1982-11-08

MOTIONS UNDER S.O. 43   ENVIRONMENTAL AFFAIRS CALL FOR RECONSTITUTION OF SUBCOMMITTEE ON ACID RAIN

['No.']
Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, I am sure that the Minister of the Environment (Mr. Roberts) and Hon. Members throughout the House share my concern with regard to the serious matter of acid rain. It is a concern felt throughout my riding of Parry Sound-Muskoka and, I know, the rest of the country. It is an ongoing problem and one which demands our ongoing attention. Among other considerations which spring to mind, I would mention that the Government, in its dealing with those beyond our border, should have the backing of an ongoing subcommittee devoted to the subject. I would also point out that all Members of the former committee are unanimous in their request that it should be reinstituted. I therefore move, seconded by the Hon. Member for Northumberland (Mr. Hees):
That immediate steps be taken to reconstitute, on a continuing basis, the former Special Sub-Committee on Acid Rain.
There is a precedent for this action, involving the Subcommittee on the Disabled, which is still continuing.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.



Mr. Ron Stewart (Simcoe South):: Madam Speaker, in his speech to the Liberal convention this past weekend the Prime Minister (Mr. Trudeau) promised delegates that the Government "will move in five strategic areas", these to be detailed in the coming Speech from the Throne. In a recent full-page newspaper ad The National Citizen's Coalition presented five truly strategic reasons why Canada is in such trouble: the new Minister of Finance (Mr. Lalonde) and his disastrous energy program; the new Secretary of State (Mr. Joyal) and his costly and divisive bilingual policies; the new Minister of Energy,
Mines and Resources (Mr. Chretien), who removed property rights from the Constitution; the Minister of Agriculture (Mr. Whelan) who plans to do to the agricultural industry what was done in the energy field; and the Prime Minister himself, whose Government has created debt and despair.
I move, seconded by the Hon. Member for Bow River (Mr. Taylor):
That if the Government is really serious about taking five steps to restore our economy and our confidence, the aforementioned immediately resign, a move which would instantly improve prospects for at least five million of their fellow Canadians.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


ATOMIC ENERGY OF CANADA LIMITED
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, in a special report on the Canadian nuclear industry in yesterday's Toronto Star, Egon Freeh, a spokesperson for the nuclear waste management division of Atomic Energy of Canada Limited, admitted that the nuclear industry was not really interested in dealing with the problems of permanent nuclear waste disposal and that, "if it were not for public pressure, we would not be engaged in . . . disposal research". In that same expose, the Hon. Member for Thunder Bay-Atiko-kan (Mr. McRae) said this about the AECL: "I have never had experience with any group that I mistrust more. They operate in a semi-secret way and they use a big public relations operation to put people off." In view of these statements, I move, seconded by the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie):
That the Government, in order to protect future generations of Canadians, transfer responsibility for nuclear waste disposal research, and responsibility for assessing the health hazards of nuclear waste, to a scientific body completely independent of AECL and one beyond the reach of the powerful nuclear lobby groups.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.

November 8, 1982


INDIAN AFFAIRS AND NORTHERN DEVELOPMENT
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, in light of the fact that more than $15 million has been spent between 1977 and 1981 by the Department of Indian Affairs and Northern Development in the sector of Indian arts and crafts, and in view of the history of chronic mismanagement and counter-effective use of public funds in this area, I move, seconded by the Hon. Member for Calgary West (Mr. Hawkes):
That an immediate investigation and complete audit of the funding and management of the Indian arts and crafts sector be initiated by the Minister of Indian Affairs and Northern Development, in conjunction with the Auditor General, in order to ensure that these public funds are used efficiently, effectively and in the best interests of the native people.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


FAMILY VIOLENCE
Mr. Jim Hawkes (Calgary West):: Madam Speaker, five months ago the Standing Committee on Health, Welfare and Social Affairs recommended that a federal-provincial conference be held to deal with the pressing issue of battered wives. On Friday the Minister responsible for the Status of Women indicated that, contrary to the recommendations of that report, this important conference will not be held. I therefore move, seconded by the Hon. Member for Simcoe North (Mr. Lewis):
That the Minister of National Health and Welfare bring this matter to the urgent attention of Cabinet and, hopefully before Christmas, report back to the House the dates, times and location of the recommended conference.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


NUCLEAR ARMAMENTS
Mr. Terry Sargeant (Selkirk-Interlake):: Madam Speaker, I rise under the provisions of Standing Order 43. Whereas the Prime Minister (Mr. Trudeau), speaking to the Liberal convention on the weekend, showed a surprising naivete on the nuclear arms race, stating that we need to deploy the Cruise missile in order to force the Soviets to the arms reduction bargaining table, and whereas, while the U.S. enjoyed an
overwhelming superiority in nuclear arsenals during the fifties, sixties and early seventies, the Soviet Union felt compelled to do just the opposite and will now certainly match deployment of Cruise missiles with deployment of their own, I move, seconded by the Hon. Member for Burnaby (Mr. Robinson):
That the Prime Minister fulfil his own wish that Canada not have to test the Cruise, a wish shared by most Canadians, by not allowing its testing in this country, thus making a positive, non-naive statement on the arms race.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


MEDICAL CARE
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, the Liberal uncertainty over universality in social programs-


Mr. Smith:: No uncertainty!


Dave Nickerson: -with the Minister of National Health and Welfare (Miss Begin) telling the party convention one thing while telling Parliament something quite different, has led to confusion over whether the national health care system will be retained in its present form or not. I therefore move, seconded by the Hon. Member for Calgary West (Mr. Hawkes):
That the proposed new Canada Health Act be tabled in draft form immediately so that Canadians might be aware of the Government's intentions respecting user fees, extra billing and changes in medical cost distribution between different levels of Government.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


THE PRESS
Mr. Pat Nowlan (Annapolis Valley-Hants):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. In view of press coverage of the Liberal annual general meeting over the weekend, especially on the commendable Young Liberal movement for democracy and honesty in political affairs, when aides, schemers and manipulators of the Prime Minister's Office were criticized, but no mention made of the man elected 17 years ago this date, I move, seconded by
November 8, 1982

another Member who was elected 17 years ago, the Hon. Member for Dartmouth-Halifax East (Mr. Forrestall):
That this House direct the Minister responsible for the Kent Commission to cease and desist in his efforts to establish a Press Council since the Government not only controls, but obviously already owns a press with a double-standard, which lets Liberals blame little folk as fall guys with nary a negative on a man who never carried his own luggage.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Ted Miller (Nanaimo-Alberni):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. This past week the public has learned of U.S.-orchestrated clandestine raids on the Central American country of Nicaragua, launched from neighbouring Honduras and designed to destabilize the Nicaraguan Government. We have also learned that the escalation of these operations has increased the possibility of war in the region, and that considerably larger-scale U.S.-Honduran military manoeuvres are planned against Nicaragua in December.
In view of Canada's growing bilateral relationships in Latin America and desire for the restoration of political stability to the region, I move, seconded by the Hon. Member for Skeena (Mr. Fulton):
That this House call on the Secretary of State for External Affairs to provide the House with full information on the magnitude of American arms supplies, military and intelligence activities in Central America, and the Canadian Government's view of the dangers caused by these activities to the political stability and independence of ail countries in that region.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


CANADIAN PACIFIC RAILWAY
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. The CPR, by recently laying off 1,100 workers at its shops in Winnipeg when there is plenty of rolling stock to repair, is certainly not demonstrating any faith in Canada and can hardly be said to be preparing to take advantage of future economic recovery as the Prime Minister via television encouraged everyone to do. Indeed, it appears that the CPR
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does not really expect a recovery. Therefore, I move, seconded by the Hon. Member for Winnipeg North (Mr. Orlikow):
That the Government order the CPR for once to act like a decent corporate citizen and, failing that, that the CPR be nationalized and the CNR be renationalized so that finally we might have a railway system in this country which serves the public interest.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Bill Jarvis (Perth):: Madam Speaker, in the absence of the Prime Minister my question is for the Deputy Prime Minister. He will likely be aware that many of the more than
1.5	million Canadians who are jobless are either previous or prospective employees of that group of Canadian entrepreneurs whom we often call the risk takers, whether they be small businessmen, farmers, Fishermen et cetera. I think the Deputy Prime Minister is also aware that within this group are those who are deterred from fulfilling their traditional job creating role by high interest rates, inflation or unemployment. Simply because at this moment they do not have sufficient trust or confidence in either the country or the Government to invest the pool of capital they have in a more traditional job creating sense, they are sitting on it.
Does the Deputy Prime Minister not agree that the necessary trust and confidence within that group cannot be restored by a Royal Commission which might report in three years from now, or in a Throne Speech that might be months away? If the Deputy Prime Minister does agree, first, with the problem and, second, with the solution, what immediate steps does the Government propose to take to restore that very necessary trust and confidence in this, the most dynamic segment of our society?


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: Madam Speaker, the Hon. Member is speaking as if the investor were operating in some sort of an abstract world. He is operating in a world economy that is presently characterized by very high inflation which has resulted in high unemployment and high interest rates. It has been my belief, and it has not changed since I ceased being Minister of Finance, that the basic pre-condition for the restoration of confidence and trust in the future of the Canadian economy is to make progress in the reduction of

November 8, 1982
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inflation in the country. That is one of the pre-conditions. It is not the sole element.
The Minister of Finance in his economic statement underscored the importance of the six and five program, and added further elements in the process of building up that trust and confidence. The Hon. Member will realize that concrete evidence of recovery in other countries such as the United States would do as much to restore trust and confidence for the investor as any of the notions that he has put forward to the House.


PREPARATION OF SPEECH FROM THE THRONE
William Herbert Jarvis: Madam Speaker, the concrete evidence is that over the last few days these people who normally create more jobs than any other segment of society, "the engine of recovery", to use the words of the Minister of Finance, instead of buying a pick-up truck, a piece of equipment, or embarking on imaginative projects or marketing programs, have been buying Canada Savings Bonds, not out of patriotism but simply because they do not have the confidence to do anything with that capital except to let it sit another year. That is to that issue and I wish and I plead with the Deputy Prime Minister that he direct himself. They are not deterred by international condition. They simply do not have enough confidence at the moment to fulfil their traditional role.
The House Leader indicated a week or two ago that the Throne Speech is ready. I am now a little concerned because the Prime Minister said on the weekend it was still being worked on in terms of some recovery program.


Madam Speaker:: Order. The Hon. Member took a minute and a half on his first question. The second one should be very much shorter.


William Herbert Jarvis: I apologize, Madam Speaker. Is the Throne Speech ready? If not, when does the Deputy Prime Minister expect it to be ready and when might this House hear it?


Allan Joseph MacEachen: Madam Speaker, when it is the intention of the Government to present the Speech from the Throne, the House will be notified. That decision has not yet been taken. I believe the Government House Leader has had consultations with respect to the legislative program, with his opposite numbers. I believe the progress that is now being made on that important legislative program will justify its completion or, indeed, substantial progress in that direction, before bringing down a Speech from the Throne.


USE OF ENERGY TAX TO ENCOURAGE CANADIAN OWNERSHIP
William Herbert Jarvis: Madam Speaker, I have a final supplementary. In terms of priority, will the Deputy Prime Minister agree that the Government, collecting over $700 million a year for its Canadian ownership program-four cents a gallon-and knowing the difficulty the Minister of Finance has with a lack of funds for job creation, could use that in
excess of $700 million far more wisely and far more effectively on programs that would create jobs, whether it be research and development, capital equipment or whatever? In terms of priority, will he agree that would be a much more effective use of that $700 million in taxpayers' money, given the 1.5 million unemployed today?


Allan Joseph MacEachen: Madam Speaker, the Hon. Member realizes that there are a number of objectives that have to be pursued simultaneously in the national interest. The Canadian ownership charge has been approved by Parliament for a specific purpose. It cannot be used for any other purpose except the purpose that was decided upon by the Parliament of Canada, namely, that it should be used to increase the ownership of Canadians in the energy sector.
The Hon. Member has talked about the necessity for job creation. The Minister of Finance, in his recent statement, has put forward very large sums, added to the large sums already available for job creation in the country. Both these objectives are therefore being pursued simultaneously by the Government.


MACDONALD ROYAL COMMISSION
Frederick James (Jim) Hawkes: Madam Speaker, my question is for the Deputy Prime Minister also and it concerns the appointment of the Macdonald Royal Commission. We do not know how much that will cost. We do know that the reporting date is three years in the future, but it is Canadians today who are out of jobs, Canadians who are feeling the effects of stress illness. I would like to ask the Minister whether or not he thinks another ivory-tower exercise of this kind is better than the Minister himself going back to his riding for one solid week to talk to the people who are in trouble and the people who have creative ideas on how to get the economy going. Will the Deputy Prime Minister commit himself to going back to his riding for one week to talk to the people, instead of giving us another ivory-tower exercise?


Allan Joseph MacEachen: Madam Speaker, I very much disagree with the Hon. Member's description of the proposed Royal Commission as an ivory-tower exercise. The Chairman of the Commission is not the kind of person who would conduct an ivory-tower exercise. It will be a down-to-earth and realistic appraisal of the long-term prospects of the Canadian economy and in what direction that economy ought to be encouraged to evolve in the medium term. There is nothing "ivory tower" about that exercise. I also would like to tell the Hon. Member that I do not need any advice from him
November 8, 1982

about how often I should go to my riding. I will take advice from my constituents on that point.


Frederick James (Jim) Hawkes: I wish the Deputy Prime Minister had the courage to put that to an election test. Maybe his constituents have a message for him.


COMMITTEE REPORT
Frederick James (Jim) Hawkes: The first item. Madam Speaker, on this list of tasks for the Royal Commission is "trends in labour market requirement and conditions". A committee of this House on which I served for 14 months prepared a massive report on labour market conditions and training. As Minister of Finance, he did not implement a single recommendation in that report after we spent hours and thousands of the taxpayers' dollars on it.
I wonder if the Deputy Prime Minister could at least change the terms of reference for this ivory-tower commission, pull that file off the shelf and get some action started today for Canadians, in the field of jobs, training, and things they need. Can the Minister do that?


Allan Joseph MacEachen: Madam Speaker, I think the Hon. Member should admit that action has already been taken on major aspects of the report to which he referred in his question.


PRESENCE IN GALLERY OF LORD PRIVY SEAL OF GREAT BRITAIN, BARONESS YOUNG
Madam Speaker:: I would like to draw the attention of the House to the presence in our gallery of the Right Hon. the Baroness Young, Lord Privy Seal and Leader of the House of Lords of Great Britain.


Some Hon. Members:: Hear, hear!


THE ECONOMY
Hon. Edward Broadbent (Oshawa):: Madam Speaker, I have a question for the Deputy Prime Minister. On the weekend we learned that Canada has the highest level of unemployment since 1936. We also learned from the Prime Minister on Friday night, in his speech to the Liberal Party, that the Government has now a five-point national economic recovery program which it will not bring in until sometime in the new year. We have in real numbers over a million and a half unemployed now. We are going to lose many thousands in
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terms of jobs, in addition, before Christmas. If the Government has a program, why, in heaven's name does it not bring it in now instead of waiting for another two months?


Allan Joseph MacEachen: Madam Speaker, may I read a couple of paragraphs from that excellent speech-


Some Hon. Members:: Oh, oh!


Allan Joseph MacEachen: -made by the Prime Minister at the outstanding convention held in Ottawa on the weekend.


Some Hon. Members:: Hear, hear!


Allan Joseph MacEachen: I wish the Hon. Member, and especially the Leader of the Opposition, had tuned in to the convention to see how political conventions are operated.


John Edward Broadbent: I went to another comedy instead.


Allan Joseph MacEachen: The Hon. Member asked about the Prime Minister's program for economic recovery. This is what the Prime Minister said:
We will build upon the success of six and five. We will build upon the new directions forecast by Marc Lalonde's economic statement. We will build upon this convention. And with that legacy, we will present to the Canadian people a new program for economic recovery.


REASONS FOR DELAY IN INTRODUCTION
John Edward Broadbent: Madam Speaker, that was almost as boring as when we heard the original from the Prime Minister. Is the Minister telling us there really is no new program, that what the Prime Minister and his wonderful staff hoked up was simply a regurgitation of what we already had presented to us in this Parliament and nothing new is forthcoming? Or, if there is something new, I ask my first question again: why does the Government not bring it in now?
Hon. Allan J. MacEachen (Deputy Prime Minister and
Secretary of State for External Affairs): Madam Speaker, I think the next paragraph-


Some Hon. Members:: Oh, oh!


Allan Joseph MacEachen: -will provide the answer to the Hon. Member's question. Madam Speaker, the Prime Minister went
on to say:
The details of that program are being worked upon and the process of consultation is going forward. But our direction is clear. To restore economic growth without inflation, we will move in five strategic areas:
First, we will put in place a national program to rebuild our communities, restore our infrastructure, and renew our industrial strenght. Right across Canada-in every region, in every city, in every village, there are roads to be built, sewers to be constructed, community projects to be advanced, ports to be deepened, or railway tracks to be laid.
That, Madam Speaker, is the first area of strategic advance planning which the Government is now undertaking.
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November 8, 1982
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REQUEST THAT GOVERNMENT TAKE ACTION
John Edward Broadbent: Madam Speaker, the Deputy Prime Minister can read very well. We now know why he was appointed Secretary of State for External Affairs. The Minister smiles there at his own cleverness and his infinite intellectual capacity in being able to read one of the Prime Minister's speeches. But I say to him a lot of unemployed Canadians out there do not take this matter as a joke, not one little bit.
If the Minister says now that there are sewers to be constructed, and if there are roads to be built, 1 say to him that there are sewers to be constructed now, roads to be built now, and why can the Government not do something now instead of waiting until January?


Allan Joseph MacEachen: Madam Speaker, the Hon. Member asks why is the Government not doing something now. The Minister of Employment and Immigration has put out $500 million in order to achieve employment objectives. Today he is consulting with one of the provincial governments in order to advance that program which is being put in place now, I tell the Hon. Member for Oshawa.


PRESENCE IN GALLERY OF DEPUTY PRIME MINISTER OF ARAB REPUBLIC OF EGYPT, HIS EXCELLENCY KAMAL HASSAN ALI
Madam Speaker:: I have the honour to call attention to the presence in our gallery of a distinguished visitor in the person of the Deputy Prime Minister of the Arab Republic of Egypt and Minister of Foreign Affairs, His Excellency Kamal Hassan Ali.


Some Hon. Members:: Hear, hear!


MACDONALD ROYAL COMMISSION
Miss Pat Carney (Vancouver Centre):: Madam Speaker, my question is also addressed to the Deputy Prime Minister in regard to the appointment of former Finance Minister Donald Macdonald as Chairman of the Royal Commission on Economic Union and Development Prospects for Canada. Considering the fact that, when Mr. Macdonald was Minister of Finance, his budget deficit nearly doubled from $5 billion to more than $8 billion and unemployment rose from 7 per cent to 8.2 per cent, what exactly were the economic qualifications for the chairmanship of this commission?


Allan Joseph MacEachen: Madam Speaker, I
think anyone who knows the background of Mr. Donald Macdonald knows that he is uniquely qualified to head such a Royal Commission. He has had long and successful service in the House of Commons. He has acquired a knowledge of the economic situation both at home and abroad because of the responsibilities he has discharged in Canada. In recent years he has had considerable experience in the private sector.


Miss MacDonald:: And as a Liberal!


Allan Joseph MacEachen: I believe that this experience, combined with his acute intelligence and organizational ability, will provide the leadership that is required to make this an effective Royal Commission.


COMMENTS MADE BY FORMER AUDITOR GENERAL
Pat Carney: Madam Speaker, I have a supplementary question for the Deputy Prime Minister, if I could have his attention. He spoke about the unique record of Mr. Macdonald. I should like to point out that during his term as Finance Minister the Auditor General's report said that "Financial management and control in the Government of Canada is grossly inadequate". The Lambert Royal Commission on Financial Management and Accountability said that under Macdonald's rule there was a "grave weakening and in some cases an almost total breakdown in the chain of accountability," first, within government and, second, within Parliament. How can Canadians have trust and confidence in a Chairman with that kind of track record?


Allan Joseph MacEachen: Madam Speaker, the Hon. Member is going back to comments that were made several years ago by outside observers of the parliamentary scene.


Mr. Clark:: The Auditor General.


Allan Joseph MacEachen: I am sure if the Hon. Member had been in the House with Mr. Macdonald, he would have effectively answered any comments that were made.


Charles Joseph Clark: No, he didn't; he quit and ran.


Allan Joseph MacEachen: He told the House at that time that he had taken steps to correct these difficulties. Subsequent Ministers have done the same thing.


NORTHERN AFFAIRS
Dave Nickerson: Madam Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. The Report of the Parliamentary Subcommittee on the Northern Canada Power Commission
November 8, 1982

was tabled in the House of Commons on April 7, 1982, seven months and one day ago, but so far there has been no response to this report from the Minister. When will he implement the recommendations contained in the Penner Report?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, since that time there has been an urgent request from northerners for the Government to forgo a good deal of expenditures through the tax system, and to extend northern benefits. At considerable cost, and to the entire satisfaction of all northerners, that is exactly what the Government did. That is a high expenditure item and, as you know, other items in the Penner Report also involve millions of dollars. They have to be considered in terms of their over-all cost, in view of our financial situation. This is especially so in view of the fact that the Official Opposition keeps talking about our horrendous deficit. Their position should be consistent, also.
More specifically, the Penner Report is being considered within the Department by the Energy Task Force in which territorial officials are involved. I hope to put that before my Cabinet colleagues for consideration some time prior to the end of the year.


Dave Nickerson: Madam Speaker, you ask a question on the Northern Canada Power Commission and get an answer pertaining to the remission order on northern taxation. But I thank the Minister for that information anyway.


COMMISSION DEBT
Dave Nickerson: The Minister will know that about one-third of the power cost in the Yukon and Northwest Territories is due to the amortization of about $200 million in debt that has built up over a period of years. Much of this debt is due to previous mismanagement. One of the recommendations of the Penner Report was to liquidate this debt. Will the Minister take to Cabinet the recommendation that that outstanding debt be liquidated so that power costs can be brought down by some 30 per cent?


John Carr Munro: Obviously, Madam Speaker, that is one of the key elements of the Penner recommendations, so we would have to give consideration to it. The Hon. Member should keep in mind that it is an additional expenditure at the time when, as Minister, I am trying to find money for many additional expenditures, whether it be for Cyprus-Anvil in the Yukon, or infrastructure throughout the Territories. It means a loss of $17 or $18 million in interest payments per year to the Government. That is what we have to look at, and certainly we will be looking at that very thing.
Oral Questions FINANCE


IMPACT OF MARINE FUEL TAX
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Madam Speaker, I have a question for the Minister of Finance, and I am pleased that the Minister of Transport is also in his seat.
In light of the charges made yesterday and today by Admiral Timbrell, president of Dominion Marine Association, with respect to the economic impact of the discriminatory marine fuel tax, will the Minister take an early opportunity to meet with the President of DMA and his officials for the purpose of discussing in detail the economic impact and effect of this continuation of a discriminatory tax?


Hon. Marc Lalonde (Minister of Finance):: First of all, Madam Speaker, I should like to challenge the assertion made by the Hon. Member that the tax is discriminatory; it is not discriminatory at all. It is the same tax that is applied to Canadians and American lake ships when they are engaged in international trade. Both are required to pay the international price for the oil they use for their transportation. This tax has no discriminatory element at all.
As far as the suggestion made by the Hon. Member I receive representations on the subject is concerned, I have indicated in the House before that I am open to representations on any particular subject having to do with taxation. If Dominion Marine Association has representations to make, it can make them to me. I will be happy to look at the representations.


J. Michael Forrestall: Madam Speaker, the Minister invites comments. Of course he will be aware that this fuel tax with respect to international aviation flights has not only been removed but that rebates have been made to that industry, while they have not been made to the marine industry.


REQUEST THAT GOVERNMENT REVIEW TAX
J. Michael Forrestall: Madam Speaker, I put the question to the Minister again and ask whether he is prepared even to entertain the possibility of a review of this matter. It has cost not only the Great Lakes Seaway, but the St. Lawrence system, a significant amount of money this year and, as well, has probably cost hundreds and hundreds of Canadian seamen their jobs.


Marc Lalonde: First of all, Madam Speaker, I should like to remind the Hon. Member that since February the tax on aviation fuel has been transformed to a new form of taxation. That tax applies to all aircraft flying on international flights.
Second, there is no competition for the transportation of wheat, iron ore, or coal between aircraft and ships. I have not heard from the airline industry that there was any problem of unfair competition in that regard.
Third, I fail to see how the tax could have caused the loss of jobs when, in effect, it applies in exactly the same way to

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Oral Questions
American and Canadian carriers engaged in international transportation. As a matter of fact, because of the difference in the exchange rate between Canadian and U.S. dollars, Canadian operators already benefit and have a very significant advantage resulting from the lower value of the Canadian dollar versus the U.S. dollar. They are in a good position to compete if they run their businesses efficiently.


PENITENTIARIES
Mr. Svend J. Robinson (Burnaby):: Madam Speaker, my question is directed to the Solicitor General. Late last week the respected Moderator of the United Church of Canada released a report containing very serious allegations of torture and brutality on the part of a small number of guards at Archam-bault Prison following the tragic deaths there in the July 25 riot.
In view of the fact that this report by the Right Rev. MacDonald repeats earlier allegations by Charles Kolb of the International Human Rights Law Group, which the Minister glibly dismissed as sensational, is the Minister now prepared to order a full, independent, public inquiry into these very serious charges of brutality and lawlessness at Archambault institution?


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, I do not agree at all with the characterization which the Hon. Member has given to the new MacDonald report. In fact the allegations of torture and brutality were not supported by the MacDonald report; they were referred to without indicating in any way whether the Moderator agreed or disagreed with them. I am looking forward to meeting him. I found the report a sincere one. I would very much like to have that meeting.
In the meanwhile, one additional step that I would like to take across the whole Correctional Service of Canada is to require that if and when an incident of the sort that took place at Archambault ever takes place again, the ombudsman of the inmates, that is, the correctional investigator, be called in at once and be present as much as possible during the incident and during its aftermath, not only as a curb on the possibility of such events actually occurring, but also as a curb on and confirmation of allegations which are made subsequently, from an independent source, of what actually did take place during the incident.


Svend Johannes Robinson: Madam Speaker, once again we have the Minister trying to cover up responsibility for wrongdoing at Archambault, just as he did at Dorchester two years ago when there were allegations of beatings and gassings.
Clearly the prison system in Canada is in a state of crisis today. We have seen it right across the country.


REQUEST FOR COMMITTEE STUDY OF LENGTHY SENTENCING PRACTICE
Svend Johannes Robinson: Madam Speaker, in view of the obvious problems which have been identified by prisoners, prison guards and, indeed, a former Liberal Solicitor General, with the mandatory provision for a 25 year sentence without eligibility for parole, is the Minister prepared to recommend that the Justice Committee study fully and comprehensively in the near future the ramifications of the 25 year sentence before we see further outbreaks of violence in the Canadian prison system?


Robert Phillip Kaplan: Madam Speaker, as to the suggestion that this hostage-taking incident proves a deterioration taking place in the Correctional Service of Canada, I think the statistics show quite the opposite. In fact the number of hostage takings which have occurred so far this year, as regrettable as each of them is, is below the number which has taken place in any year since 1974. As the Hon. Member very well knows, a very important measure of stability in the institutions, that is, the measure of major incidents, is down by 50 per cent from what it was prior to 1980. I think a serious look at the Correctional Service of Canada would show improvement, not deterioration.
As to his suggestion that the 25 year sentences should be reviewed, 1 admit that I am concerned about the implications of the 25 year sentence. I am having the Correctional Service and my secretariat look into them, but I think it is far too early to draw conclusions about the impact of the 25 year sentence. I have met, as perhaps my friend has, with 25-year inmates across the system, and I find despair is as much a consideration as extra hostility on the part of these individuals. I would like to know more about them, and I think that with only 171 or so individuals having had that sentence since 1976 it is too early for him to draw horrendous conclusions-


Madam Speaker:: Order.


TRANSPORT
Mr. Alexandre Cyr (Gaspe):: Madam Speaker, my question is directed to the Minister of Transport and concerns the inquiry conducted by Justice James Hugessen following the accident with a tanker, the Hudson Transport, on the St. Lawrence at Christmas 1981. In his report, Justice Hugessen made forty recommendations regarding operations on board ship, with special emphasis on the crew and on rescue operations in the Gulf. My question is as follows: Could the minister inform us how many recommendations have been accepted and
November 8, 1982

more specifically, whether he approved the recommendation dealing with the availability of a search and rescue ship on an hour's notice along the Gaspe coast?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, Justice Hugessen did indeed make a number of recommendations. It is common practice for the Department of Transport to consider these recommendations and to consult with experts, which was done in this particular case, and subsequently, to publish a report indicating the recommendations the department is prepared to accept and those it cannot accept. That is the usual process. In this case, as far as Recommendation 16 is concerned which indicates that a ship must be ready to go to the rescue of a ship in distress on an hour's notice, it is already a Department of Transport regulation. In the case of the Hudson, the regulation was not followed as a result of some very unpleasant business which occurred in Quebec City. So, the regulation does exist. As far as safety on the St. Lawrence is concerned, at the present time we have the Ville-Marie, which is now in service, and this winter, the Simon Fraser will also be put into service, in order to be prepared for all eventualities on the St. Lawrence.


REGIONAL ECONOMIC EXPANSION
Stan Darling: Madam Speaker, my question is directed to the Minister of Industry, Trade and Commerce. I might say that I have addressed this question to his predecessors, the President of the Treasury Board, and the Minister of Fisheries and Oceans. I presume he is aware that the Department has been studying for some months now the proposal to extend the boundaries of regions eligible for DREE grants. The Province of Ontario has particular significance to me because part of my riding, the Regional Municipality of Muskoka, is not covered. Could the Minister bring us up to date on this situation and on what the decision will be?


Hon. Ed Lumley (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, there is no decision forthcoming in the immediate future of which I am aware with respect to changing any boundaries in Ontario with respect to DREE.


REQUEST THAT GOVERNMENT HELP PRIVATE INDUSTRY
Stan Darling: Madam Speaker, I wonder if the Minister could have a word with his predecessor twice removed, because I was informed categorically that there was a study being made and serious consideration being given to parts of central Ontario, to extend the boundaries. That is an area in which there is high unemployment. I am quite sure, if the Government is now doing everything possible to provide jobs, that it will help private industry with
Oral Questions
these grants to do the job itself, and they will not be only 20 week jobs, either.


Edward C. Lumley: Madam Speaker, I did not say that the study was not under way. I just said that I did not think there would be a decision forthcoming in the immediate future with respect to any changes in the boundaries of DREE-designated areas.


CRIMINAL CODE
Hon. Elmer M. MacKay (Central Nova):: Madam Speaker, my question is directed to the Minister of Justice. It is with respect to recent developments in the so-called breathalyzer provisions of the Criminal Code. In view of the solemn promises which were given around 1969 by the Liberal Government-and I believe John Turner, who was then Minister of Justice-that at the first opportunity accused persons given the breathalyzer test would be provided with an independent analysis facility, a container suitable for independent analysis of their breath, and in view of recent statements by Douglas Lucas, the Director of the Centre for Forensic Science in the Department of the Solicitor General, that this is now possible, will the Minister of Justice take steps to fulfil that commitment and alleviate the incriminatory and Draconian aspects of the legislation about which so many Members had reservations at the time it was brought into the House?


Hon. Mark MacGuigan (Minister of Justice):: Madam Speaker, I thank my hon. friend for bringing this matter to our attention. As he knows, the reason for the delay over these years has been the technical problem. I want to assure him that, in light of these developments, the matter is now under active study.


FISHERIES
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, my question is directed to the Minister of Fisheries and Oceans. We are looking forward to meeting him in committee. Could he say yes or no right now as to whether he is prepared to refer the Pearse Commission report on the Pacific fisheries to the Standing Committee on Fisheries and Forestry?


Hon. Pierre De Bane (Minister of Fisheries and Oceans):: Madam Speaker, I intend to go and meet with as many groups in the West as possible within the next ten days. I would be very interested in having the views of the Hon. Member, but personally I do not think fishermen on the West Coast are

November 8, 1982
Oral Questions
awaiting more and more talk from us. Dr. Pearse has presided over that Royal Commission of Inquiry. I have met with him. At the moment I am studying his report and consulting with various sectors. I hope to be starting the implementation of some of his recommendations, in the very near future.


POSITION OF MINISTER
Donald W. Munro: Madam Speaker, I gather from the answer that there is no intention to refer that particular report to the Standing Committee. Would the Minister then be prepared to comment on remarks made by Dr. Pearse in paragraphs 4 and 6 of that Report, since he has been studying it? Dr. Pearse said, "My Inquiry pointed inescapably to deficiencies of Government policy, uncertain objectives, weak and outdated legislation, bad organization, contradictory programs and confusion." In paragraph 6 he said, "The policies are neither coherent nor well suited to modern needs." Would the Minister be prepared to comment on that right now?


Pierre De Bané: Well, Madam Speaker, it is precisely because of the need to take action that I would not think that the fishermen on the West Coast would like to see more talks take place but that we try to implement concrete steps. This is what I intend to do in the very near future.


Donald W. Munro: Will we ever see it referred to the Committee?


LABOUR RELATIONS
Mr. Maurice Foster (Algoma):: Madam Speaker, my question is directed to the Minister of Labour. In view of the continuing strike at Nordair which has been going on for some four or five months, and which is having a very negative impact in many parts of eastern Canada, and had been a tremendous inconvenience to travellers in northern Ontario and northwestern Ontario especially, is he prepared to take any action now to see that this dispute is resolved?


Hon.   Chas. L. Caccia@Minister of Labour: Madam Speaker, the company has now indicated that it is willing to enter into mediation with the Aerospace International Union of Machinists in the dispute involving the clerical bargaining unit. As soon as I learned this, I appointed a mediator. He will be available as of today to assist in settling the dispute.


AVIATION SAFETY
Mr. J. R. Ellis (Prince Edward-Hastings):: Madam Speaker, my question is for the Minister of Transport. The Minister has had the report of the Minister's Advisory Committee on the Commission of Inquiry into aviation safety before him for some time now. Would he tell the House if he intends to refer that Report to the Standing Committee on Transportation for their comments?


Jean-Luc Pepin: Madam Speaker, I assume that my hon. friend is talking about the Dubin Report.


NATURE OF REPORT
John Raymond Ellis: No, Madam Speaker, the Report that I am talking about is that of the Minister's Advisory Committee. I read it a moment ago. The Minister's Advisory Committee on the Commission of Inquiry into Aviation Safety, which was an outfall of the Dubin Report-that is the Report which I would like to see referred to the Standing Committee on Transportation.


Jean-Luc Pepin: Madam Speaker, as I recall, this is an internal document. The advice of the committee that I have had on the subject will be brought forward in the Canadian Air Safety Board Bill which is now ready to be introduced in the House. I hope to send it for discussion to the Committee on Transportation before the New Year.


ATOMIC ENERGY OF CANADA LIMITED
Mark Willson Rose: Madam Speaker, yesterday's Toronto Star carried a statement which I think is of interest to Canadians, and to the Minister of Energy, Mines and Resources in particular. There was a statement in yesterday's Toronto Star attributed to a Mr. Egon Freeh which dealt with the permanent waste disposal of some 500,000 tonnes of atomic waste. That represents the size of a hockey rink filled three feet high. He said, "If it weren't for the public pressure we wouldn't be engaged in disposal research." Would the Minister tell us if the Government's attitude is the same as expressed by Egon Freeh and, if not, why does the Government not remove the responsibility for waste disposal research for AECL and give it to an independent body?


