June 13, 1972

LABOUR RELATIONS

QUEBEC-LONGSHOREMEN'S STRIKE-TELEGRAM FROM MONTREAL PORT AUTHORITIES-POSITION OF GOVERNMENT

IND

Roch La Salle

Independent

Mr. Roch La Salle (Joliette):

Mr. Speaker, I wish to direct a question to the Minister of Labour.

Since the Chairman of the port of Montreal Authority forwarded a telegram yesterday to the Minister of Labour, the Prime Minister and the Minister of Justice urging them to take the necessary steps to end the conflict which has been lasting since May 16, may I ask the minister whether it is his intention to answer in the affirmative to that telegram, or if he will keep advocating arbitration?

[Englishl

Topic:   LABOUR RELATIONS
Subtopic:   QUEBEC-LONGSHOREMEN'S STRIKE-TELEGRAM FROM MONTREAL PORT AUTHORITIES-POSITION OF GOVERNMENT
Permalink
?

Abram Ernest Epp

Hon. Martin P. O'Connell (Minister of Labour):

Mr. Speaker, the necessary measure to take to resolve the dispute is for one party or the other, not waiting on the other party, to take this dispute to arbitration as is provided in the Canada Labour Code and in the collective agreement. For me to take any other position would be to open a precedent that I do not think any member of the House would wish to see, that closed agreements can be reopened at the initiative of the minister when there are other procedures provided in the agreement.

Topic:   LABOUR RELATIONS
Subtopic:   QUEBEC-LONGSHOREMEN'S STRIKE-TELEGRAM FROM MONTREAL PORT AUTHORITIES-POSITION OF GOVERNMENT
Permalink
PC

Lincoln MacCauley Alexander

Progressive Conservative

Mr. Alexander:

I have a supplementary question, Mr. Speaker.

Topic:   LABOUR RELATIONS
Subtopic:   QUEBEC-LONGSHOREMEN'S STRIKE-TELEGRAM FROM MONTREAL PORT AUTHORITIES-POSITION OF GOVERNMENT
Permalink
IND

Lucien Lamoureux (Speaker of the House of Commons)

Independent

Mr. Speaker:

Order, please. Hon. members will realize that we have now gone a few minutes beyond the question period. I allowed the hon. member for Joliette to ask a question because he had been waiting for a few days and I felt he should be recognized. I doubt whether we can go much farther now. Perhaps these supplementary questions might be asked tomorrow. Orders of the day.

Topic:   LABOUR RELATIONS
Subtopic:   QUEBEC-LONGSHOREMEN'S STRIKE-TELEGRAM FROM MONTREAL PORT AUTHORITIES-POSITION OF GOVERNMENT
Permalink

GOVERNMENT ORDERS

THE BUDGET


The House resumed, from Monday, June 12, consideration of the motion of Hon. John N. Turner (Minister of Finance) that this House approves in general the budgetary policy of the government.


PC

Robert Jardine McCleave

Progressive Conservative

Mr. Robert McCleave (Halifax-East Hants):

Mr. Speaker, later tonight we will be asked to register our approval or disapproval of the first budget presented by the Minister of Finance (Mr. Turner). Much as many of us admire the hon. gentleman, indeed like him very much, I will have to say now on behalf of my colleagues and myself that the official opposition will be voting against the minister's first budget.

In 1971 the economy, according to the estimates of the Economic Council of Canada, operated approximately $3

25319-10J

June 13, 1972

The Budget-Mr. McCleave

billion below its potential. It appears that in 1972 the economy will operate from $2 billion to $3 billion below its potential, and that in 1973 the economy will operate at least $2 billion below potential. This is quite an indictment of the measures that the right hon. Prime Minister (Mr. Trudeau) and his government have brought in for the conduct of the country. These figures alone, Sir, would justify anybody in not having confidence in the economic and financial policies of the government.

The figures released today by Statistics Canada-perhaps it should be renamed Unemployment Canada-show there were 9,000 more people unemployed last month than there were in the same month a year ago. This fact again casts a pitiless spotlight upon the economic climate in which the country is operating. I suggest, Sir, that the budget brought in by the Minister of Finance will simply not provide the stimulus to create demand for goods and services which would increase production sufficiently to reduce the number of unemployed. I will go into that argument at somewhat greater length in the first part of my speech.

We are faced with a seasonally adjusted figure of 6.2 per cent unemployment, and all this in the light of what the Minister of Finance has said today about the priority for the creation of jobs, and what he said on February 24, as recorded at page 217 of Hansard:

I see our first priority to be to provide good jobs for Canadians seeking work.

And later we find this:

I fully recognize that statistics are no substitute for jobs.

At page 214, the minister's statement reads:

My first and most urgent priority is to provide continuing and well-paying jobs for those Canadians seeking them.

But still we are faced with the dreary litany of the performance of the economy with regard to the provision of jobs.

One of the measures the minister seeks to use in the budget is the reduction of corporate taxation from a top rate of 49 per cent down to 40 per cent. This is done in the hopes of stimulating investment. First, I think the mistake that is being made is that the government, having fallen so badly out of favour with the business community, now uses this rather large carrot to try to get back some good will unto itself. I do not know whether or not this will work.

I think business invests productively when it believes a market exists for more goods. Can any businessman believe that the reaping of advantages to himself and his shareholders is really going to accomplish that purpose, or does he not look to his traditional customers, the public who buy, and ask: what is the budget doing to put more money in their pockets, more money which can be used to buy the goods of business? I think the government has used the wrong approach, and in doing so has made a monumental gaffe. Business would expand its activities if it had confidence in the future. And when the economy is stimulated by adequate consumer demand, job producing economic expansion is assured.

Some points can be made about the introduction of the new class of capital cost allowances. This entitles a taxpayer to claim as depreciation up to 50 per cent of the cost

of an asset in the year it was purchased or acquired, and the unclaimed balance in any year following. This is for machinery and equipment to be used for the purpose of manufacturing. There are five criticisms that should be noted in regard to this measure in the budget. First, the machinery may in fact replace present workers. If the aim of the budget is to create more jobs, then this is certainly self-defeating. Second, the machinery may have a high non-Canadian labour content. Third, the machinery may displace less skilled operators who are particularly susceptible to prolonged periods of unemployment. Fourth, the form of the incentive does nothing to favour the disadvantaged regions, and in those disadvantaged regions we have pockets of very high unemployment. Fifth, the employment effects of tax incentives for business are slow to appear in comparison with the effects of a comparable personal or sales tax reduction.

I suggest that corporate income tax cuts do not provide investment and employment stimulus for firms without profits. That is rather obvious. If you do not have money to invest and you are in difficulties, then anything done for your wealthy cousin down the street will not help you a bit, but may increase your misery, (a) by making you feel envious, and, (b) by increasing his competitive advantage over you. Corporate tax cuts provide no reliable stimulus to expand jobs and investment unless the recipient corporations are assured of expanding markets. The tax cuts do not even provide indirect stimulus to such labour intensive sectors as service industries and construction.

