Mr. Terence Nugent (Edmonton-Strathcona):

Mr. Speaker, I am very happy to take part in this debate. I must say I am glad I did not have to speak on Friday afternoon. The leader of our party did such a tremendous job that I would have found it very difficult to follow him at that time. Perhaps I am exaggerating when I say it was one of the finest performances I have seen in the house because there was a very bad performance to contrast it with which perhaps made it look better than it really was. The whipping that the Leader of the Opposition (Mr. Stanfield) gave the Prime Minister (Mr. Pearson) on Friday had to be seen and heard to be believed. I suppose it is only to be expected that one's job is a little easier when one has a good case. Certainly the Prime Minister had a very tough job trying to put forward what can only be described, even by his friends, as a very bad case presented with his usual mixture of arrogance and evasion.

On coming into the house this afternoon I heard a story connected with the old familiar cry of trickery or that the government was beaten by a fluke. It goes something like this, Mr. Speaker: The Leader of the Opposition was unfair in his battle tactics; the Prime Minister knew he was going to have a battle but he did not realize that the Leader of the Opposition was going to use that most suitable of parliamentary weapons, the sword of truth. This was considered unfair tactics because the Prime Minister is a complete stranger to that weapon and therefore felt that he was going into battle unarmed.

I understand the Prime Minister thinks it is only fair that the decision should be based on the best two out of three. Rather than trying

Motion Respecting House Vote to settle the matter all by himself he is waiting until one of his champions in the leadership race takes over the battle. As I understand it this is going to be much delayed, because there seems to be a dearth of members on that side who have any familiarity with the weapon of truth. On occasion we in this house are accustomed to observing people who have a little difficulty in getting close to the truth. Some seem to And the idea repugnant and others just cannot find the idea.

There are times, Mr. Speaker, when some of us have to bend the truth a little. For example, the other day the hon. member for Northumberland (Mr. Hees), when replying to a question from the Secretary of State (Miss LaMarsh), proved that he sometimes has to bend the truth to remain a gentleman. I wish we could find such an honourable excuse for the Prime Minister.

I thought the most remarkable thing about the speech of the Prime Minister was the way he set out the case for the government by first stating what he said we had alleged our position to be. Since the easiest case to beat down is not the real position of your opponent but the position that you wish he would take, the Prime Minister began by misstating the position of the opposition. Reference to what the Prime Minister said, as found in Hansard, and to what the leader of our party said indicates that there is no basis for the Prime Minister's allegations.

Since the Prime Minister has misstated our position, Mr. Speaker, as a lawyer I ask myself why. When juries all over the world hear cases in court and listen to witnesses they soon find that one of the surest guides to which party is to be believed or to which piece of evidence is to be considered reliable is to determine who it is who uses the truth as much as possible. Whenever somebody makes a misstatement or a misquotation or distorts the facts, then automatically it is assumed that the truth is not going to help their case. In this particular situation the Prime Minister did not put forward the truth when talking about the position we had taken. Neither did he give us the whole truth when he quoted and referred to the authorities and to what the true position is. I think his argument that the vote was a snap vote, a trick and so on was very well dealt with by my leader.

I have been a member of this house for about ten years, and I think I can say that the course of business is pretty well set out.

February 26, 1968

Certainly I see nothing unusual in the manner in which the bill was brought on last week. The bill had been debated in the normal course of events. The government had announced when it would be taken up. The bill was debated on Thursday, February 15, but was not taken up on the Friday by agreement because the minister was going to be away. All members were aware that it would be taken up again on the Monday. Things followed their usual course on the Monday with resistance to the bill always present, stiffening all the time. Finally the formal vote was taken in the evening and the government was defeated.

I believe that the position the Prime Minister set out should be put on the record. I think I should illustrate exactly the sort of tactics used by the Prime Minister so we can examine just how much faith the Prime Minister has in his own arguments. I say this because I hope to show it is sheer presumption on the part of the Prime Minister to ask anybody to support the position of the government. As reported on page 6922 of Hansard for Friday last the Prime Minister said:

They claimed-

He was speaking of the opposition.

-and I am not quarrelling with their claim; I am putting their position-that parliament could do nothing until the government resigned or there was a dissolution, except perhaps to discuss opposition criticism of the Prime Minister.

The situation, Mr. Speaker, is simply this. No one made any such allegation. No one with knowledge of parliamentary procedure would argue that those were the only two possibilities. I think this is the nub of the difficulty, and it is where I have trouble understanding the position of those who would support the government in their present course of conduct. The bill in question was taken up in the normal way. It has always been my understanding during my ten years here that a vote on an important money bill is automatically a vote of confidence. Bills which the government lays stress on because they are important to its program are always matters of confidence. From time to time minor bills which are not essential to the government's program are defeated, and such a defeat is not considered a matter of confidence. The importance of bills varies and sometimes it is difficult to know whether a bill is or is not a matter of confidence. Nevertheless, a reliable guide is to look at what has been done with respect to matters of confidence in the past.

