1980-12-19

Mr. Don Blenkarn (Mississauga South):: Madam Speaker, i rise to move a motion under the provisions of Standing Order 43. On the basis of October and now November figures, we have galloping inflation, far worse than ever forecast. The inflation rate is now 11.2 per cent and zooming up with every increase in interest rates. This government has lost control of the economy. Therefore I move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
Thai this House regrets that Liberal members supporting the government have been misled in supporting this government and will have an impossible time explaining to their constituents their support for absolute incompetcncy, and this House demands the resignation of the Prime Minister, the Minister of Finance, the Minister of Energy, Mines and Resources and the Minister of Justice so that they can be replaced and their offices held by members of this House capable of bringing direction and purpose to the government and to the Canadian economy.


Madam Speaker:: To present this motion, there must be unanimous consent. Does the hon. member have unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL REVENUE
Mr. Doug Lewis (Simcoe North):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. Since the cost of home heating oil has risen 26.9 per cent and domestic gas 20.7 per cent since November, 1979, I move, seconded by the hon. member for Hamilton-Wentworth (Mr. Scott):
That the government direct some of its revenues from increased taxes on gasoline, home heating oil and natural gas to help low-income earners survive the 1980-1981 winter.


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.


LABOUR DISPUTES
Mr. Sid Parker (Kootenay East-Revelstoke):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In light of the fact that the British Columbia Telephone Company has recently suspended more than 600 workers for wearing a union button, and in light of the fact that this same company has actively pursued a policy of provoking its employees into taking strike action, even though the workers have expressed an extremely conciliatory attitude, I move, seconded by the hon. member for New Westminster-Coquitlam (Miss Jewett):
That this House demand that the Minister of Labour use his powers under the Canada Labour Code 10 appoint immediately an industrial inquiry commissioner into the B.C. Telephone dispute with the desired end of forcing this totally irresponsible company to come to an agreement with its employees before the citizens of British Columbia are forced to endure another totally unnecessary work stoppage.


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.


NATIONAL ENERGY PROGRAM
Mr. Len Gustafson (Assiniboia):: Madam Speaker, I rise under the provisions of Standing Order 43. The energy policy of this government is causing economic chaos in this nation. An announcement has been made that 300 oil well drilling contracts have been cancelled at Lloydminster, we know that oil rigs are leaving the country putting many people out of work and the province of Saskatchewan is threatening to withhold taxes. The Prime Minister of Canada (Mr. Trudeau) denies these facts are causing alienation, unrest and economic

December 1 8, 1980
uncertainty throughout the entire country. 1 move, seconded by the hon. member for Edmonton East (Mr. Yurko):
That this House request the government take immediate action to reach a responsible energy agreement.


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.


THE ECONOMY
Mr. Tom McMillan (Hillsborough):: Madam Speaker, I rise under the provisions of Standing Order 43 to move a motion. Since the present government was elected more than ten months ago on promises to manage the economy effectively, the cost of living in the Atlantic provinces has skyrocketed by nearly 12 per cent in Charlottetown, Prince Edward Island; by over 13 per cent in St. John's, Newfoundland; by over 12 per cent in Halifax, Nova Scotia; by over 12 per cent in Saint John, New Brunswick; and so on. Unemployment has jumped to double-digit proportions in every province in the Atlantic region, with the unemployment rate 4 per cent higher than the national average. Record high interest rates are crippling small businesses, the backbone of the economy of the region, and now CN Express services, an essential part of the economic structure of the Atlantic provinces, are being savagely cut.
I therefore move, seconded by the hon. member for Central Nova (Mr. MacKay):
That this House calls upon all Liberal MPs to make a serious representation to the Minister of Finance to introduce immediately measures to deal with the economic crisis faced by Canadians living in the Atlantic provinces.


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.


EXTERNAL AFFAIRS
Mr. David Smith (Don Valley East):: Madam Speaker, I rise under the provisions of Standing Order 43. I move, seconded by the hon. member for Guelph (Mr. Schroder):
That this House calls on the U.S.S.R. to state if Raoul Wallenberg, counsellor of the Swedish legation in Budapest in 1944, is alive or was killed following his abduction by Soviet troops.


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.


FINANCE
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, I rise on a matter that I think by any standard is of urgent and pressing necessity. Today's dramatic jump to 1 1.2 per cent in the inflation rate indicates that this government's mismanagement of the economy is total. High interest rates not only cripple industrial development, increase unemployment-in fact, 200,000 more Canadians were laid off this year-and preclude economic recovery, but they very clearly fuel inflation. I therefore move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
Thai this House instruct the government, notwithstanding the policies of the United States, to take immediate measures to stabilize interest rates at a sensible level conducive to economic recovery in Canada.


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.


THE ECONOMY
Mr. Geoff Scott (Hamilton-Wentworth):: Madam Speaker, I want to associate myself with my colleague from Hamilton Mountain (Mr. Deans) on stabilizing economic conditions in this country. I know that most of these Standing Order 43 motions go by the Prime Minister (Mr. Trudeau), but I want him to listen to this one. It relates to the most urgent provision of Standing Order 43 imaginable.
Since the Economic Council of Canada is predicting a bleak decade for the country, and since the Prime Minister has now succeeded in wrestling the economy to the ground, I move, seconded by the hon. member for Western Arctic (Mr. Nickerson):
That the Prime Minister confirm or deny before Christmas whether he is planning to impose controls on wages, prices and profits.


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.
December 18, 1980


NORTHERN AFFAIRS
Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, 1 rise under the provisions of Standing Order 43 to propose a motion of urgent and pressing necessity. In view of today's announcement that the consumer price index for November has taken yet another leap upwards, bringing the annual inflation rate to over 11 per cent, and in view of the fact that this continuing erosion of consumer spending power is particularly serious for Canadians on fixed incomes and those living in the northern parts of the provinces and territories where living costs are already disproportionately high, I move, seconded by the hon. member for Cariboo-Chilcotin (Mr. Greenaway):
That the government be required to introduce immediately a budget supplement containing measures designed to cushion the crushing burden inflicted on the northern poor, as a result of the interest rate and energy policies of this government and its weak-kneed backbench supporters.


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.


SOCIAL SECURITY
Mr. Gordon Taylor (Bow River):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. Whereas many widows and single women over the age of 50 and under the age of 65 are living well below the poverty line, some existing on dry bread and watery soup and some of whom are the widows of veterans who left parts of their bodies on the battlefields fighting against totalitarianism-and if the Prime Minister (Mr. Trudeau) wants proof, I will be glad to take him to homes where this is a reality-therefore I move, seconded by the hon. member for Simcoe South (Mr. Stewart):
That the Government of Canada stop wasting money on billboards and trips for the Prime Minister around the world, and use this money to give these genuine Canadians a decent standard of living worthy of our country, for which the husbands of the war widows gave their lives.


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.
Oral Questions



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: As
Madam Speaker knows, I have served notice of intention to seek an emergency debate later this day on the cruel impact this government's economic policies are having upon the lives of ordinary Canadians.
I would like to direct a question to the Minister of Finance. The minister will know that the treasurer of Ontario has suggested that some of this government's increased energy revenues should be applied next winter to a temporary national subsidy of $75 to $100 to help low-income Canadians pay their rising home heating costs. The minister will also know that we have had cost of living figures published today which show that fuel oil costs are up 26.9 per cent from a year ago and the cost of gas is up 20.7 per cent from a year ago.
In light of these facts, will the Minister of Finance give an undertaking to the House of Commons now that he will co-operate with provincial governments to help low-income Canadians pay their heating bills this winter, if possible?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Mr. Speaker, as the Right Hon. Leader of the Opposition has indicated, the provincial treasurer of the province of Ontario did circulate yesterday a technical working paper on the subject of home heating costs and the steps that might be taken by governments to deal with this problem. The provincial treasurer also asked that his proposal be studied and that when that study is completed I get back to him and give him my response. 1 replied positively to that request and at the present time I have requested my officials to examine the proposal itself and the impact of the proposal, and then we will decide what our position is, which I will convey, as I have indicated, to the treasurer of the province of Ontario.


Charles Joseph Clark: Madam Speaker, we have a situation where, with fuel costs rocketing upwards this year, the response of the Minister of Finance of Canada is that he is going to study a technical working paper which would take effect next year. What we want to know is whether the minister and the Government of Canada are prepared to accept their responsibility, put studies aside, and do something to help ordinary Canadians who are facing expensive heating cost rises this winter.
Let me indicate to the minister that the government of Ontario, as he knows, has indicated that if Ottawa refuses to help the citizens of Ontario, Ontario will act alone. But that will not help low-income Canadians in Atlantic Canada or in Quebec. I ask the minister if he offers any hope at all to those low-income Canadians anywhere in Canada who are facing rising heating oil and fuel costs this year. Are they simply to

December 18, 1980
Oral Questions
absorb those costs or is the Government of Canada going to help them at all to pay their way and heat their way through a cold winter?


Allan Joseph MacEachen: Madam Speaker, 1 am surprised that the Right Hon. Leader of the Opposition would even raise the question of energy prices and their impact upon consumers in Canada. The fact of the matter is that the budget which was introduced on October 28 laid a much lighter burden on the consumers of energy in Canada than that imposed by the budget of his colleague. At the time we were debating the national energy program on the orders of the day, I reminded the Leader of the Opposition of the billions of dollars which were involved in helping the consumer under the present budget in comparison with the former budget, and asked him to keep in mind that we have produced a national energy program which is much lighter and much easier on the consumers of Canada than the budget to which he put his support just a year ago-a very unfortunate date.


Charles Joseph Clark: The reason the minister likes to live in the past is that he knows he cannot go home to live in Cape Breton after the kind of economic policies he has imposed upon the low-income people of that region. He will also know that, in addition to driving jobs and investment out of this country, as his budget and energy policy are doing, this budget provides no help at all to low-income Canadians. There is no equivalent of an energy tax credit, and the minister refuses again today even to acknowledge the problems which will be faced this winter by low-income Canadians who are facing rapidly increasing fuel costs.
Let me turn for a moment to another area where there has been a dramatic increase in costs, and that has to do with the cost of food eaten at home. The cost is up 15.2 per cent over a year ago, largely due to the cost of imported food.


Some hon. Members:: Order.


Charles Joseph Clark: Backbenchers opposite shout "order". They do not want to hear the question.


Madam Speaker:: Order, please. 1 think yesterday everybody got away with murder, but today we should try to restrict ourselves to short questions and short answers.


Charles Joseph Clark: Madam Speaker, the people getting away with murder today are members of the Government of Canada who have introduced economic policies which impose serious economic burdens upon low-income Canadians. The people who share the burden of that guilt are all members of Parliament elected as Liberals and who helped the government push that policy through.


Madam Speaker:: Order, please. 1 am sorry, but 1 must ask the Right Hon. Leader of the Opposition to ask questions.


Charles Joseph Clark: As I was saying, Madam Speaker, after indicating my view that every person here elected as a Liberal bears
the burden of responsibility for these policies, my question has to do with the statement by the Prime Minister that low-income Canadians should switch their priorities and spend a bit more on food than on other things, which is a statement which will literally force many low-income Canadians into a choice between spending money on food and spending money on fuel.
The minister knows that he has available to him the possibility of a shelter allowance, an energy tax credit-


Some hon. Members:: Order.


Charles Joseph Clark: The Liberals are trying to shout this down, and so are their colleagues in the NDP.
[ Translation]


Madam Speaker:: Yes, indeed, we have heard interjections from this side, and we have just begun hearing some from that side too. But the Right Hon. Leader of the Opposition is not helping anybody with his long preamble. I therefore urge him to put his question.


Charles Joseph Clark: Is the Minister of Finance prepared to introduce a shelter allowance? Is the Minister of Finance prepared to introduce an energy tax credit? Is the Minister of Finance now prepared to remove home heating fuel from his tax package, or does the Minister of Finance intend to leave his budget as it is and to leave low-income Canadians out in the cold without government help to get them through a very difficult economic winter?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, the Right Hon. Leader of the Opposition has rightly pointed to the situation of low-income Canadians particularly and to how they will be able to manage in the present difficult inflationary situation. That obviously has been a matter of concern to me and to the government. I want to tell the Leader of the Opposition that, as he knows, there are in place at the present time quite a large number of programs which are fully indexed and which will make a major contribution to low-income Canadians who are faced with rising prices.
As he knows, earlier in this Parliament we increased the guaranteed income supplement by $35 a month.


Geoffrey Douglas Scott: That is gone.


An hon. Member:: That is all gone.


Allan Joseph MacEachen: Hon. members say that is all gone. That is incorrect; that is wrong; that is false. It is not all gone. It has been fully indexed and its value will not be eroded over time. It will be precisely $35 in 1980 dollars, protected and indexed against inflation, and hon. members should keep that in mind.


Some hon. Members:: Hear, hear!
December 18, 1980


REQUEST FOR MEASURES TO IMPROVE ECONOMY
Hon. John C. Crosbie (St. John's West):: My question is for the Minister of Finance whose government is crucifying Canadians upon a cross of broken promises. The Bank of Canada interest rate today has gone up to an historic high of 17.36 per cent, the highest in our history, which means that the prime bank rate will be going up to at least 19 per cent. On October 28 the minister forecast a mild depreciation of the Canadian dollar. He said it would be assumed to average slightly more than 86 cents U.S. in 1980 and 87 cents U.S. in 1981. He forecast the CPI for this year to be 9.7 per cent. Today it has gone up to a year over year average of 11.2 per cent. The Canadian dollar is under 83 cents U.S. That is how good the minister's forecasts are. The budget has been completely discredited within the last six weeks.
My question to the minister is the following. Will the minister now bring in a policy that might save the Canadian dollar and save Candians from these high interest rate costs by introducing incentives for the private sector to invest here in Canada and stop the outflow of investment funds which this mistaken Lalonde policy is forcing upon the Canadian oil and gas industry? Will he take steps that will reduce the current account deficit which renders us so vulnerable after 12 years of Liberal economics?


Allan Joseph MacEachen: Madam Speaker, I think the hon. gentleman totally misunderstands the nature of the immediate problem facing the country as a result of the very high interest rates, combined with the pressure on the Canadian dollar. That immediate problem has nothing to do with the budget, it has nothing to do with the current account balance, it has nothing to do with the trade figures. Because if these were factors, the problem would have improved, but they are not.
The problem arises from high interest rates which exist in the United States putting pressure on interest rates in Canada and putting pressure on the exchange value of the Canadian currency. 1 want to tell the hon. gentleman that the policies which he recommends, if implemented, would have absolutely no effect on the current, immediate problem. That is a separate problem, and I reject entirely his suggestion as a solution.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: Madam Speaker, I have a supplementary question for the Minister of Finance. I am looking at the immediate problem; I well understand it, 1 see it here every day. I would like to remind the minister that the Diefendollar was worth 92.5 cents U.S., about which his party complained in 1963. Today we have the "Trudeau buck", worth 82.5 cents U.S. or 10 cents less. When are we going to get back to the Diefendollar? It looks pretty good now.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: For seven years we had a current account deficit and the minister has forecast a current account deficit this year in the international balance of accounts of $6.2
Oral Questions
billion. Investment is fleeing Canada. That is why there is downward pressure on the Canadian dollar; that is why interest rates are going up; and that is what Mr. Bouey says is happening.
Let me come back to the minister and ask him this. Will the minister take steps to reserve this by changing this attack on the private sector, which is the only thing in this country which can save us-it will not be advanced state ownership-by attracting back into Canada our own investment which is leaving Canada and by bringing in a new economic statement immediately in January? Will he try to retrieve the situation before disaster occurs here which is even worse than is occurring now?


Allan Joseph MacEachen: Madam Speaker, the hon. gentleman is loading the atmosphere will all sorts of rhetoric which has nothing to do with and bears no relationship to the problems which we are facing as a result of the high interest rates existing in the United States.


John Carnell Crosbie: If you cannot understand that, you better get out quickly.


Allan Joseph MacEachen: 1 must repeat to the hon. member that at the present time the prime rate in the United States is about 21 per cent.


Some hon. Members:: So what?


Allan Joseph MacEachen: In Canada the prime rate is three or four percentage points lower. Our capital markets are closely linked with those of the United States. There are bound to be influences on Canadian interest rates and the exchange value of the Canadian dollar.


An hon. Member:: Is that what you said last year?


Allan Joseph MacEachen: That is the particular problem we are facing. No amount of rhetoric by the hon. member for St. John's West, who is suffering from December blues, will change that basic fact.


Some hon. Members:: Hear, hear!


THE BUDGET
Mr. Edward Broadbent (Oshawa):: Madam Speaker, my question is directed to the Prime Minister. It contains facts and not, as the Minister of Finance likes to describe criticism, merely rhetoric. Two alarming facts came out today: first, we have the highest cost of living in five years; second, we have the highest level of interest rates ever in the history of Canada.


John Carnell Crosbie: Ever.


Miss MacDonald:: Some record!
80094 -2

December 18, 1980
Oral Questions


John Edward Broadbent: This means a record number of bankruptcies, record food prices and record levels of mortgage interest rates.


An hon. Member:: And your party supported them.


John Edward Broadbent: Will the Prime Minister now acknowledge that all the forecasts and alleged solutions which were to be provided in the minister's October budget are no longer relevant? Will the government use the Christmas recess to prepare a new budget which deals with the economic crisis, to be brought before the Elouse in January?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, I am glad the hon. member for Oshawa raised this question because yesterday in his questioning he talked about the budget presented on October 28 as being outdated. If he is referring to the inflationary pressure evident in the cost of living figures today, he ought to recognize that the budget of last October recognized inflation as the chief problem facing the Canadian economy and attempted to alert the Canadian people and the House of Commons to the threat that inflation is posing to the country. If he wants me to read the passages in that particular budget-


John Edward Broadbent: No.


Allan Joseph MacEachen: -which outline my concern about inflation, then I will do so. 1 laid out in that budget a medium-term strategy which is intended to gear down inflation. The hon. member ought to read the budget presented last October rather than ask for a new one.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Madam Speaker, I and other members on this side of the House not only read it, but we heard the minister present that disastrous budget.


Some hon. Members:: Right on.


John Edward Broadbent: In the budget there is a $500 increase in indirect taxes for every Canadian family. The minister knows that increases the cost of living; it does not reduce it.
Perhaps the Prime Minister would answer just the odd question today, since allegedly he is responsible for the government. Instead of offering what many of us regard as gratuitous and insulting advice to Canadians about changing their priorities in terms of eating, would he accept a reasonable proposal for average and low-income Canadians and bring it in during the new year, namely, a tax cut related to the cost of living, one which would ensure that low-income Canadians get more than middle or upper-income Canadians?


John Carnell Crosbie: As my budget did.


Allan Joseph MacEachen: Madam Speaker, today the hon. member is complaining about the pressure on prices and the danger of
inflation. At the same time he is making a proposal, namely a reduction in taxes, which in the present circumstances would have a very significant impact on increasing inflation.


John Edward Broadbent: No.


Allan Joseph MacEachen: Every proposal which has come from the New Democratic Party in this Parliament, if accepted, would lead to greater inflation and higher prices in this country. The policy put forward by the hon. member is irresponsible, and we would not accept it.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


John Edward Broadbent: Madam Speaker, that is a disgrace for a man holding the position of Minister of Finance. He ought to know that when we are operating only at 80 per cent capacity, by reducing taxes inflationary pressure will not be put on the economy; all it will do is create a few more jobs. The minister ought to know that.
I should like to ask either the Prime Minister, who is sitting there smiling smugly through this crisis, or the Minister of Finance, a question. Having turned down suggestions coming from both opposition parties for tax cuts, a fair prices commission, aid related to energy costs, having rejected all these solutions or proposals which would help a little, is the Government of Canada saying that it will do nothing while the people of Canada suffer through this crisis?


Allan Joseph MacEachen: Madam Speaker, first I ask the Leader of the New Democratic Party to ask himself whether he is performing any service to the Canadian people or to the economy by describing the present situation as a crisis.


Mr. Baker (Nepean-Carleton):: Try that question on yourself.


John Edward Broadbent: They know it.


Allan Joseph MacEachen: I regard that as an irresponsible statement which will do nothing but add to the existing uncertainty that is prevailing with respect to interest rates and the exchange value of the Canadian dollar. The Leader of the New Democratic Party is grandstanding every day during question period by these uttering exaggerated statements.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: 1 do not intend to be driven into panic reaction by irresponsible suggestions from the Leader of the New Democratic Party.


John Edward Broadbent: Just wake up.


REPORTED WITHHOLDING OF BUDGET TAX BY PROVINCE OF SASKATCHEWAN
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, my question is directed to the Deputy Prime Minister and
December 18, 1980

Minister of Finance. I am almost inclined to ask for his definition of crisis, if we are not facing a crisis now, but I will not ask him that question.
Yesterday the Prime Minister asked for more evidence of the government's budget and energy policy causing a substantial loss of jobs across the country and also a serious decline in exploration and production. Today we have reports that Premier Blakeney of Saskatchewan has reiterated that the budget is cutting back exploration and development not only in heavy oil but also in the area of conventional oil exploration. Hudson's Bay Oil & Gas Company Limited has suspended its 1981 drilling plans in the Lloydminster area and it has laid off half its employees there. Premier Blakeney has described the taxes in the minister's budget as being ruinous, and he is now saying that he will not pay that particular tax.
What is the minister's response to Premier Blakeney's position with respect to withholding the payment of taxes imposed by the budget? More importantly, what changes is the minister prepared to make to avoid the loss of thousands of jobs across the country resulting from the negative reaction to his budget and energy policy statement?


Allan Joseph MacEachen: Madam Speaker, I do not accept the premise of the hon. member's question that the budget has had the effects he alleges in his comments.


John Carnell Crosbie: Open your eyes, Allan.


Allan Joseph MacEachen: He asked me what reaction I have to Premier Blakeney's objection to the production tax. All I would say is that Premier Blakeney is entitled, if he wishes, to contest the legality of that tax. He said that he was considering that. He might reconsider his own royalties, which I understand are about the highest in the country, if he is concerned about tax burdens. Maybe he could get together with the Leader of the New Democratic Party and devise some consistent New Democratic Party anti-inflation policy, because I thought it was the Premier of Saskatchewan who was calling for higher energy prices yesterday to add to the present pressure on the cost of living in Canada.


Ramon John Hnatyshyn: Madam Speaker, not only is there a negative reaction to the budget; it is going down in Canada just like the Titanic. Does the minister not consider the following facts: the substantial cutbacks in exploration and development in Canada; Hudson's Bay Oil and Gas I have already mentioned; Norcen is reducing its exploration and development by 20 per cent; Gulf is reducing its exploration next year by 35 per cent; the industrywide figures are upwards of a 40 per cent cutback in exploration and development? Mr. Bill Menzel, chairman of the Alsands group, who has spearheaded this oil sands megaproject, has resigned his position. This has dealt a serious blow to that particular project. The Americans, notwithstanding what the Secretary of State for External Affairs has said, have indicated their deep concern with respect to the budget and the energy policy. The minister has been asked a number of times
Oral Questions
today whether or not he will in January, when Parliament is recalled, bring in a budgetary statement or a budget.
I ask the minister, in view of these developments, whether he will bring in a new budget, or a budgetary statement, in January so that we can reverse the direction in which we are headed in this country.


Allan Joseph MacEachen: Madam Speaker, the hon. member has again asked me whether 1 would reconsider and bring in a new budget. If my appreciation of the economic situation had altered, then there might be some justification for bringing in a new budget. But if the hon. member looks at the budget itself, he will realize that 1 have explained fully the troubled state of the world economy, the threat to the Canadian standard of living and the Canadian economy from rising inflation. I have put together a strategy in the budget which in my view, will bring about a steady reduction in inflation.


Charles Joseph Clark: You planned all this, did you?


Allan Joseph MacEachen: Madam Speaker, 1 want to agree with-


Charles Joseph Clark: If this were happening in Quebec you would be worried.


Allan Joseph MacEachen: I happen to agree with the report of the Economic Council of Canada, whose assessment has been quoted to me so often by members of the opposition, that there are no easy answers and that the struggle against inflation will be won slowly. That is a fact. To ask me today to try a quick fix to bring in a program for this group or a program for that group would be a totally false approach. It would do more damage to the future of the economy than hon. members realize. That is my general response to the hon. member's question.


SOCIAL SECURITY
Hon. Janies A. McGrath (St. John's East):: Madam Speaker, my question is also for the Minister of Finance. He talks about the fight against inflation being a slow approach, and in that regard I put this to him. One in five families in Canada, according to the latest Statistics Canada figures, need to spend over 82 per cent of their income on food, shelter, and clothing. That is 20 per cent below the poverty line as defined by Statistics Canada. The minister talks about indexing and this addressing the situation. I submit to the minister that when you take into account that indexing is based on the CPI and the major components within the CPI affecting the poor-and here we are talking about the working poor whom indexing does not really address, people who have to face a 15.2 per cent increase in food prices and a 26.9 per cent increase in home heating oil prices-I ask the minister what advice he has

December 18, 1980
Oral Questions
for these low-income families in Canada who face the prospects of not having enough food on the table or enough fuel oil to keep their families warm?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, 1 take the hon. member's question seriously. 1 return, in a sense, to the answer 1 gave to the Leader of the Opposition. 1 would like to develop it a bit further in reply to the hon. member's question.
At the present time there are in place a large number of fully indexed programs to assist the very groups about which the hon. member expresses concern. 1 have already referred to the guaranteed income supplement, which is fully indexed. 1 could refer to old age security, family allowances, the child tax credit and unemployment insurance benefits, all of which are indexed.


Mr. Wilson:: Indexed to what?


Allan Joseph MacEachen: They are indexed to protect the recipients of these programs against the kind of rising prices we are experiencing today.
1 want to add, Madam Speaker, that this is not just fiction since, through the indexing in 1980 alone, $3 billion will be transferred through these programs to the groups which the hon. member has mentioned. I think that is a rather significant protection which we are offering at the present time.
The hon. member probably would like-


Some hon. Members:: Order!


James Aloysius McGrath: My supplementary question is for the Minister of Finance. If he wants to relate indexing in real terms, he is talking about a $2 increase every three months in family allowance payments. Try to match that with a 15.2 per cent increase in food prices. Next year food prices are anticipated to rise by anywhere from 15 per cent to 20 per cent. All 1 say to the minister. Madam Speaker, is that indexing may be the answer, but what do you base it on? Do you base it on a food basket which includes sirloin steak? It is getting to the point where we are talking about maintaining a decent living standard-


Madam Speaker:: Order, please.


James Aloysius McGrath: -for the working poor of this country. That is no laughing matter.


Madam Speaker:: Order, please.


James Aloysius McGrath: I ask the minister to match his performance with his promises.


Some hon. Members:: Hear, hear!


Madam Speaker:: Order, please. The hon. member for Broadview-Greenwood.


FINANCE
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, my question is for the Minister of Finance. The minister has repeated today and on a number of occasions in the House the assertion that proposals from this party with respect to interest rates and unemployment are inflationary. 1 would like to ask the minister to answer the question which he was asked previously by my party's leader, which was: Given the fact that on the figures supplied by governor Bouey the economy is working at less than 80 per cent capacity, that we have over a million people who are really unemployed, what in the name of goodness is inflationary about a refundable tax credit and a fair prices commission?


Allan Joseph MacEachen: Madam Speaker, here again the New Democratic Party is adding to the kind of irresponsible utterance which is the fashion of its leader by saying that at the present time there are over a million unemployed in Canada.


John Edward Broadbent: In real numbers.


Allan Joseph MacEachen: The hon. member knows that the last seasonally-adjusted statistics from Statistics Canada show unemployment much less than a million. It is bad enough at the level at which we find it, but for hon. members to add an additional 200,000 just for the sake of asking questions on the orders of the day is a bit irresponsible, as far as I am concerned.


Some hon. Members:: Hear, hear!


Bob Rae: Madam Speaker, the minister makes Marie-Antoinette sound like a social worker.


Some hon. Members:: Oh, oh!


Bob Rae: He ignores the fact that there are hundreds of thousands of Canadians who have given up looking for work because of the policies of his government, and if he includes those figures he will see that there are 1.3 million unemployed as of the month of November. The minister simply does not know what he is talking about when he makes that kind of statement.


Some hon. Members:: Hear, hear!


Bob Rae: I would like to ask the minister a supplementary question with respect to the interest rate, which has now reached the phenomenal level of 17.63 per cent as a bank rate. This means real rates of upwards of 20 per cent, 21 per cent, 22 per cent and 23 per cent for the average consumer. The minister has frequently said that the policies are not the result of his government and that if he had his way the interest rate would be at a different level. He has said he would have a different policy if only he could be more independent of the Federal Reserve Board. Would the minister tell the House what rate he thinks is a fair interest rate? Is he prepared to
December 18, 1980

come clean and tell the House what he thinks the interest rate should really be?


Allan Joseph MacEachen: Madam Speaker, I have no hesitation in saying that I regard the present interest rates as being too high; that is obvious.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: They are too high in terms of the requirements for restraining inflation in Canada at the present time. That is my view. In order to maintain the monetary targets, an interest rate of the dimensions the hon. member mentioned is obviously too high.
The hon. member has asked what precise rate 1 have in mind. 1 do not intend to answer questions which even the governor of the Bank of Canada, with all his expertise, would find impossible to answer.


Walter David Baker: You are the Minister of Finance.


Allan Joseph MacEachen: But I am quite ready to tell the hon. member that I regard the present rates as too high, and that they are caused by the situation which I have described so frequently but which hon. members want to ignore in all their questions. Hon. members have not dealt with that issue at all, nor have they presented any alternatives.


Bob Rae: Come before the committee and we will talk about it.


Allan Joseph MacEachen: They have just carried on with the old rhetoric from the February election.


RESEARCH AND DEVELOPMENT
Mr. W. Kenneth Robinson (Etobicoke-Lakeshore):: Madam Speaker, I have a question for the Minister of Science and Technology. In view of the fact that before 1995 a large fraction of present Canadian independent researchers will be retiring and there will be an increased demand for technical and scientific personnel in industry during the period that the private sector is attempting, through modernization and increased productivity, to recover from the current recession; and furthermore, since there will be an increased demand for personnel-


Some hon. Members:: Order.


William Kenneth Robinson: resulting from the
increase in over-all research and development expenditures-


Some hon. Members:: Order.
Oral Questions


William Kenneth Robinson: I will be short, but after listening to the preambles of hon. members opposite-


Madam Speaker:: Order, please. Would the hon. member please proceed to his question without further preamble. The preamble has been long enough.


William Kenneth Robinson: Due to demand in research and development predicted by the Government of Canada, will the minister-


An hon. Member:: Question.


William Kenneth Robinson: Surely I can receive some courtesy from hon. members.


Madam Speaker:: Order, please. The Speaker will maintain order. The hon. member need not reply to these interjections. I will try to maintain order, and it would be easier if the hon. member went straight to his question.


William Kenneth Robinson: Will the minister advise the House whether he would consider increasing the government's support for research and development, which is presently at only .9 per cent of the gross national product, to 1.5 per cent now, rather than wait until 1985 for this increase?


Hon. John Roberts (Minister of State for Science and Technology and Minister of the Environment):: Madam Speaker, I had some difficulty hearing the hon. member's question. I believe he was asking whether the government had plans for increasing its support for research and development. That is indeed the case. We have considerably increased the funds made available for this fiscal year, and we intend to increase the government's effort so that we will reach as quickly as possible the objective of 1.5 per cent of Canada's gross national product.
Although I did have some difficulty hearing the hon. member, I believe he referred to the figure of .9 per cent. I should make it clear that that figure refers not to the government's effort but to the total, over-all effort in the economy. It is our intention to move as quickly as possible to a point where the government is spending roughly one-half of 1 per cent of the gross national product on this effort in the hopes that the private sector and the provinces will come forward and meet the other 1 per cent, so that we may reach the over-all commitment of 1.5 per cent by the mid-1980s. I hope to make a much clearer statement on this matter some time in January.


SOCIAL SECURITY
Flora Isabel MacDonald: Madam Speaker, my question is for the Minister of Finance, whose responses today to the plight of the poor have been, not only evasive, but downright heartless. The minister knows full well

December 18, 1980 

Ora! Questions
that the increases in the cost of living which came out today are disastrous for pensioners, the unemployed, single parent families and people who are living on fixed incomes, many of whom are struggling to get by on less than $350 a month and who now have to fork out $20, $30, or $40 per month more for food.
Rather than have these people resort to perhaps the only means they will have-that of perhaps going out to buy dog food to feed themselves-and rather than relying on programs that simply do not work, what assistance, what hope, can the minister give these people, other than the counselling given them by the Prime Minister, that they should spend less on other essential goods? I ask the minister what hope is there for them, and I ask every backbench Liberal member of Parliament to join in that plea.


Allan Joseph MacEachen: Madam Speaker, 1 want to remind the hon. member that 1 regard inflation as a very serious problem and especially its impact upon, not only all Canadians, but the groups which we have been discussing during the oral question period. I have explained that at the present time, because of action taken by this Parliament through a variety of programs, there is built into these programs basic protection against inflation. For 1980 that protection will amount to about $3 billion.
I would ask the hon. member who is so indignant to remind herself that last December the former minister of finance-


Mr. Malone:: Get off that kick.


Allan Joseph MacEachen: -was prepared to live with a rate of inflation for 1980 of 11 per cent.


Flora Isabel MacDonald: What are you doing about it?


Allan Joseph MacEachen: The rate of inflation which we are experiencing at the present time, as serious as it is, is less than 11 per cent.


Charles Joseph Clark: That is false.


Allan Joseph MacEachen: I did not hear the hon. member's voice raised for the poor in those days.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: Madam Speaker, surely the Minister of Finance is not so stupid that he does not realize that the indexing of which he spoke does not apply in the same way to the poor of this country as it does to the middle-income earners of this country. Since the minister has brought up this question of indexing and how it will apply, would he consider, instead of the formula we now have for the low-income earners of this country, a formula of indexing based on the real increases in the cost of food, transportation, housing, lodging and the cost of fuel oil for low-income families in this country so that they will receive a benefit which they are now denied?


Allan Joseph MacEachen: Madam Speaker, I remind the hon. member that the indexing that presently exists is basically for programs that affect the group in the lower third of the economy. The indexing, or the protection against inflation, is protection against real items that people use in their daily lives.


Flora Isabel MacDonald: Luxury items.


Allan Joseph MacEachen: The hon. member knows that as well as I. But what the hon. member has not told me yet is why she is prepared to live with an 11 per cent inflation rate for 1980 as projected by her colleague, the former minister of finance. Knowing as they did one year ago that the inflation rate would be 11 per cent, they even failed to take action to increase the guaranteed income supplement. That is the record of that party.


Some hon. Members:: Hear, hear!


SMALL BUSINESS
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, if hon. members opposite would return to their ridings and speak to their small business communities, it would be perfectly clear to them, as it is on our side, that this government's present policy of high interest rates is having a devastating effect on this vital sector of the economy. The Minister of State for Small Businesses, to which this question is addressed, knows full well that over the past year 6,000 businesses have declared bankruptcy. The rates in Newfoundland have been as high as 131 per cent, in Manitoba as high as 60 per cent and in Quebec the rate is 27 per cent.
1 am sure that the minister is also well aware that many more businesses-


Madam Speaker:: Order, please. Will the hon. member please put his question immediately.


Nelson Andrew Riis: My question for the Minister of State for Small Businesses is this. The only program that has been brought in to assist small business is the small business development bond, which program ends in three months.


Some hon. Members:: Question.


Nelson Andrew Riis: Is the minister going to introduce any long-term measure to help the small business community handle costs, not just new capital expenditure but inventory costs and other every day expenses which small businesses must endure? 1 ask the minister not to tell us that he is studying the matter, because you cannot meet payrolls with studies.
December 18, 1980


Hon. Charles Lapointe (Minister of State, Small Businesses):: Madam Speaker, I am aware that this is Christmas time, but the hon. member apparently looks upon the government as Merlin the Wizard, thinking that one of us will find the magic formula to solve all our problems under his pillow when getting up one morning. It is clear that the small business community in Canada is having serious difficulties because of the high interest rates.
As I indicated yesterday in the House, we are now completely reviewing all means available to small business to finance itself, in an effort to find and implement more adequate ways to help small businessmen cope with this difficult situation. For instance, we are considering possible amendments to the Small Businesses Loans Act that would include in the financing either the capital expenditures or part of the inventory costs. 1 have not yet received the findings of this review. Madam Speaker, and contrary to the hon. member's statement, present circumstances are not likely to improve because of such remarks.


Nelson Andrew Riis: Madam Speaker, does that mean, to ask the question very directly, that the minister is not planning to do anything over the next few months to provide some assistance to the small business community other than the small business development bond, which program expires at the end of March?


Charles Lapointe: Madam Speaker, had the hon. member listened to my reply instead of commenting while I was speaking, he would surely know that I did not say what he claims to be my answer.


POINTS OF ORDER
Thomas Michael McMillan: Madam Speaker, earlier today before question period I moved a motion under Standing Order 43 on a matter of urgent and pressing necessity. That motion stressed that since the present government was elected some ten months ago on promises to manage the economy effectively, the cost of living in the Atlantic provinces has skyrocketed. The motion also pointed out that-


An hon. Member:: Order.


Thomas Michael McMillan: Madam Speaker, I will be very brief. The motion also pointed out that unemployment jumped, that the CN Express services-
Point of Order-Mr. MacGuigan


Madam Speaker:: Order, please. Will the hon. member please tell me what his point of order is? We heard the motion during the period reserved for motions under Standing Order 43. The hon. member is now asking to be heard on a point of order, and I would like to hear what it is.


Thomas Michael McMillan: Madam Speaker, the motion, as you will recall, called on Liberal members of Parliament to urge the Minister of Finance (Mr. MacEachen) to take serious measures to redress the very critical economic problems in the Atlantic region. 1 have been assured by my colleagues that no member in our party voted against the motion.


An hon. Member:: Order.


Thomas Michael McMillan: My simple question to you, Madam Speaker, is this: since I have also been assured by members of the New Democratic Party that they did not vote against that motion, would you indicate to me, to my colleagues and to other interested members, who actually did express opposition to my motion, and from what direction any expression of opposition might have come?


Some hon. Members:: Hear, hear!


Madam Speaker:: Order, please. The Speaker determines from hearing the yeas and nays whether there is unanimous consent given to a motion moved under Standing Order 43. Those who say no to Standing Order 43 shall be nameless. The Speaker usually does not recognize who has said no or who has said yes. As a matter of fact 1 look right in front of me, but 1 use my two ears. 1 heard some noes, and I believe the Speaker is the final judge on that matter.


Mr. Paproski:: Were they from your right or from your left, Madam Speaker?
MR. MacGUIGAN-CORRECTION OF ERRONEOUS STATEMENT


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, I rise on a point of order. I regret that I inadvertently misled the House yesterday afternoon in replying to a question from the Leader of the Opposition (Mr. Clark) concerning U.S. representations with respect to the national energy program. After question period yesterday I learned that, in my absence abroad the previous week, the department did receive U.S. representations with respect to some aspects of the national energy program.
1 can confirm that these representations were in the nature of comments and requests for clarification and that successful discussions have since taken place with U.S. officials which reassured them that the program will be implemented in accordance with Canada's international obligations and undertakings.

December 18, 1980
Point of Order-Mr. Paproski


Charles Joseph Clark: Madam Speaker, I rise on the same point of order. First, let me thank the minister for telephoning yesterday to advise me of his inadvertent misleading of the House. His answer leaves open questions as to whether there is a danger that, as a result of the energy policy introduced by this government, the United States, or any other country, will invoke action under GATT; will invoke action under the U.S. mines, minerals and lands act; will invoke action of the OECD; and whether there is going to be any impediment or deterioration of the Canadian position in relation to the fisheries treaty; our representations on Garrison, our representations on the "Buy American" program, and whether there will be any other dangerous impact to Canada which will cost us more in terms of jobs or in terms of investment than the government's energy policy has already cost Canada. We want to hear from the minister in some detail as to just how much this policy will cost Canada. We know about the jobs which are being lost in western Canada, Ontario, and Quebec, but we want to know what new dangers loom as a result of international objections to an energy policy which was framed without the participation of the Department of External Affairs.


MR. PAPROSKI-PROCEDURE RESPECTING S O. 43 MOTION
Steve Eugene Paproski: Madam Speaker, 1 rise on a point of order. It concerns the same point of order raised by the hon. member for Hillsborough (Mr. McMillan). Madam Speaker, when you heard the noes, did you hear them from your right hand side or from your left hand side? On this side of the House we agreed to the motion, so the disagreement must have been from the other side.
I would like to add that there is no place in either May's or Beauchesne which says that the hon. member who said no should not stand up and be recognized. 1 have tried to find something in the rule books. If it is the hon. member for York East (Mr. Collenette) who keeps saying no, I wish he would get up so the people of this country can see who it is who is saying no to all our motions under Standing Order 43.


Some hon. Members:: Hear, hear!


Some hon. Members:: No!


Some hon. Members:: Oh, oh!


Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, I simply rise to underline the answer which you gave to the hon. member for Hillsborough (Mr. McMillan). A little earlier today a motion was put by my colleague, the hon. member for Don Valley East (Mr. Smith), concerning the Wallenberg case. This same motion was moved a couple of weeks ago and passed this House, and no one on this side of the House said no. What is good for the goose is good for the gander. No matter on which
side of the House members sit, hon. members should rely on your judgment and your hearing ability.


Steve Eugene Paproski: Madam Speaker, I just want to apologize-


Madam Speaker:: Order, please. I have already heard the hon. member for Edmonton North (Mr. Paproski). I must reiterate that I heard hon. members saying no. When 1 hear noes, the Standing Order does not obligate me, or the members, to identify who said no, or from which side of the House they came. I can only tell the House that I heard noes, and they did not come from heaven!


BUSINESS OF THE HOUSE
Walter David Baker: Madam Speaker, may 1 ask the government House leader to confirm the business which we will be dealing with when we get to orders of the day today and his expectation for tomorrow? Since the adjournment motion has been passed and we will be returning on January 12, could the House leader indicate now, as specifically as possible, the legislation we will be dealing with when we return? 1 understand we will be beginning a new cycle with respect to allotted days. Perhaps he may wish to designate the first allotted day upon our return.


Mr. Pinard:: Madam Speaker, this morning we met and agreed to deal with Bill C-34 this afternoon. It is most likely that we will vote on the amendment on second reading of that bill before five o'clock. The bill will then be sent to committee for further study. Tonight, if possible, we will be dealing with second reading stage of Bill C-50. 1 understand we have an agreement to put up only one speaker per party and to send that bill to a standing committee rather than to Committee of the Whole House. This will be followed by resuming debate on Bill C-48.
If we complete study of Bill C-50 this evening, tomorrow we will resume the debate on second reading of Bill C-48 entitled an act to regulate oil and gas interests in Canada lands and to amend the Oil and Gas Production and Conservation Act, in the hope of completing it tomorrow and referring the bill to the standing committee of the House. Should a vote become indicated tomorrow, as we have agreed, it would be put off till after the Christmas break at whatever time we then agree upon, that is, till after January 12.
Should we manage to complete study of Bill C-48 tomorrow, then we could resume the debate on second reading of the bill on January 12, when we come back and during that week.
December 18, 1980

1 want to take this opportunity to designate immediately, Wednesday, January 14, as an allotted day. Once again, if we have completed study of Bill C-48 before January 12, we can then proceed with Bill C-24 relating to fiscal transfers to the provinces.


Walter David Baker: Madam Speaker, with respect to the Customs Act, 1 understand there may be a requirement later for an order with regard to the reference to the standing committee. That is quite in order. It is my expectation that we will be able to complete consideration of that bill in the House as the hon. gentleman has indicated.


Mr. Knowles:: Madam Speaker, there are one or two points concerning which the government House leader stated that there has been agreement. I should like to confirm those arrangements. First, with respect to Bill C-50, the bill having to do with the Customs Act, it is agreed there will be only one speaker per party at second reading. It is also agreed that after second reading the bill can be referred to the Standing Committee on Finance, Trade and Economic Affairs instead of to Committee of the Whole. I also confirm the agreement that if consideration of Bill C-48 is completed some time tomorrow and a vote is called for, the taking of that recorded vote will be deferred until we return in January.
While I am on my feet and while we are dealing with House business, I should like to make two or three suggestions to the government House leader. 1 make them very urgently. After today's discussion, surely he must realize that the House will be expecting some economic measures in January to deal with the situation the country faces. I hope that serious consideration will be given to that fact by the government.
Second, I hope that some time early in the new year the freedom of information legislation will be brought forward. That has been dangled before the House and the country for a long time. It is time for action on that piece of legislation.
My third suggestion to the government House leader is that he talk very seriously to the Acting Minister of Veterans Affairs about bringing in the necessary legislation to shorten the phasing-in period in the act under which widows of disabled veterans get pensions. That six and a half year phasing-in period is one that all of us in this House dislike. I hope we can look forward to that phasing-in period being eliminated, or at least shortened, early in the new year.


Yvon Pinard: Madam Speaker, when Parliament was called back early in October we publicly stated that we wanted to deal with three major issues facing the country, namely, the constitution, the economy, and energy. That is what we have been doing since then and what we intend to do when we return January 12. That is why I stated we will again deal with the energy bill if debate is not completed tomorrow. Following the energy bill, we will have budget bills and tax measures. As the hon. member well knows, we will also deal with the constitution. When the resolution comes back from committee, the House will deal with that as well.
Business of the House
I say to the hon. member that we will continue dealing with legislation related to the major issues in the country, as we have done since returning in October. Beginning January 12, we will therefore deal with the energy bill, budget bills, and, in February, the constitution. In so far as access to information is concerned, I have said before, and I repeat, that we are willing to bring that bill before the House for discussion if we can have an assurance that the bill will be sent to committee after a very short period, that is, less than one day's debate. I am certain the NDP will agree to that. However, there were indications on the floor of the House that the Tory party, as is their right, will have more than one speaker. I have no assurance that this will get to committee within a day. It is very difficult for the government to cope with energy matters, economic matters and the constitution and, at the same time, deal with some of the other bills on the order paper.
Finally, in so far as the hon. member's request with regard to veterans is concerned, I know he has directed these questions to the minister responsible. I will talk with the minister and see what he has to say on this subject.


Walter David Baker: Madam Speaker, with respect to the reference to the freedom of information bill, or access to information as it is called, I will avail myself of this opportunity to speak to the accusation that somehow or other we may be unreasonable. I hope that was not in the mind of the government with respect to speakers. 1 indicated on the floor of the House that we would agree to a short debate, but not limited to one day or one round of speakers. If I recall correctly, I think I said there would possibly be five speakers from our party. That remains the case today.
It should be made clear that the bill introduced by this government is different in two ways from Bill C-15, which 1 had the pleasure of introducing, and which was given approval. First, it combines two things, it combines freedom of information or access to information and a bill with respect to privacy. It is a much more expanded bill.
The other significant difference is that, notwithstanding the existence of the judicial review concept in it, by virtue of the wording and the broadening of the exemptions, this bill marks a return to rather than a retreat from, ministerial discretion. We want to use the short debate prior to the bill going to committee to outline to the government and the country where this bill differs, and where the cause of freedom of information is not served as well as it could have been by the other bill. I want that to be quite clear because it is important to those groups in the country and in this House who are interested in access to information,


Yvon Pinard: Madam Speaker, I repeat that the freedom of information or access to information bill and the second reading stage of it are under discussion. There will be other stages where the bill will be studied, and where there may be 40-minute speeches. If the Conservative party has five more speakers with 40 minutes each, that will represent much more debate at a preliminary stage. We are willing to discuss an agreement to shorten speeches so that the bill can be sent to

December 18, 1980
committee in a day. It will be discussed in committee. If this arrangement were made, we could deal with the bill very early in January or February and send it to committee.



ROUTINE PROCEEDINGS


Mr. George Henderson (Parliamentary Secretary to Minister of Fisheries and Oceans):: Madam Speaker, under the provisions of Standing Order 41(2), I wish to table, in both official languages, the report of the Federal-Provincial-Territorial Committee of Officials on the Freshwater Fish Marketing Corporation.


MOTION TO ADJOURN UNDER S.O. 26   THE ECONOMY EFFECTS OF RISING COST OF LIVING AND INTEREST RATES
John Edward Broadbent: Madam Speaker, I ask leave, seconded by the hon. member for Broadview-Greenwood (Mr. Rae), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the economic crisis in Canada reflected in today s announcements that: (I) the cost of living increase is at the highest level since March, 1975, more than five years ago, and, (2) the Bank of Canada interest rate increase today to 17.36 per cent has broken through all previous levels.
Given the onerous burden and impact on all Canadian families and on every economic sector caused by these horrendous increases, and the fact that Parliament will not reconvene until Juanary 12, it is vitally important that this emergency debate take place today.


Madam Speaker:: Order, please. I also have received notice of a motion from the Right Hon. Leader of the Opposition (Mr. Clark) and I would call upon him now to present some of his reasons.


Charles Joseph Clark: Madam Speaker, you have a motion which would have been moved by myself, seconded by my colleague, the hon. member for Nepean-Carleton (Mr. Baker), under the same Standing Order 26, with the same purpose. We too, as 1 indicated in my notice to you, believe that the people of Canada cannot be left
in a situation where they are forced to face, without any response by the Government of Canada, a very serious economic crisis. I will not bother rereading the letter to you. 1 think your ruling on the motion introduced by my colleague, the hon. member for Oshawa (Mr. Broadbent), would also relate to the motion that I would seek leave to introduce. We believe this is a matter of the utmost gravity, and the two parties which now sit in opposition do not want the people of Canada to be left without support and left without response to this grave and deep economic crisis.


Madam Speaker:: Hon. members have heard the submissions by both the hon. member for Oshawa (Mr. Broadbent) and the Right Hon. Leader of the Opposition (Mr. Clark). 1 heard them in the order in which I had received notice. They are essentially the same, as the Right Hon. Leader of the Opposition has just said. 1 am referring, in saying this, to the terms of the notices I received in my office at the required time.
I have given very careful consideration to these notices, to the provisions of the Standing Order, and to decisions rendered in similar circumstances by my predecessors.
There is no doubt in my mind as to the importance of the subject to all members of this House, but I must admit that the Chair is faced with a difficult problem in defining the meaning of "genuine emergency" as is referred to in the exact terms of Standing Order 26(16)(a). It is difficult to define the meaning of "genuine emergency".
The Chair has on other occasions tended to resist applications dealing with matters that appeared to be of a chronic or continuing nature as opposed to sudden or unexpected occurrences. As late as last week I declined an application under Standing Order 26 on the subject of rising interest rates on exactly those grounds.
In this case both hon. members have drawn my attention to the juxtaposition of circumstances of rising interest rates, the rising cost of living index, the rising rate of inflation, and the decline in the dollar.
The hon. member for Oshawa pointed out, moreover, that because of the Christmas adjournment there will be no opportunity to debate any of these matters for a period of three weeks.
I am also aware that from time to time my predecessors permitted debate on matters which, although essentially of a continuing nature, had reached a stage which might be described as acute. For example, on February 22, 1978, Mr. Speaker Jerome accepted an application, on the decline in the Canadian dollar, and there are other precedents by predecessors to Mr. Jerome to this effect when they accepted applications for debate. In doing so Mr. Jerome said, in part, the following:
However, as I have also said many times in the past, there is one very important aspect of debates pursuant to Standing Order 26, and that is that they are always on a topic that is immediately relevant, of attention and concern throughout the nation, and therefore provide members of this House with an opportunity to discuss matters of importance at a time when they are immediately relevant and on the mind of the Canadian public.
December 18, 1980

Therefore I am reluctant to take too restrictive a stance in such a way as to frustrate the operation of the rule, for I have said in the past that if a rule is on the books it obviously means there are occasions on which it must be permitted to precipitate a discussion. Yet, in order to do so, I am called upon to make a value judgment, it seems to me, as to whether or not a situation is an emergency.
1 am faced today with exactly the same necessity, that is, to make a value judgment in this case, and, while 1 recognize that any one of the elements referred to might be considered chronic, I recognize also the added relevance of the juxtaposition of a number of such elements in the applications before me.
Additionally, I am required to have regard, and this is perhaps not as strong as the conditions laid down by the Standing Order, to the probability of the matter coming before this House within reasonable time. We are adjourning tomorrow and there will be no opportunity to debate this matter, as was possible in different circumstances and when I had to look more restrictively at subsection (16)(a) of the Standing Order. 1 am, therefore, inclined in these circumstances to give the benefit of the doubt to the member and to accept the application of the hon. member for Oshawa whose notice I received first.
Does the hon. member have leave to proceed?


Some hon. Members:: Agreed.


Madam Speaker:: Therefore the hon. member will be allowed to proceed at 8 p.m. this evening.




[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David Michael Collenette: Madam Speaker, the following questions will be answered today: Nos. 1,748, 1,749, 1,755, 1,756, 1,761 and 1,764.


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Department of External Affairs for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Mark R. MacGuigan: (a) $80,000; (b) $2,199,000; (c) $3,082,000.


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Department of Finance for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?
Order Paper Questions


Hon. Pierre Bussieres (Minister of State, Finance):: In so
far as the Department of Finance is concerned: *(a), (b) and (c) $4,227,000.
*Note: Projected expenditures for media advertising, free or subsidized publications and other information cannot be separated so one total amount only can be provided.


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Department of Labour for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Hon. Gerald Regan (Minister of Labour):: Labour Canada	Fitness and Amateur Sport
(a)	$11,000
(b)	$290,164
(c)	$69,675
(a)	$15,000
(b)	$237,900
(c)	$347,200


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Department of National Defence for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Mrs. Ursula Appolloni (Parliamentary Secretary to Minister of National Defence):: (a)	DND's advertising is oriented entirely toward the recruitment of personnel. Media advertising consisting of radio, television, newspaper, magazines, yellow pages etc. is estimated for 1980/81 to cost $3,875,000.
(b)	Free or subsidized publication such as posters, pamphlets, brochures, film clips etc. is estimated to cost $375,000.
(c)	Other information such as the magazines Sentinel and the annual Defence Review are principally for internal information although a quantity is also distributed to external publics. The projected expenditure is $300,-
000.


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Ministry of State for Science and Technology for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Mr. Roger Simmons (Parliamentary Secretary to Minister of State for Science and Technology and Minister of the Environment):: In so far as the Ministry of State for Science and Technology is concerned: the Ministry of State for Science and Technology projects the following expenditures for the current fiscal year.
(a)	Nil;
(b)	$136,267;
(c)	$144,000.

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Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Department of Transport for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Mr. Robert Boekstael (Parliamentary Secretary to Minister of Transport):: (a) $ 1,1 57,000; (b) $866,000; (c) $552,000.


David Michael Collenette: I ask, Madam Speaker, that the remaining questions be allowed to stand.


Madam Speaker:: Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Friday, December 12, consideration of the motion of Mr. Chretien that Bill C-34, to amend the Judges Act and certain other acts in consequence thereof, be read the second time and referred to the Standing Committee on Justice and Legal Affairs, and on the amendment of Mr. Knowles (p. 5730).
Miss Pauline Jewett (New Westminster-Coquitlam):: Madam Speaker, the portion of the bill I should like to address my remarks to, and which I began the other day, is that portion making provision for 20 new judiciary positions. The reason I am anxious to address my remarks to this section in particular is partly that it has not yet been considered, but chiefly because it is of great importance to the women of this country.
At the moment there are 657 federally appointed judges in Canada, of whom 20 are women, that is, 3 per cent are women. Of the 20 who are women all but two have been appointed since 1971. During this same period since January 1, 1971, almost a ten-year period, the total number of judges appointed has been 418. The 18 women constitute 4.3 per cent of the number of judges appointed by the federal government in the past ten years. Of these 18, plus the two others who were appointed before 1971, eight are county and district court judges, eleven are superior and supreme court judges in the provinces, and one is an appeal court judge. That one, of course, is the most senior of the 20 and, as hon. members know, is the hon. Madam Justice Claire L'Heureux-Dube of the Quebec Appeal Court.
None of the appointments which were made in the decade of the seventies were to the Supreme Court of Canada. Since the
origin of the Supreme Court of Canada in 1875 there has been an absolute male preference in the 59 appointments which have been made.
The first woman in the British Empire actually to be admitted to the practice of law was admitted in Canada, in Ontario. She was Clara Brett Martin. She was admitted to the practice of law in Ontario in 1897. Since that time no woman lawyer has been appointed to the Supreme Court of Canada, something which led the Royal Commission on the Status of Women in its February, 1970, report to recommend that the federal government name more women judges to all courts within its jurisdiction. Even since this recommendation, as I have already pointed out, so few were appointed that of all the appointments made in the 1970s only 4.3 per cent were women, and of the eight appointed by the federal government to the Supreme Court of Canada all have been men.
I would like also to point out that there are at the present time no women superior or supreme court judges in six provinces. Those provinces are Newfoundland, Prince Edward Island, New Brunswick, Manitoba, Saskatchewan, and Alberta. The amendment in this bill to the Judges Act providing for 20 additional judicial positions can go a long way toward rectifying this situation at least in three of the provinces where there are now no women judges in the superior or supreme courts, because for Manitoba there will be one additional judge on the Court of Queen's Bench. For Saskatchewan provision is being made for two additional judges on the court of appeal and two additional judges on the Court of Queen's Bench.
For Alberta there will be a new position of associate chief justice of the Court of Queen's Bench, and there will be four additional justices of the Court of Queen's Bench. The other new provisions for judges are one additional district court judge for Newfoundland, one additional superior court judge for Quebec, three additional country and district court judges for Ontario, one additional judge on the British Columbia court of appeal, two additional county court judges in British Columbia as well as an additional judge on the supreme court of the Yukon Territory and one additional judge on the supreme court of the Northwest Territories.
During the meetings of the Standing Committee on Justice and Legal Affairs a few weeks ago the Minister of Justice (Mr. Chretien)-and I am glad to see that he is in the House-said that more women are becoming lawyers but that there are often no qualified women candidates when judges are needed. I wonder if the Minister of Justice really examined the very large number of outstanding women who are qualified for judicial appointments because, if he had examined the number and their qualifications-even taking into consideration the ten-year rule, that is to say, one should have been practising law for ten years before being appointed a judge-he would have found a very large number of women in every province of Canada who are qualified.
Indeed, there are outstanding women. When the minister said that there are no qualified women candidates when judges are needed, I wonder if what he meant was that there are not
December 18, 1980

enough past presidents of the Liberal party who are women because, if that is what he meant, then that is true too.
It is particularly interesting to look at the minister's own department, the Department of Justice, and to see the number of women in the department who are lawyers. 1 think there were 574 people in the LA occupational group in the public service in 1979, the vast bulk of whom were in the Department of Justice. Women constituted close to 20 per cent of that group. There are clearly, then, in the minister's own department a number of very highly qualified women, so 1 suppose it is only when the minister looks outside his department that he makes the decision that there are no highly qualified women in the practice of law.
I am glad to put on the record another very interesting statistic. Of the new appointments made in 1979 to the LA occupational group from outside the public service, 40.3 per cent were women. I find this to be one of the most encouraging developments in an otherwise often gloomy scene for women in the public service in professional groups.
The minister went on to say that he would not name a woman "just because she is a woman". But that is exactly why he should appoint a woman. Let us look at the history just of Supreme Court decisions alone in the past decade when there have been no women on the court. Indeed, there are still none on the Supreme Court of Canada. We could go back even earlier to the famous "persons" case of 1928. As the minister knows, the Supreme Court of Canada decided that women were not persons. Then, during the seventies, the Supreme Court of Canada decided that discrimination against Indian women in the Indian Act does not violate equality before the law; that Stella Bliss was not discriminated against because she was a woman but, rather, a pregnant person; and again in the Bliss case that there was no discrimination because not all pregnant women were denied benefits under the Unemployment Insurance Act.
The Supreme Court of Canada also decided that Irene Murdoch had no claim to a share in the ranch on which she had for 20 years done the haying, raking, swathing, mowing, driving of the horses and tractors, the de-horning, vaccinating and branding of cattle as well as the keeping of the house and the raising of four children because she had done "no more than what a normal farm wife would do".
What 1 am in fact wanting to emphasize as strongly as I can is that the absence of women in the judiciary has itself had an enormously important bearing on the treatment of women in the sex equality cases which have come before the court.
It is interesting that the government is most anxious to ensure that there be civil law justices on the Supreme Court of Canada because of the importance of ensuring that questions relating to the civil law of Quebec are determined by judges trained in that law and, indeed, in the government's proposed constitutional amendment bill of 1978 there was a provision for an 11-member Supreme Court of Canada, four of whom would have been appointed from Quebec. This is something that is quite logical.
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If judges lack the requisite skill and expertise required to decide civil law cases, then you do not have fairness given in those cases. But surely the same principle, the same analogy, applies exactly in the case of women. In other words, can it not also be argued that male judges may lack what Paul Weiler has called "the essential trait of judicial attitude", namely, "impartial and impersonal judgment" when deciding cases where sex inequality has been alleged by women?
It is generally agreed by the scholars who have done research in this field that there are two main reasons why men may lack impartiality in sex equality cases. First, the men never experience the deprivations from personhood which women face during their lifetime, nor is it sufficient for a male judge to experience vicariously the deprivations of the women with whom he is on close terms. The distance between being and perceiving can never be completely bridged, even by the most sympathetic male judge.
Two very interesting studies have been done recently, and both were referred to in the paper presented by the Canadian Advisory Council on the Status of Women to the constitutional committee. One was a study of American cases carried out in 1971 by two middle-aged, white, male, law professors, and this their self-characterization. They analysed a representative selection of American judicial opinions in which the judges were responding to allegations of sex discrimination. Their conclusion was that the performance of American judges in sex discrimination decisions ranged from "poor to abominable." The judges "failed to bring to sex discrimination cases those judicial virtues of detachment, reflection and critical analysis which have served them so well with respect to other sensitive social issues". The authors found particularly noteworthy the contrast between judicial attitudes in the sex discrimination cases and those in the race discrimination cases. I found this particularly interesting when they reported:
Judges have largely freed themselves from patterns of thought that can be stigmatized as "racist"-at least their opinions in that area exhibit a conscious attempt to free themselves from habits of stereotypical thought with regard to discrimination based on colour. With respect to sex discrimination, however, the story is different. "Sexism"-the making of unjustified (or at least unsupported) assumptions about individual capabilities, interests, goals and social roles solely on the basis of sex differences-is as easily discernible in contemporary judicial opinions as racism ever was.
Then the American study proceeded to offer suggestions as to the reasons why American male judges should have difficulty perceiving the harmful effects of sex discrimination. The initial reason was the judges' lack of knowledge and awareness of the injurious effects of sex discrimination, a lacuna which might be compounded if the judges over generalized from their personal experiences because those women with whom the judges were in daily contact were likely to appear happy and satisfied.
The study went on to suggest that even if male judges could understand the harmful effects of sex discrimination, their personal attitudes might deter them from granting the appropriate relief. It is the likelihood that these personal attitudes might consciously or unconsciously intrude, that provides the

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second reason why male judges may lack impartiality in sex equality cases.
As we all know, a person is conditioned to conform to the social role expected of his or her sex. The process starts at birth with the question: is it a boy or a girl? It sometimes seems as if the nine months before birth-I am continuing with the report prepared by the council-is the only period in which it is really acceptable to ignore the dictates of social sex roles in favour of at least a female-male duality kind of personhood, if not a common status of personhood.
The conditioning process for one sex role is tantamount to rejection of the other sex role for any one person. If the impartiality expected of judges includes empathizing with both parties, then in sex equality cases judges would be required to fight their own sex role conditioning in order to empathize with female complainants. When the issue concerns not the secondary sex role differences of equal pay and equal opportunity, but the inherent sex differences of the sexual activity of marriage as in the Lavell case, or of pregnancy as in the Bliss case, then the barriers, the study concluded, to male judicial empathy may be insurmountable.
The second study referred to is a British study called "Sexism and the Law", and it goes even further. It adopted the approach that "judicial pronouncements about females masked specific and discoverable material interests", and that such hidden material interests provided a better explanation of the survival of the values of masculine supremacy "than the mere cultural inertia suggested by socialization theory". The specific material interest which caused men to resist equality between the sexes, this study found, was an "interest in keeping women as head servants at home and keeping them out of the ranks of competitors at work". The implication of this conflict of material interest explanation for the judiciary is that changing the situation would require more than re-educating the male judges. It would require the appointment of women to the bench, and in our case above all to the Supreme Court of Canada as the court of final appeal, in such numbers that they would be representative of the number of women in Canada.
In short, these studies have provided very solid explanations for why the judiciary in Canada has not yet been able, despite the words "equality before the law", and partly because of those words, to see women as genuinely equal with men. If the process of adding women to the courts, proceeding at the rate of the 1970s where the number of female federally appointed judges only went up from 3 per cent to 4.3 per cent, continues, then it will be decades and decades, well into the next century, before women can be assured that there will be on the judiciary at all levels judges who are themselves also women.
In view of what I said earlier about the outstanding pool of lawyers which is now available, I do not have the exact figures, but I would estimate that in 1980, for Canada as a whole, the number of women lawyers who have been practising actively for ten years would constitute close to 15 per cent of the total number of lawyers-and in 1980, given the numbers in the law schools and recently emerging from the law schools, that
might well go to one-third of the total eligible applicants for the federal judiciary-right today there are many more than the minister or the government seem to be aware of.
1 would therefore suggest that when this bill goes to committee, very serious consideration be given to an amendment which would provide for the appointment of women initially in the 20 positions which are being added in this bill. Even if all 20 new positions were filled by women judges, the percentage of women to men in the judiciary would rise only from 3 per cent to 6 per cent. I want to impress upon hon. members that it is not good enough to say, "Well, perhaps one or two". 1 am afraid we will never make progress if that attitude is taken.


Some hon. Members:: Hear, hear!


Mr. Howard Crosby (Halifax West):: Mr. Speaker, I am glad of the opportunity to make some remarks on Bill C-34 to amend the Judges Act. Let me review very briefly the purpose of this bill as described by the Minister of Justice (Mr. Chretien) when he introduced it.
In brief summary the bill has five main objectives. First, it provides an immediate increase in the salaries of judges of an amount, designated for a two-year period in 1979-80 and 1980-81, of $13,000 for superior court judges and $15,000 for district or county court judges. This would be in addition to the salaries they are receiving at present which were fixed, as I understand it, in 1975. The result of the immediate increase proposed by the bill is that with respect to superior court judges across Canada, excluding the chief justice of the superior court and the chief justices and judges of the Supreme Court of Canada and the Federal Court of Canada, the basic salary would be $67,000 for superior court judges and $52,000 for district or county court judges.
The second purpose of the bill is to provide a system for automatic increases in the salaries of judges on an indexing basis. This would commence April 1, 1981. 1 understand the indexing would probably provide for an increase in the range of 7 per cent.
The third purpose of the bill is to vary the pension benefits now provided for judges. I want to speak more carefully about that aspect of the bill later, but for the moment, the pension benefits will be varied in some cases to provide for contributions by the judges. There still remains very much a part of the pension plan for judges in Canada a non-contributory aspect which is of great concern to many people.
The fourth purpose of the bill is to increase allowances for judges in relation to representation and other matters.
Finally the bill provides for an increase in the number of judges which the federal government can appoint to the various courts in Canada. 1 understand that increase amounts to approximately 20 judges.
Let us look at some of the more general facts which are relevant to the five proposed changes in Bill C-34. As I understand it, there are approximately 650 judges in Canada.
December 18, 1980

My colleague just mentioned that the exact number was 657. Also, as I understand it, there are approximately $35 million in salaries paid to superior court judges who are appointed by the federal government and this increase in their salaries will amount to approximately $4.5 million. This is exclusive of the other increases and benefits to pensions and changes in the allowances provided for judges which are also a part of this bill.
I have given those round figures so that the House will know the basic dollar value with which we are dealing in the bill. As I said, the increases amount to something approximating $4.5 million, and we are talking about a total expenditure on the salaries of judges at present of $35 million. These figures taken alone are very impressive. They involve great and vast amounts of money, but if we think of some of the other expenditures of the Government of Canada, they pale by comparison. Just to throw one figure out for the record, we were informed in the House the other day that Mirabel airport lost $192 million over less than a five-year period. When we are talking about the current amounts of judges' salaries and the amount they will receive if the bill receives passage, we are talking about a relatively small amount in relation to the kinds of expenditures carried out by the Government of Canada. I do not mean that in any way to minimize the matter, but simply to put it in the perspective of all government expenditures. We all know that at present the government spends approximately $61 billion on various government services. In that sense and in that context, we are dealing with a relatively small amount of money.
I should like to look very briefly at the background of the Judges Act, and why we are dealing with this matter. I want to point out to those members who are not already aware of it, although it has been pointed out in the debate, that the British North America Act, our constitution which is receiving so much attention as a result of the resolution introduced in the House, makes very specific provisions for judges. Section 96 of the act requires the Governor General, acting on the advice of the federal cabinet, to appoint all the superior, district and county court judges in each province. That provision was put there very purposely. It was to ensure that the appointment power in respect of superior, district and county court judges across Canada remained in federal hands, even though the work carried out by these judges is basically done in the provinces of Canada. The provision was designed and intended to ensure an independent element in the judiciary. I believe it is very important to our system that the independence of the judiciary be preserved. 1 want to look at the bill in that context, the independence of the judiciary in Canada.
I should like to add to my remarks with respect to the British North America Act. Section 100 provides that the salaries, allowances and pensions of judges of the superior, district and county courts must be provided by the Parliament of Canada. Under section 100 of the British North America Act, the Parliament of Canada has the obligation to fix and provide the salaries, allowances and pensions of the judges of Canada. I want to deal with that aspect of the matter a little more carefully when I talk about pensions, but I say for the moment-and 1 want it recorded and underlined-that this
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provision was passed by the Parliament of the United Kingdom in 1867. In 1867 the Parliament of the United Kingdom said that the Parliament of Canada must provide pensions for the federally-appointed judges of Canada.
At that time I do not believe there was in force in the Public Service of Canada a pension scheme such as the one of today, nor in private industry, nor in other provincial governments. When the Parliament of the United Kingdom enacted, with the consent and concurrence of the Fathers of Confederation, that the Parliament of Canada must provide salaries and pensions for the judges of Canada, we must consider the context in which that provision was made. It was not in the context of current pension plans.
I believe this was a benefit and a consideration made in respect of the judges of Canada to ensure independence of the judiciary. I want to return to that point and underline it, because I think it is a very important consideration and one that, in all fairness to the judiciary of Canada, should be brought not only to the attention of the House but to the attention of every Canadian citizen. We are dealing with more than just a matter of money. We are dealing with a very important constitutional principle. The independence of the judiciary of Canada is very much a part of our governmental system in this democratic nation.


Walter David Baker: That is precisely the case.


Howard Edward Crosby: Let me look at the background in another context and explain the judicial system of Canada very briefly, so that we can consider this bill in that context. We have in Canada a system of judges which involves federally and pro-vincially-appointed judges. To use the term which is generally applied, we have superior courts in Canada and inferior courts. The manpower of the superior courts are the judges appointed by the Government of Canada pursuant to the provisions of the British North America Act, and they are superior court judges. On the other hand we have in each province provincial-ly-constituted courts and provincially-appointed judges, who are generally called inferior court judges. That name in no way implies a lesser level of judicial service. It is just a distinction, a term which is used to distinguish between superior courts on the one hand, the judges of which are federally appointed, and inferior courts or provincial courts on the other hand, the judges of which are provincially appointed.
This immediately has an important reference in relation to salary, because at the present time the salary of a superior court judge, federally appointed, is $54,000, and in the province of Ontario, as a result of statutory revisions involving indexing, I understand that this year, and at this very moment, provincially-appointed judges are receiving approximately $57,200. So we have a paradox here before us wherein the provincially-appointed judges in Ontario, and I believe also in Quebec and possibly other parts of Canada are, in fact, receiving a greater salary than the federally-appointed superior court judges. That alone makes the case for Canadian judges.

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I would like to add one or two points with respect to the considerations of the salary level of judges at present in Canada, bearing in mind that in some provinces, as I have already pointed out, provincially-appointed judges receive more funds. It has been said that a federally-appointed judge, married and with two dependants, who receives this increase will pay approximately 47 per cent of that increase directly in income tax. So what we are doing here, if we pass this amendment to the Judges Act and provide these additional funds to judges, is simply giving the judges two dollars and taking back one. I think that is a valid consideration when anybody in this House stands and says that this is a giveaway to the judges of Canada, since in most cases the federal treasury will be receiving back at income tax time approximately one of every two dollars it gives away.
We should also look at the salaries of our federally-appointed judges in the context of the federal public service. I am told, and I believe, that the deputy minister classification, the highest classification, which is DM-3, provides at the highest level a rate of pay of $78,000. That rate of pay is substantially more than a superior court judge would receive under this bill. That is, there are now deputy ministers in the Public Service of Canada eligible to receive $78,000, whereas this proposal before us in these amendments to the Judges Act would provide a superior court judge with a salary of $67,000. So when I make that comparison, and on the basis of my experience, I have little difficulty in supporting this increase, when 1 think that people like the great Michael Pitfield and some of our other dedicated bureaucrats are in a salary range higher than our superior court judges. And they do not have the restrictions placed on them which our superior court judges have.
There are other considerations which I could bring to light with respect to this. We have all received from time to time information on the salaries paid to corporate executives in Canada, for example, to the president of Petro-Canada and other people in the public service as opposed to the private sector. 1 firmly believe that the private sector can pay whatever salaries it pleases to its chief corporate officers or other executives. But in the public sector there ought to be an element of public justification and concern. However, 1 feel- and I will not deal with the matter any further-that the levels of salary proposed in relation to the whole of the federal public service can be easily justified.
It is enough to say, Mr. Speaker, that under this very bill, and throughout the federal statutes, many public servants' salaries are related to the salaries of the federally-appointed judges. The salary of the Commissioner of Languages is one, and the Chief Electoral Officer's salary is dictated by the provisions for federally-appointed judges. That is to say, they receive the same salary. So the principle is established and it is not new to this House or to the public service in attempting in this debate to justify the increases provided by the bill with respect to judges.
Let me make this clear. I know all about people on low incomes in Canada. I am well aware that senior citizens
receive old age assistance and guaranteed income supplements which give them an income of $4,350 a year. In the province of Nova Scotia, where the only NDP member was recently defeated, there are 36,000 unemployed, which is approximately 10 per cent of the total work force. Those unemployed are in my constituency, as they are in every constituency in the province of Nova Scotia.
For five years of my working life I worked at Legal Aid and I helped the people of Canada in my constituency and across Nova Scotia by providing free legal services. I know all about their concerns and their problems. I do not have to be told by anybody in the NDP or anyone else in Canada about the problems of poor people. But we will not solve the problems of the poor in Canada by depriving the judicial officers of this nation of the kind of salary and benefits which they ought to have in order to preserve the independence of our judicial system. What is the point, Mr. Speaker? If the $4.5 million increase which is provided to judicial salaries were applied to the increase granted recently by this government to the guaranteed income supplement, which provided to persons who receive it $35 a month extra-and what can you do with that, can you buy a car, a summer cottage, a condominium or a loaf of bread?-that $35 will buy nothing-we would have given them only 35 cents more a month. If we wiped out the judges' increase and gave it to the senior citizens we would be giving them 35 cents more a month.
So, I have walked the walk and I can talk the talk, and I do not hesitate to say there is nothing wrong with providing to the judiciary of Canada a salary and a benefit which will allow them to carry out their very important, even vital functions, in a manner which ought to be the manner dictated by our society.
We must have some sensible, objective means of providing salaries to judges and judicial officers in the future so that we will not have this problem in Parliament next year or the year after. 1 do not think any sensible member of this chamber could deny the advantages of providing a formula for future increases for judges. Indexing, under a formula, makes sense. That conforms to the standards now practised in the public service and it ought to be acceptable not only to the members of this chamber but to all Canadians.
There is one point I wish to make very clear with respect to the current increase now provided for judges, that is, that it ought to be based on the same formula. In this bill we should not be dealing with lump sum increases for judges, whether it is over a two-year period, or a shorter or longer period. We ought to be dealing with the application of a formula to cover those periods. I hope, when this bill goes to committee, it will consider that alternative. Frankly, 1 have gone over the figures and it will not result, I believe, in any substantial difference in the lump sum payment provided for judges under this bill. It will simply put it on a rational and sensible basis, that is to say, the judges will receive a retroactive increase based on the same kind of formula which will determine the increase annually in their salaries in the future. I do not see how anybody can complain about that change.
December 18, 1980

Mr. Speaker, much has been said in this debate with respect to the matter of judges' pensions. I refer in particular to the non-contributory aspects of judges' pensions. I can certainly understand why members and why the general public would complain about increases in judges' salaries, and I can understand even more why they would complain about pension benefits which were beyond those prevalent not only in the public service but in the private sector, with respect to the contributory aspects. That is to say, the judges are not required to contribute to their pension plans and programs in the same way as private citizens and public servants.
Again, 1 would point out and underline the provision of section 100 of the British North America Act and the point in time when that provision was established and enacted. 1 say pensions for judges are entirely a different thing. It may well be right and proper to review the pension benefits of judges in light of the current situation in 1980, but at the same time I think it is unfair to take advantage of those who hold a judicial office in Canada by saying that their pension benefits ought to be similar or comparable to pension benefits in the public service or in the private sector when, in fact, there is a constitutional provision requiring the Parliament of Canada to provide pension benefits forjudges.
Having said that, I think it is right and proper that this bill and any anciliary legislation that may be required in the future does bring the pension system into a sensible formula so that judges appointed by the Government of Canada can look forward to some security and, at the same time, that the financial program which provides the security be based on sensible economic facts. To the extent that the people of Canada cannot possibly afford as rich a program as is now being provided without some contribution, and to the extent that the judges of Canada realize the need for contributions, I think the provision is justifiable and a step in the right direction. However, I do not think it is a step that needs any greater justification than that Parliament is fulfilling its responsibility under section 100 of the British North America Act, to provide pensions forjudges.
Let me deal very briefly with the need for more judges. No one who practises before the courts of Canada is unaware of the workloads now experienced by most of those courts in all parts of Canada. It is well known that justice delayed is justice denied, and the failure of the courts of Canada to deal expeditiously with the cases which are brought before them causes injustices to our citizens. That is not a matter which can be smarmed over and not regarded by the Parliament of Canada. It is our obligation to ensure that the judges of Canada are sufficient in number to provide justice to those who come before them, not only in the final analysis, which is in terms of the letter of the law, but in terms of the speed with which a decision is reached.
1 personally have experienced delays before the courts that I believe have led to injustices. The excuse was always given that the workload of the judges was too great and that more judges
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were required. That is not a matter which any of us in this House can deal with individually. It has been represented time and again that more judges are required. So any method to increase the number of judges available to work in the courts and provide the justice which is required by so many people, ought to be very carefully considered by this House and by the people of Canada.
There is one aspect of the appointment of judges which must be brought to the attention of this House, and that is the allegation which is made, with some merit, that the appointment of judges in this country involves political partisanship. I do not know how one changes this practice which has gone on probably since the beginning of Canada, but it is certainly a practice that ought to be changed. I do not mean that it should be changed through any token references to the Canadian Bar Association or token appointments of persons whose political faith is different from that of the government in power. 1 mean that it should be changed by some sensible method which would provide judges across this country whose qualifications are recognized by all those who are knowledgeable, and accepted by all those who come before those judges, and whose qualification is not the political party with whom they had been associated in their pre-appointment life.
I have spoken and had the occasion to make this representation to the Minister of Justice, and 1 asked him to consider the establishment of some group, body, or organization representing all the people of Canada-not the lawyers of Canada and certainly not the Canadian Bar Association-who would pass some judgment on proposals for judicial appointments. I think it is a great failure of our system-and 1 do not mind saying it here because 1 have said it in many other places-that we do not have greater control among the public over the appointments to our superior courts. I say very simply to the Minister of Justice that such appointments should be made with the approval of the people of Canada. I do not have any special objection to the minister as a person, but I do not think he should wield that kind of power in this country, and I think that because there are matters of grave public importance which come before the courts.
Right now we in the province of Nova Scotia are vitally concerned with the question of ownership of offshore resources which the Government of Canada has seized and taken away from the province under the oil and gas legislation which is now before the House in the form of Bill C-48. That matter may have to be decided by the courts of Canada and, if so, we want definite assurances that the members of that court do not hold any political allegiances which might affect their judgment.
Let me say, in closing, that while there are many provisions of this bill to which members of this House have raised very legitimate objections, there is in this bill the provision which I think will help ensure a truly independent judiciary in Canada. It is the pith and substance of this bill, and it ought to be given the most important consideration in this House, and that is that our concern ought to be for the independence of the

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judiciary as a very important element of our constitutional government in Canada.
I stand behind that provision. 1 know it is very easy to compare the salaries being paid to judges to the amounts being paid to our senior citizens and to the amounts being paid to our 36,000 unemployed in Nova Scotia under the unemployment insurance program, but I say that there is a principle involved which we cannot afford to overlook if we want a nation that is strong and in which justice is preserved.


Hon. Elmer M. MacKay (Central Nova):: Mr. Speaker, 1 listened with great deal of attention to the distinguished speakers who have spoken before me this afternoon and also, I believe, on December 1. Most of them have covered the subjects in which 1 was interested in pursuing, and it would be pointless for me to go over or try to summarize again what they so eloquently said to this House. I want to assure hon. members that I will not speak for very long, because I recognize the feeling in this House that it is time we sent this bill to committee.
I just want to put on record my own feelings with respect to the judiciary, who are among the most, indeed, if not the most, important members of our society when it comes to preserving the structure of our society. Our judiciary, as the hon. member for Saskatoon West (Mr. Hnatyshyn) pointed out in his speech, has a separate and autonomous power, and pursuant to this a good judge has truly a unique role in our society. Simply put in layman's language, it is to do the right thing.
Sometimes politicians, as much as we might like to think we are doing the right thing, cannot do so for political reasons. Sometimes lawyers, because of their obligations to their clients, cannot do the right thing. But it has become well recognized that the strength of the judiciary is that a good judge can do the right thing. That is the highest mandate which a person can have in our society.
I was interested in the reasoned and eloquent argument put forward by the hon. member for New Westminster-Coquitlam (Miss Jewett) about the efficacy and, indeed, the appropriateness of appointing more women to the bench. I could not agree with her more, but 1 think that in her approach she may have left a tiny cloud on the judicial ethic by suggesting that women, if appointed to the bench, might tend to favour their own cause because of matters of gender or sex. I am sure that that is not the case. Women have sufficient intellectual capacity and other attributes not to allow this to happen.
One can always refer good-naturedly to the never ending battle between the sexes and say that no one will ever win that encounter because there is too much fraternizing with the enemy. One could also say that from time to time men have justifiable complaints about the dominance which they attribute to women. Of course, with tongue in cheek, for example, when a boy is born people ask about the mother. When a man is married, people exclaim about the beautiful bride, and when a man dies the question asked is how much did he leave? We do not want these kinds of motives involved in our judiciary.
There are now sufficiently large numbers of highly qualified women lawyers who will soon take their place on the benches of this country, whose presence will enrich the whole judicial and legal structure. 1 am sure the hon. member did not intend to say, by advocating more women on the bench, that this would automatically change to any extent the traditional concept of justice applied to litigants regardless of their gender.
I think judges themselves would welcome a committee taking a look at some of the pension provisions as soon as possible. Most members have mentioned this point. Judges in Canada recognize their need to be held in complete respect by their peers and by the people they judge. Judges would not want, indeed if it were possible, to be in a position which would put them on a different standard, making them unique within the way they contribute to their pensions. We have only to look at other members of our Canadian community, for instance, people in the diplomatic service, the military, the police and others who provide an important service to their country. They have the opportunity, and welcome it, to contribute to their pension plans. I believe our judiciary would want to do the same thing.
Probably when this matter goes to committee there will be real consideration given to some of these matters and to the projections made by the hon. member for Edmonton West (Mr. Lambert) in his excellent speech of December 1. He pointed out that with the provisions implicit in this piece of legislation, as reported in Hansard at page 5227, referring to Supreme Court justices:
Their finishing salaries will be somewhere around $215,000 in 1995.
That figure may be appropriate or it may not, but it would not hurt the committee to have a look at some of the matters which the hon. member for Edmonton West raised. The committee can have the benefit of his long experience in the House and his experience of having practised at the Bar lor many years.
I have two or three representations to make to the Minister of Justice (Mr. Chretien) who is here this afternoon. I recognize that some of these matters involve provincial jurisdiction.
1 give them to the minister in the hope that some day we may talk about it and he may see fit to refer to them. I have been of the opinion for a long time that there are many disadvantages in appointing people to the bench from a political environment when there are other more qualified people available. I am thinking of people who have never left the practice of law and are therefore more current in their legal thinking and expertise and less politically motivated and conditioned. This is one of the points which the hon. member for Halifax West (Mr. Crosby) raised in his excellent speech. In the future I would like to see fewer appointments to the bench from legislatures and parliaments, including ex-members of Parliament and ex-members of legislatures, until these people have resumed the practice of law for a few years and have been able to update themselves. In this way they would have left an environment which is not always conducive to being impartial.
December 18, 1980

1 would like to see the Minister of Justice and his provincial confreres give some consideration to merging the county and supreme courts in the provinces. I understand this has been done in the province of Alberta.
In some provinces, in particular the province of Ontario, I understand there is a law society rule which inhibits judges from returning to private practice at the Bar, as opposed to being a solicitor, if a judge resigns from the bench. Some judges who were appointed when quite young and who have served on the bench with distinction might have the inclination to return to private practice and, indeed, enrich private practice by their presence. 1 would like to see that done, without any reservations.
1 suggest to the Minister of Justice that he consider the concept of rotating judges between appellate and trial levels. This would give judges broader experience and it would serve to break down the hierarchy found within the system where one judge feels he is more superior than another. In other words, a judge should be a judge, should be a judge, when a person reaches that level.
Finally, there might be more written advocacy in leave applications to the Supreme Court of Canada and other appellate courts with a view to assisting in their case loads. This would save costs for litigants who have to pay extra for the attendance of counsel to present oral submissions, in addition to their briefs. Some of these oral submissions are not always necessary, but litigants have to pay for the attendance of counsel under the present practice. Perhaps at the high appellate court level we could look at the type of system used in the United States where certiorari is used for leave to appeal and only written material is considered. Perhaps the Minister of Justice on some occasion can comment on my observations.
I trust this bill will go to committee now, will be handled expeditiously, and that the amendments will come back and be passed into law. When they are, I hope they will be looked upon as being fair, not only by Canada's judges who, we should make sure, retain their independence and their financial security, but also fair vis-a-vis the status and the situation relating to all other Canadians.
[ Translation]


Mr. J.-Roland Comtois (Terrebonne):: Mr. Speaker, my comments on Bill C-34 to amend the Judges Act will be brief. First, I want to congratulate the Minister of Justice (Mr. Chretien) who, like his predecessors, supports the independence of our judiciary. 1 think that what is proposed in this bill will indeed help achieve this independence.
I have always supported the independence of Parliament and since my coming to the House I have championed the cause of the independence of members as well as of senators. The only thing in this bill that 1 do not favour is the non-contributory pension. 1 would like to draw a parallel with what was proposed in the Standing Committee on Management and Members' Services to the effect that not only the salaries but
Judges Act
also the pensions of members should be increased, with a 10 per cent contribution.
1 do not think that the hon. member for Winnipeg North Centre (Mr. Knowles) will say that we have been exceedingly modest with this proposed contribution. I do hope that when the government decides to implement the recommendations contained in the Mclsaac-Balcer report, it will do so with the same considerations it now has in mind to ensure and guarantee the independence of the judiciary. It should, in my opinion, act along the same lines to guarantee also the independence of members of Parliament.
Mr. Speaker, I think that by referring the matter to committee we could solve the problem. 1 know the bill also deals with widows' pensions and corrects anomalies in this regard. The main question at issue here is that we will have in Canada a special category of pensioners because judges will not be contributing, except to a very small extent to cover indexing of their pensions. I do not intend to vote against the bill at this stage because I think the government will respect the opinion of the majority of members that this clause should be amended, but I shall reserve judgment for third reading in case the issue has not been settled to the satisfaction of all members.


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Mr. Speaker, I would like to speak briefly on this issue before we vote on the two motions now before the House. The government motion is to refer the bill to committee, and I want to assure the House that when we reach committee stage 1 will be prepared to discuss all aspects of this bill. If there are appropriate changes to be made, we will do so.
I would like to explain some aspects to the House. I am sure everyone agrees there is no controversy regarding the fact that we must increase the compensation to judges. Since 1975 they have had only one increase of 7.5 per cent. There is a section in the constitution which forces the House of Commons to deal with only that class of salaries in Canada. Therefore, we should not deprive that sector of society which some claim is well compensated.
Some members tell me that I should seek the best minds available to become judges. 1 agree. However, the best people will not always accept these assignments because it involves many sacrifices.
One incentive to help persuade people to become a judge is the generous pension plan. No one denies that. It is the main incentive for many of them to accept this important appointment. Until recently the judges did not make a contribution to their pension. We now have two classes of judges, and this puts me in a very difficult position. I introduced these pension contributions when I was president of the Treasury Board and

December 18, 1980
Judges Act
I now want to withdraw them. One reason is that this creates two types of judges.
Second, when I became Minister of Justice 1 soon realized we were faced with an urgent matter. I looked at the file of the previous administration which had written to the Chief Justice of Canada and all other judges telling them the problem was to be cured, that cabinet had decided on a certain course of action.
1 had to swallow my own policy and accept the policy proposed by the former minister of justice, Mr. Flynn, in his letter to Chief Justice Laskin in December, 1979. There had been long negotiations. In August, 1978, the CBA made a report on that. In November there was the committee on judicial compensation which made a report. There was also the Dorman report. There were a lot of studies.
Following that, my predecessor proposed a package which was substantially accepted and put to this House. 1 will be appearing before the committee which will be reviewing all aspects of this. That is a better place to look at this problem. 1 know hon. members are preoccupied more with the pension plan than any other aspect of the bill. I will be delighted to discuss that in committee. We will see if we can find a solution. If not, we will come back here and make a decision.
I ask hon. members not to make this a controversial aspect. If anyone is in a difficult position it is I because I am being forced to contradict myself on the pension contribution aspect. It does not make my life very easy. I hope the bill can be referred to committee and we can find an appropriate solution to this problem.
A lot of other aspects have been raised in this House. I will not take the time to deal with them. I might comment on them in committee, if asked.
The system of appointments is complex. Since 1967 not one appointment has been made which has not been approved by the Canadian Bar. The legal profession claims the Canadian Bar is not the best mechanism. I can sympathize with that. I come from a rural area. I know of members of the Quebec Bar who worked very hard in the Gaspe Peninsula, St. Maurice valley, and the Lac St. Jean area, who were not well known by members of the Canadian Bar because they did not attend the same meetings and so on. That is a problem, and there should be some improvement.
1 am seeking to make the best appointments possible. Some are suggesting the appointment of more women as judges. There has been an improvement, but we still have to name judges according to their ability. If women can be found, that is an extra asset, no doubt about it. In the last three series of appointments I made in the last two months, I was pleased to name three women. The problem is that there are not all that many who have been admitted to the Bar lately. In connection with an appointment I am trying to make now in one of the provinces, I contacted a woman. She thanked me, but stated that she felt she was not yet ready. This person is a top notch lawyer. I do not know her politics. I did not ask.


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: The first appointment I made to the Superior Court of Quebec was the human rights commissioner in Quebec City. I had never met him in any political arena. However, it does not hurt if someone serves one party or the other. Members of different parties have been appointed, including members from the other side. One hon. member stated that we should not appoint members of Parliament directly to the bench. I am not sure I agree.
In the past, a member of the Canadian Bar who had been in this House serving the Canadian people and making laws for 15 years, was disqualified. 1 do not think that is fair.


Walter David Baker: I agree.


Joseph Jacques Jean Chrétien: Not too long ago Mr. Justice Gilbert, a former NDP member, was appointed to the bench. He is a good judge and is serving very well. We named Thomas Berger, who is not a Liberal, directly from the B.C. legislature to the Superior Court of British Columbia. The fact that he had been a politician was not a negative factor.
I am not looking for a job for myself. I enjoy politics too much to become a judge. However, I do not think a person should be disqualified because he has served his country as a member of Parliament. The former deputy speaker from Nova Scotia was appointed by the Nova Scotia government to the provincial court directly from this House. Our former speaker, Mr. Jerome, was named to the Federal Court where he is doing an excellent job. I am told that when one leaves this House, he becomes much less partisan compared to when he came here.
In any event, there are these problems and I am willing to discuss them in committee. We will look into the pension question. It is a difficult problem and there is no easy solution. The commitment made to the judges in December, 1979, is what caused me to keep the same system. As I said, I had to swallow my own words. When I was president of the Treasury Board, I made a lot of enemies among the judges because I forced some to make contributions and not others. Although it was difficult for me, I put my pride aside for the good of the judiciary in Canada.
Anyway, Mr. Speaker, the bill will be referred to committee. 1 hope we can dispose of it quickly, that it will come back to the House and be passed because, traditionally in Canada- and a very worth-while tradition it is, to my mind-the matter of the remuneration of judges has never been the subject of a political debate. The constitution stipulates that we must set the remuneration of the judiciary; they are the only group of citizens whose salaries are discussed specifically in the House, which makes it a very delicate situation, I feel.
I am sure everyone in Canada agrees that we have a judiciary that works very well. It poses very few problems. All those who have accepted the appointment, whatever their
December 18, 1980

political hue, if any, have always set aside political considerations to serve justice. In Canada, we have three orders of power: the executive, the legislative and the judiciary. In the best tradition of our public administration system, generally speaking, all the judges appointed always proved equal to the task. Very few were forced to resign. There have seldom been any unfortunate cases of scandal. I feel it is our responsibility, as members of Parliament, to ensure that the status given the members of the judiciary, that special status in our society whereby they are completely separate from the legislative and the executive orders, must be respected, the division of powers in Canada must be respected and the matter of their remuneration must not be made the topic of a political debate.
When we have looked into the matter in committee, as rapidly as possible, when we come back to the House in January, I trust we can proceed with third reading of the bill and settle the matter; after all, the judges have had only one increase of 7 per cent in six years, and it would be unfair for us not to face our responsibilities and settle the question quickly.


Mr. Robinson (Burnaby):: Mr. Speaker, 1 wonder if the hon. minister would permit a question. My question relates to a subject matter raised by a number of members, and that is the appointment of a woman to the Supreme Court of Canada. I was very pleased to hear the Parliamentary Secretary to the Minister of Justice (Mr. Irwin) state that there are many women in Canada who are presently qualified to be appointed to the Supreme Court of Canada Bench. In view of that fact, 1 wonder if the minister is prepared to give this House the commitment that he will at the time of the next appointment to the Supreme Court of Canada very seriously consider appointing one of these very well qualified women to the Supreme Court of Canada Bench?


Joseph Jacques Jean Chrétien: Mr. Speaker, I will make the commitment that if there is an opening in the Supreme Court I will be delighted if I can name a woman as the first woman to be a Supreme Court judge in Canada. In fact, when I had occasion to name only one, the last appointment to the Supreme Court from Quebec, I thoroughly looked at the possibility of naming a woman. Of course I will not name a person just because she is a woman. 1 will name the best available person to be a judge. If it should happen that among three or four or five very well qualified persons one was a woman, of course, I would give the preference to the woman. 1 would be delighted to be the first Minister of Justice to name a woman to the Supreme Court. Apparently I am a good enough politician to do that, but 1 will not just name a woman because she is a woman. 1 will appoint a judge because that is the best person to be filling that position.


Some hon. Members:: Question.


The Acting Speaker (Mr. Blaker):: Is the House ready for the question? The question is on the amendment. Is it the pleasure of the House to adopt the amendment?
Judges Act


Some hon. Members:: Agreed.


Some hon. Members:: No. The Acting Speaker (Mr. Blaker): All those in favour of the		
amendment will please say yea.


Some hon. Members:: Yea! The Acting Speaker (Mr. Blaker): All those opposed will		
please say nay.


