1982-03-29

ROUTINE PROCEEDINGS


Mr. Albert Cooper (Peace River):: Madam Speaker, whereas the task force on employment opportunities for the eighties revealed that lack of standardization among provincial trade apprenticeship programs is a serious barrier to mobility, I move, seconded by the hon. member for Bow River (Mr. Taylor):
That the Minister of Employment and Immigration encourage the standardization of trade certification so that workers will have the mobility to travel from province to province in order to correct the serious labour imbalances that currently exist.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


OFFICIAL LANGUAGES
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam Speaker, the federal government provided $73,000 to a Manitoba resident to fight for a bilingual traffic ticket, yet it refuses to give any more than a measly $5,000 to a group of three in Quebec-including Allan Singer, who dared to have a sign over his door in English-in their complicated legal battles with Bill 101. I move, seconded by the hon. member for Red Deer (Mr. Towers):
That this House call on the Liberal government to drop its double standards and give equivalent and adequate funding to Allan Singer for his new legal battles in the Supreme Court, and that the Prime Minister live up to his promise of 1977 that he would provide funding to English-speaking Quebecers in conflict with the discriminatory Bill 101.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EMPLOYMENT
Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, there are more than one million Canadians out of work, and the number of unemployed is rapidly rising. Hundreds of thousands of these jobless Canadians are apparently turning in desperation to welfare as their unemployment insurance benefits cease. In spite of this alarming situation the Minister of Employment and Immigration (Mr. Axworthy) has announced plans to recruit up to 25,000 skilled workers from other countries for jobs in Canada. I move, seconded by the hon. member for Prince Edward-Hastings (Mr. Ellis):
That the government abandon its plan to import non-Canadian workers for Canadian jobs and devise another, obviously more sensible plan which would give unemployed Canadians opportunities to fill these vacancies.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


RAILWAYS
Mr. Vic Althouse (Humboldt-Lake Centre):: Madam Speaker, I rise under the provisions of Standing Order 43. It has come to my attention that the government has commissioned a survey by the Goldfarb organization concerning public opinion on the Crow issue as perceived in both rural and urban centres in western Canada. I therefore move, seconded by the hon. member for Prince Albert (Mr. Hovdebo):
That the full results of this poll be tabled in the House so that the information may be made available to all members of the House of Commons.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

March 29, 1982


TRIBUTE TO KNIGHTS OF COLUMBUS-MOTION UNDER S.O. 43
Mr. Gerald Laniel (Beauharnois-Salaberry):: Madam
Speaker, under the provisions of Standing Order 43, I wish to move the following motion which already has the approval of the three House leaders. Whereas the Order of the Knights of Columbus, a Catholic fraternal and family society pledged to serve the community, was founded 100 years ago today in New Haven, Connecticut, for the wellbeing of its members and the community; whereas this society was established in Canada in 1897 through the foresight and initiative of Dr. J. J. Guerin, former mayor of Montreal, and has spread to many countries with over 1,350,000 members in more than 7,000 councils; in recognition of the patriotic idealism of its members and their service in war and peace, their contribution to Canadian society and their commitment to the family as the basic foundation of that society, I move, seconded by my colleague, the hon. member for Mackenzie (Mr. Korchinski) and by the hon. member for Saskatoon East (Mr. Ogle):
That this House of Commons pay tribute to all Knights of Columbus on the occasion of the 100th anniversary of the Order of the Knights of Columbus.


Madam Speaker:: I will put this motion to the House because it has been suggested by representatives of all parties, but I ask hon. members not to suggest motions under Standing Order 43 which are simply congratulatory. This is not really the intention of motions under Standing Order 43; however, I will make an exception today.

Moved by the hon. member for Beauharnois-Salaberry (Mr. Laniel), seconded by the hon. member for Mackenzie and Saskatoon East (Messrs. Korchinski and Ogle):
That this House of Commons pay tribute to all Knights of Columbus on the occasion of the 100th anniversary of the Order of the Knights of Columbus.
Is it the pleasure of the House to adopt this motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Gordon Towers (Red Deer):: Madam Speaker, in view of the fact that the federal government's national energy program, coupled with the burden of the excise tax on natural gas, is denying millions of Canadian home owners the comfort
of adequately heated homes, I move, seconded by the hon. member for Winnipeg-Assiniboine (Mr. McKenzie):
That the Minister of Finance immediately remove this iniquitous tax on natural gas and home heating fuel, thereby relieving approximately 30 per cent of the burden placed on consumers to heat their homes. Even though this government is cruel and unfeeling, surely someone in the cabinet will see to it that Canadians can at least heat their homes.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


STANDARDS FOR WOMEN'S HEALTH AND HYGIENE PRODUCTS- MOTION UNDER S O. 43
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, a Toronto task force report released today by The Globe and Mail indicates that women are not adequately protected from, or informed about, potential health hazards related to female hygiene products and contraceptives. Therefore I move, seconded by the hon. member for Beaches (Mr. Young):
That the Minister of National Health and Welfare take immediate action to establish and enforce safe and effective federal standards that must apply to all women's health and hygiene products before they can be marketed, including stricter federal testing and approval of drugs, medical devices and health products; mandatory labelling of medical devices and guidelines covering drugs used during pregnancy and estrogen replacement therapy.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


UNEMPLOYMENT INSURANCE
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, whereas in the Northwest Territories employees and employers annually pay $6.5 million more in unemployment insurance premiums than is paid out in claims, and whereas the territories have one of the highest unemployment rates in Canada, I move, seconded by the hon. member for North Vancouver-Burnaby (Mr. Cook):
That the surplus unemployment funds in the territories be used to establish training programs and to create permanent new jobs therein.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
March 29, 1982


MEMBERS OF PARLIAMENT
Mr. Gordon Taylor (Bow River):: Madam Speaker, I move, seconded by the hon. member for Red Deer (Mr. Towers):
That this House request the Solicitor General to make public, (a) a list of all presently elected parliamentarians who were or have been barred from entering the United States of America between January 1, 1945, and December 31, 1981; and (b) a list of all presently elected members of legislatures holding office in any province in Canada who were or have been barred from entering the United States of America between January 1, 1945, and December 31, 1981.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


IMMIGRATION
Mr. John McDermid (Brampton-Georgetown):: Madam Speaker, the Department of Employment and Immigration recently conducted a symposium on refugee status determination. At that conference, the minister announced changes to the structure of the refugee status advisory committee to help deal with the backlog of 1,000 cases. At the same conference, it was learned that the Immigration Appeal Board is over one year behind in its cases. Therefore, I move, seconded by the hon. member for Western Arctic (Mr. Nickerson):
That the Minister of Employment and Immigration immediately introduce legislation allowing for an extra vice-chairman to be appointed to the Immigration appeal board, together with extra members, so that the backlog causing procedural unfairness to those awaiting determinations can be expeditiously dealt with.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


LABOUR CONDITIONS
Mr. Rod Murphy (Churchill):: Madam Speaker, in view of the fact that a coroner's inquest into the grain silo death of Paul John Jovanov recommended that the federal government should hire more safety inspectors and provide stricter enforcement of the Canadian Labour Code for the safety of Canadian workers, and since the Liberal government continues to have a cavalier attitude to inspection and enforcement procedures, I
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move, seconded by the hon. member for Brant (Mr. Blackburn):
That the federal government immediately begin hiring more safety inspectors in order to enforce legislation which is supposed to protect the health and life of Canadian workers.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Harvie Andre (Calgary Centre):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. It concerns the oil import compensation program. In April Canadian consumers will be paying over $7 million per day in unnecessary subsidies for imported crude oil, while as much as 300,000 to 400,000 barrels of domestic oil per day are shut in. This means consumers are paying at least 15 cents per gallon more than necessary, governments are collecting fewer royalties and taxes, producers already devastated by the National Energy Program are further hurt, service companies that have already laid off 20 per cent of their employees will be laying off more, and the country's already serious balance of payments deficit is exacerbated by $16 million per day. Given that the minister has known about this problem since at least October of last year, when will he do something about it?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: This week, Madam Speaker.


Mr. Nowlan:: Are you going to resign?


Mr. Nielsen:: Are you leaving the country?


NATIONAL ENERGY PROGRAM
Harvie Andre: Madam Speaker, encouraged by that answer, I would ask the minister whether he could be further encouraging about press speculation last week which indicated that he finally recognized the obvious-


Mr. Trudeau:: Order!


Harvie Andre: -namely, that the national energy policy has caused a great deal of harm to the Canadian economy. Can the

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minister tell the House whether the stories are true and whether in fact he will be making some modifications to this program to restore at least a little vitality to this important sector of the Canadian economy?


Marc Lalonde: Madam Speaker, we have a number of adjustments to the program in co-operation with the Government of Alberta over the last few months. The Government of Alberta announced that it was reviewing the royalties in operation in that province. 1 hope it will come up with a favourable announcement in a short while.
As far as the speculation to which the hon. member referred is concerned I have already indicated that it is without foundation and that the Minister of Finance is reviewing taxation in all sectors at the time of the budget. Obviously it is a matter which would be examined when the time for a budget comes.


FUTURE OF ALSANDS PROJECT
Harvie Andre: Madam Speaker, I hope the minister will reconsider that position because adjustments are needed from the federal level as well. Adjustments from the Alberta government and from the federal government are welcome.
Another important energy project is reaching a critical stage. Existing members of the Alsands consortium indicated that March 31 was the deadline to decide whether the project would go ahead or become another casualty of the National Energy Program. Does the minister have any encouraging statements to make regarding this project, or will we see those tens of thousands of jobs and billions of dollars of investment join the heap with the rest?


Marc Lalonde: I expect to have an answer tomorrow, Madam Speaker.


EMPLOYMENT
John Horton McDermid: Madam Speaker, in the absence of the Minister of Employment and Immigration, in the absence of the Minister of State for External Relations who takes his place, and in the absence of the Minister of Labour who takes his place, I will direct my question to the Right Hon. Prime Minister. Recently the Minister of Employment and Immigration made a statement telling us that 20,000 to 25,000 skilled workers will be hired abroad this year and will be brought into Canada because, according to him, there is a shortage of skilled labour in the Canadian labour market. Could the Prime Minister please inform the House how he arrived at those figures?
March 29, 1982


Pierre Elliott Trudeau: Madam Speaker, this is a question of a statistical nature, and I will have to take notice of it.


BASIS FOR RECRUITMENT FIGURES
John Horton McDermid: Madam Speaker, I would assume that when a minister makes a statement about importing 20,000 to 25,000 skilled labourers when there are over one million unemployed, the Prime Minister would take some interest in it.


Some hon. Members:: Hear, hear!


John Horton McDermid: Perhaps the parliamentary secretary would know more about it than the Prime Minister. Would he perhaps answer the question and tell us from where he got those figures, and on what they were based? Where are Canadians, such as Len Prevost who just graduated from a skilled course in computer programming and cannot find employment, to find the jobs about which the minister is talking?


Pierre Elliott Trudeau: Madam Speaker, I pointed out that it was the statistical character of the answer which caused me difficulty, not the substance of it. As the minister has explained before-and I have talked about it-the educational system in Canada is not geared to jobs of the future. I believe the minister gave a few examples which I have in mind. One was that Ontario Hydro is looking for-and I forget the number of engineers-a great number of engineers. They have to be brought in from abroad because our schools in Canada, our universities, have not produced sufficient numbers of engineers. Another example I remember him giving was in the case of the province of Alberta where literally hundreds of engineers are needed. Application is made to the Department of Immigration so that we can bring in these engineers from abroad, because our technical schools have not produced a sufficient number of them.


THE ECONOMY
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, I would like to ask the Prime Minister a question. I think it is well known that in almost every single industrial sector unemployment is rising dramatically, whether it be the steel industry, the farm implement industry, the footwear industry, the auto industry, the appliance industry, or for that matter general construction, and housing in particular, and that there are fewer and fewer job opportunities for Canadians. In every single instance the main reason cited for the downturn is the high interest rate policy of the government.
March 29, 1982

In the interest of this country is there no measure that can be taken by this government to reduce the interest rates chargeable on those products that Canadians should be purchasing but are not purchasing because they cannot afford them? Is there no measure that can be taken by this government to enable those Canadians to get work who should be working and who are not working because there are no people to purchase what they would be making? Is there no way we can bring down interest rates in Canada and thereby stimulate our economy and provide Canadians with some hope?


Pierre Elliott Trudeau: Yes, Madam Speaker, there is a way. The Minister of Finance has referred to it many times. I have referred to it many times. The way would be to bring down inflation, to bring down costs, and when the cost of money is lower, the cost of borrowing money will be lower.


RATIONALE FOR REDUCING COST OF BORROWING MONEY
Ian Deans: Madam Speaker, is the Prime Minister aware that the cost of money is one of the main contributing factors to the end cost of the product and that carrying charges, both for industry and for the retailer, are a major contributing factor to the final price in the retail store? Surely by reducing interest rates we will reduce the price of a product and thereby increase the purchasing power of Canadians. Does that rationale not make sense?


Pierre Elliott Trudeau: Yes it does, Madam Speaker. That is why we are attempting to put downward pressure on inflation, thereby reducing the cost of money, thereby reducing interest rates, and thereby giving stimulus to the economy. That makes sense, Madam Speaker. But the hon. member has to realize that to bring down inflation it takes more than asking questions about the rate of interest. We have to make sure that inflation is lower and that inflationary expectations are lower. In that case we will have lower interest rates.


REQUEST THAT INTEREST RATES BE REDUCED BY LEGISLATIVE ACTION
Ian Deans: Madam Speaker, I have a final supplementary question for the Prime Minister. If it is true that Canadians with the wages they are presently earning cannot afford to buy the products they manufacture because carrying charges are so high, which results in a decrease at the manufacturing end, then surely it makes sense, at least on a trial basis-which will be no different than the experiment being conducted now by the Bank of Canada-to reduce interest rates by way of a legislative proposal put forward by the government? Surely it makes sense to try that measure, rather than to continue with what is now affecting so many hundreds of thousands of Canadians so detrimentally,
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that is, the inability to find jobs because people cannot afford to buy the products being made?


Pierre Elliott Trudeau: Madam Speaker, the hon. member talks about reducing interest rates by legislative measure. Supposing we introduced a law saying that interest rates henceforth will be 10 per cent, would the hon. member lend money at 10 per cent-


Ian Deans: Yes.


Pierre Elliott Trudeau: -would Canadians lend money at 10 per cent-


An hon. Member:: Yes.


Pierre Elliott Trudeau: -when they can get 15 per cent in the United States or 15 per cent from the private sector?


Mr. Blackburn:: What about exchange controls?


Pierre Elliott Trudeau: Now we are getting into exchange controls, Madam Speaker. That would be the next supplementary question. But I am telling the hon. member that if we want to legislate an interest rate below the marketplace, people will not lend their money. They will lend it some other place where they can get a higher interest rate, the United States, for example.


CANADIAN UNITY
Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Madam Speaker, my question is for the Minister of Justice. Last week the Canadian Unity Office leaked the results of a poll which it had commissioned into the popularity of political parties in Quebec. Would the minister tell the House in how many other jurisdictions the government has commissioned publicly funded polls on the popularity of its opponents? Will the minister table in the House today the full results of that poll?
[ Translation]


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, we have conducted several polls of this kind since the referendum was held in Quebec to find out how the situation is developing with respect to Canadian unity. The government's policy has been to use the polls in developing policy, and when the polls are no longer useful in preparing new policies, they are made public, and we intend to do the same thing in this case. They are not national polls on the government's opponents. We have not conducted polls on the Progressive Conservatives or the New Democratic Party. We conducted a poll on people who favour the separation of Quebec from Canada.

March 29, 1982
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INQUIRY RESPECTING PROVINCES IN WHICH POLLS ARE CONDUCTED
Henry Perrin Beatty: Madam Speaker, the question was: in how many other jurisdictions has the Canadian Unity Information Office taken surveys of the government's political opponents' popularity? Did it do it in Alberta? Did it do it in British Columbia, in Ontario, in Newfoundland, or in other jurisdictions? And on what basis, Madam Speaker, does the Minister of Justice, using tax dollars to finance public opinion surveys, withhold that information from the people and Parliament of Canada?


Joseph Jacques Jean Chrétien: Madam Speaker, I think the Canadian public will not blame me at all for making sure that we do everything possible to see that the separatist party in Quebec does not win its cause. We have fought in the last two years to make progress in that field. For example, today, when Royal Assent is being given in England to the new Canadian Constitution, the hon. member should know that we are fighting a very worth-while battle in Canada.


RATIONALE FOR SECRECY ON POLLS
Hon. Bill Jarvis (Perth):: Madam Speaker, my question is directed to the same minister. The evidence given by the executive director of the Canadian Unity Information Office before the standing committee indicated quite clearly that polling was conducted on the instructions of the minister. May I ask him on what basis or rationale is the fact that polls are even taken being held secret-not the result of the polls, but what polls are being taken, where they are being taken, and the nature of the polls? If we are not entitled to the results, can he not at least be sufficiently open to say what polls are being taken, and where?


Joseph Jacques Jean Chrétien: Madam Speaker, I am doing exactly what the hon. member was doing when he was the minister in charge of the Canadian Unity Information Office.


William Herbert Jarvis: Yes, make them public.


Joseph Jacques Jean Chrétien: He himself had conducted some polls and eventually we made them public. The policy is that when these polls are no longer useful in the elaboration of new policy we make them public, and the same thing will happen to this one.


EFFECT ON FEDERAL-PROVINCIAL RELATIONS
William Herbert Jarvis: The minister knows the very great difference is that I indicated in standing committee exactly what polls were being taken; there was no secret about it.
The Unity Office's executive director has indicated one of the reasons for keeping the results secret is that if they were released it would adversely affect federal-provincial relations.
Is that the minister's view, that keeping the results secret enhances federal-provincial relations?


Joseph Jacques Jean Chrétien: Madam Speaker, there were many questions in that poll, covering a lot of subjects, and this is one of them. I said this poll was being used for elaboration of government policies and when it is not needed for that purpose it will be made public. As to publishing the poll at this time, as the executive director said, some of the questions would not be useful in terms of federal-provincial relations.


JURISDICTIONS IN WHICH POLLS ARE CONDUCTED
Erik Nielsen: The minister did not answer the question of the hon. member for Wellington-Dufferin-Simcoe, nor that of the hon. member for Perth. I put it to him simply: in what jurisdiction other than the province of Quebec are such polls being conducted by the government?


An hon. Member:: Yukon.


Joseph Jacques Jean Chrétien: I said we have asked a question concerning the popularity of the separatist cause in Quebec. I think it is my duty to make sure we know its evolution-


Mr. Clark:: Answer the question.


Joseph Jacques Jean Chrétien: -if we are concerned at all about the survival of our country.


Charles Joseph Clark: Answer the question.


Joseph Jacques Jean Chrétien: I did.


INQUIRY RESPECTING JURISDICTIONS
Erik Nielsen: Let me put it in another form. Are polls such as the one conducted in the province of Quebec being conducted in any other jurisdiction in Canada?


Joseph Jacques Jean Chrétien: It is not very hard to understand in English, but I shall repeat it in French. I said that the question was put with respect to Quebec.


EMERGENCY MEASURES
Mr. Svend J. Robinson (Burnaby):: Madam Speaker, my question is directed to the President of the Privy Council. Last May the government passed, with no parliamentary scrutiny
March 29, 1982

whatsoever, the Draconian emergency planning order. Since then, the minister has promised to bring before Parliament new emergency legislation authorizing the sweeping powers granted in that order, including the power to establish civilian internment camps.


Mr. Baker (Nepean-Carleton):: When have I heard that before?


Svend Johannes Robinson: In view of the fact that the scope of the War Measures Act violates not only the International Convenant on Civil and Political Rights, but also the new Charter of Rights, will the minister assure the House that any new legislation will, in fact, repeal the provisions of the War Measures Act? Will he tell the House his timetable for bringing in this new legislation?


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, the hon. member knows perfectly well that the order in council to which he is referring was made public last May and put before a federal-provincial conference of ministers responsible for emergency measures planning. The order in council was merely an update of another order in council dating back to 1965, which also contained provisions for civilian internment. In fact, the provisions were in effect in 1979, under the Progressive Conservative government, who did not see fit to modify them. As a result, we see no reason to change what we see as a bare minimum of provisions for the sound planning of emergency measures in this country. As for future legislation, officials of Privy Council are now looking into the matter. I also intend to carry out a thorough consultation of provincial authorities to avoid overstepping any jurisdictional boundaries, and when everything is ready, the hon. member will be notified, but it is not going to be ready next week!


APPLICATION OF CHARTER OF RIGHTS
Svend Johannes Robinson: Madam Speaker, my supplementary question is directed to the Prime Minister. When the Prime Minister invoked the War Measures Act in 1970, he trampled on and overrode the fundamental rights protected by the Canadian Bill of Rights.


Some hon. Members:: It was Parliament.


Svend Johannes Robinson: He now proclaims that the Charter of Rights will protect Canadians from abuses under the emergency planning order which, among other things, will allow him to impose sweeping censorship and to commandeer all media for an unlimited period of time.
Is the Prime Minister prepared to assure the House that under no circumstances will his government make use of the "notwithstanding" clause in the Charter of Rights to deny, during times of emergency, the fundamental rights of all
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Canadians, or is the Charter of Rights to become as useless during times of emergency as was the Canadian Bill of Rights when the Prime Minister said, "Just watch me", in 1970?


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Madam Speaker, I would first point out to the hon. member that the War Measures Act was adopted in 1970 with the concurrence of hon. members on both sides of this House.


Charles Joseph Clark: With information withheld.


Pierre Elliott Trudeau: Second, the "notwithstanding" clause was brought into the Charter, as the hon. member knows, at the insistence of the provinces. The federal government had a Charter which did not have a "notwithstanding" clause. I am sorry that the hon. member, personally, if my recollection is correct, did not support it. However, I do know that one of the leading forces in introducing a "notwithstanding" clause was Premier Blakeney of Saskatchewan. I would hope that that hon. member would use his influence to get Premier Blakeney, along with other premiers, to revert to the original bill that we had.


Some hon. Members:: Hear, hear!


EXTERNAL AFFAIRS
Mr. D. M. Collenette (York East):: Madam Speaker, my question is directed to the Secretary of State for External Affairs. In view of the fact that the British government has decided, for reasons of economic restraint, to close the Gibraltar dockyards by 1983, thus having a serious impact upon the fiscal integrity of Gibraltar, and in view of the fact that the Spanish government will open its border to Gibraltar on April 20, creating further pressures, could the minister inform the House whether Canada has discussed this matter with our NATO colleagues in the context of Gibraltar's strategic position as part of the western alliance? If not, would the minister undertake to do so at the earliest opportunity?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, Canada has not discussed this matter with our NATO colleagues, and I believe it would be inappropriate for us to do so since it is an internal British matter. At the same time, I would say that the fact that the relations between Britain and Spain concerning this question appear to have somewhat improved, and the fact that Spain is now entering the NATO Alliance, should help to set the stage for more useful future discussions. Therefore, although there should not be discussions in NATO itself, the joint membership of both countries in NATO should be a disposing factor toward a settlement.

March 29, 1982
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PRESENCE IN GALLERY OF HIS EXCELLENCY FRANCOIS OWONO-NGUEMA, SECRETARY-GENERAL OF THE GABON CULTURAL AND TECHNICAL CO-OPERATION AGENCY
Madam Speaker:: I have the honour to bring to the attention of the House the distinguished presence of the Secretary General of the Agency for Cultural and Technical Co-operation, Mr. Owono-Nguema.


NATIONAL ENERGY PROGRAM
Thomas Gordon Towers: Madam Speaker, about 16 months ago the Minister of Finance introduced an iniquitous bill into this House under the guise of a budget. That was the National Energy Program. Now, 16 months later, we find that program is having a devastating effect on Canadian home owners in that it is increasing their costs of heating their homes by approximately 30 per cent. I am wondering what justification the Minister of Finance can give to this House and to the Canadian people for leaving this program in place, especially the excise tax on home heating oil and natural gas.


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I think it is well known to the hon. member that the increases Canadian consumers must face in the field of energy are the result of energy agreements which have been reached with the producing provinces. As I recollect, he would have been one of the hon. members supporting Premier Lougheed in getting the maximum possible price for his natural resource.


INQUIRY RESPECTING GOVERNMENT ACTION
Thomas Gordon Towers: Madam Speaker, the Minister of Finance is misleading the House-


Miss MacDonald:: It would not be the first time.


Thomas Gordon Towers: -because at the present time one third of the cost of natural gas to the consumers in western Canada is in the form of an excise tax going strictly to the federal coffers. The minister cannot get around that.
The Prime Minister has made the statement that we must keep costs down. This tax is increasing costs because the producers all over Canada can turn down the thermostats in their homes, but they cannot turn them down in their poultry or hog barns. Therefore it is costing thousands of dollars in some of these operations, adding to the cost of production, and
is thereby inflationary. What is the Minister of Finance going to do about it?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, I will not announce a tax change today.


Erik Nielsen: Next week.


LABOUR CONDITIONS
Mr. S. J. Korchinski (Mackenzie):: Madam Speaker, I also have a question for the Minister of Finance. As a result of his budgetary pronouncements and restrictive policies to curtail business activities throughout the country, companies such as Hudson Bay Mining and Smelting, which operated uninterrupted for over half a century until this Minister of Finance came along, are now finding themselves in the position where they must provide extended holidays for their employees, with the result that these unemployed people might not be able to qualify for unemployment insurance. What hope is the minister offering to these potentially unemployed and their companies that they will be able to continue their operations without interruption?


Allan Joseph MacEachen: Madam Speaker, the policy of the government is to re-establish the conditions for resumed economic growth and greater job creation-


Some hon. Members:: When?


