1984-05-29

GOVERNMENT ORDERS


Hon. Romeo LeBlanc (Minister of Public Works) moved: that Bill C-37, an Act to amend the National Housing Act, be read the second time and referrred to the Standing Committee on National Resources and Public Works.
He said: Mr. Speaker, as Hon. Members are aware, the Government's housing policies serve all Canadians, whether they are home owners, tenants, members of housing co-operatives, et cetera, or whether they live in urban or rural areas. Federal programs are aimed at providing for the needs of people in all circumstances, be they women raising families on their own, the elderly, the handicapped, or people who cannot provide for themselves within the market system and need help. All these housing needs are of continuing concern. Before too long there will be opportunities to discuss some measures to deal with these problems.
The legislation before us today, Bill C-37, would give effect to the Mortgage Rate Protection Plan which was announced by my colleague the Minister of Finance (Mr. Lalonde) in his Budget address. Since the program was put forward on Budget night, there has been a fair amount of discussion about it in the news media. Hon. Members, as well as the general public, are somewhat familiar with its contents. They are essentially the same as those announced by the Minister of Finance.
The premium would be in the order of 1.5 per cent for the first $70,000 of the mortgage debt or the face value of the mortgage if it is less than $70,000. Claims will be paid to compensate for some of the additional costs related to an increase in mortgage interest rates at the time of renewal. There is no payment for the first two percentage points of increase. That is what I would call the deductible. After that, the program will pick up 75 per cent of the increase up to an additional ten percentage points.
The protection period corresponds to the basic term of the mortgage. A five-year mortgage can be insured against increases occurring during the five years following renewal.
Since interest rates can be changed during the first five years of such a mortgage and the protection covers the next five, the borrower is, in effect, protected for ten years. There will be opportunities, of course, at committee stage of the Bill to discuss detailed provisions. We will be happy to provide Hon. Members with explanations they may require.
I would like to speak for a few minutes today about some of the principles involved in this legislation. I would like to make clear at the outset that this is not a subsidy program. The Mortgage Rate Protection Plan operates on the principle of user-pay. In other words, the premium charged is intended to cover any claims which are likely to be made against the program and the cost of operating the business. The Government stands behind the program's obligations, but it is not expected to put any drain on public funds.
In that regard it is different from the Canada Mortgage Renewal Plan which was introduced for quite a different purpose some years ago. The Mortgage Renewal Plan was designed to give temporary help to Canadian households that found, when they came to renew their mortgage, that they would have to make monthly payments amounting to more than 30 per cent of their incomes. In those circumstances home owners received a straight federal contribution of up to $3,000 to bring their payments down to a manageable level. Although the vast majority of Canadian home owners coped with rising interest rates without any help from the Government, some 21,000 households did receive help under the Canada Mortgage Renewal Plan and for them it was a timely and effective assistance.
The new program, the Mortgage Rate Protection Plan, is a new and unique kind of assistance. It helps home owners to help themselves by making provision ahead of time to reduce the impact on the family budget if interest rates should rise more than two percentage points above the original rate of the mortgage. Another principle which should be recognized, Mr. Speaker, is that the program is not intended to compensate home owners for the full amount of every increase in their mortgage interest rate. That is why the home owner is expected to absorb the first two percentage points of increase and one-quarter of the remaining additional cost up to 10 per cent.
There is one other important feature which I would like to draw to the attention of Hon. Members. I want to emphasize that the provisions of this plan will be retroactive to March 1, 1984, as indicated by the Minister of Finance in his Budget Speech. This means, in effect, that regardless when the Bill is enacted into law, anyone who entered into a mortgage or renewed a mortgage after March 1 is eligible to take part in the program. If, for example, a home owner took out or renewed a mortgage on April 15, he or she may apply for

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coverage under the program as soon as it becomes law. Any claim will be based on the market mortgage rate prevailing on the day of that application, in this case April 15, the day the mortgage was entered into.
The Mortgage Rate Protection Plan is a protection against unaffordable losses. Some of the experiences which home owners have undergone in recent years with high and volatile interest rates have created a good deal of anxiety and shaken confidence in home ownership as a secure investment. The plan is designed to relieve that anxiety and to restore confidence in the housing market.
In that connection, Mr. Speaker, I would like to mention one other feature of the Bill which relates to mortgage and home owners' security. As the Minister of Finance mentioned on Budget night, there is widespread feeling that longer-term mortgages, mortgages to be renewed, say, every ten years instead of every five years or less, would contribute to the stability and growth of the building industry and alleviate people's worries about sudden disastrous changes in interest rates. One way of encouraging longer-term mortgages, the Minister of Finance suggested, would be a system of mortgage-backed securities. The Bill now before us facilitates the introduction of such a system by private enterprise. My colleague, the Minister of State for Finance (Mr. MacLaren), will speak on this aspect of the legislation before us. [Translation]
Mr. Speaker, I think the vast majority of Canadians share my view that if the economy is given careful direction, we can be optimistic about our chances in the long term. However, it is no use pretending we live in a vacuum. Canadians cannot be insulated from the economic developments and realities in other countries and in the rest of the world. Since it is impossible to guarantee interest rates, we are offering a system that, if it performs as we expect it to do, will help us to survive or at least to keep our losses to a minimum.

One other purpose of this Bill, Mr. Speaker, is to serve people who find themselves in a very different position, people in the rural and outlying parts of the country who are in urgent need of safe and healthy shelter. For these people, the amendments which this Bill contains will strengthen the helping hand of the federal Government and allow us to act more quickly and effectively to help rural and native people achieve the cherished goal of so many Canadians, a home of their own. Furthermore, it will allow us for the first time to bring this urgently needed help to all qualified Canadians regardless of the province in which they happen to live.

Mr. Speaker, despite the fact that Canadians have some of the best housing in the world, there are still more than 600,000 homes in this country which are substandard. People are living in overcrowded conditions. Some are living in homes that are
in a poor state of repair and for which they pay too much money. I am sure most Members of this House will agree this is unacceptable.
The Rural and Native Housing Program was implemented in 1974 and is intended for communities of less than 2,500 people. Forgivable loans are awarded for the purpose of rehabilitating homes and making them adequate from a health and safety point of view, and special loans are arranged for urgent repairs, especially before the onset of winter.

But the main emphasis has been on helping people to acquire their own homes by subsidizing mortgage payments and taxes and making a small allowance for utility costs.
The rehabilitation and repair services are funded solely by the federal Government. The Home ownership assistance and the small amount of rental assistance provided must, by the present law, be cost-shared with the provinces according to the terms of the National Housing Act.
While the program is intended to help all low-income people living in the designated areas, people of native ancestry- Metis, non-status Indians and Indians who live off the reserve-are unquestionably the most in need. They are among the worst housed people in Canada. Lack of decent housing is spoiling their health, shortening their lives and hampering their efforts to educate themselves. I can say, however, that the situation is not without hope. Approximately 150,000 homes have been acquired or rehabilitated under the Rural and Native Housing Program since it began ten years ago. I expect an additional 22,000 homes will be provided under that program during the current year.
Some improvements can be introduced within the terms of the legislation already approved by Parliament, but some very important changes can be effected only by the passage of the amendments to the Bill now before the House.
Perhaps the most important change is the amendment dealing with provincial participation. The Act now requires that assistance for home ownership under the program can be provided only on a federal-provincial cost-shared basis. This requirement has proven to be a serious drawback. I am inviting Hon. Members now to rectify the situation. Provincial participation in home owner assistance has been, I am sorry to say, somewhat haphazard. Prince Edward Island has not participated in this aspect of the program since 1977; New Brunswick withdrew from the program in 1983; British Columbia withdrew in 1984; and Quebec has never participated, although, to be fair, I recognize that the Government of the Province of Quebec has done a fair amount of work in the area addressed by this part of the Bill.
According to the 1981 census, more than 40 per cent of the rural households in need are in the four non-participating provinces. Even those provinces which are participating have specified terms and conditions under which they would not provide certain kinds of assistance to certain groups of clients.
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In some cases, even with the best will in the world some provinces could ill afford their share of the cost.
Whatever reasons the provinces may have had for declining to participate, or for participating in a limited way, their decisions have made it impossible to achieve the original objectives of the Rural and Native Housing Program. I have given some importance to that part of the Bill because, although less dramatic than the Mortgage Rate Protection Plan, for a population which suffers the most from its present housing conditions, that part of the legislation is important.
Most of the provisions of the Bill before us regarding the Mortgage Rate Protection Plan and the mortgage-backed securities have been known for some time. They have been evaluated and publicly approved by organizations representing builders, investors, et cetera. The provisions of the Rural and Native Housing Program are also well known and I think respected by all Hon. Members who have an interest in social housing legislation.
The most significant aspect of the Bill is to make its provisions, for the first time in history, available to all Canadians. In the circumstances, I have no hesitation, in commending this Bill to the House for consideration. Hopefully, there will be a disposition to send it to committee where it can be fully discussed and given reasonably rapid passage.


Hon. Roch La Salle (Joliette):: Mr. Speaker, I must say I have a special interest in the legislation presented in the House this morning by the responsible Minister.
First of all, I should emphasize that on this side of the House, my Party, which formed the Government in 1979, made a very specific proposal at the time to cope with the problems and dangers we were expecting even then. It is with regret that I must say in the House today that this Government prevented us from offering a guarantee, a homeowner-ship plan, when we introduced a bill that would provide a tax credit to help homeowners, who as a result of the present Government's refusal to co-operate, experienced far more serious difficulties in subsequent months and years.
Mr. Speaker, I might add that the Progressive Conservative Party has also been concerned about improving the situation in the construction industry and giving thousands of Canadians a chance to own their own homes, and we expressed that concern in the proposal we made at the time. We have maintained our interest in these problems today, Mr. Speaker, and quite properly so, because we all know how much Canadians have suffered and the problems experienced by the construction industry, and the House is also aware that for millions of Canadians, the accompanying insecurity became almost unbearable at a given point.
I think the Minister will understand from our questions and our attitude in the House that we are very much interested in
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this Bill and that with him, we are very anxious to find ways to help more Canadians become homeowners. Home ownership is a concept that we value highly. Security in this vital sector of our economy is also very important, as well as stability, something I think we all want in order to create and maintain employment, for the sake of all Canadians.
I listened carefully to the proposals made by the Minister in this legislation, which is referred to as Bill C-37. I realize that the Government probably has very little room to manoeuvre regarding the amount of assistance it can offer homeowners, and the reason is quite simple: this Government, especially in the last ten years, has put this country deep into debt through its unbridled spending, so it is not surprising it cannot do more, as I believe the Minister remarked earlier. I know he would like to do more for all Canadians with his legislation on housing. However, we too are aware of the state of the Government's finances, and considering the doubts expressed by many sectors of our economy and the Government's uncontrolled spending and rising deficits, clearly the Government does not have much room left. The Minister said himself the government was not offering a subsidy. Thus, new homeowners or homeowners whose mortgage is coming up for renewal will, and the Minister made this quite clear, have to pay the cost of the program. The Mortgage Rate Protection Program tabled by the Government in the House this morning for the benefit of Canadians who are about to buy a home or who will have to renew their mortgage, is a form of insurance that will have to be paid for by the homeowners themselves.
I must add that the fact this Government waited so long before introducing its program ... I wonder why it did not do so a year ago or two years ago, when it would have been far more beneficial, and the Minister realizes this, I am sure, for all homeowners in Canada. We would now be able to say that home ownership is available to all Canadians.
You know, Mr. Speaker, others often tell us: the right of ownership, the right of ownership! Of course, Canadians have the right of ownership, but can they afford to buy a house? That is why I would rather use the word "accessibility", meaning access to home ownership. However, access to home ownership means something only to the extent that Canadians can have affordable interest rates. It must be said as well-and I think the Government is aware of this, even though its Bill is long overdue-that it is important, necessary and even essential to have housing legislation. That possibility might have interesting effects depending on mortgage rates, and it is clear that home ownership can be achieved if interest rates are affordable, for housing is a key issue in Canada, particularly because of our winters. It is just as important as a policy for the survival of agriculture. Any Government which is accountable to the society it represents must bring forward what I would call very special measures in those two sectors. Since we are on the subject of housing, it has become quite clear that

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the Government can no longer evade the issue, and I regret that we had to wait so long for this piece of legislation.
Mr. Speaker, I deplore this situation particularly because I think that, hardly six months ago, this Bill would have cushioned the impact of interest rates which are now climbing. The Minister did remind us that anyone who has renewed a mortgage since March 1 will be covered under this act. That is a good thing in itself, but the fact remains that anyone contemplating the possibility of buying a house in the next few months will be penalized to a certain extent because interest rates have been going up in the past two months and chances are this trend will continue. This Bill does offer some protection, but we are talking today in terms of 14 per cent, plus the 2 per cent operating margin set by the Government. So right now we are looking at minimum rates of 16 or 16.5 per cent, plus the contribution to the insurance program, since any such program obviously calls for premiums. But what the Government is doing is forcing Canadians to pay their insurance premiums without actually guaranteeing that interest rates will not be much higher than they are now, and that must be kept in mind if we are really intent on avoiding using the word "accessibility" as a mere catchword.
Still, Mr. Speaker, we on this side of the House will give serious consideration to the Minister's Bill because, as I said, we know it is important and timely to offer Canadians as much protection as we can. The Government could have done just that a year ago, but it did not. Did the Minister of Finance (Mr. Lalonde) or the Minister responsible then expect rising interest rates? I do not think so, but the truth of the matter is that this legislation is being introduced much too late and that Canadians will not get all the protection and assistance they need because the Government should have made its move a year ago. As I have already said, Mr. Speaker, four years ago, my party made a very interesting suggestion to help homeowners. Our proposal was rejected and nothing has been done ever since, except for the Bill introduced today. The Government is finally introducing a program to provide special assistance for homeowners; as a matter of principle, the Bill cannot be condemned because it provides special assistance to a certain group of people. Once again, Mr. Speaker, what worries me is that this assistance will not be enough to bring about a recovery in the building industry and to provide not just access to homeownership, but also the security which is essential for homeowners and stability in what we call the building or housing sector, which is vitally important to the Canadian economy.
Mr. Speaker, the Minister said earlier that, if the economy is managed carefully, interesting results will be obtained. The Minister himself is confirming that, if the Government had managed the economy carefully these last few years, it would now have more to offer homeowners. Because this same Government is to blame for not having managed the economy carefully, the Minister now has to introduce a Bill which will not have the results we would have wished or would have had,
had the economy been carefully managed by the Government or, at the very least, had the same legislation been introduced 12 months ago. Access to home ownership would have been actually provided to Canadians at the same time as the security which Canadians need and the stability of the vitally important building industry.
The Minister said that this Bill also provides for the issue of mortgage-backed securities, for which subscriptions would increase the supply of long-term mortgage capital. Financial institutions with a mortgage fund could use this system to guarantee the subscribed securities. Of course, all opportunities must be explored to find money to finance those who need mortgages to buy a house.
The Minister also referred to the provisions of the Bill which deal with the Rural and Native Housing Program. Naturally, I have some reservations as concerns the provision which seems to exclude any financial participation of the Provinces, except wherever there is an agreement. The Minister has obviously deemed it appropriate simply to exclude the Provinces and let the Federal Government alone decide to help certain people. As for the principle involved-principles are always well and good, Mr. Speaker. In principle, the Minister is saying that all Canadians, wherever they live, are entitled to Federal Government assistance and subsidies. There is no doubt about that and we do not question this entitlement. However, we believe that, in a federal system, the National Housing Act should reflect the position and the needs of the Provinces and that the latter should have some input in what the Act provides. Of course, the Minister may be right in saying that certain Provinces are more or less interested in the type of grant that the Government is willing to provide. However, I take this opportunity to say that I would still like, and that my party will probably need, to know the real reasons why the Provinces have refused to participate. Perhaps they do not intend to participate financially and have no objection to the Federal Government implementing this legislation. We would still like to know the reaction of the Provinces. Are the non-participating Provinces not objecting to the Federal Government using this legislation to subsidize non-profit organizations directly or to provide them with assistance for home renovations? If the Provinces do not object, fine! However, I believe that it is important for the Provinces to tell us their views on the matter. Otherwise, Mr. Speaker, we would be most eager on this side of the House to see the Provinces participate in the national major decision-making process in view of the relevancy of this very significant piece of legislation. We should ask the Provinces for their view on what they need, and to what extent they are willing, in co-operation with the Federal Government, to help rural centres and categories of people which, according to the Minister, are faced with housing and housing quality problems. This is quite commendable. The Minister has
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indicated to the House that there are in Canada some 600,000 houses in bad repair. I do not question his figures, Mr. Speaker, but I think we should encourage housing up-grading policies. It is all very nice to talk about new housing, but Hon. Members are aware that rehabilitating and repairing some of these houses which are really worth it could often cost a lot less. There is no doubt that we are clearly in favour of a very special type of assistance for these particular areas. However, Mr. Speaker, we insist that we should ask the Provinces what they think and find out whether they could come to a consensus, which would be in keeping with our current political system. As a National Housing Act most directly affects the social climate, we have no other choice but to urge all provincial administrations to go along with this legislation which at any rate should bring about interesting results for the Canadian people.
Over the past few years, Mr. Speaker, the housing situation has been seriously impeded by two serious factors, namely, high costs and shortages. They have been the results of high interest rates and unemployment, as well as economic uncertainties. It is a known fact that when new housing units fall short of the demand, shortages occur.
Current population figures in Canada indicate that 210,000 housing units per year with be needed during the first part of this decade. However, residential building has been clearly below requirements in recent years-159,000 units were built in 1980; 178,000 in 1981; 126,000 in 1982; probably 163,000 in 1983 and almost the same number is forecast for 1984. This leaves us with a shortage 200,000 units.
Due to cost increases, it is no longer profitable to build new apartment buildings. In Ontario, to pay for a new building financed at current rates, the landlord would have to ask $800 per month.
The Canadian Association of Housing and Renewal fears that in spite of increased assistance for the construction of rental accommodation provided in the last budget, the rent which the builder would have to charge to meet expenditures would be too high to remain a viable concern.
Economists generally believe that the desirable vacancy rate for rental housing is 3 per cent. Data on housing requirements were given in a 1981 review made by the Canada Mortgage and Housing Corporation. The term "a housing unit" applies to every kind of housing whether they are apartment buildings, detached or semi-detached houses, etc.
Data on vacancy rates deal with apartment buildings with 6 units or more in the private sector. The survey on vacancy rates by CMHC is made in April and October. The figures for April 1983 will be available at the end of May 1984.
High interest rates on mortages had an impact on the price of housing in Canada. During the fourth quarter of 1983, the average sale price of a house in Canada was $76,800. If we look at a 10 per cent down payment plus property taxes of
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$1,200-while bearing in mind that total payments for principal, interest and taxes should not exceed 30 per cent of gross income-Canadians now need a family income of $36,200 to pay the average price for a home in Canada. In Toronto, Mr. Speaker, people need a family income of $46,000 to be able to afford the average price of $100,300, a home that in Vancouver would cost $114,000 and thus require a family income of $52,000.
Mortgage rates have dropped considerably since the fall of 1981, but this is cold comfort for people who were forced to sell their homes or are paying mortgage rates as high as 22 per cent. In fact, since the beginning of March, mortgage rates have increased 0.75 per cent.
The information on prices was provided by the Canadian Real Estate Association. The income figures are based on a twenty-year mortgage at 13.75 per cent. Figures for other locations are available on request.
Mr. Speaker, I have been trying to describe the kind of situation we are in at the present time and the hardship this represents for the Canadian people.
Once again, Mr. Speaker, the Government's proposal can certainly not be rejected out of hand. I have the impression, however, that the sooner this Bill is referred to the Standing Committee, the better, so that the Committee can make a thorough study of this legislation. In considering the Government's proposal, in committee, we shall be in a position to hear relevant comments from the construction industry, the homeowners association, and probably, I hope, from the provinces. During discussion of the Bill in committee, we shall perhaps be able to produce amendments to improve the legislation and increase the likelihood that the Government's objectives, which in this case are ours as well, will be achieved. In fact, they must be achieved, and this has been obvious for some time.
Mr. Speaker, in the circumstances, I can assure the Government that we do not intend to waste Parliament's time irresponsibly, in considering the Bill now before the House. On the other hand, we shall probably expect a great deal more relevance from comments we shall hear in committee, Mr. Speaker, we shall insist that the parties concerned in the construction industry and in the business world ... We shall try, very objectively, together with the Minister and the Government, to examine the possibility of improving the proposals before the House today, in order to increase availability, security and stability in this area, for the benefit of all Canadians.
In the circumstances, the Minister will realize that many of my colleagues would like to comment as well and express the views and needs of their constituents. We must allow my colleagues a minimum of time to comment on this proposal. Generally speaking, I realize that the Government is trying to provide mortgage rate protection for all Canadians. However, Mr. Speaker, once again, it does not provide a response to the vital needs of Canadians.

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I also realize that this Government, having put this country deep into debt, in a totally irresponsible fashion, has hardly any room to manoeuvre. This is really too bad, because if the country had had better government, we would now be able to do more to give Canadians a chance to own their own homes. As a result of its mismanagement, the Government has sunk the country so deep into debt that it simply has no room left to operate constructively when it has to deal with such basic and vital issues as home ownership. Members on this side of the House can certainly not be held responsible for that. But given the current context, Mr. Speaker, my colleagues and I will try in committee to call in credible witnesses who might be able to make to the Minister and ourselves more relevant and more challenging suggestions likely to make it easier for us to reach our objective, Mr. Speaker, which is to offer more assistance to Canadians whose ambition is to become homeowners. As a corollary, we know how important it is to enable more Canadians to own their home, because a Canadian homeowner usually has a more positive approach. In fact, he becomes a better citizen since he has a direct interest in his home, his municipality and his province simply because he owns something. There is a very significant social connotation with respect to the family, of course and a Canadian who owns his home has a different outlook on life. For all those reasons, including our Canadian climate and the economic impact, we will indeed be receptive to any housing legislation that provides assistance and implements a policy designed to meet the needs of Canadians.
Unfortunately, it is a little bit late to come up with the solution sought by Canadians. The Government has introduced a Bill which will offer some kind of protection but, as I said, it is not what Canadians have been asking for. I doubt that this Bill will have any impact on the recovery of the house construction sector. This legislation will probably only protract a problem which is already too serious, Mr. Speaker, but it will not succeed in rectifying the situation that we wanted to rectify as recently as four or Five years ago; if people had listened to us then, they would at least have had a solution to meet the needs of the time and this solution could have been amended and improved. This would have helped avoid the problems thousands of Canadians have had to face and the difficulties they are still having.
The Minister introduced this Bill today. I can assure you, Mr. Speaker, that we shall examine it with all the objectivity we arecapable of and must have to promote home ownership for Canadians. As for consideration in committee within a relatively short time and then in Committee of the Whole, I am quite prepared to have a very interesting and serious debate. I think that consideration at the committee level will probably have to take longer than expected in view of the importance of the issue and of our desire to listen to those who could help the Government do more to meet our objectives, which are to help Canadians and make homeownership more
readily accessible, as well as provide the stability and security needed in the housing industry.
In closing, Mr. Speaker, I say once again to the Minister that we view this Bill positively. We shall ask for further amendments at the committee stage. We shall insist on knowing the position of the Provinces as concerns the financial assistance the Minister wants to provide for native and rural housing and we sincerely hope, Mr. Speaker, that we shall succeed, in a very positive climate, in developing and approving amendments which would make this legislation even more helpful and encouraging for all Canadians who are trying not only to buy homes, but also to keep the one they have already bought. With this, Mr. Speaker, I leave the floor to other Members who will certainly show as much interest in this matter as I did myself and as the Minister did this morning, and we hope that, thanks to our work at the committee level, the Canadian public will hear proposals that are even more interesting and encouraging than the one we heard this morning.


