April 17, 1973

PC

Allan Frederick Lawrence

Progressive Conservative

Mr. Lawrence:

Are you open now, Your Honour, for argument on-

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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NONE

Lucien Lamoureux (Speaker of the House of Commons)

No affiliation

Mr. Speaker:

Order, please. I suggest to hon. members that in view of the fact there is agreement, we should try to complete the debate and it might be better that we do not hear further argument. I had the feeling that the amendment was out of order. It was a gallant attempt to introduce an entirely new question. There might be another opportunity for the House to consider it, and there might be a division at that time. I suggest that hon. members be satisfied with dividing on the main question, which is the one which will be put to the House at ten o'clock.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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PC

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

Progressive Conservative

Mr. Baldwin:

Mr. Speaker, I deliberately withheld making the argument that I thought I should make. I made it quite plain that I was anticipating, by the silence expressed, that there would be acceptance of the procedure. I know there is very little silence. There is so much for the other side to be silent about, but they do not often take the opportunity, especially when they are answering questions.

Let me put this to the House: Is there not the possibility that when this House considers a report of a committee, it could recommend that the committee take it back and ask for wider terms of reference? That is what it amounts to. The original terms of reference stem from the House; the House is the repository of the authority. It has been suggested by a motion-I want to emphasize this to Your Honour and to members of this House-that all the factors involved in the trends in food prices be examined. Surely the question of wages, the question of transportation costs and every factor which is involved in any way in the question of the cost of food should be considered.

What my hon. friend has done in this admirable motion is to say to the committee, "Take it back and review what you have done. Then ask the House to give you terms of

Food Prices

reference which cover all the aspects, every concept, every element involved in the question of food prices. Do what you should do. Do what the House should have done in the first place".

I hear some rude noises from the other side, Mr. Speaker. I know that hon. members opposite are afraid to face this issue. They do not have the intestinal fortitude to stand up and vote on this issue. We think the country demands that this opportunity be given their representatives in the House of Commons to divide on the issue, and we think the committee should ask the House for wider terms of reference.

Some hon.. Members: Hear,hear!

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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NONE

Lucien Lamoureux (Speaker of the House of Commons)

No affiliation

Mr. Speaker:

I would indicate to hon. members that if they want to have argument after a ruling has been given, then perhaps we will have to hear argument from all sides, not only from the hon. member for Peace River (Mr. Baldwin) and the hon. member for Northumberland-Dur-ham (Mr. Lawrence). But I realize that would be somewhat irregular. There is an hour before the vote, and if hon. members want to spend it in argument after a decision has been rendered, then that is their decision.

I appreciate the point made by the hon. member for Peace River. I think that is one of the arguments which could have been submitted in support of the amendment proposed by the hon. member, but he himself recognizes that what he has put before the House is a new term of reference and, therefore, a new question. Certainly, the House is entitled to consider a new question. However, if it is a substantive motion which is proposed by the hon. member for Northumberland-Durham, then he has to satisfy the other requirement of the Standing Orders, which is that 48 hours' notice of any new question or new motion shall be given unless the motion is proposed under the terms of Standing Order 43 and there is unanimous consent. That is why I asked if there might be unanimous consent to consider the motion, and apparently there was not.

For all these reasons, I would think it is not possible to accept a motion which in my view is clearly irregular, although I recognize well-intended, and a motion on which there might be a desire to divide. But I suggest, again, that perhaps that division should be limited to the main question. I believe there was also agreement among hon. members as to the order of speakers. I believe the agreement was that the next speaker would be the hon. member for Toronto-Lakeshore (Mr. Grier).

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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NDP

Terrence Wyly Grier

New Democratic Party

Mr. Terry Grier (Toronto-Lakeshore):

Mr. Speaker, I rise to support the motion of concurrence in the committee report and urge all hon. members to do likewise. The issue before us and before the committee has been a difficult, a complicated and multi-faceted problem, but I believe a start has been made toward its solution in this report. I say that partly because the report embraces the concept of a food prices review board. I recognize that in the recommendation of the report that board is to focus on the problem of food and I make no apology for supporting it on those grounds. The people of Canada have made it clear that while their concern ranges wider than the price of

April 17, 1973

Food Prices

food, nevertheless it focuses sharply on that question and I think it is incumbent upon this House to deal with it.

The prices review board recommended in the report is an independent board; it provides the framework upon which it is the responsibility of the government to construct, through legislation, specific and muscular powers dealing with food prices. It is true that the report does not contain any specific reference to powers with teeth, to powers for which we in the New Democratic Party have asked for some years. I must say that although members of my party on that committee tried to have established a board with teeth, we received precious little help from hon. friends to my right.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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PC

Lincoln MacCauley Alexander

Progressive Conservative

Mr. Alexander:

Stick to the script.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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NDP

Terrence Wyly Grier

New Democratic Party

Mr. Grier:

However, I think it is significant that nothing this report says places obstacles in the way of the government's assuming the responsibilities that the hon. member for Northumberland-Durham (Mr. Lawrence) says that it must assume, and nothing in it prevents the provision of teeth. In her speech last week, the hon. member for Van-couver-Kingsway (Mrs. Maclnnis) told us in detail what kinds of powers should be given to that board. It is now up to the government and to the minister to respond. I say to the minister that this is no time for the establishment of a token review board; this is no time to back away from this concept; this is not the time to refrain from giving it the powers for taking the action that we all know is necessary. I urge the minister not to confuse caution with wisdom. In this case, the path of wisdom lies in taking action.