Also even assuming for the moment that the government's proposals increase investment, it must be recognized-and this is certainly being well scouted in one of the standing committees at present-that 40 per cent to 50 per cent of all investment goods are imported from the United States. Therefore one half of the effect of the government's policies will be felt in the United States. Therefore, by a curiosity, these measures may do more to stimulate the American economy than they will do for ours. I think this point should be made with regard to the long-range effects of this particular proposal in the minister's budget, that accelerated write-offs for capital equipment purchases lower the price of capital equipment relative to the price of labour. This has the economic effect of encouraging firms to substitute labour for capital in the production process. That sounds good on the face of it because it can cause a little output and employment to increase, but in the long run such a policy will result in a more capital intensive manufacturing sector. The swing will go the other way. The government may be buying a few jobs at present at the expense of even higher and more stubborn unemployment in the future.

I would like to suggest a few things that should have been in the budget, and that my colleagues and I would have liked to see in it. The report of the Carter Royal Commission on Taxation makes the point as well as anybody, and this after very considerable study, about changes in the personal income tax. I quote from volume 2, chapter 3 of that report as follows:

The impact of a change in personal income tax upon the take-home pay of workers is quick. Across-the-board changes in personal income tax rates provide the most effective single tax instrument for changing aggregate demand to achieve full employment

June 13, 1972

and price stability. Changes in corporate income tax rates and in sales tax rates are much less useful.

In all the studies that the Carter Commission made into the subject of stimulating the economy through the process of tax changes, they made the very strong point that it was the reduction of the income tax of the wage earner of Canada that was the quickest way of putting money into the pocket of the worker and thus into the economy. That, of course, is the quickest way of enabling more people to buy goods made in Canada which in turn increases our productivity and ultimately the well-being of all citizens. So I suggest, Mr. Speaker, that the most serious indictment that can be levelled against the minister, and against the government of which he is an adornment, is that the wrong course has been taken with regard to the measures needed to stimulate the economy and to get us closer to the potential that the Economic Council of Canada suggests for us.

There are other methods that could have found their way into the budget, Mr. Speaker. There could have been employment support assistance for labour intensive industries; investment tax credits for manufacturing, processing and service industries; guaranteed low-interest loans for export firms severely affected by DISC and, in concert with other nations, countervailing tariffs on DISC'S. Measures could have been taken with regard to housing programs and in a moment I shall deal with the announcement of the Minister of State for Urban Affairs (Mr. Basford) in that regard.

For long-range measures to strengthen the economy, there should have been a reformation of tax revenue sharing to reduce the present burden on the provinces and municipalities. As suggested by the Leader of the Opposition (Mr. Stanfield) in a recent speech made in Toronto, there could be a new formula applied to the taxation system. This formula has been the subject of some lively discussions. As I have said, there should be a taxation system which does not make a bonanza of inflation but which gives the government the incentive to do what it can with the powers of taxation.

There should be measures to reduce the present levels of sales tax on consumer goods primarily produced in Canada. There should be a reorganization of legislation and monetary policy to ensure that Canada has a capital policy which provides easier money and access to more venture capital for Canadian entrepreneurs. What we are doing is erecting barricades when there should be some method by which Canadians could take greater pride in investing money in their own country. There should be acts to provide low-interest loans for housing and we should use full employment budgeting techniques to provide a more realistic and honest basis for assessing the expansionary or deflationary impact of federal budgets on the Canadian economy.

Yesterday, in a burst of optimism, the Minister of State for Urban Affairs (Mr. Basford) brought in his version of the stone tablets containing the changes to the National Housing Act. A massive document was brought in at this stage of the parliamentary session and I am sure nobody in this Chamber, with the exception of the minister, could

The Budget-Mr. McCleave

believe that this would be part of the law of the land by summertime.

There are some new techniques in the measures suggested by the hon. gentleman but if we are to do our job adequately, four or five of the important proposals should be examined closely and not simply taken at face value. This kind of legislation should have been presented to us some considerable time ago. According to a report on the CBC this morning by a correspondent of the Globe and Mail, this legislation was ready in January or February when the present Minister of Consumer and Corporate Affairs (Mr. Andras) had conduct of this strange Department of Urban Affairs. If that report is correct, then we are being treated to flim-flammery, a sort of public relations exercise by which the minister hopes a lot of people in run-down neighbourhoods are going to be aroused. I would like to think that this housing legislation would be in effect by July 1. I think it would be a real lifesaver in many parts of Canada and I could see it operating usefully within my own community. But the way it is being brought in is like offering a person a full-course meal with no time to tackle it, only having time to gulp down hot dogs and root beer.

I should like to make the following comment on the proposals advanced by the minister. A few days ago when taking part in the housing debate, I mentioned the effect that the removal of sales tax on building materials could have on the cost of homes. Calculating it by the process of amortization, for approximately every $1,000 saved that way, like $3,000 or $4,000 is saved in long-range interest and carrying charges. That is a significant saving but even more pertinent is the suggestion that by cutting the cost of homes by as much as $1,000 or $1,500, more housing is put within the reach of those who at the moment cannot quite achieve that goal.

If we look upon more housing for low-income people as a desirable social goal, and I think every member in this House shares that view, then the way to achieve it is to ensure that housing costs less. I know there are some who say that if we tackle the cost of land this will be the result, but I am a little pessimistic about that, Mr. Speaker. Land has a habit of appreciating in value. If some speculative elements are eliminated, then it might be possible to hold down the cost of land a little but in the end I do not think land cost makes much difference. If we had to tackle the land cost problem, I think we would not do it through the land bank assembly plan but rather impose taxes on land that is held in order to make it unprofitable over a long period. I will not elaborate on that at the present time, but rather will explore it if, as and when this legislation gets into committee.

If we really wanted to tackle land costs, it would be a matter of getting the land serviced early so that it would be suitable for building, rather than serviced late so that it would stand idle, incurring taxes and bank charges. On the outskirts of cities such as Toronto, the value of land that is idle is rocketing sky high. I am sorry that the Minister of Finance could not have brought in a measure to repeal the sales tax on building materials so that we could have made one positive gesture towards bringing home costs within the reach of the tens of thousands of

June 13, 1972

The Budget-Mr. McCleave

Canadians who are now almost able to reach the goal of having their own home, but not quite able to close the gap.