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, we in the New Democratic Party will be opposing this Bill for a number of reasons. We oppose it mainly because we believe that fundamentally it provides a rationalization for higher interest rates by giving borrowers the illusion that they have some kind of protection when in fact their best protection- long term, stable mortgage rates-has been taken away. It has been taken away over a period of time as a result of the Government's actions. I will review what the Government has done in that respect later.
This Bill also provides the context within which public criticism of the banks for its high interest rates might be muted through the illusion of providing protection.
This Bill represents an admission by the Government of helplessness. It is an admission that it does not have the political or moral will, the economic knowledge or a combination of those factors, to have an independent interest rate policy and a lower interest rate policy in this country. Instead of getting to the heart of the matter, the Government has chosen through this Bill to get into the protection racket as far as mortgages are concerned. It is not challenging Canadians to work with their Government to develop a low-interest rate policy and an independent interest rate policy.
What is provided in this mortgage rate protection plan, or MRPP as it will be known by acronym? For a fee a home buyer will be able to purchase mortgage insurance to cover some of the increase in monthly payments if interest rates rise very quickly. On the surface this sounds as though the Government has finally come around to recognizing the problem faced by mortgage holders some three years ago. Thousands were losing their homes or giving them up voluntarily at that time because mortgage payments were increasing from $200 to $400 monthly.
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If we look more closely at the Bill, Mr. Speaker, it is apparent that this will be very expensive insurance. Premiums will be 1.5 per cent of the mortgage value to be paid when the mortgage is taken out or amortized over the term of the mortgage. We are looking at $1,050 on a $70,000 mortgage, or $11 a month. The insurance will be 2 per cent deductible. This means that if mortgage rates go up 6 per cent between the time the mortgage is taken out and the date of renewal, the insurance will not cover the increases resulting from the first 2 per cent increase. The insurance will cover only three-quarters of the increase in monthly payments over 2 per cent. Therefore, if the rate went up by 6 per cent, the coverage you would receive would be only 3 per cent of the increase, or 50 per cent of your costs. You really only get a significant benefit from this plan, and even then a questionable one, if mortgage rates rise dramatically.
It is appropriate to ask the Minister, how far does the Government expect interest rates to rise? Do we have in this Bill an admission that the Government accepts forecasts by some economists that interest rates will continue to rise and that we are going to go through another period like the one we went through a couple of years ago? Is that the implicit assumption buried between the lines of this Bill? If that is the assumption of this Bill, Mr. Speaker, then Canadians ought to be very worried indeed because they have here an admission of defeat on the part of the Government. This insurance will cover only 25 per cent of increased costs if interest rates rise by 3 per cent, 45 per cent of increased costs if mortgage rates rise by 5 per cent, and 60 per cent of increased costs if mortgage rates rise by 10 per cent. This calculation does not include the cost of the premium. With a conventional five-year mortgage at 12.5 per cent, which would be hard to get now, the total MRPP benefit over five years is calculated at $2,280 assuming, say, a $70,000 mortgage. If you subtract the $1,050 premium, the saving has actually been only $1,230. Over the second five years of your mortgage, you will have paid an additional $6,780 in interest payments. This is the case if interest rates rise a mere 3 per cent.
If the Government were to require banks and other lenders to offer long-term mortgages for certain social needs such as housing, the home buyer would have real stability in his or her mortgage costs and would save over $10,000 over that same five-year period, rather than the $1,230 which he would save under the context of the plan which the Minister is introducing today. Governments could offer home buyers ten times the saving on mortgage payments if it were willing to put some conditions on the lenders.
An indication of the way the Government has tip-toed carefully around the concerns and privileges of the bankers and other mortgage lenders is the Government's assumption that the net cost of the program will be zero. Thus, neither the Government which sets interest rates in the first place, or allows somebody else to set them but is nevertheless involved in the setting of interest rates, nor the banks which make huge profits from high interest rates while pushing thousands of
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Canadians out of their homes, as they did just a few years ago, will be asked to contribute to providing better security in the future. The plan is expected to be self-financing, as the Minister mentioned a few minutes ago. Who will pay the cost? The consumer will pay the full cost.
We are talking about home ownership, Mr. Speaker, and the value Canadians place on the ability to buy their own homes and live in them in security and with a reliable future. This is important to people in my riding, as I am sure it is important to people in the ridings of all Members of Parliament. I come from a suburdan riding located at the northeast corner of Winnipeg, an area which is still growing. New houses are being built. Many families are taking on home ownership for the first time. They are vitally concerned about this issue. In areas of my riding such as Lakeside Meadows, All Seasons Estates, the east end of Transcona and all through North Kildonan, we see people building homes and becoming concerned about interest rates. They are concerned more than ever before because they know, thanks to the experience of a few years ago, that things can get as bad as some people in the past have said they can get. Up until 1982 people did not believe that you could actually have interest rates that were as criminally high as they eventually got in Canada. Having been through that experience, people once bitten are twice shy. They now believe interest rates can go through the roof. Even as we get all this talk about rising interest rates, I am sure that is having an effect on housing construction in the area I represent. Up until now it has seen a bit of revival in certain areas of the riding.
What we want in the final analysis is an affordable mix of housing options, home options, for Canadians. This will mean more attention being paid to co-op housing, for instance. This is opposite to the direction in which the Minister is moving. There are cutbacks in social housing and cutbacks in unit allocations for co-op housing. Regrettably, we do not see the Minister moving on the co-op front. Other members of my caucus, the Hon. Member for Vancouver-Kingsway (Mr. Waddell), the Hon. Member for Prince Albert (Mr. Hovdebo) and others who have concerned themselves about co-op housing will have more to say about that later on.
We need affordable rental accommodation. We have not seen any measures by this Government which went to the heart of that matter. We have seen lots of fancy programs like MURBs and things like that which even the financial community itself admits were not programs that reached the goals for which they were designed.
Finally, we need programs to encourage home ownership. I would say this is the option preferred by most people in my riding, and for this reason I shall pay more attention to this than I will to other areas, such as co-op housing. Home ownership is the preferable option for the people in the riding of Winnipeg-Birds Hill, as indeed it is for me and members of my family who live in the riding.
A home is usually the only major investment a family makes over the course of a lifetime. Most of the families in Winnipeg-Birds Hill are not worrying about the stock market or other

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various forms of investment. Their first worry is home ownership. I sometimes feel that I am in a strange world here when I listen to other Members of Parliament talking about various forms of investment, this tax law and that tax law. Most of the people I know are people whose only major investment is their home. They are not familiar with, nor do they have any desire to be familiar with, nor can they afford to be familiar with, the intricacies of investments on the stock market, or anywhere else for that matter. The investment they make over the course of a lifetime is in their home. It is certainly the most important investment they will ever make, even if it is not the only one. That investment should be a reliable and secure one. It should not be a gamble. Yet that is exactly what home ownership has been reduced to as a result of the policies followed by the Government since the mid-sixties when it began to change the structure of mortgage financing and mortgage policy in the country.
I have heard many older constituents, say those of my parents' generation, remark upon a strange irony which is working itself out in the riding of Winnipeg-Birds Hill as well as in other areas of the country. Many of the people who reached maturity in the early to late forties had a deprived or difficult childhood economically because of the dirty thirties. After the Second World War they moved into a world in which, unlike their childhood, they found relatively full employment, long-term, stable mortgage interest rates, and an economic security of which they and their parents could only have dreamed prior to that time. This is the generation which understandably often reminded their children of what it was like in the dirty thirties.
The irony about which I speak is that the children of that generation had the benefit of post-war economic security in their childhood. Their parents knew what their mortgage payments would be until doomsday. Their fathers had secure jobs. There was predictability and reliability. There may not have been affluence or luxury, but there was economic security. These children who grew up in an atmosphere of economic security are now being subjected to economic insecurity in adulthood as a result of the policies of the Government and the changes which have occurred with respect to mortgage financing.
I often hear parents remark, in a way that strikes me as ironic, about the difficulty faced by their children in terms of home ownership, when they have long since paid off their homes because they had 25-year mortgages at 6 per cent. Many of them are now retired and in perspective, compared with the circumstances of their children, they are in pretty good shape. Their children cannot ever expect to pay off their homes. Their children do not know what the interest rate will be from one year to the next. And they have a government which is committed to allowing unpredictability and confusion to continue.
What is the history of mortgage policy in Canada? In 1967 the Liberals freed the bank rate for mortgages which had been
set at 6 per cent. In 1969, on the advice of Liberal Cabinet Minister Paul Hellyer, who since then has been a Tory, something else and is now reported to be seeking a Liberal nomination once again, the 6.5 per cent ceiling on National Housing Act mortgages was released and permitted to be established by market forces. I am sure the Conservatives liked it, as they like anything having to do with market forces. Again in 1969, on Mr. Hellyer's advice, the five-year rollover was introduced, allowing renegotiation of the interest rate on the mortgage every five years. Prior to this the interest rate on a mortgage was fixed for the entire amortization period, generally 25 years.
In 1973 Bill C-135, the Residential Mortgage Financing Act, was passed by the Liberal Government with Conservative support. The guiding principle of the Bill was to enhance the attractiveness of mortgage investment. Its effect was that by generating an increase in mortgage funds at the unrestricted interest rates, builders and land speculators were encouraged to concentrate on high-priced houses where profit margins were greater and to destroy the moderate and low-income housing market.
In 1974 the Liberals introduced AHOP, another wonderfully successful Liberal program! It was designed to give moderate and low-income people with high earning potential a chance to become involved in home ownership by providing moderately-priced dwellings at a subsidized interest rate. This was an attempt to help make housing affordable, but it was a horrible failure. It is now referred to as "AFLOP" due to the number of defaults on AHOP units. Half the units in some AHOP areas have been vacated due to quit claims or defaults. This is happening right in my own riding. Many people have come to me with this experience. The Government is currently undercutting the remaining AHOP home owners by selling units which it has recovered for up to $10,000 less than the original selling price. The assumptions on which the program was based were incorrect and some types of houses were overbuilt because of this scheme. Interest rates were allowed to climb. AHOP mortgages were not protected from huge increases when the five-year term was up, and incomes did not rise substantially in relation to other costs. AHOP home owners were given no protection against the vagaries of the marketplace.
In 1978 the Liberal Government introduced the concept of a graduated payment mortgage, insured but not offered by CMHC. The GPM has all the worst features of the AHOP scheme in that initial payments do not cover the cost of borrowing, so that by year six of the loan the borrower owes more on the principal than he did when he first took the mortgage out. There is no equity gained until year 11. In effect, people are renting for 10 years. Now they are having great difficulty with mortgage renewals at rates about 5 per cent higher than what they have been paying. When that occurred the Minister responsible for housing, the Hon. Member for York-Scarborough (Mr. Cosgrove), talked about expanding the use of the GPM rather than providing assistance for people in need of help.

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In 1979 the Liberals continued to disentangle CMHC from the housing market by withdrawing altogether their direct lending as well as cutting back substantially on assistance to middle-class and low-income housing. From that point on the role of the Government in the financing of housing was to be restricted to that of a mortgage insurer.
By 1979 we had housing firmly in the hands of the private sector and housing costs had risen dramatically. The Economic Council of Canada estimates that over the seventies as a whole dwelling prices increased about 130 per cent, outpacing the Consumer Price Index which increased by 86 per cent. The whole area of financing has become confused, cluttered and almost unintelligible for the layman.
What was the result of placing this kind of trust in the marketplace back in the early and mid-sixties? Since 1967 mortgage rates have steadily increased, with only minor drops of short duration. In 1969 the Minister responsible for housing said: "I think the Canadian taxpayers would get cheaper money if there were not a fixed ceiling at the present time". When the Minister said that, interest rates were 9 per cent. We have not seen 9 per cent interest rates since.
The AHOP Program which was designed to get lower-income families into home ownership turned out to be a failure, particularly in certain areas due to government economic policy. The graduated payment mortgage, which is basically the same as AHOP in that you can postpone payments, has been difficult for people to afford and has not been too popular because lenders consider it a risky venture.
Lengthening the amortization period has not been much of an advantage to the borrower either. It vastly increases the take of the lender. In many renewals this is becoming almost standard practice. The selling point is that monthly payments will be slightly lower. Let us look at the results. If a borrower took out a $50,000 mortgage at 11.5 per cent amortized over 25 years in 1976, the payments would have been $508.24 per month. Five years later the mortgage must be renewed. The balance remaining on the mortgage is $47,660. The mortgage is reduced by less than $3,000 after making $30,500 in payments. That is what I call criminal. I have never been able to understand how that can be legal, but that seems to be the way the world is. That is why I want to change it.
To renew the mortgage the home owner takes out a new mortgage of $47,660 at 21 per cent. He would now normally have a 20-year amortization period. To make the payment more affordable, he may be offered a longer term which would reduce his monthly payments by about $10. In this case the extra five years will cost the home owner another $48,000 net and will keep him on the hook for further renewals and unpredictable rates.
It is quite clear that bankers are doing the public no favours at all by making these options available to home owners. The Government is doing the public no favours by allowing those kinds of practices to continue. The Government is co-operating with the Official Opposition as it did when we were reviewing
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the Bank Act. The NDP moved amendment after amendment attempting to bring the banks into line to make them act in the interest of home owners, farmers, small businesses and others in Canada who are affected by interest rates and other policies of the banks. Time after time the Conservatives and Liberals voted together against the amendments suggested by the New Democratic Party with regard to the Bank Act.
We see this kind of cosiness again in the softness of the criticism levelled against this Bill by the Progressive Conservative Opposition. This Bill does not challenge the domination of the housing sector by banking decisions. It does not challenge the power and influence of the banks in Canada. That is why the Conservatives are not that disturbed by it. They prefer their own mortgage deductibility plan which they introduced in 1979. They will have occasion to say why they think that plan was better. Actually, that plan probably is preferable to what we are being offered by the Government here. At least with that plan consumers would have some direct benefit instead of paying the entire amount themselves. In fairness, I can understand why they may prefer their own plan to the Government's plan. Our criticisms of the Conservative plan still stand.
However, speaking objectively, what the Government has brought in cannot be construed as a benefit to the consumer in any way except, by analogy, the benefit which accrues to someone who is asked to pay protection money so that his business will not go under. If that is a benefit, the Minister is to be complimented for being the A1 Capone of the housing market with regard to this Bill. The Government is not only trying to keep its hand in the lottery business; it has now entered into another form of illicit trade, the protection racket. What will the Government find its way into next? We leave that to the Liberals' imagination.
The current interest rate debate is really a debate about social and economic values. It is about who is going to carry the burden for what in the country. It is no secret that the Progressive Conservative Party would be doing exactly the same thing with regard to the relationship between the Canadian and American interest rates. The Progressive Conservative Party supports even more integration of the Canadian economy with the American economy. I hope members of the Conservative Party will not get up and pretend that they would do anything different with regard to interest rates in the country. They do not have the political or ideological capacity to do anything about it. The Hon. Member for St. John's West (Mr. Crosbie) has as much as admitted that on a number of occasions. I am sure his frankness gets him into trouble with some of his colleagues. At least he had the decency to admit on a number of occasions that the Conservatives would likely not be doing anything fundamentally different. We saw that when they were in government in 1979.
We need to return to the concept of usury. Usury was regarded as a sin according to pre-capitalist social and economic ethics. We must consider whether we should continue to admire the people who exercise this kind of power over our economy and our lives by owning the money and selling it to us
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at these exorbitant rates. That is our value system presently. We admire the banks. We admire that kind of power and wealth. Should we continue to admire that kind of wealth? Should we continue to allow that kind of power and influence, wielded in a way which is not accountable to the common good and the public interest, nor for the effects that the decisions made in these so-called high places have on the lives of ordinary Canadians? The New Democratic Party feels that it is time we did something about that kind of power. We should find a way-and it is there-to subordinate the economy to the human ideal of fairness and to the well-being of humanity. After all, Mr. Speaker, the economy was made for man, not man for the economy.
I just learned this morning that the word "mortgage" means "pledge unto death" in Latin. I took Latin only in grade nine so I cannot remember whether that is correct or not; but that is what I am told. However, at current interest rates and under current circumstances, that is exactly what a mortgage in Canada is: it is a pledge unto death. A person's life will be at the mercy of the banks until the day he dies. He will never really own his home. It need not be so, Mr. Speaker.
The usurers should not be able to have their way in the world. All we need is the political and moral will to stand up to what I regard as organized theft by which people's very lives are owned by the banks. This kind of thing cannot be right, Mr. Speaker. I do not care what kind of moral gymnastics one goes through, Mr. Speaker; this kind of thing cannot be right.
We must rediscover the outrage that people once felt about this kind of thing. I think we have become too complacent about it. We have come to accept it as being like bad weather that goes on and on. It is not like the weather. It is a result of human decisions and it can be changed as a result of human decisions. It can be changed as a result of collective human and political decisions to do something about the way in which interest rates are set in the country and the way in which money is organized. In the final analysis, Mr. Speaker, it is not simply a technical question; it is a debate about values and about who will bear what burdens in our society.
The issue is too important to be left to the economists. In fact, almost any issue I can think of is too important to be left to the economists because economists are a dime a dozen. One can find an economist who will advance almost any particular view that one would like to have advanced because economists do not practise the kind of science that people think they do, Mr. Speaker. The art of thinking about the economy is, in the final analysis, a moral exercise and not a technical exercise because one must begin with certain assumptions about what constitutes the good of society and about what kind of goals we are moving toward when asking how to organize the economy.
In my view, we in this corner of the House are trying to get people to think about how the economy is not the result of neutral or mechanical market forces but the result of decisions made by human beings, decisions that could be made otherwise and decisions that are based on certain philosophical
premises and assumptions about the nature of things. The sooner we can start thinking about the economy in that way, the sooner we will be able to devise an economy both nationally and internationally that meets the needs of the human race instead of meeting the needs of the bottom lines of the international corporate elite. If today's debate regarding a subject which affects so many Canadians so very directly can be an occasion for asking those wider kinds of questions, then I think it will be very useful. I hope that I have made some contribution to that this morning.


Mr. Doug Lewis (Simcoe North):: Mr. Speaker, I join in this debate with a great deal of interest because after four and a half years of inaction on the part of the Liberal Party, I must say that it is refreshing to see some action being taken by the Government.
The House will know that during the early 1980s the Government instituted a deliberate policy to keep bank interest rates as high as possible. This naturally caused mortgage interest rates to climb to the intolerable level of 14 per cent, 16 per cent, 18 per cent, 20 per cent and even 22 per cent. As a result, families lost their homes through foreclosures or power of sale proceedings, and in a period of rising unemployment and wage and salary cutbacks people found that mortgage payments ate up an increasing proportion of their take-home pay. Real estate values fell as home owners were forced to sell and mortgage terms were reduced from the standard five-year to three-year, two-year, one-year and even six-month terms.
The Liberal Party's high interest rate policy created chaos in the housing sector and fear and panic in the minds of Canadian home owners. We in the Progressive Conservative Party continually called for measures which would create stability in the housing sector for the industry and for the home owner. The Liberal Party turned its back on the Canadian home owner and the industry.
Finally, faced with the harsh reality of public opinion and demand, the Government relented and in the February Budget the Minister of Finance (Mr. Lalonde) promised certain measures to assist the Canadian home owner. We in the Progressive Conservative Party take pride in finally having forced the Liberal Party to listen to the ordinary people rather than to the banks and other financial institutions.
I would like to express my shock in learning that the New Democratic Party does not care about the Canadian home owner. Members of the NDP are rejecting this legislation out of hand. We cannot understand why members of the NDP have abandoned the Canadian home owner. This legislation is far from perfect but as we are Members of Parliament, I would suggest to my colleague in the New Democratic Party that we owe the people of Canada an effort to improve the legislation rather than rejecting it out of hand and railing against the banks.
In the Budget to which I referred, the Government promised three things for which we had been calling. First, it promised protection for the Canadian home owner against rampaging interest rates. We called for measures to allow Canadians to
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discharge their mortgage prior to the expiration date at a charge which was fair to both the mortgagor and the mortgagee. We referred in various speeches to the concern about short-term mortgages. In the Budget such measures were announced. However, we continued to call for the legislation.
I point out to the Government, the people of Canada and my friend from the New Democratic Party that during the course of the debate over bringing the legislation in, we pointed out to the Government a very serious error in its legislation and that was that the original provisions stated very clearly that the interest to be protected would be the market interest rate prevailing for the relevant mortgage term at the time the mortgage protection was taken out. That is the provision as it was originally stated in the Budget Papers. However, since March 1 mortgage interest rates have risen 1.5 per cent because of the Liberal Party's failure to control the rates and, as a result, Canadian home owners would have been prejudiced by the Government's delay in bringing in the legislation.
After we questioned the Minister of Finance in this regard, the Government backed down and announced that it would protect home owners at the interest rate at which they renewed or took out their mortgage after March 1 rather than the interest rate at the time their applications were finally approved. That is what I am talking about when I suggest to my colleague from the NDP that it is our job to improve legislation rather than simply reject it out of hand. The Government has now produced Bill C-36 which amends the Interest Act and Bill C-37 which appears to contain amendments to the native housing provisions of the National Housing Act, legislation which begins to put in place a plan to have mortgage-backed securities and legislation for interest rate protection.
In the time available to me, Mr. Speaker, I would like to deal strictly with the mortgage interest rate protection part of Bill C-37, and when I close I would like to make some reference to the amendments to the Interest Act as they relate to an over-all safety net which will protect the Canadian home owner. In preparing my remarks, I was fortunate enough to have the input and co-operation of real estate lawyers in Orillia and Midland and of the Orillia Real Estate Board. I went to the people who would be handling the legislation at the street level. At the present time I am trying to meet with the real estate board in Midland and Penetanguishene to get their input.
I understand from documents which have come to my attention that the Government has gone to the financial institutions for their input and advice. I would suggest that the Progressive Conservative Party is interested in the people who will be dealing with the Bill, and the people who should be protected, not the banks and the financial institutions. I would like to pay tribute in my remarks to the input which I have received from the people in the riding which I represent.
I think that the Government is proceeding with uncharacteristic haste in this matter. This Bill received first reading on
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Friday and we are now engaged in second reading debate on Tuesday. If we allow for the weekend and printing time, it is unfortunate that the Government has rushed into second reading debate without giving other interested parties an opportunity to review the Bill. I would like to review what the Government said it would do in February and compare that with the concerns of my constituents and Bill C-37.
First, we feel it is necessary that the Government clearly and unequivocally establish the difference between a base rate and a mortgage reference rate. I would suggest that CMHC should set the rates because there is a difference between the rate in Toronto and the rate in Vancouver as opposed to the rate in Orillia and the rate in Midland. In my area there is a difference between the rate in town and out of town. I think it is important that the Government think about how these rates will be set on a monthly basis so that everyone will know exactly what they are dealing with. My colleagues in the legal profession were concerned. They felt that CMHC should establish this rate with objectivity and have the interests of the Canadian home owner at heart rather than the interests of the Canadian banking institutions.
I would like to bring Section 34.81 to the attention of the Government. The wording makes reference to the rate at which a home owner obtains a mortgage if it is higher than the rate at which a home owner originally borrowed the money. I think this provision is open to loose interpretation and abuse. If a mortgagor were to renew a mortgage with a third party who wished to abuse the system, it is possible under that wording that the mortgage could be renewed at an inflated rate. The question would then become whether the mortgagor was taking undue advantage of the renewal provisions in the Bill because the Government failed to tighten it up. If the Government would consider that, it might better relate what the pay-out will be to the CMHC rate. In other words, if the rate at which a person originally borrowed was 12 per cent and they renew at a CMHC rate of 16 per cent, I would peg it to the 16 per cent, not a mortgage to a third party at 20 per cent. I think there should be some protection provided, or some tightening up, so that the Government is protected against unfair abuse.
The next matter which I would like to bring to the attention of the Government is the concern expressed by my colleagues that the original proposal and the present Bill seem to state that the premium for the insurance is the same whether it is a one-year, two-year, three-year, four-year or five-year renewal, rather than being prorated. It was suggested to me that there should be some difference between the premium paid for a one-year term and that of a three-year or five-year term. In other words, the premium should be prorated. It may be intentional to encourage long-term mortgage renewals, or it may be an oversight which penalizes the person who, for one reason or another, renews his mortgage for a shorter term. I would ask the Government to take a look at that.
I would now like to turn to the section which deals with eligible properties. In the original proposal only the principal residence of a home owner would be covered. That included

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single and semi-detached homes, condominium units and mobile homes. In the case of duplexes and other jointly-held buildings, the qualifying mortgage would be apportioned to the unit being occupied by the owner. In Simcoe North there are a great many properties which qualify as duplexes-and I would suspect this is common across Canada-in which the owners occupy one half and rent the other half.
In addition, in Orillia and in my constituency of Simcoe North there are a great many properties which fluctuate between being a principal residence and a recreational residence. Many of my constituents retire from metropolitan areas, move to a recreational residence and make that their permanent residence. I would like to put a question to the Government: What happens to the owner of the duplex-if it is mortgaged as a duplex in which he is residing-when he moves out and sells it to a person who rents out both sides? Does the mortgage interest protection lapse because there is no owner occupancy, or does it extend for the term of the renewal? It might not be something which should be put into the Bill, but it should be dealt with by a regulation.
The next question I have is this. What happens when a person in a principal residence in a recreational area such as mine renews his mortgage, buys insurance protection and then sells to a person from out of town who uses it as a recreational property? Does the mortgage insurance lapse because the property has gone from being a principal rsidence to a recreational property? I am pointing these matters out because it is a question which real estate agents, lawyers, vendors and purchasers will be asking when they exchange properties.
I would like to refer to this matter directly. For practical and administrative purposes, the majority of the people I talked to felt that the payments under the plan should be between CMHC and the mortgagee. I realize that the person who is being protected is the mortgagor who owns the property, but from an administrative standpoint it would be easier for CMHC to deal with the institutions or the mortgages rather than having a third party involved-the owner. That would make it much easier, when a transfer of the property is made, to pin down where the payments are going and to have them immediately benefit the right people. I would suggest to the Government as well that that is a matter which should be dealt with, whether it be by regulation or by way of law.
I would like to pose a question about vendor take-back mortgages which were excluded from the Bill. I have been asked why they have been ignored in this legislation. My colleague from the NDP made reference to the fact that a home is often the major asset of a person. In a lot of ways it is the asset which is sold upon retirement. As a feature of that, the owners take back a mortgage. They take back that mortgage because they will receive regular payments on it and, as well, they can charge interest. Thus the question arises: Why are vendor take-back mortgages excluded? The purchaser of a vendor take-back mortgage will often find that they have a problem when they attempt to renew. In other words, if we are to protect them when they mortgage with an institution, why not protect them when they deal with the vendor on a vendor
take-back mortgage? There may be a very legitimate reason for excluding that situation, but I would ask the Government to consider it.
The next question which arose from my discussions with real estate agents and lawyers was this. The Government does not seem to address itself to default. What would happen when the owner of a property which is mortgage protected under this plan defaults on his or her mortgage payments? If it is a technical default, which perhaps everyone has been guilty of at one time or another, of not paying taxes on time, would that eliminate the protection or would the protection survive that default?
Secondly, does the protection expire upon power of sale proceedings or mortgage foreclosures taking place? The question I have been asked is, where does the protection stand in case of default by an owner, either a technical default or an actual default where there is a power of sale or foreclosure proceeding? I cannot determine from my reading of this Bill last evening exactly how the measure stands on that.
The next concern which was expressed by real estate agents was that lending institutions would require the purchasers to take out this protection on a mandatory basis in order to protect the lending institutions rather than individuals. This would be an additional hardship which would discourage people from buying homes and the protection, because of the front-end mortgage premium. The real estate agents I have discussed this with feel that a mandatory provision-I do not suggest it is in this Bill and perhaps we should make sure it does not get in there anywhere-would decrease competition in the financial marketplace.
I suggested earlier, Mr. Speaker, that I would like to deal with the Interest Act, although it is another Bill, because when I talked to the real estate agents in Orillia they told me that as far as they were concerned those Interest Act provisions are of better benefit to the Canadian home owner than this insurance plan. Quite frankly, they feel that in times of rising interest rates this insurance will not be attractive. In times of low-interest rates, it will be attractive. However, where they felt the abuses were taking place were in the pay-out of the mortgages which, during the Liberal high interest rate period, were offered at 18 per cent, 20 per cent and 22 per cent. The Government's intent, as I read the Budget-and I have not had a chance to review Bill C-36-was that there should be a fair and equitable pay-out of mortgages, fair to the mortgagor and also fair to the mortgagee, on the basis that there are matched funds. But it was suggested to me that the Interest Act legislation will provide a better protection for the Canadian home owner than the Mortgage Rate Protection Plan.
In closing, Mr. Speaker, I would say that it has to be obvious to the Government that our Party has not had an opportunity to discuss the Bill fully and to take a position as to whether or not we support it. However, I can assure the House and the Canadian people that the Progressive Conservative Party has been in the forefront in calling for stability in
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mortgage interest rates and a fair deal for the Canadian home owner. I suggest, Mr. Speaker, that our discussions in caucus and our debate in this House will be based upon that principle.