Hon. Jean Chretien (Minister of Energy, Mines and Resources):: Madam Speaker, I think that AECL is working in that area but there is a review committee which supervises everything and which has issued some reports on research
November 8, 1982

activities. I believe that the reports have been quite positive so far, and that the work is being done properly. It is independently supervised, and I think that the mechanisms which have been installed for this purpose are satisfactory.


Mark Willson Rose: Not according to the Liberal Member for Thunder Bay-Atikokan who says, "I have never had experience with any group that I mistrust more. They operate in a semi-secret way and they use a big public relations operation to put people off."


SUGGESTED ESTABLISHMENT OF INDEPENDENT REGULATORY AGENCY
Mark Willson Rose: Madam Speaker, secretiveness and mistrust are not what Canadians expect from a regulatory agency. Will the Minister assure Canadians that he will give deep consideration to having an independent regulatory body deal with the research into atomic waste disposal, and have it set up in such a way that it is out of the reach of the nuclear lobbyists?


Joseph Jacques Jean Chrétien: Madam Speaker, I have the names of all those on the advisory committee. There are some very independent Canadian groups, such as the Biological Council of Canada, the Chemical Institute of Canada, the Canadian Geoscience Council, the Canadian Institute of Mining and Metallurgy, the Canadian Association of Physicists, and the Canadian Association of Biological Societies. I suggest that these people who are in the technical advisory role are quite independent in nature. I think that to say that just because they are working with AECL they cannot have an independent view of what is happening, is an exaggeration. If someone has a specific case for complaint of which they can advise me, I will certainly look into that, but no one has talked to me about it as yet. I have seen it in the paper.


TRANSPORT
Mr. Rene Gingras (Abitibi):: Madam Speaker, my question is directed to the Minister of Transport. As you know, this week the Minister of Transport met with Quebecair employees who are suffering the consequences of a rather unusual situation. The owners of Quebecair are playing politics and the employees are bearing the brunt of the situation. I would like to ask the Minister of Transport what happened at his meeting with representatives of the flight attendants, pilots, maintenance crews and ground personnel, what the results of this meeting were and whether there is still hope for Quebecair employees?
Oral Questions


Jean-Luc Pepin: Madam Speaker, I tried to explain to them the facts about the current situation, but obviously they are caught or at least they get the impression they are caught in a crossfire between the federal and the provincial government. I really do not know what Mr. Clair, the Quebec Minister of Transport, intends to do. He seems to have taken control of the destiny of Quebecair, which would seem to point to control of the company by the Quebec government, but the minister announced that the government was no longer interested because it could not invest any more in the company. In any event, I am willing, since I was supposed to see the minister on Friday about something else, to see him before then to try and find out what his intentions are and to discuss all aspects of the matter with him.


UNEMPLOYMENT INSURANCE
Mr. Paul Dick (Lanark-Renfrew-Carleton):: Madam
Speaker, my question is directed to the Deputy Prime Minister. Because of the great concern that has been expressed, and indeed the money that has been allocated for job creation programs, and because the Liberal Government has set up a number of job creation programs under Section 38 of the Unemployment Insurance Act whereby people who have fallen off of unemployment insurance can not get one of those jobs and people presently collecting unemployment insurance can get those jobs, does the Government not feel that it is unfair to discriminate against those who are the worst off in this situation?
[ Translation]


Mr. Remi Bujold (Parliamentary Secretary to Minister of Employment and Immigration):: Madam Speaker, as the Hon. Member just pointed out in his question, under the provisions of Section 38 of the Unemployment Insurance Act, only individuals who are drawing unemployment insurance benefits are eligible. However, he forgot to mention, regarding those who have exhausted their unemployment insurance benefits or are about to do so, that the department has already taken action to deal with the situation. This summer, the department conducted a study which showed that the number of people in this situation would increase this fall and next spring. Therefore, we established in our own department a follow-up system for all Canada Employment Centres, and as announced by the Minister of Finance three weeks ago, a job creation program is directly aimed at these people, and the Department of Employment and Immigration is taking all the necessary measures to deal with the distressing problems now facing this particular group.

November 8, 1982
Supplementary Estimates


GOVERNMENT POLICY
Paul Wyatt Dick: Madam
Speaker, I know of two individual cases where people have used up their unemployment insurance funds and are the only qualified people in their area to get on one of the job creation programs under Section 38 of the Unemployment Insurance Act, yet they cannot be employed because they do not fit the criteria set out by the Government. Is it a new tenet of policy, in spite of having the right of affirmative action enshrined in the Canadian Constitution, that the Government will not give affirmative action programs specifically to help those who are in the worst economic condition?


Joseph Roger Rémi Bujold: Madam Speaker, I believe I have partly answered the Hon. Member's first question. I agree that Section 38 of the Unemployment Insurance Act clearly specifies that workers who may work on these projects must be receiving unemployment insurance benefits. However, the government has already taken action to deal with the group to which the Hon. Member is referring, and the job creation program, whose criteria are to be announced shortly by the Minister of Employment and Immigration, will in fact be responding to the situation described by the Hon. Member.



ROUTINE PROCEEDINGS


[Stage Direction]
A message from His Excellency the Governor General transmitting Supplementary Estimates (B) of sums required for the service of Canada for the fiscal year ending March 31, 1983, and in accordance with the provisions of the Constitution Acts, 1867 to 1982, was presented by Hon. Herb Gray (President of the Treasury Board) and read by Madam Speaker to the House.

Hon. Andre Ouellet (Acting President of the Privy Council and Minister of Consumer and Corporate Affairs):: Madam Speaker, pursuant to the provisions of Standing Order 59, I move, seconded by the President of the Treasury Board (Mr. Gray):
That the Supplementary Estimates (B), 1982-83, tabled earlier this day, be referred to the several Standing Committees of the House as follows:
Because the list is rather long and there is a detailed allocation of the estimates to the committees, if it is agreeable to the House, I ask that the list be printed in Hansard as if it had been read.
[Editor's Note: List referred to above is as follows:]
November 8, 1982-Supplementary Estimates (B) 1982-83 referred:
To the Standing Committee on Agriculture:
Agriculture Votes 5b, 10b, 15b and 40b To the Standing Committee on Communications and Culture:
Communications Votes lb, 5b, 10b, 15b, 20b, 35b, 41b, 50b, 65b and 80b Secretary of State Votes lb, 5b, 10b, 25b, 30b, 35b, 40b, 45b and 55b To the Standing Committee on External Affairs and National Defence:
External Affairs Votes lb, 5b, 10b, LI6b, LI7b, LI8b, 25b, 30b and 35b To the Standing Committee on Finance, Trade and Economic Affairs:
Economic Development Vote 1 b Finance Votes lb, 11b, 12b, L13b and 20b
Industry, Trade and Commerce Votes lb, 10b, 26b, 27b, L35b and 45b National Revenue Vote 5b
To the Standing Committee on Fisheries and Forestry:
Environment Votes 5b, 10b, 15b and 30b Fisheries and Oceans Votes lb, 5b and 10b To the Standing Committee on Health, Welfare and Social Affairs:
Consumer and Corporate Affairs Votes 1 b, 2b, 3b and 4b National Health and Welfare Votes 5b, 10b, 15b, 20b and 40b Social Development Vote lb
To the Standing Committee on Indian Affairs and Northern Development:
Indian Affairs and Northern Development Votes lb, 5b, 15b, 20b, 25b, 30b, 45b, L50b, L55b and L60b
To the Standing Committee on Justice and Legal Affairs:
Justice Votes lb, 5b and 25b
Solicitor General Votes lb, 5b, 10b, LI4b, 15b and 20b To the Standing Committee on Labour, Manpower and Immigration: Employment and Immigration Votes 10b, 15b and 20b Labour Votes lb and 5b
To the Standing Committee on Miscellaneous Estimates:
Privy Council Votes lb, 2band 15b Science and Technology Vote 15b Supply and Services Votes 1 b and 15b To the Standing Committee on National Resources and Public Works:
Energy, Mines and Resources Votes 5b, 10b, 40b, 45b, 55b and 81b Public Works Votes 10b, 11 b, 40b, 55b and 60b To the Standing Committee on Privileges and Elections:
Privy Council Vote 10b
To the Standing Committee on Regional Development:
Regional Economic Expansion Votes 10b, 25b and 30b To the Standing Committee on Transport:
Transport Votes lb, 10b, 35b, 45b, 50b, 55b, 60b, 65b and 80b To the Standing Committee on Veterans Affairs:
Veterans Affairs Votes lb, 10b, 20b and 30b


Mr. Baker (Nepean-Carleton):: Madam Speaker, I do not think there is anything wrong with the suggestion that they be included in Hansard as read. However, before consent is given, I wonder if the Hon. Gentleman would assure us that these
November 8, 1982

referrals are in accordance with the usual practice and that there has been no departure from that practice. That will save us all a great deal of trouble.


André Ouellet: Yes, Madam Speaker.


Walter David Baker: Consent is therefore given, Madam Speaker.
[ Translation]


Madam Speaker:: Does the House then give its unanimous consent to this motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David P. Smith: Madam Speaker, the following questions will be answered today: Nos. 4,104, 4,251, 4,377 and 4,417.


Mr. MacKay: 1.	(a) Did Mr. John W. Sandford, President of de Havilland Aircraft, come to de Havilland from the Admiral Corporation (b) what experience, if any, did he have in aircraft, aeronautical or any other business pertaining to aviation?
2.	Does Mr. Douglas Kendall hold the office of Chairman of the Board of de Havilland Aircraft and does he also hold the position of Chairman of the Enterprise Development Programme of Canada?


Edward C. Lumley: In so
far as the Department of Industry, Trade and Commerce is concerned: 1. (a) Mr. Sandford was President of Canadian Admiral Corporation Ltd., from 1975 to 1978. (b) Mr. Sand-ford's appointment is an internal matter of de Havilland Aircraft of Canada Ltd. While the information requested is of a personal nature, the disclosure of which is governed by the Human Rights Act Part IV, a copy of Mr. Sandford's curriculum vitae is attached with his consent.
2.	Yes.
Resume John Sandford
Mr. Sandford's background includes over 16 years with Rockwell International. During that period he has served in many capacities and in a number of divisions.
During the past three years he has been the President of Canadian Admiral Corporation, Ltd. Canadian Admiral manufactures and distributes consumer products throughout Canada. Their annual sales are approximately $120 million.
Order Paper Questions
They have plants in Mississauga and Ottawa for the manufacture of refrigerators, colour TV's, microwave ovens, radiation detection equipment, electric ranges and home heating furnaces.
Before joining Canadian Admiral Mr. Sandford spent a year as a member of the Rockwell headquarters staff. He was one of a small team responsible for the integration of Admiral into the Rockwell organization, following the 1974 acquisition. His prime areas of responsibility were engineering, product design and plant operations in the United States, Canada and overseas.
Mr. Sandford joined Rockwell International in 1962. Initially his career involved engineering assignments on the Appollo spacecraft and the Saturn V launch vehicle, used for the manned lunar mission. As a director of advance launch systems, his responsibilities included upgraded versions of the Saturn V, new rocket systems and nuclear rocket stages.
Starting in the second half of the 1960s he headed up the design investigation which led to the space shuttle. He was responsible for Rockwell's winning proposal to NASA for the design, development and production of the $5.2 billion shuttle vehicle system. He left the shuttle program early in 1973 to become a director of engineering and product development for the General Aviation Divisions of Rockwell.
Mr. Sandford's background in aeronautics started with Westland Aircraft, England, where he was an engineering apprentice working on various fixed and rotating wing aircraft designs. In 1957 he immigrated to Canada and joined Avro Aircraft in Malton. Following the cancellation of the Avro Arrow program he joined with five other engineers and formed Avian Industries of Georgetown, Ontario.
Mr. Sandford has a master's degree in aeronautical engineering and is a professional engineer of the Province of Ontario. He lives in Mississauga with his wife and two children.


Mr. Crosby: 1.	Does the Department of the Environment have written rules or regulations governing the conduct or standards of behavior for employees of the Department and, if so, are they embodied in a Code of Conduct or other specific document and is the Code or document available to the public?
2. In the five years preceding April 1, 1982, were any employees of the Department disciplined by way of suspension, dismissal or otherwise for violations of any rules or regulations governing the conduct or standards of behaviour for departmental employees and, if so, in each case, what was the name of the employee and the date of the disciplinary action?


Hon. John Roberts (Minister of the Environment):: 1. The
Department of the Environment does not have a written Code of Conduct per se; however, guidelines for employees concerning conditions of employment are contained in the following documents: Departmental Disciplinary Guidelines, Departmental Conflict of Interest Guidelines. These documents are available to all Departmental employees; they are also available to the public on request.

November 8, 1982
Order Paper Questions
2. Over the five years preceding April 1, 1982, and as permitted by the availability of records, the following numbers of disciplinary measures have been imposed for breaches of behaviour. The figures on written reprimands were available for a two year period only.
1977-1978	Written Reprimands	Suspensions 15	Discharges1978-1979	-	7	21979-1980	-	7	21980-1981	194	66	-1981-1982	247	44	2
Support was provided to trials of the Royal Air Force Buccaneer aircraft from September 28 to November 4, 1981. The trials involved delivery of inert laser guided bombs.
A joint Canadian, Netherlands and Norwegian torpedo test program was carried out at CFMETR, Nanoose, B.C. in the summer of 1980.
On behalf of the United Kingdom tests were conducted in 1977 at PETE, Nicolet, Que., to determine the effect on landmines of prolonged burial in frozen ground.
To be consistent with the provisions of the Canadian Human Rights Act we are not providing names.


Mr. Manly: 1.	During (a) 1977 (b) 1978 (c) 1979 (d) 1980 (e) 1981 (f) 1982, were Canadian sites used by the United States for weapons testing and, if so, what were such sites?
2.	During the same years, were Canadian sites used by any other foreign governments for weapons testing and, if so, what were such sites?
3.	During the same years, were sites or training facilities in Canada used by foreign governments for military training or any other military exercise and, if so, what were such sites or training facilities?


Hon. J. Gilles Lamontagne (Minister of National Defence):: 1. (a), (b), (c), (d), (e) and (f) Canadian Forces personnel, with U.S. observers present, tested on behalf of the United States, torpedoes in an exercise configuration (no explosives) in each of the years 1977 to 1982. These tests were conducted at Canadian Forces Maritime Experimental and Test Ranges (CFMETR), Nanoose, B.C. and are in accordance with a Canada-United States International Joint Agreement effective April 14, 1976.
In the winter of 1977/78 tests to determine the effect of high air density on the projectile trajectories of 155mm shells were conducted on behalf of the United States at the Defence Proof Engineering Test Establishment (PETE) at Nicolet, Que.
2. (a), (b), (c), (d), (e) and (f) The following tests were conducted on behalf of the United Kingdom at Canadian Aerospace Engineering Test Establishment (AETE), Cold Lake, Alta, and on Primrose Lake Evaluation Range (PLER).
Cold weather systems trials on a Royal Air Force Hawk aircraft in both ground and flight environment from December, 1977 to January, 1978. These tests involved gun firings and delivery of bombs and rockets. All stores were inert or practice.
Support was provided to trials of Royal Air Force Harrier aircraft on April 24 and 25, 1980 in conjunction with Exercise MAPLE FLAG. The trials involved delivery, single and in salvo, of inert bombs.
3.	Yes. See table below.
Year
1978
1980
1982
Location	Country
Petawawa, Ont.	United Kingdom
Suffield, Alta.	United Kingdom
Wainwright, Alta.	United Kingdom
Shilo, Man.	Federal Republic of Germany
Goose Bay, Nfld.	United Kingdom
Petawawa, Ont.	United Kingdom
Suffield, Alta.	United Kingdom
Wainwright, Alta.	United Kingdom
Shilo, Man.	Federal Republic of Germany
Goose Bay, Nfld.	United Kingdom
Cold Lake, Alta.	United States/United Kingdom
Petawawa, Ont.	United Kingdom
Suffield, Alta.	United Kingdom
Wainwright, Alta.	United Kingdom
Gagetown, N.B.	United Kingdom
Edmonton, Alta.	United Kingdom
Shilo, Man.	Federal Republic of Germany
Goose Bay, Nfld.	United Kingdom
Cold Lake, Alta.	United States/United Kingdom
Gagetown, N.B.	United Kingdom
Suffield, Alta.	United Kingdom
Wainwright, Alta.	United Kingdom
Shilo, Man.	Federal Republic of Germany
Goose Bay, Nfld.	United Kingdom
Cold Lake, Alta.	United States
Gagetown, N.B.	United Kingdom
Suffield, Alta.	United Kingdom
Wainwright, Alta.	United Kingdom
Shilo, Man.	Federal Republic of Germany
Goose Bay, Nfld.	United Kingdom/Federal Republic of Germany
Cold Lake, Alta.	United States/United Kingdom
Meaford, Ont.	United Kingdom
Suffield, Alta.	United Kingdom
Wainwright, Alta.	United Kingdom
Shilo, Man.	Federal Republic of Germany
Goose Bay, Nfld.	United Kingdom/Federal Republic of Germany
Cold Lake, Alta.	United States/United Kingdom


Mr. Scott (Victoria-Haliburton): 1. Will the Canada Post Corporation be adding an additional sign-strip to the bottom of existing post office signs in the Constituency of Victoria-Haliburton and, if so, at what cost?
November 8, 1982

2.	Will the sign-strip be added to all government buildings in the Constituency and, if so, at what cost?
3.	(a) Who produces the sign-strips and at what cost per strip (b) what is the labour cost of their addition to existing signs?
4.	Are the strips being added to already-existing government signs and, if so, for what reason?


Hon. Romeo LeBlanc (Minister of Public Works):: 1. The
Canada Post Corporation has been adding an additional sign-strip to 15 existing signs in the Constituency of Victoria-Haliburton (Apsley, Omemee, Lindsay, Little Britain, Bobcay-geon, Kinmount, Coboconk, Sunderland, Cannington, Beaverton, Jackson Point, Pefferlaw, Sutton West, Ponty Pool and Woodville). Total cost for the 15 Post Office "Canada" wordmark blades was $6,750.
2.	Yes, Canada wordmark sign-strips are being added to all government buildings which do not comply with the Federal Identity Program (FIP) at a national average cost of approximately $950 per sign-strip, prices varying with dimension of blade and location and including shipping, handling and installation.
3.	(a) The sign-strips are produced by the Department of Supply and Services, Canadian Government Expositions Centre, at a national average cost of approximately $750 per strip, (b) Approximately $200 per sign-strip for installation including shipping and handling.
4.	The sign-strips are being added to the bottom of existing signs to make them conform with the Federal Identity Program. The strip being added is the Canada wordmark. According to the Federal Identity Program all buildings must be identified in the following manner:
Federal signature (in this case Canada Post);
message (name of building or address);
Canada wordmark.


David P. Smith: Madam Speaker, if question No. 4,397 could be made an order for return, this return would be tabled immediately.


Madam Speaker:: The questions enumerated by the Hon. Parliamentary Secretary have been answered. Is it the pleasure of the House that question No. 4,397 be deemed to have been made an order for return?


Some Hon. Members:: Agreed.

DiAND-OUTSIDE CONSULTANTS


Mr. Shields: 1. Were outside consultants employed by the Department of Indian Affairs and Northern Development in the fiscal year (a) 1980-81 (b) 1981-82 and, if so, how many and what was the total amount paid?
Order Paper Questions
2. Were any consultants paid more than $10,000 and, if so, in each case (a) what was his/her name (b) what was the amount paid (c) what services were provided?
Return tabled.


Walter David Baker: Madam Speaker, I rise on a point of order. Late last week, on Friday, the Parliamentary Secretary filed an answer to question No. 4,203. The question related to loans to employees of Petro-Canada or its subsidiaries. It requested the usual answers and asked what was the name and title of the employee, what loan was made, what date it was made, what was the amount of the loan, what interest rate was being charged and what was the purpose of the loan. The answer I received to that question stated:
Petro-Canada reports as follows:
The requested information is considered to be of a managerial and administrative nature between Petro-Canada and the Corporation's employees and, therefore, cannot be released to the public.


Some Hon. Members:: Shame!


Walter David Baker: I know the Ministers can say anything they want in their answers, but I wanted to bring the fact to the Chair's attention that there have been many other answers given to similar questions with respect to similar organizations. This is the first in the number of answers I have received in which the answer has not been "No" to the question: "Have any loans been made?" The answers to former questions were very clear and indicated that information would be given even if it were managerial and administrative in nature.
Now, when we know that the answer is yes, there have been loans made, and we merely want details concerning public money, we receive the answer "No" from the Minister and this half-baked answer from his colleague. I would like to give the Parliamentary Secretary a chance. He and I have discussed the importance of clarity and openness with respect to answers. Would the Parliamentary Secretary undertake to go back to the responsible Minister and obtain an appropriate answer, one which is responsive to the question as all other answers have been responsive to similar questions?


David P. Smith: Madam Speaker, I will be happy to review that answer with the Minister concerned. I believe he is in the House and has heard this exchange, so it may not be that difficult to consult with him.
Madam Speaker, I ask that all remaining questions be allowed to stand.


Madam Speaker:: Shall the remaining questions stand?


Some Hon. Members:: Agreed.

November 8, 1982
20488_______________________________________
Farm Loans Interest Rebate Act



GOVERNMENT ORDERS


[Stage Direction]
The Elouse resumed, from Thursday, November 4, consideration of the motion of Mr. Whelan that Bill C-134, respecting rebates of interest on farm loans under the Farm Credit Act, be read the second time and referred to the Standing Committee on Agriculture.
Mr. G. M. Gurbin (Bruce-Grey):: Madam Speaker, one can clip a sheep every year but one can only skin it once.


Some Hon. Members:: Hear, hear!


Gary Michael Gurbin: The Liberal Government is down to the hide of Canadian agricultural producers and Canadian businessmen. Indeed, for 316 Canadian farmers this year, the Government has gone right to the bone.
Today we are debating the Farm Loans Interest Rebate Act, the provisions of which are in addition to the normal provisions of the Farm Credit Corporation and will provide some much-needed assistance to Canadian farmers. The tragedy is that this special assistance is required. In brief, this legislation provides $200 million in loans through the Farm Credit Corporation; $100 million of that is new funding. There is a $16 million Government donation, if you will, to agriculture to lower interest rates from the current 15.75 per cent to 11.75 per cent. That will assist between 500 and 1,500 Canadian farmers who are in serious financial distress.
There is no real debate on this Bill as such. No one is speaking in opposition to it. Indeed, I support this Bill strongly as a measure that will help that number of Canadian farmers. This Bill will be supported by my Party, as have all other additions to Farm Credit Corporation legislation through the years. But the tragedy is that we are required to pass legislation like this. It is really a band-aid measure which will only help a small percentage of Canadian farmers, those who are able to qualify. This legislation does not approach the basic problem or deal with the over-all number of Canadian farmers who need assistance. According to the calculations of the Canadian Federation of Agriculture, at least 10 per cent of Canadian agriculture is in some degree of financial distress. According to the Minister's statements, 11 per cent of farmers involved in financial arrangements with the Farm Credit Corporation are in default. Out of 300,000 Canadian farmers, according to that ratio, 30,000 Canadian farmers are in financial distress.
I would like to comment on two points in the Minister's statement. First, he took exception to my description of the agri-bond concept that I mentioned in a question I asked in the House. It was described as a Conservative concept. By way of clarification, if the Conservative Party were in Government this concept would indeed have been implemented. I offer as proof of that the fact that the Small Business Development
Bond, a similar type of mechanism, was introduced first in the Crosbie budget. We are committed to that type of principle, where it applies, in order to assist Canadian agriculture and businessmen. We all know that the Small Business Development Bond was supported later on by the Liberal Government, and it continues to be in place for those in distress. We all know, however, that it is not working well in providing the real relief that is required as a result of circumstances existing in the country today.
Second, the Minister of Agriculture (Mr. Whelan) mentioned that the number of people to be helped by the farm loans program was at least 2,000. According to the Minister's figures, 554 special assistance loans have been made which accounts for $80.1 million. On that basis, certainly the maximum to be helped would be in the neighbourhood of 1,500 Canadian farmers.
The Minister also mentioned that because of the importance of Canadian agriculture a number of things have been done over the years to assist agriculture. While the Minister looks to these mechanisms as donations to agriculture, for which he has been responsible to pilot through the House, I think it fair to mention that, at the same time as the Minister has been doing this, he has also stood in the House and supported a number of programs which have severely damaged agricultural producers in Canada. Specifically, I refer to the budget of November 12 and the National Energy Program. Everyone knows that income averaging annuities are gone and have been replaced by a provision that is more awkward and is probably not as effective for those farmers who are retiring. The Minister of Agriculture supported that by supporting the November 12 budget.
We also know that energy prices were significantly increased in the National Energy Program. While the Minister of Agriculture repeatedly claims that farmers are relieved from federal taxation on farm fuels, we also know that through the provisions of the National Energy Program farmers, like other Canadians, are paying significant increases for diesel fuel and gasoline. This amounts to 40 per cent in the cost of farm fuel. According to my rough calculations, assuming agriculture uses approximately 3 per cent of the liquid fuels, that is, diesel and gasoline, farmers are actually paying each year into the federal treasury approximately $144 million by way of direct and indirect federal levies. Farmers are not free from federal taxation. Indeed, farmers are making a significant contribution to the federal coffers.
By comparison, this whole Program that we are talking about now amounts to approximately $20 million. It is very similar to the program that was instituted in the November 12 budget of last year, to which $5 million had been allocated. All of this money is money that will have to be repaid. It is not really a gift in the true sense.
Certainly the Farm Credit Corporation as we have known it over the years has made a valuable contribution to agriculture. Even in my own area, I can attest well to the capable efforts
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that are being made. In particular I would like to mention the manager in the Walkerton office. He has a real feeling and understanding for the needs of agriculture. He does his best to help the local farm community within the limits and constraints that are provided by the Bill and the different revisions that have been made to the Farm Credit Corporation legislation.
Beyond that, we also know that farm credit has only provided a proportion, approximately one third, of the financial requirements of agriculture and that the regular lending rate of the Farm Credit Corporation now is 15.75 per cent. That 15.75 per cent is now well above what it cost the Farm Credit Corporation to borrow from the Government. The Bank of Canada prime rate is now approximately 11.25 per cent. One of the reasons that agricultural borrowers have to pay the high interest rate for at least the next six months is that the Farm Credit Corporation is required to set its rates for a six-month period. It does not have the flexibility in which to deal with the trends, whether up or down, in order to provide the lowest interest rates possible to agriculture borrowers.
Changes should be made to correct this. Whether on a three-month basis or a one or two-month basis, this would provide flexibility. This is particularly necessary now at a time when rates are coming down. Farm borrowers need to have the availability of that capital at the lowest possible interest rate.
The background to this whole situation that has made it necessary for this provision to be introduced really has to do with the state of the economy in Canada. Looking at interest rates and how they have fluctuated, both within Canada and internationally, over the last two years, we have seen the problem grow for agricultural producers.
It has been mentioned that we in Canada are experiencing the consequences of international situations over which we have no control. There is no question that Canadians are vulnerable to some of the fortunes and misfortunes of the international financial community, of interest rates going up and down, of international trade and so on. It is also true and fair to suggest that we have to compare ourselves and our relative performance with other countries.
In two recent cases we have seen the comparison of Canada's productivity and economic abilities with other countries. "Euromoney", a respected European financial document, has put us in fifty-fifth place, well behind other countries, most of which we would like to be ahead of, such as India, Pakistan and New Guinea. The OECD, in a statement by Sylvia Ostry, shows us at the very bottom in terms of economic performance compared to other western democracies.
Over the past ten years those things have created the crisis we have in our economic situation today. This crisis was experienced first in some sectors of the agricultural community, and the crisis will continue to be experienced as farmers face increasing bankruptcies. So far this year there have been 315 farm bankruptcies. By the end of the year it is expected there will be approximately 500.
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That figure is not large. Five hundred people does not sound like a lot today. The important point is that it represents a 65 per cent increase in bankruptcies over last year. When talking about farm bankruptcies, we are talking about farmers who have openly declared bankruptcy and are identifiable. We are really only talking about the tip of the iceberg in terms of what is going on in the farm community.
In his statements on this bill, the Minister talked about the 50 per cent of farmers who are not vulnerable because they do not have significant borrowings. Since becoming Minister of Agriculture the Minister's constituency has decreased significantly. There are now approximately 300,000 farmers across Canada. Five hundred less may not make that big a difference, but the downward trend has been accelerated, particularly in the last several years, because of financial circumstances. It is one that promises to decrease his constituency to a size that may make it easier for him to handle, but it will create many long-term problems for Canada. One of the problems has been that the Government has not had a sense of what is happening at the basic farm unit level.
Efforts that have been made to try to express this to the Government have not been particularly well received. Recently in the area I represent, Bruce-Grey, the Parliamentary Secretary to the Minister of Finance (Mr. Fisher) was invited to speak to a group of farm women. His major address was describing the Government's five and six program and the need for national unity. Both of those may have their place in Government policy and he certainly had a right to espouse them, but he missed the point completely. As they listened to him, they tried to communicate the fact that they were not being heard or being understood, that the Government had no sense of the frustration and difficulties they were experiencing.
When a farm goes out of business, all the related people downstream are also affected. Farmers will be the first to tell you that the reason Massey-Ferguson is in trouble is that the farmers cannot afford new machinery. That is a highly visible example. Beyond that highly visible example are more important examples in communities across Canada. The small-businessmen in the rural communities depend on the agricultural community for support in their recovery, ranging from hardware stores to co-ops and so on.
This impact ripples throughout the entire economy in such a way that unless we have recovery at the primary producer level, we will continue to experience difficulties in unemployment and general economic difficulty which we now see throughout the country. It is at the primary producer level that we must concentrate and ensure that we have recovery and then growth.
There are two aspects to the financial distress we are now seeing. One is the calculated financial aspect and how it relates to the economy. The other is the human aspect, the distress being experienced by both the direct farm families and the communities in which they live.
This psychological stress that has been experienced over such a period of time is, in my opinion, creating a significant long-term problem. They will not recover from this quickly. It

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will be very difficult to deal with. It is an additional problem for the Government as we progress through the eighties, but we must try to cope with it.
This is an unnecessary situation. We need to address the primary producer and primary production level, not just in agriculture but in all sectors. We see ripples through forestry, mining and so on. If we do not ensure that the primary producer level survives, we are not going to have a vehicle for recovery. We will not have the opportunity to recover from our current crisis.
There are two major parts of agricultural production costs over which the Government has some direct control. Those two major parts are interest rates and energy costs. Interest rates probably account for 20 per cent of farm input costs. Farm debt this year is approximately $17.6 billion and the interest on that debt is around $2.2 billion. That is 20 per cent of production costs.
The other single major factor in so far as input costs are concerned over which the Government has some control is energy costs. Depending on the type of farming done, energy costs can range from 8 per cent to 33 per cent, the 8 percent level being beef producers and the 33 percent level being cash croppers. What has happened in the last several years is that the primary producer has had to bear as much, and more in some cases, of the burden of increased interest rates and energy costs. They have not been able to recover those costs. Those opposite have many theories on how those costs can be recovered, but the primary producers do not have the opportunity to pass those costs on directly to consumers.
This Government, Mr. Speaker, has failed in the last several years to come up with some reasonable solutions, so that there is at least an insulation, if not a relief, from those burdens. If we do not provide some relief at that primary producer level, we are going to see not only a continual decrease in the number of farmers, but a potential collapse of the whole farming industry, certainly in some sectors. Many times there has been mentioned specific things that could be done. This Party, over the last six months, presented a ten-point program of specific things that could be instituted to allow the type of healthy agricultural economy this country needs in the short and the long term.
The first thing that must be done is that in some way the Minister of Agriculture must be given more influence in Cabinet. The Minister mentioned in the House that he did have some influence in Cabinet, but it has been very difficult for me, as a reasonably new Member, to see where that influence lies. Certainly it has not resulted in any meaningful improvement in the financial circumstances of farmers in my area and, as far as I know, has not resulted in any significant improvement in the financial circumstances of farmers across Canada.
The second thing that must be done is to stabilize farm prices. We must have co-operation and leadership for and within the Provinces. As recently as several days ago, the provincial Ministers of Agriculture met, without the federal
Minister of Agriculture, not because they did not want to meet with him, but because he failed to follow through on a program he had committed himself to and they were forced to get together to try to come up with a national program. That clearly, Mr. Speaker, is a federal responsibility. We must have a national program so that each Province is not pitted one against the other, with different resources and opportunities, and there is some type of harmonization, some type of equalization of opportunities for farmers in the various Provinces.
I am not sure of the specifics of the meeting of the provincial Ministers of Agriculture, but clearly it is the time for the federal Minister of Agriculture to forward and enjoin the provincial ministers not only to co-operate, but to help in developing a plan which all Provinces can live with and which has some equity for all farmers in the country.
The Canadian Federation of Agriculture and, particularly, the Ontario Federation of Agriculture, have been very active in looking at farm financial conditions of today and over the last several years. They have come up with several proposals which we have looked at and with which we are in agreement, if not on the figures, certainly on the concept.
There is no question in anyone's mind that the Farm Credit Corporation itself requires a very significant, if not massive, infusion of capital. The changes which occurred in the legislation last April allowed the Minister of Agriculture to seek funding from outside Government, whether it be from pension funds or international banking interests. It has the ability now to do that. This increase in capital is very necessary for the Farm Credit Corporation to have the strength that is needed to meet the financial requirements of farmers today.
I have already mentioned, as many others, the agri-bond concept. That principle is simple. It is one that can be easily understood and implemented and is also allowable under the changes already provided through legislation last April. The Ontario Federation of Agriculture has also suggested an income market assurance program, which we would like to support. We are all on-track in the agricultural community in realizing that something at least equal to the provisions of IAACs should be reinstituted in order to provide security for farmers who will retire, and to help in some way to reduce start-up costs for young farmers.
With respect to the energy tax credit, I would like to compare the farm situation to the petroleum situation. Some petroleum companies-Union Carbide is one that comes to mind-are in a situation right now where they have faced massive increases in pricing, particularly of natural gas, to a degree that they are not building plants. They are not investing their capital in Canada, not providing jobs, and they are not providing the value added, which in the case of their products can be as high as 21 times the value of the natural gas. They are not doing these things because they cannot be competitive at the prices which are being charged for the raw resources.
The same situation applies to agriculture, Mr. Speaker. It uses a very small percentage of our total energy requirements in Canada. If it is required, as a cost of input, to pay the full
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tariff-which it does, with the exception of some rebate on excise tax which is a small portion of the total cost-and it cannot get it back at the other end because it cannot pass those costs on, then agriculture is in a very poor position to face the future.
These are two specific examples where we have an opportunity in Canada, with our resources, to assure an industry, whether it is agricultural or a segment of the petrochemical industry, that we are in a position to provide them some relief so we can get that value added. Much has been mentioned of the export value that we gain from agriculture. We know the whole economy of Canada is perhaps 40 per cent dependent on agriculture, and as many as one-quarter of the population is directly or indirectly employed at some stage in the agribusiness. It is critically important that the primary producer remains competitive. Providing something like an energy tax credit or in some way reducing the input costs at the energy level can have a significant impact on how healthy that industry is. There is no question but that it can be done and should be done. The payoff could be tremendous.
In closing, I would like to say that over the last weekend particularly we in Canada have been treated to an example of,
I suppose "reincarnation" might be the most appropriate word, of a leadership which has had some difficulty in coping with, if not in grasping, what are the problems facing Canadians today. If it was understood, there would be some action which would give myself and others a sense that the problems were going to be solved. We know the Prime Minister (Mr. Trudeau) has made efforts in the last several months, in his trip out west and his presentation to the policy conference most recently, to get the pulse of the country and try to find out what his position should be. I do not know, Mr. Speaker, whether he in fact has accomplished his goal. What I have a clear sense of is that, if he was out there, either he was using the wrong finger or he got the wrong pulse. Or we have the wrong Prime Minister.


