1982-02-09

Hon. James A. McGrath (St. John's East):: Madam Speaker, I rise under the provisions of Standing Order 43. I believe, Madam Speaker, you will find after consultation that there is unanimous consent for this motion which is on a matter of urgency because there is a resolution before the European Parliament which would have the effect of banning the importation of seal products into the countries of the European Economic Community. Therefore, 1 move, seconded by the hon. member for Don Valley East (Mr. Smith), and with the support of the hon. member for Nunatsiaq (Mr. Ittinuar):
That, in the opinion of this House, the annual harvest of harp seals by Canadians is an important source of income to a large proportion of the native population of northern Canada and approximately 6.000 Fishermen living in Newfoundland and Quebec, which last year generated well over $12 million into the economy of these areas, and that this House reaffirms the right of Canadian sealers to go about their legitimate pursuit under the strict supervision of the Government of Canada, free from harassment and interference.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Madam Speaker:: Does the House agree to the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Hon. Steven E. Paproski (Edmonton North):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Considering that a member of the Ukrainian Helsinki Group was recently transferred to KGB headquarters and is being charged with "verbal agitation and propaganda" for having written to the United Nations describing severe conditions in the labour camp where he was previously held, I move, seconded by the hon. member for Saskatoon West (Mr. Hnatyshyn):
That the Canadian government make representations on behalf of Vasyl Ovsiyenko to the Soviet authorities in order that these charges be dropped and Ovsiyenko freed.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
Mr. Doug Anguish (The Battlefords-Meadow Lake):: Madam Speaker, I rise under the provisions of Standing Order 43. Some members of the Conservative Party have been creating the illusion that they would not change the Crow rate if they were in government. The former Tory minister of transport, the hon. member for Vegreville (Mr. Mazankowski), is quoted as saying, "I want to assure you that any change in the application of the Crow benefit will come only after there is full consultation with the producers-" and "-if there is any change of application of the Crow rate it will have to be coupled with adequate service guarantees-". Therefore, since it is clear that the policy of the Conservative Party is not to keep the Crowsnest Pass rate, I move, seconded by the hon. member for Dauphin (Mr. Lewycky):
That the Conservative Party commit itself immediately to full public support of Liberal attempts to change the Crowsnest Pass rate, so that its public position reflects its real position, which is to abandon the Crow rate.


Mr. Mazankowski:: What did Blakeney say?


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

February 9. 1982


THE ECONOMY
Mr. Geoff Scott (Hamilton-Wentworth):: Madam Speaker, given the assurance of the Prime Minister (Mr. Trudeau) to the House yesterday that "this cabinet and caucus is very much united", I know this motion will receive unanimous consent. I move, seconded by the hon. member for Yukon (Mr. Nielsen):
That the government bring forward measures to stimulate the housing construction industry because of its well-known spin-off effects and help business hire more youths under the age of 25 right now, and that the government adopt these proposals as set out in a letter dated February 3, 1982, sent to the Prime Minister, released publicly, and signed by the Minister of National Health and Welfare and the Minister of State.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Doug Neil (Moose Jaw):: Madam Speaker, over one year has gone by since the Minister of Agriculture (Mr. Whelan) agreed to refer Bill C-245, to repeal the PFA Act and set up a trust to fund research into cereal grains and oilseeds suitable for use in the Canadian Wheat Board area, to committee. Almost six months have gone by since western grain farm organizations formed the Western Grains Research Foundation with similar objects to those set forth in Bill C-245. To date the minister has taken no action, with the result that approximately $2 million of interest on the prairie farm emergency fund producers' money has been lost to research. I move, seconded by the hon. member for Assiniboia (Mr. Gustafson):
That the Minister of Agriculture take immediate action to ensure that the money held in the prairie farm emergency fund, together with accrued interest since February 3, 1981, be made available for research and development as proposed by both Bill C-245 and the Western Grains Research Foundation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIRPORTS
Mr. Edward Broadbent (Oshawa):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. I move, seconded by the hon. member for Churchill (Mr. Murphy):
That this House require the government to put an end to the bureaucratic control exercised by the Canada Lands Company (Mirabel) Ltd., which in requesting the investment of millions of dollars in Canada is merely looking after its own interests, and that the government immediately return all land unnecessarily expropriated.


Madam Speaker:: Under the provisions of Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mrs. Ursula Appolloni (York South-Weston):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgency that was raised yesterday in this House but was denied unanimous consent by some hon. members. I am referring to the comments made about blacks in South Africa by the hon. member for Winnipeg-Assiniboine (Mr. McKenzie). Once again, Madam Speaker, I move, seconded by the hon. member for Parkdale-High Park (Mr. Flis):
That this House request the member for Winnipeg-Assiniboine to retract his repugnant and despicable statements; failing this, that this House urge the Conservative caucus as well as the Right Hon. Leader of the Opposition to expel the member from their caucus.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENSIONS
Mr. Vince Dantzer (Okanagan North):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. In his address to the National Pensions Conference in March, 1981, the Prime Minister said:
February 9. 1982

We are determined to bring about a substantial pension reform-that determination imposes a sense of urgency.
The Prime Minister then promised a July meeting with the provinces on pensions. We have had no such meeting. The government then promised a green paper on pensions for October. We have had no such green paper. October became December, December became February, and now we are told that we should expect it in May, and the paper is no longer green. Therefore I move, seconded by the hon. member for Calgary North (Mr. Wright):
That this House censure the Prime Minister, the Minister of Finance and the Minister of National Health and Welfare, all of whom were participants in the National Pensions Conference held in Ottawa last March, for their irresponsible delay in failing to provide adequate or any solution to the urgent and pressing needs of pensioners in Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE JUDICIARY
Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. With respect to the recent appointment of the defeated former New Brunswick Liberal leader, Joe Daigle, to the $70,000 a year seat on the New Brunswick Court of the Queen's Bench, and the earlier appointment of his defeated predecessor to the provincial supreme court in 1978, I move, seconded by the hon. member for York-Sunbury (Mr. Howie):
That this House commend the Minister of Justice for his noble and purely humanitarian gesture and trust that he will continue his completely impartial and unbiased practice of appointing all has-been Liberals to such esteemed and lucrative positions.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN ARMED FORCES
Mr. John McDermid (Brampton-Georgetown):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. The Ministry of National Defence has recently initiated a new recruitment campaign for the Armed Forces. Recruitment officers in employment centres across the country are informing applicants that successful cartilage
Oral Questions
operations will not be a deterrent to their admission into the forces. However, young persons are, in lact, being turned down by the Armed Forces after initial recruitment on the grounds of non-medical compliance, simply because they have undergone corrective surgery for cartilage-related problems. In light of this unfair practice, I move, seconded by the hon. member for Prince Edward-Hastings (Mr. Ellis):
That the Minister of National Defence review recruitment procedures with a view to eliminating unfair and unduly restrictive requirements, without which young persons who have corrected minor medical problems would be admitted into the forces.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, I want to come back to the question of the split in the government over the budget, and I would address my question to the Prime Minister who will recall, I am sure, the classic definition of cabinet solidarity as given by the late Prime Minister Sir Wilfrid Laurier on the occasion of his firing of the minister, Israel Tarte, from his cabinet over a disagreement on tariff policy. Mr. Laurier said at that time, in 1903:
it would be a mere redundancy for me to affirm that the necessity for solidarity between the members of the same administration is absolute; that the moment a policy has been determined upon, then it becomes the duty of every member of that administration to support it and to support it in its entirety.
That was Prime Minister Laurier's standard, and it has been the standard of all Prime Ministers to this date. Does the Prime Minister accept that definition of cabinet solidarity?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I am satisfied that the caucus is entirely behind the Minister of Finance in this matter.


Mr. Crosbie:: How far?


An hon. Member:: What about the cabinet?


Pierre Elliott Trudeau: And the cabinet, too.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: The Leader of the Opposition is not so satisfied. I just ask him to keep that in mind the next time he is asked to form a cabinet.

February 9. 1982
Oral Questions


Geoffrey Douglas Scott: That will be soon, Pierre.


REQUEST THAT TWO MINISTERS BE FIRED
Charles Joseph Clark: The
Prime Minister dismisses a century of parliamentary tradition-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: -trying to keep together his tattered and divided cabinet. The Prime Minister will know that in the speech dated January-


Miss Begin:: Twenty-fifth.


Charles Joseph Clark: -twenty-fifth. I thank the Minister of National Health and Welfare in one of her last actions, I trust, if she is a woman of principle in the cabinet.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The Minister of Finance said at that time in a speech, part of which the Prime Minister quoted selectively, and I am quoting the minister:
For all these reasons, I believe that we must resist the temptation to veer away from restraint, whether to gain a temporary and minimal increase in jobs or simply to reap the transitory political benefits.
That was the Minister of Finance's statement on January 25.
We now have both the Minister of State and the Minister of National Health and Welfare veering away from the central policy of the budget, that of restraint, admitting that they cannot compute the cost in millions of dollars of the programs they are recommending in disagreement with the minister. Obviously we have a clear disagreement between what the Minister of Finance has said and what two of his cabinet colleagues have said.
My question to the Prime Minister is very straightforward. Is he going to fire the two ministers who disagree with his Minister of Finance, or is he going to abandon the Minister of Finance and abandon a century's tradition of cabinet solidarity?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: As I said yesterday, Madam Speaker, the Leader of the Opposition is showing more concern about unity in our government than he is about unity in his own party.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: That is the way he has of forgetting his own problems. I can assure the Leader of the Opposition that I have heard these ministers in and out of cabinet, I saw them vote on the budget, I saw them supportive of the budget, and I have seen them exercise that role in caucus, in cabinet, and in the House of Commons. That is satisfactory to me.
Now, if the Leader of the Opposition wants to get a great deal of joy out of quoting Laurier, I can understand that because he is one of the great men to whom they should look.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I only hope that this line of questioning will continue for quite a while, because I am happy with the situation in my caucus. I can understand why the Leader of the Opposition is not happy with the situation either in his caucus or in our caucus, but let us continue to discuss it. I would like to hear some more quotes from the opposition, preferably from Sir John A. Macdonald this time.


Some hon. Members:: Hear, hear!


QUERY RESPECTING FREEDOM OF MINISTERS TO DISAGREE ON POLICY
Charles Joseph Clark: Madam Speaker, as the Prime Minister did when he described hon. members of Parliament as nobodies, and as he did when he muzzled this House, he now proposes to joke about the fundamental traditions of our Parliament as he ignores them. Our interest here is not in quoting Laurier; rather, our interest here is to ensure that respect is given to what Laurier stood for and what every Prime Minister before this Prime Minister stood for in terms of cabinet solidarity.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: I would like to make the very loose standards which the country has come to associate with this Prime Minister exactly clear. Is the Prime Minister now saying that because the Minister of National Health and Welfare, the Minister of State, and Lord knows how many other ministers, have written to him disagreeing with his Minister of Finance, and because they once voted for the budget, they are free to disagree with every major thrust the Minister of Finance puts forward? That is what the Minister of National Health and Welfare has done. That is what the Minister of State has done. If that is the standard of the Prime Minister, let him say so; if it is not, let him tell us his standard of cabinet solidarity.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, there is a very simple test of cabinet solidarity, and it is the one which Laurier applied. The right hon. member should look at the circumstances described by Laurier in the case he cites. It is that, when a minister disagrees with the cabinet, he resigns from that cabinet.


Mr. Nielsen:: Right on!


Mr. Baker (Nepean-Carleton):: Or she resigns.


Pierre Elliott Trudeau: Or she resigns if she disagrees with the position of the budget or of the government on any particular
February 9, 1982

matter; or, if he or she is a member of the caucus, he or she does what members in the caucus of the Leader of the Opposition did. He or she resigns from the caucus and gets out.


Walter David Baker: That's right.


Pierre Elliott Trudeau: That is what cabinet solidarity means. In every other circumstance, the ministers and the caucus are holding together, and they are sticking with the government. This does not mean, as I said-


John Carnell Crosbie: The weasels, Allan.


Pierre Elliott Trudeau: It is really very interesting to see the amount of time we will spend in this question period answering questions by the opposition seeking out a division in this caucus. If there is a division, why don't the members sit as independents?


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: You have an example. Just in the past months two hon. members of that caucus left the caucus because they disagreed with the Leader of the Opposition. We did not spend our time gloating about it.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: We have the same freedom every time there is a vote on the budget. I have a lot of time to give to this subject, Madam Speaker.


Walter David Baker: We haven't, for you!


Pierre Elliott Trudeau: I hope you will let me stay on my feet in spite of all of this heckling and guffawing. I have more to say, Madam Speaker.


Some hon. Members:: Hear, hear!


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


PRIME MINISTER'S RESPONSIBILITY
Charles Joseph Clark: Madam Speaker, I will be brief, but I want to pursue-


Some hon. Members:: Bravo!


Charles Joseph Clark: The Liberals are trying to shout me down, Madam Speaker.


Some hon. Members:: Oh, oh!


Mr. Chretien:: We love you, Joe!


Mr. Hnatyshyn:: Very difficult for you, Allan!


Charles Joseph Clark: I do want to pursue this brand new theory of cabinet solidarity which the Prime Minister is bringing out in contempt of the conventions-
Oral Questions


An hon. Member:: We like it!


Charles Joseph Clark: Yes. Yes, the Liberals like it because it is in contempt of Canadian history and Canadian practice.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The Prime Minister has just said that cabinet solidarity is honoured by ministers, and that if ministers disagree with a policy, they resign. In other words, the responsibility is theirs. That was not Laurier's view. Laurier believed that a leader has a responsibility. Laurier believed that if there was a disagreement such as now exists in the cabinet of Canada, the Prime Minister had a responsibility to find the courage either to fire the dissident members or fire his Minister of Finance.


Erik Nielsen: Or resign as a bloc.


Charles Joseph Clark: Or resign as a bloc.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: The Prime Minister smirks.


Some hon. Members:: Order.


Madam Speaker:: Order. It is going to be one of those days, like it was yesterday. I am afraid we are very late in the progress of our question period. I have to ask members on both sides of the House to be very brief in their questions.


Erik Nielsen: And their answers.


Charles Joseph Clark: We will be brief in our questions, and I trust in the answers and the heckling. My question of the Prime Minister is this. Does his brand new theory of cabinet responsibility and cabinet solidarity mean that the Prime Minister can abdicate all responsibility for maintaining a common front and maintaining cabinet solidarity? Is it entirely up to the ministers, or will the Prime Minister accept his duty to ensure that his ministers speak with one voice, instead of saying one thing through the voice of the Minister of Finance and a totally different thing through the voice of the Minister of National Health and Welfare?


Pierre Elliott Trudeau: Madam Speaker, I hope a great deal more of this question period will be taken up with the expression of concern on the other side for a division in this cabinet.


Mr. Waddell:: Why don't you talk about jobs?


Pierre Elliott Trudeau: Why don't you talk about jobs? I do not think the member of the NDP, arrogant as he is, can suggest-


Some hon. Members:: Oh, oh!


Madam Speaker:: Order. I simply ask the Prime Minister to answer only the question that was asked of him, and not encourage the hecklers.

February 9, 1982
Oral Questions


Pierre Elliott Trudeau: I accept your direction, Madam Speaker. 1 point out to the member of the NDP that I cannot be faulted for answering a question from the Leader of the Opposition.
I put it to the Leader of the Opposition that the test of any Prime Minister, and that certainly included Laurier, was not to go to the Leader of the Opposition to ask him what he thought about the solidarity of the government's cabinet. If I want to change ministers or ask for their confidence, I will do it because I judge it as necessary to show that this government is united on this budget. I do not think it was Laurier's theory that I should go to the opposition and say, "Now, are you satisfied with the solidarity in my cabinet? Do you think everything is okay over here because, if you don't, I will ask for a few resignations." I am satisfied with the state of this government.


Some hon. Members:: Hear, hear!


Erik Nielsen: You are the only one.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: There is great jubilation over there about the state of this government. Let them continue worrying about solidarity on our side. It will help them to forget about the knives that are being stuck into the Leader of the Opposition's back by his own party.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Walter David Baker: That, ladies and gentleman, is our Prime Minister!


INQUIRY WHETHER MINISTER OF AGRICULTURE WROTE LETTER REQUESTING BUDGET CHANGES
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, let me remind the Prime Minister that there is a reason why we are pursuing this matter. It is because the people in this country do not know whether to listen to the Minister of National Health and Welfare, the Minister of State, the Minister of Finance or the Prime Minister. That is the point that is at issue, not the flippant responses he has given us just now. We have had an incredible display here of political cowardice-


Madam Speaker:: Order, please. At this time we usually go to the other party. The official opposition has already taken the first 15 minutes of question period.


John Carnell Crosbie: Blame the Prime Minister. No, we will not put up with that. There is the guilty party right there!


Madam Speaker:: Order, please. Obviously, there have to be answers to the questions. The point is that this first question has taken 15 minutes, and I do have to enforce the rule strictly. Otherwise, I will have to move on to the other party.


Michael Holcombe Wilson: Madam Speaker, I will be brief, but I need one sentence of introduction. The point is that there has been an incredible display of political cowardice-


Some hon. Members:: Order.


Michael Holcombe Wilson: -where a minister, after voting for the budget, has turned right around-


Madam Speaker:: Order. The hon. member knows that he is supposed to ask a question, not make a speech or comment on answers.


Michael Holcombe Wilson: Madam Speaker, then let me put my question to the Minister of Agriculture.


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: Send him back to the minors.


Walter David Baker: Can you not keep order, Madam Speaker?


Michael Holcombe Wilson: Since the Minister of Agriculture has been known to be in opposition to this budget, and since one of his staff has said that there is nothing in the budget for agriculture, has the minister written a similar letter to the Prime Minister asking for changes in the budget?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, I want the hon. member to know that I am not aware of any of my staff saying that there is nothing in the budget. 1 think I have sent at least 1,000 letters to people who have asked me what is in the budget.


Some hon. Members:: Oh, oh!


Eugene Whelan: We have explained to them what is in the budget. There are some very good things in the budget for agriculture. Changes were made by the Minister of Finance in December-


Charles Joseph Clark: Order!


Eugene Whelan: -which were even better than we had expected at that time.
I want to say to the hon. member that the letters which I exchange with my Prime Minister always have "personal and confidential" on the top.


POSITION OF MINISTER OF INDUSTRY, TRADE AND COMMERCE
Michael Holcombe Wilson: Madam Speaker, it is unlike the letters from the Minister of Health and Welfare and the Minister of State.
My supplementary question is for the Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion. The minister said two years ago that he would resign if interest rates went above the current level of 13 per cent at that time. It has since become common practice for ministers to vote one way in the House and say another thing
February 9, 1982

in their constituencies in order to save their political hides-to use the words of the Minister of Finance, to reap the transitory political benefit.
Would the minister take this opportunity to say what he has proposed to the Minister of Finance and the Prime Minister in support of those auto workers and other manufacturing workers who have been laid off as a result of the budget and as a result of the high interest rate policy of the government, or does he support the high interest rate policy of the government?


Hon. Herb Gray (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, I voted for the budget, as did other members on this side of the House.


Miss MacDonald:: And high interest rates.


Herbert Eser (Herb) Gray: The hon. member is so busy trying to develop fictitious rifts on this side of the House-


An hon. Member:: Answer the question.


Herbert Eser (Herb) Gray: -that he overlooks completely the fact that less than two weeks ago I announced a program to provide $25 million over the next two years to help auto parts companies develop new projects which would bring people back to work and create thousands of new jobs.


Some hon. Members:: Hear, hear!


An hon. Member:: And increased rates.


John Carnell Crosbie: So what.


Herbert Eser (Herb) Gray: I also announced a program involving an expenditure of approximately $93 million to encourage new production facilities in the area of microelectronics and advanced production machinery and which would also assist all levels of industry, including auto parts manufacturing. It will help them to adopt new production processes in order to become more productive and efficient and maintain existing jobs and create thousands of new jobs. The hon. member is talking while we are acting in a concrete way to deal with the real problems of the economy.


RAILWAYS
John Edward Broadbent: Madam Speaker, at last!
I have a question for the Prime Minister. Does the Prime Minister agree that one of the original purposes of the Crow rate was to encourage the establishment and maintenance of rural communities on the prairies and, if so, does he realize that the proposal made by the Minister of Transport in Winnipeg yesterday could have exactly the opposite effect if implemented, namely, the destruction of those communities?
Oral Questions


Pierre Elliott Trudeau: Madam Speaker, the Crow rate was established in order to encourage the development of agriculture in the west. Of course included in that is the establishment of a solid economic base for many communities in the west.
There have been some changes in the country over the last 100 years with regard to methods of transportation, methods of production, the size of our markets, the growth rate of communities, urbanization movements, in demographic movements within Canada, and in changes of the age groups.
After this period of time 1 think it is perfectly reasonable for the government to review something which has existed since the last decade of the nineteenth century, in conjunction with all the interests in the west, and to appoint a westerner, a professor of agriculture and economics in the west, to help bring together the various and sometimes opposing views in the west on how this should be done. That is the position of the government.


PRINCIPLE OF EQUAL RATES FOR EQUAL DISTANCE
John Edward Broadbent: Madam Speaker, I now hope the Prime Minister will deal with the question which I asked. I will put it in more precise form.
Despite the opposition of the overwhelming majority of farmers in the prairies to any move that would change the principle of equal rates for equal distance, the Minister of Transport said in his announcement yesterday in Winnipeg that changing this principle is clearly one option that the government is considering. Does the Prime Minister understand that, if this option is acted upon and this principle destroyed, the railway companies will not only have the power but will also have the financial incentive to destroy hundreds of small communities on the prairies? If he agrees with that, will he take steps to ensure that that option is no longer one which this negotiator can consider?


Pierre Elliott Trudeau: Madam Speaker, the Leader of the New Democratic Party insists that the overwhelming majority of people in the west are opposed to the government's initiatives in conjunction with many western groups.


John Edward Broadbent: 1 am talking about the principle of equal rates for equal distance.


Pierre Elliott Trudeau: I do not know where he gets those statistics.
I know that the NDP is opposed to any change, but I have here a list of many organizations which support a change in the Crow rate. There is Unifarm, 63,000 members; Alberta Cattle Commission, 13,000 members; Alberta pool, 55,000 members; United Grain Growers Ltd., 60,000 members-


An hon. Member:: Order.


Charles Joseph Clark: Who is in charge, Madam Speaker?


Walter David Baker: Order, Madam Speaker.

February 9, 1982
Oral Questions


Pierre Elliott Trudeau: -Saskatchewan Wheat Pool, 70,000 members. So the list goes, Madam Speaker. There is the Canadian Cattlemen's Association, 90,000 members.


Some hon. Members:: Order.


Pierre Elliott Trudeau: Madam Speaker, everyone in the west is not like the NDP. They are not afraid of change. They are not afraid of improving their economic situation by looking again at institutions. They are not slavishly bound to the principles of the Regina Manifesto.


Some hon. Members:: Hear, hear!


REQUEST FOR REMOVAL OF NEGOTIATOR
John Edward Broadbent: Madam Speaker, all I can say to the Prime Minister is that if he had acted on the principles of the Regina Manifesto we would not have the problems in Canada that we have today.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Of course, the Prime Minister was around at the time; he is old enough to have signed it. It is alleged that he believed in it at one time.
1 can provide a list, including the leader of the Liberal party of Saskatchewan, of many groups, including two governments in the prairies-


Walter David Baker: Read it.


John Edward Broadbent: -that oppose what the Prime Minister is doing. He ignored the question. I was talking about the principle of equal rates for equal distance. However, I will set that aside and deal with the man who has been appointed the negotiator. Considering the fact that this man, Mr. Clay Gilson, is the same man who was a member of an earlier Liberal commission which actually recommended the death of many small communities in the prairies, will the Prime Minister at least recognize the importance of such small communities and remove this man from his participation in this important inquiry?


Pierre Elliott Trudeau: Madam Speaker, dealing with the preamble first, the hon. member says 1 could have signed the Regina Manifesto. 1 was in my middle teens then, and I suppose 1 did have the kind of immaturity which would have permitted me to sign it.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: The hon. member says it is further alleged that I still believe-or believed-in the principles of the Regina Manifesto. I ask the Leader of the New Democratic Party, do he and his party believe in the principles of the Regina Manifesto, or have they turned their backs on it now to be a mere opportunistic electorally bound party? The Leader of the New Democratic Party laughs because he does not want
to answer, but his is the party which departed not only from its principles but also from its conscience a long while ago.


Some hon. Members:: Hear, hear!


FISHERIES
John Carnell Crosbie: Madam Speaker, the Prime Minister obviously does not mind having weasels in his cabinet who vote one way and talk another.
My question is to the Minister of Fisheries and Oceans. Two of the minister's colleagues have tried to escape their responsibility for the budget by writing the Prime Minister a letter asking him to adopt certain policies which are not contained in the budget. I call them the Judas goats. Has the Minister of Fisheries and Oceans washed his hands of the budget and of the Minister of Finance, and has he written a letter to the Prime Minister asking the Prime Minister to expedite measures to help the east coast fishing industry which is now devastated and which will not be functioning in April if steps are not taken to give it financial assistance? Has he written to the Prime Minister to save the fishermen? We cannot wait until next summer for the Kirby report. If he has not done that, does the Minister of Fisheries and Oceans support the budget and the policies of the government?


Hon. Romeo LeBIanc (Minister of Fisheries and Oceans):: Madam Speaker, I did not have to write letters to anybody. A few days before Christmas we made decisions in cabinet which in fact allowed the plants at Gaultois and Grand Bank to continue operations. It was the sort of encouragement that allowed the fishery to take place this winter in a disciplined and orderly way and, in fact, which gives me much more of a sign of hope than I have seen for a good number of months. So the hon. member might save his rhetoric and look at what we are doing, not at letters I did not write.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: Madam Speaker, it is good to find one minister with some backbone, and not an India rubber man or woman.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: The minister is going to sink with the ship.


THE BUDGET
John Carnell Crosbie: Madam Speaker, my supplementary question is directed to the Minister of National Revenue. Is the minister a follower or a modern day
February 9, 1982

Pontius Pilate, or will he answer my question? Is he just going to wash his hands of this? The minister realizes the high unemployment rate in Newfoundland, the highest in Canada. He will also realize that the few people working in Newfoundland who are receiving benefits under dental or hospital plans paid for by their employers are being taxed under the budget.
Is the minister making representations to the Minister of Finance to exculpate himself from this responsibility, or does he accept responsibility for the fact that the budget taxes the employed and does nothing for the unemployed? What is his position, or is he going to jump the sinking ship like the other furry creatures across the aisle?


Hon. William Rompkey (Minister of National Revenue):: Madam Speaker, I have said before that this budget is better for the average Newfoundlander than for people in any other province in Canada. There will be 250,000 Newfoundlanders who will benefit. Nineteen thousand families will be better off as a result of this budget. That is far better than imposing an 18-cent tax on gasoline as the hon. member did.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


John Horton McDermid: That will come back to haunt you, Rompkey.