The Acting Speaker (Mr. Guilbault):: Our rules now provide for a ten-minute period for questions or comments on the Hon. Member's speech.

Are there any questions?


William Alexander (Bill) Blaikie: Mr. Speaker, I have just a comment on what the previous speaker had to say very early on in his remarks. I believe it really goes without saying, but I would like to say it anyway, that it is completely unfair for anyone to suggest that the New Democratic Party, or for that matter anyone here in the House, does not care about the Canadian home owner. We may have disagreements with our Progressive Conservative colleagues and with the Government about how best that care ought to be exercised and what the real effect of certain policies will be. However, I believe it is certainly unfair and unwarranted to rise and suggest that we in this corner do not care about the Canadian home owner, although we have some very serious policy disagreements with the Hon. Member and his Party about how home ownership in this country ought to be fostered and increased and with respect to what other housing policies ought to be followed by the Government. We also share some of that Party's criticisms of the Government. I feel it is completely unfair to suggest-and I just want to put him on the record-that we in the New Democratic Party do not care about Canadian home owners. We obviously do, we always have, and we always will.


Douglas Grinslade Lewis: Mr. Speaker, I listened intently to my colleague's remarks and I could discern from them no real effort to improve the Bill or to come to the defence of the Canadian home owner. I heard a lot about co-op housing, that kind of thing, but I did not hear any real effort to improve the Bill and that is why I was called upon to make that comment. It was from the heart.


William Alexander (Bill) Blaikie: Mr. Speaker, it goes without saying that when a Bill gets into committee, members of the committee from all Parties will make an attempt to improve the Bill. We are debating the principle of the Bill and I spoke about what principles our Party upholds when it comes to a housing policy. I feel the suggestion that the approach of the Progressive Conservative Party is somehow to be exalted is unwarranted. It is trying to give the impression that its approach to this Bill will be non-political, and that it has only the interests of the Canadian home owner at heart when those Hon. Members go into committee.
I know the Hon. Member is going to rise and say that I have summarized his Party's position exactly. However, I do not believe that to be the case, Mr. Speaker. As is often the case in this House, one can reject a Bill, indicating that one is going to oppose it and then in committee try in every way to make the Bill-if it is going to be passed by an arrogant Government
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over opposition to it-as good as it possibly can be. Some Bills, quite frankly, are beyond redemption. We will have to see when we get into the study of this Bill whether or not it belongs in that category and just what kind of amendments we may or may not move. That remains to be seen once we get into committee.


The Acting Speaker (Mr. Guilbault):: Are there any other questions? Debate.


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, I see that the greater part of my presentation will have to be given this afternoon.
However, in preface I want to bring to the attention of the House something which impressed me with respect to the whole housing question and public policy in the housing field. One of the first times I had anything to do with housing policy was when I attended a meeting in Yellowknife around 1965 or 1966. In attendance was the Hon. Jack Pickersgill, who is not a member of the Party which I support. Sometimes we on this side of the House have some rather nasty things to say about him. However, he was there at the head of this meeting listening to presentations on the subject of housing from many of the people who have now become my constituents. The people were coming forward and saying: "I live in a two-room house; I would like a four-room house". Or: "I would like to live in much better circumstances than I do at present".
To all of these inquiries and suggestions, most of which would entail the expenditure of public funds, Jack Pickersgill invariably said: "But you cannot afford it; your income is only so much. You cannot afford the type of housing which you would like. Is it proper that the rest of Canadians should make it possible for you to have the type of housing that you want? Because we all want the best kind of housing".
Therefore, in my presentation this afternoon I will keep in the back of my mind that housing, like everything else, has to be paid for; and to what extent should the individual be responsible for paying for his own housing, and where does the Government fit in? I look forward to debating this issue shortly after three o'clock, Sir.


The Acting Speaker (Mr. Guilbault):: It being one o'clock, I do now leave the chair until two o'clock this afternoon.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
[Stage Direction]
May 29, 1984


Mr. David Kilgour (Edmonton-Strathcona):: Mr. Speaker, will Members of this House and, through them, the Canadian people, apply their minds today to one of history's tragedies and remember the suffering inflicted on the Armenian people between 1915 and 1918? Over one million men, women, and children were slaughtered in an act of genocide which must take its place with events like the Jewish holocaust and the Ukrainian famine. Some people wish this problem would just go away so that mankind's collective guilt may be lessened, but the Armenian slaughter is an act of history and we cannot wipe the slate clean for the Armenian descendants by pretending it never happened.
Just as we in Canada have on our conscience our treatment of our fellow Japanese Canadians, so the Turkish authorities of the day and their successors, along with the major powers by their sin of omission after World War I, and mankind generally, have the Armenian massacre on their consciences. Justice demands an admission of guilt and then an expression of regret, contrition, and penitence by all concerned. Active steps are then needed to give effect to the resolution passed unanimously by this House on February 25, 1982, that the outstanding differences in problems between the Turkish government and the Armenian communities in Canada and throughout the world be resolved in a peaceful manner. I might also add, in a just manner.



HUMAN RIGHTS


Mr. Jim Peterson (Willowdale):: Mr. Speaker, last evening Members of Parliament were guests at a reception hosted by Canada's Armenian community. This reception served a number of purposes. Yesterday, May 28, was the 66th anniversary of the independence of the Republic of Armenia, which subsequently fell on December 2, 1920, to the combined invasion of communist and Turkish forces. It provided an opportunity to reflect on the genocide of 1915, when the Turkish government slaughtered 1.5 million Armenians. This was the first genocide of our century, yet, while documented and accepted as fact throughout the international community, it has not been acknowledged by subsequent Turkish governments. Lastly, it enabled us as parliamentarians to pay tribute to the great contributions made to our nation by the more than 50,000 Canadians of Armenian ancestry.
Such occasions as last evening serve to rekindle friendships, and re-emphasize the need for a peaceful resolution of the Armenian question, based on the spirit of the unanimous resolution of this House passed on February 25, 1982.



CANADA SPORTS POOL CORPORATION-FIRST WEEK'S OPERATION

Mr. Joe Reid (St. Catharines):: Mr. Speaker, no less than four Ministers of Fitness and Amateur Sport have had high-minded but false praise for the Sports Pool. Each Minister spoke of the great benefits the Sports Pool lottery would bring to fitness and amateur sport, the Calgary Olympics, arts and culture, and even medical research. Well, the reality is much different from the rhetoric. Eleven months after the passage of the legislation, following one week of sales, Sports Pool officials report that they do not have the foggiest idea how many tickets were sold, who is selling them, or where they can be purchased. However, they do know that no one won the jackpot.
Canadian taxpayers are on the hook to the Sports Pool to the tune of over $30 million. For that amount the taxpayers should expect something better than shrugs from Sports Pool officials. The beneficiaries of the Sports Pool were also expecting a good deal more. Instead of seeing cold, hard cash, they are seeing a patronage-ridden common betting operation tainting the image of all associated with it. Friends of the Government may not strike out with the Sports Pool, but it is clearly a wash-out for beneficiaries and taxpayers alike.



AIR TRANSPORT


Mr. Andre Maltais (Manicouagan):: Very shortly the Hon. Minister of Transport (Mr. Axworthy) will have to make a decision concerning the Nordair resale, Mr. Speaker.
In view of the fact that Nordair was born in Quebec, that it has expertise in the air transportation business and that it operates in the Manicouagan riding through the Montreal-Fort Chimo flight, Mr. Speaker, I suggest that the Minister of Transport should examine and weigh very carefully the various offers that have been made so far. As a matter of fact, I feel that Innocan has made a most interesting offer for the purchase of Nordair; besides, this firm wants to keep its head office in Montreal and is currently managed by Quebecers; therefore I think that all these historical and economic factors should be closely weighed.
Moreover, I think that in the context of this resale, we should look into a possible merger with Quebecair, or at least an agreement whereby both airlines could work together to the benefit of the people of both Ontario and Quebec, since these two airlines are operating in both provinces.
May 29, 1984



LABOUR RELATIONS


Mr. Derek Blackburn (Brant):: Mr. Speaker, in my constituency of Brant a strike has been going on for over six months at Hussman Store Equipment Limited. The union has not been on strike for over 31 years. In that time there have been only three cases of arbitration. All the workers wanted was a continuation of the existing contract, plus COLA. The company countered with about 25 concessions which were totally unacceptable to the workers.
The reason I raise this in this Chamber is because the company is owned by Illinois Central, I believe, of the United States, and has been causing a great deal of anti-American feeling not only among the trade union movement in Brantford, but among the populace as a whole. In fact even the newspaper is sympathizing with the strikers. The union believes that the company is out to break the union, and the negotiator from the United States, Mr. Hawley, certainly has indicated that is possibly the direction in which they are going.
I call upon the Secretary of State for External Affairs (Mr. MacEachen) and the Minister of Labour (Mr. Ouellet) to get together and try to persuade the company to come back to the bargaining table so that these workers, who have not been on strike for 31 years, can get back to the negotiating table, get the strike settled, and get back to work.



FINANCE


Mr. Jean-Guy Dubois (Lotbiniere):: Mr. Speaker, the old saying: "Plus 5a change, plus c'est pared" fits the Quebec Minister of Finance, Mr. Jacques Parizeau, like a glove. When he brought down his Budget last week, Mr. Parizeau said once again that if there were any problems, it was all the federal Government's fault, because federal transfer payments were being cut by $100 million, which would destabilize Quebec's economy.
Mr. Speaker, I have before me a document published by the Minister of Finance of Canada, the Hon. Marc Lalonde, in which he says that on the contrary, federal transfer payments to the province of Quebec will amount to nearly $5.9 billion during the current fiscal year, which means an increase of more than $220 million over payments for 1983-84.
On the weekend and the days following Mr. Parizeau's Budget Speech, people were saying: Another squabble about figures started by the people in power in Quebec City, by those people in the Parti Quebecois who are always saying the same old thing, and basically, blaming the other guy.
Mr. Speaker, I think Quebecers have had enough of these statements. The Department of Finance and the Minister of Finance of Canada set the record straight in a speech the Minister made not long ago. I should like to say to Quebecers that once again, some people are trying to start a war of figures, which is not justified because in fact some increases are involved. I would urge Quebecers to be discerning and see where the truth lies, and that is what they will do and that is what they are doing ...


Mr. Speaker:: The Hon. Member's time has expired.



MEDICAL CARE


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, it was shocking to read in the media that almost 800 Canadian heart patients learned that their pacemakers are ten times more likely to fail than expected. Along with this, Canadian doctors and patients learned of defects in about 400 artificial heart valves.
What is equally astounding is that more than 10,000 new medical devices that flood the Canadian market every year get no pre-market screening. The only requirement for 95 per cent of devices used in Canada is that manufacturers be able to provide data on the safety and effectiveness of a product should the Government ask for it.
It is a situation that often sees health officials asking for data after someone has either been killed, seriously injured, or there has been a fatal malfunction of the medical device. Worse still, most hazards and misleading claims involving the devices still go unreported and therefore unresolved.
I find this a shocking state of affairs, to say the least. The constant worry alone by those whose very lives depend on these devices, not knowing when some malfunction may speedily and unexpectedly snuff out their lives, must be indeed a daily fearsome and traumatic experience. Therefore I appeal to the Government to take whatever action is necessary to resolve this enormous problem and to make certain that all medical devices can be used with dependability and safety.



CANADA SPORTS POOL CORPORATION-BRITISH COLUMBIA APPOINTMENTS

Mr. Gerry St. Germain (Mission-Port Moody):: Mr. Speaker, a major league baseball team would mean $85 million of stimulus to British Columbia's economy. Yet the federal Government jeopardized B.C.'s chances for a major league base-

May 29, 1984
ball franchise by promoting and pursuing its questionable sports pool.
Major league baseball has deep, well founded concerns about gambling. So should the Canadian Government, but instead it continues to gamble with B.C.'s prospects for a major league baseball franchise.
Its actions raise deep questions about what the Government's priorities are. Its priority does not seem to be sport. It does not seem to be economic stimulus for B.C. which is sorely needed. Rather, its priorities seem to be a regressive tax and Liberal patronage, jobs funded by those least able to pay.
In British Columbia the Sports Pool Corporation hired Lauris Talmey, President of the Liberals' National Women's Commission, as its general manager; Bev Hendrickson, executive assistant to Senator Jack Austin, as its B.C. manager of administration, and Ian Howard, whose company handles the marketing and promotion for the B.C. Sports Pool, was the Liberal Party's public relations director.
Betting in the Sports Pool is a poor investment, as the laws of probability and statistics clearly demonstrate, for everyone but the Liberals who get the jobs. Instead of creating jobs and real hope for Canadians, it only provides another chance for the gritty piglets to eat at the Liberal trough.



VIA RAIL


Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, many western Canadians and western municipalities have appealed to the Minister of Transport to put VIA Rail back on track between Edmonton and Vancouver. This passenger service, which is part of the transcontinental railway system, should never have been reduced in 1981. It must be restored and modernized so that increasing numbers of tourists will join western Canadians to enjoy this practical mode of transportation through the glorious, scenic splendour of the Canadian Rockies and Jasper National Park. Full passenger rail service must be restored in time for Expo '86.
A modernized VIA Rail passenger service from Edmonton to Vancouver will demonstrate the many values of this practical and enjoyable mode of transportation. Trains save more energy, have fewer environmental impacts, are safer and more reliable than other modes of transportation. There is no jet lag and no flat tires. There are both economic and social benefits in creating jobs and serving communities.
Western Canadians deserve the same opportunity for train travel as those who use VIA Rail in the Golden Horseshoe. Restoration of western services is a national responsibility and must be a priority of the Minister of Transport. Canadians are tired of past subsidies to CN and CP and their lack of accountability. The history of CP rip-offs is a national disgrace.


Mr. Speaker:: Order. The Hon. Member's time has expired.



HEALTH CARE


Mr. Stanley Hudecki (Parliamentary Secretary to Minister of National Defence):: Mr. Speaker, the threat of Canadian physicians emigrating to the United States was ever present during the deliberations on the Canada Health Act on the grounds that many physicians would move away from a medical system which they felt curbed their independence and impeded their ability to practise their art under optimum conditions. It is too early to judge the extent of this resettlement. It appears that it is small in number to date.
But there is some evidence already that some prominent Canadian medical specialists, many of whom have gained international reputations by innovating new techniques, have left, or are planning to leave Canada. For these internationally recognized leaders, the United States Department of Immigration makes special provisions, granting them a blanket certification, and admits them under a subcategory of third preference. The number of these Canadian physicians moving to the United States is not great, but the loss to the development of state of the art medicine in Canada is quite considerable. These specialists have been stimulating teachers and have provided an exceptional quality of medical care.
The problem is a serious one. It must be addressed by a committee of the Royal College of Physicians and Surgeons, by representatives of the Department of National Health and Welfare, and by the Canadian Medical Association, in order to stem the brain drain of medical excellence from this country.



ORAL QUESTION PERIOD


Hon. Sinclair Stevens (York-Peel):: Mr. Speaker, my question is directed to the Prime Minister. With the increasingly troublesome situation in the Persian Gulf, would the Prime Minister indicate if the Government is prepared to make a statement to the House concerning this situation, and could he outline if the Government plans to take any specific action to try to resolve this terrible, alarming conflict? We know that there was support for the United Nations Resolution 540 last October on behalf of the people of Canada, but is anything new being contemplated to try to resolve this situation?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the situation in the Gulf is one which is certainly very serious and to which the Government has been giving constant attention. There is no statement planned at this time.


May 29, 1984

The Hon. Member and the House will know that the Secretary of State for External Affairs is meeting with his NATO counterparts now, as indeed we will be meeting in ten days in London at the Economic Summit. The Gulf situation will be discussed at both places. However, I know of no statement contemplated by the Minister at this time.


CONSULTATIONS WITH CANADA
Sinclair McKnight Stevens: Would the Prime Minister indicate if we, as a Government, have been consulted by the United States, Great Britain, France or any other country that may have an interest in that area and, if so, what has been the nature of those consultations? Have we, for example, been invited to participate in any ongoing negotiations with the hope that a settlement could be reached?


Pierre Elliott Trudeau: Mr. Speaker, it would depend on what the Hon. Member has in mind as consultations. It is a matter on which I have consulted in the various meetings I have had with heads of government, particularly when I was in the Persian Gulf a few months ago. Therefore, it is a matter on which there have been consultations.
I know of no formal request made at this time of the Canadian Government, nor have we made any formal request of the United States or any of the countries in the area.


Sinclair McKnight Stevens: Of course, I am referring to the consultations that may have occurred since the escalation of the conflict, the damaging of various ships, and the killing of so many people.


INTERNATIONAL CONCERN
Sinclair McKnight Stevens: Mr. Speaker, when answering the question about consultations, would the Prime Minister also indicate if any arrangements have been made to remove the 50 Canadian workers who are in Iraq, and possibly our Embassy staff, in the event that Iran carries out its threat of a massive attack on Iraq early in June?


Pierre Elliott Trudeau: Mr. Speaker, the Hon. Member seems to want to detach consultations about current events from earlier consultations. The war between Iran and Iraq is one which has been the object of attention by most nations for the past couple of years. We discussed it at great length during my visit to the area. I know that the Secretary of State discussed it at great length during his visit to the area.
I do not think that the current events are different, except maybe slightly in degree, from events which have worried the world and the people in the area for the past two years. We are continuing to consult and continuing to seek solutions to this problem.
I will be quite frank with the Hon. Member. We have no solutions. I have seen no solutions either in the minds of Governments in the area. They are faced with a war which
Oral Questions
everyone deplores and which no one seems to have the power to stop.


CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION VANCOUVER TELEVISION STATION'S APPLICATION TO RELOCATE TRANSMISSION TOWER
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Mr. Speaker, my question is for the Minister of Communications, who is absent. There are only 14 Ministers in the House, and only two of them are leadership candidates.


Some Hon. Members:: Oh, oh!


Benno Friesen: Only two are interested in a British Columbia problem since only two leadership candidates are here. My question concerns a television station in Vancouver, and I will direct it to the Prime Minister.
Television station CKVU is planning, or is making application to relocate its transmission tower, thereby having the effect of dislocating channel 10, the community channel, as well as PBS channel 9, thereby putting PBS on either an impaired or a mid-band channel. Since the newspaper unions were on strike until last week, the public has been totally unaware of this application and, therefore, has been unable to prepare interventions. The closing date for the application is tomorrow. Can the Prime Minister direct the CRTC to postpone hearings in order to preserve some semblance of fairness and give the public a chance to prepare interventions with respect to that application?


Mr. Jack Burghardt (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, I am sure the Hon. Member is well aware that, first, the CRTC operates within its own guidelines as set down by Parliament. I would have hoped the Hon. Member, being a conscientious representative of that area of the country, would have made his own representations to the CRTC. It is not up to the Government of the day to make a specific response or to ask a specific question, as the Hon. Member is suggesting.


IMPACT ON PUBLIC BROADCASTING SERVICE
Benno Friesen: Mr. Speaker, as CKVU is trying to negotiate a sale of that station, and since PBS is one of the most popular stations because from 40 per cent to 70 per cent of its subscribers along the border are Canadians, I would ask the Parliamentary Secretary why the public who want to watch PBS have to turn to an impaired or a mid-band channel in order to enhance the sale of CKVU for a higher profit.


John O. (Jack) Burghardt: Mr. Speaker, we have no evidence that

May 29, 1984
Oral Questions
what the Hon. Member is suggesting is correct. On the one hand, I am surprised the Hon. Member is promoting the programming of PBS, an American channel, which is well recognized and received by many areas of the country. On the other hand, I would have hoped that the Hon. Member would be promoting Canadian content, Canadian programming, and the facilities of Canadian television stations.


NATIONAL FILM BOARD
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I would like to direct a question to the Prime Minister, in the absence of the Minister of Communications. The Prime Minister knows that I have been here quite a long time, and I very seldom complain. But I want to say to the Prime Minister that when the Minister of Communications makes an important statement on film policy and changes in film policy, outside the House when Parliament is meeting, and he is not here to answer questions, there is something wrong.
The Minister of Communications has announced changes in policies which will mean the virtual destruction of the National Film Board as we have known it. The Film Board over 45 years has built an international reputation in explaining to Canadians and to the rest of the world what Canada is all about and what Canada has to offer. The Minister is proposing in his new policy to gut the Film Board. He wants the Film Board to contract out film-making work, to contract out all federal department sponsored production, and to contract out technical services. These were the recommendations of the Appelbaum-Hebert Committee. Representatives of the industry, artists and educators appeared before the standing committee. They advised against this policy. The standing committee advised against it. Why has the Minister rejected the views of the standing committee, listened to the private sector, and is proceeding with a plan to gut the National Film Board?


John O. (Jack) Burghardt: First, may I say it is quite correct that the Minister of Communications today has unveiled a national film and video policy which will not only enhance the entire Canadian film industry but will also enhance the operations of the National Film Board. The Hon. Member knows full well, as a very dedicated member of the Standing Committee on Communications and Culture, that the recommendations made in this national film policy are the basis really of all the recommendations which the standing committee made in reply to the Appelbaum-Hebert report.
I do not know why the Hon. Member is saying that we are destroying the National Film Board. Quite the contrary, Mr. Speaker. The National Film Board will see no lay-offs; funds will be reallocated within the Film Board itself to enhance further not only the work it is doing but also to provide
training and research for new film producers, writers, and actors.


Some Hon. Members:: Hear, hear!


CHANGE IN PRODUCTION POLICY
David Orlikow: Mr. Speaker, if the Film Board is not to get more money, and that is what the Parliamentary Secretary says, if the money is to be reallocated toward training and research, obviously there will be less money for actual production.
The Minister said that a stronger Canadian presence on our cinema and television screens is what he wants, yet he ignores the strength of the Film Board's track record and he will depend upon the private sector. We know that the private sector, if it is going to produce to make money, and that is why it is in business, will have to angle its productions toward the American market. That means there will be fewer Canadian oriented and more American oriented productions. How can you do that and maintain the strength of the National Film Board?


John O. (Jack) Burghardt: Mr. Speaker, one of the major aspects of the National Film Board, the current Board, is Studio D, which is mainly responsible for the productions of programs involving women's issues. Studio D has a tremendous track record. As a matter of fact, it has won a number of Academy Awards. Studio D in the past has hired independent producers and writers to promote and facilitate the various issues and ideas it wanted to produce across Canada. There is nothing new in this area. We just want to expend this operation further to give the private sector, the independent producer, the film maker, the writer and the actor more access to funds and to the availability of the film expertise of the National Film Board.


PROPOSAL TO CREATE CROWN CORPORATION
David Orlikow: Mr Speaker, the Minister has said he would like the National Film Board transformed into a Crown corporation. This is in line with the Bill C-24 proposal to make the Canada Council a Crown corporation. This will undoubtedly increase the bureaucratization of the Film Board and, increase its sensitivity to political influence. How will this help the National Film Board to produce better films or better fulfil its cultural ojbectives?


John O. (Jack) Burghardt: It will make it more accountable, Mr. Speaker.
May 29, 1984


CANADA POST CORPORATION
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Mr. Speaker, my question is directed to the Minister responsible for Canada Post. As we know, Mr. Warren and the Canada Post people are running around like chickens with their heads cut off, trying to get the mail delivered. As an example, I would like to ask the Minister to check out the following. Effective last week all coded mail for New Westminster, Surrey, Delta, Port Coquitlam, and White Rock must be sent to those respective post offices for hand sorting. Previously that mail went to Vancouver to be put through the coding machines. Will the Minister inquire why Canada Post is not using the coding machines? After all, they cost the Canadian taxpayers millions of dollars.


Hon. Andre Ouellet (Minister of Labour):: Mr. Speaker, I shall inquire.