Allan Joseph MacEachen: -in the country as a result of bringing down inflation, which is the foremost problem facing the country.


EFFECT ON SUPPORTERS OF NEW DEMOCRATIC PARTY
Stanley James Korchinski: Madam Speaker, since it was the New Democratic Party which drafted the motion helping to put the minister in the position where he is sitting in government, and since it was NDP miners, in many instances, who supported the NDP cause in some of those areas, is this the way the minister will pay back those NDP voters, by turning them out on the streets as unemployed?


Some hon. Members:: Oh, oh!


Erik Nielsen: Come on, Allan.


Mr. Epp:: He did not answer the question.
March 29, 1982


FINANCE
Mr. Don Blenkarn (Mississauga South):: Madam Speaker, my question is also directed to the Minister of Finance. The minister will know that uncertainty is one of the major causes which prevent businesses from expanding and hiring people. The minister will know that his budget is now well over four months old or stale.


Walter David Baker: Very uncertain, too.


Donald Alex Blenkarn: He promised on February 23, in reply to a question from me, that he would be tabling material concerning the sales tax, "shortly" he said, or "soon" he said. It is now March 29, and well over a month has passed. We have not heard a thing from the minister. I was wondering if the minister today could tell us what are going to be the rules with respect to the sales tax. When is the implementation date, and when can businesses find out what is intended with respect to changes in the sales tax?


Allan Joseph MacEachen: Madam Speaker, I am glad to tell the hon. member that it is my intention to make public not only the draft legislation that would bring into effect the changes in the sales tax, but also to provide the narrative explanation of all the changes, so that it will be possible for all those affected to make their views known before permanent or final legislation is brought into effect. I have already cleared the material, and as soon as it can be translated and printed it will be made available to the House of Commons.


REQUEST THAT SPECIAL COMMITTEE BE APPOINTED
Donald Alex Blenkarn: Is it the minister's intention to have a special House of Commons committee to study the sales tax implications, so that witnesses can be heard by that special committee of the House before the final terms of the changes to the sales tax are determined and presented to the House in legislation?


Allan Joseph MacEachen: Madam Speaker, it is a suggestion that could be considered. The hon. member knows that when the legislation is put in final form, following representations, it will come before Parliament. He is now suggesting that it go before a committee twice, in the form of draft legislation and later in final form. That is something we could consider if, indeed, it would facilitate the passage of the legislation.
Oral Questions CORPORATE AFFAIRS


INVESTIGATION OF CONSOLIDATED COMPUTERS INC.
Hon. Elmer M. MacKay (Central Nova):: Madam Speaker, my question is directed to the Minister of Justice. Recent news of the federal justice investigation into the Consolidated Computers debacle, which cost the Canadian taxpayers over $100 million, prompts me to ask the minister for further information about the nature of this investigation. Is it a departmental inquiry under the Inquiries Act? Could the minister give the House some information about the terms of reference and other details of this matter?


Joseph Jacques Jean Chrétien: Madam Speaker, I am not in a position to reply to that question today. I will inquire about the matter and expect to reply to the question tomorrow.


Charles Joseph Clark: It did not come up in the House of Lords.


ROLE OF ROYAL CANADIAN MOUNTED POLICE
Elmer MacIntosh MacKay: Madam Speaker, I would tell the minister that there was the so-called Anderson report from the Treasury Board which alleged conflict of interest, a cover-up by government officials, which, I believe, prompted the department to announce the investigation. I wonder if he could tell me tomorrow as well whether the fraud squad of the RCMP has been briefed on this matter and whether their assistance is being requested as well.


Joseph Jacques Jean Chrétien: I will look into the matter and try to give full information tomorrow.


AUTOMOTIVE INDUSTRY
Mr. Peter Lang (Kitchener):: Madam Speaker, my question is directed to the Minister of State for International Trade. Given that the Canadian automobile industry is just as efficient as the United States automobile industry, will the minister inform the House what efforts he made on his recent trip to Japan to encourage the Japanese to purchase more Canadian auto parts and, just as important, to solicit the Japanese to locate one of their newly-proposed auto plants in Canada?


Hon. Ed Lumley (Minister of State (International Trade)):: Madam Speaker, one of the most important elements of our trip to Japan was to meet with the Japanese Automobile Manufacturers' Association, to express our displeasure with the fact that they have not purchased enough Canadian auto parts or made arrangements to have Canadian content included. We talked to the President of Nissan and to the President of Toyota, with respect to those plants which they are planning to open in North America, to have them in Canada rather than
15900

March 29, 1982
Oral Questions
in the United States. This week we have a mission of 35 to 40 Japanese businessmen and government officials coming to Canada, talking to persons in the provinces and to the industry with respect to the broad spectrum of investment opportunities for Japanese businessmen here in Canada.


CANADIAN ARMED FORCES
Mr. Terry Sargeant (Selkirk-Interlake):: Madam Speaker, my question is directed to the Minister of National Defence. He will likely know that last week in Canadian Forces Base, Winnipeg, Rhonda Gordon, an Armed Forces private for one year, and a single mother, felt compelled to leave the Forces because she was unable to live and keep her five-year-old daughter on take home pay of only $180 twice a month. The best advice a base career officer could give her was to apply for welfare. Would the minister please tell us if the Armed Forces have any special provision for such single parents, or is it standard practice to recommend welfare for underpaid soldiers?


An hon. Member:: Shame!


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, we try to take care of all these particular cases like the one mentioned by the hon. member. One has to understand that when you enlist in the Armed Forces you are well aware beforehand of the current conditions, and of the conditions you can expect following enlistment. In this unfortunate case the lady concerned knew very well the conditions of enlistment and the current pay levels, and whatever we could do for her child would be done through welfare. There is nothing I can do more than that, beyond telling her that she should have known all this before she enlisted in the Armed Forces.
With regard to the hon. member's point about the pay of the Armed Forces, I think that as a rule they are the best paid armed forces in the world, when compared to any other country. They will be even better paid in the next few weeks because there will be another pay increase soon.


REQUEST THAT PAY BE INCREASED
Terence James (Terry) Sargeant: Madam Speaker, this young woman apparently joined the forces because she believed the advertisement which said "There Is No Life Like It."


Some hon. Members:: Oh, oh!


Terence James (Terry) Sargeant: Unfortunately it is not an isolated case. Could the minister tell us why, after hearing for some years now of soldiers at bases in Calgary, Lahr, and now in Winnipeg, who cannot make ends meet, he has done virtually nothing to help them? Will the minister make a commitment
to do better than the minuscule 3 per cent raise of last November, especially in light of the 19 per cent raise to his budget for next year? If he would do that, maybe there really would be "no life like it."


J. Gilles Lamontagne: Madam Speaker, in reply to that question, the great majority of the members of the Armed Forces will agree that there is no life like it in the world. We train them, and we provide them with a lot of advantages that they would not have in private life. At this present moment, with the economic situation in the country, all members of the armed services are very happy to have the security that they do have in the Armed Forces. Last year we gave them approximately a 12 per cent to 13 per cent increase in pay, and this year I do hope that we will be able to do the same thing, so I think they are very lucky to be in the Armed Forces.


COMMUNICATIONS
Mr. J. R. Ellis (Prince Edward-Hastings):: Madam Speaker, my question is directed to the Minister of Communications who recently increased the annual licence for aircraft radio from $20 to $40, without the courtesy that is usually provided of consulting with the industry. Will the minister tell us why he chose this particular time to put that increase into effect and what, if any, services he intends to provide for the extra fee?


Hon. Francis Fox (Minister of Communications):: Madam Speaker, the fees for most radio licences in the country are extremely low. As a matter of fact they are far below the cost that is incurred in administering the licence fees. The Department of Communications, under my direction, will be going toward a cost recovery mechanism in the whole field of the management of the radio sector, which is used to great advantage in many cases by private entrepreneurs for their own profit. It is only fair that such people would pay part of the cost involved in managing this sector.


REQUEST FOR CONSULTATION WITH RADIO USERS
John Raymond Ellis: Madam Speaker, my brief supplementary question is to the Minister of Transport, who wears many hats. I ask him today, in his role as a friend of the general aviation industry, to intervene with the Minister of Communications. I know that if this increase were put in by the Department of Transport there would have been consultation. The minister also knows there may well be a safety hazard here because these pilots may not use radio because of the increased fee. I wonder if the minister can do anything about this $20 increase?


Francis Fox: These are $20,000 aircraft.
March 29, 1982


John Raymond Ellis: Madam Speaker, we are not talking about $20,000 aircraft; we are talking about little fellows who fly ordinary aircraft off a farmer's field. I wonder if the Minister of Transport would intervene here, have the usual courtesy shown that is applied to all matters with regard to general aviation, and have some consultation before this is put into place.


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, I must apologize. I was not listening to that question. I was recovering from the shock of not being the object of the first question. If the hon. gentleman would like to repeat his question, I will try to answer.


Madam Speaker:: The hon. member for Provencher.


POLITICAL PARTIES
Arthur Jacob (Jake) Epp: Madam Speaker, my question is for the Minister of Justice in his role as the Attorney General. It is on a sensitive matter which has had pulic airing and I believe it should be asked of the minister now that he is back. It is the question of the attorney general's past membership in the Communist Party of Canada. It has been publicly confirmed by him.
I would like to ask the minister whether there has been any security checks performed, or whether there is a regular exahange of classified information with that minister?


An hon. Member:: The Attorney General of Manitoba, you mean.


Arthur Jacob (Jake) Epp: That is right, the Attorney General of Manitoba.


Some hon. Members:: Oh, oh!


An hon. Member:: Not you, Jean.


Joseph Jacques Jean Chrétien: Madam Speaker, with a name like mine, it would be difficult. I do not know this information. It is completely new to me, but I will check. I can assure the hon. member that I have never been a member of the Communist Party.


CORPORATE AFFAIRS
Mr. Chris Speyer (Cambridge):: Madam Speaker, my question is for the Attorney General of Canada and it concerns
Oral Questions
the uranium cartel and the prosecution which has been initiated by him as Attorney General of Canada. As the minister understands, Uranium Canada has moved in the Supreme Court of Ontario for a writ of prohibition, and the assertion of Uranium Canada is that it is, for operational and practical purposes, and I quote from its brief, "the Department of Energy, Mines and Resources and furthermore, that all acts performed were done at the specific direction of the Crown."
I will not ask anything with respect to the litigation which has been initiated, but I want to ask the Attorney General of Canada whether or not prior to the initiation of the prosecution he was made aware by his law officers that Crown immunity would be invoked in this particular case by the Crown corporation saying they were acting within the scope of their agency?


Joseph Jacques Jean Chrétien: Madam Speaker, I am not aware of the problem, so that answers the hon. member's question. In any case, the matter is before the courts and it is up to them to decide. To the question whether I was personally informed of this defence, the answer is: no.


Chris Speyer: Madam Speaker, I am not asking the Attorney General whether or not he would involve himself in anything before the courts. I am asking him a question as to what his instructions are, but I give him notice with respect to my initial question.


INSTRUCTIONS TO COUNSEL FOR URANIUM CANADA
Chris Speyer: Madam Speaker, my supplementary question is to the Minister of Energy, Mines and Resources. In this litigation which I have just mentioned, who is giving directions to Uranium Canada? Who is the person instructing counsel to make the submissions being made in the Supreme Court of Ontario today?


Marc Lalonde: Madam Speaker, Uranium Canada is in court at the present time. Uranium Canada is represented by counsel, who are defending the corporation as is their duty. To my knowledge, no one is instructing counsel except Uranium Canada, in its capacity of Crown corporation. I can assure the hon. member that I have given no instructions in this respect and that I am letting the judicial process take its course.

March 29, 1982
Oral Questions


CANADA POST CORPORATION
Mr. Joe Reid (St. Catharines):: Madam Speaker, my question is for the minister responsible for Canada Post Corporation. It is a non-partisan question.


Some hon. Members:: Oh, oh!


Joseph Lloyd Reid: For 100 years rowing clubs and related organizations have been bringing credit to Canada for the sport of rowing. In St. Catharines this year they will come together for the 100th regatta of the Royal Canadian Henley. Will the minister responsible for Canada Post Corporation recognize this outstanding example of sportsmanship in Canada with the issuance of a commemorative stamp?


Some hon. Members:: Hear, hear!


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Madam Speaker, I cannot give a definite reply to this question today. I would like to remind the House that a number of members on this side have already made representations to the Canada Post Corporation, urging it to issue a stamp on that occasion. The president of the national Liberal caucus has been bringing up the subject each week, and I hope to be in a position to reply within the next few days.


REQUEST FOR EARLY DECISION
Joseph Lloyd Reid: Madam Speaker, my supplementary question relates to, "I cannot give an answer today." As the minister has pointed out, he has received representations from rowing clubs all across the country, as well as from a great many other sources. This has been going on for some time. The regatta is in the last week of July and the beginning of August this year. If it is to be of any use, a decision must be made by tomorrow.


André Ouellet: Madam Speaker, I expect to be able to satisfy the hon. member as well as the hon. member for Welland with a statement by the beginning of next week.


NATIONAL ENERGY PROGRAM
Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. The minister must recognize that the National
Energy Program and the agreement with Alberta assumed a rising world oil price. It now seems clear that world oil prices are falling. The whole program may be going out the window. The Minister is in the sad position where he is hosing the Canadian consumer. Will the minister renegotiate the agreements with Alberta and the other provinces so that the Canadian consumer will not get hosed?


Marc Lalonde: Madam Speaker, I regret to say that the hon. member, in spite of all his honest efforts, does not understand the energy situation any more now than he understood it two years ago. The energy agreements with the province of Alberta, the province of Saskatchewan, which he knows pretty well politically, and the province of British Columbia, which I suspect he knows very well politically, indicate quite clearly that Canadians will never have to pay for the old conventional oil discovered before 1981-will never have to pay more than 75 per cent of the international price.
If our prices are going up at the present time, it just shows that our prices are still very much below international prices, and in some cases you have the situation where provincial taxes have been increased significantly-in the province of Quebec, for instance-over the last while, which has added to the cost. But in terms of a barrel of oil, Canadians today are still paying a lot less for their oil-


Harvie Andre: How about the taxes?


Marc Lalonde: -than if they were to buy that oil on the international market.


Harvie Andre: At least blush.


Marc Lalonde: The best evidence is that it costs approximately $23.50 or $26 to buy conventional oil discovered before 1981, and it costs about $43 to import oil into Montreal. We are still getting oil in Canada at a much cheaper price than if we were to be paying the international price.


Erik Nielsen: Rubbish.


Marc Lalonde: As I indicated, the ceiling is 75 per cent of the international price.


CORPORATE AFFAIRS
Charles Joseph Clark: Madam Speaker, I have a supplementary question to the Minister of Energy, Mines and Resources on the matter raised by my colleague from Cambridge. It relates to the uranium cartel and the statement by Uranium Canada, that "the Minister of Energy, Mines and Resources and the governor in council have
March 29, 1982

the directing mind and will of Uranium Canada." The minister has just said that he did not give any instruction himself to Uranium Canada. Will the minister tell us who in the government did give instructions to Uranium Canada?


Marc Lalonde: Madam Speaker, as far as I know there were no instructions given to Uranium Canada. Uranium Canada has been prosecuted with other companies and is defending itself through the best counsel it can recruit, 1 suppose. Those lawyers are arguing the case for Uranium Canada as they would for any clients they would represent; that is, using all the arguments they can to defend their case. As far as I know, no instructions were given to Uranium Canada.


CLAIM OF CROWN PRIVILEGE
Charles Joseph Clark: Madam Speaker, would the Minister of Energy, Mines and Resources tell the House of Commons on whose advice Uranium Canada is claiming Crown privilege?


Marc Lalonde: Madam Speaker, most probably on the advice of its lawyers. It is so obvious that I cannot understand why the Right Hon. Leader of the Opposition does not understand that.


INSTRUCTIONS TO COUNSEL
Charles Joseph Clark: Madam Speaker, will the Minister of Energy, Mines and Resources tell the House of Commons who is instructing the lawyers for Uranium Canada to claim Crown immunity in this case?


Marc Lalonde: Madam Speaker, the Leader of the Opposition has asked me to speculate.


An hon. Member:: You are responsible for that.


Marc Lalonde: I would say that most likely the lawyers for Uranium Canada are giving advice to the board of directors of Uranium Canada, and the directors of Uranium Canada are acting on the advice of their lawyers. That is the way these things operate in any trial. I regret my right hon. friend never finished his law course.


Some hon. Members:: Oh, oh!


INQUIRY RESPECTING DIRECTION OF URANIUM CANADA
Charles Joseph Clark: Madam Speaker, are the Minister of Energy, Mines and Resources and the governor in council-the Prime Minister and his friends- acting as the directing mind and will of Uranium Canada as Uranium Canada has claimed in its submission before the Supreme Court of Ontario?
Order Paper Questions


Marc Lalonde: Madam Speaker, Uranium Canada is a Crown corporation. It is acting independently as a Crown corporation. My right hon. friend is referring to the legal status of Uranium Canada, and the legal status is the same for Uranium Canada as it is for any Crown corporation.
I will be very happy to give free advice to my right hon. friend after Question Period if he raises some legal issues.



ROUTINE PROCEEDINGS


[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. 3,570, 3,675, 4,043, 4,047, 4,050 and 4,080.


Mr. McKenzie: Did the government enter into negotiations with other nations and their major airlines regarding the utilization of the Winnipeg International Airport as either a stopover point or a major departure centre on the so-called "polar route" to Europe and, if so, at what location and on what date were the meetings held and were any agreements reached?


Mr. Jesse P. Flis (Parliamentary Secretary to Minister of Transport):: Yes. In the revised bilateral air agreement concluded between Canada and the United Kingdom in April, 1981, following agreement reached at meetings held in Ottawa, September, 1980, Winnipeg is named both as a point of departure for Canadian airline service to Britain and as a point of destination for British Airways service to Canada.
Also, in Canada's bilateral air agreement with Mexico, as amended in 1971, following agreement reached at meetings held in Mexico City, November, 1970, Winnipeg is included in the route schedule as a point of departure for Canadian airline service to Guadalajara, Mexico City and Acapulco. Winnipeg International Airport was used as a refuelling stop on the "polar route" in the 1950s when some trans-atlantic carriers flew between Los Angeles and Europe over Canada with turboprop aircraft.


Mr. Cossitt: In each of the past three years, how many (a) applications (b) inquiries for immigration to Canada were received by the Canadian Embassy in Moscow and how many visas were granted for (i) landed immigrant status (ii) visits to Canada?

March 29, 1982
Order Paper Questions


Mark R. MacGuigan: (a) Tabulated below is the immigration statistical information requested from the Canadian Embassy in Moscow:
(i)	Immigration applications received
cases/(persons)
Immigration visa authorizations (visas & promise of visas)
Departures approved by U.S.S.R. Departures refused by U.S.S.R.
(ii)	Visitor visa applications received Visitor visas issued (total)
Visitor visas issued for private visits-personal
(included in (total)).
1979	1980	1981213/(478)	236/(469)	171/(400)473	109	58162	121	61129	99	307,548	5,418	6,6144,874	3,365	4,2841.682	1,085	1,004
(b) The Canadian Embassy in Moscow does not record inquiries by subject matter. For statistical purposes, applications received are treated as immigration inquiries.


Mr. Cossitt: 1.	With reference to the answer to question No. 3,546, concerning the number of contracts for gloves given by the government to the Louis Fischl Glove Company Limited of Prescott, Ontario, what percentage of the gloves were actually purchased from countries in eastern Europe, brought to Canada and relabelled with the company's label?
2.	Is it government policy to "buy Canadian" and, if so, what are all the reasons justifying the purchase of gloves manufactured in communist countries rather than gloves made by Canadian working people?


Hon.   J.-J. Blais@Minister of Supply and Services: None of the gloves listed in response to question No. 3,546 were manufactured in eastern Europe.
It is the government policy to "buy Canadian". As a result of this policy, over 80 per cent by value of DSS contracts are awarded to Canadian-based firms. This is consistent with Canada's international obligation such as the GATT government procurement agreement. In addition, the government has decided that certain products such as textiles, clothing and ships should be bought only in Canada.


Mr. Cossitt: Is the placing of the overseas services of the Department of Employment and Immigration under the jurisdiction of the Department of External Affairs now in effect and are there any other reorganization plans contemplated by the government for the Department of Employment and Immigration and, if so, what are they?


David P. Smith: The immigration foreign service of the Canada Employment and Immigration Commission was transferred to the Department of External Affairs on April 1,
1981. The organization of government, including the internal organization of individual departments, is regularly reviewed with a view to increasing the effectiveness of government policy-making and administration; however, there are at present no plans to transfer additional units from the Canada Employment and Immigration Commission to another part of the government.


Mr. MacKay: 1.	Were vehicles leased for the benefit of management or other employees of the Canada Mortgage and Housing Corporation and, if so, how many?
2.	How many employees, including middle and upper management, received benefits directly or indirectly pursuant to the leasing or other arrangements regarding automobiles and, in each case, what was his/her name and what were all the details?


Hon. Paul J. Cosgrove (Minister of Public Works):: I am
informed by Canada Mortgage and Housing Corporation as follows:
1.	Yes, eight.
2.	Nine R. V. Hession, president
R. J. Boivin, senior vice-president-program operations
R. T. Adamson, vice-president-policy development and research
D.	W. Knight, vice-president-finance
P. S. Crombie, vice-president-insurance operations
E.	A. Flichel, vice-president-management information systems
N. E. Hallendy, vice-president-organization development
G. D. Anderson, vice-president-field operations L. I. Birtz, general counsel
One vehicle for the president is CMHC owned. Vehicles for the senior vice-president, vice-presidents and general counsel are on a three-year lease arrangement.
The provision of vehicles to senior CMHC management is treated as a benefit taxable to the employee under the terms and conditions of the Income Tax Act and Revenue Canada regulations.


Mr. Anguish: 1.	Who is the minister or who are the ministers responsible for the Western Canada Development Fund?
2.	(a) When the fund was first announced, was it in the amount of $4 billion (b) what amount is allocated to the fund at this time?
3.	Were the allocations under the fund reflected in the (a) 1981-82 (b) 198283 estimates?


Hon. Pierre Bussieres (Minister of State (Finance)):: 1. No
single minister is responsible for the Western Development
March 29, 1982

Fund. The fund is split between the economic development envelope and the social affairs envelope, and the ministers on the cabinet committees responsible for these envelopes are responsible for expenditures from the fund.
2.	(a) The Western Development Fund was first announced in the budget of October 28, 1980 in the amount of $4 billion; $2 billion was allocated to the period through Fiscal year 198384.
(b) As stated in the November 12, 1981, "Budget in More Detail" (page 20), a review of the programs proposed in the October, 1980 budget and the larger sums now expected to flow directly to producing provinces as a result of new federal-provincial energy agreements have led to a re-profiling and reallocation of the Western Development Fund. At the present time, $1,865 million is allocated to the fund to the end of 1985-86. Many of the programs represented by this allocation will no doubt continue beyond 1985-86. No change has been made in the original total allocation.
3.	(a) The allocation under the fund was not explicitly identified by program in the 1981-82 main estimates. However, it was included as part of the envelope reserves category in Table 4.1 of Part I of the 1981-82 estimates.
(b) Similarly, the 1982-83 main estimates do not explicitly identify the Western Development Fund by program. Again, it is included as part of the envelope reserves category in Table 4.1 of Part I of the 1982-83 estimates.


