February 7, 1967

PC

Philip Bernard Rynard

Progressive Conservative

Mr. Rynard:

Mr. Speaker, as I was saying before our dinner recess, we have to put more money into research. This has become a vital factor in the world competition in which we find ourselves today. It perturbs me greatly when I realize that the provinces can only spend money and provide the buildings, on a matching basis, if they have the funds to do it. I think the solution of this problem in dominion-provincial relations is of paramount importance at the present time, and I mean the allocation of taxes.

As I said previously, the province of Ontario has been short changed to the tune of over $280 million and it is feared that not only education but also some of the health and welfare programs which have been set up in that province will have to be cut back. However, regardless of whether there are sufficient funds for construction of all the necessary buildings there is also a crying need for more teachers and researches. I hope that the Minister of Finance is listening.

There is today in Canada an urgent need for more teachers, to enable the schools to operate so as to educate more researchers and doctors. The first need which must be met is to provide sufficient funds to build the schools and to educate more teachers and researchers to train our graduates who, in turn, can themselves become teachers.

I do not think there is any need to elaborate further on this subject. Studies which have been carried out in the United States have shown that the social return from university education is between 8 and 11 per cent. This is a pretty good return, when one considers that it includes income tax and other taxes. According to those studies the private return alone is in excess of 12 per cent which indirectly in the long run will bring back more taxes. In Canada similar results have been obtained in the social field. The private return has been from 15 to 20 per cent. Therefore I say to the minister that if he wishes Canada to develop economically and to lay the foundation for this development he will have to provide the money with

February 7, 1967

The Budget-Mr. Rynard which to do it. In view of all this it is very hard to understand why the scholarship awards have been delayed.

This attitude on the part of the government applies not only to the field of medicine and medical science but also to industry. The other day I was looking at a brochure in which it was said that most of our engineers leave Canada to go to the United States, because if they stay here they only become some sort of managers. Surely the incentives to keep them here are insufficient when, through our own fault we cannot keep our well trained engineers in this country. Not only does industry suffer, but so does the whole economy of the country.

As I have pointed out on more than one occasion, this represents a very serious loss. The minister is well aware of the situation because he has been quoted as saying that we cannot expect the same standard of living in Canada as is enjoyed by the average American, because our productivity does not equal that of the United States. Surely, the way to cure that is to have better and more research scientists and more education. This is very well illustrated by the fact that in 1963 43 per cent of the male labour force between the ages of 25 and 64 in the United States had 12 years of education, as compared with the same age group in Canada in which only 25 per cent had the same number of years of education.

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

Now, Mr. Speaker, I have pointed out that research was cut back. I think this is the highest type of folly that has been exhibited by this government. We are cutting off the hand that would feed us and keep the economy of this country strong. I do not feel there is anything to be happy about, in the performance of the government. People say, look at our productivity; it has gone up and our manufacturing has gone up by 50 per cent since 1961. This is correct, Mr. Speaker, but in the same period of time we had a greater percentage of increase in our imports. Where are we going? At the end of last year we faced a $2 billion deficit. Our manufactured exports picked up to the extent of 64 per cent in the same period of time, from 1961 to 1966 but when we examined the picture we found there was an over-all decline in the comparison with the same trading groups-or with other countries.

Now, Mr. Speaker, this is not good enough. If we are going to build a sound Canada, we have to educate the young people of this

country and we have to keep our trained personnel in order to give us the research that will produce the goods and bring our productivity up to par with the United States. I believe we could even outsell the United States, Mr. Speaker, because in this country we have the natural resources. We do not have to buy them, we do not have to bring them in; they are in Canada. All we need is the skills for processing them; but we cannot get those skills by cutting back on research expenditures. We must provide the money, we have the taxing ability to do so. When we cut back on the provinces, they cannot go ahead with the projects they need to provide the trained personnel for this country.

I want to go back for a minute and say that I do not believe the people are going to tolerate this type of thing much longer. We are living in a country with the greatest resources per capita in the world. We have resources of all types right at our back door, but we need the skills to manufacture them. Sometimes I get annoyed when the government points out that we are proceeding more and more toward free trade, because I believe that if our productivity is now only 70 per cent of that of the United States, then the logical conclusion is that with a free trade economy we would have little manufacturing in this country. I do not believe this is the way to build Canada.

Topic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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NDP

Colin Cameron

New Democratic Party

Mr. Colin Cameron (Nanaimo-Cowichan-The Islands):

Mr. Speaker, I do not propose to spend too much time on the minister's budget. There is not much one can say about it. The minister himself described it as a mini-budget. Perhaps, Mr. Speaker, like the mini-skirt, it occasionally reveals more than was intended, not for information of course or to show the condition of the economy, but rather to reveal the condition of the minister's personality. I have the idea that, having got himself into a position of promising a budget, because of a condition that prevailed in the economy at that time, and when, as is always likely to happen, conditions changed, the minister felt himself in honour bound to bring forward a mini-budget anyway. I think he may have had some purpose in doing so, but I suggest it had nothing whatever to do with the economy of Canada.

I seemed to detect on the part of the minister a desire to point a moral. I could really see all of the minister's Calvinistic ancestors peering over his shoulder as he drew up this budget. It seemed to me he was determined to underline and emphasize the old adage, that

February 7, 1967

in this sad vale of tears you get nothing for nothing and damn little for sixpence.

I think, Mr. Speaker, that is a point of view with which one could agree. No one will deny it. I suspect also the minister hoped to raise some question in the minds of the Canadian people the next time they begin to demand the expansion of social services or increased amenities for living. The minister hoped they would connect this clearly in their minds with the brutal fact of taxation. Again, I think one cannot quarrel with that point of view. On the other hand, I would suggest to the minister that the people of Canada may be asking themselves some rather different questions. I do not believe for a moment they are now likely to question the necessity and desirability of having adequate pensions for old people, adequate services for children, adequate disability pensions, retirement pensions. Most people in Canada accept the fact we are going to have these things. If we have any pretentions to being a civilized, progressive people, we must see that we get them for the Canadian people.

The sort of questions the Canadian people likely will be asking themselves are, not can we afford better old age pensions, but can we afford to allow businesses to evade taxation via the expense account route? Can we afford to have executive salaries undisclosed and untaxed in the form of cars, houses and the various perquisites that are provided by large corporations? Can we afford the insanely generous depletion and depreciation allowances which are permitted? Can we afford untaxed capital gains? Finally, can we afford to allow the gross misallocation of resources, which sees service stations being built on all four corners of an intersection, luxury apartments, fancy office buildings, when the housing needs of the Canadian people are crying aloud? These are the questions that are likely to be raised in the minds of the Canadian people by the minister's mini-budget.

Some of my colleagues have dealt perhaps a little more harshly, a little more decisively with this aspect of the budget. I do not propose to spend much more time with it, because in my mind the minister's mini-budget was a piece of rather ill advised nonsense. I think there is something about which the minister must be thinking now as the time comes close for the presentation to parliament of the real budget. I hope when he does so he will not regard this merely as a method of accounting for the housekeeping for the government of Canada, but that he will realize in 23033-807J

The Budget-Mr. C. Cameron the modern age the budget is one of the weapons in his control by which to control economic development in Canada.

For a few moments, Mr. Speaker, I should like to present the idea that we are now moving into an extremely different world than the one we have known up to this time. We have to regard our economy, not as a happy hunting ground for various people, whether they be labour or management or shareholders, but as a complex and extremely precariously balanced productive and distributive machine. If we look over the world today we will find that, no matter under what political philosophy this machine is being developed, it invariably takes the same form. In fact, Mr. Speaker, I think one might paraphrase the phrase of the famous professor, Marshall McLuhan, that "the medium is the message" by saying that technology is the organization. The technological development of the age dictates a certain form, a certain size and a certain type of productive organization.

