1983-05-09

Mr. Thomas Siddon (Richmond-South Delta) moved:: * That this House condemns the Government for imposing punitive tax measures; high energy and interest costs; and general economic uncertainty upon the mining sector, all of which have led to the loss of jobs in Canada and a loss of foreign markets and foreign exchange, and urges that a special committee of this House be struck to investigate and recommend immediate solutions to the problems facing the mining industry in Canada and the economic hardship and despair imposed upon thousands of Canadians in mining communities from coast to coast.
He said: Mr. Speaker, if this motion before the House today is adopted, we would see the creation of a special parliamentary committee to examine the very serious structural problems facing the Canadian mining industry today.
Naturally, the current slump in Canada's mineral production can be linked to a large extent with the world-wide economic recession. But many of the problems confronting our mines and their employees started over a decade ago and are unrelated to the recession. It is only during the past 18 months that this decline and the importance of this industry to Canada has become to visibly apparent to all Canadians because of the consequent widespread unemployment in the mining industry.
The result has been the hardship, the suffering, the uncertainty felt in mining communities across Canada, and the closing down of many company towns. These troubles began with the closing of Uranium City operations in northern Saskatchewan in December of 1981. Over subsequent months we have witnessed the decline of the potash industry in Saskatchewan, the asbestos industry in Quebec, iron ore in Quebec and northern Ontario, the closing of the major nickel mining and smelting operations in Sudbury for an extended period of time, the decline of our copper and molybdenum industries and, most recently and regrettably, the decline of our coal markets in Pacific Rim nations. This all translates into considerable human suffering and loss of income.
[DOT]	(1110)
I want to say at the beginning that stop-gap measures will not be enough to solve these problems. The use of Section 38 under the Unemployment Insurance Act, the concept of work sharing and even programs like ILAP will only be useful if
they lead to a meaningful investment in future plant and opportunity to produce and to market more competitively those bountiful mineral resources which we have throughout Canada.
These kinds of stop-gap measures, which I am sure the Minister will be speaking of in her rebuttal, will not affect more than a small number of those thousands and thousands of Canadian mine workers who are presently unemployed. They will be of little value unless they are geared to certain long-range goals which are established by the Government of Canada in consultation with the mining industry.
A special parliamentary committee, as provided for under the new House rules, would be the best way to tackle this issue. It would deal with the issue openly and could act with the urgency needed as a consequence of years of neglect, not only by the federal Government but by provincial Governments, in coming to grips with these very serious problems.
In Canada we have a great untapped potential in bountiful mineral reserves. It is inexcusable for the Parliament of Canada to overlook this important sector of our economy and the contribution that that mineral wealth can make to the wellbeing of all Canadians. And it is obvious that policy papers prepared by the bureaucracy are not the way to go towards solving this problem.
It has now been a year and two months since the Minister of State for Mines (Mrs. Erola) released her ill-fated policy paper, which at the time was called a discussion paper on mineral policy, yet nothing has come of that paper that we have been able to detect. In spite of a great and costly work effort by hundreds of officials in the Minister's Department, the policy paper missed the mark in terms of the real issues of priority that should have been addressed. It is not surprising that this paper drew harsh criticism from every quarter. However, the concern created by the proposed mineral policy resulted in a number of thoughtful and detailed responses. It would be tragic if these responses were ignored by the Minister as she puts her embarrassment under the rug, so to speak, with respect to this policy paper.
It is time that the Minister, the Government and her Department began listening to the real and long-range needs of the industry. There is a chronic need for a whole new approach to rejuvenating our mining industry. A parliamentary committee could map out the ground rules and objectives in this regard that should be followed by all Government departments, both at the federal and provincial levels. This would go a long way toward establishing the security and confidence that is essential to the growth of mining in Canada.

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For example, some of the issues which such a committee would address might fall into the following categories. Such a committee should look at the elements of production costs such as wages, the impact of labour relations on those wages, the costs of energy, the costs of capital, in particular the interest rates available to Canadian investors and industry in comparison with those interest rates available in other parts of the world, the burden of taxation and the royalties. All of these elements of production costs should be compared with our other major world competitors to find out, for example, why it is that they can put nickel on the market at a dollar a pound cheaper than the Canadian producer can market it.
We must look at the question of efficiency of production. Canada's mining industry prides itself in being on the leading edge of modern technology. However, are we keeping abreast of the new and emerging developments that are being exploited in new mines being opened up around the world? On the question of economies of scale, can we justify a lot of small, marginal mines or should we be looking to larger scale activities? How does that question of scale relate to practices in other countries? What about marginal deposits and the important costs of infrastructure such as hydro-electric power and transportation?
These matters must be addressed and put into the context of what our chief competitors are doing in the Iron Curtain countries, such as the Soviet Union, in Australia and in Third World nations which are increasingly eroding our share of world markets. We must find out why it is that the Canadian mining industry of recent times has not been able to attract sufficient investment capital. We must think about world marketing strategies and the potential for growth in the Canadian mining industry. My colleagues and I this morning, and later today, will deal with many of these subjects in detail in order to provide the catalyst and framework in which a parliamentary committee could take a detailed and, I believe, very helpful look at this serious problem.
Surely, an industry which accounts for almost 10 per cent of our Gross National Product deserves better than it has been receiving at the hands of this Government. Eighty per cent of our mineral production is diverted to export which makes a very important contribution to our balance of payments and our Gross National Product. Therefore we must not merely pick away at the problem in a piecemeal fashion, Mr. Speaker, and I hope that will not be the practice of Liberal Members opposite. We must look at this problem in a very constructive and long-range way in order to restore that tremendous potential which had been developed over many years in the North and in the far-flung regions of Canada which created that important pool of wealth for the benefit of all Canadians.
The impact of mining, Mr. Speaker, is felt in every region of our country. It accounts for 4.1 per cent of all capital and repair expenditures and one-fifth of all our national exports. It normally employs 135,000 workers, and 10 per cent of our total labour force through indirect employment, with a multiplier of some five-fold over the actual number of people working
in mines and smelters. The mining industry makes up 60 per cent of all railway freight which is handled in our country.
Total metal and mineral production in 1981-82 was over $31 billion, but in 1982 there was a substantial loss. There was a 20 per cent decline in the value of our mineral production largely going to export with consequent multimillion dollar losses, both for the major mining industries of Canada and the Treasury of Canada; because with major losses being declared, the flow of tax revenue to Government has been heavily depleted in the past fiscal year.
In the policy paper called "Economic Development for Canada in the 1980s", which accompanied the 1981 budget, the Government actually identified the importance of the mining industry and said that one of its leading economic priorities, to quote from that document, "lies in the development of Canada's rich bounty of natural resources". The quote continues;
To back this up, the Government is allocating over $60 billion to economic development expenditures in the period to 1981-86.
That was a year and a half ago, Mr. Speaker, and as yet, other than some make-work help-out programs, we have seen little action in getting on with the important job of developing a greater opportunity for Canada's mineral industries around the world. Therefore, Mr. Speaker, in fact it has not merely been a matter of passiveness. Certain federal policies have amounted to a virtual attack on Canada's mining industry. This Government has indulged in destructive tax policies and interventionist adventures which have seriously eroded the investment climate for this resource sector in general. Thousands of jobs have been lost as these Government actions brought a curtailment of mineral development during the 1970s. It is a particularly upsetting situation for those who recognize the potential of the industry and the contributions it has made to Canada's past prosperity.
Mining established a foothold and flourished in Canada during the post-war period, Mr. Speaker, thanks to federal tax policies which encouraged resource exploration and development; but these policies were abandoned in the late 1960s and the industry came into a period of decline. The major step down the road to the present insanity was a decision to scrap the tax-free period, the three-year front end tax-free period, for new mines. This tax policy, or to call it by its more correct term, "tax deferral", allowed mining companies to be tax free for the first three years of developing a new mining project, with the understanding that that inducement would be repaid to Government, or there would be some recognition by way of profit sharing which would be extended to the Government after the mine had been developed. That program allowed the elimination of front-end loading on struggling marginal industries which were trying to raise capital and finance major new capital investment.
My hon. and eminent colleague, the Hon. Member for Qu'Appelle-Moose Mountain (Mr. Hamilton), will talk in
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greater detail later about how this tax policy was introduced and how effective it was, and then how over a period of time, because of various attempts by various provincial Governments and the federal Government to grab more of the revenues from these resources, the benefit of this particular measure was lost. It has been replaced by heavy front-end taxation which provides a tremendous disincentitve to getting on with the development of new mining projects at a world competitive price structure.
Destructive taxation, Mr. Speaker, has had a dramatic effect beause it not only took money away from struggling mineral operations but also created an unstable and unfriendly investment climate for an industry which requires long-term planning. The harm done by federal policy was unfortunately often magnified by provincial Governments, such as the shortlived experiment with socialism in British Columbia. There are a lot of British Columbians who are, since Friday, thanking their lucky stars that that Party did not take hold of Government again in British Columbia. We were able to witness on Friday morning the resurgence in trading even on the Toronto Stock Exchange in mining stocks which have been on hold for six months because of the concern that an NDP Government might have been re-elected in that Province last week. The British Columbia mine workers and mine companies are, of course, still recovering from the royalty on mineral production which was in effect under the NDP Government from 1972 to 1975. That short period alone chased thousands of jobs and millions of investment dollars out of British Columbia.
Similarly, the private sector potash industry in Saskatchewan was brought to its knees by the absurd levels of taxation introduced by the NDP regime in that Province. While the federal Government cannot be blamed therefore for all of the misdeeds of its provincial counterparts, it must also be held partially accountable for the absence of any meaningful progress on federal-provincial agreements on mining taxation during the 1970s. Such an agreement could have spared miners and mining companies and Canadians generally the insanity of taxes being compounded on taxes and payments to the various levels of Government which approached 100 per cent of profits, and more in many cases. This was certainly the case for certain operations in Saskatchewan under the Bla-keney Government.
Aside from trying to co-ordinate mineral policy with the Provinces, Mr. Speaker, the federal Government should get its own act together. Although the work of M and R scientists is often laudable, the Department of Finance and other Government agencies have been hostile to mining. This has never been so evident as it was in the case of the two MacEachen budgets in November, 1981 and June, 1982. To quote one unnamed spokesman for the mining industry, "after the two MacEachen disasters anything would be welcome, but it is interesting that now they screwed it up, they are giving the economy back to business saying: 'Fix it up' ",
That is a characteristic, Mr. Speaker, of the budget which was introduced on April 19, which did take certain positive measures, as I am sure the Minister will be proclaiming in a few moments, which are designed to assist the mining industry.
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But there is no comment on the damage that was done by previous budgets with the reduction in the capital cost allowance, the non-deductibility of soft costs, the question of taxation of interest costs, tax on work in progress, and the tax audits being conducted vigorously against insider traders in mining companies and the general anti-investment thrust of previous Government policies.
It is commendable, Mr. Speaker, that in the budget of April 19 a decision was made to make the 33 1/3 per cent mining depletion allowance deductible against non-resource income for investors in the junior mining exploration companies. This is a welcome move, long overdue, but the benefits of the decision will be seriously undermined by the continuing unfair tax treatment of employees, officers and directors of junior mining companies, as I have already pointed out, where Revenue Canada is trying to tax as income the return on investment which was earned by consultants and professionals in exchange for their participation in junior mining companies. This sort of measure, which will be outlined further by one of my colleagues later today, has had a tremendous negative impact on the availability of investment capital to the mining industry.
The other matter the Minister will probably refer to relates to some changes in the investment tax credit and other initiatives contained in the April 19 budget. These are designed to provide an incentive to finance major capital projects in the mining sector. The only problem is that the industry is presently in a state of over capacity. Until we find a way to market our products more competitively internationally, no amount of additional investment capital will be able to deal with the long-range problem.
The most contentious of the initiatives of the Minister of Finance (Mr. Lalonde) in recent years is the plan to tax the housing and travel benefits traditionally received tax-free by workers in the North and other remote areas. This tax will add significantly to the cost of mining in northern Canada for both companies and, ultimately, employees. The decision last December to phase in the new taxes did nothing but reaffirm the industry's view that the Government is determined to destroy and weaken Canadian mining, particularly in the areas of Canada where new exploration and development are essential.
The assumption of the Minister of Finance that mine unions can negotiate contracts to make up for these lost benefits borders on the ridiculous. These unions are negotiating with companies which have been recording massive losses and which have often shut down their operations for extended periods, which is hardly an atmosphere for taxing increased benefits.
There are roughly 35,000 miners still off the job in Canada today, almost 30 per cent of the mining work force, despite the resumption of work in Sudbury and the promise of developments in the Hemlo gold field. The threat of the northern

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benefits tax remains as a major obstacle to the return to work for many of these workers.
The Minister of Finance and his colleagues have asserted that this tax will put northerners on an equal footing with other Canadians, but this ignores the reality that these benefits are essential to making life in the North comparable to that elsewhere. The tax also ignores the many long-term decisions which have been made by individuals and companies in the belief that this provision would not be changed.
As I mentioned before, a stable investment climate must be a major priority in order that the mining industry may prosper. However, instability has been the policy of the Government, not only through destructive tax policies, but also with its stand on foreign investment and Government involvement in the economy. The Foreign Investment Review Agency, which has influenced the ownership of operations such as the Cyprus Anvil mine in Faro, Yukon, remains a major concern to investors despite the Government's decision to back off on FIRA during the recession.
FIRA's unsettling effects in the investment community are augmented by the newly formed Canada Development Investment Corporation which hangs like a sword of Damocles over the heads of everyone in the private sector. The mining industry is acutely aware of the threat posed by this super holding company because of CDIC's 1980 takeover of the Kidd Creek mine near Timmins, Ontario. This little adventure, tied to the National Energy Program, resulted in $400 million in new debt being created and imposed on the once profitable mine.
Petro-Canada's expansionary activities can only be viewed with alarm by the mining industry, especially since Petro-Canada's involvement in coal production in northeastern British Columbia demonstrates its ability to become involved in the mining sector. Now the new Chairman of the Board of Westcoast Transmission, who happens to be the President of Petro-Canada, indicates that he is prepared to move in, take control of British Columbia's natural gas industry and intrude into other sectors of the economy as well.
Last year's purchase of BP interests show us that the Government has no intention of repairing the damage it has done to investor confidence over the years. These and other Government policies have had a staggering impact. As I pointed out at the beginning of my speech, in the late '60s, the start of the Trudeau years, we saw a move toward the harmful tax policies of today.
We have before us a rather bleak situation and much opportunity to improve upon it. We in this Party are suggesting today that a special committee of the House be initiated immediately and be mandated to travel the country to consult with industry and Government Departments at both federal and provincial levels. We need to come up with some constructive proposals for dealing with this serious problem as to why Canada is declining so miserably in its pursuit of competitive opportunities around the world.