The powers which we of my party have sought for this board, and which we look to the government to provide, must include the powers of effective analysis, which involves an adequate budget, an adequate staff and adequate powers to require statements, material and evidence. I must say that I had some real doubt as to whether the special committee had those powers, but let me say that the board ought to have them.

I want to see this board holding hearings in public and making its recommendations in public. We should prefer that this board be empowered to take action on its own. However, if it will sit more easily with the minister, we believe that the recommendations of the board must be made public and that the minister ought to respond to those recommendations within a period of two or three weeks. As well, Mr. Speaker, the board must have the power to suggest a wide range of action, including in specific or selected cases the power to roll back prices. It must be given the power to provide the consuming public with all the publicity which up to now it has been denied, and the power to recommend that projected price increases not be proceeded with.

I suggest that there are real advantages to the approach involving a prices review board as against the proposal of the hon. member for Northumberland-Durham. In the first case, Mr. Speaker, it is intended that these powers be exercised selectively, that is to say, in such a way as to enable swift and searching examination of specific areas of the food industry in which corrective action can most quickly and effectively be taken. It follows that the prices

review approach does not penalize, as the wage-price freeze approach penalizes, the fair dealers, of which there are many in this country, and small wage earners who comprise the majority of our population. The prices review board approach does not legitimize and does not freeze the inequities which we all know exist in the system. It is all very well to freeze, but that only makes permanent the unfairness which we have already seen and which we all know exists. The freeze involves a crude, across the board measure which offers no hope for fairness or equity.

Moreover, I believe that a combination of public disclosure and, where necessary, corrective action taken by the board in a few well-publicized cases in which some element or other of the food chain, which may be a food processor or another part of the food industry, is not playing fair with the public will quickly break the so-called inflation psychology which is supposed to be abroad now and will assure the public, as it has not yet been assured, that we will not tolerate and that the board on behalf of the public will not tolerate a situation in which any element in the food chain is prepared not to play fair with the public.

The hon. member for Northumberland-Durham referred to the prices review board approach as being bureaucratic. I invite him to envisage the kind of bureaucracy required to support the wage-price freeze and the consequent policies which have never been spelled out but which have been alluded to by the hon. member. Let me say that if the prices review board involves some staffing, the wage-price freeze approach involves a gigantic bureaucracy. I think we would do well to acknowledge that we are facing a difficulty and complex problem which is not susceptible of simplistic solutions. I do not think the prices review board is the whole answer, but I believe it is a step-a most important step-in finally coming to grips with the problem of rising prices on behalf of all Canadians.

We have heard for some time from the hon. member for Northumberland-Durham and his colleagues about this wage-price freeze, but we have not yet been provided with any details of what it involves. Let me remind the House that not until the budget debate did this become the official policy of the Conservative party, when the hon. member for Don Valley (Mr. Gillies) apparently changed his mind. He talked in the budget debate about a freeze followed by consultations with the provinces which would lead, he hoped, to something which he calls cost stabilization policies. We do not know any more tonight than we knew then as to what is involved in these cost stabilization policies, or why we should expect from this nebulous process of consultation results which we have not received in the past from an equally nebulous process of consultation. The hon. member for St. Paul's (Mr. Atkey) last week talked about meaningful policies to fight inflation. Perhaps some of his colleagues know what those are. Certainly, we have not heard about them from the hon. member's party.

Ten years ago, Mr. Speaker, the then Liberal government offered this country 60 days of decision, and it took us a couple of years to recover from them. Now the Conservatives are offering us 90 days of dithering, at the

April 17, 1973

end of which we will be in the same position we are in today.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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NDP

David Lewis

New Democratic Party

Mr. Lewis:

Worse.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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NDP

Terrence Wyly Grier

New Democratic Party

Mr. Grier:

I suggest that it is irresponsible for a party to ask anyone to support such an empty proposal which it has placed before us in the last couple of months, a proposal so bereft of detail. It would be irresponsible for this House to adopt or support it. That proposal is so bereft of detail that, leaving aside today's high pork prices, it is far too expensive a pig in a poke. Therp is a vast accumulation of evidence to show that price-wage freezes simply do not work. When you take the freeze off, prices go up. Ask the boycotters in the United States, where the food boycott started. Ask the residents of Detroit who go to Windsor to buy their groceries. Ask the residents of Texas who go to Juarez in Mexico to buy their meat. Mr. Speaker, that is no solution.