May I comment on the proposals the minister made yesterday. The rehabilitation of some old neighbourhoods, as a substitute for urban renewal, commends itself to me and I support the idea, though only up to a point. I do not think the minister should altogether cut out urban renewal because, in some cases, it is needed. Urban renewal projects in some parts of Canada, and I am thinking particularly of one in downtown Halifax, are proving their value. Nevertheless, I think communities should be given the option of choosing whether they want to rehabilitate old neighbourhoods, or say, "This neighbourhood is beyond recall; all the carpenters, plumbers and workmen in the world cannot bring these buildings up to modern standards. This neighbourhood is simply not good enough and it must be renewed." On the other hand, there are places where the concept of urban renewal has been used, I think quite wrongly.

I remember between 1963 and 1965 searching titles and taking part in property transactions that involved older homes in Halifax. They were to be levelled to make way for large apartment buildings. This was a matter of expropriation and involved the building of public housing. I know that the provision of public housing was beneficial for some. However, it irked me, on looking at the title of a home that had been built 75 years ago and that was still a perfectly sound property, although perhaps in need of improving by the use of home improvement loans of a sort different from those we now grant, to find it was to be torn down. True, it was in a neighbourhood somewhat run down, but quite liveable. I was annoyed to think of those families that were to be uprooted and sent packing, that houses costing between $15,000 and $20,000 were to be torn down to make way for the construction of apartment buildings.

In the name of public housing, we were committing several crimes. We were committing the economic crime of putting people into apartments that we expected would cost up to $30,000 each, and that cost could never be recovered; we were committing the crime of removing homeowners-I guess I have a prejudice towards home ownership-and dislocating them from their neighbourhood. Actually, I know of people who sat with a shotgun on their knees waiting for the approach of the bulldozer. If the bulldozer had made an early appearance outside their door, I am sure the matter would have ended in the criminal courts. After a little persuasion and the granting of a little extra money, these people were induced to move away and these crises passed.

I was offended because our urban renewal programs then were so terribly sweeping and did about as much harm as good. Now, there is a danger that the pendulum may swing completely the other way; we may consider rehabilitating those parts of cities that ought to be cleared away. Understandably, there is no provision in this measure for dealing with commercial rehabilitation; therefore, I shall put in another blow for some of my favourite characters, the mammas and papas of this country who run small businesses. There ought to be no qualms about rehabilitating some of these small family businesses. I see

[Mr. McCleave.1

nothing wrong with that in principle. If people do not want to work downtown in some big factory, in a large crowd, they should be given the chance to run their own lives and run their own small businesses.

I ought to note for the record several of the points made on this subject by the newly elected president of the Canadian Federation of Mayors and Municipalities, Desmond Newman. He said that the minister's proposals may not be of advantage to some municipalities, because the municipalities do not have any extra money with which to operate. Some of those difficulties may be cleared up at the tri-level government conference scheduled for November. He suggests that the municipalities would like to get in on the ground floor, while these matters are being talked about and considered, before changes are made. He also makes the same point about the lack of policy relating to commercial rehabilitation that I have just made.

Then, also, he says, significantly, that there is still a gap between what an elderly couple may receive under government programs and the minimum they require if they are to own a home. I think in this area there is a serious defect in the legislation and I hope the minister, if he is to deal with this matter before the end of June, will consider it seriously. The right of our elderly people is a right for which we shall fight. I do not see why an elderly couple cannot enjoy the right to home ownership just as younger people do.

I wish to make a final point; I see that only two minutes of my time remain. Perhaps, I will not deal with it now but will deal with it when the labour bill is considered later. I think the government should take steps that will give Canadians the opportunity for greater participation in the offshore mineral and oil search, and particularly that search taking place off the coast of Atlantic Canada. Perhaps measures could be enacted dealing with work permits. I have already been in correspondence with the director general in the Atlantic region in this regard; he may be able to act on the matter so that I may be able to achieve my aim without making this a public issue. I think there ought to be more opportunities for Canadian people to participate in the offshore oil and mineral exploration process.

When the opportunity arises later, in the present session, I want to take a look at the British Commonwealth Maritime Shipping Agreement. I think it is shameful that governments, past and present, have not brought that agreement up to date, because now Commonwealth ships from other countries operating in Canadian coastal waters are not required to pay Canadian wage rates or Canadian unemployment insurance and are not required to give their seamen the benefits which flow from Canadian legislation. Once that measure has been brought up to date, it will mean that more Canadian seamen will be engaged in that coastal trade. I have not the time to elaborate on this now, although I want to do so in future.

My main point now is this: I do not think the budgetary measures of the Minister of Finance are adequate and we shall show our displeasure with them when the vote is called this evening.

June 13, 1972

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
PC

Gerald William Baldwin (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Baldwin:

On a point of order, Mr. Speaker, there has been some discussion among members of the House with regard to the furtherance of this debate. Since there are still many members who wish to speak in the time available, it has been suggested that hon. members might agree to a limitation which would curtail speeches to 20 minutes. Some hon. members are prepared to agree to this suggestion, although they prepared fairly lengthy speeches. I think they would be prepared to make this sacrifice if the agreement were to be extended to other hon. members.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
IND

Lucien Lamoureux (Speaker of the House of Commons)

Independent

Mr. Speaker:

Is this agreed?

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
?

Some hon. Members:

Agreed.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
IND

Lucien Lamoureux (Speaker of the House of Commons)

Independent

Mr. Speaker:

It is so ordered.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Louis Guy LeBlanc

Liberal

Mr. Guy LeBlanc (Rimouski):

Mr. Speaker, I am happy to have this opportunity to comment in my name and especially in the name of my electors of the constituency of Rimouski, on the budget presented on Monday, May 8 last by the hon. Minister of Finance (Mr. Turner).

I wish to congratulate once more the hon. minister.

No doubt most of my fellow-citizens, from the constituency of Rimouski as well as from eastern Quebec, share my view in this respect.

That budget comes under the Liberal party's program announced since 1968 and is entirely consistent with the central theme of the throne speeches and budgets we have had since then. There is in all that a sense of unity, wisdom and drive of which we are proud. Political beliefs have proved correct and the hopes of the Canadian people have not been shattered.

That budget is being examined by the House and the hon. minister has undoubtedly foreseen that it would be a butt for criticism. Such criticism should be constructive in order to ensure progress in this country. Negative criticism-we all know that-has never been useful. The critical faculty should be developed not the spirit of criticism. That may be the difference between an ideal and utopia.

It is obvious that in his speech, the hon. minister tried to show that we should first stimulate the Canadian economy while supporting at the same time efforts on the part of industry, in order to progress in the midst of competition and create employment. Thus we see that the government can reach its goal which is to encourage the dynamic role of our human, active and business generating capital. It wants to encourage the militants, the creative people, through incentives to free enterprise.

Secondly, we can see that the government, despite criticism from the opposition, shows a serious concern for social justice, in keeping with the purest democratic tradition. We have only to consider the announcement of measures designed to boost the income of those who suffer the most from increased prices and the high cost of living.