Mr. Cullen:: Madam Speaker, the Hon. Member made reference to the three-year tax holiday. We know why that was done; it was in the interests of increasing the development of mines. The information I have is to the effect that so much high-grading was being done that it was not really in the longterm interests of the employees or of the mines that all of the high grade ore be taken out in the first three years during the tax holiday. They would then find themselves in difficulty down the road. Is this not in fact what occurred?


Thomas Edward Siddon: I think the situation is exactly opposite to what the Hon. member describes. The elimination of this tax holiday made it much less attractive to develop marginal or low-grade deposits. Therefore the emphasis in investment was directed even more strongly toward the development and exploitation of high-grade deposits. That ensured that we missed out on the opportunity to develop a lot of new low-grade deposits. As the record will show, it has been much more difficult to finance through investment those low-grade deposits until perhaps the initiatives of the budget of April 19.
I think the most important thing we must recognize is that if we do not make it attractive for investors to invest their cash when they know they will not make a return for at least three to five years on exploration and development of a new mine, then we will just not continue to expand the number of competitive sources which have a profound influence on Canada's ability to compete internationally in the sale of minerals.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I do not think the Hon. Member can have it both ways. In one breath he is telling us that it had a detrimental effect on the low-grade ore because miners were moving to the high-grade. I suggest, with respect, that the high-grade mines will operate whether there is a tax holiday there or not. The area we should be working on is the low-grade. These mines will not operate and will not be in place, but maybe encouragement of these low-grade deposits is not in the long-term interest of the employers. We might have been encouraging miners or people who were doing this kind of investing to get into the low-grade aspects for the three-year tax holiday time, have these miners working for that time frame, and then being unable to work after the tax-free holiday.


Thomas Edward Siddon: Mr. Speaker, I think the point is that as we expand our capacity to produce minerals, whether from high-grade or low-grade deposits, those developments will become profitable. Even granted the three-year tax holiday, there would be an implied contractual commitment that the benefit of that tax holiday would be paid back once profits were earned. It is ludicrous to suggest taxing paper profits. If the Hon. Member is suggesting that we allow only the high-grade deposits to proceed by denying the three-year tax benefit, which would essentially encourage competitive sources of production, then I cannot agree with him, Mr. Speaker. The whole purpose of the unloading of the front end of the tremendous investment burden that mining investors face is to get
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more capital into mining and to stop this nonsensical situation of taxing income before it is ever really earned.


Mr. Deans:: Mr. Speaker, the Hon. Member draws certain conclusions from British Columbia. In one instance he spoke about Saskatchewan, and in another instance he spoke about NDP Governments being somehow or other to blame for the downturn in the mining industry. There are two questions I have for the Hon. Member. How does he explain the difficulties the mining industry has in the Province of Ontario, where the NDP has never been the Government?


Mr. McDermid:: And never will be.


Ian Deans: Well, who knows about that? That is not a big problem, frankly. Second, the Hon. Member speaks about the need to create a good climate in which investors can invest their money. What does he think of the climate in Chile, Argentina, Guatemala or Indonesia where these same investors are investing who invest in Canada? They have to go there and deal with people who stand with a gun at their head in order to make deals. They do not seem to be withdrawing with the possible exception of Guatemala. They do not seem to be finding any difficulty dealing there. Does the Hon. Member really think that anyone believes his unadulterated crap?


Some Hon. Members:: Order!


John Horton McDermid: Back to the fire department.


Some Hon. Members:: Oh, oh!


Thomas Edward Siddon: Mr. Speaker, the Hon. Member for Hamilton Mountain (Mr. Deans) belies a great unease when he has to finish his question with an arrogant adjective such as that. I would not mind if the Hon. Member would allow me to answer the questions he has put.
In the case of the Province of Ontario I think it is fair to say that many people in the mining community are not terribly pleased with the excessive bureaucracy that has to do with the trading in shares of mining stocks on the Toronto Stock Exchange compared to the situation, I might add, on the Vancouver Stock Exchange which has experienced record trading in these areas in recent months. That is not to say you can draw any valid parallels between the state of affairs in the Provinces of Saskatchewan or British Columbia under NDP Governments-and I might add Manitoba-and the situation in Ontario. I do not see the Ontario Government putting aside massive reserves of land, establishing Crown corporations to mine the minerals of Ontario in the name of the Crown and establishing a cartel and participating in a cartel in the marketing of those minerals, as was the case with the Province of Saskatchewan. I do not see the Province of Ontario driving out investment capital from the mining industry. In fact, if you look at the situation in Hemlo in the gold fields in the Timmins area, Mr. Speaker, you will see a tremendous amount of enthusiasm and excitement over the development of new mining ventures there.
I do not think it is fair to suggest that the Conservative Government of Ontario is practising in any way the types of
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socialist or interventionist measures that have become commonplace with NDP provincial Governments in western Canada.
If other Members would like to ask additional questions I will sit down, but I have one other question to answer which the Hon. Member asked me. It had to do with the situation in other parts of the world. I agree that it would be desirable for Canadian mining companies to keep their investment dollars in Canada, to enjoy a fair return on those investments and keep the jobs in Canada if our taxation and royalty structures and the predictability of Government regulations were such that they would. It is interesting that companies have been induced to take their investment elsewhere because of the negative policies of federal and provincial Governments with regard to the mining industry.
It is even more appalling to learn, as we did last week, that the Canadian Government is heavily engaged in financing mining ventures in many of these countries through the Canadian Export Development Corporation, CIDA, and other initiatives. I would like to know what my NDP friends think about the following example. The Minister of State for International Trade (Mr. Regan) announced on May 4, 1983 that the Canadian Government would be heavily assisting the development of a major new coal mine in Indonesia. He was present in Jakarta for the signing of the contract under which Canadian companies would get some spin-off work in relation to developing this coal mining project in South Sumatra.
The interesting facet of this story is that there is a policy which the Indonesian Government implements that says it cannot accept any investment in a venture of this sort unless there is an equal amount of money spent on contracts with the Indonesian Government in relation to any benefits that are taken out of the country. I think the Hon. Member for Hamilton Mountain is well aware of that. Here we have the Canadian Government setting up a new coal mine in South Sumatra which will produce by 1985 nine million tonnes of coal a year, which is equivalent to the entire production of the northeast coal field in British Columbia. The Indonesian Government says: "We welcome your assistance and the involvement of your mining companies but the condition is that you have to allow us to win Government contracts to import Indonesian goods to Canada", equal to the value of the investment we are making there. That seems rather ludicrous, Mr. Speaker, because there is no net gain for Canada. In fact, there is a net loss for Canada. We are adding another nine million tonnes a year production capacity in another country and the Canadian Government is aiding and abetting the loss of Canadian jobs in the process.


Mr. Bloomfield:: Mr. Speaker, the Hon. Member has detailed the large tax increases that have been collected by the Provinces from the mining industry and he has called for federal intervention into mineral taxation. Would he describe the methods that he favours for imposing such intervention on
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the Provinces, which under the Canadian Constitution own the resources within their boundaries?


John Horton McDermid: Tell that to Newfoundland.


Thomas Edward Siddon: Mr. Speaker, I recognize the constitutional provision under Section 92 of the old British North America Act, now the Canada Act, 1982. There was nothing in my speech which suggested any form of intervention. It belies the thought processes of Government Members that they tend to think always in terms of intervention. I did not use the word "intervention" except in regard to the practices of the Liberal Government over the past 14 years. I used the term "consultation" and suggested that we establish or strike a parliamentary committee.
It is high time the elected Members of this House got down to talking with their counterparts in provincial legislatures and got the bureaucrats out of a process which has led to such a hodge-podge and complex system of taxation and royalties that the industry has no room in which to breathe. I was not talking about intervention. I was talking about consultation and some really effective work for a change by


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member but the time allotted for questions and answers has expired.


Mr. Sid Parker (Kootenay East-Revelstoke):: Mr. Speaker, I am pleased to rise and take part today in the debate on the motion that in part urges a special committee of this House be struck to investigate and recommend immediate solutions to the problems facing the mining industry and the workers in Canada. I think we should go beyond that to the communities involved in the Canadian mining industry because they are the ones most affected by the decisions being made.
I would like to refer to some of the happenings in my riding of Kootenay East-Revelstoke regarding decisions of the Government of Canada. The Minister is well aware of these matters as I have approached her in that regard. First I refer to a statement made by Senator Olson on August 6, 1980 respecting the development of northeast coal. In part he said:
We recognized that federal financial assistance to facilitate the development of northeast coal was a sound investment for Canadians as long as our contribution reflected a responsible and reasonable level of potentially recoverable costs on the project. The current proposal from British Columbia, however, provides no indication that either Government could directly recover its investment.
Development of the northeast British Columbia coal resource would of course be of great advantage to the buyers... since it would diversify their sources and provide security of supply. Quite plainly, the coal-buying interests must be prepared to pay a higher price per tonne if they are to benefit from accelerated development of this Canadian resource.
Also Senator Olson pointed out that there were already large quantities of marketable high-grade metallurgical coal available from British Columbian Albertan mines for shipment to Japan at prevailing world prices. Then in April, 1981 an agreement was struck between British Columbia and the federal Government. At that time Senator Bud Olson said:
I am here on behalf of Prime Minister Trudeau and the Government of Canada to congratulate the Canadian and Japanese companies on their
successful negotiation of the largest export agreements ever achieved between our two countries. I endorse Mr. Nemoto's remarks both now and during the negotiations of the importance of these agreements to the healthy and growing trade relationship between Canada and Japan.
It has been an honour for me to lead the federal Government's involvement in this project. I had the constant encouragement and support of the Minister of Transport, ... who, while he cannot be here today, has ensured the full cooperation of the National Harbours Board and the Canadian National Railways.
These are the kinds of changes the Government has made, without consulting the communities or the coal industries involved, that have created tremendous hardship. Since that time, 2,000 coal workers in my riding have been faced with a six-week lay-off. Also they were notified of another pending four-week lay-off. They are supplying the same markets which the northeast will supply. Not only is the Minister and the Government contributing almost $1 billion in infrastructure for northeast coal, but they will devastate the supply of southeast coal.
They have also appointed a marketing agency headed by a former Minister of the House, Ron Basford, at $800 per day and with a full-time office in Vancouver which will be in charge of the marketing of coal from the northeast. On the board of directors of that marketing board will be a Minister of the Province of British Columbia, the Minister of State for Economic Development (Mr. Johnston), his Deputy Minister, the head of British Columbia Hydro, the head of CN Railways and representatives from the new community of Tumbler Ridge.
This structure is being put in place to ensure the marketing of northeast coal. How does the Minister expect southeast coal to compete in the same markets with that structure in Vancouver to carry out discussions with foreign buyers? This is a very serious matter. I think the Government and the task force for which the Conservative Party is calling can do some good for the communities concerned. As the mining critic for the New Democratic Party, I support the idea of a committee travelling across the country and the inclusion of input from the people and communities involved.
At this point I would like to speak about the Iron Ore Company of Canada in Schefferville which has created a very serious problem for thousands of its laid off workers. As we know, Brian Mulroney is the head of the company. It has offered its workers 50 per cent of their costs to leave the area.


An Hon. Member:: A generous offer.


Sidney James Parker: It may sound like a generous offer but, as the Conservatives know, the only way out of Schefferville is by travelling on the railway of the Iron Ore Company. It will receive back the very funding it gave the workers, and in fact is asking the federal Government to come in and make up any difference. We have a responsibility to these communities and workers, but the company officials have an even greater responsibility than just turning their backs and saying that they have investments in South America, South Africa and Guatemala and that they are supplying their markets from those areas.
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The Hon. Member was quite correct when he mentioned that the federal Government was spending moneys in other countries. Our Party brought that very fact before the House and questioned the Government as to why these development moneys were being spent in other countries, particularly at a time when there were problems in our mining industries.
I want to discuss another matter with regard to coal. Approximately 13 million to 14 million tonnes of coal are shipped to Japan from the Kootenays each year. Four mining companies are involved in the shipment. It is a very important commodity for the coal fields in my riding. Because there have been such discussions, I know that the Government is aware that Ontario Hydro purchases in the neighbourhood of 14 million tonnes of coal a year from the Americans; 14 million tonnes of coal come from the United States to Canada for Ontario Hydro. I want to emphasize very clearly that the amount of toxins coming from American coal is seven times greater than that from Canadian coal. We in the House talk about acid rain, and I want to say to the Minister of the Environment (Mr. Roberts) that it is time that we started to look at what is happening right here in Canada.
The Conservative Party has criticized the mining policies of the New Democratic Party in British Columbia. The Conservative Party may have had just cause to complain when the policies were first implemented in British Columbia. Those policies were drafted and laid out. Do you know from where the New Democratic Party got those policies? It looked at Cominco, part of the free entreprise market, to see how Cominco made deals with the mining industry. The New Democratic Party in British Columbia felt that if the mining industry was prepared to give Cominco that kind of revenue in order to use their mining facilities and their mining land, then it should be prepared to give that to the Province. That is the policy that was laid out. We found out very clearly that it was not working.
The New Democratic Party implemented a new policy and a mine was started up in Kamloops under the new policy. That mine is still operating and we are able-


Some Hon. Members:: No, it is not.