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


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


Madam Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, March 26, consideration of the motion of Mr. MacEachen that Bill C-97, to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, and to provide for payments to certain provinces, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. David Weatherhead (Scarborough West):: Madam Speaker, in my remarks on Bill C-97, last Friday I discussed some of the highlights of the bill itself and also the role of the operation of the parliamentary task force on federal-provincial fiscal arrangements which sat last spring and summer studying
Federal Transfers to Provinces
this very important issue. In the next few minutes I would like to discuss some of the recommendations of the task force regarding health care and post-secondary education.
As previously mentioned, in his speech on this bill in the House on March 22, the Minister of Finance (Mr. MacEachen) stated that negotiations with respect to clarification of national standards for health care and efficient mechanisms for their maintenance should be worked out with the provinces by March 31, 1983, and that ways of implementing national objectives with respect to post-secondary education should be worked out with the provinces by March of 1984.
With respect to the health care system the task force believes that the achievement of comprehensive, publicly-funded hospital, medical and extended health care is a major accomplishment of Canadian society which represents the end of a long struggle for the realization of an ideal. It concluded that there is an overriding national interest in the operation of health insurance plans and in the effectiveness of health care delivery and that the proper role for the federal government is the formulation, monitoring and enforcement of conditions on its financial support of provincial programs.
The task force also concluded that in aggregate and in present circumstances federal government funding for health care services in Canada appears to be generally adequate. It recommended that after consultation with the provincial governments the Minister of National Health and Welfare (Miss Begin) should undertake a consolidation of the existing legislation in order to establish clear program conditions supported by explicit criteria against which satisfaction of those program conditions can be monitored. Thus, in case federal-provincial negotiations fail to achieve agreement on program conditions, the task force would expect provisions for some withholding of federal financial support to provincial plans which do not meet fully those conditions as interpreted in the report.
The task force also concluded that retention of the present block funding arrangement, with stricter conditions, monitoring and enforcement mechanisms, would provide an effective mechanism to ensure compliance with national program conditions. We recommend for this purpose the establishment of operational program criteria, perhaps monitored by a parliamentary committee or a national health council, with federal payments on condition that there be compliance with program criteria-but conditional in a flexible manner, that is, with a graduated holdback of federal transfers related to the effect of program conditions.
In addition, we concluded that hospital and medical care premiums constitute a regressive form of taxation and that their use for financing a service as basic as health care is regrettable. We recommended that a clear definition and measurement of universality of coverage be developed to ensure that the principle of universality is respected. While recognizing the right of provincial governments to levy premiums, the task force agreed that prior payment of premiums

March 29, 1982
Federal Transfers to Provinces
should not be a precondition of entitlement to treatment. We agreed that for reasons of both principle and practicality user fees for hospitals should be discouraged.
All the above recommendations, agreements and conclusions with respect to our health care system were the unanimous opinion of our seven-man task force. The remaining recommendations were the opinion of the majority of the task force and were not unanimous. The majority recommended that doctors who bill a provincial medical plan directly or whose patients are reimbursed by the plan not be allowed to charge fees in excess of those permitted under the plan's approved fee schedule. The majority concurred in the recommendations of Mr. Justice Emmett Hall that the Medical Care Act should be revised to provide that extra billing by physicians inhibits reasonable access to services and is contrary to the intents and purposes of the act and that the provinces should develop mechanisms to ensure reasonable compensation to physicians.
The majority also agreed with Mr. Justice Hall's proposal that if negotiations between a province and physicians fail, then the issues should be decided by binding arbitration with a board of three persons: an independent chairperson to be named by the chief justice of the province, one nominee from the medical profession and one from the provincial government. The majority also recommended that following federal-provincial negotiations any plan which does not meet fully all the above criteria should be ineligible for full federal financial support under EPF.
There are other important recommendations of the task force with respect to the health care system, including emphasis on the broad health field concept and the community-based health care philosophy, which are also set out in our report.
With respect to the transfer of Government of Canada funds for post-secondary education, the task force was unanimous in its recommendations. We recognized the need for general base funding for the post-secondary sector to permit adults of all ages-not just those in the traditional 18 to 24 age group-to pursue spiritual and intellectual goals, to polish their critical faculties and to expand their general base of knowledge on which more specific skills may be built. Appreciating that education is under provincial jurisdiction, the task force believed that there should be an effective consultation mechanism to ensure concerted effort by all concerned to establish and obtain goals that are of mutual interest to both orders of government. It recommended that, in line with the 1976 first ministers' commitment, the responsible federal minister or ministers proceed on an urgent basis to conduct with the council of ministers of education on matters of concern to both orders of government in the field of higher education.
The task force suggested that early attention be given to the definition of "purposes in post-secondary education" and that priority consideration be given to the need for more highly qualified manpower in the 1980s, and for the confirmation of existing commitments to student mobility and equality of access to post-secondary education for Canadians. We recommended that the current block-funded basis be continued, at
least for the time being, but that the post-secondary education program be separate from the future support of health programs.
We recommended that there should be federal-provincial discussions for improving assistance to needy students, described in the report of the task force on student assistance, and we agreed that there should be more public information made available on general federal government support to the provinces for post-secondary education.
The task force also unanimously recommended that the federal minister responsible report annually to Parliament with respect to federal transfers to each province for higher education, other federal support to post-secondary education, the effectiveness of these programs in moving toward the country's economic and other goals, the results of consultations with the council of provincial ministers of education about the definition of "national purposes to be served by higher education", and the means by which these objectives will be achieved. Additional recommendations can be found in our report with respect to post-secondary education.
In conclusion, Mr. Speaker, I wish to state that I strongly support Bill C-97 for the reasons mentioned in the first part of my comments last Friday afternoon. I am pleased that the more disadvantaged parts of our great country will continue to be dealt with very fairly by greatly increased equalization payments being made to them, and that the federal government's commitment to health care and post-secondary education also continues to be strongly shown. As mentioned before, these Government of Canada payments for equalization, health care and post-secondary education will amount to about $105 billion in cash and tax points to the provinces over the next five years and, as also mentioned, our task force wanted to make sure that there was full accountability to the people of Canada for this $105 billion that will be flowing directly to the provinces.
Our proposals and recommendations with respect to our health care and post-secondary education systems, some of which I have enumerated above, were developed to try to ensure this greater accountability. I therefore hope and trust that, during federal-provincial negotiations with respect to health care and post-secondary education over the next one and two years, our comments in our report and our recommendations with respect to these two most important fields will be carefully considered. I also hope and trust that the result will be stronger and more effective health care and post-secondary education systems that will be much more accountable than now to the people of Canada.


Some hon. Members:: Hear, hear!


Dave Nickerson: Mr. Speaker, I have looked forward to speaking very briefly on this important subject of federal-provincial fiscal transfers. Other speakers have said that it is this type of system which holds confederation together in Canada. I am sure there are many elements of truth in that statement. Without this type of system, each
March 29, 1982

province would be on its own. Fiscally, there would be very little to bring us all together as one country. It is only right that the more wealthy parts of the nation should in some way help to subsidize those parts that are not as well off and that find themselves in conditions below the average. It is an integral part of the Canadian system as we know it.
I have one comment to make about this, however. I do not think that fiscal transfers should have been entrenched in the Constitution. It makes sense to me to have them but surely we can achieve them under ordinary acts of Parliament. I do not think it was necessary to entrench in the Constitution of Canada the provisions for federal-provincial fiscal transfers. However, Mr. Speaker, that argument is over now, and when the new Constitution arrives we will find this provision entrenched in it.
In the long run it will probably work to our disadvantage as it will be maintained that the system we have today should remain forever. I hope that at some point we will find that it is not necessary to maintain this system. It has worked reasonably well for us, but because we have put it in the Constitution we will find it difficult to change. These administrative arrangements can best be dealt with by ordinary statute and legislation, in my opinion.
I should like to compliment the parliamentary Task Force on Federal-Provincial Fiscal Arrangements which was put together at the request of Parliament. Certain changes were proposed by the federal government but it was Parliament that decided they should not be enacted until they had been carefully considered. Good work was done by members of all parties on that task force. In particular, I think of the work done by the hon. member for Mississauga South (Mr. Blen-karn) and the hon. member for Lethbridge-Foothills (Mr. Thacker), which was exemplary. Of course, good work was also done by all members of the task force.
One of the good things that came out of the task force study, in an area in which I took a great deal of interest, was that the task force took the time to visit not only the provinces but also the two territories. The fiscal relationships of the territories with the federal government are just as important as those with the provinces. In fact, in a way they are more so, because the territories are in the process of development and change.
Some time ago the Hon. C. M. Drury devoted two years of study and attention to the fiscal relationships that exist between the Northwest Territories and the Government of Canada. He was the Prime Minister's special representative on constitutional development in the Northwest Territories and a lot of his study was devoted to the financial relationships that exist between the territorial and the federal governments. I should like to quote from Mr. Drury's report on this subject. He came to the following conclusion in paragraph 6.6, at page 124 of his report:
New arrangements should provide for the calculation of an annual general purpose grant at a non-discretionary level, as an alternative to the general federal subsidies for operating and capital costs. Except in extraordinary circumstances, the onus should be on the territorial government to raise any additional funds required through taxation or borrowing. These arrangements should also be
Federal Transfers to Provinces
effective for longer than the present one-year duration of federal-territorial financial agreements. To support any necessary borrowings or unexpected year-to-year volatility in territorial tax revenues, the revenue stabilization program should be extended to the NWT

I think that is an important observation. Most provinces can take part in the revenue stabilization program. From time to time when provincial revenues fluctuate widely, the program would allow the ministers of finance of all provinces to plan carefully knowing that there will not be wide variations in the amount of money that accrues to the Consolidated Revenue Fund in their particular province. It is a good program that is operated by the federal government. In my opinion and in the opinion of Mr. Drury, it should be extended to the territories and I hope that the Minister of Finance (Mr. MacEachen) will see fit to do so at some time.
Mr. Drury also went on to say:
-and the governor in council should initially retain the power to approve proposed GNWT borrowings. However, this latter power should rarely be exercised as a veto. Its purpose would be to increase the credit rating of the GNWT as a preferred borrower.
I think that is a step in the right direction. Most provinces use their capacity to borrow on financial markets, both in Canada and abroad, for good provincial purposes. For instance, we can look at provincial hydro authorities, one of the largest borrowers. It would be a step toward normal provincial-type responsibility in the territories if they were allowed to exercise their authority under the Northwest Territories Act to borrow funds on the open market, instead of always from the Government of Canada. They would have to exercise their responsibilities well and in a manner which would enable them over a period of time to obtain the credit rating to which the special representative of the Prime Minister (Mr. Trudeau) referred. It is a process of learning how to manage their fiscal affairs.
Mr. Drury went on to say:
A more predictable level of general purpose grant would permit the executive member to anticipate additional revenue needs more effectively and to take the steps necessary to raise those revenues in a timely and responsible way. The level of federal financial support would become a "given" revenue item in the GNWT budget calculations rather than a residual supplementary item to balance the budget.
This is important. At the present time one must find out how much taxation one will receive from income tax, corporate taxes, the sale of licences, liquor profits and everything else. Then one must figure out the necessary expenditures, for example, how much it will cost to operate schools and hospitals, fill in potholes in the roads and everything else. Then the federal is asked to make up the difference. In my opinion it is unfair to both territorial authorities and to the federal government for the federal government to be always in the position of being asked to give as much as possible, and then a little finagling goes on. It would be better if some kind of formula arrangement could be made, as is the case with the provinces, wherein the territories could anticipate in advance the funding

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Federal Transfers to Provinces
which will come to them. At the same time the federal government would know how much money it would have to spend. We would get rid of the dog fights which occur every year when budgets are drawn up.
Mr. Drury continued:
An important measure of autonomy would be permitted that is not now available to the executive and the council, since it would be their responsibility to meet residual GNWT revenue needs.
This is important. It would make the territories act in a responsible manner because they could not overspend and then expect the federal government to make up the deficit. They would have to keep their affairs in order. He went on to say:
Future federal financial support should reflect not only federal responsibilities for an evolving territorial government but also the genuine fiscal need of the GNWT, consistent with the principles underlying the federal equalization program. The aim should be for equitable treatment of all Canadians, regardless of whether they are under provincial or territorial jurisdiction.
This is another important point. In that area of Canada we want the same type of treatment as people who make the provinces their home. If there is an equalization formula or program which operates for the provinces of Canada, why cannot this be extended to the territories? I admit that at this time, because of limited revenues in the territories, there would be need for additional financial assistance from the Government of Canada. All we need is one or two medium-scaled resource developments and then the financial picture would be reversed. This would be to the advantage of the federal government for having partaken of a program such as this.
The final quotation from the Drury report is as follows:
Federal-GNWT agreements for transfers of federal responsibilities should be negotiated that provide predictable GNWT funding levels. Funding should be in accordance with general guidelines agreed to between the two governments, taking into account the reduced claim on federal finances as a consequence of the responsibility transferred.
Then the important part read:
Any federal financial saving earmarked for the GNWT should be transferred to the inner cabinet budgetary envelope for fiscal transfers to the provinces and be included in the estimates of the Department of Finance.
The great problem of the territories now is the subvention of the Government of Canada. It does not come out of the envelope to which the special representative of the Prime Minister referred. It comes out of the budget and is carried in the estimates of the Department of Indian Affairs and Northern Development. Anyone who has had anything to do with that department knows it is not a desirable situation. Transfers from the senior government to territorial governments should be carried in the same cabinet envelope as transfers to the provinces. It should be the responsibility of the Minister of Finance, not the responsibility of the Minister of Indian Affairs and Northern Development (Mr. Munro).
These things have been said many times in the past. Financial officials at the political level have come down from the Northwest Territories several times to make their case before committees of Parliament. The Minister of Finance came down about a year ago to speak on this very matter. When the parliamentary task force on federal-provincial fiscal arrangements visited the Yukon and the Northwest Territories, it was told very much the same thing. I am pleased that members of the task force listened carefully to what the two governments
had to say. Members went out of their way to discuss some of the problems in the report they prepared for Parliament.
I should like to read one quotation from the report entitled "Fiscal federalism in Canada" to illustrate that these people listened to the special concerns of this important part of the nation:
The task force believes that although federal territorial government fiscal arrangements based on a longer-term formula approach might appear to lessen accountability to Parliament in the short run, in fact, it could be increased in the longer term by coupling the periodic renegotiation of the new arrangements with a requirement for a specific report to Parliament on their effectiveness. Accountability would be further enhanced if there were to be a requirement for this report to be referred to a parliamentary committee for review and assessment.
In some ways I wish the parliamentary task force might have gone further and looked carefully at some of the recommendations of Mr. Drury, but in general it listened and seemed to have come to the same conclusions as Mr. Drury. I am sure anyone who looked carefully over a period of time at the problems relating to territorial-federal financing would also come to very much the same conclusions.
As we develop these fiscal arrangements, we should keep in mind that at some point in time the territories will attain provincial status. When that happens, we would want to have the same system there as in the rest of Canada. We must continually work toward that goal. It is interesting to note that the Yukon and that part of the Northwest Territories I have the privilege to represent, which is basically below the tree line or the District of Mackenzie, at the present time are as financially self-sufficient as some of the Atlantic provinces. When you take into account the public revenue generated and the public expense, they balance as well there as they do, for instance, in the provinces of Newfoundland and Prince Edward Island. We would hold though that the resources of the territories are such that if you develop only a limited amount of the potential, the revenue situation would be entirely reversed. The federal government would get back all of its investment in the north plus very much more.
So much for that which might have been taken as something of a digression, but it is an important subject. I have spoken on it before and I will continue to do so in the future. It is an evolving situation. We cannot deal with it once and then lay it aside. It will evolve over a period of many years and I look forwarding to addressing the House and giving updates on the accomplishments that we have made from time to time.
I will now return to Bill C-97. I know that the Minister of Finance has come under severe criticism for presenting this bill in its present form. My personal view of the bill before us is that it may not be that bad. I hate to have to say that, being a member of Her Majesty's loyal opposition, but certainly the bill has some things to recommend it. Some provisions are not as good as they might have been, but in general I think we can understand why the government has to take something of a tough stance with respect to transfers to the provinces.
March 29, 1982

The government is in very bad financial shape. This situation goes back over many years. Because of the economic policies followed years ago, we are now caught up in a situation where we have to pay for past excesses. We have lived beyond our means for some time and now we have to face up to the consequences of that. The government has to be very careful how it spends its rather limited resources. Therefore, there is some understanding, at least on my part, why the government has had to take a tack that some people regard as rather tough.
If I were to levy one criticism at the way the government has handled this affair, it is the way in which it has lacked a degree of honesty. Had the government explained the matter the way I have just done, the public might have had some sympathy, although I doubt whether it would be possible to have much sympathy for the mistakes of the past which have brought us to the present situation.
One of the ways the government has tried to get around the cutbacks that it is making is to issue press releases. I am referring specifically to a press release dated March 19 from "the office of the Hon. Allan J. MacEachen, Minister of Finance". If you read the first page of this communique, Mr. Speaker, what do you think it does? It stresses that payments to the provinces over the next five years will be $105.5 billion compared to $61.3 billion in the previous five years.
That is true, but that increase is accounted for by inflation, inflation caused by the government itself. What we have to do is to look at the formula that was used to come up with these figures and see what would have happened had we applied the old formula to the next five-year period. If we do that, we find that what has taken place is a cutback amounting to some $5.7 billion. That is the difference between what will be paid under the new formula and what would have been paid under the old formula. If we read through the communique, it does not make any reference to the amount of cutback; for instance, how much less the provinces will receive than what they would have received before. The situation is presented in the most positive light. I guess I can understand why the government operates that way, but in all honesty, the government is not honest. This is not an honest way to present that information to the House or to the people of Canada.
If we look at some of the provisions of Bill C-97, and I will try to go through them fairly quickly one at a time in order to give you my impression of them, the first item is sources of revenue to be equalized. I understand within Bill C-97 that the packet of provincial revenue is taken into account when you calculate the revenue which is to be equalized. This has been expanded by the inclusion of five or six new categories of provincial revenue. In general, I would applaud this move, and I think that most people who have spoken on this bill would see the effect of that as being from beneficial to neutral. The inclusion of certain resource revenue leaves one in a position of sort of not knowing which way to go. When you take into account the wasting nature of assets, such as mineral and oil and gas deposits, there is a necessity to treat that type of revenue differently from revenue which accrues on a continuing basis. From an oil field you can produce great revenue-on occasion, but only for a limited period of years.
Federal Transfers to Provinces
Most governments when drawing revenue from resources such as I have just described-and I am thinking of the provinces of Saskatchewan and Alberta-have decided, and I agree with them, that a fair amount of that money has to be put into a fund, whether it is consolidated with a provincial consolidated revenue fund or set aside as a heritage fund, for reinvestment. It is capital rather than income. Therefore, when we start including resource-type revenue in provincial revenues used for the purpose of calculating payments to be made by the provinces-in other words, the equalization formula-we have to be very careful.
I would agree with the government that when it comes to the provincial component of the oil export charge, that is reasonable provincial revenue to use in the equalization formula. I do not think hon. members could argue that the oil export charge is a capital account item; it has to be treated as an income item. It is not a royalty as such but an export tax.
The five-province standard, which is to be used in place of the national average or the Ontario standard, would meet with my approval. It seems to make sense and I think it is one of the bill's provisions which has met with a reasonably wide degree of acceptance by members on all sides.
The payment floor and transitional guarantee also make sense and are non-controversial. The payment floor is not unlike the program which stabilizes provincial revenue. The provincial treasurer can forecast revenues and expenditures with a reasonable degree of accuracy. We would not want to see quantum leaps in the amount of moneys paid over because of the formula change, which would happen without some form of stabilization over the initial period. These things would also apply to the transitional guarantee and I am pleased to see provision for this in Bill C-97.
We then come to an item which may be a little bit more controversial, the payment ceiling. Everyone is agreed on the floor, but there is some difference of opinion with respect to the payment ceiling. The plan of the Minister of Finance is to tie maximum expenditures under Bill C-97 to increases in the GNP. As far as the minister is concerned, this is an effort to see that transfer payments do not escalate to ridiculously high levels. I know some of my colleagues might not agree with me, but in general I see the rationale for the payment ceiling. I think were I to be Minister of Finance, I would be inclined to do something similar. I know some provinces are going to squawk and scream over things like this, but because of the grave financial situation Canada finds itself in, it is in my opinion necessary to take some steps to see that expenditures just do not completely run away from us.
Federal government expenditures under C-97 will not be, by and large, blue book amounts. They will not come back to Parliament for approval; rather they will be statutory requirements for expenditures. It is therefore important that some cap be in place so that these matters do not get away from the

March 29, 1982
Federal Transfers to Provinces
control of government and Parliament. I think, therefore, it behooves Parliament to look seriously at the minister's proposals to put a lid on this type of expenditure.
I have something to say about the population adjustment recovery payments which might get me into hot water with, for instance, the Premier of Newfoundland. I understand it is the government's intention to forgive repayment of amounts paid because population estimates under the existing formula were in error. Although I can see the need for something to cushion the effect this repayment would have on the provinces, I do not think we should wipe them off the board completely. Instead, I would favour allowing them to repay these amounts over a period of, I suggest, ten years. In addition, payment would be either interest free or at a very low rate of interest. I do not like the idea that we should bail everyone out of the difficulties in which they find themselves, albeit through no fault of their own, as in the case of an error in population estimates agreed to by both levels of government.
This will get me into trouble with the Premier of Alberta, but I also disagree with what that province did with respect to the indebtedness of certain municipalities. They had run up a lot of debt and found themselves in difficulty as far as repayment was concerned, and the Alberta government stepped in and said: "Okay, we are going to get the municipalities off the hook and pay off their debts". If you continually do that with a government at any level, it is very much the same as doing it with an individual; there is no incentive to be responsible in the future. One province will say that its neighbour ran up all these debts, got themselves into trouble and the federal government bailed them out; why shouldn't they do the same? Why should they run their financial affairs in a responsible manner when someone is going to come along and bail them out if they do not? Therefore, I wish the government had taken a little tougher stand with respect to the population adjustment recovery payments.
I wonder who else I can alienate during the course of this debate!


An hon. Member:: Keep going, you are doing fine!


Dave Nickerson: We now come to another rather controversial item, Mr. Speaker, the termination of the revenue guarantee. This is probably the most controversial item in the proposal now before us. Most of the cutbacks, if you are supporting the provinces, or savings in expenditures if you look at it from the federal government's point of view, will come from the termination of the revenue guarantee. This will amount to many billions of dollars over the next five years, so it is certainly worthy of debate. In fact, most of the debate on C-97 has been on this very point, and we have had great speeches by members on all sides defending the health care system and pointing out that if you terminate the revenue guarantee you are going to do all kinds of terrible things to the health of Canadians. The same thing applies to education. I have listened carefully to some of these arguments, and I prefer to deal with the technical and non-controversial aspects; in that way I will not get myself into so much trouble.
Let us look for a moment at the history of the revenue guarantee provisions of the federal-provincial fiscal arrangements. I understand that this was introduced as a transitional measure in 1972. It was to expire in 1977. When 1977 came around, some of the old arguments were used again. In the enactments of that year, such as the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, they were again renewed. The underlying idea was good! Because the formula was to be changed, because of the transfer of tax points to the provinces and the reduction of certain federal government expenditures, provinces could not quite calculate the effect. They were afraid that there would be a decrease in the amount of available money for health care, post-secondary education and other worth-while purposes. It was something akin to the flow of payment and transitional guarantees included in the present bill. It was for that reason that the revenue guarantees were included in the legislation of 1972 and of 1977.
To put it briefly and succinctly, my own thinking on this matter is that a deal is a deal.


Flora Isabel MacDonald: Hear, hear!


Dave Nickerson: If the tax point transfer or the rate at which the Government of Canada expends funds for the provinces is not satisfactory after ten years, and if there is still a need for a revenue guarantee, then there was something wrong with the deal. We should not need the revenue guarantee in perpetuity. It was a transitional method, a transitional step. Ten years should be long enough for it to have served its usefulness.
We should not now consider extending a transitional provision for another five-year period because 15 years in this game amounts to perpetuity. Five years is forever; fifteen years is three forevers. If this deal is not working, we should look at the deal itself to see whether we should amend it, or to see whether there should be additional tax point transfers, or whether something is wrong with the EPF formula. That is what we should be considering.
I made some points with respect to the Northwest Territories and their dealings with the federal government. At the present time, the system allows them to come back and put the blame on the federal government and say, "We want more money". Then, if they cannot get it, they can go around the country blaming the federal government. To a certain extent, this applies to the provinces. Provinces must remember that if they want autonomy in certain areas which are guaranteed to them under the BN A Act and which will soon be continuously guaranteed to them under the Canada Act, they must act financially responsible.
I see that my allotted time has just about expired, is that correct?


An hon. Member:: Keep going.


Dave Nickerson: Let me just say in conclusion that, like all hon. members of this House, we wish it had not been necessary
March 29, 1982

to make some of these cutbacks. However, probably more than some of my colleagues, I understand the necessity for doing that. I just wish that in previous years the government had conducted its economic and financial affairs in a manner which would not have made these things necessary now.


