1982-02-01

ROUTINE PROCEEDINGS


Mr. Dave Nickerson (Western Arctic):: Madam Speaker, whereas the latest figures released by Statistics Canada show that not only were over a third of a million Canadians forced to seek UIC benefits in November, the highest ever in Canadian history, but that we are also now suffering, for the first time since 1958, a drop in year to year full-time employment, 1 move, seconded by the hon. member for Parry Sound-Mus-koka (Mr. Darling):
That this House deplores the continuing failure of the Liberal government to do anything whatsoever about the unemployment and misery caused by its inane mismanagement of the economy.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ECONOMY
Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, under the provisions of Standing Order 43 I rise on a matter of utmost urgency to every Canadian citizen, particularly those who are unemployed. Considering that there were over 237,000 jobs lost in Ontario alone, from August to December, 1981. and that the figure will undoubtedly double in the coming months; and whereas the MacEachen budget has taken any employment incentive away from small business, I move, seconded by the hon. member for Hamilton-Wentworth (Mr. Scott):
That this House condemns the Liberal government for its lack of an economic program which would stimulate our failing economy and provide incentive to business to create employment opportunity, and, further, challenges the government to present its policies before the Canadian electorate to determine whether Canadians desire that kind of haphazard approach to economic problems.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN ARMED FORCES
Mr. Jack Shields (Athabasca):: Madam Speaker, whereas the Department of National Defence employs ophthalmic technicians to act as independent practitioners in the servicing of visual needs and eye care of Canadian forces bases; whereas the position of ophthalmic technician was created to assist optometrists but not to replace optometrists; and whereas the practice of ophthalmic technicians acting as independent practitioners is illegal in the private sector and is condemned by the medical profession, I move, seconded by the hon. member for Red Deer (Mr. Towers):
That the Minister of Defence immediately look into this shameful situation in which thousands of members of our armed forces are receiving eye care from inadequately trained ophthalmic technicians, and immediately rectify this idiotic practice and assign doctors of optometry to care for the visual needs of our servicemen.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


VIA RAIL
Mr. Les Benjamin (Regina West):: Madam Speaker, I rise on a matter which is urgent and pressing, under Standing Order 43. In view of the fact that 31 people were injured by a derailment of VIA's transcontinental passenger train caused by equipment failure, and since the government is stalling the replacement of these 30-year-old trains, risking the safety of the travelling public, I move, seconded by the hon. member for Winnipeg-Birds Hill (Mr. Blaikie):

February 1, 1982
That this House calls upon the government to provide immediately VIA Rail Canada funds to buy new transcontinental passenger train equipment, and that the ordering and delivery of such equipment be given the highest priority.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
[Stage Direction]
Mr. Bill Do mm (Peterborough): Madam Speaker, "Operation Tax Ride" is a Peterborough based citizens' group which is delivering federal tax revenues to Ottawa by pony express. In this way they are expressing their understandable disgust at the budget and so, I am told, is the horse, at regular intervals along the way. I move, seconded by the hon. member for Northumberland (Mr. Hees):
That this House express its support for Operation Tax Ride, and at the same time encourage the Minister of Finance to withdraw his budget and stop flogging a dead horse.
Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CONSUMER AFFAIRS
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, eastern Canadian consumers doubt that the recent dramatic increase in the retail price of fresh produce imported from the U.S.A. is due entirely to frost damage. Therefore I move, seconded by the hon. member for Hamilton-Wentworth (Mr. Scott):
That the Minister of Agriculture and the Minister of Consumer and Corporate Affairs launch an immediate investigation into the price structure of imported fresh produce to ensure that Canadian consumers are not being exploited.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIVE RIGHTS
Mr. Peter Ittinuar (Nunatsiaq):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. Whereas on October 27, 1981, after seven years of negotiation, the Inuit people of the eastern Arctic and the Government of Canada signed a wildlife agreement as the first component of a comprehensive land claims settlement, and given the fact that this agreement has been affirmed by the Inuit but not as yet by the government, despite its expressed commitment to the settling of claims, I move, seconded by the hon. member for Skeena (Mr. Fulton):
That this House call upon the government to demonstrate its commitment to the land claims process by affirming its support for the recent wildlife agreement in principle.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


VETERANS AFFAIRS
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam
Speaker, some 4,000 veterans who receive under 5 per cent disability pensions have never been informed that they are eligible for a yearly consumer price index increase on a little known payment allotment. In many cases veterans are unaware that they may be eligible for over $1,000 in back pay. I move, seconded by the hon. member for Red Deer (Mr. Towers):
That this House instruct the Minister of Veterans Affairs to inform all veterans in this category immediately of their potential entitlement, to make payments to veterans retroactively and to give veterans their yearly increases automatically in the future.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PIPELINES
[Stage Direction]
FAIR COMPENSATION URGED FOR RANCHER/LANDOWNERS IN ALBERTA-MOTION UNDER S.O. 43
Mr. Gordon Towers (Red Deer):: Madam Speaker, 1 rise as a surrogate for the rancher/landowners in the Rocky Mountain House area in Alberta whose land value and land use are
February 1, 1982

being threatened by the construction of the Alaska gas pipeline. Cash compensation is inadequate, there is an absence of safeguards and guarantees, especially in the third party liability, and the deck is stacked against the farmer. I therefore move, seconded by the hon. member for Bow River (Mr. Taylor):
That the Minister of Energy, Mines and Resources intervene immediately and stop all proposals for construction until Bill C-60 is proclaimed or steps taken by the Northern Pipeline Agency to ensure that landowners are compensated fairly and are given adequate guarantees that they will experience minimal upheaval or inconvenience to their livelihood.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HOUSING
Mr. Derek Blackburn (Brant):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that 32 home owners in the Malvern subdivision of Scarborough have homes built on radioactive soil, and the federal government's attempt to move the soil to Camp Borden has been thwarted by court action, and because the owners cannot find buyers for these homes, I move, seconded by the hon. member for Beaches (Mr. Young):
That this House instruct the minister of housing to have CMHC purchase these contaminated homes at fair market value so the families can afford to move to other locations.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADA POST
Mr. Gordon Taylor (Bow River):: Madam Speaker, the charitable organizations of Canada are frustrated, discouraged, and sad. The laws of Canada require that their overhead must not be over 20 per cent of their receipted revenue. The postage increase under the new rates will cause an increase of some 76 per cent. The dismal part of the story is the suffering of the people who depend on these agencies, if they have to fold. Therefore I move, seconded by the hon. member for Brandon-Souris (Mr. Dinsdale):
Oral Questions
That the House urges the government to show a little heart and provide a special rate or reduce the postal rate for charitable organizations to what it was before the Canadian postal corporation got this brainwave to increase the postal rates without any consideration of their disastrous results.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question is for the Minister of Finance. On Friday my colleague from Hillsborough put a question to the Minister of Finance with regard to the recent story in the Toronto Star to the effect that the spending cuts by the federal government in post-secondary education and medical care were now going to amount to a net $4.5 billion. On Friday the minister said that he could not confirm those figures. Has his department now let him in on the secret, and can he confirm that figure today?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, the first point to make is that I am not proposing any reductions in our support for post-secondary education or medical health care.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: That has not been our proposition in the past, or at the present time.
What I have put before the provinces is the intention of the federal government to eliminate the revenue guarantee which even the premiers in their communique last summer did not include as part of the federal support for medical care and post-secondary education.
I would draw the attention of my hon. friend to the budget paper entitled "Fiscal Arrangements in the Eighties", in which it is stated that the expenditure plan presented in last year's budget provided for savings and transfers to provinces and territories of about $500 million in 1982-83 and $1 billion in 1983-84 and subsequent years. There is no question that we are attempting to achieve savings in the transfers through the elimination of the revenue guarantee.


Michael Holcombe Wilson: Madam Speaker, the minister has failed, for the second time, to answer the question. The question was if the figure mentioned in the Toronto Star article on Friday, of $4.5 billion net cut, was an accurate figure, and would he be

February 1, 1982
Oral Questions
prepared to confirm that figure today. For the purpose of my supplementary question I will assume that it was of that order.


FEDERAL GOVERNMENT FIGURES
Michael Holcombe Wilson: In the original estimate in the budget the minister referred to a net cut of $1.9 billion. Presumably that was the maximum amount of net cut that he felt the provinces could stand without cutting services in post-secondary education and medical health. That figure has now been increased, first by a mistake on the minister's part to $2.6 billion, then to $4.5 billion as a result of the announcement on Friday.
Since the provinces cannot count on the figures which the minister or his department put out to the public, would he be prepared to enter into a new form of revenue guarantee which would limit the net cutbacks by the federal government in these two very important areas of spending to $1.9 billion, because the provinces cannot count on the figures that the minister has been throwing around in the past two weeks?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, we have had several meetings with the provinces and the provincial ministers of finance. They have not been left in any doubt about the extent of the savings that the Government of Canada intends to achieve. These were discussed very intensively in the meeting which I had with the ministers of finance in Ottawa not very long ago. They have all the up-to-date figures.


Mr. Clark:: Why do you not give us the up-to-date figures?


Allan Joseph MacEachen: As I have stated to the hon. member, look at the budget paper entitled "Fiscal Arrangements in the Eighties" and he will find that I talk about a $500 million saving in 1982-83 and a $1 billion saving in 1983-84 and subsequent years. I announced subsequently that it was the intention of the government to eliminate the revenue guarantee. That is the total saving that is being sought in the EPF transfers. I would tell the hon. member that, despite the cut of the revenue guarantee, the total system of transfers will increase on an annual basis to the provinces by about 12 per cent per year. I believe that is a creditable rate of increase in view of the restraint that is being imposed upon the Government of Canada.


Michael Holcombe Wilson: Madam Speaker, twice the minister has referred to the budget papers, but because of mistakes 11 days after the budget, and because of new figures which came out last week, those budget papers are completely out of date.


REQUEST THAT NATIONAL CONFERENCES BE HELD ON MEDICAL CARE AND POST-SECONDARY EDUCATION
Michael Holcombe Wilson: Madam Speaker, let me approach this from another angle, it seems that the cart is being put before the horse. The minister is proposing to cut spending in two very important areas. He is prepared to risk major cutbacks in medical care and post-secondary education. Rather than rush into this on a unilateral basis and force spending cuts and service cuts on the provinces, would the minister and the government consider entering into two or three national conferences on health and post-secondary education so that we can set out the national objectives of the various levels of government in these two important areas before we cut spending, and before we cause closures of hospitals and cutbacks in post-secondary education?


Allan Joseph MacEachen: Madam Speaker, let me repeat once again the statement that there are no cuts proposed in the federal support for medicare or post-secondary education. For example, shortly after the budget papers were released, the president of the Canadian Medical Association stated at the association's annual meeting in Halifax that it would be wrong to claim that the budget would bring about any reduction in support for medical care. He said that would be wrong, and it is wrong. The same is true about post-secondary education.
The hon. member has asked for conferences. It has been laid out that it is the intention of the Minister of National Health and Welfare to conduct consultations with provinces on program conditions, and it is also laid out that the Secretary of State will conduct discussions with the provinces in order to see how national objectives could best be met in that field.


Michael Holcombe Wilson: Why not do that first?


Allan Joseph MacEachen: The hon. member suggests that these discussions ought to take place first. There is no logic to that because the proposed savings to the provinces will not affect in any way whatsoever our support either for medical care or post-secondary education, and that is widely understood by the client groups in the country.


FINANCE
Charles Joseph Clark: Madam Speaker, my supplementary question is directed to the Minister of Finance, who says there will be no cuts, just that there will be $4.5 billion less for the provinces to use for health and education services.
Let me refer to a statement the minister made in this House. It has to do with the reliability of this minister of hocus-pocus, the minister of Rubik's cube, and the reliability of his figures.


An hon. Member:: Stick to your lines, Joe.
February 1, 1982


Charles Joseph Clark: On January 26 the minister stated in this Elouse:
Twelve million Canadians will have less taxes to pay, about 3.5 million will pay the same amount and about 800,000 will pay more taxes. These are the
facts.
By those figures the minister is claiming that 16.1 million Canadians will pay 1982 personal income taxes. The figures of the Department of National Revenue for the last year for which figures are available, 1980, indicate that in that year fewer than ten million Canadians paid federal tax.
My question to the minister flows from the fact that the minister is now claiming that some six million Canadians who did not pay federal tax in 1980 will be paying federal tax as a result of his budget. Will he tell us how he arranged that?


Allan Joseph MacEachen: Madam Speaker, all the information with respect to the tax cuts are contained in the budget papers.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: I am very pleased that the Right Hon. Leader of the Opposition has raised again the question of tax relief and tax benefits. Last Friday he alleged that it was unjustified for the government-


Mr. Crosbie:: Watch out, Pinnochio!


Allan Joseph MacEachen: -to claim any credit for the retention of indexation. I had stated in the budget speech, and subsequently, that the equivalent of $3 billion worth of tax relief had been distributed to Canadians through the retention of indexation.


John Carnell Crosbie: Malarkey!


Allan Joseph MacEachen: The hon. Leader of the Opposition contested that rather violently. I should like to refer him to the ad on indexation which his party put out before the October budget. This is addressed to the taxpayers of Canada.


Some hon. Members:: Order. Order.


John Carnell Crosbie: You are scraping the bottom of the barrel. Why don't you read the whole thing?


Allan Joseph MacEachen: It says that in 1980 if your income was $15,000 per year you would have to pay $217 more income tax with de-indexing. It goes on to talk about $25,000, $35,000, $50,000-


John Carnell Crosbie: Order!


Allan Joseph MacEachen: -showing the amounts that taxpayers would have to pay in addition, in the absence of indexation. The hon. member goes on, or the ad goes on to say that that is how much more you would pay. I am telling him that the budget that was produced on November 12 saved the taxpayer these amounts, which the hon. member said would be lost.
Oral Questions


Charles Joseph Clark: Madam Speaker, I guess the minister is saying, "If you ask me a question this week I will give you an answer nobody can believe next week."


Some hon. Members:: Hear, hear!


Charles Joseph Clark: To six million Canadians he is saying, "You didn't pay any tax before and, as a result of my budget, you will pay tax, and that is a cut, folks." That is what the Minister of Finance says.


Some hon. Members:: Hear, hear!


NUMBER OF TAXPAYERS
Charles Joseph Clark: Madam Speaker, let me ask the innocent lamb who is the Minister of National Revenue whether he agrees with his colleague, the Minister of Finance, that as a result of this budget, six million Canadians who were not paying taxes in 1980 will be paying taxes in 1982?


Hon. William Rompkey (Minister of National Revenue):: Madam Speaker, the Right Hon. Leader of the Opposition has referred to Rubik's cube. He would know, because of course he is just a plain old square!


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Mr. Andre:: Bring the hook.


Bill Rompkey: The Minister of Finance has laid out clearly the savings to Canadians as a result of this budget-not simply the indexation but the change in the tax structure, the increase in the child tax credit, the reduction in unemployment insurance premiums, and all these things which add up to savings for Canadians. I would say to Canadians that, instead of listening to the hocus-pocus that is tried on that side of the House, they should look at their pay cheques at the end of the month and they will see the reductions.


TAXPAYERS IN NEWFOUNDLAND
Charles Joseph Clark: Madam Speaker, better a plain old square than a government whose figures and whose word cannot be believed by any Canadian in this land.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: If the minister is unwilling to explain those six million new Canadian taxpayers as a result of his government's budget, perhaps I can try him out province by province. Let us start with Newfoundland. The minister has said that there will be a reduction in taxes for 250,000 people in Newfoundland. That is what he said. In 1980 in Newfoundland fewer than
200,000	paid federal tax. Will the Minister of National Revenue explain what his colleague has done to impose on 50,000

February 1, 1982
Oral Questions
Newfoundlanders who were not paying tax in 1980, tax this year, as a result of the Liberal government's budget? Could he explain that to us?


Mr. Nielsen:: By your own figures.


Bill Rompkey: Madam Speaker, a representative of a knowledgeable chartered accountant's firm in St. John's says this budget is better for Newfoundland than any other part of the country. The fact is that by far the majority of people will see their incomes improved as a result of the budget. I say to the right hon. gentleman again that all people have to do-


Mr. Epp:: -is look at their pay cheques!


Bill Rompkey: -is look at their pay cheques at the end of the month, and not worry about figures.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


THE ECONOMY
Mr. Edward Broadbent (Oshawa):: Madam Speaker, my question is directed to the Minister of Finance. It concerns the First Ministers' Conference which opens tomorrow. It is very clear that a majority of provincial premiers are deeply concerned about unemployment and the general increase in job insecurity throughout the country. Considering that the minister has said throughout last week that he has no intention of changing his basic monetary and fiscal approach on the one hand, but on the other hand that he plans to listen and be open-minded to what the premiers have to say, does the Government of Canada plan to listen seriously to what the premiers have to say about unemployment programs? Specifically, is the government prepared to change its mind about its monetary and fiscal approach which has produced more than one million unemployed?


Allan Joseph MacEachen: Madam Speaker, I said on Friday that I would be interested to hear whether the premiers had an alternative to the current economic policy followed by the government. The policy now being followed is based upon the necessity of reducing inflationary pressures in the economy which are the main obstacles to improved job creation and improved growth in the country. Unless we have a better control of the inflation rate, I believe that we will have no possibility of getting the jobs we require in the future. I believe it is worth taking the necessary relatively short-term measures which are required in order to build a strong economy for the future; that is my approach. If the premiers can bring forward
a better alternative which is convincing, of course the government is quite prepared to examine it with great interest and attention.


John Edward Broadbent: But presumably unwilling to change its monetary and fiscal approach. That was the question I asked.


MINISTER'S APPROACH TO UNEMPLOYMENT
John Edward Broadbent: Madam Speaker, considering the approach currently pursued by the Government of Canada, the approach which has produced ten million unemployed in the United States under Ronald Reagan and has now produced three million unemployed, and rising, in Great Britain under Margaret Thatcher, is the Minister of Finance saying to the people of Canada that he is prepared to continue with this high interest rate policy even if it leads to this abysmal direction for the people of Canada? Does the minister really have in mind constant levels of unemployment? If so, will he say it openly to the people of Canada?


Allan Joseph MacEachen: No, Madam Speaker, that is not what I have in mind. I have in mind lower unemployment rates. The objective is to get unemployment down. The hon. member must know the experience has been that countries with lower rates of inflation have lower rates of unemployment. It no accident that countries such as Japan, Switzerland, and Wes( Germany, with relatively low rates of inflation, have the lowest rates of unemployment. That is a clear link. Until we break the inflation spiral, the prospect of obtaining jobs as quickly as we would like does not seem to be very close. This is what I have in mind.


NEWSPAPER INTERVIEW OF MINISTER
John Edward Broadbent: Madam Speaker, countries like Japan and Switzerland particularly and persistently have pursued lower interest rate policies. As the minister well knows, the government of France today has an officially established low interest rate policy because it is concerned about both inflation and unemployment. The Canadian government has not produced results on either side of the economic ledger, either in terms of inflation or unemployment. The government has been an unmitigated disaster, and every Canadian knows it.


Some hon. Members:: Hear, hear!


John Edward Broadbent: I see the minister smiling; it reflects his deep concern. In an interview published in Le Devoir this morning the minister said, "Everyone has to accept some change in his life." What does the minister explicitly mean by this? Does he mean collecting an unemployment insurance cheque instead of a pay cheque? Does he mean foreclosure on a home instead of the security of a home? Does he mean no job at the end of the academic year instead of a job with a BA.? If this is what the minister means by change, why is he
February 1, 1982

not at least honest like Margaret Thatcher and have the courage to put things out in the open, instead of using weasel words like "some change" in their lives?


Allan Joseph MacEachen: Madam Speaker, the hon. member talks about a high interest rate policy as if it were something separate from the high inflation we are experiencing. They are both one and the same. It is evident that it will be impossible to make substantial progress in reducing interest rates anywhere, unless the rate of inflation comes down. The hon. member knows perfectly well. For example, he quoted in the House at least once or twice the new socialist government in France. He knows what has happened there. It attempted to stimulate the economy. Its prices went up. It brought in controls but, lo and behold, while all this was happening unemployment was rising as well, not going down. He has it a bit mixed up.


John Edward Broadbent: Not as a result of those programs, and the minister knows it.


THE ADMINISTRATION
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, my question is directed to the Prime Minister. On September 22 the Prime Minister appointed Senator Jack Austin to the ministry. The Assistant Deputy Registrar General confirmed this morning that Senator Austin has not yet complied with the conflict of interest guidelines by filing the required declarations with the Conflict of Interest Public Registry. In view of the fact that Senator Austin has responsibility for the Canadian Development Corporation, a Crown corporation investing in private commercial concerns across the country, it is particularly important that compliance be made forthwith. Has the Prime Minister checked with Senator Austin and requested that he in fact comply with the conflict guidelines? Will he give the House his undertaking, if Senator Austin does not comply with them, that he will suspend him from his responsibility until compliance has taken place?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I am sure I do not have to give that assurance. The Senator will comply, as all other ministers in cabinet, with the guidelines.


Some hon. Members:: When?


Pierre Elliott Trudeau: As fast as the ministers on the other side took to comply with the guidelines. Sometimes it takes a few months-


Charles Joseph Clark: Pass an order in council to protect him.
Oral Questions


Pierre Elliott Trudeau: The Leader of the Opposition does not want to be reminded that his own ministers took quite a few months to comply with the guidelines.


INQUIRY AT TIME OF APPOINTMENT
Ramon John Hnatyshyn: Madam Speaker, I understand that Senator Austin is a personal friend and confidant of the Prime Minister. My question is simple. Did the Prime Minister satisfy himself, when he appointed him responsible for the Canadian Development Corporation, that there was no outstanding conflict of interest in the holdings of Senator Austin which might affect the performance of his duties in that particular responsibility?


Pierre Elliott Trudeau: Madam Speaker, I am sure Senator Austin, like all my other ministers, is a friend, but I do not know what the hon. member means by "confidant".


Mr. Paproski:: It is the same as comrade.


CRIMINAL CODE
Mr. David Kilgour (Edmonton-Strathcona):: Madam Speaker, my question is directed to the Minister of Justice. A Gallup poll published on the weekend indicated that one Canadian in four, or about six million of our citizens, were victims of Criminal Code offences last year. Will the minister tell us what changes in the Criminal Code he is contemplating to try to protect Canadians, their homes and apartments, more effectively, given the fact that between a third and a quarter of these crimes consisted of attempted break-ins or actual break-ins? Will he tell us, for instance, whether he favours less bail for repeat offenders, stiffer sentences for career criminals, and a reform of our parole laws?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, to date we have tabled a number of bills concerning the Criminal Code, and other bills are being prepared. Obviously, the problem raised by the hon. member is not due to the Criminal Code itself. The offences he mentioned are prohibited under the Code, and it is up to the courts to hand down sentences. As for the need to reform our parole laws, I feel that the parole system in Canada is working quite satisfactorily at the present time.


USE OF DRUG PARAPHERNALIA
David Kilgour: Madam Speaker, in other words, the minister thinks the system is working beautifully and no changes need be made.

February 1, 1982
Oral Questions
The minister is well aware that many of the people involved in break-ins do so to steal property in order to maintain their hard drug habit.


An hon. Member:: Name one.


Some hon. Members:: Oh, oh!


David Kilgour: The minister is aware, because he was informed by my colleague from Saskatoon West, that drug paraphernalia are now sold legally in every city in the country.
1 am told by the police in Edmonton that 30 stores alone sell paraphernalia. Will the minister tell us whether or not he plans to bring in any legislation to ban the use of drug paraphernalia which allow people to consume drugs ranging from heroin to cocaine to marijuana? Don't say you don't know about it because my friend told you about it last summer.


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: Madam Speaker, I will take note of the hon. member's question. Crimes are committed in society, and we have a criminal code to take care of them. If the hon. member has a specific complaint, he can report it to the police who can look into it.
I do not think the problem is because of lack of legislation. However, if it is, we will undoubtedly present some legislation to the House. There are already some bills before the House, but it is very hard to get them passed.


Erik Nielsen: You have not seen them.


GARRISON DIVERSION
Mr. Terry Sargeant (Selkirk-Interlake):: Madam Speaker, my question is for the Secretary of State for External Affairs. Late last week the District of Columbia Court of Appeals, in a rather remarkable turn around, made a ruling that will allow construction to resume this spring on the Garrison diversion project in North Dakota. Given that it is the mandate of the federal government to protect Manitoba's interests in this international matter, can the minister tell this House what steps his department took during last week's court proceedings to ensure that Manitoba's concerns were represented? In addition, will he tell us what specific future action he plans?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, it would certainly not be appropriate for us to appear in a U.S. court proceeding. But I can tell the hon. member that we accept the responsibility of carrying forward interests not only of Manitoba but of all parts of Canada. We will indeed continue to make the kinds of representations that we have very actively made in the past to protect the interests of the citizens of Manitoba and of all Canada.


REQUEST THAT PARLIAMENTARY DELEGATION BE SENT TO WASHINGTON
Terence James (Terry) Sargeant: Madam Speaker, my supplementary question is also for the Secretary of State for External Affairs. I might point out to him that his department is doing such a good job that on Friday afternoon it had no idea of what had gone on in a Washington court late last week.
Obviously the time has come for a different approach. It is quite clear now that normal diplomatic procedures have failed to this point to protect the Manitoba environment from the threat posed by the Garrison project. Will the minister now entertain a suggestion made on numerous occasions by members on this side of the House to send an all-party delegation to Washington so that we might put our case more effectively to our American counterparts?


Mark R. MacGuigan: Madam Speaker, we have certainly no objection in principle to having Canadian parliamentarians deal with American Congressmen on this issue. Indeed, we have encouraged that. However, there are all kinds of assumptions in the hon. member's question which cannot be accepted.
We have a treaty with the United States in which we are assured that the kind of interference that the hon. gentleman fears will not take place. We are negotiating not in a vacuum but on the basis of agreements and understandings which have taken place over the years. Our position is indeed a strong one, and it is not to be judged on whether we participate in every judicial dog fight in the United States.


VETERANS AFFAIRS
A. Daniel McKenzie: Madam
Speaker, my question is for the Acting Minister of Veterans Affairs. Close to 4,000 veterans receiving less than 5 per cent disability pension have never been informed that they are eligible for a yearly consumer price index increase on a little known final payment allotment. In some cases veterans are unaware that they may be eligible for over $1,000 in back pay. Will the minister assure this House that he will have the Minister of Veterans Affairs inform all eligible veterans of this hidden money and have their payments made retroactive? In addition, will he ensure that in the future the veterans will be given their yearly increase automatically?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, I note the hon. member's question. I can assure him that this government has been very fair with veterans in past years. This government intends to continue its policy of giving veterans what is their due. I will convey the hon. member's question to our able Minister of Veterans Affairs. I am sure the hon. member will again see that our veterans, as usual, are treated very fairly.
February 1, 1982


REQUEST FOR ISSUANCE OF BULLETIN
A. Daniel McKenzie: Madam Speaker, as veterans and their families are also being affected by Resolution 53 of the crazy budget, and as this pension information is being suppressed from them, will the minister assure the House that he will have the Minister of Veterans Affairs issue an immediate bulletin to inform the veterans that a procedure will be put into effect to give them their back pension as soon as possible?


