1982-07-23

ROUTINE PROCEEDINGS


Mr. Albert Cooper (Peace River):: Madam Speaker, small businesses across Canada are being forced into bankruptcy because of high interest rates. I therefore move, seconded by the hon. member for Erie (Mr. Fretz):
That the government immediately introduce one part of its budget puffery, that is the plan that will allow a 4 per cent reduction in interest rates for our small businesses.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Mel Gass (Malpeque):: Madam Speaker, 1 too rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. On Monday, July 19, the Minister of Agriculture (Mr. Whelan) announced an increase in the inspection charge for potato table stock exports from $6 a carload to eight cents per hundredweight, an increase of
1.200	per cent. Then on Tuesday, July 20, the President of the Treasury Board (Mr. Johnston) announced that the price restraint in the federal public sector will apply to all prices established under federal jurisdiction. Any increase higher than the 6 per cent ceiling which was not implemented before June 28 will be rolled back. Therefore I move, seconded by the hon. member for Erie (Mr. Fretz):
That this House demands that the President of the Treasury Board review this
1.200	per cent increase and apply the 6 per cent limit that is now government policy.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


MEDICAL CARE
Mr. Bob Ogle (Saskatoon East):: Madam Speaker, 1 rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Twenty years ago today, July 23, 1962, the Saskatoon Agreement was signed between the Saskatchewan NDP government represented by the late Premier W. C. Lloyd, by Bill Davies, then minister of health, by Allan Blakeney, chief negotiator, and the College of Physicians and Surgeons of Saskatchewan represented by Dr. H. Dalgleish. With this agreement the First universal prepaid compulsory medicare program came into existence in North America.
Today, as the principles of medicare are under attack from many directions, I move, seconded by the hon. member for Regina West (Mr. Benjamin):
That this House dedicate itself in a new and firm resolution to protect this great social institution and pay tribute to Tommy Douglas, father of medicare, Lord Taylor, arbitrator of the dispute in 1962, and Bob Von Pilis who personally showed me and others the value of the long haul.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


BANKS AND BANKING
Mr. Don Blenkarn (Mississauga South):: Madam Speaker, the Bank of Canada rate drop of 57 basis points yesterday was measly. Over the past three weeks interest rates in the United States have dropped a full 3 per cent while interest rates in Canada have dropped barely one per cent. Our interest rates are now over 4 per cent above American rates. I therefore move, seconded by the hon. member for Annapolis Valley-Hants (Mr. Nowlan):

July 23, 1982
That this House direct the Bank of Canada to cease interfering in the money markets and allow our interest rates to fall in accordance with American interest rates so our businesses can enjoy the same interest costs as competing American businesses.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
[DOT] (mo)


ATTENDANCE OF MINISTERS DURING QUESTION PERIOD-MOTION UNDER S O. 43
Mr. Girve Fretz (Erie):: Madam Speaker, it is noted that the Prime Minister (Mr. Trudeau) and the Minister of Finance (Mr. MacEachen) have met at least three times with the heavyweights from business and labour at the same time as question period was being conducted in the House. We recognize that these meetings are important, but it is the scheduling that we question. Given that there is quite frequently a lack of presence of ministers and of the Prime Minister in the House during question period, as evidenced here today, I move, seconded by the hon. member for Peace River (Mr. Cooper):
That meetings with business and labour leaders be held before a budget is brought in and, second, that those meetings not be held during question period as it is the time when backbenchers ask important questions of the Prime Minister and cabinet ministers, on behalf of their constituents.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PETRO-CANADA INVESTMENT ABROAD-MOTION UNDER S O. 43
Mr. Scott Fennell (Ontario):: Madam Speaker, in view of the fact that Petro-Canada is providing funds for speculation in a foreign country with no guarantee of returns, when the economic situation in this country is in such dire straits, 1 move, seconded by the hon. member for Peace River (Mr. Cooper):
That the government be condemned for allowing this type of expenditure by a Crown corporation when there are presently 1.5 million Canadians unemployed.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ECONOMY
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, I, too, rise under the provisions of Standing Order 43. Since the Minister of Finance (Mr. MacEachen) has instituted a blue ribbon committee, a stable of $500,000 a year corporate executives from Bell, CPR and Power Corporation, to help force down wage increases, I move, seconded by the hon. member for Brant (Mr. Blackburn):
That this House demand the establishment of a parallel committee composed of the victims of Liberal economic policies, to include an unemployed steel worker from Cape Breton who cannot keep up with his mortgage payments, a bankrupt businessman from Saskatchewan, a retired public servant from Alberta, a dispossessed dirt farmer from Ontario, a logger from B.C. whose unemployment insurance has run out, plus a delegate from the 100,000 manufacturing workers whose jobs have disappeared forever in the last six months in the province of Quebec, and that this committee be charged with the responsibility of telling the PM what it is really like out there, and be henceforth and forever more known as Canada's black and blue ribbon committee.


Some hon. Members:: Oh, oh!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC SECTOR COMPENSATION RESTRAINT ACT
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, I also rise under the provisions of Standing Order 43. In view of the fact that no more witnesses will be permitted to speak to Bill C-124 before the Miscellaneous Estimates Committee, effectively muzzling special interest groups, such as women's groups, which will suffer dramatically as a result of the bill, I move seconded by the hon. member for Beaches (Mr. Young):
That the government be condemned for making a mockery of the democratic process to which Canadian citizens are entitled and for railroading regressive legislation which directly impinges on the basic rights of workers.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
July 23, 1982


ENVIRONMENTAL AFFAIRS
Mr. Neil Young (Beaches):: Madam Speaker, I move, seconded by the hon. member for Skeena (Mr. Fulton):
That the Minister of the Environment be instructed by this House to table immediately all of the report he received some two weeks ago from the U.S. Environmental Protection Agency, which recommended the repopulation of the Love Canada chemical dump site, which would have grave consequences for the Niagara River and Lake Ontario, and that he be censured for hiding this serious document from the eyes of Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NEW WATER MILL TECHNOLOGY-MOTION UNDER S.O. 43
Mr. Jim Fulton (Skeena):: Madam Speaker, I, too, rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that a new water-mill technology has been produced by a small firm in Dartmouth, Nova Scotia, called Nova Energy Limited, under contracts managed by the National Research Council, and whereas this technology, known as the vertical axis water turbine, eliminates the need for dams to produce hydroelectric power, and since the construction of dams has ruined entire river systems, caused the extermination of migratory fish species, changed the weather, and flooded good farm and forest lands, I move, seconded by the hon. member for Mission-Port Moody (Mr. Rose):
That this House express its unanimous support for the National Research Council and Nova Energy Limited in this environmental, economic and energy breakthrough, which could well make Canada a world leader in water-mill technology.
I am sure the Minister of Energy, Mines and Resources (Mr. Lalonde) would like to support this motion as well.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
Oral Questions



ORAL QUESTION PERIOD


Mr. Pat Nowlan (Annapolis Valley-Hants):: Madam Speaker, I was told that both the Prime Minister and the Minister of Industry, Trade and Commerce were to be here today. In their absence, unfortunately, I will have to direct my question to the Acting Prime Minister. My question is a serious one. Has the government decided to aid Maislin Trucking? If so, is that assistance to be direct assistance, a loan guarantee, or a letter of comfort?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, I am thankful to the hon. member for his reference to an "unfortunate" situation. I am on the committee that is dealing with the Maislin case. No decision has yet been made.


REASONS FOR CONSIDERING ASSISTANCE
John Patrick (Pat) Nowlan: Madam Speaker, my supplementary question is also directed to the Acting Prime Minister. The government is preaching restraint and wants Canadians to go on a crusade of frugality. Can the minister give a short, simple explanation of why any consideration is being given to the Maislin situation, in view of the fact that there are a multitude of service industries across the country that are in dire straits? What incentive is there for them and their managers to try to be efficient and stay above water when it appears the government's criteria are going to be inefficiency and bankruptcy?


Jean-Luc Pepin: Madam Speaker, I already mentioned that the interest of the government in helping Maislin would be essentially the maintenance of employment in Quebec in particular, and the maintenance of a service between Canada and the United States which, in my view, is rather important in terms of the economic relationship between the two countries. Again, no decisions have yet been made. When a decision is made, favourable or unfavourable, a full explanation will be provided.


INQUIRY RESPECTING POLITICAL PRESSURE
John Patrick (Pat) Nowlan: Madam Speaker, will the Acting Prime Minister, in his sometimes frank way, please come clean with the House of Commons and the people of Canada and admit that the real reason consideration is being given for this perversion of the I LAP program is political pressure from his political friends?


Jean-Luc Pepin: Madam Speaker, a number of companies in Canada-I will not list

July 23, 1982
Oral Questions
them-have been helped by the Government of Canada in recent months.


John Patrick (Pat) Nowlan: Services industries?


Jean-Luc Pepin: In all sectors. Therefore I do not see why my friend should conclude, before the decision is made, that it was motivated by unacceptable considerations.


AVIATION INDUSTRY
Hon. Jake Epp (Provencher):: Madam Speaker, I wanted to direct my questions to the Prime Minister or the Minister of Industry, Trade and Commerce. In their absence I will direct them to the Acting Prime Minister. Winnipeg and the province of Manitoba have a long history of being involved in the aerospace industry. Despite the personal and corporate actions and decisions to build that industry, in the past Liberal government decisions have in fact seriously jeopardized those developments. I would ask the Acting Prime Minister, with regard to the government's involvement to the extent of $500 million in the Airbus, whether it is offering similar arrangements to Boeing in view of the fact that components for the Boeing 757 and 767 were to be made in Winnipeg as well.


Jean-Luc Pepin: Madam Speaker, the negotiations between Canada and Airbus Industrie do not mean that Canada is going to isolate itself from other negotiations with United States firms. This negotiation is part of a reassessment of Canada's position in the international air industry which is now going on. My hon. friend should not conclude that we are going to isolate ourselves from the advantages or relationships with the American aircraft industry.
With regard to Winnipeg, I think the record of the government is pretty good. A number of months ago Air Canada, for one, established a major computer facility in Winnipeg. That indicates the recognition of the government that Winnipeg is an important centre in the air industry.


Arthur Jacob (Jake) Epp: Madam Speaker, I say to the Prime Minister, who has entered the Chamber, that every time Winnipeg has been promised a number of jobs, the number of jobs we have received has always been smaller than the number the government promised.


EFFECT OF AIRBUS TRANSPORTATION ON JOBS IN WINNIPEG
Arthur Jacob (Jake) Epp: Madam Speaker, I would like to ask the Prime Minister whether the involvement with Airbus will in any way jeopardize jobs at Boeing in Winnipeg,
where there are two plants. We have already lost 250 jobs. If the government gets involved in the Airbus deal, will the government ensure that the deal in no way will jeopardize jobs in the aerospace industry in Winnipeg?


Jean-Luc Pepin: Madam Speaker, the objective is indeed to create more jobs. The announcement by the Minister of Industry, Trade and Commerce in relation to the Airbus negotiations underlined the importance this deal has for the growth of the air industry in the province of Quebec. However, that again is not exclusive. I have indicated one of the things which has been done in Winnipeg by Air Canada in very recent times. The region of Winnipeg will be entitled to bid on all the contracts Canada has with the United States on the military side, for example, in this particular industry, so there is no thought of depriving Winnipeg of its advantages in terms of its capacity to produce in the air industry.


LABOUR CONDITIONS
Mr. Ted Miller (Nanaimo-AIberni):: Madam Speaker, my question is directed to the Prime Minister. A year ago there were 855,000 unemployed Canadians. Today there are over 1.3 million unemployed Canadians, attesting to the sacrifices the working people of Canada have made to the economic policies of this Liberal government. In view of the number of workers who will be on welfare over the next few months and years, is it government policy to lay the blame for economic policy failure on the workers of Canada?
In addition, is the Prime Minister deliberately transferring some of the responsibility of the federal government to the municipalities and provinces, which will have to make welfare payments to the 300,000 to 500,000 who will be on welfare over the next year?


Right Hon. P. E. Trudeau (Prime Minister):: On the
contrary, Madam Speaker. The Minister of Employment and Immigration has been negotiating with the provinces, and even the municipalities concerned, with respect to using some of the job-creation funds provided by the budget to create jobs for these people so that they do not have to go on welfare. The whole purpose of this budgetary measure has been to create jobs to keep people off the welfare rolls.


Edward Allan Miller: Madam Speaker, there have been many announcements of job-creation programs. There has been speculation that hundreds of thousands of jobs would be created, but in our ridings we have not seen the fruition of those economic policies of the government.
July 23, 1982


EMPLOYMENT
Edward Allan Miller: Madam Speker, I would like to ask the Prime Minister a supplementary question. In April, 60,000 more people in Quebec went on welfare, bringing the total in that province alone to over 300,000. I would like the Prime Minister to outline specifically how many jobs have been created in Quebec as a result of the job-creation policies of the Minister of Employment and Immigration. I would like the Prime Minister to indicate whether any of those job-creation programs are working.


Pierre Elliott Trudeau: Madam Speaker, the hon. member is asking a statistical question when he asks how many jobs have been created. I would be happy to answer that on the order paper, but surely I do not have to recite in this House figures relating to the great many projects the federal government has facilitated in Quebec. A very recent example was the allocation of a contract to a Quebec company, Bombardier, for the building of subway cars for New York City. That will create thousands of jobs. That was brought about solely by the activities of the Minister of State for International Trade in that area.


Some hon. Members:: Hear, hear!


UNEMPLOYMENT INSURANCE
Edward Allan Miller: Madam Speaker, I would like to give the Prime Minister some statistics from my riding. I think many hon. members could do the same with respect to theirs. Ten thousand people in my riding are out of work. A job-creation program called the employment bridging assistance program for forestry workers was promised. We were promised 10,000 jobs in the province of British Columbia. To date in my riding 34 jobs have been created for 10,000 unemployed workers.
Are the Prime Minister and the government prepared to change their economic policies in order to put people back to the meaningful, productive work that is needed in Canada? Failing that, would the Prime Minister consider the 700 people in Port Alberni alone who, in the next two months, are going to be out of unemployment insurance benefits and will have to go on welfare? Will he consider extending UIC benefits for the workers who, up until now, have sacrificed their jobs, and in some cases their homes?


Mr. Remi Bujold (Parliamentary Secretary to Minister of Employment and Immigration):: Madam Speaker, the case referred to by the hon. member is a matter of concern to the
Oral Questions
Department of Employment and Immigration, and as for the agreement with British Columbia, the hon. member must be aware that an agreement has been signed with that province and that we have now reached the stage where we can start hiring workers. In fact, in the next few weeks we hope to be able to hire about 400 workers.
The Department of Employment and Immigration is, of course, looking into this situation where people are terminating their unemployment insurance benefits. The minister is aware of all aspects of the situation and hopes that the various job-creation programs announced in the June budget which will provide employment for workers terminating their unemployment insurance benefits, will remedy the situation.


PRESENCE IN GALLERY OF PARLIAMENTARY DELEGATION FROM THE REPUBLIC OF KOREA
Madam Speaker:: I should like to draw the attention of the House to the presence in our gallery of a parliamentary delegation from the National Assembly of the Republic of Korea, which is led by the Hon. Lee Jong Chan.


Some hon. Members:: Hear, hear!


AIRPORTS
Hon. John A. Fraser (Vancouver South):: Madam Speaker, I have a question for the Minister of Transport. Has he yet received from his officials any explanation for the several hour stoppage of vfr light traffic at Vancouver airport on July 1? This included light planes, helicopters and seaplanes. All traffic was stopped. Has the minister received a report on that incident?


Jean-Luc Pepin: Not yet, Madam Speaker.


John Allen Fraser: I am sorry, Madam Speaker. I did not hear whether the minister said yes or no.


Jean-Luc Pepin: I said not yet.


REQUEST INQUIRY BE HELD INTO REASONS FOR STOPPAGE
John Allen Fraser: I have a further question for the Minister of Transport, Madam Speaker. The current information in the Vancouver area is to the effect that this happened because air traffic controllers were not available for duty because the Department of Transport refused to pay overtime. I would ask the minister to check into this. Would he

July 23, 1982
Oral Questions
also be prepared to tell the House within the next few days whether this incident has been repeated, and if there are difficulties with respect to payments which could cause severe difficulties in the airport area?


Jean-Luc Pepin: Madam Speaker, it indicates how well controlled the department is, that it does not have the money to spend in a casual fashion on overtime. My department is very tightly held at this time. I understand however-


An hon. Member:: What about the Airbus?


Jean-Luc Pepin: It is an indication that there is control on government expenditures.


An hon. Member:: What about the Airbus?


Jean-Luc Pepin: My friends on the other side ask for greater control on government expenditures every day, and they should be delighted to witness a demonstration of that fact. Be that as it may, as a general proposition-and I am not familiar with the Vancouver situation-money has been found for overtime and the events which took place in Vancouver should not be repeated.


BANKS AND BANKING
Hon. Marcel Lambert (Edmonton West):: Madam Speaker, my question is directed to the Minister of State for Finance responsible for financial institutions. He will recall that less than two years ago, when the finance committee was discussing the Bank Act, he talked a great deal about a new trust companies act that was just down the road. Despite a number of inquiries in the interval we have not seen a line with regard to the trust company proposals. I think it is high time that the minister offered a reply in that connection. What are the plans with regard to the trust companies? Are they still going to be in the limbo of never-never?


Hon. Pierre Bussieres (Minister of State (Finance)):: Madam Speaker, I wish to thank the hon. member for his question. Many people with an interest in the trust company sector share the hon. member's concern and would also like to know what action the government intends to take with respect to revising the statutes governing these financial institutions.
I am happy to inform the hon. member that within the next few days, I shall be making public three documents, including draft legislation, a working paper that will define the concepts underlying the draft legislation, and finally, a short summary of the first two documents, the purpose being to give the
parties concerned a chance to discuss these documents between now and this fall, and to enable the government to hear their views before making a final decision on its policy for revising the legislation in question.


REQUEST FOR TABLING OF DOCUMENTS
Marcel Joseph Aimé Lambert: Madam Speaker, I have a supplementary. Does the minister intend to lay these documents on the table of the House before the end of the month and before the summer recess , if we finish our work before the end of the month, and will we be receiving these documents or are they going to be distributed more or less at random?


Pierre Bussières: Madam Speaker, I hope the House will be sitting for a few days yet so that I will have an opportunity to table these documents in the House.


CANADA NON-PROFIT CORPORATIONS ACT REQUEST THAT LEGISLATION BE RE DRAFTED
Albert Glen Cooper: Madam Speaker, my question is for the Minister of Consumer and Corporate Affairs, and relates to Bill C-10. The minister will know that with the removal of Clauses 114 through 116 of the bill, all we have managed to do is end up making a mess. Therefore, will he consider withdrawing and redrafting this legislation, taking into account the concerns of churches and other religious organizations?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Madam Speaker, if the hon. gentleman had allowed the bill to go to committee instead of filibustering it the last time it was before the House-


Some hon. Members:: Oh, oh!


André Ouellet: -indeed, appropriate amendments could have been entertained in committee to clarify the situation and allow the churches to be heard.


Mr. Clark:: That is a falsehood.


Arthur Jacob (Jake) Epp: You are about as low as they come.


André Ouellet: Unfortunately, the hon. member took a course which prevented us from presenting appropriate amendments.


Albert Glen Cooper: Madam Speaker, 1 am sure the minister knows that one speaker hardly constitutes a filibuster, and I happened to be the first one.


