June 15, 1972

SC

Gilbert F. Rondeau

Social Credit

Mr. Rondeau:

Thank you, Mr. Speaker. I have great respect for you, but less for the hon. member for Lapointe, whose contributions to the proceedings of the House are so infrequent that they are practically inexistent.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY S.O. 58-ALLEGED FAILURE OF GOVERNMENT TO ESTABLISH PROFIT SHARING AND STOCK PURCHASE PROGRAMS
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IND

Lucien Lamoureux (Speaker of the House of Commons)

Independent

Mr. Speaker:

Order!

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY S.O. 58-ALLEGED FAILURE OF GOVERNMENT TO ESTABLISH PROFIT SHARING AND STOCK PURCHASE PROGRAMS
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LIB

Gilles Marceau

Liberal

Mr. Marceau:

Mr. Speaker, I do not think I need answer. My hon. friend has revealed his character by the language he used in the presence of other hon. members of parliament. I need not add anything else.

The government as a matter of principle favours a direct participation of the employees of Canadian corporations in the sharing of profits and in the co-ownership of the company where they work. The government has demonstrated its interest particularly with positive action in the field of income tax.

Indeed there are in the new and thoroughly revised Income Tax Act special provisions that recognize and even promote participation and co-ownership.

Of course it must be noted that these special arrangements must not privilege unduly those who contribute to these plans at the expense of other workers and that there should be no tax abuses.

As far as stock-options or profit sharing are concerned, the existing act provides that if a corporation agrees to sell or issue parts of its share capital to its employees at a discount, the employee must include this profit in his income.

The former income tax act provided a special method of calculating income tax on profits. While this method has been retained, it was amended, and I think this was done for the benefit of workers.

Other provisions in the tax legislation encourage the workers to become co-owners of the business concern, either the one where they are employed or others.

I might mention the 3 per cent deduction up to a $150 maximum and also the $500 deduction per child over 14 up to a maximum of $2,000, for child care.

But, Mr. Speaker, as the time allowed to me is almost up, I should like to conclude my remarks with these comments which seems to me to be more to the point.

The government's legislation on labour relations favours the principle whereby employees have the right to take part in the establishment of working conditions through their freely-chosen bargaining agents.

The legislation provides for a structure and a setting which should favour employer-employee relations, but does not try in any way to-for indeed it cannot-impose the terms and conditions under which employers and employees should live, nor can it try to determine what form they should take.

The present system provides the employees with the opportunity to share in the profits of the firm through

Employee Stock Purchasing

increased salaries and benefits. In addition to that, the parties are free to decide whether or not they want to negotiate formal agreements as to the sharing of profits or buying of shares.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY S.O. 58-ALLEGED FAILURE OF GOVERNMENT TO ESTABLISH PROFIT SHARING AND STOCK PURCHASE PROGRAMS
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IND

Lucien Lamoureux (Speaker of the House of Commons)

Independent

Mr. Speaker:

Order. I regret to have to interrupt the hon. member, but his time has expired.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY S.O. 58-ALLEGED FAILURE OF GOVERNMENT TO ESTABLISH PROFIT SHARING AND STOCK PURCHASE PROGRAMS
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SC

Léonel Beaudoin

Social Credit

Mr. Leonel Beaudoin (Richmond):

Mr. Speaker, I am pleased to rise and congratulate my colleague, the hon. member for Kamouraska (Mr. Dionne) on the motion he introduced this afternoon, which reads as follows:

That this House deplores the fact that the Government has not adopted the appropriate measures for involving workers in Canadian firms through profit-sharing and stock purchase programs as a means of promoting social stability, reinforcing our country's economy and ensuring greater co-operation between capital and labour.

My Creditiste colleagues, as well as many hon. members of other parties, have put forward arguments in favour of profit-sharing, co-management and co-ownership by workers through stock purchase programs.

Does this mean that these proposals are complete and offer a solution to the present economic problems? Does this mean that the Creditiste philosophy is now at a standstill? No, Mr. Speaker. The Social Credit party is beyond this kind of participation, this even more frightening kind of concentration of the whole economy in the hands of the present banking system.

For instance, if you analyze the whole Kelso program you find that the workers would obtain the money to buy corporate stock merely by borrowing this money from banks. The banks would be glad to oblige because those loans would be guaranteed by a State "super bank" or even by the country itself. They would have nothing to lose and everything to gain since they would control almost all the country's corporations by keeping as collateral the stock bought by the workers until they can get them back with interest.

Another mistake in the Kelso program is that it suggests that it would increase the purchasing power.

We know that increasing production does not increase the purchasing power for a given production period. Consequently, stockholding workers investing money borrowed from banks would not spend this money to buy production but rather to increase it by investing into their corporation. With this increased production the purchasing power would be increasingly inadequate to buy the goods produced.

On the other hand, let us suppose that 80 million Americans each get $4,000 from banks to buy corporate stock. This would mean that additional credits amounting to $320 billion would be suddenly injected into the American economy without price control. What a disaster if protective measures as proposed by the Social Credit party were not implemented in the form of compensated discount or by decreased production costs.

Every reform presently advocated either to fight unemployment or inflation, or to promote regional development, or to reform tax legislation or to enable the workers to share in the profit and in the decision-making process

Employee Stock Purchasing

of industry, in short, every reform advocated in various sectors will only be a stopgap of little effect if a rational monetary reform is not undertaken concurrently.

