1980-06-25

ROUTINE PROCEEDINGS


Mr. Charles Mayer (Portage-Marquette):: Madam Speaker, 1 rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
In view of the lack of pasture and shortage of cattle feed that is prevalent in several areas of the prairies, in view of the fact that a contingency plan was put in place in 1977 to allow hay to be cut in Riding Mountain National Park and Prince Albert National Park, and in view of the fact that limited grazing in Riding Mountain National Park would cause no appreciable or lasting damage to the wild life habitat, I move, seconded by the hon. member for Lisgar (Mr. Murta):
That the Minister of Agriculture and the Minister of the Environment move immediately to allow cattle to graze, and feed to be harvested in Riding Mountain National Park and Prince Albert National Park where it is feasible.


Madam Speaker:: This motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
[Stage Direction]
PRIORITIES AND PROGRAMS FOR 1980s-MOTION UNDER S O. 43
Mr. Stan Schellenberger (Wetaskiwin):: Madam Speaker, I rise on a matter of urgency under Standing Order 43. In view of a Department of Indian Affairs report which restates what we already know, that Indians on reserves still are struggling to feed their families, acquire an education, find adequate jobs, stay off alcohol and keep out of jail, I move, seconded by the hon. member for Prince George-Peace River (Mr. Oberle):
That the Minister of Indian Affairs and Northern Development immediately state on motions his priorities and programs for the 1980s to begin remedying this urgent situation.


Madam Speaker:: This motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


COMMITTEE STUDY OF CONDITIONS ON RESERVES-MOTION UNDER S O. 43
Mr. Jack Shields (Athabasca):: Madam Speaker, I rise on a matter of urgent and pressing necessity. Whereas in a recent report the Department of Indian Affairs and Northern Development has again admitted to very serious problems on reserves relating to crowded living conditions, and whereas infections, respiratory diseases, suicides and violence on reserves are four to five times higher than national levels, I move, seconded by the hon. member for Peace River (Mr. Cooper):
That the government House leader direct the Standing Committee on Indian Affairs and Northern Development to leave their committee rooms and go out as a group to at least 12 reserves, six in western Canada and six in eastern Canada, to gain first-hand knowledge of these deplorable conditions.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Terry Sargeant (Selkirk-Interlake):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
In light of the fact that it is expected the United States Senate will give consideration to an emergency appropriations bill that would provide $9.7 million in additional funding to the Garrison diversion project in North Dakota on Friday of this week, and in light of the fact that personal representation to U.S. senators on the part of Manitoba members of Parliament during this past week proved valuable in establishing Canada's case against the Garrison diversion unit and the environmental disaster it could bring to Manitoba, I move, seconded by the hon. member for Lisgar (Mr. Murta):
That this House authorize an all-party delegation to be sent this week to Washington, D.C., to meet with U.S. senators to discuss the grave implications

June 25, 1980
for Canada of a Garrison diversion plan that allows the transfer of Missouri River biota into the Hudson Bay basin.


Madam Speaker:: Such a motion requires the unanimous consent of the Elouse. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


OIL SUPPLIES FOR ATLANTIC CANADA-MOTION UNDER S O. 43
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Madam Speaker, I rise under the provisions of Standing Order 43. In view of the fact that Premier Lougheed of Alberta has at his disposal some $6 billion in the Alberta Heritage Fund, in view of the fact that Premier Lougheed during a recent visit to Atlantic Canada discussed lending some $100 million to Newfoundland's Premier Peckford, in view of the fact that during the same Atlantic visit Premier Lougheed discussed investing Alberta Heritage money in Cape Breton's mines with Premier Buchanan, in view of the fact that Premier Lougheed also talked with Premier Hatfield of New Brunswick about loans and investment dollars, and in view of the fact that all three aforementioned premiers have developed a sudden need to restate their support for Premier Lougheed's demand for the world price for oil produced in Alberta, I move, seconded by the hon. member for Cape Breton-East Richmond (Mr. Dingwall):
That this House of Commons affirms its desire to provide Atlantic Canadians with oil as cheaply as possible, despite what the premiers of Atlantic Canada arc saying.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDUSTRY
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam
Speaker, I rise under the provisions of Standing Order 43. In the recent contract signed between the federal government and McDonnell Douglas for the new fighter aircraft, the only province mentioned to receive industrial spin-off benefits is Quebec.
Given the fact that Canadians were led to believe the industrial spin-off benefits stemming from that contract would be spread equitably across Canada when, in fact, the ministers
involved have stated on a number of occasions that Quebec will receive 48 per cent of the benefits from the contract, while Ontario will receive 39 per cent and the rest of Canada will receive only 12 per cent, I move, seconded by the hon. member for Lisgar (Mr. Murta):
That the Minister of Industry, Trade and Commerce, the Minister of National Defence and the Minister of Supply and Services make an immediate statement on motions with regard to what Manitoba will receive in industrial benefits stemming from the McDonnell Douglas contract, and that the government call an immediate meeting with the Manitoba aerospace industry to secure adequate industrial benefits for the province of Manitoba.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


REGIONAL ECONOMIC EXPANSION
Hon. J. Robert Howie (York-Sunbury):: Madam Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
Whereas the Department of Regional Economic Expansion is responsible for development programs in the Atlantic region and is insufficiently funded for this purpose, and whereas transportation disparities are a deterrent to development in Atlantic Canada, I move, seconded by the hon. member for Fundy-Royal (Mr. Corbett):
That the Minister of Regional Economic Expansion be directed to prepare and lay before this House a blueprint to put in place a badly needed modern transportation system in the Atlantic provinces as a major measure to enable the Atlantic provinces to help themselves.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NUCLEAR DEVELOPMENT
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, I rise under the provisions of Standing Order 43 and I shall limit myself to two "whereases."
Since the government does not appear anxious to provide an especially wide scope for public involvement in the review of Canadian nuclear policy now under way within the bureaucracy, and because what the country needs is a full public airing of all the issues and side issues touching on nuclear development, including the crucially important question of Canadian
June 25, 1980

nuclear reactor exports. I move, seconded by the hon. member for New Westminster-Coquitlam (Miss Jewett):
That the government expand the current inhouse review and establish instead a forum for the widest possible public debate on this extremely important question along the lines of that contemplated by the previous Conservative administration.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL ARMED FORCES DAY
Mr. Leonard Hopkins (Renfrew-Nipissing-Pembroke):: Madam Speaker, I rise on a matter of urgent and pressing necessity pursuant to Standing Order 43.
Since today is National Armed Forces Day and the Canadian Armed Forces have received tributes from the Governor General, the Prime Minister and the Minister of National Defence, 1 move, seconded by the hon. member for St. Catharines (Mr. Reid):
That this House recognize, with respect and gratitude, the contributions of the Canadian Armed Forces to Canada in war and in peace, and extend its congratulations to the men and women of the Canadian Armed Forces for their effectiveness and dedication.


Madam Speaker:: Such a motion requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Madam Speaker:: Is it the pleasure of the House to adopt the said motion?


[Stage Direction]
Motion agreed to.

Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent importance.
In view of the startling testimony in recent weeks by many witnesses appearing before the Dubin Royal Commission on Aviation safety which all points to a general lack of effectiveness in the administration of air safety regulations in Canada, 1 move, seconded by the hon. member for Winnipeg-Assini-boine (Mr. McKenzie):
Oral Questions
That the Minister of Transport be directed to make a statement on motions before this House explaining the measures he has already taken to eliminate the many unsafe practices which have been documented before the Dubin inquiry and, further, that the minister be directed to request an interim report from Mr. Justice Dubin on his findings to date.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, in the absence of the Minister of Agriculture my question is to the acting minister. The minister knows that the drought in western Canada is now an acute threat to western farmers and, indeed, to the general economy of Saskatchewan and of Manitoba.
On Monday, the government of Manitoba indicated that it could wait no longer for Ottawa's approval and it went ahead and announced its own program of assistance to the extent of $44 million. Even the railways have acted to help the farmers of Manitoba in working to move feed back to Manitoba where it is needed.
Will the minister tell the House of Commons why the Government of Canada is moving more slowly than the railways in responding to the drought crisis in Manitoba, and will he tell us when the federal government intends to accept its responsibility to show leadership in helping Manitoba deal with the drought problem?


Mr. Hnatyshyn:: They are waiting for double-tracking.


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, the Minister of Agriculture has already indicated a number of things that are being done with respect to alleviating the drought situation. The Minister of State for the Wheat Board has also indicated a number of decisions; for example, the allowance of feed barley from the United States under import permits. So all these measures are in hand now.
There are different views on the situation itself. Some people believe there are sufficient quantities of feed on the farms. The problem is that it does not come to the elevators as rapidly as one might like. But that is a normal situation because the farmer is trying to protect himself also in this difficult situation. To conclude, it is a very difficult balancing act and the three members of the government involved are monitoring the situation very closely.

June 25, 1980
Oral Questions


Charles Joseph Clark: Madam Speaker, the fact, which apparently escapes the notice of the acting minister, is precisely that it is not a normal situation. It is not a normal situation when the economy of Manitoba is threatened to the extent of perhaps half a billion dollars because of a drought crisis that only this minister would regard as being normal.
The minister said-and I quote him exactly; I noted his words down-"all those measures are in hand". Does that mean that the Government of Canada intends no further action? The railways are acting and the government of Manitoba has acted. Indeed, the government of Manitoba acted on Monday because it stated it could wait no longer for the federal Treasury Board to act.
Is the Government of Canada not planning more action? Why did the federal Treasury Board not act? What is this government going to do, and what can it tell the farmers of Manitoba and the members of this House of Commons about the plan of action it has to deal with the situation that is most certainly not normal to the farmers, who are suffering a crisis of drought in western Canada?


Some hon. Members:: Hear, hear!


Jean-Luc Pepin: Madam Speaker, to a certain extent, the Leader of the Opposition is describing the situation well. The CN is acting, the governments of the provinces are acting and the federal government is acting. That is the way to deal with that particular situation.


Charles Joseph Clark: Madam Speaker, let me deal with one aspect of the federal government's action. This minister will know that the government has established an advisory group to the task force on the drought. Will the minister confirm that there is not one single Manitoban on that advisory group, and will he give us an immediate commitment, now, to establish a mechanism on behalf of the Government of Canada which will bring together, under federal leadership, municipal and provincial representation and ensure co-ordination in dealing with the devastating effects of the drought in Manitoba?


Jean-Luc Pepin: Madam Speaker, I will certainly bring these suggestions to the attention of the Minister of Agriculture, who has the main responsibility in this area.


Charles Joseph Clark: Madam Speaker, I will direct this question to the same minister, even though he may try to shove it off on someone else. The Premier of Manitoba indicated that his province is assuming there will be forthcoming from Ottawa a $14.3 million contribution by the Government of Canada as Ottawa's full share in dealing with the drought. That is $14.3 million that has not yet come. Will the minister now give this House and the farmers and people of Manitoba a clear commitment that Ottawa will honour at least that contribution of $14.3 million?


Jean-Luc Pepin: Madam Speaker, as the Leader of the Opposition indicated in previous questions, it is not only a matter of
money: it is mainly a question of putting into motion the necessary instruments to cope with this drought situation. For example, when the Minister of State for the Wheat Board allowed imports of feed grain from the United States, that was an important move.
It is not only a matter of saying we have allowed $14 million, more or less. Government action should not be judged exclusively on that basis, although I recognize it is one of the factors in this equation. The government has indeed put a number of millions of dollars into this process.


DROUGHT IN WEST-ASSISTANCE TO FARMERS IN MEETING LOAN PAYMENTS
Mr. Jack Murta (Lisgar):: Madam Speaker, I wish to direct my question to the Minister of Finance. People in Manitoba and Saskatchewan will be trying to salvage what little is left of the agricultural economies of both provinces.
We have a situation in which farmers, young farmers in particular, and businesses which depend on agriculture have expanded. In many cases they will face severe economic crisis and possibly bankruptcy. Will the government consider some type of moratorium on debt in those two provinces, in terms of working with the credit unions and banks to try to stretch the loan payment that will be coming due in the next few months over a longer period of time, so that we do not have bankruptcies caused by an act of God in those two provinces?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I have not considered the question of a moratorium. The hon. member has indicated the difficulties which those who have loans may face in the future. Drawing upon the experience we have had with individual home owners who were renegotiating their mortgages with lending institutions, it was possible in that case to work out suitable arrangements which got those affected over the situation. It may be possible in these circumstances to do something similar. I thank the hon. member for his representations and will consider whether anything can be done short of a moratorium.


Jack Burnett Murta: Madam Speaker, I assume the minister is indicating to the House he will give this request some attention and urgency because it is very serious. My supplementary is to the Minister of Transport in his capacity as acting minister responsible for the Wheat Board. He mentioned the fact that permits have been issued to allow barley and oats into Canada for feed supplies. Incidentally, there will not be enough feed for western cattle unless more is found.
My question is this: duty is still imposed by the federal government on grain coming into Canada, specifically barley, oats and alfalfa pellets. Will the government give consideration to taking off the duty? In the case of barley, it is about seven cents a bushel. Will the government give consideration to doing this because of the emergency situation that has developed?
June 25, 1980


Jean-Luc Pepin: My information is that the problem is not one of cost but of availability, so in this instance the Minister of State for the Wheat Board moved at the request of the livestock feeders to make sure that the feed barley would be available. 1 have not heard that this is a financial matter; I have heard the situation described as one of increasing the quantities on the market.


INDIAN AFFAIRS
Mr. Edward Broadbent (Oshawa):: Madam Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. Over the weekend, the hon. gentleman's department issued yet another report on the condition of Canada's Indians, which is deeply disturbing. It reveals that in almost every aspect of life, whether we are talking about housing, educational opportunities, violence or health conditions, Canada's Indians live in a state which can only be described in general terms as deplorable.
Since the hon. gentleman's party has governed Canada almost non-stop since 1963-


Ramon John Hnatyshyn: With your help.


John Edward Broadbent: -I should like to ask him when it intends to come to grips with its responsibility for Canada's original inhabitants.


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, I hope we can come to grips with it as quickly as possible. It is a disturbing report, there is no doubt about that. The fact of the matter is we have initiated an improvement in housing policy, we are getting the co-operation of DREE and we are also getting assistance from employment programs.
As the Leader of the New Democratic Party may remember, my colleague the Minister of Employment and Immigration announced that increased funding would be targeted to native groups. In addition, we are meeting with the Indian community with respect to increased funding for self-government, hoping to come forward with legislation in that regard perhaps in the fall. This could deal with one of the underlying causes of which many of the other items are symptoms.
We are giving our utmost attention to a mix of policies of this kind as a means of coping with a situation which is an unhappy one; there is no question about it. It may be small consolation but I would point out that the report did say that conditions, bad as they are, have improved over the last two decades.


John Edward Broadbent: Madam Speaker, I do not think anyone in this House can take any pride in the statement that conditions have improved for Canada's Indians, when 30 per cent die
Oral Questions
through violent means, a percentage which I suspect is higher than before the white man appeared on this continent, and when 50 per cent of the homes are without water.
In this context I would like to ask the minister: since the proportion of the funds allocated to social programs by this government has actually declined in the last ten years, contrary to what he implied in his answer, will he make a commitment this afternoon that the amount set aside in his budget for Canada's Indians will be substantially increased?


John Carr Munro: I have already indicated that the government has under active consideration, right now, substantial increases in funding for houses which will be incremental, over and above the present commitment to all our programs. This report will undeniably have some impact on the thinking of the government and we shall certainly be looking into the areas to which the hon. member has drawn attention.


John Edward Broadbent: The House knows very well there is a distinction between the government considering something and the government committing itself to doing something. What we are calling for is action, not just thinking about the problem. In this context, the government has appointed a number of special commissions which have made sense, and obtained the support of all parties to deal with aspects of other problems in Canada.
I would like to ask the minister if the government will appoint, now, a special commission on Canada's Indians- which would have a deadline; it would terminate with the calling back of Parliament in the fall-to study past reports and to come back to Parliament in the fall with specific recommendations which should be acted upon before Christmas.


John Carr Munro: Madam Speaker, the Leader of the New Democratic Party is suggesting a special type of legislative body to look into this question. I am prepared to consider it. I will say right now that we will give it consideration, but I point out to the Leader of the New Democratic Party that there is a standing committee of the House-one of the most active standing committees that we have-dealing with Indian questions.
That committee has been meeting regularly over the last several weeks. The hearings have been going on and a good deal of evidence has been received. All parties are participating. It could be an example of one of the most effective standing committees that we have. That standing committee has all the latitude it wishes in terms of going into this report and requesting further information.
I might say that the National Indian Brotherhood and others are in the audience. They are equipped to brief both New Democratic Party members of the committee and official opposition members. Again I suggest that the Leader of the New Democratic Party might take a hard look at the standing

June 25, 1980
Oral Questions
committee in terms of its being a worth-while instrument to achieve this objective.


SELF-DETERMINATION FOR INDIAN PEOPLE
[Stage Direction]
Eton. Warren Allmand (Notre-Dame-de-Grace): Madam Speaker, I have a supplementary question for the Minister of Indian Affairs and Northern Development. Would the minister not agree that little meaningful progress will be made on these terrible problems until the Indian people are allowed to control and run their own lives, rather than having solutions handed down to them from government officials?
Some hon. Members:: Hear, hear!


Mr. Allmand:: In this respect, would the minister take out many of the reports which have been prepared by the National Indian Brotherhood and some of the provincial federations and consult those reports, which propose solutions, and not just look at the reports prepared by his own department?
Elon. John C. Munro (Minister of Indian Affairs and Northern Development): Madam Speaker, that is exactly what I have been doing for several months, looking at the reports which have come in from the National Indian Brotherhood and other provincial associations and Indian bands. That is why 1 have been going across the country talking to the Indian leadership and bands with respect to the government's priority for Indian self-government, with the hope that we could bring in legislation as early as possible identifying this very area, Indian self-government, to rebut once and for all the paternalism which has been such a degrading influence on the Indian people.
Such a new bill would establish Indian self-government at the option of the Indian people themselves. I am hoping I can get the co-operation not only of the hon. member-I am sure I will-but also that of all the opposition parties in achieving this objective.


PRESENCE IN GALLERY OF SPEAKER AND DELEGATION FROM SWEDEN
Madam Speaker:: Order, please. I would like to draw the attention of the House to the presence in our gallery of the distinguished Speaker of the Parliament of Sweden, Mr. Ingemund Bengtsson, who is accompanied by parliamentarians from that country.


Some hon. Members:: Hear, hear!


THE CANADIAN ECONOMY
Hon. John C. Crosbie (St. John's West):: Madam Speaker, my question is for the Deputy Prime Minister and Minister of Finance, whom I welcome back from being at sea in the lagoons of Venice.
At the economic summit in Venice it was agreed, and I quote, "that inflation should be given immediate top priority". The seven leaders agreed, and 1 quote, "that determined fiscal and monetary restraint is required to break inflationary expectations".
Could the Deputy Prime Minister tell us what measures are going to be taken by his government to carry out determined fiscal and monetary restraint to break inflationary expectations? Are there measures other than those now in effect? If so, what are they?


