1982-12-08

MOTIONS UNDER S.O. 43   NATIONAL PARKS BANFF LAND EXCHANGE-DEMAND FOR INVESTIGATION

['No.']
Mr. Gordon Taylor (Bow River):: Madam Speaker, the hypocrisy of this Liberal Government knows no bounds. Here is one example. The Government published a booklet entitled "Guide to the Federal Environmental Assessment and Review Process" and confirmed it by legislation in the Government Organization Act in which it is stated the Minister of the Environment (Mr. Roberts) "shall initiate, recommend and undertake programs ... to ensure that new federal projects . .. are assessed early in the planning". This assessment includes up to three sequential review stages, the final one being the Federal Environment Assessment Review Office, (FEARO). Sounds wonderful, doesn't it? It would be if the Minister of the Environment followed it, which he did not do in the Banff case. Therefore I move, seconded by the Hon. Member for Lethbridge-Foothills (Mr. Thacker):
That this House abhors this hypocrisy and demands an investigation into the desecration of the park in Banff.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.



Mr. Bill Domm (Peterborough):: Madam Speaker, Small Business Development Bonds are no longer available to the small businesses requiring subsidized interest rates in the Peterborough area, and I am sure this is the case in a lot of areas across Canada. Business bankruptcies in the first nine months of 1982 were 43 per cent higher than in the first nine months of 1981, and 66 per cent higher than in the first nine months of 1980. I therefore move, seconded by the Hon. Member for Mississauga South (Mr. Blenkarn):
That the Government immediately instruct the banks to make Small Business Development Bonds available to hard-pressed businesses which are unable to pay the high interest rates now being offered by the banks.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


TRIBUTE TO FORMER OLYMPIC COMPETITORS
Mr. Joe Reid (St. Catharines):: Madam Speaker, Canadians today were saddened to hear the news of the deaths of two more Canadians who did much to promote amateur sport in our country.
Harry Jerome died a young man. He shared the world's record for the 100-metre sprint from 1960 to 1968, and set a world record for the 100-yard dash in 1966.
Reginald Dixon sailed for Canada in two Olympics. At the 1932 Olympics in Los Angeles he won three of eleven races, more than any other competitor. I therefore move, seconded by the Hon. Member for Vancouver South (Mr. Fraser):
That this House recognize the contributions made by Harry Jerome and Reginald Dixon, two outstanding sportsmen, by sending the condolences of this House to their respective families.


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


Some Hon. Members:: Agreed.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Stan J. Hovdebo (Prince Albert):: Madam Speaker, the Gilson Report recommendations on grain handling will dramatically raise costs to farmers and accelerate branch line abandonment, resulting in huge losses to farmers and their

December 8, 1982
grain-handling co-operatives. Since the Conservative Party in the West is splitting on support of the Gilson Report, with Alberta going one way and Saskatchewan the other, I move, under the provisions of Standing Order 43, seconded by the Hon. Member for Churchill (Mr. Murphy):
That this House urge the federal Conservative Party to take an unequivocal stand in favour of retention of the Crow rate and appeal to their Alberta wing not to sell out to the transport and agri-business interests who wish to abolish Crow.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


CROWN CORPORATIONS
Mr. Arnold Malone (Crowfoot):: Madam Speaker, in light of the fact that the Auditor General of Canada has proclaimed that Government auditors are frequently denied access to information required to judge whether Government money in Crown corporations is being spent with regard and respect for economy, and since the Auditor General of Canada, Kenneth Dye, has stated that he sees more merit in the previous Crown Corporation Bill introduced in 1979 by the Progressive Conservative Party under the leadership of the Right Hon. Member for Yellowhead (Mr. Clark), and claimed that that Bill "had an effective framework for the control, direction and accountability of Crown-owned corporations", and since Auditor General Dye further proclaimed that the present Liberal Government's Crown Corporation Bill "advances no provisions dealing with the audit of Crown-owned corporations", I move, seconded by the Hon. Member for Mississauga South (Mr. Blenkarn):
That the Government of the day, in keeping with the spirit and express wishes of the Auditor General, withdraw the present legislation placed before us by the Liberals and replace it with that legislation previously tabled by the Clark Conservative Government, which the Auditor General found to be more acceptable and workable.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


CHARTER OF RIGHTS
Mr. Simon de Jong (Regina East):: Madam Speaker, I also rise under the provisions of Standing Order 43 on a civil rights issue. Last week, my alderman, Mr. Harry Van Mulligan, was confronted by his employer, the Government of Saskatchewan, with a hard choice-either move to a new post in Prince Albert or lose his job. Mr. Van Mulligan had spoken out in opposition to the provincial Government's restraint program in the course of doing the job he was elected to do on Regina City Council.
The Premier of Saskatchewan has since gone on to declare that each and every Government employee who also serves his or her community on school boards, hospital boards, and even on church boards, must carefully weigh the consequences of freely speaking their minds in public. These tactics, Madam Speaker, are more suited to totalitarian, single-party states than they are to the-


Some Hon. Members:: Oh, oh!


Madam Speaker:: It seems to me that the Hon. Member is dealing with a matter which is solely under provincial jurisdiction.


Some Hon. Members:: Hear, hear!


Simon Leendert de Jong: Madam Speaker, these actions are a serious infringement of the Canadian Charter of Rights. I therefore move, seconded by the Hon. Member for Regina West (Mr. Benjamin):
That this House condemn the curtailment of basic civil and political liberties of Saskatchewan public servants by the Government of Saskatchewan.


Some Hon. Members:: Hear, hear!


Madam Speaker:: Order. 1 really have the impression that this is a matter which deals with provincial responsibility and should have been brought up in that legislature. The Hon. Member for Fraser Valley West (Mr. Wenman).


PROPOSED ESTABLISHMENT OF ASIA-PACIFIC FOUNDATION IN VANCOUVER
Mr. Robert Wenman (Fraser Valley West):: Madam Speaker, I rise on a matter or urgent and pressing necessity. Given the current 12.7 per cent unemployment rate, negative 4.4 per cent GNP growth rate and slumping production in Canada, as well as growing world protectionism in the industrialized OECD and Canada's over-reliance on resource exports and trade with the United States, I move, seconded by the Hon. Member for Vancouver Centre (Miss Carney):
That the Government move as quickly as possible to implement the recommendations of the Bruk study to establish an Asia-Pacific Foundation Headquarters in Vancouver to exploit and expand Canada's trade relations with Asian Pacific
December 8, 1982

countries in order to open up new markets for Canadian producers and thereby revitalize Canadian export trade and create new employment opportunities for Canadians.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


CRIMINAL CODE
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Madam Speaker, I would like to move a motion under Standing Order 43 on a matter of urgent and pressing necessity. Whereas it has been six and a half years since the abolition of capital punishment in 1976; whereas at that time the penalty for first degree murder was fixed at life imprisonment with no parole for 25 years; whereas that penalty was decided by a close, free vote in Parliament, with 11 persons on death row and strong pressure to increase the use of capital punishment; whereas it is recognized that the mandatory minimum of 25 years is too inflexible, and in some cases counterproductive to rehabilitation; and whereas there is no new rationale to reconsider capital punishment because, first, the rate of murder has declined since 1976; second, capital punishment is not a more effective deterrent to murder, and capital punishment is immoral, irreversible and inequitable in application; I move, seconded by the Hon. Member for Louis-Hebert (Mr. Dawson):
That the Government set up an independent review group to examine the present penalty for murder and its impact on prisons and prison populations, and to recommend new, more flexible provisions which will protect the public to the greatest extent possible and at the same time provide a greater opportunity for rehabilitation for those serving sentences in prison.
Madam Speaker:: Is there unanimous consent for this motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


AIR CANADA
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, Air Canada is not acting responsibly or fairly in refusing to offer a voluntary severance pay package to its employees covered by the IAM collective agreement, comparable to that which is being offered surplus Air Canada management
Oral Questions
employees. Yet the same economics which makes it advantageous for Air Canada to offer a "golden handshake" to management is surely also applicable to the early retirement of IAM employees, in addition to the fact that such early retirements would also ease the burden of the planned lay-off of 585 IAM employees as of January, 1983. Therefore I move, seconded by the Hon. Member for Winnipeg North (Mr. Orlikow):
That this House instruct the Minister of Transport (Mr. Pepin) to communicate to the President of Air Canada the desire of all Members of this House that IAM employees of Air Canada should not be discriminated against, should be offered a comparable VSP arrangement, and should not be asked to pay for any such arrangement by giving up other benefits just as management has not had to pay for its "Golden Handshake".


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Don Blenkarn (Mississauga South):: Madam Speaker, my questions are directed to the President of the Treasury Board who will know that last year the Government sold its interest in Consolidated Computer to the Corporation for $100,000 having blown $125 million of taxpayers' money on that company. Since Nabu has been able to turn that consolidated computer around and make a profit of over $2.3 million in less than a year, when is the Government going to realize that it cannot run businesses at all and that it would be far better off to sell those businesses it owns, or give them away if necessary, so that the assets could be used to make a profit, put people back to work, and get the country growing again?


Hon. Herb Gray (President of Treasury Board):: Madam Speaker, I am glad that the Official Opposition is now willing to admit formally that the deal we made with Nabu to extricate ourselves from involvement in the CCI situation was a good one. I am glad the Hon. Member finally recognized that.
With respect to the second part of his question, Government involvement in Crown-owned corporations involves public policy purposes. The important thing is to ensure that those purposes are effectively carried out. In some cases that will mean return of an entity to the private sector, as we intend to do with our shares in the Canada Development Corporation. So it is a matter of properly carrying out what is in the best interests of the public, and this is what we are doing.

December 8, 1982
Oral Questions


CANADAIR AND DE HAVILLAND
Donald Alex Blenkarn: Madam Speaker, the Minister will know that this House is being asked to vote $400 million for Canadair and de Havilland. He will know that his colleague in the Senate has indicated that the $400 million will not cover the hole and we will have to vote again, perhaps next March, for more millions and millions of dollars.
The Minister has been successful with Nabu, so why does he not turn around and sell Canadair and de Havilland to Canadian entrepreneurs who know how to run things, and not leave it with the Government for another great disaster such as has been pointed out by the Auditor General to the people of Canada?


Herbert Eser (Herb) Gray: Madam Speaker, Canadair and de Havilland are being run by commercial management, most of whom were there before the Government acquired the controlling shareholding interest. In any event, as my colleague in the Senate said in announcing the transfer of the Crown shares in those companies to the Canada Development Investment Corporation, one of the objectives of that Corporation is to see when there would be an appropriate opportunity for return to the private sector of companies under its management. But this involves considering when there would be an appropriate return on the Crown's investment. It obviously involves looking at the over-all situation of the marketplace, bearing in mind the over-all public policy purposes which were in effect when the Government acquired the share interest in the first place.
These companies are in many ways the cornerstone of the Canadian Aerospace industry. There are some 25,000 direct and indirect jobs involved, and I hope my hon. friend is not suggesting that we would undermine the continued existence of these jobs which are so important to these key sectors of our economy, indeed to the entire economy.


Donald Alex Blenkarn: Madam Speaker, clearly socialism does not work. Clearly, ownership of the means of production and distribution by the state do not work.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


SUGGESTED ESTABLISHMENT OF PRIVATIZATION COMMITTEE
Donald Alex Blenkarn: Madam Speaker, I have a supplementary question for the Minister. When can we have a commitment from the Government that it will set up a privatization committee which will, as quickly as possible, get the Government out of these losing businesses so that they can be turned around in much the same way as Nabu turned around Consolidated Computer?