February 26, 1968

[DOT] (5:30 p.m.)

We all know that a bill that is important to the government becomes a matter of confidence. That the passing of such a bill implies confidence is understood by the government and opposition alike. That has always been understood in regard to bills such as the one that was defeated last Monday night. That defeat implied lack of confidence. The Prime Minister misstated the position of the government and misrepresented what happened, since he tried to establish an entirely new basis under which our parliament ought to operate.

The hon. member for York East (Mr. Otto) said that the country is not ready for an election and that no election ought to be called. The Prime Minister, to give the nub of his argument, said that the outcome of the vote will determine if there shall be an election. I submit that our constitution, as we understand it, says that on the defeat of a government the Governor General may call on someone other than the Prime Minister to form a government if the defeated Prime Minister asks him to do so. If the new government fails to pass the test of its first vote of confidence the Prime Minister may not have the right to call an election, but there is no doubt that he has that right after he has passed his first test. Only the Prime Minister is entitled to advise His Excellency that there shall be an election, or the Prime Minister can advise, and I think His Excellency is bound to follow such advice, that someone else should head that government which has been defeated, or the Prime Minister can recommend that someone else head a government.

There is no doubt that this government has to resign, but for the Prime Minister to suggest that the resignation of his government would mean an automatic election is to distort the truth and to hide the facts. He tried to mislead certain members of the house into a panic vote to support his government. He did not tell them squarely that failure to support his government would not necessarily lead to an election. As I say, the Prime Minister can resign and call an election, or he can resign and recommend to His Excellency that someone else, one of his cabinet ministers or someone he likes, head the government. On that recommendation His Excellency would appoint a Prime Minister who could form a government and ask this house for a vote of confidence. If he got it he could carry on.

Another solution might be for the Prime Minister to prorogue the session. But the

Motion Respecting House Vote Prime Minister has said: "No, we will have a vote of confidence; we will disregard the constitutional rights by which we have been governed and we will disregard what constitutes a vote of confidence. We will do the most violence that has been done to parliament in Canadian constitutional history, and all because I do not wish to resign." We are not being asked to consider this motion so as to avoid an election, as the Prime Minister says; we are doing this because the Prime Minister does not want to resign.

Many members have already demonstrated their concern about having an election. Having considered the grave step and heavy responsibility of fighting an election and having been told that the alternative to supporting the government is an election, some of them feel that they must go along with the government. But the alternative is simpler than that. The Prime Minister has already announced his retirement and his party is arranging for a leadership contest. It is not a case, therefore, of whether the Prime Minister remains in office with his administration but simply whether he goes a little earlier than he had originally anticipated. Looked at in that way the question becomes different.

The hon. member for York East says that he sees some ray of hope in the government's legislative program of the last three or four months and because he sees that ray of hope he thinks we ought not to fight an election. If the hon. member and some of his colleagues fear an election, as I suspect, they ought to remember that other alternatives remain open. The Prime Minister could resign a little earlier and one of his colleagues could take over and form a new administration. He could even start a new session almost at once, introduce his own taxation bill or a similar one and then prorogue. That solution is within the government's reach and it gives us an alternative to an election.

The Prime Minister argues that a vote of confidence is only a vote of confidence when the government says it is. He made the blanket assertion that the government decides when there is to be a vote of confidence. Actually he is saying that the government chooses what issues it deems to be issues of confidence. By asserting that an important money matter is not a matter of confidence he is saying in so many words that questions of confidence shall be chosen at the whim of the government, the consideration being whether the government can win the vote. That is what it amounts to and that is what he reduces it to.

February 26, 1968

Motion Respecting House Vote

By refusing to acknowledge its defeat on an important money bill the government makes it appear as if confidence has nothing to do with the importance of the matter being voted on. It asserts that a vote of confidence shall be taken only when the government considers it can win that vote. Also, the government can decide after the vote has been taken whether it was a vote of confidence.

[DOT] (5:40 p.m.)

This is the ridiculous extent to which the Prime Minister is asking parliament to go. This is what the Prime Minister is asking his supporters to do to parliament in order to keep him at the reins for just a little longer. The question now is not simply whether we intend to vote confidence in the government or face an election. The present course, if followed, will make a mockery of parliament and responsible government. In effect we shall be saying to the government: You can do what you like when you like and the only test of confidence will be whenever you say that a matter is to be a test of confidence.

If hon. members suggest I am going too far, let them read the Prime Minister's words as they are reported on page 6922 of Hansard in the second paragraph of the right hand column:

We do agree, however, that the defeat on third reading of the income tax bill, while not involving automatic and obligatory resignation or dissolution, does put the issue of confidence into question and that this should be cleared up.

