Mr. Gillespie:

I would like, Mr. Speaker, in the time at my disposal to direct my remarks to the problems and opportunities that prevail in international trade and their effect on Canada's industries. Very clearly, there are important implications in the efforts of countries to deal with inflation while encouraging economic growth. Equally challenging is the problem of adjusting to rapidly changing international trade payments and patterns caused by price changes, particularly for oil. Of course, as all hon. members are aware, there is great need to quickly come to grips with the food needs of the world. If I were to try to put the problems facing us in a few words, I would say they are problems of political will and of confidence.

The international trading system is under enormous and conflicting pressures brought on primarily by balance of payments problems and by inflation which has shaken confidence in some quarters. This is why the individual and collective will of the trading nations to keep the system going is so important at this time. The difficulties of managing balance of payments adjustments are considerable and I do not want to underestimate them, but I am encouraged that governments of major trading countries are concerned about the risks of unilateral action designed to restrict imports to safeguard their balance of payments in the face of high energy bills. I believe there is an earnest desire on all sides, out of self-interest if nothing else, to co-operate in solving this problem. It is reflected, for example, in the trade pledge adopted last June by members of the OECD. With this pledge, governments undertook a political commitment against introducing import restrictions for balance of payments reasons.

Moreover, much effort is being devoted to finding political and economic ways and means of recycling earnings of the oil exporters to countries whose payments positions have been jeopardized by the energy crisis. The energy problem has demonstrated in a stark way how interdependent are the trading nations of the world. At a time of difficulty, perhaps it is worth recording that world trade has expanded many times since the Second World War and that as citizens of a major trading country we are richer for it. In large measure, this growth stems from the six rounds of tariff-cutting negotiations carried out under GATT auspices since 1947. We are now preparing for the seventh round-the Tokyo round. In this round we shall be seeking easier access abroad for more of our manufactured goods so as to enable a higher degree of processing of our natural resources in Canada before they are exported.

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The Budget-Mr. Gillespie

Foreign trade barriers, both tariff and non-tariff, are a major impediment to further processing in Canada. We look to these multilateral trade negotiations as the most effective way or removing or reducing these barriers. To this end, we are promoting a "sector approach" in the context of GATT negotiations, advocating a uniform or zero tariff for all steps of processing of, say, a mineral up to its fabricated state-from the ore to the beneficiated ore, to the smeltered metal to the refined metal, to the fabricated metal products; the whole chain of further processing.

In preparing our position for the GATT conference we have been fully aware of the interests of the provinces. Over a year ago I invited the provinces to submit their views on what they would like us to obtain from the negotiations and what they would be prepared to concede. I have held a number of meetings with my provincial counterparts to discuss these questions. A number of useful meetings between federal and provincial officials have also been held. Some provinces have already submitted their views and these will be most helpful to the Canadian negotiators. I should like to take this opportunity to invite those who have not already done so to submit their views. I hope the Canadian negotiators will shortly be able to move into the intensive phase of these discussions which have been delayed pending the obtaining of the needed negotiating mandates by the United States and the EEC.

We have, of course, all been watching with considerable interest the progress, or lack of it, of the U.S. trade reform bill through Congress. The mandate contained in this bill is a vital ingredient for getting on quickly with the new round of trade negotiations. If an effective negotiating mandate is not obtained by the U.S. administration, it will be a serious setback to international trade liberalization. United States leadership is essential if we are to make effective progress at this time. In addition, this is not the time for countries to allow the international trading community to slip back into the dog-eat-dog policies of the 1930s. We should play our part in trying to strengthen international co-operation. I am hopeful the need for an effective mandate will be recognized and pursued urgently to ensure against a serious deterioration in the international trading environment, for time is running out.

Against this background, let us take a look at Canada's current trading picture and make some projections of what we may expect by way of international trade over the next 12 months and even beyond. For the first ten months of 1974, the value of our exports is up by 28 per cent, compared to the same period in 1973. Thus, for the whole of 1974 I now expect that our exports will total more than $31 billion. To put it in another way, I expect that exports will increase by about $6.5 billion over the figure for 1973, compared with a gain of something more than $5 billion from 1972 to 1973. Some may find this surprising, especially in a year when our major trading partners, the United States, the United Kingdom and Japan, have experienced an economic downturn. The increase in our exports has taken place, of course, because Canada is fortunate enough to be a major exporter of a number of commodities which are in short supply and for which prices have risen sharply in the past year. These include wheat, copper and zinc as well as crude petroleum, with

regard to which the collective action of the OPEC countries has resulted in even larger price increases.

Although the physical volume of exports of these commodities has been lower in 1974, increases in price have more than offset decreases in volume. The commodities I mentioned have, therefore, made a major contribution to the increase in the value of Canada's exports in 1974. It is largely because of the decline in the physical volume of those commodities, including lumber, that the index of the volume of Canada's total exports has declined in 1974. For the first ten months of 1974 this decline amounted to about 6 per cent, compared with the 1973 levels, and I expect that the decline for the year as a whole will also amount to about 6 per cent. We are aware, too, that the physical volume of our exports of automotive goods has been affected by the drastic slowdown in the United States auto market. A similar decline in housing construction in the United States and a slowdown in Canada have caused a serious problem in Canada's lumber industry.

The budget contains a number of important measures which should help to increase market demand in Canada. I refer particularly to the reduction of the sales tax on building and construction materials from 11 per cent to 5 per cent. There are already indications that this is being reflected in lower average housing costs. Second, there is the change in the treatment of capital cost allowances on new, multi-unit residential buildings put up for rent. Parenthetically, I might mention another helpful measure-the provision for a $500 cash grant to individuals who purchase for the first time new, moderately priced housing units.

Returning to the budget, I hope, too, to see more developed land coming on to the market because we have eliminated the privilege of taxpayers to charge against income the carrying costs on land awaiting development. There is, also, the provision for capital cost allowances at 15 per cent to firms who hold certain types of timber limits and/or licences to cut timber. We all recognize that transportation is a major cost factor in forest-based industries. Thus, the complete elimination of the 12 per cent sales tax from a wide range of transportation equipment, including large trucks, will be felt not only in forest-based industries but also in downstream industries, including residential construction.

My department is carrying on a vigorous export promotion program. As a matter of fact, a timber trade mission returns from the Middle East tomorrow and I am optimistic about what it will have to report. Timber exports to the Middle East, by the way, increased from just $75,000 for all of 1972 to more than $3.5 million for the first six months of this year. I believe this is an illustration of what aggressive promotion can accomplish. We found a new timber market in Cuba which took nearly $3 million worth of lumber in the first six months of this year alone. They imported none at all from us in 1972 or 1973.

We have also been promoting other Canadian export interests. All hon. members are aware that I led trade missions to Mexico, the Middle East countries, and Brazil this year, and I can assure them that in every country we were impressed by the great interest in Canada and in the

November 26, 1974

desire to co-operate with Canada in the development of closer trade and economic relations.

As a result of my visit to Iran in April, for example, it has been agreed to conclude a trade agreement with that country to facilitate the flow of goods from both sides. It is apparent that a wide scope exists for a wide exchange of products, the employment of Canadian expertise, the establishment of joint ventures and other forms of economic and technical co-operation between the two countries. In Brazil, just last month, I was further convinced that aggressive marketing by Canadian entrepreneurs can and will pay off. Brazil itself presents myriad opportunities. This year we have already trebled our trade with Brazil, on a year to year basis, over last year. Our increase in exports to Brazil this year will be of the order of $200 million. These opportunities in Brazil range all the way from increasing our current exports to establishing new, joint ventures with Brazilian partners.

I submit that there is sufficient international demand to give the Canadian economy a needed stimulus and to provide the confidence that market opportunities can indeed be captured by an aggressive Canadian business community. At the same time, however, I have been impressed by the need for flexibility in our trading strategies. In certain developing countries, for example, I can see direct participation in their industrial development as clearly the best way to strengthen our trade and economic relations. I am encouraging Canadian business interests to look at the opportunities provided by joint ventures. I also plan to continue the market development program that I have initiated through trade missions to ensure that Canada does not lose out on the major, new international trade and economic opportunities.

As for next year, we must be realistic. We must recognize that Canada cannot much longer escape the impact of continuing economic stagnation in our trading partners. It looks as if the rest of the industrialized world will experience marginal economic growth next year, particularly during the first half of the year. This means that recovery, in physical volume, of our exports will be slow in 1975, certainly in the first half of the year. In spite of that, however, we should still obtain a moderate increase in total value of exports.

Over the longer run, I am optimistic. Canada has been steadily building an internationally recognized and internationally competitive industrial base. It has a strong supporting institution in the Export Development Corporation and has a variety of programs offered by the Department of Industry, Trade and Commerce. What is essential to our export outlook at this time, in view of the slowdown abroad that I have noted, is that Canadian entrepreneurs keep up the momentum of recent years even though in the short run it may not appear to be in their immediate interest. But over the long run it will clearly be in their interest and it will be in the interest of Canada. I can assure them and Canadians generally that we will be doing our part to assist them.

Hon. J. A. MacLean (Malpeque):

Mr. Speaker, when I go around my constituency and discuss with the people I represent matters that are of special interest to them, I find that not since about 1938, which is many years ago, have so many people been apprehensive and worried about

The Budget-Mr. MacLean

the future. This is due partly to the fact that they cannot see ahead. They are troubled about where they are going, not only as a province and as a country but as a western civilization. In addition, they are beset by economic problems. They feel lost in a sort of desert of shifting sand, their savings depreciating and their costs escalating. Goals which were almost within their reach quite recently are now suddenly unattainable. The necessities of the immediate future they find have been squandered in the luxuries of the immediate past.

There are three important matters with which I find my constituents concerned, and I propose to talk about them for a few minutes but not in order of their importance. These three problems are the energy crisis, inflation, and what I might term loosely as the food crisis. For a few decades now North American civilization has been infatuated with the high-powered automobile. We have been producing millions of cars that consume twice as much gasoline as necessary to travel a given distance. It seems unreasonable to me, and I think to most people, that an automobile should require a gallon of gasoline to transport one man perhaps 10 or 12 miles, which is often the case in our large cities where people insist on using high-powered automobiles, expensive ones at that, which consume a large amount of gasoline. Other cultures are not so dependent upon the automobile as are we in North America.

In addition to this, in the last few decades there has been great mechanization in the field of agriculture, with a parallel input of energy in the form of petroleum products. Added to that we have, of course, begun to use oil almost exclusively for heating homes because of its convenience and for other reasons. I think that for many years we were living in a fool's paradise. The cost of crude oil remained fairly steady, but as times changed and the western world became more and more dependent on oil from the Middle East and other sources, and it became a sellers' market instead of a buyers' market, it became inevitable that the cost of petroleum products in their raw state would increase.

This is exactly what has happened, Mr. Speaker. For many years the price of crude was around $3.85 a barrel, basis Edmonton. I do not know exactly what that would mean, but I suspect it would mean that the countries in the Middle East would charge, by way of royalties or taxation, something like $1.70 per barrel of oil exported. At the same time, countries in which these products were being consumed were taxing them to an even greater extent. The provinces were collecting an average of $2.40 a barrel in the form of gasoline tax on Middle East oil imported into Canada, from which gasoline was extracted. It was hardly surprising, in that situation, that the cost of oil would greatly increase.

Canada is in the relatively happy position of being self-sufficient in oil and will be for a couple of years or longer because our exports equal our imports. This created a special problem because we wanted the cost of crude to Canadians to be below the world price and the only way to accomplish this was to impose an export tax on what we exported, to subsidize what we imported. Under these circumstances no one objected to this tax because in that

November 26, 1974

The Budget-Mr. MacLean

way the differential between the cost of crude oil to Canadians and the higher world price was maintained. In these circumstances, the producing provinces had to make a concession for the common good and they have been very generous in the matter of the distribution of this export tax.

In addition, the exporting provinces own the resources, under the British North America Act. Petroleum is a non-renewable resource and the provinces are concerned that they obtain a reasonable benefit from the exploitation and selling of this resource which can only be sold once. Therefore, they impose royalties. Someone has likened royalties to rent in doing business. There may be some similarity in the case of renewable resources such as stumpage on forest land, and that sort of thing, but in the case of non-renewable resources there is no relationship between rent and royalties. Royalties represent the sum of money a province receives for what it sells because one day its non-renewable resources will be gone forever.

The Minister of Finance (Mr. Turner) declared in his budget that royalties paid to a province are not legitimate deductions in computing income tax. Royalties paid to a foreign country are allowable, but if royalties are paid to a province they do not represent a legitimate deduction in computing income tax. What the government is saying, in effect, is that royalties paid to a province are illegitimate; they are not legal and should not be considered. This position is high-handed, unfair, untenable and even illegal. I implore the Minister of Finance to re-examine his position with regard to royalties. The minister has made a long and involved argument in favour of this stand, on the basis that royalties in some cases are not really royalties but are camouflaged taxes that erode the federal tax base, and that sort of thing. I am not arguing that there is not some basis for that argument and I would agree that this may be so in some cases. But that is not justification for denying what I believe to be a superior right of a province, that is, to charge royalties on resources that are owned by the provinces and exploited by companies.