Sidney James Parker: They were shut down from a period of time but they are operating. So let us not have any more of the scare tactics that the Conservatives and the Social Credit Government are trying to bring about with regard to industry in Canada.
The Iron Ore Company, Mr. Speaker, gave generous separation allowances to about 300 workers in Schefferville but has completely refused to do anything for the 700 to 800 other employees who have lost their jobs in Sept-Iles where the ore was concentrated. The company has absolutely refused to consider these employees as permanently laid off. Railway workers are also losing their jobs. This is why I say that we cannot zero in on only the mining companies and the Government's activities. We must also look at the municipalities and the people involved.
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Our caucus had occasion to meet with a delegation from Faro in the Yukon. The Government has taken action to alleviate some of their problems. They are doing some exploratory work in a small way, taking off some of the overburden, and that has put some people back to work. I want to say how sad I was as I sat on that committee to hear representatives from the Chamber of Commerce, the business sector and the working sector literally destroying their whole background as their community is dying around them. This is all because of the kinds of mining policies and regulations that are laid out and the programs that are followed. As we in this Party have said, it is time we implement an industrial policy for the country that not only looks at the potential in various parts of Canada but also at the mining industry to ensure a long lasting and stable work force in these areas.
I believe the Member from the Conservative Party who spoke earlier indicated that the taxation policies the Government has brought in with regard to taxation on northern benefits for workers in their bunkhouses has created tremendous hardships in the mining sector. I have asked the Minister to include northern benefits in my riding, an area where people live purposely to serve the mining industry.
As I have suggested, the problem is that the Government will not allow these people benefits under the northern benefits tax. I think that is ridiculous. When a young single person leaves his home to work in an outlying area and stays in a bunkhouse, he does not get the same benefits as does a married man. The married man who stays in that bunkhouse is able to show that as his second home, whereas the single fellow, while he may have residence in another area, will still be taxed as much as $23 a day for staying in that facility.
I want to say that these are the kinds of hardships the Government has created. The Minister may laugh, but I want to tell her that those workers are finding it very, very difficult to communicate and to go back and forth. For example, a single man who was charged under the Unemployment Insurance Act paid $1,000 to come out from the North and protect his rights at trial and then go back again. He was found not guilty, but it cost him $1,000 to go back to his home area to protect his legal rights. Those are the kinds of hardships that are experienced by workers in the northern areas. These hardships must be recognized. The planned new taxation on those benefits will create tremendous hardships for people in the mining industry.
We support the Opposition Party's proposal today, Mr. Speaker. I hope that the Government will look seriously at this proposal to set up a committee that will go across the country to meet with the communities, the workers, the mining industry and the Provinces to come up with a solution that will be of benefit to all.


Mr. Blenkarn:: Mr. Speaker, I believe the Hon. Member complained about certain Government investment in railway infrastructure and ports in northeast British Columbia,

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indicating that that was probably taking jobs away from Canadians. Does he not believe that the investment in that infrastructure will make it possible to find new mining resource potential in northeast British Columbia and make that new resource possible, or does he think that the investment in that infrastructure is a total waste of time?


Sidney James Parker: No, Mr. Speaker, far from it. We in this Party believe that there is a time for development of the North, but the time is not now. At this time thousands of people are out of work. To build a new community at this time that will compete against one that is already in existence will create a hardship for the existing community. We would much prefer to see that $1 billion allocated to other areas at this time, such as upgrading the railways with firm agreements to ensure that we will be able to supply the market that we have. When the economy recovers and we start to produce, then would be the time to look at that infrastructure.


Donald Alex Blenkarn: Do I gather from what the Hon. Member is saying that when we have all sorts of unemployment, investment is bad, that we should not use Government funds to build a future for Canada, to open the roads to new resources? Is that his vision of the country? Is his vision that in bad times we should restrict our activity, not open up new opportunities or new resources but just hone in on present resources? Does he believe that is the way we should go in building this country?


Sidney James Parker: Mr. Speaker I thought I made it very clear that I do not believe that is a time to develop coal fields in another area in competition with existing communities. Three existing communities can supply the market. To put up $1 billion for expansion in order to create a good atmosphere for our competitors to come into the market, where they can buy it cheaper, where it is northeast against southeast and southeast against northeast, is wrong. We do not believe in that kind of financing. It gives competitors in other countries an advantage.


Mr. Nickerson:: Mr. Speaker, I was rather shocked to hear the exposition of the New Democratic Party's northern development policy. I am pleased that the New Democratic Party did not exist at the time of Confederation or we would still be waiting for a railroad to be built between eastern Canada and British Columbia.
In all seriousness, I do have a question for the Hon. Member. He complained that mines were being closed. An ore body being a wasting asset, that is inevitable with any mine. When you take the first tonne of ore out, the days of that mine are numbered. Is the Hon. Member proposing that we should not open mines because at some point in time they are going to be closed? If that is not the case, how would he solve the problem of dislocations that come about as a result of a mine closure?


Sidney James Parker: In all sincerity, I think the Hon. Member is losing sight of what we are talking about today. We must have diversity for these communities. We must have a plan for a
community that is beginning to phase out its mining facilities. That is the kind of industrial plan that we in this Party are talking about.
We must be able to see the potential of that area. We must not just walk away from it as the Conservatives would. Their big financiers just walk away. They give 50 per cent to the people, tell them to leave and let the community die. We do not believe in that. We believe in an industrial plan that will lay the structures to carry on the community through another phase, contributing to our country in a strong economic way. However, this needs planning, not the greed of developers who take the iron ore out of the ground and walk away with the profits with no concern for the community.


Mr. Deputy Speaker:: Are there any further questions or comments?


Hon. Judy Erola (Minister of State (Mines)):: Mr. Speaker, I welcome the opportunity today to speak at some length on the mineral sector and detail measures that this Government has taken and is taking to ensure the industry makes its maximum contribution to the Canadian economy and the Canadian people. I am particularly pleased to do so today. This debate is long overdue. It is the first on this subject in this Parliament and it gives me an opportunity to debate with Members of the House the state of the industry and the role of the federal Government.
I would like to reiterate that on Friday of last week I spent the entire day in discussion with the provincial mines Ministers. It may come as a surprise to Members of the Opposition, but five provincial Ministers present paid tribute to the role of the federal Government and how effective we have been, particularly in the last 18 months of the downturn.
The Hon. Member for Richmond-South Delta (Mr. Siddon) made reference to ore bodies such as Uranium City. I found that an unfortunate reference in many ways because he was defeating his argument. He and the Member for Western Arctic (Mr. Nickerson), who is a very knowledgeable miner, and I say that in a very positive sense, know that an ore body is a finite thing. That ore body declines to a point where it is no longer mineable. This is something that Governments- federal, provincial and municipal-must come to grips with. We have dealt with this over the past year.
It would be healthier if I gave some background as to where we are and where we are going. The Hon. Member is quite right, the mineral industry is one of the basic underpinnings of our economy. Excluding fuels, the value of primary metal production in Canada for 1982 was almost $11 billion. A high proportion of this value is exported, nearly 80 per cent, and is a major earner of foreign exchange. Residents of some 175 single-industry communities depend primarily on minerals for their livelihood. Therefore I share with the Hon. Member his concern that the industry continue in a healthy state. I assure the House that the Government also shares its concern.
May 9, 1983

The industry has witnessed a three-year period of declining world-wide demand for its products, a decline that is unprecedented, at least since the Great Depression. In 1982 the value of Canadian mineral production was down by nearly 18 per cent from 1981, which in itself was marginally below the year prior, 1980.
The cutback in Canadian production was reflected in cutbacks in the mining industry of many other mineral-producing countries as well. The reduction led inevitably to temporary loss of employment for many workers in the industry. Depressed world prices in some cases hastened the closure of marginal mines, leading to what might be termed premature economic exhaustion of the ore body, although physical exhaustion of the mineral had not yet occurred. Therefore there were some permanent lay-offs as well.
This must be said. The facts of the mineral exploration are exceptionally vigorous. That may come as somewhat of a surprise. Investment in new mines and an expansion of existing mines is taking place, in particular for gold, potash and in some cases for base metals as well. Therefore the news is not all bad. Also a cyclic recovery is underway which will lead to the gradual hehiring of laid-off workers.
I mentioned in my preamble that I met with Ministers responsible for mines in the Provinces and the Territories as well and the mood was far from pessimistic. During the course of this debate today, I am sure the House will hear further details of some of the expansions and bright spots that are occurring in Canada.
The federal Government has recognized the recent difficulties of the industry and the impact on those who work in the industry. It has moved resolutely to ameliorate the short-term problems and to lay a firm foundation for future success in the face of continuing change in the world around us.
In the few minutes I have today I intend to demonstrate that the resolution before the House is ill-founded in every specific way. I therefore propose to proceed by addressing briefly each issue mentioned in the resolution and to leave it to other speakers to provide additional information on the Government's programs.
Let us look first at taxation. The Government has not imposed punitive taxation on the mineral sector. The mineral policy discussion paper prepared by my officials, to which the Hon. Member for Richmond-South Delta referred, showed that while the taxes paid by mining as a percentage of profits increased during the early '70s, the bulk of the taxes went to the Provinces. The federal share of mineral sector taxes actually fell from 46 per cent a share in 1969 to 38 per cent in 1978. I will be very happy to show those figures to the Hon. Member. What is of supreme importance is that in this period the provincial share of taxation grew from 54 per cent to 62 per cent.
I suggest that a parliamentary task force would not solve this problem. I believe the Hon. Member should know that we, through Energy, Mines and Resources and through my Department, have a federal-provincial task force in place
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looking at the tax structure in this country. There has been a very healthy exchange of views and it has resulted in some of the tax measures which the Minister of Finance (Mr. Lalonde) announced just a couple of weeks ago. These are tax measures which were welcomed by the industry, and 1 might add by the Provinces.
Moreover, I believe it is important to note that the proportion of profits paid as tax by firms in the mining sector is strictly comparable to that paid by manufacturing and other sectors. Notwithstanding this equitable treatment of the industry as a whole within Canada, the Government has recognized the special contribution and problems of the junior exploration industry and has provided important tax incentives in its most recent budget to permit the easier accumulation of pools of capital and their application to mineral exploration and development. The Hon. Member for Richmond-South Delta referred to them briefly; I will expand on them.
The deductibility of earned depletion associated with mine exploration expenditures from any income will encourage increased investment in grassroots mining exploration. And this was done, as I said, as a result of our internal task force, with a great deal of help from some of the professional organizations, the Mining Association of Canada and the Prospectors and Developers' Association, with whom we liaise regularly. This benefit, which will be available to all taxpayers including mining companies, individuals and non-mining firms, will be particularly helpful to junior mining companies in raising funds for exploration, especially through the flow-through shares. I am surprised that we did not receive more support than what was received from the Hon. Member when he mentioned it.
The Minister of Finance also acted to adjust the federal investment tax credit provisions of the Income Tax Act to increase its efficiency and make the credit more equitable. A number of other changes in the budget will not only help to achieve these goals but should also encourage junior mining companies to bring their discoveries into production.
Furthermore, the budget recognized the problems associated with the special characteristics of the mineral industry by providing that non-capital, that is, business losses, will now be allowed a three-year carryback and a seven-year carryforward. This will help juniors to bring their initial mine into production, particularly where start-up losses are incurred in the preproduction period due to interest charges on any debt employed. The extended loss carryovers, of course, will be of great value to the entire mining industry due to its cyclical nature.
Then, to ensure that our mineral industry is treated equitably, not only relative to other Canadian industries but also relative to the mineral sectors in other countries, the Government has announced the launching of a major international comparative study of the tax treatment of the resource industry in Canada and abroad.
I find it rather interesting to note, on a visit to another country just a week ago, that we were held up as a shining example of how a Government has made the best use of the taxation system to develop our resource industry. I might add,
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on the subject of tax audits, particularly in British Columbia, that yes, there have been problems which were brought to my attention several months ago; and these problems are now being addressed by my officials and by officials at Revenue Canada. I would like to congratulate prospectors and developers of that area, and also members of the Vancouver Stock Exchange, who were most efficient and courageous in arranging these meetings.
On the subject of northern benefits, I would like to point out to the Hon. Member from Kootenay that those benefits are not being taxed this year. The moratorium is in effect this year. In 1984 they will be phased in at a 25 per cent level and there is a cap. I am sure that this fact is not being conveyed to the general public, especially those affected, and I believe it would be very useful for Hon. Members of this House to know, particularly those who are not truly aware of how these measures are going to be applied and how unfair they were to other people in those parts of the country where isolation benefits existed and how unfair they were to those people who were receiving no benefits at all. It was a subject I discussed at some length with the mines and territorial Ministers, and I might point out to Hon. Members of this House that the territorial Ministers were not in favour of the existing system because of its inequity to the people who live within their boundaries. We are going to pursue the possibility of looking at other measures, not necessarily through the taxation system but other economic measures which will lead to the stable development of those areas. This is something I endorse heartily.
With respect to energy and interest costs, the Canadian mineral sector has indeed been affected in recent years by oil price shocks and by high interest rates, as has virtually industry in every industrialized country. Due to its remote locations, much of the mineral industry is subject to higher transportation charges on fuels laid down at those locations. In addition, the basic price of energy increased dramatically in the 1970s. Rather than being indifferent to these problems, however, the Government has acted over several years to cushion the impact of world energy price increases on the industry and is currently working with the producing Provinces to ensure that Canadian industry enjoys stable energy supplies at equitable prices. Again, I would like to point out to the Hon. Member that we have been working very closely with the mineral industry on an energy task force and the work of the industry has been exceptional in reducing the energy costs, specifically of the mining industry.
All industrialized countries have been grappling with elevated interest rates as they struggle to contain inflation. The Government's program of economic management has now brought interest rates to their lowest levels in several years. This relief has already had the effect of reducing excessive debt servicing payments which only a few months ago threatened the very survival of our major mining companies. The industry on the whole, therefore, is looking forward to a slow but steady recovery.
What has happened in the last 18 months? What has this Government done? What is our record on job loss and job creation? It is very good. The Hon. Member for Richmond-South Delta says that short-term projects such as Section 38 and NEED are ineffectual. I can tell him that I speak from direct experience. I come from an area where thousands of men and women were laid off. With the use of Section 38 and NEED we came through a very difficult winter very successfully. These people are back to work now. Without these programs, the severity and impact would have been far greater. In fact, if he were to visit my community, my riding, he would find an industry in good health and a community in very good health. That is a record of which I am extremely proud. This Government responded very sensitively and very flexibly by the use of Section 38. We created the NEED Program and, in our recent budget, the Special Recovery Program, which will create a large number of jobs.
Officials of Energy, Mines and Resources have closely monitored the situation and ensured that employees and community groups have been fully informed of the application of available job-creation programs to the mineral sector. As a result of this effort and of co-operation with certain Provinces-and I must say that the Provinces of British Coumbia and Ontario have been particularly flexible and co-operative- the record of use of these programs to relieve distress in mining communities has been outstanding. My officials have prepared an information package to assist the formulation and approval of mineral sector job-creation proposals. With the unanimous consent of the House I would like to table these proposals.


Mr. Deputy Speaker:: Is there agreement for the Hon. Minister to table the documents to which she refers?


Some Hon. Members:: Agreed.


