1980-11-04

ROUTINE PROCEEDINGS


Mr. Gordon Taylor (Bow River):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the authority of Standing Order 43. Whereas more than 10,000 widows of deceased veterans and some 9,000 of their children were promised pension benefits over the next six years under Bill C-40, whereas many of these widows are left below the poverty line and may not survive until 1986 or 1987 and since the care of veterans and their widows and children is a national obligation and not just another piece of social legislation, I move, seconded by the hon. member for Lethbridge-Foothills (Mr. Thacker):
That this House request the government to find the money this year to pay these widows and children their proper pension benefits.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ENERGY TAX CREDIT
Mr. Ron Stewart (Simcoe South):: Madam Speaker, i rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Because of circumstances which menace and undermine the comfort and financial security of millions of Canadians living on low and fixed incomes, in view of the fact that since this government assumed office there have been six gas and home heating oil price increases, and that the government's action has added 20 cents per gallon at my home gas pump, not 18 cents, since December last, and because there is the threat of another 70 cents increase coming up, I move, seconded by the hon. member for St. Catharines (Mr. Reid):
That the government act immediately to implement those provisions of the Crosbie budget which would bring energy tax credits-immediate softening tax relief-of $80 per adult and $30 per child which would have the effect of negating gas hikes for a family of four earning $21,380 or less annually and driving 20,000 miles per year, and also remove the tax on home heating oil which so adversely affects the 20 per cent of Canadians who can least afford it.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


HUMAN RIGHTS
Mr. Edward Broadbent (Oshawa):: Madam Speaker, I rise under the provisions of Standing Order 43 to ask for the unanimous consent of the House in order to move a motion on an urgent matter.
In view of the fact that the U.S.S.R. is committed to enforce the Helsinki agreements and taking into account the discrimination Mr. Anatoly Shcharansky is subjected to by that country and the fact that he cannot emigrate in spite of promises made by the Soviet government for more than six years, I move, seconded by the hon. member for New Westminster-Coquitlam (Miss Jewett):
That the House ask the government to appeal to the signatories to the Helsinki agreements at their next meeting in Madrid, so that Mr. Shcharansky may be allowed to join his wife.


Madam Speaker:: The House has heard the motion of the hon. member. The presentation of such a motion under Standing Order 43 requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


UNEMPLOYMENT INSURANCE
Mr. Walter McLean (Waterloo):: Madam Speaker, in light of the devastating social impact of the budget and the increas-

November 4, 1980
ing social unrest about high inflation and unemployment, including escalating child abuse, in light of the fact that this heartless budget provides no relief for those on fixed incomes, women aged 60 to 65 and single parent families and that women who earn only 58 per cent of men's wages are further discriminated against, and in light of the fact that increased unemployment insurance contributions constitute a large part of the more than $500 cost per family, I move, seconded by the hon. member for Rosedale (Mr. Crombie):
That this House reject the imposition of increased UIC premiums for women and those on fixed incomes until the Minister of Employment and Immigration, the minister responsible for the status of women, has tabled the promised UIC review.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

[ Translation)


INTERNATIONAL SOCIALIST CONVENTION
Mr. Henri Tousignant (Temiscamingue):: Madam Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43.
In view of the fact that a provincial government, namely, the PQ government, has publicly made known its intention to attend the International Socialist Convention which will be held shortly in Madrid, 1 move, seconded by the hon. member for Portneuf (Mr. Dion):
That the government censure this decision which goes against the objectives of most Quebeckers and which was made by the PQ without the consent of its members.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXCISE TAX ACT
Mr. Jack Shields (Athabasca):: Madam Speaker, whereas hospitals, orphanages, old age homes and health units in most provinces receive a blanket tax exemption under the Excise Tax Act, whereas 29 health units in Alberta are still required to pay sales tax on equipment and supplies essential to their
services and that this tax is passed on to low-income families who use health units the most, and recognizing that these units have the potential to reduce federal spending on health through early intervention, preventive measures, alternate home care and therapy programs which operate outside hospitals, I move, seconded by the hon. member for Calgary West (Mr. Hawkes):
That this House direct the Minister of National Health and Welfare to certify immediately the health units in Alberta and propose amendments to the Excise Tax Act so that health units in that province may become exempt from this discriminatory tax.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


WATER RESOURCES
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, I too rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that governments and the public have only until December 17 of this year to comment to the International Joint Commission on the controversial proposal to flood the Skagit Valley in southern British Columbia, and since the B.C. government has asked the IJC to rescind the 1942 agreement to raise the Ross dam in Washington occasioning that flooding, I move, seconded by the hon. member for New Westminster-Coquitlam (Miss Jewett):
That this House urge the Secretary of State for External Affairs to support the B.C. government's position and reassert the federal government's opposition to the flooding by communicating its views to the commission directly.


Madam Speaker:: For presentation, such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSMISSION OF ADDITIONAL ELECTRICAL POWER TO VANCOUVER ISLAND-MOTION UNDER S.O. 43
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, I rise under the provisions of Standing Order 43 and hope 1 will get the unanimous consent of the House in this matter of urgent and pressing necessity. In light of the increased cost, including taxes forecast in the budget, for both
November 4, 1980

gas and oil, even for domestic heating, contrary to the exemption of domestic heating fuels forecast in the Crosbie budget, because of the additional burden that these charges will have on those on low and fixed incomes, and in light of the offer in the energy proposal issued at the time of the budget to assist in building a gas pipeline to Vancouver Island, 1 move, seconded by the hon. member for Victoria (Mr. McKinnon):
That the government give serious consideration to transferring the offered assistance to the improvement of the transmission to Vancouver Island of additional hydroelectrically generated electrical power which, being still untaxed, would be a more economical heating source to which residents of the island could convert, to the greater benefit, furthermore, of those on low and fixed incomes.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ENERGY CONSERVATION
Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, at the Fundy-Royal Liberal meeting over the past weekend at which the Minister of Public Works (Mr. Cosgrove) was in attendance, a resolution was passed calling on the federal government to include the Atlantic region in the conversion program from oil to alternate energy sources. As the only energy source excluded from the conversion program in the Atlantic area, according to the budget documents, was electricity, I move, seconded by the hon. member for York-Sunbury (Mr. Howie):
That the minister acquiesce with his colleagues in Fundy-Royal and include electricity in the Atlantic program.


Madam Speaker:: For presentation, such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


RELIEF TO LOW INCOME CANADIANS FROM HOME HEATING OIL COSTS-MOTION UNDER S O. 43
Mr. Girve Fretz (Erie):: Madam Speaker, I rise on a matter of urgency. Given the fact that the Liberal budget brought down last week will impose a severe hardship on Canadians on low or fixed incomes who now have to pay a much more inflated price for home heating oil, I move, seconded by the hon. member for Bruce-Grey (Mr. Gurbin):
That the government set up a special account funded by deductions from the salaries of Liberal members of Parliament to supplement heating costs of those Canadians whom they have now left to freeze in the dark.


Madam Speaker:: For presentation, such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


RESEARCH AND DEVELOPMENT
Mr. Howard Crosby (Halifax West):: Madam Speaker, I rise under the provisions of Standing Order 43. The Social Science Federation of Canada rightly claims that research related to human resources is essential to ensure improved industrial production, but the government's budget provides no support for social science research. Accordingly I move, seconded by the hon. member for Fundy-Royal (Mr. Corbett):
That this House direct the Minister of Finance to remedy his failure to support social science research in order to promote improved industrial production in Canada.


Madam Speaker:: For presentation, such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENSION ACT
Hon. Stanley Knowles (Winnipeg North Centre):: Madam Speaker, under the provisions of Standing Order 43, and seconded by the hon. member for Oshawa (Mr. Broadbent), I move:
That this House urges the Acting Minister of Veterans Affairs to introduce, at this session, an amendment to the Pension Act to provide for the basic rate of the war disability pension to be set each year at the average take home pay of the five categories in the Public Service that were designated for this purpose in 1972, it being the view of this House that veterans should not have to wait several years at a time for adjustments to be made but that the increases agreed to in principle should be made automatically each year without fail.


Madam Speaker:: Presentation of such a motion for debate requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.
Oral Questions



ORAL QUESTION PERIOD

[Stage Direction]
November 4, 1980

Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is directed to the Deputy Prime Minister and Minister of Finance who will know that the Canadian Council on Social Development has concluded that the major social impact of the minister's budget will be a "significant drop in the standard of living" of millions of disadvantaged Canadians. The council concluded that many elderly people, single pensioners and widows living in their own homes will be forced by this budget to move into high-cost public and private institutions. 1 assume the government took account of this effect of its budget.
1 wonder if the minister has prepared and would table the government's estimates as to the number of elderly couples, single pensioners and widows who will be driven out of their homes by the budget?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I have had a preliminary look at the analysis provided by the council to which the hon. member has referred. 1 find in a number of instances that its estimates are clearly overstated and its conclusions distorted.


Charles Joseph Clark: Madam Speaker, the Minister of Finance indicated that he found the estimates of the council distorted, which indicates that he has some estimates of his own. My question stands, and this House would like to know what the minister's own estimates are as to the number of low-income Canadians, pensioners, widows and others who will be forced out of their homes by the budget.
Let me ask him a question relating to the impact of energy costs. Last year the Liberal party criticized our energy tax credit for not going far enough; now they discontinue it altogether. Will the minister tell the House whether he intends any new help, anything that is not in the budget, to ease the burden of energy costs upon Canadians, particularly low and middle-income Canadians?


Allan Joseph MacEachen: Madam Speaker, as I have mentioned in the House several times, earlier this year Parliament was asked to approve a very substantial increase in the guaranteed income supplement to support that particular group in our society which needed help most. That particular measure of assistance was $35 a month, which is considerably greater than the $80 a year provided by the former minister of finance who brought in a package of price increases which placed, on the average, a much higher burden on the consumers of Canada, including the groups which the right hon. gentleman mentioned.


Charles Joseph Clark: Madam Speaker, the minister seems unable or unwilling to answer questions directly. I assume his answer
indicates that the government does not plan any new help to low-income Canadians who are saddled with significant new energy costs.
Let me ask him a question about another conclusion of the Canadian Council on Social Development. The council concluded that for many low-income Canadians the budget "would be enough to tip the scale and make it more advantageous for those families to go on welfare". Why has the government decided to tax the working poor of Canada so heavily that many of them will find it advantageous to go on welfare?


Allan Joseph MacEachen: Madam Speaker, this is one of the conclusions made by the group referred to by my right hon. friend to which I take strong exception. I believe that when the budget is criticized on the grounds that it will lead to abused and neglected children, it robs considerable credibility from the source of that criticism.


SOCIAL DEVELOPMENT
Hon. David Crombie (Rosedale):: Madam Speaker, my question is for the Minister of State for Social Development. The minister will know from reading yesterday's criticism by the Canadian Council on Social Development that the budget forecast with respect to inflation, unemployment and energy costs will place a heavy reliance on income support programs, social assistance and social service programs. In light of the criticism yesterday from the council that rather than having these programs diminished they ought to be increased, what justification can the minister offer this House, indeed the Canadian public, for reductions in the very social programs they are going to need to look after the social conditions outlined in the finance minister's budget?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, the government is not considering any cutbacks in the social affairs envelope. At the beginning of the session we increased by more than $500 million our contribution to fixed income pensioners and we foresee meeting our obligations with regard to social programs in the year ahead.


David Edward Crombie: My supplementary question is addressed to the same minister. He will know that on page 33 of the budget statement the review of social programs requires that there be a reduction. I would like to ask the minister whether he can indicate to the House if there has been any consultation with either the provinces or municipalities upon whom now the cost of those social programs will fall?
November 4, 1980


Joseph Jacques Jean Chrétien: Madam Speaker, it is our intention, when the existing programs are being revised, to consult with the provinces. As you know, some of the agreements are signed for several years, but some will be up for renewal soon and before deciding our course of action as far as these programs are concerned we will consult with the provinces. Naturally, some of the programs which will expire will not be renewed, but the provinces will be informed in due course.


ACCESS TO INFORMATION
John Edward Broadbent: Madam Speaker, my question is for the Prime Minister. It concerns a subject which I have raised with him in the House in the past, and this morning in committee, concerning the government's use of polls paid for by the people of Canada. Both in the past in the House and in the committee this morning the Prime Minister has indicated his willingness to have such information provided to the opposition and to the people of Canada. Regrettably, his ministers have not acted upon this principle.
I would like to ask the Prime Minister now if he will have the Minister of Justice table surveys on energy policy, which he said in the House on October 10 were to be used by the Liberal party in formulating its energy policy, as was revealed in the budget recently.


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I cannot understand how the Leader of the New Democratic Party can say that ministers have not abided by this policy when just a few weeks ago the Minister of Justice made public the results of some 130 polls. There were some eight or ten exceptions to this, I cannot remember, but obviously the minister has abided by the policy which I stated.


John Edward Broadbent: Obviously, Madam Speaker, the Prime Minister did not hear the question. One of the dozen results which he did not provide to the House was specifically on energy policy. He said at the time this energy survey was requested that in order to be able to develop energy policy it would be made public soon. Well, the people have known for a long time that the Liberal government governs according to public opinion polls and surveys, but the issue at stake here is whether or not the people of Canada should finance them.
Since the Prime Minister has said in the past, and repeated this morning, that policy polls which have partisan implications are wrong in principle but that, specifically, one like that referred to by the Minister of Justice, which he refused to give us, ought to be made available to the public, will he now ensure that that specific poll is produced for members of the House of Commons?
Oral Questions


Pierre Elliott Trudeau: Madam Speaker, the hon. member asked that very question this morning and I dealt with it. I would ask him to refer to the statement I made this morning in his presence.


John Edward Broadbent: Madam Speaker, a final supplementary. The government has copped out on freedom of information. The Prime Minister said this morning that he would accept certain guidelines. Approximately one month ago, on behalf of my colleagues, I proposed specific guidelines, namely, that when a government department conducts a poll, the date of the poll be given, the House be informed when the results come in, and the results be made available to the opposition parties. Will the Prime Minister now accept these guidelines, instead of making big promises and using public funds for his own partisan purposes?


Pierre Elliott Trudeau: Madam Speaker, I am surprised that the hon. member talks of partisan purposes. We had this discussion this morning in a rather calm environment. Obviously, the hon. member is remaking his point, without taking into account my answers, for the purpose of getting on television.


Some hon. Members:: Oh, oh!


Mr. Nowlan:: Hit him with your purse, Ed.


Madam Speaker:: Order, please.


THE BUDGET
Hon. John C. Crosbie (St. John's West):: Madam Speaker, my question is for the Minister of Finance. The Canadian Council on Social Development, of which hon. members opposite approved highly last year when they commented on the budget, has pointed out that the various tax increases in the budget will yield an additional $14.3 billion in federal government revenue in the next three years, and that not one penny of that increased $14 billion revenue will be used to shelter low-income Canadians from the impact of rising energy costs, the cost of living and so on.
Will the minister consider introducing a refundable, income-tested energy tax credit, similar to that proposed by my party, which would benefit the lower income people of Canada? Seventy per cent of the benefits of such a tax credit would go to those families earning less than $20,000 a year and would average $220 for every family of four in this country to help them meet these increased costs. Will he consider introducing-


An hon. Member:: Question.


John Carnell Crosbie: The NDP does not like to hear this because they defeated it; they stopped it from being implemented.


Robert Alfred Corbett: Take a bow, boys.

November 4, 1980
Oral Questions


John Carnell Crosbie: They cut the throats of low-income Canadians.


John Edward Broadbent: Go on back to the seventeenth century, John.


John Carnell Crosbie: Would the minister now bring in a supplement to his budget which will benefit lower-income Canadians to the tune of $500 million this year and $1 billion next year? Will he consider such a proposal, or does he even realize the enormity of what he has done?


Allan Joseph MacEachen: Madam Speaker, I do realize the enormity of what I have done-


Mr. Nielsen:: Hideous, isn't it?


Allan Joseph MacEachen: -in providing very strong support through the social development expenditures of the Government of Canada. Over the next several years expenditures on social development and social support by the government will increase to $33 billion. Each year will record a very substantial increase, in large part attributable to our policy of indexing benefits to all recipients in Canada. In 1973-74 the expenditures on these particular programs amounted to $11 billion. Just three years down the road the expenditures will amount to $33 billion, a 300 per cent increase. That is the enormity of what has been done in this budget.


John Carnell Crosbie: Madam Speaker, the minister's malarkey will not put another cent into a household suffering from these higher costs in Canada. Would the minister introduce a program similar to the mortgage interest and property tax credit which would help 4,425,000 household in Canada? These 4,425,000 families would receive excess of $250 per year assistance beginning next year, and $2,015 million in the fiscal year 1982-83 with a tax credit, a total of $3 billion over two years if this program were introduced. Would the minister introduce this program, because householders are suffering from increased costs for heating oil, interest rates-


Madam Speaker:: Order, please.


John Carnell Crosbie: -which is up another half a per cent-


Madam Speaker:: Order.


John Carnell Crosbie: -as a result of the budget.


Madam Speaker:: Order, please.


John Carnell Crosbie: Will the minister show that he has a heart?


Allan Joseph MacEachen: Madam Speaker, I will not do as the hon. member has suggested, and I will tell him why.


Mr. Siddon:: Because you're Scrooge.


Allan Joseph MacEachen: The budget which was brought down contains price increases or pricing schedules for oil and gas. The burden on the Canadian consumer up to 1984 is $40 billion less than the budget of the hon. member. Yet he has the
nerve to get up in this House and suggest that we revert to that misguided policy that was so completely rejected by the Canadian people.


Charles Joseph Clark: We will see.


INDIAN AFFAIRS
Mr. Stan Schellenberger (Wetaskiwin):: Madam Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. Because the budget adversely affects producing Indian bands, does the minister not feel that he is breaking faith with those bands by allowing the Minister of Finance to collect the export tax regardless whether his legal opinion is in the affirmative?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: No, I do not, Madam Speaker.


Stanley Kenneth Schellenberger: Madam Speaker, my supplementary question is directed to the same minister. If he would just lean over and speak to the hon. "Chief White Owl", his seatmate and chief of a producing band, he might get some information on that.
Because Indian bands have made some long-term commitments and planned for this revenue, will the minister make representations to the Minister of Finance against collecting that tax or will he at least make a commitment to the Indian bands that this revenue will be returned, because they drastically need it?


John Carr Munro: Madam Speaker, I have talked to many Indian leaders concerning this matter and they are examining the implications of the budget themselves. They wish to meet with me in order to reveal their findings, and I have said I will indicate my position to them. They have not yet reached their conclusions so obviously the hon. member is way ahead of them.


VETERANS AFFAIRS
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam
Speaker, my question is directed to the Acting Minister of Veterans Affairs. The minister must be aware of the fact that recipients of war veterans' allowance have been particularly hard hit by the cruel and devastating budget brought down by the Minister of Finance, in contrast to measures proposed by this party which would have protected these veterans. Will the minister recommend to cabinet that the war veterans' allowance and disability pensions be increased, in view of the fact
November 4, 1980

that any benefit from the veterans affairs bill passed in July has now been wiped out?


An hon. Member:: That is wrong.


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, first of all, I take exception to the preamble of the question which suggests that our government has acted unreasonably with regard to veterans. This morning I met with the management committee of the Department of Veterans Affairs and we discussed this very question. Furthermore, we will soon be announcing a new program to help veterans. 1 also want to add that pensions were increased last year and that the budget presented by the Minister of Finance provides the means necessary to help war veterans.


A. Daniel McKenzie: Never mind defending the Simon Legree finance minister. 1 should like to ask the acting minister if the government will incorporate in the Pension Act on a permanent basis a formula to keep the basic rate of disability pension adjusted to increases in the pay scales of the five selected categories of public service workers in order to offset the harmful effects of this harsh budget?


Mr. Lamontagne:: Madam Speaker, this same question or a similar one was just asked by the hon. member for Winnipeg North Centre. I would refer this question to the management committee of veterans affairs and it will be discussed accordingly.


ENVIRONMENTAL AFFAIRS
Mr. Simon de Jong (Regina East):: Madam Speaker, my question is directed to the Minister of National Health and Welfare. It refers to the material that I sent to her office earlier today which came from the United States environmental protection agency.
In view of the recent information revealing that 99 per cent of the chronic-that is, long term-studies done by Industrial Biotest Laboratories have been found to be flawed, and considering the minister's stated objective of providing all information on possible hazards to human health, will she now make public all information regarding the flawed testing done by 1BT which causes concern about the long term safety hazards of the chemicals tested? Second, would the minister inform the House what alternative sources are available to determine the safety of these chemicals; that is, are there any back-up studies to support the continued registration of these chemicals, pesticides and herbicides?


Hon. Monique Begin (Minister of National Health and Welfare):: Madam Speaker, I think the hon. member will accept the first part of my answer. While in a meeting this
Oral Questions
morning, I received the 200-page document from him, which I have not had time to review.
To answer the second part of his question, however, I assume that its thrust is about open government or releasing or not releasing information. In answer to that question I want to assure the House that we have been and are releasing information from the United States or from our own sources as soon as it becomes available to us. I have done this publicly and I will continue to do it au fur et a mesure, according to the pace of the release to me. I also continue to have close contacts with my provincial counterparts.


Simon Leendert de Jong: A supplementary question, Madam Speaker. I welcome the minister's remarks and I hope that officials in her department will read and understand the directives that she will be giving them.
My supplementary question concerns the number of chemicals. What we have had in the past is, if anything, misinformation. The department has stated that there were 97 chemicals involved, later the number was given as 100 and later still it was given as 112. Now we have received this information from the U.S. environmental protection agency that there are over 202 chemicals involved. When will the department come clean and give the public the information they have a right to?


Monique Bégin: Madam Speaker, for a few minutes I have been searching for the name that identifies the role in which the hon. member has cast himself. It has to do with being more pure than everybody else and more knowledgeable than everybody else. That has been his role ever since his election to this House.
I repeat, all the information available has been made public. There is no intention of hiding things in the way that he suggests, as far as I know. 1 have very responsible officials working to protect the public, and that is the ultimate objective of the department.

[ Translation]


CONVERSION FROM OIL-INQUIRY AS TO DATE OF IMPLEMENTATION OF SUBSIDIES
Mr. Retni Bujold (Bonaventure-Iles-de-la-Madeleine):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources, and is meant to clarify a point concerning the program providing subsidies to those who convert their oil heating systems to gas or electricity. As that program will of course help the needy, and especially widows and veterans which our friends of the opposition mentioned, can the minister tell the House whether the eligibility to that financial assistance program applies as of the night of the budget or is it retroactive to some date prior to the tabling of the budget?

November 4, 1980
Oral Questions


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, I should like to point out that this extremely important program providing subsidies of up to $800 per family to allow the conversion of oil heating systems to gas, electricity, or even wood, went into effect when the budget was brought down, that is, on October 28 last. Eligible for those subsidies will be all those who convert their systems from October 28 on or those who, having started the conversions before October 28, received the final inspection certificate only after that date for the work performed immediately before that date. The people who are converting their systems right now, or who started the conversion immediately prior to October 28 but were not given their final inspection report before then, are therefore asked to keep their receipts in order to be able to present their claims to the government later on.


SOCIAL SECURITY
Hon. James A. McGrath (St. John's East):: Madam Speaker, my question is addressed to the Minister of National Health and Welfare. The Canadian Council on Social Development in its report yesterday, which 1 presume the minister has read, estimated that those who live at home and depend upon old age security and the guaranteed income supplement will see their living costs rise by $200 this year, which is about half the increase in the GIS that the government gave earlier this year.
Given the fact that people in this category have already fallen 22 per cent below the poverty line estimated by Statistics Canada, which is significant, what steps does the government propose to take to offset this very serious and drastic increase in the cost of living for those who have no protection other than the compassion of the minister?


Monique Bégin: Madam Speaker, upon receipt I read the document prepared by the Canadian Council on Social Development and 1 was very worried by the contents. The press releases and work of the CCSD have always been of help. Maybe the purpose of this document was to be a voice for the poor, but surely that is not the fact because I observed many important errors, and this is one of them. Of course, the cost of living will affect pensioners, especially those living on GIS. But the universal pension as well as the GIS supplementary pension are indexed fully to the cost of living every three months and these people will be protected fully against these increases.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: Madam Speaker, the minister knows that what she is saying is not in fact true; it is not in accordance
with the facts. Notwithstanding indexing to the the consumer price index, old age pensioners and people on GIS, or those who depend on GIS, have been falling further and further behind in terms of the poverty level in Canada. That is a fact and the facts speak for themselves. Now these people will fall still further behind because of the budget of the Minister of Finance; they are going to have to pay an extra $200 in heating costs, not to mention additional food costs.
My question to the minister is this: What steps does she propose to take-unless she wants to dispute the facts, which I have laid out for her and which have been laid out by the Canadian Council on Social Development-to offset the very drastic consequences on old age pensioners and people on fixed incomes of the budget brought down by the Minister of Finance? Or does she subscribe to the view of the Minister of Finance that this document put out by the Canadian Council on Social Development is without any credibility?


Monique Bégin: I will choose to discuss the facts, Madam Speaker. The facts just presented by my hon. colleague are completely wrong and misleading to the public if put that way. I hope that I am very clear in the spirit in which I use the word "misleading" and that another point of privilege will not be raised after question period. Unless we discuss the budget on facts and figures, we cannot draw these conclusions because people will panic when they watch their TV at home tonight.
What my hon. colleague says is wrong and not true. Pensioners in this country are better off than ever before and we are winning the fight against poverty for that particular group.


Some hon. Members:: Hear, hear!


Monique Bégin: Twenty per cent of Canadians were living in poverty. That figure has now dropped to 12 per cent. However, the figure is still too high but poverty is on the decline in this country under this government and it will continue to do so. There is only one item of expenditure missing to take the pensioners out of poverty. All others have been brought above the poverty line by the government.


