February 6, 1967

LIB

Mitchell William Sharp (Minister of Finance and Receiver General)

Liberal

Mr. Sharp:

The money was provided in the bill itself.

Topic:   THE BUDGET
Subtopic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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PC

Gordon Harvey Aiken

Progressive Conservative

Mr. Aiken:

Did we have a supplementary budget to meet the extra costs as a result of the skyrocketing inflation and the increase in government spending? Perhaps the minister would answer that. I think not. But herein lies the answer. We all know the story of the straw that broke the camel's back. We know that the cost of government has grown and grown until the limit has been reached.

Just as the government was about to add the last straw the Minister of Finance snatched it away triumphantly protesting that we could not let our elderly break the camel's back and that we should ourselves carry the load of this extra straw. The minister knew that the Canadian people would gladly carry this little extra load on behalf of our senior citizens and that at the same time the camel would not break down. So our economy goes on carrying the load of the government's spending until the next straw comes by. I wonder whether the minister will find such a good excuse under similar circumstances the next time to pick off that next straw? I suppose we shall see what happens by the time the budget rolls around in a couple of months, but regardless of the reason let us not be led to think that the old age supplements were the whole cause of these two tax increases.

February 6, 1967

With otherwise healthy government, financing these tax increases could have been absorbed in other ways and without an additional budget. I think this is the fundamental matter which we must examine. If government spending had not accumulated to the point that it has, this additional load could have easily been carried. I think it is unfair that we should place on the old age pension supplement the sole cause for the tax increases that we are now considering.

This leads to another matter. Why do we find increasingly anxious attention being paid to our financial institutions at the present time? Canada's long-term financial prospects are excellent. The country at the present time could be described as being nervous. There is a lack of confidence because no firm businesslike action or legislation has been forthcoming from the government to meet the current problems. The cost of living continues to increase rapidly. While there are some increases in long-term credit, shortterm credit is in very short supply. This is what we need for our day by day operations.

How many royal commissions, parliamentary committees and other boards of inquiry will the government continue to set up to look into questions on which it should make a decision itself? Just recently I have had cause to raise some question concerning the number of committees which are sitting to look into an immense number of problems, many of which could be placed directly before the government and action taken. While these committees are valuable in a great many cases, I think they are abused in many other cases when they are used to help the government put off making a definite decision in respect of some of these important problems.

I see it is six o'clock, Mr. Speaker. I believe something further is to be announced.

Topic:   THE BUDGET
Subtopic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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LIB

Lucien Lamoureux (Speaker of the House of Commons)

Liberal

Mr. Speaker:

Is it agreed that the house recess until eight o'clock?

Topic:   THE BUDGET
Subtopic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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?

Some hon. Members:

Agreed.

Topic:   THE BUDGET
Subtopic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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SITTING SUSPENDED

SITTING RESUMED The house resumed at 8 p.m.

PC

Gordon Harvey Aiken

Progressive Conservative

Mr. Aiken:

Mr. Speaker, at the adjournment I was discussing the situation of the financial institutions of this country. I believe we recognize that the government will either

The Budget-Mr. Aiken have to cut tax expenditures or increase taxes in order to restore confidence in the economy. The last controversy over the Bank of Western Canada, following other difficulties with regard to financial institutions in Canada, will merely add fuel to the fire. Regardless of the reasons for the dispute, it has come at a particularly unfortunate time. The fact that the issue has been raised by Mr. James Coyne, who seems to have a penchant for public controversy, will certainly cause many hon. members some scepticism. However, his allegations should be fully investigated to ensure that the objects of this banking institution are properly carried out.

To come back for a moment to the budget debate, I would say we have been puzzled by the apparent reluctance of government members up to this time to take part in the debate. Here is the opportunity for many of the members of the Liberal party to discuss the important matters of the economy of this country. We read in the press from time to time about the lack of opportunity for private members on the government side of the house to speak out. Having been a member on the government side for some years, I recognize the lack of opportunity in many cases when they have so many experts sitting in front of them to discuss almost all fields. But here is the opportunity, during the budget debate, for some of these monumental expositions to be made.

However, Mr. Speaker, we have had four consecutive opposition members speaking on this budget debate without any government members seeming to clamour for the opportunity to speak great words in favour of the budget. I understand that there are one or two government members now ready, willing and anxious to present their views; but it has been a matter of some bewilderment to us that they have not sought to speak before. Perhaps they are too embarrassed by this unnecessary budget to take part in the debate, and merely want to get it over with and hope the government may come up with something more vital, something more meaningful for them to discuss. Perhaps it is difficult for the government members to explain a general tax increase at a time when the economy needs some encouragement, rather than discouragement.

I shall not reiterate what I said before the dinner hour, but it seems that this budget was an unnecessary exposition so close to the time for a regular budget, when a general tax increase could have been applied. I think it

February 6, 1967

The Budget-Mr. Aiken was something the minister felt he had to do for the expedience of the moment, and now wishes he had left undone until a later date. However, I do not want to delay the budget debate for that reason. I believe it was unnecessary; it was ill-timed and left a cloud on the older people of this country; it left the general impression with the public that it was only to provide the old age security supplement that additional taxes had to be raised. As I indicated previously, this was not the sole reason, and if there had been a properly managed economy it could have absorbed this latest burden on the taxpayers of the country.