Everybody agrees that a monetary reform is needed, and among others Mr. Claude Lemelin who wrote in Le Devoir of May 10 last, the following and I quote:

How to avoid the recurrence of such crisis? By simply bringing about and as soon as possible a reform of the monetary system which was established a quarter of a century ago. The very minor role played by the United States in the settlement of the crisis where the dollar was yet the main currency affected, marks the end of the American monetary hegemony; it would be desirable for international monetary institutions to reflect this new reality. The terms of the Bretton Woods agreement regulating exchange rates and their fluctuations should also be made more flexible. This is what the International Monetary Fund, while the crisis abated for a year, should have started to do as early as last September when the General Assembly convened in Copenhagen. This is what the International Monetary Fund was adamant to do either through inertia or conservatism. This is why the Washington institution is now being shortcircuited by other monetary agencies.

I would like now to quote from Fortune magazine which is not a Creditiste publication. In its issue of December 1971, there is an article by a Lawrence A. Mayer entitled and I quote:

A world monetary reform: a system to be reviewed.

Speaking more specifically about special drawing rights, the writer replies to the following question:

How does the International Monetary Fund create special drawing rights?

Reply: By a stroke of the pen ... special drawing rights are entered in the books as in a bank booklet. But SDR are not money but they are used by central banks only, not by the public.

Question: How do central banks use them?

Answer: At present, for international payments between banks, but special drawing rights never leave the International Monetary Fund. The Fund only makes transfers from the accountvsf one country to that of another country. There is, however, a great deal of discussion going on at present about expanding and changing the role of special drawing rights, which could, for instance, absorb the dollar surpluses which exist in certain countries, so that SDRs would practically replace the dollar as reserve currency.

The author then specifies that special drawing rights are not based on gold and cannot be converted into gold. Concerning gold, the following question is asked:

Question: Thus, gold will still remain the basis of the system?

Answer: Not necessarily. Theoretically, anything can be used- for instance, any other commodity or, as has been suggested by some economists, a group of commodities or a group of national currencies.

This takes us back to the proposals of the Social Credit Party according to which the present system leads to ruin, as consumers never have enough money to buy the production offered, and production never puts enough money in the hands of consumers to equal the sum of prices, considering that manufacturers have to make profits in order to invest in businesses.

But as the founder of the Social Credit Party explains, just because the profit system leads to unacceptable consequences is no valid reason for trying to abolish profits altogether. We must however seek a system which will allow for the entrepreneur or capitalist to be rewarded and which will at the same time ensure better distribution of the wealth produced.

Appearing before the MacMillan Commission in Great Britain, Mr. Douglas was saying about the effects of savings on the economy, and I quote:

The investment of funds saved means that the same amount of money is bound to reappear in a new price aggregate, so that whenever a given amount saved is re-invested, a new price aggravate is created without a corresponding change in the purchasing power.

This is why we must find new methods of financing our business and production, because the means of financing which are presently recognized and generally accepted contribute to reduce the consumers' purchasing power and to increase their disatisfaction.

By the way, workers have come to think like members Creditistes in this respect.

In Volume 5 of the labour relations task force, prepared in 1968 Mr. Jack Chernick, from the University of New Brunswick, New Jersey, provides interesting explanations on the attitudes of labour as regards profit sharing.

First of all, about the point of view of the workers of the United States automobile industry, he said that they want the same principles applying to General Motors shareholders and officials to apply also to workers. The members of the executive of the company first of all pay themselves a basic salary and put aside the amounts to be distributed as dividends to shareholders. If profits exceed a certain yield, they receive, over and above their basic salary, a bonus proportional to the surplus profits. Sometimes, when business is really good, they will decide to distribute an extra dividend to shareholders. Consequently, the automobile workers have asked the following question:

Any reason why this calculation should not apply to employees as it does to shareholders and administrators of G.M.? Why should the workers not receive, over and above their basic earnings and other marginal benefits obtained at the bargaining table, part of such profits that their work allowed to be made?

Such questions are raised not only in the United States but in Canada. In Le Travail, which is the voice of the CNTU, one can read the following comments on the discussions held during the 1967 convention:

Everyone knows that an undertaking or an industry pays salaries to its employees and gives out dividends to its shareholders. But there is a third portion of the profits that goes neither to the first nor to the second group. That portion is simply reinvested in the company. That is what we call self-financing. The question is, should that third portion be the property of shareholders only? Should not the workers receive a part of it? That question, which is greatly discussed among non-communist French trade-unionists is most important because it opens the possibility of workers sharing in the company's decisions in the economic field.

So the Confederation of National Trade Unions wonders whether workers should not be entitled to a portion of the profits that are reinvested in undertakings. In other words, the CNTU wonders whether the enrichment of an undertaking, whether the undertaking that has become able to increase its production, to expand, to produce more, belongs only to the holders of the initial capital. The CNTU wonders whether employees are not entitled to a share of that enrichment of the undertaking. Social Credit

June 15, 1972

says: Yes, workers are entitled to share in the enrichment ol the undertaking.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY S.O. 58-ALLEGED FAILURE OF GOVERNMENT TO ESTABLISH PROFIT SHARING AND STOCK PURCHASE PROGRAMS
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LIB

Marcel Lessard (Parliamentary Secretary to the Minister of Agriculture)

Liberal

Mr. Marcel Lessard (Parliamentary Secretary to Minister ol Agriculture):

Mr. Speaker, in taking part in this debate, I should like to contribute the experience of a man who has spent 25 years of his life in the labour class, as a factory employee, who has been closely involved in several discussions, experiences and conflicts, but who still has known a good many satisfactions.