CONVERSION FROM OIL-EXCLUSION FROM PROGRAM OF NEW BRUNSWICK HOME OWNERS
Hon. J. Robert Howie (York-Sunbury):: Madam Speaker, my question is for the Minister of Finance. Will the minister tell the House why the budget discriminates against New Brunswick home owners by denying them the right to participate in the $800 grant program to assist in switching from oil to electricity as an alternate fuel for home heating? Is the minister not aware that 70 per cent of New Brunswick's electric energy is now generated from hydro and coal plants and that in addition a nuclear fired plant is scheduled to come on line within a year? Could the minister not answer the question?
November 4, 1980


Marc Lalonde: Yes, Madam Speaker, I will answer it with great pleasure.


An hon. Member:: The fellow who wrote the budget is answering.


Marc Lalonde: As the national energy program has indicated, and as the-


Charles Joseph Clark: Who speaks for Atlantic Canada?


Marc Lalonde: 1 hope the Leader of the Opposition will calm himself so we can proceed.


Some hon. Members:: Oh, oh!


Mr. Stevens:: Poor Marc!


Charles Joseph Clark: Poor old Marc!


Marc Lalonde: The national energy program provides grants for conversion from fuel oil heating to other forms of heating. We have announced that we are going to proceed with the gas pipeline to the maritimes. We have also indicated that the conversion grants for electricity will be delayed until arrangements have been made to ensure we are not using fuel oil in the maritimes to produce electricity, because that would encourage double wasting of scarce oil. In that sense the government's decision is the right one. We have indicated that as soon as the conversion from oil to produce electricity takes place, we will proceed with the grants.
At the present time we are having discussions with the government of New Brunswick. The situation will be examined province by province. As soon as there is enough indication that conversions are taking place, we will consider conversion to electricity also. Obviously, gas and wood are still the best buy for citizens of New Brunswick in terms of the conservation of energy.


J. Robert Howie: Madam Speaker, the minister is obviously not aware that in New Brunswick already 70 per cent of the electrical plants are fired other than by oil.


ALLEVIATION OF IMPACT OF RISING ENERGY COSTS
J. Robert Howie: My supplementary question is addressed to the Minister of Finance, or to whomever he wants to designate to answer it, Madam Speaker. In the absence of energy tax rebates for lower-income Canadians, which were provided in the Crosbie budget, will the minister reflect on additional means to alleviate the devastating impact high and rising energy costs have on lower-income people in the Atlantic provinces, and tell us what, if anything, he is going to do about it, other than amending the guaranteed income supplement and indexing social programs which the minister alluded to a few moments ago?


Allan Joseph MacEachen: Madam Speaker, I want to tell the hon.
Oral Questions
member that last weekend I travelled in the Atlantic provinces and quite a number of citizens congratulated the government for not imposing upon them the heavy burdens which were imposed by his colleague.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Name one.


An hon. Member:: That is what Gerry Regan said.


Allan Joseph MacEachen: I am very surprised the hon. member would complain about a program which is much lighter and more generous than the one he supported so strongly last December when he was a member of the former government.


UNEMPLOYMENT INSURANCE
Mr. Jim Hawkes (Calgary West):: Madam Speaker, my question is for the Minister of Employment and Immigration. The minister is from the west and he may or may not be aware of the fact that by yesterday there was an industry-wide hiring freeze within the oil industry. Today the oil industry is examining planned projects with a view to cancellation of better than half of them. That will be followed by lay-offs within the industry and with suppliers. Our estimate is that 3 per cent of the potential GNP was lost by the budget. That translates into 300,000 lost jobs in the coming year. Can the minister assure the House that his 33 per cent rise in premiums for unemployment insurance will cover the cost required to provide income support to the 1,300,000 Canadians who will be unemployed a year from now?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, I regret very much, as does the hon. member, that some of those projects have been frozen because of the very drastic action taken by the Premier of Alberta.


Some hon. Members:: Oh, oh!


Lloyd Axworthy: It is certainly our hope that the climate of compromise in negotiation, which we are trying to establish, will encourage the premier to reintroduce many of those projects.


Some hon. Members:: Oh, oh!


Lloyd Axworthy: Under those circumstances I would want to assure-


Charles Joseph Clark: You are sounding hysterical, Lloyd.


Lloyd Axworthy: -members of the House that the figures used by the hon. member are as exaggerated as the statements he usually makes in this House.

November 4, 1980
Oral Questions


Frederick James (Jim) Hawkes: Madam Speaker, it is a shame when income support for people who have families is treated in such a cavalier fashion by the minister. A power struggle is not worth it, sir.
May I bring hon. members' attention to a recent study prepared by Dr. Brenner of Johns Hopkins University which indicates that a 1 per cent rise in unemployment is accompanied by a 1.9 per cent rise in the death rate, a 5.7 per cent increase in homicides, a 4.1 per cent increase in suicides, plus significant increases in child mortality and first admissions to mental hospitals and prisons.
In the light of a budget dedicated to increasing employment by somewhere near a half million people, can we have the minister's assurance that he will use his good offices with the Minister of Finance to make sure that spending in the social envelope goes up, and not down, as promised by the minister on page 13 of his budget address.


Lloyd Axworthy: Madam Speaker, when you have unemployment, it is never very happy for the people who experience it. That is one reason why we reintroduced the direct employment program which the hon. member's government cancelled last year, which has the highest impact.


Some hon. Members:: Hear, hear!


Lloyd Axworthy: That is why we have substantial amounts of money for those programs. It is also why the Minister of Finance in his generosity added S350 million to additional manpower training mobility and industrial adjustment programs so that we can help those areas which are experiencing some degree of industrial disruption.


SOCIAL DEVELOPMENT
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, my question is addressed to the Minister of National Health and Welfare. In view of the fact that in the second last paragraph of page 13 of the budget, for those who want to look at it, the Minister of Finance states that he expects significant savings out of the upcoming renewal of federal-provincial funding arrangements for health and social development, can the minister tell us whether or not she approves of this goal and, if she does, how she reconciles this goal with the recommendation, among others, of the Hall report that more federal money should be available, not less, particularly to the poorer provinces, for cost-sharing of important health services that are not yet available to many Canadians in what is supposed to be a national health care plan. Can the minister tell us where she expects the savings to come from?


Monique Bégin: Madam Speaker, I expect the savings to come as a result of discussions with those provinces which presently have a surplus in order to benefit the very social programs the hon. member tries to suggest we are cutting, but are not. He talked of medicare and touched on the CAP program of welfare and social services. These programs are targeted toward those in need. That is our purpose. We are committed to that, and I am not nervous about any allegations the hon. member wants to make.


William Alexander (Bill) Blaikie: It would be nice if we got an answer sometimes instead of a lecture about the righteousness of the Minister of National Health and Welfare. On the same page of the budget it says that the federal government expects a clearer division of federal-provincial responsibilities in the social development area. My question to the minister is this. Does this mean that the government is planning not only to emulate the provinces that they have been so critical of lately by using this crucial area as an avenue of restraint, but at the same time plans to hand over further responsibility to the provinces by moving to block funding in social services as well as health care? What is the intention of the government?


Monique Bégin: My answer to the last part of the hon. member's question is that we do not intend to do that. We do not intend to go to block funding on social services. If the hon. member will clarify what else he wants to know, I will answer with pleasure.


THE BUDGET
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, having listened to the answers of the Minister of Finance earlier today, I would like to address his attention to a specific group of Canadians. There are some 78,000 single and widowed women in Canada between the ages of 60 and 65 who have to get by on less than $4,200 a year, less than $350 a month. They now face in the vicinity of $160 additional pay-outs for home heating fuel because of the energy taxes in the budget. Is the minister providing any relief whatsoever for this specific group of Canadian women who do not have access to the old age pension or the guaranteed income supplement and who probably are the group hardest hit by the minister's energy tax?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, it might be easier for the government to respond to these needs if the hon. member's colleagues did not take such a hard line in the course of debate and denounce the government for increased spending and for its failure to reduce the deficit further. In the present difficult circumstances, we have produced a budget which has attempt-
November 4, 1980

ed to reconcile a number of different objectives, including reducing the burden on consumers, which includes the group which the hon. member mentions. That burden has been reduced considerably in comparison with the punitive budget which she did not support last December.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: My supplementary is to the Minister of Finance, whose only reconciliation in the budget is to reconcile this group that I mentioned to continuing poverty. That is all he is doing. Has he given any consideration whatsoever to this particular group of people who simply do not know how they are going to get through the winter? Because of their age, they do not have the opportunity to get jobs or to earn additional income. They do not know how they are going to find an additional $160 for home heating fuel. Has the minister given any thought whatsoever to their plight, or is it that nobody over there cares at all?


Allan Joseph MacEachen: Of course, Madam Speaker, we have given consideration to that group. We have not waited for the hon. member's interest in order to give attention to that group because we have engaged in programs with the provinces to assist all Canadians who are in need, in addition to the universal programs administered by the Minister of National Health and Welfare. If there are additional requirements for any particular group, there is a mechanism in place. We will do our part in co-operation with provincial governments, which have to take the initiative in the first instance. If the hon. member is concerned, she might join with the rest of us in asking various provinces to take a more accommodating attitude toward these particular groups.


CONVERSION FROM OIL-APPLICATION OF PROGRAM TO NEW BRUNSWICK
Mr. Maurice A. Dionne (Northumberland-Miramichi):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. The energy policy tabled in this House states that the conversion program for homes and businesses will be tailored to the priorities and objectives of the provincial governments. Is that the case with the application of the conversion program to the province of New Brunswick? Will it apply to the conversion from oil-


Erik Nielsen: You are a little late with that one.


Mr. Paproski:: It has already been asked.


Maurice Adrian Dionne: -conversion from oil to such fuels as wood, coal and natural gas where it is available? Is the minister's department looking into the possibility of the use of peat as a fuel?
Oral Questions


Marc Lalonde: Yes, Madam Speaker, I believe we have made reference to peat as a source of fuel. I know there is a considerable quantity of it available in New Brunswick. The conversion program is available to the citizens of New Brunswick. We are embarking upon discussions with the province as to the best way of administering the program. I will have more to say later about the specific aspects of it as far as New Brunswick is concerned, but the citizens of New Brunswick can avail themselves of this program.


CANADIAN ARMED FORCES
Hon. Allan B. McKinnon (Victoria):: Madam Speaker, my question is for the Minister of National Defence. The Minister of Finance has by his increase in gasoline and heating fuel costs added about $500 to $600 to the annual cost of living for low and medium-income families. On top of this the Minister of National Defence has this week raised the rent for services married quarters, for those in Ottawa $50 per month for corporals and $35 per month for privates. For the first time rents are being raised with no accompanying pay raise. What is the minister going to do about this terrible situation?
[ Translation]


J. Gilles Lamontagne: Madam Speaker, there is no terrible situation. I saw the study that was made concerning rent increases in the armed forces. I also asked that, considering the rent increase of November last, there be no other increase before a task force had looked into the problem and reported to me. No member of the armed forces pays more than 25 per cent of his income in rent, in addition to which, the lower the salary of a member of the armed forces, the lower his rent increase is. I feel that so far this has been fair. Future increases will be watched more closely after the task force has handed in its report.


Allan Bruce McKinnon: Madam Speaker, the two ministers now require, for instance, a corporal stationed in Ottawa to spend more than $1,000 more on transportation and shelter costs this year than he did last year. The minister has it within his authority to stop the heavy rent increase. In the case of a corporal this rent increase is 22 per cent. That is compared with ceiling imposed by the Ontario rent control commission of 6 per cent per annum. This is the second rent increase this year. The last one was in April. Is the minister going to sit there and do nothing while good men are leaving the services for this very reason?


Maurice Lamontagne: Madam Speaker, I think the information of the hon. member is definitely wrong. I would like to know how many left the service because of high rent.

November 4, 1980
Privilege-Mr. de Jong


Some hon. Members:: Answer the question.


Maurice Lamontagne: As far as what we are going to do about it, it is not a question of doing nothing. 1 just mentioned to the hon. member that a special group is looking into this, and I am aware of discrepancies. 1 even went to Calgary to meet a group of wives who had grievances about their rent. They understood the good sense of our position, and they said they would accept this one and would see what happens in the future. As 1 said, we have a group working on this, and we will try to provide justice for all in the armed forces.


PRIVILEGE
[Stage Direction]
MR. de JONG-STATEMENT MADE BY MISS BEGIN DURING QUESTION PERIOD
Simon Leendert de Jong: Madam Speaker, I rise on a question of personal privilege as a result of the answer I received from the Minister of National Health and Welfare (Miss Begin) earlier in the question period. The minister suggested that I had sent her a document of some 200 pages. It was actually only 75 pages.
However, more important is the type of motive the minister imputed in suggesting to me that I really had no right to raise this matter at all. I suppose the suggestion was that 1 was a knight in shining armour trying to create undue publicity and fear among the Canadian people. I resent the imputation of such a motive to me. Various groups in this country, various provincial governments, various news media and various environmental groups have been trying to get answers to the types of questions I have been posing to the minister throughout this year. I believe it was in 1978 that the hon. member for Yorkton-Melville (Mr. Nystrom) tried to raise some of these questions with the Department of Agriculture.
As early as March of this year the Saskatchewan government tried to ask exactly the same type of question I have been asking the minister. A reply was not received until June 23 of this year. It took several months for that reply. The reply received is now shown to have been incomplete. In fact, throughout the summer more and more chemicals have been added to the list. I was asking the minister to supply the information to the public and to the House. There was no motive other than a public disclosure of some very important information. 1 therefore ask that the minister be asked to stop forthwith imputing these types of motives to my questions.
[ Translation]


Monique Bégin: I do not know whether there is ground for a question of privilege, Madam Speaker. The hon. member feels morally indignant about a given situation. Since he has been sitting in this House, since we came back to power after the election, he has been putting equivocal questions which do not allow me to give definite answers, once and for all. I repeat that the net result of such a series of questions is to create suspicion in the
public mind, to imply reasons for concern which do not exist, all under the cover of information I would be keeping from the public. Such a situation is not true and does not exist. I cannot let it go unchallenged. If there is any ground for a question of privilege, I leave it up to you to sort it out.


Madam Speaker:: I am indeed under the impression that under the cover of this question of privilege it is the debate between the minister and the hon. member that has been reopened. The hon. member is not happy with the answer the minister gave him. That is his right. If he is still not satisfied, he can again put the question to the minister some other day in terms that will please him most and that will allow him best to express himself. The minister does not appreciate the kind of questions that are put to her but that is also her right. So it is plain that on both sides it is simply a debate that is getting under way, and unfortunately I cannot consider this matter as a question of privilege.


MR. DIONNE (NORTHUMBERLAND-MIRAMICHI)-FAILURE TO PROVIDE INTERPRETERS FOR COMMITTEE MEETINGS
Maurice Adrian Dionne: Madam Speaker, under the provisions of Standing Order 17(2) I rise on a question of privilege of which I have given the required notice.
This morning, during proceedings in the Standing Committee on Transport in room 307 of the West Block, it was discovered that interpreters did not come to our meeting as we had a right to expect they would. We realize that there are labour-management problems involving government translators, but sufficient positions have been designated to serve Parliament.
As standing committees are an integral part of Parliament, we find this situation intolerable. What is even more intolerable is that neither I, as chairman of the committee, nor the clerk of our committee was notified that interpreters were not available. I understand that this has happened with regard to other committees as well.
Upon the discovery that our proceedings were not being interpreted, our clerk, upon my instructions, contacted the interpretation service, only to be told that no interpreters were available.
This situation is a direct violation of the Standing Orders of the House of Commons and of the Official Languages Act. As chairman of the committee 1 speak on behalf of the members of the committee in expressing the view that our privileges as members have been breached, not only by the absence of interpreters but also by the failure of the interpretation service to give us notice of their inability to fulfil their responsibility.
Madam Speaker, if you find there are sufficient grounds to show a breach of privilege, I would move, seconded by the hon. member for Vegreville (Mr. Mazankowski):
Thai this matter be referred to the Standing Committee on Privileges and Elections.
November 4, 1980


Madam Speaker:: The hon. member is bringing to light a situation which I knew existed. The hon. member says that there is a sufficient number of translators who have been designated for the Elouse of Commons in situations such as the one which has arisen. Obviously, the number is not sufficient because we are having difficulty at the present time with regard to the number of interpreters required. 1 think there is a sufficient number of translators but not enough interpreters to allow us to have interpretation at all of the committee meetings.
If this situation continues, there certainly will be a serious problem because the main estimates have to be studied and brought back to the House in a very short time. I suppose that will have to be done in some way or another. On the other hand, some hon. members object, and rightly so in some cases, to sitting when there are not sufficient interpretation services at those committees.
I do not think this is a question of privilege. There is very little I can do in the present situation except to offer to discuss the matter with the leaders of the parties in the House, to see whether there is anything we can do in order to alleviate the situation. I do not see what else I can offer in this circumstance. I know it is difficult for committees to meet without interpretation services, but we have a strike situation on our hands, and I personally cannot intervene in any way to deal with that situation. However, perhaps we could get together to discuss this matter and to see whether we can devise something which might alleviate the situation.


Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, I listened to what you said. We have a problem which seems to be a continuing one. I know Your Honour cannot intervene, in the sense one might use that word. But the strike, as you know, has been going on for a period of time. The translators have been without a contract for a long period of time. 1 understand that discussions are still going ahead now, that discussions were renewed.
1 do not think there would be any objection if, in anticipation of a meeting of House leaders, you would have a word with the President of the Treasury Board (Mr. Johnston), under whose jurisdiction the negotiation of this matter falls, to see how that negotiation is proceeding. I think that would be quite appropriate and I am sure there would be agreement of the House to it, because the disposition in the House is that the Standing Orders must be observed, privilege or not. If you did that, I think there would be support. As for the meeting itself, there would certainly be agreement to meet.
It is becoming a very difficult problem for committees. Indeed, the constitutional committee is to meet fairly soon, I assume, and the same thing will apply there. Estimates will be coming forward, and the same thing will apply there. I think we will have a hopeless pile-up if something is not done. So, if you feel you would like to speak to the President of the Treasury Board directly in anticipation of a meeting, I just want you to know that this will be perfectly agreeable to us.
Introduction of Bills


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, it might be a good idea for you to discuss this matter with the House leaders. It might also be an excellent idea, should you feel it is necessary to use free lance interpreters, to talk the matter over with the members of the Internal Economy Commission. I am sure that they would prove to be very openminded on this matter.


Madam Speaker:: Since it is the wish of the House, I could take up the suggestion made by the hon. member for Nepean-Carleton (Mr. Baker) and see if there is any possibility of some progress being achieved in the ongoing negotiations or ?t least see what progress has been made and if there is hope for a settlement in the near future. In any event, I will very shortly call a meeting of House leaders so that we can discuss the means at our disposal to solve this problem.
\ English]


Mr. Jesse P. Flis (Parkdale-High Park):: Madam Speaker, on the same point on which you ruled there was not point of privilege, I wonder if you could make a ruling on whether the meetings which are taking place without translators or interpreters are legal, or whether they contravene the Official Languages Act, because the same problem was experienced by the Special Committee on the National Trading Corporation. We had two interpretations of the law. One was that it was not legal to hold such meetings without translators, and the other was that it was legal. Under the circumstances I wonder if you would bring a ruling to the House as to whether or not such committee meetings are legal.


Madam Speaker:: I certainly cannot determine whether or not they are legal. I know what our Standing Orders say, and 1 can tell the hon. member that I cannot bring in a new ruling or a new Standing Order because of these particular circumstances. I am in the hands of the House. If the House wishes to determine something that can be done, it might be achieved. However, I will meet with the House leaders of the parties. I think that is the better way to proceed in order to solve the matter.



ROUTINE PROCEEDINGS


[Stage Direction]
MEASURE TO PROVIDE FOR CONSUMER ACCESS TO CREDIT RATING REPORTS [DOT]
Hon. John M. Reid (Kenora-Rainy River) moved: for leave to introduce Bill C-619, respecting disclosure of credit rating records.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
[Stage Direction]
November 4, 1980
Order Paper Questions
John Mercer Reid: Madam Speaker, this bill will permit individuals who have been investigated by consumer reporting agencies to have access to those reports. In addition, it also imposes limitations on the circumstances under which those reports could be made available to clients.


Madam Speaker:: The hon. member knows, of course, that he should have risen earlier to give his brief explanation, but I will allow that.
When shall this bill be read a second time? At the next sitting of the House?


Some hon. Members:: Agreed.


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. 222, 874, 1,207, 1,326 and 1,507.
I ask, Madam Speaker, that the remaining questions be allowed to stand.


Mr. Herbert: Has the government of Quebec disputed the population estimates of Statistics Canada and, if so, what effect could such a difference of opinion have on equalization payments for the province?


Hon. Pierre Bussieres (Minister of State, Finance):: The
Quebec government has made representations concerning use by the Department of Finance of official Statistics Canada population data for purposes of calculating provincial entitlements to fiscal equalization. The Statistics Canada population data used in calculating equalization are the June 1 census count for each province in a census year, and the most recent official estimates of provincial population as of June 1 for each year that is not a census year.
The government of Quebec has requested the Department of Finance to calculate equalization, commencing with the 198081 fiscal year, on a basis that would take account of the number of persons missed in the 1981 census. In every census, there are always people who are not enumerated. Statistics Canada has undertaken special surveys following recent censuses to estimate the number of persons missed. The survey made following the 1976 census was done on a province-byprovince basis. It indicated that the number of persons missed relative to the number counted was high in the province of Quebec. A similar survey will be made following the 1981 census.
Quebec has made representations that the population figures used in calculating equalization for 1981-82 should be based upon the official census count as of June 1, 1981, adjusted upward for each province to take account of the estimate of persons missed. They have also requested that comparable adjustments be made for years other than census years, commencing with 1980-81.
The effect on equalization of adjusting official population data for the number of persons missed in a census would be to increase entitlements in eligible provinces where the number of persons missed relative to the number of persons counted is high, and to reduce entitlements in eligible provinces where the number of persons missed relative to the number of persons counted is low. It is not possible to quantify such differences with respect to the 1981 census until the count has been tabulated, and the estimate of persons missed derived from the special survey that will follow that census. The results will not likely become available before October, 1982. Until that time, it will not be known whether Quebec would gain or lose, or by how much, from the methodology they have suggested.


Mr. McKenzie: 1.	Did the honourable member for Saint-Maurice, when he was minister of Indian affairs and northern development, receive Eskimo carvings as gifts and, if so (a) what is their commercial dollar value (b) how many did he receive (c) on what dates did he receive the carvings?
2.	Did he receive other gifts since he entered the cabinet and, if so (a) what were they (b) what is their commercial dollar value (c) how many?
3.	Did he inform the Prime Minister when he received (a) the Eskimo carvings (b) other gifts since he entered cabinet and, if so, in each case, on what dates?
4.	(a) What are the guidelines governing the receipt of gifts by ministers of the Crown (b) do they require that such gifts must be reported to the prime minister?


Joseph Jacques Jean Chrétien: 1.	(a), (b) and (c):
During his six years as minister of Indian affairs and northern development, the member for Saint-Maurice received nine Eskimo carvings as gifts; they were presented to him in public and the minister never asked his hosts their commercial value.
2.	(a), (b) and (c):
The minister has not received any souvenirs since being sworn in as Minister of Justice.
3.	(a) and (b):
The minister has followed the Prime Minister's guidelines in all circumstances.
4.	(a) The conflict of interest guidelines for ministers, in
effect since April 28, 1980, require that ministers shall disclose in the public registry maintained by the assistant deputy registrar general "... any personal gift or other benefit or a value exceeding two hundred dollars which they receive from any person not connected with them by blood relationship, mar-
November 4, 1980

riage or adoption, together with the name and address of the donor". Official gifts received from other governments are not subject to this rule.
(b)	The conflict of interest guidelines for ministers, in effect since April 28, 1980, require that "all gifts or benefits exceeding two hundred dollars in value, other than official gifts or benefits, are to be declared to the ADRG within 30 days of their receipt for disclosure in the public registry". The assistant deputy registrar general administers the guidelines on behalf of the Prime Minister.


Mr. Cossitt: 1.	How many temporary or casual employees were employed by the Crown Assets Disposal Corporation in each of the past five years including persons from employment supply agencies and persons under contract?
2.	What was the percentage turnover of such persons?
3.	What are the names of the employment agencies and the amount of funds they received?
4.	What is a list of any persons who worked under contract and the dates involved?


Hon.   J.-J. Blais@Minister of Supply and Services: I am
informed by Crown Assets Disposal Corporation as follows:
1.	The corporation does not keep records in a manner which would permit the production of such information without considerable expenditure from personnel resources. However, for the purpose of this question, the corporation has surveyed fiscal years 1978/79 and 1979/80
(a)	1978/79: 90 temporary and casual employees
(equivalent in person-years to 3.5)
(b)	1979/80: 190 temporary and casual employees
(equivalent in person-years to 4.3)
2.	Not applicable. The objective of hiring temporary or casual employees is to fill temporary staffing needs only (e.g. maternity leave, retail store operations, etc.)
3.	The corporation does not keep records in a manner which would permit the production of such information without considerable expenditure from personnel resources. However, for the purpose of this question, the corporation has surveyed fiscal years 1978/79 and 1979/80.
Funds received*
Names of the employment agencies	1978/79	1979/80Canada Employment Centres	no agency fees	no agency feesBarbara's Office Personnel Ltd.	nil	$19,467The Job Farm	$ 8,548	17,270Bradson Personnel Pool	nil	3,047Pollack Personnel	2,243	9,859The 500 Selection Services	6,060	12,277Select Personnel	nil	1,118Harrington	1,828	1,555Quantum Management Services Ltd.	nil	3,028Fairbairn Executive Services Ltd.	nil	2,548H.V. Chapman & Associates	7,362	nilMayfair Personnel	5,622	nilMiss Stacey Temporary Office Services	2,376	nil
Order Paper Questions
Personnel Pool	140	nilManpower Temporary Services	539	nilAction Personnel of Ottawa/Hull	573	nilKelly Girl Service of Canada Ltd.	1,317	nilVictor Temporary Services	884	nilStaff Plus	545	nilSelective Temporary Services	3,791	nilPrice Waterhouse & Co.	20,400	nil$62,228	$70,169
These funds represent total cost for salaries and employee benefits for payment of days of work as well as the agencies' fees.
4. 1975/76 - nil 1976/77 - nil 1977/78 - nil
1978/79- C. Dick C. Adams
Oct. 78/Jan. 79 Oct. 78/Mar. 79
1979/80 - J. Squire J. Gongos D. Meredith C. Adams
Dec. 79/Nov. 80 Mar. 80/Sept. 80 Jan. 80 to date Apr. 79/Sept. 79 Oct. 79/Mar. 80 Apr. 80 to date


Mr. Friesen: Did CFDC charter the yacht "Don Juan" at the Cannes Film Festival in 1980 and, if so (a) on what authority and for what reason (b) who was invited on board the vessel and for what reason (c) what was the total cost of chartering the vessel (d) what other costs were involved?


