1982-01-28

ROUTINE PROCEEDINGS


Mr. David Kilgour (Edmonton-Strathcona):: Madam Speaker, I rise on a matter of urgent and pressing necessity, under the provisions of Standing Order 43.
In Poland, suppression of human rights, including the imprisonment of some 50,000 members of Solidarity, seems to be intensifying, and last Sunday, Archbishop Jozel Glemp, leader of the Catholic Church in Poland, said that continued martial law might lead to a "revolt and perhaps even civil war". I therefore move, seconded by the hon. member for Joliette (Mr. La Salle):
That, in recognition of the fact that nations of the free world should present a united front in opposing martial law in Poland, this House express its disagreement with the ambivalent attitude to the Polish crisis taken by the Prime Minister, an attitude that is encouraging General Jaruzelski and the Soviets to continue their repressive action and is discouraging to the Polish people, since the Prime Minister justified the oppression of ten million Polish members of Solidarity in comparing the situation with his own use of the War Measures Act in 1970; that this House declare the words of the Prime Minister of Canada to be odious and insensitive, and that this House invite the Prime Minister to support his Secretary of State for External Affairs on this matter and that it urge him to seriously consider the evidence obtained by his minister of Soviet involvement in the imposition of martial law in Poland.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ROYAL CANADIAN MINT
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, whereas the Royal Canadian Mint has refused to strike a commemorative coin to honour Saskatoon's centennial year because it states that it has a policy of only honouring capital cities, and whereas in 1975 the city of Calgary was honoured on the occasion of its centenary by the issuance of a silver dollar-and that city, as far as I know, is not a capital-I move, seconded by the hon. member for Portage-Marquette (Mr. Mayer), who hails from Saskatoon:
That this House direct the Royal Canadian Mint to strike in 1982 a commemorative coin to recognize the centenary of this penultimate, progressive, pleasant, pretty and productive city of Canada positioned where parkland meets prairie and which, incidentally, is my home town of Saskatoon, Saskatchewan.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FITNESS AND AMATEUR SPORT
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, whereas the Department of Indian Affairs and Northern Development and the Canada Council have sponsored a film of the Northern Games presently being shown at the Museum of Man in Ottawa, but the minister responsible for fitness and amateur sport refuses to put any money into this unique Canadian sporting event, I move, seconded by the hon. member for Bow River (Mr. Taylor):
That the Government of Canada financially support the Northern Games as an international sports meeting of circumpolar nations.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

January 28, 1982
5.0.	43


EXTERNAL AFFAIRS
Mr. Edward Broadbent (Oshawa):: Madam Speaker, 1 rise to move a motion under the provisions of Standing Order 43 concerning the forthcoming scheduled elections in El Salvador. In accordance with the resolutions adopted at the Inter-Parliamentary Conference last September, supported by the Canadian delegation, and the recommendations of the Parliamentary Sub-Committee on Latin America and the Caribbean adopted unanimously in December, and in view of the conclusions of the all-party delegation which returned this week from Central America, I move, seconded by the hon. member for Winnipeg-Birds Hill (Mr. Blaikie):
That this House strongly urges the Canadian government to withdraw its support for holding elections in the climate of terror and violence which now exists in El Salvador and instead calls for immediate political negotiations to resolve the violence as an essential precondition for elections.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SOLIDARITY FOR SOLIDARNOSC DAY
[Stage Direction]
5.0.	43
Mr. Jesse P. Flis (Parkdale-High Park):: Madam Speaker, I rise seeking the attention of all hon. members of the House on a matter of urgent and pressing necessity. I want to emphasize that my motion has been drafted by representatives of all three parties in the House. In view of the fact that January 30, 1982, has been declared "Solidarity Day" in the United States, and in view of the fact that on Saturday there will be mass demonstrations, coast to coast, by Canadians showing their moral support for people's freedom in Poland, I move, seconded by the hon. member for Edmonton North (Mr. Paproski) and the hon. member for Hamilton Mountain (Mr. Deans):
That this House declare Saturday, January 30, 1982, "Solidarity For Solidarnosc Day".


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


Some hon. Members:: Hear, hear!


Madam Speaker:: There is unanimous consent for this motion?


Some hon. Members:: Agreed.


Madam Speaker:: It is moved by the hon. member for Parkdale-High Park (Mr. Flis), seconded by the hon. member
for Yukon (Mr. Nielsen) and the hon. member for Hamilton Mountain (Mr. Deans):
That this House declare Saturday, January 30, 1982, "Solidarity For Solidarnosc Day".
Does the House agree to the said motion? Agreed? Carried.


Mr. Nielsen:: Madam Speaker, I believe the seconder of the motion was the hon. member for Edmonton North (Mr. Paproski).


Madam Speaker:: But the hon. member for Edmonton North is not in the House.


Erik Nielsen: Very well, Madam Speaker.


Mr. Crosbie:: Madam Speaker, I would like to speak in support of this motion.


Madam Speaker:: I am sorry, but the motion has already been carried.


John Carnell Crosbie: But I was on my feet, Madam Speaker.


Mr. Andre:: He was on his feet, Madam Speaker.


John Carnell Crosbie: Madam Speaker, I notice that the Prime Minister (Mr. Trudeau) is not here to veto that motion. I was on my feet, Madam Speaker.


Some hon. Members:: Sit down.


Harvie Andre: He was on his feet.


Madam Speaker:: Order, please. Nothing would please me more than to allow the hon. member to speak on the motion, but he was not on his feet fast enough. The only hon. member who was on his feet was the hon. member for Yukon (Mr. Nielsen) and I recognized him on his point of order. I am sorry, but the motion has been carried. Therefore, I cannot allow any more speakers.


[Stage Direction]
Motion agreed to.

Mr. Doug Neil (Moose Jaw):: Madam Speaker, 1 rise to move a motion under the provisions of Standing Order 43. In view of the fact that the Canadian Wheat Board asking price for Durum wheat during the 1980-1981 crop year was approximately $2 per bushel higher than the asking price for Canadian red spring wheat, with the exception of a period of about two weeks, and in view of the fact that the final realized price per bushel for Durum wheat was only 47 cents per bushel higher than for Canadian red spring wheat, I move, seconded by the hon. member for Assiniboia (Mr. McKenzie):
January 28, 1982

That the minister in charge of the Canadian Wheat Board, through his spokesman the Minister of Transport, table in this House the reasons that the final payment for Durum wheat was only 1.6 cents per bushel rather than in the SI range.
Mladam Speaker: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


TERRORISM
Hon. Allan B. McKinnon (Victoria):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter which I feel will receive the support of all members of this House.
This morning word has been received that the Italian security forces have found and released unharmed, Brigadier General James Dozier of the United States Army, who had been kidnapped and held by terrorists, the most cowardly group of all political interventionists. Therefore I move, seconded by the hon. member for Esquimalt-Saanich (Mr. Munro):
That this House expresses its thanks and congratulations to the Italian security forces, and expresses its best wishes to General Dozier and his family, who have suffered greatly from the cowardly actions of these criminals.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDUSTRY
Mr. David Orlikow (Winnipeg North):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. In view of the promises made by the government to consult with labour and management in a meaningful way before bringing forward its programs to deal with the very heavy lay-offs which have taken place in the last two years, and in view of the failure of the government to live up to that commitment so that the legislation prepared under ILAP was brought to Parliament without any meaningful input by labour or management, and in view of claims made by labour representatives from both the United Steelworkers and Auto Workers that, so far, the views of the local committees have been largely ignored and that virtually no money spent under the ILAP program has gone to help workers laid off, I move, seconded by the hon. member for Hamilton Mountain (Mr. Deans):
Oral Questions
That the federal government change the unilateral decision-making process which it has been following and begin instead to develop the ILAP program through real co-operation with labour, management and local communities, for whom the ILAP program was supposedly developed, so that some of the thousands of laid-off workers who have been devastated by the current recession will begin to get help.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is for the Minister of Finance regarding some of the confusion existing in the country about his budget. He may well know that Inco is now deducting new taxes on employee benefits amounting, for example, to $212 per year for a married employee with a taxable income of $26,000 per year. Prudential Life, however, where benefits are worth $369 per year for married employees, does not make a deduction. Neither company, nor the thousands of Canadians who work for them, know whether they should be deducting anything or, if so, how much. The situation is the same for thousands of other employers and employees. Will the minister tell the House how long he intends to allow this confusion to go on?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Well, Madam Speaker, to my knowledge there is no confusion.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: The situation has been clearly laid out in the budget; we all know its provisions. I would add to that general statement the point that the collection of these taxes and how they are applied to various firms is, of course, a matter for the Minister of National Revenue.


POSITION OF UNEMPLOYED
Charles Joseph Clark: Well, the minister can attempt to pass the buck to his colleague, the Minister of National Revenue. He says there is no confusion. The fact is that if he were in touch at all with reality in this country he would know that companies having to deal with the problems caused by this budget simply do not know, two months after the budget was brought down, what will be the impact of its provisions. Those Canadians suffering deductions

January 28, 1982
Oral Questions
now simply do not know whether they are being properly or improperly taxed.
Let me ask the minister another question. He might know that in the construction industry, where work is seasonal, and where individuals often work for different employers in a particular year, unions negotiate with employer associations to establish union trustee plans which fund employee benefits. Many of the employees who receive those benefits are, thanks to the economic policies of the minister, now unemployed. Will the minister tell us are these unemployed Canadian construction workers to be taxed on their employee benefits? Are you adding new taxes to Canadians now unemployed?


Allan Joseph MacEachen: Of course not, Madam Speaker.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: We will correct that as we corrected the minister's misstatement about the child tax credit.


Some hon. Members:: Hear, hear!


QUERY RESPECTING POSSIBLE CHANGES IN BUDGET
Charles Joseph Clark: Now, the minister will know that his colleague, the hon. member for Thunder Bay-Atikokan, said yesterday morning on "Canada AM", and 1 quote, "Obviously the government is going to make some major changes in the budget." Will the minister tell us is the government going to make some major changes in the budget, and when will those major changes be announced?


Allan Joseph MacEachen: Well, Madam Speaker, 1 suppose what 1 might regard as a major change the Leader of the Opposition might regard as minor. I discovered that when some of the changes I made on December 18, which I regarded as major, were described by others as minor. I have no intention of making any changes in the budget-


Harvie Andre: Say goodbye to your backbenchers.


Allan Joseph MacEachen: -until the House of Commons has an opportunity to examine the provisions of the budget. It is not my intention to come into the House and make these changes.


Erik Nielsen: You dare not do so.


Allan Joseph MacEachen: They will be made in the normal way in the course of the parliamentary process.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: If hon. members take that process seriously, they will realize that is where members' views are heard, representations can be made, consideration can be given to these views and, if they are convincing, then the changes will be made. That is my general answer to the Leader of the Opposition.


Charles Joseph Clark: So much for the hon. member for Thunder Bay-Atikokan and the reliability of his word, and that of other members opposite and the reliability of their word.


MINISTER'S POSITION ON POSSIBLE CHANGES
Charles Joseph Clark: understand the minister correctly, which is always impossible, he has now given the proposition that the House of Commons will write the budget. The one relief is that it will be a much better budget than the minister wrote.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: But the minister has now admitted the possibility of changes. He says, with all feigned innocence, that it will be up to the House to make them. Is the minister currently proposing to a committee of the House of Commons that there be any change to any part of the budget? Is he presently contemplating that? If so, why will he not immediately indicate to Canadians what kind of changes he is prepared to contemplate? While he is on his feet, can he tell us whether he has given reason for any Liberal Member of Parliament to believe that there will be changes in the budget which he has not revealed to the whole House of Commons or to the public?


Allan Joseph MacEachen: Madam Speaker, I do not take a different line in the caucus than 1 take in the House of Commons. Maybe the Leader of the Opposition does that, but I do not.


John Carnell Crosbie: Give me a rubber man.


Mr. Baker (Nepean-Carleton):: They are weak men, your backbenchers.


Allan Joseph MacEachen: I assumed that the Leader of the Opposition had some respect for the parliamentary process.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: He has stated that it was his intention to filibuster the tax measures, to have a very long debate, to ensure that they were carefully examined. It is the normal procedure at least to examine these tax measures. I am not suggesting, previewing or forecasting what changes might be made in the measures. However, it is the normal course that views of hon. members are heard-


John Carnell Crosbie: And laughed at.


Allan Joseph MacEachen: -amendments are proposed, and, at times, changes are made. That is what I have in mind when I talk about the parliamentary process. What do hon. members suggest?


Mr. Nowlan:: Incredible!
January 28, 1982


Allan Joseph MacEachen: That we disrespect the whole legislative process and say that it is irrelevant? I regard it as a very relevant phase of the work of changing taxes.


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: To get you off the hook.


COST OF COLLECTING TAXES ON EMPLOYEE BENEFITS
Miss Pat Carney (Vancouver Centre):: Madam Speaker, my question is also addressed to the Minister of Finance. Many labour groups, including the Quebec Federation of Labour, the B.C. Federation of Labour, the Quebec Teamsters and the National Union of Provincial Government Employees have all told us that the proposal to tax employee benefits, such as dental and health plans, will lead to substantial labour unrest because these contracts have already been negotiated and the unions will seek to recover their costs from the general taxpayer and consumer. We are also told that the cost of administering this part of the budget is more than the revenues which will be gained. Why is the minister prepared to risk billions of dollars of damage to the economy in order to collect nickels and dimes?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, I do not believe any such risk exists.


Pat Carney: I would refer the Minister of Finance to all the labour contracts which have been negotiated by unions, and suggest that he refresh himself on their contents.


POSSIBLE IMPACT ON PENSIONERS
Pat Carney: My second question is also addressed to the Minister of Finance. Our Conservative task force was told by John Arthur, who is the president of the Canadian Pensions Conference, that the proposal to tax social benefits would disqualify many pensioners from receiving supplementary pensions such as the guaranteed income supplement. He has already referred to the fact that another cabinet colleague administers the national revenue, administers some of the budget measures that he wishes to introduce. We were also advised that the Minister of National Health and Welfare has refused to calculate these benefits into pension income. Why is the minister determined to tax pensioners on health benefits paid by their former employers when the concept has been rejected by his own cabinet colleague?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, the hon. member has not clearly stated what particular benefits she has in mind. Just the other day one of the other hon. members of the opposition referred to veterans and the alleged additional
Oral Questions
taxation they might face. Of course there is no provision whatsoever in the budget that would affect the current status of veterans. There is a provision in the relevant resolution to which the hon. member's colleague referred, providing for a prescribed omission or prescribed elimination of certain programs. Unless the hon. member is very specific as to what other benefits she has in mind, I must say I am at a loss to answer her very general question.


PAYMENTS TO PENSIONERS' HEALTH AND DENTAL PLANS
Pat Carney: Madam Speaker, my supplementary is also to the Minister of Finance. I can be very specific. These are payments to health and dental plans by employers, which are continued for pensioners. They are the ones named in the budget papers.


Allan Joseph MacEachen: Madam Speaker, I do not believe the hon. member can equate employee benefits and retirement benefits. They seem to be contradictory.


FINANCE
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, I would like to address my question to the Minister of National Revenue. The minister is no doubt aware that to this point in time there is no tax guideline printed and available for employers in this country with regard to the tax changes announced by the Minister of Finance in his budget. On what legal authority do employees of the Ministry of National Revenue instruct or advise employers in this country to deduct from the wages of their employees taxes applied against what may well become taxable, on this day, in advance of the taxing measures being passed by the House of Commons?


Hon. William Rompkey (Minister of National Revenue):: Madam Speaker, specifically under Section 153 of the Income Tax Act and Regulation 101 which expands on that section, it is the duty of the employer to deduct taxes on behalf of his employees. In January of every year the Department of Revenue, as it did this January, sends out tax tables to employers. For the benefit of the Leader of the Opposition I might say that the tax tables this year included the budget provisions of November, so there should be no confusion in the minds of employers. The same tax tables and the same information has been sent to all employers under Section 153 of the Income Tax Act.
While I am on my feet, I might say to the hon. member that I am rather surprised that he raised a question of privilege about an announcement which clarified employee benefits, made when the House of Commons was not in session. I would have thought it important to get that clarification out as soon as possible. Indeed, most workers wanted that. I am particular-

January 28, 1982
Oral Questions
ly surprised in the sense that this is beneficial to 12 million Canadians who will see a reduction of their tax through this budget. Indeed, 250,000 people in Newfoundland will improve their financial situation this year as a result of this budget. That was the reason for getting the press release out as soon as possible.


TAXES COLLECTED BY EMPLOYERS
Ian Deans: Madam Speaker, is it then legal for an employer to tax an employee at any level he sees fit, or must the employer tax at the legal level as established by the law?


Bill Rompkey: Madam Speaker, obviously the ways and means motion puts into legality the provisions of the November budget. It is the practice of employers to withhold taxes on behalf of their employees. This is obviously given legal sanction by the ways and means motion through legislation in the House of Commons. It is a time-honoured practice of this House, in fact of all Houses that I know, including the provincial Houses across this country, to operate in exactly the same way as we have been doing for years, including when the party opposite was the government.


LEGAL BASIS FOR COLLECTING TAXES
Ian Deans: Madam Speaker, perhaps the minister is not aware of two facts. First, his own legal officials, in consultation with this party, have indicated that they do not have any legal authority to require employers to collect tax for which there is no legislation. Second, advice being given by the ministry officials over the telephone is that they cannot issue a tax bulletin because there is no legal authority for the collection of the tax. What exactly is the legal authority that allows employers to take taxes from employees in excess of the legal taxes allowed by the laws of Canada?


Bill Rompkey: Madam Speaker, 1 believe I have dealt with that question previously. I have referred to Section 153 of the Income Tax Act. It is not true to say that employers do not know what taxes they have to deduct.


An hon. Member:: There is no law.


Bill Rompkey: The tax bulletins are issued by the department. I would be quite happy to supply them to the hon. member. Apart from the tax tables, there are interpretation bulletins which are now in existence and which are being updated and will be issued to employers.


NATIONAL DEFENCE
Allan Bruce McKinnon: Madam Speaker, my question is for the Minister of National Defence. In his speech to the Conference of Defence Associations on January 14, the minister said the following:
The proportion of the budget that we devote to the capital program has been rising, it is now up to 24 per cent, and still rising.
The estimates for this year show that the capital portion is only 19.6 per cent of the total, a decrease from the 19.8 per cent of the previous year. Would the minister tell the House from where is he getting the additional 4 per cent?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, the statement that I made during the CDA conference referred to figures given by my department, and I think these questions on figures, percentages and statistics can be discussed when the estimates are before SCEAND. I believe I said that this year the capital expenditure was up to 24 per cent. I think that was the figure I gave at the CDA. 1 am ready to discuss that when the time comes.


Charles Joseph Clark: Phone the Senate.


Allan Bruce McKinnon: One would expect the Minister of National Defence to have overcome his confusion over the budget figures by this time.


MINISTER'S STATEMENTS
Allan Bruce McKinnon: While we were discussing the estimates at what he calls SCEAND-the Standing Committee on External Affairs and National Defence- the minister said on March 26, 1981, that capital expenditures will account for close to 20 per cent of the defence budget, taking into account our contributions to the NATO airborne warning system and the infrastructure. How can the minister put these two conflicting statements before Canadians? Apparently, he allocated 4 per cent extra in the capital budget yet he pretends not to know where it comes from, if indeed there is a 4 per cent addition. I would like to know what the truth is between those two totally irreconcilable statements.


J. Gilles Lamontagne: Madam Speaker, there always can be many discussions on statistics, figures and percentages. However, I think the real figures will be there when the estimates can be discussed, when the final budget will be adopted as far as defence is concerned. The fact is that the defence budget this year is one of the best budgets we have had for a long time and this government has taken its responsibility for our commitments toward NATO and the defence of Canada. As far as the figures of the hon. member are concerned, I will be ready to discuss these with him in the House committee when it sits.
January 28, 1982


FINANCE
Mr. Vince Dantzer (Okanagan North):: Madam Speaker, my question is for the Minister of National Revenue. The minister will know that, according to the budget papers, the main thrust of the budget was to eliminate certain tax expenditures or so-called benefits. He will also know that the budget papers refer to a tax on imputed rent on owner-occupied homes. In fact the budget even calculates the amount of revenue the government would receive if such a tax were imposed. I might tell the minister that the constituents of North Okanagan and home owners across Canada are very concerned about the possibility of the government imposing a tax on the rental value of owner-occupied homes. I am shocked about this possibility, as are my colleagues. Will the minister give his assurance that this government has not now placed nor will it in the future place a tax on rental value of owner-occupied homes?


Some hon. Members:: Hear, hear!


Bill Rompkey: Madam Speaker, 1 am not aware of that situation. The Minister of Finance has said that this budget is fair and equitable.


Some hon. Members:: Oh, oh!


Bill Rompkey: That is exactly the way it will be administered.


Vincent Martin Dantzer: Madam Speaker, I would refer the minister to page 31, I believe, of the budget papers, which refers to incomes of individuals.


POSSIBLE EFFECT ON OCCUPANTS OF SUBSIDIZED HOUSING
Vincent Martin Dantzer: Madam Speaker, the minister knows that many people, particularly the elderly and those who have low incomes, live in subsidized housing. 1 am not talking about subsidized housing which comes under employer benefits, but subsidized housing where the size of a person's income determines the amount of rent to be paid. When the minister puts a value on subsidized housing as an income, does he intend to value that as income which will, of course, have the effect of raising the rent to those people and increasing their tax? Could he answer that?


Bill Rompkey: No, Madam Speaker.


Charles Joseph Clark: No answer.
Oral Questions THE CONSTITUTION


DATE OF PATRIATION
Mr. Jack Burghardt (London West):: Madam Speaker, my question is for the Minister of Justice. Could the minister comment on today's decision by the British Court of Appeal with regard to native rights in the Canadian Constitution, and perhaps give the House some indication of when we may expect to see the Constitution patriated?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, this morning we heard the news of the decision of the Court of Appeal in England. We expect that the British Parliament will proceed with finalizing the acceptance of the package in the House of Commons and House of Lords within the next few weeks.


Ramon John Hnatyshyn: Can you give us a better idea?


UNEMPLOYMENT INSURANCE
Mr. Rod Murphy (Churchill):: Madam Speaker, my question is for the Minister of Employment and Immigration. At the present time one third of the work force of Leaf Rapids and Lynn Lake, Manitoba, have been laid off. Because these people are eligible for payment in lieu of notice, they are being denied immediate access to UIC benefits. If these same benefits were called severance pay, the workers would receive UIC benefits at this time. Will the minister admit that these payments are the same as severance pay, and ensure the workers are eligible for UIC benefits now? In other words, will the minister waive the regulations pertaining to the workers in Leaf Rapid and Lynn Lake, just as he did for the workers at The Winnipeg Tribune?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, in this particular case the definition of the benefits is defined by the Manitoba Labour Code. They are being defined as wages in lieu of notice and, as a consequence of that, I wrote to the Minister of Labour in Manitoba last week requesting that he waive the application of that law in this particular circumstance. If he waives the application of that, we would be prepared to consider it as severance benefits and therefore pay the workers their full entitlement under the Unemployment Insurance Act.
I suggest to the hon. member that, rather than trying to stir the pot, he would be better off to persuade his colleagues in the provincial government to concur with our request to waive that application so the workers can receive the benefits.


Some hon. Members:: Hear, hear!


Rodney Edward Murphy: Madam Speaker, the minister knows that the reason the provincial government cannot waive the regulations is that the company is trying to give the workers less money
80108 -12

January 28, 1982
Oral Questions
than they are entitled to by provincial law. The province will waive the regulations but can only do so if the company will also waive the regulations. The minister has the power to do that himself, as he should.


INCOME TAX
Rodney Edward Murphy: My supplementary question is to the Minister of Finance. These people who are being laid off in Leaf Rapids and Lynn Lake are being forced to sell their homes at a loss. They are living in one-industry communities and there is no market for their homes. Will the Minister of Finance investigate the possibility of allowing people who are laid off because of shutdowns or plant closures, the tax benefit of being able to charge that loss against their income? We can protect corporations; can we also protect individuals?


Allan Joseph MacEachen: Madam Speaker, I appreciate the situation which the hon. member has raised. 1 believe that there may be some action which can be taken by lending institutions to give these cases some consideration.


Mr. Epp:: Let the Manitoba government solve it.


Allan Joseph MacEachen: I know that in other communities where there have been extended strikes, for example, lending institutions have declared a moratorium on the collection of mortgage payments. I think something along those lines might be investigated.


COMMUNICATIONS
Mr. S. J. Korchinski (Mackenzie):: Madam Speaker, I had a question for the Minister of Communications, who has just slipped out. I do not know what communication we will have here, but I see he is now returning.
My question is about pirate stations operating in some northern areas. The CRTC is imposing certain regulations which insist that northern areas have nothing but CRTC approved communications. Is the minister prepared to allow some of the so-called pirate stations to operate in those northern areas, or will he close them down so that they will not operate in those northern areas?


Hon. Francis Fox (Minister of Communications):: Madam Speaker, as I have indicated to the House a number of times, we are prepared to take as flexible a position as possible. Basically, as the hon. member knows, the CRTC has authorized a new service for remote and underserved areas of Canada known as Cancom, which makes four television signals available to all those underserved communities. Since the beginning of the year, the CRTC has licensed some 266 communities to receive the Cancom service. Obviously in areas where there is now a licensed distributor of Cancom services we would expect the other, illegal services to terminate.


BROADCASTING OF &quot;HOCKEY NIGHT IN CANADA&quot;
Stanley James Korchinski: Madam Speaker, is the minister prepared to allow Cancom to introduce "Hockey Night in Canada", which would allow an injunction to be served with respect to a service which is copyrighted in defiance of the law? This is something the pirate stations wanted to do. Is he prepared to abide that kind of situation and to allow the matter to be taken to court?


Francis Fox: Madam Speaker, the pirate stations are offering essentially American fare to the areas to which they are distributing signals. I do not believe there is any possibility for a pirate station to pick up "Hockey Night in Canada". We hope to see CBC services extended to all communities in Canada. The hon. member knows that there is an accelerated coverage plan which comes to an end within the next year or so which will assure basic CBC services, including "Hockey Night in Canada", to all communities of 500 or more residents.