What he is saying is that it is not the nature of the bill which puts the issue of confidence into question. The Prime Minister tells us it is the defeat of the government which brings the matter of confidence into question. His suggestion that defeat on an important measures alone brings up the question of confidence is a simple answer to the question: What does the Prime Minister mean by a test which the government alone would apply? There is a method by which it should reach this decision. In the course of this debate a number of quotations have been put on record, some of them by the Prime Minister. I wish to illustrate the extent of the dishonesty, the deceit, which is being practised on this house by the Prime Minister in his desperate bid to hang on to office for another couple of weeks. As reported on page 6924 the Prime Minister quoted Dr. Eugene Forsey:

There are certain habits of thought or feeling which we will have to change.

The first is that any government defeat in the House of Commons necessarily means either the government's resignation or a fresh election. This is not so.

No one on this side has ever suggested it was so. Farther on the right hon. gentleman quoted the following:

We shall certainly have to get rid of the notion that every defeat in the house means a fresh election.

At the risk of being repetitive but for the sake of emphasis I wish to sum up the situation in the house today as I see it. For years and years every important money measure has been understood to involve a question of confidence. One only had to look at the faces of the ministers opposite on Monday last to realize they knew the government had been defeated on a measure which brought the question of confidence into play. Other major measures are usually regarded as matters of confidence, though there are some which are not. This is the way in which parliament has worked, the way in which we have maintained responsible government.

These are not inconsequential matters. Not only parliament and our system of government depend on our maintaining this practice. The party system as we know it in this country has developed and is sustained because of this tradition. Every party, when campaigning, sets out the major planks in its platform. The ordinary voter has only these promises or intentions to consider when trying to distinguish between one party and another. When making up his mind whether a party should continue to be given a mandate or replaced, the question foremost in his mind is whether or not the objectives which were so stressed during the campaign have been carried out in legislation. I suggest it would be the ruin of the party system as we know it today if an issue upon which the confidence of the people had been won at the hustings were to be regarded later in parliament as one on which the question of confidence did not arise. How could such a system ever work? How could anyone think that the voters would ever tolerate it? Having made an issue the basis of their confidence, what would be their reaction to a government which said: We shall decide what is to be a matter of confidence; we shall sustain ourselves in office no matter what you may have thought when you voted us in and the test in parliament shall be on whatever basis we choose?

February 26, 1968

We are asked to put parliament in this ridiculous situation by a Prime Minister who is about to leave, whose time is limited, but who declines to do the honourable thing and depart a little earlier than he had intended. Apparently he has persuaded his followers to support him in this course of action. I hope that some of them will reconsider. The alternative is simple. The Prime Minister could appoint any one of a number of his cabinet members to be a caretaker prime minister.

I am enough of a politician to understand the reluctance to appoint a minister who is in the running for the party leadership. The Prime Minister might fear that with the reins of power once in that minister's hands he could not be dislodged, and perhaps it would not be the most advisable way for a new prime minister to start off with several cabinet ministers feeling they had been stabbed in the back. But there is nothing wrong with the Prime Minister asking the Governor General to appoint someone who has no ambitions to become prime minister but who would undertake the task in a neutral way for the time being. In fact, sir, the task would not have to be carried out very long. I submit that if the government would use some common sense, if the Prime Minister would be honest with his party and with the house and if the party would become responsible to parliament, with its members doing their duty as members of the house to maintain the house's traditions and the constitution, they would find this house very co-operative.

[DOT] (5:50 p.m.)

A caretaker prime minister would in effect create a new administration, and there is no doubt about a new administration having the right to bring its legislation before us. This ridiculous motion that the house is now considering should be put away, and the new prime minister could bring in such legislation as he wanted. He could prorogue or recess and would be in a wonderful position to ask for supply. I submit that if hon. members opposite, and the Prime Minister especially, are at all honest in their arguments that this is no time for an election, if they really feel that in this troubled financial period there should be a government at the helm able to get the co-operation of parliament, able to put through those measures necessary to bring about stability and confidence in our currency, then the solution is very simple.

Motion Respecting House Vote

I have heard it suggested by some that Dr. Forsey says that once defeated a prime minister does not have the right to go to the Governor General and recommend someone else. Of course that argument is based on the contention that once defeated on a motion of confidence a prime minister does not have that right. That is the argument that is put forward. I say that anyone who is going to use that argument against me is simply saying that this motion must be defeated. If the government is defeated on a motion of confidence the matter is finished and the government must resign if that argument holds true. Actually, however, I do not believe that Dr. Forsey goes that far, and I do not believe there is anything in our constitutional practice to support that argument.

It has always been understood that the one thing a prime minister must have to claim to be prime minister is the backing of the majority of the members of parliament. He is appointed on the basis that he claims to have that backing. He becomes the official adviser on proof that he has won a vote of confidence. From that time on he is the official and only adviser to the Governor General, and if in the case of defeat in the house he is able to advise the Governor General that someone else can form an administration and get the backing of the house, then the Governor General is bound to give that other person a try.