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

What is important, of course, from a social point of view is what we are going to do with the products of that particular machine. The important thing is that we must grasp the idea that this is a machine, a structure, shall I say, that must inevitably be built to fit the technological stage we have reached today. One of our troubles is that we have allowed a great many excrescences, shall I say, of this machine to very severely hamper its efficiency. We have allowed a whole host of comparatively useless intermediaries who contribute little or nothing to impede progress toward the development of an effective and productive machine in this country.

One of the most important cogs in a modern industrial productive machine is provided by the financial institutions which contribute to its operations. Here in Canada we are at the present time in a very sad way in this regard. I do not need to point to the various collapses that we have had in the financial world; to my mind the matter is much more serious and goes much deeper.

I know it is not proper, Mr. Speaker, to refer to proceedings before a committee, but I think I can remind the house that at the present moment one of the committees of this house is dealing with some of the experiences of two or three financial institutions. We have

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The Budget-Mr. C. Cameron allowed to grow up in Canada a whole conglomeration of financial institutions of various sorts and under different jurisdictions, some properly controlled, some completely uncontrolled, but all of them intruding themselves into the operation of our productive machine-a sort of ramshackle growth of financial institutions which apparently contribute nothing except confusion and doubt as to the ability of the Canadian people to produce the things they need to produce.

We have had before the committee on finance and economic affairs for some time a bill dealing with the major financial institutions of the country-the chartered banks. But always appearing over the horizon in all of our discussions are the heads of these various subsidiary financial institutions who are apparently beyond our control, or at least beyond the control that this government is prepared to exercise. As a consequence, Mr. Speaker, there is a growing concern in the public mind as to whether Canadian financial institutions are indeed as stable and efficient as we like to believe.

I think we should realize that they deal entirely with the savings of the Canadian people. If we are going to build a modern productive and distributive machine, such as we have not now and, indeed, such as no country in the world has yet, the sort of machine that is going to be made completely necessary by technological development, then we have to tackle this question of these institutions which we allow to dabble in the pool of the savings of the Canadian people.

We are doing almost nothing to streamline these institutions, Mr. Speaker. We are doing almost nothing to bring a vast body of them under adequate control; and we are not doing this because of the strictly doctrinaire approach of this government-and I might say it is the same doctrinaire approach that is displayed by the official opposition-a doctrinaire approach which is very pronounced when we come to deal with such institutions as trust companies, loan companies, insurance companies.

The principal doctrine, Mr. Speaker, is that it is the inalienable right of Canadian citizens, or some of them, to be able to collect the savings of their fellow citizens and themselves decide what they are going to do with those savings. We are, of course, trying to bring some of them under control through the deposit insurance legislation; but I am most struck by the fact that this government is not prepared to make a definite statement that it

DEBATES February 7, 1967

will exert its authority under the British North America Act over all institutions that could be defined as doing banking business. The consequence is that no one at present knows exactly how our financial institutions are going to operate in the course of the next ten years.

We may feel at the present time that the institutions that we have controlled-that is, the banks and to some extent trust companies-are sufficiently controlled for the time being; but we must have some doubts about some other institutions when we see what happened to the Prudential empire, to Atlantic Acceptance Corporation, and when we saw the other day that the creditors of North American General Insurance Company would be fortunate to get 58 cents on the dollar.

I hear someone asking me about the socialized industries in Saskatchewan. I would be glad to deal with the socialized industries in Saskatchewan, but I do not think that the subject would be germane to this discussion. I know it must annoy members of the official opposition, and probably members of the government party, when I point to the fact that today they are the doctrinaire parties of this country. They are not prepared to abandon their doctrine-their sacred doctrine of the right of Canadians to exploit each other, and particularly in the financial field to have some control of the savings of others.

I think there is a very growing concern about this question. One of the matters we must deal with, one which I am sure we will have to deal with before the next decennial revision of the Bank Act, is the bringing under adequate control of the host of financial institutions of varying function, varying development and varying power.

I have been quite struck with the hesitation of the government to move in this regard, because it leaves them in a very precarious position. I have been struck by the way in which the government fears the reaction of provinces which have assumed squatters' rights in an area that is definitely assigned to the federal government and the federal parliament. But apparently nothing can be done about it because, as I say, this government is wedded to the doctrine of what they call free enterprise.

One of the major types of financial institution, one that deals very closely with the savings of the Canadian people, is the insurance company. I have been disturbed

I have mentioned this in this house several

February 7, 1967 COMMONS

times-by the endless proliferation of new life insurance companies which this parliament is asked to incorporate. We are being asked to incorporate more hands to dig into the pool of the savings of the Canadian people. It fragments this pool of savings. It robs us of any power to direct the investment of the savings of the Canadian people, because we leave those savings in the hands of these various individuals who have their own axes to grind, instead of being interested in the development of the Canadian economy.

[DOT] (8:30 p.m.)

I would hope, Mr. Speaker, that before too long this government will be prepared to consider doing what we in this party have suggested to them on a number of occasions, and that is to expand the operations of the Canada Pension Plan so as to offer the Canadian people a wide range of options. There is no reason for a Canadian citizen, who wishes to provide for his old age at a more generous rate than is given by the basic pension under the Canada Pension Plan, not having the opportunity to decide to contribute a larger proportion of his income in return for a larger retirement allowance, when his time comes to retire. I cannot for the life of me see that we should admit the right of any private individual in this country to acquire those savings with his enterprise and decide, himself, what he will do with those savings. So long as we can be sure-and we are not always-that the people who have contributed their savings, get their money back, get their savings back, we are asked to believe that that is enough. I do not think that it is enough. I think the savings of the Canadian people upon which all future expansion depends, should be firmly in the hands of public authorities.

None of us in this house yet knows what the government policies about the vexed questions of foreign ownership are, whether the simplistic views of the former minister of finance will prevail. Does the government hope to solve the problem by having 25 per cent of corporations foreign owned, or does it hope to persuade Canadians to buy 25 per cent of their shares? I do not know. This has never been cleared up.

I say that if we are to follow the policy of the former minister, it is an extremely simple minded policy, unlikely to yield results redounding to the interest of the Canadian people. On the other hand I see a vast opportunity for government initiative for developing the Canadian economy further, beyond this

The Budget-Mr. C. Cameron stage. If we have not too much pride we could take a leaf from the books of some of the developing countries of the world and invest jointly, publicly and privately. Some developing countries find no difficulty in getting foreign investors to bring in their capital, to erect industries with their know-how and entrepreneurial knowledge for 49 per cent of the enterprise. In country after country we find this is taking place. They get foreign capital without losing control of their economy.

I might say, as an interesting little footnote of history, that that great Canadian, Lord Thomson of Fleet, has recently entered into a contract with the government of Yugoslavia by which he is providing 49 per cent of the capital required to build a string of new tourist resort hotels on the Adriatic coast. Everybody seems pleased with this. Lord Thomson, with his well known desire to make money, appears quite satisfied, and the Yugoslavs seem quite satisfied that they will control the hotels being built partly with Lord Thomson's money.

The government also has not been quite forthcoming with what will happen to the project, the Canada Development Corporation, suggested by the former minister of finance. That was to be a vast, privately owned mutual trust, with government backing and public assets to help it along its way. Perhaps the government will go ahead with this idea; I do not know. This is another of the mysteries to be cleared up when the cleavages within the government party have been resolved.

I suggest that there is a place for a Canada Development Corporation different from the one advanced by the Minister without Portfolio. It could very well be attached to a revamped Canada Pension Plan. From that plan, I suggest, most of the funds could come. They could be made available to private enterprise, to joint public and private enterprise and to public enterprise, for the development of the Canadian economy. The result would be that in future the proportion of our economy in foreign hands will be much smaller than it is at present. We should not attempt to cut down that proportion by the ill advised investment of scare Canadian capital in minority shareholdings of existing corporations.