POSITION OF MINISTER OF EMPLOYMENT AND IMMIGRATION
Flora Isabel MacDonald: Madam Speaker, my question is directed to the Minister of Employment and Immigration. Colleagues of the minister, including the Minister of National Health and Welfare, have rejected the restraint measures of the budget and have put forward a new program of grants to encourage business to create jobs for those under 25 years of age. I would like to ask the minister if he also has urged this proposal upon the Minister of Finance, or does he, in fact, reject the proposal put forward by his ten colleagues in the House of Commons at a time when the unemployment level for people under the age of 25 is running at one half million?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, last Thursday in the House when we had an opportunity to debate the question of job creation, I issued an invitation to hon. members opposite to come forward with some constructive proposals about what things we could do. The fact that there were absolutely no constructive proposals coming from the opposition meant we were quite willing to accept them from members on our own side. We seem to be the only ones prepared to come forward with good ideas about how to deal with job creation.
I merely remind the hon. member that in the last several weeks we have brought forward a number of special measures. We have brought forward an innovative measure for work sharing, which has been taken up by members of trade unions and employers right across Canada. We signed an agreement yesterday with the province of Ontario for a job-creation
Oral Questions
program-it could be extended right across Canada-to put many people back to work. We are listening very carefully to members of this caucus who are prepared to be positive and constructive, and not simply destructive like hon. members opposite.


Flora Isabel MacDonald: Madam Speaker, so much for the additional 40,000 people under the age of 25 who last Friday also found themselves without jobs.


POSITION OF MINISTER OF PUBLIC WORKS
Flora Isabel MacDonald: Madam Speaker, I would like to address a question to the minister responsible for housing. Ten Liberal members from Quebec, including the Minister of State, do not believe that the housing measures in the budget go far enough, and they have asked for special incentives for the construction industry. Has the Minister of Public Works submitted any additional housing proposals to the Minister of Finance, or is he content to stick with the budget measures which have been put forward by the Minister of Finance, in defiance of the proposals put forward by two of his cabinet colleagues?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, I am sure Canadians listening to that question understand that it comes from a member of the previous cabinet whose sole offer to assist in housing was the offer to privatize CMHC, to withdraw from social housing, to withdraw support for co-op and non-profit housing, and to back away from housing totally. Our record of government shows that we have supported non-profit housing and co-ops, we have supported supply, and we have supported affordability. That is what we are doing in the legislation which is before the House today. If the hon. member were serious, she and her colleagues would support that legislation to create supply, and that would assist Canadians in a better way than the question she has asked today.


Some hon. Members:: Hear, hear!


RAILWAYS
Mr. Stan J. Hovdebo (Prince Albert):: Madam Speaker, my question is for the Minister of Transport. However, I see that he is again avoiding Parliament and making major policy announcements outside the House.


Some hon. Members:: Oh, oh!


Stanley J. Hovdebo: Yesterday the Minister of Transport made an announcement about $1.35 billion of that elusive Western Development Fund being spent for western transportation needs. This House is well aware of the repeated government folly of subsidizing railway companies. Perhaps the Minister of Agriculture can answer this question.

February 9, 1982
Oral Questions


An hon. Member:: No, he can't.


Stanley J. Hovdebo: What kinds of guarantees will be put into legislation to guarantee that the public and farm users can expect a return on this investment of $1.35 billion of western money? What equity will the government take in the railways if this money is given to them? What service improvements can we expect to have if this money is spent on the railways?


Lloyd Axworthy: Madam Speaker, if the hon. member looks at the proposals which were put forward by the Minister of Transport, he will see that one of the very key principles contained in them is the requirement of performance guarantees by the railroads. It is certainly our basic commitment that any changes to the Crow rate would be brought about by negotiations which would involve all parties, including the railroads, and we would expect not only performance guarantees from the railroads but also that they would produce clear evidence as to how this particular change would go to the benefit of the entire western economy by enabling us to diversify our economy into all kinds of other areas of economic activity, and to ensure that much of the production and the investment by the railroads will be contained within western Canada. I can assure the hon. member that this is one of the most important significant improvements to help develop a new western economy. In other words, we believe that all westerners ultimately will share in that particular commitment.


BENEFITS GIVEN TO CANADIAN PACIFIC RAILWAY
Stanley J. Hovdebo: Madam Speaker, those guarantees we hope will be in the legislation which will come before this House.
I have a supplementary question to the Minister of Agriculture, or to whomever wants to answer it. In the light of what the Right Hon. Prime Minister said in answer to the question from the member from Oshawa, the government seems about to change the Crow rate which is in an act of Parliament, one that westerners regarded as part of the terms of their entering Confederation. If the government can abrogate this statute, take away these benefits to a particular group in the west, the farmers, can the government also take away those benefits which were given to the Canadian Pacific Railway by the Railway Act in 1881, the benefits of 25 million acres of mineral rights? Is it possible that the government could include that in the legislation and renege on that bit of legislation as well as on the statutory Crow rate passed in 1925?


Lloyd Axworthy: Madam Speaker, in reply to the hon. member, the direction and guidelines given to the negotiator are to include all parties who are essential to the development of an expanded railway capacity. The direction that the negotiator will be following in the discussions and consultations will be to determine the best financial formula to be shared by the government, by the producers and by the railroad. The negotiator
must ensure that there is a proper financial package to enable the capital to be invested so we can expand the carrying capacity of the railroad, so the farmers can move their goods, sell on the export market, and so that they can prosper. The best guarantee we can give the western farmers is to help them to move their goods to the market so that they can gain the kind of return they deserve for their products.


CROWSNEST PASS RATE-EFFECT OF CHANGE ON FARMERS
Mr. Len Gustafson (Assiniboia):: Madam Speaker, I have a question for the minister responsible for agriculture. In regard to the statutory Crow rate which, as the member for Moose Mountain said, is the Magna Carta for western Canada, the minister knows that farmers have been faced with the highest cost of production in the history of farming. Fuel costs under this government have risen 65 cents a gallon. Gasoline costs have gone up 86 cents a gallon under this government's administration. Machine costs have gone up 100 per cent in the last three years. Facing these increased costs to farmers, in the minister's judgment is it fair to put the increased cost of freight on the farmers at this time?


Eugene Whelan: Madam Speaker, the hon. member makes far-reaching statements before he asks his question. I would just answer in this way, when he talks about fuel. The farmers in Canada have fuel much cheaper here than the farmers in the United States of America. They are still better off than the main farmers with whom they compete.
The hon. member asks is it fair. I believe that in 1970 farmers were paying about 70 per cent of the cost of transportation of their grain at that time. They will be paying by 1985 about 20 per cent or around that Figure; and by 1990 they will be paying about 7 per cent of the cost. The many farmers whom I have talked to have said, "Look, give us a good transportation system; we are willing to pay more for it." We are not suggesting that they pay the full cost of transportation, we are suggesting that they contribute more to the cost of moving their produce.
The minister has just stated that by moving that grain to market, rather then having it in storage on farms or in elevators, we can show by just a 10 per cent improvement there will be $400 million more into the farmers' pockets in western Canada. That is what it is all about, making that economy stronger, making it work better and in a better fashion for all people concerned.


PROJECTED COST TO FARMERS
Leonard J. Gustafson: Madam Speaker, the minister knows that the national energy policy of this government took $52 billion out of western Canada. Is the minister able to say in this House that, in his judgment, by the year 1986 the cost to the farmer might be, or might not be, $1 a bushel for shipping grain?
February 9, 1982


Eugene Whelan: Madam Speaker, the hon. member in using figures is grasping them out of the sky or some other place. There is no way that we have said they would pay 100 per cent of the cost. The Minister of Transport made it clear in Winnipeg when he made his press announcement, and the document clearly stated, that they will always have preferred treatment for the movement of grain. They will get a bigger share of the cost. As the Prime Minister said, thousands and thousands of farmers said, "We are ready to sit down and talk; we are ready to negotiate a proper program for the transport of our grain so that we can get it to market, so that we can sell the product that we produce."
The former minister of transport can tell you he was about ready to recommend some changes in the current Crowsnest Pass rate himself.


EXCISE TAX
Hon. Marcel Lambert (Edmonton West):: Madam Speaker, my question is to the Minister of Finance. I wonder if the minister remembers that in his budget speech he said that the shift of the excise tax to the wholesale level from the manufacturing level would be delayed until July 1, 1982, to provide time for the business community to study the proposals and make constructive comments.
Madam Speaker, in view of the fact that we are now at February 9 and about to start the study of main estimates, would the minister agree with the submission of the industry as a whole that the effective date should be January 1, 1983, rather than July 1, 1982, because it will be impossible to make the necessary recommendations to him in this matter?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I wish to advise the hon. member that I have had representations from interested groups who have expressed some concern about the implementation date. It is expected that we will be able to produce draft legislation within the next month or so and at that time I would be able to make clear whether it is possible to extend the date of implementation. Certainly the matter will be reviewed in light of the concerns expressed by interested parties.


Charles Joseph Clark: What does Monique think?


REPRESENTATIONS TO COMMITTEE
Marcel Joseph Aimé Lambert: Madam Speaker, I hope the minister will understand that the House committee in this matter will be rather preoccupied with his own main estimates and other matters necessarily referred to it, and cannot dedicate the necessary time to hear public representa-
Oral Questions
tions, which they are allowed to do and should do, so as to make the appropriate recommendations to the government and have them considered by July 1.


Allan Joseph MacEachen: Madam Speaker, 1 do not Find myself in conflict with the hon. member's questioning or with his suggestion. I am saying to him and to the House that I am currently reviewing whether a delay is warranted. It may very well be. 1 will announce my decision when the draft legislation is available for the House.


Charles Joseph Clark: What about Monique?


LABOUR CONDITIONS
Mr. David Orlikow (Winnipeg North):: Madam Speaker, my question is to the Minister of Finance. Some two weeks ago when he spoke to the Canadian Club he said that he was not prepared to stimulate the economy now in order to deal with the increasing unemployment but that, if circumstances changed, he would give some consideration to that idea some six months down the road. Given the fact that since the minister spoke, the new unemployment figures are out, that for the first time since the 1930s we have more than one million unemployed, the ten provincial premiers, and Liberal members of Parliament from Quebec and, we understand, some of the Ontario Liberal members, have called on him to take steps now to stimulate the economy and to start reducing the number of unemployed, I wonder if the minister could indicate whether he is giving serious consideration to doing something now rather than waiting six months?


Allan Joseph MacEachen: Madam Speaker, I am not aware of using the expression "six months" in my Toronto speech. What I did say was that I could not at the present time contemplate a major stimulant of the economy. I listed the reasons why I thought it would not be the best way to create jobs in Canada, that what we might do now we would lose later on. But I said that within the policy of restraint I was quite prepared to state that the government would consider taking targeted and specific measures to improve growth, productivity and investment. 1 believe that the comments made by my caucus colleagues were perfectly consistent with the particular approach I laid out in that speech.


REQUEST FOR POLICIES TO PRODUCE JOBS
David Orlikow: Madam Speaker, this morning's edition of The Gazette reported that 800 workers at Quebec's largest domestic appliance manufacturing plant were laid off last Friday. It is not suprising that Quebec members are concerned about what is happening. Besides the more than

February 9, 1982
Oral Questions
one million unemployed according to Statistics Canada, there are also 400,000 or 500,000 people who have not been counted because they have quit looking for work. How long will we have to wait? How much more unemployment will we have before the minister realizes that his policies are leading to further disaster? Will we receive policies to create jobs rather than to destroy them?


Mr. La Salle:: Will it be another one million, Allan?


Allan Joseph MacEachen: Madam Speaker, the hon. member referred to the appliance industry. Just a week or two ago, in an effort to assist the appliance industry and to change circumstances, we dedicated, I believe, $15 million over a two-year period to assist the industry. It is in that specific targeted way that I believe we can take the best steps at the present time to meet the problems of lay-offs and unemployment.


FORESTRY
Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, my question is directed to the Minister of Employment and Immigration. It is a follow-up to a question which I asked him last year with respect to the serious crisis faced in the forest industry with lay-offs of over 100,000 people throughout Canada. I was delighted to hear yesterday that he followed my suggestion that idle hands in the forest industry should be used in the task of forest renewal and in its various areas. How many agreements has the minister signed with provinces? Is it the intention of the federal government to go into partnership directly with industry to ensure that the gap is bridged, that some of these people retain their jobs, and that in so doing we make a long-term investment in our future, namely, the replenishment and renewal of our depleting forestry resources?


Lloyd Axworthy: Madam Speaker, at this point in time the agreement we signed with Ontario is the only one. It is based upon the proposal to put several thousand workers back into Ontario forests. At the time of the announcement 1 also indicated that that particular arrangement is available to all other provincial governments which have major forest industries within their jurisdiction. I will be writing to the provincial ministers of those provinces to outline the details and criterion of the program. In the hon. member's province of British Columbia there has already been some initial indication of interest. Certainly I welcome his help in developing a program for that province, as I would in any other province.
At the same time we have available for the forest industry the work-sharing concept, which means that forestry companies would be able to maintain part of their work force under a work-sharing arrangement. We would deal directly with the companies and the unions in that respect. I would certainly
welcome any help the hon. member would give in working with the companies and the provincial governments in this area. I would be quite happy to speak with him after question period so that we can work out arrangements.


FUNDING FOR PROJECTS
Frank Oberle: Madam Speaker, as I understand it, the minister is relying solely upon the resources of the unemployment insurance fund to sustain these new programs. Is there any additional money at his disposal to further the aims of what he announced?


Lloyd Axworthy: Yes, Madam Speaker. Just before Christmas we brought forward a special $52 million employment program which had, as part of its reserve, additional moneys for community development projects and a special reserve for what we call "special response features". This means that we can put direct employment money into hard-hit communities. We have already allocated that to certain resource communities, to certain manufacturing areas in Ontario, and to certain Fishing communities. We still have some money available. If the hon. member wants to make representations, I would be glad to hear them.

[ Translation]


PETITION
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the one hundred and seventy-fifth report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for Yorkton-Melville (Mr. Nystrom) on Monday, February 8, 1982, and finds that it meets the requirements of the Standing Orders as to form.


POINT OF ORDER
Hon. Charles Lapointe (Minister of State (Small Businesses and Tourism)):: On a point of order, Madam Speaker.


Madam Speaker:: The Minister of State for Small Businesses, on a point of order.


Charles Lapointe: Madam Speaker, I should like your advice, because I believe that in the course of the debate in the House yesterday, more specifically during the adjourn-
February 9, 1982

ment debate, my privileges as a member of this House have been breached.
Madam Speaker, yesterday evening the member for Nepean-Carleton (Mr. Baker) quoted me as having made a statement regarding the member for South West Nova (Mrs. Campbell), and I formally deny having made this statement. It is just not true, Madam Speaker. I want to make it clear that I have never expressed such views in writing, orally or in any form whatsoever and have no intention of doing so. I think that quoting me as the author not only constitutes a breach of my privileges as a member of this House, it is also an insult to my colleague for South West Nova, and I think the member for Nepean-Carleton should withdraw what he said last night.


Madam Speaker:: The fact that a member quotes another member as the author of a statement does not constitute a question of privilege nor even a point of order. This is the kind of debate we are constantly having in the House of Commons, involving opposing views on the manner in which certain statements are interpreted. The hon. member for Nepean-Carleton made a statement and he interpreted one of the minister's statements. He is responsible for his interpretation, that is all. I am very sorry, but I cannot accept this as the subject of a point of order or a question of privilege.


Miss Coline Campbell (South West Nova):: Madam Speaker, I rise on the same point of order. 1 was the Member of Parliament to whom the hon. member referred. It seems to me a very sexist remark when Members of Parliament are denigrated because of their sex. What would the hon. member for Nepean-Carleton (Mr. Baker) suggest for a male Member of Parliament?


Madam Speaker:: Order, please. Since there was no question of privilege or point of order, I can hardly accept a second speaker on the matter.


PRIVILEGE
Erik Nielsen: Madam Speaker, I rise on a far more serious and important question of privilege.


Some hon. Members:: Oh, oh!


Erik Nielsen: I hear the jeers of Liberal hecklers across the way before they even know the nature of my question of privilege.


Charles Lapointe: I said "Let's hear it".


Erik Nielsen: The Minister of State for Small Businesses and Tourism (Mr. Lapointe) is one of the hecklers. I rise not only as a member of the House to make this appeal on behalf of
Privilege-Mr. Nielsen
every individual member and all members collectively, but as one of the officers of the House who has an obligation and a responsibility to see to it that the constitutional conventions of this place remain intact, indeed that the institution itself is not eroded.
It concerns a very valid distinction which must be made between the concept of cabinet solidarity and collective responsibility. In the former case it is a political question. The splits and the cracks as they show might entertain us, but do not suggest themselves as a remedy on a question of privilege. But the latter principle of collective responsibility strikes at the very heart of the reason for being in this place.
I have only had the opportunity since the matter arose during this question period to provide myself with three precedents which I will submit to the Chair for consideration in a moment.
Collective responsibility, which is not what was being spoken of today in the exchanges but was the subject matter of the exchange, is a concept which legitimizes the position and advantages possessed by the ministry in this House, being responsible government. It strikes at the very roots of responsible government. Responsible government, the foundation of our parliamentary democracy, holds that the ministry must have the support of the majority of the House of Commons to carry out the functions of the administration. I will be citing from Sir W. Ivor Jennings in that light in a moment or two.
Collective responsibility, in my submission, Madam Speaker, recognizes that each of the members of the ministry draws his or her personal mandate from majority support given by the House to the cabinet as a whole. If a cabinet minister, and the authorities are clear on this point, tries to put distance between the cabinet's stated policy and his or her own public declarations, then that person puts himself or herself and the House of Commons in a false position, which the House has a right to see resolved.
In my submission, the cabinet is collectively responsible to the House of Commons for the development of policy and the administration of the government. This responsibility is confirmed in a series of votes held throughout the parliamentary year, most notably the Speech from the Throne, on opposition no-confidence motions and on the budget votes, which we have already taken in this House. It is because the present government has carried the House and its members with it on these votes that it is entitled to carry on as a ministry.
Each individual minister draws his or her own position, authority and privileges as a cabinet minister from the acceptance by the House of the policies of the government. Ministers are accorded by the House the right to answer questions, to table documents, to move certain motions and to speak at times for extended periods. They have larger offices and staff allocations. Flowing from this position in the House ministers are able to exercise executive direction over their departments.
If a minister publicly expresses disagreement with a key element of government economic policy by putting forward the

February 9, 1982
Privilege-Mr. Nielsen
idea that short-term economic stimulation is not antithetical to the long-term battle against inflation, then he or she is directly opposing the stated view of the Minister of Finance (Mr. MacEachen) and is attacking a policy approved by the House when it supported the finance minister's budget.
The two ministers are thereby challenging their own right to continue as ministers because they are challenging the policy by reason of which the House has confirmed the government's mandate as a government. Members of the House are therefore entitled to ask, how do these two members of cabinet justify their continued exercise of the rights and privileges of a cabinet minister when they themselves have rejected the policies on the basis of which the House has allowed them these rights and privileges?
Logically, Madam Speaker, and in constitutional practice, there are only two conclusions that may be drawn. Either the two ministers feel that the House does not in fact still support the budget of the Minister of Finance (Mr. MacEachen) and, therefore, it is the rest of the cabinet, and not themselves, which is ignoring the will of the House. Or the two ministers who signed the letter have chosen to disagree with the policy still supported by this House, and consequently must resign the positions and privileges accorded to those who accept the implications of collective responsibility.
I submit that this interpretation is the normal and obvious one. It is supported by two quotations, one from Laundy and Phillips in "An Encyclopedia of Parliament". The other is from Redlich's "The Procedure of the House of Commons".
Because the House allows specific privileges to ministers and because the majority in the House has supported the cabinet in certain of its policies, cabinet ministers who will not support these policies have an obligation to the House to resign. That is a paraphrase from page xiii of Redlich's "The Procedure of the House of Commons."
As the spokesman of the House to the Crown, I submit that you have an obligation to assist the House in resolving the invidious position in which this House and all of its members have been placed by this utter disregard of the principle upon which the institution itself has been founded, namely, the principle of collective responsibility. Nothing could be clearer from the two references which I have referred to you for your consideration.
In "An Encyclopedia of Parliament", the pages for reference are numbers 66 and 67. I will quote briefly from the bottom of page 66 as follows:
The cabinet is thus a committee drawn from the ministers of the government, presided over by the Prime Minister, whose function is to frame the general policy of the government and to co-ordinate its administrative activities. It accepts collective responsibility for all the activities of the government, from which it follows that there must be no fundamental disagreement amongst its members.
Further on in the same paragraph, we find this:
Every minister must abide by cabinet decisions or resign, and an attack upon an individual minister is an attack on the cabinet as a whole.
Cabinet proceedings are then described, and so on.
I have one last quotation for the attention of the Chair from Sir W. Ivor Jennings. It is found in the third edition of "Cabinet Government". I do not think there can be any doubt about the standing of Sir Ivor Jennings as an authority. No one would quarrel with him. Here is what Sir Ivor Jennings says about cabinet responsibility, since the Prime Minister (Mr. Trudeau) does not seem to like the word "Solidarity". At page 277 of the third edition, Jennings quotes Lord Salisbury as follows:
It is only on the principle that absolute responsibility is undertaken by every member of the cabinet who, after a decision is arrived at. remains a member of it. that the joint responsibility of ministers to Parliament can be upheld, and one of the most essential principles of parliamentary responsibility be established.
In other words, the collective responsibility of cabinet for everything that is done is one of the most essential principles of parliamentary responsibility.
If we are to allow this, Madam Speaker-and I urge upon you the responsibility which you, in my submission, have for the protection of the rights of all of us in this institution-and if you will not assist in helping us to resolve this issue, then the government will continue this invidious practice and the whole concept of collective responsibility falls to the ground, much to the ultimately disastrous consequence of the usefulness of this institution.

I therefore very strongly suggest, Madam Speaker, that you take the matter under advisement, consider the references I have cited, and if you should indeed find there is a very vital question of privilege involved here, collectively and individually, then I would move the appropriate motion to have the whole question examined in the Standing Committee on Privileges and Elections in the hope they could report at the earliest possible moment in order that there be no further erosion of a long accepted principle, one which is so vitally important to the continued function of this institution.


Madam Speaker:: In response to the hon. member, to begin with it was not clear to me whether this question of privilege really arose directly out of today's deliberations, but I listened anyway. There were questions asked about the matter of cabinet solidarity so I assumed that this question flowed from today's deliberations, which is why I listened to the hon. member, although he was referring to something which happened outside the House and might have required notice. I just want to point that out to the hon. member for Yukon (Mr. Nielsen) because he did not say quite clearly for what reason he was rising at this moment to invoke his question of privilege.
If the hon. member looks at the definition of a question of privilege, and I am sure he has looked at it nearly as often as 1 have, he will see that he has not demonstrated to me in any way that he was subjected to any type of harassment, threat or any other impediment which might have founded his question of privilege. He refers to cabinet authority as emanating from this institution. I must reply that these matters concern ethics, and if ministers are to be more or less in solidarity with
February 9, 1982

government policies, that is a choice they themselves make. It has very much to do with their personal conception of ethics.
As for what the Prime Minister's conduct should be in these cases, that also refers to any Prime Minister's personal concept of ethics and to the importance that he attaches to the way cabinet solidarity should be expressed. I can see the hon. member does not agree with the Prime Minister's concept of cabinet solidarity. That is his choice and his privilege, of course, and he may dispute it as much as he cares to. I am sure he will not let any occasion pass by where he can express his sentiments on this particular matter.
Throughout the history of Canada I suppose we have had several types of cabinet and several types of expressions of cabinet solidarity, and that these cabinets have been more or less efficient, related or not to the way in which they dealt with cabinet solidarity. I guess this is what makes for the strength or weakness of cabinets, but I fail to see it as the foundation for a question of privilege, be it individual or collective. I do not see how we can consider a collective question of privilege because it is defined as relating to an individual member.
However, the hon. member has invoked a personal privilege so I can answer him. Despite the pleas the hon. member makes to me to assist the House in obtaining redress on what he feels is a question of privilege, I must say I cannot assist him in obtaining this redress. This is the kind of thing that parties in the House dispute and debate at length, and I invite them to do just that on the proper occasion.
The hon. member has quoted many authorities, all extremely remarkable, and it was interesting to hear these quotations and refresh our memories about some of the principles which form the basis of cabinet solidarity, which is more a custom than anything else. However, he has not demonstrated to me where his privilege was affected in this particular circumstance; therefore, I must tell him that I cannot find a prima facie case of privilege.




Mr. Lome Nystrom (Yorkton-Melville):: Madam Speaker, I rise on a point of order arising out of some remarks you made today during question period. I rise to support and encourage you in what you said to us at that time. I believe this affects all of us here, and indeed affects the function of the institution of Parliament itself.
My point of order has to do with the length of some questions and answers in question period. I blame no particular person, but this afternoon it just happened to be the Leader of the Opposition (Mr. Clark) and the Prime Minister (Mr. Trudeau), in an exchange which took some 15 minutes and gobbled up the time of other members. I just thought it was important that some of us rise and say that we will support and encourage you to try to police question period as much as possible.
Point of Order-Mr. Nystrom
In doing that 1 want to refer you to Beauchesne's filth edition, page 131, Section 358(2), where it says:
Answers to questions should be as brief as possible-
I think, Madam Speaker, after watching the Prime Minister in particular today, that the answers were very long indeed. In addition, I would refer you to Section 359 of Beauchesne's, where it says:
A brief question seeking information-
The words are "brief question". It goes on to say:
(1)	It must be a question, not an expression of an opinion, representation, argumentation, nor debate.
(2)	The question must be brief. A preamble need not exceed one carefully drawn sentence. A long preamble on a long question takes an unfair share of time and provokes the same sort of reply. A supplementary question should need no preamble.
I point this out, Madam Speaker, because there are 284 members in this House. All of us are politicians, all of us can be very verbose, and if we let this trend continue there is going to be less and less participation from all of us in this House.
I make these remarks in a totally non-partisan manner because we can all be as guilty as the next person. I just wanted to encourage you to do what you can to make question period a bit more snappy and functional, which in turn will make Parliament a bit more meaningful for the people of Canada.


Some hon. Members:: Hear, hear!


Erik Nielsen: Madam Speaker, I have been observing question period for a long time as well. Without intending any reflection whatsoever on the Chair, it has been my observation that, generally speaking, the remarks of the hon. member for Kindersley-Lloydminster-


Charles Joseph Clark: Yorkton-Melville.


Mr.   Gimai@: In Saskatchewan.


Erik Nielsen: Yorkton-Melville, I am sorry. I have a better idea of where Saskatchewan is than the hon. member who is interjecting. I happen to have been born there. What we are doing on this side is acting in self-defence because it does the Chair no good to chastise this side for lengthy questions when the Liberal ministers answer at great length. The initial exchange, incidentally-and I have checked with the deputy opposition House leader who keeps a stop watch on the questions and answers-was timed at 12 minutes, of which-


Paul James Cosgrove: Nine minutes were interruptions.


Erik Nielsen: The Minister of Public Works (Mr. Cosgrove) will not stop yapping so he can hear the accurate statistics being quoted. Of the total of 12 minutes, the answers of the Prime Minister (Mr. Trudeau) took up seven minutes. So that should answer that.
Then yesterday, Madam Speaker, we on this side were told to keep our questions short, but no encouragement was given to the Liberal ministers to keep their answers short. We know

February 9, 1982
Point of Order-Mr. Nystrom
what the Prime Minister is up to when he stands in the House and takes up all of our time. He realizes that there are a few million TV viewers out there and that the more TV time he gets, the better he will appear. That is the real purpose behind what he does.
I would therefore urge the Chair, like the hon. member for Yorkton-Melville (Mr. Nystrom), to keep questions and answers brief. Your Honour will recall that at the beginning of this session we certainly did set an example by keeping questions short. However, the lengthy answers, which became longer and longer, forced us into the position in which we find ourselves, where we must ask lengthy questions in order to get our appropriate share of the time, the 45 minutes, which is a very short time within which to ask our questions, in any event.
We will certainly co-operate with the Chair. If the Chair wishes to impose stricter standards of conduct on hon. members by asking them to keep their questions short, we will co-operate if the same attitude is taken with respect to the answers given by ministers. If ministers will keep their answers short and direct them to the questions, we will certainly keep our questions short, snappy, brief and concise.