Mr. Peter Stollery (Parliamentary Secretary to Secretary of State and Minister of Communications):: I am informed by the Canadian Film Development Corporation as follows: The Canadian Film Development Corporation did charter the yacht "Don Juan" at a cost of $500 per day, for two half-days.
(a)	With the authorization of Canadian Film Development Corporation administration, 25 foreign journalists and 55 Canadian journalists were invited with a view to publicizing Canadian films.
(b)	See (a).
(c)	$500.
(d)	$4,400 for food and drink.


Mr. Flis: 1.	To the knowledge of the government, what is the ethnic breakdown of the top ten ethno-cultural groups in the Soviet Union in terms of population?
2.	What is the number of total immigrants who have left the U.S.S.R. during the past five years and what ethno-cultural groups did they come from?


David Michael Collenette: I am informed by Statistics
4410

November 4, 1980
The Budget-Mr. Stevens
Canada and the Canada Employment and Immigration Commission as follows: Statistics Canada reports:
1.	According to the most recent information published by the statistical office of the United Nations, the population in the top ten classes of "ethnic nationality" in the Soviet Union, as of January 15, 1970, was as follows:
Ethnic Nationality
1.	Russian
2.	Ukrainian
3.	Uzbek
4.	Byelorussian
5.	Tatar
6.	Kazakh
7.	Azerbaijani
8.	Armenian
9.	Georgian
10.	Moldavian
2. Statistics Canada and Immigration Commission have
Population
129,015,140
40,753,246
9,195,093
9,051,755
5,930,670
5,298,818
4,379,937
3,559,151
3,245,300
2,697,994
Canada Employment and information on this subject.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Madam Speaker:: I am sorry, but the first member who rose after orders of the day were announced was the hon. member for York-Peel.


Some hon. Members:: Hear, hear!


Madam Speaker:: I have no other knowledge that the hon. member for Hamilton Mountain (Mr. Deans) was to speak at this time, and the member who rose first was the hon. member for York-Peel.


Mr. Deans:: Madam Speaker, I rise on a point of order. Surely it is not necessary for me to rise in advance of the order being called, in order to be recognized. I rose simultaneously with the hon. member for York-Peel (Mr. Stevens) but, because he stands in front of me, it was impossible for you to see through him.


Some hon. Members:: Oh, oh!


Ian Deans: The understanding was perfectly clear, and it shows a bias which is quite unnecessary.


Some hon. Members:: Shame!


Madam Speaker:: There is no understanding of which I am aware. I am awfully sorry if the hon. member feels that he was rising at the same time as the other hon. member. However, I was looking in that direction and it was quite clear to me that the hon. member for York-Peel rose first. It is my responsibility to recognize hon. members in the order in which they rise. Therefore, I am afraid I have no other choice but to recognize the hon. member for York-Peel. The only thing that stopped me was when the hon. member for Winnipeg North Centre (Mr. Knowles) rose and I realized he was rising on a point of order. I had no idea what it was about. So I have to recognize the hon. member for York-Peel.


FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
[Stage Direction]
The House resumed, from Monday, November 3, 1980, consideration of the motion of Mr. MacEachen that this House approves in general the budgetary policy of the government, and the amendment thereto of Mr. Crosbie (p. 4231), and the amendment to the amendment of Mr. Rae (p. 4235).
Madam Speaker:: Is the hon. member for York-Peel (Mr. Stevens) rising on a point of order?


Sinclair McKnight Stevens: No, Madam Speaker, I am rising to speak in this debate.


Stanley Howard Knowles: Madam Speaker, I rise on a point of order. It is not a world-shaking point, but it was completely understood that the next speaker was to be the hon. member for Hamilton Mountain (Mr. Deans). That was the understanding last night, and I understood from the people up front this afternoon that he would be called first.


Some hon. Members:: No.


An hon. Member:: Tough bananas.


Stanley Howard Knowles: Madam Speaker, I rise on a point of order again. It is not my wish to spin it out and to make a big issue of it, but it so happens that I myself went up early this afternoon and consulted with one of the deputy occupants of the chair and was told that Your Honour would call first on the hon. member for Hamilton Mountain. Later, our whip, the hon. member for Yorkton-Melville (Mr. Nystrom), went up and got the same message. Both of us informed the hon. member for Hamilton Mountain that Your Honour would be calling him. I recite that so that you know why I said there was an understanding.


Walter David Baker: Madam Speaker, on the same point of order, may I point out that in the exchange which took place involving the hon. member for Hamilton Mountain (Mr. Deans)-you might want to examine the "blues" with respect to that-


Ian Deans: Please do.


Walter David Baker: -1 think the hon. member for Hamilton Mountain indicated quite clearly that the Chair was biased. I think that is unparliamentary, and upon exami-
November 4, 1980

nation of the "blues" I think it should be dealt with. That is the kind of thing which should not be allowed to pass in this chamber, especially when it comes from someone who has had a tremendous amount of experience in another chamber. He should know better, and you should not allow it to stand.


Some hon. Members:: Shameful.


Madam Speaker:: I repeat that I had no knowledge of an agreement having been reached between the whips of the different parties as to whom was supposed to be speaking first after we announced orders of the day. If by some means this agreement was transmitted to someone occupying the chair when I was not here, I can assure the hon. member that it was not transmitted to me. Therefore I have tried to be fair in recognizing the hon. member for York-Peel (Mr. Stevens), just following the normal usage of this House of the first member who rises being recognized.
As for the language which the hon. member for Hamilton Mountain (Mr. Deans) allegedly used with respect to the Chair, I did not hear it. I am willing to look at the "blues", but some of these things are often said in the excitement of the moment, and I am sure the hon. member did not mean any disrespect to the Chair, if he in fact said that.


Walter David Baker: He should withdraw.


Sinclair McKnight Stevens: Madam Speaker, after the hon. member for Hamilton Mountain (Mr. Deans) has heard my remarks, it may well be that he will feel that all which needs to be said has been said with respect to the budget, and it will not be necessary for him to take up his ten or 20 minutes in the debate.
Just prior to orders of the day being called, the Minister of Finance (Mr. MacEachen) was over here. I asked him what he felt I should say about his budget, and he said, "Sine, say something nice". Frankly I have thought hard and long since he made that comment to think of something nice about the budget, and I think the House will understand when I say I cannot think of anything. If he had stayed a little longer with me, perhaps he could have made some suggestions.
As Hugh Anderson of The Globe and Mail said last weekend, the truth is that this budget may be a clever one but it is an exercise in the politics of wilful deceit. 1 say that because I feel the budget is not only deceitful, in its method of presentation, but I believe it is deceitful in that it is only half a budget. I suggest that perhaps this is the most significant matter which is being forgotten by members of the House and the public at large. We have heard only half the story from the Minister of Finance. In effect he presented what he feels, up to this stage, he can get away with, namely, an expenditure plan, an energy policy, the appearance that somehow taxes will not go up, and that is it.
Let me assure the House that the second boot will fall. It may take the form of another financial statement, it may take the form of some new budget, but the fact is that the figures
The Budget-Mr. Stevens
put before us if analysed, indicate only one thing, that a responsible government in this country cannot continue to allow the expenditure and revenue levels to continue as projected in the budget without the inevitable happening, that is, rampant inflation, rising interest rates, low productivity in industry, in short, utter chaos.
I say this in all sincerity. On behalf of Canada I ask, particularly those on the far left and on the rear left of the government benches, to come to their senses. They may be concerned about such things as the form, as to whether the constitution happens to be in this form or that form, but the time has come for the government of the day, on behalf of Canadians, to make some of the hard decisions and to put in place some of the measures needed to restore confidence in the country. Certainly that was not forthcoming in the budget brought in a week ago tonight.
It is truly odd that we in a country such as Canada must relive history which has been proven repeatedly to be wrong in other countries. I cannot understand that. The British tried this type of approach 20 years ago, this governmental intervention approach such as was displayed in the budget and the actions of the government. We know it did not work in Britain, and in fact they are in a massive reprivatization program in that country to try to right their economic ship. The people of that country were misled by the socialists in the Labour party. We in this country have been misled by the socialists in the NDP. Those pragmatists, those people on the government benches who say they will do anything if it means power, have let the country down by virtually introducing us to a socialistic state such as the one we in Canada are falling into.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: The thing which disturbed me as much as anything since the return of Parliament has been to witness the absolute decline and eclipse of the Treasury Board as an effective arm of government in the present government of the country. I say that because we have known for some time that the President of the Treasury Board (Mr. Johnston) is merely a token. In no way is he a man of restraint. He is a man with little clout within the cabinet ranks. He is simply filling a post with no say, but I never thought we would witness the day when a president of the treasury board would have the nerve- or perhaps he does not even know what he is saying-to walk into the House and make the statements he made yesterday. As reported at page 4362 of yesterday's Hansard, the minister said:
Unlike my predecessor, the hon. member for York-Peel (Mr. Stevens), who kept trying to assume the responsibilities, in my judgment, of the Minister of Finance, I readily acknowledge the lead role of the Minister of Finance in developing the fiscal plan.
Near the conclusion of his remarks he referred to the Minister of Finance when he said:
All Canadians will welcome the frank and open way in which he has presented his expenditure plan and his medium-term economic assumptions.
What is the President of the Treasury Board saying? In effect he is saying that they have capitulated over at the

November 4, 1980
The Budget-Mr. Stevens
Treasury Board; they have surrendered. This was a fight which we waged with the big spending bureaucracy while we were in government. Essentially it boiled down to the simple fact that there were those who simply said, "You in the Treasury Board should do nothing but monitor. We at the lofty Privy Council level, overlapping the finance level and departmental levels, will come up with the expenditure plan which we think, in a macroeconomic sense, is needed in the country. You simply watch that the figures are spent the way we feel they should be spent." I know this may sound complicated, as if it is hard to understand, but let me assure the House that it is not.
There are two approaches to governmental expenditures. One is the academic approach, or the Keynesian approach, where those on high within the bureaucracy deem what a proper expenditure level is to be. Once that level is set, they simply sit down with those who might do the spending to figure out where it will be spent. I suggest that is what is now in vogue through the Michael Pitfields, through the lan Stewarts, through their respective ministers. In short, we do not have an expenditure plan in the sense that this is the least the government can spend. We have an expenditure plan which has been dictated by those who believe in big spending for the sake of big spending.
Here is the significance of what I am saying. Once this has been set and it becomes the fiscal plan, as the President of the Treasury Board says, or the expenditure plan, to use the words of the Minister of Finance, there is really no role for the Treasury Board. All the Treasury Board then does is add up the figures periodically and figure out whether they are under or over those expenditure levels which somebody else deemed are proper.
I have seen memos with respect to the previous government's handling of our affairs that indicate, for example, wastage is no longer to be criticized because wastage means simply that the expenditure plan, which is deemed to be proper, is perhaps not being met in the way it was originally intended, but at least it is getting the funds out there. That is what is going on. We are being told in the budget, which has been placed before us, that rather than spend $57.3 billion, as was our proposal in the Crosbie budget, that it is better to spend $59,350 million. Most important, we are being told that rather than spend $75,700 million by the fiscal year 1984, it is deemed better to spend $81,815 million.
Mr. Speaker, let me make one thing clear. I know it is commonplace for people to say, "Oh, well, he is simply trying to make a point but how does he substantiate it?" I invite hon. members, members of the press and the public, to take a look at a release that was put out by the Treasury Board on January 22, 1980. It is release No. 80-3. In that they will find we came up with figures comparing what would be the ongoing spending levels in government without the Crosbie budget, and what, in fact, those spending levels would be with the Crosbie budget. In short, we tried to translate to the public what the
ongoing expenditures in government were going to lead to if the Crosbie budget was not put in place.
I think what will be found to be most revealing now is that expenditure level is literally within millions of dollars each year-that is the ongoing trend line-it is literally within millions of dollars each year to what we were presented with Tuesday night here in the House of Commons. Thus, there is no restraint. All we have is rhetoric and verbiage on the part of that expert in verbiage, the Minister of Finance. What we have is the appearance of expenditures that are simply the trend line indicated by those who keep track of projections for ongoing programs and expenditures in government-no cutbacks. However, in contrast we had the courage through our budget to anticipate that those expenditures could be cut back by $7 billion by 1984. That was the approach that we took. We did not allow the ongoing trend line to take the Canadian public to a $82 billion expenditure level by 1984. We said that that was excessively high and must be reduced. We were able to propose that it be reduced by $7 billion.
Let me deal with the next point. So far I have simply been dealing with the figures that were brought into this House last Tuesday night by the Minister of Finance. But that is only the beginning. We find they have been doctoring the books. I understand the minister has an honorary degree, he is Dr. MacEachen. I did not realize that he got his doctor's degree for doctoring books. Let us take a look at a few of the examples. On page 32 of the budget papers you will find that it is revealed that they are setting up a new fund, if you like, called a petroleum compensation fund. Payments will be made out of that fund. The fund will be paid for this year in part, and in future years entirely, out of a petroleum compensation charge. Is it not interesting that in effect what they are doing-and after questioning the President of the Treasury Board last night he finally admitted that it was true-is giving the appearance of reducing expenditures by this little dodge alone to the tune of $1.2 billion this year, and up to over $6 billion by 1984.
Expressed in the simplest of language, what these artful dodgers are up to is simply that rather than follow normal accounting policies of this year, and saying they have to make payments with respect to oil compensation in the amount of $3,950 million, and record that in the blue book-while on the other side showing wherever they are going to get the revenue from-they have come up with a dodge, saying, "We are going to set up a separate fund which will be outside of the blue book. That fund is anticipated to need $3,950 million, but we anticipate we can sock it to the Canadian public to the tune of $1,215 million in the form of a new charge." That revenue will go directly into the fund leaving a net petroleum compensation payment of $2,735 million. And that is all that gets recorded in the accounts we have before us.
On that one item, Mr. Speaker, they have reduced the expenditure level by $1.2 billion in a most deceptive way. Taken through to 1984 we find that the total fudging of the books, if you like, will be $5.78 billion by 1984. With all sincerity I say that the Canadian public do not deserve that
November 4, 1980

type of treatment. How can you expect the Canadian public to have confidence in a government, or to have the proper attitude toward it, when government themselves are presenting figures in a way that, if you were in the private sector filing prospectuses with respect to share issues, you would literally be convicted of contravening the securities legislation on disclosure? That is only one example, Mr. Speaker.
I can add up totals of evasive types of presentations and non-disclosures totalling $10 billion by 1984. We have heard the Minister of Finance previously, and again today, come up with this figure of some $40 billion that he has saved the Canadian public. If he believes that, he is being fooled by his own fool figures. The fact is that the only reason he can pretend that he has saved anybody any money is simply that he is not disclosing it. He is simply not disclosing, to the tune of almost $16 billion in payment charges, the amount he is going to lift from the Canadian public in the charge for oil compensation to which I have been referring. For example his debt is another $13 billion higher in the aggregate than that proposed in the Crosbie budget. If you add those two things alone you have $29 billion of his so-called $40 billion saving. The reason I mention this type of thing is because I think it is so unfortunate that we have a Minister of Finance, in Canada's time of need, who stoops so low as to start cooking the books in that fashion.
Mr. Speaker, let me give you other examples of what I am referring to here. I say that there is $10 billion you can identify there by 1984 which would normally be considered expenditures, or amounts we have to allow for, that somehow or other they are shuffling off to the side-the Post Office approach. You will remember his cute little trick there. The Minister of Finance says, "Of course, I have assumed that the revenue from the Post Office will be sufficient to meet the expenditures and there will be no deficit during my projection." Expressed in another way, he is saying, "If we are able to roll onto the Canadian public directly the deficits of the Post Office through increased postage and other charges, then, lo and behold, we will have no deficit." He then has the nerve to say, "Of course, since we will have no deficit, and since I assume we will have no deficit, I will not show it in my figures."
There is the unemployment insurance dodge. What the minister is doing is taking it out of the general accounts, the estimates, and rolling it on to the employees and employers, and saying, "You will pick up another $1 billion between now and the end of the year", because it will allow him to show a more favourable budgetary presentation.


Mr. Evans:: It is required by the legislation, and you know it.


Sinclair McKnight Stevens: If we read between the lines, we must wonder what this budget will do to the agreements which now exist between the federal government and the provincial governments. The figures mean only one thing, that the government proposes to rewrite those agreements to put a greater load on
The Budget-Mr. Stevens
the provinces. There can be no doubt about that. That is another way the government will pick up what it thinks will be a $2 billion saving, and it will not be done in the federal name but simply picked up at the provincial level.
I mentioned these points because they show the mentality of the people who are now governing this country. Rather than face the hard realities, that expenditures are out of control and, that we need the strongest president of the treasury board possible, instead of a weak one, we are finding that the government is trying to disguise the figures. The government is in the lap of its public relations people who simply say, "It is perception that counts, not reality. Do whatever you have to do but do not tell the truth, and you will see how we will muddle through."
Let me put it another way. What we have received from the budget is an increase of 12.5 cents per gallon in the oil compensation charge, and an increase of 5 cents per gallon in the oil and gas revenue tax. Those figures total 17.5 cents per gallon, which compares to the 18-cent excise tax for which we were voted out. For half a cent on that item alone, the country changed from responsible government to irresponsible government.
As far as oil pricing is concerned, we are told that the increase will be $3.80 per barrel compared to our price of $4 a barrel. Of course, the 75 cents increase per barrel which the government ran up earlier in the year was not added to the $3.80 because it would put the price at over $4.50. The public relations people did not want to hear that on budget night so they said, "Let's forget that for the time being, and talk about $3.80." In truth that is what we have bought.


An hon. Member:: Deception.


Sinclair McKnight Stevens: Clearly, it is deception. In the words of Hugh Anderson, it is "wilful deceit" on the part of the government. The fact that the government has maintained the ongoing spending levels will have the effect of softening up and conditioning Canadian consumers to the concept that perhaps they should spend even more.
Last night the President of the Treasury Board startled myself and other members of the Standing Committee on Miscellaneous Estimates by stating that he felt that 49 per cent of the people at the deputy minister's level in the public service were underpaid in this country. I do not know whether he based that comment on fact, or whether it was just a wish. But when the government is facing a deficit of $14 billion and serious doubts in the financial community as to whether the country can handle this debt load which the federal government proposes over the coming years, one of the last things it should be saying is that its employees, who presumably are partly responsible for the position which the government is in, should be paid more.
As a rule one pays for results. If the government were running at a surplus, or relatively close to a surplus, then 1 could see, if it were felt that somebody was underpaid, it as an opportunity to suggest a bonus or some other type of increase in pay. However, that is not the situation in this country today.

November 4, 1980
The Budget-Mr. Stevens
In short, we are in a very serious economic position which is not being dealt with in a prudent way by the government.
I mentioned my feeling that we have only received half a budget. The tax increases are yet to come, and let there be no doubt about that fact because it is just a question of form. What we have received so far is the energy aspect. I suggest that the reason energy has been singled out in the budget, and in the document entitled "The National Energy Program" is because the government feels that this field is an easy target. It looks upon the oil industry as predominantly foreign, as very profitable and as an industry which is mainly located in one province which represents only 10 per cent of the population of the country. In the thinking of this government, that industry is a fair target because it can arouse public opinion against that industry.
I hope that those people who read the budget and say, "Well, at least they didn't tax us too heavily," and those in industry who say, "Well, it's not hitting me, so somehow or other I am not concerned", do not smile too broadly, because I can assure them their time is coming should this government continue in office beyond its present mandate. The government intends to intervene, to socialize, to take over, to cannibalize, to Canadianize, to nationalize, call it what you want, until the Canadian public finally does what happened in Jamaica, Britain, and what will happen tomorrow in the United States, turn out the big spenders and bring in responsible government once again.
Approximately a week ago I attended a seminar in this city which dealt with public corporations. Various comments were made to rationalize the government's position on Crown corporations. The speaker just ahead of me made the comment that when the government wants to take over parts of the private sector, and the private sector resists because it does not want to be taken out, it should be remembered that the government has some very effective tools at its disposal. It can regulate the industry and it can bring in onerous taxation to sober it up. In short, the government can bring the industry to its knees so that it is willing to be bought out.
To show how much the government has accepted this theory, the Minister of Energy, Mines and Resources (Mr. Lalonde) states at page 52 in "The National Energy Program":
The Government of Canada recognizes that the National Energy Program represents a fundamental departure, in many instances, from the current policy environment. Despite the fact that the policies will maintain, even enhance the relative position of the oil and gas industry, some firms may regard the new conditions as unsatisfactory. The government's acquisition program provides an answer for them. The Government of Canada is a willing buyer at fair and reasonable prices.
I thought that godfathers existed only in the United States, but clearly we have a godfather in the form of the Minister of Energy, Mines and Resources. Is that not contemptible? Did anyone ever think that in Canada we would reach the position where the government, which is supposed to be the servant of the people, rather than trying to respond to criticism would say, "If you don't like it we are going to buy you out on", presumably, "fair terms." I suggest to you, Mr. Speaker, that
with the power the government possesses, those terms would be virtually confiscation.
I mention this because I believe that if we in this House do not stand up and be counted, starting tonight, to show our distaste for this type of budgetary presentation, this type of spending, this type of deficit, this high infrastructure that will lead to greater unemployment in the country and unsatisfactory real growth in the economy, we will not have done our duty as representatives of our constituents.
I have spoken of some of the ways the government has deceived the people in this budget. Perhaps the worst deceit of all is the suggestion made during the election campaign that the government would control expenditures to the level of economic growth in the country. What is meant by that is not what you and I would mean, Mr. Speaker, that if the economy increases by 9 per cent this year we would try to keep spending down to 9 per cent instead of the 15 per cent the government project. The government means it will be kept to the-


The Acting Speaker (Mr. Ethier):: Order, please.


Sinclair McKnight Stevens: -you lose before 1984.


The Acting Speaker (Mr. Ethier):: Order, please.


Some hon. Members:: Hear, hear!