Herbert Eser (Herb) Gray: Once again, Madam Speaker, I want the House and the public to
note the endorsement of the official spokesman of the Conservative Party for the steps we took to end our involvement in Consolidated Computer and have it involved with the Nabu company.


Some Hon. Members:: Oh, oh!


Mr. Beatty:: Read your letters.


Mr. Nielsen:: It was about time.


Herbert Eser (Herb) Gray: I should also remind my hon. friends that the reason the Crown acquired majority interests in Canadair and de Havilland was because of the state they had got into when they were under private ownership and, for that matter, foreign ownership. We do not rule out the possibility of a return to private ownership but it depends on when we can get the best return for the Crown and the terms and conditions involving the over-all protection of the public interest with respect to the health of the aerospace industry and the maintenance of the tens of thousands of jobs involved. My hon. friend and his Party may oppose that, but the workers in those companies do not oppose it, and Canadians generally certainly do not oppose it.


Mr. Clark:: Put that to the test.


USE OF FUNDS ADVANCED TO CN MARINE INCORPORATED
Mr. Tom McMillan (Hillsborough):: Madam Speaker, my question is directed to the Minister of Transport. The Auditor General's Report documents that the Department of Transport gave CN Marine $25 million as an early downpayment on the construction of the new carferry M. V. Abegweit to travel between Prince Edward Island and New Brunswick, as a means of saving the taxpayer money on the total cost of that project.
Instead of advancing the money to the shipbuilder to save the taxpayer money, as CN Marine was instructed to do, CN Marine stashed it in a bank account and reaped a windfall profit of $4.8 million in interest earned.
The Auditor General has revealed the appalling fact-


Madam Speaker:: Is the Hon. Member going to ask a question, ever?


Thomas Michael McMillan: In light of the fact that the Auditor General has revealed that CN Marine paid $163,000 to the shipbuilder to consent to the shady deal-an outright bribe-is the Minister going to call for a full public inquiry into this appeall-ing practice? What else is the Minister going to do to prevent this from happening in the future?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, I have not really had the time to go into the details of it. I am grateful to the Auditor General for bringing this matter to our attention.
Nevertheless, I have looked into it yesterday and this morning. The facts are that, indeed, advance payments were
December 8, 1982

made to the contractor. There is nothing wrong with that as a principle. The thing that one must make sure of, however, is that the interest on the money is allocated to the price of the ship, and this was done. An amount of $2,880,000 odd was credited to the cost of the ship. This is quite all right, in my view.
There might be a debate about whether one could have found a better interest rate elsewhere. I do not know, and 1 have not looked at the matter in sufficient depth to judge that. The principle of advance payments is a normal practice in these instances. The $163,000, which is one half of one per cent for the management fee, was given to Saint John Shipbuilding. In this particular instance there might be a debate about whether it should not have remained to the credit of CN Marine instead of moving to the shipbuilders, but again, this money has been accounted for.
In a word, Madam Speaker, I wish procedures had been followed in a tighter way in this matter, but up to now I do not see any scandal in what was done.


ACCOUNTABILITY FOR EXPENDITURE
Thomas Michael McMillan: Madam Speaker, 1 have a supplementary question for the Minister of Transport. The Minister is parroting the very explanation given by CN Marine which the Auditor General has described as totally unsatisfactory.
The Auditor General has made it clear that CN Marine and the parent company, Canadian National, have totally stonewalled the Canadian Government's efforts to initiate an operational audit of CN Marine to ensure that taxpayers' money is being wisely spent. When will the Minister call the corporate elite, at least the presidents of CN and CN Marine, on the carpet in his office and order them to exercise some minimum degree of accountability in the expenditure of millions of dollars every year of taxpayers' money?


Jean-Luc Pepin: Madam Speaker, as usual things are not as simple as they are made to look, particularly in a question of this kind. CN Marine has not been as open to auditing by the Government or by the Auditor General as the Opposition Member who is asking the question would have liked. The case that CN Marine makes is that, as a subsidiary of CN, it should be using exclusively the auditing firm of CN itself. There is a justification in what it is saying. To ensure that nobody will have the feeling that the Government or I am trying to hide anything in this matter, since yesterday, I asked CN yesterday to accept the idea of a comprehensive auditing of CN Marine, and CN has accepted it.
Oral Questions


FOREIGN INVESTMENT REVIEW AGENCY
Hon. Edward Broadbent (Oshawa):: Madam Speaker, my question is directed to the Prime Minister. Everyone knows that the Government has been going all over the world undermining FIRA, promising foreign countries that legislation will be introduced or that legislative changes will be made which will weaken FIRA. The code word for this process has been, of course, to make FIRA more efficient. The Minister of Finance repeated that euphemism earlier this week.
Considering that foreign-owned firms import four times as much into Canada as do Canadian companies-that is to say they export thousands of Canadian jobs-will the Prime Minister assure the House that he will implement what was promised in the last Throne Speech, namely, a commitment to strengthen FIRA to provide more Canadian jobs, instead of the reverse?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, 1 would disagree with the Hon. Leader of the New Democratic Party in that he is implying that we are trying to weaken FIRA. The position of the Government is not to weaken FIRA; it is to make it more efficient. I stand by the words spoken by the Minister of Finance and various other Ministers on that subject. We are effectively trying to make sure that the screening process will ensure the objective of FIRA that any foreign investment will be for the benefit of Canadians but that indeed the screening process be conducted efficiently. That is the state of our policy now. It is not correct, as the Leader of the New Democratic Party said, to say that Members of the Government are going around the world saying that they will weaken FIRA or make it disappear.


John Edward Broadbent: Once again, deliberately or not deliberately, the Prime Minister is misstating reality.


BUDGET PROPOSAL
John Edward Broadbent: Madam Speaker, will the Prime Minister not acknowledge that in the last budget introduced in the House there was a specific provision designed to weaken FIRA, to make it possible in terms of regulation change for foreign companies to buy up, without going through any review process, all kinds of additional companies at fire sale prices in Canada, and that if the regulations remained unchanged they would not be able to do so? Will the Prime Minister deny that? If he will not deny it, will he give assurances in the House that the proposal made in the last budget will be withdrawn?


Pierre Elliott Trudeau: Yes, Madam Speaker, I will deny that. The proposal made in the last budget is intended to make the administration of FIRA more efficient. It is not intended to weaken FIRA by changing the threshold. Permitting an accelerated review does not mean that there will not be a FIRA process. It means that the FIRA process will be more expedient and more efficient.

December 8, 1982
Oral Questions


John Edward Broadbent: The Prime Minister knows as well as anyone else that, according to the process mentioned in the budget-and I assume he is now being corrected by one of his Ministers-a number of companies will be exempt from review. That can only mean one thing-a weakening of F1RA, and the Prime Minister should acknowledge it.


LAY-OFFS ANNOUNCED BY FOREIGN-OWNED COMPANIES
John Edward Broadbent: Madam Speaker, we have seen just in recent weeks that foreign-owned firms certainly do not have a commitment to jobs in Canada. For instance, the Iron Ore Company in Quebec has laid off hundreds of workers, and Bowater in Newfoundland has also laid off hundreds of workers. Both companies have made millions of dollars in profits. Considering this is the reality about the performance of such companies in Canada, will the Prime Minister implement what he promised, not only in the 1980 election campaign but also in the last Throne Speech, that is, to bring measures before the House specifically designed to strengthen FIRA?


Pierre Elliott Trudeau: Madam Speaker, the examples which the Hon. Member gives are somewhat misleading. It is obvious that some foreign-owned companies are laying off workers, but so are Canadian-owned companies. Strengthening FIRA now would do nothing about the specific cases he quotes.


John Edward Broadbent: What about the next ones, though?


Pierre Elliott Trudeau: The next ones, Madam Speaker, 1 have dealt with in answering the Hon. Member's two previous questions.


John Edward Broadbent: No.


Pierre Elliott Trudeau: We are not weakening FIRA. We are making it more efficient. Increasing the threshold above which companies are examined for their investment intentions does not mean that we change the spirit of FIRA; it means that we will be able to deal with the important and the big cases more expeditiously. That is the object of it.


John Edward Broadbent: Black is white, too.


THE CONSTITUTION
Mr. Dennis Dawson (Louis-Hebert):: Madam Speaker, my question is directed to the Right Hon. Prime Minister. In its decision on Monday, the Supreme Court of Canada rejected the appeal launched by Quebec in which it claimed to have a veto right. As a result, a number of Quebecers again have the feeling they were betrayed by the other provinces and the
Federal Government. Can the Prime Minister inform the House whether the case is closed or whether the Federal Government can be expected to reiterate the offer made in Victoria and rejected by Quebec, and rejected by Quebec once again during the last round of constitutional talks? And now that the courts have dealt with the case, is the political debate expected to resume, and is there a chance that the subject will be put on the agenda of the Constitutional Conference that is already scheduled, in order to prove to Quebecers that the Federal Government is still interested in this matter?


Pierre Elliott Trudeau: Madam Speaker, regarding the second half of the question, the provinces are aware that the Constitutional Conference next March will be held specifically to discuss matters relating to native peoples. The agenda is open, and officials from the various provincial governments and our federal officials are now trying to determine the items that will be put on the agenda, which means that the provinces are free to make suggestions for discussing various constitutional matters, including the amending formula. I do not know whether the Government of the Province of Quebec, after abandoning its veto right, will now try to get it back.


Mr. La Salle:: It never had one, according to the Supreme Court's decision!


Pierre Elliott Trudeau: The Member for Joliette says that it never had one. It never had one because it never wanted one. The Member for Joliette ought to know that at least since 1968, our Government has been trying to get an amending formula that would have given Quebec a legal veto right. We did this because we wanted it to be enshrined in the Constitution. However, in April 1981 the Parti Quebecois Government joined the other provinces in saying that all provinces should be treated the same, and the party to which my hon. colleague, the Member for Joliette, belongs, fought the Government's draft proposal for a veto right and prevented its approval by the House. The Hon. Member and his leader have prevented Quebec from getting a veto right by fighting against our proposal, which contained a veto right.

[English)


NATIONAL SECURITY
Mr. Chris Speyer (Cambridge):: Madam Speaker, my question is for the Minister of Justice. In an article in this morning's Citizen written by Neil Macdonald, it is reported:
Tuesday, Solicitor General Robert Kaplan and Justice Minister Mark MacGuigan admitted Hambleton did tell the Mounties about passing on the NATO documents-
December 8, 1982

Now I will quote precisely what the Solicitor General said:
All of the information about his role working for NATO in Europe, when volumes of documents, many of them highly classified, were transferred directly to KGB officers ... he gave details of all of those things-
Will the Minister of Justice reconcile that statement with the statement which he gave yesterday in answer to a question by the Hon. Member for the Yukon, which reads:
Madam Speaker, in case my previous words were not sufficiently clear, I can confirm that there was no evidence before us of transmission of NATO secrets at any time.
Who is telling the truth?


Hon. Mark MacGuigan (Minister of Justice):: Madam Speaker, the article is mistaken, and I think my hon. friend's interpretation of it is further mistaken. I think the point the article makes is that both the Solicitor General and I admitted that, after the initial decision of the Minister of Justice that no prosecution should take place-


Charles Joseph Clark: Should?


Mark R. MacGuigan: -it was after that time that NATO secrets were revealed. If that is the meaning of the article-or whatever the meaning of the article is-I did not state that, I have no direct knowledge of that, and my hon. friend may wish to address that question to my colleague, the Solicitor General.


An Hon. Member:: Get together with him.