The Prime Minister has suggested that the only alternative to an election is to call upon the Leader of the Opposition. Of course this is something that could be done as well. But I submit that the Governor General would only call upon the Leader of the Opposition at the request or suggestion of the Prime Minister and then the Governor General would ask whether or not his new choice as prime minister thought he could control the majority of votes in the house. All such appointments really are temporary until such time as confidence is voted.

It is nearly six o'clock, Mr. Speaker, and I am going to repeat once more, and once more only, that the situation here is not as portrayed by the Prime Minister. It is not a case of resignation followed by an election, or appointment of the Leader of the Opposition.

I say that the Prime Minister can resign and ask the Governor General to appoint someone else in his own party to form a government. If he did that then a caretaker government such as I am suggesting would hold office until the Liberal convention is over. Or the Prime Minister could prorogue the session. In

Motion Respecting House Vote fact, he could do a combination of these two things. He could get a caretaker prime minister who could prorogue this session, start another one immediately or whenever he wished, and exactly the same tax bill could be reintroduced in the new session because that bill is only barred from consideration this session. The new administration would have a free hand and would have a much better chance of co-operation. I want to tell the house frankly there will be no co-operation with this government. If we reach a vote on this motion and the government wins, it will be the most hollow vote of confidence parliament has ever seen.

Hear, hear.

Mr. Nugent:

There will be no co-operation because any prime minister who would demand such unswerving loyalty of his backbenchers that they would betray their duty to this house to uphold responsible government in favour of making such a mockery of it in order that the Prime Minister shall not be embarrassed by leaving a little earlier than he intended is going so far and is delivering such an insult to this house and to the nation that I do not think anyone in the house would consider his action favourably. Hon. members should consider the aftermath if this motion carries. May I call it six o'clock, Mr. Speaker?

Mr. Speaker:

Order, please. It being six o'clock I do now leave the chair.

At six o'clock the house took recess.

Mr. Nugent:

Mr. Speaker, before supper I had outlined what I thought to be some of the considerations before us on the motion the government asks us to accept. Perhaps in the few minutes left at my disposal I should review those considerations, particularly those in respect of what we will be doing by accepting this motion.

It has been our custom in this house and in the British parliamentary system that all important money bills be considered as confidence motions. This has formed the real basis of control by parliament over the executive. This has been the custom, the usage and the

DEBATES February 26, 1968

practice of the parliamentary system, and it has never been questioned in this house during the time I have been here, or during the time some of my colleagues have been here, which is much longer.

In the past all major matters, including money matters, have been accepted as matters of confidence, whether so designated or not. Had they not been, under present circumstances our present political party system would be impossible. Parties take their stand on this basis, which makes it possible for voters to decide whether candidates of various parties have performed their campaign promises, and gives them an opportunity to do something about it in the future, if they have not.

On the basis of what the Prime Minister has said, that the defeat last Monday night on this money bill did not bring on a question of confidence, we dare not overlook the significance of his attitude toward what we should do in the future. He did not say the money bill was a matter of confidence-and this has always been recognized-but he did say that the defeat of that bill did not involve any question of confidence. He suggests that the only time there shall be a question of confidence on which the government's life is at stake is when the government says so.

Under these circumstances we would be faced with a situation wherein important matters such as money bills would not be recognized ipso facto as confidence matters. If the importance of a matter is not the criterion as to whether a question of confidence is involved, and if the decision as to whether the government survives or falls relates only to a declaration on the part of the government then according to the Prime Minister, the only way for a government to make sure it will survive a confidence motion is to declare the motion as a confidence motion after it has survived the vote. I suggest the Prime Minister's words, his actions in presenting this motion, and the entire course of the government's conduct up to this tune have indicated exactly what I have suggested.

What is at stake here in this house is whether or not we shall have any realistic control over the executive. We do not need to think back far to remember the days of Hitler and the minor amendments he brought in to make sure the government had the power it needed, with the result that the Reichstag became powerless.

February 26, 1968

By accepting this motion we are setting a precedent. We are accepting the suggestion that the executive has complete control, that we shall not be able even to question that control unless the executive says so, and that the executive will say so only after it has survived a vote of confidence. I have a good many friends on the opposite side of the house who are honourable gentlemen. I hope they will point out the fallacy of my argument, if there is one. While I differ with many of those gentlemen opposite, I cannot believe that, understanding all the implications, they will support this position. The alternative is not an election now, but a decision as to whether the Prime Minister shall be asked to leave a little earlier than intended. I was asked by one of those hon. gentlemen whether we did not intend to allow the Prime Minister to leave with honour and dignity. In reply to the suggestion that by leaving a little sooner he must do so without honour and dignity, I can only ask how anyone, as the leader of a responsible government could leave with honour and dignity after having perpetrated this sort of thing on this house.

Mr. Henri Laiulippe (Compton-Fronienac):

Mr. Speaker, I am glad to have the honour of saying a few words about the present situation and especially on the motion before the house.