REQUEST THAT MINISTER TABLE RESULTS OF INVESTIGATIONS
A. Daniel McKenzie: Mr. Speaker, I have a supplementary question for the Minister responsible for Canada Post. There have been a number of investigations into the Canada Post operation. The Security Investigation Branch had an inquiry into the computer assisted learning program, and the RCMP have been investigating the Canada Post Corporation. Will the Minister obtain the documents on these two inquiries and table them in the House so we can actually find out what is going on within Canada Post?
[ Translation]


André Ouellet: Mr. Speaker, last week or the week before that, the Hon. Member asked a number of questions when the President of the Canada Post Corporation appeared before the Parliamentary Committee. At that time, many of the allegations made by the Hon. Member were found to be entirely baseless. I do not think it is appropriate for the Hon. Member to use oral question period to ask questions that could have been answered perfectly well by the President when he testified before the Parliamentary Committee.
Considering the lack of truth in the Hon. Member's previous allegations, I am inclined to believe, if the Hon. Member would put his comments today in the same class, that his attempts to dig up examples of alleged mismanagement on the part of the Canada Post Corporation were not particularly successful.
Oral Questions


ESTIMATES
Mr. Thomas Siddon (Richmond-South Delta):: Mr. Speaker, my question is directed to the Minister of State for Economic and Regional Development. The Standing Committee on Finance, Trade and Economic Affairs has been trying to meet with the Minister for several weeks since the Estimates were brought before it. Indeed, the Minister has returned to the House today. He was scheduled to appear before the committee at five o'clock this afternoon to defend his Estimates for the first time since they were brought down over two months ago.
As these Estimates are to be reported back to the House automatically on Thursday if the Minister does not appear before the committee, would he tell us why the committee meeting for five o'clock today has been cancelled? Apparently, according to reliable sources, the meeting has been cancelled because "no Liberal Members could make it", even though that hour was set to suit the Minister's convenience.


Hon. Donald J. Johnston (Minister of State for Economic and Regional Development and Minister of State for Science and Technology):: Mr. Speaker, I apologize, but twice I have been here on days when I understood that there would be a committee hearing. In both instances they were cancelled. I suppose one has to ask the chairman or vice-chairman of the committee, but it certainly has nothing to do with my availability. Obviously I would be quite happy to appear to defend the Estimates.


Thomas Edward Siddon: The Minister knows that many important matters relating to economic and regional development agreements, the Special Recovery Capital Projects and other programs should be discussed with the committee prior to Thursday.


SCHEDULING OF LIBERAL PARTY FUNCTION
Thomas Edward Siddon: Mr. Speaker, would the Minister confirm, as we have been advised by reliable sources, that this evening at five o'clock there is a special event taking place called "Trudeau's Final Dinner"? Indeed, on checking with the Liberal Whip, there is a caucus party at that hour. That is the reason Liberal Members are unable to appear with the Minister before the committee today.


Some Hon. Members:: Shame!


Donald James Johnston: Mr. Speaker, I hope the Hon. Member was not reading from an invitation, but again I do not know. I am here-

May 29, 1984
Oral Questions


Thomas Edward Siddon: Then let us have the committee meeting at five o'clock.


Donald James Johnston: -and I think the committee work on the Estimates is important. The Hon. Member knows that I have always been co-operative in terms of appearing before the committee at any time.


ENVIRONMENTAL AFFAIRS
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is directed to the Minister of the Environment. I am sure he is aware that last week Mr. Donnelly, President of Atomic Energy of Canada Limited, stated that Canada has some interest in storing international nuclear waste from other countries. In light of the fact that not one ounce of the over 100 million tonnes of radioactive waste in Canada is properly permanently stored, would the Minister advise what is the Government's policy now on the storage of international nuclear waste in Canada? Would he table in the House any plans he or Atomic Energy of Canada has regarding the storage of waste anywhere in Canada?


Hon.   Chas. L. Caccia@Minister of the Environment: Mr. Speaker, the Hon. Member should know that we have conducted extensive studies on this matter over past years. Substantial sums of money have been made available in terms of research for the storage of nuclear waste. There is a process in place which needs to be triggered before any decision is made in this respect. Therefore, the matter is well under control in terms of research and of procedure.


James Ross Fulton: I hope the Minister did not confirm that his Department and the Government have plans to bring nuclear waste from other countries into Canada for storage. It seems that was his answer.


NUCLEAR REACTOR SITES
James Ross Fulton: Mr, Speaker, would the Minister advise us whether the Government shares the views of Mr. Donnelly, and it seems of the Hon. Member for Prince George-Peace River, on the lucrative nature of radioactive waste storage for other countries? I am sure the residents of Prince George will be interested to know more about that. Would the Minister also indicate whether or not it is government policy to finance and construct nuclear reactors along Canada's border for the export of power into the United States? Would he confirm those points?


Hon.   Chas. L. Caccia@Minister of the Environment: Mr. Speaker, it is absolutely ludicrous on the Hon. Member's part to suggest that my Department has the intention of bringing in any radioactive waste material. As far as his allegation of arranging, organizing or making plans for sites along the
border is concerned, I should like him to substantiate his claims before even investigating them.


CANADA SPORTS POOL CORPORATION-REQUEST FOR LIST OF DISTRIBUTORS AND ADMINISTRATORS
David Kilgour: Mr. Speaker, my question is directed to the Minister of State for Fitness and Amateur Sport. It is quite obvious that the guidelines for selecting distributors or administrators for the new Canada Sports Pool Corporation are that if two candidates are equally qualified and one has links with the Liberal Party, the latter should be given the distributorship or position.
My question is as follows: Is the Minister prepared to publish today a list of the people working for the Corporation or who have obtained a distributorship? Could the Minister inform the House or the Canadian people whether it is true that Marie-Andre Bastien, Vice-President of the Corporation, has been guaranteed two years' severance pay?


Hon. Jacques Olivier (Minister of State (Fitness and Amateur Sport)):: Mr. Speaker, I would like to start by congratulating my hon. friend opposite on his excellent command of French. I think my hon. friend's premises are false. Unfortunately, he has not had time to hear what I said on the subject, but I said very clearly last week that being a Liberal, a Progressive Conservative or a member of the NDP was not one of the job qualifications. In fact, I hope it will never be used as indication that a person is competent or has sales experience with respect to sports pools or lotteries. In fact, that is a criterion! Previous experience in a similar environment is another. So much for the first part of the Hon. Member's question.
As for the second part, I would like to point out to the Hon. Member that the distributors have yet to be selected. The President of the Canada Sports Pool Corporation informed me last week that no distributors had been selected and that the people who were selling tickets were doing so under contract, with the proviso that they would withdraw as soon as distributors were appointed. That should answer your question. No one has been appointed distributor. As for Mrs. Marie-Andree Bastien, she was appointed by order in council, and that is public information you can check.


REQUEST THAT MINISTER TABLE LIST OF EMPLOYEES
David Kilgour: Mr. Speaker, if that is true, why not publish a list of the people working for the Corporation and who have been given a distributorship? With the list, perhaps the Minister might care to sell me a
May 29, 1984

Sports Pool ticket, and we could then see whether there is a government in the free world that is more incompetent and more inclined to patronage than the Minister's.


Joseph Mario Jacques Olivier: Mr. Speaker, speaking of patronage, perhaps I should quote what the Hon. Member's leader said a while ago. In New Brunswick he said publicly that if he were Prime Minister, he would wait fifteen years and then if there was only one Progressive Conservative left, he would appoint a Liberal. That is patronage. That is real patronage. And I am not about to get involved in that sort of thing, Mr. Speaker. All I have to say to my hon. friend opposite is: Do we have to publish names of all the people who work for Air Canada? Or the names of all the people who work for Canada Post? I do not intend to publish a list, and besides, I am told there are as many Progressive Conservatives in the Sports Pool as there are anywhere else. Except in the last election, when unfortunately, there were more Liberals than Progressive Conservatives.


REGIONAL INDUSTRIAL EXPANSION
Mr. Girve Fretz (Erie):: Mr. Speaker, my question is for the Minister of Regional Industrial Expansion. According to a recent issue of a newspaper in my riding, the Mayor of Port Colborne told City Council that it has a preferred position in the region's special tier one designation for attracting industries to the peninsula. Could the Minister tell me what that special designation is within the region's special tier one?


Hon. Ed Lumley (Minister of Regional Industrial Expansion):: Mr. Speaker, perhaps the Hon. Member could give me a copy of the article. I have never seen the article or heard anything about the discussion. I will get back to him with a proper answer.


Claude Girvin (Girve) Fretz: Mr. Speaker, I will be pleased to supply the Minister with a copy of the newspaper.


REQUEST FOR CLARIFICATION
Claude Girvin (Girve) Fretz: Mr. Speaker, the Mayor has said that within tier one a special designation was given only to the City of Port Colborne. It did not include the other 11 municipalities in the region of Niagara. I am merely asking for clarification on that point.


Edward C. Lumley: Mr. Speaker, the IRDP program is based on census areas. An area is to be treated as a whole. No one part of a census area is to be treated differently from any other part of the census area.
_____________________________4155
Oral Questions ESTIMATES


DEPARTMENT OF ECONOMIC AND REGIONAL DEVELOPMENT- REQUEST THAT COMMITTEE MEETING BE RESCHEDULED
Mr. Scott Fennell (Ontario):: Mr. Speaker, my supplementary question is for the Minister of State for Economic Development. It is supplementary to the question asked by the Hon. Member for Richmond-South Delta. The Minister stated that he would agree to go to the Committee meeting at five o'clock this afternoon. This is very important. Otherwise these estimates will be passed without any committee hearings. Will the Minister commit himself in the House at this time to get together with the chairman and re-schedule that meeting for five o'clock this afternoon?


Donald James Johnston: Mr. Speaker, I had not thought it was my responsibility to manage the committee schedule. I have said that I would be available. I am here. Apparently the meeting has been cancelled. That is the only knowledge I have of it. I am happy to try to comply, but I have taken it off my schedule, as a result.


CORPS OF COMMISSIONAIRES
Mr. John McDermid (Brampton-Georgetown):: Mr. Speaker, my question is for the Prime Minister. Uniformed commissionaires who are primarily veterans have served the federal Government for a long period of time. Is there a deliberate policy now to phase them out of use at federal institutions within the country?


Pierre Elliott Trudeau: No, Mr. Speaker, I know of no such policy.


LAYOFFS AT TORONTO AND MISSISSAUGA
John Horton McDermid: Mr. Speaker, would the Prime Minister personally look into the situation? All of the commissionaires at the postal operations Gateway in Mississauga have been let go. At Toronto International Airport 40 of them have been laid off and they are hiring other security forces to replace them. More layoffs are expected very shortly. These veterans rely on this income to survive because they have very low pensions. Would he personally look into the situation to assure that they are not being laid off and replaced by others?


Pierre Elliott Trudeau: Mr. Speaker, I will be happy to look into the matter.

May 29, 1984
Oral Questions


REGIONAL DEVELOPMENT
Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, my question is for the Minister of State for Economic Development. The task force report on co-operative development strategy for Canada was received today. In the last number of years the Government has poured a lot of money into industrial development in many areas and then turned the industries over to the private sector. A few years later, after skimming off the cream, those industries often closed down their operations. This leaves the workers unemployed again.
The Government has indicated some tentative support for workers' co-ops which give the employees a vested interest in keeping such plants in operation. Will the Minister address the model of workers' co-ops in industrial development and job creation and give the workers the support necessary, rather than passing that money on to the corporate sector?


Donald James Johnston: Mr. Speaker, I have always been a big supporter of the co-operative movement. I think it has many exciting dimensions and is one of the greatest forms of free enterprise. I am delighted to hear the NDP supporting it so vigorously. I intend to make some statements about the cooperative movement in the course of my campaign.


HOUSING CO-OPERATIVES
Stanley J. Hovdebo: Mr. Speaker, since we have that unequivocal support by the Minister, would he support the idea of establishing an infrastructure and support structure for workers' co-ops which would allow those co-ops to develop? That kind of structure was in place for co-op housing and has been undermined by the Government in the last few months. Would the Minister re-establish that kind of support for housing, and also establish support for other groups of co-op development, particularly for worker co-op development as recommended in the co-op task force report?


Donald James Johnston: Mr. Speaker, I have not had the opportunity of reading the co-op task force report. I certainly shall do so. I am told that the efforts of the federal Government in the housing sector have certainly not been reduced at all. It remains a priority. I have just discussed the matter with my colleague, and he would deny adamantly the suggestion that that is being done.
In terms of the co-operative movement per se I would be very interested in considering any structures which the Hon. Member may care to propose. Having wider ownership through the co-operative movement, or through shareholdings directly, and the kinds of incentives that were provided in the last Budget of the Minister of Finance, are all excellent. I
would like to look at any proposals the Hon. Member would care to make to me.


RAILWAYS
Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, my question is for the Minister of Transport. It relates to another chapter in what I could call the alfalfa products freight rate issue in southern Alberta. I hope the Minister recalls my question of last January regarding this matter. At that time he responded very positively that alfalfa products were indeed entitled to the new freight rate schedule.
The Minister should now be aware that the railways, specially the CPR, are charging Tirol Dehydraters of Tilley, Alberta, an extra $400 per container. They are attempting to make this surcharge retroactive to the first of the year. Would the Minister indicate how the railways can ignore the direct instructions which the Minister personally gave to the CTC western division and the railways on this alfalfa freight rate issue?


Hon. Lloyd Axworthy (Minister of Transport):: Mr. Speaker, I have been looking into the second round of complaints which came forward on that particular issue. The railways are claiming that the containers are not railway property, but in fact belong to the marine company which has the actual outright ownership of the containers. They say that it therefore does not fall under the rules of the Western Grain Transportation Act, but rather under the Railway Act and they therefore do not have to apply for new tariffs. However, the Canadian Transport Commission does have the authority to rule that in fact the container tariff can be ruled on under the WGTA. The CTC has not yet ruled on that particular complaint. I expect that it should be able to do so. Therefore, it would have the discretion to determine to whom the containers belong. If it rules that the containers are an asset of the railways, it would come under the jurisdiction of the Western Grain Transportation Act. At this point in time that is up to the CTC to decide.


REQUEST THAT MINISTER CONDUCT INVESTIGATION
Herbert Thomas (Bert) Hargrave: Mr. Speaker, my supplementary question is for the same Minister. I would like to thank him for the substance of his comments. The Minister should be aware that during the adjournment debate on this matter last January 23, the Parliamentary Secretary on duty on that particular occasion speaking on behalf of the Government made this statement:
Alfalfa or any other eligible crop is entitled to move at the statutory rate, whether it moves in containers or by other more traditional means.
May 29, 1984

Tirol Dehydraters, in a recent letter to the CTC which was copied to the Minister, and I am sure the Minister did receive that copy, had this to say:
We spent 10 years developing the market to Japan. If we have to pay anything over and above the new W.G.T.A. rate, we may as well cut back our production and lay off staff because we won't stay in business very long.
The railways are obviously playing games here, Mr. Speaker. Will the Minister please look into this matter once again?


Lloyd Axworthy: Mr. Speaker, I concur with the Hon. Member's sentiments. I think the railways are finding ways to get around the rules. However, in this case there is no doubt that the claim that containers are in fact subject to the railways' own discretion under the provision of the Railway Act is something we are looking at in terms of its legality. I have had legal officials in my own Department examining that, but at the same time the Canadian Transport Commission quite clearly has the authority to rule on the matter by declaring that the containers fall under the provisions of the Western Grain Transportation Act. I will immediately pass on the concerns of the Hon. Member to the Chairman of the CTC so that the CTC will come down with the ruling which, of course, we would both hope would be a favourable one.


FISHERIES
Miss Pat Carney (Vancouver Centre):: Mr. Speaker, my question is addressed to the Minister of Fisheries and Oceans who told the House more than two weeks ago that, within a day or two, he would tell us what arrangements he had made for the 60 fishermen who were displaced from a fishermen's wharf in Vancouver when the Minister issued a private, individual, an exclusive lease for a wharf that the fishermen usually use. I am aware that the Minister may have issued this lease in good faith and that he may have been misled regarding the nature of the support for the lease. However, my question is quite central to the issue of conflict of interest. How can the Minister justify issuing an exclusive lease to a member of one of his own advisory councils, particularly when the advisory council itself never dealt with the issue in any sort of forum?


Hon. Pierre De Bane (Minister of Fisheries and Oceans):: Mr. Speaker, as the Hon. Member has said, we do have a Minister's Advisory Council on the Pacific Coast, which is composed of about 18 people who are actively involved in one aspect or another of the fishing industry. It is precisely because they are active in the fishing industry in one way or another that they are members of that advisory council.
Regarding the particular case referred to by the Hon. Member, the reason why I approved that proposal was because many people, organizations and, if my memory serves me correctly, even the City of Vancouver, supported that project
Oral Questions
which, as the Hon. Member knows, was designed to help the fishermen sell fresh fish on the market. As well, we have taken measures to ensure that all fishermen will have proper berthing facilities in one way or another.


LEASING OF WHARF
Pat Carney: Mr. Speaker, my supplementary question is addressed to the same Minister. The Minister's answer has shown that he still fails to understand that he issued the licence for the lease on the basis of support which was not there. He issued it on the basis of a misleading petition which was signed in good faith by people like the head of the union and representatives of the vessel owners' association and the gill-handlers' groups, et cetera, none of whom knew that the result would be the issuance of a licence to a member of the Minister's Advisory Council and the displacement of 60 commercial fishermen. Since these fishermen will now be issued summonses by the Minister's own Department in violation of an agreement to find other facilities, will the Minister order his Department to cease and desist in the issuance of the summons until he and his advisory council can review this issue? Why does he not call for the resignation from his advisory council of the man who is benefiting from having access to the Minister?


Pierre De Bané: Mr. Speaker, I think the Hon. Member would agree with me that we cannot condone vandalism and illegal vessel tie-ups at a float. I am sure the Hon. Member would agree that the law of this land applies to everyone and that under no circumstances can vandalism be condoned.


Pat Carney: What vandalism?


Pierre De Bané: Second, I cannot agree with the Hon. Member when she is insulting the intelligence of all those who signed that petition who, as she said, were union leaders and representatives of fishing organizations. I cannot believe that the City of Vancouver and the other organizations to which the Hon. Member referred supported that request, while today the Hon. Member is saying that they did not know what they were signing. I would never be tempted to have such little consideration for the intelligence of our people.


MEDICARE
William Alexander (Bill) Blaikie: Mr. Speaker, my question is directed to the Minister of Health and Welfare and deals with the indication by the Government of Alberta that it may try to get around the universality requirements of the Canada Health Act by changing the definition of a resident of Alberta. I was wondering if the Minister had any views on this latest run-around of the Canada Health Act by the Govern-

May 29, 1984
Oral Questions
ment of Alberta, and whether or not she has any contingency plans, either by amendment or regulation, to address this issue should the Government of Alberta proceed in this way?


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, I understand the Member's impatience to see the Canada Health Act fully implemented and respected. However, in the case to which he is referring, it is not a runaround by the Government of Alberta. Rather, it is a document from officials which has been leaked, and the Alberta Minister of Health has denied it. I must go by his word. In theory, if a province were to try to bypass the law of Canada by declaring residents of a province to be non-residents, it would be an obvious case against the Canada Health Act. My officials are monitoring the situation daily.


PROPOSED NATIONAL HEALTH COUNCIL
William Alexander (Bill) Blaikie: Mr. Speaker, I wonder if I might also ask the Minister a question with respect to the implementation of the Canada Health Act. Perhaps she could bring the House up to date on her plans for a national health conference out of which might come a national health council as recommended by the Canadian Nurses' Association and other groups. How are those plans proceeding? Can we expect that that kind of event is being organized and will happen shortly, so that we can get on with the debate about the future of medicare?


Monique Bégin: Mr. Speaker, the answer is yes, we are working on it, but the top priority for my Department and myself in which we are investing most of our efforts and energies is the drafting of the regulations and the consultations with the provinces about the regulations under the Canada Health Act. Today I sent draft regulations to the provinces. That is my first priority. A small group of people within the Department has already started working on the next step, which is a national health conference. As soon as the work on the regulations is done we will invest all of our time and energy in this very important project.


PUBLIC SERVICE
Dave Nickerson: Mr. Speaker, my question is directed to the President of the Treasury Board. What were the results of the test project on direct funds transfer, whereby public servants' salaries were not paid by cheque but were paid directly into their bank accounts by computer hookup? Does the Government plan to extend the use of direct funds transfer?


Hon. Herb Gray (President of the Treasury Board):: Mr. Speaker, the pilot projects have not been completed. They are
carried out on a very limited basis in a way which is voluntary for the public servants involved. We have not made a decision to extend these projects across the Public Service. A decision will not be made until the pilot projects have been completed and the results have been thoroughly evaluated.


FINANCE
Mr. Otto Jelinek (Halton):: Mr. Speaker, my question is directed to the Minister of Finance, who is presently getting a Sports Pool tip on what to buy.
My question is not related to the Sports Pool. It is related to the task force report on alcohol and tobacco tax indexation. In early May the Minister stated in a press release that he would make a decision on the task force report after the Ontario and Quebec provincial Budgets were brought down. Now that both of those Budgets have been tabled-without any increases in alcohol taxation and only a minor increase in tobacco taxation in Quebec-can the Minister honour the commitment which he made in his process release? Can he tell the House and the industry what recommendations of the task force report he is prepared to consider or he is prepared to agree with?


Hon. Marc Lalonde (Minister of Finance):: Mr. Speaker, I have already indicated that I will study the task force report. As the Hon. Member said, there was a tax increase on cigarettes in the Budget of the Province of Quebec. I am also considering the implications of that tax and will make my decision public in due time.


REQUEST THAT TAXES NOT BE INDEXED
Otto John Jelinek: Mr. Speaker, it is because of this type of delay that the tourism industry is suffering so badly. I wish the Minister would act. He promised a decision after the Budgets were tabled. Those Budgets have now been tabled. May I ask the Minister if he could at least assure the tourism industry that the present unfair and unproductive ad valorem tax will not be indexed to the CPI, in order to give the industry some breathing room this year?


Marc Lalonde: Mr. Speaker, perhaps one of the best ways the Hon. Member might make himself useful to the tourist industry would be to stop being ridiculous by making the kind of allegations we have just heard.


An Hon. Member:: Ah, come on!
May 29, 1984


PETITION
[Stage Direction]
Introduction of Bills COMMUNICATIONS

Mr. Speaker:: I have the honour to inform the House that the petition presented by the Hon. Member for Vancouver-Kingsway (Mr. Waddell) on Monday, May 28, 1984, meets the requirements of the Standing Orders as to form.


John O. (Jack) Burghardt: Mr. Speaker, pursuant to Standing Order 46(2) I would like to table on behalf of the Hon. Minister of Communications (Mr. Fox) two copies in both official languages of the national film and video policy.


POINT OF ORDER
Mr. Irenee Pelletier (Sherbrooke):: Mr. Speaker, I have just consulted the Minister of Regional Industrial Expansion (Mr. Lumley) and he has agreed to hold earlier the meeting scheduled for five o'clock which had been cancelled. All Members of the Standing Committee on Regional Development are expected to meet at 3.30 p.m. in Room 308.



ROUTINE PROCEEDINGS


Hon. Yvon Pinard (President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 64(1) I wish to table in both official languages notices of Ways and Means motions with respect to the imposition of a retail sales tax in the Nova Scotia offshore area and to amend to Income Tax Act. Pursuant to Standing Order 64(2) I would also ask the designate the Order of the Day necessary for the consideration of each of these Ways and Means motions.
I would like to take advantage of the situation to inform the House-


REGIONAL AND ECONOMIC DEVELOPMENT
Mr. Rolland Dion (Parliamentary Secretary to Minister of State for Economic and Regional Development and Minister of State for Science and Technology):: Mr. Speaker, pursuant to Standing Order 46(2), I wish to table, in both official languages, a copy of the minutes of the Special Recovery Projects Program entitled "The First Year".


Mr. Geoff Scott (Hamilton-Wentworth):: Mr. Speaker, I rise on a point of order. I would like to echo the comments which were made earlier during Question Period with respect to the Minister of Communications (Mr. Fox), who saw fit to bypass Parliament and issue a major-


Mr. Speaker:: Order. The Hon. Member is not making a point of order.


PETITION
Margaret Anne Mitchell: Mr. Speaker, I have the honour to present a second group of petitions signed by over 1,400 British Columbians, most of whom are parents of young children. They request that Section 175 of the Criminal Code of Canada be revised to prohibit known sex offenders from frequenting areas where children congregate.


Mr. Speaker:: Order, please. I would like to draw to the attention of Hon. Members who are standing that the President of the Privy Council (Mr. Pinard) has the floor and they are being most discourteous.


Yvon Pinard: As far as House business is concerned, I would like to inform the House that following the tabling of these Ways and Means motions, before resuming debate tomorrow on Bill C-37 that is under debate today, we will move concurrence in these Ways and Means motions after Question Period.


WAR VETERANS ALLOWANCE ACT
Hon. W. Bennet Campbell (Minister of Veterans Affairs) moved: for leave to introduce Bill C-39, an Act to amend the War Veterans Allowance Act, the Civilian War Pensions and Allowances Act and certain other Acts in relation thereto.

May 29, 1984
National Housing Act


Mr. Speaker:: Is it the pleasure of the House that the Hon. Minister shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
Mr. Speaker:: When shall the Bill be read a second time? At the next sitting of the House?


Some Hon. Members:: Agreed.


OLD AGE SECURITY
Monique Bégin: for leave to introduce Bill C-40, an Act to amend the Old Age Security Act.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Minister shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
Mr. Speaker:: When shall the Bill be read the second time? At the next sitting of the House?


Some Hon. Members:: Agreed.


OFFICIAL LANGUAGES POLICY AND PROGRAMS
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I rise as co-chairman of the Standing Joint Committee on Official Languages Policy and Programs. I have had the usual consultations with all House leaders and there is agreement that I should as for concurrence in the first report of the Committee which was tabled in the House on May 24, 1984. Mr. Speaker, I think if you ask for concurrence in that report you would receive it.
I would move, therefore, that the first report of the Standing Joint Committee on Official Languages Policy and Programs, presented to the House on Thursday, May 24, 1984, be concurred in.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John Evans (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 778 and 783.


Mr. St. Germain: Was any cost incurred by the government for media monitoring as a result of the announcement by the Minister of Energy, Mines and Resources concerning his intention to run for the leadership of the Liberal Party?


Mr. Leonard Hopkins (Parliamentary Secretary to Minister of Energy, Mines and Resources):: No.