The hon. member for Kamouraska (Mr. Dionne), in his motion, is to some extent blaming this government for not having taken steps likely to have labour concerned with participation in business management.

I would like to recall, Mr. Speaker, a few experiences that I have lived in my community, a rather well-developped one-tied in with the aluminum industry- where, as many already know, pay-checks are quite fat and trade-unionism quite advanced. In recent years, the workers have tried various experiences aimed at achieving what the hon. member is wishing for and that is social peace and co-operation between capital and labour.

Mr. Speaker, I should like to say incidentally that such co-operation of capital and labour, more or less questioned here, does exist. It is too easily forgotten that there are over 6 million workers in Canada and that collective agreements are being signed every day, attracting no attention precisely because they are entered into amicably, as a result of properly planned and properly implemented co-operation between groups in several sectors.

To be sure, conflicts attract more attention than anything else. This is normal. People thus tend to think that everything is going badly, that management and labour no longer agree, and that chaos prevails.

Such disagreements, of course, do occur for some groups of workers. But I must say that co-operation between capital and labour does exist in most cases, which is fortunate. It would of course be desirable that there should be 100 percent co-operation, which I personally hope will come about. But things being what they are, and man being eternally dissatisfied with himself, it is not likely that a system can one day be devised in which everything would fall perfectly into its proper place. This indeed would be too good to be true, Mr. Speaker, so that we would have to assume that we are no longer among the living.

Do Canadian workers really want to take part in the operation, the administration and the ownership of business?

I should like to mention here a number of examples I have experienced personally. Some years ago, Alcan and Price Company Limited had set a program whereby employees could buy share in these companies at a very low price.

I have personally bought shares of these companies through salary deductions. This was a scheme the companies had conceived to give their employees the possibility of buying shares at a very reasonable price. Actually, we could avail ourselves of a reduction of 15 per cent.

Employee Stock Purchasing

What was happening, Mr. Speaker? It gives an idea of the disposition that can prevail amongst an unfortunately too high percentage of workers. Most of them refused to jump at the offer, even though it was most obvious that as soon as one bought the shares one made a 15 per cent profit. All that had to be done was to buy the shares, pay for them, and upon delivery run to the bank, or to any investment dealer and sell them at a 15 per cent profit. Three quarters of the workers refused to buy shares in spite of the incentive to encourage them to do so. Not only did they refuse to purchase them, but I saw some workers relinquishing their privilege to the very ones they were regularly criticizing, that is the rich man, the influencial man in the community, the lawyer, the doctor, in short, the well-to-do. The workers were handing the certificates over to these persons enabling them to acquire share of the Aluminium Company of Canada Limited, up to 10 per cent of their wages. The professionals in the community thus made considerable profits in a relatively short period of time.

As one can see, the workers are not necessarily willing to participate in the management and ownership of the business because they fear that by being a participant, they might loose some of their freedom, the freedom to criticize the firm. It is unfortunate, but only time will enable us to make improvements in this field.

Today the worker, at least in my social class, tends to enjoy life and the maximum confort he can immediately obtain. Very often workers do not think of saving some money for a later opportunity and that for various reasons, Mr. Speaker. First, there is inflation. Today, the worker who saves $1 deprives himself of the goods he could purchase with this $1, while in 5 years time inflation will have eroded the purchasing power of his dollar and perhaps he will only be able to purchase 75 per cent of the merchandise he could have procured originally.

This is why the worker whose income is limited does not deny himself anything today in order to save because he is afraid that this saving will turn out to be a bad investment. Of course, he could invest this money and get a return that would compensate him for the loss of purchasing power. But here again-and I repeat a suggestion I have already made-the only thing in my opinion which would encourage the worker to save would be for the government to set a tax free amount of up to $500 in earned interest and dividends.

This could mean a total saving of between $5,000 and $10,000 depending on the rate of dividend or interest paid by the company where his funds are invested. This would encourage Canadians to salt away at least $10,000 and I think that a Canadian who has saved and invested that much is a more responsible citizen who demands less from the government as he knows very well that it is he who will have to foot the bill if he demands more.

I have already made this suggestion and I would like very much to see it implemented.

Mr. Speaker, the Minister of Finance (Mr. Turner), obviously encourages workers to economize. Of course, when I receive dividends on shares of Canadian corporations, there is a 20 per cent tax reduction on such dividends. This is some incentive. It may not be enough, but should we go much further than this? This is a good question.

June 15, 1972

Employee Stock Purchasing

Have any serious proposals been made in order to ensure that workers have a greater share in the management and profits of businesses?

My colleague, the hon. member for Lapointe (Mr. Mar-ceau) said earlier that, up to a point, workers share in the profits of companies. The company which makes profits is in a position to pay higher salaries and to offer better fringe benefits. Thus workers share in profits insofar as they negotiate contract settlements and get benefits when the company can afford for them.

Unfortunately, Mr. Speaker, this is not true of all companies, and I know of several which, because of their low profits, cannot pay the very high salaries which some others pay to their employees.

It was reported in one of today's newspapers that workers in the Seven Islands area are, on the average, the best paid in the country, and we are glad that this is so. But it does not necessarily mean that those people enjoy a higher standard of living, because you have to take into account the high cost of living at Seven Islands, where everything has to be brought in, where practically nothing is produced and where there are great distances to be covered.

Before concluding my remarks I would like to quote some examples which have been lived, some attempts which have been made.

The government is constantly asked to take action. The Quebec government did so a few years ago. It created the General Investment Corporation in order to allow Quebec to control its own economy, and to give the people a chance to participate to a greater extent in industry, by enabling workers to become owners of their industries. We know that after five, six or seven years, the General Investment Corporation has practically ended up as a failure.