Lloyd Axworthy: Mr. Speaker, I want to say how much I enjoyed the remarks made by the hon. member for York-Peel (Mr. Stevens). It is nice that we are able to see the full epitome of the real Tory finally speaking up in this House. During question period we were treated to the exhibition of that sham Tory who shed great crocodile tears about the plight of the poor. He charged that this government was ignoring them and had not provided enough money in the budget to deal with the problems of those on low income. Now, however, we have the real voice of the Tory party speaking-no money for the poor-cut back-end the deficits. That is the pristine pure voice of the niggardly mean-minded sort of Tory who says, "No money for anybody; let's cut back."
1 enjoyed that, Mr. Speaker. I think it was useful to have that point of view expressed in this House-no more sham, no more charade, none of the posturing for the cameras. The hon. member has once again lived up to his reputation of being the true voice of the hard rockbed of Canadian Conservativism which holds, basically, that government should do nothing at all.
On this side of the House we appreciate all this, Mr. Speaker, because it shows what the differences are between us. I just wish, however, that the hon. member had been a little more accurate with some of the facts he put on record. I know that when he was a minister of the Crown he did not want to be confused by facts, but I would have thought that these past months in opposition would have changed his behaviour. Having occupied a cabinet post, I should have thought he
November 4, 1980

would have been more careful about what he presented as facts.
He said that he is tired of mythology and wants to get down to the real facts. Yet he was prepared to say in this House that the burden of unemployment insurance premiums was being hidden by this government, and he charged that this was an act of deception. What he failed to mention, however, was that the measure was introduced by his government in the December 13 budget-that the Crosbie budget introduced the principle that a greater share of the unemployment insurance program should be carried through the premium base. That budget recommended that the premium be increased to $1.60. When this government took office last winter, the premiums were frozen at $1.35 as it was felt it would have been awkward to continue with the plan of the previous government. Contributors were given a full year's respite.
It is a little unfair for the hon. member to suggest that the proposal to increase the unemployment insurance premium is an act of this government when, in fact, it was supported by members of his own caucus at the time the legislation was introduced. It was supported with a great deal of enthusiasm on the quite legitimate grounds that, over a period of time, the burden of the unemployment insurance fund had to be carried more equitably. The percentage of funds carried by the public sector had risen to 40 per cent, instead of the 20 per cent formula that the public sector had normally carried. We agreed the public sector was carrying a great burden. The hon. member forgot to mention, however, that his government introduced the measure and his caucus supported it.
While dealing with misstatements and errors or sins of omission, I think the hon. member would be the first to admit his own serious sin of omission. When dealing with oil pricing, he suggested that the formula we put forward included a Syncrude levy which would take it to above $4, and that the Tories would never have done that. We know that is not true, Mr. Speaker, because the Syncrude levy is a statutory requirement that every government would have to impose. Thus the Crosbie $4 increase would have become $4.75. In fairness, the former president of the treasury board should have acknowledged that.
If this debate is to be conducted with fairness, it would have been in the interest of honest observation and reporting for the hon. member to have been more accurate in the statements he made.
That brings me to the need for a more accurate and honest appraisal of the budget. Opposition spokesmen have raised cries of alarm up and down this country in the last week or so about the dastardly effect the budget will have on western Canada. Just this past weekend in my home city of Winnipeg, the hon. Leader of the Opposition (Mr. Clark) suggested that this budget rang the death bell of federalism-that the Liberals will bring about separatism. Of course, he was prepared to say that he did not believe in separatism, but still most of his speech dealt with it. He implied that the budget discriminated against western Canadians.
The Budget-Mr. Axworthy
The Premier of Alberta has suggested the budget discriminates against his province, that the government is moving into his living room to take over his furniture and all his services and resources.
The hon. member for Vancouver Centre (Miss Carney) suggested that we would be embarked upon the slippery slopes of separatism if we follow the "made in Ottawa", central Canadian type of policy. Mr. Speaker, I am a western Canadian, and I do not think I take a backseat to anyone in this House when it comes to concern for my region and the type of development that should occur there. I take strong exception, however, to the fear tactics being parlayed by certain opposition spokesmen who suggest that there is a dichotomy-that the national government is not national at all but represents "them" and not "us". In a subtle manner they try to create a division in this country. They are employing the tactics of division for whatever cynical, political reasons they may have.
I know what the reasons are, Mr. Speaker.
As Minister of Employment and Immigration I will have to offer my services to the Leader of the Opposition within a few months. As an equal opportunity employer, the government is quite prepared to make sure that all the facilities of counselling and job placement are available to him when he needs them.
The tactics being employed by the opposition are very dangerous. They are playing with fire. They are taking the honest concerns and grievances that are felt in my region of the country, and in others, and fanning the flames into a conflagration, and then suggesting that there is a sweep of separatism emerging in the west when, in fact, the only separatism is in the minds of those who talk about it.
Sure, there are differences of opinion and there are honest criticisms about what we have done, but we are prepared to argue those criticisms and differences. However, we should not fall into the trap of this kind of fear-mongering which is simply trying to exploit those concerns and anxieties and turn them into something sour and distorted. That is mythology which is being parlayed in Canada at the present time is setting up a false distinction and a false dichotomy, trying to create divisions in Canada by employing the most exaggerated hyperbolic misstatements of facts that have ever been expressed in the history of this Parliament. We had some good examples in question period. We heard some absurd outlandish extrapolation of figures and ideas, which simply boggle the imagination until you know the people who expressed them, and then you understand why.
I am going to make a case this afternoon that the budget put forward last Tuesday by the Minister of Finance (Mr. Mac-Eachen) does far more for western Canada, is far more in its best interests, than anything that was put forward by the previous government-those great paragons and defenders of the west. No matter how members on the other side try to cut it or try to divide it, when you compare those two documents, as members on the other side are fond of doing, and add up the

November 4, 1980
The Budget-Mr. Axworthy
list of benefits that will accrue to western Canada, this budget comes out far more on the plus side than the one put forward by the former minister of finance and flabbergab last December 13. It is important that western Canadians understand that because western Canada will in large part be setting the agenda for discussion for debate over the next several years. It is the area where the dynamic growth in Canada will take place, and where much of the employment will occur, even though the hon. member for Calgary West (Mr. Hawkes), in one of his flights of fancy this afternoon during question period, suggested that perhaps half of the province of Alberta was going to be unemployed. That was one of the most absurd statements that have ever been expressed in this House. It is in western Canada where the employment will continue to be.
I returned from western Canada last night. While I was there I met with representatives of the business community and the oil, gas and mining communities. Their concerns were not that of the member for Calgary West. Their concern was getting more people out to western Canada because they need skilled workers. Their concern was not the unemployment problem but to get more people from the other parts of Canada to work in the mines, the gas fields, and in natural gas exploration.
I would suggest it is about time the hon. member for Calgary West went home and talked to those people and understood what their concerns are, and not suggest something which is being manufactured or generated in his own very fertile imagination.


Frederick James (Jim) Hawkes: Mr. Speaker, I rise on a point of order. The hon. member opposite is making statements about what I said earlier in the House. I think the record should be corrected. I am implying considerable job loss in eastern Canada-


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member's remarks do not constitute a point of order.


Lloyd Axworthy: Let me indicate what the budget said. Let me point out, first and foremost, that we were responsive to the issues in western Canada by not putting in the budget many of the things being speculated about. There was a great sort of campaign being carried out. We heard such things as, "Look what these Liberals are going to do in western Canada. We will have an export tax". The battle flags were waving and the trenches were being dug purely on the idea of fighting this discriminatory tax. It was a legitimate concern to be raised, and one to which we responded by not bringing in an export tax. I am suggesting that we were prepared to respond to those concerns. We did not totally abdicate the need to get additional revenues for the federal government but we got those revenues in a different kind of way, through a different kind of mechanism.
Also introduced in that budget was a very clear strategy and program for ensuring that the major benefits of the revenues derived and developed out of the new resource boom of western Canada would be recycled back into the west. These revenues would be used for new energy supplies and sources,
for the industrialization of western Canada and to provide for conversion from oil to natural gas and electricity. These are energy sources in ample supply. So any suggestion that this budget ignores the concerns of the west simply means the provisions of this budget have been ignored.
The major beneficiaries of this budget-contrary to the point of view that was being put forward earlier in this House-are the consumers of western Canada and the consumers right across the country. A great deal of heartfelt anguish was being expressed on the part of some members about what was going to happen to the consumer. I will tell you what will happen to the consumers in my province. In 1984 they will be paying $400 to $500 a year less to heat their homes and drive their cars under this budget than under the previous Tory budget. That is the difference, Mr. Speaker. That is the real message of this budget. The Canadian consumer will find he is not paying the kind of inflated prices which were being put forward in the December 13 document of last year. It is that money which will stay in the hands of the consumer to buy other goods and services and which will keep the economy going.
Similarly, the farmers of western Canada will not have an excise tax on their fuel oil. They, too, are being saved by this budget. They will not have that kind of burden to carry which would add to their costs and, therefore, to the cost of food and agricultural products. That was avoided by this budget as compared to the document put forward by the so-called defenders of the west.
There are a series of major stimulants in the budget for the growth of industry in western Canada. I find it hard to understand why the Tories persist in assuming that the only agencies for the development of our energy fields must be multinational corporations. Why is it the Tories assume that it is impossible for Canadian-owned companies to become the major shareholders, the major entrepreneurs, the major enterprisers in the development of our oil and gas and our energy resources? What they are doing basically is defending the corporate system, instead of defending what should be the real opportunity, which is to develop new businesses in western Canada to provide for a whole new network of enterprise and activity through the incentive grant program. This is something that was not offered in the previous budget.
So, if we are comparing budgets and comparing measures, the opportunity for Canadian businessmen in western Canada to get an advantage and a step up in developing those resources, is in this budget. There are nothing of that kind in the previous one. It is out of that kind of incentive program, based around the idea that it is far more effective in our energy system to have Canadian-owned enterprises and companies, that we can avoid the massive transfusion of funds out of Canada which amounted to $3.5 billion in the past two years. That money could be kept in Canada working to develop new energy supplies and resources.


Frederick James (Jim) Hawkes: One-fifth of the interest paid on the public debt is paid to foreign countries.
November 4, 1980


Lloyd Axworthy: I think the hon. member for Calgary West has missed cheerleading practice, or something.
We are talking about a budget which is designed as a blueprint to encourage and develop western industry; to develop the very growth, jobs and opportunities that we think are so important to fuel growth throughout the rest of Canada. We should not be listening to the doomsayers and those preaching the gloom of depression and recession in the west, because this gives us an enormous opportunity, even for those companies I have talked about which are saying, "My goodness, we have had cutbacks and we have had our livelihood taken away from us". That is true, their percentage of revenues has been reduced, but the volume of money has doubled.
The amount of capital available to the oil and gas companies will double in the next three years compared to the last three years. There will be far more capital going in through private hands than there was up until last Thursday night. If hon. members opposite cannot read that in the budget, we suggest they take a Braille course because it is very clear that the full and necessary capital to provide for all the exploration and development is available.
Furthermore, we are prepared to take on this issue. We feel that that in itself is not enough. There must be more than that. There must be a very clear public role and responsibility in the development of our energy supplies. We make no apologies not only for maintaining Petro-Canada as an effective vehicle for energy development, but for enhancing its role. I will tell you one reason, as a westerner, because Petro-Canada is a western based company. It now provides jobs for over 2,000 people in the city of Calgary alone. It is a major sponsor of research and development, of new exploration and development projects right across Canada and in the international sphere.
As a western Canadian I take pride in the fact that this government was responsible for putting in place a brand new company which is now one of the major leaders and innovators in the energy field in the world.


Some hon. Members:: Hear, hear!


Lloyd Axworthy: What were our friends opposite doing? They were cannibalizing it. They were going to dismantle it. They were going to take it apart. Those great defenders of the west were going to subtract and eliminate one of the most important and effective agencies of energy development which this country has, a western agency of development.
To make the case further, I would point out it was just in the last week that we have taken the same model of Petro-Canada in the oil and gas field and applied it to the area of renewable energy and conservation technology. If members opposite ask what is in it for the west, 1 will say that in my own city of Winnipeg the new Enertech corporation is to be located. We have the opportunity of developing a brand new high technology there which will serve this country for the next 100 years. It is again a western Canadian city that will become
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the centre of new skills, development, and innovation. It will put in place a brand new industrial base in western Canada.
Of course members opposite are going to vote against it because they do not believe in those kinds of things. They do not believe in enabling and assisting western Canadians to develop new technology, to develop new industries within their area, because they really are the friends of the multicorporations. That is their primary purpose. That is where their ambitions and concerns lie, not in developing Canadian companies, not with developing institutions that will be located in western Canada and will provide jobs and opportunities in the west. They are more interested in their friends in the boardrooms of Toronto. That is where their interest lies.
I will not accept this kind of mythology that is being expressed that somehow separatism will emerge because the west is being ignored. If there is anyone who has been guilty of ignoring the interests of western Canada, it is many of the members opposite who were prepared to support a budget last December that had nothing in it for western Canada, except a sell-out.
Further, we would like to point to the introduction in the budget of the western development fund. It is designed to take the proper profits and revenues deriving from resources and recycle them back into western Canada to provide a much more diversified economic base. There is not a westerner in this chamber who has not learned, as part of his history, the whole boom and bust cycle of the west based upon the erratic behaviour of commodity or resource markets.
One of the great ambitions of western Canadians has been to develop a broadly based economy with a wide variety of components of industry, processing and manufacturing, so that we can even out that boom and bust cycle and have a proper system of economic development which does not rely upon that uneven, bumpy road. That has been a ligitimate concern. It has not been met that well in the past.
I agree full well with all of the spokesmen from western Canada, provincial or not, who believe we should be using our resources and the revenues from them to provide for better economic development in western Canada. Where I take issue is with the way they chose to do it. Their choice is to leave all the control, responsibility and decision-making in the hands of individual provincial governments. They assume that will result in the kind of goal and ambition that we all share, which is the proper economic development of the west.
That flies in the face of the history of western Canada. Throughout the history of our region the federal government has always played an important and influential role in ensuring that the west world be developed. It was not the provincial governments which bailed out western farmers during the depression. It was the federal government that had to come to their rescue, based upon taxes drawn from other parts of the country.
It was the federal government which had to put the Wheat Board into place against the opposition of several provincial governments in order to provide for the orderly marketing of
onnnn ca

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grain. When the issue of the 1940s and 1950s was the whole dry land farming problem, it was the federal government through the PFRA that came to the rescue of the prairies. It put in place the irrigation ditches and dug holes that provided proper watering resources for the west, oftentimes paid for by the tax dollars of Canadians from other parts of this country.
There is nothing wrong with that. That is what a federal government is for. It is to share the benefits and share the wealth. That is where we do take issue. That is where we divide, myself and those opposite, because we believe there is an important and necessary role for a central government to play in the development of western Canada, to its benefit and the benefit of the entire country. It is not to retreat and shrink our horizons, not to rely solely upon a provincial government because its own electoral mandate is only to serve the people within its narrow range of boundaries 400 miles wide. I would not expect them to do anything more.
I was a provincial member for seven or eight years. Your mandate is to serve a provincial constituency and jurisdiction. However, there is a fundamental difference when one becomes a member of the federal House and federal government. You realize there are choices that have to be made to serve one end of the country or the other.
It saddens me that so many spokesmen from the west are taking on that kind of parochialism. They say they do not care about the rest of Canada. They are not interested in sharing the wealth. They do not want to see a proper distribution of the benefits. They want to keep everything for themselves.
The fundamental flaw in that kind of reasoning is that, if we allow it to happen, not only does the west suffer in terms of its economic development, but so does the entire country. That is the central issue in this budget. That is where this budget differs fundamentally from the one we had on December 13. It does incorporate the basic idea of sharing and distribution.
The idea of the western fund is to use the federal jurisdiction which cuts across regional and provincial boundaries to put into place the kind of infrastructure that will help make the west grow. We from the west well know that one of the most serious concerns we have is in the area of transportation. We could be selling far more of our grain, potash, coal and other commodities, if we could move them to world markets.
The railways tell us that by this year their carrying capacity will be fully used, and in two years from now we will be 30 per cent short. We will all be losers if that takes place. Western Canada loses and so does the country. Therefore we must put in place a transportation program to modernize our entire distribution system for the western region. It must be not for one province, but for the entire region.
Who has the jurisdiction to do that? It is not the provincial governments but the federal government. The provincial governments are not in the business of trying to develop a full regional network of linking one part of the country with the other. That takes money. You do not wave a wand or snap your fingers and get the $6 billion, $7 billion or $8 billion it will take to modernize our railroad system in the west.
The money must be recycled. It must come from the fastest growing revenue source, which is the resource boom of western Canada. The benefits which flow out of that kind of investment are changing the tariffs, the rates and the Crow, and putting money into new tracks, terminals and ports. It means we all benefit from it. It is not a zero-sum game. It is not the "we" and "us" that the Leader of the Opposition was talking about on Saturday.
That is the kind of investment which will benefit all Canadians because, if we modernize our railroads, and the tracks are built in London, and the cars in Trenton, Nova Scotia, the entire country receives the full benefits of that kind of economic boom. That is what we are arguing about in this budget. The hon. member for York-Peel said that this is not a budget because it talks just about energy. No, we are not talking just about energy. We are talking about a fundamental question of how this country is going to be governed. Is it going to be governed in the interests of a few, or in the interests of the many? That is the difference, and that is the issue which is really joined in this Parliament.


Some hon. Members:: Hear, hear!


Lloyd Axworthy: We must concentrate on the energy area because it is fundamental to our economy. As we said during the election campaign, we must use the energy issue for the full development of the entire industrial base of Canada. We must look at the benefits of major investments in energy.
On Thursday night Mr. Lougheed appeared on the television screen and pleaded poverty. He said that the federal government is going to come in and take his money away from him. I read the figures, and what we are leaving Mr. Lougheed is $100 billion in revenue over the next ten years. The per capita revenues of the people of Alberta will be ten times those of the people of British Columbia, and 20 times those of the people of my province. That is hardly a case for poverty. One can hardly say that we are impoverishing the west. I do not gainsay that money. It should stay there and be working there, but we also should not gainsay the benefits for other parts and regions of the west and the rest of Canada.


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the minister, but his allotted time has expired.


Lloyd Axworthy: Mr. Speaker, if 1 might conclude with one sentence by saying that-


The Acting Speaker (Mr. Ethier):: Order, please. This will have to be done with the unanimous consent of the House.


Some hon. Members:: No.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, although I appreciate the opportunity to speak this afternoon, I must say that it gives me very little pleasure to speak on this first Liberal government budget of the 1980s. I say that because this motion more than any which will come before this
November 4, 1980

House, with the possible exception of the constitutional question, provides a dim glimmer of light into the future showing where this government is taking this country. It is an omen not only in what it says but also in what it fails to tell the Canadian people.
In introducing this budget the Minister of Finance (Mr. MacEachen) reminded us, and I quote:
Only ten years ago, the world was riding high on the long wave of postwar economic expansion . .. While inflation was beginning to creep up in many industrial countries, we all felt confident in our collective abilities to manage growth as the world economies expanded in concert.
It was in this atmosphere of optimism that the Prime Minister (Mr. Trudeau) made his commitment to build a "Just Society" for Canada. To reinforce this commitment the current Minister of Communications (Mr. Fox) reiterated his fundamental belief in people oriented government, on February 26, 1973. He said:
'Policies for people' is a motto to which I wholeheartedly subscribe. It is a motto which ensures our responsiveness to the aspirations of the Canadian people-
The desire to build a more just and equitable Canadian society is, I am sure, an aspiration shared by every member of this House. But a commitment can either be real and sincere, or deceptive and fraudulent. The ultimate measure of our commitments depends on the actions or policies we adopt and the results achieved. In spite of all the rhetoric, the net effect of Liberal policy in the 1970s has been systematically to undermine Canada's prospects for the future. In 1970 the rate of inflation in Canada was 3.3 per cent, and today, after years of "wrestling inflation to the ground," prices are increasing at a rate of 10.7 per cent.
In 1970 we enjoyed a $1.1 billion surplus in our balance of payments. Today, after ten years of gross mismanagement of the economy, our balance of payments position has deteriorated to an unprecedented $6 billion deficit.
At the beginning of the last decade the Canadian dollar traded at par with the U.S. dollar. Today it is worth 85 cents U.S., and by the end of this decade, if the budget is any indication of where this government is taking Canada, we will be lucky if it is worth 60 cents U.S.
In 1969 the share of national income going to the 20 per cent of Canadians with the lowest incomes stood at only 4.3 per cent. By 1978, the last year for which data is available, this government's policies had managed to cut their share back even further, to 4.1 per cent.
In 1969 the unemployment rate in Canada was only 4.4 per cent. The legacy of Liberal economic policies in the 1970s is that today we have more people out of work in Canada than were unemployed during the Great Depression. The unemployment rate is nearly 8 per cent. In reality the unemployment rate is certainly in excess of 8 per cent, with one million Canadians unemployed.
In the early 1970s our gross national product in constant dollars was growing at respectable rates, around 6 per cent and 7 per cent. By the end of the decade this had been cut back sharply, and according to the Minister of Finance's own
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budget statement the other night, we will experience an absolute decline in real output this year.
This budget has the dubious distinction of heralding that Liberal tradition into the 1980s. It represents a renewed commitment to the politics of opportunism, the politics of resource dependency, the politics of social injustice, and the politics of wilful deceit, all at the expense of the Canadian public.
There currently is a real controversy over the proper role of government in our society. Should we have more government or less government? I venture to say that one thing is clear, and that is that the Canadian people would definitely be better off without this government.
However, the controversy follows from the failure of government to provide the leadership this country presently so desperately needs. There is a sense of despair and uncertainty across Canada. There is no clear consensus on what we as a people are trying to achieve. There are no plans. There are no goals. 1 suggest that people across Canada from the Atlantic provinces to the north, throughout central Canada and into the west, are puzzled today. They are confused today, and the voices we have heard referred to as the voices of western separatism are simply reflections of that.
1 for one do not for a moment believe that westerners are prepared to separate from this fine country, but they are upset. Western Canadians, like Canadians everywhere, are concerned that there is no direction for this country and no indication of the goals and aspirations of this government. Their feelings of frustration are vented through this avenue of separatism.
To some extent this despair and uncertainty we find across Canada are reflected in the constitutional debate, but nowhere is this better illustrated than in this budget. Here, in the first budget of the 1980s, there is no statement of clearly defined national objectives. We have no idea where this government thinks our country should be in 1985, let alone in 1990. There are no visions, no goals, no objectives, and no direction. Who would begin to develop a family without any idea of where it is going in the future? What businessman would consider operating a business with no objective, no clearly stated goal, and no vision? To my mind it is this lack of vision and direction which is causing the despair and concern in Canadians everywhere.
Is this government concerned about social justice? Then what should the distribution of income look like in 1985 and 1990? Is this government concerned about our mushrooming balance of trade deficit in manufactured goods? Then what should our balance of trade in end products be in 1985 and 1990? What percentage of the domestic market should be supplied by domestic production by 1985 and 1990? Is the government concerned about the level of unemployment in Canada? Then what is our target unemployment rate for 1985? This government has coerced Canadians into accepting unemployment rates of 7 per cent and 8 per cent. In a country as rich as Canada, with the possibilities which exist here, to accept rates of 7 per cent and 8 per cent is a disgrace. Many western industrialized nations would not consider these rates

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to be acceptable for a moment, yet the Liberal government has been able to convince Canadians that this is just fine.
Is the government concerned about the quality and the quantity of houses in Canada? Then what should be our target for the national housing stock in 1985 and 1990? Is the government concerned about the government deficit? Then what should be the size of the deficit in 1985, or ten years from now?
One could go on and on, but the message is abundantly clear. This government has failed for 12 years to place before the Canadian people a set of clearly defined national objectives upon which sound development and sound policies could be based. Without clearly defined medium and long-term goals and objectives, the formulation of government policy becomes an exercise in the politics of expedience and short-term political gain. Not only are such policies difficult to evaluate, but in the long-term they are certainly doomed to failure.
Let me illustrate what I am talking about with a few simple examples drawn from the record of Liberal policy initiatives taken in the 1970s. The throne speech of 1970 stated:
As Canada moves into the seventies, we are all invited to join in this bold enterprise-to share the excitement-to face the challenge, to pursue the distant ideal of the just society.
Later in the same speech we find:
-legislation will be introduced incorporating policies designed to make more equitable the economic burden shared by our fellow dwellers in this complex and varied land.
While presenting the budget for 1973 to the House, the Hon. John Turner, the then minister of finance, stated that his budget was
-aimed at balanced economic expansion so that all regions share equitably in our growing wealth, because national unity demands fair shares in the national prosperity.
In spite of all the rhetoric, the net effect of Liberal policy in the 1970s has been to lower the share of our national income going to the 40 per cent of Canadian families and unattached individuals as the bottom of our income distribution, and raise the share going to the 40 per cent of families and unattached individuals at the high end of income distribution. In addition, regional disparities in Canada as measured by unemployment rates and per capita incomes have grown progressively worse over the course of the decade. So much for the "Just Society".
What of this budget, Mr. Speaker? The Minister of Finance tells us that the policies of his predecessors have created a tax system which allows numerous profitable corporations and wealthy individuals to pay little or no tax. That is what he is telling us! My colleague, the hon. member for Broadview-Greenwood (Mr. Rae), has pointed out that there are hundreds of Canadians who, last year, earned in excess of $100,000 each and paid not a nickel in income tax. I wonder how many working Canadians last year paid not a nickel in income tax, who are making substantially less than $100,000 annually.
What does the minister propose to do in this budget about these inequities? Absolutely nothing. There is not even a
commitment to increase the share of national income going to the poorest 20 per cent of Canadian families by even one hundredth of one per cent by 1985. Again, there are no plans, no objectives, and no stated goals.
No problem better illustrates or brings together the many dimensions of what we might call the Canadian crisis than the growth and structure of our balance of payments deficit. We opened the last decade with a surplus of $1.1 billion in our current account. In 1972 we began importing more from the rest of the world than we exported, and only seven years later our balance of payments deficit has grown to a record $5 billion. Today we enjoy the dubious distinction of having the largest current account deficit, both in absolute terms and relative to GNP, among western industrial nations.
Our merchandise trade surplus of $4 billion last year only results from our increased willingness and growing dependence on exports of raw materials and semi-processed goods to earn foreign exchange. It hides our massive deficit of $16 billion in fully manufactured goods.
Because manufacturing is more labour intensive than our resource industries, it is this sector of the economy that holds out the greatest potential for solving the unemployment problem in Canada. Let us look at how this sector has fared under Liberal and Conservative stewardship. Taking imports as a percentage of the Canadian market, imports of agricultural equipment in 1965 amounted to 85 per cent. Ten years later they were 95 per cent. In forest equipment in 1965 they were 30 per cent, and in 1975 they were 47 per cent. In mining machinery, very important in my own riding, imports as a percentage of the Canadian market were 59 per cent in 1965, and in 1975 they had increased to nearly 80 per cent. Construction equipment, so crucial to western development at this time, in 1965 was 77 per cent, and in 1975 it was nearly 85 per cent.
If one looks at the entire machinery sector as a whole, in 1965 we exported $365 million and imported $1.7 billion worth of machinery and equipment. By 1975 our machinery exports had increased to $1.7 billion, but imports had jumped to $5.5 billion. This growing deficit in our trade in finished machinery and equipment meant that more production and employment were being created abroad than in Canada.
However, the machinery industry is not unique. Similar stories can be told about the Canadian autoparts industry, the electronics industry, the household appliance industry, etc. What does the Minister of Finance offer in this budget to deal directly with our growing balance of trade crisis in finished manufactured goods? Absolutely nothing.
The biggest gains to be made in employment and production in the 1980s will be through import substitution in our own domestic market. This is why an industrial strategy for Canada is so important. We must produce more of the goods Canadians buy.
To give you an idea of how powerful import substitution can be in Canada, let me point out that if Canadians would spend the equivalent of only one day's pay more a year on Canadian-
November 4, 1980