Some hon. Members:: Nay! The Acting Speaker (Mr. Blaker): In		my opinion the nays
have it. And more than five members having risen:


The Acting Speaker (Mr. Blaker):: Cali		in the members.
The House divided on the amendment (Mr. Knowles) which		
was negatived on Althouse	the following division: {Division No. 39)
 YEAS Messrs. Jewett (Miss)	Ogle
Benjamin	Keeper	OrlikowBlackburn	Knowles	RaeBlaikie	Kristiansen	RiisBroadbent	Lewycky	RobinsonComtois	Manly	(Burnaby)Deans	Mitchell	Rosedc Jong	(Mrs.)	SkellyFulton	Murphy	Young-27.Hovdebo Allmand	Ny strom
NAYS Messrs. Clark	DommAndre	(Yellowhead)	DuboisAppolloni	Clarke	Duclos(Mrs.)	(Vancouver Quadra)	DupontAxworthy	Collenette	DuprasBachand	Cook	ElzingaBaker	Cooper	Epp(Gander-Twillingate)	Corbin	FennellBaker	Corriveau	Ferguson(Nepean-Carleton)	Cosgrove	FisherBeatty	Cote (Mrs.)	FlemingBeauchamp-Niquet	Cousineau	Flis(Mrs.)	Crosbie	ForrestallBegin (Miss)	(St. John's West)	FosterBerger	Crosby	FoxBlais	(Halifax West)	FraserBlenkarn	Crouse	FretzBloomfield	Cullen	FrithBockstael	Cyr	GambleBossy	Darling	GarantBradley	Daudlin	GassBreau	Dawson	GingrasBujold	De Bane	GreenawayBussieres	de Corneille	GuilbaultCampbell	Demers	Gustafson(Miss)	Deniger	Halliday(South West Nova)	Dinsdale	HamiltonCampbell	Dionne	(Qu'Appelle-Moose(LaSalle)	(Chicoutimi)	Mountain)Cardiff	Dionne	HargraveCarney (Miss)	(Northumberland-	HarquailChretien	Miramichi)	Hawkes
December 18, 1980
Judges Act
Messrs.	Messrs.
Henderson Hervieux-Payette (Mrs.) Hnatyshyn Hopkins Hudecki Huntington Irwin Jarvis Jelinek Johnston Joyal Kelly Kempling King Lajoie Lalonde Lambert Lamontagne Landers Lang Lapierrc Lapointe (Charlevoix) Lapointe (Beauce)
La Salle Lawrence LeBlanc Leduc Lefebvre Lewis Loiselle Lonsdale Lumley MacBain MacDonald (Miss)
During the vote:
Allmand
Andre
Appolloni
(Mrs.)
Axworthy
Bachand
Baker
(Gander-Twillingate)
Baker
(Nepean-Carleton)
MacEachen
MacGuigan
Mackasey
MacKay
MacLaren
MacLellan
Malone
Marceau
Masse
Masters
Mayer
Mazankowski
McCain
McCauley
McCuish
McDermid
McGrath
McKinnon
McLean
McRae
Munro
(Esquimalt-Saanich)
Munro
(Hamilton East) Murta Neil
Nicholson
(Miss)
N ickerson
Oberle
Olivier
Ouellet
Pa proski
Parent
Pcnner
Pepin
Peterson
Pinard
(Division No. 40)
++YEAS
Messrs.
Beatty
Beauchamp-Niquet
(Mrs.)
Begin (Miss)
Berger
Blais
Blenkarn
Bloomfield
Bockstael
Bossy
Portelance
Prud'homme
Regan
Reid
(St. Catharines) Roberts Robinson
(Etobicoke-Lakeshore)
Roche
Rompkey
Rossi
Savard
Schellenberger
Schroder
Scott
(Hamilton-Wentworth) Scott
(Victoria-Haliburton)
Shields
Siddon
Simmons
Smith
Stollery
Tardif
Taylor
Tessier
Thacker
Tobin
Tousignant
Towers
Trudeau
Turner
Vankoughnet
Veillette
Watson
Weatherhead
Wilson
Wise
Yanakis-184.
Bradley
Breau
Bujold
Bussieres
Campbell
(Miss)
(South West Nova) Campbell (LaSalle)
Cardiff
Carney (Miss)
Chretien
Clark
(Yellowhead)
Clarke
(Vancouver Quadra) Collenelte Comtois Cook Cooper Corbin Corriveau Cosgrove Cote (Mrs.)
Cousineau
Crosbie
(St. John's West) Crosby
(Halifax West) Crouse Cullen Cyr Darling Daudlin Dawson De Bane de Corneille Demers Deniger Dinsdale Dionne
(Chicoutimi)
Dionne
(Northumberland-
Miramichi)
Domm
Dubois
Duclos
Dupont
Dupras
Elzinga
Epp
Fennell
Ferguson
Fisher
Fleming
Flis
Forrestall
Foster
Fox
Francis
Fraser
Fretz
Frith
Gamble
Garant
Gass
Gingras
Greenaway
Guilbault
Gustafson
Alt house
Benjamin
Blackburn
Broadbent
Deans
de Jong
Fulton
Gauthier
Hovdebo

Halliday
Hamilton
(Qu'Appelle-Moose Mountain) Hargrave Harquail Hawkes Henderson Hervieux-Payette (Mrs.)
Hnatyshyn
Hopkins
Hudecki
Huntington
Irwin
Jarvis
Jelinek
Johnston
Joyal
Kelly
Kempling
King
Lajoie
Lalonde
Lambert
Lamontagne
Landers
Lang
Lapierrc
Lapointe
(Charlevoix)
Lapointe
(Beauce)
La Salle Lawrence LeBlanc Leduc Lefebvre Lewis Loiselle Lonsdale Lumley MacBain MacDonald (Miss)
MacEachen
MacGuigan
Mackasey
MacKay
MacLaren
MacLellan
Malone
Marceau
Masse
Masters
Mayer
Mazankowski
McCain
McCauley
McCuish
McDermid
++NAYS
Messrs.
Jewett (Miss)
Keeper
Knowles
Kristiansen
Lewycky
Manly
Mitchell
(Mrs.)
Murphy
Nystrom
McGrath
McKinnon
McLean
McRae
Munro
(Esquimalt-Saanich)
Munro
(Hamilton East)
Murta
Neil
Nicholson
(Miss)
Nickerson
Oberle
Olivier
Ouellet
Paproski
Parent
Pcnner
Pepin
Peterson
Pinard
Portelance
Prud'homme
Regan
Reid
(St. Catharines) Roberts Robinson
(Etobicoke-Lakeshore)
Roche
Rompkey
Rossi
Savard
Schellenberger
Schroder
Scott
(Hamilton-Wentworth) Scott
(Victoria-Haliburton)
Shields
Siddon
Simmons
Smith
Stollery
Tardif
Taylor
Tessier
Thacker
Tobin
Tousignant
Towers
Trudeau
Turner
Vankoughnet
Veillette
Watson
Weatherhead
Wilson
Wise
Yanakis-186.
Ogle
Orlikow
Rae
Riis
Robinson (Burnaby) Rose Skelly Young-26.


Madam Speaker:: 1 declare the motion carried.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Justice and Legal Affairs.
Madam Speaker:: Before hon. members disperse, I would like to announce that since the House will be sitting unusual


Madam Speaker:: It is clear that Mr. Comtois is opposed. I am sorry, I mean it is clear that Mr. Comtois is in favour of the amendment.
Followed by:
I declare the amendment lost.
The question is now on the main motion.
Agreed to on division.


Stanley Howard Knowles: We want a recorded vote.


PRIVATE MEMBERS' MOTIONS FOR PAPERS
Madam Speaker:: It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions (papers), private bills and public bills.
Motions Nos. 1 and 22 are allowed to stand by unanimous consent.


FRESHWATER FISH MARKETING CORPORATION
[Stage Direction]
The House resumed from Thursday, July 10, 1980, consideration of the motion of Mr. Siddon:
That an humble address be presented to His Excellency praying that he will cause to be laid before this House copies of all correspondence, telegrams or other documents exchanged between the government, its departments and agencies and the governments of Ontario, Manitoba, Saskatchewan, Alberta and the territorial council of the Northwest Territories, since January I, 1978, relating to the review and restructuring of the Freshwater Fish Marketing Corporation.
James Aloysius McGrath: Mr. Speaker, I wonder if we could have a few minutes for the House to settle down.


The Acting Speaker (Mr. Blaker):: Order, please. I wonder if hon. members would agree to hold their caucuses in the lobbies so that the hon. member for St. John's East (Mr. McGrath) may proceed.


James Aloysius McGrath: Mr. Speaker, I would like to say a few words on the motion which has been placed on the table by my colleague. I will commence by indicating that hopefully one day we will have a freedom of information act operative at least within the federal jurisdiction which would make these kinds of motions unnecessary. I see no reason why the government should take the position which it normally takes on these motions for the production of papers. I realize that we are dealing with areas of federal-provincial responsibility which would involve correspondence between the federal government and the provincial governments in this case but, notwithstanding the usual consent which one endeavours to obtain from provincial governments with regard to the tabling of such correspondence, I believe that there is no reason why the government should not accede to these normal requests to have correspondence, papers and documents relating to various subjects, tabled.
That is particularly so in the case of the motion placed before the House by my colleague. While I am not about to
Freshwater Fish Marketing Corporation
divulge any of the discussions which went on between provincial ministers and myself while I had the privilege of being the minister of fisheries and oceans for Canada, because that would be a breach of trust, I can say without breaching any confidences that, in my view, there is nothing in those exchanges which would not withstand the scrutiny of the public or examination by members of this House.
Having said that, 1 think I must also say that today the Parliamentary Secretary to the Minister of Fisheries and Oceans (Mr. Henderson) laid upon the table of the House, under Standing Order 42, the report of the federal-provincial territorial committee of officials on the Freshwater Fish Marketing Corporation. Obviously we have not had an opportunity to examine that report, although I have had a chance to glance through it. 1 would suggest that in the absence of the other related documents, the correspondence and various papers connected with the study, hon. members will be at a considerable disadvantage, especially members of the constituencies in which the Freshwater Fish Marketing Corporation plays a role in serving the needs of the fishermen.
The report which was tabled today arose out of a meeting which was held about one year ago between the federal minister of Fisheries and oceans and the five ministers of the provinces involved. Arising out of that meeting we commissioned a study by officials of federal, provincial and territorial governments. The result of that study is the document which was tabled in the House today. I wonder why it has taken so long to table that report. The report was scheduled to be presented to a meeting of ministers in Winnipeg which was planned for last April. At that meeting in April the two levels of government were to make a definite decision on the future of the Freshwater Fish Marketing Corporation.
While there have been a number of meetings at the officials' level, the meeting of the ministers has yet to take place. Perhaps the minister, if he participates in this debate, will tell us why this meeting has not taken place, and will explain why it has taken so long to lay upon the table of the House and to make public the results of the study.
I believe that the Freshwater Fish Marketing Corporation has served the fishermen of western Canada and the territories well. But the fact is it has in the last while lost the confidence of some of its clients and, hence, we had the meeting of ministers one year ago which resulted in the study now on the table of the House. I am not so sure that the problem will be solved merely by tabling the study. We must address ourselves to the political problems involved. For example, there is the problem arising out of the fact that there was, one year ago, no consensus on which way the corporation should go, how it should fulfil its mandate, whether or not it should be privatized, whether or not it should be placed under provincial jurisdiction, or whether it should remain as it is, essentially a federal Crown corporation.
1 have more than a passing interest in this corporation, not onlv from my previous role as minister of fisheries and oceans

December 18, 1980
Freshwater Fish Marketing Corporation
but because it is a sister corporation to the Canadian Saltfish Corporation. I believe the corporation is working very well and that it is doing an excellent job in serving the needs of the saltfish sector and the fishermen who salt and cure their fish in Newfoundland and Quebec. I still feel, however, that all is not well with this corporation. I believe the problem has to be addressed sooner or later. I say to my successor that the problem will not go away nor can he force it to go away by somehow sweeping it under the table and pretending the problem does not exist.
I find that it would be improper for me to go into any of the details of the discussions I had when 1 was minister, but that is for my successor to decide; that is his responsibility. I hope that the minister will accept my advice when I say to him that, in my view, there is nothing in the correspondence or in the documents which could not stand the light of public scrutiny. If these documents and letters were released, it would help members of the House who have a special interest in this corporation in trying to arrive at a determination as to exactly what future the corporation should have.


Mr. Rod Murphy (Churchill):: Mr. Speaker, I believe the Freshwater Fish Marketing Corporation is an important corporation for many people in northern Manitoba, as well as northern Ontario, parts of Saskatchewan, Alberta and the territories. A previous speaker mentioned that approximately 1.5 million square miles of Canada are covered by this act. Of those 1.5 million square miles, 176,000 square miles are in the Churchill constituency. People involved in the fishing industry in my riding are very supportive of the Freshwater Fish Marketing Corporation. Last fall there was an attempt by the Conservative government of Manitoba to privatize that corporation and to set up the old system of fish buyers coming in and running the fishing industry in northern Manitoba.
Throughout northern Manitoba fishermen living in small communities expressed their concern to the Conservative government of Manitoba. They told the government why they did not want the privatization of FFMC. Later on, the Conservative government in Manitoba tried to privatize not the buying and selling end, but the actual fishing end of the industry in northern Manitoba.
At the present time many fishing licences in northern Manitoba are operated on a community basis. For example, four fishermen from the native community of Cross Lake get a licence. Licences are normally given to the same four fishermen year after year. These licences are passed on to sons and daughters or to others in the same community-they may not be related at all-who will learn the fishing industry. What the Conservative government of Manitoba tried to do was to give individual licences to fishermen in Cross Lake telling them the licences were theirs, and they did not belong to the other 4,000 people who live in Cross Lake. The government told them they could sell their individual licences to one of their group, to someone who has never fished, or they could sell their licences outside of their native area, perhaps to someone from Winnipeg, Toronto or Montreal.
These fishermen, the majority of whom were native, had a series of public meetings throughout the north in which they expressed their concern about attempts to privatize fishing in northern Manitoba. That situation happened during the federal election. Those of us who were concerned about fishing attended those meetings. The provincial minister in charge of natural resources eventually had to withdraw his package.
The previous speaker mentioned he had received certain representations last fall from those who would like to privatize the industry. I would suggest the hon. member was getting those representations from the Manitoba government. There were others concerned about the direction in which FFMC was going, but those who wanted to privatize the corporation were basically people representing the government of Manitoba. I would say now that that same Conservative government in Manitoba, having spoken to the fishermen, would not dare to try to dismantle the Freshwater Fish Marketing Corporation at this time.
People in that industry, without any lobbyists one way or the other, have made up their minds. They knew how things went in the early 1960s prior to the introduction of the Freshwater Fish Marketing Corporation, and they know what is happening now. They know which system is better. These people know they are better served by a marketing commission which will make sure that American buyers do not come in and run the industry. They know they are better served by people in the community who actually fish and whom they can elect to the board of directors for the FFMC. They know they are better served when they can get some initial prices early in the season, and if there is a profit at the end of the year that the money will come back to the fishermen.
Many of our fishermen were becoming serfs on our lakes under the system in 1964-1965-1966. The fishermen would be working for a fishing company. They would buy their goods from that fishing company and the company would give them whatever price it felt like. People were not receiving 50 per cent of the total price. They were receiving 40 per cent of the total price, if they were lucky. They were paying higher prices for the goods they were buying from these fishing companies which had a near monopoly in northern Manitoba. The hon. member who introduced this motion called the Freshwater Fish Marketing Corporation communistic. By doing that he will make a lot of the fishermen in northern Manitoba think that communism is a great thing because they happen to like the Freshwater Fish Marketing Corporation.
People know there are some problems with the corporation. They would like to see a more aggressive selling policy and more work done in the local communities. Certainly there is always room for improvement and I would not disagree with the presentation of these papers but let us not be fooled by what the mover of this motion said.
The people who are really involved in fishing want that cornoration to be strong. They want that corporation to sell their fish and to provide initial funding for them. They do not want members from B.C., who do not understand the Freshwater Fish Marketing Corporation, to pretend to be experts. They
December 18, 1980

want those people to go to the north and listen to those who are actually fishing.
Just as the provincial minister from Manitoba did when he went north and found that he could not get one single fisherman to support his attempts to privatize the industry, I think the mover of this motion and others in this House who have that same dogmatic, privateering ideology, would find out that the fishermen want the FFMC. There is definitely a need for improvement and definitely many things could be done, but I say to hon. members not to tell the fishermen they are not looked after by the FFMC.


Mr. Siddon:: All we want to do is break the monopoly.


Rodney Edward Murphy: Yes, break the monopoly. We have heard that before. I spent this morning in the transportation committee. CN has let some of the CN Express business go to privateers. These are pool carriers. They have taken off the cream of the crop. Do hon. members know what CN is saying now? CN is saying they will have to count on the CN Express service to northern Manitoba because the cream of the crop has gone to these privateers. If that is the same thing as what the former member is asking for in the fishing industry, we will end up with a system where the fishermen will not get a good price for their product. We will end up with a system where the profitable markets are taken by those in a position to run them. Licences will no longer be owned by the fishermen or people living in the communities, but by others. We will have economic serfdom on the lakes of Manitoba.


An hon. Member:: Sounds communistic.


Rodney Edward Murphy: If that is communistic, I guess every fisherman in Manitoba is a communist. However, they do not think that. These people live off the land, trying to get a good income with their traditional way of life. They want organizations, whether it is the Freshwater Fish Marketing Corporation, CN or whatever, to help and not hurt them in that endeavour.


Mr. Michel Veillette (Champlain):: Mr. Speaker, I would like to bring my humble contribution to this debate and speak about the Freshwater Fish Marketing Corporation. It is a well known fact that our country has the largest natural supply of freshwater in the world. The figures are impressive. Of the nearly ten million square kilometres which make up the Canadian territory, about 8 per cent, or over 750,000 square kilometres, are made up of lakes and rivers which retain the annual runoff of approximately seven million and a quarter tons of water in the form of rain or snow. This is a physical reality. It is an abundant and renewable natural resource which we have the responsibility to monitor and preserve.
According to various estimates, this abundant fresh water supply represents either one-tenth or one-quarter of world fresh water supplies. This shows how lucky we are in this
Freshwater Fish Marketing Corporation regard. But there is more. The major part of this water is made up of cold water, which means the proliferation of a fish fauna which has relatively little variety, but as all experts will point out, it is extremely vigorous and prized for its excellent sporting and combative spirit.
This is why our country is known as the paradise of sports fishermen, and we should obviously be the last ones to complain about this.
I have talked, Mr. Speaker, about the fish fauna and the combative fish which proliferate in our lakes and rivers. We naturally think in this regard of salmon and trout, and we readily recognize that the reputation of these two species attracts every year hundreds of thousands of visitors, who are all eager to practice their favorite sport of fishing. This has brought us an enviable reputation for tourism. But once again, there is more.
Since the beginning of our history, freshwater fishing has provided fresh fish to the inhabitants of our country in the same way as our lakes and rivers have offered easy, abundant and varied access routes to our explorers. Because trout and whitefish get together for the spawning season, the first settlers were able to harvest large quantities of these species in the fall to salt and store them for winter.
In 1867 at the beginning of confederation, we are told that 1,700 commercial fishermen were taking 3.5 million pounds of freshwater fish in Canada. Considering the constant development of urban centres, the demand from domestic and foreign markets, the interest shown in some species such as pickerel, pike, sturgeon, freshwater fishing has gradually developed to become a lively and viable industry. The condition of commercial freshwater fisheries vary from one province to another and we are going to deal with some aspects of the administrative skills required in their operation. This reminder is valid because it is based on constitutional sharing under the British North America Act. According to the Canadian Constitution, the federal government is fully empowered to legislate in the area of offshore and continental fisheries in Canada and any legislation aimed at protecting, conserving and developing fisheries is passed by Parliament. Fisheries as such are managed with the co-operation of provincial governments which are entrusted with administrative responsibilities. For example, the Department of Fisheries and Oceans assumes its responsibilities for freshwater and saltwater fisheries in Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, as well as in the Yukon and the Northwest Territories.
On the other hand, in Ontario, Manitoba, Saskatchewan and Alberta, the fisheries are administered by the provincial authorities. In Quebec, following a decision of the Privy Council in 1922, that was added to in 1943 and finalized in 1959, the provincial government has jurisdiction over both saltwater and freshwater fishing, while the inspection of the fish and its products intended for the market outside the province is a federal government responsibility. From all we have seen till
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December 18, 1980
Economic Conditions
now, it is obvious that commercial freshwater fishing is limited to the central Canada area.
Indeed, if we sum up the situation as briefly as possible, we get three large natural fishing areas, namely, the Atlantic region, that takes in the provinces of eastern Canada, including Quebec, which is the object of special jurisdiction, the Pacific region consisting of British Columbia, and central Canada which includes the freshwater areas of Canada. On closer examination, Mr. Speaker, we can define that area even more accurately. As expressed in a working paper prepared for the first ministers' conference on the economy held from the 27th to the 29th of November, 1979, in Halifax, and I quote:
The annual production of our commercial inland fisheries (Manitoba, Saskatchewan, the Northwest Territories and Ontario) exceeds 32,522 metric tons. The catch comprises over 20 species, taken from over 800 lakes scattered over three million square kilometres of land located in central and western Canada.
May I call it six o'clock, Mr. Speaker?


The Acting Speaker (Mr. Blaker):: Order. The hour provided for the consideration of private members' business having expired, I do now leave the chair until eight o'clock this evening at which time the House will proceed to a motion seeking the adjournment of the House pursuant to Standing Order 26.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

Mr. Deputy Speaker:: Order, please. Leave has been granted to the hon. member for Oshawa (Mr. Broadbent) to move the adjournment of the House, pursuant to Standing Order 26, for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the economic crisis in Canada.
Accordingly, the motion is as follows: It is moved by Mr. Broadbent, seconded by Mr. Knowles:
That this House do now adjourn.


John Edward Broadbent: Thank you, Mr. Speaker. The Deputy Prime Minister and Minister of Finance (Mr. MacEachen), who is sitting there smiling this evening, said this afternoon in response to my suggestion during the question period that we are now faced in Canada with an economic
crisis, that I was the one who was being irresponsible, and I quote the minister.
What is the economic reality, the human reality that led me to describe the current situation as being one of crisis, which the minister denies?
I ask the minister before he speaks tonight to consider the following and then make his assertion once again that we are being irresponsible when we describe the Canadian economic and human situation as being in crisis. First, we learned today of a jump in the cost of living which is the greatest in five years. Some five years ago, in 1975, there was an increase in the cost of living which was less than the one we face today, and at that time the Liberal government of the day said there was a crisis and brought in a wage control program. However, apparently today's much greater increase does not constitute such a crisis.
Second, we learned just before question period that we now have, at 17.36 per cent, the highest level of interest rates in the history of Canada announced by the Bank of Canada.
Third, the official statistics which the Minister of Finance was so proud to quote today indicate that 853,000 Canadians are unemployed. As my colleague, the financial critic for our party, correctly pointed out in a rejoinder to the minister's claim that there are not more than one million unemployed Canadians, we contend that if we look at figures beyond the government's statistics and include all those men, women and young people who would like to work but are not included in the official statistics, there are some 1.3 million unemployed Canadians, the highest number since the great depression.
Fourth, bankruptcies among businesses across Canada from St. John's in the east to Victoria in the west in the first 11 months of 1980 number over 6,000. With respect to housing, in virtually every large city across Canada, the vacancy rate in apartments is at zero, and housing starts are down, not up. In that sector alone there is a crisis.
Finally, I come to another area of comment by the minister in the House this afternoon, and that is the manufacturing sector of the Canadian economy. It is running at only 78 per cent capacity. Turning that around means that some 22 per cent of capacity in the economy is not being used, which is one of the worst records of all industrial countries in the world.
There you have it, Mr. Speaker. I ask you and the people of Canada to judge who is describing the reality correctly, the people on this side of the House or the government of the day, when we say there is a crisis. We have massive inflation. We have massive unemployment. There are massive numbers of bankruptcies, and the minister says we are irresponsible in saying there is an economic crisis.
We do not attempt to hide the reality. We do not sit in smiling lack of concern about what is happening to the people of Canada. We see as our responsibility bringing these facts to the attention of the government and demanding action. We say that we are not irresponsible. It is the Government of Canada that is irresponsible in this reality.
December 18, 1980


Some hon. Members:: Hear, hear!


John Edward Broadbent: The reality is there for everyone but the Liberal government to see, and it is there for Canadians to experience, regrettably.
Let us look at these statistics and compare them with what the Liberals promised to do when just over a year ago they voted to bring down the government of the day, the then Conservative government, whose budget, 1 say in passing, was in our judgment every bit as bad as the Liberal budget which succeeded it. What did the Liberals say in the context of the debate then which led to the bringing down of the government in the election campaign? We know that the Minister of Industry, Trade and Commerce (Mr. Gray) said that if interest rates went up, he would go down. He said he would go out. We wish he had gone out because interest rates have certainly gone up.
In one of his few pledges, the Prime Minister (Mr. Trudeau) said that if the Liberals formed the Government of Canada again they would help first those who are most in need. 1 will not trot all the Liberal promises out because, as I indicated, there were not many, but they tried to demonstrate in their rhetoric some concern about the average and the poor in this land. The Prime Minister said, in two statements that I and my colleagues have quoted in the past ten days, that if he were elected not only would interest rates in Canada stay where they were but also that the Liberals would work to ensure that they would come down, and that the Liberals would produce an expansion in the economy and not a restriction, which the Conservative government at that time was bringing about.
What is the record following these election promises of the government? First there was the budget in October. What did the budget do? Did it help those most in need? Not at all. The Minister of Finance said with a great deal of pride that he would not announce any increases in the personal income tax. That is true. There was no increase in the personal income tax. But there were increases in the kinds of taxes which hurt the average person most. Those are indirect taxes, and there was a whole range of indirect tax changes.
As a result of the Liberal budget the average family will have to spend some $500 more in lost family income. Second, as a result of that budget alone, and because of what I have just mentioned, the cost of living for the average Canadian will go up instead of down, as the Liberals promised. In the budget an increase in unemployment levels was forecast instead of programs designed to bring unemployment down. Instead of the implementation of an industrial strategy which the Liberals trotted out in the concluding two weeks of the campaign after Mr. Goldfarb told them that it was very popular to start talking about a made-in-Canada policy and an industrial strategy which this country has needed for decades, we did not even hear mention of an industrial strategy. In sum, the October budget hurt average income and poor people wherever they live instead of helping them. Instead of forecasting an improvement in the economic and human situation for the majority of our people across the land, that budget forecast an increase in their misery.
Economic Conditions
Now 1 come to the interest rate crisis which has hit this Parliament day after day for the past couple of weeks. If anything, the cynicism of the Liberal party is even more clearly revealed in this respect. In the election campaign on at least two occasions the Prime Minister promised a made-in-Canada interest rate policy, but instead of implementing that policy and instead of extricating our interest rate policy from that which is established south of the border, the Liberal Party of Canada has followed the same roller-coaster policy of Milton Friedman monetarism which has been implemented in the United States, and it has had the same devastating effect on Canadians as it has had in the United States. That was another betrayal of an election promise.
I do not want to quote statistics in this context. I could quote the new rate, which I have already indicated is the highest in Canadian history, but I want to say that the interest rate has a direct and profound impact on Canadian men and women wherever they live and in whatever occupation they find themselves.
As we are debating in the House of Commons, on this very day families are declaring bankruptcy in terms of their houses because they cannot afford to renew mortgages which they now have to pay at 17 per cent to 20 per cent as a result of this government's interest rate policy.
Farmers on our prairies and elsewhere in Canada are seeing their debt loads increase to monumental levels because of the high interest rate policy now being pursued by the Liberals. Young would-be farmers who would like to pursue the occupation which has been followed by their families, in many cases for generations, are no longer able to do so because they are unable to bear the debt loads required to start new farms.
Fishermen down in the area where the Minister of Finance lives on the east coast, or on the west coast of Canada, are suffering unbearable burdens in terms of financing costs of ships and other aspects of their operations. Auto workers, whether in the province of Quebec or in the province of Ontario, or indirectly those who work for auto dealers in every town and village across Canada, are being laid off in record numbers today because of the high interest policy of this government, because Canadians can indeed put off buying an automobile from this year to next year if they cannot pay the interest charges, and that is precisely what is happening.
Then there are food costs. The figures that are out today show a year over year increase of 15.2 per cent. How does the government of the day respond to that kind of data, because that is, even more directly, I suggest, in some of the occupations I have just noted, of immediate and pressing concern to low-income Canadians? What does the Prime Minister do when he is confronted with questions coming from the Conservative party and from our own, as he has been in the past couple of weeks, on food prices? The Prime Minister's, scintillating, condescending and ultimately uncaring advice to people hit by these unacceptable food prices is that they should change their priorities. I would like to see the Prime Minister talking to a pensioner who lives in downtown Vancouver or

December 18, 1980
Economic Conditions
talking to a working Canadian in Halifax who is a non-trade unionist and who is working at wages perhaps below the poverty level or, better still, talking to an unemployed Canadian anywhere in our land and telling that Canadian, whether a man or a woman, who has to pay these prices that he or she should change their priorities. 1 say it is time the Prime Minister and the Government of Canada changed their priorities in dealing with the economy, and with food prices in particular.


Some hon. Members:: Hear, hear!


John Edward Broadbent: The point is that interest rates have a profound human impact on almost every aspect of existence in our land. They are not something abstract in their effect, and a caring government would respond with care and concern for the people who are being harmed by these interest rates.
Having made this criticism, having stated that, contrary to what the Minister of Finance has said today, we do have an economic crisis in Canada, I want to suggest to the minister that for once he not only listen but that he open his mind just a bit to opposition suggestions for change for improvement. He does not need to be, as he said this afternoon "driven into panic reaction" by us in the New Democratic Party. Instead, he should be driven into action by recognizing the economic reality faced by Canadians. I say in this context that the minister, who is so interested in having his government follow interest rate policies in the United States, should read the business section of The Globe and Mail today. It might have been brought to his attention already, in which case he would be aware that a senior aid to president-elect Reagan has said that the president-elect of the United States is contemplating declaring "a national economic emergency" as soon as he assumes office in January. He intends to make that declaration-and that is serious in American politics-to indicate that the economy and its effect on the Americans is his number one concern. I say it is time the Government of Canada declared we face an economic emergency situation now requiring emergency action.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Here are some specific suggestions, and 1 would like to hear the minister respond to them with something more than rhetoric, to use his favourite phrase of today. First, we should call an end to jacking up our interest rates right in step with what happens in the United States. We should have-and the minister knows the term very well-a clean float with the Canadian dollar, and we mean that with all its implications because in this party we do not believe in a policy which will just have some short-run effects for two weeks or three weeks. 1 say to the minister in this context that we would acknowledge, if we had a clean float with the dollar instead of using interest rates to prop it up, that there would be, in the short run, some negative impact on the cost of living. 1 acknowledge that, but we say that in the long run the effects will be positive, as has been seen in other countries. If we have a clean float and the dollar is allowed to seek its own level, it
would mean for Canada an immediate increase in export sales, it would mean that Canadians would start buying more goods and services produced in Canada, it would mean that the Canadian economy would ultimately become more efficient and competitive, and that should be the major objective of economic policy. It is time the Minister of Finance recognized it.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Second, we say that the three-week recess we are now going into should be used as a time for the minister to sit back and think about his budget which turned out to be inaccurate in all its major forecasts, which turned out to be a totally inadequate instrument in terms of responding to what is taking place in the U.S. economy and elsewhere, and promise the House that when we come back on January 12 he will present us with a new budget which will deal with the economic crisis. That is the kind of commitment we are looking for tonight from the Minister of Finance. We are saying that in that budget there should be a cost of living tax credit which will enable low and middle-income Canadians to keep up with the cost of living-perhaps not get ahead of it but to keep up with it. I say to the Minister of Finance that he should know better, and he does know better, instead of talking nonsense as he did in the question period today, he should talk economic reality and acknowledge that a tax reduction for middle and low-income people, when the economy is operating at less than 80 per cent capacity, will indeed cause an increase in demand in the economy. When these middle and low-income people get a tax break and can cope with the cost of living by buying goods and services produced in Canada, not only will they benefit because of the tax concession but the men and women who are currently unemployed across Canada will be hired and put back to work, and that is good because they want work and not handouts.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Finally, as another specific suggestion among a number of suggestions one could make, we have recommended the establishment of a fair prices commission. We say that this is constitutionally within the power of the federal government, just as bringing in the wage control program some five years ago was within their power. They could use the same power this time, instead of controlling the wages of Canadians, to do something about the prices affecting Canadians, and they should act on it.
I want to conclude with the following observation. It is time the Government of Canada realized that continued inaction is disastrous economically and morally. It is an indefensible policy. It is time the government admitted that we are in a crisis, that we must declare that rebuilding the Canadian economy and its attendant consequences, the human reality in Canada, is our number one priority. It is time the government recognized that new ideas and policy suggestions are indeed possible. They are vital if we are to deal seriously with the real
December 18, 1980

crisis which affects Canadians wherever they live. Finally, it is time the Government of Canada showed some concern for the people of Canada.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, we are meeting in emergency debate tonight, a week before Christmas, in a season which is usually, and should now be, characterized by generosity and sharing, but in a season which for literally hundreds of thousands of Canadians will be characterized this year by bitterness, by deprivation and by a deep fear about their security and the ability of themselves and their children to find jobs and the rights which should be part of the birthright of people of a country as naturally fortunate as our own.
That problem, that bitter Christmas which faces the people of Canada now, does not arise because of any weakness in the country. We are one of the blessed countries of the world. It is exclusively because we have a government today which has not only failed for a decade to plan the kind of economic policies which could bring growth, comfort and security to the people of the country, but a government also led by a Deputy Prime Minister and Minister of Finance (Mr. MacEachen) who used to call himself compassionate; a government which is not prepared to do the smallest single thing to help low-income Canadians, to help the poor, and to help those Canadians who will be most damaged by the economic circumstances we face this Christmas.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The hon. member for Oshawa (Mr. Broadbent) talked about a crisis; the minister said that there is none. The hon. member for Oshawa is right. We are facing the worst economic crisis which Canada has seen since the 1930s. Earlier this afternoon the Minister of Finance refused to accept that word. I say to him that a starting point for him and his government must be to start being honest with the people of Canada. They should not depend upon advertising campaigns to try to change their minds. They should not try to fast-talk them out of the deprivation and the problems Canadians know they face. They should just start being honest. As difficult as it might be, they should start being honest with the prople of the country because they are the people to whom the government is responsible.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The fact is, we have had virtually no economic growth in 1980 and the prospect for next year is for virtually no growth again. By the minister's own estimate, almost 1.5 million Canadians will be out of work next year. In November, living costs were rising at an annual rate of 11.2 per cent. That was before the latest round of energy price increases, and it was before a new surge in food costs which the Retail Council of Canada forecast will approach 15 per cent next year. We know that the bank rate is at its highest level in history today.
Economic Conditions
The Canadian dollar is worth barely 82 cents American, its lowest level in 47 years. Bankruptcies are up over 20 per cent from a year ago, as soaring credit costs cripple our small businessmen and individual Canadians. If that is not an economic crisis, then I would ask the Minister of Finance, when he finds his feet, to describe what to him constitutes an economic crisis. It might not seem like a crisis to him, but it seems very much like a crisis to hundreds of thousands of Canadians to whom he is responsible.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The minister said that he is doing everything he can, that there is nothing more he can do, that it is all the fault of the Americans. That is the economic action plan of the Liberal government-complain to the United States. Well, the Minister of Finance is deceiving Canadians when he says there is nothing he can do. The problem is not that he cannot do things; the problem is that he will not take actions which are available to him right now that could help Canadians who are in need, Canadians who will be facing a deeply bitter Christmas because this Minister of Finance and this government just do not care about low-income Canadians.
One thing he could do would be to bring in a shelter allowance, as we suggested this afternoon. Another thing he could do would be to bring in an energy tax credit, as we suggested last year and incorporated in our budget. Another thing he could do would be to help Canadians faced with the burden of paying mortgages or property taxes. Another thing he could do would be to exempt from some of his taxes the heating fuels which Canadians have to pay. He says that if he does those things it would lead to a deeper deficit. I point out to the House and to the minister that last year our government brought in an energy tax credit; our government was proposing and had ready for passage mortgage and property tax credits; our government had exempted heating fuels, and we were still projecting a budgetary deficit which was some $3 billion lower than the deficit this government is bringing in.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: What we are dealing with here is a question of choice. The government can spend its money on propaganda advertising, as it has, or it can spend its money to help low-income Canadians in need, as we did and as this government refuses to do.
It is a matter of choice between whether one wants to keep the people of Canada dependent upon high-cost Saudi oil, or whether one wants to follow realistic policies which will move us toward self-sufficiency but which will also include help to those low-income Canadians who will need help as prices inevitably increase.
To the degree that we are limited by world circumstances, how did that happen in a country like Canada? How did that happen to this degree in a country which once was strong enough to stand on its own economically, to set its own course, to not have to cry to the Americans to bail us out whenever there was a turn in economic fortunes? What is happening here tonight, what is happening to this country now, is that we

December 18, 1980
Economic Conditions
are seeing a decade of overspending come home to haunt the government of the people of Canada. We are seeing a decade of bad Liberal policies coming home to roost, coming home to hurt the people of Canada, particularly low-income Canadians.
I look across the House and I see ministers of the Crown smiling as we describe the plight of low-income people who put them here, the low-income people to whom they are responsible. While those people face the prospect of being out of work or face the prospect of freezing this winter, their ministers, their government, sit in the House of Commons and smile and laugh at them. That is totally unacceptable in any kind of democratic system.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: We have in this country these outrageously high interest rates now because a decade of Liberal financial mismanagement and economic neglect mean that we must attract hot money to prop up the Canadian dollar. The solid, longterm investment which used to balance our international accounts has simply lost faith in Canada as a place to invest.
We are paying out almost $4 billion in oil import subsidies because seven years after OPEC the government still refuses to take seriously the need to make Canada self-sufficient in energy. Only yesterday, Sheik Yamani, the dancing partner of the Prime Minister, suggested that imported oil could cost $80 a barrel by the end of next year, yet still the government clings blindly to an energy policy which drives Canadian investment out of the country. It drives out of this country the people who find Canadian energy in Canada. It drives away from here any climate which would attract the kind of people who would make it possible for us to realize energy self-sufficiency here in our own country.


An hon. Member:: It follows policies.


Charles Joseph Clark: It follows policies, as my colleague from Nova Scotia points out, which have the result of dividing this country, setting Canadians against Canadians and creating in western Canada the same kind of alienation as a former Liberal government created in the province of Quebec, giving birth to the separatist movement there.


Mr. Breau:: Nonsense!


Charles Joseph Clark: It would be bad enough if the Liberal government were simply doing nothing today to solve the real problems of the real people of the country. It would be bad enough if the government were doing nothing to plan for future growth and future strength for our economy, but what is worse, their priorities are so backward and so screwed up that they are pursuing policies today which will bring more damage to Canada tomorrow.

Mr. Speaker, we are now experiencing an economic crisis whether the Minister of Finance admits it or offhandedly
denies it. It is the most basic responsibility and duty of this government as the national Government of Canada to give a steady economic direction to this country. This government which is demanding more powers entirely refuses to assume its responsibility and ensure the economic welfare of Canadians. This government has no political economic policy and worse still it has no economic priority.

Mr. Speaker, Canadians today, worried as they are about their immediate prospects, have a right as they look ahead to ask what will their prospects be tomorrow. Everybody with a family in this country which depends upon the income that man or woman brings home, has a right and a cause to say now: What about my job? Is my job going to be secure? Is my job going to be menaced by the economic policies which have already driven so many of my fellow Canadians out of work? What about the jobs of my children? Are they to look forward to growing up in a secure country? Are they to look forward to growing up in a country where there is more and more insecurity, a diminishing prospect of being able to find the kinds of jobs, the kind of future that this country holds as its potential? Many more Canadians know that while their neighbours may be out of work today, while unemployment might be rising in the rubber industry in Kitchener because of the policies of this government, it could affect them tomorrow. That direct threat to the job security of Canadians, to the ability of people to secure the incomes their families need, flows from the failure of this government, not only to plan for the future but to call a stop to the economic and energy policies which are creating more problems for Canada. These policies, instead of solving our economic problems, are aggravating them.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, what this government is doing through the actions it is taking, and what it chooses as its priorities, is to give us a constitutional package which divides the country and an energy package which drives investment out of the country. It is an energy package which drives jobs out of Ontario, Saskatchewan, British Columbia, Alberta and Quebec. What it is doing is introducing a series of policies which threaten the very industrial fabric of our country. In so doing they have already placed in jeopardy the jobs of thousands of Canadians. They have dashed the hope of possible employment to the million Canadians who are already out of work. They have done this in the energy sector, which has been the single healthy sector in the Canadian economy. It is the one potential locomotive which could pull our economy out of recession. This energy sector has, as a direct result of this government's action, seen an unprecedented decline in production, in jobs, together with an unprecedented flight of investment-not foreign investment, the foreign investment stays; with this Liberal policy they get subsidized to stay. The people who are leaving because of this Liberal policy are the Canadians, the creative ones who want to go out and find things to make the economy grow.
December 18, 1980


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Yesterday in the House I referred to a survey made by The Calgary Herald in which it was reported that some 376 Canadian drilling rigs will move to the United States. That will lead to at least 22,500 Canadians losing the jobs they already have in Canada. It will lead also to a dramatic reduction in exploration. Already 60 such rigs have moved, or are moving, to the United States. It is not easy for those Canadian companies to decide to pull up their roots and move away from their future in Canada. It will be much less easy for them to come back once they have left.
In Saskatchewan, Hudson's Bay Oil and Gas Company have suspended their 1981 drilling plans in the Lloydminster heavy oil pool. The company had planned to spend $50 million drilling 300 wells, and half of its Lloydminster workers will be laid off. There is no representative of Lloydminster, or from anywhere in Saskatchewan, of the government side. But what is happening to Saskatchewan today as a result of these policies could happen to Cape Breton tomorrow, to Kitchener the day after that or to any community in Quebec the day after that, because we are setting in train now a series of policies which will cause deep and continuing economic damage to this country.
A typical oil rig, while assembled in Edmonton, contains switchgear-the small motors and electrically powered gadgets that help convert the various functions of a rig-which comes from Brantford, compressors from Stratford, steel from Welland, Sault Ste. Marie or Hamilton, and generators which come from Peterborough. In the rubber industry of southern Ontario alone, 300 or 400 jobs will be lost over the next year alone as a direct result of the dramatic decline in oil exploration.
The oil industry is one of the major purchasers of heavy trucks, trucks that are made in Ste. Therese and Windsor. When the oil industry shuts down or winds down, so do jobs for Canadians on the assembly line in Ste. Therese and on the assembly line in Windsor. As a result of this government's policies jobs which should be going to Canadians are going to people who live in the United States of America. Well, that is not Canadian policy. That is not a sensible policy. That is a policy which denies a Canadian future.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: There is one point I would like to make here with respect to some Liberal members here who have to support what the cabinet does, even though they are not part of it. This economic disaster, this social disaster, this energy disaster which this government has brought in, is not the exclusive responsibility of the people who sit on the ministerial benches. Every Liberal backbencher here, every Liberal member of Parliament who gives his or her support to this kind of policy will have to go home and answer to the low-income Canadians who are denied an energy tax credit. They will have to go home and answer to the rubber workers or to the other citizens thrown out of work by this government's policies-their policies which deliberately throw Canadians out of work. Mr. Economic Conditions
Speaker, that is an absolutely unacceptable policy for any government. It is absolutely irresponsible for any member of Parliament to blindly, blithely accept and support that kind of policy, betraying the interests of the men and women across this country who sent those Liberal members of Parliament to this House.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Has the minister, who comes from an area which has known human sufferings as a result of financial difficulties, become so unrealistic that he has forgotten how real is human suffering? According to the data which he has provided, 250,000 Canadians will soon be added to the number of unemployed. Those individuals and their families will pay 61 per cent of their income for a very simple house if they get the maximum unemployment insurance benefits. What will they do if they have other payments to meet, if they have children to feed and clothe or if a member of their family becomes ill? The minister knows what happens. Those Canadians will go bankrupt or will be faced with financial problems for several years to come.

Mr. Speaker, perhaps the minister knows that the poorest Canadians, the 20 per cent at the bottom of the income scale, spend 83 per cent of their income on the bare necessities of food, clothing and shelter. Those are the Canadians the Prime Minister tells to switch their priorities. Switch their priorities to what, Mr. Speaker? Perhaps the Minister of Finance can tell us what he wants the poor to switch their priorities to. When the Prime Minister comes down from the swank portions of Outremont and tells the poor to budget better, perhaps the Minister of Finance can explain to those Canadians who are out of work or who face the prospect of being out of work just what they can economize on when they have to pay higher fuel costs, higher food costs and other increased costs about which this government cares nothing at all.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The government says there is no crisis. Well, perhaps there is no crisis for him or his colleagues. Not yet, anyway. But has he talked to the 159 workers laid off at Caravelle Carpets in Cornwall, represented inadequately by the Minister of State for Trade (Mr. Lumley)? Has he talked to the 80 employees of Crowe Forestry of Cambridge? Has he talked to the 227 workers at Montrose Mills in Granby? Has he talked to any of them, individual Canadians with families, with lives of their own, who have been let go during this past month alone? Surely the minister, if he has no economic answers for the country, if he has no willingness to come to grips with the need to set an economic policy which will build for the future of Canada, should at least find some compassion for those Canadians w'ho face a bitter Christmas because they have been abandoned by their government.

December 18, 1980
Economic Conditions
The hon. member for Oshawa has suggested that the government take advantage of the Christmas holiday. It is a government that likes deadlines and likes to impose deadlines on Parliament, the provinces and the people. Let it take a deadline for itself, the deadline of January 12 when this House of Commons will resume, and let it come back at that time with an economic policy that is not only compassionate and not only helps those Canadians who are in need, but is also one which looks to the future, so that Canadians will not have to worry about whether their job will be secure, whether their children will find a future in this country which should be full of promise, instead of blaming it all on the Americans, instead of saying there is nothing the government can do and instead of telling the poor to budget better.
The Government of Canada should come back in 1981 with an economic policy, an economic statement and some economic honesty so that the people of Canada will be served, instead of deceived, by the government that now rules.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Where is the Minister of Finance?


Flora Isabel MacDonald: The Minister of Finance is afraid.


James Aloysius McGrath: He is hiding behind his desk.


John Carnell Crosbie: Mr. Speaker, the Minister of Finance (Mr. MacEachen) continues to be silent. This Minister of Finance is Canada's most silent minister of finance, but he has the most reason to be silent. He is not able to stand up and defend his lack of policies when the Leader of the New Democratic Party (Mr. Broadbent) and the Leader of the Official Opposition (Mr. Clark) speak out against them.
For the past nine months and 18 days we have had a slough of drift, of mistaken, politically-inspired attacks by this government on the provinces, the oil and gas industry, the private sector in general, foreign investment and domestic investment and that is why we have today a Canadian dollar which is hovering between 82 cents and 83 cents, the lowest in 47 years. That is why we have today a Bank of Canada rate of 17.36 per cent, the highest in our history. That is why we have today a prime rate of 18.25 per cent, the highest in our history, three times what the usurious rate was ten years or 12 years ago when the Bank Act stipulated that 6 per cent was the maximum interest rate at which banks could lend. Tonight the prime bank rate is 18.25 per cent.
All this has occurred under the Minister of Finance. That is why we have an inflation rate of 11.2 per cent today, just six weeks after the minister predicted that it would be 9.7 per cent this year and 10.2 per cent next year. We have 787,000 people unemployed. The minister's own projections show that 1,026,000 people will be unemployed next year. If we take the real unemployed, those who have given up trying to look for jobs because there are none to be found, then the unemployment rate would be well in excess of one million.
That is why we have a current account deficit of $6.2 billion, which is what the minister estimated for this year. That is why the Canadian dollar is so low, because for seven years under the neglect, the politicizing and politicking of this government we have had a current account deficit and for seven years Canada has been living off the rest of the world. Canada's deficit with the world over the last seven years has amounted to $30.8 billion. Is it any wonder why the Canadian dollar is now under attack and so weak and why we must follow U.S. interest rates? It is because we have a government which is old, tired, cynical, smug, a travelling government of good old boys. They are too busy scratching one another's backs while in power to worry about what is happening to the Canadian public in the ten months they have held office.
We have had nine months and 18 days during which the government has forgotten about the tenants about whom last fall they were so concerned and forgotten the home owners, the potential home owners, the young, the elderly, the unemployed, the regionally disadvantaged. Where are these groups today, long forgotten by this government? This government has forgotten that down in Newfoundland one-twelfth of the total income comes from unemployment insurance. It has forgotten that, while at the same time it is trying to crush the government of Newfoundland because it is standing up for its right to offshore oil and gas and its rights in the constitution. It has forgotten the regionally disadvantaged and the hungry. The Prime Minister (Mr. Trudeau) advises them to spend less on transportation, rent and mortgage interest and more on food. That is his advice to the hungry and the elderly.
Everything which this government said in opposition last fall, it has since ignored. It created the expectation that it could cure everything. For the few short months they were out of power the economic conditions of the past 12 years which came to fruition while we were, in office were all our fault. They raised the expectation that they could cure these things. How did they raise that expectation? They said things such as the finance critic of the opposition stated in the House of Commons on November 6, 1979:
The Liberals and I generally want action taken now to prevent the hardship this Conservative high interest rate policy is creating for millions of Canadians and their families.
Do hon. members know what the interest rate was then? It was 14 per cent. The Liberals' hearts were bleeding for Canadians and the hardship that rate of interest was causing, and today it is 18.25 per cent. So what is the government going to do about it now? We responded with a small business development bond, with a mortgage interest and property tax credit scheme to help the home owner and an energy tax credit to help lower-income Canadians. But at that time the Liberals wanted action taken to prevent the hardship caused by the Conservative high interest rates. By March 10, 1980, the finance critic in opposition had become the Minister of Industry, Trade and Commerce, (Mr. Gray) and at that time he said he was pleased with the new floating interest rate policy of the Bank of Canada. Is he pleased today that the rate is
December ! 8, ! 980

59! 1
17.36 per cent? It is floating on the inertia and the ignorance of this government.
On November 13, 1979, the present Minister of Energy, Mines and Resoures (Mr. Lalonde) said that the PC government seems to have "adopted Mr. Volcher's economic Malthusianism approach in the United States". Who in the last few weeks has been here squirming around trying to find an excuse? He said he blindly had to follow the U.S. interest rates. Rates which were imposed by whom? By the very economic Malthusian who they did not like last year, Mr. Volcher. Those are just some of the expectations. On November 6, 1979, the finance critic of the Liberal party said:
It is right and necessary for Liberals to take a new approach and a new look at interest rate policy.
When will they do that? When will they take on that new look? Is the new look and the new approach an 18.25 per cent prime rate? The finance critic, now the Minister of Industry, Trade and Commerce, said on October 30, 1979, when the Bank of Canada rate was 14 per cent-not 17.36 per cent:
-it will mean the loss of thousands of jobs, increases in the cost of living, it will bring the housing industry to a halt, it will put housing industry to a halt, it will put housing beyond the reach of most middle and lower-income Canadians, it will hurt small business and it will hurt farmers, and will add to the cost of food.
Has that all changed in the last few months? Have interest rates which are now 4 per cent more than the rate of last fall not had these results? Finally, who said this:
I don't think that allowing the dollar to have some downward adjustment would do as much harm to our economy as our present high level of interest rates.
It was the same finance critic of the very same party that is now in government, that is now doing nothing and does not appear to be doing anything. The bleeding heart Minister of Employment and Immigration (Mr. Axworthy) as housing critic for the Liberal opposition said on October 29, 1979:
If there is a requirement to raise interest rates, there is an equal requirement to help those people who are hurt by those interest rate increases.
That was when the Bank of Canada rate had gone to 14 per cent. The minister is the colleague of the Minister of Finance, who will do nothing to help people who are hurt by those interest rate increases. Why does that minister not resign? Because he is a hypocrite, a total hypocrite, a teetotal hypocrite. If he cannot persuade the Minister of Finance to carry out his commitments and promises of last year to help those who are hurt by high interest rates, then he should resign. The whole government should resign.
The cause of the higher interest rates is not just that U.S. interest rates are higher. There are many other countries in the world, unlike Canada, which have an independent interest rate policy and as a result their interest rates are not affected by the United States. They do not have to worry about what happens in the United States. The minister says it is the U.S. interest rate which has caused Canada's to go up. Why is it, then, that in the last few weeks interest rates in the United Kingdom went down from 17.5 per cent to 15 per cent? Why is it that the Swiss interest rate is 5.75 per cent? Why is it that
Economic Conditions
the West German interest rate is 11.5 per cent and it has not gone up because U.S. interest rates have gone up in the last month or two? Why is it that Japanese interest rates are 8.85 per cent and have only gone up two-tenths of 1 per cent in the last month or two? Why is it that only Canada's have gone burgeoning up with the interest rates in the United States? It is because the Canadian economy has been weakened almost fatally by the policies of the government opposite during the last 12 years. If it is higher interest, that is why. The minister says that this year we are going to have a deficit in the current account of our international account of $6.2 billion. Last year it was $5.8 billion. That means we have to get $6.2 billion from the rest of the world to survive here in Canada. We arc consuming more than we can produce. We are living off the rest of the world, and we have been led in that direction for the last seven years by the Liberal government and by the finance minister, by his predecessor, Mr. Chretien, by his predecessor, Mr. Macdonald and by Mr. Turner who started the whole thing and who is now hiding out in Toronto trying to escape the responsibility of it all. Our external debt now is a net $75 billion. That is why the dollar is in the shape it is in, and because this government has a policy of attacking the private sector, because this government is not fighting inflation, because this government will not help governor Bouey and the Bank of Canada fight inflation. It talks a hard game but it does nothing. It does nothing because it knows that to do anything will cause pain. To correct this situation will cause pain and that party over there does not want to pretend that it is causing any pain, so it does nothing. But the pain has cost Canada. There will be a fatal heart attack for the Canadian economy because it will do nothing in the meantime. Instead it is the attack on the provinces and the attack on the oil and gas industry and the threats of FIRA. This is why investment is leaving Canada, because of this misshaped and misbegotten Marc Lalonde energy policy, forced, we hope, on the Minister of Finance, who does not have enough guts or gumption to say to the Minister of Energy, Mines and Resources that he has to change his policy and get an agreement with Alberta. Our interest rates are following the U.S. because of the weakness of our economy. They do not follow them anywhere else in the world. There are no criticisms being made in other parliaments of the world, Japan, West Germany or the U.K. about American Federal Reserve policy because they know the United States has got to overcome its inflation or the whole of the western world will be ruined. It is only this minister here trying to exculpate himself who gets up in the House with his mealy-mouthed criticisms. He does not think they are doing quite the right thing in the United States, although they are doing the same thing as Mr. Bouey is doing here at the Bank of Canada. The time has come for him to get out of office if he is not prepared to take some responsibility.
Let us look at the Canadian dollar, Mr. Speaker. It is at its lowest ebb since 1930 or 1931. Interest rates are up 5 per cent since the budget. The extra cost for oil alone because of the weakness of the dollar is $109 million since March. This government is importing more and more oil. It would sooner
5912

December 18, 1980
Economic Conditions
import oil from Saudi Arabia and pay Sheik Yamani $40 than pay our own brother Canadians more than $16 per barrel. Is it any wonder that the rest of the world is frowning on the Canadian dollar and does not want to put assets into Canadian dollars? In fact, people are bailing out of their Canadian dollars because of the kind of policy they see here.
Unemployed people get $189 per week maximum compensation. There are 787,000 of them now officially admitted. There will be one million unemployed this winter. These people are below the poverty level. They spend over 67 per cent of their compensation on food, shelter and clothing and they are told to somehow switch that and spend more on food. That is the policy of this government. That is the MacEachen policy.
Real wages are going down 4 per cent. This year they will go down 2.2 per cent and next year they will go down 2.4 per cent. Every worker in Canada will have less in real income this year and next than he had last year. That is the policy of this government.
Real growth is at minus 1 per cent this year. Our gross national product, that is, goods and services, is declining 1 per cent this year under this government. Next year it is forecast to go up only .5 of 1 percentage point. The Economic Council of Canada had to revise its projections downwards because of the minister's budget. It was the most disastrous budget in Canadian history. It was the most rapidly dissolved and the most reprehensible and the most rapid budget to be shown to be worthless of any budget ever to be brought down in Canadian history, this misbegotten aborted budget of October 28.
What is the only solution for Canada, apart from a change in government? If hon. gentlemen opposite have an ounce of shame in their bodies, tonight they will get out because of the way they have fooled the Canadian people. In the Economic Council of Canada's 1980 report entitled "A Climate of Uncertainty", we find at page 33:
In last year's review two driving forces in the Canadian economy could be identified; the world, and particularly the U.S., outlook even though it appeared modest at the time; and high domestic energy investment.
That was their economic prognosis last year. This year they say "because the world outlook is bad, because the U.S. outlook is bad, it cannot do anything for Canada." It is not going to fire up Canada. The U.S. outlook is even worse than our own. The only thing left for Canada is high domestic energy investment. Again at page 33 of the Economic Council of Canada's report, we read:
Now only the latter remains to move the Canadian economy forward in the 1981-1983 period.
What is this government doing? It is doing the exact opposite. It is putting the death knell on energy investment in Canada. There will be nothing left to move the Canadian economy forward. No fewer than 735,000 jobs in the 1980s will be gone. The tar sands is stopped. The heavy oil project is stopped. Judy Creek is stopped. The offshore is stopped. Why has this happened? Because this government is in confrontation with all of those provinces, with the private sector. It is trying to get more power here in Ottawa and trying to extend
state control and state domination. The government is doing the exact opposite of what its own economic body is saying. The only thing we have to depend on in Canada are the massive energy projects in the next ten years. I believe the figure is $1.2 trillion which will be needed in investment. Of that at least $16 billion a year will have to come from outside of Canada yet this government threatens to sick Herbie Gray on to anyone who invests a dollar here in Canada and have Herbie tell them whether they are running their business properly or not. We know what Herbie is doing. We are seeing what his record is with Chrysler and with Massey-Ferguson. They are the sick pups. Luckily, he is not here tonight.
The other day I quoted what Mr. Otto Eckstein had said. Mr. Eckstein is an American economist. The Minister of Finance laughed. He had never heard of him. That shows his immense knowledge of economics. This prominent American economist of Data Resources Incorporated said this: "The collision between a stubborn inflation and moderate money supply targets is producing interest rates that will stop the economy's growth in early 1980-81". That is exactly what is happening here. It is a collision between the stubborn inflation and the moderate money supply targets which will stop everything dead here in Canada. We can forget home building, construction, consumer spending. We have 18.25 per cent bank rates here today. The unemployed can forget about being re-employed in the next year or two to come. The elderly can forget everything also. Where is the assistance which was promised to the seven million home owners last year? The tenants were particularly close to the hearts of gentlemen opposite. They voted against our mortgage interest proposition. They said it was shocking and that it would only help home owners and they wanted to help renters and tenants. How have they helped them in the last ten months? They have turned their backs on them. Hon. members opposite are conscienceless, or they would resign tonight.
We are waiting to hear from the minister. What is his plan of action? On October 28 he brought down a budget with an energy policy. Since then everything in Canada has gone downhill. In question period in the House one day, when I quoted an economist who said there would be one million unemployed next year, the minister said that was totally wrong. His own figures in the document which he produced, the medium-term prospects for the Canadian economy, show there will be 1,026,000 unemployed next year. In his own document he said there will be "mild appreciation" of the Canadian dollar this year. Its value will go to 86 cents U.S. in 1980 and 87 cents in 1981. How can the minister even sit here after making those kinds of projections just six weeks ago, Mr. Speaker? This government has turned its back on the one million unemployed. It has turned its back on several millions of elderly people. It has turned its back on the Atlantic provinces and on seven million home owners. It has turned its back on the regionally disadvantaged. It has turned its back on Alberta. It has turned its back on Ontario where unemployment is steadily accelerating.
December 18, 1980

My advice to this group and this minister is: Resign and be gone. Give Canadians a break. Get off their backs. Have some conscience. Let someone else with new approaches take over, someone else who will help and try to put the private sector ahead, give them room to expand, encourage investment, someone else who will worry about lower-income people and the unemployed, not the cold, calculated, cynical Liberals who have been here and have kept Canada in the state it has been since 1963. As was said by Leopold Amery in the United Kingdom parliament some years ago, "In the name of God, go". You have nothing more to give to the Canadian people. All you can do is damage them. The question is, will you damage them irreparably or not?


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, the records of this House will show that over the last 23 years that I have been here, on numerous occasions I have tried to indicate to this House that my sympathy has always been for the ministers of finance in this Parliament. During my experience here, I have watched not only the humiliation of Walter Harris, Donald Fleming, Walter Gordon, one of the greatest Canadians who ever sat in this House, John Turner, Donald Macdonald and Jean Chretien. 1 have deliberately left out two. In every case I have stood in my place in the House and said that my sympathies went with the men who had to serve in this portfolio. Some of the older members will be witness to that.
Tonight I cannot say this for the present minister. He has no sympathy in this House because of a simple unalterable rule. He was so pleased with himself at his ability to trick and defeat a government barely in office nine months that, since the House met last fall, he has not been able to get the smile and the laugh off his face. This meanness of mind that led a Minister of Finance to make fun of a party that he defeated, particularly certain individuals in that party, shows up over the national television of this nation to the disgrace of every member of this House.
This minister has no sympathy from this House because he let his meanness of mind and soul show. This must never be done. If this House is going to operate, there has to be the assumption that the other person is a human being still striving and always striving to do something for the people of this country.
The issue tonight is essentially interest rates. It is to that subject that I want to devote my remarks. There can be no better subject for all Canadians to unite on. Ever since men joined together in cultures and groups, the one thing that always brought them together was the abuse of interest rates. Going back to the ancient civilizations in the Middle East, over to Rome, Greece and Egypt, there has always been this question of interest rates. When it was abused, it united the people. Even Christ threw the money-lenders out of the temple.
We now have a situation where interest rates are deliberately being used by a minister with full knowledge of the economic debate which has been going on for 30 years in North
Economic Conditions
America. He is following policies proven wrong by quantitative analysis, knowing in full measure the harm he is causing to every single citizen in the nation, particularly the ones who produce wealth, whether they be farmers, small businessmen, or the great and mighty Massey-Ferguson.
The small businessmen, large businessmen and producers are being destroyed because of the level of interest rates. There is no use standing up and saying you believe in low interest rates when you refuse to send a directive to the governor of the bank straightening him out as to the government's intentions. We cannot have sympathy for a minister who refused to allow the opposition and members of the backbenchers of the Liberal party to meet in a standing committee with the governor of the Bank of Canada before that committee and for the minister himself to appear before that committee to answer questions from those ordinary laymen representing the people of Canada.
That was done in December, 1979, by the Clark government. All parties, Liberal, NDP and Conservatives united in that committee, not to tear down the bank governor or the minister of finance, but to try to put positive and constructive suggestions forward. All we asked of those two gentlemen was, would they listen to those suggestions and, if they had merit, advance them to the bank governor to see whether he could straighten out the obviously wrong policy in monetary and fiscal stance.
Politically the situation has changed since last December. The NDP made the mistake of moving a motion of no confidence in a new government. The Liberals took advantage of the situation, broke their honour to members who were not able to come to that debate and defeated a government only nine months in office. The democratic procedure is to give any government a fair chance. When you break the basic rule of law of democratic parties in government, you are witnessing the destruction of democratic government.
Now that they have won the seats of the mighty on that side of the House, these people find themselves being destroyed by their arrogance and their breach of ancient traditions. The NDP are in a particularly desperate position. Not only did they go along with the defeat of that new government without sufficient reason; after the new government got in place, they negotiated a formal written contract of marriage between the two and got into bed with the very people who are out to destroy them.
Now we have a divided NDP with all the western members of the NDP in grave danger of being held to this agreement by their leader, even at the risk of losing every NDP seat west of the lakes. If this Parliament has not learned a lesson two or three times before in our history, they will learn it again. If ever you want western Canadians to unite, whether they be Social Credit, Progressives, United Farmers, Liberals or Conservatives, just mention the subject of interest rates.
This subject was an issue before the First World War. Alberta was solidly Liberal then, as was Saskatchewan and Manitoba. The farmers and the city people got together, cleaned out the Liberals and Conservatives in western Canada

December 18, 1980
Economic Conditions
and put in 65 Progressives. When they came here, they did something about interest rates. They altered the Bank Act and put in a ceiling of 6 per cent. It was only a few years ago that parliamentarians even dared to remove that ceiling.
When you want to unite western Canadians, just bring up this subject of interest rates. I am not just talking on a political level tonight. I think the government sense that we on this side feel very deeply. I imagine they feel just as deeply themselves. However, 1 want to put before them some quantitative arguments to show that you can have a committee such as the one the government barred from operation in this Parliament. That indicates the seriousness of stubbornly following an economic theory which no longer holds water. Practical common sense is much more superior on this question of interest rates than any amount of theory.
Let me give the House some facts. One of the great arguments used by the bank governors is that if you let the dollar's value fall 1 per cent, it will cost us a little bit more for imported goods. We are importing, as a general rule, around $50 billion worth of goods a year. Even that 1 per cent adding up to a 1 per cent increase in cost would only come to $500 million a year, which is admittedly inflationary.
What is the cost if you use the technique of the interest rate to keep the dollar up? Take a 1 per cent increase in interest rates applied to over $500 billion. That 1 per cent of $500 billion is $5 billion. So even though the experts of finance say that the inflationary effect of goods being imported is only .4 per cent or .2 per cent-let us call it 1 per cent and make it five times bigger-which comes to only $500 million more a year. That is a lot of money but it is very small compared to the $5 billion it cost each year to raise interest rates 1 per cent. Keep these figures in mind.
I have in front of me a chart showing the bank rate of our central bank over the last four years. Just taking this last year the dollar has probably reached a high point of 87 cents, and a low point of roughly 82 cents, a 5 per cent difference. That 5 per cent times $500 million means that this depreciation of the dollar down to 82 cents is inflationary and is costing us five times $500 million, or $2.5 billion per year. That is a heavy cost and is inflationary.
What is the cost when you apply that same rule to interest rates? Interest rates, according to this chart, have climbed from just above 10 per cent last summer to over 17 per cent now, a full increase of 7 per cent. Remember, every time you raise interest rates 1 per cent it costs the Canadian people $5 billion a year, and $5 billion times seven is $35 billion a year. This route followed by the governor of the bank and by the Minister of Finance has added $35 billion in the last six months to the annual cost of trying to hold up the Canadian dollar. Even if it had gone down 5 per cent, it would cost us only $2.5 billion, so if you have to choose between the two you would know the choice to make.
Nine out of every ten economists in the English-speaking world would agree with what I have just said. Why, then, do
we have this stubborn minority, this professional clique that exists in the Department of Finance, holding the view that: By God, that is the theory we learned in school, and by God, that is what you are going to swallow? That is the real crux of the issue.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: Do not
blame this on the bank governor. Theoretically he is independent, but in practice he knows where the power lies in this country. It does not lie with the minister and it does not lie with the Prime Minister (Mr. Trudeau). The governor is forced to be a lackey to these mandarin cliques. 1 think 1 have said this in plain terms.
The minister is paying a heavy price for his arrogance and meanness of mind; but in the interest of fair discussion, this view I have just put forward is not only the view of the hon. member for Qu'Appelle-Moose Mountain, It is the view of some of our leading economists and intellectuals in the world.
I hold in my hands a copy of probably the most credible intellectual magazine for economists and serious minded students of government in the English-speaking world. It is called The Public Interest. At the present time it is not in the Library of Parliament. There is not too much demand by parliamentarians for intellectual magazines. This is in the national library and certain individuals around town get this publication. I would like to read from a special edition published last month called "The crisis in economic theory". I am turning to an article entitled "Economic theory and policy in disarray". This particular article is written by James W. Dean and is called "The dissolution of the Keynesian consensus".
Remember, Mr. Speaker, I am quoting from a magazine published in, of all places, New York. Very few copies get into Canada, but otherwise it is read in every English-speaking country in the world. The day will come when the literacy of Canada will rise to the point where people will seek out this type of intellectual discussion. 1 am going to read just six sentences. Remember, as 1 said before, this magazine came out last month. This is what it says in the opening line:
On December 13, 1979, the Government of Canada fell.
Imagine mentioning Canada in an intellectual magazine; wonders will never cease. The article goes on:
For just six months the Conservatives had governed with a parliamentary minority, and they were defeated on a vote of no confidence. The issue was their first budget-a budget that rejected Keynesian economic policies, replacing them with radically different recommendations. Unemployment and slow growth were to be fought not by increasing the federal deficit but by reducing it.
That was a complete and radical revolution of economic theory. The article states:
This was a turnabout in what the Conservatives themselves had recommended when sitting in opposition just the year before. Their turnabout mirrored that of much of the economics profession throughout the English-speaking world. It was the decade's last dramatic reflection of a dissolving Keynesian consensus.
Whenever I read of an intellectual magazine published in a foreign country using Canada as an example of something new and wonderful that has happened, I know that within a few
December 18, 1980

years the idea, the thought, will be all through the academic thinking of all nations.
Here we sat in the Parliament in 1979 and defeated a budget because of a greed for power on the part of a small, defeated rump representing the Canadian people. That party used a policy of fear to convince the people into believing that to save their nation they had to bring in a government which had turned its back on them a few months before. Now the minister, who in his earlier life as a politician used to consider himself a bit of an economist, has been caught in all these answers in the last few weeks in the House about the theory of his budget doing what no good politician should ever do; zigging when he should have been zagging.
The Minister of Finance (Mr. MacEachen) has been a failure not only on moral principle and decency in this House, but also in his own disciplined economics in going the wrong way at a time when the nation desperately needed a government that would open its eyes and go the right way.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Mr. Speaker, 1 have listened to three speeches by members of the official opposition, and I wondered whether they were attempting to deal seriously with the Canadian economy or were attempting to express their personal and political frustration at the results of a vote which took place in the House of Commons last December and the vote of the Canadian people last February. Because throughout the whole contribution of the three hon. members of the official opposition there ran that bitter expression of personal frustration which has led them to make intemperate remarks in the course of what ought to have been a serious discussion of the economy.
1 must say that the last speaker on the opposition side did not add to his stature in the House of Commons by his most recent intervention.


Flora Isabel MacDonald: You surely have diminished yours.


Allan Joseph MacEachen: I have no intention of responding to the hon. member for Kingston and the Islands (Miss MacDonald), who is speaking now from her seat and who will be permitted to speak later, if that is her inclination.
I want to take advantage as other hon. members have done to address what to me is a very serious economic situation facing not only the world but Canada as well. I have never hidden from the House of Commons or from the Canadian people the fact that 1 regard the difficulties facing the country as serious difficulties.


John Edward Broadbent: But not a crisis.


Allan Joseph MacEachen: That was made clear in the budget. It has been made clear in every response 1 have given to questions in the House of Commons. The situation is serious, and there are
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a number of factors which account for its seriousness. I have been attempting as well as I can to deepen the understanding of the nature of the problem facing not only the world economy but also that of Canada.
The first point I would like to make in reminding the country and the House of the current situation is that not only is Canada, in a sense, reacting to the effects of a severe oil price shock which took place in 1978, but also every industrialized country in the world is reacting to it, with inflation running at the very high level of just about 11 per cent, with unemployment running very high and with a decrease in real output. That is the situation.
At the first meeting of the International Monetary Fund which I attended as Minister of Finance in the spring, the managing director of the fund told all the finance ministers from the industrialized countries assembled that the outlook for the world economy is decidedly grim. That is a fact, and we have not yet recovered from the oil price shock which is inflicting inflation upon the world. We may be working our way out of it, but I warn hon. members that if there is a further shock from protracted hostilities between Iran and Iraq or other difficulties in the Middle East, the world will be further attacked by this kind of difficulty.


Charles Joseph Clark: What a fraud.


Mr. Nowlan:: Blame it on Polish sausage.


Allan Joseph MacEachen: 1 remind you, Mr. Speaker, that hon. members on this side of the House sat quietly while three members of the opposition made their speeches. There was no heckling. There was no berating. Hon. members opposite are obviously afraid to be confronted with reason and objectivity, and they want to deal with personal and political frustrations.


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: You are the most deceitful Minister of Finance we have ever had.


Allan Joseph MacEachen: There is nothing Canada can do-unless accept the advice of the Feader of the Opposition (Mr. Clark), which is to drop off the planet; that seems to be his proposal- because we are being influenced by these forces throughout the world, and we have to cope with them.
Hon. members opposite have talked about the U.S. interest rate crunch. They have said that 1 have been blaming our difficulties on the United States. I think it is rather unbecoming for the Feader of the Opposition and his former minister of finance not to pay at least some attention to the analysis which has been provided to us by the governor of the Bank of Canada, publicly yesterday and privately before the provincial ministers of Finance. He has talked about the interest rate crunch. He has talked about the impact it has had on Canada.

December 18, 1980
Economic Conditions


Allan Joseph MacEachen: The governor of the Bank of Canada has been quite candid in saying that this problem does not originate in Canada. Let me read the two full sentences.
In the present case, the rapid run-up of U.S. short-term interest rates to such high levels is bound to have a major impact on Canada through increases in interest rates here or through a fall in the foreign exchange value of the Canadian dollar, or some combination of the two.
That is the analysis of the governor of the Bank of Canada.


Charles Joseph Clark: That is two sentences of his analysis.


Allan Joseph MacEachen: The next sentence reads as follows:
The problem does not originate in Canada-
I repeat, the problem does not originate in Canada.
-and the bank has no way of dealing with it that will not affect either the level of interest rates or the exchange rate or both.
That is a fact which was confronted by the ministers of finance yesterday in our meeting. There can be a difference of opinion as to whether we ought to take that pressure on the exchange rate or take it on interest rates. The governor of the Bank of Canada has chosen-I think wisely-to blend the two approaches as well as he can.
I believe he has managed extremely well in this present circumstance. Yesterday after the meeting was over, the minister of finance of Quebec, Mr. Parizeau, said that it was appropriate that we take this pressure on interest rates, and the Ontario minister, Mr. Miller, said that in his view we ought to take it on the exchange rate. Well, I happened to point out both to Mr. Miller and to the hon. member for Oshawa that it is a conceivable policy to look forward to a further decrease in the exchange value of the Canadian currency, a decrease which has been very deep already. The dollar has gone down very recently from about 87 cents to 82.5 cents. It has strengthened today, fortunately. 1 would ask the Leader of the NDP to reflect upon the very deep impact that a further depreciation of the Canadian currency would have on inflationary pressures in Canada. He recognizes that, but he has made his choice and I disagree with him because I am more afraid of the inflationary thrust which would come from further depreciation of the Canadian currency.
The governor of the Bank of Canada has made a choice, and 1 support him in that choice because there is no easy way of getting around the unpleasant situation originating in the United States, which the country faces at present. 1 must say to the Leader of the NDP that it is a bit of an oversimplification for him to talk about Canada following in lockstep with the United States rates. Obviously the United States is the most powerful industrial country. It is closely linked to the economy of Canada because of historical factors, and what happens in the United States is bound to influence what happens in Canada. But the fact of the matter is that at a certain point this summer Canadian interest rates were about two percentage points higher than they were in the United States.


John Carnell Crosbie: And they will be again.


Allan Joseph MacEachen: At present they are three to four percentage points lower than they are in the United States. So much for the charge that we are moving in lockstep with the United States; we are not.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: We are managing our own affairs as an independent country, but nobody can conceal the fact that we are part of an international economy, part of a world economic system, part of an international trade and payments system, and there is no way that we cannot be influenced by what happens in the United States.


John Carnell Crosbie: What about the U.K.? What about Germany and Japan?


Allan Joseph MacEachen: I was appalled at the juvenile questions which were put by the former minister of finance in the course of his speech. He asked why the situation is not the same for the pound sterling and the yen.


John Carnell Crosbie: That is right.


Allan Joseph MacEachen: No wonder he is on the other side of the House if that is his understanding of very simple economic facts-


John Carnell Crosbie: Explain.


Allan Joseph MacEachen: -comparing the pound sterling with the U.S. dollar and the Canadian dollar. What could be more juvenile? What would more better illustrate the need for a personal tutor for the hon. member for St. John's West (Mr. Crosbie)? I do not intend to become his personal tutor; 1 do not have the time to spend.


John Carnell Crosbie: Try to answer. There is unanimous agreement to having you answer.


Allan Joseph MacEachen: That is the situation, Madam Speaker, with respect to the interest rate crunch that we are facing in this country at present. I want to acknowledge the fact that inflation is a very serious problem for the country.


Some hon. Members:: Oh, oh!


An hon. Member:: What a profound statement!


Allan Joseph MacEachen: You know, Mr. Speaker, I am also prepared to say that I find it increasingly difficult to accept the readiness of the official opposition to take advantage of the courtesy provided to them by members on this side, and when a reply is being made they refuse to listen but are heckling and barracking every time.


Charles Joseph Clark: Coward. Answer the question, coward.
December 18, 1980


An hon. Member:: Relax, Joe.


Allan Joseph MacEachen: The Leader of the Opposition is showing his personal bitterness, his personal frustration, his personal humiliation every day in the House of Commons. I ask him not to continue, please, the kind of conduct which he has shown in the House of Commons in the last half hour, because he is not going to get away with it, 1 assure him.


Charles Joseph Clark: Answer the question.


Allan Joseph MacEachen: Mr. Speaker, we are facing a serious problem of inflation in this country; there is no question about that. There is no question about the fact, also, that the prospects for inflation have deepened and darkened since the budget itself because of increases in food prices, for example. The most recent estimates of the food price outlook for 1981 are now three or more percentage points higher than the 12 per cent in the budget. Livestock prices, for example, are expected to increase, the Canadian dollar has depreciated, interest rates have gone up, and that is bound to affect costs and prices in Canada. The rate of inflation in the United States has edged up, and all these factors are bound to have an impact on Canada.
When hon. members opposite ask the government, rightly so, I think, to be concerned about the impact of increasing inflation, particularly upon low-income Canadians, I want to point out, as 1 pointed out in the question period today, that at present-and I believe the hon. member for St. John's East (Mr. McGrath) is ready at least to listen to reason-a large number of programs are in effect which are protecting low-income Canadians against inflation. I talked about the old age security, the guaranteed income supplement, the spouse's allowance, the family allowance, the child tax credit, unemployment insurance benefits, veterans' allowances, Canada Pension Plan benefits. All of these are fully indexed, and this year the income tax system as well is indexed to the cost of living. Together these programs in 1980 will provide an additional $3 billion worth of protection from inflation to the groups affected. That is a very important protection offered which is fully indexed. The value of the guaranteed income supplement which was provided by this Parliament earlier this year in the amount of $35 a month will not erode. Its full purchasing power in terms of 1980 dollars will be fully maintained, and that protection will be available to the neediest people in this country. So I do not think it is fair or reasonable or humane for hon. members to hold up the fear that this particular pension is eroded, because it will be fully protected.
I have been asked by hon. members opposite to bring in another budget. I would consider that possibility if I had failed to recognize the chief threat facing this country in the budget of October 28. The turn of events, the additional inflationary pressure which has arisen since the budget, has confirmed my judgment that I had taken the proper approach in framing budgetary strategy.


Some hon. Members:: Hear, hear!
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Allan Joseph MacEachen: 1 remind hon. members that the main element of that budgetary strategy was, first of all, to maintain government expenditures within the rate of growth of the economy. Today 1 have been asked by the official opposition and by the NDP to launch new programs which would add to the projected expenditures and to the deficit. I cannot understand how it is that the hon. member for St. John's West and his colleagues, who have complained vigorously and determinedly against deficits and have called upon this government to reduce its deficit, ask every day for more spending. I do not intend to go beyond the spending limits which have been prescribed in the budget because I am deeply concerned about inflation.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: I propose, as I outlined in the budget, to seek a steady reduction in the deficit and financial requirements because I am concerned about inflation. I propose to avoid, as well as I can, corporate and personal income taxes because I am concerned about inflation. 1 propose continued support for the Bank of Canada in holding down the pace of monetary expansion because I am concerned about inflation. If at any moment in the next period of time the basic analysis upon which the budget has been built is changed by events, then I will be prepared to change the basic strategy of the budget. But the budget has an anti-inflationary posture and will contribute over time to a reduction in inflationary pressures in this country. I cannot tell members of the House of Commons that there is an instant solution to the inflationary pressure in Canada.


John Edward Broadbent: Who said there was?


Allan Joseph MacEachen: There is none. It will take a lot of time, and I am sorry to tell the hon. member for Oshawa (Mr. Broadbent) that at this time tax cuts such as he is proposing would do nothing but add further to the deficit.


John Edward Broadbent: Why?


Allan Joseph MacEachen: Because the member is not advocating at the same time that we cut expenditures. It would do nothing but add further to the deficit, add further to the borrowing, add further to pressure on interest rates, and add further to inflation. Also I should like to tell him that his call for new programs of spending will do nothing but add further to inflation in the country. I differ from him very, very definitely on that approach to current problems in the country. As I have said frequently during question period this week, I intend to monitor carefully the impact of inflation upon unprotected groups in the country and to take action when action may be decided to be necessary.


Some hon. Members:: Hear, hear!

December 18, 1980
Economic Conditions


The Acting Speaker (Mr. Blaker):: Order, please. It would be my intention to recognize the hon. member for Capilano (Mr. Huntington).


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Blaker):: Order, please. As hon. members will realize, I just entered the chair a few moments ago. I know of no reason why that would not be the correct decision. If the hon. member for Broadview-Greenwood (Mr. Rae) is rising on a point of order because he may object, 1 will listen to whatever reason he may have for the Chair changing the order of recognizing hon. members.


Bob Rae: Mr. Speaker can see whomever he chooses, and I recognize that. I simply point out that I was seeking the floor because it was generally understood that I would be rising at this time. There have been three speakers on the Conservative side in a row, and I do not think it is unreasonable for me to expect to be recognized at this point.


Mr. Flis:: Mr. Speaker, I rise on a point of order concerning remarks which 1 believe were made by the hon. member for Annapolis Valley-Hants (Mr. Nowlan), if he is sitting in his right place. The hon. member used the words "Polish sausage". I happen to be of Polish heritage, and I ask the hon. member to withdraw those remarks or get out of this House. That is not parliamentary language. He is discriminating against me as a member of this House, and he is discriminating against over seven million Canadians who have Italian, Polish and Ukrainian backgrounds.


Some hon. Members:: Shame!


Jesse Philip Flis: He should not be sitting in the House. 1 ask Mr. Speaker to ask the member to withdraw his remarks or leave the House.


John Patrick (Pat) Nowlan: Mr. Speaker, I certainly would not want to insult Polish sausage after listening to the hon. member.


Charles Joseph Clark: Well said.


James Aloysius McGrath: What is wrong with Polish sausage?


An hon. Member:: Who said anything about Polish sausage?


The Acting Speaker (Mr. Blaker):: Order, please. I will take a moment to explain. As far as I understand it, the hon. member for Oshawa (Mr. Broadbent) led off the debate. I will do the necessary minute mathematical calculations in terms of the proportions of the House, but I think I am correct in recognizing the hon. member for Capilano.


Mr. Waddell:: That is unfair!


Hon. Ron Huntington (Capilano):: Thank you, Mr. Speaker. My party has been here carrying on the debate and the other party has remained seated. 1 am prepared to follow the Deputy Prime Minister and Minister of Finance (Mr. MacEachen).
I was very impressed with an interview conducted by Mr. Jack Webster in Vancouver of Ilya Geral a journalist expelled from the Soviet Union some 18 months ago. He has made Canada his home for the last ten months and has developed a deep love for this country, but in commenting upon the politics of this land he said that Canadian politics were well behind those of Pakistan. After listening to the Minister of Finance tonight, I think the opinion this new Canadian has gleaned of our politics has been confirmed amply. This government rules by confrontation, not dialogue; it rules by passion, not reason. I am just amazed when they appeal to the reason of the people on this side of the House, and the Prime Minister (Mr. Trudeau) goes to Regina to tell people in the west to speak with reason and not passion, when it is the passion of this government and the passionate statements of this government which have riled the country to the point it is at now.
Also, the government rules by change, not continuity, and it is sudden change with which we are dealing tonight. If the words of Albert Schweitzer ring true, "Truth has no special time of its own; its hour is now and always", 1 should like to remind members on the government side that it is now time in Canada's history to return to the truth and face the truth of the issues before us now. There is no point in blaming it, as the Minister of Finance has just done, on the world and saying there is inflation all over the world. He blamed it on the oil crisis of 1978, yet countries with work ethics like Japan and Germany have been able to adjust and manufacture goods to offset the penalty they have been required to pay. They have paid a greater penalty than we have paid because they do not have energy sources such as ours.
Also I remind the Minister of Finance that the projections in the United States are that its inflation rate by 1984-85 will be down to the 4 per cent or 5 per cent bracket. The United States has already adjusted its economy to the world price of oil. These are the things we are not facing up to. These are the truths which the government refuses to face, truths which are aggravating the economic health of the country.
Many times I have pleaded in the House with the Liberals to give back to the business sector a decision-making base, a base which would return wealth-creating decisions to the boardrooms of the nation. What the boardrooms have given this nation is wealth. Now the government has given the wealth of this nation to the accountants and the lawyers who continue to try to get through the maze of confusion which has almost destroyed the private sector. Mr. Speaker, some time ago there was a call for the government to get out of the bedrooms of the nation. My call tonight is for this government to get out of the boardrooms of the nation and let the brains of the nation manage and create wealth and deliver something which will solve the problems of the nation.


Some hon. Members:: Hear, hear!


Arthur Ronald Huntington: What we ask is for the government to set down the rules of behaviour expected by the business community. We ask the government to set down the objectives which
December 18, 1980

must be reached before an equitable quality of life can be reached, not only by Canadians but by our neighbours, all of our neighbours on planet earth.
The growing problem of poverty and people's anxieties can only be resolved through the creation of wealth. No country on earth has a greater potential to serve mankind than this country of ours. If only we had honest political leadership instead of a group of intellectuals using it as a laboratory for political revolution then this potential would be realized.


Some hon. Members:: Hear, hear!


Arthur Ronald Huntington: Mr. Speaker, in place today we have a bureaucracy which honestly believes it knows better than the millions of people working in widely diverse activities under the rule of law. Our dilemma today in this country is the maximizing of the "take" from the wage earner to the point where the effort to add to the value of goods is no longer worth while. They have taken the incentive and the will to work away from the people. History is repeating itself. It is entirely possible that we are trapped in the inevitability of human frailty and human nature which has caused the failure of ten preceding civilizations. It is entirely possible, as the Prime Minister said some months ago, that "the enemy is us" and that we will not face the truth of our problems and our dilemma; we would rather play political games with an apathetic population.
As Sir John Glubb pointed out in the Canada Law Gazette in 1976 the stages of the rise and fall of great nations seem to be:
The Age of Pioneers,
The Age of Conquests,
The Age of Commerce,
The Age of Affluence,
The Age of Intellect
We have just come through that age.
The Age of Decadence.
Decadence is marked by:
Defensiveness,
Pessimism,
Materialism,
Frivolity,
An Influx of Foreigners,
The Welfare State,
A Weakening of Religion.
Decadence is due to:
Too long a period of wealth and power.
Selfishness,
Love of money.
The loss of a sense of duty.
I think we see too much of that today in this country. Today, in 1980, we have a report from the Economic Council of Canada which is entitled "A Climate of Uncertainty." We have been warned of the consequences of removing decision-
Economic Conditions
making base from the private sector. And here it is, we are facing it. We have a debate tonight on the economic crisis which this nation is facing.
Mr. Speaker, our troubles really started in that coalition government in the 1972-1974 period when we got that Benson tax legislation and that principle of a buck is a buck, is a buck. That was given to us in the guise of fair-sharing, more equity and delivery. Most of us accepted that there was some justification in that. But today we have very expensive dollars, or bucks, in the private sector. They are so expensive they cannot be risked; there is too much sweat and effort behind them. The bureaucracy use very cheap bucks which are printed by a machine-the machine of government. Those cheap dollars are being used to destroy the private sector. There is no way the private sector can create the wealth to compete with the power of take-over and buy-outs which the federal government has. The cry from the private sector is due to the reckless, irresponsible way the bureaucracy spends the sweat of labour, all under the guise of fair-sharing. People in this land are generally proud to pay their taxes, and are proud of the amount they pay. But they do object to it being wasted and squandered, used unwisely, which is the history of this Liberal government.
The federal government sees that $10 billion heritage fund in Alberta, which is set aside to build wealth-creating industry that will last long after the non-renewable resources are gone, as a sinful thing, and by hook or by crook they want it to squander as they have squandered the wealth of this nation over the last 16 years.
1 am at some risk with respect to my next comments. The real tragedy started, I think, when we lost our great opportunity, when we failed to fully study and discuss the Mackenzie Valley pipeline. If we had gone ahead with that project we would have had a transportation system moving the energy of the North Slope down across this country and to our neighbour to the south, upon whom we depend for our freedom. As the Minister of Finance has stated tonight, we are closely tied, in economic terms, to our neighbour to the south. For $8 billion that transportation system could have been in place and that tax revenue would have been in place for the communities. The native people would have had the benefit of the schools which would have been created. The $22 million the federal government spent on the transportation system up through that valley would have been used to benefit those people. We would have had people working. We would have had steel mills working. As a result, we would have had wages and taxes and some $3 billion less unemployment insurance to pay. We would have had pumping stations and roads. And just as all that was phasing out, Mr. Speaker, we would have been able to start another tar sands plant. We would have been able to get on with the Cold Lake project. Where on planet earth is there a nation which has ever been given more opportunity than Canada? And what has this government done? They have squandered it and thrown the opportunity away. They have caused megaproject after megaproject to be backed up, with no action at all-nothing but confusion. There will be all of these megaprojects coming in at once and there will be

December 18, 1980
Economic Conditions
unbelievable shortages of everything: labour, steel, everything. There will be utter chaos.
Mr. Speaker, in the Christian belief you are supposed to forgive. 1 think somewhere in the Bible it was said: Forgive them, for they know not what they do. I have a great deal of trouble forgiving in this instance because 1 think they know what they are doing. They could not pull off the constitutional package and the energy package which the government is trying to pull off if they had a healthy economy. The opportunity was there and this government threw it away. Only under stress of economic chaos, duress and frustration could they ever get the Canadian population to the apathetic state in which it would accept the type of revolution they are imposing on us through their energy measures and through the constitutional debate, a struggle we are in the midst of right now.
I would like to turn, now, to Petro-Canada. Why is Petro-Canada not using the resource and the mortgaging power it has over the assets of this nation to increase the energy reserves of Canada? Why is it buying art for its walls? Why is it buying the downstream industry? Why is it buying out fully-owned Canadian independents in the distribution sector? Why is it joining the majors who have a stranglehold on the refinery gate price of oil? In Burnaby, B.C., Petro-Canada moved in and bought out Merit Oil. Merit Oil was a discounter serving the Vancouver community with 27.8 cents a litre gasoline when full service gasoline was 29.8 cents per litre. Yet Petro-Canada moved in and bought out that independently-owned Canadian operation.


Mr. Lalonde:: They were bankrupt.


Arthur Ronald Huntington: They were not bankrupt. The Minister of Energy, Mines and Resources (Mr. Lalonde), that great guru of energy, says they were bankrupt. They were in trouble for only one reason, which was that the independents all across Canada, including those in the minister's own province, have been strangled by the people who own the refining sectors of Canada.


Marc Lalonde: The multinationals.


Arthur Ronald Huntington: Who has joined the multinationals, Mr. Speaker? Petro-Canada is right in bed with the multinationals just in the same way as the NDP is in bed with the minister.


Some hon. Members:: Hear, hear!


Arthur Ronald Huntington: Where are the resources of Petro-Canada being used to produce one new barrel of oil, explore, or risk money. Who in Petro-Canada can make a decision and say "The hole will go here"? Instead, they move in and take away the intellectual property of all those people who have taken risks in the high north, if they shift their major effort into the downstream petroleum industry.
I listened to the Minister of Finance tonight; I think he left the House still not understanding what was wrong. The government's priorities are all wrong. It does not know where to
direct the initiative and the financial wealth which is under its control. Once again, they are wasting it. Let us look at the world price. The government refuses to move to world price. Consumers all across Canada are paying 135 per cent to 164 per cent of world price for consumer goods, but we go along with that because it is good for payrolls and industries in the central sector of Canada.
Yet, when one of the regions, one of the outbacks of the country, wants world price for one of its diminishing resources, all of a sudden that is not to be allowed. The consuming provinces want the resource for 50 per cent of the world price. What would happen to this country if we moved more rapidly to world price? It would open up new vistas of research and new opportunities which we have lost because they have all gone to Germany, Japan and the United States. It is the world price which has given them that opportunity, and as a result we will have to buy back those manufactured products and those technologies from those countries because we have been so slow on this issue.
We would have new reserves of energy and new alternative forms of energy if we had moved faster to world price. We would have had a conservation aspect which has been proven in the United States and which Canada does not have. We would have had a new vitality. We would have had new research and we would have reduced unemployment. We would have had a dollar at par and we would have lower interest rates. We would be one of the leading industrialized nations of this world using the God-given resources of this country, instead of squandering them under the policies of this government.


Some hon. Members:: Hear, hear!


Arthur Ronald Huntington: With our dollar at par, we would have new purchasing power for our wage earners, and they would not have to demand so much in terms of the diminishing value of the dollar to maintain purchasing power. This is what is wrong.
I listened to the minister answer a question on research put to him by one of his colleagues today. I could not believe what I was hearing. The Liberal research and development policies of the past 12 years have delivered us into an $18 billion deficit in fully manufactured goods. The worry I have is that the bureaucrats serving the government side of the House truly believe they have a greater wisdom and ability to direct tax points and/or tax revenues into areas of risk and research and innovation.
It boggles my mind, because if the government delivered tax points for another $50 million in incremental expenses it could deliver tax points out to the business sector and allow those decisions to be made by the entrepreneurs, engineers, and scientists in the private sector, and suddenly we would be seeing activity and wealth starting to bloom in this country which we would never get from the halls over on Queen Street or the halls of this building.
We have an obsolete and archaic research and development policy that is perpetuated by the bureaucracy and the attitude
December 18, 1980

of this government. If I do one thing tonight I plead and appeal that it hear this message, crack that nut and give tax points out to this industry as has been requested by every responsible association in Canada.
When I hear the Minister of Finance speak, as he did tonight, about everything being the fault of everybody else in the world, about our inflation being the fault of the United States and the fault of the 1978 energy oil price increase, 1 have to say that it is not so. We are the most gifted nation on earth. We have an energetic, hard-working, brilliant people, but the policies of this government are causing the most valuable assets we have, our capital and our intellectual worth, to emigrate.
This has happened down through history when governments become oppressive and remove the incentives from the wealth-creating sectors of nations; it has gone on for ten civilizations and it is being repeated right here in Canada. But that does not have to be the case. There is a new challenge and a new awareness, and I ask the government to take that into consideration. Only then can we turn this country around and create a unified, hard-working nation. We must get rid of the dole, the massive unemployment insurance budget and get back to work again, back into the schools and back into the world community where we can serve it properly.


The Acting Speaker (Mr. Blaker):: Before I recognize the hon. member for Broadview-Greenwood (Mr. Rae), courtesy requires that an apology be extended to the hon. member for Broadview-Greenwood by myself, by the Chair. 1 have reviewed what happened since the debate began at eight o'clock, and it is perfectly clear that the balance of representation is of considerable disadvantage to the party which proposed the motion.
By way of explanation, apparently in the early part of the debate, no members to my right rose to be recognized. In the future, and as I and my colleagues in the Chair move through debate during the evening, we will establish the proper ratio which may have gone wrong earlier as a result of my decision to recognize the hon. member for Capilano (Mr. Huntington).
The one thing that I do want to say is that if an hon. member does not rise in the party which would ordinarily be recognized, from either the left or the right, at the proper point in time, then the Chair would consider that opportunity lost to that party.


Bob Rae: Mr. Speaker, 1 had occasion to see two editions of the Toronto Star today. I saw both the second edition and the fourth edition. The second edition of the Toronto Star, which is known affectionately to its readers as "twinkle, twinkle, Liberal star; how I wonder what you are", had an article with the headline "Interest Rates May Soon Fall Rapidly: MacEachen". The fourth edition had an article with the headline "MacEachen; Higher Rates Inevitable". That covers Liberal policy and the Toronto Star from A to B.


Allan Joseph MacEachen: Wait for the next edition.
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Marc Lalonde: Wait for the fifth edition.


Bob Rae: The Minister of Energy, Mines and Resources (Mr. Lalonde) will be in the fifth edition of the Toronto Star, and I am sure that we will be reading about him on the editorial page tomorrow.
One of the things which in a sense has been missed in this debate is the continuity involved in the policy which has been followed by the Department of Finance, the Bank of Canada and the Government of Canada for a number of years. That policy is based on two assumptions. It is a policy which was- and I do not intend to make a partisan speech this evening in terms of whatever may or may not have happened in the last year or two years-followed by the government of the day, be it Liberal or Conservative; that Canada is a colony, that we have an essentially colonial relationship with the economy of the United States. The euphemism for this expression is to say that our capital markets are interlinked. If the American bank rate goes up, our rate has to follow. The second justification for our interest rate policy has been quite simply that control of the money supply by making money more expensive is the most effective means of fighting inflation.
This is not the first opportunity the House has had to discuss this question. This is not the first opportunity we have had to discuss the monetary policy which is being followed by the Bank of Canada and by the government. I am sorry the Minister of Finance (Mr. MacEachen) was not the finance critic at that time; perhaps if he were we would have seen more clearly and precisely the nature of Liberal policy, but the earlier opportunity we had in recent memory was in the committee which was established by the House last year when we had governor Bouey before us in order to study the question of interest rates. This is not the first time we have been inflicted with this disease. This is the third such fever we have experienced over the past 15 months. The first fever was in the summer and fall when the hon. member for St. John's West (Mr. Crosbie) was minister of finance. The second time was just as the Liberal government took office and the third time is today. The interesting thing about these fevers is that they are not all similar, as has been suggested. There is one very significant difference in the interest rate fever which has struck at the Canadian economy. Each time the peaks are higher and the valleys are higher. Each time the peaks get worse and get more severe.
What concerns me particularly is that nothing has changed. There is nothing in what the government has said today which will give Canadians any sense that the situation will be any different in six, eight or 12 months hence if a similar disease inflicts the American economy or if the United States decides the same kind of policy is the one they must follow. There is indeed a guarantee that the policy here will be exactly the same, but again, with a significant difference. The difference is, and I say this not in a particularly partisan way but simply as what many analysts have told us about what would happen, that is, the rates the next time will be even higher. At some

December 18, 1980
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point one has to ask oneself whether the policy which has been followed, since it has produced three serious bouts of interest rate fever, and the imposition of even higher rates further restriction of the money supply and a policy of extremely conservative fiscal policy, are appropriate to the position in which we find ourself.
Again, I could make a partisan political attack on the inactivity we have seen from the government. I think the inactivity which we have seen calls for it. We have had an extraordinary performance by the Minister of Finance. I am thinking of president Kennedy's book called "Profiles in Courage". The Minister of Finance has neither a profile nor courage. There is no evidence that he is prepared to take his case to the Canadian public. There is no evidence that he is prepared to take his case to the western provinces or to the eastern provinces or to go to the people of Canada to explain the policy which the government is following. He has not done that. It is almost as if we have an invisible policy and an invisible Minister of Finance. The assumption is that the policy will somehow sell itself or that the problem will go away. Sometimes when we speak we reveal things we do not mean to reveal, and when the minister said, "This government has an anti-inflation posture", 1 thought it was a beautiful expression of the government's position. The government does not have a policy, Mr. Speaker, the government has a posture. It is with the posture and with the policy I want to deal. It is a common thread which unites Margaret Thatcher's England with Giscard d'Estaing's France with president Reagan when he becomes president of the United States. It is a similar policy. The minister can take comfort, as he often does when he comes into the House and says, "I went to a meeting of the IMF. Everybody is doing the same thing. They all agreed with us".