Mr. Jack Murta (Lisgar):: Madam Speaker, it is indeed a pleasure to enter this debate on amendments to the Farm Credit Corporation legislation. It is not too often that members from rural parts of Canada have a chance to debate agricultural concerns and problems here in the House of Commons. From time to time we have a chance to ask questions in Question Period, but as to having a dialogue or debate, not only with Government Members but with each other, that opportunity has not presented itself too often over the past year or so.
I would like to start by saying that I, like other Members of my Party, indeed all Members of the House of Commons, support the legislation we are dealing with this afternoon concerning the Farm Credit Corporation. I think one thing which can be said is that the FCC, because of the tremendous volumes of money which agriculture needs now, is starting to move in the right direction by looking for outside sources of money; in other words, money which is not necessarily coming from the Canadian taxpayer. The Corporation has done that,
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of course, by looking to the United States bond market to raise funds.
From time to time, Mr. Speaker, Members of Parliament from all sides have suggested to the Minister of Finance (Mr. Lalonde) other ways of raising money. Some of them were possibly far-fetched, but nevertheless all were based on the fact that agriculture has grown to the extent that it is probably one of the largest users of capital of any industry in the country. It is quite common now across this country to find farms valued in excess of $1 million with gross product sales of $500,000 to upwards of $1 million. If we are seeing that in the early part of the 1980s, Mr. Speaker, I predict that those Members of Parliament who stand here and debate agriculture in the latter part of the 1980s will see a totally different industry from the one we are looking at right now. This will be because of a whole series of changes, such as a drop in the average age of farmers, but mainly perhaps because of the computerized world we are moving into which will have possibly its greatest impact on the agricultural sector because of that sector's tremendous need for information.
It would be great, Mr. Speaker, if we could look into a crystal ball and into the future, but as politicians we have to look to the present, and agriculture is currently suffering probably one of the tightest cost-price squeezes it has ever experienced. This has been brought on primarily for two reasons. One, obviously, is from overproduction, basically in North America and principally because of overproduction of commodities in the U.S., commodities such as grain and oil seeds of which Canada is a major exporter.
Production has over time increased substantially in the United States, but it all started back at the time when President Carter decided to impose a grain embargo on Russia because of its invasion of Afghanistan. At the time it seemed that everyone, including farm organizations in Canada and the U.S., supported the President's move. However, since that time everyone in the agricultural sector, from Versatile Manufacturing, International Harvester and Massey-Ferguson right down to the smallest farmer and storekeeper, has lived to regret the decision to try and use food as a political weapon. This is because what really happened, Mr. Speaker, is that Russia decided not to buy directly from the United States but to buy from other countries such as Argentina and the European Common Market, and it would buy established quantities from Canada. In effect, what Russia did was to leave this huge quantity of American grain production sitting on the international market, hence depressing the price. They have done this very effectively and in effect created a reverse embargo situation an where they are now embargoing the American farmers and thereby keeping down the price of grain exported by all other countries.
At the present time there are only two countries which really export grain, Canada and the United States. The Europeans export some, the Australians are not exporting this year because of a drought, and Argentina, traditionally an exporter of grain, has had its production pretty well taken up both last

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year and this year, probably into next year, by direct purchases from the Soviet Union. So we have a unique situation which has developed where you really have two countries acting as the main suppliers of grain in the world.
At the same time many countries around the world are starting to find themselves short of grain, but with the price of grain very close to what it was in the 1930s in real terms. In southern Manitoba, for example, corn is now selling in the neighbourhood of $2.25 a bushel. It increased over the weekend by eight or nine cents a bushel because of a U.S. Government move to shore up their free stocks of grain. But the price of $2.25 a bushel is approximately 35 cents to 40 cents below the cost of production. This does not include a multitude of fixed costs. So you can see the kind of cost-price squeeze in just one commodity which is reflective of the situation generally throughout the agricultural sector. The same situation has developed for barley, wheat, rapeseed and soybean, in fact, most other exportable grain or oil seed crops.
All of this has been caused by a series of events, the reaction to which was thought to be in the best interests of freedom, but which in fact has turned out to be a literal disaster for agriculture. The problem, of course, is that I do not believe we are going to learn from past mistakes. It is very tempting for any government to use food as a political weapon, particularly so when we in North America can produce food better than anyone else in the world. From time to time we will probably be tempted to use food as a political weapon, and ultimately to our detriment but nevertheless in my opinion it will be used. That is unfortunate from the point of view of the farmer, the country affected and all the infrastructure that surrounds the producer. Unfortunately, I think we are going to see more of this reaction and food will be used as a weapon in settling politically motivated global disputes. I do not like to think of that but it may become the reality.
One of the problems that the farmer is facing is low grain prices-indeed, low agricultural prices generally, with the possible exception of the livestock sector although it is not in a healthy state at the present time. He certainly faces low grain and oil seed prices.
The other aspect of this gloomy scenario is one that we have developed ourselves, to some extent. Nothing could have insulated us from the effects of the world recession, but most observers of the political scene agree that we have made matters worse through a series of bumbling and stumbling government measures. These have contributed to disastrously high interest rates which have had a direct and immediate impact on agriculture. In most cases, the farmer cannot pass high interest rate costs on to anyone else and has to absorb them.
The cost price squeeze is the result of various inputs that have been built into Canadian society. Agriculture probably uses more energy than any other industrial sector in the country. The price of fertilizer has increased and so has the price of the propane used for drying grain and in some cases, for running tractors. Two years ago it cost five cents to dry a
bushel of corn; now it costs 20 cents. That price increase works it way through the system, into such things as the plastic used in the manufacture or grain drills, parts for tractors and so on. The farmer is being whipsawed at the present time and agriculture does not look like an attractive occupation in the foreseeable future.
We must begin making plans to provide Canadian agriculture with a more positive future. As legislators, we must point the direction in which we would like to see the industry move. One area we should examine is the use of agriculture as one of the mainstays of an industrial strategy. We have better agriculturalists than any other country in the world, with the possible exception of the United States. We can produce food better and more cheaply than most countries and we should be using the agri-food sector as one of the mainstays of our society, with energy as another possible support.
I say that because when you are good at something you should try to maximize that skill. The Government should help agriculture if and when it needs it by providing research and development toward that end. It should maximize the use of our transportation system and it should also allow the marketplace to determine which agricultural products should be grown. As a country, we should be deciding to go ahead with a few winners. Agriculture is probably the largest employer in the country with about 25 per cent of the total work force being engaged in processing, shipping, packing, storing, labelling, or trades in some way connected with agriculture. When we are good at something that provides a lot of employment, such a agriculture, we should focus our attention on becoming a superpower in that area.
I do not think there is any doubt that in the eighties and nineties agriculture will be as important as oil was in the seventies and probably more so because we must have food. There are more people to eat it now.
The Government should formulate broad-range policies and guidelines for the direction it wants agriculture to take. I do not think we should have any more marketing boards than there are at the present time and certainly none in the livestock industry. Since his election, it has been a pet project of the Minister of Agriculture (Mr. Whelan) to move this country toward more supply management, a more tightly controlled agricultural industry. I do not think that fits into the scenario that I see for Canada as an agricultural superpower in the eighties.
Over the next two or three years we should put the best academic and political brains together with the farming and industrial sector in an effort to work toward the goal of becoming a superpower. Even though the United States is at present having trouble selling its grain and some other agricultural products to the Soviet Union, it is using its knowledge and expertise in agriculture to help with its balance of payments problem. Canada has the same opportunity. If we could ensure the flow of our products to our ports and that our infrastructure was geared to meet the challenges of the future, we would have no fear in terms of balancing our books,
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employing people, giving direction to a large and ever-growing segment of the population or providing opportunities in the entire agricultural sector.
I believe very sincerely that eventually this will come about, whether or not we as politicians pursue the issue. We should not as a country be faced with a situation where most products can be produced elsewhere in the world more cheaply than in Canada, particularly when our industry is an outstanding example. In my opinion, the industry has to come to the fore. I think we should help it along and give it Canadian attention. Our goal should be to become a superpower by the latter part of this decade, a superpower unquestioned in the world as far as producing, shipping, processing, packing and supplying to an ever-growing population are concerned. Agriculture is probably the most important product aside from water which our planet has to offer.
We will not accomplish this objective if we put our heads in the sand, as has the Minister of Agriculture. We cannot move in that direction with the idea that somehow everything must be controlled or that we have a market for a product and we produce only for that market, nothing else. We cannot move toward superpower status in terms of agriculture by building a Canagrex. Incidentally, we do not hear many people talking about Canada being a superpower in anything any longer. As I was saying, we cannot become a superpower in agriculture by building a Canagrex, a Government marketing system in which the Government participates with the private sector from time to time as it deems necessary, especially when we consider the various problems with such a marketing approach.
At the present time we should be moving in almost the opposite direction, but we are taking the wrong approach primarily because the Minister of Agriculture is not innovative. Certainly his thinking is not dynamic, and I think I am charitable when I say that. He no longer has the credibility which a Minister of Agriculture should have. It could be, if it is not, our single largest export earner, employing approximately a quarter of our population. The Minister does not have the stature or the clout in terms of political will which must be generated to move in this direction. We have inherent structural problems, but I hope the Minister will sit down with his officials and take a hard look at the direction in which they are pushing or prodding the agricultural community. If they do so, they will discover that they are headed down the wrong track and hopefully will make some changes.
In terms of the agricultural superpower strategy which I have outlined this afternoon, there is some light at the end of the tunnel. The light is that hopefully within one and a half to two years we will be into an election campaign. The political parties of the country have the chance between now and the upcoming election campaign to work toward an agri-food strategy or an industrial strategy which includes agriculture as it has never been included before. I can foresee such a strategy coming out of my particular Party. I think it is necessary,
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logical and, above all, correct, so it will not be very difficult to implement or sell to Canadians.
While Canadian agriculture is in a very serious situation at present, it will survive. But it needs hope and direction. It is not obtaining hope or direction from the Minister of Agriculture, who frankly likes to navel gaze. He likes to look, if not at his navel, at his feet in terms of the direction in which he wants the agricultural community to move. The direction is so clear in terms of where we should be going that farmers or primary producers would certainly be willing to move toward it. The 25 per cent of the population employed in agriculture would be ready to move in that direction because they would find security in jobs and expanded job opportunities. The country would benefit because of the volume of products shipped to various parts of the world. The Canadian infrastructure would benefit because we would use it more consistently in terms of moving agricultural products, not only around the country but offshore as well. The people of the world would benefit because we would be supplying more agricultural products, at presumably the best prices we could afford, to other lands.
It is a dynamic policy, a dynamic idea. It is something we could look back on in the future and say that for once as a country we made the correct decision in making agri-food the centre of a very dynamic, fast-growing and far-reaching industrial strategy which provided tremendous prosperity.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, the subject we are discussing, the Farm Credit Corporation, has very much been in the minds of Hon. Members of Parliament for the last two years. I do not think it is any secret that in the spring of 1981 half a dozen Members on this side of the House made several proposals on how we could reduce interest rates for farmers under this legislation. They were put before the Government and seemingly obtained the support of the Minister who nodded approval. Here we are two years later and nothing has been forthcoming except this mouse of a bill which is currently before us.
1 re-emphasize what the Hon. Member for Lisgar (Mr. Murta) has just said very quietly. He was trying to say that one of the big opportunities for Canada to get back into forward growth is the use of the tremendous potential of the agricultural industry. The Minister has said this repeatedly, but where he is being condemned is that he does not follow through with positive and simple ideas to get it moving forward.
I do not believe I have heard the figures but I will give them anyway. The capital structure in the farm industry across Canada is $130 billion. Most of that investment in the industry has come about during the last two decades. Part of that investment was realized because of the Farm Credit Corporation. I acknowledge that the banks and the machinery companies have participated in that capital infusion, but the Farm Credit Corporation Act of 1959 is one of the best examples that Parliament can offer of constructive legislation which has not cost the taxpayer anything in the last three or four

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decades. It has enabled the industry to grow and not only make money for itself but to start the entire country on an upward spiral.
While I have said this before, I repeat that when this country was in a recession in 1961-not nearly as desperate as today's recession-it was the farmers of western Canada who started the country moving forward again. This fact was admitted publicly by the Governor of the Bank of Canada in 1964 and by the then Minister of Finance, the Hon. Walter Gordon. The recovery started because the farmer immediately spent the money he received from selling his goods abroad on farm machinery, trucks and the expansion of his operations. That marked the beginning of the upward spiral which we have been looking back on for the last 21 years.
This legislation which we are so slightly amending was the main reason for our recovery at that time. I suggest that today's recession will be resolved in the same manner. When I consider the growth in the export of various commodities such as grains, sulphur, the tremendous potential for potash and fibres in the forest industry in the next 20 years, I believe that we will not have too many rivals in Canada to the rate of growth in the agricultural industry. Therefore, the objective is for Governments in all Provinces to reinforce this positive aspect of our current situation.
This particular legislation is merely a type of small subsidy for a few hundred farmers. It will achieve very little in solving what I and the Hon. Member for Lisgar are discussing. The entire industry from one end of Canada to the other has great potential if it receives the proper attention and particularly if it does not cost the Minister of Finance (Mr. Lalonde) and his minions any money. Since this legislation is a charge on the Minister of Finance, one cannot expect him to contribute very much money to it. It is a handout in the form of a subsidy of 4 per cent for a few hundred farmers who are in dire straits.
I would like to discuss the ideas which originated from this side of the House two years ago but were supported by Members from all Parties in the debates which have taken place since then. I will not repeat all the speeches which I delivered on this subject but I will refer the House, if it is interested, to the short speech which I made on February 1, 1982 dealing with the Farm Credit Corporation. I invite Members to reread that speech, which dealt with the philosophies behind the Farm Credit Corporation.
On March 18, 1982 I spoke on an NDP motion about interest rates. I would highly recommend reading that speech with particular regard to this Bill which we are now debating.
I suggest that interest rates are the key to implementing this forward motion of the investment of money into those things which produce more wealth for which there is a market. Finally, on March 29, 1982 I applied the same philosophy to housing in Canada, using the same principle for those who want to own their own homes as we are using for farmers.
I refer those speeches to Members who are interested in order to illustrate that there are ways of positively assisting this cutting edge industry of agriculture, which can not only
make more money for itself and a million and a half people directly employed in that industry, but assist the 25 per cent of the economy which is affected by agriculture. This growth can begin right away without waiting three or four years for a projection on Canada's future.
This has been possible for approximately the last year, particularly with the amendments that all Parties recommended to the Farm Credit Corporation this spring. As a result of those amendments, the Minister was able to insert a Clause which allowed the Farm Credit Corporation to borrow money "by any means". Those words "by any means" are the open door to any manner of obtaining money for the Farm Credit Corporation without having to go to the Department. I hoped and prayed that the Minister would seize that opportunity to march through the open door, parade through it if he wished, and say: "Look, what I am doing".
When I had finished my speech on March 29, 1982 I think it is quite clear that the Minister had supported me. I will let Hon. Members be the judge of that. I will quote his words. I had just Finished speaking when the Minister of Agriculture (Mr. Whelan) replied:
Mr. Speaker, later on 1 will touch on the presentation made by the Hon. Member concerning this bill. As Minister of Agriculture, I must admit that I agree with much of what he says.
He went on to say:
1 also have the legal advisers which we talked about, and Ministers who are not lawyers, but have to make decisions, still have to depend on them to some extent.
I will touch on that point later.
I would take that as rather direct evidence that at the moment I finished speaking-I hope for Members on all sides-he realized that what I was proposing was not only beneficial for agriculture and all of Canada but would not cost the treasury anything. It was simply a question of getting around one or two small legal points which I had been trying to explain how to accomplish.
That was six months ago. I was naturally hoping that when this Bill came forward, the Minister of Agriculture would have seized on this all-Party support to introduce the necessary legal requirements to make my proposals the will of Parliament and therefore the will of the Government of Canada. This Bill will not accomplish that. Instead, it has the opposite effect of continuing the practice during the last number of years of giving hand-outs to farmers. If I have learned one thing from my fairly lengthy association with farmers, it is that the great majority of them do not want hand-outs. They just want the Government to get off their backs. They want a chance to have a fair grasp at the apple. They want the right to make their decisions, and if they make mistakes they will be glad to pay for them.
I look back with great enthusiasm to that period in 1958 and 1959 when, out of 256,000 who had permit books to sell grain in western Canada, 209,000 signed a petition calling for a hand-out. I did not blame one of them. The farm leader said that the answer to one's problem, when one cannot sell one's grain, is the handout.
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As a Minister, I took the occasion to oppose that proposal. I was backed up by one of the other Ministers even before it got to Cabinet. A great uproar took place in the House and other places about the position I had taken. I believe there was only one person in the whole Conservative caucus of 250 in those days, Senators and Members together, who supported me. Yet a few years later, almost all the farmers who had asked for it supported that position. In the answer I gave to them as Minister of Agriculture, I said that I did not like subsidies for farmers when there was a hungry world abroad. However, I would go out and help to sell their bread and the price would come up by market forces. If I said 50 cents, and it came up 60 cents. So the income rose in a very short period by about three times. The farmers were glad that they had not taken a handout. They were glad that someone had stood up, had expressed their view and then done something about it.
The Minister is in the same position today. He must know, the same as I know, that the great majority of farmers would like to do it on their own, yet he comes along with another handout. It would only affect a few hundred farmers when more than that could use help. However, it misses the philosophy of the Farm Credit Corporation Act. The Act was designed to help all farmers, rich and poor. As long as they had an idea as to how they could expand and make more money, it was to the advantage of the Government to give them money at a reasonable rate, because who would collect all the revenue from all the money generated from that activity? The federal Government would be a big gainer.
We put a guarantee into the original Farm Credit Corporation Act that interest rates would never rise above 5 per cent. We honoured that guarantee for about six or seven years, but then the Department of Finance stepped in and changed it and we got a rate slightly below prime rate. When the interest rates rose, not only were farmers destroyed, but all segments of the economy were destroyed at the same time. I think that if the Minister were to take advantage of the fact that the great majority of farmers do not want handouts or policies that push one section of farmers down at the expense of lifting up another group, there would be a tremendous amount of enthusiasm among farmers to go out and take their chances on borrowed money to expand their operations and get involved in all the ways they know to make more money.
I thought the Minister of Energy, Mines and Resources (Mr. Chretien) was in the House, but 1 see that he has left. I suggest that one of the techniques by which farmers could make more money would be to cut their costs. One of the big costs is energy. It was hardly noticed in the House, but under the Crosbie budget of 1979, for the first time in 60 years it became legal to have a still for making alcohol. There is hardly a farm in Canada which does not have enough waste to produce alcohol sufficient not only to run the farm but also to sell surplus to the city fellow who does not have access to a still or the waste to make the alcohol. This would cut costs tremendously. A large enterprise cannot compete with the farmer who is producing alcohol, and the reason is simple. The farmer
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takes his waste straw, or any other waste material, and uses it as his heat source. Not only does he distil the waste material, such as grain or vegetables, into alcohol, but he passes the heat into his house to heat it and then takes the great bulk of the stuff left over, the mash, which is worth SI50 to $200 a tonne, and produces alcohol for 25 cents a gallon. Big business can only produce it for about $2 a gallon. There is a limited commercial market for alcohol, but it is big enough to take a great percentage of waste off the farm, which not only gives the farmer lower costs, but also gives him more income out of his waste. At the same time as a farmer does this, he takes the pressure off the oil industry to provide all the oil we need.
This proposal was brought in under the Crosbie budget and again under the succeeding budget, but so many restrictions were placed around it that no person went into it. This idea of producing alcohol out of waste was not only a Conservative idea. A farmer in western Ontario did exactly what I have just described. He used his waste material to make alcohol, took the heat that was still useful and heated his house and took the mash and sold it to the livestock industry. He was the man who quoted the figure of 25 cents for a gallon of alcohol.
This man was so enthused over his idea that he told his neighbours about it. The Mounted Police moved in, arrested him and charged him with having a still. He came before the judge, who had read the newspapers and had discovered that it would be legal under the Crosbie budget to have a still. He told the farmer, "I will not send you to jail for having broken the law. You are a free man and I will not put a man in prison for a law which will be changed". This man became even more excited. He ran as the Liberal candidate in the provincial election and almost beat a Tory in Ontario. He became so excited that he ran for the Liberal leadership and became the outstanding spokesman for the Liberal convention in Ontario. He found it was possible to become a leader with ideas. He was well applauded, I am sure, but the Liberals must come a long way before they start applauding a man for his ideas. They only look to see his potential on television and his potential for handling patronage. That is a grim judgment. That man still lives and he can bear out all the things I have said about him.
I think the Minister of Agriculture, as part of his policy of helping farmers under the Farm Credit Act, should persuade the new Minister of Finance, who has been slightly exposed to the need for energy in this country, to put this Crosbie clause back again and improve on it. It would not cause any great loss of face to the Government. It has requested ideas. We have tried to give it ideas, but the Government must learn to accept them. Just because ideas come from this side does not necessarily mean that they are bad. I know this is only a small thing in the great total of needs for energy in this country, but let us go on from that. We now have sufficient technical and economic information to know that in the future farmers will produce the bulk of all energy requirements in Canada. We can now produce energy in the form of natural gas and in the form of oil which is clear of sulphur and other pollutants, and

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we can do all this more cheaply than we can by taking oil from a well.
In Pittsburgh, people from the Department of Mines did large-scale research on this subject over 15 years ago. They could not hold hearings down in the United States, so they came to Winnipeg to tell the world about what they had done. Three different items were used to make natural gas and oil. They could make oil for less than a dollar a barrel and natural gas for 37 cents per thousand. We are now paying over $3 per Mcf for natural gas.
The University of Saskatchewan experimented with poplar trees and has proven that hydrocarbons comprised 50 per cent of their waste. It now has a grant from the federal Government to go ahead and demonstrate on a commercial scale what it can be produced for. Much better than the poplar tree is the jack pine tree. Ninety per cent of its weight is in hydrocarbons. That is the type of thing on which the department of mines of the U.S.A. worked.
I am sure everyone will laugh when I say you can do the same thing with cattle manure or with garbage from humans, but the fact is it is being done all over the world. Why not let the Farm Credit Corporation lend money to farmers for doing things that reduce costs? As for legal technicalities, all the Government has to do is to reintroduce the Crosbie budget proposal on renewable resource taxation. We should get away from this theory that a person who produces alcohol is doing something nasty. People are not going to drink this type of alcohol because it is not potable. Let us get away from these fears that go back to the 1920s and the days of the scandals over Beauharnois.
I could go on and talk at length about this whole concept of biomass. The University of Manitoba and the University of Kitchener have done tremendous work in this field. All we have to do is to let the individual, through the tax system, get access to this information, and with the money to go ahead he will get enough money to pay back his loan, reduce his costs and invest in other things to keep the thing rolling.
That is only one field. I would like to suggest that it is not only for biomass energy objectives that we can use the Farm Credit Act, but we can use agriculture as the cutting edge for getting into whole task of producing energy on a renewable basis without using any of our good land. We can use what we call waste land. We can open up all the boreal forests to multiple uses, not just cutting pulp. We should be using all of the waste trees that are now called weed trees. We can introduce a whole new industry now.
This idea is not new. At one time I was asked to prepare a plan on this for the Quebec Government. That Province knows what the plan is and in due course I imagine it will be brought to light.
I would like to see farmers in areas close to forests get access to the forests and farm the trees as they should be farmed, not by the wasteful method that nature has called silviculture. Europeans have farmed trees for 200 years, and if the Europeans can do it, we can do it here. Utilization of forest wealth
in Canada will be made possible for many purposes instead of just pulpwood, paper and lumber. Most important will be the production of energy. At the same time, we will improve the quality of the forests because forest management will be in the hands of people who will benefit from their use. 1 am referring, of course, to the farmers. This cannot be done by mass operations in forest areas.
These ideas are not tossed out for the sake of hearing the sound of my voice. I have talked about this for a long time, but now that the country is on its back, now that the country is worried about how it can be so wealthy in potential, there are things we can do. We can do so much to restore the place of Parliament in the hearts of people if we do something positive and let this "baboon game" of politics go. We should not be showing our bare red behinds to each other. Let us get out and do practical things.
We are lucky that we have agencies like the Farm Credit Corporation, the Canada Mortgage and Housing Corporation, the Export Agency, the Small Business Development Bank and so on. We have the agencies in place. The key is to utilize those agencies by not taking money from the treasury, of which we do not have too much, but taking the money from the people who are willing to invest. We have more money in Canada than we know what to do with. The Economic Council has been worrying about this for years.
We put barriers against individuals who invest in risk enterprises because we would rather have things done by the Government. I suggest that we should set individuals free in this country to make money. All one has to do is to get rid of the bottlenecks, such as the legalities preventing people from producing alcohol. These fears should be removed. If a man makes a profit, tax him on that profit. That is legitimate. All I am saying is, let the individuals have a chance to make a profit.
With regard to the over-all market opportunities, the Hon. Member for Lisgar handled that quite adequately. Despite what economists have said for 20 years, the job of feeding this world will take all our efforts in every country for the next 20 years even to get close to meeting demands. Why Americans and Canadians should be battling each other on such things as cattle, fruit and now even the grain industry, I just cannot understand. All we have to do is to tell the farmers of the United States to unite with Canadian farmers. By doing that we can find new markets. We can find ways for people to sell their goods so as to get enough money to pay for ours. We do not want help from the Government in the form of handouts. What we want from Government is the machinery to see if we can collect money from individuals in Canada who will take risks through the Farm Credit Corporation. What we have to do is to get interest rates down to half what they are today. That can be done by using the principle of the Small Businessman Development Bond. The Minister keeps calling it an agribond, but that is what he means.
The precedent was set for this in the First World War. It exists in other cases in Canada. The precedents in the United
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States are legion. If you spend and invest your money in risk enterprises for good social purposes, you do not have to pay taxes to the Government. Therefore, you can give the individual money at half rate. That is not a new idea; it is a repetition of what we have been saying for several years.
We hope that the Minister will respond to this in the Bill we are now discussing by saying that he is quite willing to take the new Minister of Finance to the mat and ask him whether or not he believes in individuals risking money to make money. We have the agencies in place. We need to get the Department of Finance off the backs of the people of Canada. This particular Bill gives us a chance to go forward, to get the agricultural industry going full out in all of its sections.
With regard to all of its sections, I must say for the record, that as a westerner I am very pleased to know that the farmers of Quebec have rallied to the support of the western farmers on the Crow rate issue. That matter, we know, will be resolved in the caucus of the Liberal Party. But once the Government becomes aware of the extent to which the farmers of Quebec, a few even in Ontario and the Maritimes, are behind the fundamental principle that when you push one section of farmers down you never, in the final analysis, help any other section, the sooner we can get on with the job of developing the potential of the whole industry in all parts of Canada. It will come as a result of the fact that all farmers are in the same union. They simply want to get going. The Farm Credit Act will be very helpful.
In conclusion, this particular amendment of a handout is accepted by everybody as not meaning very much. We will support this amendment because even handouts indicate that the Minister has his eyes in the right direction. If he had gone forward with what he seemed to be in favour of six months ago and we had money out now at 6 per cent to the farmers across this country, all sorts of things would be happening that would push our transportation people to the limit to get exports out of the country. I am not talking just about grain. I would like to go on and discuss other subjects, but I think I have said enough.
If the Minister is not confident that he can get this by the Minister of Finance, there are two alternatives. One is to go to the cheap money markets of Europe. Eurodollars and petrodollars are available now at 6 per cent. You could pay the premium to protect against the ups and downs of the exchange rate. This can be done through a consortium of Swiss banks.
Money can be brought into this country at 6 per cent with no risk of a change in value in the exchange rate on the dollar, either on our side or the other side. We could then get reasonably priced money into the hands of the 320,000 farmers still in business. They will get this country moving forward very fast. The wealth that they earn will go immediately into the
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trucking industry, the machinery industry, the manufacturing industry and then to the mines and forests.
The farmers got this country going in 1961 and the other industries all followed. We can repeat that situation. We do not have to wait three years for an economic study of our prospects; our prospects are good and we know it.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
SUBJECT MATTER OF QUESTIONS TO BE DEBATED The Acting Speaker (Mr. Corbin): Order, please.
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 Fraser Valley West (Mr. Wenman)-Finance-Small business access to credit; the Hon. Member for Central Nova (Mr. MacKay)-Public Works-(a) Construction of Montreal postal terminal, (b) Query respecting difficulties during construction; the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie)-Canadian National Railways-Transfer of repair work from Winnipeg to Montreal.


[Stage Direction]
The House resumed consideration of the motion of Mr. Whelan that Bill C-134, respecting rates of interest on farm loans under the Farm Credit Act, be read the second time and referred to the Standing Committee on Agriculture.
Terence James (Terry) Sargeant: Mr. Speaker, I am happy to have this opportunity to speak this afternoon on Bill C-134. I am happy too that the result of this bill will be to reduce some interest rates on farm loans by 4 per cent over the next two-year period. As a short-term solution, I am sure it will be welcome news to farmers struggling to keep their family farm who are aided by this program.
Last February when I spoke to amendments to the Farm Credit Corporation Act, I said there was a crisis in farm financing. There still is. Even though a reduction in interest rates on the fixed interest loans provided by the Farm Credit Corporation is to be lauded, the bottom line is that it is only a band-aid solution to a much larger problem in Canadian agriculture.
In 1979 there were 82 farm bankruptcies in Canada. One year later that figure had doubled to 164. A year later it had gone to 191. This year it is far worse. So far we only know how

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many farm bankruptcies have been reported in the first nine months of this year. Already 316 family farms have gone into bankruptcy. In nine months, 316 Canadian farmers could not make ends meet any longer and had to shut down their operations. That is outrageous.
In my province of Manitoba so far this year there are five times more farm bankruptcies than there were in all of 1981. There are a lot of people who think Canadian farmers have it made, that they all have new cars, take winter vacations and are getting rich off their operations. Well, they are very wrong. The average net farm income in Manitoba last year was only $1,809. That does not buy very much. This year things are going to be even worse for farmers. Manitoba farm income will drop by 34 per cent this year. Will their costs of production decrease with their income? You can bet that won't happen.
One of my constituents wrote me a note recently in which he summed it up very nicely. He said:
Please speak on behalf of our grain-"wheat," et cetera. We need $8 to $12 a bushel and not $3.50. A combine costs $135,000.
Total farm incomes have change little from the 1974 level of $3.5 billion. In fact, this year total farm income will be less than the 1974 level. When we take inflation into account, it is fair to say incomes are only about half what they were in 1974.
The real problem with farm credit is not simply inadequate credit. It is a problem of a net income too low to pay the bills. To pay bills and upgrade their operation in order to maintain a viable farm, farmers have borrowed at an increasing rate. In 1970 accumulated farm debt in Canada was $4.2 billion. Last year it had risen to $16 billion. In Manitoba, farmers last year paid out $201 million in loan payments, an increase of 359 per cent since 1975.
Those are the facts and figures. For the people who deal in facts and figures, the statisticians, those figures do not lie. Farmers may not understand the over-all picture. They may not have all the numbers, charts and graphs handy which show that agriculture in Canada is in serious trouble, but in their hearts they know very well that agriculture in this country is in trouble.
Let me give an example which I think illustrates the way high interest rates are crippling our agricultural sector. I know of a farmer whose land near the southwest corner of my constituency has been tilled and seeded and harvested by two generations of the same family. Earlier this year this farmer negotiated an $80,000 loan with a local bank. The loan was an operating loan, something that was required to keep the farm going. Interest on this loan in the first year will amount to $17,000; $17,000 just in interest.
Now, this farmer is a hard worker. He takes his farm seriously. It is not just a hobby or an expensive pastime. With the current state of agriculture in this country the "gentleman farmer" has practically gone the way of the rumble seat and jitter-bugging. Farming is far too costly to be something one can dabble in.
This farmer in my riding, by working hard day after day, week after week, year after year, has managed to support his
wife and family over the years. However, that farm has never given this farmer $17,000 a year. It is not likely to do so this year or next year. How does someone who is trying to keep his head above water in a family farm operation do that when the odds are so overhelmingly stacked against him?
The agricultural policies of this Government are at the root of the increasing number of bankruptcies in this country. Up until the late sixties, most of the long-term credit needed by Canadian farmers was supplied by the Farm Credit Corporation as well as much of the short-term and intermediate-term financing needs of those farmers. Then the Government began restraining the amount of credit the Farm Credit Corporation could provide. Banks were invited into the farm credit market.
In 1975, 72 per cent of all long-term credit taken out by farmers came from the Farm Credit Corporation. By 1979 only 35 per cent of farmers were able to meet their long-term credit needs with the fixed interest loans provided by the FCC. The Government, with its tight purse strings, has hamstrung the Farm Credit Corporation. It has prevented it from keeping up with the increasing demand for farm credit. In effect, it offered the banks with their floating interest rates a bigger piece of the farm credit action on a silver platter.
At the same time as it was knocking the props out from under the FCC, the Government introduced drastic changes in its grain policy. Prior to the so-called open market, most feed grains had been marketed outside the Prairies under the auspices of the Canadian Wheat Board. Prices were relatively stable and the competitive capabilities of different regions of the country were more or less equal. But the Government's decision to move to the open market and allow large grain merchants and feed mills back into the grain market on a nationwide basis upset the apple cart. The result was the transfer of some sectors of agriculture activity to different regions of the country. To aid that transfer, some provincial Governments got into the act with subsidized credit or even out-and-out subsidies. By the end of the decade much of the hog production had moved out of the Prairies into Ontario, Quebec and to a lesser extent the Maritimes. To a greater extent, cattle which originated in the Prairies were being fed in Eastern feedlots where the price of feed grains gave them the competitive advantage.
This must have looked very appealing to Government economists, because with all the activity, it looked as though agriculture was booming. But what was really happening was that production was shifting from one region of the country to the other, financed largely with borrowed money. It was fortunate that while this was happening there was a surge in grain prices which carried most farmers through to the end of the decade. But with accumulated farm debt of around $16 billion and farm income now falling, the results of the shift the Government's "agri-food" policy are becoming evident. Large investments were made in some parts of the country and
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abandoned in others. Farmers were borrowing in greater amounts just when interest rates were increasing at an unprecedented rate and banks were pulling in record profits, $1.7 billion last year. In the early seventies credit costs ranked about eighth or tenth in the farmer's cost of production, but now the cost of credit is the highest cost facing farmers in Canada. And while farmers were borrowing in greater amounts, the Farm Credit Corporation was prevented from keeping up with the demand for farm credit. Long-term credit at fixed rates was becoming less and less available.
Agriculture in Canada is in desperate straits. With the Government's record of destabilizing policy changes, the reduction of farm credit interest rates by 4 per cent is a feeble attempt indeed to deal with a very grave problem. In fact, the Government's plans to change the Crow rate promises to throw another left-handed monkey wrench into the works. The repercussions of this latest policy change will be drastic.
It is no secret to western farmers that agriculture and transportation are intrinsically meshed into the fabric of life in rural Prairie communities. Farmers have known for years that the two are interdependent. It is only Liberal Government bureaucrats here in Ottawa who would like to pretend that the two, agriculture and transportation, can somehow be pulled apart, dissected and analysed. These enlightened people then advise their political mouthpieces to close this branch line or that branch line to increase transportation efficiency, and the farmer who has to get his grain to market foots the bill for trucking to an elevator a lot more distant than the one he used to reach on a branch line.
The closing of various branch lines on our railway system in the Prairies and the erosion of the transportation system caused by these closings have dealt a death blow to many farmers whose operations were already teetering precariously on the verge of bankruptcy before their branch line died. If statutory grain rates-the Crow rates-come to an end, so will the life of many smaller communities. The closing of branch lines is the first threat to the prosperity of many small towns in my riding.
Here in Ottawa, when the policy makers at Transport Canada look at a map and see a branch line leading to a small community like Broad Valley or Fisher Branch in Manitoba, they feel no pangs if a decision is made to cut rail service to these communities. For them, it is an unemotional, supposedly pragmatic decision. But let me tell you, Mr. Speaker, it is not an unemotional issue for the farmers in those small communities. Just a few weeks ago, I attended a Canadian Transport Commission hearing at Fisher Branch in my riding. The hearing was to take evidence about the future of a branch line operated by the CNR. Fisher Branch and Broad Valley, the two communities most concerned about the possible loss of the rail line, have barely more than a couple of thousand people living in their areas. Still, well over 100 people crowded into a community hall to voice their opposition to this closing.
Perhaps the most moving submission was from a group of high school students who urged the three CTC commissioners to consider their future. It was interesting, Mr. Speaker, to see the cross-section of people who came to this meeting, farmers
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and their wives, along with their sons and daughters. Many farmers know their children will not follow them in their lives on the farms and they lament that development, as do their children. This was something that became clear to me as I listened to the high school representatives' plea for the continuation of service on the Inwood rail line.
To officials in Ottawa, there may not be much knowledge or concern about the way policies made here affect individuals out west, where there is nary a Liberal to be found after one leaves Winnipeg to travel north, south or farther west. Is it too callous to think that the Government does not care about westerners because westerners do not elect them? I would hope this Government is above such pettiness.
In the west, Mr. Speaker, things are done in traditional ways and people have come to depend on institutions that provide security for those traditions, like the Crow rate and more recently the Farm Credit Corporation. The Farm Credit Corporation is the only agency which offers long-term, fixed interest loans to farmers. FCC loans can now be obtained at 15.75 per cent interest. The floating rate available from banks or credit unions is for the time being somewhat lower than that. Unless the formula now used to set FCC interest rates is changed, permitting the Corporation to lend at less than 15.75 per cent, if funds can be had at a lower rate, much of the FCC fixed interest credit may go unused this year as farmers cash in on the temporary reduction in interest rates from commercial lending institutions. Already the Provinces are being pressured to move into the subsidization of farm credit. We could soon see a patchwork of subsidization programs which again stimulate production shifts from one region of the country to another.
The Canadian Federation of Agriculture has recommended time and again the introduction of an agri-bond program similar to the small business bond. Under this proposal, the Government would give the FCC authority to borrow short term, three to five years, by the issues of financial instruments on which the interest is tax free. This money would then be loaned to farmers requiring money at lower interest rates, not only for debt consolidation but also for essential investment and working capital. This is a proposal which could and should be introduced quickly. It is, I would submit, a more rational and long-term solution to the farm credit crisis than the 4 per cent interest reduction which will be granted to not more than a few hundred Canadian farmers.
If we are going to have any stability in Canadian agriculture, the Farm Credit Corporation must be expanded to provide enough long-term credit to service the bulk of farm credit needs across the country. It needs to be expanded too to provide short and also medium-term credit in special cases. I am thinking here of cases where FCC credit could help a new farmer get started.
But expanding the Farm Credit Corporation is not enough to bring stability back to Canadian agriculture and stimulate increased production. If stabilization programs are provided on a federal basis, and if marketing systems are in place which

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provide some equity across the country, then farmers will be more confident that they will be able to cover their cost of production plus get a decent living standard off their farms.
Bill C-134 will provide only a short-term solution to the problem. It will help, perhaps, a few hundred farmers now in grave financial difficulty and crying out for relief from high interest rates. This proposal, Mr. Speaker, barely scratches the surface of the farm credit crisis in Canada.