Judith A. Erola: Thank you. An important feature of the job-creation programs in existence today is that they permit nonproduction work on mining properties, which will have the effect of improving the long-term productivity and cost performance of these operations. We found that to be extremely useful. As Hon. Members are aware, especially those in the critics' position, many, many single-industry towns are just that. It was important to put these people to work in areas where they would be indeed increasing the productivity of the operations. We have been able to do that. I suggest, Mr. Speaker, that without these measures and the other vital provisions of Canada's Unemployment Insurance system there is little doubt that the current recession would have been a full-fledged depression.
I would like now to deal with foreign markets and foreign exchange. For many mineral commodities some of Canada's mines and plants are among the world's lowest cost producers. Canada's mining companies have demonstrated their marketing skills over many, many years. They are outstanding. Thus
May 9, 1983

it is no accident that Canada became the world's largest nonfuel mineral exporter.
However, in recent years there has been evidence of a gradual erosion of that position. The explanation lies in structural changes which have taken place in world mineral markets over the past years. The following factors do stand out: procurement policies by resource deficient countries such as France, West Germany, Japan and to some extent the United States have led to offshore mineral investment and preferential trade ties. Optimistic growth scenarios and concessional financing by international institutions have led to excess mineral investment in less developed countries, often with involvement by the host Government. Once in place, such facilities often provide a high proportion of that country's employment and foreign earnings. That was painfully obvious during this last recession.
Now, the Government's response to this situation has been two-fold. First, to ensure that Canada maintains or increases its share of free mineral markets, the Government is determined that Canadian mineral production costs must be held to a minimum by discovery of superior deposits and by use of the best technology and other measures to increase productivity. I am announcing a specific mineral technology program today. I am most pleased to do so; the timing is most advantageous.
Second, the Government is committed to ensuring that international institutional rigidities which discriminate against Canadian mineral exports are reduced. For example, officials of Energy, Mines and Resources have conducted international fact finding missions relating to specific products. A cooperative study has been launched with the Mining Association of Canada to identify cases of non-tariff discriminatory trade policy and subsidized production. Finally, Canadian Government officials are participating in a special resource commodity working group of the General Agreement on Tariffs and Trade with the goal of eliminating barriers on mineral trade at all stages of processing.
I mentioned a moment ago, Mr. Speaker, that I wished to announce an initiative relating to mining, minerals and metals technology. In the past several months I have reviewed federal mineral R and D and examined proposals to meet the technological requirements and challenges of the 1980s. My review has focused on the Canada Centre of Mineral and Energy Technology known as CANMET. Its activities include policy R and D, which supports federal mineral policies, protection technologies to improve health and safety in the environment, and productivity technology to help improve industrial productivity and competitiveness.
My officials and I have consulted Provinces during this review and their input, complemented by the advice of industry across this country, has made a valuable contribution to this exercise. So today I announce an incremental two-year, $5 million program consisting of several elements to provide increased research and development assistance to the mineral industry in the short term. One of the more significant elements includes New R and D funds for contracts to industry in
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areas such as potash mining, hydrometallurgical and biotechnological processing of ores. We are going to look at foundry process control and computer simulation of process where short-term benefits can be identified.
Another element which is welcomed and done at the suggestion of the industry is making CANMET's special facilities and expertise available to industry at reduced cost where this does not compete with regular commercial services. As the Hon. Member for Richmond-South Delta is probably aware, most of the work that CANMET has done with industry up to this point has been on a cost recovery basis. Recognizing the cash flow situation of the industry, we are reducing the cost of these services.
I should also like to mention that tomorrow I will be announcing the awarding of a contract to Inco Metals of Sudbury to develop and construct a robot which will perform a variety of difficult and hazardous bar and hammer tasks now carried out manually. The total cost of this project is $778,000.
I note that my time is up, Mr. Speaker, but one thing is clear. I have demonstrated that the Hon. Member's resolution is without merit. Although the problems are real, they are being dealt with by this Government by working very closely with the industry and the Provinces. This Government is committed to the solution of the problems of the industry and has the necessary programs in hand and in development.


Some Hon. Members:: Hear, hear!


Thomas Edward Siddon: Mr. Speaker, I want to commend and thank the Minister for going into some considerable detail, as one would expect she would in her role as Minister responsible for mines. I note she has made a number of announcements in her speech today, which is commendable, announcing a package for the use of Members on Government aid programs to assist in the hard hit and depressed areas of the country, a new mining, minerals and metals technology program, and certain initiatives by CANMET. One wonders, Mr. Speaker, if perhaps we should not have Opposition days like this more often because it does appear the Minister gets to work.
When the Minister speaks of new programs and initiatives which were largely conducted by the bureaucracy of her Department, Mr. Speaker, I have to think back to the time of the mineral policy discussion paper which took a year and a half to produce and many, many hundreds of hours of consultation, yet there has been no subsequent action. In fact, that policy paper missed the main mark and the Minister did not respond to my suggestion that it actually missed the main priority high in the minds of all spokesmen for the industry.
I would just quote the President of the Mining Association of Canada who said on April 19 that Canada can wave goodbye to its leading position as an exporter of minerals if it fails to remain competitive with an increasing number of other producing countries. Canada is facing a formidable challenge in world mineral markets from many competitors but particularly from Communist and less developed nations. In fact, Communist countries have grown at twice the rate as Western countries in terms of mineral production.

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The question I want to ask the Minister is: Does she not feel that it is high time Members of this House had a chance between Opposition days, which may come every year or two, to sit down and really get their teeth into some of these issues as this motion proposes? She said the proposal for a special parliamentary committee was without substance or foundation, if I remember her words correctly. Does she really believe that? Does she not think that there is a place for Members of Parliament between Opposition days to deal with these very substantive questions bearing on the potential for future economic income and jobs relating to our mineral industry?


Judith A. Erola: Mr. Speaker, I think I answered the questions very clearly. The mineral policy document to which the Hon. Member referred was the very broad framework from which have flowed the kinds of things I announced today. Surely the Hon. Member must be aware of that.
As to his call again for a special parliamentary committee, I think I dealt with that very clearly. In fact we are dealing with the problems of the mineral industry and we have had a number of task forces in place dealing with the mining community, reports of which are being tabled today. Most of these recommendations from the federal-provincial task force, which included representations from labour and from industry, are in place. The short-term recommendations are in place. The work of this task force will continue over the long term and it will report back to the Minister. Surely it is this kind of co-operation in place now which will result in a healthy industry.
I regret very much that there has been very little discussion in this House about the state of the mineral industry in this country. Certainly that is not due to lack of interest on this side of the House. We have been minding the store. I suggest to my critics-


Thomas Edward Siddon: Why did all of your announcements come today?


Judith A. Erola: -that they have not been particularly active, nor have they taken a particular interest in the industry.


Dave Nickerson: I was very interested, Mr. Speaker, in the statement of the Minister that there was a special international committee working within the GATT framework on the question of trade in mineral resources. The idea behind this, we were told, was to reduce the barriers to trade in minerals at all stages of processing. This would seem to be a new direction in Government policy, because as far as I understand it the old Government policy was to encourage the upgrading of ores and concentrates within Canada; hence the changes to the Canada Mining Regulations some years ago which prohibited the export of ores and concentrates in unprocessed form without a special permit.
I wonder if we could be told what is the Government's policy. Is it to encourage trade in ores and concentrates in unprocessed form, as it appears to be today, or is to encourage the upgrading of Canadian mineral resources within Canada?


Judith A. Erola: To be perfectly honest, Mr. Speaker, I am rather shocked that the Hon. Member for Western Arctic would have confused the issue. Of course, the Government is committed to further processing and that is the thrust. The Hon. Member is surely aware that there are many tariff barriers in place which prevent the sale of our minerals further processed. The exact thrust is to see whether, somewhere along the way, over the long term we can reduce these barriers so that we in Canada can process these metals further and find markets for them without the barriers which are in place now. Surely he supports this move.


Mr. Deputy Speaker:: I will allow one short supplementary question as there are several Members seeking to be recognized.


Dave Nickerson: I would like to ask the Minister one further question. It deals with the taxation of northern benefits. Last fall a press release was issued from the Minister's office. Since then there has been nothing on paper. Could we now be told how the Minister plans to implement the taxation of northern benefits? Will it be by way of changes to the Act, to regulations, or a series of remission orders? It is necessary that tax lawyers and tax accountants be able to see the written rules which will apply. When will they become available? All we have to date is a press release.


Judith A. Erola: Mr. Speaker, the Minister of Finance will be issuing those regulations. I do not know how much time I have available to me, but I think it would be worth while to explain just how they will be put into effect.


Thomas Edward Siddon: We've got the answers.


Judith A. Erola: I am not sure that Hon. Members opposite do know, because as of this year the moratorium is in effect. There will be no taxation of-


Thomas Edward Siddon: For next year?


Judith A. Erola: -northern benefits for this year, 1983. It is only in 1984 that these benefits, which will be kept, will be phased in at a 25 per cent level, the first year.


Thomas Edward Siddon: One hundred per cent the fourth?


Judith A. Erola: The Minister of Finance will be bringing forward that procedure.


Sidney James Parker: Mr. Speaker, I would like to follow up on part of the speech that I made and question the Minister with regard to Ontario Hydro purchasing coal from the States. We have a $1 billion deficit involving trade with the States. First, concerning the environmental aspects, U.S. coal has 7 per cent sulphur and western coal has less than one half of 1 per cent. That has a tremendous impact on acid rain. I would like to stress the possibility of a subsidy for moving western coal east.


Thomas Edward Siddon: It's called the Crow rate.


John Horton McDermid: Reverse Crow.
May 9, 1983


Donald Alex Blenkarn: Put coal on the Crow.


Sidney James Parker: What is the Minister's program involving the need for immediate action with regard to Ontario Hydro purchasing Canadian coal? There are 14 million tonnes coming into this country from other countries. Byron Creek is shipping a small amount of western coal to Ontario Hydro. The point I am trying to make is that we have a tremendous opportunity right here in Canada. Is the Minister seriously considering it and, if so, when can we expect an answer?


Judith A. Erola: The Hon. Member for Kootenay East-Revel-stoke has put his finger right on the problem. It is transportation cost. He is well aware that the cost of moving western coal to the operations of Ontario Hydro is extremely high. That is one of the reasons the coal association of Canada has been a catalyst in changes to the Crow rate. I want to pay tribute to the mining industry and, more particularly, to the coal association of Canada for recognizing the fact that unless the Crow rate were changed, we would not see this situation change.


Thomas Edward Siddon: Charge everybody more!


Judith A. Erola: This is why it is important for the Hon. Member and Members of his Party to support those changes-


Sidney James Parker: Forget about the acid rain!


Judith A. Erola: -if he is to see the movement of western coal coming to eastern Canada.


Mr. Deputy Speaker:: There appear to be many Hon. Members seeking to ask questions. Is there unanimous consent that there be an extension of the period of questions and answers?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: There appears to be unanimous consent.


Donald Alex Blenkarn: The Minister said that she felt that people thought northern benefits were unfair. In view of the fact that in the Northwest Territories over 50 per cent of the people employed are employed directly or indirectly by the Government of Canada, and they all receive northern benefits including housing, fuel and transportation assistance, benefits of every nature and kind, why would the Government of Canada pay northern benefits if they were so unfair? There must clearly be a reason for them. What is the Government's policy with respect to northern benefits for its own employees, when this increase in tax will conceivably take place next year, eventually with 100 per cent taxation on these benefits in four years' time?


Judith A. Erola: The Hon. Member for Mississauga South has put his finger on the problem. It is unfair. Why should federal Government employees be receiving a benefit which is unavailable to some of the people, indeed many of the people, in those northern areas?


Thomas Edward Siddon: So, what are you giving them?
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Judith A. Erola: As one of the Ministers at the Ontario provincial-territorial conference pointed out to me, the fellow working in the garage down the street, who was born in Inuvik and is being paid by the garage operator, is not receiving a single benefit.


Thomas Edward Siddon: What are you giving him?


Judith A. Erola: There must be a better way to produce and come forward with policies which will be fair to everyone in the North. I suggested to these Ministers that we work on it and come forward with some sort of economic development policy which would make it more attractive for people to live and settle in the North and stay there, but one which would be fair to everyone in the northern territories.


Thomas Edward Siddon: Provide the solution.


Judith A. Erola: The Hon. Member says "Find the solution". I say yes, let us find a solution.


Dave Nickerson: We'll tell you one.


Judith A. Erola: I suggest that he come forward with some of his ideas. He might occasionally come forward with a good idea.


Donald Alex Blenkarn: The Minister knows that our colleague from Peace River in British Columbia has produced a policy with respect to taxation which would significantly assist. For a long time our Party has been discussing significant tax changes involving taxation of people in the North, to make it equitable. Clearly people in northern Canada, where the cost of groceries is three times what they are in southern Canada, where the cost of heating a house is $300 or $400 a month compared to the cost here in Ottawa, should not be expected to pay the same income tax, dollar for dollar, as people here in this city. That has been the policy of the Government all along. When will the Government come up with something which makes sense? We have made suggestions; when can we have something from the Government?


Judith A. Erola: Mr. Speaker, I have a great deal of sympathy for people who live in isolated parts of the country, particularly in the North. I have a considerable amount of experience in this area, coming from a northern mining community. As a matter of fact, a member of my family lived for two years in a very isolated area and paid just the costs to which the Hon. Member referred. Therefore I do have sympathy for these people. However, I do feel that we must develop a policy which will be fair to everyone who lives in the North, not just a select few who receive, in many cases, extremely generous benefits which are not afforded other people in this area. I think that people in other parts of the country would agree that a policy must be fair to all. That is why I am suggesting to the Hon. Member that the phasing in of the benefits which we have brought in is giving those people who live in the North an opportunity to cushion the blow.

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Donald Alex Blenkarn: You are just increasing taxes on them!


Judith A. Erola: Give us, that is the federal Ministers and the provincial Ministers, an opportunity to come up with a program that will replace what is there now, one that is better.


Mr. Deputy Speaker:: The Chair would ask Hon. Members to bear in mind the extension that has taken place. The Hon. Member for Parry Sound-Muskoka (Mr. Darling).


