council and that must be appropriated from the Consolidated Revenue Fund.
As proof of the legal interpretation of the intent of this act, 1 bring to Your Honour's attention Bill C-96, to amend the Financial Administration Act, which has been introduced for first reading. Clause 7 of that bill states as follows:
The said Act is further amended by adding thereto, immediately after section 20 thereof, the following section:
"20.1 (1) A vote in an Appropriation Act may provide that receipts and
revenues may be spent for the purposes specified in that vote."
What this attempts to do is to make legal and proper what is attempted in Vote 1 of the Department of Communications estimate by use of the phrase "and authority to spend revenue received during the year".
Clearly the legal officers in Treasury Board have recognized that they do not have the authority in that provision to spend revenue, and by the vote seek to get that authority by putting in the words "authority to spend revenue received". Through changes to the Financial Administration Act in Bill C-96, they are seeking to make it legal, so that they will not to have to acquire the authority through an Appropriation Act.
If a Vote in the Estimates relates to a bill not yet passed by Parliament, then the authorizing bill must become law before the authorization of the relevant Vote in the Estimates by an Appropriation Act.
So it is quite clear that if Bill C-96 was passed, there would be authority to spend those receipts. If it is not passed, there is no authority. They are seeking through the estimates to achieve that authority, and that is inappropriate according to Citation 486 of Beauchesne.
In addition, Madam Speaker, I would like to bring to your attention several other votes which concern us in the same way. Communications, Vote 70, dealing with the National Museum, reads:
-authority to spend revenue received during the year from the sale to the public of books-
And so on. Those are public funds to go into the Consolidated Revenue Fund according to the Financial Administration Act and the spending thereof must be authorized by a specific vote. That portion of the vote is out of order; that is, the authority to spend receipts. Communications, Vote 80 is the same, dealing with the Public Archives.
Citation 486 of Beauchesne's fifth edition provides:
June 18, 1982

Energy, Mines and Resources, Vote 1; Environment, Vote 5; Finance, Vote 1; Public Works, Vote 10; Supply and Services, Vote 1; Transport, Vote 1, Vote 10, all end with the phrase;
Program expenditures and authority to spend revenues received during the year.
Transport, Vote 45 reads:
-and authority to spend revenue received during the year including the spending of an amount equal to, in the opinion of the Minister of National Revenue, the amount received-
And it goes on. Clearly, Madam Speaker, those votes seek authority which does not exist under current legislation. The government is in fact attempting, through Bill C-96, to gain that authority. If it succeeds, then presumably it would not need that language to seek that authority; but at this point in time it does not have that authority.
In spite of the Chair's very clear rulings there is one vote- perhaps two others, but I am not certain so I will not raise them now-which seeks to amend legislation. I am referring to Privy Council, vote 1 which states:
Program expenditures, including the operation of the Prime Minister's residence; the payment to each member of the Queen's Privy Council for Canada who is a minister without portfolio or a Minister of State who does not preside over a Ministry of State of a salary equal to the salary paid to Ministers of State who preside over Ministries of State under the Salaries Act, as adjusted pursuant to the Senate and House of Commons Act-
The Salaries Act, as amended last July, states the remuneration to be paid to each minister. Section 5 states:
The salary of each Minister of State, being a member of the Queen's Privy Council for Canada, who presides over a Ministry of State is $30,800 per annum.
What Vote 1 of the Privy Council seeks to do is amend that act, because it says that ministers of state who do not preside over a ministry of state will have a salary equal to that paid to a minister of state who does preside over a ministry of state. That is exactly parallel, Madam Speaker, to a vote which you ruled out of order, appropriately so, last year, being vote 30 of Agriculture in the 1981-82 Main Estimates. That vote stated, and I quote:
Agri-Food Regulation and Inspection-Contributions including compensation at rates determined in the manner provided by Section 12 of the Animal Disease and Protection Act to owners of animals affected with diseases coming under that Act that have died or have been slaughtered in circumstances not covered by the Act.
So that vote attempted to extend the act to situations not covered by it. Quite properly, Madam Speaker, you ruled that was an amendment to the legislation. Privy Council, vote 1 does exactly the same thing, and is clearly out of order based on your ruling of last year.
Another series of votes which I believe to be out of order is Public Works, Votes 15, 25 and 35, which seek authority for expenditures not authorized under existing legislation. Vote 15 reads:
Capital expenditures including expenditures on works on other than Federal property and authority to reimburse-
And so on. The key words are "expenditures ... on other than federal property". Madam Speaker, the Public Works Act in Section 9 provides:
Point of Order-Mr. Andre
The Minister has the management, charge and direction of the following properties belonging to Canada, and of the services in this section enumerated, namely:
And then subparagraph (h):
-all other property that now belongs to Canada and the works and properties acquired, constructed, extended, enlarged, repaired or improved at the expense of Canada, or for the acquisition, construction, repairing, extending, enlarging or improving of which any public money is voted and appropriated by Parliament-
So what this act says is that when the minister spends any money extending, improving, etc., any property, it belongs to Canada. That property belongs to Canada. There is no authority granted to spend money on non-government-owned property. If the minister improves the buildings, puts in leasehold improvements, they become the property of the minister. The only exception is when there is a distinct subsidy involved.
I would also point out that the recognition of that fact is obvious from Bill C-91, which has been given first reading only, which states in Clause 1:
The Minister may, with the approval of the Governor in Council, incur expenditures or perform, or have performed, services or work in relation to
(b) properties not belonging to Canada.
What Bill C-91 would do if it were passed is give the minister legal authority to do what he is attempting to do through Votes 15, 25 and 35 in the estimates. No authority exists for the minister to spend public moneys on non-public property based on Section 9 of the Public Works Act. Bill C-91, which has not been passed by this House, seeks to give the minister that authority, but until it is passed it is now law.
Again, I refer to Citation 486, I believe it is, of Beauchesne which says that you cannot anticipate legislation in the estimates. A vote is out of order until the legislation is passed.
The other class of votes which are out of order are those perhaps best demonstrated by IT and C votes 25 and L35 on page 14-6. It is my submission that these votes attempt to create a new program which is clearly contrary to the decision you made last year at this time, Madam Speaker, when you said:
-the Appropriation Act is not the place to seek authority to do something, such as to establish a program.
I might refer in particular to Grants Vote 25, which reads:
Payments in accordance with terms and conditions approved by the Governor in Council to companies engaged in ship repair on the Canadian east and west coasts for the construction and extension of dry docks and for the purchase and construction of supporting facilities.
There is no program of that sort, Madam Speaker. Perhaps there should be. We are not speaking against the program. The telltale language there is the terms and conditions approved by the governor in council. In essence, we are being asked to delegate to the governor in council authority to set up this program under the terms and conditions the government decides. That is not in keeping with your ruling, Madam Speaker.
Vote L35 is perhaps a more obvious example of attempting to set up a new program. This vote reads:

June 18, 1982
Point of Order-Mr. Andre
Loans in accordance with terms and conditions prescribed by regulations of the Governor in Council,
(a)	for the purpose of promoting the establishment, growth, efficiency or international competitiveness of Canadian industry and to foster the expansion of Canadian trade to a person engaged or about to engage in a manufacturing, processing or other commercial activity; or
(b)	to a person who has previously obtained assistance under a program of assistance to industry or any trustee or receiver authorized by law to carry on the business of such person for the purpose of protecting the Crown's interest resulting therefrom.
Very clearly, vote L35 would give the governor in council regulation-making authority. We are being asked through Vote L35 to give the governor in council the right to make law, the right to make regulations, to set up a whole new program to promote the establishment, growth, efficiency or international competitiveness of Canadian industry. No one is arguing about the merits of the program. Clearly it is a whole new program complete with its own set of laws and regulations which Parliament is being asked to authorize through an appropriations bill. That is clearly contrary to the conditions of your ruling of last year.
Vote 40 of Public Works, which is found on page 23-54, reads:
Land Management and Development-Program expenditures, contributions and authority for Toronto Harbourfront Corporation to spend revenues received during the year in respect of Toronto harbourfront properties owned by Her Majesty and payments to a corporation to be established for the purposes of developing the port properties of Chicoutimi owned by Her Majesty.
That is out of order for two reasons. First, the authority to spend revenues. These are Her Majesty's revenues which are public moneys and which should go into the Consolidated Revenue Fund according to the Financial Administration Act. But we are being asked to delegate the authority to spend those revenues to the Toronto Harbourfront Corporation, which is a Crown corporation of some sort, I guess. It is one of the mysterious 400 Crown corporations that are making life so wonderful for Canadians. In any event, it is clearly contrary to the Financial Administration Act.
Second, it is for the purpose of payments to a corporation to be established. The government is asking us for authority through this vote to establish a new Crown corporation. That clearly goes way beyond what is the proper role for a vote as articulated by yourself and your predecessors, the Hon. Mr. Jerome and the Hon. Mr. Lamoureux. Those votes are clearly out of order.
One last vote which is clearly out of order is Secretary of State, Vote 40. This one is almost an affront to the House. It is out of order because the government relies on an authority that exists but is not valid. At page 26-42 we find Vote 40, which
reads:
Contributions, and authority to make payments out of the Consolidated Revenue Fund and to charge said payments to the National Lottery Account, for the purpose of physical fitness, amateur sport and recreation programs in accordance with terms and conditions prescribed by order of the Governor in Council, the aggregate of said payments and payments made pursuant to paragraph (d) of Treasury Board Vote L27a, Appropriation Act No. 4, 1976, not to exceed at any time 5 per cent of the aggregate of the amounts credited to the National Lottery Account.
It relies on its authority for paragraph (d) in the Appropriation Act No. 4, 1976, Vote L27a. However, if you look at Vote L27a of the Appropriation act No. 4, 1976, it states: "To provide, in respect of Loto Canada". I shall put on the record paragraph (d) of Vote L27a. It reads:
(d) in the current fiscal year, for the purpose of physical fitness, amateur sport
and recreation programs in accordance with terms and conditions prescribed
by order of the Governor in Council, of an amount not to exceed 5 per cent of
the amount credited to the said Account in the current fiscal year; and-
In other words, this authority, the Appropriation Act No. 4, 1976, which is used in Vote 40 of the Secretary of State's estimates for 1982-1983, has essentially been dead for six years. The government is using authority which ended at the end of that fiscal year. "In the current Fiscal year" is the operative language.


Mr. Beatty:: It is like the Minister of Finance (Mr. Mac-Eachen), who has been dead since last November.


Erik Nielsen: But he will not lie down.


Harvie Andre: I will point out that the rest of the vote looks like it is setting up a program as well, and probably should have been ruled out of order on its merits.
You may notice that throughout the estimates there is the wording in brackets at the end of votes "As previously provided in Appropriation Act No. 2, 1981-82". That language is there, I am sure, as a result of your ruling last year when a great number of votes were examined and ruled out of order, most appropriately. The Treasury Board when drafting these estimates put in this language, as previously provided in Appropriation Act No. 2, as somehow sanctifying these votes.
I merely want to point out, Madam Speaker, that you and your predecessors by your decisions, by example, and I believe by statements, have clearly indicated that the fact that an improperly constituted vote might have passed in the past is not justification for saying that therefore it is okay in perpetuity and one can do that.
May I also point out that you and your predecessors have quite properly ruled that it is not the role of the Chair to go through every vote to see if it is in order, but that the Chair will rule on points of order raised by hon. members. Last year I pointed out, as I have done in previous years, that even though I had a very extensive list of votes which I felt were out of order, I did not in any way, shape or form claim that it was a definitive list. Indeed, I made the observation last year that quite likely there were numerous other votes which were out of order. I simply lacked the resources, the staff and so on to go through and check every one of these votes in terms of their legality or non-legality.
I understand what the Treasury Board officials were doing when they included the language, "As previously provided in Appropriation Act No. 2, 1981-82". The mere fact that that kind of language might not have been raised by myself last year, when I had an extensive list of votes which I felt were out
June 18, 1982

of order, was in no way, shape or form an indication that 1 or other members of the House felt that it was appropriate. It was only because within any one estimate period there is only so much one can do. I just did not have the time to check the whole thing. It is pretty hard for my research assistant and I to match the thousands of people in Treasury Board, and of course I have had one or two other things on my mind.
If Madam Speaker examines the votes raised and the indications which I have presented here in particular as against the very clear, precise and concise ruling of Your Honour last year and the rulings of your predecessors, it becomes pretty clear that these votes are out of order.
I repeat to the President of the Treasury Board (Mr. Johnston) that our object is not to confuse unduly or to cause problems for the minister. Our object is simply to get him to treat the House with respect and to obey the law and the rulings of the Chair. In drafting this document again this year,
I think they have taken liberties which are inappropriate. I feel Your Honour should rule these votes out of order.
Hon. Donald J. Johnston (President of the Treasury
Board): Madam Speaker, I welcome the opportunity of responding to the point of order. I congratulate the hon. member for Calgary Centre (Mr. Andre) for his tenacity in this matter. I only wish it were matched by legal talent.
The first point I should like to make in responding to the arguments of the hon. member for Calgary Centre is that timing in raising points of order of this kind is of the essence. I refer to Citation 235 of Beauchesne, wherein it is indicated that an hon. member raising a point of order "should do so as soon as he perceives an irregularity in the proceedings which are engaging the attention of the House". It continues:
The Speaker's attention must be directed to a breach of order at the proper moment, namely the moment it occurred.
Last year the hon. member for Calgary Centre had the courtesy to raise his point of order on June 1. He raised his point of order today before the last allotted day, Monday. I suggest that on that ground alone the point of order should not be entertained. However, it is not at all necessary for me to rely on that point, but I suggest that it is relevant and applicable.
The arguments put forward by the hon. member for Calgary Centre suffer from a number of fatal flaws. We paid great attention to Madam Speaker's ruling of last year when we prepared the Main Estimates in order to ensure, beyond any doubt, that there were no new legislative provisions provided for in the Main Estimates which I tabled. I should like to refer you, Madam Speaker, to your ruling of June 12, 1981 wherein you said:
The test is whether or not the government is putting forward a spending estimate under authority it already possesses, or whether it is really seeking new legislative authority to do something.
Then Madam Speaker went on with two comments which perhaps the hon. member for Calgary Centre has not noted. As reported on page 10547 of Hansard of June 12, Madam Speaker stated:
Point of Order-Mr. Andre
However, two of the items. External Affairs Votes L50 and L55, have previous statutory authority, albeit previous Appropriation Acts, and thus are in order.
Further you went on to say:
As I said earlier, the programs described by External Affairs Votes L50 and L55 are authorized by previous Appropriation Acts, and therefore the moneys sought for the instalment to be paid are in order.
There is no magic in what the Treasury Board has done this year in terms of the language which has been added to the Main Estimates. It is there for convenient reference by readers of the estimates, because of Your Honour's ruling last year. In each of the cases cited by the hon. member for Calgary Centre, it is to be noted that there is previous authorization through an Appropriation Act.
Everything to which the hon. member referred has received prior parliamentary approval through Appropriation Acts. Let me deal just very briefly with a few examples of that, just to make the record absolutely clear. The hon. member referred to Communications, Vote No. 1. This is when he was dealing with the issue of authority to pay. Madam Speaker will recall that he categorized a number of votes as providing authority to a department to expend funds received within the operation of a program. On page 3-6, Communications, Vote 1 reads as follows:
-Operating expenditures, the grant listed in the Estimates, contributions and authority to spend revenue received during the year (As previously provided in Appropriation Act No. 2, 1981-82).
I do not want to take the time of the House by going through each one of the sections which the hon. member raised, but if Madam Speaker refers to the Main Estimates, I can assure her that she will find in each single case the same authority and reference provided. The authorization is clearly given.
Then the hon. member for Calgary Centre made reference to the provisions of proposed legislation, Bill C-96, Section 20.1(1), where he said that we are attempting to provide for this kind of authority. Indeed, we are in strict compliance with Madam Speaker's ruling last year. We recognize the validity of the ruling which was rendered, and hence in future it will require the sanction of the provisions of the proposed law to provide for similar programs, but not for programs which have already received parliamentary approval within the scope of the ruling which Your Honour delivered and in accordance with the specific passages which I read.
Of course, the same is true with all other votes, more particularly with respect to the provisions of Bill C-91 which authorizes the Department of Public Works to expend funds on other than public property. That will provide authorization for such expenditures in the future. If Madam Speaker refers to the Main Estimates, she will note that we have been very careful to ensure that no such new authorities are provided for. Of course, as I pointed out, what is provided for are those which are there. I understand that a number of these votes which the hon. member for Calgary Centre has challenged today have in fact been in the estimates for many years, if not decades.