Allan Joseph MacEachen: What about Helmut Schmidt?


Bob Rae: The minister says, "what about Helmut Schmidt". I will deal with Helmut Schmidt momentarily, Mr. Speaker. But I ask, what is the unemployment rate in Helmut Schmidt's Germany? There is no comparison between the level of unemployment, the German economy and our own.
There is no comparison between the level of undercapacity in their economy and our own.


Marc Lalonde: They ship them to Turkey.


Bob Rae: The Minister of Energy, Mines and Resources says they ship them out. That was true in 1974, but it is not true today and the minister should know it. He should know better than to make that kind of a blanket statement with respect to the policy of the German government.
What is the nature of the problem? The nature of the problem in Canada is that essentially we have a colonial and a branch plant economy. The problem is simply being perpetuated and compounded by policies which the government is following. If we look at the importation of inflation and the underdevelopment of the economy, the fact that we do not have simply frictional unemployment or cyclical unemployment-unemployment which comes and goes with undercapacity in the economy-we find we have tremendous levels of structural, permanent unemployment and one has to look at the nature of the economy and the nature of the economic structure in order to get at the answer to those problems. That is not what the minister is saying. He is saying that if we continue on what he calls this middle path, doing a little bit here on the one side and a little bit on the other, somehow we will resolve these fundamental contradictions. But I do not see how that is possible. I do not think that it is possible. How is it going to be possible?
The hon. member for St. John's West pointed it out. We pointed it out to him when he was minister of finance. We pointed it out when he was in committee defending the policies of governor Bouey, we pointed it out when we went through the second fever. Of course, we have a huge current account deficit. Of course, we are in debt to the rest of the world. Why are we in debt to the rest of the world? There are two basic reasons. First, we import so much finished goods and machinery. In 1979 there was a $17 billion deficit. Second, we export so much of our dividends and debt payments out of the country. Why do we do that? We do that because essentially we have a colonial economy.
How do we break the pattern and the cycle? How do we engage in a new policy which will make it possible-not to find an instant solution because no one in this House is putting forward an instant solution. The minister cannot come in here and say there are no instant solutions or no easy answers. Of course not. But the question he has to ask himself is this: is there some hope that at the end of a policy which takes five years, ten, 20 or 25 years to plan for the future of our economy, it will lead to greater independence? None of us in this party whose roots are so international would think even for a moment about getting off the end of the world, which is the kind of rhetoric the minister talks about. That is not the question. The question is, how can we in Canada attain the same level of independence as they have in Japan, in Britain or in Germany? The minister was quite right when he said to the hon. member for St. John's West there is no comparison between our economy and theirs because their economy is much more independent of the American economy. They do not have this capital market interlink. They are not a colonial economy in that sense. All we can say is "Hear, hear!" The question is, how do we get to being that kind of an independent country with that kind of independent economic policy?


An hon. Member:: Political will.


Bob Rae: Political will is part of the answer. Part of the answer is to have a sense of monetary policy which allows you to break the cycle. How do we break the cycle? I suggest we break the cycle by following an interest rate policy which relates to the inflation problem in Canada and relates to the needs of Canadians and the needs of the domestic economy. If we follow an interest rate policy which will have an eventual effect of overvaluing the Canadian dollar, I suggest to the minister, although 1 know this is not a fashionable time to say
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so when the dollar is lower than it has been, the basic concern has to be not that the dollar will be undervalued over time, but that the dollar will be overvalued over time.
The impact this is going to have on our exports and our ability to substitute for all that volume of machinery, heavy goods and finished products that we import will be devastating. The minister is aware of that fact. When the Minister of Industry, Trade and Commerce (Mr. Gray) was in opposition, he was not afraid to mention this. Indeed, it was the Parliamentary Secretary to the Minister of Finance (Mr. Evans) who served on that committee studying interest rates. He was one of the great advocates of an independent interest rate policy in order to reach the stage where we would have a lower dollar. His voice has become a little muddle since becoming Parliamentary Secretary to the Minister of Finance.


An hon. Member:: Gagged.


Bob Rae: If that was his policy then, why is it not his policy now when we have an opportunity to do that? The minister says if we did that, we would be fuelling inflation. I can only answer by saying we have recognized that if we have a lower dollar, it will have a temporary short-term impact on inflation.
I will come back to that again in a moment.
One has to ask oneself, is it not better for the long-term potential of the Canadian economy that we make some imports more expensive in order to encourage the development of a Canadian economy. That development will not take place if you have interest rates which are so high that no manufacturer, Canadian, foreign or any other kind, will invest in secondary industry in Canada. That is the circle which has to be broken, because it does not make any sense.
It does not make any sense to have a high interest rate policy when our economy is running between 75 per cent and 80 per cent of capacity. It does not make any sense to think you can squeeze inflation out of our economy by increasing interest rates the way the government has done. It does not make sense to increase interest rates to the point where supply is so restricted that the inevitable result is inflation.
Why do we have inflation in the housing industry or in agriculture? There are many people here who know more about agriculture than I do. However, a simple understanding of the basic principle of economics teach one that if you restrict supply the farmer will inevitably charge more for his goods. Therefore, those goods will be more expensive to the consumer. If you charge higher interest rates to the home builder and he cannot afford to build any more, instead of building 1 5 homes he will build ten and charge more for them.
This is the most simple, elementary logic, yet we are told by the monetary geniuses of this world who have been applying leeches to the body politic much as medieval doctors applied leeches to a body suffering from a fever, that the application of high interest rates will have something to do with successfully fighting inflation. It is a nonsensical view. It does not make any sense.
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The minister says these are all simple economic homilies that we on this side are putting forward. I will try homilies, questions, pleading, speeches, or anything to get the minister and the Department of Finance to recognize that the policy which has been followed by the government and the policy followed by the Bank of Canada under the previous government is simply going to compound the problems which he and the Bank of Canada say they want to solve. This is a point we have been putting forward at every opportunity.
I do not understand how the minister can say there is excess demand in the economy which is somehow producing inflation. I do not see how people in his department can say that when we have an economy working between 75 per cent and 80 per cent capacity that a stimulus to the economy in the form of a tax credit is going to be inflationary. That does not make any sense.
It does not make sense to reject out of hand as the minister has done the idea of a fair prices commission which would have the ability to deal with those large institutions which now set prices in the marketplace. The minister is supposed to be a sophisticated person. He knows the economy is not some kind of bazaar where you have millions of sellers and millions of buyers. There are many markets where there are a number of restricted sellers. Unless there is a government institution on a permanent basis empowered to investigate prices and roll them back where they cannot be justified, then the consumer, the average Canadian and average worker, is not being protected. You will get the inevitable result. The minister knows what that result is. Everyone will try to find their own private solution to a public problem. Every trade union will be properly attempting to do its best to protect itself. There will be a worsening in industrial relations and a worsening of the position of workers in the economy in their determination to find their own solution.
The government must be prepared to say to workers it is ready to enter into a social contract with the people of Canada, to take fiscal and tax measures so we do not find a few people getting off scot free, helped by a capital gains system which does not make sense and the lowest level of wealth tax of any country in the OECD outside of Italy.
The government must be prepared to make those changes for the Canadian people. It must be prepared to show some fairness, and see that pensioners are given something other that the moronic incantations of the Prime Minister about spending a little less on other things. On what does he want them to spend a little less? Foreign travel? It is nonsensical the way the Prime Minister talks to the people of Canada.
The Minister of Finance has an obligation not simply to sit in his chair as we rise here in the House in an attempt to get some indication from him as to what is the real policy of the government. The reluctance with which he stood up tonight was symbolic of his reluctance to defend the policies of this government anywhere in Canada.


Mr. Rose:: You can't blame him.

December 18, 1980
Economic Conditions


Bob Rae: My colleague says you cannot blame him. The minister has an obligation. Instead of presenting an energy policy which is neither fish nor fowl and then claim that that is his budget-


An hon. Member:: Fowl?


Bob Rae: Turkey I think is the word we are looking for. He has an obligation to present a budget which deals with the long-term problems in the economy, the fact that we are a colonial economy. Because we are a colonial economy we find ourselves in the position we are in today with respect to this fever of interest rates in the United States.
Unless we are prepared at some point to break that circle, cut that ribbon and see our way clear to a new and very different policy, we will be back here in six or eight months, just as we said to the minister before, and we will be faced with exactly the same problems, only they will be worse. The dividend outflow and debt outflow will be more serious. The level of interest rates will be upwards of 25 per cent or 27 per cent. There is no logic to it. There is a time to break the pattern. We argued before the committee a year ago that we should break the pattern and we argue again now.


Marc Lalonde: Mr. Speaker, the hon. member for Broadview-Greenwood (Mr. Rae) was questioning the fact that the Minister of Finance (Mr. MacEachen) waited to intervene in the debate this evening. It was not through fear or any particular concern about what he had to say. He was guided by the feeling that he should first hear something sensible from the opposition. Having listened to the Leader of the NDP and then three speakers in a row from the Conservative party, there was no light coming, so he decided there was no point in waiting further to see what would come from the other side.
For our part, we listened with great attention to what the Leader of the New Democratic Party and the Leader of the Opposition (Mr. Clark) had to say on this subject. We were not overly impressed with the crocodile tears of the Leader of the Opposition. We were certainly dismayed by the behaviour during the speech of the Minister of Finance. We can understand his frustration, bitterness and worries about the threats he receives not only from the backbench, but the front bench on his right and on his side while the various players jockey for position in the forthcoming leadership campaign. But certainly none of that was justifying-


An hon. Member:: You have more potash on your face than the Minister of Agriculture (Mr. Whelan).


Marc Lalonde: None of that was justifying the types of insults he threw at the Minister of Finance when he was speaking during his juvenile behaviour in that speech. I say this is sad behaviour on the part of the Leader of the Opposition.
We heard complaints tonight, especially from the Conservative side, about energy, and expressions of concern about
higher fuel costs that Canadians are having to face. We share that concern. As a matter of fact, we have done something about it in the national energy program.
But, I want to tell the Conservatives that not only are their slips showing, having heard the hon. member for Capilano (Mr. Huntington), I would say they are walking stark naked, because what they really have been doing on this subject is a lobbying for big oil companies. In fact, in the last few days, having tried to argue the case of the oil industry as such, they have realized they were creating more and more problems for themselves.
Now they have tried to argue that the industry is going into a terrible decline and that, all over Canada, Canadians are going to find themselves unemployed.
We have heard about oil rigs in the last three or four days like we have never heard about them for years. What are the facts? From what we hear from some members of the opposition one would think there is a caravan of rigs starting from Edmonton right down to the border, every mile with a few rigs moving south. What are the facts? The latest available figures indicate that between 15 and 20 drilling rigs have been shipped to the United States since the end of October. Currently there are about 100 rigs idle; that is a big number, wouldn't you say? It is exactly the same number of rigs as were inactive in October of last year when the total stock of drilling rigs was 572.
What was the situation before the budget? Conservatives would like us to believe that it is only since the budget we have had to face events such as these. This should be put into its proper perspective. The facts should be given. Let me quote from an article which appeared in the Edmonton Journal, unless I be accused of going to a friendly source. I quote from the Edmonton Journal of December 10 which carried an article by Gordon Jaremko. He was covering National Energy Board hearings on oil supply and demand in the oil industry. What does the article say? It says:
Oilmen call barren wells dry holes-and Conservatives may be drilling a political dry hole with their charges that the Oct. 28 budget is prompting an exodus of oil rigs.
Submissions to the National Energy Board suggest that oilmen were looking elsewhere even before Finance Minister Allan MacEachen raised their taxes.
The article goes on to state:
But briefs from the oil industry to the NEB's hearings on the outlook for energy supplies indicate that a slowdown was already in the offing last summer after four years of record-breaking activity.
Later in the article we find this:
The industry survey . .. strongly suggests that Canadian oilmen want to drill where the markets are.
Canadian prices were not considered to be a major restriction to growth, implying a willingness of the operators to exchange a portion of their per-unit revenues for increased total sales.
What is the real situation now? Hearing from the Leader of the Official Opposition one would think that Alberta is going into a great depression and is taking the rest of Canada with it. Again I turn to a source in Alberta itself. This is a quotation from William Barratt of the Edmonton-based Western Eco-
December 18, 1980

nomic Consultants. He put some perspective on the federal budget during a recent speech to an industrial relations conference in Banff. Let me quote:
-the potential economic implications of the federal energy policy for Alberta must be assessed against a backdrop of what must be described as a superheated economy ... Although the rate of economic activity in Alberta will undoubtedly slow down from the hyper level of the past few years, the rate of growth and over-all level of economic activity will still be higher than the national norm and probably exceed that of most western industrialized countries

That is what Mr. William Barratt had to say.
Jeff Sallot who was writting on this subject in Edmonton said:
A sector-by-sector look at the Alberta economy suggests continued real growth almost everywhere-forestry, manufacturing, petrochemicals, construction and even mining, a sector that includes the oil and gas business. Only the agricultural sector, hit hard by inflation, could have problems next year.
I would say a good part of the reason for that is high energy prices. Mr. Sallot went on to conclude:
In practical terms, the economic outlook means Albertans, who are already among the most prosperous people in the world, may have to lower their high expectations for a little while. It will be a bit tougher to get rich quick in 1981. But there will be no bread lines along Jasper Avenue, or cobwebs on oil refineries.
That is the situation as it is seen by people who live and work in Alberta and who are not guided by partisan views in reaching particular judgments on the present situation.
What is the situation in the industry? The Petroleum Monitoring Agency released a report as recently as yesterday. The hon. member for Broadview-Greenwood quoted from an edition of the Toronto Star. What do we find there from the Petroleum Monitoring Agency report? The heading is "Oil profits higher, but less goes into exploration". The article states, in effect, that for the first nine months of this year the profits of the oil and gas companies went up by 54 per cent over last year, which was again an increase in profits greater than the rest of the economy and the rest of industry. However, reinvestment in exploration fell, comparatively, from the first nine months of last year.
What have we seen since the national energy program was introduced? We have seen companies coming out announcing larger exploration budgets than they had foreseen. One of them was Norcen, a Canadian company. There may have been some multinational foreign companies who will be squeezed, relatively, out of some of their cash flow because of our taxes, but Canadian oil and gas companies, when you take into account the grants we are making available to those firms under our national energy program, are finding themselves better off than they would have been without the national energy program. That can be established by looking at the figures, firm by firm, and we have been doing this with a number of Canadian firms.
If we look at the average for the industry, what do we see? The Petroleum Monitoring Agency has reported, not in this report but in the one previous, that the industry's cash flow increased by 67 per cent in the two years between 1977 and
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1979.	A further increase of almost one-third is projected for
1980.	If we include the incentive payments which are mentioned in our program, the whole industry's cash flow in 1981 is estimated, not to decline, but to rise by a further 7 per cent over 1980, despite the imposition of higher taxes. Even if those incentive payments are excluded and even if the companies decide not to apply for the grants which will be available, the 1981 industry cash flow is projected to be 28 per cent higher than in 1979. That is the situation of the oil and gas industry under the national energy program.
There are firms which may be relatively hurt, and I have said before that we are looking at those situations individually with the firms. We are trying to see whether adjustments are required so that those which would be unfairly affected and hurt would find themselves in a position to carry on their operations. We are doing this especially having in mind Canadian junior companies.
The figures with respect to the future of the oil and gas industry, and the future of the economy in Alberta in particular, are not the ones the official opposition has been trying to put forward in the last few days and weeks. What is their solution? They say there must be more activity in the energy field. As we saw in their budget, their solution was substantially higher prices than those proposed in our budget. Hon. members opposite proposed that the price of oil should go up to 85 per cent of the Chicago, or world, price by 1984.


Michael Holcombe Wilson: Would you repeat that?


Marc Lalonde: I said 85 per cent of the Chicago, or world, price in 1984. That is what the Conservative budget provided last year.
Tonight the Leader of the Opposition mentioned that Sheik Yamani was forecasting that next year the price of oil might even go to $80 a barrel from the current $32 set by Saudi Arabia.


Mr. McDermid:: And you would pay it to him.


Marc Lalonde: Canadians would have to pay 85 per cent of $80 per barrel. That is $68, and the Conservatives want Canadians to pay that for all production, including Canadian production. They want Canadians to pay that very high price. Canadians have no choice but to pay that high price for the 15 per cent of our consumption which we have to buy on the world market. We have no choice but to pay those extremely high prices which the cartel called OPEC sets for 15 per cent of our net consumption. However, we as Canadians do not need to pay OPEC prices or anything like 85 per cent of them for domestic production which belongs to all Canadians and which should be used for the benefit of all Canadians.
The Leader of the Opposition talked about the fisherman, the farmer and the worker. What would that policy mean for the fishermen, for the farmers or for the workers who have to travel to work? It would mean tremendously higher prices. It would not mean jobs. It would mean more profit for some oil companies, more money in their coffers and billions and

December 18, 1980
Economic Conditions
billions of dollars in the hands of one provincial government. That is what it would mean.
That is what we have said should be challenged and reorganized to make sure that the profits will be shared in this country fairly and equitably between industry, the producing provinces and the national government on behalf of all Canadians. What the Conservatives proposed were prices which, even before the latest increases mentioned at the OPEC conference in Bali and before the potential figure of $80 per barrel mentioned by the Leader of the Opposition tonight, would mean for every single family which heats its home with oil and has a car, additional costs over the next four years of more than $800, and this does not take into account the recent increases which have been announced. That is the Conservative policy. Hon. members opposite say that they provided a tax credit. Big deal!


John Horton McDermid: It was a big deal for a lot of people.


Marc Lalonde: Yes, indeed, it was a big deal; $30 per child, and this year it would have been only half that. In 1980, $30 per child was too high for Conservatives. It would have been $15 per child this year. That is a big figure, the figure of S6V2 cents per child, to compensate for those large increases in the price of energy. That is Tory policy for you. That is what the Conservatives were offering Canadians in their budget. That is what they are trying to get us to swallow now.


Walter David Baker: What are you doing this year, Marc?


Marc Lalonde: What we have put forward and what the Minister of Finance has presented in the budget is an energy program which will benefit all Canadians and which will be for all Canadians. The program will ensure energy security, and that energy security will be achieved not just by relying exclusively on higher prices and higher company profits. It will be achieved by helping Canadian consumers convert to something other than oil through grants of up to $800 per home to achieve that conversion. It will be achieved by helping Canadians conserve through the provision of more money to insulate their homes. That money will go to Canadian consumers all over Canada to help them meet the goals we have to meet in the field of energy. Ours is a program which is fair because it tries to distribute the profits and benefits of the oil and gas industry to all Canadians. We have a special program which provides $460 million to Atlantic Canada alone to make sure that people in the less economically active regions of the country will not be left by the wayside over the next few years. We will ensure that they have access to natural gas and be able to insulate their homes like anybody else in the country. Fundamental to this is a program of Canadianization of the industry. That program of Canadianization is part and parcel of achieving energy security because when we as Canadians control the Canadian oil and gas industry we will be able to control our future.
These are our objectives. They have been set out. We believe they are supported by Canadians, and we do not believe
Canadians will be misled by the misinformation the Conservatives are trying to put forward.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, we have been treated tonight to an oration by the very tired and grey Minister of Finance (Mr. MacEachen), whom time has totally passed by. He is totally out of his depth. I listened to him in the House tonight. I did not learn one thing from what he told us in terms of the interest rate policy or the economic policy he put forward.
He told us the budget has set out a medium-term program for fighting inflation. Well, Mr. Speaker, we have had a very good start because we are losing ground badly in that fight and it looks as though we are going to lose even further. I have listened to President Carter in the United States formulate what he has called his misery index. I have calculated this misery index, but I have added one significant factor because of a new program, a new policy which has been introduced by the minister and by the governor of the Bank of Canada. I call this the misery and failure index because he has added now the level of the Canadian dollar.
So what we are looking at here in this new misery and failure index is the unemployment rate, the inflation rate and the drop in the Canadian dollar. In March, 1980, by my calculations, the misery index was 30.78. The current figure is 36.10, that is about a 5.5 point increase, which is about a 15 per cent drop in seven months in power. That Mr. Speaker, is going to go higher, a lot higher, under the policies which this government has chosen to follow or not chosen to follow.
Canada has not yet experienced an oil price increase. I listened to the Minister of Energy, Mines and Resources (Mr. Lalonde) last Friday and this week talking about the amount of flexibility in this national energy program, which is the most ill-conceived energy policy this country has ever seen. The objectives, no one can deny, are good objectives, but they just do not work. They do not work and the minister knows it. He will have to change his policies in relation to price, he will have to change his policies with regard to exploration incentives, revenue sharing between the provinces, and the Canada Oil and Gas Act, if we are going to see this country achieve anything close to self-sufficiency. In doing that, we are going to suffer a greater price shock than would have been the case had the policies which the government of my colleague, the Right Hon. Leader of the Opposition (Mr. Clark), had agreed to with the province of Alberta last December been implemented. That price shock still has to come, and it is going to affect this misery and failure index even more. We will probably reach 40 points before we return to the House on January 12.
In the face of this, the Minister of Finance has thrown up his hands. He says it is OPEC, it is the Federal Reserve Bank, it is slow growth in the international economy. Well, Mr. Speaker, he can blame all those things if he wants, but we and
December 18, 1980

the people of Canada know that more than that is causing the problems which face us today. The Economic Council report which was released about two weeks ago-it is the report which, as the minister knows, was written prior to October 28-stated that last year the two driving forces in the Canadian economy were the world economy, which was still going up at that time, and energy development in this country.
I am sorry the minister is leaving.


Marc Lalonde: I am going to have a drink, a sober drink, but I will be back.


Michael Holcombe Wilson: I want the minister's mind very clear for this. This year they are saying that the only thing that is left is energy development in this country. As I have said before, and you have heard me, Mr. Speaker, the budget of the Minister of Finance torpedoed that hope. That is why there must be changes in the national energy program if we are going to see economic recovery under way in this country which will ease the crisis we are debating today.
The Minister of Energy, Mines and Resources betrayed a sad misunderstanding of what is going on in this country and in the world today. He prefers to distort or to ignore the facts. He spoke about 15 per cent imports. Right now the oil imports are 25 per cent and they are going to grow to 40 per cent of our requirements. It is fine, it is a beautiful theory, to say, "Let us ignore the rest of the world, let us have a made-in-Canada energy policy, let us forget that things are happening in other parts of the world which have the effect of increasing oil prices." If we increase our oil imports from 25 per cent to 40 per cent, we know, and the National Energy Board has set out, that we will find ourselves in the same situation as the United States where, about ten or 15 years ago, imports amounted to about 25 per cent. Now they are 50 per cent and they have been forced to go to the world price as a result. Here we are talking about our import position of 25 per cent in the knowledge that imports will go up to 40 per cent, and we ignore the very sad and painful experience of the U.S. government. I am sorry the Minister of Finance is also leaving because I would like him to hear some of the points I am making.


Some hon. Members:: Shame!


Michael Holcombe Wilson: We are not arguing the case for the big oil companies, the multinationals, as the Minister of Energy, Mines and Resources says we are. We are arguing the case for Canada and Canadians because it is the Canadian people who will suffer under the national energy policy set by this government on October 28.
The minister says he will do two things for all of Canada. The national energy program will save Canadians from the vast increases in oil prices which are occurring in other parts of the world. I say this is not going to work. The minister knows it. It will not work because he has allowed for very large increases further down the road. Politically it is nice to say, "Today we are going to have a low price increase to $4.50."
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He knows that down the road it will be $7, $8, or $10. Why not now? Because the minister will be out of this House in five years time when those larger price increases will come into effect. In the interval we will lose a valuable period of time in which to develop our own production in Canada so that we could reach self-sufficiency and put in place an energy policy divorced from other countries in the world based on a supply firm enough to allow us to do that. This will not happen under the present energy policy. It will only happen if the minister sees some sense in making the changes which 1 think he knows will have to be made because so many people are telling him so.
The minister talks about drilling rigs leaving this country. He said that 1 5 or 20 drilling rigs have left the country. Let me tell you, Mr. Speaker, that it requires 60 trucks to move a drilling rig. About six weeks have passed since this policy has been announced and the effects have not been felt directly by the people in the drilling programs. But we do know that the companies have announced their intention to send 60 rigs out of the country. We also know that very little business has been announced by the oil industry for the drilling rig companies next summer. At this time of the year you would expect that 75 per cent of the drilling rigs would have been spoken for. They have not, and there is a good reason. The reason is the chaos and the lack of confidence in that industry today which is calling on people to pull their horns in. They say, "Sorry, boys, there is no business." That is why these drilling rigs are going south. They are not going south because they want to go south but because the companies have to pay high interest rates and the rigs cannot sit idle with the expenses that have to be carried by the companies in this country when there is business to be done in the United States. About three or four weeks ago I spoke about an article called "Thank you, Canada" in which the author concluded that Canada had done more to develop the production of oil in the United States than all the bureaucrats and all the regulations of the U.S. department of energy. That is one of the things which is causing these drilling rigs to go south. Another reason is the much more favourable environment in the United States. The government of the United States knows that it must produce oil because its oil imports amount to 50 per cent, an import level which we will face by 1990 because of this policy. It is causing them to turn around, remove the regulations and restrictions, and build in incentives to allow them to reach the levels of production which are necessary in the United States. Another reason is that the incentives are there to encourage companies to move to the United States.
1 should like to refer to just one figure. Prior to October 28, the netback in the United States was about $25. Some states were lower, some states were higher, but it was roughly $25. According to the minister's policy and the national energy program, in Canada it was about $9.70. The discovery rate is somewhat better in Canada than in the United States, but when we take into account the differences, it does not explain the total differences between $9.70 and $25. The returns, the

December 18, 1980
Economic Conditions
incentives, the whole environment and the attitude of government toward the industry are much more positive in the United States than in Canada. Those are the reasons for which companies are moving to the United States.
That started to happen before October 28, and 1 should like to remind the minister of that fact. He said that all this did not happen as of October 28, that things had started before. Sure, things had started before, but the reason was because the environment in the United States was better and the price relationship down there was better. The attitudes expressed by President-elect Reagan in relation to an energy program are much more positive than the national energy program. We will see a wider spread than the $15 one of today. It will cause even more companies to move.
The Prime Minister (Mr. Trudeau) talked about needing examples of companies suffering in Canada. We are not talking about companies which are suffering in Canada. The companies will make out because they will go south and find better places in which to invest their money. We are talking about the people in Canada who will suffer because they will pay higher prices down the road than they would have had to pay if the government had got its act straight.
The minister has received letters from various companies which I am sure he has read. I have copies of the ones from Oleum Exploration, Goodlands Drilling, Orbit Oil & Gas, Ocelot Industries, Hudson's Bay Oil & Gas and Gulf. Companies both large and small have announced specific reductions in their exploration spendings for next year and the years ahead. Some have indicated reductions of 25 per cent to 30 per cent, some as high as 50 per cent. The Gulf Oil Corporation announced a reduction in its spending program in the north, offshore and frontier areas from $400 million next year to $270 million. That is a one-third reduction or $130 million. 1 see the minister nodding; he knows this.


Marc Lalonde: Wait a little while, they will be back.


Michael Holcombe Wilson: The minister indicates that they will be back. Under the Canada oil and gas act, they will not be back, they cannot afford to come back.


Marc Lalonde: I have news for you.


Michael Holcombe Wilson: Has the minister listened to the companies? Has he paid any attention to them? There are two reasons why they are terrified by Bill C-48. First is the ministerial discretion in the hands of the minister which allows him to tell them when to drill, when not to drill; when to commence production, when not to produce oil. He can tell Petro-Canada when to take over the whole operation when it is only a minority shareholder in the operation. These are matters of concern to the companies. Another concern is that people will not have jobs in the north.
What happens if the $130 million which Gulf Oil talked about is not spent? It means that things will not be done, and this will cause people to lose jobs that are dearly needed in the north. The hon. member for Nunatsiaq (Mr. Ittinuar) and the
hon. member for Western Arctic (Mr. Nickerson) are very concerned about this particular impact.
We are not looking for bailouts for the industry. The industry does not need bailouts. People know that the profit position of the industry is good. We are looking at a much more profound problem which arises if those companies leave. It is a very fluid industry; dollars, people and equipment can be moved. We are seeing this happen with the oil rigs, but other things can move as well. When they move, it means that things are just not being done in the country to help us reach self-sufficiency. I have asked the minister on many occasions whether self-sufficiency is the paramount objective of his energy policy. He claims that it is, but his actions betray that claim. His actions belie that claim because the tax policies, the pricing policies and the entire attitude of the government undermine the ability of the country to achieve self-sufficiency by 1990. Unless changes are made in the energy policy, we will not reach self-sufficiency by 1990.
I do not feel sorry for the oil companies when I stand here tonight, but I do feel sorry for the people in Canada who are looking for jobs and the people who are living with that misery index at 36 points and rising. I feel sorry for those people, and that is what we are talking about this evening.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: I should like to refer to some figures which will help put this into proper perspective. In a single drilling town with one rig working for a full year, $1.4 million of economic activity is produced. For food, it is $120,000; for diesel fuel, $300,000; propane, $30,000; parts and supplies, $150,000; water, $75,000; hotels, $20,000; entertainment, $70,000; communications, $30,000. These all affect the local communities, not the Gulf Oils, the Imperials Oils, the Shell Oils. Those companies are not affected. It is the people in those towns who are affected. They are mad at what is happening here because they see that it is being caused by people in Ottawa who are far, far away from where they are today.
Today we are in a recession. An article appeared in The Globe and Mail headlined: "The Longest Recession Since 1954 is Predicted". One of the key reasons for the recession is the intergovernmental squabble, the complete deadlock. The constitutional deadlock and the energy deadlock have resulted in slowdowns and, in some cases, in a cessation of economic activity in the oil industry which, as I have said many times in the past, affects all of Canada, not just the province of Alberta.
It is for these reasons that I appeal to the government to get on with the job of breaking the deadlock, to get the country going, and to get on with getting us out of the crisis in which we are today.
December 18, 1980


Some hon. Members:: Hear, hear!
[ Translation]


Pierre Bussières: Mr. Speaker, first of all I would like to say how surprised I was at the petty comments made by the Leader of the Opposition (Mr. Clark). Perhaps I should not have been surprised because these comments, even though they were petty, were worthy of the one who is now Leader of the Official Opposition. I am also surprised, Mr. Speaker, to see how certain elements of the economic situation can lead some people, for purely political reasons, to try to create a climate of panic and to suggest that we could pull on strings to bring immediate and magical solutions to the problems of inflation, unemployment and interest rates now facing our society. The hon. member for Broadview-Greenwood (Mr. Rae) will immediately point out that, as he stated himself, he does not believe in magical or immediate solutions, but rather in medium and long-term answers.
1 believe that, in the situation now confronting the government, we ought to exclude purely circumstancial elements which are only in the short term or temporary, which are mostly related to events or economic phenomena to the south of us, and which affect us because our economy is interrelated or integrated with the larger North American economy. If we do exclude these purely circumstancial elements, we have to think in terms of answers to our problems and a reasonable policy. To my mind, that is the policy outlined this evening by the Minister of Finance (Mr. MacEachen) when he reasserted the major points of his budget speech.
It is essential to avoid falling into the trap of trying to solve the immediate problems by implementing extremist solutions, either to the right or to the left. We would be doing this if we believed that our interest rate problems could be solved, as suggested by the Leader of the New Democratic Party (Mr. Broadbent), by setting a "reasonable" rate, which remains to be defined, without thinking about the consequences that such a rate set artificially could have on our dollar and with the full knowledge that the possible effects on the Canadian dollar could bring about as unfavourable consequences for small businesses, for farmers, for the man who wants to build a house, which effects would be as bad as those of the interest rates that we now have and which correspond to the pressures put on the Canadian economy since they are set every Thursday at the auction of treasury bonds by the Bank of Canada. Other extremist solutions would be, for instance, to say: why not implement a cold shower policy? Putting aside the economic progressiveness practised by the Bank of Canada and restricting drastically the M-l range, supporting this money supply restriction policy by a major tax increase to reduce significantly pressures on demand, whether for goods or for money, and creating a vacuum, which would quite probably
Economic Conditions
bring about counterpressures or a depression and lower inflation rates, would not be a solution.
The former speaker mentioned a deep recession. I suppose that in speaking of a deep recession he rejects the cold shower polycy that would entail taking Draconian steps with regard to the M-I range, by limiting the monetary mass, or by increasing taxes significantly. That solution must then be set aside. Going to the other extreme, someone spoke a while ago of the possibility of fixing the rate of interest. We saw what consequences that would have on the dollar, consequences that would also be as disastrous for the small businessman and the farmer, as for the person who wants to build a house at the interest rates we now have.
One could say that the government should implement a program to assist certain groups of society who face the problems resulting from high rates of interest, high rates of unemployment, the lack of income or available money. That would probably imply interest rate subsidies for those who have to carry an inventory, as well as major community employment programs or special projects to absorb the shameful unemployment in certain regions. They would however add to a deficit we already find extremely burdensome.
There is another extremist solution, and that is to bring in a package of strictly temporary measures that would increase the deficit and solve absolutely nothing over the medium or short term, since they would only create additional pressures on inflation and would not solve the problem of structural unemployment. A number of persons would be hired temporarily, from time to time, regionally, locally, but the day the program ended nothing would have changed in the structural weaknesses of our industry, nor in the need to increase the rate of productivity in our industries throughout Canada. We would be back to square one.
What we need is common sense policies with lasting power, that is for the medium or long term. The enemy we are up against at this point is increasing interest rates; the enemy we face is persistent inflation that goes with the over-all health of the Canadian economy. In his budget speech, the Minister of Finance indicated clearly that the policy expressed by the Bank of Canada on economic gradualism is a policy of good common sense, one that is contrary to the cold shower policy, of which 1 spoke a moment ago, and one that the government supports energetically.
The Minister of Finance has avoided the trap which consists in drastically increasing taxes to reduce inflationary pressures while inducing more complicated and vicious recession patterns to which the member referred a while ago. He has avoided that problem. Quite obviously he could have increased the deficit, as requested by members opposite, in spite of their hypocritical argument which led them to suggest that the present deficit is unbearable. The government has chosen instead to show common sense and accept a difficult deficit level while setting up a program to keep government expendi-

December 18, 1980
Economic Conditions
tures lower than the projected rate of the gross national product. We have also avoided extremist solutions by keeping in effect the indexation of income tax tables. Of course the government could have abolished that indexation and thus contribute to restrict liquid funds. However, one of the important elements contributing to inflation is the tendency of groups and individuals to try to make up for their loss of purchasing power as a result of the higher cost of living. Canadians generally have understood that the indexation of income tax tables and other indexations such as apply to family allowances, old age security and guaranteed income supplement are sufficient to cushion the rising cost of living.
Canadians who acknowledge that the government is endeavouring to maintain its purchasing power in spite of substantial inflationary rates are encouraged to be more reasonable in their wage demands. While reducing or contributing to reducing inflationary expectations, the government also contributes to reduce inflationary pressures. But all these government measures, whether through the Bank of Canada's gradual reduction of the money supply, a sensible medium or long-term fiscal policy, or the extended indexations which compensate citizens for the increases in inflation, require that the various agents of the economy do their part in their respective areas to fight against inflation. And the atmosphere of panic which some people seem eager to create from shortterm isolated events-


Bob Rae: For the third time-


Pierre Bussières: -will not help convince the various agents of the economy to get together and fight against the common enemy, that is, inflation which causes the cost of living to rise.
Mr. Speaker, to the extreme solutions which 1 have indicated, we, as members of the government, prefer sensible solutions. 1 am sure that Canadians will not fall for the argument of opposition members who are eager to push the panic button, but that they will follow the Minister of Finance in the right direction with medium and long-term solutions, and also support the Minister of Energy, Mines and Resources (Mr. Lalonde) who, through his national energy program, will facilitate the implementation of the budget measures and accelerate the recovery of the Canadian economy, which in turn, sooner or later, should improve the lot of each and every Canadian.


Walter David Baker: Mr. Speaker, just a few minutes ago I listened to the Minister of State for Finance (Mr. Bussieres) repeat a litany in which he accuses members of this House who do not happen to agree with him, from the point of view of where we are seated in the House, of creating a mood of panic. We have not had to create that mood in the country. The government has succeeded in creating that mood all by itself.
That is the whole point in this debate. The minister has forgotten why this extraordinary debate has been allowed. Both opposition parties of the country have concluded, along with the people of Canada, that there is an economic crisis. The motion itself talks about an economic crisis in Canada. That economic crisis was not created by the official opposition or by the New Democratic Party. The economic crisis in Canada has been the creation of unfortunate, wrong-headed policies and by fiscal and financial irresponsibility over the long years of the Liberal reign.
My party was in power for a short period of time. Some people, including a number on the government side, have said that the period was so short it could hardly be noticed. They cannot then accuse us of creating the chaos underlying the situation which is worrying Canadians so much today that representatives of Canadians have been able to prevail upon the Chair in an extraordinary way to allow us to debate this subject. We are not here by accident. We are here because this government has so neglected what it said it would do, so renounced the promises it made during the course of the election campaign, so given up on the principles of liberalism that the country now faces a number of serious issues-indeed, then more than serious-which will perhaps jeopardize its future.
We cannot claim responsibility for that. We tried one year ago with a budget which would have begun to lower the deficit and which would have recognized that energy prices would go up-something which even certain Liberals, such as John Turner and Donald Macdonald, are admitting. It would have cushioned against these things. We tried to give Canadians a housing tax credit to help them with mortgages and rising municipal taxes. It was the will of Parliament that it was turned down, and our government was not returned.
But this government was returned, and I do not begrudge them that, although I wish it were otherwise. It was returned on the promise that it could rectify this situation, that it could take action, introduce the policies, and, with its men and its leadership, could do something to bring this country up by its bootstraps and answer the aspirations of a great number of Canadians. That is the mood which is gripping Canada tonight. The government has failed miserably.
The Minister of Finance said earlier that he is trying to deepen the understanding of Canadians. He is deepening its understanding in only one way, and that is as to the depth of the government's failure and the triviality of its promises, and he is probably telling Canadians tonight as they contemplate renewing mortgages at higher rates, higher fuel bills, car dealers with lots full of automobiles stores with huge inventories of consumer goods which will not move, in an irrefutable way, that they were wrong on February 18, 1980, when they trusted this government. That is what is happening. In the face of that, what do we hear? What is the excuse? The excuse given by the Minister of Finance is that we are hopelessly and inextricably linked with the United States and, therefore, there is nothing we can do. The Minister of Finance is like a
December 18, 1980

beached whale. He flops helplessly, and there is nothing he can do.


An hon. Member:: Don't insult the whales.


Walter David Baker: I am sorry. I do not think that is deepening the understanding of Canadians. This government is here to do a few things. What is the role of government? What has the Liberal party said about the role of government?


An hon. Member:: Stay in office!


Walter David Baker: Aside from that, the role of government has always been in the Liberal party's philosophy to create an atmosphere where Canadians could realize their aspirations. If they wanted to venture, they could, with some hope of success. The Liberal party was never passive, it was an activist party. It could do something. That was the rhetoric. But those days are gone. The Prime Minister (Mr. Trudeau), when he was leader of the opposition and resigned, said it would be good for the Liberal party if it had a period out of office. I think it would have been good for Canada if the Liberals had had a period out of office; it would have had a chance to regenerate itself and go back to its roots. Because the party of St. Laurent, of Pearson and of Laurier was a caring party. It really cared about people. It cared about people more than it cared about power. This party today only cares about power. If we are talking about the concern of Canadians, you bet they are concerned tonight. They are asking themselves where did my government let me down? Why didn't the government respond? When will the government respond and what will its response be? The Minister of Finance earlier tonight said he was going to stand pat and not move. He was going to stay beached and flop there helplessly and use the lame excuse that it is the fault of the Americans, or the Martians, or the weather but it is not the government. If the government is going to claim credit for its programs, it must share the blame when this country is in economic chaos, as it is now. We must not let the minister of state just gloss over this problem and say there is nothing wrong, or say that we will get out of it. There are some things the government could do if it really cared.
The Leader of the Opposition (Mr. Clark) said that in reference to the members opposite, who asked us to consider the shelter grants-and we were doing it-ought now to consider such a policy themselves. This is especially so at a time when not just the drivers of automobiles but senior citizens and everyone else who consume oil are 'laced' by higher energy prices. Surely the government can think of some kind of energy tax credit-call it what you will-for those who cannot bear that burden much longer. The Minister of Finance told me, as he told the House earlier, that the government has programs designed to help lower-income Canadians and that these programs are indexed. Of course, that is so. But even with full indexation, our senior citizens are falling further and
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further behind as a result of inflation. Indexation is not working to keep them up to date.


Mr. Evans:: That is nonsense.


Walter David Baker: My friend from Ottawa Centre who was so vociferous in opposition is now silent because he sits in government. He is taking the Queen's shilling as a parliamentary secretary. I commend to him a speech made by the Minister of National Health and Welfare (Miss Begin) in Vancouver. This is what she said about senior citizens in Canada:
-1.2 million of our 2.3 million Old Age Security pensioners received the Guaranteed Income Supplement.
That is the item to which they added the $35. The minister went on to say:
This means that 53 per cent of Canada's pensioners have incomes low enough to qualify for this extra assistance. Can you imagine if 53 per cent of the total population of Canada under age 65 had to rely on government welfare payments to survive?
So despite indexing, that is the situation. I hear my friend saying something. He will have a chance to make his speech. It will be a rare occasion and I look forward to hearing him. I hope he will let me finish mine.


Allan Joseph MacEachen: You would not do that for me earlier. I noticed your leader left an hour and a half ago.


Walter David Baker: The Minister of Finance talks about my leader, I wonder where his is.


An hon. Member:: Probably in his swimming pool.


Walter David Baker: The Minister of National Health and Welfare continued:
What is even more disturbing is the fact that a full 16 per cent of pensioners receive the maximum supplement.
That is with the $35. She went on to say:
This means that, for the most part, these 360,000 senior citizens do not have one red cent to their names besides the Old Age Security pension and Supplement.


John Leslie Evans: Who put it in?


Walter David Baker: I am not arguing about who put it in. The government proposed it. Parliament disposed of it and passed it. That is a fact. But that is not an answer, my friend, to the argument put forward by the Minister of Finance in the face of the kind of inflation we have that few people who benefit from all of the allowances, veterans and otherwise, provided by the people of Canada can look to those allowances, even fully indexed, as appropriate. That is why I wonder and ask where is the Liberal party, this party of concern and sharing? Where is the Minister of Finance who has been asked direct questions and has now gained the reputation of the fluffy answer, that is no answer to direct questions being put to him as to what the government intends to do? A government cannot lie down helplessly on the beach. A government cannot hide behind the skirts of another country. A government has a responsibility to create an atmosphere or to recreate one. That is what this government said it was

December 18, 1980
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going to do. That is why the Canadian people tonight look at this government and wonder about it. Canadians must wonder about what they did.
Someone asked what significance the energy debate had. I am speaking of the energy issue which arose in the government's budget. What was the significance of it? The significance is that the energy package contained in that budget is a massive blunder. The Minister of Energy, Mine and Resources (Mr. Lalonde) can yell and shout all he wants. In the energy sector in Canada, investment has been frightened and some of it frightened away. In other sectors of the economy there is the same concern as a result of the policies of this government.
I ask my friends what that means in terms of jobs for Canadians in Quebec or Ontario, aside from western Canada. There is an excuse made by the Minister of Energy, Mines and Resources that perhaps rigs are not leaving at quite the high rate some would allege. We only got the budget in October; give it a chance. Those rigs will go. Why shouldn't they go? Would the Parliamentary Secretary to the Minister of Finance (Mr. Evans) stay or would he go elsewhere if he were faced with a government policy which was anathema to his business and did not take into account certain important aspects of his commercial affairs? He would be the first back across the border if that were the case.
The dollar is down. As a result of the policies of this government, which have not been improved by the budget, according to every economic indicator, we are at the brink of economic disaster in Canada.
I am not suggesting that the situation is irretrievable, because it is not. Despite the government, this country is reasonably wealthy, strong and healthy. However, we cannot blunder on in the same direction and improve its health or maintain it. That is why the misguided energy policy of the government must be changed. The budgetary policy is wrong and it, too, will have to be changed.
The government will have to move to protect lower middle and lower-income Canadians with respect to these policies. They will have to be changed and new ones brought in. I can honestly say I do not think the Minister of Finance is doing his job. I say this with some regret. The minister is not doing his job if he blames our problems on the Americans or someone else. Some may ask what this government is supposed to do. That is the dilemma we face. The words of the motion we are debating tonight talk about an economic crisis. The Chair has recognized there is an economic crisis. It is an unusual debate. No amount of glossing over it will change it. I am glad the hon. member for Ottawa Centre is here. I say to him that in his own city, the so-called rich city on the banks of the Ottawa and Rideau Rivers, unemployment in the construction industry today in his constituency is 35 per cent.


Mr. Lang:: Mr. Speaker, I rise on a point of order. The hon. member for Nepean-Carleton indicated that the Chair recognized that Canada is in a state of economic crisis. I do not
believe that is the case. The Chair does not pass judgment on that issue. This debate came about as a result of a Standing Order 26 motion put forward by the Leader of the New Democratic Party.


Walter David Baker: That is a helpful observation. I now want to get back to the real world of the hon. member for Ottawa Centre. If he talks to the construction people in the national capital area, they will tell him the unemployment rate in that industry is now 35 per cent in this city which across the country is reputed to be well off and is, compared to Windsor and other places. Ask the construction worker, bricklayer, tradesman, artisan and those who supply building materials whether they are happy with the policy of this government. They will tell him. 1 suggest the hon. member ask them over the telephone rather than get too close to them. It might be better for his health. That is the difficulty in a basic industry.
I invite the hon. member to come to the rural parts of my constituency and talk to the dairy farmers and feed grain producers who look forward to a winter of higher and higher energy costs. Ask those people, not the economists at the Economic Council of Canada, for whom I have great respect, or the public servants in the Department of Finance. Ask the real people who have to go to the banks and borrow the money.
Members opposite will have great opportunities when they go into their constituencies over the Christmas break to ask the people there whether they are happy with the policies of the government. If they do that, their first caucus on their return will be very interesting. Maybe by that time the Minister of Finance will be chastened and ready to change his tune.
I ask the hon. member to visit some of the real estate offices here in Ottawa and to talk to people who will have to refinance their homes. 1 have talked with employees in this building, let alone those in my constituency, who look forward in March and April to refinancing their mortgages. What is the government offering those people in terms of relief? Nothing.
Why did members opposite talk out our bill? Why are they not suggesting some other form of mortgage relief? They will have to answer these questions. We know why they talked out our bill. They did not like it. What do they substitute for it? What are they going to say to their constituents?
Go to any car dealer. He is as good a businessman as anyone else. Look at the inventory on his lot and ask him how he is going to move it. He will tell you. Go to any purveyor of major goods in the country and he will tell you that the economic picture is sour, bad and must be changed. It is inadequate, unresponsive and irresponsible for a Minister of Finance to stand pat on a budget which is a massive blunder.
I urge my friends opposite to answer us. Do not criticize us. Tell us the policies of the government. What are you going to do? Show me something in the budget that will help the home owner, the Canadian investor in western Canada who wants to invest in the oil industry, the farmer and the small businessman. Show me something in the budget which will allow people who want to buy a home to buy one. 1 looked for that and 1 did not find it. Canadians have not found it.
December 18, 1980

This is why members of Parliament receive calls from young people who want work but cannot find it, the young people we sent to university to be trained. That is why we receive calls from senior citizens who are very much concerned about what is going to happen to them. Let us not juggle the statistics. We can make statistics do anything.
1 want answers to these questions. These questions will be put to my friends across the way when they go home. They will be reminded that they defeated the government and asked, now that they are in power, what they are going to do about this problem. They will ask what is going to be done for them. They will tell their members they supported them because they wanted something done, but so far the government has not produced. Someone across the way must answer these questions. They are not statistical questions, but human questions that demand answers.


The Acting Speaker (Mr. Blaker):: I am sorry to interrupt the hon. member. Perhaps with unanimous consent of the House he might be given half a minute to complete his remarks.


Walter David Baker: No, Mr. Speaker, I do not want to infringe on the time of the House. Thank you very much.


John Leslie Evans: Mr. Speaker, I appreciate my hon. friend from Nepean-Carleton (Mr. Baker) posing a great many questions for me. 1 will try to respond to one or two in the first few minutes.
With regard to his rather sly implication that 1 do not talk to my constituents and do not know what is going on in Ottawa Centre, I tell him that he is not only wrong, but dead wrong. I know what is going on. I know the problems in my constituency. That is one of the reasons the federal government has come through with the Rideau Centre and why we are going to create a large number of construction jobs in Ottawa. That will help to alleviate the unemployment situation. That is a piece of the action. That is doing something, something the hon. member was unable to do when he was in office.
I wish to deal with the basic subject of the debate and in a reasoned way. I will attempt to analyse the situation we now face and try to impart some understanding to members opposite with regard to the situation that we, they and the country face and the options available to us. I will attempt to give them some understanding as to the difficulty of the options available, the costs of the different options and the fact that when all is said and done, the economic policy being followed by the government is the best policy, given the situation we now face.
Members opposite have said that the Minister of Finance (Mr. MacEachen) places all the blame on the United States for our economic situation. That is nonsense. He did no such thing. He was talking about the current, excessively high interest rates facing us in this country. That situation we certainly do lay at the doorstep of monetary policies being
Economic Conditions
followed in the United States. That does not say that Canada's inflation problem, the fundamental problem of inflation in Canada, can be laid at the doorsteps, or is trying to be laid at the doorstep of the United States by the minister; that the fact that interest rates which are influenced by that inflation rate are higher than we would like them, than you would like them, than all of us would like them, than Canadians would like them, is to be laid at the doorstep of the United States. Certainly the volatile monetary policy that is being followed right now by the United States and has caused the excessively high interest rates, the 20 per cent range in the United States, and the near 20 per cent range in Canada. That is what the minister was talking about, not that all of our problems are to be laid at the doorsteps of other countries or of the United States. He did not say that. He did not mean that. He does not believe that, and you know that.
I think one of the things we have to come to grips with in this House is a fundamental understanding that the most critical, the most serious problem facing us today, considering the long-term good of the country and the potential growth of the country, is the problem of inflation. That is the root problem and that is the source of high interest rates rather than what is suggested by members of the NDP who always get things backwards and who say that high interest rates cause inflation. Inflation causes high interest rates. 1 agree with hon. members opposite that inflation is a problem that has been created over time in Canada, that has been created over time in the United States, that has been created over time in Britain, France, Germany, Norway, Sweden, and The Netherlands. Every country in the world is facing inflationary problems.
The things that are causing problems, the things that cause inflation in this country include excessive purchasing power in the system relative to our productivity, and we understand that productivity is a problem. We have brought down a budget that is going to increase, to double in the next three years, the money going to energy and economic development, to the extent of $13 billion. In 1983-84 this will double what it is right now. This is to try to get productivity back on line, to get more people at work, to put the economy on the rails and to get the inflationary problem under control by increasing the supply side.
But, in addition to supply side economics, the development of greater productivity, greater output and new investment for the country, in addition to that we have to control the growth rate in purchasing power, the growth rate in money supply. That is what the Bank of Canada has been doing by gradually reducing the growth rate in the money supply over time. That is what the Bank of Canada will continue to do. That is the area of monetary policy this government will support fully as followed by the Governor of the Bank of Canada.


An hon. Member:: Would the hon. member tell us what the increase-

December 19, 1980
Economic Conditions


The Acting Speaker (Mr. Blaker):: Order, please. I tried to signal the hon. parliamentary secretary to continue with his remarks. 1 cannot recognize the hon. member as he is not sitting in his right place.


John Leslie Evans: The wrong place is where that hon. member usually is, Mr. Speaker. Excessive consumption expenditures in this country and in other countries over time, and insufficient investment expenditures, will not help. The hon. member for Capilano (Mr. Huntington) talked tonight about the need for massive infusions of new investment funds in this country to increase productivity. I agree fully with him, and the minister agrees fully with him. But you do not get massive infusions of new capital, new investment, by calling for the introduction, as the Hon. Leader of the Opposition (Mr. Clark) did tonight, of new shelter allowances, energy tax credits, mortgage subsidies, and heating cost subsidies, which will cost billions that should be going into increasing the productive capacity of the economy and not into greater and greater permanent consumption programs in the system.
We have a problem with growth in money supply. The Bank of Canada has committed itself to deal with that problem. We also have a problem that is not any of our making, and that is the commodity price shock problem, with food prices going up due to droughts. The droughts were not caused by the Liberal government. Hon. members opposite might think so, but droughts are not caused by hon. members on this side of the House or by hon. members on the other side. However, drought has caused a food price shock. That is not something caused by Liberal policy. There have been oil price shocks facing the world, and those get translated through the system. They have inflationary implications, and those inflationary implications either have to be absorbed or are translated into higher and higher prices for all commodities. That is what we and every other nation are facing today.
The hon. member for Broadview-Greenwood (Mr. Rae) talks about a price monitoring function. He suggests we should have price monitoring, that we should have price rollbacks, and that we should ensure that the corporations and the business firms in our society are not ripping off the public. I would suggest to you that all of the evidence I have seen, that I have looked at, indicates to me that in no sector of the economy is the business community reaping persistently excessive profits. There is no study which has been done that shows that the business community persistently rips off the public by excessive profits. Certainly higher profits are necessary to induce investment into the area.


An hon. Member:: A 56 per cent increase in oil profits?


John Leslie Evans: That is right, and that will lead to greater exploration and greater development. That is precisely what the hon. member would want.
We hear a call for wage and price controls from some circles. All of the evidence we have seen in the past indicates that wage and price controls do not have permanent, long-lasting effects in solving inflationary pressures. If the fundamental
cause of inflation persists, wage and price controls do not work. Wage and price controls act like the lid on a tea kettle.
If you do not turn down the heat you get an explosion, yet we hear that from those hon. members from that corner who indicate that we should be looking at some kind of incomes policy and so on.
The hon. member for Broadview-Greenwood earlier tonight indicated that all the countries he had been looking at, including Germany, France, Britain and the United States, as well as Canada, were following policies which had a similar thread running through them. I would simply ask the hon. member, has he ever thought that perhaps the reason all these countries are following the same kinds of policies in response to the world problems we are facing is that the policies are right? Why is it that because they do not happen to coincide with the policies that perhaps the NDP believe are correct, the rest of the world must be wrong? 1 suggest the rest of the world is not wrong, Canada is not wrong, and this government is not wrong.
The opposition has been consistently, and shown to be consistently, blind to economic realities. We have seen this time and time again tonight and in the past. Members opposite are totally inconsistent. First of all we hear a great hue and cry, bring down inflation, bring down interest rates, and do this by some magic formula. Apparently they are going to say, "Interest rates shall be such and such, and that is what they will be," but it just does not work that way.
On the other hand, we hear the great cry that we should increase spending and cut taxes, which leads to growing deficits. Hon. members opposite want us to reduce deficits, and the Minister of Finance is reducing them with his budget. We have a total inconsistency. We are supposed to increase expenditures and cut taxes, which reduces government revenues, and at the same time reduce inflation and interest rates. We cannot do both.


Bob Rae: Yes, you can.


John Leslie Evans: The sooner hon. members opposite learn that, the sooner we will have some rational and reasoned debate in this House of Commons.
Earlier tonight we heard the accusation which has been coming from the official opposition and members of the New Democratic Party that the policies of the government are hurting low and middle-income Canadians, and that we are squeezing the life out of low and middle-income Canadians. This was carried further by the hon. member for Nepean-Carleton, who said that senior citizens have to rely on OAS and GIS. My God, those policies were brought in to help the very people who need help most. What is the complaint? Those policies were brought in for all but a small number whom we hope to bring above the poverty level as soon as possible. The other groups are above the poverty level, and their benefits are indexed so that they will stay above the poverty level.
December 19, 1980

Hon. members opposite talk about inflation and the fact that inflation makes life extremely difficult for low and middle-income Canadians. I offer hon. members a chance to look at the Economic Council document entitled "The Inflation Dilemma", and find out precisely who is hardest hit by inflation. The Economic Council of Canada suggests that low-income earners coped best with the inflationary problems from 1969 to 1975. This is the last comprehensive study on the impact of inflation. Do hon. members opposite know why low-income Canadians coped best? It was because of government transfer programs which were brought in by the Liberal government to protect the very people hon. members opposite say we are squeezing.


Arthur Ronald Huntington: What about energy prices?


John Leslie Evans: The hon. member talks about energy prices. How do energy prices affect Canadians? They affect Canadians through the effect they have on other prices. Of course, energy has a price of its own. All these prices are included in the consumer price index which is the base for the indexation of all the transfer programs about which we are talking.
The Economic Council has said that of all the groups the low income earners coped best with inflation. The next to the lowest income category coped second best with inflation. That was because of transfer programs. I will quote directly from this Economic Council document as follows:
Hence, changes in the benefit levels and availability of retirement pensions, social assistance, family allowance, unemployment insurance and farm income support programs were particularly important to these groups.
We can add to the list old age security and the guaranteed income supplement, which are indexed to take into account the fact that prices are rising. We can go further and ask about the Canada Assistance Plan. That plan is indirectly indexed as well because the level of federal contribution is tied to provincial contributions, which are indexed. As a result indexation covers the vast majority of low to middle-income Canadians.


Mr. Kilgour:: They are doing wonderfully well.


John Leslie Evans: The hon. member says they are doing wonderfully well. No, they are not doing wonderfully well. No one has said they are. We would love to see everyone doing much better, but the advice we are getting from the opposition is to bring down interest rates, to bring down inflation, to increase spending and to increase deficits all at the same time. That kind of advice will get no one anywhere.


Michael Holcombe Wilson: Is that the Evans curve?


John Leslie Evans: It is called the Tory curve, and it is laughable.


Mr. Kempling:: It is called b.s. too.


John Leslie Evans: I personally feel-and 1 think this is shared by some of my colleagues opposite who keep civil tongues in their heads-that we must shift our priorities from greater and greater current consumption expenditures to greater and greater economic development and investment expenditures. I think the hon. member for Capilano would agree with me on
Economic Conditions
at least that latter point. I think it is important that we realize that we cannot continue into the future to fight over what is bound to be the shrinking wealth base of this nation. We have to make sure that policies are in place so that that wealth base increases for all Canadians and so that all Canadians are able to become better off in the future.
I pointed out earlier that the budget was committed to just that kind of economic development. When we increase the economic development budget this year alone by 21 per cent and when we double energy and economic development expenditures, excluding out of that oil import compensation payments, to $13 billion by 1983-84, we can see that there is a commitment there. It is a commitment to growth.


David Kilgour: What about the deficit increase for next year, John, of $3.5 billion?


John Leslie Evans: The hon. member wants to talk about the deficit. If he wants to give me more time, I will tell him about the deficit. The hon. member for St. John's West (Mr. Cros-bie) projected a budget deficit. Subsequent to that projection oil prices increased dramatically, which increased oil import compensation payments. Interest rates went up. That would have happened under his regime just as it is happening under this regime. Oil prices would have gone up under his regime the same as they have gone up under our regime.


Some hon. Members:: Oh, oh!


John Leslie Evans: Mr. Speaker, I refer to world oil prices. I refer to the oil which comes from offshore. There are these factors, plus the recession which is worse than what anticipated. Again, the recession would have been the same, and the hon. member has admitted that in the House several times. Those factors would have increased his deficit by a good $2.5 billion to $3 billion. Hon. members opposite talk about how they would have had a budget deficit of $11.6 billion, but that is nonsense, and when the hon. member for St. John's West is pushed on it, he will admit it.
Yes, there is a serious situation, and we must come to grips with it. I believe the budget begins to do this, and I think this government, as we move further into the future, will take the actions necessary to achieve the things all of us want, namely, more growth, a higher standard of living and a better situation for all Canadians.


Some hon. Members:: Hear, hear!


Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, the magic of modern economics has now been explained. The experts in Canada and those people who want to buy homes have been confounded.
When I was home last weekend I spoke with a young man who bought a home three years ago. He had to sell it because he moved from his prosperous community. He put money into a housing situation which the hon. member for Ottawa Centre (Mr. Evans) says is good. That young man, his wife and his child are out $5,000 to $10,000 which they worked hard to get. Does the hon. member stand behind that kind of interest
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December 19, 1980
Economic Conditions
policy? The young man to whom I refer left a home he could afford with the income he had, to move to very small quarters which he has to put up with until sanity returns to government and the economists on the Liberal side of this House begin to return to reason. May God be merciful to those who took economic lessons from the hon. member for Ottawa Centre, because they have been misled.


An hon. Member:: They all failed; so did he.


Fred Alward McCain: He went on to speak about how good housing is. 1 submit to you that the hon. member for Nepean-Carleton (Mr. Baker) gave him the proper advice, that he had better talk to them over the telephone.
This evening I spoke to a young man who is building a second home because he had to move. He liked his first one so well that the one he is building today is identical in plan, design, and fixtures to the one he built 15 years ago. May I say to the hon. member for Ottawa Centre that the first two of eight progress payments made to his contractor for the second identical home after 15 years exceeded by $2,500 the total cost of the first home 15 years ago? Can we stand that kind of inflation? The hon. member for Ottawa Centre had better put his figures together and see how much this young man has to make to survive the change in the cost of his home. I repeat, two progress payments exceeded by $2,500 the cost of an identical home 15 years ago. Is that good government and good economics?


An hon. Member:: He is sick.


Fred Alward McCain: There is a thing called loyalty which a member of any party in our system should have, but blind and stupid loyalty is inexcusable.


Some hon. Members:: Hear, hear!


Fred Alward McCain: Mr. Speaker, we are in an inflationary structure and there is an element of doubt as to whether or not that is good for any society. But we are in a different kind of inflationary structure than the one to which history has been accustomed, because automobile lots are overloaded, in the housing market there is demand and no buyers because people cannot afford houses, there are plenty of clothes on the store racks and plenty of the things that ordinary individuals want. You can just go down and pick it up, the supply is there. That is not the cause of inflation. We are treating a new situation in inflation with the old methods. It is rather like giving a dose of castor oil to a cholera victim, and it is having the same effect. In the long run, the victim will subside and die. We cannot go on this way.
If we are to suggest to the people of Canada that this is an international situation, then will the Minister of Finance (Mr. MacEachen) explain to this House and to Canada why he has not tried to convene an international finance ministers' meeting, and why he has not tried to get the world to take a look at what is happening to see if an international agreement of some
sort cannot be worked out whereby the rising interest rates- the old castor oil treatment for the cholera patient-cannot be changed to some other policy because this one is not working and we are heading for a catastrophe? We are choking production by our tax policy, we are choking our purchasing power by our income tax policy, and the conflict of the two does not associate itself with progress.


Some hon. Members:: Oh, oh!


Fred Alward McCain: I hear a little chirping over there from the far left, and I suppose we could call it the extreme left. I was rather amazed tonight to find that they do not know which way they are going because one day they are clamouring in the House for socialization of everything but tonight they are speaking on behalf of private business. They have to make up their mind which way they want to go. They are confused, and they are confusing Canadians.
Mr. Speaker, I am concerned for my country. I was concerned when 1 listened tonight to the Minister of Finance in whose constituency-I am not quite sure of the geography-or perhaps in the constituency next to his, an oil refinery has closed and where employment has gone down because our relations with our trading partners are not such that the product could be exported at a profit, even if it were imported and exported. I am concerned that such a Minister of Finance should come from such a constituency in Atlantic Canada.
I was concerned also when I listened to the Minister of Energy, Mines and Resources (Mr. Lalonde) who supports measures which curtail development, because 1 live in that part of Canada which is near the Minister of Finance and near that part of Quebec from which the Minister of Energy, Mines and Resources comes which depends upon socially irresponsible government sources of oil from across the ocean, from a region which is in political chaos. Both those men, one living in a region desperate for energy, the other living nearby and related to people east of Montreal who are in the same crisis, stand here and put forward tax policies and energy policies which deter development, exploration and delivery, and which postpone self-sufficiency in Canada.
1 can understand why Ontarians do not worry and why Montrealers do not worry, but those who live east of Montreal have a double concern for the behaviour of both the Minister of Finance and the Minister of Energy, Mines and Resources. It is catastrophic that they should ignore the realities of Canada. We find ourselves in a situation in which personalities, petulance, prejudice and anger have clouded what should be rational, comprehensive, and conciliatory negotiation. It is not a case of confronting the west because they are not operating to suit these petulant people, these impatient people, the government. It is a matter of serving all of Canada, all people and all workers from coast to coast. Temper tantrums, petulance and prejudice dominate these negotiations. Reality has been lost from sight in their conduct.
Mr. Speaker, I should like to read a few comments which appeared in the press today, because I think they are rather
December 19, 1980

significant, since we had the favourable article quoted from Winnipeg. Here is one from The Toronto Sun which reads:
Assuming one is possible, how long would a post-Trudeau reconstruction period take?
That is just one question he raises.
It has already been pointed out in this and other spaces that changing our economic foundation (which is what Trudeau has done) cannot be accomplished overnight. There is also an argument (and a reasonable one) to be made for saying it will take longer to fix it than it did to harm it-
How did Trudeau change us? Simple:
1.	He made not working socially acceptable.
2.	Profit was shortened to a four-letter word.
3.	Non-productive elements in our society came to be seen as equal to (and
in some cases better than) productive elements.
4.	Initiative, society's grease, was discouraged.
That is a simple and simplistic summation of 12 years of power, I know, but it will have to do.
Let us take another newspaper. The headline reads "Ottawa may push deficit on provinces". It may do it in many ways. Ottawa is blaming the provinces for those items over which the federal government had control. During the last two campaigns we listened to the Minister of National Health and Welfare (Miss Begin) complain about health services, but it was the minister who could not extract consistent and sustained grants to the provinces as her share of the health program, and then she blamed the provinces which are strained in their expenditures by the welshing of the federal government on its responsibilities and commitments. That is what happened.
One could go on about the other ways in which the government is trying to push onto the provinces the responsibility for programs initiated and financed by the federal government. This will not work in this country. Again this is confrontation and avoidance of realities. 1 would submit to you, Mr. Speaker, that the speeches of the Minister of Energy, Mines and Resources and of the Minister of Finance can be considered repugnant and reprehensible delivered by men both lacking in conscience and concern and utterly refusing to face the realities of the economics of energy demand, finance, monetary and fiscal policies, men blind to the realities and not concerned about the consequences. They would give you Epsom salts for appendicitis.
I must say that I was seriously offended this morning to hear the Government of Canada complaining about the money it cannot spend. It is cutting community improvement policies, but is advertising that the Government of Canada will do great things for the ladies. The Liberal government will give them great opportunities. Ministers will advertise it and try to confuse the people of Canada, particularly the ladies, with the reality of the economic and energy policies of the country. It is deceptive in a fashion which should just not be tolerated or accepted by the people of Canada. Every red herring which could be drawn across the trail of division of the Canadian people has been put there by advertising, by policy, and by what can be pushed to deceive and conceal.
Economic Conditions
To deceive and conceal has been the policy of the government. It has deceived and concealed in the fact that it has kept the energy price down and subsidized imports, and the taxpayer pays. What is the difference between the taxpayer being punished in a tax fashion or going to the pump and paying the price of oil? The government has tried to let people think that this stuff is free, that it will always be cheap, but it does not mention to the same deceived people that they pay it in taxes, or that their grandchildren will pay for their deficit. They will either pay at the tank or by way of tax; they have a choice.


An hon. Member:: Pay now or pay later.


Fred Alward McCain: How long have we deferred Canadian self-sufficiency? Has it been one year, three years or five years? Have we put it out of reach? They have called every oil company in Canada, owned here or otherwise, culprits. They have used the four letter word for profit. They have completely and utterly discouraged initiative.
The attempt to deceive tonight has been extended one step further by saying that oil rigs have not yet left. I happen to know one person in the oil drilling business and that 60 per cent of his equipment went out of the country in the crisis which arose between 1973 and 1974 when the government went off in an equally half-cocked way. Not only did 60 per cent of that equipment leave the country over an 18-month period, I do not think all of it came back. They have started the same exodus. The trend is there, the future is spelled out. To try to tell Canadians that this is not happening is repugnant and reprehensible. It is just utterly deceiving the people of Canada.
We must recognize that this is a free society so far, but when the new constitution passes I doubt it will ever be again.


Some hon. Members:: Shame! Shame!


Fred Alward McCain: If hon. members opposite would read the comments submitted by some people who are very knowledgeable on the constitution, they would be ashamed, frightened, and move out. I sat here and I never opened my mouth when anyone spoke, but members opposite cannot give me the same courtesy.
That is the trend, and if it is not reversed within three months' time-and that might be too late-the country is out of luck, and we may have put self-sufficiency five, ten or 15 years down the line. As I said, how do we reverse it? It will take longer to correct it than it did to destroy it.
This is a competitive world. I have a great deal of respect for Mr. Speaker. If you had money in the oil business which could be invested abroad, and you could see a secure economic opportunity to profit, that is where you would put your money. The government is driving that money into the competitive economic world where the little guy or the big guy is of some consequence, but the driving of that capital is outward. It was brought on by the budget of the Deputy Prime Minister and Minister of Finance and the policies of the Minister of Energy, Mines and Resources.

December 19, 1980
Economic Conditions
Uncertainty, fear, and apprehension prevail, and we cannot achieve solid economic development under those circumstances. For the first time the minister of finance for the province of Ontario is deploring the impact of the budget and the energy policy. As reported in The Toronto Sun, Mr. Miller said:
"The reduction . . . from over a dollar to 85 cents very suddenly didn't have half as great an impact on the economy as we thought it would . . . Now we're talking from 83 cents to 80 cents perhaps. I would argue that that's not going to have as great an impact."
Miller also repeated Ontario's call in its November budget for federal participation in helping poor people pay their heating bills.
He went on to say that it would be roughly $400 million over a three-year period. This is the first time the finance minister of Ontario has registered an element of protest against federal policies which he said he will have to go back and discuss with his premier because he is concerned. That can be coupled with the province of Nova Scotia indicating that the debt will be piled on the provinces, so that the federal government can get rid of it. Also that can be coupled with the moving out of the oil industry; the trend is there.
We are not the only ones who are complaining. One would think, from listening to the hon. member for Ottawa Centre, that members on this side of the House are the only ones who are complaining. Has he not read the press reports? Has he not read the multitude of articles or the personal letters which are critical of the government's behaviour and explain the hurt? Has he not read the article which was entitled: "Policy of Drift Costly", which reads in part as follows:
MacEachen and Bouey are doing nothing more than looking for a scapegoat. Canada does not have to follow the U.S. policy. Those in the government or its employ who say we must track American interest rates would also then have to admit that Liberal economic, industrial, trade, ownership and energy policies of the last dozen years have allowed this predicament to develop.
I did not write that, so members opposite should not say that 1 am the only critic. The article continues:
By trying to support the dollar with high interest rates, the Bank of Canada and its silent mentor, the government, is supposed to be keeping imported foodstuffs within the buying power of average Canadians. Ironically, the high interest rate policy is simultaneously making it harder for Canadian farmers to produce domestic foodstuffs.
1 have just one last sentence. The hon. member for Ottawa Centre mentioned food and its cost. In 1970 it probably cost farmers between $10 and $16 in interest a year to grow an acre of potatoes. In 1980 the farmer who is now planning for next year's crop is looking at $200 per acre. Is that practical food policy to the hon. member for Ottawa Centre?


Some hon. Members:: Shame!


Fred Alward McCain: I think that speaks for itself.


Some hon. Members:: Hear, hear!


Mr. Bob Ogle (Saskatoon East):: Mr. Speaker, as the night wears on I am sure members are tired, and probably Canada is tired, but we are debating a very important matter. We are talking about something which is affecting us and will affect more profoundly the life of every person in the country.
I should like to bring to our discussion and debate tonight some ideas which I do not think have been expressed. Although we, as Canadians, are struggling with an inflation problem unlike the ones of the past, in relation to the world scene the problem faced by Canadians is a relatively easy one.
As members from both sides of the House are speaking tonight about the effects of inflation, the falling dollar and the effects of unemployment, I would like to put on record that even though our statistics are not good, and even though Canadians, young and old, are suffering from these effects, countries which have not been named are going through a much more critical problem. I would like to put the names of a few of those countries on the record. These are countries which have potential but, because of the international economic situation, are either on the brink of bankruptcy or are bankrupt. These countries are Argentina, Chile, Nicaragua, Zaire, Upper Volta, Thailand, and many other countries around the world. Most countries around the world have economies which make ours look like a blessing.
In the House yesterday there was tabled the report of the North-South Committee Task Force, on which I had the privilege to serve. It was the unanimous report brought in by the members of all three parties in this Hosue. If, out there in television land, there is anybody still awake, 1 would ask you to write your member of Parliament and obtain one of these reports. At the same time, ask if he or she has read it. If not, suggest he or she reads it.
1 believe some of the things contained in this report have a great deal to do with what is happening in our country today. If, in trying to face the problems of our country, we do not put into the equation a fact which has not really been mentioned here tonight, then we will not come to a solution of the problem. The United States has been blamed for our high inflation and high interest rates. I believe that the countries which make up the rich sector in the world, in the north, have arrived at a time in history at which they have been calling the signals of the economic world ballgame and they can no longer do that unless they seriously take into account what is happening in the rest of the world.
I would like to take a moment to read into the record a part of the introduction to this report of the North-South Task Force. I hope it will lay to rest many of the myths which I think have been associated with the rich countries, in the minds of many people in the north. In the report we have written:
A Decade of Change
The starting point is the altering of images. Change often occurs faster than our ability to recognize it; North-South relations are no exception. We start with an image of a world divided between a powerful North and a weak and dependent South. This image is badly out of date.
There have been great changes in the past ten years. The most dramatic example is the emergence of OPEC, the Organization of Petroleum Exporting Countries. Suddenly, without warning, the nations and the peoples of the North have been confronted with a fact of life long familiar to the South: dependency.
December 19, 1980

Simply put, dependency means that when you are rich you never think about the fact that you may have to depend on somebody else. The poor know what dependency is all about, since they have always had to depend on somebody else.
The report continues:
Suddenly, decisions and events in the South have an impact on the well-being of the North. Our response has been to launch ourselves toward an objective long sought by the South, that of self-sufficiency. We may have as little prospect of achieving it as they do.
That last sentence is a key one. We have become mutually dependent on each other in a way that has never been seen before in the history of our planet.
I continue:
These are not the only changes which have occurred. A number of developing countries have moved far along the path toward industrialization. The rates of economic growth in parts of the South have outstripped those in the North.
India, our image of a poor nation, is now the ninth largest industrial power in the world; Canada is seventh. Brazil, Venezuela, South Korea, Singapore . . . growing numbers of countries have entered world trade and are competing in the markets of the North. We can say with confidence that the economic shape and power of the world in the year 2000 will be as different again as this world is from 1960.
Sometimes people wonder why it is jobs are hard to come by in cities which a few years ago were very prosperous. Why is it that with respect to the automobile industry there is pressure from all sides? The answer is simple. A country which was considered a Third World country only ten or 12 years ago is Japan. Japan is a case which exemplifies these changes. It has become one of the great world powers. This was accomplished by taking a serious world view of things, and it is my view from the Japanese people I have known that they are people who, when they see an economic problem, do not go back to an old solution but immediately try to find another way, a better way.
The report continues:
Not many years ago, if we had drawn our map of the world with a line dividing North from South, Japan would have been south of the line. It has now crossed over dramatically. In the 1960s Canada's tariff regulations still classified Japan as a "developing country". Today, it is one of the major industrial powers in the world.
The thought which I would like to bring to this debate tonight is that if we try to find a solution by going back to old remedies, which worked when we were sure of the disease, then I feel we are bound to be a total failure. If we are to solve the disease of high interest rates, inflation, and unemployment, 1 believe it is necessary for us to identify all the causes correctly.
In our report on North-South relations we indicate one of the causes which is rarely mentioned in the House, that is, the world economy has changed. It is difficult to put this into simple images but one which I think is clear to many people is the image of a poker game. For a long time, in the international game of economic poker, a few people had all the money and they called the game. They were the industrially developed countries of the North. If anyone wished to join the game they had to play the game as laid out by the dealer, the one who had the wealth. So if it happened to be 21, they played 21, there was no other game. Then suddenly the game began to change.
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A few of the people who had only a very small amount of the chips ten years ago were not even players and were not even asked about the game. But suddenly they received a pile of chips. They are called the OPEC countries. When they received those chips the rules of the game began to change, and the flow of money which had been going around with the first set of dealers suddenly was not there. Somebody else began to draw that amount of money to another part of the table.
That other part of the table began to call the game. So, if they changed the game, for example, to seven card stud instead of 21, it does not help if you can only count to 21. It means that you have to learn a new game. I would like to think that we could call this new game the new international economic order of the world which has been advocated by the south. The seriousness of the situation is that the remedies which were previously able to bring down interest rates or whatever through adjustments, will not solve the problems confronting us and which are bringing disaster to most of the world today.
For example, take a person who has had a stomach ache. When he is asked by the doctor what he was taking to help the stomach ache, he may say Alka Seltzer, or whatever. But if the doctor says that the person now has a cancer, another disease, he must recognize that the former remedies will no longer work. This is the case with the up and down flow of interest rates, or with anything else. It will not work because there is a new disease. It is a disease which is not only part of the north but a disease which is a result of the intermingling of the north and south.
In the North-South task force report we have proposed resolutions which 1 hope the government will seriously look at and accept. Some of those resolutions have to do with aid, some with trade, some with food, and some with energy. One of the most important resolutions has to do with the way Canada must look at its economic future and prepare to adjust, which means that the answers which made good sense, or at least made some sense ten years ago, must now be reviewed from top to bottom. That adjustment may, as many adjustment do in life, cause difficulty and suffering, but unless the adjustment is made soon the problems which are becoming more and more involved will become bigger without solutions.
In this critically important time in the history of our planet, I believe that we must have a truly prudent approach to an international world situation. The Prime Minister (Mr. Trudeau) is preparing for a North-South conference to be held in Canada this summer which will at least affect the rich countries. The Prime Minister has visited several developing countries, particularly in Arabia, in the past month. To my knowledge he has not given a complete report to this House on the visit. I hope that he will, and that he will tell us whether or not while in Arabia he talked about the recycling process which would put Arab money back in circulation, whether it would work, whether it is necessary for anything to happen, or whether it was only, as we have read, a way to pick up more

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Economic Conditions
Arab oil at a high price in order to bargain to alleviate the Canadian energy problem of the moment. 1 hope the Prime Minister will tell us what happened.
I also hope that the Prime Minister will indicate how he intends to approach his next visit which, likewise, will take him to some developing countries, which include Nigeria, Senegal, Brazil and Mexico. These four countries have a very distinct economic personality. I hope he will tell us how he intends to approach these countries, the reason for the visit and what their response will be, or will it be just another instance in which the Prime Minister will dance sheik to sheik9 Such an approach is not very serious, and certainly not the solution which the country and the economies of the world need at this particular time. As this debate continues tonight, I trust that the Government of Canada and the Minister of Finance (Mr. MacEachen) will seriously take to heart the things which we have mentioned today and will seriously read the indications which have been given to us by people who have knowledge of and skills on this complicated world economy.
I trust that we will all thank God in this week prior to Christmas and enjoy on the whole a relative degree of comfort. But there are others who will not enjoy the season as much as they could. We must not forget the millions throughout the world who, caught up in this critical world economic situation, will know Christmas only as another day of despair.


The Acting Speaker (Mr. Blaker):: Before the hon. member for Trinity (Miss Nicholson) takes the floor, an hon. member advises me that in proceedings which have gone away into the night, as apparently they may this evening, it has been the custom to release the pages from duty. Would that be according to the wishes of the House?


Some hon. Members:: Agreed.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, this evening we are discussing a resolution which arises from the fact that there has been an increase in the cost of living, the highest since 1975, and also that we face a situation of unusually high interest rates. The central bank has made an effort to avoid slavishly tracking the U.S. interest rates, and the spread between the two is wider than has been the case. It is true that Canadian interest rates must remain reasonably competitive with the United States rates to attract needed foreign capita! and to retain capital investment. But a prime lending rate which has reached the present figure must, of course, raise concern that it may be depressing economic growth, both at the consumer level and the industrial level.
Some economists have expressed fears that the dampening economic effect of higher rates may retard Canada's recovery from the present slump.
What is needed, of course, is a very reasoned assessment of the situation in order to assure that action is intelligent and based on a full understanding of the options. The very wide divergence of opinion is indicated in the reports of the meeting of provincial ministers on December 17. We find in a news
conference after the meeting the Ontario treasurer, Mr. Miller, said that he would prefer the risk of higher inflation because of a declining dollar to the known costs to business and to consumers of soaring interest rates. However, his Quebec counterpart, Jacques Parizeau, took the opposite tack. Because inflationary pressures are already being increased by rising energy and food prices, it would be a mistake to add to them by letting the dollar fall even further than the five points it has come down in recent months, Mr. Parizeau said. These two directly opposed opinions indicate the difficulty and complexity of the subject when two intelligent and experienced observers have opposite solutions to the difficulty.


Mr. Deputy Speaker:: Order, please. Hon. members will please observe order.


Aideen Nicholson: Mr. Speaker, the problems arc international and that must be faced. The governor of the Bank of Canada has said:
The problem does not originate in Canada and the bank has no way of dealing with it that would not affect either the level of interest rates or the exchange rate or both.
Some members who have taken part in this debate have behaved as though any mention of international factors were an attempt to evade responsibility for doing in Canada what can be done in Canada. Surely the opposite is the case; to act intelligently in Canada, one must have an understanding of the international implications.
The Conference Board, which used to be highly regarded by some members opposite, told us this fall that most of Canada's inflation in the post-war period was caused by international influences and that world markets were more significant in the bills we pay than Canadian profits, labour costs, money-printing or government spending. In fact, one well-respected financial analyst went on from that point to suggest that this is a strong argument for making sure that in any constitutional rearrangement the federal government has all the levers it needs. In the Toronto Star for September 2, 1980, we find the following:
Since the fight is so difficult, and so international, it's vital that Ottawa have the power to do what it can, in combination with other countries.
A number of members tonight have spoken about the effect of high interest rates and high inflation on lower-income Canadians. This must be a real concern to all of us. People with lower incomes have less discretionary income. Their income is very tightly budgeted. They have fewer choices and almost all of their income must be spent on the necessities of life. Indeed, they are the people who are hardest hit in times of economic difficulty.
Another member who spoke had some criticisms of what he called the welfare state. But surely if it were not for the social measures now in place, those on low incomes would find life even more difficult than they do now. Most of the social measures now in place were introduced by Liberal governments. For example, old age security, the guaranteed income supplement, the spouses allowance, family allowances, the
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child tax credit, unemployment insurance benefits, veterans' allowances and Canada Pension Plan benefits. All of these are indexed in some way to the cost of living. Together these programs have provided approximately $3 billion of extra protection from inflation in 1980 alone. The Canada Assistance Plan is also indirectly indexed.
Social measures are usually generously supported by Canadians when times are good, but in times of economic hardship, we tend to hear more criticism of these measures, such as we have heard tonight and we hear more adulation of the private sector. Perhaps the main answer to that is to build a larger pie. The sharing of our resources and giving help to those who need it most, whether by way of medicare, subsidized pension plans, or whatever, is generously supported when times are good. We all agree with this kind of redistribution of income, but we would support it more enthusiastically if there were more income to redistribute. This is why 1 think the measures in the last budget which were aimed at building on the underlying strengths in the economy present a more useful approach to the problems than some of the criticisms we have heard this evening.
A key part of the budget strategy was the energy policy. At the present time, the Canadian taxpayer is subsidizing foreign oil brought into the country to the tune of almost $4 billion a year. Quite clearly, the answer to that is to use every means in our power to increase the amount of oil-conventional, from oil wells, new oil from the frontiers, synthetic from the tar sands, heavy oil-and to move, as is planned in the energy program, to substitution away from oil to gas and to other forms of energy so that we can be independent of oil imports by 1990.
Although we do not have an agreement with Alberta and although there are a number of contentious issues in the energy policy, whatever the final framework set for domestic oil and gas may be, that oil and gas belong to Canada. Every dollar spent in the future on energy from Canadian sources rather than offshore sources is a dollar toward a healthy balance of payments. If we continue with the measures described in the budget, it is also another dollar to be recycled into further growth in the Canadian economy.
One hon. member earlier this evening spoke of capacity utilization and suggested it was at a very low figure. I think he put it too low. In spite of the recession, investment has increased since last September. We have less excess industrial capacity than one might have expected, especially in those sectors which are more export-oriented. That gives us a challenge to grow fast enough to meet future domestic and foreign demands. There will be an eventual upturn in foreign markets; we have a good base; we have many advantages. We are energy rich, we have a well educated and competent labour force. We have a labour structure which has been acting very responsibly and constructively. Recently we have seen requests only for wage increases that reflect gains in productivity to a large extent.
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There is, of course, much to do by government as well as by all of us. There is clearly a seller's market for most key industrial resources today. It is important we use that as a level or bargaining tool with our trading partners to ensure increased processing and manufacturing of goods before they leave Canada. We are a trading nation. That gives us some vulnerability but also some strengths. It is important that we use those strengths, that we try for more upgrading of our exports and try to keep jobs in Canada more than we have done in the past. An energy agreement with Alberta, a national industrial policy, incentives for investment and industrial efficiency offer us hope for the future.
In this discussion members who are perhaps understandably concerned with the difficulties facing us have not mentioned some of the positive factors we have seen lately. When the results of the national accounts were released for the third quarter of 1980, real GNE grew by close to one half of one per cent in that third quarter, having declined in the two previous quarters.
Those figures indicate that the economy is performing somewhat better than was earlier estimated. The relatively strong trade performance in the Canadian economy, despite the recession in the United States and Europe, reflects a considerable improvement in the competitive position of Canadian industry since late 1976.
In conclusion, I repeat that the times are indeed difficult. However, it is an exaggeration to call our situation a crisis. At a time when we are anxious to encourage investor confidence, I am not sure it is acting in Canada's best interests to speak of crisis. We have some underlying strengths in the economy. Measures in the budget and in the national energy program will build on those strengths. Members have called for a new budget, but we have not yet had time to see the results of the recent budget.
It is time to put our assets to work for us. Not least among our assets is the traditional Canadian ability to conciliate to reason, to work co-operatively-an ability that has not been much in evidence recently. However, I am sure it is still a distinctively Canadian characteristic that will work for us.


John Horton McDermid: Mr. Speaker, I am sorry that we on this side are keeping you up so late. We know it is past your bedtime. However, you will have to bear with us because we have a lot of important things to say.
I rise to join in this debate which I feel is very important to the well-being of Canada. Let us just review what this government has been saying over the last few months: we do not like high interest rates, they are too high; inflation is far too high, the dollar is far too low, conditions would be a lot worse if we were not here. That is all the Canadian people will get from this government. We see the wringing of hands by the finance minister every day, concerned worried looks, but no action, only higher prices for fuel, food, transportation, loans, and on and on.

December 19, 1980
Economic Conditions
Tonight was one of the prime examples of the haughtiness, arrogance, cockiness of this government when the energy minister tried to sell his energy policy, a policy so weak that he had to yell for his full 20 minutes. The minister said only 15 or perhaps 20 rigs had left Canada in October. Each one of those rigs generates $1.4 million in spin-offs in an area. To my way of figuring, that is a $28 million loss in the month of November in the province of Alberta. It takes 60 trucks to move one rig out of the country, that is, 1,200 trucks tripping out of the country with oil rigs on their backs. The only people employed are the truckers who drive the trucks to get the oil rigs out of the country.
The minister stands there and says only 20 rigs left, only $28 million lost in the month of November. That was a shameful show this evening. It was just disgusting. The minister talks about 100 rigs sitting idle. Certainly they are idle. They cannot afford to look for energy in this country. I am sure before long they will be going to the United States because there they are trying to achieve energy self-sufficiency.
1 mentioned concerned, worried looks except for one man. That man is the Prime Minister (Mr. Trudeau). I sit here day after day. He laughs and smirks when legitimate questions are asked on behalf of senior citizens, the working poor, the unemployed, citizens of western Canada who are not represented on that side of the House. He laughs and smirks when he brings in closure and members genuinely concerned with the well-being of this country do not have an opportunity to be heard. He sits there and laughs and smirks when anyone asks serious economic or social questions. It is a big joke to him.
It is not funny to Canadians who are not quite as well off as the Prime Minister or myself. The Prime Minister gave what he thought was some fatherly advice to senior citizens, the unemployed and the working poor the other day when he said: readjust your budgets so you can put food on the table. This was advice from a man whose biggest domestic decision in adjusting his budget is what kind of champagne to buy. He should apologize to those people. What he is doing is having them change from beans to Gainesburgers. That is his idea of changing priorities.
The Prime Minister cares about one thing: the Prime Minister. He does not care for the little man or woman, a unified Canada, or economics. He cares for Pierre Trudeau. He does not care for his caucus, the Liberal party, Canadians in all walks of life; just his own vision of Canada, and his vision is probably the most divisive force. He is the most divisive force the people of this country have ever had thrust upon them.


Peter Joseph Lang: On a point of order, Mr. Speaker. The hon. member is not sticking to the rules of relevance in taking pot shots at the Prime Minister which are really a misrepresentation of what is going on. The Prime Minister is not here to answer them.


Mr. Deputy Speaker:: That is a point of debate, not a point of order.


John Horton McDermid: I am sure the Prime Minister can speak for himself. It is rather interesting that the hon. member for Kitchener would stand up and make those comments after what the minister of energy had to say about my leader tonight, which was disgraceful and disgusting. Let us get back to some important matters. As I was saying before I was so rudely interrupted, as a member from Ontario, I have a great concern about the west.


Some hon. Members:: Oh, oh!


John Horton McDermid: That is exactly what happens every time somebody discusses the west; somebody over there laughs. They think it is a big joke, but it is not. The sooner you people get up off your duffs and get out west and see what is going on the better it will be for Canada. I spent some time out west recently and I am genuinely concerned, "frightened" is probably more appropriate, about the mood of the people. 1 do not want the west to separate any more than I want Ontario or Quebec or Newfoundland to separate. However, this government is causing this. This government is deliberately driving a wedge between the centre and the west so as to claim power. It is doing it in respect of energy policy, it is doing it in respect of economic policies and it is doing it in respect of constitutional policies.
I for one; as a member of Parliament representing a part of Canada I am very proud of, will not put up with that. I think it is fair to say that the citizens of Ontario, of Quebec, of the maritimes and of Newfoundland will not put up with it either. You fooled them over there; you misled them; you snuggled up to them during the last election, but the bloom is off the rose, believe you me. 1 noticed that the Prime Minister did not have his rose on today. He should have been wearing a black armband after the announcement of those increases in interest rates and the cost of living today. He is dividing this country. His Liberal cabinet, all of whom hope to receive the laying on of hands by the Prime Minister when he finally retires, if that ever comes, go along with it. His backbenchers will not stand up and be counted.


Some hon. Members:: Hear, hear!


John Horton McDermid: Everything was fine when they were in opposition. Listen to these words from page 245 of Hansard for October 16, 1979. An hon. member, a fellow I am pleased to call a friend, the hon. member for Laprairie (Mr. Deniger), said after meeting with westerners:
I witnessed and sympathize with their feelings of alienation. I pledged to fight to overcome their despair. 1 pledged to fight all regional alienation-
I ask this House, and I ask him as a backbencher with the Liberal government, where is he now? Why is he not fighting that alienation his government is causing in this country?
Let us talk about interest rates for a moment. Let us talk about mortgage rates and young people trying to buy homes.
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That is an impossibility. This government brought in a plan called AHOP, the Assisted Home Ownership Plan. The minister for some reason calls it "a-hope". 1 think he hopes it will go away. It provided 8 per cent mortgages with grants and now their mortgages are coming up for renewal, and they will move from 8 per cent to perhaps 18 per cent. On a $50,000 first mortgage the payments will increase from $414 to $747 per month. That is the increase on the first mortgage, never mind the second mortgage. The money the government doled out to them for five years now has to be paid back at Canada Mortgage rates. That is $333 per month more, which amounts to over $4,000 per year. Young people are walking away from their homes.
When I questioned the minister the other day in the House about this he thought his plan was marvellous. He said he was going to take care of those people whose shelter costs exceeded 30 per cent and the additional costs would be underwritten by the corporation.
Let me tell you how they underwrite it, Mr. Speaker. They take the amortization of a mortgage, and instead of it being for 20 years they make it for 30 years. If that does not come down to the 30 per cent they extend the mortgage to 40 years. If that does not bring the payments down they extend it to 50 years, adding thousands and thousands of dollars in extra payments for those young people who are trying to keep life and limb together. Does this government care about them? Not a bit. There is not one thing in the budget that this government has done in respect of housing except to drive people out of their homes.
I had a lady call me today from Brampton. Her daughter and son-in-law had just lost their house because of mortgage interest rates. They had to move to an apartment because of high interest rates. This lady was in tears and I can understand why.
These children had saved up the down payment, having worked their hearts out, and now have had to walk away from their dream. They have had to walk away from that dream because of this insensitive government which is ruling Canada today.
There are about half a million young people unemployed in this country, all under the age of 24. I think that is a national disgrace in a country which is so rich in all kinds of resources, human and natural. We have a manufacturing base, we have people with brains and the finest educational system in the world. In spite of this we have over 500,000 young people unemployed. They are all frightened at their prospects. What is in the budget for them? I suggest there is nothing in it. All they know is that when they borrow Dad's car on a Saturday night it costs them a hell of a lot more for gasoline than it did a few years ago.
I should like to quote the present Prime Minister when he was the Leader of the Opposition. If hon. members look at page 685 of Hansard for October 29, 1979, they will find the following:
At what point will the government look at these alternatives, rather than following the American interest rate up to 13 per cent, 14 per cent and God knows how high?
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He is probably the only one who does know how high; how high the moon? When is the government going to look at those alternatives? I see the parliamentary secretary sitting over there throwing up his hands. His attitude is obvious. They are giving up. They are just prepared to go along for the ride; things will get better if we hang in there, baby. Just ignore it and it will go away. That is not likely.
The Minister of Industry, Trade and Commerce (Mr. Gray) is a real winner. On page 718 of Hansard for October 29 he is reported to have said that a new budget should make industry more productive and efficient as part of an industrial strategy, and include measures to help specific sectors of society, for example, small business, farmers, consumers and low-income groups. He said:
Wc . . . will continue to press for measures of this kind.
That was said by the Minister of Industry, Trade and Commerce. Where is that minister now? I know he is hurting and cannot be in the House tonight, but where is his voice now? Why is he not standing up for those principles? What happened to him? Where did he disappear to? I watched the Morty Shulman show the night when the hon. gentleman said "if interest rates go up I will resign". The double standard of the Liberals is shown again because he is still there in the front benches; but for how long I do not know.
The Minister of Employment and Immigration (Mr. Axworthy), then the housing critic, that great white hope of the west for the Liberals, said as reported on page 754 of Hansard for October 30, 1979, if you will permit me to quote:
For example, he could be providing some emergency assistance for those who have to renegotiate their mortgages. He is condemning thousands of Canadians right now because he is not prepared, as I understand it, to make directives to the banks or the lending institutions. Thus these Canadians are locking themselves into mortgage rates of 14.75 per cent. If those rates go down six months from now, those people will be left in the wash.
1 renegotiated mine at 14.5 per cent just before the rates went up. I feel pretty good about it. Isn't that something?
They will be high and dry up on the shore, because if interest rates recede they will still be paying 14.75 per cent carrying costs. Is that a fair and equitable kind of system? Is this a government which is really concerned about the problems of all Canadians, or is this Minister of Finance simply saying once again that he docs not care and that he is not concerned about that group of people?
It was the Minister of Employment and Immigration who said that when he was in opposition. Where is he now? Where is his voice now? Why is he not standing here in this House and condemning the Minister of Finance (Mr. MacEachen) for the shoddy budget he brought in?
High interest rates affect absolutely everybody. They are costs. They are part of the prices everybody has to pay, so everyone is affected. Parliamentarians are not affected nearly as badly as the majority of the people in my riding. One of our problems is that we tend to live in a dream world up here on the Hill. Perhaps we just do not go back to our roots often enough at weekends to find out what really is going on. I suggest the government should start doing that. If it did, maybe it would get the message. Perhaps the backbenchers opposite will get the message and start passing it on to cabinet ministers who perhaps do not get home quite as often
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as they would like because of their responsibilities. Somebody should go to the Minister of Finance and tell him what is going on in this country. Farmers who are desperate come to me. They are paying prime plus 4 per cent. How can one start a business paying prime plus 4 per cent? How can one start a farm? It is absolutely ridiculous. What is the government doing about it? Not a thing. We now have the highest rates in 40 years. We are moving into winter, a tough time of the year in Canada. I am absolutely shocked at the reaction we have been getting day after day in question period.
In closing, I ask that the Liberal party, the Government of Canada, the Minister of Finance and the Prime Minister of Canada, for a refreshing change, please put Canada and Canadians first.