J. Gilles Lamontagne: Madam Speaker, as hon. members know, I am very much concerned with our veterans. The question asked by the hon. member is a little puzzling to me. On Thursday, January 28, 1982, the Minister of Finance said in this House the following:
Of course there is no provision whatsoever in the budget that would affect the current status of veterans.
The word of the Minister of Finance is enough for me.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: You poor fool.


METRIC CONVERSION
Mr. Bill Domm (Peterborough):: Madam Speaker, my question is for the Minister of Consumer and Corporate Affairs, who is now responsible for the Metric Commission, which is a total shambles. Over a year ago the minister informed this House, as reported on page 6191 of Hansard in answer to my question, that he had no intention of locking up stores, putting bands around cash registers, or of prohibiting stores from doing business for refusing to use the metric system.
At this time of the minister's debut as minister responsible for the Metric Commission, would he assure this House that he is still of the same opinion as he was last year, in other words, that there will be no confiscation or seizure of equipment, that merchants will not be fined or forced to use the metric system against their will, and that the use of imperial measurement will not be made illegal? Will the minister confirm that?

Hon. Andre Ouellet (Minister of Consumer and Corporate
Affairs): Madam Speaker, 1 believe that all members of this House are law-abiding citizens and that they should assume the same law applies to all Canadians. They will abide by the law in their daily business. I am surprised, Madam Speaker, that the hon. member who asked me this question has apparently urged Canadians to disobey the law. I do not know whether it is true or not, but if it is, I feel it is something that cannot be tolerated on the part of a member of this House.
Oral Questions


William Henry (Bill) Domm: Madam Speaker, those words came from the minister who feels the business community can do without a post office. I wish he would feel they could do without the Metric Commission as well.


Some hon. Members:: Hear, hear!


PRIME MINISTER'S VIEWS
William Henry (Bill) Domm: Madam Speaker, my supplementary question is for the Prime Minister. Over a year ago the Minister of State for Small Businesses and Tourism went on record with remarks that he is now refuting.
In The Toronto Sun of January 15 it is favourably reported that Global TV news has started giving the temperature in Fahrenheit, the measurement of wind speed in miles per hour, and the measurement of snowfall in inches.
In the Kingston Whig-Standard for January 11 the editor in chief writes:
There is no difference in principle between metric law and martial law.
In view of the Prime Minister's apparent endorsement of bureaucrats in the newsrooms of the nation, is compulsory metric conversion one more aspect of his determination as Prime Minister to control all of Canadian life from Ottawa, even to the extent of controlling the way people think about measurements? We on this side are in favour of the choice of the people by the will of the people. I believe this principle of freedom-


Madam Speaker:: Order, please.


Pierre Elliott Trudeau: Madam Speaker, I am prepared to nominate the author of that question as the prize winner in fiction for this year.


NATIONAL ENERGY PROGRAM
Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, my question is to the Minister of Energy. I would like him to react, so to speak, on a question dealing with public ownership in the petroleum industry. His parliamentary secretary told a recent meeting of the Committee for the Canadianization of the Petroleum Industry, and I quote:
The federal government will press on with plans to make the petroleum industry more Canadian, but a takeover of an oil giant is not on the immediate agenda.
Our then ambassador to the United States, Peter Towe, told a group of American businessmen last March that it was not the intention of the Government of Canada to put Petro-Canada in a predominant position in the petroleum industry.
14506

February 1, 1982
Oral Questions
Do these statements accurately reflect the policy of the Government of Canada?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, the hon. member knows perfectly well that if negotiations were in fact going on concerning a possible takeover by Petro-Canada of another company, such negotiations would not be the subject of speculation on my part nor on the part of anyone else. I can confirm to my hon. colleague that at the present time, I am not aware of any negotiations between Petro-Canada and another company regarding a takeover at the present time.


REQUEST THAT GOVERNMENT CONTINUE PROGRAM
Ian Gardiner Waddell: Well, these statements clearly say the government is not going any further. I put to the minister that the Committee to Canadianize said at the end of their conference that, first, the goal of Canadian ownership must be increased to at least 75 per cent by 1985, with Petro-Canada the largest oil company; secondly, the federal government should acquire one of the four major foreign-controlled companies.
In view of the Gallup poll that same committee took, where 55 per cent said yes and only 28 per cent said no to the takeover of one of the big four, and 64 per cent said yes and only 23 per cent said no to 75 per cent Canadian ownership by 1985, why does the government reject the advice of that committee, the advice we have been giving in this House, and apparently, according to these polls, the views of Canadians? Why does the government not continue Canadianization, with public ownership being predominant?


Marc Lalonde: Madam Speaker, we are fully committed to the Canadianization of the oil and gas industry. The record for the last year indicates that quite clearly. It is also our intention that PetroCan become as large if not larger than any other multinational operating in Canada. We are committed to achieving this objective.
We are also committed to achieving at least 50 per cent Canadian ownership of the oil and gas industry by 1990, and I am happy that the Committee for Canadianization were asking for exactly that prior to the NEP. Now they want to go even further, now that we have accepted their initial proposal, and that is fine. There will always be those who want to go further and faster, and that is fine with us. We have succeeded in reducing foreign ownership by 6 per cent in the space of one year, and I hope we will be able to maintain that momentum.


AIRPORTS
Mr. Geoff Scott (Hamilton-Wentworth):: Madam Speaker, my question is to the Minister of Transport. Does he confirm stories like these in the media-


Some hon. Members:: Order.


Geoffrey Douglas Scott: -"Pepin Rejects Compensation in Airport Growth"? Has he flatly rejected compensation for victims of airport expansion, no matter how special or unique the circumstances, such as at Hamilton Civic Airport?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, every member of the House appears to be eager to see the airport in his riding expand. That is the general proposition 1 get every day.


John Carnell Crosbie: Like Mirabel.


Jean-Luc Pepin: Very often the government is accommodating. However, if every time that happens the government had to compensate everyone around for prejudice or annoyance suffered, I dare say the expenditures would be tremendous and perhaps we could not build any more airports. So this is why as a general proposition-and the government is not obligated to do it under the law-there has been no compensation to surrounding residents when an airport is expanded. Hence the responsibility of local governments to see to proper zoning in the area surrounding airports.


RECOMMENDATION MADE BY STANDING COMMITTEE
Geoffrey Douglas Scott: Madam Speaker, the issue here comes down to the unique situation we face at the Hamilton Civic Airport. I find it incredible that the minister is so insensitive to the parliamentary process, since an all-party standing committee of this House unanimously recommended in a report tabled in this House December 17 that there should be compensation in special circumstances. Is the minister then saying that all the time and trouble that committee went to in going to Mount Hope to listen to complaints and concerns was just a waste of time? Is he turning his back on those people?


Jean-Luc Pepin: No, Madam Speaker. What the committee has done is to attract attention to the problem. Unfortunately I cannot agree with the proposed recommendation. My hon. friend, by asking the question today, accentuates the importance of municipal and provincial governments seeing to the proper zoning of areas surrounding airports. I thank my hon. friend for attracting attention to that point.
February 1, 1982


NATIONAL ENERGY PROGRAM
Harvie Andre: Madam Speaker, my question is for the Minister of Energy, Mines and Resources, and I would welcome him back to Canada. During his MidEast trip the minister apparently spent a great deal of time and effort coaxing the Arab nations he visited to invest some of their petro-dollars in Canadian energy projects. How is this effort to bring in Middle East petro-dollars going to help Canadianize the oil and gas industry?


Marc Lalonde: Madam Speaker, as I indicated a moment ago, our program is quite clear. We want to achieve at least 50 per cent Canadianization in the future. That still leaves 49 or 50 per cent foreign ownership. There will certainly be growth in the industry, and our position has not been to refuse the infusion of new foreign money for exploration and expansion of this industry. There is no contradiction between the two.


QUERY RESPECTING CANADIAN INVESTMENT
Harvie Andre: Madam Speaker, the NEP caused the departure from Canada of, it is estimated, anywhere from $7 billion to $17 billion. Pitfield MacKay Ross said there was "unprecedented departure of Canadian capital" as a result of the NEP. The last budget contained several provisions which, by accident or design, discouraged investment by Canadians in Canada.
Why are Middle East petro-dollars preferable to Canadian dollars for investment in the Canadian oil and gas industry?


Some hon. Members:: Hear, hear!


Marc Lalonde: The least 1 would say, Madam Speaker, is that the hon. member certainly has a funny way of reading statistics. As indicated, Canadian ownership in the oil and gas industry increased by 6 per cent last year; it did not go down, it increased. It is our intention to achieve at least 50 per cent ownership well within this decade, and in spite of the opposition to and downgrading of this process by the hon. member's party, we are going to press ahead with this objective.


Some hon. Members:: Hear, hear!


LOTTERIES
Steve Eugene Paproski: Madam Speaker, my question is for the Secretary of State, who is also responsible for Loto Canada. Would he inform the House whether the unclaimed prize money, which was to be returned to the Regie des Installations Olympiques and to the provincial
Oral Questions
lottery association, is going to be used to set up the minister's new sports pool?


Hon. Gerald Regan (Secretary of State):: Madam Speaker, the hon. member is talking about two different subjects. The unclaimed Loto Canada funds have been held back as a consequence of some pending lawsuits against Loto Canada which arise as a result of the manner in which the government, of which he was a member, suddenly stopped Loto Canada without notice to the wholesalers, resulting in a grievance amongst them.
With respect to the funds for the sports pool, they will be advanced by Treasury Board to the new corporation which will run the sports pool once the legislation is approved by Parliament.


FUNDING FOR ALBERTA VENTURES
Steve Eugene Paproski: My supplementary question is very simple. Since the minister has now received $45 million from the provinces with regard to the lotteries, why has he not given the University Games in Edmonton their share of the money, the First draw, and why has he not given Calgary some of the moneys which it requires for capital expenditures?


Gerald Augustine Regan: Madam Speaker, when I hear a question as confused as the one just put by the hon. member, and as lacking in fact, I can recognize why he got into trouble with Loto Canada and gave it up.


Steve Eugene Paproski: Just answer the question.


Charles Joseph Clark: Answer the question.


Gerald Augustine Regan: I want to say, in relation to the student games, which are to be held in Edmonton, that we in the Government of Canada have indicated that we will provide $3.1 million out of tax revenues.


Steve Eugene Paproski: That is not true.


Gerald Augustine Regan: Depending on the availability of sports funds, approximately another $2.1 million will be provided from sports pool funds. In addition to that, the hon. member should well remember that the Government of Canada is assuming a $20 million responsibility for indirect costs incurred as a consequence of the games being held. I think the hon. member should recognize, in view of what a newspaper has quoted him as saying on this subject yesterday, that we did not want to give better support because it was Alberta-


Steve Eugene Paproski: I didn't say anything.


Gerald Augustine Regan: -that I have devoted more time and energy to the support of the Olympics for Calgary in 1988 than to any other single project during the course of my years in this responsibility.

February 1, 1982
Ways and Means


Some hon. Members:: Hear, hear!


Charles Joseph Clark: You should have written the budget.


PETITION
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the one hundred and seventy-third report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for Mission-Port Moody (Mr. Rose) on Friday, January 29, 1982, and finds that it meets the requirements of the Standing Orders as to form.


PRIVILEGE
[Stage Direction]
MR. MCKENZIE-NOTICE OF question TO BE RAISED
A. Daniel McKenzie: Madam
Speaker, I wish to give notice of a question of privilege relating to an answer I received today from the Minister of National Defence (Mr. Lamontagne). He made the comment that veterans' pensions will not be affected by the budget. That is totally misleading. I would like to study his remarks in detail in Hansard and pursue this matter further tomorrow.


Madam Speaker:: The hon. member should know that that was not a question of privilege. The fact that an hon. member is not satisfied with an answer given to him in the House does not constitute a question of privilege.



ROUTINE PROCEEDINGS


Hon. Paul J. Cosgrove (Minister of Public Works) moved: for leave to introduce Bill C-91, to amend the Public Works Act and the Public Lands Grants Act.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Hon. Pierre Bussieres (Minister of State (Finance)):: Madam Speaker, I wonder if I could ask the unanimous consent of the House to return to Tabling of Documents in order to table a Notice of Ways and Means.


Madam Speaker:: Does the House allow the minister to table the documents? The Minister of State for Finance.


Some hon. Members:: Agreed.


WAYS AND MEANS
Pierre Bussières: Madam Speaker, in accordance with Standing Order 60(2), I
wish to table a Notice of Ways and Means to amend the Income Tax Act.


CANADA PORTS CORPORATION ACT
Jean-Luc Pepin: for leave to introduce Bill C-92, to amend the National Harbours Board Act, the Government Harbours and Piers Act, the Harbour Commissions Act, the Canada Shipping Act and the Fishing and Recreational Harbours Act.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.

[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. 1,551, 1,552, 1,558, 2,388, 2,773, 3,066, 3,293, 3,300 and 3,566.


Mr. Cossitt: 1.	With reference to the answer to question No. 31, which shows that Mr. I. Lobanov, Soviet diplomat visited Gravenhurst, Ontario eight times in the last year and a half for which figures are available, has the Department of External Affairs or the RCMP investigated the purpose of these trips and (a) if not, for what reason (b) if so, what was the purpose, in each case?
2.	To the knowledge of the department or the RCMP, did the Soviet diplomat use the excuse that he was visiting the former home of Norman Bethune and to the knowledge of the government is it customary for diplomats of the U.S.S.R. to visit a location that is often referred to as the Chinese Communist shrine?


Hon. Bob Kaplan (Solicitor General):: 1. (a) and (b) It is
not in the public interest to divulge whether or not such trips are investigated.
2.	Ii is not in the public interest to divulge whether or not the reasons for such trips are known or whether it is customary for diplomats of the U.S.S.R. to visit a particular location.
mr. v.i. Mikheev
Question No. 1,552 - Mr. Cossitt:
1.	With reference to the answer to question No, 31. which shows that Mr. V. I. Mikheev. Soviet diplomat visited Gravenhurst, Ontario seven times in the last year and a half for which figures are available, has the Department of External Affairs or the RCMP investigated the purpose of these trips and (a) if not. for what reason (b) if so. what was the purpose?
2.	To the knowledge of the department or the RCMP. did the So\iet diplomat use the excuse that he was visiting the former home of Norman Bethune and to the knowledge of the government is it customary for diplomats of the U.S.S.R. to \isit a location that is often referred to as the Chinese Communist shrine?


Robert Phillip Kaplan: 1. (a) and (b) It is
not in the public interest to divulge whether or not such trips arc investigated.

February 1, 1982

2. It is not in the public interest to divulge whether or not the reasons for such trips are known or whether it is customary for diplomats of the U.S.S.R. to visit a particular location.


Mr. Cossitt: 1.	With reference to the answer to question No. 31 which states in part, that the Department of External Affairs only maintains records of travel movements on Soviet diplomats outside the National Capital region for the calendar year prior to the current year, does any branch of the government maintain records for a longer period of time?
2.	Does the RCMP keep such records and, if so (a) for what length of time (b) does the Department of External Affairs furnish the RCMP with such information as it becomes available?
3.	What are all of the dates, names and points of destination of Soviet diplomats that may be known by the government prior to the list furnished in the answer?


Robert Phillip Kaplan: 1. It is not in the
public interest to divulge whether or not such records are maintained for a longer period of time.
2.	It is not in the public interest to divulge (a) whether or not such records are kept, nor is it in the public interest to divulge (b) whether or not the Department of External Affairs furnishes the RCMP with such information.
3.	It is not in the public interest to divulge whether or not the RCMP maintains such records.


Mr. Herbert: 1.	In each of the past three years, what were the gross sales in (a) Canada (b) other countries of films supported by the Canadian Film Development Corporation?
2.	For the same years, what percentage of total gross sales was the investment by the corporation in the feature film industry?
3.	What is the estimated amount paid for the importation of films from other countries?
4.	What is the percentage of foreign ownership in the companies responsible for film distribution in Canada?


Mr. Jack Masters (Parliamentary Secretary to Minister of Communications):: I am informed by the Canadian Film Development Corporation as follows:
1. The CFDC is not directly involved in the distribution in Canada or abroad of films in which the corporation has participated financially, through loans to producers or equity investment, in production. In keeping with the objects and powers of its act, the corporation advises producers on distribution to help the Canadian industry to develop its own capacity to market its product. Under a program established in April, 1981, the CFDC does provide financial assistance to Canadian independent distributors through short-term loans and investments to be used in the theatrical launch in Canada of a Canadian film.
In response to the question, the corporation has only recently begun to gather information from independent Canadian
Order Paper Questions
producers on the success of Canadian films in theatrical distribution in Canada and in the United States. This information is based on gross box office receipts for all Canadian films and does not include television sales. Information is not available on foreign markets except for the United States.
In answer to parts (a) and (b), therefore, the CFDC is able to provide the following:
	Number of new Canadian feature films		Gross box office	
		released for theatrical		receipts
		distribution in Canada		($000)
		Number produced		
Year	Total	with CFDC participation	Canada	U.S.A.1980-81	27	18	$12,000	$46,000*1979-80	16	9	10,000	45,0001978-79	16	11	6,500	Not available
Note: 15 new Canadian feature films were licensed for theatrical distribution in the United States in 1980-81. Data on the number of new productions licensed in previous years is not available.
It should be noted that, due to the necessary delay of 18 to 24 months between the initial production of a feature film and its actual release in the theatrical market, the receipts indicated above do not reflect the performance of feature films produced in that year.
2. The CFDC financial participation in production of Canadian films, both loans and investments, in total and as a percentage, based on information available to the CFDC on gross box office receipts earned by Canadian films in Canada and the U.S. in the corresponding year is:
Year
1979-80
Investments by CFDC


[Stage Direction]
Loans to producers by CFDC
[Stage Direction]
Per cent of gross box office receipts (as in 1 above)
12.24
19.27
86.15*
*Bascd on Canadian gross box office receipts only.
3.	Based on most recent Statistics Canada publication (1979), $136,188,324 in film rentals and royalties was paid to non-Canadian producers for films imported into Canada. Other importation costs are not calculable.
4.	According to Statistics Canada's most recent published figures, 92 distribution companies were operating in Canada in 1979. Of these, nine were classified within the revenue size group of $5,000,000 or more, and together reported revenues representing 71 per cent of the $210,492,000 in total Canadian revenues from the sale or rental of films and videotape. Though ownership is not distinguished within Statistics Canada's published data, it can be assumed that among these nine companies are the six foreign-owned subsidiaries of the major American distribution companies. Thus, while the percentage
[Stage Direction]
February 1, 1982
Order Paper Questions
of foreign ownership does not appear to be very high in terms of number of distribution companies, the foreign-owned establishments account for a superior portion of total Canadian revenues.
Mr. Cossitt: 1.	Since Mr. Donald Marriott assumed the position of Director of Restaurants and Catering at the National Arts Centre, what was the total amount spent under his direction on flowers and were the flowers discarded daily?
2.	During the same period, what was the cost of fine granulated sugar purchased under Mr. Marriott's direction and has it been the custom to frequently dispose of it in the garbage and, if so, for what reason?


John Gerald (Jack) Masters: 1 am informed by the National Arts Centre as follows:
1.	The total amount spent is $12,361.25, of which $4,271 was recoverable from persons ordering banquets. Flowers are not discarded daily but only when attractiveness has been lost (e.g. a carnation will on average last a week).
2.	$3,494,94. It has not been the custom to dispose of such sugar in the garbage.
data are only known for a few types of expenditures) it is estimated that the per capita health care costs for Canadians aged 65 and over will be approximately $3,500 in 1981.
Assuming that everything else remains unchanged (including the per capita costs of people aged 65 and over), the following is the estimated impact of a growing proportion of people aged 65 and over upon per capita health expenditures:
	Proportion of	Per Capita
	Canadians	Health
Year	aged 65	Expenditures
	and over*	(all ages)
	(Per cent)	(1981 $)
1981	9.5	1.0451986	10.2	1,0651991	11.1	1,0902001	12.1	1,1152011	13.3	1,1502021	16.9	1,2502031	21.5	1,375
Per Capita Health Expenditures (Canadians aged 65 and over)
(1981 $)
3.500
3.500
3.500
3.500
3.500
3.500
3.500
According to Projection 4 in "Population Projections for Canada and the Provinces 1976-2001". Statistics Canada Catalogue 91-520 Occasional.


Mr. Cossitt: 1.	Since Mr. Donald Marriott became Director of Restaurants and Catering at the National Arts Centre, how many cash registers have been purchased for use at the centre?
2.	Was there an occasion when Mr. Marriott negotiated directly or indirectly the sale of a cash register to the centre that either belonged to him personally or was in his care, custody or control and, if so, what are all the details, including the make of the cash register, the year of manufacture, the actual cash value at the time it was purchased by the centre and the amount actually paid by the centre?


John Gerald (Jack) Masters: 1 am informed by the National Arts Centre as follows:
1.	Since Mr. Donald Marriott became Director of Restaurants and Catering at the National Arts Centre, one cash register has been purchased for use at the centre.
2.	Mr. Marriott did not negotiate directly or indirectly the purchase of a cash register that either belonged to him personally or was in his care, custody or control.


Mr. Dantzer: What is the estimated annual per capita health care cost for those over 65 years of age and what is the estimate for the annual per capita health care cost for those over 65 years of age for (a) 1986 (b) 1991 (c) 2001 (d) 2011 (e) 2021 (0 2031?


Hon. Monique Begin (Minister of National Health and Welfare):: It is estimated that the per capita cost for all types of health care expenditures (public and private) will be about $1,045 in 1981. Based upon limited data (age-specific cost


Mr. Cossitt: In the past five years, were there occasions when Soviet aircraft entered Canadian air space without permission in advance and, if so (a) how many (b) what were all the details, including the date, location and type of aircraft involved?


J. Gilles Lamontagne: See reply to question No. 2,473 answered July 9, 1981.


Mr. Herbert: 1.	Does the Department of Employment and Immigration intend to locate day care centres before the end of the fiscal year 1982-83 and. if so, in which locations?
2.	Has construction work started at any of these locations and, if so, what is the estimated cost?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: 1. Employment and Immigration Canada has submitted a proposal to the Treasury Board, seeking authority to establish a day care centre this year at its head office location in Phase IV, Place du Portage, Hull, Quebec.
2. Treasury Board approval is required before construction work can begin.


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


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


Some hon. Members:: Agreed.
February 1, 1982


Mr. Deans:: Madam Speaker, because of the nature of the question I have placed on the Order Paper and the possible consequences which might flow from the answer, I wonder if I might ask the parliamentary secretary to take a look at question 3,698, which I recognize is a fairly new question, and bring to the attention of the appropriate minister the importance of answering that question forthwith.


Erik Nielsen: Star it.


Ian Deans: Thank you. This should be done, considering that the answer to that question could well impact on the legal positions of certain employers in the country.


David P. Smith: Madam Speaker, I will look into the matter and make representations on behalf of the hon. member.


Erik Nielsen: Madam Speaker, in the hope that I am helpful, we would have no objection, as far as this party is concerned, to permitting the hon. member for Hamilton Mountain (Mr. Deans) to star that question in Hansard.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Thursday, January 28, consideration of the motion of Mr. Whelan that Bill C-88, respecting loans to farmers, be read the second time and referred to the Standing Committee on Agriculture.
Mr. Gus Mitges (Grey-Simcoe):: Madam Speaker, 1 welcome the opportunity to enter this very important debate today. The bill before us has come at a very significant time, and I am sure the agricultural community is anxiously following and awaiting the passage of this bill.


Joseph Jacques Jean Chrétien: Good. Let's vote.


Erik Nielsen: Tomorrow night.


Constantine George (Gus) Mitges: Today, without a doubt, the farming industry in Canada is facing its worst financial crisis since the great depression. Last year alone, some 260 farmers were forced into bankruptcy because of the high interest rate policy while others were pushed into forced sales which, in some cases, ended farming establishments which had been in families for generations.
When we look at recent government responses to this rapidly worsening situation, we are left with the fact that, when the government acted, it offered too little, too late. A good example of just such an offer is the bill we now have before us, Bill C-88, respecting loans to farmers. Another example, of course,
Farm Loans
is the budget itself. However, despite the drawbacks of this bill, which I will go into shortly, we support Bill C-88 in principle because it offers more financial aid to our farmers, and that is good. The bill, however, does not go far enough and we have some useful suggestions that we believe will strengthen this legislation and make it more helpful to the farming community.
Generally speaking, we think the Farm Credit Corporation has provided a valuable service to the agriculture industry over the years. Its financial assistance has been invaluable and we support the corporation in its efforts to extend financial assistance to the industry. By giving the Farm Credit Corporation authority to borrow funds from the private marketplace, some desperately needed money will be made available to farmers. With the FCC almost drained of funds to lend, any new injection of money, however small, is obviously a very good thing.
However, beyond this favourable principle of increasing resources, there are problems with this bill. We are very concerned about the amount of funds being made available by the government to farmers through the Farm Credit Corporation. Simply put, we believe, as the industry does, that the corporation is massively underbudgeted. We wonder why only $50 million was offered by the government in its November 12 budget when it knows a more realistic federal contribution is at least ten times that much, $500 million. Some, like the Canadian Federation of Agriculture, would say $1 billion is needed. In fact, every agricultural group has called for a higher and more reasonable level of federal funding. Hopefully, the government will finally recognize this obvious need and increase its aid to a more realistic level.
Of course, allowing the FCC to borrow from private sources will increase its resources, but we hope this move does not mean the government is planning to back out of its financial responsibilities. We need strong assurances that the FCC borrowing authority is supplementary borrowing only and is in no way going to replace direct federal funding. Perhaps when this legislation enters committee the minister will give us these necessary assurances.
Let me say that increased direct federal funding is necessary because allowing the FCC to borrow on the open market does not solve the immediate problems of underfunding. Bill C-88, simply put, does not address the very real problem of shortterm relief. We all know that relief is needed, in many cases right now, in the short term.
The government has helped to solve the long-range funding problems, but it has not even mentioned short-term relief problems. This is why the $50 million offered by the government is so inadequate, considering the average farm loan today is for $100,000. This money will be gone in no time, leaving those in immediate difficulties in much the same situation they find themselves in now, facing imminent bankruptcy. This is an important element completely absent from the legislation,

February 1, 1982
Farm Loans
so again, during committee stage, perhaps we can get some positive answers to the problem.
We also question why this type of legislation was not introduced earlier. It is long overdue and, for that reason, it is welcome; but again, it does not adequately help farmers overcome their massive financial difficulties. It is too little and too late.
We would also ask, as my colleagues from Kindersley-Lloydminster (Mr. McKnight) and Elgin (Mr. Wise) asked earlier, why no mention was made of offering further aid to farmers by way of placing a moratorium on farm bankruptcies. While this is not a solution to the problem, it could go a long way in helping to save farmers from very tough times.
The government has said time and time again that there is a need for economic restraint and that spending cuts have meant reducing available funds for many programs, including aid for our farmers. However, for an area of the economy as important as the agriculture industry is to the economy as a whole, the government's policies are simply ignoring the needs of farmers to create a thriving industry.
The government is only paying lip service to agricultural problems while its tightfisted monetary policy is bringing our farming industry to its knees by creating and maintaining high interest rates and record-high inflation, the very elements that are killing the industry. The government has long ago lost the power or strength of argument to justify its economic restraint policies. We only have to look at the agricultural industry to see how wrong and misguided those policies are to the wellbeing of all Canadians.
Looking to other elements of the legislation before us, we have to ask why the government sees the need to expand the board of the FCC to seven members. We can only hope that these new members are chosen because of their expertise in farming and financial matters, and not because of their past voting habits. Increasing the number may only create greater administrative costs while not necessarily benefiting the agricultural industry itself.
Let's not fool ourselves here. Farm credit loans are not handouts or charity. Each loan is paid back in full, with interest. Loans are a very major part of operating a farm, and dependence on long-term loans has become even greater in recent years. While prices have remained relatively steady over the years, operating costs, such as machinery, livestock feed, pesticides, fertilizer and, of course, interest rates on loans, have all skyrocketed. Therefore, many farmers find themselves coming up short in their current cash flow, even though they have large amounts of capital tied up in machinery and property. A much greater financial effort is therefore needed to help our farmers remain in business.
There are also serious questions concerning how the Farm Credit Corporation is administering the resources at its disposal and how it is treating applicants. Several farmers in my constituency have complained about what they feel is the arrogant, unsympathetic and downright rude attitude they have received in their dealings with some-and I stress some-
FCC field workers. Many farmers I have talked to are very angry and upset to be treated this way when they apply for assistance, which often means the difference between bankruptcy and keeping a slim hold on their livelihood.
I believe very strongly that the FCC should take a hard look at how its program is being administered in order to make sure it is running properly. It is very important to treat our farming community with the respect and dignity deserving of such a hard-working and fundamental sector of our economy.
As I said at the outset, we support this legislation before us. We believe Bill C-88 is a worth-while measure for long-range funding of the FCC and, as my colleagues and I have stressed throughout the debate, as long as the federal government does not lower its direct contributions, we back the bill in principle.
We also hope that the government will guarantee the bonds floated by the FCC so they can be sold more quickly and benefit our farmers that much sooner.
If we want to have a strong agricultural industry, able to produce food efficiently and provide for a reasonable return, the government must be prepared to do its part by creating the necessary atmosphere of growth and recovery. Bill C-88 is a start and if the government looks closely at what we are calling for, we will go a long way in reviving this economically depressed industry.


