September 20, 1971

ROUTINE PROCEEDINGS

REPORT BY MINISTER OF FINANCE ON GROUP OF TEN MEETING-TABLING OF COMMUNIQUE AND STATEMENT OF CANADIAN POSITION

LIB

Edgar John Benson (Minister of Finance)

Liberal

Hon. E. J. Benson (Minister of Finance):

Mr. Speaker, I would like to make a brief report to the House on the meeting in London last Wednesday and Thursday of ministers and governors of the Group of Ten.

I wish to table copies in English and French of the communique issued by the Group of Ten and of my statement of the Canadian position.

This was the first opportunity for ministers to examine the world monetary situation in light of the program announced on August 15 by President Nixon to correct the very serious balance of payments deficit of the United States.

All ministers recognized that a fundamental disequilibrium exists in world payments and that action on a wide front will be necessary to deal with it. We have all come away from the meeting with a much clearer understanding of positions. All of us appreciate that difficult work lies ahead, and nobody expected overnight solutions. As far as I am aware, the world has never been faced by a financial and economic negotiation of such complexity and sensitivity. The plain fact is that differences of opinion have emerged among leading nations as to the order of priorities for the major policy adjustments that are necessary. It will take time for governments to decide on such actions in light of the positions of every other government. In the meantime important work will proceed in Working Party Three of the Economic Policy Committee of the Organization for Economic Co-operation and Development, as well as among the deputies of the Group of Ten. The ministers and governors will meet again on September 26 in Washington, in advance of the annual meeting of the International Monetary Fund.

In my remarks to the meeting as Minister of Finance of Canada I emphasized the urgency of the situation and the need to grapple positively with the issues involved. I stated frankly that the most important steps of the United States-the surcharge, the investment tax credit and the so-called DISC proposal-are protectionist in nature. They represent a departure from traditional American policies. I suggested that action is long overdue to dismantle protectionist policies on the part of Europe and Japan that have hindered the process of adjustment and that have too often been directed at U.S. products. I said that

immediate adjustments would be assisted if the U.S. could make a more precise statement of essential preconditions for the removal of the surcharge.

Canada recognizes that the payments position of the United States will be corrected, one way or another. We have suggested that the real issue is the way in which the correction will occur. We hope it will occur in an environment of continued economic expansion in the world. We hope it will not occur through an unravelling of the freer trade arrangements secured in the last quarter century. We must act together in constructive ways before such a pattern of restriction sets in.

No country has more at stake in these matters than Canada. We intend to participate actively and responsibly in these discussions and provide leadership wherever we can.

Topic:   ROUTINE PROCEEDINGS
Subtopic:   REPORT BY MINISTER OF FINANCE ON GROUP OF TEN MEETING-TABLING OF COMMUNIQUE AND STATEMENT OF CANADIAN POSITION
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PC

Robert Lorne Stanfield (Leader of the Official Opposition)

Progressive Conservative

Hon. Robert L. Stanfield (Leader of the Opposition):

Mr. Speaker, I should like to welcome the Minister of Finance (Mr. Benson) back to Canada and to the House of Commons. There was a little concern that he might not be allowed to return, that his services might be required to deal with these financial and economic negotiations of such complexity and sensitivity.

I do not intend to speak at any length, Mr. Speaker. I think the minister will agree with me that we have already read in the press just about everything that he said in the House today. We understood that there were no solutions. We recognize, as he pointed out, that a good deal of time will be required to work out some of these difficulties. We understood, too, that there were fundamental differences of opinion among some of the important countries and blocs attending the conference. We agree that it would be helpful if the United States were to state its preconditions for the removal of the surcharge a little more precisely. However, I gather from the minister's statement that the United States is not yet prepared to do so.

The minister has confirmed the press reports of what he said at the meeting about the positions of other countries. We can agree with his expression of opinion about the protectionist aspect of the move taken by the United States. He also expressed his opinion about what the European Common Market and Japan should do. However, I think it would have been more helpful to the House and the country if the minister had told us what measures, if any, the other countries have suggested that Canada should take. This has not been disclosed and I suggest it is very important.

There were rumours, for example, that the IMF had suggested that we should peg our dollar well above that of the United States. The minister has not told us whether other countries, the United States, for example, are insisting that Canada should move in any particular direction.

September 20, 1971

Report on Group of Ten Meeting

He has not told us whether the European Common Market countries are taking any position as to the direction which Canada should take with regard to the Canadian dollar or other aspects of Canadian policy. The minister has simply told us what he suggested other countries should do. I suggest it is very important to Canadians, in considering our position and our difficulties, that we have what we have not yet had, a frank disclosure by the minister or the Prime Minister as to what pressures, if any, for a change in position have been directed against Canada and by what countries. *

Topic:   ROUTINE PROCEEDINGS
Subtopic:   REPORT BY MINISTER OF FINANCE ON GROUP OF TEN MEETING-TABLING OF COMMUNIQUE AND STATEMENT OF CANADIAN POSITION
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NDP

David Lewis

New Democratic Party

Mr. David Lewis (York South):

Mr. Speaker, there may well be a reason why the minister had to be so unrevealing in his statement. It may well be that the discussions which were held in private and the negotiations which will continue made it impossible for him to tell Parliament and the people of Canada anything at all. But I must say as one member of the House that I am becoming increasingly frustrated by these non-statements and generalizations that there were differences of opinion when everyone in the world knows that to be so, and these generalizations and platitudes about the need for corrections to take place in a state of economic expansion rather than contraction, with which everyone agrees. I have a feeling that if ministers cannot say more than that, if they cannot be more meaningful than that, perhaps the practice of making these reports ought to be abandoned, because the minister said nothing at all.