This leads me to give my impression-because I want to be careful not to attribute motives in this House-of the approach taken by the Conservative party to this committee from the very beginning. As the hon. member for Northumberland-Durham reminded us, it has been consistently negative. His party has accused the government of trying to duck its responsibilities and expressed doubt all the way through as to whether the committee could accomplish anything. This negativism, it seemed to me, was carried over to their contribution to the committee itself. It was reflected, among other things, in their constant discouragement of attempts to get the committee a staff to enable it to examine the kinds of questions we all agreed needed to be gone into.

I did not get the impression that members of the Conservative party were making a serious effort to persuade other committee members to their point of view. In any event, they did not reveal that point of view in any formal way until the end of the committee hearings nor, in my judgment, did they seriously attempt to adduce evidence in support of it. I can assure the House there was very little evidence to support it.

Now they take the view that the government did not have a policy. So what? That is not new. But surely the committee afforded Members of Parliament an opportunity to try to construct a policy, instead of falling back on empty and sterile accusations of a political nature such as we heard again tonight. Therefore, it has often seemed to me that some members of the Conservative opposition are more interested in making food prices the political issue which the member for Northumberland-Durham promised it would be, than in trying to find answers for the Canadian people.

It has seemed to me, too, that some commentators in the mass media have shared or even fostered a general feeling of futility about the committee's work and, indeed, until a few days ago, about parliament itself. That is their privilege, but it has not made it easier to come to grips with a problem whose solution has so far eluded all Canadian governments of whatever stripe. If the accusation of futility is too harsh, I say they have encouraged an expectation that something sweeping and dramatic can be

Food Prices

done, an expectation which in view of the acknowledged complexity of the subject is not a fair one to hold out to the public. There is no shortage of simplistic, dramatic suggestions. But are we after theatre, or solutions? For theatre, I give you the speech of the hon. member for Northumberland-Durham. For solutions, Mr. Speaker, I give you a prices review board.

If the Canadian public is expecting trom parliament or from the committee, or from any party, miracles in connection with rising costs, and rising food costs in particular, they will be disappointed. None of us can offer that. But we have an obligation to try to put some fairness, some equity, some justice into the entire system under which food is provided to the Canadian people. And I am prepared to broaden this to the whole element of prices. If we can get the government to approve a food prices review board set up to take effective action, we will have taken a bigger step toward fairness in costs, and food costs especially, in the last three months than parliament has taken in the past three decades.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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LIB

James Sydney Clark Fleming

Liberal

Mr. Jim Fleming (York West):

Thank you, Mr. Speaker, for affording me the opportunity to make a contribution to this debate. Before I go further, I should like to comment on the proposal put forward by the hon. member for Northumberland-Durham (Mr. Lawrence); or perhaps I should refer to it as the amendment which was ruled out of order.

Unlike the speaker who preceded me, I shall not refer to the thespian-like qualities of the hon. member for Northumberland-Durham, but the argument was the very one which the committee faced a week or week and a half ago; and this, indeed, was the decision of all members of the committee with the exception of the Official Opposition. We felt we were given certain terms of reference and had the responsibility to follow them. It would be easy politics to go beyond them, not so much for our own party, which surely would stand with the government, but for two other parties at least. Yet they at least were sufficiently responsible to recognize the character of the terms before us and to follow through and do their best to confront the trying problem we faced. Also, in making reference to the amendment which was ruled out of order by the Chair, I should like to say that if the opposition cannot draw up an amendment, how could they possibly draw up wage and price controls and make them work effectively?

Public concern about the trend in food prices in Canada is certainly no secret. It has been ventilated in the press for many months, for long before the committee began its sessions. It is experienced by every citizen, rich or poor, from a small family or a large family, in rural Canada or in urban Canada. Weekly they go to stores and in most cases when they buy food products they must pay cash. When there is the kind of inflationary trend which the entire western world faces, nothing focuses more on this problem that we all must try to cope with, and all parties are honestly, in their own way, making an effort to do that or suggesting ways in which they feel it should be done. But surely there is no more central focus than when people go to buy food and see prices creeping up. No one denies this, certainly not members on this side of the House.

The committee held intensive meetings, between four and five meetings a week for more than two months. I am

April 17, 1973

Food Prices

sure all members can appreciate the workload involved, especially since all sorts of other committees were meeting in an attempt to meet problems facing this country and to resolve them. It is a very heavy workload shared by members on all sides of this House. To say that a committee of this kind if futile begs the question. All countries in the western world have tried desperately to find a solution, but none of them has yet done so. Surely, the concentration shown by the members of the committee represented an honest effort, and I believe the recommendations the committee made were the very best possible in the time allowed. It was certainly not a futile exercise. We did learn some hard facts, and this is what I should like to discuss in the next few moments.

First, wage and price controls. We had before us during those intensive meetings over a period of eight or nine weeks representatives of anti-poverty groups, consumers' associations, of labour and business. There were wholesalers and advertisers and, in addition, representatives of government. And not one of those people who appeared before us suggested the solution they wanted involved wage and price controls. There were one or two witnesses who said perhaps price controls were the answer. They said, "Price controls, but we know that won't work; it must be both". Sitting on that committee as well as ourselves were members of the Official Opposition. Not one of the representatives of the groups I have mentioned advised us that wage and price controls were the answer. Even if it were within our domain to do so in conformity with the directions given us by parliament, how could we possibly come forward, as a responsible committee, with a recommendation of that kind when not one group said we should?