That is evidence that the government recognizes the value of men and the usefulness of some groups of citizens who might be said inactive, if considered in a certain light, on account of their age, their state of health and the

The Budget-Mr. G. LeBlanc

length of their training for a career. Those citizens, whether disabled veterans or blind people, could be called upon to take part in the evolution of society. Even the aged could keep up with the adventure of life, share in Canada's progress and look toward an ever better future.

Spreading out our economic forces and assuring the poor of a more adequate income, such is the immediate or middle term goal. Therefore, this budget can be called a growth or expansion budget.

In 1972-73, economic growth can only result from this budget. Such growth should be felt at two levels; first, supply being what it is, an increased demand should result from the fiscal and social benefits being granted to various groups of citizens. Secondly, no doubt the benefits resulting from growth should have some repercussions in the industrial sector.

In fact, the minister told us of some new advantages related to write offs and tax abatements which can but profit manufacturers. This might encourage people to invest in the industrial sector and thereby improve our industrial situation and increase employment opportunities.

Some opposition members will certainly suggest, as they have already done, that nothing has been done to relieve the burden of the average taxpayers. I think that indirectly-and the impact will be as good as direct aid but more normal in a free society-the average taxpayer, who does not seem to be encouraged or protected, will benefit by increased demand. Increased demand can but improve the situation of merchants, small industrialists, small shopkeepers, gas station owners, etc. Generally increased demand stimulates economic activities.

I saw a case in point in my region recently where three local initiative projects have been approved and completed. These projects involved a low-income region of the Lower St. Lawrence. Even though those who benefited by it indirectly do not like to boast about in public, it remains that following confidential or private information I was told that during the implementation of these projects the small merchants, the small grocers, and the gas station owners noticed the effects of an added injection of money during the winter. These local initiatives projects did their business a lot of good even though they were not directly involved.

If I did not misunderstand the criticisms voiced earlier by the hon. member for Halifax-East Hants (Mr. McCleave), he said that the tax reductions granted to companies only increase their profits, do very little to improve the well-being of the average taxpayers, do not create employment, etc.

And yet I have met this morning one of my friends, president and sole owner of an average industry employing almost 250 skilled workers, and he told me that a few days after the budget speech he bought $80,000 worth of equipment. In the next two years, he can reap the benefits of depreciation and tax rebate. He foresees for next year a $20,000 tax saving and he intends to reinvest this amount in his company. This means therefore that his industry and working conditions will improve, his production increase and that he will provide jobs for more than 250 people in Rimouski, the town where I live.

June 13, 1972

The Budget-Mr. G. LeBlanc

It seems therefore that the provisions concerning the corporate tax rebate and the benefits regarding depreciation will be to everyone's advantage.

If we consider also the second area where the effects of the expected growth will be felt, that is to say the very precious group formed by average Canadian taxpayers, we can assume that it is going to be encouraged. Thanks to the forecast investments and to a rational control of employment level, the pulse of the economy indicates a normal trend. And as the increase in demand can be an element of progress and well-being for average Canadians, such also could be the effects of investments on industry.

Therefore, it can be stated that not only pensioners, invalids, veterans, citizens with fixed income, secondary and consumer industries will benefit from this budget, but also average Canadians. The same as when a serum injected in one limb benefits the whole body, those two advantages that are granted to industries and those Canadians unable to face the rising cost of living will benefit Canadian society as a whole.

It is probably true to say that since 1968 the government has had to wage a severe battle against inflation and the emphasis it has now put on growth will re-awaken the inflationary trend, but this battle was necessary. We are told that other countries, including the United States, have had to wage the same fight. Everyone knows that the fight against inflation was predicted with candour and sincerity in a program which was not a compendium of wonderful and gilt-edged promises.

Important people from foreign countries state that, among all industrialized countries, Canada has had the greatest success in its fight against inflation.

As a matter of fact, in accordance with its commitments, the government has endeavoured to correct various traditional weaknesses of our economy that are due to the rapid changes that are taking place in this, the electronic age. Apart from fighting inflation, the government has tried to lighten the tax-load of low-income people and has implemented a degree of tax reform. This firmness, for which some have criticized the government, was simply a realistic and true expression of the power and the authority that have been bestowed on the government by the Canadian people.

The men who make up the present cabinet are undoubtedly the most qualified and consequently the most worthy of confidence and they have all the ability required to administer Canadian affairs for many more years to come. The cabinet is surely the best director general of Canadian affairs.

We believe that the government is doing its best to carry out its program and to achieve the human ideal of all Canadians, an ideal of liberty and civilization.

However, everyone knows that there is some room for improvement and that there always will be. With each step forward, new horizons appear.

We know that since it came to power, the Liberal government has always paid a great deal of attention to those aspects of Canadian policy which need to be improved

[Mr. LeBlanc (Rimouski).J

constantly to allow for better implementation of such policy.

Following the budget speech, we know that the government wants to, and does, improve the fate of senior citizens. Some of our elderly constituents in the province of Quebec often come to tell us about their problems. For instance, the man who is over 65 years of age and who used to receive $135 or $137 a month will now get $150, which is at last a good increase. But it happen that his wife, who is under 65 and whose situation is under the jurisdiction of the Quebec government, receives almost nothing. There is a difference in being only 60 to 65 years of age, but from a social standpoint, I cannot see any real difference between those people and those who are 65 or over. The wife's situation comes under provincial legislation and regulations, but we hope that this problem can be solved in the near future-if necessary, in a joint effort by the federal and the Quebec governments.

Also, I cannot help but congratulate the government for its new policy on Initiatives which has already been in effect for the past two years and is designed to provide an incentive to work. The Opportunities for Youth and Local Initiatives programs are already in existence. An Opportunities for Age program has been mentioned some time ago. Following a report presented several weeks ago, there has been talk of an Opportunities for Citizens program. Maybe the government could consider grouping all those programs under a single structure which could be called Citizens' Initiatives or, possibly better, Opportunies for Citizens, and would be administered by a single department.

Experience acquired in the implementation of these projects has led to some soul-searching and to the realization that the government, more than ever, should concentrate on selecting competent administrators for these programs. It might also be suitable to decentralize analyses of projects and resorting at the area, sub-area and sector levels to various social agencies and contacting municipalities which have already submitted projects in the same fields, in order to avoid duplication.

It might be well to consider reducing slightly the number of projects with social and cultural aspects-in themself excellent and highly commendable-to some 10 to 15 per cent.

Young people should be involved in Opportunities for Youth programs allowing them to carry out projects with some relationship to industry, commerce, general economy, applied sciences, trades or crafts, without conflicting with free enterprise, in order to accustom them to becoming increasingly realistic and keep both feet on the ground, as the saying goes.