Mark R. MacGuigan: What I said yesterday in this House, and which cannot be controverted because it is the fact, is that at the time the decision was made by my predecessor as Attorney General there was no evidence whatsoever to suggest that there had been any transmission of NATO secrets by Mr. Hambleton at any time.


Chris Speyer: It is quite obvious that the left hand does not know what the right hand is doing in this particular case, Madam Speaker.


INFORMATION SECURED BY SECURITY SERVICE
Chris Speyer: Madam Speaker, my supplementary question is for the Solicitor General. After the letter of opinion was given to the Solicitor General from the predecessor of the Minister of Justice, which said that there was not sufficient evidence for a prosecution, and after the Solicitor General's Department and the Security Service came and knew that there were NATO documents being passed, was that knowledge ever communicated by the Security Service to the Minister of Justice's predecessor?
In addition, could the Minister please tell us what were the contents of the document that the spy Hambleton had in his possession in the Old Bailey? Will the Solicitor General release it and table it in the House? If he will not, why not?


Hon. Bob Kaplan (Solicitor General of Canada):: Madam Speaker, the Security Service tells me that, from the receipt of the opinion of the Department of Justice, the Security Service did not return to the Department of Justice for further advice
Oral Questions
about prosecution with any of the additional information it got from Hambleton.


Chris Speyer: Why?


Erik Nielsen: Why didn't you?


Robert Phillip Kaplan: In the earlier period, when the Security Service was preparing its case for the Department of Justice, all of the interviews, for example, with Hambleton, were taken under caution. He was warned that the information that he gave the Service could form the basis of a prosecution against him.


An Hon. Member:: So what?


Robert Phillip Kaplan: After the Security Service got the decision of the Department of Justice, the Service told Mr. Hambleton of that decision. They told him in their opening remarks. Following that, the Security Service has many discussions with Mr. Hambleton which were not on the basis of a caution, which information, in the opinion of the police investigators and of lawyers, would not have been admissible to be used against Hambleton. That is the reason the Security Service did not go back to the Department of Justice. That Service was quite satisfied to be running a very successful counter-espionage operation which was very productive; Hambleton was giving the Service information, which information the Service was sharing with the other friendly intelligence services, including MI5.


USE OF INFORMATION OBTAINED FROM PROFESSOR
Hon. Elmer M. MacKay (Central Nova):: Madam Speaker, my question is for the Solicitor General. Surely if this kind of voluminous evidence was obtained from the spy Hambleton- even if the Security Service felt that because it was obtained from him and could not be used against him because of a lack of caution, a statutor's warning, as the Solicitor General said-that evidence could have been used to solicit evidence from other people he named in that kind of testifying who could then have been given a caution? Why is the Solicitor General apparently hanging the success of the case only on what Mr. Hambleton could testify, instead of all of the other evidence that opened up as a result of what he said?


Robert Phillip Kaplan: Let me
clear that up for the Hon. Member. No voluminous evidence, physical evidence, was obtained from Hambleton. He did not have or certainly did not produce it, and the Security Service did not find NATO documents in his possession following-


Mr. Epp:: No, they were all in Russia!


Robert Phillip Kaplan: -the discussion with him. These were things that he told the Security Service and, by the way, they were things that he had done, not in Canada but overseas. He worked for NATO overseas, he got those documents overseas,

December 8, 1982
Oral Questions
and transmitted them overseas. So, in the discussions that they were having with Hambleton in Canada, all that they were getting from him was exactly that, information.
The Hon. Member is asking why they did not seek to verify information from third parties or in other ways which would have given them a basis to go back to the Department of Justice. The answer is that they wanted to do that very much and it was always their position that, if they could find third party evidence, not this information which was obtained without a caution, but third party evidence, they would indeed have gone back to the Department of Justice to try to obtain a consent from the Attorney General of Canada to found a prosecution in Canada.


FOREIGN INVESTMENT REVIEW AGENCY
Mr. Lome Nystrom (Yorkton-Melville):: Madam Speaker, my question is directed to the Prime Minister. It is a supplement to the questions asked earlier by the Hon. Member for Oshawa. I have in my hand a copy of a campaign speech given by the Prime Minister in Toronto on February 12, 1980, wherein he made three specific promises to strengthen FIRA, one of them being as follows:
We want to expand and strengthen FIRA . . . FIRA's mandate will be broadened to include the periodic review of all foreign firms of large size to assess the performance of these companies in such areas as export promotion and research and development.
If that promise had been kept, perhaps we might have prevented the Bowaters and the Iron Ores of the world.
The Prime Minister has now had three years to keep this commitment. Why has he not lived up to that promise he made in the dying days of the 1980 election campaign?


Erik Nielsen: Same reason.


Pierre Elliott Trudeau: Madam Speaker, because in those dying days of the 1980 election campaign Canada was not in a world which was very short of investment funds. We did not have 12 per cent unemployment. We felt at that time that we in Canada could be a little more selective-


Erik Nielsen: We did not have $2 a gallon gas either!


Pierre Elliott Trudeau: -with the import into Canada of foreign capital. Since that time, there has been a very severe worldwide crisis.


Charles Joseph Clark: Particularly in Canada.


Pierre Elliott Trudeau: The position of the Government remains that which I gave to the Hon. Member for Oshawa. We are not tightening the rules of FIRA to make it more difficult for foreign capital to have access to Canada, but we are not
making it more easy either. We are just maintaining the previous position by ensuring that there will be more efficient administration and, therefore, the capital which people want to invest in Canada and which can create jobs here, which would be done in a way which is favourable to the economy of the Canadian people-those things can get by without many months of delay which had been required under previous administrative rules. In other words, if investment is judged to be in the interests of Canada, we want it to come more quickly than more slowly.


Mr. Murphy:: Madam Speaker, I would suggest to the Prime Minister that the only selectivity is that the Liberals select which promises they wish to keep.


Erik Nielsen: Name one.


MUNICIPAL AFFAIRS
Rodney Edward Murphy: My supplementary question, Madam Speaker, is directed to the Minister of Finance. About 50 per cent of the construction workers in the Province of Nova Scotia are unemployed, with approximately 30 per cent facing the possibility of joining the welfare lines this winter. In the community of Springfield, Nova Scotia, a fire pump and the town fire department have been used to provide water to the community because the half finished water system is not being completed because of lack of funds. With this in mind, would the Minister of Finance act on a recommendation of my Leader, the Hon. Member for Oshawa, and create a major municipal projects fund in order to create real jobs? I would remind the Minister of Finance that there are many millions of dollars in these projects which are ready to go now so that jobs can be created for this winter.


Arthur Jacob (Jake) Epp: Tell us about the Manitoba deficit.


Hon. Marc Lalonde (Minister of Finance):: Madam Speaker, 1 have already indicated, in answer to the Hon. Member for Oshawa, that I would consider his representation. But I would also remind the Hon. Member that in my economic statement of October 27 I announced a $500 million fund for direct job creation for which municipalities can also apply. Therefore, in the case to which he is referring, the municipality could apply through the NEED Program for an allocation of funds. The Province of Nova Scotia has been allocated several million dollars for that particular Program. It would be possible for the municipality to consider applying for a contribution under the particular Program in order to complete the work. That is available, and I am sure the Minister of Employment and Immigration will want to follow the representation made by the Hon. Member.
December 8, 1982


AUDITOR GENERAL'S REPORT
Mr. Ron Stewart (Simcoe South):: Madam Speaker, my question is directed to the President of the Treasury Board. The report of the Auditor General points out that the Government is guilty of wasting millions of taxpayers' dollars and of gross mismanagement, to such an extent that 30 per cent of the public servants do not know what they are supposed to be doing. The underlying essence of the Report is that we are experiencing a large scale Government scam, and "scam", in my view, is an acronym for "squander, contort and mismanage".
Does the Minister agree that this Report is a fairly accurate assessment, or is it his opinion that his Government is responsible, accountable, not wasteful, and provides sound management?


Herbert Eser (Herb) Gray: Madam Speaker, 1 do not think the Hon. Member has accurately described what the Auditor General said with respect to performance criteria and their communication within the Government. He said that 30 per cent of the employees surveyed throughout only seven Departments indicated that they were "unclear about the kind of job performance expected of them during the last rating period".


Henry Perrin Beatty: How about the cabinet?


Herbert Eser (Herb) Gray: The Auditor General did not say that 30 per cent of the employees do not know what they are doing.


Charles Joseph Clark: Do you know what you are doing?


Some Hon. Members:: Oh, oh!


Herbert Eser (Herb) Gray: In any event, Madam Speaker, I want to assure the House that we are working with the Departments to update and review the-


Charles Joseph Clark: Is it true that you have resigned?


Herbert Eser (Herb) Gray: -performance review system in question-


Charles Joseph Clark: Herb, are you on strike?


Herbert Eser (Herb) Gray: -in the light of the Auditor General's recommendations. However, if the Hon. Member wants me to go on and respond more specifically, 1 would point out to him that the Auditor General pointed out in his Report that he has, "identified a gradual but unmistakable emergence of a new determination in Government and Parliament toward improved management and more stringent accountability". The Auditor General's Report itself indicates that the Hon. Member does not know what he is talking about.
Oral Questions


Ronald Alexander Stewart: I would like to tell the Minister that that was a gray answer from a gray area.


Some Hon. Members:: Oh, oh!


Mr. McDermid:: No gray matter.


FOREIGN AID-RESPONSIBILITY FOR PROJECT IN HAITI
Ronald Alexander Stewart: Let me ask the Minister why, in view of what he just said, he does not read the Report a little further. If he did he would see that in November, 1981, after $22 million of taxpayers' money was spent over a period of ten years, a project in Haiti was cancelled by gross mismanagement. A subsequent audit revealed that a $110,000 payment was fraudulently paid, that a $127,000 payment was paid and it was suspected of being fraudulent, and $1.7 million-


Madam Speaker:: Order, order!


Ronald Alexander Stewart: -of Canadian taxpayers' money is not accounted for.


Madam Speaker:: Order. 1 do not know why we have so much trouble on Wednesdays in keeping questions short, but all of the questions have been too long and, most of all, the answers.


Some Hon. Members:: Hear, hear!


Ronald Alexander Stewart: Madam Speaker, with all due regard for the Chair, I do not know why you always pick on me.


Some Hon. Members:: Oh, oh!


Ronald Alexander Stewart: May I ask my supplementary question?


Madam Speaker:: I would tell the Hon. Member that once in a while 1 have to pick on someone. It just turns out that it is him today.


Ronald Alexander Stewart: May I ask the Minister a question, Madam Speaker? Will the Minister acquiese that gross mismanagement was involved in the Haiti project? Will he tell us, this House, that he will name persons responsible for this gross mismanagement, and will there be firings?


Some Hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: Madam Speaker, the Auditor General has identified a number of important issues. With respect to the one the Hon. Member has mentioned, I intend to be discussing this matter very thoroughly with the Minister responsible for CIDA so that all appropriate action will be taken.
I might add that the Hon. Member would ask better questions if he had more gray matter, which he obviously lacks.


Some Hon. Members:: Oh, oh!