Roger Simmons: Mr. Speaker, I listened with great interest to what my good friend, the hon. member for Brampton-George-town (Mr. McDermid), had to say. To say the least, 1 was disappointed, as I am sure anyone who heard or watched him tonight would be, with his personal vendetta against the Prime Minister (Mr. Trudeau). There is no question that he and the Prime Minister differ on many issues, but I ask him to conceal his personal animosity toward the gentleman and address himself to the issues. I am sure he would have a much more receptive audience than he has when he is personal and derogatory, as he has been. 1 find that unfortunate.
What 1 found to be the cheapest shot of all was that the hon. member asked where the Minister of Industry, Trade and Commerce (Mr. Gray) was at a time when everybody in this House knows that the Minister of Industry, Trade and Commerce is recovering from an accident in which he injured his foot. This is really not the time to be so low as to attack a gentleman in those circumstances.


John Horton McDermid: Mr. Speaker, I rise on a point of order. My point of order is that I did not say that. I mentioned that the minister was ill. I said that we wanted to hear his voice loud and clear on the issues. I did not mention anything about his being out of the House because he is ill. I am sorry, but that was a low blow.


Roger Simmons: Mr. Speaker, I recognize, as you do, that that is no point of order. The hon. member for Brampton-Georgetown has said that it was a low blow, and that is what 1 was attempting to say when he interrupted me. I am glad to hear that he agrees with me.
The hon. member also talked about double standards. In a few moments I shall talk about double standards.


Ian Deans: Come on, Rog, raise your sights.


Roger Simmons: My socialist friends are all worked up again tonight. They are duly exercised. The Tories and New Democrats wanted an emergency debate on the economy, so we are having it. We have sat here tonight and listened with great interest to what they have had to say. I have listened to most of the speakers over the last several hours, but what have we heard? What have they been saying? What are their solutions? They really have not made up their minds. They have proffered several solutions depending upon who was speaking and depending on the whim of the'moment. Some of the solutions advanced would fuel inflation even further, which would hardly solve the problem. Other schemes they came up with would drive inflation through the roof. Arguments were put forward in favour of approaches which would increase unemployment even further. At the same time they spoke out of the other side of their mouths about how high unemployment is now. The hon. member for Broadview-Greenwood (Mr. Rae) cannot make up his mind about how high it is. He does not have the figure straight as to whether the number is 800,000 or one million but, give or take a couple hundred thousand, he is concerned about the issue.


Bob Rae: The figure is 1.3 million.


Roger Simmons: Some hon. members espoused policies which would decrease the purchasing power of low income Canadians. Those are the kinds of things we have been hearing about throughout this evening. We have heard solutions which would further aggravate the situation.
However, to their credit, dubious credit though it may be, they do have one thing in common, and that is that they are unified, consistent and undying in their preaching of gloom and doom. To listen to them one would think there is nothing good about this country. To listen to the gentlemen of the NDP and the Tory party who have spoken tonight one would think there is nothing right in this country whatsoever. We just hear a constant harping about gloom and doom and gloom and doom, as if somehow that approach could itself solve the problem. The outlook for the world economy especially is indeed a grim one in the short term. A good part of the problem is that Canada and other industrialized nations have not yet recovered, or even adequately adjusted, to the 1978 oil price shock. That is a good part of the problem. It should not be understated. I suggest that it has been understated time and again by a number of speakers opposite.
While the outlook in some respects is grim, I believe that to tell the full story in all honesty it is important to point out that it is not all bad news. It is not all as desperate and as fraught with gloom and doom as speakers opposite would have us believe.


David Kilgour: Tell us the good news.


Roger Simmons: For the hon. gentleman opposite I intend to get to some of the good news.


David Kilgour: Do it right now.
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Roger Simmons: 1 shall do that, and I shall do it on my schedule, not that of the hon. member opposite.


Mr. Gamble:: We can't wait all day.


Roger Simmons: One would not know there is any good news by listening to the speakers opposite tonight. What is it about hon. members opposite? Are they masochists by nature? What is it about them which constrains them to talk about gloom and doom and about Armageddon every time they open their mouths?
Why is it that tonight they have been so dishonestly selective in citing facts to make their case of gloom and doom? It is not all bad news. Here is some good news. First, during the third quarter of 1980, after declines in the two previous quarters, the good news is that the real gross national expenditures grew about one-half of 1 per cent.


An hon. Member:: You are a lunatic.


Roger Simmons: They do not say that. I cite a fact which is clearly on the public record. That is just number one. As soon as they hear good news, as soon as they see you are going to make a point, they become really exercised because you are about to destroy their doom and gloom scenario. There are problems, and the first point I make is that the gross national expenditures are up in the third quarter. They do not want to admit that kind of thing, nor do they want to admit that the merchandise trade balance has posted $658 million in October.


David Kilgour: Tell us anything that is good.


Roger Simmons: If the gentleman would listen, I would tell him a number of things. And if he would listen, I would not even have to yell out what I am telling him.


An hon. Member:: Give us some real good news.


Roger Simmons: Now, Mr. Speaker, I cannot wait until The Vancouver Sun prints this one. The hon. member is not out pushing his "householders" tonight, with the hate mail I told him about earlier. He is back tonight, that is good news. Opposition members do not bother to mention the couple of facts which 1 put on record. I invite gentlemen opposite first to get Hansard where they will see clearly what I said. If the hon. member does not understand what I said, 1 am sure my good friend sitting in front of him, the hon. member for Parry Sound-Muskoka (Mr. Darling), will explain the whole thing to him. They do not bother to tell those things to the public, nor do they bother to mention a number of government programs put in place by this and past Liberal administrations which address the very issue about which they and we are concerned. The government already has in place a number of programs which add a fair deal of protection to those who are most in need. For example, the old age security, the guaranteed income supplement and the spouse's allowance, all of which are indexed to the cost of living; as the cost of living goes up these payments go up. Such is the case with family allowance.
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Members opposite know this but they did not bother to mention it. They keep asking what is being done for people on low income and on fixed income. I suppose there is no one in this House who would assert for a second that enough is being done. In those circumstances enough can never be done. But the record should show that some things are being done to help people who are wrestling with the ever-increasing cost of living.
I mentioned the old age security, the guaranteed income supplement, the spouse's allowance and the family incomes which are tied to the cost of living, the child tax credit which is tied to the cost of living, unemployment insurance benefits which are going up in 1981, veterans' allowances which are tied to the cost of living, CPP benefits which are tied to the cost of living. This is just a short list of some of the items. I could mention the income tax system itself which is indexed to the cost of living. When hon. members opposite were rumourmongering this year, when they were preaching their gloom and doom, using another subtheme but still preaching gloom and doom, they were telling the country how those bad Liberals were going to deindex the income tax. But when we did not do so, was a voice opposite raised in praise because it had not been done? Oh no, they quickly and uncomfortably moved to another subtheme, though the over-all theme was just the same: gloom and doom, gloom and doom. The income tax system is indexed because a past Liberal administration brought in indexing. That indexing is helping people in some measure to cope with the increasing cost of living. Together, those six or seven programs which 1 have just enumerated are providing about $3 billion because of indexing-in extra protection from inflation in 1980 alone to recipients of the payments I have just listed. That is something, Mr. Speaker. Even the most unkind analyst of the programs of this government would have to admit that $3 billion is at least a drop in the bucket. It is certainly something. It is perhaps a small step in the view of people who normally speak for multinationals and who talk in large figures with many zeros and commas. But surely even $3 billion must have some impact on those people. Surely they must recognize that $3 billion extra this year in the pockets of recipients of child tax credit, old age security, guaranteed income supplement, Canada Pension Plan benefits, and unemployment insurance, must have some effect on the problem which we are addressing here tonight.
In addition to those programs, let me just mention that there are many other government programs which provide some protection from inflation in a less direct though just as effective way. For example, I am thinking about the Canada assistance plan. Under that plan the government shares with the provincial governments 50 per cent of the cost of certain social services and welfare payments. Therefore, under that program, by the very growth of provincial expenditures, as those expenditures grow, the actual dollar amount which this government puts in as part of those expenditures grows also. So, in an indirect way, programs such as the Canada assistance plan are also indexed to the cost of living.

December 19, 1980
Economic Conditions
We have heard the hon. member for St. John's West (Mr. Crosbie) this evening and on other occasions and in the question period today talk about the government having the responsibility to protect those who cannot protect themselves. There is nobody in this chamber, and nobody in this country 1 suppose, who would on principle, disagree with that concept. 1, for one, do not and I do not know anyone in this government, or anyone who supports this government, who would disagree that the government has a responsibility to protect those who cannot protect themselves.
But a government cannot realistically-and 1 would be less than candid if I suggested otherwise-protect everyone from every unfavourable event. That is the kind of thing the hon. member for St. John's West has been advocating in the question period these last few days. I say to him it is high time the Tories made up their minds on this particular issue. Either the government should hold the consumer's hand at every turn, which is the argument which the hon. member for St. John's West has been espousing these past few days, or the government should disengage itself somewhat, should become less involved in people's lives which is what the hon. member for St. John's West has been heard to say on other occasions. On one occasion this fall in the House, on October 29 in the budget debate, the hon. member for St. John's West said, "A reduction in the total size of the government would be helpful". He has to make up his mind; he cannot have it both ways. He cannot, on the one hand, be saying that government should reduce in size and provide fewer services and on the other hand, when it is convenient for him, that the government should hold every consumer's hand at every turn. I invite him to come clean and to make up his mind. He cannot have it both ways; the Tories cannot have it both ways.
As we listened to the hon. member for St. John's West (Mr. Crosbie) and others who spoke in this debate this evening, we heard a number of suggestions concerning how the problem before us can be solved. One suggestion that there should be was a concerted attempt to get the consumer price index down, that we should go at it hammer and tongs, and that we should attack inflation today. I am sure the hon. member for St. John's West has had occasion, especially when he was minister of finance, to rely on the advice of economists. There is universal agreement among economists that a concerted attempt to wrestle inflation to the ground, without due regard to other considerations, would involve costs that would be simply too severe. 1 am thinking about the costs in terms of dollars and in terms of impact. The effort would be counterproductive. At this time it is certainly widely accepted that an attempt to wrestle inflation to the ground might lead to some success, but it would be at the risk of losing the patient; we would win the battle and lose the war. Basically the hon. member for St. John's West is saying, "I know I can cure you just as soon as I see the autopsy". He wants to wrestle inflation to the ground at the expense of everything else.
If 1 were preparing my Utopian shopping list, 1 would like a lot less inflation and a very much lower interest rate, but if it is
a matter of facing the realities as they are, one must ask the question: if 1 do this with inflation, what other ramifications will it have on the economy? Also one must ask: if I do this with interest rates, will it be counterproductive and create more harm than good? These are the kinds of questions in much more technical terms to which people like the governor of the Bank of Canada and others must address themselves before taking actions such as those advocated in the chamber this evening.
I did not realize my time had gone so quickly, Mr. Speaker. I wanted to address a number of interesting suggestions to the hon. member for Broadview-Greenwood in response to his comments. But in conclusion 1 say to the hon. member for St. John's West that the House ought to be able to look to him as a former minister of finance for a considered, dispassionate appraisal of the current economic situation. Unfortunately that is not the case, because he tends to fill up his time with dramatic rhetoric. He is marching to a different drummer these days. He is marching to the Tory leadership drum which is unfortunate. I appeal to him and to the right hon. member for Yellowhead (Mr. Clark) to take the Tory leadership campaign out of the House. They have been fighting-


Mr. Deputy Speaker:: I regret to interrupt the hon. member but his allotted time has expired.


Hon. Roch La Salle (Joliette):: Mr. Speaker, I wish to take part in this debate that, in view of the circumstances, will go down in history. 1 feel the large number of speakers is proof of its importance. The hon. member who has just finished his speech tried with great courage-or was it really courage-to get Canadians to believe that the situation is not all that bad. I find it incredible to see those people opposite make such efforts to try to save their government, when in fact they are responsible for the situation because they failed to take on their responsibilities when it was time to do so.
Today, we realize that Canadians are traumatized, worried; we are told that about 63 per cent of all Canadians view the economic future of their country with pessimism and concern. A poll reminds us that 40 per cent of all Canadian workers are now worried about keeping their jobs; it is no longer a matter of 1,400,000 unemployed, the responsibility of the government opposite, but of 40 per cent of all workers worrying about their livelihood. I feel that those figures, those considerations, force us to challenge the government and urge it to land on its feet. 1 say this is not news: interest rates are staggering, inflation forecasts already exceed by far those the Minister of Finance (Mr. MacEachen) dreamed up a few weeks ago. That has happened over a period of 13 years, as far as I can tell. Should you have come to this House 13 years ago, there were 300,000 to 400,000 unemployed then. Now there are one million and a half, of whom 500,000 are young people under 24 years of age.
The previous speaker recalled the events surrounding the introduction of old age security; Does he think that will
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reassure Canadians? No one is against old age security, on the contrary. But he wanted to tell us the Liberals have done something in the last few years. So, he brings up a story that goes back 30 years. But there are more pressing things to attend to, Mr. Speaker. A situation exists now that is of great concern to Canadians. I feel hon. members must express their concern and ask this government to take what steps are indicated under the circumstances.
Thirteen years of Liberal administration: unbelievable failure, sad record, both politically and economically; we see the results today. Some will say, of course, that last February Canadians showed their confidence in this government, giving it a six-member majority. But one must be careful about saying that the Canadian people as a whole believed in this government. It may be that not very many Quebeckers are happy today; that 68 per cent of them today do not cheer about the present interest rate and the situation which low-income workers will have to face in the coming months. So, 1 say the policies served up by this government are nothing but a pitiful failure.
Last year, at about this time, we were going through an election campaign; we had thought things out seriously and were working assiduously to steer the economy and the country back onto the road to prosperity. Now, we have obvious proof of 13 years of power leading the country to decline and bankruptcy. Of course, our friends opposite will argue this, as best they can, trying to justify a government that considered various solutions or tried to maintain a viable economy through artificial measures. The Prime Minister (Mr. Trudeau) is not here, and it could be said that 1 should not talk about him when he is not here, but even if he were, I would say the same thing.
The Prime Minister is now trying to amend our constitution by imagining an artificial Canada. This is not the way for Canadians to live comfortably. Last year we introduced measures which called for courage, and 85 per cent of business managers endorsed the economic direction that we proposed to take. We gave its proper role to private enterprise and incited it to create jobs because it was impatient to see where the government was going. What were our mid and long-term policies? We showed clearly what they were. Of course, Canadians had to make some sacrifices, but they were ensured of an economic direction which would have avoided the difficulties and the hardships they have known since last February. Our budget was defeated on the issue of interest rates. Canadians should be reminded of this fact.
Our projections concerning the inflation rate seemed unacceptable to those who wanted to regain power and who then put completely aside the national interest by not considering whether the country was still able to afford elections and to continue to stagnate for another year, because while we took
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seven and a half months to bring down a budget, the Minister of Finance cannot be congratulated for the time he took to bring down his own budget, and what a budget it was!
Serious organizations, and I am not the only one to say so, clearly question the validity of this budget. Serious people are now criticizing the budget. I saw recently that the chairman of Petrofina strongly condemned the energy proposals of the Minister of Energy, Mines and Resources (Mr. Lalonde). For our part, Mr. Speaker, we believed that the private sector should take its proper place in our economy and make profits in Canada. When we know the Prime Minister and where he comes from, when we know about his former socialist philosophy, which, as a point of fact, he still holds, as our friends opposite realize even though they lack the courage to do anything about it, we can see that this worries the private sector tremendously.
1 must point out that the Independent Petroleum Companies Association, which includes 200 Canadian companies, has felt the need to publish a document addressed to Mr. Lalonde and entitled "Your Energy Policy is Harmful to Canadians". It will increase the dependency of Canadians on foreign oil. It will bring about long-term higher prices for gasoline. It will delay needed exploration; it will cause the loss of thousands of jobs. This is what is happening, Mr. Speaker. Our friends opposite try to speak about an energy policy and self-sufficiency, but this government should have been farsighted enough to make these projections ten years ago.
How could I not remind Canadians, Mr. Speaker, that for purely electoral reasons in 1978 and 1979, this government refused to set normal prices for gasoline instead of maintaining an artificial price? Economists are now talking about it and they realize that the government did not have the guts to rectify the situation at the proper time. Today, the government implores us not to blame it and says that this is the fault of the United States. Canada could have solved this problem in the last 13 years. It did not happen.
Of course, they will talk about social measures. They reminded me a short while ago that the government had dealt seriously with the unemployment insurance benefit problem, but after it had caused some 1,400,000 workers to lose their jobs. It felt that it had to provide them with a meagre pittance so they could eat three times a day. It is because of this sort of leadership that we are faced with this incredible economic failure, Mr. Speaker. They have refused to behave like responsible people. They were satisfied with toeing the party line without the least consideration for the future of Canadians.
Mr. Speaker, I must remind my Quebec friends that the Prime Minister and his government seem to administer by following the famous "divide ut regnes" formula. Over the past 13 years, they have succeeded in creating enough confrontation to alienate the provinces and start a real war between them and the federal government such as the one we see today. Although jealous of their wealth Albertans are willing to share

December 19, 1980
Economic Conditions
it with the rest of Canada, but not the way the Minister of Energy, Mines and Resources, this specialist of confrontation, would like to impose on them. 1 have known the minister for a long time. My hon. colleagues from Quebec certainly remember, just as I do, that when Mr. Levesque's party was elected in 1976, the Bourassa government was blamed for a cut of some 30 per cent of the milk quota, when it is a well-known fact that it is this government's bad administration which was responsible for the difficulties Quebec dairy producers had been experiencing.
Not a single Quebec Liberal had enough guts to tell Quebeckers that Mr. Bourassa had nothing to do with that, but this government which has been re-elected and whose days, I hope, are counted. Then, they complained about the PQ being in power in Quebec. 1 am ashamed of the actions and attitude of the Prime Minister and his ten-odd Quebec ministers; I even pity them once in a while. I know they will say there is only one hon. member out of 74 who does not share the general views. We certainly do not share the same views, Mr. Speaker. Thousands of Quebeckers think as I do this evening and they would like to say so in this House. Few Quebec members will complain about that bad administration, that incredible bankruptcy, that confrontation and the malicious objection of the Prime Minister. And I must say it over again, Quebec has not only been blamed and denied since 1976, but now Alberta and many other provinces are in the same situation.
It is a policy of confrontation, divide to rule and forget at the same time that the basic issue has been set aside in a country that wants to develop a climate likely to promote investments. We do not have to ask ourselves what is going on when those provincial governments are unable to find common ground with the Prime Minister, when this government takes unilateral decisions prejudicial to the interests of the provinces, decisions with direct consequences for the provinces. How can we create a propitious climate for investments? The solution is not found in interest rates alone. If we had a propitious climate for investment perhaps we could provide tax credits, direct substantial aid to those small wage earners who will be unable to meet the costs which they will be facing in the months to come. How could it be otherwise. The government is showing a complete lack of perspicacity in areas as important as the automobile industry and as a result of a lack of advanced research, the industry must now dismiss thousands of workers.
Can those Canadians still have confidence in this government? And some will blame it again on the United States! Mr. Speaker, there is a serious deficiency, and it is not always the neighbour's fault, and then again, I am not disproving the argument that it is hard to get rid of our neighbour's influence. With good management, we might have been financially able to help those who deserve to be helped. Let us not mention old age security benefits when they have been provided for 40 years now. This is where the problem lies.
We are raising serious matters today and the government is to blame. I want to stress that all this is due to the lack of a cohesive policy, of a policy likely to meet the aspirations of Canadians, and it is a failure. The Canadian people must wake up and realize that the government cannot solve that problem by means of clearly cosmetic measures.
In Quebec people are concerned also; I have to talk about my province. The Minister of Energy, Mines and Resources referred to it earlier, they mentioned it on the federal side and, of course, we heard the Minister of State for Finance (Mr. Bussieres), and perhaps many members from Quebec will take the floor. They too must have in their constituencies people who are concerned about this. But 1 remember that last December, a year ago, questions were asked in Quebec. I remember that in February, 74 hon. members from Quebec were sent to Ottawa, 68 per cent of Quebeckers were very pleased about that brave team, and we are still waiting for decisions.
Quebeckers are worried not only because of interest rates but because of some projects which are to be carried out. They might have created employment, Mr. Speaker. We are concerned about Gros-Cacouna, for example. Few hon. members broach the subject in my presence. My friends from Quebec do not often raise the matter. There is some concern about the settlement concerning the Laprade plan, a $200 million settlement which is still outstanding. There is some concern about the Mirabel fiasco about which the Minister of Transport (Mr. Pepin) proved extraordinarily weak, and 1 am also thinking of the decision to privatize Nordair. Every day Liberal members opposite come to tell me in private that I should kick this minister in the pants because he did not have the courage to stand up and has become a headache ever since he has been sitting on his Pepin-Robarts report. There is concern also about the delay announced regarding the construction of the Federal Business Development Bank building. There is concern about the dispute now going on and in the making concerning the economic summit to be held in Montreal with regard to the future of that city.
It may be worth reminding Quebeckers that with 22 Liberal members for Montreal, a prime minister, a few ministers, and some ordinary members, 22 out of 22, Montreal has achieved a fantastic record over these past 13 years; it has lost its status as Canada's metropolis. This is the certificate of achievement I would like to grant to these people. The Postmaster-General (Mr. Ouellet) is certainly going to call me a nobody because I have the guts to tell things that should be said, Mr. Speaker. I think you mean to tell me that my time is up. I will therefore end my speech at once by reminding our friends from Quebec that instead of criticizing our mortgage tax credit because we had not included tenants, the good news Quebeckers got yesterday was that the minister declared that he was postponing for two years the housing allowances and not only did they
December 19, 1980

defeat a budget which could have helped the small owner, and these days it is something very important-but tenants will again have to wait for this government to deliver its promises. This is why Canadians worry, Mr. Speaker, and it has now been demonstrated that this government no longer enjoys public confidence to govern this country.


Mr. Ralph Ferguson (Parliamentary Secretary to the Minister of State, Small Businesses):: Mr. Speaker, 1 rise to speak in this debate, fully recognizing the concerns raised because of escalating interest rates and the problems that affect the consuming public, the business sector, private businessmen, farmers, and most sectors of our economy and society.
But if we look at these trends and examine their effects on various sectors of society, we first must consider the impact on our senior citizens who are deserving of the excellent care and accommodation which is provided them here in Canada. The federal government programs of the past few years have provided them with living accommodation. 1 refer here to senior citizen apartments in the cities, towns and villages across this nation, apartments that are rented to these senior citizens whose needs are the greatest, at rates which are related to their ability to pay. This is one of the programs which has permitted our citizens to retire and live a life of dignity free of worry and want and the every-day cares of maintaining an individual residence.
The senior citizens are shielded by indexed benefits and pensions, and the guaranteed income supplement. The increase last summer of the guaranteed income supplement was provided for those most in need, and about $3 billion is spent through indexing each year to cushion our lower-income citizens against hardships. Other seniors who have reached the age of retirement in any cases have their homes paid for, if they are not living in senior citizen facilities, and consequently in many cases have modest investments to supplement their pensions and thereby are not affected by the higher cost of interest to the same degree as others in our society.
However, we recognize the hardships endured in the small business sector, paticularly by those people who must carry a high inventory, who are paying interest on operating loans on a floating interest rate. We also realize the impact on home owners who are who are renewing mortgages, on potential home owners who are taking out mortgages, and on those who borrow funds to augment their incomes which are of a seasonal nature.
Many lending institutions today will provide a flexible rate on a mortgage, or a short-term rate that can be locked in at a firm rate when the rates fall to more normal levels. We recognize the problems encountered by those home owners and prospective home owners, but with such flexibility in the mortgage industry there is a vehicle which can provide them with a level of stability when they negotiate new mortgages.
In the rural economy, particularly in the agricultural industry, many sectors have a degree of protection against these
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abnormally high interest rates. The current interest rate, for example, in the Farm Credit Corporation is 12.75 per cent. The pricing formula of the national marketing agencies in the poultry sector takes into consideration the increased costs related to interest charges. The farm storage programs for grains provide interest-free loans for farmers to get cash advances on grain in storage, and in this way through their farm organizations or marketing boards provide a degree of protection to the persons they represent.
The fluid milk pricing formula in some provinces relates to input costs as well. This also includes interest rates. Other commodities which do not have the same degree of sophistication as those I have mentioned are facing some hardship because they have not availed themselves of our various government programs to cushion the effects of these fluctuating rates. But the same producers have decided to ride out the vagaries of the marketplace and it has been by their own decisions that they are not availing themselves of the opportunities to bring about this stability of income.
When I see the forces at work in the commodity sector, particularly in the nation to the south of us, then I recognize that we in Canada, who utilize our federal programs, are not only more immune to violent fluctuations on the commodities future markets and the wild fluctuations in price that in a matter of two weeks saw, for example, the price of soybeans drop by 25 per cent. In Canada we have a better system which is not exposed to excess profiteering, gambling, or speculation on the food we eat. We can be proud of our producers in Canada, those dedicated and hardy individuals who provide us with the first essential of human life, the very food we eat. We have a wheat pricing system which protects our Canadian consumers from world price fluctuations in bread. In the future we will regard this not as a producer subsidy in times of low prices, but rather as a consumer subsidy in times of world peak prices. Certainly we must be concerned with the world grain shortage, but under this Canadian system our consumers will be protected.
We have our dairy products and a dairy policy which is the best in the world, which protects both producers and consumers against world price fluctuations. Our entire poultry sector is indexed to production costs, including eggs and poultry meats. These basic food items in the poultry sector are all cushioned on behalf of the producers and the consumers.
We should not let it go unrecorded that the time spent by a worker in Canada to earn various food items in selected world capitals is lower in Canada than it is in Washington, London, Tokyo, Stockholm, or the medium of 15 other cities in other countries. For example, the cost of a 21-item food basket in Canada is lower than that for the same basket in the United States, Australia, the United Kingdom, Spain, Italy, The Netherlands, West Germany or Japan.
In fact, the cost of a 21-item food basket in Canada is 143 per cent lower than that for the same basket in Japan. We

December 19, 1980
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have a system of stability in our food sector at the production level and, as a matter of fact, the consumer of Canada pays our farmers 29.8 cents per meal for food produced and consumed in Canada. This is what the farmer receives at the farm gate from Canadian consumers for food produced and consumed in Canada. 1 want to emphasize that our social programs are indexed and if those food prices go up, so does the income of the pensioners and those people in need.
Why is there a difference in the interest rates in Canada and the United States? We in Canada can be proud that our economy is not as closely based on material luxuries or as closely tied to the automotive industry which contributes to such a large segment of the U.S. economy. But that automotive industry became out of date with the times and not energy efficient. Because of this it became the victim of imports from other nations. We in Canada have stressed material necessities needed by Canadians and other nations in the world. We have both natural and human resources which can feed a hungry world in a time of need. We have a national energy policy which recognizes the need for food, giving food production and food processing top priority if energy allocations ever become necessary, along with the general health, welfare, and the defence of our nation.
That spread of almost 4 per cent in interest rates between Canada and the United States is indicative of the difference in our priorities, in our resources, and how we manage those resources.
Our national energy program would provide a further cushion against inflation, a cushion which will phase in energy costs over a period of time. At the end of 1984 it will be well below that of the Tory budget of 1979. For example, natural gas prices in 1984 will be 71 per cent lower than those in the Tory budget of 1979. No doubt the hon. member for St. John's West (Mr. Crosbie) forgot that the basic ingredient in many of our nitrogen fertilizers is natural gas.
If members of the opposition are so concerned about increases in food prices, what would have happened if nitrogen fertilizer prices went up by 71 per cent? What would have happened if our diesel fuel prices increased by the same extent as those in the Tory budget of 1979? I will tell you what would have happened on my farm, Mr. Speaker. Over that four-year period, 1981 to 1984, my diesel fuel costs would have increased by $8,200, and this same type of increase would have reflected across our entire food sector. Instead of the 15 per cent increase in food prices forecast for next year, it would have been far worse than that for 1980 and similarly for 1981. The 18 cents per gallon excise tax in the Tory budget was a tax on the very food we eat. Instead of an 11.2 per cent increase in inflation for the last month, the cost of living index would have increased by 15 per cent for 1980, and Lord knows what for 1981. I cannot imagine anyone, even in the opposition, being so hard-hearted as to have presented such a harsh budget as the one presented in December, 1979. They should have researched the harsh impact of their proposals, particularly in the food production sector. "Perhaps we should forgive them for they know not what they do".


Some hon. Members:: Oh, oh!


Ralph Ferguson: The people of Canada forgave, but they will not forget.
We have examined the October budget and the national energy package as well as their impact on the total economy. In contrast to other industrialized countries of the world, we are indeed fortunate.
Earlier 1 indicated that we have provided low-cost facilities for our senior citizens. If we consider projects such as this where we have transferred large amounts of funds to other levels of governments, both municipal and provincial, which have been mostly used to establish an acceptable level for national social services, it is clear that the Canadian central government's expenditures as a percentage of national output are not unusual in the developed world.
This debate on our current interest rates and the recent increase in the inflationary rate is not a result of mismanagement of our economy, but rather it is a direct result of world economic conditions, in particular those of our neighbours to the south. As Canadians, we are gradually but surely moving toward more control over our economic affairs. We intend to move to increase our total economic output in terms of exporting material necessities in the way of food and goods.
This House, sitting in Committee of the Whole last week, heard the Minister of Agriculture (Mr. Whelan) speak about Canagrex and the production of food for a hungry world. This program alone will provide jobs across our total economy. The spin-off effects will improve the lot of all Canadians. In addition to the creation of this organization, we are competitive in our exporting of manufactured goods, in spite of the fact that we have one of the highest standards of living of any nation in the world.
The debate tonight, Mr. Speaker, indicates that our budget is correct in applying a national energy policy that recognizes the need for equalization across the nation. The need for equalization of sharing is the basis of the foundation on which Canada has been built, but then we find that some members of society today have become servants of Beal, the god of money.
In spite of the fact that interest rates have risen today, our dollar has remained stable. I suggest that as the new administration takes office in the United States next month their economy, too, will stabilize and their impact on world economic instability will allow us to continue to build for the 1980s. In the meantime, we recognize that we have to scrutinize our economy in Canada, maintain an interest rate, which we have done, that is well below that of the United States. But above all, Mr. Speaker, we must not be panicked into measures which will worsen our inflation rate resulting in further hardship on our citizens and placing ourselves out of competition in world markets.
In conclusion, we have provided a cushion of insurance with our social policies. Our farm sector is one of the most stable of
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any nation in the world. We have a national energy policy that is realistic and non-inflationary. The Minister of State for Small Businesses (Mr. Lapointe) indicated that he is studying changes to the Small Businesses Loans Act to see if we could expand this legislation to cover costs of inventory for small business people. He is also studying the whole program of the small business sector, the study we refer to as the small business review, and we are cognizant of their current problems. We have amended the Bank Act to provide access to a broader range of financial resources, again bearing in mind the need of the business community.
It is in this context that 1 suggest to this House we have retained our place among the leaders of the industrialized nations of the world. If our policies are so wrong, why were there only 88 members of the opposition in the House on November 6 when our budget was passed? Where was the hon. member for St. John's West, and the Leader of the Opposition (Mr. Clark)? Why were they not in this House to vote against this budget if it was so wrong-


An hon. Member:: They were in Kitchener.


An hon. Member:: Where are all your ministers?


Ralph Ferguson: -as they tried to lead us to believe tonight? And now in this emergency debate, where are they? They spoke earlier, and then went home to bed.


Bob Rae: Where is MacEachen?


William James Kempling: Where is MacEachen right now?


Ralph Ferguson: I believe that if they are serious in their statements of the last few weeks, the people of Canada deserve to know where they were and why they were not here to vote on this budget which we brought in on October 28, which has shown the way for energy stability and security in Canada in the decade ahead.


Gordon Edward Taylor: Mr. Speaker, about the only thing that budget is going to do is destroy the country. The minister was criticizing our leader. At least our leader was here tonight. I do not see a member of their front rows and there are only six in the whole caboodle over there. Then he has the gall to stand up and say that our leader was not here. Our leader was here.


Ralph Ferguson: Mr. Speaker, I rise on a point of order. Hansard for November 6 indicates who was in the House for the vote. Their leader is not listed, and neither is the hon. member for St. John's West (Mr. Crosbie).


Gordon Edward Taylor: Let the television cameras parade along the front line opposite. Not a man there, or a woman! Put that in your pipe and smoke it! The wealthy Liberals can rationalize all they like, but it does not help the poor people of this country to pay their heating bills. They can talk about changing our priorities. All this means to many senior citizens is that
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they have to change from catfood to dogfood. How are they going to change their priorities? Ask the Primer Minister (Mr. Trudeau). It is okay for him with his million dollars to change his priorities. Let us talk to the common people who built this country and today are being told to change their priorities. They fought for this country as well. The only priorities left to change for many is to cut down more on their food.
Members opposite clap their hands when the Prime Minister talks about changing priorities. I wonder if they know what that means. The Liberal party is becoming a party of half truths, and that is giving them the benefit of the doubt. They are continually telling the people of this country things that are not right. I want to give one or two examples to illustrate this.
Every day they say that Alberta does not want to enter into an agreement. It is the Liberals who do not want an agreement. Alberta is ready and willing. If the Liberals do not know, I will tell them the agreement that was offered to the Prime Minister. He thought it was pretty good. After taking a night to think about it, he said he did not want an agreement. Yet they say Alberta will not agree.
If I were selling my farm and I said 1 would give you a price for the house and we can make a deal later on the land, would you sign the deal? Of course not. That is what the energy minister has been doing with the Alberta government, negotiating piece by piece. They know the Alberta government cannot accept one part without knowing what the other part will be.
The only time the Liberal government and the minister of energy offered a full package of negotiations was last June. He made sure it was so low that no government could accept it. Since then, there has not been a package offer. It has been done piece by piece. They tell the people of Canada they offered world prices for Fort McMurray oil, and Alberta would not accept it. That was a half truth. The federal government did not say what it would give for conventional oil. It would not say anything else.
If hon. members who back this government will support that, they will support anything. It is absolute nonsense to say the Alberta government should accept that type of offer piece by piece. Finally, Premier Lougheed of Alberta came up with a full package offer which he placed before the Prime Minister on July 25. I want to state some of what was in that offer to see whether members opposite, as reasonable Canadians, could refuse to accept it.
First, they did not start talking 75 per cent of the world price. Alberta did not even talk world price. It started with 65 per cent of the North American price, and that was to go on until 1984 when it would rise to 75 per cent of the North American price. That is what they offered, and the Prime Minister would not accept it. He is prepared to pay $38 for Arabian or Mexican oil, but will not pay Albertans half that amount. He turned it down.
Tonight the minister of energy talked about the 15 per cent we are paying. I do not know how much it is now that the

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Economic Conditions
Canadian dollar is sinking and interest rates are rising. However, that was not right. We are paying 25 per cent on our imported oil, and this will go up to 40 per cent, involving a cost of billions of dollars. The Prime Minister will do that for foreigners, but not for Canadians. 1 will speak about that later. It is all a plan by the Prime Minister. It is not happening by chance at all.
The second item was price. Premier Lougheed said they would finance the infrastructure of the oil plants up to $7 billion and employ people from all over Canada. He said they would buy trucks from Ontario, furniture from Quebec, and something else from the maritimes. He further said they would provide $2 billion, not out of federal money but Alberta money, to improve rail facilities in western Canada. The Prime Minister was not interested in that.
Premier Lougheed said they would provide equity and debt financing for the Q & M pipeline so that maritimers could switch from other fuels to natural gas. You would expect the Prime Minister to accept that. There is trouble financing the Q & M pipeline, but the Prime Minister would not go for that.
There was another point in the structure, an incentive choice east of the Alberta border. The Alberta government agreed to pay the cost of transporting the gas from Montreal to Quebec City, the total cost. However, the federal government said it would not share. All of this was offered to the Government of Canada.
The next offer was that there would be no increase in the royalty on the Gold Lake project. This meant that, as the world price went up, the Canadian government would have a lot of margin to get extra revenue, leaving room for the profits to be taxed. Premier Lougheed offered to do all of this for Canada, and the Prime Minister said, no deal. The Liberal members should ask their Prime Minister why he would not accept that offer. He tries to pretend to the people of Canada that Alberta does not want to deal. What an outfit trying to lead the Canadian people astray in that way!
I want to deal with another matter. What is the root of the problem? What is in the mind of the Prime Minister? I will tell you what is on his mind. First, he is leading Liberal MPs down the garden path for the ultimate kill. He is doing his utmost to establish a socialist republic in this country and the Liberal members follow him blindly. If he whistles, they jump. If he says jump, they say how high. They do not ask why. Those free enterprisers will not wake up before it is too late.
Second, they wonder why they have no seats west of Manitoba. It is because no one can believe the Prime Minister. He has fooled the people so many times, they can no longer believe him. How can you believe a man who, during the last war, pretended he was going to be a priest in order to avoid military service and fight against totalitarianism? That is what our Prime Minister did. Who would believe a man who could do a thing like that? Step by step he is leading us into a great socialist state.
What is the next thing he is going to do? He does not want an agreement. He is deliberately taking over the natural
resources of Alberta. He told the people of Ontario that they own the resources, the oil and gas, of Alberta, but he did not tell the people of Alberta that they own the gold of Ontario. He is trying to prepare people, and the Liberals say "yes, yes." What about his charter of rights? He left ownership out. That is one of the first steps toward a totalitarian state; do not own any property. Then you have the people right under your thumb because you own the land. He leaves it out of the charter and then he talks about Canadianization. What a joker! Canadianization; he is no more for Canadianization than is the man in the moon. What he means is nationalization.
If it is Canadianization, the people of Canada would have something. But, no, he takes Petro-Canada which is going to borrow the money from the United States, borrow American money to buy out American companies so they belong to the state. That is not Canadianization, that is nationalization. This is all heading toward a great socialized state. Yes, sir; he is discouraging private enterprise. In every possible way he is discouraging private enterprise. He is cutting down on our armed forces leaving us without adequate protection.
He brings in gun laws so people will not have any guns and so that people who like guns and like to hunt cannot even have a gun any more. They are treated like criminals.
He is now trying to impoverish the provinces, to make them dependent on the federal government. The government wants more and more so the provinces will have to come with their hats in hand and beg. When you are hungry you will give up your security. Look around the world. The people who lost their security are those who were left hungry. They finally got so hungry they gave up their security for food. Oh, yes, 1 can see what the Prime Minister is trying to do.
In respect of the export tax, the government is trying to fool the people too. The government has said it is not going to levy that any more. The government is going to give Alberta, B.C. and Saskatchewan a concession. Some concession! This government has simply changed the name. Who pays for it? The minister stood in this House and said "Well, we are going to have the American people pay it." What nonsense. How immature do the Liberals think the people of this country are? The Canadian people will pay it. The Americans will not pay one dime. It will come out of the Canadians' share. The Liberals say "Yes, yes," in their caucus; "yes, Mr. Mac-Eachen, Mr. Trudeau says so, so that is okay. That is okay. Tax the Canadians." They know very well the Americans are not going to pay one cent. This is all in the great plan.
Mr. Trudeau would like to make this country a republic. Maybe he would like to make it a French republic. He wants to make it a republic because he turned the French against the English right across the country. He has been a disgrace to the Canadians of French origin because the French people and the Canadian people got along fine. There was no division among us up until 1967 when Mr. Trudeau came on the scene. He divided the country between the French and the English. Now
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he is dividing it between east and west, trying to make the west hate the east and the east hate the west. No wonder he grins when they talk about people in the west forming for separation, wanting a change. He is dividing this country.
You know, if just 14 members on that side of the House would wake up and join, and I do not care, the NDP or the PC Party, or get in a corner by themselves as independents, if they come over here that would rid him of his majority. Like Prime Minister Pearson said, a Prime Minister who has a majority in the House of Commons and wants to be a dictator, has the best chance in the world under the Canadian system. The Prime Minister has a majority in the House of Commons and he is getting his own way. Perhaps when he came back in as Prime Minister the Liberals all said, "We will do anything you tell us, Mr. Trudeau, if you will just come back and lead us. We do not have a leader; we do not have a leader."
It was all engineered by Mr. Trudeau in the first place- defeat the government so he could come back in as the leader. It is all working out fine. It was a very good plan, but he is not fooling the people of Canada, not fooling them at all. The Minister of Energy, Mines and Resources (Mr. Lalonde) tonight told us about only a few people going across the line. He talked about more jobs. The member who just spoke from that side talked about more employment. Are we living in different countries? We have almost one million unemployed in this country. We have hundreds flocking to separation meetings in the west. Do you think those people are not mature? They are fed up with things. They even call their organization the "West-Fed".
We have been trying to talk sense into this government and to wake it up, but all its members do is smile. I think they are delighted because there is a possibility of separation in the west. Let me tell you something. There may be some people talking about separation, but it is going to take more than a dictator like Mr. Trudeau to drive me out of this country. I am a Canadian. I fought for this country as hundreds of people in the west did, and we are going to get a fair deal one way or the other. We are not going to be driven out by any dictator in this country.
When we talk about industries cutting back on capital, I wonder why the minister responsible for energy did not read some of the letters he has received. He read from newspaper clippings, but I know he has letters from a number of people who have told him they are cutting down their capital and their employment. They are gradually phasing out industry after industry. He did not read any of those letters. Let me refer to one sent to him just the other day. I happened to get a copy of it. Maybe it was a blind copy, I do not know, but it said that the writer, a Canadian company, an American affiliate, was going to establish a new factory in Grande Prairie to the extent of $4.2 million but intended to cut that down. I sent the Prime Minister a copy of that letter. 1 did not think Mr. Lalonde would, so I did. That company is cutting its investment in half. There are 15 people out of work already. Next year if that company cannot get a better deal and it does
Economic Conditions
not make a profit, it will have to cut down again and again. This is happening with company after company.
What is the answer to all this? The government is asking what it can do. It thinks the only thing it can do to handle inflation is raise the interest rate. 1 want to tell you that there is a better way, a free enterprise way. If you increase production you will help solve the problem. What inflation is, is too many dollars chasing too few goods. All we hear is that all we can do is cut down and make money harder to get. Why do we not work from the other end? We should build up and increase our production. Let us get production up. Let us bring production and demand closer together. In this way we will cut down on inflation far faster than in any other way. That is the free enterprise way, not the way that is being followed by the present government.
Free enterprise is the answer to all these things. This government is not practising free enterprise. As Prime Minister Trudeau, said "Viva el Castro". Does that indicate free enterprise? I suggest it does not a bit.
Some of the principles of free enterprise would not allow $6 billion going out of this country, would not allow people going to another country to invest their money, would not allow threats of nationalization. Money will not flow if the risk is higher than the reward. Free enterprise is built on competition.
The bloodstream of free enterprise is competition. You must have competition. Money will not flow when the risk is higher than the reward. There is nothing wrong with making a profit.
When you make a profit you have an incentive. That is how we got things going in Alberta under the free enterprise system. Now this government wants to take over that good thing. Why does it not encourage the same thing all across Canada-get free enterprise working? Hundreds and hundreds of shops should be established, each employing one, two, three or four people. We would then not have the situation we have in Canada today with more than one-half of all goods purchased in Canada processed in other countries. Let us get our own country working.
Second, we must increase our production if we want to lower inflation and if we want to increase wages. We have to increase production. Profit is the basis of capital investment which is needed to increase productivity. Profits are the basis, and this government should start to create a climate in which people can invest their money here instead of taking it out of the country. It should create a climate in which people can be free of capital gains taxes so that people can have some incentive to build, expand and enlarge their companies, and sell when they get too old to produce, so that younger men can.
The country is ruled by the policies and by the budget of this government. If the government would enact free enterprise principles, it could save this country. I challenge 14 members of the Liberal party to walk to this side of the House. Let us all force the Prime Minister to go back to free enterprise principles and save this country from socialization.


Some hon. Members:: Hear, hear!

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Economic Conditions


Ian Deans: Mr. Speaker, as I look back over a reasonably long career in politics, I think it is unfortunate to be making a speech starting at nine minutes to three in the morning.


John Horton McDermid: It is good for the soul.


Ian Deans: I am not sure it is good for the soul, or any other part of the body for that matter, but as I sat and listened to the debate, looked at the time, and thought of the comments of Madam Speaker this afternoon when she ruled that in fact this was a matter of urgent and pressing necessity, that there is a crisis in Canada and that a debate should take place, it struck me that it really is unfortunate that the government, recognizing that it is true that there is a serious problem confronting this country and the people of this country, could not have made time available to have this discussion during normal hours so that some members of the cabinet might have been able to come into the House and listen to the expressions of concern many members are putting on the record here this evening.
This is a sad day for this country because we have everything available here to make it the greatest country in the world. There is nothing we lack. We have energy in sufficient quantity to meet our needs. We have a manufacturing sector which, if given an opportunity, is capable of providing employment and all the goods and services we need. We can grow our own food. We have an educational system second to none. 1 cannot think of a single product line we cannot produce here in one way or another, yet here we are debating in the middle of the night the serious economic problems which confront us. 1 think that is ludicrous, and 1 do not understand why it is happening. All 1 know for sure is that what is happening to this country must be stopped. There must be found a way to bring what is happening in this country to an end.
1 listened with interest to my Conservative colleague, the hon. member for Bow River (Mr. Taylor). I respect his opinion, although I must say that he overstates his case just a little bit when he makes the point about the reason why Alberta is great at this point in time. 1 think what he said was that Alberta got going as a result of the free enterprise system.
I think most of us realize that the reason Alberta is enjoying what it is now enjoying is that the OPEC cartel decided to raise the price of oil. Alberta happened to have oil, and it was therefore able to take advantage-to this point not yet unfairly-of the increase for which it quite truthfully did no more than it had been doing prior to the OPEC cartel's coming into being.


David Kilgour: Leave Alberta out of it. That is the government over there.


Ian Deans: I just want to respond to the point; that is all. The fact is that much of what is said in this regard is simply not factual.
Let us take a look at what has happened. We have a country in which everything is available, yet we see it in disarray. We
look around and find that the problems which confront us are immense. Why are they immense? They are immense because of years of mismanagement. The only people who can be held responsible for that are those people who have been in power over those years. The Liberal party has been the Government of Canada for almost the entire post-war period. It was during that period that the economy should have and could have developed. It was during that period that the ground work could have and should have been laid. It was during that period that we were sold out, and I think that is the fundamental question which confronts us.
Let us take a look at one other problem confronting the country at the moment. Canada's gross national product has registered a 1.7 per cent negative growth in the first half of 1980. Industrial production has declined in four out of the last five quarters and by the end of this month will have declined in five out of the last six quarters. In the second quarter of this year industrial production was down 3.2 per cent from the autumn of 1979. Seventy per cent of the decline in goods producing industries this year has taken place in the manufacturing sector. In the second quarter there was a 9 per cent decline in auto production, a 21 per cent decline in auto parts production, a 3 per cent decline in pulp and paper output, an 18.6 per cent decline in housing starts, a 5.1 per cent decline in durable manufactured goods, and an 11 per cent decline in the construction industry from June of 1979 until the end of the second quarter of 1980.
What we are seeing is a decline in every single sector. When we start looking at that, we begin to realize that with that kind of decline comes unemployment. What have we seen? We have seen some 250,000 people being handed their pink slips and being laid off since last fall. That is between October of last year and October of this year. People have been laid off. Jobs have disappeared. People are no longer able to find jobs and pursue occupations similar to the occupations they had previously. Canada's unemployment is the highest in the industrialized world.
The problem in this country is that for some reason or other we have abdicated political responsibility. The government has failed to recognize that it cannot hand over the levers of economic power to anyone else. Those levers must be manoeuvred, pulled and managed by the government because the government has the only complete view of all sectors, and therefore the government has to co-ordinate the effort, provide the leadership and direction necessary, and encourage and provide people with an incentive to rise above mediocrity and reach a level of acceptance in terms of manufacturing and using our resources.
Let us take a look at what really affects the average individual. We are not talking about economic theory. Economy theory may well be a good topic for discussion in a university lecture room, or it might be nice to have a few ministers of finance get together and chat once in a while about various and sundry theories which may or may not work, but what we are talking about are Canadian families which are unable to make ends meet. We are talking about Canadian
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families which are being met with exorbitant increases in almost every area in which they must spend money. We are talking about Canadian families whose working members are faced with lay-offs. We are talking about Canadian families which cannot afford to renew their mortgages because of exorbitant interest rates. We are talking about Canadian families which expect from their government that an attempt will be made to put right the ills which the government through its neglect, has created.
I want to point out to hon. members, who may not have taken the time to realize the impact of what is going on, that the Prime Minister says-and I think he will rue these words for the rest of his life-that people will have to set new priorities, do without, tighten their belts.
Let me tell you that the average weekly wage in Canada today is almost $318 a week, which works out on a yearly basis to $16,536. That represents a disposable income of about $14,000, with any luck at all. If that person attempts to buy a home anywhere in the country today, he will have to assume a mortgage of about $50,000. If he went to the Bank of Montreal tomorrow morning and attempted to amortize that mortgage over the next one, two or three years, he would be told that the interest rate he would have to pay would be 18.5 per cent, which would work out to $752 a month, or $9,024 a year. That says something about where the average Canadian working in an average job and earning an average income fits within the scheme of things in terms of owning a home. I want to personalize this a bit by saying that the three bedroom house which I bought in 1962, cost $14,880. I was then earning $5,200 a year, and there I was with three little kids; my principal and interest was $88.60 a month and the mortgage interest rate was 6.5 per cent. That house on the market today, the same house, would cost just over $60,000.


John Leslie Evans: You would not take it, would you?


Ian Deans: I am not talking about my house. I am saying that the same house would cost just over $60,000. If my son were to work in the same job in which I worked in 1962 when 1 bought that house, he would be earning $21,000 a year and he would not qualify for the mortgage. That is what has happened to the economy of this country under successive Liberal governments and that is why this is an emergency. What we have seen happen is a deterioration of the entire structure which we had in place to allow people to realize the dream which most have, that is, to be able to own their own home, to pay it off some day, to retire and live there, and to be able to pay for it out of their income. That is not trumped up, Mr. Speaker, made up, fanciful. That is reality and that is what this government does not seem to understand about what is happening to Canadians. The opportunities for Canadians to do the kinds of things they were able to do just 18 years ago has virtually been taken away. Now we find that even if a man or a woman were to get a job paying 50 per cent above the national average, they would not qualify for the purchase of a house which could have been purchased by a person earning at the national
Economic Conditions
average 18 years ago. That is what is wrong with your economic theories over there-they are a lot of nonsense. They do not work, and we have an obligation to those concerned. This is what Parliament is all about. You cannot turn around and say that this is the responsibility of the governor of the Bank of Canada. Damn it, it is the responsibility of the Parliament of Canada.


Some hon. Members:: Hear, hear!


Ian Deans: I want to say something to members opposite about this. You cannot possibly fight inflation with high interest rates because high interest rates are the primary cause of inflation. The fact that manufacturers cannot afford to borrow at the high interest rates which are now being charged to carry their inventories causes inflation because it forces the prices up and results in bankruptcies. The fact that consumers cannot buy the products which are being manufactured because high interest rates put the price beyond their capacity to pay reduces productivity. If you reduce productivity, then, quite obviously, you have to lay people off. And if you lay people off and they are not working, they cannot buy. And if they cannot buy, damn it, anybody can see that that reduces productivity even further. Surely it makes sense to anyone with even half a brain-and I am sure that somebody here has half a brain-that we will have to start the recovery process by developing in Canada a domestic economy which will enable people to purchase the goods that they themselves manufacture.
1 do not know if members realize what has happened all across this country. I have spoken many times in this House about the automobile industry. It must be boring you half to death by now, Mr. Speaker. Yet if you look at it, you find that it is really the backbone of Ontario's economy. It provides more employment than any other industry in the whole of Ontario, yet it is on the decline day after day. I want to tell you about the prices. What has happened in the auto industry? On December 7, Chrysler in Windsor laid off 3,000 people. By January 5, Ford will have laid off another 3,100 people, and part of the reason, if not the entire reason, is that people cannot afford to buy the cars being manufactured because the interest rates charged put them out of reach of the average individual. I suggest to this government that it is time we set an independent path. I realize that some of the things we offer as short-term assistance are costly, but it is short term. I also realize that we must have in place some long-term plans for the development of the industrial base of Canada. We can only do that if we sustain the domestic productive capacity and if we can put into the domestic consuming economy sufficient money to raise the level of productivity in order to gain the efficiencies of scale which enable our industry to take advantage of the lower dollar and sell in world markets. That is the way to find the long-term answer to the very difficult problems which confront us now and which will recur. In the short run, we must stimulate the economy. We cannot afford not to, because, while some government members may say that stimulating the economy costs money, I suggest that failure to

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Economic Conditions
stimulate the economy will cost at least as much because more people will be unemployed and fewer tax dollars will be raised. In the final analysis, the cost of not stimulating the economy will be higher than the cost of stimulating it.
1 want to say finally, with regard to the setting of interest rates, that one of the things which has concerned me for a while has been a weekly setting of interest rates. I am absolutely convinced that it undermines the confidence of people in the country. When you set rates every Thursday, no business is done on Friday. By Tuesday, the United States will have indicated an upward surge and no one does business from Tuesday to Thursday waiting for the Bank of Canada to follow. We end up with an almost paralysed economic condition. I want to suggest that we change that system, that we assume political responsibility and that we stop pretending it is other people's faults. We should get down to dealing with it in the House of Commons.


David P. Smith: Mr. Speaker, I can think of other places where I would rather be at three o'clock in the morning, but 1 believe members on this side of the House need to bring the debate back to reality.
It is an important issue which affects all Canadians. I have been watching interest rates very carefully because my mortgage comes due next summer. I think it is a good idea that we should participate in such a debate as this, but in my view members of the opposition have done a disservice for a number of reasons which I should like to spell out.
First, I think members of the opposition have been panicky and preaching doom and gloom. One would think from their speeches that the Canadian economy was on the verge of collapse and that anyone with any brains would flee Canada immediately, whereas, if one listened to the facts espoused by members of this side, which I do not need to repeat, one would realize that our record is relatively good. Our economy is in good shape. We should be showing a little confidence in the country rather than panicking as has been the case on the other side of the House tonight.
Second, it is rather unfortunate that members on the other side have ignored reality. One would think we lived on an island and that Canada could operate without any regard for its neighbours to the south or for the rest of the world. The fact is that we have maintained a rate of interest which is 4 per cent lower than that of the United States. That is really commendable. Were any plugs given for that? No, none at all. It was ignored; apparently it did not matter.
During the question period when the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) was asked about interest rates, he made reference to the fact that there was a 4 per cent differential between us and the Americans. What did we hear from about five Tory frontbenchers? They said, "So what", as if it did not matter, as if there were no correlation. If that is the understanding of economics we can expect from the other side of the House, it is no wonder we are not receiving any enlightenment from them during this debate.
My third point is that the solutions are not easy. We hear that the Bank of Canada should freeze interest rates or lower them. Who will pay for that? At least the NDP is consistent. It never seems to worry too much about who will pay. 1 cannot really say the same for the Tories, the great monetarists, the great defenders of private enterprise, the great believers in the free market the great believers in supply and demand. Where they are on this issue 1 do not know. Do they want us to interfere? Who will pay for it? How will it be done? We have not heard any solution tonight.
I listened with great interest to the speech of the hon. member for Bow River (Mr. Taylor). He is a nice man; I enjoy talking with him. 1 thought this was supposed to be a debate on interest rates. What did we hear? In the first half of his speech he urged that we should approve the agreement on oil pricing which the province of Alberta wants. In his view it is a very reasonable agreement. What will be the end result of that? It will mean more money for Alberta and more money for the multinationals. 1 do not propose to get into a debate concerning multinationals right now. Of course there is a difference of opinion between us on that subject. But will an agreement on oil pricing be the answer? Will it stop prices from rising? Will it stop inflation? Will it mean that interest rates will not continue rising? Of course not.


Mr. Fraser:: Give it to the Arabs, give it to the South Americans, give it to the Mexicans. You pay other people twice as much as Canadians.


David P. Smith: The second half of the member's speech was to the effect that somehow we are being led down the garden path of socialism, that the Prime Minister (Mr. Trudeau) and all of us over here are socialists.


Some hon. Members:: Hear, hear!


David P. Smith: The Prime Minister has been in power since 1968. If he is a socialist, he is doing a crummy job. He has been in for 12 years, yet we have the CPR, banks, trust companies, supermarkets, department stores and small business. I have not heard of any of them being nationalized. We still have the multinational oil companies, yet members opposite say we are socialists. They should get serious.


John Horton McDermid: And you have 400 new Crown corporations.


David P. Smith: Hon. members opposite are worked up about Petro-Canada. We want to strengthen Petro-Canada. I feel good about that. Where were they on Petro-Canada in the last election? The Tory position on Petro-Canada at that time was a revolving door, because it changed every week. 1 do not know where they stood on that; but if we are socialists over here, we are doing a crummy job.


John Allen Fraser: Where were you on the price of foreign oil?


David P. Smith: When the hon. member for Vancouver South (Mr. Fraser) wants to speak, I will let him.
December 19, 1980


John Allen Fraser: It is not up to you. You are prepared to give foreigners twice as much as you are prepared to give Canadians.


David P. Smith: I am getting somewhat weary. I hope the hon. member would show some manners. I understand that I will be co-chairing a committee with him on Soviet Jewry. I feel strongly about that issue. I hope we will be able to work together on it, but he will not help the situation by yelling at me. I will not yell at him, and I hope he shows me the same courtesy.


John Allen Fraser: I am just asking some questions.


David P. Smith: I am weary of the sermons about socialism. They are doing a great disservice to Canadians. I believe in social justice within a free enterprise system, and I feel right at home in my party. If I wanted to go the socialist route, I would be over there with my silver spoon friends, but I am on this side and feel at home.
1 heard the speech of the hon. member for Hamilton Mountain (Mr. Deans). I enjoy listening to him. He is great theatre, but he is not very enlightened. We heard all about the problems, but we heard no solutions. I listened to his remarks very carefully, and all he talked about is Canada pursuing an independent path. That is what we are doing. The hon. member should read "The National Energy Program". He might get quite excited about it. If he read it, he would realize that that is what we are trying to do. I feel good about it.
What have we heard tonight? From the Tories we have heard that we are in bed with the NDP. From the NDP we have heard that we are in bed with the Tories. Who are we in bed with?


John Horton McDermid: You are in bed with the Arabs.


David P. Smith: The truth is that we are probably in the middle, and I feel very comfortable about being in the middle because the middle is the average and this party is a party of average Canadians and this government is a government for average Canadians. We have heard nothing tonight but a lot of hysteria and paranoia.
Canadians should conclude from this debate: first, they should not panic; second, they should not ignore reality; third, they should not believe that the solutions are simple. We should show some confidence in the country. We should recognize that this is a cycle which will turn down. We must show confidence in the security and potential of this country and its future.


Some hon. Members:: Hear, hear!


Frank Oberle: Good morning, Mr. Speaker, it is 3.20 o'clock. If my people back home are watching, I wonder what they think we are doing here. Personally I have the feeling that we are in an insane asylum. I would like to relate a story which most members have probably heard. This story is about a fellow who was in an asylum. He thinks he is a mouse. He has been in the asylum for some time
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and his doctors have been trying to convince him that he is really not a mouse and he should get out in order to get along in the world. He did that a few times but he always came back to the asylum. On this particular day the doctor said to him: "You are not a mouse." He said: "Yes, doctor, I know. You know I am not a mouse and I know I am not a mouse. But what about all those cats out there?"
Now, the Liberal backbenchers have been going home, and they are being told by their constituents: Look, things are bad. You guys told us in February that interest rates are going down, unemployment is going down and inflation is going down and not to believe those bad Conservatives, they were all wrong. So the Liberals come running back in and see Mr. Trudeau in the lobby. They say to him: God, it is bad out there. We are all going to be defeated in the next election. He says: Look, guys, you know things are well out there and I know things are well out there. They say to him: Yes, but what about all those silly people out there who don't know that? And they are standing here tonight repeating all this nonsense that they told the people of Canada last February, that there are easy solutions to complex problems.
When I go home I see more people expressing their frustrations. They feel deceived by a government in which they should have trust. They openly express their feelings of alienation, and in western Canada they express it in terms of separation. What is this all about? People have every reason to feel deceived and cheated. They have been lied to. There is no question about that. People know that. They were lied to in 1974 and in 1979, and now they are being lied to in 1980. On this side of the House we have an old saying which goes: The lie travels half way around the world before the truth gets its running shoes on. We have told the people the truth on all occasions. Last year we told them things could not go on like this. And sure enough, they didn't. They got worse.
What has happened in this country is unbelievable. The Prime Minister (Mr. Trudeau) has all his cards on the table. Now, he has never lied. He has always told the people the truth, except that they didn't believe him. They did not believe him when he told them to imagine themselves sitting on the deck of a ship looking at the horizon with him in the steering house. He feels the waves and the current pressing against the rudder. He told them the only thing they would have to watch out for was disembarking on an island which they had not been sailing for. Sir, I think we are close to land and close to disembarking some place. But the place this man has steered us to is totally alien and strange to us. It is a place to which we really did not think we were sailing.
Here we have a budget and an energy statement which have an incredibly devastating effect on the economy and on the lives of every individual in this country. It is devastating to the lives of people who want to build a house, begin a family, fulfil a dream. That dream is turning into a nightmare. The minister and his friends sit over there and say that everything is all right, not to worry about things. In 1973 we were a net

December 19, 1980
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exporter of energy. We were one of the energy exporting nations. And to compare ourselves today with all the poor countries like Japan, Germany, Sweden and France is not a good comparison. These people are truly vulnerable. Here we sit, the richest country in the world. We are as rich as the Soviet Union, except that in the Soviet Union the people own all the resources, so they are a little richer than we are, at least the socialists to my left think so. The lever of their economy is managed by the government, just as this government would like ours to be. But here we are, one of the richest countries in the world, and we could be energy self-sufficient. But what do we talk about at 3.30 in the morning? Energy.
In the countries I have mentioned, the parliaments there do not talk about energy. They know they have the gun to their head. They pay the price and pass it on to the consumer-$3, $4, $5 for a gallon of gasoline is what they pay in France and Britain, all over Europe. They pay the price. There is no easy solution. In Canada we seem to think there is. The Prime Minister seems to think we can fool all of the people all of the time. He brought in something which was little different than the bitter pill we proposed in our energy package in February. He disguised all his intentions. For instance, there were four types of gasoline taxes which were imposed in this package. The Prime Minister tells us it will save something in the order of $4 billion compared to the Crosbie budget. That is nonsense. The Crosbie budget provided for an increase of 18 cents. Everyone in Canada still remembers that 18-cent excise tax. That is what broke the back of the Conservatives-they came out and said it would be an 18-cent tax. The price of gasoline at the pumps had increased by 42 cents. That increase occurred before they brought down their budget.
In western Canada we are pleased with this energy package since it is designed to take away from the rich and give to the poor. It is designed along the lines of the Robin Hood principles which the NDP like so much. It is rather like the old Churchill doctrine in which the inherent vice of capitalism and free enterprise is the unequal distribution of blessings and the inherent virtue of socialism is the equal distribution of misery. As long as we all freeze it is not so bad. As long as we are all poor it is not so bad. As long as none of us can build a house it is not so bad; we can all live in igloos.
There is a great obsession at the present time to take away from the rich cats out west and redistribute those riches throughout the country. There is no regard paid to who created the wealth in the first place, nor to how that process is to be sustained. My colleagues and I from British Columbia gathered thousands of names on petitions which we brought to the House. We said that the western provinces of British Columbia and Alberta cannot live with an excise tax. The social engineers across the way said: My God, we really have the people upset. We had better not bring in an excise tax. So they locked up the press at eleven o'clock in the morning together with all the energy critics. They showed them the budget and the energy statement. That day the headlines read: Government forgoes excise tax. Sure enough, the minister walked in here at eight o'clock on that fateful night, the night
on which the final nail was driven into the coffin, and he said: It was against our better judgment, but we didn t impose an excise tax. Instead, we have imposed a consumer tax. The tax will be imposed on every thousand cubic feet of natural gas and it will amount to 30 cents. In fairness, we must pass the consumer tax on to the United States.
Mr. Speaker, we all know that in some way we are tied to what happens in the United States, economically and socially. But I did not know until the night of the budget that the Canadian government was in a position to impose a tax upon the consumers of the United States. That is a new one. There are other new taxes in here which will be tested in the courts. That tax was really a unique one. There is quite a bit of confusion down in the United States, because they are between presidents; maybe they didn't notice it. That lie had all the members in the press gallery actually believing what they were told. They were all locked up over in the railway station. They really believed this intelligent piece of deception. We must be a little smarter.
Then there is the 8 per cent petroleum revenue tax which is not a tax on profits and investment or anything else, but a tax which is taken right off the top. Every dollar loses 8 per cent to Ottawa. Then there are the Canadian ownership tax and the 80-cent a barrel refinery tax. The Canadian ownership tax is an unknown until certain things happen. The underlying principles in the government's energy package are very laudable. We will achieve a greater degree of Canadian control and ownership. But that must be analysed more thoroughly because, to the hon. members opposite, Canadian control means government control, and there is a difference.
We in western Canada have no problem seeing the difference because there is a company out there called BCRIC, a B.C. corporation through which the government has bought up resource companies and started some new enterprises and this and that. It has given shares to all the people in British Columbia and those shares are also being marketed on the stock market throughout the country and being purchased by Canadians.
Then there is the Petro-Canada story.


Mr. Kristiansen:: Tell us the story.


Frank Oberle: Those fine fellows to my left ride on the left wings of angels and they are soaring tonight. Then there is the PetroCan version of government ownership where the individual has no control. I became rather fed up with BCRIC the other day because it pulled some kind of stunt. It bought up Kaiser Coal. Some of the politicians received advance warnings because they had their hands in the pork barrel, and hon. members opposite would know all about that. The shares dropped from $9 to $6. I did not like the way they were managing the company. I purchased some BCRIC shares for myself and my children thinking it was an investment in the country and an opportunity to grow with its future. When I
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learned of this incident I sold my shares and I do not want any part of BCRIC any longer.
I am in a better position than any of my friends and colleagues to know how Petro-Canada operates because it has its only refinery in my constituency in the town of Taylor, British Columbia. In the very short time it has been in business I have already received phone calls and letters from people who drill, drive, repair, weld and supply Petro-Canada who cannot get paid.
I know of one company which has not been paid for five months. I have had people who have used Petro-Canada service stations phone me, their member of Parliament, because they were cheated at the service station. You blink your eyes, Mr. Speaker. It is the same kind of letter which you receive when there is something wrong in the Post Office, because you are the only person to whom the people can go. The bureaucrats do not listen.
The PetroCan people, in the very short time they have been in business, have become bureaucrats. All the good geologists and businessmen who want to get out there, participate and share in the excitement of the oil patch have gone to work for private sector companies and all the nincompoops and others have gone to work for the bureaucracy in Petro-Canada and it is already beginning to show. They have bought a computer to do the payroll and other functions, and the damned thing does not spit out the right information so nobody gets paid. It is the same type of computer as they bought to run the Post Office at one time.
I cannot sell my Petro-Canada shares. I am stuck with the damned things. I sold my BCRIC shares, but 1 cannot sell those damned Petro-Canada shares. I am locked in, I am an owner and a shareholder. I suppose the people in Ottawa Centre are happy with their Petro-Canada shares, but they can just wait until this insidious plot which is going on comes to light.
There are two things which are happening in the government's program-energy self-sufficiency by 1990 and 50 per cent ownership of the industry. Their priorities are in the 50 per cent ownership proposal, and I can tell you what will happen. If you or I or both of us did it we would be looking out from behind bars. What is going on in this country right now is a monumental stock fraud. The government is chasing the oil companies out of the country and driving down the stocks of oil companies. The Canadian companies will be leaving. The multinational companies have no place to go so they will stay here and their stocks will fall. Rockefeller will not be hurt but the poor little shareholder, the widow who has put a few of her bucks, when the old man died, into a blue chip into the oil companies, will be hurt.
When the stocks are down enough, Petro-Canada and the government, the Canadian owners, will move in and gobble them up. I suppose I should be happy about that because I am a shareholder. I am buying Imperial Oil, Texaco and Gulf Oil shares cheaply. But I do not feel any happiness over the situation. I am very much afraid because, as I have said, the cards are on the table.
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It does not only show in the energy package and in the budget, but it shows over in the room where the constitution is being discussed. We are entrenching all the freedoms, the great cardinal principles of democracy, but the provision that was in the Diefenbaker constitution which says that one should enjoy and be allowed to own property is no longer in the constitution. So enterprise on a private or capitalist basis is out the window.
In effect, Canada is closing its borders and we are becoming energy nationalists and economic nationalists. We will be an island unto ourselves. Let me tell hon. members what the NDP thinks it would like to do. Like the Liberals, it wants to achieve energy self-sufficiency, but it will cost $300 billion over the ten-year period to achieve that goal. Do the taxpayers of Canada have that kind of money? Of course, they do not. But they will run down to New York to Mr. Rockefeller who owns the Chase Manhattan Bank and Standard of New Jersey. They will sell their soul to Rockefeller in New York in order to buy an oil company in Canada.
In so doing they think they are achieving economic nationalism. I projected myself ahead to the year 2020 when Canada with its borders closed will manufacture all its own goods and services, trade with no country and be the only country in the world with any oil. Canada will have energy while the rest of the world has frozen and starved to death. Can you picture yourself, Mr. Speaker, in that kind of situation? No, well, I cannot either. It is hard to picture the whole world except Canada frozen to death. We may be sitting with our oil by the year 2020, but the rest of the world will be driving its industrial machinery with solar power, hydrogen and so on.
By throwing these multinationals and private businesses and the ingenuity which is inherent there out of our country, we close ourselves off from all of those new, exciting things which are about to happen. There is nothing that spells doom and gloom, but we are closing ourselves off from the rest of the world, and the government thinks this is actually possible.
It is now 20 minutes to four, Mr. Speaker, and you are rising to your feet. I wish I had until six o'clock, but I see other members who are anxious to take the floor. I would like to hear a little more of the doctrine of the left wing angels over there. I am truly sick and afraid for my country and the people whom I represent in the producing end of the country and in small businesses which service the oil sector and who are going broke by the dozen right now because of the government. The longer the backbenchers support that insane crowd over there on the front bench, the more they will be looked upon as mice in an insane asylum. Sooner or later someone will find out the truth, and when that happens the people will come to their senses and kick them out.


Mr. Jim Fulton (Skeena):: Mr. Speaker, first I would like to put a couple of quotes on the record. I take this debate a little more seriously than the previous speaker, but I have some quotes from "Politics and the English Language" by George

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Orwell which I think are very suitable at this point in this debate. The first one reads:
Above all, we cannot play ducks and drakes with a native battery of idioms which prescribes such egregious collocations of vocables as the basic put up with for tolerate or put at a loss for bewilder.
This was written by Professor Lancelot Hogben.
The second quote which is just about as relevant as to the speech we have just heard reads as follows:
The great enemy of clear language is insincerity. When there is a gap between one's real and one's declared aims, one turns as it were instinctively to long words and exhausted idioms like a cuttlefish squirting out ink. In our age there is no such thing as "keeping out of politics". All issues are political issues and politics itself is a mass of lies, evasions, folly, hatred and schizophrenia.


John Horton McDermid: That is a good description of the Liberal party.


James Ross Fulton: 1 do not mean to be too hard on the hon. member from Peace River. I know him quite well as my neighbouring member in northern British Columbia. But I have a couple of quotes here from upstanding Liberals. The first is a question posed by the present Minister of Employment and Immigration (Mr. Axworthy). As reported in Hansard for October 25, 1979, at page 592 we find the following:
Mr. Speaker, my question is also for the Minister of Finance. On October 18, 1978, as reported at page 238 of Hansard, when in opposition the minister said: "These people are being crucified with an 1116 per cent mortgage rate- Would the minister make the judgment now that, as a result of his policies and his government's policies we have the mortgage rate going up to l4'/2 per cent, the people of Canada are not being crucified but are being drawn and quartered by an unmerciful government that no longer has a care for those ordinary people? Does he realize the housing industry is in severe recession;-
And on he goes. That is why he was in opposition. The Minister for Industry, Trade and Commerce (Mr. Gray) was quoted earlier this evening but I think it is important to have that quote on the record a number of times. As this government sits, it will hear it many more times. Being interviewed, the minister was asked by Mr. Shulman:
Shulman: What would you do as a government about interest rates, would you lower interest rates?
Gray: Yes, I think interest rates should be lower than they are now. Shulman: Yes, I agree they should be lower, would you lower interest rates? Gray: Yes, 1 would.
Shulman: And if the interest rates are not lowered after the election, I think you are going to win it, would you be prepared to resign your seat if the government doesn't carry through on that policy?
Gray: Yes, I would.
I think those quotes say it all. But in all seriousness, I come from a riding where the main industries are fishing, mining, logging, agriculture, smelting and pulp. I was previously employed as a probation and parole officer and 1 dealt with crime on the streets in my riding. It is time more members in opposition dealt with what I view now as criminal negligence as it relates to the economy.
I do not think we look often enough at the serious cumulative impact of interest rates in such industries as fishing, logging and agriculture. For example, a fisherman does not just have a mortgage on his home; he has a mortgage on his boat, he has a loan on his equipment, he has a loan on his car,
and as interest rates skyrocket, now over 20 per cent, the cumulative impact of all of those loans is devastating. This is particularly so as we see more and more restrictions on fihermen as to where he can fish, because fish are being given away to the Americans at either ends of our zones and the crimp is coming seriously home to rest. The same is true in the logging industry. The independent truck loggers in my riding no longer have the much needed relief from excise tax. That has been dumped on them as well. In my riding alone it is costing hundreds of thousands of dollars.
Other members have touched on the serious problems in the agricultural industry with relation to skyrocketing costs of high interest rates for seed and equipment. Canada today perches on the edge of a recurring disaster, and the Liberals across the floor seem unable to comprehend the depths of it. The dollar has plunged to levels seen only in the 1930s. Interest rates today at 17.36 per cent are the highest in history. I should point out that was yesterday. I understand today they will climb again. The purchasing value of the dollar is only half what it was five years ago. The cost of living, viewed through the CPI, is up 11.2 per cent over a year ago.
What of the budget of a month and a half ago which predicted a 9.7 per cent increase for 1980? That increase is likely to break 10 per cent or 10.1 per cent. What trust can the average Canadian have with such inaccuracy?


David P. Smith: Have faith.


James Ross Fulton: What does all this mean to Canadians? I would like to relate how this economic emergency relates to men, women and families in my riding. Many of the figures are drawn from national statistics but the cumulative impact on fishermen, as I have pointed out, relates not only to their boat loans and equipment, but to nets, cars, homes and so on. The same applies to almost all of the resource and industrial working people in my riding.
First, let us look at the cost of housing. Vancancy rates, for example, in Prince Rupert, have hovered close to zero for months. Starts are down nationally by 20 per cent, and the situation is worse than that in the British Columbia northwest. What does that mean in real and human terms? It is something a lot of members in this House have tended to pass by. It is easy to talk all night about facts and figures and sort of shoot them around in an intellectual debate, but the real human terms are those on which I want to touch now.
What does it mean when the market squeezes from both ends, where no vacancies bring heavy competition not only for rentals but for purchases as well? Naturally, up go the rates for both. Ordinarily this would encourage housing starts. In Canada's history, that has been the case. However, with the mortgage rates going up at the same time, it has put an end to the dream of many families and also to the plans of most builders. The combined skyrocketing housing costs, with prime rates of over 17 per cent today, make the dream for almost all families in my riding impossible.
Let us look at the facts. First, let me ask a question of those responsible for the present policy; for those unaware 1 am
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referring to the Liberals across the floor. What kind of a loan shark in Canada in November, 1980, would have to be paid 535,318 in interest to pay off $1,521.80 in principal? That is roughly $20 for every $1 principal. Perhaps one of the Liberal members across the way would know what kind of a loan shark that is, although they seem to be totally unaware, which demonstrates the validity and the real emergency of this debate. These loan sharks are the banks, the trust and loan companies across Canada. During the first five years of a $50,000 25-year mortgage at 14.5 per cent, that is precisely what happened. Those loan shark figures are skyrocketing now.
Housing throughout my riding varies both in value and in style. What does not vary is the impact of rising rates. The mortgage must be paid, so the money comes from other things. Most families have to give up on clothing, vehicle expenses, food, dental treatment and toys for their children. The list goes on. The comment made by the Prime Minister (Mr. Trudeau) a few days ago that Canadians simply have to reorganize their priorities in terms of their dinner table and what they supply to their children is really a very callous and shallow attitude to take toward anyone in this country.
Across Canada this year over 300,000 families will renew old low-cost mortgages for Liberal high-cost ones. Well over 10 per cent of those families, close to 32,000, will be renewing mortgages. They will have to pay in excess of 30 per cent of their income on housing because of these new rates. The Minister of Finance probably pays less than 10 per cent of his income, if he pays any at all, or if he has any mortgage left to pay. On a $50,000 mortgage in Terrace at today's rate, a 25-year term payment will be over $750 a month. And what can we compare that figure to? As my colleague the hon. member for Hamilton-Mountain (Mr. Deans) pointed out, the average weekly income is only $318 across Canada today. The average worker in my riding with a $50,000 mortgage would pay out over 50 per cent of his or her income on housing, on the mortgage alone, to say nothing of heating, repairs, light, water and taxes. In British Columbia, the annual minimum wage income is now only $6,200. Social assistance for a family of four is now $9,100. Neither family, either working at the minimum or on social assistance, could live in a $50,000 home and neither family today could live in a $25,000 home. I challenge Liberal members to produce for me somewhere in Ottawa a $25,000 home.
For families renewing this year, the increase is likely to be about 56 per cent. That is 300,000 families. What does this mean to fishermen, loggers, and small businesses? Again, cumulative interest rate impacts are difficult to assess. Layoffs and bankruptcies are only signals we can look at. Many of these families borrow from within their own families or find other means of staying on their feet.
In Skeena, these national figures pale at the regional reality. In Cassiar-and I made a point of telephoning after midnight to confirm this with one of my constituents-gasoline today is
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selling at $1.74 a gallon. That is something we should reflect on when filling our tanks in Ottawa. A trip to Watson Lake, the nearest town for groceries and an outing, is $40 return on the bus, an hour and a half ride. A one-way flight from Prince Rupert to Sandspit on a Goose is over $50. I do not relate that to the Liberal ads.
Do we need to ask for a made-in-Canada policy, or is that group over there to be forced into it by social not economic collapse alone? I am most serious in raising the social issue as being one equally as complex and vital as the economic discussions we have had from both sides of the House tonight.
There have been almost 20,000 personal bankruptcies in Canada this year and over 200,000 Canadians laid off. As an earlier speaker pointed out, if we look at the October to October statistics, a quarter of a million Canadians have been laid off. There have been over 6,000 business bankruptcies and throughout 1980, almost 1,000 men and women were laid off per working day.
Who is getting laid off during all of this? It is certainly not the rich, those with money in the bank as opposed to those with loans at the bank and those who cannot afford loans at all. We hear governor Bouey saying that is okay. 1 wonder if many members in this House ever really wonder why. Surely the Liberals are aware that the profits of the big five banks passed $325 million in the first quarter of this year.
How much does the high interest rate policy hurt the wealthy? That is something we should reflect on when talking about an economic crisis. Let us look at those who have substantial incomes, have paid off their mortgages and have money in the bank or invested. That is a very different picture. The top side of the economic wheel is a very different place from the poor and middle-income world provided by the government, and as demonstrated by the hon. member for Saskatoon East (Mr. Ogle) in regard to the global implications of the problem and short-run monetarist policy.
1 wish to read several quotations from the National Council on Welfare regarding the real social implications of these serious economic times in Canada. I quote:
Social interaction patterns can be very much disrupted by unemployment. The loss of social contact through the work setting is further aggravated by the tendency of unemployed persons to withdraw from friends, relatives and community life . . . Within the family, social interaction patterns can be upset since the loss of a job and income may diminish the unemployed persons' status and authority. Shifts in roles within the family, coupled with changes in the unemployed workers' personality, can provoke considerable stress and in extreme cases can lead to family breakdown.
Turned inward, these feelings of bitterness, rage, and powcrlessness may result in depression that becomes further exacerbated by the self-doubt and blame that develop when job hunting is not successful. Anxiety over financial difficulties, both now and in the future, also contributes to the depressed mental state that has been found to characterize many laid off workers-
Anything that widens the gap between income and need-the loss of a breadwinner's wages because of unemployment or illness, escalating rent, sudden rises in fuel and grocery costs, any unexpected and unavoidable expense-can plunge a poor family into crisis.
Having had many years' experience working with people in communities, I can state that serious economic problems can cause problems in terms of relationships between members of the family, child abuse and crime.

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There is no question that the economy of Canada is taking a beating because of the listless, do-nothing and layabout attitude of the Liberal party. What are the social costs in child abuse, parent abuse, frustration, alcohol and drug addiction across this country? Costs must be measured by pain and against time; not measured in terms of weeks, years, or percentage of the gross national product, but often measured in the lifetime of the individual.
This is the legacy we speak of tonight. The New Democratic Party and the Tories are not here tonight for fun, except for a few members. We are sending the Minister of Finance (Mr. MacEachen) and the Prime Minister a Christmas message to build a made-in-Canada interest rate and industrial strategy by January 12. Canada wants and needs it. Many are perishing economically while we speak. 1 beseech all members of this House to take this debate more seriously.


Mr. Roland de Corneille (Eglinton-Lawrence):: Mr. Speaker, I would first like to address myself to the reasons and to say that I feel, as a Liberal who has been long enough in caucus, that 1 can say that those I have heard in caucus have at all times been expressing a constant, ongoing and deep concern regarding such matters as the increase in the cost of living, the cost of food and shelter, deep concern about inflation which hurts everyone, particularly those on fixed or lower incomes, and they think about those who are suffering because of inflation.
There is a constant and deep concern in our party and government regarding the increasing interest rates which hurt small businesses, those who now need to renew their mortgages and especially those who have gone into debt. I see a deep concern among members in the government caucus and in our government's actions regarding unemployment and alleviating the problems of those, especially the young, who are looking for employment at this time.
While I say that the government has a profound concern, I object to those who would make things so simplistic that they would invite me to say to the opposition, the Tories or the NDP, that they do not have any concern. That is equally silly to say. They have a concern. I find it rather strange for them to look over on the other side in such a simplistic fashion and to sweep away the deep and ongoing concerns of our government, saying we have no concern. That is hardly just and sensible.
In addition, that would hardly make any political logic if we were that way. Certainly we could not be stupid and over the history of Canada see the Liberal party re-elected time after time if the people thought we did not have a constant and ongoing concern about their futures. Look at the development of pensions over the decade, our work in bringing about medicare, our concern about unemployment and equalization between the provinces, our desire to ensure that the disadvantaged provinces could gain assistance from those that are more advantaged. 1 suggest that is one of the reasons the Liberal party has for decades enjoyed the confidence and trust of the Canadian people. They believe that we care.
That does not mean there are not serious problems at this time. It does not mean we should be unresponsive to the criticisms and concerns of the opposition at a time when the world is facing a grave economic situation, problem and challenge. Anyone who looks at the budget of the Minister of Finance (Mr. MacEachen) will recognize the concern of the government. But there are those who want to cure these problems of high inflation, high interest rates and so on by extreme measures. 1 suggest to you that extreme measures get the attention of the media, and to try to take the middle road, to try to take the cautious and careful path is not going to get extreme attention by the media. Those who want to make wild suggestions and who are for some extreme forms of economics will get the attention.
We find that the Minister of Finance said in his speech, quite rightly, I believe, in trying to identify the dangers of extremism, that some would urge a dramatic retrenchment by governments, an almost exclusive reliance on the mechanisms of the private marketplace, while others have urged us to intervene broadly, not only in shaping our industrial purposes but in controlling the setting of prices and wages, and the distribution of economic benefits generally.
The first, of course, includes those whom we heard tonight, some from the Tory party, who would suggest we have a total withdrawal of government and the allowance of free enterprise in the marketplace. The others in the NDP, I suggest, would want to have greater control by government.
The Minister of Finance said he rejects both extremes. Instead he said, in giving his budget:
-t have sought a strategy that I fervently believe will serve our national and individual interests while preserving essential individual freedoms.
Then he continued:
It is a strategy which balances restraint with essential measures to give support to the growth of productivity and productive capacity.
This, I suggest, is the position of our party.
We have another set of two extremes which have been suggested and which are called for by extremists, and they too receive media attention. On the one hand we have those in the opposition who want price controls. They want price controls and a freeze or rollback of interest rates. This, of course, would bring about, they feel, the desired result of bringing down interest rates. Unfortunately, they would haemorrhage the economy so that people would see the value of the dollar plunge, and that through problems of having to import things from abroad we would have higher costs and then very great acceleration of inflation. While taking the extreme of rolling back interest rates they would have us haemorrhage to death with increasing inflation.
On the other side we have again an extremist policy- simplistic and perhaps a little more confused, in fact. These people would want to protect the value of the dollar, as the government of the opposition did under the same governor of the bank, protect the interest rates, and jack them up. This is supposed to reduce inflation. But, of course, it brings in its
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wake crushing interest rates. They seem also to be suggesting something which seems a little difficult, to increase spending while reducing the deficit. That is quite a trick. It reminds me of the difficulty of trying to suck and whistle at the same time, or in fact the definition of a politician. The definition of a politician is one who wants to sit on the fence and who, at the same time, wants to keep his ear to the ground. It seems to me that is the same kind of policy of the Tory opposition, which wants to increase spending and, at the same time, reduce the deficit, jacking up interest rates and reducing inflation.
In times of decision about economics I think one has to keep one's balance and not be lured into simplistic, unilateral, extremist or drastic actions. One gets all kinds of self-contradictory and conflicting advice on economics, and not only from the opposition parties. Whenever you turn on the radio or the television, or you look at your newspaper, you see editorials or articles by various experts on finance in the financial section giving all kinds of contradictory advice. We get it from the other side of the House from both parties, and we get it as you and I look at our own television, newspaper, or when listening to the radio. There are quite a few different kinds of solutions to our world problems.
This reminds one of what President Truman said after he had met with his cabinet for quite some time. Having met with his cabinet and after months of discussion about what to do about the American economy he threw his hands in the air and said, "Oh Lord, just give me a one-armed economist". He was asked why he wanted a one-armed economist and he said "because all 1 hear is on the one hand this, and on the other hand that". It seems to me we are getting advice of this kind- on the one hand do this and on the other hand do that. The trouble is the advice is in two opposite directions. Perhaps, I suggest, as has been said by other members of the government party this evening, we should try to look and realize that this is not a simple problem; the jug is half empty and the jug is half full. If the opposition wants to see that it is empty it can concentrate on that.
I have heard people say, for example, we have a large number of unemployed. They do not speak about the fact that Canada has the finest rate of employment of any country per capita on this earth, that for year after year after year we have provided a larger number of jobs per capita than any other nation on earth. I can say that very simply because, while it may be too difficult for some members of the opposition in their simplistic way to look only at the half-empty bottle and look at the question of what is not there, they should instead also look at the fact that there is a demographic bulge in Canada's working group, a great number who have come on the market looking for jobs. But Canada has succeeded in dealing more effectively with that kind of a bulge than any other nation on earth.
I think another example of simplicity, of not looking at the half-whole side of things is, for example, our trade picture. We hear the doom, gloom, and grief about what is wrong. I think that Canadians who hear us debate are entitled to know that their country also has some things worthy of boasting about.
Economic Conditions
Look at the trade picture in recent times. Just for a moment contemplate the fact that the merchandise trade balance posted a surplus of $658 million in October. Moreover, in the first ten months of this year the surplus of trade amounted to $5.7 billion, up from $2.7 billion over the corresponding period last year. This record high trade surplus has contributed to a substantial improvement in Canada's current account balance in the third quarter, an improvement of over $900 million- that is almost one billion-from the previous quarter. I am not even talking about years, but over the past quarter.
That is a way of looking at some of the positive side of things. One can also look, I would suggest, at how we compare with other nations. When 1 go to hospitals to visit a friend I come to think of myself as much more fortunate after I have seen that friend in hospital; I think how well off I am. Until then I may have been feeling somewhat sorry for myself.
When I look in fact at other parts of the world I realize that the problems Canada has are not simply some that are Canadian made. I understand in fact that these problems exist in other places as well and that we share a problem which has been affecting the entire world, particularly since 1973 and the OPEC oil situation. Oil was $2 a barrel, was suddenly jacked up to $12 in 1973-74, but is now selling anywhere from $36 to $40 a barrel. You cannot, therefore, say that the present world situation and its economy will anywhere resemble what it did in 1973. But it resembles much more, here in Canada, what it did then than it does in other countries.
When we look at other nations and at our problems, I think we can say that we do have problems but let us understand them in their world setting, and let us appreciate the fact that Canada's record is much stronger than that of many of the nations we so often refer to with envy.
Let us look at the downward pressure on the Canadian dollar recently. Although the United States dollar has appreciated 4.1 per cent against the Canadian dollar since the end of last June, let us also keep in mind that the United States dollar has been strong against most other major currencies as well. Since the end of June the United States dollar has risen 12.7 per cent against the French franc. It has risen 13 per cent against the German mark compared with 4.1 per cent against the Canadian dollar. The American dollar has appreciated 11.3 per cent against the Swiss franc and 12.9 per cent against the Italian lira, compared with 4.1 per cent against the Canadian dollar.
As I said, we can look at the gloomy side, but we can also look at the positive side. When we, as Canadians, look at the cost of gasoline or food in other countries, or their rates of inflation, I think we can feel that we do not have to hear only about gloom and doom. If we do not feel inclined to panic, I suggest that that will be a sign of maturity because Canada has seen a wild fluctuation in ups and downs on the economic scene in the United States during the past year, and for us to panic at this point, instead of continuing on a sound and steady policy, would do this country a grave disservice.

December 19, 1980
Economic Conditions
1 do not want to minimize the concern of the opposition. I think we can assure hon. members opposite that we shall continue to try to be flexible enough not to be dogmatic or extreme in any policy. We should continue to monitor closely the effects and to move, as our Minister of Finance has said, not in panic but in a constant and steady way to monitor and deal with these matters as they come.
When we find particular groups of people who are disadvantaged, we should move to give them that kind of consideration and assistance for which I believe this party and this country have been traditionally famous. Any other policy would be unrealistic.
1 suggest, in conclusion, that we continue to give Canadians the superb way of life they have compared with that of other people anywhere else on earth. At the same time let us never be so sure of ourselves that we are not prepared to debate, to listen, and to discuss in this House of Commons.


John Horton McDermid: Mr. Speaker, will the hon. member permit a question?


Roland de Corneille: Certainly.


John Horton McDermid: Mr. Speaker, I want to quote the hon. member, who said, as reported in Hansard for October 15, 1979, at page 193, as the following:
Yes. it is a policy of evasion. They evade the issue with smiles and chuckles while we flounder and our energy mast is splintered and broken. We are a country divided and confused . .. about energy prices which are not resolved.
Those were the hon. member's remarks of a year ago. 1 wonder what has changed so drastically since then.


Roland de Corneille: Mr. Speaker, I do not exactly understand the question. 1 am quite prepared to say that those words are taken from a speech 1 gave. I was referring to the policy of the then Conservative party in power with respect to Petro-Canada.
1 was referring to their floundering from one policy to another. First they were going to sell Petro-Canada. Then they were going to keep it and BRIC it. There were various suggestions. If the hon. member is asking what that was about, that was about the energy policy of the Conservative party.


An hon. Member:: What about pricing?


Roland de Corneille: If the hon. member wants to talk about the price situation, I will say that the price problem was one which, under our party, was an attempt to bring down the price for the average consumer in order not to increase inflation. That has been Canada's policy.


An hon. Member:: To bring down the price?


Roland de Corneille: Not to bring down the price. What 1 mean is to bring it to a level less than would have been the case under the budget of the Conservative party at that time. It should be a much lower price, as a matter of fact, than that proposed by the Conservative party at that time. We have kept that pledge. We have not increased the price more than we
said we would. We have been very consistent in our policy. We have kept our election promise and therefore saved the average person a great deal of money. In "the average person" I include the poor person who is trying to drive his car. He pays much less now for a gallon of gasoline than he would be paying if the Tory party had remained in power. We have kept that pledge.


Walter David Baker: Has the hon. gentleman ever considered trading in his collar?


Mr. Charles Mayer (Portage-Marquette):: Mr. Speaker, this is a very serious debate this evening.


Bob Rae: This morning.


Charles James Mayer: Excuse me, this morning. It is a little past 4.15 in the morning. Someone said earlier that this is a strange place to be at this time. I, for one, am glad to be here to take part in this debate because I think many Canadians are very much affected by the interest rates they now have to pay which are in the neighbourhood of 20 per cent. This is no laughing matter for many people who have to meet payrolls and other commitments or mortgage payments on a day to day or week to week basis. This is a very serious matter for many average wage earners. Those are the kinds of people who keep this country going on a day in and day out basis.
Much has been said so far in this debate. The previous speaker, the hon. member for Eglinton-Lawrence (Mr. de Corneille), and the hon. member for Burin-St. George's (Mr. Simmons) talked about all the gloom and doom about which we spoke. 1 do not think anybody is talking unnecessarily about gloom and doom. We need only walk down the streets of Ottawa, as I did this morning, to see that sale signs are out indicating "20 per cent off', "30 per cent ofF', and "50 per cent off."
This is the first time I have ever seen pre-Christmas sales. Interest rates are forcing many merchants to lower their prices before Christmas because they are frightened to death of having to carry excess inventories after Christmas at these interest rates. That is not gloom and doom. That is the actual fact of what is going on in the economy.
I spoke with an implement dealer in my riding at about six o'clock last evening. I asked him how machinery and equipment sales were going. I asked him what rate of interest was being paid and what kinds of deals some of the equipment dealers were offering. He pointed out that interest rates were "only" 17.5 per cent. When we come to the kind of psychology where we think that 17.5 per cent is a bargain, that says something about the policies this government has been pursuing.
I would like to refer to some of the gloom and doom which was talked about a year ago. I would like to quote from the minutes of a meeting of the Standing Committee on Finance, Trade and Economic Affairs which took place on October 30, 1979. The present Minister of Industry, Trade and Commerce (Mr. Gray) was the financial critic of the official opposition at
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that time. He was referring to the Conservative budget of R. B. Bennett. Speaking of his course of action, R. B. Bennett's Conservative finance minister said, as quoted by the Minister of Industry, Trade and Commerce:
This course may result in hardship. It may entail sacrifice, but in the long run it will result in less hardship and will call for less sacrifice than that which would flow from a policy less courageous.
The Minister of Industry, Trade and Commerce was directing his remarks to the then minister of finance, the hon. member for St. John's West (Mr. Crosbie), and he said:
Mr. Minister, I want to point out to you that your high interest rate policy would slow down the economy; it will mean the loss of thousands of jobs; it will mean increases in the cost of living. It will probably bring the housing and construction industry to a halt, with thousands of jobs being lost in those sectors.
There was a person crying about gloom and doom. I point out that at the time this committee hearing took place the prime interest rate was 14 per cent. If it was fair for the then finance critic in the previous Parliament to talk about economic chaos as a result of a 14 per cent prime rate, when today we have a 17.32 per cent prime interest rate, a record high interest rate for Canada, certainly it should be our duty as opposition members to let this government know that a record high interest rate will cause severe problems for the economy.
I would like to speak now about a statement made by the Minister of State for Finance (Mr. Bussieres). He said earlier this evening that the enemy is not interest rates, the enemy is inflation. When we get interest rates of 20 per cent or better, and that is what a lot of small businessmen will be paying in this country, they will be paying prime plus one, plus two, and in some cases plus 2.5 per cent, which will get them very close to 20 per cent, I submit that those kinds of interest rates add significantly to their costs, and interest rates at this level are a major factor in inflation. To argue otherwise is to kid ourselves.
1 will now turn to the cattle business with which 1 am fairly familiar, Mr. Speaker. The cattle business affects us all because it affects the price of food. We all know that meat is a basic commodity in Canadian diets. A cow-calf operator's major cost is interest cost. It can cost a cow-calf producer as much as $130 or $140 a year just to pay interest costs. That is about equal to the cost that a farmer would incur to winter a cow.
We know that in our country we have fairly long winters. We sometimes say that we have six months of winter and six months to get ready for it. So, when we get to a situation where interest costs are roughly equal to the cost of wintering a cow, that gives you an idea of how interest rates affect the inflation rate, and that is reflected in the price of food which the consumer has to pay. That is one of the reasons why we see an increase in the cost of living, which affects the inflation rate. So for the minister to say that the enemy is not interest rates, the enemy is inflation, is a disgrace for a minister of state for finance. He should certainly know better.
Economic Conditions
In that context I would also like to challenge every government member who has spoken here this evening to go back to his riding, and when he is asked about interest rates over the holiday break, to make the same kind of points to his constituents that he tried to make here tonight and defend the interest rates which this government is shoving down the throats of Canadian people. I would like to see how many votes they would get and how popular they would be with their constituents. To give them the same kind of clap-trap that they have been passing across the floor this evening is shameful. All of them should be ashamed of themselves because I know they know better, and that includes the hon. member for Ottawa Centre (Mr. Evans). He knows better than that. 1 have heard the Prime Minister (Mr. Trudeau) refer to him as a brilliant economist. When he makes the kind of statement he made tonight, I think it points to the fact that they are both wrong.