All members have had the opportunity to express their views on this motion. During my few remarks on this subject, I should like to explain the reasons for political and parliamentary tumbles which point to an economic tumble. Our economy is completely unbalanced and operating to the advantage of powerful interests, because it seems to be under their control. I should like to emphasize the uneasiness within our economy and quote statistics to show where it is heading.

Our economy is heading somewhere. Powerful people control our economy for their own benefit. They make a system of it, a means which satisfies their ambition but at the expense of the great majority of the people. We have no objection to people manipulating the economy to their satisfaction or pleasure because we want them to have some revenue, but on the other hand we do want the people to have their small share of our economy. If there is no way of implementing other reforms than the ones we have now, I feel that it is the responsibility of

27053-441J

Motion Respecting House Vote the government to take the necessary steps to direct our economy towards the people so that they will have the right to live, to walk, and fulfill themselves. The economy does not exist only for some individuals, but it must be directed for the benefit of the nation as a whole, for the benefit of the 20,610,000 Canadian citizens.

Therefore, Mr. Speaker, with regard to the vote of confidence the government is asking for today, some newspapers said that I had decided to abstain from voting while keeping the right to change my mind according to circumstances which change from day to day. I find myself constrained to motivate to the house and for the guidance of my constituents, my abstention from voting. I feel I must adapt myself to the present situation. If the situation is sensible, I will change my mind for the good of the people and if we changed our minds, as we did in the Ralliement Cre-ditiste, it is because the situation has changed, the situation appeared to us under a new aspect and has taken a new turn. In view of that situation, we adapted ourselves according to the facts, the possibilities, and we considered the practical aspect, the logical aspect. We work not only according to the party line but for the people as a whole, for the good of each individual and each Canadian.

It is for those reasons that we changed our position toward that motion.

First of all, I am opposed to any increase in taxes or personal income tax, and that prevented me from voting for the government on the bill asking for a surcharge of 5 per cent on the personal income tax.

Secondly, I am also against a general election being held at this time of year, because of the present situation of our national administration, which absolutely needs to be straightened out before an election is called.

For those two reasons, I shall abstain from voting, unless I am shown by new arguments that it would be in the interest of the people that I act otherwise on this question of confidence in the present government.

If I am against our tax system and any increase in personal income tax, it does not follow that I am against the Liberals in this respect, for I am against the Conservatives for the same reasons, our two old parties having the same positions and the one being as responsible as the other for our forms of taxation, which are truly detrimental to the national economic balance, truly detrimental

February 26, 1968

Motion Respecting House Vote to the protection of the citizens of this nation of Canada.

That is what I must explain and demonstrate as clearly as possible, not so much in order to blame anybody, but so as to enlighten the hon. members with regard to an economic situation throughout the country which we cannot tolerate any longer and which we must change before it leads us to final disaster.

This situation, therefore, is due to both the Liberals and the Conservatives who have taken turns managing the country for the last hundred years, ever since confederation. A change from one to the other of the two old parties in power does not in itself imply a change in the taxation system. That is why, in the present circumstances, I prefer to see the Liberals continue to administer the country and seek to convince them that they should bring about the necessary changes not in the men in power, but in their attitude towards power. The men should not be changed, but they should be led to recognize their true responsibilities as representatives of the people.

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

What is a member of parliament? Why are we here?

For our 20,610,000 citizens, or for the big banks and companies in Canada with their chairmen and directors who are millionaires or multimillionaires? Are we the representatives of the people or the representatives of companies?

Why then so many banks and companies of all kinds make so much profits on an annual production of $62 billion in 1967, while so many persons and families are short of the necessities?

Why does Canada always show deficits each year, even in 1967, when eight banks increased their total assets over $3,200 million? When the companies, in addition to their profits of $5J billion of profits as filed and taxed, are still making more than $15 billion of profits concealed, disguised, accounted for, untaxed and recapitalized in the national economy, while more than 60 per cent of the people are living from day to day, without any comfort or a decent competency and are unable to enjoy the general prosperity of Canada? Why does this go on under our legislative and administrative authority? Can the hon. Minister of Finance (Mr. Sharp) answer my question? Can the right hon.

[Mr. Latulippe.l

Prime Minister and the hon. Minister of Justice (Mr. Trudeau) tell me why?

On the other hand when it is considered necessary to increase the guaranteed annual income of our old people, $280 million are taken out of the already far too limited purchasing power of the other taxpayers. Why not take them from the $15 billion in recapitalized profits of the large companies? Why drain by 1 per cent, by 5 per cent, through personal income tax increases, the consumption of living and suffering individuals, when anonymous and irresponsible companies can, under our authority and with our authorization, make recapitalized profits of over $15 billion in 1967, even after having paid taxes on declared profits of $5| billion?

I put the following question to the honourable representatives of the whole population of Canada: whose ministers and whose members are we here in this the highest parliamentary institution of Canada?