These are some of the things that I hope the Minister of Finance thinks about when he presents us with a real budget-not the rather funny little budget we had a few weeks

February 7, 1967

The Budget-Mr. C. Cameron ago, that does not appear to have had any justifiable purpose, except a moral one. The minister must also consider what fiscal policies he will institute with regard to the allocation of resources. It is not good enough for the minister to rely merely on the statistics of the Dominion Bureau of Statistics, when speaking of our gross national product. He ought not to say that we have reached the limit of our development at the present time; we want to do too many things, and we have to call a halt. Unless he will examine the allocation of resources and devise a fiscal policy that will give us an allocation of resources better than the one we have at the present time, we can expect disappointments. I can think of a number of things which can be done. The sales tax can be adjusted, for instance, to encourage certain types of construction, certain types of industrial development and to discourage others. No one can suggest that there should not be a reallocation of resources in this country.

It is not good enough to go on shouting that we shall make war on poverty, when we do nothing to provide educational opportunities for vast numbers of our people-opportunities through which they might climb out of poverty. It is not good enough to say we have reached the end of our capacity to produce and to build, when we see around us in every city in Canada resources being wasted on projects of doubtful social value. We still have no houses.

It will not do for the Minister of Labour to content himself with holding a housing conference in the city of Toronto unless the government has solved the problem of reallocating resources. I might quote perhaps some evidence given to our committee by the governor of the Bank of Canada. When I asked him if he thought it was possible to use the interest rate as a means of allocating resources, Mr. Rasminsky told me bluntly, "No. I do not think it can be done". He said that that has to be done by fiscal policy. I asked him to make it quite clear that he meant that the government must get into its hands sufficient revenues to be able to make public expenditures in fields, such as housing, to which I have referred.

I hope the Minister of Finance will consider this question of the allocation of resources. I hope the next time he comes before us with a budget he will be able to tell us that the allocation is now discouraging redundant gas stations, redundant shopping centres, redundant luxury apartments, absurd prestige office

buildings, but is on the other hand encouraging housing for the Canadian people, schools for Canadian children, hospitals to care for Canadian sick and educational institutions to provide our badly needed health and educational services. I hope he will not read us a couple of paragraphs from his report and say, "As you see, our gross national product is at its highest level in history, therefore we must be prosperous, and we must have reached the limit." I do not think the Canadian people will be happy if the government continues with this kind of approach to their problems.

We have another problem also. It is about time we began looking at it. We should not be so ingrowing that we ignore looking at it. I was struck the other day with an editorial which quotes Mr. Escott Reid, a former extremely distinguished Canadian public servant who is now in the academic world. The heading reads, "The Most Awesome Problem Confronting Modem Man," and Mr. Escott Reid has this to say:

"The value of the present net long term official aid provided every year by all the rich countries of the western world to all the poor countries of the world is about the same as what the United States spends every year on space research.

[DOT] (8:40 p.m.)

If the western world had last year increased its aid by just one tenth of last year's increase in its income, the flow of aid from the west to the poor countries would have doubled.

In recent years, Canada has been raising the level of its foreign aid by $50 million each year. Fifty million is less than 2 per cent of the annual increase in our wealth."

The editorial goes on to say:

Surely Mr. Reid is on the right track when he urges that Canada increase its aid from the present $300,000,000 mark to about a billion in the next four or five years. Our present figure is only half the UN standard of giving 1 per cent of the national production figure-and we are improving it much too slowly.

As Mr. Reid says:

''If we of the western world persist in our present policies on aid to poor countries, we will have earned the contempt of our children and our grandchildren for the kind of world we will have bequeathed to them. They will not easily forgive us for our short-sighted and ignoble policies on foreign aid."

I would hope that Mr. Escott Reid-and I am sure he does, because I know him- realizes that a prerequisite of doing what he advocates in the interests of our own preservation depends on the development in Canada of an effective and efficient productive machine; it depends on eliminating from our economy all these nonsensical financial

February 7, 1967

institutions that hang like barnacles on this productive machine and are allowed to hang there because the government of this country is in the hands of a doctrinaire party that tries to fit all its policies into the Procrustean bed of so-called free enterprise; that still believes there is some sense and justice in permitting private individuals to play with the savings of the Canadian people, to decide where those savings shall be invested and to ervation depends on the development in Canada.

I am convinced that sooner or later this government or another government will have to enter the modern world and realize, as I said earlier, that, to paraphrase Professor McLuhan, technology is the organization. If you go across the world, if you go to the Soviet union or any of the countries of eastern Europe, you will find exactly the same type of productive machine being built, because technology calls for it. The only thing is that they have scraped some of the barnacles off, but unfortunately they have also allowed some other barnacles to remain which are equally unpleasant, if not perhaps so destructive of their efficiency.

If we are to operate on any doctrinaire basis, whether it be a free enterprise doctrinaire basis or a socialist doctrinaire basis, we are going to land in trouble in the world of the future. Let us grow up; let us wake up, and let us realize that Canada is a country which can influence the course of world events if we are prepared to put our own house in order and clear out the rubbish which we deal with eternally and everlastingly because we seem to think there is some God-given right to fool around with the surplus values created by the people of Canada. These should be devoted to the development of a new Canada that can take its place in the world, as we have not done in the past because we have been afraid to do so, because we have not true wealth, because we know we are dependent on other powers to keep us going; and we are dependent on them because we have refused to rationalize our own society, industry and economy. I hope our own Minister of Finance, when he brings down his budget, will have some of these ideas in mind, and will have in mind particularly the idea of a reallocation of our resources in Canada so that we will wage a real war on poverty, so that we shall begin to eliminate the type of poverty that now afflicts us, so that we will cope with the problem mentioned by my hon. friend the hon. member for York South (Mr. The Budget-Mr. Isabelle Lewis) the other day, when he pointed out that poor housing is not merely a matter of living accommodation but is closely linked with juvenile delinquency, with general unhappiness and misery, and with social problems, for which we pay a tremendous economic price.

It is not good enough to say that these things must always be with us. It is perhaps all right for the godly to say that the poor will always be with us; but it is perhaps time we revised our idea of God and what is permissible in a modem, civilized country.

Topic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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LIB

Joseph Gaston Isabelle

Liberal

Mr. Gaston Isabelle (Gatineau):

Mr. Speaker, I am arrogating to myself a privilege in taking part in the debate which ordinarily follows the budget speech, particularly with respect to the supplementary budget presented by the Minister of Finance (Mr. Sharp) before Christmas.

Once again, the government of Canada has added a page of sound economy to our parliamentary history by providing, through rational and evenly distributed taxation, a minimum vital income for all Canadian citizens. This is yet another addition to social security measures recently implemented, such as the Canada Pension Plan and Medicare, which will undoubtedly place all Canadians on a superior level as compared with the standards of living throughout the world.

Topic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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?

Some hon. Members:

Hear, hear.

Topic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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LIB

Joseph Gaston Isabelle

Liberal

Mr. Isabelle:

Mr. Speaker, I should like to take this opportunity to call the attention of hon. members to a phenomenon developing in the country which, I greatly fear, will soon lead us to a situation from which there will be no turning back. I am referring to medical personnel, particularly the family doctor.

We all know of the difficulties experienced by our government in passing the medicare bill; as time goes by, we become even more conscious and proud of the responsibilities we took upon ourselves, when the four great principles were put forward by the right hon. Prime Minister (Mr. Pearson) in July, 1965.

[DOT] (8:50 p.m.)

Still, Mr. Speaker, although we have accepted those four basic principles, although everyone seems to agree that health is a fundamental right of every citizen, that governments must recognize it as an undeniable natural right, the right to mental and physical health, although governments say "We have that responsibility", it remains that such a

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The Budget-Mr. Isabelle right must not be handed over solely to medicine, that is doctors, medical associations and medical colleges across Canada.

Ministering medical care belongs exclusively to medicine, as well as the structures of internal control. But the fundamental rules bearing on the right of the individual to health, are strictly a government responsibility.