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, let me begin by congratulating my colleague for bringing this motion before the House, despite the fact that the Hon. Minister seems to think there was absolutely no need for it. 1 would also congratulate the Government for the measures it has taken in the budget which benefit the producing sector in general and the mining sector in particular. Such measures as allowing earned depletion to be deducted from any income source, the right to carryback non-capital losses three years and forward seven years, and the refundable investment tax credit are worthy moves and come none too soon.
As we are well aware, the Minister represents a constituency whose dependence on the mining industry is near complete. I know that she must have often been sick at heart as she viewed the effect that the earlier policies of her Government have had on that once prosperous industry and on her own riding in particular.
How tragic it is that before the Gallup polls and the inevitability of the coming election prompted the temporary shelving of some of the Government's more incredible economic theories, more than half of the manpower of this great industry had to take their place in the breadlines or go on Unemployment Insurance. The mining industry is not a sector that can be made to respond to Government incentive measures like a frog's leg jumps to a jolt of electricity. Like any other sector, it can be stomped into the ground by punitive or confiscatory tax measures, as this Government has clearly shown, but it cannot be resurrected as easily.
The mining industry depends for its health and welfare on the ability of producing sectors of the economy to buy its products. Without that, Government incentives such as increasing employment or addressing any other isolated factor in the productive equation will do no more than create more and greater stockpiles of unused products. So in order to find the reason for the crisis in the mining industry we must look to the general state of the economy.
Conversely, of course, the fact that over the past year or so half of the manpower in the mining sector has been out of work at one time or another is an utterly damning commentary on the effects of the Government's economic policy on the nation at large. However, this is not to deny the fact that the vast majority of Canadian mineral output is sold on the international markets. I believe the Minister stated that the figure was some 80 per cent. However, the Adams mine in Kirkland Lake and the Sherman mine in Temagami both have their output dedicated to the Dofasco mill at Hamilton,
Ontario. The Adams mine recently closed down for a period of some three months, throwing some 400 breadwinners out of work. The Sherman mine is to follow suit some time in August. This example reflects directly on the point that I have been trying to make, which is that mining is dependent not on direct Government programs but on the general industrial climate. As we all realize, that climate has been very largely shaped by the Government's social and political experimentation over the past couple of decades.
The other factor that affects the viability of the industry is the price that it must charge for its product. Clearly if a property cannot produce a saleable product for less than the going price on the international market, then it becomes uneconomic.
The factors that contribute to the pricing of the product are such things as the grade of ore, the existence of marketable byproducts, transportation costs, labour costs and so on. The Minister mentioned energy and interest rates, which are also significant. But there is one further major factor which is an important one in the case of the mining industry, and that is the crippling level of taxation imposed by all levels of Government.
The punishing level of taxation imposed on the industry by the provincial Government is no responsibility of the Treasury benches across the aisle, but their own tax laws are. I refer specifically to the non-deductibility of provincial taxes from taxable income for federal purposes. This single provision, enacted into law by the Turner budget of 1974, has done more to make Canadian mines uneconomic than anything else that I can think of. When this is coupled with the fact that the dividends of these mining companies, having been taxed by both provincial and federal Governments while still in the hands of the companies, are again subject to taxation in the hands of the investor, it is no wonder that the industry has been having a hard time finding seed money.
I will leave the discussion of the Government's policy of taxing northern allowances to my colleagues. We have already heard comments on that issue.
As I see it, the root causes of the industry's problems, like the root causes of the problems of the economy as a whole, are philosophical. Having concealed its socialist orientation from the voters in order to get elected, and perhaps sensing that this may well be their last chance to do so, the Government has embarked upon a collectivist, centralizing and demoralizing course that has laid waste to what was once the first or second most prosperous economy in the world and reduced it to the lowest level in the OECD.
In order to achieve this and to finance the effort to make as many Canadians as possible dependent, to some degree at least, on its own hand-outs, it has raised taxes to an unconscionable level. It has done so seemingly driven by the belief that the prime responsibility of a Canadian citizen, corporate or otherwise, is to generate income for the Government to spend, and in most cases to squander.
May 9, 1983

One of the perhaps unanticipated side effects of this policy has been that this double and triple taxation of the products of the mining industry has not only driven the private investor away, which I suspect would not cause the loss of too much sleep in Government circles, but has also in a great many cases priced those products out of the international market.
One of the most striking features in this Government's period of office has been the charts which show, commodity by commodity, our declining share of the world market over time. While each complaint raised from this side of the House for the past 15 years has been that our national economy was faring poorly, it has been met by the bland statement from the Prime Minister (Mr. Trudeau) or his Minister of Finance (Mr. Lalonde) that the problem was a world-wide problem. I challenge them to explain how the fact that the rest of the world has outstripped us at what was once our own game can be anyone else's fault but their own Government's.
The declining share of the world mineral markets can very largely be traced to two factors, both of which are the direct products of this Government. First is the punitive levels of taxation which have contributed mightily to pricing our products out of world markets; and the second is the Government's encouragement of foreign competitors. I believe other Members have touched upon this subject.
Speaking of the decline of the Canadian mining industry, the President of the British Columbia and Yukon Chamber of Mines, in his report to the annual meeting of that organization approximately three months ago, said:
It did not start recently and cannot be blamed on influences from outside Canada, and secondly, it is not caused by a shortage of resources; our problems are mainly 'Made in Canada'.
A review of Canadian and world production figures illustrate clearly that the decline of the Canadian mining industry began between ten and fifteen years ago. Since Canada's share of the world market for individual metals also began to decline during this period, it is obvious that Canada was less successful than other producing nations in opening new mines at a sufficient rate to replace those that were depleted. Moreover, the decline cannot be blamed on world economic conditions since the trend started well before this recession.
Mr. Cathro then concludes the paragraph with the sentence:
The decline coincides closely in time to the Trudeau years and the corresponding swing away from economic policies that encouraged mining.
I could not have put it any better myself or as well, Mr. Speaker.
Let me read one more observation or prediction. This was made in 1976 by Mr. Alf Powis, President of Noranda Mines, who said:
We have accepted uncritically the notion that the state has the duty to redistribute wealth. In the process we have lost sight of the simple fact that wealth first has to be created before it can be redistributed. And once wealth is created, it cannot then be both consumed and preserved. In the words of the old truism, we cannot have our cake and eat it too.
The problem is that never before in history have so many remarkably ambitious and far reaching new social programs been so tightly compressed into such a short time period. In the process Government spending doubled between 1965 and 1972, and has doubled again since 1972-
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We must bear in mind that these words were spoken in 1976. Mr. Powis' observation continues:
-to the point where it now absorbs some 40 per cent of our Gross National Product. And much of this has been financed by printing money. This is not to criticize either these programs or the motivation behind them. In themselves they are directed at problems we all want to see solved. But in aggregate, they are simply much more than we can afford. In the process we have stimulated far too much consumption and starved the investment process that creates new wealth and jobs, and is the only way to beat inflation.
That was said seven years ago. Since that time Government spending has well over doubled again. Inflation, in many ways the inevitable outgrowth of the budgets of the Turner years, has gone berserk and a new factor has been introduced to the scene, the multibillion dollar deficit.
In this environment; the mining executive's international competitiveness destroyed by Government policy, the domestic economy rendered unable to buy his products, also by Government policy, and by yet a third set of policies rendered unable to attract the capital to finance exploration and expansion, the mining executive looks at the budget of last week and says: "Good, that's better."
What directions, then, would I like to see taken? Where would a Progressive Conservative Government be likely to move toward? First and foremost, provincial taxation should be made deductible from federal tax payable. Then we must remove the deadhand of Government taxation.
Further, we must recognize the fact that a capital intensive operation like the development of a producing ore body cannot be cost effective in a closely competitive economy as long as it is carrying both a load of debt and a double load of taxation. I believe we should consult with the provincial Governments with a view to arranging a tax holiday for new producing properties until that debt load is paid off. The Minister did mention in her remarks that recent meetings have been held with her provincial counterparts. Let us hope that particular problem will be discussed and partially solved.
We should expand on the initiatives begun by the Hon. Member for Vegreville (Mr. Mazankowski) when he held the portfolio of transport so as to facilitate the export of our mineral commodities. These initiatives should not be limited to the west and east coast, but should include also an exploration of the feasibility of extending the Ontario Northland Railway to the deep water areas on the east side of Hudson Bay and the construction there of port facilities. Should this prove feasible, what a shot in the arm it would be for the mining industries of northern Ontario and Quebec.
Most importantly, a Conservative Government would act decisively to restore public confidence, both at home and abroad, in the public policies of the nation. The importance of this cannot be overemphasized. Investors, those creatures who are such objects of suspicion to collectivist Governments such as this one, yet who nevertheless are the people who ultimately create the jobs the economy depends on, must be encouraged to invest. They must be shown that they and the jobs they create are welcome, be they individual investors or corporate investors. And they must be assured that so long as they

May 9, 1983
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behave as good corporate citizens or our country, they will remain welcome.
Again only a Progressive Conservative Government is in a position to do this. The aura of suspicion that probably for a generation will linger about the Liberal Party will lead their motives to be questioned as long as that suspicion remains, no matter what the Minister of Finance may try to tell us. I understand he is away now on a mission. Let us hope his mission will be successful.
In my particular area I do not have any producing mines although my riding borders the Minister's riding of Nickel Belt and, therefore, I have a great and abiding interest in the industry. I believe there are some 40,000 people employed in the mining industry of Ontario, if my memory serves me correctly. In northern Ontario people employed in the mining industry total 15 per cent of the work force. Overall in Ontario, the percentage of people employed in the mining industry is much smaller; I believe it is 1 per cent of the labour force. Yet the 1 per cent produces 4 per cent of the Gross Provincial Product. That is certainly a tribute to the work force.
Mining is a capital intensive industry and is a very important industry. I believe the Minister mentioned that the amount of money it generates is significant, some $11 billion. Therefore the industry is important to the economy.
Ontario is also a significant producer of gold. I believe in 1982 dollars this Province produced some $25 million in gold. I had the privilege of going through the Minister's riding on Thursday and Friday of this past week with members of the Subcommittee on Acid Rain. We met with officials of the International Nickel Company. I was delighted to learn that the mine is in full production. I was not so delighted to learn that according to the Executive Vice-President, Mr. Walter Curlook, the mine is probably losing a million dollars a day. However, International Nickel is still providing a lot of jobs. Officials also told me that they are going into exploration in a great way. More production is very important. It was not a case of the work force only; Mr. Curlook emphasized that there must be more productivity among the white collar staff and among executives in order for the company to compete, as we are well aware.
I remember years ago, in fact when I went to school, which is a few years ago, that International Nickel produced 95 per cent of the nickel in the world. That was really something. There was no competition. That is a nice deal if you can get it.


Jack Sydney George (Bud) Cullen: That is when I lived there.


Stan Darling: The Hon. Member for Sarnia (Mr. Cullen) is pointing out that was when he was there. But now production has dropped to 24 per cent of world production and I guess it is hanging on by its fingernails. Our committee was in the area to find out what International Nickel was doing as far as pollution control is concerned. It is spending money, but it will have to spend tremendous amounts of money. The figure is
astronomical, some $400 million a year by the time International Nickel gets down to allowable emissions of under 1,000 tonnes. International Nickel has dropped its emissions significantly from 7,000 tonnes a day to, I believe, some 1,900 tonnes a day now. We certainly give the company full credit for that. I told the Vice-President that we are all delighted to see the smoke belching out from the chimney of International Nickel again, and I say amen to that; but we want to do everything we can to get the company to reduce emissions as far as sulphur content is concerned.


Mr. Deputy Speaker:: Order, please. It being one o'clock, I do now leave the chair until two o'clock this afternoon.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I rise on a point of order. Will the Hon. Member be back after lunch because I have a question for him?


Mr. Jarvis:: He is always here.


Stan Darling: Actually, Mr. Speaker, I will not be here this afternoon because I am flying to Toronto.
At 1.01 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Stanley Hudecki (Hamilton West):: Madam Speaker, recently the Minister of State for Economic Development (Mr. Johnston) outlined four main objectives of the Government's new policy on technology. One of these objectives was the need to ensure that the benefits of technological development are shared equitably among all Canadians in every region. Some social agencies and community groups fear that the high technology revolution will result in a large number of poor and technologically illiterate, so-called "techno-peasants".
Given the growing importance of high technology, it is necessary that we develop policies at both the federal and provincial levels whereby those in lower income brackets across the country will have good access to high-tech training and job opportunities. The addition of financial and social barriers to training in high technology would be devastating to the chances of those in the lower income strata to gain future employment, and would be devasting to their ability to comprehend the usage, meaning and potential of computers and other high-technology advances.
I urge the federal Government to explore ways of advancing high technology training for lower income groups under the
May 9, 1983

National Training Act, and I urge all provincial Governments to improve the number and quality of their continuing education and evening courses in high technology related subjects.



RAILWAYS


Mr. Gordon Taylor (Bow River):: Madam Speaker, the Government spent some $300,000 on the Gilson Commission which heard representations and had detailed comprehensive consultations with all concerned groups in the West. After studying the report, the Minister in a policy statement announced that the "major benefits of this initiative"-that is, sharing the Crow benefit between the railways and the farmers-included an "improved grain transportation system, increased resource development, and economic diversification". A year went by and the legislation still had not come before the House, and then suddenly out of the blue the Minister threw out the entire "Pepin-Gilson" proposals and announced to the press that the total Crow benefit would go to the railways.
The recommendations from the West did not change from what Gilson or the Minister had heard, but the Minister received one more recommendation that did not go to Gilson. It was not from the West, not from the House of Commons, but from the Quebec Liberal caucus. It demanded that the Government pay the total Crow benefit to the railways, and the Minister succumbed. The Minister used reason and the consultative process until the Quebec Liberal caucus spoke, and then out of the window went economic diversification and resource development in the West, out of the window went the tremendous potential of the cattle and hog industry in the West. The objective suddenly became to retain, at all cost, the Liberal power base in Quebec. The Government thinks that western Canadians will continue to be hewers of wood and drawers of water. The West wants only fair play with the rest of Canada.



INDUSTRY


Ian Deans: Madam Speaker, we have another plant closing in Hamilton. Each one seems to be worse than the last. This case is Allen Industries, which makes molded insulation for automobiles. It has moved its plant from Hamilton to Richmond, Virginia. The company will sell its product back to Ford at Oakville. This must stop, this uncaring attitude which is displayed by many manufacturers located in Ontario particularly, toward the people who work for them and toward the municipalities that have put so much money into providing an environment which made the plants successful in the first place. We must draw to their attention that
their responsibility to Canada must come before their opportunity to make $2 or $3 more from an already profitable operation.
I suggest that the Government should take a look at the auto pact to determine whether or not they are in violation, in one way or another, of that pact. If they are not, then it should renegotiate the auto pact and ensure that plants operating within the protection of Canadian law operate on behalf of Canadians.