June 18, 1982
Order Paper Questions
I suggest that the hon. member has improperly-I do not mean that in any propriety sense, or simply has not applied your ruling to an analysis of the Main Estimates as he should have done. That being said, I would also point out, as I did at the outset, that your ruling has changed the position which we have taken with respect to the preparation of these Main Estimates and we have been most careful to comply strictly with the rules which you laid down in your decision of June 12 last year.
I think 1 have covered the points I wish to raise. I do not want to take up a great deal of time of the House on this because the ruling is so straightforward and clear, but I think it is important that the hon. member for Calgary Centre understand exactly how the Main Estimates were prepared this year. I would like to give my assurance to him and to you, Madam Speaker, that no matter how much research he conducts he will not find in these Main Estimates any provision which is in conflict with your ruling.


Madam Speaker:: I thank both hon. members for their submissions. Of course, i want to look into the different arguments that have been brought forward and I will take that point of order under advisement.



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Mr. Arthur Portelance (Gamelin):: Madam Speaker, 1 have the honour of tabling the Sixth Report of the Standing Committee on Labour, Manpower and Immigration.
[Editor's Note: For above report, see today's Votes and Proceedings.]


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Hon. Yvon Pinard (President of the Privy Council):: I ask, Madam Speaker, that all questions be allowed to stand, and Monday we shall try to answer as many questions as possible.


Madam Speaker:: Shall the questions on the Order Paper be allowed to stand?


Erik Nielsen: Madam Speaker, if I can get the attention of the government House leader, I have the list of the questions
being answered, if the government House leader would like to read them into the record today.


Yvon Pinard: Madam Speaker, my colleague is fortunate to have the list. That shows how courteous we are. I do not have a list myself. That is why I have asked permission to give those answers on Monday.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS

[Stage Direction]
[ English ]

Marc Lalonde: that Bill C-116, to establish the Co-operative Energy Corporation and the Co-operative Energy Development Corporation, be read the second time and referred to the Standing Committee on National Resources and Public Works.
He said: Madam Speaker, Bill C-116, an act to establish the Co-operative Energy Corporation and the Co-operative Energy Development Corporation, is another step toward the achievement of the goals of the National Energy Program. It will enable the Government of Canada to participate in a joint venture with an association of co-operative marketing and financial institutions. It will provide a new source of funds to the petroleum industry, new investment opportunities to individual Canadians and an increase in the share of the oil and gas industry that is owned by Canadians. The joint venture will be called Co-Enerco.
As all members of this House are aware, the capital requirements of the petroleum industry in Canada over the next decade will reach unprecedented levels. The Government of Canada is committed in the National Energy Program, to increasing the share of the industry that is Canadian-owned.
Co-operative organizations, with nine million members and an estimated $45 billion in assets, represent a significant new source of capital. In the past, co-ops have had little participation in oil and gas investments, although there has been some involvement in refining and sales. With the new financial and fiscal regime introduced in legislation, particularly the petroleum incentives program now before the Senate, and
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1861 1
through agreements with the producing provinces, investments in oil and gas will become extremely attractive for Canadian-owned firms.
Discussions took place between representatives of cooperative organizations-and we are happy to have some of their representatives in the gallery today-and representatives of the Government of Canada over a period of months. The result of those discussions was an agreement in principle signed on December 17, 1981, and tabled in the House on May 17. Bill C-l 16 is the legislative expression of that agreement.
The credit for this achievement is shared among the members of the co-operative movement who participated in the discussions and supported the idea, and a number of people in the Government of Canada, most notably Senator Hazen Argue, Minister of State responsible for the Wheat Board, as well as the Minister of Employment and Immigration (Mr. Axworthy) whose tireless efforts turned an idea into an agreement.
Twenty co-operative organizations from across the country have so far agreed to participate, including wheat pools, retail co-ops, credit unions, caisse populaires and co-operative insurance and trust companies. They are the Alberta Wheat Pool, British Columbia Central Credit Union, Canadian Cooperative Credit Society Limited, Co-op Atlantic/Co-op Atlantique, Cooperative federee du Quebec, Co-operative Fire & Casualty Company, Co-operators Insurance Association, Co-operators Life Insurance Company, Credit Union Central of Alberta Limited, Cumis Insurance Society, Cumis Life Insurance Company, Federated Co-operatives Limited, Federation des caisses populaires acadienne, Manitoba Pool Elevators, Newfoundland and Labrador Credit Union Limited, Nova Scotia Credit Union League, P.E.I. Credit Union League Limited, Saskatchewan Co-operative Credit Society Limited, Saskatchewan Wheat Pool and United Co-operatives of Ontario.
While co-op participation has been nationwide, it should be noted that the western co-operative movement has taken the lead role. For example, Federated Co-operatives Ltd. of Saskatoon and the Saskatchewan Wheat Pool will be the largest shareholders. It should also be noted that the registered offices of the Cooperative Energy Corporation will be in Calgary. The government is therefore particularly pleased to join in a predominently western enterprise.
Three new organizations will be created. The Co-operative Energy Corporation, to be called Co-Enerco, will be a holding company whose only shareholders will be the Government of Canada and the participating co-operative organizations. There is the cooperative energy investment fund, designated as CEIF. The third one is the Co-operative Exploration and Development Corporation, CEDC.
The co-operative energy investment fund will sell units to the public through the credit union system. The fund will invest in energy companies and plan a valuable role in increasing Canadian ownership of this sector.
Co-operative Energy Act
The Co-operative Exploration and Development Corporation will be an operating oil and gas company which, through this legislation, will always be completely owned and controlled by Canadians. Among the options open to the CEDC will be joint ventures with established oil companies or the purchase of an oil and gas company. The government does not wish to limit the range of options. The involvement of the cooperative movement in production and exploration will be part of a general increase in Canadian ownership and control of the upstream side of the petroleum industry, which is one of the major objectives of the National Energy Program.
The federal government will subscribe start-up capital to Co-enerco in an amount that matches the capital committed by the co-operative organizations up to a ceiling of $100 million. This figure makes it clear that although there is a limit to our participation, it is a generous limit. The potential contribution to energy investments by the co-operative organizations and their members is very large indeed. The substantial federal participation is designed to put Co-Enerco on its feet and to make available to the petroleum industry this new source of capital as quickly as possible.
Our half of the start-up funds will be turned over to Co-Enerco immediately. The co-ops have four years in which to supply their initial commitments. So far, the co-ops have committed $57.8 million, giving the corporation an initial capital of over $115 million. Further commitments from the co-ops will be matched, dollar for dollar, by the federal government until its contribution has reached $100 million.
The bill provides that the government share in this joint venture can be bought out by the co-ops in the future. From this and other provisions, it will be obvious that the role of the federal government is limited to assisting the start-up of Co-Enerco. This joint venture does not represent an attempt significantly to increase the share of the petroleum industry that is owned by the Government of Canada.
Although three members of Co-Enerco's board of directors will be appointed by the government, control of the corporation will be in the hands of the co-ops, who will appoint nine members to the board. The government does not intend to involve itself in the day-to-day operations of Co-Enerco. This function will be carried out by the co-ops. It is our view, and I am sure it is shared by hon. members, that they have a solid record of sound and responsible financial management.
For as long as the government is involved financially, major transactions of the corporation will be carefully scrutinized by the government representatives on the board to ensure that the public investment in Co-Enerco is safeguarded. This scrutiny will not be motivated by a lack of confidence in the management team assembly by the co-ops. Far from it. It will be simply a matter of normal prudence in the management of public funds, and it will have the effect of providing a double assurance to individual investors.
Nine million Canadians belong to co-operatives or credit unions. That number is a measure of the confidence that Canadians have in the management of these organizations. For the small investor who is accustomed to thinking that energy

June 18, 1982
Co-operative Energy Act
investments are particularly risky, the proven record of the cooperative organizations will be reassuring. A second level of reassurance will be provided by the participation of the federal government.
How much money will be attracted to Co-Enerco? Some representatives of the co-ops have estimated that $1 billion will be available in the next five years. That amount will make this joint venture a significant new player in the petroleum industry and it will provide an important increase in Canadian participation in the industry.
Mr. Speaker, the Government of Canada welcomes the interest of co-operative organizations in petroleum investment. It is pleased to join in a partnership with a national network of organizations that have a long and proud record of service to Canadians in the fields of marketing and finance. We are certain that this joint venture will provide new sources of capital for the exploration and production of oil and gas, that it will provide new and accessible opportunities for Canadians to invest in our energy future, and that it will increase the share of Canadian ownership in the petroleum industry. I am confident that all hon. members of this House will support this bill.
[ Translation]
Mr. Speaker, once again, I would like to point out that Bill C-116 will establish a joint venture called the Cooperative Energy Corporation, in which an association of co-operative marketing and financial institutions will participate with the other major partner in this undertaking, the Government of Canada. In establishing this venture, the government has three basic goals in mind: to promote the Canadianization objectives of the National Energy Program, to involve the co-operative movement in oil and natural gas production and to provide a new source of funds to the petroleum and gas industry. On December 17, 1981, the Government of Canada signed an agreement in principle with representatives of seventeen cooperative organizations with a view to promoting investment in the energy sector. Bill C-116 will give this agreement force of law.
The Cooperative Energy Corporation will be a holding company whose only shareholders will be the participating cooperative organizations and the Government of Canada. The Corporation's board of directors will have nine members appointed by the participating co-operative organizations and three members appointed by the government. The Corporation will in turn act as director of two offshoot corporations. First, the Cooperative Exploration and Development Corporation which will be an operating oil and gas company with restricted partnership. It will be completely Canadian owned and controlled. Eventually, the public may own a controlling interest in the Corporation. Among the options open to the CEDC will be joint ventures with established oil companies or the purchase of an oil and gas company. As for the other corporation, the co-operative energy investment fund, it will sell units to the
public through the credit union system. It is expected that the majority of unit holders will be credit union members.
The co-operative organizations that have agreed to participate in this joint venture cover a wide range of institutions including wheat pools, retail co-ops, credit unions and caisse populaires, and co-operative insurance and trust companies. Federated Cooperatives Limited of Saskatoon played a decisive role in this project. French Canadian co-operatives include the Cooperative federee de Quebec and La Federation des caisses populaires acadiennes. The total assets of these cooperative organizations add up to $45 billion. So far, the coops have committed over $56 million over a period of four years. Some co-op representatives estimate they will be able to invest $1 billion in the venture. Furthermore, the Canadian government has promised to match the contribution of its partner up to $100 million. Obviously, the government does not intend to involve itself in the day-to-day operations of Co-Enerco. It will, however, have to approve any major transaction through its representatives on the board of directors.
In concluding, Mr. Speaker, I would like to stress the fact that the new investment opportunities created by this legislation will make it possible for many Canadians to take part, with very little risk, in the development of our energy sector. The co-operative organizations have an excellent reputation among their nine million members, and they have a solid record of sound management. These organizations have shown a lively interest in Canadian energy investments, and I am confident that all hon. members of this House will support this bill.


Mr. Deputy Speaker:: Order, please! It being one o'clock, I do now leave the chair until two o'clock.
At 1.02 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Harvie Andre: Mr. Speaker, our party will certainly support Bill C-116, to establish the Co-operative Energy Corporation and the Co-operative Energy Development Corporation. We always welcome a new oil company, whether it be in Alberta or elsewhere in Canada. We are certainly in favour of that.
In his opening remarks, the minister indicated that this was one more example of fulfilment of the National Energy Program. He almost lost me there. I do not know why he would stigmatize this new Co-operative Energy Corporation by any association with the National Energy Program. Much as the new company is welcome, it unfortunately will not be capable of replacing those dozens and dozens of companies that have been devastated and driven out by the National Energy Program. The National Energy Program is known to
June 18, 1982