Allan Joseph MacEachen: Madam Speaker, the hon. member is quite right that this was underlined as the top priority for all the industrialized countries.
Before replying directly to his question, I might say that I did hear a number of favourable comments on the performance of the hon. member's leader at the last summit at Tokyo, and 1 pass them along with sincerity. The compliments did not include the hon. member for St. John's West.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: We are, in a sense, anticipating the debate this afternoon in this question and answer, but I tell the hon. member that there are no new measures contemplated at the present time beyond the fiscal and monetary restraint which is in effect.
We have already indicated our intention to restrain government expenditures and certainly not to add to the deficit, and until the budget comes down it is not my intention to indicate any additional measures. I believe that maybe the principal job will be to resist the demands which undoubtedly will be made to increase spending and to relax monetary restraint in the face of the onset of the recession.


John Carnell Crosbie: Madam Speaker, I am glad there was a frank expression of views and that the minister was informed that the quality of this year's delegation was not up to last year's.
The communique could have been written by governor Bouey of the Bank of Canada, who said on May 29 that we have to stick with the monetary and fiscal policy approach and limit aggregate demand.
In view of the fact that the minister and the government have now agreed at the Summit with the approach suggested by governor Bouey and that they should limit aggregate demand, that the minister said in this House that his policy and governor Bouey's are similar and that they are heart to heart and toe to toe, would the minister tell us how he intends
June 25, 1980

to limit further aggregate demand, particularly in view of the fact that there are now 904,000 unemployed as of May and the unemployment rate is forecast to increase? How is he going to carry out his and governor Bouey's policy and that of the seven samurai?


Allan Joseph MacEachen: Madam Speaker, the communique at Venice stated that determined fiscal and monetary restraint is required to break inflationary expectations. That is the commitment that all of the seven made at Venice and with which Canada concurs.
At the present time, as the hon. member knows, the Bank of Canada is operating under a system of monetary restraint within a range of monetary targets. That certainly is monetary restraint, and I have indicated the intention of the government to restrain spending and to avoid adding to the deficit. That, in my view, is the reverse side of stimulating aggregate demand.


INDUSTRY
Mr. Otto Jelinek (Hatton):: Madam Speaker, my question is to the Minister of Industry, Trade and Commerce. As he knows, one of the more damaging aspects of our over-all economy is the deteriorating auto industry, which has a $4 billion Canadian trade deficit with the United States, which is growing. Reports from Washington indicate that this deficit is largely of our own making and that the United States is not prepared to alter the auto pact in our favour at this time.
Could the minister now tell this House and, in fact, the
22,000	unemployed auto workers-not to mention the hundreds of thousands in the related ailing secondary manufacturing sector-when he intends to take made-in-Canada action in order to stimulate the auto industry in this country? For example, would he now be prepared to take our repeated suggestion and impose quotas on offshore vehicles?


Hon. Herb Gray (Minister of Industry, Trade and Commerce):: Madam Speaker, the possibility of having a harmonized response to the problem of offshore vehicles is one of the priority issues for our discussions in Washington this Friday. I do not think I have to respond to unidentified comments on the front page of a newspaper, even one as important as The Globe and Mail.
We are going to have our discussions around the table with identified senior American authorities. In these discussions we are going to seek common ground on matters of mutual concern and, in doing so, I will be pursuing my objective for Canadian workers of obtaining a fair share for Canada of North American automotive activity.


Otto John Jelinek: Madam Speaker, I naturally wish the minister well in his deliberations in Washington this weekend. But there are other options which in the past the minister has
Oral Questions
sloughed off to the Minister of Finance. My supplementary question is therefore to the Minister of Finance.
Could he tell us whether or not his colleague, the Minister of Industry, Trade and Commerce, has asked him or his department to consider implementing some much needed stimulative measures for the automotive industry in Canada, such as temporarily removing the 9 per cent federal excise tax on North American-built vehicles in Canada, or any other measures which would give the auto industry a much needed stimulative boost?


Allan Joseph MacEachen: Madam Speaker, the Minister of Industry, Trade and Commerce is in constant communication with me and with other members of the economic ministry, not only with respect to actions to assist the automotive industry but to assist other industries in Canada. His leadership has already had a beneficial influence on the future development of that industry.


TRANSPORT
Mr. Les Benjamin (Regina West):: Madam Speaker, I should like to ask the Minister of Transport some questions. Since the Parliament of Canada over a number of years, and successive governments, have passed various laws and regulations regarding maintenance and safety procedures for the operation of commercial aircraft, I should like to ask the minister the following question.
In light of the evidence given by employees of the government at the air safety inquiry in Thunder Bay of planes being flown that are overloaded and poorly maintained-one of them crashing on March 24, when six people were killed-will the minister advise the House whether or not he intends to increase the number of safety inspectors and, more important, will the minister assure the House that he will not allow his officials, and he himself will not take part in or condone any action which undermines the recommendations of the safety inspectors regarding penalties or suspension of licences because of some possible political embarrassment to the minister?


Jean-Luc Pepin: Madam Speaker, I presume it is always a temptation, when a commission is created and evidence is brought to that commission, to act upon the evidence that is brought forward. But the purpose of the commission, obviously, is to come up with recommendations after evidence is presented. I consider that to be the normal way of proceeding. In the case of the Dubin commission, as in others, it would be wise to wait until the judge has assessed all the evidence and is in a position to bring forward his recommendations.

June 25, 1980
Oral Questions
With regard to the number of inspectors, it is a major preoccupation of mine, obviously. In recent days I have made a number of moves to strengthen the capacity, particularly of the CTC in this regard.


Leslie Gordon Benjamin: Madam Speaker, can we take it from the minister's response that he will now succeed with the Minister of Finance and the President of the Treasury Board in securing restoration of the number of air safety inspectors and rail transport inspectors?
Can we take it that the reduction in man-years of the Canadian Transport Commission will not occur, and can the minister assure the House that he will now insist on full enforcement of the present laws and regulations, in light of the experience of lack of enforcement long before the present safety inquiry took place?


Jean-Luc Pepin: Madam Speaker, 1 am quite sure that there is hardly any limitation in the number of inspectors that might be needed if one is to cover the whole of the land.
One of the purposes of Bill C-18, which is presently in committee, is to make the maximum use of inspectors at other levels of government than the central one, that is, at the provincial and municipal levels. When this bill is passed, a major effort in this direction will be made.


REQUEST TASK FORCE INVESTIGATE MINING ACCIDENTS
Mr. Maurice Foster (Algoma):: Madam Speaker, in the absence of the Minister of Labour I will direct my question to the Minister of Energy, Mines and Resources. In view of the tragic mine accident last Friday in Elliot Lake, Ontario, in which three miners were killed-I am sure every member in the House would want to join me in expressing sympathy to the bereaved families-and also in view of the dramatic increase in mine accidents in Ontario in which some 17 miners and surface workers have been killed in the last six months, 1 should like to ask the minister if the government is prepared to take action to see a task force established, in co-operation with the province, to investigate this alarming increase in fatal mine accidents.


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, 1 understand that the Minister of State for Mines and the Minister of Labour have been studying this situation with great attention recently. I understand they are considering a proposal like the one suggested by the hon. member. 1 hope that both ministers will be in a position to give a definite answer to the hon. member very soon.


AGRICULTURE
Charles James Mayer: Madam Speaker, I should like to direct a question to the Deputy Prime Minister or to the government House leader. It has to do with the very serious situation in western Canada which has come about as a result of lack of rainfall and very high temperatures over the past few months.
I wonder if either of the two hon. gentlemen would consider the suggestion that the Standing Committee on Agriculture be given a reference to travel to western Canada to view at first-hand some of the problems we have there, and also to listen to the producers' suggestions on some solutions that might be forthcoming from the government.


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, a while ago the Minister of Transport in his answer to the Leader of the Opposition indicated that the government was taking effective steps under the circumstances. The hon. member has now made a suggestion which seems interesting. I can assure him that I will take it into serious consideration.


HARVESTING OF CATTLE FEED IN NATIONAL PARKS
Charles James Mayer: Madam Speaker, I appreciate that answer and I urge the House leader to take a serious look at the problem.
1 have a supplementary question which I should like to direct to the minister responsible for Parks Canada. It refers to a topic on which I have had discussion with him concerning both the grazing of cattle and the harvesting of cattle feed in Riding Mountain National Park and to some extent in Prince Albert National Park. Let me point out that I have done some investigation into this matter. I should like to ask the minister if he is prepared to give that suggestion his serious consideration.


Hon. John Roberts (Minister of State for Science and Technology and Minister of the Environment):: Yes, Madam Speaker, the hon. gentleman spoke to me about this question last week, and as a result I have been able to make some inquiries specifically as regards Riding Mountain park.
There are, I am told, about 2,000 acres which could be used potentially. There are estimates that over 5,000 elk and deer would be using that forage in the Riding Mountain park. Given past park policy, we do not open up the parks for grazing to outside animals. It would be contrary to the presently established policy to meet the kinds of concerns the hon. member has expressed to me. I would, therefore, be reluctant to recommend that to the House.
It may be that the hon. member would have further information which he would like to give to me which would give me the basis to make further inquiries. I would be extremely happy to undertake to do that if he would do so.
June 25, 1980


INDUSTRY
Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, I should like to address my question to the Minister of Industry, Trade and Commerce. Since the government has abandoned the exciting new programs for Atlantic Canada which were in place before the last election, in the same way that they have abandoned the entire Atlantic region, I should like to ask the minister when he is going to implement a program to replace the fishing fleet; and what will it be?
How can he justify his and his government's neglect of the Saint John harbour development and the Saint John dry dock? In other words, when is he and his government going to stop raping Atlantic Canada without so much as a squeeze, let alone a kiss?


Some hon. Members:: Oh, oh!


Herbert Eser (Herb) Gray: I should ask the hon. member a question as to who does his writing, so that I will avoid using the same person.


Some hon. Members:: Oh, oh!


Herbert Eser (Herb) Gray: The only programs we have abandoned for Atlantic Canada are programs like the 18 cents a gallon gas tax.


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: That tax would have driven the Atlantic economy into the ground. That step alone has provided the basis for a healthy and progressive move forward of the Atlantic economy.
We are working on the kinds of programs which will encourage further progress for Atlantic Canada, including programs for the fishing industry and the area of Saint John, New Brunswick.


Robert Alfred Corbett: Madam Speaker, we did not receive so much as a kiss: apparently not even so much as a smooch.


An hon. Member:: Just a kiss-off.


Robert Alfred Corbett: Under the previous administration we met with the Atlantic premiers to have their input. Has the minister asked the Atlantic premiers to meet collectively with him or his colleague, the Deputy Prime Minister and Minister of Finance; and, if not, why not?


Herbert Eser (Herb) Gray: Madam Speaker, my officials are in regular contact with their equivalents in provincial government departments; and in terms of regular contact with the Atlantic provinces, we have outstanding members of Parliament and outstanding ministers from there to provide the necessary input.
Oral Questions


ADMINISTRATION OF JUSTICE
Mr. Svend J. Robinson (Burnaby):: Madam Speaker, my question is for the Minister of Justice and Minister of State for Social Development, if I can have his attention for just a moment.
My question concerns the seven-year inquiry into alleged price-fixing by the major oil companies in Canada-an alleged multimillion dollar rip-off of Canadian consumers. Well over a year ago, the director of investigation and research for Consumer Affairs asked the Justice Ministry to provide certain legal advice on the mass of evidence that has been accumulated in this particular case for possible prosecution.
The Justice Ministry went through a whole series of lawyers, and Consumer Affairs is now getting fed-up and is insisting upon action by the Ministry of Justice. My question for the Minister of Justice is this: first of all, I understand that Consumer Affairs have now exhausted their patience and are demanding a report by the end of this month on the matter. Is Justice prepared to make this report at the end of the month; and, secondly, what is the reason for the lengthy delay in this investigation of interest to all Canadian consumers? [Translation]


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, it is true that the director of investigations, Mr. Bertrand, asked the Minister of Justice in April of last year to appoint attorneys to study the file. Unfortunately, there have been delays and the attorneys were appointed only on November 13. Since then, one of them was able to make his report; the other one should be completed before the end of the month and if not, the director concerned will continue his investigation with the means at his disposal.


CONSUMER AFFAIRS
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, my supplementary question is for the Minister of Consumer and Corporate Affairs and Postmaster General. It follows along the same lines the Minister of Justice has just presented.
This long delay is completely unacceptable. I should like to ask the minister if he would make the information public again. We have spent six long years on this. Will he also give us his assurance that he will refer this question to the Restrictive Trade Practices Commission? If he is not prepared to do that, would he explain to the House why we should pass his estimates in committee, estimates which are being considered this afternoon, if we are not going to get action in respect of the taxpayers' dollars on this question and on many other

June 25, 1980
Oral Questions
important issues which we have passed on to him but have seen no results?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs and Postmaster General):: Madam Speaker, I can confirm that the director of investigations is taking steps to hasten the completion of the investigation and ] think that we will be obtaining his report during the next few weeks.


SUPPLY AND SERVICES
Mr. Tom Cossitt (Leeds-Grenville):: Madam Speaker, it is estimated that approximately one and one-quarter million family allowance cheques were not distributed on time toward the end of last week, therefore causing severe hardship to the many needy families involved.
My question is for the Minister of Supply and Services. In view of the fact that Mr. Joung, a Post Office spokesman, has publicly stated the cheques were delivered to the Post Office two days late by Supply and Services, will the minister confirm whether this indeed did happen, was his department late in delivering the cheques and, in any event, will he give an explanation on exactly what happened?


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, first of all permit me to congratulate my friend, the hon. member for Leeds-Grenville, on his appointment as official critic for the Department of Supply and Services. This is the first opportunity I have had to offer him that congratulation.
I would also like to point out, Madam Speaker, that indeed the number of cheques which were delivered late was in the vicinity of 4,000 to 5,000. 1 want to assure the hon. gentleman that it was not in any way due to any error on the part of the Department of Supply and Services. The cheques were delivered to the Post Office in accordance with the predetermined schedule.


Thomas Charles Cossitt: Madam Speaker, 1 thank the minister for his complimentary remarks at the start, but 1 cannot agree with him when he refers to 4,000 to 5,000 cheques, when it is reported that 45,000 alone were in the city of Ottawa. Therefore, my supplementary is directed to the Minister of Consumer and Corporate Affairs and Postmaster General.
An official of Supply and Services, head of the Supply and Services office in the city of Toronto, has blamed the Post Office, and I would like to ask him whether he is prepared to blame Supply and Services, or accept the blame for his department? In any event, will he tell us what he knows about the situation?


André Ouellet: Madam Speaker, I am pleased to tell the hon. member that in fact the Post Office Department, as it does every month, delivered over 1,270,000 cheques. Unfortunately, of those 1,270,000 cheques, about 7,500 were late in being delivered. My department assumes full responsibility for that delay. We apologize for the fact that those 7,500 cheques were not delivered on time. I am advised, however, that there was only a one-day delay so that, considering the fact that out of a total 1,270,000 cheques delivered only 7,500 were late, the average is still quite good.


INDUSTRY
Mr. Walter McLean (Waterloo):: Madam Speaker, my question is for the Minister of Industry, Trade and Commerce. Will he advise the House why the government has approved the application to FIRA by a tire company from Finland, which will import and subsequently produce tires in this country, at a time when the government has authorized a $50 million DREE grant to the Michelin Tire Company?


Herbert Eser (Herb) Gray: Madam Speaker, the law in the form it was passed by Parliament does not permit me to provide the kind of information sought by my hon. friend.
I hope the House will be supporting me before too long in legislation which, among other things, will enable the act to operate with more openness. 1 am afraid that is about all the information I can provide, except to add that if the application was approved, as he says, it was because the test of significant benefit in the terms of the act was met.


Walter Franklin McLean: Madam Speaker, in light of the serious effect on the tire companies that are now producing, and in light of the financial implications on the part of the people of Canada involved in recent negotiations, will the minister make the commitment that no government grants will be made to assist this Finnish company while the existing industry is operating so far below its capacity?


Herbert Eser (Herb) Gray: Madam Speaker, 1 am not in a position to speak for each and every department on each and every one of the range of programs of the government, but I am sure if applications are received-and I have no indication or reason to believe they will be-they will not be accepted unless the conditions are met which were set originally in respect of benefits to Canada.
June 25, 1980


VENICE SUMMIT-COMMITMENTS ON INCREASED USE OF COAL-ACID RAIN
Mr. Doug Frith (Sudbury):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. The Summit conference in Venice during last weekend resulted in a commitment by the participating countries to increase their coal production, using coal as an energy resource in order to reduce their energy consumption of oil.
What commitments were made by the participating countries which will ensure that the increased use of coal will not aggravate the acid rain problem?


Marc Lalonde: Madam Speaker, at the Summit in Venice all heads of states recognized the importance of increasing very substantially the production of coal over the next decade if we are to meet the needs of the industrialized world.
The Prime Minister and the Canadian delegation insisted very strongly upon the necessity of making sure that the environmental concerns be respected and that all necessary steps be taken to protect the environment. There was a special reference to this subject included in the final communique of the conference.
I am also happy to report that my colleague, the Minister of the Environment, has been in extensive consultations with his American counterpart over the past few weeks on the whole issue of acid rain. If the hon. member wishes to ask the minister about his discussions, 1 am sure he would be very happy to inform the House of developments in this regard.


BANKRUPTCIES
Mr. Bill Clarke (Vancouver Quadra):: Madam Speaker, 1 direct my question to the Minister of Supply and Services. It relates to a question and a motion under Standing Order 43 put last week by my colleague, the hon. member for Capilano.
Can the minister report to the House, in view of his consultation with his colleagues, on the matter of the bankruptcy of Maritime Agencies Limited, Vancouver, which was suffering from bad bebts that it was unable to collect from the government with regard to shipments of Canadian wheat to Bangladesh?


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, I am not in a position at this time to furnish any further information relating to MAL. I would be pleased to discuss the matter with the hon. gentleman.
I have been in touch with the Minister of Industry, Trade and Commerce and the Minister of Justice to hasten a resolu-
Order Paper Questions
tion of this most disturbing difficulty. 1 recognize, as does the hon. gentleman, that we are dealing here with food aid that is much needed by Bangladesh. I hope the problem will be solved within the very near future.



ROUTINE PROCEEDINGS


[Stage Direction]
On the order: Government Notice of Motions
June 20, 1980-The President of the Privy Council:
That the Standing Committee on External Affairs and National Defence be empowered to examine the implementation of the provisions of the three baskets of the Helsinki Final Act by Canada and other participating states and consider Canada's participation in the Madrid follow-up meeting of the Conference on Security and Co-operation in Europe (CSCE) and report to the House; and That the committee be empowered for this purpose to retain the services of advisers to assist in its work and that it also be empowered to retain such professional, clerical and stenographic help as may be required and that it also be empowered to advertise invitations to the public to submit opinions on the aforementioned matter.
Madam Speaker:: Pursuant to Standing Order 21(2), this notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the House.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 54, 85, 98, 691, 769, 792, 829, 835, 838, 899, 948, 950, 951,956, 989, 1,018 and 1,056.
I ask. Madam Speaker, that the remaining questions be allowed to stand.


Mr. Cossitt: Is the Department of National Health and Welfare aware of an interim report released on Tuesday, November 6, 1979, by the Ontario College of Physicians and Surgeons on the subject of the consumption of vitamins and, if so (a) what are the conclusions of the department in regard to the value or otherwise of each vitamin to the human body (b) specifically, has the department any evidence to support the theory that (i) vitamin C is effective against the common cold (ii) vitamin E is useful in heart disease treatment (iii) various vitamins in the B group are helpful in certain types of mental illness, etc.?