I and the people of Canada would like to know whether there was any indication from the Secretary of the Treasury of the United States that consideration is being given to the removal of the surcharge. We do not merely want to know what are the preconditions but are they going to remove it? I had hoped the minister would tell us whether he discussed with Mr. Connally Canada's appeal for the removal of the surcharge with respect to Canada, and whether he had any encouragement. I suspect, since he did not refer to it, that either he did not discuss it, which I find unimaginable, or he discussed it and did not get encouraging answers. If that is the case he ought to have told us.

What the minister has brought back to us is an admission that he refused to make sgme weeks ago, namely, that what Canada and the western world face is not a short-range problem but a long-range problem, that the various protectionist, or what I have called in the House reactionary, policies of the Nixon administration that are working against the western world, which is what they are doing, are not going to be of short duration and are not going to disappear. Neither the surcharge nor the tax credit nor the DISC program is going to disappear in a short time. Therefore it is important for the government and Parliament to consider some long-range economic adjustments to meet the evils and undoubted serious consequences of the American protectionist policy.

I think the minister's report underlines the inadequacy, almost the irrelevancy, of Bill C-262 which we debated here. The temporary measure that the government produced cannot really meet the position at all. I also suggest that the minister would do the country and Parliament a great deal more service if he would tell us what Canada and the Canadian government are preparing to do in

order to deal with the long-range economic problem that will get worse before it gets better, if it gets better, in less than a year or two. From my reading of the American temper at the moment, it is clear that Washington does not intend to abandon this protectionist role, that the policy of turning inward to deal with the problems of the United States is one that will be of long duration, that their determination to make the western world help to solve these problems is very strong, and that, therefore, we must look at some long-range solutions of our own and in unison with other countries if we can find a general policy.

Finally, I would hope that when speaking in Europe the minister pointed out to the United States, as I hope he will when he speaks again, that it is not only world trade by any means that is responsible for the American balance of payments problems but that their military commitments carry a major responsibility, and that reducing them is, perhaps, the way in which to help peace as well as the international economic security.

Topic:   ROUTINE PROCEEDINGS
Subtopic:   REPORT BY MINISTER OF FINANCE ON GROUP OF TEN MEETING-TABLING OF COMMUNIQUE AND STATEMENT OF CANADIAN POSITION
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SC

Joseph Adrien Henri Lambert

Social Credit

Mr. Adrien Lambert (Bellechasse):

Mr. Speaker, I read very quickly but I listened very closely to the statement made by the Minister of Finance (Mr. Benson) in which he said the following:

So far as I am aware, the world has never been faced by a financial and economic negotiation of such complexity and sensitivity.

Mr. Speaker I am certainly not an expert in international problems. However, if we use the good common sense with which one should study the problems we now have in Canada and which do not seem to be different from those encountered by the United States and several other countries, it appears that countries, as a rule, are faced with overproduction and goods of all kinds and that each country is trying to protect its own domestic economy by resorting to the means taken by the United States on August 15, 1971.

In view of the circumstances, and even if those problems are considered very serious, I feel that if we were up against a world famine, we would probably be wiser and perhaps more capable of finding solutions. It would seem easier to me, judging from the discussions held by the Group of Ten.

Without resorting to "overnight solutions" as the Minister of Finance said a while ago, we must look into those problems more rapidly. We must not spend years doing it. Indeed, Canada should set the example: instead of retorting with statements which may only embroil matters, the government should enact a discount on prices, stimulate consumption of goods made in this country develop our Canadian economy. This would be an example for the United States where doubtless there are as in Canada, families whose needs are not being satisfied. Even though it is said that the Americans number 200 million and that theirs is a rich country, I have had the opportunity this summer of visiting certain regions of that country and to see there, just as in Canada, poor families in a rich country.

I feel that at the new meeting of the Group of Ten, the Minister of Finance will advocate, without prejudice to Canada, the application of a policy fit for human beings

September 20, 1971

who happen to be willing to reach the objective of production, by making all other people benefit from it.

In order to enable Canada and the United States to attain this objective, it will be necessary to steer off the beaten tracks, to adopt a new policy and, instead of overtaxing, to grant discounts leading to a decrease in prices and an increase in purchasing power.

In my view, unless different measures are taken, we shall see, as we did during the period from 1935 to 1940, economic rivalry between countries which can only lead to war.

* (2:20 p.m.)