Mr. A1 MacBain (Niagara Falls):: Mr. Speaker, it is a pleasure to rise this afternoon to speak briefly on Bill C-88 respecting farm loans. The purpose of the bill is to ensure that Canadian farmers have access to adequate sources of the long-term credit they need to finance their farm businesses. There are important clauses in the bill which will allow the Farm Credit Corporation to be more responsive to the needs of Canadian producers.
The serious problem of how to see that the family farm stays in the family has received much attention in recent years. This bill provides a solution to that problem. One of the amendments would allow the FCC to provide financing to a farming corporation to fund a shareholder loan in order to allow the entry of another individual into the farming operation. Sons and daughters will thus be able to join their parents on the family farm.
According to the present Farm Credit Act, the corporation can make loans only on the security of farm lands or farm lands and chattels. Additional security can be taken but a loan cannot be based on this additional security. An amendment in this bill would allow additional security, as defined in the regulations, to be taken into consideration in calculating the size of a loan that a borrower may take out. This additional security could be, for instance, an equity interest in feeder cattle or even savings certificates which, if cashed before maturity, would result in a loss.
Currently, the corporation is limited to maintaining accounts in its own name in the Bank of Canada or in chartered banks designated by the Minister of Finance (Mr. February 1, 1982

MacEachen). It is proposed that in the future the corporation, with the approval of the Minister of Finance, be allowed to maintain accounts in its own name in any bank or financial institution in or outside of Canada. This would greatly improve the cash management opportunities of the corporation as well as its Financial performance.
This bill also contains a provision to increase the number of members of the corporation's board from five to seven. It has had a five-person board since 1959. However, 22 years later, the business of the corporation has grown in complexity and scope. The addition of two members with their diverse experience would greatly enhance the work of the board.
There are a number of other measures in the bill which could be considered a housekeeping nature. They are, nevertheless, necessary to eliminate obsolete items, as well as to update the act to reflect current agricultural conditions. The result will be an act which is easier to understand and to administer.
The Farm Credit Corporation fulfils a vital function in helping both Canadian farmers finance their operations and in providing advisory services to them. Credit advisers provide counselling to all clients and potential clients at the early stages of their development plans. There are also borrowers who recognize that they face higher levels of risk and would benefit from continuous farm business analysis, financial planning and the production and financial monitoring that the advisory services program offers.
Of the total loans approved annually, more than 15 per cent of the recipients agree to the continuous advisory services program. What I find so interesting about this program is the definite progress shown by the farmers who participate. Let us not forget that the participants are generally of a higher risk category with lower equity and higher loan-to-security ratios. When they start with the program, borrowers learn to manage their resources with a definite goal in mind-to become successful farmers. With time, most accounts become successful. By the time that they are released from advisory services, their repayment record is comparable to those who were never on the program.
As for the lending program, the results of the FCC special farm survey showed beyond a doubt how valuable the corporation's contribution is to the agricultural industry.
The survey examined the financial characteristics of the people who have received funds from the Farm Credit Corporation in 1981 and compared them to the average Canadian farmer. It is clear the FCC is currently lending to a much smaller scale of farm than the average. On a national basis, the average assets of FCC borrowers in 1981 were $375,000 compared to $518,700 for the average Canadian farmer. At the same time, FCC farmer debts were $185,000 as opposed to $78,000 for the average period. This results in a net worth of 51 per cent for the FCC borrowers compared to 85 per cent for the average farmer.
This indicates that the FCC is assisting the lower half of the farmers in Canada and also suggests that not many of the
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farmers in the top one third level are receiving aid from the FCC. The survey is evidence that the Farm Credit Corporation is meeting its objective of assisting the smaller, beginning farmer.
Let me point out that the corporation accomplishes these functions without appropriations from Parliament and covers its cost of operation, including losses, on a 1 per cent margin. Especially laudatory is its patient collection policy on overdue accounts.
It has displayed in the years since it was founded sound management policies, but above all a sense of humanity. I hope hon. members will join with me in supporting this bill which will allow the Farm Credit Corporation to do an even better job for Canadian farmers.


Mr. Alex B. Patterson (Fraser Valley East):: Mr. Speaker, it is a pleasure for me to be able to take part in this debate this afternoon. I have the honour of representing one of the major, if not the major, agricultural areas of British Columbia. Naturally, I am vitally interested in all aspects of this bill which deal with the agricultural community and its problems.
In introducing this measure for second reading, the Minister of Agriculture (Mr. Whelan) stated:
Madam Speaker, this legislation is extremely important to the farm community and to Canada as a whole. It proposes measures which will strengthen the role of the federal Farm Credit Corporation in helping Canadian farmers invest in their industry's future.
I appreciate the fact that the minister is interested in the cause of the agricultural industry. Of course, if he were not he would not be in the particular portfolio which he has. However, I think that we are in danger of restricting the application of policies to perhaps a relatively limited proportion of our population. After all, the population of the agricultural community is shrinking and therefore it seems as though it is destined, at least for the present time, to occupy a lesser position numerically than many other industries.
I say that we are inclined to look upon it as a measure to assist farmers, and I appreciate that fact, but I think we must broaden our vision and realize that this bill will not just help the farmers but will meet a worldwide need. 1 think that this will place a different perspective on this bill, rather than looking at it from purely an agricultural point of view. In actual fact, it is a matter of importance to approximately 24 million Canadians. It is also of vast importance to a great many people right around the world who will be looking to us in the future for their requirements as far as food products are concerned.
Although projected population figures vary considerably, it is generally agreed that the population increase will be very substantial in the future. In light of this there will be a greatly increased demand for agricultural products. It has been stated that in the eighties the scenario will be demand outstripping supply. We are told that world food supply has increased approximately 2 per cent over the last several years, while demand has risen at a rate of 3 per cent or 4 per cent. By 1990

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the world's population is expected to increase to 5.25 billion from the 1980 level of 4.25 billion, and those with a seer's outlook state that by the year 2000 we could have a world population of about 7 billion people.
An article in Dun's Review of April, 1981, entitled "Enough Food for AH" refers to previous predictions of food shortages which failed to materialize but states:
Today, the spectre looms again. But, unlike the past, the subject is no longer confined to a debate among academics. The possibility of food shortages in the 1980s is being seriously addressed by farmers and economists, grain merchants and politicians, food company executives and commodity traders. Indeed, says University of Minnesota professor William Cochrane, who was the Agriculture Department's chief economist during the Kennedy-Johnson years: "For quite a while. I was a voice crying in the wilderness. But now quite a large portion of the agricultural analysts share my views that food shortages will occur during this decade."
Therefore, in view of these interesting facts it seems to me that we must give attention to the agricultural industry because in the final analysis we are making a contribution, as I have said, and must make a contribution not only to meet our own immediate needs but also to meet the needs of the world at large.
By that I am not implying that the answer to world food shortages is the massive transfer of produce only. The most important long-term solution in assisting many of the chronically underfed nations is to improve their own production capability, and in many instances this can be done in very unsophisticated ways. However, there will always remain a demand for food. Therefore, we talk about the Farm Credit Corporation and how we are going to assist farmers. According to figures presented with respect to suggested additional funds to be placed in the hands of the Farm Credit Corporation, under present circumstances only a little over 200 farmers will benefit. That will not go very far toward meeting the need of our agricultural community.
I suggest that the role of government is essentially to create an economic climate in which the private entrepreneur-that includes the farmer, of course-is able to function adequately in his own particular sphere of activity in the development and maintenance of a dynamic and productive economy. Unfortunately, while the minister says that he is endeavouring to assist farmers and is doing everything he possibly can to help them overcome present difficulties-I agree, and I believe he is trying-on the other hand government policies which tend to restrict activity, discourage initiative and penalize enterprise can only deepen resentment and despair and undermine the very foundations of our nation.
To many farmers today the question is whether they should continue to struggle on, in the face of the restricted impact of government policies, until the roof falls in, or should they quit, salvage what they can of their equity and apply their energies to other pursuits? This question was posed to me not too long ago by one of the farmers in my constituency. He was examining very carefully whether he would be able to deal with the crisis situation in which agriculture finds itself today and whether he would face it and fight it out or just close up shop and turn elsewhere to make a living. Today many are living on
the depreciation of their assets, and when that is exhausted, that will mean the Finish.
Farm income is tied in with this because when farm income is not adequate to meet needs and provide for the replacement of machinery and assets, then farmers certainly will not have any money left to expand their operations or to do whatever is necessary to fulfil their responsibilities to the common good.
I have an article taken from the Abbotsford, Sumas and Matsqui News, a paper published in my area. This article also appeared in some of the other papers in my constituency. The article states:
Canadian farmers can brace themselves for smaller "take-home pay" in 1982 ... and British Columbia is prophesied to take one of the largest percentage cuts.
Estimates released at the federal outlook conference in Ottawa are for realized net farm income in Canada to reach $3.4 billion in the coming year. That is 15 per cent lower than 1981's level which, in turn, was up 22 per cent from 1980.
Farmers will be faced with the same old cost-price squeeze. Their cash receipts are expected to climb about 4 per cent in 1982 to $19.2 billion. But their operating expenses and depreciation charges will more than eat up this slight gain. These costs are expected to grow about 10 per cent to $16.1 billion.
I will not put any more of that article on the record, but it does point out the difficulty farmers and other businessmen are facing. They have the problem not only of how to make a living but also of how to build up their operations in a way which will meet the challenges of the future and enable them to fulfil their responsibility in the field of agricultural production. I think this is something which ties in with the proposal we have before us today, which is to place more money in the hands of the Farm Credit Corporation.
One of the reasons we have to have more money and why there must be a greater contribution in this way to farm operations is that the farmer presently cannot build up a surplus in order to meet the needs of tomorrow. He is just living at the limit of his capacity and production at the present time. Why should this be? I suggest that there are too many obstacles in the way of achieving the very thing the minister is desirous of achieving, and that is to assist farmers, through additional financing, to carry on their operations and also to expand in order to meet the needs. One of the reasons this is necessary is that government policies, and particularly those contained in the recent budget, are counterproductive as far as farm income is concerned. We are lending farmers money yet extracting taxes from them beyond their ability to pay. 1 think one of the reasons for this is that they are still tied to high interest rates. Perhaps they could have got by if they were still able to borrow money at 10 per cent or 11 per cent but in recent times, when faced with interest rates of 20 per cent, 21 per cent or 22 per cent, they could not accomplish their objectives and pay their way.
The high incidence of forced sales, foreclosures and bankruptcies in the agricultural sector is a sad reflection on a nation such as ours. It is an indictment of a government policy that does not meet the needs of an important sector of our economy.
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On May 5, 1981, before the exorbitant increase in the cost of money, the president of the Canadian Federation of Agriculture addressed Members of Parliament as follows:
The Canadian Federation of Agriculture is most concerned about the increasing number of actual farm bankruptcies and foreclosures. The evidence is that there is a rising flood of farmers in trouble, and bank interest rates are the crushing blow that will put them under. If this is not so, a federal emergency program will get at the truth and no harm done.
Farmers in this position who have nowhere to go for help must have some program which will give them a chance for survival. Failure by the federal government to act and act quickly on this matter would be simply irresponsible.
The minister states that he has been introducing legislation and has outlined various proposals made in order to assist farmers in this particular situation so that they will be able to carry on and function as operating farmers. When we have raised this question in the House he has referred to the Small Business Development Bond, but the qualifications required for that program are so restrictive that very few farmers are able to benefit from it. Even those who, to use the words of the minister, "need it most" have been unable to obtain any help when they are in dire straits. Many farmers who have applied to the Farm Credit Corporation have met with a response similar to the one they received when they applied for the development bond-that there was no money left. There was no money available under the Small Business Development Bond program, there is no money from the Farm Credit Corporation, there is no money anywhere.
I think this points very dramatically to the failure of the Farm Credit Corporation to meet the needs of the farm community. The result is evident in the increased numbers of forced sales, foreclosures and bankruptcies. These numbers are already on the record so I shall not repeat them.
The minister's rather pathetic confession was reported in the Valley Magazine of Wednesday, February 25, 1981 in an article which began as follows:
If you're a farmer with a credit problem, federal agriculture minister Eugene Whelan says he'd truly like to help . . . but there may not be all that much he can do.
Later the article stated:
But even at the national level there is only a limited amount we can do because it is a world problem. The fact is that Canada's success in holding down inflation has been so much better than many other countries is a tribute to the hard work and productivity of Canadian industry, as well as to our rich endowment of natural resources, including our agricultural land.
So the minister confessed that there was not very much he could do to assist farmers in their plight.
The recent federal budget which was supposed to be based on the principle of fairness, equity and justice is proving just the opposite, not only as it relates to the agricultural sector but to practically every sector of the economy. In an article which appeared in the Chilliwack Progress in my constituency, an accountant used the phrase "kick 'em while they're down" to describe the budget that was brought in. He was referring to the agricultural community and went on to point out a great number of the adverse features of the budget. The equity in a family farm for retirement has been eroded. Higher down payments will be required on the sale of farms and this will, in
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turn, reduce the number of potential purchasers which would no doubt have an effect on the price. The higher down payments will prevent young people from getting into agriculture. If the problems facing farmers were bad yesterday, they are compounded tremendously for the future.
There are many other things that work against the farmer's effort to pay his own way, to build up his equity, to get along under his own steam, as it were, without relying on the contributions or loans of the federal government. I do not think farmers want to borrow money for the sake of borrowing; they do it because they have to.
I wish to refer now to the matter of capital gains on farm sales which have a very serious effect on the agricultural community. As has been pointed out in debates in this House, promises have been made relative to legislation dealing with this subject but we, and the farmers of Canada, are still waiting for it. When are we going to see the update of the valuation day values to meet the demands of justice and decency? Why will the government not accept the common sense and valid position of this party that would permit a once-in-a-lifetime exemption from capital gains on the sale of a farm?
Some people may think I am getting a little far from the subject of the Farm Credit Corporation, but this is all tied in together. It is because of all these things that we need organizations such as the Farm Credit Corporation. I had other things to say on this question but 1 will not take the time of the House to deal with them now.
Perhaps I could do no better than put on the record a statement issued by the chairman of our caucus and the spokesman for this party on agriculture. In a news release dated January 28, 1982, issued by the hon. member for Kindersley-Lloydminster (Mr. McKnight), and the spokesman for agriculture for our party, the hon. member for Elgin (Mr. Wise), it was stated:
Finally, after three years of waiting, the government introduced Bill C-88 in the House of Commons on January 27. This bill will allow the Farm Credit Corporation to borrow supplemental funding from the private marketplace.
Last year Agriculture Minister Whelan held out the promise that this bill and the budget would help farmers overcome their financial difficulties. This was another empty promise on the part of Mr. Whelan.
The budget produced more pain than help because it detrimentally changed the capital gains tax reserve and eliminated the Income-Averaging Annuity Contracts and the Small Business Development Bond program for expansion purposes. Although the budget also gave the FCC $50 million, this was a far cry from its real needs estimated to be from $500 million to $1 billion.
When we look at an additional $50 million, in light of the adverse effect of government policies on the agricultural community and the fact that the government is making it impossible for farmers to carry on their operations in a desired manner, it seems to be almost a slap in the face. When farmers have gone to the Farm Credit Corporation they were told, "Sorry, we have no money". The corporation ran out of money a long time ago, but now the government suggests that it will put in another $50 million. This is a far cry from what is actually needed in order to make money available to farmers

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who require it for survival, let alone those who require it for expansion in order to meet the increased needs of a world community which will be faced with food shortages in the near future.
The press release goes on:
Bill C-88 will not provide any needed short-term relief. Even with the extra $50 million, the Farm Credit Corporation has virtually run out of money to lend. It needs more funds.
Bill C-88 should be an important and worth-while measure in the long-range funding of the Farm Credit Corporation and, as a result, we will support it provided the government gives a firm commitment that its direct funding to the FCC will not be cut back. We also hope that the government will guarantee the bonds floated by the FCC so that they could be sold more quickly.
The real tragedy is that this bill has been introduced three years too late. If it had been in place last year, the 261 Canadian farmers who had been forced into bankruptcy might still be productive farmers today, let alone the untold hundreds more who were forced out of business through foreclosure and forced sale.
In closing, I am not saying that the Farm Credit Corporation has not done the job given to it, considering the amount of money made available to it. It was not the fault of the FCC. It comes down to a matter of the government's unrealistic attitudes toward the farming community, its tremendous contribution to our nation today and the contribution it will make in the future to all those people who will be affected by the shortage of food which we are led to anticipate in days ahead. I trust the government will accept some of these suggestions.
I hope it will not only provide additional funds but will take a look at what has been done to farmers by federal government policy which made it necessary for them to turn, in such a great measure, to the Farm Credit Corporation and other lending institutions in order to succeed in their chosen vocation.


Ramon John Hnatyshyn: Mr. Speaker. I welcome the opportunity to address the House on Bill C-88, to amend the Farm Credit Act. The Minister of Agriculture (Mr. Whelan) has been present in the House, but I am sorry he had to leave to attend a cabinet committee meeting. I had hoped that some of my remarks would evoke a response from him. ifhe minister has been vocal and has said much in public respecting his views of the interests of farmers and the action that Parliament, and government in particular, should take to assist farmers. We find that in growing numbers farmers are coming under more and more pressure with respect to carrying on their operations. The parliamentary secretary is present and 1 am sure he will make detailed notes of what I say and take them to the minister, so that he will have the benefit of some of the advice 1 want to give him.
We should look back over the last few months to find out exactly what the minister said concerning the plight of Canadians farmers. I have one or two copies of press clippings which by and large are correct quotations of the minister. Certainly the minister has not taken it upon himself to challenge the accuracy of any of these quotations. He has been more than vocal. He has been pounding his chest in public, speaking on behalf of Canadian farmers and threatening dire consequences if certain actions were not taken by the government. A headline appeared in the October 11 edition of The
Toronto Sun entitled "Whelan: 'Get off your butts'." I want to make a direct quotation of the minister, directed to Canadian farmers. He warned farmers and blamed Canadian banks for the woes of farmers. He said that there should be a temporary halt to farm foreclosures. Also he said that the banks were at fault for letting farmers take out huge demand floating loans which they could not afford. As reported in the article, he said:
I used to have a farm and I was a farm leader. I didn't just holler criticism, but made constructive suggestions ... I don't want to stay on as Minister of Agriculture if some new program isn't instituted. I'm an honest broker as far as politicians go.
As reported in The Windsor Star of October 10, 1981, the Minister of Agriculture was in full flight, oratorically speaking; the moon must have been in a certain position. This man was forging ahead on behalf of farmers. We were waiting with bated breath to see what would happen as soon as the minister returned to Ottawa. He met with his cabinet colleagues and told them the facts of life, how farmers across the country were suffering. As reported in The Windsor Star under the headline entitled "Gene: Wait and see what budget brings," Dave Pink, Star agriculture reporter, referred to Essex, which is the minister's home area. The article read:
Agriculture Minister Gene Whelan says he's expecting help for financially troubled farmers in the new federal government budget.
And if that help doesn't come, Whelan has said he's ready to resign from the cabinet.
"Gene Whelan has been a backbencher before," he said in a Friday night interview.
"I'm very concerned about my position as an honest broker in politics. You can only go so far," Whelan later told a gathering of Essex Windsor Liberals. "We've had meetings. We've made our submissions. We will wait and sec what action the budget takes in the not too distant future."
The farmers of Canada, as one, stood and knelt by their bedsteads that night thinking that the Minister of Agriculture would take action and in fact do something to relieve the enormous economic consequences which they have suffered over the course of past years-unprecedented interest rates and costs of production rising almost daily.
The budget came down. As every farmer or anyone who has had a chance to read the budget knows, it contained virtually nothing for Canadian farmers. It was a disgrace. There was nothing for the average farmer. There was nothing to give any hope with respect to the economic circumstances faced by Canadian farmers today. What do we have? We have the same Minister of Agriculture. There has been no resignation. Interest rates remain high.
The Minister of Agriculture has now decided that rather than resigning he will change his tune slightly. Now the attack is on the banks. He talked about a "verge on fraud" in the banks' treatment of farmers, as reported in the January 14, 1982, edition of The Globe and Mail. What exactly does the minister mean by verging on fraud? He should give us some details so that we can change the legislation and do something to help farmers against the fraud which is being perpetrated upon them by banks. The minister is silent, he says nothing; he said, "I cannot speak". On an opposition day last week a
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motion was put forward, at which time the minister had an opportunity to rise and show where he stood with respect to banks. He stood with the government, in opposition to the opposition motion. This is the background of the Minister of Agriculture coming forward with this legislation as a solution to the problems of Canadian farmers.
What farmer or what Canadian can hold up the minister as a credible representative in cabinet of their interests? Surely this is a case where the minister's bark is far worse than his bite. There is no meaningful help for farmers, either in the budget or in any piece of legislation. He stands on the public stage humiliated and unable to get his way on behalf of farmers across Canada. 1 say that the honourable thing for the minister to do is to resign. Whatever happened to that old tradition, when a question of principle arose, of ministerial responsibility? Whatever happened to the concept of a minister saying "I have had enough, I am resigning; 1 said I would resign and I am resigning". As far as this government is concerned, that principle has gone by the by.
The answer which the minister brings forward with respect to the agricultural policy that he has for Canadian farmers is Bill C-88. This is a very important piece of legislation. It is far-seeing and will help every farmer across our nation. This legislation will enable the number of directors on the board of directors of the Farm Credit Corporation to be increased from five to seven members. Every farmer in Canada will applaud this progressive move on their behalf.
This bill contains a provision-
-(a) to remove the present thirty-five year age limitation for loans under section 33.
This is a brave minister!
This bill also updates some of the language in the Farm Credit Act. Every farmer is waiting for this to be done. I have letters by the carload asking when the language of the Farm Credit Act is to be updated.
You have heard from our colleagues, Mr. Speaker. Naturally we support the principle and thrust of this bill. But when we speak on this bill, we have to point out to the minister that something more is required. Surely this is not the response the government has to assist farmers out of the difficult times which they face in Canada today. We all have to look at the lack of economic support for our farming community in general that is being evidenced by the policies of this government. We see a disturbing trend on the part of this government to sabotage the economic viability of the small family-based farms. They are the backbone of my province and of Canadian agriculture and rural life. There are policies against farmers maintaining the family farm.
1 want to point out to hon. members that in the west there are 150,000 producers. The families of these producers are directly engaged in the production of grain which is largely for export. At present $4 billion worth of grain is exported annually. This has a multiplier effect of four on the Canadian economy. In terms of economic benefit, there is no industry
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that produces more economic spin-off, stability and potential gains for our economy.
Some of the other sectors of the farm economy, such as the dairy sector, the poultry sector and the red meat sector, make a significant contribution to the over-all wellbeing of the Canadian economy. Canadian farmers have very special financial needs. Almost all independent farmers are dependent upon credit. They borrow in order to operate. General operating costs are fixed and unavoidable. Energy costs, machinery and other capital costs have skyrocketed. A farmer cannot rationally starve his livestock and ruin his land in order to cut costs.
Farmers are among the most seriously affected by a policy of high interest rates. This policy means that farm turnovers are made that much more difficult for young people who are attempting to get into farming. They simply cannot afford the additional interest expense. We see the average age of owners of farm land reaching 50 in 1982. Many farmers hold on to their land long past their age of retirement. They do this because the party to whom they wish to sell, very often a son or a daughter, cannot arrange the purchase financing or cannot afford it.
Obviously there is a major role for a corporation, such as the Farm Credit Corporation, to provide reasonable amounts of funding at reasonable rates. For an industry that provides so much to the Canadian economy, this is absolutely essential.
As my colleague who spoke before me has pointed out, there has been considerable delay in bringing forward this bill. In the process the Farm Credit Corporation has become cash starved. We in this party understand the importance and necessity of raising the limits on capital and providing for a corresponding increase in the corporation's borrowing capacity. We also welcome the new flexibility of being able to borrow in the market. As my colleagues have pointed out, we have taken a position of concern because this new direction may lead to a cut in direct funding of the Farm Credit Corporation.
I am waiting to hear from the minister with respect to a commitment by this government that such a cut in that sort of direct funding will not occur.
The industry is also cash starved at this time. This government in its budget has made only a token effort to come up with assistance. Our party has called for additional short-term funding for the Farm Credit Corporation of $500 million. The Canadian Federation of Agriculture says that agriculture needs $1 billion injected into it immediately. People who are involved in the day to day operations of farms through their organizations indicate that is the kind of money that is needed at the present time to be injected into the farming industry.
This government saw fit to allocate only something in the vincinity of $50 million through the Farm Credit Corporation. This is an amount conceivably only enough to deal with as few as 225 applications for assistance, to take the maximum number in that particular hypothesis.
What else does the government give us aside from this additional money for the Farm Credit Corporation? There was, of course, reference to the Small Business Development

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Bond. What should have been a useful tool for long-term capital investment is now only available to those having serious cash flow problems.
Stories have been coming in about the difficulties that small businesses and farmers have had in convincing banks to extend any financing arrangements through the Small Business Development Bond. I simply ask the question whether hon. members have had any experience in this area. You have had experience in the private sector, Mr. Speaker, I know that, but I have yet to meet a lending agency, regardless of advertising, where money is available only on the signature of the borrower, whatever the particular sensitivity of the local manager may be. If someone is in so-called dire straits and approaches a bank for a loan, that person will not be greeted with open arms.
The federal government has restricted the loans in these instances to those in dire straits and financial difficulty. But the government has not said to the banks that if anything goes wrong the government will set up a guarantee that they will not lose all of this money. The banks will look at every application they receive on the basis that money lent must be recovered in the interest of maintaining the viability of their operation. It will be very difficult for those farmers in dire straits.
This government has created in this budget a further hindrance to transfer land by removing the income-averaging annuity contract. Even with the transitional rules announced on December 18, the purchase is vendor financed. The vendor may very well have to borrow to pay his or her taxes after the reserve period lapses. This again puts an impediment in the way of young farmers who want to get into the business and in the way of older farmers and land owners who want to get out. So, Mr. Speaker, we see the government offering only token support to farmers in additional farm credit funding in the budget while at the same time limiting the effectiveness of the Small Business Development Bond and the IAAC.
The farming industry in Canada, particularly in Saskatchewan, is going through all sorts of difficulties. Land prices have increased dramatically in recent years, as have operating costs. It seems the government could do far more to lessen the pressure on the industry at this critical time. The final irony is to watch a Minister of Agriculture who protests so loud and long about his love for the farming community, and then in the same breath allows the FCC rate of borrowing to go up to 16% per cent.
It is fascinating to listen to his criticism of the banks. On January 28 last he made one of his usual verbal outbursts on the subject when he said:
Why can the farmers not borrow from their local banks or credit unions, as 1 might if I were buying a new home or seeking funds to start a new business? Why, indeed? One need only look at the record of the banks over the last five years as to how they have handled, or maybe I should say mishandled, farm loans to know the answer to that question.
It is utterly hypocritcal, Mr. Speaker, for the minister to continue his tirade against the banks when he stands with a government which cares so little for the economic needs of the country's farmers. If the government wanted to make a decent commitment to farmers, why did it put only $50 million into the FCC in additional funds? It needed ten times that amount. Why does it put up the FCC lending rate if it has such great sympathy for the farmer? Why did it assault the farmer's pocketbook in the budget? Little wonder, Mr. Speaker, that farmers do not bother listening to the minister any more; he simply does not deliver.
It is said in western Canada that the bones of long dead western Liberals are becoming archaeological treasures. A museum in Regina has a lot of these old bones and they have a new category. We have Tyrannosaurus Rex, Brontosaurus, and now we are getting the rare "liberalus defunctus".