June 25, 1980
Order Paper Questions


Hon. Monique Begin (Minister of National Health and Welfare):: The department has received and studied the interim report on vitamins from the Ontario College of Physicians and Surgeons. Vitamins are essential nutrients for the proper functioning and control of a wide variety of biochemical processes in body cells. Severe disease conditions result from vitamin deficiencies. The department has not received any evidence from properly constituted and controlled clinical trials which would demonstrate that vitamin C affords protection against the common cold. No appropriate evidence has been received which would demonstrate the safety or effectiveness of vitamin E in the treatment of heart disease, nor for the B vitamins in the treatment of mental disorders.


[Stage Direction]
24 Sussex Fiscal Year	Annuals	Bulbs	Shrubs and Trees	(Flowers- Quantity	-3" Pots) Cost	Quantity	Cost	Quantity	Cost1979-80	5,049	S3,382	5,750	$ 784	23	S 6491978-79	4,502	$3,398	5,750	$ 650	Nil	Nil1977-78	3.958	$4,586	4,750	S 620	2	$ 681976-77	2,695	$2,347	8,750	$ 577	Nil	Nil1975-76	4,629	$2,063	10,250	$1,051	1,560	$6,081
As records are destroyed after a 5-year interval, in accordance with government records disposal schedule, no information is available prior to the fiscal year 1975-76.
Mr. Cossitt: 1.	Between April 20, 1968 and May 22, 1979, what was the total amount of public funds spent on flowers, plants, etc., of any kind for the Prime Minister's
(a)	official residence at 24 Sussex Drive (b) summer residence at Harrington Lake (c) offices?
2.	What is the combined total for the locations mentioned in part I?
3.	Were any of the flowers worn by the Prime Minister in his lapel between April 20, 1968 and May 22, 1979 paid for by government funds and (a) if so (i) how many were used (ii) what was the total cost (b) if not, were such lapel flowers provided free of charge by any florist doing business with the government?
4.	What are the names of all florists supplying any goods mentioned in parts 1 and 3 and which ones supplied roses and/or carnations for the use of the Prime Minister, if such were indeed supplied?


Right Hon. P. E. Trudeau (Prime Minister):: 1 and 2. The
Official Residences Act covering the Prime Minister's residences (24 Sussex and Harrington Lake), the residence of the Leader of the Opposition (Stornoway) and the residence of the Speaker of the House of Commons states in part that the National Capital Commission shall maintain and improve from time to time as required such lands. During the time the residences have existed, the National Capital Commission has maintained the exterior landscaping on the lands involved and in so doing has provided certain plants, the costs of which are set out in Lists "A" and "B" below. These costs are not available prior to the 1975-76 fiscal year. The NCC maintains shrub nurseries as well as greenhouses and it is from such installations that plants are utilized in maintaining exterior landscaping as required. The Department of Public Works greenhouse provides potted plants and cut flowers for the residences and offices of the Prime Minister. This has been the routine for at least 28 years.
3 and 4. Other than supplies mentioned above, public funds were not spent.


[Stage Direction]
Harrington Lake
Fiscal Year	Annuals	Bulbs	Shrubs and Trees
(Flowers-3" Pots)
Quantity	Cost	Quantity	Cost	Quantity	Cost1979-80	366	S 262	Nil	Nil	Nil	Nil1978-79	2,212	$1,331	Nil	Nil	Nil	Nil1977-78	652	$ 478	1,425	$205	Nil	Nil1976-77	1,392	S 822	2,750	$130	Nil	Nil1975-76	1,721	$ 847	500	$ 37	Nil	Nil
As records are destroyed after a 5-year interval, in accordance with government records disposal schedule, no information is available prior to the fiscal year 1975-76.
Mr. Cossitt: 1.	Was the total amount of money allocated for professional services in the budget of the Prime Minister's office during the 1979-80 fiscal year in the amount of $270,000 and, if not, what was the total amount?
2.	Did the Prime Minister spend $115,000 for professional services during the first few months of the fiscal year and, if so (a) what percentage does this represent of the annual budget (b) exactly how was the money spent, including the names of all persons receiving it, the amounts received in each case, the services performed in each case, and the date such services were performed, in each case?
3.	Did any of the expenditures whatsoever have anything directly or indirectly to do with the federal election campaign in the months of April and May 1979 during which money was spent and, if so, what are the exact details?


Pierre Elliott Trudeau: 1. Yes.
2. Total expenditure-$1 19,756.83.
(a)	44 per cent approximately.
(b)	See below.
Name of Recipient	Type of Service	Amount	Date Service Rendered Including Termination ClausePersonal Services Contracts Mary-Alice Mullally Assistant Household	$ 375.00	May, June 1979Albert Breton	Co-ordinator Economic Adviser	5,500.00	April, MayAllan Lutfy	Executive Assistant	11,250.00	April, May, JuneJanet Cameron	Secretarial Services	3,509.90	April, May, JuneClaire Gigantes	Press Analyst	2,250.00	March, April, May,June
June 25, 1980

			Date Service Rendered Including
Name of Recipient	Type of Service	Amount	Termination Clause
Personal Services Contracts			
Alan Grossman	Policy Consultant	9,774.99	April, May, JunePaula McPherson	Research Assistant	2,714.26	April, May, JuneRose Mole	Computer Terminal	4,428.00	April, May, JuneOperator	Arnold Patterson	Communications	12,850.00	April, May, JuneAdvisor	Barbara Sea ley	Secretarial Services	3,253.08	April, May, JuneLeslie Whitby-	Technical Information	5,826.60	April, May, JuneCostescu	Advisor	Glenn E. Woodside	Information	9,675.00	April, May, JuneConsultant	A.C.F. Communica-	Media Services	17,675.00	March, April, May,tions	JuneUrsela Brown	Secretarial Services	975.00	March, April, May,JuneMaureen Labonte	Press Analyst	2,700.00	April, May, June$92,756.83	Miscellaneous Professional Services	Press News Services	News Wire Services	$ 1,505.66	April, MayLtd. Angus Stonehouse	Press Conference	600.00	AprilReporting Services	Computer Sciences	Correspondence	9,359.02	April, MayCanada Ltd.	Computing Services	Data Encoding Ltd.	Correspondence	2,669.45	February, April, May,Computing Services	JuneHarrington Personnel	Temporary Personnel	332.76	MarchServices	A.B.C. Business	Temporary Personnel	1,920.97	April, MayServices	Services	Personnel Pool	Temporary Personnel	2,062.08	April, May, JuneServices	Stacey Office Services	Temporary Personnel	2,872.50	April, MayServices	Victor Canada Ltd.	Temporary Personnel	2,443.44	April, MayServices	$23,765.88	
Photographic Services			
C.P. Pictures	Photographs	$ 12.00	MarchLes Freres Proulx	Photographs	109.00	MarchBrothers	$121.00	Hospitality Expenditure Prime Minister's Office	$ 2,947.12	December 1978,February, March, April, May, JuneMiscellaneous	Various Recipients	Miscellaneous Business	$ 166.00	April, MayServices	TOTAL	$119,756.83	
3. No.
Order Paper Questions


Mr. Robert Daudlin (Parliamentary Secretary to President of the Treasury Board):: In so far as the following departments are concerned:
Treasury Board:	I. 2
of Canada
2.	(a) 2
(b)	None
(c)	None
3.	None
4.	$16,383.58
Office of the Comptroller General of Canada 1 to 4. None.


Mr. Elzinga: 1.	What amounts were spent in the constituency of Pembina under the Canada Works Programme in (a) 1974 (b) 1975 (c) 1976 (d) 1977 (e) 1978 (0 1979 and. what was the (i) name of each project (ii) total contribution by the government in each year?
2.	Are there any projects planned for the near future and, if so, in each case, what is the (a) name of the project (b) estimated amount to be spent by the government?


Mr. Dennis Dawson (Parliamentary Secretary to Minister of Employment and Immigration):: 1. The Canada Works Program began in the fiscal year 1977-78.
1977-78 (phase 1)	
Name of Projects	Federal Contribution
Roofing St. Jean Baptiste Historical Site Project	$16,842
Creative Playground Construction Westlock Municipal Golf Course and Wabash	$13,146
Nature Trail Development	$13,626
Expansion of Linakia Hall	$ 5,292
Total	$48,906
1977-78 (phase II)	
Name of Projects	Federal Contribution
Community Recreational and Cultural Creation and	
Enhancement	$18,390
Athabasca Community Recreation Development	$52,259
Town of Athabasca Commercial Core Clean-up Fort Assiniboine Museum and Multi-purpose	$ 7,098
Building	$14,112
Project: Clear Lake	$ 9,144
Total	$101,003


Mr. Clarke: 1.	For the fiscal year 1978-79, how many contracts were let by the Treasury Board for professional services, to persons who at any time within the past five years, had been employed in indeterminate positions under the Public Service Commission?
2.	Flow many contracts were (a) for less than one year (b) for one to two years (c) over two years?
3.	How many contracts were let outside the National Capital Region?
4.	What was the total cost of all such contracts?
1978-79 (phase III)
Name of Projects	Federal	Contribution
Community Betterment	$ 1,425
Athabasca Municipal Library	$ 7,098
Radway Community and Agricultural Complex	$62396
Thorhild and District Multiplex	$ 14,216
Clyde and District Recreational Facility Program	$15334
Community Radio "Talk Back" Program	$ 14,196
Total	$115,165
2. No.
(a)	Nil,
(b)	Nil,

June 25, 1980
Order Paper Questions


Mr. de Jong: 1.	Were tests conducted on the mercury contamination of Indian people in the English-Wabigoon River area of Ontario and, if so, what were the results?
2.	Were the results kept from the public and, if so, for what reason?
3.	Will they be released and, if so, on what date?


Monique Bégin: 1. Yes.
Total results of mercury levels to December 31,1978 are as follows:
Tests Tests Tests Individuals Total tests < 20 ppb 20-99 ppb >
100 ppb >100ppb
Grassy Narrows	1,607	1,102	380	125Whitedog	1,653	1,242	344	67
< 20 ppb is an acceptable level >
100 ppb is regarded as being "at risk1' ppb (parts per billion)
2.	No.
3.	All results from the mercury program across Canada, including those from the English-Wabigoon River area, were released in National Health and Welfare news releases between September, 1976, and May, 1979. At that time, work commenced on a major review document which consolidated the results of all mercury testing carried out by, or on the behalf of, the department from 1971 until December 31, 1978. The document entitled Methylmercury in Canada-Exposure of Indian and lnuit Residents to Methylmercury in the Canadian Environment, was released to the public on March 17, 1980. A follow-up to this report, reviewing the 1979 data, is now being prepared.


Mr. Howie: Since January 1978, was consideration given, by the Department of Veterans Affairs, to acquiring more beds to supplement the beds presently used for disabled veterans in the Victoria Health Centre, Fredericton, New Brunswick?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: No. There has been no change in the total number of beds negotiated at the time of the transfer of the then Lancaster Hospital to the Province of New Brunswick. 57 beds were acquired by the Victoria Health Centre in Fredericton, New Brunswick. Geographical distribution of the remaining beds is Saint John-83; Campbellton-25; Moncton-35.


Mr. Howie: Since January 1. 1978. how many persons have benefited from on-the-job training under the manpower training programmes in Fredericton. New Brunswick?


Dennis Dawson: The Training-on-the-Job
Program and the Training-in-Industry Program were combined in June 1974 to form the Canada Manpower Industrial Training Program. Training under this program may be given on the job, in a classroom or special training area, or as a combination of the two. From January 1, 1978 to December 31, 1979, 1,935 trainees received training under the Canada Manpower Industrial Training Program in Fredericton, New Brunswick.


Mr. Howie: Since January 1, 1978, did a change take place in respect to bilingual requirements for employees at the Fredericton, New Brunswick office of the Unemployment Insurance Commission?


Dennis Dawson: Yes. Since integration of the Canada Employment Centre in Fredericton, N.B., (January 1979) two additional bilingual positions have been created.


Mr. Howie: Since January 1978, was consideration given by the Department of Veterans Affairs to the establishment of a chapel for use by veterans in the Victoria Health Centre in Fredericton, New Brunswick and, if not, will consideration be given?


Daniel Joseph MacDonald: Provision of a chapel was not included in the conversion of the Victoria Health Centre for use as a long-term care unit for veterans. A room is available in the veterans unit of the centre for quiet meditation, and religious services are conducted there by pastors from the Everett Chalmers Hospital, on request.


Mr. MacKay: 1.	Does the Department of Labour's proposed bureau of labour information plan to give access to income tax records held by National Revenue or give access to Statistics Canada's data base which has already used National Revenue income tax data and, if not, w hat would be the effect on the maintenance of its data base?
2.	Will the new bureau use Social Insurance Numbers (SIN) to give access or to link with records of other departments, especially National Revenue?
3.	Does the new' bureau plan to assume responsibility for the administration of that part of the Corporation and Labour Unions Returns Act (CAL.URA) relating to labour unions, that part of Statistics Canada's labour division responsible for the monthly employment and payroll survey, and all the activities of the pay research bureau and, if so, what would be the effect of such a move on Statistics Canada's gross national product (GNP) data and other essential components of its system of national accounts?


Hon. Gerald Regan (Minister of Labour):: 1. The proposed labour information bureau will not give access to Income Tax records.
2. No. Given the nature and use of the collective bargaining and labour-related data that the labour information bureau
June 25, 1980

will be disseminating, it will not require social insurance numbers.
3. No. In December, 1979, an interdepartmental labour statistics committee comprising major federal data producers and under the chairmanship of Labour Canada, was set up. Its goals are to review federal labour data activity and to make recommendations for better co-ordination in federal labour data production and efficiency.
The areas within the federal government that this committee's study may affect are labour data branch of Labour Canada, labour division of Statistics Canada, Corporation and Labour Unions Returns Act (CALURA) at Statisti Canada and the pay research bureau.
The committee's report is not due until the fall of 1980. However, as the focus of the committee is on improving data collection and production, it is very unlikely that their report will affect the functions of the proposed labour information bureau which would perform a data dissemination service, only.
Order Paper Questions
The RCMP makes recommendations to deputy ministers, who are responsible for determining within general government policies and procedures, the level of security required by EDP services employed to process the work of their department. The RCMP follows up on the results of inspections and deputy ministers must report back to the RCMP on actions taken on the recommendations that were made.
The RCMP is responsible for reporting to the Treasury Board secretariat on the over-all status of EDP security in the government. Although from time to time the SEIT finds situations which need improvement, these are not reported individually to Treasury Board but are reported to deputy ministers who must take action on these recommendations.
EDP security, including aspects dealing with telecommunications, is considered an integral part of management responsibilities and is not singled out for special audits by a central agency. The Treasury Board directs departments to perform periodic independent audits of the financial, operational and security aspects of departmental EDP activities.


Mr. Beatty: As of May 5, 1980, did government regulations require that all computers connected as hosts to the (a) Datapac network of TCTS (b) Infoswitch network of CN/CP Telecommunications encrypt any information provided for their databanks and, if so, in each case (i) did the host computers automatically encrypt the information (ii) what company manufactured the encryption equipment and what model of equipment was employed?


Robert Mose Patrick Daudlin: No. The government has no such regulation. Data encryption devices are mandatory only when classified information involving national security matters is transmitted over telecommunications facilities, including cases where computers are involved. As of May 5, 1980, these devices were not used on the Datapac or Infoswitch networks.


Mr. Beatty: As of May 5, 1980, did any central authority within the government audit the information contained in computer databanks connected to Infoswitch or Datapac to ensure compliance with Treasury Board regulations concerning sensitive information contained in such databanks and, if so, which databanks, if any, contained information not permitted under the regulation?


Robert Mose Patrick Daudlin: No, as of May 5, 1980, no central authority within the government audited the information contained in computer data banks connected to Infoswitch or Datapac.
The Security Evaluation and Inspection Team (SEIT) of the RCMP is responsible for conducting, upon request from departments, inspections and evaluations of government EDP facilities as well as private sector facilities engaged in processing government information under contract.


Mr. Elzinga: 1.	What was the amount spent in the constituency of Pembina by the Young Canada Works Program in (a) 1974 (b) 1975 (c) 1976 (d) 1977 (e) 1978 (f) 1979 and, in each case, what was the (i) name of the project (ii) total contribution by the government?
2.	Are there any projects planned for the near future and, if so, what is the (a) name of the project (b) estimated amount to be spent by the government?


Dennis Dawson: 1. The Young Canada Works program began in 1977.
Name of Projects
Playground Development and Community Improvement
Cardiff Park Facility Improvement Project Strathona Boys and Girls Teen Centre Adventure Outdoors Barrhead Arena Improvement Project Long Island Lake Outdoor Programs-1977 Athabasca Golf and Country Club Improvement and Extension
Restoration of Community Facilities and Grounds Total
Name of Projects
Laff (Let's Adapt for Fun)
Westlock Canadian Bison Baseball Championship Cardiff Regional Park Development Program Summer Spirit 1978
Total
Federal Contribution


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Federal Contribution
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June 25, 1980
Order Paper Questions
Name of Projects
Cardiff Regional Park Youth Support Committee Summer Millwoods Summer Camp Day Care Work and Win or Earn While You Learn Alexander Young Canada Works 1979
Total
2. No.
(a)	Nil.
(b)	Nil.
Mr. Cossitt: 1.	Since April 20, 1968, did the Prime Minister meet with Prime Minister Fidel Castro of Cuba and, if so (a) in which locations and on what dates (b) for what purpose?
2.	Did the Prime Minister meet together with the Prime Minister of Jamaica and the Prime Minister of Cuba at any time at a meeting publicly known or otherwise and, if so (a) in which locations and on what dates (b) for what purpose?


Pierre Elliott Trudeau: 1. Yes.
(a)	Havana, Cuba, January, 1976.
(b)	During an official visit to Cuba, Venezuela and Mexico.
2. No.
(a) and (b) Not applicable.


Mr. Siddon: 1.	In (a) 1977 (b) 1978 (c) 1979 (d) 1980 to date, did the Department of Transport receive complaints concerning partial or complete brake failings in Volkswagen Rabbits, Sciroccos, Audi Foxes and Dashers and, if so (i) how many (ii) how many involved a motor vehicle accident?
2.	How many reported accidents (a) involved personal injury (b) led to one or more fatalities?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: 1. Transport Canada has received 70 complaints up to May 31, 1980 about brake failures on VW Rabbits, Sciroccos, and Dashers and Audi Foxes. The following is the chronological order of receipt:
Year of	No. received by	Accidents resultingComplaint	Transport Canada	from failure1977	1	01978	0	01979	12	01980 (to May 31)	57	0
2. No injuries or fatalities have been attributed to these failures.


Mr. Herbert: With reference to the answer to Question No. 273, how many of the forty employees indicating their willingness to be transferred to Charlottetown, P.E.I., in 1980, have (a) French (b) English as their mother tongue?


Daniel Joseph MacDonald: (a) 12; (b) 28.


Madam Speaker:: The questions enumerated by the parliamentary secretary have been answered. Shall the remaining questions stand?


Some hon. Members:: Agreed.