Wage and price controls have been tried in two countries to which Canada is very close. They have been tried in Britain and they have been tried in the United States. In both cases they have been hopeless failures. In Britain they have led to massive strikes. They have forced the nation almost to its knees already, economically, and placed it in jeopardy not only internally but in trying to compete in world trade. If that is a problem in Great Britain, with its small size and heavy concentration of population, imagine what would happen if there were similar repercussions here in Canada, with our small population and vast territory, particularly since we depend so heavily on trading and exporting in order to survive while maintaining our standard of living.

In the United States the attempt to control prices on a temporary basis was a hopeless failure. The three-phase system is now in its first phase. When the controls were lifted only a month or so ago, we found that in fact the consumer price index for food had risen, not by fractions of a point but by four points in one month. Yet the Official Opposition suggests that temporary wage and price controls are the answer. They should know better. It is a phrase which might easily appeal to a public which is preoccupied with its personal affairs, jobs and families, and which cannot find time in which to stand back and study the situation in depth. But anyone who has even a shallow knowledge of the subject knows that price controls of this kind cannot work and that we should not jeopardize the nation by doing anything as irresponsible as adopting them.

A temporary freeze of the kind suggested could give rise to a number of other repercussions which would be extremely serious. Later in my speech I will touch upon the real hardship caused by high food prices to people who must live on fixed incomes, people with large families, to people living in poverty, compounded by the constant inflationary factor we face. One difficulty is this. If wage and price controls are imposed on a temporary basis, the primary producer might well be encouraged to withhold supplies. This might have the effect, later, of forcing up food prices still further.

Who are the people who would not be able to buy these goods if they were being sold on the black market illegally? Why, the poor, those with large families and those on fixed incomes. So, Mr. Speaker, I cannot think of anything more dangerous or irresponsible, anything that has less backing in world experience or which our committee heard more opposition to, than wage and price controls.

When you suggest that you can have wage and price controls but that you do not apply them at the farm gate, that again is a facetious argument. Because if your control begins at the top, it will work its way down to the bottom. The middlemen will say to the farmers; "We don't have the money to pay your prices", and this will hurt the farmers. It just does not make sense.

In our arguments before the committee and in our discussions it became obvious that part of the increase in the cost of food in Canada in the last year has indeed been a result of increased prices paid to the primary producers. But members on all sides of the committee agreed that that was not unfair. If there is any group in Canada that earns less or has a lower average income than any other, it is our farmers. Our farmers work long hours. They are dedicated people. In fact, they represent the principle on which this land has been built. So I do not argue, and I do not see how anybody else can argue, that they are receiving more money unfairly, even if it is reflected in the increased price of food.

With regard to the processors, because of the time limit that was put upon the committee to bring down an interim report, we were only able to talk with associations. I am satisfied that we do need more discussions with these groups, and I believe that this is in the making. The processors argued, and all evidence before us suggested, that their profit margin was somewhere between 1 per cent and 7 per cent. That certainly is not a profit margin that is considered excessive.

In the case of the retailers, their actual net profits range between 1 per cent and IV2 per cent and that certainly is not acceptable although I do believe there are many problems, which I will talk about in a minute or two, going on at that level which may in fact affect food prices.

There are several areas involved here. Volume discounts are one area which I hope the special or independent review board will consider. For instance, I know one wholesale company will offer, according to the volume taken by the retailer, as much as 15 per cent discount. In shipping and selling their goods to retailers in Canada, if those large retailers make up the principal part of the people they are selling to, you can imagine how that 15 per

April 17, 1973

cent discount in fact disadvantages the small, independent retailer. In fact, it may bring about pushing that person out of the market place, and meanwhile still be reflected in higher food costs to the general public. Then there are cash discount payments. In other words, if large retailers will pay their bills immediately to the wholesaler, they are given a discount. Yet in practice, even when they get this discount they do not pay the cash on time. There are advertising gains and exchanges so that you have a few people in the market place competing against each other, each of them forced by the other to stay in this very expensive game of grabbing public attention. The price of this may well be passed on to the consumer unnecessarily.

There is also the simple kind of business scheme, bonus trips based on amount of sales, and costs like that which run up food prices. I look forward to investigating that in the committee, and hopefully the independent review board that I am optimistic the government will appoint will also examine the situation.

We have also learned there are world shortages of food commodities. There is especially a very high demand for feed grain, grain and beef and these are all interrelated. People are willing to go out and buy steaks, not only in the United States to which we export a considerable amount but here in Canada, for $9 or $10 a time. This simply means that there is both demand and shortage. It takes three or four years to increase your stock of beef. Prices increase and people on limited income and large families in the poverty area simply cannot have that part of their diet which is nutritious.