An hon. Member:: It was one of the funniest jokes he ever told in his life.


Charles James Mayer: Now I should like to talk, if I may, about how interest rates affect the farming community. Farming in this country is a seasonal operation because of the type of climate we have. If we are going to be productive and plan our production properly, we have to do it at least a year ahead. When farmers sow a crop in the spring, many of them plan to put it through livestock in order to market it. That means that a farmer who plants a field in the spring of 1981, harvests it in the fall of 1981, stores it, and markets it through livestock, the following year. In fact that crop may not be marketed for at least a year and in some cases 15 months after the decision was made to produce a certain crop on a particular field.
When we see interest rates move up at the kind of pace we have seen in the past month, we realize that there is no way in which a farmer can adjust to those kinds of interest rates. This creates complete havoc as far as his planning is concerned. It discourages him from long-range planning, which you have to do in the agricultural industry to maintain a stable supply of food for Canadian consumers. These interest rates are completely counterproductive. I do not consider myself to be an old timer in farming, but I can remember when a finished animal sold in the 20-cent-a-pound range, and I can show you figures now where the interest costs of producing an animal are roughly equal to the total cost of selling a finished animal as recently as 20 years ago. That is what inflation has done to the price of raising livestock in this country. I disagree totally with the Minister of State for Finance when he says that interest rates are not the enemy, that the enemy is inflation. In fact interest rates are a very big factor in the inflation rate in this country.


David P. Smith: Tell us your solution.


Charles James Mayer: You want some solutions? I will give you some solutions. One of the things that the government could do right now would be to increase the initial price for grain in western Canada.


Some hon. Members:: Hear, hear!

December 19, 1980
Economic Conditions


Charles James Mayer: A very conservative increase would be $1.50 a bushel. This would result in as much as $300 million being put into pockets of Canadian farmers. The brilliant economist from Ottawa Centre will know that the multiplier effect from the farming economy is probably higher than in other sectors of the economy, and a multiplier of three would probably be about right. So if the government chose to do so right now, it could put as much as $1 billion of purchasing power into the Canadian economy. Most of it would go to western Canada.
1 hope the Minister of Agriculture (Mr. Whelan) will read this tomorrow. We like to think of the Minister of Agriculture as being a fighter for the farmer, but in the last couple of years he has become very tired looking and he no longer wants to stand up and fight for farmers. We find that rather discouraging. If he were to take the farmers' case, we could see as much as $1 billion of purchasing power put into the Canadian economy. That is what the government could do. It is the government's responsibility, not the Wheat Board's responsibility. The government has the responsibility for setting the initial payments. The initial payment has been set at $4.25. Grain has been selling at over $7 a bushel since the middle of November. There is absolutely no excuse for not increasing the initial price for grain. It would not cost the government $1. We have heard the previous speaker this evening saying that on the one hand we want to do this, and that on the other hand we want to spend more money. Here is something that the government could do that would not cost a cent in terms of additional government expenditure, but it would increase the purchasing power which all Canadians have and it would help the situation. That is one thing they could do.


Some hon. Members:: Hear, hear!


David P. Smith: Tell us your solution to interest rates.


Charles James Mayer: That would also help the interest rates because it would mean-


An hon. Member:: Right on.


Charles James Mayer: One of the reasons we have high interest rates is that all sectors of the government in this country are competing for the limited amount of funds that are available, so there is less left for the private sector. The more money you put into circulation, by increasing the initial price of wheat, the more bills you can pay, the less money you have to borrow, the less pressure there is on interest rates, and therefore the lower the interest rates. That would certainly help to lower the interest rates. The economist opposite, the hon. member for Ottawa Centre, would have to agree with that. I urge him to speak to the minister in the other place, to speak to the Minister of Finance (Mr. MacEachen), and to speak to the Minister of Agriculture and ask them to do that. That is one thing that would help the Canadian economy considerably.
Another thing we could do would be to pursue some policies which would genuinely make the country self-sufficient in oil.


David P. Smith: We are doing so.


Charles James Mayer: It is a strange way of doing it, to drive the industry out of the country. The figures I have seen tell me that somewhere between $12 billion and $18 billion was spent last year on exploration for oil in this country. Since the budget, announcements have been made by various companies, large and small, that they will not spend that kind of money next year. In fact, according to the figures I have seen, they will spend $4 billion less exploring for oil in 1981 than they did in 1980. If we kept that money in the country it would help our balance of payments, it would put less pressure on the Canadian dollar, which would also help industry. It would not cost taxpayers and the government one additional cent.
Let me tell you another thing that could be done that is the fault of the government. Western Canada has not had an opportunity to export the kind of grain it has been producing in the last four or five years. The estimate is that in the previous two crop years, in 1977-78 and 1978-79, we lost as much as half a billion dollars in sales to countries around the world willing to buy it, but we would not transport it to export positions because of the lack of a transportation policy. If we exported more grain, again it would mean more money that farmers would have in circulation, and less borrowing. That would help interest rates.
These are the three things we said we could do which would not increase taxes and would not increase government spending. These are things that could have been done.
I will talk about another thing that could be done which will not cost the government any money. We in the cattle industry have for a long time asked for a beef import law similar to that of the Americans in order to stabilize our beef industry in terms of the imports which come into the country, particularly those from Australia and New Zealand. We have seen the bill introduced for first reading, and it got absolutely nowhere.
If a livestock producer plans for the future expansion of his herd, he requires an assurance that when the expansion is in place he will have a market for it. We say what the lack of a beef import law has done to the industry in the past. It completely decimated the industry in the years 1974, 1975 and 1976.
I referred to the Minister of Agricultur earlier as not having the energy, zip and fight we would like to think he had on behalf of Canadian agriculture. He has not even seen fit to announce quotas, which he can do under the import-export act. If he did that it would give the livestock industry some encouragement and stability. It would help as far as food production and food costs are concerned. 1 have mentioned four things which the government could do that would not cost one cent.


Some hon. Members:: Hear, hear!


Charles James Mayer: Another idea which would stabilize the industry is the provision of an income-averaging annuity. It would let the industry stablize itself from within, without being required to go to government asking for handouts. The industry would
December 19, 1980

be prepared to do that on its own, without going to government.
Earlier I listened to the hon. member for Lambton-Middle-sex (Mr. Ferguson). 1 would like to see the response he faces when he goes back to his constituency. Farmers who are operating with lines of credit in the 20 per cent range would consider the speech he gave tonight nonsense. Fie should be ashamed of himself. He should know better, as a farmer, than to give us such nonsense. I cannot understand why a responsible farmer like the hon. member for Lambton-Middiesex could make such a speech. He talked about the vagaries of the marketplace. We all know that. I have talked with farmers, and regularly they tell me they are prepared to live with all the uncertainties of farming, such as weather, insects, markets and hail. Their biggest uncertainty is the government, and the government is adding to that uncertainty by not letting them plan in terms of interest rates. The policies of the government lend support to the Bank of Canada increasing interest rates on a short-term basis, which is driving a lot of farmers out of business.
1 see the hon. member for Lambton-Middiesex smiling, but I know of farmers in my area who are selling livestock because they cannot afford to keep them. Interest rates are driving them out of business. It does nothing to increase food supply or to help young farmers stay on the farms. It does nothing for cash flow. It drives farmers off the farms. 1 challenge every government member who has risen to speak tonight to talk to their constituents over the Christmas break. The most important question they will have to answer is: what will the government do about interest rates? If they try to make the points they have made in the House with their constituents, they will see the reception they will get. They will be tarred and feathered and chased out of the country.
The government should keep its own house in order in terms of government expenditures. 1 should like to refer to a statement of the board of directors of the Canadian Institute for Economic Policy on Interest Rates, the Exchange Rate and Inflation which was released on April 22, 1980. At the bottom of page 3 it reads as follows:
Canadian interest rates should be reduced appreciably from present levels regardless of what the Americans may do. It is quite true that if this were done, we could expect the exchange rate for the Canadian dollar to fall. This would have certain disadvantages and involve some costs. But these would not be nearly as great as the costs of the present very high interest rates.
I have a press release from the Bank of Canada at that time which indicates that the bank rate was 15.42 per cent. Today it is two percentage points higher, but that statement was valid then. The Canadian Institute for Economic Policy is chaired by Mr. Walter Gordon, a former Liberal finance minister. If that was a fair statement in April, 1980, when interest rates were 2 per cent lower, it is more than a valid statement now.
If the government could control some of its own expenditures and not be in the marketplace borrowing as much money as it is on an ongoing basis, it would certainly help interest rates. I have seen figures which indicate that all levels of government borrowing-federal, municipal and provincial- account for something like 65 to 70 per cent of total borrow-
Economic Conditions
ings in this country. That leaves very little money available for the private sector to borrow. It is one of the reasons for high interest rates, because governments at all levels are in the marketplace borrowing large amounts of funds.
I am not sure the Bank of Canada is succeeding in controlling the money supply. It is very difficult to hold interest rates down. Another thing the government could do, which would not be an additional draw on the finances of the country and would help interest rates, would be to limit its own expenditures. I am running out of time. I had planned to talk a bit about how the Bank of Canada functions, because I have some concerns in that area. The Bank of Canada has as much power in terms of what happens to the economy as all of us in the House of Commons. Yet it operates without the accountability we have as elected members. The Bank of Canada is not required to face the electorate every four or five years. I should like to see members of the House of Commons as regular members of the board of directors of the Bank of Canada.


Some hon. Members:: Hear, hear!


Mr. Bill Domm (Peterborough):: Mr. Speaker, at this moment at 4.37 a.m. on Friday, December 19, interest rates have jumped by 39 per cent since the federal budget was introduced on October 28. If it were not for the governor of the Bank of Canada-and let us give credit where credit is due-the dollar would be 75 cents American. In any case, it is at its lowest level in 47 years.
The Economic Council of Canada has roundly condemned the pathetically inadequate government for its absolute lack of initiative in doing something about this deplorable situation. At the moment the prime rate is over 18 per cent. Individual borrowers who are less fortunate than major corporations are borrowing money today at rates between 21 per cent, 22 per cent and 23 per cent.
It is perfectly clear what steps must be taken to begin the long economic recovery which Canada so badly needs. Intelligent investors, bright men and women in financial and manufacturing sectors of our economy, simply do not buy the excuses of the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) for his extraordinary failure. Outside investors do not buy them either. A child of three would not buy them, because in this country there is a will to succeed, a collective confidence in the national self. This confidence has been severely shaken by the plaintive cries of the minister that interest rates are prey to a variety of unspecified and uncontrollable factors. The only thing interest rates are prey to is a government which refuses to allow itself and this country to reach and fulfil their potential.
What does the Minister of Finance intend to tell thousands of small businessmen across Canada who face bankruptcy and ruin today? Surely the minister realizes the agony to which small businessmen are subjected. On Thursday morning, on "CBC Morningside," a small businessman in Sydney, Nova Scotia, condemned government policies which hampered his ability to exist in the marketplace, that is, the government hampered him, the small businessman. His own abilities, his
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Economic Conditions
own efforts and dedication will not be the cause of his failure. It is the Minister of Finance whom this businessman in Nova Scotia blames.
Does the minister realize that the total sales of all businesses in Canada were over $400 billion last year? Some 28 per cent of these total sales came from small businessmen. Total employment in this business community amounts to 6.6 million people. Small businesses employ 2.5 million people. That is 42 per cent of the total business employment in Canada. The contribution of these businesses to the gross national product is in the 40 per cent bracket. These are impressive statistics and ones to which the Minister of Finance should pay more attention. Even more important, he should pay attention to statistics which tell him that thousands of bankruptcies are already occurring in Canada. That was the situation before the present crisis. What it will be tomorrow, or this morning, next month or next year, I hesitate to contemplate. But this is not a matter of statistics, it is a matter of philosophy. It is a matter which concerns a fundamental point of view.
The true business of government is to govern, not hamper or hinder the ambitions and enterprise of a country's people. Yet this is what the Liberal government is doing. It is inhibiting the drive toward economic health arid prosperity. The marketplace does not respond to regulations, rather, it responds to incentives, true, unencumbered incentives. The government should get out of the marketplace. It should get off the backs of the small businessmen in Canada and create the climate which allows independent entrepreneurs to function, not to be hindered.
I ask, Mr. Speaker, what incentives has this government provided so far since its budget, or since the election? What help has it extended in the form of an alternative to the Progressive Conservative Party's recognition that small business provides a large, stable, and diversified source of employment? Small business preserves competition and efficiency. It is a major source of innovation in our country, the small business sector which this government refuses to acknowledge. Of course, these features are contradictory to Liberal philosophies. They seek to entrench a stable and diversified source of employment. Small business seeks to do this, while the government seeks to destroy competition and efficiency through exclusive jurisdictions and monopolies. A prime example of this may be seen with respect to the possible Air Canada strike over the Christmas season. This government seeks to kill the merest shred of innovation and incentives in our society.
The conclusion to these remarks is that the Liberal small business policy is obsolete and prehistoric. Let us take a brief review: the small business development bond program introduced by the Conservative government for one year has been extended until March, 1981. That is not a great deal of use. There has been a total lack of tax relief measures in the Liberal budget which could have been extended to small businesses, to say nothing of the benefit of other tax credits to all middle and lower-income people. Unemployment insurance
premiums paid by employees and employers alike were increased by the federal government. If any more proof is needed of the government's abject failure to tackle the root problems of the economy then this is it. The government's simple solution is to have the people and businesses of this country subsidize the immense costs of its dreadful mismanagement.
Then there is the Liberals' lack of attention to farmers. They are small businessmen who play an important role in the economy of the country. The Liberal government had no problem at all finding a $40 million for an oil company in order to keep it swallowing its disastrous National Energy Program for six more months. But the member for Cape Breton cannot seem to approve 3 per cent of that amount for a modest transfer payment which would keep Canfarm alive. Members of the Ontario Federation of Agriculture and the Quebec Union of Agricultural Producers use this computerized trans-Canada network for bookkeeping and management services. This is so essential to keep a viable farm community in place. The government ignores that. I remind the Minister of Finance that 30 per cent of Nova Scotia's farmers use the services of Canfarm.
I wonder, and I am sure the people of Canada wonder as well, why the government refuses to recognize small business, and in particular the entrepreneurs in the farm community who need this helpful service in order to continue to work. Ministers could not find 3 per cent of the $40 million which they used to bribe a major oil company to stay in business because of that adverse financial policy implemented by this disastrous Liberal government-they cannot find 3 per cent of $40 million to subsidize the farmers, 30 per cent of whom in Nova Scotia use Canfarm. This is disgraceful, disgusting, and a total discredit to the present government in showing its priorities as it sees major oil companies deserving of a $40 million bribe, but for the farmers of Nova Scotia, Ontario, Quebec and the rest of Canada it cannot find 3 per cent in order to keep a Conservative government policy to finance Canfarm at least long enough for the farmers to prove they are capable of running their own business better than the Liberal government runs the country.
How on earth can members opposite continue to be the pretender in the name of government? By every common barometer, every single one of their actions, or rather, of their inactions, has resulted in immediate condemnation, not only rhetorically but through irrefutable indicators of the money markets, of investment capital, business investment, from increasing unemployment figures, which are the most basic indicators of the country's health. The value of the dollar is comment enough on this extraordinary record. It is only a hollow victory which I will be able to read about in Hansard. The Minister of Industry, Trade and Commerce (Mr. Gray) said last year:
The Liberals and I generally want action taken now to prevent the hardship this Conservative high interest rate policy is creating for millions of Canadians and their families.
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And how high are interest rates now? They are as high as they have been in 47 years. If the minister appreciates that a government must be accountable, as he seems to do when out of power, why does he not admit his and his government's accountability now that they are in power? It is like drops of water on a stone. I will try again, and my party will try again to make an impression on the government. Of course, any promise of action is like getting water back from a stone. If a government acknowledges it is an effective authority within its own borders then any action it takes, presumably, will have an effect. Therefore, the external forces are hardly adequate reasons for failure.
It is clear to me, Mr. Speaker, that only the larger businesses in Canada with adequate protection through their equity and working capital will be able to defray the more ravaging elements of the worsening financial crises in Canada. It is those whom we can least afford to lose-the small businesses which, as I have said, make up almost half of our business community. They are the ones which contribute a great deal to the gross national product. They do not have the ability to weather this storm. And how does the government intend to help them? What relief will it provide? What measures does it contemplate to give them a fighting chance for survival?
It is equally clear that small businesses have a host of difficulties to overcome. These difficulties are a lack of skilled labour, underdeveloped foreign markets, mountains of government paperwork, punitive taxation and so on. Under present circumstances-even circumstances which are a good deal better than present ones-the small businessman has difficulty in achieving any degree of solvency. He cannot consolidate his loans even when he can get one. He cannot obtain working capital and carry accelerating interest rates indefinitely. He cannot increase the variety of his stock to attract more customers. In short, he cannot continue to exist. In that case a large part of our GNP will cease to exist along with him.
However, I forget that this government runs its own business, the business of governing this country on the peculiar basis of deficit spending. Why then should it sympathize with a business community that does not share the same luxury, the same dubious fiscal principle? The government continues to spend 25 per cent more than it takes in each year. The government continues to spend our $66 billion this year alone. It continues to spend immense amounts of money on a commodity which we can get for half the price in Canada. It continues to stick its thumb in the leaking dike of our economy, but as the leaks increase in number and in force, the government will run out of thumbs and then we will all be at sea, just as the government is in matters of the economy.
Together, three things, the budget, the energy policy, and the constitution, are contributing to what has become known as a socialist republic. As this irresponsible government seizes control of the major multinationals in Canada, and as it grabs
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hold of 25 per cent or 50 per cent of their wealth, what will stop it from moving into Ontario and taking control of nickel?
Would this party condone a government that would seize control and set the price on nickel for the world? No, it would not. The NDP might, but the Conservatives would not. The New Democratic-Liberal party of Canada is turning this country into a socialist republic. It is taking away from the free enterprise system the most important element, that no government of any country can run the business sector in this country as well as the free enterprise system if allowed to function.
The government continues to meddle in the free enterprise system in Canada and to increase inflation, lower the value of the dollar, scare industry, business and entrepreneurs out of the country to the point where all that is left to run it are those people opposite, the irresponsible socialists who sit on the other side of the House. This country is doomed to disaster because it will not listen, and it does not care. The Prime Minister of Canada (Mr. Trudeau) said, as recently as last month, that the people of Canada do not want unilateral patriation of the constitution. The survey polls such as Gallup support that view. The Prime Minister said that it does not matter what the people of Canada want. They do not know what is good for them, but the Prime Minister does.
As the strings of those puppets, those marionettes opposite are pulled, they jump, and when they are told to stand up, they stand up. When members opposite go home to face the people in their ridings and have to go on the hotline shows and be interviewed by the media people, I challenge them to say that they stood mute, they put the earmuffs on, gagged themselves and stood up when they were told to stand in the House of Commons. They are literally turning this country into a socialist republic run by the ministers opposite and supported by the NDP.
They will drive the business community in Canada into the grave, and as they mount the tombstones over the deaths of 6,000 businesses they laugh. The NDP laughs because they know the strength of this country. They know that the free enterprise system has built the country. They are as bad a bunch of marionettes, of gagged puppets, as the Liberals. They are gagged, they are out of it, they are in a different world, and they are trying to bring it to Canada.
In my remaining thirty seconds I will make the prediction that if this government stays in office for five years more and it completes its term, by the time we get the country back, and hopefully there will be something left with which to work, the two of them together, the Liberal-Democratic party of Canada, will have turned the country into a socialist republic.
I hate to see the day when they band together to bankrupt the free enterprise system, to take control of the country away from the marketplace and turn it into a socialist republic.
[ Translation]


Joseph-Roland Comtois: Mr. Speaker, I am quite pleased to take part in this debate, all the more so because the comments we have been listening to for a few

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hours now made us smile now and again. Indeed I wonder if some of my colleagues here in the House are really aware of what is going on in Canada.
Earlier I was listening to the hon. member for Joliette (Mr. La Salle) who, in an impassioned speech, managed to criticize just about everything that is going on in Canada, but he never did come up with any alternatives. Of course 1 have known the hon. member for Joliette for 15-odd years and he has always made a lot of speeches but never did he offer concrete and worth-while proposals.
1 had a personal experience when I met with farmers in my riding because we are neighbours. The member for Joliette remained silent for four hours, unable as he was to make one single suggestion. The member for Berthier (Mr. Yanakis) was with me at the time and we tried to find solutions, in fact we did find solutions to the problems experienced by farmers in our region. Everything was settled a few weeks later and these farmers belonging to the Agricultural Producers' Union of Joliette wrote us a letter to thank us for our work, for our discussions and for the ensuing decisions but in the letter they did not even mention the name of the member for Joliette because he had not uttered one word.
And then he accused the government of failing in every economic, fiscal, monetary and social endeavour, again without proposing anything at all. His only real discovery during the few months he was in power as a minister was to appoint himself patronage minister. That was his greatest accomplishment but unfortunately the electors decided that Canada just did not need such a minister. It was a miracle that he barely squeezed in at the election of February 18 last, Mr. Speaker, but we will have another crack at him next time around.
I heard him refer to the famous Conservative budget and say that all heads of businesses and multinationals readily endorsed the budget but he simply forgot to point out that the people of Canada did not share that view. That is why the government was turfed out and the Liberal party regained power.
I heard the hon. member say, as did the former finance minister, the hon. member for St. John's West (Mr. Crosbie), that their famous budget featured a tax credit for mortgage interest and property taxes.
Mr. Speaker, except for the former finance minister and the member for Joliette and most likely all members on the other side of the House, everybody knows that the proposed tax credit was not in the budget. That was a separate measure which the Progressive Conservative government could have passed when they were in power but, given their lack of intelligence or their incompetence, they opted for a vote on the budget and were defeated. 1 recall full well that at the time five of us on the Liberal benches had expressed support for that bill, the government was certain it would be adopted but
they chose to drop it. And now everybody is being blamed for blocking that outstanding measure because the opposition parties of the day, the Liberals and the New Democrats, defeated the government on a budget which did not have anything to do with the tax credit measure.
The hon. member for Joliette criticized milk quotas and the 1976 dairy policy, the one year among all others when the government may have made mistakes, but they were all corrected the following year. We had the best dairy policy in the world in 1977, 1978, 1979 and even 1980 but of course the hon. member for Joliette was not there to say so.
In his speech the member for Joliette managed to include the constitution, patriation, the works. I have some doubts about his sincerity when I recall seeing him on the same podium as his pals Laberge and Parizeau, two avowed separatists. 1 wonder just how sincere he can be when he takes the floor in the House to speak about patriation and to defend Canada. It does make us wonder, Mr. Speaker.
The hon. member also voices concern over great projects which are falling through in Quebec. Perhaps he should feel the same way about those which are not being carried out in Alberta. Mr. Speaker, it is only normal that we should ask questions when we see a provincial premier decide on his own to shut off the valve and cut his oil production to the tune of 130,000 barrels a year and when we hear that the same premier has put a hold on two major projects to develop tar sands. And we can wonder as well when we learn that the Premier of Quebec refuses to let a pipeline through his provincial territory. When you see this same government drag its feet before developing a road network or even a fast transit system to and from Mirabel, you are bound to ask yourself this question: Who are really those who stand in the way of this country's development?
Mr. Speaker, it seems the package deal which was offered in last October's budget has been mostly ignored by the members opposite. They disparage it; they had better read it again and ponder over its essential points. I would like to repeat them for the sake of the hon. members on the other side because it seems to me they have forgotten about them. The Minister of Finance (Mr. MacEachen) said that public expenses would not grow faster than the economy; that the deficit would be progressively reduced over the next three years, but moderately next year because of the expected slow economic recovery rate. 1 am sure everybody agrees with that, and will even more so as the recovery gets under way. I hope that this aim will be achieved in 1982, 1983 and 1984. And then, the Minister of Finance indicated that any increase in individual and corporate tax rates would be avoided as much as possible. I think that when we decided to maintain private indexation in 1981 it was a measure of the kind we had already proposed previously. Indexation will take $1,580 million out of the federal income tax individual taxpayers would have had to pay otherwise next year. The minister also mentioned that aid to the developing
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nations should be increased. If the hon. members really think we have problems in Canada, they should see those the Third World has to face. They would quickly realize we may have too few problems in our country and this is why the hon. members opposite are having such a hard time looking for some. The minister said healthy competition should be encouraged, the weight of government regulation lessened and paper work done away with for small and middle-sized businesses. As far as 1 can see, this is just what the Liberal government has been trying to achieve over the past few years.
Mr. Speaker, the budget also included a national energy program. This tends to be overlooked as well, although the budget and this policy are only one month and a few weeks old. The government has announced several measures to implement its National Energy Program, which is founded upon three basic principles:
1.	Security of supplies and ultimate independence from the world oil market.
2.	Opportunity for all Canadians to participate in the energy industry, especially petrol and gas, and to share in the benefits of its expansion.
3.	Fairness, with a pricing and revenue-sharing regime which recognizes the needs and rights of all Canadians.
The main points of this program include a blended pricing regime for oil in Canada, with a set price which will be gradually and regularly increased. This price will remain far below the international level and never be allowed to exceed 85 per cent of imported oil or the price of oil in the United States, whichever is lower. A competitive advantage for Canadian industries will therefore be preserved.
The blended price for oil is an average of the cost of foreign oil for which we have to pay world price and the cost of domestic oil. The mechanism for blending in higher cost supplies will be a petroleum compensation charge levied on all refiners. The new regime will be phased in so that the burden of subsidizing costly oil imports will be transferred from the taxpayer to the oil consumer.
The price of natural gas will increase less quickly than the price of oil, which will provide a major incentive for consumers to switch off oil to gas and we propose to assist in this conversion through massive subsidization.
A new federal tax, at a rate of 8 per cent on net revenues from the production of oil and gas in Canada will be levied, starting January I, 1981. The two new taxes will yield around $11.7 billion over the next fiscal years ending in 1983-84. The new revenues will finance the major federal spending initiatives in the field of energy and the western development funds. And starting from April 1, 1981, marine and aviation fuels used in interurban transportation will no longer be eligible for the lower prices available to domestic consumers in Canada.
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Mr. Speaker, half of the income derived from levies on crude oil will be transferred to the producing provinces, namely, Alberta and Saskatchewan. In recent years the federal government received about 10 per cent of all petrol production revenues, the producing provinces slightly over 45 per cent and industry slightly under 45 per cent. With the new program, the federal share will be about 24 per cent by 1983, the provincial share 43 per cent and the industry's 33 per cent. The depletion allowance in the income tax for oil and gas exploration and development activities which have primarily benefited large established corporations, which are for the most part foreign-owned and controlled, will be abolished or phased out, except for tar sands plants and frontier exploration. A new incentive program of direct payments designed to promote investments from Canadian companies and individuals will be established. It will provide additional incentives for exploration in the north and the offshore.
Mr. Speaker, other energy measures were also announced in that over-all policy. First, a national gas bank will be prepared to purchase from Canadian producers, gas that cannot find markets in order to provide them with a source of cash flow. Second, a new grant program will assist home owners to move off oil and onto natural gas, electricity and other fuels. Third, market development bonuses will be provided to distributors, especially in eastern Canada, and energy conservation will be strongly promoted through consumption standards to be followed by car users. Fourth and last, renewable supply will be further enhanced with implementation of research and demonstration programs and the establishment of a new Canadian Crown corporation called Enertech Canada. It was announced recently that this new corporation will have its headquarters in Winnipeg. Furthermore, some regional measures have been announced in that same energy program and they are designed to meet the particular concerns of some areas. As a matter of priority, the natural gas pipeline system will be extended to Quebec City and the maritime provinces, gas prices in Quebec City and Halifax being set at the same level as in Toronto and Montreal. A fund will be established to support the conversion of oil-fired electrical plants to coal in the Atlantic area; $4 billion will be allocated to a western development fund of which half will be spent over the next three years on specific development projects selected in consultation with the governments of the western provinces; additional funds will be available to find ways in which the large reserves of Cape Breton coal can be used; an industrial conservation program will be implemented and a housing retrofit program will be introduced for Newfoundland, Prince Edward Island, the Yukon and the Northwest Territories; federal equity will be provided in support of hydro development on the lower Churchill River in Labrador.
Mr. Speaker, in addition, the objective of Canadian ownership has been defined in that over-all policy. It will be to ensure at least 50 per cent Canadian ownership of oil and gas

December 19, 1980
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production by 1990, Canadian control of a significant number of the larger oil and gas firms and, finally, an early increase in the share of the oil and gas sector owned by the Government of Canada. Furthermore a Canadian ownership charge will be established to permit the Federal government to acquire control of one or more of the multinational oil companies in Canada. In this Petro-Canada will play a larger role on the basis of our commitment which has the support of the majority of Canadians.
Mr. Speaker, in closing my brief remarks I should like to say this to my hon. colleagues on the opposite side. We, as Canadians, own sources of wealth greater than any other country. To start with, we have all kinds of energy and in large quantity not only in Alberta and in Saskatchewan but also in Canada lands which are the north and the areas off our coasts. We can produce food in large quantities and it has always been said that Canada was the granary of the world. Finally, Canada has a third exceptional resource, fresh water. We have the largest reserve of fresh water in the world. Therefore, when we consider all that, in addition to all the other resources, as well as our human resource, a bright, hardworking people up to any challenge and willing to share its resources, to each and every one of us I say let us be first and foremost Canadians and the majority of our problems will be solved!


Mr. Douglas Roche (Edmonton South):: Mr. Speaker, now at 5.15 a.m. the night is nearly over. Canada will soon awake. Still we debate. For nine hours this debate has raged on. It is not finished yet. Around me are colleagues still wanting to speak. Why? Because this is an emergency debate. Because Canada today is in crisis.
If it can be said that at this hour it is difficult for members on either side to advance new points in the argument, let it be emphasized now that the reason we are so determined to keep expressing our concern for Canadians caught in the economic morass of our country today and the reason we will not stop this debate is that we have yet to get through to the members of the government. The government persists in going its own way.
The Minister of Finance (Mr. MacEachen) came into this debate tonight. One would have expected in this emergency debate that he would have brought us an announcement, some understanding, a sense of direction. What did he give us? More of his masterly obfuscation, more of his self-congratulatory posturing for having tricked this establishment a year ago to win office. That posture he continues to hide behind. I say the Minister of Finance tonight was a disgrace.
What is this debate about? This debate is about inflation, standing at 11.2 per cent. It is about interest rates, now at 18.25 per cent, the highest in our history. It is about unemployment and it is about housing. It is about the people of Canada. During the CBC news there were interviews with
people who have to renegotiate mortgages at exorbitant interest rates. Those people are hurting and suffering tonight. That is what this debate is about.
This debate is about an industrial strategy that Canada should have. We keep waiting for it. This debate is about the social unrest in this country. It is about low-income workers, pensioners, people who cannot keep up with an economic problem that has outrun the penance which the Minister of Finance says he is offering. This debate is about a bitter Christmas which is now less than a week away.
The things I have mentioned so far are the tip of the iceberg. This debate is about the bitterness and the divisions inside Canada today that are driving Canadians apart. This debate is about the real crisis and the well-being of our country, whether we view that in terms of the constitutional package that is being debated now, the lack of an energy agreement between Alberta and Ottawa that has repercussions and ramifications for the whole country, or the inflation that is wracking this country.
This is not an ordinary time. This debate is taking place in an extraordinary time. A day or so ago 1 was asked by a radio interviewer to look back on the year 1980. At the beginning of 1980 would you have anticipated that there would be a western separatist movement capable of filling the Jubilee Auditoriums in Edmonton and Calgary? At the beginning of 1980 would you have anticipated that there would be oil rigs lined up at the Canada-U.S. border waiting to go south? At the beginning of 1980 would you have anticipated that the interest rates would go to 18.25 per cent and that home owners would be in a state of panic as a result of renegotiating their mortgages? That is the framework, the bottom of the iceberg which has brought us to this debate during this long night in Parliament.
Our friends across the way say this is gloom and doom. They do not want to hear about it. They say this is a great country. Certainly it is a great country. Everyone here in Parliament, especially members of Parliament who have had the advantage of travelling and knowing how great this country is, knows just how great it is. Our problem is with the government, not with the country.
I have waited tonight to say these few words because I feel devastated about what is happening in a country that is so great, one with so many resources, so much technology and such potential, but a country that is so mismanaged that we have division growing and growing. This is a matter that should be of some concern.
I want to say a word or two in a friendly way to my friends on the other side who represent ridings in the provinces of Ontario and Quebec.


An hon. Member:: There are only two left.


Douglas Roche: There may be some who will read this. 1 want to say something very serious to the members representing areas
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in central Canada. I speak to you now as an Albertan. I speak to you as one who is worried about the state of our country. I speak to you as one who is very concerned about the ammunition being given the western separatist movement.
When separatism and the flame of separatism was burning so brightly in the province of Quebec-I do not say it is extinguished now-in the past couple of years when the situation reached an extreme point in the province of Quebec, members here from Alberta, and many of our colleagues and associates in western Canada, spoke out for Quebec. We did everything we could to send a message to Quebec. Some of us went there personally. I held a national unity rally in Edmonton, which attracted a number of people from this part of the country, in order to send a message to Quebec. Why did we all do these things? We were beginning to understand deeply the retourne a vie in that province. 1 ask members from central Canada who are here tonight, will they do the same to understand the situation in western Canada? Will the federal government, which gave Quebec members of Parliament the tools to fight separatism in Quebec, now turn around and give western Canadian members the tools to fight separatism in western Canada? 1 ask that very seriously.
What we are being given are policies which are not bringing people together but policies which are further dividing us. We have had members of the Liberal party come into Alberta and other parts of western Canada recently. 1 have heard of them being there and I have talked with people who have talked with them. I must tell you in all frankness, the image being left by Liberal members, including cabinet ministers, is that they are going to talk, sell, but not listen.
I say to hon. members opposite that if they will accept with reasonable objectivity the sentiments being expressed by myself at this moment, and by others in many walks of life who feel just as strongly about holding this country together, and if you will from your advantageous position today communicate with your government leaders, the Prime Minister (Mr. Trudeau), the Deputy Prime Minister and Minister of Finance and the Minister of Energy, Mines and Resources (Mr. Lalonde), breaking through that shell we will make some progress.
The other day the Prime Minister was informed on the floor of the House about oil rigs leaving the country. You and I know that he dismissed that. The fact of the matter is that there are 376 drilling rigs on the way to the United States. Some 60 have left already. This represents 22,500 jobs, not just in Alberta but throughout Canada, including central Canada. This is the result of a failure to get together on a comprehensive energy agreement that would unlock the Alsands, Cold Lake and Judy Creek major oil developments waiting to be developed on behalf of all Canadians.
We in the west do not understand why this country is willing to buy oil from Saudi Arabia and Mexico, cheap crude at that, at world prices when it will not pay, not the world price, not even up to 70 per cent, but just 40 per cent of the world price. What kind of an economist would you have to be to be able to rationalize or understand this situation? Western Canadians
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do not understand it. This is an affront to us. It is an affront that the Canadian government will solve its energy problems by buying more offshore oil now at a $1 million a day increase because of the latest OPEC price increases, on top of the $4 billion we are paying annually, when it will not pull out all the stops and do everything possible to get an energy agreement on behalf of all Canadians and get jobs for Canadians throughout this country. That is why 1 am devastated. There is no need for this.
Members of the opposition always criticize. Hon. members on this side have put forward tonight a host not only of ideas but also of policies. This party is well on record. The Alberta government is well on record as seeking the precise formula for a fair, equitable and comprehensive energy agreement.


John Horton McDermid: For Canadians, not for Saudi Arabia.


Douglas Roche: It is not just a narrow Albertan viewpoint I am trying to give the House. 1 am giving a perspective from Alberta but one which has national scope. It is for the wellbeing of our whole country. Let us unlock the process and get it started again. Let there be some Liberal member tonight who will stand up in this House and say to the government that it is right on behalf of Canada, and in the face of the emergency economic situation we have, to push and to do everything possible. I can tell hon. members that the response in Alberta would be positive. The people of Alberta do not want to separate.
With my colleagues, 1 am doing everything I can to cool that separatist movement out there. The newspaper I have in my hand says, "Albertans believe in a United Canada too." We have to take out ads to tell people that now. Why should that be? 1 ask hon. members opposite to help us by giving us some of the tools which we gave members from central Canada and particularly members from Quebec in the time of their crisis. 1 make my plea not just for Alberta. 1 make it for the whole of Canada which all of us here tonight represent.


Some hon. Members:: Hear, hear!


Douglas Roche: Mr. Speaker, if you have another minute for me, I want to close on this note. There is a lot to be said about the role of Canada, and much has been said here domestically about the opportunities we ought to be taking to advance our economy. 1 believe that in the world community today there is a very special role for Canada. Reference was made to the North-South task force a few speeches ago. The North-South task force reported this week right here in Parliament. Its report is fairly extensive and I will not go into it now, but its essence was that Canada has a real role to play in helping to establish economic stability in the world. Indeed, Canada has an obligation to do that. We talk in that report about Canada's role in improving facilities in the World Bank and the International Monetary Fund to get funds recycled out of the OPEC countries and into the oil-importing and least developed countries which contain millions of people who severely lack basic human needs.

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These are very big problems. We are talking about the stability of the planet and the security of the world. We are talking about systems by which there can be equitable sharing of resources and capitalization in the world. This is a role for Canada to play, not alone but in concert with our allies and industrial partners. We may not be able to do that. The report which came in was a lot of work for members of Parliament who participated in it, but that report will hit the library shelves. Why? The Canadian government today is unable to resolve satisfactorily its domestic problems because we are so hung up on the problems of our economy, the lack of an energy strategy and the constitution. We are so inward, torn and divided that we will not be able to make the international response the world is waiting for.
You have been very indulgent with me, Mr. Speaker, and I thank you. I thank the members who have listened to me in this debate, and I sincerely hope that they will do everything in their power to communicate the urgency of the message 1 am giving tonight to the Canadian government.


Some hon. Members:: Hear, hear!


Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, it is with pleasure that 1 take part in this debate tonight and support the motion put forward by my leader. The debate this evening has been very interesting.
1 had a great deal of optimism when this motion was allowed to come forward and the debate was allowed to occur. As a matter of fact, I was under the impression that in order for it to come forward there must be some support on the government side of the House for such a debate. I hoped that out of that support there might come an announcement that members of the cabinet or whoever it is over there who makes decisions recognize that there is a crisis in this country and would in fact be prepared to announce some program to alleviate the difficulties which are facing the people of this country.
I was absolutely astounded by the speeches given by hon. members opposite tonight. The Minister of Finance (Mr. MacEachen) said nothing. He said we are doing just fine and that there is no problem. The Minister of State for Finance (Mr. Bussieres) talked about whipping up hysteria and extremism. The Parliamentary Secretary to the Minister of Finance (Mr. Evans) 1 suppose took some liberty and distilled everything in his own riding into just great shape.
However, when I heard a speaker prior to the previous speaker I finally got a sense of where the organization opposite is. In my area of the country we usually define a Liberal as somebody who can jump up and sit on a picket fence without a grimace of pain. That is exactly where hon. members opposite are. They talk about extremism and about how they are sitting nicely in the middle with that picket jammed you know where, but they are doing absolutely nothing. The same speaker started on a high note. 1 really identified with many of the things he said at the beginning. It is difficult to find solutions to problems. Hon. members opposite say they recognize the dilemmas, but we are supposed to be ogres for implying that
they do not care. However, it almost makes it worse if they do recognize them and do not do anything. That is worse. At any rate, it was a very enlightening evening.
There is one other thing I just cannot pass up. The hon. member drew a conclusion by extrapolating from the fact that the Liberal party has been in power for a good part of the century that the people of Canada must like the picket solution. I listened to many members on my right tonight, and 1 understand why hon. members opposite are in power.
Let us look back to the last Parliament and at some of the things that government did. I heard one hon. member speak vehemently in support of small business, but during the last Parliament small business people in my riding were asking if there was nothing I could do as their elected representative to get those fellows to tone down their policies, and especially their interest rate policy, before they ruined small business.


John Horton McDermid: They were a lot better off then than they are now.


Raymond John Skelly: A little bit, they know. I must admit that, but what is the difference? If hon. members to my right were in power, that is exactly where we would be now.
In spite of some colossal blunders like moving our embassy in Israel to Jerusalem, despite dismantling Petro-Canada and the interest rate stunt, the previous prime minister was one of the most improved players in a few areas in this House. Now he is walking the country boosting his leadership by apologizing for all the mistakes he has made. He is further ahead than hon. members opposite, as demonstrated by their performance in the House tonight
Members of the Conservative party often criticize us for throwing them out of power, but in reality the people of Canada threw them out of power. They did that because of the policy of dismantling Petro-Canada, the policy of moving the embassy to Jerusalem and the interest rate policy. I suppose that government frightened the people of Canada so badly that they just went after the lesser of two evils. One of the reasons the party opposite has been in power so long is the actions of several Conservative governments. I think we should look back to the First World War when the Conservative party committed suicide in the province of Quebec. It has never recovered. That firmly placed that group over there in power.
When the frustration finally arose and there were enough Canadians who said that Liberals are no good, they put in R. B. Bennett and the Conservatives and immediately ensured these guys another two decades of power. I think back to the statement, "We have been in power, therefore we must be good". If you look at the number of minority governments that they have been endowed with over the years in the decade from 1921 to 1930 and again in the 1960s, I look forward in a short period of time, if this group ever recovers, to a great many more minority governments because the people of Canada do not trust them.
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Let us look at some of the reasons for this lack of trust. First, there is really a crisis in this country in many areas and it is clearly the Liberal government's fault. In the last election 1 remember the Prime Minister of Canada (Mr. Trudeau) stumping the country in his arrogant fashion. I use that term reluctantly, but when people were saying there were too many unemployed in this country, the Prime Minister said to them that if the unemployed wanted to work, they should simply get off their butts. Then when farmers were having problems in this country, the Prime Minister said that farmers are nothing but chronic bitchers. In my province people are very concerned about the dangers of nuclear power. The Prime Minister said, "You will get nuclear power whether you like it or not."
In the 1979 election the Prime Minister and his party got their just deserts. The were turfed out with vigour. Had the Leader of the Conservative party been anyone else, they would have been slammed in with a majority. Nevertheless, we campaigned after the fall of the Conservative government in-1980. 1 remember clearly the candidate in my riding. The issue was again leadership, with the Conservatives on the one hand saying "Our leader is there but he has some liabilities", but the Liberals saying "Our leader does not count any more. We now have a committee in the party and it is going to back to the backbenchers in making policy and giving guidance to the government."
That does not exist any more. Clearly the statement the other day is the continuation of the old Trudeau. When the announcement was made that food prices were dramatically rising, interest rates were rising, the cost of housing, the cost of clothing and the cost of food are going up, low-income Canadians and senior citizens are in trouble, people asked: What will the government do about this? Clearly promises were made in the Speech from the Throne that the government would protect those people. The Prime Minister's answer was, of course, as we know, that they can rearrange their budget. But most of the income of most Canadian families is spent on food, clothing and shelter, three items. That probably takes up all of the inadequate income of low-income Canadians or senior citizens. I would challenge him to say which one of those items should be cut, because that is all that is available to cut.
I really resent the suggestion that the proposals made here are extremist, that they are whipping up hysteria. I resent that because what we are having is a difference in perception. They do not see what is happening in this country; they do not see the crisis, but we do.


An hon. Member:: There are only two Liberals left over there, so how could they?


Raymond John Skelly: I suspect that the Minister of Finance simply packed his bags and left. That is the kind of interest he has.
Let us take a look at unemployment for a moment. In November it was mentioned that 787,000 Canadians were out of work. They do not count all the Canadians who want to work if opportunities are available. There is a projection of 1,026,000 unemployed. That is too many. We have put for-
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ward a number of suggestions in the House and on the campaign trail. If those are not acceptable, we challenge the government to come up with some suggestions and not just sit there. One of the labour surveys was saying that 44 per cent of the people are no longer looking for work. All we are saying is that Canadians have a right to decent employment, that is all. We have put forward numerous suggestions. If they are unacceptable to the government, let us accept the principle that a Canadian has the right to a job in the country, and then let them get going with some Liberal programs that might fill the bill. If that is not a crisis, 1 wonder what level of unemployment the government would accept as a crisis in this area.
Let us take a look at housing. In my riding the housing situation is critical. In one of the communities where a temporary expansion is going on, people sleep in the park or in automobiles because no housing is available. Then when we make a suggestion, the Minister of State for Finance calls it extremist; he says it will ruin the country, that it is hysterical. I have heard the minister in charge of CMHC say that many people in AHOP homes are turning in the keys and giving the house back to the government. CMHC is attempting to flog off 20,000 of these homes. Mortgage rates are well up over 15 per cent now.
When 1 was going through my riding one day about a week ago I was looking in the paper at advertisements for the sale of homes. I found two-bedroom homes running between $150,000 and $200,000. It is just incredible. Vacancy rates in many of the major cities in this country are below zero. There are line-ups of people waiting for housing in places like Victoria, Vancouver, Calgary, Saskatoon and Toronto. There are no housing units available. If we go back and look at some of the Indian communities, we find another crisis there. Half of the homes in the Indian communities do not have running water. There is an immediate need there for 11,000 new homes and 40 per cent of the housing in Indian communities needs to be replaced or substantially repaired.
What does it take to have a crisis in this country? One point which drove it home for me is when I was talking to a young woman in Victoria who was out of work. She had been out of work for some time and looking vigorously for work, but she also had no place to stay and no income on which to fall back. I asked her what she did. She told me that this forces her into a type of informal prostitution. She said, "I have to find somebody to live with. I don't like it". You guys over there are doing it. The government is creating that kind of situation in Canada. There is a dramatic shortage of housing. The situation is very serious. If that is extremism, if that is whipping up hysteria, so be it, but that situation exists in native communities and it must be dealt with. That is the purpose of the debate tonight.
With regard to small businesses, I really have trouble differentiating between these two groups here. As much as we are alleged to be in bed with the Liberals-the Tories are forever accusing us of it-when 1 see the voting on the Bank Act supporting the banks, it is the Liberal party and the Conserva-
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December 19, 1980
Economic Conditions
tive party voting the same way, and on many positive suggestions we have put forward it is those two parties voting together. When small businesses complain about interest rates, they complain about the Tories and then about the Liberals. Many of the policies of the previous Parliament and of this Parliament have been identical. I think it is a serious situation.
What is needed? I think the suggestion put forward by the leader of our party today and by our financial critic can be summarized in a very short statement, that there has to be some immediate relief for those who are suffering because we are in a crisis situation. It cannot be allowed to amble along and cure itself by chance. There are people who can no longer afford decent food, clothing and shelter, which are basic rights. We proposed a cost of living tax credit in order to control some of the more outrageous price increases. We suggested a fair prices commission. If those suggestions are not acceptable, we challenge the government to get out and relieve the crisis situation. They are not written in stone, but if they are unacceptable the government should do something about the crisis. It is that simple.
In the long term we have gone through a tremendous period of Liberal government. It was described as ten lost years in the last election. In many areas the control of this country has fallen to foreign-owned multinational corporations. Until something is done about that control, and who will control the basic direction of our economy, we will not resolve these programs. We will continue to export natural resources and capital out of the country in the form of interest payments on loans and dividends to foreign corporations. We will never see the maximization of economic benefits for Canadians. They will always occur as we ship copper ore to Japan for processing, as we ship iron ore, coal, natural gas, and all other commodities sent out of the country in an unprocessed form. We are shipping away jobs. The government has talked about an industrial strategy, but that is all it is at this point. When will it arrive?
The automobile industry is flat on its nose. We see research and development, production capability, and new fuel-efficient cars lodged firmly in the United States. What is happening here? Where is the industrial strategy of our government? Another area of very serious concern is the extent of corporate concentration in the country. The situation exists where a smaller and smaller number of firms control more and more of the Canadian economy. The government promised competition legislation to deal with mergers before they occur and to deal with some of the more serious flagrant violations of what normally is assumed to be a competitive situation. A competition law is extremely important. In long-term restructuring we need an industrial strategy to turn the country around and provide benefits to Canadians. To solve the crisis on a longterm basis, we need a competition policy to stop the concentration of the economy being in the hands of a very few people.
The hon. member for Skeena (Mr. Fulton) dealt with the fishing industry. I think this is typical of the problems within
government which have created the crisis. The government said some years ago that there were too many boats chasing too few fish. It opted for a licence program which was basically a $5 fee, up to something which cost $7,000 per tonne. In order to obtain a reasonably-sized fishing boat, one had to pay in excess of $50,000 to buy the licence and then probably another $50,000 for the vessel. We ended up with artificially-created costs. A lot of people went out and borrowed to purchase fishing vessels. In the process of trying to recover more income from fishing, it was necessary for the fishermen to update their boats by purchasing expensive gear to increase their fishing capability. Once the government realized that there were a smaller number of vessels with greater fishing capabilities, it cut down on the amount of time they could fish. The government capitalized even further, and the inevitable happened.
The government created a situation in which fishermen on the coasts are suffering severely right now. There are high interest rates on high debts, and the fishermen are being asked to put their homes up as security. I sit down with those remarks.


Some hon. Members:: Hear, hear!


John Albert Gamble: Mr. Speaker, this debate has been raging for ten hours. It is to deal with a genuine matter of urgency, within the provisions of Standing Order 26, which calls for immediate and urgent consideration. The subject matter is the unreasonably excessive increase in the rate of interest which must be paid for loans in Canada. Those interest rates currently exceed 18 per cent at prime rate.
These high rates of interest were explained by the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) as being required for one of two reasons, or perhaps a combination of both. He told us that they were necessary in order to retard inflation. He advised us that it was absolutely essential to maintain these high rates in order to save the declining value of the Canadian dollar. In sustaining his initial point, the minister referred to his budget which was introduced in the House on October 28. He told us that within this document there was not a reference to an increase in taxes because he recognized that tax increases in fact would create a spur to inflationary pressures.
While it may be acknowledged that the tax rates imposed under the Income Tax Act have not been increased, that is not the end of the matter. What is a tax but a form of extraction by government from its citizens without their concurrence? What we have is a variety of extractions from the citizens of Canada taking a number of forms. The premiums payable under the Unemployment Insurance Act are substantially increased for both employees and employer; that increase is a form of taxation. Approximately $400 million, which otherwise would have formed a deficit of the government as a consequence of the operations of the Canada Post Office, is to be recovered as a result of increased postage fees at a time when the bill before this House related to this matter establishes a monopoly for the corporation intended to be estab-
December 19, 1980

lished, with the result that the public has no option but to pay in one form or another an additional $400 million. It is an extraction from the citizens of Canada without their concurrence.
Also there is a Canadian ownership charge which is designed to permit the federal government to acquire control of one or more of the multinational oil companies in Canada. Although there is no reference in the budget to the rate of charge, from an examination of the budget papers, and on the basis of a calculation assuming that we are dealing only with light Canadian crude, the charge would amount to 12 cents per gallon. However, a great deal of the crude oil processed in Canada which would be subject to this charge is heavy foreign crude. If blended in the fashion recommended by the government, it would result in the imposition of a much higher per gallon charge for gasoline.
Also there is a special new natural gas tax at 30 cents per thousand cubic feet. In the short term, this year it will have the effect of extracting an additional $250 million from the public for the period ending March 31, 1981, and a total of $6.6 billion from the date the tax became effective until March 31, 1984.
What are the effects of all these taxes? The very reasons the minister gives for high rates of interest, he destroys with a budget which is designed to accomplish the very opposite.
We are told by the minister that the second main purpose for high rates is to insulate the declining Canadian dollar. The minister has referred to the performance of the rates in Canada as being likened to that of a roller-coaster. My preference, Mr. Speaker, is to suggest that they have, of late, performed much in the fashion of a skyrocket.
Who are the Canadians who will be affected by these high rates? All consumers who borrow for the purpose of making purchases of consumer goods or properties, all businesses in Canada, home owners who are renegotiating their mortgages, and government itself. What consequences flow from the imposition of these high interest rates? Clearly, in the case of the consumer and business, in the event that the decision is made, because the rates are so high that no purchase shall occur, the business community, whether it be a business community which supplies products which the consumer is buying or the business community which is producing the product which is being cut back, will retard its development and expansion. It will not require the number of employees it had in the past. The resultant effect on the entire community is one of increased misery.
Those among the public who are in the process of renegotiating their mortgages find themselves in an extremely difficult position. By way of illustration: in the event one were dealing with a $60,000 mortgage which had to be renewed with the increase at an average rate, over what might have applied before the renewal, of 6 per cent, the effect would be a requirement for an additional $300 a month in mortgage payments for interest alone. But the matter does not end there.
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That $300 a month, or $3,600 a year, is an after-tax amount. It would take someone in a 40 per cent bracket $6,000 of before-tax income to produce a sufficient amount with which to pay the $3,600 a year. But we cannot all find $500 a month by simply demanding it, by simply suggesting that since we require those funds they are automatically made available. The consequence for many, too many, is that this Christmas and immediately thereafter they will receive a message of cheer from the Prime Minister (Mr. Trudeau) which will read: "Merry Christmas. I am tendering you your writ of foreclosure."
These are matters with which the House should not deal lightly. They are serious. They affect the citizens of Canada who have helped to build this nation with their energy and determination. The human tragedy continues to grow the longer this high interest rate program, supported by the government, is permitted to continue.
The business community is already being assaulted by bankruptcy after bankruptcy, while others more fortunate in the community simply take the easy step of cutting back and laying off employees in the hopes of saving their business future. Of course, the result is the growth in unemployment and the human tragedy which flows therefrom. How will the government be affected? It will immediately be required to make higher unemployment insurance payments, which will result in a higher deficit. Today we are looking at a $14 billion deficit with a $10.4 billion charge for servicing the national debt.
As to the effect upon the government itself of promoting high interest rates, two things will happen. Either the payment of those high interest rates will, in turn, create a higher deficit, or higher taxes must be imposed. In the former case, the creation of a greater deficit has a depreciating effect upon the value of the Canadian dollar, one of the very things which the minister suggests he is trying to avoid. So by creating high rates he is affecting the value of the dollar in the very fashion which he professes he wishes to avoid. In the second case, there is a decline. High taxes result in a decline in business expansion and development. As taxes increase, business declines. It is a simple as that.
Were it not for the fact that we are faced with the real prospect of our southern neighbours enjoying a tax rate considerably less than what they now pay, the matter would not be as bad. But the president-elect of the United States, and those who supported him, have promised the American public a 10 per cent tax reduction for each year over a three-year term. If that happens then the effect on the Canadian business climate will be devastating. I have urged the Minister of Finance to seriously consider the consequences of what most assuredly will be a business-oriented budget in the United States; he has declined to do so.
What steps should the government take to reduce interest rates? Surely that should be the subject matter of this discussion this morning. I suggest they take such steps as will sever the link between interest rates and the value of the Canadian dollar by promoting the growth of the dollar in its own right.

December 19, 1980
Economic Conditions
Canadian currency is but another commodity and its value will increase or decline on the basis of supply and demand.
What can be done, then, to increase the demand or reduce the supply? There are a number of steps, Mr. Speaker, which include providing a climate in which business and enterprise will flourish in Canada. The second step is to reduce taxation. Third, reduce the cost of government and eliminate waste and extravagance and the duplication of services. Four, retard the process of printing money in excess of the growth in the gross national product.
What about the climate for business? This is a climate in which only a carpetbagger would be intrigued with the prospect of success. Our federal government has driven a wedge between the east and the west of our country. With the constitutional proposals it has created an anathema between one section of Canada and another. Government has survived on conflict and division. We expend our national energies on constitutional debate and cultural and linguistic programs while our economic framework crumbles around us.
Mr. Speaker, these days are reminiscent of the days when Nero fiddled while Rome burned. There is a curious similarity between the Prime Minister of this country and that rather infamous and idiotic emperor of ancient Rome.
I dealt with the issue of tax reductions when 1 spoke earlier. What about the need for the reduction in the cost of government? Well, Mr. Speaker, the public has some rather recent illustrations of how well the government has managed our money. We were told this week of a $60,000 potential grant to the pro-Castro, pro-communist, former prime minister of Jamaica, Michael Manley, so that he may pursue his educational endeavours in Canada. We were told not long ago of the expenditure of some $1,360,000 by the language game Santa Claus, the Commissioner of Official Languages, who acquired 200,000 language games to be distributed without charge throughout Canada. We know of $250 million of Canadian taxpayers' money which is to be spent drilling and exploring for oil in the Third World. We know of $400 million of Post Office losses which must be picked up, directly or indirectly, by the taxpayers of this country while their service declines. We know of $577 million paid out this year to the perennial parasite, the CBC, and we know of $1.2 billion spent on foreign aid.
My suggestion is that it may well be time to have some regard for the possibility of saving some of that $1.2 billion, because this country, if it continues on the present path set for it by the government, will be in the category of the normal recipients. The government and their NDP friends and supporters have one common failing. They believe that the economy of Canada can sustain perennially incessant demands for funds to be squandered like water rushing from an artesian well. It is the people of Canada who create the wealth, the people who work and strive and expand their energies on developing a future for themselves, their families and their country, not the government.
The government produces nothing. It extracts, controls, harasses, picks our pockets and rides on our backs. Free the people who make the country great. Give them a chance. This government has proven itself unable to do so, and the consequences are apparent to us all today-the high interest rates of which we all complain, plummeting dollar values, rising unemployment and increased deficits to be borne not only by ourselves, but by our children and our children's children. This government of national destruction has been exposed for what it is, a dismal failure. Let it do one of two things: cure the ills to which we make reference or, in the name of God, get out.


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, I see the time is almost 6.15 in the morning. 1 must say that 1 have sat patiently since the debate began at eight o'clock and listened to members on both sides of the Flouse. 1 am impressed with the very large number of suggestions which have been put forth by this side. Unfortunately, from the other side we have heard nothing from the minister that would amount to anything more than a recognition that we are in a very serious situation. There were no creative ideas on how to handle this situation. The interest rate is 17.3 per cent at this moment, but later today it will be going up, and it may hit 18 per cent and go even as high as 19 per cent.
The results in my constituency, where there are many farmers, is a building rage and anger which will spill over in some form of action which will be very drastic for the country. As the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) put it, in 1921 the Progressives swept the west and had a real effect on this country. That could easily happen again.
This government is bringing together a constitutional package that turns the province of Alberta and other regional provinces into second-class provinces. It is an attack on the common-law heritage of rights protected under Parliament and the nationalization of a successful industry that is based in the west. It is a combination of that plus high interest rates for farmers who really borrow money at the front end and this will be disastrous for this country.
1 am pleased to be able to say that the hon. members for Ottawa Centre (Mr. Evans), Kitchener (Mr. Lang), Lambton-Middlesex (Mr. Ferguson) and Don Valley East (Mr. Smith) have faithfully sat throughout the evening and given the impression-and I believe the honest impression-that they have been listening. I ask those members to go back to their caucus and somehow get across the depth of feeling and the fact that we are not in this to be advancing our own cause, because there will not be an election for another three or four years. Many people will suffer in the meantime, and if they can get across that attitude to their caucus, it would be of tremendous benefit to the citizens of Canada.
I would like to explain how a couple of Liberal policies are having a disastrous effect. We know that OPEC formed its oil cartel in 1959 and that they formed that cartel in reaction to a 50-year conspiracy whereby the western nations permitted the creation of the seven sisters, that the combination of the western industrial complex and the seven sisters held down the
December 19, 1980

Middle East countries and other oil producing countries such as Venezuela and Nigeria.
For 50 years they put oil into Montreal at $2.35 per barrel. When any of the producing countries in the Middle East tried to increase the price, they ruthlessly and dramatically cut them down at the knees. In 1959 they finally got together and built a solidarity to form OPEC. But they were not able to get a first increase until 1971. Then in 1973 they had a major increase. We knew since 1959 that it was coming. We knew it was wrong. People were speaking out against that type of conspiracy which was holding down people throughout the world. Of course, the chickens have now come home to roost.
What did our government do? It was the government under our Prime Minister (Mr. Trudeau) who really should have been taking a position of leadership, certainly by 1971 when they were able to get the first price increase. But it did not do anything in 1971. Then in 1973 when the price went up, it did do something which was worse than if it had done nothing. What it did was to freeze the price of oil. While Japan and Germany went to world price, the two North American governments said they would not be subjected to blackmail.
They were acting as if the conspiracy could carry on and they were not facing reality. What happened was that it sent price signals throughout our system. It sent a signal to us as individual Canadians that we could continue to buy big cars and continue to waste. It sent a signal to the manufacturers to continue to produce the big cars, and so seven years down the road Japan and Germany, having made the adjustment, are now whipping us handily in the marketplace for automobiles.
So here in central Canada ordinary citizens are suffering a great deal because of a decision which the government took some years ago which in the circumstances was unrealistic. But it was easier as a matter of politics to try to continue to mislead people that they could have something for nothing. The chickens do come home to roost and that is where we are now. Then when the government does feel moved to do something, what does it do? It attacks a successful industry which was working hard toward putting us into a position of self-sufficiency. But that is gone now.
We must understand that in this country we really have three sources of oil. One is the imports at about 450,000 barrels per day for which we pay world price, $3 billion now and it will be $4 billion next year. We also have about 270,000 barrels a day which come from the two synthetic plants which are in place now, the Syncrude plant and the Suncor plant. They receive world price. They receive $38 a barrel and there is the promise of CPI for rates of increase.
Then there is the third source of oil which happens to be the light conventional crude from Alberta. We know as a matter of historical record that there were about 16 billion barrels of oil in 1947 when Imperial Oil first struck oil. Much of that oil has been used and we are now left with about five billion barrels of that oil which is cheap to produce. Only nine or ten years' supply is left because at one time we produced 1.2
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million barrels a day. The obvious solution to our problem is to bring on the synthetics and frontier oil. As the light conventional crude diminishes, we need to increase synthetic production. That is what Alberta's offer was to the rest of the country. Alberta said, "If you pay us up to 75 per cent, staged, for that decline in conventional crude, we will guarantee there will be enough synthetic tar sands plants on-stream not only to cover that declining conventional crude, but to cover the imported oil. Therefore, by 1990 we could be genuinely selfsufficient in Canada. Once we are self-sufficient we will not care what the Arabs do or what Mexico, Venezuela or Nigeria do. We will be self-sufficient and we can make those decisions then. However, Alberta's offer went beyond that. Alberta said, "Pay us that kind of money and we will also cover the entire infrastructure costs of putting in roads, towns and sewers to develop the tar sands. We will put money into Fundy tidal power, the lower Churchill, the lower Nelson and into transportation in the west. Out of that will come a much stronger country because every dollar spent will have the leverage and the multiplier effect in Canada rather than in Venezuela or the Middle East." The government rejected this offer.
Another area relates to agriculture. In Canada we have operated under a cheap food policy. It was easier some years ago to make a political decision to let our own agricultural processing industries go in favour of importing cheap food. The Americans with a warmer climate, three crops a year and oil at the conspiracy price of $2.35 could produce food more cheaply than we could. A political decision was made to import food. As a result, we lost 15 to 17 processing plants through the Niagara peninsula. We lost beef manufacturing plants in western Canada. But now that the oil price is up, the cost of importing food from the United States is enormous. But having destroyed our infrastructure, we are caught, because now we have to pay. As the Canadian dollar goes down, the cost of those food imports rises dramatically.
That cheap food policy has had another effect which is even more serious to us as a nation. The cheap food policy forced the smaller farmer off the land. The remaining farmers had to take on the additional land. The price of land rose, and in the meantime we printed more money. This caused the high land prices. The farmer who was surviving and wanted to be efficient, had to buy more land, take on more machinery and more debt. Our farmers now have a debt ratio which is absolutely staggering compared to what it was ten years ago when we started the cheap food policy.
If we continue on this path, it could end in our having only one farmer left. Many people in my constituency, including myself, have the feeling that it was not just an accident which happened. There is a group of people, whether it is the Prime Minister and his close advisers or a group of senior officials, who genuinely believe that central planners can make decisions better than the millions of Canadians individually. We could end up with one farm. There is evidence to lend credence to that. In the constitutional package, we note the glaring omission of the right to acquire and hold property. Why was that left out of the package? These planners are intelligent people.

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They had Diefenbaker's example as well as charters from all around the world. Almost all of them included the right to acquire and own property. Why was that provision left out of our package? We are most suspicious of that omission. If we ever get down to that level, we will lose our right and capacity to be self-sufficient in food. We have examples. Russia, at one time, was the world's second largest exporter of grain. Canada was behind Russia. Once they took away those plots of lands from the individuals and put them into state-owned farms, they were no longer self-sufficient. Mexico is another example where a small close-knit group, a kind of aristocracy, ruled the country. Mexico has since entered into a highly centralized planning system. That country, too, has lost its self-sufficiency in food and is an importer of food. Mexico used to export hundreds of thousands of tonnes of sugar. Sugar is now being brought into Mexico from other countries. Elaving killed off self-sufficiency in oil, 1 am suspicious that we are now in the process, however innocently it might seem to be, of killing off our self-sufficiency in food. When we reach that point, it will be a very dangerous situation.
A major contributor to it is the capital gains tax. Prior to 1972 we did not have such a thing as a capital gains tax. It was under that fiscal and financial regime that we built up an agricultural infrastructure which was efficient and productive and made this country a large exporter of food.
About 13 per cent of our land has agricultural potential. Only 4 per cent of Canada's land is class 1 or 2. On a global scale, Canada has only 3 per cent of the arable land. In 1972, the government under the present Prime Minister put a tax on this land. There is no doubt that that tax hurts. While there are some rollovers to spouses and to one child who might be farming, or to other children, the inequity occurs when a farmer tries to transfer the farm to children who may be farming, while being mindful of his other children, daughters who have married and moved away or other sons living away as teachers, doctors, even politicians. The situation is absolutely impossible because the land has increased in value so dramatically. Even if the Liberals had honoured their election promise of bringing in a 1974 value, it would have been a substantial help to the farming community. In about 1968 the land was equivalent to the 1974 value. By 1971 land value happened to be in a dip. The tax was brought in then, but the 1974 value reflects a clearer picture. The reality of the 1980 budget is that such a provision was not included. The white paper on capital gains tax, to my reading, clearly says that the government is anticipating not a reduction in capital gains but a substantial increase in capital gains. Whether or not members opposite in their political capacity agree with that, there is no doubt the document prepared by the bureaucrats clearly sets that out as a tone. I am sure knowledgeable people will agree.
There are two principles upon which we should not impose a capital gains tax on our agricultural land. We must remember that we have only 3 per cent of the world's arable lands. It is simply immoral for us to be taxing 3 per cent of the world's
land which produces so much food and which could continue to produce that food if we leave it in the hands of individual dedicated farmers. Soil is like their soul. That situation does not occur with state-owned farms where everyone wants to work only a five-day week. Individually-owned farms will keep the land productive. Within our own country it will retain a way of life. We will maintain efficiency. It will keep the cities on class 5 and 6 land and it will keep bona fide class 1 and 2 agricultural land in agricultural production. It will benefit them greatly.
In summary, I submit that the Liberal party has failed. Somehow it has lost control of this governing group. Whether, as I said earlier, that is the Prime Minister and a small group around him, a small group of advisers, or a level of bureaucracy, I do not know. I certainly hope members opposite will take a very close look at their party and try to get it back.
I submit that in 1979 the Canadian people made a decision when they put in Joe Clark and his government. While that government had a slow start in not calling the House back until October, it made some moves, basically the budget, which got this country on the right track. Clearly, it increased the price of oil. That sent the price signal which should have been sent to the Canadian people in 1973. If it had been done then, in the proper way, we would not now have the problem with self-sufficiency or the problems in the automotive industry. We would be able to beat the Japanese, Germans and others just as we have done in the west with our agricultural products.
During the 1930s we had to cut bait in the west. Three out of four farmers had to leave the land. We learned the hard lesson of having to compete in world markets. Now our agricultural farmers are not afraid of anybody. We can beat them. We have to get back to that as a philosophy in this country. Tariffs do nothing but delay the day of ultimate reckoning because others in the world do not have those tariffs. Therefore, it is only a short time before they beat us.
Every farmer was betrayed in this last budget because there was no capital gains rollover. Home renters were betrayed because promises had been made to them too. The home owners and renters, particularly senior citizens, had been promised a property tax rebate so they could stay in their own homes. That would have been of tremendous help.
A decrease in the deficit was a major help for them. It freed up that sense of individual enterprise so that if a person had a good idea, there was a proper climate in this country for him to get out, organize and bring people in to work. That makes wealth for this country. All that was lost as a result of a grab for power by a small group who really did not deserve to get power. I dare the government to call an election now. I believe the Canadian people are much brighter than the government gives them credit for. The NDP in particular would really suffer in the next election. I wish the government would call it.
December 19, 1980


Peter Joseph Lang: Mr. Speaker, the first thing I want to say is that contrary to what the member opposite feels, the last thing this country needs is an election.


David Kilgour: You wouldn't win your seat!


Peter Joseph Lang: The member opposite says I would not win my seat. The latest Gallup polls indicate that the Liberal party has 45 per cent support, about the same as they had during the last election, the Conservative party 31 per cent and the NDP 22 per cent. That was in November.
To get to the more important topic of interest rates inflation and the economy, as I said, it is now 6.30 and I have listened to the debate for ten and a half hours. 1 want first to present a general scenario of what I have been hearing and then deal with some of the specifics in the debate.
Most members are well aware that the dramatic events which have occurred in the OPEC cartel have had a major influence on inflation in this country and on our interest rates. At the same time, most members are aware that the branch plant economy we have in Canada makes it difficult for us to say we will lower our interest rates. We need investment in Canada. We need to make sure we can develop our own Canadian economy.
The Liberal government with its budget and its national energy program is doing this at the present time. It has taken a dramatic step toward Canadianizing the energy industry, which means taking control of the major part of our industry. Energy is the lifeblood of Canadian industry at the present time. As well, we are strengthening FIRA to try to bring back our economy so that we can deal with problems such as inflation and interest rates in a more constructive way than being subject to the influences of the United States or the oil cartel.
Some members of the opposition have made constructive suggestions over the past ten and a half hours. Looking at my notes, I am reminded that the hon. member for Portage-Mar-quette (Mr. Mayer) made some positive points regarding Wheat Board pricing. They are not suggestions I would agree with, but they were given in a constructive manner and that type of constructive suggestion is important. Others, such as the hon. member for Broadview-Greenwood (Mr. Rae) made constructive suggestions.
In this kind of debate we sometimes hear of new, viable solutions which may be better than the ones we have. I have not heard of better solutions to short-term or long-term interest rates in the ten and a half hours I have been here than what the Liberal government is doing right now.
For the long term, our government is taking the approach of getting control of our economy so that we are not subject to importing inflation. In the short term, we are taking a monetary approach which moderates the peaks of inflation so that we are four or five points below the inflation rate of the United States. So at the same time, we have to walk a tightrope in order not to lose too much investment from the United States
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and other countries and keep economic growth in our economy.
Although I believe the government has taken an economically realistic approach to our problems and although there have been some positive suggestions from the opposition,
I am concerned about other members of the opposition who have raised a doom and gloom scenario. I am concerned about this because it not only creates uncertainty in the business world, but for people in the labour force and those on fixed incomes who rely on government programs. In fact, it creates uncertainty for all Canadians and this kind of uncertainty is not helpful to the Canadian people or Canadian economy.


Walter David Baker: Mr. Speaker, I wonder whether the hon. member would accept a question.


Peter Joseph Lang: If the House leader for the Conservative party has some uncertainty or confusion which he indicates by wanting to ask a question, I hope the confusion will be cleared up during my speech and discourse. If not, he may read the remarks of myself and other Liberal speakers tomorrow in order to enlighten himself. If he cannot do that, I will be happy to answer any questions if he will give me a call at my office. I will be in my office by nine o'clock this morning. I have a squash game in an hour and a half.
As I was saying, the doom and gloom scenario concerns me because of the climate of uncertainty it creates. When the Leader of the Opposition (Mr. Clark) made the point in his speech last night that the energy minister for Saudi Arabia had been talking about the possibility of the price of a barrel of oil going to $80 he implied that this was somehow related to Liberal government policy. That is precisely the reason this government is not tying its energy policy to world prices, or its pricing policy to world prices. We know that for every SI increase in the price of a barrel of oil we would increase our inflation by .5 per cent. If we had gone along with the Conservative budget and linked our oil prices to world prices then the $80 per barrel scenario would have been even worse, and that would be under the budget of the Leader of the Opposition. I fail to see his point in that regard, other than to create uncertainty and a scenario of doom and gloom.
The Leader of the Opposition also made a point regarding his concern for the poor and the unemployed, yet he would have tied us to the OPEC cartel and we would have reached 75 per cent of the world price of oil by 1984. We all know the effect this would have, not only on inflation and interest rates, but on the unemployed and the poor.
The Leader of the Opposition also made some points about the rubber industry. He indicated that the problems of the rubber industry in the area in which I live, in Kitchener, are the result of high prices for oil, although his budget would have created higher prices for oil. If the Leader of the Opposition, who spent two days in Kitchener, had spent more time listening to the concerns of the people of Kitchener, and more time understanding their position, rather than politicking and

December 19, 1980
Economic Conditions
trying to obtain delegates to support his leadership, he would know that the rubber industry in our area is in trouble because of the branch plant economy existing there.
B.F. Goodrich and Uniroyal are doing well there now, particularly in Kitchener. The problem is that the parent company, particularly Uniroyal in the United States, is in great difficulty. As a result there is some question as to whether it will recall its capital, resources and production to the States to solve their problems. Kitchener may lose some jobs in the rubber industry and this is a concern.
The second major thing the Leader of the Opposition failed to hear in the riding of Kitchener-Waterloo about the rubber industry is that there has been a radical change. It has moved to the new age of radial tires. Many companies have had to change production to radial tires. Although the companies in Kitchener have made this change, there has been a production problem, the fact being that Michelin has cornered the market because of its brand name. This has created a very competitive situation.
I suggest to the Leader of the Opposition that if he is going to talk about economic problems he should get the facts. If he is going to talk about those problems in my riding, after being there for two days, he should get the facts, listen to what the people say about the rubber industry, and resist the temptation to relate those problems in some vague way to world prices for oil. If he is going to relate the problems to oil then he should have come out with a budget which involved "loyalism" in order that his argument might be consistent.
I should like to turn now to the comments of the hon. member for St. John's West (Mr. Crosbie). Last evening I jotted down some notes. I was very concerned to hear him say that Canadians are living off the rest of the world. I do not think Canadians are living off the rest of the world. I think Canadians are working very hard and doing their very best to be productive in our economy. Those who are not employed are looking for work.
The hon. member for St. John's West said that problems with our economy started with the former Liberal finance minister, Hon. John Turner, at about the time he introduced indexation. I can tell you directly Mr. Speaker, that the people in my riding very much want retention of indexation.
The last comment I should like to make in respect of the remarks of the hon. member for St. John's West is that when he stated that this government had turned its back on the elderly, he was being inconsistent with his budget which had no guaranteed income supplement. Our budget does do something for senior citizens on fixed incomes. In fact, the Liberal government has a history of social concern manifested by every social program on the statute books. We can go through them all; they include unemployment insurance, medicare, old age security, guaranteed income supplement, family allowance, and child tax credits. All of them are Liberal programs.
I find the statement by the former finance minister that this government has turned its back on the elderly rather inconsistent and not really contributory to this debate. His remarks
have no relevance in respect of what we can do toward a short or long-term solution to interest rates.
The Leader of the Opposition also mentioned that he was concerned that we did not have a national energy program which dealt with self-sufficiency. I was very surprised to hear that, because that is one of the three major aims of the national energy program.
On this side of the House we are dealing with both sides of the energy equation. We are providing incentives so that exploration and development of new oil and gas resources can be found and we are providing means for getting away from the use of oil. This will enable us to be self-sufficient in oil, and that is the only energy area in which we have a shortage. Over all we produce more energy than we consume. We are reducing the demand for oil. We have come through on our election promises of committing ourselves to a pipeline to the maritimes and to Vancouver Island.
We are following a policy of "oif oil" so that we can obtain self-sufficiency by 1990. I suggest to the Leader of the Opposition that he read the national energy policy in order that he can be enlightened as to that part of the program and participate more effectively in debates on topics such as this.
I think at this time of the night I should limit my remarks.


Some hon. Members:: Hear, hear!


Peter Joseph Lang: The main points I wanted to make are these: I am concerned about the doom and gloom scenario which has been created, spreading uncertainty in the Canadian economy that does not need to exist. We are a country with vast national resources; a country that has the labour force, the technology, and the people needed to attain a strong economy with a secure energy future, particularly with the co-operation of government, business, labour and all Canadian people. I should like to end my remarks on that positive point.


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I see it is now ten minutes to seven.


An hon. Member:: You can tell the time.


Stan Darling: I came into this House last night at eight o'clock, so I have been here a considerable time waiting for the opportunity to say a few words. The New Democratic Party and its leader in particular are to be commended for bringing in this very important motion.


Some hon. Members:: Hear, hear!


Stan Darling: It zeros in on the serious economic conditions in Canada today and the exorbitant interest rates. Members of the New Democratic Party are to be commended. In their own minds they are a saintly group. Some are very good friends of mine. They are not good friends politically, of course. I wonder what that great Privy Councillor, who received that well-deserved signal honour to which he certainly was entitled, thinks about when he is rolling around in bed some nights. He
December 19, 1980

castigates the present government, yet last December 13 in its wisdom his party made the great decision to defeat the government then in power. They would have called that government a disease but, if they were honest, I would bet they would say that the cure is a hell of a lot worse than the disease ever was. Is that correct? I would like an honest answer to that.


Bob Rae: It is the same disease.


Stanley Howard Knowles: We don't discriminate.


Stan Darling: I believe all of us, those who are here, and many who are not, are concerned about the way things are going and about high interest rates. I am sure this is true of hon. members from both sides of the House.


Walter David Baker: Except for the hon. member for Kitchener (Mr. Lang), who wanted to go play squash.


Stan Darling: The hon. member for Kitchener (Mr. Lang) was here but did not have time to answer the House leader's question. I will concede at least that he was here.
I shall be returning to my riding. I am sure all members on the Conservative side will be returning to their ridings. They will have a much happier Christmas than will hon. members on the government side, who will be facing irate constituents who will ask them in plain, unvarnished language what the hell is going on. They will have to do much more talking than those who were here did tonight. The saintly group to my left will probably have to answer some questions when they go home.


Bob Rae: No, we will not.


Stan Darling: With the exception of constituents who are died-in-the-wool socialists they will be told by their constituents how stupid they were to get rid of the Leader of the Opposition (Mr. Clark) and his government, who had some positive ideas, and to let the tribe opposite in again. Hon. members opposite have proved time and again that they are not fit to govern.
I managed to be returned in my riding in February. I won the previous May by a substantial plurality of 8,500 plus, if my memory serves me right. Then last February there was a rejuvenation or resurgence from political death of the Prime Minister (Mr. Trudeau), and many people in that great riding of Parry Sound-Muskoka were gullible. I say gullible because over half the people voted against the Clark government. I believe in that election I received only 42 per cent. This week I spoke to a group of substantial businessmen at a Rotary Club meeting in one of the towns in my riding. 1 did not say this, but I felt like saying that if they are angry about interest rates and yelling blue murder it serves them right. That is it in a nutshell.
Forty-two per cent still had enough faith in me as the member to return me. I wonder what goes through the minds of people who voted for the NDP or the Liberals when they see the present outlandish interest rates. In the riding of Parry Sound-Muskoka I felt that the 18-cent gasoline tax was the
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thing which people just would not buy. I will be honest, and I usually am-


Bob Rae: That's right.


Stan Darling: Do not let me say anything different.


Some hon. Members:: Hear, hear!


Stan Darling: I call them as I see them. In any event, a great many people felt that that 18 cents was too much. They were given a promise, as if on a stack of Bibles, by the Prime Minister, that paragon of virtue who decided to leave the political scene, who stated right here in this House that he had done enough damage to the country already. Then with the help of the NDP his carcass was revived, and look at the mess we are in today. The NDP would have to agree that when the people voted against the Leader of the Opposition and a great many Conservative candidates throughout the country, they felt that they had been promised and assured that the price of gasoline would remain at about $1 a gallon or a little less. An hon. member opposite, who is an economic expert, is shaking his head, but that is what the people of Canada thought. They thought the price of gasoline would be $1 a gallon and would stay there.


John Leslie Evans: That is nonsense, and you know it.


Stan Darling: It is, but the people thought that the price of gasoline would not increase more than 18 cents. They were assured by the eminent Minister of Energy, Mines and Resources (Mr. Lalonde). The present Prime Minister swore on a stack of Bibles that the price would not increase more than than 18 cents, and now it is up to $1.40.
It has been mentioned before that there are actually 853,000 unemployed and, as has been rightly been pointed out by members of the NDP, that is a joke-a joke in the sense that the actual figure is as high as 1.3 million, which includes people who have thrown up their hands and given up. I presume they are eking out an existence on welfare today because they have nothing else to do. This is a serious matter, Mr. Speaker. The great Liberal government across the way says it has everything under control and that anything which is not working properly is not its fault. The government blames the problems we have on the sun, the moon, the stars, the United States, this, that, and the other thing-anything but its own inefficiency.
There is no question that the Minister of Finance (Mr. MacEachen) is a Machiavellian wizard. He engineered the great Christmas party.


Mr. Turner:: You didn't have enough votes; that's all, Stan.


Stan Darling: Be that as it may, the Minister of Finance now tries to weasel around and give either non-answers or answers which are absolutely ridiculous with respect to the mess we are presently in.


Mr. Benjamin:: It is called free enterprise.

December 19, 1980
Economic Conditions


Stan Darling: We are much better off with free enterprise than we would be with the glorious social system which my colleagues on my left advocate. Let us look at some of the great socialist countries where everything is free and wonderful. I understand that the U.S.S.R. has a great charter of rights to protect the freedom of citizens and to provide freedom of this and freedom of that.
This brings up another point. If the government would pay more attention to the important things instead of wasting so much time on the constitution, as if it were the be-all and end-all-the people of Canada do not give too much of a damn about the constitution-


Some hon. Members:: Oh, oh!


Stan Darling: -especially the millions who are looking for jobs, and the senior citizens and all those on fixed incomes who are worrying about the high cost of fuel, about paying their rent.
Some members of the government have said we have offered no suggestions. We are not in a position to implement measures which will help to alleviate the situation in the country. You birds over there are the wise owls and are supposed to know it all, but you are doing very little about it. This is what you are responsible for and what you will have to answer for. It is all well and good to talk about the constitution and have people traipsing to Room 200, morning, noon, and night. It would be a lot better if there were as much interest shown in high interest rates.
It is amazing to see some of these Liberal rags, these great Liberal dailies which have been the support of Liberal governments through the years. I find the headlines amazing. The headline in yesterday's Citizen reads: "Christmas Gaiety Mocks City Poor". I am quite sure many hon. members have read that. It refers to the serious problem which exists even in the wealthy city of Ottawa, as far as the poor and the disadvantaged are concerned. Starting off that news item are the following words written in italics:
To seek to create the just society must be amongst the highest of human purposes . . . On the never-ending road to perfect justice, we will succeed in creating the most humane and compassionate society possible.
That is a very high sounding, plausible statement.


An hon. Member:: Who wrote it, Joe Clark?


Stan Darling: No, Pierre Elliott Trudeau wrote it in 1972. Is that not a big laugh?
As I mentioned before when I was speaking about the editorials, it is amazing to see what some of them are coming up with now. We find the following headline in that great daily, the Toronto Star. "End Interest Rate Madness". Is that the issue of December 18? It is, like hell, with due respect, Mr. Speaker! It is the issue of November 29. It reads:
The interest-rate madness that afflicted the nation last spring is upon us once again. The Bank of Canada has now raised the interest rate it charges the chartered banks to a whopping 13.95 per cent-
The Bank of Canada and the federal government try to justify this upward spiral by arguing that high interest rates are required to curb inflation-
Then it goes on and ends with the following statement:
Whatever short-term inflationary impact such policy might have would be more than offset by the greater industrial productivity, new job creation and sustained economic growth and expansion.
I certainly agree with that. I am wondering what they will come up with in today's editorial when the situation becomes much worse.
Another heading in The Citizen of December 18 reads: "The bad news and worse news about our economy". There is good news there. It reads:
The good news is that governor of the Bank of Canada Gerald Bouey at least hasn't lost his sense of humour.
That is the good news, and I am sure the poor people of Canada will be delighted to hear that. He was interviewed. After coming out of a meeting he was asked how he fared when he was facing the ten provincial treasurers and the Minister of Finance, to which he replied, "I left to wild applause."
The article goes on to read:
The bad news is that in private Bouey apparently has advised officials and bankers that he believes the U.S. policy of high interest rates is wrong, but he has no choice but to do what he is doing to Canadian interest rates, even though he doesn't believe it will do much good-
That is, to help inflation or to help the economy.
Mr. Speaker, let me read the following to my wonderful friends to the left, from the same Citizen article:
So much for the bad news. Now for the worse news. A panel of four economic experts when interviewed all forecast Canadian interest rates will "cross" or go higher than U.S. rates before 1981 is ended.
Let the Liberal government as well as our economic expert from Ottawa Centre (Mr. Evans) read that and digest it. The article goes on to read:
Typically, Wood Gundy chief economist John Grant expects that today's 3-point spread in our favour will turn into a 1 per cent or more handicap-
Canadian rates will be forced ahead of U.S. ones-
This is something that frightens many of us a great deal. The consumer price index was up 1.2 per cent in November. It is now 11.2 per cent above last year's level, the worst year over year performance of the consumer price index since March of 1975 when it stood at 11.3.
The cost of buying trucks and cars rose by 5.2 per cent last month. The cost of gasoline, as I have already pointed out, is up 3.1 per cent. The cost of fuel is up 4.2 per cent, and domestic gas is up by 4.2 per cent. As you are well aware, Mr. Speaker-but we have to keep hammering away at it-the Bank of Canada rate is 17.3 per cent, and the prime rate for the banks to their top customers is 18.25 per cent. That certainly does not include the many little businesses which are struggling to save themselves from bankruptcy. Concern about this has been voiced by many members on the opposition side of the House. The situation is very serious. What will small businesses be paying for their loans starting today? They will be probably be paying 21 per cent because when they go cap in hand-probably some cannot even afford one-to the bank
December 19, 1980

manager, they will get that cold, steely look from him, and that is it. It is well and good to talk about prime rates, but what is that going to do to many of them?
Somebody mentioned pre-Christmas sales rather than post-Christmas sales. I managed to steal away from the House yesterday for 1 5 minutes to do some Christmas shopping, and I hope I will be forgiven. I found a sale on in one store which had reduced the price of its goods by 80 per cent. That store must be in a pretty tough situation.
Is my time almost up, Mr. Speaker? It has been a privilege to say a few words, even though it is ten minutes after seven o'clock. I shall be listening with interest to the many more speakers who are concerned about the situation. Let me say again, tongue in cheek, to my Liberal friends across the way, merry Christmas to you when you go to your ridings! I bet that a good many will be in their ridings for just one day and then they will disappear to Florida or somewhere else.


Bob Rae: Mr. Speaker, I rise on a point of order. During the course of his remarks, the hon. member for Parry Sound-Mus-koka (Mr. Darling) indicated that the headline "End Interest Rate Madness" was from the December 18 edition of the Toronto Star. I should like to tell him that the December 18 article of the Toronto Star is entitled: "End Interest Rate Falling". The hon. member is correct, so I am sure he will appreciate why I nodded to him and said it was from the December 18 edition. This article is exactly the same as the one from which he read. It must be a reprint which they put in every Thursday when interest rates go up.


Lyle Stuart Kristiansen: Mr. Speaker, despite the Christmas wishes of good cheer from the hon. member for Parry Sound-Muskoka (Mr. Darling), which were almost enough to draw me into a mellow mood, I will resist the temptation and deal in a more serious manner with the economic crisis we are debating.
A minute ago members on the government side of the House were down to a not-so-dynamic duo. A while ago there were the three mouseketeers. Now they are playing solitaire on that side of the House. Obviously the Liberals do not have much staying power.


John Leslie Evans: This one does.


Lyle Stuart Kristiansen: At 7.10 in the morning I suppose we can forgive them the lack of staying power. After all, some of us have put up with quite a bit during the last few hours, including a masterpiece of "MacEachiavellian" manipulation by the Deputy Prime Minister and Minister of Finance (Mr. MacEachen).


An hon. Member:: How do you spell it?


Lyle Stuart Kristiansen: Hansard will figure it out.
Not only that, but the blues are crying the blues, seeing the creeping pink panthers; there is the reds-under-the-beds scare, the feds-under-the-beds scare, or whatever it happens to be. If
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we have managed to put up with those manipulations, I hope before many more minutes have passed that we will see some reinforcement for the sole, solitary, lonely figure on the other side of the House. I congratulate him for his staying power.


Charles James Mayer: How do you feel over there all by yourself, John?


Lyle Stuart Kristiansen: Well, that is power.
This is a very, very serious matter, and I should like to take the opportunity to read a letter from one of my constituents, a 16-year old girl from Nelson, British Columbia, who puts, perhaps not in the most eloquent of terms, the sincere sentiments she feels very deeply. In rather strong language her letter reads as follows:
Dear Sir:
1 am a 16-year old girl. I am writing about the cost of living. I think it is disgusting. I would love to have three of the people that are in the government to come to B.C. where I live with these families and have nothing. I mean nothing but $20 and that's it, for food, until pay in two weeks. Then you get your cheque $500. This is to make house payment, pay other bills and food, then hope us, the children, can wait until next pay for our shoes, jeans, school fees, etc. And we would like an allowance for birthdays, Christmas gifts, etc. Young people like me will soon be trying to get cars, homes to live in. You know as well as 1 do that some day we will be the future runners. How can we accomplish this with the prices the way they are? The living the way it is, the homes are so high. In the future we will be living in the street, and getting food out of rich man's garbage. You people that sit on your big king chairs look down and see people that can't survive. People are dying because of the high prices. No food, shelter or clothing. Don't you worry, you can walk into a store and pick out $55 or $100 worth of items and then walk by a starving child. I know my family, neighbours, friends are surviving right now. But for how long? You guys get things and hardly no fight. But we have to fight for what is right. You the government promise things. You got elected. Where are these promises for the people?
I must say it is rather tragic, but after listening to some of the debate tonight I must ask if it is any wonder that so many Canadians, particularly many young ones like the girl who wrote the letter, are losing respect for parliamentary institutions and politics? That respect is at a low ebb, yet we witness the heighth of hypocrisy to which the government and some members of the official opposition have fallen or risen to tonight.
I shudder to think what will happen to many young people-hopefully not too many more generations-if they must put up with the duplicity we have seen over the last 1.5 or two years. In this particular period, young people have had a chance to witness political hypocrisy at its highest. One would think one was listening to the same speeches. The Liberals and Tories have both said we must tighten our belts and bite the bullet. Certainly we heard this from the people on my right during the last election. Now we hear it from the masters of manipulation who sit on the government benches.


William James Kempling: Perhaps we should call for a quorum.


Lyle Stuart Kristiansen: Bite the bullet and tighten the belt was part of the member's campaign. We saw the cartoon which appeared in some newspapers during the last election campaign. It depicted one fellow with a hard hat and a little old lady, with a belt around the then Prime Minister, the right hon. member for Yellowhead (Mr. Clark). Both parties are

December 19, 1980
Economic Conditions
deserving of criticism. It is the system of the Liberals and the Conservatives, not ours. That is where the problem lies.
Both the government and the official opposition took exactly the same position on interest rates. They tied interest rates to American levels. One was the same as the other. Both surrendered to the governor of the Bank of Canada. We have listened to the members on my right baiting both our party and the government for some time. They do not like to get it back. I excuse the hon. member for Parry Sound-Muskoka, because his speech was in a different vein. There is no enmity, but the tragedy is the political hypocrisy which has been repeatedly demonstrated over the last several months. It has been such that feelings for the democratic political process have fallen. That is a tragedy in itself.
The Minister of Finance, in his early entry into this debate, suggested that the policies pursued by the New Democratic Party would cause short-term inflation, and he rejected them. No one ever suggested that growing up was easy, but surely one of the reasons we find ourselves in the present economic malaise is that governments-particulary the party which forms the government of the day-have neglected the structure of the Canadian economy for years and years and years. They have refused to make any action to become masters of our own house. Despite all their words of new found courage and how they will Canadianize the oil and gas industry, or take control of our own destiny, surely it is not difficult to understand why some of us on this side find some of those arguments and new-found postures rather incredible. The batting record just has not been there.
What are some of the things which have taken place in the period of the last few days? The Bank of Canada interest rate today is up to 17.36 per cent, the highest ever. The prime rate charged by chartered banks is 17.5 per cent.
Tomorrow one of the major banks will increase its prime rate to 18.25 per cent, that is today, at least I think that today is the tomorrow of yesterday. Where are mortgage rates going? What will it say in today's newspapers as we look at them in an hour or two from now?
The budget forecast that the unemployment rate for 1981 will be the highest since the depression. And then they say that policies suggested from this side of the House, whether from the official opposition or from this party, will not work. My God, can there be any clearer example of absolute and total failure than a look at the statistics to which 1 have just referred? If that is not total, abysmal failure, then what else is it? It would be very difficult to do worse. Surely it is worth a try. Other jurisdictions in other countries with governments left, right, or centre, have done better. Sooner or later we must begin to turn it around.
Business bankruptcies for the 11 months of 1980 are up 16 per cent to 6,051. The breakdown by provinces is rather interesting. For Newfoundland the increase in bankruptcy is up by 131 per cent for the last 11 months; for Prince Edward Island, 100 per cent; Nova Scotia, 30 per cent; New Brunswick, 48 per cent; Quebec, 27 per cent; Ontario, 18 per cent; Manitoba, 60 per cent; Alberta, 16 per cent; and Saskatchewan, that socialist province where free enterprise should be doing so badly according to members to the right, bankruptcies were only up 5 per cent. Surely there is a message therein. If this is not a crisis I do not know the definition of the word.
Earlier I referred to the masterpiece of "MacEachiavellian" manipulation by the Minister of Finance in his contribution to this debate. A few days ago I asked a question in the House and the minister was not here, as he is not here now. But the policies that we are getting were obviously predicted when he said in Toronto on July 10, which quite remarkably was just shortly before interest rates began their dramatic rise again-a continuous rise after a period of decline, that he himself found:
some affinity for the Keynes who wrote: But beware! the time for all this is not yet. For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our goods for a little longer still.
Well, I do not know if the policy is one of precaution, but it is certainly a policy of avarice and usury. I would hope and pray that we are not struck with it for another hundred years.
The Minister of Finance said he was unsure with respect to some things which were to happen in some of his predictions. But 1 wonder whether foul is fair or fair is foul, and which of those is coming true. Is it the long-term policy of the government, or have ministers just stumbled into it in the short run?
I have before me an interesting article which appeared in the December 8, 1980, Financial Times. It is an article written by Don McGillivray. It is with respect to workers. Nobody tonight has decided to blame workers. I suppose they will get into that if the economic crisis which the country is now facing continues for much longer. There have been advertising campaigns blaming the unemployed for some problems. They are trying to cut some more people off UIC benefits. Ministers of the government say they are reviewing these programs. But in the meantime people continue to get cut off and they receive worse treatment than they were getting from the bureaucracy just a short time ago. I suppose that organized workers, in particular, will start being hit by spokesmen of the government and perhaps by members of the official opposition in the next while. But the article to which 1 referred reads:
The National City Bank of New York has just published an updated comparison of wage rates in a dozen industrial nations, including Canada, in 1979.
Average hourly compensation in Canada is listed, in terms of U.S. dollars, at $8.34. Only Britain and Japan have lower factory wages. The comparable figure for the U.S. for example, is $10.16. German factory wages average $11.56 an hour. France is about $9. Italy is about the same as Canada.
The article continues later on;
A failure of real wages to keep pace with other countries is nothing to boast about. Factory wages have run parallel to those in other parts of the economy. This means that Canadians had relatively little advance in their standard of living in the 1970s. The failure of real wages to advance is one reason, of course, for the stagnant economy.
But it does indicate that the blame piled on labor in the mid-decade was misplaced. The scramble for better wages was a symptom, not the cause, of Canada's economic problems.
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The article continues later on:
The real issue is probably the increasing integration of Canada's economy with the U.S. with Canada supplying intermediate and primary goods to be finished in the U.S.
And who is to blame for that over the last umpteen years? That undynamic duo on the other side and their colleagues. What happened to the "zap, you're frozen!"? Will we see them retreat again into the kind of mischievous, ill-informed and wrongly directed policy that we saw in 1975?
Other members in this debate have talked about the people who built this country. And they seem to feel, many of them, that that only applies to some people in the business community. But how about some of the people whose labour has built most of the wealth, if not all of the wealth, that we have in Canada today? Are we going to turn on them again, as the Prime Minister did in 1975? I hope not. 1 am afraid I have little faith. Not in this country-there is a lot of faith in Canada-but we have very little faith, and much evidence for our lack of faith, in the ability of that party that forms the Government of Canada today to come through on what it says in some of its grandiose policies and announcements.
They wonder why we disbelieve them when they talk about a new Canadianized national policy for the energy industry in Canada. What evidence have they ever given us? In the past they promised medicare, for instance, for 50 years before we got it. I believe it was the member for Qu'Appelle-Moose Mountain (Mr. Hamilton) a short time ago who said that there were a number of Liberal prime ministers who retreated from their tradition of-I notice he did not mention Mackenzie King-"do nothing by halves that can be done by quarters", a saying which is as true of the administration of the current Prime Minister and the Minister of Finance as it was true of William Lyon Mackenzie King back a number of years ago.
Mr. Speaker, this is a crisis. We hope that the government will finally recognize that new measures and a dramatic turn around in the direction of the Canadian economy are needed if we are going to do what we have to do if this country is to grow up.