A. Daniel McKenzie: Madam Speaker, I have a point of order that I would like to raise with the Parliamentary Secretary to the President of the Privy Council. On May 12 1 placed a starred question on the order paper with regard to the formula for DREE grants for revitalizing rail relocation in Winnipeg. 1 raised this matter two weeks ago in the House to ask what has caused the delay in answering this starred question. Could the parliamentary secretary inform me today what is the problem with regard to answering this question?


David Michael Collenette: Madam Speaker, it is very difficult to determine how fast the various questions will be answered. There are over 1,000 questions on the order paper this year. I believe that we have answered about 280 of those questions, which is a very good record.


Mr. Paproski:: No, it is not.


David Michael Collenette: 1 think that it is quite a good record. It is certainly better than the record of the last government.


Steve Eugene Paproski: Now, don't procrastinate.


David Michael Collenette: My friend from Edmonton North would like to debate the matter. I shall inform the House tomorrow of the exact number of questions which have been answered.
With regard to the hon. member's particular question, I have made note of the number and I shall pursue the matter. I might say to the hon. member for Winnipeg-Assiniboine (Mr. McKenzie) that he brought up many of the same concerns during debate on Bill C-35 last Friday. These concerns are on the record and can be found in Hansard. That bill is now before committee, and I hope that the hon. member will explore those questions further with the minister with regard to anything that he might like to know about DREE as it relates to Winnipeg. The minister will be before the committee on Bill C-35 over the next two weeks.


Steve Eugene Paproski: On the same point of order, Madam Speaker, I would like to say to the parliamentary secretary that we during our short period of time in power did not have time to answer any of these questions.
Federal Contribution


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June 25, 1980
Allan Joseph MacEachen: An honest admission.


Mr. Towers:: Madam Speaker, I have two questions on the order paper to which I would like answers. They deal with the Metric Commission and are very important to me. The questions are Nos. 810 and 811, and I simply want to bring them to the attention of the parliamentary secretary.


Steve Eugene Paproski: Madam Speaker, this is the first opportunity I have had to stand in the House after reviewing a question that I posed on Friday to the minister of sport and his subsequent answer. I know that the minister would not want to mislead the House in any way. He said in part on Friday that in return Loto Canada will receive $24 million from the provinces. That $24 million is geared to the CPI. There is also the fact that we had to look after a promise made by the previous government with regard to two NHL hockey arenas. We also looked after the arena in Olds, Alberta. I am sure that the minister, when he comes into the House, will be able to rectify that particular error in his reply.


Madam Speaker:: The hon. member should know that he has obviously raised a point of debate. If he is not satisfied with the answer that he has received, he should take advantage of other procedures to make his point in front of the House.


Madam Speaker:: Shall all motions for the production of papers stand?


Some hon. Members:: Agreed.


Thomas Charles Cossitt: Madam Speaker, I rise with regard to notices of motions for the production of papers. I understand that the parliamentary secretary has said that there are none to be produced today. I would refer him to motion No. 2 which I put on the paper at the beginning of this session. I will not take the time of the House to outline all the detail therein. The question concerns the Taschereau papers which deal with matters of national security. These papers were sent back to the National Archives by Mr. Michael Pitfield after the usual time at which they would have been made public, namely 30 years. Presumably they were sent back on the orders of the Prime Minister (Mr. Trudeau) or the security committee of the cabinet.
I have asked that all copies of documents, letters, conversations and so on between the Prime Minister or the Privy Council office and the archives be produced to show why this
Production of Papers
was done. In other words, I want to know exactly what Mr. Pitfield said in his letter to the National Archives. I should think that it would be very simple for the government to say, "Yes, we are going to do it" or "No, we are not going to do it". However, nothing has happened.
This is a matter which concerns in particular Canadian historians, if no one else. The importance of this question is to learn the espionage history as to what has been going on in this country, the knowledge of which this government has continually attempted to block from Canadians. By hiding the Taschereau papers and not enlightening us, the government is obviously hiding the names of some people of prominence. Some of us have knowledge of who those people are.
I believe that it is a disgrace that the government will not say one way or the other what it intends to do. If it does not intend to produce these papers then it should say so, so that the matter can be transferred for debate; then those of us on this side of the House who wish to pursue the matter would be able to do so. Rather, the government is trying to hide the situation by saying nothing at all. Could the parliamentary secretary tell the House when notices of motion for production of papers No. 2 will be answered?


David Michael Collenette: Madam Speaker, I stand to be corrected but I believe this matter was debated in the House last Thursday evening. Under the rules, I believe that there are 130 minutes or 140 minutes for such a debate. I understand there are 90 minutes for debate. If indeed we did deal with the matter last Thursday evening, and I think we did, then I find it somewhat impertinent of the hon. member to try to ask a question of me when he should be posing it to the President of the Privy Council during the question period.
If he wants to use the route provided by the rules, which is to lay down a motion for the production of papers, he should follow it through to its logical extension. It would then be debated and come to a division at the appropriate time.
That is all I have to say on this particular matter, Madam Speaker.


Madam Speaker:: Order, please. Is the hon. member rising on a question of privilege?


Thomas Charles Cossitt: Yes, Madam Speaker. The parliamentary secretary has made a statement which I think is a reflection on me as a member of the House, and I must correct it.
Nothing of the sort happened last Thursday. He may not have been in the House. The debate at that time dealt with moving the Department of Veterans Affairs to the maritime provinces, to Prince Edward Island in particular, and had nothing whatsoever to do with the Taschereau papers. The notice of motion I am referring to has never been answered.
The parliamentary secretary has said that I should put the question to the President of the Privy Council and not to him, but he is here representing the President of the Privy Council. If he cannot answer it, will he guarantee that he will ask the

June 25, 1980
Privilege-Mr. Gourd President of the Privy Council to make clear what is going to happen at the next sitting of the House?


Steve Eugene Paproski: Or resign.


David Michael Collenette: Madam Speaker, this is getting into something of a debate. I apologize for my error. I was around last Thursday but I did not pay attention to what was being debated on private members' hour.


Some hon. Members:: Shame!


Mr. Cousineau:: The hon. member opposite was not interested; he asked for a quorum!


David Michael Collenette: That is a good point. My colleague mentions that the hon. member was so interested in the order of business that he was playing games with the rules, being very mischievous and calling for a quorum last Thursday when other members on that side of the House and on this side wanted to debate and get along with the government's legislation.
1 will look into this matter, Madam Speaker. It is my understanding that notice of motion for the production of papers No. 2 should come up for debate tomorrow or perhaps in the next couple of weeks. The hon. member can then make his case with respect to the production of these papers.


Madam Speaker:: Orders of the day. I am sorry, the hon. parliamentary secretary to the President of the Privy Council (Mr. Collenette).


David Michael Collenette: I am sorry to interrupt you, Madam Speaker, but you did not call for the production of papers today. I think perhaps the conversation-


An hon. Member:: She did.


An hon. Member:: We said stand.


Madam Speaker:: I did, but the House was interrupted.


PRIVILEGE
Mr. Robert Gourd (Argenteuil):: Madam Speaker, I rise on a question of privilege concerning the geographic arrangement of the House. Even though I cannot speak on behalf of all hon. members, I have the impression at least that I am expressing the opinion of several of my backbencher colleagues on both sides of the House and certainly that of my colleagues who sit in the south-west corner of the House. My question concerns an old problem caused by the geographic position, and more specifically the gap which separates members in the southwest corner, historically known as the "Little Chicago" in the House, from the Chair. Out of sight, out of mind, as the
proverb goes. Because of this. Madam Speaker, members who sit in this corner have some difficulty in being seen, which inevitably makes it more difficult for them to express their opinions and ideas. This is unfortunate since very profound and wise thoughts cannot be heard and must remain untold.
Madam Speaker, since this gap cannot be closed, would it not be possible to reduce its consequences with certain tools or arrangements so that if south-western backbenchers must remain out of your sight, they will not remain out of your mind.


Madam Speaker:: Am I to understand that the hon. member is complaining that members who sit in the southwest part of the House are not recognized as often as the others? I should remind him that only today 1 recognized the hon. member for Humber-Port au Port-St. Barbe (Mr. Tobin), the hon. member for Algoma (Mr. Foster) and the hon. member for Renfrew-Nipissing-Pembroke (Mr. Hopkins), and that I also recognized certain other members last Friday, if I am not mistaken. In fact, I have the impression that most members who have been recognized on this side of the House sit in that area. I believe that they often rise because they are afraid that I shall not see them, but they have provided me with instruments which will enable me to bring them closer to the proceedings, so to speak, and I shall certainly use them on occasion. However, I do not believe that the hon. member is justified in raising the question of privilege.



GOVERNMENT ORDERS


John Edward Broadbent: That this House unreservedly condemns the government for its outright betrayal of its election promises to lower interest rates, to cut taxes and to stimulate the growth of the Canadian economy, without a mandate from the Canadian people for such a reversal.
He said: Madam Speaker, the motion before the House does three things. It points out that, completely contrary to the promises made during the recent election campaign, completely contrary to the way the government in power voted in December, they have not lowered taxes as they promised, they have not taken action directly to control the level of interest rates in Canada and they certainly have done nothing to stimulate the Canadian economy.
As all members of the House will recognize, Madam Speaker, this is precisely the same motion that was presented to the House before Christmas and for which the government in power voted in order to bring down the Conservative government of the day.
June 25, 1980

As I indicated both on that occasion and in the subsequent election campaign, several members who are now ministers of the Crown supported this course of action, namely, to control our own interest rates and particularly to lower them in order to stimulate the economy and reduce taxes. The government has done none of these things.
You may ask why we present this motion today. It is not done in jest, Mr. Speaker; it is not done to be glib; it is done because all the circumstances that warranted the motion in December have compounded in their nature, have worsened in their circumstance, so that today the motion is even more warranted than it was before Christmas.
We have massive unemployment. According to Statistics Canada there are over 900,000 unemployed men and women. In real figures, if we include all those, young and old, who would like to work but are not counted in the statistics, there would be more than one million unemployed.
Plants are closing down in almost every part of Canada but particularly in the province of Ontario. Nine out of ten recently unemployed Canadians are in that province alone. Farm incomes were earlier predicted to decline by some 11 per cent in 1980 but more recent predictions suggest that they will be worse than that.
In the first quarter of 1980 there was a record number of bankruptcies of small businesses. In terms of economic indicators, there was negative growth in the first quarter of 1980. Forecasts by observers, both inside and outside government, are that the final results for 1980 will show a negative growth as well.
Finally, and of great importance to Canadians wherever they may live, there is what even the United States government is now recognizing as the most serious recession in the United States since World War II. This is bound to have a profound impact on Canada in the months ahead. So I repeat, Mr. Speaker, that what we called for in December and what the Liberals voted for then is required even more today.
What options does the government have? First, they can choose the one which is appropriate for the Liberal party which I shall call the Mackenzie King option-that is, to do nothing and hope and pray that the problem will somehow disappear on its own.
The second option is to worsen the recession by intensifying the Canadian Conservative party policy which is being so ruthlessly and foolishly applied by Margaret Thatcher in England more systematically than even was called for by the Conservatives here. We have seen the results in England-an increase in inflation and, according to figures that were just published today, the highest level of unemployment in Great Britain since World War II. That is the result of option two. So we could opt for the Mackenzie King solution, or the Tory approach which takes us back to the 1920s.
Third, we might recognize the real nature of the Canadian economy and take some constructive, positive government
Election Promises
action. It is the latter that we recommend. We say that we should do the following, and I want to justify it both in social and economic terms today. I hope that the Minister of Finance (Mr. MacEachen) will reply and deal with both arguments.
We say we should cut taxes. We should take other direct stimulative measures and should establish a government controlled low interest rate policy, which I say in this context would ensure that the banks, the oil companies and the department stores pass on those officially established low interest rates.
What kind of action is the government taking. Or, more correctly, what kind of action does it seem to be taking, because it is hard to tell precisely what this government is doing? I think that the government is likely to take the "MacEachen muddle through" approach. This means two steps to the side and one step backwards. In other words, two doses of John Crosbie, on the one hand, and one of Margaret Thatcher, on the other. This is an unbeatable combination if we want to make a bad economic situation even worse.
In this context I would like to say that at least the Tories are honest about their conservatism. The Liberals like to pretend that they are progressive when, in reality, they inflict upon us conservative policy.
If the government takes this approach in everything, including what the minister has said in the House of Commons-he indicated that is what the government is going to do-as surely as we are sitting in this chamber today, the following will be the result in 1980; the economy will get worse, not better; we will have more shutdowns, not fewer; the thousands of young people who will be leaving school-many of them this week- will not be able to find jobs; and the incomes of the farmers of Canada, as the business section of The Globe and Mail pointed out yesterday, will take a further "steep decline".
That is the situation we are headed for in 1980 if the government pursues the policy it has indicated is likely ever since it was restored to office. What is the alternative? The alternative we in this party say is, first of all, to be honest with the people of Canada and to say: "Yes, there are no palliatives in the short run that are going to restore completely full employment, to restore completely the expectations for young men and women that they will get jobs in the short run". Anyone who is saying anything like that is either dreaming or lying, one or the other.
A long-range solution is required in this country. We are saying that with shutdowns of branch plant industries all across our land, the long-range solution has to be to get Canadian control of Canadian industry. Having said that, and having said that there is a necessity to level with the people of Canada about that kind of industrial strategy that is required here, the like of which has been applied in other industrial nations, I would also say that in the immediate context there are certain important things that can and ought to be done to improve the situation.
First, tax cuts. We are advocating a cost of living tax credit, a form of indexing aimed at those who need it; that is to say,
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Election Promises
the average income earner and the poor. In our judgment, this would be both more expansionary and equitable in its effects than the Conservative-Liberal form of indexation, which we would abolish. The current indexation costs the treasury of Canada $1.4 billion. Our proposal for tax reform and tax cuts would cost some $2 billion. This is a next increase in cost to the treasury of some $600 million.
Consider the consequences, Mr. Speaker. First of all, I want to compare our suggestion with the Liberal-Conservative indexation that we now have in Canada, which as I have said we would abolish. Under it, a man or woman earning less than $5,000 a year gets nothing. Someone earning $7,000 a year would get $63 in tax benefits. But if a person is earning $50,000 a year, that person gets $763 with indexation. If you are really "poor", earning $75,000 a year, with this Liberal-Tory kind of tax measure you would save in the present tax year some $948.
The principle, as the financial critic for our party has pointed out a number of times in recent weeks, is very clear. With this kind of indexation, those who have most get the most, and those who have nothing get nothing. That sort of sums up Liberal and Conservative economic policy in terms of the tax field.
I want to contrast that with what we would put in its place, and put in its place tomorrow if we had the authority. Our cost of living tax credit form of indexation would provide the following kind of benefits. For a married taxpayer with two dependants, a man or woman earning $5,000 a year or less, instead of getting nothing as they do with indexation, would get $358. Someone earning $7,000 would get $357. Those who earn $50,000 or $75,000 a year, instead of getting much more, as is the case under the Liberals and the Tories indexation proposals, under our proposal would get not a cent in terms of tax reduction because they do not need it. The turning point for us and our tax proposal would be a family whose income is $35,000 a year. Those earning $35,000 or less would get a tax benefit. The lower the income, the greater the benefit. For a person earning more than $35,000, there is no tax benefit at all.
Under our proposal, an average family with two dependants earning $18,000 a year-and that is the average family income in Canada-would get some $258 in tax benefits. The net effect of such a proposal is as follows. First, it would be more just, and surely in a tax system justice ought to count for something. In the last ten years the rich in Canada have got relatively richer and the poor have got relatively poorer. Overnight, if we brought in this kind of tax measure, that kind of pattern would be turned around, and it is that kind of action which this party favours.
Second, because we are talking about the over-all effect on the economy, our proposal would in fact be more stimulative because the tax benefit is going to low and middle-income people. As a result, more purchases would be made, because unlike upper-income people, the middle and low-income people spend most of their money. Therefore, the effect on the
June 25, 1980
economy, quite apart from the justice argument, would be much more positive than the present tax system.


Steve Eugene Paproski: Make the rich pay?


John Edward Broadbent: I will not even comment on that.
The second part of our proposal is a regionally-oriented capital development expenditure program spread over two years. By means of this we are advocating spending some $400 million to provide needed facilities in a number of cities across Canada. Our estimate is that this would provide an additional
60,000	jobs. The tax proposal which I mentioned a moment ago would produce some 100,000 additional jobs, according to our estimate. We also advocate spending some $500 million on railway upgrading as recommended by the Hall commission. This would be good not only for the farmers in the west but would also provide employment for some 70,000 Canadians.
Third, we say $300 million in urban transit should be spent. Again this is good for a variety of reasons. It is good to stimulate the economy, but also it is an important means of conserving energy. As everyone knows, urban transit is the best form of transportation for our cities in terms of conserving energy. That program would produce some 40,000 jobs.
Finally, $500 million would go into a special housing program to reverse the recent pattern of CMHC, which has been underspending its own capital budget. We would concentrate on non-profit and co-operative housing, housing for the people who need it most. Again, two needs are met. Canadians who need housing would get it and there would be 70,000 new jobs produced. That is some 240,000 jobs in all.
I want to stress that this four-part capital works program would be worked out in conjunction with the provinces and the priority targets would be those parts of Canada which have the highest unemployment levels.
The combined package of this capital investment program plus the cut in taxes over two years would provide in the public and private sectors a total of 400,000 additional jobs. In suggesting these ideas, I am sure the Minister of Finance will say they are not new. I say to him in passing that good ideas do not necessarily have to be new. I just wish the Liberals would pick up on some of our old ideas and apply them. If they did, the country would be in a lot better shape.
I want to deal with two important points that have been raised by the Minister of Finance, who has suddenly officially acquired his conservative clothing. They have also been raised by the official opposition and by a number of newspaper editorial writers across the country. They attack the kind of program that I am now outlining. They do so on the basis of a profound mythology that is being re-established in Canada, something that I thought came to its final and crushing end after World War II. Evidently it has not.
What are the aspects of this mythology? First, we should not have such a program because, myth number one, we have a terrible record already in terms of our deficit. How does the
June 25, 1980

level of our deficit fit in with the reality of other industrial countries? If you look at the seven major OECD countries and compare their deficit as a pecentage of their GNP, how does Canada fare? Germany, which is not doing badly in the economy-and I hope the Prime Minister (Mr. Trudeau) had a useful chat with Helmut Schmidt-has a larger deficit. Japan, which has also not done badly in recent times, has a larger deficit, as does Italy and the United Kingdom. There are only two countries among the major seven whose deficit is somewhat "better"-and I put that in quotation marks-than ours, and they are France and the United States.
If you look at our record of deficit as a percentage of our GNP and compare it with other industrial countries, Mr. Speaker, we are doing very well indeed. We should get rid of this myth, and myth it is, that we are much too much in debt already as a nation. I have said in the past, and I repeat today, that the private sector, large corporations and small, borrow money and go into debt for future expansion and development. No one criticizes that. It is time we recognized that if it is appropriate for the private sector to go into debt for some period of time, if it is using those funds for investment to create jobs, it is damned well appropriate for the government sector to do the same. It makes economic sense in both cases.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Myth number two; government expenditures have been running wild. That is the other cliche we have heard from both the Conservative and Liberal parties. What is the reality? There have been some relative increases in our debt, even if it is not nearly the same level which exists in the majority of other OECD countries. What has been the reason for the debt? Has it been that government expenditures have been running wild? Of course not. The most recent figures available, 1977, indicate the contrary. Of the 14 selected OECD countries, average government expenditure as a percentage of GNP was 44.1 per cent. In Canada, it was 41 per cent, substantially below the average. That is a good comparison for us.
The reason we have gone into debt is for quite different considerations, and I now want to address those. Any party or government has to be concerned about the long-range implications of its level of debt, just as in the private sector a small or large corporation cannot go on with a debt piling up indefinitely. The question is a serious one. It must be answered at any given time with regard to the level of debt, how it is being used and how it compares with the situation in other industrial countries.
Why have we been increasing our deficit since 1975? Has it been because of the great so-called increase in expenditure by the government? Contrary to mythology, it has not. The main reason for the increase in our deficit since 1975 has been the increase in costs that have had to be borne. Tax revenues have gone down, higher unemployment insurance payments have been made and a high level of debt charges because of the high interest rate policy pursued by this and the preceding government has been forced upon the people of Canada.
Election Promises
Those are the main reasons for the increase in the debt of the people of Canada. It has almost nothing to do with the level of government expenditures as such. The reason we are having a decline in revenue coming from individual taxpayers and a decline in tax revenues from corporations is that the Government of Canada has not managed the economy well. We have had an increase in debt because of the incompetence of the Liberals who have governed this country for so long.