Mr. Evans:: When are we going to get "conservatus ridiculus"?


Ramon John Hnatyshyn: The "twin from Saskatoon East" is in the House as usual. I am saying these things so that he will take notes and go back to that Liberal rally in Saskatoon East held in the nearest phone booth and tell all the Liberals in Saskatchewan exactly what should be done on behalf of western farmers. If you take notes he may do some good, instead of making these interjections.
Now, Mr. Speaker, the farmers of my province have been subjected to massive pressures in the last ten years. Operating expenses have risen from $966 million in 1976 to $1.58 billion in 1980, a 63.6 per cent increase. In that same time interest payments paid by farmers have increased by 117 per cent. However, the farmers' income has certainly not kept pace. Farmers also have great difficulties in transferring land due to the imposition of a capital gains tax. They are taxed on a gain not of their making, one that is often artificially inflated due to speculation.
The November 12 budget contributed absolutely nothing to the resolution of their problems. It contained minimal financial help, further complicated land transfers and disabled the useful aspects of the small business development bond. Many of you will remember the display of support for the farming community in the budget of the hon. member for St. John's West (Mr. Crosbie). Under that budget a farmer would have been able to roll over up to $200,000 of a taxable capital gain on the sale of farm land into an RRSP. That was certainly a more fair and effective way of allowing farmers to plan for their retirement. This outfit, this Liberal government, seems to think there is something wrong with a person spending his or her working years buying and farming land, selling it and then enjoying a productive retirement on the proceeds.
With the proper service guarantee and a clear commitment by the government to provide the appropriate subsidy, longterm planning can be made by the transportation industry, government and farmers alike, in western Canada particularly.
There have been suggestions recently that an announcement will be made shortly with respect to the Crow rate in western
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Canada. Some of these statements indicated an early decision by the government on this rate. This all affects the viability and stability of the grain farming industry in western Canada.
I simply advise the Minister of Agriculture, as he is involved in these decisions, to heed the words of Mr. Justice Emmett Hall:
once tampering with the statutory rate is accepted or condoned as an item on the bargaining table, all will be lost. For once the subject is on the bargaining table, it will only be a matter of time until it is lost step by step. There is no position to take except to adhere through thick and thin that the Crow rate is not bargainable.
I make those remarks with respect to another initiative announced by this government, and to take a look at what in fact may be the scenario western Canada is facing with respect to another program announced by the Minister of Finance (Mr. MacEachen) and the Minister of Employment and Immigration (Mr. Axworthy), among others. This is because, in my view, a decision on the Crow goes hand in hand with the appearance of the western development fund.
As you know, Mr. Speaker, the $4 billion elusive dream of the October 28, 1980, budget is now a $1.3 billion nightmare for westerners. It was purportedly a fund to modernize the grain handling and transportation sectors, as well as promote western industrial diversification. In the last budget it was slashed by 60 per cent, which turns it into a complete sham. A portion of this year's allocation of $148 million is to be used to assist Vancouver in the purchase of urban light rapid transit. I point out, Mr. Speaker, that all this equipment comes from central Canada. So much for providing jobs, secondary industry and technology to the west.
I wish the minister was here because he indicated some incredulity with respect to this statement which was confirmed by officials in the Department of Finance. Out of this fund the sum of $81 million has been funnelled to Canadian farmers for losses sustained because of the Soviet grain embargo. Now, Mr. Speaker, western farmers are entitled to recover their losses from that embargo. However, this government is paying them from a fund declared to be for the economic development of the west. I should add that $13 million of that payment goes to farmers in Ontario and Quebec.
It is my submission that any payments for compensation to western farmers should have come out of the general treasury. For the government to pay those moneys out of the western development fund is a complete betrayal of the promises made to western Canada.
What about the rest of the western development fund? I fear that a much greater problem faces us. No plans have yet been announced specifically for the rest of that money. However, would it not be convenient for the government simply to remove the statutory freight rate and then have this new fund waiting to pay off farmers? The Liberals, of course, would be most anxious to point out that all this money is to be used to improve western transportation. Of course, the fallacy of that argument is that the railways are already partially compensated for losses sustained as a result of the Crow. Therefore, in
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actual fact, no new money will be put into the west. It will just be old money in new packages.
To let the Liberals get away with this sleight of hand will be an open door to the complete erosion of the benefits farmers have obtained because of the Crow rate. Maybe next year the fund will be slashed again and, all of a sudden, farmers will be paying the full cost of moving grain with no compensation. Therefore, I simply put the warning out to all hon. members of the House that the future shape of the agricultural economy hangs in the balance.
The problem is that if this money is simply paid out as part of the settlement of the Crow, it will not be used for its declared purpose of placing seed money in western Canada for industrial and transportation research and development. These crucial needs of the west are being ignored to the serious detriment of our farming community. I say to hon. members that the indecision on the part of the federal government in developing a rational, global transportation policy in the west causes much uncertainty, many lost opportunities, and ultimately affects the income of our western farmers. This so-called western development fund is a case in point, because it is unfortunate that this fund appears to be ending up simply as a Liberal slush fund to be administered in the usual ad hoc and arbitrary manner without the benefit of appropriate public input and debate.
If the minister were here, I would also point out that there are other initiatives which are needed in terms of the western farmer, aside from the budgetary assistance which can be rendered. An atmosphere could be created in western Canada to let young people know that farming is a career which will be productive and satisfying, and will bring in reasonable returns. There must be a general atmosphere of taxation policy and policy with respect to retiring funds so that people will know that a very productive, important and integral part of our society, the agricultural sector, will remain viable.
In this context I want to make only a few other references to another initiative I think the government should take. I think agricultural research must be stepped up across our country. Various projects are crying out for funding. There has been reticence, and pressure has been put upon the Minister of State for Science and Technology (Mr. Roberts), who has spoken about making new commitments with respect to research and development in our country. Again, I hate to sound immodest, but I say to the minister that it would do himself a lot of good if he simply looked back at some of the initiatives taken by my government concerning that particular area of policy.
In my city of Saskatoon, the veterinary infectious diseases organization is doing excellent work. An example of the research work being done is the development of a vaccine to combat the most common form of calf scours, a vaccine which took four years to develop. More money is now needed to develop vaccine to be given to young calves to prevent shipping fever. Another vaccine is needed to control mud fever in turkeys, which costs the Canadian turkey industry some $9

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million annually, and another for the prevention of the spread of respiratory diseases in young pigs for the pork industry.
Major research is also required in the grain and oil seed industries. The ironic aspect here, as pointed out many times by my colleague, the hon. member for Moose Jaw (Mr. Neil), is that a portion of the funding needed for this research could be derived from funds left over from the Prairie Farm Assistance Act. Some $9 million remains from that check-off fund. It now sits in a non-interest bearing account while it could be used by researchers, on behalf of farmers, for very productive research projects. I congratulate the hon. member for Moose Jaw on his private member's bill which would make this a reality. For some reason which is hard for me to understand, that very reasonable, thoughtful proposition put forward by the hon. member for Moose Jaw has been resisted by the Minister of Agriculture. One would have thought that a minister, who has received headlines for his statements of support for farmers across this country, would have been in line to have said to my colleague, the hon. member for Moose Jaw, "That is a good, constructive suggestion; let us get on with the job. Let us put this money to work. Let us not keep it in the general treasury, where it is bearing no interest for the benefit of the people who, in fact, have invested this money in the prairie farm assistance program."
I think there is one last issue which affects many farmers in western Canada, and I want to make brief reference to it. It is a question which is being asked with respect to the Wheat Board and the contract which it has carried on, in fact, for the benefit of farmers. The projections by Saskatchewan agriculturalists forecast a final payment for durum which was in the area of $1.10 per bushel. The final payment was, in fact, 1.6 cents a bushel. Contract prices are not published. In light of projections, we must ask why such a shortfall took place this year. Why are we not able to get some information with respect to the basis upon which that payment was made? Many farmers want the Wheat Board to be more forthcoming with respect to the basis upon which that calculation was made.
I want to summarize my remarks concerning this bill. Its objective to free the Farm Credit Corporation to go into the marketplace to obtain funds needed to supply the requests for money by the farmers of this country is something we support, as indicated on different occasions by hon. members from our party who have spoken previously. However, in light of this government's lack of support for the farming community in the budget and its indecisiveness in dealing with the transportation of farm products, and considering the way things have been going over the last few years with this outfit, we seriously wonder whether this will not be used by the government to cut direct funding to the Farm Credit Corporation.
Farmers of this country have very special credit needs and operate on a very slim profit margin, particularly in these tough times, and this is not evident anywhere as much as it is in the west. The increases in operating and capital costs have not been of their own making. They need the support and encouragement of the government. The budget gives little
tangible support and, in reality, causes hardships for many who are undergoing transfers, a process which is essential to keep youth in the industry and enable older farmers to provide for themselves during their retirement. Lack of a transportation policy causes long-term uncertainty and loss of income to farmers.
Therefore, I say to the Minister of Agriculture, "Be as good as your word." Speeches filled with the rhetoric for which the minister is famous are not sufficient; some action is now required. We take no partisan pride in standing here to tell the minister that he has miserably failed, as his government has failed, to help the farmers in Canada. I would just as soon stand up and compliment the minister, and to say, "Job well done! You have spoken out and taken action." As a member of the opposition, it gives me no pleasure to be critical; but if one lives in my district, one knows the problems of farmers. Over the course of the last recess, farmers came into my office to say that their own personal circumstances are such that they are experiencing a sense of uncertainty, that they do not know where they are going. I have received tragic letters. I think that if hon. members lived in my area, they would be standing, as I am now standing, to say, on behalf of the Minister of Agriculture, that words are fine, but action is better.


Mr. Maurice Foster (Algoma):: Mr. Speaker, I am happy to have the opportunity to speak on the Farm Credit Act amendments before the House today, Bill C-88. It is significant that during the past week we have been dealing with two important pieces of legislation. Last week we dealt with the Canagrex bill which will play a major role in the future in the marketing of farm products overseas. It will expand that role, working with the private sector, the agricultural community, co-operatives, marketing agents and boards to increase our sales overseas. Someone described the decade of the eighties to be the decade of food and agricultural production, just as energy was our top priority during the seventies. It is therefore significant that we are dealing immediately after the Christmas recess with these two important pieces of legislation.
There is no doubt that the Canadian agricultural industry requires additional assistance. It is an industry that extends across the country, mainly with small family farm businesses working at a time when farm input costs are rising rapidly. The cost of land during the past decade has been rapidly rising. The difficulties of young people getting involved in agriculture have increased tremendously. Added to this is the uncertainty of climate, money and world prices, making it very difficult for an uncertain industry, to say the least.
The important thing about the Farm Credit Corporation is that it brings stability to the lending institutions. There is the provision for long-term lending. During the past 12 months there have been tremendous problems in borrowing from the banks, which have a floating interest rate. The total uncertainty of that situation is just impossible for many farm operations to cope with.
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It is significant that 70 per cent of loans made by the Farm Credit Corporation are to younger farmers who do not have the established track record that older, more experienced and more knowledgeable operators often have. The Farm Credit Corporation must continue to provide such interest and concern for young people wanting to get into agriculture. It is important that we have an agency like the Farm Credit Corporation which has a certain amount of flexibility. When unforeseen problems arise, especially for young farmers, they should be able to defer payments for short periods of time. That sort of assistance is available.
The staff of the Farm Credit Corporation offices does a very good job. In almost every instance it assists young farmers in particular with counselling and advises them on financial matters. It assists them in putting together an economical and viable unit.
We are not dealing with small amounts of money. Let us look at the farm capital investment reported in the national census carried out in 1971. On average, the estimated value of a farm was $79,000. By 1976 this had risen to $190,000 and by 1980, according to the national census figures on the value of farm property, it had increased to $340,000. Therefore, we are dealing with very large amounts of money.
I compliment the Minister of Agriculture (Mr. Whelan) on being able to get this important piece of legislation to the House. I also compliment him on establishing the Anderson commission on August 28 to prepare a report on marketing and other aspects of the beef industry. Of all the farm industries which have had a difficult time during the past two years, the beef production industry has perhaps had a more difficult time than any other sector of our agricultural community.
If we look at the 1979 fall sales, the upper average price for calves selling in the Algoma-Manitoulin district was $1 to $1.10 a pound, sometimes as high as $1.15. In 1981 the average dropped to 70 cents a pound, with top loads as high as 75 cents. In any event, we are looking at an almost 30 per cent decrease in returns. I do not think any other sector of our economy has had to take a 30 per cent drop in revenue during the two-year period from the fall of 1979 to the fall of 1981.
Looking at the input side, the cost of fuel, fertilizer, money and so on has increased by at least 30 per cent. Between September, 1976, and September, 1981, gasoline costs increased by 74 per cent, diesel fuel by 84 per cent, fertilizer by 47 per cent and bank interest rates by as much as 80 per cent. These figures were put together by the Manitoulin beef producers organization.
Looking at the price of beef calves going on to the market in the fall, we see that the consumer buying red beef in the store has noticed a considerable increase, perhaps by as much as $1 a pound over the period of time from 1979 to 1981. Therefore, the consumer has not benefited. At the same time the beef producer has taken a terrific drop in gross revenue and has shown practically no profit for his time, effort, investment and enterprise.
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It is important that we place a very high priority on this farm legislation at this time. Input costs, funding and financing are terribly important and require the earnest consideration of this House and this government. If we look at the support offered by practically every other nation in the world, we see they provide preferential rates for borrowing, many well below 10 per cent and some as low as a zero interest rate. The legislation before us will enable the Minister of Agriculture and the Farm Credit Corporation to go outside of the conventional method of receiving all funding from the federal government, and borrow on the private market.
It seems to me that we should be looking at the possibility of assisting both young farmers who are going into business and retiring farmers by providing a means of funding. Both the retiring farmers and the young farmers starting up can take advantage of this new capacity of the Farm Credit Corporation to go outside the federal government and the Minister of Finance (Mr. MacEachen) to secure its funding.
Another very important part of this bill is the measure for increased capitalization of the Farm Credit Corporation from $150 million to $255 million. This will allow the Farm Credit Corporation to borrow up to approximately $5.6 billion. This reflects the increased amount of borrowing which will be required. It also reflects the increased value of farm property over the last few years.
It is interesting to note that in 1975 the amount of borrowing was approximately $655 million. In 1980 it was up to approximately $2 billion, an increase of at least 20 per cent. I might also note that this legislation provides that the upper loan limits may be increased by regulation or by order in council. It is my understanding that it is proposed to increase the borrowing limits from $200,000 to $300,000 for a single applicant and from $400,000 to $500,000 for more than one applicant.
Also, I note that the legislation which the minister has introduced will remove the age limit of 35 years for people who will be phasing into farming, that is, will be working part-time at another job but will phase in over a five-year period. Removal of that over-35-years age limit is a worth-while change.
Along with the Canagrex bill and the Farm Credit Act amendments, which I hope the opposition will support, I hope the minister will move on rapidly to implement the report which is being prepared by the Anderson-Vandermeulen commission which he appointed last August.
During this past weekend I had an opportunity to travel with Mr. E. H. Anderson, who is serving on that commission, to meet with the livestock and beef producers in the Algoma and Manitoulin districts and hear of the difficult problems which they are facing. I had the opportunity to hear him respond to the kinds of representations he has been receiving across the country about the possibility of reconciling the vast number of stabilization programs which exist at the provincial

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level and to hear proposals for the control of unlimited imports of red beef into our country from offshore areas.
I believe we must proceed in a deliberate, decisive but careful manner as soon as that commission report is given to the minister. If we do not take steps to ensure that we have a viable beef producing industry in Canada, we will end up with a few large producers and a few hobby farmers producing our beef. The present system of stabilization and marketing is totally inadequate, while at the same time-consumer prices continue to rise even though the returns to this vital industry have fallen dramatically over the last two years.
I am hopeful that the Farm Credit Act amendments will pass and increase the capacity of the corporation to secure funds at lower rates. I think the rates which were provided in the special legislation which was introduced in the budget, providing rates at 113A per cent, would be the direction interest rates would take under the legislation. I believe this bill provides some of the legislative framework for those special rates and will be useful in implementing them.
At the same time, the Small Business Development Bond which was introduced in the fall, to be available to agricultural producers who are not incorporated businesses, has been a useful tool. Of course, the Farm Credit Corporation legislation itself is the most desirable vehicle because of its long-term fixed rate of interest, there is counselling available, there is flexibility in it and it is especially valuable and more available to young farmers. At the same time, it provides a long-term credit plan to let agricultural producers know what the interest rate will be.
I hope that this legislation which will be beneficial to the vital farming industry, along with the other beneficial pieces of legislation which will be introduced in this session, will receive the support of the House.


Terence James (Terry) Sargeant: Mr. Speaker, I welcome the opportunity to speak to the amendments to the Farm Credit Act presented in Bill C-88.
I represent a sizeable community of farmers, many of whom have some financial problems, many others who are in desperate financial straits. These farmers and indeed all Canadian farmers have waited almost five years for changes to the Farm Credit Act to find their way from the minister's office to the House. That is a long time, especially for changes as general as those proposed in this bill.
1 see nothing in the bill representing major changes either to the Farm Credit Corporation or to the government's over-all agricultural policy. Given the five-year wait, 1 doubt if many farmers will accept the minister's latest excuse for delay, that he was waiting to hear from the Ontario Federation of Agriculture before he introduced the amendments to the Farm Credit Act. In fact, it appears that the minister has paid little heed to the wishes of Canadian farmers in drafting much of this bill. It is true that more money will be available to borrowers and that age discrimination criteria for receiving a loan will be lifted, but on important questions such as the capital pool of the Farm Credit Corporation and the level of interest rates on loans from the agency, there is little or
nothing at all in the changes that respond to the requests of farmers.
The Canadian Federation of Agriculture requested early last year an increase of some $150 million for the Farm Credit Corporation to respond to the crisis in farm financing. What did they get? For many months they got nothing. In the November budget they finally got $45 million plus an additional $5 million to subsidize interest rates for approximately two years. That is one third of what they asked for.
The minister says that he listens. He does not listen very well. The Canadian Federation of Agriculture also said that interest rates of 14 per cent are all that farmers can afford to pay. But there is nothing spelled out in this bill to suggest measures will be adopted to reduce interest charged on farm credit loans from the current rate of 16.75 per cent.
I agree with my colleague, the hon. member for Humboldt-Lake Centre (Mr. Althouse), when he characterizes the real problem of farm credit as not simply a problem of inadequate credit but one of net income being too low to pay the bills and maintain a viable operation. In Manitoba the realized net income of farmers actually decreased 42 per cent from 1975 to 1981. We all know, of course, that the cost of living did not decline with it. In fact, it increased by 88 per cent. To make up the shortfall in their net income or to undertake the expansion the minister suggested last week was necessary to achieve economies of scale for new technology, farmers have had to borrow at an increasing rate. In 1981 Manitoba farmers paid out $201 million in loan payments, an increase of some 359 per cent since 1975.
The agricultural policies of this government are forcing farmers further and further into debt. Last week the minister told this House that the Farm Credit Corporation is helping to ensure that the Canadian family farm remains a stable and viable entity. Perhaps the agency has helped some family farms, but has it not also been hindered in its ability to help make the family farm viable and stable?
In 1975, 72 per cent of all long-term credit taken out by farmers came from the Farm Credit Corporation. By 1979 the proportion had shrunk to 35 per cent. Who is responsible for that? Surely not the farmers. 1 doubt that there are many Canadian farmers who, on principle, would refuse to borrow at a lower rate from a government agency like the Farm Credit Corporation. It is this government that is responsible. It is responsible for the decline and the fall of the Farm Credit Corporation. With its tight purse strings it has hamstrung the agency. It has prevented it from keeping up with the increasing demand for farm credit. This government has stood in the way of the Farm Credit Corporation and prevented it from responding readily to the credit needs of Canadian farmers, and it has offered the banks-with their exorbitant interest rates and their $1.7 billion in profits-a bigger piece of the Farm Credit Act on a silver platter.
The crisis in farm financing and the declining role of the Farm Credit Corporation have been disastrous for Canadian
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farmers. Last year 261 farms in Canada were forced into bankruptcy. That is more than twice as many farm bankruptcies as in 1979. An increase in farm bankruptcies of more than 100 per cent in two years is shocking.
1 mentioned a moment ago the dismal income situation faced by farmers today. When we see farmers' net income actually decrease over a period of seven years while the cost of everything else has increased, I do not think there is any reason to believe this increase in farm bankruptcies is in some way due to an increase in poor farm management. Farmers are doing their best to run stable and viable operations, but when their income is falling and their costs are increasing, they are forced to borrow. When the interest charges on the money they have had to borrow outstrip their earning potential, some of them are forced to declare bankruptcy. They are forced to give up their family farms.
Everyone should see the need to expand the role of the FCC in financing and refinancing Canadian farms. With that in mind 1 am happy to see that the amendments before us will increase the limit on capital the agency is able to receive from the government. With a larger capital pool the FCC will be able to borrow more money for its operation.
I mentioned before that the Canadian Federation of Agriculture asked the government earlier this year to increase the capital of the FCC. This bill allows for an increase in the capital limit of some $75 million, but there is no assurance that it will be approved for use by the agency next year. We are still waiting for an announcement from the government about how much additional capital it will provide for the agency in the next year. If the government does not come through quickly with a substantial increase in capital for the FCC, many more of the family farms the minister wishes to preserve as stable and viable entities will go under. While the increase of $75 million will eventually mean an additional almost $2 billion in credit, I fear it will be too little and too late.
I have some reservations too about provisions in the proposed legislation which grant the Farm Credit Corporation the authority to turn to the private market for funds. Let me say that our party is generally not opposed to authority being granted to borrow from sources other than the government. We appreciate that such authority opens more channels from which to borrow funds and that it permits the agency to respond more rapidly to increases in demand for farm credit; but the way in which the authority was announced leaves me with a number of questions. For example, how much of its funding will the Farm Credit Corporation obtain from government and how much from private sources? Will the cost of borrowing from the private market be higher than borrowing from the government, or will provisions be made to encourage investors to provide money to the FCC at less than market rate? Will the authority for the Farm Credit Corporation to turn to the private market for funding in the end really mean higher interest rates for farmers? The intentions of the government in this regard are not clear.
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I can only hope that the minister will heed the plea of the Canadian Federation of Agriculture that interest rates of 14 per cent are all that farmers can afford to pay, and ensure the authority granted to the agency to borrow on the private market will mean a reduction from the current 16.75 per cent interest rate.
Last week my colleague, the hon. member for Humboldt-Lake Centre, spelled out a number of provisions which would allow the FCC to obtain funds on the private market for some two thirds of the market rate. I hope the minister heard them and will act on my colleague's recommendations.
The amendments in this bill will transfer the statutory loan limits from the act to regulations. 1 appreciate that that will provide opportunities to the agency to increase loan limits more rapidly than at present. I am glad to hear that the minister announced in the House last week his intention to increase the limits on farm credit loans from $200,000 to $300,000 for individual applicants and from $400,000 to $500,000 for groups of two or more applicants, but the minister did not mention whether the transfer from the act to the regulations of the statutory limit for Indian bands will mean a similar increase. I hope Indian bands applying for FCC loans will see an increase in their statutory limit as well.
I hope, too, that with its new authority to amend the statutory loan limits the government will make every effort to ensure they keep pace with the ever-increasing costs of farming.
I am heartened that, in addition to making provision for more rapid increases in statutory loan limits, Bill C-88 will end age discrimination in the agency. I am speaking, of course, about the requirement that applicants for loans to establish farms be under the age of 35. I am sure hon. members of this House understand that starting a farm is a very expensive undertaking and becoming more so every day. Five hundred thousand dollars does not buy a very large prairie farm these days. It is not unusual for new farmers to have to work and save for quite a number of years before they can even consider investing in their own farms. An age limit of 35 does not give many new farmers much time to build up the capital pools they need before investing in farms.
Last April one of my constituents wrote to me about his encounter with age discrimination in this act. He is not an old man at all-he is only 39-but when he applied for a farm credit loan to help him begin farming on a full-time basis the farm he had bought in 1978, he was refused. He was refused not because he was not in need of the money, nor because he was a poor credit risk; he was refused because at the age of 39 he was too old. It is a pretty sad state of affairs when someone is declared too old at the still tender age of 39.
My constituent and I were not alone in our charge that the Farm Credit Act discriminates on the basis of age. In its 1980 annual report to Parliament the Human Rights Commission urged the government to amend the Farm Credit Act to remove this age differential. It said:
The Canadian Human Rights Commission agrees that it is desirable to provide for a phase-in period for farming operations to become established. We

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recommend, however, that non-discriminatorv criteria be adopted for determining eligibility for a "phase-in farm loan", and in particular that an age limit of 35 no longer be imposed.
I promised my constituent last spring Mr. Speaker, that I would pursue amendments to the Farm Credit Act that would put an end to age discrimination until they were passed by this House.
1 would like to mention in passing that my involvement with this particular case of age discrimination was an education in the machinations of Parliament. Although 1 do not consider myself a rookie, I have to admit I was both confused and a little perturbed about the rules members of this House have to operate under when they want to change legislation. When I first became aware, last spring, that the Farm Credit Act contained this discriminatory clause, I tried to have a private members' bill drafted which would right the wrong.
I am aware, Mr. Speaker, that only ministers of the Crown are allowed to introduce bills which spend taxpayers' money. Most of our ministers are good at this sort of thing, even outside the House of Commons, when they like to jet about in government-owned JetStars or treat journalists to pricey lunches. When I wrote to the law department of the House of Commons to outline and have drafted a private member's bill which would eliminate age discrimination in the Farm Credit Act, I had no idea I was setting myself up for weeks of wrangling and complicated correspondence with the legal department of the House. The result of this wrangling was a ruling from the lawyers that in hoping to introduce a private member's bill I was completely out of order. It seems that the rules of the House say that a bill such as the one I wanted to introduce has the effect of, and I quote, "infringing on the financial initiative of the Crown, not only if it increases the amount but also if it extends the objects and purposes or relaxes the conditions and qualifications" of an act of Parliament.
It did not make much sense to me then and I am not sure it makes much sense to me now how I would be "infringing on the financial initiative of the Crown" by having age discrimination removed from the Farm Credit Act. I was not asking that the government allocate more money to the Farm Credit Corporation. I was only asking that the same government, which at that very time, last spring, was drafting its democratic and glorious Charter of Rights and Freedoms, remove from the books a discriminatory clause in one of its acts. I am happy to see the amendment I sought has finally been introduced.
We in this corner of the House viewed this bill as being somewhat less than we had hoped for. We look forward to dealing with the bill in committee where my colleague, the hon. member for Humboldt-Lake Centre, among others, will bring forward a number of suggestions to make it a better piece of legislation.
We are thankful that after five years of delays the bill has finally come before us. We hope that it will only be the first step in a desperately needed major overhaul of agricultural
policy in this country. If our farm community is to survive, it must be done.