NUCLEAR ARMAMENTS


Garnet McCallum Bloomfield: Madam Speaker, the possible testing of Cruise missiles in Canada has received a great deal of attention lately. I think it is important for Canadians to realize that the federal Government supports NATO and the Alliance. We believe that a credible deterrent is needed to maintain peace with liberty.
A careful analysis of the facts will show that NATO's "two-track" strategy of talk and deploy is the safest route to follow at this time. Unilateral disarmament is a very unwise course to follow, considering present world conditions, and would create a dangerous shift in the international balance of power. If we refuse to allow the testing of the Cruise in Canada by the United States, it will display to the Soviets that the western world is divided, and will further erode the hopes for genuine negotiations on disarmament.
This does not mean that the federal Government is against disarmament. Indeed, I know of nobody in our country who would not favour disarmament. It is the ultimate goal that all mankind should strive to achieve. However, history proves that this cannot be done by offering unilateral concessions. This tends to create imbalances and, at the very least, leads to demands for more unilateral concessions. It is the path toward ultimate catastrophe.
We would do well to remember that compromise and weakness did not prevent the Second World War. It nearly cost the western world its freedom. Canadians as a whole should support the strengthening of the NATO Alliance, recognizing that the best deterrent to war is to be prepared. We should proceed with the United States on the testing of Cruise missiles.



INDUSTRY


Mr. Joe Reid (St. Catharines):: Madam Speaker, with the soaring popularity of table wines on the North American continent, we should contrast the enthusiastic support given by American States to American grape growers and wineries with that given here at home. Most American States exempt

May 9, 1983
wineries from state liquor and wine taxes, and those that do tax impose a token five-cents a gallon tax amounting to less than a penny per bottle. Consequently American acreage in grape production has doubled each year since 1976. American States and European Governments regard wine as an agricultural food product. In Canada wine continues to be taxed as a alcoholic beverage from which Ottawa and Toronto combined receive $140 million in taxes annually, while Ontario growers realize only a $24 million gross.
The number of growers in Ontario has been cut in half to about 1,000. They have managed to survive by increased plantings of European and hybrid grapes and by concentrating on the production of quality wines. Members of the House, the Parliamentary Restaurant, and consumers everywhere are advised to mark 1982 as a good vintage year. "You don't have to be bold or daring, you just have to have confidence in buying Canadian."



AGRICULTURE


Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, for over 100 years the Ontario Veterinary College has been renowned the world over for its excellence. Thousands of veterinarians have graduated from this venerable institution and have practised their profession in all corners of the world. In addition, hundreds of students from other countries have been trained at the OVC.
Several years ago the Dean of the College warned that, due to inadequate financial support, the College was in danger of losing its status as a world class institution? The Dean had continually stated that unless the physical plant was upgraded and the operating capital increased, the college was placing its accreditation in jeopardy.
Recently the American Veterinary Medical Association accreditation team visited the OVC and downgraded the College to a limited accreditation category. This in effect means that the College has five years to meet certain criteria, for example, improving its physical facilities and increasing the number and quality of its faculty. During this period it is recommended that enrollment be curtailed.
The Government has recently promised to fund partially the construction of a fourth veterinary college in the Maritimes. This may well be a laudable endeavour, but surely the Government has an obligation to the three existing colleges to ensure that they are adequately funded in order to prevent the embarrassment of their failing to meet specific standards of excellence.
It makes little sense to spend money on a new veterinary college while at the same time allowing the three existing centres to lose their accreditation for the want of adequate
funding. Therefore, Madam Speaker, I urge the Minister of Agriculture (Mr. Whelan) to meet with the Dean of the Ontario Veterinary College, who will be in Ottawa tomorrow, in order to take immediate action aimed at resolving this unacceptable situation.



RAILWAYS


Mr. Les Benjamin (Regina West):: Madam Speaker, the New Democratic Party supports public investment to upgrade railway lines for transport of all commodities, not just grain. The Government's plan to cancel the statutory grain rates for western farmers is unacceptable. The New Democratic Party's alternative proposal would require an Act to facilitate the transportation, shipping and handling of commodities by rail and to amend certain Acts in consequence thereof that legislate the following: one, capital to upgrade the rail system provided by public investment in exchange for equity in CP Limited and increasing our equity in Canadian National; two, paying the railroads directly for proven out of pocket losses for transporting grain; three, maintain the statutory grain rates for grain farmers and extend the rates to other commodities and their products.
The NDP proposal for rail upgrading would not be confined to British Columbia and Alberta but would include the railway line to Churchill and other places in Canada where facilities are inadequate to handle the traffic offered. Our plan would cost no more than the Government proposal, but more upgrading would result because we would prevent public money from leaking out of the rail system.


Some Hon. Members:: Hear, hear!



INCOME TAX


Jack Sydney George (Bud) Cullen: Madam Speaker, the senior citizens of our country derive benefits upon attaining age 65 such as the Old Age Pension and Guaranteed Income Supplement, and are no longer required to pay Unemployment Insurance premiums. But one of the hardships that they are faced with upon attaining the age of 65 is that they must pay their income tax on an installment basis. Many senior citizens are not aware of this and many of them find it difficult to do so. I think this may be something the Government should consider. It should indicate to the people of Canada that when they attain the age of 65 they are no longer required to pay their income tax on an installment basis.


Some Hon. Members:: Hear, hear!
May 9, 1983



FORESTRY


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Madam Speaker, the importance of forest industries to the Canadian economy is apparent. Almost 20 per cent of our exports is forest products, accounting for a $10.9 billion trade surplus. In many communities forest industries provide up to 60 per cent of employment.
When wood becomes scarce, our economy suffers. Yet recent studies show that wood losses due to forest diseases amount to an annual volume of 45 million cubic metres, some 20 per cent of the annual allowable cut in Canada.
Again, Madam Speaker, the Liberal Government's policies continue to disregard the importance of adequate research which could save hundreds of millions of dollars annually. Disease research programs of the Canadian Forestry Service have been declining and there has been a 50 per cent reduction in staffing.
For the fiscal year 1983-84 the Canadian Forestry Service has received $5.5 million for research and development. These funds, however, will only allow forest pathologists to catch up with basic scientific equipment requirements. The urgent need for additional person-years has not been met.
During the current recession forest losses may seem irrelevant. Let me assure you that they are very real when one takes into account the loss of trade dollars, of employment, and the detrimental effect on the environment.
I urge the Government to address this issue immediately in order to preserve our forest industry and the economy.



ORAL QUESTION PERIOD


Gordon Edward Taylor: Madam Speaker, in the absence of the Hon. Minister responsible for housing, my question is directed to the Right Hon. Prime Minister. The housing industry, largely because of the Canadian Home Ownership Program, staggered back from the grave and had just started to mushroom when the Program was suddenly cancelled, leaving hundreds of Canadians in a precarious position. Since this part of the private sector is recovering, and since the Government has alloted $2.4 billion in the budget under Special Recovery Incentives for Private Investment, will the Government transfer $100 million to the Home Ownership Program and announce a date sometime in May when no more applications will be accepted, or will the Government at least deal with the applications already filed?
Oral Questions


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, this question was answered by the Minister himself on Thursday or Friday and the Government has not changed its policy since then.


REQUEST THAT GOVERNMENT SHOW COMPASSION TO APPLICANTS FOR GRANTS
Gordon Edward Taylor: Madam Speaker, the Minister did not deal with transferring part of the funds that were already set aside for the recovery. The cancellation of this program will choke off the recovery and it is a betrayal of those who took the Government at its word. When the Minister of Finance said this would happen close to the end of May, it raised the hopes of hundreds of Canadians.
Does the Right Hon. Prime Minister not feel some compassion for those who took the Government at its word and invested their money in putting in footings, taking out mortgages, et cetera? The Right Hon. Prime Minister called for compassion for people in Third World countries. I call for compassion for the people of Canada who took the Government at its word.


Pierre Elliott Trudeau: Madam Speaker, the Hon. Member and his Party are also frequently calling for compassion for the taxpayer, but they seem to have no end of suggestions for spending endless amounts of money to deal with difficulties here or there.
The Hon. Member suggests a change of allocation of funds from one area to the other. If we take funds away from an area, he will then complain that we are not giving enough to the unemployed, or to the youth of the country. This is strange coming from a Party who has so often advocated the use of sunset legislation. They know that at some point, Madam Speaker, a program has to come to an end and that the supply of funds is not unlimited. A case cannot be made for continuing every program, no matter how good it is.
I sometimes wish that the Opposition would discover how good our programs are and support them when they are in existence, rather than bemoan their ending and only discovering, when they are ended, how well this Government has legislated.


GOVERNMENT POLICY
Gordon Edward Taylor: Madam Speaker, when the Government does come up with a good program, it suddenly cancels it. The money is already alloted for recovery in the private sector. This is part of the private sector. We ask that the Prime Minister and the Government not betray the people who took the Government at its word, invested in mortgages, put in the footings, and are now left high and dry. I would ask the Prime Minister, who will provide the announced $3,000 for those who are now liable to lose everything if the $3,000 is not provided? Does the Prime Minister not care about Canadians?

May 9, 1983
Oral Questions


Pierre Elliott Trudeau: Madam Speaker, the budget provided an additional $355 million to stimulate the housing industry. It also brought in two major changes to the Registered Home Ownership Saving Plan to stimulate home purchases and purchases of designated furnishings and appliances.
Madam Speaker, there are measures in the budget now. There is money being spent to encourage the building of housing. The Hon. Member cannot argue that we do not care for home ownership. The very recovery in that area is an indication that our programs have been working. Once again the Hon. Member is making a plea for the ever continuing and replenishing of funds. That cannot be done without increasing taxes, Madam Speaker.


PLIGHT OF BUILDERS
William Herbert Jarvis: Madam Speaker, I have a question on the same subject directed to the Minister of State for Finance, who indicated last Thursday that housing starts were off to a very good start this year, and to quote the Minister:
We think that the industry is very strong.
I agree that there are encouraging signs of recovery. The great difficulty posed by the $3,000 program is that modest sized builders, those building half a dozen or ten homes, pouring the foundations, are now in a position where, based on the expectation of that eventual home-buyer assistance, they will have a very difficult time moving those houses.
I am sure the Minister will be the first to agree that housing completions are more important to employment than housing starts. Does the Minister have any hope to give to those builders, not those applying for 50 or 100 permits, but those of modest size who have made these starts, poured the foundations, and find themselves in a very vulnerable position insofar as eventually being able to sell those houses is concerned, now that the funds have run out?


Hon. Paul J. Cosgrove (Minister of State (Finance)):: Madam Speaker, those builders are no doubt comforted by the reduction in interest rates which have been on a trend downward for the last three or four months. In the long run that will probably be more efficient support to the housing industry and all other sectors of the economy. There is a general reduction in interest rates. The other factor that is equally as important if not more important than the $3,000 grant is the security of Canadians who are considering the purchase of homes, knowing that this Government has put money into supporting job creation, supporting the continuation of employment for many people and many industries. Those two factors, with the commitment of billions of dollars, generally should provide the kind of confidence that consumers need to make that kind of purchase.


REQUEST FOR REDISTRIBUTION OF BUILDING PERMITS
William Herbert Jarvis: Madam Speaker, I point out to the Minister that many builders have mothballed housing, including six homes in my riding in the last two weeks. Construction has stopped because of the fear of inability to sell eventually. Last Thursday the Minister of Finance indicated they would check on some of the larger builders who applied for 50 and 100 permits under the $3,000 grant program. Can the Minister give some assurance that if the inspectors find that those larger builders do not in fact qualify, there will be a reasonable redistribution of permits among the small builders?


Hon. Romeo LeBlanc (Minister of Public Works):: Madam Speaker, I apologize for being late. I was delayed at the very last second. We are trying to ascertain the size of the problem. Any program which comes to an end has this type of bulge at the very end. It is obvious that we had a rather unexpected increase in housing starts in the last half of April. We are now assessing the problem. We have asked our people not to take more applications. We will come up with some answers to some of the Hon. Member's questions I would expect within the next week or ten days. Meanwhile I want to reassure those who have put in bona fide applications that they will be given every attention possible.


MEDICAL CARE
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, my question is for the Prime Minister. The Prime Minister will recall that just over a month ago I was urging the Minister of National Health and Welfare to bring in a Canada health act which would address the increasing incidences of user fees as a result of what had happened the night before, when Alberta brought in a new scheme of user fees. The Province of New Brunswick has just moved to introduce user fees for some hospital services, completing the prediction I made at that time, that we would see more of this if the federal Government did not act. When are we going to see some action on medicare?
When are we going to see a real proposal for a Canada health act that will address these problems, rather than simply letting medicare slide away while the federal Government waits for an opinion from the Department of Justice about what the constitutional possibilities are in this area? When are we going to have that opinion rendered by the Department of Justice, and when will we have a concrete suggestion from the Government?


Pierre Elliott Trudeau: Madam Speaker, I do not believe the Hon. Member is reflecting the Minister's answer correctly when he talks about waiting for an opinion from the Department of Justice. The Minister has repeatedly in the past talked to the Provinces and intervened with them on this medicare scheme, which is a creation of the
May 9, 1983

federal Government but which cannot be made operative without provincial participation, to persuade the provincial Government as far as possible to interpret the medicare legislation in a way which is desired by all Canadians. She has obviously failed in some cases. She indicated to the House she was considering whatever measures could be taken.
The reason for the delay is not because the constitutional problem is a difficult one generally. It would be to find ways to redress the situation which would not be challengeable in the courts. That is the difficulty. The Hon. Member knows that the federal Government, under its jurisdiction, cannot legislate in certain areas. The delivery of health systems is one. That is why we need the co-operation of the Provinces. The very law setting up medicare states that. We cannot change it unilaterally in any way which would suit our convenience or that of the New Democratic Party.