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, Bill C-134 is a totally inadequate response to the very serious situation existing in the Canadian agricultural sector. As a result of broad Government policies in several areas we are losing hundreds of men and women who want to devote their careers and talents to producing food for the world. But because of Government policies, often in areas not directly associated with agriculture, farmers are losing their farms and being forced to go on welfare, as are so many other millions of Canadian citizens.
In offering this subsidized interest rate which will reduce payments for approximately 2,000 farmers, the Government is offering peanuts to an agricultural sector of some 320,000 people, all of whom are suffering because of the policies the Government has followed over many years. Sir, it is a truism that the chickens ultimately come home to roost. We as a people are now paying for 15 years of Government policies which simply have not been in the best interests of ordinary Canadians. I will show you how the Government has been able to get away with it, but, sir, the chickens do come home to roost.
I was interested to hear the Minister point out in his speech that the planners have indicated to him that this program will "help" farmers across this country. Well, sir, that is a typical response of this Government along with a bureaucracy which no longer responds. It is like those great lies which are heard across the country. One is: "I am sorry, sir, the cheque is in the mail". Well, we all know it is not in the mail at all. The second one is: "I am here from Ottawa and I am really here to 'help' you". Is that not what we hear so often when the bureaucracy moves in? "We are hear to help you". We have a Government program which is going to "help". That is what was said, sir. The real problem in this country is Government policies, and indeed Government itself.
How did this problem in agriculture arise? Indeed, how did we get into this problem in manufacturing as well? It is the result of the Government deficit. You simply cannot get around the fact that the $140 billion national debt, with the annual deficit going up by over $20 billion, is the direct cause of our having to pass this bill to try and help a few farmers over a crisis. There is support in other areas, such as these silly little job creation programs to try and keep young people employed, to try and make them feel important when they know that some of the jobs created are just nonsense. They do not get a sense of value or creativity, or feel they are contributing to the country at all. If the Government thinks it is fooling
people with these short-term, make-work projects, it has another think coming.
The interest on the national debt alone, Mr. Speaker, is taking over 30 per cent of the tax revenues which people are pouring in to this central government today. If we did not owe that money, we would not have $18 billion going to service the debt.
As I have said to you before, Mr. Speaker, you know better than anyone else that the interest on the debt is being concentrated in the hands of people who already have wealth. If you had $1 million last year, you certainly would not put it into a productive enterprise, you would lend it to your socialist Liberal Government for a 19.5 per cent return. If you put it into industry, you are bound to lose it. But if you lend it to your own Government you can get 19.5 per cent. Then, because that gives you such an enormous cash flow, you can take advantage of all the tax loopholes and incentives to reduce taxes. So what we are doing in this country by paying interest on the national debt is to create an incredibly wealthy upper class, with the result that we are also destroying our middle class. When a nation destroys its middle class, that great buffer against extremism in ideas and intolerance, then that nation will have much more intolerance, as we have in this society, and indeed I am sure we will have violence.
We need only think back to 1968 when we basically had balanced budgets in this country, Mr. Speaker. We had an extremely small national debt and we had all of the social programs. We had a tremendous health insurance program and a tremendous Canada Pension Plan. We had post-secondary education and Medicare because we had designed those Programs to redistribute wealth which we had first produced. We could have gone on under that system and continued to be the number one country in the entire world. Indeed, by now we should be calling the shots in the world, since we are less than one half of 1 per cent of the world's population yet are sitting on the resources of half a continent. We should not be out in the world capital markets on our knees borrowing money in competition with the Third World countries who need that capital. We are driving up interest rates by doing that. In fact, we are injuring Third World countries. We as a people should not be out in the world market competing for oil, because if we were not, it would mean more oil is available for the poor Third World countries and the price would drop. We should be self-sufficient, yet we are out there competing with them just like some sort of third rate under-developed country.
Well, Mr. Speaker, how did these deficits come about? An example is the area of agriculture where a Government decided by conscious and deliberate policy to have cheap food.
I will speak more about that later, but this meant in effect that we were telling our people to buy food from other countries rather than go out and produce it ourselves. We have 24 million acres of land along the northern band of our presently cultivated acreage which could be developed. Surely that is the solution.
Approximately seven million Canadians were born between the years 1951 and 1966. That was the real baby boom. We have known for a long time that they have been coming, and
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surely the role of Government is to have policies in place where they can move in and lend their energy to the benefit of the nation as a whole rather than be on welfare as they are now.
That 24 million acres compares with the days of Sir John A. Macdonald and Sir Wilfrid Laurier when we opened up the west. Indeed, the Government virtually gave a quarter section of land to a couple to get them to go out and develop it. We could give a section or two sections of land today to young families who could go out and develop that land. They would have moved into the land and we would have roads, schools, houses, along with the multiplier effect on the economy. It would have been like a brand-new west.
I just want to say, Mr. Speaker, that Canadians should beware of their government when it offers something for nothing. As farm people know, I suppose better than most of us who were born in and essentially live our lives in the city, that you really cannot do things as a nation that you cannot do as an individual. The farmer knows that when you spend more money than you make, even though you may fool your neighbour for a year, two years or even five years, ultimately you are going down the tube. The nation is no different from the individual in that respect, Mr. Speaker.
That is how the Liberal Party got us into such trouble. It offered something for nothing. For years, as a result of rising inflation and deficit financing it was able to offer all sorts of attractive programs to Canadians. Of course, we all liked that. While we were getting those programs, we were able to keep the low capitalist tax. We had tremendous programs with low taxes. The trick was that the Government borrowed the difference. That was no problem in the first year; it only increased the national debt by about $1 billion. The interest to service that debt was around 5 per cent of tax revenue but it became 10 per cent, 15 per cent and even 20 per cent. Now it is over 30 per cent even the Liberal Government recognizes that it has to cut back.
While we had the programs and the low taxes, the Government borrowed the difference. People paid far too much for land and for businesses. They took on homes with huge mortgages. Now they cannot do that any more and taxes are increasing to match the programs. People are dropping like flies because they do not have the cash flow to handle their debts. This all goes back to a Government decision, Mr. Speaker, not to individual decisions, because Canadians responded to an economic climate set by the Government.
What was the second bad policy the Government used, Mr. Speaker? It was the energy policy, an incredibly important commodity to agriculture. As a result of the decisions made regarding energy in the 1970s, the Liberal Government destroyed the automotive industry in this country. It is now in the process of destroying the energy industry and, to a substantial degree, the agricultural industry. In the 50 years prior to 1970 the western industrial nations kept the price of oil at approximately $2.35 per barrel coming into Montreal. That
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was the result of a conspiracy between the western industrialized nations and the "seven sisters" in the oil industry who acted as our agents.
Any time a producing oil country anywhere in the world tried to get value for the oil-because they knew that a barrel of oil should be sold for more than $2.35-they were ruthlessly cut off by the western oil conspiracy. That went on for 50 years. During that period we converted from the horse and buggy to high energy consuming tractors, combines, cars and trucks. Trains switched from coal to diesel and the whole system became dependent on cheap fuel.
In the early seventies the OPEC nations got their act together and drove the price of energy up to its true worth in comparison to manufactured goods and other commodities. What did the Governments of the United States and Canada do? They were not going to be blackmailed by a bunch of Arabs; That is what they said. They said they would keep the price of oil down. They did, but what was the effect of that? It sent signals to the automotive industry to produce big cars and to individual Canadians to buy big cars. Meanwhile, Japan and Germany, which had to go immediately to the world price, turned their intellectual creativity to the production of cheaper cars that used less energy. Now, some eight years later, the Japanese, German, and other manufacturers are beating the Canadian manufacturers hands down. Tens of thousands of people are unemployed in the automotive industry as a result of a Liberal Government decision, consciously and deliberately taken in the early 70s when it was trying to help people.
In fact, other people were injured by that decision. When an automotive worker does not work, a steelworker does not work. When an employee in the oil industry in western Canada does not work, that means that someone in the automotive industry does not work either, because people in western Canada buy cars manufactured in central Canada. The pipe used in the oil industry is manufactured in Hamilton and the rail cars used in western Canada are made in Hamilton and in Nova Scotia. We are interdependent, Mr. Speaker, so we need to watch governments very carefully.
The Government said it would not go to world price for oil but would hold down the cost of energy. Canadians believed the Liberal campaign machine but things turned out to be the exact opposite of what it claimed. The Conservative Party told Canadians that we need to pay more for energy in this country because that would result in the production of cheaper and more efficient cars. It would also provide the money for new oil sands plants so that synthetic crude could come into production and money so that oil could be brought in by producers in the Arctic and off the east coast.
The Liberal Party did not want to leave the initiative with private industry but rather but with Government. Now we pay almost world price for oil, but most of the increase goes to the Government by way of taxes. For every gallon of gasoline used on the farm, some 60 cents goes to the Government as tax. The Government then decides how that money is to be spent.
In the oil industry in this country things are not as they were in the old days, when someone got hold of the seismic data and drilled where they thought there might be oil. Now they have

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to drill where the Government bureaucracy wants them to. Because it wants drilling to take place in the Arctic and off the east coast, it is prepared to offer rebates of 90 per cent plus. The decision is not based on where the oil is likely to be, but where the maximum grant is paid. That builds inefficiency into the system and results in less oil being found.
We should have a synthetic tar sands plant coming on stream every year in this country to offset the reduction in the light, conventional crude produced in western Canada. We started with 16 billion barrels of light, conventional crude along the Mackenzie Valley and through Alberta. We have been using that supply up and are down to less than four billion barrels. The rate of production of that light, sweet Alberta crude is going down to 100,000 barrels per year. Next year, 100,000 barrels less will be produced per day than is produced this year. The year after that, the reduction will be exactly the same. With a synthetic tar sands plant producing 100,000 barrels per day, we would need one more plant every year just to keep even. We are heading for deep trouble, Mr. Speaker.
The Government will soon release documents to show that less oil is being imported, and to an extent that is true. The reduction is caused solely by the recession, however. We would not need to import any oil at all if we were driven to bankruptcy, and indeed that may happen in another three or four years under this Government.
The third bad policy that affects farmers is the capital gains tax. For years and years in this country we permitted farmers to build a farm and to consolidate it into an efficient, economic operation. It could be passed on to the next generation with a minimum of Government interference. That is not the case now. Under the November, 1981 budget-and the capital gains tax provisions of that budget have not been changed- farmers cannot transfer a farm to the next generation by an agreement for sale and spread the capital gains tax over many, many years. It is now restricted to ten years if the farm is going to the immediate family. Farmers have lost the ability to sell, take the cash and put it into IAACs. They cannot do that any longer, so the taxes are payable on the sale.
Then there is a system of forward averaging where farmers can obtain a tax credit in future years. Immediately we see that if farmers become aged, want to sell and die within a couple of years after the sale, the Government keeps all the tax; there is no rebate then. The Government is taking an incredibly unfair advantage of senior farmers who sell. The effect is that almost invariably parts of the farms end up being sold off to pay taxes. This makes farms smaller and smaller, which makes farmers more inefficient. Therefore, we get less food from them and the national interest is injured. It is similar to the difference between land tenure in the United Kingdom and France. Periodically in France there is a great consolidation because farms have become so small that they cannot continue to be efficient.
The capital gains tax is not raising all that much money for our central coffers. Most of the gain is not in fact a real gain at all. It is simply an inflationary gain, which goes back to what I was talking about earlier-the deficit. Whenever there is inflation with too many dollars chasing too few goods, the inflationary value settles on things.
We are still a young nation. Most people came to Canada to get land; this is why people went west. They came from situations in Europe, whether it was the United Kingdom, Germany, Hungary or Poland, because they were locked into a class situation from which they could not escape and an economic situation where they could not obtain access to land. They were prepared to sell their meagre assets in those countries, get on a boat and go off to a strange country speaking strange languages, and to go to the great western plains where it did not matter from where they came. Racial intolerances did not matter when they were sitting out there during the cold winters. All differences disappeared because they were small human beings. This sort of explains the incredible multicultural nature of western Canada. It did not matter whether one was a Scotsman, a Pole or a Ukranian; each helped one another when faced with the incredible climatic problems of western Canada. As a result, three generations later western Canadian agriculture is strong and efficient, and the western Canadian people have a nationality which is much more cohesive than I think even they realize.
To give a few dollars of interest subsidy to a few farmers in western Canada and across the rest of the country is not really what they need. They really need relief from capital gains so that they can plan to pass their farms on to the next generation and still do justice and equity to children who are not on the farms. This is what needs to be done.
Clearly the solution is in the agricultural sector. There are 320,000 people committed to the land. One has to understand farmers and almost has to have lived on a farm to understand them truly. These people are efficient. There are 24 million hectares of land which could be brought onstream. We still have young people. Basically the progeny of the baby boom about which I talked are now between the ages of 18 and 33. If the Government came out with agricultural policies to turn them loose into that line, we could handle our unemployment problem. Think of all the tractors, trucks, and machinery which would be needed. Think of electrical wires and the whole business of settling people in a new part of the country. It would be fabulous. They are available. They are keen, well-educated and individualistic. They want to prove themselves in their own way. It would free up people from the continuing growth of government.
Another irony to which I cannot get accustomed is the fact that years ago when our parents and grandparents did not have the benefit of the education which we think we have had, they did not need government laws to control them. Now people have more and more education, intelligence and presumably tolerance, and we have more and more laws controlling them. When we bring people out of university and hire them in the Public Service, for example, they are put into small niches and
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are given so little discretion, responsibility and accountability that they are incredibly unhappy. Then the morale of the service goes down, down and down. Years ago we would give persons jobs, hold them accountable, and they were happy to take on responsibilities. Why is it that the more educated we are, the more government we need? I am sure the Government will not answer that one, but I would like to hear its Members talk about it.
I will vote for this bill, but I want farmers across the country to understand clearly that, in my judgment, it is not adequate. It is using a band-aid for a huge cut; it is the wrong perspective. We need to look at other policies rather than subsidies to farmers. Our farmers can compete against any farmer in any country in the entire world. They have been operating at the world cutting edge for years. They are used to it, they can handle it. When we start putting subsidies on them, it means that there will be a degree of inefficiency equal to the subsidy. As manufacturers have now learned, when a government gives a tariff protection or a subsidy of 15 per cent it becomes an inefficiency factor of exactly the same equivalent. Meanwhile producers of other countries which do not offer subsidies will be able to undercut us and whip us in the marketplace. Subsidies should not be considered other than in the very shortest of terms and only in order to permit an industry or a sector to adjust to the world market. Because we are a trading nation our starting point should always be: What is our international competition doing? Let us meet that so our producers can adjust.


Mr. Girve Fretz (Erie):: Mr. Speaker, I speak today as a representative of an agricultural constituency in order to discuss some of the ramifications of Bill C-134. Over the last few years there have been many changes in the farming community and in the technology of agriculture in Canada. As a result the needs of the agricultural industry have changed from what they were in the past. The main difference, as in many other industries but especially agriculture, is that a great deal of capital is required.
Approximately 100 years ago our ancestors were jumping on the railway to head out to the untouched lands of Saskatchewan and Manitoba where, perhaps without a dime to their names, they could forge a life for themselves from the land. For the young people on the farms today there is plenty of ambition, but unfortunately that alone is not enough. Today one must have in the order of at least $200,000 or $300,000, whether this capital is borrowed or inherited, just to begin a career in agriculture.
The critics on the sidelines can very easily say that the farmer can rent his property just as the businessman in the city rents his store and perhaps gets along very well without owning the building. However, it is evident to anyone who has lived any length of time in an agricultural community that there is pride when land is owned. When there is pride of ownership, the buildings are maintained and the land is not allowed to lose its fertility or be covered with weeds. The point I am trying to make is that in order for a farmer to obtain ownership of land,
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he must have access to large sums of money and at reasonable interest rates. This is not the case today.
The interest rates available for the young farmer starting out today are such that any profits which he obtains through hard work and sacrifice are eaten up in interest payments to some bank head office in a skyscraper on Bay Street. However good the intention of the Bill is, it is simply inadequate for reasons which I will outline presently. Bill C-134 is definitely a step in the right direction, but it is certainly not a giant leap for mankind. Unfortunately, the amount of money which has been set aside for this Bill is insufficient. At first, this was a $216 million program. Now we are told that $116 million of this amount is coming from the Farm Credit Corporation itself. This would be fine if all of this money came from outside lending institutions. However, that $116 million is coming directly from the Farm Credit Corporation itself. This sounds like a classic case of robbing Peter to pay Paul, or perhaps robbing Marc to pay Gene. The Farm Credit Corporation is an established body which is designed to finance the agricultural industry. When $116 million is taken out of this fund, obviously it leaves less in there to fulfill the job which it was intended to do. There we have the first flaw in Bill C-134.
There is not enough money in the fund, and it is coming from the wrong source. Therefore, my colleagues and I encourage this Government to put at least another $300 million into the Farm Credit Corporation budget to take care of this new interest rebate program.
My statistics tell me that 20,000 Canadian farmers desperately need the assistance of this program. Do you know how many people are going to be assisted by this program, Mr. Speaker? With the funding currently available, it would appear that approximately 500 farmers will be assisted by this program. Now, to me, that is a little less than the proverbial drop in the bucket.
I would like to address another problem which is affecting the farming community, which, if solved, would certainly result in fewer farmers requiring the assistance provided by such programs as set out in this Bill. The problem lies in the fact that every time one generation turns the land over to the next generation, a considerable amount of capital gain is involved. Once again, if a young farmer wishes to buy the land from his father or his neighbour, the cost of the capital gain will certainly be included in the price of the land to the purchaser. Obviously, this elevates prices unnecessarily, and following the domino effect, as the land moves from generation to generation, all the accumulated costs are passed on to the younger farmers who can afford it the very least. 1 feel that this kind of taxation is unwarranted and creates hardship among the workers in Canada's most important industry.
The current need for help with interest rates, then, is only the tip of the iceberg. Bill C-134 is rather like a bandage which covers the wound but does not heal the disorder. Just as you do not need bandages when you are not bleeding, we would not need Bill C-134 if overtaxation did not bleed the farming

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community to the bone. The Members of the Government will, no doubt, offer the argument that, like any other businessman, the farmer experiences periods of growth and periods of recession, periods of prosperity and periods of stagnation. He must weather the storms of financial distress, just like any other business person.
However, this is not just any industry. This is the food supply of our country. For this very reason I feel that the farmer should not have to face this kind of interest burden. I emphasize that these benefits should apply only to the career farmer. I am not talking about the speculator who is out to make a quick dollar, or the gentleman farmer who grazes a few race horses for his amusement. I am talking about the hardworking family farmer who has worked hard to maintain the equity in his farm and has done his best to run an efficient operation.
Another important difference between farming operations and other businesses is this: the farmer must maintain, in order to be efficient during the rush periods of the year, a fleet of equipment, which is often worth hundreds of thousands of dollars. This equipment often lays idle for ten months of the year, but if it is not there during the critical period, the owner stands to lose a great deal of money. In order to purchase and maintain such a fleet of equipment, the farmer must have a great deal of capital.
On Saturday night I attended a dinner in West Lincoln, in my riding of Erie. I sat beside a farmer who told me the story of a farmer who lives right next to him. He put in a crop of soybeans. He depends upon a custom harvester to harvest his crop. It was a wet fall, and when there was a couple of days of dry weather, the harvester was not available because it was working on other farms. The farmer lost that entire soybean crop. Unlike the manufacturer who can use his machinery 24 hours a day and seven days a week if he wishes, the farmer only uses his machinery profitably a very small percentage of the time. Therefore, a comparison between farming and industry in terms of eligibility for financial assistance is like comparing apples and oranges.
The last point I should like to make is that many Canadians are reaching retirement age. In the next ten to 15 years, many of these people will move into their little apartments in town. What will happen to the land which they are working now? Which would you rather see, a generation of young, ambitious farmers willing to toil to develop efficient and profitable enterprises, living in small, close-knit communities that are economically self-sustaining, or giant corporations complete with efficiency experts and an army of accountants promoting cost-saving policies at the expense of aesthetic and sociological considerations? Unless this Government recognizes the value of the family farm and plans its assistance programs accordingly, farm communities as we know them will disappear, and we will have acres and acres of fenceless, levelled land which can be efficiently farmed with huge machinery owned only by giant corporations. Instead of living on the land, workers will come from afar to drive equipment at an hourly wage. I am sure that the Members of this House would like to see the
tradition of the family farm continued. Like home ownership, however, this dream is rapidly disappearing. The family farm cannot continue to exist without effective financial assistance being given to the young farmers.
To some degree I applaud Bill C-134 for its attempt to focus upon this genuine problem. However, as I have already stated, the program does not go far enough and does not help enough people. Perhaps the intentions are good, but we have to enlarge the scope of this Bill. Certainly, by doing this, we can help to ensure the continuation of a healthy, people-centered agricultural industry in this country in the years to come.


Mrs. Jennifer Cossitt (Leeds-Grenville):: Mr. Speaker, it is with great pride and a deep sense of honour that I stand here today in the House of Commons as the newly elected representative for Leeds-Grenville to speak out on matters that are of great concern not only to my riding but also to Canada.
Hon. Members from all sides of the House are already familiar with the riding of Leeds-Grenville because of its close proximity to Ottawa. It is one of the most beautiful and picturesque ridings in this part of the country. The Rideau Canal system, of which we are all very proud, celebrated its one hundred and fiftieth anniversary this year, and all along its banks it provides many peaceful rest havens for retirees and weekend hideaways for many of the Ottawa area and local residents.
Brockville, the only city in my riding, borders on the St. Lawrence River and also celebrated its sesquicentennial this year, attracting many distinguished visitors. Leeds-Grenville is very much at home amid the lovely Thousand Islands, and Gananoque, a small town nestled in the southwest end of the riding, is in the midst of this scenic wonder. It is not very difficult to realize that there is tremendous tourism potential in that area that should be expanded to its fullest to promote much needed employment and bring in additional revenues through which the economy can grow and develop.
All along the St. Lawrence River there is a great industrial base, which unfortunately has been dealt some stiff blows in recent years because of the faltering economy with which the Government has not come to grips. Every week I am made aware of the fact that somewhere in the riding 20 or 30 people have been let go from their jobs, and while this may not sound too significant in itself, these numbers added together over months and months become increasingly significant, and we begin referring to hundreds of people who have lost their jobs.
Brockville alone has suffered major lay-offs in the last few months, and unemployment has increased 35 per cent since last year. Prescott, a small town east of Brockville, has been the hardest hit by unemployment and must resort to worksharing programs to keep its people employed. Here, unemployment has increased more than 50 per cent over the same period last year. Gananoque, its major industry being tourism, suffers appreciably during the winter months and has also had
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to bear the brunt of unemployment increasing by 50 per cent over the same period.
I am speaking about a devastating attack on the economy of Leeds-Grenville. 1 have yet to hear anything from the other side of the House which will even come close to relieving the pressures created by the Government's irresponsibility. I am speaking about Canadians who have lost all sense of security and no longer trust their Government, and I am referring to hundreds of families who must now rely on unemployment insurance benefits with nothing to look forward to but the welfare lines for their bread and butter. It is very hard for the people of my riding to live on depreciating incomes when they have children to feed and clothe, but the people of Leeds-Grenville are determined to survive the worst recession they have had to face since the great depression. They survived then and they will survive now, and I am here to make sure they get all the help they need. I am here to make sure this Government hears about their concerns and hears about their problems. They elected me to tell the Government how tough it has become to meet their mortgage payments, how tough it has become to put good, wholesome food on the table, and how tough it has become to make sure their children have the warm clothing they need for the long, hard winter the Prime Minister (Mr. Trudeau) promised us earlier this fall.
Leeds-Grenville has a rich agricultural community, strong in dairy and meat producers. Over 1,800 farmers are scattered throughout both of the counties and, as I visited many of them during my recent campaign travels, I was told countless times, "This farm is inoperative". I ask this House, when will we make these farms operative again?
Forty per cent of Canada's economy is made up of the agrifood industry, and we cannot afford to ignore such a large sector of this great country's potential. If we do, we will also be ignoring the merchant who will no longer have enough products to sell, and we will be ignoring the factory worker who will no longer have a job when his firm stops producing farm machinery because there is no longer a market for these items. The importance of stabilizing this industry cannot be emphasized enough when it affects so many people connected directly or indirectly with the production of life's essential commodity, food.
Because the agricultural industry is so important to my riding and to each and every person in this country, I was very pleased to see some positive action taken by this Government through Bill C-134, but I cannot say that I, or any of the farmers in Leeds-Grenville, believe that the Bill will provide them with the relief they so desperately need to survive at a time when their costs far exceed their incomes.
Farm bankruptcies are now 65 per cent higher than last year, and the numbers are still climbing, with farmers in Ontario being hardest hit. In the last 12 months, 261 farmers went bankrupt and were forced to watch helplessly as their livestock, their barns and their machinery were sold off at rock bottom prices because creditors could no longer wait to have their long outstanding debts paid. This Bill will be retroactive to June 28, but how many farmers have already lost everything for which they worked all their lives, farms that have been
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passed down from one generation to another, because that assistance was not there when they needed it? I ask this Government to explain what will happen now to those farmers.
Our farming community is made up of hardworking, proud people, battling against the toughest elements nature could hurl at them, and surviving. They are not looking for handouts. They are looking for a little assistance that will help them continue the fight against the onslaught of escalating costs of production, the constantly rising price of energy, fuel, herbicides, fertilizers and machinery.
Every aspect of the farming operation has faced increased costs. However, a farmer's net income is expected to be 17 per cent lower this year than last year. Just how does this Government expect our farmers to continue to operate when they are faced with such devastating losses? Our farmers need assistance now to buy new machinery to replace worn out harvesters and milking machines. They need assistance now to expand their operations so that they can keep up with the market demands of the future, not the market demands of the past. And they need the support of the Federal Government now, not six months or 12 months from now. All the Government is doing is to introduce a Bill from which, the Canadian Federation of Agriculture estimates, only 500 farmers will actually benefit. That is only 2.5 per cent of the 20,000 farmers who need assistance today. The generosity of the Government is overwhelming.
It is long past the time that this Government realized that Canada needs a stable, thriving agricultural industry and a stable, thriving economy. It is time the Government took the necessary steps to stop us from plummeting down the road to economic disaster, to stop the rising and unbearable level of unemployment, to stop the extravagant and wasteful overspending of the past 14 years.
We have lands, resources and the potential to be one of the leading producers in the worlds' agrifood industry supporting the growing population of the future, but if the present Government persists in ignoring the requirements of an industry that needs to be developed and expanded, we will eventually become a country totally dependent on the rest of the world for its food. The Government must immediately begin a recovery program which will not only benefit our farmers but will benefit all Canadians, and will restore economic growth and productivity.
Revitalizing the agrifood industry must be one of the Government's top priorities, and I suggest that the Minister of Agriculture (Mr. Whelan) starts today-not tomorrow, not next week or next year, as he has so often stated in the past- to introduce legislation that will give farmers the assistance they so desperately need.
The concerns of the farming community are shared by the average Canadian. They are concerned about a spiralling rate of unemployment that is at an all time high since the great Depression. This figure does not even take into account those persons who have given up hope of finding employment, those who have succumbed to the pressures, stresses and frustrations

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of being rejected and having no hope of getting back into the work force. The Government seems to be immune to their cries for action and their pleas for help at a time when it has become abundantly clear it is so desperately needed.
The unemployment situation is creating a wave of fear and terror among Canadians, creating more and more stress within the family unit, resulting in increased separations. Wife and child battering are becoming more acute, and every day more and more children are being abandoned to the Children's Aid Society, a devastating social reaction brought about by the hard times plaguing this nation.
The people of Leeds-Grenville elected me to speak out on their behalf. They want me to speak not only for the farmers but also for each and every one of the 80,000 people living in my constituency. They want me to send their message to the Prime Minister and to Hon. Members sitting on the other side of the House. They elected me to tell this Government that they are fed up and disgusted with the way this country is being run. They are disgusted with a bureaucracy that wastes $16 million of their hard-earned tax dollars through sheer mismanagement and extravagance. They are disgusted with a Government that has overspent so much in times of prosperity that it now cannot help those who need it in times of despair.
Canada is a country with a wealth of natural resources available to her. Therefore, how can she be motivated to utilize her vast resources to increase productivity which, in turn, would lead to greater wealth for our country? We were once looked upon by the rest of the world as a nation that was really going somewhere, a nation with vast potential, the Promised Land. But look at us today. Under the economic mismanagement of the present Government, our reputation as to our ability to produce wealth has sunk to its lowest ebb.
In closing I should like to say that I believe we have one of the greatest resources available to us, that is, human beings. Yet this Government is stifling the natural incentives and initiatives of individuals who want to be productive and responsible Canadians with a future to look forward to.
Canada needs direction, she needs leadership and she needs a goal. Under our present Government, Mr. Speaker, we have none of these.


Walter David Baker: That was a first-class maiden speech.


Some Hon. Members:: Hear, hear!


Mr. Derek Blackburn (Brant):: Mr. Speaker, before I begin my address on Bill C-134, on behalf of my party I would like to extend congratulations to the Hon. Member for Leeds-Grenville (Mrs. Cossitt) for her very fine victory last month in the byelection and for her very fine maiden speech in this House of Commons.


Some Hon. Members:: Hear, hear!