Do you believe I am talking through my hat, that I am inventing estimated figures, that I dreamed this last night? Look for the information. Here is a list of figures that any member can have from the Dominion Bureau of Statistics, figures you all know or, at least, should know, as representatives of all Canadian citizens.

To show you that I am not concerned with the Liberals more than the Conservatives, I shall give you statistics for the last five years of the Conservative administration, and the last five years of the Liberal administration. For ten years our government has accumulated deficits when 60 per cent of our people lack the necessities of life. On the other hand, let us consider how companies have administered their businesses, that is our business and that of their shareholders, chairmen and directors, always with our permission, our co-operation, our more or less conscious or knowledgeable complicity.

Mr. Speaker, I now quote the following statistics:

In 1957, companies declared $3,056 million of taxable income as compared to $7,335 million untaxed. In 1958, under the Conservative administration-declared and taxed profits reached $3,075 million while untaxed profits amounted to $6,975 million. In 1959, taxed profits reach the sum of $3,504 million, and untaxed profits were $6,894 million. Still under the Conservative administration, in 1960, declared and taxed profits amounted to $3,338 million and untaxed profits to $6,692

February 26, 1968 COMMONS

million. Under the Conservative administration, in 1961, there were $3,427 million of declared profits as compared to $6,635 million of undeclared profits. In 1962, there were $3,819 million of declared profits and $6,960 million of undeclared profits. Under the Liberal administration in 1963, declared and taxed profits reached $4,188 million, and undeclared and untaxed capitalization profits reached $7,591 million. In 1964, declared and taxed profits amounted to $4,819 million and undeclared and untaxed profits reached $9,103 million. In 1965, there were $5,199 million of declared and taxed profits as compared to $10,651 million of undeclared and untaxed profits. In 1966, declared and taxed profits reached the sum of $5,187 million and undeclared and untaxed profits $12,214 million. In 1967, declared and taxed profits were about $5,500, million as compared to $15 billion of undeclared and untaxed capitalization.

If we add up the whole thing we arrive at a total, for the past ten years, of $45,112 million of declared and taxed profits and $96,050 million of undeclared and untaxed capitalized profits.

This is, Mr. Speaker, the point I want to make. There have always been twice as many hidden as declared profits, always twice as many untaxed as taxed profits, twice as many capitalized profits as taxed profits, twice as many centralized profits as distributed profits. Since 1957, companies have accumulated $96 billion of untaxed profits capitalized on the production realized by all the people, which represents nearly $5,000 per citizen and $25,000 per family of five, which is considered as the average family in Canada.

Because our governments did not tax proportionally the large incomes, they had to borrow from them and tax those with small incomes to pay interests to those who have large incomes. Those are the results of an unfair tax exemption.

That is what we must see, knew, consider and correct within the shortest possible time, even within the framework of the present constitution. That is the first administrative and legislative priority which we must tackle immediately if we really believe that we are the worthy representatives of the Canadian people who gave us their confidence and who elected us so that we may render them justice in the Canadian parliament.

In 1934, Mr. Speaker, Canada was going through a period of economic crisis which was felt all over the world, following the crash of the stock exchange and the stocks

DEBATES 7003

Motion Respecting House Vote of the companies in New York and in the whole world.

Having made a thorough study of our Canadian economic system, with the help of Canadian, American and European economic experts, our government at the time founded the Bank of Canada. Ten years later, in 1944, the Canadian government, on the basis of experience acquired through the first ten years of existence of the Bank of Canada, revised the act governing the Bank of Canada in its relations with the chartered banks of the country. In 1954, the government made another revision. It made a few administrative reforms and let the system go along as best it could for another decade. In 1964, a royal commission on banking and finance presented the voluminous Porter report after a long and thorough study conducted with the help of renowned Canadian and foreign economic and financial advisers. It was only in 1967, three years later, that our government at long last introduced a new act on the Bank of Canada and our eight chartered banks with some

6,000 branch offices across Canada and in foreign countries.

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

In addition, in 1967, our government received from the Carter commission another notorious report on our entire taxation system. This was a very thorough study of about 2,600 pages, which cost the taxpayers approximately $3,600,000.

During 1963-64, in order to stress the importance of good management and good advisers at the top level of our economy, the government decided to set up the Economic Council of Canada which is constantly ready to help the Canadian government either by making suggestions, undertaking research on specified aspects of our economic picture, releasing technical information which can be useful to the management of large Canadian financial, industrial and commercial institutions or directing the Canadian economy to meet the needs of the Canadian consumers.

In spite of all that, of all those precautions, of numerous royal, decennial or annual, daily or permanent inquiries, in spite of those numerous and very well paid advisers, ably assisted by an army of researchers, technicians, technocrats, and secretaries, our Minister of Finance (Mr. Sharp) keeps telling us that Canada is experiencing an incredible financial crisis, that our national economic equilibrium is very poor that we are faced with inflation and that the people must by all

February 26, 1968

Motion Respecting House Vote means tighten their belts and stop living beyond their means and even stop working, because our earning power is superior to our production capacity, which causes inflation.