SMALL BUSINESS
Mr. W. C. Scott (Victoria-Haliburton):: Madam Speaker, my question is directed to the Minister of State for Small Businesses and Tourism, and it deals with the small business bond. In view of the fact that small-business men and farmers are still encountering great difficulty in obtaining application forms at their local lending institutions and are unable to secure any definite information on the small business bond from their bank managers, can the minister assure the House that he will again approach the banks and ensure that information and forms will be readily available, so that members of the business community will be able to understand and take full advantage of the small business bond?


Hon. Charles Lapointe (Minister of State (Small Businesses and Tourism)):: Madam Speaker, the Minister of Finance and myself issued a press release about two weeks ago, informing the financial institutions of the regulations concerning Small Business Development Bonds. I have been told that since then, the head offices of the chartered banks are now in a position to inform their branches of the regulations for issuing such bonds. 1 shall be happy to act on the hon. member's suggestion by getting in touch again with the bank-
January 28, 1982_____________________________COMMONS DEBATES_______________________________________________14411
ing community to ensure that they are approaching the bond program in as positive a manner as possible.


REQUEST FOR CHANGE IN PROGRAM
William C. Scott: Madam Speaker, my supplementary question is directed to the Minister of Finance. As the small business bond is 80 per cent self-financed when used for capital expansion, and represents one of the more effective stimulants to our sluggish economy, will the minister withdraw the restrictive "dire straits" clause from the bill and restore it to its original form, and give more incentive to our farmers and to small businesses which are really suffering from the effects of the budget?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, the purpose of confining the application of the Small Business Development Bond to firms or individuals in financial difficulty was to ensure that the available funds would be channelled to those most in need. That was the dominant request made by members of the opposition before the budget.


Mr. Wilson:: It was not.


Allan Joseph MacEachen: The request was that some effort be made to come to the assistance, for example, of farmers who were facing extraordinarily high interest rates, and we have provided, as a result of budget measures, including the Small Business Development Bond and the special provisions which will be applicable through the Farm Credit Corporation, substantial relief to those particular farmers. It seems to me that is a very effective way to deal with the case.
I should remind the hon. member, as I have stated earlier, that that particular provision has always been part of the bond. It was there when it was introduced by the former Minister of Finance.


HOUSING
Mr. Garnet M. Bloomfield (London-Middlesex):: Madam Speaker, my question is directed to the minister responsible for housing. In today's Toronto Star a Mr. Deslise from Statistics Canada has reported a surge of housing starts following the November 12 budget. Could this signal a turnaround in the housing sector in 1982-


Some hon. Members:: Oh, oh!


Garnet McCallum Bloomfield: -and does the minister share that optimism?


Some hon. Members:: Oh, oh!
Oral Questions


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, the hon. member's question gives me the opportunity to say yes, I share the optimism of the report in the Star today. This afternoon I will introduce amendments to the National Housing Act. The budget provides $350 million for the rental supply plan. The amendments to the plan to provide improved mortgage documents for the private sector market will support that turnaround. This first turnaround in five years is a good sign.


FINANCE
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, as my leader, the right hon. member for Yellowhead, has pointed out, members of many unions across Canada making representations to the Progressive Conservative task force pointed out that commencing this month an additional $200 to $300 will be deducted from their net incomes. Officials of Inco and other companies have confirmed they feel they have a responsibility to officials of Revenue Canada to make these deductions. My question to the minister is quite simple. He evaded this question when it was put to him by the Leader of the Opposition. Does he condone the deduction tomorrow of these amounts from the January paycheques of mine workers and others in hard pressed and depressed communities across Canada, who have to contend in a general way with all the negative consequences of his budget?


Allan Joseph MacEachen: Madam Speaker, I think the hon. member should put the situation in the proper context. 1 suggested in the House earlier that at the present time in Canada, for example, the average industrial wage is about $22,000. At this income level, with the budget measures which were included and brought into effect, the average tax saving for a family of four will be about $650. I believe that is the beneficial fact the hon. member ought to draw to the attention of his workers, and that ought to be reflected in the withholding taxes which are put into place this month by employers, because there will be millions of Canadian employees taking more money home this month as the result of the budget than they did last year. That is the fact I want to get out before the Canadian people.


THE BUDGET
Thomas Edward Siddon: Madam Speaker, once again the Minister of Finance is distorting the facts, because in fact the marginal tax rates have not changed for incomes under $24,000. Benefits are lost because of the

January 28, 1982
Oral Questions
higher taxes on energy. Additional taxes are withheld due to taxes on employee benefits. Many employees will have less in terms of real income. I am speaking in real terms and not referring to inflationary increments and requirements to keep pace with the 13 per cent rate of inflation in this country.
Madam Speaker, the minister's response is small consolation to the 430-


Madam Speaker:: Order, please. The hon. member is carrying his preamble a bit too far. 1 would ask him to put the question.


Thomas Edward Siddon: Madam Speaker, I wanted to ask the minister if he condones the progressive shutdown of Canadian industry, of the base metal industries, which is leading to massive lay-offs and massive numbers of applications for unemployment insurance in offices across the country. Will he continue to accept this foolhardy advice from a bunch of philosopher kings who are leading him down the path-


Madam Speaker:: Order.


Allan Joseph MacEachen: Madam Speaker, in his preamble the hon. member attempted to conceal the tax cuts that are contained in the budget. In doing so he has drawn attention to the increases in energy prices. I am surprised that the hon. member would do that when his own party consistently advocated higher energy prices than were included in the Alberta-Canada energy agreement. The hon. member for Etobicoke Centre had the effrontery the other day to make the same point, when he was the man who, at the annual Conservative convention, very strongly supported an increase in energy prices.
If you want to take that into account then you are taking into account quite a separate matter than the budget tax cuts which, in the case of an industrial wage of $22,000 for an average family of four, registers a tax cut-


Charles Joseph Clark: That is not what they are saying in Timmins.


Allan Joseph MacEachen: -of $650 in 1982, and $220 for a single person. Those are the facts.


RAILWAYS
Mr. Les Benjamin (Regina West):: Madam Speaker, I would like to address a question to the Minister of Transport. He has in his possession the third report of Snavely Consulting Services of Washington, D.C. In the two earlier reports that consultant rejected including certain costs in computing the costs of transporting grain under the statutory grain rate, the Crowsnest Pass rate. In the terms of reference for this third report, why did the minister instruct Mr. Snavely to include
costs that he had rejected earlier? Was this an attempt to get an exaggerated estimate of the costs of transporting grain?
Will the minister be good enough to tell the House if he will make the report public? I wonder if he has seen it-if he would care to look this way-and would he make this report public? Would he also advise whether those recommendations are going to be used in an attempt to increase the Crowsnest Pass rate to grain producers?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, the Snavely Report is the third, or the second update of the first report that was produced around 1975. It is Mr. Snavely's assessment of the cost of transporting grain in western Canada on the basis of variable cost, and on the basis of fixed costs and so on. It is not to be seen as government policy. This is a transportation cost analysis which is determined on a number of assumptions. Consequently it will play a role when the Crow debate takes place-if it does, when cabinet has decided-but it should not be seen as the Bible by anybody. The hon. member should not go around the country blessing the Snavely report and extrapolating all kinds of fancy conclusions on the basis of it.
With respect to the publication of the report, we have an executive summary of it which is supposed to come out today or tomorrow, or the next day. The report itself will be published in due course when the possibility exists of having it printed in the proper form. I will be more specific on that to my hon. friend in a few days, but I repeat there will be an executive summary of it within a few days.


CROWSNEST PASS RATE-DELAY IN PROSPECTIVE ANNOUNCEMENT
Leslie Gordon Benjamin: Madam Speaker, I have two further questions for the minister. Is it the intention of the government to delay any announcement of intent regarding changes in the Crow rate, following the pleadings of the Liberal Party of the remnants of the Liberal Party in Saskatchewan, to hold off until after there has been an election there?
Since any kind of increase proposed or recommended by Mr. Snavely to grain producers would cost 50,000 jobs across the country, instead of trying to demolish the Crow rates will the minister provide investment into rail transportation in Canada and take equity ownership in those rail systems in return?


Jean-Luc Pepin: Madam Speaker, on listening to the hon. member I am not surprised that the comment of a fellow westerner on the hon. member's last press conference was "rubbish". That is about what the question leads to.
He is asking me, first, if we would delay the announcement of a program on western transportation including the Crow rate. How can I delay something that has not yet been announced? How can I delay on a date which is not known yet? That is a difficult question to answer.
January 28, 1982

On the 50,000 jobs that would be lost, obviously my friend has not thought about it enough. He should, because the amount of construction that would result from what is talked about in terms of western rail development would be extraordinarily greater than the few jobs my friend says could be lost. He estimates this at 50,000, which is something which has resulted from a weekend of imagination. The investment-


Madam Speaker:: Order. Order. At this point I do not know which is the longer, the question or the answer.


FISHERIES
Mr. Alexandre Cyr (Gaspe):: Madam Speaker, in the absence of the Minister of Fisheries and Oceans, my question is directed to his parliamentary secretary.
The minister is aware that many Gaspe fishermen are anxious to obtain licences for groundfish trawling in the Gulf of St. Lawrence. 1 should like to ask the parliamentary secretary whether the minister or the department intends to issue new licences for cod trawling in eastern Canada in 1982?


Mr. Brian Tobin (Parliamentary Secretary to Minister of Fisheries and Oceans):: Madam Speaker, I am pleased to inform the hon. gentleman-and 1 may take the opportunity to say that he is one of the most hardworking members on this committee-


Some hon. Members:: Hear, hear!


Brian Vincent Tobin: As you can see, Madam Speaker, members on all sides of the House certainly agree. Unfortunately, because of full utilization of the fish stocks in the Gulf region, both on the Quebec and the Newfoundland sides, if I can explain it that way, it is impossible at this time, based on the best scientific evidence that we have, to issue new licences. The hon. member will certainly be kept informed as we know that the interests of fishermen are always paramount in his mind.


Some hon. Members:: Hear, hear!


EMERGENCY MEASURES
Mr. Gus Mitges (Grey-Simcoe):: Madam Speaker, my question is for the President of the Privy Council who is the minister responsible for emergency planning. On May 21, 1981, cabinet passed an order in council known as the emergency planning order, that authorized sweeping federal powers
Oral Questions
not only in times of war but more particularly in times of peace. I should like to ask the minister what kind of emergencies, short of war, he envisages happening in Canada that would allow the federal government to control all national information sources, to release convicted prisoners, to regulate and control the movement of manpower, and to create civilian internment camps.


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, the hon. member is quoting out of context some passages from an order in council that is of the utmost importance for sound emergency measures planning in Canada. I feel that during the past few years we could have taken far more practical steps to improve emergency measures planning. What is contained in the order in council does not yet have force of law. For the order in council to become effective would require debate in Parliament and Parliament's approval of its implementation. Meanwhile, what this order in council does is to provide the various departments with instructions on how to plan sensibly for coping with any emergency situations that might arise in this country. I feel that this is an excellent example of sound planning by the government, and once again, nothing in the order in council has any legal effect unless it is approved by Parliament.


REASONS FOR NOT INTRODUCING LEGISLATION
Constantine George (Gus) Mitges: Madam Speaker, my supplementary question is directed to the same minister. Given the complexity and the absolute power given to the government under this order in council, why did the government, if it had nothing to hide, not introduce legislation seeking this authority, where everything would be out in the open and above board? Could the answer be that the government is afraid of drawing public attention and public outcry to these very serious and, I think, undemocratic and dictatorial powers?


Some hon. Members:: Hear, hear!


Yvon Pinard: The
reason is quite simple, Madam Speaker. We feel it is more sensible to deal with events as they occur. We do, of course, want to be ready to take effective action to cope with any emergency situations that may arise, but we want to avoid setting in motion a whole process that might not be really necessary to deal with a specific situation. I also wish to reassure the hon. member that the order in council in question was distributed and discussed at a federal-provincial conference on emergency measures over which I presided last May. I have been in touch with a number of my colleagues who are responsible for emergency measures in various provinces to discuss with them how these measures would be implemented.

January 28, 1982
Business of the House
I feel that in each case they have understood that it was a matter of sound planning whereby departments are instructed to prepare for any eventuality, and should an emergency arise, only those measures described in the order in council would be used that would be necessary to cope with the situation.


PETITIONS
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table reports of the Clerk of Petitions stating that he has examined the petitions presented by hon. members on Wednesday, January 27, 1982, and finds that they meet the requirements of the Standing Orders as to form.


BUSINESS OF THE HOUSE
Erik Nielsen: Madam Speaker, might I ask the government House leader the usual Thursday question with respect to House business, whether he could outline for us what we will be doing tomorrow and as far into next week as possible?


Yvon Pinard: Madam Speaker, today we will start debate on second reading of Bill C-88, an act respecting loans to farmers. Tomorrow we will return to second reading debate on Bill C-85, to establish a corporation called Canagrex.

Next week's agenda will include legislation concerning the agricultural sector. Monday and Tuesday debate will continue on second reading of the bill respecting loans to farmers. Wednesday, if necessary-unless referral has taken place before then-we shall try to finish second reading of the Canagrex bill, which concerns a new corporation to promote exports of agricultural and food products from Canada.
If we manage to refer both agricultural bills to committee before Wednesday morning, we shall be able to start second reading on Wednesday of a bill to be tabled shortly by the Minister of Public Works, to amend the National Housing Act and the Canada Mortgage and Housing Corporation Act. These are, of course, measures that are a direct result of the budget as it affects agriculture and housing. Finally, Thursday next will be an opposition day.


Erik Nielsen: Madam Speaker, based on the timetable outlined by the government House leader, with the implicit conclusion being drawn that the government feels that it will be adequate to debate the farm credit legislation today and for Monday and Tuesday, and because of its importance to the
agricultural community and the need to place these benefits in the hands of the agricultural industry in the country as soon as possible, after consultation with our agricultural critic I can inform or signal to the government House leader that we are prepared to allow that bill to go to committee at the close of business on Tuesday. We agree with the government that that is a reasonable time for that debate.


Yvon Pinard: Madam Speaker, I welcome that collaboration and I appreciate it very much. I should like to know about the question I raised this morning with my hon. colleague as to whether Canagrex will also go to committee tomorrow or next Wednesday, so that we can plan the business for next Wednesday accordingly.


Erik Nielsen: Madam Speaker, again as a result of consultations with our agricultural critic, he informs me that there are some difficulties with that legislation which require debate by a further number of our members, at any rate.


Ian Deans: Madam Speaker, much though 1 would like to offer the same kind of assurance-and I may well be able to do so at some subsequent point in time-I would have thought that we might have made a decision such as this in private consultation rather than on the floor of the House. I will inform the House leader for the government of our position privately within the next hour or two.


Yvon Pinard: Madam Speaker, 1 also recognize the usual collaboration of members of the NDP on such bills. I expect that they will not prevent Bill C-88 from going to committee on Tuesday evening. I am sure as well that we will have their collaboration on the Canagrex bill.


POINT OF ORDER
Mr. Paproski:: Madam Speaker, I rise on a point of order. I hope I did not embarrass my House leader or our external affairs critic when I was not in my seat at the time the motion under Standing Order 43 was presented by the hon. member for Parkdale-High Park (Mr. Flis), as I did agree with him to declare January 30, 1982, "Solidarity Day". I apologize; I was on the telephone with some of the organizers of Solidarity.


Ian Deans: A point of privilege, Madam Speaker.


PETITION
Mr. Bud Bradley (Haldimand-Norfolk):: Madam Speaker, I rise on a point of order. Madam Speaker probably noticed yesterday in the presentation of my petition that I asked whether in your wisdom you would allow the petition to be read today in the House, if it was found to be correct. 1 wonder if at this time I may ask that the petition be read.
January 28, 1982


Madam Speaker:: This requires the unanimous consent of the House. I think the hon. member ought to have raised it at that point. At any rate, I could ask the House if it gives unanimous consent for the petition of the hon. member for Haldimand-Norfolk (Mr. Bradley) to be read. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Ian Deans: On a point of privilege, Madam Speaker.


MEMBER FOR EDMONTON EAST TO SIT AS INDEPENDENT
Mr. Bill Yurko (Edmonton East):: Madam Speaker, I rise on a matter of personal privilege. For over 14 years I have been a Progressive Conservative, both provincially and nationally. During that period I have had extensive political responsibility, and 1 have thrived on it. With many of my colleagues I dreamed great dreams and sometimes 1 reached so high that I faltered, but always 1 dared to try. Foremost in my mind was the unity of this great nation. On December 2, this assembly bridged 54 years of political failure to give this nation a new Constitution and a new pulse beat. Unity is assured, I am pleased.
However, I have now reached a state of mind where I have lost the desire and even the will to be a Progressive Conservative. The party's vision is not my vision any longer. The party and its leadership have nothing to offer me and I have nothing to offer the party. Therefore, from now on I will be sitting in this assembly as an independent member. I humbly ask, Madam Speaker, that you change my present seating location to a more appropriate one. I deeply thank all those who have travelled the same road as I have over the last 14 years. The journey has been a fascinating and rewarding one.


Some hon. Members:: Hear, hear!


Madam Speaker:: According to the wishes of the hon. member, I will assign another seat to him in due course.



ROUTINE PROCEEDINGS


[Stage Direction]
mr. Mcknight-herd maintenance assistance program
Mr. Bill McKnight (Kindersley-Lloydminster):: Madam Speaker, I ask leave of the House to present a petition signed
Introduction of Bills
by 141 farmers from the Tramping Lake-Unity area of Saskatchewan.
These petitioners request that the Government of Canada reconsider its policy under the herd maintenance assistance program, established in 1980, in order to permit any farmer adversely affected by drought conditions to be compensated. By so doing, the government would remove the discrimination that presently exists under the herd maintenance assistance program.


Ian Deans: A question of privilege, Madam Speaker.



NATIONAL HOUSING ACT


Paul James Cosgrove: for leave to introduce Bill C-89, to amend the National Housing Act and the Canada Mortgage and Housing Corporation Act.


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


Mrs. Therese Killens (Parliamentary Secretary to Minister of State (Mines)) moved: for leave to introduce Bill C-647, an Act to change the name of the electoral district of Saint-Michel.


Some hon. Members:: Explain!


Marie Thérèse Rollande Killens: Madam Speaker, I am requesting this change in the name of the riding on behalf of the members of my association and of my constituents. When three ridings were amalgamated in the northern part of the city, as you well know, Madam Speaker, since Ahuntsic was your own riding- the people there would have liked to see Ahuntsic added to the new name of Saint-Michel. Therefore, with the constituents of Saint-Michel, I hope that we shall soon be able to add the name Ahuntsic to the present name of my riding.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
[Stage Direction]
January 28, 1982
Privilege-Mr. Deans

Ian Deans: Madam Speaker, I rise on a question of privilege. I have been attempting to get the floor for the last few moments, but unfortunately you did not see me. My question of privilege flows from today's question period, specifically an answer provided to me by the Minister of National Revenue (Mr. Rompkey).
In my question to the Minister of National Revenue I asked for the specific authority under which the minister was permitting his officials to advise employers to collect taxes from employees for which there had not yet been a law passed in the House of Commons. I refer you, if I may, to Beauchesne's fourth edition. Citation 233 on page 198 reads:
It is one of the old standing principles of our Constitution that the House of Commons should control the Finances of the country. That is the right, privilege and duty of the House. It has been achieved by means of struggle lasting through centuries, beginning from the fourteenth century down to the seventeenth century, when it was fully confirmed, and since then it has never been disputed.
The cardinal principle on which the whole of our financial system is based is that of parliamentary control, and by this is understood not the control of Parliament in its constitutional sense, but control by the Commons alone. Upon this fundamental principle, laid down at the very outset of English parliamentary history and secured by three hundred years of mingled conflict with the Crown, and peaceful growth, is grounded the whole law of finance and, consequently, the whole of the British Constitution.
The right, privilege and power of the Canadian House of Commons are the same as those of the United Kingdom House and they were stipulated in the first sentence of the British North America Act which reads as follows: "Whereas the Provinces of Canada, Nova Scotia and New Brunswick have expressed their desire to be federally united into One Dominion under the Crown of the United Kingdom of Great Britain and Ireland, with a Constitution similar in Principle to that-


Madam Speaker:: Order, please.


Ian Deans: Madam Speaker, I have only four more words.


Madam Speaker:: Order. The hon. member has again engaged in quotations which might be useful, but at this point the Chair does not know exactly to what use they may be put. The hon. member has not stated what his question of privilege really is. The hon. member is shaking his head, but he has not stated what his question of privilege is. He has quoted precedents and he has quoted Beauchesne, but at this point the Chair does not know what the question of privilege is. I would be grateful if the hon. member told me in a few sentences where his question of privilege lies and then I will allow him to elaborate.


Ian Deans: Thank you, Madam Speaker. I do apologize. I wanted to establish what the privileges of members of Parliament are. The privilege on which I rise is the following. The government has acted by imposing a tax without having sought the specific approval of the House of Commons. I claim the privilege as set out in Beauchesne, Citation 233, and as confirmed in Beauchesne's fifth edition. Citation 16, that as a member of the House of Commons I have a duty and a responsibility, notwithstanding what other members may have
done in the past, to demand the privileges that are clearly set out as privileges of Members of Parliament.
The privilege that I believe is now being breached by this government is the privilege and the duty that I have to be able to see and to pass judgment on legislation affecting taxation before it is put into force.


Madam Speaker:: On two counts I have to interrupt the hon. member. First, the hon. member is raising his question of privilege flowing from the deliberations of this House, and that he can do without notice. As he is exposing the question now, I do have to tell him that because he is not satisfied with the answer of the minister does not constitute a question of privilege.
Further, the hon. member is again discussing the point that he discussed yesterday. At any rate, I have to remind the hon. member that, in my view, the procedure as established by this House has been followed in the sense that a budget has been given to the House and ways and means motions have been deposited following that budget. The process of taxation, which is not included in the Standing Orders, has gone through according to practices which are of long standing.
If the hon. member has a grievance about the way in which the taxes have been collected, that constitutes a grievance but not a question of privilege. The quotation which the hon. member has just read from Beauchesne. of course, refers to the right of parliamentarians to determine and to vote on government expenses. Nothing has changed about that right of parliamentarians. But the particular instance to which the hon. member is referring is covered by the Standing Orders, and as far as the Chair is concerned, the Standing Orders have been followed. I am afraid the hon. member does not have a question of privilege.


Ian Deans: Madam Speaker, I rise on a point of order. Might I ask which Standing Order provides for the collection of taxes prior to the implementation of legislation covering same?


Madam Speaker:: I told the hon. member precisely that the practice in collecting taxes has nothing to do with the Standing Orders. The practice of depositing ways and means motions is one that is covered by the Standing Orders. These are the rules which apply to the budgetary process and they have been followed. Therefore, the hon. member does not have a question of privilege. I repeat that the process of collecting taxes has of course nothing to do with Standing Orders; if the hon. member has a grievance about that he can air that grievance, but not as a question of privilege.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
January 28, 1982
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 1,048, 3,061, 3,092, 3,107, 3,152 and 3,513.
IText]


Mr. Stewart: During the past ten years, did the National Gallery of Canada purchase indigenous native Canadian art, Inuit and Indian prints and sculpture and, if so (a) what was the type of object and the date of purchase (b) what was its cost (c) who was the artist?


Mr. Jack Masters (Parliamentary Secretary to Minister of Communications):: I am informed by the National Museums of Canada as follows: During the past ten years, the National Gallery of Canada did not purchase any indigenous native Canadian art, Inuit and Indian prints or sculpture.


[Stage Direction]
Order Paper Questions
liability company or unincorporated company and, if so, what was the (a) name of the corporation, limited liability company or unincorporated company and any subsidiaries thereof (b) percentage of equity acquired (c) cost of acquisition (d) book value of the acquisition?
2.	Does the Canadian Film Development Corporation have a plan to change the present portion of ownership in any of these enterprises and, if so, what is the plan?
John Gerald (Jack) Masters: I am informed by the Canadian Film Development Corporation as follows:
1.	The Canadian Film Development Corporation is mandated under its act to invest in feature film productions. In doing so, the corporation acquires undivided interest in the ownership of the copyright in the film; it does not as a matter of policy acquire shares or other ownership interest in a corporation, limited liability company or unincorporated company involved in the production of the film.
2.	The corporation has no plans to modify this policy.


Mr. McKenzie: With reference to section 10.53 of the 1980 Report of the Auditor General (a) for what reason were questions pertaining to Canadian veterans not included in the 1981 census forms (b) are any other surveys developed to obtain detailed data on other income support programs concerning the benefits received by veteran clients in relation to their needs and, if not, for what reason?


Hon. W. Bennett Campbell (Minister of Veterans Affairs):: In so far as the Department of Veterans Affairs and agencies are concerned:
(a)	During the formative phases of the 1981 census forms, a number of discussions were held between the Department of Veterans Affairs and Statistics Canada to investigate the feasibility of including such questions. As a result of these discussions, it was concluded by the Department of Veterans Affairs that the costs involved in acquiring information on Canadian veterans using the 1981 census were prohibitive.
(b)	No. For all veterans and dependents in receipt of income support payments from DVA, the total income of each recipient family is known. The level of guaranteed income is specified in legislation, and this level is compared to recognized levels of income below which poverty is believed to exist. This method is considered to be more sound than would be surveys of veterans' families only.


Mr. Clarke: 1.	During the period 1970-80 did the Canadian Film Development Corporation acquire shares or other ownership interest in any other corporation, limited


Mr. Clarke: 1.	During the period 1970-80 did the Canadian Broadcasting Corporation acquire shares or other ownership interest in any other corporation, limited liability company or unincorporated company and, if so, what was the (a) name of the corporation, limited liability company or unincorporated company and any subsidiaries thereof (b) percentage of equity acquired (c) cost of acquisition (d) book value of the acquisition?
2.	Does the Canadian Broadcasting Corporation have a plan to change the present portion of ownership in any of these enterprises and, if so, what is the plan?