Is this attributable to bad administration or to errors by those who headed this business? Possibly.

Is it also due to our lack of business experience or to the lack of industrial knowledge of a certain part of the Quebec population? This is also possible.

I think that the establishment and evolution of an industrial approach is something which takes many years to realize. We certainly will have to wait for several years to achieve this goal, as has been the case in other countries such as England, Germany, or even in Ontario where industry has been established for a longer period than in Quebec.

Lately, experiments have been carried out in the Saguenay region. I am referring for instance to the Couture concern, a casting and machine shop, whose workers decided to acquire the plant by setting up a kind of co-operative at a time when the management was in some trouble. The outfit seem to operate well for the time being, and I only hope that this experiment will be conclusive, that it will be pursued and prove successful, for I believe that it is a kind of experiment which must be tried.

In conclusion, I should like to mention that through its legislation, the government has allowed many such experiments to materialize. One has only to think about

the Department of Regional Economic Expansion headed by the hon. member for Langelier (Mr. Marehand), and which now provides incentives to small and average concerns, thus allowing many to start, many others to expand, either in Quebec, in the Maritimes or elsewhere in Canada.

These are concrete incentives which enable workers to start businesses, to own, and manage them, to work there and make profits.

I think that governments cannot solve all problems. A government is a group of men with all their good and bad points, without inborn knowledge, and who cannot run everything. I believe that it is from the people themselves that most solutions must come, and workers, in Quebec or elsewhere, can become the owners of an increasing number of firms as long as they are willing to practice self-discipline, save, invest and get assistance from the various levels of government.

If we are really to find again the social balance some claim we have lost-although I do not agree that the disorder, is as serious as some claim-I feel that the only way to do so is through fundamental participation to the creation of jobs, the setting up of enterprises. We will then have greater social participation and better distribution of the benefits that can be assured by the sound evolution of our economy.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY S.O. 58-ALLEGED FAILURE OF GOVERNMENT TO ESTABLISH PROFIT SHARING AND STOCK PURCHASE PROGRAMS
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SC

Gérard Laprise

Social Credit

Mr. Gerard Laprise (Abitibi):

Mr. Speaker, I think that we have held today one of the most interesting debates judging by the full significance of the speeches delivered on both sides of this House. I would say that most speakers have readily approved the motion put by the hon. member for Kamouraska (Mr. Dionne), except for a few doubts raised here and there by some members.

As I will probably be the last member to speak today I would like to make a review of those speeches.

The representative of the New Democratic Party has shown that he does not know much about the principle of workers holding shares in a business. He feels that the worker's only safeguard lies in the employer state or the master state. He does not realize that the worker is as intelligent as the industrialist or any politician or government official in a socialist or totalitarian government.

According to the spokesman for the New Democratic Party, the only solution would be a socialist government vested with full authority to control industry throughout the country.

Mr. Speaker, I do not believe Canadians are prepared to accept such a system in their country. Some government corporations, such as the Canadian National and many others which could be enumerated, come up, at the end of each fiscal year, with balance sheets showing deficits instead of profits.

Similar corporations, privately owned, such as the Canadian Pacific, for instance, involved in transport like the Canadian National, produce each year a balance sheet showing profits.

Many such examples could be given, demonstrating that share-holders and workers in private enterprise in Canada show much more initiative and have participated in the success of each business.

June 15, 1972

If instead of fighting so often in a void labour unions had fought with the goal of obtaining shares for labour in businesses, we should not now be facing the problem of inflation and most workers would be share-holders, instead of proletarians.

Mr. Speaker, the hon. Minister of Labour (Mr. O'Connell) is concerned about labour-management negotiations. Even if workers became share-holders, I am convinced that they would still need to group themselves in unions in order to be represented at negotiations, which would remain quite as necessary as they are now, but would be much more effective. Such bargaining would provide working standards and the employee would practically be his own employer since he would be sharing in profits, thus becoming much more interested in the undertaking where he works.

The minister is also wondering how it would be possible to establish standards for holidays, employment security and retirement pensions.

Mr. Speaker, I do not think there is much difference between the stock purchasing system and the existing system.

I believe the Minister of Labour (Mr. O'Connell) is much more aware of the labour problems than he let on this afternoon. The minister fears also for the public sector. He sees quite clearly that in the private enterprise, workers will get a better deal through higher wages and greater business returns. He sees that workers in the private sector will be receiving higher incomes than public servants. Therefore, the minister seems to fear that it will be difficult for the public service to find the needed staff to make up the establishment.

Mr. Speaker, should the worker stock purchasing program take hold, we would see less competition for public service jobs and political patronage would have much less grasp over these people. The governments will only have to adapt themselves to the private enterprise instead of, as is the case today, the private enterprise having to adapt to the public service.

The minister also fears for some firms that show an adverse balance and are facing bankruptcy. The fact that the worker will be able to share in the firm's profits, will be a profitable incentive, and even the firm will benefit from it.

I am thinking of some mining industries, and in particular the NORMETAL mine, where miners receive a salary on an hourly basis and, in addition, a bonus every two weeks for the work done, according to the production volume. So, if production has increased, the bonus is higher. Miners are thus encouraged to produce more, and if a miner lags behind, it is not the foreman or the boss who will warn him, but the other miners.

In my opinion, Mr. Speaker, under a system of stock purchase by workers, the problems of unprofitable businesses would be negligible.