December 8, 1982
Oral Questions


CORPORATIONS
Roch La Salle: Madam Speaker, my quesi-ton is directed to the Minister of Consumer and Corporate Affairs. Yesterday, the Minister appeared before a Senate Committee to comment on Bill S-31, and when questioned by the press when he came out, he said he was willing to accept amendments to Bill S-31 which would have the Bill concentrate on pension funds rather than on provincial agencies or corporations, as is the case in the present Bill. Could the Minister repeat in the House today that he is willing to amend the Bill in order to restrict its application to pension fund institutions, and if so, could he inform the House whether the Alberta Heritage Fund could be exempted from Bill S-31 ?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Madam Speaker, I said before the Senate Committee that we would examine all draft proposals that were of any interest. I made it clear that both in the Senate and in the House of Commons, Members had an interest in the Bill, that a committee of Liberal Members was examining the Bill and that I was quite open to constructive amendments. 1 did not, however, specify the nature of those amendments. A journalist told me about the proposal formulated before the Senate by the President of the Montreal Stock Exchange. I said it was an interesting proposal that would be considered, but I did not specify, as the Hon. Member seems to want to imply, that such an amendment would be accepted. I think it is too early at this stage to conclude whether an amendment of this kind would benefit or would adversely affect the general scope of the Bill.


EFFECT OF BILL ON PENSION FUNDS
Roch La Salle: Madam Speaker, so according to the Minister, and for the information of the people of Canada, the newspaper article is wrong when it says that the Minister is prepared to amend the Bill by making it apply only to pension funds. I think it is important that the Minister should inform the House whether he is willing to narrow his Bill down to the point where it would apply only to pension funds.


André Ouellet: 1 think the article to which the Hon. Member is referring is headed: Ouellet says he is open to amendments. That is what I said and what I maintain. As for the kind of amendments, I have not been specific on that, with the Senators or with the press. I think it is too early at this stage to start speculating on one kind of amendment or another. I just want to make it clear, Madam Speaker, that as with any other bill tabled in Parliament, often amendments are made to improve legislation, and this proves how flexible and how open we are to concrete suggestions.


EXTERNAL AFFAIRS
Mr. Ian Watson (Chateauguay):: Madam Speaker, my question is directed to the Prime Minister and relates to a meeting 1 had recently with Yassar Arafat, Chairman of the PLO, to discuss peace prospects in the Middle East. Mr. Arafat indicated strong support for a Palestine-Jordan Confederation and stressed his support for Article 7 of the Arab Fez Summit Declaration which urges the guarantee of the security of the boundaries of all the states in the region, including Israel. He indicated that he would favour the idea of a U.N.-administered referendum of Palestinians living on the West Bank, in Gaza and East Jerusalem, to determine who the Palestinians wanted to negotiate for them.
Would the Prime Minister say whether he is willing to consider the idea of such a referendum, and whether Canada might consult with its allies to promote such a referendum as an important step toward meaningful negotiations for a Middle East peace settlement?


Pierre Elliott Trudeau: Madam Speaker, in reply to the question I would begin by saying that the Government hopes and it is its policy that the inhabitants of the occupied territories will some way eventually be able to express their views in a free and unfettered fashion. This, after all, is one of the principles which was recognized in the Camp David Accords which provide for self-governing of the authorities of those territories.
On the principle of the choice by the inhabitants of the area of who should represent them, the Government is in accord. Whether this electoral process should proceed under the U.N. supervision, or in the way suggested in his question by the Hon. Member for Chateauguay, is something that 1 have not had occasion to discuss with the Secretary of State for External Affairs. Therefore, I cannot speak for him on this particular modality of expression of opinion by the inhabitants.
I would be prepared to say that this should be a matter which should be negotiated between the parties themselves as to what is the best method of having free expression by the inhabitants of those territories, on their representatives. It is something for the parties involved to discuss amongst themselves. Whether having the United Nations supervising the electoral process is the correct method or not, I am not prepared to say at this time.


UNEMPLOYMENT INSURANCE
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Madam Speaker, my question is directed to the Minister of Employment and Immigration. In view of the 1.5 million unemployed
December 8, 1982

people in Canada and the complete absence of jobs for those people, and in view of the fact that Government-sponsored vocational training positions are overbooked with long-waiting lists, will the Minister bring in changes to the Unemployment Insurance Act which will permit unemployment insurance recipients to improve their job qualifications by attending school? Will the Minister take this step to help these workers prepare for new job opportunities which will become available when the economy improves?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, perhaps before answering the Hon. Member's question specifically, we should provide some alteration to his basic premise that there are not jobs available. As I pointed out in this House last Friday, every month there are some 250,000 jobs taken up by the unemployed moving back into the market. Indeed this Government is supplying through a number of its job creation programs, jobs for well over 100,000 Canadians at the present period of time.
As far as a specific answer to his question is concerned, the Unemployment Insurance Act already has within it provisions to allow those who are unemployed to take up training positions; so I would recommend that he read the Act.


NATIONAL SECURITY
Charles Joseph Clark: Madam Speaker, my question is directed to the Solicitor General, and I will speak slowly as he returns to his seat. He indicated yesterday that the spy, Hambleton, had been shown a document. Will he tell us what exactly was shown by Canadian officials to the spy, Hambleton, in 1980?


Robert Phillip Kaplan: Madam Speaker, yesterday when I was asked that question I did not have the full information, so I am glad to have the question again today.
He was shown, on a separate piece of paper, a paragraph from an internal memorandum sent by headquarters of the Security Service to the operative member of the Security Service who was dealing with Mr. Hambleton. The document is a national security document. I have reviewed it, and I do not feel, to anticipate his question in reply to the question asked earlier this day, that that document should be made public.


BASIS FOR DOCUMENT
Charles Joseph Clark: Madam Speaker, was this memorandum based upon a Department of Justice opinion?
Oral Questions


Robert Phillip Kaplan: Madam Speaker, I am not certain if "based upon" is a term of art. It referred to that opinion. It communicated that opinion, and it set out some instructions and advice for the operative.


Arthur Jacob (Jake) Epp: For the spy.


GOVERNMENT'S POLICY IN TABLING LEGAL ADVICE
Charles Joseph Clark: Madam Speaker, so we now know that there was an opinion by the Department of Justice, part of which was communicated to the spy, Hambleton. That is the case.
The Minister will know that on November 30 the Minister of Justice tabled in committee legal advice from the Department of Justice that implicated certain members of the RCMP. Is the Solicitor General telling us that there will now be a practice that the Government of Canada will table letters of advice from the Department of Justice, which implicate the RCMP, but will not table letters of advice which implicate a convicted spy, as in the case of Hambleton?
If that is the case, will one Minister or the other, and we will probably get different answers from each of them, tell us how in the world they can justify keeping from the Parliament of Canada information that was given to a convicted spy?


Robert Phillip Kaplan: Madam Speaker, when I referred to "based upon" in the Hon. Member's earlier question, 1 wanted to make it very clear that there was much more to the internal memorandum than just legal advice. It is a national security document. Part of it was to be shown to Hambleton. It was designed with that in mind. The rest of it is not to be made public. It is part of one whole document which I do not propose to make public.


PURPOSE IN SHOWING DOCUMENT
Charles Joseph Clark: Madam Speaker, I have a supplementary question for the Solicitor General. It was "designed" to be shown to Mr. Hambleton. For what purpose, as an inducement?


Robert Phillip Kaplan: Madam Speaker, it was to be shown to Hambleton to demonstrate to him the view of the Department of Justice and the decision of the Minister of Justice respecting prosecution. I should add that he was only shown one paragraph of the total memorandum. That is the paragraph which was in that letter that was waved that I was asked about the other day, and that I looked into.

December 8, 1982
Point of Order-Mr. de Jong


INDUSTRIAL AND LABOUR ADJUSTMENT PROGRAM
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, I have a question for the Minister of Finance regarding the economically hard-pressed community of Squamish, B.C., which now has an unemployment rate in the 30 per cent range. The community has just found out that its wood fibre pulp mill will be closed for an undetermined period of time, laying off an additional 450 persons. Will the Minister make some effort to have this community in British Columbia designated under the I LAP program, as not a single western community has so far been designated?


Marc Lalonde: Madam Speaker, I will raise the Hon. Member's representation with the Cabinet Committee on the ILAP Program. The Chairman of the Committee is now the Minister of Economic Development. 1 will bring this representation to his attention. 1 am not quite sure about the Hon. Member's statement that there is not a single western community under the ILAP Program. He may be right, but I thought some had been designated. I will check into this matter.


POINTS OF ORDER
Simon Leendert de Jong: Madam Speaker, 1 rise on a point of order. I recognize that I cannot and will not question your ruling regarding the motion I introduced earlier today under Standing Order 43. You might have misheard the motion that I was trying to introduce because of the noise in the Chamber at that time. I would therefore request that you kindly review the "blues" to determine if the matter I was trying to raise falls under federal jurisdiction. I honestly believe that the matter I was raising poses a serious infringement on the federal Charter of Rights and Freedoms. I believe the matter should have been allowed to be introduced in the House.


Madam Speaker:: The Hon. Member is right. 1 do not think I heard one line in particular in the Hon. Member's presentation which referred to the Canadian Charter of Rights. There was some noise. The Hon. Member was reading quite fast because his motion was long. I was especially struck by the motion which called for some kind of redress in the Parliament of Saskatchewan. I therefore gathered that he was dealing solely with a matter under provincial jurisdiction. I think I can do him right by asking if he will come back with the motion tomorrow, and then he can put it to the House.


Mr. Deans:: Madam Speaker, I might say that if you were to put the motion under Standing Order 43 now, the Tories would be delighted to say no.


Madam Speaker:: 1 could not possibly go back to motions under Standing Order 43 without the unanimous consent of the House. Is there unanimous consent?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Madam Speaker:: If the Hon. Member can come back with his motion tomorrow, that would be very helpful.


MR. KAPLAN-CORRECTION OF EARLIER REMARK
Robert Phillip Kaplan: Madam Speaker, 1 rise on a question of privilege. I would like at the first opportunity to correct one word of an answer that I gave to a question from the Leader of the Opposition (Mr. Clark). I referred to a letter which had been exhibited in a courtroom in Great Britain. 1 meant to say "an envelope".


MR. STEVENS-ALLEGED IRREGULARITY OF ESTIMATE BEFORE STANDING COMMITTEES
Mr. Sinclair Stevens (York-Peel):: Madam Speaker, I rise on a matter with respect to the estimates that will be before us tomorrow evening for voting purposes. This is the first opportunity 1 have had to speak to my point of order since getting the electronic transcript with respect to certain evidence given by Senator Austin in the Committee of this House known as Finance, Trade and Economic Affairs touching specifically on the estimates that we will be considering tomorrow night. The estimate that I refer to specifically is the one appearing in Supplementary Estimates B for the fiscal year ending March 31, 1983 under the Ministry of Industry, Trade and Commerce and known as Vote 26b, being a payment to Canadair Limited as equity of $200 million, and Vote 27b, being a payment to The de Havilland Aircraft of Canada Limited as equity of $200 million.
Where the irregularity appears to have arisen is that subsequent to the estimates being tabled in this House, events have transpired which now make the estimate on its face incorrect and certainly not in a form that could be properly voted on tomorrow evening.
What I am referring to is that on November 24 of this year the Prime Minister's (Mr. Trudeau) office stated in a press release:
The Prime Minister announced today that the Government has approved the transfer of certain commercial assets and enterprises to the Canada Development Investment Corporation (CDIC) and its responsible Minister, Senator Jack Austin. In addition to the Government's Canada Development Corporation (CDC) shares, the transfer is to include: Canadair Limited, The de Havilland Aircraft of Canada-
And certain other corporations.
This transfer was subsequently confirmed on the same day in another press release issued by the Government of Canada in which it was stated:
December 8, 1982

The CDIC was incorporated under the Canada Business Corporations Act in order to hold the Government's 85 per cent share ... of the common shares of the Canada Development Corporation (CDC)-
Later in the press release it states, and I emphasize the reference to legislation:
Legislation will be introduced in Parliament to seek statutory affirmation of the reorganization of CDC of CDIC, Senator Austin said today. In the meantime, the Government has given Senator Austin and the CDIC responsibility for the following assets and enterprises in addition to the CDC shares: Canadair Limited, The de Havilland Aircraft of Canada, Limited-
And certain other corporations. The release put out by Senator Austin concludes with this paragraph:
Legislation will be introduced in Parliament to carry out obligations to confirm the Government's agreement with CDC, rendering it an ordinary commercial corporation which will adopt a new name.
1 would like to emphasize the reference to legislation. It goes on to read:
The legislation will also reflect the CDIC's role in succeeding to CDC's original statutory mandate, and seek formal approval of Parliament for the structure of the Crown Corporation, and a requirement that CDIC obtain the approval of the Government for its corporate strategies, plans, and specific commitments.
In short, Madam Speaker, we have in those two releases notice, subsequent to the estimates being tabled in this House, that the Government has shifted its asset to a new corporation which has been incorporated under the Canada Business Corporations Act, and that the responsible Minister is no longer the Minister of Industry, Trade and Commerce, but is the Minister of State for Social Affairs, Senator Austin.
As further confirmation of what I am saying, Madam Speaker, when Senator Austin appeared before our Finance Committee, I asked him this question, and this is recorded in the Minutes of Monday, December 5:


Sinclair McKnight Stevens: Who at the present time technically owns the shares of de Havilland and Canadair?
The reply, in part, was as follows:
Senator Austin: It is a matter of PCO paperwork, but in law the responsibility is now mine through CDIC. The responsibility speaks from the time of the order by the Governor in Council.