John Gerald (Jack) Masters: I am informed by the Canadian Broadcasting Corporation as follows:
1.	The table below outlines the Canadian Broadcasting Corporation's 1970-1980 acquisition of shares or other ownership interests in corporations, limited liability companies or unincorporated companies, including the CBC's cost, the percentage of equity purchased and the book value of the acquisition. Included as well are explanatory notes for interpretive purposes.
2.	Companies listed under the caption "Ownership Interest-Acquisitions" have been 100 per cent acquired, dissolved or wound up, and the assets and their operations incorporated into the CBC. With respect to the company listed under the caption "Non-Ownership Interest-Acquisitions", the contract calls for the redemption of these shares by the company according to a timetable.
Acquisition of Shares or Other Ownership Interests 1970-1980
Name of Company A. Ownership Interest Acquisitions 1. St. Clair River Broadcasting Ltd.
	Date		($000's)	
of	Per cent	Acquisition	BookLocation	Acquisition	Equity	Cost	ValueWindsor, Ont.	1970-1974	100 Capital	3,378 2,530Operations	9,02212,400
(See notes 1 & 2)

Order Paper Questions
Acquisition of Shares or Other Ownership Interests 1970-1980
Name of Company
A.	Ownership Interest Acquisitions
2.	La Cie Radiodiffusion de Matane Ltee.
3.	Radio St. Boniface Ltee.
4.	Master FM Ltd.
5.	Park Realty Ltd.
6.	Les Entreprises Roleo Ltee.
7.	CJBR-Radio Ltee. and CJBR-TV Ltee.
B.	Non-Ownership Interest Acquisitions
T V. St. Francis Ltee.
(Acquisition of redeemable preferred shares)
	Date	
	of	Per cent
Location	Acquisition	EquityMatane, Que.	1972	100Winnipeg, Man.	1973	100Toronto, Ont.	1974	20Halifax, N.S.	1975	100Sept-Iles, Que.	1977	100Rimouski, Que.	1977	100Sherbrooke, Que.	1974	
(SOOO's)
Acquisition	Book	
Cost	Value	
725	334	(See note 1)270	64	(See note 1)2	N/A	(See note 3)1,400	366	(See note 1)275	51	(See note 1)2,000	788	(See note 1)350	350	(See note 4)
Explanatory Notes:
1.	General: The Corporation purchased the above companies for their broadcasting licences and/or assets. The purchase of 100 per cent of their shares was the only purchase option open to the CBC. The purchase price was based on the market value of the companies at the time of purchase and not on the "book value of net assets . I he latter figure excludes "current values" due to inflation and the present value of future earnings.
2.	St. Clair River Broadcasting Ltd. was acquired as a subsidiary whose only purpose was to enter into a partnership with Baton Broadcasting Ltd. to purchase and operate station CKLW-TV Windsor. In 1974 St. Clair purchased outright Baton's interest in CKLW-TV, including the financing of the partner's CKLW-TV operating losses over the four years from the time of original purchase. The funds invested by the CBC in St. Clair shares included an amount of $9 022 000 for these operating losses.
3.	Master FM Ltd. This company was formed by five Toronto FM broadcasters, including the CBC, to build and operate a common FM antenna on the CN Tower Toronto, Ont. Construction financing was mostly by bank loans. Each of the broadcasters pays the company an annual rent which finances its operating costs. '
4. TV St. Francis Ltee. The acquisition of these preferred shares of St. FranSois does not represent a share of the ownership. They are redeemable line with a time schedule at the then going rate of interest.	J
by the company
in
SALARIES OF MPs AND PUBLIC SERVANTS


Mr. Cossitt: With reference to the answer to question No. 1,615 which stated in part that as of October 17, 1980 there were 23,187 public servants earning more in salaries than Members of Parliament were receiving in annual indemnities, what is the current figure as of the date the answer to this question is prepared?


Mr. Norman Kelly (Parliamentary Secretary to President of the Treasury Board):: As of October 1981, the indemnity of a Member of Parliament is $43,800. Members also receive a non-taxable expense allowance of $14,700. This allowance increases for certain electoral districts that cover large geographic areas; as of October 1981, it is $19,500 for ridings in the Northwest Territories and $18,100 for those outlined in Schedule III of the Canada Elections Act.
As of October 1981, there are 6,375 federal public servants as defined in Schedule I, part 1 of the Public Service Staff Relations Act earning over $43,800 per annum. Of these, 375 earn more than $58,500 per annum. These figures, however, include only personnel for whom the Treasury Board is the employer: they do not include governor in council appointments or employees of Crown agencies.


Mr. Cossitt: 1. With reference to the answer to question No. 3,026 which stated in part that the cost of the Canadian Transport Commission hearing in September in Whitehorse was $717, does this amount include the transportation and accommodation costs of the commissioners and others and, if not, what was the cost?
2. Is the government aware that an article in the September 1, 1981 edition of the Globe and MaiI estimated the cost to be more than $2,000?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: The Canadian Transport Commission advises as follows:
1.	Yes. The amount includes total transportation and accommodation costs related to the Whitehorse hearing.
2.	Yes.


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?


Steve Eugene Paproski: Madam Speaker, my question on the Order Paper No. 2,214 has been there since March 10, 1981. It is not a very difficult question for the Minister of State for Multicul-turalism to answer. After all, he does not have very much more to do. The question reads, Madam Speaker:
1. During the period January 1, 1980, to January 31, 1981, what amount was allocated by the government to each ethnic group in Canada and, in each case (a) what was the group's origin and mailing address (b) on what date (c) for what purpose (d) under which program (e) what was the amount originally requested?
The question is very simple and the minister should have it on his computer. I recall that when I was minister we had
January 28, 1982

something which could have been distributed to members who are interested in the ethnocultural community, not only myself but others. I think this is wrong and I hope the Parliamentary Secretary to the President of the Privy Council (Mr. Pinard) will talk to the Minister of State for Multiculturalism. He really does not have too much to do so maybe he can look after this one particular question.


David P. Smith: Madam Speaker, I will make representations on the hon. member's behalf.


Erik Nielsen: Madam Speaker, I want to inform the parliamentary secretary that I did not receive today the customary written notice of the questions to be answered today. I trust that was an oversight and the courtesy will be continued as usual.


David P. Smith: Madam Speaker, the hon. member has a valid point. I do not know what happened but I can assure him we will follow the custom and I will inquire as to what the slip-up was today.



GOVERNMENT ORDERS


Hon. E. F. Whelan (for the Minister of State (Finance)) moved: that the Ways and Means motion to amend the Customs Tariff, laid upon the Table Thursday, November 12, be concurred in.


[Stage Direction]
Motion agreed to.
Eugene Whelan: that Bill C-90, to amend the Customs Tariff and to repeal certain acts in consequence thereof, be now read a first time and be printed.


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

Eugene Whelan: that Bill C-88, respecting loans to farmers, be read the second time and referred to the Standing Committee on Agriculture.
He said: 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
Farm Loans
federal Farm Credit Corporation in helping Canadian farmers invest in their industry's future.
When one checks the record, Mr. Speaker, one will find this act has been amended many times since it was first proclaimed in 1959. It was amended in 1961, 1962, 1964, 1966, 1968, 1972, 1975, 1978, and a bill was placed on the Order Paper March 14, 1979, and died there. So when they say there has been no concern about farm credit, history shows how many times the bill has been changed to reflect economic conditions of the day. When you see the increasing amounts of money the farmers needed, how rapidly that escalated as the farm operations became larger and larger along with the increasing value of land, it is a most interesting history to read.
The proposed changes come at a crucial time. Canadian agriculture is on the verge of a new period of development. Of all sections of the national economy, agriculture is the one with perhaps the best opportunity for growth in the balance of this century. The agri-food strategy, which I announced last July, estimated that Canada could increase its output by two-thirds by the year 2000. Both world and domestic markets for agricultural products are expanding. I believe Canadian farmers must and will rise to the challenge of producing for those markets. However, they can only do so provided that we in the federal government do our part to ensure an environment which encourages the necessary investment, and which ensures they receive a reasonable income for their crops and livestock.
To produce food efficiently in order to be able to compete in world markets in the years ahead will require major investments in new technology and new machinery. Some of the new machinery they are working on, for instance in handling forage, will in the next five to ten years revolutionize livestock feeding in Canada. So when we talk about investment in machinery, it is a tremendous investment which a lot of people in Canada do not realize farmers have made. Some machines are used only a few days a year but they must have them to be efficient.
Some farmers will have to expand the size of their farms to achieve the economies of scale necessary to take advantage of modern production methods. They need money to buy land, so it is essential that the Farm Credit Corporation have access to additional funds and Canadian farmers are assured of a constant and sufficient supply of long-term credit.
Why, one may ask, does this money have to come from the Farm Credit Corporation? Why can the farmers not borrow from their local banks or credit unions, as I 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. I think hon. members from rural constituencies will agree when I say farmers need a supply of long-term credit from an agency which recognizes the needs of farmers and knows how to lend money responsibly in rural Canada, particularly to the agricultural sector. The Farm Credit Corporation has that kind of knowledge and expertise, Mr. Speaker.

January 28, 1982
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Although I sometimes get letters from individuals who say the FCC has not dealt with them fairly, I think by and large the corporation has a good track record of considering the individual circumstances of their clients and treating them with more sympathy and human dignity than many private lenders have shown in recent months.
In its 22-year history, the Farm Credit Corporation has lent nearly $5 billion to some 160,000 Canadian farmers. Approximately 74,000 loans are in effect at the present time, including 4,328 loans made so far in the year 1981-82. The total amount lent to farmers in the current fiscal year, as of mid-January, was $426.9 million, with the average loan being a little more than $98,000-approximately $100,000.
In the last two decades, the Farm Credit Corporation has been one of the most important factors in helping Canadian farmers establish and expand their agricultural production and increase the efficiency of their operations. The federal government's conviction of the need for a national credit corporation to assist agricultural development has been reinforced by the excellent record which the Farm Credit Corporation has attained in carrying out its function. At the moment, more than 93 per cent of all Farm Credit Corporation loans are in very good standing. We should not forget that these loans are made to people who, in most instances, cannot borrow money from any private lending institution, because that was the intent of the Farm Credit Corporation in the first instance.
In better economic times, the farmers' rate of property payment of these federal loans is even higher. Sometimes less than 2 per cent or 3 per cent are in default or in some difficulty; however, at the present time it is about 7 per cent. We are right to put faith in the ability of Canadian farmers to invest well with the funds extended by the Farm Credit Corporation. We must now make more money available to the farmers through the corporation. I spoke earlier about the number of times amendments have been made to the Farm Credit Corporation, generally for the purpose of allowing the government to lend more money and to provide more capital for the Farm Credit Corporation.
The Farm Credit Corporation was established in 1959. For most of its history, this federal agency has been the major lender for farm mortgages in this country. As recently as 1975, the Farm Credit Corporation extended more than 70 per cent of all the long-term credit needed by farmers. In 1975, the banks extended virtually no farm mortgage credit. At that time, six years ago, I appealed to the banks to get involved in the long-term farm credit market because I saw a need for wider sources of credit. As I expected, the demand for longterm credit in the agricultural sector has rapidly grown in the last few years. The increase in demand for farm credit financing has grown by approximately 20 per cent annually. The banks have responded to this growing demand, and so have the credit unions. Let us look at some figures. In 1980, for instance, credit unions lent $424.4 million in long-term credit to farmers. That was 20 per cent of the total, across Canada,
for farmers. The banks lent $457.6 million, or 23 per cent of the total. The Farm Credit Corporation lent $498.7 million, which was about 25 per cent of the total, nearly $500 million. The remaining amount came from provincial agencies and private individuals.
In many instances, what farmers thought was long-term credit which they borrowed from the banks turned out not to be long-term credit. I believe some of them signed agreements which they did not really understand. Agreements which they thought were mortgages could be turned over into demand notes when that lending institution so desired. In my office I have documented letters which show that some of them were refused long-term credit. The Bank Act clearly states that the banks can do this kind of thing; that is, they can provide long-term credit with fixed interest rates if they so desire, and they have done this in some instances. Many people buy debentures from the banks for long terms. I recently heard from a man in my constituency who sold his farm several years ago. Elis debenture with the bank now yields him 9 per cent on $150,000.
The banks have many ways of raising money, and they have a great deal of money on which they are not paying high interest rates. The Bank Act gives them a lot of leeway to do the kind of job which should be done in the rural, agricultural community of Canada. However, this has not been done in the right fashion, because it is obvious to me that a large percentage of these farmers would not be in financial difficulty if the physical structures which they built, such as new buildings for housing their livestock and feeding operations for both beef and swine, had been financed on ten-year mortgages. They would not be in difficulty now since in most instances they built during the period when the interest rate fluctuated somewhere between 9 per cent and 11 per cent. However, because they had a combination of floating loans and depressed markets for commodities they were selling, when the interest rates went as high as 24 per cent for some of these people, it was impossible to continue to carry on.
The need for economic restraint in federal government spending in recent years has prevented us from substantially increasing the funds available to the Farm Credit Corporation to meet the rapidly growing demand for long-term investments in agriculture. We realize that this is causing a serious problem for many Canadian farmers, especially since the private lending sector, as I said, has not performed as well as it should in the administration of farm loans. As I have said outside this House, I am extremely disappointed in the way in which most of the banks, but not all of them, have handled the demand for farm credit. I had made an exception, because I named one bank as being one which I believed to have the best farm lending program of all, but farmers immediately wrote to tell me that that bank was not so good either. Therefore, it is obvious to me that none of them is perfect. In many cases, they have handled the demand for farm credit in an improper way by extending credit beyond the ability of farmers to repay. Some have forced farmers to take out short-term bank loans at
January 28, 1982____________________________COMMONS DEBATES
floating interest rates when, as I said, long-term loans at fixed rates should have been made available instead.
Many lenders have shown neither mercy nor consideration for the future food supply of this country by abruptly foreclosing on mortgages and calling in demand notes. One of the things 1 find to be amazing is that there are cases where a farm has been in a family for four generations, has been built and expanded, with perhaps a quarter of a million dollars in interest paid over a few years to a bank or lending institution, which then puts the farm into receivership or bankruptcy. Many cases are not really listed or registered as bankruptcies, so they are not shown in the figures we use here. The number should be much greater. However, the banks are willing to take a loss rather than give a write-off to the benefit of the person who has contributed by paying high interest rates over a long period of time. No mercy will the banks show to that person, who has generally been deprived of even the necessities of life in order to pay interest payments to the bank over, say, a period of five years or ten years. However, the banks are willing to sell it at a loss to some complete stranger rather than give a write-off to that person who has made such a contribution to the lending institution.
This has been brought to my attention by many farmers. In my experience, only one bank has been able to offer a write-off of part of the loan. It has said that if one can obtain the rest of the money through the Farm Credit Corporation or the Small Business Development Bond, it would go along with that kind of an operation. This is the only instance in many hundreds with which we have dealt.
Nevertheless, the banks do have an ongoing and important role to play in farm credit, and 1 hope they are now looking, as I understand some are, at their farm lending policies in order to improve their future dealings with the farm community. However, there are legitimate credit requirements of farmers which banks and credit unions will never be able to serve because the potential borrower does not meet their security or repayment rules. These farmers, in particular, will benefit from the additional funding to be provided through this legislation which we are discussing today.
The most important amendment being proposed is that a new source of future funding be provided for the Farm Credit Corporation. The bill contains amendments which would enable the corporation to borrow money from the financial markets. A major portion of its budget would still be derived from the Consolidated Revenue Fund; however, the corporation would be in a position to supplement its loan funds from other sources. It is estimated that with an agent of Her Majesty status, under normal interest rate conditions the extra cost of borrowing from the financial market would be between one half and one percentage point above the current cost of funds through the government.
With the authority to borrow from sources other than the Minister of Finance, it is expected that the FCC will borrow in the financial markets through private placements by an agent.
Farm Loans
The debt instruments, such as bonds or debentures, offered by the Farm Credit Corporation would likely be purchased by institutional investors, such as life insurance companies, trust companies, pension funds and other investment companies interested in acquiring high-grade securities for their portfolios.
Farmers, particularly retiring farmers, have often asked me about the possibility of investing funds in the FCC so that they can assist young and beginning farmers. With this proposed amendment, a special investment mechanism could be developed to channel funds from these retiring farmers into the FCC.
A type of investment fund could be established where retiring farmers could invest the proceeds from the sale of their farms. In principle, it could be the same as the current registered retirement savings plans, with a retiring farmer being allowed a major contribution in the sale of his farm. A farm would essentially be transferring his retirement plan, that is the equity in his farm, to a more formal investment.
In the future, consideration could be given to providing special tax concessions on bonds sold by the Farm Credit Corporation. This would effectively reduce the Farm Credit Corporation's cost of funds and permit it to loan at a lower rate to young and beginning farmers, or to those in financial difficulty, for example.
A further amendment set forth in this bill provides that the maximum amount of a loan be prescribed by regulations rather than in the act. That is so that if conditions change, it is not necessary to come back to the House and wait your turn in the legislative line-up to get a bill through.
Currently the limits specified in the act are $200,000 when there is one qualifying applicant in a farming enterprise and $400,000 when there is more than one. It is no secret that financing a farming operation is getting more and more expensive all the time. It is no different from any other business.
If the Farm Credit Corporation is to meet the needs of today's and tomorrow's farmers, it must have the flexibility to adjust the loan maximum upwards when necessary. Some people think that when a farmer spends a tremendous amount of money in his farm operation he must be rich. A recent report in The Globe and Mail, a large daily newspaper in Canada, attempted to show how rich farmers are. I have the complete breakdown by the Farm Credit Corporation. It shows exactly what a farmer's investment is, how rich he is and what his returns are, but that was eliminated from the published report. It was not there.
There is hardly a businessman in Canada who would operate on as slim a margin as farmers. The ordinary person reading that newspaper report would think that every farmer in Canada is rich because of the amount of his holdings. As we know, they do have holdings, but very little capital that they can use.
Transferring the loan limits from the act to the regulations will provide an opportunity for the corporation to respond more quickly to changing agricultural conditions. At this time,

January 28, 1982
Farm Loans
and we hope this bill becomes law quickly, we are proposing to increase these limits to $300,000 for one qualifying applicant and $500,000 when there is more than one applicant. It may be necessary to use regulations to change that before the year is out, who knows?
Another amendment which will benefit FCC borrowers provides the corporation with the authority to disburse up to 30 per cent of a loan on the basis of acceptable security until the mortgage registration and other security arrangements for the loan are completed. This is a common complaint from the farmers. Once a loan has been approved, there may be no funds. He may then have to go to a private institution to borrow the money temporarily at a higher interest rate. Sometimes this is done under very difficult conditions. In most institutions once the lending institution sees that the loan has been approved, they make the loan. However, it is more costly for the borrower. This initial disbursement will save farmers the cost and inconvenience of having to arrange interim financing until mortgage funds are actually extended by the corporation.
The corporation's borrowing authority is currently limited to 25 times its capital. It is interesting to note that the capital was increased from $56 million to $66 million in 1972, ten years ago. The current capital limit is $150 million. By the end of this fiscal year, capital contributed to the corporation by the Government of Canada will reach almost $143 million. That means the FCC will reach its maximum borrowing authority early in 1982-83. It is therefore necessary to increase the capital from $150 million to $225 million to head off a serious depletion in lending funds.
In recent years I have received numerous representations concerning the age limit fixed on the phasing-in program which allows borrowers under 35 years of age to work off the farm for up to five years. Bill C-88 proposes to remove this age limit from the program because it is discriminatory. Approximately 74 per cent of loans were made to those between 18 and 35 in 1980-81.
The second part of the bill will give the corporation the authority needed to rebate five percentage points on the interest for loans under the special farm financial assistance program announced in the November 12 budget. This authority will allow me to obtain the necessary funds through departmental estimates.
The FCC has already made 89 loans under this special program. A total of $11 million has been loaned with the average loans being almost $124,000. As hon. members know, of the $50 million budgeted for this program, $45 million will go to the farmers and $5 million for the interest subsidy. This is for farmers facing the most difficult financial problems at the present time.
It is interesting to see where these applications are coming from. Naturally, the vast majority come from Ontario. Applications in some western provinces are almost nil. The need is not there. It depends on the kind of agricultural production entity that they have. I am pleased that the FCC was quick to respond following the budget announcement and
that it has already processed many inquiries. I am told that by the end of the fiscal year all of that money will be lent, and it better be! I am sure the corporation is doing a very thorough job, as it usually does.
In addition to doing the work on Farm Credit Corporation loans, the corporation has 203 credit advisers in 110 offices across Canada. They are also assisting farmers in making applications for small business bonds from other lenders. With this program the farmer can borrow the maximum $200,000 under the Farm Credit Corporation and the family can get a small business bond from another lender at a reduced rate of interest, fixed for five years. This will give them an opportunity to recoup their position. They will not make that much money unless there is a better marketing system for what they produce. I will touch on that later.
I have only touched on the most important changes being proposed. Many of the other amendments will help streamline the operation of the FCC and I look forward to a full discussion of these in committee.
The hon. member for Elgin (Mr. Wise) pointed out on Monday that this legislation has been promised for sorpe time. I would have liked to have had this legislation considered sooner. However, it is my belief that my officials and I have used the extra time to good advantage to listen to and discuss the many suggestions brought forward by farm organizations. The hon. member for Elgin participated in a program that studied farm financing just before Christmas and I am sure he would not want me to bring in some legislation without hearing the report of that committee before we finally drafted this. I believe we have accomplished some of those things and I am sure the hon. member will tell me shortly that I have not accomplished them all. This is why, for the fourth time, I will have the hon. member for Saskatoon-Humboldt-


William Hunter (Bill) McKnight: You have the wrong party.


Eugene Whelan: I was looking forward to hearing from the learned and experienced member. I will willingly pay attention to the hon. member when he does speak.
I read in the paper that I had not done anything for farm credit in five years. We went back and reviewed the situation. Since I have been minister, there was a bill introduced in 1972, 1975, twice in 1978 and one in 1979 which died on the Order Paper-almost every second year we have done something about farm credit. One gets the impression from the paper that we have not shown any concern for the needs of farmers. I just want to put that on the record.
The amendments I have outlined today come as a result of many letters and personal representations from individual farmers, farm organizations, the FCC advisory committee, provincial ministers of agriculture and my fellow members of Parliament. All have stressed the need for more long-term credit for Canadian farmers. We are not pretending, by any stretch of the imagination, that this bill will be the answer for every Canadian farmer. We still think there is a definite place

January 28, 1982
for the lending institutions to develop a proper lending policy because of the importance of food production. They have just as much responsibility to those farmers who are in financial difficulty, because I suggest they have put many of them in trouble as a result of their lending practices. In fact, they probably have more responsibility to help those farmers out of their financial difficulty than I have as Minister of Agriculture. I asked them to make loans in rural Canada, and as I said earlier, I did not know they would do that kind of job.
This bill will provide more long-term credit for farmers and also strengthen the Farm Credit Corporation's ability to respond to the needs of our producers.
The FCC is helping to ensure that the Canadian family farm remains a stable and viable entity. It is probably one of the most decentralized organizations, as is Agriculture Canada, since confederation, because the vast majority or our employees are located from Nova Scotia through to British Columbia. They are not all here in the capital. These people understand the needs of the farmers in their communities because they work with them all the time. It is said that we have not done all the things we should have done. There is other money being provided to farmers actually interest-free, a fact which many people are not aware of. For instance, we passed the Advanced Payments for Crops Act for crops outside the responsibility of the Wheat Board. I believe it was estimated that we would probably lend $40 million under that legislation. This year we are lending some $136 million in interest-free advance payments to farmers for the lifetime storage of that crop.
If you consider the advance payments on grain under the Wheat Board this year, Mr. Speaker, you will find those interest-free payments amount to well over $300 million. Before the year ends, I think you will find about $500 million has been provided interest-free to farmers. You will also see in this fiscal year that the Farm Credit Corporation will have again lent over $500 million at an interest rate which will average much below the interest rate being charged by other lending institutions for the fiscal year. I would say we will average at least five points below what other lending institutions have provided for the whole year.
1 urge hon. members to show their support for Canadian farmers. The House leaders have already come to an agreement on the number of days for debate of this bill before it goes to committee.
Again, I urge hon. members to show their support for Canadian farmers through this legislation, and if they have other sound recommendations, I am not beyond accepting them when the bill is before committee or when it comes forward for third reading in the House if the recommendations are practical and improve the legislation. I urge hon. members to show their support for Canadian farmers by improving, through this legislation, the farm credit service provided by the federal government so it is what we want it to be. Indeed, I cannot imagine a man or a woman among my colleagues, regardless of where they sit in this House, who would not
Farm Loans
support the farmers at this vital point in the agricultural industry by denying them this worth-while legislation.
I want to conclude by saying that the government, and I am sure the Farm Credit Corporation, would be irresponsible if we were to lend money carelessly. A large percentage of the people-some 95 per cent of them-who are in trouble are in the red meat industry in Canada. The other 5 per cent are from the horticultural sector, with a few in the dairy sector who borrowed money from a lending institution outside any provincial lending institution or the Farm Credit Corporation. They borrowed it thinking they had fixed interest rates and so on, and then when their return was about 10 per cent on investment and their interest rates went up as high as 24 per cent, they were just not able to carry on.
So what I am saying is yes, we can make the Farm Credit Corporation a better institution, we can help the Farm Credit Corporation people to do a better job-a job we all want to see them do-and people who are in financial difficulties will be unable to repay their mortgages unless they have better marketing facilities and we are able to guarantee them a better economic return.
I look forward to hearing what the next speaker has to say.


William Hunter (Bill) McKnight: Mr. Speaker, I think it is probably evident to most people in the agriculture industry that there are times when we agree with the Minister of Finance (Mr. MacEachen)-


Some hon. Members:: Oh, oh!