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of State (Small Businesses and Tourism)):: Mr. Speaker, I am delighted to take part in this debate to amend the Farm Credit Act. I think it is quite significant that the Minister of Agriculture (Mr. Whelan) should bring forward this piece of very positive legislation at this time. 1 want to congratulate him for laying the groundwork to provide a solid foundation for agriculture. First of all, I should like to refer to the agricultural food strategy report "Challenge for Growth" which was released last fall. That report laid out the policy direction for agriculture in the eighties and I believe has been well received by the farming community, particularly in Ontario. The task force report of the Ontario Federation of Agriculture, released in late November, 1981, states that the 1981 Agriculture Canada discussion paper "Challenge for Growth-an AgriFood Policy for Canada," while having certain weaknesses, appears to provide an opportunity to develop short and longterm agricultural policies for the provinces and for Canada as a whole.
I believe that paper has gone a long way toward meeting the objectives and needs of this nation. I believe very strongly that the legislation before us goes on to fill the needs addressed in the recommendations of that task force report, particularly from the federal government standpoint. However, a wide gap remains as far as the other policies are concerned.
The minister has put in place the Meat Import Act which was passed in December. That legislation was requested by the producers of this nation. We have made the Small Business Development Bond available to unincorporated farmers in order to help them through times of low prices, particularly those engaged in red meat production. A week ago today the Canagrex legislation was introduced for second reading. This legislation will expand our agricultural industry and utilize the potential of Canadian producers. It will provide markets for increased productivity as the potential of the industry is developed. The agri-food strategy report indicated that we have the potential for much higher production but unfortunately the market system is not in place to take advantage of it.
I believe the minister was very astute in laying the groundwork to put our industry on a firm foundation before introducing the Farm Credit Corporation legislation. I want to commend him for taking this very firm and sensible approach, rather than injecting new financing into the industry in a hodge-podge fashion. It has always been my experience that you do not borrow yourself out of debt.
I also want to commend the minister for the amendments that will allow the Farm Credit Corporation to borrow on outside markets to supplement its loan fund. It is an investment in the future of this nation. Many farmers and lending institutions would be very happy to invest in this sector, not because of the high returns at the present time but because food is the first essential of human life. The corporation's borrowing authority will be raised from $150 million to $225 million; that is a 50 per cent increase. This is particularly
February 1, 1982

important because the corporation would otherwise have reached its maximum borrowing authority early in 1982-83.
Bill C-88 also removes the age limit in the phasing-in program and allows borrowers over 35 years of age to work off the farm for the first five years. Last summer I learned of an instance where a farm wife made application for additional funds because her husband was over the age limit. It is a credit to the minister that this discriminatory clause was removed from the bill.
The bill proposes to transfer the loan limits from the act to regulations. This will allow the corporation to react more quickly to the demands of the industry and the ever-changing need for credit. In addition, it will be able to disburse up to 30 per cent of a loan on the basis of available security until mortgage registration and other security arrangements for the loan are completed. It will be able to rebate 5 per cent of the interest on loans provided for in the recent budget and it will be able to authorize the corporation to lend a farming corporation money which is to be used as a grant or loan to one of the children who wants to become involved in the family farm corporation.
Certainly the increase in the number of directors will give the corporation a broader base of expertise in a sector which is so important to the total industry.
This is a very positive piece of legislation. Perhaps in one sense it should have come forward sooner, but I remind hon. members of the opposition that the minister amended this piece of legislation four times during his tenure, every 2.5 years, which is in keeping with the changes that have taken place in the agri-food sector over the past ten years. There have been some very dramatic changes in Canadian agriculture, in terms not only of the number of farms and farmers, but also the size of and investment in those farms. Indeed it is a credit to the minister that he reacted quickly to the changing needs of the industry.
We must bear in mind that the corporation was originally intended only as a lender of last resort. In this context we changed the legislation as needed. It is interesting that credit unions provide approximately 20 per cent of the line of credit to farmers, banks about 23 per cent, and the Farm Credit Corporation about 25 per cent. We are looking at the main source of financing and funding of the agricultural industry in Canada. It has been a good investment for Canadians, especially when we consider that 90 per cent of all loans were made to family farms. At the moment about 93 per cent of all Farm Credit Corporation loans are in good standing. The majority of these loans were made to individuals who could not obtain funding elsewhere. This is a credit not only to the FCC but to the industry as a whole. Since 1959 the FCC has assisted over
160,000	Canadian farmers, 114,000 of whom still have loans with the corporation.
The amendments before us today and the other economic legislation passed in December are the basis upon which we must build if we are to meet the potential outlined in the
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agri-food strategy last fall. When the amendments about which we are speaking today are passed and the Canagrex legislation is finalized, I trust Canadian farmers and their organizations will move quickly to avail themselves of all available legislation, to expand production and to seek out and develop long-term markets. All these steps were taken at the request of Canadian farmers. This is the way it should happen in a democratic society. The government has reacted in all these areas.
Now that we have these bills before us, it is up to the farmers, their organizations and the provincial governments to move forward. These bills indicate the commitment and concern of the federal government for the need of a healthy agri-food industry. The main financial bill, as far as farmers are concerned, has been amended on four occasions under the term of the present Minister of Agriculture (Mr. Whelan). A huge influx of capital into the industry above that laid out in the legislation would be irresponsible. We all know what happens in such an event-land prices increase very rapidly in value, prices spiral, and it ends up that young farmers are not helped. A huge influx of capital could set off another spiral of inflationary factors and make it completely unrealistic for farmers to expect a monetary return from their farms which would provide them with livelihoods. The situation would be worse than that of today's. The minister has been responsible in the manner in which he has drafted the legislation. We can go forward and make adjustments by regulation, as need arises, and not trigger another round of inflationary prices in the land sector.
The passing of the other legislation to which I referred earlier, the broadening of the base to allow the corporation to borrow outside the government, the raising of the corporation's borrowing authority by 50 per cent, the removing of the age limit, the providing of a disbursement of up to 30 per cent of a loan on the basis of available securities, the allowing of the corporation to respond more quickly to changing conditions, and certainly the allowing of persons to borrow in order to purchase shares of family farm corporations, are all very positive amendments which reflect our changing industry. Last but not least, the broadening of the base of expertise among members of the corporation will result in a better understanding of the needs of farmers across the nation.
In view of the very positive legislation before us today, 1 hope and trust that Canadian farmers will not only look at this legislation but at the agri-food strategy report which pointed out the opportunities ahead of us. They should look at the Meat Import Act which was passed last December. They should look at the Canagrex legislation which will assist them to take advantage of ever-increasing markets in this hungry world. We should bear in mind that Canada is one of four countries which are net exporters of food. We should focus on agriculture as Canadians working in partnership, farmers working with each other, processors and packers working together, not as Canadians from eastern Canada competing against Canadians from western Canada for the same market.

February 1, 1982
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We should allow our food to be exported in an orderly manner, to bring into focus the potential which exists in Canada.
I call on the provinces to come to agreement as quickly as possible and to bring about a harmonization of the stabilization programs across the nation, rather than each province following a system of their own, or each province competing against others in a manner which puts one province at a very distinct disadvantage to that of another, 1 firmly believe that we must correct this situation if we are to achieve the great potential which exists in Canada. Agricultural organizations and provincial governments should examine their roles in this very essential industry.
Earlier I referred to the task force report of the Ontario Federation of Agriculture. It realized there has to be assistance from provincial governments to producers. It was strongly suggested that the government of Ontario bring forward a loan program to assist its young farmers get established.
It is no accident that that report reflects many of the things that we have brought forward as legislation before this House this last couple of months. Certainly these three major bills have been in the works for many months. But it is the understanding the federal minister had of this industry that what was brought forward was done so in a very responsible manner, a manner that laid the firm foundation to which I referred earlier. The foundations are laid. But the total industry-and I include the farmers, the processors and the packers-the provincial governments and certainly this House all have to examine their roles in these times of changing forces in the marketplace.
When one considers the concentration of power at the retail level and the fact that only a few supermarket chains control about 70 per cent of our retail food sales, if the farmer is to survive then we have to have a countervailing force in the marketplace. The legislation is there, and I trust the farmers of Canada will use it to their advantage.
Certainly the legislation before us today goes a long way toward meeting the requirements of Canadian farmers for the foreseeable future. But no doubt in another couple of years the legislation will have to be amended and updated.
There are other areas to which I think we must respond, but I do not think the time is ripe for it yet. When you set up a financial package, that package has to be prepared, as I indicated earlier, in a very responsible manner, a manner that will not trigger another round of spiralling land values, values that with today's commodity prices could not give a proper return on investment.
It is in this context that I urge hon. members of this House to pass this bill as quickly as possible to relieve the financial problems before us in the agricultural sector of Canada.



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 Winnipeg-Assiniboine (Mr. McKenzie)-Veterans Affairs-Entitlement to retroactive pension payments; the hon. member for York North (Mr. Gamble)- Finance-Effect of budget on employees meeting increased accommodation costs following transfers, (b) Request that provision affecting mortgages be postponed; the hon. member for Saskatoon East (Mr. Ogle)-External Affairs-El Salvador-Holding of democratic elections, (b) Recognition of political movement.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Whelan that Bill C-88, respecting loans to farmers, be read the second time and referred to the Standing Committee on Agriculture.
Jack Wendele Shields: Mr. Speaker, it is a pleasure to speak today on Bill C-88. Before I confine my remarks to Bill C-88, I would like to comment on the remarks made by the hon. member for Lambton-Middlesex (Mr. Ferguson). He pointed out very clearly in his address to the House that the legislation fills the needs, particularly where the federal government is concerned, he said. I would agree that most of the legislation passed in this House meets the needs, particularly where the federal government is concerned. Very little thought, very little attention is given to the people who are being legislated, and I might add legislated to death.
The hon. member for Lambton-Middlesex also said that the Small Business Development Bond was made available in the last budget to unincorporated farmers. The hon. member forgot to say unincorporated farmers in dire straits. In other words, the Small Business Development Bond was made available but only to farmers in dire straits. I have yet in my riding to find one farmer who has been approved for a Small Business Development Bond since the budget was introduced last year, even a farmer in dire straits. The terminology itself does not define for the banks or the lending institutions what is dire straits. I agree with the hon. member that investment in the farm community right across this country is indeed an invest-
February 1, 1982

ment in the future of this country. When you get right down to it, you cannot eat refrigerators, or cars, or drink oil.
The producers are men in the farm community who create wealth in our land. It has been estimated that 48 per cent of all the wealth in Canada is created by the farming community.
The hon. member for Lambton-Middlesex complimented the minister for the removal of the age limit for farm credit loans. But it was the same government that implemented the act, enacted the legislation which put that provision in in the first place. His comment escapes me. It seems to me that if you put something into legislation and then a few days later remove the provision and say you have done a marvellous thing, you must not forget who it was who put it in the legislation in the first place. Other members of this House have indicated some of the problems that has created. Nevertheless, I am glad that provision was removed.
My hon. friend from Lambton-Middlesex also said that this legislation was put in place at the request of farmers, as it should be in a democratic society.
How about interest rates? Are the farmers supporting the unconscionably high interest rates that are affecting the whole Canadian economy? Are not the people of Canada saying that interest rates are too high? Are Canadians not asking the government to do something about high interest rates? Maybe that kind of input is not accepted in this democratic chamber, as the hon. member for Lambton-Middlesex suggests.
How about the fight which the cattlemen are having now with the Minister of Agriculture (Mr. Whelan)? Cattlemen are resisting with all their efforts the controls which they see the Minister of Agriculture trying to impose on them. They are fiercely independent cattle producers and they are saying: "No, government, stay out of our business; we will handle it."


The Acting Speaker (Mr. Ethier):: The Parliamentary Secretary to the Minister of State for Small Businesses and Tourism, on a point of order.


Ralph Ferguson: Mr. Speaker, I rise on a point of order with respect to the remark about controls. I think the hon. member should not be suggesting that the minister will impose controls.


Jack Wendele Shields: If the heat is getting too much for the hon. member for Lambton-Middlesex, he should get out of the kitchen.
The hon. member for Lambton-Middlesex mentioned that this legislation was introduced at the request of the farmers, as it should in a democratic society. Those are his words as close as I can recall. I am only pointing that out to him. What about the cattlemen? They are expressing the same thing with regard to the farm community. Do these people not belong to the farm community? They are giving input to the minister. What is the minister doing? He is attempting with everything at his disposal to beat them down. It is a disgraceful situation. But, of course, that is another kind of democracy. Maybe it is only
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democracy and he should return to the words of the hon. member who said that the legislation fills the needs, particularly where the federal government is concerned. I underline that because that is exactly what the hon. member said.
The hon. member for Algoma (Mr. Foster) said they were putting an extremely high priority on this bill. It was mentioned two years ago-that is high priority. Last spring the minister was running around saying, "We have to do something about the Farm Credit Corporation. I am going to introduce legislation." It was promised for last fall. Well, we are now into February. Certainly we support this kind of legislation, but if it had been in place when it should have been, we would have something like 250 to 300 farmers still producing. Instead, they have gone bankrupt, or were foreclosed and are no longer producing.
The hon. member said input costs are up and he gave some excellent statistics. Gasoline is up 70 per cent, diesel fuel 80 per cent or more-I am not sure of the figures. The prices of pesticide, fertilizer, machinery and parts are up. Interest rates are up. Then he said that returns are down. That same member then alluded to the Small Business Development Bond, this great saviour mentioned in the budget. I have yet to find one unincorporated farmer in dire straits, healthy straits or any kind of straits, who has received approval under that bond. I challenge other members to bring them forward to see how many we have. They know full well this was a political gimmick. It has been a useful tool, that is all. Perhaps their ghost writers are the same, Mr. Speaker, I do not know, but they both said they support this bill and they want all members to support it and the other legislation that is coming. We have been hearing that for the last two years.
We basically support the bill giving the FCC authority to seek supplementary funds in the private money market. However, we do not support it unless there is a firm commitment by the government that support to the FCC will not be decreased.
Canada's agricultural industry is sincerely hurting. I have had people from every line of business in the agricultural sector phoning me day after day. They can see their life's work going down the tube after 30 or 40 years because, as the hon. member for Algoma said, their costs are up. They say the return is not there, they cannot make it go. Where is the help over the rough edges for those farmers?
This government will guarantee millions upon millions of dollars in loans to prop up the automobile and manufacturing industries, and yet it sits idly by when it comes to a very basic industry such as agriculture. It points to these red herrings: "Look at the Small Business Development Bond." Well, they cannot get it. We are going to allow the FCC to go out and get money elsewhere in the market. They say, "Boy, isn't that a good thing?" Well, it is in one respect.
The budget itself, what did it do? The Minister of Agriculture went around the country saying, "Wait until this legislation comes through, wait until the budget comes through; you

February 1, 1982
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will see how much this is going to help. I have the answers for the farmers; wait and see." Well, we waited, and what happened, Mr. Speaker? The government changed the capital gains tax reserve to the detriment of the farmer. It eliminated completely the income-averaging annuity contracts. For expansion purposes it eliminated the Small Business Development Bond to the unincorporated farmer. The budget gave the Farm Credit Corporation $50 million and said, "Spread it around, you have more money to lend." It is estimated by every authoritative source in Canada that they needed at least $450 to $500 million more.
I suggest to you and to all members of the House, Mr. Speaker, that Bill C-88, while it is needed, will not provide the necessary short-term relief to enable the farming community to stay in business.
As I said, Mr. Speaker, we will support this legislation, but will the government give a firm commitment that its direct funding to the FCC will continue and not be cut back by way of sleight of hand as were transfer payments to the provinces? Why was this bill introduced three years too late? That is the question. Had it been there when it should have been, those farmers forced into bankruptcy might still be producing, and this government must accept the blame for this idiocy. In addition to those who went into bankruptcy, Mr. Speaker, hundreds were forced out of business through foreclosure and forced sale. This occurred because these are proud people and they said, "No way; I am getting out, getting my money out and getting out of here." These are men who put their hands to the soil years ago; generations of men who came here, Mr. Speaker, and said they were going to break the soil, develop it, grow food and create wealth in this country.
Where is the assistance to get those interest rates down which are affecting the farm community and, indeed, every other community? Where is the assistance which will bring the price of fertilizer to a reasonable level so that the input costs of farmers will not be astronomical? Where is the assistance for fuel oil, diesel fuel and gasoline so that a farmer can go out and plant his crop without being hit by unconscionably higher prices for his fuel? Where is the action toward moving the commodities to market? Where is all this action, this doubletracking? Where will we go with the commodity to feed the world? How will we get it to the world to feed the world? When will the government be prepared to admit to the House that interest rates are not holding down inflation but are adding to it because they are adding to the input costs of the farm community right across Canada? Someone must pay the interest cost.
Farmers are a fiercely independent lot. They do not ask for much. They only ask what any normal working man requests; that is, a little bit of reward for their efforts. Why should a farmer not expect a small return on his investment, not only his investment in money but also in time and effort? Is he not entitled to this? He certainly is entitled.
What would happen tomorrow if there were no farmers available in Canada to produce the food that we eat? We have long victimized farmers and the agricultural community. They have long been victimized. It is time that we looked at that problem seriously. We are prepared to subsidize prospective laywers so that they can go through university. Has Your Honour ever figured out the cost? I wonder if anyone has ever sat down to figure out the cost of putting one lawyer, one doctor, one dentist or one engineer through school. Then a government like this comes along and puts in a national energy policy and a budget so that the only ones who will benefit, of course, will be the lawyers and the accountants who stay behind, but the rest of the professions move out, saying, "Let us move to the States or find another place to live."
I think it is time that we seriously looked at the agricultural community and did right by it. The hon. member for Algoma mentioned increasing the number on the board of the Farm Credit Corporation from five to seven members. He stated that the workload of the Farm Credit Corporation is becoming so tremendous, so monumental, that they must get two more men. The board of directors of the Farm Credit Corporation does not do the day to day business; surely, the hon. member for Algoma knows that. The board sets policy; surely, the hon. member for Algoma knows that. I say to hon. members that five men can set as much policy as seven men, and can set it clearly and concisely. I would suggest, in all humility, that the expansion of the board from five to seven members is just another opportunity for the present Liberal government to do a little more pork-barrelling.


David P. Smith: We never do that.


Jack Wendele Shields: It will be interesting to see who the appointees will be.


An hon. Member:: Jimmy Coutts.


Jack Wendele Shields: However, one can bet that they will be good Liberal supporters.


An hon. Member:: And competent.


Jack Wendele Shields: Yes, I agree with the hon. member. He said "incompetent". That is correct.


An hon. Member:: "And" competent.


Jack Wendele Shields: They will be incompetent.


Gerald Augustine Regan: Be nice!


Miss MacDonald:: Why?


Jack Wendele Shields: The hon. member for Lambton-Middlesex said, "Boy, this new agri-food strategy for Canada will be accepted and it will be an excellent program!" He quoted from studies which are being done. I wonder if he has spoken to the farming or to the agricultural community.


An hon. Member:: Probably not.
February 1, 1982


Jack Wendele Shields: Farmers are uneasy about the food plans. I will quote from "Agricultural Alberta", written by John Schmidt who, very briefly, states:
What makes the farmers uncomfortable is the fact the government wants to pump up production without defining or signifying any specific markets abroad. There is a sort of nebulous feeling that somewhere out there are people who will eat a lot of Canadian food-and there is a panic to supply it.


An hon. Member:: That is what Canagrex is all about.


Jack Wendele Shields: We have had this before, have we not? Farmers do not need extraordinary memories to go back in memory to the early seventies when the government persuaded them to pump up the beef production to fill a non-existent need. They still have not recovered from that one.


Gerald Augustine Regan: Tell us about something they did right.


Jack Wendele Shields: Yet the hon. member for Lambton-Middlesex hails this agri-policy, this agri-food strategy, as the end-all. Again, I wonder where democracy comes in. The farm community is pretty skeptical. Are you listening to the farm community and the agricultural community, Mr. Speaker?


David P. Smith: We are listening to you.


Jack Wendele Shields: I am glad the hon. member is listening to me. I hope he is learning something.
1 can remember times when farmers were told to plant barley from fencerow to fencerow,-


An hon. Member:: Concession road to concession road.


Jack Wendele Shields: -when the markets were lacking, there were no markets, and we all know what happened. We see headline after headline: "Farm bankruptcies up 28 per cent." Nothing can help such a situation. The Farm Credit Corporation will not help that. The help must be directed at the commodity price. We must somehow get the farmers over these short-term dire straits they are in. What is the forecast for 1982? A drop in farm incomes is seen. In every paper that one wants to pick up one reads that every economist across the country is forecasting a drop in farm income for 1982. We are still not addressing that, to our shame.
Another headline states, "1982 Forecast to be Even Tougher Year for Farmers Caught in a Cost-Price Squeeze." This comes from the economist for the federal Department of Agriculture, George Andrusiak. He states:
Farm returns are expected to drop or, at best, remain stable for most agricultural products, while virtually every farm cost is expected to rise. The result is that the cost-price squeeze will tighten its grip on farmers right across the country.
How does this affect the manufacturing sector? Indeed, how does it affect every sector? Farm machinery sales have been hit by revised tax regulation. It goes right to the budget. The farmer does not have his capital cost allowance to write off and he will not buy.
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What did the Minister of Agriculture do? He spent a good part of last fall running around the country, blaming the banks for the high interest rates. Even a neophyte minister with no understanding whatsoever of an economic situation knows full well that it is not the banks that control interest rates but government policy. The policy of this government is to keep interest rates high.
Few sectors of the economy are as dependent on borrowed money as is agriculture. Farmers need money to start their operations and to remain in business. Most of their costs are Fixed. They cannot cut labour costs because labour is not that kind of factor. They cannot cut their feed bill because the animals would starve. If they do not fertilize this year, they will not get as high a yield next year. That is something the members of this House do not understand.
The national farm debt for just over 300,000 farmers has reached $16.6 billion. With 10 per cent interest rates, most producers can manage, but they cannot manage at 18 or 20 per cent. Because they do not control the price of the commodity they produce, they cannot pass on their increased interest rate costs to the consumer. That is what makes the farmer hurt.
When the farmer hurts, the commerce of the country hurts. Commercial enterprise everywhere gets into trouble. One need only look at what happened to Massey-Ferguson, as well as the implement dealers in farm communities across this country. If we look at the farmers in the farm community, we see what is happening.
The government should adopt a program which would place a moratorium on farm debt, stop foreclosures and forced sales. This government has it in its power to raise interest rates in excess of 20 per cent in order to protect the dollar and, so they say, fight inflation. They must therefore have it in their power to place a moratorium on farm debt.
It is this government which provides millions of dollars for foreign aid and programs which at best are questionable. It provides loans to such countries as Mexico and supports sales to certain foreign countries at very low interest rates, yet it leaves the most basic and fundamental resource in this country, namely agriculture, with a high interest rate policy.
There should be an immediate infusion of $500 million into the Farm Credit Corporation in order to subsidize interest rates and increase the loan programs for farmers. This must be done because if we do not do this, the day will come when there will be shortages in the supermarkets in the large urban centres in some very fundamental areas.
Just once the government should adopt the suggestion of a couple of members opposite. The hon. member for Lambton-Middlesex talked about democracy. Let us bring in the farmers who till the soil, get their hands dirty doing it, and plant the crops that we need, to help us draft a policy. We should get away from this ivory tower in which we sit. Let the farm representatives monitor the Small Business Development Bond. The government should come forward with a bit of truth

February 1, 1982
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and honesty and say what the Small Business Development Bond is doing, "It is not doing the job we thought it would, so let's change it". For once the government should say it made a mistake and is prepared to make the necessary changes.
What is wrong with allowing farmers to use the Small Business Development Bond to build up their operations? If some farmers could get a loan against their equity, they could make their operation much more productive, they could streamline it. Instead, we have the government saying that the Small Business Development Bond is only for those unincorporated farmers who are in dire straits.
We should create a market insurance plan for farmers, one to which both the federal and provincial governments can contribute as well as the farmers. This would protect the income of farmers who do not have access to the unemployment insurance offices. We must be more enlightened and find a way of doing this. I am sure we can. May I call it six o'clock, Mr. Speaker?