Rodney Edward Murphy: Mr. Speaker, the debate on this piece of legislation, Bill C-97, has reminded me of the parliamentary debate on a number of items over the last two years. However, in those debates and in the debates on this bill, we have not really demonstrated any attempt to come to grips with the realities of Canada today. Neither in legislation affecting the drastic economic situation Canada faces today, nor in legislation relating to federal-provincial relations, such as that which is before us right now, do we find any constructive leadership by this Liberal government.
In the economic field, the phrase "band-aid solution" has been often used, and appropriately, to describe every legislative measure or half-measure that the government has produced. The government's record in that very important field has been deplorable. However, that is not the subject of debate at this time. We are discussing a proposal by the government to alter, in a significant way, the federal government's financial assi-tance to the provinces. Both the equalization payments which are there to provide a basic level of services to all Canadians and the established programs financing legislation which assists provinces to maintain hospital and medicare services and university and community college programs are important to all Canadians. Indeed, equalization is so important that we have made it part of our new Constitution. Yet these legislative changes have been a result of inadequate discussion between the federal and provincial governments. If that were not bad enough, we in this House are being asked to pass, in all stages, the significant legislation which we saw for the first time on March 19.
I will deal with our role in this debate later on. However, for the next few minutes I would like to speak about the way the federal government continues to treat the provinces. Few will claim that the deteriorating relationship between our two senior levels of government can be entirely blamed on the federal government. The Prime Minister (Mr. Trudeau is correct in claiming that some provinces are always kicking the federal government in the teeth. I would add that some provincial officials, as well as some federal politicians, seem to take delight in that type of behaviour. This provincial attitude has been counterproductive; but the federal Liberal government has done little to create a better climate for federal-provincial relations.
The Prime Minister has too often displayed quick wit and quick temper rather than the reasoned remarks that his personal motto should call for. By issuing a death certificate for co-operative federalism, he is only adding further fuel to the fires of regional suspicion and hatred. The sticks of that fire have been piled higher with each act of this government. The way the Constitution was dealt with, the approach to oil and gas legislation, the unilateral method of handling the question of the Crow rate and the sudden demise of the Department of Regional Economic Expansion, have all
Federal Transfers to Provinces
augmented negative provincial feelings. These acts have created animosity by themselves. However, the attitude, the methods and the process employed by the federal government have produced the worst animosity. Other speeches in this debate and in previous debates have referred to the growth of Quebec and western separatism during this government's terms of office. The hostile feelings of those residents in Canada, plus others in Atlantic Canada and even in Ontario, toward the federal government demonstrates that the federal-provincial relations disputes have gone beyond being a continuing war of words, of different wills or of different personalities. Neither side appears to be willing to work toward a united Canada.
The Prime Minister declares that co-operative federalism is dead because he feels that he has been kicked in the teeth once too often. Provincial politicians are always going to the polls to fight the numerous onslaughts of the federal government. The federal government feels it must set up direct federal liaison offices in each province to increase federal visibility and that each cost-shared program must have a huge sign, preferably with neon lights, proclaiming that federal participation. At the same time, the provinces feel that they are being bombarded with federal ultimatums which dictate not only in federal areas of jurisdiction but also in any matter in which the federal government finds some belated interest. The federal government has been harshly treated by some provinces, but it has certainly given the provinces similar treatment.
In the bill before us today, the federal government has not really attempted to negotiate with the provinces. I find it ironic that when the federal government does not wish to act, it feels it must consult with the provinces. On the matter of freedom of information, it not only feels this need to consult, but it now believes the provincial and federal legislation must be uniform throughout this nation.
If freedom of information needs thorough consultation between the provinces and the federal government, Mr. Speaker, then certainly legislation affecting the ability of provinces to provide a uniform basic level of health care, postsecondary education and other essential services must require that same level of consultation.
The Minister of Finance (Mr. MacEachen) spoke on this legislation last Monday. I was in the House to listen to him. I read his speech in Hansard after that and I read it again on Sunday morning. I am certain that the minister has forgotten how to speak in everyday, understandable English. I looked at the bill before us, I read the reactions of some of the provincial governments, then I read his speech again. He is not using the English language to convey an explanation of this legislation. Instead, he uses the language to lead us away from the truth.
The Minister of Finance gives the impression that negotiations on this bill have been ongoing since October of 1980, when in that budget he said that "significant savings in social transfer payments" would occur. Yet later, he admits that

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Federal Transfers to Provinces
serious negotiations did not occur until after the November 12 budget of 1981. Even then he made major changes in February, 1982 and expected the provinces to agree within the same month.
Clearly, negotiations have not taken place in any real and substantial way. Some provinces have complained that the federal government's finance minister refused to meet with his provincial counterparts, from December 1980 to November 23, 1981, almost a full year, even though a meeting had been promised for as early as March, 1981. Clearly, if you do not meet you cannot discuss, and if you cannot discuss you cannot negotiate. This is not co-operative federalism in action; it is evasive federalism being acted out.
Negotiations are a sham when a proposal made to the provinces on February 4 for which documentation was not given to the provinces until February 19 is to be agreed to by the same provinces by the 22nd of that same month. They are given three days to respond to the federal government's position. It would take many more days for the provinces to be able to analyse the effect of the federal government's position.
The ultimatum negotiations of the Secretary of State (Mr. Regan) where he demanded responses by March 3 with regard to funding proposals for post-secondary financing and, to a lesser degree, the fancy dancing of the Minister of Employment and Immigration (Mr. Axworthy) on the federal role in training programs also served to confuse the issue further.
There is no real need for this rushed and abortive attempt to negotiate with the provinces. As the hon. member from Winnipeg-Birds Hill (Mr. Blaikie) mentioned last week, only the section of this bill dealing with equalization payments must be passed this month, even if only on an interim basis at this time. Those other sections where the majority of the dispute exists have no legislative deadline.
The effects of this legislation are not yet fully understood. Most provinces have not given their written reactions in the last couple of weeks. Most hon. members do not understand the legislation fully. We saw it for the first time on March 19 of this year. It would be irresponsible for us to pass this significant and important legislation without realizing all its implications.
I repeat that for established programs financing there is no legislative deadline. We are not forced to act on this section now. The federal government is giving itself a year to prepare for the start of new national guidelines for medical services and post-secondary educational services. Surely we and the provinces must have this information before we set limits on the federal level of funding for these important areas.
The minister in his speech last week spoke of a number of changes that are contained in this bill. He started by saying that there will be a "substantially changed fiscal equalization formula." Yet he wants to rush this bill through the House. The purpose of this section is to provide less money for the poorer provinces than they would receive if the present agreement were continued.
In addition, he spoke of moving to "modify established programs financing by eliminating compensation provided in exchange for the 1972 revenue guarantee." Those are his
words, not mine. Again this is a major change which we should not rush into. This also will drastically reduce funds the provinces are entitled to under the existing legislation.
One change the minister proposes is to forgive provinces which received an overpayment based on estimated population figures. However, Saskatchewan is not to be forgiven, while each of the other five provinces who received an overpayment will be forgiven. This bill specifically denies Saskatchewan this refund. Can we rush into legislation that is unequal in its treatment, on a retroactive basis, without first discussing the rationale for this proposed action? The amount is $50 million, and despite tales of new-found wealth in that province the amount is significant for a province of only one million people.
I do not wish to imply that all within this legislation is suspect; indeed, that is not the case. A provision extending for an indefinite period a fiscal stabilization program which protects provinces from a sharp downturn in revenues caused by a major slump in the economy and facilitating provincial borrowing in those periods is a good measure. A similar provision providing a revenue guarantee if the federal government makes substantial tax changes is also welcome. A section protecting provinces by providing 85 per cent, 90 per cent or 95 per cent of the previous years amount, depending on the provinces' per capita fiscal capacity, is also good. It gives protection against a rapid increase in a province's revenue in a one-year or two-year period.
The concept of including local governments' potential tax capacity also has merit. It will apparently roll $16.5 billion into the equalization standards, and it will more adequately reflect the revenue capacity of a province.
The provision of a ceiling where total equalization payments will be restrained by the growth in the GNP should provide protection for the federal treasury. However, its effect on poorer provinces if costs should escalate is something we should be discussing further in this House.
A very interesting new provision guarantees recipient provinces will have transitional payments for the next three years, guaranteeing, for example, that the 1982-83 equalization payments will increase by the average rate of income from 1977-78 to 1981-82. The federal Minister of Finance pointed out that in the next three years this transitional payment would mean an extra $165 million to the province of Manitoba alone. It is an admission on his part that the new proposals in this bill will drastically reduce the amounts provinces will receive under the present arrangement. Yet the minister says there are no cutbacks. If there are no cutbacks, why does he need a transitional payment scheme for the next three years? Why does the province of Manitoba receive $165 million over three years if there is no cutback? He is admitting that this legislation is giving him less money than the provinces would receive under the existing legislation. The Minister of Finance said that he agreed to transitional payments on the suggestion of the provinces, and in particular because of the arguments of the new government of Manitoba. That fact, in itself, is good,
March 29, 1982

but we must again ask ourselves why transitional payments are necessary if there are no cutbacks.
Under the present equalization formula, Manitoba should receive $452 million in 1982-83. Under the minister's new scheme, that province is entitled to $349 million, which represents a cutback of $113 million. With $82 million in transitional payments, Manitoba will receive $431 million, which is still $21 million less than they would have received under the present legislation. If we add the amount the province will lose under the new program for established programs financing to this $21 million figure, we find that the province will receive $62.9 million less next year than they would have received if the present legislation was continued.
Once the sugar coating provided by transitional payments is dissolved, it will be evident that the poorer provinces will be in a worse position. In 1986-87, the loss to Manitoba is estimated to be $248.6 million for one year alone. Yet Manitoba is not alone is this regard. The estimated cost for Newfoundland in 1986-87 is $30.3 million. For Nova Scotia it is $40.8 million. The figure for New Brunswick is $48.5 million. For Quebec, it is $1.22 billion. As I mentioned, the figure for Manitoba is $248.6 million.
Over the five-year term of this agreement the provinces will receive much less money than if the existing programs were allowed to continue. Again, I have figures relating to the same six provinces. The total federal cutback over the five-year term for Newfoundland is $90.3 million; $153.1 million for Nova Scotia; $172.7 million for New Brunswick; $3,960 billion for Quebec; and $828.3 million for Manitoba. Yet the Minister of Finance, in his unusual use of the English language, said last Monday; "I do not understand how the term 'cutback' can be applied to this particular program". We see billions of dollars in cutbacks yet he cannot understand how we on the opposition side, who are out there listening to people in the provinces, can use the term "cutback". The only argument the Liberals have used is that there is increased value in federal tax transfers, yet provincial tax increases will offset the shortfall in federal financing.
Let us review the true figures. Even after the federal tax transfers and the related increase in provincial taxes, the shortfall for some of these provinces is staggering. Again, I have figures for five provinces. For the next five-year term, Newfoundland, after removing the increased federal tax transfers and the provincial tax increases which are related to that, will lose $67 million. For the last year of the program it will lose $28.3 million. Nova Scotia, over the next five years, will lose $71.1 million and $27.8 million for the last year of the program. New Brunswick will lose $133.7 million over the five-year period and $42.5 million in the last year of the program. Quebec stands to lose $3,799 billion and in the last year alone, even after all the extra money which Liberal backbenchers have been talking about, it will lose $1,040 billion as a result of this new scheme. Over five years Manitoba will lose $719.3 million, and in the last year of the program it will lose $232.6 million. These figures are staggering but
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they must be put on the record because they represent the net loss faced by the provinces under this proposal.
The sugar coating effect of the transition payments may blunt the opposition to these measures. Already, some newspapers and politicians are looking only at the immediate result for 1982-83. However, the horrendous effects of this piece of legislation are only being delayed.
Those of us who are from the provinces concerned-Newfoundland, New Brunswick, Nova Scotia, Quebec and Manitoba-as well as those who are concerned about what result this legislation will have on the ability of the provinces to maintain a decent basic level of services, cannot support this bill. Liberal members who vote for the bill had better hope that the next federal election occurs before the sugar coating completely dissolves and Canadians discover what is being rushed through Parliament at this time.
The real question which must be debated right now is how the provinces, especially our poorer provinces, will be able to maintain existing programs at their present level when the federal government is taking away over $5 billion in the next five years. I remind hon. members that most of that money is being taken away from those provinces which are already receiving equalization payments, those provinces which we have agreed need the money the most.
When the Liberals refer to the resource rich provinces as the ones which will suffer under these proposals, they are obviously not telling the whole story. When the government complains that including all resource revenue of the richer provinces in equalization programs would create financial problems for the federal government, it is ignoring reality because for each of the last number of years resource revenue has been treated differently, and will continue to be treated differently simply by keeping Alberta off the list of the five provinces used to establish the equalization standard.
As provinces not receiving equalization payments, the major resource provinces are not adversely affected by the equalization proposals. They are not suffering from the cutbacks. They are affected by changes in the established programs financing through the removal of compensation for the revenue guarantee and, while it may be arguable that those provinces do not need federal assistance for hospitalization, medicare and postsecondary education, how does the federal government expect to enforce the federal standards, once they finally establish them, if they do not have a "carrot"-some way of controlling the activities of the governments of Ontario, Alberta and British Columbia? As I said earlier, my main concern is for developing provinces. While arguments about British Columbia or Alberta may be valid, they take attention away from those provinces which need the funds the most.
By referring to letters from the governments of the Atlantic provinces, the Minister of Finance implied that they support his scheme. In fact, those letters only support this proposal for a five-province standard for equalization over an earlier suggestion which he also made to restrict Ontario as the only province used for that national standard. That is the only point

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Federal Transfers to Provinces
those letters make and we should ensure that Canadians understand this. We should not let the Minister of Finance bamboozle us again. The Atlantic provinces do not support this scheme and he should not make that implication in his speeches.
1 remind Parliament that over 70 per cent of the cutback- and surely we can call it that, no matter what the Minister of Finance wishes-will be borne by those provinces with 44 per cent of the population and only 36 per cent of the national economic output. To hear some hon. members speak, we would assume that this is another measure by the Liberals to soak the rich. It is strange that every time the Liberals go out to soak the rich it is the poorer sections of Canadian society which are drowned.
My colleague, the hon. member for Winnipeg-Birds Hill, mentioned that by a sleight-of-hand trick the Liberals have removed the compensation for the revenue guarantee and by doing so have made sure that the real increase in established programs financing is only 4.6 per cent instead of the 13 per cent the Liberals claim it is.
Parliament should be aware of what the all-party task force said about the level of federal funding. The task force stated on page 33 of its report:
-federal grants to provinces and municipalities expressed as a percentage of total federal spending have been fairly constant since 1970. There is, therefore, no ground to suggest that federal transfers have been getting out of control. In fact, they grew at a slower rate in the 1970s than they did in the 1960s.
What did the Economic Council of Canada say? It said that one should seriously doubt the wisdom and fairness of solving the federal deficit problem by merely transferring the problem to the provinces. The council went on to say that this is not a solution at all.
From where is the money for these programs to come? The federal government expects its own expenditures to increase by approximately 16 per cent this year. If the past is any tradition, they will probably increase by more. Are the provinces not expected to face similar increases, even without this drastic change in federal funding? Are the provinces going to tax their citizens more to maintain the level of services for medicare, hospitalization and post-secondary education? How are they supposed to know what they are supposed to finance? We have yet to see the guidelines for health care and post-secondary education. We are setting the funding limits now, and we are setting the guidelines for what should be a national standard one year down the road. Does that make sense?


Donald Alex Blenkarn: Of course not.


Mr. Keeper:: The Tories support it.


Rodney Edward Murphy: I think it is very likely that the standard of education and the standard of medical services in the less wealthy parts of this country will deteriorate. Why would the federal government propose a scheme whereby funding limits are established now and later we establish the federal standards and the federal guidelines?
For the last three years all parties in this House have expressed concern about the present level of services. By cutting the federal funding to which the provinces are entitled there can be no less pressure-and there certainly will be more pressure-on the level of services the provinces provide.
Did the all-party task force not state that money provided for the revenue guarantee should be treated as federal funding for health care and post-secondary education? If that is the case, why is the federal government, which had the majority on that all-party task force, eliminating this funding, and how could the so-called Breau report say one thing and the hon. member for Gloucester (Mr. Breau) say the opposite in this House last Friday? Has he forgotten what his report is all about? Has he forgotten what the essence of that report was?
These are questions which should be asked and answered before we rush this legislation through Parliament. Today the state of federal-provincial relations is so strained that even Premiers like Howard Pawley of Manitoba, who really believes we should make co-operative federalism work, find it difficult to succeed. They find it very difficult because of the attitude of some of the premiers. They also find it difficult because of the attitude of the Prime Minister and some of his colleagues who sit opposite. This country needs a more positive attitude on the part of the provincial governments and on the part of the federal government toward each other.
Before this legislation becomes another thorn in the side of confederation, let us as members of Parliament make sure we know what we are passing. Let us ensure that no province suffers unnecessarily because of this legislation. Let us ask that guidelines for the level of services for health care and postsecondary education be established prior to limiting federal funding for those essential areas. Let us ensure that equalization payments really mean something and meet the needs of our less wealthy provinces and do not become another empty promise in our new Constitution. Let us insist that the Minister of Finance, the Minister of National Health and Welfare (Miss Begin) and the Secretary of State really negotiate with their provincial counterparts and not just play at consultations. Let us make sure that co-operative federalism really works and lives in Canada. For us to act in any other manner would not benefit those programs which we all believe to be very important and would not create a Canada where we are working together toward a better future for Canadians.


The Acting Speaker (Mr. Ethier):: The hon. member for Winnipeg-St. James (Mr. Keeper).


Cyril Keeper: Mr. Speaker, it is good to be speaking on this subject.


The Acting Speaker (Mr. Ethier):: Order, please. May I correct the situation? Inadvertently I had not seen the hon. member for Bow River (Mr. Taylor) rise. I did recognize the hon. member for Winnipeg-St. James. The names were given to me in co-operation with the party leaders. I usually work that way, but it would be customary for me to recognize the
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hon. member for Bow River, and I will recognize the hon. member for Winnipeg-St. James immediately after, if the hon. member for Winnipeg-St. James grants his permission.


Cyril Keeper: Mr. Speaker, I can understand the error.


Gordon Edward Taylor: Mr. Speaker, I appreciate the co-operative attitude of the hon. member for Winnipeg-St. James (Mr. Keeper).
I want to make only three comments about this bill. I am going to say a couple of things which have not been said before. First, I want to deal with the fund and join in the considerable discussion there has been about how much money goes into the fund and from where it comes. I want to make it abundantly clear that the governments of Alberta, past and present, have always stood very strongly and firmly for the principle of equalization. Albertans are part of Canada, and we agreed that social services such as health care and education should be provided at a reasonable minimum standard to all Canadians. As a matter of fact, it was strongly urged at the very beginning of the program by a former premier of Alberta that there should be equalization in Canada. Even though at that time Alberta was a have-not province, we felt it was necessary to make sure we shared anything we had. That has been typical of Albertans throughout the years. I remember that when 1 was a small boy during the depression years our family was as hungry as others. But that did not stop my mother, every time she baked, from sending a loaf of bread to another family who were also having a tough time.
Many times people are criticized for doing something good.
I remember being in El Salvador in 1965 representing the Canadian government through the Canadian Good Roads Association at the opening of the Pan-American highway. I also witnessed the opening of a hospital in El Salvador for which the Americans had paid. I travelled over the PanAmerican highway. The Americans had paid for 80 per cent of it, yet I did not hear one good word about the Americans from those people in El Salvador. All I heard was criticism, criticism, criticism. I asked the chap from Central America who was beside me, why? The Americans had built nearly the entire highway through Mexico to the United States; the Americans had built the hospital which was being opened, but they received no thanks for that. The chap beside me said that wherever there is a benefactor, there will be those who will hate that benefactor.
Sometimes I feel that way about the province of Alberta when I hear comments made in other parts of Canada. Albertans, the Alberta governments and previous Alberta governments have never asked for special concessions. They have shared with the rest of Canada in a number of ways. Mr. Speaker, I was hurt some time ago when I heard the Minister of Energy, Mines and Resources (Mr. Lalonde) say that Alberta did not want to share. I was even more hurt when I heard Senator Hays, a Liberal, say in a speech in Calgary that he was raised with oilmen and ranchers but now they do not want to share. I do not know where he has been living because sharing has been part and parcel of the every-day life of
Federal Transfers to Provinces
Albertans as, indeed, it has been of most Canadians. Who among us, from any province, would pass a youngster on the street who was hungry? Any of us would share our bread with him.
The equalization program which is now entrenched in the Constitution is a splendid thing. It ensures that all Canadians will have a minimum standard of social welfare, education and health. The higher we raise that minimum the greater the country will be. The weakest part of a chain is the weakest link and the weakest part of our confederation is the weakest province we have. We want to make sure that every province is strong and is given a chance to develop.
When I hear it said that Albertans do not share, I am upset because they have shared $18 billion in oil and gas revenues. I remember that when I was a member of the Alberta legislature I argued that we should have at least a two-price system for oil if not a three-price system. The first price would be the best one for the people who own the resource, the second would be the next lowest price for the people of Canada and the third would be the highest, or the world price for exported oil. Premier Lougheed replied that that is what the policy is, the fairest price possible, right across Canada and the highest price for people outside the country. By keeping the price lower than we needed to, we shared $18 billion with the people of Canada. I do not want any particular thanks for that, nor do the people of Alberta, but I think we should at least have recognition for it.
We also shared employment. I went to the tar sands plant at Fort McMurray when I was a member of the Alberta legislature where 2,000 people were employed separating the oil from the sand. A good half of them came from Ontario, Quebec and the maritimes and I was happy about that. I had dinner at a table where one person was from British Columbia, one was from Alberta, four were from Ontario, four from Quebec and two or three from the maritimes. Those people were helping develop the resource and that is the way it should be.
We also want to share in the fund. I want to be fair with the people of Alberta and I want the federal government to be fair with them when building the fund up. At one time we in Alberta argued-and the principle is sound-that revenue from non-renewable resources should not be part and parcel of the fund. A number of hon. members will probably disagree with me, and I respect that, but I argue that as we only have those non-renewable resources for a short period of time we should build for the day when they are not available. That is what the people of Alberta have been doing with the Alberta heritage trust fund; when the oil and gas is gone threre will be something there to lighten the load that the people will have to carry.
We argued that revenues from depleting resources should not form part of the fund, but we lost the argument. In the 1976 revision oil revenue was included and has formed part of the fund since. I still do not think the principle is sound,

Federal Transfers to Provinces
however. A non-renewable resource is a depleting resource and any province should have a chance to make use of the revenues which are only available for a short period.
My main reason for speaking today, Mr. Speaker, is the changes that have been made. Instead of "oil", there is now reference to "conventional new oil revenues", "conventional old oil revenues", "heavy oil revenues", "mined oil revenues", "domestically sold natural gas revenues" and "exported natural gas revenues". I think members of the committee should find out whether there is a fish hook in this which is designed to hurt Alberta. There are those who would like to do that. If there is a fish hook in this, it should be taken out. We will pay our share but let us not double the share simply because we have some non-renewable resources today.
Why did the minister change the provision from just oil and gas and make the various distinctions? The committee should examine this, as I shall at report stage, note the changes that have been made from what was contained in the old act. I want to know if there is a fish hook in this which is designed to hurt one province. I have seen that happen before, Mr. Speaker. I do not care whether it is little P.E.I. or big Ontario or big Alberta, no province should be discriminated against. Every province should be treated fairly and squarely. I make no apologies for that stand, Mr. Speaker.
There are three ways of sharing, namely, through the fund, and we are happy to do that, through employment and through a lower price for gas and oil for the people of Canada.
The third and last point I want to make concerns a reduction in services. When I was in the provincial legislature many programs were started by the federal government with a great blast of trumpets. Then suddenly the federal government dropped out and the province was left holding the bag. That is a very bad thing, no matter which party is in power in the federal government. If it is not going to maintain a program it should make it clear from the beginning.
I remember one program that was designed to help handicapped and retarded young people which was started in the Banff area. Many people worked very hard on it and volunteers gave their time to the project which was to enable retarded people who had previously drawn welfare to work and help maintain themselves. One learned to drive a car and started to earn a living, or at least part of his living, and others learned other things which would supplement their income and help them become self-sufficient. My heart thrilled at the happiness on their faces when they were able to say, "I am now making my own living." But after the third year when the program was going well, the federal government dropped out.
That is a bad policy and the same thing could happen with the established programs financing. The federal government will drop $5.7 billion over five years, or $1.14 billion every year if it is spread equally over the term. I cannot understand the mathematics of the Minister of Finance (Mr. MacEachen), and neither could the hon. member for Churchill (Mr. Murphy). I do not know whether he was figuring in metric or what. Even in metric I cannot understand them.
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When you take $5.7 billion away from the provinces, there must be a reduction some place.
The sad part is that established post-secondary educational programs will be affected; the quality of education will be reduced. I think hon. members opposite should realize that there will be less moneys for universities and colleges. This will either be made up by provincial governments or municipalities levying more taxes, or the fees of students will be increased. I read in a Montreal paper where one of its universities has now increased its fees for foreign students. Do we not want foreign students to come to Canada? Perhaps they should pay more than Canadians, but it is in our interest, if we are to share responsibility with the rest of the world, to raise the standard of education in Third World countries. It is very important for them to have educated people who can become leaders in their communities. Reducing the number who are coming to Canada does not work toward that objective.
One objective in terms of health was to have minimum health treatment for any Canadian who needed it. This is why Alberta gave up its medical program which was started by doctors. Alberta was doing fine under its doctors' program. It was an excellent program, but we were not helping other Canadians. Thus the government of Alberta said that it would drop out of its own plan and join the national program. Provinces that are not as well off as Alberta depend upon federal money. They will have to find money some place or lower the standard of health care. When provinces lower their standard of health care, it is more difficult for people to get into hospitals. It will even be more difficult for those who are poor. It will not affect those who are wealthy. As the hon. member for Churchill said, it is the poor who suffer, not the rich. The rich have enough money to attend universities, to have the best doctors or to do any of these things; there is no problem. The problem is with people who do not have money. This is why there is equalization. Any reduction hurts most in the provinces which need equalization. I plead with government backbenchers and cabinet ministers to ask themselves whether they want to be part and parcel of reducing the standards of the health and education systems in the country.
We should be raising the standard of education. The higher we raise it, the more we provide opportunity for young people to attend colleges, universities or various high schools. The better the country will be if opportunity is provided. Illiterate people in the Third World are having difficult times. Many people cannot read or write. They need opportunity. The same thing applies in our country where people are generally educated. That is not to say that we are well enough educated now. We should provide more opportunity for young people to attend colleges and universities and to learn trades so that they can contribute to the net worth of the country.
The effect of cutbacks on social services is an area which makes one's heart bleed. There are people who depend almost entirely on social services for their livelihood, for the education of their children, for the clothes on their backs. The provinces
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or the municipalities will either have to cut back or raise taxes. If not, children will attend school poorly clad or fed.
I do not like to make personal references but I remember, during tough years, boys and girls who came to school without any breakfast. I remember boys and girls who came to school without any winter underwear in 40 below weather. One of my students rode a horse for five miles to school and he had no winter underwear. I asked him, "Where is your winter underwear?" He said, "My dad is a drunkard, we are on welfare, and they will not give us any winter underwear." After riding to school in 40 below weather, his skin was blue. I was so angry that as soon as school was out that day I drove to Drumheller and phoned the then premier of the province, Mr. Brownlee. He told me to talk to the minister of welfare. I phoned the minister of welfare and he said, "That is the rule; if the father drinks up his money we cannot help". This was during the depression years. I said, "Are you going to make the kid suffer because his father is a drunkard?" He said, "That is the rule". Then I phoned Premier Brownlee again and I told him the story. He listened and said, "That kid will get winter underwear". Three days later winter underwear was provided to the boys and girls of that family. I wondered whether this was the way government worked, that someone must fight for winter underwear. This is one of the reasons I am in politics; it is not my idea of government.
Government should help those who need it. People need help through established programs. The government should not be cutting $5.7 billion and telling the people that it is not reducing the equalization fund.
The hon. member for Western Arctic (Mr. Nickerson) mentioned that he did not like the idea of the Alberta government giving $1 million to its municipalities because this action might make people irresponsible. 1 can understand people saying this if they do not know the real facts behind the so-called gift to municipalities. The municipalities of Alberta had debts which were not the result of recklessness on the part of their councillors. At one time I think I knew every municipal councillor in the province of Alberta, and I did not know one who was reckless. People who are that close to municipal governments must be careful, or it is not safe to walk down the streets. Day by day councillors rub shoulders with the people. One municipality had debt because sewer and water systems were required; another municipality wanted to be rid of dust which was causing lung trouble, so it paved the roads; and another municipality required a bridge. Some municipalities had no debt, some had a little and some had a lot.
How did the government of Alberta deal with the situation? It gave a per capita grant to all municipalities. Those with no debt were able to build up capital assets. Some of those with debt were able to wipe it out. Those with a little debt were able to provide other services to their people. Those with the biggest debt used most of the money to pay it off. It is another example of sharing provincial revenue with the municipalities. Municipalities are the creation of the provinces; why should the provinces not share their revenues with them? I am proud
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of the fact that the Alberta government provided help to the municipalities to eliminate their debt.
Also I say to the hon. member for Western Arctic that he should have seen the faces of the people in those municipalities when they were told that the debt was paid. It was similar to how I would feel if my father came to me and said, "Well, you have been a half decent guy; I will pay off your $2,000 debt". It would be a wonderful load off my shoulders. Many fathers do it. I do not think that is wrong, I think it is good. The more sharing we have in that way, the better. But remember, this money belonged to all Albertans. The province is simply passing the money on to the municipalities because all of it does not belong to the provincial government. There are principles there that are important and the same principles are important in this bill.
By all means, let us keep equalization. But at the same time, let us make sure that we are fair with each province. Let us make sure that no province is discriminated against in the building of the fund. Let us be fair to all provinces that receive the fund so that social services, education, and health care particularly, will at least reach a reasonable level of which any Canadian need not be ashamed.