Mr. St. Germain: Since April 1, 1983, did the Department of Energy, Mines and Resources spend any amount for (a) electronic media monitoring services performed by private firms or individual contractors (b) print media clipping services performed by private firms or individual contractors and, if so, in each case, what amount?


Leonard Donald Hopkins: Yes.
(a)	electronic media monitoring services-$19,088.10
(b)	print media clipping services-$13,138.27


John Leslie Evans: Mr. Speaker, if Question No. 359 could be made an order for return, this return would be tabled immediately.


Mr. St. Germain: 1.	Since April 1, 1981 were any firms assisted by funds made available by the Canada Industrial Renewal Board and, if so, how many?
2.	What is a list of the names of the members of the Board and, for each member, what (a) is their background and expertise (b) is the term of their appointment (c) remuneration, including salary or travel expenses, do they receive, and for the length of each appointment to date, what amount was received?
Return tabled.


John Leslie Evans: I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Speaker:: The question enumerated by the Parliamentary Secretary has been answered. Shall the remaining questions stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. LeBlanc that Bill C-37, an Act to amend the National Hous-
[Stage Direction]
May 29, 1984
[Stage Direction]
ing Act, be read the second time and referred to the Standing Committee on National Resources and Public Works.
Dave Nickerson: Mr. Speaker, it is always necessary to get the right balance when it comes to matters of government intervention in the housing market. If one looks back over the last 20 years one will find that two things have happened, one as a direct result of the other. First of all, we can see that those people at the lower end of the market are probably better served today than they were 20 or 30 years ago. Those people who would normally have found themselves living in very poor circumstances, in shacks and what have you, have now, by and large, a reasonable standard of housing. But we have paid for this, because whatever one does in the realm of public policy there is always a cause and effect relationship.
On the other side of the equation we have lost a certain amount of individuality. We have become more dependent upon the state at various levels of government, whether it be federal through CMHC, provincial or at the local level and, of course, we have paid for this in increased taxation. It is always a problem as to where we draw the right balance when the Government becomes involved in the affairs of Canadians.
My approach to Bill C-37 this afternoon will be non-partisan. I would like to address the three main points in the bill which is before us today. The first issue with which I would like to deal is the Mortgage Rate Protection Plan which was promised earlier this year in the Budget of the Minister of Finance (Mr. Lalonde). In my opinion, this is a reasonable approach to take on the question of fluctuating mortgage interest rates. The only problem with it, Sir, is that it is brought in now instead of when it was really needed a year or two years ago. That was the time when people were experiencing a very rapid increase in mortgage interest rates. That was the time, Sir, when householders were leaving the keys to their domicile on the kitchen table and abandoning what equity they had in their house, walking out the door and leaving their house to the tender mercies of the mortgagee. That was when this provision was really needed. However, knowing the Liberal Government and its interest rate policies, I suspect that if it is allowed to continue in office we might very well have a repetition of those extremely high interest rates. Therefore, it is wise of us to address this matter today.
There are a couple of principles which I believe should be built into the scheme. First, the scheme should be voluntary. People should not be forced to pay the premiums. It should be their choice whether or not they want to insure their mortgage. At a time when interest rates are already high and the likelihood is that they will decline rather than increase, I see no real advantage to the mortgagor assuming this extra premium payment in order to insure his mortgage. Also, in my opinion, the scheme should be self-financing. I do not feel that it should put a further burden on the public treasury. With any insurance scheme, unless you get into some kind of re-insurance deal, there is always some risk. However, as far as possible this insurance scheme should be actuarially sound, as should any good insurance scheme.
National Housing Act
When I read through Bill C-37, I find it a little hard to understand some of the details because, as is the case with so much of our financial legislation, it is couched in rather difficult terminology. There are a few items on which I would like further information and I will undoubtedly get this at the committee stage. My first question is how one computes the premium for face value of mortgages in excess of some $70,000? It is rather unclear how one goes about doing that. How is the premium to be paid? Is it to be paid as a lump sum when a mortgage is taken out? Or is it to be paid in monthly instalments?
The method of payment of the premium is something which gives me a little cause for concern. How will the payments be made out of the insurance fund if someone has paid the premium, the interest rates go up and he is eligible to collect back? Will a separate cheque be issued each month to the mortgagor? Is that the way it is going to operate? Will the payments be made to the mortagee rather than to the mortgagor so that the mortgagor pays the standard amount every month, apart from the deductible? Is that the way it is to operate? These are things which will have to be examined in further detail when we get to the committee stage. At the same time I would like to look at the various application forms and everything else which appears to be so necessary when we get into schemes of this nature.
Something else which is dealt with in Bill C-37 is the mortgage-backed securities. I have advocated this for some time as well as other Hon. Members on this side of the House. We believe it is an interesting concept. If one looks at the United States experience with its "Ginny Maes," I believe one will find that this has worked to the advantage of the housing market there. I am pleased that the Government is beginning to see the possibilities of fostering a greater availability of mortgage funds through this mechanism. I suspect that if the system is successful, it could attract substantial amounts of individual savings into the mortgage market. At the present time there are no vehicles in existence which allow the savings, especially in small amounts, of individual Canadians to be put into that mortgage market. By using as intermediary a financial institution, which is envisaged under Bill C-37, we could encourage that. It would be an attractive means of getting more money into this area of the economy.
I have some questions as well as to how the government guarantee might work. I had hoped that before I gave my presentation I could have heard from the Minister of State for Finance (Mr. MacLaren) who, we were given to understand, would speak on this issue and provide us with some of the details. Undoubtedly when he does speak, he will answer some of the questions which have arisen in my mind. How exactly will the guarantee system work? Is it contemplated that institutions issuing mortgage-backed securities will pay a fee into some kind of central fund which is used for insurance purposes? I suspect that that might be the most likely way of doing it.
If there is to be a central fund which can be used to defray expenses in respect of those institutions which do not make a

May 29, 1984
National Housing Act
go of it themselves, how is this fund to be administered? It is obvious that the Government will have to have a large say in the control of this fund. But surely the institutions who put up the money would want some say in the administration thereof so their premiums, for want of a better word, can be kept to a minimum. I would not want to see that fund, as it builds up, used for government purposes. Their government would pay 4 per cent interest the way it does with the Canada Pension Plan funds.
A question that arises, Mr. Speaker, is, if the issuer of the mortgage-backed securities goes bankrupt or finds itself in grave financial difficulties, how will the Government exercise its guarantee to the small investor in the securities? Will the monthly return of principal and interest be made in a continuing manner, or will the Government want to keep to itself the option to pay out on a lump sum basis? I can see where that might be of advantage to the Government or the administrators of what might be called the insurance fund, if that is indeed the way the Government wishes to go about this program. Again, it would be necessary to hear the advice of those who wish to appear before the committee.
The third issue dealt with in this Bill is that of enhancement of the Rural and Native Housing Program. If I might summarize the provisions, the first is an increase in the funds available for these purposes. I do not know if this is included in the Bill, but it is certainly referred to in the Minister's press releases that went out with the Bill. The second point is the removal of the provincial contribution requirement. That could have good and bad points about it. The third is an initiative to allow subsidization of utility and fuel costs in remote northern areas.
I now have some comments on the Rural and Native Housing Program changes contemplated by Bill C-37.1 do not pretend to know much about the situation as it exists in the provinces, so I will speak mainly of my practical experience in the Northwest Territories. It seems to me that the delivery of the services, whether they be health, education or, as in this case, housing, or any type of service, can better be done by the lowest level of government involved. They are the ones who are the most sensitive to local needs and conditions. When housing services are delivered to the public, my experience has generally been that the territorial government has done a better job of it than the federal Government. In the Territories this is done through the instrument of territorial government called the Northwest Territories Housing Corporation.
Despite difficulties it has had in the past, this corporation has on balance done a pretty good job. It is constantly looked at by members of the legislature, and I understand another study is going on of this corporation. But it is a sign of the interest the legislators take in matters of housing and in design of programs, which by and large are delivered in an effective manner.
If the federal Government is to get involved in housing programs of this nature, then it is probably better that it be
through block funding rather than the actual delivery of services. I know that is very difficult to accept, especially by Members on the Government side, because you do not get the political credit and they are always anxious to receive that credit. If you just transfer funds in block from the federal Government to a territory or provincial government, you do not get that credit, but they like to think that they do if they deal with individuals.
As to housing in remote rural areas, I think one of the things that we should focus on is not so much the individual housing itself but the provision of proper municipal services such as water, sewers and paved roads. In much of southern Canada things are taken for granted, but in my area of the country there are very many residences that do not have sewers or running water.
The Minister of Public Works (Mr. LeBlanc), in his presentation this morning when this Bill first came up for discussion, talked of the need to improve health standards through improving housing standards. One way you do that is to have proper running water and sewers. It does not matter how fancy a house you have, you still have problems unless you can hook up to a proper sewage network. So perhaps a better role for the Government in these circumstances would be to help in the financing of these municipal-type services which, in the north in particular, in permafrost areas, are extremely expensive. It can cost eight to ten times more to lay a mile or kilometre of sewer there than it would in southern Canada. Perhaps public funds are better spent in this area rather than trying to do something for every single individual.
In the Northwest Territories, again under the surveillance of the territorial government, the SSHAG, commonly referred to as SSHAG housing projects, have been fairly successful. My predecessor from the Territories, a gentleman by the name of Wally Firth, advocated this type of program for some time. One of the very few things he spoke on in this House was his advocacy of building houses out of local materials using local labour. As a result of his representations and those of many more people, this program came into being and has been reasonably successful. The idea is that you get a grant of maybe $15,000 to $20,000 and build a house out of local materials such as logs using your own labour. That is the theory. Sometimes in practice the amount of government funds which have gone into these things has been way in excess of the amount stipulated.
These are some of the things I wanted to talk about. There was a lot more, but there is not enough time, so I will give you the benefit of my other observations in the future, Mr. Speaker.


The Acting Speaker (Mr. Guilbault):: A ten-minute period is now provided for questions or comments related to the remarks of the hon. gentleman. Are there any questions? Debate.


Mr. Gordon Taylor (Bow River):: Mr. Speaker, I would like to thank the Hon. Minister for giving us this opportunity to discuss housing generally under this Bill. Housing is a very important part of our life. I would not say everyone, but most
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Canadians cherish the hope that they will some day own their own home. Because of the economic conditions which have existed over the past few years, many have come to the conclusion that they will never be able to own their own home, so they want to get security through the next best way, that of renting a home.
On the other hand, there are people who do not want the responsibility of owning a home, paying the taxes, cutting the grass and shovelling the snow. That is their privilege. A former colleague in the Alberta Cabinet said that he got to the point where he just did not want to be bothered with owning a home. He would much rather have someone else cutting the grass and shovelling the snow. He was quite happy, during the last part of his life, to live in rented accommodation. There is a place for both ownership and rentals.
I want to focus my remarks today on the various means by which the Government should make available the opportunity for Canadians to either own or rent homes with some security. 1 will do so from a broad point of view.
First, I would like to deal with one or two points raised by the Hon. Minister about the Mortgage Rate Protection Plan. When I read this Bill last night and heard the Minister speak this morning, I questioned why the Government is getting involved in this program. It is an insurance scheme. Did the Government contact the insurance industry in Canada to determine if it was prepared to develop an insurance policy that would provide some protection? If not, I suggest the Government has missed one of its responsibilities. We have a very viable insurance industry in this country which I believe would be quite capable of devising a plan that would give protection from interest rates if it thought there would be enough money for it to operate successfully.
Although the regulations have not yet been published, it appears that the premiums for this plan are very high. They may or may not be reasonable in contrast to the estimated cost or potential cost of the program. However, the fact that it may cost $1,050 as a maximum premium on a $70,000 mortgage will in itself prevent many people from buying this protection since they will have used all of their money to buy the home. Second, I do not see any indication in the Bill about whether this premium has a duration of six months, as many insurance policies are now, or for a year or, as the Minister stated this morning, if the coverage would be for ten years, at five years with a five-year renewal.
If this premium is to be semi-annual, I do not foresee anyone except the very rich buying this particular policy. A few more may be able to afford it if it is an annual premium, but certainly we should be trying to help those who are least able to help themselves. I question whether those families can afford $1,050 to buy the protection.
Let us use the example of hail insurance on a crop. A farmer depends on that crop for his income after a year of work. There are some farmers who have other income and do not insure the crop because they can absorb a loss for one or even
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two years. They will take a chance by not insuring against hail or frost in a particular year and consequently save that premium, which is a substantial amount of money, if there is no hail or frost. Others cannot afford to buy the insurance because their cash flow is almost nothing and they are therefore forced to take a chance. It will be the same situation with regard to this insurance scheme.
Those who are hardest hit with rate increases on their mortgages will be the ones who are unable to take the protection. That is one of my objections to this Bill.
I would also like to see the regulations since this is only the bones of the Bill. I want to see what the figure will be once all of the regulations are contained in the Bill. It will make a difference as to whether these regulations are sensible and designed to help the poor and middle class or will simply be a gesture that will not help people who really need it.
I want to see the rest of this proposal before it decide to support it or whether my constituents, whom I have the honour to represent, will be able to afford it or if it will help those who need it. With respect to the Mortgage Rate Protection Plan, the Minister said that this is protection against "unaffordable losses", in his words. Of course, the Bill does not protect against unaffordable losses when the interest rises because there is no protection whatsoever when it goes beyond ten points. Therefore, it is not really protecting against the unaffordable losses, only against some losses.
I would like to spend a few minutes speaking about the next item which is a very important part of the Bill. That is the section on the Rural and Native Housing program. It is called the RNHP. Certainly this program was designed to help those who need it the most. Apparently, it has not been working very well because a number of provinces withdrew from it and the Province of Quebec did not participate at all; that province could not see any advantage to the program. Prince Edward Island went into the program, but withdrew in 1979 because it did not find that the program worked satisfactorily. New Brunswick withdrew in 1983 and British Columbia withdrew in 1984. The Minister did not give us any reasons why these provinces withdrew, and I have not checked but we must assume that the provinces did not believe it was working to the advantage of their people. I think we generally agree that provincial governments should be working for the benefit of their people. Apparently, these three provinces did not like the plan and consequently withdrew. The Minister said that 21,000 people received help, but did not specify over what period. However, 21,000 is a reasonable number of people to have received help under this program.
I believe there is a need for this type of legislation. For example, there is a single parent in my riding who has three children. She is doing her best to raise her family properly. She asked me if there was a program that could help her because her house needs shingling and new doors. The winters are rather cold in Alberta. The temperatures sometimes go down to 40 and 50 degrees below zero with a wind chill of 70 below when the wind is blowing. That may not last for many days, but that temperature on one day could freeze someone if

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there is not the proper protection. This lady is worried about how she is going to meet the costs of renovating, rehabilitating her home. I hope this program will help this person and people like her. There are quite a few people in these circumstances.
RR.AP is of assistance. RNHP, according to the Minister this morning, should be another avenue of assistance for the very needy and single parents, particularly women, who have to work and keep their families. They have a tough job making ends meet. Day in and day out they worry whether their health can stand it. They do not make enough to rehabilitate their homes. When they have the advantage of owning a home, it is far better than having to pay rent. If they can get assistance to rehabilitate their houses so they can live in them for a few more years, it is an advantage. Perhaps a roof needs attention. Maybe shingling has to be done. Perhaps they need to put a furnace in the basement to distribute heat throughout their homes to keep warm. They may need proper windows or storm doors. Plastering may be needed. These are things I would like to see included in the Rural and Native Housing Program.
There are people in Canada, and we can find them in every constituency, who have a tough time. In some cases it may be partly their own fault, but largely it is through no fault of their own. People are left with children and burdens. They do their utmost to pay their own way, but some cannot make it. These are the people we all want to help. The single parent who I mentioned is an example. I hope this program can help to shingle her roof or to fix up her house so that she and her children will not be cold every time the wind blows or every time there is a storm.
As the Minister said this morning, this Bill is also for the native people. I cited a case two years ago concerning people on one of my reservations. I have three reservations in my riding of Bow River. In this case 22 people were forced to live in a house that was built for a family of five or six at the most. Imagine, Mr. Speaker, 22 people living in a house. It is not healthy, hygienic, or sound. In a country like Canada, it is neither sensible nor reasonable. Our Indian and native people should not be subjected to that type of thing.
I hope the Government will present a program that will help our native people to rehabilitate their homes. There should be other programs giving our native people and Indian people incentives to build homes in which they can raise their families. Indian women like a nice home just as much as white women do. Indian women like their children to be warm and properly looked after, just as any other mother does. Indian women cry when their children are cold and hungry. They bleed when a needle pricks them. They are human beings. Many people forget that our Indian people are human beings. I once told a chap that a son of a certain Indian had passed away. He shrugged his shoulders and said "so what". He was the son of a native person and that was the biggest loss he ever had. Anything we can do to provide our Indian people with an incentive for them to have homes and to help them rehabilitate their homes so they can have proper living conditions will
make this country greater. This is desperately needed and I agree with the Minister on that point.
We should try to help people to own their own homes. Some people have given up hope that they will ever be able to buy homes. With the prices today many people in their 20s, 30s, and 40s have given up hope of ever being able to buy a home. When you talk about $79,000 or $110,000, you might as well say a million dollars because the amount is meaningless to people who are working day by day and living on pay cheques from week to week. They have never been able to earn high salaries. They would like to have a home. They decide to do the next best thing, which is to rent a home. It gives them a little security.
There are programs available. I want to deal with only one. I am very interested in the co-operative program. I believe the co-op program is a free enterprise program. When the men of Rochdale started the first co-operative, they did not say "we will cut prices". They said that they would charge the regular prices and profits made would go to the people involved. That is free enterprise as far as those people are concerned. It may not be free enterprise for others outside the co-op, but people can secure rental housing, run their own affairs and have security. I want to commend the department for help it has given so far on co-operative housing.
I was very disappointed with the answer given by the Minister the other day when he said that he was cutting back on that program. That program is helping hundreds of people. It is hurting the free enterprise system. Houses are put up for tender. Every dollar given to that program creates homes. When the homes are built, there is no longer a worry to the Government. People run their own affairs. People have some security because their rents are set. If the utilities, the taxes or the interest rate on the mortgage goes up, they know what they have to do, and they run their affairs accordingly. They are all managers of the business. They increase their rents. There is no blame put on the Government. If the rent, the fuel costs, or the mortgage rate goes up, they realize they have to pay a little more. It gives people the freedom to run their own affairs. They do not come to the Government wanting a hand-out. They pay their rents and they run their own affairs.
There is a co-operative in my constituency. This co-operative has some very poor, some not-so-poor, some middle class and a few who are well off in it. As a matter of fact, 72 per cent of the people earn less than $10,000 a year. Eighty per cent earn less than $20,000 a year. The other 20 per cent earn over $20,000. These people have no social stigma at all. No matter what they earn, they all live in the same place. They are members of the same co-operative. They run their business. This is an avenue I would like to see the Minister look at again. It does a tremendous service. Every dollar put into that program goes into building another house. Many of the programs of subsidies and rentals build no new homes.
I see Mr. Speaker indicating that my time is almost up. Obviously I will not be able to deal with the other rental and
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subsidy programs, all of which have their place. I like programs which enable people to help themselves and to run their own affairs. I think there are few other matters more important than housing; housing and food are the basic requirements of our people.


The Acting Speaker (Mr. Guilbault):: Are there any questions or comments relating to the Hon. Member's remarks? Resuming debate, the Hon. Member for Hamilton Mountain (Mr. Deans).


Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, I cannot believe the Government would act so foolishly by bringing forward legislation such as this. In the course of the last three years or four years the Government, with the assistance of Governor Bouey and following the lead of the United States, has allowed interest rates to rise to a point where the majority of Canadian families are afraid to purchase homes. As young people look out their apartment windows-and if they are looking out apartment windows in places like Ottawa, they are paying far too much for them- they think of a day when they might have been able to purchase a home of their own. Families always believed that homes were important and that some day they would not only put a down payment on a home, but Finally pay it off. They believed that would provide them not only with an investment for the future but with a place within which to live as long as they wanted. The actions of the Government since 1980 have resulted in that becoming much more of an unreality and much less of a reality than it had been previously.
The Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie), in speaking to the Bill this morning, set out chronologically the way in which the Government has pursued its policy going back as far as 1967. I will not go over it verbatim, but starting in 1967 the Government made the first of a number of terrible errors in terms of mortgage interest rates. I know, Mr. Speaker, you are not quite old enough to have actually been involved in it, but I am sure you will remember the day when people could assume mortgages with fixed interest rates over a reasonable length of time. They were reasonably secure that they would be able to pay them off. It was not a fluctuating interest rate; it was a fixed-term mortgage. People paid a certain sum from the date of purchase until it was paid off. Starting in 1967, the Government eroded that system to the point, if we look back only two years, where young families and not so young families were faced with mortgage interest rates of 20 per cent and 21 per cent. I want to make it quite clear that the proposed solution does not address the fundamental problem.
The Bill guarantees that interest rates will rise. It makes it possible for financial institutions to allow interest rates for mortgage purposes to increase year over year, claiming that in fact the burden is not being carried by the families involved, that they could have purchased insurance and, therefore, if they did not, it is their own fault. The Bill requires that interest rates rise by 3.5 per cent from their present position, whatever it may be for individual mortgages of individual
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families all across the country. Interest rates have to rise by
3.5	per cent before any benefit accrues to individual families. In essence, this means that interest rates in the case of one-year mortgages, which are approximately 12 per cent, can rise to 15.5 per cent before a single benefit accrues to the individual paying the mortgage.
In the case of five-year mortgages, with interest rates at 14 per cent, the interest rate can rise to 17.5 per cent or nearly 18 per cent before any family would benefit one iota from the particular plan. In fact, interest rates can fluctuate substantially without a single person being able to take advantage of the program. People must put their money up front, 1.5 per cent of the outstanding mortgage. They may be able to pay it by attaching it to the mortgage, in which event they are paying not only the 1.5 per cent, but the interest on the 1.5 per cent over the amortization period. The facts are clear. Interest rates will not be held to an acceptable level for Canadian families as a result of this piece of legislation.
It is fraudulent to say to people that somehow or other this legislation will solve or go even part way to solving the terrible dilemma which confronted so many of them between the years 1980 and 1984. I cannot help but feel that somehow or other the Government has missed the point.
Who is responsible for interest rates going up? If we are to believe the Government, the fault lies with the United States Treasury Board. If we are to believe the Government, it was the fault of the U.S. administration that people in Canada were forced to abandon their homes as a result of mortgage interest rates rising to a point where they could not afford to make their payments. If that be the case, there is something terribly wrong with the relationship between our financial institutions and U.S. financial institutions. More important, there is something wrong with a government which allows the kind of relationship to develop in Canada vis-a-vis the United States that permits something as crucial as mortgages for housing to be determined in another country.
I see the Government House Leader and the Minister responsible for housing present in the Chamber. I put to them that we have to confront interest rates. We do not need fancy schemes. We have to find ways to hold down interest rates for the purpose of assuring that families in Canada will be able to purchase homes of their own at prices they can afford. If we are to encourage the maintenance and further development of what has always been not only the dream of Canadian families but the reality of Canadian families, that is the ability to buy their own homes, we must establish instruments to ensure that people who work in Canada can afford the cost of their homes and their mortgages. This legislation does not do that.
Mortgage interest rates can be set in Canada. Instruments can be found to provide the necessary capital from all investment capital currently made available through all financial institutions, to guarantee a sufficient pool of mortgage money so that Canadians will be able to purchase homes and pay for them.
That was the first commitment we required from the Government. The first commitment was that it would address the

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fundamental problem, and the fundamental problem was that we could not allow mortgage interest rates to fluctuate in the same way as interest rates for all manner of other less important things.
Mortgage interest rates must be treated differently from interest rates on loans for the purpose of purchasing luxury commodities. Mortgage interest rates must be considered an integral part of the Canadian lifestyle. They must be addressed by the Government and its agencies in such a way as to ensure that Canadian families of average income are able to continue to purchase homes and to pay for them. That is the commitment we asked of the Government. That is what we suggested to the Government ought to be done. That is what we have been arguing for all along. It is difficult, but everything is difficult.
It is essential, however, that we separate money to be made available for mortgages from money to be made available for all other kinds of investments. That is the crux of all of this. You would not have to sell insurance against Government incompetence if you set up a program to guarantee that there will be mortgage money available. You do not have to insure yourself against increases which are both unacceptable and undesirable if you have established the principle that out of all the available capital in the country which is currently being used for investment purposes, a significant proportion must be made available for the purpose of providing mortgages for the building of Canada's future. You start from there and make the determination that that is going to happen. Having done that, you begin to address the serious question of how to ensure that there will be decent and affordable housing in all parts of the country at prices which are within the capacity of Canadians to afford.
When I began my speech, I said that this is fraudulent. It really is. This is not only my opinion. You may expect me to rail against the Government for its incompetence and stupidity. The views which I express are views that are being expressed by others. Mr. Claude Roots, the Vice-President of the Canadian Real Estate Association, when referring to this piece of legislation said: "It almost concedes that we have to look forward to a period of higher interest rates." He is a man who deals in the business. He says that this legislation will, in itself, result in higher interest rates.
Andrew Cohen of the Consumers' Association of Canada said that he would not recommend the plan for everybody. The reason he would not recommend it for everyone is that the vast majority of people will never be able to take advantage of it. More importantly, they will find themselves continuing to pay ever-increasing rates of interest to those who loan the money.
Frank Clayton is well known for his expertise in housing. He is a housing economist. He studies the field and provides excellent background material which is used by almost anyone with any interest in the housing business. He says that the plan will be of little help to present home owners. It will be virtually
useless to someone taking out a one-year mortgage since the premium cost is the same regardless.
These are people who work in the field. It is not a matter of me speaking against it for political reasons. I recognize the political risks. People will be told by the Government in a variety of different ways during the course of an election campaign that we spoke against something called protection for mortgagees. We speak against it because it is wrong. It will do exactly the opposite of what is required to be done. By itself it will encourage interest rates to rise. Because of the cost and the fact that there is a 2 per cent allowable interest rate increase, chances are that interest rates can and will rise by 3.5 per cent with impunity. On a 12 per cent mortgage an increase of 3.5 per cent is in excess of a 25 per cent increase. Mortgage interest rates will be able to rise 3.5 per cent before any single home owner will be able to benefit one iota from this. This is happening in the time of six and five.
The reason we are opposed to this is because it creates a sense in the public that something is being done which will be beneficial when in fact it will be detrimental. How far do you go in selling insurance against government incompetence? Is the next step to sell insurance against the Government's mishandling of the financial affairs of the country so that there will be insurance against tax increases? It is ludicrous. Our opposition to this Bill goes right to the core of the question of housing. Affordable housing is a necessity. It cannot be treated in any other way. You may be able to get by without a number of other commodities, but in Canada you cannot get by without a place to live.
In Canada we must begin to debate how to provide that affordable housing. It is not done by conceding that already high interest rates can continue to rise. It is not done by conceding that insuring people against inevitable increases will solve the problem. I feel aggravated by the fact that the Government has done this. There can be no support for this kind of a program.
I could have seen marginal merit had the program kicked in immediately, if the insurance had been against any increases. Deficient in principle as this approach is, in order to make it marginally beneficial, there cannot be a 2 per cent allowable increase. The program must kick in right away or you will find yourself with increases of 3.5 per cent, or even higher. Every single person who has been sucked into buying this will find themselves receiving absolutely no benefit.
I see you are signalling that I do not have any more time, Mr. Speaker. I am sorry about that because there is so much to be said about this. I will close my remarks by saying, through you, to the Minister of Housing (Mr. LeBlanc) that this will not work. It will create false expectations. It will work to the detriment of the housing industry. Of itself it will encourage higher interest rates. It will place a penalty on people who can ill afford it. It will add to the mortgage to be carried by the majority of people when in fact the Minister knows that the level of mortgage indebtedness is now at a serious level. It will do nothing to solve the current problem of people who are locked into mortgages that they cannot afford.
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I am surprised that the Minister brought this forward. I thought he had more commitment than this. I want you to know, Sir, that we do not intend to support this Bill.