Derek Nigel Ernest Blackburn: I know that I speak for all Members on both sides of the House when I say that we look forward to hearing from her on many occasions between now and the next election. However, beyond the next election I will not go at this moment.
Bill C-134 is a very crucial bill in some respects. In other respects, unfortunately, it falls far short of what I think is the main problem of the Canadian farm community today. On the one hand, this Bill will free more funds to help some farmers who presently find themselves in dire straits. To a limited degree, that is commendable. But when one considers that, at the most, this added funding through Bill C-134, at an average loan of $50,000, will assist perhaps a total of 500 farmers, and when in fact the Canadian Federation of Agriculture very accurately estimates that 10 per cent of our farming community is in dire straits, this means that 20,000 farmers, need immediate financial aid or assistance just to keep their heads above water, to say nothing of expanding or modernizing their already existing facilities.
Members on this side of the House, and some Members on the Liberal side, have for the past two years called for added financial assistance to the farming community. I am not a farmer myself, though my constituency comprises some of the finest farms and farmland in southwestern Ontario. I have spoken on many occasions on behalf of the farmers in my riding. While the cynics might say the reason I do this now and then is simply to try to get some votes in a rural area, I would like to think that the only reason I speak on farm problems is that agriculture, whether in Brant, in Saskatchewan, in eastern Ontario, in the Maritimes or in British Columbia, is fundamentally our most important industry. Perhaps we can say that forestry and farming are the two most important basic industries in the country.
If the farm community and the farm industry are in trouble anywhere in our country, and at the present time they are in trouble all over the country, then the entire economy is adversely affected and people from coast to coast are adversely affected. That is why bills such as Bill C-134 are very important. Bill C-134 does not go far enough, and for many hundreds of farmers it comes too late.
Let me quote from a letter which the Canadian Federation of Agriculture sent to the NDP farm critic just last week. It is dated October 26, and reads, in part:
-the grains, oilseeds and beef industries are in deep distress, and hog producers, while currently receiving improved prices are struggling to survive the effects of depressed prices of the recent past and apprehensive about prices looking to 1983. There is little light on the horizon for these farm sectors.
Coming as it does from the Canadian Federation of Agriculture, one can draw only one conclusion from that letter. There is no rhetoric in it; it is stating facts. If anyone in this country should know the facts, it is the Canadian Federation of Agriculture because the real nub of the problem is right there in that short extract.
Farmers, like many other businessmen in this country, are caught in the cost-price squeeze. I can remember making speeches similar to this one using that expression ten years
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ago. I came here 12 years ago. The situation on the farm front, as far as the cost-price squeeze is concerned, has not changed very much except that it has grown worse. The reason is that traditionally operating costs were increasing at a higher or a faster rate than commodity prices. Added to the traditional operating costs, such as fuel, energy, fertilizers and feeds, we have seen in the last year and a half to two years a phenomenal increase in energy and fuel costs and a phenomenal increase in the rate of interest charged against loans. Farmers must have loans. If there is any traditional business group in our community that relies almost entirely upon seasonal or short-term loans, it is the farming community. Faced with interest rates of 18 per cent, 19 per cent and 20 per cent during the latter part of 1981 and into the first half of 1982 and faced with fuel and energy costs on an annual basis escalating at the rate of 17 per cent to 22 per cent and fertilizer and feed costs rising at the rate of between 12 per cent and 15 per cent, it is not very difficult for anyone to conclude that the cost-price squeeze as it affects the farm community in this country has become critical. It has reached the point where farm after farm after farm is going out of operation.
As I sat here and listened today to speeches made by other Hon. Members, I heard them talk about the tragedy of the disappearance of the family farm. Since its beginning my Party, the NDP, has supported the family farm. One of the main reasons why our predecessor, the CCF, became a political national party in the 1930s was the rural protest, not so much the urban, in the west in 1932, 1933 and 1934.
Perhaps one might blame our party for being too idealistic in the tough times of the thirties when it came into power in Saskatchewan, primarily for supporting rural Saskatchewan, the farming community. We in the New Democratic Party have a long tradition of supporting good farm policies and good legislation. Let there be no mistake about that. The Liberals and Conservatives do not have exclusive priority when it comes to supporting the rural community in Canada.
There are two other reasons. I alluded to high interest rates, which I will get back to in a moment. The other major cause of the problem, apart from general inflation not only in Canada but throughout the western world, is the drop in commodity prices. I quoted the Canadian Federation of Agriculture as saying that grain, oilseed and beef producers are in very deep trouble. Commodity prices are falling drastically all over.
I talked recently with a farmer who told me that in 1979 he was getting $4.60 a bushel for corn. The best price he could get as of two or three weeks ago when I talked with him was $3.90 a bushel. When you put together the drop in commodity prices and the rise in operating costs, energy fuel and interest rates on borrowing, you can see why the farm community is in trouble.
Another problem is that in the seventies the federal and provincial Governments and various farm organizations were
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encouraging young farmers to expand, modernize and purchase the latest world class technology, state of the art combines such as the axial flow rotary combine which was engineered, designed and produced in my riding by White Farm Equipment, Massey-Ferguson combine and so on.
As prices were going up, farmers needed more and more operating money to purchase this expensive machinery. In 1975, 1976 and 1977 the banks were throwing money at these farmers. Bank managers were not doing proper appraisals or intensively looking at the books. There was a lot of money and a tremendous demand for farm loans. I repeat, the banks were throwing money at the farmers. All of a sudden we hit a recession. The banks started getting scared. The banks were not gouging quite as successful as they have done historically in this country. Their profit began to decline slightly, so they became scared. They started to call in some of these shortterm loans. Of course, this created fear throughout the entire farming community. We therefore have several combinations; an increase in operating costs, a phenomenal increase in interest rates, a decline in farm prices, particularly commodity prices, and the cost-price squeeze.
What does Bill C-134 promise to do? I am afraid not very much. In 1982 the Farm Credit Corporation will have an additional $200 million to assist farmers, and is promised an additional $100 million for 1983. I do not know what these amounts are based on because if you average the loans made by the FCC, you find that $50,000 will help about 500 farmers. I said at the outset of my speech that there are some 20,000 farmers who are financially strapped and in dire straits.
The average loan needed today by farmers who are in dire straits is not $50,000. That certainly would help, but would not solve the problems of those 20,000 farmers. We are talking more in terms of $ 100,000 loans. At 18 or 20 per cent on the open market, that is an additional carrying charge of $20,000 a year.
It is true that through Bill C-134 there will be a differential in favour of the farmer who is lucky enough to get a loan through FCC of four percentage points. If the rate on the date on which the loan deal is closed is 18 per cent, the farmer will get this loan at 14 per cent. There is one problem. We in the NDP think that this should be a floating rate so that the percentage rate would be adjusted downward from time to time. The borrower would not be hooked into the higher interest rate for six months or several years. It would float according to market forces.
I said at the outset that this bill is not only too little but it has come too late for many farmers in Canada. Let us look at some of the statistics, the amount of money that borrowers are in arrears to the Farm Credit Corporation. In 1982, they were in arrears to the Farm Credit Corporation, in other words not paid up, $71.9 million or 12.4 per cent of accounts. In 1981 it was $44.9 million or 9.9 per cent of accounts. The percentage increase in dollar arrears is 60 per cent.
These are alarming figures. Historically and traditionally they have been extremely good at paying their debts. Farmers had one of the highest credit ratings of any business group in

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the community at large, but here we have millions of dollars outstanding in arrears over the last two years. That is a good indicator of how serious the financial situation is today on the farm front.
Let us look at the number of bankruptcies. I know this topic has been dealt with by other speakers and the media in the past year, but I would be irresponsible in not including these figures in my address this afternoon, if only to remind Hon. Members that the situation has not improved over this past summer and fall. It has continued to deteriorate.
In the first six months of 1982, there were 316 recorded bankruptcies. That does not include forced sales or those who have given up and sold at bargain basement prices, if they could get anything at all for their machinery, cattle or buildings. We are talking about recorded bankruptcies in the first six months of 1982, Canada-wide, which totalled 316. That contrasts with 191 for all of 1981, an increase in 1982 over
1981	of 65 per cent.
In 1980 there were 164 bankruptcies recorded across Canada and 82 in 1979. The percentage increase in 1982 over 1979, three years, of bankruptcies in Canada in the farming community was a whopping 285 per cent. In Ontario alone in
1982	there were 132 bankruptcies as compared with 112 in 1981. I have been using figures and statistics here, but it goes beyond that. We are talking about human beings, families, a way of life. We are talking about rural Canada's hopes and dreams going down the tube, disillusionment and despair, shattered dreams and aspirations. I am not exaggerating. I am talking in terms of hundreds of farms, not a couple of dozen. The Canadian Federation of Agriculture estimates, and I emphasize again, that 20,000 farmers are in dire straits. So in addition to the bankruptcies, we are talking of at least another 20,000 farmers who are finding it difficult to sleep at night and to keep their emotions stable. These farmers are not planning expansion or extensions or modernization. They are not planning to borrow because their line of credit has run out, or their credit rating has virtually disappeared. They are just planning day by day, hoping and praying they can keep their farms, their livestock, their land; just to stay in business, just to remain farmers. That is a lot of people.
Third World countries and developing nations look at Canadians and think we are so well off, so rich, and indeed we are, comparatively speaking. No one would argue that point. But they cannot understand why we are not producing more food, why we have farm bankruptcies, and why thousands of farmers go to bed at night worring whether next month or in six months' time they are still going to have deed to their land. In a world of hunger they cannot understand why our farmers cannot or will not produce more food. We know they can. We have some of the best farmers in the world in our country, if not the best. All they want is a fair return on their investment and hard work. But for some reason our Government, and other governments in the western world, cannot seem to get their act together. They cannot seem to rationalize agriculture productivity to the point where we could specialize to an even greater degree so as to produce at a unit cost that would be
competitive in world markets. This would bring us a reasonable return on the invested dollar and the invested work in the Canadian farm community. That is another major concern of my Party as well as the concern of farmers across Canada.
When I talk about the farm community, I am not limiting my perspective just to farmers. I represent the federal electoral district of Brant, which is in Southwestern Ontario. Its largest community is the city of Brantford where we have Massey-Ferguson's North American combine operation and White Farm Equipment, both of which are recipients of Government aid at this time and neither of which is operating. They are flat out. They do not even have half a shift. No one goes into work except a few maintenance people. When farm times are good, my city is booming. I do not want to sound selfish; it is true as well in other communities across Canada. But this city, with a population, of 75,000, with a work force of 48,000, now has 13,700 persons drawing unemployment insurance, nearly 5,000 of whom, two years ago, were working either for Massey-Ferguson or for White Farm Equipment.
Chatham is another city which is very badly hit, along with Hamilton. When you have 25 per cent unemployment, and almost half of that is from the farm implement sector, in one community of 75,000, then it is little wonder that the depression, the pall that hangs over my home town of Brantford, can almost be felt and tasted when I visit there on weekends. The two shopping malls are almost deserted. The main street is deserted at high noon on a Saturday. People who have money are not spending it, and the vast majority of those unemployed in my city have no money to spend, and I fear this winter a third of them will see their unemployment insurance run out and from there they will go to welfare.


An Hon. Member:: Did you say a third?


Derek Nigel Ernest Blackburn: Down about a third. I cannot get the figures. I tried to get them from the local unemployment insurance office, the regional office, and here in Ottawa, but no one will give me an estimate of how many will be running out of unemployment insurance benefits this winter. The estimate, at City Hall in Brantford, is approximately a third. So we are talking about 4,000 people who may indeed end up on welfare.
If Massey-Ferguson or White Farm were operating at full speed, which they would if the farm community were in a healthy, buoyant financial position, this would not be happening. The inter-relationship between rural Canada and urban Canada is graphically brought home to all of us when we visit a city such as Brantford. That is why, when I take a look at Bill C-134, Mr. Speaker, I wonder just what ripple or trickle down effect the $200 million will have on the 500 farmers coast to coast out of the 20,000 who need financial assistance. I wonder what effect that will have on communities such as Brantford, Chatham or Hamilton. It could be any of your prairie towns that are dependent on farm incomes, not necessarily towns that manufacture farm implements, except
November 8, 1982

perhaps for Winnipeg and Regina, but the grocery stores, restaurants, clothing stores, dry goods shops, and so on, in the small communities.
I have driven through Western Canada, and I want my friends from the west to know there is one Ontarian who has a very deep and abiding love and appreciation for Western Canada and our prairies, for its tremendously rich history and for the people who developed that part of our great country. The only thing that keeps us from being great again is that bunch over there. Perhaps I should not say that it is the only thing. It is true there are 30 million unemployed workers in the western industrial world, but I do not know why the Liberal Government here in Ottawa has to blame the economic situation constantly on Germany, France, and Italy, for example, and it is not as bad there as it is here right now in terms of employment and inflation.
Why do they say things are bad all over and then do nothing about it? We had what I can describe as sermonettes a couple of weeks ago, and we had the tremendous, flowery rhetoric of the local Liberal pow-wow at the Chateau over the weekend, and a host of promises about a tremendous economic turnaround. Well, a chap by the name of Herbert Hoover preached that for a couple of years in the early 1930s, and he was very quickly replaced by a man called Roosevelt. Nothing comes of rhetoric or promises; what we need is action, and today we are talking about action on the farm front, and the tremendous positive financial effect it will have in certain areas of the manufacturing and food processing sectors. We are not just talking about farms and farmers, we are talking about a major portion of the Canadian economy when we talk about Bill C-134 and its tremendous shortcomings.
The Canadian Federation of Agriculture, Mr. Speaker, at a meeting I attended early last spring, presented a brief on a proposal which I think merits tremendous consideration on the part of all Members of this House. It has already been mentioned by both my Conservative friends and other speakers from the NDP, that is the agribond. I do not profess to be an expert on the agribond and all the inner workings of that kind of approach, but it strikes me, as a lay person, as being an excellent idea. Retiring farmers would, let us say, sell their farm for $250,000 or $300,000, if they can get that much for it today. On the one hand they do not really need all that righta-way, and they do not need to pay the capital gains tax in one fell swoop either. Let us say they take two-thirds and put it into this general pool known as the agribond fund. While they may not get 12 per cent, 13 per cent or 14 per cent return on their investment, I think they would be prepared to take 7 per cent or 8 per cent if they knew that the money was going exclusively and specifically to farmers in need or to young farmers who want to buy their first farm or to other farmers who want to expand their operations or modernize, provided, of course, their farms are viable and potentially good.
It is a good investment, a safe investment and a helpful kind of investment because it is, in a way, self help. The retiring farmer is helping the young farmer either to get started or to
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expand. Money could then be lent within the farming community at much lower rates than the current market would demand. I do not know, it could be 10 per cent or even less, depending on how the agirbond was set up. So I highly commend, along, I think, with every other speaker today on ths side of the House anyway, the concept and application of the agribond. I commend the Canadian Federation of Agriculture and any others who are directly responsible for coming up with this idea.
Mir. Baker (Nepean-Carleton): First-class idea.


Derek Nigel Ernest Blackburn: First-class idea, very true. I would like to hear somebody on the Liberal side challenge us on this side on the agribond. Maybe it is not the best way, though I have not heard from anyone over there all afternoon. Secondly, if there is a Liberal over there who is interested in farmers and their problems, I invite him or her to stand up this evening and challenge this side of the House on the matter of the agribond. Tell us what is wrong with it. Tell us where or how it will not work. Give us a reasonable argument and maybe we will oppose it. But we have not hear a thing from the Liberals on this very vital issue.
While we on this side of the House are often blamed for being negative, Mr. Speaker, I might say my speech has not been entirely negative. I have put forward some constructive suggestions concerning this Bill, such as lower interest rates to farmers who borrow money, and that the agribond should not only be considered but should be implemented just as quickly as possible. I have also mentioned how this, in turn, would have a positive effect on the agriculture implement industry, the parts industry, indeed, the economy as a whole. However, as I said, we on this side are often accused of being totally negative. Well, I am going to quote from the Globe and Mail of November 4, 1982. The article refers only to prairie farmers, but the picture is the same in Ontario, Quebec and the Maritimes. In fact, in some parts of Ontario it is even worse. It says:
Prairie farm income in 1982 will drop to its lowest level in 10 years, farmers attending a conference sponsored by United Grain Growers Ltd. of Winnipeg in Banff, Alta., were told.
UGG directors said in a year-end forecast that farm income will drop 28 per cent from 1981 mainly because of sliding grain prices and higher costs borne by farmers.
I mentioned those costs earlier in my speech. High interest rates, high energy costs, fertilizer costs and so on. The article goes on:
Only good yields and high deliveries of grain will prevent an even steeper drop in income, the UGG report said.
After an increase in costs, farmers' profits will drop $708-million from 1981, the report said. "Comparing the purchasing power of today's dollar to the deflated dollar, what a farmer could buy for 37 cents in 1971 cost him $1 in 1982."
Farmers' incomes will drop 36 per cent in Saskatchewan and 34 per cent in Manitoba.
I have enough faith, Mr. Speaker, in rural Canada and our farming community to know that the majority of our farmers will hang in and weather this very severe financial crisis in
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which many of them find themselves. But I do not know how much longer we as Parliamentarians and legislators can expect the majority of farmers to continue to encourage their sons and daughters to go into farming if this is the kind of mess that we are leaving to them as a legacy. Something has to be done, not to guarantee them wealth and riches, not to talk constantly about handouts and aid, but something has to be done, and very soon, to put farming on a much more secure financial footing so that at least young farmers going onstream, while they will not be guaranteed great wealth, will be assured of a reasonable income for their investment and hard work and that some time half way through their lives they are not going to lose everything they have worked for. Hundreds of farmers in the last two years have lost everything they worked for, and unless this Bill is expanded, even though my Party is going to support it, I fear that several hundred more are going to be forced into bankruptcy and several thousand are going to be forced to sell.


Mr. Doug Neil (Moose Jaw):: Mr. Speaker, I, too, would like to join the other Members of the House in congratulating the Hon. Member for Leeds-Grenville (Mrs. Cossitt), who, a short time ago, delivered her maiden speech in this House. I am sure that she will be a credit not only to her constituents but an asset to this House of Commons.
I listened to the Minister of Agriculture (Mr. Whelan) last Thursday, Mr. Speaker, when he opened debate on this Bill.
At Page 20400 of Hansard the Minister said:
Madam Speaker, Bill C-134 is an Act respecting rebate of interest on farm loans made under the Farm Credit Act and is a piece of legislation which is extremely important to the farm community and to all Canadians.
A little later, as reported on the same page, he said:
This measure will help to assure the survival of many Canadian farmers who are presently facing serious financial difficulties.
Like the Hon. Member for Brant (Mr. Blackburn) who spoke before me, I, too, read the report in the November 4, 1982, issue of the Globe and Mail. The effect was rather shocking, Mr. Speaker, and I should like to put a portion of that report on the record. It refers to a conference called by the United Grain Growers in Banff. The conclusion the conference reached was this:
Only good yields and high deliveries of grain will prevent an even steeper drop in income-
The article went on to say:
Farmers' incomes will drop 36 per cent in Saskatchewan and 34 per cent in Manitoba. In Alberta, improved livestock prices will cushion the blow and income will drop 15 per cent.
In the country as a whole, they are predicting that there will be a drop in farm income of 28 per cent over 1981.
Farmers in Canada are facing more than serious financial difficulties, Mr. Speaker; many are facing bankruptcy. The bankruptcy rate in the farming population is up by some 65 per cent. If the trend continues, the result will be a tragic one for the whole farming community. Grain and livestock prices have fallen. If one examines the statistics, one finds that the
total farm debt is between $18 billion and $20 billion. The interest that farmers pay on that debt is in the neighbourhood of $3 billion. We should put that $3 billion in perspective, Mr. Speaker.
If we go back to the estimates we will see that in 1968-69, the total budget for the whole of the Dominion of Canada- that is, the money it took to operate the Government of Canada-was $10.8 billion. This year, the farmers of Canada will spend almost one-third of that amount on interest payments to service their debt.
To put that in even better perspective, if we examine the records of Canada, we will find that the cost of servicing the country's debt in 1968 was $1.5 billion. That was for the entire debt of Canada in 1968. Today, farmers pay double that amount to service their debt. That is a catastrophe created by the Liberal Government opposite, Mr. Speaker.
The Minister of Agriculture-who, incidentally, is not in the House, Mr. Speaker-will undoubtedly recall that he was in Moose Jaw earlier this year to attend a meeting called by a group of livestock producers who found themselves in terrible financial difficulty. The market was low and interest rates high, and they were facing bankruptcy. The Minister arrived late, but I was there for eight hours. I listened to the livestock producers and to many grain producers who spoke at that meeting. They pointed out the disastrous effects the high interest rates were having on their industry. I am sure that farmers in other parts of the country have told the Minister the same thing.
In response, the Minister introduced this Bill, which the Canadian Federation of Agriculture says will only help 500 farmers. There are 320,000 farmers in Canada but this Bill will only help 500 of them. Yet the Minister of Agriculture pats himself on the back for that.
The Minister has allowed the Farm Credit Corporation to go to the American market to borrow $100 million in bonds. It is interesting to read the analysis of this borrowing which was given by the Hon. Member for Cariboo-Chilcotin (Mr. Greenaway) when he spoke in the House on November 4. He used 12 per cent as a basic rate on this $100 million borrowed on the American market. This appears to be a fair rate. He pointed out that the Canadian dollar stands at 82.5 cents compared to the U.S. dollar, which would add another 2 per cent to the interest rate. Of course, because of the fluctuation in the foreign exchange market, the Farm Credit Corporation will have to hedge against changes in the currency market. He estimated this at another 2 per cent. Another 1 per cent must be added for the administrative charges incurred by the Farm Credit Corporation in making the loans. I do not complain about that 1 per cent, because I think the Farm Credit Corporation is to be commended for keeping the cost of servicing loans to the farmers down to 1 per cent.
When we add the 12 per cent, the 2 per cent because of the Canadian dollar being at 82.5 cents, the 2 per cent for hedging and the 1 per cent for administration, then the Farm Credit Corporation will have to charge an effective interest rate of 17
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per cent. It would appear, then that when the farmer borrows this money he will be tied in for ten years to an interest rate of 17 per cent. That is a disgrace, Mr. Speaker.
On March 30, 1982 this House passed Bill C-88 which made changes in the Farm Credit Corporation. We were very pleased about that on this side. In Clause 8 of the Bill, Section 13 of the Farm Credit Act was changed, the new Section 13.(1) reads as follows:
The Corporation may, with the approval of the Minister of Finance, borrow money by any means,-
I emphasize that phrase "by any means", Mr. Speaker.
-including issuing and selling bonds, debentures, notes and other evidences of indebtedness of the Corporation.
We were pleased because it said, "Borrow money by any means". For quite a long time we on this side of the House were making proposals such as the agribond, a scheme to assit farmers who were called upon to pay large capital gains tax. We felt that the change brought in by the Bill back in March would allow the Government to bring in the innovative ideas which we had suggested. As I said, we had made these suggestions for some considerable time.
I read the Minister's speech of last Thursday, the Minister never gives credit where credit is due. As reported on page 20400 of Hansard, he said:
-using the agribond principle that was not originally thought up by those opposite, Mr. Speaker, but was brought up and talked about by people for many years-
If the principle has been around for many years, why has the Minister or the Governent not made use of it? Is it because the Minister of Agriculture (Mr. Whelan) has no clout with his Cabinet colleagues? Can he not sell them on a good idea? Does he prefer to borrow money on the international market? Does he not really give a damn for the failing agricultural economy? Is he perhaps afraid of financial institutions? What kind of a Minister of Agriculture is he?
When 1 spoke in the House in February on the FCC Bill, the one which allowed the Corporation to borrow money by any means, I talked about borrowing money from the Farm Credit Corporation at the then rate of 16.75 per cent. I used the example of farm land selling at $1,000 an acre. It is not uncommon in western Canada to have farm land sell at $1,000 per acre and up. Generally speaking, farmers use a two-year crop rotation. They summer fallow one year and they crop the next; half and half. In other words, a farmer crops half his acreage each year. If we take $1,000 per acre land, with a two-year crop rotation and $6 wheat, the farmer has to produce 50 bushels per acre to pay the interest alone. On top of that, of course, he has to add his seed, municipal taxes, fertilizer, the price of gas and oil, his repairs and depreciation. He just cannot survive.
With the scheme at which the FCC is looking, as approved by the Minister, it will cost the borrower of American money 17 per cent. If we use the same figures of $1,000 an acre and a
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two-year crop rotation, with grain at $4.75 per bushel compared with $6-and the Minister in charge of the Canadian Wheat Board says that farmers this year will get the initial payment of only $4.75 per bushel-with interest at 17 per cent, it will require 71 bushels per acre to pay the interest alone. If one were fortunate enough to buy land at $500 per acre, it would require 36 bushels an acre to pay the interest. Farmers, grain producers and livestock producers just cannot survive. That is what the Government has been doing and what it is doing in borrowing $100 million from the United States. It will put farmers further and further in debt and possibly into bankruptcy.
For many years farmers in western Canada have been concerned about the capital gains tax. It is a substantial tax. Many farmers are afraid to retire because of the enormous amount of tax they would have to pay. People might say that since they are selling their land for substantial amounts they should be able to pay capital gains tax, but generally speaking the only money farmers have on which to retire is the proceeds from the sale of their farms.
In the last two or three elections Members of the Liberal Party in their campaign in western Canada said that they would do something about capital gains tax. They did not say they would eliminate it, but I recall the Liberal candidate in Assiniboia saying at a press conference in Regina that if they were elected they would update valuation day. Hollow promises; nothing was ever done. There was no change in the capital gains tax. In fact, what did they do? In the June budget of about a year ago they eliminated the income averaging annuity, one means by which a retiring farmer was able to alleviate the burden of capital gains tax. This is what the Government thinks of farmers.
When I spoke in the House in February of this year on the amendments to the Farm Credit Corporation Act, I talked about a method of helping farmers with capital gains tax, helping the FCC with cheaper money and helping the borrowers with lower interest rates. It was not the first time I had spoken about it; I had spoken about it in public meetings before. I suggested that we should allow a farmer who was retiring or selling out and was faced with a substantial capital gains tax to invest the capital gains in the FCC and also allow him to invest the proceeds on the sale of his inventory. There is a heavy tax burden when a farmer sells out and has an inventory of grain. There is also a substantial tax burden when he sells his equipment because of capital gains.
1 suggested that we could allow the retiring farmer to invest the money from these three sources in the FCC on the condition that, if he invested the money for a period of five years, the capital gains tax would be waived. The money that he invested would draw interest at 8 per cent, as I suggested in February. It may or may not be taxable because the farmer would be using this as his retirement income in the five-year period. I suggest that the 8 per cent that he receives for that five years should not be taxable. However, if it were to be taxed, it would be to the extent that the 8 per cent exceeded the average bank rate.

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I am sure that if such a program was introduced coupled with the agribond concept, there would be a great deal of money available to the Farm Credit Corporation for lending purposes. If the Farm Credit Corporation could obtain that money at 8 per cent and take into account its administration charges of 1 per cent, it could lend the money to the borrower at 9 per cent instead of the 17 per cent it will have to charge for money that it will have borrowed on the American market. A program such as I have suggested would allow the young farmer to begin farming. It would allow the struggling farmer to survive and would prevent the appreciation in value of farm lands.	*
There is no question that the capital gains tax has effectively increased the value of farm lands because on many occasions farmers who are selling their farms have come into my constituency office inquiring what their capital gains tax will be. I have asked them, since they do have accountants, why they would want to know other than for income tax purposes. They have told me quite frankly that they will add the cost of the capital gains tax on to the sale price of the land. In effect, capital gains tax has caused an appreciation in farm land which makes it difficult for the young farmer, or any farmer, to purchase land.
If the Minister of Agriculture were to adopt a scheme such as I have suggested, he could be very popular. Apparently he is more interested in helping the foreign market and the large financial institutions than he is in helping agriculture. I believe the banks have proven that they are capable of looking after their own affairs. I believe the insurance and investment companies have proven that they can look after themselves. The Minister has indicated that the credit unions were concerned about the agribonds or the scheme which I have suggested to alleviate capital gains. I suggest that the effect of Canada Savings Bonds sales at high interest rates has a greater effect on credit unions than a proposal such as ours.
As said by the ITon. Member for Brant (Mr. Blackburn), this would be a self-help program because the farmers would be helping each other to survive. This is an important point, because if the agricultural sector does not prosper, the other sectors of our economy cannot prosper.
In closing, I urge the Minister to consider seriously our proposals. If he believes in the agricultural industry he will attempt to sell those suggestions to the cabinet.


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, I would first like to join other Hon. Members in congratulating the Hon. Member for Leeds-Grenville (Mrs. Cossitt) on making her first speech in the House. I know that we do not often speak to many Members in this institution when we rise, but there is something about the institution, as there should be, which makes that first speech a major undertaking. The Hon. Member did a masterful job and I look forward to hearing more speeches of that quality from her in this institution.
The Hon. Member for Moose Jaw (Mr. Neil) spoke eloquently about some proposals that should certainly be considered by the Minister of Agriculture (Mr. Whelan). We have a more depressing outlook for agriculture today than we have
had for many decades. I would like to discuss world trade and what it means to the income of the agricultural producers. Before doing so, I would also point out that many farmers in Canada today are looking at the future of agriculture with some reservation.
I have represented the riding of Wetaskiwin for ten years. In that time I cannot remember any farmer coming to me and wondering about their future. They have always indicated that while their year was not as productive as anticipated, the future was bright. However, they are now coming to me to ask whether they should continue to incur further debts to stay in agriculture or if they ought to sell. However, the prospect of selling their farm does not look very bright either because the price of land has decreased in value. The state of our economy has affected the price of land all across Canada. When farmers look to auction sales for removal of their equipment, they are finding that that picture does not look very bright either because the price of tractors, combines and cultivation equipment has also decreased greatly because farmers cannot afford to buy that inventory. If you have money at this time, particularly in western Canada, there are many bargains to be found at auction sales.
If the banks call their loans and farmers are forced to sell their land or equipment, they are then faced with capital gains tax. They cannot even take the revenue from that land and equipment to pay off their debts because they have to pay the Government a capital gains tax.
It is no wonder that we have heard many eloquent speeches during the last few days on this subject of credit. Credit is a very important instrument to the agricultural industry. We cannot exist today without it. When my father took the farm over from my grandfather, he lost his crops to nature three years in a row. He was able to survive, however, because the debts that he had incurred were not large. At that time fertilizer and chemical sprays were not necessary because the land was sufficiently productive. I know a very few farms today in my constituency that can survive one crop loss. Farmers today obtain loans simply to sow their crops. Farmers do not have enough money in their savings just to put their crops in the ground, and that is true of the farm I am running as well. Until about five years ago we had sufficient funds to put our crops in each year from what we were able to earn from our sales. However, this year, last year and the year before that, we had to borrow money to put the crop in. This year, myself and many other farmers in my constituency are wondering if we need to finance the operation alone, because we are not receiving enough return from revenue to pay that debt off. The future does not look too bright.
The Bill will help about 500 farmers. The budget offered a $50 million program involving special financial farm assistance loans, which helped 382 farmers. Our experts are telling us that 20,000 farmers in this country are in distress today. These
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two Bills are helping 880 of those. That is good, but what about the others?
Day after day we are told of the increasing numbers of bankruptcies. There has been a 65 per cent increase this year over last year. Unless we get the incomes of the farmers up or their costs down, it is sad to say but we will be facing more bankruptcies.
The current level of interest rates is one of the largest factors, but another is the cost of production which is also undergoing a dramatic increase. As we know, people who produce machinery, fertilizer and so forth must pay higher labour costs. They must pay higher input costs for the production of that equipment which they pass on to the farmer and he, in turn, must pay more. Costs of production are rising year after year. This year, we on the Prairies found that the price of grain decreased. The price of a bushel of barley delivered to the elevator is 31 cents less than last year. The price of wheat, as was just enunciated by the Hon. Member for Moose Jaw, has gone from $6 a bushel down to $4.75 a bushel. We are asking that our farmers be able to continue to operate as their incomes drop and their costs rise. I do not know how we expect them to go on for very long. Statistics show that they cannot go on for very long.
We have a desperate problem involving one industry in this nation which must be addressed. Excellent ideas have been put forward as to how we can address the problem. This Bill will help only a few. Our party is supporting it, but we must have policies to address the longer term problem. How can we do that? We must do more than bring Bills to the House, as the Minister constantly does. We debated one in February this year, we are debating one now and certain Bills have been brought forward from the budget, all dealing with credit and how we can give farmers more loans or rebates of interest on loans. There have been no initiatives which would assist farmers to bring down their costs or, conversely, to raise the price of their commodities. There are ways of doing that, even in these hard times.
I listened to the Hon. Member for Qu'Appelle-Moose Mountain (Mr. Hamilton) refer to the area of energy. I join with him because I also feel there is an ability to lower costs, in the energy field. One of the most important ways, one which we could adopt tomorrow, would be to lower the tax taken on gasoline and diesel fuel by the federal Government, some 40 cents per gallon on diesel and 60 cents a gallon on gasoline. The Province of Alberta has led the way by removing its provincial sales tax on gasoline. We applaud that action because it has assisted farmers in my Province a great deal. We are big users of energy. Farmers are large users of energy. When tax is removed, it has an immediate beneficial effect on their bank account and on their ability to pay interest rates and input costs. The Government should follow that example. The removal of the tax would have immediate effects. It should not only be removed from a gallon or a litre of diesel fuel or gasoline, but it should also be extended, until we rise out of this difficult period of time, to those products derived
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from natural gas and oil, such as sprays and fertilizers, which constitute input costs.
I have some statistics. For every dollar per barrel increase in the Canadian price of oil, the price of nitrogen fertilizer increases by $5.88 per tonne. Hydrous ammonia increased by $10.54 per tonne and ammonium phosphate increased by $4.75 a tonne. All these are essential in the production of crops today. The price of pesticides and weed sprays per gallon is 87 cents. In the year to which I have been referring, the price of commodities has dropped, but the price of oil has risen by $2.75 a barrel and the federal take in tax on that oil is some 40 cents to 60 cents. Therefore, there would be some immediate effect in cutting farmers' costs if we lowered the federal tax on gasoline and diesel fuel and lowered input costs, such as those I have mentioned.
The other way would be to promote the use of renewable energy. The Government could do that if it put its mind to it. I will not repeat the speech of the Hon. Member for Qu'Appelle-Moose Mountain, but he referred to the use of alcohol. Farms have the capacity to produce alcohol from stills in a very efficient manner and the Government ought to be sending out information on how farmers can build such stills which would make it very simple to produce one's own fuel.
People in Nova Scotia, I believe, have invented an excellent straw-burning grain dryer which we have read about in our papers and magazines. Why should we not buy the patent and send it out to farmers across the nation so that they can cut their costs of drying grain by building or having this type of furnace built? These are the kind of ideas the federal Government could use. In my brother's house we have installed the first heat pump in Canada which uses the ground as its source of heat. It has been working excellently in the last two months, heating the house from the heat that is down in the ground, at a cost much less than natural gas or diesel fuel. We also have wind energy and biomass. Any livestock producer has the capacity to produce fuel from his livestock's own waste material. All these are available, but we are not getting the information out to the farmers who are hungry for it.
Another way of increasing the price of commodities is through the Canadian Wheat Board. Most of us were astonished when we heard that this crop year the Government and the Canadian Wheat Board would allow the initial price to the farmers to drop, given what I have just said about the rise in input costs. It is within the realm of the Canadian Wheat Board to keep the initial price at the level it was last year. It has the ability to borrow money from the federal Government to foot the bill. To my way of thinking, it would be much better for us to put public funds through that mechanism to keep the price at the level it should be, rather than to bring it in through the back door in the way this Bill is attempting, so that all farmers could have the benefit. The price should be kept the same. We should not allow it to drop and cause the loss of decades of work as farmers go bankrupt. No one can understand that unless he has experienced it or watches as his constituents come in and bare their souls as they look toward