An hon. Member:: And you propped them up.


John Edward Broadbent: We will hear from our friends who sit literally and metaphorically on our right in just a minute.
The solution is to turn this rundown economy around and get it moving in another direction. If our policy suggestions were implemented tomorrow, the following results would occur. More taxes would be paid by individuals who would be working instead of collecting unemployment insurance. Businessmen would pay higher taxes to the government instead of going out of business. Farmers would pay more taxes instead of losing income on their farming operations. There would be fewer payouts from the public treasury for unemployment insurance and welfare. Those would be the results of the kind of program we have advocated.
I want to say quite frankly that our package would constitute a $2.3 billion stimulus and would indeed increase the deficit by $800 million to $900 million in the current year. However, because of the stimulus provided in this year, we have calculated that the net effect within a couple of years' time would be a net reduction of $3 billion to $4 billion. It is that kind of planning which this party believes in, and it is precisely that kind of planning which is rejected by the two old-line parties.
I want to deal with another concern which has been expressed in editorials and elsewhere, which is that such a program at this time would be inflationary. But would it? I should like to suggest the contrary. Consider the following. We have a million unemployed; fact one. Fact two, the most recent capacity-utilization figures offered by the government itself for the first quarter of this year show that manufacturing in Canada is running at only 84.6 per cent of capacity and that in the important durable goods sector it is operating at only 80.4 per cent of capacity. These factors taken together mean that the economy should be able to take a lot of stimulus at this time without resulting in an increase in inflation.
However, just to hedge our bet and, what is more important, to qualify the judgment, we make an additional proposal. One of the important characteristics of modern western economies, one of the essential features of what has come to be known as stagflation, is that corporations, particularly large ones, do not respond to market conditions, even guided market conditions of the kind we are proposing.
It might well be the case that, if the government were to produce a package of stimulation of the kind I have been advocating, a number of corporations would use the opportu-

June 25, 1980
Election Promises
nity to jack up their prices in an unwarranted way. That is precisely what has come to be known as stagflation in other countries. They would jack up their prices not because their costs went up, not because they were obliged to, but because they saw an opportunity to make greater profits.
In the face of this reality we are also saying that it makes economic sense to produce, concurrently with this kind of stimulative package, a fair prices commission which would be able to monitor what went on in the economy and would have authority to order a roll-back of every unjustified price increase. If this were to take place, if the government had enough innovative imagination to produce such a commission, two things would follow: many companies which otherwise would have boosted their prices would decide not do so because if they did they would be caught; second, those which did so would have their prices rolled back unless the increase could be justified.
Then there is the question of wage settlements, a very important factor in a modern economy. Wage and salary settlements in the rest of 1980 and in 1981 would be much more reasonable, because if workers believed the government was serious about dealing with prices and inflation they would be more reasonable in their wage demands. But as surely as we are sitting here, Mr. Speaker, if the government does nothing about unjustified price increases workers will be demanding, and deserving, much higher wage and salary increases.
The next subject 1 want to talk about is interest rates. I have no doubt the Minister of Finance is going to claim that he and his party have delivered the goods on interest rates. 1 say in advance that this is a phony claim and the Minister of Finance knows it.
Why do I say this? First, although rates have indeed dropped-and every Canadian has to be pleased that they have moved in the right direction-the reality is that, contrary to what the Liberals promised, they went up four times right after the election. But, more substantially, the method the government has used to establish interest rates is simply to link them in a fixed way to continental trends. The minister knows as well as anyone in this chamber that the reason rates have gone down in Canada is that they have gone down in the United States. And as surely as they will go back up in the United States, as they will at some point, they will again go up in Canada. We want an independently established, government-ordained interest rate policy.
The other point I would make is this. While the prime rate established by the Bank of Canada has gone down to 10.67 per cent, all those rates which affect Canadians directly, whether they are consumers, small businessmen or farmers, have remained virtually unchanged since the Liberals came to power. Consider the chartered banks. The prime rate is 13.5 per cent but the rate for consumer and small business loans remains at 16 per cent, the area they were in when the Liberals came to office.
Second, consider the retail implications of what the oil companies, the banks and other major retail concerns are doing. Chargex and Master Charge have not reduced their
interest rate but have boosted it from 18 per cent to 21 per cent. We see all the commercials urging us to shop at the Bay. I can understand why; they are going to increase interest charges on their accounts to 23 per cent from October 1. Shell recently increased the interest charge on its credit cards to 21 per cent. Gulf is going up to 21 per cent on September 1 and dear old Esso, the largest in the field, not content with 21 per cent has announced it will increase its interest charges to 24 per cent on August 1 of this year.


Some hon. Members:: Shame!


John Edward Broadbent: The point 1 am making, Mr. Speaker, is that if you consider the impact of interest rates on small businessmen, farmers or consumers generally, quite apart from the fact that the prime rate, the Government of Canada rate, has gone down, the rate where it counts in the economy has remained virtually unchanged. It is the responsibility of the government to ensure that changes in the private rate are passed on to the ordinary people where they will do the most good.
I conclude by saying that the Liberals promised action on all these fronts. They promised a Canadian-controlled, low interest rate policy, they promised tax cuts and they promised stimulation of the economy. They have failed to deliver on any of those promises. The approach taken by my party would, in our judgment, produce jobs, reduce unemployment insurance pay-outs, lead to increased government revenue and within two years reduce the level of the public debt. The alternative, the course being pursued by the government-witness the "MacEachen side-step", the master of inaction-will produce continued stagnation in the economy, higher unemployment, increased business failures and a continued rise in the public debt. I have not the slightest doubt that, if the people of Canada were aware of the arguments involved and of their consequences, they would opt for our program any day of the week.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, I am sure it will surprise no one in this House to learn that 1 am unusually interested in the motion before us, in its subject, in its source and in its history. 1 would like to deal with these, if I might, in reverse order. After all, this is the motion which ended the life of the last Parliament and stopped progress on many important changes which the nation needed.
The motion is introduced today by the New Democratic Party and 1 found it interesting that the leader of that party found it necessary to half-apologize for its introduction. It was introduced by the NDP to demonstrate that, while other parties might have failings, the NDP stands in a place apart- for NORAD and against it, for the Olympic boycott and against it, for the Parti Quebecois and against it, for free speech, except when Paul MacEwan speaks freely of Marxists in the New Democratic Party in the province of Nova Scotia.


Some hon. Members:: Hear, hear!
June 25, 1980


Charles Joseph Clark: The CCF began as a party which was populist and a party that was principled. It became the NDP, controlled by the Canadian Labour Congress. And, Mr. Speaker, if there is a heaven for hypocrites, that will be the next stop for the members of Parliament sitting to the left of my party.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: It is not surprising that they should propose motions. Motions are what the New Democratic Party is all about. Always motions, never action. Indeed, it is interesting to look at what happens to their leaders when some kind of action is available. I think of the Hon. Hazen Argue, that Les Benjamin of a decade ago, the man who railed in this House against wheat sales to China and who railed against the Senate, and who is now sitting in that hot bed of socialism, the Senate of Canada.
I think of the Hon. Tommy Douglas sitting now on the board of directors of Husky Oil. The question we have to ask ourselves is, what is in the works for Ed? What haven of socialism awaits him? Will it be Husky Oil? Will it be the Senate of Canada? What corporate welfare bum awaits the hon. member for Oshawa (Mr. Broadbent)?
1 want to return shortly to the very creative approach to principle of the New Democratic Party, but first let us look at the cost to Canada of this motion the last time it was introduced in this Parliament. Thanks to this motion and the NDP's sponsorship of it last December, Canadians were denied a budget which set clear economic directions for Canada and laid down a firm plan which would cut the federal deficit in half within four years.
Thanks to this motion and the NDP's sponsorship of it last December, we now have a government which refuses to bring in a budget and which has already added more than $3 billion to the Canadian deficit. Thanks to this motion and the sponsorship of it by the NDP, the freedom of information legislation which my government introduced is being amended now to close the public of Canada out. Thanks to this motion and the NDP's sponsorship of it, the nuclear inquiry which was sought earlier this very day by the hon. member for Mission-Port Moody (Mr. Rose) has been shoved aside and shrouded in secrecy so that the people will be shut out and only the bureaucrats will take part. Thanks to this motion and the NDP's support of it, Canada has no energy agreement and no energy policy.


An hon. Member:: Would you have provided us with one?


Charles Joseph Clark: I hear the voice of the new Hazen Argue booming from the background asking if we would have provided one. Of course we would have, and he knows it. We would have provided a program which would have set this country clearly and emphatically on the road to energy selfsufficiency within this decade. The government opposite says it cannot be done. We know it could be done by following the policies which were set forward in the budget and in the
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proposals that the motion introduced by the New Democratic Party brought to a halt in this Parliament.
That proposal would have provided orderly and staged price increases to more realistic levels. It would have produced more than $6 billion in new federal tax revenues from the large corporations for energy investment by Canadians in Canada. It would have funded new supply programs, new conservation policies and a major effort to switch Canadians from scarce oil to more plentiful natural gas and other energy forms. It would have guaranteed lower income Canadians tax credits to adjust to higher energy costs. The New Democratic Party voted against that. It would have given farmers, fishermen and public transit special energy rebates. The New Democratic Party voted against that. The NDP motion wiped all of that out.
And for what? Today we have no energy agreement. We have no energy policy. Instead, we have a government with a revenue-grabbing policy intent on imposing a new tax on gas exports to push up energy costs for consumers, particularly in the province of British Columbia and the province of Saskatchewan, provinces which the New Democratic Party should be standing here defending. Instead, by their motion last December they imposed new and special burdens upon the people of Saskatchewan and British Columbia.
What else have we? We have in this energy program put forward by the Liberal party as a result of the Liberal-NDP coalition proposals for new refinery taxes which could add 27 cents a gallon to gasoline prices and an equivalent amount to home heating oil costs.
Thanks to this NDP motion Canadians were denied mortgage interest and property tax credits to help meet the high cost of home ownership. Farmers were denied a chance to turn the proceeds from the sale of farms into retirement income free of capital gains taxes. The Atlantic provinces lost the benefits of special tax contracts for new investments and new incentives for Canadian fishing vessel construction. Instead, we now have a government bent on punishing the poor through the de-indexation of personal income taxes. The New Democratic Party says it is happy about that. The Leader of the New Democratic Party says he wants to abolish indexing. He supports the proposal to punish the poor in Canada which is being put forward by the Liberal party. Together this Liberal-NDP coalition wants, over the next five years, to raise taxes by 180 per cent for families with taxable incomes of $10,000 and to bring back on to the tax rolls thousands of Canadians who are now too poor to pay any tax at all.
That is what this motion did for Canadians the first time around, and I am pleased that the New Democratic Party has agreed to recycle it this afternoon so that the people of Canada can be vividly reminded of just what the New Democratic Party has done for them lately.
There are a few other things Canadians should know about the New Democratic Party and its carefully cultivated image of consistency. Members of the New Democratic Party are as consistent as a rag in the wind, shifting with every breeze. On foreign policy, the hon. member for Oshawa said during the

June 25, 1980
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election campaign that he was 100 per cent behind President Carter's policy on Afghanistan. Then we heard from the hon. member for New Westminster-Coquitlam (Miss Jewett). She condemned her leader for that statement, so the Leader of the New Democratic Party turned around and said he was not 100 per cent behind Mr. Carter.
The New Democratic Party is on record against participation in both NORAD and NATO. Then the Leader of the NDP in the election campaign said that he wanted to review that position. After the campaign his Ontario council passed a resolution accusing him of flagrant disregard of party policy. So, with the election safely behind him, the Leader of the NDP said that he still might have a review but that it would not change the position. The New Democrats are still against NORAD. The New Democrats are still against NATO, regardless of any contrary impression which might unfortunately accidentally have been left during the election campaign.
On national unity, the Leader of the New Democratic Party gave a speech in this House in which he praised everything about the Parti Quebecois except its raison d'etre, sovereignty-association. Then he refused to participate in the No campaign in the Quebec referendum. 1 can understand that. Since their Quebec leader was an active member of the Yes campaign, 1 suppose they did not want to divide their energies.
Then at the first ministers' conference the NDP asked for a voice without a vote. They wanted to be heard, but they did not want to be counted. That was the first time they had been quite so straightforward about defining their role. They want to be kibitzers at the card game and to tell other people how to play but not to get into the action themselves. That proposal was rejected by all of the premiers, including the NDP premier of the province of Saskatchewan.
I point out that that is not the first time the NDP in office has disagreed with the NDP in motion. The party to my left opposed tax credits for mortgage interest. Allan Blakeney made them the law of the province of Saskatchewan. The party to my left said it would support only minor increases in oil prices. Premier Blakeney said, and I quote him exactly: "Prices should increase in regular steps and move toward the Chicago price".
Speaking of energy, the federal New Democratic Party produced in the last election campaign a campaign document advocating making the petroleum industry a regulated utility similar to Hydro. But that meant a federal bureaucracy would have to control provincial royalties, and they were not going to say that in the province of Saskatchewan. In fact, they were not prepared to discuss federal control of resources in Saskatchewan at all. It becomes a little embarrassing when your own premier has gone all the way to the Supreme Court of Canada to protect the provincial jurisdiction that you want to destroy.
The NDP talk about small business, and then they advocate taxes which would wipe out many family enterprises. They declare themselves in favour of freedom of speech and freedom of information, and their Nova Scotia party evicts an elected
member who had the temerity to speak out against what he regards as Marxist elements in the party in that province.
That is the New Democratic Party, the most unprincipled and inconsistent party in this Parliament, and I want on my behalf and on behalf of other hon. members to thank them for introducting a motion which gave us the opportunity to put their position on the record.
Now, if I might, I would like to turn to the government.

The Grits always boasted they were the low-income people's party. Isn't that beautiful! The truth of the matter is, Liberals have but contempt for those who can hardly make ends meet. There is ample proof of this. Who else but a party with contempt for low-income people could consider de-indexing personal income tax, as Liberals propose to do? Clearly the hardest hit Canadians will not be the high-income people. Indeed, the hardest hit by that barbaric step will be the citizens who have a hard time under the current inflationary period earning $10,000 of taxable yearly income.
These Canadians will have their personal income tax increased 180 per cent over a five-year period. Moreover, thousands of Canadians who are not paying any income tax now will become taxable as soon as de-indexing is effective. They will have to pay because of the incompetence of a government that inflicted on us a deficit that is now' standing at the $14 billion level.
My party will not let such a mean and unjust proposal hit small wage earners, and I warn the government that we will be putting up a constant fight to prevent them from de-indexing personal income tax.
Mr. Speaker, you have there an example of the contempt felt by this government for small wage earners. It is not the only one. The Liberals are charlatans and their word is not worth more today than it was in 1974, when they fought price controls. Something similar is now happening in the energy area. Throughout the election campaign they fough' the 18 cents tax on gasoline. But what are they now proposing, Mr. Speaker? They are considering a tax on oil sold to refineries. And the rate of that new tax will be 27 cents a gallon at the end of 1982. There is worse, however. As opposed to our tax, that only applied to gas used for transportation, the Liberal 27-cent-a-gallon tax will also apply to heating fuel. This means Quebeckers, whether rich or poor, will spend some $200 more on heating over the 1982-83 winter.
I want to speak for a moment more about indexation. I noted earlier that the leader of the NDP indicated again today that he wants to abolish the proposal for indexation; he wants to impose upon Canadians earning $10,000 a year a 180 per cent tax increase over the next five years. That is what the NDP believes in, that kind of abolition of the indexing pro-
June 25, 1980

posal. He spoke of it in Vancouver in October of 1976. His finance critic spoke in August of 1979 about their plan to do away with indexing and to put that kind of burden on the poor of Canada. We do not know, naturally, if they spoke for all in their party. We have not heard the hon. member for New Westminster-Coquitlam or others who normally take issue with the positions which the party spokesmen take. We do not know if she will prevail or they will prevail, but that at least is their position on the record. They want to attack the principle of indexing. They want to impose that kind of burden upon the poor of the country.
I say that it was this party, under the leadership of my distinguished predecessor, the Hon. Bob Stanfield, which pioneered the concept of indexation and finally forced a former Liberal government to enact that concept. This party has no intention of allowing the present government to proceed with their plan to take away that benefit from the people of Canada.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The Government of Canada has the responsibility to lead the fight against inflation. Without indexation the government has a vested interest in profiting from inflation. That is unacceptable to this party, unacceptable to the people of Canada, and it should be unacceptable to this Parliament.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The government has a responsibility, if it wants to increase its revenue, to put tax proposals openly and-[DOT] although I find it difficult to associate this word with the government-honestly before Parliament and before the people. De-indexation is a back door tax increase. That is unacceptable to the people of this country, it is unacceptable to this party, and it should be unacceptable to this Parliament. I say to the government, and especially to the Minister of Finance: If you need more tax revenues, deal with that need honestly, openly and responsibly. I say to him that tax revenues to help reduce the deficit are one matter; tax revenues simply to feed the appetite of this government to spend the public's money is something else. We on this side of the House will oppose any budget which seeks to inflict upon Canadians higher taxes and higher deficits.
This motion today allows us the opportunity not only to draw to the attention of Parliament and of the public the record of inconsistency of the New Democratic Party, but also allows us, through an amendment, to have the House of Commons express its position on the question of indexation. Therefore 1 move, seconded by the hon. member for St. John's West (Mr. Crosbie):
That the motion be amended by adding the following: "and in particular rejects the plan to de-index the personal income taxes of Canadians."


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Blaker):: The House has heard the motion of the Leader of the Opposition (Mr. Clark). While I am on my feet, may I bring something to the attention of hon.
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members. The Chair was in some confusion about whether or not Standing Order 58(13) applied. Having consulted the Standing Orders, I want to indicate that if it is the Minister of Finance (Mr. MacEachen) who is next to take the floor, he will have 30 minutes in which to speak.