In my opinion, this would benefit a lot our country and such regions as that of the Lower St. Lawrence and Gaspe, where I live, and about which the Canadian government has made special agreements; we are all pleased to co-operate and to take full advantage of them for the good of the whole people of Canada.

Mr. Speaker, I wish I could make many more remarks about these aspects of the federal policy which concern my fellow citizens: regional development, unemployment insurance, agricultural policy, in particular with regard to

June 13, 1972

feed grains, which eastern Canada enjoys. Considering the agreement we reached twenty minutes ago, I hope I shall have another opportunity of dealing again with these matters.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
NDP

Roderick J. (Rod) Thomson

New Democratic Party

Mr. Rod Thomson (Battleford-Kindersley):

Mr. Speaker, yesterday the Minister of Supply and Services (Mr. Richardson) spoke in this House and indicated that purchases by his department would be spread around Canada rather than all of them being made in central Canada. I am not saying that all government purchases should be made in the Maritimes or the Prairies or in British Columbia, but since the people in those regions are taxpayers, and since the minister is spending public money, the policy the minister referred to is a logical one, and I wish to compliment the hon. gentleman on his announced intention. I feel that our business people have as much right to bid on this kind of business as do businessmen in Ontario and Quebec. I am not knocking the businessman of Ontario and Quebec when I say that; I merely wish to compliment the Minister of Supply and Services. The minister's new department has roughly $1 billion purchasing power, so I suggest that quite a bit of thought and care must be exercised. For example, his department has decided to buy salt from the United States, and as the representative of an area of Saskatchewan that has a salt mine I am not very happy with this decision. I have been protesting vigorously to the minister. The effect on local people of financial decisions made by the government is not always appreciated.

I cannot understand why the Minister of Finance did not think a little more about the farmers when he made these adjustments in his budget. I was a farmer before coming here and my equipment depreciated every year by several thousand dollars. If the minister thinks that farmers make a contribution to our economy, then he might consider giving them a 50 per cent depreciation rate on some of their equipment. This, to my knowledge, he has not done. Businessmen would also appreciate the benefits that would flow from such an adjustment.

I think we should also consider the position of some of our processors. The other day the hon. member for Fraser Valley East (Mr. Pringle) complimented the government for making the same concession to processors of farm products as it made to some other industries, and I am wondering whether the Minister of Finance would take another look at the farming industry with that point in mind. Perhaps the conception of farming held by Ottawa is a little removed from what it really is. Certainly, farming in my part of the world is quite industrialized. It is a cash basis operation; this is no longer subsistence agriculture. Farming is an industrial process and the farmers must realize an adequate income. They charge depreciation against their machinery and in most cases keep books. It is quite a commercial operation and I should like to think the Minister of Finance considers it as such.

I should like also to talk about one or two other things that have happened recently in relation to the Canadian economy. I refer specifically to the 2,000 boxcars ordered by the government. So far, there ha= been no decision on

The Budget-Mr. Thomson

who is going to pay for them, or by what method. I did notice that they are not provided for in the estimates.

I noticed, too, that the cost of improvements to the port of Prince Rupert does not appear in the estimates, either. If some announcement regarding grain storage is going to be made shortly, or there are some improvements to be made to the rail line to the west coast, then I cannot help but wonder whether these will be another example of the ad hoc planning of this government, particularly before election time. I do not think that this sort of planning is good for the country. The growth in trade to Asian rim countries has been fairly steady and consistent for some little time, so the government should have been taking steps to handle this trade over the years rather than waiting for an emergency and doing something in a crisis situation. It is said that politicians react to situations rather than act in advance, and I must say that it appears to me this is the way the government is acting. There is too much ad hoc planning.

I should like also to comment on the present value of the Canadian dollar which has an effect on trade in my area. The Canadian dollar has been rising to $1.02 or $1.03 U.S.,

, which means that the price of wheat will be affected since it is priced on the basis of the U.S. dollar. Every time the dollar goes up in value, it means that the problems of the people in my area increase. I asked the minister, the hon. member for Calgary South (Mr. Mahoney), how far the government was willing to go in backing the Canadian dollar, but he said he did not know. I should like to ask the Minister of Finance at this time how high he is going to let the Canadian dollar rise in value compared with the U.S. dollar before he will take some action. This is a question about which we are all concerned.

I also asked the hon. member for Calgary South whether any planning was being done in case the Canadian dollar reached too high a point, and he told me, "no". If the Minister of Finance cares to look at the minutes of the committee he will find that is on the record. If the minister has any plans in case the value of the Canadian dollar goes too high, he has certainly not disclosed them to us. Again, I am afraid an ad hoc decision will be made without any advance thinking being done; perhaps this will be for the best and perhaps not.

I should like to talk for a few moments about the economic development of western Canada. I do not want to be parochial because I should like to see economic development in all of Canada, but I feel more at home when talking about development in my home area. It seems to me that if we are to encourage industry to expand, we should either have a market that is already there or will be there, and we should produce a product for which there is a ready sale at hand. I am not suggesting that grain or beef or any other product that we are selling abroad are not important; rather, I am thinking of new industries. There are products that are in good local supply and these could satisfy either the local or a foreign market.

I am not absolving the provincial governments or local businesses from any responsibility in this connection, but I do want to talk about federal involvement in such developments, as I see it. I want to speak specifically about the oil industry and pipelines that will be built from northern

June 13, 1972

The Budget-Mr. Thomson

Canada to southern Canada and the United States. I attended an oil show recently in Calgary and saw a sample piece of 48-inch pipe that was made in Regina. I was told that this was the only pipe company in Canada that made pipe that large. There was also a 48-inch valve to fit the said pipe, and this particular one was made in Alberta, a complicated but excellent product. The man who detnonstrated it to me was quite proud of the fact that it was a locally produced product.

I also saw some samples of track-truck machinery and other equipment that works well in northern Canada, some of which we have managed to sell to Russia. However, I should like to talk specifically about pipe for the moment because it is produced in my own province and we will need a lot of it in the immediate future. Eventually, there will be gas and oil pipelines down through the Mackenzie valley. It was recently announced that the Minister of Indian Affairs and Northern Development (Mr. Chretien) was going to have a survey made this summer of a possible gas pipeline route either east or west of Hudson Bay. We are talking in the order of a million tons of pipe when we talk of a pipeline along the Mackenzie valley. That is a lot of pipe. I should like to see Canadian business, including steel firms and other suppliers, put in a position to take advantage of this particular item. Had the government shown some ability to plan for the future in respect of transportation to the west coast, I would feel easier about it also doing something in this connection. This is why I am quite concerned that we look ahead. To make sure business in Canada will continue to supply jobs and provide economic activity, it should be in a position to take advantage of any natural development as a result of pipeline construction.