Mr. Girve Fretz (Erie):: Mr. Speaker, it is a privilege for me to speak on a subject which is of so much interest to our party and certainly to the party to my left. I would spend another night to stay here just for the opportunity to speak on a subject which has so much importance to us all. I would spend another two nights even though the time is 7.30 in the morning and though many of us have spent the whole night here waiting for our turn to speak and listening to most of the excellent speeches on this important topic of the economic situation in Canada today. I do recognize it indeed as a rare privilege.
It was October 28 when the so-called budget was brought in by the government to Canadians, an indication that Hallowe'en had come earlier because the Minister of Finance (Mr. MacEachen), dressed up in sheep's clothing, came knocking on the doors of Canadians. Canadians were expecting the big bad wolf, and seeing the little black sheep they heaved a sigh of
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relief. However, the Minister of Finance is a canny, conniving fellow, and under his harmless exterior the big bad wolf really lurks.
He is like those Russian dolls that nest one inside the other, layer upon layer, and you do not know what you will find once you start digging. You are just not too happy looking for it. He is an astute wee beastie, that minister, plotting and scheming. "Let us frighten the living daylights out of them", he must have mused to himself. "Let them think that they are going to be smitten both hip and thigh. The taxes will be raised and protection from inflation withdrawn. Let them think the absolute worst," I am sure he must have said. "Let us have them dangling over the abyss until they are jibbering with fear, and then let us pull the line in. Let us pull the line in and we will brush them off and we will calm them down and then we will slip them a slow-acting potion, that is what we will do, one that will do its work insidiously so that they will love their government for saving them from this dreadful fate, the fate which had been threatened."
"Let them slowly, if ever, come to the realization that, ladies and gentlemen, they have been conned", by one of the masters of deception who sits over there in the front row. "If they begin to become aware of this treachery, let us pull another boondoggle and we will advertise their fears away. We will advertise away their fears with their own Canadian moneys, that is what we will do."
The Minister of Finance has a very low opinion of the intelligence of Canadians, for it is his obvious belief that Canadians will forget that deceitful budget and the promises which were made in the election campaign, promises that have been broken. No, I would say more than broken, they have been shattered by this hypocritical sham. The budget is a hypocritical sham. It reminds me of something that took place many times when I was a kid in school.
I was raised during the depression and one of the games which we liked to play was the game of alleys and marbles. We would take our alleys and marbles to school and draw a circle in the ground or the gravel. Sometimes we would dig a pit and we would each contribute some of the alleys into that pit, and then we would play the game. We always enjoyed the game, but occasionally there was a part to it that we did not enjoy, because there are always the school bullies, and there were a couple of them in our school. I remember them well, head and shoulders above the rest of us, and they would swoop down on the game of alleys and yell, "Fifty-two pick-up!", pick up our marbles, and run away.
I suggest that is what has happened to the Canadian people with our Minister of Finance. He has played "52 pick-up" with the people of Canada. The budget is a hypocritical sham for it is a budget in name only, for what it really is is a plot by the federal government, in its lust for power, to plunder and pillage the resources of the provinces and to impose the will of the federal government over all. Well, this imposition on the part of the federal government has caused the alienation of the west. I understand now that that term is not even strong enough because many of the people there are mad. They are

December 19, 1980
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not mad at the people in eastern Canada, they are mad at the system and at a government which is uncaring, unloving, and they are mad at the budgetary and energy policies brought in by that government.
This then is the budget brought in by those who, last winter, campaigned against the forward-looking and progressive budget of my colleague, the hon. member for St. John's West (Mr. Crosbie). My, how those opposite squealed last year. The cries of rage and fear and the oceans of crocodile tears which they shed. They said, "Nothing for the little guy." They moaned, "regressive, cruel and hardhearted". They wailed. They said, "Listen, Canadians, let us back into power and we will save you". They pledged, "We will save you", and then, like the Phoenix bird which arose from the ashes, we saw the resurrected Prime Minister (Mr. Trudeau) come back in all his new and majestic, gleaming beauty and glory.
So, they rode back into government, these knights in shining armour, ready to save the maiden from the embrace of my colleague, the hon. member for St. John's West. Can you imagine it? But now, we have the Minister of Finance and his armour is somewhat tarnished. His armour is blackened, and what is he doing? He is casting his avaricious glances at the prostrate Canadian public. Those who aided him in his ascent to power, those sword bearers to my left, where are they now? Their swords have been taken away from them, and all they can do now is stand on the sidelines and, in their soprano voices, impotently bewail the fate that has befallen the poor Canadian public.
Last winter they raged, but what do they find themselves with now? Are there any measures in the minister's illusory budget to combat inflation? Is there anything to give relief to the over one million Canadians who are unemployed? Has anything been done to combat the overwhelming deficit that is crippling Canada? The answer has to come back, "No, no, no, nothing". The budget is a shameful document, one that would bring blushes to the countenance of anyone with a conscience. On Monday of this week I introduced a motion under Standing Order 43. The resolution read this way:
Given the fact that the Canadian Federation of Independent Business has predicted 50,000 bankruptcies if the current policy of high interest rates is followed and, further, given that such warnings fall on deaf ears as far as the Minister of Finance is concerned. I move, seconded by the hon. member for Oxford:
That this House urge the Minister of Finance to visit during the Christmas season with children whose despairing parents are unemployed, thereby gaining an insight into what his hopeless policy means in terms of human suffering-
That resolution was turned down by that uncaring government across the aisle. The minister earlier this evening, or rather last evening, during this debate stated that he was concerned about high interest rates. If he is so concerned, why could he not call in the governor of the Bank of Canada and bring him before an all-party parliamentary committee in order to allow us some time to study this issue of high interest rates? Last winter they raged on and on.
The irony is that this government bills itself as the friend of the little guy and the protector of the poor and the downtrodden. Believe me, the Liberals show their concern in strange ways by raising the price of home heating oil. It seems a peculiar way to aid the poor, the aged, and those on fixed incomes-denying them an energy tax credit which would help soften the blow of the rise in price of petroleum products. Requiring farmers and fishermen, who provide Canadians with food, to pay high fuel prices, with no hope of relief, will only mean that the cost of their products will increase and continue to deplete the dwindling funds of the little guy. This is a bizarre method of demonstrating solicitude.
An increase of 33'A per cent in unemployment insurance premiums, which reduces the take-home pay of the little guy lucky enough to have a job, is an outlandish means to show the love the government swears it holds for Canadians. This is a tax on a take-home pay which has already been buffeted by double-digit inflation and soaring interest rates. Now it is heir to yet another assault by this government which purports to care for the little guy. I wonder whether it does.
We remember the occasion when the Prime Minister said he was going to wrestle inflation to the ground. Perhaps he is a torso twister, but he is certainly not an inflation squeezer or an interest rate reducer. When we see interest rates exceeding 18 per cent, I would recommend and suggest that the Prime Minister resign. Not only should he resign now but he should take with him the self-appointed redeemer of Canada's fickle fiscal monetary policy, the hon. member known as the Minister of Finance. Let him do it, and do it now.
How does the government demonstrate its love for Canadians? That is easy to show. Those poor benighted taxpayers in the 50 per cent range are the ones this government looks out for. They are the ones provided with yet another tax shelter. They are the ones who will get a tax break for investing in MURBs. They are the ones who will benefit. Lucky them! They have income to spare, income to invest, while some senior citizens in Canada are reduced to eating dog food. It passes all comprehension how the Minister of Finance can profess to care for the downtrodden. I do not know how he can sit in that seat every day without even squirming. I do not know how he can look into his mirror when he shaves every morning, this self-proclaimed arbitrator of social justice who apparently abides in a cloistered cocoon. Social justice, Mr. Speaker? Humbug!
When I think about the speeches which have been delivered this evening and the news I read in the paper every day, as well as the activities taking place in our nation, I feel crushed. I feel crushed when I look at what is happening to our beautiful country. Every speaker who has participated here tonight would emphatically say he loves our country. It is a great country. But will our children and our grandchildren forgive us? Will they forgive us for what we have done and what we are doing to our nation? If they do not forgive us, may God forgive us.
December 19, 1980


Mr. Pierre Deniger (Parliamentary Secretary to Minister of State, Mnlticulturalism):: Mr. Speaker, at 7.45 a.m., on this December 19, I cannot help but remember that a year ago today, almost to the hour, I was hitting the campaign trail for the second time after our party, with the support of the NDP, defeated a budget which was morally and economically unacceptable to us.
And so a year later, there are still some who refuse to accept the will of the Canadian people and who rise in this House to attack measures which are quite fair, Mr. Speaker, and absolutely necessary in 1980, considering the seriousness of the economic situation not only in Canada but all over the world. It is indeed a serious situation but I hesitate to say, as some hon. members opposite claim, that it is urgent.
Mr. Speaker, last night at 10.30, after a very long day with Dr. Bandeen at the Standing Committee on Transport, I was invited, together with the hon. member for Regina West (Mr. Benjamin), to a small reception where there were a great many people from various countries, and those people were wondering why we were still sitting at 10.30 p.m. So I wonder, Mr. Speaker, what they would say if they knew that we are still here at 7,45 a.m. They are probably all asleep. They were asking, "But why, Mr. Deniger, this emergency debate?" So 1 said: "Well, the opposition, under Standing Order 26, deemed it necessary, because of high interest rates, an ever-increasing deficit and a fluctuating dollar, to call for an emergency debate." They said, "You know, Mr. Deniger, we think Canada has a strange notion of what constitutes an emergency." And they were quite right, Mr. Speaker, because if you compare the economic situation in Canada with what exists in other countries, you realize that even with our problems, we are quite privileged. As you know, Mr. Speaker, it is very easy to find all kinds of reasons to justify a lessening of the tax burden.
If there is unanimity between people on this earth it is certainly over the fact that nobody likes to pay taxes. Taxpayers are dissatisfied with the taxes they have to pay, some even claim that income tax and land taxes distort the economy and affect its growth. Others maintain, and that always amazes me, that if we do not immediately decrease taxes, all that is going to happen is that those taxes are going to continue increasing, so that we must put a stop to this and decrease taxes. Still others claim that because of high unemployment, we must lower taxes, because otherwise it will just keep on getting higher.
A well known author by the name of Oliver Wendell Hayes once said that taxes are the price we pay for a civilized society, the price of government. Obviously, Mr. Speaker, one can question how civilized our society is in 1980, considering the injustices which persist on this planet, but if we compare the services we receive, 1 think we get our money's worth.
And that, Mr. Speaker, is precisely the heart of the problem. Since we get more than what we pay for, there is necessarily a
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deficit. Let me explain. As you know, the concept of a balanced budget had a certain economic validity at the beginning of the century. What happened? What happened was that the new fiscal and monetary theories, which form the economic policy of a country, changed.
For a number of years, the goal was always to have a balanced budget. The idea of a balanced budget is easy for everyone to understand, Mr. Speaker, because the taxpayer, the small businessman, a couple, a housewife must all live within a certain budget, and if they fail to do so there is simply no solution.
That was the situation that faced governments at the turn of the century. It was then thought that to meet government expenses, one simply had to rely on taxes.
But obviously at that time, the only rule that was used was that of fiscal policies, and monetary policies did not enter into the picture very much. According to the fiscal policy of the time, taxes had to be high enough so as to control inflation but low enough to control unemployment. But that solution no longer works, Mr. Speaker.
What happened in the thirties and afterwards was that the government brought up the notion of monetary policy under which the government can provide many services, while taxing "below services", by borrowing to make up the difference. But borrowing means debts. The average Canadians who are listening to us at 7.50 this morning are well aware of the fact that one cannot keep on borrowing forever and that there always comes a day of reckoning. It is precisely at that point, Mr. Speaker, that monetary policies and interest rates come into the picture.
The hon. member who spoke before me asked why the governor of the Bank of Canada did not appear before hon. members to explain his monetary policy. Mr. Speaker, I was there about a month ago, or perhaps two or three weeks ago, and so was the hon. member for St. John's West (Mr. Cros-bie), as well as the hon. member for York-Peel (Mr. Stevens), the hon. member for Broadview-Greenwood (Mr. Rae), and the Parliamentary Secretary to the Minister of Finance (Mr. Evans) when the governor of the Bank of Canada testified before the Standing Committee on Finance, Trade and Economic Affairs. But the hon. member who was complaining about the absence of the governor of the Bank of Canada was not there to ask the questions which he seems so eager to ask today.
Mr. Speaker, if that hon. member and all others who criticize the governor of the Bank of Canada had taken the opportunity that the governor gave all of us parliamentarians to go before the committee to ask him questions, all those embarrassing and non-partisan questions that we can think of because we are all concerned with interest rates, they would have had answers.

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Mr. Speaker, you cannot have it both ways.
You cannot at the same time decrease the deficit and lower taxes. That is impossible. There are some economists who claim that the surplus that would result from a decrease in taxes would stimulate economic growth. In the U.S. that theory is known under the names of two congressmen, congressmen Kent and Roth. Although not an economic expert, I would not support that fiscal theory.
The government is accused of being unfair, of having no respect for the taxpayer. Nothing could be further from the truth when one considers the following of the Liberal party. It is a following which historically has not been privileged by the economic policies of our country. It is a following that has a budget to manage and to meet every day.
Mr. Speaker, they know exactly what they have to do. When we are being blamed for very high interest rates, I cannot help but recall what happened about a month ago when government bonds expired. What did the small investor who has bonds yielding 9 per cent interest do? He analysed his 9 per cent, and he said to himself: do I keep them for another year or do I sell them to buy new bonds yielding 1 per cent or 2 per cent more? Are we blaming him for selling his bonds and buying new ones at 2 per cent more? We consider that a wise business decision. Yet that is precisely what we are trying to say here, that since the U.S. has an interest rate that is much higher than ours, there is nothing to prevent the big investor, who has SI00,000 or more to invest, from simply cashing in his Canadian bonds and investing his money in the United States where it will yield 4 per cent to 5 per cent more.
That is the dilemma with interest rates. Our Minister of Finance (Mr. MacEachen) has been accused of the worst evils since the beginning of the evening, but I for one, Mr. Speaker, think we have an excellent Minister of Finance, one who has taken a decision which I consider very wise, and I cannot understand why hon. members opposite cannot accept it, namely, the decision to let the market set the rates of interest.
As you know, Mr. Speaker, every Thursday, the banks decide, according to a bidding system, the yield on treasury bills. And it is based on treasury bills that the prime rate is set.
That seems so logical, Mr. Speaker, so favourable to what we call the private sector, and yet we are blamed for high interest rates while a year ago our interest rates were higher than in the U.S. Today our rates are lower than in the States, and that means that an investor could be tempted, because he wants to make money, because he has obligations to meet, and debts to pay, to go and invest elsewhere where the yield is higher.
Mr. Speaker, we are faced with all that, and so what are we supposed to do? Some claim that the deficit is unimportant. Others maintain that inflation is public enemy number one in
Canada. And they are right. Inflation is our public enemy number one.
This morning before coming to the House, I heard that following the vote, a strike by Air Canada flight attendants was almost certain, because 78 per cent of them had voted in favour of strike action and 22 per cent against. The main reason why the attendants voted for the strike is precisely because inflation is "x" per cent while the salary increase offered was of "x" minus something per cent, so naturally the attendants want more money. Can we blame them?
Mr. Speaker, we ourselves as members of Parliament want more money. We ourselves find that we are not well paid. But there comes a time when it has to stop, and therein lies the art of government.
I think, and I have said this in all my speeches, before any audience, that never before 1980 has the art of government been so difficult, because I am not sure that people here in Canada and in Quebec are prepared to make the necessary sacrifices.
Obviously, Mr. Speaker, we cannot continue to borrow to pay off our debts. There is no doubt about that. And there is no doubt also that we cannot lower taxes because that would not have the benefits that some think, because such a move would only be useful if government spending decreased at the same rate.
As you know, Mr. Speaker, most of the government's expenses are tied to transfer programs or statutory programs that afford the government little or no latitude. The government is bound to make expenditures. It has only about 10 per cent with which to play. And that, Mr. Speaker, is not the way we are going to rescue our economy.
I do not understand-some hon. members opposite admire the British Prime Minister, saying that this woman is fantastic, that she has an iron hand, that she really deals with economic problems. Yet that is exactly what we are doing here in Canada. That is exactly what we have done here, Mr. Speaker. We have analysed the situation in Canada and we have come up with the type of budget that was presented.
What did we do in that budget, Mr. Speaker? We decided not to do away with indexing. We decided to do that because that is the only way the majority of the electorate, the majority of people who are listening to us this morning, can face inflation, and the only way to ensure that we, as a government, do not profit from inflation at their expense.
That concerned hon. members opposite to such an extent, Mr. Speaker, that, as you will recall, they even bought full-page ads in the newspapers, in Canadian dailies, to ensure that the government would not take such disastrous action. They were right to do so, Mr. Speaker. I do not think that influenced us a great deal, but they were right, and I certainly agreed with the Progressive Conservative government's policy to keep on indexing personal income tax exemptions. Of course
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one should never say never, but that was certainly our party's policy and I recall that, without disclosing caucus secrets, our caucus was unanimous in recommending to the Minister of Finance not to tamper with the indexing of personal income tax exemptions. And that is what happened. Yet, Mr. Speaker, some ultra right wing economists consider that indexing is disastrous for our economy. But we do have a social role to play and that is precisely to ensure that government does not profit from inflation.
We were also blamed earlier for having increased the price of heating oil. It is true that the price of heating oil has increased. But while we are being blamed for that, we are also blamed for not giving enough money to the oil companies. I am totally confused. True, it is early in the morning. But I cannot understand how we can be blamed for increasing the price of heating oil and not increasing it enough to satisfy the oil companies. Contradictions again. I know the situation, Mr. Speaker, because when I was in opposition, during the interlude, 1 certainly liked to rise and speak quite often. 1 always liked doing that because you can say almost anything in that situation, you do not have any policy to follow. An hon. member can rise and blame the government for not giving the companies what they wanted. That is fine when the hon. member comes from a producing province.
However, there are some of us who represent areas where there is no oil, areas which are energy poor, and then we can complain and say, "Mr. Speaker, is that normal? What the government is doing is cruel. It is increasing the price of oil. It is increasing the price of gas at the pump." It was great when I was in the opposition, because it is easy to be tempted by such irresponsibility. But that is not what government is all about. Government means having one policy for the whole of the country. I hear one hon. member say, "Taxes are too low", and yet another say, "Taxes are too high". So I say, make up your minds, because what you are doing does not make much sense. Our Minister of Finance was highly criticized tonight. Personally 1 feel we have a terrific Minister of Finance who is not afraid of expressing his opinions. He is an excellent Minister of Finance, who understands the situation. He is an excellent Minister of Finance who is not afraid to make difficult decisions.
What makes a good racing driver is being able to apply the brakes. Anybody can go fast, can spend. But the only way to see if a Minister of Finance is good is to see what kind of tax measures he introduces to decrease expenditures, ensure social justice throughout the country and make sure that the tax burden is shared equally. I think that our Minister of Finance has fully understood the task at hand. And 1 for one, Mr. Speaker, am not afraid to support our fiscal and monetary policies. I therefore encourage hon. members opposite to come and ask the governor of the Bank of Canada or the Minister of Finance, next time they appear before the committee, the questions they feel necessary, but not to accuse them of
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refusing to answer questions when they themselves are not at the committee meetings, where they could ask those very questions.


David Kilgour: Thank you, Mr. Speaker. Again I can tell the time. It is 8.04.


Some hon. Members:: Hear, hear!


David Kilgour: Thank you very much, members of the NDP.


Stanley Howard Knowles: It is 8.04 a.m.


David Kilgour: I confess to the hon. member who just concluded his speech and who just joined us before making his speech that I wish I could have done the same thing, having missed the all-night session and just come in in time to make a speech. On the other hand, I think it is important for all of us, and there are many who have been here-something like 26 speakers from this party-to have heard what has been said. I am sure none of us would have wanted to miss the debate. I am sure we all have learned something, and I am sure all members would want to say something about matters they feel strongly about.
The simple theme of my remarks is that the economic policy of the government as disclosed in its budget is economic lunacy. It is not just lunacy but something which is causing a great deal of pain to virtually all Canadians, the young, the old-and above all, the old-the in-between and everybody who has an honest occupation and believes in working for a living. I am sure it causes concern to housewives, public servants, small businessmen and everyone who believes in Canada and puts more into that concept than he or she gets out of it.
I would like to add something first about the inflationary situation which I believe is exacerbated by this budget, directly by the increase in the compulsory payments to UIC amounting to almost $1 billion per year. I believe this inflationary trend has been contributed to indirectly by the $3.5 billion increase predicted-and I believe it will be far more than that-in the deficit. I suspect the increase will be somewhere between $4 billion and $5 billion next year.
The government will simply monetize that entire debt, or a great chunk of it, which simply means politely that it will print fresh and ever more worthless dollars, hoping that most people out on Sparks Street, in Grande Prairie, La Prairie or anywhere else, will not know that what they are getting from their banks every week is a little more diluted.
Having regard to the budget, I would ask hon. members opposite, which serious commentator has had anything good to say about the budget? I challenge them to give me the name of anyone.
Inflation is the subject I would like to speak about for a few moments as I think it is the real cancer in our economy; it is

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the real cancer that those people opposite are encouraging in many small and large ways.
Chronic inflation wipes out people's savings, impoverishes pensioners, rewards speculators, hinders trade competitiveness and does a great deal of general harm. Helmut Schmidt, the Chancellor of West Germany, has said that "inflation for economies is a killer disease". My friends in the New Democratic Party in the House usually say that he is a social democrat. Indeed he is, and I wish all social democrats were the same sort.
We saw a symptom of inflation yesterday in the announcement that the CPI is now running at 11.2 per cent, the highest increase since March, 1975. Somebody did a calculation in the House the other day which indicated that a family receiving $15,000 today would need, according to the projection of the Minister of Finance (Mr. MacEachen), and that is now stale, $29,000 just to stay even today, or within five years, and $40,000 to stay even in ten years. I wish members opposite would take their calculators and work out what inflation at 11 per cent would do to each and every Canadian within 25 years.
I think I made this point the other day, but fully half of those Canadians who receive old age security benefits now also receive the guaranteed income supplement, and the OAS and GIS together come to $4,350. The OAS and the Canada Pension Plan come to $5,296, which is almost exactly on the poverty line.
As has been said before, what we have is a cumulative problem. Over the last ten or 12 years we have spent more money than we have earned. We have financed on credit and as I mentioned before we have inflated our money with freshly printed currency. I believe that most of our economic problems to date stem from the inflationary bias of past government policies which motivated all of us to spend too much and save too little, which encouraged consumption rather than investment for the future, and which resulted over a ten-year period in a reduction in real growth and an upswing in expectations and, above all, too many dollars chasing too few goods.
To put what has happened very briefly, the M-l, which is the money supply as the Bank of Canada defines it, is up. I think the figure is 20 per cent in the last five months, and that, as surely as the sun is up this morning, will result in more inflation.


John Leslie Evans: You are wrong again, but that is nothing new.


David Kilgour: From 1968 to 1978, which is my most recent date, the M-l was increased by approximately 160 per cent. Real economic growth was about 54 per cent. The general price level in the economy increased by 106 per cent, which was an amount very close to the amount of excess money put into the economy in a vain attempt to spur real economic growth.
1 do not think hon. members opposite really know what hyperinflation is, so I will give them a couple of ideas to
consider on the subject. That is where I think their policies are taking the greatest and most fortunate country on earth, and I remind them of some of these things. Between July, 1920, and November, 1923, in Germany the German mark exploded to one-trillionth of its pre-World War I value, sending wholesale prices soaring by an almost unimaginable 55 billion per cent. The result was the complete collapse of German society and the rise of Nazism. Argentina is another example of similar policies to those we are getting from this government, although perhaps more exaggerated, which eventually resulted in the inflation rate hitting the staggering figure of 17,000 per cent in March of 1976.
Hon. members opposite say that cannot happen here, but if we allow inflation to slip from its moorings and roar out of control, we can reduce this country to a state of near total ruin. If that happens, savings will stop occurring, prices will soar, nobody will be able to afford to save and those who can save will not want to. The bond market will collapse, as indeed it is collapsing today in this country. Credit will begin to dry up. Firms will be starved for funds. Many of them will go under. My colleague, the hon. member for Erie (Mr. Fretz), pointed out that the Federation of Independent Businesses predicts as many as 50,000 bankruptcies. The rest of the businesses will stagnate. If the idiots on the other side of the House continue with their policies, unemployment will mount.


John Leslie Evans: A point of order, Mr. Speaker.


David Kilgour: Inflation will continue to soar. There will be no new plants and no new jobs. There will be more unemployment and more unemployment insurance. Welfare will go up, with which hon. members know the provinces are saddled. Everyone will spend everything they have knowing that their dollars will only buy less in the future. That is a recipe for hyperinflation.
I counsel hon. members opposite to examine hyperinflation as it has occurred elsewhere around the world.
I remind hon. members opposite that hoarding results from hyperinflation. Gun dealers do well because people expect their homes to be robbed.


An hon. Member:: Oh!


David Kilgour: They laugh and guffaw. Looting occurs. Crime soars, and in other countries where there is hyperinflation there is prostitution. I think that was mentioned by someone. Social services disintegrate as policemen and garbage collectors walk off their jobs knowing that they cannot earn enough in their public service positions. The whole value system of a country can collapse.
If I may turn to the subject of interest rates, western Canada cannot survive the interest rates we have as a result of the policies of the government in the past. Our country is a producing region. We need low interest rates. I suppose no one on this side is more cynical about hon. members opposite than I am as a one-time Liberal and a westerner. Is this another means of driving the west away from feeling close to Canada? I believe a case can be made that westerners suffer more from high interest rates than any group in Canada.
December 19, 1980

I am told that Visa is now charging 21 per cent interest. Mortgages in the part of the country where homes are being built are going so high, as pointed out by various members, that young couples cannot buy them. Consumer durable spending is down. Business loans have to go down. Capital loans are down. Small businesses which are immensely dependent on low-interest rates suffer the most. I say with all sincerity that if hon. members want to divide this country, they should just build interest rates higher and they will be dividing it as effectively as anything, including their absolutely moronic energy policy and the constitution, has done to date.
Let me turn briefly in the time available to me to energy. It is almost beyond belief that a country which occupies half a continent and with 24 million people is out begging on the world oil markets to buy 450,000 barrels a day. I recall being at a United Nations congress not very long ago, and someone from a Third World country stood up and said he thought it was a crime that the wealthy and advanced countries-he did not say it, but he could have said "like Canada"-are out buying oil and outbidding Third World countries. I think he used the example that half of his country's exports were used to buy fuel on world markets. In my opinion that as well is a crime that Canada continues to commit at the expense of underdeveloped countries around the world.
Let me turn to a current issue of Maclean's and an interview with Jim Gray, one of the founders of a company called Canadian Hunter Exploration, which is one of the great success stories in western Canada. Gray talks about the budget and what it will do to his company and to his industry. This is what he said:
First there's the 8 per cent production tax, which is not deductible from income so it's more like 20 per cent. The write-offs have been changed. They have held the price to the producer of natural gas flat for next year, but inflation is pushing our costs up 20 per cent. So our gas price is actually lower. The net effect is to slash our after tax income by 25 per cent.
In the next column he puts it pretty well when he says, and I quote:
If they said you can't charge more than 20 cents for a cup of coffee for the next ten years, then in about five years there would be no more coffee.
In a nutshell that is what is happening to the oil and gas industry in western Canada. Gray goes on to say what the government should do about oil and gas. I remind hon. members opposite of their xenophobia. I am astounded that the Parliamentary Secretary to the Minister of Finance (Mr. Evans) will put up with it. He is a newcomer to Canada and I welcome him, but I wonder how he likes the xenophobia of this government which, I gather, extends to every person from every country in the world except those who were born in Canada. Mr. Gray is a Canadian-born individual who has lived in Canada all his life. He tells what he would do about oil and gas, and I quote:
I would emphasize supply and i would realize that the only energy forms that can be had in the near term are from conventional sources.
Let someone point that out to the so-called minister of energy. Further down in the article Gray talks about Canadi-
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an-owned companies. He points out that there are 500 or 600 companies in the oil business. He is asked how serious is the disenchantment among oilmen and he says:
It's really serious. There isn't a single Canadian company in Calgary that I know that either has not already or is not immediately planning to move part, and sometimes a lot, of its operations to the United States. I'm not worried about the money, it's the people. Exploration talent. Today's explorers are tomorrow's producers.
A little further down he says:
The Canadian content of our industry is being destroyed by these economic nationalists. The Canadian companies like Canadian Hunter are being kicked out of Canada-
I repeat that Canadian Hunter is a Canadian company.
-by their attitudes and policies. I am as good a Canadian as they build. And yet we are being forced to incorporate American Hunter.
That is a pretty good description of why, to put it mildly, many of us in western Canada do not like the government's energy policy.
In conclusion, I should like to quote somebody for whom I have a great deal of regard, and I recommend these words to the government:
You can't bring about prosperity by discouraging thrift.. . You cannot help the wage earner by pulling down the wage payer... You cannot establish sound security on borrowed money ... You cannot build character and courage by taking away man's initiative and independence. You cannot help men permanently by doing for them what they could do for themselves.
Those are Abraham Lincoln's words.
For the reasons I have mentioned, Mr. Speaker, I submit that the economic policies of this government, as I mentioned at the outset, are lunacy; and more than lunacy, they are painful lunacy for millions of Canadians, I suggest.


Mr. Bruce Halliday (Oxford):: Mr. Speaker, I see it is about 8.25 a.m. and I think it is not in the memory of too many members of the House to have had a debate which had started at 8 p.m. the previous night going on until this hour, with probably a dozen or more speakers still waiting to be heard. It is indicative of the concerns which, if not the government, certainly members of the opposition have for the crisis which exists in Canada now with respect to the economy. I give Madam Speaker credit for coming to a very quick decision when she was faced with the two motions from the opposition parties indicating, independently, a desire to tackle this problem as an emergency debate yesterday and today. I think the response which you see, Mr. Speaker, from the opposition parties indicates the concern which we as representatives of Canadians have on this matter.
I do not want to go through the long list of problems which have been very well documented by my colleagues, on this side of the House, save to mention that it ranges all the way from the various aspects of the economy in all its parameters. Energy policy is a subject on which I should like to touch a little later on, and 1 will speak on a different aspect of the energy policy which I think has not been mentioned tonight.
My colleague the hon. member for Capilano (Mr. Huntington) gave a very interesting speech in which he spoke of the succession of stages that civilizations have gone through. I

December 19, 1980
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believe he mentioned that ten civilizations have gone through a successive series of events which he classified under the age of decadence. It is certainly easy to see how we fit into that pattern which has been so typical of other civilizations. We have heard the discussions about the constitution, we have heard talk about inflation and about money supply. There is virtually nothing that has not been touched upon by various members on this side of the House, as you know yourself, Mr. Speaker, having been here for a good part of the night. It was done in a very eloquent fashion and with good information presented. We did appreciate having a few members of the government staying with us. In fact, two or three have spent the whole night with us, and there is one still here now who has spent the whole night with us.
I want to lay emphasis this morning, not on what we have heard today so far, mainly an emphasis on short-term problems and short-term solutions. I would like to touch for a few moments on what I look at as being the long-term problem which has led to the crisis which we have and suggests that the long-term solution has been completely ignored by the present government. 1 think it behooves them to look more seriously at this long-term solution. I look upon the long-term cause of the crisis we are in now as being, as was mentioned many times, the desire of this government to get power. We have seen this over a good many years where their main motivation has been to get power over and beyond any concern for principles, scruples or what have you. If they could have power, that to them was the ultimate goal.
If one looks at how you get that power in a democratic society such as we have, in my view-and I have thought about this since coming to the House in the last six years- perhaps the greatest weakness of our democratic system is the fact that a political party which is as determined to have power as this Liberal party has been over the last two or three decades is able very easily to convince the people that they deserve to be in power, but it is done by nothing less than bribery, in my view. It is a system whereby a political party will guarantee to the people something for nothing, something that the people perceive to be for nothing. It is guaranteed and promised to them through their own tax dollars, which in my view is despicable.


Some hon. Members:: Hear, hear!


Bruce Halliday: We have witnessed something that was very well described recently in one of the standing committees when we had as a witness the president of the National Research Council. We saw the Liberal party choose a course after the last war, the main goal of which was to get power, but their mechanism in this kind of a democracy was to get power by promising a new social program come every election, something tangible in the form of money which they could get for nothing.
Much as I appreciate the need for social programs, I have long been an exponent of the necessity of having the appropriate social programs which look after the needs of those people who have special needs. Nonetheless, I maintain that 90 per
cent of Canadians, or perhaps even more, are very capable of looking after their own needs by their own endeavours. Part of the slow destruction of our civilization is a result, in my view, of the usurping by governments of the responsibility and the individuality of people in their opportunity to provide the social programs for themselves. I think governments have a real responsibility to provide for the citizens of their jurisdiction those things which the citizens cannot provide for themselves. I am thinking of such things as the postal service, the immigration service or the military service. Those are the essentials that an individual cannot provide for himself. There are certain people in our society who are unable to provide for their medical services, services for children, old age security, and so on. The government should accept that responsibility, but as soon as it goes beyond that and decides to take care of all of us, then the people start to become irresponsible and we see an increase in crime such as we have today. This is due to the fact that governments have made individuals less and less important; it leads to that type of irresponsibility.
Over the last two or three decades, in its effort to retain power, the government has promised one program after another. Over the last ten years in particular we have heard the idea that everything must be universal; universality was the catch word. It is interesting how it began to change in the last year or two. In fact, the Minister of National Health and Welfare (Miss Begin) is actually obsessed with it. She has a real obsession that things must be universal.
It is interesting of late that this minister is not only suffering from a compulsive type complex but she has now become schizophrenic in a sense. As recently as this week, in response to a question by the hon. member for St. John's East (Mr. McGrath) concerning social programs and medicare, she made the following statement as recorded on page 5847 of Hansard:
We are reviewing our programs with a view to focusing on those most in need.
For years I have been suggesting-and I still maintain it- that this is a responsibility of government. The government should focus, as the minister said, on those most in need. But how can a minister who pretends to be responsible deny a certain type of schizophrenia if, on one hand, programs are supposed to be universal and, on the other hand, the minister wants to look after those who are most in need? Obviously they are incompatible, and it behooves the Minister of National Health and Welfare to take a look at the side of the issue on which she wants to be. She cannot have it both ways.
In my view, that is the reason for some of the financial difficulties. The crisis of today is partly because the government, in order to retain its power, promised programs for which it has been unable to pay. It becomes abundantly clear, when debts of $15 billion a year are being financed, with service charges of something in the order of $14.5 billion, that we are unable to finance social programs, as good, desirable and necessary as they may be for some people. But by no means is it necessary for that kind of service to be supplied to
December 19, 1980

people such as those who are in the House of Commons right now.
From that I want to lead into a few comments about where we should be using that money. As the Minister of National Health and Welfare suggested, that money should go to those who are most in need. Four members on the government side of the House and three members on this side have spent the last six months studying the needs of the handicapped and the disabled in Canada. We have had a chance to see the plight of handicapped people and the way they have been ignored by society. It was an eye-opener for us on the committee to have before us dozens of witnesses and to have received many briefs, totalling approximately 600. They indicated the lack of concern of Canadians for many aspects of the needs of the handicapped and disabled.
We should be helping to alleviate the financial and economic crises of our handicapped people. Over the last number of years, the Minister of National Health and Welfare adopted the theory that it is not very important to look after their needs; rather it is far more important to provide some universal plan to millions of Canadians who do not need it. There are over two million Canadians who suffer from some form of disability or handicap. They are prepared to let those people linger at a level of opportunity far below that of most Canadians. They are limited in mobility and in their perceptive senses of hearing and vision. They are limited in their job opportunities. Approximately 70 per cent or 80 per cent of them are unemployed. They are limited in their accessibility to buildings, even the House of Commons and the Parliament Buildings. These are people on whom we should be spending money to bring them up to the universal level of all members of the House. Yet the minister is prepared to deny those people the economic benefit to raise them to the universal level with which all of us dealt from day one.
It is rather deplorable that the minister takes that double standard. One day she says that it must be universality; the next day she says that she will help those who need it most. She just does not mean it. We will have to deal with that as the days go on.
I started off by indicating that there was a long-term problem because of the desire of the Liberal party for power at any cost. I want to suggest now what is the long-term solution. It has been virtually ignored during this debate by speakers on all sides of the House.
1 am referring to the issues of research and development and science and technology. During this session questions have been asked repeatedly, and we have received rather unsatisfactory answers from the minister. The answers we are receiving now are no different from those of his predecessors over the last four or five years. They are always going to do more for research and development and more for science and technology.
A few weeks ago Dr. Kerwin, the president of the National Research Council, appeared before one of the standing committees. His testimony was very enlightening. Questions were asked as to why we were in our present economic state as
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compared to Germany, Switzerland and Japan. He made the simple observation that following the last war those countries chose to opt for and put their resources into investments which pay dividends, whereas Canada chose to put its investment into social programs with limited returns. It raises our standard of living and makes us feel more affluent, but it does not pay the dividends of dollars invested in research and development.
He gave the committee some interesting figures which he had given to NRC a few days before. I do not have the figures in front of me, but I can give approximate ones in order to illustrate what he said. NRC has a program where money is lent to small industries for research and development. Over the four-year period from 1974 to 1978 or from 1975 to 1979, NRC lent $90 million, it found that approximately 20 per cent of its research programs came to nought, and that another 30 per cent or 40 per cent were a saw-off; they were of some benefit but not too much. Approximately 30 per cent of those programs returned real dividends to the country. If I remember Dr. Kerwin's figures correctly, $90 million of investment returned in export trade something over $3 billion, because of the development of new products for sale. Out of that $3 billion in trade there was a tax revenue of something over $1 billion. I think it was $1.8 billion in tax revenues.
That is the kind of investment that the government has been refusing to make for years. If we are to have any change in our economy, or to break this crisis in the long run, we must take a new approach toward science and technology and research and development. If we are to be given a chance to catch up to Japan and Germany, what we must do is put money into research and development.
I would like to speak about energy, which was mentioned earlier. We have heard much about energy tonight and about the need to be self-sufficient. I would remind hon. members that there are good authorities which would suggest to us that energy is, indeed, a necessity, but it is not the answer to our future. No matter how much energy we develop, if we do not choose to use that energy in a productive way by producing something we can sell, we will stand pat as we are. As the Minister of Finance (Mr. MacEachen) said, he is going to stand pat on his present budget. Unless we put money into science and technology to develop products that this world wants and which we can therefore sell, we might as well forget our economy blossoming into the state into which it should develop.
I am suggesting that we have had a long-term problem, namely, the desire of the Liberal government to be in power at any cost, spending grossly over the annual budget to the tune of 25 per cent more than we could cover with our revenues, getting us into debt which entails payment of a service charge. If we are to get out of that sort of situation we have to reverse our policies and start spending money on programs such as the ones NRC has. They cannot get any more money for these programs-although that is hard to believe-even though they can make tremendous profits for the national treasury.

December 19, 1980
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I submit, Mr. Speaker, that we are, indeed, in a crisis situation, and unless we have a government which is willing to look at that type of problem beyond the next election then it will not win the next election. Of course, if you promise money for research and development then the public will not necessarily vote for you. That is the trouble with our democracy. If you promise money for research and development for some time way down the road, then that does not win the next election. So I hope, Mr. Speaker, that the present government will take a serious look at the situation, especially after this debate tonight, and perhaps give our research community a little better chance to help rectify the present situation.


Mr. Cyril Keeper (Winnipeg-St. James):: Mr. Speaker, it is a privilege to enter this debate, although I must say that 1 had to wait quite a decent time before I could stand up to speak. It was all night-an indecent time. Yes, I am still standing up.
I must say this is an important debate and as I understand it, although my experience here is not long, it is a rare occasion when the Chair accepts a motion under Standing Order 26. The Chair, at least, recognizes that there is an economic crisis in Canada and that this matter requires debate. The reference in the motion which my leader and my party put forward to the rises in the cost of living-now the highest since March of 1975-and interest rate increases which have really gone through the ceiling, above all previous levels, is clear evidence that we have a real problem which requires the attention of this Parliament and of this government. Now, by virtue of the Chair accepting this motion and allowing the debate, the Minister of Finance (Mr. MacEachen) was at least forced to address the economic situation in Canada today.
I would like to review a little of what the minister had to say and to comment upon it. Clearly, what he had to say was in no way adequate and he did not finish by giving us any promise of action. Perhaps after this night of admonition to the government, and of advice, they may have a change of heart. It is not likely that that will occur, but at least they do have an opportunity for that to take place.
The Minister of Finance started off by acknowledging that there are economic and inflation problems. He even admitted that these problems were getting worse. This seems to be his strategy, and one which he set out a long time ago when he brought down the budget which, incidentally, was very delayed in coming. Obviously he had thought this matter through because he outlined clearly in that budget that we had very serious and deep economic problems. Now he is able to say in the budget that he acknowledged these facts. The problem is that he did not follow them up with any action.
He goes on to say that there is nothing that Canada can do, that we are influenced by forces outside our borders and that the problems we are facing today, the interest rate problems, do not originate in Canada. He says that what happens in the United States influences what happens in Canada and so on.
Of course, Mr. Speaker, he never tells us why we are so vulnerable to outside influence, and clearly that has to do with the fact that we have a very weak industrial base. We have the
well-known branch plant economy, and if the successive Liberal and Tory governments had, a long time ago, done something about an industrial strategy for this country we would not be so vulnerable today to influences from outside our borders.


Some hon. Members:: Hear, hear!


Cyril Keeper: The minister somehow attempts to deal with the criticism that somehow or other we simply fall into step with the Americans with respect to interest rates. But he does it in a rather unique and very unconvincing way. He says simply that because we have a lower rate of interest in Canada we are therefore not following the American interest rate. Well, really, we are following it, but it is simply another endeavour on the part of our finance minister to finesse his way out of a very difficult economic situation in which he should rather be accepting responsibility and taking action. We have become familiar with the capacity of the Minister of Finance to finesse his way out of economic responsibility. He clearly demonstrated this when he brought down his budget and hid the taxes he was imposing upon Canadians. He hid the measures which were leading to rises in the cost of living. So he is certainly a master of finesse even if he takes no action on financial problems.
But the minister's chickens are beginning to come home to roost. The fact that we have been having this debate all night and are continuing on into today clearly demonstrates that people in this country are beginning to recognize that the government is not facing up to its responsibility for economic policy in this country.
Another criticism that the minister deals with-and obviously quite inadequately-has to do with the question of why it is that Canada is so vulnerable to outside influences in regard to interest rates and other economic matters when Japan is not. Why not Japan? The minister simply labels that as a juvenile question. He does not choose to deal with the substance of it, which I suggest has a great deal to do with the fact that Japan has an industrial strategy while Canada never has had one, certainly not a serious one. He also deals with the criticism which has been thrown at the government that people are hurting-particularly the low-income earners-by the lack of an economic policy of this government. He reels off and names the whole array of social programs which we have developed in this country over the last several decades-old age security, guaranteed income supplement, family allowances, unemployment insurance-and, of course, he indicates that they are all indexed. He fails, of course, to mention that they never would have been indexed if the government opposite had not been pressured into that indexing during a minority parliament.


Mr. Cullen:: That was in a minority Parliament.


Cyril Keeper: My colleague indicates that this indexation was brought in during a minority Parliament, and it was due to pressure from the New Democratic Party. But now the minister is attempting to put a veil over things to fool us and make
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us think that people in this country are not hurting. We all know that we have good social policies and good social programs in this country. Obviously, they are somewhat inadequate. The fact that we have social policies and social programs does not in any way make up for the fact that we need sound economic policies which take into account people, families and their financial situations and which have some compassion and seek to help those who are hurting in this present inflationary climate.
The minister brought in a budget which he felt recognized the chief economic threat in Canada today as being inflation. He has the gall to go on from there and say that because there is now additional inflation, since he predicted inflation this confirms that he has adopted the proper economic strategy in his budget.
Clearly, this is just an attempt to pull the wool over people's eyes and evade responsibility. Once again he fails to deal with the economic situation. The minister merely attempts to smooth it over, to deal with it in a cosmetic manner, not a real economic manner, not in the manner of putting together better policy and more action. The minister also indicated in his statement that he wished to maintain government expenditures within economic growth. That is a good objective, but the problem is that it is backward. It has things turned around.
What the government should be doing now is seeking to stimulate and promote growth so that we can afford the expenditures which are necessary in the country to meet people's needs. The government seems to fail to recognize that it has a responsibility at all levels for the economic policy and the general economic health of this country. The minister talks about what he has been hearing from this side of the House. He has basically two simple points; he calls for a reduction in the deficit and for increased expenditures. He attempts to paint himself as being in the responsible middle.
This suggests to me that all the minister and the Liberal government have is a political strategy, a public relations strategy, but no economic strategy which is what we need. I would like to say a bit about what the economic situation is, as I see it, and put some facts before the government so that it will have something solid upon which to reflect, rather than merely their own rhetoric.
With regard to mortgages, it is still a dream, and a legitimate one, of Canadians to own their homes. From 1975 to 1979, the average mortgage rate was 11 per cent. On a $50,000 mortgage over a 25-year period, this would have meant a payment of $481 a month one year ago. When the interest rate went up to 14.75 per cent, the mortgage payment jumped from $481 to $614. This occurred under the Tory administration. Today we are up to 18 per cent mortgages and the monthly payment will be $733, as compared to $481 per month in 1979. Clearly, people cannot afford to pay that kind of increase in mortgages if they are to own their own homes.
It is not only in the area of home ownership and mortgages that the economy is causing problems. There is also the problem of unemployment. The officially unemployed in November was 787,000. That in itself is a very high statistic
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and should be enough to shake the government and convince it that economic measures are necessary, that people need help and work. But when one takes a look at what the real unemployed rate is for this country, they will find that the figure is 1,322,000. Clearly, that is a figure which is shocking and justifies the Chair's acceptance of the motion under Standing Order 26 and the fact that this House has been dealing with the question of the economic situation and the economic crisis in Canada all through the night and into today.
As well as these figures with regard to the levels of unemployment, there are figures which illustrate the same kind of problem when we deal with lay-offs. There have been great lay-offs particularly in the province of Ontario. Plant after plant over the past year has had lay-offs. I know that in my own province of Manitoba the same situation prevails. There have been plant closures with no hope of economic stimulus. The Swift meat plant closed and recently the Maple Leaf flour mills closed. Certainly in a province like Manitoba we cannot afford to have lay-offs and plant closures, particularly since in that province we are suffering under both a federal Liberal administration and a Tory provincial administration.


Mark Willson Rose: That is double jeopardy.


Cyril Keeper: It is certainly double jeopardy when we are getting hit by both sides, and, by God, that is getting hit harder than anybody should be hit. I must say at this point that it would be wise to indicate that while the Tories are now free in opposition to criticize the government on interest rates, I find it interesting, although I was not here in the House in the last Parliament, to read in Hansard how the Tories responded to questions about their high interest rate policies and their lack of control over interest rates.


Donald Alex Blenkarn: That was low interest.


Cyril Keeper: The hon. member may think it was low but the people of Canada did not think so.


Donald Alex Blenkarn: Compared to today?


Cyril Keeper: The minister of finance under the short-lived Tory government said in response to a question on interest rates from the hon. member for Broadview-Greenwood (Mr. Rae), "I do not plan to take any action. We have a market economy." That is the attitude of the Tories with regard to interest rates. That was not the only occasion. This was not merely an accidental utterance by the then minister of finance. My hon. friend for Winnipeg North Centre (Mr. Knowles) asked a question with regard to interest rates as well. The prime minister of the day, now the Leader of the Opposition (Mr. Clark), said: "What this House can do if it has a practical alternative which is preferable to the policies being recommended by the Bank of Canada and by this government, is to make those policies known to the standing committee".

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Welcome, Allan! I was just reviewing your comments of last evening and wondering where you had been all night while members concerned about the economy of this country have been offering advice to this government.


Allan Joseph MacEachen: I was where your leader was, out of the House. He left after I did. 1 did not ask for the debate. He did, and he left his crisis to go to bed.


Cyril Keeper: Now that the Minister of Finance is here, I will continue my advice to the government. The former prime minister responded in the same way with regard to questions on interest rates as does the present Prime Minister (Mr. Trudeau). As reported in Hansard for October 29, 1979, at page 685, we find the then leader of the opposition asked the following question:
At what point will the government look at these alternatives, rather than following the American interest rate up to 13 per cent, 14 per cent and God knows how high?
The then prime minister responded:
-I hope that members of all parties-and, indeed, members of the public-will take advantage of the fact there is now a standing committee inquiry into interest rate policies, to put forward alternative policies they think might be more effective than those which have been proposed by the governor of the Bank of Canada and supported by this government.
Clearly we are dealing with a lack of economic strategy, which is common to both Tories and Liberals. It is a strategy of inaction and insensitivity. It is a group, a coalition, which does not care for people. What we need is for that government over there today and the minister who is now leaving the House to wake up and to take some sane economic action.


Mr. Chuck Cook (North Vancouver-Burnaby):: Mr. Speaker, all night long, for something a little over 13 hours now, debate has raged in this House with regard to interest rates, inflation and the flight of capital out of this country.
This is not only a debate about what is best for Canada, it is also a debate about the very existence of Canada. I have never been accused of calling a shovel a spade in my life. My language will be a little strong and some of the points I will make are going to be somewhat horrendous. However, the policies of this government have led us into a bottomless pit into which no light has penetrated. This government's sensitivity is totally lacking.
The Minister of Energy, Mines and Resources (Mr. Lalonde) made a statement last night which caused me to tremble for my country. I shall paraphrase his statement, but he said the oil and gas of this nation must be for the benefit of all Canadians. 1 agree with the comment, as 1 think every member of this House does. Let me repeat his line, and add the other words he should have added: the oil and gas of this country must be for the benefit of all Canadians, but not at the expense of some Canadians. Unfortunately, the inference in some of what he said indicated to me that there may be an attempt for a total federal takeover of the ownership and control of oil and gas in this country. That is why I am scared.
It will not be allowed to happen. It simply cannot be allowed to happen.
Already the policies of this government have led to exploration cutbacks. They have led to drilling rigs leaving the country, and 1 might add it is a trickle of drilling rigs. However, most of the winter exploration programs were set before the disastrous budget came down and along with it the oil and gas policy. Let hon. members check for the month of April to find out how many drilling rigs are likely to be working in Canada. Border points will be stacked up with jobs, money and capital leaving the western part of the country. There has been a raid, and I will call it a raid, on the natural gas revenues of British Columbia, revenues which have been going to the B.C. government. I never quite understood why this Liberal government is prepared to pay Mexico, Saudi Arabia, Iran or anyone else the world price for oil while robbing Canadians by paying them a very small portion of that price. That is the key factor here. But I must outline what is likely to happen.
There is a large growing separatist movement in western Canada. When the remarks made by the minister of energy last night are carried in western Canada and understood by western Canadians, he will have made several thousand more separatists. I say to hon. members: do not think you will have the same kind of referendum in western Canada as you had in Quebec. This is not so much an emotional issue in Canada as it is an economic rip-off issue. Let me put some examples on the record.
In Quebec, the referendum was partially won because there were liberal canvassers going door to door. If they encountered a mother with young children the statement was made: you know, if you vote yes on the referendum the baby bonus will stop. If the canvassers encountered an old age pensioner, the statement was made: you know, if you vote yes, the old age pension will not be coming the same way any longer.


Pierre Deniger: We never said that, and you know it.


Charles Henry (Chuck) Cook: In western Canada, separatist canvassers will be saying: "if we separate, the baby bonus will be doubled; if we separate, the old age pensions will be doubled; if we separate, there will be no necessity for an income tax in western Canada. These are believable statements, because all one has to do is look at the difference between $16.75 a barrel for oil and whatever the world price is at that particular time. The revenue is there.
The constitutional issues are also splitting this country, combined with the economic policies. Nobody wants to be a second-class citizen. The Liberal proposals in terms of an amending formula make every western Canadian a second-class citizen. They make every citizen of Prince Edward Island a non-citizen. Not only that, but the proposal to hold referenda bypasses totally the legitimate provincial governments at the whim of a government which not only sets the question and the time of the referendum but also spends all the money necessary attempting to convince people. It is a direct raid on the power of the provinces.
December 19, 1980

If I am interpreting this morning's news correctly, what is happening today is that representatives of the three western provinces will be meeting to formulate a joint stand in terms of the energy policies of this country. This scares me in several ways. It means that Mr. Blakeney of Saskatchewan is no longer the "kept man" of this federal Liberal government. He is looking out for the best interests of the people of Saskatchewan, as he should.
If you are going to criticize, and I have done so, you should have something constructive to offer. We have two alternatives. We can go the way this Liberal government is now going, which means in March a cutback of 60,000 barrels of Alberta oil and two subsequent cutbacks as well as the year rolls on. There are two subsequent cutbacks as the year rolls on. I do not believe this country can stand that. It should not have to stand it. However, that could take place.
Also, we have an energy minister who has shown a complete inability to negotiate and does not have the faintest idea of what is taking place in western Canada. That will mean continued difficulties, a major slowdown in drilling, exploration and development in the maritimes and the west. That is one policy.
There is another policy which this government in one way or another could follow and which would solve most of the economic problems of Canada. We require in this country $1.2 trillion for the development of tar sands, for exploration on Sable Island, Newfoundland, the north and Alberta. Where will that money come from? It cannot come from the Canadian people, although that seems to be the proposal of the government. That trillion dollars is investment capital and it is available if we will treat the companies and investors fairly, and that means they should have their world price.
Let that flood of money into this country to develop a couple of tar sands plants. Bring back the drilling rigs. Tell the companies we will treat them fairly, that we will make them a deal they cannot refuse. A drilling rig working in Colorado does absolutely nothing for Canada. A drilling rig working in Canada can make a difference to our energy self-sufficiency. Therefore, we must bring them back.
This has to be the best policy for Canada to adopt. This year, $5.5 billion will be paid out for foreign oil. Over the past nine years, we have had a total deficit of $65 billion. If we attract the capital to obtain oil self-sufficiency, we are $5.5 billion better off this year. Over the next decade, we will be better off by more than $65 billion.
My friends on the extreme left want social programs. Think what we could do for the poor, the underprivileged, the low-income people of this country, if we did not have a drain of $65 billion, $5 billion a year, in terms of an oil subsidy. Those are the choices we are looking at.
The policies of this government will lead to the separation of western Canada. That should be stated flatly and straightforwardly. 1 do not think anyone in the Liberal benches is
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listening, nor do they have the faintest idea of how serious the situation is out there.
All it is going to take is one more insult to the west. That insult could easily come this spring. If this government attempts to use "peace, order and good government" or if it attempts to use the declaratory power, I suggest secession will be a possibility. If they go as far as the War Measures Act with regard to some of the things that seem to be on their agenda in terms of oil and gas policy in detriment to the west, secession will not be a mere possibility, the people will be demanding it. For heaven's sake, consider your options. Realize there is something more at stake than interest rates and economics. The very fate of our country rests in the balance of what this Liberal government does in the next six months. God help us all if the government does not revise its policies.
[ Translation]


Mr. Marcel Dionne (Chicoutimi):: Mr. Speaker, one year ago at this time I launched vigorously into my second electoral campaign and, thanks to the performance of a Progressive Conservative government, I was returned to this House with a majority never achieved before by a Liberal candidate in my riding.
Mr. Speaker, I am sorry to say that the opposition has enabled us to gain a renewed mandate for several years and that this debate has not really been initiated to find solutions to our current problems but indeed to earn political capital at a very bad time of the year. When we relate interest rates to the moral problems which certain regions of our country have experienced, Mr. Speaker, I suggest that most hon. members who took the floor during the night have failed to come up with truly serious arguments to help the have-nots.
Mr. Speaker, I think that under the circumstances the Minister of Finance (Mr. MacEachen) has acted very courageously and in the best interest of Canadians. Let us go back to last year, Mr. Speaker, and recall the policies of the Progressive Conservative administration which today passes itself off as the defender of the poorest people in this country. Let us recall the policies advocated to help the rich. How were we going to help the rich? By levying an 18-cent excise tax on a gallon of gas to the detriment of the poor. It should be said, Mr. Speaker, they stand in the House to uphold the interest of hypocrisy pure and simple.
It is unthinkable, Mr. Speaker, to hear them say our country is going through a crisis, and to witness debates such as we have heard throughout the night and monopolize the time of all hon. members, of an entire nation, in an attempt to warn against an emergency situation. We are still in a privileged situation if we compare ourselves with all other industrialized nations. Indeed, Mr. Speaker, we should mention our energy policy, knowing full well as we do that our energy policy is perhaps one of the most outstanding ever introduced in the House. Mr. Speaker, the time has come for us to put the accent on a nationalist policy in this country. We know that
6000

December 19, 1980
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with such an energy policy billions of dollars which were previously exported to other countries by the multinationals will remain here. Let us be proud of that policy, let us be proud of that policy-


Bob Rae: That's not true!


Marcel Dionne: Do not be afraid to say that our profits are higher, but less goes into exploration. Members opposite must stop saying we do not have a good policy. They talk about frustration and alienation in this country. It is not the people who are frustrated. Most times it is the politicians on the other side of this chamber who are frustrated. This frustration is broadcast all across the country by politicians, not by the people. I suggest they show some pride.

They talk about policy but perhaps they should spend a little time in Europe. A gallon of gas costs $3 there. Here we still have an energy policy acceptable to all Canadians. For the first time, Mr. Speaker, we have a Prime Minister (Mr. Trudeau) who advocates great policies. When we refer to free exchange of goods and services or to distribution of natural wealth to all citizens, that is what we mean by a policy which helps all classes of society. The energy belongs to all Canadians, Mr. Speaker, and the time has come to start benefiting from that policy. How hypocritical, Mr. Speaker, after one year they are scandalized by the attitude of people who cannot refrain from spreading all kinds of falsehoods throughout the country.
Mr. Speaker, the debate would have been much more useful had it been held at a more appropriate time. No one here will convince me that we have managed to improve the economic situation during the night. If we were really going through a crisis as described yesterday and if people were really responsible for the administration of the country we would have behaved more seriously. Many suggestions have been made but I am not at all sure they were always the ideal solutions to redress our economy.
Mr. Speaker, again I say that our finance minister has acted in the best interest of Canadians. Let us be realistic and honest. Let us compare our economic conditions and those of other major industrialized countries in the world. Let us compare conditions with our fellow citizens and we will readily conclude that we are privileged indeed. Mr. Speaker, we should stop spreading insecurity in all ranks of Canadian society. Our economy does not stand to gain anything from such comments as those voiced by the Leader of the Opposition (Mr. Clark) and the former finance minister.
It is true, Mr. Speaker, that we are going through hard times and that interest rates are high. 1 hope this situation is temporary and I would urge all politicians to stay calm in these circumstances. I live in a very remote area, Mr. Speaker, but I can state clearly that our aluminium, pulp and paper and lumber industries are all operating at full capacity. They have
made great progress in recent years because of the gap between Canadian and American currencies.
Mr. Speaker, I do not think we should be unduly alarmed because after all there are certain regions in our country where the economic outlook is promising, including mine. My area is known especially for its export products and that is certainly an asset these days. Of course we may see danger signals if our dollar grows weaker still because of imported goods. But perhaps the time has come in that so-called economic crisis as described last night for us to have a second look at some of our habits and put more emphasis on Canadian goods instead of always seeking imported products. Mr. Speaker, we have all kinds of agricultural products in this country which, in the past, may not have been the envy of consumers, but which are just as nourishing and certainly lower priced than produce imported from California or Florida.
1 know, Mr. Speaker that we ought not to play hide-and-seek. We find ourselves in a rather difficult situation but I am convinced that it is temporary and that we are not going to bolster our economy by holding the kind of debate we have had during the night and by advocating unacceptable solutions right and left and limiting ourselves to criticizing. I wish we were all more serious in this debate. Let us put an end to doom and gloom statements which upset the Canadian people and let us take economic corrective measures as soon as possible so that the have-nots will continue to progress at the same rate as all others and that our economy will grow without interruption. I am convinced that our predicament will not last. Nonetheless let us wish all Canadians a happy holiday season.


Mr. Fred King (Okanagan-Similkameen):: Thank you very much, Mr. Speaker.
1 was utterly astonished that the hon. member for Chicoutimi (Mr. Dionne) who just spoke, a member from a province whose good people have asked us to believe that the Canadian system of government, social and economic order has been offensive to the interests of the people of that province, would not understand that we, too, should take offence. Believe me, as a member from western Canada, we are offended by some of the things that take place in Canada. We believed those hon. members when they spoke about their objection to certain things. We accepted their word and we want them at this time to accept the fact that we also want change. 1 am amazed that there is no such reciprocity in the hearts of hon. gentlemen opposite.
We have indicated that we have grievances within confederation which are not being adequately addressed. To hear hon. members state in this House that this is a pipe dream of politicians and does not represent the real emotion and concern of the people who live in the west is utterly beyond my comprehension.
December 19, 1980

For the past 13'/2 hours we have been demonstrating the very deep concern which members on this side of the House feel about the state of our national economy. There is potential damage to our precarious economy as a result of neglect, irresponsible action and inaction on the part of the Liberal government which has wasted opportunities provided by some 20 or more years of power. If those opportunities had been seized for the benefit of the nation rather than for the benefit of that party there is absolutely no question that Canada would today not be beset by the ills we are experiencing.
I am very sorry more government members have not accepted the opportunity, the challenge and the responsibility to sit with us during this night because I think they might have found it a worthy experience. Having said that, I think it is only appropriate to acknowledge my appreciation of the presence of the hon. member for Ottawa Centre (Mr. Evans) during the entire period of this debate on Canada's economy.
1 must note at this point that it was this government which chose to make the constitutional resolution a priority of this Parliament, despite obvious evidence that the economic ills should have preoccupied us all. This is evidence once more which shows that the Liberal government under the present Prime Minister (Mr. Trudeau) puts its own objectives and goals before those objectives and goals that are primary to the welfare of the nation.
I was moved last night by the reasoned and calm appeal made to government members. They responded to that appeal by the hon. member for Edmonton South (Mr. Roche). I would hope that through all the emotion and bombast the considered reason which was presented, in so many speeches, demonstrated to government members in the House today, that they should make the effort to understand the background of our expressed anxiety.
It has been some year! We have the constitutional issue, the new budget, some hot political rhetoric and a country at odds. Alberta and Ottawa continue to hold centre stage, while in the background the federal government tries to keep the lid on the constitutional debate by muffling it with closure and other devices. While these are separate issues, they are all linked with the thread of energy, and there is no way of escaping this sticky problem. The most disturbing thing is not merely that we are seeing issues divide politicians but that politicians are dividing Canadians. There seems to be something tragic and demeaning about political strategies which are fuelled by regional differences and which thrive on internal turmoil.
Out of the whole batch of issues one of the most worrisome to us is federal energy policy. We do not believe this country is prepared for nationalization of the petroleum industry, and this fear has been expressed over and over again during the last 13 hours. We do not believe the country is prepared for the nationalization of the petroleum industry, yet that is the direction in which it appears Ottawa is driving us.
Instead of the various governments staging high stake poker games, the Canadian people would be better served by being
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told that the free lunch is over. Welfare waste must be cut, energy conservation must become a reality and meaningful steps need to be taken to shift spending from consumption to investment and development. We would like to see the federal government send out the message that if we are to protect our standard of living, we must increase production. Most important, we need to get our priorities straight. The ensuring of long-term industrial and regional benefits for Canada from energy-related projects should be our national priority. We can lessen our reliance on unstable energy sources. We can eliminate that reliance. It is time for policies and ideas with vision. It is time to turn adversity and despair into hope and opportunity. It is time to give rewards for effort a higher priority and to encourage small business restructuring and refinancing. It is time to deregulate where appropriate and to reduce the burden of the state on the economy.
It is time to face facts and realize that the day of cheap energy is over. A poll in British Columbia indicated that 49 per cent of the people in British Columbia want more provincial powers, 13 per cent want more federal power, 21 per cent want the status quo and 18 per cent do not know what they want. This preference in British Columbia does not mean a lack of commitment to Canada. On the contrary, it shows a commitment to a particular kind of Canada, which may not be that of the Prime Minister. Less than a year ago there was no talk of separation in western Canada. A compromise on energy policy was within reach. Rewriting the Canadian Constitution was simply not an issue. That was less than a year ago. What has happened? It is no accident that the relative calm of November, 1979, has been transformed a year later into hostility and bitterness. It results directly from a calculated assault by the Prime Minister and his close advisers upon the institutions and traditions of Canada. Canada is to be changed. It is Ottawa, not the provinces, which has raised the national debt to $105 billion. It is Ottawa which has overspent to the point that one-fifth of federal expenditures goes to pay interest on the debt.
It is Ottawa which has led Canada into a dream world where no one needs to work if he does not want to do so and where the state will take care of everything. The budget, the national energy program and the proposed new constitution are all linked together. Canada is to continue in the socialist mould, with power increasingly concentrated in Ottawa. Effort will continue to be diverted from wealth creation to wealth redistribution, and 1 want to underline that. This is the danger we face today. It is a most ominous danger. That is why Ottawa demands more revenue from oil and gas, to bail itself out of its condition of undeclared bankruptcy.
What is it which has caused the disaffection in British Columbia and the west? I believe it is the realization that policies originating in Ottawa under the Liberal government- this appalling disaster which has beset Canada-have one purpose and one purpose only, and that is to attract the support of the largest block of voters in Canada. It is exclusively to attract the votes of central Canada. Where is the national interest? The national interest never has a chance

December 19, 1980
Economic Conditions
whenever there is a choice between the national interest and the interests of the Liberal Party of Canada. The party wins hands down.
The Prime Minister, who casts doubts about the calibre of citizenship of those Canadians who disagree with his vision of a new Canada, asks westerners who feel alienated what kind of Canadians they are. He says they are hysterical and selfish. We do not have to use those labels for the western Canadians 1 know. It was western Canadians who in the election in February rebuked the Liberal appeal to vote not in the national interest but to vote against 18 cents because "that would hurt people personally". That was the inference. The real message of that campaign was that we do not have to make sacrifices to live in Canada and that we need only look after ourselves. Western Canadians turned away from that appeal to selfishness and, by rebuking that appeal, we demonstrated our loyalty to Canada. This is our nation and we care deeply for Canada.
Citizens in Okanagan-Similkameen are not selfish Canadians. Their concerns are not parochial. Sure, they worry about jobs. They suffer through inflation. They are damaged by high interest rates. Young people there want to own their own homes, and older people retiring to the Okanagan want security and comfort in their declining years.
They worry about health care, retirement centres and public transit. Fruit growers and cattle ranchers trying to cope with increasing costs of land, equipment, supplies and labour are being damaged by the cost of borrowing money and by the disadvantage of living at the extremity of Canada 3,000 miles from the major population market. The citizens of Okanagan-Similkameen face the problems faced by people right across Canada.
Do you know, Mr. Speaker, what their greatest concern is? It is about Canada, the future of our nation, the anxiety imposed upon them by the government in Ottawa which plays province against province, area against area, people against people, a damaging game of power politics which threatens to tear our nation apart.
Canada is the preoccupation of the people in Okanagan-Similkameen. We have a budget which fails to address the national dilemma, an energy non-policy which seeks to put the major burden on one area and the one group of people who happen to have minority representation in Ottawa. It is for the benefit of the more populated areas of Canada which control the political system. We have a government in place which is more concerned with power than with the national well-being. We have a spending regime which has as its standard waste and a preoccupation with unproductive activities, a record of deficit spending year after year which has left our nation hostage to every economic and financial ill wind which blows in the international climate. It is this irresponsible wasting of our Canadian product which explains why our nation cannot maintain an interest rate that is independent of the United States. This government's economic package, if it has one, is a
total preoccupation with one national problem only, namely, inflation. We hear the phony response over and over again "we cannot do that", "we cannot do the other", or "we cannot do this". Why? "Because inflation will result". I say that Canadians are prepared to sacrifice for the nation's well-being. I think the government underestimates them. In my estimation Canadians would be even prepared to accept an additional personal hardship if we were creating something positive in Canada.


Some hon. Members:: Hear, hear!


Frederick John King: The problem is that we have the hardship of inflation, we have the hardship of high interest rates, we have immense deficit spending, we have wasteful habits, we have an arrogant disregard of common, decent, honest politics, and we are not in the process of creating national values, either in material or in national good will. We are defeating both those purposes.
I quote from The Citizen, which is not exactly noted for being an opposition supporter:
The interest rate policy for which Finance Minister Allan MacEachen is making no apology will do much more damage than good to the economy. MacEachen finally acknowledged last week what everyone knew ever since the Bank of Canada began tracking the American interest rate fluctuations-that Canada's monetary, and so-called anti-inflation policy, is being set in the U.S.
Curtailing inflation, achieving energy and food self-sufficiency, building a sound industrial base-all of these objectives are being sacrificed by the do-nothing federal government. The course of its policies will force on Canada a further debased currency, higher inflation and lost economic rewards.
So says the Ottawa Citizen. Thank you, Mr. Speaker.


John Patrick (Pat) Nowlan: Mr. Speaker, someone said "at last", and certainly many members, as well as the Hansard reporters and the translators, would like to say "at last". But it is at last my chance to participate in the debate, and the chance for many other members who, because of the importance of the subject matter, will want to add their thoughts to this discussion.
What is truly amazing in this whole debate, which started at eight o'clock last night and which has lasted until now, at quarter to ten on Friday morning-whether that is the Friday of the parliamentary day will, I suppose, be settled later-a debate which has lasted now thirteen and a half hours and some minutes, what is truly shocking and what concerns me and other members who have sat here during the night-there were some good contributions from backbenchers on the government side earlier in the evening-is that since 1.30 a.m. there has not been one member of the cabinet present in the House during a debate which affects the pocketbooks, the lives and the futures of Canadians from coast to coast.


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: That in itself should bring condemnation to this government which sits casually by hoping that the Christmas spirit will let them off the hook, after having deceived Canadians last year in a most dishonest election campaign.
December 19, 1980


Some hon. Members:: Shame!


John Patrick (Pat) Nowlan: I agree with what the hon. member for Qu'Ap-pelle-Moose Mountain (Mr. Hamilton) said so sincerely and clearly early in the debate last night, with his years of service to this Parliament. He said things I have never heard him say directly to the Minister of Finance (Mr. MacEachen) who was present in the chamber at that time, who deigned to be in the chamber, who condescended to come to the Commons at a time when interest rates have reached their highest peak in the history of this country and the dollar is the lowest it has ever been since depression days. They say it is a pause in the recession or a pause in the recovery, a sort of hiccup on the way to progress. Mr. Speaker, with that type of hiccup, we will asphyxiate and choke ourselves to death unless the minister gets off his posterior and comes in after the Christmas recess, if we have one, with an action program, not a rapid, vacuous explanation and weasely dealings of the crafty Scot from Cape Breton.
1 respect political acumen as much as any member in this chamber and I am prepared to give my due to the individual political acumen of all members because obviously the fact we are here proves some political ability. But when you are a minister of the Crown and it took longer for you to put your government in order and to bring your budget down than it took the previous government of my leader, the right hon. member for Yellowhead (Mr. Clark), which you complained about; when it took you longer to produce a budget which was a budget in name only because it did not deal with inflation, unemployment, interest rates or growth and which brought in by the back door an energy package which has affected this economy, it is time to start calling facts by their name. It is not just the federal reserve board of the United States that has affected the economy.
When a politician finds an interesting editorial anywhere, he wants to refer to it some time in the debate. When the minister rose in the House last night he gave a sort of response in the debate following three opposition speakers, namely, my leader, the Leader of the NDP who led off the debate and the former finance minister from my party. The minister condescended to speak. He did not want to take part in the debate when he should have done so in the first round of leading speakers. That in itself is testimony to the fact that the Minister of Finance is incapable of leading in the area of finance for which he has responsibility. He wanted to play political games. He did not want the hon. member for St. John's West (Mr. Crosbie) to follow him because he thought that perhaps the former minister of finance would carve him up, as he should have done. It is a very faint hope that we will be out by then, but a week from today will be Boxing Day. This debate started a week before Christmas. On Christmas Day we will be carving up turkeys, and the biggest turkey to be carved up is the Minister of Finance who was in his seat in this chamber only until 1.30 a.m. I am not referring to the absence of other hon. members but I am saying that nobody from the treasury benches replaced the minister who perhaps had to absent himself. All hon. members understand when a minister, due
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perhaps to previous commitments, cannot be present at a particular debate on matters which perhaps are not too important for him, as obviously the minister has had to excuse himself. He might have had to go to bed to sleep for four or five hours. He may be involved in a reunion or he may be required to say "hello" to his staff before going away for Christmas. There are many important things to be done. Obviously ministers can absent themselves from the House. 1 understand that. As some speakers said earlier in the debate, when some things are illegal and unconscionable, they are not acceptable.
When I came into the House the interest rate was frozen at 6 per cent by the Bank Act. 1 remember the debates which occurred to remove the ceiling so that interest rates would rise and there would be supply and demand. The idea was to let the free flow happen. Some of my farmers have loans with banks in order to help pay for their crops or to purchase seed for the crops of next year. They are being charged 22, 23 and 24 per cent. Also some of my fishermen who are trying to obtain loans face the same interest rates. Some of the students in my riding who want to attend university will not be able to do so because of the interest rate. We must all face the interest rates. There is no easy answer. The minister harped on that last night.
Not only is the Minister of Finance on trial here. Perhaps this institution, the government and our system are on trial. Some people out there are not closely identified with politics. Just a year ago the Minister of Finance and the Minister of Industry, Trade and Commerce (Mr. Gray) who was the finance critic of the opposition criticized the Conservative government. In a year they flip-flopped and in effect, gave the same answers as were given by the hon. member for St. John's West when he was minister of finance. They have indicated that there were outside influences other than just the weather. To try to fool Canadians in that way places an onus on all members, certainly members of the Treasury Board. They did not even bother to attend the House of Commons for this debate from about 1.30 a.m. onward. Of course the Parliamentary Secretary to the Deputy Prime Minister and Minister of Finance (Mr. Evans) was here. He was the one man from the treasury benches who was here throughout. 1 can understand members coming and going, but the only other minister who showed his face, as the parliamentary secretary knows, was one who was not involved in the debate. He strolled in, talked to his friends, and removed himself in approximately five minutes. I have never seen a debate on such an important subject from which members of the Treasury Board have been absent. It shows the extent of their interest in trying to do anything. I am referring to ministers, not to members on the government side. It shows the fundamental contempt of ministers for the House of Commons. It indicates their casual, negative approach to this question concerning the economy and interest rates.
It is amazing. The Minister of Finance was absent from the chamber for hours. As my leader or someone else said earlier

December 19, 1980
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in the debate, the man is almost a phantom. The Prime Minister (Mr. Trudeau) of this land can go out to philosophize and make extemporaneous speeches before attentive andiences of party faithful. He can appear before the assemblies of the schools of the land. He can walk in with advance men and walk out with retreat men.
There have been debates on the constitution as well as constitutional questions. There has been confrontation on energy. Those matters have been mentioned tonight, but before the House adjourns for the Christmas recess, when the state of the economy was never in a poorer and more perilous way, 1 would think the Prime Minister might deign to come off his Olympian plateau. He has blinkers about the constitution and he has phobias about premiers. He should come down from the mountain and say what he thinks about the economy. He should give some direction or at least talk to the Minister of Finance.
We are facing a run on the dollar. Our reserves are published at the end of the month or at the end of a quarter. I think the publication of those reserves in support of the dollar will be horrendous. Perhaps the parliamentary secretary has the information. If he does, I hope he will tell us and perhaps participate in this debate. Not only interest rates will save the dollar. In time we will find out that there has been a fundamental play with our reserves to protect the dollar.
I was intrigued with the argument of the hon. member for Qu'Appelle-Moose Mountain. 1 would love to have the government poke holes in it, because obviously 1 do not yet know where the holes are. He talked about a 1 per cent increase in the dollar which affects the importation of $50 billion worth of goods. It may be so simple that the parliamentary secretary can refer to it when he participates.


John Leslie Evans: I did last night at 12.30.


John Patrick (Pat) Nowlan: I heard the parliamentary secretary but I do not think he debunked it. A 1 per cent increase affecting $50 billion of imported goods is an interesting theory. In my layman's mind it is not the same as a 1 per cent interest rate increase, compared to the figure the member used last night.
I will read the speech of the parliamentary secretary again. 1 was privileged to sit at one time on the right hand of Mr. Speaker. 1 listened to the backbenchers last night and 1 commend the ones who had the guts to rise, and not really to defend the Minister of Finance. They talked about other matters, they talked about the economy. In effect they participated in the debate. I know how difficult it is for a member sitting as a backbencher to defend this question, because I sat as a backbencher last year. Sometimes backbenchers do not always agree with the minister of finance in certain matters. In that context I respect those who participated last night, but having tried this other monetary theory almost without qualification, 1 would like to have the choice to buy an imported product. If I cannot buy an imported tomato, for example, because of the high cost due, perhaps, to the level of the dollar, it would be my choice. I have no choice when I receive a slip from the bank which indicates that my interest rates have risen.
In the last three weeks I have received many letters and notices from my bank. I have not opened them all because they contain bad news. The interest rate has jumped repeatedly, and I have no choice in that regard, but 1 have a choice if I want to buy an imported product. If I buy an imported car, it is my own choice. If I want to buy an imported transistor television set or imported foodstuffs, it is my choice. I will make the choice. If 1 think it will cost too much money, I may defer it or put it off. I am not prepared to accept blindly what the economists have said. They have indicated that when the value of the dollar goes down, the cost of imported goods rises and inflation is higher. I have already told some members of my family not to buy imported tomatoes because they do not contain any vitamins at this time of the year, they cost too much, and they do not taste as good as Nova Scotia tomatoes at the height of the tomato season. That is when tomatoes should be eaten.
I should like to refer to an editorial which appeared in The Globe and Mail. It is not as simple as both governments being confronted by outside influences in the last year. The Conservative government came out with a budget which every responsible economist, editorial writer and businessman said- and most Liberals on the backbenches knew-was the first responsible budget to address long-standing problems.


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: There is no doubt about that. 1 became irritated with the Minister of Finance who comes from the same province as 1. I got my dander up and my Irish saw a little flash when I listened to the minister's hollow, weak and almost dishonest response to such grave matters. He did not choose to stay around or even have another minister here to pay courtesy to all members who participated. This is not a general argument. On December 1 3, which is a horrible date to remember, an article entitled: "Not All Imported" appeared in The Globe and Mail. Others have said it in different ways. But the argument about pressure on the dollar is not the usual one. It has to do with whether there are incentives to invest in this country and should there be money left after the budget plans are in effect. In effect, that discriminates against investment and forces it offshore. Will there be pressure on the dollar when there is not development in the tar sands?
Under this budget inflation is ever-increasing and it contains a Canadianization program which will involve more government expenditures. It includes the Foreign Investment Review Agency, which certainly causes concern in terms of investment planning. These and many more items are in the control of the government. Something could be done about the pressure on the dollar without getting into the charade of saying that you want to spend more. In effect that just perpetuates the whole problem by increasing the deficit.
So the problem we are facing, having the highest rate of interest this country has ever seen, compounded with the lowest value dollar since the depression, is not the usual
December 19, 1980

economic argument that Parliament has heard for the last year or more, there are very direct references to the policies of this government which stem from the budget.
My time is quickly running out and I know the staff, the translators and the reporters, have been here for a long time. My friend from Etobicoke talked about the misery index. Obviously there is discomfort in order to keep the House of Commons going for as long as it has. If the government or its ministers, when they finally read this debate, or when ministers come into the House-and I am glad to see there are some here now-do not appreciate that throughout the night there were not just three, four or six members of the opposition, which is usual in an all-night debate of this type, which normally peters out around three in the morning-instead there were between 20 and 30 members in the House and those members were always within the call of the whip-if that does not show that there is a sincere concern about where we are heading, and if it does not indicate the frustration which members in my party feel, then I do not know what is.
In terms of the constitution debate we are not only the official opposition, we are basically the only opposition. The NDP cannot be considered that because they sold their soul for a mess of pottage and a couple of letters between their leader and the Prime Minister. Those members who were concerned about closure being invoked on the constitutional debate were the members who spoke last night. They used the generality of this debate to rid themselves of the frustration which they feel. I think members would agree with me, as a member who has experience with this type of debate, that there were serious and constructive speeches made by members from all parties. If the government does not get the message that members are concerned, then we are heading for future problems.
Mr. Speaker, the discomfort index which we all feel is unfortunate. It is easy to differentiate between the night crew and the day crew. The night crew have gone out to shave and will return. The day crew have arrived clean-shaven, as they were not here all night. The point is, Mr. Speaker, that this is only a momentary discomfort. Many people involved in this debate discharged their responsibility seriously. They were here, and they may come and go as they must. The discomfort index is a minuscule matter when compared with the discomfort felt by the people in my own riding who are caught in this vice of a stagnating economy, with bills to pay and interest rates ever-rising.
Mr. Speaker, in conclusion I would like to end my remarks on a lighter note. Since I thought at one time I would be speaking very early in the morning-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. gentleman but-


John Patrick (Pat) Nowlan: Mr. Speaker, I want to quote one poem. It is not an unkind thing to do. Frankly, I could have made my whole speech based on this poem.
Economic Conditions


The Acting Speaker (Mr. Ethier):: If the hon. member is to continue, he must obtain the agreement of this House.


Some hon. Members:: Agreed.


John Patrick (Pat) Nowlan: To conclude my contribution to the debate I want to say that there are three new horsemen here in the House of Commons. They are known as Wynken, Blynken, and Nod. I would like to read to this House this beautiful nursery rhyme:
Wynken, Blynken, and Nod one night Sailed off in a wooden shoe,-
Sailed on a river of crystal light Into a sea of dew.
"Where are you going, and what do you wish?"
The old moon asked the three.
"We have come to fish for the herring fish That live in this beautiful sea;
Nets of silver and gold have we!"
Said Wynken,
Blynken,
And Nod.
The old moon laughed and sang a song.
As they rocked in the wooden shoe;
And the wind that sped them all night long Ruffled the waves of dew.
The little stars were the herring fish That lived in that beautiful sea-
"Now cast your nets wherever you wish,-
Never afear'd are we!"
So cried the stars to the fishermen three,
Wynken,
Blynken,
And Nod.
All night long their nets they threw To the stars in the twinkling foam,-
Then down from the skies came the wooden shoe,
Bringing the fishermen home:
Twas all so pretty a sail, it seemed As if it could not be;
And some folk thought 'twas a dream they'd dreamed Of sailing that beautiful sea;
But I shall name you the fishermen three:
Wynken,
Blynken,
And Nod.
Wynken and Blynken are two little eyes.
And Nod is a little head,
And the wooden shoe that sailed the skies Is a wee one's trundle-bed;
So shut your eyes while mother sings Of wonderful sights that be,
And you shall see the beautiful things As you rock in the misty sea Where the old shoe rocked the fishermen three:-
Wynken,
Blynken,
And Nod.

December 19, 1980
Economic Conditions
1 think Wynken is the Minister of Finance, who winks at a disastrous policy and is not prepared to change it. Blynken is the Minister of Energy, Mines and Resources (Mr. Lalonde), who blinks at the non-reality of world prices. Nod is that little head who sometimes shrugs and sometimes nods but, unfortunately for Canada today, he dreams a little too much when Canada cries for action.


Some hon. Members:: Hear, hear!


Mr. Jim Peterson (Willowdale):: Mr. Speaker, following the hon. member for Annapolis Valley-Hants (Mr. Nowlan) 1 am reminded of a Shakespearean sonnet "On His Blindness"-


Rodney Edward Murphy: Milton.


James Scott (Jim) Peterson: At any rate, 1 think it goes something like this: "In the gray light of dawn, my heart grew sick, to hear how the opposition got their kicks."
Mr. Speaker, 1 would like to say that this is an important debate spent in discussion of a very important subject. As I am a new member to the Thirty-second Parliament 1 cannot imagine how any session of Parliament could be more historic than this one, at least since the Second World War. The session started off with the Quebec referendum, which resulted in a constitutional renewal, a call for that renewal by the leaders of all federal parties and by all provincial leaders in Canada. As a result of that call for renewal, the constitutional bill was introduced and we have seen that there are problems in Canada and that unanimous agreement is not being achieved.
Another reason that this is a particularly historic Parliament is because of the national energy policy, which is an attempt to set forth the future path for energy self-sufficiency and an energy strategy, so that future generations can enjoy the abundant riches which we and past generations have had here in Canada. 1 do not think, Mr. Speaker, that we will be able to achieve this future unless we look at the referendum, the national energy package, and the constitutional bill, as one integral whole.
They are all interlinked by the common theme and by the question, what do we believe Canada is? As the Prime Minister (Mr. Trudeau) has said, there are two views of Canada that have emerged, and these are two critical views that we must bear in mind. The one view, and we can understand this coming from every provincial leader because their mandate is to their provincial population, is that each must bargain for the provincial good of their own particular province. They were elected by the provinces and that is their responsibility. The question is whether that type of philosophy should govern the way we, members of all parties in this federal House, conduct our own mandate. Do we take succour from what they aredoing or do we take our own responsibility of trying to meld these diverse regional interests, these diverse provincial interests into
one integrated whole that will work for the benefit of all Canadians?
This is the approach which we will have to take when dealing with the question of our economy, our present high interest rate, the very low dollar and other questions which we are facing today. These are indeed very challenging times, but before we get to a point where we let emotion-and yes, it is an emotional issue; and yes, people are hurting; and yes, things are not as we wish them to be-take precedence over the route which we will have to follow in introducing concrete policy, let us just think back, to sum up the great challenges which we have faced. We are in what Alvin Toffler, the world's greatest futurist, calls "the third wave." It is the wave of the information revolution. The first two waves were the agricultural revolution and the industrial revolution respectively. We are now in the third wave, the information revolution, where new technologies and the sum total of world knowledge are doubling every 15 to 20 years. This imposes vast new challenges on the way in which we operate, on the way we look at our world and respond to the needs of Canadians.
We have seen how these changes can affect the lives of Canadians. Take, for example, the OPEC crisis. Since 1973 the OPEC price of oil has increased approximately 15 times. It has created vast new winners and very poor losers. Wealth has been funnelled into various areas of this world and, indeed, into new areas of Canada where it had not existed before. All of us in this House rejoice in the fact that the western provinces, particularly Alberta, now have this wealth.
We are indeed blessed and fortunate that we have this wealth in Canada. But let us not forget the cataclysmic changes which can take place in this age of technological revolution and how we as a country have stuck together for over 113 years. This has been based on the premise of working together and respecting each other's needs and legitimate concerns but, more so, by working together. Let us not look at this in one-year or two-year perspectives. Over the long run we will all be stronger by adopting a policy of working together and understanding each other's legitimate concerns.
Let me talk a little about the budget because this has been one of the areas of attack by the opposition during this extensive debate. Let us again try to step back from the heat of the moment and the debate and recognize a few realities. These are fundamental realities and these are the facts. Canada's economy, more than any other economy in the western world, is inextricably linked to world economic events. Canada is the greatest trading power in the world relative to the size of its economy. We are more dependent upon international trade than even Japan.
In terms of our capital markets, we have not introduced exchange controls, nor do we intend to. We have free flows of capital occurring. How can we innoculate ourselves here in Canada when we are so dependent on foreign exchanges of capital and foreign exchanges of trade? How can we innocu-iate ourselves against the world economic realities when this is
December 19. 1980

the present fact in Canada which also involves the kind of future upon which we will build to give us the economic strength we will need.


An hon. Member:: Not with your leader.


James Scott (Jim) Peterson: An hon. member opposite said, "Not with our leader". Perhaps we could then refer to what his leaders have been suggesting. For example, in the budget debate we have been criticized severely for not cutting the deficit more, particularly by members of the official opposition. But at the same time that they have been calling for budget cuts and cuts in the deficit, they have asked for at least 30 brand new expenditure programs.
If hon. members opposite would look at the debates they will find that at least 30 new spending programs have been proposed by members of the official opposition. 1 can understand their legitimate concerns for people who are hurt, but we must ask hon. members if they are prepared to increase the deficit in order to undertake these expenditure programs and increase inflation by increasing the size of the government debt. Hon. members cannot have it both ways. It is easy to criticize. Let us come up with some concrete solutions. I have not heard from members of either of the two opposition parties one concrete alternative to the present situation in which we find our dollar at a low and interest rates at a very high level. Have they advocated that we peg the interest rate at a fixed level? No, they have not, because they know that it would be irresponsible.
It is not enough for members opposite simply to criticize. They have an obligation to the people in their constituencies and throughout this country, as members of this federal Parliament, to look at the broad national interest and to work with us to help devise alternatives if they have them. Until I see those alternatives 1 would have to assume that either they are convinced they would not work or that they do not have them.
1 would like to expand on a few of the remarks made by the hon. member for Oxford (Mr. Halliday). I thought he made some very cogent comments in debate earlier this morning on the need for greater research and development in Canada. 1 think members from all sides of this House support this subject as one of our priorities in the months which lie ahead. It is the type of approach we take as part of our industrial strategy that will help build Canada's future, and we must focus on the long term.
One of the priorities for increased research and development in Canada will be added expenditures. I do not think we can get around the situation without them. I hope that these added expenditures will come through a combination of co-operative efforts undertaken by the National Research Council and the universities, but mainly by the private sector. The private sector needs the research and development in order to grow and become productive. We can utilize the NRC and the universities in co-operation and under the direction of the private sector as one means of achieving growth in research and development.
Economic Conditions
1 do not think that members of this House should be satisfied with a target growth of 1.5 per cent of gross national product. The competitive realities in this harsh world are that those expenditures must go to at least 2.5 per cent. I welcome support from members opposite on that type of approach.
I would like to suggest that as part of this industrial strategy we ought to be looking at the concept of world product mandate. I am happy to see that corporations, both foreign owned and Canadian owned, are now developing the process of world product mandating of goods, producing one product in Canada and exporting it around the world. This is the type of program which has come about through the encouragement of our Minister of Industry, Trade and Commerce (Mr. Gray). It is one on which we should be building in the future because of its great potential to help Canadians become cost efficient and competitive in international markets.
We will have to work with the United States, our greatest trading partner, through bilateral negotiations to solve these situations. We will also have to look at increased fiscal incentives for world product mandating and exporting.
Part of this industrial strategy will have to involve reliance and co-operative effort with small business. I do not have a knee-jerk reaction as some members from the official opposition do against providing assistance under certain circumstances to small business. I do not look on this as an expenditure. I look on it as an investment, an investment in individuals who are Canadians and who have the potential for creating new jobs. After all, small business is free enterprise in action and it is the engine of our economy.
I have one caveat. When we consider assisting small business through grants or whatever, I do not think it should be a one-way street for government. I do not think that government in the public sector, which is really the trustee of all taxpayers' money here in Canada, should have no upside potential but only downside potential. When this type of assistance is given, providing that small business does profit from the incentives we have provided, then I believe the government should be able to participate on the upside in those profits as well. In that way we will have more funds to regenerate and assist the private sector and to respect the wishes and needs of small business.
I am encouraged by the foreign marketing assistance which our minister of trade is giving to small business. He has travelled around the world. I might mention the Pacific Rim conference which was the idea of the hon. member for Vancouver Centre (Miss Carney). We certainly recognize the efforts she made to start that and we are happy to have carried it on. It was a very successful conference and there will be more. This is the co-operation between government, small business and the private sector that can help make the private sector even stronger.
In concluding my remarks on industrial strategy, which I see as one of the great long-term future benefits for Canadians, one sector has been ignored, that of the white-collar worker.
6008

December 19, 1980
Economic Conditions
As 1 mentioned earlier, Alvin Toffler has described us as being in the third wave, the information revolution. In 1960, 43 per cent of Canadian workers were white-collar workers. It is estimated that by the year 2000 only 5 per cent of Canada's labour force will consist of blue-collar workers. This means a tremendous explosion in the technologies of performing office work and the increased enhancement of the role of the white-collar worker, and we have to be prepared for that revolution. We have to recognize it as being upon us, and we have to be prepared to take the steps to ensure that Canadians are at the forefront of this development of all world competition.
The total cost of office operations is estimated in Canada to run about 43 per cent of our GNP, if we can extrapolate figures from United States projections. This gives us the opportunity for many innovative programs and, for increasing capital investment available to office workers. Right now it is about $2,000 per worker, compared to $35,000 for factory workers and $70,000 for farmers. This is an area in which we must be prepared to make those investments. I hope it comes from the private sector. But we, as a government, which is filled with paper burden, with the white paper and white-collar workers, can take a lead, and it is one area we are examining. 1 believe it is through this type of co-operative effort in recognizing the importance of the office worker that we will be able to put ourselves in the forefront.
Much of the discussion in this 15-hour debate has involved the grievances of the west. I have had the opportunity as a member of Parliament to benefit from my travels to the west, to work with members from the west, members opposite, people from the west, industry, in fact, members from all political parties. 1 have benefited particularly from an extensive memorandum I have received from the hon. member for Crowfoot (Mr. Malone). Just as it would have been impossible for members in this House from all parties to understand what was happening in the Quebec referendum, and for us to understand the intensity of emotion in the present issues, without having an appreciation of the historical background which applied to the life of Quebeckers and what they had gone through during the centuries since coming to Canada, I think it is impossible for us in this House to understand the intensity of feeling in the west without having some appreciation for their historical grievances which go back many, many years. We are aware of these.
My parents came from the prairies. They lost their farm during the depression. We know about mortgage foreclosures, freight rates, and the legitimate concern of the west for industrialization. We should have new ways to encourage tourism within Canada so that Canadians do not go south in the winter. We have the most beautiful country in the world. It is one we should be exploiting as a great centre of tourism twelve months of the year.
We recognize the whole area of resource ownership as important. We have made concessions in our constitutional package and we recognized it in the budget. We need financial institutions which are responsive to western Canadian needs. Here again 1 would like to compliment the private sector on
making the financial institutions, many of our biggest banks, more responsive to western needs by moving their offices out there. But let us face it, there is a feeling among some westerners that the east, and perhaps even Ottawa, does not understand their needs, their history, and their aspirations. 1 believe that all of us working in a rational, concerned manner can do a great deal to create national understanding and national unity by talking on common ground about these issues rather than for whatever short political gain there may be.
We know how easy it is to criticize. But it is understanding and constructive alternatives in terms of energy policy that we want to hear about. We do not want to sit here and listen to rhetoric. We know it is emotional and heartfelt and we know it may be founded, but what we want to hear are constructive alternatives in policy direction. Until those are forthcoming, I must say that our government is taking a very responsible approach with the national energy package in an attempt to meet the needs of Canadians from coast to coast.


The Acting Speaker (Mr. Ethier):: Order, please. 1 regret to interrupt the hon. member but I must advise him that his allotted time has expired.