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, since the question usually comes first, it stands to reason that if the question is short and to the point, it will be much easier for us to provide short and concise answers.


Madam Speaker:: I could not more greatly welcome the remarks which have been made concerning the shortening of questions during the course of the question period.


Mr. Andre:: And the answers.


Madam Speaker:: My frank opinion is that the whole matter is getting completely out of hand, and I must get up like a jack-in-the-box to remind hon. members that their questions should be short.


Harvie Andre: How about their answers?


Madam Speaker:: If hon. members do not follow these directions from the Chair, what else can I do but conclude that we will have fewer questioners during the course of the question period and, as the hon. member for Yorkton-Melville (Mr. Nystrom) has said, fewer hon. members will be able to participate during the question period.
Concerning the shortness or length of questions and answers, I do want to remind the hon. members that, as I do with regard to questions, I occasionally rise in an attempt to get hon. members to terminate their answers.


Harvie Andre: Very occasionally.


Madam Speaker:: If one looks at Hansard, one finds that that is substantiated. However, I think hon. members are overlooking the fact that the Chair is here every day and knows what is happening in the House. I do not pretend to be the only one who knows what is going on in the House, but I do know what is going on. I am here every day; I can judge who is lengthy one day and who has been lengthy for a whole week. From time to time I decide to move in on an hon. member to ask him to be a bit more brief. Perhaps I might have been lenient for two or three days in a row if I felt the hon. member had a point to make; but, then, on the fourth day, I might decide to move in on him because he simply might have thought that I would allow him to carry on in this manner forever.
There are circumstances in which some hon. members must have more time in order to expose their questions, and I try to judge such circumstances as best I can. As I say, I am not always universally correct in my instant judgments, but 1 do my best. I would like the trust of the House with regard to this particular task which, believe me, is not exactly an easy one.
When hon. members do not follow my direction to be shorter in their answers, I do compensate. Hon. members will have noticed today that four Liberals wanted to ask questions, but none of them was allowed. I did not recognize them in compensation for the fact that some of the answers had been rather lengthy. Furthermore, I extended the question period by seven minutes to compensate for the time which had been taken during the question period as a result of heckling and applauding so as not to penalize those hon. members who were very eager to ask questions.
I welcome the remarks of hon. members because 1 hate to stand up here and preach to them every day. I do not conceive my role as being one which tries to prevent people from doing what they want to do, but, on the contrary, one which ensures that the debates are conducted in such a fashion that everyone will have a chance to express themselves. I must make such judgments on a daily basis. I therefore welcome the remarks and the terrific resolve shown by hon. members to ask questions which will be short, snappy and to the point. That would result in a great question period.


Erik Nielsen: And the answers.


Yvon Pinard: Madam Speaker, I rise on a point of order that has to do with this one and concerns the duration of question period. The Standing Orders are also very clear as to the duration of question period, at what time it is supposed to begin and when it is supposed to end. If questions are too long or if members are noisy on either side of the House, I submit that the Speaker of the House is bound by the Standing Orders and has no discretion to extend question period beyond the time set in Standing Order 15(3), which is very specific.
We are prepared to moderate the length of our answers, provided the questions are brief as well. We want to be clear and concise and comprehensive, but on the other hand, we
February 9, 1982

should also appreciate it if the Standing Orders were applied literally, where the duration of question period is concerned. It is not because we are sticklers for form, but because we the ministers, including myself, have other commitments, and our daily schedules are arranged on the assumption that we shall be able to leave at three o'clock and not at 3.07 or 3.09.


Erik Nielsen: Madam Speaker, I deplore the fact that the government House leader has shown criticism of the Chair in such a manner. Our Standing Orders are shot through with orders which relate to time limits, such as an order which requires us to rise at ten o'clock in the evening, an order stipulating a time limit on the late show, and orders which relate to rising at six o'clock on Wednesday and five o'clock on Friday. However, in this place, both under the old rules and under the new rules, it has been the practice for the Chair not to see the clock, or, indeed, for hon. members to suggest that the Chair not see the clock, thereby by implication suspending those Standing Orders.


Yvon Pinard: By unanimous consent.


Erik Nielsen: The government House leader says "by unanimous consent".


Yvon Pinard: Right on!


Erik Nielsen: That has not been the practice in the House in the past.


Yvon Pinard: Oh, yes! Oh, yes!


Erik Nielsen: The Speaker has simply not seen the clock. Indeed, on many occasions, the Speaker has seen that a time has expired before it actually has expired. 1 see that Madam Speaker is indicating no. However, hon. members have often called it ten o'clock before it was ten o'clock, and they have often called it six o'clock before it was six o'clock.


Yvon Pinard: By unanimous consent.


Erik Nielsen: If there is no dissent, then no debate arises on the matter. Technically, the government House leader is correct. However, that has been a longstanding practice in the House, particularly in circumstances such as those which the Chair, herself, recognized today, which justified not seeing the clock for an extra seven minutes.


Mr. Doug Lewis (Simcoe North):: Madam Speaker, with reference to your ruling, and 1 am speaking with the greatest of respect, I thought Your Honour might perhaps have dwelt a little more on answers rather than with questions and with ministers rather than hon. members.
However, for my part, as an hon. member on our side and as the deputy House leader responsible for the question period, I would much prefer that Your Honour cut questions and answers equally short rather than compensate by continuing. I would prefer to hear cabinet ministers answer questions rather than read. I compliment the Prime Minister (Mr. Trudeau) for
Point of Order-Mr. Nystrom
being well briefed. However, rather than hearing him read a list of organizations, inadvertently omitting the Liberals from Saskatchewan, I would rather see Your Honour jump in to cut off the questions and answers. Let us run this place the way it should be run.
[ Translation]


Madam Speaker:: The President of the Privy Council is right. The Standing Orders are quite clear, and anyone who reads them will see that question period is supposed to end at a given time. However, as the hon. member knows, sometimes my eyesight is not very good, and there are days when I really cannot see what time it is. It is one of the few prerogatives I have as the Speaker of the House. 1 hope that the House will allow me to use this prerogative, which is really minute, and which I try to use as little as possible. Hon. members must have noticed that question period ends on time, since I know perfectly well that members as well as ministers may have appointments to keep and they must be able to schedule their time. It is therefore very important to have question period finished at the time it is supposed to finish, and I try to conform to this rule as much as possible.
As for the remarks by the hon. member for Simcoe North (Mr. Lewis), I should like to point out that there are some courtesies the Speaker of the House must observe with regard to the Prime Minister of this country and the Leader of the Opposition. I have my own concept of what these courtesies should be, and I try to be fair and, of course, I must be fair. But there are also days when 1 may decide to laugh along with the hon. members, and I find it is a way of relieving tension in the House. I have noticed that there are members who sometimes object to the fact that I smile from time to time, but I think it is a very healthy attitude for the Speaker not to take life too seriously, and I think that when emotions start rising in the House, the Speaker should remain calm and keep a sense of humour. That happens to be my style. I am not going to change: that is the way I am. I am getting used to you, and 1 hope you will get used to me.



ROUTINE PROCEEDINGS

['Agreed.']
Madam Speaker:: 1 have had notices of intention to move the adjournment of the House under Standing Order 26. 1 will hear first the statement of the hon. member for Vegreville (Mr. Mazankowski) and later from the other member.

February 9. 1982



Donald Frank Mazankowski: Madam Speaker, under the provisions of Standing Order 26, I ask leave of the House to consider a matter of urgent and pressing necessity. It arises out of the announcement made in Winnipeg yesterday by the Minister of Transport (Mr. Pepin) concerning major changes to the Crowsnest Pass freight rates. The minister chose to make this important announcement outside the House, thereby denying members of the House of Commons the opportunity to respond and to seek clarification of the many complex aspects of the government's proposal.
The announcement, Madam Speaker, proposed to remove an historical and statutory right enjoyed by the grain producers of Canada and will result in an openended freight rate structure which will cost producers hundreds of millions of dollars. This comes at a time when producer costs are rising and incomes declining. Because of the profound effect this policy will have on Canada's grain producers, because Parliament has been circumvented by the minister's announcement, because the policy requires clarification and answers to the many questions it raises, I believe it is imperative that Parliament be allowed to debate this urgent and vital matter.
If you find these conditions consistent with the terms of Standing Order 26, Madam Speaker, I will be prepared to move the appropriate motion.


Madam Speaker:: Since the two notices are very similar, I will hear now the hon. member for Yorkton-Melville (Mr. Nystrom).


Lorne Edmund Nystrom: Madam Speaker, I have given you the appropriate notice, seconded by the hon. member for Humboldt-Lake Centre (Mr. Althouse), to move the adjournment of the House pursuant to Standing Order 26 for the purpose of debating a specific and important motion requiring immediate consideration, namely the government's announcement outside Parliament in Winnipeg yesterday that it is proceeding to abandon the Crowsnest Pass grain rate, the confederation bargain protecting western farmers against the monopoly powers of the railways of this country, which will depress farm, income even further and have serious ramifications on the national economy of Canada.
As you know, Madam Speaker, the rules do not permit me to elaborate on the reasons for moving the motion, except to say that I believe the representatives in this House of the people of the prairies must have an opportunity to have some input into the debate on this very important issue. The Crowsnest rate agreement in western Canada is like the Magna Carta to our part of the country and we need an opportunity to discuss it here in this House.


Madam Speaker:: These two notices of motions are quite similar in nature, although worded differently. They were examined very closely so as to make a judgment on whether they fulfil the requirements of Standing Order 26.
I need not remind hon. members that since its inception in 1897, the Crowsnest Pass agreement has been the subject over the years of many discussions and debates in the House of Commons. The fact that the Minister of Transport (Mr. Pepin) has now announced a change in those rates, a change which will be subject to consultations, studies and even legislation, does not meet the requirements for a debate under Standing Order 26, although I recognize that it is very important to debate this question.
The hon. members who submitted the motions, in my opinion, have not demonstrated clearly and precisely that, in the words of Section 16 of Standing Order 26, the matter proposed for discussion relates to a genuine emergency calling for immediate and urgent consideration. It is my understanding that the Minister of Transport will be introducing legislation respecting the Crowsnest Pass agreement, at which time there will be ample opportunity for debate.
In addition, there are several opposition days remaining in this supply period when hon. members may set down motions to discuss this particular subject. Accordingly, it is with regret that I cannot accept the hon. members' applications.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 3,230, 3,455, 3,473, 3,474, 3,475, 3,476 and 3,504.


Mr. Cossitt: Will the government give a firm guarantee that no files possessed by the RCMP security service prior to the announcement of the establishment of a civilian security service will be destroyed, altered or changed in any way (a) during the transfer to the new agency (b) after the new agency is in full operation and, if not, for what reason?


Hon. Bob Kaplan (Solicitor General):: (a) No. Although no destruction is taking place at this time, a complete review of security service file schedules and destruction policy is currently under way.
(b) No. This government cannot guarantee that security service files will not be destroyed, altered, or changed in any way after the new agency is in full operation as new government controls may preclude retention of some classes of information.
February 9, 1982


Mr. Cossitt: 1.	In the past two years, how many lots of blank cassette tapes were purchased for inmates at the Millhaven Institution and what was the total number of cassette tapes purchased?
2.	How many cassettes were actually issued to student inmates?
3.	Did any cassettes end up elsewhere and, if so, where?


Robert Phillip Kaplan: In so far as the
Correctional Service of Canada is concerned:
1.	During the past two years (November 19, 1979 to November 19, 1981) one lot of 130 blank cassette tapes was purchased by the academic department at Millhaven for educational purposes.
2.	Seventy-one blank cassette tapes were used to recopy some master programmed tapes, replace damaged or defective ones and to produce some programmed tapes of the teacher's own making. In turn, all of these tapes have been distributed to inmate-students for instruction in their courses. Of the lot, 59 cassette tapes still remain unused.
3.	No.


Mr. Cossitt: With reference to the answer to question No. 2,692 which stated in part that Soviet diplomat Mr. 1. Lobanov travelled to Kingston, Ontario on October 21, 1980 for a period of one day (a) what were all the reasons for the trip (b) what details are known to the government about the trip?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: (a) and (b) A Soviet diplomat is not required to state the purpose of the trip when Filing the prescribed travel notice.
See also reply to question No. 1,551 answered February 1, 1982.


Mr. Cossitt: With reference to the answer to question No. 2,692 which stated in part that Soviet diplomat Mr. A. Makarov travelled to Belleville, Ontario on April 23, 1981 for a period of three days (a) what were all the reasons for the trip (b) what details are known by the government about this trip?


Mark R. MacGuigan: See reply to question No. 3,473 answered this day.


Mr. Cossitt: With reference to the answer to question No. 2,692 which stated in part that Soviet diplomat Mr. V. Iouchine travelled to Kingston, Ontario on April 8, 1981 for a period of two days (a) what were all the reasons for the trip (b) what details are known to the government about this trip?


Mark R. MacGuigan: See reply to question No. 3,473 answered this day.


Mr. Cossitt: With reference to the answer to question No. 2,692 which stated in part that Soviet diplomat Mr. I. Konovalov travelled to Toronto and Niagara Falls on January 20, 1981 (a) what were all the reasons for the trip (b) what details are known to the government about this trip?
Order Paper Questions


Mark R. MacGuigan: See reply to question No. 3,473 answered this day.


Mr. Domm: Since early 1980, did the Department of Public Works operate fully in metric measurements and, if so, what was the total cost of conversion from Canadian units of measurement?


Paul James Cosgrove: Public Works Canada has been operating fully in metric since January 1, 1980, in its tendering processes and internal operations. The total cost of conversion to metric units of measurement to date is $472,000.


Madam Speaker:: The questions enumerated by the parliamentary secretary have been answered.


David P. Smith: Madam Speaker, would you be so kind as to call starred question No. 3,440?


Mr. Murta: With reference to the Ad Hoc Feed Grain Supply Committee announced on August 11, 1980 (a) how many meetings were held and (i) on what dates (ii) at what locations (iii) which organizations or individuals made representations (b) what amount was spent by the government on the Committee and what was the breakdown of the expenditures, including meeting costs, entertainment costs, allowances to the members of the Committee and costs associated with the preparation of the final report?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: Madam Speaker, in reply to question No. 3,440, in so far as the Canadian Wheat Board is concerned, six meetings were held; on September 5, 1980, in Ottawa, September 18, 1980, in Ottawa, October 7, 1980, in Ottawa, October 24, 1980, in Winnipeg, November 24 and 25, 1980, in Ottawa and January 29, 1981, in Ottawa. The locations are as above.
The Canadian Wheat Board, the Canadian Livestock Feed Board, the Grain Transportation Co-ordinator and the Winnipeg Commodity Exchange attended.
The answer to (b) is $19,650.26, of which meeting costs, including travel expenditures, amounted to $14,600.26, fees to advisers $5,050, entertainment costs nil. Costs of typewritten reports to ministers were not separable.

February 9, 1982
Ways and Means


David P. Smith: I suggest, Madam Speaker, that the other questions be allowed to stand.


Madam Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Yvon Pinard: that a ways and means motion to amend the Income Tax Act (No. 2), tabled in the House on Thursday November 12, 1981, be concurred in.


[Stage Direction]
Motion agreed to.
EXCISE TAX ACT (No. I)
Yvon Pinard: that a ways and means motion to amend the Excise Tax Act (No. 1), tabled in the House on Thursday November 12, 1981, be concurred in.


[Stage Direction]
Motion agreed to.

Yvon Pinard: that a ways and means motion to amend the Petroleum and Gas Revenue Tax, tabled in the House on Wednesday January 27, 1982, be concurred in.
Motion agreed to.


Erik Nielsen: Madam Speaker, may I ask the government House leader whether that has anything to do with the borrowing bill that he will be bringing in?


Yvon Pinard: Madam Speaker, I am not sure if I understood the question. If this has anything to do with the borrowing authority bill? Yes, Madam Speaker. The disposition of those ways and means motions will be reflected in a bill dealing with borrowing authority, oil and gas revenue tax and excise tax. This bill will be introduced tomorrow but will not be debated tomorrow. It is unlikely that it will be debated this week, and therefore the business for the remainder of the day is as announced, debate on the bill related to the National Housing
Act. Tomorrow we will debate the second reading stage of the Customs Tariff Act and, if necessary, we will come back on Thursday to the National Housing Act, unless we terminate debate today.


Erik Nielsen: Madam Speaker, I thought that would be the intention. As a matter of courtesy, I want to inform the government House leader and the Chair that we will concur with the passing of these notices of ways and means today but will be raising a point of order with respect to the form of the bill, which the government House leader has had the courtesy to inform me of, before first reading.
It is an unusual time to raise such a point of order, but due to a previous ruling by Mr. Speaker Jerome, there appears to be a Catch-22 situation wherein by virtue of one of his previous rulings we cannot argue the point at second reading. It has to be done prior to that time and the only other time it can be done is either between the notices of ways and means and first reading or between first and second reading. I think tomorrow would be the appropriate time to raise the point. I wanted to inform both the Chair and the government House leader that we intend to raise that point.



NATIONAL HOUSING ACT


[Stage Direction]
The House resumed from Monday, February 8, consideration of the motion of Mr. Cosgrove that Bill C-89, to amend the National Housing Act and the Canada Mortgage and Housing Corporation Act, be read the second time and referred to the Standing Committee on National Resources and Public Works.
Mr. Cyril Keeper (Winnipeg-St. James):: Mr. Speaker, I am rising today to discuss Bill C-89 which has been introduced by the government. It provides legislative authority to the government for its housing programs and for the implementation of the measures in the November 12 budget dealing with housing. It provides the authority for neighbourhood improvement and public works at the municipal level.
It almost goes without saying that the provisions in this legislation are totally inadequate to meet the housing needs of Canadians and completely fail to provide the economic stimulus needed to provide work for the over one million Canadians who are unemployed today. It is not only Canadians and New Democrats who are aware of these failures to provide economic stimulus; this knowledge is even beginning to penetrate the backbenches of the Liberal caucus. That in itself is an accomplishment because of the reputation the Liberal party has of being a party with discipline.
February 9, 1982

I would like to read from an article in La Presse dated February 8, an article which I think is important for people to be aware of. It reads:

Following two meetings of their regional caucus, the members of Parliament for the central-eastern part of Montreal have released a letter to the Prime Minister asking Mr. Trudeau to immediately initiate measures to fight unemployment.
The first proposal calls for the stimulation of the housing construction
industry because of its well known spin-off effects.
It is extraordinary that Liberal backbenchers would recognize that there is a real need for economic incentives.

The question that we must ask ourselves is, why do the programs of the government, particularly in housing, fall so dismally short of what is needed? Not only do they fall short of people's basic human needs, but they do not provide any help for the general health of the economy.
There are some basic reasons why these programs fall short of what is needed, and I must say that some of these reasons apply equally to the programs of the past Conservative government. I do not wish to leave those hon. members in comfort. Quite simply, this government, as well as past governments, has refused to understand and recognize the value of investing the public dollar, particularly in the area of housing with which we are concerned today. The government is blinded by its preoccupation with deficits. Incidentally, if you consider both federal and provincial revenues, these deficits would come much more into balance.
Not only does the government refuse to recognize the value of investment, but it is also afraid of charting an independent economic policy for Canada. It does not have the courage to establish Canada's own Fiscal policies with its own approach to public expenditures. It does not have the courage to establish our own monetary policies. Of course, this is a well known fact to all Canadians as we watch the government simply follow the actions of the United States government.
There is another important reason why the housing programs of the government do not live up to what is needed. The government does not believe in providing economic leadership. This is clearly what is needed today and it is what Canadians are calling for, including ten Liberal backbenchers. Economic leadership is needed, especially when people are suffering, and it is obvious that Canadians with mortgages are suffering greatly, as well as people who rely on rental accommodation.
Having set out the basic inadequacies of the government housing programs, I would like to deal with them more specifically. First, 1 would like to deal with the mortgage renewal program. I am disappointed that the Minister of Public Works (Mr. Cosgrove) is not in the House for this debate. I do not know if he is behind the curtain but I hope he will be here when I deal with some other important matters during my speech.
The minister quite clearly tried to align his mortgage renewal program with the mortgage assistance program established
Housing
by the new Manitoba government. I will not go into detail on this point because my colleague from Winnipeg North (Mr. Orlikow) will lay out in detail the differences between those programs later. I will simply say that the federal Liberal program takes the interest which people cannot pay today because of the government's economic policy and rolls it back into the capital debt which these people have in their mortgage. All the government is doing is piling up debt for the future. If this strategy is being applied for the average home owner who is struggling now, in light of the predictions for another rise in interest rates-another ride up the rollercoaster-Canadians surely cannot afford to ride up that rollercoaster again.
The federal program simply protects banks but does nothing to help people. This has forced provincial governments in Manitoba and Saskatchewan to take some real action. I will read to hon. members something printed in an article in The Globe and Mail about the Manitoba program. I point out that it is in The Globe and Mail so that hon. members will know it is not a biased account of the program. The Globe and Mail is hardly a socialist journal, at least not yet. Perhaps with the new New Democratic Party leader in Ontario The Globe and Mail will see the light.
Manitoba's NDP government unveiled a ... interest-relief program yesterday that will put cash into the pockets of needy home owners.
It will not go into the pockets of bankers but into the pockets of home owners.
Home owners whose new mortgage payments exceed 30 per cent of their household income will receive benefits up to $275 a month ... The money doesn't have to be paid back.
The article went on to indicate clearly that any long-term solutions to high interest rates must come from Ottawa. That is where the problem was created. However, clearly there is a difference between the quality and the efficacy of the federal program, which falls far short, and the provincial program in Manitoba, which provides real assistance in the form of real dollars to real people.


Mrs. Mitchell:: Well said.


Cyril Keeper: I want also to draw to the attention of this government the action being taken in Saskatchewan. Manitoba responded with a program. Saskatchewan has responded with legislation and has introduced mortgage moratorium legislation. The Saskatchewan government introduced legislation which will guarantee that no citizen loses his home by virtue of the ever-rising interest rates the government across the way is creating. The federal government clearly could take some legislative action, and the first good move would be to tax the windfall profits of banks and use that money to get some real assistance to people having mortgage difficulties.
I want to refer to the hon. member for Vancouver East (Mrs. Mitchell), who is sitting at my side today. She spoke yesterday about this housing bill, and I must say I was very impressed. Her speech contained a depth of information which

February 9, 1982
Housing
is certainly lacking on the other side of the House. Hon. members opposite do not know how to deal with facts. The hon. member for Vancouver East dealt not only with the mortgage renewal program but also with other important areas of housing.


Margaret Anne Mitchell: I dealt with the minister too.


Cyril Keeper: The hon. member dealt with all these things quite well. I am glad the minister is in the House today. 1 welcome him here. I hope he can learn something from this side of the House.


Paul James Cosgrove: I am here to check the facts.


Cyril Keeper: 1 am glad the minister is not hiding behind the curtain. The social housing programs this legislation allegedly enables are totally inadequate and, in the words of my colleague, leave one million poor at the mercy of the private sector. My colleague dealt with the program in detail, but that is an accurate evaluation of it. The rental housing program being pursued by the government provides only 15,000 units. It has been said, even by members of the Tory party, that those
15,000	units will not even meet the need in Vancouver. If those rental units were to be built in each community across the country where people rely upon rental units, I doubt there would be one unit for every community in the country. The program is clearly inadequate. Since my colleague, the hon. member for Vancouver East, has dealt in full detail with this aspect of the government's housing programs, I merely point out that they fall short of what is needed, and I will build on what my colleague said and deal with some other aspects of housing.
I intend to deal, for example, with a priority of the minister, native housing. I hope he listens to my comments. I want to deal with the policy, and then perhaps the minister will adjust his policy. I want to deal with native housing, neighbourhood improvement and federal-provincial-municipal financial relationships. These are all matters which I am sure are close to the minister's heart. In his own speech yesterday he said that he places a very high priority on the rural and native housing program. 1 hope his actions will bear out those words. 1 hope to make some comments which might provide him with some perspectives on that program which he might find useful, if he is willing to take action.


Paul James Cosgrove: I hope you will support the new program.


Cyril Keeper: The rural and native housing program has been around for a decade. It was begun as a result of very heavy lobbying by the Native Council of Canada. The fundamental essence of this program is that it is a native run program. It was native conceived and provides for the needs of native people. The government rightfully plays the role of providing the financial and human resources necessary to support this type of activity, but I must say that the fundamental principle which must underlie this program and its growth and development is the principle that the program be native run. In other words, it must respect the right of self-determination for our
native people. That is a right about which we hear native people speak eloquently and strongly right across the nation. That right is often expressed in relation to nations, but I think it can also apply to communities and government programs. The principles of self-determination and that this program be native run are fundamental. The program has achieved the creation of native housing corporations, but I suggest there is potential for future growth and for strenthening the concept of self determination.
One of the difficulties associated with the present program is that it is subject to two housing bureaucracies. It is subject not just to the federal bureaucracy but also to provincial bureaucracies at the same time. That is because the program is run under a federal-provincial arrangement. In many cases federal-provincial agreements are appropriate, but I suggest such an agreement is inappropriate in relation to native housing corporations. Such corporations should not be subject to two bureaucracies when groups such as co-ops and others who develop housing are involved with only one bureaucracy. Private developers deal essentially with only one housing bureaucracy. I see the minister shaking his head. I ask him to listen carefully: this point is fundamental. It has to do with the fundamental principle underlying the program. It has to do with the fact that only if native people are able to run their own programs will there be any real development of native leadership. That is the only way native people will ever move out of the poverty which has engulfed our communities for the last 100 years.
I believe the first step which must be taken-and it has been taken already-is the creation of native housing corporations. The second step is for the federal government to go it alone in this area and to provide 100 per cent of the money required for native housing so that native people are no longer subject to both federal and provincial bureaucracies. I suggest that would make for a more efficient administrative process. It would deliver a bigger bang for the buck. More housing would be delivered faster because there would be less bureaucracy through which to move.
I would like to look into the future for a moment. I hope the minister has learned something from my previous comments. Once we have only one bureaucracy policing native housing corporations, I suggest the next step should be toward greater and greater responsibility to be held by native housing corporations. This would increase the level of responsibility of native leadership to deal with the real problems of native people. Such an increase in the level of responsibility would increase the strength of the leadership. It would increase its authority and bring about more respect on the part of the native community. This would be beneficial for the whole country.
That is the fundamental principle I see involved in the rural and native housing program, and that principle should be reflected in any projected improvements to the rural and native housing program. I hope there will be improvements. Even if they do not meet my ideals, I would like to see an attempt made to follow these principles.
February 9, 1982


Margaret Anne Mitchell: How about more money?


Cyril Keeper: That is exactly what I am talking about. It is not just a question of money, it is how that money is utilized. That is why I just mentioned the principle.
The second aspect of native housing that I would like to deal with is the question of urban native housing. Although it is related to rural native housing to some degree, it is a separate item. Once again we have native housing corporations. They certainly need more money because the native housing corporations under the present program have to rent three units at near market rents in order to be able to subsidize one unit for a moderate income native family. What is left out in this process is the native person who is on low income. If there is anything that a native housing corporation in a city such as Winnipeg or Vancouver or Montreal should do, it is to serve the native people who have the lowest incomes.
1 would like to suggest that there is a necessity here to add dollars to the package to improve the assistance that will allow for the subsidy of rent so that the native housing corporations can serve those native people who have the greatest need, those who have low incomes. This can be done and it is important that it be done. I like to give credit to the federal government for what it does, and I have no objection to that. I have no objection to politicians making great announcements and taking credit.