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losing their farms this week, next week or a month from now, with no chance to stop it from happening.
1 see some Hon. Members opposite, some Hon. Members in the NDP and some Hon. Members in the Conservative Party. In the last four years they have been talking with their American counterparts because farmers in the United States are having the same difficulties as farmers in Canada in so far as meeting their balance of payments is concerned. We asked them why we compete so well with one another that we actually sell our grain below the cost of production. What a ridiculous situation. The United States is the only country with a major surplus of food in the world today. That is the principal reason why the price of grain is as low as it is. Another reason is that many countries in the world simply cannot afford to pay for food. However, there are many other countries to whom we deliver grain that can afford to pay and should be paying more. Both U.S. and Canadian representatives agree that we should not be selling grain below the cost of production since we sell 75 per cent of the surplus grain in the world. We also agree that our costs of production are very similar. It would be simple to work out a formula.
Canadian Members of Parliament together with Senators and Congressmen in the United States can and must take a hold of this problem because our Ministers and officials are not. We must work out solutions and the formulae so that we will not compete with one another at a cost below that of production. Once world prices rise above the cost production, there is no problem; we should compete and we should compete well with one another. However, as it is now we are simply hurting our own farmers by doing what we are.
The last report was delivered to the Minister eight or nine months ago. It was well received by him. He said it contained good ideas. Departmental officials have been meeting for a number of years. Perhaps they are caught up in simple language in some kind of international agreement, but while they agree on the principle, they have been unable to put anything together that could be brought forward to our respective institutions.
A few months ago farmers in western Canada met with farmers from the United States. They agreed that the principle was sound and asked why it could not proceed. Yet nothing has yet been put together. I think it is time now for that to be done. We will be seeking from the Minister of Transport (Mr. Pepin) and the Minister in charge of the Canadian Wheat Board a meeting with Senators and Congressmen so they can iron out these problems. We should put as much pressure as we can on the Minister here and the Secretary in the United States to get together and agree not to sell grain and oilseeds below the cost of production.
Countries like Japan, the Soviet Union, those in the European Community, China and many of the Arab countries who buy grain from us can afford to pay the cost of production, and they should be paying it. In fact, some of these countries add on so many dollars per bushel so as not to compete with their
own farmers. In some countries the amount is as high as $6 a bushel. This is added on in the form of a tariff. This is money which our farmers could desperately use at the moment. If the income were ever to get so large that farmers were making an extraordinary profit it could perhaps be put into an account to assist those countries who cannot afford to pay and whose people are starving. In this way we could get their cost down. This is an excellent program. It has been talked about and legislators in both countries agree that it is time for action.
Let me point out that there are other ways of lowering costs. Canada has one of the best agricultural research capacities in the world. Excellent material is being produced month after month. Surely within that material there are ways that farmers can cut their costs. We should ask our very capable scientists to put these ways together. This material should be distributed to our farmers so they can use whatever part of it is pertinent. We should not do what was done in February when the Department issued a report. In it we found such things as "How can you get by in distressed times?" Some of the suggestions were absolutely unbelievable. They could only emanate from a Department. Other suggestions included: "Sell off some unproductive land". Most farmers are using every acre they have in the most productive way possible. How can they choose which corner to sell off? We also find these words: "You can always work off the farm". There are some farmers who have the time to do that. Most of them are working for every hour possible that they have off the farm. But that does not work all that well because the Government only allows $2,500 of income to be earned off the farm before it is taxed at the rate of 40 per cent or 50 per cent. Again, that solution is not a total solution, but it was not a bad suggestion.
Another suggestion was to raise livestock-hogs or cattle- in unused buildings. That was done years ago when provincial Governments encouraged farmers to get into the livestock business. They were even given loans. Most farmers were in bankruptcy the following year because they got into another area of production that did not raise the kinds of funds necessary to meet expenses, particularly when farmers were taking up loans to buy breeding stock and to fix up old buildings. Those kinds of suggestions are not adequate. We have to ask our experts, which we have in abundance, to search their records and come up with suggestions. The Department of Agriculture should then get the suggestions out to farmers so they can decide whether or not they fit into their operations.
Then there is the suggestion of improving our lending institutions and capabilities. The Hon. Member for Moose Jaw talked about that. His was an excellent suggestion on capital gains. I will not repeat it because he did such a good job of explanation.
What about the Small Business Development Bond? That concept was brought forward by us when we were in Government. This program is now being snowed under with red tape and a bureaucratic maze which results in its being of hardly any use to the farmer in need. In most cases the bank will not accept the individual as a credit risk. If the individual is
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accepted, he has to go through so many procedures that he is almost bankrupt before he can get the bond. Such questions as: "Can you sell off any land? Do you have any relatives from whom you can borrow money? Is there some other way by which you can rearrange your finances?" are asked. As my colleague says, they should buy a Loto Canada ticket. These questions are asked before one is accepted as an applicant for a Small Business Development Bond.
However, that is a concept on which you can build. It is an excellent concept. It has helped some farmers in Canada. We should eliminate many of the roadblocks that are put in the way of the Small Business Development Bond.
We have the agribond concept, about which much has been spoken in this debate. We have heard of examples in other countries. Members have talked particularly about those that are offered in the United States. We can get ideas from the Federal Land Bank Association, the Production Credit Association, the Farmers Home Administration and the Commodity Credit Association. All of these ideas could fit into the Canadian realm of agriculture and would be better than some of the situations that farmers face now.
Finally, there is transportation and shipping. We are making moves in that area. We are making sales. The Minister of Agriculture could be helping this country. We have had the Canagrex Bill before us for quite some time. The Minister is too bull-headed to recognize that if he removed the sections that are distasteful to farmers and left in the sections which promote and facilitate exports, that Bill could be passed and we could be using it to help farmers get more sales in livestock, grains and horticultural products. But no, he persists. As a result, the Bill is held up.
There is a need to facilitate the sale of agricultural commodities throughout the world. We have embassies and institutions around the world, but they have only limited expertise in agriculture. We should send people there who know how to sell our agricultural commodities. This would assist our farmers.
We have had, put many statistics on the record today and last Thursday that I am sure the farmers do not like to hear. I am not going to repeat very many of them. However, some of the statistics are astonishing to me and I am sure to people across this country, such as the amount of debt. In the United States, and the situation is not much different in Canada, net farm income in 1982 is estimated at $18 billion. Total farm debt is approximately $200 billion. At 10 per cent interest, that is $20 billion being paid in interest. That is right off the net farm income. That statistic is readily available.
I tried to find the comparable statistics for Canada. It is surprising how close they are. Total Canadian farm debt is $18 billion. Net farm income is $4.9 billion and the gross is $18 billion. One can see that the debt is equal to the amount of money we are capable of generating through agricultural production. How long can that be allowed to continue? As has been stated, we must get the prices of our commodities up to a reasonable level or the costs down.
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The Farm Credit Corporation has been a major lending institution in Canada for the farmers. At one time it loaned about 70 per cent of the long-term capital in Canada. Any farmer will tell you it is not the long-term debt that will kill him but the short-term debt. In the last few years, many farmers have been incurring a lot of short-term debt in order to replace machinery. They must invest between $50,00 and $100,000 for a new combine and tractor. That is generally short-term debt. At today's interest rates, that debt is too cumbersome for them to handle. We need institutions that will provide farmers with the opportunity to turn their short-term debt into long-term debt at lower interest rates.
Today Farm Credit Corporation loans account for far less than the 70 per cent they once did. These are now down to 25 per cent. We should be looking to the Farm Credit Corporation for other ways to quickly provide long-term debt to farmers at lower interest rates to help them through these desperate times. That is not being done with this Bill. It has not been done through any of the bills which came before us in the last couple of years. We are not assisting in solving very difficult problem.
There is another problem being faced by the Farm Credit Corporation. The amount of capital available and the demand for capital is so great that not all the loans for which the farmers are asking can be made. Therefore, loans are being made to fewer and fewer farmers. In fact, during the first two and a half months of this year they distributed money to 16 per cent fewer farmers than last year, with a larger budget. That is one of the problems this institution is facing.
While this Bill is providing extra money, half of that money is really coming from a reorganization within the Department. As a result, fewer farmers are being helped than was anticipated. It is a bit of a deception and it is not helping the very desperate needs of farmers.
Farmers are facing input costs of unbelievable magnitude. Interest expenses are up by 39 per cent this year over last year, machinery repairs are up by 24 per cent and feed is up by 11 per cent. There is not one area in agriculture not facing these difficulties.
The subject of farm credit has been well covered in the last two days of debate on this Bill. We can only hope that some of the suggestions will be considered. We have asked why the farm fuel tax cannot be removed. We have asked about the agribond and the capital gains concept. Many other suggestions have been made. We want to hear the answers. We have also covered statistics which farmers do not like to hear. We have no other choice than to support this Bill as it has been brought forward. I am glad we have had this debate; it is long overdue. We ought to have many more like it. Perhaps we can get some positive answers, with some changes to the legislation so that we can help the farmers of this country.


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


Some Hon. Members:: Question.

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


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Corbin):: Accordingly, the Bill stands referred to the Standing Committee on Agriculture.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Agriculture.

Hon. William Rompkey (Minister of State (Small Businesses and Tourism)) moved: that Bill C-136, Small Business Investment Grants Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, I would like to take a few moments to inform the House about the Small Business Investment Grants Program, to explain its provisions and the way it is being applied.
I want to begin by saying that the Government of Canada is very much aware of the concerns of the small business community and has sought to promote good relations with this very important sector of Canadian society, and to develop practical solutions to the problems that small businessmen face. That is why we formed a task force to look into the financing of small business in Canada and published the report of that task force in May. The report, which does not contain policy recommendations as such, will nevertheless serve as input for discussion of future options for Government action.
We have also recently formed the Small Business Advisory Committee, which is made up of members of the small business community, lending institutions and academics. This committee will advise the Government on matters concerning small business and suggest policy options. One of the items they will be tackling is the report of the small business financial review.
I also want to inform Members of the House of the fact that in our discussions with the small business community, we have met with a very enthusiastic response to the Government's six and five per cent restraint guidelines. As Members are well aware, one of the problems facing Canada's many small businesses has been high interest rates, which have reduced the entrepreneur's ability to finance capital investment and research and development. Thus the small business community, which the federal Government recognizes is extremely important to the over-all Canadian economy, has been hampered in its ability to generate economic activity and create jobs in this crucial time of worldwide economic recession.
The federal Government has listened to the representations of the small business community, and has recognized this problem. That is why in the June 28 budget of the former Minister of Finance a program was announced which was designed specifically to alleviate the financing problems of
small businesses in today's economy. That program is the Small Business Investments Grants Program. Under the provisions of the program an interest subsidy of up to four percentage points per year is granted to eligible small business borrowers to finance acquisition of new depreciable assets, or to finance research and development. An amount of $400 million was set aside in that budget to be devoted to this program. The interest subsidy will be paid for two years from the date of the loan.
One of the attractive features of the Small Business Investment Grants Program is its simplicity. It has been made available through the lending institutions. In other words, application for a grant is made to the lending institution as part of negotiating a loan in the regular manner. It is the lending institution which processes the application with the Government.
Loans qualifying under the program can be obtained from chartered banks, trust companies, insurance companies, credit unions, Caisses Populaires, the Federal Business Development Bank, the Farm Credit Corporation, any lending agency of the Government of Canada or of a Canadian Province or Territory, as well as any investment company as defined under the Investment Companies Act. This ensures that ready access to the benefits of the program is available to small business anywhere in Canada.
As far as the eligibility of the borrower is concerned, I want to explain that for the purposes of this program small businesses that qualify include corporations that are eligible for the low corporate tax rate for small business, partnerships whose members are all individuals, and proprietorships-and here I want to emphasize that this includes farmers and fishermen. Businesses engaged in a profession, however, do not qualify.
Loans from $10,000 to $500,000 can be subsidized by a small business investment grant. A small business may obtain more than one loan under the program, provided the total borrowings do not exceed the $500,000 upper limit. The interest rate subsidy under the program is up to four percentage points: with the effective interest floor being i2 per cent, so that the 4 per cent grant will be reduced when the grant and any other assistance available would lower the interest rate to less than 12 per cent.
The program was designed as a temporary measure to assist small businesses during this difficult economic period. It therefore applies to loans made between June 29, 1982 and March 31, 1983. And here I should emphasize one point that may possibly have been misunderstood by the business community. Since for obvious reasons it took sometime after the June 28 announcement before the necessary forms and information could be distributed to all the lending institutions, some business people did not become aware of the program until some weeks after June 29. They may have assumed that only future loans would qualify under the program. The fact is,
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however, that any loan on or after June 29 qualifies, if the criteria I have mentioned are otherwise met. In other words, a business person who arranged a loan in, say, July this year, and only afterwards learned of the Small Business Investment Grants Program, may still apply to his banker for the interest rate subsidy.
In order to ensure effective delivery of this program through the lending institutions, officials have worked very closely with associations such as the Canadian Bankers' Association. I must say that I am grateful to the financial community for the co-operation we have received. Hundreds of thousands of brochures on the program have been taken up by lenders for distribution to borrowers through their local branches, and several major lenders have been promoting the program quite enthusiastically.
In addition, I would like to thank the Hon. Members on both sides of the House for their efforts to promote the program to their constituents. More than 16,000 forms have been distributed so far. Applications are coming in at a rate of 30 or 40 per day. There is every reason to expect that with implementation of our own advertising campaign, along with continuing promotion of the program by the lending institutions, the rate of applications will increase over the coming weeks.
1 will conclude, Mr. Speaker, by repeating that the Small Business Investment Grants Program is a temporary measure, designed to meet a specific need at a specific time. We do not pretend that in itself it meets all the needs of the small business community, and we are continuing to examine ways and means to assist small businesses which constitute such an important part of the Canadian economic scene.
Mir. Chris Speyer (Cambridge): Mr. Speaker, before commencing my remarks, may I take this opportunity to formally convey my best wishes to the Minister on his new portfolio, and to tell him that in anything he does to further the small business community, certainly this Party and this particular critic, will assist.
With respect to the legislation that is before the House, may I say, as I did on June 30, two days after the former Minister of Finance brought down his budget, that this Party, and myself, as the critic for small business, will support anything which we believe is productive for the small business community, and we include this piece of legislation. There will be no obstruction whatsoever. This matter should go through. Unfortunately, though, I believe it is too little, too late, and I intend to expand on that in a few moments.
Let me say at the outset, that statistics in normal prosperous times for the small business person are really abominable. One out of every two businesses which have been in business two years fail. Four out of five business in business for five years fail. That is in normal times and with normal risks. Persons far more intelligent than myself who have done studies say the reason is under-capitalization, mismanagement, or a combination of both. But, in the last two years with interest rates, the magnitude of which I can only call sometimes extortionary, we
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have seen economic carnage among the small business community that words cannot properly emphasize.
Just to give some dimension to the problem, in the first nine months of this year, bankruptcies were up in the business community-and I am talking about businesses as opposed to personal bankruptcies-by 43 per cent over last year, and 66 per cent over two years ago. The frightening aspect of that, Mr. Speaker, is that the number of bankruptcies does not provide the true statistics.
What we are trying to analyze is how many people are going broke. We know since the mid-60s that the vehicle used by people who go broke is no longer bankruptcy. People declare bankruptcy in order to avoid always having to pay a creditor. In other words, they want to extinguish their debt. Bankruptcy legislation is good legislation because it is controlled through the courts of this country and we have the statistics. What people do not recognize, though, is that the normal person goes broke by way of receivership. What happens is that the bank, when it calls its note, moves in on the business under its floating charge debenture. And we do not have any statistics on that except that the insolvency Association of Canada says there are ten businesses that go insolvent for every one that goes bankrupt.
By using our eyes, our ears and all our senses we know the plight of small business in this country. This results not only because of mismanagement or undercapitalization, but because of the harsh reality of interest rates which, when I was going to law school, would have been unconscionable transactions.
These comments come from a riding in southwestern Ontario, the heartland of Canadian manufacturing, or at least we thought it was such. In my community we have gone to an unemployment level of over 20 per cent. A year ago it was approximately 7 per cent. There was one sure thing about Cambridge; people knew that you could always get a job in Cambridge as there were lots of textile mills and shoe factories. But the harsh reality of the last year, the fact that we have 22 per cent unemployment, has caused the citizens of my community to literally go through a nervous breakdown. It is not like ridings in Cape Breton which traditionally have had high unemployment. It is not like ridings in the province from which the Minister comes, which have had to endure unfortunately high unemployment over a period of time. This is something new and it is happening in the heartland of southwestern Ontario. You can believe me, Mr. Speaker, that the emotions in my community over the state of the economy are very difficult to exaggerate by words.
I would like to talk about the personal effect on small business people because I just received by today's mail a letter from a small-businessman who was making running shoes. He was holding back certain Canada Pension and Unemployment Insurance moneys in connection with his workers, and the Department of National Revenue effectively closed him down. The amount of his indebtedness for payroll deductions was

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$13,270, and he wanted to make a deal. He could not. Third party notices of garnishee were distributed. In order to do the man justice, I am going to read a letter he sent to the department. He said this:
Our company has been going through some difficult times and it has not been our intention to withhold the payments, but we have not been able to generate enough funds to do more than meet the payroll monies due to our employees. We have survived on a month to month basis hoping that the footwear quotas would be reintroduced. We have fought "tooth and nail" to survive the depression and now that the quotas have been reintroduced the signs are positive as to our recovery. However, it appears the government, through its Kitchener collection office, has determined that their pound of flesh should come before our recovery and before the jobs of our employees.
When the auditor left our business he informed me that we would be contacted by the persons incharged of collections in Kitchener so that an arrangement could be made to try to settle the outstanding amounts. We did not hear from the persons in Kitchener, but received in the mail demands on Third Parties sent to all our customers. I immediately phoned a Mr. Schnurr at Collections in Kitchener and asked him "Why he had not contacted us first?" and informed him that his actions would likely put us out of business.
The bottom line, Mr. Speaker, is that as a result, this company has just recently had to lay off 20 people because of the $13,000. They will be going on Unemployment Insurance. What this small-businessman asked for was time to settle the account. That time was not granted and we have another company that has gone under.
One more very vivid experience, came to my attention within the last few days when I was back in Cambridge. The bank loan of a small business had been called. The person involved is a very solid citizen, one who tried to endure, but could not because of the high interest rates which have affected all western economies, not just Canada's. I certainly acknowledge that. The bank in question called the guarantee of this man's mother and father. I will not mention his name because 1 know he would not want me to cause them embarrassment. His parents are 65 years of age and all they have is a house. His father has a very small pension and a veteran's allowance. Those people are going to have their house taken away.
I know all Members from all sides of the House are hearing similar stories. One almost breaks into tears when the reality of these situations comes across the desk; when you see the person who has to bear this kind of a burden.
High interest rates have really hurt the small-businessman. Unfortunately, the budget policies of the predecessor to the current Minister of Finance (Mr. Lalonde) caused untold hardships in our country. I believe there is a crisis of faith and of trust in Government. I say that if this Government were to introduce the finest economic policies it could muster, I am not sure the business community would trust it.
When are the rules going to be changed? I hark back to the November budget. I give some credit to the current Minister of Finance because in his recent economic statement I think he clearly undid some of the harm his predecessor did. I think he should be given credit for that. But there are some matters which affect the small business community that have not been changed. I invoke the assistance of the Minister sitting in his
place in the House tonight because the most important thing to assist the small business community is the capital cost allowance. I will refer to Liberal policy in 1972.
In May of 1972 the Hon. John Turner, the then Minister of Finance, brought down a budget. The issue before the country at that time was jobs. There are 33 forms of depreciable property, ranging all the way from 5 per cent to 100 per cent. Because one out of five people are employed in the manufacturing sector, it was determined at that time, that in order to create jobs a speedy write-off would be given under Class 28 of depreciable property. That would mean, for example, that if a businessman, when he had money in his coffers, wanted to purchase some equipment he could write it off in two years. That was an incentive for him to do so.
What has happened so far? Well, the budget of November, 1981 has not been amended. In the first year the businessman will only get one half the capital cost allowance. Over the next three years they are going to lose $3 billion. It will come from the private sector to the public sector. I asked the Minister of Finance a question on June 30, 1982, after the measures which are formally being introduced into legislation this evening were announced. My question to the Minister of Finance was:
We on this side of the House welcome any measure that will assist small businesses in terms of development. But I point out to the Minister that on November 12 last year he brought in a provision with respect to capital cost allowance which has done more to prevent retooling and has dried up cash flow.
I asked the Minister of Finance whether or not he would adjust that. He said at that time:
If accepted, that would be a further large addition to the deficit which Hon. Members opposite have been complaining about-
I say to the Minister that if the private sector really is the engine of the economy, these traditional write-offs, these things which we have never ever thought of as loopholes, have to be given back.
Let us talk about the measure which the Minister has brought in. Where is the target? The Canadian Federation of Independent Business did a survey just recently and asked its more than 60,000 members this question. What do you anticipate doing with respect to your business? Are you going to lay people off as the result of the recession? Do you anticipate that you are going to stand pat and lay nobody off, or on the other hand are you going to expand? Seven per cent of the people who answered that survey said, "We are going to expand; we are going to create jobs; we are going to try". The target of this $400 million is the 7 per cent of the small business population which answered this survey in that way. The fact is that in this very deep recession, when people are squirreling their money away and are afraid to invest it, no one is expanding. There is no market demand; people are not making purchases.
When we ask when this $400 million offer will expire, the Minister tells us, in his comments, that it will expire by March 31 next year. The difficulty is that what that means is that we will be going through this recession until then, and when
November 8, 1982

recovery comes, as we hope it will, these moneys will not be available.
The people I am talking about in the small business community do not believe that the $400 million is going to be delivered for the purpose of expansion. I look forward to asking the Minister in Committee if everyone who meets the qualifications is going to be given the money. Will any discretion be exercised, or will anyone who meets the qualifications be given that money? I understand that certain offices within the portfolio of Industry, Trade and Commerce want a slice of that $400 million, so I should like to be assured that everyone who applies and who is qualified will receive the money.
I agree with the Minister that the small business community, which invests in the economy, should be given the money rather than it being given to consumers at a preferred rate. The 4 per cent rate is agreeable to me, but I want to make sure that the small business community gets the money.
There are a number of questions I should like to pose to the Minister with respect to this matter, but I gave him my word, Mr. Speaker, that we would not hold up the Bill. I shall comment again later in the proceedings, but I want this Bill to pass second reading this evening, so I restrict my comments to the foregoing.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I have to assume that the Bill before us is the Government's response to the two years and $2 million spent on the small business financing review. From this long and expensive study, undertaken at a time when thousands small-businessmen have been going bankrupt, we get a three page Bill, at an estimated cost of $700,000 per page. The Minister proposes to spend less money to help small business than his Government gives almost every day of the week to large corporations in the country.
Small business is suffering a major illness akin to pneumonia, which today is treated with antibiotics. The Minister proposes to treat the major illness of small business with a mustard plaster, a kind of treatment which was used 50 years ago.
1 should like to look at what is happening to small business today. Since the fall of 1979, when interest rates began to rise, the increase in business bankruptcies has been phenomenal. They increased by 16.8 per cent in 1980, 22 per cent in 1981 and to date, in 1982, they have increased 40 per cent over last year. Businesses have been failing at the rate of about 200 each week. That is only the tip of the iceberg, Mr. Speaker. Some estimates show that as many as three to ten times as many businesses go into receivership, are liquidated by secured creditors or close their doors, as go into bankruptcy. The August figures for bankrupt businesses were 66 per cent higher than for August last year, with debtor liabilities reaching $133 million. The yearly total for debtor liabilities in 1982 is almost $1.5 billion, or more than all last year.
There are approximately 900,000 small business enterprises in Canada. This sector is vital to the Canadian economy because it employs four out of every ten Canadians and
Small Business Investment Grants Act
contributes 30 per cent of the total business gross national product. It is almost 100 per cent Canadian owned and pays a higher effective rate of tax than does large business; it pays a 33 per cent tax rate compared to 29 per cent for large business.
When the Government brought forward this Mickey Mouse proposal, this supposed solution to the problems of the small-businessman, it almost completely ignored the real facts of life. The Canadian Federation of Independent Business conducted a survey at the beginning of this year which showed that close to one-third of small businesses in the country would be forced to close down, sell part of their enterprise or be forced into bankruptcy if interest rates did not drop dramatically. At the time of that survey, interest rates had dropped about six points from the peak of August 1981. As the President of the CFIB, John Bulloch, pointed out, "It is precious little comfort to know that you are dying a little slower than you did last month". Yet this is how the Minister proposes to deal with this problem.
In the survey, the CFIB found, among other things, that 56 per cent of firms had cancelled expansion plans, due to high interest rates; 77 per cent saw profits shrink; over 10 per cent were already in the red, and 32 per cent had laid off workers in the last year. That was before the massive job losses we have seen this year.
Why is small business in such trouble? It is mainly due to two things, Mr. Speaker. First of all, it is because of the tremendous rate of unemployment; 12.7 per cent of the work force of this country, or almost 1,400,000 people, are unemployed. That is not counting the 250,000 to 400,000 people who have given up looking for work.
People who are unemployed have to cut back on the purchases they might have made if working. They do not take trips, which means the travel agent is in trouble; they cut back on buying clothes, which means the clothing store is in trouble; they buy cheaper grades of meat, which means the people in the food industry are in trouble, and I could go on and on, Mr. Speaker.
Many Canadians who have never been unemployed are cutting back because they do not know how long their present jobs will last. There is not a city in this country in which there are not some workers, ages 45 and under who have never been unemployed, but who are now unemployed, who see their friends and co-workers with less seniority than they, becoming unemployed. Even these people who are still working are holding on to their money because they are worried about what might happen to them next week or next month.
The 1,400,000 unemployed people drawing unemployment insurance benefits have enough to keep them alive, but substantially less than they were earning when they worked. Tens of thousands of the people drawing unemployment insurance benefits will be on welfare before they get back to work. It has been estimated that there are 800,000 people in this country receiving welfare, and that the number is increasing by about 10,000 each month. We are likely to have 14 per cent unemployment this winter, with the rate at which we are going and

November 8, 1982
Small Business Investment Grants Act
with the failure of the Government to do anything meaningful to deal with the problem. It is not surprising that small businesses are in trouble. Their former customers are simply not in the position to purchase goods and services as they did when they were working. That is the first reason small business is in trouble.
The second reason is the insane high interest rate policy which the Government has been following on the bad advice, as we on this side of the House have pointed out many times, of the Governor of the Bank of Canada. As a representative of the Canadian Federation of Independent Business pointed out to the House of Commons Finance Committee when it looked into the question of bank profits, nothing is more inhibiting to the health of small business or more destructive to the continued viability and existence of small business than the high interest rate policies with which we have lived for the last three or four years.
These policies are continuing. If we have interest rates at present which are lower than they were a few years ago, it is not because of conscious decisions by the Government or by the Governor of the Bank of Canada. Interest rates have come down because American interest rates have come down. They have come down there not because President Reagan realizes the importance of lower interest rates, but because the American economy is dead. No one wants to borrow money these days, even when interest rates are lower as they are in the United States.
This Bill proves what we already know, that Canadian small business is being strangled by the irresponsibility of the Government's high interest rate policies. As I have pointed out, the rate of bankruptcy has increased dramatically in the last couple of years. Bankruptcies are only a small illustration of what is happening in the country. Small business will not be bailed out by the federal Government, and this Bill demonstrates that small business is not very frequently aided at times of economic crisis, such as the current one.
The Government is cynical in offering this program in its present form to small business because it is limited in its reach and funding. At the same time as we debate this Bill, which will provide possibly $400 million to small business, the Government is imposing a $1.6 billion unemployment insurance premium increase on Canadians. This means that the very people who should be helping small business by increasing their purchases are having $1.6 billion taken out of their pockets.
The Bill will only aid small business after provincial programs with the same objectives have been utilized. Several Canadian provinces already have interest reduction grants; Alberta, Saskatchewan and Manitoba have such programs. The Federal Government's exposure is therefore not very great, with all its hyperbole about a major boost for small-businessmen.
Also a representative of the Canadian Federation of Independent Business stated to the review team, which as I pointed out earlier spent two years and $2 million looking into
the problems of small business, that "about 20 per cent of the small business community out there is solvent and capable of expanding." Where does that leave the other 80 per cent who are looking for working capital and refinancing? Obviously the chartered banks have neither the expertise to deal with small businesses financing problems nor the desire. A most important point raised by the small business review team concerned the discrimination small businesses experience when dealing with chartered banks and major financial institutions.
These banking institutions are tied to the major corporations. Major corporations have had no difficulty in obtaining assistance from the banks, yet small business has had real trouble in obtaining financial assistance, sound advice and understanding from them. Indeed, in recent months cases were brought to our attention by organizations such as the Canadian Federation of Independent Business where banks have been increasing the collateral required from small businesses for loans to 300, 400 or 500 per cent of the amount of the loan they were prepared to lend. We know the banks have been more than ready to lend hundreds of millions of dollars to the large corporations of the country. Much of that money was used in what turned out to be a very irresponsible manner. It was used to purchase and take over other companies, which added nothing to employment.
The Financial Times of October 18 reported that the amount of money owing to the big five banks in the country, most of which was borrowed for takeovers, amounted to $8.4 billion. This amount was in what were called non-productive loans, loans on which the companies were not meeting their payments on principal, the money which they borrowed, but in most cases, if not all, were not even meeting the interest payments. This is not the kind of treatment which banks are giving small business. Small businesses are being forced into bankruptcy, into receivership, to sell out or to close up.
We all know about the $1 billion loan payments which Dome Petroleum could not meet and the assistance which it received from the banks and the Government of Canada. Chrysler Canada received $200 million in federal loan guarantees from the Federal Government and $33 million from the Province of Ontario. Massey-Ferguson received $125 million in federal loan guarantees and $75 million from Ontario. These loans were made under the condition that these companies would continue to employ Canadian workers. These conditions have not been met; workers were laid off. Consolidated Computer Inc. received $125 million from the Federal Government before the Federal Government gave up and sold the firm; de Havilland Aircraft received $580 million; and Canadair received $1.3 billion. I could go on, but these are a few examples of the type of thing which has gone on continuously in the country recently. It is not surprising that these companies receive assistance and support from the Canadian Government and the banks, because the heads of the corporations which obtained the loans and the bail-outs were also directors of the banks, and the directors of the banks were also directors of the large corporations.
November 8, 1982

Let me read a few examples which I took from that book. Argus Corporation, which owned Massey-Ferguson at one time and Dominion Stores among others, had as its directors Conrad Black, who is director of Canadian Imperial Bank of Commerce, and Montague Black who is a director of the Toronto Dominion Bank. It is not surprising that Massey-Ferguson was able to obtain large loans from the banks.
The former head of CP Limited was Ian Sinclair, who is a director of the Royal Bank. The present President of CP is Fred Burbridge, who is a director of the Bank of Montreal.
The Hudson Bay Company, which is now owned by the Thompson interests, took over a number of companies and corporations, including FP Publications and Zellers. Kenneth Thompson is a director of the Toronto-Dominion Bank. George Richardson, who is the head of Hudson Bay, is a director of the Canadian Imperial Bank.
Walter Light is a director of Inco, a company which is in such great financial difficulty and which invested hundreds of millions of dollars in attempting to establish nickel mines which would compete, if successful, with Canadian mines where thousands of Canadians are now unemployed. It is a company which bought a battery firm and then wrote it off to the extent of $250 million. Walter Light is a director of the Royal Bank of Canada, and G. Arnold Hart is a director and executive officer of the Bank of Montreal.
Massey-Ferguson has one of its directors Alexander Runci-man, who is a director of the Royal Bank, and A. A. Thorn-brough, who is a director of the Canadian Imperial Bank of Commerce.
I cited those examples for the record because they demonstrate very clearly what we have said so many times in this Party, that the large corporations in this country receive entirely different and much more sympathetic treatment than the small business people in this country.
The Minister tells us that under the provisions of this Bill the Government will be prepared to lend up to $400 million at financially attractive interest rates. First, it is unlikely that that money will be used because interest rates have come down since this Bill was prepared and many of those who would have qualified when the interest rates were higher will probably no longer qualify.
If one compares the $400 million to be made available to all of the small businesses in this country with the kind of treatment given to corporations such as Dome, Massey-Ferguson, Turbo and others, one can see where the interest, the support and the heart of this Liberal Government lies. It is not with the small business people who live and work in cities like Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver. The Government's interests lie with the big business corporations which have always had the preference and attention which they believe they need.
As I indicated previously, this Bill will not come close to giving the small business community the help it needs. I would like to take a moment to explain our reason for this belief, aside from the fact that there is simply not enough money. If we understand this Bill correctly, it promises $400 million in
Small Business Investment Grants Act
assistance to small business. The program will provide an interest rate reduction of up to 4 per cent for loans between $10,000 and $500,000 taken out for the purchase of new capital equipment and buildings. The subsidy would be available for two years. Given the state of our economy and the fact that there are close to a million and a half unemployed, and given the fact that there are 400,000 less Canadians working in October of 1982 than were working in October of 1981, we must ask the Minister and the Government how many businessmen can or will invest in new capital equipment during these current economic conditions. For that reason we think that this Bill is insufficient. We believe that business must be aided in a serious manner, one which will give real thought to the problems of small business.
I would like to offer a few concrete proposals which we think should be undertaken. First, as we have said for a number of years now, a made-in-Canada interest rate policy must be established. We have been calling for an interest rate at one per cent above the rate of inflation. This change alone could assist many businesses now facing closure, to keep debt repayments current and stimulate consumer demand. Not only is small business suffering because of the high interest rates which we have had for the last couple of years, it has suffered inordinately because of the roller-coaster effect of those interest rates. No small-businessman can plan the operation of his business if he does not know whether the interest rates will be 14 per cent or 20 per cent, both of which he has seen in the last year.
We believe that the Bank Act must be revised. It should be changed to provide a proportion of bank lending to small business. This would prevent the situation which has plagued small businesses in the past number of years where, as I have already indicated, large corporate borrowers have tended to crowd out small businesses.
We believe that the Federal Business Development Bank needs to be restructured in order to provide real risk and venture capital to small firms and act as a clearing house for all Government programs for small business. The CASE program, counselling assistance for small enterprises, could also be strengthened and better integrated with the Federal Business Development Bank's granting of loans.
We need to provide assistance for small business in marketing. We believe that a more aggressive "buy Canadian" policy in both private and public sectors could assist small businesses to prosper. Promoting that message would be much more beneficial to Canadian business than the Government's current approach, which has been to sponsor an independent study with the banks showing that small-businessmen are not really being discriminated against by the banks, and then using the study in large scale advertisements in the major daily newspapers to tell small-businessmen that the banks are on their side.
You cannot kid the troops all the time, Mr. Speaker. The small-businessman who must deal with the banks' restrictive policies toward him knows that the bank is not his friend.

November 8, 1982
Small Business Investment Grants Act
We believe that the Government should restore the small business bond. Small businesses in financial difficulty are the only ones eligible for these bonds now. These bonds will terminate on December 31 of this year. Small-businessmen need access to lower rate funds for both new investment and to finance inventory costs. We would continue to offer this vehicle to small-businessmen for development purposes and operating loans.
We do not intend to hold this Bill up. As I indicated earlier, we believe that it is a very small step toward helping the small business community in this country.
Having said that it is a very small step, we do not intend to prolong the debate unnecessarily. I want to say to the Minister that small business will not be very thankful to the Government when it sees the results of this Bill. They will not get much help from the Bill, not the kind of help they need and deserve if this country is to prosper.


Mr. Jack Masters (Thunder Bay-Nipigon):: Mr. Speaker, for many reasons I am very pleased to have an opportunity to make a brief intervention on the Bill, particularly when the small business investment grant seems to be condemned before it has even had a chance to go anywhere. That is what I seem to be hearing in the House, although I must confess that the business community of northwestern Ontario, with which I have many dealings now, as I have had in the past, seems to look with favour on this particular Bill and anxiously awaits its passage.
I suppose the problem with an item which only amounts to $400 million is that the critics of the Government will immediately say that it is not enough to put one and a half million people suddenly back to work. I think that the Minister tried to make it very clear in his opening remarks that the intent of the Bill was not to put everyone back to work all at once because, Lord knows, we all wish we had that magic button, some miraculous item which would do all those things instantaneously. But the message, both in and out of the Government, is that it will take many things working in harmony to make things happen, to get people back to work, to restore confidence, and so on.
I believe that we are now beginning to see many signs across the country and around the world that we will stay within Canada, because Hon. Members opposite say, "Quit blaming it on the rest of the world". We somehow live in the little world of our own, and the rest of it does not count, so we will stay within our boundaries for the purpose of the exercise.
I would say that I am happy with the Bill because it is another sign which states that small business generates jobs and activity within Canada and makes work within Canada available to other Canadians. That is a very commendable idea. While Hon. Members opposite want to put down the small amount invested in this particular program, I know they are as anxious, as we are, to see it implemented as quickly as possible, to give small business, which has the ability to expand
through research, development and generally to allow their business to grow, to do just that with some modicum of help.
Basically, the business community operates best on its own and sometimes only needs a little bit of encouragement to get going. The small business investment grant will give many an opportunity, through spending some money on research and providing money for new capital equipment, to begin to expand. That begs the question: are there businesses around which have the ability to invest and to expand? Daily we listen to a litany of statistics which spell out doom and gloom.