Cyril Keeper: Mr. Speaker, 1 am very happy to rise and address this bill because of its fundamental importance to our country, not just in the abstract but for Canadians as individuals. This bill is crucial because it will affect the day to day lives of all Canadians.
Bill C-97 deals with established programs financing and with equalization. It is a mixed bill. In that sense it is similar to the oil bill which caused all the kerfuffle which motivated the Conservatives to stop all business in this House. That bill was split eventually, and it is right that it was.
I feel that the bill before us should be split. Why do I say that? Quite simply because the government is trying to say that Bill C-97 has to get through the House now, that there is no time to be wasted if payments are to continue to the provinces. Therefore, this bill must go through now. In fact, the only part of this legislation that has to be dealt with quickly is the equalization portion of it. We could deal with the EPF portion of it over a much longer period of time. This raises the question why the Liberal government of the day is pushing this bill through the House so quickly, as it attempted to push the oil bill through. I must conclude that the government is doing this because it really does not want a full examination of the implications of the changes in fiscal transfers to the provinces.
We have all been able to make the point with regard to the established programs financing portion of this legislation and how that will have a detrimental effect on the provinces and all of our citizens. But the equalization part deserves full examination as well. By rushing this matter through Parliament, we will not have the time to understand fully the implications of

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the changes in the equalization portion of this bill. The provinces will not fully understand the implications of the changes which the government is pushing through the House.
I am not surprised when the government of the day intends to push a legislative measure through the House quickly. But it does concern me when the official opposition, the Conservatives, who fought the oil bill vigorously and demonstrated their capacity to force the government to split a bill, is abandoning the fight when it comes to health and education. The official opposition has demonstrated its capacity to "stop Trudeau" from ramming an important measure through the House. Yet when it comes to fiscal transfer matters affecting health and education for all citizens, the official opposition does not exercise the same strength and power it has demonstrated it has. Why did the Tories not do that for this bill? Why do we not stop the government from rushing this bill through the House?


An hon. Member:: Oil before people.


Cyril Keeper: My colleague says oil before people.
This bill is an example of unilateral action. It is the federal government moving without the co-operation of the provinces. It is a demonstration of the fact that the government has completely abandoned the notion of co-operative federalism. It is really acting with a heavy and an arbitrary hand. It is not surprising the Liberals are doing this, but why are the Tories not fighting to stop this from happening? The Tories made a big issue of this when it came to the Constitution. They demonstrated their capacity to stop the government in this House. Yet when it come to the substance of confederation, which is the bread and butter of the financing that will help every family in Canada with regard to its health and education, the Tories are not here to carry on a real battle.
In the final analysis, I am not surprised that the Liberals and the Tories take the same approach to fiscal transfers. Fundamentally, they have the same economic strategy. They have the same approach when it comes to high interest rates, which continue to hurt people.


John Horton McDermid: That is not true at all.


Cyril Keeper: They have the same fixation with regard to the federal deficit.


John Horton McDermid: Start telling the truth.


Cyril Keeper: They have the same approach to public expenditures. I will use an example given by the hon. member for Western Arctic (Mr. Nickerson). He made it quite plain and was very candid with regard to the Tory approach to public expenditures on health and education. He said in effect that he could understand when governments have to take a tough stand regarding transfers to the provinces. That was a candid remark and it demonstrated the Tory approach to public expenditure.


John Horton McDermid: What would you do? Would you give it away? What kind of stance do you take?


Cyril Keeper: The public knows that fundamentally Liberal and Conservatives take the same position when it comes to economic matters and public expenditures. The recent Gallup poll on the economy demonstrated that. The question asked was: "Would there be any difference if the Tories were in office rather than the Liberals?" Over 60 per cent of Canadians said that there would be no difference if the Conservatives were in office rather than the Liberals.


John Horton McDermid: Prove it. Give us a chance.


Cyril Keeper: The Canadian people know that there is no difference between the Tories and Liberals in office.


Mr. Stewart:: What a joke. Go across the floor.


Cyril Keeper: Why is this an important issue? Why is Bill C-97 an important matter for this Parliament? Why should we be fighting it tooth and nail? Why should we be "stopping Trudeau" with regard to this unilateral action? We should be doing all of those things because the government, through this legislation, is reducing transfers to provinces for health and education, much needed social services, by the amount of $5.7 billion.
The government has eliminated the revenue guarantee. Previously, this was a guarantee for which the government took great pleasure in taking credit as a contribution to health and education services. Now when the government wants to get rid of it, it is claiming the guarantee has nothing to do with health and education. This bill to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act is a very significant one because it affects services in a crucial area that are available to all Canadians.
This bill is really an attack on medicare. The federal government is pulling out of medicare funding. The federal government is pulling back on its share of medicare expenditures.


Mr. Evans:: That is nonsense.


Cyril Keeper: At the same time the government is claiming that it wants strong national standards in health care. The government's action is to pull back on funding, yet its words are "Let's have high national standards".
I think most people will agree that actions speak louder than words and that this Liberal government, through the legislation before the House today, is attacking medicare. By cutting back on the funds available to the provinces for health care, the government is encouraging doctors to extra bill, thereby reducing accessibility to much needed health care in Canada. By this action the government is in fact promoting doctors' strikes because it is reducing the capacity of the provinces to pay for medical services at what doctors feel is a fair rate. It discourages investment and innovation in the health care system.
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The preventive measure approach would mean lower costs in the long term, but it requires investment today in order to achieve those objectives. We need the financial wherewithal to establish community clinics. We must be able to experiment with salaries for physicians and not rely solely on the fee-for-service approach. We should be able to move into the area of prenatal and post-natal care. This would have long-term implications for the general health of the population and would reduce health care costs. We should have the funds to be able to experiment with new services for which there is a growing demand, such as home births, while keeping in mind that the infant death rate is much lower in those nations which combine supervised home-birth services along with hospital facilities for high-risk births, as compared with those countries which rely on hospitals only.
This legislation has very serious implications for us all and is a direct attack on medicare and health services. That, however, is not the only implication of this legislation. The Liberal government says it is not really cutting $5.7 billion in transfers. The minister said this was not really a cut. It is, he says, something more in the order of $1 billion because of the fact the government is transferring tax room to the provinces. In other words, the government is pulling out of a taxation field and the provinces will benefit thereby.
Well, let us examine that a little more closely. I ask the question, what tax room? Last November's budget did not lower taxes. It was in fact a real tax grab. Every Canadian knows that because everyone in this country has been hit and in some way hurt by the November budget.
There was a great hue and cry when the Minister of Finance (Mr. MacEachen) stood up in this House and said he was bringing equity to the taxation system, when in fact experience showed he was attempting to raise revenues and hurting everyone in this country. He reminds me very much of Colbert, finance minister to Louis XIV. Colbert said that the art of raising revenue was to pluck as many feathers from the goose with as little squawking as possible.
The problem with this minister is that he could not pull it off. There was squawking, and deservedly so. Everyone knows that the November budget raised taxes and in no way freed up any real taxation room for the provinces. The Minister of Finance, when he attempted this trick of plucking feathers from the goose, should have kept in mind that this is the twentieth century, not the seventeenth. Perhaps he will do so the next time he plays Colbert to Louis XIV.
What are the implications of these cutbacks? First of all, they force the provinces to raise taxes. In my own province of Manitoba, where a newly elected government is seeking to maintain these services, they will be forced to raise taxes unless this Liberal government shows some heart and provides adequate funding to the provinces. The province of Ontario faces a similar situation and their response to it is to cut services and increase user fees. Taking community colleges here in Ottawa as an example, it is well known that the Ontario government is following a policy of raising tuition fees at the same time as educational programs are being cut. We
Federal Transfers to Provinces
also know that over the last little while the Ontario government has been moving to a market system in the area of health care. They want hospitals to act as free enterprise institutions, and they have been cutting beds and even closing hospitals. The provinces are doing this because they are forced to as a result of the cuts in transfer payments by this government.
Another area threatened by these cuts is that of postsecondary education. I am sure all members of Parliament have been lobbied very vigorously by members of the Canadian Association of University Teachers over the last little while, and quite legitimately so. They particularly targeted those MPs with universities in their ridings. I met with them and they gave us documentation regarding the implication of these cuts for universities. As an example, they referred to the Avro Arrow. They indicated that by cutting such a technologically sophisticated program the government of the day hurt the economy. That was a good example because it occurred under the Conservative government. This illustrates once again that the Liberals and Conservatives follow fundamentally the same economic strategies and policies with regard to expenditures.
What are the results of these cuts? As far as the universities are concerned, it means larger classes, more impersonal student-teacher relationships, inferior equipment and poor library support for students. Buildings and equipment decay, there is a reduced research capacity and the use of underpaid and part-time teachers. There are new entrance barriers to women and native peoples. Highly competent people are leaving the universities. As an example, a graduate with a B.Sc. in engineering can get a greater income in the private sector than he can as a lecturer or assistant professor at a university. Therefore, what motivation is there for him to work in the university and produce the technically trained people needed to keep the economy strong?
The University of Ottawa delegation which met with me indicated they are hiring at the assistant professor level only. Now, we are not all experts in how universities are run, but they indicated to me that there are four levels of teaching, consisting of a lecturer, assistant professor, associate professor and a full professor. That is the sort of ladder of qualification. The university had been forced to hire at the lower level of assistant professor only. This means that the most highly qualified people are no longer in a position to be hired by universities, and this also means a reduction in the quality of university education. Of course, this affects morale in the universities, which is falling.
These are some very concrete results of this legislation and these cutbacks in transfer payments to the provinces as they affect universities. This indicates a general decline in the quality of universities, particularly since the late sixties and the early seventies when we were investing quite heavily in universities.
Since about 1977, while the quality of our universities has been falling because of the lack of adequate funding from the

March 29, 1982
Federal Transfers to Provinces
federal government, the competitive strength of the Canadian economy has also been falling. The reason for this is quite obvious. Because we lose the capacity to produce highly trained technical people, we lose our competitive edge in the world market. These two trends, the decline in the standards of our universities and the decline in the competitive position of the Canadian economy, go side by side. It is time for the government to recognize the direction of this relationship and reverse it.
Another way in which post-secondary education in this country is threatened by these reductions in transfer payments is that for each and every one of us the costs of educating our children are going up. Not only are the costs of education going up, but we are buying cheapened education for our children. A friend of mine calculated what it will cost him to send his daughter to university next year. His four daughters go to university, and it will cost him $5,000 a year. 1 have three young children, and I must say that the cost of sending children to university deeply concerns me. These costs are rising because of the cutbacks in funding and rising tuition fees. There has been a cheapening of university education itself. How many families could really afford to send two or three children to university at today's price of $5,000 per child? Goodness knows what the price will be tomorrow or the day after.
As a result of these rising costs of education, universities will become less accessible. This will reinforce the inequalities in our society. It will mean that the gap between the poor and the affluent will continue to widen. Universities were once the symbol of hope of this nation for greater social and economic equality. They were once the symbol of hope of many young people who wanted to climb above poverty and become contributing members of society. By these kinds of cutbacks in transfer payments, we are making it less possible for universities to be a symbol of hope, both to the individual person and to society as a whole.
It is not just in the area of universities that we have a worsening condition. The federal government is certainly making public statements with regard to the pulling back of dollars for community colleges. The government indicates that it wants these dollars to go to the private sector instead, to the industries. I would note, quite frankly, that community colleges are provincially administered institutions. It seems to me that pulling money out of the community colleges and putting it directly into private sector firms shows that the real goal being pursued is not better training for people; rather, it is greater political visibility for the federal government of the day, with the clear objective of gaining more seats in this House for Liberal members.
Rather than playing this kind of partisan politics, playing with people's lives, the Liberal government, the government of the day, should begin a program of requiring industry to train people. Right now it simply uses what it calls incentives, but there is no program of mandatory training by industry itself. This could be done. We should remember that only a few days ago we became aware of the fact that the Minister of Employment and Immigration (Mr. Axworthy) is deliberately seeking
to hire some 20,000 to 25,000 skilled workers from abroad at a time when we have over one million unemployed.
Why is he seeking to hire these skilled workers from abroad? It must be because his training programs for skilled occupations in this country are a failure. One of the reasons they are a failure is that we do not make it mandatory for industry to train. We could do this by establishing a grant levy system. This would be a system that would require individual companies within an industry to pay into a fund. Those companies within industry which trained people for skilled occupations could draw from that fund in order to pay for that training. Therefore, rather than taking the approach of pulling money out of the community colleges to give to industry so that the government of the day could have greater political visibility, which is a partisan route, we should be dealing with the social reality. We should be seeking to establish training programs which really work. We could do that by making it mandatory for industry to train for skilled occupations. A system could be set up which would allow for that training to be financed industry-wide, not simply by each individual company.
In dealing with the threat that this bill represents for postsecondary education, I would like to come a little closer to home. I am thinking of my own community of Winnipeg or, if I may be so parochial, my riding of Winnipeg-St. James. I took the trouble to consult with two post-secondary educational institutions in my riding. I must say that I wished that the federal government had done the same thing. I have been asked by people from both institutions to put some of their concerns and views on the record. Perhaps if the federal government, before introducing this legislation to the House, had spoken to people in actual educational institutions, it would have come in with a different sort of legislation and with a different approach. I will specifically refer to the University of Winnipeg and then I will deal with the Red River Community College.
With regard to the University of Winnipeg, it is obvious that I cannot name the officials involved and I have no desire to do that. However, I want to state the feelings of the people involved in the administration and development of programs at the university, as they are key to the university. They quite clearly felt that the university had been underfunded by the previous provincial government, that previous provincial government being, of course, a Progressive Conservative government which was hardly progressive. They indicated that the present Manitoba government, under the cutbacks at the federal level, was offering very large grants to the university. I think it was in the order of a 16 per cent increase. This was being offered by a New Democratic government which was recently elected. The hopes of the people at the University of Winnipeg were that the federal government would cease this cutback approach and would take the route of offering adequate financial support to the provincial government so that the provincial government would be in a position to meet the full needs of the university community and, therefore, of the
March 29, 1982

City of Winnipeg. I am speaking on this issue today in order to express those hopes, because they must find expression some place and they certainly have not found expression on that side of the House.
The people to whom we spoke at the Red River Community College indicated, first, that they really appreciated the opportunity to express their views with regard to this legislation. That once again indicates the lack of consultation by the federal government with people who will be directly affected by the cutting back of funds. The Red River Community College's chief concern was with regard to rumours and implications that have been spread in the press that the community colleges are not doing their job, that somehow the community colleges are not training people for jobs that really exist and are somehow off target.
The people from the universities and colleges can be concerned, but obviously the people who were spreading these notions in the press were political; in fact, they were Liberal political people, members of the present government and cabinet. They were spreading the notion that somehow community colleges were not on target when it came to training people.
The record is quite different. The record shows that despite the fact that we have a slow economic situation right now, the graduates of community colleges have been able to find jobs. A survey conducted last summer by the Manitoba department of labour and manpower shows that 85.9 per cent of the 1980 graduates of the province's three community colleges and of the community college division of St. Boniface College have found jobs. In a tight economy it is very important that community colleges remain responsive to the job market, and the survey with regard to the graduates of the community colleges indicates that those people had found jobs.
I would note specifically that 88.4 per cent of those with jobs had remained in the province. So they did not have to run half-way across the country to find jobs; they found those jobs at home right where they were trained. And 82.7 of those with jobs found jobs related to the field of training. They not only found jobs but jobs for which they were trained. Most of the graduates found their first jobs within five weeks. So they were not hanging around for six months or a year to find a job; they found a job very quickly.
The graduates of Red River College in Winnipeg represent only 2.5 per cent of the unemployment rate among community colleges in Manitoba. In Assiniboine Community College it is zero per cent. These rates are so much lower than the general rate within the community that it indicates how well the community colleges are doing in terms of training people for jobs that exist. They are doing a good job in that way. So that the notion that is being spread by the Minister of Employment and Immigration that the community colleges are not doing their jobs, or are off target and therefore the money should go into private industry, is false.
If we wanted to, we could improve the record of community colleges, in terms of their training of people, by implementing
Federal Transfers to Provinces
the system of predicting what jobs are going to be available. That is a system proposed by the Canadian Labour Congress. It is a system which will allow for the collection of information from industry about investment plans and resulting job opportunities on a confidential basis. If we want to improve further the capacity of community colleges to be on target with regard to their training, we can do that, rather than going the cheap political route of simply taking moneys from institutions that are provincially administered and putting it into private industry because of the political, visibility.
I wanted to get on record, Mr. Speaker, the concern that some of the local training institutions in my community have with regard to the real cutbacks in funding that are going on and are being promoted by this government.
I want to make another major point, on a more broad level, with regard to the transfers of money from the federal government to the provincial governments. Manitoba is hit very hard. In fact, the province of Manitoba is hit harder than any other province. This is illustrated both by statistics from federal government documents as well as by statistics put out by the provinces themselves. I will give an example.
Over a period of a number of years, five years, on the average the over-all funding for all provinces will go up by 69.8 per cent, whereas for Manitoba it will go up by only 37.2 per cent. So there is a real difference in the way that the provinces are affected. Manitoba, of all the provinces in the country, is hit hardest by these cutbacks. The Province stands out, and I wonder whether this was because, when there was a premier who simply engaged in fed-bashing, this was some attempt to punish that premier for his activity. If that is the reason, I hope the federal government would realize that that premier is no longer the premier of Manitoba.
Common justice would call for some rectification of the over-all impact among the provinces. Why should Manitoba be singled out to be hurt the most by these cutbacks? The federal government should not be brutal. New Democrats in Manitoba will not engage in fed-bashing; we will tell it like it is. Unless there are real changes in these transfers so that Manitoba is treated justly, we will speak out.
As well, this raises some curious questions. Why bother to have a Liberal in this Parliament? We have from Manitoba two Liberal members. We have a Liberal federal cabinet minister from Manitoba. Why does he have no clout in cabinet? How can they justify the fact that Manitoba can be so hard hit? Is it because we have a Liberal cabinet minister? No other province has been hit so hard. It is time to change this formula, to change this transfer payment in a way that will mean that Manitoba is treated fairly with regard to these overall transfer payments.
Over all, Mr. Speaker, what seems to be happening, as I see it, is that the two provinces that are really getting hard hit are Quebec and Manitoba. By observing the figures I have come to this conclusion, that the federal government is really hurting the two have-not provinces that are in the middle. The provinces that are at the bottom, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland, are being hurt; but

March 29, 1982
Adjournment Motion
those in the middle, that are closer to the national average in terms of wealth, are being hit harder. That is because the cutbacks in transfer payments are reducing the number of have-not provinces almost by fiat, in order to save federal government revenues.
In summary, Mr. Speaker, this legislation should not go through this House, for some very simple and fundamental reasons. The legislation represents an attack on medicare as a universal system of health care. It is forcing provinces to raise taxes. It is hurting the have-not provinces, in particular Quebec and Manitoba. Certainly it is hurting Manitoba more than any other province. You do not have to seek my advice in regard to this matter, Mr. Speaker. The parliamentary Task Force on Federal-Provincial Fiscal Relations said no to cutbacks in fiscal transfers in the sections of health, postsecondary education and social services. The Economic Council of Canada said no to cutbacks as they affect postsecondary education and health care.
So, Mr. Speaker, I wish that the government would come to its senses-although I hold out no hope of that happening- and stop the cutbacks, adopt a sensible economic strategy, create the wealth that we need to continue the services that we need in this country and bring some sanity back to policies in the federal-provincial relations arena.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: 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 Madawaska-Victoria (Mr. Corbin)- Agriculture-New Brunswick seed potato stock; the hon. member for Ottawa-Vanier (Mr. Gauthier)-Official Languages-Restructuring of financing of Association canadienne frangaise de l'Ontario; the hon. member for Nepean-Carleton (Mr. Baker)-Freedom of Information-(a) Proposal to delay passage of legislation (b) Crown privilege and judicial review.



GOVERNMENT ORDERS

[Stage Direction]
[ Translation]

[Stage Direction]
The House resumed consideration of the motion of Mr. MacEachen that Bill C-97, to amend the Federal-Provincial Fiscal Arrangements and Established Programs Financing Act, 1977, and to provide for payments to certain provinces, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Bernard Loiselle (Vercheres):: Mr. Speaker, since it is getting late I shall be brief and keep the details for the debate on third reading. According to the members of the opposition, we on this side are talking about cutbacks, and the federal government is supposed to be reducing transfers to the provinces. I feel that they are leaving out part of this mental exercise, which is: how do we assess the federal transfers to the provinces over time?
First of all, how did the transfers start? In 1958, the federal government introduced the hospital insurance program and it was understood with the provinces that it would be a 50-50 shared-cost program. In 1957, a similar program was established for post-secondary education, and in 1968, the shared-cost format was extended to the health sector under a new program, commonly referred to as Medicare. The arrangements were renewed every five years, both for the three established programs and for fiscal equalization. In 1972, we renegotiated the arrangements for 1972-77, and at that time the concept of revenue guarantee was introduced, following the 1971 tax reform. Because the provinces, it was felt at the time, were suffering a loss of revenue as a result of the tax reform, the federal government agreed to compensate them for loss of revenue over the period from 1972 to 1977. In 1977, during negotiations for the period from 1977 to 1982, the federal government was being urged by the provinces to continue the process of decentralization that had been initiated, and it agreed to release the provinces from the obligation to have their accounts and expenditures audited, and approved so-called block funding or established programs financing. At the time, we decided that the federal government would finance 50 per cent of the real cost of expenditures incurred in the three programs during 1976 and that increases for subsequent years would be related to the average GNP growth over the last three years. Finally, we put another sum on the table, while maintaining this obsolete concept which had become totally meaningless, that is, revenue guarantee.
The fiscal arrangements committee did, in fact, make a thorough study of all these negotiations, and when I hear our colleagues on the opposite side, especially those belonging to
March 29, 1982

the New Democratic Party, say that the committee did not recommend any cutbacks, I feel I should read two paragraphs where all committee members were in agreement. The paragraphs appear on page 36, and I quote:
What is undeniable is that the federal government faces a major budgetary problem in the size of the public debt and corresponding debt service charges. In exercising its unique responsibility for stabilization policy in the post-OPEC period, the federal government-in common with most national governments in the western industralized world-took on massive deficits. Over the remainder of the 1970s, these deficits accumulated to the point where debt service charges now represent 20 per cent of the federal budget, and this share, which is a completely non-discretionary expenditure, is rising.
Thus the task force considers that the concept of fiscal imbalance requires a careful distinction between a structural problem in the design of the arrangements of confederation, and a problem of budgetary imbalance reflecting political judgements on revenue and expenditure priorities. The federal government is at an interesting intermediate point on the spectrum between these two extremes, a point where a prolonged cyclical budget deficit begins to lead to some aspects of a persistent structural imbalance. The structural problem emerges because the size of the debt accumulated to date begins to constrain to an unacceptable degree the margin of manoeuvre in federal government decisions on fiscal policy.
It is clear, Mr. Speaker, that all members of the fiscal arrangements committee recognized the constraints on the federal government's margin of manoeuvre at the time, before the MacEachen budget was brought down in November. The seven committee members also clearly recognized that the amount transferred by the federal government to the provinces and referred to as revenue guarantee, as my colleague from Manitoba pointed out with a smile, that none of the provinces ever spent this money on the program, not even the socialist governments we met. None of the provinces applied these amounts to their health or post-secondary education programs, not one. They built roads, they paid for all sorts of things, including patronage, but they never spent the money on established programs, and our colleagues recognized the budgetary and financial constraints with which the federal government had to cope. And now, because we are making reductions-and this represents 6.2 per cent of the total transfers for the three programs-because we are making reductions in amounts that were not being spent on the programs anyway, they say we are cutting back and that we are going to bring about a reduction in essential services and cuts in post-secondary education programs. Mr. Speaker, that is not true, because first of all, since the report was tabled, we have had a budget that is giving the provinces $685 million more per year. So we can subtract $685 million from the cutbacks of $1.2 billion referred to by our friends opposite, and it is quite true that at least the provinces will be able to do what they like with this money.
And what is the situation today in 1982? The fact is, the federal government is paying about 60 per cent of total costs incurred for health and post-secondary education programs. So, Mr. Speaker, I think that members who have been seeing or listening to certain lobby groups should ask the same people
Federal Transfers to Provinces
who are pressuring us to spend more money on these programs, to put the pressure on the provinces instead of on us.
I repeat, Mr. Speaker, the concept of revenue guarantee is totally obsolete, because today, the provinces are receiving, not only as a result of the last MacEachen budget but also as a result of new Canadian tax measures, more than they would have if there had been no tax reforms in 1971. It is a little like someone who has a winning ticket and stands to get a certain sum of money for five years, and, when there is no money left at the beginning of the sixth year, starts complaining that society is treating him unfairly.
Mr. Speaker, our friends on the opposite side are talking about cubtacks, but the truth of the matter is that next year, federal transfers to the provinces under these programs will be increasing 6 per cent, rising to an average of 12 per cent during the following four years. That is all I have to say about established programs, since I shall be discussing this aspect in greater detail on third reading.
As far as fiscal equalization payments are concerned, from 1977 to 1982, the federal government paid $61 billion, and from 1982 to 1987, it will be transferring $104 billion. Here again, equalization payments will increase at a rate of 12 per cent annually, including the first year. I really do not know what kind of arithmetic or mathematical or metric or whatever system these people are using to calculate the figures I have here, Mr. Speaker, but in my book, when transfers are being increased at a rate of 12 per cent a year, how can you call this a reduction in the amounts being offered by the federal government?
As far as my own province, the province of Quebec, is concerned, it will continue to receive about one third of total transfers. In terms of equalization payments, in previous years, for instance last year, Quebec received $4.1 billion and this year it received $4.7. And then Mr. Parizeau comes and tells us that transfer payments to Quebec are being reduced. Mr. Speaker, that is a lot of hot air, and I feel provincial governments should first put their own administrative house in order and balance their own budgets before they criticize federal transfer payments, which are actually going up.