Sinclair McKnight Stevens: So to all intents and purposes, the shares and the ownership then of the de Havilland and Canadair are CDIC's?
Senator Austin: Yes, indeed.
The evidence then goes on to the point where I asked Senator Austin whether he felt that the vote reference in the estimates that were then before us was a fair reference. Did it accurately reflect what we were being asked to vote on? And the Senator replied:
Senator Austin: I do not wish to change the vote wording in any way and they remain wholly owned by the Government of Canada through another wholly-owned Crown Corporation, so I see no difficulty.
The Senator then went on basically to say that he felt that whatever had transpired, indeed had transpired, but he did not feel it affected this estimate and the vote in it which I have referred to.
Point of Order-Mr. Stevens
The reason I rise on this point of order, Madam Speaker, is that I feel you may well want to consider whether the two votes which I have referred to under the Ministry of Industry, Trade and Commerce are in the estimates properly, or whether they should both be deleted. I say that, first of all, bearing in mind that we are being asked to approve funds on behalf of a minister of industry, trade and commerce who has now lost the responsibility for the very entities for which he is requesting funding. Second, I would suggest, Madam Speaker, you might consider, based on the various rulings you have given, whether in fact we are dealing with a legislative matter here because, as Senator Austin pointed out, they are contemplating legislation to deal with CDIC which will give them authority to do what the Order in Council has presumably already anticipated, and has put in place. In short, we are being asked to approve a $200 million equity injection into de Havilland and also a $200 million equity injection into Canadair Limited on behalf of a Minister who no longer is responsible for those companies. If we did approve that appropriation, I would suggest to you it should be in the form of legislation.
In addition, think of the dilemma that both the Government and this House will be in if that estimate is approved, because here we have entities which are now no longer owned by the Government of Canada. The $200 million will go into those two entities after the Prime Minister of the country has indicated they are to be wholly owned subsidiaries of CDIC. What exactly does the Government do then? We have authorized it to put $200 million in the form of equity into each of the two companies, but those two companies in turn are to be owned by CDIC.
I would suggest, therefore, Madam Speaker, that if we were to approve the estimates in their present form, it would be a nullity because, in truth, the money, under the present Government's intentions, should be voted to CDIC, and then CDIC may see fit to put the money into their two wholly-owned subsidiaries, de Havilland and Canadair Limited.
I raise this, Madam Speaker, because I think it is a very fundamental matter. Senator Austin informed us that he is going to be requesting at least $100 million more in further estimates for each of these two companies, de Havilland and Canadair, and my feeling is that if we chose, and in your discretion you decided, that the two votes should be deleted, there will be ample time for the Government to request, in a proper way, the funding, which apparently they should have requested a few weeks ago, that is, funding to go into CDIC with an explanation that it intends to use the funds to put further equity into de Havilland and Canadair Limited.
In conclusion I simply say that it appears that these estimates, having been approved it seems well in advance of CDIC even being incorporated, cannot be accepted at the present time as reflecting what in reality is the Government's position with respect to these entities. I would ask you, Madam Speaker, to consider the deletion of the two votes before we deal with the estimates in general tomorrow night.

December 8, 1982
Point of Order-Mr. Stevens


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, I do not think that the remedy being sought by the Hon. Member should be to simply strike out the two votes in question. He is saying that his argument is based on testimony given by the Minister before the Committee, and there is nothing in what he said that proves the two items are likely to have any legislative effect. I think they have their raison d'etre. These two items in the supplementary estimates meet all the requirements of the Chair's previous ruling on admissibility of items in the estimates. I understand that the Hon. Member may disagree, and that eventually legislation might be tabled in Parliament for other purposes, and this legislation would then form the basis, if necessary, of future estimates. However, despite the testimony of Senator Austin to which the Hon. Member is referring, at the time the estimates are tabled, these items are based on practical considerations and meet the requirements of the Chair's ruling, because they do not seek to create a new legislative authority but in fact exist because that authority exists already. I think that the remedy the Hon. Member should be seeking is to object to these items and not to ask that they be deleted. If he does not like them, he can object, and according to parliamentary procedure the House will be voting tomorrow. However, I do not believe he has shown that the items were infringing some regulation or were at odds with the Chair's previous rulings or with parliamentary procedure, and therefore, the only way to express objection to these items is not to ask for their deletion but to object formally and to put the matter to a vote.
[ English ]


Erik Nielsen: Madam Speaker, I have a couple of points which have not been covered. The Government House Leader (Mr. Pinard) refers to previous rulings. I would agree with him that there might be some remedy in curing the very valid point that is raised by the Hon. Member for York-Peel (Mr. Stevens), that if there were to be further supplementary estimates, the problem might be cured in the next set. We are not in that position. We are in the position now where estimates are deemed, under the Standing Orders, to have been reported yesterday, and we are voting on all of them tomorrow night.
The Government House Leader also says that the case which has been very reasonably made by the Hon. Member for York-Peel is based on testimony in committee. That is not the case at all, Madam Speaker, and you should, when considering the matter, take into account two press releases. One of them is in the name of the Government of Canada. That is on the front page of the news release, which was dated November 24, 1982, announcing that:
The CD 1C was incorporated under the Canada Business Corporations Act in order to hold the Government's 85 per cent share (48.6 per cent of voting control) of the common shares of the Canada Development Corporation (CDC), as part of a reorganization permitting CDC to operate as a purely commercial venture and the CDIC to succeed to CDCs public policy m '.ndate.
That press release, taken together with another press release dated the same day, issued on the stationery of the Office of the Prime Minister, outlines the names of the companies involved here. It reads as follows:
The Prime Minister announced today that the Government has approved the transfer of certain commercial assets and enterprises to the Canada Development Investment Corporation (CDIC) and its responsible Minister, Senator Jack Austin. In addition to the Government's Canada Development Corporation (CDC) shares, the transfer is to include-
And then among others appear Canadair Limited and de Havilland Aircraft of Canada Limited, the two companies mentioned by my colleague in making his point with respect to the two items in the estimates.
So, Madam Speaker, it is not based merely on testimony in a committee; it is based on a news release of the Government of Canada and a companion release by the Prime Minister (Mr. Trudeau) stating that CDIC has come into being for certain specific purposes, one of which was to assume the responsibilities outlined by my colleague, the Hon. Member for York-Peel. I think he has hit the nail on the head when he says that in all probability the estimates, including these two items, were prepared before the creation of CDIC and before the transfers had taken place. The transfers are there.
1 see more of a problem with respect to the dilemma mentioned by the Hon. Member for York-Peel, because I do not think, with respect to his submission, that the voting of the $200 million in each case to each of these Crown corporations would be a nullity in view of the events which have over-run the purpose of the estimates; rather, I think probably the votes would go forward, but wrongfully, and they would be untouchable legally by the new Crown corporation. What is more, Madam Speaker, I think the end result would be that there would be no machinery to get those moneys back to the Government of Canada. That has happened in the past, too. So there they would sit.
I think it is a very serious question that should be taken under consideration. I suggest it is curable, not by the estimates any more because we are at the end of the supply period, but by proper legislation. Indeed, we can deal with it fairly quickly if that is the course the Government intends to follow in order to meet the impossible situation outlined by the Hon. Member for York-Peel.


Donald Alex Blenkarn: Madam Speaker, I think the House must appreciate that somewhere along the line the Government changed course. It gave its shares in these two Crown corporations, Canadair and de Havilland, to CDIC. The Government no longer has a direct interest in those two corporations. That being so, to be proper, this vote would have to be a vote granting money to CDIC so that it could fulfil certain requirements with respect to investment in Canadair and de Havilland. On that basis, the Hon. Member for York-Peel (Mr. Stevens) is quite correct. There has been a change in the corporate set-up reflected in the estimates. So what we are being asked to do is to make advances to two Crown corporations which the Crown no longer owns. On that
December 8, 1982

basis the Government has created the problem, and these two estimates must be withdrawn or disallowed.
Now, the Government can, as pointed out by the Hon. Member for Yukon (Mr. Nielsen) introduce a Bill, or perhaps a new set of Supplementary Estimates, for $400 million or whatever it needs, which would probably be more than that. But the way it is now, the Government has created a corporate mess and it cannot now come before the House and ask for advances for the purpose of capitalization of two Crown-owned corporations because those corporations are no longer directly owned by the Crown. Our submission, then, is that these votes are no longer proper. The Government's own action has made them improper.


Madam Speaker:: Since this is a very technical matter, I shall have to take this point of order under consideration 1 wish to thank the Hon. Members for the points they have made.
Order Paper Questions
Congregation of the Selkirk Church of Christ Christian Chapel which is in my constituency of Haldimand-Norfolk, who are very concerned about the provisions of the proposed Non-Profit Corporations Act, Bill C-10. The purpose of this petition is to protest the Government's proposed changes in Bill C-10, which allows a court of law to interfere in the affairs of the Church body. The nature of the petition is to urge the Government to drop the provisions of Bill C-10 which would infringe on the rights and privileges of the Church to take a moral stand on matters concerning membership of that Church body.
The petitioners hope that in your examination of the petition you will find the petition in order, and that you will exercise the discretionary powers vested in the office of the Speaker of the House to allow discussion and referral to committee at the earliest possible time, in order that the sanctity of the Church in Canadian society can be preserved.



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Mr. Marcel Prud'homme (Saint-Denis):: Madam Speaker, as Chairman of the Standing Committee on External Affairs and National defence, I have the honour of tabling the Fifteenth Report of the Standing Committee on External Affairs and National Defence, which examined Bill C-130 on behalf of the House.


HEALTH, WELFARE AND SOCIAL AFFAIRS-PRESENTATION OF FIFTH REPORT OF STANDING COMMITTEE
Mr. Marcel Roy (Laval):: Madam Speaker, I have the honour of tabling, in both official languages, the Fifth Report of the Standing Committee on Health, Welfare and Social Affairs, concerning a study made of urea formaldehyde foam insulation.
[Editor's Note: For above reports, see today's Votes and Proceedings.]