In order to force the people to spend less, they must be taxed more and especially at the source, before they even receive the salary they have earned legitimately by their regular work, in the regular production of material, intellectual or spiritual goods and services produced by all the economic activities of the whole population, for the whole population, that is, for our 20,610,000 Canadian citizens.

These facts, Mr. Speaker, have been checked and can be checked by each one of us, for ourselves first of all, for our own families and also for each one of our voters: employers, employees and dependents.

Although you may find this picture black and discouraging, you will undoubtedly recognize that it depicts the present sad reality.

Mr. Speaker, this is certainly not the time nor the place to elaborate a whole course in political economy, but these few remarks show that our Canadian banks and large companies are very prosperous, while more than 60 per cent of our people cannot enjoy our production, and lack the necessary purchasing power to enjoy the decent living Canadian citizens should afford.

Now, let us see the forecasts for 1968. This is what the president of the Montreal stock exchange tells us: "The national production will reach $68 billion, consumption $40 billion and capitalization $28 billion in 1968". This statement was made by Mr. Neapole, president of the stock exchange and former director of the Royal Bank of Canada. Forty per cent for capital, on 100 per cent production.

If the hon. Minister of Finance has yet to learn where to go for taxes, under his present taxation system, we tell him once and for all that we shall continue to use all available means to prevent him from taxing the gaining power or the purchasing power of workers, farmers, wage earners and other individual in Canada.

The Bank of Canada, the eight chartered banks, the 800 most important companies listed on the stock market, these are important institutions in our Canadian economy; but what is still more important in Canada, is the people, and those organizations are there only to give administrative services.

They are only instruments, means of production and administration. We must not therefore sacrifice to them the best of our production.

So, Mr. Speaker, if one should wonder where I got this information, let him consult the brochure entitled Monthly Review, in which Mr. Neapole quoted the facts I have just mentioned. Capital, like work, is only a means of production, and production itself must be regulated by consumption. Why sacrifice so large a part of production to capital, even before having met the basic needs of consumption?

Capital should be taxed at least on the same basis as work is taxed. Corporations should be taxed on the same basis as individuals. That is the general conclusion of the report of the Carter royal commission on taxation. Why not take it into consideration from here on? Why postpone to a later date the fundamental conclusions of those experts on our modes of taxation?

We empower banks to create $3,200 million in money required for production; we empower companies to set up a capitalization of $15 billion required for production, but for goodness sake, let us not go so far as exempting them from taxes, as allowing them to recapitalize $28 million out of a yearly output of $68 billion, that is, more than 40 per cent, when in 1944, only 10 per cent was set aside for capitalization, or $1,200 million out of a $12 billion production.

In 1968, we shall earmark 40 per cent for capitalization and only 60 per cent for consumption.

Therefore, a statement on our national economy brings out its most obvious deficiencies. Since the end of the last war mostly, the amount of capital sought from banks and companies has increased to such an extent that it was necessary to sacrifice the happiness and welfare of the Canadian people who contribute to the prosperity of our banks and companies, under the direction of our governments elected by the people.

Mr. Speaker, the banks create money, the companies create capital and the governments tax the individuals to allow for even more profits and prosperity for those banks and companies which have no life, which do not exist in reality, which are only tools of production and administration of material, intellectual and spiritual goods and services for the benefit of the 20,610,000 citizens who make up our nation in 1968.

February 26, 1068

In 1967, that is during the year just ended, the total assets of banks increased by $3,200 million, the capital of companies after taxes increased by over $15 billion and the governments keep on taxing the personal income as well as already insufficient purchasing power.

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

Banks, companies, governments themselves, in short all institutions or corporations are merely instruments of production or administration at the service of the people. Now, the people are sacrificed to the benefit of banks, companies, governments and big corporations. Is that clear enough?

I will even go further, Mr. Speaker. Those are the facts, the situation. That is the position of our government-the first institution of Canada-the one responsible for our monetary, economic and political system.

A government, with 265 members, elected by the people, by the 20 million Canadian citizens who all have the right to live according to our productivity. So we, in this parliament, are responsible for the adjustment which has to be brought about in our economy.

To state the facts does not mean to accuse, to blame or even to judge the government. But facts are self-explanatory and help us to understand the causes of a parliamentary crisis which still seems to be quite superficial and incidental, but which is an indication of the virulent basic weakness at the core of our administration, our government legislation here in Canadian parliament.

Results for 1967: before the people short of the necessities of life or normal comfort, our banks are increasing their assets by $3,200 million, our companies are collecting capital of over $15 billion and the government wants to reduce the purchasing power of the individuals to increase still more the profits and capital of banks and big business.

With the co-operation, the protection and the more or less conscious connivance of the ministers and members elected by the people, for the people, our banks and companies are prospering, they increase their capital, they get richer by the billions yearly, while governments incur deficits, get into debt, compromise, tax the little man in order to pay a higher and higher interest on borrowed capital, on big capital formed, to start with, through unjust tax exemptions.