made goods instead of imports, it would create more than 26,000 jobs in Canada. A few weeks ago, when 1 introduced in the House a recommendation that the government implement, immediately, a "Buy Canadian" program similar to the one we have seen in the United States where they have a "Buy American" program, it was soundly rejected by the Liberal government. Have they some other strategy? What does this budget offer in the way of any industrial strategy? Nothing.
Let us now turn to import substitution in manufactured goods. What do we hear in the budget on this? Complete silence.
It gets worse, Mr. Speaker. The small benefit we derived from our $4 billion merchandise trade surplus is more than cancelled by the $9.5 billion deficit on our service account. There is virtual hemorrhaging of capital out of this country in the form of profits, dividends, royalties, consulting and engineering fees, interest payments, and tourist expenditures. This amounts to more than $168 million flowing out to the foreign creditors of this country every week. What does the minister offer the Canadian people in this budget to begin the long and difficult process of correcting this imbalance? Nothing, Mr. Speaker. In fact his projection is that the service account deficit will grow by $6.2 billion by 1985, an increase of 55 per cent.
As our balance of payments further deteriorates, we become increasingly dependent upon foreign investors and creditors to bridge the gap between our stagnating production and our growing consumption.
This budget, both in what it does and in what it fails to do, will make a major contribution to increasing the level of uncertainty surrounding future government policy in Canada. The failure to define clear national economic and social objectives, and the continued use of monetary policy to pursue often conflicting goals, will all contribute to undermining further the ability of business, especially small business, to plan and carry out investment projects with long-run pay-offs in employment and production.
Despite the introduction of small business development bonds, this budget's net impact on small business will, very likely, be negative. The minister has failed to recognize the growing social and economic significance of small businesses to Canadians. Every sector of our economy is represented in the more than 900,000 small enterprises representing well over 90 per cent of all business conducted in Canada. Small businesses employ 2.5 million Canadians, or about 42 per cent of the entire labour force. They account for significant portions of all business sales in Canada. The economic significance of small business is illustrated further by job creation, which is something all of us in Canada are particularly interested in at this point in time.
Small businesses often generate more direct and indirect jobs per unit on invested capital than larger firms. During 1977, for example, firms employing fewer than 20 persons created 97 per cent of all new jobs in Canada. If we are to
The Budget-Mr. Riis
overcome our unemployment problem we must ensure that we encourage the growth of a healthy, vigorous small business sector.
It is generally recognized that high interest rates impose a relatively greater burden on small enterprises than on large corporations. In part this is because small businesses rely heavily on the chartered banks and other financial intermediaries for credit and do not have access to the range of financial alternatives available to larger corporations. As record high interest rates began to take their toll in 1979 by pushing small business bankruptcies to post-war record levels, the former Conservative government proposed interest rate relief through the small business development bond introduced in the tragic budget of last December.
The Liberals promised lower interest rates during the 1980 election campaign and, true to their word, once elected, raised interest rates even higher than had the Conservatives. Small business bankruptcies in the first nine months of 1980 rose 18 per cent over the corresponding period last year, but the value of liabilities involved in these bankruptcies increased by 28 per cent to $560 million. However, this is only part of the story. Official bankruptcy figures do not account for the thousands of businesses which are no longer able to make ends meet, quietly close their doors, and go out of business without going through the formal bankruptcy process.
The official statistics also fail to account for the social strain business failures place on the general well-being of our communities across Canada. There is a human side to this question. When we are talking about business failures and business closures, we are talking about the dashed dreams, hopes, aspirations of Canadian individuals and families. Their visions for the future, their creativity and willingness to participate in the future of Canada are dashed.
Under increased pressure from the business community, and lacking any coherent policy of his own, the Minister of Finance dusted off the SBDB proposal of the former Conservative government for his April 21 economic statement. The small business development bond is a classic example of a poorly thought-out set of objectives leading an inept government to formulate ad hoc, band-aid legislation which has absolutely no hope of achieving one tenth of its original vague promise. It was ill-conceived by the Conservatives who pride themselves on being fiscally responsible but had no idea what it would have cost the federal treasury in lost revenue.
When the Department of Finance began formulating the details of the SBDB, they discovered that in June of this year financial institutions held approximately $16 billion in existing small business debt which could have qualified for interest rate subsidies under the new program. If these debts were rolled into SBDBs, this alone would have meant a loss of $500 million to $600 million to the federal treasury. With the federal deficit running at over $14 billion, the Department of Finance could hardly view with enthusiasm a further massive loss of revenue. So they began to impose qualifications, limitations and exclusions.

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For example, small business development bond loans cannot be granted to unincorporated small businesses, the family businesses or the single proprietorships. They cannot be used to provide working capital, the most important capital requirement of almost every small business. They cannot be used to buy second-hand capital equipment and machinery.
The Elouse will recall that the purpose of this legislation was to provide interest rate relief to small businesses. The effect of these restrictions on excluding the great majority of Canadian small businesses from benefiting under this legislation is absolutely staggering. Of the approximate 930,000 active small businesses in Canada, the first restriction excludes over 625,000 firms which are unincorporated small businesses from receiving interest rate relief under the SBDB program.
Small businesses in the wholesale, retail, construction and manufacturing sectors are required to carry and finance relatively large amounts of inventory and goods in process, compared with service industries, for example. Inflation and high interest rates raise dramatically the operating costs of these businesses. The great majority will not benefit from the SBDB legislation because the second limitation expressly restricts the use of SBDB loans from providing working or operating capital.
Many small businesses are able to hold their start-up or expansion costs down by purchasing used machinery and equipment. If this second-hand capital stock has been idle or underutilized, its purchase will have contributed to increased productivity and over-all capacity utilization in the economy. Under the proposed legislation SBDB loans cannot be used to purchase second-hand and used equipment. This restriction will exclude many small businesses which simply cannot afford the high cost of new plant and machinery.
Finally, the SBDB program expires on March 31 of this year. The exceptionally short lead time and failure of the Department of Finance to communicate effectively the details of the program to financial institutions, and the virtually hopeless task of the head and regional offices of those financial institutions in communicating the details to their branches, dooms this program to failure before it even gets through Parliament. At best I am afraid it will be a program catering almost exclusively to the metropolitan parts of Canada, at the expense of small communities in rural sectors.
Our best and most optimistic estimate of the number of Canadian small businesses which will actually benefit from the SBDB is approximately 40,000. This means that 95 per cent of small businesses will be excluded from this legislation, that only 5 per cent of small businesses in Canada will benefit from this so-called great measure introduced in the budget.
Who benefits from SBDB? Under the legislation, interest payments on a qualifying small business loan entered into after December 11, 1979, will be treated for tax purposes as dividends. As a result the interest will not be taxable to the corporate lender, nor deductible as a business expense to the small business borrower. Because corporate lenders incur no tax liability on the interest received, they will be able to reduce the rate of interest charged. In essence the legislation not only
provides interest rate relief to qualifying small businesses, but also it provides a tax shelter to corporate lenders, in particular the hard-pressed chartered banks. The real beneficiaries of this particular legislation will be the chartered banks and lending institutions of Canada. They will benefit from this.
This ill-conceived measure which is part of the hopeless budget is ad hoc, band-aid, Fiberal legislation at its very worst. It does nothing to ease the burden of high interest rates on 95 per cent of Canadian small businesses. It will subsidize the chartered banks of Canada. At a time when the federal budget is running a record $14 billion deficit, unemployment is rising, and the economy is in a recession, it is not only fiscally irresponsible but socially irresponsible to require Canadian taxpayers to make up an additional $250 million shortfall in revenue when chartered banks and other corporate lending agencies are earning near record levels.
There are a number of proposals that the government could have introduced quite easily which would have provided high interest rate relief to small businesses across Canada, and to lead one to expect the lending agencies of Canada to carry some of the burden of combatting the cost of inflation and the cost of money during these times. But, no, the Fiberal government is asking the Canadian taxpayers to provide that.
In this discussion on the budget today one could comment on the lack of encouragement given to the housing industry in order to meet our housing crisis. One could comment on the serious cutbacks in social programs at a time when culture building in Canada is very important. Yet the kind of funding and encouragement some of the more crucial culture builders in our country need has been eliminated from the budget. It has certainly not been expanded. Consequently, that is the kind of leadership which is recognized as being provided by the Liberal government in Canada. As one of the richest countries in the world with unlimited possibilities, when optimism should be running extremely high, it is a time when this government has given the Canadian people little to be encouraged about.
The small business community are shrugging their shoulders in disbelief at the lack of direction in our economy. The housing crisis one finds in every sector of Canada looks toward the federal government for some leadership and finds that it is not forthcoming. More and more of the responsibility is being thrown into the private sector through programs such as the MURB program. Yet we see that this is a very simplistic and elementary way to approach a very complex and serious problem. We have made rental citizens in Canada second-class citizens.
We have made our cultural institutions second rate. Artists across Canada have been given little encouragement to develop the arts and their specialties. This is a time when optimism should be running at an all-time high, when people should be looking forward to a positive future, when there should be a definite direction given in the fields of agriculture, housing, and in the construction and fishing industries, and one could go on and on. Yet we find absolutely nothing. Although times
November 4, 1980

have never been better, citizens across the country are looking for some direction, looking for a vision of the future. In a country which has not had a vision for nearly a decade, yet the government presents a budget which is disappointing to Canadians. That is a travesty.


Hon. Judy Erola (Minister of State, Mines):: Mr. Speaker, I am indeed very happy to be given this opportunity to contribute to the budget debate. It is a debate on a budget which is clearly of great importance to all Canadians. We in the government are confident that the implementation of the provisions of this budget will ensure both economic and energy security for Canadians in the years ahead.
The government faced an economic environment which saw unemployment and inflation at unacceptable levels, and a rate of growth in the economy which was dramatically reduced due to a worldwide economic slowdown in general, and an expanding U.S. recession in particular. In an effort to counteract these various pressures the federal government brought forward what has been referred to as an energy budget. It is a package that realistically attacks the problems of Canada's current economic malaise at its source. It abandons the short term solutions of the past for longer-term structural realignments.
In this regard I refer to the major initiatives with respect to the Canadianization of the oil and gas industry, and other energy-related initiatives, which will guarantee Canada's energy security and the place of individual Canadians and Canadian corporations in the energy field.
In a world economy increasingly dependent upon the stability of oil supplies, the emergence of Canadians as their own energy masters is fundamental. I know that it is far too obvious to the hon. members opposite that this budget is first and foremost a good budget for average Canadians. The howls of indignation from the members of the official opposition are ample evidence that we have succeeded where they have failed. I regret that the hon. member for Kamloops-Shuswap (Mr. Riis) has left the chamber.
I had an opportunity over the weekend to speak to a great many average Canadians in my riding. They agreed with me that it was a good budget and were pleased that de-indexing did not take place, that RRSPs and, more important for those who wish at some time to own their own homes and save realistically for them, that the RHOSPs were also left in place.
A quick glance at the price components of the Crosbie budget of last December will indicate clearly that this government has the interests of low and medium-income Canadians very much in mind. During the term 1980-1984 there is a difference of over 60 cents in the price of a gallon of gasoline between our budget and that of the December Crosbie budget. The difference in the cost of home heating oil during the same period will amount to about 45 cents a gallon. The difference between our budget and the Crosbie budget in the figures on natural gas prices is a whopping $3.30 per thousand cubic feet.
In 1980 a typical Canadian consumer will spend $1,375 to heat his home with fuel oil and to purchase gasoline for his
The Budget-Mrs. Erola
car. This would cost $3,700 in 1984 if domestic oil prices were at international levels. However, under the price schedule of the national energy program the cost will be $2,520. That is $1,180 less than the world price-clearly a real saving.
These savings can be significantly increased if consumers take advantage of the assistance offered under the national energy program to reduce their energy costs by switching from oil to some alternate source of energy such as electricity, natural gas, or other fuel. Not only will the consumer benefit from the federal government's conversion grant, which may be as high as $800 with the federal government matching individual investment dollar for dollar, but the consumer will also benefit in the years that follow conversion from a reduction in energy costs.
Given the extent of savings on energy bills these expenditures are probably the best private investment opportunity in Canada. The pay-back will be quick, and the investment will continue to pay dividends in energy savings long into the future. I am sure if hon. members check with their constituency offices they will find out that requests for applications are pouring in.
To reinforce the conversion program the government is stipulating that no new residential unit built after July 1, 1981, will qualify for federal financial assistance or guarantees if it is heated by oil, unless no reasonable alternative is available. If the consumer takes advantage of the expanded Canadian Home Insulation Program under which the government will pay up to $500 toward the cost of insulating a home, then savings will be even further increased.
In my own region of Nickel Belt we are making advances in our utilization of alternate energy technology. The provincial government's 12-storey office building in Sudbury has been designed for very low energy consumption in an area of quite rigorous climatic conditions. Some 56 solar collectors on the roof will provide about 35 per cent of the domestic water heating requirements of the building. This is particularly appropriate in light of Sudbury's reputation-and I say this with some pride-as being the sunshine capital of northern Ontario.
Canadian consumers will also benefit from the creation of a Canadian alternate energy corporation, Enertech Canada, that has been established to support the commercial production of renewable energy and conservation technologies. Enertech Canada will support the work of Canadian firms engaged in the development and commercialization of these technologies by entering joint ventures, making equity investments, and offering marketing assistance. Initially it will be set up as a subsidiary of Petro-Canada, but after that period it will become an independent Crown corporation.
One option for conversion away from oil that is particularly important to me is that of wood, because in my region of northern Ontario wood does indeed play an important role. I might add that it has presented us with a major problem, that of the wood rustler, but that is a problem for the law. To be

November 4, 1980
The Budget-Mrs. Erola
eligible for a conversion grant from oil to wood, the new wood stove or furnace must displace at least 50 per cent of the previous oil heating capacity.
Work in the Department of Energy, Mines and Resources has been ongoing and has concentrated on the general area of efficiency and design of wood stoves and furnaces. The work has been conducted for the past two and a half years at the Canada Centre for Mineral and Energy Technology, known more popularly as CANMET. I would recommend to hon. members that they apply to the CANMET for further information on wood stoves and furnaces. We have quite an ambitious program. Also, they have done work with the Canadian Wood Energy Institute in an effort to standardize codes and building designs.
This government is committed to the principle of Canadian control in the Canadian industry, and its Canadianization measures are designed to bring this about without excessively overburdening the Canadian consumer. As stated in our national energy policy, Petro-Canada will be charged initially with the task of acquiring the Canadian operations of one or more multinational oil companies. As in the past the financing for such acquisitions will be obtained in large part by borrowing in the foreign capital market.
But additional infusions of equity capital may be required. To provide that capital the government will establish a Canadian ownership account. Revenue for the account will be provided by a Canadian ownership charge imposed on all oil and gas consumption in Canada, which will come into operation as the acquisition program progresses, and set at a level to ensure that the program will be totally self-financing and in no way affect the government deficit.
We have already heard the gloom and doom predictions of the possible repercussions of our Canadianization proposals. The industry is proclaiming that it will not have enough capital to finance expansion, and there is the muffled threat that the industry would indeed flee Canada. Well, I for one remain optimistic that the industry will remain. Canada offers very significant investment opportunities for all of the major oil companies, opportunities that are not available elsewhere in the industrialized world.
Clearly, Canada is late to arrive at the idea of national control over such a nationally vital industry as that of petroleum. Most OPEC countries have state-owned oil firms which are the main, if not sole oil producers. Most European countries have established state corporations of mixed ownership companies that are engaged in the entire spectrum of oil activities. In Norway, for example, Statoil now dominates oil production, and BNOC in Britain is of growing importance.
The potential of significant new finds on "Canada lands" in the north and on the north shore are very promising, but we must not place our future on a promise. Action must be taken now. The fact that the Canadian government has not been an active participant in the petroleum industry has had a detrimental effect on our economic vitality. Indeed, in the past the effect of OPEC price increases was to create a massive transfer of wealth from consumers to producers.
In our case most of these producers were foreign owned and, therefore, the wealth transfer was away from Canadians. In general, Canada's tax and pricing policies have provided the industry with the cash flow necessary to finance its expenditures. This means that the oil consumer and the Canadian taxpayer have financed virtually all of the substantial expansion of the industry, and the industry has been expanding into many diverse fields, most notably that of the mining sector.
The Canadianization initiative of the petroleum incentives program will reduce the relative cash flow of the foreign owned multinationals and will therefore place a constraint on their capacity to take over other firms. Thus, the spread of foreign ownership in Canada and in Canadian mining will be restrained by the measures in the national energy program aimed specifically at the oil and gas sectors. By placing Petro-Canada in the forefront of the Canadian petroleum industry and by instituting the provisions of our Canadianization package and our Canada lands provisions, we will be better able to control our own energy future.
Of primary concern to all Canadians is, of course, the fact that they will continue to enjoy a Canadian price for oil and gas that is substantially below that of international pricing. We have given the assurance that at no time will the Canadian price be allowed to rise above 85 per cent of that of world price. From my perspective, as the Minister of Mines, the national energy program, by maintaining this lower domestic price for oil, will support a generally higher level of economic activity and, consequently, will benefit the mineral sector.
While there has been some concern that activity in the energy sector will tend to put upward pressure on the external value of the Canadian dollar, a development that would hurt export oriented industries such as mining, there are indications that countervailing pressures will be at work. On the one hand the inflow of financial capital for the energy sector will tend to raise the exchange rate. On the other hand much of the machinery and equipment for new energy projects will be imported, and this will act to depress the external value of the Canadian dollar. Most forecasters think that the net effect will be a slight upward pressure, but a gradual one with the Canadian dollar rising to about 90 cents U.S. by 1984-1985, and stabilizing around that level.
However, over the next year or two the national energy program will tend to hold back this rise. It is agreed that foreign investors will be cautious about energy investment in Canada due both to the lower energy price under the national energy program and to the continuing energy debate between the federal government and the provinces. Moreover, the national energy program's Canadianization measure will involve acquisition of several large, foreign owned petroleum companies by the government, and this will exert downward pressure on the exchange rate.
The purchase of foreign oil and gas firms will have a direct, downward impact on the external value of the dollar, and there will be the further psychological effect that nationalization usually has on foreign investors. But since the Canadian mineral industry is essentially geared to world prices, the cost
November 4, 1980

advantage from low energy costs can be substantial. Energy intensive mining for iron, coal, nickel, asbestos, salt, gravel and sand is particularly advantaged by the made-in-Canada blended price.
The Canadian oil policy provides an opportunity to innovate and to establish new processes to penetrate new mineral markets. The Canadian mineral industry has been presented with an opportunity which it would not have if it were paying the same world oil prices as its foreign competitors. Clearly, the lower Canadian energy costs will offer Canadian exporters a very real competitive edge. Specifically in the mineral sector, the future looks bright indeed.
The vital signs for the continued growth of the mineral sector in the 1980s are very encouraging. My officials are forecasting an over-all rate of growth of between 2 per cent and 2.5 per cent per annum over the next decade in the non-fuel, mineral industry. This growth will require a total capital expenditure over the ten-year period of more than $42 billion in 1979 dollars, which will be twice that which was required in the previous decade. In current dollar terms, assuming an average rate of price increase of 6.2 per cent per year over the 1980-1990 period, this $42 billion capital requirement mushrooms to $63.5 billion. So we can easily surmise that activity in the mineral sector will provide significant stimulus to the Canadian economy in general. I am happy to report, after a visit with the ministers of mines of the provinces in Halifax last weekend, that their forecasts are just about the same.
In the immediate future there are a number of large projects which have been announced involving new mine development or mine expansion. To give just a few examples, there is a $300 million Texas Gulf expansion near Timmins, which is now nearing completion. There is the $62 million Noranda Gold Stream, copper zinc mine near Revelstoke, British Columbia, which is scheduled to start production in 1982; Billiton Canada Limited's $80 million Mount Pleasant tungsten venture in New Brunswick is also stated to be in production in 1982. After meeting with the New Brunswick minister I have learned that the $130 million Potash Corporation of America plant is now firm, and the $150 million Denison Mines Limited potash developments are on stream. To the west and to the north, Cyprus-Anvil's $240 million eight-year development and expansion program at the Vangorda and Grum deposit in the Yukon is firm. In addition, field work for the Potash Corporation of Saskatchewan's $600 million mine development at Brendenbury has begun. Furthermore, a number of smaller gold mining operations have been announced in Ontario.
In general, the pace of exploration in 1980 has been high across the country and I think that this bodes well for the rest of the decade.
Of course, as Minister of State for Mines I am especially pleased with the coal initiatives outlined in "The National Energy Program". The Government of Canada will increase
The Budget-Mrs. Erola
its support of studies to determine how best to mine and use this coal, both on the east and west coasts. Sufficient funds will be made available for exploratory tunnelling and assessment of the technical and economic feasibility of the Donkin Mine. Decisions on subsequent steps will be taken once uncertainties have been resolved concerning quality, characteristics, and market opportunities for this coal. The Government of Canada will see to it that development of this mine and other viable local coal sources is not delayed for lack of funding. Moreover, it will play its full part in overcoming the technical challenges confronting these developments.
In support of expanded coal mining ir. utilization activities, there will be a need for an additional $4 million during the next four years for coal research and development. Priorities include health and mine safety, coal beneficiation, combustion and utilization research, establishment of a coal testing institute and establishment of a continuing program in mining technology.
Cape Breton coal can make an important contribution to the energy supply of Nova Scotia and the maritimes. The challenge is to develop technologies to utilize that coal in more efficient and, I must stress, environmentally benign ways. To further that development the federal government will provide $50 million over the period 1980-1983, with provision for a further $100 million in 1984-1985 to support the development commercialization of new coal utilization technology. It is envisaged that the bulk of this funding will go to demonstrating fluidized bed combustion in a commercial scale generating station in Cape Breton which would directly displace oil-fired capacity. I would invite members of the House to visit our CAN MET Research facility to examine the demonstration of fluidized bed combustion which is taking place there. Alternative means to use coal in the production of liquid fuel will also be actively pursued. At present, that is being done at Bells Corners.
The crucial concern of the national energy program is with supplying Canadian requirements and reducing import dependence. Unlike nickel, copper, iron ore, asbestos, potash, zinc, lead, uranium and coal, there are no apparent long term exportable surpluses, and certainly not in the case of crude oil. It is therefore important that decisions to invest and explore, and the rights to economic rents, be vested largely in Canadian hands in the energy industry.
The evolution of the Canadian mining industry has witnessed a substantial Canadianization of reserves and production facilities. The domestic corporate giants in copper, lead, zinc and nickel have substantial Canadian ownership interests; for example, Inco-Cominco; Noranda and Placer. However, there is growing concern that the decline of the junior exploration section in Canada will ultimately cause a reversal of this favourable trend. The grass roots exploration and discovery process has become increasingly dominated by major resource corporations, and the large Canadian junior sector has been discouraged by what I and others consider to be inequitable tax incentives and toughened securities market regulations.

November 4, 1980
The Budget-Mrs. Erola
The Minister of Finance (Mr. MacEachen) was careful to point out that the elimination of depletion allowances for development expenditures or exploration would not-I repeat, would not-have an affect on the mining companies.
Of significant benefit to the mineral sector is the decision to provide a 50 per cent investment tax credit for investments in new plants and equipment for manufacturing or processing as defined under the Regional Development Incentives Act. The regions that will qualify will be determined on the basis of criteria such as high unemployment and low income levels by the Minister of Regional Economic Expansion (Mr. De Bane). Clearly, this will have a significant effect in qualifying areas, such as the northern territories where much new exploration and development is taking place, and in Atlantic Canada. Also worthy of note is the decision to extend the moratorium on northern benefits; indeed, it was obvious to me during my travels throughout the Arctic this summer that special consideration should and must be given to consumers north of the 60th parallel. Recognizing that this was the case, the government acted swiftly.
Indeed, the future looks very bright for the minerals sector in the coming decade, and there is every indication to assume that the same will hold true for the rest of the economy once we come out of the current recession. The Canadianization measures will doubtless have an effect on certain investors, but the positive image of Canada as a stable country for investment opportunity will remain intact. The stock market experienced downward movement last week immediately following the budget announcement, but as of yesterday the market was again gaining strength.
The budget was an energy budget because Canada needed to face up to its energy security needs. The Canadian government did not shy away from the tough decisions that were needed, and all Canadians will be better off as a result. I am optimistic that if we give the budget measures a chance to take root in our economy, they will provide the needed stimulus for continuous growth well into the next decade.


Some hon. Members:: Hear, hear!


Mr. Ellis:: Mr. Speaker, a point of order-


Mr. Oberle:: Mr. Speaker, a point of order-


The Acting Speaker (Mr. Blaker):: The hon. member for Prince George-Peace River (Mr. Oberle) on a point of order.


Frank Oberle: Mr. Speaker, I wonder if the hon. minister would permit a question with regard to some of the comments she has just made. It was a very interesting speech.


Judith A. Erola: Yes, Mr. Speaker.


Frank Oberle: Mr. Speaker, the minister is a very prominent member of the cabinet and she too has used the terms "blended price" and "Canada made blended price for petroleum". For the edification of all hon. members I wonder if she could tell us what that means. We all understand that there are different price structures. There is the domestic price which
emanates from Alberta which is now $16.75, and there is the tar sands price, and then there is the price of imported oil. There is control of the domestic price and that price will be increased occasionally. We have control over the tar sands price, but no control over the imported price. I should like the minister to explain the difference between the 85 per cent of a blended Canadian price, one component of which is imported oil over which we have no control, and the price in the Crosbie budgefwhich was 85 per cent of the world price.


The Acting Speaker (Mr. Blaker):: Order, please. Perhaps the hon. member could get to the question.


Frank Oberle: Mr. Speaker, I should like the minister to define the difference between the Canada made blended price and the 85 per cent of'worid price in the Crosbie budget.


Judith A. Erola: Mr. Speaker, the hon. member left out one component. There are a number of prices included in this. There is the $30 per barrel price, the $38 for the tar sands oil, and the $16.75 which the hon. member mentioned. Of course this will all have to respond to the price of the oil being imported.


Frank Oberle: But you have no control over it.


The Acting Speaker (Mr. Blaker):: The hon. member for Prince Edward-Hastings (Mr. Ellis) on a point of order.