We have had too much ad hoc planning in the past. Let us not have more in the future. Let us look ahead. The federal government should give some direction to provincial governments in this regard, and it should give direction to business. It seems to me the government is not taking an over-all look at the problem, particularly when one considers that the market for oil and gas is to be found to a large extent in southern Canada and in the United States, while oil fields are in northern Canada. These prospective pipelines will have to cross several territories, provinces and states as well, and it is only reasonable to assume that responsibility for them will lie with the federal government. It is logical to assume that any province or individual business would be in a difficult position in attempting to assess what this project would mean to us.

A source of iron ore on the Prairies would be of great advantage to the economic development of that part of the country. We have a source of iron ore in northern Saskatchewan, although I am not prepared to suggest it is an economic source. I am not in a position to say, and no one else seems to know. The federal government should assume some responsibility for the development of a product to serve a market which already exists. I do not think this is being done. In fact, iron could be supplied to a steel industry on the Prairies and perhaps the west coast as well.

In addition to the development of pipeline services, there are a lot of other services that tend to grow as a result of the establishment of a steel industry. This development of a local steel industry would have a multiplier effect in western Canada. This has been the case in the past. When western Canada has money, it usually ends up with the manufacturing industries here in eastern Canada. This is one country, and when we do well in one part this tends to be reflected throughout the rest of the country as well.

I suggest we should do something along these lines in connection with pipelines because a great deal of time is required before an industry is capable of supplying pipe or anything else in volume. We are not going to build these pipelines all at once. We should look far enough ahead that we will be in a position to accept part of the order for pipe or other things that will be needed in the future. Let us not be in the position of having to import these items from Japan, the United Kingdom or Europe. Regina is not very many miles from Hudson Bay via the Churchill railroad, and it could be in a position to supply pipe to a great part of northern Canada. I can envisage that even a prairie industry would have a chance to compete on a local basis.

I have not kept track of my time, Mr. Speaker, but I presume you will call me to order in due course. I should like now to talk for a moment about scientific research in Canada. Scientific research is very important to the industrial development of Canada. I have suggested to the Minister of State for Science and Technology (Mr. Gillespie) that if we are to develop an industrial strategy we should make a selection of logical products for development here. I have also mentioned the steel industry with a pipeline industry as a satellite. The minister should make representations to the government in respect of things of this kind. It does not seem reasonable that we rush madly all over the place giving grants for research in all areas. Of necessity, much of the future development of Canada must be related to cold weather. The minister should be prepared to recommend expenditures in respect of obvious things, such as the development of rubber to withstand the cold, and steel that does not crystallize with frost. Surely a battery could be developed that would work better in cold weather. These are just examples of things which should be considered. I have experienced problems in respect of these items.

It would seem reasonable to spend money on the development of better products for use in cold weather. I have made this suggestion before and will continue to do so until such time as some obvious move is made in that direction. We need these things for our own use. A cat-truck has been developed in Canada and actually sold to Russia. The skidoo was developed in Quebec. This is another winter vehicle which has enjoyed great sales in the United States and has helped tremendously with our dollar surplus. These are only examples of things that can be developed, instead of spending a lot of money developing products warm weather countries have already developed. We should concentrate our research expenditure on problems which have not yet been solved. It seems reasonable that we should at least look at these problems.

June 13, 1972

Industrial strategy should be related to research efforts in the scientific field, because much of our development in the 20th century has depended on scientific research. If the government has not yet done so, it should establish a committee to study these problems and make firm recommendations as to those areas of manufacturing in this country on which we should concentrate our research. Logically we are not going to compete with countries which produce cotton cheaply. We should concentrate on those things which have a natural advantage here. A university professor in Saskatchewan said to me that we should spend more money on research in the area of wood products because of our natural source of supply. I suggest the government should look very carefully in this direction.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Walter Cyril Deakon

Liberal

Mr. Walter Deakon (High Park-Humber Valley):

Mr. Speaker, in taking part in this budget debate I should first like to congratulate the Minister of Finance (Mr. Turner) on the presentation of his first budget. I had the privilege of a close association with the minister during his tenure of office as Minister of Justice. During that time he did an outstanding job, had the respect of all and was held in high esteem by members of all parties on the Committee on Justice and Legal Affairs. I wish the minister well in his new responsibilities, and I am confident he will continue his good work in his new portfolio.

During the time allotted me I should like to express some of my views on various matters, most of which have been discussed in the House but many of which were brought to my attention by constituents in the riding of High Park-Humber Valley. Knowing the congenial nature of the hon. minister, I trust he will give at least some of them consideration.

I was indeed pleased that the new budget escalated the universal old age pension in step with the cost of living changes, retroactive to January 1, 1972, and also provided an increase in the guaranteed income supplement by $15 per month, thereby raising the old age security pension for those in need from $135 to $150 for single persons and from $255 to $285 for a married couple, also retroactive to January 1, 1972. These increases were long overdue, and although I still feel more can be done to alleviate the hardships suffered by some of our elderly citizens, nevertheless it is a step in the right direction. These increases, coupled with the special tax exemption for persons 65 and over as well as the increase in exemptions for the blind and the disabled to $1,000 from $650 retroactive to January 1, 1972, will indeed be welcomed by our senior citizens.

There are, however, some other situations to which I hope the minister will give consideration. One is the situation of a husband who is physically infirm and obtaining an old age pension while his younger wife is not and, because of the disability of the husband, the wife has to look after him so, is unable to work. Unless the couple have some savings, this situation creates undue hardship on the family unit and deserves further consideration. Consideration should also be given to those on old age pensions who have saved and skimped in their younger years, denying themselves some of the better things in life

The Budget-Mr. Deakon

in order to secure protection for their later years. Often they have purchased a home and have been paying constantly increasing realty taxes. I would recommend for them that at least that portion of realty taxes allotted for educational purposes, which is the greater part of the taxes, should be permitted as a deduction from their income tax return.

Since unemployment is still our number one issue, I was happy to note that in the budget we cut corporation taxes to 40 per cent for Canadian manufacturers and processors, to be effective January 1973. The tax rate is also reduced to 20 per cent from 25 per cent on the income of manufacturers and processors eligible for small business incentive, to be effective from January, 1973. These are indeed welcome measures, but in view of the fact its effective starting date is January, 1973, corporations that are tempted by the tax cuts to expand their operations will probably not do so this year, while still others may resist the temptation, preferring to use the tax cuts to increase the dividends to their shareholders. Steps should be taken by the government to ensure that these tax cuts are employed for the purposes for which they were intended, namely the creation of jobs. The government should apply the budget's provision for a two year writeoff on the total cost of machinery and equipment to 125 per cent or 140 per cent of the cost of new capital equipment, so firms will go out and purchase machinery and equipment and put people to work now.