Surely, a much better solution would be found if the Minister of Finance were to agree that these royalties will be accepted as legitimate deductions for income tax purposes up to some mutually agreed amount, either a percentage or a specific amount based on the quantity produced, or something else that could be worked out. I am not suggesting the technicalities here, but I think this could be done. The minister said that to find a solution of this sort would be very difficult. That is an old, old argument. I remember perhaps 20 years ago when the suggestion of making cash advances on farm-stored wheat was put forward time and time again. The government of that day said it would love to do this, but it was technically impossible and too complicated. The government gave a million reasons why this could not be done. However, the government changed, and it was done; it was not found too difficult. I think a way could be found and I implore the minister to try to find it. Surely a compromise could be reached without violating the basic right of a province to charge royalties on the exploitation of the natural resources which it owns.

At the present time, primarily Alberta is involved. However, we should not forget that presumably most of the oil

in Alberta has already been found, and if we are to find additional large quantities of oil in Canada they will be found either on land that is under the jurisdiction of the federal government or in a province or provinces other than Alberta. Therefore, every province has an interest in this principle not only in respect of petroleum products but in respect of the whole spectrum of natural resources. As far as petroleum is concerned, we in the Atlantic provinces feel that the federal government has a penchant for confiscation. It is argued that offshore resources belong to the federal government. The government now thinks that as far as the Atlantic provinces are concerned, if commercial quantities of oil are found in that area it will not matter, because the federal government says it has a prior right over natural resources discovered offshore.

Referring to page 11 of the budget speech of November 18, the minister said:

Third, the federal government should recognize the special position of the provinces with respect to the taxation and charges on resources within their boundaries.

I agree with that. The trouble is the minister says this but has not done it. This government is doing the opposite, and I suggest it should do what the minister has said it should do. I have taken more time on this matter than I intended, and I now turn for a few moments to the problem of inflation. It is my belief that high government expenditure is a considerable factor in inflation in this country. It is perhaps not the most important factor, but it is important. I am concerned about the rapidly accelerating and excessively large expenditures of governments in Canada, not only at the federal but at all levels. The federal government is not without blame, by any means, in this regard. The minister was interviewed on television the other night. I had the pleasure of watching him for a little while. He was asked the following question by Mr. Lynch:

Why don't you admit that the thing is beyond your control, as many people think?

He was speaking of inflation and the expenditures forecast for the next fiscal year. The minister replied:

I won't admit that at all. I will say that the discretionary element in those expenditures is about $7 billion or $8 billion out of $35 billion because a lot of it is statutory, a lot of it is federal-provincial in medicare, hospitalization and equalization, some of it's the servicing of the public debt, and so on ...

With that I agree. However, if one looks at the forecast for the next fiscal year it will be seen that it is roughly $35 billion. If we subtract even the larger of the two figures mentioned by the minister, $8 billion, we are left with $27 billion. The minister, in effect, is saying that the non-controllable expenditures for next year will be about $3'/2 billion more than the total expenditures for last year. In that light I think it is fair to say, unhappily, that government expenditures are out of control. The rate at which they are out of control is a question that remains, but the fact is that these trends must turn around; we cannot go on like this indefinitely without something going bust.

As a nation, we must reverse some of these trends. We must control them or level them out so that such a large amount of earnings will not be extracted from Canadians

November 26, 1974

in the form of taxation. I have been talking about billions of dollars. Speaking of millions or billions of dollars makes the figures become almost meaningless; however, we should not forget the astronomical sums of money which are being spent by the federal government. Someone said, in this respect, that if one were to give his wife $1 million and she spent $1,000 a day, she would be broke in about three years and would be asking for more; but if one gave his wife $1 billion and she spent $1,000 a day, she still would not have run out of money at the end of 3,000 years. We tend to think there is only one comma between one million and one billion, but there are three in one billion. Therefore, people are concerned about the future and I believe there is a confidence crisis.

Last weekend I was reading an official booklet put out by Air Canada which referred to how one might benefit from the monetary crisis. It advised people travelling by Air Canada to buy gold, silver or Swiss francs. I think what we need in Canada is an atmosphere in which Canadians can believe that their best future lies in the development of this country and in the principle of production. If we can increase our efficiency and our productivity, prices in real terms are bound to be more advantageous for the consumer.

I wish now to turn to another matter. I am sorry that I have only a few moments left to deal with it. I refer to the crisis in respect of food production. Over the last 30 years Canadians have been able to buy economically-priced food. In my judgment, food has been underpriced for many years. For almost three decades the price received by the primary producer has remained practically constant. The price to the consumer has increased gradually, but this is due to the fact that food is being marketed in an ever higher state of processing. Also, the cost of distribution has increased. But the price the primary producer has received for his product has remained almost static for about three decades.

Under these circumstances, the principle of supply and demand has broken down. As prices dropped, the primary producer, instead of producing less tried to produce more in a neverending attempt to stay out of bankruptcy. In the process thousands, if not millions, of farmers in North America have been forced off the land, with the consequent effect that in order to gain the degree of efficiency needed to produce food at low cost there had to be large units of production with very high inputs of energy, in the form of petroleum products, and fertilizers. No longer does the farm produce its energy as well as food. With the terrific increase in the price of energy in the last couple of years, the cost of producing food has skyrocketed.

I have almost finished, Mr. Speaker; I see that you are becoming very restless. Perhaps I would be allowed one more sentence, and I shall leave it at that. The result is that we can never expect to buy food as cheaply, even in constant dollars, as has been the case over the last few decades. We can have cheap food now and starvation in the future, or we can have reasonably priced food now, economically distributed, guaranteeing continuous production in the future.

At this moment, many beef producers in my riding are on the verge of being forced out of business. There is general apprehension on the part of many people that

The Budget-Mr. Landers

perhaps it is beyond the power of governments in a democratic system to take the resolute action which must be taken now to control inflation. I believe some governments in democratic countries can control inflation, but it would seem this government is not one of them.

Mr. Mike Landers (Saint John-Lancaster):

Mr. Speaker, first of all I would like to remind the Liberal cabinet that on July 8, 1974, we had an election and that by accident, design or otherwise I was elected to the government side of the House of Commons to represent Saint John-Lancaster. Prior to July 8, 1974, one of the main thrusts of my campaign was to convince the voters of Saint John-Lancaster that our constituency should have a member on the government side of the House of Commons. Apparently, the voters were convinced.

Now, Mr. Speaker, I hope to be able to convince the cabinet that Saint John-Lancaster should be recognized for the foresight and insight of its voters. More specifically, I hope to be able to convince the Minister of Transport (Mr. Marchand) and the Minister of State for Urban Affairs (Mr. Danson) that the constituency of Saint John-Lancaster has some special needs. With regard to the Department of Transport, I have come to realize that a "no" answer can normally be expected to requests made of that department. My complaint is that the "no" answer is often a long time arriving and often precludes a member of parliament making attempts to modify the "no" answer to a "perhaps" answer.

In the constituency of Saint John-Lancaster we have a number of problems. However, we have one urgent need- more housing; especially more low-rental housing and senior citizens' housing. I fully realize, Mr. Speaker, that this problem is not unique to my constituency, and I was pleased to hear the budget proposals in relation to housing. However, due to an industrial construction boom in Saint John-Lancaster, workers are being imported from the rest of the province, the rest of Canada and from countries throughout the world. These workers come armed with lucrative expense accounts and are prepared to pay higher rents than regular citizens of Saint John-Lancaster can afford.

The influx of workmen has caused a serious housing shortage, and because many of these workers are on expense accounts, rents have escalated rapidly, putting them out of the reach of low-income families and out of sight for senior citizens. Each and every week since I was elected I have received a minimum of five supplications for housing. One senior citizens' apartment tower presently under construction received, before construction began, five applications for each unit that would become available. Because of the housing crisis I implore the cabinet generally, and the Minister of State for Urban Affairs specifically, to rush to the assistance of my people. The housing shortage is a fact. It will not go away. If, as a member of parliament, I am unable to convince my government to alleviate this problem over the next four years, I shall call upon the voters of the constituency of Saint John-Lancaster to retire me; to march to the polls and turf me out.

Mr. Forrestall:

We'll remind you of those words.

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The Budget-Mr. Hailiday

Mr. Landers:

Many problems exist in the field of transportation. Due to the increase in population and the construction boom, traffic congestion has become intolerable. Immediate negotiations must commence between the federal government and the provincial governments to ensure completion of the Saint John throughway on an emergency basis. The Saint John winter port is badly in need of additional federal funding, not necessarily on a cost-recoverable formula. Although the National Harbours Board and the provincial government apparently could not agree on Rodney terminal, the terminal is almost completed. Some federal funding has been made available; however, the brunt of the cost of Rodney terminal is falling on the backs of the citizens of the province of New Brunswick. I call upon our government to lift the financial burden from the backs of my people and also to provide additional funding for a forest products terminal. Other terminals are needed as well: however, I would call upon government officials and National Harbours Board officials to consult the International Longshoremen's Association before deciding what to build and where to build it.

I now turn to the Saint John airport. A recent list of eight current priorities of the city of Saint John, released by the mayor and council of my city, called for improvement of the airport, including the lengthening of both runways, better navigational aids and lighting, better terminal amenities and improved air service. We are looking for direct, dedicated flights to Toronto, as a first priority, Montreal, Halifax and Boston, plus an improved regional air service and dedicated freight service.

I call upon my government to consider allowing blind and otherwise handicapped people, who have to be escorted to major cities for medical and other attention, to fly at a 50 per cent fare discount on Air Canada flights. Also, the escorts of blind or handicapped persons should be allowed to fly at a 50 per cent discount. If this fare structure were implemented, the present discrimination against such people requiring escorts would be eliminated. I wish to point out that in the provinces of New Brunswick and Nova Scotia, sightless persons and their escorts are allowed a 50 per cent discount on intercity and interprovincial bus services. However, it takes 14 hours to travel from Saint John to Halifax, which is a long and boring trip for a sighted person but, I submit, it is a most painful and even longer trip for a sightless person. Therefore, the Canadian government should provide reduced air fares for blind and handicapped persons requiring escorts.

Mr. Bruce Hailiday (Oxford):

Thank you, Mr. Speaker, for recognizing me for this, my first speech in the House of Commons. It has been a fascinating study of human behaviour for me, sitting here at the back, listening to and observing 263 other hon. members perform, each in his or her own unique manner. With this event soon to be behind me, Mr. Speaker, you can probably count me as one further member whom you will have to keep in order in the future. Having said that, and acknowledging that at this stage of the first session of the thirtieth parliament it would seem inappropriate to congratulate Your Honour upon being elected Speaker of this House, as hon. members preceding me have so fittingly done, may I take this opportunity to commend and congratulate you on the skill and art which you have acquired and exercised in a short

few weeks in your role as Mr. Speaker. Not having been subjectively involved in the debates to date, I have been able to assess, I would say, dispassionately your handling of sometimes difficult situations in a manner which I have felt to be most creditable to the high office Your Honour holds on behalf of all hon. members.

I would say also, Mr. Speaker, that these remarks should be considered to apply equally to the Deputy Speaker and Chairman of Committees of the Whole House (Mr. Laniel), the Deputy Chairman of Committees of the Whole House (Mr. Penner) and the Assistant Deputy Chairman of the Committees of the Whole House (Mrs. Morin). As a new member, I have been impressed by the affability, friendliness and co-operative attitude displayed by the staff under your jurisdiction.

In a few days it will be 21 years since a member representing the constituency of Oxford has given a maiden speech in the House. On that occasion it was the late Wally Nesbitt who so faithfully represented Oxford in the House and whose privilege it was to speak at that time on behalf of his constituents. I am honoured both to be chosen as his successor and, indeed, to sit in the House. Inasmuch as there are only very few hon. members now in the House who were here 21 years ago, perhaps I can be forgiven if I offer a few comments in praise of my constituency.

Oxford is situated in the heart of southwestern Ontario. Interestingly enough, the village of Tavistock where I live, on the northern fringe of the riding, is probably farther from a significant body of water than any other municipality in Ontario. We are about equidistant from the three great lakes-Huron, Erie and Ontario. I hasten to admit, sir, that we do sit on the edge of the headwaters of the Thames River which, although it may dry up in the summer, develops into a significant river as it feeds the reservoir known as Pittock Lake in Woodstock and courses on through the riding toward London and Lake Erie. Morphologically, the boundaries of the riding of Oxford correspond precisely to those of the county of Oxford. As a county in Ontario, we are unique in having been recently granted the privilege and responsibility of undergoing a political internal restructuring in lieu of a scheme of regionalization which has involved large areas of Ontario.