INQUIRY RESPECTING DEPARTMENT OF JUSTICE OPINION
William Alexander (Bill) Blaikie: Madam Speaker, the Prime Minister has confirmed rather than denied my interpretation of the events. He is saying that the Department of Justice is trying to figure out what can be done within the Government's legitimate constitutional jurisdiction.
The Minister of National Health and Welfare said to me on March 17 that the Department of Justice was drafting a document. That was over a month and a half ago. When is that document going to be drafted? Also, would the Prime Minister consider having that document placed before the House of Commons before the Minister meets with the provincial health Ministers? The Prime Minister says that the Minister is meeting with the provincial health Ministers. They have not met for 11 months. Last May or June was the last time they met with regard to medicare. That can hardly be called active or intense consultation.
Will the Prime Minister consider tabling a document in this House so that the people of Canada and Members of Parliament concerned about medicare will have a proposal around to which to rally and stimulate public opinion, if indeed the proposal is good enough to deserve that?


Pierre Elliott Trudeau: Madam Speaker, I can predict that no proposal made by the Government will ever be good enough to rally the support of the New Democratic Party. That is a foregone conclusion. That is why I do not see any advantage in proceeding in the way the Hon. Member says. The legislation in Alberta is only to take effect next fall. The Minister is exercising her responsibility in ensuring that the ways in which we will try to make medicare operate will be the way the Canadian people want. She is exercising her responsibility to prepare that. It would not help at this stage to table legal opinions.
I repeat, the Constitution is quite clear on what the federal Government cannot do. It cannot legislate on the delivery of health systems. If the Hon. Member doubts that, he can consult his own lawyers. We do not have to table a document
Oral Questions
from the Department of Justice to say that. What we are trying to find is a way which will be accommodating to the Provinces and at the same time respect the Constitution and make medicare operable.


FEDERAL-PROVINCIAL FINANCING ARRANGEMENTS
William Alexander (Bill) Blaikie: Madam Speaker, we do not want to know what the federal Government cannot do in terms of health delivery. We want to know what the federal Government proposes to do with regard to what it can do. It is not coming forward with that.
My final question has to do with the need the Prime Minister expresses for provincial agreement. I happen to be convinced that we are not going to get the kind of agreement among provincial Conservative Governments that will be an agreement which will preserve the five basic principles of medicare. Will the Prime Minister consider acting, providing it is within the constitutional jurisdiction of the Government, in a way that did not have the agreement of the Provinces? Will he facilitate the acceptability of that action by being willing to go back on the reductions in established programs financing that took place a year ago, and taking back Bill C-150 which imposed six and five on post-secondary payments? How can he expect the Provinces to agree to anything when he is doing this to them?


Madam Speaker:: Order.


Pierre Elliott Trudeau: Madam Speaker, the Hon. Member is confusing two subjects, postsecondary education and medicare. There was no reduction in the funds put forward for medicare. The Hon. Member knows that. I can give the answer as to why he is dragging a red herring around this discussion. He knows there is no solution without some form of respect for the Constitution. He is proposing that we buy off the Provinces by giving them more money. That is not the approach we intend to take.


SUPPLY AND SERVICES
Hon. Allan B. McKinnon (Victoria):: Madam Speaker, my question is directed to the Minister of Supply and Services. The Hon. Member for Longueuil has been widely quoted as saying that the selection of the winning consortium is a purely political decision in the case of the Canadian patrol frigates, and if Scan Marine is not picked, he says there may be a political putsch within the Liberal Party. There are many factors which should govern the decision making but I sincerely hope that such political blackmail will not prevail.
Will the Minister confirm that one of the options put forward by Saint John Shipbuilding in their bid is to build two frigates in the Maritimes, two in the St. Lawrence Shipyards,

May 9, 1983
Oral Questions
and two on the West Coast, and this would mean that, for the total contract, the total money spent would be 22 per cent to 24 per cent in the Atlantic region, 38 per cent to 41 per cent in Quebec, 22 per cent to 27 per cent in Ontario, and 15 per cent in the West? Can the Minister confirm that this very fair distribution of work was one of the options in the Saint John shipbuilding bid?


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, the Hon. Member has previously made representations concerning the frigate contract. At the time, I told him that the contractor who would build the six frigates would be awarded the contract on the basis of efficiency, Canadian content and of course, price. Those are the considerations. This is a very strict competition and assessment of the various offers is continuing. We shall be in a position to announce the name of the company that will be awarded the contract by the end of June, as was indicated by the Minister of National Defence early in July of last year. The Hon. Member will have to wait until then to find out what our decision will be. However, I can inform the Hon. Member that this decision will be made on the basis of the criteria I mentioned earlier.


Allan Bruce McKinnon: Madam Speaker, I find it strange that the Minister left out one of the criteria which he expressed here last week, that is, that they would pick the best ship. 1 hope that criterion is still there because it seems to be foreign to the Hon. Member for Longueuil.


ENGINE PROPULSION SYSTEMS
Allan Bruce McKinnon: Could the Minister confirm two things-first, that there is no shipyard in the country which has the equipment or personnel to build all six frigates in the time span available in the program? Second, would the Minister confirm or deny that the specifications for the ships called for gas turbine engines for high speed and diesel engines for cruising propulsion, and that Scan's submission did not include the diesel alternative engine because that would have put their costs over the effective limit?


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, if the hon. gentleman had paid specific attention to my reply he would have noted that I did indicate that indeed the excellence of the ship was of primary consideration. Indeed, the hon. gentleman will have to wait until the decision is made and announced in order to ask his questions in terms of the various criteria and the weight attributed to them.


INDIAN AFFAIRS
Lorne Everett Greenaway: Madam Speaker, my question is directed to the Minister of Industry, Trade and Commerce. It follows questions asked on Friday concerning the proposal to establish a Crown corporation to administer the $345 million Native Economic Development Fund which was outlined in a Cabinet document which was signed by the Minister.
On February 19 of this year the Minister and two of his Cabinet colleagues met with representatives of the native caucus of the Liberal Party to discuss the formation of a Crown corporation and the appointment of its board of directors. Could the Minister tell the House whose idea it was that the board of directors of this Crown corporation should be made up of native members of the Liberal Party? Was it the idea of the Minister and his colleagues or was it the idea of the native people who were present at that meeting?


Hon. Ed Lumley (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, first of all, the Hon. Member knows that a lot of the discussed documents are presently before Cabinet. Secondly, I would like to correct something he said. I did not meet with the native Liberal caucus with respect to this document or any other document. Third, Madam Speaker, the Government consulted a substantial number of people because one of our desires in this regard is to help native people help themselves. We want to ensure that this fund announced by my colleague, the Minister of Finance, in his November 1981 budget will produce the desired results.


RESPONSIBILITY FOR NATIVE PEOPLE'S ECONOMIC DEVELOPMENT
Lorne Everett Greenaway: Madam Speaker, my supplementary question on the same subject is directed to the Minister of Indian Affairs. On December 1, 1981, the Minister announced the establishment of a $345 million fund to support economic development for native people which was to be administered by his Department. Now, one and a half years later, it appears that the Cabinet is considering that the Minister of Industry, Trade and Commerce assume the responsibility for all economic development for native people through a Crown corporation whose board of directors are to be card-carrying Liberals. Is the Minister in agreement with this proposal?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, let me tell the Hon. Member, through you, that it was never intended that my Department would administer this fund, because my Department is the Department of Indian Affairs. This is a native economic development fund. It includes non-status Indians, Metis, and, of course, as the Hon. Member knows, any relationship we have with the Metis is through the Secretary of
May 9, 1983

State, for obvious reasons, in terms of the Minister of Indian Affairs not being able to, or being expected to adjudicate equally between these groups, especially because of the status Indians being primarily a federal responsibility. As far as the Native Economic Development Fund is concerned, I believe it is an excellent initiative. I cannot think of a more appropriate place for it to be than with the Minister of Industry, Trade and Commerce.


INDUSTRY AND LABOUR ADJUSTMENT PROGRAM
Mr. Doug Lewis (Simcoe North):: Madam Speaker, my question is directed to the Minister of Industry, Trade and Commerce. The Minister recently announced a national industrial development program to provide direct assistance to industry in all areas of Canada. What is the status of ILAP? Will it be continued?


Edward C. Lumley: Madam Speaker, I believe the anniversary date for the ILAP program is sometime in 1984. All the areas designated for ILAP assistance will continue with applications until their anniversary date. Any other decisions with respect to specific sections of ILAP will be taken on or before that anniversary date.


APPLICATION FOR DESIGNATION FROM MIDLAND-PENETANGUISHENE
Douglas Grinslade Lewis: I direct a supplementary through you to the Minister, Madam Speaker, just to be very clear with respect to ILAP applications which are presently before the board. I am thinking specifically in terms of Mid-land-Penetanguishene, which has been before the board, or whatever the application process is, for three months. People in that area have spent thousands of dollars and hundreds of hours of time. They want to know when will that application be reviewed. Will it be reviewed under the current ILAP program or under the new program?


Edward C. Lumley: Madam Speaker, I believe over 1,000 communities are requesting ILAP designations. The new Industrial and Regional Development program will ensure that there will be financial assistance, depending upon regional enrichment for the whole country. Therefore most of the regions, such as the one mentioned by the Hon. Member, Midland-Penetanguishene, once this legislation is passed will be designated for assistance in those categories which were indicated in last weeks press release. I would enlist the co-operation of the House Leader for the Conservative Party for quick passage when that legislation is presented here in the House.
Oral Questions


CANADIAN PACIFIC RAILWAY
Leslie Gordon Benjamin: Madam Speaker, my question is directed to the Minister of Justice and it relates to a decision of the Canadian Transport Commission dated April 28, which I quote as follows:
-we are requesting the Attorney General of Canada to institute and prosecute proceedings on behalf of Her Majesty against Canadian Pacific-
And its directors, officiers, agents and contractors, regarding the destruction of a railway station in Wests Toronto. I would like to ask the Minister of Justice who, I believe, is the Attorney General of Canada, if he intends to lay charges as recommended by the CTC and whether or not prosecution will be pursued by himself and/or his provincial counterpart.


Hon. Mark MacGuigan (Minister of Justice):: Madam Speaker, I have seen that recommendation and it is under consideration. The Hon. Member will appreciate that it is not possible for us just to accept at face value, without further consideration, such matters as whether the Railway Act would sustain such a prosecution, and so on. The matter must be looked at very carefully, and in due course I will be able to announce a decision after receiving advice from the Department.


REQUEST THAT RAILWAY BE INSTRUCTED TO RECONSTRUCT STATION
Leslie Gordon Benjamin: Madam Speaker, the decision was made by the CTC under the Railway Act, and that is a court of proceedings. Since it is obvious the CPR is running the Government rather than the Government running the CPR, I would like to ask the Minister of Transport, who tells us he is going to get guarantees of railway performance with his Crow rate destruction, if he can tell us whether he will use the powers he has under the Railway Act to direct CPR to reconstruct the West Toronto station to its original state, and whether or not he will insist that the Minister of Justice lay charges and prosecute CP for the destruction of that station, if for no other reason than to restore the integrity of the CTC, the Railway Act, and the Minister?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, as the Minister of Justice has just said, the CTC has asked the Department of Justice to take proceedings in this matter. I understand also that the CPR has appealed the decision.


MARITIME FREIGHT RATES ACT-REVIEW TERMS OF REFERENCE
Mr. Pat Nowlan (Annapolis Valley-Hants):: Madam Speaker, my question is also for the Minister of Transport. It may be most appropriate in that, according to some rumours, the Crow legislation is going to be introduced today. My question

May 9, 1983
Oral Questions
concerns the same type of symbolic legislation in Atlantic Canada, that is, the Maritime Freight Rates Act and the private study the Minister commissioned to review that Act. Has the Minister received the protest of four provincial Ministers of Transportation about the narrow terms of reference, very narrow timeframe, and lack of public input to this study, and what does he intend to do about this?


Jean-Luc Pepin: Madam Speaker, my information is quite different. I understand two Atlantic Provinces have agreed, one has remained neutral, and one has disagreed. Be that as it may, my hon. friend is so busy in other files these days that he may not be fully acquainted with the fact that we now have memoranda of understanding with all four Atlantic Provinces under which, among other things, we try to do joint planning. The studies and review of the nature indicated by my hon. friend are the type of thing we try to do together, namely, attempt to spend as well as we can the hundreds of millions of dollars in support the federal Government gives to the Atlantic Provinces in matters of transportation. This is so normal and so desirable that I am sure my hon. friend would not want to disagree with that, because it is in the best interests of the Atlantic Provinces.


John Patrick (Pat) Nowlan: Madam Speaker, I think the Minister has been pretty busy too these last few days and weeks on many matters from air to land and Crow to sea. I think if the Minister checks his files he will find my information is correct. I understand that the 1982 agreement for upgrading secondary roads in Atlantic Canada has a proviso for joint consultation and planning, but the Minister's decision was unilateral.


REQUEST FOR PUBLIC CONSULTATION
John Patrick (Pat) Nowlan: Madam Speaker, to allay the fears in Atlantic Canada of businesses which are just on the margin and will not be able to succeed if that subsidy, internal and external, is taken away or reduced, will the Minister assure the House and Atlantic Canada that, regardless of the consulting firm's recommendations, there will be public input from those affected before any further action is taken?


Jean-Luc Pepin: Madam Speaker, I will be exceptionally short on that. Yes, there will be consultation at least with the Governments of the Atlantic Provinces.


CANADIAN ARMED FORCES
John Horton McDermid: Madam Speaker, I have a question for the Minister of National Defence if I can interrupt his briefing of the other Minister on the Frigate Program. Madam Speaker, the reserve forces in Canada are in very desperate shape for both equipment and
manpower. What is the Minister doing to improve the situation?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, I do not think the Hon. Member has the same information as I have. During the last couple of years we have in fact increased the budget for the reserves. We are giving them new equipment and we have integrated many reserve units with some of the operations of the regular force. I do not remember which western media were referring to this matter last week, but I think they were saying that they were very glad about what was being done with the reserves and that there was a great improvement over the last two or three years. I have that from some of our reserve officials, too, who are very happy with what we are doing. We could do more and more will be done, but at the moment I think there has been great improvement.


John Horton McDermid: Madam Speaker, hardly anything has been done for them, so they are most grateful for anything given to them. The spirit is high in the reserves but only because of the people involved, not because of their equipment or because of what the Government is doing for them.


MOBILIZATION PLAN
John Horton McDermid: Madam Speaker, for two years the Minister has promised a mobilization plan for the reserves. Where is it? When are we going to see it?