QUESTIONS ON THE ORDER PAPER
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 987 and 4,528.


Mr. MacKay: 1.	Did the Government undertake a national advertising campaign to publicize the industrial benefits of the F-18 fighter and, if so, what is the planned expenditure for the advertising campaign?
2.	Are the full benefits of the $2.91 billion in industrial offsets contingent upon Government assistance to Canadian industry to permit it to re-tool and thereby take advantage of these programs and, if so, will the Defence Industry Productivity (DIP) Program be part of such Government assistance to industry?
3.	What effect did the August, 1978 round of cut backs have in the DIP budget for the fiscal year (a) 1978-79 (b) 1979-80?
4.	Does the development of high technology projects require several years lead time and, if so, what effect have these cutbacks had in industry's ability to take advantage of the current industrial offset program?
5.	With reference to DIP expenditures for the fiscal year ended (a) 1974 (b) 1975 (c) 1976 (d) 1977 (e) 1978 (f) 1979 (g) 1980, what was the total in grants and contributions (i) to industry (ii) when deflated by an appropriate price index?



PETITION


Mr. Bud Bradley (Haldimand-Norfolk):: Madam Speaker, it is my duty to present a petition signed by 76 members of the
6.	Has the DIP budget for the fiscal year 1980-81 been committed since December of 1979?
7.	Did the Department of Industry, Trade and Commerce receive applications totalling over $100 million for the development of industrial technology for DIP assistance in the fiscal year 1980-81 and, if so, what effect will the lack of DIP funds have on the $2.91 billion industrial offset program associated with the F-18 fighter?

December 8, 1982
Order Paper Questions
8.	Will the lack of DIP funds affect jointly funded projects by the Canadian and American Governments, or other projects such as the STOL or Cruise missile?


Hon. Ed Lumley (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: As of
May 26, 1980, the reply for the Department of Industry, Trade and Commerce was as follows:
1.	Yes. Soon after the new fighter aircraft contract was signed, the Government sponsored a series of advertisements to inform Canadians on the breadth of the CF-18 industrial benefits program and to encourage Canadian companies to take advantage of the new business opportunities the program offers, at a cost of $259,000, to be shared by the Department of Industry, Trade and Commerce and National Defence.
2.	Of the $2.91 billion industrial benefits program contracted by McDonnell Douglas, $2,453 billion was firmly committed, that is to say, was not dependent on any form of federal Government assistance. The remaining $457 million, which comprises a number of structural, engine and avionics work packages on the CF-18 and F-18, was conditional on Canadian companies being competitive with existing U.S. suppliers to McDonnell Douglas. The costs of tooling, training, modernizing plant and equipment, etc., required to start up production in Canada on this aerospace and electronics works must be borne by Canadian funding sources. The Defence Industry Productivity Program may be expected to provide part of the federal Government assistance to industry in this regard. Accordingly, the Government authorized the addition of $39.5 million to the DIPP budget (19.5 million for year 1980/81; $20.0 million for year 1981/82), to support the establishment in Canada of second sources for four CF/F-18 airframe structural components. This amount would be repayable from company earnings through the standard terms and conditions of the source establishment provisions of the DIP Program.
3.	In the August, 1978 budget reductions, the contribution budget for DIPP was reduced from $44.2 million to $40 million for 1978/79 and 1979/80.
4.	With respect to high technology development projects arising from the F-18 aircraft industrial offsets, lead times of up to four years before production start-up were anticipated. Two years lead time would be required before most special materials and equipment are identified and procurement initiated. The F-18 contract has been signed and areas requiring development are still being defined. Accordingly, the shortage in DIPP funding had little or no effect on the ability of industry to take advantage of the industrial offset program in order to undertake high technology development.
The application of technology already developed and where specific manufacturing opportunities had been identified, much shorter time scales are involved. Where source establishment and capital assistance aspects of the DIP Program are involved, the impact will be more serious unless funding beyond the current budget levels are provided.
5.	(i) The total DIPP contributions to industry were:
(a)	1973/74-$57.5 million
(b)	1974/75-$48.4 million
(c)	1975/76-$39.0 million
(d)	1976/77-$44.9 million
(e)	1977/78-$43.2 million
(0	1978/79-$52.2 million
(g)	1979/80-$57.9 million
(ii) The total DIPP contributions when deflated by an appropriate price index were:
(a)	1973/74-$57.5 million
(b)	1974/75-$42.0 million
(c)	1975/76-$30.5 million
(d)	1976/77-$32.0 million
(e)	1977/78-$28.8 million
(0	1978/79-$32.7 million
(g)	1979/80-$33.1 million
Note: Using the Implicit Price Index for the gross national expenditure published by Statistics Canada, the above values have been computed in terms of the FY 1973/74 dollar.
6.	The DIPP budget for fiscal year 1980/81 was committed by December, 1979 to pay legal obligations under contract with Canadian industry.
7.	Yes. The Department of Industry, Trade and Commerce received application for DIPP assistance in 1980/81 totalling over $100 million for development of industrial technology.
Federal Government assistance to Canadian industry on behalf of the F-18 fighter aircraft offsets are in two parts:
(a)	The assistance provided as a special fund to McDonnell Douglas for high technology production involving a minimum number (six) of companies. This funding has been provided by the federal Government and is separate from the normal DIPP funding. (See reply to Part 2)
(b)	Normal DIPP funding is the second source of assistance to Canadian industry. Canadian contractors will be seeking contracts under the F-18 offset program with the intention of utilizing existing plant equipment which may or may not have been acquired with DIP Program support. Other contractors will require additional advanced capital equipment and may acquire the equipment with their own resources or seek DIP Program assistance which can only be provided if funds are provided in excess of the Crown's legal commitments.
8.	(a) Canadian-American Joint Projects. Lack of DIPP funding had no impact on the completion of joint projects underway as long as these projects remained within their planned budgetary allocations. Projects under discussion or negotiation were scrutinized carefully for maximum potential contribution to the Canadian economy.
(b)	STOL Aircraft. The jet STOL aircraft will be a multimillion dollar development project for which foreign partners are being sought. The Canadian federal Government's share of the funding would be considered separately from the normal DIP Program budget. The activity is in the project definition stage.
(c)	The Cruise Missile. The Cruise missile project had not yet received approval in principle and authority to contract by May 26, 1980. When approved, additional funding was allocated to this project.
December 8, 1982

(d)	Other Projects. Other projects could not be accepted until the DIP Program funding was increased. Based on the approved levels of funding at May 26, 1980, the entire 1980/81 budget was required for legal contractual commitments in hand.



CONVERSION OF GOLF COURSES TO METRIC MEASUREMENT

Mr. Thomson: Were nine clinics, run by a Mr. Dan Halldorson and supporting the conversion of golf courses to metric measurement, paid for by the Metric Commission and, if so, what was the cost to the taxpayers?


Mr. David Berger (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: The total cost of the nine clinics run by Mr. Dan Halldorson was $55,000, $35,000 of which was paid by the Metric Commission and the remaining $20,000 paid by the private sector.


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 be allowed to stand?


Some Hon. Members:: Agreed.



MOTIONS FOR PAPERS

David P. Smith: Madam Speaker, I ask that all notices of motions for the production of papers be allowed to stand.


Madam Speaker:: Shall the remaining notices of motion be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
MEASURE TO MODIFY BENEFIT INDEX The House resumed from Tuesday, December 7, consideration of the motion of Mr. Gray that Bill C-133, an Act to amend the Supplementary Retirement Benefits Act (No. 2), be read the second time and referred to the Standing Committee on Miscellaneous Estimates, and the amendment thereto of Mr. Baker (Nepean-Carleton) (p. 21305).
Supplementary Retirement Benefits Act (No. 2)
Mr. Terry Sargeant (Selkirk-Interlake):: Mr. Speaker, 1 am pleased to participate in the debate on Bill C-133 today. By way of opening, let me read from two letters from constituents that I received in today's mail concerning the Bill. In the last two weeks all of us have received dozens of letters from retired civil servants, Armed Forces personnel and members of the RCMP, seeking our assistance as Members of Parliament to stop Bill C-133. Some of these letters have been read in the speeches of Members of all Parties this week. Let me read from one written by a retired civil servant in Winnipeg who writes:
Dear Member of Parliament... It's not too late!!!!!!
Be fair to the Public Service Pensioners.
In good faith over many years of employment a sur-charge deduction was made from our pay cheques to cover any increase in the cost of living. This was supposed to be reflected on our pension cheques.
Now with no thought to the dedicated years of service of thousands and the foregoing understanding, -with one swift axe-GONE!!!!!
This will not only effect next years cheques but snowballs for years to come.
Please Mr. M.P.-RECONSIDER-Do a little soul searching and give the pensioner his just return.
Let me read from the second letter written by a person in Selkirk who retired from the Armed Forces after 29 years of service, part of it during the last war. He writes as follows:
Two years ago I received notification that in 1983 my pension would be adjusted upward. I was happy to hear this because it meant that I would finally get a monthly cheque that would more realistically compensate me for my long years of service to my country.
If Bill C-133 is allowed to pass, I and many others like me will feel that our country has let us down.
Please, USE EVERY MEANS AT YOUR DISPOSAL TO STOP BILL C-133 and help preserve the rights and dignity of those who served.
1 am glad to have this opportunity to put on record my opposition to what 1 consider to be an offensive piece of legislation. Bill C-133, as we all know, is part of the Government's six and five con job and will limit pensions of federal public servants to 6 per cent next year and 5 per cent in 1984.
On Monday night, the President of Treasury Board (Mr. Gray), no doubt hoping to quell a backbench revolt in his caucus, proposed an amendment to cap these pensions at 6.5 and 5.5 per cent. This six and a bit and five and a bit amendment does not alter the fact that the Government has a commitment to continue full indexation of public servants' pensions.
Bill C-133 is different from the rest of the six and five program. In this case it is not the Government's own money that it is tinkering with. The pensions are paid out of a fund established by matching contributions from employees and the Government and its agencies. This fund belongs to the pensioner, not to the Government.
Bill C-133 is unique in the Government's six and five program because it is an act of outright robbery made legal by an Act of Parliament. Federal public servants have paid for their pensions out of their own pockets. They contributed 6.5
21404