the country, especially to everyone associated with the oil and gas industries, as that program which put the boots to the industry. So I would not think he would be doing it a great favour by associating this company with that program.
The minister indicated there would also be established under this cooperative effort between the federal government and the co-operatives a cooperative energy investment fund, a drilling fund, in essence, for investment in projects of the Co-operative Energy Development Corporation and of other oil companies.
May I take this opportunity also to indicate that the problem with drilling funds is in the November 12 budget. We cannot put the boots to the investors, so if we want to get drilling funds going, not just in terms of cooperative energy but drilling funds that were such an important part of our Canadi-anization of the oil industry from 1976 on, up to the time of the National Energy Program, he should sit down with his colleague, the Minister of Finance (Mr. MacEachen). He should see if he cannot remove some of the more severe disincentives that were part of the November 12 budget. The general taxation levels have also served to discourage drilling funds.
In particular, I wonder if the minister might re-examine what he considers the grandson of the National Energy Program, which undoubtedly will be produced one day soon. He might examine extending to individuals the provisions of the petroleum and gas royalty tax rebate that was part of the son of NEP, whereby corporations did not pay the first $250,000 af PGRT. Some sort of extension to individuals would be called for, to re-encourage investment by Canadians into drilling funds. As things stand now, in order to participate and get the benefit of that, individuals will have to incorporate. Incorporation will mean great work for lawyers and accountants but it will not find any more oil or gas. If finding oil and gas and encouraging Canadian investors is what we are all about, then that is a change he should look at.
The minister informed the House that it is the intention of the federal government to participate in Co-Enerco to the extent of perhaps $100 million. He said that was generous. I ask, "Compared to what?" Compared to the $1.5 billion spent on Petrofina, that sum is very modest. One hundred million dollars is certainly a reasonable contribution, but compare it to the billions that have been blown particularly on PetroCan's purchase of Petrofina. This $100 million investment that the federal government is making here is very likely to return much more by way of value to the federal government than an equivalent $100 million given to Petro-Canada for such useless purchases as Petrofina.
I want to put on the record some of the experiences we have had with this legislation as it is before us today. It is a bad-news-good-news story. The bad news part of it is that earlier on I was presented with draft proposed legislation by the minister's parliamentary secretary. We were asked for our reactions as a political party. My colleagues and I agreed that the principle was fine. We could accept the principle and felt
Co-operative Energy Act
we could go along with it, but the legislation was atrocious. Indeed, it was extremely poorly drafted. It had in it many things to which we had been objecting strenuously-not just members on this side but members on all sides of the House- in the Standing Committee on Regulations and Other Statutory Instruments. It seems there is continual pressure to put into legislation delegation of law-making authority to the governor in council, but the original draft of this bill contained the delegation of law-making authority to civil servants in the Department of Consumer and Corporate Affairs. There was delegation of law-making authority, not just administrative authority. It was a terribly poorly drafted bill. That is the bad news.
The good news is that the government brought the bill to us before it was presented to the House, and we were able to overcome those problems. To me that was an example of how this place can work and should work. There were a few meetings between officials, myself and others, and I discussed the matter with members of our party. It probably took more time than it should but, nonetheless, in the course of time we were able to come up with improvements and produce legislation which addresses some of the very serious concerns we have.
I suggest to the minister and other government members that in the future they ought to examine that method of proceeding more often. They might find that this place will function much more efficiently and effectively. Their legislative programs might get through more quickly and be more effective if there were that kind of consultation. Changing legislation which has on it the stamp of approval of the governor in council is a kind of backtracking on the part of the minister or the cabinet. Backtracking is a very difficult thing for politicians to do. It should not be as difficult as it is but, nonetheless, it is difficult. There should be that kind of prior consultation and working together. Members of the House should be able to act as legislators in a real sense. They should be able to participate. I think the experience we have had commends itself, and I recommend to the minister and his colleagues that in the future they consider doing more of what has been done in this case. They might find that the harmony in this place would increase considerably, and productivity would increase considerably as well.
That having been said, I repeat that the proposed Cooperative Energy Corporation and the Co-operative Energy Development Corporation will certainly be approved by us. We trust and hope that the government will receive a good return on its investment of $100 million. We are convinced that the country will receive a good return from more activity in the oil and gas industry, and for that reason we gladly participate in this debate and co-operate in getting all three stages of this bill completed this afternoon.


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, this week members of the Canadian co-operatives movement met in Ottawa to discuss the future of their movement locally, provincially, nationally and internationally. One of the matters

June 18, 1982
Co-operative Energy Act
at which members of the movement looked closely was the investment by the co-operatives movement in energy development.
Bill C-116, to establish the Co-operative Energy Corporation, is a much bigger step for the co-operative movement than people realize. On many occasions I have been told that cooperatives are into everything, and "why not energy?" Cooperatives have actually been into energy. In many ways they certainly are into everything from cradle to the grave. As a matter of fact, they are involved in maternity and daycare centres right through to funeral homes. Why, then, is this venture into energy different? To understand the differences it is necessary to look at the origins of the co-operative movement.
How and why were co-operatives formed? Those of us who grew up on the prairies are vividly aware of co-operatives and credit unions. Co-operatives were spawned during hard times. They are the result of the need of producers for fair prices for their products. The pools on the prairies grew out of the need for protection from the gouging of line elevator companies that were handling producers' grain. The credit union movement started in Levis, Quebec, in 1900 and grew, because previously people were unable to obtain money from banks even at high interest rates.
As democratic socialists in Canada, we face many of the same problems the co-operative movement faces. How can we develop our basic belief that we are our brothers' keepers and that through co-operation and sharing we can make a better life for everyone?
The co-operator, like the democratic socialist, has some difficulty translating his belief into an organization which will survive in the capitalist system. That system is based on materialistic gain and greed at the expense of others and is diametrically opposed to the principles of co-operatives. Back in the early days people found they had to protect themselves from that greed in order to survive with some security for their families. On the economic level people formed co-ops and credit unions. On the political level people formed political parties. The Co-operative Commonwealth Federation, the old CCF, grew out of the despair of the depression and, in many ways, out of the co-operative movement on the prairies. I recommend to all hon. members the play "Paper Wheat" which is the story of co-ops and the development of the wheat pools on the prairies.
The New Democratic Party has always recognized that its aims were common to those of the co-operative movement. We share many of its ideals and we share the same struggle to survive in a dog-eat-dog environment. Consequently, the New Democratic Party has done what it could to support the cooperative movement.
Only in provinces where there have been New Democratic governments are there departments of co-operatives. In the House yesterday I asked the Prime Minister (Mr. Trudeau) a question-which he refused to answer-about whether his government would establish a co-operative department. His refusal to answer perhaps shows the limited interest the
government has in this particular area. Nonetheless, I repeat my question: Will this government form a department which will provide a place to which co-operatives can go?
I am speaking today in the House of Commons about this bill to establish Co-Enerco because my leader, the leader of the New Democratic Party (Mr. Broadbent), has recognized the tremendous contribution and importance of co-ops and has appointed me as spokesman for co-operatives. This is the first co-operatives critic post in the federal Parliament.
Today we are debating the Co-Enerco bill which is another attempt by the co-operative movement to protect people from an uncaring economic environment. It is attempting to deal with the capitalist system by modifying it rather than by replacing it. As a socialist, I cannot entirely agree with this support of the system but I have nothing but admiration for the groups of people in the co-operative movement who are trying to cope with the system. They are trying to adapt to the present economic order and they are trying to make changes to the system to match their principles.
What is a co-operative? Co-operatives provide an organizational framework of structures and processes that enable people to co-operate with one another. Co-operatives are both associations of people and economic organizations, with social and economic goals. They attempt to merge political democracy with economic activity to create economic democracy. Cooperatives are distinctive because, first, they are owned and controlled by their primary users, consumers, producers and workers, rather than by investors. Second, control is based on democratic values and various structures are used to enable member participation and representation. Third, the benefits from the operations and resources flow to members as users of services, not as investors. That is why I said at the beginning that this is a greater step for the co-ops than many people realize. The benefits flow to the members as users of the service, not as investors. In the case of Co-Enerco, the co-ops are indeed in a new area because they are becoming investors.
Anyone trying to deal with the economic problems we face today should be supported, and the co-operative movement in this venture is setting a positive example for Canada. A New Democratic Party economic task force travelled across the country last year. The only consistent notes of optimism we heard on that tour came from co-op groups-from Federated Co-operatives, the wheat pools, even small co-op farms and coop housing groups.
In these troubled economic times, however, we must ask why it became necessary for the co-ops to enter the energy field to this extent. The government assured Canadians that we could be self-sufficient in energy in a very short time, but the government has abdicated its responsibility and cannot achieve that objective in the manner it planned.
Co-operatives cannot live without planning. They face many difficulties if their future is not planned. It is by planning and sharing that co-operatives can protect their members from the
June 18, 1982

worst effects of our economic system. They can inject a note of optimism into our economy even in times of depression.
This is not the first co-op adventure into the energy field. The Consumers Co-operative Refineries Limited was established in the 1930s. In the early part of the century co-operative retail and bulk outlets bought much of their stock from small independent refiners. By the 1930s, many of the independents were being bought out by the major companies. The majors had considerable influence over wholesale prices and the co-operatives therefore considered backward integration.
In the winter of 1934-1935, ten co-operatives in the Regina area decided to build a cooperatively-owned refinery. They raised $32,000 as share capital and the plant came onstream on May 27, 1935. It had a capacity of 500 barrels per day, which grew to 28,000 barrels per day in the 1970s. Expansion at the end of the decade to 40,000 barrels with the potential of
50,000	barrels cost $30 million, almost a thousand times the sum gathered for the original refinery. Federated Co-operatives now operates the refinery and supplies about 850,000 members, but only 3 per cent of its refinery feedstock is owned by the co-op.
Federated realizes that it needs an assured source of supply for its members and customers. That 3 per cent is dangerously low. It could not depend entirely on government promises, so it began looking at the possibility of expanding its control of some of the sources of oil and gas. As Vern Leland, president of Federated, explains the process, Federated soon realized that getting into the oil business took more money than one coop could possibly raise.
The co-operative movement is not small-it is widespread, diverse and powerful. From the co-operative movement comes the impetus for this energy corporation. Co-operatives in Canada are involved in almost every sector of the economy- agriculture, supply and manufacturing, feed mills, plywood mills, farm machinery, fertilizers, finance, fisheries, housing, health services and childcare.
The Canadian Union of Co-operatives works with the Canadian Co-operative Credit Society through the Cooperative Development Foundation of Canada to promote social and economic development through co-operatives in the Third World. The co-op movement has also established the Co-op College of Canada in Saskatoon, the Coady Institute at St. Francis Xavier University, and a program in co-ops is offered at the University of Sherbrooke. It is this strength that is going into this Co-Enerco project.
I want to stress that the material and human strength is made a thousand times more potent because it is formed around co-operative ideals-the idea that people are important; the idea that by working together we can have economic democracy and can thus ensure our survival in this world.
The co-operative movement has entered the energy field on a fairly large scale. Co-Enerco is a strong statement of faith in the ability of people to shape their own future and develop
Co-operative Energy Act
economic democracy. Co-Enerco is being developed with four basic objectives: first, to explore for and produce petroleum products and other energy sources to provide long-term security of supply for the co-operative system and Canadians at large. I think all Canadians have accepted the need for Canadian ownership of the resource industry. Second, to provide an investment opportunity for long-term capital appreciation for co-operatives, credit unions, caisses-populaires and their members, a new field of investment for co-operatives. Third, to assist in efforts to Canadianize the oil and gas industry in accordance with the co-operative principles of Canadian ownership and control, referred to by the minister as part of the NEP. Fourth, to assist in the research and development of alternate sources of energy and to encourage conservation. The organizations involved are very broad and I am not going to go into the numbers to any extent.
This bill will set up the Co-operative Energy Corporation and two companion organizations, the Co-operative Energy Development Corporation and the cooperative energy investment fund. Bill C-116 is based on an agreement reached last December between the participating co-operatives and the federal government. The co-operative participants are a formidable group and represent an incredibly large membership. There are almost nine million members with assets valued at about $50 billion. The agreement is the result of exhaustive research and study and we hope and believe that it deals with all possible contingencies.
All co-op members will recognize that this is a new adventure for them. Joint ventures with the government have not always been good. This one is something new because of its scale and the fact it is an area where co-ops have only limited experience. But they are strong business organizations which have proven themselves over the years and consequently know where they are going. I should point out that this whole idea arose with the co-ops, not with the government.
The New Democratic Party supports this bill, Mr. Speaker, because we believe Canadians generally have accepted the need to Canadianize the energy industry. The co-op movement is truly Canadian, and these corporations being formed will also be truly Canadian and operate for and on behalf of Canadians.
1 know the government will say that we have had Canadian corporations before, such as Dome and PetroCan. One of those companies is a private firm and the other is a Crown corporation. I challenge anyone here today to try to change a director of Dome or, as far as that goes, of PetroCan, but the Cooperative Energy Development Corporation will have some say in who is a director. I said earlier that I have some concerns about co-operatives getting into this kind of corporation and investment, but they are democratic institutions and the participating members will have some effect on what goes on in this organization.

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Co-operative Energy Act
The co-operative movement is based on some very specific principles which must be protected. The subversion or compromise of these principles should be of concern to the membership of every co-op taking part in this adventure. During the last months and years co-operatives have been looking at their future direction. This is a new direction for them and therefore it is our duty to watch where it takes them. In a recent meeting the co-operatives started out with a vision which they discussed for several days. There were several key words, such as "without exploiting people", and I think the members must make sure that they do not enter into the investment field on the basis of exploitation. They also suggest that they "must not degrade nature". Where does this corporation stand on offshore drilling, and in particular on nuclear development. By becoming a corporation they must also now recognize the responsibilities of corporate citizenship. Their powers must be rooted in communities and local organization. Does this structure maintain that democracy?
I look forward, Mr. Speaker, to the day when the federal government truly recognizes the importance and potential of the co-operative movement. I look forward to the day when cooperative enterprise will play a central role in an economy which puts the needs of people first rather than the selfish interests of corporate enterprise. I look forward to the day when the people of Canada will have effective control over their political and economic institutions, and will be able to use their co-operative movement to stride forward rather than to guard against greed and rapaciousness.
We hope that these co-operative enterprises work well. We wish them well and feel assured that the democracy of the cooperative movement will do the best for its members and all Canadians.


Mr. Bill Yurko (Edmonton East):: Mr. Speaker, 1 will be brief because I do not want to hold up this bill, it is a very good bill and I just wanted to indicate that the independent party in this House fully supports it.


Some hon. Members:: Hear, hear!


William J. Yurko: Mr. Speaker, 1 think it is appropriate that all members congratulate the co-operative movement of Canada for taking the initiative to evolve this legislation and bring it before the House. It is certainly appropriate for me to recognize and thank some of those co-operative organizations who came forward with their views, particularly the Alberta Wheat Pool, the Credit Union Federation of Alberta, the Federated Co-ops of Saskatchewan, the Saskatchewan Wheat Pool and others. They are to be congratulated, all of them. I am particularly pleased that the head office is to be located in Calgary, the heart of the oil and gas industry in Canada. The cooperative movement, and particularly the federal government, might learn something from the industry being located in Calgary.
This is indeed a western corporation and a western enterprise. We all expect great things from this partnership of the co-operative movement in Canada and the federal government. The minister stated that the joint venture will probably grow
to a capitalization of $1 billion in five years, well beyond the limit of $100 million of injected capital by the federal government. I wish the group well. I hope that it grows to $2 billion in five years.
This brings me to my main point today. I believe that this voluntary direction of Canadianization of the oil and gas industry is a marvellous direction. The industry needed good direction. This is a voluntary direction. It is not forced but voluntary.
This is a somewhat similar direction to what happened in Alberta some years ago when the Alberta Energy Company was formed. I would hope that this joint venture will approach the Alberta Energy Company at the earliest opportunity for a possible joint venture with it. Since this new venture will primarily be related to development and exploration on provincial lands rather than federal lands, I must ask some questions of the minister. Why is the PIP program discriminatory for ventures like this on provincial lands?


Mr. Deputy Speaker:: Order, please. The House is discussing second reading in which the principle of the bill is discussed. It is my understanding that it is the intention of the House to go into Committee of the Whole, at which point if the hon. member wants to ask questions, the opportunity will be afforded to him. May I suggest to the hon. member that that would be a more appropriate forum.