William Hunter (Bill) McKnight: I am sorry, never the Minister of Finance! On a point of privilege, never the Minister of Finance! But, Mr. Speaker, we do agree at times with the Minister of Agriculture (Mr. Whelan), and just in case he thinks that somehow my hon. friend from Elgin (Mr. Wise) is relinquishing his control over the agriculture business in Canada, from the uneven match that we witnessed on the bill referred to as Canagrex the other day, my hon. friend from Elgin felt that it was only proper for the Minister of Agriculture and I to debate this bill since my hon. friend overwhelmed the minister in the Canagrex debate. So now we are down to an average of mediocrity!
We think it is important that we point out to the minister some of the things that could strengthen Bill C-88, the amendment to the Farm Credit Corporation legislation. But before doing this, may I say that we agree that the Farm Credit Corporation has over the past number of years provided a very valuable service to the agriculture industry in Canada-not just in any special part of the country but right across Canada.
Probably one of the reasons that the repayment rate under the farm credit program is right now in default in about 7 per cent of its loans could be that the criteria which has been established for lending under the Farm Credit Corporation is a little stiff, a little heavy. Perhaps we are not taking enough of a chance on young or new farmers, men and women who wish to enter the agriculture field. Maybe that is one of the reasons. The minister knows, and I know, that the other reason is that

January 28, 1982
Farm Loans
people involved in the agriculture industry attempt to maintain a credit standing because credit is so necessary in the production of food in Canada. It is becoming more a part of production every day.
We wonder about the delay of this bill. The minister said he felt the time had been put to good use and that the delay had not affected the bill negatively but had strengthened it. I think that could be debated because since 1979 this is the only time we have had an opportunity to debate a Farm Credit Corporation bill. In 1979 when my colleague, the hon. member for Elgin, was in charge of the Department of Agriculture and the Farm Credit Corporation, $50 million was provided for additional farm credit lending. We had hoped that in 1980 there would be an additional $100 million. In 1981 there should have been an additional $150 million. In 1982 there should be an additional $200 million just to keep up with inflation and rising land costs all over Canada, and I am sure those costs will continue to increase.
I hope the government does not consider borrowing from the marketplace is the panacea or the only answer. I see that the minister agrees. I believe he is sincere in that, and 1 hope officials of the Farm Credit Corporation will increase pressure for additional funding from the federal treasury. However, there should not be federal funding if it is not necessary. The Farm Credit Corporation is anything but a granting institution. It lends funds to the agriculture industry and is repaid with interest. The corporation does not give money to producers. In times of financial difficulty and when there is pressure on the government, it may be that the government might decrease funding for the Farm Credit Corporation or fail to keep funding at inflationary levels. We have faced high inflationary levels in Canada over the last few years and will continue to face them in the next few years under some of the policies we see presented. When the Farm Credit Corporation bill, Bill C-88, goes to committee, I hope the minister will assure us that the federal government will not relinquish its role in financing farm credit and that he will put something into the law which we can accept as a guarantee that farm credit will continue to be funded by the federal treasury at least at the level of the inflation rate in the Canadian economy, and hopefully higher, and at the rate land prices increase throughout Canada.
Sometimes we wonder about the minister. He has stated he is very pleased to be able to do this, but it is interesting that according to the London Free Press of January 31, 1980, the minister said he would not allow the Farm Credit Corporation to receive funds from outside because that would create privatization of the Farm Credit Corporation.


Eugene Whelan: That is a misquote if there ever was one.


William Hunter (Bill) McKnight: The minister says that is a misquote.


Mr. Lewis:: You can't tell when the minister is quoted properly or improperly.


William Hunter (Bill) McKnight: I will send it to him later.
Some of the other issues hinging on Bill C-88 are some of the promises made during the 1980 election campaign, and I hope the producers involved will not have to wait as long for those promises to be fulfilled by the Minister of Agriculture as they have had to wait for Bill C-88.
Credit is a necessity in the farming industry. It is important that everyone in Canada understands that about 15 per cent of the costs paid out by the agricultural industry is for interest. Right now 15 per cent of the cost of production is made up of interest payments in one form or another. Credit is one of the biggest problems farmers in Canada face today, and the cost of credit is continually rising. I hope the next time we look at farm credit the minister will not be increasing the rate of interest borrowers will have to pay to the Farm Credit Corporation. I hope he will be able to decrease that rate.
In 1979, $634 million was made available to the Crown Credit Corporation. I think there were some unusual circumstances that year. Farmers paid off some loans, which gave the corporation a little more money to lend out. However, from 1979 until now we have not seen an increase which would come anywhere close to maintaining the corporation's ability to lend at the 1979 level. I think the minister would agree that in some areas 30 per cent of the cost of production is interest costs. I refer here to cash crops. The Farm Credit Corporation will be called upon to lend more and more money as time progresses.
Perhaps one of the reasons farmers in western Canada are in a better financial position now is that the minister spends most of his time in Ontario rather than in western Canada. I think that probably speaks for itself. The other thing that might be to our advantage is that the red meat industry does not finish livestock in western Canada. The red meat industry finishes livestock in Ontario. Steps can be taken and should be taken to assist producers in the red meat industry. I do not accept the argument of the Minister of Agriculture that a national marketing board is the panacea for the red meat industry.
I would like to talk about the province of Saskatchewan. Statistics show that operating expenses in the province of Saskatchewan in 1976 were $966 million. In 1980 they were $1.58 billion. The percentage increase between 1976 and 1980

just four years-was 63.6 per cent. In 1976 farmers made interest payments amounting to $131 million. According to preliminary figures for 1980 that figure was $285 million, an increase of 117 per cent in four years. Let me compare total farm expenses with total farm cash receipts in the province of Saskatchewan. In 1976 cash receipts were $2.3 million. The preliminary figure for 1980 is $3.13 million. That is a 39.5 per cent increase in four years. However, net farm income decreased by 47 per cent in four years.
It is not that the government has sat idly by. This government has established interest rates which are costing producers in Canada. They are not assisting producers, so I do not think the minister should be so pleased to come in with a small piece of legislation because the legislation has been necessary for the last three years, and hope to see more legislation in the future.
January 28, 1982

I would like to refer to the budget of November 12, 1981. A lot of credibility and enthusiasm was developed by the Minister of Agriculture with an input of $50 million for farmers in dire straits or farmers who were in financial difficulty. Out of that $50 million, only $5 million is available to subsidize interest rates for farmers in financial distress. Those farmers have to be in the position that they cannot even get a small business bond. It is probably 20 per cent of what was necessary, maybe only 10 per cent, or perhaps it was put in without a great deal of thought. When you look at the number of farmers it would really help, you see that the number is negligible.
The Canadian Federation of Agriculture has said that the Farm Credit Corporation provision is disgracefully inadequate and is a sop to the requests of farmers for some real help. It points out that the $45 million provided in the budget allows only $100,000 for 450 farmers. Yet a farmer needs $200,000 minimum today to start up a farm, so that assists only 225 farmers.
I have some questions about how the minister's food policy will be developed when we do not have enough government assistance to enable people to become involved in agriculture. Even with this financial provision there is not enough financial assistance to transfer land from generation to generation or from individual to individual.
I hope that the refinancing of the Farm Credit Corporation by the private sector will work. I wonder if the Minister of Agriculture could persuade the Minister of Finance (Mr. MacEachen) or the Minister of National Revenue (Mr. Rompkey) to allow individuals who have retired and have sold their farms to place money in the Farm Credit Corporation with the same benefits that the government has given to the banks to lend money out on the Small Business Development Bond, where the banks do not pay tax on the interest received and where the individual does not deduct it from his tax when he borrows money. We know that the producers who find themselves in financial difficulty are not in a position to pay tax; therefore the cost to the federal treasury would be nil. Hundreds of Canadian farmers who are retiring would be pleased to place funds at the disposal of the Farm Credit Corporation in order to help other farmers come back into the industry.
In the province of Saskatchewan the average age of the farmer is 50 and the average age of retirement is 57. There are a lot of people who are no longer interested in, and in some cases are no longer capable of, carrying out the business of , farming who would like to be able to transfer their land. With tight money and the high interest costs on other sources of financing, they are unable to do this.
I am sure the minister would agree that the changes made in the budget of November, 1981, regarding income averaging annuity contracts have frozen the land sales of this generation. Until there is some change in the capital gains tax and until there is some change in the ability of individuals to use the
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funds they have saved or the capital from their farms that will protect that from exorbitant taxation at the time of sale, this generation is going to have to continue to maintain control of the land. As a result, agriculture will not prosper when people would sooner retire from the business and have younger men and women take their place.
There is an option in Saskatchewan-but it is not a very good one-called the land bank, where the government buys the land from the retiring farmer. The government contends that this is a good plan because it offers the land back to the farmer in five years. In one instance, however, where the government bought the land for $100 per acre it offered to sell it back to the individual in five years for $400 per acre. The minister should consider such cases because due to the lack of funding by the Farm Credit Corporation some individuals in Saskatchewan are forced to sell to the land bank. The land usually remains in the hands of the government because it insists on recovering a profit of 400 per cent within five years.
1 hope that the changes in the Farm Credit Corporation will assist individuals who are having difficulty transferring farms from generation to generation. Individuals who are asked about the treatment they receive from the Farm Credit Corporation say, in almost every instance, that it is good, fair and reasonable. I do not think that is due to the Minister of Agriculture as much as it is to a lot of the people in the field, such as the Farm Credit Corporation advisers. I hear it filters down from the top, but if that were the case I think some farmers would be in greater difficulty than they are now. I should like to commend the men and women who work for the Farm Credit Corporation for the service they give to people in the farming communities of this country.
I should not like to end on a negative note, Mr. Speaker, so 1 should like to put a few questions to the minister. I am sure he has heard them before but we have not had answers to them. Perhaps his parliamentary secretary, who is very capable and 1 am sure is of great assistance to the minister, could answer some of them.
We requested that a moratorium be placed on farm bankruptcies and we wonder why the minister has not taken any interest in this request. We do not think it is an answer to the problem but we think it is a way to save the farm in tough times. I am sure the minister would like to answer that question.
We also wonder why the Farm Credit Corporation was given $50 million in November, 1981, rather than $500 million. We also wonder why the Small Business Development Bond is administered solely by the banks. I have heard the minister express some feelings about the banks so I thought he would be the last person to place this matter in their hands. Why could it not be placed in the hands of the Farm Credit Corporation? It could issue the Small Business Development Bonds, especially in view of the changes we are discussing today.
I am sure the minister is familiar with the agri-bond concept and the proposal made by the Ontario Federation of Agriculture which wanted a market insurance risk plan. That sugges-

January 28, 1982
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tion may not be the answer to the problem but it is something that would give assistance and add stability to the agricultural sector.
There are subsidies for all kinds of things all over Canada, Mr. Speaker, even in other areas of agriculture. We would like to know why there could not be a short-term or medium-term loan subsidy on interest rates.
It is also important to know what happened to the promise of the Minister of Agriculture on valuation day concerning the re-evaluation of capital gains. I distinctly remember the minister saying that it would be moved up to 1974. This would have helped, but he needed something else during the election campaign to entice votes from farmers. He said that he would give them a once-in-a-lifetime exemption from capital gains tax. That was a promise of the Liberal campaign, a promise of the Minister of Agriculture. Now we see what happened. Not only has valuation day remained unchanged from 1971, one of the years in which land was at its lowest price in a long time- it has not been changed to 1974-but there is no once-in-a-lifetime exemption from capital gains on farm land. There is no moratorium now, and there are still producers in the agricultural industry who are faced with forced sale prices. It is bad enough that the election promises were not fulfilled, but now we see men and women who have worked for a long time to build up their retirement stakes being taxed by the government under the budget of November 12.
I am sure the minister would like to see these changes. I hope he is successful in making them. The people of rural Canada, whether in the Atlantic provinces, central Canada or western Canada, need those changes if they are to retire with dignity and to pass along their farm land.
In 1979 there was an energy tax credit which would have assisted farmers in the production of food. It would have protected them to some extent against the increased cost of fuel used in production. This would have gone along with the 1979 increases proposed by the Progressive Conservative government, not the exorbitant ones proposed by the Liberal government which are being implemented immediately.
I notice that the minister talked about RRSPs in his speech. He will recall the proposal of the then minister of finance in the December, 1979, budget that there would be $100,000 for people to put into RRSPs; those RRSPs could have been put into farm credit now. The minister spoke of an investment of that type. It is something we look forward to seeing.
I hope I hear the answers I requested from the government side when the turn rolls around to them again, but in closing I should like to refer to the farm bankruptcy statistics between January and October, 1981. In the province of Nova Scotia there were 3; in New Brunswick, 3; in Quebec, 45; in Ontario from where the Minister of Agriculture comes, 126; in Manitoba, 12; in Saskatchewan, 18; in Alberta, 15; in British Columbia, 8, for a total of 230 bankruptcies. Those are 230 families, individuals, men and women, sons and daughters who worked to try to produce food for Canada and to contribute to
our national good. They tried to do something on their own, but we have let them down. I say "we" because there must be some co-operation among hon. members of all parties in the area of agriculture. The agricultural industry is so important to Canada and to individual families that we cannot allow something called politics to destroy Canadian farms.


Some hon. Members:: Hear, hear!


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, it is with great pleasure that I rise to speak to the amendments to the Farm Credit Corporation Act in Bill C-88. We have awaited this group of amendments for a long time. I am not sure why we have waited so long because in essence the amendments make the bill more general than it was. They allow for administration of the bill by means of regulation rather than by specific requirements in the bill itself. It loosens up the administration of the bill considerably. Therefore I fail to understand the argument of the Minister of Agriculture (Mr. Whelan) in his presentation as to the excuses for delaying the bill until after he had heard from one task force or another. They were excuses for delay so that he would have a so-called perfect bill, when in fact the bill is so general that it could have been written almost any time. It would apply to almost any day or age simply by the use of the regulations which are pertinent for that day or age.
I am somewhat disturbed by the minister's presentation of the bill. I feel he almost ignored the problem. Granted, he is dealing with a need for farm credit, but he has not been addressing, either in his policy statements and speeches across the country or in the House, what I consider to be the real problem in the area of farm credit. It is not a problem of inadequate credit. Probably more specifically it is a problem of a lack of adequate net incomes in the farming economy because of a lack of attention to other aspects of agricultural policy.
In order to finance agriculture adequately in the short run and to finance the reinvestment requirements of the industry to keep it up to date, net incomes in the long run must be adequate. The industry should be almost self-financing. It has seldom been, but it should be. When we look at net farm income figures, the outstanding farm debt, the value of farm capital, the cost of interest, and at the tables of Agriculture Canada, we see that from 1974 to the end of 1981 there has been very little change in realized net incomes in the country. They were $3.5 billion in 1974. In 1980 they were $3.3 billion. In 1981 we expected to make a little jump up to $4 billion, but the outlook for 1982 is that they will be down 15 per cent or 18 per cent. Basically net farm incomes have remained stable in a time when the value of the dollar has been eroded by more than half. In real terms, available net incomes to farmers are probably half what they were in 1974.
In order to overcome that shortfall, farmers have taken the only available route. They have done the only thing they could do to survive in business. Some of them have failed, but they have attempted to borrow money to make up the shortfall. The farm debt in 1974 was $6.9 billion. At the end of 1980 it was
January 28, 1982

up to $16.6 billion. In an effort to overcome the shortfall in net incomes, farmers have increased borrowings at a phenomenal rate. Because of other policies of the government and I suppose of this continent-because it is a copy of what is ongoing in the United States-along with increased borrowings and high interest rates, we see a very disturbing story of the cost aspects of farming with respect to interest.
In 1974 the total interest paid by Canadian farmers was $473 million. By the end of 1981 it is estimated to be $2,168 billion, which is something over five times as much just in the course of seven years. This was not the minister's expectation, if you go back and look over some of the speeches he has made regarding farm credit and farm income. I do not think he expected that. I think it is indicative of the kind of assessment which the minister has made of the problem. That has very much missed the mark on a solution.
For instance, the minister seems to have got it into his head around 1977, perhaps before, that the way to get out of this problem was not to attack directly the marketing problems that exist in Canadian agriculture, not to attempt to improve the stabilization program so that farm incomes could be maintained at income levels where farmers could refinance themselves, but rather to privatize the lending institutions, open up the banking system and thereby encourage the banking system to take up the slack.
On October 25, 1977, in a speech to the Canadian Bankers' Association at the Chateau Laurier, Ottawa, which was at a time when the minister was looking for something from the banks and not taking a very hard stance with them, he said:
1 take my hat off to banks and other interested financial organizations who are starting to get involved in long-term agricultural lending programs because 1 welcome progress. And this is progress.
That is what the minister said in 1977. In this connection he said that the annual amount of credit used by farms ranged from a possible $9 billion to $12 billion by 1981. The minister saw increased need for credit. He went on to say that he could not see the Farm Credit Corporation taking up that slack.
In fact, the estimate of credit needs was quite a bit off the mark. Instead of being $9 billion to $12 billion, it exceeded $16 billion by the end of 1980. We do not know what the figure is for 1981. Needless to say, no one expects it to be between $9 billion and $12 billion. The minister did encourage the banks to get into the market.
The minister had some rather harsh words in September, 1978, regarding the role which the Farm Credit Corporation was playing up to that time. Agriculture Canada on behalf of the minister issued a news release on September 28, 1978, which reads:
The Farm Credit Corporation is on the verge of being freed from the control of civil servants who don't know about farming. Agriculture Minister Eugene Whelan said Thursday.
Yet we have before us a bill that frees up the role of Parliament and presents to this House a generalized bill, and through it all of the decisions will be made by regulation. I
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suppose from the minister's attitude toward civil servants that the regulations will be written and proposed to cabinet totally by the minister, but I doubt it.


Eugene Whelan: We are listening to your representations.


Victor Fredrich (Vic) Althouse: The minister says that he will be listening to our representations.
Generally speaking, we have no major objection to the presentation of this type of bill. We understand that most of the governing of the country is done by regulation. We just do not appreciate the length of time being used as an excuse for slowness in introducing this bill. I think that such a generally worded bill could have been presented to the House much sooner. It changes very little. The actual changes are completely unknown to us. We will have to dig them out when we are in committee and watch for future announcements.
I return to the 1978 press release because it goes on to quote the minister as having said:
-he tried to get the change made when John Turner was finance minister but it wasn't until Jean Chretien took over last September that approval was given.
Now we have approval. That was the basis of the 1978 announcement. Approval may have been given, but the bill has wended its slow and tortuous way to the House through this process and has finally arrived. Although it has gone through a long, tortuous process, we welcome the fact that it has finally arrived.
It is hard not to make any comments about the slow process in light of the minister's attitude toward civil servants getting things done when it took the minister over four years to do something. Instead of carrying on with his self-image of being lean, mean Gene, we should more correctly start referring to him as "glacier Whelan". Glaciers make very imperceptible movements, which is what this ministry and certainly this bill have done.
We in our party have assessed the situation that faces Canadian farmers and Canadian agriculture to be somewhat broader than a need for more credit. While more credit is part and parcel of the immediate solution to turning the situation around, we think that the basic problem is still one of inadequate prices brought about, admittedly in part, by the kind of world pricing situation facing agricultural products all the time. Some things we can do something about and some we cannot. There have been a great many attempts by different nations to combine action, to set up what are sometimes called cartels, other times called agreements, and yet at other times called interstate arrangements, so that the problems of shortages and surpluses can be worked out between nations. At any one time in the world there is usually no great amount of surplus food. Surpluses and shortages occur in certain countries and certain regions.
With the right kind of co-operation, perhaps some day the world will establish a means of communication and transportation that will create pools or banks of food so that countries suffering from shortfalls will be able to draw from those banks. In the meantime, we note the slow progress that has been

January 28, 1982
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made in this regard. However, within the confines of our country there are certain things that can be done. For example, we can examine methods of improving the system of marketing so that farmers who produce the basic product are able to extract maximum returns from the marketplace. Very few of our commodities are structured that way, in part because of some of the difficulties arising from the British North America Act where jurisdiction over agricultural products is shared between the provinces and the federal government. So there has been and continues to be very real and jealously guarded jurisdictions. However, that has been overcome on a number of commodities and I think more effort should be made on those commodities that are not yet in a system of national marketing.
Along with the setting up of agencies to enable producers to extract the maximum return from the market, we have to be aware that, since prices are affected by world market conditions, some form of price insurance or price stability has to be provided agriculture if it is to be self-financing. I think improvements to existing stabilization programs are definitely required if Canada's agriculture is to continue to progress and recapitalize itself to face new challenges.
We have varying forms of crop insurance to cover natural disasters, which I think works moderately well. We should continue that and make certain it is updated to meet the full cash costs of production for those farmers in the position of losing a crop due to sudden weather changes. So we are saying that we do need an aggressive attack on the real problem, the price question which faces agriculture.
The need for credit is peripheral to that. We would not have a large shortfall of credit were there adequate incomes in the first place. However, because we are in this position and it will take a number of years to get ourselves out of it, we have been proposing over the last number of years, certainly since I have been in the House and I know my colleagues here before me have made similar suggestions to previous governments, that there must be a method whereby our agricultural resources can be turned over from one generation to the other, which method is self-generating and self-financing.
We have said on many occasions that there are some moves which this government could make to facilitate this. 1 wrote to the minister and the Minister of Finance (Mr. MacEachen) prior to the budget on a number of occasions, outlining suggestions to improve the credit position of farmers. These included a form of bond that would allow the retiring farmer to reinvest his money in farm credit bonds or some similar instrument, with the co-operation of the Department of National Revenue. We think there could be a great pool of funds developed for refinancing farm land by deferring the capital gains tax on the sale of land until such time as the retiring farmer has to withdraw his funds from the FCC in order to meet his retirement income needs. This would mean that the agency could have the use of that money for about two thirds or three quarters, probably two thirds, of the current interest
rate. This would be useful and acceptable to the retiring farmer and would make a great deal more money available to the beginning or expanding farmer. It would not cost the government anything except a little bit of deferred taxes, and would be a very useful and obvious pool of investment capital.
Added to that could be a program allowing farmers with particularly high income years to invest in that kind of bond on a similar basis, which would make further funds available to the FCC at much below market rates on the understanding that tax on that income could be deferred until drawn out for use by the individual. Neither of those options has been taken up; instead the government chose to present a bill which leaves the option open, but we do not know if it is there.
We wish there had been some announcement along with this bill outlining the government's intentions regarding the regulations, and where they intend to get the funds mentioned in the bill. I think we will be pursuing that in committee and 1 hope the minister and his officials will be prepared to discuss those questions there.
Without taking up a lot of the time of the House on this particular bill, I am going to attempt to review my impression of it so that we can go on to complete the debate as quickly as possible. As I said, this bill has been talked about for four or five years, both by this minister and the previous minister in the Conservative government. Some of the original reasons for presenting these kinds of amendments seem to be changing as the minister changes his mind about whether the banks are good guys or bad guys. However, we still have the opening, the way this bill is written, for banks to take over an even larger chunk of Canada's farm credit needs.
Those needs are not unsubstantial. As I recall, the banks are filling about 30 per cent of the total requirements, most of it on a short-term basis, along with a goodly chunk of the medium-term capital required. This bill appears to increase the capital available to the FCC so that they may now have up to $5.6 billion outstanding, up from $3.75 billion, or roughly a 50 per cent increase. From the way the bill is written it is not clear how much of that will be available soon or from what source. We do not know how much is private money or how much is public money. This kind of basic information is not available to us in the bill. I hope the minister and his officials will be able to give us some indication of that when it gets to committee.
Because we do not know the relationship of public to private money, it is very difficult to get an idea as to what kind of interest rates there will be. If we do go out strictly on the public market without using any of the provisions I have discussed in my presentations to the minister and to the Minister of Finance, I do not see how the public money will be able to reduce interest rates to the Farm Credit Corporation. The government may have a magic formula, and I would be very interested to hear how that particular program will work to bring about lower interest rates.
January 28, 1982

In fact, an interesting altercation took place on the radio noon show today. George Price the farm broadcaster, while hosting an interview on this very subject, asked a very fundamental question, namely, whether interest rates will continue to rise. One of the civil servants who had been identified as a vice-chairman of the Farm Credit Corporation, Paul Babey, began to say yes, but the minister interrupted to explain that they will not be rising. We will be interested to find out the various points of view concerning that matter when it gets to committee, as well.


An hon. Member:: Is the minister in charge?


Victor Fredrich (Vic) Althouse: Well, it is not certain. My colleague asked whether the minister is in charge. It is not certain just who is in charge at the moment. He was not going to leave it up to the civil servants, yet the bill seems to leave a great deal of it up to the civil servants.
We agree that the corporation should be increased to seven members. We support this move. Also, we have no objection to the ceiling on eligibility for loans being set by regulation. We think this will allow for more flexibility and will probably allow hon. members of this House and farm organizations to have as much leverage in decisions as we would if such matters went into a bill and were locked in for several years before the bill could come back to the House. We have no objection to that.
While I am standing, I wish to make note that it seems that some changes and broadening of the regulations have been made as they apply to Indian bands. There was formerly a ceiling of $400,000 on loans to Indian bands. Now this ceiling will not be set in the act itself but will be subject to regulation. I hope that regulation will make that ceiling a great deal higher so that Indian bands with substantial agricultural land to develop can take advantage of Farm Credit Corporation loans to do so.
I also note that, while there is only one mention of agricultural production co-operatives in this bill, and a similar kind of notation would be made by the minister and his officials, some production co-operatives need great amounts of capital, too. As long as co-operatives are operated by their members and shareholders, when regulations are being drafted consideration should be given to that aspect of agricultural production as well. It is a kind of agricultural production which is very often forgotten in regulations made here in Ottawa. I hope when it comes to making Farm Credit Corporation funds available that that form of agriculture production will not be ignored.
1 note that there will be some changes to the regulations and to the bill itself with regard to age limits on farmers. I would just like to take a moment to congratulate the hon. member for Selkirk-Interlake (Mr. Sargeant) for his work in getting the ceiling lifted on age 35. This was done through his discussions with the Human Rights Commissioner, Mr. Fairweather, who noted, upon reviewing the matter, that this was indeed a discriminatory clause. I think the intervention by my col-
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league, the hon. member for Selkirk-Interlake, had a great deal to do with the change in this part of the act.
Another aspect to this ceiling of age 35 in the bill is that a bit of sex discrimination was beginning to emerge in the Farm Credit Corporation as well. I hope the particular wording now contained in the bill will eliminate that. There were a number of instances where, because of the age 35 ceiling, a wife would make an application as the farmer and owner because she happened to be under age 35. In a great many of these cases there was much difficulty in convincing various officials that females could be farmers. I hope this aspect will disappear from the act as a result of this new wording and that it will not show up again in the forthcoming regulations.
In conclusion, I would just like to reiterate my initial comment that the farm income situation looks very grim. It is projected that in 1981-82 incomes will drop to the same level or slightly below the 1974 level. That is really a disaster because it means, in effect, a halving of farm incomes. It is no wonder that the thoughts and attentions of farmers have been directed toward the need for farm credit. The incomes generated on farms have not been adequate. This particular bill, this move to attempt to free up more funds through the Farm Credit Corporation, will assist; but I hope that the government and the minister will focus more attention on doing something about the real problem, the farm income problem, and will get on with programs for improved marketing and better stabilization which will bring us better net farm incomes.