The economy of Oxford is quite diversified, with our population about equally divided between rural and urban dwellers. We are basically an agricultural community with a long and enviable record in the dairy industry. Although cheese-making was carried on in the very early days by pioneer settlers, the first cheese factory in Canada was established in 1863 near Norwich, in Oxford, to be followed two years later by the forerunners of the present Ingersoll Cheese Company which in 1866 produced the still famous mammoth cheese weighing over 7,000 pounds which was shown at the New York State Fair. One year later, in 1867, the Canadian Dairyman's Association was founded at Ingersoll with a convention attended by over 200 delegates from Canada and the United States. As a more timely note, I can say without fear of contradiction that both the right hon. Prime Minister (Mr. Trudeau) and the hon. Leader of the Official Opposition (Mr. Stanfield) would most certainly have been presented with a gift of

November 26, 1974

Oxford cheese when they visited our riding during the recent election campaign. In addition, Oxford is blessed with a significant mixture of other branches of agriculture, including beef cattle, hogs, poultry, tobacco, cereal and feed grains, increasingly large acreages of corn, turnips and apples.

Our urban balance is maintained by the city of Woodstock and the towns of Ingersoll and Tillsonburg, each of which makes a significant contribution by way of manufacturing and light industry of a remarkably varied nature, much of the products of which are exported across Canada and around the world. This segment of our economy continues to make significant strides, with a good growth potential for the future. Although Oxford, by this description, may sound like a land of milk and honey, we do have our problems in spite of three forays into our riding by the Minister of Agriculture (Mr. Whelan) during the last election campaign. A constituent of mine of a different political persuasion than I, but nonetheless a friend, has strongly urged me to say something nice about the minister.

Well, Mr. Speaker, like other new members I have got to know that he, too, is an honourable gentleman. But more than that, he has provided the farmers of Oxford and, indeed, Canada with an unparallelled challenge by way of an agricultural policy with the ups and downs of a rollercoaster. Like the rest of Canada, our farmers suffer from the same insecurity generated by complete lack of a consistent agricultural policy. Or, again, take the matter of excessive government intervention in the dairy industry. I quote Mr. Philippe Pariseault, chairman of the National Dairy Council of Canada, in speaking to the council back in September:

Here is a partial list of new intrusions by our benevolent federal benefactors: moisture content of cheese, fat content of butter and cheese, fat content of ice cream and frozen desserts, fat content of yogurt and cottage cheese, generic classification of cheeses, recall code procedure, Companies Act, competition bill, environment Canada regulations, termination of the fluid milk subsidy, enlargement and extension of milk powder subsidy. Maple Leaf grade symbol, increase in support price for butter and powder, maximum coliform content for cheeses, preparation of brief for GATT, preparation of brief for Food Prices Review Board, report on the dairy industry by Dr. McFarlane, regulations for partially skimmed milk, seminar on the dairy industry held by FPRB, emphasis on violations under Weights and Measures Act, Health and Welfare research projects, codex alimentarius-margarine standards.

And, as Mr. Pariseault points out, this all takes more staff, more government spending and either more taxes or more inflation of the money supply. I think it was Thoreau who once said: "Government is best which governs not at all." Mr. Pariseault went on to say:

There doesn't seem to be anyone in Canada in charge of co-ordinating the over-all federal government's concern and intervention in our industry. We've had Agriculture Canada, Health and Welfare, Consumer and Corporate Affairs, Statistics Canada, Weights and Measures, Environment Canada, dairy branch, Canadian Dairy Commission, food additives, etc. All get into the act and talk about developing more rules and regulations for our industry during this past year.

It is difficult to be too critical about a great deal of this government's activity, but it's the proliferation that is so overwhelming and the timing appears to lack any co-ordination whatsoever. After all, one can have an excess of filet mignon and sex.

The Budget-Mr. Halliday

It would be redundant and time-consuming for me to detail more of these problems now. But by the same token, many of our industrial and small business concerns and farmers have struggled along during the past six years with inadequate financial support in the way of federal small business loans, which just often are not available, together with a government policy not always favourable to the growth and development of Canadian-owned industry.

I would like to touch on one more specific problem which is not unique to Oxford but concerns southwestern Ontario in general. I speak of the appalling lack of public transportation in the rural areas, a problem which appears to be completely ignored by our present Liberal government. Twenty years ago, virtually all the villages and smaller towns in my area were served several times daily by either bus or train, and in many instances by both. Gradually over the last 20 years these means of public transportation have been withdrawn to such an extent that many communities now have no access to larger urban centres. This is a serious handicap for pensioners, for those who do not drive and for single car families where the breadwinner has the car all day. In many instances it causes commuters to waste gasoline energy when they would otherwise use public vehicles for going to and from work in the cities. At a time when efforts are being made to encourage people to live outside the large urban and metropolitan areas, this lack of public transportation is a significant deterrent.

All rail passenger systems were discontinued in midwestern Ontario on November 1, 1970. This was done as a result of a decision by the railway transport committee of the Canadian Transport Commission under the authority of the National Transportation Act of 1967. Public hearings were held to review this measure in the spring of 1972, in London, Chatham, Stratford and Walkerton. It has been 2 Vi years since the public hearings were held and release of the report by the Standing Committee on Transport and Communications which recommended that the rail service for this area be reinstated. This recommendation of the Standing Committee on Transport and Communications was submitted to the Minister of Transport (Mr. Marchand) in a letter sent on April 3, 1974, to the Hon. E. J. Benson, president of the Canadian Transport Commission. The minister referred to expressions of concern by the public and members of parliament that public transport services in the region were inadequate, or in some cases non-existent. He requested that the commission, in co-operation with provincial authorities, undertake a review of the situation. At present the passenger rail service has not been reinstated.

Having spent thousands of dollars on public rail hearings in this area, and with the report of the Standing Committee on Transport and Communications recommending the reinstatement of rail service, why has this government done nothing to implement the recommendations or offer a viable alternative such as bus service? The Fifth Report and Review by the Canadian Council on Rural Development, dated December, 1973, and entitled "Commitment to Rural Canada" states, on page 13, under the heading "Rural Predicaments" that improvements in communication and transportation networks make accessibility easier and extend the size of the area served by

28543 - 37)4

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November 26, 1974

The Budget-Mr. Holliday

urban centres. Mr. Speaker, while the networks may be there, the total absence of public vehicles on these networks makes a mockery of the succeeding statement on page 21 that "the ultimate goal of development is, therefore, the improved well-being of the people."

I would like now to deal with three topics essentially of national concern but relatively ignored by our government save for paying them lip service. I refer to the problems of inflation, inadequacies in the field of medical research and, finally, the utter failure of the government to adopt policies designed to instil a sense of dignity, self-pride and self-respect into Canadians. Inasmuch as this is a budget debate, it would be only appropriate that I should refer to the problem of inflation. To be sure, the Minister of Finance (Mr. Turner), who is present in the House, referred to it several times in his budget address. Although physicians are sometimes acknowledged as being inept and lacking in business acumen, it takes very little expertise on my part to realize that what the Minister of Finance is offering this country serves only to fan the flames of inflation.

Even I can realize that year after year of deficit budgeting, with its concomitant expansion of the money supply and credit, can lead to nothing but uncontrolled inflation. And, of course, one does not have to read for very long either books on inflation or the daily newspapers to realize that world authorities on economic and fiscal policies are saying the same thing. But, Mr. Speaker, we have had a government for the last six years, and will for the next four years, that has found it can buy the votes of the Canadian people by offering them ever increasing give away programs by the single deceitful procedure of expanding the money supply. Sir, it is nothing short of reprehensible that this government should, for reasons of its lust for power, commit this travesty on the Canadian people.

Next, Mr. Speaker, I would like to discuss certain aspects of our health care system which I feel are deficient and which I believe our government finds it expedient to ignore. One could devote one's total time allotment to discussing problem areas in health care. By the same token, governments that promise the people "the best health care available" are simply ignoring costs for, as in education, the limits are infinite. Before making rash promises it would be prudent to try to determine what good health care really is, or, in short, how one measures the quality of health care.

This brings us to the question of medical research. The recent Liberal administration has been satisfied to adopt, once again, the politically expedient stance of giving or providing "free" health care to all Canadians. As mentioned when discussing inflation, more votes can be secured by offering the present expensive system of health care whereby, until lately, the prime focus has been on high-cost, hospital-centred care. To invest money in researching how to provide more effective health care and, more important still, how to measure the quality of health care is not something that is newsworthy or vote-catching.

Over the years government funds for medical research in Canada have gone almost entirely to furthering research in the basic sciences and clinical branches of medicine. And even in this area the amounts made available in Canada are pitifully small in proportion to what the USA and Scandinavian countries provide. Commendable as this type of research is, and acknowledging the contribution that has been made to a better understanding of the etiology and treatment of disease processes, we have completely overlooked the funding of operational research and how we can better put to use the clinical knowledge that is made available to us. In short, how does one measure the quality of medical care?

Medical associations have recognized this challenge as of paramount importance and have even made attempts to enter this difficult field of study, only to be stalled for lack of funding. Again I say, it is fine for governments to promise complete care from the womb to the tomb, and by so doing remove all responsibility from individual citizens most of whom could well provide for themselves at lesser cost; but where the problem is too great for individuals or even large associations to cope with, the government abdicates its responsibility to the people as in the question of how to assess the quality of health care. To illustrate how our present government views this whole matter I would refer to a working document published in April, 1974, entitled "A New Perspective on the Health of Canadians." The Minister of National Health and Welfare (Mr. Lalonde)-who is present in the House, I am pleased to say-has his name on the cover, as would an author, and, indeed, he has written the preface, or at least signed it. I went through 76 pages of this treatise looking for some reference to quality, and at the end of a 12-page chapter headed "Major Problem Areas in the Health Field" I finally found, in the second last word, the one and only reference to quality in the statement that we had to "ensure accessibility to quality service." There is no suggestion that we might have to research what quality service is, in fact. However, the same chapter discusses the health status of the population in terms of life expectancy, mortality rates, causes of death, morbidity, problems in the organization and delivery of health care and, finally, conflicting goals in the health care system-but no thought of how to measure the quality of health care. The following was even admitted:

No such public demand exists for research and preventive measures. As a consequence, resources allocated for research, teaching and prevention are generally insufficient.

How is that for leadership, when a cabinet minister not only fails to recognize the existence of a problem, but even when he does he states that no funds would be available if there were no public demand. That same chapter discusses the problem of costs of personal health care, stating that for a family of four in 1971 the cost was about $1,100 and that "most of the costs were met by insurance." The minister knows that this is not entirely true, and that the majority of these costs are met by taxes and not insurance.

Nor can I fail to observe, in the same chapter, the statement that "what is really needed is a measure of the prevalence of ill-health in the "population." The College of Family Physicians of Canada, with whom I have been closely associated for many years, has repeatedly been turned down by this government when we have sought funds for the establishment of an illness observation unit designed to collect and measure the very information the

November 26, 1974

minister said is needed. Finally, Mr. Speaker, as a family physician and general practitioner whose numbers represent slightly over 50 per cent of practising physicians, much could be said about the problems which they face. However, since I have been discussing the problems of medical research I would be remiss if I neglected a major problem affecting this important and rapidly growing group of doctors.

Traditionally, medical research has been done at university centres under the aegis of a principal investigator who is normally a salaried member of that institution. But we have now entered a new era where medical teaching and medical research, particularly in the field of family medicine, must increasingly be done by private physicians out in the real, live world of general practice. Again, the government is dragging its heels by failing to recognize that physicians out in practice have to sacrifice income and earning power in order to devote time to operational research and morbidity studies. Unlike the university-centred principal investigator, these physicians must be remunerated for time spent on research. Once again, it is the people of Canada who suffer in the long run due to the failure of this Liberal administration to adjust to changing times.

Finally, Mr. Speaker, time does not permit me to deal adequately with the more philosophical yet very real problem of how our government is gnawing away at and destroying the very fibre of our Canadian citizens. The budget which we are debating serves only to aggravate this insidious process of decay of human worth and selfrespect by paying people for doing nothing, instead of using the money to reward them for doing productive work. The October, 1974, letter of the Royal Bank of Canada states:

Government is an art to be learned, like medicine or engineering or law, or any other profession, and not merely an office to be won.

This government may have won the office but it is still groping for the art.

Mr. Raynald Guay (Parliamentary Secretary to Postmaster General):

Mr. Speaker, I would like to take this opportunity to congratulate you as well as the Deputy Speaker and Chairman of Committees of the Whole (Mr. Laniel), the Deputy Chairman of the Committees of the Whole (Mr. Penner) and the Assistant Deputy Chairman of the Committees of the Whole (Mrs. Morin). I am sure you will justify your reputation of earnestness and impartiality while acquitting yourself of this task which is so burdensome these days when you must preside over the discussions of a Parliament housing the representatives of four different political parties.

Even if the budget presented by the hon. Minister of Finance (Mr. Turner) did not generate unanimous enthusiasm, it did seem to please the majority of the members in this House and, I think, most other Canadians as well as it provides for a number of positive policies aimed at fighting against Canada's present number one problem which is inflation.

In 1973-74 we tried more or less successfully to fight inflation and unemployment. Of course, the economic position of the United States did not help us as everyone

The Budget-Mr. R. Guay

knows that our own economy is closely involved with that of our neighbours. However, I think that this budget speech contains certain measures which can give more independence to Canada and will allow us to overcome this problem of inflation.