I can already hear voices clamouring against the word "government", especially in view of the tempestuous climate created by the interpretation of the constitution in matters of health.

The central government, for the protection of citizens across the country, has the right to impose the principle of stable balance and general protection to which its nationals are entitled, whatever the province in which they live. That is what the present government is seeking to do and must do.

The method of practical implementation of this principle is within the provincial jurisdiction to the same extent, 1 would say, as the equalization principle which in fact, enables rich provinces to take an indirect hand in the fulfilment of, and the economic assistance to the so-called have-not and less favoured provinces.

Such is the spirit that must prompt each of us. The problem, sir, is that, in my opinion, there will be a lack of family doctors in Canada. And here is why. We must agree that medical research in Canada can be increased considerably. Nobody can deny that. The present government has already made a commendable effort by earmarking $500 million to medical research. There has already been so much discussion on this matter that it is not necessary to come back to it. It was also dealt with sufficiently in this house. It is better to start off as we do and to be sure to progress, by a sustained increase, toward higher peaks.

Mr. Speaker, let me pay a tribute, here, to the scientist who is commended for his extraordinary qualities and his highest merits because of his essential necessity and his untiring devotion in a modern nation. I refer to the family doctor, the general practitioner.

Unfortunately, if modern society can praise the merits of this man who is disappearing and abandoning this type of medical practise he loved so much, we must now examine our consciences and repeat what Professor Pasteur Vallery-Radot, then co-president of the 23rd

DEBATES February 7, 1967

convention of French doctors, stated namely: "I have no hesitation in saying that, in its daily practice, medicine is erring. Why? Because it ignores the physician, the general practioner and is concerned only with the specalists."

We would have a lot to say in this regard but it is impossible for lack of time. We know that general practice is centred essentially on the family which is the basic unit of society. The family doctor is undoubtedly the best doctor in the country. He can look after the expectant mother, the children, the adults. He can treat people in his office, at the patient's place, the hospital, when it is necessary.

The family doctor should be really the medical practitioner and not only a switchman for the specialists. In that respect, I should like to quote the words written by one of my colleagues, Dr. Georges Desrosiers, in he Devoir of February 1962:

The public should be informed as to the role and value of the family doctor because a certain thinking has developed here, as everywhere else, which results in the fact that in some quarters, people only swear by the specialist who is consulted directly, and who often refers the patient later on to another specialist.

The role of the specialist would be namely that of a consultant. He would supplement the work of the family doctor when necessary. To allow the family doctor to play the part assigned to him, the general practice should be viewed as a special branch of medicine and we should take as much care to determine its standards and requirements as we did for the so-called specializations.

Unfortunately, although the medical associations throughout Canada are still praising to high heaven that courageous worker and saying how indispensable he is when it comes to dispensing medical care, in short in spite of all those bouquets, one cannot but feel that those are treacherous words and that the man whose talents are so highly esteemed -is doomed to oblivion.

Topic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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?

Some hon. Members:

Hear, hear.

Topic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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LIB

Joseph Gaston Isabelle

Liberal

Mr. Isabelle:

On November 30, 1965, some witnesses appearing before the Hall commission, stated that:

Two per cent of Canadians had to see their specialist each month and that, therefore, the greater part of medical care given to Canadians should be administered by general practitioners or family doctors.

However, other witnesses stated that:

Demand that general practitioners be given consideration by the profession as well as by hospital and government authorities.

February 7, 19G7

This, Mr. Speaker, means total reform, particularly with the advent of medicare, of the whole concept of medical associations and of all medical school structures, which are also outdated. These organizations have become encrusted in a dangerous but regular routine and have accumulated more dust than prestige over the years. They have become much like stagnant waters and are even now in need of purification. Their only significant accomplishment boils down to resolution passing committees, whose powers are whittled down from year to year.

In certain areas, a great gap has been created, or at least everything has been done to widen the gap already existing between family doctors and specialists. I wish to point out to hon. members that if we do not have enough medical practitioners, if Canada is in 22nd position, with respect to the relationship between medical practitioners and population, having only one doctor for 852 persons, it is not because of a lack of federal research grants. It is rather due to the confusion within the medical profession; this situation must be remedied in the near future, if we are to have more family doctors.

It is inconceivable that, in 1967, some hospitals should have general practitioners as active members of their medical boards and that these practitioners should not be allowed to vote in the medical departments when general decisions in which they are involved are taken.

It is inconceivable that, in 1967, the general practitioner who makes a house call and finds the patient dying or almost, should have to telephone the specialist on duty at the hospital to ask permission to hospitalize the patient. That is scandalous, Mr. Speaker.

Topic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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?

Some hon. Members:

Hear, hear.

Topic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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LIB

Joseph Gaston Isabelle

Liberal

Mr. Isabelle:

It is also incredible that in 1966 and even in 1967-and I am ashamed to say it-certain hospitals in Montreal should have gone so far as to build separate washrooms for general practitioners and specialists.

We should regain our senses and realize the nonsense of such fantastic figures. As a matter of fact, in the last few years, the number of specialists has increased by 43 per cent, whereas the number of general practitioners throughout Canada has only gone up by 39 per cent.

Mr. Speaker, this makes no sense at all; in this case, there are more chiefs than Indians.

The Budget-Mr. Isabelle Out of the 24,000 doctors in Canada at present, 2,880, that is 12 per cent, are interns, and 90 per cent of them are specializing or preparing for a career in industry. After the arguments I have just put forward, one could hardly think of improving the medical situation by creating such ridiculous situations as the one in which we find ourselves today.

Mr. Speaker, may I refer to an item published in the magazine College of Medical Practitioners of Canada of August 1966, and I quote:

[DOT] (9:00 p.m.)

Too long has the medical profession soft-pedaled the short supply of Canadian physicians. Too long has it concealed the urgent need for more family doctors from such groups of foreign physicians as those of the United Kingdom. Too long have Canadian doctors refused to come to grips with the excessive work load being carried by many of their members, and this load will be increased when universal health insurance is established.

Everyone knows or should know there is a shortage of physicians in Canada. This may not apply to a few of the specialties, but it is true generally and particularly of general practitioners or family doctors.

In an article published in Le Droit some time ago-

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LIB

Lucien Lamoureux (Speaker of the House of Commons)

Liberal

Mr. Speaker:

Order. I am quite hesitant to interrupt the hon. member in his flight of oratory and in the midst of such an interesting speech but I am wondering about the relationship that may exist between the speech he is making and the discussion on the supplementary budget now going on. There may be a very close connection between the two but it does not appear quite obvious to me.

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LIB

Joseph Gaston Isabelle

Liberal

Mr. Isabelle:

Mr. Speaker, I thank you for your remarks but I might point out that we are concerned with moneys that may be expended on research and somewhat imply the expenditures to be made to ensue a minimum guaranteed income. It is, Mr. Speaker, a problem related to the medical profession inasmuch as it may supply the care.

May I quote an editorial from the newspaper Le Droit entitled "The Family Doctor", relating to an article I read in a newspaper published by the College of General Practitioners of Canada:

There should have been a royal commission to tell the authorities concerned, that is the governments and the universities, that the general practitioner only-the good old family doctor-seems to be in a position to treat mankind as a whole.

February 7, 1967

The Budget-Mr. Pascoe

I will go further, Mr. Speaker. A few years ago, a prominent lecturer, Cardinal Paul-Emile Leger of Montreal, said at the University of Ottawa that the time has nearly come when a person calling on the doctor to have a particle of dust removed from his right eye, will be told: I am sorry but I am a left eye specialist.

I think the general practitioner is practically indispensable in rural areas, and far from useless in large towns where many heads of families with small incomes cannot afford the luxury of paying a specialist unless absolutely necessary.