[DOT] (8:10 p.m.)

The budget debate is normally a time to air complaints. While this is a fairly narrow budget, I have one complaint that I want to raise at this time in connection with budget matters. Being a member from a rural riding it bothers me considerably. It relates to the administration of unemployment insurance in rural areas. One of the things that a person living in a rural area is required to do when he applies for unemployment insurance is to prove that he is willing and able to accept employment, and that he is available for work. The Unemployment Insurance Commission has taken this to mean that a person who wishes to draw unemployment insurance must not limit the place of employment, the wages, or the type of job that he is prepared to accept. Time after time people in rural areas receive notices of disqualification because they have said that they find it difficult to work outside the community in which they reside. However, if they do state in their applications that they wish to work only within the immediate area of residence, they are disqualified by their own words.

To make it worse, they are often encouraged by the Unemployment Insurance Commission to state exactly where and when they will accept a job. If they say that they will not accept a job at a certain place 15 miles away, they may be disqualified on the ground that they have refused a job which, really, was never offered to them. This is most difficult for those people who have been raised, have worked and lived in a rural or an isolated community. The Unemployment Insurance Commission says: "You may have lived and worked there but we cannot get you a job there, so you had better go somewhere else." There may be reasons for it under some circumstances, but it is difficult in many cases for men to travel 30, 40 or 50 miles when they

do not have transportation, when they are out of a job and when they cannot afford to maintain two homes.

If it is difficult for men, it is all the more difficult for women who either work part time to supplement the family income, or even support a family because of the inability of the husband to do so or because of his absence. And yet such a woman living in a rural area is told that she has to leave the community and go somewhere else to find employment.

Of course this is absolutely impossible. I run across this time after time and I take this opportunity to raise the issue and to ask that the unemployment insurance regulations be applied somewhat more reasonably to people in rural areas. It might be that we have a particularly difficult office in our area but I have heard the same complaint from other hon. members. I hope the government will give some thought to a more reasonable application of the Unemployment Insurance Act.

Mr. Speaker, my time has just about expired. I hope that before the budget debate is concluded we will hear some hon. members on the government side explain how they can justify the imposition of the tax in question at a time when perhaps it could have been avoided. I hope they will explain why the apparent burden of the increase in taxes was cast upon the older people of this country. We know very well that while the granting of benefits to the older people was a factor in the increase in taxation, it was not the only factor. If the economy of the country had been in proper shape, if we had not been spending money recklessly and going into debt, we would have been able to absorb this increase instead of raising the tax at the time when we decided to give the old people a supplement. In this way we have burdened them with this increase.

I am sure the minister knew that the people of Canada would accept an additional tax, but I do not think we should be under the illusion that a supplement to the older people was the whole reason for a tax increase at this time. We have burdened ourselves to the point where a tax increase would have been necessary anyway. We may have to have another increase in the regular budget. It seems to me that the minister is approaching this matter in a piecemeal way and is trying to cast the burden of his difficulty on as broad a spectrum of the population as possible.

February 6, 1967

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LIB

James Allen (Jim) Byrne (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. J. A. Byrne (Parliamentary Secretary to Minister of Transport):

Mr. Speaker, as the hon. member for Parry Sound-Muskoka (Mr. Aiken) has pointed out, this is the opportunity for private members to express their opinions on financial matters, and on other matters generally that are of concern to them. I am seeking to use this opportunity for that purpose and I am speaking as a private member representing Kootenay East. I think it is true that despite the fulminations of the members of the opposition, the budget speech as outlined by the minister has met with general approval. It is true that no one relishes a tax increase, but on the other hand those who are benefiting-and some of them have been mentioned by the hon. member for Parry Sound-Muskoka-certainly smile with approbation when it means an increase in grants.

I think the hollowness of the invective of the opposition can best be disclosed by turning back a few pages of Hansard to the debate on the act which provided for a supplement to old age security. Of course at that time it was a call for higher grants, while today it is a call for a reduction in taxes. This reminds me of the sage advice that was given to me when I was a rookie member of parliament-admittedly quite a number of years ago-that a successful politician never votes for a tax bill or against a grant.

Generally speaking I think that governments must face up to the horrible facts of life and be ever mindful of the Scottish politician's advice which is as follows:

They'll dom soon forget what you've already gie 'em, but they'll remember for a long time what you ain't gie 'em yet.

While it is not my purpose to criticize the imposition of higher income taxes on certain groups of taxpayers and an increase in the sales tax, I do offer a suggestion which I believe to be fair and reasonable. To some members of the house it will be very unpopular, but I know that others will recognize that deep down in their hearts they find it acceptable, although they might not be prepared to admit it. I know also that it will be unpopular with a large and what I believe to be a preferred section of our population. It will indeed constitute a severe criticism of the economic philosophy of my friends, but I hope they will take it in the best sense, namely that it is a question of principle and that I believe it to be in the best interest of all Canadians.