Allan Joseph MacEachen: Mr. Speaker, in a sense the debate this afternoon reproduces the amendment which led to the defeat of the former government last December. I was somewhat amused when the New Democratic Party revived this amendment. I thought they wanted to recapture, for even a brief few hours, their moment of glory of last December when they drafted an amendment upon which we voted and brought down the government. They should not take too much pride in their craftmanship because 1 would tell them that the words may not have been very important in reaching that particular decision.


An hon. Member:: You are right.


An hon. Member:: Marriage breakups are always messy.


Allan Joseph MacEachen: The occasion has been used by the Leader of the Opposition (Mr. Clark) to recount the alleged losses experienced by the Canadian people since last December. From my point of view, the recreation of the amendment allows us to reflect upon the number of positive things which have happened since last December and, more particularly, to discuss some of the economic problems which face the country at present.
I welcome the views expressed by the Leader of the New Democratic Party (Mr. Broadbent) and the Leader of the Opposition, and I assure them 1 will reflect a great deal upon the advice they have presented this afternoon.
If hon. members look back at the motion moved by the Liberal party last December, they will see the reason we voted to get rid of the Tory government and what has influenced our thinking since returning to office. Obviously the Liberal party, at that time the official opposition, had the opportunity to move the main motion, which was amended by the New Democratic Party, and it was upon the vote on the amendment that the government was defeated.
The motion moved by the hon. member for Windsor West, the Minister of Industry, Trade and Commerce (Mr. Gray), was:
-this House condemns the government for its budget which will place an unfair and unnecessary burden of higher gasoline prices, higher fuel oil prices, and higher taxes on middle and lower-income Canadians.
At a time when Canadians were faced with higher energy prices because of the actions of the OPEC countries, we believed that to add 18 cents a gallon to the cost of gasoline was unfair and would be damaging to the Canadian economy. That tax is gone. We believed that during a period of high energy crisis and difficult inflation, to ask low and middle-income earners to pay to subsidize those Canadians who are at

June 25, 1980
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least well off enough to afford a home was unfair. That program has also disappeared.
We felt that the limited spending resources of the federal government should be aimed first at helping those who need help most. One of our first steps after forming the government was to increase the guaranteed income supplement by $35 a month. We have taken action that removes the unfair measures proposed in the Conservative budget, and within the available resources of the government to help those who are hardest hit by inflation.
On energy, we are working as a government to bring about an energy package which can be presented to the Elouse of Commons and which will be the basis upon which to provide a budget. 1 want to say a word or two about that later.
I want to share the view of the Leader of the Opposition in respect of the New Democratic Party, at least in one aspect, and that is its failure, in fact its repudiation of past efforts, at intellectual honesty. At one time the precursor of the New Democratic Party set a standard for at least intellectual honesty, if not political judgment. The Leader of the New Democratic Party has, I believe, the effrontery to come before the House presenting a motion and saying that in the last election campaign the Liberal party promised to reduce interest rates, promised to reduce taxes, and promised to produce a stimulative budget.
There is a word for that statement, and the word is simply that the statement is a lie. The NDP possibly will have another speaker during this debate and 1 challenge the next speaker to produce a statement from the leader of our party during the election campaign saying we would reduce taxes. On the contrary, the leader of our party on taxation said there would be review of the taxation system to ensure that it be fair and equitable, that no new taxes would be introduced or, contrary-wise, that no new programs would be introduced in the House of Commons unless those programs were financed by new taxation or from savings from current programs. That is what was said on taxation.
On the stimulative deficit which the leader of the New Democratic Party has mentioned, he can search forever and a day and find no support for his allegation this afternoon. On the question of interest rates, he will search the speeches of the leader of our party to find a promise that we would reduce interest rates. I happen to be chairman of the platform committee and 1 know the sequence of events. I know the consideration given to that problem, and there was no commitment to lower interest rates. We did not make the commitment, but interest rates came down, and that is the main point 1 want to make.
The leader of the New Democratic Party ought to be more careful in searching out his facts and telling the House of Commons and the Canadian people the truth, because there is absolutely no statement made by the leader of our party, who was establishing the party platform during the campaign, to support any of his allegations.
We had a speech this afternoon from the Leader of the New Democratic Party which was extremely interesting. He has prescribed a fiscal and monetary policy for Canada that nobody in any other industrial country will support. I attended the meeting at the Summit recently. The seven main industrialized countries were represented there and not a single leader, not even Helmut Schmidt, would support the line put forward today by the leader of the New Democratic Party.
I remember one or two times in the House when the Leader of the New Democratic Party described or held Helmut Schmidt up as a soul-mate, a model of socialism in action that might be emulated by other countries; but no leader among the seven would subscribe to the economic policy put forward today by the Leader of the New Democratic Party, and that includes Japan, West Germany, the United Kingdom, the United States and all the others.
In fact, what the communique stated was that "determined fiscal and monetary restraint is required to break inflationary expectations". Earlier in that paragraph the communique stated that "the reduction of inflation is our immediate top priority and will benefit all nations. Inflation retards growth and harms all sectors of our societies". Even though I have committed myself to reflect upon the views of the Leader of the New Democratic Party, I will have to do so in the context of the prevailing opinion in all industrialized countries of the west that the immediate top priority is the battle against inflation, and that at this stage it would be unwise to change that fiscal and monetary stance in order to reflate the economy, and to reflate it in the extravagant way suggested by the Leader of the New Democratic Party.
The Leader of the Opposition referred to the failure of the government, up to the present time, to bring in a budget. I find it passing strange that he would raise that subject in view of the long period which his minister of finance took before presenting a budget to the House of Commons. The former minister of finance, the hon. member for St. John's West (Mr. Crosbie), knows how fundamental energy policy is to the development of a budget or a fiscal plan. The hon. member has taken to using that more sophisticated phrase, "fiscal plan", and I use it in my vocabulary now following the usage by the hon. member.
The hon. member for St. John's West knows that an energy policy has immense implications for revenues, expenditures, and the deficit. He delayed his own budget until December, and even at that time his government had not succeeded in finalizing an energy agreement with the provinces. We are in the process of finalizing or seeking an energy policy now which will be more acceptable to all Canadians than the policy of the former government. As all hon. members know, negotiations with the producing provinces are proceeding at the present time with all possible dispatch.
The existing pricing agreement has been extended for one month. The ministers of energy of the various governments are at work and later, no doubt, the Prime Minister (Mr. Tru-
June 25, 1980

deau) and the Premier of Alberta may be required to meet in order to finalize an agreement.


Charles Joseph Clark: When the Prime Minister can fit it in.


Allan Joseph MacEachen: Until that happens, the same reasons which prevented the former minister of finance from bringing in a budget apply in my case. I would also add that at the present time we are carrying further the expenditure planning system which was introduced by my predecessor on this side of the House and later developed by the former government.


Charles Joseph Clark: That was something else your public servants overlooked.


Allan Joseph MacEachen: Until our expenditure plan is fully developed, it would be better to delay a budget, though 1 am not using that as a particular reason. However, the fiscal plan would be more complete with a fully developed expenditure plan.
I said at the beginning, Mr. Speaker, that 1 wanted to talk about the economic situation. 1 shall begin by saying a few words about the economic situation of the United States. These are clearly difficult times in the United States. The economy has slid into the long awaited recession, and there is no doubt about that. The key uncertainty at the present time for forecasters is the severity of the recession and the strength of the recovery. That, of course, is a fact that is of great significance to Canada because there is no doubt that the U.S. recession will spill over into this country.
As a result, 1980 will be a year of very slow growth. In April, I forecast real growth of one-half per cent. The actual outcome could turn out to be much worse for this year. We have already begun to see some of the manifestations of the slow-down. According to the recently released national accounts, real GNE fell by one-half per cent in the first quarter of this year. The main sources of weakness were residential construction, inventories and exports. Unemployment climbed to 7.8 per cent in May. My forecast in April was that unemployment would average 8 per cent for the year. Consequently, the unemployment rate would have to rise above 8 per cent for the rest of the year. Also, 1 cannot rule out the possibility that the unemployment rate may rise even faster than this figure would imply.
The weakness in the growth of output is not the only problem. Inflation continues at a high level. The consumer price index in May was running about 9.5 per cent above the figure of one year ago. I expect inflation to average 10 per cent for the year. As 1 mentioned earlier, inflation is an international problem that has been refueled and fueled again by the absorption of hefty oil price increases. The prices of the goods which we import is helping to sustain inflation. Domestic forces contributing to inflation have been moderate and it is important that this continue.
There is no getting around the fact that we will go through a difficult period. In going through this difficult period, it is of the utmost importance that we retain a sense of perspective
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about the fundamental strengths of the Canadian economy. We are going into this period with an external value of the Canadian dollar and relatively moderate increases in domestic costs, all of which has put our manufacturing sector on a sound, competitive footing.
Canada is unique among industrial countries because of the opportunities offered by our energy sector. We must seize upon these opportunities and make the best of them. Our energy strategy is being developed with this objective foremost in mind. The greater certainty that will flow from a new energy policy framework will provide the basis for major economic developments in Canada, including oil sands plants, heavy oil production, Atlantic shelf exploration and development, new pipelines and gas conversion, all of which are in the offing and can be moved ahead. These developments will provide much of the driving force behind the economy in the 1980s.
The debate up to the moment has, in a sense, outlined the difficult choices which are facing the government and myself as Minister of Finance. Pressures are mounting to stimulate the economy with more expansionary fiscal and monetary policies.
The Leader of the New Democratic Party has called for large tax cuts and for massive expenditure increases. He has also urged the government to lower interest rates and to speed up or commence the process of rapid monetary expansion.


An hon. Member:: Oh, oh!


Allan Joseph MacEachen: I assume that the hon. member understands the implications of his forced draft interest rate policy on the money supply. However, these are the views of the New Democratic Party which, in a sense, is the new New Democratic Party. Or perhaps it is the old New Democratic Party, because increasingly the views of the New Democratic Party are becoming somewhat old-fashioned. They present views which do not take into account the realities of the world. The Leader of the New Democratic Party paid slight attention to the question of inflation which is engulfing the world and threatening Canada. He has overlooked other countries which have followed his strategy and which have brought themselves to the brink of ruin today.
I think it is irresponsible to call for more expansionary fiscal and monetary policies in the present circumstances, as the Leader of the New Democratic Party has done today. He has obviously not taken into account a number of very important factors, such as, first of all, the very large stimulus provided by the large deficit we are running at the present time. The Leader of the Official Opposition talked about the four or five-year plan of his government to cut the deficit in half. What he had in mind, I believe, was their objective of cutting in half the financial requirements of the government and to cut the deficit by $2 billion.
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June 25, 1980
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The Leader of the New Democratic Party ought to keep in mind the fact that we are providing a very large stimulus to the economy at the present time.


John Edward Broadbent: How does the deficit compare with that of Germany?


Allan Joseph MacEachen: 1 believe the Leader of the New Democratic Party has swept aside totally the difficult fiscal position of the Government of Canada at the present time. He has declined to consider the position of the federal government in comparison to that of the provinces, the relative situation of the five eastern provinces with respect to the federal treasury, and the relative situation of the largest oil producing province with respect to the federal deficit.
The fact of the matter is that the federal government is expected, presumably, to bear the main brunt of economic stabilization in Canada. It will be quite difficult for the federal government to discharge that responsibility unless it has access to more revenues that can come and ought to come from a new pricing arrangement.
As I said, the Leader of the New Democratic Party has overlooked a number of these important factors. He is asking me to administer a "quick fix" to the Canadian economy through massive new expenditures, through massive tax cuts and to administer lower interest rates. If I thought that recipe would solve the long-term problems facing the country, then I might be tempted to use it; but 1 believe that what that policy seems to recommend is the curing of short-term symptoms which in the long run make our situation worse.
Surely the objective of the Leader of the New Democratic Party and that of myself is precisely the same: to bring about increased productivity and a resumption of growth in the economy. I doubt whether, in the long term, that resumption of growth and increased productivity-new real investment- will occur if we put into place the policies recommended by the hon. member for Oshawa.
As I said earlier, my attitude in that respect was influenced by my attendance at the meeting of OECD ministers and by the discussions at the Summit. The consensus was that it would be desirable to maintain the battle against inflation and not to risk a renewed outbreak of inflationary expectations by an attempt to deflate at the present time.
The hon. member for Oshawa made another important point. He said that there is no difference between the fiscal stance of the former Conservative government and that of the present government. In that he made a very basic mistake. If the fiscal plan of the former minister of finance had been allowed to reach fruition, or if, indeed, we look at the predictions he gave us in his December budget, we see that his financial requirements for 1980-81 were stated as $8.2 billion and his deficit would be $11.7 billion.
The hon. member for Oshawa has obviously failed to take into account the new projections given in my April statement, which indicated that the financial requirements for 1980-81 had increased to $11.7 billion and that the deficit had
increased from $11.7 billion to $14.2 billion. I regard this as a very considerable deficit and a very considerable stimulus to the Canadian economy.


John Carnell Crosbie: Come off it!


Allan Joseph MacEachen: I would differentiate my posture from that of the hon. member for St. John's West in that respect. The Leader of the Opposition identified the difference. The fact of the matter is that the policy which I have been pursuing leaves more in the economy and provides more stimulus of the economy than did the December budget. To put it another way, if the policies of the former minister had been allowed to come into effect, the economy would lose a considerable amount of this particular stimulus.


Charles Joseph Clark: Hogwash.


Allan Joseph MacEachen: If the Leader of the Opposition wants to consult the statistics he will find that the figures are perfectly correct.
This afternoon I have been asked, on the one hand, by the hon. member for Oshawa to undertake massive deflation, and I have been asked by the Leader of the Opposition, on the other hand, to revert to the deficit reduction policy of his government which would take place over a four-year period regardless of the impact of expenditure and the deficit on output, growth and employment. I have taken a course in between, Mr. Speaker. I have not followed the extremism of the former minister of finance nor the extremism of the Leader of the New Democractic Party.


Charles Joseph Clark: In fact, you have done nothing at all.


Allan Joseph MacEachen: The Leader of the Opposition is wrong again in saying that we have done nothing at all. What we have done is to avoid a deflationary net impact upon the economy of the $2.3 billion which his minister of finance would have extracted in the form of the excise gasoline tax. After he had paid for the mortgage tax credit program, he would have deflated the economy through that particular tax measure by $2.3 billion.


John Carnell Crosbie: Where is your housing program? Where is the one you promised?


Allan Joseph MacEachen: I want to make it very clear where we stand at the present time.


John Carnell Crosbie: You are not standing, you are crawling.


Allan Joseph MacEachen: I want to make it very clear where we stand at the present time.


John Edward Broadbent: Inertia has become the principle.


Allan Joseph MacEachen: I am delighted at what has happened. I have deserved the opposition of both opposition parties. It gives me some comfort that I am following a more moderate course. What I am saying is that both fiscal and monetary
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policy at the present time is set to maintain sustainable growth at declining rates of inflation.


John Carnell Crosbie: Decline in the GNP, that is great growth!


Allan Joseph MacEachen: The onset of the recession will not lead me to adopt the very massive tax cuts and the very massive expenditure proposals of the Leader of the New Democratic Party. The onset of the recession will not lead me to balloon up the deficit as he has prescribed this afternoon. On the other hand, the prescriptions of the Leader of the Opposition will not be followed either; that is, to follow a four-year program of deficit reduction regardless of the impact on growth, employment and jobs. It seems to me that what is required at the present time is a more moderate course-


Charles Joseph Clark: Of doing nothing at all?


Allan Joseph MacEachen: -a course that will continue until an energy program is put in place and it is possible to bring down a budget to address the total problems in the way we would all want.


Charles Joseph Clark: This year, Allan?


Mr. Kempling:: Don't hold your breath.


Allan Joseph MacEachen: Finally, may I say a word about the amendment moved by the Leader of the Conservative party, an amendment which in its dishonesty is rather apparent. He refers to a plan-


Charles Joseph Clark: Your plan.


An hon. Member:: Ask Ian Stewart.


Allan Joseph MacEachen: -to de-index the tax system.


Charles Joseph Clark: It is on the record.


Allan Joseph MacEachen: There is no such plan. The fact that the Leader of the Opposition puts it in a motion will give it no more dignity than the allegations made by the hon. member for Oshawa which were so severely castigated by the Leader of the Opposition because they appeared in the amendment last week.


Charles Joseph Clark: Then you can vote for the amendment.


John Carnell Crosbie: Mr. Speaker, let me just deal with the point made by the Minister of Finance (Mr. MacEachen) that there is no plan to de-index the income tax. How can he say that after what he has said here in this House? I refer to Hansard for June 17, 1980, at page 2176, where the Minister of Finance, in his usual and obscure way, finally makes a definite statement about something. In response to a question put by the hon. member for Etobicoke Centre (Mr. Wilson), our critic on industry, trade and commerce, the Minister of Finance said this:
Election Promises
But I would say that just recently the financial critic for the NDP, I believe just a moment ago, referred me to the institute on public policy, suggesting that I should read its publication for my instruction. I understand that that body, as one example, has recommended certain changes in the index system in order to deal with the current situation. I make that point simply to tell the hon. member that it is not something one ought to drive out of one's mind as being totally unworthy of consideration.
For that minister, this is a definite, explicit statement; it is not something one ought to drive out of one's mind as being totally unworthy of consideration. Our amendment says: "Mr. Minister, drive it out of your mind as being totally unworthy of consideration". That is the effect of our amendment.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: The Minister of Finance went on to say this:
Even his colleague, the former minister of finance, told us that he had considered the proposal: that is what I am doing at the present time.
This is what the Minister of Finance said in this House on June 17, 1980. Today is June 25. He said that eight days ago and today he says there is no need for our amendment.


Allan Joseph MacEachen: There was no plan. There never was a plan.


John Carnell Crosbie: The minister said he is considering the proposal. This amendment says: "Mr. Minister, do not bother considering it any longer; do not put the blocks to the poor innocent taxpayers of Canada who voted for you on February 18, little knowing that you were going to de-index the income tax system so that you could put a crown of thorns around their brow without any notice to them if you got the chance." He certainly never campaigned on that proposition.
While I am on the point of de-indexing, let me give some impartial opinions. Dian Cohen, not known to be a great supporter of our party, wrote in the Ottawa Citizen on Monday, June 9, 1980:
The recent Liberal suggestions concerning income tax increases and the end of indexing are at best cowardly, at worst despicable and dishonest.
So we ask government members to support our amendment so that the minister will not go forth with this cowardly, despicable and dishonest matter that he is now considering, which he admitted himself on June 17 he is considering. I tell him to get it out of his mind.
Further on in the article written by Dian Cohen, she says, that it "goes against the grain of everything that is honest and fair". Where are the honest and fair fighters that we had on the other side when we were in office for some short period of time? Where is the Minister of Industry, Trade and Commerce (Mr. Gray)? One would have thought he would have growled his way from Ottawa to Vancouver fighting this proposal if we had listened to what he said when he was in opposition last fall. Where is he?
What did Mr. John Bossons, a professor at the University of Toronto, say? He said this:
It would hit low-income people the hardest. It would hit them even harder next year and harder yet the year after that.