The Acting Speaker (Mr. Ethier):: It being six o'clock, I do now leave the chair until 8 p.m.
At 6 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

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


Jack Wendele Shields: Mr. Speaker, 1 would like to sum up by saying that we on this side of the House support this legislation provided that the government does not intend to cut back on its financial commitment to the Farm Credit Corporation. Other than for reasons of patronage, I fail to see why the government proposes to expand the board of the Farm Credit Corporation from five to seven members. To me, it is purely and simply pork-barrelling.
We on this side believe that the Farm Credit Corporation should be provided with an additional $500 million because this legislation will not solve the difficulties which farmers are experiencing today or provide the short-term funding which they need. The extra $50 million provided for in the budget is not sufficient. There is still no help for the farmers on a short-term basis. This is an oversight by the government which must be addressed. The legislation before us is too little too late.


Mr. Marcel Dionne (Chicoutimi):: Mr. Speaker, in connection with the tabling of Bill C-88, I should like to give a brief history of the Farm Credit Corporation, outlining the progress made since it was founded, especially since the corporation is 22 years old today. In this brief overview we shall see how the corporation has progressed, how many millions of dollars have
been invested in Canada's agriculture and finally, I shall say a few words about how our agricultural sector has evolved and stress the energy and initiative shown by our Canadian farmers. When I say that Canadian farmers have shown energy and initiative during the past few years, Mr. Speaker, I should add that, although it is often said that millions of dollars are poured into Canada's agriculture, I feel that if every dollar spent in Canadian industry had been as productive as the same dollar spent on agriculture, we might not be experiencing as great a recession as we are now. Let me give an example. Only 20 years ago, one farmer was able to feed not more than ten people, while today he is able to feed at least 40. Therefore, Mr. Speaker, it must be recognized that investment in the agricultural sector has been very productive. Now, if I may, I shall start my brief history.
The Farm Credit Corporation was founded in 1959 with a capital of $8 million. The purpose was to provide funds for a first mortgage, to purchase a farm, fertilizer, seed, livestock, equipment and buildings and also to improve land and pay off debts. The loan ceiling at the time was $20,000 or 75 per cent of the value of the farm, while loans of up to $26,000 were granted to farmers under 45 with at least five years' experience in farming. A second type of loan consisted in a 40 per cent loan guarantee on livestock and implements. In 1961, the corporation's capital was increased to $12 million.
Regulations were amended to allow for the increase in value of grazing land when part of the land was leased from the Crown. In 1962, capital was increased to $16 million. In 1964, the loan ceiling rose from $20,000 to $40,000 per unit. Loans were authorized to farmers wishing to help a family member get started in farming. More people became eligible for loans which were authorized for a wider variety of reasons. In 1968, capital was increased to $40 million. Loans could go as high as $80,000 when the farm had two owner-operators, and up to $100,000 with three owner-operators. In that same year, it became possible to obtain loans representing 90 per cent of the value of land and livestock, provided one of the owner-operators was under 35 and had proved to be an outstanding administrator. In 1972, capital was increased to $6 million and the loan ceiling raised to $100,000 for first and second category farmers. The minimum age of 21 was abolished. Only Canadian citizens and landed immigrants were eligible for loans. In 1975, the corporation's capital was raised to $100 million. Farmers under 35 became eligible for loans of up to $150,000. The FCC also authorized loans representing 100 per cent of the market value of land, livestock and implements. In 1978, capital was increased to $150 million. The FCC authorized loans of up to $200,000 for a farm enterprise headed by a qualified operator and up to $400,000 for a farm with more than one qualified operator.
Mr. Speaker, when Bill C-88 is passed, the FCC will have a capital of $125 million. It is clear there has been a substantial
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improvement in procedures and increase in capital of the Farm Credit Corporation. In 1981, 75,000 FCC borrowers were active in the agricultural sector throughout Canada. This was a brief outline of the Farm Credit Corporation, which is 22 years old this year. Of course I had to omit a number of important facts which would have taken too long to enumerate. In any case, from this brief history it is clear that the FCC has continued to progress and to adapt to the growing needs of modern agriculture.
Mr. Speaker, I could go on enumerating a number of interesting and useful statistics, but I prefer to discuss the importance of investment in agriculture today and the reasons why the FCC evolved as it has. I would like to stress the importance of our modern farming operations. People say that millions of dollars are spent on agriculture and they wonder why. Let me take a dairy farm as an example. Dairy herds are extremely valuable, and because of the rigours of our winters, farm buildings must meet very high standards, especially barns for dairy herds which are very sensitive to cold temperatures, all of which requires a considerable investment. Farmland has increased tremendously in value, so that prospective farmers are faced with very substantial expenditures if they are to purchase farmland and farm machinery.
A few years ago, a 100 horsepower tractor could be bought for $10,000. Ten years later, the same tractor is worth $35,000. The House will agree that all these investments constitute a considerable burden on the farmer, and it is only fair that we should help farmers by granting them broader credit facilities. Another example is our grain producers in western Canada, with thousands of acres of very valuable, very fertile and very high-yield land. Grain producers need huge silos and storage room to keep seed, fertilizers and farm marchinery, all of which runs into thousands if not millions of dollars per farm unit. I should also like to say a few words about the market gardening sector, which is certainly not negligible and requires far more specialized equipment for its highly specialized operations.
We could talk about commercial production and about large scale potato production in Ontario, in Quebec, in Prince Edward Island, in New Brunswick and elsewhere. We could talk about pieces of land. With respect to commercial producers, especially in southern Ontario where farms are of outstanding quality and very expensive to buy, we could mention the fact that those people must have very well equipped and very modern refrigerated warehouses. We could mention the seeds as well as the huge quantities of fertilizers and pesticides which those producers must use. We could also mention the machinery and the marketing costs to point out once again the need for financing which is even better geared to the requirements of our ever-expanding contemporary agriculture which also has to cope with the rising costs of new machinery, lands and all the inputs required for that production.
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We often meet people who still believe that agriculture has not evolved, and that is why we must learn more about the evolution of Canada's agriculture. And of course we must also talk about the risks involved. We know that the farmer has a plant without a roof and he has to protect himself against a great many natural elements. In a plant with a roof it is possible to program the production or the sales, to predict months in advance which way things will go. But on a farm the producer is up against natural elements such as drought, ground humidity and climatic conditions which often are not conducive to plant growth, a whole series of factors which will result in lower yield. There are not just risks in farming, however, there is indeed a very positive side to it. When there are risks, the farmer does have means to protect himself, such as stabilization payments and crop insurance which are funded by the various levels of government, federal and provincial, and the producer as well. We also have marketing boards, Mr. Speaker, and I would like to refer briefly to the establishment of some of them.
Recently, many Canadian organizations have criticized our marketing boards. I admit they might not be the ideal or perfect instrument, but I invite anyone who has a better answer to tell us about it while there is still time, so that our farmers can continue to make a living in agriculture and consumers can continue to pay reasonable prices, because if the farmer cannot have a decent return, the consumer will necessarily have to pay for it. In this regard, I disagree completely with the suggestion of the Economic Council of Canada that we should abolish the marketing boards, in this way Canadian farmers could no longer control their production. For my part, Mr. Speaker, I believe that if anyone is aware of the situation and knows what he wants, it is certainly the Canadian farm producer. As I said at the outset it would be a good thing if the Canadian industry as a whole could be as effective as our Canadian farmers, because if one sector of our economy has remained healthy and prosperous, it is certainly agriculture.
Some sectors obviously have problems. Western beef producers have problems. Eastern pork producers are having difficulties, but these are obviously cyclical productions. Hon. members on both sides of the House who want the Canadian farmer to be successful will find an answer, and I hope that they can do so as soon as possible to avoid a disaster. I said earlier that as recently as 20 years ago, one farm producer could feed ten people and that he now feeds 40. I believe that those who read such statements and who are aware of the dynamic attitude of the Canadian farmer can only urge the Canadian government to make more funds available to the Canadian agricultural industry since we have positive proof of the evolution and dynamic nature of our farm industry. 1 would like to give an example of what I mean. We have to support our farmers and provide them with necessary mechanisms even

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though it has often been said in the past that farmers are always subsidized, but that is where all discussions and arguments stop.
As a member who is somewhat aware of the problems of our farm producers, I have argued with people on both sides of the House, that the Canadian government should continue to pay $2.66 a hundredweight for milk exports. There are two schools of thought in this regard. Some people simply want this subsidy to be abolished because they feel the farmer is oversubsidized. However, if this subsidy of $2.66 were abolished tomorrow morning, dairy products, mainly butter, and also cheese, could increase by about 40 cents a pound. This may be called a direct subsidy to the farmer, but I wonder if it is not the consumer who benefits most from it is not the main beneficiary. I could give many similar examples, but 1 believe that this one is enough and that those who read my statements or hear me now will realize that the farmer needs to be supported and that this is always to the advantage of the consumer.
In the past, every time I have sat on a committee on agriculture and elsewhere, l have always invited those who design or write legislation to treat farmers more and more as businessmen. I have even thought of suggesting regulations which would give farmers an incentive to make advance payments to replenish the Farm Credit Corporation funds, which are often depleted on account of a large number of requests. I reiterate now that proposal because 1 think it would be an excellent way to have instalments paid ahead of time and the funds of the Farm Credit Corporation replenished.
Last year, I stated in a committee that if a farmer were allowed to make advance payments of $1,000, $2,000, $3,000 and up to $5,000 annually, such instalments would not be considered as income and would be tax free. 1 can assure you that the more productive farmers would be encouraged to anticipate their payments and that would inspire others to do likewise. The tax-exempt status of such payments would be similar to that of subsidies enjoyed by owners of businesses in the private sector. Once more, I hope the suggestion will be considered and that others will help support the reasoning behind it. I would also be in favour of including an interest rate review as part of the reorganization of the FCC, so that when a farmer contracts a loan, it is not "closed" for the entire duration of the loan, which may be 25 years. A few months ago I wrote to the Minister of Agriculture to suggest this amendment. Nowadays it would be quite feasible. We have
74,000	loans outstanding across Canada. It would be easy to have a kind of automatic computerized update whenever interest rates drop by an average of 2 per cent, at which time all farm credit loans would be adjusted instead of waiting 15 or 20 years, whenever the loans are due.
Mr. Speaker, I think we should all congratulate the present minister, who has constantly been amending the Farm Credit Act, and we should also congratulate him on the birth last
week of the new Canagrex corporation, which is to be the umbrella organization for a host of agricultural agencies that can be expected to stimulate Canadian farm production. In the past we have had some serious problems with marketing. That is understandable, because we have many commodities that are now being produced under the quota system. However, with Canagrex, I believe people will begin to understand that we must be aggressive in our approach to export markets, especially since our Canadian products have an excellent reputation worldwide. Once more, 1 am convinced that with the energy and initiative they are capable of mustering and with all the tools and structures that have been put into place in recent years, Canadian farmers will be satisfactorily equipped to cope with difficult times such as we are now experiencing. As I already pointed out, the fact that equipment, land and in fact any input that is part of agriculture today is tremendously expensive, the availability of additional funds will encourage young people to enter the farming business in this country, and if our farmers remain productive and dynamic, I am sure that all Canadian consumers will benefit. 1 sincerely hope that Bill C-88 is passed, for the good of all Canadian farmers.


Mr. Doug Lewis (Simcoe North):: Mr. Speaker, it is my pleasure at this time to address a few remarks to the House on Bill C-88 which is designed to help the agricultural community. Half of the riding of Simcoe North is engaged in the agricultural economy, thus this bill is very important to the people who live there and deal mainly in beef cattle, dairy cattle and cash crops. I should like to address a few remarks to the specifics of the bill-the purpose of allowing the Farm Credit Corporation to borrow supplementary funding, the interest rate rebate provisions of the budget, the increase in the membership of the board of directors, and the removal of the 35-year age limit. But before doing so, I want to deal with some of the problems which we know interface with the provisions of the increase in farm credit funding.
In the budget of November 12, the Minister of Finance (Mr. MacEachen) promised additional funding to farmers in the amount of $45 million for loans. The House will know that is a drop in the bucket compared with what is needed by the agricultural community in Canada. The Liberal Party, and in particular the Minister of Agriculture (Mr. Whelan), has made a litany of promises throughout 1980 and 1981 as to what the budget would do for farmers. As farm bankruptcies rose 109 per cent from 1979 to 1981, we on this side of the House called for reasonable assistance to Canadian farmers. This bill goes partly toward providing that assistance, but since the situation has worsened, there has been a need to provide additional long-term funding.
What has happened? We provided $45 million when the Canadian Federation of Agriculture calculated that $1 billion was necessary to do the job for Canadian farmers. The Liberal
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government provided $50 million, of which approximately $11 million was allocated to Ontario. The Ontario Federation of Agriculture calculated that $11 million would not suffice for even one county in Ontario. Representatives of the Ontario Federation of Agriculture appeared before the Progressive Conservative committee meeting in Toronto. They presented a very well-reasoned brief in which they talked about the needs of the farming community. Its president, Ralph Barrie, a farmer himself, was present in person. There was an excellent exchange of viewpoints. Fie suggested to us, and provided us with the facts, that the agricultural community is hurting and that the lack of concern of the Liberal Party is criminal.
Funding for farm credit has declined over the past five years. In 1975 the Farm Credit Corporation lent $641 million; in 1980 it lent $509 million. The $45 million suggested in the budget translates into 450 loans of $100,000 each. This is a pittance when compared with the capital requirements of a Canadian farmer today. It pales even further when one considers that during the first ten months of 1980, 230 farmers across Canada went bankrupt. Over 50 per cent of those bankruptcies were in Ontario. While I welcome the fact that there is more funding, I point out to the House that it is a pittance. The hon. member for Renfrew-Nipissing-Pembroke (Mr. Hopkins) indicated that in the 1980-81 year the Farm Credit Corporation had only provided for 17 per cent of the applications which came to it.
In the November budget presented by the Minister of Finance there was a provision of $5 million to be used to reduce interest rates for farmers. This is an insult to Canadian farmers. They are bearing the brunt of the Liberal high interest rate policy. Farm bankruptcies, power of sale proceedings and foreclosures are all a result of the Liberal high interest rate policy. The government will provide $5 million to reduce interest rates for farmers. At the same time it is considering a loan of $198.5 million through the Canada Development Corporation to allow a Canadian company to bid on a pipeline contract in the Soviet Union. In fact, three interested companies are from Montreal. This is a very sad commentary on the priorities of the Liberal Party. It is more concerned about more money going to the Soviet Union by way of loan or to an engineering firm in Montreal than it is about Canadian farmers one end of the country to the other.
I read about the increase from five to seven on the board of directors. For an extra $50 billion it is hard to understand why the board must be increased by 40 per cent. I am sure the House can imagine the desperate search which is being conducted throughout the country to get people to admit they are Liberals so that they can sit on the board of directors. It must be difficult times for one to admit being a Liberal in order to be part of the board of directors of the Farm Credit Corporation. Jim Coutts is a name which comes to mind. He is a very eminent chap who took a run at Spadina. Perhaps he will take a run at Broadview-Greenwood. Perhaps he will take a look at some other ridings. Mr. Coutts has a very distinguished electoral career. Perhaps he would be quick to get on the board of directors of the Farm Credit Corporation. One might think he
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may even be able to clear his conflict of interests faster than Senator Austin in order to approach that eminent position.
Speaking about the administration of the Farm Credit Corporation, I should like to point out that from my standpoint in Simcoe county, as I indicated to the minister, I find it to be very practical. If the minister could get some of the practical approach of the Farm Credit Corporation people in Simcoe County to be translated to the Federal Business Development Bank, business people would be on his side. The Farm Credit Corporation deals with applications, either approves them or turns them down, whereas the Federal Business Development Bank dances business people around with requests for more and more information, and eventually turns them down. Basically, we in my county are happy with the people who review the loans and make the decisions.
We on this side of the House applaud the removal of the 35-year age limit. Unfortunately it was left in and the government did not remove it before now. At least now it will be possible for every applicant to stand on his or her own merits regardless of age when applying for funds to establish a farming operation. We welcome this step because we do not think anyone should be denied an opportunity to enter the farming community because of age.
While dealing with the financial provisions of the bill, I would like to comment upon the Small Business Development Bond. Much has been made in the House about the extension of the provisions of the Small Business Development Bond to the agricultural community. As it was originally conceived, the extension of the bond to that community would have been a boon, just as it would have been a boon to the business community. But the same provision was put on the bond for farmers as it was for business operations. Now we have a criterion that one must be in desperate or dire straits, or in financial difficulty, before the government comes to the aid of this very important segment of our economy. We can do without widgets, but we cannot do without farm produce or the food which can be grown in our soil. It is about time the government put a priority on the farming community. If it wanted to do something, it could take away financial difficulty. It could expand the financing available for the Farm Credit Corporation. Canadian agriculture deserves a higher priority from the Liberal government than it is getting at the present time.
We welcome the bill. However, we do not think the bill has gone far enough because Canadians are suffering from the impact of high interest rates. The budget did very little for them and, for that matter, for anybody else, but we are pleased to see at least one thing come forward from this government to help the farming community.


Stan Darling: Mr. Speaker, I am privileged to be able to say a few words with respect to Bill C-88, an act respecting loans to farmers. 1 commend the minister for finally bringing in this bill. As hon. members are aware, the bill will provide additional funds. It has been

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mentioned by several speakers on our side that this bill will increase the complement on the board of directors from five to seven. However, some of us wonder whether the minister has a couple of defeated Liberal candidates in mind for these lucrative positions in which they will not be overworked.


Mr. Crouse:: He will take one himself.


Mr. Whelan:: People appointed to the Farm Credit Corporation are not appointed because of political affiliation.


Stan Darling: I am pleased to hear the minister say that the people will not be appointed because of political affiliation. 1 have heard it said before that people are not appointed to boards because of political affiliation but because of ability. However, the strange thing is that appointees are always Liberals and not of any other political persuasion.


Some hon. Members:: Oh, oh!


Eugene Whelan: If you check, you will find that to be incorrect.


Stan Darling: In any event, we will wait to see what happens when these appointments are made.
The budget approved is $55 million. While that is a substantial amount of money, it is a far cry from what is really needed. We hope the minister will be able to do a job and sell the cabinet the need for additional sums. It will not take long to use up $55 million.
Everyone agrees that the Farm Credit Corporation has been of great assistance to agriculture and to the industry in Canada over the number of years since its institution, which I believe was in 1959, some 22 years ago. However, this bill has been delayed too long, but it is better late than never. I see the minister paying some attention. Better never late; I think he would agree with that statement.
My colleague, the hon. member for Elgin (Mr. Wise) was minister of agriculture in the Clark administration during 1979. During that brief period, $50 million was provided for additional farm credit lending. The hon. member for Elgin was planning to provide an additional $100 million in 1980, an additional $150 million in 1981, with $200 million to be added in 1982. This was necessary, in his view, just to keep up with inflation and the rising land costs in the country.
I think we are all in agreement that these costs will not decrease but will actually increase. Farmers require credit. It is important that Canadian people understand that about 15 per cent of the costs paid out by the agricultural industry is for interest. Credit is the number one problem facing farmers in Canada today, and the cost of borrowing money is still very high. Let us hope that the minister will see to it that there is no increase in rates but rather a decrease. The rate of 16.75 per cent is quite a bit for a farmer to carry. The minister, although he is not a farmer now, has been a farmer and is, I am sure, sympathetic.
The provision is in there for a reduced rate of five points, I believe, which gives an interest rate of 11.75 per cent for those farmers who are in dire straits. I have had farmers come to me
stating that they have applied to the Farm Credit Corporation but have been told they are not on the verge of bankruptcy and, therefore, are not eligible for the 11.75 per cent rate. It would certainly seem that farmers who are reasonably successful and who want to consolidate some high mortgages, which they may have privately, should be able to get that break on the lower rate.
I live in a riding, part of which is eligible for DREE grants. Although with the two new super ministers I do not know whether DREE will be washed out, but the minister responsible did state that DREE grants are still available. Considerable money-and I am talking literally of millions of dollars- is being given to industry to subsidize industries to open up in certain areas. I say to the Minister of Agriculture (Mr. Whelan) that subsidized loans or interest rates are just as fair for producers, the people who are feeding Canadians. Our producers feed not only Canadians but a great many other people in the world. Canadian farmers do a great job. I believe a speaker from the government side said that a farmer is now able to produce enough food to feed 40 people. That is a pretty good record and a point I want to emphasize.
The Canadian Federation of Agriculture has stated that the Farm Credit Corporation provision is disgracefully inadequate and is a sop to the farmers' request for real help. As I mentioned before, the $45 million provided in the budget allows only $100,000 for 450 farmers, yet a farmer needs about $200,000 minimum to start up a farm today. This means only 225 farmers would be eligible for the amount that has been approved.
Many farmers have been looking forward to this legislation hoping that it will be the solution to their various serious financial problems. The government actually made matters worse with this stupid and disastrous budget brought down by the Minister of Finance (Mr. MacEachen) on November 12, 1981. I am quite sure that we cannot blame the Minister of Agriculture for that.
I assume that the minister is endeavouring to encourage farmers to stay in business and to produce food for the good of Canada, whereas the Minister of Finance has done everything he and his brain trust of bureaucrats could do to make things difficult for farmers to stay in business. In all probability the budget will cause additional farm bankruptcies to the 261 that took place last year.
The budget now penalizes the retirement income of farmers. After having worked all their lives to provide food for Canadians and thousands of others beyond our borders, they are now being penalized when they decide to retire and sell their farms. Farmers were under the impression they could arrange a pension from the proceeds of their farm sale.
Valuation for capital gains is also unrealistic. This valuation should be upgraded. The minister is well aware of this suggestion. It is a long-time election promise of his government. The very idea of calculating capital gains on the basis of values as at December 31, 1971, is absolutely senseless, especially when we consider the rising costs to farmers in this country and the price of farmland per acre. Many farms have doubled in price.
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Some have tripled over the past ten years. The price of necessary farm equipment has doubled and tripled as well. This means that a farm that could have been purchased ten years ago for around $100,000 could be worth as much as $300,000 or even $400,000 today. The former Minister of Agriculture, the hon. member for Elgin (Mr. Wise), suggested a far better solution with respect to capital gains tax on farmers would be a once-in-a-lifetime exemption for a bona fide farmer. Having been a real estate broker for a number of years, Mr. Speaker, I am very familiar with the inflated value of land over the past ten years, and I would therefore emphasize that the very least the government could do would be to index the capital gains.
I would also point out that it is not only the farmer who is hurting with respect to capital gains, but also many other small businessmen who are retiring and want to dispose of their business and assets and are being taxed at exorbitant rates. Prior to the Finance Minister's monstrosity on November 12, farmers and businessmen could dispose of their farms and businesses and place the funds in income-averaging contracts and RRSPs. These assets represent their pension as neither of them have pension schemes with the government or large corporations. This new harsh and restrictive clause, even though it has been amended slightly, is most unfair, and let us hope the minister will recant. I hope the Minister of Agriculture will have a word of prayer with his colleague, the Minister of Finance, or better still take him out to the woodshed and talk to him as a father would to his son with respect to capital gains and capital cost allowances.
There is another item in the budget which is going to hurt farmers; that is, the few who are solvent enough to make a reasonable profit and be eligible for taxation. I refer to the capital cost allowance. That allowance is as important to the farmer as it is to all other businessmen. Farmers purchase machinery and it wears out, or is constantly being improved, and therefore farmers help the economy by purchasing new equipment.
The Department of National Revenue makes it very clear they recognize capital cost allowances. Are they also aware that if this new regulation is put in, it not only hurts the farmers but the equipment dealers and other businesses which provide the needed equipment to keep farms operating as they should? Revenue Canada, in their 1981 farmer's income tax guide, recognize that over a number of years assets wear out or become obsolete. However, in the budget it also states:
In many cases the capital cost allowance rates are deliberately set in excess of economic depreciation rates in order to provide incentives to certain types of investments in the economy.
Then they came up with this change:
For assets acquired after November 12, 1981, taxpayers will be permitted to claim only one half of the normal full year's capital cost allowance in the year of acquisition.
This is another backward step by the Minister of Finance's munchkins. They have sold the minister a bill of goods that some equipment and machinery is being depreciated at much
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faster rates than is warranted. They seem to think that if a farmer or businessman only gets half the depreciation the first year, because he can get the rest later on he is not being hurt.
I am quite certain, Mr. Speaker, that many farmers will, because of this, try to make do a year or two longer, and this will hurt the economy in general. I know one particular farmer-a quite successful one-who, when he read the budget, purchased two very expensive pieces of farm machinery. He would not have done so if the depreciation had remained the same. Now, I will admit that was good for the implement dealer and the farmer, but in all probability there are a great many others who are not in the financial position to run out and purchase new equipment prior to the budget date.
It can be concluded, therefore, that farm machinery manufacturers and dealers will be hurt by this change. The dealers have already pointed out that it has had an adverse effect on farm machinery sales.
The Minister of Agriculture is well aware of the serious situation of farmers. In my own riding there are many successful farmers who have been farming for years and yet are feeling the pinch and having difficulty staying afloat because of high interest rates. The minister visited the town of Powas-san in my riding to officiate at the opening of a farm supply business. He was met by many worried and, yes, irate farmers who wanted to know what he was going to do to help them. Every weekend in my constituency office there are many farmers who telephone or come in personally to see what can be done to enable them to borrow money at reasonable interest rates so they can remain in business. The rate proposed by the minister through the corporation to help those in dire straits is excellent. The unfortunate part is that a good many of the farmers not on the verge of bankruptcy but feeling the pinch of high interest rates do not qualify, and to me this is absolutely crazy.
Mention has also been made by previous speakers, in fact by my colleague, the hon. member for Simcoe North (Mr. Lewis), of the Small Business Development Bond. This program has now been enlarged to include partnerships and individual entrepreneurs, which had been restricted to limited companies. However, the kicker in this, the bad part about it, is that the only ones now eligible for the bond are those again from that little village in western Ontario, New Dundee, I believe it was, which changed its name to Dire Straits. In other words, you have to prove you are in dire straits, almost on the verge of bankruptcy, but then when your books show that, you are not eligible. To me that bond, as well as the new low rates of the FCC, should be available to progressive farmers to perhaps consolidate a mortgage or purchase equipment to modernize their operations.
Many people have pointed out that there will be more and more farmers leaving agriculture and not finding buyers for their farms. The return is not adequate, the cost of going into farming is astronomical, and a good many of the farmers are saying, "No thanks, include me out." The sale of farms to young people has stopped because of tight money and many of the very negative regulations in the budget. One of the worst

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regulations has to do with the sale of a farm with a small downpayment, where a farmer may take as little as 10 per cent down and, in ordinary circumstances, would take the balance in effect as a pension for himself and his wife. Even if he were able to get all cash in a sale, the capital gains regulation is very unfair because the government would extract its pound of flesh, often making the deal very, very unattractive.
So a good many farmers who might have been considering retirement are probably going to say, "Well, no, we are going to hang on for awhile. We will work out something, lease the farm or do something so that the government will not be able to get their clutches on all this money." 1 think they are going to be saying, "Well, we will wait for the next election. We know the present government will be defeated and the government which will succeed it, which of course, as we are all aware, will be a Progressive Conservative government, will certainly amend that stupid regulation."