Margaret Anne Mitchell: Give him credit for MURBs.


Cyril Keeper: Here is a real opportunity for him to take unilateral action. The government designed a program which has been around for a decade, one which assumed provincial financial participation. That provincial financial participation has not materialized, but perhaps it is time to learn that that program was in the first instance ill designed. It is time to change the design of the program and for the federal government to go it alone in order to see that no native person in this country will be without adequate housing. I think that is important in the light of the general economic benefit for the native people across the country.
There is one exception with regard to the provinces that I must mention, and that is the province of Saskatchewan, the province of my colleague. The province of Saskatchewan made a commitment for 1,000 units and tied that into the federal program. That is a significant move. So there is an exception. However, I do not want the minister to wait for another ten years to see if another province will move in that direction. I think it is time for him to take some real action which will fill some human need and provide some economic stimulus.
I would like to say something about why it is important to improve the housing conditions of native people in cities, particularly those in poverty conditions. I come from Winnipeg and I think Winnipeg is a good model of what I am thinking about right now. In the inner city of Winnipeg there is unemployment of upwards of 40 per cent, 50 per cent or 60 per cent. There is an old housing stock, and there are native people
Housing
living in the worst kind of housing conditions. When people are living in those kinds of housing conditions, they move around a lot; the children end up going to four or five different schools in one year. One can imagine what a detrimental impact that has on their education.
The teachers in the schools came to me when I was a city councillor in Winnipeg dealing with the question of housing and indicated quite clearly that if those children are going to make use of the dollar that we and the public put into the educational system they must have good, adequate housing and are not living in four or five different locations in the city in one year. How can they get a good education if they have to move every few months? It is just not possible. There is a fundamental issue of justice here.
There is also an economic question here in the sense that if we want to utilize the public dollars that we have invested in education, for example, in order to give people equal opportunity, we must provide them with adequate housing, with good housing, so they can live in one spot, the children can go to one school all year round rather than to five different schools which would put an unnecessary stress and burden on the teachers as well as on the children. Therefore, this matter is essential and important.
I would make one other comment with regard to native housing. I raise this caution to the minister. I hope he listens to what I have to say because I really do feel that perhaps there is some hope that he will act on some of my suggestions, at least partially, and take some remedial action. If I name the principle, perhaps he can at least take a step in the right direction.
I want to caution the minister. I read his news release with regard to the bill we are dealing with today, and a good one it is.


An hon. Member:: Which is good, the news release or the bill?


Cyril Keeper: He makes reference in this news release to a more businesslike approach. I know that will find much approval in many quarters. He is trying to present a particular public image. Again we have the game of politics. 1 have no objection to anyone playing politics but I do want to caution him, in the application of his ideology, his business-oriented ideology, that he not carry it so far as to impair the potential delivery of programs. In other words, if he applies this notion of making it more businesslike to national housing programs, that he not do it in a way that would make it impossible for native housing corporations to deliver housing.
I just want him to be very careful of how he applies his ideology, to read carefully the recommendations from his own bureaucrats, because he does mention in this same news release "flexibility". He is anxious to have more flexibility. Who is going to have the flexibility? Obviously, it is the bureaucrats. We want to be sure that whatever is being done not be lost in any effort to present a particular kind of public image for the government.

February 9, 1982
Housing
This is just a caution to the minister, a friendly caution, and I hope that as he examines the recommendations from his civil servants he will keep that in mind. I really hope that he will. As he follows his ideology, he could still allow for the program to be workable. That is the important point, in my mind.
So, Mr. Speaker, that is really what I have to say on native housing. I hope the minister takes some recognition of what 1 had to say and that it has some impact on the government's native housing programs and policies. If it does not, I will take note of it and will have something to say here again.
I would like to move on to some other matters that I said I would cover. One of those is the older neighbourhoods. Once again we have the enabling legislation here, which allows the government to get involved in such things as the community services contribution program. That is the program that was to help with the rehabilitation of older neighbourhoods. I wish to share a little information here with the House. The community services contribution program is a program of which the minister last year announced a termination. He still has the gall to continue to issue press releases claiming credit for public works under that program in my province.


Paul James Cosgrove: I am still paying for it.


Cyril Keeper: The minister should not only be paying for it but should be increasing the amount of funds that are available for these municipal public works, in order to provide increased employment across the country and so that the one million people who are unemployed today will have jobs. It is not just a claim for credit for reducing expenditure, for expenditures that are going to end.


Paul James Cosgrove: Reduced.


Cyril Keeper: Reduced. Let me give the House an example. I do not want to get lost in names, but at one point this program was not called the community services contribution program. Let me quote from the document I have here:
The community services contribution program replaced the municipal infrastructure, municipal incentive and neighbourhood improvement programs.
It replaced three programs.
These 3 programs provided $399 million in loans and grants for 3 kinds of services. The CSCP which began in April of 1980 provided $250 million a year for 10 kinds of services.
They had three programs before they consolidated, they reduced the budget and called it the CSCP and now they are reducing that and soon will be contributing nothing. There has been no assurance from the government side of the House that there will be a replacement program. Bill C-89 enables the government to implement a replacement program, but there is no evidence in the budgetary or expenditure statements of government that it will be replaced. It continues to cut back and to follow its own economic lunacy. The minister should know that there are people in the country who are concerned about the fact that CSCP is being terminated. In fact, many municipal mayors and councillors are concerned. I am sure the minister knows them.


Margaret Anne Mitchell: They do not speak to him now.


Cyril Keeper: Shame, indeed. I have a letter from the city of Winnipeg outlining the damage which will result from the termination of the program. I have an inch thick file of letters from towns and cities right across the country. In a letter from the city of Edmonton it was indicated that if the government wanted to show it cared for the west this was the way to do it-institute a replacement program which will aid municipalities in their public works. 1 have a letter from the city of Calgary which indicated its concern about Liberal government cutbacks of funds to local communities. Also I have letters from the Surrey municipal council and the city of Moose Jaw, etc. I have more documentation outlining the genuine concern of Canadians across the country that the program be reinstated and expanded.
Perhaps it is too much to ask of government to institute a replacement program.


Margaret Anne Mitchell: What about a replacement government?


Cyril Keeper: That would be ideal, but dealing with the reality of today, the minister should give serious thought to a replacement program. I notice the enabling legislation allows the minister to make loans for neighbourhood improvement and such. At least it is possible for the minister to have a replacement program based upon a loan program that would be in line with his privatization philosophy, if he is not prepared to give grants. He has not indicated a willingness to take that small step. We are waiting for the minister to take seriously the appeals of cities and towns across Canada for funds for municipal public works. The people who are out of work would like to see some dollars for that purpose as well.
I should like to talk briefly about federal-provincial-municipal finance. When the government was first elected Parliament dealt with a bill respecting grants in lieu of taxes. At that time the minister promised, after the legislation went through the House, to study the program put in place. Apparently the study was to be brought before committee so that hon. members could have another look at it. Nothing has happened. The tragedy is that the government continues with a grant in lieu of taxes system, wherein the federal government retains arbitrary authority for how much it will pay for a building located in any municipality when a better model exists and has been put in place. This model is based upon the notion that the federal government respects the local taxation system. We should have a taxation system, rather than a grants system.
In this area there is much to learn from the province of Quebec. There are many hon. members in the House who are from Quebec, so the government has a good source of advice. Quebec implemented a taxation system which respects the local taxation system and local democratic institutions; it is not an arbitrary authoritarian grant program which leaves the final decision with the senior government.
Of course, municipalities are in need of financial resources. The federal government is bloated in terms of financial
February 9, 1982

resources. It should treat fairly local governments as it relates to them in a federal relationship. We know the government has much to learn in the area of intergovernmental relations. I once again flag the fact that the issue is not forgotten. There are municipalities which want the federal government to respect local governments. As well, there are citizens who want the government to respect their locally-elected representatives and to treat them fairly.
In conclusion, all my remarks, whether they relate to this housing legislation, mortgages, social housing, rental housing, native housing, neighbourhood improvement or local municipal finance, are really an appeal to the government to respond to the needs of Canadians. Quite simply they assume a government which is capable of seeing the value of investing in communities and people. They assume a government with the courage to develop Canadian economic policies in the area of monetary and fiscal matters. They assume a government willing to show leadership in economic matters at a time when the people of the country are hurting. They involve a renewed commitment to democracy, not only to political democracy and rights but to economic rights of people. It is time for the government not only to listen but to act.


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, it is a privilege to speak on Bill C-89 which was brought in by the Minister of Public Works (Mr. Crosgrove) who I am delighted to see present. It amends the National Housing Act and provides very necessary funds. The government says that the proposed legislation would give Canada Mortgage and Housing Corporation more flexibility in responding to housing problems and enable it to conduct its operations in a more businesslike manner. I am sure we will all say amen to it and hope it is correct.
I have had dealings with various CMHC offices and certainly in most cases they have been excellent. On other occasions I have not been overly enthused with the delay and doubletalk. In one specific case we were endeavouring to obtain a loan for an apartment house in my home village. We had all the necessary information and approvals. It was getting on to autumn and, just when the entrepreneurs were to commence building, they were told by CMHC that they required special land tests and so on. The upshot was that after spending a few thousand dollars the project involving seven or eight apartments went down the drain.
The plan will offer interest deferral guarantees of up to $3,000 for borrowers who have some equity in their homes and are obliged to renew their mortgages at rates of interest which would require an excessive proportion of their income. For borrowers with the same problem but with no substantial equity, the government will provide grants up to $3,000. The program will apply to mortgages renewed between September 1, 1981, and November 12, 1982. It will only be for home owners who are required to pay more than 30 per cent of their gross family income. It is really a scheme for home owners to borrow against equity to pare down their payments and to pay off the amount at a later date.
Housing
This grant and loan guarantee program will assist a total of
50,000	home owners out of nearly a million who will renew their home mortgages during the time limit imposed by the government. In fact, 37,500 of the 50,000 assisted will receive temporary help, but only 12,500 will receive real financial assistance.
Decent affordable accommodation is a basic right which all Canadians feel they should have. Housing is one of the most necessary of consumer goods. Buying a home is probably the largest single investment made by any family. Houses are purchased for investment or for security reasons. Every single Canadian has a direct interest in housing. People rent, own, construct or maintain a home, sometimes all of those things. Residential construction is a major industry and a significant segment of the economy.
It has been said that as the construction industry goes, so goes the economy. We are all aware of the sad situation with respect to the economy at the present time. When housing starts decline, renters and owners are not the only ones affected. A decline in housing starts has a snowball effect on many segments of the economy. The pressure on low-income people comes about by available housing becoming more costly. Reduced mobility of the work force is another very serious situation. This is caused by the unemployment connected with trades associated with construction, such as bricklayers, cabinet makers, plumbers and so on.
What about those selling or manufacturing bricks, insulation, carpets and on and on? Many bankruptcies have occurred in these particular industries. Some are just hanging on more or less by their teeth hoping that things will improve.
A depressed market results in less money in circulation. Cutbacks will, of course, have long-term effects. We are all aware how long it takes to build houses. You cannot have the economy change overnight and just say "presto" and have houses appear.
I can speak with some experience because I have been a real estate broker for a great number of years. I am not active at the present time, naturally, but I have a small firm that is operated by my sons. I checked with one of them today to find out how the little village of Burks Falls is affected by the serious situation in 1981. My son told me that by working his butt off in 1981 he managed to increase the business. I say more power to him. But in a great many cases housing sales have declined considerably. As a result, real estate brokers have been feeling the pinch too. That situation occurs not only in small places in Canada but even in the metropolitan areas with booming populations.
My hon. friend from Mississauga says the real estate market there has been very depressed. Mississauga was the fastest growing area in Canada. I do not know whether it has that same distinction now but its real estate market has been affected.
Being able to afford a home is very important. A great many people across Canada, both young and the not so young, all

February 9. 1982
Housing
hope some day to be able to purchase a home. However, because of high interest rates the affordability of housing has become a major problem.
As far as availability of housing is concerned, Canada needs just over 220,000 new housing units each year. In 1980, only
159,000	were built. In 1981, only 178,000 units were built. For 1982, the latest forecast predicts that only 180,000 units will be built. This will result in a shortage of 143,000 units over a three-year period.
High interest rates have resulted in a dramatic decline in the construction of new apartement units. For a landlord in Ontario to break even on the financing of a new building at today's interest rates, he would have to charge $800 per month for a one-bedroom apartment. Because this rate is more than double current rental rates, construction of buildings has all but ceased. The vacancy rate, or the number of housing units available to Canadians, has dropped dramatically all across the country. People just cannot find a place to live and cannot afford those that are available. The situation is getting worse and people are getting desperate.
In the third quarter of 1981, the price of an average home in Canada was $78,000. Assuming a 10 per cent down payment, $1,000 in property taxes and using the rule of thumb that total payments for principal, interest and taxes should not exceed 30 per cent of the gross family income, a family income of $44,500 is now needed to afford an average-priced home in Canada. House prices in the major cities, such as Toronto, Calgary and Vancouver, are higher. I understand that Vancouver has the distinction of having the highest priced housing in the country.
In 1978, mortgage rates were in the vicinity of 10.25 per cent. As most of us are aware, the rate now is in the vicinity of 18 per cent. The cost of an average home in 1978 was $55,000. The increase in the price of a home, coupled with higher interest rates, means a 129 per cent increase has occurred in the cost of servicing a mortgage on a new home. Approximately 1,200,000 Canadian families are facing renewal of their mortgages over the next two years. Those people renewing a 10 per cent mortgage at 18 per cent will see their monthly payment rise by 41 per cent. Some 40,000 Canadians are expected to lose their homes as a result.
Last fall the minister, as most of my colleagues will remember, asked members to write to him to give him specific cases of those people who would be losing their homes because of mortgages coming up for renewal during that very high interest rate period. I believe I wrote ten letters outlining ten cases to the minister. Some people came to my office almost crying. People were telling me that their payments in the $300 to $350 bracket would rise to the $700 bracket if they renewed their mortgages. Certain people told me that the mortgage companies had issued ultimatums to them saying they would not renew mortgages. I made it my business to contact either the head or the regional offices of the mortgage companies. In some cases, the mortgage companies stated that the individual mortgagor was slow in paying or was getting behind and the company was not interested in that kind of a hassle. Because of
insufficient annual income, mortgage companies knew that those who were having a difficult time paying their present mortgages would find it absolutely impossible to pay a rate half as much again. This put many of them in a very serious situation and they had to walk away from their homes.
Now, Mr. Speaker, the great budget of November 12, the help the poor and soak the rich budget, certainly has not done much for housing. There is virtually no relief for the housing market. The net effect may be that housing starts will plummet even further. The budget offers builders some assistance in the construction of apartments, but the interest-free loans of up to $7,500 per unit will only have a slight impact on the $800 per month break-even point faced by most builders.
I am also aware, Mr. Speaker, that only 15,000 units are going to be built under this plan. They are in certain areas where, in all fairness, the need is great but where the economy is probably the most buoyant. I do not think the small rural areas qualify. Toronto, maybe Hamilton, Calgary and Vancouver will. I am well aware they are just crying for apartments and houses, but that is where the money will be allocated. However, if we were to contact CMHC in Parry Sound-Muskoka or some other rural areas, I think we would find a line-up and nothing would be available.
We are all aware of the cancellation of MURB which was responsible for the construction of about 25,000 units last year,
10,000	more than the government expects from its new program. Of the $150 million available through this bill, $112 million will go to those 15,000 units, which leaves $38 million for all the other programs. And I tell you, Mr. Speaker, that is going to be spread pretty thin across the country.
The government is also reducing its commitment to subsidize social housing in 1982 from 30,000 to 25,000 units. These two policy decisions will result in a total reduction of 15,000 units. Only this blundering government would consider reducing incentives for the construction of rental housing in a period of severe rental housing shortage. Throughout the summer and fall the government promised to bring in some measure of relief for home owners in dire straits. However, the relief in the budget is little more than a program which allows people to keep their homes by going further and further into debt. In February, 1980, the Liberal government promised to make home ownership easier so that more Canadians could choose between renting and owning. Is this the way they keep their promise?
The Progressive Conservative Party believes an urgent need exists to provide relief to home owners in the form of mortgage interest and property tax credits. For a person renewing a $40,000 mortgage at 18 per cent, the tax credits would have lowered the effective interest rate to 14% per cent for the 1981 tax year, and to 13 'h per cent for the 1982 tax year.
Another reservoir of funds has dried up or may dry up, Mr. Speaker, because of this ridiculous budget and its regulations regarding life insurance. I suppose I could be accused of having a conflict of interest because I have had a licence to sell
February 9, 1982

life insurance since 1938, despite the fact that I am not doing so at this time. However, I am very familiar with the situation. Life insurance companies provide untold millions for home mortgages and for business.
I will admit, Mr. Speaker, that when I contacted the insurance company I was agent for and said that Mr. and Mrs. John Smith would like to have a mortgage in Burks Falls or Huntsville or wherever, I was very annoyed to be told that it just was not feasible for them to service a mortgage in that area; they would rather look out of the window of their skyscraper and say "We can loan all the money we want to right here and keep an eye on it". Mind you, that has changed down through the years and they now provide mortgage money for rural areas, but 1 can tell you that 25 or 30 years ago it was pretty difficult to get a life insurance or mortgage company to go into a small town. Of course, CMHC came along and did a good job. And then they did not do so good a job, so hold your applause.


Paul James Cosgrove: Mr. Speaker, I wonder if the hon. member will accept a question at the termination of his remarks?


Stan Darling: Yes, 1 will, Mr. Speaker. Now, the CMHC in its wisdom, when no other funds were available, made direct loans to individual home owners in villages and rural areas. Then, of course, some bureaucrat came along with the brilliant idea that these villages would no longer qualify unless they put in sewers. A good many of the small municipalities could not do that, and there was a period where finally someone got to the minister and the bureaucrats who made the decision, and it was changed so that they were able to get these direct loans.
1 want to emphasize again, Mr. Speaker, that I hope the minister responsible and other members on that side of the House will talk to the Minister of Finance (Mr. MacEachen), quietly but in a persuasive manner, and tell him that he should forget all about the few paltry millions from the life insurance proceeds because it will not be worth sending out the bureaucrats and collectors to try to get the money. There are other more simple ways, and surely to God they will have enough brains to do it.
Those of us sitting here make a reasonable income. In fact, in the eyes of some it is an unreasonable income. Now, all you have to do is have those with an income of $50,000 or more pay 10 per cent more in taxes. We might squeal like stuck pigs, but that, in my view, is fairer than trying to squeeze it out of those in the very low income bracket.
Let me say that we on this side of the House are certainly in support of the bill. We are aware that in all probability the minister is more than aware of the serious situation. The minister had considerable experience before he was demoted. I hope he is listening to this because he, along with myself, served for many years in the highest form of government, that is municipal government; now we are in the lowest form of government! The minister, as the head of a very prosperous city, as a member of the great metro council, and also, I am quite sure, as a member of AMO, the Association of Municipalities of Ontario, and other municipal organizations, should
Housing
know just how serious the situation is with respect to housing. I feel, and I hope I am right, that we do have more or less of a friend in court, as the minister knows the problems for small centres as well as big centres.
I want to mention one other problem which the hon. member who spoke previously mentioned, and I wish to commend him for it, and that is the problems of native people and those in rural areas concerning housing. I believe the minister did intimate that there will be another bill or something coming through which will particularly relate to rural and native housing. I say amen to that. I am also hoping that the RRAP, the Rural Rehabilitation Assistance Program, will be continued because that provides improved housing for areas in which there is no great boom of new housing. That is certainly important. Of course, some of that money is available in grant form to those who qualify on the means test.
We are all aware of the palace revolt. In this great metropolitan daily newspaper, I see the headline "Grits in Palace Revolt".


Mr. Cullen:: The Toronto Sun.


Stan Darling: The Toronto Sun.


An hon. Member:: The bible of Toryism.


Stan Darling: I do not know about that entirely, either; but it certainly keeps the Liberal government on its toes and may it continue to do so.


Some hon. Members:: Hear, hear!


Stan Darling: We are well aware of the palace revolt. I believe ten Members of Parliament were greatly concerned and I guess for very good reason, because they had been getting the message when they went to their respective ridings. Two of them were cabinet ministers. They were worried enough to write a letter to the king-emperor himself, voicing their disapproval in no uncertain terms, which took considerable courage.
Despite the fact that some people say the two cabinet ministers should resign because of this, I say that they should stay in cabinet and keep putting the heat on the Minister of Finance and the Prime Minister (Mr. Trudeau). I know very well that it is not restricted to ten hon. members. The hon. member for Sarnia (Mr. Cullen) was at home for five weeks, I assume; perhaps he was holidaying for part of the time, but I bet he got the message. Probably the only people who had a reasonably enjoyable and quiet holiday were the Members of Parliament in the opposition, because I do not know how any Liberal Member of Parliament could go out in public without being confronted by people concerned about the terrible budget, or MacEachenitis, or whatever one calls it.
A good many of our members can remember a task force on housing about a decade ago. I am now speaking about senior members of Parliament. I know I was not here at the time, and

February 9, 1982
Housing
in looking around this august chamber today, I do not see too many in the House who were here at that time. There are two hon. members on our side who were probably here. This task force on housing was instituted and headed by the hon. Paul Hellyer, who was responsible for housing at the time, I believe. Paul Hellyer came out with an outstanding report and presented it to the cabinet. 1 believe it recommended that one million homes be built over the following five years. The Prime Minister took it, and I guess he put it up on the shelf and let it gather dust. Mr. Hellyer was so disenchanted that he resigned from the cabinet; he later resigned from the Liberal government when he saw the light and came over to this side of the House. When he was defeated, the House of Commons certainly lost an outstanding parliamentarian.
As I mentioned before, we are still in a continually high interest rate period although interest rates have come down from the highest level reached back in September of 1981, I believe, when mortgage rates reached the astronomical figure of 21.4 per cent. I know that at that particular time businessmen were paying 24 per cent and 25 per cent for loans at their banks. As a result of that, many of them ended up by going bankrupt, and some are still simply hanging on. We are still in the 18 per cent bracket when it comes to renewing mortgages, and this is certainly a serious situation.
In 1965, the average new home cost about $17,000, and older homes were even less. In 1981, the average home cost $74,000 and, of course, much more in some cities. I am also aware that the average wage in 1965 was about $5,000 and that the interest rate was pretty well around the 7 per cent bracket. I guess we all wish that we could come back to the 7 per cent bracket, but not necessarily to the $5,000 average wage.
The average income in Canada today is about $18,000, with mortgage rates in the 17 per cent and upward range. However, estimates now state that in certain areas the average house will cost $100,000 to build, which is far beyond the capability of well over 90 per cent of the people of Canada.
Let us not forget that last fall a great many irate people appeared on Parliament Hill whose mortgages were coming due on their homes. I can tell hon. members that they comprised a very unhappy group. They wanted to talk to people. I believe they did talk to a group, and they spoke to the minister in one of the committee rooms in the West Block. I happen to be one of those who went out on the Hill and was able to speak to a good many of these home owners. I asked them, "Well, how did you vote in the last election?" Needless to say, a considerable number of them said that they voted Liberal, but they would never vote that way again. I said, "Well, it serves you damn well right." 1 said, "1 should not say that. 1 certainly feel sympathy for you, but that is the message I want to try to get across to you."


An hon. Member:: Stan, Stan!


Stan Darling: That is true. That is just telling it like it is. It was amazing to hear the stories of these people, who were very worried. One particular man was getting on in years, and by
that I mean he was not very young. I said, "Have you got a mortgage?" He said, "No but I am here to protest because my daughter and her husband have a mortgage and it looks as though they will lose their home." He was a resident of Ottawa. I am quite sure that a good many of the people who appeared on Parliament Hill finally had to decide that there was nothing else to do but to take the keys and hand them back to the mortgagees, and then walk away to look for some sort of rental accommodation within their budgets.
We are all well aware of the tragedy which occurred two or three weeks ago in the little village of Spanish, Ontario, up in the Sudbury area. Nine people died in a fire there, including a family of seven. As most hon. members have read, this particular family was purchasing a home in Spanish. In fact, I have seen a picture of it, and it was a modern bungalow. Because of the drastic increase in the family's mortgage payment as a result of high interest rates, they finally decided that there was just no way they could swing it and keep it. They just walked away from that home and moved into an apartment in a converted school. As a result of moving there, they all burned to death.


Douglas Grinslade Lewis: How do you feel about that, Paul?


Stan Darling: A case like this could happen time and time again. We know that many people here in Canada are living in very poor accommodation, accommodation which is unquestionably unsafe under fire standards and maybe under health standards as well. Something must be done.
The minister must get the message across to the rest of his government that housing is important. We must do something concrete so that it will help a great many more people than it seems this bill will help. In the past, I heard one of the hon. members mention that literally billions of dollars have flown from Canada to the United States because the economic climate is more attractive there. Interest rates are higher. When the interest rates again go up here, some of this money will return. I am aware of this and I am sure the minister must be as well. Many successful developers who are developing and have developed land, built homes and apartments, have reached the point where the economic climate is not satisfactory in Canada, so they have gone to the United States where they are welcomed with open arms. That is a fine state of affairs when we are literally crying for housing here.
The Canada Mortgage and Housing Corporation and the federal government are partly to blame, but not entirely. As 1 mentioned in the House, the other levels of government are also to blame. There is the red tape of the municipal governments, the damn planners, zoners, and all the rest who hold up the development of buildings. Consequently the developers have said "That's it".
Each time there is a delay, it adds to the cost of the land. The developers borrow money on a short-term basis. When interest was at 12 per cent, money was borrowed for short periods in order that they could get the plans ready and the
February 9. 1982

lots subdivided. By the time they were ready to build, they were paying 16 and 17 per cent. This is because they had been held up by the bureaucracy.
Some municipalities in the United States have come up with a brilliant idea which I wish our municipal and provincial governments would adopt. They presented their idea to the planners and citizens' groups. If an apartment or housing development is going to be built in a certain area, there are always many citizens who do not want the additional traffic, housing and schools, and they immediately start petitions. This causes delay, delay, delay and raises the cost of housing. It also cuts down on the amount of housing available.
In certain areas of the United States they have decided to cut down on the long delays. The planners, zoners, and municipal groups which have to approve these matters are being told that the procedure will be done in reverse. Rather than plans sitting on their desk for months or even years, they are given 90 days in which they had better come up with a damned good reason why the project should be delayed or it will go through automatically. If we followed that procedure here, it would help the housing industry and would probably result in cheaper housing.
I hope the minister will accept some of these suggestions presented by members on all sides of the House. He is aware that much needs to be done. We on this side have presented various suggestions with regard to housing. As we stated, mortgage interest deductibility and municipal tax deductibility are both suggestions that should be considered. I bet that a great many of the thousands of people who voted Liberal in February, 1980, wished they had the opportunity to vote again today. They would welcome that program with open arms.
Having been a municipal mayor for a number of years, I am sure the minister will agree that having to pay tax on tax is unfair. Why should people who pay municipal taxes to Scarborough or to the village of Burks Falls not be able to deduct that amount from their income tax up to a certain level?
When I was a vice-president of the Ontario Mayors and Reeves Association, I made that suggestion. It received the endorsement of 90 per cent of those who were present, but did not get very far when it came to Ottawa, where it was just thrown in the ashcan. It is one area where a home owner would get a break. This has been done in the United States for years. We have adopted some of their other tax measures, such as capital gains.
This brings me to another can of worms, the capital gains tax and the way it is being tightened up. According to the Minister of Finance, all businessmen have more or less been tarred as crooks. That is it in a nutshell. In a holier-than-thou attitude on November 12, the minister said that he would tighten all loopholes for businessmen and women, yet those "loopholes" were legitimate business expenses.