Certain budget policies are interesting especially concerning the following subjects: suggestions concerning resource taxation, adjustments to the equalization payments system, provisions to stimulate housing, support for investment, important decreases in personal income tax and, finally, savings protection.

Some other provisions included in last May's budget have been added, to wit: taxes or exemptions in certain fields, stronger stimulants for small industry, improved registered retirement savings plans, new legislation for the reorganization of companies and finally provisions to reduce custom duties.

With regard to some of the proposals, I should like the Minister of Transport (Mr. Marchand) to give us more details on how he intends to set up the merchant marine which was mentioned briefly in the Speech from the Throne.

Does he intend to set up a department, a commission or an independent body to do so? As for me, Mr. Speaker, I feel that a department in charge of the merchant marine, as well as of all matters pertaining to transportation by water, would be ideal, considering some of the criticism the Department of Transport has been subjected to; it is a huge department, composed of several divisions. I feel that solution would free, not only the Minister of Transport from part of his responsibilities, but also the administrative mechanism of that department.

Having said this, I wish to congratulate warmly the Minister of Transport for his tenacity throughout the years in wanting to give us a merchant marine. As a matter of fact, he fought for that idea even when he was in the CNTU and since then, he has kept on believing in it and doing everything possible to achieve it. Progress in that direction is now encouraging, but does the minister know when it can become a reality?

That is an area from which our country has been absent for many years, although Canada ranks among the most important trading nations in the world. The benefits which would result for our economy would be many, in view of the increasing amount of products such as grains, oil, ores, coal, lumber and a great many other commodities which Canada must export.

It is difficult to accept that Canadian ships or ships under Canadian flags are nearly absent from this area. In my opinion, this is a matter of important national prestige. I was very glad to hear this mentioned in the budget speech, and I dare hope that the money that will result from the new tax on natural resources will help equip Canada with a merchant marine, thereby allowing our own people to transport our own resources aboard our own ships.

Another matter closely related to shipping has to do with shipyards. Our last program, known as STAP, that is the Shipbuilding Temporary Assistance Program, has en-

November 26, 1974

The Budget-Mr. R. Guay

abled the ones we have to build over thirty ships for foreign owners, while gaining valuable experience in the construction of heavy tonnage units and developing new building methods.

I think that the government would be well advised to keep this program and enlarge its scope so that it may be applied to shipowners who could benefit from it either by increasing or streamlining their present fleet. I do hope that the departments concerned will take the necessary measures to assure the survival and the maintenance of that fleet. This program is to expire on March 31, 1975.

Always with regard to shipyards, my riding at Levis has one very well known all over our country if not all over the world. In the past few years, at least four departments have been preparing a study for a report on the feasibility of building a giant dry dock in the Lauzon shipyards. I am eager to know when that report will be tabled. As far as coastal traffic is concerned, I note with utmost satisfaction that several of the points I made in my budget speech last year did materialize.

At that time I also drew attention to the pension fund for CN workers. Some commendable improvements were brought to the pension plan for retired CN employees, but I think the basic problem has not yet been solved, namely pension rates for retiring employees. CN employees are now wondering why, as employees of a Crown corporation, they are not being treated exactly like employees from other corporations under federal jurisdiction.

I believe their demand is reasonable, and I think their pensions should be geared to the cost of living.

Another problem inherent in inflation is that of agriculture, and especially farmers. I have no need to emphasize the very serious situation of egg, grain, and beef producers, and even sugar producers now, since all that is being accurately reported on by mass media.

The government also admits to that emergency situation. Therefore, I would like to see measures developed rapidly to prevent those disasters which we will necessarily head for if we do not take immediate action. The government should act more quickly in respect of food products and especially sugar.

What is the Minister of Agriculture (Mr. Whelan) waiting for to make a statement on those measures and programs for helping farmers produce more sugar beet? Besides, the Minister of Industry, Trade and Commerce (Mr. Gillespie) should enter as soon as possible into international agreements with sugar producing countries and of course try to get the fairest, that is the cheapest prices.

Incidently, I would like to make a few comments on the Plumptre Board. The Plumptre Board has no powers but an informative role, or at least that of a watchdog, if one looks at what happened last month in the Ottawa area. We know that the Plumptre Board made a survey during over five weeks going from store to store, checking prices, publishing price differentials. Fortunately, because the Plumptre Board was there, last month's statistics prove that only the Ottawa area did not register higher food prices. For that reason I welcome the work of the Plumptre Board.

As I said in my opening remarks I will not praise indefinitely the Plumptre Board because I know it has no

power but at least until we take further steps it continues to play the role of watchdog it plays so well at present.

Another suggestion comes from the farmers themselves. Recently Quebec farmers at a convention asked the federal government to intervene directly into the beef problem. It replied that the matter came under provincial rather than federal jurisdiction. I confess this is true but it is also true that we were elected to this House by the people of this country and it is our duty to help them when they ask us to do so.

When he next meets with his provincial counterparts, will the Minister of Agriculture consider setting up an agreement scheme providing for special intervention by the federal government when the people of this country ask for it and when situations such as those we faced and we now face call for it? Mr. Speaker, the people of this country need to be reassured, and I sincerely hope that this Parliament will take the necessary steps to ensure more stability in our economy.

Mr. Speaker, this is my first speech since the election of July last, and I want to thank the voters of the riding of Levis who elected me for a fifth consecutive time and put their confidence in me so I would vindicate first their interests and contribute with my colleagues to passing legislation guaranteeing them more justice and a happier life. I want to assure them that I will do everything in my power not to betray their confidence.

Mr. Derek Blackburn (Brant):

Mr. Speaker, for those of us who sit on this side of the House it is always a challenge to participate in a budget debate because in my view Liberal budgets are almost always deceptively misleading at first glance. This budget is certainly no exception. Not only is it deceptive but it is, in my judgment, misleading. Moreover, it is based on highly questionable assumptions with respect to the predicted rate of growth of the economy and the export outlook of our durable goods. But most significant of all is that at a time when Canadians on low and fixed incomes are not making ends meet, and when Canadians in the middle-income bracket are bearing an increasingly burdensome share of taxation, there will be neither relief from inflation nor any meaningful relief from taxation.

Indeed, Mr. Speaker, this budget is one of the most regressive budgets we have seen in the past six years. It harks back to the days before the Carter commission on taxation. It is a piece of classical nineteenth century Liberalism. It is a budget for the wealthy, for the big corporations, for the foreigners who own and control our resource industries. It is a budget for the big investors. This is not a budget for the hundreds of thousands of ordinary Canadians, many of whom supported the Liberals last July hoping that the Liberal Party would finally come to grips with the spiralling cost of living, high unemployment and the growing dissillusionment in general with respect to politics, politicians and governments.

When fully appreciated by the Canadian people, this budget will serve only to heighten their suspicions that government in Ottawa today is no longer responsive to their basic needs; that it no longer cares about decent housing at reasonable prices; that it no longer cares if

November 26, 1974

ordinary Canadians are paying over 75 per cent of their incomes in taxes, food and accommodation; that it no longer cares about the widening gap between those who have wealth and power and those who have neither. In short, Mr. Speaker, this budget will do nothing to redistribute more equitably and more humanely the great wealth of this nation. In reading the budget one gets the impression that the mandarins in the Department of Finance have not changed their philosophy since the grand old days of the Manchester School. Joseph Chamberlain would have been proud of this budget. What a short way in economic philosophy we have come in one hundred years!

I am sure, Mr. Speaker, that hardly a day goes by that members on both sides of this House do not receive letters from their constituents asking why building lots which sold for $8,000 two years ago now sell for $17,000; why basic food staples such as bread, milk, meat and vegetables have nearly doubled in price in the same period of time; why mortgage interest rates have priced the average home buyer out of the market; why bank interest rates, even backed by collateral, have soared to 18 per cent. The list could be extended, but suffice it to say that Canadians across this country are growing angrier by the day as they see their real income falling behind at the same time as their suspicions of price gouging and profiteering are increasing. It is this deplorable situation that is dividing our nation and leading to social tension and mistrust. And this budget has done nothing to allay our people's fears, suspicions and frustrations.

If we cannot learn from our own mistakes, Mr. Speaker, why cannot we learn from the mistakes of other countries such as the United States where division between rich and poor has been the major cause of violence and social upheaval? I hope that some day the Liberal Party will abandon its old-fashioned posturing and face up to the realities of the latter half of the twentieth century. Let us look at some important aspects of the budget as they affect ordinary Canadians. The Minister of Finance (Mr. Turner) said that "continued attention must be given to mitigating the effects of inflation on the more vulnerable members of our society". Just what attention has he in fact given? The government is going to give $500 to every Canadian who is buying his first home. This was a great election gimmick. But how many will be able to take advantage of this "gift"? In the first place, the house must be a new house. In the second place, the cost of the house must fall under a certain ceiling, which in my constituency of Brant is about $34,900; but in the city of Brantford, in which I live, it is impossible to purchase a new house for less than $38,000 or $40,000. So much for that "gift".

Has the government done anything about the exorbitant interest rates home buyers must pay even if they can afford the down payment? The answer is, of course, no. But the government is prepared to allow trust companies and other mortgage firms to borrow more money for mortgages, even though there has been no evidence whatsoever that, over the past three years, as more mortgage money became available interest rates went down. The opposite was the case. This is why most Canadians cannot buy a house today, Mr. Speaker. They simply cannot afford the

The Budget-Mr. Blackburn

carrying charges. Their monthly budgets will not permit it, and they cannot just print their own money. The budget did state that the government will allow Canadians to save $1,000 a year up to ten years, for a total of $10,000, and deduct this from their taxes. But how many Canadians can afford to save $1,000 a year? Again, very few; and certainly not those on low or fixed incomes-certainly not the very Canadians who so desperately need better housing.

There is little indication in this budget that the federal government is prepared to push its land assembly scheme of which it was so proud a couple of years ago; it is simply dragging its feet. But the government is not dragging its feet when it comes to the wealthy real estate investor. Lawyers, doctors and wealthy businessmen will now be able to form syndicates for the purpose of building large luxury apartment buildings, because they are now to be given a 100 per cent capital cost allowance write-off against all other forms of income if they invest in rental accommodation. What a fantastic new tax haven for the rich! We in the New Democratic Party believe that decent housing in a country such as Canada should be the right of everyone. The only way this will ever come about is by greater government intervention in and control over housing, not by giving tax hand-outs to the wealthy. We have seen far too much of this in the past. And because the private sector controls the housing industry, we have seen residential building lots double and even triple in price in the past four years.

The Minister of Finance has announced that the federal sales tax on building materials would be reduced from 11 per cent to 5 per cent. Again, at first glance this may look like an effective means of lowering the cost of housing. Indeed, for a short period of time the advantage here may be passed on to the home buyer. But in fact, whenever hidden federal sales taxes have been eliminated or reduced in the past, prices have mysteriously climbed back up again. Look at the price of footwear and clothing for children. This sales tax reduction will ultimately benefit, not the home purchase but the large developer, the guy who has had it so "rough" during the past three or four years. So, Mr. Speaker, in the field of housing for those who most need it, this budget is a farce. It is worse than that; it is contemptible.

I would now like to turn my attention to the "fantastic tax breaks" that ordinary Canadians are going to get from this budget to "mitigate the effects of inflation", as the Minister of Finance so benevolently put it in his budget address. In the first place, those whose incomes are so low that they do not pay income taxes get no breaks in the budget, because this budget is not in any way designed to curb inflation. They will continue to suffer the ravages of inflation without any mitigation whatsoever. Again there is the deception I referred to earlier, Mr. Speaker.

But what about those Canadians who are on low and middle incomes and do pay taxes? Under existing law, taxpayers are entitled to reduce their federal tax liability by 5 per cent, with a minimum tax credit of $100 and a maximum of $500. This budget will increase the minimum by the paltry sum of $50, and the maximum by $250. So the guy at the lower end of the pay scale gets a tax break, to fight inflation, of 97 cents a week, when in fact his pur-

November 26, 1974

The Budget-Mr. Blackburn

chasing power declined by nearly $6 a week during the past year alone. The Minister of Finance, in granting this "fantastic tax break", has the unmitigated gall to ask working men and women to exercise restraint at the bargaining tables this year. What deception!

However, if your income happens to be around $30,000 a year, you can claim a tax credit of $750. It is this, Mr. Speaker, that makes this budget to regressive, so unfair and so oriented toward the wealthy in our society. I ask, how can a struggling family in Canada today fight inflation with a tax reduction of less than a dollar a week? The price of food and rents is going up; houses are beyond the reach of not only the poor but the middle income earners. Yet the Minister of Finance says his budget will "mitigate the effects of inflation". That is so much rubbish. In virtually every situation since the Second World War, wage increases have come after the effects of inflation have reduced the purchasing power of working people. No reputable economist has suggested that the latest round of price increases has been caused by pressure from wage demands.