John Raymond Ellis: Mr. Speaker, I wonder if the minister would permit a very brief question. _


The Acting Speaker (Mr. Blaker):: Order, please. I permitted the previous member to ask a question and the minister to give an answer because it was within her allotted time. We are past the time which has been given to the minister for purposes of the debate. I need unanimous consent of the House now to permit a question. Is there unanimous consent?


Some hon. Members:: Agreed.


Ian Deans: No.


Stanley Kenneth Schellenberger: Mr. Speaker, as 1 rise to speak in the chamber today as an Albertan, I do so in the sense that the people in my riding feel even more alienated than they did a few weeks ago.
As we look at the history of the native people, education was passed down by direct conversation from father to son from one generation to another. The same is true in western Canada. People from the west who have lived through many direct impositions placed by the federal government or the central establishment upon western Canadian development have also passed this information down through the generations, so that we who are third and fourth generations are very aware of it. It is interesting to note as other people move in from other parts of Canada or other parts of the world that it does not take many months before they, too, get that same feeling.
November 4, 1980

I can take you through the history, and other members have, about when we were trying to establish our own plants for barbed wire and milk pails in the early part of this century. Prices were lowered by those in eastern Canada until our plants were driven out of business. The prices were then raised to recoup their losses, and we had to put up with that.
The minister for manpower said the federal government had helped us through during the depression. We do not remember that. We remember how the eastern banks seized our lands when many farmers had only one year, or, even in some cases, one month's payment left. We remember that. After that came the period of the freight rate problems and the tariff arguments which,continued for years for years. These are all things which are embedded deeply in the feelings of western Canadians.
In 1949 we discovered oil in Leduc. Westerners attempted to develop those fields. We came to this part of Canada with our hat in hand asking for capital to develop our industry. Our premier was turned down because oil could be purchased cheaper offshore than it would cost to develop the industry in Canada. We had no alternative but to go to the United States because we wanted to develop the industry. We now get the feeling over here that for some reason we westerners have no choice in the matter of foreign ownership. We lament that fact now because we had no choice at that time. However, as we develop funds to buy back our industry, we find a direct federal imposition on our capital that we, as Albertans or western provinces, could build up.
In the western opportunity conference, the Prime Minister (Mr. Trudeau) at that time said that a plant such as Petrosar would not be built because we had a comparative advantage in the west to develop petrochemicals from natural gas feedstock which is abundant in western Canada. Six months later Petrosar was developed and built. It uses 120,000 barrels a day of western oil, which is a commodity in very limited quantity. We find that large quantities of propane and barrels of oil which cannot be used, are being sold off at world prices, which almost allows the plant to buy the oil from western Canada for nothing. This is difficult to understand when we have an abundance of natural gas in plants in Alberta that were not allowed to produce and to start because of that very plant. For instance, there are plants in Medicine Hat, and Fort Saskatchewan, and one is opening its doors in Joffre in my area. That sketch of history brings us to the present time. I have missed a lot, but I do not want to use this as the central theme of my remarks.
Without the consent of any of the provinces in the west, the constitution is proceeding and, among other things, an amending formula is being suggested which will allow us to be a second-class province in this society for a long time, unless we change it by a referendum or by the consent of the two central provinces.
The Budget-Mr. Schellenberger
Now we come to this budget which, again without the consent of any of the people in the provinces of Alberta, Manitoba, B.C. or Saskatchewan, directly imposes taxes and takes wealth away from the only growth industry in this country. If you ask me why western Canadians, and particularly people in my riding, feel more alienated than ever before, Mr. Speaker, that is the reason. The impact of this budget on the individual in Alberta is tremendous. In a sense it is an expropriation of a resource and the wealth from that resource rather than the sharing of it. Those are words often used by others on the other side. Sharing means you have the consent of the people of that area to share. We would willingly do that.
For a government to say it has run out to Alberta with proposal after proposal for an energy agreement, all of which were turned down, does that mean all are totally unacceptable thus giving the government the ability to impose its will on a province or an area of this country, Canada?
I want to take hon. members through the four areas of the budget which are offensive to people in my area, and I am sure they are offensive to people in most of western Canada. What is the export tax? The export tax was put on oil in western Canada in 1973 and 1974, a surprise that our government knew nothing about, and we as members in this chamber knew nothing about either. After much argument and discussion, most of the money was returned to the province. Now we find once more, with great objection from the people of the provinces of the west and the premiers of those areas, an export tax is imposed upon western Canadians.
The Alberta treasurer stated a week ago that an export tax would be totally unacceptable and wrong in principle. He said that it would amount to a confiscation of a provincial resource. Often it is not clear why we in the west are so upset about an export tax but our premier stated, and I think he stated it very clearly in a speech in Edmonton on August 16:
What are the commitments we look for on the other side? We look for respect for the ownership rights of our province by not imposing an export tax upon natural gas, or any other punitive taxation on an industry.
1 want to say a word about the natural gas export tax because I think it is misunderstood. It is the very heart of the difference between the Ottawa government and ourselves. Why do we feel so strongly? Section 109 of the BN A Act leaves the resources to the provinces. Section 125 precludes Her Majesty in right of Canada from taxing a province. How does a natural gas export tax work? Many hon. members probably think, unless they have studied the question, that the tax is simply added on and the buyer pays. That is not so. The buyer does not have to pay. The United States is not buying now. In British Columbia sales of natural gas have gone down this past year by approximately 45 per cent because we have priced ourselves out of the market. The United States does have alternate supplies when prices increase. The result of the federal export tax is a definite and significant reduction in provincial returns from the sale of a depleting asset. That is what a natural gas export tax is. That is why we feel so strongly about it.
Not only that, but it means that when a tax is imposed without the consent of a province there is the feeling that that revenue is confiscated from the people of that province who, I believe, have an ability to decide in what direction they want


November 4, 1980
The Budget-Mr. Schellenberger to spend that revenue: in our province and in the west. We have in the budget a revenue policy. The budget basically established a revenue policy for this government of direct take from one province. As you look at the taxes and add them up across the country, almost 80 per cent of the revenues coming to the federal government in this budget come directly from one province and the industry that has been established there.
The second area that we find offensive about this budget is the oil pricing formula. Again, it has been imposed upon the people of Alberta and the west without their consent. As I said before, the federal government claims to have repeatedly gone to the west with proposals. When we were the government, we did the same.
Through a series of meetings, we were able to work out a pricing agreement which was almost signed. That means the feasibility of it was there. It was proved that it was possible for two governments, federal and provincial, to sit down and work out a pricing arrangement that was acceptable to both.
We now find the Petroleum Administration Act imposed upon us and a price set without our agreement. We are not opposed to sharing the wealth of a resource. We have done it graciously in the past. Billions and billions of dollars from oil and gas which could have been a part of the sharing agreement between the provinces and the federal government were given up because we kept our prices so low. Now the price is established. We have a new government in power, a government that was not prepared to take an agreement that had been worked out, even though the province of Alberta was prepared to make some changes and drop the price from 85' per cent to 75 per cent of world price. It rejected that agreement which was worked out and imposed its will upon the people of that area.
I want to refer to the oil export tax and the natural gas export tax as it applies to native people. I am very familiar with that. I have watched what it can do to Indian reserves in my area. They are the innocents in this pricing arrangement. They finally found some revenue that might be used to establish priorities for their future. They found, as in 1974 when the oil export tax was imposed upon them, that the revenues were not returned. For some reason, it was different than with provincial governments.
That money is still sitting in the federal treasury and the provincial treasury in Alberta. It has never been returned to the native people of the producing bands. I asked many questions of the ministers. They never refused, but they never agreed. Some $9 million could be put to excellent use by native people in three western provinces, but has been sitting in the treasury since 1974 and not made available to those people. They have the highest rate of unemployment of any group in Canada. They suffer tremendously socially across this country. When they have a resource they can develop in the future, a good deal is taken away by the federal government.
The same is true of the natural gas export tax now being placed upon these reserves. Under the present revenue-sharing
agreement this coming year, producing bands in western Canada, some 19 of them, can see between $43 million and $47 million. They made plans for that. They set those plans out very specifically based on that revenue and revenue they could receive as the price was to increase for oil and gas. They now see one-sixth of that revenue being taken away from them by the federal export tax.
I asked the Minister of Indian Affairs and Northern Development (Mr. Munro) whether he thought he was honouring his faith with the Indian people under sections 87 and 90 which state that native people or bands are exempt from direct or indirect taxation. He said no. I asked him whether he felt they should desist from imposing this tax on native people because in addition to being illegal, this group above all others needs this revenue and the pride of using their own revenue to establish programs in future. He said he had to study that further.
The history is there from the oil export tax right up to the present time. Producing bands and those supporting them, and I believe that is everyone in the 500 native bands in this country, believe this form of taxation on native people is wrong and should not be used. If it is, they believe the money should be returned. There will be tremendous pressure on the government in future from native people and members on this side of the House who sit on the Indian affairs committee.
I want to get back to the oil pricing formula I spoke about before. 1 know many figures have been quoted from the Crosbie budget and the MacEachen budget. As we look at the wellhead pricing formula in our budget and the pricing formula of the Liberal budget, in 1984-86 the amount is basically about the same. The difference is, as we increased the price in our formula, the amount that was scheduled for the provinces, the companies and the federal government under the $4.50 per barrel increase by 1981 with our budget, the provinces would have received what they believe is rightfully theirs on the first $2 and 50 per cent of the next $2.50 by agreement under the ownership requirements of our constitution, a direct share of the royalties on the total amount.
Under this budget, they receive that on the first $2 and nothing on the next $2.50 which is a direct tax to be used for these great schemes which are being developed, such as the $4-billion trust fund or development fund for western Canada. It smacks in our face. It basically says that the people of a province do not have the ability to use their money to develop western Canada, that the federal government can recycle it in a better fashion for them. It will take a long time before you can convince the people of Alberta that that is the case.
The third area is the tar sands and heavy oil proposals. These plants are essential for energy self-sufficiency in Canada. Under this budget, the feeling now being perpetrated in Canada between the federal government and the producing provinces is such that it is doubtful whether these projects will go ahead.
The suggestion by this government was that $38 plus the CPI was significant to get the Alsands and the heavy oil plant at Cold Lake to go ahead. Representatives of both these
November 4, 1980

companies appeared before the natural resources committee and both said it was not sufficient to start up. The basic reason they gave was that the CPI was not a satisfactory figure as far as inflation in the north is concerned.
My friend from Peace River put together an excellent paper which gives some of the reasons for that. When we were in government we recognized that we had to pay our employees in the north extra living costs because inflation is higher there. No company will sign an agreement when their costs are going up faster than their return based on an inflationary factor that they know from experience through Suncor and Syncrude is not adequate in the north.
That is just one reason. When I am building a fence with my neighbour, if we co-operate, we build that fence very quickly. We help each other. We put in the posts and string the wire. However, when there is not co-operation but confrontation, it is a great deal more difficult to get anything done. That is what has happened with regard to heavy oil development. There is no co-operation. Under the last budget or the pricing formula which was worked out, there was co-operation. Things were going ahead, and would have gone ahead if the signature had been put on the dotted line. I regret that we had to be involved in an election before we were able to do that because those plants are essential to energy self-sufficiency. In addition to that, tremendous employment can be generated by these plants, not just in Alberta but right across this country. That employment is desperately needed at this time. These projects cost $8 billion plus apiece. When we apply a multiplier of 1.9-which is an accepted one-to that, we get $6.2 billion accruing to Ontario in direct investment and $6.7 billion to other provinces including $2.9 billion to Quebec.
The reason is that most of the steel, trucks, cars, valves and pipe is developed in industrial central Canada. The impact on industry in Ontario-and I am using figures from the Alsands proposal put before the committee-would be as follows: $800 million for iron and steel; $370 million for metal fabrication and machinery; $325 million for transportation equipment; $740 million for manufacturing and processing; $370 million for finance-I expect it is interest-and $750 million for trades and services. There would be 10,000 construction jobs at the Cold Lake project which could go to Canadians. Most of them would be residents of other provinces because we simply do not have in Alberta or Saskatchewan the manpower to meet those needs. Those are figures just for the Cold Lake project. Similar figures could be applied to the Alsands plant.
As I see it, we need that investment and that employment today, but those plants could very well be shut down for a number of years.
I could not believe what I was seeing when I looked at the provisions in this budget which apply to the Suncor plant. Suncor was the first company or group of people prepared to take the risk of developing the tar sands. That risk was taken. The company was almost jeopardized. It lost millions and millions of dollars year after year establishing the technology
The Budget-Mr. Schellenberger which is now being used by Syncrude, which will be used by the Alsands people and which we are now attempting to sell to Venezuela and other countries. Suncor pioneered that, and now what is the reward? Instead of the same prices offered to other companies under this budget Suncor will get $16.75, which puts the company at a marginal level again. It cannot even recoup the losses in the profit picture. Last year was the first year it broke even and made a few dollars profit.
If one understands the area at all, one knows that they are mining the most feasible area at the present time. As the operation gets to the outskirts of the mine, the cost of bringing the tar and sand to the plant goes up. I spoke with representatives of the company, and they told me that some 90 million barrels of synthetic crude could be lost to Canada because they simply cannot mine for this price of $16.75.
Instead of rewarding initiative and allowing that company to develop its mine, the clamps are being put on by a federal government which, I believe, does not understand and never has understood the development of tar sands and the development of the heavy oil industry in western Canada.
The last policy we find offensive in this budget is public ownership. We Albertans over the years have felt comfortable with the private sector developing our oil and gas industry, our processing industry and many other industries in the province. Our farmers worked hard for every dollar they made for years and years. In the 1950s we asked for Canadian capital to develop our industry, but now that we finally have some dollars from the Alberta Energy Company and others so that we can get involved in tar sands plants and so forth, we have all these taxes taking away our revenue in order to allow Petro-Canada in because it has some great plan to take away the slack from the private sector or gather up the slack from the private sector and provide all this energy self-sufficiency in the future. It will be a number of years before that takes place. In the meantime, energy self-sufficiency may go out the window.
The technology and expertise which have been developed in our province over many years will be attracted away by the many megaprojects around the world which are asking for people who are in short supply. They are bound to leave the province. We will lose them. The bottom line is that we would rather have development by the private sector, as was the case with Alberta Gas Trunk Line. Albertans and westerners were allowed to buy shares, and they lined up at the treasury branches to buy them.
There is another example where the Alberta Energy Company offered shares to Albertans so that they could participate in the development of the industry. They were bought up within days. We would rather buy off these companies through incentives to the individual to buy than through Petro-Canada. We would be much happier with that kind of program. So I get down to the bottom line. Westerners would rather have the opportunity to use the money from their resource, or a fair share of it, to develop western Canada rather than having the federal government develop it.

November 4, 1980
The Budget-Mr. N. Lapointe
When we worked out that agreement a few months ago, the province of Alberta offered from its share of the revenue to commit $2 billion in unconditional funding over five years to improve substantially the capacity and efficiency of the rail transportation system in the west. The Minister of Employment and Immigration (Mr. Axworthy) said a little while ago that Alberta cannot do that. He would rather take that money and recycle it through the federal government because he thinks it has a better idea as to how it should be done.
Alberta's commitment also includes the commitments which were made to promote the substitution of natural gas and oil, to invest in the equity and debt in oil sands plants, to put in the infrastructures for those plants, which costs billions of dollars for each plant which is developed, to continue exploration and development and enhanced recovery and to provide equity and debt financing for the Quebec and maritime portions of the Q & M pipeline. This is over and above the loans to provinces, the amounts of money which are put into housing in Alberta and so forth through the Heritage Trust Fund.
I am running out of time. I think I have indicated for the record why the constituents of my riding feel so frustrated about what has gone on here in the past two weeks. Now they must face the uncertainty of this budget. At the weekends, truck drivers telephone me about losing their jobs and about not looking forward to making their payments this winter. This is because of the downslide of the oil industry. When we cut off half the budget, even if it is that of a multinational company, it takes years to recover. No grants scheme can move those small companies which have been farming out to international companies up to major developments in drilling within a matter of months. It is impossible. So the jobs go out the window this winter, and people will suffer. Surely if the government is going to put in this program, even though I disagree with it, an orderly plan could have been developed so that people would not have to suffer as they will under this plan.
The only thing I found in this budget with which I could agree is that antique cars, of which I happen to be a buff, will be allowed in free.


Mr. Normand Lapointe (Beauce):: Mr. Speaker, first of all,
I would like to thank you for this opportunity to take part in the budget debate in the House of Commons. I would like to begin by saying, if I may, how grateful I am to all those who helped me to become the new member of Parliament for Beauce.
I also wish to thank sincerely and pay homage to all my colleagues who have been of great assistance to me in learning the ropes of parliamentary work. I can assure you, Mr. Speaker, that I am determined to continue to learn so that I may give full satisfaction to those who were willing to have confidence in me.
I was very proud to arrive in the House of Commons last February as I had the honour to represent Beauce at a difficult time for our economy.
I would not want to begin my speech, Mr. Speaker, without saying a few words about a constituency which, only 30 years ago, was nearly exclusively agricultural and which has now become a very important economic development sector in Quebec.
The monthly financial and economic periodical Finance devoted several pages to this area in its edition of August 18. In an article entitled "Beauce: A very human miracle", it said the following: "In the last few years, Beauce has become the favorite of the Quebec economic world." Indeed, the Japan of Quebec now has over 400 small and medium businesses and a new business is established nearly every week.
The people of Beauce have set themselves to the task and have been able to develop a centre with many economic activities of which they are very proud.
The unemployment rate is lower than in other areas of Quebec, as it was about 8.8 per cent in 1979 while the rate for Quebec as a whole increased from 8.1 per cent to 9.5 per cent during the same period. However, I can assure you that this did not come easily.
We succeeded, I think, in keeping an undaunted spirit of solidarity, and unmatched spirit of enterprise and a remarkable sense of entrepreneurship. I was born in Beauce county where I still live at the present time. There I have seen spring up several prosperous businesses typical of our area. Just to give you an example of the business acumen of the Beauce people, ever since its establishment in 1969 until August 30 of this year, the Department of Regional Economic Expansion studied 199 files. It allocated $19 million in direct grants. To appreciate the over-all picture of the investments during that time, $81 million in private investments must be added to that figure. In other words, by itself the DREE contribution amounted to 23.37 per cent of the investments in question. This resulted in about 3900 new jobs. The Beauce area enjoyed a significant economic development as well a net increase in the standard of living of its people during the past few years because of the takeover by the Beauce businessmen, farmers and workers. All the economic factors regarding available income, retail sales, industrial production and employment went up considerably in relation to the national average. Surely, these advances were the result of the effort of those directly involved in the Beauce economic process. However, the concerns about the high rates of inflation, interest and unemployment, do remain. People are still concerned.
In view of the over-all situation of the Canadian economy, I should like now, Mr. Speaker, to direct my remarks to the various components of the budget introduced by the Minister of Finance (Mr. MacEachen) a budget that we were all waiting for, especially the press which had predicted doom and
November 4, 1980

gloom. On the contrary, the Minister of Finance showed realism and common sense. Without delusions he gave us a realistic analysis of the economic situation of which all the indicators had been carefully reviewed, in order to submit to the Canadian people an assessment which although perhaps a little on the dark side was not on the other hand deceptive. The minister made us quite aware of the present difficult economic climate from which we hope to see a recovery after 1981.
As a former insurance agent 1 have always tried to help people take precautions even though some people find it funny, but it is a fact that in the field of insurance we help people take precautions in order to be able to face many eventualities just as the Liberal government has made itself the sponsor of a set of measures which will reassure Canadians. In order to reach energy stability, an ambitious energy program has been devised. I hope the hon. member who had the floor before me will be pleased to hear that because he was asking for a government policy based on energy needs and said as reported at page 2333 of Hansard for December 13, 1979 and I quote:
Mr. Speaker, what we needed was a budget which would have helped us fight against unemployment and inflation, improve our deficit in the balance of payments and provide a true energy program.
In that respect, 1 am happy to indicate that some of his wishes have been answered. The Liberal government has indeed embarked on a plan where the focus will be on satisfying the prerequisites for self-sufficiency, to be achieved by the end of the decade. Mr. Speaker, may I call it six o'clock? With your permission I would like to continue at eight o'clock.


The Acting Speaker (Mr. Blaker):: Order please. It being six o'clock, I do now leave the chair until eight o'clock this evening.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Normand Lapointe: Mr. Speaker, I want to reiterate my total endorsement of this direction because it reminds me of the Beauce region. I have seen hundreds of industries "made in Beauce" develop and I would be truly proud if Canadians could take over at least 50 per cent of the oil and gas production by 1990.
Secondly, the former member for Beauce will be glad to learn, in light of his heavy criticism of the budget deficit, that my government made a formal commitment to progressively decrease the deficit over a three to four-year period, which will help to reduce inflation. The deficit will go from $14.2 billion
The Budget-Mr. N. Lapointe
to $11.8 billion in 1983 and 1984, which will allow for economic recovery.
Once again, Mr. Speaker, I would like to speak of the liberal energy program. This is an extremely attractive program, in my opinion, because it is the first true effort made by a government to secure guarantees for supplies and a fair distribution of energy resources in order to withstand the instability of world prices. Canadians can equip themselves with the necessary tools. Our government is taking a first step towards reducing our dependence on foreign oil and thus toward reducing the danger of economic upheavals in our country. My government has also kept its promise in deciding wisely not to push Canadian prices to world levels, in order to avoid constant increases in those prices.
The Liberals are acutely aware of the fact that succeeding price increases will not make the "Beaucerons", for instance, become aware that a new era is starting, one in which substitutes for oil are seriously considered; instead, a budget providing for fixed but moderate increases will allow the people to adapt in a less radical but more desirable way.
The energy problem is now of concern to all Canadians. We are all aware, as our government is, that we will have to pay more for oil and natural gas. But, at least, thanks to the sensible policy of this government, we will be paying prices that are clearly lower than those paid by consumers in other industrial countries, and lower than those advocated by the Crosbie budget.
Through their principles of justice and equity, the Liberals are also promising to grant all Canadians an equal share in the revenue and benefits through a price system that divides them equitably. We find the very essence of that principle of sharing in the following excerpt from "The National Energy Program" as given on page 13, and I quote:
The citizens of Canada and their national government, have played a major role in fostering the development of the oil and gas industry, and deserve to share in its benefits,
Mr. Speaker, thanks to those various energy measures such as moderately high prices, a fiscal policy, a spending plan and federal action, I am sure that we will succeed in instilling in our constituents a new philosophy, if I may say so, dealing with our natural resources which are still quite numerous in some sectors but rather scarce in others as is the case for oil.
The gradual price increases of oil, that is less than $4 a barrel for 1980 and $4.50 for the years 1982, 1983 and 1984 matched with moderate steps are an indication that the government has abided with its commitment of the last election campaign.
When I ran last February as a candidate under the Liberal banner in Beauce riding, I was intimately convinced that the Liberal party was the most equitable party. It has demonstrated that it is indeed the most equitable party by increasing the price of gas by 13 cents a gallon instead of 32 cents a gallon,

November 4, 1980
The Budget-Mr. N. Lapointe
as would have been the case under the Progressive Conservative budget.


An hon. Member:: That is social justice!


Normand Lapointe: Mr. Speaker, I am not disappointed with this budget, and I think that numbers of my Beauce constituents feel exactly the way I do. The Liberal party has not hurt low-income Canadians. I am no tax expert, but I have enough critical sense to realize that this budget speech benefits our less fortunate taxpayers. Mr. Speaker, before the budget was presented, the people I met in my constituency would ask me whether the tax increases would be significant. I must say that I am happy to report to them that the Minister of Finance has thought of them, that he has ordered no income tax increase, and that he has maintained the indexation system, contrary to what a great many opposition members had predicted.


An hon. Member:: It is a tax reduction.


Normand Lapointe: Among the various types of fiscal means used, the Liberal government provided several, such as the tax reductions for multiple unit residential buildings, the extension of the small business development bond program, which will bring happiness to the small and medium-sized businesses in my riding who will use them to finance their equipment at a reasonable cost. As far as my riding is concerned, Mr. Speaker, it will surely make everybody happy, because, as I said at the beginning, Beauce still is, and I do not want to repeat myself, the riding with the greater number of small and medium-sized businesses.
Another proposal about which I am enthusiastic, even though it does not concern my area where small business dominates, is the investment tax credit of up to 50 per cent for industries wishing to establish themselves in the poorer areas in Canada and where there is high unemployment and low income families. I recognize here the good work of my friend, the Minister of Regional Economic Expansion (Mr. De Bane), to whom I give credit for his spirit of fairness. His smooth collaboration with the Minister of Finance proved that the national government was particularly concerned with the regional disparities in this country.


An hon. Member:: Liberal policy!


Normand Lapointe: On the other hand, some farmers in my riding complained to me, last weekend, that the government had not included any measure to help them. It is true that the farming community has not received particular attention in this budget, but we must realize that by dealing primarily with the middle-term energy problem, the government will ease the lot of farmers who will be able to take advantage of lower energy costs.
Mr. Speaker, in concluding this first speech of mine, I would like to say how proud I am to belong to a party which has seriously dealt with our first priority nowadays, which is energy, while giving middle and low-income families a breathing spell, because they will not have to face higher oil prices or major tax increases. My government has also devised efficient economic assistance programs to provide Canadians with the necessary means to withstand the effects of the present economic conditions.