Instead of making recommendations, I shall simply conclude by saying that more university centres with university hospitals should be built, without necessarily adding to the present number of medical schools. We should also make use of every available means, particularly electronics and television. Furthermore, medical associations and colleges of physicians across the country should be asked to put some order in their indescribable and legendary mess so that, in 1967, the general practitioner might be considered as qualified to practise general medicine everywhere, even at the hospital.

If those suggestions are accepted, Mr. Speaker, then everything else will follow: medical research will grow, the number of family doctors will increase, Canadians will be better taken care of, and more young people will enter medical practice in Canada.

We must put an end to the snobbery of medical education where most of the high-priests or heads of medical schools have embalmed themselves throughout Canada. Instead of fostering the progress of practical medical science, they have basked continually in the luke-warm routine of pompous and pious speeches which basically gratified only their pride to the detriment of general medicine, that is those who worked humbly and silently ministering the sick. The time has come to put an end to all this, to forget the old saying: "If you cannot become king, become a doctor."

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PC

James Ernest Pascoe

Progressive Conservative

Mr. J. E. Pascoe (Moose Jaw-Lake Centre):

Mr. Speaker, in this wide ranging debate I too might make a few remarks which are not directly connected to the budget, but which will be connected to the fiscal policy which comes under the jurisdiction of the minister. In this regard, while perhaps ranging a little wide, I am in the position of hon. members on

the other side, because very few of them have spoken directly on the budget. I think they might be in the position, as the saying is, of "damning with faint praise", because their silence on the budget, I would say, certainly has been very faint praise. Admittedly there is very little to praise in the budget. It could be described as a give and take budget. Actually it takes more than it gives. It imposes taxes to provide a graduated extra payment to some old age pensioners ranging from $1 a month to a maximum of $30 a month; at the same time it takes income away from many of the pensioners through income tax.

This budget, called the mini-budget, hits the pocketbook of our senior citizens in another way. It does this through the 12 per cent sales tax on drugs, which has been called a tax on illness. That description, in my opinion, is a very fitting one. Whom does it hit the hardest? The old age pensioner, our senior citizens who have helped to build this Canada we have today. I have a letter here from the Canadian Pharmaceutical Association. The Minister of Finance knows about this letter, because I understand he also has received a copy. I should like to quote very briefly from this letter, because I think it sets out very clearly the situation in respect of the 12 per cent tax on drugs:

[DOT] (9:10 p.m.)

During the past few years in particular, considerable public comment has been directed toward the cost of drugs. Since the early 1950's, our Canadian Pharmaceutical Association has repeatedly emphasized that the federal sales tax levy contributes significantly to the price of drug preparations. Only six specific drugs (not drug classes) are exempt from this tax.

In appearances before many committees and commissions having to do, in one way or another, with the provision of pharmaceutical services, our association has attempted to factually relate the dollars and cents effect of the federal sales tax on drugs. We have pointed out that the application of the eleven per cent tax-a highly improper tax on illness-cost the ill and diseased over $14 million in 1964. Now, with increased utilization of health-restoring pharmaceutical preparations, it can be assumed that the new twelve per cent levy, if not abolished immediately, will constitute at least a $16 million portion of their prescription drug dollars during 1967. Added to this will be the multi-million dollars effect on those drug preparations which the individual may purchase for purposes of self-medication.

That outlines the situation very clearly in relation to the mini-budget.

Many speakers have referred to housing or the lack thereof. I am pleased that the Minister of Labour (Mr. Nicholson), who is directly responsible for C.M.H.C, is now in the

February 7, 1967

house. We have heard a great deal about the serious housing situation in Toronto. This situation is also in existence in other major cities in Canada.

Recently a conference on housing was held in Regina. This conference was attended by the Minister of Labour. Actually this should have been headed a conference on the lack of housing because that was the subject under discussion. Also in attendance were the mayors of several cities, town officials, reeves and councillors. They all wanted information about how to obtain more housing loans.

An article which appeared in the Globe and Mail on January 5, 1967 was of particular interest to those who attended this conference at Regina. I should like to read briefly from this article which states:

Canada's housing program, both public and private, is a failure. Experts have different opinions on what to do about it. But almost all of them

public enterprisers, private enterprisers and middle-of-the-roaders-agree that the housing program has failed in the following ways:

Housing construction is falling behind the population increase. Fewer than 135,000 dwellings were started in 1966. H. W. Hignett, President of Central Mortgage and Housing Corp., said there should have been 150,000. He warned that 170,000 will be needed this year for new households, new Canadians and replacements for worn-out housing. Chances are that the number will be much less than that.

Housing is not being built fast enough to substantially reduce the backlog of slums and overcrowded dwellings.

There was a great deal of interest in that article at the Regina conference and it certainly sets forth the feelings of those people in attendance.

Let me now refer to some suggestions in this article regarding what can be done to relieve this housing shortage. It is suggested that the following should be done:

Create federal and provincial ministers of urban affairs and housing. Draw up a clear list of goals.

Launch industrialized mass-production housing at once, with standardization of parts and plans, but provision for variety to avoid monotonous ugliness.

Greatly step up production of public housing. Acknowledge that housing is a public utility. Mix income levels. Try to avoid ghettos for the poor.

There is one suggestion in this article which refers to something already being attempted near Ottawa. This is suggested to overcome the difficulties involved in crowded urban centres. The paragraph states:

Plan balanced satellite towns near metropolitan areas, to contain houses, apartments, stores, industries, ample playing space; schools, churches, community centres, social services; transit links with downtown.

23033-808J

The Budget-Mr. Pascoe

That may sound a bit far-fetched but it is something to be looked for in the future as a means of avoiding overcrowded city conditions.

The National Home Builders Association made certain suggestions to offset the mounting cost of home production, one of which was to exempt from sales tax, building materials on residential construction just as is done in the case of schools, universities and public libraries. That association also suggested as an incentive to home building the deduction from income tax of municipal taxes and of mortgage interest. It may not be feasible or practical to allow the entire amount to be deducted, but a deduction up to a certain limit would certainly be of assistance to home owners.

I should like to read one paragraph of this challenging program of the National Home Builders Association. It states:

Economists maintain that the industry should be increasing its production each year until it has reached a capacity of some 200,000 units per annum by the mid-70's. It is difficult to see the industry being able to gear itself to this production unless some method is found to assure a steady supply of mortgage funds.

At the Regina conference reference was made to a new method of apartment ownership. Under this arrangement apartment occupants actually own the building, pay taxes and operating costs. This type of project has been in existence for some time in Canadian cities, notably in Vancouver. Perhaps this would be the answer to the problems facing members of parliament who wish to obtain accommodation within a reasonable distance from the parliament buildings. I hope the Minister of Labour will give some consideration to this suggestion. It may well be that enough members are interested in such a project that an apartment block under this ownership arrangement could be constructed as a centennial project.

In a recent survey conducted by the publication "The Independent Businessmen" the following question was asked: Has tight money touched your business? The answer was: "Yes, 57 per cent; no, 39 per cent; no opinion, 4 per cent. This particular survey was taken last February but I believe the same answers would be given today, perhaps with the larger percentage in the "yes" column with regard to the effect of tight money on their business.

February 7, 1967

The Budget-Mr. Pascoe [DOT] (9:20 p.m.)

I have a letter here from two young people who displayed great initiative and self reliance in starting a poultry farm. They have written about their difficulties in obtaining financial help to expand their operations. I will not read the letter. I will just say that they were told by various people that both the federal and provincial governments were backing the poultry industry and therefore they attempted to find out just where and how such help could be obtained. However, they have not been able to find any government agency which would help them to expand their business. They have asked for any arrangement which could carry them through until July, when their new flock of chickens will be producing. They said they had ample markets for all they can supply, including a contract for 1,800 dozen eggs per month and another for 1,000 dozen eggs per week in June or July. They asked where they could get help.

I have suggested to these young people that they should contact a branch of the Industrial Development Bank. I believe that the I.D.B. can help them in financing this project, and if not I believe that there should be some changes made in the set-up to make this possible, because these young people are looking for help, they are ambitious and certainly have the background for operating this sort of enterprise.