Mr. Taylor:: Absolutely.


Stan Darling: They were brought in by the government in the first place, having been dreamed up by the bureaucrats. I
Housing
spoke to the former minister of finance, the hon. member for St. John's West (Mr. Crosbie), about this. He said that those same bloody bureaucrats brought those suggestions to him, but he told them where to put them. Why did the present Minister of Finance not do the same?
Something else that affects the economy and housing is the capital cost allowance, which has been reduced. The minister in his wisdom says it will make no difference. I can tell him that it will make a considerable difference to those who were going to expand their operations and purchase additional equipment. They are no longer going to do that.
There were 17 items on which the minister recanted on December 18. Many of us are still worried about the effect that some of the items he listed will have. Some are just a delay. Others may be good and he may follow through with them. Before the budget is finally passed, I hope the minister will take seriously the suggestions with which he has been bombarded. 1 also hope that this housing bill will provide more money than originally intended.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Burlington (Mr. Kempling)- Trade-(a) Importation of light trucks (b) Request that government take action; the hon. member for York-Sunbury (Mr. Howie)-National Defence-Possibility of leasing equipment from United States; the hon. member for Fundy-Royal (Mr. Corbett)-National Defence-(a) Committee study of Canadian Forces Base Chatham, N.B.-(b) Minister's recommendations.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Cosgrove that Bill C-89, to amend the National Housing Act
14826
[Stage Direction]
February 9, 1982
Housing
and the Canada Mortgage and Flousing Corporation Act, be read the second time and referred to the Standing Committee on National Resources and Public Works.
Paul James Cosgrove: On a point of order, Mr. Speaker, the last speaker indicated that he would entertain a question at the end of his comments.


The Acting Speaker (Mr. Ethier):: I understood that, but the hon. member used all his time. This can be done only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Paul James Cosgrove: The hon. member made some interesting requests with regard to the role of the Government of Canada in housing. I wish to refer to comments by his colleague who represents the Conservative Party and sits to his right. I quote from Hansard of February 5, 1981, page 6932:
The province of British Columbia is well-off and can look after its own housing problems; it does not need to come to the federal government for assistance. This government should stick to the areas in which it performs well and not go into areas of provincial jurisdiction-


Douglas Grinslade Lewis: On a point of order, Mr. Speaker, the minister of housing would have benefited considerably from the Speaker's comments at noon today-


The Acting Speaker (Mr. Ethier):: Order. I will first have to hear the minister who has the floor on a point of order.


Paul James Cosgrove: Mr. Speaker, my question was, who is representing the position of the Conservative Party, the last speaker or the hon. member for Mississauga South (Mr. Blenkarn)?


Stan Darling: Mr. Speaker, I presume that the minister will be in his seat this evening. The hon. member for Mississauga South (Mr. Blenkarn) will be speaking later this evening and I suggest that he direct his question to him.
As far as Vancouver, British Columbia, is concerned, Mr. Speaker, I represent a rural area, not one of the great wealthy areas like a borough of metropolitan Toronto or even wealthy British Columbia, although there are poverty pockets even there. Therefore, I feel that the government certainly has a job to do to assist the housing industry. Regardless, that is the message I will deliver and continue to deliver.


Roch La Salle: Madam Speaker, I should like to comment on this bill, which affects a major sector of the economy in Canada and particularly in Quebec, namely, housing. Two years ago, in a situation similar to the one we have today, our friends opposite were objecting to a program we had brought in, which today, as the minister is aware, would provide $150 per month. The bill was voted down with the help of the New Democratic Party, which is now complaining that nothing has been done for two years. Looking back, Canadians must realize that the solution we proposed 24
months ago was the right one, considering the situation prevailing today. What has happened since? Not much, except for an election and a government that is categorically opposed to helping home owners and is letting a major industry, namely, residential construction, go into bankruptcy.
Yesterday, the minister asked us to pass the bill quickly. I can see why he would rather not have a long debate in the House, and if I were in his shoes, I would feel very uncomfortable. However, I believe some of the members of this House will remind the minister, and he deserves to be reminded, that a bill that is supposed to help only 10 per cent of those who need help is entirely unsatisfactory and incomplete. When everyone keeps repeating that 40,000 Canadians stand to lose their homes, the minister comes up with a proposal that is going to help one out of ten, and only under certain conditions.
Since the session resumed, I have been trying to make my colleagues wake up to various facts such as the present state of the economy, a budget that is unacceptable, the hundreds of representations coming from all parts of the country and the present high rate of unemployment. Today, we are concerned with housing. I remember, Mr. Speaker, I probably forgot to tell the House about this. In August, 1981, when I was returned to Parliament after a byelection, one of the three main points I stressed in my campaign was the lack of a policy on interest rates, which was causing so much suffering and concern and had caused thousands of people to lose their homes-I shall be giving some figures later on, not my own, but provided by a highly respected organization. It was clear that people were very unhappy about the fact that nothing was being done and wanted action, so I promised the people of the riding of Joliette that I would go and remind the minister that he had a responsibility here, and would ask him to have a little more guts and use his influence to persuade the Minister of Finance (Mr. MacEachen), who refuses to listen or talk to them. I believe our repeated attacks were successful in waking up ten of our colleagues who actually went so far as to sign a piece of paper. Incredible! Mr. Speaker, either this is some kind of joke, and the public will be their judge, or these people are in earnest. If they are, it means that by writing to the Prime Minister and publishing their letter, they are actually admitting they are unable to speak to the Prime Minister directly, and this group includes two ministers.
Or else it is part of a plan, considering the results of the recent federal-provincial conference, where the government lost the confidence of the ten provincial premiers, and considering the fierce opposition from all parts of the country, with organizations actually telling the government that it is leading the country straight into bankruptcy. The Right Hon. Prime Minister (Mr. Trudeau) realizes that he can no longer keep his Minister of Finance or in any case maintain his economic philosophy which has been a colossal failure-and it wasn't me that said it at the federal-provincial conference! In the circumstances, the Right Hon. Prime Minister is clever enough not to
February 9, 1982

want to give the credit to all his opponents. The Minister of Finance has to be allowed to backtrack, and with this plan * involving two ministers and eight other members, the Right Hon. Prime Minister would subsequently be able to say that he backtracked because of internal pressures. If that were true, not ten but at least 50 members would have signed the letter.
I wonder whether the members for Frontenac (Mr. Cor-riveau) and Duvernay (Mr. Demers), whom I saw a while ago, and the member for Verdun (Mr. Savard) would have signed the letter as well. And today, the Minister of National Health and Welfare (Mrs. Begin) had even harsher words than usual in front of the television cameras, and during oral question period, we had this absurd situation where the Right Hon. Prime Minister felt he had to challenege his caucus and his members. He looked them in the eye and asked them: It isn't true you don't support me, is it? And the Minister of National Health and Welfare even applauded. Quite a show. Unfortunately, this is the kind of attitude I have often seen around here. I was reading in yesterday's Hansard the speech made by the Parliamentary Secretary to the Solicitor General (Mrs. Celine Hervieux-Payette) who, after signing the letter in which they asked for emergency measures in the housing sector, because they realized that the country was losing 50,000 units, asked us to push this bill through at top speed. I am sorry, Mr. Speaker, but I think there are members of the official opposition who have some comments they want to make to the minister, and I have felt for quite some time that the minister must feel very dissatisfied about his failure to convince the Minister of Finance that more should be done than what he is giving us today. This bill is deplorable, and it fails to meet any of the needs of Canadians today.
The present government seems to forget that to turn the economy around, it has to do more than increase its expenditures by 22 per cent and put hundreds of thousands of people out of work as a result of the energy agreement, which is generating billions for the federal treasury. The government should have redistributed this revenue fairly and used the money to turn around the most productive sectors of our economy, including the construction industry. Mr. Speaker, the House will agree that the situation has been very tough in this sector during the last two years. A sector that involves 33 per cent of the labour force has been ignored. Once more, the minister is going to ask us to trust him, to support his policies and to help pass this entirely inadequate measure. If we consider the construction industry's significance as a producer of economic spin-offs and as an industry that generates 30 per cent of the jobs in this country, it is really hard to believe that a federal subsidy affecting 15,000 housing units in Canada, including between 1,000 and 1,500 in Quebec, is going to turn around construction, when we actually need 200,000 units. In Quebec alone, at least 35,000 units are needed each year.
Housing
Because there is a shortage of new housing, the construction industry is in a slump, there is a shortage of accommodation and rents are inflated.
I also deplore the lack of any concrete measures to promote the recovery of the building industry. I greatly deplore the fact that the government has failed to implement our proposal to set a preferential interest rate for mortgages, thus enabling thousands of home owners to keep their homes and thousands of other Canadians to realize their legitimate dream of becoming home owners. Nothing has been done in this regard, Mr. Speaker. It seems to me that socially, to become a home owner is something good and positive for an individual. He becomes more committed to his own municipality, to his province and to his country. Nothing in this legislation confirms that the government pursues that objective.
Of course, 12,000 Canadian taxpayers out of approximately
900.000	who will face renewal of their mortgages in 1982 will receive assistance. No one can deny that enabling renters to become home owners not only has very positive social and human consequences but also enriches the community and contributes to the general welfare. I would also like to point out that the budget of the Conservative government included a proposal which would have helped home owners. That proposal involved a $150 monthly credit, as I said earlier. That type of housing credit would have prevented the social tragedy that we experienced last year and are still experiencing. It is useless to blame the United States and international economic conditions because nothing prevents a government with some sense of morality and social responsibility to implement a special program of preferential interest rates, which would at the same time be a good way to boost the building industry.
I am thinking, Mr. Speaker, about some of the figures mentioned yesterday in the House when my hon. friend for St. John's East (Mr. McGrath) said the following:
We know that the proposals contained in this bill will affect only about 12,000 households in Canada out of approximately 900,000 which will be renewing. It barely addresses the problem, and those who are in "dire straits"-a term used by the Prime Minister in addressing what the government intended to do; he suggested it would help those in dire straits-can look forward to a one-time payment. Yet we are told that mortgage interest rates are on the way back up again after falling from the high of 21.4 per cent of last September. We are told they are on their way back up again and will again reach 20 per cent this year.
It is obvious that the legislation now before uS does not provide this assurance and encouragement to those who want to become home owners. To meet the needs of the Canadian people, an average of 220,000 housing starts a year would be needed between 1981 and 1986. In 1981, there were only
178.000	housing starts while 222,000 would have been necessary to meet our needs.
Mr. Speaker, I would now like to quote a few figures, those of the Quebec Homebuilders Association. In 1976, there were 68,748 housing starts; in 1977, 57,580; in 1978, 43,671; in 1979, 41,730; in 1980, 29,186; in 1981, 29,500, and 26,000 are expected in 1982. Mr. Speaker, this shows how important it is

February 9, 1982
Housing
to deal with this matter today, and I think it would be interesting for the minister to realize the negative impact of such a lack of measures and how costly it is for Canadians. For example, I have here a report of the eastern township branch of the same organization, from which I would like to quote the following excerpt:
We would like to point out to you that every thousand dwellings that remain unbuilt results in a dead and irremediable loss of $84 million for the gross national product as well as a loss of 680 direct jobs and 580 indirect jobs, not to mention the 950 jobs lost through the multiplying effects.
A quick calculation-and it is important that the minister know this and realize exactly what this government is responsible for in the end-a quick calculation reveals that 44,000 units were not built in 1981, keeping in mind the needs of Canada, and that it entails the loss of 30,000 direct jobs, a loss of 25,520 jobs and a total loss of 41,800 jobs if we take the multiplier effect into consideration. That amounts to a gross national product loss of $3,696 billion. That is the result of a lack of policy which happens to be of great significance to Canadians who need it.
Mr. Speaker, I am thinking about those figures and the prevailing situation across Canada, about those hon. members who dared speak their mind ever so gently and very politely castigate the Minister of Finance and his colleague responsible for housing for failing to do the bare minimum. 1 hope there are more than ten on the other side. When I look at the current situation in my province alone-I say that because a lot of members from my province sit across the aisle-I have the impression that there must be at least five times as many who feel the same way. They would not run the risk of being called dirty names as some of them were by the Societe Saint-Jean-Baptiste not so long ago. As Quebecers and Canadians, I suggest we have responsibilities and duties in the House.
I told the people of my riding of Joliette that I would urge this government to take measures which meet their needs and which flow from moral and social responsibilities. That is what I am doing today. I strongly condemn this minister and this government for failing to propose adequate measures. One member from Quebec spoke last night, and I hope there will be others. 1 hope that the ten members who signed that letter will stand up and rake the minister over the coals, as I am doing, because he failed to come up with a measure to meet the minimum requirements of thousands of Canadians. Then again, maybe the whole thing was a big joke to enable the Prime Minister to discredit members of the opposition who for too long have been doing their job and discharging their daily responsibilities in seeking improved benefits for people who are suffering. In the short term, there may not be 25 solutions, there are no miracle solutions, true enough, but we have to make a choice. There are certain classes of people who cannot be left to fend for themselves.
Today I will not mention the thousands of home owners who, in addition to interest rates, have to cope with a problem created by an unacceptable product, urea formaldehyde foam insulation, which the government approved but for which it will not take any responsibility. There are enough Canadians who are suffering as I speak. There are enough Canadians whose first ambition is to become home owners. Thousands of Canadians are worried and wondering whether they will be able to keep their own home. God knows how hard they worked and did everything they could to keep their home!
Mr. Speaker, it seems to me that there is no need debating in the house day after day and asking this government to come to its senses. Would it be that the Prime Minister has lost all contact with reality? Is the Minister of Finance persevering in his lunacy to the point where ten hon. members and, I hope, more of them, will press him further?
How can a government imagine that it still deserves the public's confidence when it leaves so many problems unsolved? How can the minister responsible for housing still sleep soundly tonight, feeling that he is answering the needs of Canadians? 1 do not doubt the minister's intention to try to obtain more from the Minister of Finance, but if indeed he has tried, I must tell him now that he has failed miserably. We have known other ministers who had needs and who had made known the respective needs of their departments, and who have failed in their efforts to communicate with this Minister of Finance who will not hear anything nor accept the fact that his current policy, in line with his predecessors' policies, is a complete failure. On behalf of thousands of Canadians, and Quebecers too, I can say to the housing minister that there are in Canada people who have problems-these figures are selfexplanatory-


Mr. Cyr:: They are Canadians too!


Roch La Salle: Yes, they are Canadians too. Perhaps the member for Gaspe (Mr. Cyr) could tell me what else is new. I was referring to Quebecers because I am from Quebec, and other members are going to talk about Ontario or Alberta. Mr. Speaker, whatever I say, they are going to be offended. I want to ask the Minister of Housing to make a statement and to give us something better than this inadequate legislation. I am sure, and I cannot say it often enough, that if they have been forced to take a position, there must be more than ten members who think this way. It just is not possible that only the opposition takes this view. I believe the members opposite also have a responsibility, and I feel that we must, that it is our duty, to demand that they do more and do it better. The Prime Minister and the Minister of Finance, it was generally felt last week, no longer have the confidence of the provincial premiers. That is obvious. I wonder how long the Prime Minister is going to persist in his stubborn attitude, while Canada's problems get worse and worse. People say he is going to retire. He may not give a damn, but he has no right to make Canadians suffer the
February 9, 1982

way he is doing now through his own stubbornness and the attitude taken by his Minister of Finance. I want to tell the minister responsible for housing, who needs our support, that we are with him all the way, but not unless he brings in measures that do more than this non-legislation being served up in the House today. Canadians need more than that, and thousands of Canadians are demanding action by the government. The Canadian economy needs to be stimulated, and this can be done by stimulating the construction industry. Thousands of people would get their jobs back. That is why 1 am making these demands today, and I will continue to do so as long as the government fails to respond satisfactorily to the needs of our constituents across Canada, including those in my own province.
Mr. Speaker, I shall give other members a chance to express their views and make their comments. I hope that there will soon be a measure to deal with interest rates, that there will be programs, and although the program proposals may differ, we know perfectly well that there are not 15 different ways of lowering interest rates in order to turn around the construction industry and give Canadians a chance to have their own homes. Special interest rates are necessary, whatever the program or arrangement, but they should not be restricted to
15,000	units, as the minister said today. Shelter should be a right and it should be available. If this is part of our social policies, it should also be part of the policy of the minister responsible for housing. It should also be part of the philosophy of the Minister of Finance and the Prime Minister, who was talking about a just society only 15 years ago.
Mr. Speaker, we have come a long way since then and our society seems to be getting less and less just. 1 think many Canadians are realizing that too many promises have never been kept. Today, I once more want to ask this government to provide just and equitable measures that will help thousands of Canadians make a happier life for themselves.


Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, a few minutes earlier the minister for housing, who is no better at asking questions than he is at answering them, made some comments with respect to certain comments of mine at an earlier point. Clearly the minister must understand that the provincial governments which are involved in housing in terms of land, land assembly and land servicing-by and large are able to direct the planning of their provinces adequately to make sure that houses can be built, and where we have land costs that are totally outrageous, as we have in British Columbia, or certainly had, that a lot of those problems are stemming from areas of provincial responsibility.
Mr. Speaker, the major national responsibility which the minister refuses to accept is his government's totally inept handling of the interest rate concerns in this country and particularly how those interest rate concerns affect the housing industry. That total ineptness was no more pronounced than could be pronounced in the budget of November 12.
Housing
In the past months or year or year and a half, we have seen the total destruction of the capital markets of the country. It is not very long ago that a person borrowed money on a mortgage for 25 years. That slipped to ten years, then to five years, and now, even in accordance with the admission of the minister, to six months. You know, we almost have the interest rates for the long-term financing of Canadian housing today determined every Thursday on the auction of 90-day treasury bills.
Mr. Speaker, this condition in the long-term financial markets of the country lies totally at the doorstep of the Minister of Finance (Mr. MacEachen), the colleague of this minister who now apologetically brings before the House a makeshift, shabby piece of legislation, patchwork of the worst order, to try to solve, in a patchwork type fashion-to try to solve but not even begin to solve, some of the problems that the financial policies of his government have created.
Let me deal briefly, Sir, with the budget and how it destroyed the long-term markets even further than they were already destroyed. The minister will know that one of the major sources of medium and long-term money in this country, perhaps the greatest source, has been the insurance industry. What does this budget do? It attacks the insurance industry, it attacks annuities, it attacks all types of long-term savings, by trying to create a deemed income concept. The insurance industry declared before public hearings, both here in Ottawa and in London and in Kitchener, that that industry will lose at least $1.75 billion of long-term capital for long-term investment in the economy of this country for housing, if you want to put it that way, in this year alone by the action in this budget.
What does the budget do? It attacks registered retirement savings plans by discouraging people from borrowing on a short-term basis to purchase them. It discourages long-term savings and wipes out the IAAC program. It makes deferred annuities unpalatable and attacks long-term life insurance. If the government was looking to do damage to people who wanted mortgages for decent periods of time, it could not have done it better. Where was the minister when that matter arose? Has the minister written a letter, as did his cabinet colleague who is sitting beside him now, to the Minister of Finance and to the Prime Minister (Mr. Trudeau) respecting housing concerns?
What have we heard from the government in connection with long-term capital? John Acheson, president of Dominion Life, said that the effects of the budget with its deemed income provisons will further damage what savings are left in the insurance industry by forcing that industry to keep more and more of its money in short-term investments, because it will be obligated to look after the distribution of income every three years to policyholders and annuitants to pay their income taxes.
The effects of the budget with respect to registered retirement savings plans, IAACs, deferred annuities and life insurance, destroy one of our great sources of long-term capital and pins us even further to the day by day market situation where

February 9, 1982
Housing
people cannot find money for a ten-year, 20-year or 25-year commitment; they will only obtain 90 day commitments.
Gerald Voisin of Kitchener spoke to us during our hearings in that city. He said that builders today were playing Russian roulette. If brave enough they start projects, but in order to do so they are required to do an analysis of the cash flow. He asked how builders could calculate their interest rates. Are they to take 18 per cent out of the sky and say that that will be the interest rate? They cannot obtain commitments on projects which will be open for business, for example, in September. Builders will not be able to fix interest rates on their projects until September, and then they would only be fixed for one year. One must be nuts or playing Russian roulette to commence a building operation in the private market with the present monetary system. What is the minister's attitude toward apartment construction? What about these $7,500 loans? What about the balance of the cash? There is no fixed interest on the balance of the cash. There is no place where a builder can obtain ten-year or 20-year mortgage money to determine his carrying costs, fix his project and package it. Unless there is some stability in the marketplace, $7,500 interest-free loans, about which I will speak later, are absolutely useless.
The government attempts to say that it is doing something for housing in this patchwork bill, but it does not even begin to look at the problems which now exist. It clearly throws out the MURB program. Perhaps there was good reason for doing that, perhaps there were some abuses of the program; there were certainly some problems. But it does not get down to the brass tacks of encouraging investors into the marketplace. The attitude of government in its $7,500 loans for apartment construction indicates that it believes big government knows best where to put the building and what are the housing requirements.
For a moment I should like to talk about the interest rate problem. All hon. members know that to carry a $15,000 mortgage at 10 per cent costs approximately $447 per month. At 20 per cent, it is nearly doubled to $807 per month. There are massive changes in what people can afford to carry. A person who borrowed at 10.5 per cent in 1978 is now looking down the pipe at 19.5 per cent or 9 per cent more, but his or her income has not risen proportionately to carry the cost of the debt. This is one of the reasons for the problems with AHOP loans. People were sucked into buying houses on the basis that they thought they were receiving reasonably longterm financing from the government. They found out they were receiving only five-year financing and that their interest rates doubled. When they were committed up to the hilt to purchase properties, there was no way their incomes could conceivably increase to meet virtual double payments five years later. That is the essence of the situation.
Perhaps the problem is worse today than it was prior to the budget. When a person decides to purchase a house, he is looking at a six-month or one-year mortgage at 18.5 per cent or 19 per cent. What will he do in six months' time when his
mortgage comes due? Will interest rates this August be 20.5 per cent or 20.75 per cent, as they were last August?
Before coming into the House today I heard that American interest rates were up again and that the U.S. T bill rate auctioned today at 14.10 per cent. If the government follows the trend in American interest rates and does its usual thing, interest rates in Canada will rise once again and there will be the Thursday auction concept whereby the cost of financing property will vary almost weekly. How can a young couple, or anyone for that matter, make a long-term commitment to purchase a home with the idea that the Thursday cost might be different next Thursday or the following one? We cannot expect people to buy or commit themselves on that basis. Builders cannot work on that basis, prospective owners cannot buy on that basis. The bill does not address the problem.
The ministry issued a CMHC paper entitled, "CMHC 6-81 BP", to which I should like to refer. It indicated that over the next two years approximately 1.2 million households will be renewing their mortgages. It also set out the tables on those mortgages and indicated that most of those households will be able to do so, although adjustments will be painful. It indicated that for these households house payments will increase but that they will still be paying less than 30 per cent of income for mortgage debt. Also it went on to indicate that their equity will allow them to take steps to reduce their mortgages and that 30,000 to 40,000 households cannot even take steps to help themselves and retain their homes.
Presumably it was as a result of this report that the minister came up with the most half-baked expropriatory program ever conceived by any government. Mr. Speaker, when you and I purchased our homes we may have assumed mortgages and made payments on them. Every time we made payments we felt that the debt was reduced a little. Perhaps it was only $10 or $15 per month, but at least it was something. The government says that you use 30 per cent of your gross income toward housing payments. You use all of your blood and sweat to pay the payments, and if you have $44,000 worth of mortgages, like Fernando Brunetti at 2500 Harmond Court in Mississauga, you go into this kind of scheme advocated by the minister. But after a year, you do not owe $44,000, you owe $46,000. What kind of a disgraceful, immoral, indecent suggestion is that? That is the very suggestion contemplated in the guarantee provisions to the insurance and trust companies in this bill. You use 30 per cent of your gross income, your blood and sweat, and you pay and pay and pay, and at the end of the year you owe $2,000 more than you did at the beginning of the year. All of that is justified because you have equity in your property and you are borrowing against your equity. In other words, the Brunettis can live in their house. They cannot afford to do so, but the government says: just live there and owe more and more money. In other words, operate just like the Government of Canada. The government cannot pay its bills, so it borrows more. This bill creates an immoral and indecent suggestion.
February 9, 1982

It is true that the bill goes on to do something for those people who eventually get to the point where they have no equity. For those people, the minister says "I will be nice to your big bank or trust company. I will pay your big bank or trust company up to $3,000 so they will not throw you out until after November 12, 1982."
Here we have a problem that is going to suck people in to greater and greater debt. These are debts they cannot pay today because they do not have enough income to pay the payments today. But after November 12, 1982, they will owe, as in the case of the Brunetti family, $2,000 more than they already owe. They cannot pay the interest on $44,000 because of this interest rate policy of the government. I do not know how people can pay interest on $46,000. Until interest rates decline 6 per cent, the Brunettis do not get into a positive position of 30 per cent of their gross income for housing. Isn't that great? We have a situation where we know people cannot afford the interest on the $44,000 at the current demanded rate of the trust company, so we say: capitalize the interest. But we know that the effect of capitalizing interest will be to increase the debt by $2,000. We know in our heart of hearts that we only have to look in the financial pages to see what the money markets are like and we know that interest rates will not be down 6 per cent by November 12, 1982. We know, and the minister knows, that the Brunettis will be up the creek for $2,000.


Paul James Cosgrove: Mr. Speaker, I rise on a point of order. Does the hon. member stand by his offer to accept a question at the end of his remarks?


Donald Alex Blenkarn: I will be most delighted, Mr. Speaker.
I want to leave the question of this despicable system where people owe more after a year than they already now owe. This is a condition certified more or less by this bill. Indeed, the bill offers to guarantee that kind of arrangement.
I want to go to the next matter dealt with in the bill which is that of allowing the Canada Mortgage and Housing Corporation to deal with premiums on its insurance fund.
I suppose I was quite refreshed yesterday when the minister spoke. He said that if his actuaries had looked at AHOP and how to ensure AHOP mortgages properly, they should have received a premium of 8 per cent of the amount of money involved on each AHOP mortgage.
We all know that if Canada Mortgage and Housing Corporation had to charge a premium of 8 per cent as a mortgage insurance fee, there would not have been any AHOP in the first place. A discount of 8 per cent on a $44,000 mortgage is $3,200. That would have been the fee. If that had been the case, there would not have been any AHOP at all. That probably would have been good for Canada. This party was not really in favour of it. I am sure that my friends to the left were not all that hot to trot with AHOP either. AHOP was essentially a deferred mortgage payment program. The same type of philosophy that is behind this "borrow on your equity
Housing
program" contained in this bill is a philosophy developed by the officials in the Canada Mortgage and Housing Corporation. This minister says that that type of insurance, his actuaries tell him, would cost 8 per cent. That should tell the minister something. That should tell the minister that he has some pretty poor officials in his ministry and in the corporation. These were the people who thought out AHOP and who got the corporation into a financial mess in its mortgate insurance account and lost $600 million or $700 million. This is the group of people who now determine that the insurance fee should be 8 per cent for an AHOP mortgage. Yet this is the group that would go on and on with a program to add interest to debt and put people closer and closer to bankruptcy.
Surely the minister must see through the advice that he is getting. Surely the minister must, in that very analysis of his insurance fee, understand what has happened.
I made a suggestion yesterday in this House. I put a question to the Parliamentary Secretary to the Minister of Regional Economic Expansion (Mr. MacLellan) who, I presume, has something to do with this particular field. I asked whether the parliamentary secretary could indicate whether the new provisions in this bill would enable the Canada Mortgage and Housing Corporation to guarantee a fixed rate of interest for five years.
May I call it six o'clock, Mr. Speaker?