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


Some hon. Members:: Question.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

March 29, 1982
Federal Transfers to Provinces The Acting Speaker (Mr. Ethier): All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Ethier):: All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Ethier):: In my opinion the yeas have it.
And more than five members having risen:


The Acting Speaker (Mr. Ethier):: Call in the members.


Madam Speaker:: I declare the motion carried.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Madam Speaker:: It being past six o'clock, I do now leave the chair until eight o'clock this evening.
At 6.08 p.m., the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

[Stage Direction]
The House proceeded to the consideration of Bill C-88, respecting loans to farmers, as reported (without amendment) from the Standing Committee on Agriculture.
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain) moved:: That Bill C-88, respecting loans to farmers, be amended in Clause 8 by adding immediately after line 31 at page 4 the following:
"(1.1) For greater certainty, the expression 'bonds' referred to in subsection
(I) includes 'small business development bond'."
He said: Mr. Speaker, Parliament has allowed these amendments to the Farm Credit Act to go through second reading. They have been through committee and now they are at the report stage. I do not intend to repeat tonight the great value this act has been to farmers in the last 20-odd years, as I think almost everyone in the House must be aware of that fact. I agree completely with the minister when he says that the future of agriculture is ahead of us, with the world demanding so much of what we can produce from our land, water and air. It is absolutely essential that we have enough capital and the borrowing power of the nation to push forward this winning type of industry, agriculture, to make certain that we do not fail, and that the expansion of this industry continues.
March 29, 1982

When I talk about the expansion of industry, I think the minister is aware that what I am talking about is not just agriculture as we have known it, but agriculture of an altogether new type; intensive agriculture whereby we produce so much more from the same amount of land and utilize it in many different ways. I do not intend to elaborate on that. 1 think it is new to many people, but it is not new to the people looking at the future of agriculture.
These amendments which we have already dealt with at second reading and in committee are mostly housekeeping. They are useful housekeeping amendments. However, there is one amendment I mentioned at second reading debate and I want to put it on the record again so that it is clear. In my experience, it is almost a miracle the minister was able to get this amendment into the legislation. I am saying this clearly and deliberately because it is very important for us in Parliament to fulfil our obligations to the agricultural industry. We have to make certain that the agricultural industry has access to sufficient capital at low enough interest rates to make development possible.
1 shall read the section again so that the record of what I say now is complete. Hon. members have heard the amendment at report stage which I have just moved, through you, Mr. Speaker. I shall now read the section of the act I want to amend. This is Section 13(1) in the act, and is the eighth amendment in the bill. I hope every member and every person within the sound of my voice hears this amendment. What it says is revolutionary. It reads as follows:
The corporation may, with the approval of the Minister of Finance, borrow money by any means, including issuing and selling bonds, debentures, notes and other evidences of indebtedness of the corporation.
Why is that so revolutionary? Because for the first time the Farm Credit Corporation can be weaned of dependency on the Consolidated Revenue Fund. In the past, when we needed to put more money into the agricultural sector of the country through the FCC, we had to ask the Minister of Finance (Mr. MacEachen) if we could increase the capital, and then borrow the money to lend to farmers. At the present stage of federal government finances, by any ordinary measurement, the government has to be considered bankrupt, if the ratio of debt to assets is considered, yet we have for the first time to my knowledge an agency of the Crown, the FCC, able to go out and borrow money by any means, and from any source in order to assist farmers to carry out their function. That part of the clause, "by any means" is the main subject of my remarks tonight.
I have congratulated the minister for being able to get that clause in. It bears out the statement he made last year after we on this side of the House made a series of proposals on how to get more money into the agricultural industry. The minister will remember that one proposal was to use the FCC as a type of bank and let all sources of capital lend money to it. Prior to this it was mainly the Consolidated Revenue Fund which provided the money. It could in theory borrow money, but now we have it laid down; it can borrow "by any means".
Farm Loans
Tonight I have moved an amendment which says, in effect, that what I have just described as possible, "by any means", should be clarified by a simple amendment in the Queen's English so no one can misunderstand it. The amendment as it appears in the Order Paper says:
For greater certainty, the expression "bonds" referred to in subsection (1) includes "Small Business Development Bond".
In the bill which amends the act it says:
The corporation may-
It says "may" not "shall":
-with the approval of the Minister of Finance, borrow money by any means-
It mentions bonds in general.
Why, then, do I put so much emphasis on this amendment? I want to describe my bitter experience, and I imagine most people in this House will have sympathy. I have mentioned already that we would like the principle of the small business development bond stated in clear English in this amendment so that those who draft regulations and get them approved cannot overlook that principle. Why is that so important? I, like others such as the hon. member for Moose Jaw(Mr. Neil), proposed some time ago that we use the FCC under this clause to provide income-averaging annuity contracts to individuals across Canada. If the Minister of Finance is going to throw that out of the budget, we will put it right back into the farm legislation, because it would attract capital to the FCC.
The bill has another important part which has a bearing on what I am going to talk about. The capital of the corporation has been raised from $150 million to $225 million. That is only important if you realize that under the Farm Credit Act for every dollar of capital you are allowed to lend $25. When this bill proposes to add $75 million to the corporation's capital, it really means that the FCC will now be able to lend roughly an additional $2 billion at any given time. That is a substantial amount of money, so the FCC must have access to the money in order to lend it out.
We all recognize that the Minister of Finance cannot even begin to provide $2 billion. He has enough trouble already with this huge deficit, and he has gone out on behalf of the government and borrowed money at 19.5 per cent. He is not going to dole that out in large amounts to farmers or to anyone else. The facts are very simple: since the government does not have the money, how fortunate it is that this bill will give the right to the Farm Credit Corporation to borrow money from other sources, by any means.
Here comes the crunch. Mr. Speaker, you and I are not lawyers. All my life when it comes to running government I have had to fight lawyers. These fellows are highly trained, ten times smarter than I am, and they come along and undo everything I want done. They are not going to distinguish between me-they had their crack at me 20 years ago-and the present minister. Their function in life is to put into words things that you think mean so and so, but in practice can mean something else.
I speak with great feeling on this subject. When I look back over all the mistakes I have made, both in administration and

March 29, 1982
Farm Loans
putting legislation into effect, in nearly every case they occurred because I allowed myself to be talked into something by a fast talking lawyer. When you look at this bill, Mr. Speaker, and you see that it says the corporation can borrow money "by any means", you will look then ask what that means? The lawyers will say it means anything you want it to mean. We are all lawyers here and "by any means" means "by any means"; that is plain English. However, the catch is the word "may". That word "may" is what undoes it all. Therefore, I would like to put on record things which have actually happened in the House over the last 25 years which will prove my point, that we should be careful whenever we see the word "may" in a section, when put there by legal draftsmen who say that "may" covers everything, including "by any means".
What are the facts? In 1959 I had something to do with drafting the new type of legislation dealing with the National Energy Board. Weeks and weeks of time were devoted by the legislative committee to dealing with just one of the sections. It stated that the board being set up "may" make recommendations, present new ideas and report to government. I said, "you may do it". I was a minister. I wanted the word "shall" put in: "The National Energy Board shall recommend and propose and warn the government". We had just gone through a disastrous ten years dealing with these large American companies coming in and taking over our energy industry. I did not want to repeat those mistakes. I wanted the best board we could get to keep the government informed of what was going on. I wanted that word "shall".
The beautiful and charming people who advised the ministers, with all of their law degrees and fast talk, said, "It is not necessary to put the word 'shall' in as 'may' will cover everything you could possibly wish or want". How could an ordinary minister or politician cope with this charm and elegance? It went through, and that was in 1959. I give this warning in all seriousness to the Minister of Agriculture (Mr. Whelan).
In 1972, I asked the National Energy Board, through a committee of this House, why it had not carried out its function of recommending as laid down in the act. The board had two functions. One was its judicial and administrative function and the other was to recommend and keep the government informed. Its answer was that there did not seem to be too much approval from government colleagues. They did not want advice. I thought it was a great triumph when I got the new chairman of the board to agree, in committee, that he would do all he could to carry out this second function of the National Energy Board and tell the government what was going on. What was the result?
The Department of Energy, Mines and Resources which was formerly the department of mines and technical surveys, had its title changed a couple of times. The minister in charge of that department took the information put before him by his own department, information gathered from all the companies operating in North America and around the world, and he went out and said, "There is enough oil and gas in Canada to
last us for hundreds of years, if not a thousand years". He was not a dishonest man. He was a normal, little, country lawyer from Arnprior who believed the information that was put before him.
Then you should have heard all the clowns laugh. They said, "The man does not know what he is talking about. We have no oil. We have no gas. We are going to run out." All the turkeys and the chickens were running in all directions and we had this fraudulent national energy crisis. They said: "Break the Constitution", and they did. We were in an emergency. The government wanted to smash through the Constitution and take away the power from the provinces. Sure, they covered it up with nice words: "We are going to share with these people in Alberta, B.C., and Saskatchewan." The politicians got so frightened, because they had nothing before them except this report which came from the oil companies, that they panicked. So we broke the Constitution. Then it became popular to say that we had no oil or gas and that we were in an emergency, a crisis. Even the Supreme Court judges ruled that there was an emergency. When the leaves were falling on the chickens' heads, they ran around and told the whole world the sky was falling, and even the Supreme Court believed it.
What is the truth concerning energy? This is the year 1982. All the people in the world have a surplus of gas, a surplus of oil, a surplus of every type of energy. We did not know the facts soon enough. The National Energy Board, a few competent people, systematically and carefully worked year after year to discover the real situation. The minister who gave the prognostication of the future is dead. The sad part of the matter is that he went to his death with everyone thinking he was a fool because he said there was energy in this country for a thousand years. The truth is that he was not a fool. The truth is that there is energy for a thousand years-much more energy in this country than we know about. We do not even have a group of people in Canada today who have enough confidence to tell us the energy future. All we know is that the supply is many times, thousands of times, greater than what we imagined 20 years, or even ten years ago. We have the expertise.
Governments all over the world are looking to the skies and the whole universe trying to find access to energy when the stuff is right here. Look at the work we are doing on fusion energy. We targeted fusion energy for the year 2020. We are ahead of schedule. It looks like we will be there ten years ahead of schedule, But these are expensive forms of energy. The ordinary stuff is all around. I am simply using that as an example.
No parliamentarian or minister in his right mind should ever let lawyers get away with that word "may" when Parliament means "shall". I am trying to clarify, for the protection of all politicians, that when we must deal with legislation, let us learn from our mistakes. I am not saying that this matter on farm credit is as vital to the health of the nation as knowing something about the energy situation. I am simply saying, now that we have learned from bitter experience, we should not
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prohibit a group of people from getting together to do the job they were supposed to do because we used the word "may".
To use another phrase, if I may say so, civil servants have learned from bitter experience that one must never make a mistake. The only way one can be sure of not making a mistake is to never do anything. They have a name for that. When one does make a mistake, they say, "CYA". Hon. members know that the first two words are "Cover your", and I will let hon. members decide what the "A" means. Let us not make the same mistake in this particular bill by inserting the word "may". Let us put in a few sharp definitions that even the lawyers and the people who draft the regulations cannot get around. We want to let them know, without any fooling around, what Parliament wants them to do. We are backing up the minister and making use of this legislation.
I do not know how many examples I will use here, but I can deal with this very quickly. Most hon. members in this House who have been here since 1972 or 1973 know that we passed a bill, supported by all parties, which stated that any child under the age of 16 could receive family allowance regardless of the financial circumstances of the parents. Whether the parents were millionaires or paupers, a child up to the age of 16 could receive family allowance. A child who went to school could receive family allowance up to the age of 18 without regard to the wealth of the parents.
That is what parliament did unanimously nearly ten years ago. Here we sit in 1982 and know, or some of us know, that orphans are not accepted, that teenage girls who get pregnant are not accepted. Parliament put nothing in there about discriminating against orphans; Parliament put nothing in there about discriminating against teenage girls who get pregnant. That is the time they need the help when they are going to school. Yet that crime is laid at our doorstep here in the House.
I feel sorry for a minister who has to stand, like that minister who said a few days ago that she should take it up with her colleagues on the Treasury Board, or whatever group she was in or in some committee, because that is where the discrimination against orphans exists, but they could not do anything about it as they did not have any money. As soon as they get the money she says they will do something about it. The blame for that does not lie with the ministers alone; it lies with us as Members of Parliament, knowing that this is happening over and over again, because experts on legal language draft our legislation, make these mistakes, and we cannot see through it. Things can be done over and over again through regulations that turn our ideas all around. Therefore, I make an appeal to all parliamentarians to be kind to ministers.
When we have a chance like this to propose an amendment that does have so much potential, let us make sure no one unpsets it in the drafting of regulations which are then put before Treasury Board, cleared there, and resulting in an order in council. We all know about the machinery and how difficult it is to look at everything carefully. How I would hate to see
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this very good piece of legislation reduced by the power to make regulations which interpret the words "borrow money" to mean "borrow at the market rate".
We have all sorts of devices for getting money below the market rate. What is the Small Business Development Bond? I do not mean the Small Business Development Bond as talked about in the budget, I mean the Small Business Development Bond principle, which says that if you lend money for a worthwhile purpose to such and such an agency, you are not to be taxed on your income from that loan.
If I lend $1,000 on the principle of the Small Business Development Bond to the Farm Credit Corporation, I know this will only give me 8 per cent on my money. That is just as good to me as lending it out on the market at 16 per cent, because I know I will not be taxed. We have had this principle in Canada since the First World War. It is used extensively and continuously in many states of the American union, and it has been used since 1979 through the Small Business Development Bond under the Income Tax Act.
Let us put in clear-cut English what this bond means, and that it includes any other type of bond. Then, if people want to lend their money on the principle of the Small Business Development Bond, they will know they will not have to pay tax on their income from that bond. They are then quite willing to accept half the dollar interest rate because they know they will not be taxed.
The Farm Credit Corporation will be able to act just like a bank, getting its money not only from farmers but from anyone who wants to lend at half interest rates. The corporation can then turn it over to farmers at roughly the same rate; a half per cent or one per cent more.
I cannot say that this measure will answer all the problems, but I almost guarantee that the minister will have access to millions of dollars in this way, making his life a lot happier; much happier than if he had to rely on a few million dollars from the Consolidated Revenue Fund.
I am not going to bother giving the other example I had, Mr. Speaker, because this matter was settled to my satisfaction some years ago. Parliament decreed that we should not tax other governments or municipalities which are spending money for worth-while purposes, like education, building roads, and so on: yet we have regulations in effect in Canada under which we tax municipalities who are spending money on vehicles for educational purposes. Parliament never meant that, but we went on, because we were slaphappy in the way we drafted the legislation, accepting the word of the lawyers that "may" will cover everything. That is not learning from our mistakes.
In conclusion, I made my case on second reading that the principle of the Small Business Development Bond should be used where the word "bonds" appears. Latterly, I sought legal advice from the House and from other sources as to what was necessary, and in every case I was told the language was clear enough; that the minister "may", or the corporation "may",

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borrow by any means-that you do not need any more clarification. I say I was fooled by that type of language before and I am not going to be fooled again. Draft me a regulation which will make it absolutely certain that they will consider the principle of the Small Business Development Bond.
The amendment you have before you does not quite say it like that. It says, "for greater certainty", and there are many precedents for that type of thing in our legislation, "the exression 'bond' referred to in subsection (1) includes Small Business Development Bond." What I mean there, and I want this to be written into the record so it will be just like the legislation, is that it refers to the principle of the Small Business Development Bond. I do not know any other way of writing it except the way I say it here.
The principle is clear. It is not the principle of the November 12 budget, which said that Small Business Development Bonds would only be given to persons in dire straits or in business difficulties. I want them available to any person on the simple principle that when you are investing your money in worth-while social purposes you will be glad to do it at half the interest rates as long as you know that the money is passed on at half interest rates.
This may be considered redundant by the lawyers, but I am asking Parliament to put its foot down and back up the minister. Give him his clauses as they are here. "For greater certainty" means just this. I wish some of my colleagues even on the government side would stand up and make an amendment that income-averaging annuity techniques qualify where it says "by any other means", its should say, "for greater certainty this means income averaging-annuity contracts."
Since we cannot now have IAAC under the present budget, let us have it under the Farm Credit Corporation. Let us say that of the millions of dollars invested in the Farm Credit Corporation, when some farmer sells off his cattle and wants to spread his income over five years or ten years, he can invest his money in the Farm Credit Corporation at half interest rates and pay his tax each year as he gets his income. Let the Farm Credit Corporation do its duty, get access to all the money it needs, through a principle under which no one suffers, and everyone benefits. Thus we will help the minister by putting this so-called redundant amendment of mine in the legislation. I do not think it will be ruled out of order, Mr. Speaker, on the basis of precedent. It can only be ruled out of order under the "con" arguments of a lawyer who tries to say it is already cleared up, when we know from the history of the last 20 years that it is not clear.
We have a committee called the Standing Committee on Regulations and Other Statutory Instruments. It hears hundreds of cases like those I have enunciated here. It tries to put them on the Order Paper to get something done about them; but for every one mistake it finds, there are hundreds that never get action. Let us not add to the mistakes of this Parliament-and they are many-in this particular case. The minister does have a good bill, he does have a good organization here in the Farm Credit Corporation, but he lacks the money to do what he wants to do, with an interest rate under
which it would be possible to make farming pay. I am sure the government will back him. All we are doing is putting a little crimp into those smart guys who draft the regulations and attempt to tell us that this was not necessarily directed by Parliament. That word "may" does not force them to do anything. Therefore, I am asking for co-operation from all members of the House in having this amendment accepted. The amendment is not expressing the view of just one political party or another, it is really speaking on behalf of all members, members who may some day be ministers and have the job of administering laws that Parliament has passed, only to be scuttled by an abuse which comes from the misuse of the word "may", and the particular language which we have to follow in the legislation. I hope other amendments of the same nature will come forward. I hope this amendment will be accepted.


Hon. E. F. Whelan ([Minister of Agriculture):: Mr. Speaker, later on I will touch on the presentation made by the hon. member concerning this bill. As Minister of Agriculture I must admit that I agree with much of what he says. I also have the legal advisers which he talked about, and ministers who are not lawyers, but have to make decisions, still have to depend on them to some extent. I will touch on that point later.
It gives me great pleasure to address the House on this most important topic, the amendment to the Farm Credit Act. We have had occasion in the House and in the standing committee to thoroughly discuss and present our views as Members of Parliament on this subject. It gives me great satisfaction to note the general unanimity of support given to this bill and to the work of the Farm Credit Corporation, which is apparent if one reads the speeches in the House or the minutes of the committee. The interest and support expressed by Members of Parliament is a direct reflection of that expressed in the farming community. Credit has become the most critical issue to the survival of many producers today. Therefore, I see it as vital to agriculture that the Farm Credit Corporation be allowed to expand its access to funds.
Many related topics were put forward by members during our deliberations. These concerns cannot all be reflected in this piece of legislation, but I wish to assure members that I have taken note of them. Bill C-88 is an integral part of the total approach the government will be developing as part of the agri-food strategy.
I would now like to take a few moments to recapitulate the main points being proposed in Bill C-88. Clause 8 provides the Farm Credit Corporation with the authority to borrow from sources other than the Consolidated Revenue Fund. The hon. member who just spoke made reference to this step as being a giant step forward. The Farm Credit Corporation is currently funded entirely by loans from the Consolidated Revenue Fund. This amendment would allow FCC to complement these borrowings with funds from the financial markets. In addition to bonds or debentures, special investment instruments could be offered which could be especially attractive to farmers,
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particularly retiring farmers who wish to retain their investments in agriculture.
Total long-term credit extended to farmers from all sources in Canada has risen by over 20 per cent annually from an estimated $655 million in 1975 to an estimated $1.9 billion in 1980. Until recently, the FCC supplied over 70 per cent of all long-term farm credit extended. In 1980, the Farm Credit Corporation extended 26 per cent of the total long-term credit and was expected to extend about 20 per cent in 1981. Budgetary restraints, rapidly increasing capital values and changing economic conditions haved placed additional pressures on the Farm Credit Corporation to meet the growing demand for long-term credit. The amendment to allow the corporation to borrow from the financial markets will help the corporation to meet this demand for increased funds. Through time, as the mechanisms for borrowing are put in place and the corporation establishes itself in the financial markets, a progressively larger proportion of its funds could be obtained directly from the financial markets.
Clause 7 would increase the capital of the Farm Credit Corporation from $150 million to $225 million. The corporation's borrowing authority is limited to 25 times the capital- that is in Section 13 of the act. The maximum borrowing authority will be reached early in 1982-83. This amendment would thus increase the corporation's borrowing authority from $3.75 billion to $5,625 billion.
Clause 2(2) relates to the expansion of the definition of farming to include any other husbandry activity prescribed by the corporation. As currently defined in the act, farming includes livestock raising, beekeeping, dairying, fruit growing and all tillage of the soil. In addition to the activities currently defined as farming, this amendment would authorize the corporation to prescribe in writing any other husbandry activity as farming for the purposes of the act.
The present definition is inclusive and creates some ambiguity. With agricultural practices changing and new and varied enterprises being introduced, the amendment would allow the corporation to designate husbandry activities as "farming," as required. Since these entreprises are often high risk, it is often difficult for farmers to obtain appropriate private sector financing. With the flexibility provided by the proposed definition, the Farm Credit Corporation can more adequately address the needs of those venturing into new and changing production practices.
Clauses 19 and 20 remove the present 35-year age limitation for loans to phase in farmers and remove the requirement for life insurance in the case of certain of these loans. The Farm Credit Act presently gives the FCC the authority to make loans to applicants under 35 years of age when farming is not their principal occupation, but intend to make farming their principal occupation within five years of receiving the loan. This restriction is considered to be incompatible with the spirit of the Canadian Human Rights Act. Removal of the restriction would allow applicants of any age to participate in the phase-in program.
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Clause 11 provides the authority for the corporation to disperse up to 30 per cent of a loan on the basis of acceptable security until such time as the mortgage registration and other security requisites for the loan are completed. At present, the Farm Credit Corporation makes loans on the security of mortgages on farm lands or farm lands and chattels. Currently, no mortgage advance is made unless the mortgage registration is completed in accordance with provincial requirements. This amendment would help to meet the needs of more farmers since the corporation would be able to disperse up to 30 per cent of the loan before the long process of mortgage documentation is completed.
Again, as the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) said, many times it is lawyers who are putting it on the back burner and not really handling it as fast and efficiently as we would like to see. But there are circumstances which sometimes do not allow them to move as fast as they could.
The dispersement of a portion of a loan prior to mortgage registration would save farmers the cost and inconvenience of interim financing until the mortgage funds from the corporation are available. For example, this would assist farmers who must make a payment to initiate a land transaction or to make a cash payment to a building supplier to take advantage of a discount. There are other ways in which this could be an advantage, but I will not touch on them now.
Clause 9 provides that the corporation, with the approval of the Minister of Finance (Mr. MacEachen), may maintain accounts in its own name in any bank or financial institution in or out of Canada. The corporation presently is limited to maintaining accounts in its own name in the Bank of Canada or in chartered banks designated by the Minister of Finance. This amendment would provide more banking flexibility which would improve the cash management opportunities of the corporation and its financial performance.
For example, should the Farm Credit Corporation at some time be able to borrow Canadian dollars at a lower rate of interest in the Eurobond market than in the Canadian financial markets, this banking flexibility would allow the FCC to make the necessary banking arrangements to accommodate the administration of such transactions.
A further amendment set forth in this bill provides that the maximum amount of a loan which may be oustanding to an applicant or applicants be prescribed by regulation rather than in the act. Currently, the limits specified in the act are $200,000 when there is one qualifying applicant in a farming enterprise, and $400,000 when there is more than one. It is no secret that financing of farming operations is getting more and more expensive all the time. Many people do not realize this. If the Farm Credit Corporation is to meet the needs of modern agriculture, it must have the flexibility to adjust the loan maximum upwards when necessary. Transferring the loan limits from the act to regulation will provide an opportunity for the corporation to respond more quickly to changing

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agricultural conditions. At this time we are proposing to increase these limits to $300,000 for one qualifying applicant, and $500,000 when there is more than one applicant.
Part II of the bill represents the authority needed by the Farm Credit Corporation to rebate five percentage points on loans made under the special farm financial assistance program. This authority will allow me to obtain the funds through the departmental estimates.
I would like to take this opportunity to report on this program which ends on Wednesday of this week, March 31. As of March 15 the Farm Credit Corporation had approved $44.7 million of the $45.4 million allocation to the program. That does not sound like a magnificent sum, but it represents tremendous importance to 368 borrowers.
The breakdown by region is as follows: British Columbia, 15 loans, $3,347,200; Alberta, 20 loans, $4 million; Saskatchewan, 48 loans, $5,610,290; Manitoba, 42 loans, $5,998,800; Ontario, 123 loans, $15,362,500; Quebec, 82 loans,$6,954,800; the Atlantic provinces, 38 loans, $3,240,700. The total is $44,514,290. We know that the balance of the program will be used up or has been spoken for already. This progrm reflects only a part of a special effort of the government to provide assistance to farmers in serious financial difficulty.
The small business bond has been extended to a great number of farmers who would not have had access to these lower interest rate loans from the banks prior to the budget announcement. In a number of cases the farmers' problems were solved by a combination of the two programs. We were successful in many instances where the Farm Credit Corporation, the farmer and the local bank manager worked out a very good program. Where the Farm Credit Corporation lent the maximum to the individual, the small business bond would be used by the banker in many cases. This happened in not nearly as many cases as we would have liked, but it did in many cases. I have only touched on the highlights of the bill to re-emphasize the impact of this legislation.
In response to the hon. member's motion to amend Section 13(1), I would like to point out-the hon. member will dispute this, as some other hon. members will-that this section presently allows the FCC to borrow by any means and does not exclude the concept of Small Business Development Bond. However, after listening to the hon. member, I can understand that his amendment is somewhat different from just Small Business Development Bond. As I understand this amendment, the hon. member would like to see the FCC borrow funds by issuing bonds-not necessarily small business bonds-to investors. Because the return to the investors would be given special tax consideration, the cost of funds to the FCC would be reduced. The benefit of the lower costs of funds could then be transferred to farmers who would borrow from the Farm Credit Corporation. My advisers say this would require amendments to the current-


Thomas Gordon Towers: Tell your advisers where to go.