23033-804i

The Budget-Mr. Byrne

I am referring to the removal of the special tax privilege enjoyed by co-operative enterprises and credit unions. Had this special tax incentive, based as it is on no sound economic or fiscal theory, been removed decades ago when co-operatives first emerged from the local self-help status on which they were founded, no new taxes would have been necessary at this time.

[DOT] (8:20 p.m.)

The co-operative movement, as it chooses to be called, is nothing more nor less than corporate enterprise enjoying the benefits of $3 billion worth of business each year in Canada. Co-operatives have become a corporate colossus in competitive enterprise, but with a difference. Co-operative profits are almost completely exempt from income tax. Their competitive advantage at the expense of the corporate and personal taxpayer may be simply stated. A corporate enterprise, in order to undertake a $1 million expansion program must have first earned $2 million in excess of a reasonable return on invested capital. One half of the corporate profit, or 52 per cent, must first be handed over to government, its sleeping but avaricious partner in business. The co-operative, on the other hand, need earn only $1 million, declare the full amount in patronage dividends and retain all or nearly all as capital for reinvestment purposes. The co-operative has no sleeping partner who demands 52 per cent of the corporate earnings.

Since the beginning of the industrial revolution, the eggheads have tended to look upon a corporate enterprise as a menace to society. Anyone who dares to defend corporate enterprise is one virtually living in sin. I believe, and sincerely believe, it is the benefits of corporate enterprise, operating under a democratic free enterprise system, that has provided for us on the North American continent the highest standard of living in the world, and in Canada the most comprehensive social welfare program in the world. Certainly, nothing I saw during my recent visit to the Union of Soviet Socialist Republics altered, even in the minutest detail, this long held conviction.

Topic:   SITTING SUSPENDED
Subtopic:   SITTING RESUMED The house resumed at 8 p.m.
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PC

Donald MacInnis

Progressive Conservative

Mr. Maclnnis (Cape Breton South):

Will the hon. member permit a question?

Topic:   SITTING SUSPENDED
Subtopic:   SITTING RESUMED The house resumed at 8 p.m.
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LIB

James Allen (Jim) Byrne (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Byrne:

I will permit a question when my speech has been completed. I know hon. members-

February 6, 1967

The Budget-Mr. Byrne

Topic:   SITTING SUSPENDED
Subtopic:   SITTING RESUMED The house resumed at 8 p.m.
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?

Mr, Maclnnis (Cape Breton South):

Mr. Speaker, I rise on a point of order. Surely, the hon. member can indicate to us what he believes-

Topic:   SITTING SUSPENDED
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LIB

James Allen (Jim) Byrne (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Byrne:

I know the hon. members for York South (Mr. Lewis) and Bumaby-Coquitlam (Mr. Douglas) -

Topic:   SITTING SUSPENDED
Subtopic:   SITTING RESUMED The house resumed at 8 p.m.
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LIB

Herman Maxwell Batten (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

The hon. member for Cape Breton South on a point of order.

Topic:   SITTING SUSPENDED
Subtopic:   SITTING RESUMED The house resumed at 8 p.m.
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PC

Donald MacInnis

Progressive Conservative

Mr. Maclnnis (Cape Breton South):

The

hon. member is reading his speech, and he continues to read every word he has spoken in the house. This is not in accordance with the rules.

Topic:   SITTING SUSPENDED
Subtopic:   SITTING RESUMED The house resumed at 8 p.m.
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LIB

James Allen (Jim) Byrne (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Byrne:

I submit to this hon. member who has taken exception to what is being done that I do not intervene very often in debate. I have what may be considered to be copious notes because I am dealing with a very serious matter. If the hon. member would be as serious as I am in this house on occasion, he would show up much better.

I know that the socialist group in the house will not agree-*

Topic:   SITTING SUSPENDED
Subtopic:   SITTING RESUMED The house resumed at 8 p.m.
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PC

Donald MacInnis

Progressive Conservative

Mr. Maclnnis (Cape Breton South):

I rise on a point of order.

Topic:   SITTING SUSPENDED
Subtopic:   SITTING RESUMED The house resumed at 8 p.m.
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LIB

Herman Maxwell Batten (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Order. The hon. member for Cape Breton South on a point of order.

Topic:   SITTING SUSPENDED
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PC

Donald MacInnis

Progressive Conservative

Mr. Maclnnis (Cape Breton South):

Mr. Speaker, I am waiting for a ruling from the Chair. Is it or is it not against the rules to read word for word from a prepared text?

Topic:   SITTING SUSPENDED
Subtopic:   SITTING RESUMED The house resumed at 8 p.m.
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LIB

Herman Maxwell Batten (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

I am sure the hon. member will recall the explanation given by the hon. member for Kootenay East. He has explained to the house that he has copious notes, but I hope that he will not follow them too closely.

Topic:   SITTING SUSPENDED
Subtopic:   SITTING RESUMED The house resumed at 8 p.m.
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PC

Edward Nasserden

Progressive Conservative

Mr. Nasserden:

It appears that the notes are not only copious but difficult to read.

Topic:   SITTING SUSPENDED
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February 6, 1967