Mr. Bill Domm (Peterborough):: Mr. Speaker, in a few moments I will address some of the points made by the hon. member for the Liberal Party who spoke earlier. I will deal with his contentions that 'farmers will benefit', 'people will accept moderate price hikes' and 'there are no massive increases in taxes'.
What I am most concerned about in this session of Parliament is that the Liberal government is attempting to put into place the means to create a socialist republic of Canada. It intends to impose this plan initially through the budget and in concert with the national energy plan and the patriation of the constitution. Its primary short-term goal is to remove from the oil producing provinces their principal source of revenue, their energy royalties and transfer them to the federal government. It is transferring exploration and recovery incentives to Canada lands, which, significantly, include offshore regions, and more revenue from oil and gas will thus accrue to the federal government. It is reducing by 12 per cent the share of the oil companies, who are already leaving for the United States and other parts of the world. This is in the Liberal government's interests. Indeed, they propose to decrease incentives and subsidies to companies that have minority Canadian ownership interests, which will lower their market value and thus make a takeover bid by the federal government through the Canadian ownership account easier in the future. At the same time the Liberal government, through these measures, seeks to increase its proportion of oil and gas revenue by taking revenue away from the provinces.
As nationalization of oil companies located, for example, in Alberta, increases, provincial revenues decrease because federal oil companies do not have to pay provincial royalties no matter where they are located. Consequently, the federal Liberal government is determined to nationalize the Canadian oil industry by 1990. The immense price to pay for this-it will cost about $10.5 billion to buy just one firm-will be borne directly by the people through the Canadian ownership account.
The proposals contained in this budget seek to change the fundamental nature of our entire country. They seek to perpetrate an irrevocable shift in the relationship between the two levels of government in Canada. They seek to take advantage of the westward economic and demographic trends in this country in two ways. First, by removing the initiatives and awards of such shifts from the western centres to the benefit of
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the central government and, second, by disowning the promise made to the province of Quebec and to the rest of this country of a new federation. That promise did not include the molding of a socialist republic. This is not the true destiny of Canada, despite the socialist conversion we have undergone under successive Liberal governments which have imposed socialist programs upon the people and have caused the people to pay for them without having the courage to call them such in election campaigns.
An obvious example is the increase in unemployment insurance premiums. Call it what you will, it is, in fact, a tax hike to finance another abortive social program. Instead of Lighting to increase employment through strong, stimulative measures, the Liberal government merely puts a salve on the completely unacceptable unemployment situation by guaranteeing UIC cheque payments.
This increase of one-third in unemployment insurance premiums to be paid by every single worker in Canada will not only directly increase taxation but will have a direct and adverse effect on the economy by markedly reducing the real disposable income of Canadians. The increases to be paid by the employers will, of course, be passed on yet again to the Canadian consumer through higher prices of goods and services. In addition, it further weakens the international competitiveness of Canadian manufacturers.
There has been a shift in recent years of the needless burden of UIC payments from the government to the payroll deductions of employees. The workers who can least afford to pay are, therefore, supporting the masses of unemployed who are themselves out of work because of the failure of this government to take measures to stimulate the economy. In short, the Minister of Finance (Mr. MacEachen) with his increases in UIC premiums has shifted financial responsibility for the maintenance of the unemployed from the government, whose problem and program it was, to the working people whose program it has become, whether they like it or not.
What consequences can the working people of Canada expect from this measure introduced by the Liberal government? This is distorted and aborted socialism making the poor pay to subsidize those who are even poorer. How does the government propose to stimulate the economy and protect and create jobs? Would the Minister of Finance care to ask the workers in Windsor who lined up in their thousands three weeks ago in the hope of a few hundred jobs, or the few maritimers of Sydney Steel who were recruited by Fargo in the Yukon, whether they would rather receive their UIC cheques from their working brothers and sisters or whether they would prefer a stimulative economy, an economy that attracts investment, not drives it away, an economy that seeks to encourage and not to restrict Canadians?
What is happening here is that the unholy Liberal triumvirate in charge of finance, energy and the constitution is attempting to snatch financial power and constitutional power from its traditional seat in the provincial legislatures. It is
The Budget-Mr. Domm
doing this, or at least it will seek to do this at the expense of the unity of this country. And for what? For the sake of a grand design born in the presumptuous mind of one man who, aided by his loyal and partisan engineers, is determined to alter the basic and fundamental historic association of this country, of this constitutional federation, of this democratic union of co-operative levels of government.
Already, the Prime Minister (Mr. Trudeau) has caused seven of our ten provincial governments to express opposition to his plans in the courts. Already he has caused a cutback in oil production in our most energy-productive province. This is not the Middle East. We are not accustomed here to wielding economic sticks to secure territorial rights, to enhance wounded egos or build insensitive sheikdoms. We are not accustomed to creeping, disastrous socialism which promises to bankrupt this country, impoverish our people and alienate the industries of the world from our shores. We are not accustomed to a central government requiring our people to pay for nationalized industries which they neither want, need, nor have coveted.
Where the Liberal budget bases belief on an illusion, the Conservative budget based belief on a specified energy tax credit worth $200 or more to an eligible family. The only thing families are eligible for now will be to pay by 1983 $350 more per year to heat their homes as a direct result of these newly imposed taxes; to pay $1.09 more per gallon to fuel their cars, to pay $70 per year to heat their homes with gas-an excellent example of the government's giving with one hand and taking away with the other.
We must not forget that natural gas is itself a non-renewable energy source. Mr. Speaker, the people of Britain will be pleased to tell you how all through the 1960s they were encouraged through grants to convert to gas and how, just last spring, they suffered a 60 per cent overnight increase in the price of their gas which, by this time, was virtually in every British home. Beware!


Ian Deans: Was that a Tory government?


William Henry (Bill) Domm: Several provincial governments have already taken steps to combat the damage done to the provincial economies by this government. Ministers over there attempt to rewrite the constitutional arrangement, not only on the patria-tion front, but through these insidious attempts to rob the provinces of their economic initiatives, thereby negating the strength, importance and rightful influence of regional selfdetermination, a concept deeply held and hard fought for in this country's history.
Where in all this does Ontario lie, if that is not too obvious a question for the Liberals? If this is a true budget, if it purports to address the totality of the Canadian economy, if it is not a thinly veiled attempt at political and economic dominance, what does it do to advance the interests of the country as a whole? How does it address the non-transitory needs of a central Canada or the permanent and enduring needs of one third of Canada's population within Ontario's borders? Given the immense resource riches of Ontario, which differ only in

November 4, 1980
The Budget-Mr. Domm
kind and not in quality or quantity from those of other provinces, how can the Minister of Finance justify his marshalling of revenue from one particular resource?
We in Ontario, particularly the members of Parliament from the province, should ask ourselves when will he be instituting a hydro export tax, a coal export tax, a uranium export tax, ownership funds to nationalize our copper, iron ore, zinc, silver, gold, platinum, and indeed, all the other resources Ontario claims-or rather has no need to claim as they are constitutionally protected to develop and market as Ontario sees fit. Why does the minister not penalize Ontario's resource markets by adopting punitive measures against her foreign ventures and her development capital?
Why does the Minister of Finance not reduce Inco's net profits overnight by 12 per cent? Why does he not scoff with his colleague's bravado at the possibility of the mineral companies leaving our borders for more hospitable political atmospheres elsewhere? Watch out, Ontario! Perhaps consideration is even now being given to pegging the selling price for nickel at 85 per cent of the world price.
Ontario, beware of the socialistic trends clearly evident in this Liberal budget. What is happening in the west could be the forerunner of things to happen in Ontario. The government is charting a dangerous course in this respect. The people of Canada must realize that this is a punitive exercise, not only upon them through their tax dollars, but against their futures. We may be witnessing not only the perpetration of irrevocable damage to our oil industry-for it is our oil industry one way or the other-but we may also become horrified observers of the destruction of our dearly held and highly valued constitutional system, our economic freedom and our liberty to pursue prosperity through personal determination, not through the high-handed interference of a God-like central government.
The Conservative budget was a reasonable, straight-forward, honest and compassionate document. It was a realistic program for the 1980s. But how the Liberals vilified it! How passionately they cried foul against the excise tax of 18 cents on gasoline. They appealed to the electorate saying they could not specify the exact price of gasoline "until negotiations with the provinces have taken place". The so-called "made-in-Canada" price or, should I say, "made-in-Ottawa" price would result in a lower price to consumers than the one proposed in the defeated Conservative budget because it would not include, as members opposite said, an 18-cent excise tax on gasoline. The ironic mockery of that phrase haunts every Canadian householder who cares to admit that they have been bamboozled and befuddled by the backroom subterfuge and the absolute self-interest of this Liberal government. "A lower price to consumers." Let us see how substantive that a phrase is. The Minister of Finance states in his budget:
The blended price will never exceed 85 per cent of the international price or the average price in the U.S. whichever is lower.
And what did the Crosbie budget say? It said:
All increases in the domestic price of oil would be subject to the condition that the average delivered price in Toronto would not exceed 85 per cent of the lower of the Chicago price or the international price.
What is the sum difference between this budget and the Crosbie commitment to 85 per cent in that much maligned budget? There is no difference whatsoever. This is the consumer protectionism with which ministers opposite have befuddled the people.
It pains me that the Minister of Finance obliges me to point out such an obvious and logical fact to him and to this House-but then, they all know it perfectly well. Certainly everyone in this country now knows that they have been "had" by the Liberals with their broken election commitments to lower oil prices.
Confronted by the expected resistance from the producing provinces to a tax on natural gas exports, the Minister of Finance did the obvious thing. He did not tax natural gas exports-he taxed natural gas. He taxed all natural gas- domestic, exported, still in the ground-any gas that is obviously around. Now there is an obvious man. And Canadians are seeing how obvious he is.
He knew that the modern, sophisticated voter is far too aware, far too smart to be taken in by the clever ploy of calling a spade a spade-and calling an excise tax an excise tax. He called it, therefore, and logically, by another name, or, rather, by several other names. The Crosbie excise tax was changed, to the more aristocratic sounding "Canadian ownership account", "wellhead price", "petroleum compensation charge", and the "oil export tax". Through these new energy taxes, the government will take an extra $3 billion in revenue from the pockets of consumers. As the Right Hon. Leader of the Opposition (Mr. Clark) mentioned this weekend, this amount will not be spread equally and fairly across the whole country but will be focused like a penalty on those who are now at the centre of the drive for an energy and industrial base in Canada-the energy producing provinces.
When these budget measures are combined with the new taxes imposed last April, they will raise taxes by $3.5 billion more than the Crosbie budget which, as the hon. members opposite will remember, was condemned utterly for uncontrolled spending.
The budget raises the price of oil this year by a total of $4.55 per barrel. The Crosbie budget raised it by $4 per barrel yet the former Liberal opposition condemned it for that. Now the government has increased the price by $4.55 at the wellhead-made up of $3 at the wellhead, 75 cents for Syncrude and 80 cents in the current budget. The Crosbie budget would have increased oil prices by $4.50 per barrel every year until 1985 but the present budget will increase them by a greater amount. In all logic, Mr. Speaker, how can the Minister of Finance claim he is not increasing prices more than was the case in the Crosbie budget? There is one big reason, Mr. Speaker. The Canadian electorate made a mistake in February. The minister proposes to increase the price of oil at the wellhead in 1986 by $7 per barrel.
November 4, 1980

The new petroleum and gas revenue tax and the natural gas and gas liquids tax will, together, raise $2.7 billion. Now, $2.7 billion rings a bell. It is the amount that the discredited Crosbie budget was to collect with the excise tax. But then, the Crosbie budget had also offered relief, on the same amount of revenue, to the tune of $650 million through the mortgage and property tax credit and the program to allow deductions of the salaries of the wives of entrepreneurs and businessmen. But no doubt a crafty trick lurked in these apparently helpful programs, and the present finance minister did right to ignore them. Tax credits are to be ignored in the Liberal regime.
That is, except for MURBs. These offer tax relief to needy millionaires who are struggling to put up more highrises but are being prevented from doing so by the thoughtless inability of the people to pay their rents! In an increasingly cold and alienating urban environment, more highrises are just what we are looking for.
Mr. Speaker, like Hansel and Gretel, the Canadian taxpayer has been led into the woods by this government, and they will find out that it is they who are to be cooked, not the goose of the oil companies and other corporate interests.
The Crosbie budget of last year would have resulted in lower expenditures, lower domestic financial requirements, a lower rate of spending growth, and a lower deficit on both a public accounts and cash basis, in this and in each succeeding year until 1984, and our revenue for this year would have been greater by $105 million, while our deficit would have been lower by almost $4 billion.
What have the Liberals offered in return? Their budget reminds me of the man who was sentenced by Queen Elizabeth I to be hung, drawn and quartered. At the last minute, his sentence was commuted to hanging. They primed Canadians to prepare for the worst, but instead used the subsequent relief to pioneer astonishing schemes whose implications had not even been dreamt of. The significance of these schemes may not be felt as sharply as deindexing or the abolition of tax shelters, but 1 assure you, Mr. Speaker, that they are even more significant and hurtful to all sectors of the economy- including the taxpayer.
This is a distorted and abortive socialism, Mr. Speaker, making the poor pay to subsidize the even poorer.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Blaker):: Order, please. Before I recognize the Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. MacLaren), some hon. members, through their duty to the House, may not be aware of the most recent news from the United States. 1 hope they will not mind this interruption. I understand that news reports indicate that Governor Reagan has acquired 51 per cent of the vote and President Carter, 44 per cent to date.


Mr. Roy MacLaren (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, that is a hard act to follow.
The Budget-Mr. MacLaren
In speaking this evening on the budget, I want to direct my remarks largely to the energy policy which is such a significant part of the total budget presented last Tuesday evening. It is a major part of that budget because energy is such a pervasive element in our total economy. The development of the energy industry, as the budget forecasts, will in effect be a motor of both economic growth and industrial strategy in this country in the years ahead. Hence, it must necessarily be a substantial part of the budget.
We are all familiar with the international energy problem. Total consumption of oil has tripled over the past three decades and, since 1973, world oil prices have also tripled. For some countries the impact of those major and sharp increases in petroleum prices have brought near financial disaster and, certainly, widespread hardship. Even with our own substantial petroleum resources, prices in this country have increased significantly bringing in their train more inflation and higher unemployment.
Canada, however, is particularly well placed to meet the challenges of the 1990s, the energy decade. In fact, energy opportunities will be transformed into energy advantages which will propel Canada into the 1990s from a position of national strength. The vehicle will be our new and ambitious energy program. We are, of course, already less vulnerable to the caprices of an international petroleum cartel than almost any other nation. Under the new program, we shall become totally independent. We are fortunate in having a variety of energy options. We shall expand those options. We already have an impressive record of achievement and accomplishment. Indeed, we shall lead the world, as we do already in many respects, in petroleum techniques and organization required for further exploration and development of our energy resources.
The new energy program promises every Canadian improvement on our already substantial record of achievement. It also promises opportunities for every province of our country benefiting every Canadian. Few countries are so fortunate as Canada. Few countries enter the energy decade with our domestic resources and our ability to insulate ourselves from foreign, unstable sources of oil. Nevertheless, even with our own vast energy resources, we had to make hard decisions in the budget.
There has been the matter of supply. There have been questions of price. There have been problems of subsidies and incentives. There is the matter of revenues to assist in developing the energy projects which Canadians rightly demand. All these are difficult questions, but they can and will be resolved within our own boundaries as the new energy program outlines. In that new program, we offer stability to petroleum industry in Canada. Canadian consumers are assured fairness, and all Canadians are offered great new opportunities of participation.
We have a job to do, a job that will put tens of thousands of Canadians to work, call for billions of dollars in investment

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The Budget-Mr. MacLaren
and allow us to gain greater experience of working within our own fragile environment, especially in the north and offshore. It will enable us to acquire the skills and technology required for massive projects, so that we can sell those Canadians skills and technology to the world.
Previous Liberal governments and the previous Conservative government both recognized the dangers of dependence on foreign oil. The previous government largely ignored the problem inherent in depending on foreign-owned and controlled oil corporations here at home. It offered various contradictory policy positions, but some of their spokesmen, certainly, wished to disband Petro-Canada, and others wished to render it a caricature of its former healthy self.
Other nations, similar to ours, have moved faster to ensure a more active national presence in their petroleum industry. In Britain, for example, the national oil corporation has had first claim on a 51 per cent share of North Sea oil production. In Norway, the public oil corporation called Statoil is authorized to take up to a 50 per cent interest in any field it does not already hold. It makes no payment for past exploration. It has the option to increase its interest to 70 per cent at its own discretion. In Australia, to take another example, only naturalized foreign oil companies can produce oil. A naturalized company in Australia must have 25 per cent of its equity owned by Australians. The board of directors must comprise a majority of Australians, and the company must commit itself to increase its Australian equity to 51 per cent within a given period.
What has been the situation in Canada where the industry has been dominated by foreign-owned corporations? Net oil and gas revenues have risen from $1.2 billion in 1970 to over $11 billion in 1979. Since the volume of oil and gas production has increased about 30 per cent over that same period, price increases have provided the industry with generous profits, largely on reserves discovered before the OPEC cartel inflated world price.
In the first six months of this year, the profits of the five largest oil companies jumped to just over $1 billion. That is a 92 per cent increase over their combined profits of $500 million in the first six months of last year. Moreover, that increase follows a 72 per cent profit increase for the same companies last year to $1.5 billion, compared with something over $800 million in 1978. All companies earning these enormous profits are at least two-thirds controlled by a foreign parent.
What are these companies doing with their Canadian dollars? Last year alone, over $650 million left the top seven foreign-controlled corporations in the petroleum industry in the form of dividend payments and equity reductions. Foreign-controlled firms dominate our energy sector, a sector which is bound in turn to dominate the Canadian economy by the end of this energy decade. In 1979, foreign-controlled firms reported sales of $6.1 billion. A comparable figure for Canadian companies was merely $1.6 billion. In other words, almost three-quarters of industry sales accrued to foreign-controlled firms.
Let me give you another example, Mr. Speaker. Many of the most promising exploration activities occur on "Canada lands", that is, in the north, the high Arctic, and offshore. But of the 290 million acres held by companies under permit, only 110 million are held by Canadian-controlled companies. Without the presence of Petro-Canada, the Canadian role would have been altogether negligible.
In total, there are 19 major oil and gas companies which are 100 per cent foreign-owned. In the last four years alone, the amount of Canadian capital exported by the petroleum industry, including dividends and interest and return of capital, exceeded inflows by $3.7 billion.
Clearly this foreign-dominated sector, the essential sector of our economy today, is healthy. But why has it been so profitable? Internal cash flow in the industry rose in 1979 to more than $7 billion, a yearly gain of some 43 per cent. Total funds available to the industry last year rose to almost $12 billion. After-tax profits in the industry reached $4.7 billion, an increase of more than one-half over the previous year. A remarkably generous regime of resource taxation provided the industry with such profits, and in a significant way contributed to the current federal deficit.
For the purposes of calculating federal income tax, resource income, after operating costs and capital cost allowance, is reduced by a 25 per cent resource allowance. This is a provision which gave recognition to the fact that royalties paid to governments were not deductible for income tax purposes. The most important deductions included exploration costs, which were written off at 100 per cent in the year in which the expense occurred. Development expenses were written off at a 30 per cent rate, and land bonus payments were written off at a 10 per cent rate. In addition to all of those major incentives which were, in effect, tax expenditures by the national government, resource firms could deduct a further one-third of their exploration costs, most of their development costs and certain capital costs, as well as one-half of the costs of enhanced recovery equipment by virtue of the earned depletion allowance. This deduction was claimed against resource income, up to 25 per cent of that income.
This preferential treatment to the energy industry in Canada was paid for in the form of lost revenue by the federal government and ultimately by the taxpayers of Canada. It was done to encourage active exploration and the development of a secure, energy supply. An estimate of the magnitude of the national government's efforts at promotion may be obtained from the tax expenditures account which was published by the previous government in December, 1979, and issued with the budget papers of the previous government. Let us assume that the tax provisions designed to aid the energy industry were eliminated. What additional revenue would accrue to the federal government? The fast write-off for exploration expenses, the fast write-off for development expenses and the earned depletion allowance cost the federal government $425 million in foregone revenue last year. With other deductions, the federal tax expenditure in 1979 for mining, gas and oil amounted to more than $2 billion. While this is an estimate
November 4, 1980

and subject to further clarification, it indicates the magnitude of the contribution the Canadian taxpayer has made to the development of the petroleum industry and to those regions of Canada which have benefited directly from petroleum development.
Perhaps our former practices were too generous. As the previous finance minister, the hon. member for St. John's West (Mr. Crosbie) noted last year, "under the current system, high income Canadians can receive tax benefits that are actually larger than the cost of their investment. This is not tolerable." So in some respects was the previous system when it favoured particular regions over the national good or favoured, as I shall point out in a moment, foreign-controlled corporations over Canadian-controlled.
The previous system of tax incentives for the petroleum industry tended to favour foreign-controlled companies because the incentives were in form of write-offs against current profits. Most Canadian companies did not have the necessary large profits to benefit. This has meant that the major oil companies have frequently been able to outbid small Canadian companies at land auctions, farm-ins or on the takeovers of other companies.
We, the national government, and ultimately the Canadian taxpayer have paid 94 per cent of the cost of wells over $5 million. We have paid two-thirds of others costs involved for drilling such as in the case of the Beaufort Sea. We, the national government, and accordingly the taxpayers, have paid over one-half, over 50 cents of every dollar spent on oil sands development.
I cite these statistics to underline the fact that the unwelcome results have occurred. While the big companies, the foreign-controlled companies, have had to spend about 37 cents of every dollar for exploration costs, a small company, typically a small Canadian company, has had to spend about 60 cents for the same exploration effort. Clearly, the time had come for a change.
In the case of federal expenditures, I want to point out that the expenses I have described as write-offs have not been the only claim on federal tax resources. Allow me to develop the argument further. As oil prices rise, the fiscal position of the federal government deteriorated under the previous revenue regime. Why? Because we are committed to maintain a once-price system for oil, whether imported or domestic, so that no Canadian is discriminated against by regional pricing variations.
To maintain this one-price system, we must of course subsidize the price of imported oil at a very great expense. Second, resource revenues distort regional equality. Since the federal government is ultimately responsible for ensuring regional economic equality, we must transfer more directly to the have-not provinces, by way of transfer payments or indirectly, through the efforts, for example, of the Department of Regional Economic Expansion.
The Budget-Mr. MacLaren
I have not mentioned our other important federal government commitments to, for example, medicare, hospital insurance and post-secondary education. As the Minister of Energy, Mines and Resources (Mr. Lalonde) indicated in summing up this approach to our national economy, the federal government receives only about one-third of total government revenue, but is responsible for about one-half the expenditure. Canadians today rightly call upon the national government to promote and stimulate our total economy through a new energy program.
I have touched on the question of supply. I have said a word about the major role of foreign-controlled corporations in our petroleum industry. I have said something about the revenues foregone by the national government, a practice intended to promote the development of the Canadian petroleum industry.
It is our view that the time has come when all Canadians should enjoy the economic benefits accruing from our energy resources, including the technical and industrial benefit spinoffs. But first, before we can obtain the full benefits, we must gain the ownership and control of our total energy sector. The federal government is accordingly committed to a significant shift in the structure of the oil and gas industry. The government has three goals which have been briefly summarized as, first, 50 per cent Canadian ownership of oil and gas production by 1990, second, Canadian control of a significant number of the larger oil and gas firms and, third, an early increase in the share of the oil and gas sector owned by the Government of Canada.
The specific measures designed to meet both our supply requirements and Canadianization goals include incentive programs to encourage all firms, but especially Canadian firms, to grow and expand and play a more active role in our oil and gas sectors.
Over the next three years, the oil and gas industry in Canada will gain more from the petroleum incentive program outlined in the budget than it will lose from the reduction in depletion allowance and changes in the definition of exploration and development expenses. The incentive system in our new program is more generous than the previous one. It is accessible in a meaningful way for the first time to smaller companies which, as I have noted, tend to be Canadian.
Producers will, of course, have to pay the petroleum and gas revenue tax, but even with this tax, the netback before corporate taxes will increase rapidly, from 94 cents per million cubic feet in 1979 to $2.49 per million cubic feet in 1985 for gas and from $6.29 per barrel in 1979 to $11.73 per barrel in 1985 for oil. Over all, the industry's net income, including incentive payments, will double between 1979 and 1983. The phasing out of the depletion allowance for exploration outside Canada lands will give time to oil and gas companies to increase the level of their Canadian ownership and benefit from the incentive program.
The impact on oil and gas companies will vary with the level of their Canadian ownership. Canadian companies will defi-

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The Budget-Mr. MacLaren
nitely benefit from the new program presented in the budget. A company at least 75 per cent Canadian owned with one dollar in cash will be able to spend $5 on Canada lands, $4 coming from the government as incentive payments. Such a company will have to pay only 7 cents of each dollar spent on exploration on Canada lands. The cost of exploration on provincial lands will amount to only 34 cents for each dollar when the program is fully implemented in 1984. This compares with a cost of 37 cents for each dollar under the past system.
Incentives, as has become evident to all those who have read the new energy program, will be less attractive for foreign companies. For example, their net cost on Canada lands will be 28 cents for each dollar. Nevertheless, the total system will remain highly attractive by international standards.
The incentive program will be very attractive to individual Canadians and will help oil and gas companies to raise money through drilling funds. Individuals will get the same incentive payments as Canadian companies. Net cost of exploration for an individual with a marginal tax rate of 40 per cent will be only 39 cents for each dollar spent on provincial lands and 12 cents for each dollar spent on Canada lands. These are indeed major incentives for Canadians to invest in the fastest growing and most prosperous segment of our economy.
I have already said a word about Canada lands. I want to expand for a moment on that particular aspect of our policy affecting those lands in the high Arctic and offshore. A new Canadian oil and gas act will enable the government to direct development on these lands more effectively, to share more equitably in profits from future production and to increase Canadian ownership. Starting in 1981, the government will make incentive payments from 25 per cent up to 80 per cent of all exploration costs on Canada lands. It is only normal that the government would then share in both costs and revenues. The 25 per cent interest reserved for the Crown, which has led to some discussion in the House, must be evaluated in the context of the overall system on Canada lands, taking into account the royalty system which could have been used to increase the government's share. Looking at the system as a whole, it appears attractive by any world standard.
The new policy provides for a carried interest for the Crown in the Canada lands. When it is converted to a working interest, the Crown corporation involved will have to pay its share of the costs. Development costs being much higher than exploration costs, the government will have to pay a larger share of total cost to receive a share of revenues. The application of this clause to existing interests is justified since the government and the taxpayer paid a large share of the exploration costs incurred previously.
There are various other aspects of the incentive program for greater Canadianization in the petroleum industry which I could touch on, for example, the natural gas bank, the role of the Foreign Investment Review Agency or the acquisition policy which will be carried out by Petro-Canada. But I think it will be sufficient if this evening I simply note that contrary to what some have suggested, the Canadianization objective of
this government will be no deterrent to our energy security. Quite the contrary, our program will reinforce an existing tendency by aggressive Canadian firms to expand both by acquisition and by new discoveries.
When acquisition is by a public company, that company can be expected to follow the tradition already established by Petro-Canada as a leader and as a catalyst in such ventures as offshore exploration, energy transport and oil upgrading. Our program is intended to reduce the profits of firms which are not now investing adequately and to divert those funds to firms which are willing to explore more aggressively. In the case of acquisitions, it is to be expected that the firms to be acquired will be predominantly those with less than average reinvestment track records and that the acquiring firm will have a better than average record. In this way a process of Canadianization is one which enhances our energy security.
In summary, the new energy program builds on Canadian energy strengths. We already produce more energy than we consume. We offset our deficit in oil with our surpluses of electricity, natural gas, uranium and other fuels. Oil prices will, of course, be increased substantially, but they will increase gradually and predictably, remaining below the international prices while being high enough to encourage new supplies and to act as an additional inducement to conservation.
Natural gas prices will rise slower than oil prices. Gas distribution will be expanded, and we shall encourage households across Canada to switch from heating oil to gas and encourage businesses to move toward a greater use of natural gas. Through stimulation by federal grants to consumers and other methods, we shall encourage the substitution to forms of energy other than oil.
The principal feature of the new energy policy is one of sharing. That aspect is important if all Canadians are to receive the full benefit of our new energy policies and to share in the total energy industry which is the greatest stimulus of our economy today.