An hon. Member:: Don't be too sure about that. Wait for a couple of months.


Stan Darling: We will wait for a couple, as the hon. member for the NDP side said, and who knows? One never knows. Stranger things can happen, but 1 remain to be convinced on that.


Gordon Edward Taylor: We can wait but can the country.


Stan Darling: That is exactly right. The Farm Credit Corporation has outstanding loans under the Farm Credit Act of March 31, 1980, a considerable number of which may be of interest to many of our listeners. Ontario has $917,487,000. The purpose of the Farm Credit Corporation is to help as many young farmers as possible, and older ones. About 27.9 per cent of those loans approved last year were used to purchase additional land, compared with 29.8 per cent the previous year. Other loans went toward the following: new units, 24.4 per cent; permanent improvements, 16.5 per cent; mortgages, 12.3 per cent; other debts, 12 per cent; equipment, 2.3 per cent; livestock, 2.2 per cent and miscellaneous 2.4 per cent. The repayment record for 1980-81 remained favourable. Out of the $75.2 million due, 89.4 per cent was repaid.
During the year, 91.9 per cent of the $279.1 million in due interest was repaid. At the end of the last fiscal year, 93 per cent of the active accounts of the Farm Credit Corporation were in order, with 93.2 per cent the year before. Real losses amounted to $1,537,000 or 1.4 per cent of the portfolio of the Farm Credit Corporation.
During the fiscal year April, 1981, to January, 1982, the Farm Credit Corporation approved 4,328 loans for nearly $429 million. Estimates reveal that the total budget for this year will reach nearly $455 million. The major purpose of the majority of the loans is to purchase additional land, followed by the purchase of new units. The number of loans for debt consolidation purposes has increased markedly because of the
high interest rates, which reached as high as 27.1 per cent in September of 1981.
As I mentioned before, we will certainly support this bill. We think it is long overdue. We hope that the Minister of Agriculture will be able to prevail upon his colleagues in cabinet to get a good deal more than the $55 million, which is a mere drop in the bucket at the present time.


Some hon. Members:: Hear, hear!


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, I was very pleased to see the Minister of Agriculture (Mr. Whelan) come to the session tonight on this bill, the Farm Credit Act. I think it has been intimated by hon. members who have previously spoken that this is one bit of agricultural legislation which has stood the test of time more than any other. It has not needed serious amendment. At the same time, during the 20-odd years since 1959 that this legislation has been in existence, we have seen a growth rate of productivity in the agricultural sector of about 7 per cent a year compared to a growth rate of about 2 per cent to 3 per cent in the rest of Canada's industrial segments. There is no question but that this first attempt to get a modern farm credit system in Canada has been a success. My remarks tonight will deal almost exclusively with the philosophy of the legislation. I would like to test that philosophy against the amendment we have before us.
The philosophy of the farm credit corporation act of 1959 can be shown by contrasting it against the old farm loans board which was set up in 1934 under the farm loans act of that year. The principles used in the original legislation in 1934 were for the purpose of meeting an existing condition. Many farmers were bankrupt, no one would buy their land and they had no way of paying their debts. Therefore, the government of that time set up the farmers and creditors rearrangement act whereby all a farmer's creditors would come in and calculate how much of a debt would be repaid under the new level of prices, which was very low. All creditors dropped the amounts of their claims and each was repaid a certain proportion of their loan. That act had to be followed by a farm loan act which lent money to the farmers to help repay some of the creditors who were fairly highly secured, getting them off the farmers' backs. The farmers borrowed money from the farm loans board to repay some of these creditors.
That legislation pioneered a new philosophy, but as the act was administered over the succeeding years it became a very conservative type of operation where loans were only made on the basis of a farmer's assets. The potential profit of money put toward new productivity was not considered. It simply acted like a bank. If a man had $10,000 worth of assets, he might take out a loan of $4,000. Very few risks were taken and there was very little development of new technology under that philosophy.
The philosophy of the 1959 legislation was to consider the potential profit if a man were loaned $10,000, $20,000 or $30,000, and if the loan were put to proper use. Therefore, people began working on the Farm Credit Corporation with
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the farmer, out of the various provincial branches, to get a plan ready. Their philosophy was that if the farmer spent his money, it would increase his income, not only enabling him to pay back his debt but also leaving a nice, handsome net gain for the farmer during the repayment period.
That legislation was conditional on the power of the government of the day to persuade those who worked for the new Farm Credit Corporation to change their philosophy of lending on assets, not caring a hoot what the farmer did with the money so long as he could pay it back, to one of trying to help the farmer increase his growth and productivity, which would benefit the whole country. The Farm Credit Corporation grew and expanded on that basis. However, recently, in the last ten or 12 years, I have noticed a reversal of philosophy by those administering farm credit. Only ten or 15 years ago when I spoke to the Farm Credit Corporation people they were very willing to lend money for cattle, although they had decided there was a need for more livestock in the country. Because of this philosophy, it was very easy to get loans if one wanted to expand one's cattle operation, but it was not so easy to get loans for other purposes. 1 do not blame the Farm Credit Corporation people for that. Maybe they called the shot right.
As we know now, of course, the cattle industry overexpanded, and we have been suffering pretty well ever since. However, that should not be held against the Farm Credit Corporation because it was doing what it thought would give the greatest potential to that farmer.
I will not go through all the details, but 1 have now said enough that 1 must ask the following question: If that was the philosophy of the act which was in existence in 1959, what is the philosophy which is coming through in this bill and amendment? It seems to me that the philosophy coming out now is that the only people who will get money from the Farm Credit Corporation are those who need it the most. If you are doing well today as a farmer and want to do better, you cannot get money from the Farm Credit Corporation. It tells the farmer that he is doing all right and can get his own money. It sounds good politically for the government to say it wants to help the guy who needs it the most.
Under the philosophy of the Farm Credit Corporation there is no use lending money to a farmer if he will not be able to pay back the loan and if he will not be able to increase his income. The philosophy of potential growth must be in there.
We heard the figures from the hon. member for Parry Sound-Muskoka (Mr. Darling) a moment ago. Even in a tough year like 1979-80, all the corporation had was a million dollars worth of losses on one year's lending in a large portfolio across the country. The point I am making is that this tips me off that if you have small losses for your lending on potential, it either means the country is growing so fast that you cannot make a mistake or that the government is changing its philosophy to one of not lending money unless it gets it back.
When I hear this talk about studies for farmers in severe economic circumstances, or dire straits as the phrase goes, I
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begin to suspect that we have gone right back to the old handout philosophy of the old farm loan board of 1934. In those days, when a farmer went to a farm loan board after his first few years of operation, he went there to get help because he was in trouble. He found it very difficult to receive help when he was in difficulty because the board reviewed his assets. It was concerned, as a Conservative should be, about his ability to pay it back. But the new Conservative government of 1959 changed that philosophy. Its philosophy was to look at a farmer's plans to make money and give him all he needed to increase his income. We did not intend to lose money, but were prepared to lose it if the plan did not work.
I say that the history of the growth rate of agriculture in Canada over the last 20 years demonstrates that the philosophy of 1959 did work with minimal losses. In fact, the Farm Credit Corporation showed a profit over the years.
I detect now that the Farm Credit Corporation is going back to that old civil service concept that all the federal government should do is to look after those people who cannot get money from other sources. The government has become a lender of last resort.
The philosophy that we put in the act, which I helped to draft in 1959, was that we did not care about being a lender of last resort. We wanted the Farm Credit Corporation to advertise across the country that we had money to lend for people with ideas to make more money. That was the philosophy of that day. As minister for three years in charge of that act, my concern was that with this past background of the civil service which would be administering this new act, it would revert back to the old farm loan mentality. I think that my suspicions were right.
For the First number of years its philosophy did change. However, I detected over this last ten or 13 years when I talked to people in my own constituency that the philosophy was changing. Now, budding young farmers and successful middle-aged farmers do not go to the Farm Credit Corporation any more. They know they will be turned down because they are successful. The FCC, under the act now, is not supposed to be a lender of last resort. The philosophy was to back up winners. There are all sorts of winners, poor and rich. I would go further to say that I think the greatest mistake I made as minister was not to have put in clear legislative form that if a man had potential, we did not care what his assets were. A young farmer, if he had a program that would make money, whether he wanted $100,000 or $200,000, could get it even without assets.
Today, however, when the government lends money under the Farm Credit Corporation, it tries to tie down all the borrower's relatives and neighbours. We have a situation today in which a man who tries to get a loan through the Farm Credit Corporation must be backed by his uncle on the next farm for a certain proportion. Now his uncle cannot retire until this young farmer has paid off the debt. All this land is tied up and all the prospects for these farmers to retire are tied up. This is cruel.
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Other governments have tried this. There was the young farmers loans legislation in Ontario from 1948 to 1959. Only a few thousand dollars was lost, and money was lent without regard to assets. All a farmer had to have was the approval of the local county board. If the board said he was a good, hardworking person, that was all that was required in assets.
Under the farm legislation of 1932 in the United States, any amount of money could be lent by a bank, guaranteed by the federal government, as long as ten people put down $100 to back up the loan, put their name and reputation on the line that this fellow would succeed. All we have to do is to look at the financial records of that American legislation. They were backing a man's potential, and that is the greatest asset in the world. You cannot imagine ten good farmers putting their names down with a $100 deposit to back a young farmer if they did not think he had potential. For many years, there was not a case of a young farmer going bankrupt because those other ten farmers would make sure he would not go broke. Those young farmers were able to pay back their debt and have money left in the bank.
My question to the House is simple. Having heard this debate and having heard the different views expressed by the minister and other hon. members that these housekeeping reforms are necessary, let hon. members ask themselves the question; in all honesty, has the philosophy changed in the Farm Credit Corporation? It does not matter to me whether there are five members on the board or 15. Has the philosophy stayed the same? 1 suspect that it has not.
I will use one major example. This is why I am glad the minister is here. He knows that many of us have been concerned about the Farm Credit Corporation. Personally, I have not been concerned about the supply of money as have many others. I am concerned about the philosophy. To make sure there was no question about the lack of money, several members in the Conservative Party got up last year and suggested that we use the principle of the Small Business Development Bond for the Farm Credit Corporation. It was suggested that the act be amended to allow this corporation to accept money from any person but, hopefully, from farmers in particular who would put their spare cash into the Farm Credit Corporation which would receive an interest rate at maybe 8 per cent, knowing that when they got that 8 per cent interest they would not be taxed on it. I alone am not responsible for this idea. I did make it too. But there was the hon. member for Medicine Hat, (Mr. Hargrave), the hon. member for Swift Current-Maple Creek (Mr. Hamilton), the hon. member for Red Deer (Mr. Towers), the hon. member for Fethbridge-Foothills (Mr. Thacker), the hon. member for Moose Jaw (Mr. Neil) and many others-if I missed them I am sorry-as well as members on the other side, and the minister himself, who gave their approval to this idea. I remember the minister giving approval to this idea on television and I was hopeful that if it could be used as a principle-as it was used in the Clark-Crosbie budget of 1979-and if it was being renewed again, this principle in Farm Credit with all its machinery here, with all
its capital allowance, then let it draw its capital from many sources as well as from the government.
The government has gone out and borrowed money at 19.5 per cent. It rightfully feels that it cannot just turn money over to any industry at much less than that. It is turning it over at a little bit less to the Farm Credit Corporation. But let the public come in, let anybody come in, and lend on a Small Business Development Bond, knowing it is not going to be taxable, and it is quite content to take 8 per cent on non-taxable lending. You can show no one is subsidizing anyone because the farmer who gets his money at half interest rates, such as 9Vi, loses his right for deductions when he pays that interest. So the government wins on that one. If the government loses, it is not collecting the tax on the 8 per cent of the lending, but looking at it fairly and objectively, no one is subsidizing anyone.
There will be academic arguments that there is a tax expenditure here, but no one but a nitwit would ever use that expression because the reality is that no one is subsidizing anyone. The government is not hurting its balance of ways and means because if the loan is not made, it will not get any money anyway.
The main thing here was that people from all parties were behind the minister on that proposal. I could say similar things to what I understood the Minister of Public Works (Mr. Cosgrove) to say, but a similar suggestion has been made for housing. I was dreadfully disappointed when I heard that budget on November 12. After approval was obtained and the minister stuck his neck out and supported the proposal, I was very disappointed that the Minister of Finance (Mr. Mac-Eachen) did not bring it forward in his budget.
I wonder what would happen if we in this House moved an amendment to this legislation proposing, in simple layman's form, that this should be done. We are not asking the government for any expenditure of money, so I think it would be acceptable under the rules. If we had the support of the Minister of Agriculture, the government would be very embarrassed if it did not accept the amendment. I would like to get a reaction to that proposal because we do not have much more time to wait. High interest rates are killing everybody, including the farmer, and no farmer in his right mind should ever borrow money, even at 16% per cent. Eight per cent or 9 per cent is cruel, but I think we could show how it could pay if we looked at hypothetical cash flow for the next ten or 15 years if the money were spent wisely.
I suggest to the House that this is good legislation. It has served this country well, and I am sure hon. members in all parties would be willing to support the minister if he could help us out, go to his law officers and draft us a resolution we could move. All parties could support it. It would put the government in a fantastic position. It would not dare say we are costing it any money. We would not have offended the rules of Parliament. We would be carrying out something the people need and want. At the same time we could show
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that the House of Commons does have a place in the whole administration of government in this country.


Mr. Louis R. Desmarais (Dollard):: Mr. Speaker, It is with great pleasure that I take part in this debate on farm loans. [English]
Not so many years ago credit and mortgages were not subjects easily discussed by farmers. Most of them felt it was a matter of pride to pay cash and not to borrow money. Of course, many of these people had witnessed the ravages of the depression, and they remembered a friend or neighbour who had lost his farm through foreclosure.
When we look back in history, and in particular the history of the Farm Credit Corporation, we find that its predecessor, the Canadian farm loan board, came into existence because farmers did not have access to an adequate source of credit. Agriculture has not changed all that much over the years. Farmers still have to contend with the vagaries of our climate. Even if we have developed better and hardier varieties, insects and weeds continue to be a problem. Adequate returns to ensure a profitable business operation continue to be one of the main concerns of most farmers.
The government is concerned about the difficulties farmers face because their fate is intimately linked to that of every Canadian citizen and many of our foreign buyers. Farmers provide the vital foodstuff to sustain life.
If agriculture has been as successful an industry as it has, it is because of the determination and ingenuity of Canadian farmers. The role government has played and must continue to play, in my opinion, is that of a supporter and facilitator. There are numerous examples of this, from the extensive research programs provided by Agriculture Canada to the stabilization programs and the inspection services offered.
I wish to concentrate my comments on what I consider to be one of the essential tools of today's farm business credit. Credit has been one of the true catalysts in the growth of Canadian agriculture. When the Minister of Agriculture (Mr. Whelan) speaks of the efficiency of the family farm and the Canadian farmer, he is simply reaffirming the facts which are there for all to see.
The credit tool government has created to help farmers is the Farm Credit Corporation. In its 22 years of existence it has assisted some 160,000 borrowers. The minister mentioned in his remarks that 74,000 of these borrowers still have loans outstanding with the FCC.
In terms of the economy it is difficult to measure what the FCC contributes to Canada by financing the development of viable farming operations. Although the nominal benefits to the economy are difficult to assess, some measurements are possible.
Facilitating the transfer from generation to generation of farms and providing capital investment in farming are considered essential to the long-term productivity and stability of the agricultural sector. These are necessary if the agri-food
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sector is to continue to provide Canadian consumers with an abundant supply of high quality food at a reasonable price, as well as provide for the export market which contributes so significantly to our balance of payments. The corporation strongly supports the family farm as the major means of food production. In 1979-80 and 1980-81, close to 98 per cent of all loans approved were to family farms.
In 1980-81, FCC borrowers increased their farm operating expenditures an estimated $100 million because of farm expansion, capital improvements and other agricultural investment projects. These increased annual expenditures, combined with credit extended by the FCC, contribute considerably to the economic health and growth of rural communities and agricultural service industries.
The success of FCC borrowers reflects their contribution to agricultural productivity levels and therefore to the Canadian economy. In recent years, the FCC has had to turn away a good number of applicants because of its shortage of capital. Data indicates that 65 per cent of those applicants who were declined loans because of their strong financial position had previously received FCC loans. Data on 2,622 borrowers whose loans in 1980-81 were assumed or retired indicates that over 91 per cent were considered successful. In addition, 93 per cent of all 72,663 accounts were in good standing as of March 31, 1981. This proves beyond doubt, in my mind, that farmers have more than lived up to the faith placed in them by the Canadian government.
An analysis of the effectiveness of the Farm Credit Corporation which was conducted last year indicates that the FCC is playing a significant role in facilitating the development of viable farm operations and thus contributing to the Canadian economy. Furthermore, the results of a special FCC survey of farmers which was completed in 1981 show that the corporation is currently lending to a much smaller scale of farm than the average. This substantiates our belief that the role of government in the financing of Canadian farmers is more important than ever, in spite of the greater share which private institutions have taken in the long-term agricultural lending market during the last five years.
The federal government's participation through the FCC has been reduced from over two thirds of this market to less than one quarter, primarily due to limited capital resources. During this period, the chartered banks and credit unions, as well as the provincial government in some provinces, particularly Alberta, Quebec and Nova Scotia, have lent substantial amounts in the long-term lending field. But in times of economic difficulties or when larger returns can be earned elsewhere, many of these institutions direct their funds elsewhere. The stability in supply of credit must be assured for all farmers who are efficient and productive.
The FCC's contribution has been essential to farm stability in many periods of difficulty because it provided mortgages with an attractive rate fixed for a period of up to 30 years,

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when private institutions could only offer long-term credit with variable interest rates.
Also, the corporation strives to provide loans to those applicants who have viable proposals but who do not meet or who would have difficulty in meeting the security or repayment criteria required by the private sector. The FCC will continue to provide credit for these higher risk borrowers, not for those who have access to commercial sources of financing.
Since FCC was given the authority to make loans up to 100 per cent of the value of the security in 1975, the trend has been to loans with less security. In many situations, additional security is not available, which is typical of young beginning farmers, and the corporation does not hesitate to take higher risks than other lending institutions would. I wish to repeat the percentage which has been quoted: in recent years some 70 per cent of FCC loans has been going to young borrowers under 35 years of age.
Furthermore, FCC authorizes some of its borrowers to defer their payments until other pressures on their cash flow subside, and this probably means survival for these farmers.
In spite of its restricted budget, the corporation has been able to keep in close contact with the Canadian farming community. Farmers, although they know FCC has less money to lend, continue to approach the FCC officers for advice and farm management counselling. This is the kind of strength which is essential to a wise use of credit. The FCC plays a major role in this educational process.
In the 1980-81 fiscal year, 204 credit advisers in 103 field offices gave more than 47,000 interviews in the selection of loan applicants or the administration of loan accounts. A total of 27,409 specific loan requests were received. After assessment of these requests, 4,686 loans for a total of $508.9 million were approved. Some 17 per cent of all loan requests were approved. Of the 23 per cent of the loans declined at the interview stage, 32 per cent were declined because of insufficient repayment potential, 30 per cent had the resources and repayment potential to get credit elsewhere, 16 per cent were not planning to become principally occupied in farming and 22 per cent were declined for other reasons.
Although five out of six loan requests were declined, only 121 of these decisions were appealed by farmers. In most cases, credit advisers were able to provide applicants with alternatives to further their farm development plans.
I could go on for some time expounding the positive role played by the FCC in its lending program, but I wish to conclude by giving credit where it is due, to the farmer. We must remember that the borrower repays the funds borrowed. Farm Credit is an investment for the Canadian government, not a gift or a handout.


Ian Gardiner Waddell: Are there farmers in your riding?


Louis R. Desmarais: Yes, we do have farmers in the riding. Farmers pay their own way. I trust we will continue to demonstrate our faith in their ability by providing our Canadian farmers with a good supply of the much needed tool that
credit is. These amendments provide a starting point for interesting new developments in this field.


Some hon. Members:: Hear, hear!


Mr. Peter Elzinga (Pembina):: Mr. Speaker, in considering Bill C-88, an act respecting loans to farmers which was introduced by the Minister of Agriculture (Mr. Whelan) and received first reading in the House on January 27, we see that its purpose is to allow the Farm Credit Corporation to borrow supplemental funding on the private marketplace; to enact the interest rate rebate provision of the budget; to increase the board of directors from five to seven members, to remove the 35-year-old age limitation on Section 33 loans; and to update some of the language of the Farm Credit Act.
For over a year the Minister of Agriculture has stated that such legislation would soon be introduced, so we are delighted to see it finally in front of us. He took his time, of course. We had legislation similar to this in the planning stages in the latter days of our government, some two years ago.
Farm groups have generally been supportive of this legislation, as long as it is supplemental funding and not a replacement of government funding. We basically support this legislation, provided that the government does not intend to cut back on its financial commitment to the Farm Credit Corporation.
For other than patronage reasons we question the need for the board to be expanded to seven members, as has been mentioned by many of my colleagues. We also believe that the Farm Credit Corporation should be provided with an additional $500 million. It is interesting to note that the Canadian Federation of Agriculture has called for an additional $1 billion. This legislation will not solve the short-term underfunding problem of the Farm Credit Corporation. This extra $50 million in the budget is not sufficient.
As members on this side of the House who spoke previously have indicated, we support the legislation. What we do not support is the inaction of the Liberal government opposite, especially as it relates to the agricultural sector in Canada. The food producing sector in Canada is not receiving the priority it merits. When we view some of the figures published by Statistics Canada, we find that bankruptcies increased close to 50 per cent this year compared to last. We also find in this disastrous budget which was introduced on November 12- which will have a disastrous effect on the farming population of Canada- that the provisions regarding the income-averaging annuity contracts as they pertain to the agricultural sector are disastrous. The capital gains provisions as announced and consequently amended will also be disastrous for the agricultural sector.
The part of all this that is most detrimental is the lack of any action relating to interest rates. The reduction in the capital cost allowance in the November 12 budget means that farmers buying equipment will now pay substantially more income tax in the first year. This is the view of the Manitoba agriculture farm management specialist, Irwin Wiebe.
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The Minister of Agriculture has made a mockery of his portfolio, Mr. Speaker. He has lost credibility throughout the land, and I will share the reason for that with you. On many occasions when he was speaking to farm groups, we have heard the minister indicate that he felt the banks were making far too much profit. He has indicated this repeatedly throughout Canada. He has blamed the banks for the high interest rate situation. Yet on two occasions in the chamber when he had an opportunity to do something about it, he voted against imposing an excess profits tax on the banking industry. On January 26, 1982, a motion proposing that we put an excess profits tax on the banking industry was voted against by the Minister of Agriculture. That action, as well as many of his other actions, shows that the minister is truly making a mockery of his responsibilities.
Because of a lack of action on the part of the national government, the provinces have been required to introduce programs on their own relating to the hog and beef industry. We require in Canada a comprehensive national program as it relates to both the beef and hog industry. Recently the province of Alberta introduced a cattle and sheep program because of the inaction of the minister opposite. Also, it is interesting to note that last year when the minister made his initial announcement pertaining to the hog industry, he was not going to make any payment to Alberta. After a great deal of lobbying by various farm groups, he changed his mind and introduced some fairness into the hog stabilization program.
1 travelled throughout my constituency during the Christmas recess, visiting such areas as Newbrook and Westlock. Residents of those areas indicated a deep concern about the survival of the Canadian agricultural sector and about the lack of action on the part of the present Liberal administration. When we were in government, we took specific steps to aid the Canadian agricultural sector. We were in the process of working with various provincial governments to establish national programs, so that each province would not have to initiate its own program to the detriment of all. We had hoped that the Small Business Development Bond would have been of more use to the farm sector in that farmers could use them at reduced interest rates for expansion purposes. We introduced specific capital gains relief for the farming sector to the tune of some $200,000. When one looks at the record of the hon. member for Vegreville (Mr. Manzankowski) when he was minister of transport, one sees that we shipped record amounts of grain as well.
There are few sectors of the economy which are as dependent upon borrowed money as in agriculture. Farmers require money to start their operations and to remain in business. Most of their costs are fixed, which reduces any flexibility in times of financial crisis. When farmers hurt, so does the rural community. Recent figures show that businesses throughout the rural community, business investment and business turnover in terms of cash flow, has dropped in the vicinity of some 50 per cent.
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The government should adopt a number of ideas to help Canadian farmers. 1 should like to share with the minister a number of points which should be adopted that would be of great help to the farming sector. We should introduce a moratorium on farm bankruptcies, foreclosures and forced sales to allow the government time to enact more meaningful assistance for farmers. We should have an infusion of some $500 million into the Farm Credit Corporation to subsidize interest rates and increase loan programs for farmers. We should create a committee, including farm representatives, to monitor the Small Business Development Bond program and to help save unincorporated farmers from bankruptcy. We should allow farmers to use the Small Business Development Bond to build and to expand their operations, rather than it being used by only those in dire straits. There should be the payment of a subsidy to farmers faced with interest rates of over 12 per cent on loans taken out for less than ten years. There should be enactment of the Liberal promise of the 1980 election campaign to change valuation day for capital gains tax on farmland from 1971 to 1974. The minister cannot even live up to that promise he made to the agricultural sector. It is my feeling that the capital gains tax provision should be abolished completely as it relates to the agricultural sector. There should also be a rebate on the price of fuel used in food production. There should be a national price stabilization plan for beef and for hogs, which is a meaningful plan, rather than the ad hoc plan that leaves far too much discretion in the minister's hands.


Eugene Whelan: We offered that in 1977.


Peter Elzinga: 1 hope the minister will take the opportunity to respond to a number of concerns we have raised.


Eugene Whelan: Given the opportunity, I will.


Peter Elzinga: We will give the minister the opportunity as long as he promises to be more credible in his answers than he was when he indicated that the banks should do away with their excess profits. Agriculture could be radically changed in the next three to five years if no action is taken. This is extremely bad news for all Canada, especially Canadian farmers, consumers, businessmen, and labour groups.
Bill C-88 should be an important and worth-while measure in the long-range funding of the Farm Credit Corporation. As I indicated earlier, we will support this legislation, provided the government gives a firm commitment that its direct funding to the FCC will not be cut back. I ask the minister to respond by giving us a commitment that the federal government will not cut back on its funding. Also, we hope that the government will guarantee the bonds floated by the Farm Credit Corporation so that they could be sold more quickly. We all look forward to a more detailed study of this legislation when it is referred to committee.
In closing I should like to put another question to the minister. Are there any plans in regard to the PFRA? There have been a number of suggestions by hon. members on this side of the House that it should be redirected and put under

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Agriculture Canada rather than under the Department of Regional Economic Expansion. I hope the minister will give this matter serious consideration, as we did when we examined the possibility when the responsibility fell under the hon. member for Central Nova (Mr. MacKay). Also I suggest that this plan should be expanded upon so as to become a national program rather than a regional one.