William J. Yurko: Mr. Speaker, I beg to differ. I want to raise two very important matters of policy in this House because we are discussing the principle, the policy, of this piece of legislation. If you wish, I will not put it in the form of a question, I will put it in the form of a policy. It will not take me long; I do not intend to hold up the bill.
The policy question is very simple. Why should a joint venture like this be subjected under the PIP program to 35 per cent in grants, while on the other hand if it was doing its work on federal lands it would get 80 per cent in grants with respect to expenditure on exploration? That is a very important policy question with respect to this legislation. I hope that in the legislation the minister might find some way of providing this joint venture with greater PIP grants than 35 per cent listed for joint ventures and companies exploring on provincial lands.
The second very important matter with respect to this joint venture, from a policy point of view, is that the federal government has established a policy of assigning 25 per cent ownership to the Crown or to a Crown corporation of development on all federal lands. I suggest that this joint venture will be involved on federal lands at some point in the future. I would think that the federal government would look seriously at whether or not it will continue its 25 per cent allocation with regard to this joint enterprise that is being formed under this legislation.
I put those two policy positions forward because I think they are important as this joint enterprise grows in future years.


Mr. Deputy Speaker:: Is the House ready for the question?


Some hon. Members:: Question.
June 18, 1982


Mr. Deputy Speaker:: The Elouse has a problem at this point. The motion before us would refer the bill to the Standing Committee on National Resources and Public Works. From the remarks of the government House leader yesterday and the remarks of the hon. member for Calgary Centre (Mr. Andre) earlier today, the Chair assumes there is unanimous consent for the motion to be amended to go to Committee of the Whole.


Yvon Pinard: You are absolutely right, Mr. Speaker. This procedure will also apply to the next bill to be studied later on this afternoon.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and, by unanimous consent, the House went into committee thereon-Mr. Francis in the chair.
Clauses 2 to 27 inclusive agreed to.
Schedule agreed to.
Clause 1 agreed to.
Title agreed to.
Cyril Lloyd Francis: Shall the bill carry?


William J. Yurko: Mr. Chairman, I would like to have some short comments from the minister on the two policy positions I raised with respect to the PIP grants for an enterprise like this on provincial lands which are limited to 35 per cent as opposed to 80 per cent on Crown lands. Second, would it be the intent of the federal government to take its 25 per cent ownership share in all projects by this joint enterprise on Canada lands?


Marc Lalonde: Mr. Chairman, first on the question of the PIP grants, they are of a universal nature. They apply equally to all companies, government-owned companies, provincial government-owned Companies, federal-owned companies, strictly private companies and co-operatives. We do not believe that those grants, any more than the taxation system, should be of a discriminatory nature. All companies operating in the oil and gas fields should be put on the same basis in terms of taxation and grants. It is not the intent to provide for a special category of grants for this particular company compared to other companies.
On the second point, the same applies in the Canada lands. The 25 per cent share is in compensation for the contribution provided by the taxpayers of Canada for exploration in the Canada lands. As the hon. member indicated, the contributions may go up as high as 80 per cent of the cost of exploration. In return, the people of Canada get a 25 per cent share of any development which will take place. The same rule will apply. There will be no discrimination.


Cyril Lloyd Francis: Shall the bill carry?
Garnishment, Attachment and Pension Diversion Act


Some hon. Members:: Agreed.


Cyril Lloyd Francis: Shall I rise and report the bill?


Some hon. Members:: Agreed.
Bill reported, read the third time and passed.


GARNISHMENT, ATTACHMENT AND PENSION DIVERSION ACT MEASURE TO ESTABLISH
Jean-Luc Pepin: that Bill C-38, to provide for the garnishment or attachment of Her Majesty in right of Canada and for the diversion of pension benefits payable by Her Majesty in right of Canada under certain enactments, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.


Hon. Judy Erola (Minister of State for Mines):: Mr. Speaker, I am very pleased to rise in the House this afternoon to introduce for second reading Bill C-38, the Garnishment, Attachment and Pension Diversion Act. Hon. members of the House and perhaps the people of the country will question why I, the Minister responsible for the Status of Women, would be standing to present a bill which appears to be a rather dry bill with no particular human reference. I should like to reassure hon. members of the House that indeed it has a very human effect upon a great many people in our country, particularly women. I urge its swift passage.
I remind hon. members that I feel this bill has been somewhat bogged down for the past two years. Due to the efforts of a number of very active women, including the wives of parliamentarians, we have been able to bring it to the House and I hope to swift passage.
Agents of the Crown, who include in their numbers hon. members of the House, have long enjoyed protection from garnishment and attachment of their salaries. Creditors are barred from pursuing all the normal avenues open to them to collect what is legally due to them, only by virtue of the fact that their debtor works as an agent of the Crown. The effect of the legislation before us today will be to remove this age-old security blanket of Crown immunity for garnishment actions. The rationale for Crown immunity crumbles in such cases, for the action is against Her Majesty in name only. We all know that the real culprit is the malingering debtor.
Just to give an idea of how far-reaching the exemption is, let me list those who are protected by the security blanket in the federal jurisdiction. They include all federal public servants, appointees to boards and tribunals, employees of Crown corporations, Canadian Armed Forces personnel, federally-appointed judges, parliamentary staff, and last but certainly not least, hon. members of the House and of the other place. Again I might add that we owe a great deal to the wives of

June 18, 1982
Garnishment, Attachment and Pension Diversion Act
parliamentarians who have taken such active interest in the passage of this bill.
As a result of this immunity to garnishment, many spouses are otherwise unable to enforce their family support orders against their former partners who are employed by or who receive superannuation benefits from the federal government. In addition, creditors are unable to collect on judgments obtained against a small number of federal employees who are not reliable in paying their debts. Bill C-38 will make it possible for support orders and other debts to be honoured out of the Crown's purse for those who receive their salary from the federal Crown.
While both Bill C-49, which was introduced in May, 1978, and Bill C-52, introduced in March, 1979, would have permitted the garnishment of salaries by amending the Financial Administration Act, Bill C-38 creates a new act-the Garnishment, Attachment and Pension Diversion Act. In addition to permitting garnishment of salaries, it expands the source of moneys available to satisfy family financial support orders, and I will explain why.
The procedures to be used in enforcing garnishment orders against the federal Crown will, for the most part, be pursuant to provincial laws. Of course, this is essential if we are to have a smooth transition. However, I wish to emphasize the areas where the procedures will differ slightly. The first of these is the notice provision. Service of a notice that the creditor intends to garnishee wages payable by the Crown will benefit the creditor and the Crown. Service of a notice will enable the government, as the employer, to locate from employment records the proper employee within the large and decentralized federal public service. The resources of creditors will not be wasted by directing a garnishment summons to the wrong employer or by attempting to garnishee wages of persons who have ceased to be employees of the Crown. I would point out that the notice is only needed in order to initiate the first garnishment proceeding. Thereafter, the notice will be required if there has been a break in service of the employee or where there has been a lengthy time lag between garnishments by the creditor.
The other changes involved pertain to the application of provincial laws relating to garnishment. Under most provincial laws, where a garnishment order has been served on the employer after the employee's regular payday, the creditor must absorb the costs of the unsuccessful garnishment and proceed anew; that is, he has to start all over again. Bill C-38 will allow the garnishment order to apply to the next closest pay day of the employee, regardless of when the order is served in relation to a regular payday. It is common sense; sometimes common sense must be applied, and we are ensuring that it is applied in this case.
In addition, there will be no need to calculate how much was owing to the employee on the day the garnishment order was served, as the order will apply for the whole of the regular pay period. Again, this is common sense. This will resolve the difficulty and reduce the labour involved in calculating what is due or owing to an employee on the day the garnishment order is served. This provision will allow the attachment of the full
salary for every regular pay period, except that which is exempt by provincial law.
Part I of the bill also clarifies the position of Crown corporations. At present, some Crown corporations have their own bank accounts and are not in receipt of payroll funding from the Consolidated Revenue Fund. Others do receive their payroll money out of the Consolidated Revenue Fund. What happens is that under Bill C-38 those Crown corporations which do not receive their payroll funding from the Consolidated Revenue Fund will be subject to provincial garnishment laws. However, those Crown corporations which do receive their payroll funding from the Consolidated Revenue Fund will be subject to the garnishment provisions of Bill C-38 and these Crown corporations will be identified in the regulations.
Due to the mobility of the Canadian Armed Forces and the fact that there are already requirements for compulsory pay allotments for family support orders, the rules governing garnishment of members of the Canadian forces will be set out in regulations pursuant to the National Defence Act. These regulations will follow the principles set out in Bill C-38.
In these difficult economic times 1 am sure that creditors will welcome these important provisions which make it more difficult for those on the federal payroll to avoid their legitimate debts.
There is a very special group of creditors who will benefit more than most from the provisions of this legislation. That group is the women of this country who are dependent upon support payments from a spouse or an ex-spouse.
Women are disproportionately represented among the poor in this country. This is even more true of families headed by women. An astonishing 41.5 per cent of all families headed by women in this country live below the poverty line. The risk of poverty for families headed by women is six times that for men. These figures are from the National Council Welfare's 1980 preliminary statistics on poverty in Canada.
Many of the women who head families are separated or divorced from their husbands. Many have signed separation agreements or have a court order entitling them to maintenance for themselves and their children. However, and this is a figure that I find equally shocking, 70 per cent of all maintenance orders are in arrears within five years of the court order. Trying to collect the arrears is a time and cost-consuming ideal and one that families dependent on the support payments can ill-afford. I doubt very much if there is a Member in the House who has not received an appeal from a constituent who is facing just such a problem.
As you know, most aspects of family law, with the exception of divorce, fall within the jurisdiction of the provincial government under Section 92 of the constitution act of 1867. This government is committed to doing everything within its jurisdiction to ease the burden of these women, and this bill is one such measure.
June 18, 1982

Of course, spouses who obtain a court order for maintenance against anyone on the federal payroll, which includes all the people I have listed at the beginning of my speech, will now be able to enforce it through garnishment or attachment like all other creditors. In addition, we have included provisions applicable only for financial support orders. This act will allow the government, upon application by a person with a support order, to divert pension benefits for the payment of the support order. This is a very important and significant change because we know that older women are the poorest of the poor. Few elderly women receive benefits under private pension plans. This is because they are more likely to work for small employers who do not have private plans, and few can look to their spouse's pension plans for survivor benefits. As I have said time and time again, those woman discover that the old adage is simply not true. They do take it with them when they go.
The second part of the bill deals with the diversion of pension benefits to satisfy family financial support orders. The existing scheme of diverting pension benefits has been expanded and refined with respect to enforcement of family financial support orders. I want to make it perfectly clear that it does not allow the garnishment of pensions. Only a few provinces at present permit the enforcement of family financial support orders against pensions by means of garnishment. I want to emphasize today that we are talking about pension benefits payable to former public servants, Members of Parliament, judges and others.
What this bill does not do, and 1 want to be very specific, is provide for diversions of pensions such as veterans pensions and old-age security pensions. They are not touched by this bill. The bill is applicable only to superannuation or employee-employer financed benefit plans, and is restricted to benefits only when they become payable. In no way will it interfere with the contributions being made to those plans. The few Crown corporations who do not use the Consolidated Revenue Fund for their payroll but do participate in pension plans paid out of the Consolidated Revenue Fund, are also subject to this part of the bill.
Currently, under the Public Service Superannuation Act, the Candian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act, pension benefits may be diverted to a person seeking to enforce a family support order. However, whether or not a diversion takes place is at the discretion of the minister responsible for that plan. This is also a very important point. While this discretion has always been exercised in favour of a diversion, such diversions rarely exceed 50 per cent of the pension benefit. Provisions of the bill remove the ministerial discretion and make a diversion compulsory if there is a valid court order and the basic requirements, such as Canadian residency, are met.
Where there is no provision under provincial law for the diversion, attachment or garnishment of pensions for family financial support orders, the amount to be diverted will not exceed 50 per cent of the net pension benefit. Where provincial law does permit garnishment, attachment or diversion or such
Garnishment, Attachment and Pension Diversion Act
pensions for family financial support orders, the amount to be diverted will be determined in accordance with provincial laws.
I urge the Members of the House to pass this very important piece of legislation. A law of this sort is absolutely necessary if spouses and ex-spouses of federal employees are realistically to exercise their full legal rights under maintenance orders. I suggest to Members of the House that it will make life in their constituencies a great deal easier, and I would also like to make it clear that there will be no more special treatment for parliamentarians.
Since I am concerned that there will not be enough people aware of these changes, especially those women who have been suffering for a long time under previous circumstances, we intend to prepare pamphlets outlining these amendments after the bill is proclaimed. We will see that they are placed in public areas so that women with support orders will be able to pick them up. Of course, we will make sure that these pamphlets will be placed in family courts where they are likely to be picked up by those most interested.
What is equally important is the fact that these measures have the support of the provincial governments. I understand that hon. members of the House are anxious to see the bill passed and implemented as soon as possible. Once the bill is enacted it will take a few months to promulgate the required regulations and to ensure that all the necessary mechanisms are in place. I hope that this can be accomplished quickly and that the bill will come into force as soon as possible.


Mr. Joe Reid (St. Catharines):: Mr. Speaker, today, as the Minister of State for Mines (Mrs. Erola) has pointed out, will mark the end of one more ancient and Royal prerogative. Many years ago, the image of a creditor was one which could be conjured up while reading one of Charles Dickens' novels. But who is the creditor today? Today he is the corner grocer, the mechanic or the dentist. He could even be one of us, just as we, as hon. members of the House, could be losing the protection which was ours heretofore. It is the easy credit life which most of us live in a credit card society. But anyone in the practice of law has known the difficulties and the frustrations that existed when he attempted to recover a debt from a Crown employee. The storekeeper yesterday, as today, could not afford to write it off because of the cash flow restrictions, yet he was faced with a kind of difficulty as outlined by the government spokesperson. No attachment or garnishment could be levied against a person who owed money and was an employee of the Crown. If one were an Armed Forces representative, one would have to rely upon the commander, the department head or even the minister. Unless one had that person's support and authority, recovery was indeed difficult. The exemptions from execution still remain as against the Crown, but the execution, attachment and garnishment went back many years, as we all pointed out, and made it then impossible to effect the recovery which this bill will now enable with the passage of time.

June 18, 1982
Garnishment, Attachment and Pension Diversion Act
I was rather surprised to hear the minister make several comments with respect to the urgency of this legislation and the great help it will be to women. With the passage of time, at least six provinces and the two territories have already eliminated the protection which people within their jurisdictions had with respect to the provisions now coming forward in this federal bill. We come on the scene rather late. We ask why government employees should be given that preferential treatment. Obviously, the answer is that they should not be so privileged because we have seen the public service grow until today there are over 500,000 federal civil service employees. Whatever justification there was at an earlier time to give them the shelter which was theirs at that time no longer exists now. It has not existed for a good number of years.
Bill C-38 is a bill which is not before us for the first time. It has been before us since 1978. I would like to pay tribute to the late Tom Cossitt, the former Member of Parliament for Leeds-Grenville, who sought to make this legislation reality at least two years ago. It was his persistence which is now paying off in the form of this very long overdue bill.
I realize that the Minister of State for Mines has given a very detailed and precise outline of what the bill contains and to whom it applies, but I note again that the Minister of Justice (Mr. Chretien) is not in his place. The bill was presented to this House in the name of the Minister of Justice. His parliamentary secretary is not here to present the bill in his place. The Minister of Justice does not have that many bills before the House. I wonder if he is not here because of his anxiety to move over one seat to his right, or because he is critically tied up or otherwise engaged, but he should be in the House to address the House on his bill and make certain there is more justice for Canadians.