Mr. Peter Elzinga (Pembina):: Mr. Speaker, I appreciate very much this opportunity to participate in the budget debate, in view of the fact that we faced closure on the constitution issue, an issue which is possibly the most important issue which could be before this House of Commons as far as the future of Canada is concerned.
In his press conference on October 23 the Prime Minister (Mr. Trudeau) stated that we as members of Parliament would have the opportunity to debate the very important issue of our constitution in this House of Commons, but it is obvious that he reneged on that promise. When we review the record of the Prime Minister, we find that this is nothing new. He is very often willing to make statements but not to live up to his commitments once he is in government.
What we in western Canada resent so much with regard to the constitutional package is that it makes us second-class citizens. Two provinces are guaranteed a veto right under the constitution whether they have 25 per cent of the population or
November 4, 1980

not. We feel the same privilege should be offered to all provinces. That is why we have endorsed the Vancouver consensus, to which all provinces agreed. I understand that the Prime Minister even gave it consideration and was willing to agree to it in the event that he could receive concessions from the provinces.
We on this side wish to develop a constitution with proposals which will reflect the needs and desires of all Canadians. More important we wish to ensure that the provinces will have a meaningful role to play in our Canadian way of life. It is a sad day when individual members of Parliament are choked off as far as their participation in debate is concerned when it comes to the constitutional issue.
I love Canada, I love Alberta and I wish to have an opportunity to contribute to the growth of both. However, when we consider what our Prime Minister has done in his short period in this Parliament, we see that he has brought forward a constitutional proposal which has aggravated not just western Canadians but the far eastern provinces as well. He has brought in an energy package which has aggravated the situation existing in western Canada.
The sad part of it is that he wishes to raise our oil prices higher than the level at which Alberta had offered oil to the federal government. Alberta had given an indication that they only wished to raise them to 75 per cent of the world or the U.S. price, whichever is lesser, but under the present Liberal administration, we will see the levels rise to some 85 per cent of the world or the U.S. price, whichever is lesser.
I wish to quote from an editorial which appeared in the Edmonton Journal on Saturday, August 23 entitled "You the people." It reads:
It is with profound despair that our worst fears about the Liberal government in Ottawa are confirmed.
Ottawa's negotiations with the provinces on the constitution are a sham. Its negotiations with Alberta on energy were a sham. To the Liberals, Canadian federalism in a sham. No Canadian should find comfort in these awful conclusions-
At stake here is the very integrity of Canadian federalism as a living process. At stake is the good faith on which federalism must operate, the honesty and goodwill on which it depends to survive.
The Liberals are discounting constitutional negotiations with the provinces even as they occur-just as they did in the case of energy talks with Alberta. We do not have a federal system; we have a unitary state parading as a federal system.
This pretty well outlines the thoughts of many individuals in Alberta on the present Liberal government. As I said, it has taken a series of action which western Canadians have interpreted as being hostile to their region. I cannot help but be somewhat puzzled when I see a government which indicates it is sensitive to the province of Quebec-which I support- demonstrating that when it comes to showing any sensitivity to western Canada, it has none whatsoever.
Let us review some of the items that are not contained in the Liberal budget. There is absolutely nothing in the budget for farmers throughout Canada, except added fuel costs. There is
The Budget-Mr. Elzinga
nothing in the budget for individuals on fixed incomes or for senior citizens. When we review the Liberal government's record of the past ten years, we find that the Prime Minister has been successful in nothing except in being re-elected.
Let us review the record and the legacy which the Liberals have left us. They have given us record high government spending, record high unemployment, record high inflation and record high interest rates. Under this administration, our dollar has fallen to its lowest levels. When we compare this with some of the initiatives we took during the short period of time we were in government, we find that measures were introduced to reduce government spending. We were in the process of bringing down the huge budgetary deficit. We introduced a realistic freedom of information package. We promised parliamentary reform whereby individual members of Parliament would have a more meaningful role to play in determining the course which our nation would take. In our budget we introduced capital gains relief for farmers. We offered deductibility to working spouses in the farming sector and in small business. We were in the process of introducing a meat import law. We committed ourselves to some $34 million for the development of Prince Rupert, and under our transport minister at that time, the hon. member for Vegreville (Mr. Mazankowski), western grain transportation system was being improved.
These policies reflected our belief in the individual Canadian, in the individual worth of each Canadian; we wanted to develop that potential within each Canadian. We have here the greatest country in the world with an abundance of natural resources and, what is even more important, an abundance of human potential, potential which this government is stifling. We wanted to develop that potential but we were in office only for a short period of time, and now it is rather sad to see what is happening under the administration opposite. I ask what my friends opposite are going to do for the farming sector in view of the disastrously high interest rates. What will they do for the home owners? In our program we outlined specifically what we were going to do for those two sectors of the population. This budget simply contains statements dealing with energy. The sad part of it is that because of this energy statement, we will be deprived in Canada of energy self-sufficiency and, more important, we will be deprived of jobs because of the slowdown in the energy sector.
The Alberta Chamber of Commerce presented an excellent submission regarding the benefits gained by all Canadians from the development of our resources in Alberta. It is not only Albertans who will benefit from the development of these resources. All Canadians will benefit from energy self-sufficiency and from the spin-off jobs which will be provided in the development of these resources.
It is interesting to note that since 1973, Canada reserves have been declining under this administration. We hear hon. members opposite stating that we have an abundance of resources, yet under the administration opposite we have become a net importer rather than a net exporter of resources.

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The Budget-Mr. Murphy
We pay twice as much for foreign oil and development of foreign wells as we pay for Canadian energy to create Canadian wealth. My friends opposite have created a hopeless climate throughout this land and it is rather sad to see. The hon. member over there may smile, but let him look at the polls and he will find that one in four Albertans wishes to separate from Canada. It breaks my heart to see something like this develop. It is developing simply because of the attitude of hon. members opposite.
I promised hon. members to my left that I would keep my comments very brief. Let me just leave you with a few thoughts, Mr. Speaker. I should like to reiterate that the majority of us want to stay as part of this country and the majority of us wish to contribute to this country, but if the continuous policy of the government opposite is to push us out of confederation, what will happen to this country is obvious. I love Canada and I love Alberta, but the government opposite is depriving me of the opportunity to contribute to both. I cannot help but be sad when I witness the policies being implemented by this Liberal regime.
Let me conclude on a lighter note which I should like to share with hon. members opposite. What we will do in Alberta is to erect a statue of the Prime Minister. We believe it will provide shade in the summer, shelter in the winter, and allow the sparrows to speak for all Albertans.


Mr. Rod Murphy (Churchill):: Mr. Speaker, like some of my colleagues, I too, welcome the opportunity to speak on the budget. I cannot support the proposals outlined by the Minister of Finance (Mr. MacEachen), because he has failed to perform the duty of providing economic leadership to Canada or to any of its regions. Other members of Parliament have criticized this budget and I concur with that criticism. This budget is full of politics but it is silly putty when it comes to economics. It ignores the need for comprehensive social programs.
Whether I choose to speak as the member for Churchill, as the chairman of our Atlantic committee or as an individual Canadian, I cannot believe that this budget will solve the problems facing this nation. As the hon. member for Churchill I represent a constituency containing two-thirds of the land mass of Manitoba. There are a number of native communities where unemployment exceeds 80 per cent, white communities with youths and women who lack trade and skills training, yet the Minister of Employment and Immigration (Mr. Axworthy) is talking about importing 30,000 skilled workmen. As a representative of the people of northern Manitoba, I cannot support a budget which does nothing for these native people, for women and young people.
We are told there will be a 22 per cent increase in the economic envelope, whatever that means. Mr. Speaker, we do not know what that money will be used for. Past government performance would indicate that we got another grab bag of hit and miss programs and unemployment programs which will offer nothing substantial to Canadians who really need help and which will do nothing to meet the drastic shortage of skilled trades people. We were introduced in this budget to a
program which in effect will be a slush fund for revitalizing the Liberal party in western Canada. That goal is as likely to be achieved as the return of the dinosaurs which once roamed the riding of the hon. member for Bow River (Mr. Taylor). The Liberals are dinosaurs when it comes to western Canada; they are extinct and will remain so.
The western development fund is advertised as being worth $4 billion, but on examination it is only a commitment for $2 billion over the next three years. The Minister of Finance has described this program as some kind of retribution for the grab on western resources. In its own Liberal way it is of little substance, it shows little planning, and consequently it will do little to diversify the economy of the western provinces. This fund may be used to effect some transportation improvements. It may actually provide funds for that great Liberal election promise of double-tracking, suitably subtitled "there and back again". But it will do little for the people of western Canada.
There is need for western economic growth, diversification, and programs to assist native people and others in regions which do not have huge granaries and oil drills sitting in their backyard. But this will not happen unless the Liberal government starts planning and stops playing regional politics.
I am concerned about the effect of the budget on the over-all Canadian economy, on the individual Canadian family, and on the underdeveloped regions of this country, in particular the Atlantic provinces to which I will address my next few remarks. The Atlantic region has always been hit the hardest by measures decided in Ottawa. When prices are high, they are higher in the Atlantic provinces. When wages are low, they are lower in that region. When these are few jobs, there are still fewer jobs in the Atlantic region. This has become a Canadian fact of life. So it is of little surprise to me, although I expected a little more from a minister of finance who comes from Cape Breton, to find that the Atlantic provinces will once more get it in the teeth because of the federal budget of a week ago.
I said I expected more from the Minister of Finance because he is a home-grown boy from the region, but after all there is another side to the story. He is a Liberal Minister of Finance and for the last 20 years his party has done nothing to help the people of that region. It has done nothing to remove the regional disparities which exist in the country.
Perhaps one problem of the Minister of Finance is that he does not look beyond his statistics, charts, numbers, forecasts and profiles to see what the lack of planning has done to the average Canadian. For example, would he forecast that this will be the highest rate of unemployment since the great depression? I wonder what the word "unemployment" means to the minister. Is the word nothing more to him than cold hard statistics? Does it have a magical effect on his heart and his mind, or does it turn him away from the problems facing Canadians? Is unemployment becoming a term synonymous with participation rates, seasonally adjusted rates, numbered regions, or does he see beyond all that? Does he see that the
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lack of action on the part of his government will severely hurt people and regions which simply cannot afford to be hurt one more time?
What about the increase in premiums for unemployment insurance? The Minister of Finance announced in the budget that employee contributions will increase from a rate of $1.35 per $100 of insurable earnings, to a rate of $1.80 per $100 of insurable earnings, a 33 per cent rise. Does he look at these black and white figures and think to himself that 45 cents per week for $100 is not very much? Does he think it is not too bad, or does he see that the change in the contribution scheme is really a regressive tax and an extra burden on working people, especially on those who can afford it less?
One would hope the Minister of Employment and Immigration would have been able to supply his colleague with better advice as to how to increase revenues from the unemployment insurance program. But he has received bad advice from that minister. The government should be getting better advice, especially at this point in history, so that it can spend those millions of dollars on public relations advertising good programs instead of the useless and sometimes harmful programs introduced in the last few years.
1 should like to look at some other factors in the budget. The Liberal government realized ten years ago that the economic direction in which they were taking the country would ultimately mean that certain regions would become increasingly disadvantaged. Since it evidently realized the injustice which would be created by the existence of a federation with such great disparities of wealth, it decided to create the Department of Regional Economic Expansion. This would be the flagship of the government's concern for regional disparities. After all, in a country as wealthy and prosperous as Canada, it would be nothing but an embarrassment for those inequities to continue to exist.
We all had great optimism at the time the program was announced, a program with a specific mandate to ensure that individual Canadians in disadvantaged regions would not fall too far behind. Unfortunately the department was an optimistic child of the late sixties. Now that child is middle aged and cynical. It is well known that the DREE budget has dropped dramatically since its inception as a proportion of total federal spending. It has dropped from 2 per cent of the budget to less than 1 per cent. I will not push this point because it is a fact that the government has lost any concern for regional disparity.
The real tragedy of DREE is that in the last ten years it has failed in its mission to enlighten budgetmakers and Treasury Board presidents. It has failed to convince these decision makers that economic policy must be a policy for all areas of the country. The Department of Regional Economic Expansion has in many ways played an advocate role. It has fought for disadvantaged regions both inside and outside the cabinet room with some success. However, in the final analysis there has been little progress in the last ten years, especially when it comes to the economic development of the regions concerned, most of all because what DREE gives with the one hand, other federal policies take away with the other.
The Budget-Mr. Murphy
I have seen very little co-operation and co-ordination between DREE and other departments. One problem is that the government does not know what it wants to do in eastern Canada. In the budget there is a special investment tax credit program provided for areas of greatest disparity. The program announced within the body of the budget a week ago was designed specifically to combat regional disparities. It was supposed to increase investment in areas of Canada suffering from high unemployment and low income levels. The 50 per cent investment tax credit will apply to investments in new plants and equipment for processing and manufacturing. My first glance at this proposal made me think it was something I had seen in the Conservative budget but packaged slightly different by Liberal budget writers. At first I was optimistic about the program, but once I looked at it, I found that it was watered down and would not provide the types of assistance the Atlantic region needs. Most notably, the other departments are still not co-ordinated with this program. The increase in energy costs in eastern Canada will probably dilute the effect of this program. Moreover, the new program will not create the types of jobs eastern Canadians need. This program is also most notable for the kind of activities which the government is not going to encourage through the 50 per cent investment tax credit. The exclusions are pulp and newspaper production, petroleum refining, farming, fishing, logging and mining, which work against Atlantic Canada due to the area's dependence on those resource-based industries. They need these industries in order to stabilize their economies and create jobs; excluding them from the program cannot help eastern Canadians.
A further concern I have about this tax credit program is one I have in general about DREE funding. There is little evidence that the companies which locate in the Atlantic region, subsidized by government funds, do so because of the incentive programs. In many cases these companies have little commitment to the region or its population and the subsidies do nothing more than add to private profits, with little regard for continuity. I fail to understand why these incentives are being offered immediately effective budget night. They are supposed to encourage companies to relocate or to invest in eastern Canada. If it is an incentive to bring these companies to eastern Canada, why is it being backdated in such a way that companies which are already planning to relocate there are to receive this 50 per cent credit? You do not encourage companies that are planning to build or companies that are already building there. You encourage companies that may be induced to move there two or three years down the road, companies which are making their plans at this time. In other words, this measure, like so many other measures, will just be another tax rip-off for the companies. If the government were really concerned it would be making plans for the future by offering incentives for the future and not just giving tax write-offs to companies that are already building in those regions.
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November 4, 1980
The Budget-Mr. Murphy
I am constantly amazed at how much energy the Liberal Party devotes in trying to mollify certain regions of this country-with little success. The reason is that they ignore some of the obvious solutions which have been sitting in front of their noses for some time. Let me use the infamous SYSCO example. This is not the first time my party has brought this matter up in the House. Why should the residents of the Atlantic region believe Liberal promises about an extension of the natural gas pipeline to the maritimes, a coal conversion program or a DREE program targeted at underdeveloped regions when the Liberals cannot even make good on the promises they have made to provide funds to the ailing Sydney Steel Corporation? It is a company which is already operating in this region, and one which would like to continue operating there. It is a company which is providing employment for a lot of people in Cape Breton. Althouth the Minister of Finance himself comes from that region they cannot get money from the Liberal government. They have been given promises year after year. These are promises which the parliamentary secretary to the DREE minister, a member of Parliament from that region, has called peanuts. But even those peanuts will not be delivered. They have gone the same way as the peanut farmer from the United States.
It is time now for the government to keep that particular election promise. They have to modernize Sysco in order to produce the jobs needed there and to give Atlantic Canadians the feeling that this government does care-not just at election time but throughout the year. There is nothing in this budget to indicates that there is any care. Again, there is no promise for Sysco. There is no promise for the people of Sydney.
There are other issues of concern to the Atlantic region which should be discussed during this budget debate. However, I recognize that there is little time left and there is one further item I would like to mention at this time. This budget has failed to make any provisions for the re-establishment of the strong and viable Canadian merchant marine. I had the opportunity to visit Saint John, New Brunswick recently in company with a committee of the NDP caucus concerned with occupational health and safety. I visited the drydocks in Saint John and I was impressed with what can be done in Canada. We, in Canada, need ships to carry our goods to other countries. I use as an example the port of Churchill in my own riding. Grain leaves the port of Churchill in foreign ships. They are mostly Polish ships. Yet sometimes we have had to wait three or four weeks after the season opens for one of those ships to arrive. If we were building our ships in Canada for a Canadian merchant marine this would not be a problem. Again, examining the budget, we find there is nothing there to establish a merchant marine. The Liberal government has failed to provide any economic leadership for Canada or, specifically, for the Atlantic region. We need those ships. We can build them here. The budget does nothing to assist the development of this very important industry.
In the few minutes which remain for me to speak I would like to address the members opposite, the rubber stamps of the House of Commons. I ask them to consider this budget quite
seriously and look beyond the words of the hon. member for Cape Breton Highlands-Canso and his budget. Look beyond the press releases which the Liberal party has put out. Look at the budget and the decline of Canada's economy. Look at what Liberal governments have done to Canada. Year after year we have had promises from this government. Year after year they have come up with new, improved brands of soap. When you take a look at it, it is really no different from the Crosbie budget. It is in a much better package. It is new and improved; the soap looks better on the outside but it is the same old suds underneath.
If members opposite, especially those from Atlantic Canada, Quebec, Ontario and the two lonely Liberals from the west, have any concern for what is happening in Canada, then they will not support the budget when the vote is taken in a few minutes. They will vote with their conscience on an issue of this nature so that ten years down the road we will not have another bunch of Liberals in government saying that if they had done it back then we would not face these problems today.
The energy minister has said that a partly nationalized oil industry would not have been acceptable to many Canadians ten years ago. So successive Liberal governments waited until the oil was gone, then they moved in, or announced that they would move in some day.
A number of private corporations in our country, especially in the resource extraction industry, have received government help through the provision of generous tax loopholes. Will the same thing happen with those industries once the nickel and iron is gone? Will the government step in then, or will they make announcements at that time of intention to step in and provide aid? By then, of course, they might do so. By the time the resources and jobs have gone, the Liberal government will make its move. Or it will put out the propaganda and the fancy hoopla saying they are going to move against these multinationals some time in the future.
In the cases of Sysco, Devco, Chrysler, de Havilland, Mas-sey-Ferguson and others the government has allowed the privateers to take profits. But the government rushes to the rescue when problems get serious. If the government intends to act in these areas let it act now. Let the backbenchers at their caucus meeting tomorrow make the government act. Do not sit back and say that because those who sit in front are the ministers, the government, you will do what they say-stamp, stamp. Make your government work!
In every election campaign across this country Liberal candidates say the voters need somebody on the government side to make sure things will happen. They say, maybe you will et a DREE grant or some other grant. Mr. Speaker, they cannot do anything to make this cabinet act in a more responsible manner than the members of the official opposition. But we have the advantage of being able to get up here and point out the errors of the party opposite and the problems this country faces. We can suggest alternatives and members across the way can say nothing. Of course, when the vote is taken tonight they will get up in turn, nod in agreement and baa like sheep.
November 4, 1980

The Liberals have lost all hope of regaining power in the west because they have ignored the problems of the west for too long. Today, they are continuing to ignore the problems in western Canada but they are also ignoring the problems of eastern areas, of native people and of women. The Liberals use token gestures to get support from the various groups at election time and to prove that they have a progressive image. But when we get right down to it, whether, for example, it is in the Treasury Board which talks about giving rights to women, or somewhere else, nothing happens when it comes to affirmative action within the various departments of government.


An hon. Member:: All talk!


Rodney Edward Murphy: It is all talk. What happens, of course, is that time after time employees of the government have had to drag their employer through the courts and through the human rights tribunals to enforce the laws of Canada. The worst employer in this country is the Government of Canada. If a private corporation which came under federal legislation were ignoring the human rights code it would be prosecuted by the federal government, instead of the administration being the defender and dragged through the courts.
The other day during the budget debate the President of the Treasury Board (Mr. Johnston) said that one of the reasons he was moving to provide benefits for part-time employees was so that women could have the benefit of a home life and a job. Right now there is a translators' strike, the main outstanding issue of which is paid maternity leave. We cannot believe the government. The Minister of Employment and Immigration (Mr. Axworthy), who is responsible for the status of women speaks of affirmative action programs within the government. What has the Liberal government introduced? What has that great new minister from the west introduced?


Rodney Edward Murphy: Band-aids.


Miss Jewett:: A lousy charter.


Rodney Edward Murphy: A lousy charter and more studies. He is now taking the great initial step of studying four departments, not for the sake of action or to see what can be done, but to see whether there is a problem. It does not matter what the Public Service Commission has been telling them for years or what the various advisory councils have been telling them for years; they get up and say, "Is there a problem? We will send out a survey".


Pauline Jewett: Another study.


Mr. Kristiansen:: Take a poll.


Rodney Edward Murphy: Take a poll, that is what they will do. If this government had any commitment to women, it would act not talk. If this government had any commitment to human rights, it would not be introducing a charter, it would be acting with
The Budget-Mr. Murphy
the powers it now holds. When it comes to the budget, we would not see this piece of litter, we would see a budget which would be meeting the needs of Canadians, helping all the regions of this country and helping the fishermen, the miners and the unemployed.


Steve Eugene Paproski: Small business.


Rodney Edward Murphy: And the small businessmen across this country. I would like to thank the hon. member from the agricultural belt for his assistance.


Steve Eugene Paproski: Edmonton North, please.


Rodney Edward Murphy: I realize, Mr. Speaker, that in a few minutes you will be calling for the vote, and I see that the Liberal sheep are entering the chamber.


Some hon. Members:: Baa!


Normand Lapointe: One thing you have not yet learned, is to be polite.


Steve Eugene Paproski: Here come the turkeys.


Rodney Edward Murphy: The problem is that as the sheep come in for the vote, they have not heard the advice they have been given. They have not been listening to the budget debate. Of course, hon. members opposite will come in and stand up one after the other because they have been told that they should vote for the government. Those members from Atlantic Canada and those members of the constituencies which the NDP visited in the last couple of weeks, listened to complaints and heard about phony sod-turning ceremonies, will have trouble in the next election because they do not have the respect of their constituents, because they do not vote for the interests of their constituency.


Mr. Lefebvre:: You know when to vote with us.


John Edward Broadbent: About twice a year.
[ Translation]


Mr. Deputy Speaker:: It being 9.45 p.m., it is my duty to interrupt the debate and put forthwith every question necessary to dispose of the subamendment and the amendment now before the House, in accordance with the order passed on Tuesday, October 28, 1980.

The question is on the amendment to the amendment (Mr. Rae). Is it the pleasure of the House to adopt the amendment to the amendment?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: Those in favour of the amendment to the amendment will please say yea.


Some hon. Members:: Yea!

November 4, 1980
The Budget


Mr. Deputy Speaker:: Those opposed to the amendment to the amendment will please say nay.


Some hon. Members:: Nay!


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Call in the members.


Madam Speaker:: I declare the amendment to the amendment lost.
The question now is on the amendment of the hon. member for St. John's West (Mr. Crosbie). All those in favour of the motion will please say yea.


Some hon. Members:: Yea!


Madam Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay!


Madam Speaker:: In my opinion the nays have it.
And more than five members having risen:


Madam Speaker:: Shall we dispense with the ringing of the bells?


Some hon. Members:: Agreed.


Madam Speaker:: I declare the amendment lost.
It being after ten o'clock, the House will now adjourn until tomorrow at 2 p.m. in accordance with Standing Order 2(1).
At 10.30 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, November 5, 1980