The government's announced increase in public spending on housing is also a welcome measure and should assist, not only in providing accommodation but also in providing employment. It is regrettable that although the money supply in Canada has gone up by 78 per cent since 1970, and last year new funds grew by $16.5 billion, so the country appears to be prosperous, nevertheless we have failed to reduce significantly the ranks of the unemployed and appear to have created an illusion of economic revival.

In this budget, we have endeavoured to help the elderly citizens and lower income groups as well as large corporations and small businesses, but regrettably we have neglected that group which pays the bulk of the income and property taxes, the ones who are supporting the economy through their purchases of homes, cars and appliances, and yet are constantly neglected and ignored. I refer to the middle income group. They pay the high cost of the educational system and, in essence, subsidize the education of the children of the poor and wealthy alike. However, their children do not qualify for student loans or grants. They work hard all their lives and subsidize those who will not work. They skimp and save to provide security in days of illness and retirement, and at the same time subsidize others who will not provide for themselves. They pay for the high cost of police supervision at demonstrations, rock festivals and for the protection of dignitaries, yet when they get into trouble with the law they receive no legal aid but have to pay their own lawyer's fees. Indeed, in some cases their opponents in court are represented by legal aid lawyers whose fees they are paying. It is this group which has been ignored too long by all levels of government, and it is they who are now entitled to serious consideration. Even when nations compete in offering tax breaks to business, the middle income

June 13, 1972

The Budget-Mr. Deakon

taxpayer gets it in the neck. The less you collect from corporations because of these tax breaks, the more you are going to take directly from this group.

I recommend that the minister seriously consider increasing the basic tax exemptions to $2,000 for single persons and $3,850 for married couples. I would also recommend that realty taxes up to $750 be deductible from income tax, together with interest paid on mortgage loans. In essence, this is double taxation and is repressive. In the case of interest on mortgage loans, the tax system is ridiculous. If I sell my home and, I am unable to obtain the full sale price in cash so take back a mortgage, I am required to declare all interest which I obtain on the mortgage as income. However, if I purchase a home to provide accommodation for myself and my family and give back a mortgage, I am not entitled to deduct the interest paid on that mortgage as an expense. I submit that these further tax concessions, by placing more funds in the hands of the consumer, would be an added stimulus to the economy.

I am glad to learn that our government, unlike the government of the United States, encourages the awareness of ethnic backgrounds. I trust that this is only a secondary aim, and that the main aim is to make us all good Canadians. I trust that our policy on multiculturism is indeed a genuine one and will not create national ghettos in this country which would be examples of old world rigidities. Whatever may be our national origin it is in our best interest not to divide but rather to draw together, remaining proud of our country of origin but also striving toward an integrated, united nation in which the aspirations and values which bind us are far more important than the things that divide us.

In the field of immigration, it was indeed refreshing to note that the Minister of Manpower and Immigration (Mr. Mackasey) has decided to increase the number of special inquiry officers needed to process the backlog of immigration cases. Occurrences such as the recent suicide of a young Polish woman wishing to obtain landed immigrant status illustrate the genuine need for immigration reform. Immigration officials cannot be blamed for all these pitfalls, and I personally can state that in dealing with the large number of immigration cases brought to my attention I have had the fullest co-operation of the officials of the Immigration Department. The fault lies mainly with our immigration laws. In this regard I should like also to bring to the attention of the law societies of the various provinces the fact that numerous notaries-I am not referring to the Quebec situation here-and travel agents are holding themselves out as immigration experts and milking large sums of money from these unfortunate immigrants, while at the same time providing incorrect or inadequate advice. This practice must be stopped.

At this time I am also pleased to state that as a result of the Prime Minister's (Mr. Trudeau) visit to the U.S.S.R. last year, and of representations made during and after the visit, I have been successful in reuniting a great number of families whose members previously resided in countries such as Czechoslovakia, Poland, Lithuania, Estonia, Latvia and the Ukraine.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
?

Some hon. Members:

Hear, hear!

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Walter Cyril Deakon

Liberal

Mr. Deakon:

In some cases these families have been separated for more than 30 years. I am still continuing my efforts in this field, as well as carrying on negotiations for visitors' visas and the release of political prisoners presently imprisoned in the Soviet Union.

I submit further that amendments to the Citizenship Act are long overdue. There are presently gross injustices in the act preventing many residents in Canada who wish to obtain Canadian citizenship from obtaining it. The age and residence requirements should also be revised.

In view of the leading role of Canada at the environmental conference in Stockholm, may I recommend to the Minister of the Environment (Mr. Davis) that he take whatever measures are deemed necessary, in conjunction with the province of Ontario, to curtail and ultimately eliminate the pollution in the Humber River, which flows through the riding of High Park-Humber Valley into Lake Ontario, a navigable waterway.

In conclusion, Mr. Speaker, may I state that I really appreciated this opportunity to express some of my thoughts, and regardless of the criticisms, which I hope were constructive, I reiterate what I have said on many other occasions, that this land of ours, Canada, is the greatest country in the world. To realize and appreciate this one need only travel abroad, and on returning one will kiss the ground he walks on.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
SC

Charles-Arthur Gauthier

Social Credit

Mr. C. A. Gauthier (Roberval):

Mr. Speaker, first I should like to congratulate the minister for having remained in the House during the whole debate.

I wish to take the opportunity of this last day of the budget debate to deal with three matters which are very controversial in my riding and which remain one of the causes for the general displeasure showed by all of my constituents toward the administration of the present government.

I should like to call the government's attention, and in particular the minister's attention to the ever increasing problems in the area of unemployment insurance, particularly since November 1971.

When we had offices in every large community, we also had some problems, notably that of being unable to gather all the stamps of a worker who had had several jobs during the previous 104 weeks. Nevertheless, we had preserved the human contact, which is essential to any civilized society. But it seems that today, we have so much emphasized centralization that we have completely lost this human contact, and this is the most serious aspect of the problem.

They were able in my constituency to recover the services of two people who come to the offices in Dolbeau and Roberval for a few hours each week, but this is only window dressing. In fact, the problem is as serious as it ever was and it is the member of Parliament who has to act as a go-between in serious cases, which are numerous, since I have myself dealt with more than 1,000 cases since the beginning of this year. Fortunately, I get the co-operation of the whole staff in Chicoutimi, which makes every effort to give the best service possible.

June 13, 1972

But the final settlement does not rest with the staff in Chicoutimi. The Montreal office which has the computer covering the whole province of Quebec is responsible for 95 per cent of all the problems that we have to face presently. I have always held that it is dangerous to rely on one computer for issuing the cheques, without maintaining an emergency service against the possibility of machine breakdowns.

That is why we were not at all surprised to be given the same old reply: the electronic brain is out of order. Should it not be agreed that the change was made too quickly? And while the unemployed were waiting for their cheques weeks after weeks their anger fell on the officials of the Chicoutimi office, the only one left in the whole region. Indeed the local people had to get in touch with someone and this is the only office they can reach right now. I want the people to know at least where the trouble is and who are the persons really responsible for the ever-growing delays the unemployed have to put up with.