Today, because of the pressure exerted by companies, the government grants many tax exemptions which benefit to shareholders. The workers have only a slightly better chance of getting a job and paying taxes to the

Employee Stock Purchasing

government to compensate for losses incurred because of tax exemptions granted to these companies. Under a stock purchase program for workers, the latter would receive their share of the tax exemptions.

Moreover, the grants awarded by the Department of Regional Economic Expansion would also benefit the workers. Today, most undertakings depend on "social welfare" grants from the Department of Regional Economic Expansion. Still, who is benefiting? The undertakings! The worker gets nothing. All he can do is work in order to pay his taxes and replenish the consolidated revenue fund of Canada so that other grants may be awarded to corporations which will employ other workers.

In other words, this means that you work now and pay later.

Another interesting example is forest resources development. If workers participated in this system under a stock-purchase plan, lumbermen could buy free of sales taxes the tools that they need in their work such as chainsaws, steel-cap shoes, security hats, and what have you)

Today, whereas the contractor is entitled to tax exemptions, the worker must pay federal and provincial taxes on his tools.

Miners, for instance, could become important and valuable shareholders of their companies. Most of those who work for 15, 20 or 25 years in the same mine or for the same company lose their health in the process. And when they retire, they have practically no savings to speak of because they have had too much to pay in taxes. As a result, these workers are very often dependant on the public.

On the contrary, under a capital sharing system, retired miners would at least have shares to sell at a profit, and those moving into ear y retirement would have savings on which to live pending the receipt of their first Old Age Security Pension cheque.

Generally speaking, people say that capital is some sort of accumulated work. However, since no one can do everything, some people work while others accumulate. The Social Credit Party wants all workers to become capitalists so that they may own something.

It is with this in mind that the hon. member for Kamou-raska introduced this motion we have before us today, and we urge the government and the House to examine it carefully.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY S.O. 58-ALLEGED FAILURE OF GOVERNMENT TO ESTABLISH PROFIT SHARING AND STOCK PURCHASE PROGRAMS
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SC

Romuald Rodrigue

Social Credit

Mr. Romuald Rodrigue (Beauce):

Mr. Speaker, I wish to sincerely congratulate the hon. member for Kamouraska (Mr. Dionne) for the motion which he introduced and which reads as follows:

That this House deplores the fact that the Government has not adopted the appropriate measures for involving workers in Canadian firms through profit-sharing and stock purchase programs as a means of promoting social stability, reinforcing our country's economy and ensuring greater co-operation between capital and labour.

A quick look at statistics, Mr. Speaker, would show that the business concerns in which profit sharing and co-management prevail are few and far between. Even if the results obtained to this day are not very conclusive, I think that we should encourage both management and

June 15, 1972

Employee Stock Purchasing

labour to work toward the establishment of profit sharing and co-management programs.

I think that it would be appropriate to make a thorough study of this formula and to make every effort to find mechanisms which would make it of simple and easy application as well as interesting for both parties.

The Canadian government has never, paid much attention or given much importance to profit sharing plans. As we all know, the Department of Labour, when making its yearly investigations on the working conditions prevailing throughout the country, has at one time gathered and published some information on profit sharing plans, but it has given up this practice since 1954.

For his part, the Minister of Finance has not encouraged enough this form of participation, judging by the new Income Tax Act.

In the present Income Tax Act passed last December, Division D dealing with deferred and other special income arrangements is not very helpful to the members of these sharing plans, except for that subsection 5 of section 144 allows an employer to deduct from his income the amounts paid to a trustee. On the other hand, the capital gains of such a trustee and the amounts received by the beneficiaries from the trustee, if they derive from capital gains from the said trustee, are taxable. Moreover, the amounts that a worker withdraws under a supplementary unemployment benefit plan, are regarded as income and are therefore taxable, according to subsection 3 of section 145 of the Income Tax Act.

Pension funds to which employers contribute part of their profits are also a form of profit sharing known as deferred profit sharing.

The present legislation does not do much to promote such a policy, particularly when profit sharing plans are set up in favour of workers who are also shareholders. The tax reform has squeezed those profit sharing plans. It is known that most businesses which set up such plans are mainly family businesses and that often members of the same family sit on board of directors of the company.

In his analysis of the white paper on taxation which was published under the title "The Benson Iceberg", Mr. I. H. Asper specifies that the Department of National Revenue, more than a year before the tabling of the white paper, had refused to accept the registration of those pension schemes designed for the benefit of employees who are also shareholders in the business.

As a consequence, these business are denied the tax rebates granted to businesses having pension funds. Would the same rules apply in the case of profit sharing by all the employees? This is an interesting question to which the minister should give an answer. Otherwise, it should be said that the government policy is to treat profit sharing plans unfairly.

Before the tax reform, businesses which had employee profit sharing plans were penalized by being denied tax rebates granted to other businesses.

I am quoting the following from Mr. Asper:

The new legislation is maintaining this discrimination. Furthermore, it is forbidding trustees of those pension funds to invest funds in shares, bonds or debentures of the employer's businesses.

In conclusion, Mr. Asper says:

In many cases, this discriminatory step will deprive small businesses from an important source of liquidities.

In Canada, there is no organized movement to promote the association of capital and labour. There are, of course, a limited number of experiences of associations of some kind or other, that are more or less authentic, but the phenomenon is not widespread; it is almost unheard of. The vast majority of Canadian businesses are of the traditional capitalistic type and working for wages is the almost universal system across Canada.

Profit-sharing is the only form of association that enjoys even a minimum of popularity in Canada.