June 25, 1980
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Mr. Bossons went on to say that the taxes of a one-income family with two children, in which the father earns $10,000 a year, would go up 30 per cent in 1980 if the government drops indexing. But if the father's income does not go up, and assuming an inflation rate of 9 per cent a year for five years, the cumulative effect would be for his taxes to go up 180 per cent by 1985. That is the little present which the Minister of Finance wants to give to the low income taxpayers of this country. I could give a lot more examples, but I will not.
One of our newspaper columnists, a great Canadian national statesman named Charlie Lynch, wrote a column which made a lot of sense in the Montreal Gazette for June 25. Mr. Lynch came to the conclusion that the NDP's motion seemed preposterous. That is just what it is. He says to the Leader of the NDP that he should cease to be Georgie Porgie who hits the girls and runs away. He is Georgie Porgie, pudding and pie, who kissed the girls and ran away.


An hon. Member:: "Made them cry".


John Carnell Crosbie: All right, "made them cry". The Minister of Finance has been asked to kiss a few people here today, or was it the Minister of Industry, Trade and Commerce? A kiss from him would certainly make you cry. So I say, cease being Georgie Porgie. Never mind these irresponsible motions which the NDP are bringing in which they think are so clever, because this one was a motion which the Liberals voted with the NDP on last December 13, and that the same motion will be embarrassing to the government.
It so happens that the motion this time is relevant, and one can vote for it with a good heart and in all clear conscience. Because if there ever was a group that should be unreservedly condemned for their outright betrayal of election promises to lower interest rates, cut taxes and stimulate the growth of the Canadian economy, this is the group.
What were some of their promises? Even the guru who recently left the gondolas will have to admit that there were some promises. What are they? Here is a CP dispatch from Toronto dated January 12 which reads as follows:
A Liberal government would hold down government expenditures-
We have just had a $2 billion increase in government expenditures to $60.4 billion. The then leader of the opposition in Toronto said that a Liberal government would hold down government expenditures. It is out of the window with that promise; that was discarded immediately. The CP dispatch continued by reporting that the Liberals would:
-reduce the budgetary deficit and make the tax system more equitable. Liberal leader Pierre Trudeau promised Saturday.
The deficit has gone up $3.7 billion so far to in excess of $ 14 billion. So much for that promise.
Now I will deal with the phrase "make the tax system more equitable". Yes, this can be done by de-indexing the income tax system or by imposing an oil refinery tax at the refinery level so that every consumer of products from a barrel of oil in this country will have to pay higher taxes, including those who heat their homes in the maritime provinces and elsewhere in
Canada. That is the more equitable tax system which the Prime Minister (Mr. Trudeau) promised that Saturday in Toronto.
What else did he promise? He promised a made-in-Canada oil price that is fairer to all Canadians. When will that materialize? We were defeated 194 days ago, on December 13, yet this government which defeated us has not yet brought down a budget. It has no alternative proposals and it has no oil price agreement. Where is the made-in-Canada oil price agreement? Where is the double-tracking? The Liberals were going to double-track the railway tracks from Winnipeg to Vancouver. They have not double-tracked the railway tracks. All they have done is double-cross the country. They have given up. The only pledge they made that they are keeping is to doublecross this country. That is what this motion is about. That is why we will support the main motion once our own amendment is carried.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: We won't get to the main motion; we will be having a summer election.


John Carnell Crosbie: A summer election, I would welcome that. We would be over there with about 250 members.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: That is what you said last December.


John Carnell Crosbie: At the same meeting in Toronto, the Prime Minister said a Liberal government would reduce the deficit. Then he made a qualification, but not at the expense of jobs, growth and the attack on inflation. He has not reduced the deficit. He has increased it $3.7 billion. He has increased unemployment. He has reduced growth, and he has not attacked inflation. Therefore, he has done none of this.
This is what the great man promised in Toronto. He said that new government programs would be financed by reallocating existing expenditures or by increasing taxes. Yes, the minister has increased taxes, the taxes he voted against in my budget of December 11. With the exception of the excise tax on gasoline, he has brought them back into the House or he is putting them through the House now. That is how he is increasing taxes.
He promised not to add to the deficit. The Prime Minister said he is going to review the tax system to ensure that all corporations and individuals will make their fair contribution. Isn't that pretty? Already the Minister of Finance has done that and he is going to do away with indexing.


Allan Joseph MacEachen: Don't be like the NDP, John, be honest.


John Carnell Crosbie: In that way we will all make our fair contribution. The Prime Minister said they would not make many promises during this campaign. I am glad that they did not because they have broken every one they did make.
June 25, 1980

Then they were going to develop industrial policies to stimulate economic growth. That was a promise of the Prime Minister. What happened? We all know that in the first quarter our real gross product here in Canada declined one half of 1 per cent. Can anybody stretch their imagination to say that they have stimulated economic growth?
They are going to create jobs. How many were unemployed in May in Canada? There were 904,000. The rate is up to 7.8 per cent, yet the Prime Minister is going to create jobs. He is going to increase Canadian ownership and control the economy. A fat chance! Nobody will want to own this economy if this government continues with its lack of policy and lack of thrust for the next four years.
He was going to protect poor and middle income Canadians by helping first those who most need assistance. Yes, by taking away the indexing, with the results 1 have already explained. He is going to do away with the mortgage interest and property tax credit scheme. He did do that. Where is the great scheme to help renters and home owners that we used to hear about from the Minister of Industry, Trade and Commerce when he was in opposition? There is not a word about that.
What happened to interest rates? Interest rates went up to 16.2 per cent during the period this government has been in office. They are down again now, but we know that has nothing to do whatsoever with the Minister of Finance because he himself was good enough to admit that in one of his few frank moments. In fact, he has few moments, frank or otherwise, as far as I can see. On June 13, as quoted in the Ottawa Journal, he said in all modesty, and I quote:
-there is no way we can insulate ourselves totally from the U.S. recession.
He made that admission. On April 18, he said lower interest rates were welcome news, but it is worth pointing out that the high interest rates we have had and the very rapid increases in these rates recently have been the direct result of action taken in the United States. He admits he cannot affect interest rates one way or the other. They go up, they go down. They follow the United States kangaroo. When the kangaroo in the United States jumps up, up comes the little pup from down in the belly and the interest rates go up here in Canada. The Minister of Finance is like a little kangaroo pup in the belly of the United States kangaroo. Up, down, up, down. The Minister just went to Venice. There the little kangaroo had a ride with the big kangaroo in a gondola.
What else did they want to do with the tax system? On March 24, only a month after coming into power, the Minister of National Health and Welfare (Miss Begin) came out with this. I quote from the Ottawa Journal:
Included in the minister's list of tax exemptions which she would like to be re-examined were the exemptions for the aged, the married and for children, as well as those offered corporations.
The minsiter wants to do away with tax exemptions for the aged. She wants to do away with tax exemptions for the married and for children. Well, if you are not married and you are not aged and you are not a child, who are you? She wants to do away with exemptions for everyone. That is the new, equitable policy of the Minister of National Health and Wel-
Election Promises
fare, wanting to put her foot right on the neck of the aged taxpayers of Canada as well as the married and the children. This is the great new equitable tax policy that this government is coming forth with. I should say coming forth because it is not coming forthwith.
The minister mentioned the 18-cent excise tax. The suggested 18-cent excise tax on gasoline is going to be far less than the minister is going to be introducing this year and next in his refinery tax at the refinery gate level. That will be on gasoline and on heating fuel. It is going to be far less for the Canadian taxpayer than the de-indexing of the income tax and the other tax increases he is going to make.
The Leader of the New Democratic Party mentioned the level of the deficit of Germany. He keeps yelling, "What about Germany? What about Germany? Well, Germany has tremendous exports. It has tremendous credit in its current account with the rest of the world. It is a strong country. It does not have one drop of oil internally; it imports all its oil. However, it is doing well in the world. If they have a larger internal deficit than we, they can well afford it. They have not had those kinds of internal deficits for the last seven or eight years as we have.
It is not the deficit in any one year that is causing the difficulty today. It is the fact that we have had them for seven or eight years, culminating this year in a deficit in excess of $14 billion. That is what the trouble is. The minister has admitted that his hands are tied in trying to grapple with the recession starting in the United States because of that. He described in his remarks in this House the fact that the large budgetary deficit in the current account means he has little room to manoeuvre. That is the effect of the deficit.
We are not against deficits per se. Nobody suggests that they can be done away with immediately. However, one way to stimulate this country's economy is to start reducing the deficit over a period of three or four years and give the private sector some hope that they are going to be allowed to expand and create jobs. Give them some encouragement, not have them compete with the government for every dollar that they borrow or every dollar that they want invested in them.
The minister and his party did untold damage to this country by defeating us last December 13. Then we just about reached our oil agreement with Alberta. We had the deficit under control. We had an energy tax ready to go ahead in the oil and gas industry, so as to get necessary money to finance energy related projects throughout this country, including helping the taxpayers and the home owners of eastern Canada. All of these things were in place. We had suggested an energy tax credit to help lower and middle income people here in Canada. All of that has been stopped for the last six or seven months by the action taken last December 13.
What good is being done? There is no good being done except to put the minister's party back in power. We have had nothing but indications from the minister and different colleagues of his as to what their course is going to be. They have just been to Venice. What does the communique say? Inflation is to be given immediate top priority. There is going to be

June 25, 1980
Election Promises
determined fiscal and monetary restraint to break inflationary expectations. That is the agreement reached in Venice.
How is the minister going to enforce that? He got up here today and said it is entirely meaningless, that he does not propose to do anything more. Why did they make this agreement in Venice? When the minister said that he supports governor Bouey's policy, the governor said on May 29 to the Senate that he thinks you really do have to stick with the monetary and fiscal policy approach limiting aggregate demand. The minister will not even tell us whether he plans to limit aggregate demand in this country even further, despite the 904,000 unemployed and despite the 0.5 per cent drop of the GNP in the first quarter.
We were in office and put forward detailed proposals for solving the economic problems of this country, we were defeated by the Liberals and the NDP and not put back in office by the people. Now the onus is on the people who put us out to come forward with their proposals and plans. But they are afraid to do so. Having defeated us, they have nothing to substitute for themselves.
On the tax question, the hon. member for Mercier (Mrs. Hervieux-Payette), in a 74-page platform paper for the Winnipeg meeting next week, says this. She noted in passing that Canadians are undertaxed compared with people in many countries. The Liberal MPs on the other side of the House think the Canadian people are undertaxed. Well, the MP for Mercier did not campaign on that basis; she did not rampage through Quebec before February 18 telling the people there they were undertaxed. But now she has prepared a discussion paper for the Liberal party in Winnipeg in which she suggests that the Canadian people are undertaxed compared with people in many other countries. What countries? How are we undertaxed? Who is she comparing us with?
The minister says it is terrible to propose this amendment because he would not dream of indexing the income tax. Well, his deputy minister of finance said to the Senate committee that they require more finances and taxes will have to go up. Who is the deputy minister of finance? The same man who was deputy minister of energy, mines and resources a few short months ago.
What have the seven Summiteers accomplished? They have accomplished nothing except this: the Prime Minister has agreed-he is agreed, now, with us, he has made full circle- that the maximum reliance should be placed on the price mechanism in restraining energy demands. This is what he admitted to at the Summit.


An hon. Member:: What do you know?


John Carnell Crosbie: What did they agree on? That is exactly what they agreed upon. They changed some wording so that they could pretend that world oil prices had nothing to do with it. We read this:
Yesterday's communique says that in order to conserve oil and increase the use of alternative energy sources "maximum reliance should be placed on the
price mechanism and domestic prices for oil should take into account representative oil prices".
So the government opposite is taking into account representative oil prices and it is going to put maximum reliance on the price mechanism. To do what? To conserve oil and increase the use of alternate energy sources. Well, to do that the price of oil has to go up. That is the policy of the government. They try to persuade the people of Canada that when prices go up they haven't gone up, they have gone down. And when the minister talks about his burgeoning deficit, it is not because he is stimulating the economy, it is because he is paying the money to foreign oil producers for the oil import subsidy. Because the cost of that has gone up, from $1.6 billion to $4 billion, as a result of the dishonest policy the Minister of Finance and the Prime Minister put to the country just before the February 18 election. Four billion dollars is going right out of this country to foreigners-to the Mexicans, the Venezuelans. The Venezuelans are putting their prices up by another $2 a barrel in the next few days. All of that money is leaving Canada. And who pays the bill? The income tax payers pay it, not the person using the gasoline to drive his car. It is being borrowed now but the taxpayer will have to pay it back. The government has put a $4 billion burden on the taxpayers this year. The government has given the consumers of gasoline a break of a couple of billion dollars, but they have given the Canadian taxpayers a $4 billion blow.


The Acting Speaker (Mr. Blaker):: Order. 1 hesitate to interrupt the hon. gentleman but his time has expired. He can continue, however, if there is unanimous consent.


Some hon. Members:: No.


John Carnell Crosbie: If there is not unanimous consent, I will retire, simply saying we intend to vote for the motion.


Hon. Pierre Bussieres (Minister of State, Finance):: Mr. Speaker, we are debating today the motion proposed by the leader of the New Democratic Party (Mr. Broadbent) asking the government to lower taxes, increase government expenditures in order to stimulate the economy, and to-


Charles Joseph Clark: Who is this guy?


Pierre Bussières: Mr. Speaker, the Leader of the Opposition has already spoken. As usual, he seems to be muttering. He could show the same courtesy as other members and listen attentively to another member's speech.
The Leader of the New Democratic Party also asks the government to control interest rates and to ensure that the banks and the large corporations which will benefit from a drop in interest rate pass this on to Canadian taxpayers and consumers.
For his part, the leader of the Progressive Conservative opposition mumbled, as he did earlier, that he blamed the government for considering de-indexation of the income tax
June 25, 1980

system. Mr. Speaker, this debate is very interesting for Canadians. It is interesting because it shows two positions, the restricting position of the Progressive Conservatives, and the irresponsible position of the New Democratic Party.
Mr. Speaker, this debate shows why the voters chose the Liberal party recently. They did so because the Liberal party holds the middle position between these two extremes. As we said during the last campaign, the Liberal party is the party of good sense, and the Liberal party, which heads this government, has a policy of good sense. In his statement of April 21, the Minister of Finance (Mr. MacEachen) said to Canadians that we were going through a difficult period. There are still inflationary pressures in Canada, and the Leader of the New Democratic Party would want us, as the government, to add fuel to the flames. He would want the government to take expansionist measures by, as stated in the motion, cutting taxes, increasing government expenditures, and so on. The Minister of Finance stated that he wanted to continue to fight vigorously against inflation because he and the government are convinced that, in the middle and long term, this is the best way to provide all Canadians with a healthier economy. That is therefore our objective. It is quite obvious that the Minister of Finance regrets that there is a $14.2 billion deficit but if he has to tolerate this large deficit, it is because the present slowdown of the economy must be attended to and the deficit will enable Canadian society to come through this difficult time with as little unfavourable consequences as possible.
The Minister of Finance does not want to implement the suggestions of the New Democratic Party because, as I said earlier, he finds these suggestions irresponsible and he believes that they would promote inflation and that it would once again be the most needy in our society who would suffer the most.
In his amendment, the Progressive Conservative leader continues to fight against windmills. In fact, he is fighting against rumours. When he says that he is completely opposed to a measure which would remove indexation, the Progressive Conservative leader is fighting against a rumour; he is not fighting against something that the government has done or even against something that the government has announced that it might do. He is fighting against a rumour going around before a budget is brought down.
Now, the Canadians who have well understood the concerns of this government and this party in the last several years, instead of believing rumours, will choose to believe this party and they can rest assured that the Minister of Finance, when he brings down his budget, will also introduce such measures as will be of benefit to all Canadians.
When the Leader of the Opposition speaks of a 27-cent tax at the refinery, once again he is fighting against a rumour. He knows full well, as do all Canadians, that the government, at a time when it is negotiating an oil price agreement, has to consider all sorts of possibilities; when the right hon. member argues against such a measure, he is strug-
Election Promises
gling with Mother Rumour. He is not criticizing a measure announced by the government, but is dealing merely with speculations. That attitude is certainly not what one would expect from a realistic leader of an opposition party. The policy of this government is to face up to reality and to present, in the face of that difficult reality, the measures best able to bring some relief to the Canadian people as a whole.
I shall refrain, Mr. Speaker, from using up any more of the time of the House to deal with this motion. I wish to give other colleagues, other hon. members, the opportunity to address the subject.
[DOT] <nio)


Mr. Bob Rae (Broadview-Greenwood):: Mr. Speaker, in putting this motion before the House this afternoon, the New Democratic Party is really raising two questions. The first question is the direction of our economic policy. The second question is the integrity of governments and, indeed, the integrity of the political process itself.
1 might just say in response to the comments of the Leader of the Opposition (Mr. Clark) that I can honestly say that before I heard him speak this afternoon I, and I know many of my colleagues, had a great deal of respect for his sense of decency in fairness of debate, but I am sorry to say that any respect I may have had before today I have lost completely.
The statements he made with respect to our party's policy were inaccurate and unfair, and in my view they did not contribute anything to a discussion of the motion before us with regard to the direction of the government's economic policy. For a while our economic policy has not really changed, and this is something which I am sure has been felt very deeply by the average citizen over the past few years. We have in fact had a bewildering revolving door performance from governments and oppositions since the earlier Trudeau administration.
The late 1970s saw the Liberal government embracing monetarist doctrines, like an aging widow suddenly lovestruck in her autumn years. The Conservatives, in opposition at that time, combined opportunism and complete confusion in an amazing, and, indeed, confusing blend of policies which included, for example, lower taxes, less government spending, tighter money and lower interest rates. The deficit in one version might be increased.
That was the period when the former member for Ottawa Centre (Mr. de Cotret) was talking about a stimulative deficit, but this policy was not carried through by the party when it took power. The Conservatives in power increased government spending, raised taxes, raised interest rates and made lower deficits a matter of sacred principle.
Both speakers for the Conservative party today, the Leader of the Opposition and the hon. member for St. John's West (Mr. Crosbie), in discussing their tragic loss of power in December, failed to mention one thing in this conspiracy view of history with which the Conservative party has attempted to