Some hon. Members:: Hear, hear!


Mr. Normand Lapointe (Beauce):: Mr. Speaker, it is with great pleasure that I now speak to the amendment to the Farm Credit Act. The Canadian Farm Credit Corporation has been in existence for 22 years, during which period it has made about 147,500 loans totalling $5.1 billion. With its long-term credit programs it has been a major force in helping Canadian farmers to increase their production and efficiency during the last 20 years. The corporation has financed more than 60 per cent of long-term farm credit in recent years. The remaining funds were provided by provincial agencies, banks, credit unions and through private loans. Since 1973, the total amount of long-term farm credit has increased at an annual rate of almost 20 per cent, rising from $655 million in 1975 to about $1.9 billion in 1980. This trend is expected to continue, and it will therefore become increasingly important to ensure that the Farm Credit Corporation has an adequate and stable source of funding.
In 1980-81, the last year for which complete statistics are available, the corporation approved 4,686 loans totalling $508 million. A regional breakdown for the year 1980-81 shows that British Columbia received 175 loans totalling $21,597,000. Alberta had 640 loans totalling $71,739,000 and in Saskatchewan farmers received 1,346 loans totalling $128 million.

January 28, 1982
Commonwealth Caribbean



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 Erie (Mr. Fretz)-The budget-Employer contributions to medical and dental plans, (b) Employee loans; the hon. member for Kindersley-Lloydminster (Mr. McKnight)-Agriculture-National beef stabilization program. (b) Inquiry respecting consultation with Saskatchewan; the hon. member for The Battlefords-Meadow Lake (Mr. Anguish)-Mines and mining-Announced shutdown of mine at Uranium City, Sask. (b) Attendance of Eldorado Nuclear officials at standing committee meeting.

It being five o'clock p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper, namely, private bills, notices of motions (papers), public bills.
There being no items on the Order Paper under the heading of private bills, I will proceed with notices of motions (papers).


PRIVATE MEMBERS' MOTIONS FOR PAPERS
[Stage Direction]
Notices of Motions Nos. 22, 35, 1, 48, 28, 43 and 5 allowed to stand by unanimous consent.

[Stage Direction]
Mr. Hal Herbert (Vaudreuil), seconded by Mr. Irwin, moved:
That an humble address be presented to His Excellency praying that he will cause to be laid before this House, copies of all correspondence, telegrams, minutes of meetings and other communications during the last year, between the government and the communities of the Commonwealth Caribbean that relate to the exchange of commodities and technology, the exchange of students, tariff changes and other measures to improve trade, tourism and cultural exchanges between Canada and the Caribbean area.
Mr. Irwin:: Mr. Speaker, I withdraw my seconding of this motion.


The Acting Speaker (Mr. Ethier):: The motion will be seconded by Mr. Demers.


Mr. Herbert:: Mr. Speaker, I thought you probably picked the wrong individual to second my motion since the response is to come from the parliamentary secretary.
The motion originates back in July, 1980 when I was sent as a Canadian observer to the sixteenth Caribbean regional conference. However, my interest in the Caribbean goes back many, many years before that. I guess my first interest was when I visited Barbados many years ago after Trans-Canada Airlines had completed the airport on that island, the completion of which airport led to a substantial increase in tourism in Barbados and the resulting improvement in the economy of that island.
I personally was enchanted with Barbados. In fact, I termed it paradise island. I love the people, their attitude, and above all, I like the music. I mention the music because I will be referring to it in connection with another island in a moment.
I want to tell a couple of stories about Barbados which are pertinent. I talked to one of the barmen at the hotel where I was staying. He had been in Florida for some time. I asked him why he was working in Barbados at a much lower salary than he could get in Florida. He said it was simply because of the wonderful life, that there was a lot more in life than just earning a high salary.
I must agree with him because on that very happy island, when you look at the children very seldom do you see a child crying. They were always well dressed, particularly on Sunday. It was a pleasure to see them going to church on Sunday dressed in their finery.
I remember during my first visit there the emphasis on some of the social problems of these islands. As most people are aware, the majority of the inhabitants of Barbados in those days were what might be termed illegitimate. The church had gone to some length to try to get couples together to be married.
I watched a wedding ceremony. Along with the couple being married was a long line of their children. The observation was made to me that this couple was very brave. Because of their religious beliefs, they were getting married. In return, government assistance for their children was being cut off. As long as they were living in sin and their children were illegitimate, government assistance was available to them. When they got married, they had to start supporting their children. That is indicative of some of the problems in the islands of the Caribbean.
I have been very fortunate in the many years since, having been able to visit many of the Caribbean Islands from Bermuda in the north, through Bahamas and Puerto Rico, right through to the south, including the island of Cuba. I refer to Cuba because one cannot help but notice the difference in an island that is run by a dictatorship.
The first observation is that it seems as if one in three of the male population is in uniform. The difference in the music on that island is something that one cannot help noticing immediately inasmuch as it seems to be disciplined. It is almost as if the people who are playing are playing from music, which they
January 28, 1982

cannot do. They have never been taught from music. It is not the same rhythm. I attribute it to the conditions that pertain in that island.
I did observe while I was there that one of the things they are doing in Cuba is trying to provide a good education for the children. I visited the schools. I noticed the children were well dressed and well disciplined. I could not help but think that if that situation continues, in the years ahead the children in Cuba, because of the ease of communication with Florida and the southern states, will probably want to change the nature of the country in which they live.
Another one of my interests in the Caribbean of which 1 have spoken in this House on several occasions deals with the sugar industry. One knows that the giant controlling industry in the sugar business throughout the world is Tate and Lyle. It is installed in several islands including Bermuda, Jamaica, Guyana and Trinidad. I hope to speak in this House on other occasions, as I have done in the past. I am disappointed that the Foreign Investment Review Agency and the government have failed to enforce the regulation made by FIRA that Tate and Lyle divest itself of its interest in Redpath Sugars. Those two or three speeches which I made on this subject in the House are on record.
There are some very special problems in the islands of the Caribbean. The disadvantages of island developing derive from a combination of several characteristics of which the most fundamental and most easily identifiable factor is that of size of population and production. An inadequate reservoir of human resources, of potential producers, consumers or taxpayers to facilitate the attainment of self-generating development mitigate against development and, of course, give rise to serious communication problems.
Many Caribbean countries suffer from a limited and in some cases virtually non-existent natural resource base. Such countries are therefore more vulnerable to the disruptions caused by outside influences. Limited population and available land area inevitably expose a country to a greater extent to adversity, whether a natural disaster such as a hurricane or the incipient effects of brain drain.
Whilst I was in the British Virgin Islands in the month of July, 1980, I talked with a government representative from St. Lucia, Mr. Bruce Williams. He recounted to me how much the Island of St. Lucia is in need of assistance for development purposes. He pointed out that the Island of St. Lucia offers valuable incentives for hotel projects, condominiums, holiday villages and also industries. As he says, they enjoy seven years of tax holiday. He also pointed out, of course, that Canadians like St. Lucia, which is a bilingual country. After reviewing the figures which were supplied to me by the Department of External Affairs as well as representatives of the Canadian International Development Agency prior to my visit to the British Virgin Islands, I noted that our imports from the countries of the Caribbean outdistanced the value of our exports to those same countries by a ratio of approximately 2 to 1. I was studying the Commonwealth Caribbean countries of Barbados, Belize, Guyana, Jamaica, Trinidad, Antigua,
Commonwealth Caribbean
Dominica, Grenada, Montserrat, St. Kitts, St. Lucia and St. Vincent, and in almost all cases we import from these countries approximately $2 of goods for every $1 that we export back to them. This would indicate to me that we need to look at this imbalance and I suggest that could be beneficial to our own Canadian manufacturers.
On my return from the British Virgin Islands, I wrote to the president of the Canadian International Development Agency, Mr. Marcel Masse, and I stated that in my opinion there is no over-all reviewing body which looks at the total picture, including private and institutional activity and the efforts of the other major assisting nations, the United States and Great Britain. Such a co-ordinating or information-gathering body might affect the direction, amount or the form of aid which we have provided. 1 am particularly interested in education in the islands.
While in the British Virgin Islands attending the Commonwealth regional conference, I met a group of Canadian teachers who advised me that their federation was funded in part by CIDA. This item is not shown on any listing of aid for the Carribbean that I had received from CIDA prior to my visit to the Caribbean.
I put a question to Mr. Masse which said:
Of the 17 Commonwealth countries of which I understand seven are dependent, do you have a consistent policy as to which countries you are willing to assist, either directly or indirectly?
Mr. Masse stated in his reply:
In your recent letter, you made reference to the need for an over-all reviewing body which would examine the total picture of aid flows to the Caribbean region. By way of background to your inquiry, I should explain that there was in fact a major interdepartmental review made of the Caribbean region which was spearheaded by the Department of External Affairs. All aspects of Canadian interests were looked into as well as the levels of co-operation of other major donors. This review resulted in a document that is presently being considered by the government. It should assign objectives in a co-ordinated fashion to the various governmental organizations involved in the Caribbean.
A little further down in the letter he continues:
-I can only answer by referring to the interdepartmental review that I have mentioned above.
Thus, on December 8, 1980, while still awaiting the set of documents, I thought that the best step to take was to put a motion on the Order Paper asking for the production of documents of interest to persons looking at the situation in the Caribbean. This I did.
A month later, in January of 1981, I noted a rather interesting article in the Ottawa Citizen by Dian Cohen. She starts off by saying:
Consider these facts about the Caribbean:
300,000 Canadians vacation there each year.
$200 million in Canadian exports are destined for its tropical islands.
$400 million Canadian invested in enterprises there.
$35 million a year is given on our behalf by the Canadian International Development Agency to help West Indians become more affluent in their own countries.

January 28, 1982
Commonwealth Caribbean
Later in the article she goes on:
Could it be possible that our goodwill, our good money, our sophisticated technology and expertise are not being put to proper use? Is it conceivable that a prime reason why the gap between "rich" and "poor" is growing wider rather than narrowing is that our leaders don't know what they're doing?
On March 9, a headline in The Globe and Mail read "Problems still plague Caricom as defenders seek co-operation". On March 21, in The Financial Post there was a headline which stated "Canada can celebrate Antigua independence." It speaks of the Canadian banks in Antigua; the Royal Bank, the Bank of Nova Scotia, the Canadian Imperial Bank of Commerce, and it speaks of the garment industry which is Canadian, of the condominiums owned by Canadians, a paint factory and several hotels in which there is Canadian equity participation. It goes on to say:
All these are dwarfed, however, by the multimillion dollar public projects, including the construction of a new airport for C$10 million, funded by the Canadian International Development Agency, supervised by an official on loan from the federal Department of Transport in Ottawa-
Then the article continues:
Other CIDA projects are the extension and modernization of Antigua's telephone system, school construction and assistance in irrigation. The Canadian Executive Service Overseas is involved in setting up a new prison and rehabilitation system and the Canadian Caribbean scholarship scheme is involved in vocational training.

Mr. Speaker, since we are on the subject of Canadian aid in the Caribbean, I would like to say a few words about the very substantial contribution being made by CUSO. This body, which started out without any assistance in the way of public funds, now receives a large part of its main budget from the Canadian International Development Agency. In some islands in the Caribbean where Canada has no official representative, CUSO is the only visible Canadian presence. CUSO is a non-governmental organization which co-ordinates the recruitment of Canadians who are prepared to work in Third World countries, including the Caribbean area. CUSO workers include teachers, nurses, agricultural and horticultural experts, technicians, fishery experts and food specialists. Thirty-two CUSO workers are now on assignment in various islands in the Caribbean. This number includes nationals working in various projects administered by CUSO. However, CUSO is not exclusively concerned with the transfer of human resources.
During the past few years, CUSO has become well known for supporting self-development projects. Its programs focus on development and change instead of being a straight transfer of technology and staff. CUSO assignments involve a training aspect, and projects supported by CUSO are expected to involve, and to be initiated by the local population.
CUSO helps to set up local non-governmental organizations that eventually will be able to manage their own affairs without outside help. Especially in the smaller islands in the eastern Caribbean, where almost half of the population is under 25 and three-quarters of the local people are unemployed, CUSO is supporting local co-operative projects specifically designed to create jobs. Two examples are the farm co-operative in Grenada and the craft co-operative in Dominica.
CUSO's involvement in such projects covers every stage, from initial planning up to the production and marketing of the finished product. Aid is given in the form of funding, materials and human resources. Each project has an educational aspect that ensures the continuity of the main goal: self-sufficiency.
Although a large part of CUSO's main budget is funded by CIDA, CUSO also receives valuable contributions from other sources, including Third World governments and agencies that pay the salaries of Canadian experts and provide housing, volunteer workers in Canada who give their time and energy to recruiting and selecting CUSO workers, and finally, educational institutions across Canada that provide office space and help with the agency's administration. Finally, the body receives financial contributions from a number of pharmaceutical companies, radio and television stations and newspapers and periodicals. Thanks to these contributions, CUSO's costs in keeping an expert overseas are much lower than for a number of other agencies, including CIDA. I believe, Mr. Speaker, that there are agencies working in the Caribbean-
It was important for me to have some information from the government as to the way these various groups co-ordinated their activities.
If I have 30 seconds left, I want to refer to the committee report which was tabled in this House on December 8. As a result of reading that report, which was presented by a committee which was formed on March 18, 1981, I came to the conclusion that the information which the Department of External Affairs-I assume it was that department-was unwilling to provide to me was essential for a better understanding of the problems in the Caribbean. Thus, on December 16 of last year I asked that this motion be transferred, after waiting over one year-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. gentleman but his allotted time has expired.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I want to take just a few minutes of the time of the House to speak about this notice of motion for the production of papers, to urge the government to produce the papers requested by our friend from Montreal and perhaps to make a comment or two about that.
I believe we should have more freedom of information in this country. We should not be so nervous about providing information to the public and to Members of Parliament. That is only one part of what we must do to make this place more meaningful.
January 28, 1982

I cannot help but think that Parliament is not really working. As an institution it is not really working as it should for opposition members or for government backbenchers. I think we have to reform the rules of this place to make it much more democratic, to make it a place where Members of Parliament actually become legislators, rather than just rubber stamps for government policy or opposition members whose only power is to make speeches, and try to motivate public opinion so we can change the opinions of the executive or the cabinet. I hope Members of Parliament will speak in this House and lobby for some meaningful change. Of course, members of the government must be included in this effort as well.
If the government were to produce papers when requested and make things public, that would be one small step in a direction that is very important in terms of making this institution meaningful, making it work and making our work here useful and worth while to the Canadians who have elected us to this very honourable institution.
In terms of the issue itself, the hon. member who has just spoken referred to the importance of the Caribbean, and I cannot help but agree with him that it is a very important part of the world to our country. As we look at our own country, we see a country of many, many miles of tremendous resources, of mountains, lakes, streams, great prairies and great forest regions. We have almost everything we need in Canada, with perhaps one gereral exception, and that is a warm, tropical, southern climate. The United States has that. I suppose the southern part of China has that. The southern part of the Soviet Union has that, but that is really all we lack.


Paul James Cosgrove: What about Toronto?
Mir. Nystrom: Not even in Toronto do we have that kind of climate. The minister responsible for housing has a lot of hot air from time to time, but we lack that, and it seems to me that the natural place to make up for it is the Caribbean. We are not very far away from the Caribbean countries, and if we had a trading link with Caribbean countries which was more substantial, 1 think that would be something which would be of great benefit to us as Canadians and also of great benefit to the people who live in the many Caribbean countries.
The part of Canada this trading link would help the most would be the Atlantic provinces, Newfoundland and part of Quebec. That is the natural shipping route between Canada and the Caribbean. There are many things we produce in this country that people in the Caribbean could use. We produce many technological products. We have an aerospace industry and a telecommunications industry. There have been advances in relation to railways and aeroplane motors. We have expertise in hydroelectricity, forestry and so forth. We could provide many things to Caribbean countries to help them develop, to help them become more self-sufficient and more advanced, more developed and more prosperous as a society. In return, we could be importing much more from them. We could be importing things we cannot produce in our own country, such as tropical fruits, bananas and commodities of that sort. We
Commonwealth Caribbean
could be importing cotton, sugar and many of the commodities we now import from the United States.
Our trade policy puts too many eggs in one basket, the American basket. About 70 per cent of our trade is with the United States, and it is important that we diversify that trade. Of course, it goes without saying that the United States will remain our main trading partner. We are neighbours. We share a border stretching thousands of kilometres. It is very natural that we trade back and forth. But I think it is also very important that we do not build a store in this country to sell to one customer only, because when we have only one customer, we become totally dependent on the economy of that one customer. If the United States retrenches or becomes more protectionist, that will affect Canadians very drastically.
If we are to diversify our trade, the natural place to look is to an area of the world which, in terms of proximity, is very close to us, and that is the Caribbean, a part of the world which exports products we do not have. It has a tropical climate and exports tropical produce, and it is very close to us. I might also say that it is a part of the world which has two linguistic groups.

Many people in the Caribbean speak French. French is very widely spoken in Martinique, Guadeloupe, Haiti and, as the hon. member for Vaudreuil (Mr. Herbert) already mentioned, there are also many places such as St. Lucia where both French and English are spoken. It is very important for Canada as a bilingual country to have trade relations with countries that have a similar cultural badkground.

These are just some of the advantages of trying to escalate and improve our relations with the Caribbean.
Hon. members might remember that at one time a member of my party, Mr. Max Saltsman, then the hon. member for Cambridge, went as far as to suggest one cold winter day in the House of Commons, that we talk to representatives of the Turks and Caicos Islands about the possibility of their becoming a province of Canada. That idea was examined and pursued by officials of both the Turks and Caicos Islands and Canada. Without endorsing the idea or rejecting it, I think that just demonstrated that there is a natural affinity, a natural friendship and a natural pattern which should be pursued and encouraged in the two countries.
In this respect I think of Cuba. During the difficult years in the 1960s under the Diefenbaker government and the Pearson government, Canada continued to have diplomatic and trade relations with Cuba when the United States cut theirs off. I think that was very important. It is very important that we continue our ties with the Cubans in the years which lie ahead.
Before sitting down, I want to make one general comment about trade and why we should diversify our trade and our contacts with the Caribbean and other parts of the world. Up until now, in addition to being dependent on the United States we have also been very dependent on being an exporter of raw materials. I noticed just the other day, for example, that in

January 28, 1982
Commonwealth Caribbean
1980 we had a net surplus in terms of export of raw materials of $23 billion. On the other hand, we had a net deficit in terms of finished products or finished goods of some $18 billion. That is the worst record of any industrialized country in the world, Mr. Speaker.
We all know that resources are very important to us-in my province potash, grain, oil, gas and in Quebec, hydroelectricity and so on. In addition to all that, it is important in terms of jobs to diversify; it is important in terms of jobs to start processing and semi-processing more of our goods before they are exported, and it is important, in terms of jobs, to start doing some things that we can do ourselves and that other countries such as Japan, France, Germany and others in Europe are doing.
I think that in this country we are going to have to put a lot more emphasis on trying to become specialists in more areas such as processing our raw materials and on trying to export more processed goods.
In 1608 when Champlain first opened a trading post in Quebec, it was primarily to have a point at which to gather furs, beaver pelts and so on in order to export them to Europe. Unfortunately, we have not changed our trade policy very much since the days of Champlain. We must make changes if we are to survive in a highly competitive world market.
About 25 per cent of our work force has jobs which are related to the export market. We now have a big problem of unemployment in this country, in large part because trade is becoming more and more competitive. We are moving into the post-industrial age but other nations such as Japan, France and other European countries are moving faster. We will have to start scrambling in order to catch up, never mind moving ahead.
In conclusion, Mr. Speaker, I want to encourage the government to produce the papers requested by my friend from Quebec. I want to encourage the government to make public as soon as possible the plans the government House leader has for reforms of the rules of this institution so that MPs can be legislators and not just chronic bitchers and cryers and rubber stamps for government policy.
I should also like to encourage the government and Canada as a whole to continue expanding and improving our links, and trade with the Caribbean and with trade there. That part of the world can provide something that we do not have-a tropical climate, lots of sunshine and lots of produce from that sunshine. In return, that can help the economy of Atlantic Canada because of the natural shipping pattern that exists. As an industrialized nation with advanced technology, we could give people in that part of the world an extra boost to help develop their economies in the years that lie ahead.


Some hon. Members:: Hear, hear!


Ron Irwin: Mr. Speaker, I want to thank the hon. member for Vaudreuii (Mr. Herbert) for bringing this
motion before the House. The hon. member is not really complaining about the rules, as was suggested by the hon. member for Yorkton-Melville (Mr. Nystrom). He knows the rules very well, and the day we produce all the documents he wants is the day that he will have no opportunity to speak about the things of substance that he cares for! He talked about trade, aid, lack of information in general-and not specifically to him-about the Caribbean. He spoke about tourism, about sugar-he has spoken about sugar at least half a dozen times, and I thank him for that. The hon. member for Yorkton-Melville has a valid point about all our eggs being in one basket. In 1980, we did a total export business of $73.8 billion and a total import business of $68.7 billion. Of this, $46 billion of export was with the United States and $48 billion was import business with the United States. Approximately $90 billion business was done with the United States last year. If there is a criticism of Canadians in general and not just governments, it is that we must treat the Caribbean and South America much more seriously than we have to date.
I should like, first of all, to look at the broad problem of what is happening in the world. The foremost problem is poverty, and this is shown by what is happening in the Caribbean and South America. The poorest country is Haiti where the gross national product per capita is $260 per year. The 2.5 billion of the world's poorest people depend for almost all their energy needs upon wood and agricultural residues. Of the world's 150 countries, 100 consume more food than they produce. At the present rate, the world's forest cover will be halved by the year 2000 because we are cutting the forests down for fuel and energy-things that they should not be used for-because better sources of energy have not been developed in these various nations.
By the year 2000 there will be two billion more people on this planet. We spent almost a year on the Constitution and perhaps we are inclined to forget the reality of the rest of the world until we see that each year 15 million children under the age of five die, mostly from water-borne diseases. Next year 15 million children will die for the same reasons. Three quarters of the world's population consumes 15 per cent of its commercial energy, and 90 million people in the world are short of firewood.
The parliamentary task force on North-South relations recently issued a report in which it dealt with the 800 million people who live in conditions of absolute poverty. The criteria of absolute poverty are unbelievable. It means that only four out of ten children complete more than three years of primary school. Of every ten children born, two die within a year, another dies before age five and only five survive to age 40. A child that contracts measles has a 200 per cent more chance of death than a Canadian child.
The task force report has the following to say:
Half of those people live in south Asia, mainly in India and Bangladesh. A sixth live in east and southeast Asia, mainly in Indonesia. Another sixth are in sub-Saharan Africa. The rest-about 100 million people-are divided among Latin America, North America and the Middle East.
January 28, 1982

It is ironic that in the second paragraph on the same page the report states "some $500 billion is spent each year for military purposes." Yet so little is spent on important things such as shelter, food, and economic stability.
Why should our policy regarding the Caribbean be different from that of the United States? Sometimes I think that the United States has had so much trouble in the last number of years when it has been picking losers, that we should let them choose first and then pick the other side!
Our major contribution in the Caribbean so far has been tourism. Maybe that is why there are so many experts on the Caribbean in Canada who know so little about it.
For certain valid reasons we are moving out of the Caribbean. For instance, we are going to Australia for aluminium. The main reason, however, is that this country had had two decades of easy times in trading with other countries. What has happened in the last ten years is that there has been an increase in exports with Third World countries from $1.7 billion to $8.8 billion, while with the Commonwealth Caribbean the increase has been from $123 million to $286 million. In other words, the increase has been fivefold and sixfold with Third World countries but only double with the Commonwealth Caribbean.
In our travels through Caribbean countries we were told repeatedly that we were not competitive. We were told that our businesses were shifting to the more affluent industrialized areas such as Brazil, Venezuela, Mexico and perhaps Argentina and Chile, and that in areas where it is difficult to operate, Canadian businessmen have folded their tents. Prior to what was done this year, it was almost embarrassing that Trinidadian aid in 1980 to the Caribbean was greater than that of Canada-aid from a little country like that!
I think what was said by the hon. member for Vaudreuil was absolutely accurate. The fault is that we require more information. We may have to bring in trading companies and credit mix. We may have to provide more money and more facilities for Canadian businessmen dealing in that particular area. We may need more face-to-face discussion with government officials. We need much more education on what is happening in the southern half of this great area.
Let us look at the United States policy. The United States has had almost a disastrous two decades of supporting governments which have fallen. In the process there have been some atrocious governments. In 1953 or 1954, I was in Cuba and saw the combination of Batista organized crime and United States interests in Cuba. It was wrong then for the United States to support that regime. Canada was wise in not getting involved in that decade of hate which evolved around Cuba. Canada was wise to keep its dialogue open with the present administration. In 1979, the United States received at least half a dozen jolts. In Nicaragua the Somoza regime was replaced by the Sandinistra regime. In Grenada, Eric Gairy was replaced by the new JEWEL movement. In Surinam there was a semi-leftist coup. On top of this, Iran erupted and
Commonwealth Caribbean
finally, just recently, there was the assassination of President Sadat in Egypt. The Rear Admiral and Naval Commander of the Caribbean, Robert P. Mackenzies, said that Nicaragua, Grenada and Cuba were "practically one country". Consequently the United States policy is different from ours. It is to provide direct aid to a specific country which fosters direct United States interest, usually business. This is why Canadians are so well accepted in the Caribbean-we have no colonial aspirations; we do not support governments for philosophical reasons resulting in profit; we support governments in the Caribbean because we think it is right. This is why we are ad idem with Venezuela.
At the present time Venezuela is the only major democratic option to Marxism and communism in the Caribbean. Prior to Venezuela becoming interested in the Caribbean and starting to expand, what did poor people do? They either lived in poverty and their children and grandchildren lived in poverty, or they resorted to guerrilla tactics and civil war. There was no other option except Cuban exploitation. They either lived in poverty and stayed there, or they aligned themselves with Cuban export of guerrilla warfare until Venezuela started to export not only philosophy but a few dollars, along with Trinidad and Mexico.
Last year the Secretary of State for External Affairs (Mr. MacGuigan) reported to the CARICOM ministers in Jamaica that we would give the Commonwealth Caribbean priority status. After the conference he indicated that there were certain countries which would be targeted by Canada. He specifically named countries such as Venezuela. In the interim we have done everything to try to build a connection between Canada and Venezuela. I do not think we should kid ourselves; because we talk of the Caribbean here and talk of our importance there, we are not that important yet. We should be, but we will not be unless we make the effort. Also the minister announced a framework. The major elements of the framework announced at the CARICOM conference were as follows:
All countries in the Commonwealth Caribbean, regardless of level of development, will be eligible for Canadian development assistance, with special attention on the LDCs of the eastern Caribbean.
LDCs refers to least developed countries. They continue:
Canadian development assistance will focus on the promotion of sustained economic growth and development.
With self-reliance of the recipient countries, the ultimate objective:
(a)	Canada will increase its ODA levels in real terms;
(b)	increased levels of technical assistance will be provided for economic and financial management in the public sector and for improving private sector management and productivity;
(c)	increased support for industrial co-operation will be given;
(d)	at the regional level, Canada will focus on supporting the Caribbean Development Bank, on essential common services, where appropriate, and on regional institution building and co-operation including that with CARICOM.
What does this mean? In dollars and cents it has some meaning. For the fiscal year 1981-82, we will almost double our assistance to the Caribbean to $55.3 million. This will be in addition to the $6 million already announced for Jamaica in support of its economic recovery program. Funds will be used