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
The Acting Speaker (Mr. Blaker):: When the House rose at six o'clock, the hon. member for Mississauga South (Mr. Blenkarn) had the floor.


Donald Alex Blenkarn: Mr. Speaker, immediately before the dinner adjournment I was commenting on a question I asked of the Parliamentary Secretary to the Minister of Regional Economic Expansion. I asked him if one of the reasons for the change in the insurance provisions of the act was to allow CMHC to guarantee a fixed rate of interest for five years on payment of an appropriate fee. I made that suggestion because that might be a worth-while thing for the corporation to do. I know the minister wants to ask me some questions with respect to where I or my party may stand, and I suggest that in the process he might answer that question.
Next, Mr. Speaker, I want to deal with apartment shortages that exist throughout Canada. Clearly it is because of this government's program with respect to handling accommodation as an investment that we have gone from a situation where apartment landlords were prepared to give you a trip to

February 9, 1982
Housing
Florida or three months rent free along with all sorts of other advantages if you signed a lease, to one where we have now in Mississauga, according to a report I received today from the corporation, a vacancy rate of 0.3 per cent. That is a reduction from 0.8 per cent in the past year, and clearly all the indications in the minister's own report with respect to rental accommodation are that we are very rapidly getting to the point where there will be absolutely no rental accommodation in the country.
In making that statement. Sir, I ask you to look at our past history. From 1971 to 1973 we were constructing 106,000 apartment units a year, and we produced them because we allowed the owners to deduct the capital cost and associated carrying charges from their other income. We treated apartments the same as we would any ordinary investment income. Now I want to point out that anyone who has ever been involved in the building business, whether building apartments, office complexes, a group of stores or shopping centres, knows the project will not carry itself in the first, second or third years from rent alone. In that case the owner or developer has to have some method whereby he can write off new project losses against other income.
Now ever since 1971, when we changed the Income Tax Act around, the tax laws have prevented those who would invest in rental accommodation from treating it as a business. The consequences are that if you are collecting rent and that is your only business, it does not qualify under the small business provisions of the Income Tax Act. You cannot write off the cost of a car used to collect the rent, or other things associated with that project. If the rent you collect is insufficient to cover your martgage interest or capital costs associated with the building, you cannot deduct those costs from other income. It has to be confined to the rental from the building.
Now, Sir, those very conditions imposed by this government in its tax changes have led to the situation where investors look at residential rental units as a no-no, something you do not want to invest in. And the minister wonders why we have a shortage. Now, of all things, we have a situation where the government comes along and says to those who build rental accommodation: Well, here is $7,500 for free, build us a suite.
That is not the way to go about it. We do not need the bureaucracy of Canada Mortgage and Housing Corporation, we do not need a series of grants and a series of proposals to understand that there will never be a situation where any government can ever provide enough grants or make enough payments to individuals to get them to do something which does not make business sense.
I therefore ask the minister, who is here tonight, will he please look at the whole problem? He should look at the situation we had prior to these changes to the Income Tax Act with the surplus of rental accommodation we had in those years and compare it with the deficit in rental accommodation we have today. He would then realize that it is not the builders, it is not the developers, it is not the rich landlords and it is not provincial rent controls which have caused the problems. The problem has been caused because the economics of the matter, which have been determined by tax laws, among many other things, have militated against apartment construction. The $7,500 grant for each of 15,000 units is a bag of nothing. It will not solve the problem of the shortage of rental accommodation in Canada this year. It will not even go partway there. The minister will know that from 1971 to 1972 we built an average of 106,000 apartment units a year. In 1981, we built 52,000 apartment units, of which 35,000 had to be government assisted, and only 17,000 were built by the private market on its own. The forecast in the minister's own briefing notes is that there will be precious little, if any, construction next year without some sort of government assi-tance. The fact is that if we were to change the tax laws and get back to realities, we would wind up with a private market which would satisfy our needs.
I want to leave that subject of apartment shortages for a moment. It is a horrendous problem. It means that shortly people will pay key money to have an apartment. People who cannot afford an apartment will have to live with mother. As mentioned by other hon. members, the costs of a one-bedroom unit today amount to $750 to $800 a month, if the true costs were calculated.
However, aside from the social problems which this situa-[DOT] tion creates, we will get nowhere with this business of continuing to make grants in an attempt to bribe builders to build something which is not worth building, because they will not ' receive the financial returns they would normally expect to receive.
Let us really deal with the real problem. The problem boils down to interest rates. As Your Honour knows, we as a party held hearings right across Canada in 14 cities. One hundred and sixty-eight witnesses came before us. Many of those witnesses were involved in builder organizations and real estate board organizations. They were people who were concerned about housing and people in the housing field. When we asked what kind of interest rate people could realistically afford to pay under the present economic climate, the answers came back to us that it would be somewhere between 12 per cent and 14 per cent. The Hamilton district building group said that over a 14 per cent interest rate, every increase by one per cent eliminates 25 per cent of the purchasers. The same applies, of course, to apartment rents, because it is obvious that no one will build an apartment building without getting a mortgage on it, and one must pass the mortgage interest on to the rent charged. Therefore, we are not making any distinction between owners and renters.
What we must have is a government which is prepared to come to grips with the fact that interest on housing loans must be at a fixed rate, one which the purchasers or renters can reasonably afford to pay on the basis of their incomes. Somewhere along the line, a government must divorce the housing cost of money from the commercial cost of money for ordinary business transactions. This is because, when one builds a building, it should last for 25, 35 or 50 years. Indeed, the amortization of a building was originally thought to be a
February 9, 1982

50-year proposition. One is building a long-term asset, and the debt should be paid off in around 25 to 30 years. The debt must be guaranteed for that period, and the interest rate on that debt must be guaranteed for much longer than six months. It must be guaranteed for a year, two years or three years, which is presently the duration of guarantees today. Indeed, it must be guaranteed for a long period of time. If we are to end up with a government-induced high interest rate policy, the government surely has an obligation to ensure that people have a place to live. It should organize a pattern to ensure that people can borrow long-term money at a fixed rate of interest, on a fixed type of amortization plan.
' I say to Your Honour that this government is proposing to come to this House with an expensive $350 million or $400 million plan. I am not exactly sure what the budget states. It strikes me that if one wanted to reduce interest rates by 2 per cent or 2.5 per cent per year, that would finance $15 billion or $16 billion worth of new mortgage money at a reduction of 2 per cent from, say, 18 per cent to 16 per cent. However, if this government were really interested in doing something, that is the kind of approach it would consider. It would say, "Look, we have to supply long-term plans at a rate which is perhaps less than the short-term treasury bill rate determined by the Bank of Canada's Thursday options."
Second, one would think that if the government wanted to do something, it would say to home owners, "Accept the suggestion of the home builders association." Why does the government not allow people to take their RRSP money, their registered retirement savings plan money, and invest it in their own accommodation?


Mr. Friesen:: Right.


Donald Alex Blenkarn: Why should people not be able to invest it in themselves? Why should they have to put it with a mortgage company which can then lend it to someone at 16 per cent or 18 per cent interest and all the rest of that nonsense? Why can they not take their own savings money and put it in their houses and, of course, pay taxes on the money when it comes out of their houses when they eventually sell them or when they die? Why can they not take that money and reduce the amount of their indebtedness as a result? Is there anything wrong with investing in real estate, investing in oneself? That suggestion was made by the home builders. There is nothing wrong with it. However, we have not heard that type of suggestion from the Minister of Finance.
What other things can we do? I say to Your Honour that the mortgage tax credit plan which was introduced in the Crosbie budget was a plan which this government should be considering. It certainly has been considered by United Mine, Mill and Smelter Workers in their brief to us from Sudbury. That union clearly came out in favour of that type of an approach to reduce interest rates. It would reduce interest rates in this market by 3 per cent to 4.5 per cent. There are a number of other things which could have been done. But this government's attitude is that housing is a great benefit. It thinks that home owners are making a profit because all of a
Housing
sudden they are part of the tax expenditure plan, that they are costing the government $4.5 billion in taxes because their equity is not taxed, and that because they do not pay rent, which is a benefit, it is somehow not proper and not fair. If you make a capital gain on your home, that is not fair either. If you want to deduct interest over and above the interest you get to develop some real estate or to write off the soft costs you pay to your planner, developer or surveyor, that is not fair. If you want to write off the capital cost allowance, that is not fair because it would make it easier to own and easier to develop rental property. Again there is a tax on, of all things, loans by employers to employees to assist them in buying homes at lower rates of interest than normal. These housing loans should be taxed by the taxman, which would make it more difficult for people to live in a home.
The program of this government and its whole attitude toward housing is repugnant to our society. It is about time the minister looked at this bill and told the Minister of Finance that it is not much of an answer, that the program should be changed in order to come up with something that will attack the housing concerns of Canadians.


Paul James Cosgrove: On a point of order, Mr. Speaker. Earlier in today's proceeding the hon. member for Mississauga South (Mr. Blenkarn) indicated he would answer a question. I had the opportunity to make reference to a comment by him recorded in Hansard. With the permission of Your Honour, I would like to proceed to that question.


The Acting Speaker (Mr. Blaker):: The Chair might indicate that is not a problem ordinarily if a member has some time left in his remarks. He would then have the right to answer a question or invite other members to ask questions. Unfortunately, the hon. member for Mississauga South has used all the time available to him. If he indicates he would be willing to answer a question and the House gives its unanimous consent, there is no difficulty. Is there unanimous consent for some sort of an exchange?


Some hon. Members:: Agreed.


Paul James Cosgrove: Thank you, Mr. Speaker, and I thank hon. members. I had the opportunity of referring to a comment by the hon. member for Mississauga South. I am sure the hon. member has the quotation. It is recorded at page 6932 of Hansard for February 5, 1981.
The gist of the comments was in the question earlier of the hon. member's colleague, the hon. member for Parry Sound-Muskoka (Mr. Darling). The question related to the opinion of . the hon. member for Mississauga South who said, and I am paraphrasing, that British Columbia can look after its own housing problems, presumably because of the state of its finances. My question is related to the hon. member's responsibilities toward his constituency in the province of Ontario. Does the hon. member believe that the province of Ontario is

February 9, 1982
Housing
providing adequate response to the problems identified with respect to housing by hon. members?


Donald Alex Blenkarn: I thank the minister for his question. It is my view, and I will not relate it as a party position because I do not propose to speak as critic on housing for our party at this time, that I essentially answered this question at the beginning of my speech.
The minister was engrossed with the Minister of National Health and Welfare (Miss Begin), who, I understand, has now developed an interest in housing.


John Horton McDermid: She is writing a new letter.


Donald Alex Blenkarn: My colleague says she is writing a new letter to the Prime Minister. I can understand that. I answered the question at the beginning of my speech. The minister did not hear me, so I will repeat it.
The real reason for the existence of Canada Mortgage and Housing Corporation since its inception was to make it possible for people to acquire money in a market by way of an insurance scheme. If CMHC would stick to that job, it would serve a purpose. However, when it decides all of a sudden to become the great "hander-outer" of money, it must be borne in mind that the real problem with respect to housing is dealt with by the provinces which have control over land, planning and things of that nature.
If the minister had followed my speech this evening, he would have noticed that at no time did 1 suggest further powers for the corporation. I suggested he look at this bill with respect to the possibility of using the insurance provision to guarantee interest rates for five years on an insured basis. I made the suggestion because that is the type of thing Canada Mortgage and Housing Corporation may well be empowered to do just as the Government of Canada is empowered to control interest rates under the terms of our Constitution. But the Government of Canada is not really involved in building houses or financing-


The Acting Speaker (Mr. Blaker):: Order. I did seek the unanimous consent of the House for the hon. member to enter into some sort of question and answer, but 1 did not think he would start another full speech. Perhaps we can get on, unless there is some need to complete that.


Robert Theodore Bockstael: Mr. Speaker, I would like to discuss the bill before us in terms of the supply of affordable rental accommodation in Canada. Hon. members are very much aware of the difficulties encountered by Canadians in many parts of the country in finding suitable, affordable housing to rent. In many of our larger cities, the vacancy rate has dropped below 1 per cent, and 1 per cent vacancy rate means that only one apartment in a hundred is available for rental.
This problem is not a new one. Its origins go back as far as the early seventies when the cost of land, labour and material were rising very rapidly. Rents, however, did not rise at the
same rate, and we found ourselves in a situation in which it was just not profitable to invest in rental construction.
In the mid-seventies, governments, both federal and provincial, intervened. The federal government offered tax incentives and subsidies through the assisted rental program. The provinces brought in rental controls. These measures, together, while providing help and protection for many tenants, prevented the increase in rents which might otherwise have occurred and which would have made rental construction a profitable enterprise.
Since that time, of course, continuously rising costs, coupled with high and volatile mortgage interest rates, have caused a further decline in rental activity. Unfortunately, the scarcity of rental accommodation affects low-income people most severely. Low-income tenants whose rents rise sharply are unable to find alternative accommodation. That is because no reasonably priced housing is being built. Rental investors are discouraged from construction activity because of high interest rates and rental problems associated with competing in a split rental market where older units are rent controlled and newer ones are not.
In these circumstances the people who are least able to compete in the market, such as single parent families, families with children, the elderly and infirm, are hardest hit of all.
The government has approached this problem from two directions. It has taken steps to increase the supply of rental accommodation and it has provided help for those who are most seriously affected by the shortages.
1 know that hon. members are aware of the measures announced in connection with the budget which are designed to improve the situation. The Canada rental supply plan will make interest-free loans available to assist in the construction of 15,000 units across Canada in tight market areas.


John Horton McDermid: In the next two years.


Robert Theodore Bockstael: The Minister responsible for the Canada Mortgage and Housing Corporation has travelled across the country to discuss the plan with the provincial housing ministers and hear their views as to how the available units should be allocated. The minister told us that some of the provinces were not satisfied with their share of the pie, and his answer to them was very straightforward. He asked them what resources they were themselves willing to set aside to solve the problem. Some of the provinces are willing to supplement the assistance provided under the federal plan through provincial programs. As explained by the minister, the units provided under the Canada rental supply program will give an additional impetus to the rental housing projects undertaken late in 1981 by allowing them to become eligible to use the tax measures concerning the write-off allowed for MURBs. The changes brought about by this bill allow the Canada Mortgage and Housing Corporation, CMHC, to be of greater assistance
February 9. 1982

to the contractors who are willing to take the risks involved in building rental housing in spite of the market conditions. [English]
Because of the rigidity imposed on CMHC by the National Housing Act, as it now stands, the corporation has been unable to be as helpful in financing rental construction as it would otherwise have been. Until now the act has restricted CMHC to charging premiums of 1 Vi per cent or 1 Vs per cent, depending on whether the insured loan is advanced in instalments or on completion of the building.
This rigidity, together with high mortgage rates and rising construction costs, has had the effect of further discouraging builders who contemplated constructing rental accommodation. I am told that at one point when mortgage interest rates reached 21 per cent, CMHC could not insure more than 50 per cent of the loan value of projects being undertaken.
Under current mortgage insurance underwriting practices, an increase of 1 per cent in mortgage interest had the effect of reducing the loan level by approximately 10 per cent. This relationship exists because the single largest item among the operating costs of a rental project is debt servicing. In some cases, for a variety of reasons, some developers are prepared to operate their projects at a loss. However, the risks involved in this type of operation are just too great to be insured with a premium fixed at 1V* per cent.
This is one of the restrictive limitations which this bill would remove. The legislation now before us would delete from Section 5 of the National Housing Act any reference to specific premiums. In future they would be set by CMHC, subject to government approval, at a level which would be commensurate with the actual risks and costs involved. This change would be perfectly consistent with the intention of Parliament when the act was first introduced-namely, that the mortgage insurance fund was to be managed on full cost recovery principles.
This change will give the corporation the flexibility it needs in supporting rental accommodation and all other residential construction to alter its premiums according to changing markets and economic circumstances. More important, this bill will make it possible for CMHC to give more incentives to people who are willing to build such housing. This is in the interest of all those Canadians who are lacking affordable rental housing. CMHC will be able to increase its own levels without jeopardizing the mortgage insurance fund and permit entrepreneurs to get their projects started without having to put up an unjustifiable proportion of capital from their own pockets.
Such a change would not only be in the best interests of CMHC and the building industry but of all those Canadians who, by choice or necessity, rent their homes.
The current rental situation is only one element of the proposed legislation. Now I would like to touch upon the other themes. Before I do, I wish to emphasize just how important the Canadian rental supply plan will be to Canadians all across the country who live in areas where rental housing is in
Housing
short supply or where population growth is expected to take place.


Donald Alex Blenkarn: Where is there a surplus?


Robert Theodore Bockstael: The plan will help put into place up to
15,000	affordable rental units in target areas of need.


Donald Alex Blenkarn: That is just about enough for Scarborough.


Robert Theodore Bockstael: I am thinking of markets in western Canada where the conditions of very low vacancy rates have created housing difficulties. Well known examples of such markets in the west are Calgary, Regina, Vancouver and Victoria.


Donald Alex Blenkarn: How about Mississauga?


Robert Theodore Bockstael: I should also add, Mr. Speaker, that these much needed 15,000 units are over and above the 25,000 social housing units which the government is committed to provide in 1982.


Donald Alex Blenkarn: That gives us 40,000.


Robert Theodore Bockstael: These will be provided under CMHC's non-profit and co-operative housing programs. Together, these two federal housing initiatives will produce 40,000 affordable homes for Canadians from coast to coast.
Some amendments may merely seem a dry recitation of technical modifications to an act which has been a major benefit to Canadians since its inception many years ago. But they are much more than that. On the face of it, permitting CMHC to increase its loan levels for the housing industry does not seem to have much impact on the housing consumer. There might not seem to be much connection superficially, but these so-called technical changes will enable those same builders to come into the rental market with units that will be put at the disposal of young and older families and individuals who might otherwise experience serious difficulty in obtaining the housing they need.
The Canada rental supply plan is only one part of the amendments under Bill C-89. The Canada mortgage renewal plan provides important assistance for people who would otherwise incur undue hardship when renewing their mortgages. The government will provide up to $3,000 a year, either in interest deferral or as an outright grant, to home owners who would have to pay more than 30 per cent of their gross income on payments of principal, interest and taxes and 50 per cent of condominium charges.
This is an honest and equitable way to deal with the problem. It targets the help to people who need it and restricts grants in this time of restraints to people who, through no fault of their own, have no equity in their homes.
Other important facets of the bill are the amendments which will enable CMHC to ensure alternative mortgage instruments. Once again this is directed in a very real way to the people of Canada. Potential first time owners have had

February 9, 1982
Housing
problems recently getting into the home owner market because of high interest rates and short-term mortgages. Thanks to the amendments, these Canadians will be able to choose from a broader range of mortgage instruments designed to overcome these difficulties and improve access to home ownership.
I have already spoken at some length on improvements to CMHC's business operations and their importance to the Canada rental supply plan, but I would like to emphasize again that these amendments will have real meaning to individual Canadians. That is why we are here. We are here to put in place policies and legislation that respond to people's needs.
I am satisfied that this bill addresses major issues in housing today, but even this bill is only part of the government's housing thrust. Discussion is well under way on a comprehensive new rural and native housing program, which again will have a major beneficial impact on western Canada. As a longer-term priority, taking into account the need for fiscal restraint, research is continuing into the concept of shelter allowances. The minister responsible for Canada Mortgage and Housing Corporation has already mentioned these in his own address on this bill. I look forward to further action on these important housing fronts.
1 will wind up my remarks by saying I believe Bill C-89 will enable the government to respond in an equitable and sensitive way to the current issues of mortgage renewals, rental housing, availability and access to home ownership, and I am pleased to support this bill.


David Orlikow: Mr. Speaker, 1 want to begin by saying that as I listenedd to my friend, the hon. member for St. Boniface (Mr. Bockstael), who has just finished his speech, 1 wondered, coming as I do from the same city, how it was possible for him to make the speech he did, because all the people I talk to and all the things I read indicate that the situation is exactly the opposite to what the hon. member for St. Boniface indicated. 1 know housing prices in Winnipeg are probably less that 50 per cent of prices in cities such as Vancouver or Toronto.
The provincial department of industry and trade puts out a weekly report on various aspects of business life, and one of the items contained in that report every week is a list of the homes in metropolitan Winnipeg which were purchased in a given week two or three weeks prior to the release of the report. I have subscribed to that service for several years, and probably my friend, the hon. member for St. Boniface, also subscribes to that service. For years the list would run six, eight or ten typewritten pages. In the last two or three issues I have received-and I would be happy to show them to my friend, the hon. member for St. Boniface, if he has not seen them- the list has been down to one page. People in Winnipeg are not purchasing homes. They cannot afford to do so. They cannot afford the down payments, and they cannot afford the monthly mortgage payments. When the hon. member for St. Boniface says this bill will help first time home buyers, he is not talking about Winnipeg, and I suggest to him he is not talking about Canada.
The hon. member for St. Boniface also said that the provisions of this bill would take the pressure off people who are finding it difficult to meet their monthly mortgage payments when they come to renewing their mortgages. At some time last summer when the mortgage interest rate escalated from something in the neighbourhood of 12 per cent or 13 per cent to 17 per cent, 18 per cent and, for a period, to over 20 per cent, and when some Members of Parliament from both opposition parties started to ask the minister in charge of housing and the Minister of Finance (Mr. MacEachen) about how people would deal with this problem, we received replies from both ministers that it was not a very serious problem, that most people who had to renew their mortgages were not having any real problems, that their incomes had gone up, that they could manage, and all that sort of nonsense. I wanted to find out what was happening in my own area, so I surveyed two housing developments in which the houses are probably ten years old or less. I sent questionnaires to residents in those two areas. There were 7,000 homes involved. I assumed, 1 think quite properly, that most people involved in buying houses are carrying five-year-term mortgages. The questionnaire was directed specifically to people who had to renew their mortgages in 1981-82. I calculated that there was a possibility of getting 1,700 replies. 1 could not believe what happened. I was receiving 50 replies every day, and eventually I received over 500 replies of a possible total, as 1 have indicated, of 1,700.
I want to put on the record some of the replies, and I hope the hon. member for St. Boniface and the minister are listening. One of the questions was:
By how much did your monthly payments increase since you last negotiated your mortgage?
One man who replied indicated that his mortgage payments will go up by $300. In the space for comments he wrote:
My wife has had to go to work to make it possible for us to survive. 1 resent having to pay $300 to the bank for absolutely nothing.
Another man said his mortgage payments will go up $333 a month. He said:
Although we won't suffer "hardships" as long as we continue bringing in two full salaries, we cannot afford to start a family-
Another resident's mortgage payments will go up by $300 a month. That resident's comment was:
We are a two-income childless couple. Having old fashioned ideas about a mother staying home to raise her children the increase in our mortgage will certainly decide for us whether to have children or not.
Here is another one:
We purchased a house in April, 1981, and we received a 1416 per cent mortgage for five years, we were very fortunate, now we'll both have to work because we'll need both salaries to pay for the house. After five years we'll decide on whether or not we can survive on one salary-
I will read just one more. This party says that her payments have gone up by $235 a month plus $80. What does the $80 represent? She writes:
The $80 represents A HOP portion which we were promised (documented) a rate of 1 \3A per cent interest but which the federal government is now charging in excess of 21 per cent interest. For an initial loan of $3,690 under the new terms (which are unfair, underhanded and unjust) we must repay over $15,000.
February 9, 1982

I could spend all my time on this because almost every one of these 500 replies contained that kind of comment. Then the minister and the hon. member for St. Boniface tell us this program will help these people.
Now, the minister talked about this great program that the federal government has put into effect that is going to help these people who are caught in this trap. He said to my colleague, the hon. member for Winnipeg-St. James (Mr. Keeper) that it was like the Manitoba government program. The minister shakes his head. Yes, that is what he said-and nothing could be further from the truth. Let us just look at it, Mr. Speaker.


Paul James Cosgrove: What are the facts?


David Orlikow: What does the federal program provide? 1 will put the facts on the record and if I am wrong, the minister or one of his stooges will have an opportunity to correct the record.
What is the federal government's program? It is a program of interest rate deferral. If the interest rate is high, as it has been, they pay two per cent less on their monthly payments than the current interest rate. That is just a deferral. What they have not paid is added to the principal. The result is that the house owner will owe more on his mortgage next year than he did at the beginning of this year. I wish the minister would keep cool. The minister has suggested that people can get up to $3,000 in a grant. Our calculations are that the only people who will get that grant are people who bought homes under the AHOP program-which never should have been developed. They are the only ones who qualify for the grant. They are the only ones who would have less than the 5 per cent equity in their house contract and they are the only ones who would qualify for this grant.
Let us compare that with the program that the Manitoba government put into effect. Their program is not one of interest deferral. Their program is one of direct subsidy, not to the bank, not to the mortgage company, but to the person owning the house and paying for it in his mortgage, and the subsidy can be up to $275 a month on mortgages of not more than $40,000. That is paid if the principal, interest and taxes exceed 30 per cent of the household income.
Let me emphasize again that unlike the federal program, which is an interest rate deferral, which has to be repaid, this is a grant. Home owners who have renewed their mortgages between July 1, 1981, which is about the time when mortgage rates really skyrocketed, and December 31, 1981, will be eligible for up to 24 months of assistance, retroactive to January 1, 1982. Other home owners will be eligible from the time of their next mortgage renewal, and the assistance will be for up to 24 months.
I close this part of my speech, Mr. Speaker, by saying to the minister again that under the Manitoba program the home owners who receive assistance do not have to pay back the amount of assistance that they have received. That is entirely
Housing
different from the program developed by the federal government. The minister may shake his head, but facts are facts. I can tell the minister that I spoke yesterday to two or three people who are leaders in that mortgage action committee, the organization of people who have really been hit by the skyrocketing increase in the mortgage rates, and they are very happy with the Manitoba program. They recognize that the rate of mortgage interest is really the responsibility of the federal government. They regret that the government of Manitoba is going to have to put millions of dollars this year and next year into this program, but they accept the fact that the government of Manitoba is moving in to meet a very important need in a field which is really the responsibility of the federal government.
We have been told that one of the main purposes of this bill is to alter the terms and conditions under which mortgage insurance is offered to the Canada Mortgage and Housing Corporation. We have been told that this is one more way of getting more funds into the mortgage market. Every time a change is made to the National Housing Act, which relates to mortgages, the argument has been made that the change is necessary to make mortgage money available through the lending institutions. What do we see and what is the record in connection with this argument?
What we have seen is the 6 per cent ceiling on national housing mortgages removed in 1967. The requirement that mortgages be set at no more than 2% points above long-term government bonds was removed in 1969. Mortgages were supposed to go down to less than 9 per cent as a result. There has not been a mortgage rate below 9 per cent since then. The roll-over term in mortgages was introduced in 1973 to enhance the attractiveness of mortgages as an advance. Before that we had 25-year mortgages. We are told that we would have five-year mortgages that would really induce the lending institutions to put more money into the market. Now we are being told that we cannot have five-year mortgages, that we should have one-year mortgages. In fact, we are told that we should have mortgages that change every time the bank interest rate changes.
New mortgage rates are being introduced in this bill, the variable rate mortgage in which your rate changes every time mortgage rates go up. Under today's conditions this means that the mortgage rate could roll over every week when the bank rate changes. This will eliminate risk to the lender who presumably puts the money into the market. It also allows for more interest deferral. The changes in mortgage insurance will encourage the use of these vehicles.
There was a time when a mortgage was a debt which people incurred with full knowledge of what they were getting themselves into and what the total payment would be.
The people who replied to my questionnaire said they thought in 1975 and 1976, when the interest rate was between 11 per cent and 12 per cent, that they had a pretty fair idea of what they would be paying for all the years that they were paying for the house. Five years later they were getting the kind of increases to which I referred.