We have seen Canadian incomes go up in the past five years some 50 per cent. I can remember that there was some discussion in this House at an earlier time about the fact that taxes have gone up in the last five years. So they have. But higher taxes reflect the fact that incomes also have gone up 50 per cent. Instead of people spending about 25 per cent of their income on food, as they did five years ago, they now spend about 19 per cent. Those higher incomes have gone to people along the food chain, as they should justly. All of this is reflected in higher prices.

Transportation costs have gone up for all of us, the producer as well as the wholesaler and the retailer. This is a general trend. But our real crisis is for those people, the poor, the large families, the people on fixed incomes, where increased costs have not gone from 25 per cent to 19 per cent but perhaps from 40 per cent to 45 per cent. This is a very real crisis indeed, and I think the government must face up to it.

I would like to note, before talking about several areas where it has been faced up to, that the party opposite sitting as government in another House, where apparently there is such concern for the poor and those on fixed incomes, has deemed it proper to impose a tax upon one of the largest populations and wealthiest provinces in this country which will hit hardest those people with the least money. This is an energy tax which they claim will eventually not be visited upon poor people. We have a system difficult to understand, and especially the poor have difficulty understanding it. I remember how we were attacked for our tax forms. I say it is the most regressive action I have seen by a provincial government for a number of years. I have followed the course of events as a

Food Prices

journalist, and I do so now sitting as a member of this House.

In contrast to increasing a sales tax which hits hardest at the poorest, imposing an energy tax which is a regressive tax on a basic service, the government has attempted to take strides in certain directions. I think they have taken some very positive strides. There is always more to be done, of course, but we have increased pensions, and raised the exemption level for income tax. Hopefully, we will soon have an announcement from the Minister of National Health and Welfare (Mr. Lalonde) regarding family allowances and other general plans to help the people in this country who need it most.

In conclusion, Mr. Speaker, may I talk briefly about the committee's recommendations. The review board is not the "be all and end all;" it is not the final answer. But it is a chance for people, especially those who pay cash for food, when they see something they think is wrong to go to somebody and find out whether it is wrong or not. It is going to be part of an education process. It is also, hopefully, going to be a part of finding out who the offenders are and where they are. It is a chance for government to be answerable to people and for a responsible group to say, "yes, that is fair," and, "No, that is not fair."

The members of the NDP have some concern about putting teeth into legislation. The members of the government party felt that to pass a resolution or to put forward recommendations to be brought back to this House to roll back prices simply does not make sense. You simply cannot handle this problem legislatively the way our country is set up.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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?

An hon. Member:

Why?

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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LIB

James Sydney Clark Fleming

Liberal

Mr. Fleming:

Because of the constitutional breakdown between municipal, provincial and federal responsibility. I say it is just not possible, and I have yet to hear any constitutional expert come forward and say it is possible. If that is the stand of the NDP, I invite them to bring this person forward so he can tell us about it. If we are going to have a review board, and if it is going to be effective, then I am pleased that within the recommendations is the suggestion that there be an opportunity given to the review board, whether through the vehicle of a standing committee or a special committee, at a hearing open to the press, to focus attention on those offenders and exert in this way leverage upon them to fall back into line. With this kind of publicity and confrontation, in the business world you just do not fight it; you back off.

In conclusion, Mr. Speaker, may I say that the nutrition recommendations-

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Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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LIB

Gérald Laniel (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Laniel):

Order. Although the Chair might find itself ready to listen to the hon. member, other hon. members wish to participate, and in view of the limited time I do not think I can give the hon. member an extension.

[ Translation]

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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IND

Roch La Salle

Independent

Mr. Roch La Salle (Joliette):

Mr. Speaker, at the end of this debate, I should like to make a few remarks after having heard all kinds of views, mostly divergent. I care-

April 17, 1973

Food Prices

fully listened to several speeches. At one time. I became aware that hon. members were saying that Progressive Conservatives did not make any contribution, that Liberals did not have any new ideas, that social Credit did not have any serious propositions to make and that the NDP was satisfied with saving the government's life.

Mr. Speaker, what is important is not to discuss the particular subject under consideration, namely the report of the special committee but, perhaps, to wonder why we had to set up this committee, why the government or hon. members were lead to recognize the importance of the committee and to what extent the committee will suggest anything concrete and worthwhile for the consumers. I know that Canadian consumers are very worried and expect this committee, a creation of Parliament, to suggest corrections, the committee made the following recommendation:

That the government give consideration to the advisability of introducing the necessary legislation to establish an independent Food Prices Review Board equipped with such powers as are necessary to review prices, and that it report to the Minister of Consumer and Corporate Affairs.

The hon. member who had the floor before me declared that we were not to expect this committee to have the powers to bring back the prices of past years. Then it seems that there are doubts about the efficiency of the committee, that one wonders if the consumer will finally benefit from decent food prices. Surely, all essential products could be affected.

As I said a while ago, why is such a committee necessary today? I do not think that I am wrong when I say that almost everybody expected the difficulties now facing us. And this does date back to yesterday; I think that even the government realized the danger when it referred to the fight which it has led against inflation for five years, there was therefore a danger. It was impossible to solve the problem due to a lack of proper measures, but this brings up today to recognize that as far as food is concerned as well as in all other fields, appreciable increases occurred as a result of hundreds of factors. I will be brief but will surely not be so bold as to say that this government is responsible for that problem. Surely, some circumstances and reasons explain why prices have increased. On the one hand, it will be said that this is because of the unions and on the other hand, that this government did not apply adequate measures.