Some hon. Members:: Hear, hear!
July 23, 1982

Oral Questions


MINISTER'S POSITION
Albert Glen Cooper: Madam Speaker, the minister knows he has already made commitments to universities to change the bill, and he has made commitments to change the bill concerning membership lists. Why will he not do the same thing for churches and religious organizations?
Hon. Andre Ouellet (Minister of Consumer and Corporate
Affairs): Madam Speaker, 1 already undertook to make changes when this bill is before the committee. If the hon. member wants to help the churches, he should allow this bill to go to committee as soon as possible.


LABOUR RELATIONS
Hon. Bud Cullen (Sarnia-Lambton):: Madam Speaker, my question is for the Prime Minister. Yesterday the Prime Minister and some cabinet colleagues met with more labour union leaders. Press reports seem to indicate that there are two positions, the government's position, and the one being advanced by the unions, namely, exchange controls, spending more money, and maybe increasing the deficit if it does not prove to be stimulative. Will the Prime Minister and his cabinet colleagues continue meeting with the CLC and others, or is there no possibility of reaching an agreement?


Pierre Elliott Trudeau: Madam Speaker, on the first part of the question the answer is yes. When we adjourned the meeting yesterday-it was an adjournment and not a breaking off-we did hope to continue discussions. We had, I think, a very important meeting yesterday because we discussed not only the economy but the economic processes quite thoroughly. The CTC recognized very explicitly that the cause of high interest rates in Canada was high interest rates in the United States. That was made very clear in the brief, and they said so very unequivocally. 1 know the Tory party is not very interested in what the CTC says, but I think the NDP might want to take note of that. Of course the remedy they propose is that we bring in exchange controls so that we can cut ourselves off from the U.S. in so far as the free flow of money is concerned. I think members of the House would know the great difficulties involved in embarking on exchange controls.
I must confess I found it somewhat paradoxical that the CTC would be advising exchange controls-


An hon. Member:: 


Pierre Elliott Trudeau: -the CLC would be in favour of exchange controls, while it is opposed to price and wage controls.


ENVIRONMENTAL AFFAIRS
James Ross Fulton: Madam Speaker, my question is for the Prime Minister. As he knows, or should know, there are increasing levels of dioxin, the most powerful poison known to modern science, leaking into the Great Lakes, particularly Lake Ontario which is the water supply for seven million Canadians and Americans. Right now the Government of Canada is hiding an interagency report in which nine out of the 11 scientists involved confirm that the Love Canal is not safe, thereby creating a serious health hazard for Canadians.
Will the Prime Minister personally look into the reason why the Government of Canada is hiding that report and has done nothing to date to inform Canadians of the position taken by those scientists, and will he endeavour to report back to the House next week on what he finds out about that report?


Mr. Jim Schroder (Parliamentary Secretary to Minister of the Environment and Minister of State for Science and Technology):: Madam Speaker, the Minister of the Environment and the Prime Minister view the pollution of the Niagara River and the Great Lakes as a top priority matter, and have voiced their concern to the U.S. in the strongest possible terms. Officials of the minister's department are now looking at this report and in due course we will report to the House.


REQUEST THAT PRIME MINISTER MAKE REPRESENTATIONS TO UNITED STATES PRESIDENT
James Ross Fulton: Madam Speaker, my question is directed to the Prime Minister in the absence of the Secretary of State for External Affairs. Assemblyman Hinchey, Chairman of the New York State Environment and Conservation Committee, is in the Speaker's gallery today, and he informs me that the U.S. Environmental Protection Agency and the Reagan administration are clearly conspiring, along with Environment Canada, to cover up the health dangers of the Love Canal to both Canadians and Americans.
Will the Prime Minister send a diplomatic note to President Reagan informing him that continued inaction on the Love Canal is at the very least in contravention of the 1978 Great Lakes Water Quality Agreement?


Pierre Elliott Trudeau: Madam Speaker, if I understand correctly, the U.S. official who is in the gallery today is accusing Canada and the U.S. of conspiring to cover up. Perhaps I could have him meet with some of the officials of the Department of External Affairs or of the Department of the Environment, because that is a very grave accusation indeed.

July 23, 1982
Oral Questions HOUSING


PRESENTATION OF CHEQUE TO HOME BUYER IN EDMONTON
Mr. Peter Elzinga (Pembina):: Madam Speaker, my question is for the Minister of Public Works, who has been conducting a public relations campaign throughout Canada in regard to the Canadian ownership stimulation plan. He was in Edmonton on Wednesday and presented a cheque for $3,000 to an applicant. Can he indicate to the House what procedure was followed in the selection of this applicant, and did this applicant go through the routine procedure which all other applicants will have to follow when applying for this funding?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, I thank the hon. member for the question. Indeed, I have had the opportunity this week of meeting with five provincial ministers of housing. In addition to speaking about the co-ordination of federal and provincial plans, I took the occasion to highlight the availability of this new plan to young Canadians looking to buy a house for the first time, or to anyone buying a new home, by asking for the opportunity of presenting an actual cheque where the authority has just recently been given to local CMHC offices. I can assure the hon. member that the applicants-there were three presentations, one in Ontario, one in Alberta, and one in British Columbia-applied as did any other applicant, but I would hasten to say that I have learned in the last few days that there have been over 30,000 requests to CMHC offices from coast to coast for this plan. We asked people at random who were close to the city I was visiting for their permission to present cheques to them. They were willing participants, and 1 indicated that all other people would receive the same treatment.


Peter Elzinga: Madam Speaker, I appreciate the minister's assurance that this applicant followed the required routine procedure. But it is interesting to note that on Wednesday, when we contacted CMHC in Edmonton, officials there indicated they did not have any application forms, that they had not had any, and would not have any until today or next week at the very earliest. It is obvious that the minister's assurance is not worth very much because the routine procedure was not followed in this case.


PROVISION OF APPLICATION FORMS
Peter Elzinga: Madam Speaker, can the minister assure the House that these application forms will be in CMHC offices across Canada so that all Canadians can apply for grants, not just his Liberal friends?


Paul James Cosgrove: Madam Speaker, of the 30,000 Canadians applying to CMHC offices across Canada, I hope they are all my friends.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Is that a criterion? What a blatant admission of patronage.


Paul James Cosgrove: I do not know what their political affiliation is and I would like to assure the hon. member that political affiliation had no bearing. My recollection is that those who received cheques were employed by some provincial agencies, and they are not Liberal governments. I am confident, by assisting offices and by giving publicity to the grant program, obviously more pressure will be on CMHC to respond as quickly as possible to those 30,000 Canadians. I can assure the hon. gentleman that my intention was to assist CMHC and the proper administration to have them respond as quickly as possible.


CANADA MORTGAGE AND HOUSING CORPORATION RENT
Hon. James A. McGrath (St. John's East):: Madam Speaker, could the minister responsible for housing advise the House what the position is with regard to CMHC rent increases? For example, according to today's Montreal Gazette, CMHC increased rents on 1,700 units in the city of Montreal as of July 1 by 19.2 per cent. Does the government intend to force CMHC to roll back these post-budget increases and force CMHC to hold the line within the 6-5 guideline?


Paul James Cosgrove: Madam Speaker, I would draw the hon. members's attention to a news release of the President of the Treasury Board dated July 20, in which the position of the government and all agencies under federal jurisdiction is set out. I would assure the hon. member that any agency or department under my responsibility as minister will comply with government policy. I met with CMHC officials this morning and brought this to their attention. 1 received their assurance that the government policy will be complied with.


DISPOSITION OF VACANT UNITS
James Aloysius McGrath: Madam Speaker, I would like to ask the minister responsible for housing a related question. The Mayor of Toronto is talking of changing the bylaws in that city to allow basement apartments. What does the minister intend to do about the 9,537 units currently held by CMHC, 5,700 of which are in his own province of Ontario? Does the minister intend to offer these to the public, or does he intend to have them stay vacant while Canada has an acute housing shortage?


Paul James Cosgrove: Madam Speaker, at any given time Canada Mortgage and Housing Corporation has approximately 20,000 units for disposition under the mortgage insurance fund. At any given time in any province, in any city, the corporation is faced with the practical decision of attempting to sell or rent during that interim period. I am not familiar with the particular case to which the
July 23, 1982

hon. member has referred, but 1 can say generally that is a judgment exercised by local officials in local areas. The objective is to recoup the funds from the sale of the property, and if the market is not advantageous then, in the interim, they rent those properties.


PLIGHT OF UNEMPLOYED HOME OWNERS IN MEETING MORTGAGE PAYMENTS
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, 1 have a question for the minister responsible for housing. It seems that many of the problems, in fact, perhaps the majority of them, that come to our attention these days are centred around housing. The minister has a study that shows in April of this year 22,000 home owners defaulted on mortgage payments. That is an increase of 32 per cent over April last year. The primary reason is not interest rates as much as it is unemployment.
Given that none of the programs the minister has in place in any way address themselves to the difficulties in which people find themselves when they are unemployed and cannot meet their commitment to their mortgage, and in the hope that unemployment is a temporary thing, is there any program which the minister can offer to those people to tide them over or help bridge this temporary problem with which they are faced, that will enable them to keep their family home and in some way enable them to make up their payments?


Paul James Cosgrove: Yes, Madam Speaker, I would draw the hon. member's attention to the change made in the budget of June 28 which addresses specifically the question of the ability of home owners on renewing their mortgages to meet increased payments as a result of increased interest rates on renewals. I would remind the hon. member that the change in the interest deferral plan is one that now permits any family renewing a mortgage, which is 30 per cent above the family income, to a grant of up to $3,000 to assist in that situation.
I would quarrel with the hon. member when he says in his introduction that none of the initiatives of the government through housing address the question of job-creation.


Ian Deans: I did not say that.


Paul James Cosgrove: On the contrary, the $400 million newly instituted through this budget toward housing specifically addresses job-creation because that will result from the stimulus provided by these programs and will get housing going.


Ian Deans: Madam Speaker, would it be possible for the House of Commons to have a hearing program established so that the minister might avail himself of it and improve his ability to hear? I did not say there were no programs to create jobs. I said there were no programs to help those people who are not at the point of renewing their mortgages but are unemployed as a result of government programs, government initiatives-the general economic conditions, if you will.
Oral Questions


REQUEST THAT GOVERNMENT ASSIST UNEMPLOYED HOME OWNERS
Ian Deans: Madam Speaker, again let me address a question to the minister responsible for housing. What about the people not now at the stage of renewing their mortgage who are unemployed, who are out of unemployment insurance benefits, who have to go on welfare and cannot meet their housing payments and are losing their homes? Is there not some way, and could we not find and develop a program to assist those people during this period of economic downturn so they will not lose their homes and therefore will be able to provide decent shelter for themselves and their families?


Paul James Cosgrove: Madam Speaker, I did, indeed, hear. I listened very carefully and understood the question of the hon. member. In fact I am encouraged about his concern for employment. I have said many, many times that I wished that he and his party had demonstrated that concern about employment when, in November, for example, $350 million was directed toward a job-employment program to create rental accommodation in this country-


Ian Deans: What the hell has that got to do with the question, you nitwit?


Paul James Cosgrove: -to provide rental accommodation to people who are the neediest in this country, and to give 180,000 Canadians jobs.


Ian Deans: You don't understand that people are losing their homes.


EXTERNAL AFFAIRS
Mr. Stanley Hudecki (Hamilton West):: Madam Speaker, my question is directed to the Secretary of State for External Affairs. The Trilateral Commission, to the best of my knowledge, is an organization consisting of representatives from North America, Europe and Japan. The Canadian membership includes some current parliamentarians, some ex-parliamentarians, other government officials, and corporate executives. Such an organization, by virtue of its secrecy, the selected nature of its membership and its potential influence on government, incurs suspicion as to its aims and motives. Could the minister inform the House of his assessment of the role of this international body, The Trilateral Commission.


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, The Trilateral Commission is indeed a private association, but it is one dedicated to bringing together North America, including both Canada and the United States, Japan, and the European community. The

Oral Questions
Government of Canada has sufficient confidence in its activities and in its intentions that we have made small grants to it over the years to facilitate its functioning. From time to time also members of the government have been prepared to consult with them. I would certainly want to dissipate any suggestion that there is anything unwholesome about the organization. I believe it to be public-spirited. Nevertheless it remains a private organization which establishes its own priorities and its own functioning.


PRESENCE IN GALLERY OF SECRETARY-GENERAL OF THE COMMONWEALTH
Madam Speaker:: I ask the House to join with me in recognizing the distinguished presence in our gallery of the Secretary-General of the Commonwealth, Shridath S. Ramphal.


Some hon. Members:: Hear, hear!


INDIAN AFFAIRS
Charles Joseph Clark: Madam Speaker, the Minister of Justice will recall that the other day I asked him whether he or his department had been consulted regarding the decision of the Minister of Indian Affairs and Northern Development to reject the unanimous recommendation of a committee of the House that there be a public inquiry into the Westbank Indian Reserve question. He will recall that the minister rejected a public inquiry and opted instead for a secret, private inquiry. The Minister of Justice will have had the time to consult with his officials. Was he consulted, or were his legal officers consulted before that decision was taken?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, I have looked into the question, and it was an administrative decision made by the Minister of Indian Affairs and Northern Development, so there was no need for him to consult with officials of the Department of Justice.


CORPORATE AFFAIRS
Charles Joseph Clark: Madam Speaker, my supplementary question concerns another inquiry or an area in which the Department of Justice acted. The Department of Justice conducted an inquiry into the question
July 23, 1982
of the Canadian people losing $125 million in the Consolidated Computers case. Will the Minister of Justice tell us whether that inquiry looked exclusively into the question of legal culpability?


Joseph Jacques Jean Chrétien: Madam Speaker, I have given some written answers to the hon. member from Nova Scotia who was working on this file; I have written to him. We have looked into whether there was some criminal problem in this operation, and there was not. We had to ensure that we had the most objective answer possible, so we went outside to get counsel to look into the matter. He made a report on the matter, and I informed the hon. member who asked me the question about it. The Department of Justice has done its work.


Charles Joseph Clark: Since the minister referred to an inquiry into a criminal matter, I take it they looked only into the question of legal culpability.


INDUSTRIAL AND LABOUR ADJUSTMENT PROGRAM
Charles Joseph Clark: Madam Speaker, may I ask the minister responsible for ILAP in the House, at least in so far as it relates to Windsor, whether Mr. John Macdonald Brown is involved in judging ILAP applications and, if so, is this the same John Macdonald Brown who was assigned to ensure that the Consolidated Computers question, on which Canada lost $125 million, would be conducted in an economically viable way? Is this the same man? Is this the person judging ILAP grants? If so, why?


Hon. Herb Gray (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, if I am not mistaken the individual in question is a member of the Enterprise Development Board. He is one of a number of private sector businessmen and officials who carry out the work of the Board.


Charles Joseph Clark: This gentleman has a $125 million track record; that is what he has cost the people of Canada so far.


QUERY RESPECTING MANAGEMENT ABILITIES
Charles Joseph Clark: Madam Speaker, will the minister responsible for ILAP in Windsor tell us whether there has been any inquiry into the management capacity or other capacities of either Mr. Brown or others who were involved in the Consolidated Computers question or-


Mr. Peterson:: Don't answer the question, Herb.


Mr. Fisher:: You had your chance to stop it. Herb knew how to stop it.

	
July 23, 1982


Charles Joseph Clark: -was the report which has been commissioned by the Department of Justice and is being kept secret from Parliament exclusively into legal culpability, and the question of the management ability of the people who lost Canada $125 million was not investigated at all?


Herbert Eser (Herb) Gray: Madam Speaker, the results of inquiries into the Consolidated Computers situation are being taken into account and worked on in the reorganization of various departments. In any event, as has been said before in the House, the situation is one which built up over a period of more than ten years. There was also a series of decisions over a period of ten years. It was a situation which my hon. friend ignored for over nine months, and which this government and I cleaned up.


Charles Joseph Clark: That is a falsehood.


NATIONAL CAPITAL COMMISSION
Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, my question is directed to the Minister of Public Works. It concerns the National Capital Commission. Perhaps he knows that Local 70125 of the Public Service Alliance of Canada leases an office in the Fraser Building on Queen Street in Ottawa. Just recently they received notification of an increase in rent of 25 per cent, on top of an increase last year of 30 per cent. In light of the minister's answer to the hon. member for St. John's East, would the minister assure the House, so that these people may be assured, that the rental policy of the NCC with respect to commercial, residential and other properties will coincide with the 6 per cent and 5 per cent policy of the government?


Paul James Cosgrove: Madam Speaker, I have already given that assurance on two occasions in the House. As I have indicated, the policy of the government was set out in a news release of the President of the Treasury Board dated July 20. Also I have indicated that I have advised all departments and agencies reporting to me, and for which I have responsibility in the House, that they are to comply with the government's policy in this regard.


DISARMAMENT
Mr. Douglas Roche (Edmonton South):: Madam Speaker, my question is directed to the Secretary of State for External
Oral Questions
Affairs. The minister will know that about the only positive movement which came out of the Special Session on Disarmament of the United Nations was the launching of a world disarmament campaign to which several countries have pledged financial support, including Czechoslovakia, Sweden, and Mexico. Is it the intention of the Government of Canada to give financial support to such a campaign, launched as it is globally and with access to every country, not by increasing Canadian spending, but by redirecting some of the present and large domestic budget for disarmament education efforts so that Canada can give support to the world disarmament campaign?


Mark R. MacGuigan: Madam Speaker, I thank the hon. member for his question, especially for highlighting the importance of the world disarmament campaign toward which Canada contributed so much at the UNSSOD II session that just ended. In fact the discussion was based upon a Canadian paper. I can tell my hon. friend that I hope to have an announcement concerning his most precise question within a few days.


NEGOTIATIONS ON CRUISE MISSILE TESTING
Douglas Roche: Madam Speaker, has the federal government yet made a final decision on granting permission for the testing of the Cruise missile in Canada? If the final decision has not yet been made, could the minister indicate to the House the time line for the process of continuing negotiations? Is it the intention of the government to lead those negotiations to a point where there will be a decision in favour of the testing of the American Cruise missile in Canada? The minister will know that that is a very controversial subject and that several surveys have been taken which show that the Canadian public is divided on the question.


Mark R. MacGuigan: Madam Speaker, a decision on principle on this matter was reached by the Canadian government last year, that we would enter into negotiations with the United States with a view to having such testing, and also with a view to having a large agreement which covered all forms of weapons testing in Canada, between Canada and the United States. As the hon. member knows, because he was the one who raised the point, we said that we would not proceed with the negotiation of a subagreement concerning the Cruise missile specifically until after UNSSOD II was completed. In fact, not only have we not proceeded with that, the negotiations have not been completed on the over-all umbrella agreement. The negotiations are proceeding and I think it very likely, the issue of principle having been decided, that they will work out satisfactorily.

July 23, 1982
Tabling of Reports


PETITIONS
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the table the reports of the Clerk of Petitions stating that he has examined the petitions presented by hon. members on Thursday, July 22, 1982, and that he finds that they meet the requirements of the Standing Orders as to form.


PRIVILEGE
John Allen Fraser: Madam Speaker, my question of privilege is very brief. The hon. member for Hamilton West (Mr. Hudecki) raised a question with regard to The Trilateral Commission. I know that there was no intention on the part of the hon. member to cast any aspersion on any member of the House, but 1 am a member of The Trilateral Commission, as is my Liberal colleague, the hon. member for Gloucester (Mr. Breau), and as was the present head of the Canadian Human Rights Commission, Gordon Fairweather.
I rise on this question of privilege to say that I would hope that my hon. friend, when asking the question of the hon. Secretary of State for External Affairs (Mr. MacGuigan), is not in any way imputing that any member of the House would belong to an international commission which was in any way a subversive or sinister organization working against the benefit of this country or the free countries in the world.