The Acting Speaker (Mr. Guilbault):: Are there any questions or comments? The Hon. Member for Burlington on a question.


Mr. Kempling:: No, Mr. Speaker, I have a comment.


Stanley J. Hovdebo: I have a question, Mr. Speaker.


William James Kempling: Go ahead.


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Prince Albert (Mr. Hovdebo).


Stanley J. Hovdebo: Mr. Speaker, I would like to ask the Hon. Member for Hamilton Mountain (Mr. Deans) if he could give us some insight into what effect this Bill will have on the securing of affordable housing for those people in the lower income groups who should be getting housing because they need it. Will this particular Bill make housing more widely available across the board?


Ian Deans: Mr. Speaker, my colleague, of course, has asked one of the most crucial questions. He has asked if this Bill will do anything to improve the housing stock for the lower-income groups and, of course, the answer is quite clearly no, it will not. It will not add to the number of houses being built nor will it make one single family eligible to purchase a home that was not eligible previously.
In order to qualify for the assumption of a mortgage today, one must commit approximately 30 per cent of one's income. The same will be equally true after this Bill has been passed. Those people who do not qualify for mortgages today because of the interest rates which are currently in effect will continue to be unable to qualify for mortgages. The Bill will do absolutely nothing to increase the number of housing units available in the country.


Margaret Anne Mitchell: Mr. Speaker, I would like to ask my colleague a question. In his remarks, he made it quite clear that this Bill will indeed encourage mortgage interest rates to rise rather than control interest rates, which is what most people who are purchasing a home would certainly want. Looking back at the history of the housing policy in the country, I would like to ask the Hon. Member if he feels that the Government should return to the policies that were in place quite a number of years ago.
Perhaps the Hon. Member remembers the years in which it was the practice to have long-term mortgages and set rates of interests which allowed people to plan for the future of their families, to pay off their mortgages and eventually own their own homes in the earlier part of their lifetimes. I wonder if the Hon. Member feels that it is possible to return to that kind of a policy and what suggestions he might have for the Government in that regard.
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Ian Deans: Mr. Speaker, I believe that I am speaking on behalf of the entire Party, but I certainly believe that to begin with, mortgage financing must be treated quite differently from any other kind of financing. That is not unusual, and I say to the Parliamentary Secretary to the President of the Privy Council (Mr. Evans) who is looking at me quizzically, that it is not unusual to treat certain kinds of financing differently from others. He knows that as well as I do. For example, we in Canada have made money available to certain fields of endeavour at a variety of different interest rates with different structures and different time periods of repayment. The Government has pursued that as a matter of practice and as a matter of principle. I suggest to the Hon. Member that that is necessary in this case.
We must look at the benefits of putting money into housing and weigh them against those of putting money into other things. When money is put into housing, the risk of loss is considerably reduced. When money is put into housing, the asset or the house itself is always in existence. It is not an asset that one can put under one's arm and take away. Therefore, the risk to the collateral is much less for homes than it is for a number of other purchases which might be made.
I believe that you can appreciate, Mr. Speaker, as can others, that there is a greater risk involved in financing certain luxury items that can be purchased at interest rates that are in some instances lower than the interest rates that are now being charged for mortgages. I begin by recognizing that in the field of mortgage recovery, the actual loss ratio is very small. The overwhelming majority of mortgage holders continue to make their mortgage payments. More important than that, even those who default on their mortgage payments cannot take the asset with them and, therefore, the asset is available for resale.
We must recognize that every penny invested in housing is returnable in a number of different ways and is perhaps returnable even far in excess of the actual dollar value itself. The money is returned first through the mortgage payments themselves, plus whatever the interest is or the money is returned through rents, depending on whether the home is a rental accommodation or a purchased accommodation. The money is returned through taxes that are paid at the municipal level on the appreciated value of the property as a result of an apartment or single-family dwelling having been built. The money is returned in the form of income taxes that are charged against those who build the accommodation.
Workers who are presently unemployed could be building these accommodations and would be paying perhaps 30 per cent or 35 per cent of their income back in taxes to the federal and provincial Governments. The money is returned through corporate taxes, paid by the corporations, which enter into the business of building the homes that we require. The money is returned through the sales taxes that are applicable, where they are applicable, on materials that go into the building of the homes. When money is invested in a home, an overwhelming benefit is derived. Not only is every penny returned that is put into building a house, but there are tremendous spin-off effects as well.

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That is one of the reasons why we argue with the Govenr-ment that it must address the problem of affordable accommodation in a way far different from the way it is presently being addressed. For example, the Minister of Public Works (Mr. LeBlanc) knows that there have been dramatic cutbacks in funding for co-operative housing at a time when we need more housing. We will deal with that issue on another day in another way.
I would say to my colleague yes, we must establish that pool of finance that will enable us to meet the social need that can be met by the production of homes at an affordable price. If all of the other benefits to which I have referred are taken into account, housing is probably the single greatest economic motivator available to us. I do not have to tell you this, Mr. Speaker, because I know that you are an expert in the field, but for every one job that is created on-site when building a home, almost three jobs are created for the people who must make the various component parts that go into that home.
When a publicly financed, privately financed or a combined publicly and privately financed pool is established in such a way as to open up the field so that more people can afford to buy homes, thus holding interest rates down, then you can see that the evidence is abundant to show that we benefit in many ways. My colleague's question pertains directly to the subject before us and I think she is absolutely correct in saying that we must do that.


The Acting Speaker (Mr. Guilbault):: The Hon. Member for Prince Albert (Mr. Hovdebo) has time for a short question.


Stanley J. Hovdebo: Yes, Mr. Speaker, it is a very short question. The Government would not have put this Bill forward if no one were to benefit from it. I wonder if the Hon. Member for Hamilton Mountain could indicate to us who will really benefit from the passing of this Bill?


Ian Deans: Mr. Speaker, I will answer the question in lieu of making a 40-minute speech on the matter. I think that my colleague is probably aware and I think that most would agree that it is only the financial institutions that will benefit from this Bill. The financial institutions will be able to increase mortgage interest rates by 3.5 per cent and the-


John Leslie Evans: Oh, Ian!


Ian Deans: My colleague, the Hon. Member for Ottawa Centre (Mr. Evans), disagrees. They will be able to increase mortgage interest rates by 3.5 per cent and every single penny of that increase will be charged back to the home owner. That is the problem.


John Leslie Evans: You think they will raise interest rates right out of thin air?


Ian Deans: I do not blame my colleague for asking if I think that they will raise interest rates out of thin air. I think that financial institutions fail to distinguish between their obligation to provide affordable capital for absolutely essential works
and their right within the free market system to expand additional capital on other than necessary works.


The Acting Speaker (Mr. Guilbault):: Resuming debate.


William James Kempling: Mr. Speaker, to say that I am disappointed by this Bill would be an understatement. I had hoped that we would have had something more substantial than what is before us today.
The only way we are going to have competitive interest rates in the mortgage field is by having real competition in the mortgage field. That is the only way we are going to do it. In order to do that, we must have a good supply of money from a variety of sources; not necessarily just from banks and trust companies. We must have more sources for mortgage funds.
In looking at the minutes of the hearings which were conducted by the Finance Committee in 1968, I discovered that the Canadian Bankers' Association appeared before the committee. I was not a Member at that time, however, I read the minutes of the hearings which were held from 1978 to 1981. It was through the Bank Act Amendment of 1968 that banks were allowed into the mortgage field. Representatives of the Canadian Bankers' Association said that if they were allowed into the mortgage field, mortgage rates would drop. They indicated that there would be increased competition because of the amount of money that would be available to place in the mortgage field.
However, the rates did not drop. The rates increased. I am not saying that they should not have increased, but they did increase. The drop which we were supposed to see did not happen. When the Canadian Bankers' Association came before the Finance Committee for the next revision to the Bank Act, I made a point of asking the Chairman of the association why the rates had not dropped as the association had said they would in 1968. The Canadian Bankers' Association had left the committee, the House and the country with the impression that by allowing the banks into the mortgage field, the amount of money available for mortgages would vastly increase. Therefore, according to the supply and demand theory, mortgage rates would drop. If that had happened, the consumer would have benefited, the mortgagee would have benefited, housing would have benefited and the appliance industries and the spin-off of that tremendous, invigorating industry would have gone to the people of the country.
I asked the Chairman of the Canadian Bankers' Association why the rates had not dropped. His reply was interesting. He said: "If we had reduced the rates, we would have been accused of forcing the trust companies out of business." That was his reply. It is on the record of the Finance Committee meetings. He said that the banks would have been accused of lowering the rates and putting the trust companies in jeopardy because of their actions. His answer bothered me. It was not very satisfactory, but he was not about to give us something else.
May 29, 1984

I recall not too many months ago rising in this House time and time again to ask questions of the Minister of Consumer and Corporate Affairs, the Minister responsible for housing, who is in the House today, and the Minister of Finance about mortgage rates. I especially recall the 1981-82 period when mortgage rates were rising very rapidly and the subsequent actions of some of the trust companies. I was concerned that some of the trust companies-in fact, the larger ones were the major culprits-seemed to be able to circumvent the laws of the country and get away with it. I was concerned about the 750,000 Canadians who were trapped into high interest rate mortgages.
I heard various Ministers tell us to wait. They would bring in some relief. Legislation would be brought in to sort out the problem. That is what I was looking for. I remember the Minister of Consumer and Corporate Affairs telling the House that if we would be patient, legislation would be forthcoming. The Minister responsible for housing expressed similar views. He was concerned, and I appreciate that. The Minister of Finance stated that the rates were high enough and that he would speak to the banks and the trust companies to see what he could do about getting them down. Well, we know that in that 1981-82 period interest rates rose to 21.4 per cent. I think that is the highest official record which we have. There may have been a few rates which were higher than that, but the listing which the Bank of Canada provides indicates that 21.4 per cent was the maximum rate. There were, however, interest rates at 20 per cent, 19 per cent, 18 per cent, 17 per cent and so forth.
Thousands of letters came to my office. I was amazed as I had never experienced it as a Member. Obviously, my questions on interest rates had hit a responsive chord across the country. I received letters from every province in Canada. People told me about their mortgage problems and asked whether we could not do something about them. They indicated that they were trapped into high mortgage rates. The rates were dropping, but they could not renegotiate their mortgages. They were also concerned about the interest differential penalty which they would have to pay in order to renegotiate their mortgage.
I began to think back about what had been done in the House during that period. I recall that in late 1974 and early 1975 legislation was before the House which was passed by House and by the Senate. However, I do not believe it was ever put into operation. That legislation would have established mortgage investment corporations and a mortgage bank.


Mr. Ellis:: That is right.


William James Kempling: As my colleague said, "That is right". He remembers this, as we all do.
At that time pension funds were in financial jeopardy because the yield on the securities in which they traditionally invested was dropping. The idea was that we would put together mortgage investment corporations. Those corporations would invest in residential mortgages and would sell the mortgage portfolios to pension funds. If the pension fund
National Housing Act
wanted to cash in that portfolio and put the money into something else, it would come to Ottawa and go to the mortgage bank where it would negotiate. The mortgage portfolio then would be turned into the mortgage bank in Ottawa, the pension fund would get the money and go on with whatever other investment it had in mind. That mortgage portfolio would then be recirculated through the mortgage investment corporations and placed with another pension fund or another institution. That was the theory. It was not original. It had been done in the United States for years. The Bill was one of the best drafted pieces of legislation which I have seen. Witnesses from the United States, who had similar legislation, looked at our legislation. Those witnesses liked some of our features and informed us that they would amend their legislation to make it equal to ours. It was that good in their minds.
We waited with a good deal of anticipation to see the results. It passed the House and it passed the Senate. We rose regularly and asked the then Minister of Finance, who happened to be John Turner, when the legislation would go forward. His reply was that the Government could not find a suitable person to head the mortgage bank. I do not want to be political, but even in those days I am sure that there were a few defeated Liberals around who could have been put in charge of a federal mortgage bank. Mr. Turner used that excuse for a number of months. Then, as we all know and as history has recorded, he departed the hallowed halls of the House of Commons and went to other climes. Then we asked his successor, Donald Macdonald, who now heads a royal commission, what was happening to the legislation.
He waffled on it several times but finally he said, "Well, we have discussed this matter with the financial institutions and they have convinced us that this sort of legislation is not required". Can you imagine that, Mr. Speaker? A Bill was passed by the House of Commons, it went through debate and into committee, back into debate, then to the Senate, was passed by the Senate, and was all set to go, then the financial institutions told the then Minister of Finance it was not necessary, and the whole thing was dropped. The tragedy is that that Bill had in it a "truth in lending" section which I thought might have been in Bill C-37 and in the subsequent parallel Bill on amendments to the Interest Act. That legislation had it all there and I wonder now if we had just gone ahead with it, whether we would be in the mess we are in today.
I took some interest in that Bill. I recall going to the Library of Parliament and it was not even on the computer. I have one of the few copies of the Bill, I am sure. In fact, I drafted a Private Members' Bill of my own by lifting sections out of that Bill because it was such a good piece of legislation. If we had only gone ahead with it, we would not need this legislation today.
I believe the difficulties that many mortgagees faced in 1981-1982 would not have had to be faced. We would not have had this terrible argument about interest differential charges

May 29, 1984
National Housing Act
and all the nonsense surrounding that. We would not have the trust companies spouting such terrible rhetoric as, "You see, we have some money out there and we only have it in a GIC for a year or for five years and that is the money we are going to give you on a three-year or five-year mortgage". That is nonsense. Anyone who knows anything about GICs and how they are invested knows that that is just nonsense. However, that excuse is still being used today. I talked to a banker the other day and he gave me the same story.
Therefore, when I say to the Minister that I am disappointed in this Bill in the way it has been presented, 1 am serious. We are going to pass it on into committee, I am sure, and I hope that we can make some changes to it in committee which will give it at least a bit of life. However, I am terribly disappointed that it is not going to do what I thought was the intent of the Minister and his colleagues, the Minister of Consumer and Corporate Affairs (Mrs. Erola) and the Minister of Finance (Mr. Lalonde). It just does not address the problems with which many people are still faced. I am still receiving letters from people who are trapped in five-year mortgages with interest rates at 17.5 per cent or 19.5 per cent which they cannot get out of.
I talked to the Minister of Consumer and Corporate Affairs and the Minister of Finance at various times about this. I was particularly incensed at some of the verbiage in the mortgage renewal contracts. I do not see anything in Bill C-37 or Bill C-36 which is going to stop similar verbiage from being put into new mortgage renewal contracts. I was incensed that these institutions would put in their mortgage renewal contracts clauses which made the granting of mortgages conditional upon the mortgagees waiving rights which had been established for them by the Parliament of Canada and by the legislatures of at least two provinces in this country. It cut me to the quick to think that a corporate body could insert a clause into a renewal contract for a mortgage which says, "You waive your rights under Section so and so of such and such an Act", or that they could change the dating of a contract and thereby wipe aside a judgment of the Supreme Court of British Columbia.
I am at a loss for words to describe what I think of that. It is beyond credibility that these institutions would do that. I took the two particular clauses in the mortgage renewal agreements to people who I thought were very learned counsel, who practised in the high court, and asked their views on it. Their view was that it would not stand up in court. That is fine, but it is no consolation to a person who has signed the mortgage renewal agreement. It is no consolation whatsoever.
As late as a couple of weeks ago, the Superintendent of Insurance was before a committee of this House and I asked him about this. He agreed with me that these clauses should not be in there, but they were in there. The legal opinion he had received from his authorities was that those clauses, if they went to court, would not stand up. What a terrible thing to put a mortgagee through. If someone goes into the investment community and asks what is the best thing to invest in, he is told, "If you own a home, pay off your mortgage. You
cannot have a better investment", and here we are allowing corporate bodies, trust companies, banks and others, to put these kinds of clauses in contracts and we do nothing about it.
We are allowing corporate bodies to take an Act of Parliament and just brush it aside. They can take an Act of the provinces and just brush it aside. They can take a judgment of the Supreme Court of British Columbia and brush it aside. This Parliament, the Government, the Ministers and the officials who are charged with that responsibility, do nothing whatsoever about it. They say it is too bad. They say it will not stand up in court. However, that is no consolation to the person who takes the mortgage. That is my point. We have failed the Canadian home owner. Some of the trust companies,
I must say some of the smaller ones, have recanted. A couple of the larger institutions, when pressed to the wall with court action, recanted and allowed mortgages to be rewritten at a lower rate of interest in payment of penalties as prescribed in our legislation.
However, this legislation falls far short of what I thought it was going to do. I cannot really see anyone going out on the basis of this legislation and buying a five-year mortgage. I just cannot believe that they are going to do that. There are some other features in this legislation which we are going to get into in committee and I will tell the Minister now that he had better be well primed and briefed, as I know he usually is. I am sure he will have his officials there. There are going to be some pretty hard questions put to the Minister at that time because I am not at all convinced that this legislation is really going to do that much. It will generate a good deal of publicity if people do not read beyond headlines such as, "Government introduces a mortgage protection plan". It sounds great until you read the fine details, and when you do, you find it is really not going to help that many people.
I will conclude by saying that I believe our intention is to let this legislation pass on to committee at the appropriate time in the hope that at that point we can convince the Minister that some changes should be made in the legislation which will give a break and a benefit to the mortgagee and not just give the mortgagor more and more protection.


The Acting Speaker (Mr. Guilbault):: Are there any questions or comments?


John Leslie Evans: Mr. Speaker, I was reading something here for a moment when the Hon. Member was speaking and mentioned a Bill that he was quite taken with. I believe it was in the Thirty-first Parliament?


William James Kempling: The Thirtieth Parliament.


John Leslie Evans: In 1976? Was that the Bill of the Minister of Consumer and Corporate Affairs called, "The Borrowers and Depositors Protection Act"?


William James Kempling: I do not believe it was called that.


John Leslie Evans: C-69?
May 29, 1984


William James Kempling: No.


John Leslie Evans: Did it come from the Department of Consumer and Corporate Affairs?


William James Kempling: I believe it was a finance Bill. But at any rate, Mr. Speaker, I will give the Hon. Member a copy of it if he wishes. I have not looked at it for probably a couple of years now, but it was a good Bill. It was one of the best Bills ever introduced in this House.


John Leslie Evans: What did it deal with specifically?


William James Kempling: Well, first it dealt with truth in lending and it dealt with the establishment of the mortgage investment corporations and a mortgage bank. I will be very pleased to supply the Hon. Member with a copy. It should be introduced and brought through instead of this Bill. It is not in the Library of Parliament, I know that, but I will get you a copy.


The Acting Speaker (Mr. Guilbault):: No more questions or comments?



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Guilbault):: It is my duty, pursuant to Standing Order 45, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Broadview-Greenwood (Ms. McDonald)-Criminal Code-Presentation of obscenity amendment; the Hon. Member for Medicine Hat (Mr. Hargrave)-Trade-Beef imports from common market countries (b) Government policy; the Hon. Member for Richmond-South Delta (Mr. Siddon)-Science and Technology-Macdonald Commission's approach to challenge of technology (b) Government investment in research and development.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. LeBlanc that Bill C-37, an Act to amend the National Housing Act, be read the second time and referred to the Standing Committee on National Resources and Public Works.
National Housing Act
John Raymond Ellis: Mr. Speaker, like my colleague from Burlington, I intend to put a few comments on the record regarding this legislation. We have been looking forward to this Bill since last February when it was first announced. I had the privilege of taking part in a seminar on housing sponsored by the Guaranty Trust Company in Belleville some six or seven weeks ago. The item most frequently discussed was interest rates. I should digress briefly, Mr. Speaker, to tell you that at that seminar there were municipal, provincial and federal politicians. There were civil servants from the Ontario and federal housing bodies. There were lenders, in this particular case Guaranty Trust, and there were contractors involved. It was a very interesting seminar and the morning passed very quickly.
Those people who were there, to a man, were interested in knowing what the impact of this particular piece of legislation would be. It had been promised in February and here we were in late April and we had not seen the Bill yet. Now we have it before us and I am sorry to say that it raises probably more questions than it answers. There are some very real problems with this legislation. I think it is fair to say, as my colleague has said, that while we will express our concerns to the Minister, nonetheless he best look to his laurels when it comes to committee because there is going to be some very careful questioning at that time.
Some of the questions which come to mind have to do with potential costs of this program. We are given to believe that the program should be self financing, but it seems to me that assumes home owners will always buy mortgage insurance. I have to think that that is a fallacy. I would think that anyone who did not take out mortgage insurance today would be very foolish. All of us have watched in the past two or three weeks as interest rates have gone up and the value of the Canadian dollar has gone down. I would think any modestly careful person today would take out some form of coverage or any form of coverage available to protect them from the possibility of having to renew at a higher rate.
However, if, as we suspect may happen, interest rates and therefore mortgage rates peak either over this summer or into next year and start coming down again as they did recently, I would doubt that person would take the chance of buying that coverage. After all, if I were in the position of buying a new home and I were faced with a 15 per cent, 16 per cent or 17 per cent mortgage rate, and I had to buy then in order to get the location and the kind of home I wanted, I would gamble on a very short mortgage on the assumption that rates would come down and I could renew at a lower rate.
I have not had a chance to study the Bill as carefully as I would like. I looked particularly at the Minister's remarks in his press release dated May 25, which is only a few days ago. The second page says home owners who took out mortgages or renewed mortgages after the date-now, Mr. Speaker, I fully understand that someone renewing a mortgage would be able to obtain the benefit and, indeed, if I understand the legislation properly, those who renew. In other words, if I have a mortgage today at 12 per cent and I am forced to renew at 17

May 29, 1984
National Housing Act
per cent, then I do gain some considerable advantage. But I am a little curious as to how someone entering the market for the first time today benefits today by the coverage. He or she benefits when it come up for renewal, but obviously they do not benefit as a first-time buyer. I have some difficulty with that statement in the press release put out by the Minister's office. I am not entirely sure where it is going to go.
In any event, back to where I was, the cost of the program could escalate rather severely because if people, as I have said, were to take out the insurance on the way up, they would surely not take out the insurance on the way down. They would gamble on the short term. When they renew at the lower level, they would then take out the insurance. Surely there is a potential for the escalation of the cost of this program. That is not to say that I or my Party will oppose the program, but there is a potential for an escalation in costs that does concern us.
Furthermore, there is the question of the premium rate being the same regardless of the term of renewal. There has been some suggestion that this will help the lenders provide more long term money and would encourage the mortgage holders to go for a longer term. It is not always a good idea.
Let us suppose I was renewing a mortgage today and the mortgage interest rate was 15 per cent, which it almost is today. I would have to look at the cost of insuring and take into consideration that it must go to 17 per cent before I qualify at all. If it goes beyond 17 per cent, I will be compensated for three-quarters of the extra. If it goes to 18 per cent, I am compensated for three-quarters of one per cent. If it goes to 19 per cent I am compensated to 1 Vi per cent or three-quarters of 2 per cent. Given those considerations, perhaps I should take out a short term mortgage and gamble that the rate will come down a year from now. That is not an unreasonable gamble, considering the recent cyclical mood of mortgages. Therefore, I must ask why the rate is the same for a one-year mortgage as it is for a five-year mortgage. That is the problem that I see.
I am also concerned about the regulations. This Bill, more than most that we have seen recently, leaves everything to the regulations. I believe that we should have some of those regulations before we go to committee. I appreciate that this is a cry that is heard from the Opposition on a regular basis, but we should have some of those regulations before committee and certainly when we get to committee. Since there is a question about the cost of the insurance and whether it will be worth the gamble, we could determine that ahead of time if we could see all of the regulations. I handed my colleague my mortgage interest book so he could do some calculations on this, but he has been unable to tell me if a savings could be appreciated by the mortgagor. It is very difficult to know whether there is a savings without having the regulations available.
Some industry analysts have suggested that it might be better to reduce the size of the mortgage. Has a program been
devised to study the regulations? The Minister can correct me if I am wrong, but I believe it is still possible to get a one-year mortgage at approximately 13 Vi per cent. Can such a program be used in such a case to determine where it becomes worth the gamble for someone to put the cost of a mortgage insurance out of his pocket for a year in the gamble that the interest rates will come down? At what level does it become worth someone's while to put the money out for insurance coverage? Where does it become worth while for the Government in this insurance program, when someone whose mortgage is at 12 per cent must renew his mortgage at 17 per cent or 18 per cent, to say to the lender that if it has to subsidize this mortgage for the next three or five years, it will pay so much in subsidization? While the home owner must pay some, the Government will pay a substantial amount of money and obviously more than it took in as insurance. What is the level at which the Government can pay off a portion of the capital to bring the payment down to the level at which the borrower is paying the same, but the lender is not reaping a horrendous profit as a result of those high interest rates?
We must be careful in this instance because it became very obvious in the seminar of which I spoke a moment ago that the mortgage companies will say that they would much prefer a market with constant rates over a long period of time because when rates fall dramatically, those companies and their depositors run risks and tend to not make much money in that instance.
It is difficult to do these calculations on short notice and, indeed, it may take a computer program to properly determine whether there is a point when the federal Government should reduce the principle of a mortgage rather than make payments to a lender over a number of years. However, I suspect that there may well be a point when it will be worth while.
Finally, I want to spend a moment outlining some issues this Bill does not address. The Minister will recall that not long ago the federal Government backed out of support to municipalities for the installation of sewers and other programs. It was his department that was involved at that time. I believe this is an area where the federal Government might well have stayed involved and continued its contribution to municipalities. Normally, I would rather see these functions carried out by the provinces but this is an area of which I, as the Mayor of Belleville, took advantage.
The second most serious complaint that the builders at this seminar spoke of was the cost of servicing. In Belleville it costs approximately $5,000 more per lot, partially because of rock and partly due to stringent imposition by the local bureaucracy, to service than in other similar communities. When those federal Government programs were in place, it kept the cost of those lots down and we were much better off. I see, Mr. Speaker, you are rising. And that the clock has reached five o'clock. Please be careful, Mr. Minister, when this bill comes to committee because there will be a lot of people looking to ask many questions.
May 29, 1984


The Acting Speaker (Mr. Herbert):: I regret having to interrupt the Hon. Member. He has two minutes more remaining at the next sitting of the House.