June 25, 1980
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comfort itself, and that is the simple fact that between December and the formation of the new government there was something called an election. It was not simply that this House spoke on December 13. It was the people of Canada who spoke in a democratic election on February 18 and rejected the policies of the hon. member for St. John's West, rejected the budget of December 12 and called for change. I think it is all very well to concentrate on what may have happened here in December, but what happened here in December is less important than what happened in the country from December to February.
I want to talk briefly about the position that the Liberal party took when it was in opposition during that Conservative government period. The Liberals in opposition favoured stimulus. The Minister of Finance (Mr. MacEachen) has denied it today, but I refer him to speeches made by the Liberal finance critic at that time in the finance committee, in which, regrettably, the Minister of Finance has not yet appeared, but he will. He was not there during the period we were discussing interest rates. In speeches in the House made by the financial critic for the Liberal party he called for a new budget, and a stimulative budget. I refer the minister in particular to Hansard of October 29, 1979. I think it is outrageous for the Minister of Finance to come here and pretend something which everybody knows, and that is that while the Liberals were in opposition they were calling for stimulus. They were criticizing the Conservatives for their policies, and they were criticizing them precisely because the Conservative budget focused exclusively on the deficit and did not deal with the problems of jobs, inflation and growth. That is precisely the reason given by the financial critic in his speech when he spoke in the budget debate, in which I had occasion to speak myself.
The Minister of Finance says today that the Liberal party was never in favour of lower interest rates. Where was he when members from his caucus not only in this House but also in the finance committee discussed for two months the monetary policies of governor Bouey and the policies of the minister of finance at that time? If they were not calling for lower interest rates, the minister and I were in two completely different places last fall, because that is precisely what his party was calling for. His party was criticizing the Tories because they tied interest rates directly to United States rates. If the minister were to look through Hansard or the reports of the committee, he would find that that is precisely the position the Liberal party took at that time.
Now the Liberals are in power again. That is a verdict of the people. It is not a verdict with which I was happy at all, but nevertheless it is a verdict one has to accept. I think any theory that there was some kind of conspiracy at work or that the Tory party was robbed unfairly or prevented by some nasty conspiracy from carrying out something the Canadian people wanted it to do is such a fatuous and absurd theory that it hardly deserves refutation. The fact is that those kinds of policies and that message of meanness which was associated with that budget was something which rankled the Canadian public. It stuck in people's throats, and they rejected it. That is
a hard fact. 1 know it is not easy to accept. It is not easy to accept the judgment of a people on an administration which must have been one of the most incompetent, inept, unfair and stupid administrations we have had for many years. The fact that the people rejected that administration, just as they rejected the Liberal administration in May, is not something which can be blamed on the New Democratic Party. I know that is the theory that the Leader of the Opposition would like to espouse. He would like to say that somehow the New Democratic Party-he has conjured up a genie-is somehow responsible for this terribly unfair act and that if the Conservatives had been allowed to carry on in power, everything would have been different and everything would have been all right. The theory, as I say, is so fatuous as hardly to be worthy of refutation.
However, the Liberals are back in power again. Interest rates have gone through the roof. The bank rates charged by the Bank of Canada have floated down, but I think it is important to remember that it is what the consumer and the small businessman pays that really counts. As the Minister of Finance will know, the consumer is paying for his car at over 16 per cent. The small businessman is frequently paying even more than that, depending on his credit rating, on a demand loan. That is the rate that matters to the Canadian people. It is not the treasury bill rate or even the rate that is charged by the Bank of Canada that is the effective interest rate. The effective interest rate, the one that matters and the one over which this government has no control because they have rejected the very idea that they should be investigating them, is the rate which goes to the consumer, the rate which goes to the person who is buying a house or a car. That is the rate which matters.
Tax increases are being considered in order to reduce the deficit. It is quite the contrary of stimulus, quite the contrary of the position which the Minister of Industry, Trade and Commerce (Mr. Gray) took when he was in the opposition. I am so sorry that today he is not participating in this debate because it would have been a delight to hear from the minister how he feels about the policies which are now being followed by the Liberal government. He has been notoriously silent on these issues. He promised us he would resign when the rates went up. He then found it in himself to change his mind. 1 am sure he has changed his mind on many other things too.
The minister has rejected stimulus and, if I understood him correctly today, he has rejected it again, although he now admits that the growth forecast of 0.5 per cent for 1980 is too optimistic. It is too optimistic when we know that real income is falling and fell in 1979; when we know that more and more Canadians-over one million Canadians-are out of work; when we know that sales are down, that retail sales are falling dramatically in Canada just as they are in the United States; when we know that capacity-utilization is dramatically down to 80 per cent in some industries and down to nearly 65 per cent in the construction industry; when we know that inventories are up, and we are, in short, in a recession.
June 25, 1980

There is an economic consensus which has developed, and the minister has referred to it. He finds comfort in numbers. Indeed, in the 1930s his predecessors found the same comfort in the same numbers. All the great geniuses who were in power in the 1930s were of the same mind; they had the same point of view. They went to conferences and agreed that there was nothing they could do. There is no tremendous difference now. We find there are conferences, that Margaret Thatcher agrees with the Prime Minister (Mr. Trudeau) about what economic policies should be followed and that the Prime Minister agrees with Margaret Thatcher. The minister may find some comfort in the fact that Sir Geoffrey Howe, Chancellor of the Exchequer in England, is in agreement on what the economic policies should be. He may find some comfort in that as the inflation rate in Britain goes up to 20 per cent and as unemployment reaches the highest point since 1948. That may be the recipe which the minister wants to provide for the Canadian people. But I do not think there is any comfort to the Canadian people in that consensus of economic Liberal conservatism, or Conservative liberalism, whatever one wants to call it.
That consensus has basically five elements to it. The first element, and we are applying it to Canadian conditions, is that government's borrowing-in short, budgetary deficits-is already too high and causes inflation. 1 think that that is the first assumption which I would categorize as a mythological assumption. The assumption is that the way to reduce the budgetary deficit and the borrowing is by raising taxes, which is why the minister and many of his colleagues have been referring to it in the various interviews which they give from time to time-which is the only way we have of discovering what their policy is. In fact, one can say that the minister has raised inaction and lethargy to art forms in terms of his economic statements and policy.
The second assumption is that the budgetary deficit, the borrowing problem, is the real problem and that the current account deficit is secondary to that.
The third assumption is that tight monetary and fiscal policies are the best way to fight inflation.
The fourth assumption, stated by governor Bouey a couple of weeks ago in the Senate, is that unemployment is not as serious as it used to be and is not a major problem to those people who are out of work.
The fifth assumption, which the minister stated beautifully here today, is that there is really nothing he can do and that in fact, faced with a party like this one which is preaching economic ruin and catastrophe, which would cause dramatic inflation and a decline of the western world, the Liberal policy of inaction makes perfect sense, and that is the policy which the minister has put before us.
Let me state briefly the five central myths of policy which the minister recited here today. The first is, I think, the essential one about the size of the deficit. Whether a deficit is stimulative or not depends on what is going on in the rest of the economy and, in the case of the Canadian economy, depends on what the provinces are doing. The minister said that we did not talk about the provinces.
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Well, 1 quite agree with the concern which he expressed and I nodded agreement to it when he said the federal government should be providing for its own revenues and should be concerned about its revenue base in its negotiations with the oil producing provinces. Of course, we agree with that, that is the central problem. In fact, it is one of the reasons why public ownership in the energy field is so crucial. But whether a deficit is stimulative or not at the federal level depends on what is happening at the provincial level. So it is quite artificial to refer to federal deficits of $13 billion, $14 billion or $15 billion, when we know at the same time that projected revenues in some of the provinces are such that they will be running substantial surpluses.
What is important is the net effect of all levels of government spending on the whole of the economy. I think most economists would agree that the net effect of all deficits and all borrowing by provincial, municipal and federal governments has not contributed to Canada's inflation, is not inflationary at present, and in fact all the figures indicate that aggregate demand is down.
When we talk about aggregate demand, the hon. member for St. John's West asks what we are talking about. We are talking about whether or not the individual in the street has enough money to buy a car, and we know that his real disposable income is falling and that what he is paying for the car is more. So a basic and fundamental point which has to be brought out is, what is the net effect of all borrowing and is it inflationary? I do not know of one economist whom I would respect, not necessarily one who would be a member of my party, who honestly thinks that the net effect of federal policies at the moment is inflationary. It is not inflationary. It is designed, according to the minister and according to governor Bouey, to restrict aggregate demand, to cause unemployment. That is what the word means. It means you will force people out of work.
The second myth is that a budgetary deficit is more serious than a current account deficit. It is a simple thing. The budgetary deficit or borrowing is what the Canadian government borrows, from its own citizens in most cases. The current account deficit is the deficit which we run in all our economic relations with the rest of the world. An interesting fact which is not widely known is that since 1947 Canada has spent over $48 billion in interest payments and dividends out of the country. In the last year, the deficit on interest rates and dividends was $9 billion. This is what makes us poor as a nation. It is tied up with the foreign ownership question; it is tied up with our unwillingness as a nation to borrow from ourselves in order to invest in our own country. In my view and in the view of our party, you cannot solve the current account problem without temporarily increasing the budgetary deficit.
There was an exchange the other day between my leader and the Prime Minister about the new oil projects in the west and in the east. Where is all this money going to go? The fact of the matter is that every time we allow Exxon, Mobil Oil or Shell Oil to take over these projects-and that is really what we are doing-every time we increase the price of oil and

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natural gas, we are ensuring that revenue flows out of the country. We might as well pour it right across the border. I say to the minister that if he thinks he can solve the conundrum of pricing and revenue sharing without public ownership, he is sadly mistaken, because you cannot ask the Canadian public to accept the unfairness of these dramatic increases in the price of oil and gas when they know it is going to maximize the profits of foreign, multinational corporations. That is precisely what we are being asked to do.
The third myth is that tight monetary policies are an effective way to fight inflation. We have had five years of monetarism, five years of the highest inflation we have ever had. We have had five years of monetary restraint from the Bank of Canada, and we have had five years of the worst inflation in our history. The fact is that aggregate demand can fall, and has been falling. That is why unemployment has gone so far up. We can still have inflation and we are going to have even more inflation, as the minister is telling us.
I do not know what kind of discussions took place in Venice, but I would like to have been a fly on the wall. Did they discuss the fact that for five, six or a number of years we have been following policies of very tight restraint and yet we have still had inflation? Did they discuss that in Venice? Did they try to figure that out?


An hon. Member:: They talked about oil.


Bob Rae: They referred to oil and that is a very good example, but there are others. Demand has been falling dramatically in the auto industry. They are producing 20 per cent to 30 per cent fewer cars. Has the price of cars gone down? I suggest it has not dramatically. They have occasionally offered rebates in the United States, but not in Canada. Has the pricing or market mechanism worked? I suggest it has not. The nature of our economy is changing dramatically, and the way in which we deal with it is totally inadequate.
People are walking around on that side of the House and in the Tory party with a picture in their heads which would indicate the economy is like some kind of a bazaar at which consumers and producers compete, and at which the pricing mechanism plays some kind of a role in allocating resources. The hard fact of the matter is that these decisions are made by people in powerful positions who can administer prices. Until we deal with that problem in our increasingly concentrated economy where businesses eat businesses alive, we will not solve the problem of inflation.
I would like to know how restricting supply helps to fight inflation. How does capacity-utilization at 80 per cent help fight inflation? What this means is that supply will be down and demand will be down too. I would like the minister to explain how that is going to help fight inflation. It will not have that effect, it will have the reverse effect, just as high interest rates have the reverse effect.


The Acting Speaker (Mr. Ethier):: Order please. I regret to interrupt the hon. member but his allotted time has expired. Nevertheless, he might continue if there is unanimous consent. Is it agreed?


Some hon. Members:: Agreed.


Bob Rae: I appreciate the indulgence of the House, Mr. Speaker, and 1 will take one minute more to talk about the last few points.
Unemployment is not as serious as it used to be; that is a statement made the other day in committee by governor Bouey. 1 wish governor Bouey would come into my office, and I am sure the offices of my colleagues here today, indeed the office of any member of Parliament, on a Friday night, a Saturday or a Sunday to see the tragedies and the lost hope of people who are 50 or 55 years old and cannot find work, of people coming out of university who cannot find work, and then say in all seriousness that unemployment is not as serious as it used to be. That point of view belongs to those people who have never faced or have had to face the difficult reality that unemployment is in human terms-houses lost, dreams shattered, homes divided and divorce. Send governor Bouey to Windsor and tell him to go to the people of Windsor and say unemployment is not as serious as it used to be. It is a disgrace that someone who is running the economic policies of this country has that point of view.
Finally we have the weatherman's point of view as expressed beautifully by the minister today. The weatherman's point of view is that "there is really nothing we can do; I am only the forecaster and my forecast may have been wrong. I may have been a couple of percentage points out. I am coming back and telling you I thought there would be .5 per cent growth, but I am sorry the weather maps have changed, the storms in the United States are much stronger so you better batten down your hatches."
We do not elect governments to be weathermen; we elect governments to give leadership, to show compassion and strength, to say to the Canadian people that there is something we can do about our economy because we can take control of our economy; to say to the Canadian people there is hope and there is light because there is leadership. Of all the pathos that has been expressed today, nothing has been more pathetic than the statement of the Minister of Finance that there is nothing he can do. That is a statement of intellectual bankruptcy which we in this party are not yet prepared to declare on behalf of our country and on behalf of our party.


Mr. John Evans (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, I would like to say a few words today during this debate on the motion put forward by the New Democratic Party because there are some basic fallacies in their economic reasoning, to say the least; as well, there are some basic flaws in the facts they put forward to this House today that deserve to be brought before the public eye.
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First of all 1 should like to refer to the plan put forward by the leader of the New Democratic Party for the economic prosperity and health of this country. That plan, as put forward earlier in this debate, would result in tax cuts, increased expenditures and new programs by the federal government, and finally in regulating interest rates substantially below the market level or the level that would be determined in the market place.
If I could I would like to analyse what the likely effects of this kind of program would be in this day and age and in today's economic situation. First of all with regard to the tax cuts and the increased expenditures, all objective observers- all observers-would indicate that this would lead directly to two things. First, it would lead to an increase in the rate of inflation in this country, the rate of inflation being what all surveys indicate is the number one concern of the Canadian public. Secondly, it would lead to a drop in the value of the Canadian dollar which would, in turn, lead to further pressure on the inflation rate. This would put extreme pressure on Canadian capital markets, particularly if the federal government were to go into the capital market with greater strength, borrowing additional funds.
That could be resolved in one of two ways. The Canadian government could borrow more externally in foreign countries, something about which the NDP rails continuously. That is one alternative. The second alternative is for the federal government to turn the Bank of Canada loose to print more money. This would increase the money supply and the growth rate, but would again exacerbate the rate of inflation.
At the same time as this scenario is taking place, the NDP would want us to hold interest rates below the market level. Any student of elementary economics understands what the interest rate is. The interest rate is the price charged for money loaned by individuals. It is the price paid by individuals who borrow.
The other half of the scenario the NDP do not seem to realize is that when you lower interest rates to help borrowers you also lower interest rates at the expense of savers. In this country we have an exceptionally high savings rate, somewhere in the range of 10 per cent of our disposable income. If you lower the interest rate to a point below the inflation rate, individuals will stop saving. They will slow their savings down dramatically because they know the money they save today will be worth less tomorrow, and as a result they will be able to buy less when those savings come back to them. We have a reduction in saving at the same time as we have an increase in borrowing and we wind up in the consumer markets with increased inflationary pressures.
The effect of all of this, and the effect of the NDP program, would be reduced interest rates leading to an increase in borrowing demand, at the same time as we have a reduced amount of funds savers would be willing to make available to the Canadian government and borrowers in the marketplace. In addition, the effects of increased expenditures and reduced taxes would be inflationary pressure.
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Interest rates are related to inflation. Obviously individuals wish to get a rate of return that is real-in other words, one that is higher than the rate of inflation. As inflation increases, the pressure on interest rates is upwards. If the NDP program were adopted, the government would be forced to maintain interest rates below the level the market dictates. As a result we would have a never-ending vicious cycle of either increased government borrowing to finance that additional borrowing which the private sector will not accommodate, or an increase in the money supply by the Bank of Canada. You would then have a non-ending vicious cycle which fuels inflation, and a runaway situation would result. That is what the NDP program would lead to.
The effect of that program, then, is total fiscal and monetary irresponsibility. It is the commitment of this government to restore to this country some stability to our economic system which will allow the business community, the investors, to invest and become the creators of jobs in the future, making our lives better through a more productive economy.
Clearly, the program put forward by the NDP at the beginning of this debate indicates that they do not understand, and I believe that they never have understood, the fundamental economic facts of life. The NDP makes large of the figures of deficits as percentages of GNPs of western countries. Again, the leader of the NDP was totally wrong. Throughout this debate we have heard heckling from the other side: "What about Germany and Helmut Schmidt?" We were told that Germany's deficit as a percentage of the gross national product was much higher than Canada's percentage. In fact, the situation is just the opposite.
Not only does the NDP not understand economics, but they do not even understand figures. According to the figures of the international monetary fund, Germany's deficit as a percentage of its GNP has been between 1.5 per cent and 2 per cent over the past three years. Our rate is between 4 per cent and 4.5 per cent of the GNP over the past three years. Germany's total debt as a percentage of its GNP is between 13 per cent and 15 per cent. In Canada the rate is between 21 per cent and 22 per cent of the GNP. Therefore, not only is the theory which is being put forward by the members of the NDP wrong, by their facts are wrong as well.
Again, with regard to the control of interest rates we on this side believe that the marketplace is the best arbiter of interest rates. It is the way in which interest rates are best set in this country. The best way to determine interest rates is not to have them set by bureaucratic decree. Such a situation, of course, requires strong and effective competition. The new Bank Act is before the Standing Committee on Finance, Trade and Economic Affairs right now. Within it are provisions to help stimulate competition in our financial markets, which will result in more efficient competition.
One such way the act will help stimulate competition is by allowing the entry of foreign banks into this country on a limited basis. This will provide additional access to funds for

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Canadian small and medium-sized enterprises. The NDP opposes that policy. There is also means within the act to provide for the easier entry of banks into the banking system. Once again, the NDP opposes that policy. The NDP would like to have the government take control of the banking system and run it in a bureaucratic fashion. 1 suggest that is totally wrong.
In addition, the government has promised to bring forward in the fall or during the next session a new savings, trust and loans act to allow other institutions to enter the field. This will expand the activities of these institutions and bring more competition to bear on the banks, thereby providing a more competitive market.
The government has tabled amendments which go very far toward meeting all the reasonable arguments that have been put forward with regard to the Bank Act. I will be very interested in the future committee meetings to see whether in fact, considering that the government has brought forward these amendments, there will be a change of heart on the other side of the House and whether the Bank Act will be brought forward post haste and passed without further delay.
Over the past few weeks the NDP have railed time and again against chartered banks. 1 will not apologize for the chartered banks. I would welcome from the NDP one shred of hard, objective information which indicates that they are right. They do not have that information. They rail but they do not give the evidence. They cast innuendoes and aspersions on the chartered banking system. If what they say is true, then let us see the hard evidence and the analysis.
The NDP talks about the difference between the bank rate or the discount rate in the United States and in Canada. The fact is that in the United States right now the federal reserve discount rate is 6.5 per cent and the bank prime rate is between 12 per cent and 12.5 per cent. Canada's prime rate is 10.5 per cent and our bank prime rate is between 13.25 per cent and 13.5 per cent. The spread is much lower in Canada.


The Acting Speaker (Mr. Ethier):: Order. It being 5.45 p in., it is my duty to interrupt the debate and put forthwith every question necessary to dispose of the proceedings now before the House in accordance with Standing Order 58(9).

Therefore, the question is on the amendment (Mr. Clark). All those in favour will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Ethier):: All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Ethier):: In my opinion the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Ethier):: Call in the members.


Madam Speaker:: 1 declare the amendment lost.	Campbell (Miss)	Gingras Gourd	Parent PelletierThe question is on the main motion.	Is it the pleasure of the	(South West Nova) Campbell	Gray Guay	Penner PepinHouse to adopt the said motion?	(LaSalle) Chretien	Guilbault Harquail	Peterson PinardCoilenette	Henderson	Portelance


Some hon. Members:: Agreed.	Comtois	Herbert	Prud'hommeCorbin	Hervieux-Payette	Reid


Some hon. Members:: No.


Madam Speaker:: I declare the motion lost.
It being 6.20 p.m., the House stands adjourned until tomorrow at 2 p.m. pursuant to Standing Order 2(1).
At 6.20 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, June 26, 1980