Madam Speaker:: I also hope that such an imputation would not be made. I do not believe it was in that question. Otherwise, the hon. member would have considerable recourse against the hon. member if he had done such a thing.



ROUTINE PROCEEDINGS


Mr. John Evans (Ottawa Centre):: Madam Speaker, I have the honour to present the sixteenth report of the Standing Committee on Finance, Trade and Economic Affairs. If the
House gives its consent, I intend to move concurrence in this report later this day.
[Editor's note: For above report, see today's Votes and Proceedings.]


CONCURRENCE IN SIXTEENTH REPORT OF STANDING COMMITTEE
John Leslie Evans: Madam Speaker, if the House gives its consent, I move, seconded by the hon. member for London West (Mr. Burghardt), that the sixteenth report of the Standing Committee on Finance, Trade and Economic Affairs, presented earlier this day, be concurred in.


Madam Speaker:: This can be done only with the unanimous consent of the House. Does the House consent to the presentation of this motion?


Some hon. Members:: Agreed.


Madam Speaker:: Does the House agree that the report be concurred in as read?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[ Translation]

Mr. Thomas H. Lefebvre (Pontiac-Gatineau-Labelle) moved: that the first report of the Special Committee on Standing Orders and Procedure, tabled in the House on July 6, 1982, be concurred in.


[Stage Direction]
Motion agreed to.

Thomas Lefebvre: that the second report of the Special Committee on Standing Orders and Procedure, tabled in the House on July 6, 1982, be concurred in.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 3,740, 4,354, 4,357, 4 358 and 4,359.
July 23, 1982


Mr. Crosby: 1.	Does the Canadian National Railway extend credit to the CAST shipping group in respect of containers and other cargo transported to and from the Port of Montreal or other ports and, if so, what are the terms of the credit?
2.	Are the terms extended to the group by the CNR different from the terms of credit extended to other marine transporters and, if so, what are the differences?
3.	Is the group indebted to the CNR in respect to the transport of containers and other cargo and, if so, to what extent?
4.	Is the group indebted to the CNR or any related company in respect of any service or other matter not involving the transportation of containers or other cargo and, if so, what are the details?


Mr. Jesse P. Flis (Parliamentary Secretary to Minister of Transport):: The management of Canadian National Railways advises as follows:
1.	Yes. As of the date of the question, the terms of credit were 30 days.
2.	The terms of credit referred to in part 1 were the same as those extended to other marine transporters of container traffic.
3.	CAST indebtedness to the CNR for transportation services, at February 5, 1982, was $4,677,066.
4.	In connection with CNR preference shareholdings in CAST, a dividend in the amount of $2,478,000 was due, but unpaid.


Mr. McKinnon: 1.	Did the Department of National Defence place a $284,823 contract with Skene Industries Ltd. for dinghy sailing boats and, if so, how many of the boats does the department now have and how many is the department purchasing for $284,823?
2.	Did the department place a $11,600 contract with Queen's University for an "overview" of Canada's northern security and, if so (a) who is conducting the study (b) on what date will the study begin and on what date will it be completed (c) will the study be available to MPs upon completion?


Mr. George Henderson (Parliamentary Secretary to Minister of National Defence):: 1. Yes. The Department of Supply and Services on behalf of the Department of National Defence awarded a $284,823 contract to Skene Industries Ltd. for the purchase of 75 sailing dinghies. The Department of National Defence currently holds 229 sailing dinghies.
2. Yes. The Department of Supply and Services on behalf of the Department of National Defence placed an $11,600 contract with Queen's University for an "overview" of Canada's northern security.
(a)	The principal investigator of this study is professor Nils Orvik of the Centre of International Relations.
(b)	The study was started in February, 1982, and will be completed on June 30, 1982.
(c)	The study will be available to Members of Parliament who express an interest in receiving it.
Order Paper Questions


Mr. McKinnon: Did the Department of National Defence award a $5,250 contract to Barrodale Computing Services Limited to investigate LI norm linear prediction methods for discovering sub quantum jumps in squid gradiometer data and, if so, for what reason?


George Roland Henderson: Yes. The Department of Supply and Services on behalf of the Department of National Defence awarded a $5,250 contract to Barrodale Computing Services Ltd. This contract is for research leading to the development of improved magnetic sensors for Canadian Forces anti-submarine aircraft.


Mr. McKinnon: Did the Department of National Defence award a $12,100 contract to Humanoid Systems for the development and delivery of one humanoid for testing purposes and, if so, for what reason?


George Roland Henderson: Yes. The Department of Supply and Services on behalf of the Department of National Defence awarded a $12,100 contract to Humanoid Systems for the development and delivery of an anthropomorphic dummy (humanoid). The dummy is to be used in the research and development, testing and evaluation of personal protective equipment as a part of the chemical defence program.


Mr. McKinnon: Did the Department of National Defence award a $400,000 contract to Canadair Ltd. for "CF-5 aircraft technical investigations" and, if so (a) what kind of technical investigations will be conducted on the aircraft (b) for what purpose are the technical investigations being conducted (c) how many CF-5s does the department have (i) in storage (ii) in operational use and how old are the aircraft?


George Roland Henderson: Yes. The Department of Supply and Services on behalf of the Department of National Defence awarded a $400,000 contract to Canadair Ltd. for CF-5 technical investigations over a three-year period to March 31, 1985.
(a) and (b) Technical investigations are conducted whenever design and/or development modifications are considered important for greater efficiency of the aircraft and for flight safety. Current technical investigations concern modification of lubrication fittings on the nose landing gear and modification of the aircraft landing gear control units for field testing. Future investigation will be conducted towards development of a technical order for aircraft battle damage repair. The contract also provides for consultant support to accident investigation.

July 23, 1982
Small Businesses Loans Act (No. 3)
(c)	(i) 15. (ii) 72; ten more aircraft are used for training and test purposes. The CF-5 entered service in 1968.


David P. Smith: I ask, Madam Speaker, that the remaining questions be allowed to stand?


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Hon. Charles Lapointe (Minister of State (Small Businesses and Tourism)) moved: that Bill C-122, an act to amend the Small Businesses Loans Act (No. 3), be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Madam Speaker, it is a privilege to start the debate on second reading of Bill C-122, whose purpose is to provide a nine-month extension for the Small Businesses Loans Act. Before going any further, I would like to mention that I had a number of conversations on the subject with my colleague, the member for Cambridge (Mr. Speyer) and also with my colleagues in the New Democratic Party, namely the member for Kamloops-Shuswap (Mr. Riis) and the member for Winnipeg North (Mr. Orlikow). 1 know that the hon. member for Mississauga South (Mr. Blenkarn), who in the past has always shown an interest in small businesses, is also interested in this bill, as he indicated yesterday when he phoned my office to inquire about some details. My colleagues in the Progressive Conservative Party and the New Democratic Party informed me that they agreed with the principle and the purpose of the bill, which is to provide a nine-month extension for the Small Businesses Loans Act. I hope that today, and my colleagues realize this, we shall be able to dispose of all stages of this bill, namely, second reading, Committee of the Whole and third reading, because the act has ceased to exist since June 30 of this year. This means, Mr. Speaker, that the chartered banks and other financial institutions, which during the 21 years that the legislation has been in existence have been accustomed to making loans guaranteed 80 to 100 per cent by the Government of Canada, have agreed for the past weeks to continue operating under the provisions of the former act which expired on June 30, 1982. I personally wrote to the financial institutions and chartered banks, requesting them to extend their operations, mentioning that the government intended to extend
the act until the end of March 1983. If the banks and other financial institutions are to go on offering government guaranteed loans to small businesses, it is essential that this bill be passed, and I hope that with the collaboration of my colleagues in the Progressive Conservative Party and the New Democratic Party, we shall be able to pass this bill today.
Mr. Speaker, as the House is aware, the government has been regularly reviewing the Small Businesses Loans Act, either to provide a three-year extension or to change the maximum amount of loans admitted under the Small Businesses Loans Act. Hon. members will probably wonder, as did my colleague, the member for Mississauga South, yesterday, why only a nine-month extension? Why not three years, as usual? Mr. Speaker, there are two reasons for this. First of all, we want to administer the Small Businesses Loans Act according to the same schedule we use for the legislation on loans to fishermen and farmers. These two acts, Mr. Speaker, expire or run according to the Fiscal year, that is, from April 1 to March 31, and I would like the Small Businesses Loans Act to be administered according to the same calendar, instead of from January to December. My second reason is that, as the House is aware, about two months ago I made public a study on small business financing, which contains a chapter on the Small Businesses Loans Act. I am now setting up an advisory committee, consisting of Canadian businessmen and women, to analyse this study and make recommendations by the end of this year on any additional changes to be made in the Small Businesses Loans Act and in the government's general policy on the financing of small businesses.
That is why I am asking the House today to approve this nine-month extension. I am not now in a position to propose more substantial changes, since I first want to see the recommendations the advisory committee on small businesses will be making between now and the end of this year. Bill C-122 is very straightforward Mr. Speaker, and, in fact, it contains only one paragraph. However, it is a very important piece of legislation, because it amends an act that has far-reaching consequences. Since its first passage in 1961, the impact of the Small Businesses Loans Act has been very substantial and very favourable. In 21 years, nearly 100,000 loans totalling $2.7 billion were authorized under the act. When we realize, Mr. Speaker, that the maximum loan authorized is $100,000, a maximum that has been in effect for only two years, then we can imagine the vast number of businesses that have been assisted under this program.
The main characteristic of the program consists in helping small businesses obtain loans of up to $100,000, with the support of substantial government guarantees. If a business has a gross turnover of $1.5 million or less, it is eligible for
July 23, 1982

improvement or expansion loans with an 80 to 90 per cent guarantee by the Canadian government. For instance, the federal government will guarantee 80 per cent of the value of a loan that will be used to finance the purchase of fixed or movable equipment, including installation costs. If the loan is to be used for the purchase, renovation or construction of new premises or the purchase of land, this guarantee may be as high as 90 per cent and, of course, the loans must be paid back within ten years.
The interest rate applied to guaranteed loans under the Small Businesses Loans Act is also very competitive, which is why considerable use is made by small businesses of this mechanism. In fact, it is one of the attractive aspects of the act, since interest on the loans is 1 per cent above the prime rate, and unfortunately, Mr. Speaker, it is very often, if not always, the case that small businesses have trouble getting loans on such favourable terms. Very often, chartered banks or financial institutions charge 2 or 3 per cent above the prime rate on loans to small businesses. Since the act has been in existence for 21 years, I am sure my colleagues are aware of the basic components of the Small Businesses Loans Act, namely, who is eligible, on what terms, what the requirements are for the guarantee, and so forth. There are some aspects of this legislation, however, which I would like to recall for hon. members, because we tend to forget them too easily.
First of all I would like to mention that most Canadian businessmen and women-and I give them credit for it-in spite of the very strong government guarantees which, as I said before, over a period of 20 years have reached up to $2.7 billion, have dutifully met their loan commitments under this act. Requests for payment or request to the government to use the guarantee provided for these loans have represented only .8 per cent of total loans since the act was passed 21 years ago. In other words, the direct cost of application of the legislation has been extremely reasonable.
The second point that I would like to make concerning the Small Businesses Loans Act is that this legislation is a perfect example of government efficiency. Indeed, the administration of the act requires a staff of only six employees, including the support staff and the manager. If we consider, Mr. Speaker, that, last year, these six people approved and administered 12,500 loans totalling $502 million, I believe that it is easy to conclude that this represents a very substantial and efficient performance. My hon. friends on both sides of the House can play a major role by ensuring that this program, which is very popular among small businesses as well as being very important, receives as much publicity as possible. To assist them in this regard, and most Members of Parliament have already used this procedure, I am glad to make available to them and to send on request brochures and pamphlets that explain how to use the program, and I know that most members have made an effort to use this material to inform the business community in their constituencies about this program which gives them
Small Businesses Loans Act (No. 3)
relatively easy access to capital because of the government guarantee.
I would also like to say that it is important to pass this legislation immediately because, in addition to the 4 per cent reduction of interest rates announced by the Minister of Finance (Mr. MacEachen) in his budget of June 28, chartered banks, financial institutions, credit unions and Caisses populates will be able to use the loan guarantee mechanism up to an amount of $100,000 under the Small Businesses Loans Act on the loans they provide and to which the 4 per cent reduction in interest rates will apply. I therefore believe that a combination of these two programs will allow more businesses to go ahead with their plans to invest, modernize their businesses, purchase new equipment, and so on, and I am convinced that all of this will lead to the economic recovery which we all wish for.
I know that by giving approval to this bill, my colleagues will support a very popular piece of legislation which will extend the application of the act, and I can assure all hon. members that the small business sector will continue to make a wider use of this legislation and to benefit from its provisions. I therefore believe that today we have an opportunity, which happens perhaps too rarely in the House of Commons, for all parties to come to an agreement and legislate quickly and efficiently to assist the business community, which is truly the backbone of the Canadian economy. This is why I hope, Mr. Speaker, that the House will approve this bill quickly, and 1 would like to thank in advance my colleagues of the Progressive Conservative Party and the New Democratic Party for their co-operation in this regard.


Donald Alex Blenkarn: Mr. Speaker, 1 was wondering if the minister would accept a question before I proceed with my remarks.


Charles Lapointe: Yes, Mr. Speaker.


Donald Alex Blenkarn: The minister mentioned the figure of $2.7 billion in loans under this act. The figure in the December 31, 1981 report shows a total for the whole history of the act of $1,961 billion. Have there been $700 million in loans under this act since the beginning of this year?


Charles Lapointe: Mr. Speaker, I do not have in front of me the annual report of the administration of the Small Businesses Loans Act. The hon. member speaks of $1,961 billion. Unfortunately I do not have the figures for the first four months of this year. The figure provided to me by my officials is the one I mentioned in my speech, $2.7 billion. I will be glad to clarify that during the course of the day.


Donald Alex Blenkarn: I have a further question for the minister. The minister will appreciate that there has been a mammoth increase in the use of the act, if the minister's figures are

July 23, 1982
Small Businesses Loans Act (No. 3)
anywhere near correct, since the first of the year. Indeed, it is nearly three times more than in previous years. Second, I would point out to the minister that the act has only been effectively used since 1978. Prior to that it was used very little. Can the minister explain why all of a sudden there is such a huge interest in the act?


Charles Lapointe: Mr. Speaker, the main reason for the wider use of the act is that prior to 1978 the recommendation in the act was that the interest rate to be applied by financial institutions should be of one below prime. There was not a great enthusiasm on the part of the financial community to apply this act because of that provision.
Following consultation with representative groups of small businesses and financial institutions in 1978, the decision was made to raise the interest rate to one above prime. Since then the financial institutions have been more aggressive in promoting this program. Looking at it in retrospect, considering the utilization of the act, the small business community has profited from it over the last few years.


Donald Alex Blenkarn: Mr. Speaker, this is the third amendment to the Small Businesses Loans Act in this session of Parliament. We started off with Bill C-17 which was cleaned up on June 6, 1980, followed by Bill C-84 which was cleaned up on December 16, 1981, and now we have Bill C-122 before us. Three times during this session of Parliament we have dealt with the Small Businesses Loans Act.
One begins to wonder what is wrong with a ministry which cannot get its act together. Why should the House of Commons in one session of Parliament have to deal with the Small Businesses Loans Act three times? Why could Parliament not do the job once and have it done and over with?
Bill C-122 implies that we must again deal with the Small Businesses Loans Act in this Parliament by March 31, 1983, less than eight months from now. The minister of small business is supposed to have everything in hand. It seems rather strange that he has to come to this House three times to explain that he wants to extend the act for.
The minister has given an explanation of that. Frankly, his explanation does not wash. The minister says it should be brought in line with the fiscal year end. That is no problem. He could have brought it in for the fiscal year end March 31, 1985, 1987 or whenever he wanted it. In other words, there is no problem getting it on a fiscal year end system.
The minister does not need to have the act expire at the end of this fiscal year. It could expire at the end of the fiscal year umpteen years from now. That argument is pretty shallow. The minister knows better than to produce such a shallow argument.
We come back to his concept of a blue ribbon committee. I do not know whether it will be called a little blue ribbon committee or what kind of blue ribbon committee it will be. It is another illustration by a government that refuses to trust Parliament. The minister knows that there are many members in this House who in their career prior to coming here were engaged in small business. A number of members are still
heavily involved in small business. While they are not fully employed in those businesses, they certainly have an interest in them.
Throughout the communities in each of our constituencies there are a great number of small businesses. If there is one matter that Members of Parliament know more about than anything else, it is small business, both personal and in their dealings with constituents. However, we have to recruit a paid, presumably, little blue ribbon committee to advise the minister. Therefore, we cannot extend this bill beyond March 31. After all, we have to wait for this committee to report.
I say to the minister that is a pretty shabby answer. If the minister really had wanted to get Parliament and the small business community on his side, he would have taken his financing report concerning small business and directed a reference to a special task force of this House to inquire into what the Government of Canada can do to expedite small business financing. Instead, we wind up with one little bill after another which is really an extension of the same bill with some little alteration. We wind up with a little blue ribbon committee rather than the opportunity to have Parliament get down to brass tacks and see what can be done with regard to small business financing.
There is really no excuse for this. The government has an obligation to use the resources of Parliament. Patronage-oriented committees to advise the minister so that he can stay far away from Members of Parliament and bring in to the House a fait accompli to be rubber-stamped is the wrong way to go.
If the minister wanted to reorganize small business financing, he could have arranged with his colleague the President of the Privy Council (Mr. Pinard) to direct the appointment of a special task force to inquire into proposals with respect to small business financing and make recommendations. There is expertise in this House in terms of small business financing. That was an opportunity for this minister to show that Parliament can be trusted.
As I pointed out to the minister in my questions before commencing my remarks, there has been a great use of the Small Businesses Loans Act, starting in 1978 and continuing on through. There has been an exponential growth in the use of this act by small business. One begins to wonder about that because in some senses this bill should not be called the Small Businesses Loans Act. It should be called the small business guarantee act for bankers, because that is what it does.
I noticed the Minister of Transport (Mr. Pepin) smiling when he heard the explanation of the minister as to why the sudden explosion in the use of the Small Businesses Loans Act because of the fact the banks can now charge 1 per cent above prime and get a government guarantee. It is good to get 1 per cent over prime and still get government backing for a loan. That is a pretty good deal for a bank.
I think we should all be concerned about to what extent the Government of Canada will give the credit of the people of
July 23, 1982

Canada to a bank to allow it to charge 1 per cent above prime and somehow say that this is small businesses loans legislation and not what it really is, "bankers' guarantee legislation." In that sense these bills are really hokum because they claim to do something they really do not do at all. Loans are not being made by the government to small businesses in this situation. This is an arrangement whereby the Government of Canada is allowed to guarantee bank loans to small businesses up to $100,000. When we look at it in that sense, we begin to ask ourselves why the government did not trust Parliament and have a task force study the issue. There is really no answer to that. The government does not have its act together concerning small business at all.
The minister mentioned the provisions in the budget which provide for reducing interest rates on certain small business loans by 4 per cent, but that is not before the House. What I would like to be told by the minister or some government spokesman is why those budgetary provisions for relatively low interest abatement for small business are not before the house. This House is likely to adjourn, and some people say the House will not be reconstituted, perhaps, until some time approaching Thanksgiving. We have a promise in the budget respecting interest abatement or interest rebates for small business, but those rebates cannot be made until legislation is passed. Yet we are spending this afternoon debating a bankers' guarantee bill and not really doing anything for small business other than extending this guarantee bill. Why are we extending it only until March 31? The minister gave us a hokum explanation.
There has been very little lost under the Small Businesses Loans Act. Indeed, the lost ratio is less than the lost ratio the banks have suffered on their regular loan portfolios. One begins to wonder, then, why there is a government guarantee on those loans. Why do we need government guarantees when the loan loss performance is better than the regular loan loss performance of banks on regular, ordinary, every day loans in their general portfolios? I would have thought the minister or some representative of the government would be able to give us that rationale this afternoon. It is the kind of rationale a task force of this House would want. It is the kind of thing I would have thought would come from the minister. We have had an inquiry into bank profits. We are likely to be tabling a report in a very short time, and that report will indicate the loan losses by our chartered banks. The loan losses under this legislation are smaller than the regular loan losses determined by that committee.
The best thing we have ever had for small business was the proposal developed by my party under the leadership of the hon. member for St. John's West (Mr. Crosbie) when he was minister of finance. He prepared and organized something called a Small Business Development Bond. Hon. members will recall that the government accepted the idea in April of 1980. It fooled around with the idea. It said it would never allow it to be implemented. We on this side of the House conducted a bit of a filibuster and forced the minister finally to
Small Businesses Loans Act (No. 3)
get some clout in cabinet and to have that Small Business Development Bond program instituted. It ran until December 31, 1981. During the period under that proposal small businesses were able to borrow money at roughly half prime plus 2 per cent. The cash flow costs of loans under that program were 9 per cent or 10 per cent. Small businesses in the country borrowed capital funds amounting to over $2 billion over a nine-month period.
That program worked well. It was a dramatic help to small business. Unfortunately, that program went by the boards. The government's program of 4 per cent interest abatement is just so much air because the government has not enough intestinal honesty or fairness to introduce a bill which indicates where that type of program is going. Nothing will happen. No banks will make any loans. No banks made any loans under the Small Business Development Bond until we as a party on this side of the House forced the matter into the Income Tax Act in specific detail. No bank will lend under the government's 4 per cent-off interest proposal until the details of the proposal are forced into law in an accurate way so that they can be understood.
There seems to be a pattern with this government with respect to small business. The government produces a bill and says, "Yes, we passed another bill for small business, the Small Businesses Loans Act extension; aren't we wonderful fellows?" The minister can put out press releases on this every six, eight, nine or ten months and he can put out press releases on measures taken in the budget, but he has never done anything. This bill is nothing new and really does nothing. It is hokum. We are prepared to let it go through this afternoon, but at the same time we expect some explanation from the government. We expect an explanation from the minister as to where we are going better than the explanation he has given us so far.