There is another point which I should like to make, Mr. Speaker, and to which I should like to draw the attention of both the Minister of Finance and the Minister of National Revenue (Mr. Benson). It concerns the high valuation placed on farm land for estate tax assessment upon the death of the owner. I have taken up this question more than once with the Department of National Revenue.

Estate tax valuations of $125 to $150 an acre on farm land which was the deceased person's original homestead, or which may have been purchased by him a few years ago for $25 to $30 an acre, appears to be a capital gains tax. I do not believe the government has as yet adopted a policy for the imposition of a tax on capital gains. The valuation on farms for estate tax purposes appears to be very arbitrary and final.

These valuations do not always appear to be equitable. I have drawn to the attention of the Department of National Revenue three cases in a little over a year where the estate tax valuations on three farms in the same

area were set by the department at assessments ranging from $85 an acre to $125 an acre for what would be considered to be the same kind of land.

The particular point I want to emphasize in these estate tax valuations concerns the preservation of the family farm. Consider, for example, an 800-acre farm which has been built up by a farmer in the expectation that his son will carry on. In one case I have in mind the son is actually operating a farm owned by his father. The father has died. The estate tax valuation on the 800 acres is $125 an acre. This amounts to $100,000. The widow benefits by an exemption of $60,000 but the estate tax levy on the remaining $40,000 could well be such as to force the widow to sell the farm in order to pay the tax, thus removing the farm from family operation.

I suggest that the government should lighten this burden by lowering the estate tax valuation on farm land. I contend this should be done at least where a son or a daughter is taking over the land from the father. Such a policy is essential if family farms are to continue.

My main concern, as I have indicated, is with regard to these high estate tax valuations on farm land. Perhaps I should take this occasion to put on record suggestions from influential sources that the estate tax should be abolished. I am referring to an editorial which appeared in the Regina Leader Post of November 25, 1966 headed "Tax on Estates Should Go". I think this editorial will commend itself to the government because it was discussed at the provincial Liberal convention in Saskatchewan which expressed the opinion that the levy should be abolished. I will quote one paragraph from the editorial, which reads as follows:

Spokesmen for the farm interests gave strong support for the proposal. Eventually a resolution was passed which requested either the elimination of this tax, or a reduction in the size of the slice the state takes out of taxable estates.

Again I will draw the attention of the government to the fact that this was passed by the Liberal association at its convention in Saskatchewan.

In the same connection I wish to refer to the 1966-67 statement of policy announced by the Canadian Chamber of Commerce, which I believe is very influential and has the ear of the government. Rather than paraphrase what they said with regard to the estate tax I

February 7, 1967

should like to put on the record the verbatim text of their statement:

Among the criteria generally employed in evaluating a tax are its revenue producing character and its effects on the growth of the economy. A strong case can be made for the abolition of the estate tax on this basis.

As a source of revenue the estate tax was estimated to yield in the fiscal year ending March 31, 1966 only 1.4 per cent of total estimated federal budgetary revenue. The income tax, on the other hand, yields approximately 50 per cent of total revenue and the sales tax nearly 20 per cent. Of all the different types of federal taxes levied, the estate tax yields the least.

With regard to the effects of this tax on the economy, to the extent that it discourages the accumulation and retention of capital in Canada which would be available for equity investment, it has a depressing effect on the rate of economic growth. On the positive side, it is, today, clear that the repeal of this tax would be the greatest attraction to permanent equity capital that we could devise.

I should like to draw this to the attention of the Minister of Finance because essentially it is in accordance with what he preaches. It goes on to read:

With respect to incentives, the effect of the tax is difficult to determine but in various cases the tax obviously acts as a deterrent to saving, and through this, capital formation. It has undoubtedly encouraged estate planning and the development of increasingly sophisticated and successful devices to avoid both its impact and the onerousness of Its administration.

At a time when the federal government it trying in other ways to discourage the sale of Canadian business to foreign owners, the impact of this tax, particularly on small and medium sized business, is to force such sales in ever increasing numbers to the detriment of both Canadian ownership and our balance of payments.

The following is a recommendation of the chamber of commerce:

In view of the adverse effect of the estate tax on the economy, and the relatively small amount of revenue produced by this tax, it is recommended that the estate tax be abolished.

The following is an excerpt from a letter which I received from the editor of "The Independent Businessman".

Here's our latest issue. I hope you will be interested in our story on the front page telling how the anticipation of succession duties is preventing the expansion of one company.

It is unfortunate that a tax, which is unproductive, should prevent productivity.

I think these quotations certainly emphasize what I was trying to say.

[DOT] (9:30 p.m.)

I agree with earlier speakers that the minibudget was not necessary but was rushed in at the last minute because a budget had been

The Budget-Mr. Keays promised by the Minister of Finance. The 1 per cent increase in sales tax, from 11 per cent to 12 per cent, has raised the cost of living. The minister admitted this in his budget speech. The sales tax increase would not be necessary if the amendment before us were adopted. It is for this reason I support the amendment, Mr. Speaker.

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PC

James Russell Keays

Progressive Conservative

Mr. J. R. Keays (Gaspe):

Mr. Speaker, I could not feel the least bit antagonistic to the government at this time because a few minutes ago I saw the hon. lady member for Westmorland (Mrs. Rideout) sitting with the hon. member for Saint John-Albert (Mr. Bell). I know they were talking over the events of the last few days. I should like to tell the hon. lady, however, that I watched her on television a few nights and I thought she was doing a wonderful job for a lost cause. If they had more people like her, possibly the results would have been a little more favourable for her party.

However, all those who have participated in this debate brought about by the minibudget presented on December 19 have stressed the futility of this exercise, and I do not intend to pursue it any further. It would have been much better if we had had a statement from the minister dealing with our financial conditions. This would have given us an opportunity to assess the situation and bring forward suggestions for measures which could have been undertaken to assure the continued growth of our economy and to reappraise the measures which we now have for increasing productivity. These measures would have been assessed then in a positive way, instead of in the negative approach this government has taken since the budget of last spring to offset these elements in our economic life which have tended to strangle progress and development.

It would have been much better if the Minister of Finance had re-read his budget speech of last spring and removed some of the restraining measures which he applied to our economy and which, in his own words, would have been those which tended to have inflationary effects. The monetary situation has been getting worse, with tight money being the major cause of the lack of increased productivity. Certain taxes have tended to discourage increased production, and here I refer to the sales tax on building materials and production machinery. I believe the minister will admit that if positive measures had been taken, such as the removal of the sales

February 7, 1967

The Budget-Mr. Keays tax on building materials and the advancement by six months ot the removal of the tax on production machinery, many of our firms who have today curtailed their development programs would have gone ahead with their plans.

The minister knows quite well that a company with plans on the drawing board usually schedules its developments for execution in a definite period, and only those firms that have sufficient capital can go ahead with their plans. Others are being restrained and in many cases, as the minister will eventually find out, the curtailment of their plans will probably lead to a definite cancellation, thereby reducing their productive capacity.

In so far as the sales tax on building materials is concerned, it is quite evident that the removal of this tax would not have placed any additional burden on the manufacturers of these materials. We could have had a specific reduction in the price of these materials because of the ample supply and the ever increasing consumption of them. There was more at stake in this than simply a monetary measure, because this government has forgotten that the consumption of this material would have been in the formation of housing units which were a necessity to thousands of low income people in this country.

As most speakers have already mentioned, if positive measures had been taken to encourage the building of housing units we could have contributed to the elimination of suffering and delinquency. Moreover, such a step would have contributed in a positive way toward the construction of recreational facilities near the housing units, and the children of these low income families would have been able to fraternize and know each other better, thereby contributing to a will and a desire for a better life.