Eugene Whelan: -small business bond, if we were to use that concept, for instance, which is limited to a maximum of
$500,000. However, I know from what the hon. member has said already that it is quite different from using the small business bond. The concept of using a bond would not have any limitations on borrowing from the private sector and letting a farmer transfer the funds into the Farm Credit Corporation, for example, if he sold property, livestock or whatever.
We have already received one letter of objection from a lending institution in Canada saying we would probably dry up the money market. That objection was from the head of the credit unions in Canada. He was not saying that for sure, but he was expressing some doubt as to whether we would be attracting too much away from that operation. That is the only organization which has made that representation to me.
For the FCC to obtain substantial funds under such a program, individual investor limits would have to be increased substantially so that the FCC could obtain $250 million to $300 million annually under the program, in addition to approved CRF funding.
I think the proposal certainly has potential. I do not know how long we will be reviewing this, but it has been, and is being reviewed by officials. However, because Section 13(1) does not exclude what the hon. member is suggesting, the amendment as suggested is not necessary, again according to my legal advisers. In either case, the concept of the small business bond would require complementary amendments, I am told, of the Income Tax Act, to be operational.


Mr. Mayer:: So do it anyway.


Eugene Whelan: Based on the positive comments I have heard from various members, and because of the urgency of this legislation, I urge hon. members to give consideration to speedy passage of Bill C-88.
I want to say something again about what the hon. member has proposed. He has dealt further tonight with what he wants to do with this. I do not think he and I disagree very much. My advisers tell me that I have the authority to move into the bond market and so forth, but moving in such a way would mean granting the corporation more authority than has ever before been granted any corporation. We want to make sure we are doing this right.
I had a meeting with the minister of agriculture of the province of Ontario today, and one of the things he is concerned about is where I am at, where the government is at or where Parliament is at with respect to the Farm Credit Corporation bill. The province of Ontario has a program to provide for immediate cash flow, but the provincial government sees a need for the national lending institution to move long-term credit. We had discussions about long-term credit, how much is being used in Canada today and who is making it possible. I think he agreed-although he might not have put it in such language as to say he was agreeing with me 100 per cent-that the private lending institutions have not understood rural Canada when it comes to long-term credit. A good many farmers in difficulty are farmers who, if they had been given
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really long-term credit at reasonable rates of interest, would not be in the difficulty they are in today.
Again I come back to the Farm Credit Corporation. That corporation probably has more ability, knowledge and experience in understanding agriculture and rural Canada than any other lending institution, because that has been its job since it was conceived and put together. We want more money. We want the corporation to move back into lending. We would like it to be lending not just 20 per cent of long-term money but perhaps 60 per cent in the next year or at least the next two years.
We would like the corporation to recoup its position as the main lender. We would like the corporation to lend not just to those in dire straits, and not just to be the lender of last resort, but to lend to farmers-I believe the hon. member said this- for any need in rural Canada. If we can raise this kind of money, then I am sure what the hon. member opposite has said and what I have said about the future of agriculture and the challenge that exists in agriculture is true. It is going to need the kind of lending program, the kind of institution that understands the situation so it can forge ahead and provide the kind of financial lending program necessary for farmers.
In Canada today there are 320,000 farmers and it is forecast that within the next 18 years 425,000 farmers will be needed to produce the food that is necessary, not only to look after our expanding population but also to take care of the needs of millions of people in other parts of the world. Canada is one of the few countries which can undertake to do that. We have the ability, the land, the technology and the scientific information that is necessary.
Many countries, big and small, developed and developing, are envious of our agricultural production. They are amazed at what we do in this land of ice and snow. They might be more amazed, Mr. Speaker, at what we could do if we pass this bill speedily. If we could do that, then we could provide the things that are necessary for agriculture, and by helping agriculture, help all of society.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Will the hon. minister accept a question from the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton)?


Eugene Whelan: Yes, Mr. Speaker.


Francis Alvin George Hamilton: Mr. Speaker, my question is very short. The minister mentioned that there had been some protest from private enterprise, regarding credit unions. Apparently private enterprise feels that if we establish the Small Business Development Bond, that is, borrowing at half interest rates and lending at half interest rates, the tremendous amount of money this would generate could dry up the commercial market. As a politician, would the minister not agree that this really is what is necessary-to throw the fear of God into the Financial institutions so that
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they could then provide some real competition in the provision of credit to agriculture.
I should like the minister's response to that suggestion. Why not put my suggestion into written form and scare the hell out of them and get some real competition going in lending money to farmers?


Eugene Whelan: Mr. Speaker, I think it would be better to scare the hell out of them than anything else. The hon. member has expressed concern about the amount of money that would be attracted. I was amazed that he paid that much attention to what we said. I believe he referred to what we said in committee. I repeated the proposition of raising money by special concessions made to people who invest in the Farm Credit Corporation-giving them a tax break. They would receive a lower rate of interest but would not be taxed on it. Perhaps the hon. member was expressing a personal opinion when he said he thought this would attract too much money into one area. I do not think we ever had that idea, but if I could have as much money as is needed to take care of a national farm lending program, then I see nothing wrong with that.
Other countries are trying to make their inefficient agricultural industries better and Japan is an example of that. In that country money is lent to farmers at 3.5 per cent interest. Of course there are very few large farms in Japan; the average size of the farm there is about 2.5 hectares.
The principle appeals to me, Mr. Speaker, but I do not know if we would go as far as he suggests, although I think we could with this legislation. The hon. member disagrees with me and my advisers; he does not think we can go that far and scare the living hell out of them. I do not see too much wrong with that.
I have a long association with co-operatives, Mr. Speaker. When we started co-operative insurance in Ontario through the CIAG, the whole idea was to assist rural people. When the co-operatives got into the money market, however, they moved into the urban areas. I was an agent and a director of that company. It is one of the largest, all lines insurance companies in Ontario at the present time, if not the largest. It has some rural mortgages in Ontario but most of the company's money is invested in the same places that other insurance companies invest so that it can operate in competition with them. A cooperative insurance company is taxed in the same way as any other insurance company. It does not benefit from special taxing privileges as some people believe. It is taxed in the same way as any private insurance company. I do not know if I have answered the hon. member but we do not disagree too greatly.


Victor Fredrich (Vic) Althouse: Mr. Speaker, I rise this evening to speak to the amendment to the Farm Credit Corporation Act offered by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) in which he attempts to clarify the language contained in the act. I think the minister has given the reaction of the legal profession to that amendment. I am not going to spend too much time arguing for or against the need for clarity in the language of the act. Generally speaking, I think bills such as the one before
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us should provide a fair amount of flexibility to the lending institution so it can meet the borrowing needs of farmers. Those needs change very drastically from time to time and I will come to that point later in my remarks.
I should like to comment on some of the argument which occurred in the past few minutes between the hon. member for Qu'Appelle-Moose Mountain and the Minister of Agriculture (Mr. Whelan) regarding the reaction of some of the financial institutions to the concept of the small business bond or the agribond or whatever name is attached to the credit instrument that is being proposed. 1 am aware that some of the credit unions are concerned about the use of the bond for the Farm Credit Corporation.
Most hon. members who are present this evening know that to a great extent credit unions get their financing from deposits by people in rural communities. A great many of the deposits in prairie Canada-and I am informed that this is so in Quebec and the maritimes-come from retired farmers. Because they are part of the community and because they believe in the credit union movement and the development of their community through co-operation, they put the proceeds of the sale of their farms back into the credit union. In many instances the credit union lends the funds to the next generation of farmers. This is what most of us have in mind for the agribond or the small business bond concept as it would apply to the Farm Credit Corporation. I think most of us see the financing of agriculture ideally as coming from the retiring generation of farmers who, to a large extent, help finance the new generation of farmers.
We think the problem is not whether the Farm Credit Corporation will receive the deposits that credit unions cannot receive. The problem should be more properly addressed at the level of the Income Tax Act. When this becomes possible, it will be of very little difference to farmers, who are investing or retiring, in which institution they decide to invest moneys from the sale of their businesses. We think that the Income Tax Act should be changed in such a way that it would benefit farmers, whether they use the Farm Credit Corporation or local credit unions. It would strictly become a choice as to which lending institutions they choose to invest money in. There would be no violent shifts in the lending patterns of rural Canadians. The coming generation would have an enlarged pool of capital from which to borrow money to set up business.
All of us in the House recognize the importance of increased amounts of money being made available to farmers, particularly beginning farmers or those who want to expand fairly small operations. We should spend a few moments this evening looking at the real problem in agriculture which developed over the last eight to ten years. I do not think it is strictly one of farmers being short of finances or borrowing power. Rather than strictly a shortage of funds, we in fact have a farm income crisis which is worsening at an ever-increasing rate. If legislators do not start to address the real problem, no amount of increase in funds to the Farm Credit Corporation or to any
other lending institution will cure the problem. The disease is becoming rampant. Net farm incomes across the country have remained relatively the same since 1974. I do not think any other segment of our economy would have to admit to that, but realized net income in the case of Canadian agriculture in 1974 amounted to $3.5 billion. In 1980 it was $9.3 billion. In 1981 it rose to $4 billion, but in 1982 it is expected to drop to $3.4 billion, which is slightly lower than it was in 1974.
In intervening years incomes did not slide very much. In this era farm prices have not risen as fast as their costs. This is not new to agriculture, but it is catching up. Admittedly in that period of time there was rapid inflation in the value of farm assets. In 1974 there was approximately $40 billion in capital tied up in the Canadian agricultural industry. In 1980, according to the figures provided by the Department of Agriculture, those assets approached $100 billion. We see that the value of capital has increased about three times.
From a banking point of view agriculture has been a good bet. The value of assets continues to grow rapidly. Although the amount of money lent by banks and lending institutions has increased rapidly, they feel fairly secure because the market value of the collateral provided by farmers has risen faster. In 1974 there was almost $7 billion of farm debt. In 1980, the last year for which figures are available, it jumped to $16 billion. Approximately $1.8 billion to $2 billion per year of extra debt is accruing to the farm community because incomes do not cover all costs. This is not a healthy situation.
There are other ways to look at investment in agriculture. Turning to 1974 once again, and looking at returns on equity, the amount of income from the collective investment of farmers in agriculture was 10.9 per cent. We must understand what the return on equity figure covers. It does not cover any labour provided by farmers or their families. It does not provide any return for their management capabilities. It is simply a total return which they probably saw as return for labour and management. It is not the method of bookkeeping an average corporation would use, but it gives an idea of what has happened in the last eight years.
In 1974 the return on investment hovered around 10 per cent. In 1980 the return on investment, not counting labour or management abilities, was something under 4 per cent. The estimate for 1982 is not the return on investment Canadian Pacific expects. Unfortunately there are no economists in the Department of Agriculture to perform an analysis of the cost of agricultural production. I hope the government considers hiring a railway economist by the name of Snavely who did a very competent job for the CPR on behalf of the Department of Transport. He assumed that the return on equity before taxes should be 35 per cent and that on money borrowed by the railways it should be 25 per cent. Farmers would be pleased to have such an analysis of their business.
We have done some preliminary work which indicates that wheat farmers, for instance, would receive a return of about $13 per bushel instead of the current $4.30. It would make
March 29, 1982

quite a difference if the same rules were applied to the agricultural community as the government is willing to apply to large corporations such as the railways.
Farm debts are increasing at a rapid rate. Payments for interest have risen from $473 million in 1974 to $1.6 billion in 1980 and by the end of 1981 it was estimated that they would be well in excess of $2 billion. The rate of increase in the cost of interest was approaching six times and the value of farm capital rose about three times. Realized net incomes remained the same, although 1982 dollars purchase less than half that of 1974 dollars. I hope we are beginning to understand just why many farmers are facing bankruptcy and why farmers are wanting to sell out, looking for buyers but often finding there is no one interested. This situation occurred because of a real decline in net incomes, together with the extra debt farmers had to accumulate at a time when interest rates more than doubled. 1 think that explains why the cost of maintaining the credit end of farming has increased more than six times since 1974.
What can we do about this? I think Bill C-88 is an attempt to get some money to help farmers who need to borrow even more in order to stay in business a few additional years. But that is only a temporary solution. A real solution has to be more long term. But if there are long-term solutions found, it does not mean we in the House of Commons and others across the country can sit down and do nothing.
Canada's agricultural producers require a decent level of stabilization immediately so they can begin to recover at least their cost of production. To prevent that from being too expensive for federal and provincial treasuries most farm commodities need a better marketing system. They need the kind of marketing system that will extract the maximum from the free market. Some commodities are covered under marketing boards which come close to doing that, but they cannot always extract the full cost of production from the market. Occasionally they will need assistance from the public purse by way of stabilization programs. Those two things go together so the public purse does not get ripped off. There has to be marketing organizations to do the best job possible in the free market.
Our party has been saying for years that we need adequate marketing boards for the various farm commodities, and as an adjunct there must be stabilization programs to see that farm incomes are adequate to continue to refinance agriculture from year to year. Various farm organizations have been telling us this same thing. The Canadian Federation of Agriculture presented a brief to us during our hearings. We heard similar statements for the National Farmers Union. Recently all Members of Parliament had calls from a group called the Canadian Farmers' Survival Association. That association told us there was a need for an immediate moratorium on receiverships and liquidations. They told us it was time to reinstate the old Farmers' Creditors Arrangement Act, to bring it up to date, put into effect from 1981 so that farmers would not be
Farm Loans
forced out of their homes and off their land. They told us it was time to reinstate some of the programs established in the 1930s under the ARDA program whereby the government could buy the farm from the farmer and allow him to lease it back, giving the farmer a home and a source of income for up to ten years, after which he could arrange to repurchase the farm.
To some extent this is reminiscent of the land bank program in the province of Saskatchewan which was introduced during hard times in 1971. Farmers having difficulty remaining in the business were given an opportunity to refinance by selling their land to the land bank, using the proceeds to pay off their debts, to increase their capitalization in buildings and equipment and to get on a sound financial base. They had full tenure on that land until the age of 65 or until such time as they wanted to buy it back, which could occur after a five-year period. Some parts of the country have initiated similar programs. It is time the federal government and federal institutions started to look at these approaches in order to solve what I consider to be the real problem.
Later on in this debate I would like to present an amendment. I hope the House will give its unanimous consent to at least discuss it. The idea of a proposed amendment is to provide the Farm Credit Corporation with more flexibility-


Mr. Deputy Speaker:: Order, please. With all due respect to the hon. member, he cannot speak to a proposed amendment at this point. He can speak to the amendment before us.


Victor Fredrich (Vic) Althouse: Thank you, Mr. Speaker. I am aware of that. I was simply pointing out to the House and to government members that I have an amendment to propose, and I hope we can get to it whenever the time is appropriate.


Mr. Marcel Dionne (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I should like to say a few words about the amendment proposed by one of the members on the other side. If I understand correctly, the purpose of the amendment is to have the corporation borrow money by issuing bonds of a type that are currently known as small business development bonds. Since in this case, the investor's income is subject to a special tax rate, it would reduce the corporation's financing costs. This reduction in costs could then be passed on to farmers borrowing from the Farm Credit Corporation. Mr. Speaker, it is true that in present day agriculture, financing is extremely important, since family farms have expanded to the point that hundreds of thousands of dollars are invested in these enterprises. It is obvious that if we are to have viable farms, they must be mechanized and modernized. Especially today, the challenge to the Canadian farmer is increasing, because with the policies introduced by the Minister of Agriculture (Mr. Whelan) in recent years, there is increasing pressure on Canadian farmers to produce more food for developing countries.
Setting up all these mechanisms will cost money, and Canadian agriculture and Canadian farmers cannot afford to

March 29, 1982
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turn their backs on these developments if they want to maintain their outstanding record. To make agriculture a paying proposition, we shall also have to use our marketing boards and make an extra effort to give farm producers a reasonable level of income security. Our agriculture may be the best in the world and our productivity as well, but if we cannot provide farmers with the assurance of a steady income from agriculture, I feel that even if we give our farmers the best tools on the market, they will not be able to cope with the problems that may occur in this area, considering the seasonality of many crops. In fact, marketing boards and productivity and the rest is not enough. We need other tools such as, for instance, Canagrex, for which legislation has passed first reading, and we hope that this bill will prove to be a very useful mechanism for our farm producers. Since Canagrex, which is so fittingly seen as a corporation responsible for exporting Canadian farm products to world markets, will emerge as a go-between through which all levels of government will be able to enter into government-to-government dealings, many competing forces which might have been unpleasant from the beginning will be eliminated and will no longer exert pressures on the backs of the farm producers.
Still we have had some good news concerning Canadian pork producers since a very dangerous infectious disease has just struck the hog population in Denmark, and this has brought about an increase of about 10 cents a pound in the price of Canadian pork in the last few days, and it is forecast that Canadian pork prices will continue to increase on the Canadian market by perhaps 10 cents more. Such a disaster is unfortunate for hog producers in Denmark, but in view of the seriousness of this disease, we have been informed that Danish hogs may be quarantined for six months to five years depending on the extent of the disease. Of course, everyone will agree that the Japanese market, which was supplied mostly by the Danish producers, will have to turn to the Canadian market. The United States also was importing much of its pork from Denmark and will now have to turn to the Canadian producers. All I want to say, Mr. Speaker, is that after a disastrous period for Canadian hog producers, this will probably have good results for them.
As for our western beef producers, they have entered a cyclical production period and they are now facing many marketing problems. Of course, for some time now, they may have failed to develop the tools which we believe they should have, but as anyone will agree, it is not up to the Canadian government to tell Canadian farm producers which tools they should use to be more prosperous or improve their profitability. Of course, as he wanted himself, the Minister of Agriculture has wished sincerely-and I believe that this is also the wish of the Canadian government-that the Canadian beef industry would submit a program which would provide for better marketing and better research and perhaps enable them to offer their products under other forms which could increase Canadian consumption.
Once again, all this is related to marketing and it would perhaps be useful for our Canadian producers to promote the
nutritional value of Canadian beef, which I believe to be among the best in the world. Mr. Speaker, we have spoken in the past about the productivity of our Canadian producers. This is, of course, a matter of comparison in the North American context. The United States, which produces all year round, have not succeeded in getting that much ahead of us. That is to say that if we compare the total production cost for farmers in the United States and in Canada, even with a climate which allows the Americans to produce twelve months a year, the difference in the cost of farm production is no more than 1 per cent. You must therefore agree, Mr. Speaker, that the Canadian producers are at the forefront of progress and are constantly improving. And I will also make a comparison that may hint at a possible solution-we saw that Canadian milk producers during 1974 and 1975 had to cope with tremendous problems, survival problems because they were selling below cost.
It will be remembered that in 1976, on Parliament Hill, right here in Ottawa, thousands of Canadian milk producers demonstrated against the fact that the Canadian government had imposed a quota system. Possibly this was one of the first major products for which the government imposed some form of a quota system because all across Canada dairy farmers were producing without being aware of the needs of our domestic market, and in so doing helped create tremendous surpluses that were costing millions of dollars in storage costs. Therefore, the imposition of quotas may have been a somewhat difficult decision to make in 1976, but Quebec producers now enjoy what may be the best dairy policy in the world. So much so that recently the Americans came to Ottawa to look at that policy and see what benefits it could have in the United States.
The fact is that in the United States today it costs $250,000 an hour for storing surplus dairy products, and this amounts to approximatly $2 billion a year in storage charges and American surpluses are getting larger and larger. And this year we are told also that there will be further increases in the number of milch cows in the United States. Therefore, the freewheeling type of marketing they have in the United States only tends to weaken the American industry. Again, the Canadian government must be commended for having had that courage, and as I said, it must be acknowledged that in 1976 fixing a quota on Canadian production was a difficult decision to make. Producers always had been in the habit of producing at whatever cost, so creating surpluses. Therefore, we might take a hint from that in our future farm policies, the marketing board approach that was then imposed but today is giving farmers an ever-increasing sense of security. Let us hope, Mr. Speaker, that the policy currently under negotiation will maintain that policy over the coming fiscal year to the benefit of our Canadian milk producers.
I would like to comment further on this amendment, because the proposal certainly deserves consideration and, of course, it is now under study. However, since clause 13 does not exclude the small business bonds, the amendment put forward by my hon. colleague may not be required, because somehow the Income Tax Act should be amended accordingly.
March 29, 1982

Currently, the Canadian Farm Credit Corporation seems to be more and more generous and I hope Canadians will use it in the best possible way because, as I said, Canadian farm financing is getting more and more complex by reason of our needs and of our high production levels. If we are to maintain that high productivity rate producers will obviously need additional financing. But, as we have seen so well in the bill before the House, and in the history of the Farm Credit Corporation, Canadian farm producers have at their disposal considerable sources of financing which take into account production costs, the cost of farm equipment and the cost of land.
Naturally, Mr. Speaker, should we, together, feel that there is need for other sources of financing, then so much the better for the Canadian farmer, provided that money is well spent and also that the cost of borrowing it does not price our products out of the market, since other countries may offer those same products at lower prices. But I have confidence in our Canadian farmers who have always managed to produce at competitive prices in the past. So, it is to be hoped that every stage of this bill, which will be of benefit to all Canadian farmers, especially in these difficult times when they are increasingly in need of financing, will be passed by the House.


Mr. Peter Elzinga (Pembina):: Mr. Speaker, may I just begin by indicating that I would like to align myself with the remarks of the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), and the amendment he has placed before the House of Commons. In the period of time I have been here, I have noticed that the comments of the hon. member have always made great sense, and have also made great reading. I cannot say the same thing about the words of the Minister of Agriculture (Mr. Whelan). When we look back over the ten years he has held that portfolio, we find nothing that even he would be able to point back to as a lasting testimony to his role as Minister of Agriculture. In reality, the legacy of this minister is a ten-year agricultural decline in Canada.


Eugene Whelan: Not true.


Peter Elzinga: When the hon. member for Qu'Appelle-Moose Mountain put a question to him he could just as easily have asked the Minister of Agriculture when he last shingled his house, considering the answer that he received to his question. The minister indicates that this amendment will not meet with the consent of the various lending institutions. I am glad to see that the minister is a great advocate in support of the lending institutions. On so many occasions outside this House he has said exactly the opposite. In fact, he said that the habits of the lending institutions were scandalous.


Eugene Whelan: I said one. If you would just really be honest.


Peter Elzinga: I am hoping you will respond to the comments I have made. On two occasions in this chamber you have voted against imposing an excess tax-
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Mr. Deputy Speaker:: The hon. member should address his remarks to the Chair.


Peter Elzinga: My apologies, Mr. Speaker. On two occasions in this chamber, the Minister of Agriculture has voted against imposing an excess profits tax on the banking industry. Yet, when he travels though the country he is willing to tell the farming population that he feels the behaviour of the banking institutions is scandalous and that something must be done. When he has the opportunity to do something, he votes precisely opposite to what he is saying throughout Canada.


Eugene Whelan: Not true at all.