Mr. Deputy Speaker:: The hon. member for Burlington (Mr. Kempling).


Mr. Kempling:: Mr. Speaker-


Mr. Berger:: Mr. Speaker, I rise on a point of order.


Ian Deans: Mr. Speaker, I also rise on a point of order, if I may.


David Berger: Mr. Speaker, I had not seen the hon. member sit down. I had not expected him to sit down so quickly. I wonder if he might entertain a question.


Donald Alex Blenkarn: Yes.


Ian Deans: Mr. Speaker, I wonder if I might prevail upon my colleague and friend, the hon. member for Burlington (Mr. Kempling). 1 was sitting behind my normal seat. I have an appointment at two o'clock which will keep me out of the House, and I wonder if the hon. member might consider allowing me the opportunity to speak for 15 minutes before one o'clock. I ask for his good grace in this regard. I recognize he does not have to.

July 23, 1982
Small Businesses Loans Act (No. 3)


Mr. Deputy Speaker:: The hon. member for Burlington concurs. The hon. member for Montreal-Laurier (Mr. Berger) also rises to ask a question.


David Berger: Mr. Speaker, I should like to ask a question pertaining to the comments made by the hon. member for Mississauga South (Mr. Blenkarn). He asked why the government gave a guarantee when loan loss experience is less than regular loan loss. I wonder if he was not comparing apples and oranges. Was he talking about loans of the same size? 1 wonder if the regular loan loss experience figures that he has might pertain to loans of several hundred thousand dollars, whereas under this bill we are talking of loans of up to $100,000.


Mr. Deputy Speaker:: The hon. member will have an opportunity to make a speech.


Donald Alex Blenkarn: Mr. Speaker, 1 was comparing the loan losses that have taken place under this act with average loan losses on every loan the bank has, including these. These loan losses are less than the average loan losses of the bank. Whether those loans are $1 million or $10 billion or foreign loans does not matter. The loan losses here are less than the loan losses that banks generally have. That has been the experience over the term of the act.


Ian Deans: Mr. Speaker, 1 want to thank my colleague the hon. member for Burlington (Mr. Kempling) for allowing me this opportunity to speak. I have a commitment that requires me to leave. 1 will be back, of course, but 1 wanted to say a word or two on this bill on behalf of my colleagues. 1 do not intend to take too long.
The hon. member for Mississauga South (Mr. Blenkarn) went into the detail of a number of different pieces of legislation that may in one way or another assist small business. Without any disrespect for what he was saying, I thought that in terms of the over-all programs of the government as they apply to small business, we tend to deal with things in a very piecemeal fashion. There are numerous temporary measures available but these do not instil confidence and are not as well used, in normal circumstances, as they should be. They do not provide the service and the benefit that they are intended to provide. This is mainly because the people who take advantage of the reduced interest rates available through the Small Businesses Loans Act or the financial institutions that make the money available are never absolutely sure whether the legislation will be changed or terminated. It is therefore a little difficult for the lender or borrower to take advantage of the legislation in planning the expansion of business.
Someone may think that they would like to expand their business but are not yet to ready to proceed because there is still planning to be done, such as analyses of markets, a review of available machinery, possible change of location and the time it takes to formulate and execute an over-all plan. All of this may take longer than is allowed by the termination date in the bill. They are therefore unable to do much financial planning although that may well be the key element of any
expansion. They may decide that business opportunities justify an increase in capacity but they are not yet sure how to make the changes and whether in the short run that increase would be sufficient to pay the cost of the borrowing. If their calculations are made on the basis of the money available under the Small Businesses Loans Act, that means they must go ahead with their plans before the end of March next year. In some cases they may not be able to do this.
I wonder why the minister did not simply extend the bill without a termination date. I heard his explanation that a committee was being set up, but that committee need not interfere with the termination date. The bill could have been extended for an indeterminate period of time. People could then plan and it would give some stability to their planning to know that the money is likely to be available if, as and when they are ready to take advantage of it. This would be of more benefit to them and perhaps the legislation would then be used more widely.
I am always concerned that we may expect people to rush into things. With the present termination date the small business person may feel it necessary to make decisions more quickly than his business justifies. The sensible decision may well be not to expand, if they are not sure that the moneys will be available. That kind of decision will cost us job opportunities and economic development.
I suggest to the minister that he give serious thought to going ahead with the committee to study the problems of small business-although I think these are self-evident-and that he extend the terms of the act without including a termination date. This would allow the business community to feel secure in the knowledge that it would be able to avail itself of the capital that is required when it has had an opportunity to review plans.
We support the change, Mr. Speaker. We hope that it will provide benefits. There would have been no benefit if we had not provided for an extension because the bill had already run out.
1 have a varied background, Mr. Speaker, and over the years 1 have owned two small businesses, either in partnership or outright. Both of them made money. I sold one and gave one away. The problem that very small businesses have at the moment is not that of expansion but of being able to use their productive capacity. The bill will not help in that regard.
The problem with the majority of small businesses is that they are unable to find a market for their product. There is an ever diminishing marketplace for a number of reasons, partly because of the general economic downturn which has resulted in fairly substantial numbers of people becoming unemployed, and partly because of very high interest rates at the consumer level, which range upwards of 22 per cent. If someone is buying on credit they may pay as much as 27 or 28 per cent interest. The difficulty facing the small business person is that the consumer marketplace is small. The cost of the product manufactured or sold increases, the cost of carrying the inventory is going up as a result of interest rates, and the
July 23, 1982

number of people available to purchase the product is going down. Fewer people feel confident enough to spend the money that they have or to assume the additional liability of a major purchase.
I suggest to the minister that, notwithstanding the best intentions on the bill or the fact that I think it has general support in the House, it does not really begin to address the major problems of small business. I am sure that in the ridings of every member of this House-I know it is true in those of the New Democratic Party-every day there are announcements of businesses that are going bankrupt or simply closing their doors, and this does not help. Other than in a few isolated instances it is very difficult to find a great deal of initiative being shown by people in the small business sector towards expansion of their business. After all, who is going to expand their business if their customers are not in a position to buy? I suggest to the minister responsible for small business that he devote not only time to finding ways to help those who require financial assistance to expand, but that he put some conscious effort into finding ways to stimulate the consumer marketplace.
Look at what has happened to the country since we last dealt with this bill. The level of unemployment has gone from 800,000 or 900,000 to in excess of 1.5 million, almost double. Of course, that has impacted most heavily on the small business community. Tens of thousands of people are not eligible for unemployment insurance because they have been unemployed for longer than the act will allow payment to be made. They have had an income reduction so dramatic that they are unable to make purchases, and that impacts primarily on the small business community. To turn a blind eye to that problem is to turn a blind eye to the most serious of all of the problems confronting small business.
I am dismayed when I look at the government's over-all strategy-it is no secret that I disagree with the strategy- because the government has determined, for whatever reason, that it is appropriate to reduce the purchasing power of Canadians even further and restrict their incomes even more. If a person's wage level today is such that he is unable to purchase the things being manufactured, and therefore more and more people are laid off and more and more small businesses are unable to continue in operation, if that is the situation today-and I think it is without question-how will restricting their incomes even further improve things? If you restrict their incomes by legislation or otherwise so that they will have less, how will that improve the situation?
I say to you, Mr. Speaker, and through you to the minister, that I really do think we in this House are dealing more with the symptoms that we are with the results. We are not dealing with the major issue, but we will support the bill because if it can be of some assistance then, of course, we should. But we in this House have to find a way to deal with the real problems of small business.
Small Businesses Loans Act (No. 3)
I say, Mr. Speaker, that the real problems are directly the result of the government's over-all economic policy. It is not a matter of whether or not we should have a Small Businesses Loans Act or a small business development bond. We should have those things, but by themselves they are cosmetic. We must confront the fundamental problem and we will not do that by going home for the summer, much though I think everyone here deserves to do that. But we will not be able to confront the problem by being away until October. I am not preaching for another session, believe me, but I am saying that when I look at this legislation and consider the impact it will have, and when I look at the over-all government economic policy and I consider that it will in itself destroy much of what this is intended to help solve, then I have to think the government is wrongheaded and does not understand. Or, if it does understand, then for some reason which escapes me it has chosen to disregard the current economic difficulties of this country which are-well, I was going to say almost the government's sole responsibility, but I think that is unfair. Certainly there is an impact from what happens outside the country, but the problems are such that, at least in part, it is within the ability of the government to find a solution.
The government has a number of options open to it which could help stimulate the consumer end of the marketplace. By so doing it would make it possible for small business people to generate the revenue necessary to continue to provide the goods and services they can and should be providing.
So while it is clear we support this bill, we do so only because it is one of a number of measures which may be of some marginal assistance. But the over-all problem cannot be solved in this piecemeal way, with a cosmetic effort. The overall problem rests squarely in the lap of the Minister of Finance (Mr. MacEachen), and I suggest to the minister responsible for small business that it is to the Minister of Finance that he must make his earnest plea. This country and its businesses cannot survive unless we are prepared to change the economic direction the country is taking.


Mr. Deputy Speaker:: There was a suggestion by the minister that the motion be amended to refer the bill to a Committee of the Whole House. Is there unanimous consent?


Donald Alex Blenkarn: Agreed, after we have finished our speakers.


Mr. Deputy Speaker:: Fine. I just thought this would be a convenient time to put the motion, and the debate can continue on the motion to refer the bill to the Committee of the Whole rather than on the present motion before us.
Therefore, the motion is amended as follows: Mr. Lapointe (Charlevoix), seconded by Mr. Pepin, moves that Bill C-122, an act to amend the Small Businesses Loans Act, be now read a second time and referred to a Committee of the Whole.


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Order, please. It being one o'clock, I do now leave the chair until 2 p. m.
At one o'clock the House took recess.

July 23, 1982
19646________________________________________
Small Businesses Loans Act (No. 3)


[Stage Direction]
AFTER RECESS

The House resumed at 2:00 p.m.
William James Kempling: Mr. Speaker, I am pleased to say a few words on Bill C-122 which will amend the Small Businesses Loans Act. It does so by extending the termination date for loans to be guaranteed from June 30, 1982 to March 31, 1983. The fact that this bill was brought in today, July 23, approximately 23 days after the guarantee of the government for loans has expired, is an indication, at least to me, that the government really does not have too much concern for the small business community. I say that with no reflection on the minister. I believe the minister is an honest person and that he tries to do the very best he can for the small business community under the conditions under which he has to labour.
Let me return to comments made by some other members regarding the rate that small-business men have to pay for the loans they get under the Small Businesses Loans Act. Initially the rate was set by statute. The rate set was below the lowest rate which the banks had for their best accounts. Consequently, hardly anyone could get a loan under the Small Businesses Loans Act. In fact, the whole thing used to be quite a joke. We used to ask the minister of finance, who was John Turner at the time, "What are we going to do about the Small Businesses Loans Act?" Small businessmen used to go into their banks only to be told that they, the banks, had never heard of the Small Businesses Loans Act. If they were not told that, the bank officials would say that they had to get a hold of head office because they did not know anything about the act at the branch.
The minister of finance would tell us that he was having lunch with the chairman of the Canadian Bankers' Association and that he would mention the problem. I can just imagine the difficulty of small business people getting loans under the Small Businesses Loans Act being discussed between the shrimp cocktail and the double martini. That was just a lot of nonsense. We would ask the minister again and we would hear him ask for the name of the bank and the branch and that he would look into it. At that point we began to flood him with names of branches that were befuddling their customers.
Finally, the criteria for establishing the interest rate were changed and the act was amended. It was decided to take a selection of government bonds and to have the rate equal to the average yield of those bonds. It was rather a complicated formula, but the bottom fell out of the bond market and the rate was lower than ever. The banks complained that it was their money that was being lent and there was no way they would be lending at 1 per cent or 2 per cent below what they gave to their best accounts. The situation fuddled-duddled on for a number of years. Finally, the act was amended and we saw a sudden upsurge of loans under the Small Businesses Loans Act in 1978. That is just a little of the background to the Small Businesses Loans Act, but that game playing has gone on for at least ten or 12 years. In those days the only people who got a loan under the Small Businesses Loans Act were the best customers of the bank.
I recall visiting with a small retailer who was well financed, long established and did not need money under the Small Businesses Loans Act. He told me that he had just got a loan under the act. He was very happy, but he was surprised to get it. At the time bank managers were giving out these loans as a kind of prize. The minister of finance had leaned on the banks and they decided they would give out a certain percentage of loans across the country, which goes to show a lot of game playing was going on.
I want to address myself to some other aspects of the Small Businesses Loans Act and perhaps I can make some suggestions to the minister. It is in the small business community that the beginnings of a recovery in our economy will take place. If our economy is going to recover, that is where it will start. Recovery does not commence with megaprojects. I was really astounded to hear the Minister of Industry, Trade and Commerce (Mr. Gray) say that the government was looking into a $500 million investment in Airbus with some European manufacturers. The recovery will begin with the small business sector of the country.
It is stability of the economy that we require. If we look at it broadly, we will see that usually when the economy turns down most small-business men retain their staff because the most important thing they have is people. Of all the products they have, people are the most important. They have to compete with large enterprises for people. In order to keep their enterprises going they retain people, whether the economy goes up or down. This imparts tremendous stability on the economy of the country.
The government must recognize that there is no shortage of entrepreneurship, innovative ability or inventiveness in the country, but there is a shortage of venture capital to get things going. The Small Businesses Loans Act is too restrictive in terms of capital expenditures.
I have spoken on this matter many times before. I have suggested to the government that at least the Small Businesses Loans Act could be expanded. On March 31, or hopefully before that date, when this matter comes up again, I hope we can broaden it somewhat. For instance, I would like to see the act expanded to allow small-business men to purchase technology or patents which are already in operation. There is a lot of patent technology available for small-business men to purchase and produce in this country. Also I would like to see it arranged that a small business loan could be acquired for the registering of a patent. It is most important that some means or mechanism be found to allow them to do this.
The minister said that he was setting up a committee to study the financing of small businesses. He does not have to do that because there are enough people, as the hon. member for Mississauga South (Mr. Blenkarn) said in this Parliament, such as John Bulloch's progressive organization, the Canadian Federation of Independent Business and other small business organizations in the country, who have studied the matter to
July 23, 1982

death. They know how to finance small business; they know what is required.
The difficulty is that the only place where small-business men can go for any kind of term financing today is the banks. They used to be able to go to professional people who had funds available to invest, but that was before the days of the capital gains tax. Now that we have a capital gains tax some of the funds are siphoned off. Today, with the government paying 19.5 per cent on Canada Savings Bonds and such, what is the percentage in taking a flyer on a small business venture or new idea? Investors can put their money into Canada Savings Bonds at 19.5 per cent. There is no risk; they can just sit back and clip coupons. Why take a chance unless there is opportunity for unusual gain?
We must find a mechanism to get money into the small business sector. We should allow innovative individuals and inventors to use the Small Businesses Loans Act to finance some of their research and development, to acquire a patent which is already in place, or to register a patent on their inventions.
Let us take a look at what is imported into the country. It is absolutely amazing. We do not have to start a buy-Canada project or to wave the flag. We should just make facilities available through adjustments in taxation, and we will be amazed at what will happen. Today the Canadian dollar is selling at quite a discount. It is a disaster to some people who are importing; it is an advantage to some people who are exporting. But there is a strategy which can be used. There are various products shipped into the country which can be had on a licensing arrangement. The easiest thing in the world is to go to someone with a product who wants to ship it into Canada. When he looks at the tariffs, the freight rates, the discount on the Canadian dollar and the laid down cost of the product in our market, he suddenly realizes that there will not be a very great sale for the product, but he wants to move into the market perhaps to take advantage of some of the worldwide advertising which would be involved.
I know this method works because I have done it myself. We should go to companies and say that we would like to make their products available in Canada under licence. We could give them the reasons and show them the numbers. But we are not doing this because the required venture capital is just not available.
I am suspicious of committees. The minister floated out the idea that the committee would be studying the financing of small businesses, their problems and so forth. 1 will be very surprised if anything comes of it. 1 think it is just a typical bureaucratic manoeuvre-here is a problem, everyone is pressing on it, let us put it out to a study group. We will never hear about it again. If we hear something positive from it, I will be the first one to congratulate the minister publicly. I can almost wager that nothing will really happen; it will just be another report.


Mr. Irwin:: You have been in opposition for too long.
Small Businesses Loans Act (No. 3)


William James Kempling: The hon. member for Sault Ste. Marie (Mr. Irwin) says that I have been in opposition too long. I have made more positive suggestions on legislation in the House of Commons than he has in the time he has been here. If he wants to look at them, they are on the record.