We must still recognize that we are in an extremely difficult situation, and this is why the committee is prepared to make recommendations to the responsible minister. We recognize also that we are all in the same mess because of a host of factors, and later on, of course, we could blame Tom, Dick or Harry.

What matters for the consumer is to find a solution. I remember that, the other night, the hon. member for Louis-Hebert (Mrs. Morin) said that the committee would have to check and analyze, for instance, the often misleading publicity aimed at the consumer. I think that this is one of the excellent recommendations that the committee has retained. And I think that in such a field much need to be done. Moreover, it is what were doing those who some time ago were in favour of the inquiry on advertising which often prompts the consumer to spend much more than necessary.

On the other hand, I think that people expect results from that committee, and it is important to ask ourselves what exactly will be its powers and if it will limit itself, for instance, to making recommendations to the minister?

Will they be as decisive as they were about the Bell Canada rate increases? Will the committee that studies this question even report on why prices have gone up? I suspect that the consumer will be justly disappointed.

I therefore think it is important for the committee to have the power to look into the reasons behind the price increases, but if someone at a higher level decides to say no to that, whether because the reasons are inadequate or because of an increase that is excessive for the consumer, that will be that, and things will not go any further.

A suggestion by the Progressive Conservative party, namely a freeze on food prices, and a general price freeze, was rejected out of hand. This suggestion, which deserves some attention, might have been submitted to the government-I know that the government looked into it in any case-and they could have imposed a price freeze two years ago.

With regard to the 90 cent hind quarter of beef, large companies selling meat would certainly be glad to see prices frozen at that level. I consider that it would be doing the consumer a disservice to freeze prices now, without undertaking to bring them down to a reasonable level.

We have no right to reject this suggestion without giving it serious thought. We know very well that a 90-day price freeze might be acceptable without there necessarily being a wage freeze, but we also know that a long term price freeze would bring about a wage freeze.

There are all kinds of difficulties involved, but how can the government reject such proposals without examining them thoroughly, when it has found no way of stopping abrupt price increases that are putting the consumer in real difficulties? And the proof of this is that the government is relying on that commission to improve the prevailing situation.

I also listened to a proposal made by the hon. members belonging to the Social Credit Party of Canada, involving compensated discounts. At first sight, that concept might fascinate the consumer because of the prospect of reimbursement to them of 25 per cent of retail prices. But nothing was said of the way in which such a compensated discount can be granted. We know quite well that if the government implemented such a policy manufacturers and dealers would naturally take the biggest bite into the cake.

The retailer would therefore be far from receiving the 25 per cent discount proposed by Social Credit. I therefore conclude that consideration of a measure involving so many problems is premature as far as benefiting the consumer is concerned.

In view of the government's position, we must fall back on the committee and rely on it to a great extent because it will be able to scrutinize prices and make recommendations.

In the circumstances, the public is clearly expecting action. It recently reacted by boycotting prices, refusing to buy some types of meat. This action did have some influ-

April 17, 1973

ence and, of course, is distasteful to many. It is also fraught with the danger that, in the long run, this would result in prices rising still more as dealers could readily, in view of such instability, transfer their business or dealings outside Canada.

Therefore, this reaction from the public is quite justified, because they feel they are being exploited to a certain extent by dealers or by methods likely to increase prices. Well, the retailer is not necessarily the one who makes the biggest profit with these prices which have reached an intolerable level.

I expect a lot from this committee and so does the consumer.

I admit that all the problems we have had during the last few years, though they were expected, could not be avoided. As a matter of fact, I wonder whether this committee will reach the objective and I hope it will get into action without delay, and make recommendations so that the minister may take efficient steps to prevent this increase. And I think that the solution we are looking for and that no one has found to date is to bring prices back to a reasonable level on par with consumer income.

I suggest that this is our aim. And of course this will require much co-operation from all hon. members and understanding between parties. We will have to aim at a common objective for the sake of society rather than restrict ourselves to criticism. I admit nevertheless that each hon. member tried to make his own contribution. Perhaps some hon. members showed too much partisanship but, in general, I suggest that they have tried, by giving their views, to find a solution likely to safeguard the consumers' interests.

I therefore hope that the committee, in view of the difficulties which we know, will bring something positive to consumers. And the greatest deception which could befall consumers would be that the committee, which is now being publicized in every newspaper, and that study, which is being made by Parliament, would have no aftermath, for the consumer still has great hopes. Yet that is what would happen were the committee to confine itself to recommendations which would not result in efficient measures.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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PC

William Hillary (Bill) Clarke

Progressive Conservative

Mr. Bill Clarke (Vancouver Quadra):

Mr. Speaker, even at the best of times, even when there is no inflation, unemployment or poverty the price of anything is always too high in the opinion of some people and too low in the opinion of others. To the farmer, for example, the market price of his produce is always too low and the wages he has to pay his hired hands are always too high. To the hired hand the wages he receives are always too low and the prices of the groceries he must buy are always too high. It seems that even in the best of times no one is ever satisfied, but that is human nature. Because we do not live in the best possible circumstances but live at a time and place in which the government has been causing considerable inflation, unemployment, and poverty, the Canadian people are highly dissatisfied, and rightly so.