January 28, 1982
Commonwealth Caribbean
for specific countries as follows: Barbados, up to $2.6 million; Belize, up to $1.5 million; Dominican Republic, up to $2.3 million; Guyana, up to $7.5 million; Haiti, up to $7.2 million; Jamaica, up to $10 million; Leeward and Windward Islands, up to $11 million. The funds to the Caribbean Development Bank will be up to $4.3 million. Industrial co-operation will be up to $2.5 million. Non-governmental organizations will be up to $4.5 million. Our total aid to the Commonwealth Caribbean will be $43 million, which is more than double what it was last year.
We will also be providing bilateral assistance as follows: up to $30 million for Guyana, up to $41 million for Jamaica, up to $44 million for the Leeward and Windward Islands, and up to $25 million for Barbados and Belize. Also Canada will provide non-bilateral assistance to the tune of $85 million which will be administered through the Caribbean Development Bank.
It is important to treat each one of these sectors as individual sectors. There is a misconception among Canadians that Caribbean people know each other well. The truth is that they do not. Many of these countries are large islands and are more familiar with the United States than they are with their neighbours. We must develop a separate policy to fit in with the culture and the economy of each individual area. Within the remaining time I will try to run through some of these countries. I will start with El Salvador. Right now the option which the president and the people of El Salvador have is either to try to become democratic with the aid of countries such as Venezuela, or to succumb to another revolution. I find it rather humorous that we in the House try to impose our democratic standards on a country that has not really had an election in over 50 years and in which there is civil insurrection. I think some of the members who are really attacking the electoral process that is evolving in El Salvador are more interested in getting headlines in Ontario than they are in the welfare of that particular country. They do not really understand. There is only one man there standing between the country and another dictatorship, whether it be a communist one or the normal type of dictatorship which the people have known in these regions of the Caribbean and South America, and that man is President Duarte. President Duarte has been a democrat for over 20 years. He was a mayor and he was a member of the opposition. He is president of El Salvador. On his right side he has the army and the rich and on the left side he has the poor and the guerrillas. In this House we repeatedly attack the government of El Salvador, which is really President Duarte. We do not attack the right or the left. We attack the only man who has a chance of bringing a democratic process into El Salvador.
I do not know one member of this House who deplores the fact that 26,000 people have been killed in that country or who deplores the instability in El Salvador. I think we should, as former prime minister Lester B. Pearson once said, bury our differences at our waterline when it comes to our foreign policy. We are not doing that. Consequently, by attacking
what President Duarte is doing, we are not really espousing human rights there or in any other place in the world.
Venezuela is probably our most important partner in the southern hemisphere economically. We exported to them $641 million worth of goods last year, but we imported from Venezuela over $2 billion worth of goods. I think our Canadian businessmen should be much more aware of that imbalance. They should be prepared to go to Venezuela to sell our goods with the help of the Canadian government. Venezuela needs wheat. Is it not odd that a country we traditionally think of as being rich in agriculture cannot support itself for such reasons as that it has no water or that the weather is too hot? This also applies to the Bahamas. Venezuela needs pigs. We sell pigs, but we do not sell pigs to Venezuela. Venezuela needs certain technology, but we are not selling that to them. Meanwhile we buy $2 billion worth of goods from Venezuela, an ally with whom we agree philosophically. I think the parliamentary task force report dealing with trade is completely accurate. This report of the Special Committee on a National Trading Corporation, issued June, 1981, stated:
Canada has only a minimal position in many of-


The Acting Speaker (Mr. Ethier):: I regret to interrupt the hon. member, but the time allotted to him has expired.


Mr. Gordon Taylor (Bow River):: Mr. Speaker, it appears that I have only four minutes in which to speak, the last speaker having gone one minute over his time. I want to deal with the motion. I cannot understand why the parliamentary secretary did not deal with the motion instead of telling us all the things he did. The motion is simple. It asks for the production of papers and communications during the last year between the government and the communities of the Commonwealth Caribbean relating to the exchange of commodities and technology, the exchange of students, tariff changes and other measures to improve trade, tourism and cultural exchanges. But the parliamentary secretary did not say one word about any of that. Why is the government refusing to give us this type of information? Surely to goodness Canadians, particularly members of the House, are entitled to this kind of information.
The parliamentary secretary tells us that we will continue to give to the Caribbean area $55 million, $6 million, $43 million and $85 million. He did not say one word about what we are getting for this money. He did not tell us what is being produced. He did not say anything about the extravagance or waste. He did not say anything about the low interest we are charging or indeed if this money is being given away while Canadians have to pay high interest rates. Why is the government not giving us this information? Is the government afraid to do so? Is it because the government is being extravagant? Is it because the government is giving this money and nothing is resulting?
The members on the other side of the House are saying that they live in absolute poverty, yet they live in a climate where

production could be high. Why does Canada not make sure when making contributions to these countries that the money is used to increase production and not used as welfare purposes? That is what Canada should be doing. Why are we granting low-interest rates to these countries and yet charging high interest rates to Canadians? Even our own Indian band councils cannot get money at these low rates. Why does the government not answer questions? Is the government afraid? The government is refusing to give us the information and, therefore, people have to reach their own conclusions. Some of the information I have seen in information sheets from the Secretary of State for External Affairs (Mr. MacGuigan) and from CIDA indicate that in many cases the money is being wasted. What about Grenada? Two hundred thousand dollars was spent for a garage in Grenada. What are we doing? We are helping a military build-up so that the communists can step in and get along a lot better. I am not in favour of helping communists in any country. I am in favour of helping people to help themselves. We should not give money away at low interest rates while charging high rates to Canadians. What about these amounts of $55 million, $6 million, $43 million and $85 million? The parliamentary secretary brags about this. But I want to know what the government is doing with this money. What good is it doing? Are we simply handing this money out as a gift from the people of Canada? Why does the government not answer the questions? What is the government afraid of? That is what I would like to know. That is what the people of Canada would like to know.
I am not going to talk this bill out. I am going to give hon. members over there a chance to vote in favour of this bill. If they had any guts, they would force the government to provide this kind of information.
[ Translation]


Mr. Pierre  Gimai@: Mr. Speaker, I am pleased today to speak about such interesting countries, the Commonwealth Caribbean Islands. I might add that I am not at all surprised that the hon. member for Vaudreuil (Mr. Herbert) should show interest in those countries, all the more so since the Caribbean Islands are much closer to us than we think. Of course when Canadians think about the West Indies they dream of sun-drenched beaches. Mr. Speaker, we should not forget-


The Acting Speaker (Mr. Ethier):: Order, please. The hour allotted for the consideration of private members' business having expired, I do now leave the chair until eight o'clock.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Farm Loans


[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.
Mr. Deputy Speaker:: Order. When the debate was interrupted at 5 p.m., the hon. member for Beauce (Mr. Lapointe) had the floor.


Normand Lapointe: Mr. Speaker, I would like to resume my comments on the amendment to the Farm Credit Act as I was then explaining that during 1980-81, which is the last year for which full statistics are available, the Corporation approved 4,686 loans amounting to $508.8 million. For example, British Columbia, Mr. Speaker, obtained 175 loans amounting to $21,597,000. Alberta 640 for a total of $71,739,000. Saskatchewan, 1.346 for $128,456,000. Manitoba, 470 for $47,052,000. Ontario, 1,084 for $138,308,000. Quebec, 742 for $80,961,000 and the Atlantic provinces, 229 lor $20,769,000.
Mr. Speaker, the Farm Credit Corporation also has outstanding loans under the Farm Credit Act of March 31, 1980. In this regard, British Columbia accounts for $111,440,000, Alberta for $594,533,000, Saskatchewan for $876,686, Manitoba for $306,275,000, Ontario for $917,487,000, Quebec for $413,587,000 and the Atlantic region for $81 million. Mr. Speaker, the purpose of the Farm Credit Corporation is to help as many young farmers as possible, and in fact, the majority of approved loans are granted to people under 35. Their share has remained relatively constant at 70 per cent in the last three years. Indeed, 3 per cent of all approved loans were granted under the special loans program for new farmers under which the borrowers can keep an outside full-time job for up to five years while they get their farm operation under way.
As for the purpose of the loans, about 27.9 per cent of those approved last year were used to purchase additional land compared with 29.8 per cent the previous year. Other loans can be classified as follows: 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 of farmers has remained favourable in 1980-81. Of the $75.2 million due during the period, 89.4 per cent has been repaid and the farmers have also repaid $52.2 million on the undue principal. During the year, 91.9 per cent of the $279.1 million in due interest was paid. At the end of the last fiscal year, 93 per cent of the active accounts of the

January 28, 1982
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Farm Credit Corporation were in order compared with 93.2 per cent the previous year. Real losses on these loans amounted to $1,537,000, or 1.4 per cent of the portfolio of the FCC.
During the current fiscal year, from April 1, 1981, to January 15, 1982, the Farm Credit Corporation approved 4,328 loans for a total of nearly $429 million. According to the estimates, the total budget for this year will reach nearly $455 million. We can only give approximate figures since an important part of the total budget of the corporation is made up of reimbursements or advanced payments by the borrowers.
Up to this point for this year, the major purpose of the loans seems to be the purchase of additional land, closely followed by the purchase of new units. Flowever, the number of loans for debt consolidation purposes has increased markedly because of the crisis triggered by high interest rates which reached 24.8 per cent on March 31, 1980, and 27.1 per cent on September 30, 1981.
The FCC is quite aware of the fact that the profit-earning capacity of credit is directly related to a borrower's managing ability, and that tight management of a farm has never been more important than over the past few years, because of the instability of interest rates. That is why it also provides a counselling service on a voluntary basis to all borrowers, old and new, who apply for it. The purpose of this service is to give advice in the areas of organization, planning and management, and thus help families living on farms to achieve their economic and individual objectives. As of December 1, 1981, some 3,025 borrowers were availing themselves of this service.
The corporation also administers the Farm Syndicates Credit Act which makes loans to farmers who are willing to join forces to beat the high costs associated with the individual purchase and use of machinery, equipment and buildings. Loans are made available to syndicates of three or more farmers up to $100,000 or $15,000 per individual farmer, whichever is the smaller. In 1980-81, the FCC lent $4.8 million to syndicates, representing 169 loans. Between April, 1981, and January, 1982, it lent them $5.4 million, representing 171 loans. Therefore, there has been clearly a marked increase in the demand for this type of loan over the past few years, and it is due especially to the rising cost of sophisticated farm implements.
In this respect, I cannot help but think about my own riding and the way this new amendment should help the farmers of the Beauce region who are so close to me. Being a farmer myself, I am one of them. I am proud of my constituency which accounts for 40 per cent of all the maple syrup produced in North America. I am sure that with this new amendment and the new Crown corporation Canagrex, we shall be able to export the maple syrup of Beauce. That will be of interest not only to Beauce but also to neighbouring ridings, such as those of Levis, Bellechasse, Montmagny, Megantic-Compton-Stanstead and Frontenac which are not far from mine. To my mind, it will be a very good thing for all those farmers and maple syrup producers, Mr. Speaker.
Last week, I had the pleasure of welcoming to my office a great friend of mine, Mr. Victor Poirier, chairman of the board of maple syrup producers of Beauce. He told me that there still remains to be sold on the market in Beauce some 468,000 pounds of maple syrup. They are still on tap, as we say in Beauce. Well, with the new amendment and the new Crown corporation to be known as Canagrex, I feel sure that our producers in Beauce will be happy to learn that the Canadian government has decided to establish the Crown corporation of Canagrex and that in the future we can sell our syrup outside Quebec and Canada. Then, we of the Liberal party, will be able to tell the people in Beauce, in Quebec and across Canada that the Crown corporation Canagrex is a wonderful thing not only for our own farmers and maple syrup producers in Quebec, but for all farmers throughout Canada.
It is all very well to discuss all that, but something else must be kept in mind: from time to time we also have bankruptcies, and I would like to say a few words about that tonight. I am increasingly concerned as well as the farming community about the fact that from 1979 to 1980, the number of farm bankruptcies has increased from 124 to 222. There have been 261 in 1981, a 17.6 per cent increase over last year. As I said, I hope Canagrex and the amendment will bring about significant improvements. In 1979-80, 32 FCC borrowers went bankrupt compared to 56 in 1980-81. As of January 1, 1982, 70 FCC borrowers had already gone bankrupt. The government certainly recognizes the seriousness of this situation, knowing full well that official bankruptcies are only part of total farm failures.
1 have already suggested that the Farm Credit Corporation should help farmers in distress through counselling assistance. The government itself provided further assistance to those farmers by setting up a special financial assistance program for farmers last November. This $50 million program enables the corporation to make loans to farmers unable to get a Small Business Development Bond from chartered banks. The corporation charges its current 16% per cent interest rate, on those loans, but it also grants a yearly interest rebate equivalent to 5 per cent up to two years. In some cases, the FCC loan must be combined with the Small Business Development Bond, the SBDB, because the farmer needs large sums of money to recapitalize his debts. In such cases, the corporation co-operates with the private sector in the best interests of farmers. In so doing, the government shows its concern for the precarious position of some farmers and its willingness to take concrete steps to help them. Since the program was set up November 12, 1981, the Farm Credit Corporation has approved 89 loans, for a total $11 million, as of January 15, 1982. It is expected that the funds earmarked for the program will be all spent by March 31, 1982.
January 28, 1982

This legislation is a further step toward improving the financial situation of Canadian farmers. The important amendment to the Farm Credit Act that will grant the corporation authority to tap the financial market for funds will enable it to meet the credit needs of farmers adequately.


Stanley James Korchinski: Mr. Speaker, I listened with some interest to the remarks that were just made. Unfortunately, they were not in the language in which I am fluent. However, I did understand that there is a lack of funding in the hon. member's province.
During the course of my visit to my constituency, I was told by my people that the farmers are very sadly disappointed. The government knows the problems of the farm community. It knows that the income in the farm community translates into incomes in other areas. When the farmers are prosperous, they are able to purchase new farm machinery, which in turn assists that industry.
Farmers are not greedy. It is through their efforts that we have food. Therefore, it is very disappointing that I have to speak on their behalf because of their need for additional money. They are making a desperate appeal to a government that will not listen. Why? Because it is this government which has brought in the present inflation. It is trying to restrain the farm economy in the same way as it is restraining other sectors of society.
One of the areas selected by the government was, unfortunately, agriculture. I saw an ad in the Western Producer, which I do not have with me at the moment, advertising a farm for sale at $1,600,000. Therefore, what good will $50 million do in a situation like this? The funds in the office in Tisdale will be drained with three such applications.
1 have an office in Tisdale which 1 visited during the Christmas recess. When I asked the girl in the office what they were doing, she replied "Biding our time". 1 asked her what 1 could do or what kind of message I could take back to Ottawa. She said, "Get more money."
The minister thinks he is being responsive. I am saying he is not doing anything when three applications will drain the funds of that office. That office might as well be closed.
How do I go back to my people and ask them to transfer their land? What is a transfer? It no longer means a couple of hundred thousand dollars. Because of the tax measures brought in by the government, people are so screwed up they do not even know how to transact business between family members.
What are we doing here? We are wasting our time. The Minister of Agriculture (Mr. Whelan) should be ashamed of himself for perpetrating such a farce. He knows that $50 million does not mean anything with today's rate of inflation.
I again ask the minister to look in the Western Producer where there is an ad for a farm for sale at $1,600,000. That is the kind of money we are dealing with, yet the minister is
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coming through with $50 million. Does he for one moment think that three applications will satisfy the people of my constituency? Nothing of the sort will satisfy them. You are a farce. You are a phoney.


Mr. Deputy Speaker:: Order, please. I call to the attention of the hon. member that his remarks should be addressed through the Chair. I am sure the hon. member will address himself accordingly.


Stanley James Korchinski: Yes, Mr. Speaker, I will address them through the Chair.


Mr.   de Corneille@: Mr. Speaker, I was trying to bring to your attention the point which you were making, that the hon. member was not addressing the Chair, he was addressing the minister.


Mr. Deputy Speaker:: The Chair has already brought this to the attention of the hon. member.


Stanley James Korchinski: Mr. Speaker, 1 agree that I should have addressed it through you. Through you, I say it to the minister. If that will take a little longer to get through to him, then I will wait.
If you think for one moment that those people out there are waiting for some kind of an answer from this minister, then you most know that they have lost hope in this minister. I say to him, through you, Mr. Speaker, that we made several proposals to him. I made a proposal some time ago, long before the Minister of Finance (Mr. MacEachen) brought down his budget, that there is a way out of this dilemma. I will repeat it as concisely as possible for his benefit. If he had presented my proposal to cabinet, he would have found a way out of this dilemma. But he lost his bet. The minister alone could have gone to the Prime Minister (Mr. Trudeau) and told him that there is a way out of this situation.
I will repeat this solution to him once again. If and when a farmer is selling out, he does not want to be taxed on the whole price. I know, as a farmer myself, that he will accept 10 per cent, 11 per cent or 12 per cent. If the minister puts these funds to use for the benefit of other farmers-and the minister should listen to this very carefully-then the minister can tax them at that rate. Does the minister for one moment think that I, as a farmer, will throw my money into a fund for other farmers just to discover that the greedy Department of National Revenue will just gobble it up?
The minister has a way through his own administration to charge the farmer just that limited amount, and he will find that he will have a fund so large that he will not know what to do with all the money. I say to the minister: do it in the way I have suggested and in the way our party, through our spokesman, the former minister of agriculture, has suggested. I ask the minister to listen to me and all others involved in this debate.

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Finally, I have just a simple admonition to make to the minister, through you, Mr. Speaker, that the farming community, as do other areas of our business community, deserves attention at this time. 1 say to him that he should talk to his leader and make a proposal to him. He should tell him that there are funds available, including mine. I have a farm I could sell tomorrow. I do not know to whom I will sell it, but I want it to be turned over to a young farmer who wants to start his own business. 1 have three sons who may or may not be interested in agriculture, but there are neighbours of mine who are interested and I want the minister to take the bull by the horns and pick up the funds which are available and do it for the benefit of those young farmers.


Mr. Leonard Hopkins (Renfrew-Nipissing-Pembroke):: seen that in recent months-and insulates the farmer in times of crisis such as periods of fluctuating interest rates.
It is my firm belief that this type of loan must continue to be offered to those Canadian farmers who need it to remain viable. Access to the financial markets may mean that the Farm Credit Corporation will also be able to offer mortgages with interest fixed for shorter terms such as ten years.
The Farm Credit Corporation also plays a vital role in ensuring that all Canadians have access to the advantages offered by a national program. Regional differences can make it more or less attractive for commercial lending institutions to extend credit in a given area. Higher returns can often be obtained by placing their funds in other areas or economic sectors.
The Farm Credit Corporation brings a strong national influence in the field of credit. In areas without provincial credit programs the FCC is almost the only source of financing for young people who want to start farming.
When an organization is established with a clear and distinct mandate, its mission is clear. The Farm Credit Corporation exists for the primary purpose of providing long-term farm credit and advisory services in order to develop viable farm operations. Its programs are therefore sensitive to the needs of farmers and to agriculture. Repayment schedules are tailored to meet the income-generating cycles of production.
In times of serious difficulties in a particular industry a borrower can make arrangements to defer his payments up to two years.
The FCC's philosophy in the administration of its loans is flexibility and service to the farmer. Credit advisers spent hours working on solutions to repayment problems^ and the corporation fosters a lenient collection policy. In making over 70 per cent of its loans to young farmers, the FCC also accepts considerable risks.
Because commercial lending institutions deal primarily with farmers who have an established track record and are regarded as commercially acceptable credit risks, young people-in this case those under 35 years of age-beginning farmers and small farmers are excluded from commercial sources of longterm farm credit. Their exclusion has important policy implications, as it is these farmers who will play an important role in the future of agricultural development and the attainment of the potential envisaged by the agri-food strategy for Canada. Because agricultural production is based almost entirely on the family farm structure, entrants into the sector must be encouraged if the agricultural sector is to maintain or improve productivity levels.
Because of the additional risks in agricultural production, a higher equity ratio is normally required to survive than for other types of businesses. In addition, farmers, like other small businesses, do not have access to debt or equity markets which are available to large businesses. Beginning and small farmers are at an even greater disadvantage than established farmers because they have much less equity and are considered to be too great a risk by commercial lending institutions. Recogniz-
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ing these factors, the risks faced by farmers and the unique credit needs of agriculture in general, most developed countries in the world have specialized agricultural credit programs with preferred terms and preferred conditions.
The Farm Credit Corporation is the government's way of showing its confidence in an industry which, over the years, has proved time and time again that it can, and will, pay its own way. Statistics on arrears and defaults are proof of this.
The FCC also plays a significant role in the transfer of family farms. Without sufficient long-term government credit, the intergenerational transfer of farms will be jeopardized. Out of the total Canadian labour force, those readily available to work in that sector or those wanting to become primary agricultural producers are generally those who have practical farming knowledge and experience. These are usually the sons and daughters of farmers. Without a mechanism by which they can take over the family farm, which is the unit on which Canadian agricultural production is based, human resources required for agricultural production could diminish, resulting in the possibility of decreased productivity of the agricultural sector.
One of the strengths of an organization like the Farm Credit Corporation is the calibre of its staff. I would like to pay a compliment to them. FFC personnel are trained in agriculture and farm management practices. The great majority are sons and daughters of farmers. They are familiar with the needs of the industry and have been trained in advisory services to help the individual applicant.
In 1980-81, 204 credit advisers, these are the front line staff, conducted more than 57,000 interviews in the selection of loan applicants or the administration of loan accounts. The Farm Credit Corporation was only able to approve 17 per cent of the applications received. This represented over half a billion dollars in loan funds, which is a considerable sum. But it is my firm belief that the amendments tabled by the Minister of Agriculture will bring much needed support to the Farm Credit Corporation in its mandate to provide even more assi-tance to Canadian farmers.
The increase in the amount of money that will be made available at a lower rate of interest will go a long way to help promote this.
We all know, Mr. Speaker, that if the farm community is healthy financially, that means that the implement dealer is healthy, the local car dealer is healthy, and the local stores are healthy, and so on down the line.
In conclusion I should like to say that we can never cease to bring forth constructive and useful legislation which will encourage and help farmers to use the initiative that they have demonstrated over the years to build a healthy agricultural community. We must ensure that they will receive a fair return for their products and a fair return on their investment, which is very substantial.