Jean-Luc Pepin: Including metric.


Ron Irwin: You are too busy talking. You do not listen.


William James Kempling: I knew this would happen sooner or later.


Jack Sydney George (Bud) Cullen: You can handle it.


William James Kempling: I have broad shoulders and can handle it. I am not too concerned about it. The thing I might say about metric is that I was honest in what I said. I have never seen a more dishonest approach taken to this subject matter than the tactics which were used by the government on its introduction of metric. I do not want to talk about metric now because another bill is before the House. On another occasion I intend to lay out the comments of the Minister of Transport and of all his colleagues who misled this Parliament.


Ron Irwin: Resign.


William James Kempling: Just a moment. I will not say that he was dishonest, but I will say that perhaps the thrust of the government of the day was as the minister stated and it was not the intention to make it compulsory. I think that was an honest statement. He went out and said that in all honesty, but down the line the entire game plan changed. Thus, my comments on metric were made in that atmosphere. I do not deny them; I said them. They are on the record. But I have never seen such dishonesty in the representation of those comments as I have seen in some of the letters to the editor which have been quoted broadly across the country. I realize they are using me as a sucker,
Having said that, I want to return to the subject or else you will call me back to it, Mr. Speaker. In 1979 I believe we had the beginnings of a solution to the problems of financing small businesses through the Small Business Development Bond. 1 would hope that the minister would look into that device again and urge the Minister of Finance (Mr. MacEachen) to introduce something similar to it once again. This is necessary because we need a source of investment capital beyond the banks. It makes no sense simply to tell small-business men to go to the bank and pay their rates. They need another source of funds either through a Small Business Development Bond or some other instrument, as has been suggested by many small business people, so that they can acquire funds through various sources where the interest on those funds is tax free. Small businesses need a device for obtaining funds at a lower rate than is available at banks.
The money is available. It is common knowledge that there is more money on deposit in the chartered banks of this country on a per capita basis than in any other country in the

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Small Businesses Loans Act (No. 3)
western world. Canadians are very good at saving their money. In times of high inflation as exists today, people are squirreling money away in large amounts. We must find a mechanism to encourage people to withdraw their savings so they can be put to use to employ people and develop services which are so vitally needed in this country.
This country will survive despite our present economic conditions and despite the mismanagement of the government opposite. Our country is too strong to fail. We still have talented people although they have been somewhat disheartened by the conditions we are in. There is no shortage, however, of people with novel ideas and those who are adventurous. I am dismayed, though, at the number of people who say that they would give up on Canada and move to the United States. I urge them to stay and fight the battle because I believe our future is unparalleled.
The engine for the recovery of the economy of Canada is the small business sector. I have talked to small business entrepreneurs and they do not want the government in their pockets or on their backs. They do not want a large bureaucracy which requires the completion of so many forms. I have told the story many times of when I sat in my business office, where I had two large stacks of paper on my desk. One stack consisted of a pile of forms from Statistics Canada. I had to decide whether I would work on that pile or go through the other papers which could possibly yield a profit on which I would pay a tax. I had to make a decision since the pile of paper from Statistics Canada was growing. Since I am a very practical person I went to the local stationery store and ordered a rubber stamp which said "Not Applicable". With the red stamp pad which I purchased I stamped the words "Not Applicable" on that stack of Statistics Canada forms. I opened a file and put my copies in it and sent the originals back to Statistics Canada without even putting a stamp on the envelope.
In due course I received a computerized letter from Statistics Canada which said "We are in receipt of form No."- whatever the number was-"which we understand is"-and they had written in the word "Not Applicable". It was signed with a scribbled signature. We simply put that letter in the file. When the next form came in I again stamped it "Not Applicable" and returned a copy of the letter. Through this process we managed to cut down our Statistics Canada paper over a 14-month period.
I am not suggesting that this is the solution to the problem. I merely give that as an example of what happened and still occurs today. If the minister wishes to form a committee to look for practical solutions, I would suggest that he set up a committee comprised of someone from the Department of National Revenue, an official from Statistics Canada, someone from the Department of Finance as well as representatives from some large accounting firms so that they can devise a simplified accounting system for the small retailer and small-business man. This system would easily allow the small entrepreneur to make use of the statistics that he desires and when he makes his annual return he can supply a form which has the statistics that Statistics Canada require. This would be
a step in the right direction and would help small entrepreneurs in the operation of their businesses.
In 1979 my colleague for Capilano (Mr. Huntington) was the minister of state for small business. I will not cast judgment on the present Minister of State for Small Businesses and Tourism (Mr. Lapointe) yet since he has some time to go in his job. As I say, I believe he is honest and trying to do a good job in difficult circumstances. The hon. member for Capilano who was the minister in 1979 had a clear understanding of the concept of how to run the small business ministry. I was most heartened to see his approach to small business and encouraged by his receptiveness and understanding of the ideas received from the small business community. In the short time he was in office he set it on a good, straight course.
When the hon. member for Capilano took office he found the affairs of that ministry appalling. The government had been masquerading under the title of small business ministry because it consisted of a minister, a speech writer, a public relations person, a couple of researchers and a secretary. That was the extent of the small business ministry. Obviously, when we would ask questions we would get "nothing" answers from the minister because his department was just window dressing with little substance.
In summary, there is no shortage of entrepreneurs and inventors and innovative people with ideas in this country. However, I am sorry to say that many of them are leaving to go to the United States. I have interviewed a number of these people during the years I have been in Parliament and have listened to the difficulties they have had in trying to obtain money.
For example, I spoke to an entrepreneur in 1978. He came to my office to tell me that he had a very fine mechanical elevating device used in building maintenance. He could not seem to convince anyone in the banking system to advance money to him to begin his venture, so he decided to take his model to a trade show in the United States. He found many interested people there and signed four of them as distributors while taking an order for about 15 of these devices. He returned to his local banker and said, "I have these orders. They are worth a few hundred thousand dollars". The banker said, "They are no good to us as collateral until they are accounts receivable". He would not give him any bridge financing or any funds to build the devices.
This entrepreneur then went back to his distributors in the United States to tell them what happened. Those distributors said, "Come to New York state, we will arrange to have a plant built for you". Therefore, he took this device from Canada to the United States. It is now being produced in the United States and is imported into Canada. This story happens time and time again. I am not blaming the government but I am saying that the engine is there, the ingenuity is there, the businesses are there and the ideas are there. There must be some mechanism to finance those businesses so they can begin to produce and hire people to develop and sell products.
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I want to say a final word on research and development because I myself have engaged in a number of R and D projects over the years. What turns off research and development projects is not the lack of ideas, as there are many kinds of ideas, not the lack of engineering ability or anything of that type, but the lack of cash. One day one's comptroller or accountant says, "We have to pay bills and we have a payroll to meet. Now we will have to make a decision. Either you stop that gimmick that you are developing and let us use the money to pay our bills and our payroll, or we cannot continue." That is what really happens. If one knows where to look, one can see all sorts of partially completed ideas which are very good and would have a market, but they are stalled for lack of cash.
1 have put this idea forward on a number of occasions and I will state it briefly again. We should allow the small business community, those who have the capacity in the field of manufacturing, to undertake research and development projects and allow them to accumulate funds which they can deduct from their tax payment. We can devise the mechanisms for it, but that money should be specifically set aside for research and development projects. When there is sufficient money, they should be able to draw on that money, just as one can with a registered retirement savings plan. There should be the same concept for research and development. If one has a pretty good idea as to what it will cost to develop somehing, one should be able to draw down the money and get the project under way, knowing that one has the cash to complete it. One should not be able to use that cash for anything other than that research and development project. There should be a linkage mechanism with the Small Businesses Loans Act so that one if one finds oneself in the position where the project is almost complete but a little more money is needed to complete it, one can complete that project and get it out into the marketplace.
That is the sort of thing which must be done and a whole bunch of government grants would not be necessary. All that is needed is to put an administrative mechanism into place to allow that to happen. Whether or not the government holds the R and D money is really beside the point; the administrative details can be worked out. But I tell hon. members that we must have some means whereby the cash is available to complete these projects; otherwise the promoters will leave Canada and go to the United States, Great Britain and to other countries. We will lose those projects and end up importing many of those great ideas back into the country.
I have spoken for about 30 minutes of the time allotted to me in this debate. I know we have agreed to pass this bill in all stages and that there are other hon. members in the House who wish to make a contribution. Therefore, I thank Your Honour for your kind attention to some of the thoughts I have put forward in a positive and not critical sense. 1 hope some of them have been considered and that they will be explored a little further. Like all my colleagues, I am always available to discuss them in more detail with the minister or members of his staff at any time.
Small Businesses Loans Act (No. 3)


Mr. Marcel Dionne (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, if we listen to the official opposition, there seems to be no end of problems in this country. I would like to say a few words about the need for amending the Small Businesses Loans Act, since Bill C-122, an act to amend the Small Businesses Loans Act, is extremely important at this time. First, 1 should like to say a few words on our past experience, which has in fact been quite good for small businesses, and on the financing situation, to which the member for Burlington (Mr. Kempling) was referring earlier when he said that there was a considerable problem in getting lenders to offer loans to small businesses. Well, Mr. Speaker, in 1981, although there were problems, it seems the number of lenders other than chartered banks rose from 762 to 1,286. I do not know whether that could qualify as a problem, but I think there has been a good deal of progress in this area, and since the government is guaranteeing these loans, I believe that lending institutions other than banks will become more and more numerous. I should also like to say a few words about the act's historical background, the amendments made since 1961 regarding eligibility and reasons for application, and certain results which came to light during the last financial year and which were very encouraging.
The Small Businesses Loans Act came into effect in January, 1961, and its initial purpose was to encourage private lenders to provide fixed-term loans for small businesses. The act, which provides the lender with a guarantee against all losses, was initially to be effective for three years and was subsequently renewed at regular intervals. The act now in effect actually expired on June 30 of this year, and as the minister pointed out this morning, the act was to be extended for nine months so that it would expire at the same time as the legislation on loans to farmers and fishermen.
Since 1961, many amendments have been made to the act, and I shall name a few of the more important ones. In 1974, the maximum amount of loans repayable by any borrower was raised from $25,000 to $50,000 to allow for the expansion of the small business sector, an increasingly encouraging factor which required broader credit margins. In 1977, the maximum permissible loan from any lender was raised to $75,000 and the business turnover figure was raised to $1,500,000. In January, 1978, the interest rate formula was amended to allow lenders to charge prime plus 1 per cent. In 1978, responsibility for administering the act was transferred from the Department of Finance to the Department of Industry, Trade and Commerce. In 1980, the amount of the loan offered by any lender was raised from $75,000 to $100,000. Mr. Speaker, further changes are expected, since an advisory committee has been formed to review all aspects of this legislation.
Under this legislation all Canadian chartered banks are deemed to be lending institutions. As a result of the amendments made in March, 1970, the scope of the act was enlarged

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to include credit unions, Caisses populaires, trust companies, insurance companies and finance companies which are eligible and apply for designation by the minister. There have been many changes and those who were eligible were people in manufacturing, wholesale trade, retail trade, service businesses, communications, construction and other fields.
Naturally, there have been changes as well in the reasons why people submit applications, and loans may now be approved for purchasing real estate or movables, improving or modernizing facilities or premises, buying or building accommodation and even acquiring land. This has been a net improvement because the act has evolved with time and, as other members pointed out earlier, it will continue to evolve and to adjust to the needs of the very important small business sector. Particularly in Quebec, people are aware that small businesses play an extremely active role in our economic development and that they create hundreds of jobs. Mr. Speaker, during that short time period, under the Small Business Loans Act, 99,500 loans have been granted so far, for a total value of roughly $2 billion. In 1981 alone, 16,942 loans were approved for a total of $501,000. I have other figures which concern Quebec more particularly.
In 1981, 5,431 loans were approved as compared with 5,188 in 1980, an increase of 4.7 per cent. Even more encouraging is the fact that those loans amounted to $124 million in 1980 and about $147 million in 1981, up 18.8 per cent. This upward trend can be explained by the fact that many more lenders invaded the market to provide assistance to small businesses, particularly since the loans were fully guaranteed by the government, and I think that additional funds will be available for small businesses. As was stated before, I think that the extension of this act and the possibility of amending it further in the future deserve special consideration, particularly in 1982. Like all hon. members, I would be pleased if Bill C-122 were to be adopted as soon as possible so that it can benefit small businesses throughout Canada.


Thomas Scott Fennell: Mr. Speaker, 1 apologize for not being here, but the previous speaker did end rather more quickly than 1 was told he would.
I am delighted to speak again on small business. My colleague for Mississsauga South (Mr. Blenkarn) mentioned earlier that we have discussed this act three times during this session. 1 was hoping there would be an improvement this time. 1 must admit that when I looked at the loans made under the Small Businesses Loans Act, the majority were under $20,000. Perhaps that is adequate.
Yesterday I was supposed to speak on the closure motion regarding the borrowing authority, the second borrowing authority this year. It is interesting that the numbers are so out of line one with the other when you consider that the small business people create employment in this country, yet we have to put so much into government to keep it going. Perhaps the
numbers got switched around and it should have been $11 billion for small business and $1 billion for the government. We did get it down to $7 billion for the government, so that was an accomplishment.
I am amazed at this bill. It is now July 23 and the act ran out on June 30. What is going on in the minister's department that an act would be allowed to run out before new legislation is brought into the House? It does not make sense; there is some incompetence somewhere. Somebody in that department does not care about these matters. In the future when the minister wants an extension, he should bring in a bill ahead of the fact rather than after the fact.
The minister told us today that he had conceived a new small business proposal and that there would be a nine-month gestation period. I do not know what he is going to study. Small business has been thoroughly studied by two small business organizations. Many suggestions have been made in this House of Commons, particularly by my colleague who spoke ahead of me, with regard to an over-all global program for small business. I have spoken at least four times on small business.
The problem with the small business sector of our society is that we continually talk about debt financing. When you get into debt financing at interest rates that small business has had to endure recently, it does not allow small business to expand or to be created. If a person with some savings could get a 20 per cent return by investing in a small business, that would be all right. However, why risk putting money into a small business when you can get 20 per cent from the federal government?
We must address the matter of equity financing. The former parliamentary secretary to the Minister of Finance, the hon. member for Ottawa Centre (Mr. Evans), and I have had discussions in the past on equity financing. We both agree that there has to be equity financing. However, we have a different viewpoint as to how it should be approached. He had a good suggestion, that of bringing the FBDB into equity financing. I object to that because I am worried that it will create a new bureaucracy. Small business does not need any more red tape. However, it may be a beginning.
He suggested that it could be like the CDC where there is private as well as government participation. When it reaches a certain point, you could sell that small business development corporation and it would become a public vehicle held by a number of small investors.
We both acknowledge that we come from a different philosophical base. I would rather see this done with incentives through our tax system. I would like to see some of the incentives that were in the tax system put back in. The small-business man cannot do it with debt financing alone. The average person does not have enough money to set up a business that will sustain itself without outside financing. Where the small-business man really needs help is during the early days of formation when cash flows are not adequate to
July 23, 1982

service the debt. That is the critical period I have spoken about many times.
The minister mentioned today that these loans are principally for expansion, extension of a plant or new plant equipment.
I understand why the loan is so small. Not many people are thinking of expansion; they are looking for survival. Today in small business it is a question of survival. An industry cannot be expanded if it is laying off employees and its sales are down. Our problem is that we have not provided proper incentives to people to start industries. Whenever people have had marvellous ideas they take them straight down to New York state, where they receive tax incentives, free plants and tax write-offs for a number of years. That is where our small industry people are going. With the dollar at the price it is today it should be now-today-that we have great incentive programs to get small business going. Small businesses could be doing well right now. With our cheap dollar we could be replacing imports with Canadian manufactured products. These products could replace imports which cannot be sold economically.
I think we have to move a little faster than the gestation period offered by the minister. I ask that he put together a task force of members of the House of Commons. There are many members here who have run their own businesses. I am not talking just about manufacturing businesses. We have storekeepers here and we have farmers who were small-business men. Farmers make up probably the largest single group of small-business men in the country. We have expertise right here and we are not using it. That is one of the weaknesses of this Parliament. Our committee system is far too partisan, and we are not allowed to have the input which would be of benefit to the country.
Let us look at the various programs across the country. There is the SBDC in Ontario. It has not been a great success, but it has been a beginning for venture capital. Why do we not integrate that program with the programs in the other provinces into one over-all global program which would really help this country start manufacturing products rather than exporting raw materials?
1 am particularly pleased that we have this type of plan. I was not altogether in favour of the Chrysler and Massey guarantees, but I have to acknowledge that they were economically sensible. They kept people employed. Rather than paying out unemployment insurance benefits, we kept people busy. In the case of Chrysler, I have said many times that if anybody could turn that company around, Lee Iacocca could. He has, and 1 congratulate him. I give Victor Rice an immense amount of credit for his work with Massey-Ferguson. That man looks like an old man. I thought 1 had aged since coming to the House of Commons, but he has aged much more in a much shorter period of time. He put his entire body and soul into the survival of Massey-Ferguson and, because that is a very important old Canadian institution, 1 am glad we have helped it. I think it is very important to help a major Canadian
Small Businesses Loans Act (No. 3)
multinational, but I do not believe we are doing enough to help the small-business men of this country produce products.
The minister said he has a very small staff supervising this program. With the expertise of the banks and all the book work done by the banks, how could he justify a large staff? Perhaps all this work could be done through the banks. The banks have great financial professionals to analyse and assess. Surely the minister has as much staff as he requires for the entire program to which he is referring and which is now in its gestation period.
We increased the amount involved in this legislation from $75,000 to $100,000 on one of the last occasions we dealt with this legislation. If we increased the amount to $250,000, that would be a more realistic amount. I acknowledge that the majority of loans under this legislation are under $20,000, but with a loss factor with respect to these loans of eight-tenths of 1 per cent, we could afford to do much more.
I am afraid the minister and many of his colleagues are dreaming of economic recovery. I believe in Canada. The matter is beyond dreams; it is a matter of doing something and getting the show on the road. We do not need any more studies of small business. There have been many case studies of small businesses in Canada. The University of Western Ontario has been doing such studies for some 25 years. We do not need studies, we need action, and we need a comprehensive plan together with tax incentives put forward by the Minister of Finance (Mr. MacEachen).
We have a serious problem in Canada. We must get savings out of people's socks and out of banks. Those savings are not producing jobs. Small business creates 66% per cent of the jobs in this country, and we must provide tax incentives to encourage Canadians to invest in their own country and not in government bonds and government treasury bills.