An Hon. Member:: Reality.


John Gerald (Jack) Masters: The statistics and the reality are there, except that they stand alone. I think that if one has a problem or a series of problems, one must try to identify them. The trouble with these statistics, as true as they are, is that they leave the impression that all is wrong everywhere. We know that we have many sad problems in Sudbury. We know why. We know we have many sad problems in the automotive industry. Those of us who drive Canadian-made vehicles say, "Well, at least I did not contribute to that problem". Maybe those of us who have elected, for whatever good reason, to buy foreign-made vehicles might want to consider our action. However, the free enterprise system is such that we buy what we want, and so on.
I find that in the doom and gloom which is being spread, we are not getting a handle on matters as they are, because there are contradictions out there. Excuse me for going beyond our borders, but right now, primarily because of the American market situation, pulp and paper products and lumber products from northwestern Ontario are basically sold south of the border. Therefore, we have a decline. Yet for some strange reason, a gentleman who sells power chain saws only to the commercial sector, to the professional cutter, tells me that he is having the best year ever. I asked him, "Well, why is that?" He said, "It is because they are really thinking of the future. They are working hard, and I must tell you something. I am working harder than 1 have worked in the last 25 years, but I find that when I work harder the results are there". I also find that in my community, even with the doom and gloom, many businessmen are saying, "1 am looking forward to the passage of Bill C-136 because my small business is capable of investment."
I know a jeweller. One does not have to buy watches, rings and china to know a jeweller. He said to me, "Mr. Masters, I have had to hire more staff." I asked, "How could you do that in these difficult times when there is no money around? How can you expand your business?" He said, "It is because I was running scared. I stayed home and I worked. I sat down with my staff and asked them how we could meet competition and make sure that we did well". That man is doing well. I know people in other sectors of the economy who are in fact expanding now. They are hardy souls, and I think most businessmen in Canada are hardy souls, and they are working at it.
Therefore, I say that the small business investment grant will help not only those in northwestern Ontario but all those across Canada who look for a silver lining as well, those who
November 8, 1982

look forward to making their businesses better and more competitive and are anxious to take advantage of the help which is inherent in this sum of S400 million which will be put at their disposal. They are anxious to put it to work. I say, "Thank goodness for the small-businessman because he is our hope now and in the future". The amount small-businessmen spend of this money in order to add some modest extension to their businesses or to do some meaningful research to help them grow will have a tremendous spin-off effect. This is because one small-businessman who does something leads to another small-businessman having to do something else. It is just another small cog in the wheel which is starting to turn toward progress, but we will not make progress if we steadfastly cling to the idea that there is no hope. What I think, conclusively, is that there is hope. Bill C-136 offers more hope at least to one small segment of the business community which will take advantage of it. This, combined with many other initiatives is in fact what will turn things on more and more.
However, there is one other aspect upon which I would like to comment briefly before I sit down. This particular Bill is part of the ongoing consultative process between business and Government.


An Hon. Member:: It is a band-aid.


John Gerald (Jack) Masters: Well, it may be a band-aid, but it may also be another brick in the construction of a new and better Canada as we go on to a better economy, and I do believe we are going that way. I would simply like to tell all Hon. Members in the House and to people across the country what is the difficulty with the consultative practice, because I sat down some time ago with eight businessmen. I might say that none of them were particularly of my political persuasion, so they were not friendly guys or nice guys. They said, "The trouble is that no one listens." So I listened to them and they suddenly began, in this consultative process, to say to me, "We now see the difficulty. We cannot agree among ourselves, but we have come to this common denominator or thought, and that is, we had better at least try harder to come to a consensus among ourselves and we had better try to work better, not only with government but with each other as well".
I think that is a message for the whole country, and the message is simple. We must begin to accentuate the positive. We must remember that the country will make progress if we work together, if we think together, if we become more conscious of one another as Canadians. I think the Government has the message well in mind when it introduces legislation such as the small business investment grant, which will indeed help small businesses across the country carry out meaningful research and expand. To me, it is another item of encouragement to the country. I think I will now sit down because I know all Hon. Members want to see the Bill put through the committee stage as quickly as possible.


Some Hon. Members:: Hear, hear!
National Housing Act (No. 2)


[Stage Direction]
Motion agreed to, Bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.

André Ouellet: that Bill C-135, to amend the National Housing Act (No. 2) be read the second time and referred to the Standing Committee on National Resources and Public Works.


Mr. Nielsen:: Mr. Speaker, surely we are going to ear from the Minister responsible for this legislation. Surely he will explain it.


André Ouellet: Mr. Speaker, I would like to inform the Hon. Member that thanks to the exceptional level of co-operation shown by the parties in the House this evening, the bill just approved by the House was put through faster than we expected. We have been in touch with the office of the minister who is on his way to the House to speak on this bill. If the opposition has any members who wish to speak on the bill, they can start right away, and as soon as the minister arrives, he will of course take part in the debate.


Erik Nielsen: Mr. Speaker, I am sure the Government would like us to bail it out again. But here we are confronted, astoundingly, with a situation where a Government has been calling for co-operation, calling for that kind of atmosphere in the House of Commons which will assist the Government to get its program through, and we have been delivering that cooperation. Yet here we have a Government in such disarray that its own Minister responsible for the Government's own legislation is not here to introduce it. Surely there must be some responsible minister of the Crown who has been in communication with the Minister Responsible for Housing who can explain this Bill. If not, I would suggest that perhaps the Government might consider the House rising until such time as the Minister responsible for Housing gets here to explain the Bill, which he is supposed to do himself.


André Ouellet: Mr. Speaker, the Hon. Member is taking advantage of a situation that has developed very quickly. The advantages of this bill are well known on both sides of the House, and we believe that this legislation can be considered without necessarily having speakers taking part in the debate in order to describe the advantages of the bill. If the Hon. Member wishes to take part in the debate and consider the substance of the bill, he is entirely free to do so. We shall listen to him, and as soon as the minister arrives, he will rise in the

November 8, 1982
National Housing Act (No. 2)
House to take part in the debate. Otherwise, if everyone is agreeable to passing the second reading stage of the bill, all we need is a vote, followed by referral of the bill to committee for consideration.


Erik Nielsen: Mr. Speaker, I have never heard of such an outlandish suggestion from any Minister of the Crown. The normal practice in this House, when legislation is introduced, is to have the Minister who is responsible for it introduce it. Indeed, ordinarily the motion putting it before the House is in his name. The Minister who has just resumed his seat had to stand in for that process.
Our critics on every piece of legislation that has gone through tonight have been here and ready to speak. Our critic, the Hon. Member for St. John's East (Mr. McGrath), is here tonight ready to respond to the Government whose spokesperson should be the Minister responsible.


Joseph Jacques Jean Chrétien: No.


Erik Nielsen: The Minister of Energy said no. He is quite wrong. He would certainly have his Parliamentary Secretary here at least to introduce legislation. We do not even have that. If the Government is not prepared to proceed with the business that it laid upon us last Thursday, given the co-operation from this side of the House, then the Government should consider the House rising until such time as the Government can get the appropriate Minister here.


Mr. Rene Cousineau (Parliamentary Secretary to Minister of State (Small Businesses and Tourism)):: Mr. Speaker, perhaps I could usefully add a few words at this stage. In preparing for the debate on Bill C-136, I negotiated with the opposition critics. I spoke to the member for Winnipeg North (Mr. Orlikow), and he mentioned that he and another member of the New Democratic Party would be speaking on the bill. I also met the hon. member for Cambridge (Mr. Speyer), and the conclusion was that five or six members of the Progressive Conservative Party would be speaking. We are indeed thankful for their co-operation, but in fact, it worked too well, and as a result, the Minister responsible for Public Works (Mr. LeBlanc) is not here in the House. If the leader of the opposition has another solution, I should be thankful to hear it, but the fact remains the minister is not here. I have tried to find out, and unfortunately I see there is no other speaker from the Progressive Conservative Party.


Mr. Blais:: Mr. Speaker, on a point of order.


Mr. Deputy Speaker:: The Minister of Supply and Services (Mr. Blais), on a point of order.


Jean-Jacques Blais: Bill C-135 is one of the bills on the Order Paper, as indicated just now by the parliamentary secretary. There has been a high level of co-operation, and the parties are aware
of that, but as a result, the business of the House has progressed at a faster rate, and a bill has now been called that, for the time being, cannot be given second reading by the minister responsible. However, there are other items on the Order Paper which could be considered by the House and which are not directly related to Bill C-135. In fact, Mr. Speaker, one item is of particular interest to me, and I could give you some advice there. I am thinking of the Canagrex bill, which I feel is of vital importance, and if the opposition members were interested in proceeding with this bill, it is a piece of legislation on which there has already been some debate. We could therefore continue where we left off when debate on the bill was adjourned. Personally, I think this is extremely important legislation, because as you know, Mr. Speaker, and still on the same point of order, we were particularly keen on this bill and in fact, we were a little concerned that it might not get to third reading and be passed, when we adjourned for the summer, because-


Erik Nielsen: Mr. Speaker, I rise on a point of order. It is obvious that the Minister, much to his discredit, is simply trying to waste time in the hope that the Minister will show up.


Jean-Jacques Blais: I know you do not like Canagrex.


Erik Nielsen: The Minister said that we do not like Canagrex. We are waiting for it. We were told last Thursday that the business of the House would be as we have been dealing with it this evening. The Minister has not been ready. We have been ready. Parliamentary Secretaries get paid a handsome allowance to be here on behalf of their Ministers if their Ministers are absent. That Parliamentary Secretary is not even here. Either we get on with the business which the House Leader laid down, or the Government has one option, that is, to rise until the Minister responsible is here. We can then carry on with getting the business of the country dealt with.


Mr. Taylor:: Mr. Speaker, our time is just as valuable as their time. We are here listening to a lot of idle chatter while a bunch of Liberals are chasing around like a bunch of lost sheep. Why don't you declare the House adjourned for half an hour?
[ Translation]


André Ouellet: Mr. Speaker, you called Bill C-135. I informed the opposition that we were ready to proceed. We have no speaker. If the opposition does not have any speakers either, I suggest that we proceed immediately with a vote and that after the vote, we refer this legislation to committee. We have other bills that we can call and discuss afterwards.


Mr. Deputy Speaker:: The Hon. Member for Mission-Port Moody (Mr. Rose) rises on a point of order. I note, however,
November 8, 1982

that the Parliamentary Secretary is in his place and is apparently seeking to be recognized.


Mark Willson Rose: Mr. Speaker, the Minister was talking about cooperation and all the rest of those things like trust and tradition that we have heard over and over for the past three, four or five days. I would like to say that the Minister responsible for Housing is not present. Through the good offices of the House, we have given second reading to Bill C-134 and Bill C-136. The Minister of Supply and Services (Mr. Blais) was up doing an excellent job of ragging the puck waiting for the Parliamentary Secretary to the Minister of Public Works (Mr. Malepart) to appear. My suggestion is that since the Minister responsible for Housing is not present, the presenter of the Bill is in no position, since he is not here, to present the Bill-


Mr. Deputy Speaker:: With all due respect to the Hon. Member, the Parliamentary Secretary to the Minister responsible is in his place and seeks to be recognized. The Parliamentary Secretary to the Minister of Public Works.


Mr. Jean-Claude Malepart (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, on behalf of the minister, it is with great pleasure that I invite all members of this House to expedite Bill C-135, whose purpose is to improve the Mortgage Renewal Plan. Mr. Speaker, more than. 10,000 Canadians have applied under this program, upon renewing their mortgages, and the purpose of Bill C-135 is to provide two amendments that will improve the mortgage renewal process for thousands of Canadians, who are hoping that this legislation will be passed as soon as possible and that at last they will be able to take advantage of what this legislation has to offer.
You may recall that under the former program, the rule was that for people to be eligible for the special mortgage rate, their mortgage payments had to exceed one third of their gross income. The new amendment, in addition to extending the program for one year, will make these people eligible for a grant, even if interest rates have gone down, while the rule of spending more than 30 per cent of their income on mortgage payments is maintained.
Mr. Speaker, considering the importance of this bill, and the fact that thousands of Canadians are hoping to receive their cheques, I would urge all the members of this House to pass this legislation as quickly as possible. Members should also recall that in addition to its job creation programs, the Canadian government also has a number of other programs including the Canada Rental Supply Plan, the First-Time Buyer's Plan and also the Home Renovation Plan, which provides funds of up to $3,000 for people who wish to renovate their homes.
Mr. Speaker, 1 shall stop here, since this bill is so important that it should be passed as quickly as possible for the benefit of thousands of Canadians. According to the figures of the CMHC, over 10,000 Canadians have applied under the
National Housing Act (No. 2)
program, and I therefore invite hon. members to pass this legislation, which will be beneficial for all Canadians.


Mr. McGrath:: Mr. Speaker, certainly the Parliamentary Secretary to the Minister of Public Works (Mr. Malepart) has just earned his salary for the year. That was a valiant attempt at explaining a bill. With all due respect, the Parliamentary Secretary obviously was not briefed. However, since the Minister is now in the Chamber, I am prepared to defer to him. Before doing so, I want him to know that I was fully prepared to on his behalf and explain the Bill to the House, which obviously the Parliamentary Secretary could not do.


Roméo LeBlanc: Mr. Speaker, I really apologize to the House. It is nobody's fault. Our telephone systems are being changed to reflect the move from place to place, and that is what happened.


Erik Nielsen: Mr. Speaker, I rise on a point of order. My colleague, the Hon. Member for St. John's East (Mr. McGrath), has been gracious enough to defer to the Minister. It is only fitting and proper. However, it should be clearly understood that he will be entitled to respond after the Minister has concluded.


Roméo LeBlanc: Mr. Speaker, I hope to abbreviate my remarks. I am very pleased to have the opportunity of explaining this legislation to the House. The proposed legislation makes some modifications to the Canada Mortgage Renewal Plan which was first introduced in the budget of November 12, 1981. It might be useful if I took a few moments to explain the details.
Hon. Members will remember that when it was first introduced, it offered assistance to home owners who are having difficulty renewing their mortgages at high rates of interest. The assistance was available to those people whose mortgage payments on renewal would amount to more than 30 per cent of their income. That is very much the principle involved here. It is of assistance to those having to pay more than 30 per cent of their income. At that time it was felt that for people who had substantial equity in their home, the original plan would offer a guarantee of up to $3,000 if the lenders would agree to defer interest payments. In the case of people who had no substantial equity and were paying out more than 30 per cent of their income in mortgage payments, there was an outright grant of up to $3,000.
In the intervening months if became evident that in the uncertain economic climate of the time, many Canadians felt that deferring interest payments on their mortgage was perhaps not the best solution to their personal financial problems. The demand for interest deferral guarantees was not as great as expected, even taking into account that interest rates had already begun to decline.
This feeling was particularly strong in parts of the country where house prices have begun to drop and the home owners' equity was being reduced.

November 8, 1982
National Housing Act (No. 2)
Responding to the changing circumstances, the former minister of Finance, in his budget statement of June 29, announced that the interest deferral aspect of the plan would be eliminated. In future, all those borrowers who qualified for assistance under the plan would receive an outright grant, regardless of how much equity they might have in their home. All those who until that time had qualified for an interest deferral guarantee would receive the grant instead. The Bill now before us gives effect to the changes that I have described.
The principle of this legislation has been debated at some length and approved by the House on previous occasions, that is, the idea of providing assistance to people who may be in danger of losing their homes, giving them some breathing space in which they can make some adjustment in their financial arrangements. There are no new principles involved in this Bill. The intention is the same, and I hope that members on all sides of the House will agree to deal with it expeditiously.
There is, in fact, some urgency to put this legislation into effect. Since June 29, CMHC has approved $3,000 grants for more than 6,000 families, but cheques cannot be sent to them until this amendment to the National Housing Act has been approved by Parliament and proclaimed. This number includes not only people who have applied for assistance since June 29, but some 2,000 persons who were qualified before that date for interest-deferral guarantees and are now to receive the grants instead.
I would like, at this stage, to express a word of appreciation to the financial institutions which are very much involved in the administration of this plan. Borrowers who wish to take part in it are asked to approach their mortgage lenders who will discuss their particular problem in detail and assist them in completing the application forms and forwarding them to CMHC. I am assured by my predecessor and the officials at CMHC that the lending institutions, banks, trust companies, credit unions, caisses populates, and the like, have been most co-operative and have generally been very anxious to help borrowers to arrive at a solution which would help them to keep their homes.
I think we can all take some satisfaction that the Canada Mortgage Renewal Plan has not been used as much as we had anticipated nearly a year ago when interest rates, as Hon. Members well know, were at an historic peak. The fact remains, however, that the plan, in its proposed improved form, is still there for people who are truly in need.
As the Minister of Finance (Mr. Lalonde) has indicated, a realistic projection of the economy for the year ahead indicates that although the inflation rate will drop, the number of those in the work force who will be without jobs will remain high. These circumstances will inevitably create problems for some families in managing their mortgage payments. I hope that, in these circumstances, borrowers will discuss their situation with their mortgage lenders to discover whether the Canada Mortgage Renewal Plan can be useful to them through the hard times or whether some other arrangements can be arrived at which will help them to keep their homes.
If I emphasize home ownership in these remarks, it is because that is the subject of the Bill before us, assistance for mortgage renewal. At the same time, I would like to make it clear that the Government's concern is for the housing of all Canadians, whether they occupy it as home owners, as tenants, or by some other form of tenure.
With these remarks, Mr. Speaker, I would like to thank the Hon. Members opposite for their courtesy, and again apologize for my tardy arrival, which I hope will be corrected because the telephone assistants are hard at work at the moment.


James Aloysius McGrath: First of all, Mr. Speaker, 1 would like to take this opportunity to congratulate my old friend, the Minister of Public Works (Mr. LeBlanc) who is responsible for Housing on his first Bill in this House. 1 know he will bring to this portfolio the same degree of dedication which he had in his previous portfolio. Having said that, I know the Minister does not expect to get off without having addressed the real problems facing the housing industry in this country, namely, that of availability, affordability and the acute decline in housing starts. We supported this Bill, the Canada Mortgage Renewal Plan, when it was first introduced to the House, and at the time we raised very serious reservations about the limitations which where placed on it at that time. The Government has now come to recognize the validity of these criticisms and is in fact extending the application of the Bill. That is the least they could do, given the circumstances under which this Bill is introduced. I am sorry the Minister of State for Finance (Mr. Cosgrove) is not in the House because he is largely responsible for the mess that the Minister of Public Works responsible for Housing has inherited. I would have liked to have heard the Minister make some reference to the recommendations of the Lortie Committee, the famous blue ribbon committee which was supposed to address the keystone of the Government's housing policy, namely, the provision whereby they would reduce mortgage interest rates anywhere from 4 per cent to 6 per cent.
That provision, as Hon. Members know, was turned down by the Lortie Commission. They recommended against it because of the distortions it would have on the marketplace. But it is well to put on the record what the former minister responsible for housing said with respect to that measure when he spoke on "The Nation's Business" on Sunday, July 11, 1982. With respect to the deliberations of the Lortie Committee, he said, "the Canadian Government will implement a system for providing loans at 3 to 6 per cent below the market rate to ensure your long-term security". There were no ifs, and's or but's, no qualifications. There was a firm, unequivocal commitment to proceed with the implementation of that measure. Indeed, when the former minister of finance brought down his June budget and introduced this measure, he said at the time, and I believe I am paraphrasing him correctly, when he referred the measure to this committee, that he could not conceive of a situation whereby the committee would recommend against the implementation of that measure. In addition,
November 8, 1982

the former minister said in an interview in The Toronto Star, again in July: "There's no question of chance. The plan will be implemented. The Government is committed to it."
We know of course now from the new Minister of Finance that they are not going to proceed. They are going to recommend that the recommendations of the Lortie Commission be accepted because of the disruptions the plan would have on the market place. And I say, rightly so, because, again, we cautioned the Government on the way they were proceeding in terms of restricting the application of the mortgage reduction scheme to new houses.
The reason I raise that at this particular time is because what the Government proposes today will not go very far in addressing the problem. Indeed, to use an old Parliamentary cliche, I would not even describe it as band-aid treatment. What is the situation the Minister has inherited? The bad news for August: housing starts during August were at a seasonally adjusted annual rate of 87,000 for all areas, when we should have for the year somewhere in the vicinity of 220,000. I refer the Minister to the actual housing starts for the end of the third quarter for all areas of Canada which stood at 88,950. At that rate we will be lucky if we get to 130,000 at the end of the year when we actually need, according to the figures provided to us by CMHC, somewhere in the vicinity of 220,000 starts just to keep abreast of demand.
What does the Government propose to do instead of the mortgage reduction scheme which was turned down by the Lortie Commission to provide some degree of security to those potential home buyers who are looking at the marketplace, looking at the fluctuations in interest rates? Take a look at what has happened over the past year. Canadians are in no way encouraged to enter into a mortgage agreement, because God only knows what is going to happen in the months ahead. There is no security against cyclical fluctuations in interest rates such as have plagued the industry for the past year. That is what the Government intended to address in that measure. It is interesting that the Minister said, in order to provide for your long-term security the Government will implement a scheme to reduce mortgage interest payments. I say to the Government it should have made that program universal in its application. If it had done so by way of a tax credit or tax deduction, it would have provided the real and immediate stimulation to the housing industry to get housing starts up to where they should be. That move, Sir, would be a matter of enlightened self-interest because when we talk about the unemployment situation in the country today, we should do so in the context of the housing crisis.
We have unemployment somewhere between 12 per cent and 13 per cent. Over 1.5 million Canadians are unemployed. Yet both the Minister and the Government know that one way of addressing the unemployment problem in a very meaningful way is to address the housing crisis. Housing is a very labourintensive industry, an industry capable of providing 2.5 jobs for every housing unit started in the country, and capable of producing anywhere from $6,000 to $10,000 per unit in
National Housing Act (No. 2)
Government revenues. Why the Government has not proceeded to make this plan universal in its application just boggles the mind. I do not believe the Government can hide behind the excuse that interest rates are down right now. No one, certainly not the Government, can assure us of just how long that situation will last.
When we speak of the housing crisis, Mr. Speaker, we are talking in terms of not only housing starts and availability, but affordability. One of the concerns I have, and this certainly will be brought to the Government's attention in the committee stage of this Bill, is that of the Canada Rental Supply Plan. That plan was to produce 30,000 rental units by providing long-term interest free loans. We know, Sir, that up to October 26 there had been only 7,814 applications. I repeat, applications, and it is important to make that distinction because if this represented 7,814 starts, that would be significant. But these are merely applications. We do not know how many actual starts there are. I suspect the number is probably significantly lower than the 7,814 applications out of 30,000. That means, of course, that builders are just not taking advantage of this program. The reason for that, Sir, is the market place, rent controls, because of the wide disparity between market rent and economic rent. Given costs today, given the return a developer can realize on rental units, it is just not economically feasible for him to proceed, interest-free loans notwithstanding.
I suggest to the Minister seriously that he should give consideration to scrapping the Canada Rental Supply Plan and putting that money into co-op housing as there is a real need for low-income housing right across the country. That money would be taken up very quickly and it would provide a quick stimulation to the industry and badly needed low-cost housing to Canadians right across the country. Why the Government has not moved in this direction, Mr. Speaker, is very difficult to understand. I hope the Minister, when he speaks to the Bill in committee, will address himself to that problem. Certainly we are in a serious situation.
In addition to the Canada Mortgage Renewal Plan, all the Government offers is the Canadian Home Ownership Stimulation Plan and the Canada Home Renovation Plan. That, Sir, is not going to come close to addressing the problems we are facing in the nation today. Indeed, let us take a look at the Canadian Home Ownership Stimulation Plan whereby the Government provides $3,000 grants to first-time home buyers. As of October 22, 1982, CMHC had approved 63,862 applications. This figure includes 22,495 applications for new housing and 41,367 applications for existing homes. In other words, less than half the grants were used for new housing. In other words, the program designed to stimulate new housing is not in fact having that effect. As far as the Canada Home Renovation Plan is concerned, the $3,000 grants under this program were to be directed to those individuals who wanted to convert some portion of their home into an apartment unit for a relative or an in-law or what have you, and that would go a long way to filling a need. In other words, it would provide

November 8, 1982
National Housing Act (No. 2)
affordable housing for young people just starting out or for elderly people, or what have you. However, it still remains restricted and the shortcomings of the program are not addressed by this Bill. Consequently, we will not have an opportunity to move on it by way of amendment. But certainly we will have a chance to ask the Minister to address these problems when it gets into committee.
I want to assure the Minister it is our intention to co-operate with him to get this Bill out of the House and out of committee as expeditiously as possible. I say that with some reservations because we do want to take the opportunity to hear from the Minister and CMHC officials and, hopefully, from people in the industry as to just exactly how they view the situation out there.


Mr. Doug Anguish (The Battlefords-Meadow Lake):: Mr. Speaker, I am pleased to be able to address a few remarks to Bill C-135, the amendments to the National Housing Act. This Bill is intended to implement the June budget changes to the housing measures originally announced in the November budget. The Bill does a couple of things. First, it changes the term of the Canada Mortgage Renewal Plan so that homeowners with monthly mortgages and property tax payments in excess of 30 per cent of the gross family income will qualify for a $3,000 grant rather than interest deferral. Formerly, only homeowners with less than 5 per cent equity in their homes and with payments in excess of 30 per cent could qualify for these grants. Other homeowners would have had only the option of deferring interest, which would have been added on to their principal and the deferral would have to have been guaranteed by CMHC. Since it was almost impossible to qualify for the grant, the Government did in fact change the terms of the plan to allow some homeowners to in fact qualify for this program.
Secondly, the amendments to the National Housing Act will provide an extension to this plan for a second year. Originally, the plan was to terminate on November 12, 1982 but the June budget has extended it to December 31, 1983. In terms of the National Housing Act, I would acknowledge that these changes are an improvement, but still, they do not address the real problems of housing in Canada today. There are no changes in areas where they are so necessary such as rental housing, co-operative housing and low-cost housing which is so necessary at the present time.
In the City of Winnipeg there is a problem which I am sure exists in many other areas of the country as well. Through a program called Limited Dividend Housing, private investors have received large government subsidies to enable them to build lucrative rental units. One of the conditions of the subsidy was that any application for rental increases would have to be approved by CMHC. It bothers me that in the City of Winnipeg, as was pointed out by the Hon. Member for Winnipeg-St. James (Mr. Keeper), and I am sure this has happened in other areas of the country as well, Canada Mortgage and Housing Corporation has allowed rental increases well beyond the six and five that we are supposed to
be adhering to at the present time. I am bothered that the Government can make the plan apply to some people, but that others who do not wish to comply with its conditions do not have to do so. That is unfair and unjust. The Hon. Member for Winnipeg-St. James says that we should make them roll back the rent increases to comply with the six and five program, and I think he is right.
The rental housing that was supposed to have been supplied under the Canada Rental Supply Unit Plan provided in Bill C-89, and was supposed to come into effect earlier this year, promised 30,000 rental starts. In fact, by October this year less than 25 per cent of that number had been committed by CMHC. Out of the 30,000 rental units allocated in March 1982, only 7,341 had been approved by CMHC as of October 4. I am concerned about this because of the high cost of rental accommodation in the country and the low vacancy rates in many areas.
The Government's approach with Bill C-135, is symptomatic of its tendancy to apply band-aids when new systems are needed. I hope that the Minister responsible for CMHC will read the comments I make tonight and, as a result, will ask officials in his Department to look into the feasibility of the proposal I am about to make.
Canadians find themselves in an increasingly difficult position if they want to own their own home, Mr. Speaker. I see nothing wrong with people renting a home, living in co-op housing or low-cost housing all their lives. An expectation has been built up in our society, however, that people may own their home, but that ideal is rapidly becoming out of reach for most people. When my grandparents lived on the farm they built their house for very little. When I bought my house in The Battlefords, it cost a great deal. In fact, many people of my age will have to spend one-third of the income they would expect to earn in a lifetime, to provide shelter for their families. If things continue in this way, then in my children's time or in my grandchildren's time, housing may not be affordable at all.
Instead of applying different methods to the same system, I think we should consider different systems by which people could own their homes. I should like the Minister in charge of CMHC to ask his bureaucrats to consider developing a program through the high schools which would teach young people how to build their own homes. I have mentioned this before and some people think the suggestion of a course in building as a mandatory part of education, is rather farfetched. But unless something like this happens, Mr. Speaker, in years to come only the elite in our society will be able to afford to own a home.
If such a program were developed by Canada Mortgage and Housing Corporation and the Provinces were encouraged to include it in their educational system, it would go a long way toward helping people to provide shelter for themselves. If we had a course called "How to Build a House"-and that is a simplistic way of putting it, I suppose-as part of our educational system, then when people graduated from school or
November 8, 1982

university and entered the working world where they would have to shift for themselves without much help from the Government or from their families, they would have three options. First, those people who could not afford to buy housing would at least be able to put their "sweat equity" into it. All they would require would be the materials which they would acquire by the means available to them. Second, those people who quite often are taken advantage of by housing programs or fly-by-night contractors, could supervise the quality control of their homes as they are being built. Possibly, in their free time they could also put in some "sweat equity" toward the downpayment for the house. Third, another group of people who could afford to buy under the present system, could have the housing contractor build the house for them.
In the future, I think such a system could give us the best of all worlds or at least a better housing system than we have at present. The day is rapidly coming when the present system will not work, Mr. Speaker.


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


Some Hon. Members:: Agreed.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on National Resources and Public Works.

[Stage Direction]
On the order: Government Orders:
Resuming consideration of report stage of C-85, An Act to establish a corporation called Canagrex to promote, facilitate and engage in the export of agricultural and food products from Canada, as reported (with amendments) from the Standing Committee on Agriculture.
Erik Nielsen: Mr. Speaker, I rise on a point of order. I thought the Government would try something sneaky, just as it is trying now. First of all, I should like to say that the Government asked for co-operation to get the budget legislation through. Three Bills have been put through today, so that is co-operation in spades.


Some Hon. Members:: Hear, hear!


Erik Nielsen: That kind of co-operation does not deserve a sneaky end run to try to get around the business of the House that was established last Thursday by the Government House Leader. It would have liked to do that a few moments ago, when the Minister responsible for Housing was not here. Indeed, he was almost half an hour late. I would refer the
Canagrex
Chair to Page 20114 of Hansard for last Thursday, October 28, where the Government House Leader had this to say:
Madam Speaker, until further notice, the business of the House remains unchanged as far as today, tomorrow, Monday and Tuesday are concerned. Yesterday, I asked the House to wait until today for further details about our business for next Wednesday and Thursday. So, today, we will start the debate on second reading of Bill C-128, a measure to provide the government with supplementary borrowing authority. Tomorrow will be the second day of this debate, which should end next Tuesday by 9.45 p.m. Both Monday and Friday next week-
I am referring to the wrong Hansard.


Some Hon. Members:: Oh, oh!


Erik Nielsen: Don't get excited.


The Acting Speaker (Mr. Blaker):: Order, please. I would like to interrupt the Hon. Member for Yukon (Mr. Nielsen) because I am referring to the wrong Hansard as well. I do not know if the Hon. Member wants to raise a point of order with respect to the legitimacy of the presentation by the Clerk of Bill C-85, or whether it is some other point to which he wishes to address himself.


Erik Nielsen: Perhaps you could listen to what I have to say.


The Acting Speaker (Mr. Blaker):: Yes, I will certainly listen but there is a point which perhaps the Hon. Member might want explained. I wanted to advise the Hon. Member for Yukon and the House that there will be Royal Assent at 9.45 p.m., I am informed by the Table. I thought he would want to take that remark into consideration in his planning.


Erik Nielsen: It is not the Opposition which has to get its act and its plan together. It is the Government which has to get organized with respect to its plan. It does not have its act together in the country, and it looks as if it did not have its act together in the House.
I was translating from the French edition of Hansard; that is why I got on to the wrong date.


Some Hon. Members:: Oh, oh!


Erik Nielsen: Turning to page 20397 of Hansard for November 4, the President of the Privy Council (Mr. Pinard) said:
Madam Speaker, it is correct to say that today we will commence second reading of Bill C-134-
And so it went for that week. Concerning this week's business he said:
As far as the business of the House for next week is concerned, on Monday and Tuesday we shall continue debate on Bill C-134, respecting rebates of interest on farm loans-
He was referring to today and tomorrow. That Bill the Government now has. He continued:
-Bill C-136 which is aimed at assisting small businesses with interest pay-merits-
That Bill the Government now has. He continued:
-and finally, Bill C-135, which provides assistance for home owners.

Canagrex
That Bill the Government now has. Ele went on to say:
Thus, next Monday and Tuesday, depending on this week's progress with consideration of these bills, we shall continue consideration of the bills in the order mentioned. Next Wednesday-
As far as the Government's order of business is concerned, that is where we are at right now. He continued:
-again depending on our progress with Bill C-134, Bill C-136 and Bill C-135, we may decide to consider two bills which, for technical reasons and also because of Canada's international commitments, are extremely urgent, and I am referring to Bill C-129 regarding the Bretton Woods Agreements and Bill C-130, which concerns continuing financial assistance to be provided to certain international financial institutions.
Nowhere in that outline of business was Bill C-85 mentioned.
As the Government House Leader said last Thursday, if these bills, Bill C-129 and Bill C-130, are so all-fired urgent, let it bring them on as it said it would. The planning of the House depends upon the Government laying out the business, and the Opposition being prepared to meet that business in the ordinary course of debate. For the Government to try to sneak in an entirely different bill at this stage, instead of going ahead with the order of business laid out by the Government House Leader, dealing as it does, to use its own terminology, with "extremely urgent" bills, is just not good enough.
If the Government does the proper thing, it will now call Bill C-129, and when we have finished with that, it will call Bill C-130. I might say that if the Government would get on with it, it might find the same degree of co-operation which it has had all day with respect to the passage of its legislation that it considers so almighty urgent. I request that Bill C-129 be called now.


David P. Smith: Mr. Speaker, I regret that the Hon. Member for Yukon (Mr. Nielsen) has used the word "sneaky" with regard to the position the Government has taken tonight. There is nothing sneaky going on here at all.
We have been trying to deal with Bill C-85 for many, many months. To suggest that somehow we are sneaking it through when we consider the amount of time that the House has spent on it is a preposterous suggestion. There is nothing incompatible in what the Government is doing tonight with the statements made by the Government House Leader last Thursday to which the Hon. Member for Yukon has referred. We have dealt with those three bills.
It is true that they have been dealt with in a more expeditious manner than we had anticipated. If the Hon. Member for Yukon wants to describe that as co-operation, fine.


Erik Nielsen: Don't you?