February 9, 1982
Housing
In today's market, in the way the government proposes to set it up, there is no way of determining how much the person would have to pay or how long it will take him to pay off the debt on the house. The provision for mortgage insurance on all these risk instruments which the government is proposing moves Canada ever closer to the permanent debtor society.
As my colleague says, they are AEIOPing all houses-as if we have not had enough bitter experience of that disaster.
In allowing the insurance to determine the premium totally based on the risk factor, the people who can least afford the extra cost, that is, the home purchaser, will be asked to shoulder it, and the lender, who has better insurance cover for any risk he takes, will be encouraged to exercise even less discretion in providing it. Since second mortgages can also be insured, insurance will probably become a requirement for these loans, adding more costs and encouraging more people to get into debt way over their heads, which is exactly what happened when we adopted the AHOP program.
Who is going to benefit from this? Not the home owner. The people who are going to benefit from this are the banks. Let us just look at what is happening to the banks. In one year, between 1980 and 1981, bank profits went up by 37.7 per cent. The Bank of Montreal profit in 1980 was $263 million; in 1981 it was $358 million. The Toronto-Dominion bank profits went up from $182 million in 1980 to $255 million in 1981. The profits of the Canadian Imperial Bank of Commerce rose from $192 million to $310 million in 1981, and the profits of the Royal Bank rose from $327 million in 1980 to $492 million in 1981. This was a total increase of $500 million in one year. This is the kind of money we require in order to build the housing units we need.
It was bad enough that the banks experienced tremendous increases in profits. It was even more insulting that the Liberal government allowed banks to get away with tax rates as low as 9 per cent in 1981, which was lower than the tax rate of people earning under $10,000. The average tax rate for the five largest banks in 1980 was 15.3 per cent, a paltry amount compared with the 50 per cent rate of a decade ago. If banks had paid taxes at normal corporate rates of 46 per cent, they would have paid $650 million to the federal treasury rather than paying approximately $225 million. The government wonders where to get money from; this is one area.
We in the New Democratic Party have a couple of proposals for the government and the minister. First, we propose a windfall profits tax to regain lost tax dollars banks should have paid. Second, it is time the government did what many governments in the western world have done, that is direct banks to set aside a portion of their loan portfolios for reasonably priced mortgages. Instead of such a program, we see a disastrous housing program which will exacerbate the deplorable situation in which many Canadians live.
It has been estimated that the housing needs of the country would be met if we constructed approximately 220,000 housing units this year.


Paul James Cosgrove: With the help of the NDP government of Manitoba?


David Orlikow: The NDP government of Manitoba will look after itself. It will have to account to the people of Manitoba four years from now on its record. I have more confidence in the ability of that provincial government to be re-elected than I have in the ability of the present Liberal government, especially if it does not change its policies.
Rather than meeting that need, the projection for housing starts this year is somewhere between 145,000 to 165,000. A report in yesterday's paper indicated that housing starts for January, 1982, were at an all-time low. In 1979 there were
197,000	housing starts; in 1980 they dropped to 158,000, the lowest figure since 1966; in 1981 there were 178,000 housing starts. This figure will decline very substantially in 1982.
Hopefully we will receive these 160,000 housing starts, which is the top estimate, but what would be the effect if we built 220,000 units? If an additional 60,000 units were erected this year, it could involve an additional 120,000 jobs for construction workers, electricians, plumbers and construction material manufacturers. It would put some of the thousands of laid-off forest workers back to work. It would create a market for appliances so that the lay-offs, about which I asked the Minister of Finance earlier today, would be obviated, such as 800 people in an appliance plant in Montreal who were laid off last Friday. It would give some hope to the people who manufacture appliances, television sets, radios and plumbing supplies. These would be some of the results of an active housing program. These additional homes could be targeted as social housing. It would involve an additional $500 million expenditure to the Canada Mortgage and Housing budget. As I have already indicated, the funding for this could come from the windfall profits of the banks in 1981.
1 take this opportunity to say to the minister that I am bitterly disappointed with the failure of the government to begin programs which would lead to the construction of new housing units and with its failure to bring forward programs to help stop the rot of the core areas of most Canadian cities. Such a program would permit people to remodel, refurbish and rehabilitate tens of thousands of homes, the quality of which has been reduced in the last 25 years. I am referring to houses in the core areas of Montreal, Toronto, Winnipeg, Edmonton, Calgary and Vancouver from where we have seen an exodus of people. These are areas in which the schools, streets, sewer, water and power systems have been built and paid for. People are moving out of these areas to the suburbs. Schools in these core areas have been closing, while new schools costing tens of millions of dollars have been built and are being built in the suburbs. Why are people moving from these areas? It is partly because of the age of the homes and because the conveniences they expect to find in homes in the 1980s are different from what they were in the 1920s and the 1930s. We should have had for a long period of time, for at least ten to 20 years, very aggressive housing rehabilitation programs.


Paul James Cosgrove: Like the one we have in Winnipeg?
February 9, 1982


David Orlikow: Like the one they are beginning again in Winnipeg. There was no need for these people to move to the suburbs. Years ago they paid from $20,000 to $50,000, and in recent years $100,000 or more, when homes which had been built years earlier could have been rehabilitated and brought up to present-day standards for a fraction of the cost. But the Liberal government was not prepared to say to the provinces and the municipalities that it was willing to co-operate and share in the funding of such programs.
This brings me to a program of which I am very proud. The new NDP government of Manitoba announced that it was reinstituting and starting at a much greater pace a program which was in place from 1969 to 1977, its critical home repair program. Under the program, pensioners will receive grants of up to $1,500, and low and moderate-income Manitobans who occupy their own homes will receive up to $3,000 in combined loans and grants. The premier announced that the program was established as a successor to the highly successful pensioners' home repair program. During those eight years some
19,000	homes were repaired at a cost of $17 million, of which some 14,000 homes were repaired as a result of applications made or approved during the 1975 to 1977 period.
Under the new program, here are some of the guidelines. The income qualification ceiling for pensioners has been increased from $10,000 to $14,000. A maximum $1,500 grant, not a loan, is available to those with an income of $7,000 or less. A sliding scale provides $1,100 for those with incomes of $9,000 to a minimum of $100 for those with incomes of $14,000. The government of Manitoba has increased the income qualification ceilings for families from $10,000 to $16,000. The income eligibility is adjusted to take into account dependants. Where adjusted income is $10,000 or less, a family is eligible for a $700 repayable loan at a fixed subsidized rate and the optional low interest repayable loan of $900 has a potential total of $3,000. The Manitoba government has increased the maximum potential grant for pensioners from $1,000 to $1,500. The government has increased the maximum potential grant or loan for low-income families from $2,000 to $3,000. The Manitoba government has reduced the effective interest rate for loan repayment to a fixed subsidized rate of 9.5 per cent over eight years from 14.5 per cent.
This is what the government of Manitoba did. This is a have-not province, whether it has a Progressive Conservative government or a New Democratic Party government. The government will not solve the housing problems of the city of Winnipeg, but the government is at least making a start and it is helping people who need assistance to rehabilitate the kinds of homes found in the core area of Winnipeg which need so much improvement.
I wish that the federal government, which has so much more ability to plan and fund these kinds of programs, would start something of that nature.


An hon. Member:: It would have to clean house first.
Housing


David Orlikow: Let me deal with just one more point. I wish that the government would reconsider the disastrous decision it made a year and a half ago to suspend and end the community services contribution program. That program replaced three earlier programs, the neighbourhood improvement program, the program to help municipalities fund sewer and water extensions, and another program.
When the minister announced the ending of other programs and announced the establishment of the community services contribution program, he said that it was designed to provide sewer and water systems, non-profit housing and improvements to neighbourhood facilities.
In a very short period of time, because of this insane insistence of the government that expenditures have to be reduced, that program which the minister announced with such great fanfare was ended. The program was created in 1978 to fill the gap left by three other improvement programs which were snuffed out by the government. It started out with a lower budget than the budget for the three programs it replaced. But the government committed itself when the same minister whom we have now committed the government to funding the new program for five years. Two years later into the program the minister said that the projects that had already been started would be funded to completion, but no more money would be provided to replace the community services contribution program.
What that meant for the city of Winnipeg was a very serious block in its plans to rehabilitate the older part of the city. Federal funds totalling over $12 million were made available to the city of Winnipeg for a project carried out between January 1, 1979, and December 31, 1981. Unfortunately, there will be no more funding of any projects after this year. With the federal government deciding not to replace the program, what we will have in Winnipeg and in other cities is a significant increase in the rate of unemployment and an almost complete stoppage in the plans to rehabilitate those areas which are seriously run down in Winnipeg, about which I know the most.
What we have had from this government and from this minister since the government took over has been retreat after retreat and stoppage after stoppage. As I have indicated by quoting from some of the replies I received to the questionnaire I sent out, this has put tremendous pressure on people who purchased homes in good faith five or six years ago. An almost complete stop has been put to plans of cities to rehabilitate their core areas. A virtual halt has been put on purchases of new homes. I do not have time to go into this, but we are seeing virtually the end of the building of rental accommodation, whether in the private or in the public sector.
When the minister prides himself that he is providing funds for the building of 15,000 rental housing units, he is not even talking about meeting the needs of one city, let alone meeting the needs of the whole country.
All of this disaster that I have recounted in the field of housing is only part of the picture. We see this kind of halt put to essential improvements in almost every phase of life of

February 9, 1982
Housing
Canadians. We see it because the government, although it has not quite adopted the whole range of Reaganomics, has adopted the essential part of Reaganomics, and that is the idea that no matter what cost to people and to necessary institutions, somehow the deficit in government expenditures must be halted.


Paul James Cosgrove: We have not adopted their deficit.


David Orlikow: The Minister of Finance has said that this situation is temporary, that the economy is going to get moving in the United States some time this summer and automatically the Canadian economy, which is so closely geared to the American economy, has to pick up. One only needs to read a newspaper such as The New York Times to see how false that hope is. The President of the United States, that great conservative, who spent 20 years telling the American people that government deficits were a disaster, and if only he were elected he would do away with government deficits, is telling the American people that next year the deficit will be $96 billion. That is if the American Congress accepts the very sharp cuts in social welfare which the president proposes. If the Congress does not, and in an election year it is not likely to then they will be talking about a deficit of over $100 billion. The American government will have to go to the market to borrow the money. When the Americans do that, they will be competing with the needs of the private sector. The inevitable result of that will be an increase in interest rates in the United States and in Canada, since the Governor of the Bank of Canada and the Minister of Finance have adopted a policy that Canadian interest rates shall be locked in with those of the United States. Therefore, we will be facing increased interest rates in this country. That, Mr. Speaker, will be a disaster for home owners, renters, in fact all the people of Canada. That is the inevitable result of this government's housing policies.


Mr. Robert Daudlin (Essex-Kent):: Mr. Speaker, I am pleased to speak in the debate this evening and to be able to follow the hon. member for Winnipeg North (Mr. Orlikow), or perhaps "the hon. member for a disaster about to take place" would be the more appropriate designation. I found it interesting in the extreme that he can see nothing but disaster, and that caused me to reflect just a moment, Mr. Speaker, that we as Canadians, all in the same boat as he professes to be in tonight, would have such a pessimistic outlook on the future of Canada, indeed of ourselves as individuals, as to make us all seek some kind of professional help to try to get up and out of these doldrums.


David Orlikow: I would love to be proven wrong.


Robert Mose Patrick Daudlin: 1 just cannot perceive that anyone with so little optimism for the future could hope to be in fact representing those who sent him here. I hope those who are more optimistic about the future of Canada than he professes to be will write him and tell him that they do have a little optimism notwithstanding what he says here.
I would also like to point out, Mr. Speaker, that he was quick to try to characterize the concepts and precepts promoted by this government by calling them Reaganomics. Yet, for some strange reason, he seems to be able to make the jump- by not having the kind of deficit forecasting that exists over there, the $96 billion at best and over $100 billion at worst- and criticize this government for allegedly following Reaganomics, and miss the fact we are not proceeding in that direction of deficits which he finds so abhorrent.


An hon. Member:: You are worse.


Robert Mose Patrick Daudlin: I do not know how one can be on both sides of that chasm except that perhaps it is not a chasm, perhaps it is a fence and he is in the unfortunate position of being on both sides at the same time, which has the unfortunate consequence of being incredibly painful. Perhaps that is why he is so pessimistic tonight.


David Orlikow: A beautiful night.


Robert Mose Patrick Daudlin: I wish to support Bill C-89, Mr. Speaker, a bill to amend the National Housing Act and the CMHC Act. I think one of the overlooked undercurrents in this debate has been the constant and responsible manner in which CMHC has performed its duties. I wonder how many other organizations have had the same record of excellence over the past 35 years. Perhaps it would do us some good to review the events for a moment.
Mortgage insurance was introduced in Canada by CMHC in 1954, and in fact the Government of Canada has been helping Canadians since the 1930s to fill their housing needs by making sure there is an adequate supply of mortgage money. CMHC emerged in the waning years of World War II. In its earliest years, when it was known as Central Mortgage and Housing, it administered joint public and private mortgage loans, although mortgage insurance did not come into effect until the mid-1950s.
The mortgage insurance fund was financed with premiums paid by borrowers, and it pooled the risks involved in mortgage investment. In addition, CMHC made direct mortgage loans in many parts of Canada where private loans were not available. When the MIF was established it was intended to be totally self-financing. Premiums were set at a level which would be enough to offset any claims which could be reasonably met. Of course, the fickle finger of fate, if I may describe it as such, caught up with this scenario. An unprecedented rise in claims created a liquidity problem for the fund since its accumulation of marketable securities was depleted and most of its assets were in real property, which CMHC had accepted in settlement of claims.
More important, there was a problem of solvency. Currently, the premiums which CMHC can charge for mortgage insurance are set out in the National Housing Act and cannot be adjusted except by an act of Parliament. This is one of the reasons why these changes to the National Housing Act must be made, so that CMHC can operate in a more businesslike approach. It is essential to the well-being of CMHC.
February 9. 1982

It has already been stated that the bill before this Parliament would allow CMHC to adjust mortgage insurance premiums, set them at a level appropriate for the risk involved, and sufficient to cover the cost and expenses of doing business. This arrangement would allow CMHC to insure new, innovative mortgage instruments which it could not cover under the fixed premium system. The CMHC application fee has never been really adequate to cover the shortfall out of operating revenues. They have been covered primarily out of surpluses which have accrued from its own direct loans to builders and home owners. I must say, in supporting this bill, that I find the CMHC approach to doing business to be totally responsible. This is evident in the amendments before the House.
The bill would in large measure correct this shortfall by permitting CMHC to charge application fees appropriate to the costs. In short, the fund would be self-sustaining. Furthermore, any surpluses accruing after costs and expenditures . would be retained by the fund. This is only good business practice and would enable CMHC to undertake the normal business practice of setting aside surpluses in the good years to provide for any future deficiencies.
Keep in mind that the current legislation under which CMHC conducts its insurance business was framed and evolved in an extended period of relatively stable growth and low inflation. Times have changed, Mr. Speaker, and these changes to the act are responses to current realities. It is clear that the changes will make CMHC more responsive, more in tune with what is happening in the business and housing world.
There is a tremendous amount of resourcefulness in industry in this country. I firmly believe these changes will allow CMHC, in the housing sector, to play an important role in responding to the challenges of the eighties. There is no shortage of great ideas in the private sector. As a result of these changes, it will allow government to perform an essential supportive role, heretofore prohibited under the restraints of the old NHA. The changes are all intertwined: The terms and conditions under which CMHC may insure mortgages, the way it may charge for that insurance and the methods by which it may settle claims on these mortgages.
It is disappointing that some hon. members opposite cannot fully grasp the significance of these amendments which will allow CMHC to be more responsive and responsible. If it paid any heed at all to the comments from the other side, the government would have to spend probably billions of dollars on housing. And where will the money come from? The taxpayer, by whatever means. The members opposite must have some unshared wisdom about some untapped source of cash. When will they learn that the role of government, as has been amply demonstrated by this government, is to be both responsive and accountable to the people, the taxpayers of Canada?
Take, for example, the statements made in the House yesterday about the rental housing situation. A prime example of this, Mr. Speaker, is the Progressive Conservative housing critic's comments about the current rental housing situation. The hon. member seemed to be implying that the government was not meeting its responsibilities with respect to rental
Housing
housing. Unfortunately, he was quoting out of context a document which was made public some months ago. Repeated attempts were made by the government to explain that the analysis of the rental housing situation in the document was based on a "worst case scenario".
I should like to suggest, Mr. Speaker, that it was in order to discharge this very responsibility that the scenario was drawn up. It permitted the government to review all options carefully and to propose the Canada rental supply plan, which is designed to put some 15,000 affordable rental units into place in the coming months. It is an equitable and responsible program, and indications from the development industry have confirmed a general support for the thrust of the program.
It is interesting, Mr. Speaker, that the hon. member complains that the rental supply plan is inadequate to meet all rental housing needs. In making that comment, we should all remember that the hon. member speaks for the same political party which would have privatized CMHC and diminished dramatically the federal government's role in providing affordable housing for all Canadians. 1 think emphasis should be drawn to that last statement. It should not be overlooked by this government.
There was also criticism that there had been no meaningful discussion with provincial housing ministers. During my time in the House since 1974, how many times have I heard that over and over again? One begins to wonder how one defines "meaningful discussion", and what it means to hon. members who, in fact, claim it has not taken place. Does it somehow mean that in order to have a meaningful discussion one must adopt the position of the opposite party? Is that meaningful discussion?


John Horton McDermid: That's what you guys do all the time.


Robert Mose Patrick Daudlin: In any event, whatever the definition, the claim and criticism is that there has been no meaningful discussion with provincial housing ministers. Once again, it seems to me that this demonstrates that the members of the opposition have not been listening. If they had been listening, they would have heard the hon. Minister of Public Works (Mr. Cosgrove) say that he had travelled across the country to discuss the principal components of the proposed amendment to the National Housing Act. As a matter of fact, it might be worth while to quote the minister who indicated that he had discussed the legislation and that he was generally pleased with the response he received. The minister said:
In my conversations with them I have emphasized that housing, in Canada, is a shared responsibility and that the provinces, as well as the national government, have a role to play in providing access to housing and particularly in responding to local needs and local priorities.
1 am happy to say that, in some cases, the provincial governments are responding to the federal initiative and are developing programs which would be compatible with the Canada rental supply plan.
The federal government's initiative, combined with ongoing social housing programs, has been welcomed, as a contribution to the alleviation of a serious problem. I have given them the assurance that the available resources may be reallocated during the year if it is found that one region is not taking up all of

February 9, 1982
Housing
the assistance that was designated for its use and there is an urgent need elsewhere.
I ask Your Honour, reflecting on what the minister has said, can a reasonable man conclude in any way, shape or form that there has not been discussion, that there has not been reflection on the issue and that there has not been a meaningful discussion with the provincial ministers? Even so, the claim is made.
I believe that Bill C-89 is a positive response to a number of problems confronting Canadians today. I have not gone into detail about the Canada mortgage renewal plan because it has already been covered in some detail by previous hon. members. However, once again, the renewal plan is an example of a program which is tailored to real need and to the need for restraint. No one in this House wants to stifle debate or worthwhile suggestions which could help to improve the supply of affordable housing. Indeed, it has frequently been suggested that we would not only be pleased to accept any good idea but that we would also adopt it and, if pressed a little, give credit to the author. However, that does not seem to be the purpose of what is going on in the House today. It seems, rather, to be simply criticism for criticism's sake, and that is unfortunate.
Improving access, supply and home ownership security is what this bill is all about; but unrealistically expensive and unworkable proposals which go against current thinking and the current economic and fiscal situation can only serve to delay implementation of sensible and targeted programs which would be of real benefit to Canadians across the country.
I commend the provisions of Bill C-89 to hon. members opposite. For the sake of both home owners and renters from coast to coast, I hope that there will be no undue delay in obtaining passage of the amendments.


Some hon. Members:: Hear, hear!


John Horton McDermid: Mr. Speaker, with the permission of the House, before I begin my remarks I would like to announce the passing of one Daisy Graydon, who was the widow of the former leader of the Progressive Conservative Party and a former member of Parliament, Gordon Graydon, the former hon. member for Peel, which constituency he represented from 1935 to 1953. I know that two of my colleagues, the hon. member for Brandon-Sou-ris (Mr. Dinsdale) and the hon. member for Northumberland (Mr. Hees) sat with Mr. Graydon in this House. I know we all pass on our sympathies to the family and friends of Daisy Graydon.
I welcome this opportunity to speak on the subject of housing and the issues facing the Canadian housing market today and to discuss Bill C-89. It is a sad commentary on what we are going through today, but I have in my hand a bumper sticker which I came across just recently. It states, "I live in this car. Trudeau took my house". It is a shame that that type of thing has to be seen in this country.


Douglas Grinslade Lewis: Laugh!


John Horton McDermid: Hon. members opposite think it is funny. Canadians often debate whether housing is a right or a privilege. Over the last year, we have seen the dreams of many home owners shattered and the aspirations of would-be home owners destroyed because of the failure of our economy and destroyed because of inflation and the high cost of money.
The present interest rate policy and the approach of this government in taxing the low and middle-income Canadians to the point where they have barely enough left to exist, and its approach to inflation, all contribute to a situation in housing which has reached crisis proportions, whether the government will admit it or not.
Most Canadians dream of owning their own home. That dream is being turned into a nightmare for some and a distinct impossibility for others. Everyone needs a place to live. Whether what we call home is a rental unit, an apartment, a single family dwelling or whatever, depends on our needs and means, but having a place to call home gives us security and roots. Whether we own or rent, the issue facing each of us is affordability. Some of the stories which have been told in the House over the last couple of days of debate are very true. A family in my riding has now doubled up. They have lost their home and have moved in with their parents. They are facing a very bleak time right now. I know of a couple earning $18,000 a year. The man drives a car and is now being taxed $3,800 for the privilege of driving that car. That raises his income and puts him in a different income bracket. He has just refinanced his home, but he cannot afford the payments any longer because of the new tax bracket which this government, with its inept budget, has put him into.
The shelter costs for a great many of us represent the largest, most important expenditure we make. Given the importance of housing to each of us, and given the fact that housing represents a basic right of all Canadians, how can this right be ensured by government? I believe and can honestly say that this government has done nothing to ensure affordable housing. It has done nothing to spur housing starts but has done just the opposite. It has eliminated any incentive builders may have had. However, being an optimist, I can say that it is not too late for a reassessment of our interest rate policy. I urge those Liberals with the courage to stand up for what was formerly the great Canadian dream to do so.
The current policies of this government are damaging every job-creating sector in this country. The Canadian residential construction industry was a healthy, viable concern until the last couple of years. Roughly 5 per cent of our labour force is dependent on this industry for jobs. The industry has no incentive to construct moderately priced ownership and rental housing. It is not constructing this kind of housing because it is being destroyed by high interest rates and by economic conditions as a whole. Two years ago, there were some 7,500 builders in Canada. Today, only 3,500 still survive, and that number is going down every day. If we look briefly at our population growth, the impact of our record low housing starts becomes very evident. Our population has grown tenfold in the last 130 years. Our over-all population growth has never been

February 9, 1982
lower than 1 per cent. In my riding alone, the growth rate has been roughly 10 per cent per year over the past five years.
I would like to speak briefly with regard to a particular segment of the housing problem in my riding of Brampton-Georgetown. However, to really do the subject justice, I would like to refer to the Peel region as a whole.
The Peel regional government makes up the communities of Caledon, Brampton and also of Mississauga. It is under the chairmanship of Frank Bean who presides over close to half a million people. It represents a perfect example of the unwillingness of this government and its lack of foresight and planning.
As we all know, the federal government implemented AHOP. The minister refers to it as "a hope". Some say, no. It was implemented in 1973 to encourage construction of affordable new housing. When it was introduced, AHGP represented a major shift in federal housing policy. Previously CMHC had been concerned with supplying mortgage funds. AHOP was CMHC's first attempt, some hope it is their only attempt, to offer direct ongoing cash subsidies to home buyers and, oh boy, it failed.
The perils of AHOP in Peel have been and continue to be brought to the attention of the minister responsible for housing. However, until recently it would appear that the loopholes of AHOP have been of no great concern to him and his government.
The AHOP fiasco was foreseen by the Peel region, by the member of Parliament from there, and should have been seen by CMHC, but no one at the federal level could admit that there were problems with the government's panacea to housing shortages.
Jim Crozier, the commissioner of social services in Peel, made representations many times to the minister. AHOP owners groups made many representations to the minister over the years, and he did not listen. He did not listen until very recently.
When AHOP began, the rapid growth rates between 1971 and 1980 and available land made Peel a prime location for developers building under AHOP. In 1971 the population of Brampton was 70,838. In June, 1981, it was 148,150, an increase of over 100 per cent. The Peel region saw an increase of 79 per cent in that same period.
A large part of the AHOP problem was that too many AHOP units were built in Peel too soon. Inducements brought in buyers that should not have reasonably been expected to be buyers, and the ethics of the matter left much to be desired. This was discussed in the House many times.
Although AHOP did increase demand among families otherwise ineligible for home ownership, this subsidized demand was not enough to absorb all the AHOP units. The glut of AHOP housing had profound short-term effects on the retention of value.
Housing
Because of the imbalance of supply and demand in Peel, gimmicks to market the units were used; one dollar down payments, five month free rent options, low mortgage rates. Many of the people attracted to AHOP, 73 per cent, were young, first-time buyers. Closer credit screening would have saved many dreams. The real estate value of AHOP units created another problem. Values of many homes actually depreciated, and 1 know that to this day there are still units being sold under their original mortgage value. The ethics of the efforts of the developers and government to attract virtually any low-income family can be questioned. They had a responsibility. They did not live up to it.
Current figures show that 55 per cent of Peel's AHOP units have had their titles returned to CMHC as a result of foreclosure, issuance of power of sale or quit-claim deeds. That is 55 per cent, and the minister says this program is a success. The dreams of all these people have been shattered.
The number of AHOP units on CMHC's books constantly changes. There may be more coming on this year when people remortgage their homes. Currently CMHC has title to 527 units in my area. Of this, 351 are high rise and 176 are row. Last year 50 to 75 units per month were being returned to CMHC. What will it be this year? We do not yet know.
It was the AHOP issue and the dedicated work of people such as Jim Crozier and Marlene Grant that brought to light our serious housing problems. People became concerned, fearful, and began feeling helpless about the whole housing issue. The minister started to take note when they began banging at his door in Scarborough. He then realized that maybe something was wrong in this country.
Something that concerns me is that this system put these people into the homes. The system also kicked them out and shattered their dreams. When this happens, people rebel against the system. I do not want to see, and I know the minister does not want to see, people rebelling against the system, but when the system does that, it follows.
I would like for a moment to address a point repeatedly made by my friends in the NDP concerning the defaulted AHOP units. The solution put forward by that party over the last year, and by the hon. member for Vancouver East (Mrs. Mitchell) was to turn the vacant AHOPs into rental units. That sounds like a very commendable solution. However, it does not take into consideration the realities of the real estate market.
Home owners who had their hard earned savings invested in the purchase of their units became very concerned that the vacant units might be turned into rent-geared-to-income units. They were concerned about the retention of the value of their homes or about trying to get the value back to what they originally paid for it. If statistics can be believed, they had every right to be concerned.
Rent-geared-to-income units should not be proposed in ownership projects. Market values dictate that the ownership and rent-geared-to-income projects be kept separate, unless it is a co-op housing development.