Peter Elzinga: Mr. Speaker, in speaking to Bill C-122, to amend the Small Businesses Loans Act, I think it is noteworthy that this legislation will simply extend the termination date for loans to be guaranteed under the Small Businesses Loans Act from June 30, 1982, to March 31, 1983. One has to question why this legislation has not already been passed. One must wonder about the planning of hon. members opposite. It is sloppy mismanagement not to have this legislation passed already when, in reality, the termination date has passed. I do not say this to be critical of the Minister of State for Small Businesses and Tourism (Mr. Lapointe) because I have travelled with the minister on occasion and I commend him for the work he is attempting to do for the small business sector. Unfortunately, he is not getting the support of his colleagues in the cabinet because very little has been done for the small business sector.
1 spoke about and dealt with a number of specifics when the piece of legislation referred to by the hon. member for Ontario (Mr. Fennell) was before the House-that measure was to increase the amount to be made available to the small business sector-so rather than deal with a number of specifics as to how we can directly help the small business sector, what 1
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Small Businesses Loans Act (No. 3)
want to do is deal with the broader situation as it exists in Canada today, because this does have a direct impact on the small business sector.
The small business sector is the greatest employer of all sectors in Canada, other than government. It is sad when we have to look to government as the largest employer in this great country, because the fact is that the small business sector has brought this country to where it is today. It has developed what we have and many of the benefits we enjoy today.
Because of the disastrous economic planning of hon. members opposite, there is rage in Canada today. There is a deep feeling of rage. In many areas it is still latent rage, but when that rage reaches a certain state, I quite frankly fear for the lives of some of the ministers opposite, including the Prime Minister (Mr. Trudeau). I find that frightening, and I honestly hope it will never reach the stage in Canada where individuals would attempt to take out their rage in a destructive way. However, lack of sound economic policy by the present Liberal administration is causing great damage to the lifestyles of Canadians across this great land of ours.
Last Friday I had nine appointments in my constituency office. Of those nine, eight came to my office to express their concern about what is happening in this nation because they themselves were going bankrupt. One individual had a small paint business. Another had a small trucking firm. Another person had just lost his job because the electrical company for which he had been working had gone bankrupt. What are these people to do? How are they to survive? The government is asking individuals to exercise restraint to the tune of 6 per cent next year and 5 per cent the following year. I commend it for that, but the sad part is that it is not willing to exercise the same restraint. Last year, budgetary expenditures increased by 20 per cent and the year prior to that they also increased by 20 per cent. What kind of guidance is that to offer to the Canadian people-asking them to exercise restraint when the government does not do so itself?
I should like to refer to an article which appeared in The Globe and Mail on June 26, 1982, on the theme that recovery has no chance if the Prime Minister (Mr. Trudeau). I think that is appropriate at the moment when we are dealing with something that relates to the small business community. It indicates where Canada has been brought under the leadership of the Prime Minister and asks us all to consider where we are at the end of 14 years of rule. I say rule rather than government because this cabinet and the Prime Minister have not governed Canada; they have ruled Canada. They have not permitted participatory democracy. Even though our dollar has recently started to rise, it had reached its lowest level ever experienced in our history. The unemployment rate is in excess of 10 per cent.
I have always had a great deal of respect for the Minister of Transport (Mr. Pepin), Mr. Speaker, but I find it a little disconcerting to see him laughing when I am talking about individuals losing their livelihood-


Jean-Luc Pepin: It has nothing to do with you. I was laughing at one of your colleagues.


Peter Elzinga: According to federal estimates, our national debt will reach some $122.7 billion this fiscal year. The cost of servicing this will consume 22 per cent of all federal spending.
On November 12 the Minister of Finance (Mr. MacEachen) budgeted for a deficit of $10.5 billion, but in the June budget that deficit was announced as being close to $20 billion. Inflation is running at the rate of 11.8 per cent. The National Energy Program, coupled with the collapse of the many megaprojects, is pushing our goal of energy self-sufficiency out of sight. The National Energy Program and the Foreign Investment Review Agency have sent out clear signals to all foreign investment that it is not welcome in Canada. All we have to do is look at the cash flow difficulties we have experienced. Traditionally, on a yearly basis, we have had a cash outflow of $2 billion, but last year the outflow was in excess of $10 billion. Corporate bankruptcies have increased from under 4,000 in 1977 to a current annual rate of 12,000.
As the hon. member for Ontario (Mr. Fennell) said, the largest small business sector in the country is probably the farming sector. Last year farm failures had increased 66 per cent over the previous year. Bankruptcies are continuing at a record pace within the farming sector and in the small business sector. The Department of Consumer and Corporate Affairs reported that 215 farmers were forced out of business by June 30, which is 60 per cent more than in the first half of last year. In fact, there were only 261 farm bankruptices in Canada during all of last year, but if present trends continue, that figure could be surpassed next month. The total net income of the farming sector will be 17 per cent less than it was in 1981.
All this is due to Liberal economic policies such as the National Energy Program launched in October 1980. That program has resulted in Canadians paying 70 cents per gallon more for gasoline and in a potential loss of some 325,000 jobs.
On November 12 the Minister of Finance stumbled into his budget which resulted in the tripling of the number of bankruptcies in the country, in record high unemployment and a record low dollar. Will the budget brought down on June 28 put forest workers back to work? Is it going to help farmers keep their land? Is it going to put the automotive workers back to work? Will megaprojects come onstream again? Will it promote exploration off the east coast? None of these things will come about as a result of the budget brought down in June and nothing that has happened in this House in the last two years has been of benefit to Canadians at all. In fact, the planning has been disastrous.
The Fraser Institute in Vancouver produced a very interesting study of taxation levels. The average Canadian family with a cash income of $22,500 paid income taxes of $3,345 in 1980. Other taxes, ranging from oil and motor vehicle taxes to amusement and property taxes, accounted for an astounding 70 per cent of the average family's total tax bill. Since 1961 the tax bill of the average Canadian family increased by 515 per cent while total family income has only increased 344 per
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cent. This information is contained in the report of the Fraser Institute in Vancouver.
The hon. member for Wellington-Dufferin-Simcoe (Mr. Beatty) who has a number of questions on the Order Paper, has given us a clear indication of why taxes have increased. We only have to look at the horror stories of government waste. Many of my colleagues have indicated this to the Chamber in the past, but I believe some incidents bear repetition.
Between March 1, 1980, and May 31, 1981, the government paid some $3.5 million for taxi fares. The largest single bill for any government department was, perhaps appropriately, for Transport Canada whose bill was $422,000. At the current Ottawa taxi rates this would be enough to go around the world 120 times.


Jean-Luc Pepin: I am mystified.


Peter Elzinga: The Canadian people believe the minister is mystified. All they have to do is to look at the economic management this government has offered them in the past two years. The minister or his department spends $422,000 on taxi fares.


Jean-Luc Pepin: In comparison to what?


Peter Elzinga: What we are doing is asking the minister why it is necessary to have that expense of some $422,000 for taxi fares.
1 am sorry, if the minister would like to speak, I am more than happy to relinquish my time so he might ask a question.


Jean-Luc Pepin: Keep on.


Mr. Munro (Esquimalt-Saanich):: He is just a cynic; do not pay any attention to him.


Peter Elzinga: Another typical example of government waste occurred between March, 1980, and June, 1981, when the government spent some $16.7 million on telegrams, cables and other wireless communications. The post office itself does not trust the mail as it spent some $260,000. In fiscal 1981-82 11 government departments spent a total of $10.4 million on hospitality; food, booze and entertainment. We would like to have an accounting of that because we feel this is a prime example of government waste and we would like to see it done away with, especially during the economic difficulties facing Canadians.
We hear so often from the other side, Mr. Speaker, that we in the opposition have not offered constructive proposals. Well, it is very easy for us as Conservatives to point back to what we did in that short period of time we were in government. I just might do that later on, but 1 would like to deal with the report put together by this party after we held hearings across Canada over the November 12 budget.
The report, aptly entitled "They didn't ask us", made a number of recommendations based on a nationwide gathering of thought and ideas as to what we should do as a government.
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These recommendations are the first step forwards assuring Canadians long-term economic development, and I would like to share them with the House today.
We indicated in the report that the first point would be to restore individual and investor confidence by establishing a climate for growth, development and expansion. We indicated we should withdraw totally the November 12 budget and replace it with an economic plan which would promote job creation and development through private investment. That is exactly the opposite of what this government has done. We indicated that we should get moving on major national projects to stimulate the economy, create jobs and meet urgent national and regional needs. Point four was that we should restore harmonious federal-provincial relationships and ensure adequate federal funding of provincial health, education and other important social programs. We also wish to reform the budget process to ensure that full public discussion of significant tax changes is ensured so that individuals and companies can assess their impact and plan for their implementation.
These recommendations, Mr. Speaker, deliberately did not provide detailed plans or remedies for our economic salvation. Before we can devise specific policies and programs there must be fundamental changes in attitudes and psychology. Cooperatively, we must work together as a government and individuals to discover and implement economic solutions. We would also recognize and create an entrepreneurial culture which would permit our economic strategies to work. We must restore public trust and economic confidence. Without them we will not be able to unleash the initiative of the Canadian people themselves which is needed, as one expert who appeared before the committee put it, "to reintroduce market forces and profitability". Without this change in attitudes and psychology, we ourselves will be defeated in dealing with our economic situation.
When we were in government for that very short period of time, Mr. Speaker, we changed more than the faces of government. We changed the economic philosophy, spirit and direction of the government. This philosophy was borne out by our intention to create new wealth through the private sector and through a series of measures to reduce the deficit and build on provincial and regional strength, rather than fighting with our provincial colleagues. We wanted to develop measures to develop human resources. We adopted a six-point national economic development strategy to provide a structure and foundation for the government's support of economic advancement. Measures undertaken within the perimeters of each of these points serve to highlight the differences between what we stood for as a government and what the governing party, the Liberals, stand for.
Rather than go into any detail I just wish to mention the six areas so that they are on record. The six cornerstones of our policy are: one, an economic partnership; two, a reliance on private enterprise; three, innovation, productivity and investment; four, building on provincial and regional strength; five,

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economic infrastructures; and six, human resource development.
We had started to take steps in this area during the period of time we were in government, and it is interesting to note that even though we were in reality reducing government spending and the deficit, the Social Policy Planning Board of Canada indicated that our budget was the most socially progressive budget introduced in Canada in the past ten years. We were simply eliminating a great deal of government mismanagement. In addition to that, we were helping those who required help from their federal government. I am more than happy to go into specifics but I know there are a number of members who wish to participate in this debate, so I will just say that our policies reflected our deep belief in the worth of individual Canadians and their ability to develop themselves and also to develop a sound economic policy.
We in Canada enjoy many benefits, more than any other nation in the world. We have an abundance of natural resources, and on a much greater scale we have a great potential for human development, and we in this party wish to see that development occur. Even though I wish we could have served a great deal longer in government, I am thankful we had that period of time so that we could draw a comparison between what we did in government and what is being done now. All we have to do is to look at the record of the present administration to find that they have given us record government spending, record budget deficits, record high unemployment, taxation, inflation and interest rates, and that our dollar has reached a record low level. 1 ask members opposite: what are you doing to help the pensioner other than limiting the indexation of their pensions? In reality, you are going to reduce the income of those individuals who built this country, and some help that is. I ask the minister responsible for small business what policies he has advocated since he has had this portfolio other than gutting the Small Business Development Bond? I hope the blue ribbon committee set up by the Minister of Finance in his recent budget will come forward with some positive recommendations for this sector which needs help so badly.
We in this House, Mr. Speaker, so often find ourselves philosophically at opposite ends. I would like to share with the House my reasons for believing strongly in the individual initiative of Canadians, the so-called free-enterprise system. It cannot be denied that public opinion has been moulded into an anti-capitalist mentality. John Galbraith, who in my opinion is living proof that economics is an inexact science, has written a book called "Economics and the Public Purpose". He has researched the market arrangements of our economy and says it has given us inadequate housing, a terrible mass transit, poor health care and a host of other miseries. For the first time, to my knowledge, Mr. Galbraith comes out from behind the white cloak of liberalism and openly proclaims that the only answer to our problem is socialism.
Well, he deals in fairy tales, as do our Liberal friends opposite. This system of ours, the so-called free-enterprise system, is gradually shifting to a socialistic state under the leadership of our present Prime Minister. In the 1900s a majority of people lived below what we consider to be the poverty line; two thirds of them lived in substandard housing. Today, Mr. Speaker, the figure is less than 10 per cent. Ninety-five per cent of the people in Canada today have a daily minimum intake of nutrients essential to maintain health. Ninety-nine per cent of Canadian homes have gas or electric kitchen appliances. Ninety-six per cent of homes have TV sets. There are thousands of automobiles and trucks owned by our people, all of them on your street every day when you are in a hurry. Some people will point out that this is evidence of our materialism, but we have been the most generous of people. We have shared our wealth widely among our people, and we support with voluntary contributions various churches, libraries, symphonies, operas and non-private theatres.
If Mr. Galbraith is right, Mr. Speaker, and socialism is the answer, we do not have to theorize about it because we have a concrete example that we can look to for comparison. We can be just like that very great nation, Russia, rich in natural resources, with 250 million capable people and 60 uninterrupted years of socialism. As I say, we could be just like them; all it would require is a little bit of doing. To be like them we would have to cut our pay cheques by 75 per cent, move thousands of workers back to the farms, abandon two thirds of our steelmaking capacity, destroy thousands of TV sets, tear up miles of highway and railroad tracks, junk 19 out of 20 automobiles, knock down 70 per cent of our houses, and rip out 90 per cent of our telephones. Then all we would have to do is to find a capitalist country to sell us wheat on credit so that we would not starve.
That is why I believe in our free-enterprise system and that is why I think we who have the opportunity to serve in Parliament have to offer incentives rather than handouts to our small business sector.
Unless this government opposite comes to grips with the sad state of the economy which is affecting not only our small business sector but our pensioners and home owners, the rage which is evident in Canada is going to break out. As I indicated earlier in my remarks, that rage is going to explode. Quite frankly, it is evident when one enters the Parliament Buildings on a daily basis that the security people in the House of Commons are concerned about the explosion of that rage. One only has to see the Prime Minister entering and the increased number of security staff around him. I would hope that individuals like the Minister of Transport and the minister responsible for small business would react positively to the deep concerns evident right now throughout the population of Canada.


Mr. Jack Shield (Athabasca):: Mr. Speaker, Bill C-122, an act to amend the Small Businesses Loans Act, really does not address the problems facing small business across Canada. All
July 23, 1982

we are really doing is extending from July 1, 1980, to March 31, 1983, the Small Businesses Loans Act. Instead of bringing legislation forward in this way we should be bringing it in to assist small-business men in a genuine way. The problems facing small business today are due to government economic mismanagement, and it is forcing many businesses and farms into bankruptcy.
I think all members know full well that a farm operation is a small business in the truest sense of the word. In 1981 a record 8,055 businesses were forced to close their doors forever. Business bankruptcies in 1981 were 22 per cent higher than in 1980, and 43 per cent higher than in 1979. That should tell everyone in this House that there is something serious going on in the business community across Canada.
We all know, Mr. Speaker, that the individual businessman, the small entrepreneur, the little storekeeper, the barber shop and so on, provide fully 55 per cent of all employment across the country. We become alarmed when General Motors, a very large corporation, has to lay off people. We become alarmed when a mining operation in the northern part of Canada closes down and lays off people. I say to you, Mr. Speaker, that the underpinning of our whole economic system is the small-business man and the farmer. Yet we can read the statistics supplied by StatsCan into the record time and time again and very little alarm is expressed. What kind of things do we hear? Well, there is a downturn in the economy. There is a problem facing the country. Well, maybe they were not good managers. Maybe they did not work hard enough. Mr. Speaker, I say to you that the small-business men with whom I am acquainted all put in a tremendous amount of effort, time and work in order to make their businesses go. You have to be impressed with the long hours those individuals spend in their businesses to try to make them successful. It might be a small corner grocery store employing four or five people, or it might be a small restaurant employing five or ten people. All of these operations contribute more to the over-all economy of the country than one of the large businesses that we hear is in the midst of a downturn and is laying off personnel. These small businesses are the ones that provide the jobs necessary for our young people to learn what it is like to work when they first start out working after school and on Saturdays. This also applies to the young lady and young man who leave school to go to work. Yet we are not alarmed at the present state of affairs. In 1981 a record 8,055 businesses were forced to close their doors forever. Business bankcruptcies were 22 per cent more numerous than in 1980, and 43 per cent more numerous than in 1979. These are alarming figures.
What do we do to assist the small-business man? What can we do to tell him that we really appreciate his having taken a gamble, putting his investment money into a business and employing five, six or seven people. We really reward the small entrepreneur. How do we do that? The Minister of Finance (Mr. MacEachen) brings in a budget that attacks the small remuneration or the perks, if you will, that a small-business man gets. For example, the small-business man, because of this budget, can no longer buy a car in the company name. He
Small Businesses Loans Act (No. 3)
cannot put it in the name of this little grocery store, his restaurant or his hardware store because that car is now considered part of his wages. The government does not consider that a man or a woman may have to work 16 or 18 hours a day to make his business operation viable. The government does not stop to consider a team of a husband and wife who work 16 and 18 hours a day and employ three or more other people who have to remit to the government the necessary unemployment insurance deductions, the necessary pension deductions and the necessary income tax deductions. Small business people are collecting tax. They become collectors. But no, the government does not consider that. It does not consider that a businessman is now paying himself the minimum wage in order to survive because he has to pour everything back into his business. Instead, the government thinks that the small-business man might be getting away with driving a pickup truck, that he might use it to get his own mail or he might use it on a Sunday to take his wife and family on a little picnic. Because the businessman is doing that, the government has to watch what he does. The government considers that the businessman and the farmer are ripping off the country by having a tax loophole. The government fails to remember that the small-business man is drawing the minimum wage for himself and his family, on which the government taxes him. The pickup truck becomes imputed, and it is as though it is received as income. That is how we reward the initiative of the individual coming out of school who said that he wants to be independent, go into business and build something for himself. That is what this country was made of. This country was made by those who did not want to work for somebody else but who wanted to get out and do it for themselves.
The same could be said of the farmers. There are many young lads who say, "That is for me. I want to be productive. I want to grow food for the nation and for the world." But what do we do for them? We should bring in a bill that addresses the cost of fuel and fertilizer and recognizes the fact that if these people do not produce, we do not eat. The cost of farm fuels is creeping up to where it takes 40 per cent to 45 per cent of all productions costs. Do hon. members know that 40 per cent to 45 per cent of all farming costs are fuel related, either in tractor fuel, fertilizer, or pesticides? And we wonder why farmers are going bankrupt.
Let us take a look at and put some more statistics on the record. Let us go back to 1981. A record 8,055 businesses went bankrupt and closed their doors forever. That includes farms. In 1982, in the first five months alone there were 4,429 bankruptcies. Already in the first five months, there have been over half as many as for the whole of 1981. That is an increase of 36 per cent over the first five months of 1981. It is an increase of 55 per cent over the first five months of 1980. Those figures are alarming when we consider that over 55 per cent of all the jobs from Prince Edward Island to Vancouver Island to the Northwest Territories and the Yukon are created by small-business men. These are not rich businessmen but small, little fellows.

July 23, 1982
Small Businesses Loans Act (No. 3)
We are bringing in a bill that will help 5,000 businessmen because we are extending a loan guarantee that is controlled by the bank. The banks says they can give a loan of one per cent above prime on $100,000. The government will guarantee it. Five thousand businessmen will be helped. But that does not help them. They still have to pay above prime for the money they have to borrow, and they will float their inventory.
Why are we not bringing in legislation to extend the Small Business Development Bond which was introduced by the Conservative government, which is now reluctantly being carried forward by the present government to assist businesses going bankrupt? Why is the government not considering extending the Small Business Development Bond to an extent that would allow the small-business man to borrow at half prime plus one or two per cent? This was a tax measure, and all it did was to disallow the small-business man from claiming interest as an expense on his operation. Because the bank was lending money at half prime plus one or two per cent, depending upon the bank, that was brought in as a dividend from the small business and it was taxed at a different rate from that of the bank. We all know the problems the banks are facing today.
Surely it makes no difference to the government if this small business development bond is used for healthy and viable growth of a company. Why is it being used only for businesses on the verge of bankruptcy or with severe financial difficulties? What businessman would want to walk into a bank and say, "I would like a Small Business Development Bond application; I want to apply because I am having serious financial difficulties"? This is not what they want to do. We should have legislation before the House which makes the Small Business Development Bond available to healthy and viable companies, not a piece of legislation which means absolutely nothing. It would be an extension of a program which has been in operation for years and affects at the most 5,000 businesses across the country at any one time. Actually, in Toronto alone there would be 5,000 businesses. I just do not understand.
Mr. Bergen Mr. Speaker, 1 rise on a point of order. I know the hon. member would not want to mislead the Canadian public. He referred to a figure of 5,000 businesses which had benefited from the program in the past year. The number of loans approved during the past year was 16,942. It was substantially more than 5,000.