Is it any wonder that thousands upon thousands of Canadian workers, men and women, are becoming deeply frustrated with the present spiralling cost of living? No one in his right mind would opt for wage restraint when he has lost nearly $6 in real wages per week and the government gives him back less than a dollar a week to fight inflation. A great deal of the labour unrest in Canada today is due to the fact that Canadian workers have lost faith in their governments to protect them against the devastating effects of inflation, with no end in sight. In his budget speech, the Minister of Finance stated that "we have to find a better way of reconciling competing interests of the various groups which make up our society". No one can argue against that. Yet statistics show that wages and salaries, as a proportion of the gross national product, have been falling steadily since 1971. In 1972, wages and salaries made up 55 per cent of the GNP; by the fourth quarter of 1973 this figure had fallen to 53.2 per cent. Meanwhile, corporate profits have been going up from 9.6 per cent of the GNP in 1971 to 13.7 per cent in the last quarter of 1973.

In his budget, Mr. Speaker, let us see how the Minister of Finance responded to this situation. First of all, he has extended indefinitely the two year rapid write-off for the purchase of machinery and equipment by manufacturing and processing companies. This extension is based on the questionable assumption that the GNP will continue at about 4 per cent when in fact the OECD, a more accurate forecaster than the Minister of Finance, predicts that the real growth of our economy could fall to 1 per cent.

Secondly, the minister's reaction to the wishes of the private sector is based on the other faulty assumption that Canada's trade will remain strong. Canada exports 60 per cent of her goods to the United States. That country is now in a recession, with no sign of improvement in sight. If we cannot sell our products to the United States-and there is already a decline-what good is the rapid write-off? I also strongly suspect that the Minister of Finance's thrust toward deficit financing is not so much to buoy up our economy but is, more precisely, to pay for the unemploy-

ment that is bound to increase as our volume of trade with the United States continues to decline. I suppose we will just have to wait to see what taxpayers across the country, generally speaking, will have to pay for unemployment insurance benefits in 1975.

This budget, Mr. Speaker, also has seriously reversed the government's earlier decision to create a greater public presence in our resource industries not only in terms of investment but in terms of important decision-making. Now the emphasis has been shifted back to the private sector, to those "poor, destitute" companies like Exxon, Shell, Texaco, BP and so on, whose profits have been soaring as the retail price for gasoline and home heating fuel has soared. In fact, within a year we may well be paying over $1 for a gallon of gasoline. As the Minister of Finance has implied, the primacy of the private sector in the resource field is reaffirmed. This is a serious, retrograde step.

Unless Canadians, through their elected governments, gain greater control over their natural, non-renewable resources, we will be a have-not nation within a generation. Why, then, I ask, is the federal government bent on lowering the tax rate on petroleum products from 30 per cent in 1974 to 28 per cent in 1975 and to 25 per cent in 1976? And why the 100 per cent write-off of exploration expenses? These measures will put hundreds of millions of dollars in the corporations' hands, only to be stacked up with other little goodies like tax deferments. Again I repeat, this is a rich man's budget; it is a corporate budget; it is not a people's budget.

Here we have a situation where the Minister of Finance says we must lessen the burden of inflation on those most vulnerable, yet does nothing for the most vulnerable. He reaffirms his faith in the rich, powerful, corporate elite by giving them even bigger hand-outs and tax concessions, and does nothing to place our depleting natural resources in the hands of responsible, democratically elected legislators. At the same time, no doubt to protect himself later, the Minister of Finance admitted that not only would food costs remain high but they would probably go even higher in the coming year.

We in the NDP presented a policy during the last election campaign-a policy I admit the people of Canada did not accept-to establish a prices review board with power to investigate suspicious increases in prices and to roll back those increases if they were clearly unwarranted. We still demand this as the only safeguard for the average Canadian against price gouging and profiteering. But with four years of majority government ahead of us, I doubt whether this will ever become government policy. In the meantime, Canadians will continue to pay more and workers, organized and not organized, will not only bear the brunt of this tragic situation but they will continue to be unfairly and unjustifiably blamed for it.

I would like to turn my attention to our senior citizens. As of October 1, a single pensioner receiving the maximum old age security and the guaranteed income supplement was receiving just over $200 a month. The average rent for a one-bedroom apartment in the city of Brantford, where I live, is between $160 and $170 a month. Though there are a few very fine senior citizens' public housing developments in Canada, they total only 67,000 units. In Canada there

November 26, 1974

are about two million senior citizens. What did the budget have for these two million Canadians? Sixty per cent of these people will derive no benefit at all from the budget because they are receiving the guaranteed income supplement. For those whose incomes prevent them from getting additional assistance because of private pension schemes, there is a benefit. For this I am personally pleased, because now they will be tax exempt up to $1,000 a year on income from private pensions. But, I repeat, the majority will get no benefits whatever, not even an increase in the basic OAS.

It is also worthy to note, Mr. Speaker, though tragic, that there is nothing in this budget to assist the native peoples of Canada. Once again they have been totally ignored. Some time ago I asked the Minister of Finance if he would grant a tax concession to retired Indian teachers who had taught in Indian schools on reserves all their lives. When they were working they did not have to pay income tax because of the Indian Act. Now that they have retired they find they have to pay income tax on their superannuation, yet the source of income is the same-the federal government. In view of the fact that both their salary and superannuation are considerably lower than those who teach or have taught off reserves, I asked the Minister of Finance if he would eliminate this tax on superannuation. He passed my representation on to the Minister of National Revenue (Mr. Basford) whose executive assistant sloughed it off with departmental jargon showing lack of both sense and compassion. I intend to pursue this issue further.

Mr. Speaker, my time is running out, if it has not already, but 20 minutes is not enough time to attack a phony, misleading budget. In conclusion, I have searched in vain for the answer to the question, what has this budget done for the average Canadian? Is there anything in it of substance to effectively cure the monster which is gobbling up everyone's savings, driving up the cost of living and provoking conflict between unions and management? No doubt those who do not have will be the payers for those who do. As I have pointed out, the only persons who got a break on November 18 are the wealthy, and the corporations; and by no stretch of the imagination can anyone say that prior to the budget they were the most vulnerable members of our society. This budget is so out of tune with the economic realities of today that I predict we will see another budget within six months. But I am not holding my breath; we will probably just get another replay.

Mr. Irenee Pelletier (Sherbrooke):

Mr. Speaker, I am especially glad to take part in the debate on the budget.

We have two opportunities each year to express our personal opinions on subjects which are important to us. Today, I would like to tell you about my opinions and make a few remarks on a very current subject and certainly one of the foremost problems of our time-that world poverty and particularly starvation.

Mr. Speaker, I would have liked to tell the House about the social economic problems of the area and the constituency which I am privileged to represent. However, during the debates on bills to be brought forward during this Parliament, I will have other opportunities to talk

The Budget-Mr. I. Pelletier

about this and to describe the economic situation in my constituency where economic readjustment remains slow.

The subject about which I shall talk today is much more general and much more far reaching, but it still concerns the people of my area. It is the problem of poverty and hunger in general.

The measures announced by the hon. Minister of Finance (Mr. Turner) in his budget speech are extremely important for the Canadian economy and we shall have other opportunities to discuss them. However, Mr. Speaker, I was extremely glad to note the remarks of the Minister of Finance when he said, and I quote:

Our countries, including Canada, must review their foreign aid programs in the light of ...

-the present situation.

Canada must, at the minimum, help these people meet the most urgent and basic need of their people-food.

The minister also stated: We also intend to expand all our contributions to developing countries capable of increasing their own food production.

These are moral commitments. We intend to fulfill them.

Mr. Speaker, I had the privilege and the honour to be a member of the Canadian delegation to the world food conference held in Rome from November 3 to 17 and I thought it might be interesting to tell my colleagues in this House about some of the comments that were made recently at the conference and generally outline the international food situation as described at the conference as well as the Canadian position assumed at Rome and the possibility of substantially increasing our aid to developing countries.

For a dozen years certain international agencies, especially the World Health Organization and the Food and Agriculture Organization, have been warning the world about the possibility of a food shortage and giving ways and means to avoid the crisis now confronting us on a world scale. What has brought us to this point? Whatever the reason, said United Nations Secretary General Kurt Waldheim at the beginning of the conference, the crisis is facing us and we therefore must act now.

It is paradoxical, Mr. Speaker, that the present world food shortage, accompanied by malnutrition, which has never been so widespread, should happen at a time when the potential of technological progress is taking on unprecedented proportions.

When the FAO launched an invitation to all the countries of the world for a world food conference, everyone was asked at the start to present concrete provisions and to suggest immediate solutions to the extremely urgent problem of hunger in many areas of the Third World.

In many ways, and especially as to concrete provisions, one could say that the Rome conference was half a success.

On the other hand, the fact of having brought to the attention of the world the main ingredients of this complex problem of hunger and thus revealing the alarming proportions of the situation is sufficient evidence that the Rome conference was a success.

How is it that the food problem, the problem millions of people face to feed themselves, and the malnutrition prob-

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lem should have suddenly appeared at this particular moment?

In his opening address to the World Food Conference on November 5, the Secretary General of United Nations stated:

The situation is indeed critical. World food production which had shown a disastrous decline in 1972 has reached levels which in the historical perspective may be reasonably high, but have never allowed to a security margin nor to meet the spiralling demand ... From now on, to alleviate, the difficulties of the world strategic reserve, we can only rely on .about 25 million hectares of tillable land unused in the land banks of the United States.

The Conference held in Rome has provided most of the delegation with the opportunity to state openly their policy with regard to the serious food problem. In one of the most noted statements during the Rome Conference, the Honourable General Carlos Romulo

-Secretary of Foreign Affairs of the Republic of the Philippines and chairman of the Philippine delegation to the UN food conference, in a speech entitled "What went wrong?" said:

I dare suggest to my fellow delegates from developing countries that there must be something wrong with our development plans, something wrong with our objectives and priorities, something terribly and disastrously wrong, when 25 or even 30 years of independence and development have only led us to this sorry pass, to this crisis-and I know it is an overused word, but I can find no real equivalent-to this crisis of world hunger.

What went wrong? Where did we take the wrong turning? I am aware, deeply aware, of the aspirations and expectations of our peoples, or-more accurately-of their leaders and planners and decisionmakers. After centuries of colonial exploitation, of producing raw materials for the industries of the metropolis, of being captive markets for its manufactures, of being "hewers of wood and drawers of water", we were driven by the desire, by the urgent political need, to develop our own economies, to be economically independent, to give employment to the landless workers crowding into our new cities, to mean something in the world, to be respected and taken into account, to find our "place in the sun".

Surely, this was not wrong. Surely this was a legitimate objective, a legitimate aspiration.

What was wrong, what went wrong, I dare suggest to my colleagues from developing countries, was our understanding and appreciation of priorities and of the economic and social, and by that token also the political realities.

The question, the hard question, the unavoidable question, we must now ask ourselves is this. What is the purpose, what is the use, of brand-new factories, or even of a nuclear device, when millions of our people do not have enough to eat? When an unacceptable proportion of our children die before leaving infancy? When those who survive are stunted physically and mentally? What price, then, a nuclear bomb or the missile to carry it across the globe?

Similar remarks, Mr. Speaker, have been made by many heads of delegation in respect of developing countries themselves. Some reproaches have been directed to the developing countries for the exercise percentage of their gross national product earmarked yearly for national defence.

Some delegations have also pointed out the fact that several developing countries accept to make investments sometimes somptuous but of little importance for the basic development of their social and economic potential. Sever-

al reproaches may certainly be directed to the developing countries. But the same is true, Mr. Speaker, for the developed countries, and in this respect, I think the latter have a major responsibility to shoulder for the present world food crisis.

Most of the developed countries' delegations at the Rome Conference have been disappointed, and this in many respects. Everyone thought that the developed countries represented at the Rome Conference would make concrete propositions and contribute a substantial aid for the difficult food problem which is rampant in many parts of the world. For many countries faced with serious food problems, it has been a great disappointment. We can say, Mr. Speaker, that amongst all the countries which have sent a delegation at the Rome Conference, Canada has certainly been one of the countries whose propositions have been best received, not only by the developing countries but also by the developed countries which have appreciated the Canadian position as a firm, sensible and realistic one.

Everybody agrees that Canada has an enormous food potential. Moreover, agriculture, not only in developing countries, but also in developed countries, is presently under-going huge difficulties. A great variety of factors explain why the agricultural sector now has to face extremely intricate problems.

Millions of people in several countries of the world not only do not eat their fill, but are positively starving. Only a short time ago, the FAO stated in one of its publications that 10 to 15 million people died directly or indirectly from starvation or malnutrition every year. Several countries had agricultural and food surpluses, possibly not this year, but just a few years ago. Many countries voluntarily slowed down agricultural production, and also destroyed food stocks. Considering the rise in oil costs and its incidence on the increased cost of fertilizers, and considering that political leaders of many countries in the world find it extremely difficult to deal in a positive and definite way with that huge problem, may I say, Mr. Speaker, that the contribution of rich countries in the Rome conference was so scanty that we might regard as somehow shameful the parsimonious commitment of rich countries to those countries to which they are so much indebted.