While I am on the subject of the 11 per cent sales tax on building materials, I believe it would be proper to discuss the discrimination which I believe exists now in the imposition of the sales tax on these building materials. A retailer pays the 11 per cent sales tax on building material based on the manufacturer's cost, but the same retailer selling lumber for the same purpose has to pay the 11 per cent sales tax on the retail price. Admittedly, it is not the retailer who suffers but rather the consumer. This has the additional effect of increasing the cost of housing in the way that I have already described as utter discrimination.

I wish the minister would take into account these questions which I am now raising and inform the house of his reasons for allowing the continuation of this situation. For my part, I cannot find any justification for this discrimination because I accept the principle that the taxation of these commodities should be on an equal basis, and that one product in a certain category should not carry a heavier charge than another. I intend to raise these questions again at some future time if answers are not forthcoming from the minister. In order to balance the economy it is necessary for the monetary and fiscal policy of the government to work hand in hand. I can see that the government has paid only lip service to this basic requirement.

[DOT] (9:40 p.m.)

On many occasions the government has suggested that it will be necessary to curtail its own spending on capital projects. Mention has been made of the cancellation of an expenditure of roughly $100 million by the Department of Public Works. I shall be very interested to see, when the details of the estimates appear, which expenditures have been curtailed by the department. I notice the Minister of Public Works (Mr. Mcllraith) is taking quite an interest in my remarks, and I know he has the welfare of all Canadians at heart. I wonder whether he has had much to do with any curtailment or reinstatement of expenditures in his department.

It is wonderful to be able to plan construction and to develop a national capital, Mr. Speaker, but was it not premature to begin construction of the centennial arts centre without first knowing its fabulous cost? Other statements have been made recently in connection with the construction of other buildings in the national capital zone, and although I would be the first to suggest that these buildings are needed by the administration, I doubt whether it is necessary to undertake them at a time when the government believes that curtailment is still required in order to defeat inflationary pressures. It seems to me that the government's statements in this regard are contradictory. Perhaps they prefer to remain blind to the proper means for eliminating these inflationary pressures on the economy.

Notwithstanding statements which we have heard in this house, Mr. Speaker, the economy of this country is not as buoyant as we have been led to believe. Looking ahead a few months to the completion of many major

February 7, 1967

projects in Canada we can well ask ourselves where our people are going to find employment. Signs are already evident that the pace of the economy is slowing down. It is time for the minister to reassess the situation and perhaps consider the disbursement of the refundable tax collected under the terms of our last regular budget.

The elimination of the sales tax on building materials, as I have already said, would accelerate to some extent the construction of homes so badly needed in this country. With the backlog that is now evident and with the normal requirements of the year, the government has a tremendous task on its hands to encourage private industry to invest its money in the mortgage market and to get small investors to reactivate their capital.

When we consider, Mr. Speaker, that billions of dollars in savings accounts across the country could be used to greater advantage both to depositors and to the economy, I fail to understand why a program of information cannot be undertaken to tell these depositors of the advantages of investment in the housing field. Far be it for me to say that some of this money is not being used to advantage by the banks for lending purposes, but there is still room to encourage a substantial amount of these deposits to be used to the benefit both of investors and the general economy.

The government seems fearful of inflationary pressures, Mr. Speaker, yet it is contributing to the prolongation of the period of inflation every day that it fails to take steps to correct the housing problem. It is evident that if we are called upon to perform in 12 months what should normally take 30 months we are going to put some additional burdens on our manufacturers, on machinery and on the labour required for our housing construction plants. In this way we will have too many people chasing too few materials and too little labour, thereby causing inflationary pressures on the economy.

The increase of 1 per cent in the general sales tax has also had the effect of increasing the cost of goods at a time when we should be concerned with the problem of reducing costs. The additional amount of $120 which the government is going to extract from the taxpayers is again threatening to kill the chef that serves the main course.

Private enterprise and initiative has been the cornerstone upon which this country has been built and has prospered. It is time that we began to ask ourselves if we have not

The Budget-Mr. Keays reached saturation point in the matter of taxation of the individual and of the corporation. What initiative is there for progress, for increased productivity and for the welfare of employees when systematically in every budget we seem to wish to take a little more from the corporations?

It is true, Mr. Speaker, that government expenditure has to be met by taxation. So has the cost of social measures. But do we have to do everything within a given period? Is some planning not possible whereby some public capital expenditure is delayed or spread over a longer period, thus giving a chance to industry to have a few years respite from extra taxation in order that it may make a larger contribution to the development and advancement of our country? Spending at all levels of government is such that every Canadian is being taxed way beyond his means to pay. Also the period for which we are mortgaging our revenue is getting way beyond any rational planning, e (9:50 p.m.)

The very first day of confederation was founded on the wish and will of every father to embark on a pilgrimage, to erect a solid basis for our future. That was private enterprise. Let us not now falter and embark on a system destined to bring misery, unconcern, and evil to this way that has brought us through the first hundred years.

There is room for improvement. Let us improve this system. Let us rededicate ourselves to the vow, to the initiative, which will reward our personal wishes, which will be to the welfare of our country and will be to the benefit of the path we all pursue.

Private enterprise needs encouragement; corporation taxes need to be eased. We always look to corporations to fill the gap when we need taxes. These words I feel are noteworthy, and I feel depict the argument I have tried to advance.

Corporate profits as a whole clearly have not gone ahead of economic growth. They have lagged, if anything; they have not kept pace with the increase in labour income. Manufacturing profits lagged appreciably last year, the most profitable year in our history. Those profits trailed, reflecting the intensified cost price squeeze that has become more acute than ever. This has not stopped Ottawa from taxing profits more heavily in 1965 than in 1956. The investment of manufacturing industries in new plant and machinery has risen more rapidly than its profits have risen. In

February 7, 1967

The Budget-Mr. Prittie 1965, as in 1956, total outlays came near to equalling industrial profits before taxes. Those investments are nearly double the profits, after taxes. Some of this investment represents newly raised capital, financed out of retained earnings. In other words, it is that part of profits not distibuted to shareholders as dividends.

There is no question that corporate profits in this country at this moment are reasonable, and that the shareholder has a right to share in this income. Let us be aware of overtaxing corporations, because in taxing private industry we tax the individual who contributes to the capital needed by corporations, needed for the development of industry, for the increase of productivity, and to offset the cost of living. The investments of the individual make our corporations competitive and satisfying.

I have but one wish. I wish that the government would become more realistic and see in the amendment moved by the hon. member for Perth (Mr. Monteith) the warning signal that a new look must be taken at the government's policies. We must implement measures while will encourage industry, not discourage it; which will activate, not slacken and which will incite and not weaken the will of the individuals who are the pillars on which rests our future.

Topic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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NDP

Robert William Prittie

New Democratic Party

Mr. R. W. Prittie (Burnaby-Richmond):

Mr. Speaker, my speech in this debate will be as relevant as the rest have been. It will have something to do with the budget, something to do with estimates and a great deal to do with government finance. I do not have much time this evening, and I will simply introduce the aspect of the subject I want to deal with, the federal government's role in the financing of universities, and research in Canada.

When the estimates are presented to us soon for the next fiscal year, the large amount for university grants, included in last year's estimates, will be removed. In that regard I think this government has made a regrettable decision.

Hon. members will recall that on October 31 last the Minister of Finance speaking for the Prime Minister-this was just following the tax-sharing agreement conference with the provincial premiers-announced the federal government's intentions concerning university grants, technical and vocational education, and adult education. He announced that the federal government was getting out of the field of university financing; that it would transfer four points of personal income tax and one point of corporation income tax

[Mr. Keays.l

to the provinces, and let them do the job the government had done before.

The same thing held true for vocational and technical education. At the same time there was staked out a field in adult education, which was defined. I am glad to see the hon. member for Sherbrooke (Mr. Allard) is here this evening. He is interested in the question of education and the federal government's role in it. I hope he will be here tomorrow when we continue.