December 8, 1982
Supplementary Retirement Benefits Act (No. 2)
per cent of their salaries for their pensions. On top of that they paid an additional 1 per cent to the supplementary retirement benefits account to protect the purchasing power of their pensions by having them indexed to inflation. For the right to a fully-indexed pension, Public Service employees have paid 7.5 per cent of their salaries, one of the highest rates of contributions of any employer-sponsored pension program. The pension contributions of their employers, this Government and its agencies, are not Government handouts; they are part of the employees' over-all benefit package. It is really the deferred income of Public Service employees themselves.
Taken together, there is more than SI5.6 billion in the Public Service superannuation account and the supplementary retirement benefits account. Considering that, it is clear that the combined Public Service pension plan is on a sound financial foundation. Therefore, there can be no basis for arguments which attempt to prove the Government must reduce the indexing on these pensions because the fund cannot cover the cost.
About 200,000 pensioners will be hit by the cutbacks contained in Bill C-133. Capping the indexation of Public Service pensions will rob these pensioners of about $100 million in the next two years alone. And, of course, like the rest of the six and five program, when indexing is re-introduced, after 1984 it will be on a smaller base pension. The result will be pension cuts for all time.
The average pensioner is not getting rich from the Public Service pension plan. Of course, there are exceptions. I read a few days ago that Mr. Michael Pitfield, well known to all of us, could stand to collect some $100,000 annually by the time he is eligible for retirement ten years from now. Obviously, capping Public Service pensions matters little to a man of Mr. Pitfield's financial stature. But for the average pensioner, it is quite a different story. The average annual pension for contributors to the Public Service pension plan is not in the six figure range, as Mr. Pitfield's will be. No, it is only $8,100. And the average survivor benefit paid to widowed spouses is only $3,200 per year.
Slashing the indexation of Public Service pensions will mean a loss of $1,400 in pension benefits for contributors to the plan over the next two years alone. It will mean a loss of $577 to widowed spouses receiving survivor benefits. Surely the Government must realize that the impact of this Bill, and of its whole six and five program will be to drive thousands of Canadians further below the poverty line.
I will be interested to see how many Liberal backbenchers will keep their promise to the Public Service employees they represent and vote against the Bill. How many of them will worm out of their promise with the six and a bit and five and a bit amendment of the President of the Treasury Board?
I will be interested, too, to see how many Tories will show up when it comes time to vote on this piece of legislation. I think the Tories must feel uncomfortable about having to deal with this Bill and the rest of the Government's six and five schemes. The Conservatives have promised public servants that they will oppose Bill C-133; but they have promised the Government, too, that they will deal with the Bill expeditiously. Now, how
can a Party promise on the one hand to fight the Bill, while it is promising, on the other, to give it expeditious passage in the House?
I was rather amused on Monday night when the Hon. Member for Victoria (Mr. McKinnon) talked about the Hon. Member for Hull (Mr. Isabelle) appearing to be like a man trying to ride two bicycles on a high wire at the same time. What was amusing was that my friend from Victoria then jumped on those two bicycles himself. He claimed to be opposed to Bill C-133 because it upset a contract.
What did Bill C-I24 do, Mr. Speaker? The Hon. Member for Victoria said that Bill C-124 provided for a small cut in the pay of Members of Parliament. That is true enough. He implied that that was all Bill C-124 was about. He did not say anything else about that Bill. He did not mention that it represented a breach of contract, or, to use his words, "upset the contracts" of some 700,000 civil servants, Armed Services personnel and members of the RCMP. I call that selective criticism, or a pretty good high wire act.
It is also worth noting that the Tories have moved an amendment for a six months' hoist on Bill C-133. In August, when Members of this Party moved a similar amendment on Bill C-124, the Tories-to a person-voted against it. It is very difficult to follow the convolutions of Tory logic, Mr. Speaker.
The Tories supported the introduction of the six and five program in August. Their Leader says they support the spirit of six and five. But now when public attention is focused on the impact of six and five on Old Age Security, Family Allowance and Public Service pensions, the Tories have discovered, by some magic no doubt, that there are poor people who are going to be hurt by the Government's restraint program.
What did they expect? They knew very well when we were voting on wage controls for the Public Service and armed forces personnel in August that the six and five program would attack the living standard of pensioners and the poor. It was there in the June budget for all to see. As the Hon. Member for Churchill (Mr. Murphy) said on Monday night, the Tories are working both sides of the street. To atone for their sin of voting for Bill C-124, they are now opposing the legislation to implement the six and five for which they voted.
The Tories support the thrust of the six and five program. By their own admission, the only problem they find with it is that it does not go far enough. Through the six and five program the Government is taking away from those Canadians who are the poorest and giving to the wealthiest. This they do in the name of creating a positive investment climate.
In November 1981 the Government closed a number of loopholes for the rich. To compensate, it reduced the marginal tax rate for the richest Canadians by something in the order of 10 per cent. Then, under a barrage of criticism from the Tories and lobbies for big business and the banks, the Government began to backtrack. Now most of the loopholes have been
December 8, 1982

reopened and the tax rate for rich Canadians has been kept at its reduced rate. This amounts to more than a billion dollar tax cut for Canada's wealthiest taxpayers. Contrast that to the impact of capping the indexing on income tax at six and five per cent and the 40 per cent increase in unemployment insurance premiums. That will take $3.5 billion out of the pockets of ordinary working Canadians. Tell me how this represents an equal sacrifice for all Canadians.
Or consider this: last November the Government implemented a $5.7 billion cut for medicare and post-secondary education. Only a few months later the Liberal Government, with the support of their Tory allies, boosted the handouts to oil companies through PIP to $6.5 billion. It is restraint for health care and education and increased welfare for the oil companies!
This is the kind of program for economic recovery that inspires Tories and Liberals alike. It does not matter which Party it is, both of them are quick to criticize the labour productivity of ordinary Canadians and attack our social programs, but they never utter a word to challenge the kinds of corporate investment decisions made by big business. My God, even the "Harvard Business Review" has criticized North American management for being too preoccupied with the short-run buck and not sufficiently concerned with long-run investment.
The Tories and Liberals stand solidly behind restraining the incomes of ordinary Canadians and driving thousands more into poverty. But let any of them suggest that our captains of industry and finance may not really have the best interest of the country at heart, and they are quickly brought back into line. Faith in economic decision-making in corporate boardrooms and faith in the ability of the marketplace to get us out of this economic mess are what inform the economic thinking of the Liberals and Tories. As my Leader said when responding to the mini-budget of the Minister of Finance (Mr. Lalonde), this is 1982, not 1932; the Liberals and Tories apparently have learned precious little from the depression. They insist on dealing with the myths about private enterprise and refuse to recognize, as most European Governments and the Government of Japan have done, that societies cannot rely on raw capitalism and the law of the jungle for economic stability and growth.
If the Government is guided by an irrational faith in the ability of Canadian Pacific and the Royal Bank to pull us out of economic hard times, what is the purpose of six and five? The reason for the six and five program is political, not economic, I am sure most Liberal Members opposite are hoping that this program will save their political hides. I wish them good luck. The economy has deteriorated steadily in spite of liberal doses of fiscal and monetary restraint. Already this year we have seen more than 34,000 business and personal bankruptcies in the country, and there are now more than 1.5 million people officially unemployed across the country. Given that the Government intends, by and large, to let free enterprise take its course, allowing of course for odd Dome-style bail-outs, it needed a program which would create the illusion
Supplementary Retirement Benefits Act (No. 2)
of action against the erosion of incomes of the poor and middle-income Canadians. That is what this program does. Obviously it has been in the works for some time.
Last year we learned through a document which my Leader obtained that the Government wanted the following:
A program of consultation and public relations aimed at changing public attitudes and expectations would be useful, even though the main advantage of the program would be that it would enable the Government to be seen doing something about inflation.
As we know the centrepiece for the six and Five program is wage controls on Public Service incomes. Bashing unions, especially Public Service unions, is good corporate boardroom sport, and the six and five program was the kind of thing guaranteed to get the boardrooms buzzing. But even according to the Government's own assessment, wages were not the cause of inflation. Again I am quoting from the same document:
We are not currently facing wage-driven inflation such as we were in 1975, instead real wages have fallen for four consecutive years.
The Government has been conning Canadians with the six and five program. It is relying on the willingness of ordinary Canadians to share and to sacrifice in order to make things better for everyone. But that gang over there has been clever to keep under wraps the transfer of wealth from the poor to the rich which accompanies this con job. Revealing that would most certainly minimize the public relations value the Government expects to reap from this program.
While it is attacking the living standards of public servants, mothers and pensioners, the Government is pulling out all stops to sell this program as good news. Last week I received, as well as did all other Members of Parliament, an attractive promotional binder on the six and five program from the Davey-Joyal Committee. It is a clever piece of work because it avoids the charge of being partisan by avoiding mention, by name, of the Liberal Party of Canada. But in substance it is no different than the Liberal Party strategy binder that the committee distributed to Cabinet Ministers and Government Members of Parliament over the summer.
This attractive document, some 150 pages in total, goes on at length about selling the program to ordinary Canadians and enlisting support of big business. As we all know, big business is flocking to six and five like lemmings to the sea. Keeping wages down and undermining Government social programs, is just the kind of thing which gladdens the hearts of corporate generals.


Rodney Edward Murphy: And of the Tories and Liberals.


Terence James (Terry) Sargeant: Yes, the Hon. Member for Churchill is correct. Senator Davey and the Secretary of State (Mr. Joyal) are proud that they have kept their promotional budget for six and five to less than $100,000, but for the majority of Canadians that $100,000 might as well have been spent on potted plants for Government offices.
The Government's six and five program is a sham. It is the kind of thing that is bound to win support from the Tory benches, but we in this Party will have no part of it. It is an attack on collective bargaining rights for public servants, on

December 8, 1982
Supplementary Retirement Benefits Act (No. 2)
our system of social security and on the public servants' own pension plan, as we see in this Bill before the House. At the same time it is intended to create the illusion that the Government is doing something about the declining purchasing power of poor and middle-income Canadians, while in fact money is being taken from the poor and given to the rich.
Bill C-133 is a distasteful piece of legislation. Through this Bill the Government intends to reduce the pensions of Public Service employees, derived from their own pension funds.
Just before I conclude, let me read a couple of paragraphs from a news release put out by the Public Service Alliance of Canada. It is dated December 7, 1982, and concerns Bill C-133. In part, this release reads:
Again, this is a deception being perpetrated by the federal government. The same government that reneged on signed contracts with its own employees is now reneging on a legislative agreement with its former employees.
Federal public service employees have been deceived by their own employer. They have contributed to a pension plan under the condition that they would receive a fully indexed allowance but the government has unilaterally changed the rules, leaving pensioners stranded.
The reduction in the indexing of federal public service pensions is a punitive measure aimed at those who can least afford it and the minimal saving will do nothing to improve the economy.
That last sentence says it all.
Mr. Speaker, this Bill is a punitive measure. It represents a minimal saving to the Government but at a high cost to those who can least afford it. It will do nothing, I repeat, nothing to improve the economy. It is for these very reasons, Mr. Speaker, that I and my Party oppose this legislation, just as we opposed Bill C-124, Bill C-131 and Bill C-132. We will not be party to any legislation that breaks faith with the Public Service workers or the pensioners of this country.