An hon. Member:: Surely you could be a more passionate speaker than the minister.


Joseph Lloyd Reid: The hon. member will have his turn to speak if he wishes to take his time and delay the bill that much longer.
The comments of the Minister of State for Mines were very helpful. They were so helpful that I will reduce my comments somewhat substantially with respect to the specific terms. But I would like to emphasize once again the two areas which are covered by the provisions in the bill. The first concerns salaries, remunerations, honoraria, and fees which any one of us might receive, or any other person in the employ of the Crown. That debtor must now be a judgment debtor in the usual provisions of the province before attachment proceedings might be initiated. As the minister has already pointed out, those attachment or garnishee proceedings are not the same as they would be in the province. They could come under the usual debtor arrangements, which would have simplified matters that much more; but no, the Crown, in this instance, had to introduce some new variations or procedures. But one finds, on reading the bill, that these do not prove fatal, and so we are prepared to accept them.
The second area of concern relates to the diversion of pension funds. I suppose this gives justification for the minister who is responsible for the status of women to make some comments which do not particularly relate to the bill, but certainly this bill does relate in a good, substantial measure, to support clauses. The second area covered, then, is the area of pensions which government employees might enjoy, and these are subject to what the bill refers to as a diversion. They do include a diversion of contributory superannuation plans and funds, as the minister pointed out, not including the Canada Pension Plan or pensions payable to veterans.
The party on this side wants to applaud these two exemptions. That is one of the reasons we have been emphasizing for so long the necessity for introducing the bill. Pensions may only be attached or diverted as they are referred to in the act, and only when there is a support order by a court of competent jurisdiction in the province of residence. While collection companies may not be able to get at those premiums or pensions, spouses, former spouses and dependants might now make application to divert up to 50 per cent of the pension payable.
I do not think I heard the minister say this, but it should be noted and emphasized that many of our public servants are facing the same difficulties as are Canadians all across the land. They might have as much difficulty as other Canadians in paying the bills chargeable to them. The bill has an express provision so that they will not be allowed to discharge the employee by reason of having come under the provisions of this bill if that is the only reason upon which such application for discharge is based. It is then reasonable to assume that they should be placed under the same provisions as any other Canadian in the collection or recovery of debts. However, I hope they will continue to remember that they are federal public servants.
There is no need for us to prolong this debate. The argument have been presented in a very detailed form. I want to say that it has been a privilege to speak to this bill, even at this late date, and to say on behalf of Her Majesty's Loyal Opposition that we urge its early passage through all stages.


Some hon. Members:: Hear, hear!


Mark Willson Rose: Mr. Speaker, I wondered a little while ago whether or not we were going to talk out this very important bill this afternoon. The minister spoke at length and in great detail, and eloquently, of course. There are two other bills we have agreed to let go through. I thank the other two members for their detailed explanation of the bill and their words certainly do not to be repeated by me, therefor I have no intention of doing that. I see a nod of agreement over there. It seems to me, Mr. Speaker, that the way a person judges a bill is to see who is for it and who is against it.

June 18, 1982

1 thank my party's justice critic, the hon. member from Burnaby (Mr. Robinson), for the work he has done on it. He has been anxious to see this bill go through, and has been pressing this matter vigorously, along with a number of other people. Let me give a brief list of those who favoured this bill. They are the Law Reform Commission, the chairman, Mr. Frank Muldoon, and his commission, and the Public Service Alliance of Canada who might not necessarily be expected not to be as anxious perhaps to have this bill passed because at the moment their members are protected from garnishments and pension attachments. Then there is also the Ontario Society of Collection Agencies; this group is naturally jubilant. We can easily understand their impatience, as they wait for the passage of this bill. Finally, there are the women of Canada who, as everyone knows, probably earn little more than half the average wage of the male. Many have been abandoned or retired or are widows, and older women at the lowest end of our economic totem pole. They also would be anxious to have this additional protection.
The matter of maintenance payments needs to be straightened out. That was recognized a long time ago by the Law Reform Commission. It is a form of privilege really, that members of Crown agencies or civil servants or public servants historically could hide behind the fact that they are employed by the Crown, to evade maintenance. These are the skippers, the people who run out on their responsibilities. They will not be very happy with this as they try to evade responsibilities. It is important that we pass this bill and pass it with all due alacrity.
It is important to pay tribute to the Public Service Alliance of Canada here. Their spokesperson, Mr. Del Hewitt-White, says that he sees no reason why public employees should continue to enjoy this benefit unavailable to other citizens. The Public Service Alliance has looked into this matter, it has sought legal advice and has voiced no objection to this bill. As a matter of fact, the Alliance is encouraging its passage, as long as the scope of the bill does not go beyond that which is operated and prevails in the private sector in garnishees or pension attachments.
I understand that many of the provinces are in favour of this bill. I will not go further than that, Mr. Speaker, because I know that there are two other bills which we are anxious to consider this afternoon. I would congratulate the government for bringing the bill in. It is long overdue. The malingering debtor is someone who should not be able to hide behind his position and escape his obligations merely because he happens to be a member of a Crown agency, or a Member of the House of Commons or of the Senate, or happens to work as a civil servant.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Blaker):: The understanding of the Chair is that hon. members may wish to put this motion and bill through all stages today.
The present motion contains a reference to the Standing Committee on Justice and Legal Affairs. 1 would need a
Garnishment, Attachment and Pension Diversion Act
motion, plus the unanimous consent of the House, to amend this reference.
Shall I put it then, in the name of Mr. Kelly, seconded by Mrs. Killens, that the motion be amended to refer the bill to Committee of the Whole?


Erik Nielsen: Mr. Speaker, we would consent to that, of course, but it would have to be moved by a minister of the Crown.


The Acting Speaker (Mr. Blaker):: I am informed that that is not necessary, because we have some spending-
Rather than dispute the issue, I will certainly put it in the name of a minister.


Jean-Luc Pepin: that the bill be now referred to the Committee of the Whole.


Dave Nickerson: On a point of order, Mr. Speaker, in glancing at the first page on this bill I find that it carries the recommendation of the governor in council for the moneys that need to be appropriated to carry this into effect. Therefore, Sir, 1 would submit it is in fact a money bill and does require that the motion be moved by a minister.


The Acting Speaker (Mr. Blaker):: I was in error then and I am grateful for the correction by the hon. member for Yukon (Mr. Nielsen) and the hon. member for Western Arctic (Mr. Nickerson).
Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and, by unanimous consent, the House went into committee thereon-Mr. Blaker in the chair.
The Assistant Deputy Chairman:: Order. House in Committee of the Whole on Bill C-38, An Act to provide for the garnishment or attachment of Her Majesty in right of Canada and for the diversion of pension benefits payable by Her Majesty in right of Canada under certain enactments. Shall Clauses 2 to 20 carry?


Dave Nickerson: Mr. Chairman, I have a question concerning Clause 12 which I would like to put to the Minister of State for Mines who is sponsoring the bill. Clause 12 deals with regulation-making powers. Paragraph (a) allows the authority to designate by regulation places where service shall be made. 1 wonder if it is the intention of the government to have one place in Canada where, pursuant to Clause 7, submissions can be made by registered mail; or whether it is the intention to set up one office in every province and territory, or to establish a series of offices throughout the country, more than one in each province or territory.


Judith A. Erola: Mr. Chairman, it is my understanding that this will vary from province to province, as the place of residence. I think that all of these considerations will take some time to put into place properly.


Dave Nickerson: And the Territories?


Judith A. Erola: And the Territories as well.

June 18, 1982
Garnishment, Attachment and Pension Diversion Act


Dave Nickerson: Is the minister confirming that there would be an office established in each Territory, besides the provinces, where such service could be made?


Judith A. Erola: No, Mr. Chairman, I was not confirming that. I was saying only that the place of residence from which the application came would be the area.
It is my understanding-I may be corrected in that-that there would be no offices set up in each province, that there would be no additional bureaucracy required.


Dave Nickerson: 
Judith A. Erola: Mr. Chairman, it would be difficult for me to give a specific example at this time. I would be very happy to look into the regulations and to discuss them to see just what specifics it would apply to.
However, I would suspect that in this particular case there may have been additional allowances to which they refer, as in the case of certain officers who serve abroad.


Denis Éthier: An hon. member to my left has suggested that we might proceed clause by clause rather than by a group of clauses. I will put the question again by reference to all of the clauses in Part I.
It appears that I can put, under Part I, Clauses 2 to 20, as one question. Shall Clauses 2 to 20 carry?
S30)


Mr. Lambert:: Mr. Chairman, I have one question. This is no reflection on anyone here, but I want it made patently clear in the reply from the minister that this legislation in no way whatsoever would attach the pension payable to a war disability pensioner, a recipient of a war veterans allowance, a recipient of a merchant seaman's service allowance, pensions or benefits under the Compensation for Former Prisoners of War Act or any derivative of those four acts. While I recognize that the schedule in this bill does not mention it, there was nothing
said in the minister's opening statement nor was there anything said in any of the speeches which followed. However, I wish to have it made crystal clear and on the record that this legislation will not touch those pensions or entitlements.


Judith A. Erola: Mr. Chairman, it is my understanding that they will not, but I will clarify that completely for the hon. member in just a moment. Some of these may come under the National Defence Act, and I would like to get clarification. I am under the impression they will not, but I will get confirmation for the hon. member in one moment.


Denis Éthier: The House may wish to delay further questions for a moment because I understand one of the officials of the department will be available.


Judith A. Erola: Mr. Chairman, would the hon. member repeat his question?


Marcel Joseph Aimé Lambert: Does this bill have any application to payments under war services disability legislation, under the War Veterans Allowance Act, under the Merchant Seamen Compensation Act, the Compensation for Former Prisoners of War Act and any payments made under those acts to survivors with respect to survivors' benefits?


Judith A. Erola: It does not.


Marcel Joseph Aimé Lambert: I thank the minister.


Judith A. Erola: Mr. Chairman, may I respond to the question put by the hon. member for Western Arctic? Wherever there is an office of the Department of Justice it will be handled through that office. As I said earlier, there is not to be the creation of new offices. There are offices in the Territories and Yukon.
What was the second question?


Dave Nickerson: The second question dealt with the authority sought under Clause 12(b) to reduce the amount of a salary which might be attached by way of garnishment.


Judith A. Erola: It is exactly as I suggested earlier. These are the extra allowances such as, for instance, for boots and gloves to postal workers. They would not be included.


Marcel Joseph Aimé Lambert: Expense accounts?


Judith A. Erola: That is defined under "salary", apparently. If hon. members will look at Clause 4, they will see the definition of "salary".


Marcel Joseph Aimé Lambert: Mr. Chairman, I do not want to get into a discussion here because there is an agreement.


Erik Nielsen: Right.


Marcel Joseph Aimé Lambert: However, there is a disagreement as to the contents of this bill, and it is absolutely not to be passed until we have a crystal clear understanding.


Judith A. Erola: In Clause 4 "salary" is defined as the following:
June 18, 1982

(a) in the case of a member of the Senate or House of Commons, all moneys payable under the Senate and House of Commons Act, the Salaries Act and the Parliamentary Secretaries Act, other than moneys not included in computing the member's income for the purposes of Part I of the Income Tax Act-
That is very specific.


Marcel Joseph Aimé Lambert: That is clear, Mr. Chairman, but in some of the provinces there are provisions that there is a part of a salary which cannot be touched. In other words, all of a man's salary due on payday cannot be attached because he must have something on which to live. I do not know what it is today. It used to be something like $85 a month about 25 years ago. Whatever it is, it is to be set by regulation, according to Clause
12(f)).


Judith A. Erola: No.


Marcel Joseph Aimé Lambert: Yes, it is.


Denis Éthier: Order, please. The Chair has a difficulty. It is obviously no imposition on the Chair that the minister and the hon. member should have this discussion, but the stenographers have a difficulty because the minister and the hon. member are tending to speak before their microphones are turned on. Possibly they could wait until they are given the floor by the Chair.


Judith A. Erola: Mr. Chairman, apparently the rules are very clear that provincial laws will prevail.
Clauses 2 to 20 inclusive agreed to.


Denis Éthier: Shall I put the question on all clauses under Part II, Clauses 21 through 37?


Dave Nickerson: Mr. Chairman, I have one last question. Clause 23(2) deals with the situation in which a pension is to be attached in favour of a minor, someone under the age of 18. This clause gives to the minister the discretion as to who should collect that money. 1 wonder why that discretion is given to the minister and not to a court of competent jurisdiction.


Judith A. Erola: Mr. Chairman, it is a matter of mobility. It is a question of a person moving out of the home. A problem is created, so it has been dealt with in that way.
Clauses 21 to 56 inclusive agreed to.


[Stage Direction]
Schedule agreed to.
Clause 1 agreed to.
Title agreed to.
Bill reported, read the third time and passed.

Hon. Donald J. Johnston (President of the Treasury Board) moved: that Bill C-120 to amend the Supplementary Retirement Benefits Act be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Supplementary Retirement Benefits Act


The Acting Speaker (Mr. Blaker):: I understand that it is desired to put this bill through all stages. That will require an amendment to the motion.


Donald James Johnston: Mr. Speaker, we have two bills to deal with this afternoon in the little time remaining and both are very important in terms of saving money and providing better management of that money for the taxpayers of the country.
At the outset I should like to move that this bill be referred to Committee of the Whole instead of to the Standing Committee on Miscellaneous Estimates.


The Acting Speaker (Mr. Blaker):: Order, please. Since it is the minister's motion, the procedures do not allow him to amend it. The Chair will recognize the hon. Minister of Transport (Mr. Pepin).


Jean-Luc Pepin: that the motion be amended to read that the bill be referred to Committee of the Whole.