Rodney Edward Murphy: Mr. Speaker, 1 phoned my wife last night and told her 1 would be late for dinner, but 1 did not expect to be this late.
First, I want to congratulate those members who stayed up to take part in the debate over night. We are in the fifteenth hour of the debate. It is an important issue. 1 want to thank all members who have taken part and who have listened to each other. They deserve the congratulations of all members of the House, in that same spirit, I would like to congratulate our financial critic who also stayed right through the debate. He never left this building since the debate started at eight o'clock last night. Something that is a bit of a contradiction is when you are speaking officially on Thursday, the eighteenth, to be able to quote from The Citizen of Friday, the nineteenth. One headline reads "Opposition lashes MacEachen". We did lash the finance minister all night, and for very good reason.
It is regrettable that more members of the cabinet did not listen to what members on both sides of this House were saying. We are facing very difficult economic times. We did not stay up all night just to have a free ride and enjoy ourselves in this House of Commons. We recognize that we have a very serious economic and social climate in this country. We realize that the government has the ability to do something to improve that climate. What is that climate?
We all know that yesterday the Bank of Canada rate increased to 17.36 per cent and the prime rate to 18.25 per cent. Most Canadians, even with good credit ratings, will be paying in excess of 20 per cent for their loans. The cost of living on a year over year basis has gone up over 11.2 per cent. We know that bankruptcies in this nation are running at 16 per cent, and in some provinces like Manitoba the percentage is even higher.
December 19, 1980

There are over one million people in Canada who are unemployed. Lay-offs are occurring at the rate of 1,000 a day. We have a Prime Minister (Mr. Trudeau), however, who tells pensioners to change their priorities if they wish to eat properly. One of my responsibilities in this House has to do with the Atlantic provinces. 1 want to state what happened in Atlantic Canada last year and what will happen in the next year.
In Newfoundland, costs November over November for all items were 13.1 per cent higher, and food was 14.8 per cent higher. In New Brunswick, all items were 12.2 per cent higher, and food 15.6 per cent higher. In Nova Scotia, all items were 12.3 per cent higher, and food in the province of the Minister of Finance (Mr. MacEachen) was 16.3 per cent higher. In Prince Edward Island all items were 11.8 per cent higher, and food 12.3 per cent higher.
Unemployment projections for next year in those provinces are as follows: Newfoundland, 17.4 per cent; Nova Scotia, 11.6 per cent; New Brunswick, 12.8 per cent, and Prince Edward Island 10.7 per cent. How can we expect those provinces to rebuild their economies with that much unemployment and with those increases in the cost of food?
When you destroy the ability of the people of that region to do more than pay for their basic foodstuffs, you also destroy that region's economic capacity to build on its service industries. People do not have the funds to buy other items which could be produced in those provinces. You literally destroy their opportunities to improve their economic performance in that area of Canada.
I could go on and talk about the extra costs of living in the north, high unemployment among native people, housing problems for native people and the youth who suffer so much under the present economic circumstances of Canada. However, others have spoken about that. I could go on all day and give statistics about how bad the economic situation is in the country. However, after dealing with one or two more statistics, I want to talk about what is happening to people.
I would like to begin by referring to Hansard for October 25, 1979, where the Minister of Employment and Immigration (Mr. Axworthy) is quoted as saying that with an 11.5 per cent mortgage, "Canadians are being crucified". He went on to say that with a 14.5 per cent mortgage, "they are being drawn and quartered". We now have mortgage rates ranging between 16 and 20 per cent. That explains where the Minister of Employment and Immigration is getting his eunuchs from. He is creating with his own economic policy, and the government of which he is a part, that situation in Canada.
People throughout this country cannot afford to buy homes. Some young people with two incomes cannot qualify for mortgages in this country. That not only affects people's visions about what their life will be like, but also affects the construction industry, the lumber industry, and results in many more lay-offs in Canada.
I wish to refer to other quotes of the Minister of Employment and Immigration. I refer to his "Special Parliamentary Report". On the front page it states "Promises Fulfilled".
Economic Conditions
Whatever happened to the promise of the Minister of Industry, Trade and Commerce (Mr. Gray) to resign if interest rates went up? Does he not have any credibility, sense of honesty, or integrity? He made a specific promise, not only to members of this House, but to all Canadians. He made that promise as a spokesman for the Liberal party. It is a broken promise. When Liberal ministers put out propaganda talking about promises fulfilled, they should make sure their promises are fulfilled. Therefore, the minister should resign.
It is interesting how the government has propaganda inside the handout of the employment minister which talks about our cheap prices for food. It states "Canadians have the least expensive food". There is a beautiful little chart which shows that Canadians pay $55.58 for a basket of 21 items. That is in U.S. dollars, which means it is much higher in Canadian funds. As proof of how cheap it is to buy goods in Canada, a number of countries are listed. The last country listed is Japan where that same basket of 21 items costs $135.10. As my colleague said, it costs more for those 21 items in Japan because the Japanese do not eat the same foods.
If those are statistics and that is the information ministers of the Crown send to Canadians to prove that the Canadian economic situation is great, no wonder we in this House are very skeptical. We cannot believe a minister who passes out that kind of information to his constituents.
The Minister of Finance says there is no problem, there is no crisis in Canada. We do not want to delay the debate with statistics about a crisis. We have already proved in the debate which took place for the last 15 hours that there is a crisis in Canada. Look at the real crisis, the crisis among people. I wish to quote from a work by the National Council on Welfare. I quote:
Anything that widens the gap between income and need-the loss of a breadwinner's wages because of unemployment or illness, escalating rent, sudden rises in fuel and grocery costs, any unexpected and unavoidable expense-can plunge a poor family into crisis.
That is what we are talking about in this debate, increasing costs of fuel and food, unemployment, escalating rents plunging families into a crisis. This is not just a crisis, an emotional crisis of being laid off and not being the breadwinner, this is a crisis a whole family feels. This is a crisis of social costs resulting from bad economic management by the government.
Let us consider the unemployment statistics. Unemployment is a statistic, but unemployment is also a human fact; something which is felt by every person who is laid off, each person who cannot get his or her first job or his or her second job. That same report refers to a recent report of 100 families with violent situations. It reports that 80 per cent of wifebeaters are unemployed Canadians. That report states that 80 per cent of wifebeaters-I cannot say spousebeaters, wifebeaters-are people who are unemployed. That is a social problem resulting from the economic climate we have in this country. The sooner the government realizes that, and the sooner the government understands that we are not talking about statistics but about people then, hopefully, it will act.

December 19, 1980
Economic Conditions
Looking at the same study, frustrations are often taken out on children, those who are defenceless. This again is the result of an economic climate, a result of economic situations affecting people.
I could quote all sorts of statistics about costs of mortgages and the rising costs of food, but I am more concerned about the increasing humility of people. We must see the government act. We need to see members of the opposition to the government come into the House and listen to these debates. Because members on the other side do not come, they do not care. As a result they do not understand. It is nice to believe you must listen to cabinet colleagues and vote with them, but government members also have another responsibility. That responsibility is to convince the cabinet, to convince the Minister of Industry, Trade and Commerce, to convince the Minister of Employment and Immigration, to convince the Deputy Prime Minister and Minister of Finance, and to convince the Prime Minister that we must do something for Canadians, that we cannot just play follow-the-leader with the American economy. If those government members are not in this House they are not listening, and they are not capable of acting with their cabinet ministers.
Our leader and our finance critic have offered our proposed solution. We have offered our assistance in trying to convince the government that there are things we can do in Canada. We have talked about tax credits for low-income Canadians. This would not only be of benefit to those individuals I have talked about earlier, but also of benefit to all Canadians by getting cash flowing in our economy among those Canadians who need more jobs. We have talked about a national economic strategy. We have talked about energy strategies for northerners. In this way northerners could afford to earn a living, paying for their heating costs.
We have talked about regional development strategy, and we have talked about building a merchant marine in Canada. We have talked about all those things in this economic strategy which we have emphasized for the last three or four years, yet the government says it is not responsible and it does not know what is going on. It says to the opposition that it does not know what is going on, it never gives advice, it just criticizes. I would suggest to the Minister of Finance and others in that part of the House that they show some feelings toward all Canadians. What is lacking on that side of the House is an understanding of the problem. They also lack the political role and the political conviction to do something about the problems we face.
We have a national energy policy which is not only dividing Canadians but is basically the package of glitter the Liberals have presented on each and every occasion.
We have a problem in respect of unemployment. The government has created a program. That program does not work, along with 13 or 14 other programs. They really do not come up with a solution.
We have a problem with foreign investment in this country. The government has set up a Foreign Investment Review
Agency but does not give it any teeth. It is really a laughing stock.
During the last election the government promised to strengthen the role of that board or agency. Since then it has done nothing. The government has talked about training and employment programs. All we have seen is more ad hockery for which the Liberal government is so famous.
When it comes to interest rates the Liberal party made certain promises, but what did we receive? We have received what some people would call the "Thursday abdication". What that means is that the government has said let the mortgage industry decide, and every Thursday the Bank of Canada does something with treasury notes, and every Thursday the interest rate goes up, and every Thursday somebody asks the Minister of Finance a question and he says, "That is not my responsibility, that is the responsibility of governor Bouey." This amounts to Liberal abdication of responsibility, whether it applies to interest rates, the lack of jobs, or concern for humanity. This is the result of a very sick nation.
It is time the government stopped abdicating its leadership. It is time the government took upon itself its economic, political, and social responsibilities. That is what this debate is all about. This does not involve the matter of whether one is Liberal, Conservative or New Democrat; it is a matter of the economic and social future of the country.
I started my speech by saying we are not here for a free ride, and we are not. We, as members of Parliament, have a duty and an obligation to speak our minds, to do our research, and do what we can to the benefit not only of ourselves but of those who are less fortunate and of those who follow us. So long as the ministers do not come and listen, so long as members opposite do not come and listen, we are Fighting an uphill battle.
This is a battle we are willing to fight again and again, and again and again, until we do solve some of these problems and until we do get the government to realize that there is an economic and social crisis in Canada. That is a battle worth fighting and I do not mind staying up all night, as I am sure other hon. members feel, to fight this battle. We will do it again, Mr. Speaker.


Miss Pat Carney (Vancouver Centre):: Given the fact that this is the fifteenth hour, coming up, of this debate, I want to talk about the economic impact of the budget measures and economic policies being pursued by the government. I want to talk about the effect of the economic policy of the government on average Canadians. Possibly I should explain that it is necessary to talk about economic impact at this time because clearly the Minister of Finance (Mr. MacEachen) does not understand what his policies are doing to people. Economic impact is what happens when you transpose numbers and budget projections and transpose those results to the lives of ordinary Canadians, and how this affects the day to day activities of Canadians and their hopes for the future.
December 19, 1980

601 1
I want to describe the economic impact of some of these measures on people I know. One of these people is an average Canadian who operates a grocery business. It is a small rural store. He has operated it all his life. He serves a clientele which has little access to neighbourhood grocery services but does have access to a large shopping centre. In the last few years he has been under a terrific cost squeeze. First of all, the dairy no longer delivers milk to his store. The dairy makes the grocery storekeeper go up the road to pick it up because the dairy cannot afford the expense of delivering it to him. The same is the case with the bakery. The bakery no longer will deliver bread to his small grocery store because it is trying to save on costs.
His manufacturers and suppliers demand cash for his inventory items because they will not extend credit to him in the tough times they are facing. His insurance costs have gone up, and his utility costs have gone up. He finds it difficult to meet his payroll. His inventory is low. He cannot restock at the interest rates he is charged. His mark-up is already above that of his large store competitors, and he cannot increase prices.
This storekeeper does not, of course, qualify for the prime rate at 18.25 per cent. The effect of the interest rate he is charged is more than he can bear, so what he does is simply lock his door. He just shuts down and gives up. That is the economic impact of the government's policies on some Canadians.
Another Canadian I know who is suffering under these economic policies runs a trucking operation in Alberta. He is a supplier for the oil patch. He built his business himself. He built his first rig with his own hands on a frame he found in a junk yard. He built this truck right down to the carpet on the floor. Then he went out and built another one, sinking all the dollars he earned into expanding his capacity. His wife did his books and kept the telex in her kitchen. For years she and the family did without so that he could build up his business.
In many ways this trucking operator personifies everything western alienation is about, because what he wanted to do was build a future for himself and his family. He did it under the toughest conditions one could imagine. For instance, he used to go into the high Arctic in February at the very first early light. He would go north when there were 15 minutes of light and unload a Cat from the Bristol. With the Cat he would build an airstrip and the drilling pads for oil rigs. He built containers for his suppliers. Under the impact of the energy policy which has been introduced by the government he is facing disastrous conditions because when the rigs move south the best iron moves first, and there is no need for support services. There is little industry to take up the slack, but at bank rates at 1 per cent over prime he just cannot afford to continue. That is what economic impact means to the average Canadian.
Another Canadian I know is a senior citizen in Vancouver who worked all her life for this country. She put aside her savings for her senior years. She is facing an economy in which all her costs are up. Her rent is up. Her transit costs are up,
Economic Conditions
and her car insurance has increased by a third this year. Her discretionary income is lower because her income is fixed. I find it amazing that the Minister of Finance will maintain that senior citizens and other people in this country who require some support are fully protected from his policies because, of course, every senior citizen knows that that is not true.
When this senior citizen to whom I refer looks at her shrinking food dollar, she does not have to be told that the food index is 13.7 per cent higher than last year. She knows this by the reduction in the amount of food she can afford to buy. She hears the Prime Minister (Mr. Trudeau) tell her to use common sense. Her common sense tells her that if she has no money, she cannot afford food, so she exists on an egg or some cheese or some bread pudding. The Prime Minister calls this common sense. We call it cruelty.
I know another young couple who are suffering from the impact of these policies. They want to buy a home. They are the pride of their generation. They have earned their education. They are well motivated. They have good jobs. They have a family income of about $40,000 a year. They are in good health and, in line with their Canadian tradition, they have saved their money and postponed having their family so that they can buy a home, they find themselves frustrated on two counts. The inflated house prices are beyond their reach. Their $20,000 down paymerit in Vancouver will buy them a one-bedroom condominium, if they are lucky. In order to buy a three-bedroom home in Vancouver it will cost them upwards of $200,000. They cannot conceive of a time when they can afford to buy that home. If they could, they would face mortgage interest rates which are beyond anyone's comprehension. The monthly payments involved with the current mortgage rates are far beyond their capacity to pay, and these are fully employed, educated, and motivated Canadians. They have a sense of despair because they have done everything right, and everything has turned out wrong.
I know another Canadian who lives in central Canada who, every day when he gets up and goes to work, is in fear of losing his job. He knows that his job and the whole livelihood of his family depend on his ability to earn a paycheque, and that paycheque is in doubt. Every day when he drives to work he is worried about getting the slip which says that his business is shutting down. He lives in constant fear and anxiety. That is what economic impact means to the average Canadian.
What these people share is a sense of personal, and humiliating failure, they have tried their best, and they are going nowhere, and they share a frustration so deep that it is beyond description. However, I suggest that the failure is not theirs, because this government has failed them. This government in particular has failed them by creating the economic conditions which have led to their despair.
To this the Minister of Finance says he is doing all he can. We believe him. It may be that he is doing all he can and that the present crisis is beyond his personal capacity to meet. If that is the case, he should resign. He claims that the economic wasteland we are in is directly the fault of world events and directly the fault of the U.S. in particular. We have to

December 19, 1980
Economic Conditions
examine his statement in some perspective in view of our relations with the rest of the world.
He is not the first Liberal Minister of Finance-although he may be the last for a while-but we have to view his disclaimer of responsibility in the light of his predecessors. The ones I have personally known as a journalist in this House and as a politician include Mitchell Sharp, Walter Gordon, Edgar Benson and John Turner. 1 wonder what they think, reflecting on the economic crisis they faced. 1 wonder what they think of a colleague who stands before the House of Commons as Minister of Finance and disclaims all responsibility for his actions, who blames everybody else but himself, and who tells the whole world that under his stewardship the Canadian economy is a runaway economy, out of control and beyond his grasp.
But then that is in the tradition of the Liberal party, these pseudo-nationalists. They go to Britain to amend the constitution and to Washington for their monetary and fiscal policies. They have already gone to Saudi Arabia for their oil.
We have had finance ministers who have assumed this responsibility to control and run the economy. The hon. member for St. John's West (Mr. Crosbie) and the Clark administration brought in a budget which said clearly that we could control our own destiny. Today on my desk there is a letter from a constituent dealing, as it happens, with the constitution. I want to quote from it because I think the writer is voicing the feeling of many Canadians. She says:
I can't help feeling that we really are continuing to act as "colonials" by asking the British government to make everything neat and tidy for us ... as a member of your constituency, I am asking you to act as my voice, and undoubtedly the voice of many more silent constituents ... Please argue on our behalf for this right: to deal with our own problems.
This government is denying us the right to deal with our own problems. They are eroding the entire economic base which we need in order to live constructive, economic lives as social human beings. On behalf of all Canadians and all our constituents, we demand this right to deal with our own problems and we demand that the government deal with our economic problems today, not refer them to Britain or go to Washington.
There are certain steps the finance minister can take. First, he can acknowledge his responsibility to act, as his predecessors have done. He can also acknowledge that most of the economic policies and problems we face at present are routed in the economic policies of this government in the past. He can face up to the key economic facts of life. One is that the rate of inflation reflects the massive accumulation of federal deficits incurred by the Liberals over the past 12 years. Another is that interest rates are a reflection in part of the rate of inflation and the lack of investor confidence in the economy. Another economic fact he can face is that the outflow of money which is contributing to the pressure on the Canadian dollar is a direct result of his national energy policy which is forcing Canadian firms to move south, taking Canadian jobs with them. He can face up to the fact that his policies are wrecking the country, that the ship of state is on the rocks and sinking
fast. Only when he can see the problems can he and his government look for solutions. But he denies the problems and he will not look for solutions.
At the opening of my remarks 1 referred to the sense of failure which many Canadians feel today as a result of these Liberal policies. 1 want to remind Canadians that failure is a temporary state of affairs; that given the right economic policies we can free ourselves of this economic quagmire and use our energies, not in acrimonious debate, but in rebuilding our country together and planning for the bright future which was once our hope and is still our dream. We have to start somewhere and we demand, in this all night debate, that the Liberal government and the Minister of Finance start now.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Mr. Speaker, 1 rise on a point of order. I realize that the suggestion I wish to make can be made only with unanimous consent, so I shall come to it immediately. It is realized that since we are on a motion to adjourn, there cannot be any other motion moved, but I hope the House will be unanimous in agreeing to the proposal that the House of Commons employees who have worked all night in the sitting which commenced on Thursday, December 18, 1980, and is still in progress be paid extra compensation for their service, and that the thanks of the House be extended to them.


Walter David Baker: Mr. Speaker, I think that motion meets with general acclaim on all sides of the House of Commons. I should like to join in the tribute which is intended by the motion put by the hon. member for Winnipeg North Centre (Mr. Knowles). There are pages who, dismissed earlier, nonetheless stayed on to assist. The translation people and Hansard reporters are staying on, so are the Table officers, the staff of the Sergeant-at-Arms, and, 1 might say, those of us who were here all through the night. Also, there are people here who do not appear in the chamber who have had something to do with maintaining the operation of this building, and there is the security staff and the protective service who have worked throughout the night. I assume, to the extent that it would apply to all services in the House, the proposal of the hon. member is intended to include all those people.


Stanley Howard Knowles: Yes, all House of Commons employees who worked all night.
[ Translation]


Yvon Pinard: When it comes to agreements, Mr. Speaker, I always agree.


The Acting Speaker (Mr. Ethier):: Hon. members have heard the motion put forward by the hon. member for Winnipeg North Centre (Mr. Knowles). Is it agreed?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: It is so ordered.
December 19, 1980


Donald Alex Blenkarn: Mr. Speaker, yesterday we received the news that the inflation rate, the CPI in November, had risen a full 1.2 per cent. Since this government took office, counting the months of April to November, the price index has risen 7.9 per cent in a period of eight months. In other words, it is clear that the inflation rate is the inflation rate set down in the fairy tale budget of the Minister of Finance accelerating. The suggestions in that budget were totally wrong, inaccurate and put forward incompetently. The inflation rate figures mean nothing except that the inflation index is going up and up, higher and higher.
Let me refer for a moment to a speech made last spring by the Minister of State for Finance (Mr. Bussieres), who I see here in the House. In that speech he said essentially that interest rates are a symptom of inflation. The only way we are likely to achieve lower interest rates on a sustained basis, he said, is by achieving a substantially lower rate of inflation. The clear indication of where we are going with the inflation rate was given to us yesterday when the Bank of Canada rate went to 17.36 per cent, the highest ever in the history of this country, dramatically higher than at any time in the past, unbelievably high. When we wind up with the news that the chartered banks have established a prime rate of 18.25 per cent and an interest rate which, 1 might point out to members of the House, was deemed not long ago to be a usury rate-


An hon. Member:: An A1 Capone rate.


Donald Alex Blenkarn: My friend here says "an A1 Capone rate". That is the prime rate, the rate at which the most creditworthy companies are entitled to borrow money. 1 do not have many of those in my riding. Indeed, very few of my constituents ever thought of getting the prime rate. My law firm does not have a client who gets the prime rate. The rate is prime plus 1 per cent, prime plus 2 per cent, indeed, prime plus 4 per cent. It means that the businesses and the ordinary people of this country are now required to pay 20 per cent for their money. If they can stay in business, that interest will be passed on in ever-higher prices. The government has us on a treadmill- rates go higher, prices go higher, wages must go higher and follow. We go on and on; the dollar goes down and our economy goes down. The only things which go up are unemployment and prices.
There is a problem in the country in determining the interest rate factor. I should like to discuss what has happened. Until last spring the Bank of Canada rate was an administered rate, determined by the Bank of Canada on some fuzzy basis when it decided to impose the rate. However, last spring interest rates went wild and the Bank of Canada decided that it would peg the prime rate it would charge the banking system at a quarter of 1 per cent over the 90-day treasury bill average.
Why does the rate go so high? It is because the Bank of Canada must go to the market every week now to borrow nearly $1 billion. Most of that is not fresh money; most of it is
Economic Conditions
a rollover of existing treasury bills and other debt instruments which are outstanding.
The Bank of Canada statement points out that the amount of treasury bill debt held by the Government of Canada is $20,605 billion. Treasury bills are all written for 90 or 182 days, except for some which were written a few weeks ago on a much shorter basis. The treasury bills must be rolled over; at least $1 billion a week must be rolled over. What is happening?
The borrowing requirements or the need for the government to roll over its current debt every week creates an interest climate in the country dependent largely upon the enormous amount of Government of Canada borrowing. All government debt at this point today is in excess of $80 billion net debt. That is the debt owed by the Government of Canada or the public of Canada to the Bank of Canada. The tragedy of the situation is that most of that debt is current account debt. I am glad the Minister of State for Finance (Mr. Bussieres) is here. If we were writing a balance sheet, the balance sheet for Canada incorporated would show at least $40 billion net debt within the year. Indeed it would be in excess of that because the rest of the debt, the very large majority of it, is due within less than three years.
The situation is that the government debt, the urgency and the current account nature of the debt, requires the Bank of Canada to be continually in the market borrowing, forced to pay whatever it must pay just to keep the bills of the Government of Canada paid. We need to borrow fresh money to the tune of $12 billion a year on top of the money that we must borrow to roll over the existing debt. This continual demand on the money market of the country makes it virtually impossible for the Bank of Canada to do anything except pay what it must in order to get the money.
When the Governor of the Bank of Canada appeared before the Standing Committee on Finance, Trade and Economic Affairs on October 30, he was asked what he could do. He was asked when there was a limit to the amount of money which could be borrowed. He said that he could borrow all the money he wanted, as long as he paid what he was required to pay for borrowing it. I said, "Are you not drawing up a supply of money?" He said, "As long as I can outbid all other bidders in the money market and as long as I can issue treasury bills and bonds at higher rates of interest, I can get the money".
What does that do to the rest of Canada? The government has soaked up the savings or the loose money of Canadians. The government soaks up the vast majority of the savings of Canadians. A year ago I asked some people from the Bank of Canada what they thought were the free savings of Canadians. They came in with a figure of somewhere around $12 billion. In order to finance its fiscal requirements the government needs $12 billion. We can see that the government is soaking up most of the available money. How is the government doing it? It is doing it by bidding up the rate of interest. They bid it up every week. Consequently they are paying 17.11 per cent on the average 90-day bill. That is how the Bank of Canada rate is determined. The banking system goes along with the govern-

December 19, 1980
Economic Conditions
ment, and that is why the prime is 18.25 per cent and our businesses must pay 19 per cent, 20 per cent and 21 per cent for their money. Also that is why it is very likely that we will have a depression and massive unemployment. A business that cannot pay its payroll and hire people will go broke.
The only difference between the government and private business is that they have not figured out a place where the government can file bankruptcy. In the House we are talking about the bankruptcy of ideas and leadership and a bankruptcy of policy because of the leadership of the government and the lack of policy. I have no sympathy for the government and the lack of policy. 1 have no sympathy for the Bank of Canada. It is trying to float the debts, waste and overspending of government.
In the year 1979-80 the deficit was over $11.4 billion. This year the minister says that it will be $14.2 billion, but he did not include the 1 7 per cent interest factor which he will have to pay for the latest rise in oil prices. It will be in excess of $14.2 billion unless the minister does something about it. In his fairy tale budget he says that next year it will be $13.7 billion, that the year after it will be over $12 billion, and that the year after that it will be over $12 billion. In other words, the government operates on the basis that there is a free lunch. It operates on the basis that it does not matter what is done. It creates demands and spending priorities, whatever they are, and it pays the bills. If it does not have the money, it prints it or borrows it. It goes on like that year after year without any plan to get back into balance or eventually pay the bill. It has a foggy idea that our children, grandchildren and grandchildren's children will some day, somewhere, somehow, pay it off. It will not work that way. It cannot work that way. A government, a business or a household cannot go on year after year spending more than it takes in. We cannot, as a country, spend more than we earn. That is simple economics. You cannot pay your grocery bill with a Chargex card. Yet that is what we are doing.
It may be important that we have certain things looked after by the government. It may even, in our opinion, be necessary. The basic facts which we in the House of Commons must come to grips with are that while there are huge demands on our society, while there are people in poverty, while there are businesses in trouble, while there is economic development which must take place, while there are government attitudes and programs, those programs must be tailored to meet the money which is there to pay for them. Sure, you can have a deficit one year if you have a surplus the following year; that is to say, if somewhere along the line you come to some sense of balance. But you cannot go on year after year with very little in the way of surplus. And we have had this situation from 1968 onward. We have experienced year after year massive and monstrous deficits. We are spending a dollar for every 75 cents we take in taxes.
The infrastructure alone on the debt we have accumulated is astronomical. In the year 1983-84 the minister's fairy tale
budget proposes that we will pay $16 billion in interest. But he was figuring that on the basis that interest costs would be somewhere around 10 per cent. Will they be 20 per cent by then? Will they be 25 per cent by then? Will they be 30 per cent by then? Will that interest charge be $30 billion, $40 billion or $50 billion? Where are we going? We are supposed to get a set of directions in a budget. We are supposed to get a proposal for economic stability from this government. But what do we get? We get a fairy tale. And even the fairy tale says you can spend into the indefinite future. We have five-year projections and we still wind up with deficits in the $12 billion range. There is no program to get the country back into fiscal shape.
This is the kind of thing that we as members of Parliament had better pay attention to. And the government had better pay attention to it. You cannot go on year after year, no matter how poor you think you are, spending more than you take in, spending more than you earn. The government has to face up to this fact. It has to face up to the fact that there is no free lunch. It should realize that the free lunch went out long ago and that they will have to make arrangements with the provinces to do those things which provinces should do and arrange with the municipalities that they do the things which municipalities should do. Some of the things governments do cannot be done because they cannot afford to do them. The government will have to face up to that. They must face up to the fact that there are not enough resources in the country for them to be done.
We see the CBC coming before the CRTC with the proposal that we have not just one CBC but that we establish a CBC 2. They only charge us half a billion dollars to have CBC for a year, and now they want another CBC. Another half a billion dollars. Where is it to end ? When do we say: Look, it would be very nice to have this entertainment, it would be very nice to have the party, to have the trip, but somewhere along the line government has the responsibility to say no. A government has the responsibility somewhere along the line to say: "We cannot afford it; until we pay our bills we cannot spend any more". A government has a responsibility to say to agencies of the Crown; "I am sorry, I know the problem is serious, but you cannot do that any longer because we have not got the money in the bank to pay the cheque; it will be stamped NSF".
A government has responsibility as trustees of the tax money, of the resources of Canada, to do it that way. There is no right to go on year after year raping the savings of Canadians by creating monster inflation, by printing money. We have increased the amount of money the Bank of Canada printed this year by $2 billion. The amount of debt that the Bank of Canada held of the Government of Canada a year ago was about $13.6 billion. It is now $15,613 billion. That is the kind of thing that happens. That is in a year. You cannot borrow it all on the market. The fact of the matter is you have to monetize some of it. The fact of the matter is you have to counterfeit some of it. The fact of the matter is that when governor Bouey says he is going to keep the monetary expansion between 5 per cent and 9 per cent this year, all you have
December 19, 1980

to do is take a look at the M-l figure and he is breaking 9 per cent on M-l, he is breaking 9 per cent on M-l(b) and on M-2 he is breaking 15 per cent. And at the same time the productivity in the country is down, the gross national product on a constant basis is down.
How can one go on this way without having inflation, without having interest rates go crazy? The problem is with the fiscal responsibility of the government; it is their lack of ability to control spending. It is their lack of ability to pay attention. Where is it going? Their whole attitude in the party opposite has been spend, spend, spend. Take power-power at any price, power at any expense. It does not really matter where you get it from, if you have to rob the savings of the old people, the vitality of the corporate enterprises in Canada, if you have to rob them by inflation, if you have to rob them by creating a situation in which when you save a dollar you had better spend it in a hurry because it will only be worth 90 cents, or 80 cents next year.
The Economic Council reported the other day that a person with a retirement income of $10,000 in 1979 will have a retirement income in 1985 worth only $5,800. In 1990 it will be worth $3,900 at the anticipated rate of inflation. The Economic Council of Canada is clearly wrong, too, because the inflation rate is going to be greater. As we perceive, with this kind of inflation factor imposed upon us by the inept management of this government-


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


Hon. Bill Jarvis (Perth):: Mr. Speaker, participating in this debate after some 15 hours 1 say quite frankly it is a pleasure for me. I might say at the outset that 1 thought that the quality of this debate, with few exceptions, is, from all sides, one of the best 1 have heard. My period here has been brief- some eight years-and 1 have participated in several of these all-night debates, but non where I saw-and I include my friends opposite-a more genuine concern for the people they represent than that which was expressed during the last 15 hours of this debate.
I make only one comment about that person in this House who should be the most concerned-that is, the Minister of Finance (Mr. MacEachen). He participated briefly last night and then disappeared. I was here-and if one had blinked one would have missed him-when around 9 or 9.30 this morning one of my friends in the NDP had the floor. I heard the minister heckling-and I do not know if it will be in Hansard. I would quite understand if it were not, as I know how exhausted the Hansard staff must be.
1 heard the minister say to my colleague from the NDP, "I did not ask for this debate". Those were his exact words. He is the very person who should be the principal beneficiary of this debate. He should have instituted this debate. He should be here to listen to some of the concerns of his own backbenchers, not just those of hon. members in the opposition. But for a
Economic Conditions
minister of finance after 11 or 12 hours to come into the debate and say to a colleague, who does not happen to share my political philosophy or the beliefs of my party, "1 did not ask for this debate", is not only a disservice to the member who had the floor at the time or to myself in opposition or to this own backbenchers, but a disservice to the country. Given the economic situation, the minister should not heckle from his seat.
I am very proud to be one of those who asked for this debate and to participate in the debate. The difficulty is that given the range of economic crises which we face, what does one speak on in the limited period of 20 minutes? Should it be interest rates, unemployment, inflation, housing?
1 do not claim that my riding of Perth is a unique riding, but 1 can pick any one of those topics. I could talk about interest rates and small business, but because I am one of the many members of this House who does not have any big businesses in my riding, every business in my riding is a small business. I know the very grave and serious difficulties which the small businessmen in Stratford, St. Mary's, Mitchell, Listowel and in the towns and villages, not only in my riding but all ridings, face. One could talk similarly about the ravages of inflation and, again, I do not claim that my riding is in a unique position.
However, I point out that Stratford was a CN carshop town for a good part of its history, and that there are many, many CN pensioners living in that area. The one advantage and the one attraction in working for CN in the old days was their pension plan. Many men and women opted to work for that company for lower wages than they could get elsewhere because of the attraction of the pension plan. That CN plan which was so attractive to many people decades ago has become a burden on them today.
Those on fixed incomes such as CNR pensioners and who own homes and form the backbone of Stratford are now among the most vulnerable people I represent. 1 could have talked about the energy policy because I was shocked when the Prime Minister (Mr. Trudeau) said, "Well, 1 do not see the unemployment lines growing longer in Alberta". Stratford, Ontario, has lost millions of dollars in contracts and jobs because of energy policy. There is a small company which only employs 300 people that lost several millions of dollars subsequent to the election and before the budget due to their customers' anticipation that this energy program was going to be in for a rough time. But when the budget came down they lost millions of dollars in energy contracts. That is not an unemployment line in Alberta; that is an unemployment line in Stratford, London, Kitchener and throughout central Canada, not only in Ontario but I presume also in the riding of the President of the Privy Council (Mr. Pinard), merely because of the energy policy.
I could have talked about housing. 1 had the great fortune to represent an area where home ownership was put at a very high premium. We do not have in our communities, cities and towns many rental units. Many people own their own homes. I as a lawyer profited by that philosophy. They were not wealthy

December 19, 1980
Economic Conditions
people. They were the tool and dye makers, the electricians and welders, and they would come to me as a lawyer, not to buy 1,500 square foot or 2,000 square foot homes but to buy 900 square foot to 1,100 square foot homes. They put their roots down in that society and they were not tempted to move for 50 cents an hour to places like Kitchener or Toronto. They stayed in Stratford and joined service clubs and coached hockey teams. That was the real heart of the city I represent.
1 doubt that one skilled labourer in Stratford was able to buy a home last year. That was the vibrance and vitality of the community. I would like to develop any of these topics, but I shall forgo that temptation because 1 want to talk about a minority. It is bad enough being a minority, whether it be in terms of geography, heritage or whatever, but to be a minority without a spokesman is a hopeless situation.
1 want to talk about the minority, which is my farm producers. I know that in an electoral sense, the farm vote, with every redistribution, becomes less and less significant. I begrudingly accept that. In my own riding, the farm population used to be roughly 70 per cent of the electorate. Now it is officially around 60 per cent. But if one looks at the towns which are classified as rural and removes them from the electorate, in my riding the farm producers are in the minority.
What is their nature? They are not a big corporate farm producer. They are family farmers. They are sound financially and they are both progressive and aggressive. Because they are family farmers, they are able to produce more efficiently than any corporate conglomerate that I have ever seen. They not only want to produce and have the ability to produce; they want, in spite of many obstacles, to stay in that business.
I could point to many farmers who over the past ten years would have been better off financially if they liquidated and invested in Canada bonds or guaranteed investment certificates. They could collect the interest and be far ahead. I think I see agreement from the hon. member for London-Middlesex (Mr. Bloomfield), because his farmers are very much akin to my own farmers. I think mine are a little better, but he might not agree.
The hon. member will know that the average farmer in his riding is the same as mine, and if they were to liquidate and invest their money they would make a greater income than from producing food. But to their everlasting credit, they resist.


Mr. Bloomfield:: We agree on that point.


William Herbert Jarvis: My hon. friend says that we agree on that point.
I want to speak for these farmers now because what has happened has evolved rather slowly. I attended the wardens' banquet in the county some two or three weeks ago. 1 was disquieted to hear among the several hundred farmers there several discussions about whether to sell their feed grain or hold it and feed it to their cattle or hogs. That discussion permeated that particular evening. I was very concerned about the subject, so I began to investigate. I found more farmers in my riding-and I am sure it is typical of ridings right across Canada, and we have no monopoly on this in southern
Ontario-asking: Shall we sell the grain that we would normally feed the animals to fatten and finish them for the Canadian market and forget about getting into the cattle or hog business this year? More and more farmers are doing just that.
That is why less than 48 hours ago in the question period I put to the Minister of Agriculture (Mr. Whelan)-and I am sorry that he is not here-the question that while we talk in terms of the 17 per cent prime rate, the farmers in my riding and in London-Middlesex riding were paying a minimum of 20 per cent. They do not get bank loans at the prime rate. That is why less than 48 hours ago-and I am outdated because the rate has hit almost 18.5 per cent in less than 48 hours-the farmers of Perth county, if they wanted to borrow working capital to finance the purchase of livestock, will have to pay 21 per cent, 21.5 per cent and 22 per cent.
That rate is virtually impossible for many of the farmers, no matter how well settled or affluent they may be. That is a very difficult value judgment to make, to pay that kind of rate. Therefore, the temptation is to sell off the grain that they would normally feed to livestock is much greater because they can take the proceeds from that sale and invest it at 13.5 per cent in guaranteed investment certificates. It may be 14 per cent by tomorrow morning, but I think that is the rate.
So we have, on the one hand, high feed grain prices with the temptation to sell and, on the other side of this impossible situation, enormous interest rates. A farmer must place himself and his family in a very vulnerable position when he goes into the bank and signs that demand note. That is what I put to the Minister of Agriculture. The issue was Canadian farmers being deterred from producing reasonable quantities of food at reasonable prices. Therefore I thought I asked the minister in a reasonable way what he was going to do about it.


An hon. Member:: Where is he when we need him?


Steve Eugene Paproski: He doesn't care.


William Herbert Jarvis: I admit that I got very angry in question period that day. 1 do not usually lose my temper but what bothered me is that the minister does not even know there is a problem. This minister has been very weak in terms of farm financing. Over eight years 1 have found that year after year. We had the capital gains tax debate, the transfer from father to son debate. The minister was really out of his depth on those. But surely even he understands an interest rate of 21 per cent or 22 per cent. He told me the Farm Credit Corporation loans money at 12.75 per cent. He went on to say that the Farm Credit Corporation may run out of money. In some parts of the country they were running out of Farm Credit Corporation funds.
Let us look at the answer. Here is the answer to the Farm Credit Corporation: The well is dry. There is no money in the Farm Credit Corporation. Any farmer in any part of this country can phone his local FCC office right now and find that
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out. There is no more money until April. The hon. member opposite can phone his Farm Credit Corporation and ask. 1 phoned, and there is no money until April 1, and that is it.
Farm Credit Corporation arrears are $53 million. 1 defy the hon. member to criticize me on that point. Do you know why farmers are not paying off their farm credit mortgage loans, Mr. Speaker? They are paying off their bank loans instead. They have demand loans at the bank with interest even over 20 per cent. The farmer says that he does not mind going into arrears with the Farm Credit Corporation but that he would rather get rid of his demand note. The minister has the gall to stand up in the House and say the answer is the Farm Credit Corporation. That is absurd. He went on to say that farm organizations should be helping these producers. I never heard of short-term working capital being supplied by marketing boards. I do not know what marketing board that is. I know a little bit about marketing boards because I have good members of marketing boards in my riding.
If the Minister of Agriculture is using high interest rates to railroad cattle producers into going into a marketing board, he has to be out of his mind. The essence of a marketing board is that producers want it and producers manage it. That has always been the hallmark of a farm marketing board. I have never heard a minister of agriculture say he was going to permit high interest rates which would destroy the farmers unless they formed a marketing board. 1 say that is the worst possible thing, and as my hon. friend has pointed out, that is blackmail.
I repeated my question to the minister. I was annoyed and I did not put it very politely, but I thought I would give him an opportunity to indicate that there is something on the horizon.
1 did not expect a detailed program of relief. I expected him to say that they were considering it in the same envelope as assistance to small business or considering changing Farm Credit Corporation policy to provide working capital instead of long-term capital or we were using farm improvement loans, or something. I did not want the t's crossed and the i's dotted. I just wanted him to indicate that that government and that cabinet in which apparently he has no influence were considering something. There was absolutely nothing.
To the second question he pointed out that they were giving interest-free loans for the storage of crops such as soya beans. He went on to say that turkey producers were making money selling utility turkeys at 79 cents a pound. If they are, that is great. I have turkey producers in my riding, and I think that is great. But do you think you are going to stop consumers consuming beef and pork and instead have them consume soya beans and turkeys? We could convert every farm in Perth county to a turkey farm and we could still not supply 1 per cent of the market. So the producer says to Canadian consumers, who may be faced with enormous prices for imported offshore beef, which we cannot supply, to convert to turkeys and soya beans. What kind of nonsense is that? It does not make any sense at all to suggest that Canadian consumers are going to switch from consuming beef and pork to soya beans
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and turkeys. We cannot produce them. We would all starve to death, if that is the only policy of the Minister of Agriculture.
I am getting a little excited again, and 1 don't mean to. I am sorry, Mr. Speaker. All I want from this government and from the Minister of Agriculture is an answer, because the Minister of Finance is like Turner. 1 remember Turner in the capital gains debate. 1 finally said that he could not tell a cow from a cabbage, and he could not. Eventually enough members on this side got up and we finally convinced him to permit that father to son transfer. The Minister of Agriculture did not know anything about it. But for heaven's sake, is there someone on that side who acknowledges that if you take away the vital link in the food chain, the cattlemen and the hog producer, it will be disastrous? The farmers will not be paying for it, it will be the consumers, because the farmers will not produce, despite this dedication to food production which has been demonstrated for decades in Canada. But when the minister has two attacks confronting him, high feed grain prices on the one hand and high interest costs on the other, he can only resist so much pressure. Surely there must be someone, if not among ministers, perhaps members from London-Middlesex or elsewhere, who have good rural constituencies and could tell this government that by putting farmers in a position not to produce, the government will be making the whole situation much, much worse. Unless we have that supply side met, we will have higher prices for imported food bought at a dollar worth 81 cents.
If the dollar goes down another couple of cents, things will just get worse and worse. We talk about those on fixed incomes and the working poor. They are the people who will be the worst hit by this. We have in place a government which has no sensitivity at all to a fact of life. Their lack of policies are driving out the key factor in the food chain cycle and that is the food producer.


Jesse Philip Flis: Mr. Speaker, I was not going to take part in this debate. I sat here until the wee hours of the morning, but after hearing from hon. members in the New Democratic Party and the Progressive Conservative Party, 1 felt that the Minister of Finance (Mr. MacEachen) and the Minister of Energy, Mines and Resources (Mr. Lalonde) gave excellent responses. That is why 1 felt I could not add anything more to the clear statement of government policy. It was a clear statement of shortterm objectives and a clear statement of long-term objectives.
1 was listening very carefully for constructive suggestions. It is very easy to criticize, but 1 was listening for constructive suggestions. I can honestly say that I did not hear one constructive suggestion from the other side-


John Horton McDermid: You were not here all night, that is why.


An hon. Member:: Back to sleep again.


Jesse Philip Flis: -and I could not sit still any longer.


An hon. Member:: Why did you go home at eleven o'clock?

December 19, 1980
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Jesse Philip Flis: I suggest that some of these members should go and live in other parts of the world. Let them go to live in the Soviet Union for a year. Let them go and live in Poland for a year. Let them know what it is like to be hungry. Let them know what it is like not to have any freedom. Let them know what it is like that there is no freedom to plan an economy, such as we did. Let them go and experience that. Then they will come back to Canada and kiss the ground they stand on. They have no appreciation or patriotism for this great land. What do members opposite do? They discriminate.
I was here last night and 1 was hurt as a member of this institution when the hon. member for Annapolis Valley-Hants had the gall to discriminate against my heritage. That is stooping a little too low. Those were the kinds of suggestions they were giving this government.
We heard from the Leader of the Opposition (Mr. Clark). What were his constructive suggestions? Hate tossed against the Minister of Finance (Mr. MacEachen); that was his suggestion. We heard hate, prejudice and racial prejudice. I am even thinking of taking the comments made by the hon. member for Annapolis Valley-Hants to the Human Rights Commission, because there was outright prejudice and discrimination in this House.


Jesse Philip Flis: Then the hon. member for Perth (Mr. Jarvis) had the gall to stand up this morning and say he was speaking for minority rights. 1 suggest that Canadians with Portuguese. Italian, or Greek backgrounds are also minorities in this country. 1 ask hon. members, why do you discriminate against them? I am glad the hon. member for Perth had the courtesy to remember the farmers in this whole economic debate. 1 am glad at least one member opposite had the courtesy and the knowledge to address that situation in our economic package.
The previous Liberal government took initiatives to establish Canagrex under the jurisdiction of the Minister of Agriculture. I ask the member for Perth why, when his government was in power, they disregarded this recommendation totally. If they really have the interests of the farmers at heart, why did they ignore support for an export agricultural company in this country? Bleeding hearts, but no action.
This decision to disregard the Canadian Agricultural Export Corporation by the Conservatives was a gross injustice to our Canadian farmers, especially since Canagrex is designed and will help the agricultural community to export their products and plan on a long-term basis. It would allow them to secure long-term export markets on a contractual basis.
This is a vital necessity to the farmer because, with longterm contracts of up to five years or more, the farmer will at long last achieve some stability in his business which will help him to plan effectively his growth and expansion. Otherwise, without this added stability, how is the farmer to plan his production and purchase the production machinery that is needed?
Can you imagine the risks involved in running a farm? I am a farmer at heart. I was a wheat farmer in Saskatchewan where we had a family farm. I know the problems facing farmers. I worked in Ontario on tobacco farms and know the problems facing Ontario farmers. I think I can give a few lessons to the hon. member for Perth on farming.
Can you just imagine what it is like when a snowstorm could develop in a matter of hours and not only wipe out a crop, but an entire lifetime of building? I know what it is like to borrow money for new production machinery and not know if I would be able to sell my crops on a consistent basis over a number of years to pay back the loan.
Canagrex with its ability to secure long-term contracts will help eliminate many of the high-risk factors in the agricultural industry, thus enabling the primary producers to recover their costs plus a reasonable margin of profit.
The Canagrex concept that was envisioned and developed since 1974 has received much support. In fact, the hon. member for Lambton-Middlesex (Mr. Ferguson) was one of the early proponents of this concept.
Canagrex has not only been called for by the Canadian Federation of Agriculture and the National Farmers Union, but it has also been recognized and supported as a key vehicle by the ten premiers to increase Canada's total food production and expand Canada's export trade. As chairman of the special parliamentary committee on the proposed national trading corporation, I cannot stress this point enough.
If the proceedings of this House had not been interrupted as they were yesterday and today, I would have had the honour of tabling the second report of the special committee on a national trading corporation. Maybe 1 will have that honour later on this afternoon.
Canadian farmers can presently produce enough food to feed about 55 million people, twice our present population. Canada's agricultural sector has become one of the most effective and productive in the world. Canadians are now exporting well over 70 per cent of their grain production. It is no wonder then that in Canada one job in every four depends on the agricultural food sector. Members opposite seem to think that the only sector in Canada is the oil sector. Well, there are other important sectors of our economy.
Further, the total agricultural exports approached $8 billion in 1979, agricultural exports strengthened the Canadian economy and supported the value of the Canadian dollar. Canada's international food trade performance has not significantly changed since 1970, but there is room for increased exports because of the lower value of the Canadian dollar and recently negotiated trade concessions. Perhaps the greatest boost to exports has been the lower value of the Canadian dollar which makes not only our food attractively priced but all our goods and services.
When the special committee on a national trading corporation was holding hearings across Canada, one of the witnesses told us that we should not be too concerned when the dollar drops because there is always a positive side effect. It helps
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Canada increase its exports. What does it mean if Canada increases its exports? It means a better balance of payments, better jobs and a more stable dollar.
Let me get back to agriculture. The demand for Canadian agricultural products in increasing as the current world population of about 4.2 billion swells to over 6 billion in the year 2000. This situation is further complicated by the fact that international food and agricultural experts predict a worldwide food shortage for the coming year with impoverished millions starving and prices soaring in the richer countries.
People must eat, and to many inhabitants of the Third World nations the search for their basic food requirement has become the major preoccupation since they are not able to produce enough food by themselves and we more fortunate nations will not give it to them. As Canadians, we have a moral obligation to our fellow persons to provide them with food and Canagrex will provide our farmers with the stability and incentives to meet this world need. To turn our backs on the quarter of mankind which exists on the teetering brink of death is the ultimate treason to humanity.
Canagrex will demonstrate Canada's leadership role asked for by the provinces in world agriculture by helping to develop the largely untapped agricultural potential which exists in all provinces and market more raw and processed food and agricultural products.
Furthermore, Canagrex will assist Canadian exporters to overcome the disadvantages often faced when competing with advanced trading nations such as the United States, France and West Germany. Let us face it, the Americans are in a period of economic difficulties and their trade representatives are becoming more aggressive than our representatives in the foreign markets. As many members of this House are probably aware, countries such as those in the Middle East, Mexico and Venezuela offer considerable market potential for increased volumes of Canadian agricultural products and wish to deal only on a government-to-government basis or through the use of state agencies. Canagrex will meet this need. At long last Canadians will be going abroad and selling as Canadians rather than as provinces. Canagrex will be highly visible. It will be a one-stop shopping operation dealing with all agricultural products other than those under the Canadian Dairy Commission and the Canadian Wheat Board.
Also, 1 will add that perhaps Canada should be exploring methods of barter trade with many of the oil-rich nations. We could exchange food for oil, thus benefiting both nations involved, nations requiring and needing each other's products.
Canagrex meets the requests made by farm organizations and overcomes some of the present shortcomings, particularly those related to export credit which are identified by the Hatch report or the export promotion review committee. In addition, Canagrex will, through its consulting and representative services, help to overcome the restraints on export development which arise from the small size and experience of many individual agricultural producers or firms who compete but
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who are currently ill equipped to meet the risks involved in developing new world export markets.
1 draw to the attention of this House the report of the special committee on North-South relations which was tabled in this House on Wednesday, December 17, 1980. I compliment the committee for devoting an entire section to trade and export opportunities, and I would like to quote a few sentences from that report as follows:
With exports representing one-quarter of the gross national product . . . Canada's well-being depends upon its ability to export. For this reason, any measures to restrict world trade would have severe repercussions in Canada.
Conversely any measures designed to promote world trade will bring great benefits to Canada. Canada can produce more food than we can consume, and we therefore need the structures now to enable our primary producers, farmers, to expand now. Canada is one of only four countries in the world which are net exporters of food.
1 congratulate our Prime Minister (Mr. Trudeau) for his commitment to Canadian farmers. On April 15, 1980, the Speech from the Throne stated, and I quote:
Food and agriculture are going to be increasingly important to the Canadian economy in the 1980s. To further strengthen the industry, my government plans to create a Canadian agricultural export corporation to expand markets for Canadian producers.
That was the recommendation, and when the Conservatives were in power they disregarded our farmers and their plight.


Arnold John Malone: What a falsehood!


Jesse Philip Flis: Yet they have the gall today to come to their rescue. Canagrex has not been implemented. I am urging my government to speed up the implementation of such a corporation because we must remember that the agricultural sector is a very important sector of our economy.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, in emergency debates like this there is an opportunity for the government to pause, take stock, review its basic policies and listen to the opposition. The opposition is not the government. We know that and the government knows that. When the government asks for specific policies and input, we give it as much as we can but, after all, we are not in government. We are not responsible for plugging all the loopholes, making all the buttons go, crossing all the t's and dotting all the i's. We are not paranoid about it, but I would like to make a point while we are discussing who is responsible and how much input there is.
1 would like to refer briefly to something the Minister of Agriculture (Mr. Whelan) sent me a couple of weeks ago. In the Standing Committee on Agriculture we had asked to receive a publication which the department circulates within the department. Basically it is a bunch of duplicate copies of news releases garnered from the press in Canada, across North America and around the world, clipped together and sent out on a weekly basis.
The minister refused to send that to opposition members as a matter of policy because there were some copyright infringe-

December 19, 1980
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ment possibilities, as if he or his department making copies of newspapers and passing them on to us would make him liable to some sort of copyright litigation. I say with tongue in cheek that we too have our copyright worries. We do not necessarily believe in copyrights. We go along with the Coca Cola philosophy-if you have a good recipe, your users understand and use it, but how you put it together is not generally known.
1 would point out that one person in five in Canada understands NDP policy on the economy. One voter of every five votes NDP and supports our concept of the economy and the political, economic and social effects our policies will have, yet in this House we are only represented to the extent of 11 per cent or 12 per cent. Consequently, we only get to speak in about that proportion, so it is extremely important that when we do get up to speak we are as effective as we can be because we are speaking for considerably more people proportionately than our representation here in the House would indicate.
The problem the government faces now-not just this government but also the previous one-on the issue of interest rates, inflation and the economy in general is a problem relating to its basic precepts and its whole concept of the economy. Both parties base their political and economic philosophy on the idea of a free market economy existing here. I think that is a fallacious basis on which to form an economic and political policy because the free market economy has never been an active or a visible force in Canada.
It may have had some validity across the line in the United States, but when we go back in the history of this country, we see that the free market economy never really existed in any sector. In the beginning, Europeans who first came here to start exploiting the fisheries divided up the shorelines in particular places where their nationals would dry fish and repair boats and nets. It was not that anybody could land wherever he wanted. The rules were strictly drawn and fairly strictly adhered to.
When we moved into the fur trading business, we did so basically with a government-backed monopoly, if we count the Queen or King of England as government. A charter was granted to the Hudson's Bay Company. Trade was conducted as a monopoly. It was developed under a monopoly with close communications between government and business. The CPR was developed the same way, not by the free market building the railway, but by government interference and by working together with corporations.
I think the place where the Canadian political economy had its first basic turnaround was not with CPR, because that was the continuation of the Hudson's Bay Company approach where the government granted certain rights and privileges to a few shareholders who became very rich as a result. From my understanding of economic history in this country, the turning point was probably the Canadian Wheat Board. There we had government interfering in the economy on behalf of the basic producers. This is the first time I have been able to find where government interfered on behalf of the basic producer, the
little guy. It did not happen overnight and it did not happen without a lot of political agitation on the part of the farmers, on the part of the little guys. But finally it happened and it brought a fundamental change to the way in which government interference takes place because in this case it used government power to market grain so as to maximize the return to the producer. The producer received the maximum price at the market, handled it at the lowest possible cost and returned all the surplus to the producer. That is a fundamental change. That surplus did not stop in the hands of a few marketing organizations or a few merchants, it went back to the producers. This is the kind of interference in the market that we would like to see continue. These people were the basis of the CCF, now the NDP. This philosophy and this concept is one which we would like to see applied in this country. We make no apologies for that kind of interference in the market. American as well as European observers tell us that such government interference has the potential of being just as efficient as any strictly private enterprise of operation. In fact, as long ago as the turn of the last century, Thorstein Veblen, an American observer of the social and economic scene, pointed out that from his studies there appeared to be no real advantage or real efficiency in very large corporations. He showed conclusively that their efficiency came not from their ability to do things better or cheaper but from their ability to manipulate the market. Bigness is not necessarily better, but bigness is certainly important when you want to bulldoze your buyers and bulldoze the competition.
We are saying that by adopting that kind of a philosophy, Canada can have a made-in-Canada economy which can work to the benefit of ordinary Canadians; we can set up an industrial strategy and an industrial economic policy which can work for Canadians. We say we can free ourselves from the American influence, whether it is the influence of the branch plant economy or influence in the financial field. We have the Bank of Canada, yet it seems to be taking its cues from the Americans. We note today a recent telex which says the following:
The U.S. prime lending rate rose to another record today as Citibank raised its charges to its best corporate customers to 21.5 per cent. The increase, which was expected to be matched by other major U.S. banks, came just one day after Donald Regan, president-elect Ronald Reagan's choice for treasury secretary, said he thought the key rate would increase to at least 22 or 22.5 per cent in the weeks ahead. The prime rate had been at 21 per cent, a rate it hit on Tuesday. Before this week, the rate had never been above 20 per cent.
So in less than four days we see the rate going up another 1.5 per cent. Because we take our cues from the Americans, I expect the rate increase we saw yesterday will be rapidly followed next Thursday.
We have heard in the course of this debate much discussion from both sides of the House about extremism and how the kind of policy proposals we have made are extremist. We have heard talk about whether there should be controls and whether this means more government interference which would be very bad for productivity. I might point out that productivity is not a function of whether or not government is in control. Government operations can be extremely productive. Using examples
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from Saskatchewan, we have developed the potash industry with a heavy government involvement so that it is a world leader. The potash industry in Saskatchewan can compete hands down against any other potash supplier in the world. We have seen the same thing happening in the minerals industry and the uranium industry. Government can be efficient if it so chooses. I might point out that Saskatchewan also has one of the lowest civil service-to-population rates in Canada, indicating that the provision of government services is done in a very efficient way as well when you apply productivity levels as a means of measuring that efficiency.
1 think 1 would like to spend a couple of minutes discussing another extremely productive area in this country, namely, farming. I think it is productive in part because we have had government interference through the Canadian Wheat Board and in the form of the Canadian Dairy Commission. To quote some members of the House, with that extreme level of government interference, we have not ended up with low productivity in the agricultural sector. In fact, when you look at the last ten years from 1971 to 1979, you see that productivity in agriculture increased 23.4 per cent. When you look at productivity levels in the same period in the non-agricultural area, you find that productivity increased a mere 8.2 per cent over the ten-year period. The free enterprise system has not been doing as well as sectors where there has been heavy government involvement.
So using the free market as the basis for operating an economy needs a good, hard, second look. We think the idea should be rejected and that policies should be formulated without that fallacious beginning. We should look at the situation as it exists, treat it with solutions which can be of help, and provide a made-in-Canada policy which will give us made-in-Canada interest rates and provide the kind of funding we need for this country. We have been told that if we do not raise interest rates, capital will flow out of the country. We have been raising interest rates, we have been letting them float along with the U.S. rates, yet we have seen a net outflow of capital in the last two or three years. Maybe it is time we started looking at some of the European and Japanese experiences. They did not hesitate when they were trying to rebuild their economies. We must think in terms of rebuilding our economy. They did not hesitate to enforce currency controls as part of their industrial strategy. Those currency controls were part of the system for many years until those economies developed into the strong industrial economies they became after the devastation of the Second World War. I think it can be done. We know it can be done. It is a matter of starting from the right base point and making the right decisions.


Some hon. Members:: Hear, hear!


Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, in the 16 hours of continuous debate we have heard a lot of numbers. At least my colleagues on this side know that I am a numbers man. But today I should like to talk about principles, principles which the government is sorely lacking. I cannot say that
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the government has no principles, because we know about one; that is, the principle of power. Perhaps the government has a few others as well, but if so, they have been borrowed or stolen from this side of the House, either from the Progressive Conservative government when it was in power, or from its bedfellows in the New Democratic Party, in order to help the government stay in power. I do not think there is any wonder about it, because the party opposite is led by a man who said he would wrestle inflation to the ground nearly a decade ago. What a laugh that was! The same man said that separatism was dead in Quebec at the moment separatism was reaching its peak in Quebec. That party is led by the man who said that separatism has not yet been born in the west. In saying that, he only displays his ignorance of the west, or he has not been out there. The party is led by a man who in 1979 resigned as its leader. I guess that was the only way he could hear any nice words said about him. That same man led his party to defeat a government which was good for Canada. His party defeated the Progressive Conservative government with false commitments, and I say that advisedly.
I have found a ten-month-old full-page advertisement which appeared in The Vancouver Sun. It contains some of the Liberal programs which were major commitments. The first commitment was that the Liberals would set a made-in-Canada pricing policy to secure adequate supplies of energy at reasonable prices. I question very much whether we have anything like adequate supplies of energy in Canada. Certainly, Canadians living in the constituency of the hon. member for South Shore (Mr. Crouse) will know that they do not have energy at reasonable prices. At the same time the policy created billions of dollars of expenditures on hidden subsidies. It was a false commitment.
Another commitment read as follows:
"Joe Clark has almost personally destroyed Petro-Canada, one of Canada's greatest energy assets."
History proves that to be false. Petro-Canada is not destroyed, nor was it the intention of the Right Hon. Leader of the Opposition (Mr. Clark) to destroy Petro-Canada.
Another commitment read as follows:
"Liberals will ensure that Canada's energy sector becomes more Canadian owned and controlled."
What happened in British Columbia last month? Petro-Canada spent $10 million and bought a chain of service station outlets in British Columbia. Did that make the energy business any more Canadian owned? It was owned by Canadians who lived in Vancouver; now the taxpayers own it.
Perhaps we can look forward to the government buying up various businesses. That will make them more Canadian owned. Instead of letting Dominion stores, a Canadian company, sell groceries, perhaps the government would like to take it over. Of course the list is endless.
The group opposite defeated a government which in its first seven months took major steps to do a number of things to which I should like to refer. It took major steps to develop a comprehensive energy self-sufficiency program, to reduce the

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national deficit and level off federal spending, to restore the private sector to its rightful place in the economic development of the country, to increase the accountability of Crown corporations, to reform our federal system, to ensure a strong and modern Canada and to institute programs and policy reviews in the social and cultural fields to return individuals once again to their predominant positions vis-a-vis the government. The Progressive Conservative government, short-lived as it was, had a fiscal program principally framed to deal with the most urgent economic problems facing the country. Virtually every responsible, informed and objective person who examined the budgetary proposals agreed that by and large they represented a strongly conceived and appropriate program, given the economic circumstances of the country.
As a numbers man I was particularly delighted to see that the budget of the hon. member for St. John's West (Mr. Crosbie) contained for the first time in the history of this country five-year projections on budgetary expenditures. So, the Liberals got their power back, but what did they do?
1 think Charles Templeton put it as well as I could. In questioning their actions, he said:
"How can you bring down a government and then bring back virtually all of the things that government was going to bring, except the things that matter. Namely, a cutting down on spending; namely, an increase in the taxes on driving. The very things campaigned against are the things that are done. We have an immorality in this Liberal government and in its leader, that I find just incomprehensible".
That was Charles Templeton speaking on radio in the city of Toronto some months ago.
After ten months with this old group back in power, all the initiatives of the defeated government of the right hon. member for Yellowhead are gone. This team opposite has not yet figured out the principle that excess spending by the government causes inflation. It has not figured out that inflation weakens our currency and that a weak dollar drives up prices and interest rates.
This is the government which has not figured out that a climate of encouragement to business is essential for real growth and that government competition in business is wasteful and costly. I do not want to dwell on this, but we can just look for a moment at what the government has been doing. For instance, the CBC spends $500 million of taxpayers' money for a service which dozens of other companies are able to provide at a profit after paying many millions of income tax dollars to the government. Now it wants to start another CBC, CBC-2 which they say will only cost $25 million. We know where estimates of minor expenditures such as those end up.
Look at the CNR. At one time perhaps we needed a company like that to bring the bankrupt railways in Canada together, but that was 50 or more years ago. Now they are competing in the private sector with various other companies. Why does the CNR need to own hotels? There are lots of good hotels owned by various Canadians and other people providing good hotel service in Canada. Why does the CNR have 29 subsidiaries in the trucking business? I think that was the last
count. There are many privately-owned trucking operations in Canada.
Look at what the government has done with the Export Development Corporation. Its biggest claim to fame seems to be that it finances pulp mills in Poland and the United States of America so that they can compete with Canadian pulp producers.
Look at Air Canada. It is a Crown corporation which competes with another Crown department that may be a Crown corporation soon, the Post Office. Air Canada has now developed services such as Airvelope and Couriair to provide a service which used to be available through the Post Office.
Speaking of the Post Office, this group over there thinks that by incorporating the Post Office they will eliminate or erase its deficit. Well, Mr. Speaker, this is the same group which has spent over a billion dollars of taxpayers' money on Petro-Canada, trying to say they were going to increase the supply of oil in Canada. Mr. Speaker, the private sector never had any trouble finding oil. For a long time it looked as though Petro-Canada would never find any oil. They have found some now and it looks as if they are on the track of producing some oil. But do we need to spend that billion dollars of taxpayers' money to find oil which the private sector was going to find anyway? I think not. Of course, they decided that the private sector needs a little help in other places so they will prop up Chrysler Corporation, and maybe Massey-Ferguson. In my area there are a number of businessmen who wonder when they will receive a little propping-up from the government. With the interest rate policy which the government has been following recently, thousands upon thousands of small Canadian businesses will be going bankrupt. Will they get propped up by the government? The government say it has to save jobs in the big companies. Well, we have been telling them time and time again that the small business sector provides the lion's share of jobs in Canada. Yet I am afraid there is no aid for small business.
Interest rates are high. That is why we are here. That was the argument used in putting the motion which we are debating. Of course, interest rates are high. But this government has not yet found the principle of there being a relationship between high inflation and high interest rates. It is no secret; even the hon. member for Sarnia (Mr. Cullen) knows that high inflation equals high interest rates. The government should know that. We have told them often enough. They say they must keep interest rates high because of the flight of capital. Of course, the flight of capital will occur if interest rates are higher somewhere else. So they have to keep our interest rates up on an international level. The international investment community naturally follows interest rates and certainly those funds would flow, to other jurisdictions. That is the reason we have had trouble with our Canadian dollar in the last few days.
Mr. Speaker, do they not realize that small investors in Canada also have a problem with high interest rates, and do
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not know what to do? They cannot take their capital and go somewhere else. In most cases they must borrow to make their businesses operate. And those high interest rates are killing them.
But it is not only the businesses; thousands and thousands of Canadians have mortgages coming due on their houses since the five-year term, or whatever the original term was, expired. I do not know how we can even estimate the amount of time wasted in worrying and figuring out what to do about one's mortgage on one's home. I know it happens in countless homes. I have seen it in my own office here on the Hill. A secretary in my office, who is a member of a very hard-working Canadian family, spent untold hours and sleepless nights worrying about what to do about a mortgage which was to come due. After all, on an average home mortgage the increase in rates, which is occasioned after a five-year mortgage expires, or comes due, represents an enormous drain on the home owners' budgets. Canadians do not know whether they should be saving their money or spending their money.
I would like to refer now to a column which appeared in the Ottawa Citizen. It is an article by Dian Cohen, dated December 2, 1980. Mr. Speaker, it used to be that high interest rates stopped people from borrowing. That was one of the tools which the government used as an economic aid to stop borrowing-high interest rates. This is what Dian Cohen says in her article:
Unfortunately, even at borrowing rates in excess of 14 per cent, people are standing in line to borrow money. So the old saw about why the economy is operating so far below capacity no longer holds true. People borrow money at 14, 15. 17 per cent because they believe it still pays them to do so. Does it? Say you borrow $1,000 at 15 per cent to be repaid over two years.
At the end of that time, you will have repaid $1,158,72. Meanwhile, you anticipate an inflation rate of 11 per cent each year.
And that is what we have now. The article continues:
On that basis, the $1,000 item you wanted in the first place, might have a price tag of $1,230. (II per cent of $1,000-$110 plus II per cent of $11,010- $1,020) It pays to borrow-even at 15 percent.
This is because what they will have to pay at $1,159, including interest is below the cost that the product would have sold for at the end of two years. They do not know whether they should do that or whether they should say: Look what happens when Canadians save. This is the example that Dian Cohen gives in her article:
Say you have $1,000 invested at 13 per cent. At the end of a year, you will have earned $130. But with an inflation rate of II per cent, your real purchasing power is only $20 more than it was a year ago-in other words, your $1,000 earned $130, but inflation at 11 per cent ate up ... $110 of your earnings. Well, you're still ahead of the game, or are you?
No, you are not, if you are in the taxable region where the tax is not the extra dollars of real purchasing dollars that the taxpayer has made but the whole interest income of $130 is taxed, assuming you already have some other interest income. So, if the taxpayer is at the 40 per cent marginal rate he will have paid $52 in taxes. But he has only made a real $20 on his investment. So, to save $1,000 for a year his real out-of pocket-expense is $32. Well, there is certainly no incentive for Canadians to save then, is there? No wonder Canadians do not know what to do.
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What should they do, Mr. Speaker? If they are saving they need higher rates to overcome inflation or else they will not invest their money. So if lending institutions or businesses have to borrow money they must pay higher rates in order to attract the savings of people who might otherwise want to spend their money. The real rate of interest is not much more than 3 per cent. I am sure some members of this House can remember the 3 per cent government bonds-3 per cent perpetuals is what they were called. They were issued in 1930.
We cannot have lower interest rates until we get the expenditure of the government into line. I look at the public accounts from to time as my colleagues know. Looking at the past four years of government revenues it is evident that revenues were up over a four-year period by 25 per cent from $28 billion to $35 billion. But during the same period government expenditures went up 61 per cent from $29 billion to $47 billion. With revenues going up 25 per cent and expenditures going up 61 per cent the government must know that inflation will follow. They have people in their offices who advise them with respect to that.
So, Mr. Speaker, there is a very simple message which I wish to give to the government, that is, they must learn the principle that inflation caused by government spending causes high interest rates. It is so simple that I cannot imagine why the government does not understand it.
1 do not know how long this debate will continue, Mr. Speaker. It has gone on for some 16 hours now and it looks as if it may continue for another 20 hours, or maybe a little longer. I hope that by simple repetition this government will get my message after all these hours. The message is that it is their policies that are bringing on these interest rates, and they must not try to blame them on some foreign or unseen power.
I am confident, Mr. Speaker, that the Canadian people are receiving the message. I just hope that through repetition which has been going on for hours and hours in this debate the government will get the message too.


Hon. Allan B. McKinnon (Victoria);: Mr. Speaker, this has been an unusual and very interesting debate. I think the question we must answer is: how is it that in these many years in which most members have served this is the first time one of these debates has been sustained for such a length of time? I think the answer is that never has the House been in such a state as it is at the present time. The affairs of the country are in a shambles. There is no kinder thing to say than that, whether you are saying it with respect to economy, health and welfare, pensions, inflation, the budget, or lack thereof, or the energy program. Wherever you turn there is uncertainty. This is reflected by the members of this House. None of us know what is in the mind of the government. Very few of us have any idea what direction the government is taking.
When things started to turn badly since this government took power, the people and the MPs began to question. What upsets us is the cynicism of this bunch which got elected last

December 19, 1980
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winter. Since they have been elected, they think that nothing else matters. I can recall one remark which 1 think is the most cynical remark 1 have heard in the House and perhaps one of the most stupid. It was made by the hon. member for Don Valley East (Mr. Smith), and it typifies the Liberal approach to power. We were in the Standing Committee on Privileges and Elections questioning the propriety of cabinet ministers having a conflict of interest. 1 was attempting to point out that this cabinet minister did not have a blind trust if he knew what was in the trust. I think it was an honest mistake which the minister made, although I say that parenthetically.
The hon. member for Don Valley East argued with me about this blind trust for a while, and then he said, "Let's have a vote on it and we will see who is right." If we start to believe that the numbers which prevail in this House are always right instead of being sometimes wrong, we have reached a very sorry state. The Liberals believe that because they won the election, what they are doing is right.
Yesterday or the day before, the Minister of Finance (Mr. MacEachen) picked up his budget speech, tapped it, and said, "It is right in here that I am worried about inflation. What more do you want?" Mr. Speaker, we would like him to do something about inflation instead of thinking that because he has made the comment everybody should get in line and stop inflation. It is the Minister of Finance who is more responsible than anybody else. It was he who took on responsibility for the economic affairs of this country.
I would like to inform the House of some of the people who are seriously hurt by the inflation and the high rate of interest. I would like to describe the kind of constituency I come from. In 1971 there were 88,211 people in my constituency and in 1976 there were 88,151 people, a slight drop. Of these, among the male population, 2,265 are between 65 and 69. They are old age pensioners. In the bracket of 70 and over among the males there are 5,750 men. The female totals are for the 65 to 69 age bracket, 3,360, and for the 70 and over age bracket, 9,710. This means that in my constituency out of 88,000 people 21,000 are old age pensioners, and it comes to 24 per cent of the population.
In another grouping, the number of widows in my constituency is 9,895. If hon. members think that these people do not have problems, they simply do not know what is going on in the economy today. People buy their food, pay their rent and their fuel costs. These are three things which are absolutely necessary. People are not supposed to eat dog food. People should not have to sleep in the streets and they cannot heat their homes unless they pay their share of the fuel costs.
While I am on the subject, hon. members will recall that in the Clark budget brought down last December, fuel oil was excused from the excise tax. The government makes a great deal of the fact that during the election campaign it had raised the old age pension by $35 per month. This was as it was reported by the CBC, which always has a kind of schizophrenic attitude toward politicians. It likes to run down the Liberal government and support the NDP until we get close to election day when it strikes them that despite their best efforts, the
NDP will not be elected, in a panic they swamp the Liberals with favourable remarks in their alleged news items which help to get the Liberals back and ensure that the Tories do not get in.
We on this side have a certain ironic sense of humour that it matters little to us because the CBC will support the NDP part of the time and the Liberals the rest of the time. Of course, the Liberals get the support when the crunch comes and the NDP do the same thing themselves, so they cannot complain. However, I have always resented the CBC reporting day after day during the election campaign that the Liberal party promised to raise old age pensions by $35 a month. It was not the old age pension, it was the guaranteed income supplement.
The difference is that about 50 per cent of the old age pensioners do not draw the income supplement. So the $35 monthly raise was not a universal raise at all. It was simply for the people who were drawing the income supplement, which is subject to a means test. I know it is useless to try to correct impressions which are left by the media, but the fact is that that $35 a month raise, which seems to be the only answer the government has to what it intends to do to help the poor people out, applies to only half the old age pensioners.
Another thing I wish to say about this government's attitude toward pensions was brought up the other day by one of my colleagues, the hon. member for Bow River (Mr. Taylor), that widows of disability pensioners have an extended period over which their pensions will be phased in. Hon. members will recall that we had a vote on this during the debate on the veterans pension bill and we failed by two votes to force the government to make it unanimous that all widows of disability pensioners would draw the full pension to which they would be entitled under the bill instead of having to wait during the extended period of 6.5 years.
This amendment was brought in by the hon. member for Winnipeg North Centre (Mr. Knowles), and supported by us. We thought the government could find the money because, goodness knows, they are finding enough money to advertise their own party's position these days. This is a step which was never taken before in Canadian history, but they have no scruples about taking it now. However, that is the position. This is a group of people which should be considered. If the government is able to spend $60 million on advertising the Prime Minister's ideas on the constitution, they should be able to find the money to pay the widows their disability pensions.
The other matter is spouses' allowances. We were glad to support the spouse's allowance a few years ago and we certainly supported it with the strong objection to the part of the bill which denied the spouse's allowance the day the pensioner died. So the government was intent on cutting off the allowance as soon as the spouse became a widow. After pressure from the opposition for some two years, it finally gave in and agreed to a continuous spouse's allowance until the widow became 65. What it has forgotten is that there are other women between the ages of 60 and 65 who are in the same
December 19. 1980

kind of circumstances. This is the tragedy of the spinster age 60 to 65 who has no way at all to obtain a spouse's allowance.
This seems fatefully unfair. For example, if there were twin sisters and one marries at age 63 a man of 65 and if they could qualify for the GIS she could draw an allowance equal to the old age pension, but the twin sister who did not marry could not. It is a discrimination which I would like to see removed, particularly in these days when the difficulty of putting food on the table and heating your domicile is so apparent to everyone except the government.
1 would also like to mention for a moment the problem which this government created. It galls me how it can bring in certain legislation. I believe that in some cases they were pressured into it, but in other cases they actually have the right motive. It brought in a reform to the old age pension which would make one ill if they read the puffery with which they brought in the 1977 reforms to the old age pension. One of the proposals was a partial old age pension. It was introduced as if the government was doing something for pensioners. It was doing something for the President of the Treasury Board (Mr. Johnston) not for the pensioners. A partial old age pension means that if you come to Canada at age 55, at age 65 you get a partial old age pension. For decades, if a person came to Canada at age 55 and lived to age 65, that person could get the old age pension. The government decided to save the Treasury Board some money, and that has changed. Now a person gets only one-quarter of the old age pension if a person lives here for ten years. It does not accelerate the next year you live here because although you are drawing a pension, you are not qualifying for an eleven-year pension, you stay at the ten-year pension provision for the rest of your life. It guarantees absolute poverty for some people in my riding. I have a list of several hundred people who have been caught in this trap. One of the tragedies, 1 suppose, is that part of this problem is due to the government. It left in circulation in several foreign countries pamphlets describing the 1976 old age security system in Canada. In that literature the only requirement for a full pension was to be in Canada for ten years. At the time, I said the partial old age pension would lead to catastrophe. I can assure hon. members that it has done so.
I would like to speak about a difficult subject, and that is the reciprocity of pensions. This government seems to be unable to be honest about anything any more. I expect everyone received a letter addressed to members of the House of Commons and Senate wherein the Minister of National Health and Welfare (Miss Begin) claims that she has done a great deal to try to achieve reciprocity of pensions. She starts off by talking about what she did on October 14. In part, this letter reads:
On October 22, while in London on my fact-finding trip on pension reform, I met with the Honourable Patrick Jenkin, Secretary of State for Social Services. The first item which I brought up was the possibility of reopening of negotiations between Canada and the United Kingdom toward a social security agreement.
No conclusion was reached and the minister concluded there was no sense in keeping the door open. I have a letter
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addressed to me as an individual member of Parliament from the same minister who points out something she does not care to do in the letter to members of the House of Commons and Senate. She gives a little more history on the subject. For those members who do not understand reciprocity of pensions, basically, it allows people from another land to come to Canada and receive pensions from their home country which would be indexed. We would do the same with people going from Canada to another country. On page 1, the letter reads:
At the initiative of the British side, discussions of officials concerning a possible reciprocal social security agreement between the United Kingdom and Canada were held between 1969 and 1972.
This was under a Liberal government. On page 2 we read:
The first discussions with another country in this respect were held among officials in London in July, 1977.
What happened in the 1969 to 1972 meetings? They were at the initiative of the British side. This government would like the people of Canada to believe that Britain is at fault in this. Britain had two offers on the table between 1969 and 1972. First, that future increases in rate would be paid to beneficiaries of British pensions in Canada. Second, they required unconditional export of Canadian old-age security pensions. So the British in 1972 were willing to conclude this kind of a treaty and the Canadians who were representing us at that time were not. However, in this letter there was rather a curious remark which I noted because I have quarrelled with the minister about it. The minister said:
On two separate occasions (June 1977 and December 1978), the Prime Minister of Canada drew the attention of his British colleague to this issue.
In the minutes of the Standing Committee on Health, Welfare and Social Affairs on November 7, 1978, the same minister was explaining to me why the British were not going to be treated the same as the Italians when they had a kind of media event in Toronto when the reciprocal pension agreement was signed with Italy. At that time the minister said:
On the British one, I am investigating the possibility of reciprocity of pension but the Brits really are not helping at all. I hope this will be put on the agenda of our two Prime Ministers if they meet very soon, which is what we heard in the press yesterday. As soon as I know whether it is to be on the agenda or not I will inform the House and that will, of course, change completely and speed up, 1 hope, my course of action. That is my priority.
The moment required the priority, but the priority immediately disappeared as soon as the committee ended, I suppose, because we never heard any more about the Prime Minister meeting with the Prime Minister of Britain and discussing this matter at all. Now the minister, without any effort, tells me the door is shut forever and to forget about it. But you cannot forget about it because the people who need it are still there.
1 would like to say a word about this difficulty we have with the widow's pension, spouse's allowance, and so on. If we are going to continue the inflationary policies of this government, which we seem likely to do, we have to begin considering that that inflationary cycle will go on and on. We have to make arrangements so that our senior citizens can live in some type of style and dignity. I suggest we look at what other countries are doing.

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In Austria, the normal retirement age is 65 for men and women. In Belgium, the normal age of retirement is age 65 for men and age 60 for women. In Britain, the normal pension age for men is 65 and for women it is 60. In France the normal retirement age is 65. However, a worker may retire at age 60 with 70 per cent of his pre-retirement income. In Germany, the regular retirement age is 65 but females may retire at age 60. In Israel the normal retirement age is 65 for men and 60 for women. In Italy the normal maximum retirement age is 60 for men and 55 for women. Many of these countries struggled in the economic world. They have large costs for energy and excuses which the Minister of Finance likes to pretend that we have, only they are the ones who actually have them. But these countries are able to look after their senior citizens far better than we do here in Canada.
I wish I had more time because I would like to talk about the cynicism of the Prime Minister. We have had two important debates in this House in the last while. This is one, and the Prime Minister has not participated in it. The other debate was on the constitution. He did not participate in that either. We have a Prime Minister who likes to be there for the kudos but he does not like to slug it out here or be criticized in the House or be asked to explain his policies in depth. He is not here today. He was not here last night. He has not participated in the constitutional debate and now we understand that it is likely the government may not bring in its amendments until it is too late for us to do anything about them.
We had the example of the Polish question the other day when the Prime Minister had the gall to lecture us about unity and how important it was in the west. When the NATO nations lined up and voted, what happened? We withdrew. He wanted to stand to one side and let the other 14 agree on something. We would be different. It is no wonder the Canadian people are cynical about government and politicians. It is no wonder that we are angry.


Walter David Baker: Mr. Speaker, I rise on a point of order. It is about one o'clock and 1 understand it would be the interpretation of the Chair to rise at one o'clock for the luncheon break. I have some idea about that interpretation, which I will not enter into now. However, there have been some discussions with the Parliamentary Secretary to the President of the Privy Council (Mr. Collenette) and as well with the hon. member for Winnipeg North Centre (Mr. Knowles) about the proper utilization of the time. Because there are a large number of members who wish to speak, I ask for consent of the House and ask you, Mr. Speaker, to put the matter before the House for unanimous consent to sit during the hour from 1 p.m. and 2 p.m. In this way the debate can carry on and members can continue to speak. If you could canvass members of the House, I would be grateful.


David Michael Collenette: Mr. Speaker, we agree with the suggestion as presented by the hon. member for Nepean-Carleton (Mr. Baker) inasmuch as it would be somewhat difficult to delay an emergency debate for a lunch hour.
We would therefore agree to sit through the proposed hour to two o'clock which we understand was going to be proposed. There will be some other discussions about tabling of documents or committee reports later on, but we will not be in a position to deal with that until later.


Stanley Howard Knowles: Since it is an emergency debate, perhaps we should stay with it. If we use this hour for debate, maybe that means we will finish an hour earlier tonight than we might otherwise finish.


An hon. Member:: Or tomorrow.


Stanley Howard Knowles: Yes, or tomorrow.


Walter David Baker: Just so you will know, Mr. Speaker, we will be approaching you again at two o'clock about the matter of introduction of bills, reports from standing committees, and the idea of being able to have some answers to questions on the order paper, which I understand the government is prepared to give today. I think that would be appropriate before we leave.


David Michael Collenette: I should just emphasize we have not come to a full agreement. There is a like-mindedness between myself and the hon. member for Nepean-Carleton but I have not concluded discussions with the hon. member for Winnipeg North Centre on one of the points just raised. We will get back to you, Mr. Speaker, within the next hour.


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I would like to make some comments on two quite separate but very important issues as I see them in this very important emergency debate. One will perhaps be a continuation of some pertinent comments on the Canadian beef cattle industry made by the hon. member for Perth (Mr. Jarvis) when he made some excellent comments this morning. The other aspect I want to touch on is the implications of the new national energy policy for my own southeast corner of Alberta, my constituency of Medicine Hat, and how they will impact on some specific communities.
1 first want to move to some specific comments about my own cattle industry. Interest rates have now become a major operating cost in the total cattle industry, especially the feeding sector. The two major costs right now are the cost of feed, of barley in Alberta and western Canada, and corn in Ontario. The other one that has amounted to a very significant cost is the cost of money or interest rates. At today's high interest rates, that becomes very significant.
It is a major factor in a clearly indicated trend not to rebuild our beef cattle breeding herds. That is the bottom line of the impact of higher operating costs and the uncertainty created by interest rates. That is an upturn in our beef breeding herds which should have started two or three years ago and has not developed. This last touch of record high interest rates sort of put the coffin nails in. It will discourage it even longer. This will be unfortunate.
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The upturn in our cattle cycle should have started at least three years ago. It is that much overdue right now. It is overdue because there is no genuine incentive to go back in and stay in the beef cattle industry in Canada. That disincentive situation started when we had the four-year disaster price situation in the mid-seventies.
1 want to give some specifics on the impact of record-high interest rates. The 6 per cent jump, or increase from 12!4 per cent to today's 1814 per cent on a $430 calf, which was the average price of a calf last fall, amounts to about $26. That is the single cost attributed to interest rates with the 6 per cent increases. That only occurred over the last three to four months.
The significance of that $26 is that it is usually somewhat more than what you anticpate as a net profit after buying a 430-pound calf and feeding it out over the following year, either in a feed lot or on a grass situation.
I want to refer to a most appropriate reference developed in the special article dealing with agricultural credit for the year 1981. The reference is from the Canadian Farm Economics Journal of June, 1979, volume 14, No. 3. The total agricultural credit requirement estimated in that detailed analysis for 1981 was $7.7 billion on a low plane and, on an alternative higher plane, as high as $9.4 billion. That is just for the one year we are about to enter.
The operating portion of these estimates is $5.1 billion on the low side and $5.6 billion on the high side. Those two figures are for operating costs only. Put another way, each one per cent rise in interest rates will cost Canadian farmers in total $77.9 million on the low basis, or $94.3 million on the high basis. That is for 1981. For the operating costs, it is $50.9 million on the low side and $56.2 million on the high side.
We know what has happened in the last three months. That 6 per cent jump in interest rates would total $300 million for the agricultural sector in 1981. I emphasize that these are cost estimates for interest only prepared by a most reliable source, Canadian Farm Economics.
In a more general comment on the impact of high interest rates on the Canadian agricultural sector, especially the beef cattle sector, it is well known that high interest rates affect farmers more critically than other non-agricultural sectors, for a couple of very important reasons.
First, agriculture is a more highly levered sector in our society when it comes to financial management. Second, fresh beef and beef products cannot be stored like many other sources of food such as cereal grains. By far the greatest negative impact of high interest rates is the disincentive created for the build-up of our beef cattle breeding herds in Canada. This is a long-term disincentive based on our traditional ten-year cattle cycle, the approximate period that our cycle usually runs. As 1 pointed out, that cycle is now two to three years longer. This is most important when we consider the position of our national beef breeding herd which is two to three years behind in its build-up.
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Dean Jake Brown, the dean of agriculture of the University of Saskatchewan agricultural college, about two weeks ago made a very succinct statement about the implications of this disincentive. He pointed out to a task force symposium in Calgary that this lack of long-range incentive will prevent Canada from becoming self-sufficient in beef throughout the decade of the 1980s. In other words, we are destined to become net importers of beef throughout the next ten years. That is a tragedy in our cattle industry because we have the ability and the potential to be much more than self-sufficient.
In the short term, and what 1 have been saying up until now is the long-term situation, high interest rates may even bring about lower cattle and beef prices because there will be an understandable trend to unload cattle because of unprofitable cattle operations. We will see that happen very quickly from now on, but the more significant long-range impact of these record-high interest rates must inevitably result in higher beef prices to our Canadian consumers, and this is the situation perhaps we are not aware of now. That is inevitable because of the lack of domestic supply when we do not rebuild our breeding herd numbers. Let us not assume that we can make up our beef deficiencies by offshore imports, since Australia and New Zealand-and they are the two principal countries other than the United States which supply us with beef when we have to import-are at the low point of their beef cattle cycles just like Canada and the United States.
With respect to these remarks about our cattle industry and some of them about the Canadian agricultural sector in general, 1 have only one suggestion to make to the Minister of Finance (Mr. MacEachen) and to the government. Why not adopt the concept of the small business development bond for agriculture and in particular allow that concept to be used in the beef cattle industry? After all, I think that concept was well accepted, first of all by our party, and 1 think it is well accepted by the government. Why not give serious consideration to using that small business development bond concept? After all, the farmers are the original small businessmen of this nation, and I think they do need some special encouragement.
I want to make some comments which really are the result of the national energy policy which came out of the budget last October 28. These remarks will be quite specific and will deal with the natural gas and oil service industries in southern Alberta. They will deal particularly with the situation in Brooks, Alberta, which is in the northwest corner of my constituency. After that I will make some comments about the impact of the gas tax on my home city of Medicine Hat.
First with respect to the town of Brooks, it is about 180 miles from Medicine Hat on the way to Calgary. It is in the northwest corner of my constituency, and I say that surely it has been the fastest growing community in Canada over the last ten years. I have two letters which I want to read into the record which will indicate in a very concise way the situation and will show the impact of the national energy policy. The

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first one is a letter from the Brooks and District Chamber of Commerce. I am going to read it because it says what has to be said about this situation. It is dated November 24, 1980.
Dear Mr. Hargrave:
In the past three weeks, the Brooks and District Chamber of Commerce has been attempting to evaluate the economic impact of the federal budget and energy policies as it pertains to our community.
The town of Brooks, similar to Grande Prairie-
That is in Alberta.
-has grown in the past few years because of exploration, production, and an oil field services industry.
The town of Brooks has grown from a population of 4,000 to 9,000 in the past ten years. The oil and gas industry in this area has provided many jobs and added stability to our economy. In 1973 and 1974, even though the oil industry suffered duress, the local economy continued to thrive, because of gas exploration.
That is the major energy industry there, all relating to gas.
Approximately two hundred businesses in Brooks and area are directly related to the oil and gas industry. We are imminently concerned that the federal budget will have consequences the government may not have anticipated. Lay-offs of employees in the service industry has already begun to occur. It is very difficult to evaluate what the results will be next year when exploration slows down, but these facts come to light. Because of a lack of proper incentive for further exploration, an anticipated 30-35 percent reduction in activity has been forecast. The impact on our area will be substantial. Areas of immediate concern are: the oil and gas industry, the housing industry and young people starting new businesses.
As a chamber of commerce, we are confused by a policy which we are told was to further Canadian participation and ownership in our oil and gas industry. A second stated objective was energy self-sufficiency by the end of the decade. Neither of these two objectives seem possible because, by our observation, it is the small Canadian-owned oil and gas industries which arc being penalized the most.
Secondly, with the rate drilling rigs are leaving Alberta, how can we find the oil and gas to make us self-sufficient?
It is not the purpose, or the intent of the Brooks and District Chamber of Commerce to criticize government policy. However, we believe we have a role and must speak against the direction this federal policy is leading us. A small, and quite often new business, will have great difficulty surviving the impact of this policy. These businesses arc owned and operated by Canadians, not foreign investment. It is the suggestion of the Brooks and District Chamber of Commerce that this policy be re-evaluated as to its long-term effects on the oil and gas industry. This industry in Alberta creates jobs for Canadians, nationwide. We believe these jobs are in jeopardy.
The western Canada concept which has received so much publicity, is a result, we believe, of people's frustration with this federal government's policy. We believe in a responsible solution which will benefit Canadians in total. Mr. Pat Brown, who is providing you input for your presentation, has had the opportunity to research this matter in greater depth than we have. We believe Mr. Brown's research to represent a fair picture of what is ahead of us. We would like to express our support to you, Mr. Hargrave, in addressing this issue, which will affect the livelihood of many of your constituents.
I want to follow with another letter from Mr. Pat Brown, dated November 24, 1980.
Dear Sir:
We have attempted to give you a concise look at our energy-related operations, as pertains to drilling and service and supply, as possible. Some businesses overlap into production-related industry but we have omitted those which are 100 per cent related to production of energy and kept our views to drilling and exploration.
We have not as yet been subject to a major cutback and do not expect to sec one until after "spring breakup". There has been a general apprehension for
about 5 or 6 months about what to expect from the budget and that has caused some slowdown. There arc generally about 60 to 70 rigs in our area this time of year; we presently have about 50.
We foresee about a 40 per cent cutback in drilling and exploration in the Brooks service area beginning in the spring of 1981. If this estimate is close to fact it will directly affect about 70 per cent of the approximately 210 energy-related businesses in the area by 40 per cent reduction. The remaining 30 per cent of energy-related businesses will be affected by from 40 per cent to 20 per cent.
The population of Brooks town and area attributed to direct involvement in the drilling and exploration industry is estimated to be about 3,000 with an equal number dependent on them for their existence.
The reduction in business cash flow, available jobs, and resulting increase in cost ratio will deal a death blow to many small businesses. Many of the small businesses, run by gutsy entrepreneurs, have invested all their resources and time to get a foothold in a speculative industry which appeared to have a bright future for those of initiative. Only by betting on a stable growth industry, were many of the local businessmen (and their bankers) able to procure the equipment and technology we now have in the area. At a time when private enterprise has a chance to really prove what it can do to make the country self-sufficient in oil and gas, the last area in the country where there is still a work ethic and belief in success by incentive, we have been sold out by uncaring bureaucrats dictating government by government.
Less than 10 per cent of the companies in our service area have any affiliation with multinationals; more than 70 per cent of supplies, manufactured goods, fabricated goods and vehicles originate in cent.al Canada, Canadians are being hurt across the country, not just the west.
Thank you for allowing our humble input.
The letter is signed "Patrick A. Brown".
Mr. Speaker, is my time almost up?


Mr. Deputy Speaker:: Yes, it is.


Herbert Thomas (Bert) Hargrave: I was only going to say that he supplied a list of 25 special service industries to indicate how important the service industry is to the Brooks area, and it is symbolic of the whole of southeastern Alberta.


Mr. Gilles Marceau (Jonquiere):: Mr. Speaker, 1 listened with undivided attention and sustained interest to the comments of my colleagues on either side of the House. I listened to them until late in the night, about four in the morning, and when I returned this morning I did not feel there was that much difference in the general trend of ideas expressed since the start of this important debate last evening at eight o'clock. What struck me most, Mr. Speaker, is not so much the general ideas put forth and the comments made by my colleagues as the caustic and at times provocative tone of parliamentarians whose mission and main role are to represent their electors and who must spread harmony and fraternity, thanks to which we will be able to keep this great country from coast to coast.
Mr. Speaker, 1 admit that many of the suggestions voiced on both sides of the House were very constructive and very valuable. But the least that can be said is that the general tone of the debate did not reflect the spirit of Christmas which ought to be so obvious among parliamentarians on the eve of our recess. Of course, it must be said that whatever party we
December 19, 1980

belong to we are indeed concerned over the extremely serious difficulties we have to cope with but which do not unduly affect us as parliamentarians. We do enjoy certain advantages and we can live decently even if it is not easy. But we are specially worried because inflation and high interest rates prevent some people from enjoying the minimum required, feeding and housing themselves as they should, and because they deprive too many Canadians of the necessities of life.
Mr. Speaker, after listening to these sometimes rather violent exchanges of opinions I came to the conclusion that we will not be able to find worth-while solutions if we continue to toe the party line which, however justifiable it may be on occasion, is no longer acceptable when we have to face problems experienced by a number of our fellow citizens who do not belong to any of the parties in the House.
Mr. Speaker, my greatest annoyance stems from the accusing and provocative tone used by some hon. members against, for example, the leaders. Whether from one party or another, in my opinion they are leaders who should command respect, esteem and consideration from all members because of their extremely arduous task, particularly these days. In a way, Mr. Speaker, I find it inconceivable that attacks are made against the Right Hon. Prime Minister (Mr. Trudeau), among others, and that such accusations are delivered in personal terms. It is normal that people make judgments on the actions of the head of a country. It is normal that his policies be criticized. But what I find altogether absurd and unacceptable is an attack against a man who, to the best of his knowledge and judgment, attempts to discharge his heavy responsibilities. Most fortunately, Mr. Speaker, not all members across the floor have made such comments. But ever since I entered politics, and that was 12-odd years ago, as a member of a party my duty and foremost responsibility has been to refrain from ever personally accusing a party leader or even a colleague.
Mr. Speaker, the fact remains that on both sides of the House we are trying to find early and worthy solutions to our problem of inflation and high interest rates. But 1 suggest, Mr. Speaker, and it may come as a surprise to many, that although inflation is a serious problem and although it has reached alarming levels I still consider that our number one problem in Canada, and particularly in my region, is not necessarily inflation but rather unemployment. To my mind it is even more tragic to see that thousands of people who live in my region are looking for jobs, that they make themselves available and offer their skills but they cannot find the kind of work which will enable them to play a positive role in our society.
Of course it is unpleasant and even difficult to pay too much for certain foodstuffs or certain services. But in the final analysis, Mr. Speaker, is it not the end product of our own behaviour, is it not because at one time we were all a little bit
Economic Conditions
responsible for failing to realize the significance of appreciating our wealth and to avoid wasting it?
If the field of energy is causing us such headaches today, is it not because we have used our abundant wealth without thinking that the day might come when shortages would occur? To a certain extent, Mr. Speaker, should we not shoulder the blame for our own problems created by energy and inflation? Have we not been overly slavish to the luxury and comfort which we can no longer do without and for which we are not prepared to pay the price? Mr. Speaker, I believe it is absolutely necessary that we examine our own conscience regardless of the party we belong to. It has been said over and over again that inflation is not peculiar to Canada. Several countries feel the pinch a lot more tragically but, because those problems are worldwide, we should not avoid facing them here at home.
It would be sheer irresponsibility not to see inflation as a major problem. That being so, I still feel that no government can possibly deal with the hardships of inflation if the people themselves, if each citizen aware of his responsibilities does not make the necessary effort to stifle the meteoric rise in prices and inflation generally. It is therefore a collective and individual responsibility at the same time, and if each individual grows aware of it I think he will make the necessary efforts at home and at work to avoid often foolish expenses or that kind of comfort which in a way is at the source of our galloping inflation.
High interest rates have also been the topic of this protracted debate and 1 think that some of my friends in the opposition have described better than I could the problems confronting people looking for a house or anxious to build a home. And of course that is tragic because I think that the right of ownership is a basic right which every Canadian ought to enjoy. Through partial yet efficient measures the government has attempted to control the rates but it has failed so far. It has tried to come up with programs to help those who find it hard to cope with high interest rates, it has tried to compensate them so they will not lose their property and be able to keep what they have.
Because I entertain no illusions, Mr. Speaker, 1 would like to say simply that my role as an ordinary member of Parliament does not enable me to find ready solutions. Nor would 1 pretend to try to find immediate solutions, even if I were working in a team, but as the year is closing and on the eve of the festive season 1 urge my colleagues to restrain somewhat this vindictive spirit, to change this unduly violent approach, because when we return in January we will still be faced with the same problems, we will still have to work together on both sides in an attempt to find solutions. And I hope that during the recess-we are not going on holidays as some people seem to think-we will have an opportunity to meet our constituents and discuss these with them. I trust we will all be back with a positive attitude, an attitude which will enable both sides of

December 19, 1980
Economic Conditions
the House to come to grips with those issues and find a way out so that the underprivileged Canadians, those whom we want to help, will find remedies in the not too distant future.
Mr. Speaker, this debate has been constructive. It has been so because all parliamentarians were given the chance to voice their opinions and to use the time of the House to try to find solutions. Unfortunately I consider that the solutions advocated are not those I expected but 1 do hope that the spirit which animates us at Christmas will inspire us and that when we come back in January we will be able to work more closely together, more positively, not in the interest of one party or another but in the real interest of people who look to us for solutions and who get to the point where they want us to forget our political affiliations and really think about them and the solutions they need.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, the seriousness of the debate in which we are involved at the present time can be seen in the fact that it is for this Parliament-and I suppose for any Canadian Parliament certainly in the last 25 years-an unprecented debate which has gone on without interruption for almost 18 hours. Now we are facing a crisis. The cost of living is rising at an annual rate of 11.2 per cent, which is higher than the inflation rate of 1975 when the same Liberal government imposed wage and price controls. At that time we were told by the Prime Minister (Mr. Trudeau) that he would wrestle inflation to the ground.