We all know the advantage taken by several countries, purposely or unvoluntarily, of the huge differences in rates of change and of an all too often unfair trade situation.

Canada had a prominent role in that conference, and our Minister for External Affairs (Mr. MacEachen) indeed made a key speech in the Congress House. The Secretary of State for External Affairs stated in his speech and I quote:

We in Canada will not shirk these responsibilities, and are willing to play our part in furthering those common endeavours which bear promise of helping to produce a lasting freedom from want for all mankind-but the endeavours will remain barren if they are not truly common and truly sustained.

A little further on, the minister said:

We are now carefully re-examining the skills and resources that may exist in Canada suitable for assisting the development of new agriculture and fisheries capacity in developing countries to determine practical ways of making them readily available. We therefore intend to have a matching response for countries who set about energetically to

November 26, 1974

mobilize their internal food production resources and who give a high development priority to efficient food production.

In a more encompassing perspective, the minister stated:

-mankind has no choice but to arrange his feeding in harmony with a balanced use of all the earth's resources, or his civilisation will go the way of those of Nineveh and Babylon-which destroyed the soils that fed them.

There are several ways, Mr. Speaker, to change the present food situation in several countries of the world. There is, of course, food assistance and plain help to developing countries, which must be considerably increased. In many countries, there is a lot of waste that must absolutely be prevented. Sacrifices must be made by some nations if they want to put an end to hunger. As regards our country, people must be made aware of the problems of poverty in general and of nutrition in the third world in particular. This awakening must be done not only by the decision makers, but also at the whole population level. Here, Mr. Speaker, non-governmental agencies can play a major role. Mention must also be made of the important part these agencies played at the Rome conference. I am convinced that they will pursue their awareness campaign throughout the country. In our efforts to try and change the situation in which several countries now find themselves, we should not forget the farmer. I was very pleased to see that the hon. Minister of Agriculture (Mr. Whelan) took the responsibility of pointing out to the delegates to the Rome conference, and particularly in the commissions, that the farmer was indeed the basic element of a reform which would make it possible for the developing countries to expand considerably their food potential. I must say, Mr. Speaker, that the hon. Minister of Agriculture of Canada was highly praised by several delegates to the Conference because of what he said and because he took the defence of the agricultural class. Two suggestions were made at the Conference in order to remove hunder in the world which are worth being pointed out. Mr. Romulo, whom I quoted earlier, stated:

Let me sum it up briefly. There is no substitute for food. You can have your factories, as many as you want; mills and markets, foreign exchange reserves, golf, oil, special drawing rights, whatever your economists and financial experts can think of and demand; but if your people do not have enough to eat, if they do not grow enough food to feed themselves, you are in trouble, deep trouble, you are in crisis.

An economic crisis, a political crisis, a moral crisis, and in the long run nobody can bail you out of it except yourselves.

Mr. Speaker, a similar statement was made by the chief of the Chinese delegation, who reminded the developing countries that they should no longer depend on wealthy countries, given their selfishness, and that from now on they should depend on their own resources only.

Although these statements are certainly commendable, for they offer, in the long run an ideal solution to our

The Budget-Mr. I. Pelletier

problems, the fact is that this solution is not possible in the short run.

Mr. Speaker, as regards development assistance, Canada can be a leader. One of our great diplomats, Mr. Maurice Strong, said a few years ago:

There are three overriding influences determining our age, one is the space race, one the nuclear arms race and the third the development race; Canada has no role to play in the first two, but in the one of the developing countries we can be a major power. We know what development means because we've done it here ourselves.

Mr. Speaker, during the two weeks of debates and discussions of the Rome Conference, one of the most remarkable contributions which I had the privilege to listen to was not made at the Palace of the Congress where the conference was held, but during the audience which Pope Paul VI granted the Conference delegates in the St. Peter Basilica in Rome. Here are some excerpts which I found particularly interesting:

This crisis appears mainly as a crisis of civilization and solidarity. A crisis of civilization, and method which appears when the development of life within a society is seen from a unilateral point of view, when considering only the type of society which results in an industrialized civilization, that is to say, when putting excessive trust in the automatism of purely technical solutions and forgetting basic human values. A crisis which appears when the search for economic success only resulting from major profits in industry intensifies, thereby causing the nearly complete abandonment of the sector of agriculture and the accompanying neglect of its highest human and spiritual values. Also, a crisis of solidarity which maintains and sometimes accelerates the disparities between individuals, groups and nations, and which unfortunately results-as it is increasingly obvious-from the insufficient will to contribute to a better sharing of available resources, especially with underdeveloped countries and with human sectors which are still living under an essentially primitive type of agriculture.

We are therefore faced with the paradox of the present situation: Mankind has an unequal power over the universe; it possesses tools by which full productivity can be obtained from its very resources.

Will the very people who hold those instruments remain struck with paralysis in the face of the absurdity of a situation in which the wealth of a few would tolerate the persistent misery of too large a number, in which the highly enriched and diversified food consumption of a few nations would be content with the vital minimum granted all the others, in which human intelligence could alter the fate of so many gravely ill and yet would shirk the task of ensuring adequate food to the most vulnerable peoples of humanity?

Should it come to that, grave errors in orientation will have been committed, though perhaps at times only through neglect or omission. It is high time to discover how the mechanisms have been warped, that the situation might be rectified or rather set upright from end to end.

And finally, the Pope added:

To you who are engaged in a task at once so difficult yet so rich in promise, we put forward two principles to guide your work: on the one hand, to face up to the data of the problem without allowing yourselves to become bewildered in your evaluation of them through panic or through excessive timidity; and on the other hand to feel yourselves sufficiently stimulated by the absolute urgency and priority of the needs in question so that you will not be satisfied in any single case by delays or by half measures. This conference will not resolve everything on its own; it is not in its nature to do so. However, through the clarity and energy of its conclusions it will give the impetus to a series of effective and sincerely accepted commitments; or contrary to the expectations placed in it and in spite of the goodwill of its members, it will have been held in vain.

28543-38)4

November 26, 1974

The Budget-Mr. Stevens

>

Mr. Sinclair Stevens (York-Simcoe):

Mr. Speaker, I think one should try to assess why the Minister of Finance (Mr. Turner) is unique in not having been subjected to

more criticism during his tenure as finance minister in this government. Anyone reading the budget speech will learn the answer, I suggest. The minister is unique because he has discovered that if you want to keep out of trouble, you must do nothing. Anyone examining the minister's record will see that it is a record of drifting. It has been his policy that this country should drift aimlessly in its dealings on the world market, in its approach to modern economics, in allowing inflation to take its course and in allowing other economic pressures to take their course. He has done little to control the inflation ravaging this country.

When one deals in billions of dollars it is easy to lose perspective. Therefore, I think it is wise to look at what has been happening in this country in the last ten years. According to current estimates before the House, the government plans to spend in the current year almost $26 billion, compared with slightly under $10 billion which the government spent in the year before the present Liberal government assumed power. Total government spending in the 1974 fiscal year was slightly under $20 billion; this year it is to be slightly under $26 billion. It is to spend 30 per cent more in one year. Or, putting it another way, the government is to increase its spending at the federal level, in one year, by an amount equal to the total federal budget of the early 1960's. It is time members of the House asked for this trend to be arrested.

I was disappointed in the statement the Minister of Finance made on CTV. He said he would attempt to hold spending this year down to a 15 per cent increase and then he said, as reported in the newspapers:

Now it's intensely difficult in the political process to hold these expenditures down.

Why is it so intensely difficult for the government of Canada to do what is prudent and hold expenses down, when virtually all other nations are trying to do that and are succeeding? The United States intends to hold its budget this coming year down to $300 billion. If our minister were, say, minister of finance in the United States he would increase that country's spending to $345 billion. They would spend $45 billion more than they intend to spend this year.

The actual situation is more alarming, Mr. Speaker. Estimated government spending in the current year, that is, the 1975-76 fiscal year, will run, according to the appendix to the budget speech, at $28,750 million. But there is a footnote which says that this is a mid-point range; in other words, expenditures could go up to $30 billion just as easily as they could go down to $27 billion. That is significant. If you add 15 per cent to the minimum of $26 billion the government estimates it will spend in the current year, you will add slightly under $4 billion and the total will be slightly under $30 billion. I suggest that if the Minister of Finance has been completely candid he would have admitted that the government intends to spend $30 billion in the current year, and not the more modest figure he mentioned on budget night. The formula can be expressed another way: the government has been spending at the rate of a 40 per cent cumulative increase per year at the

federal level. How can we arouse the Canadian public to the dangers entailed by this spending spree being indulged in by Ottawa?

I wish to deal with specific items in the budget. Two particularly distressing points should be mentioned. The first is the government's persistent attitude concerning the taxation of resources. It is particularly unfortunate that the government has chosen to confront the provinces on the question of resource revenue sharing. The Minister of Finance, supported by the Prime Minister (Mr. Trudeau), has indicated that royalties paid to provinces with respect to oil and other resources are no longer to be deductible from income for purposes of income tax. The government's attitude on the payment of royalties to provinces is strange. The Minister of Finance confirmed yesterday evening that royalties payable to foreign governments can still be deducted from income before the federal income tax is computed.

What is the difference? Let me give an example. If a Canadian company is taking oil from Venezuela, it must pay approximately $2.28 per barrel in royalties and pay a profits tax of $6.31, for a total payment to the government of Venezuela of $8.59. Under existing Canadian law, both the royalty and the tax paid to the government of Venezuela can be considered as a business expense and may be deducted from income before calculating Canadian federal income tax.

But if the same company proposes to take oil from, say, Alberta, what happens? The royalty payable to Alberta is $2.62 per barrel. But the government says, "No, you cannot consider that royalty as an expense; you cannot deduct it from income in computing income tax." The company must pay 34 cents per barrel more in royalty to Alberta. I ask, how is the Minister of Finance justified in saying, "In no way will the royalty you pay to the province of Alberta be deductible as a business expense"? I believe this House deserves an explanation from the government. Why is this policy being followed? We need an explanation for the government's strangely changed attitude to oil taken out of the ground in this country.

I point out that while the Americans are striving to change their position from one of dependency on foreign oil to one of self-sufficiency, Canada appears to be drifting from a position of self-sufficiency to one of foreign dependency on oil. President Ford hopes to lead the United States to self-sufficiency in oil production by 1980. The Prime Minister of Canada appears to be willing to allow our country to become dependent on foreign oil by 1982. The American plan, named "Project Independence", anticipates that through better conservation measures and the development of as yet untapped oil reserves, the United States will be able to switch from being a net importer to being a net exporter of oil.

What is happening in this country? Last Friday the Minister of Energy, Mines and Resources (Mr. Macdonald) outlined an entirely different future for Canada. He released a pessimistic National Energy Board report which says that Canada will not have enough oil for domestic purposes in 7.3 years, and that we shall become dependent on oil imports in the relatively near future. Within eight months the present government has changed its position dramatically on this question. When appearing before the

November 26, 1974

Standing Committee on National Resources and Public Works last March, the Minister of Energy, Mines and Resources, when referring to oil, stated:

We can see a ten-year supply, a ten-year period during which the supply will be adequate to meet the Canadian demand.

A year earlier he said:

For another decade or longer we could continue to meet export commitments and to meet the growth of the Canadian market.

In the energy department's policy for Canada published in 1973, a 15-year reserve of oil was referred to constantly. It was pointed out that these figures did not include the oil sands reserves or northern reserves. In the space of less than a year, what has happened to Canada's oil reserves? Did they leak away? Did someone kick a hole in our oil barrel? I suggest the answer is no. We have a government that acts in strange ways. There may have been a mistake in calculations, but I do not believe it is that. I believe the government has taken its present stance with regard to oil for five deliberate reasons. First, the government plans to increase the price of oil from $6.50 a barrel to $8.50 or more. How can you suggest such an increase, however, without first claiming oil is in short supply? The industry has stated higher prices are needed before oil exploration can continue, so it is higher prices we are going to get. That will mean seven or eight cents more for a gallon of gasoline.

Second, Canada would like to cut back on oil exports to the United States. It is certainly easier to explain the cutback if you can first say to the Americas, "Honest fellows, we are running out of oil ourselves. We would like to help, but you know how it is". Third, the government intends to launch their new Crown corporation-they love Crown corporations-which will be known as PetroCan. It will be active in the oil exploration field. It can better be justified by stressing that oil reserves are low and the new state-run corporation will be needed to find new oil. On that point I would say "balderdash". PetroCan will not start to solve any oil reserve problems in Canada in a meaningful way.

Fourth, this government has done virtually nothing to encourage conservation in this country. They have not instituted a program other than the petty little $1 million advertising program that they recently suggested. They have not instituted a program to grapple with the fact we are misusing much of our energy resources in this country. I believe the present stance with respect to reserves is to get the public ready for some type of program of conservation. The government wants to dissuade the public from the belief there is virtually unlimited wealth in resource energy in this country. In short, in order to have a more effective energy conservation program I believe they are suggesting we have to talk scarcity.