The Acting Speaker (Mr. Blaker):: Is there unanimous consent?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Donald James Johnston: This bill proposes the so-called prorating amendment to the Supplementary Retirement Benefits Act- the SRBA for short. As members know, the SRBA provides for the January adjustments to all public service pensions to compensate for increases in the cost of living over the past year.
Under present provisions, the full annual increase is payable each January to all pensioners, even those who retired during the preceding year. This has meant that there is a tendency for employees considering retirement to do so at year-end to benefit both from a full year's salary and a full year's indexing. It is proposed that this anomaly of a double adjustment for the last year of work be eliminated by providing that the first indexation benefit be prorated on the basis of the time elapsed between the date of retirement and the end of the year. This means that the first indexing benefit would be directly related to the time when the employee is actually retired.
The arrangement proposed is quite straightforward. Perhaps I can provide an example. Someone who retired in January of a given year would receive eleven-twelfths of the full year's adjustment paid the following January. Someone who retires in June of the year would, the following January, receive six-twelfths of the full benefit. Finally, someone who retires in December would receive nothing by way of an adjustment but would receive a full adjustment in January of the second calendar year following retirement. The bill provides that the prorating adjustment of the first year's indexing benefit will apply to anyone becoming entitled to a pension on or after

June 18, 1982
Supplementary Retirement Benefits Act
January 1, 1982. A press release was issued last December explaining that this was how the proposed legislation would operate, and all departments and agencies were asked to bring this to the attention of those who might be affected.
Adoption of this amendment will mean cost savings that will grow year by year. That is, there will be a cost savings of some $6 million in 1983 alone, and because the savings are both additive and compounded, they escalate rapidly in subsequent years. This is very useful as far as personnel management is concerned, because of the tendency of public servants to retire in the last quarter of the year. 1 am advised that last year, better than half or 56 per cent of retirements took place in the last quarter.
There is a final dimension to the bill that I would like to discuss, and that is the effective date. The original intention was to have prorating apply to anyone who retired any time during the year the amendment was proposed. Every effort was made to draw this application to the attention of those who might be affected.
However, we are conscious of the representations made by the New Democratic Party that this timing does effectively change the rules of the game for those who retire before the change is actually enacted. The government is prepared to entertain an amendment to that effect when the bill reaches committee stage.


Vincent Martin Dantzer: Mr. Speaker, 1 am glad to have the opportunity to speak to this bill which is long overdue. This party supports the bill but deplores the time taken to get it before the House.
As the minister has said, the bill will correct the longstanding loophole commonly referred to as the "year-end loophole". The government is given to closing taxation loopholes and 1 am glad to see that this one will not take money from the average citizen but will merely correct a provision in the act. I was glad to hear the minister say that a lot of money will be saved as a result of this legislation, but he did not indicate how much money had been wasted over the years because the loophole was not closed earlier.
The thing that concerns this party is that the government took so long to bring the legislation before the House. When the government came into power in 1980, one of its major platforms was pension reform. That was to include all pensions-for Members of Parliament, civil servants, the CPP- everything. In the Speech from the Throne, the Prime Minister ( Mr. Trudeau) said that Parliament would be asked to consider a program of action that was designed to respond to individual needs by promoting greater security for the elderly. He also said that the government would convene a national pension conference in the fall of 1980 and that work must begin immediately to design better methods of providing flexible, portable and secure pensions. That pension conference was not held until late 1981, Mr. Speaker. Then the Prime Minister said that he would talk to the provinces and promised a meeting in July 1981. It was not held, Mr. Speaker.
The Minister of National Health and Welfare (Miss Begin) has promised a green paper on pension reform every month since last November. Only recently she had indicated in speeches to pension conferences that pension reform would come about by the end of June. We find out now, however, that the green paper or the buff paper or the white paper or whatever colour it is, will not come before the House until some time next fall. That is an irresponsible and inadequate response to the needs of pensioners of this country.
For a long time there has been a great deal of discussion about pensions, most of it initiated by the government. The studies include "Canada at the Pension Crossroads", a report prepared for the Financial Executives Research Foundation (1978); the Confirentes Report by the government of Quebec in 1978; "the Joint Health and Welfare/Finance Study of Retirement Income in Canada", the Lazar Report, 1979; the Senate Committee on Retirement Age Policies (1979), and the Economic Council of Canada's "One in Three, Pensions for Canadians to 2030 (1979)". That was followed by a select committee of Parliament in Ontario, and the final report was received this year.
So it is very difficult to say that most of the studies, most of the information available, most of the research has been done. What I am asking this House, and in particular the government, is, why the long delay? I am asking the Minister of National Health and Welfare, the Minister of Finance (Mr. MacEachen) and the Prime Minister if they could not bring forth the results of their studies a lot sooner than next fall. Because of the long delays we have many people very worried. Recently we have seen additional reports from Quebec and British Columbia, and most recently a rather comprehensive report on pensions from the Canadian Labour Congress. 1 personally have seen reports and studies done by small business in Canada, and they are certainly concerned with the delay. They are concerned about the delay, the amount of uncertainty, and the kinds of signals they are getting from this government as to what direction pension reform is going to take.
Certainly we are all indebted to the women's organizations, in particular the status of women groups, for holding very comprehensive conferences throughout the country to bring forth the real problems which pensions hold for women. Yet the government, in spite of all this information, refuses to act. We depend on pensions, and I feel members opposite have not taken advantage of the climate in this country to have the government bring forward proposals to be discussed and passed into law.
It is interesting to know that by and large most of the authors of the studies have agreed on a few essential but major changes in our pension schemes. All these studies indicate a general agreement that the elderly living in poverty should be helped. The Minister of National Health and Welfare has many times in her speeches emphasized that this is her first priority. Why have she and the government not acted on that
June 18, 1982

issue? Most of the studies agree that pensions should be more portable and vested earlier. These are not difficult things, so why have we had no response from the government? These people all agree pensions should be more effectively protected against inflation, surely a basic thing in these highly inflationary times. They all agree that more people should be covered. Certainly our private pension schemes are not broad enough to do the necessary things.
They all agree, and I think this is most important, that women need better pension protection. When is this government going to give the women of this country better pension protection? Finally, all these studies agree that our pension system will be costly to the individual taxpayer, the business owner, and government. Of course, in these times that is a key issue. Delay and more delay by this government is making it impossible for us to reach satisfactory conclusions on and solutions to the pension problem. To cover the cost of our first problem in pensions, that of elderly people living below the poverty line, would cost some $750 million. I would be the first to say that this is a very serious matter, and I would like to point out that this government has spent some $1.4 billion to buy non-productive service stations for PetroCan. It spends more than $100 million a year on advertising to try to convince the public it is a good government, when the public knows the story is a far different one. Now I find it is going to spend at least $5 million to celebrate July 1. If the government got to work it could promote and pursue schemes to allow us to finance that $750 million.
I could pursue this area further but I will not because I know we are in a hurry. However, I think it is incumbent upon the government to proceed on pensions and on its green paper. Surely the small businessmen, workers and elderly people of this country are not going to put up with it much longer. They are going to remember and they will act, I am sure, if this government does not.
I wish to say again that we support this amendment. Our only concern is that it took so long. I hope it will not take so long for the minister's green paper to be brought down.


The Acting Speaker (Mr. Blaker):: Before I recognize the hon. member for Kootenay East-Revelstoke (Mr. Parker), it has been mentioned to the Chair that there is a disposition not to see the clock at four o'clock. Is that agreed?


Some hon. Members:: Agreed.


Erik Nielsen: Mr. Speaker, that is agreeable as long as we do not see it at five o'clock for the equivalent amount of time we go beyond four o'clock.


The Acting Speaker (Mr. Blaker):: There may be a difficulty in that regard. I had not mentioned it because I did not want to comment on whether or not the hon. member for Wetaski-win (Mr. Schellenberger) was in fact going to appear. The business of private members' hour, to which the hon. member for Yukon (Mr. Nielsen) referred, is Motion No. 7 standing in the name of the hon. member for Wetaskiwin. I have no information as to where that matter will proceed.
Supplementary Retirement Benefits Act


Erik Nielsen: We will cross that bridge when we come to it, sir.


The Acting Speaker (Mr. Blaker):: Exactly.


Mr. Sid Parker (Kootenay East-Revelstoke):: Mr. Speaker, we are dealing with an act to amend the Supplementary Retirement Benefits Act. During the past year representatives of all three parties have been discussing this, and it is unfortunate that it has taken until June to get it before the House. For that reason we have presented an amendment, which I will place before the House at report stage, and which I believe has been agreed to by all parties in the House. Thank you.


[Stage Direction]
Motion agreed to, bill read the second time and, by unanimous consent, the House went into committee thereon, Mr. Blaker in the chair.
Denis Éthier: Order. House in Committee of the Whole on Bill C-120, to amend the Supplementary Retirement Benefits Act.


Cyril Lloyd Francis: Shall Clause 1 carry?
On Clause 1-


Sidney James Parker: Mr. Chairman, we have some concern with Clause 1. We have had agreement from all parties in the House, I believe, and because of the lateness of the adoption or the presentation of this bill we have expressed our concern. Many people could have been planning for their pension earlier on but now all of a sudden because of this bill they could be affected. Therefore, I move, seconded by the hon. member for Mission-Port Moody (Mr. Rose):
That Clause 1 of Bill C-120 be amended
(a) by striking out line 11 on page 1 and substituting the following:
"1982 or later year, and who retires, or whose spouse or parent retires, on or after the day on which this section comes into force, for a month in the"-
and we carry on with the rest of the bill.
In area (b) by striking out line 27 on page 1 and substituting the following:
"retirement year in 1982 or a later year, and who retires, or whose spouse or parent retires, on or after the day on which this section comes into force, for"-
Then we follow on with the rest of the bill.


Denis Éthier: Shall Clause 1 as amended, carry?


Erik Nielsen: Mr. Chairman, as long as your text is the same as mine, because it was not read accurately by the hon. member putting the amendment.


Denis Éthier: Then we had better have the amendment in the hands of the Chair as the one which the House will consider.


Erik Nielsen: Perhaps it should be read, Mr. Chairman.


Denis Éthier: The amendment moved by the hon. member for Kootenay-East Revelstoke reads:
That Clause 1 of Bill C-120 be amended

June 18, 1982
Retention of Records
(a)	by striking out line 11 on page 1 and substituting the following:
"1982 or a later year, and who retires, or whose spouse or parent retires, on or after the day on which this section comes into force, for a month in the"
(b)	by striking out line 27 on page 1 and substituting the following:
"retirement year is 1982 or a later year, and who retires, or whose spouse or parent retires, on or after the day on which this section comes into force, for"
That is the motion in possession of the Chair. I hope that is the same as the one in the possession of all hon. members. Therefore, I will now put the question as to whether the amendment is agreed to.


Some hon. Members:: Agreed.


Denis Éthier: Shall Clause 1, as amended, carry?
Clause 1 agreed to.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and passed.
[ Translation]
Yvon Pinard: Mr. Speaker, 1 think that if you could forget the clock, we could deal very quickly with all stages of Bill C-118. We have a speech of only thirty seconds, and I think the Progressive Conservative Party Whip has a short speech, and in any event, as far as we are concerned, we are willing, provided there is unanimous consent, for you to forget the clock, and in return, we will agree to the period for private members' business lasting the usual hour.


The Acting Speaker (Mr. Blaker):: I might indicate to the President of the Privy Council-perhaps he was out of the chamber for a moment a little earlier-when the Chair was advised of that wish on the part of the House, it was agreed that the Chair would not see the clock.


Erik Nielsen: With that condition.


The Acting Speaker (Mr. Blaker):: Yes.


AN ACT TO AMEND CERTAIN ACTS THAT PROVIDE FOR THE RETENTION OF RECORDS MEASURE TO AMEND
Hon. Serge Joyal (for Mr. Johnston) moved: that Bill C-118, an Act to amend certain acts that provide for the retention of records be read the second time and referred to the Standing Committee on Miscellaneous Estimates.


Mr. Norman Kelly (Parliamentary Secretary to President of the Treasury Board):: Mr. Speaker, briefly, it costs a lot of money to retain records in the business community these days. This bill will set a standard of six years' retention with the opportunity of diminishing that, depending upon the circumstances. We hope this amendment, through the record retentions act will save approximately $100 million a year in storage
costs. For that reason, we believe it has received unanimous support of all members of the House. Before I sit down, 1 would like to thank the critics of the opposition parties who were so helpful in expediting the debate this afternoon.


William James Kempling: Mr. Speaker, I will only be a few moments. We welcome this bill. I am pleased to see that it was brought forward. It will allow businessmen to dispose of a lot of old records. In many cases it will free up valuable space and file capacity.
The only change that 1 could suggest to the bill which I believe would improve it will be to allow the owners of defunct businesses to turn over their records to the government or a government agency if a businessman dies and his business is wound down. A widow should not be obliged to keep records for six years. Perhaps in the consideration of the implementation of this bill that suggestion could be looked at. 1 do not think it would be a very difficult problem if the information were broadly disseminated across the country to allow for that provision. Other than that, we welcome the bill. We hope it is the beginning of the several regulatory reforms that we need in the country. We know it will aid the business community, and we thank you very much.


Mark Willson Rose: Mr. Speaker, I am pleased to offer the support of our party for Bill C-118. On the one hand, records are certainly necessary but we also know that businesses are often encumbered by a good deal of red tape and problems of storage of records and that kind of thing. If this bill does assist in lessening that burden somewhat, we will be very pleased to support it.


The Acting Speaker (Mr. Blaker):: The Chair will require a motion, as in previous instances, in order to refer the bill to Committee of the Whole.
Is there unanimous consent?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time, by unanimous consent considered in Committee of the Whole, reported, read the third time and passed.
The Acting Speaker (Mr. Blaker):: Order, please. It being after four o'clock, the House will proceed to the consideration of private members' business, as listed on today's Order Paper, namely, notices of motions, public bills and private bills.
As indicated earlier by the hon. member for Yukon (Mr. Nielsen), the House will give a full hour's consideration to private members' business. Hence, it will proceed until approximately 5.12 o'clock. Is that agreed?


Some hon. Members:: Agreed.
June 18, 1982


PRIVATE MEMBERS' MOTIONS
[Stage Direction]
All items preceding No. 7 allowed to stand by unanimous consent.