Jack Wendele Shields: I said that in Toronto alone there would probably be 5,000 businesses.


Thomas Scott Fennell: Or in Montreal.


Jack Wendele Shields: In Montreal or in Calgary, wherever. Hon. members opposite must recognize that there are more than 16,900 businesses across the country. In the fishing industry alone-and we must consider freshwater and saltwater fishermen as small-business men-there are more than 16,000 businesses. Then we could include farmers and small grocery stores. The point I am trying to make is that there has been a
minimal amount of help. Bill C-122 is offering a minimal amount of help.
We should be directing help through the small business development bond. I think the hon. member would probably agree that we are not using the resources we have in the Small Business Development Bond. In fact, the Minister of Finance attacked that bond, thus kicking small-business men. I received at least 14 to 18 telephone calls from small-business men in my constituency who had applications ready for approval under the Small Business Development Bond. When the minister brought in his budget last November, he totally wiped them out, he totally killed them. They could not keep up with interest rates when they went up to 20 per cent and so on. All of them did not go under, but perhaps half of them did.
They are not using their heads in this regard. They have allowed these kinds of things to happen. I should like to refer to small business bankruptcies in the primary industry, which includes farmers. In the first five months of 1980 there were 122 bankruptcies. In the first five months of 1981 there were 183, and in the first five months of 1982 there were 266. It seems to me that in the primary sector, which includes farming and food production, there is a crisis approaching that is not being addressed. We have heard talk about an energy crisis, a currency crisis and so on, but if we lose the primary sector, we do not eat. We cannot eat oil.
Now let me turn to the statistics in terms of small business bankruptcies in the manufacturing sector. In the first five months of 1980, 239 businesses went bankrupt. In the first five months of 1981, there were 240, only one more, and in 1982 they almost doubled to 418. These statistics are alarming.
In the construction industry, 586 small businesses went bankrupt in the first five months of 1980. In the first five months of 1981, they went down by one to 585, and in the first five months of 1982, there were 685 bankruptcies. I hope hon. members find these statistics alarming.
In the first five months of 1980, 195 small businesses in transportation, communications and utilities went bankrupt. In the first five months of 1981, 202 went bankrupt, and in the first five months of 1982 there were 305 small business bankruptcies. As I say, I find these statistics alarming. We are not addressing this problem in the House. Certainly it is not being addressed by the government in Bill C-122, to extend a program which affects 16,000 businesses across the country. It will not do anything for them.
Let me turn to small businesses connected with trade. In the first five months of 1980, 970 businesses went bankrupt; in the first five months of 1981, 1,059 went bankrupt; in the first five months of 1982, 1,374 went bankrupt. The graph is going up and up. What will happen when I stand here next year to talk about the first five months of 1983? We are in serious trouble.
If hon. members opposite accept the proposition that small businesses provide 55 per cent of all jobs across Canada, then they must accept the proposition that we are in serious difficulty. The government is not doing anything to assist small-business men to keep them viable and to keep over 50 per cent
July 23, 1982

of the work force employed. This is to our peril. I do not care what the government wants to do, but it cannot create a Crown corporation like Petro-Canada to look after all shoe repair shops, all groceries stores, all barber shops and all other small businesses in the country. We must keep small-business men healthy and viable. If we do not have a healthy business community within the community as a whole, we do not have a healthy country. Small-business men are the ones to whom the service clubs go. They are the ones who coach minor league hockey teams or peewee ball teams. Hon. members opposite should go out there to see who sponsors such teams. In essence, small-business men determine whether or not we have a healthy Canada.
I would like to turn to small businesses in finance, insurance and real estate. In the first five months of 1980, 107 small businesses in finance, insurance and real estate went bankrupt. In the first five months of 1981, 103 of these small businesses went bankrupt. In the first five months of 1982, 197 small businesses went bankrupt. I guarantee to all hon. members that in the first five months of 1983 in the finance, insurance and real estate field they will see that figure of 197 go up as high as 500.
It is a reflection of what is happening in our economy. The real estate and insurance markets are dropping because people are not buying homes. Nor will they be buying homes with the $3,000 grant such as the one the minister presented to someone in Edmonton. It is baffling how they picked that individual because the forms for the home owner grants are not available in any of the offices. The minister must have picked him out of the blue.
In the service industry there were 646 businesses that went bankrupt in the first five months of 1980. In the first five months of 1981, 892 service industry businesses went bankrupt, which was an increase. In the first five months of 1982, 1,184 businesses went bankrupt. Hon. members become alarmed when they see General Motors, Massey-Ferguson or Sherritt Gordon laying people off, but they fail to remember that 55 per cent of all the jobs in Canada are created by the small business sector.
What is the government doing to help those small businesses? Absolutely nothing. What can we do to help small business? The Canadian Federation of Independent Business has told the government that it is having too many problems dealing with government and its regulations in order to remain viable. That is why that federation approached the government. In personal interviews with 11,800 small and medium businesses which were conducted in the third quarter of 1980, one out of every ten identified government regulations, red tape and paperwork as the most important problem. This concern received the fourth highest response from those 11,800 small businesses. The three concerns which preceded that one were financing and supply, skilled labour and inflation.
Small Businesses Loans Act (No. 3)
Financing, supply, skilled labour and inflation are perennial problems in any business.
It appears that these problems are becoming worse despite the efforts of the paper burden controller's office and the good intentions of both levels of government. It is considered a serious problem. Let us review some of the departments that small-business men indicated could greatly assist them. There is the federal sales, customs and excise tax. We can expect taxes to burden the small-business man and take up much of this time, but we should not expect this to happen to the point that it is creating-


Charles Lapointe: Mr. Speaker, I rise on a point of order. I am sorry to interrupt the hon. member but I would plead with him that at five minutes to one this afternoon we came to an agreement among all parties that we will deal with all stages of the bill before four o'clock. It is now five to four. I would ask the hon. member if he would be in agreement for us to proceed with the Committee of the Whole stage and then third reading.


Jack Wendele Shields: Mr. Speaker, I do not know how these agreements are arrived at.


David P. Smith: Through your House leader.


Jack Wendele Shields: Our House leader is not here.


An hon. Member:: He is so. So is your whip.


Jack Wendele Shields: With the exception of our Quebec members, the vast majority of those polled said that federal paper work caused more problems in its burden and regulations than the paper work of provincial or municipal governments.
Outside Quebec, the percentage of respondents placing the blame on Ottawa ranged from a low of 62.6 per cent in Saskatchewan to a high of 87.1 per cent in Prince Edward Island. In Quebec, 74.6 per cent felt that the greatest burden was inflicted by the provincial government compared to 25.2 per cent citing the federal level.
While it is not surprising that Revenue Canada's requirements affect the most people, the extent of their impact is dramatic. Forty-six point seven per cent of respondents listed taxation measures as affecting them the most. Most small-business men said that taxation measures affected 46.7 per cent the most.
What are we trying to do to assist the small-business men? Absolutely nothing. We have virtually killed the Small Business Development Bond, it is now only available to those small businesses that are facing dire straits or are ready to go bankrupt. Do you want to hear about the type of paper work that a small-business man is faced with?


Mr. Benjamin:: No.


Jack Wendele Shields: They include federal sales, customs and excise tax, manpower training, apprenticeship programs, federal income taxes, unemployment insurance record in employment, federal employee deductions, income tax, UIC and CPP. What about Statistics Canada? If you were a small-business man you would know that the biggest problem and the prime

July 23, 1982
Small Businesses Loans Act (No. 3)
question that he asks is, "Why should 1 fill these forms out, because no one uses the information that is provided? If they do, I never know, as a small-business man, why they want me to fill out these forms."
The second biggest complaint of the small-business man about filling out government forms concerns the required information, because it is too complex, requiring the small-business man to spend hours and hours to fill out these forms for some bureaucratic department.
The third complaint is that the information required is too costly to provide. In other words, a small-business man spends hours and hours in his job but must take the time, or hire someone, to fill out the forms that a government bureaucracy requires. But one of the most serious problems of all, and I have been on the receiving end of this, is that when one sits down to fill out these forms, very private, pertinent information which should relate only to that company, one finds that it is Statistics Canada that wants it. What guarantee-


The Acting Speaker (Mr. Blaker):: Order, please. I am sorry to interrupt the hon. member for Athabasca (Mr. Shields), but pursuant to Standing Order the Chair must now indicate that the time for private members' hour has arrived. However, I understand from various informal discussions that there may be a wish on the part of hon. members to put this bill through all stages. If that is the case, I think it requires only an indication that the House wishes the Chair not to see the clock in terms of private members' hour until such time as the bill is put through all stages.


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Blaker):: Is there unanimous consent that the bill be referred to Committee of the Whole?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Blaker in the chair.
@Deputy Chair(man)? of Committees of the Whole: Shall Clause 1 carry?
On Clause 1-


Peter Elzinga: I have just one very brief question, and I regret very much that the minister responsible for this legislation has not given it enough priority to even stay in the House for the completion of third reading.


Ian Deans: Wait a minute. That is not fair.


Peter Elzinga: But perhaps another cabinet minister who is present could answer my question. It is a very simple one. Specifically, what legislation of a substantial nature has the Minister of State for Small Business introduced which is of benefit to the small business sector other than legislation increasing the amount available for borrowing from $75,000 to
$100,000 and pushing forward the termination date of this particular legislation? Has he introduced anything else, or does his record speak for itself?


David Berger: Speaking on behalf of the minister, Mr. Chairman, the small business investment grant was a measure included in last June's budget.


Peter Elzinga: We have not got the legislation yet.


David Berger: I wanted to correct a point raised earlier by the hon. member for Mississauga South. This grant can apply without any prior legislation under the two loans made under the Small Businesses Loans Act, under the act which we are presently passing, which adds to the urgency of extending this act. The small business investment grant is covered by Treasury Board Vote 5, which is already in effect and, as such, does not need specific legislation since it is a fiscal measure. The expenditure will also have to be approved in supplementary estimates and will need the approval of Treasury Board. But I understand that the Canadian Bankers' Association met with the department and is ready to start extending loans under that budgetary provision. If it is not ready, it will happen by the end of this month.


@Deputy Chair(man)? of Committees of the Whole: Shall the clause carry?


Some hon. Members:: Agreed.
Clause 1 agreed to.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and passed.
The Acting Speaker (Mr. Blaker):: It being four o'clock, the House will now proceed to the consideration of private members' business as listed on today's Order Paper, namely, public bills, notices of motions and private bills. Before going further,
I should indicate that there may be an informal agreement to consider all stages of Bill S-29, but for the moment, I will proceed with the necessary details to get us into private members' hour. I will now recognize the Parliamentary Secretary to the President of the Privy Council (Mr. Smith).


PRIVATE MEMBERS' PUBLIC BILLS
The Acting Speaker (Mr. Blaker):: Shall all orders preceding No. 76 stand by unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Blaker):: I understand that there is an informal consent to proceed with Bill S-29. Of course, the Chair is in the hands of hon. members, but I will recognize, for that purpose, the Parliamentary Secretary to the President of the Privy Council (Mr. Smith).
July 23, 1982


David P. Smith: Mr. Speaker, I believe, if you seek the consent of the House with regard to Bill S-29, you will find there is an understanding that we deal immediately with all stages of this bill, without debate, and then we will proceed immediately to the private members' bill standing in the name of the hon. member for Prince Edward-Hastings (Mr. Ellis).


THE RAILWAY ACT
Mr. A1 MacBain (Niagara Falls) moved: that Bill S-29, an act to amend the Railway Act, be now read a second time and referred to Committee of the Whole.


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee reported, read the third time and passed.
The Acting Speaker (Mr. Blaker):: May I bring it to the attention of hon. members that, pursuant to a ruling made in either June or July of 1977, when matters proceed with the unanimous consent of the House and invade the time of the private members' hour, the private members' hour is nonetheless reduced by the amount of time of that invasion. Accordingly, the House will adjourn at five o'clock.


REPRESENTATION ACT, 1980 MEASURE TO STABILIZE REPRESENTATION IN HOUSE OF COMMONS
Mr. J. R. Ellis (Prince Edward-Hastings) moved: that Bill C-276, an act to stabilize the representation in the House of Commons, be now read a second time and referred to the Standing Committee on Privileges and Elections.
He said: Mr. Speaker, the time taken away from the private members' hour this afternoon does not really cause me much concern. I will be quite brief.
Because of a problem in my personal timing, this bill is delayed in coming before the House more than it perhaps might have been. I would have preferred to have had this bill brought forward some months ago prior to a bill of a similar nature, Bill C-223, in the name of my friend and colleague for Red Deer (Mr. Towers). However, as I said, it was a timing problem on my part that held it up. As a consequence, 1 will be very brief.
The subject matter of this bill has been before the Standing Committee on Privileges and Elections. 1 would have hoped that even at this late date I might convince the deputy to the House leader that this subject matter might still go the Standing Committee on Privileges and Elections.
The basic contention of the bill is that there is absolutely no reason for increasing the number of members in this House of
Representation Act, 1980
Commons. I am going to take a moment to read into the record part of the explanation for my bill that will give some background and substantiation for that statement.
I want to point out particularly that in the bill which I mentioned a moment ago in the name of my colleague for Red Deer there is one similarity. We have both asked that the basic benchmark for determining the number of members in the House of Commons that was set some years ago, 75 members of the Province of Quebec, to be increased by four at each subsequent decennial census, not be decreased but held at 75.
The step I have taken beyond that, which is slightly different, is that the 1981 census be ignored in its entirety. Hon. members will know that the results of the 1971 census were not brought into being until 1979 so that the boundaries were not changed until eight years after the census was taken. Given the timing of the census and the timing of the next election, it is possible that new boundaries could be struck prior to the next election. That would have meant there would have been one extremely short Parliament and one long Parliament with these boundaries we now have.
1 refer briefly to an excellent column which appeared this week written by Douglas Fisher, the well-known columnist and some time ago member of the New Democratic Party who sat in this House. He points out the relevance of the possible date of the next election and that the redistribution process cannot be completed before December 1984. That is the redistribution process that would follow from the 1981 census.
We would expect that the next election will likely be held in 1984, given the last election in 1980 and the tradition of having elections approximately every four years. However, we need only go back two elections to realize that the Parliament elected in 1974 lasted until 1979. If this Parliament were to sit that long, we could be faced with a redistribution prior to the next election. That is totally unnecessary.
If that were to happen, we would be faced with the accomplished fact of an increase in the number of members in this House. I do not see that. In his speech on his private members' bill and during his appearances before the Standing Committee on Privileges and Elections, my colleague from Red Deer made a number of arguments for holding the House at the present figure or perhaps allowing it to increase by eight or ten seats.
I know that my friend opposite, the hon. member for Mississauga North (Mr. Fisher) will speak following me. I am sure he will put on record, as will my colleague from the Brampton area, the fact that they represent ridings that extend far and beyond the 25 per cent over the base that is allowed. They represent ridings that are double the population and more close to the norm that was set as a result of the 1971 census and the procedure that is followed. I hope that my colleague from Mississauga North will tell the House that while handling a constituency of that size is extremely difficult, if given the tools and the staff he would not have a great deal of difficulty.

July 23, 1982
Representation Act, 1980
After all, our colleagues in the United States House of Representatives handle in the order of 400,000 constituents. There are only two senators per state and in those states the size of New York and California, senators deal with constituencies that number in the millions. Therefore, there should be no difficulty in handling a few more thousand.
When the boundaries commission sat in the 1970s, I was quite critical. I felt they missed some of the human side of the boundaries they established. When I appeared before the commission, I asked for a change. I achieved a partial change, but the line they drew on the north side of my constituency goes right through an area that has an affinity with another area. One township north of that line could have been drawn in. There are not more than 200 people living in the entire area of three townships. It is obvious that the lines could have been drawn much better at that time. It would have given me quite a few more constituents. That would not have been a tremendous problem. Instead of the approximately 75,000 I now have, there would have been 85,000 or 95,000. In a typical urban rural riding in eastern Ontario, that does not seem to be a real problem. From the point of view of having a number of constituents, I can see no justification for having this House increase its membership.
There is another point I want to make along this line while I am speaking on this aspect of the bill. Some years ago I was mayor of the city of Belleville. As mayor, I was continually thrown into meetings with my county colleagues. The two counties which I am now proud to represent were Prince Edward and Hastings. As a result, I was always outnumbered. However, if my cause had any justification to it at all, I had absolutely no difficulty in putting my point across.
One of the arguments made by Mr. Fisher, or alluded to-I should not say it is an argument made by him because he does not put a lot of weight behind it-is that because there are only 75,000 people in my constituency, and the constituency of my friend, the hon. member for Mississauga North, has over
150,000,	his votes carry only half the weight of mine. I disagree with that argument. Frankly, it seems to me that if my colleague across the way can make his point and get his arguments through the House of Commons, his people are equally well represented, and there is no less weight behind the votes his constituents cast than behind the votes cast by people in the less-populated Prince Edward-Hastings constituency.
I argue very strenuously that this House should not be enlarged. I would not have a problem if the House were enlarged by eight or ten seats. If the evidence given before the Standing Committee on Privileges and Elections this year by the deputy to the President of the Privy Council (Mr. Pinard) is accurate, then by freezing the representation of Quebec at 75 seats, the House would increase in size by eight or ten seats.
I do see that as a problem, but if the size of the House were to grow any larger than that, I feel that would be quite unnecessary.
Surprisingly, this matter has been the subject of letters to the editor in the city of Belleville. It is not a subject matter I
thought would have caught the attention of very many people, yet Mr. Sidney Sillitoe, who was a friend for many years, without any discussion with me but, rather, in discussions with others in the city of Belleville, realized that the House would be enlarged because of the decennial census. In letters to the editor people were complaining that this should not happen. So it is that a subject which we would normally have thought would have occupied the minds only of those people within the House of Commons to varying degrees is one which has caught the interest of people within my constituency. If it is there, I am sure it is also in other places.
I want to close by saying once again that I can see absolutely no justification for having the size of this House increased, and I strongly urge members of the government opposite to refer the subject matter of this particular bill to the Standing Committee on Privileges and Elections to allow the committee to deal with it, albeit much later this year.


Mr. Watson:: Mr. Speaker, I rise on a point of order. I would like to make a suggestion to the hon. member for Prince Edward-Hastings (Mr. Ellis). I want to assure the hon. member that I agree wholeheartedly with the thrust of this bill. As a matter of fact, I voted against the legislation which is now forcing our numbers upwards after each census. However, considering that a bill similar to the hon. member's bill was referred to committee and was considered in committee, and considering that we have one member on our side, the hon. member for Mississauga North (Mr. Fisher), who wishes to make a speech on the subject this afternoon, I wonder if the hon. member for Prince Edward-Hastings would agree, after the hon. member on this side has completed his remarks, to withdraw his bill. That would be one way of finishing off a little earlier this afternoon.