Some hon. Members:: Hear, hear!


Mr. Murray Cardiff (Huron-Bruce):: Mr. Speaker, it is a well known fact that the production of food requires proper and modern tools, if we are to maintain the high quality and standards that have been achieved over a number of years in the production of excellent food, not only for Canadians but for consumers all over the world. Also it is a well-known fact that one of those proper tools is proper financing. The fact that the Farm Credit Corporation bill is being debated in the House and will be referred to committee later is very welcome.
1 feel somewhat sorry for some of the field workers of the Farm Credit Corporation who, for the last year or 18 months, have had inadequate funds to meet the needs of the areas they represent. Many times loan applications have been refused. Even the refusal to take applications from applicants makes it very difficult for individuals in those offices; they see a need but, because of a lack of financing, loans are not possible at the time, or at any time for that matter.
In July, August or September of last year it appeared that there were no funds left to lend out at a somewhat lesser rate than that of today, that is, in the area of 14 per cent. This was mainly because representatives of the FCC indicated that all funds were being held until the new rate was set. Subsequently, a new rate was established at 16.75 per cent, and since budget time some loans were approved. The budget included a provision wherein there would be a reduction of 5 per cent on farm credit loans to 11.75 per cent. At the present time, some young farmers are starting out, saddled with the 16.75 per cent interest rate tied to the mortgages on their land for the next 29 or 30 years. Suddenly, the next few years are very important for those young people who find it difficult to make a living in agriculture, with the structure of their land base and getting established. It would only be proper if some subsidization were given them, especially those young people who were "fortunate" enough to obtain mortgages even at 16.75 per cent.
In Poland today meat prices have risen some 300 per cent. Pork chops rose from 60 cents a pound to $3 per pound. If we are not careful and do not maintain a good strong agricultural base here in Canada, it is possible that we could be facing the same situation. Consumers will have to pay extremely high prices for food if we do not provide the proper tools to agriculture now. It might be too late now. We know that we will lose many of our small farmers, those young farmers who started farming within the last six or seven years. Many of them started out with very little money. I am a farmer. I started with all borrowed money. I borrowed from my father
to make my start. If it had not been for my father, I would not have been able to farm, even though it was very difficult for him to assist me at that time.
The bill we have here today is actually two pieces of legislation, and one wonders why the government has scheduled so much legislation for transmittal to the Standing Committee on Agriculture all at the same time. Certainly this committee has been fumbling around doing almost nothing for most of the past two years, and now suddenly we have debated three measures in a week for reference to it.
I am tempted to ask whether the government is scheduling its agriculture legislation in this way in order to push Cana-grex through without much scrutiny, or whether it is shoving farm credit legislation through right behind the Canagrex bill in order to deflect attention away from the severe problems farmers have been facing while waiting and waiting for an improvement to farm credit Financing.
There are some measures in the present legislation that will be welcome to our food producers that we on this side of the House will certainly want to support. For example, an increase in the capital of the Farm Credit Corporation is very much needed and will do a great deal to stabilize the financing of land in the Canadian agricultural industry. That is, it will do so once the problems raised by this bill are worked out.
Farm credit has been underfunded for years now, and as the Minister of Agriculture (Mr. Whelan) indicated the other day, he has been relying on the private banks to pick up the slack since 1975. We have all seen in the past two years how poorly they did the job of managing farm financing. In some cases, the banks employed personnel who knew far too little about agriculture to be in the business of agricultural lending. In other cases, the banks used poor judgment in matching the type of loan they were offering to the kind of asset or operation being financed. Much of this sloppiness on the part of the banks might have gone unnoticed if it were not for the monstrous fluctuations in interest rates which have been brought on by this government's policy of high interest rates. The Minister of Agriculture may want to blame the banks for writing lending contracts that allowed them to convert what should have been mortgages into demand loans, but the truth is that the policies of this government are too erratic and arbitrary for the banks to use a straight mortgage instrument to handle all kinds of farm financing.
It is the policy of the government to which the minister belongs that has caused much of the present problem. I hope the minister has now learned a lesson that he can teach to his cabinet colleagues, namely, to allow the Farm Credit Corporation to do what it was set up to do, that is, to finance the long-term assets of land and buildings which make possible family farming in Canada. In particular, I hope the minister is now committed to the idea that the Farm Credit Corporation is the proper vehicle for helping new farmers establish themselves in business.
That, Mr. Speaker, is what this legislation should be all about. I believe legislation to increase the Farm Credit Corporation's capital has been ready for two years. Better late than
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never, perhaps, but let us note that too late means never, and for many hundreds of Canadians who were and who wanted to be farmers, this legislation has come too late. It is important now that the assistance contained in this legislation be provided as soon as possible. But clearly, the difficulties surrounding this piece of legislation have not yet been worked out. For that reason, the sooner the bill gets to committee and the committee gets down to serious examination of it, the better. I, for one, hope that the Standing Committee on Agriculture has the opportunity to give immediate attention to this bill, and is not delayed and obstructed in its job by red herrings such as a supposed need to get Canagrex operating by the middle of next week.
Let us note how helpful this present bill could be in theory. One of its principal effects would be to raise the capital of the Farm Credit Corporation by $75 million, thereby raising the amount the Farm Credit Corporation could borrow and lend out again by $1,875 billion. This is a very significant amount.
Another principal effect is to allow the Farm Credit Corporation to borrow from private sources some of the money it borrows on the basis of its authorized capital.
The minister the other day, in introducing this legislation, mentioned pension funds as one possible source of such borrowed funds, and then raised the possibility of allowing retiring farmers to provide another source through some plan equivalent to the small business bond plan by which banks can lend money at little more than half the prevailing interest rate. If the Minister of Finance (Mr. MacEachen) had a grasp of what fiscal management means, he might see his way clear to bringing in this kind of measure so it becomes more than a possibility.
At the moment, the Minister of Finance seems to regard money as being of two types. One, the type he has lound is a way to take by way of taxes. Second, a type he is still trying to get hold of. If he could grasp that there are ways to put money to work so that both he as the tax grabber and other Canadians as producers could have more to play with, he would have advanced a long way toward helping the economy achieve its potential.
One idea he might well consider is the one his colleague, the Minister of Agriculture, has now seen the wisdom of, namely, allowing retiring farmers to invest funds with the Farm Credit Corporation as a way to reduce their tax burden. But this matter is one not for debate at the present time. It deserves full examination, and perhaps now that we on this side of the House have recruited the Minister of Agriculture to adopt it, we can encourage the Minister of Finance to see that it serves his interests too.
At present, the Farm Credit Corporation can borrow up to 25 times its capital out of the Consolidated Revenue Fund to lend out. The new bill would authorize the Farm Credit Corporation to borrow 25 times its increased capital, but it would no longer be required to borrow only from the Consolidated Revenue Fund. It would now also be able to raise money on the private markets. In theory, the addition of $75
Adjournment Dehate
million to the authorized capital of the Farm Credit Corporation should allow the corporation to raise an additional $1,875 billion in private borrowing. Certainly, an additional amount like this of almost $2 billion would be more than enough to meet the present needs of Canadian agriculture. Of course, in practice, things do not work this way. Each year, the Farm Credit Corporation receives a certain portion of its capital from the government and then proceeds to borrow up to 25 times that amount from the Consolidated Revenue Fund.
May I call it ten o'clock, Mr. Speaker?


Some hon. Members:: Question.


The Acting Speaker (Mr. Blaker):: The hon. member has suggested calling it ten o'clock. I can put the question, but my understanding is that the hon. member seeks to continue the debate tomorrow.


Murray Cardiff: That is correct, Mr. Speaker.



PROCEEDINGS ON ADJOURNMENT MOTION

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

A. Daniel McKenzie: Mr. Speaker,
I directed a question to the Acting Minister of Veterans Affairs this afternoon. I pointed out that close to 4,000 veterans receiving less than 5 per cent disability pensions have never been informed that they are eligible for a yearly consumer price index increase on a little known final payment allotment. I understand that some of these veterans are on the computer system and receive this entitlement but we do not know how many have been left off that system. Entitlement of final payment exists for veterans who have been given a disability pension of from 1 per cent to 4 per cent. Four thousand veterans are eligible for yearly consumer price increases on an original payment of $100. The problem is that they must apply for these or they will not receive them. In some cases they may have over $1,000 in back pay coming to them. Why is payment not automatically made? Will all veterans in this category be informed of this and paid retroactively, and what about future payments? To date there appears to be utter confusion in this category.
In addition, veterans will be penalized further under the Liberal budget. Resolution 53 of the budget will cost them thousands of dollars a year. The Acting Minister of Veterans Affairs today in question period misled the House when he

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stated there are no provisions in the budget which would affect veterans. The budget will make veterans' pensions calculable income, something which has never been done in the past.
A veteran's working spouse may claim a veteran as a dependant only if he makes less than $3,660 in any year. This will most certainly eliminate tens of thousands of currently eligible veterans, thus cancelling the spouse's deduction. It will have the effect of drastically reducing a veteran family's net income, putting them on the tax man's firing line.
We are still having problems with widows' pension applications. Administration is slow. The process was supposed to take place immediately on passage of Bill C-82, but there are still widows who have been waiting for many months. As an example, a constituent of mine, whose husband died December 13, 1980, applied for a widow's pension in January, 1981. The application was never acknowledged by the department. In August, 1981, seven months later, she received a letter telling her to apply if she had not already done so. My office was informed early in January, 1982, that the pension had been granted, and contacted her with the news. She also received a letter from the pension commission dated January 6, 1982, saying that she would be receiving a proportionate pension. The total time from the original application was one year. The total time from the letter asking for the application was five months. So you see the problem we still have there, Mr. Speaker.
Now, there are many problems facing veterans which have been made perfectly clear by the Public Accounts Committee in its tenth report; the Senate committee report "They Served, We Care;" Legion submissions; the Auditor General's report; the Hong Kong Veterans Association; National Indian Veterans Association; and repeated representations from the Conservative Party. The problems are never ending.
We also have the prisoner of war benefit discrepancies which have not been settled, with no statement from the minister. The amount of interest income which can be exempted from federal taxes is now a mere $100 and should be raised to $1,000, but we hear nothing from the department.
There is next to no value in the aging veterans' programs. For example, only 92 vetrans are currently eligible for the home support program across Canada. It is far too restrictive. There are inequities which divorced spouses must face when they receive no entitlement under the pension act and the War Veterans Allowance Act. There are also the inequities in the way veterans are compensated for time spent as prisoners of war. We have these persistent unremedied time delays which were condemned by the Public Accounts Committee when it said they should be replaced by a time limit of 180 days for the entire process. Now we have this cruel budget provision which will in effect tax veterans' families when they cannot even survive on their current levels of income. The question is, Mr. Speaker, when will the minister resolve these mounting problems?


Hon. W. Bennett Campbell (Minister of Veterans Affairs):: Mr. Speaker, my hon. colleague on the other side of the House raised about 12 different issues. I realize that I have only about three minutes in which to respond, so perhaps I could address only two of those issues. Specifically, I would like to address his question with respect to the final payment types of pensions. Perhaps "final payment" is not the proper description. These are annual payments which are made to veterans who have been awarded assessments of 5 per cent or less.
In 1921, when the legislation was introduced, there was provision that anyone receiving a pension under 5 per cent would receive a single payment versus a monthly payment. Between 1921 and 1971 eight adjustments were made to those single payment pensions. In 1972, the CPI was introduced, and the same thing has applied to pensions of this type as pensions on a monthly basis. The CPI has automatically been applied and has been applied all the way through.
For example, in 1973, there was a 24 per cent increase in the base rate for these types of pensions. The CPI has been applied all the way through. Just to give a classic example, since January 1, 1982, when the 12.3 per cent was announced, there has been an adjustment in the single payment, or "final payment" as it is known, of 1,246 pensions. A further 2,654 will be processed just as quickly as possible. We hope that by the end of February all the single payment pensioners will be receiving the adjustment. They have received this treatment all the way through, and they will continue to do so.
The hon. member is quite correct. Approximately 4,000 have been receiving their cost of living adjustment, as has been the case for the duration of their pensions. However, before I wind up, I want to address a question which I thought the Minister of Finance (Mr. MacEachen) resolved the other day with respect to the application of the budget to veterans.
Under resolution 53, there is a provision for prescribed programs. I want to say to the House and to the veterans of Canada that the programs under Veterans Affairs, the disability pensions and the War Veterans Allowance, will continue to be exempted from the application of the budget and, specifically, from the requirement to take these provisions into income in tax calculations. That was made clear the other day, and I want to reinforce that fact. Under resolution 53, which was cited by the hon. member, "prescribed" and "exempted" programs under veterans affairs will continue to enjoy the same decision with respect to the programs of the Government of Canada they have enjoyed in the past.
EXTERNAL AFFAIRS-(A) EL SALVADOR-HOLDING OF DEMOCRATIC ELECTIONS; (B) RECOGNITION OF POLITICAL MOVEMENT


Mr. Bob Ogle (Saskatoon East):: Mr. Speaker, my question tonight asks for further illumination on a question I directed in the House to the hon. Secretary of State for External Affairs (Mr. MacGuigan) on November 9, 1981. At that time, I
February 1, 1982

indicated to the minister that I had in my hand a letter the minister had received from the Canadian Council of Churches, requesting a policy change in Canada's relations with El Salvador and Canada's view of El Salvador. At that time, I also had a letter from the Canadian Catholic Bishops which stated that the military and Christian Democratic ruling junta in El Salvador is responsible, before its own nation and before the international community, for extremely grave crimes.
At the same time, 1 asked a supplementary question of the hon. minister, regarding the UPI meetings in Havana which had proceeded during that summer. The Chairman of the Standing Committee on External Affairs and National Defence, along with a group of parliamentarians from Canada, had voted at those meetings to support the French-Mexican position. At that time, the minister told me that the initiative was largely discredited and that Canada would not change its position regarding elections to be held in El Salvador. These elections have been called, as everyone knows. In light of that fact, I continue my question with this new information.
On December 8 the subcommittee on External Affairs dealing with relations between Canada, Latin America and the Caribbean, of which I am a member, brought its report to this House. In it we indicated that the situation in El Salvador demands a pre-electoral period of political negotiation and stability. I quote:
While the subcommittee has no illusions about the ease of achieving these conditions, we think they consist of three essential elements: first, serious negotiations between all parties to the conflict; second, an internationally supervised cease-fire; third, and only after the achievement of these conditions an internationally supervised electoral process in El Salvador.
That report of the subcommittee was unanimously voted on by members of all three parties in this House.
During the Christmas recess there were several delegations which went to the area of El Salvador. One delegation, under the auspices of Oxfam Canada, made up of the hon. member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand), the hon. member for Spadina (Mr. Heap) and the hon. member for St. Catharines (Mr. Reid) visited refugees from El Salvador in refugee camps in the Honduras.
On their return, they said quite emphatically that the possibility of elections in El Salvador is a myth. They cannot take place. There cannot be a truly democratic election at this time.
This past week I and several members of the subcommittee on Latin American and Caribbean relations were in the Central American area. In company with the hon. member for Kingston and the Islands (Miss MacDonald) and the hon. member for Hamilton West (Mr. Hudecki), I visited a refugee camp of El Salvadoran refugees in Costa Rica near the Honduran border. From that information, and from information received from literally all other sources, during our visit, it appears to us that the report we handed down in December is accurate and that at this time the elections that are called to take place in El Salvador are an impossibility. There are over
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600,000	refugees inside and outside the country, most of them naturally being in the opposition.
In the Catholic Register of January 30, there is a story from San Salvador which speaks of the recent position of Bishop Arturo Rivera Damas, the acting apostolic administrator of the diocese of San Salvador. In this article in which he asks the people of El Salvador to reflect on his belief, he states:
the conflict of El Salvador is at the heart of the east-west conflict and runs the risk of becoming truly international with no end in sight
We address the guerrilla fighters themselves to ponder their actions in light of a national, patriotic outlook and not under alien influence,... We ask all political parties, all those responsible for the public administration to look at our situation with a realistic approach, devoid of ideological passions, and find political solutions that can lead to peace.
I do not want to set up a conflict with the government or the Secretary of State for External Affairs, but in light of this information 1 have given tonight, in addition to my previous question, 1 plead that the government take a new and serious look at the situation.
In the trip which the committee completed yesterday to the Caribbean and Central America, we found, and I can state this emphatically, that Canada has a very high and good profile in that whole area. I suggest that profile is far out of proportion to what we have done in that area. Canada does not have an imperialistic past there. People look to us as being just, and of those who will help.
During our trip inside El Salvador, in the past few weeks, we met journalists, including journalists from the Miami Herald, who indicated from their observations that, having talked with the guerrillas and as a result of the escalation of the war which took place last week when military aircraft were destroyed, and also from talking to the government people, much to my surprise they believe the Duarte government will actually lose the election. They will lose the election to extreme forces to the right because anybody who represents the middle, which is practically non-existent, or leftist forces, will not be there to vote.
In the light of this new information, and in the light of what I hope is the true, sincere and just feelings of our government, I would like to further my question by asking if the government is ready to re-evaluate its position on the question of El Salvador; to take positive steps, some of which were suggested in my question of November 9, in opening up our embassy and calling together the forces of various disputing parties; of going out of our way and taking the extra step of using our good profile, that good feeling we have in that part of the world, to call upon those forces to come together in negotiation and not to set up an election which can only lead to more disruptive situations in that very volatile part of the world.
Thank you, Mr. Speaker.


John Leslie Evans: Thank you, Mr. Speaker. Canada's position on El Salvador has been expressed many times, notably in statements in the House of Commons by the Secretary of State for

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External Affairs (Mr. MacGuigan). Canada is opposed to foreign intervention in the domestic affairs of El Salvador and believes that the problem of El Salvador must be resolved by El Salvadorans without foreign interference. Canada has a long-standing policy of not providing arms to areas of tension and deplores the fact that competing forces in El Salvador are receiving supplies from outside sources.
Canada hopes the dialogue on a political solution in El Salvador would encompass all political parties and welcomes the expressed willingness of the government of El Salvador to enter into dialogue on the electoral process with opposition groups willing to lay down their arms.
The Canadian government is not at this time prepared to associate itself with the declaration made on August 28, 1981, by the governments of France and Mexico because it believes that the appropriate political solution is through the electoral process rather than through negotiations. Canada would also be willing to provide technical assistance for the electoral process and to consider participation in international observation of the elections.
We are now discussing with the El Salvador authorities various aspects of the proposed election and observation process so as to determine the nature of the Canadian response. It is not for Canada or Canadians to support or oppose El Salvador's decision to have elections though persons and governments are entitled to their individual views.
It is the government's view that President Duarte should be commended for his efforts to hold democratic elections in very difficult circumstances and we hope that all political parties in that country will respond to his government's invitation to participate.
With regard to the question of human rights in El Salvador, the Secretary of State for External Affairs clearly indicated in his statement in the House on June 16 that the government is very sensitive to and concerned about the human rights situation in El Salvador. Those concerns have been expressed to the government of El Salvador and to representatives of the FLMN/FDR. Like all Canadians, the government deplores the senseless killing which has occurred in El Salvador these past many months, killing which has been perpetrated by both sides in that tragic conflict.
We are particularly disturbed by news reports today of a tragic shooting incident in San Salvador. We immediately called in the Charge d'Affaires of the Embassy of El Salvador to express our concern and to request him to obtain from his government a clarification as to the exact circumstances of the incident. We also instructed our ambassador to El Salvador, resident in Costa Rica, to obtain similar clarification.
It has been reported that the United States is considering the supply of new helicopters to replace those recently destroyed by insurgent forces in El Salvador. Our position on the supply of arms to various forces in El Salvador by any country has already been stated. We oppose it and we hope
that the problems of El Salvador can be solved peacefully by the people of El Salvador without outside interference.
Thank you, Mr. Speaker.


FINANCE-EFFECT OF BUDGET ON EMPLOYEES MEETING INCREASED ACCOMMODATION COSTS FOLLOWING TRANSFERS. (B) REQUEST THAT PROVISION AFFECTING MORTGAGES BE POSTPONED
Mr. John Gamble (York North):: Thank you, Mr. Speaker. 1 welcome this opportunity to deal at some greater length with questions which I raised in the House on January 29 and the replies that I received thereto. Those questions dealt with the intended amendments to section 80.4(1) of the Income Tax Act, referable to-as they now provide-the exemption from the inclusion in income of the alleged benefits to employees of employer-provided mortgages at either no interest or at interest rates which are less than the going rate. I raise these issues because of responses provided to me by the minister. At page 14462 and 14463 of Hansard the minister's responses are to the effect that he takes my questions as representations and notes that they will be considered in due course. That answer underlines, regrettably, the way in which the entire budget was prepared. It was prepared as though a white paper on major tax reform had preceded it, without regard to the fact that there are elements in society very substantially affected by the intended budget proposals. One of those provisions is the one to which 1 made reference, and if I could just read some of the communications I have received from my constituents with respect to this matter hon. members would get a better grasp of the consequences of the intended amendment to that section of the Income Tax Act. I do not propose to refer to the names of the people who have actually corresponded with me because some of the letters have been marked "personal and confidential", and some of them have disclosed personal financial information which the writers might prefer I not read into the record because that would identify them as the people who have this particular problem. However, one letter dated December 8, 1981 contains the following comment:
As a direct result of the new provisions in the November 12th, 1981 budget, the tax payable on my interest-free loan will add $320 to my monthly payments. This increase would leave me no alternative but to sell my house, at a direct cost to myself of the 6 per cent sales commission, and moving expenses.
This is just one of the cases, but, as a matter of fact, all the cases to which I refer are cases in which individual taxpayers have been transferred by their employers to new locations under circumstances wherein the cost of acquiring new residences exceeded the cost at former locations.
The gentleman went on to say:
At the time of my transfer, my decision to relocate was based on the provisions of The Income Tax Act in effect at that time.
1 believe that in the interests of fairness it would be only just and reasonable to withdraw the imposition of this tax on loans already in place at the time of the budget, allowing the new measure to affect only those loans negotiated after that date.
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Another gentleman stated in a letter also dated December 8, 1981:
The most disturbing factor is the retroactivity of this legislation which disturbs the agreement reached with my employer at the time of my transfer.
This gentleman also stated:
One of the conditions set by the Foreign Investment Review Agency-
This was at the time his employer acquired the stock of another corporation of which this gentleman is a former employee.
-required the company to ensure that no employees were to be dismissed as a result of the acquisition and in order to comply with this condition it was necessary to move a number of individuals into various locations in Canada. In most cases the transfers were to areas where substantial differentials existed on housing costs.
He gave the example of Montreal as against Toronto.
One of the principal themes of the federal budget introduced on November 12, 1981, was the question of equity and the need to maintain a fundamental sense of fairness in our country. I believe that in the interests of fairness it would be only just and reasonable to withdraw the imposition of this tax on loans already in place-
It is interesting that one of my constituents gave the specific example of having moved from the city of Beaconsfield, Quebec where his monthly payment on his residence at that time totalled $ 166 per month. He moved to a home of comparable value in terms of what it would provide him compared with what he was provided in Beaconsfield and found that his total costs, even with his interest-free and interest-reduced loans, amounted to $1,199 per month. In the event that these proposals of the budget are to be implemented he will be confronted with an additional cost because the total amount of his loans is now $78,000, and he must pay tax on $10,729 of that. He has not given me his tax rate, but assuming it is 30 per cent, that will total $3,000 more he will have to pay, in addition to his current monthly payment.
All of these moves have been undertaken as a consequence of the requirement of the employer and not the employee, Mr. Speaker. Whatever benefit accrues, will accrue to the employer who now has an employee who has moved to a new location, a move sought by the employer and not the employee.
One of the letters that 1 received made reference to a specific paragraph on page 21 of the budget papers which reads as follows:
Housing loans mainly provide benefits to mobile, high-income employees and officers of corporations and amount to an indirect subsidy for industries who regularly relocate their employees.
This gentleman is an employee of a firm that has only changed its location once. He has never changed his location and has always been an employee of that same corporation. He denies that he is at an upper income level.
Some time ago this House passed a resolution dealing with the Constitution and under Paragraph 6.(2) granted to every Canadian the right to move to and take up residence in any province in pursuit of a livelihood in any province. That right becomes very shallow when the financial obligation imposed upon these people when they move under the provision of the budget will specifically preclude them from undertaking the steps allegedly granted under this resolution which will become part of the Constitution of Canada.
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I submit that in the event that equity and fairness is to prevail, arrangements arrived at between employees and employers with respect to this issue be left until they run their due course. In that way the people of Canada will enjoy fairness and equity.
Mir. John Evans (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance): Mr. Speaker, this motion concerns budget changes to the provision which permitted employers to provide up to $50,000 of interest-free loans to employees who relocated without the resulting benefit being subject to income tax. The budget proposes to eliminate this measure effective for the 1982 taxation year. A transition rule will allow benefits on up to $40,000 of existing loans to be exempt in 1982, and this limit is reduced to $20,000 for 1983. Certainly relocation and labour mobility are desirable. However, this measure was not a particularly effective or fair one. There are a number of reasons why it was terminated.
Housing loans are but one method of remunerating employees for differences in costs of living resulting from a relocation. Others include promotions or increased pay, which generally occur on relocation, cash payments to offset differences in the mortgage interest rate on the new versus the old home, rental cost subsidies and general cost of living wage differences between regions.
Conference board data show that over half of firms do not offer tax subsidized housing loans. Most that do, do not make them available to all employees. Moreover, a significant number of firms offer other types of remuneration for relocation that have always been taxable. These facts raise serious questions of equity in existing housing loans.
As well, housing loans did not assist persons already living in a region with their higher living costs. They had to meet these costs out of taxable wages and salaries. Housing loans could actually reduce labour market mobility as they intended to lock employees into a job with the firm that provided them the loan. Higher income employees were more likely to get a loan, were more likely to get a loan for a higher amount, and derived more tax savings per dollar of loan than did a taxpayer in a lower tax bracket. Lastly, in some regions the measure may have added significantly to upward pressure on home prices. I do not believe that a measure with these sorts of defects can be justified.
The budget does not prohibit the use of housing loans for this purpose and I expect the past practice to continue. Interest-free housing loans continue to be attractive. Employees will not have to pay interest but only tax on the benefit-on the interest-free amount. What ordinary Canadian in a 30 per cent tax bracket can obtain a $50,000 mortgage loan at an annual cost of $2,400, compared to the current market cost of roughly $8,500 to any other Canadian?


The Acting Speaker (Mr. Blaker):: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until two o'clock tomorrow afternoon.
At 10.30 p.m. the House adjourned, without question put, pursuant to Standing Order.

Tuesday, February 2, 1982