[Stage Direction]
The House resumed, from Friday, June 27, 1980, consideration of the motion of Mr. Schellenberger:
That, in the opinion of this House, the government should consider the advisability of setting floor prices related to costs of production for cereal and oilseed crops one month before planting in order that farmers may be provided adequate returns to ensure sufficient production to meet Canada's domestic and export needs.
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, this motion does not really have to be debated. It was introduced in the House two years ago, but the session has been so long it has come up again. Since the mover and the seconder of the motion have already spoken, they have asked me to explain the background of it. Hopefully, all parties, as I think they did the last time, will agree that it should be allowed to go through and be considered in committee.
As read by Mr. Speaker, the motion concerns a very simple technical decision which must be made each year by the Canadian Wheat Board. In effect, it asks the government to consider making it mandatory for the Canadian Wheat Board to do this one month before the commencement of the planting of crops. Approximately eight times out of ten the announcement is made one month before seeding, but every so often, whether the Canadian Wheat Board goes to sleep or the Minister in charge of the Wheat Board goes to sleep, it is not announced. This causes considerable worry and strain for persons trying to decide what crop to seed that year and particularly whether they will get back their money if they sow a particular crop.
This is not a political matter or a matter of philosophy. Simply it is a request of government to let the Standing Committee on Agriculture consider the possibility of including a direction to the Canadian Wheat Board from Parliament that we would like it to do this one month in advance of seeding time, which is roughly the middle of April. It is very simple. The House should not have to listen to an hour's debate. It is simply a request of government to consider this, which means putting it before the standing committee to let it decide.
I hope by the end of my remarks that this matter could be checked out by someone on the government side who knows something about it. Technically the matter comes under the jurisdiction of the Minister in charge of the Canadian Wheat Board who, by our custom, is not allowed in this chamber; he sits in the other place. Therefore, it really falls on someone in the House to listen to the message in this motion and to support it. As I have just said, there is nothing to it. It is just a matter of making formal what the Canadian Wheat Board does anyway.
Grain Prices
I should like to give the background of this motion. This debate gives me the opportunity, which I personally appreciate, to put on the record the importance to Canada of having made the decision 47 years ago to put western grains under some form of organized marketing that did not take control away from the farmers. It was simply an organization to set the price; that is all it does. Then it turns this monopoly on the right to sell it, which Parliament gave to the Canadian Wheat Board, over to private enterprise to sell.
The only thing we have is a board which meets every day to look at the world situation and to set the price. There is another division which looks after the movement of grain around the country and tries to persuade the railways and the grain companies to do something to make money, but essentially it has only one function-to set the price. We have collected the brains of all the universities and all the public servants who sit there every day to decide what the supply and demand are like in the world and to set the price. The practice has been, over the last six to ten years, for them to simply look at the newspapers to see what speculators are doing with the wheat price down in Kansas, Chicago or Omaha. They have to be literate and able to read the prices set in United States markets. Then they announce the price for which Canadian grain will be sold the next day.
I should like to refer to the importance of the Canadian Wheat Board. One way of setting price is to announce it daily for any sales actually consummated on that day, but at the beginning of the year the Canadian Wheat Board has to announce the initial price for every bushel of grain grown and delivered in the coming crop year. This initial price is like a downpayment. Farmers want to plant in the middle of April, to harvest in August, and to get the grain into the elevator. When they deliver it to the elevator, they receive a downpayment or a partial payment on the grain. Before farmers plant they are able to produce several crops. They know roughly what it will cost to produce each type of crop, and they like to know what price, roughly, they will obtain at the end of the year. The initial price is an indicator to them of what the Canadian Wheat Board thinks is a safe level so that they will not lose any money. Technically the announced initial price is not a floor price, but in reality it is because farmers are given money the minute they deliver the grain, even though the grain may not be sold for another two years.
When all the grain is sold, all the figures are brought together into a pool and averaged out. After the costs are taken off because farmers pay for everything, then the board makes a final payment about a year and six months or a year and eight months after the grain was actually grown. This system has worked for 47 years. It is slow, but it satisfies the great majority of farmers. They will all get the same price for the same grain, plus or minus the cost. Since this system has worked for the last 47 years, why should we be concerned about the timing of the price announcement? As I said, the farmer would simply like to have an indication of what the best

June 18, 1982
Grain Prices
grains are that he can put together and what the Wheat Board thinks the price will be for that year. If the Wheat Board determines that the price may be $6, it will probably make an initial payment of approximately $4.50. With this information, the farmer can receive his $4.50, and when the final accounting is completed the Wheat Board can decide that he has a final payment owing to him of approximately $1.25, depending on the final sale.
Would hon. members not agree that it would be of assistance economically for farmers to have at least a rough expectation of return on a certain crop, whether it be oats, barley, wheat or cereal crops such as rapeseed? It is a very simple proposal to have the Standing Committee on Agriculture consider the advisability of making it mandatory for the Wheat Board to remain aware of conditions and give its best estimation of prices at least one month before the middle of April each year in order to give the farmer a chance to choose which crop he might expect to get the best returns on. Let the Wheat Board indicate to him what they think the best returns will be.
The heart of the resolution is found in the expression "setting floor prices related to cost of production". I have already indicated in my remarks that the price is actually set on the best guess of what the final price will be during the year. A certain proportion is taken from that price. The purpose of this motion is to have the government consider basing this amount on the cost of production along with announcing it a month in advance, of planting.
This brings me to the consideration of the long background of this phrase "the cost of production". It was in 1958 that the national agricultural policy was announced in the House by the then Prime Minister, John Diefenbaker. There were five points in that national agricultural policy. The first point was to accelerate marketing. As you know, during that period we developed markets in the Communist countries.
The second point was the stabilization of prices. As the House knows, we enacted several bills to deal with this point but the key one was the Agricultural Stabilization Act. This act concerned all products, not just wheat. Wheat was already covered by the Canadian Wheat Board in the initial payment. This act gave the government the statutory authority in effect to set a floor price based on the cost of production in order to assist farmers. However, the Canadian Wheat Board price was simply the best guess of what the initial payment should be on the farmer's bushel of grain.
The third point of that national policy was the stabilization of income. The Crop Insurance Act is an example of how we implemented that point.
The fourth point was to establish a modern system of farm credit. Out of that evolved the Farm Credit Corporation, which is still in existence today, the legislation for which was amended just a few months ago.
The final point in the policy was conservation, which concerned making the best use of our resources through environmental study and the improvement of soil conditions. The main example of that is ARDA.
This national agricultural program with its five directions has been in place these last 25 years and has been honoured by every government since 1958. We use the same legislation with slight amendments. Since all parties support the basic principles of this national agricultural policy, agriculture has not really been a partisan matter in the House during the last 25 years. We have the responsibility, however, of continually reviewing these programs in order to make them better. Every session, there are always one or two amendments to make improvements to it. For example, there was the Western Grain Stabilization Act which was introduced by the Hon. Otto Lang, the minister at that time. That act is still in effect today. Therefore, these stabilization principles are constantly being modified.
The purpose of relating that policy to the motion before us today is to point out that the key issue we are discussing concerns the way to stabilize prices. The key document in this regard was the Agricultural Stabilization Act of 1950. At that time a great debate ensued as to how to create a formula to protect a farmer's cost of production so that if he took a chance to grow a certain product he would at least get his expenses back. Therefore, we set up the act on the basis of a formula. In order to arrive at that formula we had to consider several factors, the cost of production being the main one. However, it proved almost impossible intellectually to determine what the average cost was. For example, if you took 100 farmers who were producing the same product, each farmer would have a different cost. If you took the middle group of farmers as the mean and set a cost of production, if that cost on which you would guarantee a minimum return was lower than a certain farmer's cost of production, he would take a beating. On the other hand any farmer whose cost of production was lower received a large bonus. Therefore it was impossible on the sheer basis of averaging statistics to arrive at a precise cost of production figure.
The work done by the hon. member for Wetaskiwin (Mr. Schellenberger) and the summary of his work which he presented in his speech at that time is an example of the imaginative and innovative quality of the work he did. He put those figures on the record, and by working the index backwards and forwards he discovered that the concept of the index was not entirely fair either. I will not go into the details which are the concern of the statisticians. It is very difficult to make statistics work accurately for you and it is equally difficult to allow for the changing conditions which we have seen during the last 30 years.
The Agricultural Stabilization Act, as it was originally passed, was based on a formula in the form of a guarantee that if a farmer were go to grow a crop, such as beans, at a previously set price, he knew before the crop was planted that he would get 80 per cent of a three-year moving average price, which was the closest method of establishing the estimated cost of production for beans.
June 18, 1982

The statisticians who established these prices worked hard, but no matter how hard they worked-looking back at it 25 years later-one realizes that it was impossible to be precise. Therefore, the cost of production is still an active subject to be studied by those statisticians. If any hon. members want to know what I mean by the difficulty of determining a price, they should read the last report of the Canadian Federation of Agriculture in which their officials spent two years working with the Department of Agriculture trying to arrive at cost of production figures. Do not blame them, as humans beings, for failing. I think it is humanly impossible to actually project any firm cost of production. Unless you have some relationship to the cost of production, any form of support price which is established is not much good. In effect, what the farmers are asking this House to do, through the Canadian Wheat Board, is that when the price is set, is not simply to use the criterion of the best guess of what the price will be in the United States over the next year. Take a look at the farmers' costs of production. Even if it is proved, pick some initial price related to the cost of production which is reasonable. If one reads through the speeches given by the present Minister of Agriculture (Mr. Whelan) over the last ten years, one will see he has been trying to do this in relation to other products. He has changed the three-year working average. He has changed the percentage from 80 per cent to 90 per cent and up to 100 per cent, searching for a better way of doing it. But the wheat farmer does not receive that type of attention from the Minister of Agriculture because these particular items, cereals and oilseeds, are under the Canadian Wheat Board.
The hon. member for Wetaskiwin is really requesting that we give to the farmer who works under the socialized control of the Canadian Wheat Board, if one wants to call it that, a type of initial price based on the cost of production rather than the best guess. There is a risk involved in this because the Wheat Board does not have any money of its own and when it sets its initial price, it must go out and borrow from the banks to pay the farmer. Then when the grain is sold a year or a year and a half later, the farmer accounts for the price he actually sold it for, the cost of interest is taken off along with the cost of shipping and all the rest and then the second or final payment is worked out. The farmer is very happy when he gets more than he expects because it is still a guessing game. What the farmers need now, considering all the changes during these last few years along with high costs, is an initial price based on something better than the best guess. We should see whether we cannot decide a floor price based on a rough equivalent of the cost of production of various types of grain. I will not put words into the mouth of the hon. member for Wetaskiwin, but I know that is what he is trying to do.
I would suggest that on this particular motion, which is only requesting the government to consider this proposal, it would be quite safe for whoever speaks for the government to stand up in the House and say there should be no change in the value of Ways and Means of the government. The government should simply be asked to accept this motion and put it before
Grain Prices
a standing committee of the House to let it determine some form of direction for the Canadian Wheat Board. This would allow the farmers under the jurisdiction of the Canadian Wheat Board to make the same effort in planning as those producing other products in Canada covered by the Agricultural Prices Stabilization Act. It is very straightforward. It will never be perfect, but at least there will be a little improvement.
This motion is obviously very simple. It will simply put up the cost of production using the formulae available, worked out with great trouble by the Department of Agriculture and by the Canadian Federation of Agriculture. They will relate that initial price and announce it a month in advance of the planting season so that the farmer can consider his various choices. He will know the floor price, or at least the initial price, so that he will know what his costs will be if he produces a certain crop or how close he is to his cost of production. If he can see that he will make some money out of it, he will probably grow the crop. But if he sees that he can make even more money from another grain, he will go the other route. This will simply help the farmer to plan. It will not cause the treasury of Canada to bear any cost. If the Wheat Board sets the initial price too high, there will be a smaller final payment, the farmer will simply take the money ahead of time, and then he will pay it back. He will have to pay the interest. Therefore, the farmer will take all the econmic risks. All we are asking is to please give the grain farmer equal treatment with other types of farmers under the Agricultural Prices Stabilization Act.
I think I have made a fair representation as to what the hon. member for Wetaskiwin wants done under this motion. I would like to add a few thoughts of my own. I was involved with the setting up of the Agricultural Prices Stabilization Act and I praised it many times in the House. On every occasion, I tried to help improve it. But I still think there is much to be done based on the type of proposal made by the hon. member for Wetaskiwin concerning the grain department. We should apply some of his background knowledge on the figures to other products covered by the Agricultural Prices Stabilization Act. I am referring to fundamental products like potatoes, beef, fruits and vegetables. I know much work is being done under the Agricultural Prices Stabilization Act, and the formula is constantly being changed, but I do think additional work could be done such as that being done in the Canadian Federation of Agriculture and the Department of Agriculture with respect to grain. This deep study of the figures should be applied to arrive at a fair floor price, not only for producers of grain which come under the Wheat Board Act, but also for all farmers and all of these key products.


The Acting Speaker (Mr. Blaker):: Order, please. I am sorry to advise the hon. member that his time expired at 4.33. Perhaps he might want to seek the unanimous consent of the House to complete his remarks. Is there unanimous consent?


Some hon. Members:: Agreed.


Francis Alvin George Hamilton: For many years Canada has fought for international commodity agree-
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* >
r
ments. This is particularly important concerning food products which are increasing in volume in international trade. 1 hope that hon. members in all parties who may read this speech will keep up the fight. I made a major speech on this subject in 1964. 1 have attended United Nations meetings. I have attended international parliamentary meetings in Australia and Senegal. 1 have worked with great care on the presentations of all nations at the United Nations conferences on trade and development. All parties in this House supported this stand. But what I am really saying here is that 1 hope that even though we are trying to help our producers to stabilize their incomes and prices in our country, we still work toward an international framework to stabilize those prices, not to set the prices, but to determine the rule of law for the competition between those floors and ceilings.
Canada led the world with the international meat agreement in 1949, which was destroyed in 1966-67, with the United States, Canada and Australia. Now we must get back on the road together. I know that Members of Parliament from all parties have met with their counterparts in the United States. Some have spoken to Members of Parliament in Australia. There is no parliament left in Argentina, but we are in contact. We know that the Argentinians sent their representatives here to Ottawa on April 24 and 25. So did Australia, Canada, the United States and the Europeans. The motion for the restoration of international agreement has been placed. But we in Canada who have led the way for the world in international commodity agreements should continue to lead the way. If it is very important in relation to food for world security and stability, it is also equally important in relation to the other resources, such as the forestry resources and particularly this very valuable mining resource of ours.
I want to thank the House for letting me make these comments of my own. In addition to what the hon. member for Wetaskiwin said in his attempt to bring just a little common sense to this announcement date, not only on the timing one month in advance but also on the cost of production, I would like to say that we also have some responsibilities, wherever we are, to keep up this pressure so that the producers of the world unite together, sit down with the consumers and work out a rule of law, because these products must be stabilized or either the producer or the consumer will be destroyed. There should be a rule of law placed on these variable prices. Nature cannot be controlled, but we can control, to a reasonable degree, the stability of prices in world trade.
1 simply wanted to ask the hon. member who spoke for the government today to please say to the minister in the other place who is responsible, "Do not just sit there. Do something. All you must do is to put a reference before the committee, and if you can move this one step further it would help us all and we could get this very simple motion off the books."


Mr. Gilbert Parent (Welland):: Mr. Speaker-


Some hon. Members:: Hear, hear!