David P. Smith: I agree that it is very co-operative and I welcome it. I regret that he has chosen to inject a tone into this debate which would suggest that something sneaky is going on. We will not do that, we will live up to our responsibilities.


Erik Nielsen: Where is Bill C-129?
November 8, 1982


David P. Smith: As soon as it was clear that we were moving things along, I advised the Table that we would go to Bill C-85. We have to adjourn tonight for Royal Assent at 9.45 o'clock. The Government is prepared to put up a speaker on Bill C-85, so it will not mean pushing it through tonight. I think that is quite a reasonable thing to do.
In so far as tomorrow is concerned, we will be dealing with Bill C-90, and on Wednesday we will be dealing with Bill C-129. I wish to advise the Hon. Opposition House Leader of that so that he can see how co-operative we are by giving him advance notice as soon as we know that things are moving along in a co-operative spirit and a little more quickly than we had anticipated. We welcome this move and look forward to much more of it.


Mark Willson Rose: Mr. Speaker, on the question of co-operation, I think the epitome of co-operation has been displayed this evening. I for one in the Opposition am very pleased about it. We have moved the Government legislation along a few yards this evening. When the Parliamentary Secretary to the House Leader suggested it to the Table and no one else that he would move forward to Bill C-85, it came as a complete surprise to Members of the Opposition. While he has informed the Table, one very important thing he overlooked was the opportunity to inform the Opposition. If one looks at the last musings of the Government House Leader last Thursday, as reported on page 20397 of Hansard, there is no mention of Bill C-85 coming up today at all.


An Hon. Member:: They do not have the legislation ready.


Mark Willson Rose: I do not know whether the Government is ready or not on this business, but obviously it was not ready for many things this evening, judging by the colour of the face of the Minister of Housing when he ran into the Chamber, all redfaced and like a flamingo, to make his speech on housing.
It seems to me that we must be guided entirely by the honourable words of the Hon. House Leader as he spoke them last Thursday. There was not one mention of Bill C-85 at that time. When his Parliamentary Secretary informs the Opposition that he is prepared to deal with these measures, this Party will be prepared to deal with them as well, but we cannot do this sort of thing out of the blue at this time of night.
[ Translation]


Mr. Dionne (Chicoutimi):: Mr. Speaker, on a point of order.


The Acting Speaker (Mr. Blaker):: Order, please. I shall recognize the parliamentary secretary to the Minister of Agriculture (Mr. Dionne) in just a second, if I may, since there are two or three things I must do first.
Before we go too far, I want to deal with the matter of Royal Assent at 9:45 p.m.
November 8, 1982


MESSAGE FROM THE SENATE
The Acting Speaker (Mr. Blaker):: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill C-128, an Act to provide Supplementary Borrowing Authority (No. 2), without amendment.



THE ROYAL ASSENT

['Motion negatived on division.\nHon. Members will be aware that the proceeding in hand, that of Royal Assent, is five minutes delayed.']
The Acting Speaker (Mr. Blaker):: Order, please. 1 have the honour to inform the House that a communication has been received as follows:
Government House Rideau Hall Ottawa
November 8, 1982
Madam,
1 have the honour to inform you that the Honourable Antonio Lamer, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 8th day of November, 1982, at 9.45 p.m., for the purpose of giving Royal Assent to a Bill.
I have the honour to be,
Madam,
Your obedient servant,
Esmond Butler
Secretary to the Governor General



[Stage Direction]
On the order: Government Orders:
Resuming consideration of report stage of C-85, An Act to establish a corporation called Canagrex to promote, facilitate and engage in the export of agricultural and food products from Canada, as reported (with amendments) from the Standing Committee on Agriculture.
The Acting Speaker (Mr. Blaker):: I will recognize Hon. Members if they will allow me to get to that point. Hon. Members have been addressing themselves to a point of order raised by the Hon. Member for Yukon (Mr. Nielsen). I interrupted the Hon. Member to advise him of Royal Assent at 9:45. I did make passing reference to a problem as to whether or not his point of order addressed itself to the right of the Government or the Clerk at the Table to read Government Orders of the day at this point. Perhaps that is the very point to which the Hon. Member wishes to address himself, I do not know.
I do know that the Hon. Member for Mission-Port Moody (Mr. Rose) raised the same point. 1 would refer Hon. Members to Standing Order 18(2) which reads:
Government Orders shall be called and considered in such sequence as the government determines.
Canagrex

The Parliamentary Secretary to the Minister of Agriculture, on a point of order.


Marcel Dionne: Mr. Speaker, I rise on a point of order, because on the other side of the House they seem to be saying that the government does not know what kind of legislation to introduce this evening. 1 may remind the Chair that for hours this afternoon, they have been accusing the government of doing nothing for Canadian farmers, in referring to-


The Acting Speaker (Mr. Blaker):: Order. That is obviously political discussion. I recognize that other Members may wish to bring forth some points which would normally be called debate. However, I must address the point of order, or I have to see Hon. Members address the point of order, raised by the Hon. Member for Yukon (Mr. Nielsen) and the Hon. Member for Mission-Port Moody (Mr. Rose). 1 think that point refers to Standing Order 18(2).
If it is a different point, I have already asked the Hon. Member for Yukon to clarify it for me.


Erik Nielsen: Mr. Speaker, I will clarify it if it needs any clarification. I have already read the record where the Government set the order of business last Thursday as is the custom in this place, where the Government House Leader said that Bill C-129 was of such an urgent nature that it had to be dealt with then followed by Bill C-130. Obviously, the Government has not been ready earlier this evening to deal with the housing legislation-


The Acting Speaker (Mr. Blaker):: Order, please.


Erik Nielsen: Might I be allowed to speak?


The Acting Speaker (Mr. Blaker):: The Hon. Member is allowed, although he has twice now made comments which 1 think certainly approach a reflection on the Chair. There is a point of order on the floor. I have asked the Hon. Member whether it is to Standing Order 18(2) that he refers. I think it is a reasonable courtesy to ask the Hon. Member, who has now had a second chance at the same argument, to make himself clear. I would appreciate that.


Erik Nielsen: Mr. Speaker, I cannot be clearer than 1 have been. The Government has set order of business obviously, the Government is not ready and interference is being run. It is now 9:34. I therefore move:
That the House do now adjourn.


The Acting Speaker (Mr. Blaker):: I will now have to take consultation as to whether the Hon. Member can make a motion of adjournment in view of the fact that I have read the matters relating to Royal Assent.
I must say that my inclination is to believe that a motion to adjourn overrules any other proceeding whatsoever. However,

November 8, 1982
Canagrex
with matters proceeding in this direction, I will have to take consultation on this as well.
The Chair is advised that procedurally we are faced with a command of the Crown, and no order of the House will supersede that order. I will listen to such other Members of Parliament who may wish to raise some further argument in that regard. I wanted to advise Hon. Members what the advice being given to the Chair is.


Mark Willson Rose: Mr. Speaker, I do not want to cast any reflections on the Chair whatsoever. It is a very excellent Chair which is before us. However, since the Chair has asked for consultation, advice and comment, I would suggest that we cannot argue with Standing Order 18(2):
Government Orders shall be called and considered in such sequence as the government determines.
I do not think that there can be any serious argument mounted against that, except the one given by the Parliamentary Secretary last Thursday. The Parliamentary Secretary, in his outline of House business, last Thursday, did not even mention Bill C-85.


The Acting Speaker (Mr. Blaker):: Order, please. There should be some consistency in the procedure. I have already indicated that the motion to adjourn would supersede any other proceeding. Therefore, if there is to be any debate, it would have to address itself as to whether or not the motion to adjourn is in order, or whether that motion must at least be delayed until Royal Assent.
I think that is the only issue which the Chair can now face. It may be that other points of order could be raised, but I think I have to address the motion to adjourn raised by the Hon. Member for Yukon (Mr. Nielsen).


Mark Willson Rose: I was going to say that that was just my preamble, Mr. Speaker. I intended to agree with the Hon. Member for Yukon (Mr. Nielsen) that the motion to adjourn the House was definitely in order because of the commitments given by the Government House Leader (Mr. Pinard) last Thursday. Because of the commitment that was given, the Opposition was put in a very embarrassing position over the action of the Parliamentary Secretary to that Minister and his action this evening, that is, tabling Bill C-85 for debate with the Chair without letting the Opposition know. Therefore, I support the Hon. Member for Yukon.


The Acting Speaker (Mr. Blaker):: The Chair would like to hear argument concerning the motion to adjourn. Even then, I am not certain how far argument ought to proceed on that point. I want to make it clear that I have alerted Hon. Members that I was advised by the Table that this is a command of the Crown and, accordingly, it must take place before an actual adjournment can take place.
I do not mean, in any way, to diminish the advice of the Clerks of the Table when I say that I still have difficulty with the advice. I cannot understand the logic of where we would go from here. It sounds as though we might have Royal Assent, to
be immediately followed by a motion to adjourn. I would like to hear Hon. Members' advice in that regard.


Erik Nielsen: Since it is my point of order, and since it is 9:39, we still have six minutes before Black Rod is scheduled to appear here. With great respect for the erudition of the Table and its personnel, my submission to you, Sir, is that that Royal command does not occur until we hear the three raps on the door and see Black Rod and hear his words summoning us from this place to attend in the other place. I think that is the only reasonable course that the Chair should follow, to put the motion now.


David P. Smith: Mr. Speaker, in an effort to accommodate the other side, if Hon. Members are anxious to deal with Bill C-129 rather than go on to Bill C-85, if the House is prepared to give its consent-


Erik Nielsen: Your Honour should not be hearing this.


David P. Smith: -I believe that we could now go to Bill C-129. This, of course, would require that the House give its unanimous consent, because I believe Bill C-85 has already been called.


The Acting Speaker (Mr. Blaker):: I have warned Hon. Members several times that I have some very severe concerns with regard to any point of order or any debate which is not addressed to the one factor facing the Chair, that is, the motion to adjourn.


Erik Nielsen: That is right. No debate is allowed on that.


The Acting Speaker (Mr. Blaker):: The Hon. Member for Yukon (Mr. Nielsen) did the Chair the service of referring to great respect. I will do the same for the Table. I mention the great respect with which I hold its advice. I have some problems with the idea that there could be an indication to the House of Commons at some hour during the day, and it could be at four o'clock in the afternoon, and that that proceeding indicating that there would be Royal Assent at 9.45, many hours later, would prohibit Hon. Members from their time-honoured right to adjourn the House.


Erik Nielsen: No way.


Roderick Blaker: I do not see it. Accordingly, the motion to adjourn is acceptable. Call in the Members.


Erik Nielsen: Well, perhaps-you have to put the-


Jean-Jacques Blais: Mr. Speaker, before you make-Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Blaker):: I have invited Hon. Members to address the point of order.


Jean-Jacques Blais: Mr. Speaker, there was a request by you for guidance-


Erik Nielsen: He has made his ruling.
November 8, 1982


Jean-Jacques Blais: -as to whether the particular motion which was moved by the House leader for the Opposition was proper, and Your Honour had expressed doubts at that time.


Erik Nielsen: He made his ruling.


Jean-Jacques Blais: The Parliamentary Secretary to the House Leader rose and, in my view, he was going to address that point of order specifically. However, the point of order that he introduced in support of that particular consideration was not accepted by you, and he sat down. I sought your attention, Mr. Speaker, in order to be able to address the exact point which had been addressed by the Hon. Member for Yukon (Mr. Nielsen). Unfortunately, Your Honour did not recognize me in order for me to make that particular point.


Some Hon. Members:: Oh, oh!


Jean-Jacques Blais: I would like to make, at this time, Mr. Speaker-


The Acting Speaker (Mr. Blaker):: Order, please. If there has been an error on the part of the Chair, and I did not recognize the Minister of Supply and Services (Mr. Blais), I will do so, but I will not allow his intervention to so operate as to give rise to another point of order or allow any other Hon. Member to make another point of order so that at 9.45 p.m. we can no longer consider the motion to adjourn. That would be completely intolerable, considering the adjournment motion put by the Hon. Member for Yukon. I will therefore recognize the Minister of Supply and Services but, procedurally, I can only recognize him on the issue of the motion to adjourn which is before the House.


Jean-Jacques Blais: Mr. Speaker, the point I want to raise is very simple. I was in the House at 9.31, when you rose to announce that you were waiting for an order from the Senate for us to go to the other House for royal assent to be given to bills considered and passed in this House. That is a royal command. Mr. Speaker, considering the fact that we were going to receive a command of the Crown to attend royal assent after consideration of the bills in this House, and considering the fact that the opposition House leader could be assumed to be, I would not say in contempt of the Crown, since I would not want to be accused of using unparliamentary language, but nevertheless, Mr. Speaker, this is very excessive, and I am sure that after due reflexion, the opposition House leader, once he realizes that he was unnecessarily excessive, will withdraw his motion. Mr. Speaker, it is up to you to decide, and you are in fact obliged to do so, whether a member of the opposition has the right to ignore a royal command.


The Acting Speaker (Mr. Blaker):: Order, please. I shall accept the obligation described by the Minister of Supply and Services (Mr. Blais), namely, that it is the Chair's responsibility-
Canagrex

I must be fair concerning the motion to adjourn. I cannot go on. There is a clear issue. Hon. Members know well the argument expressed by the Minister of Supply and Services that a Royal command cannot be abrogated. That is the procedural issue. Hon. Members in the House and I, myself, are well aware that it is considered to be an absolute rule that a motion to adjourn cannot be debated. I must choose between the one and the other.


Jean-Jacques Blais: Well, if it is properly put-


The Acting Speaker (Mr. Blaker):: 1 find the motion to adjourn to be in order.
Those in favour will please-


Erik Nielsen: Question!


André Ouellet: Order, order!


Jean-Jacques Blais: That motion must be in order, Mr. Speaker.


Erik Nielsen: The question must be put.


André Ouellet: I rise on a point of order.


Erik Nielsen: Just put the question.


The Acting Speaker (Mr. Blaker):: I want no Black Rod at the door. I do not want that to happen, causing that to be an interferring factor. Can that be arranged?


Erik Nielsen: Just put the question.


The Acting Speaker (Mr. Blaker):: I regret to advise the Minister of Consumer and Corporate Affairs (Mr. Ouellet) that we have heard every aspect of the issue.


Some Hon. Members:: Oh, oh!


André Ouellet: Question of privilege!


The Acting Speaker (Mr. Blaker):: Does the Minister of Consumer and Corporate Affairs argue that he has a contribution to make, in which case-


Some Hon. Members:: No, no.


@Acting Speaker: We have heard those contributions. In order that there be no complaint, we will hear a last Hon. Member from the Government side. That will be the Minister of Consumer and Corporate Affairs. I will not tolerate any further contributions concerning the subject of the adjournment motion. I will recognize the Minister of Consumer and Corporate Affairs.


André Ouellet: Mr. Speaker, thank you for allowing me to speak in this debate. I realize that the Chair is faced with a difficult situation and that it has to rule on the matter now. I do not think the Chair could have checked all the precedents in this respect, and I believe that before making a decision in this

November 8, 1982
Canagrex
respect, the Chair should have found out whether there were any precedents that could provide some clarification. I think that when Hon. Members are summoned to the other House to receive a message from the Crown, they obviously have no choice but to accept the invitation. In fact, the invitation had been announced earlier, and obviously it is up to Parliament to allow for it and to avoid doing anything that might conflict with this invitation from the Crown. I believe that Hon. Members on both sides of the House have a responsibility to the Crown and that they should show respect for the Crown's invitation. I feel that in the circumstances, there is no alternative but to ensure that the business of the House continues up to the time when we go to the other House to receive the royal message. I believe that the Chair should have inquired about cases where a similar situation occurred in the past. I would ask him to read to us any precedents that may exist before ruling on the question.


The Acting Speaker (Mr. Blaker):: The Chair appreciates the advice of the Minister of Consumer and Corporate Affairs. During his remarks, further research in order to seek out precedents was carried out and further advice was made available to the Chair. Therefore, that part of his suggestion or comment has already been followed. The issue remains the same, that is to say, either there is a Royal command which shall take precedence over a motion to adjourn, or a motion to adjourn shall take precedence over any other activity of the House. I put to Hon. Members the reasoning of the Chair, for whatever it may be worth in future months, years or days, as long as I may last, and that is, if-


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


The Acting Speaker (Mr. Blaker):: -not very long, I sometimes think. If the very notification to the House by the Chair of a Royal Assent were to be given at 3.30 in the afternoon, it would mean that the House would be deprived of its traditional right to have a motion to adjourn put and dealt with at any time during the remainder of the parliamentary day. I cannot accept the logic of that. The motion on the floor is that this House do now adjourn.
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Blaker):: All those in favour will please say yea.


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


The Acting Speaker (Mr. Blaker):: In my opinion the nays have it.


Some Hon. Members:: On division.


The Acting Speaker (Mr. Blaker):: Motion negatived on division.
Hon. Members will be aware that the proceeding in hand, that of Royal Assent, is five minutes delayed.



[Stage Direction]
[ Translation]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, Mr. Deputy Speaker with the House went up to the Senate Chamber.
And being returned:
Mr. Deputy Speaker:: Order, please. I have the honour to inform the House that when the House did attend His Honour, the Deputy to His Excellency the Governor General in the Senate, His Honour was pleased to give in Her Majesty's name the Royal Assent to the following bill:
Bill C-128, An Act to provide supplementary borrowing authority (No. 2)- Chapter No. 127.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Robert Wenman (Fraser Valley West):: Mr. Speaker, Canadians are afraid, small business is afraid, the banks are afraid. The banks are tightening up credit markets, calling in loans-


William Alexander (Bill) Blaikie: The Tories are afraid.
November 8, 1982


Robert Lloyd Wenman: You are right, the Tories are afraid. The NDP is afraid. Canadians generally are afraid. They are afraid because business and jobs are falling and being lost around them again and again. As these credit markets tighten up, more real jobs are being lost and jobs that could have been created are not being created.
Banks are tight for money because, in conjunction with the federal Government, they are bailing out huge corporations that have proven themselves unsuccessful. How can we condone again and again and again corporations borrowing from the banks to bail themselves out, the Government guaranteeing those bailouts and further subsidizing them with extensive taxpayers' money?
One billion dollars for Dome Petroleum, $34 million for Maislin, millions more for Chrysler, Massey-Ferguson and Canadair tightens the money markets for small companies, making it impossible for them to borrow in order to sustain themselves in a cash flow crisis which at any other time would in fact not occur.
The reality is that as the consumptive market declines, as it has declined, consumption drops and cash flow falls with it. In spite of heavy inventories that many companies have, long records of successful borrowing and repayment, without that consumptive demand, as the cash flow falls and high inventories, we see a series of bankruptcies, and the number in fact increases. The Government attempts that solution again and again. The Government borrows more money; the Government taxes more. It takes more and more of the credit that should be available to small businesses. In effect, they have borrowed $21.2 billion so far this year. With a $23 billion deficit, they stand before us and threaten to borrow more.
The perverse practice of encouraging mismanagement and failure to the detriment of a healthy atmosphere for successful enterprise has caused severe damage to our industrial structure and economic fabric. We have become a guaranteed society rather than the just society promised by our Prime Minister (Mr. Trudeau). The Government will guarantee everything for unprofitable ventures.


William Alexander (Bill) Blaikie: If you are big enough.


Robert Lloyd Wenman: That's right, if you are big enough-the big ones, the big guys. The little guys; forget it!
This type of corporate cradle to the grave-the NDP understand about cradle to the grave-dependency breeds its own insecurity. Corporations are not living by the capitalist Darwinism of competition because they know that they will not be rewarded, but that they will be rewarded for incompetence by a Federal Government bailout.
How many jobs will be lost? How many jobs will not be created because of this Government's policy? We are facing the worst unemployment since 1936. Unemployment is rising, and even more jobs are disappearing. Last year, 1,900 jobs a day disappeared, largely because of the record number of small businesses that went into bankruptcy. Unemployment is running at 12.7 per cent nationally and 14.2 per cent in British Columbia. Small business would help to alleviate these grim
Adjournment Debate
statistics by creating new and permanent jobs. In the United States in the past six months the number of people with jobs has grown by 209,000. In Canada, the number of people with jobs in the same period dropped by 269,000. While the U.S. is growing, we are losing, and they were ahead in the race, to begin with.
If small businesses are not allowed access to credit, to expand, prosper and create jobs, how will Canadians find fulfilment in the work ethic that is inherent and vital to our culture? What is the Government doing to create real jobs? There is a great difference between real jobs and community development programs which create temporary jobs which may last 20 weeks or some small part of a year and then disappear.
As for the $1 million that is provided to my constituency in these programs, which may create from 60 to 80 jobs, I wonder what would happen if we divided that evenly, even in $10,000, $50,000 or $100,000 grants to a few individual, permanent businesses in our riding, businesses which would create real jobs. I have many examples of these businesses in my own riding.
One particular constituent had a proposal to computerize automobile repair facilities. That sounds like a good idea. He intended to capitalize on the high tech revolution. He proposed to create five real jobs. That may not be very many, but the needed capital was not forthcoming from the FDB, in spite of the inventory, and assets of this gentleman. The Bank asked about the cash flow. This in fact, would indicate that a guarantee is needed, with support for that small business.


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member but the time allotted to him has expired.


Mr. Jesse P. Flis (Parliamentary Secretary to Minister of Transport):: I am pleased, Mr. Speaker, that the Hon. Member is using Standing Order 40 to express his concerns this evening. I have read the Hon. Member's question of October 29 and I listened to his remarks tonight.
The Hon. Member for Fraser Valley West (Mr. Wenman) states a concern for jobs lost as a result of his assumption of reduced credit availability, but he completely ignores the negative employment consequences which would have arisen had the companies he mentioned, Dome, Maislin, Chrysler, Massey-Ferguson, and so on, not received financial support. Had there been no support for these companies, the Hon. Member would have been the first one to stand in his place tonight and complain that the Government was responsible for the resulting job losses.
Secondly, the Hon. Member makes no mention of the interest rate relief programs which were introduced over the last year to ease the burden for farmers, small-businessmen, first time home buyers and mortgage renewers. These programs have gone a good distance toward easing the pressures on these borrowers during very difficult times.

November 8, 1982
Adjournment Debate
Most importantly, however, the Hon. Member appears to have a confused notion of the mechanics of credit availability. He argues that the directing of funds toward support of certain companies will reduce the credit available to other borrowers and put upward pressure on interest rates. What he has failed to mention, Mr. Speaker, is that during part of the period that this financial assistance occurred, the bank rate dropped some 500 basis points from its peak in June. Mortgage rates are also down 500 basis points and other interest rates are following suit. This decline in interest rates is obviously making it easier, not harder, to borrow.
Why has this happened? Obviously, interest rate developments in the United States have had an important impact on domestic interest rates. As well, an important determinant of interest rates, and therefore of credit availability, is the overall balance between the demand for and supply of funds in Canada. During the recession, private-sector borrowing in Canada weakened substantially and the personal-sector savings rose to historically high levels. The supply of loanable funds increased markedly relative to the demand, and this has helped put downward pressure on interest rates. Under these circumstances, the directing of financial support to the private sector, in amounts which are very small relative to the total supply of credit, has not influenced interest rates and has therefore no significant influence on the total amount of credit available to other borrowers, as the Hon. Member would like to lead Canadians to believe.
Therefore, Mr. Speaker, I find it very disturbing that the Hon. Member would try to instill this kind of fear and no confidence in our country rather than trying to build trust, cooperation and work together to build confidence in this country so that we can have a recovery.


PUBLIC WORKS-CONSTRUCTION OF MONTREAL POSTAL TERMINAL. (B) QUERY RESPECTING DIFFICULTIES DURING CONSTRUCTION
Elmer MacIntosh MacKay: Mr. Speaker, on June 29, this year, a minor official of Public Works in St. John's, Newfoundland, was sentenced to prison for one year for having taken a $800 kick-back. Clearly, Sir, our system of justice was quite efficient in this particular case. By coincidence, the next day, June 30, I raised questions in the House, with the then Minister of Public Works, concerning the multimillion dollar debacle at the Montreal postal facilities. The Minister promised an answer, while the Minister responsible for the Canada Post Corporation said he had no indication that there was anything wrong. I later received a letter from the then Minister of Public Works who said, "problems have indeed occurred and have either been fully resolved or are in the process of resolution". That was a curious admission by the Minister.
On July 6 1 asked more questions of the then Minister of Public Works. He changed his tune slightly and said he was looking into the matter, but he hoped that if the facts I brought out were incorrect I would apologize. Getting nowhere
with the Minister, I wrote to the Auditor General on September 30, 1982 asking him to institute an audit of the construction of the Montreal postal facilities. On October 1 the Auditor General replied saying that he shared my concern about cost overruns on major projects. He also felt there was sufficient information on the problems associated with the project to enable appropriate action to be taken by those involved and those concerned. He recommended that the Standing Committee on Public Accounts of the House of Commons should proceed with an investigation.
Two days later, Mr. Speaker, I issued a press release again urging the Government to level with the public; if not, Members of Parliament should put additional information on the record. In the interim, Canada's daily newspapers had launched their own investigation and came to their own conclusions, calling the Montreal affair a "horror story" and claiming that millions were squandered. It appears that after four years of apparently intensive investigation by the Commercial Crime Branch of the RCMP, charges were laid against only three individuals who seem to be bit players. My concern, Sir, is with the main actors. Here are some major players and some questions to be answered.
How did a corporation named ABBDL and T. Pringle and Sons succeed, against the advice of the staff of Public Works, in securing a substantial contract-millions of dollars, Sir-as design consultants for the three postal terminal projects in Montreal? How were these design consultants able to claim up to 82 hours a week of work per employee performed on the project? How were the same design consultants able to claim $250,000 per month, each month, for the duration of the contract, over and above payroll costs?
How did a corporation named Techmont obtain a sizeable contract for soil studies at the sites, as it appears that this rather strange corporation had been created by the original directors of the design consultants who, of course, were ABBDL and so on?
Who bears the specific responsibility for making it possible to award work to a company named Claude Theberge and Associates who, on direct ministerial order, received a sizeable contract for interior design?
Who are the principles in the corporation named Signalis Inc., a corporation which was awarded a signage contract at the facility, in view of the fact that this corporation was a fully owned subsidiary of Claude Theberge and Associates and was created only three months before the contract was awarded?
I am not speaking about an $800 bribe, or a few thousand dollars, I am speaking of $50 million given-or paid-in the final analysis to these consultants-that is over $8 million more than the originally estimated total cost of the whole project.
Can the Department justify payments to Miron Construction of $162,000, Beaver Asphalt of $34,000 and Cegeco Construction of $343,000 for extra work done allegedly
November 8, 1982

because of lack of knowledge of soil conditions when several contracts had been previously awarded to other companies to study these very soil conditions on the sites?
Who are the principals behind Shawinigan Engineering and La Societe Dyname who were awarded, against the advice of the staff of Public Works, a sizeable contract, as project managers? There is also the question of the landscaping consultants, Schrieber-Williams with sizeable cost over-runs.
All of these are referred to, of course, in the report which was made available to The Globe and Mail in the spirit of the freedom of information legislation. That, at least, is a hopeful sign. The Public Works (Canada) follow-up audit of the map project in Montreal is where all these matters and others can be found.
1 could go on, Mr. Speaker, but my time is passing so I shall close by asking what the political and legal responsibilities are of the consecutive Ministers of Public Works under whose direction and guidance these shenanigans took place. I refer to colleagues and former colleagues such as the Hon. Jean-Eudes Dube, Hon. C. M. (Bud) Drury, Hon. Judd Buchanan and the Minister of Consumer and Corporate Affairs (Mr. Ouellet).
Where is the element of accountability, where tens of millions of dollars are lost in the same way as over $100 million was lost in the Consolidated Computer debacle? Where is the element of accountability?
To paraphrase the infamous Dr. Joseph Goebbels, if you want to get away with a lie, it had better be a big lie. In the same way, if you want to get away with mismanagement and patronage, it had better be on a large scale. That appears to be exactly what happened here, to the detriment of the taxpayers of Canada.
[ Translation]


Jean-Claude Malépart: Mr. Speaker, first of all, I would like to provide a more detailed answer to the question raised in the House of Commons by the member for Central Nova (Mr. MacKay) on June 30, regarding a large postal establishment in Montreal. Before going any further, I may add that the Hon. Member received a reply from the Minister of Public Works at the time (Mr. Cosgrove), which reads as follows, and 1 shall quote the letter in English. I hope my hon. colleague will bear with my English which is less than fluent.

Dear Mr. MacKay:
Re: Metropolitan Area Postal Plant Montreal. P.Q.
I refer to your question in the House on June 30, 1982 concerning possible problems with the construction of the Metropolitan Area Postal Plant in Montreal, Quebec.
As you know, in the construction of any project of this magnitude it is inevitable that problems could occur in any of the multitude of activities inherent to such a complex project during its implementation. With regard to this specific project, problems have indeed occurred and have either been fully resolved or are in the process of resolution.
Adjournment Debate
While it would be very time consuming and costly to gather the complex details of every problem, I would be happy to oblige you if you could be more precise as to the particular problem area of your concern.
Thank you very much for your interest.
Yours truly,
Paul Cosgrove.

Mr. Speaker, in 1974 Treasury Board approved the appropriation of $161 million in 1974 dollars for the construction of postal establishments in the Montreal area. The entire project included a new mail-sorting centre in downtown Montreal, an annex to the Laval postal station and a new bulk-mail routing centre and mail-sorting centre in Ville St. Laurent. The Treasury Board authorization allowed for the inflation factor and called for an overall cost of $212 million, a figure that was to be used as the basis for all subsequent estimates connected with the project. As the project materialized, it was found on the basis of certain data that it would have to be expanded, which resulted in a certain amount of delay. As a result, a new authorization was obtained from the Treasury Board in 1977, establishing a new budget for $241.6 million, and this plus indexation raised the total estimated cost to $254.3 million.


Mr. Deputy Speaker:: Order, please. I am sorry to interrupt the Parliamentary Secretary, but his time has expired.


CANADIAN NATIONAL RAILWAYS-TRANSFER OF REPAIR WORK FROM WINNIPEG TO MONTREAL
William Alexander (Bill) Blaikie: Mr. Speaker, on September 24 Wilson Parasiuk, the MLA for Transcona and I wrote to the Minister of Transport (Mr. Pepin) to express our concern about CN's announcement the previous week that it was considering the consolidation of its passenger repair work at the Point St. Charles shops in Montreal at the expense of the Transcona shops in Winnipeg. We reacted strongly to this possibility because we had reason to believe that CN was not really considering the matter with an open mind, but had really already made up its mind and was just going through the motions.
On September 29 Mr. LeClair, the President of CNR, wrote a letter to the Minister of Transport, and shortly thereafter Mr. LeClair acknowledged our letter of September 24, saying that he had written to the Minister of Transport and that we would likely be hearing from him shortly with a more detailed response to our concern.
As of today, November 8, over six weeks later, we have yet to hear from the Minister of Transport directly. When I asked him about this on November 1, he seemed to indicate that he had no intention of ever answering our letter. Instead the Minister of Transport referred to a letter from Mr. LeClair which he said he sent out to all concerned about the issue, a statement which is completely untrue. He has never sent me

November 8, 1982
Adjournment Debate
anything on this issue at all. I can only assume that the letter from Mr. LeClair to the Minister of Transport, which the Minister falsely claimed he sent out, is Mr. LeClair's letter of September 29 that I did not receive from the Minister, but a copy of which I had the opportunity to study.
The letter tried to cover up what CN was really doing. It tried to explain the reduction of coach work in Transcona because of a general reduction in coach work across the system as a result of the VIA cutbacks. The truth is otherwise. What is happening and what is at issue is that the share of the passenger work which Transcona traditionally received is projected to be drastically altered in 1983 from 40 per cent to 5 per cent which as I see it is a transfer, not just an adjustment. Mr. LeClair and the Minister of Transport have never denied these figures. Instead they have hidden behind generalities about continued high levels of employment at Transcona and vague promises of expanded freight work.
In Mr. LeClair's letter of September 29 he talked about the expansion of the wheel shop and the program to build 300 woodchip cars at Transcona. What he did not say was that both these programs were near completion and that therefore neither of them would in any way compensate for the loss of coach work in 1983 or in subsequent years. Some 230 jobs will be directly affected and another 70 or so indirectly, for a total of 300 jobs. At least a hundred of these jobs-those of the sheetmetal workers, pipefitters, electricians and machinists- could not be replaced by expanded freight work. Even carmen would be affected because, contrary to the ignorant remark of the Minister of Employment and Immigration (Mr. Axworthy) several weeks ago on this issue that there was no difference between upholstering a cushion and working on a boxcar, coach work is a source of preferred work for senior tradesmen. The Minister of Employment was invited to work under a boxcar for a while to clear his mind. In all likelihood he has never been inside a railway shop, never mind a boxcar.
There is a cover up going on. The Minister of Transport and the Minister of Employment are in cahoots with the new President of CNR who is determined to do to the rest of the railway what his predecessor did to CN Express and CN passenger service; that is destroy it, by forgetting that the railway is not like any other business and cannot be run just according to short-term profit margins. This is all the more reprehensible when it is being done by a Crown corporation.
What is even more reprehensible is the way the Minister of Employment is acting. He has deserted Winnipeg and is acting like a hypocrite, celebrating the new Air Canada facilities in Winnipeg while helping cover up this significant transfer of work out of Winnipeg; either that or he is a pathetic, ill-informed stooge of the CNR. In any case, it is about time he smartened up and got on side before we have a repeat of the
Air Canada overhaul work transfer from Winnipeg to Montreal, a transfer for which this time he will shoulder most of the blame.
Does the Parliamentary Secretary to the Minister of Transport (Mr. Flis) have anything to say in defence of his Minister? Does he have anything to say on this issue at all? We have not received any answers from anybody on this, and I am looking forward to seeing whether he will actually tell us something, or whether he will have a well-rehearsed statement designed to tell us absolutely nothing.


Jesse Philip Flis: Mr. Speaker, in all fairness to the Chamber I should refuse to reply to the Hon. Member opposite. Any Member who stands and calls a Minister of this House a hypocrite and a stooge should be asked to withdraw those statements. I should refuse to answer the Hon. Member unless he learns some decorum in the House. However, for the sake of and in fairness to his constituents, I will give some response on behalf of the Minister.
The Hon. Member continues to express concern over the employment levels at Transcona, in spite of reassurances by the Minister and CN. CN has made it clear that Transcona is and will continue to be a vital facility for the railway. CN is investing to improve the facility. For example, a $10 million expansion to the wheel repair shop is under way, and CN expects employment and work levels to grow over the long term.


William Alexander (Bill) Blaikie: That is over this year already.


Jesse Philip Flis: The recession has, of course, had an effect on the level of traffic, and hence on the amount of maintenance. Both railways have been put in a position to have temporary layoffs, but CN has and will continue to treat all its maintenance centres in the same way. It is not CN's intention to single out one of its facilities to bear the brunt of the effects of the recession.
The Hon. Member should know that the work done for VIA Rail at Transcona is only one of the many activities there. Some adjustments to the maintenance requirements for passenger cars may be necessary. However, any change must be seen in light of CN's assurance that it will have little impact on long-term employment levels at the Transcona shop.


William Alexander (Bill) Blaikie: You did not mention the coach work at all.
[ Translation]


Mr. Deputy Speaker:: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
At 10.26 p.m. the House adjourned, without question put, pursuant to Standing Order.

Tuesday, November 9, 1982