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I will be relatively brief in my remarks. This matter came most directly to our attention when we dealt with Bill C-124. My opposition to that Bill was expressed in the usual way here on the floor of the House by my recorded vote in opposition to it. I voted in opposition because it was abundantly clear what the Government intended to do. There was an understanding and agreement that such universal programs and commitments were made to public servants, maybe not contractually in written form and on paper, but nevertheless valid, not only in my judgment but in the minds of upwards of
200,000	retired public servants, their widows and other dependants. They were absolutely certain in their minds that there was an understanding and an agreement.
As with that measure then, the same holds true with respect to the measure currently before us, and it is my intention to vote against it as well. I do so because it does not represent, as offered by Government, the means of bold leadership on restraint in this country. It represents to me the conundrum which people must face when they are faced with decisions made in principle or on principle. Principle, it seems to me, is never changed. Frequently the method of expressing principle is changed. Here we do not have that course of action on the
part of the Government but, rather, quite the opposite. The principle is of no concern whatsoever, expediency is.
I have one or two comments with respect to the silence of the junior Government Member from the electoral riding of Halifax, the Minister of State for International Trade (Mr. Regan). I wonder, as do thousands upon thousands of public sector employees in the metropolitan area of Halifax-Dart-mouth why the Minister has been silent on this subject. He is derelict in his responsibility to those people. The Hon. Member for Halifax West (Mr. Crosby) and myself have taken a common stand. We have invited the Minister's participation on behalf of one of the largest groupings of public sector employees in this nation, but we have had no response. The Minister has remained silent. Eventually he will have to answer to those people in his constituency who will be most directly affected by this legislation.
It is not my intention to put numbers on the record, the numbers involved in this Bill or the number of people affected. This job has been done by many others. The amount of money involved is relatively small compared to our deficit. We have a deficit rising toward $26 billion. The amount of money that is to be saved through this legislation represents only 0.02 per cent of the deficit. The amount, when looking at total Government expenditures, is virtually nothing. We bail out CNR. We bail out CBC annually. We bail out Air Canada and any company that needs bailing out: Chrysler, Massey-Ferguson to name two, all of this in the name of saving jobs.
Surely this Government recognizes that our country will not progress with regressive legislation such as is before us. This Bill is odious. It is unjust. It perpetrates inequities upon those who place trust in it. It affects the pension base of thousands upon thousands of public servants who will be retiring in the next two to three years. This Bill seriously affects the base from which calculations will be made. All one has to do is to multiply this base throughout years of retirement.
This Bill represents a loss of many, many thousands of dollars. It represents a loss to widows and other dependants of deceased employees. This Bill is wrong. The Government was wrong to consider it. Whether or not the Government did this out of concern or to get on the bandwagon with the private sector, I do not know. Certainly the six and five program was a follow-the-private-sector role, as we now know from evidence clearly before us. It was not, as the Government suggests, leadership in the restraint program which, God knows, this nation needs. I repeat, this Bill should be opposed.
I would hope that those on the other side know the deep concern this holds for retired public sector employees, serving employees, not only in the Public Service but in Crown corporations, the Armed Forces, the RCMP-in fact, for employees throughout the public sector. Members on the other side know, they know it in their hearts. I wonder how they are going to deal with principle. I wonder whether they are going to let what they clearly understand to be principle be subjected to the view, or someone's view over there, that this Government must not fall.
December 8, 1982

Every thoughtful person would honour those who work diligently and loyally throughout their mature years. We should honour that work, respect and commitment. Hopefully those Members will later today stand up and oppose this odious, unfair and iniquitous piece of legislation.


Mr. Dan McKenzie (Winnipeg-Assiniboine):: Mr. Speaker, we are debating Bill C-133 this afternoon, which is a Bill to amend the Supplementary Retirement Benefits Act. I would suggest that the Liberal Government is working in reverse. There are other areas upon which the Liberal Government should be focusing its sights. This Government should eliminate waste and mismanagement within the federal Government. By eliminating the waste and mismanagement which is in the billions and billions of dollars, then inflation will drop and indexing will look after itself. We will not have to worry about indexing once we get Government spending under control. The federal Government here could well look to the Province of Manitoba as to how it pays for its indexing. The Roblin Government set up a plan a number of years ago whereby pension moneys are invested to cover the indexing for civil servants in Manitoba. All the indexing comes from the investment of their funds, not from taxes or from general revenues. It is one of the best pension plans in Canada, and it is unfortunate that the federal Government did not implement a similar plan.
To give some examples of waste, where we could start is by considering the document I have in my hand which has just been widely distributed across Canada. It is a transcript of the Prime Minister's (Mr. Trudeau) broadcast to the nation on the economy. There was absolutely no need for this document to be printed. No one is interested in it. It is just an absolute waste of money. In the broadcast, the Prime Minister said:
Of course I am concerned about waste, very concerned. Where we find it, we will weed it out.
Those were empty, meaningless words. The man does not mean what he says and he never has since he took over the country in 1968. We have heard these statements starting in 1968, and we are hearing them in 1982. He does not mean what he is saying because if he did, he would not allow a document like this to be printed and distributed because it will just end up in the trash-can.
Repeated reference has been made to the Joyal-Davey Report on the six and five progress. It is the most expensive Liberal householder that has been put out in Canadian history. It is just propaganda. It is not required. It is costing hundreds of thousands of dollars, and it is simply not needed.


Some Hon. Members:: Hear, hear!


A. Daniel McKenzie: The Government should pay more attention to the Report of the Auditor General of Canada to the House of Commons.


Some Hon. Members:: Hear, hear!
Supplementary Retirement Benefits Act (No. 2)


A. Daniel McKenzie: We receive this Report every year, but the only difference between last year's and this year's Report is that this one is worse than last year's. They never get any better. The Liberals have been in office since 1968 and they have no intention of eliminating waste, Mismanagement and duplication. They simply have no intention of doing it, and one must simply read this document to find that out, because it gets thicker every year, not thinner, and the horror stories mount up.
The Auditor General pointed out that about $16 billion is missing some place. An article in the Ottawa Citizen dated November 2, 1982, states:
Auditor General Kenneth Dye has again proved that this federal Government is at worst not competent to manage money, and at best reluctant to let us know how they handle it.
That is the understatement of the year. So, what are we doing? We are debating a Bill to cut pensions and retirement benefits. The Government is starting at the wrong end. That is easy. Anyone can go out and cut pensions. But why does it not implement the recommendations in the Auditor General's Report? I have not heard any Liberals discuss that.
I have in my hand a research paper which is full of horror stories within the Liberal Government. I would simply like to read a couple of the examples for the records. One states:
Spending "Cut" by Juggling the Books. In order to present the illusion of slower spending growth, the Government has changed its accounting system by netting out petroleum taxes against petroleum compensation payments. Thus, through a wave of an accountant's magic wand, spending on a public accounts basis is "cut" by $2.7 billion in the current (1981-82) fiscal year.
That is an example of the type of bookkeeping of these Liberal Governments. I guess that in order to account for this $2.7 billion, the Government will reduce old age pensions. The item continues to read:
Perhaps the next accounting trip of the Government will be to say that "income taxes are really a public debt tax, and as such interest on the debt does not cost the Government anything." The logic of this is the same as the logic used by the Government in saying that it does not cost anything to subsidize imported oil.
That statement came from a Progressive Conservative research analysis based on the 1981 budget. That is an example of juggling the books. 1 say: never mind juggling the books; start balancing the books and start spending the money properly.
The classic example of horror stories is found in Public Works. It just goes on and on. There is absolutely no control in Public Works. We have empty offices all over the place. Petro-Canada has skyscrapers in Calgary which are full of empty offices and it is building another skyscraper. There is absolutely no need for Petro-Canada to be building any more skyscrapers or to be obtaining any more office space. The Government could reduce the amount of office space it has instead of starting to cut old age pensions and retirement benefits.
With reference to Bill C-133, I would like to point out the average pension income for retired Government workers. It amounts to $6,900 for retired workers and their survivors, and old age pension adds another $2,963. The national average

December 8, 1982
Supplementary Retirement Benefits Act (No. 2)
poverty line for a single person is $7,940 and $10,400 for a couple. These figures are derived from Statistics Canada "Low Income Cut-Offs of Family Units, 1981", adding 10.8 percent to allow for inflation.
The Government estimates saving $85 million by restricting indexing of Public Service pensions to six per cent and five per cent. The source of this figures comes from the June budget papers. Supplementary Estimates (B), on the other hand, ask for $1.9 billion in discretionary non-statutory spending. This amount is more than the estimated $1.4 billion required to bring all senior citizens in Canada above the poverty line.
The Progressive Conservative Government of 1979-80 was able to trim $500 million from the federal budget without any income penalties to retired civil servants or senior citizens in general. About $445 million would be paid out in benefits this year, according to the Treasury Board, and $420 million will come out of the Consolidated Revenue Fund, with only $25 million covered by the contributions made by pensioners when they were employed. This is because the plan was only implemented in 1971, but benefits are extended to all retired public servants, whether or not they contributed to the fund.
As time goes on, the drain on the CRF will diminish and the supplementary retirement benefits account will pay a larger share of the benefits. The total cost of indexing the pension was about 4.5 per cent of payroll last year from regular public servants. Pensions for the Armed Forces and some other groups are administered separately.
Since the Supplementary Retirement Benefits Act was passed in March, 1970, it has been amended six times. Over the same period, the Old Age Security Act has been amended 16 times. The Government is seeking approval to reinstate the cap of indexation which was removed in September, 1973. This piecemeal, patchwork approach to pensions is an insult to the senior citizens and a waste of expensive parliamentary time. A bona fide pension fund should be considered, as the one in Manitoba I mentioned which was brought in by a Conservative Government a number of years ago. It is financially sound because pension money is invested instead of being put into general revenue. The present arrangement provides no guarantee of future financial soundness and is too open to meddling from a Government which cannot keep its accounting straight, and I gave examples of its trickery.
The present employees' contribution rate of 1 per cent of salary to the SRBA provides only for a 1.5 per cent inflation rate in the future, according to the Treasury Board. There is $15.5 billion in the basic pension account, the public service superannuation account. An actuarial analysis claims that all of this, including interest, will be required to meet future benefit payments. The level of Government-employer contributions to the PSSA and SRBA should be investigated to determine if they have been adequate. The massive amount of money in the PSSA might be able to cover the cost of pension indexation throughout the SRBA, especially if the funds were invested at a high rate of interest, as I mentioned was done in Manitoba, or some other changes were made. There is no question about the fact that the federal pension plans could
stand some improvement in the way they are handled. As 1 mentioned earlier, the indexing in Manitoba is not a drain on the taxpayers of Manitoba. It is a sound, well-administered pension plan, and it is most unfortunate that the Liberal Government did not study this plan. If it had, we would not be in quite the same mess that we are today.
This is a regressive piece of legislation. The Government is working in reverse. If they were carrying out the recommendations in the Auditor General's Report, eliminating the waste and mismanagement which is costing billions and billions of dollars, this would reduce inflation and we would not have to be launching an all-out attack on pensioners, and retirement benefits in general.
1 am prepared to vote against this Bill, Mr. Speaker.


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


Some Hon. Members:: Question.


The Acting Speaker (Mr. Blaker):: The question is on the amendment (Mr. Baker) (Nepean-Carleton). Is it the pleasure of the House to adopt the amendment?
Those in favour of the amendment will please say yea.


Some Hon. Members:: Yea.


The Acting Speaker (Mr. Blaker):: Those opposed to the amendment will please say nay.


Some Hon. Members:: Nay.


The Acting Speaker (Mr. Blaker):: In my opinion, the nays have it.
And more than five Members having risen:


The Acting Speaker (Mr. Blaker):: Call in the Members.


Madam Speaker:: Messrs.
Supplementary Retirement Benefits Act (No. 2) Motion (Mr. Baker (Nepean-Carleton)) negatived.
MacDonald (Miss)
(Kingston and the Islands) MacKay Malone Manly Mayer
Mazankowski McCain McDermid McDonald (Ms.)
(Broadview-Greenwood)
McGrath
McKenzie
McKinnon
McKnight
McLean
McMillan
Mitges
Murphy
Murta
Neil
Nickerson
Nielsen
Nowlan
Nystrom
Oberle
Orlikow
Paproski
Parker
Patterson
Reid
(St. Catharines)
Riis
Roche
Rose
Sargeant
Schellenberger
Scott
(Hamilton-Wentworth) Scott
(Victoria-Haliburton) Shields Siddon Speyer Stevens Stewart Taylor Thacker Thomson Towers Waddell Wenman Wilson Wise Wright Young-111.
++NAYS


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Madam Speaker:: All those in favour will please say yea.


Some Hon. Members:: Yea.


Madam Speaker:: All those opposed will please say nay.


Some Hon. Members:: Nay.
And more than five Members having risen:


Madam Speaker:: Call in the Members. Shall we dispense with the ringing of the bells?


Some Hon. Members:: Agreed.


Madam Speaker:: I declare the motion carried.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Madam Speaker:: It being 7.40 p.m. this House stands adjourned until tomorrow at two o'clock p.m.
At 7.40 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, December 9, 1982