Order, please! It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS-MOTIONS

['Order, please. I sincerely regret to interrupt the Hon. Member-', "-but the hour provided for the consideration of Private Members' Business has now expired."]
The Acting Speaker (Mr. Herbert):: Shall all orders and items preceding item 106 stand by unanimous consent?


Some Hon. Members:: Stand.


The Acting Speaker (Mr. Herbert):: Stand.



Mr. Baker:: Mr. Speaker, I rise on a point of order. In listening to motion No. 106 on the Order Paper, "that, in the opinion of this House, the Government should consider the advisability of declaring Canada a nuclear arms free zone", to my recollection a similar motion was dealt with last week in the House by general agreement of Members. The motion as I read it is similar in substance and intent to that dealt with last week. Perhaps the Speaker cannot rule on this immediately, but I am pretty sure, Sir, that you were in the chair at the time. Does it meet with the rules of the Chamber that we can deal with the motion again?


Mr. Young:: Mr. Speaker, I rise on the same point of order. I think if the Hon. Member reads Hansard for the day in question last week, he will find the question debated was a private member's bill and not a private member's motion.


Walter David Baker: The reason I pointed this out and regardless of what the hon. gentleman says, Mr. Speaker, both are motions and the rule applies to motions. A bill is a motion, a resolution is a motion. This is dealt with in Erskine May and in Beau-chesne under motions. The point of order I raised deals with the sections on motions. Could Your Honour, who was in the chair at the time, rule on the question now?


The Acting Speaker (Mr. Herbert):: The Chair has been looking into this matter in the last while. Our records indicate
Nuclear Disarmament
that the motion referred to by the Hon. Member for Gander-Twillingate (Mr. Baker) could be one of two Bills that have been debated in the House, namely Bill C-204, which was defeated, and Bill C-203 which is essentially the same as the Bill which was debated.
The Chair at this point is in some difficulty inasmuch as one can now express some reserve as to whether Bill C-203 should have been debated in view of the fact that Bill C-204 had already been defeated. However, that brings up the problem we have at the start of a session when Bills are put on the Order Paper and by our system it is possible for Members to be putting similar bills on the Order Paper at the same time.
The motion which is before the House today is essentially of the same substance as the Bill. The Chair would like a little more time to look into this matter, just a few more minutes, and it proposes to allow the Hon. Member for Beaches (Mr. Young) to complete his remarks on the motion before the House. We will then render a decision on the point of order that has been raised.


Neil Young: That, in the opinion of this Flouse, the Government should consider the advisability of declaring Canada a nuclear arms free zone and that it should consider the advisability of prohibiting the deployment, testing, construction and transportation of nuclear weapons and associated equipment through and within Canada and that it should consider the advisability of prohibiting the export of goods and materials for use in the construction and deployment of nuclear arms; and
That, the Government should consider the advisability of encouraging cities, provinces and states throughout the world to undertake similar action.
He said: Mr. Speaker, this motion is indeed similar to the measures proposed in the private members bills introduced by my colleagues, the Hon. Member for The Battlefords-Meadow Lake (Mr. Anguish) and the Hon. Member for Selkirk-Inter-lake (Mr. Sargeant). All three measures would prohibit the deployment of nuclear weapons in Canada. They would also prevent the transit of nuclear weapons through Canadian territory and waters. They would make it unlawful to develop, test, or produce nuclear weapons or components of nuclear weapon systems in Canada or the export of same.
My motion is somewhat different from the other two measures proposed by my colleagues, but nonetheless equally important. My motion calls upon the Government of Canada to take a leadership role in encouraging others throughout the world to follow the example set by this House of Commons if this motion is adopted.
I do not think I overstate the case when I say that the arms race has brought us face to face with our own annihilation. There are now some 50,000 warheads in the arsenals of the two superpowers alone. Some may think it trite to make reference to the maxim that you do not put a smoking gun on stage unless you intend it to be used, but I think that maxim sums up for us the dilemma we have forced upon ourselves in the rush to augment national security by threatening the security of another nation with nuclear weapons.
Until recently the theory that governed the strategic thinking of the superpowers has been that of deterrence, that it

May 29, 1984
Nuclear Disarmament
would be suicide for the other side to launch an attack so long as we retained a credible threat of a retaliatory strike. However, with the advance in nuclear weapons technology and changing attitudes in the White House and the Kremlin, the theory of deterrence is beginning to unravel. The weapons being developed today can be launched from thousands of miles away and still hit their target with almost pinpoint accuracy. Their value is not so much as retaliatory second strike weapons but as counterforce, first strike weapons; weapons that can take out the nuclear missiles of the other side before they can be launched. Pentagon strategists are shunning mutually assured deterrence in favour of Nuclear Utilization Theories, NUTS.
The act of declaring Canada a nuclear weapons free zone would be one of complying with the oft-repeated call of the United Nations for the establishment of such zones. Regardless of what some Members may think of the United Nations, it would be foolishness to dismiss U.N. recommendations for nuclear weapons free zones throughout our planet. The first nuclear weapons free zone was established in the Antarctic in 1961. The treaty for the prohibition of nuclear weapons in Latin America was concluded in 1967.
Here are two areas of the globe where through negotiations and agreement we have been able to prevent nuclear weapons and the threat of their use from casting a shadow. Since then, serious proposals for the creation of nuclear weapons free zones have been advanced for Africa and for the Balkans, for the Middle East, the Mediterranean and for Central Europe, for South Asia, the South Pacific and for the Nordic countries of Europe. We, in Canada, have a unique opportunity to add another large region of the globe to the area now free from the threat of nuclear weapons, without the complicated negotiations to include other countries in the nuclear weapons free zone.
I want to quote from the Final Document of the 1978 United Nations Special Session on Disarmament. It reads:
The establishment of nuclear weapons free zones on the basis of arrangements freely arrived at among states in the region concerned constitutes an important disarmament initiative. The process of establishing such zones should be encouraged with the ultimate objective of achieving a world free of nuclear weapons.
We as Canadians can and must do a great deal to influence the political climate in a way which encourages disarmament agreements. We can and must do a great deal to put political and technical constraints on the nuclear strategies of both the U.S.S.R. and the United States. I am confident that creating a nuclear weapons free zone in Canada would do both.
Recently I read that Emergency Planning Canada wants to spend some $40 million on a network of 650 nuclear fallout shelters. In my view, planning for these kinds of civil defence measures is perpetrating a cruel hoax on the Canadian public. One comment which caught my attention was that our emergency planners think this network of shelters will do the trick, because they assume Canadian territory they would not be the target of a Soviet nuclear strike.
Our emergency planners better think again. How can they possibly assume when we in Canada develop, test and produce nuclear weapons components and when NORAD is providing targeting information to nuclear-armed aircraft, that Canadian territory would not be targeted? What logic would spare Canadian territory when nuclear-armed Trident submarines pass back and forth through the Strait of Juan de Fuca en route to their base at Bangor, Washington? When we have three Loran C stations in Canada providing navigational data to pinpoint the accuracy of U.S. submarine-launched nuclear weapons, and when Canadian patrol aircraft provide precise targeting data for American hunter/killer submarines to attack Soviet nuclear weapon submarines, it is foolish and naive to think Canada would be spared in a superpower nuclear exchange. The major threat to our national security comes from the potential of a nuclear war between the two superpowers. It is only in our own self-interest to do everything possible to prevent that from happening.
Many Canadians have been convinced by the Government that Canada in the last 15 years has steered a non-nuclear course. Many Canadians have come to see the arms race as something perpetrated by the superpowers. However, how many of them know about Canada's role in the arms race? How many of them know that our Department of Energy, Mines and Resources gathers gravitational data in the Arctic which is used to improve the accuracy and the counterforce capability of U.S. ballistic missiles? How many of them know about the anti-submarine warfare training and the torpedo training for U.S. nuclear submarines at Nanoose Bay, Vancouver Island? How many Canadians are aware that nuclear capable British Vulcan bombers do low-level flight training at Goose Bay, Labrador? How many Canadians know that we still store U.S. air to air nuclear-tipped missiles here and, if called upon, we would launch them from Canadian Forces Voodoo interceptors? Not too many Canadians, I should think.
While it is true that Canada has never developed nuclear weapons on its own, its nuclear free course is a bit of sham. We are tied into the United States nuclear weapons program militarily and industrially through a myriad of bilateral agreements between the two countries. Under the terms of defence production sharing arrangements, Canadian companies have gained access to the lucrative American weapons market. Many companies trying to win production subcontracts on American weapons systems are given financial asisstance through the federal Government's Defence Industry Productivity Program. It should come as no surprise that neither Canadian arms contractors nor Canadian government officials have made a distinction between nuclear and conventional weapons production. The $166 million federal aid budget is equally available to companies bidding on nuclear and/or conventional weapons contracts.
In addition, Litton Systems was granted $49 million to secure the production contract for the Tercom guidance system of the Cruise missile. Boeing of Canada now has an application before the federal Government to sweeten its bid on a production subcontract for the MX missile re-entry
May 29, 1984

system. Boeing and Bristol Aerospace, both Winnipeg companies, have been doing developmental work with an eye toward production contracts on the MX missile for the last year.
Over the years the Government has given money to Canadian Vickers to produce parts for American nuclear submarines, to Hawker Siddeley to produce the launcher for the Lance nuclear missile, and to Heede International to build loading equipment for Trident and Poseidon nuclear weapon submarines. We would be better off without these contracts. If the concern of the Government is jobs, let me say that American studies on industrial conversion show that we could create twice as many jobs by investing in health care and education than by investing in weapons production.
Canada has not kept its hands clean of the arms race. The unwillingness of successive governments to begin even to strike an independent strategic policy has allowed us to drift into complicity in the nuclear weapons program of the United States. Declaring Canada a nuclear weapons free zone would not require us to end the long friendship between the two countries. I have no doubt that the friendship would endure. After all, what kind of friendship is it that could not endure our decision to take a strategic policy which promised to help reduce the threat of nuclear destruction?
Declaring Canada a nuclear weapons free zone would only be consistent with the Government's rhetoric about our nonnuclear role in the world. It would be an act consistent with the efforts of the United Nations to establish such zones in the world. It would enhance our reputation internationally as a country willing to take action in its advocacy of peace. By declaring Canada a nuclear weapons free zone, we would be taking concrete steps toward reducing the nuclear threat which hangs over the heads of all Canadians, which hangs over the heads of all people of the world.
There is another dimension to the nuclear arms race with which I should like to deal because in my view it goes to the heart of our concern. I am referring to our ability to achieve global peace while we fail to recognize adequately the existence of widespread social and economic injustice in the world. The U.S. Arms Control and Disarmament Agency recently reported that we will spend a total of some $1 trillion in 1985 in the global arms race. We could make a significant step in the direction of achieving global peace if we were to direct some of those moneys, if not all, toward eradicating the sources of that economic and social injustice to which I have just referred.
The United Nations has estimated that one half of the Third World countries have no safe drinking water supplies, yet we have the means available to provide clean water within 10 years if we had the political and moral will to do so. We could do the same for the hundreds of thousands who are dying of hunger throughout the world. We have the technology and the expertise to achieve it.
It is estimated that some 130 million children are denied access to any kind of education and that 800 million adults are considered illiterate throughout the world. If we used some of the armament expenditures, we could provide the schools and
Nuclear Disarmament
teacher training which would alleviate that sorry condition. In addition, we know that air and water pollution is responsible for the increase in deaths from such diseases as cancer, asthma and heart disease. We could implement a global cleanup of our environment. We have the technology which would put a stop to our environment being used as one of the biggest sewage disposal systems the world has ever seen.
In addition, the World Health Organization estimates that some ten children die each minute of measles, diptheria and tuberculosis. Only 10 per cent of the Third World's population of 18 million people are immunized against disease. In addition to that, some 50 million young people enter the workforce each year. Because there are no jobs, they face prolonged periods of unemployment.
If we believe that Third World problems are totally disassociated from our problems in Canada, perhaps we should consider spending some of the billions of dollars we set aside for death and destruction to solve some of our social problems. It is a known fact that three out of every five single women over the age of 65 in our country are living in abject poverty. More often than not, our native population is living in conditions which should not be ignored by any civilized society. Ten per cent of all Canadians are disabled or handicapped. In that group the unemployment rate is between 70 per cent and 90 per cent. Some 11 per cent of our total workforce is unemployed and 18 per cent of our young people are out of work.
Those facts surely tell us that our priorities are all screwed up. Why do we find it necessary to spend $ 1 million a minute on arms to kill, maim and destroy when we could better spend those resources for socially useful purposes? It was only several months ago in Private Members' hour in the House that we were discussing cancer, the dreaded disease which nearly every Canadian has been touched by in one way or another. If we were to take a sizeale chunk of the money we spend to destroy the human race and property and put it into cancer research, the people I have spoken to in that field feel that in all probability we could come up with successful treatment of that disease which touches every family in the world.
For all those reasons I hope that the House will agree to this motion and refer it to committee where witnesses can be heard and it can be examined in more detail than we will have time for in the House. I urge Members to support this motion.


The Acting Speaker (Mr. Herbert):: The Chair would like to comment further on the point of order raised by the Hon. Member for Gander-Twillingate (Mr. Baker). The Chair proposes to read from Erskine May's Twentieth Edition a paragraph which is found on page 379 under the general heading "Rules governing subject-matter of motions". Under the heading "Matters already decided during the same session" one reads:
A motion or an amendment which is the same, in substance, as a question which has been decided in the affirmative or negative during the current session may not be brought forward again during that session.
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Whether this rule would apply as between a motion and a bill is a difficult matter to decide, but it is unlikely that substantially the same question could be raised by a motion and a bill as a whole. A motion can do no more than affirm in general terms the desirability of legislation while a bill is likely to contain qualifying provisions and conditions, sufficient to differentiate its subject-matter from that of a motion. In any case a bill and a motion have different purposes. The question has been raised, but so far no case for the application of the rule has been made out.
The Chair has looked at the motion and at the two Bills to which reference was made. As the Chair has said, Bill C-204, which was presented to the House by the Hon. Member for Selkirk-Interlake (Mr. Sargeant), was defeated. Bill C-203, which on the surface appears to be essentially the same but has a few changes in paragraphs, was presented by the Hon. Member for The Battlefords-Meadow Lake (Mr. Anguish). Inasmuch as the motion which is before the House contains the key words "in the opinion of this House, the Government should consider the advisability of', and under those circumstances it is just an expression of opinion of the House, the Chair has no difficulty in allowing debate to continue on the motion.
However, the Chair will take this opportunity to suggest that it will be looking closely at the similarity of the two Bills, Bill C-204 which was defeated, and Bill C-203 which has been brought forward already for debate in this session. The Chair will consider whether there can be resumption of debate on Bill C-203 at the appropriate time. Therefore, for continuing debate on the motion, the Hon. Member for Thunder Bay-Atikokan (Mr. McRae).


Mr. Paul E. McRae (Thunder Bay-Atikokan):: Mr. Speaker, I find myself rising for the second time in three days to debate essentially the same motion. I respect the ruling of the Chair on this. I find the motion supportable and support the intent of the motion, but I worry about why we are debating a Bill three times which really will do nothing to prevent the holocaust which I think is going to occur if we do not bring the super powers together to stop the warring which is going on.
I do not think that our being pure is going to influence either of the super powers in the direction in which they must go. In response to a question asked of the very distinguished Rear Admiral Carroll at a gathering in Toronto in March, he said that the armaments, the computerization of arms, the speed and so on would make a nuclear war very probable in about six to eight years. We all know there is no possibility that human life could continue in any normal fashion after such a war. The social values which we all appreciate would cease to exist under these circumstances. It seems that a hardness has developed between the two super powers at this point which could very well continue, depending upon what happens in the American election. I have no qualms about talking about American internal politics because the Ambassador from that country has no qualms about talking about how we run our operation.
I believe that unless there is a change in the scene in the United States, this hardening will become much worse. I would be much happier if I heard Members of the NDP
talking about this very serious problem rather than seeing the answer as our being pure.
The problem possibly stems from the attitude of Hon. Members on the other side. Because they essentially have not held power or been close to power for the last 20 years, they find it hard to deal with reality. When we have to deal with our relationship with NATO, when we have to deal with the Government of the United States and the Government of the Soviet Union and when we have to try and move those Governments, the problem becomes very different.
Let me give you an idea of that. Let us suppose that tomorrow, a motion is put before the House to support the ten points common ground that were listed by the Prime Minister (Mr. Trudeau). Suppose that motion contains some additional points calling for no first use and no testing of the Cruise. Those are things that I support. However, if we along with the other countries presented such a motion to the two super powers, something which I think should be done, then the same thing would happen as happened to the motion of the four-continent group, a motion into which I have been very proud to have had some input. Within 20 minutes, the U.S. Government would reject the entire thing. How would that do anything in terms of closing the gap between the two super powers?


Neil Young: What do you suggest?


Paul Edmund McRae: If we do not close the gap, then the war occurs. We are pure, we are not doing anything wrong, but how are we closing that gap? It seems to me that we would then invalidate anything that could happen because the two super powers would not speak to us.
I would like to begin to understand the dimensions of this issue. I simply do not believe that in this world, Canada will be able to change anything. One might think that we could change things by bringing the two super powers together. In those ten points of common ground to which I have referred many times, there are areas about which both sides can agree and there are more to those areas than what appears on the surface. Then, with the right negotiating techniques, we may be able to change things.
I would remind Hon. Members on both sides of the House that the issue we are dealing with today will be a very large issue in the elections in both the United States and Canada. Both countries will be holding elections during almost the same period of time. If there is a change in the U.S. Government after the November election, then we will be faced with a new situation and we will have a chance to develop these things. I believe that that is what will happen. However, I am opposed to trying to inject ourselves into a situation in which we would hope for some successful negotiations between the two super powers in such a way that we would automatically and without any question be rejected. I do not think that that will achieve anything positive. In fact, I think it may achieve the very opposite.
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Let us talk about what is happening now. I would like to talk about this hardness that exists. There is a group called the Arms Control Association in the United States which has a very distinguished board of directors. That board includes people like Admiral Gayler, the former Commander in Chief for the Pacific of the United States Navy; Gerard Smith, a former arms-control director for the U.S. Government; Paul Warnke, a former arms-control director for the Carter U.S. Government; Robert McNamara, a former Secretary of Defence; and others. These people recently commissioned a study and a report which indicated that the Reagan Government has basically destroyed arms control negotiations. It indicated that such arms-control measures as the START talks and SALT I and SALT II will be destroyed.


Mr. Benjamin:: Mr. Speaker, I rise on a point of order. The resolution of the Hon. Member for Beaches (Mr. Young) deals with establishing nuclear free zone in Canada and with Canadian non-participation in the testing, construction, deployment and transportation of nuclear weapons. The Hon. Member has yet to address himself to the contents of the resolution and I am wondering if the chair would be prepared to caution the Hon. Member to speak to what Canada can do and not to what former American Ministers of Defence can do.


The Acting Speaker (Mr. Herbert):: Order, please. I will accept the point raised by the Hon. Member if he is attempting to suggest that the Hon. Member for Thunder Bay-Atiko-kan (Mr. McRae) is not speaking to the motion. However, the Chair finds that the subject matter is sufficiently broad. The remarks of the Hon. Member are in order.


Paul Edmund McRae: Mr. Speaker, perhaps I might explain to the Hon. Member for Regina West (Mr. Benjamin) that I am trying to deal with the questions of where we must go and of what is fundamental. I support what Hon. Members of the New Democratic Party are trying to do. However, I think that the issue is not fundamental. We have spent four days discussing this particular issue when there are far more fundamental issues dealing with the arms control business at stake.
One thing that has bothered me for a long time is that I have never been able to accept the idea that I can come to the House, stand up and be pure and say that I want this and that without having one iota of consideration for how I will make the change that I want. If I believe in something, then I must fight to make a change. If I am standing back being pure, taking absolutely no notice of what is going on around me and not doing my best to change things, then I do not think that I am doing my job.
I feel that we are facing the most dangerous situation that one could imagine on this earth and I do not think that this motion will change it. I think that there are far more serious things we must address, and that is what I am trying to say. I am trying to break down the issue and I am trying to show that there are far more important things that we can do. If we do some of the things which we all want to do, we might very well wreck our chances of doing something more important.
Nuclear Disarmament
That is what I am trying to explain to the House. I think it is very relevant to the motion before us.
I would like to return to this serious issue. A two-track decision was made through negotiations on behalf of NATO countries and Warsaw Pact countries by the two super powers. The two super powers came to no solution and the Arms Control Association has indicated that one of the prime reasons for that was that the Government of the United States presented a series of ideas that sounded great to the uninitiated public and made the government look like it was really going after arms control and really making big concessions when to those who understand the issue and have spent years dealing with the issue, the ideas were totally meaningless. These kinds of ideas go on and on. These are the kinds of things that happen, and so we are faced with a situation that is far different from the one with which we thought we were faced, so those talks broke down.
The same thing happened with the START talks. The President of the United States promoted the idea that the U.S. and the Soviet Union should come to an agreement to get rid of most of their land-based ICBMs. That sounded like a reasonable proposition. He said: "We will get rid of ours, you get rid of yours". However, the President admitted to a group of Congressmen in October that he did not know that the Soviet missiles were four-to-one land based and the American missiles were four-to-one sea based. By asking the Soviets to back down on all of their land based missiles he perhaps, as he said to some Congressmen, sounded one sided. Those are the kinds of negotiations that were going on at the START talks. I condemn people in our Government for refusing to push hard to have the START talks and the INF talks together. There were all kinds of quid pro quos in there if one got away from the simple notion of dealing only with talks on intermediate missiles. These are the serious things which have been going on.
When the President of the United States initiates an idea about star wars and states that missiles can be prevented from entering the United States when he knows perfectly well that there is an anti-ballistic missile agreement which will be broken if the star wars program goes ahead, he and this very important group of tough Americans-not soft non-Soviets or anything of that nature-are undermining world peace in a very serious way.
These are the issues. It is not a Canadian problem. I do not think that we as Canadians are going to create a war. Peace is an international problem. I get very worried when I hear that if we as Canadians remain pure and stay within ourselves and do not worry about the rest of the world we are doing our share. That is what is happening in the peace movement. We are becoming less and less concerned about what is happening out there.
If I were looking for a nuclear free zone to create, it would be in central Europe. It is absolutely essential that we reach very shortly that situation so that we will not have Pershing II

May 29, 1984
Nuclear Disarmament
missiles, SS-20s, SS-21s and SS-22s sitting on the border across from each other, four to six minutes from the other side. That is where a nuclear free zone is so important. The very essence of the problem will be the accidental use of a Pershing missile; not so much the accidental use of the missile, but the assumption that it is being used because of a computer breakdown or a time shortage. These are the vital issues which we should be dealing with.
It would be nice to say-and I have fought as hard as anyone to have this happen-that we will not build these weapons in Canada. The fact is that the danger will come from outside and we will have to be a part of it. I have mentioned some of the things which the distinguished group of Canadians who are involved with the Arms Control Association have been worried about. If I were an American today, and I was-


Leslie Gordon Benjamin: Mr. Speaker, I rise on a point of order. I wonder if the Hon. Member would permit a question as he is a Canadian and not an American. We are not interested in what he would say if he were an American. Would he permit a question?