Food Prices

Last month in a debate in this House I mentioned some of the ways in which a government can cause unemployment and poverty. The Canadian people are completely justified in complaining about these policies and demanding the eviction of the government that sustains them. The Canadian people are also very upset about this government's inflating the money supply to fill its budget deficits and thereby causing a terrible inflation of prices which affects not only the price of food but also the prices of land and housing and in fact of all consumer goods. During the housing debate, when the rising prices of land and housing were discussed I put the blame for the paper money inflation where it belongs, on the federal government and its Bank of Canada. But this government does not listen and it continues to inflate the money supply, as evidenced by the Bank of Canada's own figures in its weekly financial statistics.

Both parties of the coalition government say that they want to force manufacturers to disclose more information about their products. Perhaps the government should print a disclosure on its own paper money which would warn the holder that its future value is questionable. Perhaps some hon. members think I am not serious when I warn of the dangers that lie ahead on the government's course of paper money inflation. These hon. members should study history. Then they would see what disasters paper money inflation has brought. One example is the destruction of the French economy after the paper money inflation that began in 1789. The collapse into chaos led to the rise of Napoleon who, despite all his vices, learned from the very conditions that brought him to power never to tamper with the soundness of his country's money, which was gold coin. More recently we saw the destruction of the German economy after the paper money inflation of 1923. The collapse into chaos and the rise of Hitler who, like Napoleon, unfortunately enjoyed the support of the people because the people considered even these dictators preferable to the chaos that followed the paper money inflation and economic collapse.

Genuine Conservatives can rarely find points of agreement with Lord Keynes, but I have found one. In 1919 Keynes wrote:

There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

A similar remark was attributed to Lenin to the effect that the best way to destroy the capitalist system is to debauch the currency. We must learn from history. We must stop this paper money inflation before we too relive the disasters of the past.

This is part of the problem of high and rising food prices. The other part of the problem is monopoly. Before I say very much about this I should perhaps define the word because many people are confused about its meaning. Lord Coke's definition of monopoly is most clear. He said:

Monopoly is a grant of special privilege by the state, reserving a certain area of production to one particular individual or group.

In a paper entitled "1776 to 1984: The Decline and Resurgence of Monopoly", Yale Brozen, professor of business

April 17, 1973

Food Prices

economics at the University of Chicago, elaborates as follows:

When Adam Smith wrote "The Wealth of Nations," there was no doubt in the mind of anyone that monopolies were the result of governmental power. Few felt they could flourish absent government support.. . They were difficult to maintain despite the use of governmental power. Competition kept breaking out in spite of governmental attempts to suppress it. ...

The very word monopoly was ... a label for a special privilege granted by the monarch-the privilege of being the sole supplier of some commodity or service. The royal grant of a monopoly was usually made to the subject of a monarch who, for some reason, the monarch felt deserved enrichment, and it was cheaper for the monarch to award such a privilege than to make a direct grant from the royal purse.

Crucial to the understanding of monopoly is the realization that monopoly has nothing at all to do with the number of firms operating in an industry. It has to do with whether or not the government is restricting competition. Sometimes there is only one firm in an industry simply because that firm is more efficient than any potential competitor and continues to offer consumers lower prices than any potential competitor thinks he can match. This situation is not a monopoly because the government is not restricting anyone from entering the industry and competing with the existing firm. Anyone who is willing to bet his capital that he can operate more efficiently than the existing firm is free to try. In contrast, although there are 363 licensed taxi cabs in the city of Vancouver, there is a taxi monopoly. It is a monopoly shared by the owners of the 363 taxi cab licences, because the city government will not issue any more licences. These monopoly profits are now so high that taxi cab licences recently changed hands at $30,000 each.

Some time ago this federal government introduced a so-called competition act which, it said, would bring greater competition and thus benefit consumers. If a private enterprise were to make a statement as outrageously false about one of its products, all its directors would go to jail. The competition act would not have repealed the Vancouver taxi monopoly or any other monopoly anywhere in Canada. If passed, however, it would have given the government arbitrary powers for which there is no place in a society supposedly governed by the rule of law, arbitrary powers to enable the government to restrict competition on behalf of its friends.

It is interesting to note that the legislation which creates monopolies in the food industry, the Farm Products Marketing Agencies Act, specifically exempts these monopolies from the Combines Investigation Act. What is the combines law for, if the government is going to suspend its operation every time it wants to create a monopoly for some of its friends? One of the arguments that the government presented on behalf of its so-called competition act was that the present combines laws were inadequate. But it is obvious that any inadequacy lies simply in the failure of the government to respect the law. Of course, even if the government's so-called competition act had been passed by parliament, it would have had no more effect on these food monopolies than on any other monopolies.