February 9. 1982
Housing
In Bill C-89, which we are debating, the minister responsible for housing has finally seen fit to introduce legislation to pass the meagre assistance to home owners facing mortgage renewals. I sat through his speech yesterday. It was interesting to note his comments on the $3,000 grant being offered. What he failed to mention was the fact that very few people will be eligible to take advantage of this grant because the regulations are so severe.
This government grant does not begin to solve the mortgage renewal problem. What it does, I am afraid, is to postpone the inevitable. It will make those few who are eligible dependent on Ottawa for the very roof over their heads, a dependence which is very dangerous when one considers the philsophy of this government and its irresponsibility.
The minister's comments yesterday were of some interest. I wondered how he could stand in his place and say that the amendments in this bill will permit young families to buy their first home. That is beyond me. Is this bill going to lower the interest rates? Is this bill going to change our real estate market trends geared, because of economic conditions, to second and third time buyers who have existing equity? No. Mr. Speaker. It was enlightening to hear the minister for the First time admit that there has been a financial drain in the CMHC fund because of high AHOP defaults.
What is infuriating is that we on this side of the House have been asking for action for two years. It has taken this government two years to become, as the minister says, sensitive and concerned about the problem. Those are empty words. For people facing an escalation in shelter costs, there is very little good news, and this bill certainly gives none.
Returning to the role of the government ensuring our rights to housing, the erosion of real income and the escalation in shelter costs have shut out the vast majority of young people who are in search of accommodation. If the minister's riding is like my riding, I am sure that he has had young people coming to him every day of the week to ask how they will be able to afford a home or where they can rent an apartment. The fact is that these accommodations are just not available. The severe shortage of affordable rental accommodation no longer makes renting an alternative. By the end of 1982 there will be an estimated shortfall of 1,517 rent-geared-to-income units in Peel alone. The fact that these units are needed by families and senior citizens may not be of any concern to the minister but it is of great concern to me and to my constituents because if these shortfalls continue we are headed for severe hardship in my particular area of Canada and I know in the minister's area as well.
The minister stated that part of the $350 million for housing which was included in the now infamous budget of the Minister of Finance (Mr. MacEachen) will finance the rental supply plan over the next two years. We need 1,500 units right now in my riding alone. We do not need them tomorrow, not by the end of 1982, but right now. That is the waiting list. It is a legitimate waiting list.
The stimulus to construct 15,000 units over the next two years across Canada is quite infinitesimal, but it coincides with everything else the government is doing. For example, the Minister of Industry, Trade and Commerce (Mr. Gray) stood up and said, in answer to a question today about high interest rates, that the government gave $25 million to some group that is going to create thousands of jobs. We know that is not true, knowing the cost of creating one job.
Now this minister is throwing a little here and there-they are all doing it just to say, "Are we not great? We are doing something." But they are not really doing anything.
I sat here yesterday and listened to a number of Liberal members talk about the Progressive Conservative proposal for mortgage interest deductibility and property tax deductibility program. I think it is time that we dispelled some of the myths that the government constantly enjoys creating. My hon. friend, the Parliamentary Secretary to the Minister of Justice (Mr. Peterson), stood in his place yesterday and had the audacity to state that our proposal would have been unfair.


Paul James Cosgrove: To renters.


John Horton McDermid: I will come to that, Mr. Minister. According to the Parliamentary Secretary to the Minister of Justice, a deductibility program for any type of expense always benefits higher income taxpayers. I would suggest to him that the realities of paying a mortgage do not solely belong to higher income earners, something which may be a revelation to members opposite because they are all high income earners. Most people who have mortgages are not rich. I invite the hon. member to tell the young families in my riding who are struggling to pay their mortgages that they are rich. I invite the hon. member to come to Bramalea and to the villages of Heart Lake where it is the ambition of young families-who would benefit greatly from a deductibility program-to pay off their mortgages, to tell them that they are rich. These families make up the majority of my riding. I ask the hon. member to tell them that they are rich.
The rich have always had the same deductibility benefit which the Liberals consider unfair for middle and low-income earners. The proceeds from a mortgage are invested, and the interest has always been a tax write-off, and still is to a limited extent, of approximately $10,000 a year. Why would a deductibility program extended to an average Canadian home owner be unfair? It would effectively reduce their mortgage interest by 31/2 per cent to 4 per cent right now. Would it be unfair to renters?


Paul James Cosgrove: Yes.


John Horton McDermid: In answer to the minister, his government introduced the measure which enables the owner of the rental unit to deduct mortgage interest as a business expense. They have always had that privilege. This has helped to keep rents lower than would have otherwise been the case if deductibility was not available to the owner.


Paul James Cosgrove: That is a scam.
February 9, 1982


John Horton McDermid: I can tell the minister, Mr. Speaker, that if that were not there, rents would be tremendously higher. Owners already have that privilege.


Paul James Cosgrove: Higher than $1,000?


John Horton McDermid: That is another myth the government likes to spread around. They have had that particular privilege for a very long time.


Paul James Cosgrove: Is that why you have rent control in Ontario?


John Horton McDermid: That is right. Therefore, I ask where the unfairness is in our attempt to help the home owners who needed help the most. It would help senior citizens stay in their homes a little longer because they could deduct the property tax from their income to give them a little better chance to stay in their homes instead of being forced out because of higher taxes.
I would also like to tell the parliamentary secretary that, with regard to those people who are renewing three or five-year mortgage plans who, according to him, have experienced significant increases in equity, equity does not mean a thing unless that property is sold.
I would like to reiterate that if what is contained in Bill C-89 is all that the government is willing to do or to propose to alleviate some of the problems facing us, then let us get on with it.
At this point 1 would like to congratulate the minister.


Some hon. Members:: Hear, hear!


John Horton McDermid: I am thankful that the minister has stayed in the House during the full debate. That is a rare occurrence with this government. He is to be congratulated for that. As a matter of fact, I feel sorry for him because I genuinely believe that he does have some concern for the home owners, but I think that the Minister of Finance and his cabinet colleagues have hung him out to dry.


Paul James Cosgrove: Have you read the Matthews report?


John Horton McDermid: That is three years old. Why do you not do something?


Paul James Cosgrove: You have it in front of you.


John Horton McDermid: The provisions in Bill C-89 are not adequate. It will not encourage adequate housing starts. People who are renewing mortgages are not adequately assisted, and the rental accommodation shortage is not adequately addressed. However, it is obvious that the meagre aid in Bill C-89 is all that Canadians will get. The government has been too slow in attaching any significance to the housing question. Far too many people are suffering, and this, combined with the negative effect of the so-called budget, paints a dismal picture.
When you add the housing situation to the economic picture, the lack of confidence in this government which is evident across Canada is very understandable. Nothing could serve the
Adjournment Debate
national interest more than a few resignations by members opposite. As a matter of fact, if the government is doing everything right, as it says it is, and if it has the support of Canadians, I challenge the Liberal government to call an election now based on its budget and its housing programs. The people of Canada will get rid of an unimaginative and uninspiring group of incompetents and save them the embarrassment of resigning. May I call it ten o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Mr. Bill Kempling (Burlington):: Mr. Speaker, when I rose last week to ask the Minister of Industry, Trade and Commerce (Mr. Gray) a question regarding the importation of small Japanese trucks, I was only touching upon a small part of an extremely large problem. Two questions during our daily question period cannot address the real problems facing our automobile industry. The question put to the minister is symbolic of the whole problem. Let me be a little more specific and you will see the dimensions of the problem.
When the Japanese ministry of international trade and industry wrote to our Minister of Industry, Trade and Commerce on June 4, 1981, an understanding on a quota was reached with respect to automobiles. We agreed to increase our quota by 10 per cent over the 1980 import totals. The Americans negotiated a 6 per cent decrease in their import totals of Japanese automobiles. Light trucks were not part of our quota consideration and, as a result, light truck imports increased 122 per cent over the previous year.
Three of our domestic manufacturers have introduced light trucks comparable to those imported from Japan. We are presently levying a tariff of 12.9 per cent on imported trucks. That tariff is due to decrease to 9.2 per cent under a GATT agreement which we have signed. When we look at the American action in this field, we see that the Americans levy a 25 per cent tariff, and they do not intend to reduce that tariff under the GATT agreement. In other words, they are going to take a tariff protection route for the domestic manufacturers of small trucks.
My point is that with domestic production under way in North America in light duty trucks, does it not make sense to have a quota and a stabilized duty of even 12.9 per cent? If we

February 9, 1982
Adjournment Debate
do this, we will assist our domestic production in getting a foothold in the marketplace. To do otherwise would add to a problem which is already out of hand.
We have only had one year of surplus since the auto pact was signed. Each year our balance of payments in the automotive account has been in deficit and is growing and growing by gigantic leaps and jumps. The standard reply that 50,000 jobs have been created is what we usually hear from the minister. However, with the downturn in the industry, many of these jobs are now becoming redundant. The pressure for change in the auto pact has been building for a number of years.
A few years ago the government decided to hire a consultant to review the auto pact and to make recommendations. The government employed Simon Reisman, a former deputy minister of industry, who was one of the architects of the original auto pact. Naturally, Mr. Reisman found little wrong with the agreement he helped put into place. I recall attending a meeting with Mr. Reisman at which he simply put down anyone who was critical of the auto pact. Even at that time we could see the tremendous disruption which was taking place in our balance of payments. Of course, after listening to Mr. Reisman, I left in disgust.
A very large part of our current account deficit is tied up in the automobile industry. We are dumping more and more money into a variety of programs, only to see them fall apart down the road. It is this type of patchwork approach we have to stop. We must review the whole matter with a sense of urgency.
I see a decline in the manufacture of heavy duty trucks in Canada; this spells trouble for the transportation of goods down the road. It is just not attractive to become an investor in the automobile industry today, and yet we see a pent-up demand building which is being held up by high interest rates. 1 am not convinced that the minister, his department and the government are really aware of the size of the problem facing us.
If the negotiators meeting with the Japanese do not insist on a quota for light trucks, my statements will prove to be correct. A realistic look at the auto pact over the last 18 years shows that in the early stages our Canadian content was 58 per cent. In 1981 that slipped to 56 per cent. In other words, after 18 years of involvement in the auto pact, Canadian content propped 2 per cent rather than going up as it should have.
We are a mobile society. The automobile, the light truck and the heavy duty truck will be with us for as far as we can see ahead. I want the minister to tell us when we will begin to .address this very, very serious problem.


Mr. Ron Irwin (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I would like to respond to my good friend, the hon. member for Burlington (Mr. Kempling). Let me first look at the reality. Japan is one iof our main trading partners. In 1980 we exported $4,345,.474,000 worth of goods to Japan and imported from Japan $2,791,516,000 worth of goods. In other words, we sold a little over $1.5 billion worth of goods more to Japan than we
imported from Japan. If there is a complaint, it is a complaint from Japan's side that we are not purchasing more from Japan.
The figures are deceiving. I have carried the hon. member's figures through somewhat. His thesis is that because we do not have the 25 per cent tariff the United States has-our tariff is only 12.8 per cent-that is damaging and we should do what the United States has done.
Two years ago, and we are talking about mini-trucks specifically, the Japanese had six per cent of our market. Last year they had 11 per cent; and this year, in this short period, it is 16 per cent. That is, with a tariff of 12.8 per cent. The tariff in the United States is double that amount; it is 25 per cent. Yet for the last three years the Japanese share of the United States market has been 20 per cent. With double tariff, they have a larger share of the United States market.
We are now concerned. Earlier this year we reached an agreement on passenger cars with the Japanese, that from April 1, 1981, to March 31, 1982, they would not export more than 174,213 cars, to Canada.


Robert Alfred Corbett: That is 10 per cent above the 1980 basis, it is not light trucks.


Ron Irwin: It does not include light trucks, that is right. But General Motors is now in the mini-truck business, and I hope their truck is productive. I find it humorous to hear a spokesman for that great party of the free enterprise system here in Canada telling Canadians that once again we should protect American companies operating in Canada, the three of them, because they are not operating productively.
I spoke to a superintendent of U.S. Steel on Sunday about the car market and he said that with inflation going down and interest going down, hopefully, we still have the problem on this continent, especially with U.S. Steel, that the Japanese are manufacturing their automobiles and trucks at $10 U.S. per hour and the Americans are manufacturing theirs at $20 U.S. per hour. You cannot blame all that on labour. This involves an attitude, a matter of reinvesting in modernized equipment. More tariffs, as the hon. member has suggested, create more subsidy to inefficiency. I note that my time is up. Thank you, Mr. Speaker.


NATIONAL DEFENCE-POSSIBILITY OF LEASING EQUIPMENT FROM UNITED STATES
Hon. J. Robert Howie (York-Sunbury):: Mr. Speaker, I have a very high regard for the men and women in Canada's Armed Forces. I feel that they fulfil their function admirably and under considerably great difficulty. I have a high regard, too, for the gentleman who is our Minister of National Defence (Mr. Lamontagne), who was himself a gallant soldier. I feel that Parliament's function is to indicate to our Armed Forces the role that we want them to perform and then to give them the personnel and the material to fulfil that obligation. It is in
February 9, 1982

supplying the Department of National Defence with the personnel and material that I feel we are not fulfilling our function adequately as parliamentarians. Tonight I would like to indicate some constructive measures that I hope we can consider in fulfilling that obligation.
It is my opinion that our Armed Forces are understaffed and underequipped because they are underfinanced. In 1963, 24 per cent of Canada's budget was allocated to the Department of National Defence. This year 8.6 per cent of our budget is so spent. In 1963 we had 120,000 men and women in our Armed Forces, and today we have 80,000. In the year
1980-	81 we budgeted $5.04 billion for national defence and in
1981-	82 we will increase that to $5.9 billion.
Over the years our increases in real dollars when stripped of the inflation factor, barely meet 3 per cent requirement of NATO. We are at the lower edge of prudence in that regard. I think we met that requirement this year, thanks to the expenditures for new fighter aircraft.
Speaking of our new fighter aircraft, we expect the first copy of the 137 F-18A Hornets to be available this fall, probably in October. Two years ago when we signed the contract for this fighter aircraft-and it is badly needed-we felt that the estimated cost would be $2.3 billion. Right now the estimated cost is $5 billion. This increase in cost is certainly not entirely the fault of the Department of National Defence, but it raises some question which I think we should address about the viability of the management process and ongoing re-equipment planning in terms of the Armed Forces.
It has been 11 years since we have had a white paper on national defence. It is just about time we took a look into the future, did some planning and had another one. In the army component of the Armed Forces we have trucks which are older than the drivers. This is the situation in regard to much of our mobile equipment. We have 19 tanks stationed in Canada and the rest are with NATO in Europe. These 19 tanks are barely enough for training purposes. The Leopard tank, about which I am speaking, is an excellent tank, but its numbers are so small that it can fulfil very few functions. We have received reports that in western Canada some members of the Armed Forces exist on welfare. I should like to see the report rebutted, and I hope the opportunity to do so will be taken tonight when the parliamentary secretary replies to this allegation.
Our navy has four 280 Tribal class destroyers. These are efficient and can give good account of themselves. The other grand old ships of the line are regrettably just about 30 years old. They can get the steam up when their boilers are not cracked, but they have to stay pretty well within hailing distance of ports because of their advanced age. The St. Laurent was sold two years ago. While it was being towed down south to be junked, the towline broke and the St. Laurent sank; that is the sad story of our navy. We have four Oberon class submarines, three on the east coast and one on the west. They take their turns being patched up because they are 20 years old. The one on the west coast is in dry dock most
Adjournment Debate
of the time. We have six frigates in the definition contract stage. This contract was varied or altered once. I cannot say with reliability when they will come on line, but I can say that they are very badly needed.
What will we do about the situation? It will cost a tremendous amount of money to purchase new equipment. Canada has very extensive shoreline in the north, on the east and on the west. We have a small population with a limit to what we can raise in revenue, as well as tremendous demands on our dollars.
My suggestion is that we should take a page out of World War II experience, when we had an excellent lend-lease program with the United States of America, and that we rent or lease equipment from the Americans. What about our sovereignty? Can we do this and maintain our sovereignty? What about Canada's defence industry and our superior training methods? Will the Americans be interested? We will never know until we ask them, but 1 think the answer would be affirmative because the Americans have been our friends in peace and our allies in war. They know our economic situation and our limitations. We supply the defence for their northern frontier. They have large amounts of equipment and a tremendous budget which will be increased. The amount for which we would lease from them would be infinitesimal. If we enter into a contract to lease from them, we can protect our sovereignty and perhaps receive some spin-off benefits in terms of defence construction for Canadian industries. I notice my time is almost up. I thank you, Mr. Speaker, and my colleagues, for your indulgence.


Ursula Appolloni: Mr. Speaker, on the surface the idea of leasing military equipment as proposed by the hon. member would appear to have some merit, at least in theory. In practical terms, however, this is an option that has not normally been entertained for a variety of reasons which I will try to outline.
There is an interdepartmental committee under the chairmanship of the Treasury Board secretariat that studies instances wherein leasing could constitute a desirable means of satisfying certain facility and equipment needs. Unfortunately, in the case of military equipment, the Department of National Defence has no knowledge of any such modern equipment, compatible with Canadian requirements, that is available for lease. While it is entirely possible that upon investigation some equipment could be found it is most probable, however, that the owner nation would have already discarded such equipment as being either too old, beyond the state of economic repair, or requiring considerable modernization to make it capable of contemporary utilization. I am sure the hon. member does not want us to be second cousins to anyone in the military department.
In most cases, modern equipment not actively in use by owner nations, is normally required by these nations as reserves in time of war and it is unlikely that they could be

February 9, 1982
Adjournment Debate
made available for long-term lease. In general terms, it can safely be said that the equipment must fit the task to be performed.
Certainly, this is very relevant to the point made by the hon. member in his original question in which he said that we had only 19 Leopard tanks in Canada. On this point, I would like to correct him by informing him that we have 43 tanks in Canada.


J. Robert Howie: Not in Canada.


Ursula Appolloni: In Canada.


J. Robert Howie: The rest are in Europe.


Ursula Appolloni: Mr. Speaker, I gave the hon. member the courtesy of my attention. Surely he can reciprocate. Even as a Tory, he might have some good manners.


J. Robert Howie: Try to be accurate.


Ursula Appolloni: More important is the point that tanks do not have a significant part to play in any of the defence of Canada scenarios. If we do have tanks at Gagetown it should be clear that they are for the training of the armoured personnel who will man our Leopard tanks stationed in Europe where they do have an important operational task.
The question of Leopard tanks is more interesting in some other aspects, and I can understand the hon. member basing his question on the fact that we did, a few years ago, rent that type of equipment from our German allies. But we must put this matter of the tanks in the correct context. The short-term leasing of Leopard tanks made imminent good sense because we were getting that very type of equipment in our own inventory shortly thereafter.
A factor that is not readily understood and one that is omitted from the member's comment is the fact that the rental of equipment itself is only one very small part of the total defence equation. Ancillary questions that must be considered include the retraining of operations and maintenance personnel, additional spare parts and support equipment requirements, the compatibility of current ammunition holdings, and, most important of all, the capability of the equipment to fulfil the task at hand.
I see that my time has run out, although I could have gone on at length, Mr. Speaker.


NATIONAL DEFENCE-(A) COMMITTEE STUDY OF CANADIAN FORCES BASE CHATHAM, N.B. (B) MINISTER'S RECOMMENDATIONS
Robert Alfred Corbett: Mr. Speaker, on November 8, the Minister of National Defence (Mr. Lamontagne) confirmed that the U.S. F-18 Hornet fighter plane will not be based in Chatham, New Brunswick, but instead will go to Cold Lake, Alberta, and Bagotville, Quebec. He confirmed that the squadron presently based in Chatham will be phased out and, indeed, the existence of the air base itself has become
very much in question. The personnel that are based there will be transferred or laid off, as the case may be. That announcement was made on November 8, 1981.
By December 15, the minister had used the typical ruse of this government of giving the air base a reprieve. He postponed the replacement of the fighter squadron until 1984. We have seen this sort of thing happen several times. It is part of the old syndrome of "Boys, we will rip your head off'; only to hear then, "Don't worry, fellows, we don't really mean that, we are just going to break your legs".
The Minister of Finance (Mr. MacEachen) did the same thing when he talked about indexing pensions and other things which would have had a severe consequence to some of our pensioners. When it ended, it was just an ugly rumour and it wasn't really going to happen at all, but he would not close the door to it. This seems to be the way this government operates, and that is a little disconcerting to say the least.
The minister met with the leaders of the region during the latter part of December and assured them there would be some things happening in Chatham. He would not be specific but said there was going to be something in Chatham to alleviate the base closure. He said he would get back to them in January or February and in the meantime was going to set up an interdepartmental task force made up of various deputy ministers from however many departments were involved, and said they would report to Parliament by the end of January. They were going to be charged with the responsibility of making suggestions as to what they were going to replace that base with.
On February 3, Mr. Speaker, after telling the minister I wanted to know what suggestions the task force had made and what suggestions he was going to make to cabinet, I asked the minister:
Will the minister now tell the House what recommendations that committee has made?
The minister's response was:
Madam Speaker, the answer is yes.
What kind of a response is that, Mr. Speaker, to a quite explicit question? I simply asked if the minister would tell the House what the committee's recommendations were and he answered:
Madam Speaker, the answer is yes.
Then he went on to explain that Canada's security was well taken care of, which is not at all what I asked him. After I reminded him of that, he did indeed respond in substance, because I believe he was embarrassed into some kind of response that at least alluded to the fact that I had asked the question.
Let me just give you a brief history of the role of this base in Chatham. It has in the past played a very important role in the defence of Canada in the Atlantic Coastal Canadian Identification Zone. We are told by National Defence people that
February 9, 1982

there is an increase in Russian Bear aircraft travelling in this zone.
Mr. Speaker, you point to your watch; 1 would just like to confirm that I do have seven minutes, and I have used three of them now.


The Acting Speaker (Mr. Blaker):: The hon. member has until 10.25.


Robert Alfred Corbett: As I recall, Mr. Speaker, I got on my feet at 10.20. But at any rate, let me simply say that this base plays a very important role. The minister will say that they are moving the F-18 aircraft to Bagotville because it can take care of the northern regions of Canada which must come under scrutiny as well. Let me tell the minister through you, Mr. Speaker, in case he does not know it, Chatham is located at a more northerly position in this hemisphere than is Bagotville. In addition, it is farther east and is therefore closer to the identification zone and certainly in a much better position to identify these aircraft.
We also have a very important situation in that over 3,500 people will lose their jobs in the Chatham area. That will mean the loss of $25 million or $30 million in wages and an additional $12 million in lost spin-offs.
The people at Chatham are looking for replacements. They are looking to this government to do something about the situation in which they find themselves. They are concerned, and they have every right to be concerned. I have asked the Minister of National Defence to tell the people of Chatham, in specific terms, what replacement for the air base he will recommend to his cabinet colleagues. I have asked him to assure those people who will lose their jobs, and their families, the townsfolk of Chatham and the businessmen of the community who will be greatly affected by this closure that, indeed, the government will be taking specific, positive steps to ensure that all of that lost income will be replaced, as the minister and the government has suggested in very, very general terms. I expect that the assistant to the minister will now be very specific and will answer the question.


Ursula Appolloni: Mr. Speaker, at the outset, I would like to emphasize to hon. members present, and especially to the people of the Miramichi region, that the decision to locate the eastern operational base of our new fighter aircraft, the CF-18 Hornet at Bagotville, was taken with the best military and strategic intelligence available. A thorough analysis of all basing postures was completed before a final decision was reached.
In the context of protecting Canadian sovereignty in the military sense, of course national defence would have preferred to operate a larger number of bases, thus ensuring adequate overlap of air defence coverage. However, when all factors were weighed and considered, it became necessary to compromise in certain areas.
Adjournment Debate
There were three main factors considered in our deliberations with regard to the selection of the best location for our bases: peacetime sovereignty; threat and air defence considerations and, of course, cost.
In the initial stages of the program, operational research staffs completed a detailed study of all basing operations and detailed comparisons were made among the various options identified.


Robert Alfred Corbett: Why Bagotville?


Ursula Appolloni: For eastern Canada it was found that, given the technical capabilities of the aircraft, geography, weather, etc., the optimum locations for the protection of peacetime sovereignty were Bagotville, and Goose Bay as back-up.


Robert Alfred Corbett: What about the G.I. considerations?


Ursula Appolloni: With regard to the second factor, that of the threat and air defence considerations, based on our strategic assessment of the continental threat to North America having regard to Warsaw-


Robert Alfred Corbett: What about the lost jobs?


Ursula Appolloni: -pact basing deployments, radar coverage, probable axis of approach defence coverage and other strategic military considerations, Bagotville and Goose Bay were again determined to be the optimum operating bases.
Finally, the cost factor played a very important role in our decision. Our present fleet of fighter aircraft consists of some 190 aircraft, of three different types. While the Department of National Defence was not able to replace the old aircraft on a one for one basis, the maximum number were purchased within the allocated budget. This reduction in fighter aircraft units, together with the extremely high cost of ground support and test equipment, led the department to the conclusion that two main bases, plus two deployment bases, would be the maximum infractructure-


Robert Alfred Corbett: What about the lost jobs?


Ursula Appolloni: -that we could afford within the program budget.


Robert Alfred Corbett: The economy!


Ursula Appolloni: All hon. members are aware of the constraints that we are currently under.


Robert Alfred Corbett: $33 million!


Ursula Appolloni: When all these factors were considered in concert, the threat, the protection of Canadian sovereignty and the cost, it was concluded that the CF-18 should be flown from two main operating bases, Cold Lake and Bagotville, and two deployment bases, Comox and Goose Bay. The decision was based on strictly military, strategic and economic considerations.


Robert Alfred Corbett: Politics!

February 9. 1982
Adjournment Debate


Ursula Appolloni: These are the facts, Mr. Speaker. They speak for themselves. To suggest, as the hon. member does, that we are somehow abandoning the people of Miramichi is sheer hogwash.


Robert Alfred Corbett: Yes, but what are you going to do?


Ursula Appolloni: We have a committee which is working with the people of Miramichi along with our able Member of Parliament for Northumberland-Miramichi (Mr. Dionne).


Robert Alfred Corbett: What does it have to say?


The Acting Speaker (Mr. Blaker):: 1 know the hon. parliamentary secretary will understand that the Chair has no choice but to interrupt. Three minutes is the limit for answering.
The motion to adjourn the House is now deemed to have been adopted. Accordingly, at this time the House stands adjourned until two o'clock tomorrow afternoon.
At 10.29 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, February 10, 1982