Motion Respecting House Vote

Things being as clear to me as they are, it is not a question of finding out where the disease is, it is a matter of curing it at its roots. First, we must increase the purchasing power of the people where it is lacking. There is an abundant production, but it is not being distributed according to the needs of the people, precisely because the people lack purchasing power.

Mr. Speaker:

Order. I interrupt the hon. member at this stage to ask him if he is convinced that what he says is related to the motion under study.

Mr. Latulippe:

Thank you, Mr. Speaker.

I think I am doing my best to demonstrate the bad effects of the present system and where it is leading us. That is what has brought about the present economic crisis and the government defeat. The present system is the cause of this crisis, and I was trying to describe the situation and the prevailing uneasiness. Before I resume my seat, I have an amendment to move to the government motion.

It is obvious that we are not merely stating the facts, pointing out the trouble and blaming the government, but that we suggest the remedy, in other words an immediate, efficient, practical and logical solution. Purchasing power must exist in different well known sectors, but it must be provided by taking the money from those who have it and not from those who have not. We must take some purchasing power away from those who have too much and give it to those who do not have enough. It is that simple. That is the solution.

The purchasing power of consumers is even more important than the capital necessary for production. What is the use of production capital if there are no consumers? The whole production would remain on the shelf; there would be no way to pay interest on capital nor to reimburse that capital, and the whole people would have worked without being able to enjoy the goods they need.

Therefore if here, in the Canadian parliament, we want to see our economy run smoothly and profitably once more, all we need to do is to promote a greater purchasing power where it is needed by taking money where there is too much. That is the only way in which we will correct the unemployment situation, eliminate inflation, and reestablish a balance in the economy between production, consumption and capitalization, between individuals, families and companies,

7006 COMMONS

Motion Respecting House Vote between employers, employees and dependents, between capital, work and the vital rights of those without work or capital.

All that can be done here, by ourselves, within the present constitution, by the present ministers and members of parliament, without an election, without new departments, without new institutions.

Mr. Speaker, I heard Conservative members raise questions and protests of all kinds, but they did not bring any solution. That is why we shall not vote for this motion since we do not agree with the Conservative reasoning in this matter. Should the Conservatives assume again the reins of government, they would come back with the same tools, the same arguments, the same means, and that would lead to the same results: failure, the present national lack of balance and the tumbles we saw recently.

Before concluding I move, seconded by the hon. member for Chapleau (Mr. Laprise):

That the motion be amended by adding immediately after the word "carried", the words "on division" between commas.

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

Mr. Speaker:

I will read the amendment proposed by the hon. member for Compton-Frontenac. Perhaps hon. members might like to argue the procedural aspects of the proposal. The amendment is as follows:

That the motion he amended by adding immediately after the word "carried", the words "on division" between commas.

Mr. Starr:

Mr. Speaker, could I ask the hon. member who proposed the amendment whether he has copies in English?

Mr. Lalulippe:

Mr. Speaker, I have none in English; some would have to be printed.

Mr. Speaker:

Order. Perhaps I could read the amendment in French again. If hon. members listen to the interpretation in English this might facilitate their forming an opinion on it.

That the motion be amended by adding immediately after the word "carried", the words "on division" between commas.

[Mr. Latulippe.l

DEBATES February 26, 1968

Mr. Nielsen:

Mr. Speaker, on a point of order, with respect to the legitimacy of the motion, what the amendment is suggesting is that the right of the house to be polled be done away with. We have had sufficient attempts in the last week to do away with the rights of the House of Commons. This amendment, couched as it is, would deprive the members of this house of the right to be polled and in my submissions is completely out of order.

Mr. Starr:

If I heard the amendment correctly, Mr. Speaker, the word "approved" was in the motion. However, when I look at the motion itself the word "approved" does not appear at all.

Mr. Langlois (Meganlic):

Mr. Speaker, if the whole motion were read, it might clear up the situation. In the French motion, we have the word "approuve", and our amendment derives from the French copy.

Once amended, the motion would read as follows:

That this house does not regard its vote on February 19 in connection with third reading of Bill C-193, which had been carried, on division, in all previous stages, as a vote of non-confidence in the government.

That might clear up the matter for the hon. member for Ontario (Mr. Starr) and other hon. members because in the French version, we have the word "approuve".

Mr. Graffley:

It means that you are embarrassed.

Mr. Starr:

In view of the confusion about this amendment, Mr. Speaker, I think in order to judge the amendment properly we should have copies in English.

Mr. Knowles:

Mr. Speaker, whether or not we get copies in English, I wonder whether Your Honour would take a look at the amendment as it is before you, in French. As I understand it the purpose of the amendment is to write the words "on division" into that part of the motion that refers to Bill No. C-193 having been carried at all previous stages.

Mr. Langlois (Meganlic):

On division.