In May, 1971, the Consumers Association of Canada presented a brief against the establishment of marketing boards. They said:

From the point of view of consumers it is dangerous legislation which allows such sweeping power over a total industry to rest in the hands of a small group of people however selected, and however well intentioned . . .

That a producer-controlled agency which has sought national marketing legislation because of an inability to successfully manage its own production capacity could be given control over other sectors of the food industry ... is to consumers a horrifying prospect...

When, however, a national marketing body, able to control all supplies of a commodity, is exempted from the provisions of the combines act, the consumer ... is powerless to protect himself except through the time-consuming and very unsatisfactory political process. This is a situation which cannot be tolerated.

But the government ignored consumers and went ahead to grant monopolies over the supply of food. I agree with the Consumers Association of Canada that this is a situation which cannot be tolerated. The government is exploiting defenceless consumers of food in an attempt to get the vote of those inefficient farmers who want to be protected from competition.

According to an article in the Vancouver Sun of March 3, 1971, Gordon Hill, president of the Ontario Federation of Agriculture, called for greater controls on Canadian farm production and marketing. He said:

Cut-throat competition just doesn't work. It's murder on profits.

I think he was referring to effective competition. Effective competition is indeed murder on profits. It's supposed to be. It is the purpose of effective competition to ensure that producers earn their profits by providing consumers with the best products at the lowest attainable price. Free enterprise does not guarantee anybody a profit. Socialism and other monopoly systems provide unearned incomes to the friends of the government, but free enterprise certainly does not.

Whenever the government interferes with people's freedom to compete in a free market, it favours one group- inefficient producers-at the expense of two groups: consumers and efficient producers. Inefficient farmers claim that they want marketing boards as a means of smoothing out price fluctuations. But planning production so as to smooth out price fluctuations is a task that is performed by the competent, competitive farmers themselves. What the inefficient farmers really want is a quota system of allocating production so that they can be protected from the consumer, who buys the best product at the lowest price and who has no interest in supporting hobby farmers.

Now, there is nothing wrong with hobby farming, any more than there is anything wrong with yachting. Some people get their pleasure out of yachting, while others prefer hobby farming. The consumer rightly objects, though, when called upon because of a quota system, to subsidizing the hobby farmer. Why should the government, by restricting competition, force the consumer to subsidize the hobby farmer any more than the yachtsman?

Sometimes we hear the hobby farmers say that they want a fair price or a fair rate of return. But there is no such thing as a fair price or a fair rate of return to the farmer or to all farmers. The more efficient farmer will

April 17, 1973

always enjoy a higher rate of return than that enjoyed by the less efficient.

What is the result of marketing board monopolies? A constituent of mine tells me that one day last year as he left Vancouver, the price of cut-up frying chicken was 59 cents a pound. A day or so later, in Los Angeles, he saw that the price of chicken was 29 cents a pound; less than half the Vancouver price. In California there is free enterprise; in British Columbia there is a chicken marketing board. By the standards of inefficient British Columbia chicken producers, California producers are unbelievably efficient. But those of us who understand economics are not surprised; ever increasing efficiency and lower prices are the continuing consequences of geniunely competitive free enterprise. In British Columbia we are forced to pay twice as much for chicken because the government denies freedom of enterprise in chicken production.

In conclusion, Mr. Speaker, there are really only two types of politic-economic systems: first, the presence of free market competition and, second, the absence of free market competition, that is, the presence of restrictions. There are basically two types of restrictive systems. The first is the state socialist system, in which the state owns the means of production and the bureaucrats and politicians own the state. The bureaucracies are protected from legal competition because freedom of enterprise is denied. The other is the corporate socialist or fascist system, in which private ownership is maintained in name but the state is exceedingly powerful. The state uses marketing boards or variations thereof to protect members of select groups from competition.

The difference between the two is that the corporate socialist system features nominally private ownership of the means of production, although final control lies with the state through the marketing board; it fixes prices and grants or withholds quotas. Perhaps the freedom of the Canadian people is presently threatened more seriously by corporate socialism than by state socialism.

In contrast, the foundation of the free system is simply that if someone thinks he can produce goods or services more efficiently than those already in the industry, he is free to risk his labour and savings; he is free to compete. Competition-to make a long story short-will result in ever increasing efficiency and lower prices.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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LIB

Gérald Laniel (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Laniel):

Order, please. Pursuant to the special order made earlier today, it is my duty to interrupt these proceedings and forthwith put every question necessary to dispose of the motion now before the House.

Is it the pleasure of the House to adopt the said motion?

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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?

Some hon. Members:

Yes.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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?

Some hon. Members:

No.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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LIB

Gérald Laniel (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Laniel):

All those in favour of the motion will please say yea.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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?

Some hon. Members:

Yea.

Food Prices

Topic:   GOVERNMENT ORDERS
Subtopic:   FOOD PRICES
Sub-subtopic:   CONCURRENCE IN FIRST REPORT OF SPECIAL COMMITTEE
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April 17, 1973