The fifth reason is that previous oil reserve estimates anticipated that exploration would continue to produce new oil finds roughly equal to our annual consumption of oil and gas resources. For the past year, however, with government indecision and quarrelling with the industry and the producing provinces, the drilling rigs have commenced to pull out of our oil-fields. Little new oil has been found and the authorities are at last getting alarmed. Hence the gloomier picture.

The Budget-Mr. Stevens

It is unfortunate that we in Canada, with so many natural assets and with such great resources, have to be ruled by a government which is in a position of allowing the country to not properly manage the resources at our disposal. We do not have to become dependent on foreign oil imports. If we do, there is only one government in this country and one association that is to blame; that is the Trudeau, Liberal government which has ruled this country indecisively since 1968.

Hear, hear!

Mr. Stevens:

I now wish to touch on a second awkward point in this budget, the question of housing. As hon. members know, housing starts in this country are dropping dramatically. We have a new Minister of State for Urban Affairs (Mr. Danson). When confronted with that statement, he said, "Well maybe the forecasters say that housing starts are dropping, but it is my job to prove the forecasters wrong." I hope the minister will start on his program and soon prove the forecasters wrong. We have not seen anything in the form of legislation from that minister, nor in this budget, that would lead any forecaster to doubt his previous forecast of disaster for the Canadian housing industry.

Take the $500 gimmick to home owners. I sometimes believe that government projects rarely sound better than when they are first announced. Do you remember, during the election campaign, the promise of $500 for each and every home buyer, made by the Prime Minister? Many felt it sounded pretty good. True, with house prices soaring, some wondered if $500 would even cover one month's inflation. However, most agreed something was better than nothing. It now appears that what the government had in mind was closer to nothing than something.

Hear, hear!

Mr. Stevens:

The Minister of State for Urban Affairs announced earlier this month, and reiterated today, that the scheme would begin as of November 1, but there were conditions: the $500 would be available to first time buyers only; it could only be received if you bought a new house. In my constituency a house would have to sell for less than $44,915. With the average price of a single-family home in Newmarket now $52,318, and in Aurora $51,060, it is not likely the government will be sending many $500 cheques to that area. In fact, it is not likely they will be sending many cheques anywhere. Based on the minister's own estimate of the cost of the grants this year-$2 million-it would appear that throughout the nation less than one buyer in 200 will be eligible for the grants. That is what you call getting maximum publicity mileage out of a minimum effort.

There is an aspect of housing that is perhaps being overlooked. There is a regional disparity in this country that is not being dealt with by the present government. I am referring to the fact that a person in Toronto needs a 40 per cent higher income to buy a home than does a resident of Montreal. For example, in Ontario the average price of a single-family house is $46,899. In Quebec it is $32,600. Yet the average income in Ontario in 1972 was $6,690, while the average Quebec income was $6,286, only some $400 less. To date, however, the government has treated this problem as a national one. It has not acknowledged that if $500 is worth anything, one needs more than $500 in the

November 26, 1974

The Budget-Mr. Lapointe

Toronto area in order to help a Toronto man to buy a house comparable to one in Montreal. Prices have got out of line, yet this aspect of the matter has not been recognized or dealt with.

The Acting Speaker (Mr. Penner):

Order. I regret to interrupt the hon. member, but the time allotted to him has expired.

Mr. Charles Lapointe (Charlevoix):

Mr. Speaker, I want to thank you for giving me the opportunity to participate in this important debate on the budget.

It has been several years, 16 to be exact, since the member for Charlevoix addressed his hon. colleagues from this side of the House. I would like to take this opportunity offered by this first speech I have the honour to make today, Mr. Speaker, to thank the people of my riding who put their confidence in me during the last election. The return of Charlevoix to the Liberal party after 16 years means a lot to me because the mandate given to me is first of all to come and express in this House and to the government the needs of my riding, and also work within the Liberal government to establish across this country a just society for all Canadians. It is for the sake of that ideal that I was elected, Mr. Speaker, and that is what I intend to fight for beside the right hon. Prime Minister and his cabinet colleagues.

The budget introduced by the Minister of Finance (Mr. Turner) meets exactly that double mandate in the sense that, through various measures, it is first aimed at lessening the tax burden of those on low income, something which will allow us to help those in our society who are most vulnerable to the effects of inflation. Second, the budget is aimed at making all parts of Canada benefit from the particular resources which are sometimes the attribute of a single area.

As a member representing a riding experiencing an unfortunate rate of unemployment of about 25 per cent all year round, it will be easily understood that it was with some apprehension that I expected a budget that could have been little more than anti-inflationary. Fortunately, Mr. Speaker, the Minister of Finance had the wisdom and the courage not to listen to the prophets of evil and introduced an expansionary budget allowing the people in underprivileged areas of this country to look at the future with hope.

The economic slowness of underprivileged areas such as my riding is very often due to their remoteness from large centers. Because of this fact, the Speech from the Throne included a new transport policy for such remote areas, a policy enabling their people to live at the same pace as others in urban centres.

At this point, Mr. Speaker, I would like to pay special tribute to the hon. Minister of Transport (Mr. Marchand) who always worked for a united Canada, as is once more illustrated in this new transport policy. This policy is especially important for my constituency, where there is no regular air service within a 450 mile radius, and where train service is provided in a quarter only of the total Charlevoix area.

Mr. Speaker, I hope we will soon be in a position to reactivate Forestville et Saint-Irenee airports, which will allow people in Charlevoix to live at the same pace as those in urban centres and also to use services in those centres. Also in the field of transportation, it is important, Mr. Speaker that our ports along the St. Lawrence be maintained in operation. In addition to the traditional importance of these ports for our trade and tourist industry, it should be fully realized that Charlevoix has always depended on the St. Lawrence and that the use of its docks is a privilege we grew accustomed to.

We cannot speak of regional disparity without mentioning the Department of Regional Economic Expansion which since its inception has been the main factor in providing equal opportunities for all Canadians. I very firmly believe in the department's work. It will need increasingly bigger funds to meet the demands from all such Canadian areas that are not responsible for the inflation spiral or pressures on the economy, but that must of necessity bear the consequences. It is urgent in my opinion that the department, along with the Department of Industry, Trade and Commerce, take steps in the nearest possible future to help create jobs in the tourist industry. This industry, the leading economic force in a number of Canadian areas, has an increasing need of government help to face the general cost increase. It should be treated in the same way as other industries. Furthermore, Mr. Speaker, in that field and in most cases, they are small and medium businesses to which the government wish to give assistance.

For too long, Mr. Speaker, the riding of Charlevoix was considered, outside our area, as one of the most beautiful parts in the province of Quebec, reserved for the wealthy tourists who enjoy living in isolation during summer months.

Times have changed and people wish now that the touristic attractions in their riding be organized on an industrial basis which will allow them to work for decent wages and to participate also in the many advantages we find in Charlevoix, advantages which were reserved until recently to a small minority.

Located between two very active economic poles, that is the Quebec City area and the Baie-Comeau-Hauterive area, the riding of Charlevoix does not benefit at all from those two centres of attraction. Inside our own territory, our future must be based on agricultural and touristic development, on the development of forest resources and of our maritime location.

In my riding, people live on a very low scale. The great national problem which we now have to face is the fact that this country still has underprivileged people, underdeveloped areas and Canadians who are unable to get their share of the resources and benefits it offers. That is why, Mr. Speaker, the budget proposed by the Minister of Finance (Mr. Turner) should have favoured an expanding economy in order to come to the help of those Canadians who have a right to pass the poverty point.

As I mentioned earlier, Mr. Speaker, I believe, and I know that my colleagues hold the same view, that it is for the achievement of this single purpose, that I have been sent to Parliament. It is rather significant that a majority government should have been elected in this time of

November 26, 1974

alarming economic troubles. We have been given a clear mandate, which is governing this country for the wellbeing of all Canadians.

When we look to the future, we cannot help thinking that governments have to interfere in economics, social and international policy, and they will have to do so more and more in the future.

Mr. Speaker, we must stop worrying about the terms used to describe the government's action, we must not engage in vain debates whether we are too socialist, capitalist or centralist, or not enough. We must take advantage of the years when we are in power to put forward economic and social measures whose only aim will be the wellbeing of Canadians. This is exactly what the budget proposed by the Minister of Finance intends to do.

Mr. Bill Clarke (Vancouver Quadra):

Mr. Speaker, much has been said in this debate by my leader, and by my colleagues from other provinces, concerning the disallowance by this Liberal government of royalties and other provincial taxes as deductions in computing taxable income. The Minister of Finance (Mr. Turner) referred to the tradition involved in allowing these deductions in the past, but he hides behind the complexity and variety of the provincial claims. In doing this he completely ignores the constitutional rights of the provinces given under the British North America Act. The government is trying to make a scapegoat of Alberta in order to hide its all-out financial war against the provinces.

Little has been said about the effects of this policy on my own province of British Columbia. This is probably because of the absence of our premier in Tokyo. However, his resources minister said the federal government move was an obvious and deliberate invasion of provincial fields of revenue. British Columbia's mining industry, which is also involved with non-renewable resources, has been hard hit, and much of its direction has been forced out of Canada. Even renewable-resource industries, such as forestry-which is striving for a sustained-yield position-will be greatly concerned by the government's decision to disallow the deduction of provincial taxes.

The obvious intention of the government is the total disallowance of all provincial levies. Already the minister has indicated that the Ontario land speculation tax is non-deductible, and every Canadian businessman must now wonder when some provincial or municipal tax that he pays will become a non-deductible expense in the view of this government. Even some normal business expenses such as advertising were disallowed when the expenditures were for space in foreign periodicals. The failure to resolve this issue only reinforces the impression that the government continues to offer stop-gap legislation.

The most startling thing about the budget is that it makes no attempt whatever to wrestle with the problem of inflation, and yet it is itself inflationary. It predicts higher government expenses and calls only for a rate of growth of government expenses lower than that of recent years. Referring to the minister's estimated reduction in total financial requirements from $2 billion to $1 billion because of the effects of higher-than-expected inflation, the Globe

The Budget-Mr. B. Clarke

and Mail was moved to observe that "the government has been the big inflation winner."

This view is consistent with that expressed by the Honourable J. V. Clyne, a prominent British Columbia industrialist, who said during this year's election campaign that the Trudeau government had totally abandoned any idea of curbing inflation in favour of seeking votes. He cited this government as the worst contributor to inflation, and referred to the increase of 140 per cent in government spending over the past six years.

Looking into the budget we can see that it treats a few of the symptoms of inflation. There are a few tax cuts for individuals fortunate enough to have taxable incomes, and there are added exemptions for pensioners. The minister proudly states that a married wage-earner with two children will pay no federal tax in 1975 unless his income exceeds $5,871. If his income does not exceed $5,871 he will be starving, Mr. Speaker. Other than the indexing provisions of 1973, the only benefit available in 1974 to the working poor is a $50 increase in the minimum cut in personal income taxes, which does not even begin to cover their loss by added inflation since indexing began.

Now let us look at some of the income tax changes and how they affect other taxpayers. Compared to the married wage earner with two children who pays no federal tax on his $5,871, the minister tells us the married pensioner-couple can earn $8,258 before paying any federal tax. Of course, the minister will not help them receive that much. They would have to have a substantial private pension plan and over $10,000 in Canada savings bonds or other security in order to obtain the maximum benefit from the minister's offer. This is just another empty offer by the government to those pensioners who are struggling to exist and cannot afford to take advantage of it.

But here is the big gainer, Mr. Speaker,-the non-typical couple who are both employed. Let us say they both take a $1,000 home ownership savings plan exemption, and both use the $1,000 interest deduction, and both have a maximum deduction under a registered retirement savings plan. This charming couple will receive exemptions of $16,000 and, in addition, will be eligible for tax cuts of up to $750 in 1975.

We should not be misled by the minister's reference to the fact that no federal tax is payable by the sample wage-earner or pensioner. Even these individuals will pay a significant amount of provincial income tax that this government will collect from them on the regular tax form.

I recall that nearly two years ago in my maiden speech in the then budget debate I suggested the total removal of personal income taxes and the substitution of a consumption tax. The government laughed, but I would like to quote briefly from my speech, as reported at page 1708 of Hansard for February 27, 1973:

There is also a precedent for this idea in this country. Already the government allows individuals to save up to $4,000 per annum tax free in a registered retirement savings plan. This money is taxed when it is taken out of the plan and spent, usually after the taxpayer has retired. Look at the effect of this idea on a young family starting out-and much is said about the difficulties facing them. At present, two young people working side by side to make a start for their family are forced to pay a vast portion of their income in tax, even though their consumer expenditures are very low. My suggestion would allow them to get a

November 26, 1974

The Budget-Mr. B. Clarke

boost by paying a tax only on the amount they spend. Similarly, those on low incomes would pay little in tax, and high-living Canadians would pay their lair share based on their high expenditures.

This government by its registered home ownership savings plan has taken another step toward my suggested goal, and I suppose I should feel grateful. And I would be, if the minister did not continue to permit so many glaring inequities to persist in our tax system.