Peter Elzinga: In speaking to report stage, I would ask the minister to be honest because it is recorded in this chamber that his vote was in opposition to imposing an excise profits tax on the banking industry, yet the minister has no hesitation in publicly saying across Canada that he is in support of this tax.
I would like to deal more specifically with the report stage of Bill C-88. We basically support this legislation because it would allow the Farm Credit Corporation to borrow supplemental funds from the private marketplace, it would increase the board of directors from five to seven members, it would remove the 35-year-old age limitation on Section 33 loans, and it would update some of the language used in the Farm Credit Corporation legislation. I earlier shared with the House the fact that we basically support this legislation, as do the majority of farm groups throughout Canada. We are delighted that the minister has given us the assurance that, because of this legislation, he does not intend to cut back on the financial commitment of his government to the Farm Credit Corporation.
Since I did have the opportunity to make a number of comments on this legislation during the second reading debate on February 1,1 do not plan to be very lengthy this evening. I want to state that we on this side are very disappointed that this minister of agriculture has not given agriculture the priority it merits. In reality, the farmers of Canada have been neglected for the past ten years.
I was first elected in 1974 and I remember the election campaign. The farming population had a great deal of respect for our Minister of Agriculture, but that respect has turned sour and cynical simply because he has not lived up to the repeated commitment he has given to the farming population throughout Canada. The record will show that farm bankruptcies have increased by some 50 per cent this past year. The November 12 budget introduced by his government has been a disaster to the farming population in Canada. The many budget provisions, as they pertain to income-averaging annuities and capital gains provisions, are disastrous. This Minister of Agriculture promised he would do something about the capital gains provisions. Instead, they have worsened as they relate to the farming sector. In relation to the capital cost allowances which the farming population has traditionally enjoyed, this budget will increase the tax payable in the first year in which farm machinery is purchased.

March 29, 1982
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I would like to return to the subject of capital gains because it is a pet peeve of many of us in this chamber. In at least one campaign, the Minister of Agriculture promised he would change the valuation date from 1971 to 1974. That was another commitment which has not been met. If I had my way, we would eliminate the capital gains provisions as they relate to bona fide farmers, because realistically, the farming population uses the income derived from the sale of property as a pension fund. Farmers do not have the opportunity to invest in so-called pension plans, as do many in the public service and in other areas.
I have already dealt with the hypocrisy of some of the minister's statements relating to the banking industry. I have indicated how the minister has spoken differently in this chamber on several occasions than he has spoken to farm groups throughout Canada. Because of the lack of action of this federal government relating to the farming sector in Canada, various provincial governments have had to introduce agricultural programs of their own. We do not have an over-all national agricultural policy. That is the real legacy of the ten year term this minister has had the opportunity to serve in that portfolio.
When the hog stabilization plan was announced several months ago, Alberta was to be excluded. That is how much of a national policy we had, simply on the discretion of the minister himself. He was going to exclude one province from participating in this program. Quite frankly, we were delighted to see the minister's reversal. He finally indicated that he would allow the province to participate. The province of Alberta itself has had to introduce programs relating to the beef and sheep industries. I recently asked the Parliamentary Library to compile a very excellent paper on the various agricultural programs available under the provincial governments. I would simply like to commend the library for the super job it did concerning those programs. It is an extensive paper, simply because the provincial governments must involve themselves in what I consider to be a national area because this minister has let the Canadian people down.


Eugene Whelan: Shame on you. We proposed income security for-


Peter Elzinga: The minister should be very ashamed. I am amazed at his response when the hon. member for Qu'Appelle-Moose Mountain asked if he would give serious consideration to his amendment. The minister did not reply. I think the minister is somewhat embarrassed. He indicated that he is somewhat warm but is afraid to support this for fear of getting into difficulty with his own officials. I think that says something about the Minister of Agriculture who says he is not going to support something he believes in himself because his officials indicate to him it is not worthy.
I would like to share with you, Mr. Speaker, a few thoughts on the farming sector in general. On the whole, the farming population is not a rich population. They enjoy an independent lifestyle and enjoy having a little dirt under their fingers and
working hard for what they have achieved. It is a respected profession. The majority of them respect themselves, they enjoy the long hours and the work that is involved in an attempt to develop some wealth. All Canadians suffer when the farming population suffers. It breaks my heart when I travel through my constituency and see farmer after farmer facing bankruptcy simply because of the high interest rate situation.
Why can you not come forward with something that will be available for expansion, for operating purposes, for the farming population during this period of time in which bankruptcies are causing untold hardship for our farming population?
I would truly hope that the Minister of Agriculture would travel to the rural areas and participate at the grassroot level; find out from them exactly how they feel in regard to the policies he is bringing forward, or the lack of policy. The minister can go to his public meetings and express his wishes but how much feedback does he receive, or pay attention to?
I know from travelling through my constituency, Mr. Speaker, that farmers are not very happy with what my friends opposite are doing. That is evident too, from the recent provincial byelection in the province of Alberta in which we saw a separatist elected. He campaigned against the federal government.


Eugene Whelan: And against the provincial government.


Peter Elzinga: In his election brochure he said, "Send a message to Ottawa"; that is what he indicated.


Eugene Whelan: And to Peter, too.


Peter Elzinga: He campaigned on all the federal issues, issues such as metric, gun control and bilingualism, yet this government is not willing to react to any of those issues. I realize it is easy for us in opposition to complain, but what I wish to do for the minister and the House this evening is advocate some actions that are necessary to solve some of the difficulties facing our farmers.
First, I believe that the Small Business Development Bond, rather than being gutted the way it was in the budget of the Minister of Finance (Mr. MacEachen), should be expanded upon. It should be made available to the incorporated and unincorporated farmers, not only for expansion, but for operating capital. There should be substantial capital gains relief for the farmer. If you do not wish to accept my ideas, do away with it completely; support something such as we had in the budget we introduced, whereby one could roll capital gains over into a registered retirement savings plan and not have to pay any capital gains tax on some $200,000.
I am glad the government did accept the proposal we introduced in our budget with regard to working spouses, through which, if a wife works in the family enterprise, she can receive a salary.
We had attempted, Mr. Speaker, to develop programs with the provinces. It is necessary for the Minister of Agriculture to sit down with his provincial counterparts, to attempt to develop
March 29, 1982

a national policy, so that we do not have these discriminatory practices of one province, to the detriment of another. We should immediately implement a moratorium on farm bankruptcies. We need an additional infusion of some $500 million in capital to the Farm Credit Corporation so that we can subsidize interest rates to the farming population and, in general, increase the total programs offered by the Farm Credit Corporation.
In the event that a farmer has to pay over 12 per cent for money he borrows, he cannot operate. I would seriously hope that our Minister of Agriculture, for once in his ten-year term, will be forward thinking and come forward with a policy or a program in relation to interest rates that will be beneficial to all farmers. I would suggest also that we have a substantial rebate on the price of fuel used in food production. Again, I hope we will have an elaboration of the national price stabilization plan for the beef and hog industries which is meaningful and which will not leave the opportunity for discrimination by the Minister of Agriculture, as was the case with the hog stabilization pay-out.
Let me conclude, Mr. Speaker, by once again indicating our support for this legislation. We hope the minister does not sit back and and say: "Yes, 1 have introduced my one little piece of legislation and I will leave it at that." We would like to see some positive action from this minister, because the farming sector is the soul and the lifeblood of our nation and, unless some positive action is taken in this area, Mr. Speaker, that sector is going to die.


Mr. Deputy Speaker:: Are hon. members ready for the question?


Thomas Gordon Towers: I rise, Mr. Speaker-


Mr. Deputy Speaker:: The hon. member for Red Deer (Mr. Towers).


Thomas Gordon Towers: Thank you, Mr. Speaker.


Eugene Whelan: I rise on a point of order, please.


Mr. Deputy Speaker:: The Minister of Agriculture, on a point of order.


Eugene Whelan: Just on a comment the previous speaker made, that I discriminated against one province. We treated all provinces that had programs the same, in the first instance, and then we decided to allow the programs to go through. We treated every province the same. Alberta was not treated separately on any occasion. If the hon. member meant it that way in his statement-that is the way it sounded to me-it was not done that way at all.


Peter Elzinga: In response to the hon. minister, I did mean that he discriminated, because it is obvious that he did discriminate.


Some hon. Members:: Oh, oh!
Adjournment Debate


Peter Elzinga: He referred to the decision he did make that there was not going to be a pay-out to Alberta. Some weeks later he reversed that decision and there was a pay-out to Alberta. He reversed himself. If he does not consider that discrimination, I do.


Mr. Deputy Speaker:: Order. This is becoming a debate. These are obviously not points of order.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker, I am pleased to note that as usual at this time, the gallery is filled with newspapermen who have come to hear us and to report the facts as I will put them before my colleagues this evening. During the past seven or eight weeks, that is almost two months, the Quebec Minister of Agriculture, Mr. Jean Garon has taken pleasure in publicly making a series of serious but false accusations concerning New Brunswick seed potatoes.
Seed potatoes are used to eventually produce potatoes for human consumption, but it does not mean that seed potatoes are not fit for human consumption. On the contrary, they are top quality potatoes. However, the Quebec Minister of Agriculture is accusing, on the one hand, the federal Department of Agriculture and, on the other hand, the New Brunswick and Prince Edward Island producers, of having sold and shipped contaminated seed potatoes to Quebec producers. Now, it often happens that Mr. Garon is mistaken, but this time he is utterly mistaken because he is talking through his hat.
We know that, historically, the potato production in the province of Quebec has been low compared with that of both New Brunswick and Prince Edward Island, which alone produced for years almost 50 per cent of the total Canadian production. With time, of course, this rate of production has not decreased in terms of volume or total cultivated lands, but some western provinces as well as Ontario have become more competitive at the production level. But what is most serious about the accusation made my Mr. Garon is that he offhandedly condemns all seed potato stock originating from New Brunswick, without producing any irrefutable and sound supporting evidence. On the contrary, the Department of Agriculture and its food and vegetable certification division

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Adjournment Debate
have an outstanding record throughout the world. This reputation has been acquired after decades of great sacrifices and hard work and Mr. Garon, the Quebec agriculture minister, would offhandedly ruin this outstanding reputation. Well, Mr. Garon, as I have just mentioned, has not been able to produce any sound evidence. On the contrary, the Department of Agriculture of the Government of Canada had to remind him that on several occasions it had to ask the Quebec government to implement a consumer potato production control program within its own territory because the seed potato stock were grown on the same lands on which uncontrolled consumer potato stock had been grown the preceding year.
On the other hand, in New Brunswick and Prince Edward Island, producers have been trying for many years to eradicate a number of diseases of which the most serious by far is the bacterial ring rot, which is perhaps the most tenacious and unpredictable, because it is very difficult to identify. As some Quebec producers had bought potatoes in New Brunswick and sold them again to Quebec growers whose crops where affected by bacterial ring rot, Mr. Garon automatically inferred that the origin of the disease is in New Brunswick. Which is simply not true, because inspectors of the federal Department of Agriculture returned to visit the operation of the New Brunswick producer, check a number of stocks which had been produced on his farm and distributed not only in Quebec, but throughout the Atlantic region, but failed to find any evidence of bacterial ring rot.
Therefore it appears that, according to this very strict control, the origin of the bacterial ring rot is unfortunate, and I say it is unfortunate because the bacterial ring rot is a very serious disease which exists quite often in a latent state practically everywhere in the world if people are not careful. This disease could very well be traced to the soil itself in Quebec, to warehouses in Quebec, to bags, trucks, tractors, who knows where it could be traced to, but it is a fact that it can be traced to any of those places. Given the lack of control in Quebec over the seed potato, Mr. Garon cannot state categorically that the disease could not already be found in the soil in Quebec, that it could not be found on certain farms which supplied the producers of the regions of Temiscouata, Riviere-du-Loup and Kamouraska, which border on New Brunswick. By making such sweeping accusations, Mr. Garon therefore hinders the entire potato industry in Canada and tarnishes our good reputation in foreign countries. I suggest that the federal government agriculture minister was right to ask Mr. Garon to refrain from making that type of public statements.


Marcel Dionne: Mr. Speaker, just as the Minister of Agriculture (Mr. Whelan) stated last week when answering a question
about the bacterial ring rot, I must confess that the Quebec agriculture minister, Mr. Garon, created quite a deplorable situation. Mr. Garon's allegations caused great harm both to the reputation of New Brunswick potato producers and to the federal inspection service.
Following the allegations that Mr. Garon chose to make to the press instead of contacting him to try and find a solution to the problem, the Minister of Agriculture said that he would not be drawn into Mr. Garon's political games. He also indicated to his Quebec colleague that if he was really interested in solving this problem, he would certainly find the time to discuss it with him. The agriculture minister and Mr. Garon met last Monday, but unfortunately, they could not come to an agreement. However, Mr. Garon presented a file with compensation claims totalling more than $1 million from the Quebec potato producers affected by the bacterial ring rot. Agriculture Canada officials are now studying this file and the agriculture minister promised Mr. Garon an answer in a few days.
As far as the federal government is concerned I can say unequivocally that the Federal Potato Inspection Service is among the best in the world.
I can also guarantee that during the course of the very thorough investigation and chronological study conducted by the department about this contamination, all the facts have been checked. Mr. Garon indicated that the ring rot was caused by a shipment of seed potatoes from New Brunswick. After checking at the source, we have found that the producer has not had any problem with bacterial ring rot for approximately 20 years. We have checked other potatoes grown on the same farm which have been shipped all over Canada, without finding any trace of bacterial ring rot.
As usual, Mr. Garon had the urge to provoke an ideological debate between Agriculture Canada and the Quebec government. In my opinion, this is unfortunate since all Canadian potato producers have suffered serious prejudice as a result of this, and we hope, Mr. Speaker, that this problem will be solved as it should be, that is by experts.


OFFICIAL LANGUAGES-RESTRUCTURING OF FINANCING OF ASSOCIATION CANADIENNE FRANCHISE DE L'ONTARIO
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, on Tuesday, March 23, I directed a question to the Secretary of State (M. Regan) concerning the restructuring of financing of the ACFO announced on February 16 by the parliamentary secretary to the minister. I would like to go over the situation again, because I feel the decision taken by the Secretary of State may be harmful to Franco-Ontarians by depriving them of a provincial organization which has proved to be a much needed protector of their rights. It all started when the Department of the Secretary of State told the media of a new policy concerning the administration of the official languages branch.
March 29, 1982

As a result of that policy, the Secretary of State intends to redirect some of the funds to the regional councils of the ACFO, thus bypassing the provincial organization.
Still according to the Secretary of State, the purpose of those new policies was to thwart the tendency of overstructuring which afflicts organizations active in minority groups, the ACFO included, of course, in an attempt to get closer to the membership.
That is the purpose of those administrative changes. Let us examine the problems created by the Secretary of State's intervention. They are threefold: there is the legal problem, the interference problem and the methods problem. First, the judicial problem. The ACFO is a legal entity from which derive 19 regional councils that have no other status than that granted by the ACFO charter and amendable only with the consent of the general assembly of the organization. Moreover, the ACFO has 17 affiliates. The present proposal creates a problem since, in fact, it alters the ACFO's legal structure without the consent of the general assembly. Indeed in putting forward the dissatisfaction of some regional councils and the desire to decentralize the intent is to make them independent of the provincial organization by financing them directly. As those regional branches do not exist outside ACFO, it will be necessary to establish new structures and corporations, before any money can be provided for them.
This is where the Department of the Secretary of State's interference comes about. Six regional branches of an independent organization, as demonstrated by the consultation held during the first week of March, are dissatisfied with the present situation. They want to get more power, hence their interest in the department's proposal. All the same, 13 regional branches show their support for the provincial ACFO. Without any right to do so, the Department of the Secretary of State supports the six branches, and I can assure you that in the future they will come directly under the department for their funding. There we have interference pure and simple in the internal business of an independent organization. If the regions want more decentralization, it is incumbent on the provincial ACFO to respond to their request. Whether or not it is done in co-operation with the Department of the Secretary of State is not the problem. But the provincial ACFO must be involved as the only organization legally responsible for its regional councils. The Department of the Secretary of State's proposal is rather strange when considered more closely. Because a minority of dissenters refuse to play the game of democracy, and although 13 regional branches out of 19 support the provincial ACFO, the department decides to give the minority of six their own way. It is as if a dissatisfied province wanted to sever all ties with the federal structure and were granted autonomy without consultation with its federal partners.
Adjournment Debate
Should we see in this new approach a step toward a new type of federation? The last problem, Mr. Speaker, is rather a moral one, and it concerns the offhand behaviour of the Secretary of State in this matter. As a matter of fact, allegedly to get nearer to the grass roots, the Secretary of State never held any consultations prior to announcing his decision. Everyone learned of that decision through the press. Furthermore, the present proposal is not supported by any document. I had to write twice to the minister and to phone him before I could meet him, and he announced only last week, in an answer he gave me in this House, that he was going to meet with officials of ACFO late last week. One can only note the department's reticent and unco-operative bureaucratic attitude in this matter. That is why I ask the minister today to table actual documents summing up the present proposal for restructuring ACFO.
It is to be hoped that the spirit of dialogue and co-operation, which was apparent, albeit slightly, at the meeting of March 25 will be conducive to a new protocol of agreement that will satisfy all parties. Although ACFO had every right to resent the actions of the Secretary of State, it nevertheless approached the minister at the March 25 meeting in the hope of finding common ground for an understanding. Through a written proposal, ACFO made a breakthrough on this issue. This proposal which, as I understand will be released in the near future, satisfies the requirements of all parties involved. The decentralization that everybody wishes for should provide the dissenting regions with a solution to their problems. On the other hand, the role of the ACFO would be maintained in that it would remain the provincial association of Franco-Ontari-ans, thus avoiding any legal issue. Furthermore, as decentralization was sought in the first place by the Department of the Secretary of State as well as the power to directly fund regional associations, I believe the minister should support such proposal which meets all his wishes. Mr. Speaker, any compromise involves a certain amount of give and take. But in its proposal the ACFO seems prepared to go all the way, having already made a more generous offer than the other party. I hope the department will react positively to this proposal and will show a similar desire to settle the matter to the satisfaction of all concerned.


Mr. Jean Lapierre (Parliamentary Secretary to Secretary of State):: Mr. Speaker, as the result of remarks made by the hon. member for Ottawa-Vanier (Mr. Gauthier), on March 25, the Secretary of State (Mr. Regan) met with the officials of ACFO in the presence of the hon. member for Ottawa-Vanier. At that time, ACFO made a proposal and with the cooperation of all concerned, we are now in consultation with the seven regional associations interested in dealing directly with the Department of the Secretary of State. During that meeting, the Secretary of State offered to review his position, perhaps very soon, after consultation with the seven regional associations; and if those associations agreed with the ACFO

March 29, 1982
Adjournment Debate
proposal we would give favourable consideration to that proposal. If the seven decide to use the provincial association as a banker or to stay within the provincial association and to deal directly with it, the Secretary of State has no objection to that either. But our responsibilities toward the taxpayers and those seven entities which have said democratically that they wanted to deal directly with the Secretary of State must be considered. I think that is strictly what is at stake, and the member for Ottawa-Vanier is well aware of the situation. He has complained of having nothing in writing. I think that more than anybody else he had access to inside information and had discussions on the subject with the present Secretary of State.
I am convinced that the inquiries and mediation attempts by the member for Ottawa-Vanier will lead us to the best solution. One thing is sure, the Secretary of State is bound to take his responsibilities toward taxpayers and to be receptive to the needs of minority groups across Canada. This is part of his mandate. The decision that was made was specifically designed to respond to the expectations of some communities across Ontario, and it was made simply to get closer to the grass roots.
My hon. colleague's three objections were strictly legal. I think a lawyer could always find a satisfactory solution, and I really do not know whether it is a major problem. As far as any interference is concerned, he who pays the piper usually calls the tune. We hope that this movement toward decentralization and toward working with communities will not be seen as interference but rather as an attempt to be more in tune with the taxpayers and to spend money where they would like to see it spent.
Finally, as far as the method is concerned, of course one can always consult ad nauseam, but my hon. colleague is probably aware that where difficult decisions of this kind are concerned, consultation takes place a few days beforehand, but in the final instance, the decision is made in consultation with local authorities and departmental officers in whom we have full confidence.


Mr. Deputy Speaker:: I am sorry to interrupt the parliamentary secretary, but his time is up.


FREEDOM OF INFORMATION-PROPOSAL TO DELAY PASSAGE OF LEGISLATION. (B) CROWN PRIVILEGE AND JUDICIAL REVIEW
Walter David Baker: Mr. Speaker, the debate this evening arises out of a question I asked the Minister of Communications (Mr. Fox) on February 12. You will recall the Minister of Communications on the subject of freedom of information received a letter from the provincial attorney general of Ontario speaking on his own behalf and on behalf of other attorneys general. In essence, the provincial governments were asking the federal government to stop consideration in the committee or elsewhere of its freedom of information bill in order to deal with a freedom of information bill to be agreed upon by all 11 governments of Canada.
Surely, no one has to tell this House of Commons how unlikely it is we would ever get agreement on a freedom of information bill of that scope.
You will recall, Mr. Speaker, that we worked 54 years to get agreement on the Constitution. I wager the parliamentary secretary would be greyer than he is today, and both he and I would be drawing the old age pension well before a bill would even see the light of day in draft form. I say to you that, following the tradition of federal-provincial agreements with respect to this matter, any freedom of information bill to result would pale in comparison to Bill C-43, the freedom of information bill which this government advanced. It would be useless. It would be without teeth. It would be blind. It would be full of so many notwithstanding clauses that no one interested in freedom of information could ever countenance that kind of delay. I do not countenance it.
If you scratch a little deeper, Messrs. McMurtry, Romanow and company are interested in much more than that. They do not want independent judicial review. They do not want to do away with Crown privilege. They are afraid of that. They want the governments of Canada-and I put government in the plural-to be the judge, the jury and the policemen with respect to what information will be released.
I do not think I have to tell you, Mr. Speaker, that without independent judicial review any freedom of information law would be next to useless, particularly if the decision as to what would be released were left to the people who held the information being asked for. It is as simple as that.
I hope the parliamentary secretary will tell the House tonight that his minister, the Minister of Communications, and his colleagues in the government will not fall for that line of baloney of 11 governments, because that is what it is. If they do, it will be an incredible about face on the part of this government.
In 1979, I introduced a freedom of information bill, imperfect in many respects, the first word, but not the last. In 1980, the present government introduced Bill C-43 which in some respects was not as good as the one of the Clark government, but in many respects was better. I would be astounded if the government should even consider stopping consideration, or choose not to appear before the committee to complete consideration of the bill. If the government does that, it will complete the breaking of another promise.
Both Bill C-15, my bill, and Bill C-43, the Minister of Communication's bill went to committee after one round of speeches. Gallup polls approve of freedom of information. All parties approve also. Yet after two years a freedom of information bill is still a mirage. I find it impossible to accept the opinions of the provincial attorneys general in this matter, and I find it unpalatable and distasteful to believe that a government which promised freedom of information should fall over in that round-heeled fashion, rather than forging ahead with a bill. The fact of the matter is, and I might as well say it here, the provinces do not want to make freedom of information
March 29, 1982

better. As a result of their suggestion, they want freedom of information legislation dead and buried. I think it is high time the government came to the committee and stated its position. Does it favour that, will it allow the bill to go forward, and will it invite the provinces to appear before the committee like any other witness. Will it now make up the time lost to the cause of freedom of information by the fact that the hon. member for Burnaby (Mr. Robinson), while professing a great interest in freedom of information here, piled up page after page of useless questions in committee on a bill which has a provision calling for parliamentary review three years down the road?
I hope the parliamentary secretary will say to us tonight that the bill will go forward, the blandishments of the provincial attorneys general will be ignored, and the government will live up to the commitment it made in the throne speech. If it does not, then the Minister of Communications and his colleagues in government, from the Prime Minister (Mr. Trudeau) down, stand on the same footing as the provincial attorneys general who have shown themselves to be dinosaurs on the subject of freedom of information. I look forward to hearing from the parliamentary secretary.


Mr. Jack Masters (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, I must say I am grateful for the opportunity provided by the hon. member for Nepean-Carleton (Mr. Baker) to discuss the subject of access to information. 1 think all of us know of his deep and abiding interest in and effectiveness on this subject.
As the House is aware, Bill C-43, which contains legislative proposals for both access to information and privacy, was introduced in the House in July, 1980 and received second reading in January, 1981. The Standing Committee on Justice and Legal Affairs undertook its review of the bill in March of last year. A number of groups and experts came before the
Adjournment Debate
committee to give their views. This process took more than two months of the committee's time. Clause by clause examination got under way only in June. The committee has devoted a great number of sittings to the various clauses of the bill; some 45 provisions had been adopted before Christmas out of the more than 160 clauses in the bill.
During the course of the summer, and last fall, the provinces informed the government of their concerns in regard to Bill C-43.1 refer in particular to the very specific objections raised by the attorney general for Ontario, Mr. McMurtry, in relation to the protection of law enforcement information and other important issues in a letter he sent last June to the minister. In November the minister was advised by the spokesman for the provinces that the Ontario letter had received the endorsement of all provinces. Since then discussions have taken place with the provinces at both the ministerial and official levels.
As indicated to the House by the Minister of Communications, representations from a common front made up of most of the provinces must be taken seriously, indeed. I think hon. members from across the aisle, given their fundamental and philosophical commitment to harmonious federal-provincial relations, will agree that the legitimate concerns of the provinces cannot be summarily dismissed. I say to the hon. member that, despite his feelings and our desire, it is in the interest of all concerned that the federal government and the provinces are given an opportunity to iron out outstanding issues in relation to access to information and privacy.


Walter David Baker: Bring the provinces to the committee.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly this House stands adjourned until tomorrow afternoon at two o'clock p.m.


[Stage Direction]
The House adjourned at 10.29 p.m., without question put, pursuant to Standing Order.
[Stage Direction]
Tuesday, March 30, 1982