One of the most dependable sources of information is doubtless the Council of Profit Sharing Industries. This organization has, amongst its Canadian members, a firm of professional advisers who specialize in giving technical assistance to those who wish to set up a profit-sharing plan.

The same organization is much more specific in its statistics and closely sticks to reality, when referring to profit-sharing experiences with deferred distribution.

In its brief submitted on March 9 1956 to the Royal Commission on Canada's Economic Prospects, it Suggests that there are in the country 150 such cases at the most, among which about a hundred only are recognized by the federal government for income tax purposes as pension funds. The other fifty come under section 79 of the Income Tax Act. The Council bitterly points out that the hundred cases recognized by the government only represent 7 or 8 per cent of the aggregate pension schemes recognized by the Canadian government, while in the United States that percentage reaches 35 per cent, that is about 8,000 out of 28,000 as of December 31, 1955.

It is obvious, Mr. Speaker, that the present economy could not be converted into a sharing economy without major changes in our way of seeing things and expressing them in economic terms.

In the face of powerful industrial monopolies, pursuing the accumulation of gains much more than the common good, we may certainly wonder whether they are really exercising rights of ownership.

Socialists seize this opportunity to call for nationalization of major firms, as if the fact of replacing the industrial monopoly with a state monopoly would correct the monopolistic nature of the enterprise. Will the worker, depersonalized and having become number 253 employed by Capital-Anonymous Company, cease to be No. 253 punching the same clock, doing the same work, when the shares have been purchased by the state? Taxpayers will have paid for this purchase and will not draw one cent in dividends.

Something else is needed.

In the magazine Jeune Patron of May 1951, Mr. Alexandre Dubois, an employer himself, son, grandson and great-grandson of an employer, wrote an article that

June 15, 1972

many would find bold, under the heading "Moving ahead of the capitalist undertaking." He begins with this revolutionary sentence: "Enterprise is not ownership."

He explains:

In our opinion enterprise is not an object which can be owned. Man can own things. Enterprise is not a thing, it is an act. To undertake is to act.

-An enterprise is not a property, that is, it does not belong to anybody but is common to many once it is launched into the economy. Everyone is free to undertake, but he is no longer the master of the enterprise he has created when others have participated in it through their labour, their capital, their payments for services rendered-

So Mr. Dubois sees in the enterprise far more than mere investment. Capital investment does not confer sovereign and exclusive rights, especially not in the case of an expanded enterprise which has become a giant, through self-financing and reinvesting of the benefits included in its prices and taken from the public."

If financial interests were a true representation of reality, if a social organization were to automatically issue new credit to finance any new industry, it would not be necessary to put an end to the rule of capital and this evil would not exist then.

Money-capital would arise as technicians and skilled workers would undertake and carry on the development of raw materials and natural resources of this country. And this capital would be controlled by those who thus create a new wealth.

The present method used to finance a new industry or expand an existing business, entails two undesirable results: first of all, it alters the balance between prices and the purchasing power, since it adds to the cost of production the cost of an increasing production capacity; also, it enables whoever owns capital to increase his assets at the expense of consumers who have to pay for it. So you have, on the one hand, always a fewer owners with bigger and bigger properties and, on the other hand, an increasing number of proletarians who can live only with the permission and under the thumb of the former.

This is an inhuman lot that would be easy to change gradually but quickly by applying a financial system in accordance with facts.

Now is the time to apply the principles of sound finance. This is a development, therefore new wealth. If we wish to finance it through money already in circulation, we prevent money from buying products already on the market.

Any new production must be financed through new credits just as any destruction of wealth should lead to a corresponding cancellation of credit.

Therefore, it is the national credit agency which grants money according to the development of the country.

If finance is considered as an accounting of facts, there is no further financial obstacle to physically possible achievements. It is also easy to have finance as a servant of the workers as much as of the first shareholders.

Therefore, the workers could gradually become coowners of the business which is their employer. The more the business would expand, the quicker this accessibility

Proceedings on Adjournment Motion

would be. Instead of increasing the number of proletarians, the growing industries would free the worker from his proletarian status.

Co-operative management of big industry would be taken over from the "money men" without trouble, confiscation or nationalization.

Naturally, none of this will be possible until such time as the necessary changes have been made in our present financial system.

At the present time, finance has no close or constant link with reality. Wealth is created without money being created. Wealth disappears without money disappearing. Some people create wealth: others create money and appropriate it for themselves.

As long as that confusion reigns, it will be useless to seek logical solutions anywhere, for finance acts as the policy everywhere.

One change is imperative: we must set aside the present method of putting out money and recalling money and credit; let the government take over the control of the creation of money and credit, according to the proposals of the Social Credit Party of Canada.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY S.O. 58-ALLEGED FAILURE OF GOVERNMENT TO ESTABLISH PROFIT SHARING AND STOCK PURCHASE PROGRAMS
Permalink
LIB

Gérald Laniel (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Laniel):

Proceedings on the motion before the House have expired, pursuant to Standing Order 58 (11).

Does the House agree that we call it ten o'clock?

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY S.O. 58-ALLEGED FAILURE OF GOVERNMENT TO ESTABLISH PROFIT SHARING AND STOCK PURCHASE PROGRAMS
Permalink
?

Some hon. Members:

Agreed.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY S.O. 58-ALLEGED FAILURE OF GOVERNMENT TO ESTABLISH PROFIT SHARING AND STOCK PURCHASE PROGRAMS
Permalink

A motion to adjourn the House under Standing Order 40 deemed to have been moved.