Mr. Speaker, I want to say to the government and to the minister in particular that when a worker has paid his unemployment insurance contribution, he is entitled to receive his insurance-and I do say "his insurance"- because it is not the government that pays this contribution; it has been withheld at the source without asking for any permission. This is the new democracy. And after generously helping itself, the government does not take the means to honour its contract. As a matter of fact, it resorts to any possible means to delay the payment.

If there are deficiencies in the way these benefits are paid, there are also some very serious ones in the acceptance of these same payments. How many hundreds of cases I have had to work out on this subject. The Unemployment Insurance Act is essentially quite good, but the regulations derived from it often cancel its effects and make them null and inefficient.

To prove my point, I shall give two or three examples. Take the case of work stoppage on account of illness. The act says that the insured is entitled to a maximum of 15 weeks of illness.

But is it known, Mr. Speaker, that there are regulations which determine for how long-two, three or ten weeks, depending on the type of operation or illness-a patient may receive benefits? But there is something which is even more serious: even a physicians's prescriptions are powerless against these regulations. Therefore, it is a civil servant who is neither a physician nor an orderly who will decide how many weeks an unemployed person should be ill.

I have seen many cases where even the intervention of the attending physician or specialist were of no avail. Is this situation normal in a civilized country which is sometimes considered a democracy? Really, this is the element which causes the most problems, namely, whether the decision of a civil servant, based on ridiculous regulations, should have more weight than the prescriptions of a physician.

The payment of benefits to retired workers is another litigious issue. They say that a worker will be entitled to benefits provided he refuses the Quebec pension. In any

The Budget-Mr. Gauthier

case, it is clearly specified in the act that if a man aged 65 voluntarily withdraws his Quebec pension plan he will not be entitled to receive at the same time any unemployment benefits. It is a glaring injustice which shows how deceitful a law can be. Note that this worker was obliged to contribute to the Quebec pension and the unemployment insurance plans; the premiums were nevertheless pocketed. In this field, governments are experts. To the worker compelled to abide by the two contracts they will say: we had you contribute to both plans, but we forgot to warn you that you were entitled to only one type of benefits. You have been had. I think it is the policy of any government to gull everybody for a while, but I am sure that they will not always be able to do so.

I shall mention now the case of those who leave their employment voluntarily; it is another contentious issue, Mr. Speaker. When a worker is not happy with his work or his salary, it often happens that he is forced to quit his job, and I do say "he is forced". I have seen really distressing cases; I pleaded them and I lost because the civil servants were right.

Some employers take advantage of that, particularly in springtime when jobs are rare, to have work done by employees under inhuman circumstances at excessively low salaries because they know that the workers cannot leave; if they do, they will no longer be entitled to unemployment insurance benefits or they will be deprived of them for four, five or six weeks depending upon the whim of the civil servant.

In my opinion, that section of the law is simply ridiculous because it gives every discretion to the employer over the employee and multiplies unfair practices. I simply ask the minister to consider the Unemployment Insurance Act and I am sure that he will move the amendments requested by the workers.

Furthermore, such a worker having been said to leave his job of his own free will, he is punished, as a child at school might be made to kneel in the corner, by being deprived of benefits for four, five or six weeks. He is not the one being punished, Mr. Speaker. His family will not get a penny for four, five or six weeks. Because the father could no longer endure his working conditions he had to leave his job and the whole family will have to suffer because he refused to put up with the bad treatment or poor working conditions the employer wanted to inflict upon him.

I wanted to bring this to the attention of hon. members, although I could give several other examples, but for lack of time I shall just limit my remarks. Their purpose was to call hon. members' attention to some shortcomings of the Unemployment Insurance Act.

I should like to deal briefly with another matter I hold dear because it concerns everyone in my riding. The hon. member for Fraser Valley East (Mr. Pringle) beat me to it by drawing it to the attention of the Minister of Finance yesterday. In fact, as reported in Hansard on June 12th, 1972, the hon. member said, and I quote:

However, I am disapppointed that adjustments were not announced which could correct some of the unfair anomalies relating to excise tax and sales tax. For example, tea, coffee and powdered drinks are exempt from federal sales tax. Ice cream cones, popsicles and the like are free of federal sales tax.

June 13, 1972

The Budget-Mr. Alkenbrack

Mr. Speaker, the tax on soft drinks originated simply from a wrong interpretation of the terms "food products". I find it strange that tea and coffee, for instance, as served in hotels, etc., as well as ice cream cones and powdered drinks should have been classified as food products, while soft drinks were not.

One could think the government was not well informed enough but, I feel the contrary to be true after having looked into the inquiries the government itself commissioned and having done some reading on the subject. I am referring to the 1966 report of the Carter Royal Commission of Inquiry on Taxation, from which I quote the following:

Consumption statistics reveal that expenditures on food are regressive because they represent a substantial proportion of the total expenditures of the lower income groups. If food were exempt from tax the most regressive element in a general sales tax would be eliminated. It is clear that the need for sales tax exemption of food is strong and that the need increases with family size. Moreover, a tax on food would create administrative difficulties where farmers sell produce directly to consumers-

We believe that, to avoid regressiveness, there should be no sales tax on food. Furthermore, we consider that, to avoid discrimination between food products and for ease of administration, the exemption contained in Schedule III to the Excise Tax Act should be extended to the remaining taxable food products, including margarine, confectionery products and soft drinks-

And in the Smith report, we read the following:

Using similar language to that found in the Carter report, the Smith report in Ontario also recommends that soft drinks be reclassified and exempted from the sales tax.

It states:

Ontario Committee on fiscal affairs, 1967-

We have found that, in order to avoid that the tax be a heavy burden for the low-income and large families, the exemption for food products must be maintained, in spite of the fact that, at the present time, this exemption reduces tax revenue by more than 40 per cent. But the present definition of food products is a complex one which contains many anomalies. For instance, buttered popcorn is exempted from the tax, but sugar-covered popcorn is not ... all food products for human consumption should be exempted. As we shall explain further, we see no serious inequality of treatment in the continuing taxation of prepared meals and alcoholic beverages. Accordingly, we favour exempting all edible food products, including marginal products such as candies, confectionery, soft drinks, vitamins, food supplements, diet supplements, saccharin, insulin, etc.

So, we can say that the government was perfectly well informed in this respect and I still wonder why it has not complied with numerous requests to consider soft drinks as ordinary food.

I do not think this changes a jot in the act because it is simply a matter of redefining what is a soft drink to classify it among ordinary food items.

Topic:   GOVERNMENT ORDERS
Subtopic:   THE BUDGET
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink

June 13, 1972