I would not wish that we take the same means at this time because we would undoubtedly get the same results, which would be unfortunate. We are in peacetime and we have huge stocks of products manufactured by the population. Let us be wise enough, at least with our possibilities throughout the world, to transport that wealth to those who need it. Let us be wise enough to find the financial means to reach that goal.

That is my suggestion in answer to the statement of the Minister of Finance.

Topic:   ROUTINE PROCEEDINGS
Subtopic:   REPORT BY MINISTER OF FINANCE ON GROUP OF TEN MEETING-TABLING OF COMMUNIQUE AND STATEMENT OF CANADIAN POSITION
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WITHHOLDING BY GOVERNMENT OF PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43

NDP

Alfred Pullen Gleave (N.D.P. Caucus Chair)

New Democratic Party

Mr. A. P. Gleave (Saskatoon-Biggar):

Mr. Speaker, I ask leave under Standing Order 43 to present a motion of urgent and pressing necessity. I move, seconded by the hon. member for Yorkton-Melville (Mr. Nystrom):

That, in the opinion of this House, the government should immediately pay to the Canadian Wheat Board the sums required by law to be paid, as specified in the Temporary Wheat Reserves Act of 1956.

Topic:   WITHHOLDING BY GOVERNMENT OF PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43
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IND

Lucien Lamoureux (Speaker of the House of Commons)

Independent

Mr. Speaker:

The House has heard the motion proposed by the hon. member for Saskatoon-Biggar. Under the terms of Standing Order 43 this motion requires the unanimous consent of the House. Is there unanimous consent?

Topic:   WITHHOLDING BY GOVERNMENT OF PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43
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?

Some hon. Members:

Agreed.

Topic:   WITHHOLDING BY GOVERNMENT OF PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43
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?

Some hon. Members:

No.

Topic:   WITHHOLDING BY GOVERNMENT OF PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43
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IND

Lucien Lamoureux (Speaker of the House of Commons)

Independent

Mr. Speaker:

There is not unanimity and the motion cannot be put.

Topic:   WITHHOLDING BY GOVERNMENT OF PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43
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QUESTIONS ON THE ORDER PAPER


(Questions answered orally are indicated by an asterisk.) Questions


AIR CANADA AND CPA-POOLING OF SERVICES

NDP

Mr. Mather

New Democratic Party

Is consideration being given to pooling the services of Air Canada and CPA in the international flight field to offset the costs of the new larger aircraft and the operational losses entailed by the airlines?

Topic:   QUESTIONS ON THE ORDER PAPER
Subtopic:   AIR CANADA AND CPA-POOLING OF SERVICES
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LIB

Gérard Duquet (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Gerard Duquet (Parliamentary Secretary to Minister of Transport):

1. No consideration is being given to the pooling of air services between Air Canada and CPA in the international flight field. However, some technical discussions between the carriers are being held with a view to exploring certain common problems of cost saving in the operation of new large aircraft.

Topic:   QUESTIONS ON THE ORDER PAPER
Subtopic:   AIR CANADA AND CPA-POOLING OF SERVICES
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CLASSIFICATION ADJUSTMENTS AS A RESULT OF LAST REPORT OF CLYNE COMMITTEE

NDP

Mr. Orlikow

New Democratic Party

1. How many classifications of public servants have had their salary ranges adjusted as a result of the last report of the Clyne Committee, as of June 1, 1971?

2. What are the classifications?

3. What were the adjustments?

Topic:   QUESTIONS ON THE ORDER PAPER
Subtopic:   CLASSIFICATION ADJUSTMENTS AS A RESULT OF LAST REPORT OF CLYNE COMMITTEE
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LIB

Charles Mills (Bud) Drury (President of the Treasury Board)

Liberal

Hon. C. M. Drury (President of the Treasury Board):

1.

As of June 1, 1971, the following classifications had had their salary range adjusted as a result of the last report of the Clyne Committee.

2. The classifications were Senior Executive Officers 1, 2, 3 and 4 (SX 1, 2, 3 and 4), Senior Executive Group, Executive Category, and Deputy Ministers 1, 2 and 3.

3. The adjustments effective January 1, 1971, were: SX 1 Former range, from $20,000 to $25,000 (with increments in multiples of $250); new range, from $21,000 to $26,000 (with increments in multiples of $100). SX 2 Former range, from $22,000 to $27,000 (with increments in multiples of $250); new range, from $23,000 to $29,000 (with increments in multiples of $100). SX 3 Former range, from $24,000 to $30,000 (with increments in multiples of $250); new range, from $26,000 to $32,000 (with increments in multiples of $100). SX 4DM 1 Former range, from $29,000 to $35,000 (with increments in multiples of $250); new range, from $31,500 to $37,500 (with increments in multiples of $100). DM 2 Former range, from $35,000 to $39,000; new range, from $37,500 to $42,000. DM 3 Former range, from $39,000 to $42,000; new range, from $42,000 to $46,000.

Note: Senior Executive Officers and Deputy Ministers are paid on the basis of merit.

Topic:   QUESTIONS ON THE ORDER PAPER
Subtopic:   CLASSIFICATION ADJUSTMENTS AS A RESULT OF LAST REPORT OF CLYNE COMMITTEE
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September 20, 1971