John Raymond Ellis: Mr. Speaker, I thank the hon. member for Chateauguay (Mr. Watson) for his suggestion, but I think his suggestion might complicate things. After my colleague, the hon. member for Mississauga North (Mr. Fisher) has spoken, there will be some 20 or 25 minutes' debate remaining on the bill, and I think we should let it run its normal course.


Douglas Glenn Fisher: Mr. Speaker, I extend my thanks to my colleague, the hon. member for Prince Edward-Hastings (Mr. Ellis), for giving me an opportunity to talk about a very important issue to me personally. I am rising now not to make an official speech but to give my personal opinion based on my own experiences in Mississauga North.
I represent the second most populated riding in Canada. The most populated one, York-Scarborough, is held by a minister, so I suppose I hold the record as an ordinary member.
In 1980, there were 93,000 voters registered in my riding. That is the firmest evidence I have of its size. They were registered voters and, of course, on top of that there are all the children, all the non-citizens and all the people who were missed on the list. The estimate in the newspaper the other day indicated that there are approximately 190,000 people in my
July 23, 1982

riding. On top of that, just to let hon. members know some more details, my constituency is an area of very rapid population expansion. Recently, the city of Mississauga approved three new subdivisions, which will bring a total of 25,000 new homes into my area. Those homes will be added before we have an opportunity to redistribute the riding. Assuming that there will be two or three people living in each of them, I will have a gigantic riding by the time redistribution gets around to me.
I do not care whether we add more members to this House of Commons or whether we do some kind of shuffling, but certainly people in my area are mistreated by this system, and I hope to put that argument forward and to prove my case. It is that opportunity I appreciate today.
There are three electoral problems facing my riding. The first is that the general political workload involved is very, very heavy. I personally have no problem with that. In fact, the opportunities to go to spring festivals, parades, community centres and all sorts of community events help me to break down the anonymity of my riding. The political work is my work. I chose Mississauga to run in, and I am happy to represent the area. I am delighted all that work is there.
There are two radio stations, a very effective cable television station and four neighbourhood newspapers, all of which help me to break down the size of my constituency. We have ongoing neighbourhood and volunteer groups which help me to become known to people and to work on their problems. The political work is my responsibility, but I remind hon. members that on other occasions and in other precedents the workload facing hon. members has been considered a reasonable justification for giving members additional resources. I will come back to that point.
The second problem facing the people in my area is that their individual problems are difficult to communicate to their Member of Parliament. Because my area contains so many people and because of its size it is hard for the people to get in touch with me. When the people do get in touch with me, they have a difficult time making their cases, simply because of the workload. I do not know what happens in the offices of other hon. members, but my office has kept track and has found that in busy periods during the winter it is very common for us to receive 50 telephone calls a day dealing with personal problems. When people telephone me and say, "Doug, you are doing a lousy job", I feel that is an opinion, so I do not include that in that count. However, people telephone me and say, "Doug, I want to get my grandmother into the country. She lives in India and is having a difficult time because of our demands with respect to immigration." That is a problem which requires a great deal of work in order to serve the constituent properly. I take that very personally. I do not think that is a partisan issue. I do not think that is an opinion. That is an obligation on me as a Member of Parliament, and I cannot always carry out my responsibilities fully, simply because of the demands that are made. In my office I maintain two full-time people. We have three telephone lines coming in. Another person works half the week in my office. All of this is paid for out of the budget of the House of Commons, although
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my riding association makes a contribution because the House of Commons budget cannot cover it all. We keep the office open from nine o'clock until five o'clock every day and there is a telephone answering machine for the evenings and the weekend.
Because we are talking about large ridings we should realize the cost involved. One cannot hope to keep up the work with the resources now available, which are based on the experience of smaller areas.
Finally, we have the important question of representing the voice of our people in government. According to the chief returning officer, the average riding had about 55,000 registered voters in the last election. My riding had 93,000 people. They have a diluted voice in Ottawa, and I am sorry about that. But the one-man one-vote principle has been tested over and over again and is diluted in these circumstances. We heard that effectiveness and hard work by the MP would offset this imbalance. The hon. member for Prince Edward-Hastings made that point, and of course he is right. A good, strong, clear voice will carry a long way. But he overlooked the fact that in politics ultimately it is numbers that count. Two votes are more than one, and in politics the number of votes decides issues. That is an important principle, which is being diluted by the fact that my riding has one member for 93,000 voters while the average riding has one member for 55,000 voters. That represents a dilution of impact in my area.
We have acknowledged the one-man one-vote principle in our processes and we try to come as close as we can to it. The decade-long cycle is too cumbersome and too slow, however. In trying to be absolutely fair and prevent abuse, we create unfairness through delay. I think the ratios could be corrected in one way or another if we acted more quickly.
Let me give an example of this, Mr. Speaker. There was a general census in 1971 which led to the decision on redistributing the electoral boundaries in 1975. Those new boundaries were to come into effect in the next general election. As we all know, however, in 1978 in York-Scarborough a byelection was fought on the basis of the old boundaries. Today, that same area is represented by three Members of Parliament. The process is too slow and cumbersome, Mr. Speaker. In 1978 the voters from what is today Don Valley East, York Centre and York Scarborough all voted in that one byelection.
In 1971, Mississauga was one riding. It was fought and won by my Liberal predecessor, the hon. Tony Abbott in 1974. In 1979 it was split in two, and in 1980 when I fought the election the area was big enough for three ridings. Yet 1979 and 1980 is when the new boundaries came into effect. There is too great a gap between the census and the enactment of the new boundaries, Mr. Speaker. I am concerned that this cycle will be repeated over and over again.
We have had the 1981 census, and the estimates are that it will be 1985 before the new boundaries are applicable. If the normal electoral cycle is followed, that means that the new

July 23, 1982
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boundaries will not come into effect until the late 1980s. My area will probably have three ridings and, according to the normal projection, by the late 1980s the population will be big enough to call for four ridings.
I have some suggestions to offer to help deal with this situation, and they are concentrated mainly on the problem of representation on behalf of the ordinary citizen living in a big area like mine. I believe we should recognize the principle that one-man one-vote is not enough. We should also recognize that people make work for politicians. We should put in place a separate category or riding-the big riding, where growth and size are very important.
There is already a geographical precedent. It has been recognized that the hon. member for Western Arctic (Mr. Nickerson) has special problems and special work because of the vast area he represents. He has been given some extra resources to help him out. I think that is necessary because the geography creates extra work in his case. But people make work in politics too, Mr. Speaker. There are 190,000 people in my riding, each of whom deserves my full attention. Therefore, I should have extra resources as well.
I should like to issue a challenge to the hon. member for Prince Edward-Hastings. He is a member of the Standing Committee on Management and Members' Services. That committee deals with problems like this. A year ago I wrote to that committee and proposed that extra resources be allocated to people representing huge and expanding ridings. I presented a petition signed by ten Liberal members and I asked that two NDP members and about ten Conservative members also make representations. I was told by the hon. member for Brampton-Georgetown (Mr. McDermid) that those representations were going forward from the Conservatives, and I was told by the hon. member for Comox-Powell River (Mr. Skelly) that representations were going forward on behalf of his party. They landed in the hands of the hon. member for Prince Edward-Hastings and a few others and disappeared in a vacuum. I must say that I think it is about time that we had a report on the situation from the committee.
We suggested a very simple procedure, that the regular redistribution be supplemented with extra resources after each election. When enumeration takes place and voters lists are produced, a national average of riding size should be established based on the number of voters rather than on population. Ridings in the top ten per cent size should be allocated money to enable the MP to employ an extra staff person to deal with the burdens of the representation of the larger number of people in those ridings. Unfortunately, nothing has been heard from the committee. I would urge its members, especially the hon. member for Prince Edward-Hastings whose conscience on this issue is so clear, to give an answer to this proposal soon. I would ask the hon. member to acknowledge at least that people make work and that huge ridings have special demands.
I would be prepared to debate, somewhere else, in philosophical terms, the second question of whether the people in my riding have a diluted voice because they have only one member
for so many voters, and so on. It is an important issue which needs to be discussed. I think we all agree that the redistribution procedure, whether it adds extra people or makes a change in the boundaries, could be speeded up.
The third area where 1 indicated there was a problem was in the area of political representation. I think the cure for political problems and political representation is to encourage the good people of Mississauga North, numerous as they are, to keep on voting Liberal.


Mr. Lyle S. Kristiansen (Kootenay West):: Mr. Speaker, 1 intend to be very brief in addressing the bill before us. I would like to say I share the sentiments of the hon. member for Prince Edward-Hastings (Mr. Ellis), if we continue to grow like Topsy. This is what will happen if we do not make some adjustments to the current set-up which would see this House with something like 300, or in excess of 300 members in the next redistribution. I am in somewhat the same position as the hon. member in discussing this, and that reminds me of something which Peter Ustinov said a few years ago. 1 find myself of two minds on the subject, one more or less in disagreement with the other.
I come from a constituency called Kootenay West which currently has the smallest population of any constituency in British Columbia. It has 500 people less than any other riding in the province. I have 58,000 population, to be exact. If we were to alter the formula in the way envisaged in this bill, we would likely have to add additional population to the riding, and to many other rural or urban ridings than is presently the case, or would be, based on present census figures and the redistribution that will come as a result of it. Under the current regime the riding will have 11,000 less than the next smallest riding, although it will still come above the 25 per cent variable which applies to most constituencies across Canada.
While I appreciate the remarks of the hon. member opposite who has just spoken, it may be that we will have to give increasing consideration over the long haul to servicing those constituencies with significantly larger populations, complicated as that is because of the time lag on the census and redistribution. But we also have to bear in mind the rather unique problems that are faced, and which have been recognized in the past by those of us in rural and rural urban ridings.
My own riding encompases some 13 municipalities. One of my colleagues from Saskatchewan has a combination of 80 Indian bands and municipalities within one constituency. Those kinds of burdens also place additional responsibilities on the members who represent those areas. They are in a sense mini-republics and the consultative mechanisms that have to be put in place in order to keep a semblance of orderly communication between a member and all the component organized parts of his constituency require some additional effort, both quantitatively and quality-wise than I suspect is the case in many urban constituencies. While they may have large
July 23, 1982

numbers of people they are more homogeneous and of one mind on particular subject matters and areas.
Having said all that, I do agree with the hon. member who introduced the bill that the nightmare we can envision happening in this chamber, both physically and how it will affect other workings, is and will be getting worse and worse on the basis of the current formula. I do not think any one of us has the magic answer. It would seem to me that if we do put the kind of formula in place which the hon. member is suggesting, then we must also reconsider the variable formula and 25 per cent variance which is currently allowed as between populations of our various constituencies.
Another matter that needs to be looked at by the committee is further refinement of the redistribution process, even once the formula has been worked out. In the last redistribution within my own area, even though the process we now have is a significant improvement over the mechanism that used to take place a number of years ago in terms of sorting out constituency boundaries, I know of one situation where a community of eight people, the poll of Trout Lake, which has a long continuing historical connection with the remainder of my constituency, was suddenly put into the constituency of Kootenay East-Revelstoke. Kootenay East-Revelstoke is some 100 miles away over gravel and dirt roads. That single poll of only eight people, who could otherwise communicate back and forth with the remainder of the constituency over a distance of 30 miles, are now forced to go 100 miles in order to have anything in common at all with the constituency with which they are a part. Their only established link is that traditionally they have been serviced by the Revelstoke Post Office. This is like a Len Norris cartoon of earlier Vancouver Sun fame; the little old lady who used to cover her eyes and stick a pin in a ballot. I suspect that is the only way that kind of arbitrary decision could have been made in terms of sorting out those boundaries.
We are also left with the situation that there are two time zones within the constituency. The riding is established in this way to take in 500 people who would fit much better into the adjoining constituency. Those anomalies would not be corrected by this bill. In any continuing discussion of redistribution, I think we should be looking at that process and trying to define it a little more delicately.
Basically, I support the intent of the bill before us, as do most of my colleagues. Our overriding concern is that this House should continue to be of a size that is at least somewhat workable, both in terms of quantity and quality, so that we can do the kind of job that is expected of us by all our constituents.


The Acting Speaker (Mr. Blaker):: The Chair sees that there are two hon. members who wish to continue with this debate. In order that both members have an opportunity to speak, perhaps they will consider the suggestion of dividing the remaining time between them. The hon. member for Edmonton West (Mr. Lambert) has indicated he will speak very briefly and leave the remaining time for the hon. member for Gatineau (Mr. Cousineau).
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Mr. Nickerson:: There are three members wishing to speak, Mr. Speaker.


The Acting Speaker (Mr. Blaker):: I now note that the hon. member for the Western Arctic wishes to speak as well.
The hon. member for Edmonton West.


Marcel Joseph Aimé Lambert: Mr. Speaker, I want to thank hon. members for their courtesy. 1 certainly support my colleague, the hon. member for Prince Edward-Hastings (Mr. Ellis). I have sympathy for the hon. member for Mississauga South (Mr. Blenkarn). Years ago I had the most populated riding west of Scarborough, and I got along quite well. True enough, the demands upon the member at that time were not as great.
I think the solution lies partly in what the hon. member is advocating. I do not think the suggestion that every member should be entitled to the same number of staff and so forth is right. It seems to me that the facilities for a member should be geared to a mathematical formula based upon the size of his riding.
There is one thing which the hon. member for Mississauga South fails to realize, and that is that we do have flaws here. Prince Edward Island has four members. The total population of the province is barely over 120,000. There is the same difficulty in New Brunswick, Newfoundland, Nova Scotia and Saskatchewan. You are not going to get away from disparate numbers in any way. It seems to me that the solution lies in according facilities to a member based upon the population of his constituency.
There is one final point I should like to make. The chamber should have no more than 240 members. There has been an improvement in communications and in facilities compared with what they were when I first came to the House 25 years ago. In fact, they are incomparable. With appropriate staffing facilities, members can look after greater populations. There is no way that the Chamber can accommodate any more members in a practical sense. There is already overpressure on question period, on debating time and in committees. We must resort to silly nonsense, to the point that a member now has five minutes to question witnesses in the committee consideration of Bill C-124. If a witness takes 3.5 minutes to answer, then the time is gone.
We should reduce the number of our committees. We could handle things much better. At the present time the chamber is growing like Topsy, and I must say that the pis-aller solution which was found in the mid-1970s to deal with a totally bad system of redistribution built a Frankenstein into the system.
The contents of this bill should go to committee. I do not think there should be total discouragement of this proposal. I hope hon. members on the government side will agree that the contents of my colleague's bill should go to the Standing Committee on Procedure and Organization.

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The problems of the hon. member for Kootenay West (Mr. Kristiansen) and those who represent coastal constituencies are matters of redistribution. The people at fault are the redistribution commissioners. It is not a question of the number of seats.
Therefore I support this bill. I urge hon. members not to talk it out, but to let its contents go to the Standing Committee on Procedure and Organization so there will be a full exchange of ideas. This would benefit all members of the House. We have done that time immemorial. These proposals should not be talked out. They should be discussed in greater detail in a committee designed to look after the problems of the House.


The Acting Speaker (Mr. Blaker):: The Chair will recognize the hon. member for Gatineau (Mr. Cousineau), but perhaps I should first assure the hon. member with gout, who was inquiring, that private members' hour will finish at five o'clock.


Mr. Rene Cousineau (Gatineau):: Mr. Speaker, although it is a beautiful day outside, we are always pleased to take part in the Friday afternoon debate, and 1 am particularly interested in this one because the amendment proposed by the hon. member for Prince Edward-Hastings (Mr. Ellis) would impose a certain restriction on the province of Quebec. The hon. member claims that Bill C-276 is designed to stabilize the representation in the House. I would like to read the act as it is now and then compare it with the amendment of the hon. member. Section 51 of the British North America Act reads as follows, and I quote:
"51. (1) The number of members of the House of Commons and the representation of the provinces therein shall upon the coming into force of this subsection and thereafter on the completion of each decennial census be readjusted by such authority, in such manner, and from such time as the Parliament of Canada from time to time provides, subject and according to the following Rules:
1. There shall be assigned to Quebec seventy-five members in the readjustment following the completion of the decennial census taken in the year 1971, and thereafter four additional members in each subsequent readjustment."
Now here is the amendment of the hon. member:
All that portion of subsection 51(1) of the British North America Act, 1867, as enacted by the British North America Act, 1974, that precedes Rule 1 thereof is repealed and the following substituted therefor:
"51. (1) The number of members of the House of Commons and the representation of the provinces therein shall upon the completion of each decennial census, commencing with the census taken in the year 1991, be readjusted by the authority, in the manner, and at the time provided by the Electoral Boundaries Readjustment Act, subject and according to the following Rules respecting the relative representation of the provinces:"
He then goes on to say:
Rule 1 of the said subsection is repealed and the following substituted therefor: "1. There shall be assigned to Quebec seventy-five members in each readjustment."
And the words:
-four additional members in each subsequent readjustment-
-are completely omitted.
Mr. Speaker, it would be useful at this stage for me to go back to the time when I was a teacher as well as a notary and that I provide some background in an attempt to explain how the act and the electoral boundaries readjustment process now work. There is a brochure published by the Chief Electoral Officer entitled "Representation in the Federal Parliament" that is available to the public and Canadians would be well advised to write either to their own Member of Parliament or to any other member to obtain this very interesting publication. If I may, I would like this afternoon to tell Canadians what has happened since 1867. I am sure that many people have unfortunately no idea of what has happened. This publication says the following:
Canada owes its legislative body to the British North America Act of 1867. The Upper House, or Senate, was to include 24 members and this representation was to remain the same regardless of shifts in population. On the other hand, the number of members of the House of Commons was determined according to the principle of representation by population. This institution was to have included, "subject to the provisions of this act", 181 members: 82 for Ontario, 65 for Quebec, 19 for Nova Scotia and 15 for New Brunswick. Section 51 of the BN A Act stated that the seats in the House should be redistributed among the provinces after the 1871 census. This redistribution was to follow each decennial census, "by such authority, in such manner, and from such time, as the Parliament of Canada from time to time provides". The readjustment rules provided under the act set at 65 the number of seats assigned to Quebec, and the representation of the other provinces was to increase or decrease according to the relative number of their population. The only exception to this form of proportional representation was the one-twentieth rule under which no province could lose seats following redistribution unless the percentage of the total population of the country represented by its own population had decreased by at least 5 per cent during the period between the latest census and the previous one.
The original rules applied from 1871 to 1946, or more than 75 years. The only change made during this period consisted in adding in 1915 the "Senate rule" which provides that a province cannot have fewer seats in the House of Commons than in the Senate.
Mr. Speaker, before 1946, no maximum limit was set for the number of seats in the House of Commons. I notice that my time is nearly up, but I would like to close by saying that, in my opinion, maintaining the status quo or the formula provided in the act represents the protection which I believe we need in Quebec. I must say that if there had been a vote, 1 would have kept to this position and voted against the bill of the hon. member for Prince Edward-Hastings (Mr. Ellis) in spite of his good intentions. It still remains that maintaining the status quo is the best position that a Quebec member can take.


The Acting Speaker (Mr. Blaker):: It being five o'clock, the hour provided for the consideration of private members' business has now expired. Next week at this time I will inform the House as to the solution of the mysterious disappearance of 10,000 sheep from the Falkland Islands. In the interim, I wish all hon. members a good weekend. Accordingly, this House stands adjourned until Monday, July 26, at two o'clock, pursuant to Standing Order 2(1).
At 5.02 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, July 26, 1982