LIB

Stanley Haidasz

Liberal

Mr. Stanley Haidasz (Parkdale):

Mr. Speaker, I am sure we were all shocked to hear about the tragic death by suicide on June 6, 1972, of an unfortunate 35-year old Polish woman and mother, Alicia Wiercioch, who was under a deportation order, having lost her appeal before the Immigration Appeal Board on March 15 last.

As is the case with so many other people, she was so favourably impressed by the quality of life in this country that she decided to take the necessary steps to obtain landed-immigrant status. But various unfortunate circumstances and misunderstandings finally led to her despair and, eventually, to an untimely and tragic death. What a sad end in Canada to this visitor who only four years ago was filled with so much hope for a new and better life! This tragedy, as well as other near-tragedies and hardships of people who have to deal with our immigration and deportation laws and regulations, has finally given a sense of urgency and gravity to a review of the laws and regulations now being carried out by the department.

June 15, 1972

Proceedings on Adjournment Motion

It is regrettable that the House did not grant me, on June 7, unanimous consent to move my motion as follows:

That the House of Commons Standing Committee on Labour, Manpower, and Immigration investigate the circumstances of the suicide of Alicia Wiercioch, who was ordered deported by the Immigration Appeal Board, and that the committee review the Immigration Appeal Board Act and related federal legislation and regulations and consider amendments to these and other acts as necessary.

From newspaper articles in the past few days it should be clear that the many statements, allegations and accusations that have been reported call for an investigation of this case. I join many of my colleagues in this House and members of the public who have, in their statements in the past week, called for changes in the laws and regulations regarding deportation and immigration matters. It is not right to enforce impractical and harsh laws or regulations. I believe that justice should be tempered with mercy and compassion, and these should guide our decisions. There are often complex circumstances in the life of a human being, and these should be taken into account, especially by those in positions of responsibility.

In view of the tragic death of Alicia Wiercioch and the many complaints from potential immigrants and their sponsors, and especially in view of the hardship resulting from long delays before hearings are brought before the Immigration Appeal Board, I believe the government should give immediate attention to making the necessary changes in proposing to Parliament appropriate amendments to our laws governing immigration and deportation so that all these hardships will be removed.

I would also like to stress the need and importance of improved communication between government agencies and the public. Where indicated, adequate interpretation and counselling services should be clearly offered and readily provided. Instructions printed in many languages in information bulletins such as, for example, in the ethnic press, would greatly assist in providing better communication. I believe that this House and the nation are impatiently awaiting prompt action by the government in matters of immigration and deportation regulations.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   IMMIGRATION-SUICIDE OF ALICIA WIERCIOCH- REQUEST FOR INVESTIGATION
Permalink
LIB

Jack Sydney George (Bud) Cullen (Parliamentary Secretary to the Minister of Energy, Mines and Resources)

Liberal

Mr. Jack Cullen (Parliamentary Secretary to Minister of Energy, Mines and Resources):

Mr. Speaker, I compliment the hon. member for the manner in which he has pursued this matter from the outset and used all the channels open to him. As you are aware, the Minister of Manpower and Immigration (Mr. Mackasey) earlier today spoke on this subject in an effort to clear the record.

In case some members were not present at the time, I will try, in the limited time available to me, to set out the facts of this tragic case. The straight, unembellished facts are that Mrs. Wiercioch came to Canada on August 19, 1968, for a six-month visit with a distant relative. Shortly after arrival, on September 30, 1968, she applied for permanent landing.

At the time of this application, as is customary, she was asked to sign and did acknowledge in writing her understanding that she could not work in Canada without the written authorization of an immigration officer. When first interviewed on October 10, 1968, Mrs. Wiercioch

informed the officials* that her husband and two children would be able to go for a trip to one of the European countries where they would apply for political asylum. She stated that her husband had given permission for her to come to Canada and he wanted to join her. She was therefore supplied with immigration application forms for forwarding to and completion by her husband. In early January, 1969, Mrs. Wiercioch brought in the completed forms and her husband's employment reference as an engineer.

At this stage the matter of the examination of the family overseas to determine their ability to meet normal immigration requirements appears to have run into some difficulties. When she was again interviewed on November 25, 1969, she stated that she believed her husband wanted a divorce but that she would still wish to bring out the children. It was then that she disclosed that she had been working without permission. Because Mrs. Wiercioch had effectively disqualified herself from the benefits of that part of the immigration regulations which provide for the admission as immigrants of non-immigrants applying within Canada, the application was refused. She was then given the opportunity to leave Canada voluntarily but she decided, instead, to come before a special immigration inquiry.

At the inquiry, which took place on September 24, 1970, she was ordered deported-basically because she had taken employment here without the authorization of an immigration officer. As is well known, she then appealed to the Immigration Appeal Board, and on March 15, 1972, the appeal board, having found no evidence that she would be persecuted if returned to Poland, dismissed the appeal and directed that she be removed from Canada as soon as practicable.

On March 30, 1972, the department was informed that her counsel had filed a notice of motion on her behalf with the Federal Court of Appeal seeking time within which to appeal the board's decision. Following this notice of motion, as the House has already been informed on previous occasions, all further departmental action respecting Mrs. Wiercioch was immediately suspended and the department received no further communication from her or her counsel until her untimely death.