Some hon. Members:: Hear, hear!
14442

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Mir. Gordon Taylor (Bow River): Mr. Speaker, 1 am delighted to have an opportunity to speak on this bill and on agriculture generally, because agriculture generally revolves around credit and income.
I should start off by saying that this bill is certainly no panacea for farmers in this country. It is a step forward but it does not touch the real problems of agriculture in Canada. The real problem, of course, is that farmers do not receive an adequate net income compared to the expenses that they incur.
For a number of years, farm income has remained somewhat stable but the cost of machinery, the cost of transportation, the cost of labour, the cost of everything that the farmer buys has gone up. There has been a constant wearing away of income to the point that it is not now adequate. In the last year, hundreds of farmers who might have been called reasonably well off found themselves in a very bad cash flow position. They may have assets but they do not have the cash to meet everyday expenses. This is a serious problem. Those who have not been farming for a long time have been in a serious position in that they did not have the cash flow and so were not able to get credit.
I want to deal with some items in the bill but I do regard it as a step forward. I will deal with the principle of a number of items. I am happy that the definition of agriculture has been broadened because I think it was too restrictive previously.
1 should like to pay tribute to the officers of the Farm Credit Corporation in Alberta. I do not know the officers in other provinces but Mr. McEwen in Calgary and Mr. Jones in Edmonton carry out an excellent public relations program. They talk to anyone who wants to talk to them about these things and they explain whether they can or cannot meet the application of a farmer. I believe that the farmers of Alberta appreciate that.
Such officers should not be confined to a definition of farming because they know, better than anyone else in the country, what farming is in that province. The former definition held that farming included livestock raising, beekeeping, dairying, fruit growing and all tillage of the soil. That was a fairly wide definition but certain items were not included. I prefer the new definition which incudes livestock raising, beekeeping, dairying, fruit growing, tillage of the soil and any other husbandry activities that the corporation describes in writing as farming. That gives some discretion and some responsibility to the officers of the Farm Credit Corporation. I like that particular clause of the bill.
I am not sure whether I like the next clause. I should have liked to hear the minister say why the board membership has been increased from five members to seven. Today there is a tendency to increase everything, particularly boards. More members on the board means more overhead, more costs, more bureaucracy, and perhaps more Liberals. I hope that for once the government will appoint people because of their ability and not their political stripe.
Maybe the work load of the board is greater than it was when five members were sufficient. I suppose the greater
number gives a little better chance of having a quorum in case some members are absent. If the minister can give us sound reasons for the increase, I am sure the committee will endorse it but if not, I think it should be brought back to five members. After all, Mr. Speaker, the corporation does not do very much of the work. It does the planning and makes the policies, which are now included in the act anyway, but the advisory board, which consists of people in the field, really knows the score and it has most to do with administering of the bill.
The next item that I am interested in is the increase from $150 million to $225 million which is to be paid out of the Consolidated Revenue Fund. Some other members have already spoken about this item. I think the increase is long overdue and I do not think it is enough-perhaps it would be impossible to have enough money to meet the demand. I hope the figure was reached after a survey of the needs of agriculture in the various provinces. That should be the criterion in determining the amount of money to be made available.
No industry in Canada is more important than agriculture, Mr. Speaker. It produces the food of this nation. The family farm has been a major factor in the production of our food, and if we do not make sure that production continues, then in future we may expect to run into severe difficulty.
A few weeks ago we discussed the sterilization or killing of land by pesticides. That is only one item but today there are many others that are taking good agricultural land out of production. That is something that should concern every thinking Canadian. At times there is no other alternative but in many cases there are alternatives. Poor or non-productive land should be used for purposes other than good agricultural land. I hope this $225 million figure was arrived at after careful study of market demands, because it is a very important item.
Then the next clause of the bill deals with Section 13, which is really the key to the entire bill. It is an amendment which will give the corporation additional authority to borrow money. Clause 8(2) reads in part:
At the request of the corporation, the Minister of Finance may, out of the Consolidated Revenue Fund, lend money to the corporation-
As well, Clause 8(1) reads:
The corporation may, with the approval of the Minister of Finance, borrow money by any means, including issuing and selling bonds, debentures, notes and other evidences of indebtedness of the corporation.
I hope "by any means" will mean that they will not suddenly go into the bond market. Over a period of time the Farm Credit Corporation should build up its credibility in regard to this particular item. It should build up its credibility in regard to borrowing. If it does not build up credibility first, it will not receive the best results in borrowing.
In the United States, its corporation may borrow money from pension funds and from various other funds. I hope it is not the purpose of the federation to go to banks to borrow from them. After all, the present rate of interest is 15.75 plus one, which is 16.75 per cent. I would hate to see the Farm Credit Corporation having two interest rates-one with the

money which comes from government revenue, taxpayers money, and one which it must levy to meet the charges for the money it borrows. This would be dynamite and counterproductive; I would hate to see it happen. Some very careful thought must be given to the borrowing of money if we are to keep the common interest rate down. In my view it is too high now. This is not a gift to farmers, it is a loan. Farmers pay interest on it and the Farm Credit Corporation pays the interest to the government. It is earning money for the people of Canada; farmers will pay that money to the people of Canada, for the use of money which belongs to the people of Canada. I do not think it is unsound. It is fair and sensible. But the amount they will pay for the borrowing of that money will have a very important effect.
Perhaps in Alberta the Farm Credit Corporation will be able to borrow from the Alberta Heritage Trust Fund. I understand that it will have the guarantee of the Government of Canada. If so, I do not think there would be any objection from the people of Alberta if this money was lent to the FCC for the use of young farmers in the province. I have not discussed this matter with the trustees of the Alberta Heritage Trust Fund, but I know the trustees well. They are interested in lending money where it will do the most good, where it will help to not only develop farms but the agricultural industry, and will have the effect of increasing employment all the way down the line. There is a possibility that the FCC would be able to borrow money from the fund. After all, the Alberta Agricultural Development Corporation now borrows from the fund and pays a reasonable rate of interest. Because it is receiving a reasonable interest, it is able to give farmers of Alberta a much better deal; probably one of the best deals available any place in Canada. Farmers pay 12 per cent on their borrowings which might have been high a few years ago, but it is quite low when one considers today's rates. Every percentage point means a substantial amount of money out of the pockets of farmers. It also charges 15 per cent to processors. Both those rates are below the interest rates of the FCC. Consequently, there has been a tendency in Alberta to move, wherever possible, to the Agricultural Development Corporation and away from the FCC, although the legislation indicates that ADC is the final borrowing, not the first. The FCC has been out of money; it has not had any money, so it has not been able to accept many applications. The banks will not touch these applications at all, except at prohibitive interest rates. I am not sure whether the policy is still in effect, but at one time the ADC lent money to young beginning farmers at 6 per cent because the objective of the government of Alberta was to keep people on the land, to encourage them to stay there, and to increase production. The entire country benefits when farmers produce.
After building up a good credit rating, it may well be that the Farm Credit Corporation will go on the bond market and do well. I think this is a step forward, giving the FCC the right to borrow money. I hope the section which includes "with the approval of the Minister of Finance" will not be detrimental. I hope the minister views this from a broad horizon because the
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money will be used to develop the country probably as much as any other money in the entire economy.
This section dealing with borrowing is fine, but I wish the minister had gone one step further. I read an article about some easterner who studied farms in Canada. He said that farmers in Alberta were better off than farmers anywhere else in the country. Perhaps that is so for some farmers, but there are farmers in every province, including Alberta, who are having difficult times because of inadequate net incomes. We must recognize this. But there are some farmers who have done well, who have had lucky breaks, who have made the correct decisions and have been able to accumulate considerable wealth. There is no better way to provide an incentive for those farmers who are wealthy, those farmers who have made their money from the land and from agriculture, to invest their money in helping other young people to become farmers and help in the development of the agricultural industry throughout the country. The minister should have provided an incentive in the bill for people who have become wealthy through their farming operations, their ability and their hard work, perhaps some good luck, co-operative weather and making correct lending decisions. Farming is probably one of the biggest gambles in the world. Sometimes a gamble pays off, sometimes it does not. For those with considerable wealth, what would be a better way than supplying them with some incentive to provide money to the FCC; then it could be lent to young farmers to start farming. There is plenty of land available in Alberta. We need more food; the world is hungry for food. We must get our young people on the farms. When one looks at the price of land, of machinery and of getting started today, it is practically prohibitive for any young farmer unless he has extra currency from some place. His father may be able to help him to some degree, but many times it is not sufficient for him to start producing. In fact, the farmer may have several other sons who require some of the wealth he has accumulated. I ask the minister to consider putting incentive into the bill.
If a farmer invests in FCC, it is somewhat like having an RRSP. The farmer will get some benefit from income tax, incentive enough to encourage him to lend his money so that he will put it there instead of putting it in short-term loans. Therefore, it would have to be somewhat comparable. I think this would be excellent. Many people in this country have made good money off the land. They are now looking for places to invest. They would invest in this sort of thing if the government were to provide an incentive and guarantee that three or four years down the road that incentive will not be removed, as has been done with the IAACs and the RRSPs.
That is what takes the breath of life out of our farmers and our people when they see something like that going on. The government has done more harm to itself in this budget than any other single thing by the action it has taken affecting retiring farmers. However, I will deal with that in a few moments. But the government has broken the hearts of many farmers who plan to retire. After all, the land is the farmers'

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pension. A farmer has no pension scheme from a government or from a large corporation. Elis only pension scheme is his land. You take that away from him, and you leave him destitute in his old age, destitute in his retirement years. That is a very important item.
Let us deal with one other item. I know we are not in the Committee of the Whole so 1 will not go clause by clause. Nevertheless, I do want to deal with the final section of the bill, an act respecting rebates of interest on farm loans made under the Farm Credit Act. This is an important item. This is the legislation under which the government is making $45 million available plus $5 million for the interest subsidy to help farmers who are in dire straits. It seems as though every time our Prime Minister (Mr. Trudeau) mentions farmers, he also mentions the words dire straits. I do not know why he does this. Surely our farmers who are on the verge of bankruptcy should be able to seek some help to prevent them getting into dire straits which causes them to lose their farms.
But what does the Canadian Federation of Agriculture say about this bill? I say the minister is telling us that it is doing us some good. I think it will. But the government is providing $45 million for an industry across Canada when probably $500 million would be more appropriate. What does the Canadian Federation of Agriculture say with regard to this particular item? I shall quote for hon. members' benefit as follows:
The FCC refinancing capability of $45 million at 5 per cent under regular FCC rates would be a help if there is a decent amount of funds available to lend. But the $45 million is wholly inadequate. To qualify, you have to be in such bad shape that you can't even get an SBDB loan, and are sure therefore to go under, if you don't get relief. Also, you only get two years of interest relief. The $45 million will in any case only refinance 450 farmers at $100,000 each-
The next paragraph reads:
The FCC provision is a disgracefully inadequate sop to the requests of farmers for some real help. Under the absurd and deceiving budgetary convention that federal investment is called an expenditure, the government says it will spend $50 million to help farmers in trouble.
It is doing nothing of the kind. It is spending $5 million over two years (2.5 per year ) in reducing interest rates. The other $45 million is an interest-bearing loan to farmers that must be repaid. Where a billion dollars of such money is needed, $45 million is provided.
That is what the Federation of Agriculture, which is made up of agricultural people, thinks about this particular bill. I hope it will be able to help some farmers, however. But even if it cannot help everyone, it will help some. I think the Minister of Agriculture (Mr. Whelan) should take the thoughts of the Canadian Federation of Agriculture to heart and deal with them.
The next item that follows is a very important item also. It involves financing. It involves whether or not farmers will be going to the FCC. The difficulty with the present government, particularly in the field of agriculture as well as almost everything else, is that it does the turkey dance. The government takes one step forward; turkeys only take two steps backwards. The government outwits the turkeys. The government takes one step forward and five or six steps backwards. You cannot advance doing that. It is somewhat akin to what the army does. I had a commanding officer who told us our battalion would never retreat. He said "If things get too bad, I
will say 'about turn, forward march. But we will never retreat'." That is what agriculture is doing. Here we have something that is hurting the farmers and something unnecessary, in my opinion. I am referring to the capital cost allowances. Capital cost allowances are important to farming. A farmer has to buy machinery. Machinery wears out. For many years it was understood that machinery would wear out and that the farmers would be able to write that off in capital cost allowances. On page 41 of the document entitled "The Budget in More Detail", tabled with the budget papers, we read the following under the heading of Capital Cost Allowances:
-it is generally recognized that assets can be written off for tax purposes at much faster rates than is warranted by their actual economic lives.
The income tax people made it very clear that they are recognizing capital cost depreciation. If we take a look at the 1981 farmers' income tax guide, we find that this particular item is dealt with. In order that everyone who is not acquainted with this document will know, I will read what is found on page 9 as follows:
It is, however, recognized that over a number of years these assets wear out or become obsolete.
The government arranges for the person to depreciate this equipment over a period of years. But suddenly the Minister of Finance (Mr. MacEachen) thinks that depreciation is too fast, faster than is warranted by their actual economic lives. In other words, a person can depreciate a machine before it is actually worn out and make money from it. On page 2 in "The Budget in More Detail", we read:
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 come to this conclusion:
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.
They, the bureaucrats did not know what was going on in the agricultural industry when the Minister of Finance came to that conclusion. They say the rates are deliberately set. You can only take depreciation in accordance with the rates which the Department of Revenue permits. The rates are there on the back page of the farmers' income tax guide. If you use one percentage point more than what they say, the people in the Department of National Revenue correct your income tax. How can the Minister of Finance say that some of these are being depreciated at much faster rates than is warranted? They can only be depreciated at the rates that are allowed by the Department of National Revenue. How can he say that some of these rates are deliberately set in excess of economic depreciation? They can only be applied as granted and permitted by the Department of National Revenue.
Now, let us look at whether this is sensible and reasonable, at whether, as one of the hon. members opposite said the other night, it will hurt anyone if he only gets half the depreciation the first year because he can get the rest later on. I say he
January 28, 1982

might not be alive later on. He needs it now in the same way he has always had it.
Let us look at a drawn combine. You can depreciate that at 10 per cent a year. That means ten years before you can depreciate the purchase price. It is little enough, but it helps to buy a combine. Now, who uses his combine for more than ten years? Advances in technology make it necessary to buy a new combine earlier than that. If you are working a lot of land, you are going to need one before ten years. Is that too fast? It is just being sensible. When you say that you can only depreciate half of that the first year, well, you know what happens?


An hon. Member:: Twenty years.


Gordon Edward Taylor: Right. A farmer said to me the other day that he was going to buy a combine this fall, but nothing doing. Another one said he was going to buy a tractor this fall, but we will just have to buy parts and put up with the old one.
So, who is that hurting? It is hurting the manufacturers in Ontario and other places where they make these machines. The Minister of Finance should put that in his pipe and smoke it. It is not just hurting the farmer, it is hurting others. You can only depreciate a swather by 10 per cent, a tractor by 15 per cent. Whoever came up with this nonsense in "The Budget in More Detail" that such machines can be written off "at much faster rates", and some are being "deliberately set in excess". Well, there is something wrong with their heads. It must be the Department of National Revenue who made the mistake; they are the ones who set the rates. We need something better than that.
Then we have another statement in the Manitoba Co-operator of December 10, 1981, at page 6. It says:
Indications are that the new tax law has already had an adverse effect on farm machinery sales. Co-op Implements' executive officer David fate said the firm suffered a 70 per cent drop in sales last month from November last year-
For example, one of the men said:
-the purchase of an $80,000 tractor would now result in a farmer paying an additional $5,000 in income tax the first year.
Well, already the farmer is short of income, and here we are loading another $5,000 in taxes on him. It is not going to help farming because the farmer will have to start buying parts. It will hold him up if that tractor is too old. Yet here we are forgetting all about the farmer and his family. It is hurting the family farm.
I would like to see members from all sides speak for the farmer for once and say we do not want this "one half of the capital cost allowance the first year." Maybe in some industries it is sensible, but not in farming. You only use a combine for part of the year, while you use a tractor for practically the whole year, but no one is going to buy a combine in the latter part of the year if he is only going to get a little bit of depreciation. Even if he buys at the beginning of the year, he is only going to get half the first year. What nonsense. Let us encourage the farmer to keep his equipment up to date and help him operate efficiently.
Farm Loans
1 want to deal next with the matter of capital gains. Again the government takes a step backwards. I said before that the land is the farmer's pension, and we should remember that. I received a letter from the County of Wheatland which is situated east of Calgary. The councillors there are all farmers and have been for many years. They wrote me saying that there is not one farm being financed by the banks in western Canada. The sale of farms to young people has stopped because of this item in the budget. They cannot find the money. Prior to this the farmer would say, "Yes, I will sell this farm perhaps to my hired hand. He cannot raise $200,000 but he can raise $10,000". So he said he would take the ten, put it into an RRSP and live off the interest the first year. The next year there will be another five and the next year maybe another ten.
So the man has spent 50 years of his life on the farm, he is able to retire and the new man comes in to make a living, but that is not good enough for the Minister of Finance. He says no, you are not going to do this any more. If I had the time I would read the section of the bill saying that we are not going to permit this any more, which is ridiculous. How are young farmers going to get farms? Do you want centralization and the wealthy people of the United States, of Germany or Saudi Arabia coming in and buying our farms? Well, I do not. I want the family farm maintained, and this is one of the worst features I have ever seen for defeating the family farm.
I wish the members of this House would realize what will happen if this is permitted to stand. Surely a man who wants to sell his farm on the basis of receiving so much every year should be able to do it, surely that is sensible and he should be permitted to do so.
I have some pitiful letters from people who have sold their farms and were going to buy an RRSP or an IAAC. Now they cannot do that because the minister says, rio more. Well, he does not realize what he is doing to our farms. The pillows of women who have been on the farm for 40 or 50 years are wet with tears, and I am not kidding. Children are crying and frustrated, as are the farmers because they do not know what to do. They never thought their own government would treat them like this, would stop them from retiring.
That land is their nest egg, their pension. They do not have a pension from the government or the corporation, so how can a reasonable person ask them to pay the capital gains tax all at once when they do not get it all at once? A man sells a farm for $200,000 and all he gets is $10,000. Where in the world is he going to get the money to pay the capital gains tax? It does not make sense. This policy is not going to work for the family farm, but will only work for the wealthy, because only those who have $200,000 or $500,000 are going to be able to buy farms from now on. Let us change this thing. There is demand enough now on the FCC without this going any further. The capital gains tax itself is wrong. A farmer pays tax on his land all his life and when he goes to sell, the government comes in and takes another chunk out in capital gains. It is bad enough that they have to do it on the small amounts; but when they

January 28, 1982
Farm Loans
have to pay it on the whole sum, and they do not even get the whole sum, it becomes an entirely ridiculous operation.
Next, I would just like to deal with one or two of these other matters. These are backward steps. Consider this thrusting of the metric system on the farmers, which is costing them more money. Consider the policy of the government, with the CTC and the CPR abandoning railroads, again costing the farmers more money. Recently the CTC approved an application of the CPR to abandon the line from Carbon to Kirkpatrick. These farmers must now haul their grain from 8 to 30 or 40 miles. Who pays for it? The farmer. It comes out of his income. The CTC would not even bear to listen to that. It made up its mind that it would not even permit sufficient time to get the grain out of the elevator. I mentioned this to the CTC officials the other day. There are still 12 carloads of grain in the P&H elevator in Sharpies, and the CPR decided it would not haul one carload after December 31. Who is running this country, the government or the CPR?


Ian Deans: Neither.


Gordon Edward Taylor: It seems to me that the CTC is right under the thumb of the CPR. When the CTC refuses to abandon one line which is affecting our farmers, then I will believe there is someone in that corporation who has some interest in the farmers and in retaining the farm.
Yes, there are all kinds of things like this which are going on and which hurt the farmers. Let us see what some of our people are saying about it: "I have not been able to have an RRSP but relied on my land and hard work to provide me with a little nest egg at retirement." They say to the Minister of Finance, "Now you have squashed that in your budget." What does a farmer or small-business man do to keep himself in his old age?


The Acting Speaker (Mr. Ethier):: I regret to interrupt the hon. member, but his allotted time has expired.


Some hon. Members:: Hear, hear!


Mr. Marcel Ostiguy (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, 1 also have very important remarks to make on the bill now under consideration, since it is of vital importance not only for farmers but also for our customers abroad and for all Canadians. We know that every Canadian and every individual throughout the world depends on thriving agriculture to live comfortably and eat properly. That is why I will try in my comments to stick to Bill C-88 now before the House instead of doing like my colleague from Bow River (Mr. Taylor), who made a general survey of agriculture and often wandered from the subject. That is why I feel the government and everybody else, Mr. Speaker, cannot remain indifferent to the financial problems faced by farmers.
Agriculture would never have been so thriving without the determination and ingenuity of Canadian farmers. The role of the government has always been confined to supporting and promoting efforts and, in my opinion, it should continue to precisely play that role; for instance, through the many research programs carried out by Agriculture Canada, the stabilization programs and inspection services. Yesterday, Mr. Speaker, I also had the opportunity to speak about the bill to establish a corporation for the export of agricultural products, Canagrex. 1 would like to dwell on one of the essential instruments of farming, a modern instrument called credit. Canadian agriculture would never have achieved such an output and such efficiency without various forms of credit. And when the Minister of Agriculture (Mr. Whelan) praises the efficiency of the family farm and of Canadian Agriculture, he is not making up stories. He is simply trying to induce an awareness of that undeniable fact. The government has set up the Farm Credit Corporation to give farmers that tool that is essential to their development. Established in 1959, precisely 22 years ago, the corporation has assisted over 160,000 farmers.
As the minister pointed out this afternoon, out of these, 114,000 now have loans with the Farm Credit Corporation. It is, of course, difficult to measure in dollars and cents what contribution the Farm Credit Corporation is making to our country by financing the establishment of productive farms. However, we do know that as of January 1, 1981, Canadians farmers had about $117 billion in farm capital, breaking down as follows: 12 per cent short-term assets, 25 per cent medium-term assets and 65 per cent long-term assets, and 117.5 billion is a lot of money for Canada's agricultural sector.
The Farm Credit Corporation facilitates the transfer of farms to the younger generation and provides farmers with the investment capital they need for long-term productivity and stability. The agricultural sector must have access to investment capital if it is to provide the Canadian consumer with abundant supplies of high quality commodities at reasonable prices, and also supply foreign markets, thus contributing very substantially to our balance of payments. The Farm Credit Corporation is helping the family farm to play its role as a major supplier of food at national and world levels. In 1979-80 and 1980-81, the FCC granted nearly 90 per cent of all these loans, to family farms. In 1980-81, FCC borrowers increased their operating expenses by almost $100 million as a result of expansion projects, capital improvements and other farm investments which have been described by various members of this House since this afternoon. Loans granted by FCC and the annual expenditures generated by the corporation contribute very substantially to the economy and growth of rural communities and agricultural industries and services.
The successful results achieved by FCC borrowers show that the corporation is helping improve farm productivity and thus the Canadian economy. During the past years, it had to turn

down many loan requests because it did not have enough funds, and that was particularly the case during this past year and the past months. Statistics show us that 65 per cent of loan seekers who were turned down because of their sound financial situation had previously borrowed from the FCC. Ninety-one per cent of 2,622 borrowers whose loans were either taken over or reimbursed in 1980-81 were a financial success. Furthermore, 93 per cent of the 72,663 accounts were paid up as of March 31, 1981.
Mr. Speaker, all this goes to show that farmers are indeed worthy of the trust placed in them by the Canadian government. Once more, I can say that as a representative of a typically rural and farm riding in the province of Quebec, namely the riding of Saint-Hyacinthe-Bagot, that the farmers in this area are strong and proud people. 1 used to work with some of them before 1 entered politics, and I am sure that they will continue to honour their debts in the same way they always have done. Last year, an analysis of the effectiveness of the FCC showed that the corporation had promoted the establishment of viable farm businesses and had made a very substantial contribution to the Canadian economy. A special farm survey made by the FCC in 1981 shows that the Corporation is now lending to operations that are below average in size. This statement strengthens our view that the government has a definite role to play in financing Canadian agriculture. We feel that this role should be emphasized, notwithstanding the fact that the private sector has become increasingly active on the long-term farm credit market during the past five years. Only a few years ago, the Farm Credit Corporation was providing over 70 per cent of long-term farm credit in Canada. At that time, the remainder came from provincial institutions, credit unions and private lenders. In 1980, in spite of pressing demands, it could only provide 26 per cent of the long-term credit. The proportion this year will be even smaller for the simple reason that the total demand for long-term credit has increased by as much as 20 per cent every year, while the funds made available to the Farm Credit Corporation have decreased year after year. And this is quite understandable when one considers the rising cost of farms in this country, of farm land per acre, and realizes that the prices of farms have doubled and sometimes tripled over the past ten years. The prices of farm equipment necessary to operate farms have also doubled and even tripled. The prices of inputs, animals and everything else have increased as well. Which means that a farm which was bought for $100,000 some ten years ago could be worth $300,000 or even $400,000 today.
It is clear therefore that the budgetary restraints imposed by the government over the past few years have made it impossible for the Corporation to meet an increasing demand. We recognize that this situation is creating serious problems for many farmers. Some of them have had to obtain short-term loans from banks with floating interest rates but with interest
Farm Loans
rates spiralling upwards, this credit is becoming very expensive, if not too expensive.
The action of the Farm Credit Corporation has nevertheless contributed significantly to the stability of agriculture, because its interest rates on loans are not only attractive, but fixed for a period of up to 30 years, while private lending institutions can only provide long-term credit with floating interest rates. And of course a farmer could not go to banking or lending institutions to borrow $100,000, $200,000 or $300,000 for 30 years. All he could get at the most would be a ten-year loan while the Farm Credit Corporation with its formula has always been able to lend Canadian farmers money to be reimbursed over a 30 year period. Moreover, it makes money available to applicants with worth-while projects but who lack collateral to borrow from private lenders.
The Farm Credit Corporation will continue to give credit to high risk and not only those who cannot obtain loans from lending institutions. Since 1975 when it was authorized to grant loans up to full government guarantee, it has been lending increasingly on lower guarantees. Often new farmers are unable to give enough guarantee to private credit institutions but the corporation does not hesitate to take greater risks. Let us not forget, Mr. Speaker, that over the last few years, the corporation has, much to its credit, made 70 per cent of all its loans available to young borrowers.
Recently, I heard hon. members on the other side complaining that the Canadian government provides no assistance to young farmers, that it does not help them find the money necessary to settle down on a farm. The figures 1 have here tell another story. They show that 70 per cent of all loan recipients were young farmers; in other words, the Canadian government, more specifically the Farm Credit Corporation, is eager to assist young people who wish to take up farming. In addition, it authorizes some of its borrowers to defer their payments until such time when pressures on their income have eased off. I need not say, Mr. Speaker, that at the present time, pig breeders in Canada, and more specifically in Quebec are having a rough time and I have just been informed that pig abattoirs will shut down on Monday. As a result, the corporation may at the request of borrowers and after examining their situation, have to allow them to postpone their payments on either the interest or the capital. That has surely allowed quite a few of them to survive and will enable them to carry on their operations.
Despite budget restrictions, the corporation has managed to stay in touch with the farming community. The farmers, even when they knew that the corporation had less money to go around, kept on calling on its personnel for advice. The FCC was thus able to foster a sensible utilization of credit while assuming a consulting role in so doing. Mr. Speaker, I want to congratulate the staff of the Farm Credit Corporation, whether they operate out in the field, in regional offices, as provincial representatives or here at head office in Ottawa. I have