Gilbert Parent: I thank the members for the thunderous applause they afforded me this afternoon.
It is always good for me to enter into a debate with the distinguished Member of Parliament for Qu'Appelle-Moose Mountain (Mr. Hamilton). Earlier on, when Mr. Diefenbaker was prime minister, he was the minister of agriculture. I regret that the hon. member for Wetaskiwin (Mr. Schellenberger) is not able to be with us today. It may seem strange to some members that I would be intervening in this particular debate. There are some reasons why I have come forward. I represent a riding which is a twin of the Wetaskiwin riding. I have had voluminous correspondence with constituents of that riding, as well as with many friends I met there over the last three years. I believe that the problems that are being faced in Wetaskiwin are problems that are being faced throughout the west, in the grain-growing provinces.
The objective of this motion is quite reasonable and I have no quarrel whatsoever with it. It must be pointed out, however, in asking for the type of protection considered here, that there already is a great deal of protection in place for the producer. 1 have used the term "protection", which is the word the member for Wetaskiwin used in his motion. Canadian producers, Mr. Speaker, must be protected, and they want protection. They have at their disposal a number of policies and instruments which enable them to continue producing without introducing the additional regulation and intervention which cost of production, full price, would entail.
First and foremost in the form of protection is the Canadian Wheat Board. Its mandate is to market grains on the producers' behalf at the best possible return. Who could argue with anything as straightforward as that? The board continues to do an excellent job. The Canadian producer obtains returns on the world marketplace which compare favourably with other exporting countries.
At the end of the month of April, Senator Hazen Argue, who sits in the other place and who is the Minister responsible for the Canadian Wheat Board, tabled the board's 1980-81 report. It says that the sale value of last year's crop was a record $5.6 billion. The value of the grain delivered in the
1980-81 crop topped the previous record of about $3.9 billion, set a year earlier. These kinds of returns are vital to prairie producers, facing ever-increasing farm input costs, with high interest rates. The board is just the agency to ensure the highest returns possible in the world markets.
The farmers were able to deliver all the grain they wanted and farm carryovers were lower than for many years, at the end of the crop year, this, Mr. Speaker, in spite of drought conditions early in the crop year. The report said that the 1980 crop year was better than the ten-year average and grain exports at 23.5 million tonnes were just a shade under the record of the previous year.
Senator Argue said, according to the Release of May 28, 1982, that there are no guarantees in the grain business, what with the fickle weather and changing economic conditions, and shifting trading patterns, but it is still the brightest light in the economy right now. It was noted that we were able to establish



June 18, 1982

the initial prices for the 1982-83 crop year at last year's levels. That should encourage farmers to produce all they can to meet the growing world demand for grain. I have no doubt that the market is there for all the grain farmers can grow. I am hopeful that prices will improve enough before long to ensure the farmers' returns keep up with the rising costs.
This House of Commons, Mr. Speaker, went on record a few weeks ago, as agreeing unanimously that the Wheat Board is doing a good job. The proof of that is than when the member from St. Boniface (Mr. Bockstael) brought forth a motion, he got unanimous consent to it, congratulating all groups in the grain industry for having surpassed the all-time export record with still seven weeks to go in the crop year. I submit to you, Mr. Speaker, that the system does indeed work.
The third point 1 would like to make, Mr. Speaker, is that a related institution, the Canadian International Grains Institute, assists in the promotion and marketing of Canadian grains by providing a range of ongoing educational programs. This is to me a rather interesting point, Mr. Speaker, because my profession before coming into politics was in education. As a teacher, as one who works in this field, I believe that education is an ongoing matter for all people in our society- understood and included, the farmers of Canada.
The federal government has also established the Western Grains Stabilization Program. It protects producers against periods when there are downward signs in the market and when their income drops significantly in relation to historical levels. How is it done? As the hon. member from Qu'Appelle-Moose Mountain pointed out, it is done by taking a sliding average of farmers' income. I stand to be corrected by the hon. member, but my information is that it was over the previous five years and not over the previous three years. If this is not the case, I hope the hon. member will correct the record at the end of my intervention. How does it work? If in the current year the revenue income drops, then the stabilization mechanism is triggered.
This program is cost-shared by the government and the producers. The government puts in 4 per cent of the eligible receipts and the producer puts in 2 per cent, subject to a $900 maximum for each producer. You might ask yourself, Mr. Speaker, as well as might all other members of this House, how much the farmers, the producers, benefited from this since its inception. The fact is that this fund has paid out some $370 million to our farmers, our producers, since its inception. This is a scheme, Mr. Speaker, which the farmer contributes to in the good years and benefits from in the less good years.
To deal with temporary cash flow problems, Mr. Speaker, there is the Prairie Grain Advance Payments Act. Under it, producers can take out an advance payment on farm-stored grain until there is an opportunity to deliver it. For wheat used for domestic human consumption, producers have the protection of the domestic wheat price policy. Under this policy, producers are guaranteed a minimum price of $5 a bushel on all wheat used for domestic human consumption, even if export prices fall below this level.
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What do we mean by human consumption? We mean that the grains are used, for example, in the making of such everyday things are bread, pasta, all biscuits and cookie manufactures. Again I am involved there, because in my riding there are manufacturers of these commodities. It is very important to them that they get the type of grain that they need to produce and manufacture wholesome foods for the people of Canada.
It was said earlier, Mr. Speaker, that our transportation system is involved in this matter. Major improvements have been made in the Canadian grain handling and transportation system in recent years. There is the provision of new hopper cars. I will put more detailed information on the record. There is also branch line rehabilitation. The process of upgrading our system will continue as we move increasing volumes of grain for export.
As I mentioned, while this point is not directly related to the farmer in respect of farm costs, obviously it is important to the farmer to have an excellent-not a good, but an excellent-transportation system to move his products to market. That is why the Minister of Transport (Mr. Pepin) has been putting so much effort into this particular area.
To be specific, with regard to hopper cars, the federal government-the government of this day-has already bought or leased some 10,000 hopper cars. Recently the minister announced in this House the purchase of another 1,280, which will provide jobs in my area around Hamilton, Ontario, in Sorel, Quebec and also Trenton, Nova Scotia.
With regard to branch line rehabilitation, originally this was to have been a ten-year program with a $700 million budget. This started in 1977. Just recently the Minister of Transport arranged to index the annual spending on this program so that yearly amounts will not be eroded by inflation. What this means is that if there is $70 million in a given year and inflation increases 10 per cent, then in the next year there will be $77 million, and we will be able to buy the same number of hopper cars and do the same amount of work. In that way there will not be any penalty involved.
Under these programs as well as the recent initiative of the Minister of Transport, $3.2 billion will be invested in grain transportation alone over the next four years. That investment is to take place-1 would say 95 per cent-in the west.
The government already guarantees initial payments for wheat, oats and barley marketed by the Canadian Wheat Board. These are floor prices which are guaranteed by the government. They are market-oriented and provide the producer with a significant degree of security. This in itself, I submit, guarantees the producer at least the minimum price.
We have had ongoing discussions with many countries. The hon. member for Qu'Appelle-Moose Mountain has mentioned that he has taken part in many trade delegations. He has been to the United Nations, as have many members of my party. I think the hon. member will agree with me that one of our closest partners in the marketing of grain throughout the world

June 18, 1982
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is the United States. There was a meeting held in late May between Senator Elazen Argue, the minister responsible for the Canadian Wheat Board, and the U.S. Secretary of Agriculture, Mr. John Block. At that meeting they discussed the general grain situation and opportunities for closer co-operation among exporters. This was done so that we could work together and see to it that whatever bugs there were in the system would be worked out so that we would have maximum benefit for the farmers and maximum use of our transportation system. In that way we would get a maximum return for the people of Canada.
Following the meeting, Senator Argue indicated that efforts will be made to arrange a meeting of ministers from all grain exporting nations in the fall. We are looking to the future. We are going to try to anticipate whatever problems will be coming up, and this meeting will be held in the fall. At the meeting to which I have referred, we are told, there was an exchange about the possibility-perhaps even the probability-of a meeting at the ministerial level to discuss the grain situation, particularly if grain stocks build up this season. We are told that the American delegation responded very favourably.
In discussing the marketing systems of the two countries the Americans referred to their efforts to stabilize world grain markets through their loan rates and grain reserves program as well as to encourage U.S. farmers to reduce their seeded acreage. However, there was no request for Canadian acreage controls or cutbacks. Our farmers in the west are encouraged to grow virtually all they can.
In my opinion the Americans have a good understanding of Canadian policies in the grain business, and I think it is incumbent upon this government to make sure the Americans are kept abreast of things we are doing in this country so that they know what our specific intentions are.
Canada supports efforts to improve world prices for producers, but the U.S. and Canadian systems are very different, and we contribute through careful management of our export system. Our objective is to maintain a reasonable level of production, of which our farmers are capable, and to have in place a transportation system that is efficient and will take our grain to market. We expect the export trade in grain to continue to grow, and we expect to share in this expansion.
How am I directly involved in this? It should be pointed out that virtually all of the Welland Canal is situated in my riding, and a great deal of the grain which is shipped from the western provinces comes through the Lakehead, down through the Great Lakes, through the Welland Canal and out through the St. Lawrence Seaway. I submit that we in my area of the Niagara Peninsula-Welland specifically-are benefiting a great deal from the grain sales which are going on and the grain exports we make to other countries.
There are rumours that the U.S. government might subsidize American grain exports to make their grain more competitive on world markets because the Americans are concerned about the European Economic Community export subsidies-and so are we-but nothing said during the course
of that meeting would suggest that the Americans are making threats to anyone about entering into a program of subsidization of the export of American grains.
In wrapping up, I would like to say to the hon. member for Qu'Appelle-Moose Mountain and the hon. member for Wetas-kiwin that what is asked for here is reasonable, in terms of discussion. It is reasonable that these points be raised in committee, but it is also very important that the people of Canada know that we do have a great deal of protection in place now to help our farmers. As has been mentioned, this protection has been provided over a period of some 47 years, and it will continue in the years ahead. We hope our grain producing provinces will produce more grain. We hope they will be able to sell more. We hope our exports will increase and that that will help our balance of payments.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, I would like to remind the House of the motion we are debating this afternoon. It was placed before the House on June 27, 1980, by the hon. member for Wetaskiwin (Mr. Schellenberg-er). It says:
That, in the opinion of this House, the government should consider the advisability of setting floor prices related to costs of production for cereal and oilseed crops one month before planting in order that farmers may be provided adequate returns to ensure sufficient production to meet Canada's domestic and export needs.
1 think it is important that we reread the motion. We have had some discussions about Wheat Board operations, and while I agree with the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) about his personal opinion that oilseeds should be under the Wheat Board, that is not the position of the Conservative Party nor, 1 think, that of the hon. member for Wetaskiwin. What they are talking about seems to be something quite different.
However, this is something which should be referred to a committee of this House for further clarification and discussion, because the concept of cost of production grows in importance during periods of inflation. Agriculture, and in particular farmers who are producing grain, feel a doublewhammy effect from the inflation cycle at this moment in time. Two factors are impacting on production costs. Agriculture, like the rest of the economy, has to put up with high interest rates. We also are experiencing violent and sudden increases in the cost of energy. The impact of these energy costs is doubled and tripled in agriculture as they work into fertilizer costs. Most of the seed stock for the production of nitrogen-based fertilizer comes from natural gas. As those prices are followed to increase or are legislated upwards according to agreements between the federal and provincial producing provinces, the price of natural gas, and therefore the price of fertilizer, increases.
In addition to the regular cost of energy for tractors and for heating farm buildings, farmers experience this secondary effect in the price of fertilizer.
June 18, 1982

The third effect hits them in the price of herbicides and pesticides, the bulk of which come from the petrochemical industry. As the price of petrochemicals goes up, so does the price of herbicides and pesticides. Consequently, production costs of Canadian grain farms have far outstripped costs experienced by other people in the country. Instead of a 10 per cent to 12 per cent inflation rate, agriculture has been facing a 15 to 20 per cent inflation rate in the last couple of years.
The hon. member for Welland (Mr. Parent) and the hon. member for Qu'Appelle-Moose Mountain correctly pointed out that some attempts have been made to look into the question of stabilization but they did not point out that the formulae used for triggering a payout under the old legislation are based on a percentage of the three or five previous years. They are not at all useful to the farmer who is faced with a 15 per cent or 20 per cent annual increase. The average of the five previous years' production comes to about half the actual cost of production today.
Any legislation that will deal with the stabilization programs will have to deal directly with today's production costs, or at least the production cost of the previous year. There are two reasons for this. The first is the whole question of fairness. It is the only fair way to handle the situation in times of inflation, and second, we are aware that we could be faced with deflation. We are hovering on the edge of a massive depression in the world's economy, and this could trigger enormous price declines. In those situations the old kinds of stabilization programs could be unfair to the extent that they would pay more than production costs with the formulae which are in existence. In a period of sudden depression or sudden deflation, payments would be considerably larger than actual costs if prices go down and could drain the treasuries of countries in an unexpected way. The fairest way, both for the farmer and for the taxpayer, is to move to a more direct, more immediate cost of production formula.
The question, then, is what kind of cost of production formula would be used. It is not as difficult to work that out as is sometimes believed. There are basic points that almost everyone can agree upon. From a review of proposals that have been placed before us we can get some ideas of what participants in negotiations mean by a cost of production formula. Does it mean all costs? Or does it mean that the farmer will be paid a wage comparable to that of the average factory worker, plus a return on his investment comparable to what other investors receive? Does it mean he will get all his cash costs? I think everyone agrees that he would get all his cash costs, but none of the programs in place now pay much attention to the cost of his labour and his investment costs.
One philosophy of the cost of production is to move to a parity concept. We picked that one up in the United States,
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and it has been around ever since I can remember and probably for a good many years before that. That concept began with a base rate in the period 1914-17; it was then changed to the 1930 period, then it was switched to 1951. At no time was there ever complete parity, except during one war when there was an attempt to increase production. Usually a percentage of parity was used. I think the parity principle works into the concept of cost of production. In this country the two are almost interchangeable.
Some marketing boards, such as the Canadian Dairy Commission and the Canadian Egg Marketing Agency, have worked out cost of production formulae that provide a wage, although it is not equivalent to the average factory wage. They also provide some return for the farmer's investment. Usually it is assumed that the equipment the farmer uses is seven years old and that it has been depreciated. Basically they are talking about 50 per cent or 55 per cent of the farmer's investment going into the price of the commodity.
There are other kinds of costs of production formulae outside agriculture, and I only mention them for comparison. There is the cost of production formula worked out by Snavely who determined the cost of production of railways for the Government of Canada. That is a very healthy kind of cost of production formula and one that most farm groups would certainly accept if it were applied to them. They object somewhat to its application to railways, and I think with good reason. That formula provides that the return on the investment should be 25 per cent and that not only should the railway be guaranteed 25 per cent on its total investment but it should be guaranteed 25 per cent on the money that the people of Canada provided, gratis, as part of that investment. In contrast, farmers are receiving about four per cent return on their investment. The question then becomes whether the production of goods is as important as the transportation of goods. It only makes economic sense to come down on the side of the producer. Without basic production there would be no economy left. Using the Snavely formula, the average wheat farmer in Saskatchewan would be paid $12.94 per bushel of wheat. Even the most grasping farm leader in the country would say that was more than the production cost. That is not the case from the railways point of view; they are quite willing to accept that kind of analysis. I think once we have discussed production costs, we have to also be cognizant of the fact that we can probably extract full production costs, or very close to it, for those goods produced for vital consumption within our economy. But we must remember the reality of the situation in the grain business is that about 80 per cent of the production is sold outside of the country.

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The Acting Speaker (Mr. Blaker):: I am sorry to interrupt the hon. member but the hour provided for the consideration of private members' business has now expired. Accordingly, this
House stands adjourned until Monday, June 21, at two o'clock pursuant to Standing Order 2(1).
At 5.12 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, June 21, 1982