As the minister pointed out earlier, the refusal of her application was necessary under the existing legislation because she had disqualified herself as an applicant in Canada by taking employment without authorization. The hon. member for Parkdale (Mr. Haidasz) must by now be aware of all this from the minutes of the appeal board hearing which I understand were forwarded to him last week. I think it is to his credit that he has asked for as much information as possible, and I am sorry that time does not permit me to complete the answer.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   IMMIGRATION-SUICIDE OF ALICIA WIERCIOCH- REQUEST FOR INVESTIGATION
Permalink
PC

Jack Burnett Murta

Progressive Conservative

Mr. Jack Murta (Lisgar):

Mr. Speaker, I rise to speak on the deteriorating postal services in rural Manitoba and especially in my home constituency of Lisgar. This is a subject which I have brought to the attention of the minister and his parliamentary secretary both by letter and in

June 15, 1972

the question period, yet it seems that they are ignoring my complaints.

In a question to the parliamentary secretary some time ago, I pointed out that our local postal service left much to be desired in terms of efficiency, and in his response he denied the premise of the question. I find his attitude toward this problem quite extraordinary. I have had dozens of letters on this matter from my constituents- businessmen, housewives and farmers. The parliamentary secretary might note that I have even had complaints from his own constituency which is adjacent to mine. Could it be that the hon. gentleman is not only ignoring my complaints on the matter but is ignoring also the complaints of his own constituents?

I hope in his reply tonight the hon. member will not once again deny that the postal service is deteriorating. I will not accept this because I know that our postal service is not what it should be in Manitoba. It is my contention that the Post Office has sacrificed its service to rural points in order to streamline its urban services. I submit that the Post Office should not be allowed to create priorities as to which areas should receive better service than others. This is not in the spirit or tradition of our postal service. My point is, that despite theories of rationalization of postal services, cost-cutting and other similar programs, every citizen of this country is entitled as a right to have prompt, efficient postal service the same as we have grown accustomed to over the years.

Now, what is the problem in rural Manitoba? It is simple. It is taking twice or three times as long as it should for letters to reach their destination. I could list dozens of examples. One constituent of mine had advertisement letters sent out within a 60-mile radius ten days before a sale in his business. Most of the letters arrived after the sale was over. He thus incurred a large loss of potential business, plus considerable postal costs which were also lost.

I have in my hand, Mr. Speaker, another example of our poor postal service-two letters addressed to the same firm in Winnipeg, from Carman, Manitoba: one was sent on May 13 and the other on May 26. They both arrived on May 29. These letters contained important business documents. I hope the Postmaster General (Mr. Cote) and his parliamentary secretary realize the ramifications of such poor service. Business which relies on efficient service suffers accordingly. If the parliamentary secretary wishes, I will give him dozens of examples; but they are all the same.

The parliamentary secretary cannot deny the premise because, as I have said, I have ample evidence that postal services are in fact deteriorating. The minister at times seems incapable or careless about how the Post Office is run. I would urge him once again to contact his departmental officials in Winnipeg and find out where the troubled spots are and rectify them as soon as possible.

Until recently, Canada has enjoyed one of the most efficient postal services in the world. This is rightly so. A country as vast as Canada needs a highly efficient postal service. Our citizens and businesses have grown accustomed to this good service. This is the standard which we are used to and it is the standard which should be maintained.

Proceedings on Adjournment Motion

In closing, Mr. Speaker, I wish to make two points. The first is that my constituents-and the parliamentary secretary's constituents, for that matter-will not accept statements that the Post Office is running as efficiently as ever. This we know not to be true and we will not accept it. My second point is that no matter what excuse the hon. gentleman is likely to give, as long as it is an excuse it is not acceptable. There should be a common standard of postal service in this country: it is a prime element of business efficiency and this common standard of postal service should be available to every citizen as a right no matter where he lives.

Now that I have made these points, Mr. Speaker, I will give the floor to the hon. gentleman because I am very interested in hearing what he has to say.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   POST OFFICE-REQUEST FOR ACTION TO IMPROVE SERVICE IN RURAL MANITOBA
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LIB

Jack Sydney George (Bud) Cullen (Parliamentary Secretary to the Minister of Energy, Mines and Resources)

Liberal

Mr. Jack Cullen (Parliamentary Secretary to Minister ol Energy, Mines and Resources):

Mr. Speaker, it is unfortunate that the hon. member, after asking his original question and raising this subject, did not see fit to present to the Postmaster General (Mr. Cote) or his parliamentary secretary concrete evidence to substantiate the kind of complaint he has registered. Anyone can get up and say that the post office service is bad-

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   POST OFFICE-REQUEST FOR ACTION TO IMPROVE SERVICE IN RURAL MANITOBA
Permalink
?

An hon. Member:

Are you doubting his word?

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   POST OFFICE-REQUEST FOR ACTION TO IMPROVE SERVICE IN RURAL MANITOBA
Permalink
?

Some hon. Members:

Oh, oh!

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   POST OFFICE-REQUEST FOR ACTION TO IMPROVE SERVICE IN RURAL MANITOBA
Permalink
?

An hon. Member:

That's typical Liberal arrogance.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   POST OFFICE-REQUEST FOR ACTION TO IMPROVE SERVICE IN RURAL MANITOBA
Permalink
LIB

Jack Sydney George (Bud) Cullen (Parliamentary Secretary to the Minister of Energy, Mines and Resources)

Liberal

Mr. Cullen:

Mr. Speaker, apparently hon. members do not want to hear the facts; they are drowning-out my words with the noise they are making.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   POST OFFICE-REQUEST FOR ACTION TO IMPROVE SERVICE IN RURAL MANITOBA
Permalink
?

An hon. Member:

Wake up.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   POST OFFICE-REQUEST FOR ACTION TO IMPROVE SERVICE IN RURAL MANITOBA
Permalink

June 15, 1972