May I call it ten o'clock.

Topic:   ADDITIONAL FINANCIAL MEASURES OF THE MINISTER OF FINANCE
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PROCEEDINGS ON ADJOURNMENT MOTION


A motion to adjourn the house under provisional standing order 39A deemed to have been moved.


EXTERNAL AFFAIRS-VIET NAM-REQUEST BAN ON ARMS SHIPMENTS TO U.S.

IND

Maurice Allard

Independent Progressive Conservative

Mr. Maurice Allard (Sherbrooke):

Mr. Speaker, on January 18 last, in this house, I stood for discussion on an adjournment motion the following question, and I quote:

Since our sales of arms to the United States seem to have increased by 82 per cent in 1966, is it not the government's intention to ask for some changes in the Canada-U.S. defence production sharing agreements, so that our claims for peace in Viet Nam would not be merely rhetorical and our participation in the International Control Commission would be more consistent and effective?

According to recent statistics, in 1966, the United States has placed orders totalling $300 million for arms to be manufactured in Canada, while Canada has placed orders for an equal amount of U.S.-made arms.

The increase in United States purchases in Canada is explained by the Viet Nam war. A good part of the expenses is for aircraft, electronic equipment and explosives.

Such exchanges of arms and of manufacturing originate from a 1959 Canada-U.S. agreement on armament. From then to last September, the United States spent $1,430 million in Canada, as compared to $1,230 million agreed to by Canada.

What are the implications of such military transactions between the two countries on Canada's military and diplomatic policy?

Facts show two things. First of all, our ties with the United States are sweeping us in the wake of American policy, on the military,

February 7, 1967 COMMONS

diplomatic and economic fields. Second, our diplomatic policy does not always reflect our military policy and our economic interests.

On the diplomatic front, at the international level, Canada is seen as the promoter of peace. It often offers itself as a mediator. It makes many efforts, secretly and publicly, toward a peaceful settlement of the war in Viet Nam. Together with India and Poland, Canada is a member of the International Control Commission in Viet Nam. Within international organizations, Canadian representatives condemn war, deprecate poverty in all forms and advocate aid to underdeveloped countries.

Those are surely fine gestures, Mr. Speaker; but, on the other hand, we let the United States use Canadian made weapons in Viet Nam. Such an illogical action might embarrass us greatly and reduce, on the international level, our influence and our role as peacemaker.

Of course, we are bound to the United States by defence sharing agreements. But such an exchange of arms should be used exclusively for the common defence of the North American territory and our other joint undertakings under NATO and the United Nations. We should not get mixed up in this way with military and diplomatic objectives of the United States which are strictly their own.

That is why we should know from the Secretary of State for External Affairs (Mr. Martin) whether, on account of the presence of Canadian arms in Viet Nam, the letter or the spirit of the 1959 agreements between Canada and the United States have been violated. Otherwise, the Canadian government should ask for a proper review of those agreements right now so that our position does not appear so contradictory and controversial to Viet Nam.

Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   EXTERNAL AFFAIRS-VIET NAM-REQUEST BAN ON ARMS SHIPMENTS TO U.S.
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LIB

Donald Stovel Macdonald (Parliamentary Secretary to the Secretary of State for External Affairs)

Liberal

Mr. D. S. Macdonald (Parliamentary Secretary to Secretary of Stale for External Affairs):

Mr. Speaker, the first observation that I think should be made about the question asked by the hon. member is that the facts cited by him in his question were refuted in the answer given to a question placed on the order paper. That answer is to be found at page 12520 of Hansard.

The basic issue involved in this question is not limited, as I am sure the hon. member would like to limit it, to what is the balance sheet of operations between Canada and the

Proceedings on Adjournment Motion United States with regard to Viet Nam; rather it extends to the total of relationships between Canada and the United States in the entire context of the western alliance.

That alliance was formulated many years before the present involvement of the United States in Viet Nam. It is the hope of this government, and I would hope of the hon. gentleman also, that this alliance will continue unimpaired after the present hostilities in Viet Nam have been brought to a peaceful conclusion. Let me interpolate at this point that every diplomatic effort on the part of the government of Canada has been pressed toward a peaceful conclusion of these hostilities.

What is really involved in this suggestion is whether Canada should, for the reasons cited by the hon. member, throw over or risk throwing over the efficacy of the NATO alliance. The suggestion made by the hon. member that the government should take this action is not a new one. It has been made by a number of thoughtful Canadians who are concerned about the current conflict in Viet Nam. Only recently a group of university professors made representations to the government about this matter and some of their representatives had the opportunity of discussing it with the Prime Minister (Mr. Pearson) and the Secretary of State for External Affairs (Mr. Martin).

The Prime Minister explained to these representatives that the government, while it understood and had sympathy with their concern about the war in Viet Nam and their desire to bring it to an end, could not agree with the request that Canada impose a ban on arms shipments to the United States until the end of that conflict. You will recall, Mr. Speaker, that the Prime Minister referred to these matters in the house on January 19, and in his statement he made it very clear that the export of arms and defence equipment to the United States is covered by our defence production sharing agreement with that country, and that it is not the government's policy to stop the export of defence equipment to our NATO allies.

No commercial exports of any kind from Canada to the United States have been prevented by government action, in accordance with long-standing practice, and I suggest that reflects the principle of the open border with respect to export controls between our two countries, so that no licences are required for the export of any Canadian goods to the United States.

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Proceedings on Adjournment Motion

May I point out in conclusion that there have been no direct shipments of armaments of any kind to Viet Nam from Canada.

Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   EXTERNAL AFFAIRS-VIET NAM-REQUEST BAN ON ARMS SHIPMENTS TO U.S.
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LIB

Auguste Choquette

Liberal

Mr. Auguste Choquette (Lolbiniere):

Mr. Speaker, I thank the hon. member for Bonaventure (Mr. Bechard) for being kind enough to stay a little later than usual, even though some friends from his riding have come to see him about the return to Gaspe of La Grande Hermine. I appreciate the gesture of the hon. member to whom I am putting my question, and I ask him to kindly submit it to the minister concerned.

Mr. Speaker, Mr. Jean Pouliot, of the Canadian Association of Broadcasters, recently submitted a brief to the parliamentary committee on broadcasting on behalf of the organization of which he was the spokesman.

Among the interesting suggestions made by Mr. Pouliot, some dealt with possible amendments to the Broadcasting Act which, as is well known, is old and obsolete and contains undescribable anachronisms. Such anachronisms occur particularly in sections 17 and 18 of the act concerning political broadcasts.

It is a known fact, Mr. Speaker, that private stations, particularly private television stations, are hesitant to carry such programs because, according to many, political broadcasts lack animation and colour. They are likely to reduce the number of viewers, or "ratings" as we say in French. Thus, very little sympathy is shown for political broadcasts, for which the broadcasters must not be blamed.

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

This is partially explained because the act is not too good. Clearly, it is an old act that has not been brought up to date for years. And while dramatization is mentioned, there is no definition of dramatization. The word is simply there, without its meaning being specified. As a result, the private stations are concerned about dramatization and will not grant political broadcasts any latitude, a latitude that would enable them to become much more interesting and to reach the public much more easily.

The first suggestion I make to the minister, through his parliamentary secretary, is that the term "dramatization" should be clearly and well defined so that we know once and for all what that means, and in what framework

DEBATES February 7, 1967

a political program may be presented. Private television stations have a much higher rating than C.B.C. channel 4, in Quebec city, as well as channel 10 in Montreal have certainly more viewers than the C.B.C. Then-

Topic:   PROCEEDINGS ON ADJOURNMENT MOTION
Subtopic:   EXTERNAL AFFAIRS-VIET NAM-REQUEST BAN ON ARMS SHIPMENTS TO U.S.
Sub-subtopic:   BROADCASTING-REQUEST FOR REVISION OF POLITICAL BROADCAST REGULATIONS
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February 7, 1967