January 28, 1982
Farm Loans
been in contact with them on a regular basis and I can say that they have always listened well to what I have had to say, and that they are eager to help the farmers. Inevitably, some of the latter will claim that it is impossible for them to get in touch with the FCC personnel. It may have happened, but I would suggest that it has been a very rare occurrence because I have had many opportunities to discuss with them, and I can certainly commend them for the work they have been doing for 22 years in the field of Canadian agriculture.
In its budget of November 12, the government introduced special measures to bring immediate assistance to those people who have been unduly affected by the economic doldrums. As the previous speakers pointed out, unincorporated businesses, particularly farmers, now have access to the Small Business Development Bond. Thanks to the special agricultural assistance program, the Farm Credit Corporation has spent additional funds of roughly $50 million to help the most severely affected farmers. Earlier this evening, the hon. member for Mackenzie (Mr. Korchinski) was saying that three loans in his riding would just about account for those $50 million. He ought to think it over a bit before speaking because in the first place the corporation is not allowed to lend more than $400,000 if the applicant is a company. In other words, those $50 million will indeed help quite a few farmers and the measure we are studying today, Bill C-88, opens another avenue for potential loans to farmers. It is precisely the bill we are studying which matters and which will give us a more permanent solution.
According to the agricultural food strategy of Canada, Canadian farmers might boost their production by two thirds between now and the year 2000. However, if the farmers want to achieve a degree of efficiency which will enable them to corner the available markets, they will have to reorganize their production over maximum scope units so as to benefit from modern production technology. One cannot optimize economies of scale unless one is prepared to use credit judiciously and make major investments. Farmers must therefore have ready access to sufficient long-term financing at reasonable conditions. This document highlights the role which the federal government and the Department of Agriculture want to play by making long-term farm credit available to farmers so that Canada's agriculture will reach its objectives.
It is therefore essential that the Farm Credit Corporation be given access to additional funds for Canadian farmers so they will be guaranteed an uninterrupted and sufficient long-term credit margin by a body which acknowledges their requirements. The most significant amendment to the Farm Credit Act paves the way toward a new source of funds. Several provisions of the bill will authorize the Farm Credit Corporation to borrow on financial markets. Most of its budget will still come from the Consolidated Revenue Fund, but it will be able to supplement it by borrowing on Canadian or international markets. As the borrowing mechanisms are gradually set up
and as the Farm Credit Corporation carves a place for itself on the financial markets, it will be in a position to secure on those markets an ever-larger portion of its funds. The bill also provides that the limits for loans will be set by way of regulations and not by way of the act itself. The minister explained this earlier this afternoon when he said that the present limit is $200,000 for any single operation with one eligible applicant and $400,000 for an operation involving more than one applicant. It is a well known fact that farm financing is becoming increasingly expensive. To be in a position to meet the present and future needs of farmers, the Farm Credit Corporation must be able to increase the limit on its loans when the situation warrants. Providing that the limits will be set by way of regulations rather than by way of the act gives the corporation the required flexibility to respond more quickly to the economic conditions of the eighties. We now intend to raise these ceilings to $300,000 and $500,000 respectively for operations involving either one or several applicants. I can assure you, Mr. Speaker, that this ceiling of $300,000 for one applicant and $500,000 for a corporation is not too high, far from it, as I said earlier, when you think about the over-all value of the farms, the equipment, the herds, the livestock, the quotas and so on.
The Farm Credit Corporation will also be able to pay up to 30 per cent of a loan on provision of satisfactory security before the mortgage is registered and the other documents respecting the security have been completed. This new provision will avoid additional costs and administrative inconvenience for the farmers who, previously, had to obtain bridge financing before the FCC could provide the approved funds. Mr. Speaker, this change will actually help the farmers as they often have had to wait for deeds executed by a notary or other documents and borrow from the banks for a certain period of time, and always at higher rates. The borrowing authority of the FCC is now lmited to 25 times its capital, which amounts to $150 million. The capital provided by the government to the corporation will be just under $143 million at the end of this fiscal year. The Farm Credit Corporation will therefore have exhausted its borrowing authority early in 1982-83. It is therefore imperative that its registered capital be increased from $150 million to $225 million to avoid a serious shortage of funds to be made available to farmers.
In recent years, we have received many representations, as I believe have all members who represent rural ridings, with respect to the age limitation in the case of gradual establishment loans. The age is now 35 but the bill will remove that. Part II of the bill enables the Farm Credit Corporation to write off 5 per cent of the interest rate on loans granted under a special farming assistance program intended to help the farming community in difficult times. This will make it possible to get the necessary funds out of departmental estimates.
January 28, 1982

In recent years, serious consideration has been given to the transfer of farms to the younger generation, with a view to finding a way of ensuring the continuation of the family farm system that is so important in our country. Bill C-88 which is before us is offering a solution to this very problem. It will authorize the Farm Credit Corporation to lend a farming corporation money to be used to grant a loan to anyone wishing to become a shareholder and member. It will thus be easier for sons and daughters of farmers to join the family operation. According to the present Farm Credit Act, the FCC may lend money on the security of farms lands alone or on farm lands and chattels. The FCC can obtain additional security but it cannot take it into consideration when determining the amount of the loan. The bill will make it possible to get additional security, as defined by regulation, and to take it into account when figuring out the amount of the loan. The additional security could, for instance, consist of equity in feeder cattle or even in savings certificates that cannot be cashed in before maturity without incurring a loss.
At present, the Farm Credit Corporation can keep accounts in its name only in the Bank of Canada and the chartered banks designated by the Minister of Finance (Mr. Mac-Eachen). The bill would enable the corporation, with the approval of the Minister of Finance, to keep accounts in its name in any financial institution in or out of Canada. This would streamline the financial operation of the corporation and enable it to improve its financial efficiency. The bill would increase from five to seven the number of members of the board. The number has been limited to five since 1959, but the business of the corporation has increased, as mentioned earlier, and has become more complex since its inception in 1959. The addition of two members will increase the expertise and resources available to the corporation and Canadian farmers. Other housekeeping amendments are made to the act. Their purpose is to eliminate some obsolete aspects and to update others. The wording of the act will thus be improved and it will be easier to administer.
The Farm Credit Corporation plays a vital role by helping Canadian farmers finance their operation and giving them valuable advice. This is done without calling upon Parliament for money. Operation expenses, including losses, are paid for by a 1 per cent margin. Again, it must be especially commended for its flexible and tolerant repayment policy toward farmers in difficulty. Over the years, it has followed sound and worth-while management policies, but above all it has remained humane and understanding.
I would like to comment at length on the role played by the Farm Credit Corporation, but before I conclude, I must pay tribute to the Canadian farmers. Loans are repaid by the borrowers. The Canadian government, the Department of Agriculture, the Farm Credit Corporation do not extend charity. Quite the opposite, they make very sound and viable investments. Farmers repay their loans. They are proud
Adjournment Debate
people. I am convinced they are worthy of our faith in their ability and competence, by using the credit facilities we are extending to them. This legislation certainly will bring significant benefits to all Canadians, both consumers and producers. Mr. Speaker, I am confident this bill will pass second reading. We can then consider it without delay clause by clause in committee, in order that we may help Canadian farmers as soon as possible.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Girve Fretz (Erie):: Mr. Speaker, this evening I read a speech delivered by the Minister of Agriculture (Mr. Whelan), and 1 want to read one sentence from that speech: It is up to governments to provide an atmosphere where Canadians can pursue opportunities, and I think that is happening in this country. How I wish that were the conviction of the Minister of Finance (Mr. MacEachen); how I wish that were the vision of the Prime Minister (Mr. Trudeau), and how I wish that were the conviction of the government of this country!


Douglas Charles Neil: And the Minister of Agriculture (Mr. Whelan).


Claude Girvin (Girve) Fretz: And the Minister of Agriculture. However, sadly, that is not the case.
On December 11,1 rose in the House to ask the Minister of Labour (Mr. Caccia) a question regarding the negative impact of the budget on working Canadians, especially the provision which calls for employer-paid medical and dental plans now to be considered as taxable benefits. At that time the Minister of Labour indicated that he had made representations to the Minister of Finance on behalf of those millions of Canadian workers and their families who would suffer because of this provision. In spite of those representations and the representations of many unions and employers, the Minister of Finance has not seen his way clear to dispose of this reprehensible proposal.
Instead, in the House on Tuesday the minister responded with his usual sophistry to a question on this very issue raised by my colleague, the hon. member for Vancouver Quadra (Mr. Clarke). The minister, who while minister of national health and welfare introduced medicare and who has cloaked himself in the robe of the great social reformer, is, by his actions, condemning millions of workers to higher taxes in these times of unspeakably high inflation.

January 28, 1982
Adjournment Debate
We on this side of the House are reasonable people, but when the Minister of Finance has the bare-faced effrontery to call this budget one of fairness, one which takes from the rich and gives to the poor, when in actuality this particular provision will affect Canadians, 78 per cent of whom earn less than $25,000 annually-such outrageous behaviour makes it extremely difficult for us to respond with sweet reason. More than that, these actions on the part of the minister are leading to a growing sense of disenchantment on the part of Canadians with the democratic process. People have been moved as never before to take pen to paper or to pick up the telephone to plead with the minister to change his mind. All these entreaties fall on deaf ears, and the minister goes on his merry way, seemingly oblivious to the damage his budget has wrought on Canadians already straggering under the burdens of obscenely high interest rates and skyrocketing inflation.
On this issue employees and employers are on the same side. The employers are just as upset as the employees. I received in my office just today a letter from Mr. E. B. Magee, Jr. of the Port Colborne Iron Works, who sums up the feelings of employers pretty well. I would like to quote briefly from his letter addressed to the Minister of Finance:
Dear Sir:
I am greatly disturbed that no change has been announced to your budget proposal to tax employer-paid Extended Health Care and Dental Care premiums and also the proposed imposition of personal tax on the so-called "income accruing" within life insurance policies.
This proposal sounds great in theory but is destructive in practice. Let me explain how it affects my employees. My Extended Health Care and Dental Care plans have been in existence for many years. The annual premium cost per year per married employee is $478. My company pays 100 per cent of the cost therefore the full amount will be taxable to my employee. This will increase the tax paid by my average employee by $157.74 per year.
This is wonderful. If you repeat this same calculation for millions of working Canadians you generate millions of additional revenue. Its high time we increased taxes on these rich people!
While you get $104.11 and Ontario gets $53.63, a total of $157.74, what do I get?
I get:
(a)	the pleasure of explaining to some employees why they should continue to belong to my Extended Health Care and Dental plans (i.e. "Why should I pay taxes of $157.74 when my drug bills and dental expenses last year were only $50.00?")
(b)	the thrill of adjusting my tax reporting systems to include this trivial benefit and increasing the workload of my clerical staff already bogged down by government paper work.
(c)	the joy of telling my customers my prices will have to increase if my insurer is forced to raise his premiums to cover lost revenue from subscribers who drop the plan; and
(d)	the depressing feeling that comes from realizing that the party of Wilfrid Laurier has indeed lost all contact with reality and the needs of working Canadians.
In conclusion I should like to know, Mr. Speaker, in the light of these facts, and in view of the impassioned pleas from the millions of Canadians who are going to be adversely affected by this budget, if the minister has any intention of putting the interests of the little guy before his own narrow political ambitions, and will he withdraw this iniquitous provision? Indeed, will he withdraw this whole budget altogether?


Mr. John Evans (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, the hon. member for Erie (Mr. Fretz) makes reference to two of the budgetary measures relating to employee benefits-the taxation of employer contributions to private health and dental plans and the subsidy element of loans from employers. Before I comment on these specific items, I feel it is essential that the general concept of equity that underlies these measures be explained.
Critics of the budget have argued that if this is a "soak the rich" budget, then it is a sham because it really hits lower and middle-income employees. This kind of criticism involves a fundamental misunderstanding of the concept of equity. An equitable tax system has two fundamental characteristics: higher-income individuals bear a proportionately greater share of the tax burden; and individuals with the same income should bear relatively equal portions of the tax burden.
The full taxation of employee benefits improves the equity of our tax system in both of these fundamental respects. The previous exemption for health plan benefits, for example, was inequitable to those who did not have access to such plans through their employer. In fact, they were subsidizing, through the tax system, those employees who did receive these benefits through their employers. The exemption was also inequitable between low and high-income employees. For example, the exemption for a $200 premium paid by the employer was worth only $50 to those in a 25 per cent tax bracket, but $100 to those in a 50 per cent tax bracket. The proposed change will also be consistent with the treatment of employer contributions to hospital and medical insurance plans administered by the provinces. For example, employer contributions to OHIP have always been a taxable benefit so why should supplementary benefits available to Canadians not be a taxable benefit when OHIP is a taxable benefit? These contributions have always been taxable in the hands of employees.
More generally, budget changes such as those referred to by the hon. member for Erie (Mr. Fretz) serve to achieve a more coherent and consistent set of rules for the taxation of various types of income. While these employee benefits accrue to individuals in all tax brackets, they accrue to a relatively small percentage of individuals in the lower-income brackets and their amounts are modest. More importantly, for a vast majority of low and middle-income Canadians, any tax increase due to the removal of such tax exemptions and deductions is more than offset by the lowering of the marginal tax rates and the enrichment of the federal tax cut of $200 per individual and allowing married taxpayers to claim an additional $200 tax cut in respect of the spouse. This provision is worth over $1.5 billion per annum in federal and provincial tax savings to Canadians.


AGRICULTURE-NATIONAL BEEF STABILIZATION PROGRAM. (B) INQUIRY RESPECTING CONSULTATION WITH SASKATCHEWAN
William Hunter (Bill) McKnight: Mr. Speaker, on December 16 I asked the Minister of Agriculture (Mr. Whelan) a question related to the national marketing and
January 28, 1982

stabilization required in the red meat industry, and particularly the beef industry. I wanted to know if he had had any communication with the province of Saskatchewan about the process or feasibility of implementing a stabilization program.
I want to emphasize the word "stabilization" as compared to the program of supply-management. I should like to supplement my words, Mr. Speaker, and try to lay the groundwork for the minister and the House.
The reason I asked the question is that it is important now for stabilization to take place within the Canadian beef industry. The Minister of Agriculture has the power under the Agricultural Stabilization Act to implement the necessary planning of stabilization within the beef industry. This planning should involve three groups. The first group would be the federal and provincial governments of the cattle producing provinces and cattle producers. There should be a three-way partnership in stabilization among these groups.
The cost which is necessary to implement the plan should be shared by these three groups. Ways must be found so that cattle producers can share in the cost of the program, much in the same way as wheat producers share in the grain stabilization program. I hope there could be some set time period for adjustment in the cattle stabilization program, as I see it, rather than following the manner in which the grain stabilization program has been carried on, where increases have been made once and predicted to be made the next year after producers are locked into the program. Cattle producers must share in the cost of their own stabilization program. Most important, the 95 per cent figure could assist the cattle industry. If it were adjusted on a quarterly basis, it would be significantly greater than if it were 95 per cent straight across the board. If it is 100 per cent and the cost is shared by producers, there would be some form of stabilization to save the beef industry as we know it in Canada today. If we have to move to 100 per cent, I think it is acceptable if the costs are shared. The only additional burden in the first year would be the payout which is needed. The payout is needed now, right now. If we continue to ignore the problem, we will see greater and greater distress in the beef cattle industry across Canada.
I should like to refer to a survey of 93 beef farmers in three Ontario counties. This survey is applicable across Canada, I do not think there is any doubt about it. The three Ontario counties were Bruce, Grey and Wellington which showed that 42 of the 93 producers surveyed had debts of more than 75 per cent of what they owned and 23 had debts which exceeded their assets. It would appear that most of these producers whose debts exceeded 75 per cent of their assets are in serious financial difficulty. Most of those farmers will not likely be able to finance their cattle operations this year. The average debt of the 93 farmers was $405,000; nine had liabilities of more than $1 million; one had a debt of $2.2 million. Most of this debt is at floating interest rates which has doubled in the past year while beef prices remained low.
Adjournment Debate
The survey also showed that only seven farmers answering the questionnaire reported a profit of more than $5,000, while 22 of them said that they lost more than $75,000 in 1981. To cope with interest rates of more than 20 per cent, 12 farmers sold off land or machinery, four liquidated their assets, six got off-the-farm jobs, and 23 of them, for whatever good it might do, took out another mortgage. I submit that this survey speaks for the cattle industry across Canada, not just Ontario.
The province of Saskatchewan has the space, the cattle numbers, and the grain to finish those animals. The province introduced a beef stabilization program which is neither stabilizing nor marketing. It is a program which less than 60 per cent of the farmers have joined. The criteria for joining the program eliminates any benefit to the cow-calf operator. There is no point for the feed lot operator because he is not eligible. The biggest drawback in the Saskatchewan program is that one must join for six years. Before one joins for six years, one should know that not much planning has gone into the program as yet. According to the minister responsible, Mr. Mac-Murchy, it is still being worked out but it is a start and an important one. 1 understand the Saskatchewan government rejected an offer from the federal government for 100 per cent cost of production in 1977 as a stabilization program. 1 can understand the minister responsible in Saskatchewan, Mr. MacMurchy, when he said that he rejected the Minister of Agriculture's supply-management approach.
I would like to know tonight if the 100 per cent cost of production return offered by the federal government was based on the province of Saskatchewan entering a supply management project. Stabilization is needed now in the province of Saskatchewan. It is needed across Canada in the cattle industry. The longer we delay, the more difficult it will be to rebuild the industry, if our beef producing herds can ever be rebuilt in the future.


Marcel Ostiguy: Mr. Speaker, the hon. member for Kindersley-Lloydminster (Mr. McKnight) wants to know whether we have conferred in the last two or three weeks with representatives from the province of Saskatchewan regarding the implementing of a national beef prices stabilization program. The answer is yes. However, 1 should also explain to the hon. member the advisory mechanism that was set up several years ago.
When the Agricultural Stabilization Act was amended by this House in 1975, departmental officers did try to standardize Canadian stabilization programs for all farm products. Their efforts have ended in failure, Mr. Speaker, mostly because there were widely differing views among various provinces as to the level of assistance that was to be extended to producers. A number of provinces were advocating very strong aid while others recommended very limited aid or no aid at all. In 1978, after having ascertained that this approach was

January 28, 1982
Adjournment Debate
leading toward a deadlock, we offered all provinces the "GM 100" plan. Essentially, this program would have assured all producers a cash refund of all production costs paid out in cash, plus 100 per cent of the average five-year return obtained on the market, this latter amount being added to the cash production costs.
This was a sure guarantee linked to the way the market works, through which the farmers would have avoided very costly adjustments in their operations from year to year. We have to remember, Mr. Speaker, that the beef market was especially strong in Canada in 1978. The devaluation of the Canadian dollar in 1977 had caused a rapid increase in the price of beef from $45 to $80 a hundred pounds. The market was up and producers were not really interested in support programs. As a result, the provinces unanimously rejected the GM100 approach in the belief that this program was too much of an incentive and might cause overproduction and the eventual collapse of the beef industry. Since 1978, the price of beef has been ranging from $75 to $80 a hundred pounds for A1 and A2 steers in Toronto, and costs have been rising quickly. Because of this, what was a good price in 1978 has become an unrewarding and stagnant price unrelated to increasingly high costs. Obviously, beef producers do not apply the cost of living factor to their prices. In 1980, Department of Agriculture officials tried once again to develop a joint stabilization program for Canada as a whole, but again without success.
I would like to point out to the hon. member that Saskatchewan has always taken part in these discussions. Of course, in 1981-and I shall close with this comment, Mr. Speaker-the provinces and the producers abandoned the position they had taken in 1978 and indicated that even the GM100 approach would not be enough.


ANNOUNCED SHUTDOWN OF MINE AT URANIUM CITY, SASK. (B) ATTENDANCE OF ELDORADO NUCLEAR OFFICIALS AT STANDING COMMITTEE MEETING
Mr. Doug Anguish (The Battlefords-Meadow Lake):: would like to begin by saying how pleased I am that the federal government and Eldorado Nuclear have co-operated in setting up a task force to examine the problems associated with the closure of the Beaverlodge mine and mill. The task force is composed of representatives from the Uranium City area, the Saskatchewan government, the federal government and Eldorado Nuclear. The group will be formulating recommendations and submitting them to the appropriate people or agencies in an initial report due March 31, 1982. However, this is where my pleasure stops.
I am extremely disappointed that the Saskatchewan government and the municipal corporation of Uranium City had to push so hard to get the task force set up. I am even more disappointed that the meeting between the four concerned
groups was held in Ottawa instead of Uranium City, the area most gravely affected by the closure.
How can a federal Crown corporation be allowed to spend millions of dollars on the Beaverlodge operation and then shut it down so abruptly? In the last couple of years expenditures have been made that include: Relocation of head offices from Edmonton to Saskatoon; purchase of a Boeing 737 aircraft; a new hangar for the aircraft; a new cookery; new homes in Uranium City, with the total of homes now exceeding 500; the Charlotte River hydro dam; a complete overhaul of the mill; the recruitment of people up until the week the closure was announced, and other expenditures too numerous to mention, but which total hundreds of millions of dollars.
Everyone accepts the fact that eventually all mines must close down because the ore runs out. But no one expected the mine and mill at Uranium City to close because of the confidence Eldorado had shown in the ore body, through large expenditures and an active recruiting program. Was this a cynical plot, or the result of gross mismanagement?
As the Member of Parliament representing the Uranium City area I want to do everything I can to see the town remain a viable and active community. This is why I am particularly interested in the section of the task force's mandate dealing with economic development of the area. It would have been great if the federal government had asked Eldorado to remain open for an extended period of time to allow the development of alternate industries, but with the closure announced for June 30, 1982, everyone is under the gun. Many people have already left Uranium City. 1 do not like to see it, but with all the uncertainty 1 sure do not blame them.
When we look at the closure of the Beaverlodge operation we find that the people fall into three easily identifiable groups: Those who are direct employees of Eldorado Nuclear; those who do not work directly for Eldorado Nuclear but depend on the spin-off benefits of the company and those who live in other communities such as Camsell Portage, Black Lake, Stoney Rapids and Fond du Lac.
On behalf of the people of Uranium City and the Athabasca Basin I am asking you to help us revitalize the community, not just relocate the employees of Eldorado. Granted, there are some who will want to leave and they should be assisted, but there are others who have strong roots in Uranium City and they wish to stay. Some of them were born there and grew up in the community; still others have lived there ten, 15, 20 years or more. It is their home and they do not want to leave. They won't leave. These people have investments in the community. If some are forced to leave they must receive compensation for their investments in their homes and businesses.
It can be appreciated that someone living in Ottawa, Toronto or Montreal would have some difficulty understanding what it would be like living in a community of 3,000 people after an industry employing 840 of its residents had closed down. If an industry employing 840 people closed down in a city of say one million people it would have small effect on the total population and devasting effects on the families of the 840 who lost their jobs, but the day after the city would go on
January 28, 1982

as if nothing had happened. Neighbouring communities would not likely even be affected. This is not so with Uranium City. If that situation happens in this community, the communities in the Athabasca Basin lose their supply centre. The displaced employees have no other jobs to go to and there is no economic base to support the remaining businesses in town. If the Beaverlodge mine and mill must close there has to be something else developed to replace the economic base.
Please allow me to tell you a bit about this area, about this community. As I mentioned, Uranium City has a current population of about 3,000 people. One industry, Eldorado Nuclear, employs about 840 of its residents. The setting is on the north shore of Lake Athabasca, the largest lake in Saskatchewan, which is not many miles from the 60th parallel, or the Northwest Territories border, as it is more commonly known. There are no all-weather roads; the only year-round access to the town is by air. During certain times of the year it is accessible by barges on the water or ice roads in the coldest part of the winter, for a very short period of time. The people of Uranium City and the Athabasca Basin are good, hardworking Canadian citizens, and we are asking for your help, just as we are asking and receiving help from the government of Saskatchewan and the municipal corporation of Uranium City.
There should have been consultation with the local people before the announced closure so that many of these problems could have been worked out satisfactorily.
In the past, Eldorado Nuclear was always viewed as a good corporate citizen by the residents of Uranium City and the area. The abrupt announcement of an unexpected closure hurt that image deeply. It is the hope of all those concerned that Eldorado Nuclear may be viewed as a good corporate citizen again after June 30, 1982.


Mr. Roy MacLaren (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, in a statement in the House on December 4, the Minister of Energy, Mines and Resources (Mr. Lalonde) explained that the decision to close the uranium mine at Uranium City had been taken by Eldorado Nuclear Limited with much concern and only after careful assessment of all factors. Further, the mine will not be closed until June in order to give time for the implementation of measures to ensure that the workers and their families will find suitable new employment. The prospects are favourable in this respect because there is a considerable demand for competent workers in the mining industry.
Adjournment Debate
On the matter of consultation, there was a thorough appraisal of all factors concerned with the economics and operation of the Eldorado mine before a decision was reached. In the course of this assessment, there was consultation with the minister, with Premier Blakeney, and with the federal Department of Employment and Immigration. The company then concluded that it was important to make the decision known as quickly as possible so that steps could be taken to provide for the phasing out of the operation in a manner that would protect the employees to the maximum extent possible.
Concerning an earlier reference by the member lor The Battlefords-Meadow Lake (Mr. Anguish) to financial support being given the heavy water plants in Cape Breton, each form of assistance must, of course, be assessed on its own merit. Not only is the cost of uranium production at Uranium City about two and a half times the selling price, but also the world market for uranium has been declining and will remain at greatly reduced levels for the foreseeable future. It will be recalled that 80 per cent of our uranium goes into the export market. On the other hand, the two heavy water plants in Nova Scotia and the plants in Ontario are the only significant producers in the world. It is important to maintain heavy water production capacity for the domestic market and also in relation to heavy water export opportunities in Mexico and Korea.
To ensure the effective co-operation of all interested parties in dealing with community problems arising from the closing of the mine, the Uranium City task force has been established. It consists of representatives of the community, the Saskatchewan government, the federal government, and Eldorado Nuclear Limited. The task force is charged with developing recommendations by March 31 concerning a development plan for future economic development in Uranium City. It is also required to investigate the social and economic impact of the mine closure and to consider compensation and mitigating measures, if appropriate.
Eldorado Nuclear has already made provision for implementing generous measures for its employees consisting of the following: a special severance package; a new contract involving a 13 per cent wage increase retroactive to January 1, 1981; and a relocation program providing for up to $9,000 per employee. The relocation program would involve total-


The Acting Speaker (Mr. Ethier):: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m.
At 10.30 p.m. the House adjourned, without question put, pursuant to Standing Order.

Friday, January 29, 1982