We can see another example of the government's bungling in its attempt to solve the housing problem of Canadians. The government has reduced the sales tax on building materials-something Progressive Conservatives have long advocated-from 12 per cent to 5 per cent, providing a good saving on an average house, but leaving about $500 in sales taxes payable.

In the meantime, the Minister of State for Urban Affairs (Mr. Danson) has announced that he will give purchasers of new, moderately priced homes a $500 grant. Now, of course, this is just another empty offer because of the lack of new homes in the price ranges given. But, Mr. Speaker, the government has retained all of the bureaucracy of the sales tax department, and you can be sure that it costs just as much to collect a 5 per cent sales tax as it does one of 12 per cent, and it will create a whole new bureaucracy to administer the $500 grants. The net effect to the purchaser would be the same if the 12 per cent tax were wiped out entirely, and we would eliminate a double bureaucracy.

This housing minister's predecessor was horrified last session when I said the government should get out of housing. My views were echoed only two months ago by the Vancouver Province newspaper, which said:

... our housing difficulties, particularly in the rental field, compose a classic case of problem creation by government.

It continued:

We did not begin to experience real rental shortages in this country until the federal government removed the tax incentives that channeled a lot of private money into rental accommodation.

Finally, the badly needed incentive to entice high-income Canadians to invest in housing has been restored, if only for 13*/2 months. Of course the government needs the private sector to solve the housing problem, and has shown repeatedly that government-provided housing is unacceptable or unavailable to those people the government says it wants to help. But, typically, the government's plans to help the needy must fail because the really needy cannot afford to take advantage of the plans offered.

Many of the factors in the high cost of housing can be traced to the action of some level of government. For example, not too long ago municipal governments used to approve sub-divisions with gravel roads, septic tanks and drainage ditches. Improvements were put in gradually and paid for over decades through local improvement taxes. Now they require pavement, curbs, underground wiring, street lights, storm and sanitary sewers before the first house is occupied. The municipalities were saved, but the purchaser had all these costs added to the purchase price of his new house. Today delays of two years in obtaining all approvals are common, and this can add 25 per cent or more to the cost of raw land in a subdivision.

This government did its share in escalating housing prices. For example, CMHC refused to lend on non-sew-ered lots. The government's inflation has caused interest rates to skyrocket, which magnifies borrowing costs for housing in an incredible fashion. A typical 7 per cent mortgage for $40,000 carries monthly payments totalling $84,000 over the term, but a 12 per cent mortgage of the same amount requires payments of $124,000, a $40,000 increase.

If one doubts that inflation is a factor in interest rates I should remind hon. members that the Liberal government sold 3 per cent perpetual bonds in 1936. These bonds are still outstanding and worth about one third of their face value in 1936-dollars, or about 10 per cent in terms of purchasing power. This year the government sold Canada Saving Bonds at 93/i per cent, and these carry an immediate cash redemption guarantee.

Bond yields offer an interesting aside here, Mr. Speaker. The minister, early in his budget speech, referred to the increase in the average yield of outstanding Canada Savings Bonds, which is now 1014 per cent if held to maturity. No mention was made of the yield on marketable government bonds maturing after 1980, with rates that vary from 4>/2 per cent to 63/S per cent and with present market values ranging from $69 to $81 for a $100 bond. No, the minister would only adjust interest rates when it was to his government's advantage. In order to stop the flood of redemptions on Canada Savings Bonds he had to increase their yields. But the poor holder of the marketable bonds has to suffer the effects of the government's inflation policies right up to the maturity date of the bonds he bought in good faith.

Holders of Canadian government annuities find they too are locked into long-term agreements at rates of 4 per cent, and they, along with the holders of the 3 per cent perpetual bonds, are having their pleas for justice turned aside. When it suits the government the minister claims sanctity of contract, to the detriment of patriotic Canadians who loaned their money to the government. Truly the government has been the big inflation winner.

Before the increase in yields on Canada Savings Bonds was found necessary the minister told an annuity holder that an increase in annuity yields would require "a tax increase for all taxpayers to subsidize a minority of Canadians who are holders of government annuities". In the same letter he said:

Certainly, if any action of this nature were to be contemplated, it seems to me it could hardly be restricted to government annuities, and not extend to holders of government bonds.

Now this highly-principled government has done a complete about-face and given special consideration to the holders of some government bonds, but no consideration to annuity holders and holders of other government bonds. It reminds me of the government spokesman who, in reference to the principles involved in resource taxation, said that the federal government had backed down halfway on its principles and that the provinces should do likewise. That is so typical of members of this government. They do not realize that if a principle is involved it should be worth defending, and there is no backing down.

Let me return to the contribution the government has made to the high cost of housing. Naturally an investor

November 26, 1974

faced with 10 per cent inflation cannot lend his money out at less than the rate of inflation plus a return on investment. A few months ago G. Arnold Hart, Chairman of the Bank of Montreal, said savings would have to yield 17 per cent for the average taxpayer to get ahead of inflation which is running at an annual rate of 10 per cent or more.

Governments speak of speculator profits, and say government land banks are necessary. Speculators will not make profits if there is no demand. The increased value of land only reflects the demand for it at any given time. For example, today houses in Ottawa are selling for less than they did last spring. Demand is off because of high interest costs, lack of mortgage funds and other reasons. So what does the government decide? It decides to add to the existing demand for raw land the pressure of government bids for its land bank. The government will have to outbid all other potential buyers.

Inflation again is a factor in higher constructions costs. The government's inflationary policies force all workers to seek not only increases to keep up, but create an anxiety in people and a loss of confidence which forces them to seek gains to cover future inflation. The construction industry is highly organized and very powerful, and its workers are therefore able to obtain top wage increases not available to all home buyers.

Now the Minister of Finance and the Prime Minister (Mr. Trudeau) say they can do nothing about inflation. They talk about imported inflation. I would refer these gentlemen to the "Bank of Canada Review" where they will see that the export price index increased 37 per cent in the year to April, 1974, whereas the import price index increased only 26 per cent in the same period. The conclusion one can draw from this is that our prices are rising at a substantially higher rate than those of our trading partners.

While our government is saying nothing can or needs to be done by Canada, the British government told a NATO meeting this month, in London, that the prized possession of freedom and security were at risk if the evils of recession and inflation were not controlled.

The government says it is trying to help the poor, and points to its generous programs to help the needy. But the government's over-all policies on inflation and taxation are eliminating the benefits for the poor and the elderly, and are making these Canadians more dependent than ever upon the very government that continues to say it wants to make these people more independent.

Mr. Gilbert Parent (St. Catharines):

Mr. Speaker, this is the first time I have spoken in the House of Commons and, in all humility, I must confess it is one of the proudest moments of my life, including my pride at having my family here today. My one regret is that my son is not here to share in this, the highlight of my public career.

Hear, hear!

Mr. Parent:

I congratulate you, Mr. Speaker, and your associates, not only because you have been chosen by your colleagues to preside over our debates and deliberations, but also on the stand you took last November 5, when the duties, responsibilities and privileges of the Speaker of the House were reiterated and reaffirmed.

The Budget-Mr. Parent

For some weeks now I have been weighing which items I should include in my initial address to the House. It is understood that I will comment on the budget presented by the Minister of Finance (Mr. Turner) on November 18. But more than that, I wanted to set forth guidelines for myself as a member of parliament, having regard to my constituency of St. Catharines, our beloved country, and to our role in the international community of nations.

The city of St. Catharines is set in the richest countryside and most inviting climate in central Canada. It is just about the right size, with about 114,000 people. It is big enough to support excellent elementary and secondary schools and a university. I have had the pleasure of teaching in three secondary schools in the city, and also of serving as a school board trustee for the schools in the county. Both these experiences were rewarding and interesting.

St. Catharines has five libraries, well staffed and well equipped medical facilities, and enough variety of activity and personality to ensure continued interest. It is near enough to several large cities such as Toronto and Hamilton to provide a change, if you so desire.

St. Catharines is an historic town with United Empire Loyalist origins and sturdy, happy, productive ethnic groups. Each year our folk arts festival attracts thousands of participants and visitors. In June, 1974, over 28 ethnic groups took part in the festivities. In all modesty, Mr. Speaker, I suggest that St. Catharines is a microcosm of Canada and we are proving daily that people from various cultural backgrounds can and do live in harmony. It is called 'The Garden City,' and with just reason. It has more parks per capita than any other city its size in Canada.

Employment is high in the plants and shipyards within the city limits. New construction as well as three new industrial developments are likely to mean continued prosperity. It should be noted that with 1975 designated as the year for women-and my able colleague from Trinity commented on the status of women yesterday-there is no job discrimination and women's groups in St. Catharines are respected and well accepted. St. Catharines is an easy going town-perhaps due to the climate, or perhaps it is the friendliness of the people there. The city nestles in the shelter of the Niagara escarpment. One of my continuing delights is to look out of my dining room window and savour the beauty of the escarpment.

The largest employers in the area are the automobile factories, the paper companies, the metal fabricators, and the food processors, including the wineries. It has been estimated that 80 per cent of Canadian wine comes from the vineyards of the Niagara Peninsula. My colleague, the hon. member for Lincoln (Mr. Andres), can attest to that. These wines are the pride of Canada. The Niagara Grape and Wine Festival held toward the end of September attracted over a million visitors to St. Catharines, and we helped in fostering favourable international understanding by welcoming the citizens of our twin city in the West Indies.

One of the strongest influences in recent years was the establishment in 1964 of Brock University. The city vibrates to the pulse of young academics. A few weeks ago

November 26, 1974

The Budget-Mr. Parent

I had occasion to visit Brock, and from the Tower the view of St. Catharines is breathtaking. The theatre is alive and well at Brock. We have a symphony orchestra which is the envy of southern Ontario. Athletics compliment the academic flavour and the two live side by side, encouraging physical fitness and scholastic excellence. Our prowess in lacrosse is legendary.

In 1970 we hosted the world rowing championships. Our Royal Henley course is the finest natural rowing course in Eastern Canada. Each year over 3,000 young men and young women use these facilities and we are now fielding crews who are competitive internationally. It should be noted that crews from all over the North American continent compete yearly at the Royal Henley.

It is incumbent upon me, Mr. Speaker, to see to it that the views and the opinions, as well as the problems of the citizens of St. Catharines, are articulated in the national councils of government. Conversely, it is my responsibility to ensure that our people are kept informed of the development in the House of Commons. To this end, I have inaugurated a plan whereby I can report directly to my constituents by radio via talk shows and interviews, by newspaper, and by sending out at least four newsletters per year.

It is my duty to communicate with the inhabitants of St. Catharines by attending the various cultural and organizational functions which take place. It is my pleasure to trumpet the achievements and accomplishments of our city and its citizens.

In order to be conversant with the legislation and regulations which affect our citizens in St. Catharines, I have asked for and been appointed to the following important standing committees of the House of Commons-Labour, Manpower and Immigration, and Veterans Affairs.

Since the House opened on September 30 the Standing Committee on Labour was instrumental in settling the West Coast grainhandlers' dispute, the sub-committee on manpower has presented legislation for parliament's consideration, and the sub-committee on immigration has moved to make our immigration policy flexible enough to admit over 200,000 immigrants each year while also permitting us to select those people who have specific talents which are in short supply in Canada. On November 6 the Standing Committee on Veterans Affairs updated the Veterans Act to make it an instrument more responsible to the needs of our veterans.

The budget that parliament is debating is, in its approach to the country's economic problems, one of the most important in many years. To describe it as a re-run of the May 6 production with new sub-titles hardly does it justice. The Minister of Finance has reworked it from his earlier presentation by ameliorating the crunch of the oil and gas industry and by lessening the confrontation between Ottawa and Edmonton over resource revenues.

Most important, however, he reworked it in light of domestic and world economic conditions and prospects that have changed since May 6. He reworked it against a backdrop of recession fears in the United States, Japan and Europe, where Canada sells most of its exports. As a result the budget is a careful selection of policies which, in

large measure, are designed to soften the impact of declining foreign demand for Canadian goods and services.

After a government is elected with a solid majority, as this government was last July, one would normally expect tax increases and government spending programs reflecting election promises. Instead it has proposed to reduce taxes, to curb government spending and to implement election promises only when they contribute to the objective of strengthening the country's ability to withstand economic assault, be it inflation or recession.

This is sound economics. Many persons have been advocating government economy and tax cuts for the last two years and more, the latter particularly so that people would have more take-home pay in order that they could buy more and thus create incentive for industry to hire unemployed workers. Now it has been concluded that the time is opportune for this approach, so the domestic market can take up any incipient slack, or part thereof, in the country's industrial infrastructure.

The Minister of Finance was not unduly pessimistic last Monday evening. He mentioned the word recession only twice; once a nod to the risk, and later a reference to the gathering forces of recession throughout the world. But he admitted that the outlook for the Canadian economy is less bright than in May, that signs of slowing down have appeared, and that tariff protectionism and payments problems abroad are causing weakness in foreign demand for our exports. In proposing tax cuts, he said there is need to sustain the growth of purchasing power over the period ahead.

I note that it is six o'clock, Mr. Speaker. I could finish my comments after the break. I require about a minute and a half more.