Paul Edmund McRae: I will do that.


The Acting Speaker (Mr. Herbert):: Ordinarily there is no provision for questions. However, if there is unanimous consent, the Member has two minutes remaining in the time allotted to him. Does the House give its consent?


Some Hon. Members:: Agreed.


Paul Edmund McRae: If I have only two minutes, Mr. Speaker, I think that I can get along without the question. I have a very serious point that I want to ensure the House understands.
If I were an American today and was centre to centre-right in my leanings, which I am not, I would be very, very concerned about the policy that the Reagan Government is taking in the United States. I do not think that the United States stands taller than it did before. I think that it stands weaker. It stands weaker because it has created far, far more dangers: the deployment of the Pershing II, the flight trajectory, and the threat of four to six minutes. These kinds of things are the tensions which create a war. There are far more SS-20s than there were before. There is a very large build-up in the Sea of Japan, the Kuril Islands and the surrounding areas of Soviet Typhoon submarines. Each submarine has 80 warheads. That kind of build-up is there.
There is a breakdown in the NATO alliance which is very serious, certainly at the political level. There is great concern among people in NATO about whether the alliance will continue in the way it has. I am speaking from the point of view of an American who would be of the middle to middle-right persuasion. We have a Lebanese situation which is frightfully dangerous and ridiculous. As well, there is the Grenada scene and the situation in Central America.
The most important issue is not whether we declare ourselves a nuclear free zone and test the Cruise, it is what will happen in the United States in the next six months. Anything
we can do to help that situation, I am in favour of that. But, I will not count on us getting involved in something which will discredit Canada or create a situation in which we are turned down again. We cannot afford that situation. Although I agree with the Hon. Member, I am worried about other things which his Party does not seem to be worried about.


The Acting Speaker (Mr. Herbert):: Order, please. I regret to interrupt the Hon. Member but his time has expired. Is the Hon. Member for Regina West (Mr. Benjamin) rising on a point of order?


Leslie Gordon Benjamin: No, Mr. Speaker, for debate.


The Acting Speaker (Mr. Herbert):: For continuing debate, the Hon. Member for Victoria (Mr. McKinnon).


Hon. Allan B. McKinnon (Victoria):: Mr. Speaker, I am sorry to cut out the Hon. Member for Regina West (Mr. Benjamin), but having been faced with the choice a few moments ago between having to listen to his question or listening to the Hon. Member for Thunder Bay-Atikokan (Mr. McRae), it was a difficult choice to make.
I would like to compliment the Hon. Member for Beaches (Mr. Young) for producing the motion which is before the House today. I thought that he spoke very well on the subject. He has obviously done a lot of research and has presented a case which has some merit. There is quite a debate raging across the country at this time on the subject. I think that it deserves the time of the House. It is one in which people have opinions which are not diametrically opposed, but opinions which are at some variance from each other. A person would have to be a maniac not to be in favour of nuclear disarmament with the number of nuclear weapons in the world. Anything that can bring those weapons under control and disarm them is acceptable.
The Conservative policy for years has been that we would vote in favour of any measure for nuclear disarmament that would lead to a mutual, balanced and verifiable disarmament.
The resolution before us in part reads:
-the government should consider the advisability of declaring Canada a nuclear arms free zone-
I am grateful that the Hon. Member did not make the mistake that is frequently made which is to leave out "arms" and just ask for a nuclear free zone. That would no doubt upset Ontario Hydro considerably.
I think it would be in order to ask how Canada became a nuclear arms zone with nuclear arms. This is particularly important considering the sanctimonious protestations made by the NDP against the use of nuclear arms. If one reads Hansard of February 4 and 5, 1963, one will find out why Canada has nuclear arms. Those were in the days of the Right Hon. John Diefenbaker, who was then Prime Minister. Debate raged in that Cabinet. There are still least two Members of our Party who were in that Cabinet and who could provide the information if it were not for the Privy Council oath. However, it is obvious from the Hansard of the day a serious debate had
May 29, 1984

taken place in Canada during that time as to whether Canada should accept nuclear arms. The Right Hon. Lester B. Pearson, who was the Leader of the Opposition at the time, had a miraculous conversion. I believe that his speech was given in Scarborough, Ontario, which will be familiar to the mover of the resolution.
One night Mr. Pearson decided, after some 20 years of being opposed to nuclear weapons, even winning a Nobel prize for his peace activities, to suddenly be converted to nuclear weaponry for Canadians and the Canadian Forces within Canada. Then followed two days of very strong debate on the resolution which was introduced on February 4, 1963. Hon. Members interested in this subject would find it a fascinating two days of debate. The Hon. Member for Thunder Bay-Atikokan reminded me of some of the speakers whose speeches appeared in Hansard at that time. Mr. Pearson, who I believe was really quite sincerely dedicated to peace, was trying to explain why he was going to vote out the Diefenbaker Government which was insisting on not accepting nuclear weapons in Canada, namely the warheads for the Bomarc missile of that day. The debate went on with Mr. Pearson being rather devious about the motion and he was severely criticized by the Government side of the House for not being more specific about his motion. It was a supply motion. It was interesting to read the contributions made by Mr. David Lewis and Tommy Douglas who spoke for the NDP in that debate indicating that while they also greatly loved peace, they were going to vote for the Party which was going to bring nuclear arms to Canada.


Leslie Gordon Benjamin: He never said that!


Allan Bruce McKinnon: So the only Party in the House which was opposed to nuclear arms in Canada was the Conservatives, and the New Democratic Party joined with the Liberals to vote it out of office, knowing full well that Mr. Pearson was going to bring in the nuclear warheads for the Bomarc missile. The Government was defeated in a subsequent election. The Liberals formed the next Government and allowed nuclear warheads into Canada, and they are still here today.


Leslie Gordon Benjamin: Point of order.


The Acting Speaker (Mr. Herbert):: On a point of order, the Hon. Member for Regina West (Mr. Benjamin).


Leslie Gordon Benjamin: Mr. Speaker, I am sure my good friend, the Hon. Member for Victoria (Mr. McKinnon) would not want to mislead the House or misconstrue the record knowingly or unknowingly. I am sure he would want to include in his remarks that that was a vote of non-confidence in the Government which, he will agree, any opposition party would vote for. It was not a vote in support of nuclear weapons for Canada as advocated by Mr. Pearson. Would the Hon. Member be prepared to complete the record?


The Acting Speaker (Mr. Herbert):: Order, please. That is not a point of order. It is just a point of debate.
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Allan Bruce McKinnon: Mr. Speaker, of course it is not a point of order. The Hon. Member for Regina West has not read the debate, obviously, and forgets completely that the New Democratic Party, being an opposition party, for 19 successive times in a row in 1973 and 1974 did not vote the Government out of office when it had the opportunity to do so.


Leslie Gordon Benjamin: We did so!


Allan Bruce McKinnon: So he is just talking a lot of nonsense to support an unsupportable case.


Leslie Gordon Benjamin: I rise on a point of order, Mr. Speaker. That is clearly incorrect. It is not true. It was in 1974 we voted the Liberals out of office.


Neil Young: We did it again in 1979.


Leslie Gordon Benjamin: The Tories!


The Acting Speaker (Mr. Herbert):: Order, please. The Hon. Member for Regina West may have a difference of opinion. It is not a point of order.


Leslie Gordon Benjamin: Mr. Speaker, in the interests of accuracy-


The Acting Speaker (Mr. Herbert):: The Hon. Member for Victoria.


Leslie Gordon Benjamin: -it was the NDP who voted the Liberals out of office in 1974.


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


Leslie Gordon Benjamin: I was here even if he was not.


The Acting Speaker (Mr. Herbert):: Order, please. The Hon. Member for Victoria.


Allan Bruce McKinnon: There is always a smidgen of truth in what the hon. gentleman from Regina West says. His Party supported the Conservatives after failing to support us in 19 successive votes of non-confidence in the Liberal Government. After voting with the Government 19 times, they eventually saw the light and voted with us in 1974, at long last, having missed all those other chances. It is always interesting to hear these inane comments and unknowledgeable questions from the Hon. Member for Regina West, but time is precious to those of us who have something to say, and I would like to press on. The last paragraph of the resolution reads:
That, the Government should consider the advisability of encouraging cities, provinces and states throughout the world to undertake similar action.
Presumably that is a nuclear arms free zone action. However, I failed to notice in his remarks any reference to the Warsaw Pact countries which are states of the world. I wonder whether he intended to encourage them to undertake similar action and just how he intends to encourage them to do so. Mr. James Stark, the head of Dismantle, gave evidence on the referendum in front of the Standing Committee on External Affairs and National Defence in, I believe, 1982. I would like to read an excerpt from the committee report:

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Allan Bruce McKinnon: I have just a couple of questions. Mr. Stark, if 1 understood you correctly when you were answering Mr. Wenman, you said the Warsaw Pact nations all assured you they would support your motion at the United Nations and would conduct a referendum within their countries. Did I understand you correctly?


Mr.   Stark@: Yes.


Allan Bruce McKinnon: What level was the Russian who told you they would conduct a referendum in their country?


Mr.   Stark@: In new York I met with two representatives; the ambassador and one other. In Canada, I have discussed this with Ambassador Alexander Yakovlev at the Soviet Embassy and with the ambassadors of other Warsaw Pact nations. We had a representative of the Soviet Union at our conference last November on a panel with an American who said-stressing that they do not need a referendum in their country. He said publicly that they would support it in the UN and conduct it in their country. As I mentioned earlier, it would be a very inefficient, in fact, misleading initiative unless we were sure the Soviet nations would also participate. Frankly, we would have folded up the organization, Operation Dismantle, in 1979 had we not had an indication that the Soviets would participate.
Everyone knows that the Soviets did not participate and are not going to participate. The final proof of that might be a news item in The Globe and Mail dated May 23, and I quote:
Soviet dissident jailed for circulating petition
A member of an unofficial Moscow peace group has been jailed for 15 days for collecting 300 signatures on a petition calling for improved U.S.-Soviet relations, dissident sources said yesterday. Alexander Rubchenko, a 24-year-old artist, was sentenced Monday on charges of hooliganism. He was one of four members of the "Group of Trust" picked up on Friday. The others were released after police warned them they will be ordered to live away from Moscow if they petition people again. One member of the group said they will continue collecting signatures.
Therefore, this is going to be a one-sided effort if it ever did come to pass that we would declare ourselves to be a nuclear free zone, and convince other states to do likewise. So that I do not get accused of talking out this Bill, I will draw my remarks to a conclusion before six o'clock, Mr. Speaker.


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


Mr. W. Kenneth Robinson (Parliamentary Secretary to Minister of National Revenue):: Mr. Speaker, unfortunately the time is about ended for this debate. However, I would like to go on record as saying that I support in principle what the Hon. Member for The Battlefords-Meadow Lake (Mr. Anguish) has been trying to say. Unfortunately, the Bill is substantially the same as the Bill we had last week, namely, Bill C-204. However, there are a couple of differences in the Bill and I suppose you might say that Bill C-203 does in effect improve Bill C-204. In any event, I believe the topic we are discussing, that is, the motion for a world referendum-


@Acting Speaker: Order, please. I sincerely regret to interrupt the Hon. Member-

-but the hour provided for the consideration of Private Members' Business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 45 deemed to have been moved.

Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, on April 18 I asked the Minister of Justice (Mr. Mac-Guigan) to consider taking out of the Criminal Code amendments in Bill C-19 the clauses on obscenity and bring them into the House for swift passage. I raised this because we know that obscenity is getting worse, pornography is growing, it is getting more violent and the police are saying that they are helpless to do anything about it. We have had examples in Toronto of stores selling video tapes, including very violent ones, to children. I do not want to get into the argument as to whether "snuff' movies, which have been reported to be sold, are real or not. Certainly we know that the violence is bad enough.
However, the Minister was very complacent. He said there are many parts of the Criminal Code which are of the utmost urgency. We need all of that Bill, not just parts of it. Well, there are other parts of Bill C-19 I would like to see passed as well. But certainly one of the most important must be the obscenity section. I remind the House that the Minister has had an entire year. He brought in draft legislation to this effect last June, yet we have not actually had any debate on the Bill. He is not moving ahead on this specific and very important part, nor is he moving ahead on the other parts of Bill C-19.

I am wondering whether the Minister of Justice and Attorney General of Canada (Mr. MacGuigan) is more interested in publicity for his Liberal Party leadership campaign than in concrete improvements or in amendments to the Criminal Code.
Two committees and one subcommittee are now considering that issue, but the Bill in question, Bill C-19, remains on the Order Paper and has not come up for debate. The Bill was given first reading in January, but since then the Government has not even set a single day aside for debate. In the meantime, pornography problems are growing worse. Yesterday, a representative of the Reseau d'action et d'information pour les femmes tabled before the subcommittee a brief describing his attempts to file a complaint against pornographic magazines in Quebec, and I had an opportunity to examine magazines depicting very violent scenes.
The police in Quebec have refused to act on those complaints because of loopholes in the existing legislation. It is quite obvious that legislative amendments have become neces-


.
*
May 29, 1984

sary. Those examples include pictures of naked and tied up women with a knife or a razor close to them. According to the present legislation, that is not obscene because no men are seen in the picture. In another example, a woman is shown fully dressed, but on her hands and knees and held on a leash like a dog. That is degradation, of course, but it is not obscene!
The debate on pornography has recently taken a very constructive turn, in my opinion. In its brief to the subcommittee, a delegation of the National Action Committee on the Status of Women has called for legal protection on grounds of the right to equality or non discrimination. Those women have told us that it is a human right to be represented as a human being, and that it would be a breach of that right to be shown as a dog or a vile being without self-respect who agrees to be tortured or enjoys vulgarities. I would suggest that the links between pornographic and real violence are strong enough to justify legislative amendments, particularly more severe sanctions. According to that line of reasoning, there is no need to establish such links to justify stronger legislation. The right to equality, human rights, call for that kind of protection.
The obscenity provisions brought forward in this legislation, which we have not debated, do go in the right direction and deal with degradation, and we need them, but I believe there is one thing that is wrong with the Minister's proposal. It would seem to be a loophole on account of the expectation that all provinces have censorship laws. This is a provision to require the permission of the Attorney General to prosecute when a film or video cassette has gone through a provincial classification censorship board.
However, not all provinces have censorship. The Province of Manitoba does not. It only has classification. Quebec, in effect, does not censor films or cassettes. This would impede prosecution for films or cassettes which could be extremely pornographic. I do not think that is a step in the right direction.
To conclude, I would ask the Minister again to move quickly on this issue. The problems are important. If he is really serious about dealing with violent pornography, we do not want more press conferences or promises, we want to get legislation in the House and have it passed.


Mr. A1 MacBain (Parliamentary Secretary to Minister of Justice and Attorney General of Canada):: Mr. Speaker, in response to the intervention of the Hon. Member for Broad-view-Greenwood (Ms. McDonald), I just want to point out that the subject matter of Bill C-19, the omnibus Criminal Code amendments Bill, is before the House Leaders at this time. They will be deciding if there can be an agreement between them about how to deal with this Bill. I would not want to prejudice those negotiations at this time by any remarks I might make.
Adjournment Debate


TRADE-BEEF IMPORTS FROM COMMON MARKET COUNTRIES. (B) GOVERNMENT POLICY
Herbert Thomas (Bert) Hargrave: Mr. Speaker, I am pleased to respond in the adjournment debate this evening with respect to my question to the Minister for International Trade (Mr. Regan) which I posed last May 24, which appears at page 4010 of Hansard. At that time, the matter concerned beef imports into Canada from the European Common Market.
I want to take a moment to thank the Minister for International Trade, even though he is not in the House, for what I would call his careful answer on this subject at that time. I would point out as well that he was previously briefed several weeks ago by myself during a meeting of the External Affairs Committee when the Minister was a witness and I was on the committee.
I will give the Minister credit for a much better response last week in the House than the Minister of Agriculture (Mr. Whelan) provided on this same beef import issue when it was raised just one day earlier, on May 23, by my colleague, the Hon. Member for Portage-Marquette (Mr. Mayer). On that occasion the Minister of Agriculture deliberately avoided the beef import issue and instead gave us all a sermon on the benefits of marketing boards with supply management powers for our Canadian beef cattle industry. That subject was not the issue at all.
My personal concern about this matter is that we in Canada are the only country in the world with an established and significant beef cattle industry of our own that imposes no meaningful restraints on subsidized foreign beef exports. Our only practical limitation on this matter is our global beef quota of 145.1 million pounds under our Beef Import Act plus the companion Guaranteed Minimum Access, generally known as the GMA under the GATT Agreement.
Canada's total beef cattle industry is presently very upset and angry over the dramatic increase in European Common Market exports to Canada from countries such as the Irish Republic, Denmark, Holland, West Germany and possibly others. Such imported beef is presently entering Canada with export subsidies of 50 cents per pound or higher. That is in Canadian currency, paid for by the exporting country within the Common Market. We are understandably concerned about that huge stockpile of over 600,000 tonnes presently in storage in the common market.
I was particularly pleased with the Minister's response to my supplementary question when he extended a personal invitation in this House for me to visit with him in his office to discuss this issue later that same day. I was pleased to accept that invitation. I am sure the ensuing session was well worth while to both of us. As a result of that excellent private meeting, I would seriously suggest that the Minister for International Trade has received some inaccurate background information from his advisory staff on two items.

May 29, 1984
Adjournment Debate
First, the Minister seems to feel that while our total beef imports may have changed as to their country of origin, the general total level of imports had not increased and was not excessive. This is certainly not the case. Our traditional imports from Australia and New Zealand have dropped somewhat, it is true, but this drop off has been replaced with huge amounts from the Common Market, all with export subsidies.
The second item that needs comment and correction is that the Minister seems to have been advised that Canada's global import quota of 145.1 million pounds will not be filled during the 1984 calendar year. Therefore, there should be no serious reason for our Canadian concerns. This is certainly not the case. The Canadian Cattlemen's Association has monitored these imports from all countries very carefully. The Association does this year by year. It is a very good source of information on this type of statistic. The Canadian Cattlemen's Association has always done this as a service for Canada's beef cattle producers and the total industry.
The CCA's considered opinion is that our global quota could be filled as early as August or September of this year, after which we can expect our live cow prices to drop rather sharply as a result of being forced onto the United States market in larger and larger numbers at that time of year. It is important to note that I think the Minister has the best of intentions. That was obvious to me when we had our private conversation. I think, however, he has not been properly advised, at least along those two lines. Admittedly it is difficult to keep on top of the pounds of imported beef coming into Canada. But this can be done. The Canadian Cattlemen's Association over the years has done a superb job of monitoring the numbers. Most of the figures come from the Government of Canada, from Statistics Canada. It is a matter of the Minister taking the time to assess the total situation and get a variety of expert opinions. That is available.


William Kenneth Robinson: Mr. Speaker, the Hon. Member for Medicine Hat (Mr. Hargrave) does make some very telling points. It is accurate to state that imports of beef into Canada have increased greatly when measured on a year over year basis. The information I have indicates that imports from all sources during the first four months of this year were 45.2 million pounds compared with 36.7 million pounds during the same months last year.
The Government shares the Canadian Cattlemen's concern about the rapid increase of subsidized beef imports into Canada from the European community. Since the beginning of the year, officials of the Department of External Affairs, in consultation with those from other Departments, have been monitoring and evaluating the situation closely in view of the potential destabilizing effect such imports could have on Canadian markets and trade patterns.
Strong representations have been made to the European Economic Community, urging it to cease the undercutting of the Canadian market. Canadian representatives to the GATT
have also raised the issue. Although Canada has not received a formal response, I am informed that on May 12, 1984, the European Community reduced its export refund by 6.6 per cent. This is welcome, but the European Economic Community needs to do more. Canadian officials shall be raising this issue again with the European Economic Community next week on June 7 and June 8 in the regular review of Canada-European Economic Community problems.
Moreover, I believe that the Canadian Cattlemen's Association is preparing a submission requesting the application of countervailing duties on imports of Irish beef products. This submission will provide the Government the opportunity to evaluate if the industry is suffering injury due to these imports. Should this prove to be the case, appropriate action, consistent with Canadian law and our GATT obligations, will be taken.


SCIENCE AND TECHNOLOGY-MACDONALD COMMISSION'S APPROACH TO CHALLENGE OF TECHNOLOGY. (B) GOVERNMENT INVESTMENT IN RESEARCH AND DEVELOPMENT
Thomas Edward Siddon: Mr. Speaker, I welcome this opportunity to elaborate upon the questions which I asked on April 17 in the House of the Minister of State for Science and Technology (Mr. Johnston), as reported at page 3136 of Hansard. At that time I was disturbed by the interim report of the Macdonald Commission which failed to recognize the importance of the new technologies that are now transforming global economies from one end of the planet to another. This represents a significant challenge to Canada. I must clarify that I am talking about the challenge to use technology to increase the wealth and income to be extracted from our traditional strong suits-our resource-based industries and our manufacturing enterprises. I am not just talking about high technology or micro-electronics in a narrow sense, but the equalization process which is under way in the world and the transformation of the economies of all nations this challenge is presenting.
I expressed my concern about the report of the Macdonald Commission entitled "Challenges and Choices" which left the impression that Canada perhaps had a choice as to whether or not it should increase its commitment to technological advancement, as if we could stand idly by and watch these rapid transformations occurring throughout the world and not become involved by way of a major change or shift in the priorities of our nation and of the federal Government, particularly.
The approach taken by the Macdonald Commission, in not coming up with specific proposals or a categorical position on the issue, not only flies in the face of the facts as they reveal themselves around the world but seems contrary to the submission of the Minister of State for Science and Technology to the Macdonald Commission last October, wherein he included a call for a major increase in Canada's commitment to research and development. At that time he stated that the Government's target would be 1.5 per cent of Gross National Product being invested in research and development by 1985.
May 29, 1984

On April 17,1 sought the Minister's assurance that he stood by his earlier commitment and asked whether he was happy with the ambivalent approach of the Macdonald Commission to technology. What 1 received back was worse than ambivalence. Specifically I asked the Minister:
-does he still support his submission to the Commission where he said that Canada must raise its commitment to research and development in a major way-
He said, and I repeat, "that Canada must raise its commitment to research and development in a major way." His contradictory answer to the question was: "clearly I stand behind the submission I made to the Macdonald Commission." He went on to indicate:
-the Government's commitment to research and development has been consistent ... and has not decreased-
Is his statement that Canada's commitment to science and technology has not decreased the same as his earlier one that Canada should raise in a major way its national investment in research and development?
The Minister's answer shows that the Government has had no serious intention of increasing its expenditure on and encouragement of research and development, despite its longstanding pledge, going back several years, to raise this investment to 1.5 per cent of GNP by 1985. Indeed, if we go back to 1968 at about the time the present Prime Minister (Mr. Trudeau) took office, Canada was spending 1.5 per cent of its GNP on research and development. In the intervening decade or more, our investment in research declined in a rather drastic way.
This tendency has continued as confirmed by Statistics Canada's annual science bulletin which was issued just a few weeks prior to the Macdonald report. The Stats Can report released a couple of months ago said that Canada's investment in research and development had dropped from 1.29 per cent of GNP to 1.28 per cent in 1983 and will drop further to 1.24 per cent in the present financial year. This means that the Government has failed miserably in its attempt-if there has been any attempt at all-to meet its modest goal of spending
1.5	per cent of GNP on research by 1985. The amount of 1.5 per cent of GNP equates to about $6 billion. That is less than one-third of what we pay in this country merely to service our national debt. It is an investment which absolutely must be made by the nation.
The Minister did not dispute the fact that statistically our commitment to research had declined. In fact, he confirmed it with his attempt at excuse-making. Specifically I asked the
Adjournment Debate
Minister, "Does the Mnister have an explanation as to why in the two years he has been Minister of State for Science and Technology Canada's investment in research and development has dropped-?"
The Minister gave two strangely incongruous reasons for this decline. First he said, "That is one of the outcomes of any recession", implying that national incomes had dropped and therefore we spent less. In the same answer he said that this occurred because of the economic growth during the period. To my naive way of thinking, those two statements appear to be totally contradictory.


The Acting Speaker (Mr. Herbert):: Order, please. I regret to interrupt the Hon. Member but his time has expired.


Rolland Dion: Mr. Speaker, it is with great pleasure that I rise in the House this evening to answer the question put by the Hon. Member for Richmond-South Delta (Mr. Siddon) concerning the federal Government's commitments to research and technology.
I am pleased with this opportunity to address the House this evening regarding the federal Government's support for research and development and technological growth in Canada. I have no reason to doubt the seriousness of this Government's commitment to increasing research and development, and I can give an example to prove it.
Since the Government set its objectives for research and development spending, gross national expenditures in those areas have increased substantially. In 1979, gross expenditures for research and development represented 1.02 per cent of GNP. The latest figures provided by Statistics Canada show that in 1982, gross expenditures in those areas accounted for 1.29 per cent of GNP and it is expected this will be 1.28 per cent for 1983.
The ratio of these gross expenditures to GNP for the last two years is not as high as expected, mainly because Statistics Canada's previous assessments of GNP were very conservative. Our present economic growth is far more dynamic than was forecast, and consequently, if we express research and development as a percentage of today's expanding economy, it has not expanded to the same extent. Furthermore, some R and D expenditures planned for 1983 did not take place, especially in the sector where spending by the oil and natural gas industry has dropped compared with previous forecasts.

May 29, 1984
Adjournment Debate
Mr. Speaker, I could say more on the subject, but since I have only three minutes, I shall simply add that as far as technological development is concerned, I can assure you that the Government's commitment to investing in research and development is both substantial and sustained, and those must be my last words since my time has expired.


The Acting Speaker (Mr. Herbert):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 2(1).
At 6.26 p.m., the House adjourned, without question put, pursuant to Standing Order.

Wednesday, May 30, 1984