J. Gilles Lamontagne: Madam Speaker, I am very glad that the Hon. Member admits that the morale and spirit in the reserves are very great. I realized that when I visited some of the reserve units recently. As far as the mobilization plan is concerned, it is always developing. It is therefore more or less a fact at the moment that we have one. Obviously there are many issues in the mobilization program that we cannot make public, because you do not make all the information on these things public. But if the Hon. Member or some others are interested, I can ask my Department to give them a briefing on what we do in case of a general mobilization.


FINANCE
Donald Alex Blenkarn: Madam Speaker, my question is for the Minister of State for Economic Development who will recall that at some time he had something to say about capital gains tax, and we now have before the House a related proposal under the ISIP Program. I was wondering if he would be doing a study in his Department on this Program and will he be referring it to a Standing Committee or a Special Committee of this House so that we can look into the
May 9, 1983

whole question of how inflation has affected capital gains and investment potential? It would seem to me that would be a matter of economic development.


Hon. Donald J. Johnston (Minister of State for Economic Development and Minister of State for Science and Technology):: Madam Speaker, obviously this is a question which should be directed to the Minister of Finance. Perhaps the Minister of State for Finance would like to comment on it. All I can say is that I thought the Hon. Member would certainly welcome that initiative. Bear in mind that it grew out of a great deal of public discussion, and consideration by prominent members of the community most concerned with the issue of capital gains.
I would hope he would applaud this approach to the development of policy.


POSITION OF INVESTORS IN SMALL BUSINESSES
Donald Alex Blenkarn: Madam Speaker, I am not criticizing the policy at all. I was wondering if the Minister felt the same type of thing should be done for other people who invest in small business which are not listed on the stock exchange and cannot take advantage of the scheme. He is Minister of State for Economic Development. Why would he not recommend to his Cabinet colleagues that some kind of equity be available to those who would create new jobs and businesses rather than just for the people who are fortunate enough to have their stocks listed, or can have them listed?


Donald James Johnston: Madam Speaker, the representations made between Ministers are of course confidential. But I can assure you that the Minister of Finance was very attentive, not only to representations from his colleagues but from members of the business community, the labour movement and various construction associations and other trade groups right across the country when he was in the course of preparing his budget. I think Hon. Members would have to recognize that probably at no time in the history of budget preparation has there been such extensive representations. I am sure the Hon. Member would have had his own opportunities to make representations to the Minister of Finance had he elected to do so. Now, I do not know whether he has or has not, but I have made my representations.


AIR TRANSPORT
[Stage Direction]
PACIFIC WESTERN AIRLINES-^SERVICE TO WESTERN MANITOBA
Mr. Jack Murta (Lisgar):: Madam Speaker, my question is directed to the Minister of Transport. Since the Pacific Western Airlines licence to service Brandon, Manitoba, and consequently western Manitoba, is being looked at at the present time by the CTC, and since that service has been excellent and most, if not all, the people in western Manitoba are very happy with it, I am wondering whether or not the
Oral Questions
Minister could instruct the CTC to give the PWA application very positive consideration and also clear up the uncertainties surrounding this vital service at the present time.


Jean-Luc Pepin: Madam Speaker, there are so many of these decisions that I can hardly keep track of all of them, but I stick my neck out. I think the CTC has already accepted the extension.


An Hon. Member:: They have.


Jean-Luc Pepin: They have? To say something new, I think the Department is also making arrangements to make some improvements to the airport at Brandon.


ANNOUNCEMENT OF DECISION
Jack Burnett Murta: Madam Speaker, I was not exactly clear on the Minister's answer. If they have made their decision and it is positive, fine. If a decision has not been made, would the Minister ensure that a decision is made as soon as possible? Will it or can it be announced so that the public will know about it? Certainly the public does not know at this point in time. Could he also ensure, and this is a plea from myself, that the decision is in favour of PWA?


Jean-Luc Pepin: Madam Speaker, I am having a problem, because my hon. friend on the other side, exceptionally, seems to be more aware of the decision than I am. I knew the decision had been made, but I was not sure that it had been announced, which is always the problem when one is a Minister. It is one of those things.
On the subject, it was extended because the service has been very good, and it has been well used. Changes or improvements to the airport had not yet been made, in waiting for the decision of the CTC to extend the licence. Now that this has been made, the expenditures, and I cannot remember how many dollars are involved, will be made. I will communicate the full information to my friend as soon as possible.


CROWN CORPORATIONS
Ian Deans: Madam Speaker, my question is directed to the Prime Minister. Does the Prime Minister feel that it is appropriate for Crown corporations or their agents to offer campaign contributions to politicians or aspiring politicians in other parts of the world, with whom they are attempting to do business?


Pierre Elliott Trudeau: Madam Speaker, I cannot answer that question . I do not know what the Hon. Member is talking about. There may be some circumstances where it is appropriate and others where it is not appropriate.

May 9, 1983
Oral Questions


An Hon. Member:: Answer in principle.


Pierre Elliott Trudeau: Yes. I am not the Pope.


Mr. Nielsen:: Really?


Pierre Elliott Trudeau: I cannot say, with absolute finality, what is right or wrong.


John Patrick (Pat) Nowlan: Even he is having some trouble.


Ian Deans: That is the guideline answer, I suppose. CANADAIR-REPORTED OFFER OF BRIBE TO ALASKAN SENATOR


Ian Deans: I wonder if the Prime Minister recalls my asking him to investigate the circumstances surrounding Canadair's involvement with the State Senator from Alaska, Senator Hohman, who was convicted of agreeing to accept a bribe. Why did the RCMP not investigate Canadair's involvement in that matter?


Pierre Elliott Trudeau: Madam Speaker, my recollection is that Canadair issued a statement that the person involved was no longer an employee of Canadair, that he was acting as an agent, and that he did certain things as an agent. That is my recollection of Canadair's declaration, Madam Speaker.


INDUSTRY
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, my question is directed to the Minister of Regional, Economic Expansion. Could he give me an update on the negotiations with Dynatek at Sidney International Airport, elaborating on the $16 million part interest-free loan and part grant which was in the process at one particular stage? Where does the matter stand at the present time?


Edward C. Lumley: Madam Speaker, as the Hon. Member knows, at the request of the Province and the company, the Government of Canada made a substantial offer to Dynatek. Obviously we think it is in the best long-term interests, of the microelectronics industry, and, in particular, to help diversify the economic base of western Canada. There were some conditions, attached to the offer with respect to equity infusions, from the private sector. To my knowledge, these conditions have not yet been met.


MANAGEMENT COMPETENCY
Donald W. Munro: I assume, and this is in the form of a question, that the Minister satisfied himself before making this "substantial offer", as he said, as to the competence of the managerial staff to do what they said they would set out to do, namely, set in place a robotized system for preparing the chips.


Edward C. Lumley: Madam Speaker, it has been several months since I have reviewed the dossier, but if I recall correctly, approximately 700 people were to be hired. Included were some very competent managers who had expertise in the field.
However, I would like to remind the Hon. Member that it was the Province of British Columbia which stated that it would not decide on the application until Ottawa did. If I recall correctly, the Minister of Science and Technology for the Province of British Columbia said, "We want to see what Ottawa is prepared to do first". We did act, I think, in a very responsible way. I believe that the Province of British Columbia has since followed up on our initial offer.


EXTERNAL AFFAIRS
Erik Nielsen: Madam Speaker, my question is directed to the Prime Minister, in the absence of the Secretary of State for External Affairs. The Prime Minister will recall that a very strong note of protest was received by the Canadian Government from the Government of the United States relating to anti-American demonstrations which occurred in the city of Winnipeg, in which two members and others of the caucus of the NDP Government of that Province were involved, and where a United States flag was burned at the Consulate. Part of the note was in these terms:
The United States must protest strongly the participation of Ministers of the Government of Manitoba in this event which clearly gave it an official character and would appreciate assurances that such official support of hostile demonstrations will not be repeated.
I would like to ask three brief questions with respect to the note. Has the Canadian Government received an apology from the Government of Manitoba, which has been transmitted to the United States? If that has not been the case, has the Canadian Government apologized to the United States Government on behalf of the Government of Manitoba-


An Hon. Member:: Better not!


Erik Nielsen: I hear the voice of an NDP Member saying that the Canadian Government had better not do that. The last question of the series is: will the Government table a copy of any note which was sent by Canada to the United States in response to the original note?
[ Translation]


Mr. Jean Lapierre (Parliamentary Secretary to Deputy Prime Minister and Secretary of State for External Affairs):: Madam Speaker, the Canadian Government received the note
May 9, 1983

from the United States and we have replied. As far as apologizing for the Government of Manitoba or the suggestion that the Government of Manitoba apologized, I do not think there is any objection to tabling the contents of the note, the answer to the United States, in the Elouse and the Hon. Leader of the Opposition will be able to see and judge for himself, and not try to exaggerate the impact of this occurrence and treat it as something that is best forgotten.


Erik Nielsen: I am glad that there is a willingness to table Canada's response to the note of the United States.


REQUEST THAT PROVINCIAL GOVERNMENT RESPONSE BE TABLED
Erik Nielsen: Will the Government also table the apology of which the Parliamentary Secretary spoke, which came from the Government of Manitoba to the Government of Canada?


Jean-C. Lapierre: Madam Speaker, I did not say the Government of Manitoba apologized. I think the contents of the note will be selfexplanatory.


FISHERIES
Mr. Lloyd R. Crouse (South Shore):: Madam Speaker, in the absence of the Minister of Fisheries and Oceans and in the absence of the Secretary of State for External Affairs, I wish to direct my question to the Right Hon. Prime Minister, because I know that he does have an interest in catching salmon.


John Patrick (Pat) Nowlan: Or any kind of fish.


Lloyd Roseville Crouse: In light of the statement which has been made by the Minister of Fisheries and Oceans that the harvest of Atlantic salmon will be reduced this year in Nova Scotia, New Brunswick, and Newfoundland, but not in Quebec, I would like to know what steps the Government is taking to increase surveillance over poachers in the entire Atlantic salmon industry, including the catch taken by the Danes off Greenland, whose interception of Canadian salmon may well be the main cause of the decline in Atlantic salmon stocks. Will the Right Hon. Prime Minister take up this question, which is of very great importance to Atlantic Canada, with the Danish ambassador?
Oral Questions


Mr. Brian Tobin (Parliamentary Secretary to Minister of Fisheries and Oceans):: Madam Speaker, I am pleased to respond to the Hon. Member opposite. I want to assure him, on behalf of the Minister of Fisheries and Oceans, that the Minister and the Government are placing great emphasis on revitalizing, conserving and rebuilding the Atlantic salmon stocks. Indeed, we are concerned about the interception problem and it has been taken into consideration.
I want to assure the Hon. Member that any reduction in quota, which may be experienced anywhere in Atlantic Canada, of salmon or other stock, is a result of the best biological and objective evidence we can be given by our officials, and that the Minister is, as is the Hon. Member, very interested in preserving both the commercial and the sport side of the salmon fishery in Atlantic Canada.


REQUEST FOR STOCK ENHANCEMENT PROGRAM
Lloyd Roseville Crouse: Madam Speaker, I thank the Parliamentary Secretary for his answer. Unfortunately, he did not answer the question. My question was directed to the Right Hon. Prime Minister and I was asking him if he would take up the matter of interception of our Canadian salmon by the Danes off the coast of Greenland. This is a matter that does come under External Affairs and concerns the Right Hon. Prime Minister.
In light of the obvious decline of salmon stocks in Atlantic Canada, when may we anticipate from the Prime Minister's Government a truly meaningful Atlantic salmon enhancement program being established?


Brian Vincent Tobin: Madam Speaker, I want to assure the hon. gentleman opposite that the Minister of Fisheries and Oceans, and indeed the Government, take very seriously our relationships with respect to other nations and fishing treaties, whether they concern salmon off the West Coast, salmon off the East Coast, scallop off the United States, or indeed cod-stocks as far as the EC is concerned.
The Hon. Member opposite, being a member of the Fisheries Committee, knows that the Government of Canada has recently instituted a policy, particularly in fisheries, which says that we will treat our brother and sister nations according to how they respect the treaties we have signed with regard to various stocks. He knows that we have taken very strong and serious stands, in particular with the EEC for example.
Again, I would say that it would be much too simplistic to say that the Danes are the cause and the sole reason for the depletion of the salmon stock in Atlantic Canada. We have to get our own house in order. We are beginning to do that. With the support of the Hon. Member opposite we will see positive results in the next few years.

Introduction of Bills


ELECTORAL BOUNDARIES READJUSTMENT ACT
[Stage Direction]
May 9, 1983

Madam Speaker:: It is my duty to inform the House that an objection signed by the Hon. Members for Edmonton-Strath-cona, Red Deer, Calgary West, Peace River, Edmonton North, Lethbridge-Foothills, Bow River, Medicine Hat, Crowfoot and Simcoe North has been filed with me pursuant to Section 20 of the Electoral Boundaries Readjustment Act, Chapter E-2, R.S.C., 1970, to the report of the Electoral Boundaries Commission for the Province of Alberta.
If the House agrees, I would suggest that we follow past practice and print the text of the objections as an appendix to this day's Votes and Proceedings. Is that agreed?


Some Hon. Members:: Agreed.



ROUTINE PROCEEDINGS


Jean-Luc Pepin: for leave to introduce a Bill to facilitate the transportation, shipping and handling of Western grain and to amend certain Acts in consequence thereof.


Madam Speaker:: Is it the pleasure of the House to adopt this motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Madam Speaker:: All those in favor of the motion will please say yea.


Some Hon. Members:: Yea.


Madam Speaker:: All those opposed will please say nay.


Some Hon. Members:: Nay.


Madam Speaker:: In my opinion the yeas have it.
And more than five Members having risen:


Madam Speaker:: Call in the Members.
[And the division bells having rung.]


SITTING SUSPENDED
Madam Speaker:: I have been advised that the Members are prepared to vote tomorrow morning. I now suspend the sitting until nine o'clock tomorrow morning, at which time the bells will start ringing again. They will be interrupted tonight.


Mr. Prud'homme:: At what time?


Madam Speaker:: At nine o'clock the bells will begin to ring. At 10.40 p.m. the sitting of the House was suspended.


SITTING RESUMED
[Stage Direction]
The House resumed at 9 a.m. Tuesday, May 10, Mr. Francis in the chair.
[And the division bells having stopped at 10.45 a.m.]
Madam Speaker:: The motion is carried.
It being past six o'clock on May 9, I now leave the Chair until tomorrow.
At 10.58 a.m. the House adjourned, without question put, pursuant to Standing Order.

Tuesday, May 10, 1983