An hon. Member:: They were just wage controls.


David Orlikow: My colleague says that they were just wage controls. That is true, and we predicted that would be true.
1 remind hon. members of the House that the government which imposed those wage controls was a government which won an election in 1974 by promising that it would never impose wage and price controls. That was the major pledge of the Liberal party in that election.
According to the official figures of Statistics Canada, at the present time we are faced with more than 700,000 unemployed. Every member of the House knows that there are in this country-and especially in the slow growth areas-several hundreds of thousands of people who have given up looking for work. So, they are in fact not counted among the unemployed by Statistics Canada. In western Canada there are at least some tens of thousands of native people living on reserves who are not counted because they have not been in the regular job market.
Mr. Speaker, at this time we have more than a million unemployed. Our rate of unemployment is much higher than the rate of unemployment in all the other industrialized countries of the western world, including Great Britain, where the ruinous policies of Mrs. Thatcher have brought about an unprecedented high number of unemployed in that country.
In my own province the rate of unemployment increased by more than 1 per cent in November, 1980, as compared with the rate in 1979. There were 6,000 more people unemployed in Manitoba this year than there were in the year before. That is an increase of about 20 per cent in the number of unemployed this year as compared with the year before. Some hon. members and some editorial writers across the country would have the people of Canada believe that the unemployment situation is not as serious as the numbers indicate because, supposedly, people do not want to work. Mr. Speaker, there is no truth in that kind of claim at all. A piece of evidence in support of my statement is the fact that when General Motors in Windsor announced they were to hire people, thousands of people lined up to apply for the jobs. They started to line up the night before the applications were to be taken.


John Horton McDermid: The same with McDonnell Douglas.


David Orlikow: I am glad the hon. member in the Conservative party agrees with me.
A year ago the leading members of the present government, the present Prime Minister, the present Minister of Finance (Mr. MacEachen), and the present Minister of Industry, Trade and Commerce (Mr. Gray) were attacking the then Conservative government every day of the week. Why? Because they claimed the interest rates charged in November, October and December of 1979 were far too high and that they were strangling the economy and creating unemployment. They lectured the House and the then government, and they told the people of Canada that if they were the government in power interest rates in this country would not be tied to the United States.
Mr. Speaker, is it necessary for me to remind members of this House that interest rates today are substantially higher than they were a year ago, when we had a Conservative government? Interest rates today in this country are closely associated and inextricably tied to the American interest rates, as they were a year ago.
What the members of the government are telling the Canadian people is, "Do as we say, not as we do." They have forgotten, and they want the Canadian people to forget all the things which they were saying a year ago. I remember the Minister of Industry, Trade and Commerce promised to resign if a government with which he was associated would permit the kinds of interest rates which the Conservatives had at that time. I know he has not been here in recent days because he has had an accident. I am sorry about that. But one thing the Minister of Industry, Trade and Commerce will not do is the thing he said he would do if economic conditions today existed as they did a year ago. They are not now as they were a year ago, they are much worse.
Yesterday the Bank of Canada raised its bank rate to 17.6 per cent, an all-time high for Canada. It meant that almost automatically the chartered banks would raise their rates, which they did. Those rates have been set at 18.25 per cent. That is the prime rate, 18.25 per cent. What that means is that interest rates to most people and small businesses will run now
December 19, 1980

between 19 per cent and 20 per cent. That will be disastrous for tens of thousands of Canadian people.
I ask the minister in charge of housing what will happen to the thousands of people who, in the next month or two, find the mortgages with which they financed the purchase of their homes five years ago are up for renewal? Some five years ago the rate was 11.8 per cent. I had the misfortune-maybe it was my fortune-to have renewed my mortgage in October, and instead of 11 per cent I am paying 143A per cent. Well, Mr. Speaker, it is likely that in the next month or two people who have to renew their mortgages will pay 15 per cent, 17 per cent, or 18 per cent. 1 wonder what the minister in charge of housing is going to do or what kind of explanation he is going to have for the people who have to renew their mortgages.
I wonder how the ordinary businessman is going to manage, given the rates of 18 per cent to 20 per cent. Mr. Speaker, I am not worried about the oil companies, I am not worried about the banks. They are doing very well, thank you. 1 am worried about the small businessman, the retail merchant in my constituency who bought stock for the Christmas rush which he hoped to see, and who will probably be left with $10,000, $20,000, $40,000 or $50,000 worth of merchandise which will not be sold because of the slump in our economy. These people will have to pay the bank loans which they made in the expectation that they would sell that merchandise, and would have a bank interest rate of 12 per cent or 13 per cent. Now they are going to have to pay 18 per cent, 19 per cent or 20 per cent.
I do not have to speculate about what is going to happen. We know what is going to happen. Bankruptcies are now running at an all-time high rate. And they are going to get worse, given the refusal of the government to take any serious action. Bad as the high rate of interest is, and bad as the rate of inflation is, there is something worse than either the high interest rate or the high rate of inflation, and that is the kind of roller-coaster interest rates which the government and the governor of the Bank of Canada have permitted. 1 ask members of this House: how can anybody, how can any individual, how can any company, how can any corporation, except a few of the very largest ones, make any kind of plan to expand or even to continue to operate, given the circumstances? How can they order ahead when they do not know what the interest rate will be today, tomorrow, next week or next month? Let us remember, Mr. Speaker, the interest rate for most individuals and small companies is close to 20 per cent. A few months ago it was 4 per cent or 5 per cent lower. A month or two from now it may be lower, or it may be 2 per cent or 3 per cent higher.
Let us look at just one example of the kind of stupidity in which we are involved. Chrysler Corporation, one of the biggest corporations in Canada and in the United States, has been in serious difficulty. Because they employ, either directly or indirectly, in the United States and Canada, about 600,000 people, they asked for and they got help from the American and Canadian governments. This was help in the form of guarantees which were certainly worth more than a billion dollars. We gave them that help because we wanted them to
Economic Conditions
continue to operate. We did not want another 600,000 people thrown onto the labour market. Then we let the interest rate go up so high that people cannot afford to buy cars and it is almost certain that Chrysler will go bankrupt. How idiotic can we get? Yet that is just one example of the stupidity of the policies we are following.
We are told by the minister and his parliamentary secretary that we have no choice, that we are locked in with the United States. The government has already indicated that this is not what the minister and the Prime Minister said. We have been told there is no other course that this country can follow. We cannot accept that argument and we know that there are many economists in this country who do not accept that argument and do not believe that we have to be so closely associated in a disastrous course of action with the United States.
We believe that the country should not follow the kind of interest rate increases as the United States. We follow that course because the bank is afraid that, if we do not, the value of the Canadian dollar will fall precipitously. We do not accept that opinion. As I have said, there are many economists who agree with us and reject the prescription given to us and accepted by the Liberal government, and accepted some years ago by the Conservative government and by the governor of the Bank of Canada.
We believe that we should have an interest rate in this country which should make sense for Canadians. We believe that we should have kept our interest rate where it was six weeks ago when the Minister of Finance was so proud that the interest rates had gone down and had taken so much of the credit for that. Of course, now that the interest rates have gone up, he refuses to take any of the responsibility. The minister says that Canadians must be prepared to sacrifice and accept a lower standard of living. We do not accept that argument. We say that if sacrifices must be made, then everybody must cut back. That is not what is happening.
There are certain groups in this country which are doing quite well. Let me give a couple of illustrations of what I mean. Yesterday, the Toronto Star ran a story with the heading "Oil Profits Higher, but Less Goes into Exploration". Let me read the first couple of paragraphs from that dispatch.
Canada's oil industry made more money than ever in the first six months of 1980, but reinvested a smaller percentage of its revenues in oil and gas exploration and development than in the same period last year.
A federal government survey released yesterday showed profits rose 54 per cent to $2.24 billion, but reinvestment in exploration fell to 84.6 cents from 86.1 cents out of every dollar of revenue.
They are not being asked to sacrifice, but they are doing better than ever. What about our banks? Bank presidents are among the leaders-and they lecture the Canadian people about the need for restraint and pulling in our belts. The total assets of all banks increased by October 31, 1980, over the same period in 1979 by 21.8 per cent. The total assets of banks are now $269,865,000,000. That is not bad for a group of companies. They have done very well out of our inflation.
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December 19, 1980
Economic Conditions
We say that if the oil companies and the banks can do as well as they have, then we do not think it is time to ask people as a whole to puli in their belts. But we have been told by the Minister of Finance that inflation is not so serious after all, that we have indexed pensions and that there are other forms of payments for our sick and needy. That is true. I would remind hon. members that that was done in that terrible minority Parliament about which we have heard so much from the Conservatives. The members of our party forced the Liberal party to bring in indexing.
There are hundreds of thousands of working poor in this country. In fact there are several million working poor who do not benefit from any kind of indexation and who are not protected through unions which negotiate on their behalf. For them, double-digit inflation means eating less and doing without other necessities. It is only a Prime Minister brought up in the lap of luxury who would advise other people to change their priorities. If one listens to the Minister of Finance, one would think that our senior citizens are living in luxury. The facts, of course, are entirely different. Over 50 per cent of the people receiving the old age pension also receive the guaranteed income supplement. In order to get GIS these pensioners have had to pass a means test. We know from what they receive that these several million people are living in poverty. It is much better than it once was, but it is not anything about which we can be very proud.
I talked about the people who live in poverty. In the core area of my city, half of the family heads, according to a survey conducted by the school division, are unemployed. Those people are living in poverty every day of the year. A principal of one of the schools describes these people as living in a Third World right within our own city. This is the situation which exists. It is a situation respecting which the government has refused to take any practical action to help those who need help the most. That is why we asked for this debate.


Mr. Lome Greenaway (Cariboo-Chilcotin):: Mr. Speaker, before I get down to what I want to say I wish to bring to the attention of the President of the Privy Council (Mr. Pinard) the fact that a catastrophe occurred this week in British Columbia in the form of a flood in the little coastal community of Bella Coola, which has a population of about 2,000 people. On Monday the river overflowed its banks and put about 30 people out of their homes and caused about $5 million damages. Yesterday the minister of the environment, Mr. Rogers, and the minister of highways, Mr. Fraser, for British Columbia flew over and, I believe, landed in the community to survey the damage.
I was hoping to raise either a Standing Order 43 or a question in the House today to make sure the government was aware of the situation. I have spoken to the minister about the matter, and I merely want to put on the record the fact that there is a problem which should be addressed by the government. Having said that, 1 would like to get to what I really want to say today in this debate, although 99 per cent of it has already been said.
There is no doubt that the October 28 budget is a fiasco of the greatest magnitude. Certainly Canadians can see that now, and it is also showing up in other countries. I would like to quote from The Economist of London dated November 29 which says:
Canada's nationalistic budget shows signs of being undermined by the ever-present influence of the United States economy. Less than a month after the budget, it looks as though Mr. Allan MacEachen, the finance minister, was counting on a more powerful American recovery than now seems likely. And inflation may rise faster than the federal government was expecting-higher American interest rates have weakened the Canadian dollar.
The budget assumptions are already askew.
We are aware of that. If some kinds of changes are not made to this budget in the near future, we will be facing a disaster in this country of the greatest magnitude. Behind all this is about 12 years of Liberal inaction and band-aid policies. We have seen make-work type programs rather than any long-range planning.
My main thrust concerns science and technology, or research and development, which is a topic that has been mentioned in a number of speeches in the last 15 to 20 hours. I have something to add to this. It is evident that this government still has not twigged to the importance of research and development. All one has to do is pick up almost any article on the subject to see how badly Canada has slipped in this area. We have slipped from spending 1.4 per cent of our GNP in 1967, which was the year before the Prime Minister (Mr.Trudeau) came to power, to a point where we are spending what we are told is .9 per cent of the GNP, but if you really look closely at it, it is about .8 per cent of the GNP, which puts us in almost the range of some Third World countries. I think this is the root of our problem. For every half of 1 per cent of the GNP spent on research, 400,000 jobs are created, as we were told by the president of the National Research Council about three weeks ago in committee.
We talk here about employment and job security, as well as new jobs for the young people. But the only way we will ever get them is through innovation, new techniques, and research and development.
I shall quote from some speeches and draw to hon. members' attention just how serious a problem we face in this country with regard to research and development. First is a speech given by Walter F. Light, president and chief executive officer of Northern Telecom Limited. He spoke before The Financial Post conference on research and devclopme.it on October 9. His opening paragraph sums things up fairly well. It reads:
It would be nice to be able to say, with some degree of sincerity, that I am glad to be here. But, I can't.
I am, of course, honoured to participate in your deliberations. However, when I reflect upon the nature and the need for such discussions, I am desperately sad, rather than glad.
This is the third national conference in as many years directed toward highlighting Canada's abysmal investment in research and development and its falling national skill of innovation. Over the same period there have been hundreds of speeches given by businessmen, scientists and politicians, on various aspects of this critical Canadian industrial vulnerability. I have been speaking on this subject for five years. My company has been publicly addressing the issue
December 19, 1980

since 1969. Fortunately for us we took our own advice and built the country's largest private R and D establishment. But it is horrifying to see the continued drift and absence of commitment to industrial R and D at the national level.
This fact has been borne out by other people.
Keith Spicer in the Montreal Gazette for December 8, 1980, says very much the same thing. His article reads in part:
How much, indeed, do other countries put into research and development? The average for countries roughly as industrialized as Canada is about 2.5 per cent of gross national product. Canada's research and development outlay droops around 0.8 per cent of GNP.
We have a worse record in agriculture. We spent two days debating what we feel are some of the shortcomings in agricultural policy brought forward by the present government. I had the privilege of speaking and listening to the minister's speech. He boasted to us about how proud he is of the fact that 1.3 per cent of the federal budget goes to agriculture. That might be very good in that he is not spending too much money, but on the other hand he is short-changing research in agriculture by so many millions of dollars that it boggles the mind. If you examine the statistics closely, you will see that in agriculture we are only spending approximately .13 per cent of the agricultural GNP on research. We have already sunk over all in the GNP to .8 per cent. Agriculture is way down in its spending on research.
In the minister's speech, as reported in Hansard at page 5539 for December 9, he said:
I am proud that our involvement in the research and development field represents one of the highest dollar figures and one of the best results of any country in the world. I strongly support the federal government's plans to increase over-all research expenditures from .9 per cent of the GNP to 1.5 per cent by 1985. We have a number of valuable research projects that could start if we got additional funds.
It is the government's priorities which are fouled up. What the government has done over the last 12 years has been to spend millions and billions of dollars on social programs. The government has reduced incentive in this country to the point now where people are very reluctant to start businesses or to get involved in any kind of a risk venture.
During the debate on agriculture I brought to the minister's attention the situation of a laboratory in Saskatoon. 1 had the pleasure of working for this laboratory for a few years. It is a very good example of the Liberal government's view toward research and development. It became apparent to ranchers and farmers in western Canada, and to Canadians in general, that very little research was being done on animal diseases, to the point where several people got together and initiated funding from various sources. They built a $4 million laboratory in Saskatoon. They staffed it with the best people they could find from all over the world, and within a three-year period came up with a vaccine to prevent neonatal diarrhea or calf scours in calves which can cost this country somewhere in the neighbourhood of $80 million in a bad year.
Concerning the funding of this laboratory, I will read from page 5640 of Hansard for December 10, when I said:
Economic Conditions
It is interesting to look where the funding came from for this laboratory. Over 60 producer groups from across Canada have put in money. For example, the Canadian Egg Marketing Agency put in $50,000, the Canadian Turkey Marketing Agency $200,000, and the Alberta Cattle Commission $90,000. I could read on and on. The government of Alberta put in almost $2 million and the government of Saskatchewan over $1 million. The British Columbia government contributed, as did the government of Manitoba. The drug companies put in about $200,000, and the Devonian Group of Charitable Foundations, located in Calgary, put in approximately $3.5 million.
To date about $8,800,000 has been donated by these various groups along with dozens and dozens of individual producers. It is interesting to note that over the seven-year period this lab has been in existence the federal government has donated $43,000 to this institution, which is less than one-half of one per cent of total capital expenditures and operating costs to date.
I think this gives some idea of the importance that the government puts on research and development. Two weeks ago in the Standing Committee on Miscellaneous Estimates we listened to the president of the National Research Council. We were discussing the supplementary estimates. The chairman of the committee, of course, is a Liberal. However, there was not one Liberal member at that committee.
We had one of the most prestigious, if not the most prestigious, research groups in Canada before us to answer questions, but there was not one Liberal member at the meeting. That is another example of what the government thinks about research and development in science and technology. We were to hear the minister a week later at the same committee on supplementary estimates. He was able to give us about 15 minutes of his time.
That brings me to another point on the importance or lack of importance the government ascribes to this ministry. When we were in government last year, in the short time we were in office we were able to give this important subject a ministry of its own. We elevated it to the point where the research community in Canada was overjoyed with the fact that somebody finally recognized that research and technology and the science community were alive and would thrive with some interest from government.
Unfortunately we were defeated, and we are right back to where we were. We again have a minor ministry, and the importance we placed on it is completely lost. I wish to read some quotes showing what people think about this. I quote Keith Spicer from the Montreal Gazette of December 10:
It assigns science and technology to a junior ministry with a part-time minister, not even a minister with a mandate to foster economic development but to a minister of the environment who must be professionally skeptical about technology.
Walter Light in the speech which he gave to The Financial Post conference on research and development had this to say about the ministry:
One reason is that science and technology have never had a strong, high-powered, high-profile spokesman in the federal cabinet. That ministry is not given to one of the co-called cabinet heavyweights. It is of junior rank and is so treated.
For example, the minister of science and technology is not a member of the cabinet's powerful priorities and planning committee. From this one can only deduce that economic technological advancement is not a priority of, and docs not fit into the plans of the federal government.

December 19, 1980
Committee Reports
This is how it is perceived by the scientific community which just last week met here in Ottawa. Everything I am quoting happened in the last couple of months, although it has been happening year after year. 1 wish to quote an article from the Wednesday, December 10, 1980, edition of the Ottawa Citizen, headlined "Scientists fight for funds". I quote:
The cream of Canada's scientific crop in Ottawa this week to lobby members of Parliament for a bigger research and development budget and to issue a report card on how the politicians respond.
Dr. John Cowan, president of the Canadian Federation of Biological Societies, said Tuesday scientists arc "very upset with Canada's dismal research and development effort and don't plan to take it sitting down.''-
The Liberal government promised two and a half years ago to increase Canada's investment in research and development from the current 0.9 per cent of the gross national product to 1.5 per cent by 1985, he said.
"Since then absolutely nothing at all has been done to achieve that goal", he said. "The government has put us on the back burner while research and development is going down the drain in this country".
Canada's current level of spending on research and development, a total of about $3 billion annually, "leaves us at the absolute bottom end ... in the same league as some developing countries", Cowan said.
How can a government be so blind, deaf, dumb and stupid as to put research and development on the back burner in this country when, as I just said, by increasing funding by one-half of 1 per cent of the GNP, we'ean create 400,000 jobs'? That would cut the unemployment figures in this country at this moment by 50 per cent.
What is being done in other countries? The Japanese certainly know what to do. They are spending a minimum of 2Vi per cent of their GNP on their research and development this year, and they are planning to have it up to 4 per cent by the end of this decade.
We hear that they have cheap labour in Japan. That is not true. Japanese labour costs are on a par with those of the United States, but their productivity is higher. They are now surpassing the U.S. in industrial power. In the United States, research and development investment dropped 5 per cent since the late sixties, but not so in Japan. They see the light. Japan produced ten million more watches than were produced in Switzerland last year. Japan produces ten million cars annually, about one hundred times what it produced 20 years ago. This is now the equal of a good year in the U.S.
In Europe it is estimated that 300,000 scientists and technologists in university, government and industry are engaging in research and development. About the same number are employed in Japan. In Canada, we estimate there is somewhere in the neighbourhood of about 8,000 to 10,000 people employed in research and development. It has to be a national disgrace.
We have had some successes in this country and we can have a lot more. For instance, the University of British Columbia in my province recently experienced quite a phenomenon. They were awarded four Guggenheim Fellowships.


The Acting Speaker (Mr. Ethier):: Order, please. 1 regret to interrupt the hon. member, but his allotted time has expired.


BUSINESS OF THE HOUSE
David Michael Collenette: Mr. Speaker, there have been some discussions among the parties. In view of the unusual length of this debate, we have agreed to seek unanimous consent to allow three reports from standing and special committees to be presented at this time, and also to read the questions on the order paper.


Walter David Baker: Yes, Mr. Speaker, there have been those discussions and we are agreeable.


Stanley Howard Knowles: Agreed.



ROUTINE PROCEEDINGS


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, I thank the House for its co-operation. On Friday, July 18, 1980, the Standing Committee on External Affairs and National Defence received an order of reference from this House to consider Canadian policy with respect to the North American Air Defence Command (NORAD) Agreement and to report thereon no later than December 31, 1980. Mr. Speaker-

-I have the honour to present the third report of the Standing Committee on External Affairs and National Defence concerning NORAD.

I thank hon. members for their co-operation and those who worked very late last night to produce this report on time. Members of all parties should be thankful for a well-performed task.


SPECIAL COMMITTEE ON REGULATORY REFORM
[Stage Direction]
Final report of Special Committee on Regulatory reform- Mr. Berger.
December 19, 1980

Jesse Philip Flis: Mr. Speaker, I too would like to thank hon. members of all parties for their co-operation in allowing us to table these reports. It is the same co-operation which I as chairman of this committee experienced in our deliberations.
It gives me great honour to present the Second Report of the Special Committee on a National Trading Corporation.
[Editor's Note: For texts of above reports see today's Votes and Proceedings.]


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David Michael Collenette: Mr. Speaker, the following questions will be answered today: Nos. 708, 1,521, 1,570, 1,683, 1,696, 1,740, 1,745, 1,752, 1,760, 1,765, 1,768, 1,770, 1,788, 1,817, 1,823 and 1.824.


Mr. Murphy: How many residents of Manitoba have been appointed to government boards, commissions, tribunals, task forces, selection committees or other government appointed bodies since February 18, 1980. and, in each case, what is their name, position and salary or honoraria?


David Michael Collenette: In so far as Atomic Energy Control Board is concerned: two.
Dr. J. B. Sutherland
Member, Atomic Energy Control Board Advisory Committee on Radiological Protection
$1 75 per day-honorarium Dr. H. E. Duckworth
Chairman, Atomic Energy Control Board Advisory Committee on Nuclear Safety $175 per day-honorarium
In so far as the Canada Employment and Immigration Department is concerned: four residents of Manitoba were appointed to the Manitoba task force (LEAP and Outreach) Dr. David Walker
Chairman, Manitoba task force $290 per day-honorarium
Order Paper Questions
Ron Collett
Member, Manitoba task force $2,500-honorarium Bill Shead
Member, Manitoba task force $ 1,500-honorarium Allan Ross
Member, Manitoba task force $ 1,500-honorarium
In so far as the Department of Indian Affairs and Northern Development is concerned: one.
Judge Patrick David Ferg, county court of Winnipeg
Arbitrator, Northern Flood Agreement on March 21,
1980.
Departmental funding is in the order of $50,000 maximum for all expenses for one year. Payments are made for services on a need basis.
In so far as the National Capital Commission is concerned: two.
Mrs. June A. Westbury
A member of the Manitoba legislative assembly and a commissioner of the National Capital Commission since her appointment on May 1st, 1976, Mrs. Westbury was also appointed member of the commission's advisory committee on design effective April 18, 1980, to March 31, 1981. Asa member of this committee and a commissioner, she is reimbursed reasonable travelling expenses for attending at meetings according to Treasury Board guidelines on travel expenses. She also receives remuneration at the rate of $123 per diem while in performance of her duties as a committee member, plus a payment of $123 for any part of a day during which she must travel.
Sharon Zenith Corne
An artist from Winnipeg, Manitoba, Miss Corne was appointed member of the commission's advisory committee on arts effective April 18, 1980, to March 31,
1981.	As a member of this committee she is reimbursed reasonable travelling expenses for attending at meetings according to Treasury Board guidelines on travel expenses. She also receives remuneration at the rate of $123 per diem while in performance of her duties as a committee member, plus a payment of $123 for any part of a day during which she must travel.
In so far as the Department of National Health and Welfare is concerned: four.
Dr. R. H. Taverner
Provincial representative, Canadian Organizing Committee for International Year for Disabled Persons (l.Y.D.P.) 1981.
No salary or honorarium

December 19, 1980
Order Paper Questions
Mrs. Yetta Gold
Committee member, Canadian Organizing Committee for International Year for Disabled Persons (I.Y.D.P.) 1981.
No salary or honorarium Mrs. A. Labelle
Council member, National Advisory Council on Aging $100 per day-honorarium Mrs. C. Myrna Bowman
Member and vice-chairman, Canada Pension Plan Advisory Committee $100 per day-honorarium
In so far as the Ministry of the Solicitor General is concerned: one.
Dorothy Betz
Member, National Parole Board Salary Range ofSX2 position-$38,300-$52,100 Other departments and agencies have no information on this subject.


Mr. Cossitt: 1.	At what Terminal I gate did Flight No. 44 of American Airlines from San Francisco to Toronto land at the Toronto International Airport on Thursday, September 25, 1980, and what is the exact distance in feet from the aircraft exit to the Canada Customs area?
2.	Were push-carts provided by the Department of Transport available at the aircraft exit area for incoming passengers carrying heavy hand luggage and, if not (a) for what reason (b) is the department considering making push-carts available as quickly as possible or is it considering the installation of a moving sidewalk?
3.	Were airport personnel in attendance between the aircraft exit and Canada Customs areas and, if not, for what reason?
4.	Was assistance provided at the aircraft exit area for elderly persons, incapacitated persons, etc., in particular with reference to the carrying of heavy hand luggage and, if not, for what reason?
5.	W'ere porters on duty at the time at the Canada Customs area and, if so, how many?
6.	Flow many other flights were disembarking passengers at approximately the same time?
7.	Will steps be taken to provide additional porter assistance for the elderly etc. in the Canada Customs area and, if so, what are they?
8.	Is the department aware as to whether or not arriving passengers included persons from the United Kingdom, some of whom state that they were almost collapsing from baggage carrying, lack of service, etc. and, if so, what will the government do about the situation?


Robert Theodore Bockstael: 1. Gate 14, a distance of 860 feet.
2. (a) No. It is considered unsafe to use baggage carts on the escalator to the arrivals baggage claim area.
(b) Baggage carts were introduced on a trial basis in January, 1978, but discontinued because of congestion and slowdown of passenger processing. Alternative was to increase porter service. Because of corridor curvature and distance involved, moving sidewalks are not being considered.
3.	No. It is the responsibility of the airline to assist and
direct passengers in this area.	*
4.	Common practice is to station one passenger agent at the aircraft door with a second agent at the stairs from the loading bridge. Special arrangements are made for additional help for incapacitated passengers. No special assistance is provided for carrying passengers' heavy hand baggage as heavy hand baggage would normally be checked.
5.	Yes. Nine porters were on duty.
6.	In the previous hour four other flights and in the hour following an additional four flights.
7.	The situation in question will be brought to the attention of the airline committee which is responsible for the provision of porter service.
8.	Transport Canada is not aware if flight No. 44 carried passengers from the United Kingdom. However a flight from Gatwick arrived twenty minutes earlier carrying 279 passengers and a flight from Manchester one hour later arrived with 277 passengers. Because of limited capacity in the international arrivals area, passengers sometimes experience periods of extreme congestion and are subjected to a much lower level of service during these peak periods, which results in more crowding, more waiting and fewer porters being immediately available. The department is aware of this situation and expects to commence construction to modify the facility in the very near future. The problem is not so much walking distance as one of congestion.


Mr. Howie: Did the Department of Transport decide to proceed with the extension of the runway at the Saint-Leonard. New Brunswick Airport and, if so. on what date will the work commence?


Robert Theodore Bockstael: The runway at Saint-Leonard has been constructed to 4,000 feet which is adequate for the type of aircraft which will utilize the airport. There are no plans to extend the runway beyond this length.


Mr. Cossitt: Did Mr. Michael Pilfield, Clerk of the Privy Council and secretary to the cabinet, attend a meeting of the Liberal Party campaign committee in July 1978 at the Inn of the Provinces, Ottawa and, if so, on what dates?


David Michael Collenette: Please refer to the minutes of proceedings and evidence of the Standing Committee on Miscellaneous Estimates, page 27:20, dated November 4, 1980.
December 19, 1980


Mr. Herbert: How many employees in the public service, by department, are presently occupying senior executive equivalent positions?


Hon. Donald J. Johnston (President of the Treasury Board):: The number of employees in departments and agencies listed in the Public Service Staff Relations Act, Schedule I, Part I, and occupying senior executive equivalent positions is
as follows:
Department of Agriculture	34
Canada Employment and Immigration	Department	3
Canadian International Development Agency	1
Canadian Penitentiary Service	1
Canadian Radio-television and Telecommunications
Commission	2
Canadian Transport Commission	3
Department of Communications	3
Department of Consumer and Corporate Affairs	1
Department of Energy, Mines and Resources	26
Department of the Environment	29
Department of External Affairs	62
Department of Finance	1
Department of Fisheries and Oceans	9
Department of Indian and Northern Affairs	3
Department of Industry, Trade and Commerce	18
International Joint Commission	3
Department of Justice	36
Department of National Defence	31
National Energy Board	4
Department of National Health and Welfare	41
National Museums of Canada	5
Department of National Revenue	5
Public Archives	1
Department of Public Works	10
Department of Regional Economic Expansion	4
Ministry of State for Science and Technology	1
Statistics Canada	20
Ministry of Transport	3
Department of Veterans Affairs	4
Total	364


Mr. McCauley: For the fiscal year (a) 1977-78 (b) 1978-79, how many persons in the constituency of Moncton applied for and received monetary assistance from the Moncton, New Brunswick branch of the Federal Development Bank?


Ralph Ferguson: In so far as the Federal Business Development Bank is concerned: the following figures are for the entire Moncton, New Brunswick branch territory:
Year	Inquiries Received Applications Received Authorized
1977- 78	332	131	1101978- 79	332	125	116
Order Paper Questions


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Department of Communications for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Mr. Peter Stollery (Parliamentary Secretary to Secretary of State and Minister of Communications):: In so far as the
Department of Communications is concerned, the answer to the above question is as follows: for fiscal year 1980-81 projected expenditures
(a)	None;
(b)	$415,000;
(c)	$198,000.


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Department of Indian Affairs and Northern Development for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: In so far as the Department of Indian Affairs and Northern Development is concerned, the answer is: the department is projecting an expenditure of $1,253,000 in the current fiscal year, 1980-81, for (a) media advertising, (b) free or subsidized publications, and (c) other information, it is not possible to break down the expenditure into the various subdivisions as in (a), (b) and (c).


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Department of National Revenue for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Mr. Claude Tessier (Parliamentary Secretary to Minister of National Revenue):: Customs and Excise
(a)	$206,754;
(b)	$117,700;
(c)	None.
Taxation
(a)	None;
(b) Inside Taxation	$26,000
1980 Taxation Statistics	33,000
The department also produces a series of free tax information pamphlets which are included in the general printing budget for tax forms and guides related to completion of these forms. Costs for these pamphlets are not maintained separately.
(c)	None.

December 19, 1980
Order Paper Questions


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Treasury Board for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Donald James Johnston: In so far as the following are concerned:
Treasury Board Canada:
(a)	None
*(b) and	(c)	$1,330,000
Office of the Comptroller General of Canada:
(a)	None
*(b) and	(c)	$205,000 *
*Note: Projected expenditures for free or subsidized publications and other information cannot be separated so one total amount only can be provided.


Mr. Stevens: For the current fiscal year, what arc the estimated expenditures of Polysar Limited for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Pierre Bussières: Polysar Limited is a private sector corporation wholly owned by the Canada Development Corporation in which the Government of Canada is a minority shareholder (having only 44.3 per cent of the voting shares, on a fully diluted basis) and only one of about 25,000 shareholders. Polysar is neither a Crown corporation or an agent of Her Majesty nor does the government directly hold any equity in it. The Minister of Finance has thus no knowledge of any of Polysar Limited's estimated operating or administrative expenditures for the current fiscal year.


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of the Canada Development Corporation for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Pierre Bussières: The
Canada Development Corporation is a private sector corporation in which the Government of Canada is a minority shareholder (having only 44.3 per cent of the voting shares, on a fully diluted basis) and only one of about 25,000 shareholders. CDC in neither a Crown corporation nor an agent of Her Majesty. The Minister of Finance does not have any knowledge of CDC not available to the public and thus has no knowledge of the corporation's estimated operating or administrative expenditures for the current fiscal year.


Mr. Stevens: For the current fiscal year, what are the estimated expenditures of Via Rail for (a) advertising (b) free or subsidized publications (c) other information conveyed to the public?


Robert Theodore Bockstael: (a) $3,300,000; (b) $1,085,000: (c) $25,000.
1980 CANADIAN GOLD COIN


Mr. Cossitt: As of November 30, 1980, which is the deadline for orders of the 1980 Canadian $100 22 karat gold proof coin (a) how many orders were received (b) what is the limit of coins to be minted regardless of the number of orders received (c) if there are any excess coins, will they be destroyed?


Hon.   J.-J. Blais@Minister of Supply and Services: I am
informed by the Royal Canadian Mint as follows:
(a)	The Mint has received orders for 130,474 coins.
(b)	The number of coins struck is approximately 177,477.
(c)	Yes, excess coins will be destroyed with the exception of a small quantity for possible warranty claims. The number of coins to be destroyed is not necessarily the difference between the above-mentioned numbers; the Mint is selling several coins through direct mail orders and will accept all orders bearing the November 30 postmark.


Mr. McKinnon: Did the Department of National Defence place a $400,000 contract, file number GS.I039W-0-000I-2 with Pierre Tremblay Publicite Inc. for national recreational advertising services and, if so, for what purpose?


Hon.   J.-J. Blais@Minister of Supply and Services: 1.
Contract GS. I039W-0-0001-2 was awarded by the Department of Supply and Services on behalf of the Department of National Defence to Pierre Tremblay Publicite Inc., Montreal, Quebec, on July 21, 1980. The total contract value was $400,000.
2. The contract was for the provision of a National French Language Advertising Program in support of the Department of National Defence 1980 spring-summer recruitment campaign.


Mr. McKinnon: Did the Department of National Defence place a contract with Canadair Ltd. file number HB50.2729804 in the amount of $50,000 for a field services representative to provide support for the CFI 16 Freedom Fighter aircraft program and, if so, what is the program?


Hon.   J.-J. Blais@Minister of Supply and Services: Yes.
The CFI 16 is the official designation applied by the Department of National Defence to the more commonly known CF-5
December 19, 1980

aircraft which was manufactured by Canadair under licence from Northrop.


David Michael Collenette: Mr. Speaker, if question No. 1,415 could be made an order for return, this return would be tabled immediately.


The Acting Speaker (Mr. Ethier):: Is it agreed that question No. 1,415 shall be made an order for return?


Some hon. Members:: Agreed.


Mr. Greenaway: 1.	In each year since 1975 to date, what amount was spent by the government on the Canadian Postage Stamp Program for (a) design (b) production?
2.	In each case (a) who was the designer (i) what was his/her province of residence (ii) what amount was hc/she paid (iii) what was the theme or topic of his/her design (b) which design was (i) commissioned (ii) solicited (iii) unsolicited (c) which design was (i) used singly (ii) used as part of a named series (iii) not used?
3.	For the same years, by name, denomination and designer, how many (a) single stamps (b) series stamps were devoted to Indian themes and what percentage of the total yearly cost did this represent?
4.	For the same years, what was the (a) name of each member of the Stamp Advisory Committee and what was his/her province of residence (b) from what area of expertise was he/she drawn (c) how much time did he/she spend on the selection of stamps used in the progam (d) what amount did he/she receive for his/her service?
Return tabled.


David Michael Collenette: Mr. Speaker, I ask that the remaining questions be allowed to stand.


The Acting Speaker (Mr. Ethier):: Shall the remaining questions stand?


Some hon. Members:: Agreed.


BUSINESS OF THE HOUSE
Ramon John Hnatyshyn: Mr. Speaker, I rise on a point of order. I see there is a spirit of Christmas willingness to co-operate at this point in time. I rise in that spirit. I noticed on the order paper that the Minister of Justice (Mr. Chretien) was going to introduce and give first reading to his bill with respect to amendments to the Criminal Code relating to sexual offences and offences against children. The reason that 1 raise that is that we have been waiting for a long time and pressing the minister to bring this forward, and I am just wondering why we cannot, in that same spirit that we have demonstrated now,
Economic Conditions
allow this bill to be introduced. There are a number of people who are concerned and would like to see the legislation itself brought before this House and tabled so that we have the specific bill before us to study over the recess.
Second, I understand that the Minister of Justice is holding a press conference, and while 1 anticipate that he will not, of course, be revealing the contents of the bill itself, he is going to deal with the general directions in which the government intends to move in this respect. It seems to me that it would just be a matter of common sense and courtesy to this House that we now have the actual bill tabled before the House.
I think we should be able to arrive at some consensus in this House in this regard and allow the minister to come forward and go through the formalities. It is not a long process. It simply involves his tabling the bill. We can all then have it for our Christmas reading, and I think that suggestion should be taken seriously by the representatives of each of the parties.


Walter David Baker: A wonderful idea.


Stanley Howard Knowles: Mr. Speaker, I appreciate the spirit in which the hon. member for Saskatoon West has made his appeal, but for reasons that some of the members of my party feel are valid they have asked me not to agree to the presenting of that bill today.


Ramon John Hnatyshyn: Stanley, why?


David Michael Collenette: Mr. Speaker, I wish to concur in the comments made by the hon. member for Winnipeg North Centre. There were discussions earlier, but it was impossible to reach an agreement. The minister has announced a press conference. We will go ahead with the holding of that press conference, but obviously we will keep the normal rules of the House of Commons in line since the actual bill itself has not been presented in the House.


Walter David Baker: Mr. Speaker, I just want to make it abundantly clear, if it is not already, that we were prepared to have that bill introduced today.


MOTION TO ADJOURN UNDER S.O. 26   THE ECONOMY EFFECTS OF RISING COST OF LIVING AND INTEREST RATES
[Stage Direction]
The House resumed consideration of the motion of Mr. Broadbcnt:
That this House do now adjourn.
Elmer MacIntosh MacKay: Mr. Speaker, it is a real pleasure to be able to take part in a debate that has commanded so much of the attention of the House for such a long period of time. It has been most interesting to hear the
6040

December 19, 1980
Economic Conditions
many thoughtful speeches which have been made dealing with what I think it has now become abundantly clear is a genuine economic crisis in the country.
Indeed, looking back over the perspective of the time that I have been here in Parliament, which is getting to be several years now, one can detect an extraordinary drift toward the very kind of position in which we now find ourselves. It is almost as if our country has been seized with a kind of pernicious inertia which has seen us get more and more indebted, particularly to foreign money lenders, to the point where we are now experiencing some real difficulty in meeting our own economic objectives because of the financial burdens that we have been subjected to by the government's policies over the years.
The Prime Minister (Mr. Trudeau) and his cabinet, ever since the Prime Minister came to power in 1968, have taken a country which at one time was the envy of the world, had great resources, had unused financial credit, and in which much good will existed among the various provinces and systematically brought it to the point where we find ourselves today struggling with some very real problems which have really taken us to the point where we are classed almost as a Third World country, if it were not for our extraordinary resources. We had a first-rate opportunity to lead the world and to show what could be done by Canadians, thinking back to those heady days of Expo, but now, because of a second-rate government, we are facing a Third World economy, and it is a very, very serious situation indeed.
If anyone doubts the seriousness of the interest burden, they could do not better than to read a column in the Montreal Gazette by Don McGillivray, who points out the following:
The share of Canada's national income collected by people who make their living from interest and other investment income-in other words, the wages of money-has doubled in the past 10 years.
In 1970, it was 4 per cent of the gross national product (GNP)-
In the same 10 years, the share going to wages, salaries and other labour income-the wages'of work-has stayed at about 56 per cent of GNP. And this means that the share of the GNP going to each worker has declined, since 64 per cent of adult Canadians now participate in the work force compared with 58 per cent in 1970.
Even this comparison doesn't tell the whole story. The wages of money show up not just in the hands of coupon clippers but also in many other places, including corporation profits, especially those of banks.
It can't do the much-discussed work ethic much good for the ordinary worker to see this real wages decline while the real returns of people who let their money work for them are rising sharply.
This situation is most alarming. I believe we owe in excess of $67 billion to foreign moneylenders. The burden imposed on our economy by paying the interest on this amount of money is substantial, and surely it must be arrested before the situation becomes worse.
There are economists who will argue that the national debt is not of great relevance as long as it is owed, in effect, to ourselves, but I have never heard an economist who would not concede that money owed to outside moneylenders in the amounts we are talking about does not present a real obstacle to the proper functioning of our economy. For example, the annual cost of interest on the public debt next year will equal
$500 per capita and $1,390 per taxpayer. Almost one dollar in four is used to service this debt. This compares with one tax dollar in nine, only seven years ago.
We could look to the energy sector of our economy to generate the kind of revenues that could arrest this very alarming situation. We could do that if it were not for the pernicious energy policies brought in by this government and highlighted in Bill C-48 which we will be able to discuss again very soon in this House.
The budget, including the disastrous energy policy, has done absolutely nothing for many important sectors of our economy. There is nothing of any substance for housing, as the hon. member for Winnipeg North (Mr. Orlikow) pointed out a few moments ago. There is nothing at all except $15 million for the next four years for MURBs, and everyone knows that that is almost an insult rather than an incentive for any meaningful housing recovery. There is nothing in it for farming of any substance, and as far as fishing is concerned we see the same lamentable situation. In the Atlantic region where I come from this is not, perhaps, a major economic issue, but it has become a very sensitive issue. The government has even allowed Canadian National Railways, despite very bipartisan pressure being brought to bear by all members of this House, to go ahead with its proposal to close express services and further retreat from its obligations as a national railway.
The national energy policy of the government, so-called, has a depressingly familiar ring to it. I would like to say a few things about Bill C-48, without pre-empting the speech I hope to make later, but let us take a moment, those of us who sat in this House for a number of years, and look at the sense of deja vu which must exist when we cast our eyes back to 1973 when Donald Macdonald was the minister of energy, mines and resources.
Mr. Douglas Fisher, a former member of this chamber, a very astute columnist, summed up the situation very well when he pointed out in an article in The Toronto Sun, approximately a month ago, the strange familiarity that many of us now feel when we look upon the objectives that the government is proclaiming for us so far as national self-sufficiency in petroleum products is concerned. Douglas Fisher recalls that on December 6, 1973, Donald Macdonald brought in his national energy policy and, as he says, its platitudinous slogan of "security; opportunity; fairness." That policy was going to make us energy self-sufficient by 1980. Here is how he was going to do it.
He said that the first thing he was going to do was to do away with the Ottawa Valley line, and this would create a national market for oil which would be supported by a pricing mechanism with sufficient incentives for the development of our oil resources; and any rise in prices would be used to ensure security and self-sufficiency. Remember that this was back in 1973. He went on to say:
The oil pipeline from the west would be extended to Montreal "and as required to eastern points''.
December 19, 1980

There would be an intensive, government-led campaign for energy conservation-
There would be "intensification of research on oil sands technology-
According to Mr. Fisher, the Prime Minister went out of his way to assure the Americans of continued oil and gas exports from the west, of readiness to have Alaska gas go through Canada to the U.S., that is, the Mackenzie Valley pipeline. He also guaranteed that the new national petroleum company is not intended in any way to replace the private sector. That has to be the laugh of the century when you look at what is happening in Bill C-48. In any event, we have now seen in this latest so-called energy strategy that it will not be 1980, which was the goal back in 1973, which will see us become energy self-sufficient. Now the goal is 1990 and, as the House knows, there are many ifs, buts and maybes included in this particular forecast. Mr. Fisher says regarding the situation now in effect:
Today steady, inevitable price rises in oil are seen as a constant. The pace of oil sands development has slowed to less than a walk. Neither an oil nor a gas pipeline has been pushed east of Montreal.
Incidentally this was written after the Prime Minister, in a speech in Halifax, accompanied by the Minister of Labour (Mr. Regan), on January 25 of this year, said, when he was talking about switching to alternate energy sources:
But in order to switch, people must have access to gas. Nowhere is access needed more than in eastern Canada. I am announcing today-
That was last January 24.
-as part of our program, that a Liberal government will take immediate action to ensure the full co-operation of all parties in the construction of a natural gas pipeline to Quebec City and the maritimes. The pipeline will have reversible capacity so that maritimers will have the opportunity, both to use western natural gas now and to send offshore gas to central Canada later.
Since that time the hon. member for Halifax West (Mr. Crosby), myself, and other members repeatedly pressed the Minister of Energy, Mines and Resources (Mr. Lalonde) until finally he made the concession that perhaps they would have to bring in a bill if the NEB would not recognize what he finally conceded should be an instrument of national policy. Is it any wonder that people in the Atlantic region are cynical about the intentions of this government when it comes to energy, or indeed, when it comes to anything else?
1 want to touch briefly on Bill C-48. In my opinion, it is one of the greatest disincentives to the development of our nation's energy that I have ever seen. Not only does it saddle any private enterprise corporation with PetroCan as a partner, but through the unparalleled, unprecedented ministerial discretion that this bill confers upon the minister, it allows the Minister of Energy, Mines and Resources to dictate to any business or enterprise which is associated, and they all are associated of necessity now, in these Canada lands, with PetroCan. By virtue of this, the minister can tell them where they are supposed to drill, when, what their production should be, where it should be delivered, to whom it should be sold, and what they are going to get in return.
Can you imagine any lumber operator, farmer or businessman putting up with that kind of stricture? If the government wanted to cripple perhaps the only source of development of
Economic Conditions
the trillions of dollars which will make the country energy self-sufficient and, more important, help it to pay off its crushing debts, it could not have chosen a more pernicious and a more guaranteed route to interrupt that laudable objective than it has chosen.
If that were not bad enough, you should have a look, Mr. Speaker, not only at some of the unparalleled instances of ministerial discretion that I have listed, but you should consider the punitive and secretive provisions that will be used to enforce the regulations under this bill. One of the things that strikes me as being most ironic, as I hear again for the umpteenth time the government skating around freedom of information, is a provision in Bill C-48 which allows a party to any appeal to the Federal Court under some of the major requirements of the act to apply to have the proceedings held in camera. Based on its track record, based on the way it has used section 41(2) of the Federal Court Act, I have no doubt that the government will almost automatically use that provision to have in camera proceedings regarding appeals from some provisions of Bill C-48. Can you imagine anything that would be more repugnant to a democratic country than to have proceedings in the Federal Court over such an important issue held in camera?
If that is not bad enough, the provisions of the bill require that the onus of proof be on the party accused, the reverse burden, in effect the same kind of perverse trend that is coming in more and more to Canadian jurisprudence which involves quasi criminal or provincial or, indeed, criminal statutes. It is the kind of breach which was made more noticeable years ago when the breathalyser legislation was brought in. Until that time it was generally accepted that a person did not have to incriminate himself, but that has gone by the boards and ever since we have seen, for the sake of bureaucratic expedience, more and more statutes with the burden of proof being put on the accused, a very dangerous trend but one that is becoming quite noticeable in our country.
There is so much material, as the hon. member for Perth (Mr. Jarvis) said today, encompassed in this kind of motion that it is difficult to organize one's thoughts, but one thing is abundantly clear, that there is a kind of hypocrisy at large today on the government benches that seldom, if ever, has been equalled. Power to Liberals is as sex to puritans. They say they loathe it, but they really lust for it. They say that it makes them uneasy, but they itch for it. They also have a very definite feeling that power in the hands of any but their own kind contains a sort of hidden evil.
Unfortunately for the country, their grasp exceeds their reach in the sense that while they are very good at staying in power, they are showing once and for all, and this is one myth that they are debunking, that they lack capacity to take a country which has riches, which would make Saudi Arabia look like a pauper, and lead it to the kind of economic destiny that a great Liberal prime minister once predicted for it when Sir Wilfrid Laurier said that the twentieth century would belong to Canada. Unfortunately, the twentieth century has

December 19, 1980
Economic Conditions
not belonged to Canada and will never belong to us until we take some steps to put our economic House in order.
1 am not going to reminisce about some of the things that we have tried to do in our short-lived term in office because, in retrospect, perhaps they were not that great and it is not easy to stop a landslide quickly once it starts, but 1 am firmly convinced that some of the things we started to do have the proper direction behind them. At least, for example, in my own limited field of responsibilities we were prepared to commit hundreds of millions of dollars to housing. Some people said that it was not enough, that it would only benefit home owners and people who pay property taxes but would not do anything for renters. We were close to putting in a shelter allowance as well, and I hope this government will do so because those two policies together would do a great deal and are now desperately needed. But what do we have? We have almost an insult, as I said earlier; we have MURBs.
Within the limited funds available for economic development, we brought in some additional help for western Quebec, and special areas in Montreal. Because of the fact that the previous administration had let an ARDA agreement terminate, we had little alternative but to bring in a DREE agreement for over $50 million to help eastern Ontario. 1 think some of the things we tried to do were constructive. I say to the government opposite that 1 am not so concerned about the tremendous budget of $66 billion if only some of that money, even if the government had to raise more revenue, were directed toward the repayment of some of the astronomical amounts of money which we owe to foreign money lenders such as the West Germans, the Americans, and the Swiss. Sooner or later we must pay this money back, and the fact that we have not paid it back has put us to some extent in the position in which we now find ourselves, where our financial options are very, very badly reduced.
The Deputy Prime Minister and Minister of Finance (Mr. MacEachen) is from my own province. He has been called the artful dodger. 1 am afraid he cannot dodge much longer. If they are not getting on to him as we say, down in his native Cape Breton, they sure are here in what we call Upper Canada.
I had to chuckle when I saw the editorial which appeared in the December 16 edition of The Citizen. It dealt with the economy and indicated the following:
That admission by MacEachen reflects a direct contradiction
It referred to the admission of the Minister of Finance, that everyone knew, ever since the Bank of Canada began tracking the American interest rate fluctuations, that Canada's monetary and so-called anti-inflation policy is being set in the U.S.
The admission of the Minister of Finance, his penetrating look at the obvious, has now excited enough comment that the Ottawa Citizen, which is not generally known for supporting the Conservative view, has taken a very caustic crack at our beloved Minister of Finance.
It continued:
It is ludicrous to presume that Canadian inflation will be restrained by the current high interest rate policy. Yet inflation-fighting was supposed to be a Liberal priority.
The editorial is extensive, but I will not quote from it in its entirety. 1 invite members to read it because it is certainly very accurate and illuminating.
The same editorial continued:
A concession on the price of conventional oil would bring Alberta to approve the various tar sands projects that arc now on hold.
That goes back to the pre-eminent concern of our country, that of energy.
It continued: that if certain things were done-
-Canada will be energy self-sufficient within a decade.
1 am sure of that, if the disincentives to a tremendous source of revenue and energy security are taken away.
1 have never seen a piece of legislation which was more repugnant for many reasons than Bill C-48. One would think that it was drafted personally by the Minister of Energy, Mines and Resources (Mr. Lalonde). It follows right in with his arrogant approach to things, particularly energy.
As the Minister of Finance is so fond of repeating ad nauseam, when it suits him, that we should divorce ourselves from what is happening in other countries, 1 wish to say I am not particularly proud of the stance my country has taken in foreign affairs for the last number of years. 1 am not particularly proud of our policies regarding certain countries with which 1 have very little affinity as far as their current governments are concerned as distinct from their people. I am not too proud of the high regard in which they hold the Prime Minister. I would not mind seeing him respected, but I would like to see the kind of apparent affection which is held for him in communist countries being reciprocated in countries which 1 feel are closer to our own aspirations, aims, and way of life.
I felt a twinge when 1 read the latest issue of Maclean's magazine and the little article by Peter Niesewand on page 25 in which he detailed the visit of the Prime Minister of the Soviet Union, Mr. Leonid Brezhnev. It reads as follows:
The abiding impression left by the Soviet leader was that of an old, tired, sick man, with not long to live. But he did show the occasional small spark. At the ceremonial arrival, members of the diplomatic corps were introduced to him. He shook their hands in silence until he was presented to Canadian High Commissioner John Hadwcn. Bre/hncv's eyes lit up. "Trudeau!" he said.
That is nice, but 1 just wish that the eyes of the President of the United States would light up when he meets the Prime Minister. Perhaps they will when they meet, but 1 remember what President Nixon once said. I suspect that perhaps that is a more accurate impression of the way that he is still regarded by our traditional ally friends to the south. I should like to see a little change in our foreign policy alignment. 1 am not too happy to see Michael Manley, who systematically drove his own country into brankruptcy, applying-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but his allotted time has expired.
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David Michael Collenette: Mr. Speaker, I had not intended to participate in this debate, but I feel compelled to put a few personal thoughts on the record in view of some of the speeches 1 have heard from the other side.
1 think the intentions were pure on the part of the hon. member for Oshawa (Mr. Broadbent) and the Right Hon. Leader of the Opposition (Mr. Clark) to have a debate about Canada's economic problems. As members will know, having heard last night's speech of the Deputy Prime Minister and Minister of Finance (Mr. MacEachen), we do not deny that there are economic problems in the country. If one reads Hansard when the report is out on Monday after the fantastic job, performed by the Hansard reporters and the translation group, one will see that there have been serious economic discussions in this debate. 1 agree with the sentiments of the hon. member for Perth (Mr. Jarvis) that there has been excellent debate on all sides. But, surrounding that, and interwoven with legitimate debate, an element of pure partisanship has infiltrated many of the speeches coming from the other side, especially from my friends on the Conservative benches.
During question period yesterday, the Minister of Finance talked about the Tory blues and the bitterness on the other side. We all get riled up, and 1 have been accused of being unduly partisan. 1 do not like to be unduly partisan, but I regret the behaviour we saw last night in the debate by the Right Hon. Leader of the Opposition. He did not have the courtesy to sit down and listen to the Minister of Finance. He did not even make profound comments; he made very nasty, petty comments. I think that leaves a lot to be desired for the leader of any party in the country. 1 hope the Conservatives in the country will take that into consideration next February when they review the leadership of their party.


William James Kempling: What a stupid statement! It could only come from you.


David Michael Collenette: I knew once I got on my feet that I would liven up this debate. My good friend, the Conservative whip, and I have an ongoing relationship of shouting back and forth. Without being overly partisan, I believe that we should look behind some of the so-called logic we have seen in the speeches last night, this morning, and this afternoon.
1 should like to deal with the substance of the motion and the whole question of the economy. Of course high interest rates are troubling us. One option outlined by the Minister of Finance was to allow the Canadian dollar to slide even further. 1 think the Minister of Finance and the governor of the Bank of Canada have done excellent jobs in trying to steer that balance, to ensure that the dollar does not fall, to ensure that we do not open up the floodgates to rampant inflation, and also to ensure that high interest rates do not get out of control.
I think the Minister of Finance made a very salient point in criticizing the interest rate policies of the United States in the last few weeks. 1 do not know whether it is because there is a lame duck administration in the United States. Perhaps the President of the United States is not undertaking the usual
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direction as he should in the period leading up to January 20. Perhaps Mr. Miller, or whoever is running the Federal Reserve Board, is running the whole country. I would submit that the high interest rate policies now being pursued by the United States are very likely, or could very likely if they continue, plunge the whole world economy into a severe recession, perhaps even a depression.
Last night the Minister of Finance outlined that Canada cannot divorce itself from the economic realities in the United States. In a sense, we are a passenger in that vehicle, the vehicle being the United States, in its ride to high interest rates. There is a school of economics in the United States, the Monetary school, or the school of Mr. Friedman, the Chicago school, which believes this is what we need. Some of the things I have heard in speeches from members opposite remind me of comments 1 have heard in my constituency made by my opponents from time to time. They say that what this country needs is a good shake-out, a good recession, a good depression and we will get back to honest, old-fashioned values.
If you look back over the last 50 years, perhaps even longer, you will see that the Conservative party philosophy is based on the assumption that the state should not intervene in the economy, that the people should tough it out. There is no compassion, in the policies of that party. We saw it in the depression years of the 1930s, and, as a result, the Conservative party has paid for that over the last 50 years by not being in power in this country. They are seen as the party which does not care.
Quite frankly, I find it personally offensive that the Leader of the Opposition lectured us yesterday on the effects of our economic policies on lower-income Canadians, when his party has an historic record of putting it quite strongly to the disadvantaged groups of Canadians. These groups are comprised of the lower-income people, pensioners and so on. One has only to look at the budget which was presented a year ago by the former minister of finance to see how Conservative economic policies take their greatest toll against those who can least afford to pay their way in society and those who can least protect themselves-the poor, the disadvantaged, the minorities, and pensioners.
I know the Leader of the Opposition has an affinity for the policies of Mrs. Margaret Thatcher in England. 1 am thankful that the election in May, 1979, did not produce a majority government for the other side, because people in Great Britain right now would just have loved to have had the opportunity that we had last December in voting out the government when its old-fashioned, right wing economic policy is shown to fail. Unfortunately, the people in Great Britain do not have the option which we had last year in kicking out the goverment. As a result, that great country-the country where I was born, incidentally-will go through probably the worst crisis it has ever had since the twenties, the general strike of 1926, and the depression. My parents and grandparents went through that and it was Tory governments which were in power at that time

December 19, 1980
Economic Conditions
under Mr. Baldwin, which forced the people of Great Britain into dire economic straits. We see this happening now in Great Britain. I am only bringing it up because I am very glad and relieved that Canadian people had a chance to pronounce upon the economic policies of the former government, unlike the people of Great Britain, who now must basically put up with Mrs. Thatcher for the next few years.
There are a few things which I would really like to deal with in a general way. It is all tied in with the economic debate and the energy debate. I think all of us on this side, and my colleague from Willowdale, put it very succinctly this morning, are concerned with what is happening in western Canada. We are concerned about the so-called alienation and the so-called discontent. I think all of us on this side of Elouse are reasonable people. I think the government will be reasonable in any future negotiations it has with the other provinces.
But what 1 see happening, aside from the historical, legitimate grievances of western Canadians, and the historical antipathy to our party, some of it perhaps being warranted, from statements made or actions taken in the past, is that we have basically a philosophical debate, which is quite legitimate. That is what politics is all about in a democray. But, unfortunately, it is being masked by members on the other side by the cloth of separatist feelings in western Canada, of western alienation. I find it offensive.
When you listen to the argument which member on the other side advance against Bill C-48 and other aspects of Canadianizing our oil and gas industry, obviously it is their legitimate right to disagree with the philosophy of this party and this government, which is to ask for a mandate to increase Canadian ownership of our oil and gas industry, but some hon. members call this socialism. 1 do not call it that. When the Leader of the New Democratic Party (Mr. Broadbent) sets out in this country and talks about nationalizing every single oil company, that is socialism in its pure sense. All we are talking about, Mr. Speaker, is Canadianizing the industry.
What I find offensive is that the members opposite in the Tory party, many of them western Canadians, are playing up the historical grievances, in effect whipping up this spirit, this sentiment, this fear. What they are really doing is using western alienation and western frustrations as a vehicle for their own philosophical argument against the government for its Canadianization policy toward the oil industry, and its policy to keep lower energy prices.
It is true that Sheik Yamani, for example, has talked about an $80 per barrel price for oil this time next year. Members on the other side feel we, in this country, should move in a knee-jerk way to every single increase by OPEC when we have the security of supply here, where we can perhaps cushion the blows which Canadians might otherwise have had to suffer because of the adverse economic situations brought on by higher oil and gas prices.


An hon. Member:: Come on!


David Michael Collenette: I see members are heckling me over there. One thing that worries me is that a lot of them are so
exacerbated by the political debate and their own rhetoric that they are denying us the democratic right which they claim we are only trying to tear down. 1 find it quite ironic, and it is quite a tale being told here this afternoon, that we have a great element of democracy, since we have had this emergency debate requested by the two opposition parties. It has gone on all night and is now into the twentieth hour-twenty-second hour-whatever it is. I do not know when it will end, perhaps tomorrow or Sunday. But this is a great exercise in democracy. Every single member of this Elouse has the right to stand here and propound and talk about the economic and national problems which concern them.
I find it a bit ironic-supreme irony, as some people would say-that members opposite who object to our constitutional and economic policies have heckled me, as the Leader of the Opposition heckled the Minister of Finance last night through most of our speeches. That is not what democracy is all about. We have legitimate views to express. I have tried to be fair and mild this afternoon, but I think the game which is being played by members in the Conservative party, especially those from western Canada, is a very dangerous game. It is an extremely dangerous game. They are trying to turn people in the west against all other forms of political expression, whether it be through the NDP or the Liberals.
I have had an ongoing dialogue with the hon. member from Edmonton West (Mr. Lambert), who is a former Speaker of this House. He sent me some editorials from the Edmonton Journal criticizing the policies of our government. 1 wrote back to him and asked him to look at editorials in The Calgary Herald. I told him those editorials had been a bit more objective. They did not agree with us lock, stock and barrel, but they were somewhat objective and basically favourable to the constitutional proposals. And he is trying to argue the opposite. This has taken place in our personal correspondence which we have been exchanging.
What offends me about some of the statements made by people on the other side is that they will brook no opposition. They are so self-righteous that they believe we in the government are destroying the country. Really, what we are doing is asking Canadians to make some basic choices. We are asking them to make the basic choice as to the kind of confederation they want to live in, whether they want to live in a confederation of ten semi-autonomous loosely knit states where certain provinces have the ability to use their economic powers to the detriment of the rest of the country, or whether they want to live in a country where there is an overriding national interest which recognizes the rights of all Canadians to share in each other's fortune and misfortune.
That is the kind of country for which we have been arguing over the past couple of years, and that is what underlines our constitutional reform proposal. We feel strongly that the provinces, particularly those in the west, must have the lion's share of the wealth derived from oil and gas. That is right, because it
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is in the British North America Act that the provinces do own these resources.
There must be an element of sharing. We cannot permit one economy or one region of the country to become so powerful that in effect it becomes a countervailing power against the federal government which represents the national interest. That is really what the debate is about. 1 am sorry my friends opposite are not willing to listen to the arguments that have been put forward.
There are legitimate fears in western Canada over the issue of resource ownership. I should say that in the constitutional resolution now before the committee, the government did not alter in any way the provisions of the existing BNA Act as they deal with resources. In fact the Prime Minister, along with the government, has agreed to suggestions made by the NDP which, while they do not agree with us all the time, are at least working to improve the constitutional package. The government has agreed to make certain changes so that the security of resources is guaranteed to the provinces, in particular to those in the west, in any new constitution.
There are also some changes on indirect taxation, and the entrenchment of that principle as I understand it. That will be an improvement. If members opposite want some other kind of guarantees that resource ownership will always accrue to the provinces, the government would be amenable. I have not heard anything contrary on our side. I have not heard anything to suggest that the federal Parliament wants to take over the resources of the provinces.
There is a question about offshore resources but that is a legitimate constitutional question. The problem is that members opposite have set up their own straw men and are trying to knock them down all over the country. Their arguments are straw men. You can always make your own supposition, which may not be true, and go around the country trying to defend it, or you can attribute arguments to your opponent and then go around the country trying to knock down your opponent's argument when, in reality, the opponent has not made those arguments.
I believe there has been a very great distortion. The debate recently, both inside and outside the House, has been unCanadian. We have the forum of the House of Commons within which we can express our views. I have drawn repeated attention to the hysterical reaction of some of the members opposite. There is one view over there and there is another view here, and that is what democracy is all about. In the election of last February, Canadians chose to return to office a party which, over the years, has given good government, efficient government, and compassionate government. It is a government which has been tolerant of all regions and all points of view in this country.
The electorate rejected a government which sought by its economic policies and its budget to squeeze the small individual in society and to hurt groups which are least able to defend themselves. That is democracy. 1 agree with what the Minister of Finance said here last night. There is an element of bitterness in the points of view being expressed by members of the
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official opposition which transcends their legitimate concern over the legitimate economic problems we face in Canada today.
1 see that my time has expired. I have made these comments in the best of faith, and I am only sorry that members of the official opposition cannot accept that.
Mir. Gauthier: Mr. Speaker, 1 rise on a point of order to ask if the House would give its consent to revert to presenting reports of standing and special committees. It has to do with Bill C-42.


The Acting Speaker (Mr. Ethier):: In order to do that, we would need the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.




[Stage Direction]
Second report of Standing Committee on Miscellaneous Estimates-Mr. Gauthier.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

[Stage Direction]
The House resumed consideration of the motion of Mr. Broadbent:
That this House do now adjourn.
Mr. Scott Fennell (Ontario):: Mr. Speaker, for several weeks 1 have looked forward to speaking on the crisis which faces the economy of this country and which has been brought on by the socialist rhetoric we just heard from the Parliamentary Secretary to the President of the Privy Council (Mr. Collenette). I am from Ontario and I am ashamed that that gentleman is from the same province. 1 am ashamed of many of the politicians from Ontario. They are trying to retain the west in a slave situation as they have always done. They could charge them what they would.
We have heard various descriptions of the government over the last 23 hours in this chamber, but one which 1 heard from the hon. member for Annapolis Valley-Hants (Mr. Nowlan)

December 19, 1980
Economic Conditions
about the nursery rhyme "Wynken, Blynken and Nod" appealed to me. I think that the present government is creating a new nursery story, "Quacky Mac, Miserable Marc and their PET". Fortunately, citizens of this country have benefited from the great resources with which they are blessed. Since our inception we have enjoyed the plentiful production of agriculture. We have had great woods and forests to produce lumber and pulp and paper. We have had a plentiful supply of water for hydro power and for other purposes. Our minerals are second to none and our hydrocarbons are now becoming of great importance.
Because of this, we have not had to become an industrial nation. We have not had to keep up to the requirements of other members of OECD. The Liberal government over the past 12 years has shunned the potential of this country to become a major industrial nation. Instead, it has concentrated on destroying the Canadian work ethic and the Canadian wish to save money and invest in this country, and this has created a disastrous condition.
The youth of this country will be burdened for the unforeseeable future with double-digit inflation, a valueless dollar, and a debt burden beyond the wildest dreams of Lord Keynes. This same government has done nothing to develop the industrial base of the country. The same government is determined to destroy the only base we have, which is our natural resources. It has removed the opportunity of self-sufficiency by 1990 with their program of nationalism for the oil industry.
This program does not affect the Seven Sisters or the large multinationals. They do not have to worry because they know it is for a period of time. They have oil in the ground. They have the wealth there. They do not need to take it out now because, if they leave it in the ground, it will be brought out later at a much higher price. Some day soon the Canadian public will wake up cold. Some morning they will decide that it is time to turf out the Liberal government which has been disastrous for this country over the last 12 years.
We must keep in mind why the multinationals are not terribly concerned with the government's energy program. Their warehousing costs on their inventory are zero which means no increased price. What I am concerned about is what it does to our junior and senior Canadian oil development companies. They keep talking about the 10 per cent and 35 per cent kickbacks. That is fine if there is any cash flow for a kickback. But the government must remember those companies have to come up with 65 per cent of the money. If the Canadian investment community is not prepared to bring that money in, then they must depend on a cash flow which has been totally eroded by provincial taxes, and now excessive federal tax.
This group of Canadian companies, fortunately for many Canadians shareholders, was aware of this situation last spring as soon as the election came. They started raising funds in Canada from Canadians to subsidize their subsidiaries in the United States. Those corporations which started in the last
year are successful in the United States because they have freedom to make money and to create a cash flow which will in turn help the United States to become self-sufficient more quickly than we ever could.
The only money left in Canada from the oil producing companies is the little bit left over after governments have taken their big slice. Why would an oil company work in this climate? In Canada they are lucky to get $6.20 net per barrel. In England, which has been related to us as an example, their take is said to be 51 per cent. A junior Canadian oil company would much rather have 49 per cent of a $40 barrel than 33 per cent of a $17 barrel.
In the U.S. they keep 73 per cent of the $40 barrel. The Prime Minister (Mr. Trudeau) many times in the past week or two has mentioned that the rigs are not moving out of Canada. Maybe they are not right now. Maybe this side has overstated how many rigs are moving out at present. But many of the rigs, prior to this budget, were committed to contract. They cannot close down when they have gone down 1,000 feet and have 14,000 feet to go. These companies were committed to a contract. The effect of that budget has not hit us yet. We have not felt it to the degree we will by the end of 1981.
The Minister of Energy, Mines and Resources (Mr. Lalonde) refers to all of the money which will be available for investment in Canada. The minister should go to Dallas and Houston and start talking to some of the bankers down there. Many of those banks, even with the new Bank Act, are not setting up in Canada. They do not have to. Canadians have gone to them. There is not point in them setting up in Canada because the money is flowing down there. That is another factor which is affecting the devalued price of our dollar.
I wish the government would find out where our capital is going and what is happening to it. The wealth of this country is fleeing. It is not fleeing in the hundreds, thousands or millions, it is fleeing in the billions. Every week we can see in magazines new buildings being put up in every city throughout the United States, exemplary of where our money is going.
1 believe it is time for the government to realize the errors of its ways. It is not too late now; it may be later. I realize that the Minister of Energy, Mines and Resources is intractable. He will not change. But I plead with the Prime Minister of the country to make a change and get somebody who knows something about the conditions of the oil business in this country.
The billions of dollars 1 refer to are fleeing because of the free spending, bureaucratic-riddled, Liberal government with socialistic views. If you want an eyeful, read the government's working paper on capital gains. Its proposals will again erode the capital base in Canada.
I plead with the Minister of Energy, Mines and Resources, whoever it may be, to take the tax off those low-income people who have to heat their homes and put it on transportation. If that were done, that would reduce the turnover period of a car from ten years back to seven years. General Motors is not selling small fuel-efficiency cars today. General Motors is
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selling all its big Chevs and Oldsmobile. If the tax were put on transportation, people would stop buying big cars. Things would be more efficient because more people would travel in a car together at the same time.
Now we come to the question of interest rates, which is a very interesting situation. People on both sides of the House disagree on what we should do. There is one scenario that has never been approached nor tested. We are living in a rollercoaster age of interest rates. It forces many Canadians, both individuals and corporate structures, into bankruptcy. I give you an example; the CMHC and the AHOP program. The government started this program. Houses were sold. People could not afford them nor could they keep them up. These houses come back on the market and are sold at lower prices than they were in the first place. Prospective buyers for these houses which have come on the market will be able, as of January 10, to get a 2 per cent lower mortgage rate than they originally had when these houses were sold. If the government is going to give something to some people, it must do it for all. I say to the government, let us not be selective just so as to unload an asset which it is unable to sell.
1 want to speak about this roller-coaster ride. Instead of the interest rates going up and down and knocking people and businesses out of business, what about letting our dollar be a roller coaster? Does the government realize that, if that happens, people in Canada would stop buying large ticket items? They could not afford them. A $25,000 Cadillac would become a $50,000 Cadillac. People would think twice. This would encourage Canadians to create more, and so help our industrial base. It would also protect those people with homes. It would enable them to keep their homes. It would protect industry and assist industry to become bigger and better. I say we should try that now.
We have tried everything else and we have failed with everything else. We would go up and we would go down. In March we could be up and in August we could be down. In November we could be up, but when would we be down again? My guess is that this time the government will leave the high interest rate on two months instead of one month and then it will go zapping down again.
It is the low-income Canadian about whom I am concerned. It is also the middle-income Canadian who has been hammered by every government we have in the country, municipal, regional, provincial, federal-you name it, they all have their hands in the middle-income pocket. It is time we got out of the pockets of the middle-income people. It is time we gave them a break with their mortgages so these people can own their own homes. It is time we gave them mortgage deductibility as we had proposed. It is time to give Canadians a break, not only the low income Canadians but others as well.
I happen to have given my colleagues an article written by Louis Ruckeyser. It was published in the Houston Chronicle. I just want to make the record clear. He did not say "Thank you Canada". He said, "Thank you again Canada". Thank you for last year giving our hostages back. Thank you this year for bringing billions of dollars into our country".
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Many people have spoken in this debate, and I can go on and on. It is not hard to get any new material because we know the disaster which is existing today in Canada's economy. We know what is happening to industry in Ontario. We know what is happening to the drilling operations out west. We know that it is hitting the service industry. I can go on with what everyone else has said, but I just want to conclude by saying that we are heading on a one-way ride to hell in a handcart because we will not have the fuels to get us there by conventional means.


Mr. Neil Young (Beaches):: Mr. Speaker, I listened rather carefully to the remarks of the Parliamentary Secretary to the President of the Privy Council (Mr. Collenette), especially his comments or view that he thought that British people would love the opportunity to turf out the Thatcher government. I would like to assure the hon. member there are an increasing number of Canadians who would love the opportunity to turf out this government, based on its economic policies. I would like to substantiate that by reading a few lines of letters I have received from constituents. I assume other members in this House can probably repeat much the same kind of comments that they have been receiving.
The first is from an unemployed Canadian who states, "It seems to me that the Trudeau government doesn't care about Canadians being out of work". The next is from a senior citizen, "Look into the high price of milk and bread." Another says, "I am one of the victims of a recent lay-off from a foreign-owned company. 1 would suggest more measures be introduced for the purpose of protecting such employees. I've worked for this company for six years, but still I have to go."
Another constituent wrote, "Conditions in this country stink. Big companies never pay any taxes-that's why the working people are so poor. Look at the price of food. Who's making the big money? The companies come to this country and bleed it dry. They do nothing for veterans."
The last one is, "The Canadian economy has gone to hell." I think an increasing number of Canadians would agree with those sentiments.
I am glad that finally the members of this House have been given an opportunity to discuss the economic crisis we are faced with in Canada today. It is a crisis that has been in existence for some period of time and this discussion finally came about as a result of yesterday's announcement that the increase in the cost of living for the month of November was at its highest since March of 1975, and yesterday's increase in interest rates broke through all previous high records.
To date the government has not presented one proposal to deal with this crisis, to present proposals that would alleviate the hardships that the government's fiscal policies are inflicting on the senior citizens of our country and on others on fixed incomes, on small businesses in Canada which are being pushed to the wall by the government's interest rate policies, on those Canadians who are faced with mortgages coming up

December 19, 1980
Economic Conditions
for renewal, or those Canadians who had dreamed of buying a home and whose dream will not be realized.
In addition to those problems we also have the economic and social costs of having over a million Canadians unemployed, and that figure is growing at a frightening rate every day.
The response of the government to date has been to blame this crisis on everyone else and it has refused to accept the responsibility which is its to deal with those problems. However, the government was not so apparently unconcerned when its members sat as the official opposition last year, in 1979.
The Prime Minister (Mr. Trudeau), then leader of the opposition, on October 29, as reported in Hansard, asked this question of the then prime minister:
Since, in the view of the government, we have to follow American interest rates up to I 1 per cent, 12 per cent, 13 per cent, 14 per cent, at what rate do we begin to look at alternatives? I just remind the Prime Minister that at his press conference on Friday he said, "Given the situation that we face in the economy now, we literally have no alternative except alternatives that will make the situation worse in times to come." At what point will the government look at these alternatives, rather than following the American interest rate up to 13 per cent, 14 per cent and God knows how high?
Later in the same day the present Minister of Industry, Trade and Commerce (Mr. Gray) had this to say:
This evening I want to speak particularly about interest rates because they are not in fact something that is remote from the daily lives of Canadians. Interest rates are costs and costs are part of prices. They affect everything done by Canadians and their families. The present record level of interest rates which is supported by Conservative policy cuts back the ability of Canadians to buy goods and services of all kinds, such as cars, homes, food and clothing, everything people need. Those high interest rates cut back on the ability of factories and businesses generally to expand, to create more production and jobs.
These high interest rates limit the ability of business, especially small business, simply to operate on basic non-inflationary levels. Therefore, these high interest rates mean losses of production and jobs now and over the coming winter months. The Conservative government has been saying that these high interest rates are needed to fight inflation but they in themselves drive up costs and add to inflation.
The Liberal party, which at least pretends to be the champion of working people while in opposition, is obviously no such champion once it forms the government.
This government agreed a year ago with the arguments presented by members of my party on the effects of high interest rate policies. I can also quote many such other statements made by government members when they sat in opposition and were then horrified at our unemployment levels. Nowhere is that problem more apparent than in the number of young people we have in Canada who are unemployed and the unacceptably high levels of unemployment among women in our country.
The steady deterioration of the position of women in the labour force is a cause for grave concern. The Minister of Employment and Immigration (Mr. Axworthy) gave what has become his standard reply, in response to my question on November 5 regarding employment training opportunities for women. Superficial incentives, ineffective programs, and yet more waiting for the results of yet more studies was his reply.
The position of women in the labour force has been studied to death and, if the figures change at all, it is only to show that
the situation is getting worse. Women continue to be overrepresented in the unemployment figures and underrepresented in high ranking, high paying positions.
Women experience higher unemployment than men in every industry except construction. In 1979 the unemployment rate for married women was 95 per cent higher than the rate for married men. Re-entry women comprised the largest component of the female unemployed. Most of these women who are unemployed could benefit from training programs which would provide them with skills to ensure them a good paying job with opportunities for advancement.
The problem is that those women who do find work have an eight in ten chance of winding up in a traditional occupation, such as clerical, sales, technical or service. Even there, with over one and a half million more women working now than ten years ago, the distribution of women in the work force has remained the same. There are simply more women doing the same types of jobs.
As a result of the segregation of women into low-paying, low-skilled, dead-end jobs, the wage gap continues to increase. Today, for every dollar a man earns, a woman earns 58 cents.
Study after study simply reconfirms those appalling facts, and study after study shows that the situation is getting worse, not better. The Minister of Employment and Immigration has both the responsibility and the resources to guarantee women an equal position in the labour force. Is his lack of concrete action an indication of a lack of commitment? 1 rather suspect that to be the case.
A recent report by the Advisory Council on the Status of Women which studied federal employment programs showed that these programs consistently favoured men at the expense of women, that women were underrepresented in all direct job-creation programs except two programs for youth and that women received lower wages than men under government wage-subsidy programs. The minister's recent announcement of more programs will just perpetuate the inequity which already exists. We do not need more money spent to foster more inequality. We need adequate funding for well-thought-out programs which will achieve the proper objective: good paying, long-term jobs for women.
The employment training programs which currently exist need reassessment as well. The programs are not concluding with the desired results. In 1978-79 only 33 per cent of all full-time trainees in the institutional programs were women. Only 29 per cent of all industrial trainees were women. More than 50 per cent of these women were being trained for stenographic, typing, and other clerical jobs. It is no small irony that women begin their occupational segregation in Canada Manpower employment training programs.
The Minister of Employment and Immigration has announced increased incentives to employers to hire women in non-traditional jobs. In 1978, 75 per cent of those subsidies went to small, non-union firms with 20 or fewer employees. By channelling female trainees into small firms the trainees run
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the risk of becoming a cheap source of labour and vulnerable to lay-offs and unemployment. In 1975, three months after women completed their training in a non-traditional occupation, it was found that they earned $67 less than men with identical characteristics in similar occupations. Because the department only does a limited three-month follow-up of its trainees, it is difficult to determine if women are retained as permanent employees in any significant numbers.
Another problem with the subsidy program is that it is limited to areas where women's participation is 10 per cent or less. This narrow definition of non-traditional jobs increases the likelihood of failure by women since it places huge responsibilities on a few women to prove success, and guarantees that they will experience tremendous isolation.
The affirmative action program the minister keeps offering as a panacea is short-sighted and superficial. First of all, it has been implemented in only three of the approximately 100 federal departments and agencies. Second, a close look at the program shows that in reality what has been implemented is really not an affirmative action program but just another study of the discrimination that women in these three departments face in relation to hiring and promotion. If the federal government is seriously committed to equality for women in the labour force, it should implement a hard affirmative action policy in the federal public service to set an example for private industry. Further, it should use the clout it has in $11 billion worth of business in contracts purchased from private companies. Contract compliance has been highly successful in the United States. Under this policy initiative, women and minorities have found that, for the first time, they have had access to jobs and training previously inaccessible to them.
"Limited success", "a dismal record", and "far too little progress" is how the minister himself recently described the employment training programs for women. I hope the minister will, in the immediate future, use the vast resources available to him to change the deplorable situation women in the labour force now find themselves facing.


Flora Isabel MacDonald: Mr. Speaker, this debate was ordered on the basis that there is a serious economic crisis in the country requiring, as Standing Order 26 points out, urgent consideration. Those words "crisis" and "urgent consideration", which were used by Madam Speaker in granting this debate have, of course, been pooh-poohed and rejected outright by the Minister of Finance (Mr. MacEachen). Yet, if anything is indicative of the fact that hon. members in the opposition parties consider that the economic situation in Canada today is of crisis proportions, surely that indicator is this debate in which we are engaged, because it is unprecedented, at least in recent years. I probably would have to check with the hon. member for Winnipeg North Centre (Mr. Knowles) to see just how far back it was that we had a continuous debate of this length, but I have a feeling it is well back into the early part of the century.
What we have is a debate which has been going on for some 19 to 20 hours, and nothing which has transpired in this
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country in the last ten, 15 or 20 years has triggered a continuous debate of this nature.
When we look at the events which did transpire here in Canada in those years, and when we think of depressions, recessions, international conflicts and internal tensions, and realize that none of them prompted a debate of this nature, we come to appreciate the seriousness and the gravity of the economic situation which triggered this discussion session.
Members of the Conservative party and of the New Democratic Party are concerned, and deeply concerned, about the effects of galloping inflation, the devalued dollar we have to contend with, high interest rates and escalating costs of food, home heating fuels, and housing. The prices of all these things are going up. These costs affect ordinary Canadians up and down the country, especially Canadians on lower incomes, and particularly the one million unemployed. Yes, we are concerned about it. The tragedy is that members of Parliament on the government benches, whether they happen to be backbenchers or ministers of the Crown, those people in the House who really could take some action to alleviate this situation, do not seem to be the least bit concerned about it. Liberal member after Liberal member has risen in this debate to defend the government's economic policies which, I say, can only be described as hard-hearted, cruel, and insensitive. That is what they are at this point.
A Liberal member opposite shakes his head. 1 realize that he does not feel that way. None of the Liberal members do, and that is the difficulty. The problem is that the government is totally insensitive to the economic woes of the country today. I suppose the more charitable description which could be applied to the point of view of hon. members opposite is that they are misguided, but this is not a time when the country can put up with a government which has views which are misguided.
At a time like this, with the highest interest rates in the country's history and with one of the highest year-over-year increases in the cost of living, the Minister of Finance is floundering around like a fish out of water. He will castigate anyone in sight for the ills of the country, anyone, that is, but the Liberal government, which is the author of our misfortunes. He and his colleagues, for instance, blame the government of the United States, and after what the minister has had to say about the policies of our neighbours to the south, is it any wonder that the Prime Minister (Mr. Trudeau) is reluctant to accept the invitation of President-elect Reagan to go to Washington? Is it any wonder? Yes, the Minister of Finance will blame the Americans, he will blame the international situation, he will blame the provinces, and he will blame the oil and gas industry. I suppose the next thing he will do is blame the weather. He will try to emulate one of his predecessor Liberal ministers of finance.


Elmer MacIntosh MacKay: John Turner.


Flora Isabel MacDonald: The minister's only policy, it seems to me, in the absence of government policy, is to go on the offensive and to try to find a scapegoat. Well, that is simply

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not good enough for a government which has been in power, this time for ten months, and previous to that for ten to 15 years without coming up with a responsible set of economic policies to offer to the Canadian public.
There are things the Canadian government can do. Ministers cannot just sit there, throw up their hands and say, "It is not our business, it is all because of what the Americans are doing, or what the U.S. government is doing." They owe the Canadian public more than that, and there are things that the government can be doing.
1 want to mention just a couple of areas where the government should be moving now before it causes any more difficulty, any more hardship, and any more suffering to thousands of Canadians up and down this land, where it could reverse policies that have already been taken, or where it could initiate new policies which could perhaps be helpful. The two areas I want to mention are indexing and energy policy. I realize that they have been touched on before, but 1 want to mention them again because the Minister of Finance has made a great to-do in the last few days about the fact that those on fixed incomes, such as pensioners, have their monthly cheques indexed to the increases in the cost of living. This indexing, he protests, should be able to take care of all their concerns, all their additional costs. He says they should not have any worries. Well, he knows how false that is and he knows that it does not meet the situation.
What the minister cannot or will not understand is that indexing for pensioners is based on the cost increases of all items right across the board, many of which are considered luxury items and certainly non-essential items to people in the low-income bracket. The cost of these non-essential items does not rise as fast as the necessities of life. The difference between the two categories is quite marked. The cost of non-essentials goes up at a far less steeply increased rate than that of essentials. But since the non-essential goods and services play just as much a part in measuring the monthly increase in the cost of living, they therefore skewer the cost of living index and the rate at which it is applied to make it lower than it otherwise would be. Otherwise you would just be measuring the cost of essentials or necessary goods. This means that for those who spend the greater part of their incomes on essentials, on food, clothing and shelter, the cost of living increase is lower than it actually should be, and automatically, of course, so is the indexed additional payment that they receive.
Let me explain in specific detail what 1 mean so that even the Minister of Finance will understand. 1 take as an example a woman aged between 60 and 65 who received the spouse's allowance. She is widowed and unable to find work in the labour force because of her age. She has no other income than her monthly government cheque of some $350, and she has no way of supplementing that. There are many like her in Canada today. Her last monthly increase was $9.83 a month, based on a year-to-year increase of approximately 10 per cent in the
cost of living. But her living costs are centered on items which are escalating much more rapidly than 10 per cent a year.
She spends most of her limited income on food, clothing, and shelter. But the costs of food, clothing and shelter are escalating much more rapidly than 10 per cent a year, or even the 11.2 per cent figure which was reported yesterday. Food is going up at 15 per cent, likely to increase by 20 per cent next year. Home heating fuel is up by 26.9 per cent, clothing by 11 per cent, transportation, if she happens to own a car, is going up by 23 per cent. The $9.83 increase which she gets based on a 10 per cent cost of living increase, does not reflect the 15 per cent increase in her cost of food, the 26.9 per cent increase in her home heating costs, or the increase in her transportation costs. Yet all of her expenditure goes on these items.
Surely the minister can understand that all persons in this category cannot continue to pay the much higher prices for food, clothing, shelter and transportation, if the monthly adjustment they receive to offset inflation is not geared to the actual increases in the costs of the items on which they must spend their money if they are to survive in this economic crisis. Surely the government can instruct Statistics Canada to work out an index for the monthly adjustment to the incomes of pensioners, disabled, and those in the lower-income brackets, which will truly reflect their expenditures, which will make it more equitable for them. To be sure, this is only a minimal step, but it is one the minister could take to make the plight of those who are in the lower-income brackets, the plight of those who are most in need, a bit easier. That is one step that the government could take to ease the economic crisis for a great many people across this country today.
The second area that 1 want to mention has to do with the government's energy policy. In the budget, and in recent bills introduced in the House, we have been presented with an over-all energy program which daily has the effect of making Canada more and more dependent on increasing the importation of expensive offshore oil. Earlier this week, as we saw, the price of offshore oil to Canada went up by 10 per cent, by anywhere from $2 to $4 a barrel for imported crude. The OPEC countries, on which we are depending for some 420,000 barrels of oil a day, raised their selling price by 10 per cent and in so doing they added an additional half a billion dollars to Canada's international balance of payments deficit annually. There is no guarantee that that price of offshore oil will not go up again.
There is no guarantee that that price for oil, which has to be imported to eastern Canada if people in that part of the country are to have the fuel necessary to heat their homes and to drive their motor vehicles, will not take another jump, and. what is more, there is absolutely no sure and certain guarantee that these offshore oil supplies on which we are unfortunately dependent, will not be cut back and reduced at the whim of some other country. In other words, Canada is increasingly vulnerable to the vagaries of the world oil supply and world oil price, and will continue to be in that unhappy and unnecessary position so long as we do not have enough domestic production to supply our own oil needs.
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Day after day we are reminded of the lack of security in offshore oil, of the lack of stability in offshore prices. Day after day we are reminded of the critical need for oil self-sufficiency in Canada. The federal government's every effort should be directed to reducing our dependence on offshore oil in the face of the dangers and costly struggles in the international oil scene. It should be directing every effort to achieving oil self-sufficiency for the country, and yet what have we seen in recent weeks and months?
We have seen the introduction of a national energy program which has done more to impede Canadian oil self-sufficiency than to promote it. Canadians certainly do not want to become, increasingly, hostages to international oil suppliers, but that is the direction in which the government is torcing the country to go. All too sadly the proof is there for anyone who wants to look at it, even the government.
The tar sands developments are stalled, oil rigs are drifting away, money available for energy investment is becoming tighter and, as a result of all those matters, Canada's production of oil will decline. That is the point the government must face. With that decline in domestic production we become increasingly dependent upon unstable, expensive, and unreliable supplies of foreign oil with all of the international pressures which that entails.
Earlier this year I spoke on this subject in the House. At that time 1 accused the government of allowing us to drift into a greater dependency on offshore oil. Now, thanks to the national energy program, I know that the government is directing us into greater dependency. Earlier this year the minister responded to my remarks about the energy crisis by rehashing the election campaign. That is not what I invited him to do. I pleaded with him at that time to consider Canada's situation in the face of increasing volatility in the oil-rich Middle East. Since then we have seen the outbreak of hostilities between Iran and Iraq, a conflict which dramatizes the instability of that part of the world. Of course, it accentuates the vulnerability of those countries such as Canada which are dependent, to some extent, upon that part of the world for their precious oil supplies.
Since the outbreak of the Iran-Iraq conflict, we have seen a reduction of some four million barrels per day in the supply of oil to industrialized countries. That is the amount to date, but there is nothing to say that it will not be reduced further in the future. Neither can we be sure that the conflict will not spread to neighbouring oil-producing countries.
Saudi Arabia, from which we buy 45 per cent of our offshore oil supplies, jumped its price to $38.50 per barrel earlier this week. But that is not the end of it. Sheik Yamani, that great friend of the Prime Minister, made a prediction earlier this week that the price of oil could hit $50 American per barrel by next spring, which is $59 per barrel Canadian. He said that the price of oil to dependent countries such as Canada could go up to $59 per barrel by next spring if the Iran-lraq conflict continues. He went on to say the following:
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If the Gulf war carries on for much longer a mood of panic will develop on the markets, and if there are no reasonable reactions from western governments, then you'll get this price soon enough.
That is the situation into which the government's energy policy is directing us. At a time when the offshore price is going up, when offshore oil supplies are becoming much scarcer, when we have run through the surpluses because of the Iran-Iraq conflict, when we are more vulnerable to offshore situations, the government is making us more dependent upon foreign supplies rather than introducing policies which would increase domestic supplies. It is cutting back on our domestic supplies and forcing us to be hostages to international oil situations over which we have no control.
It has an effect for every single Canadian. I want to bring it down to the fact that these offshore international situations will reflect themselves in more unemployment in the country, higher cost for staples in the country, much greater difficulty for small businesses and many more bankruptcies. All of those things will happen.
I should like to finish my participation in this debate by reading a letter which I received from a I2-year-old child. I received this letter not long ago. It was written with all of a child's candour. It epitomizes the situation in which we find ourselves because of the lack of government policy. Her letter reads as follows:
My Dad has been unemployed for seven months. He has worked for a trust company for 18 years, and when the mortgage rates went up, he was assigned another job. Because of two health problems this seemed practically impossible, but still my Dad gave it a try, but couldn't handle these extra jobs. A little later he was laid off. . . We have gone without for these last few months and Mum says, "We're finding out who our real friends are". My Dad has taken a job delivering pizzas but still it isn't enough. We have gone through pain and suffering these past few months and nothing seems to go right . . . People can say they understand, but really they don't. You'll have to go through this to understand. If you can, please help us. I just decided to write. Well, thanks a lot for listening.
I ask the government to listen to what Canadians are saying all across the country, and it will learn soon enough that its policies must be changed.


Some hon. Members:: Hear, hear!


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


James Aloysius McGrath: Mr. Speaker, as I look at the clock I am reminded of the fact that this place has now been in continuous session for approximately 20 hours. I do not know if that is a record or not. Certainly it is a record over the 23-year period that I have been here.
It is interesting to reflect upon the fact that those hours are more time than we spent debating the constitution, the 59 government constitutional proposals, in the House. Also it is worth reflecting upon the fact that this special debate has been devoted almost exclusively, with one or two minor exceptions, to the economic situation in Canada today, to the economic crisis facing the country today.
I realize this means a particularly heavy burden on the support staff of this place, on the Hansard reporters and the

December 19, 1980
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people who keep this institution going, but though what we have to say during the course of this debate may not be widely reported, it is important to remember that this debate is a signal to all across the country that we are in fact in the midst of a very serious and a very grave economic crisis.
The hon. member for York East (Mr. Collenette) said during the course of his intervention in this debate that he looked upon the Conservative party as one which does not care, a party without compassion. I remember when the Die-fenbaker government was elected in 1957, and the erosion of the previous Liberal government which had started with the pipeline debate of 1956. I look back on that period and 1 think that the coup de grace to that government was a measure it introduced just prior to the election to provide for a $6 increase in the old age pension. At that time the old age pension was $40 per month. 1 believe, certainly in the part of the country from where 1 come, that that miserly, uncompassionate act did more to lose votes and lose seats for the Liberal party than anything else; yes, even the pipeline debate. It is not without significance, Mr. Speaker, that the very first act of the Diefenbaker government was to increase the basic old age pension, not from $40 to $46, but from $40 to $53.
I remember in 1979 when the Clark government was returned to this House, albeit in a minority position, that one of the first acts of that government was to extend the payment of the spouse's allowance. Indeed, 1 believe that was the first bill that we put through this House. 1 am reminded by my colleague from Kingston and the Islands (Miss MacDonald) of that, because she campaigned so vigorously in this House on behalf of widows and surviving spouses who had been treated so unjustly by the law that deprived them of the allowance six months after the death of their partner. We extended that allowance.
I do not think we have a monopoly on being compassionate; I think all hon. members of this House have a genuine feeling for the disadvantaged in this country, particularly those in their constituencies. It is difficult for the government backbenchers in a debate like this, because they cannot give voice or expression to that concern. 1 understand the reasons for that and 1 do not make any judgment upon it; all I say to them is that it is going to be difficult for them as they go back to their constituencies to face their constituents.
Let us recall the combination of events that brought about this debate, events which are alarming in their significance and potential consequences on the three groups that we should concern ourselves with in this country-the working poor, the unemployed and the old age pensioners, people on fixed incomes. 1 am reminded of a question that I put to the Prime Minister (Mr. Trudeau) just a week or so ago which was prompted by a statement which the Prime Minister made during his press conference two weeks ago. At that press conference the Prime Minister was asked to comment on the impact of inflation on low-income earners and the old age pensioners of this country. His reply, one which I think he
lived to regret, was that they should change their priorities. If they wanted to maintain the same level of food on their tables, then they should change their spending in other areas.
I put the case to the House, Mr. Speaker, then, and I do so again today, that if you look at the StatsCan document entitled "Urban Family Expenditure", you will find that one in five families in Canada today spend 82.6 per cent of their earnings on food, shelter and clothing. That includes, of course, people who are unemployed, the low-income earners and people on fixed incomes-the lowest income group in the country. That, of course, compares to the level of 62 per cent which has been established as the poverty line by Statistics Canada. In other words, the poverty line is reached by those who spend 62 per cent of their income on food, shelter and clothing.
We are getting used to hearing the government argue-this was referred to by my colleague from Kingston and the Islands-that we have indexing. The government says it has indexed old age pensions and family allowances, that it has authorized an increase in the guaranteed income supplement. That is true. We do have indexing. But it is also true to ask, is this indexing relative to real increases in the cost of living which relate to the low-income earners, the poor people and the old age pensioners of this country? 1 submit, Mr. Speaker, that when you consider the fact that indexing is based on the consumer price index, then the over-all picture is misleading, because low-income earners have to spend a disproportionate amount of their income on food, shelter and clothing. People in the one in five family group which I have outlined have no other alternative; they have virtually no disposable income.
Food has increased in cost this year by 15.2 per cent. This, of course, includes things like sirloin steak and so on. Even taking that into account, when you consider that the anticipated increase for next year as these interest rates and fuel oil price increases work their way into the system is 20 per cent, then you are looking at a 35 per cent increase in the price of food over a two-year period.
If you examine the situation with regard to fuel oil, you have a situation that becomes even more alarming. The same consumer price index that triggered this debate yesterday shows that fuel oil costs went up by 26.9 per cent. We know what is happening with OPEC. We know the consequences of the government's energy program. We also know from these two facts alone that we can anticipate even more increases in the cost of fuel oil next year.
I would like to relate that cost to what it means to a person who has to make do on a fixed income. I cannot relate it to the working poor because I do not have the figures, but I can certainly relate it to those who have to get by on old age assistance and the guaranteed income supplement. 1 did a check today, just a few hours ago, in my own constituency. 1 checked with a neighbourhood supermarket in a poor neighbourhood in St. John's, and this is what I found out. A quart of milk cost 95 cents. One dozen medium-sized eggs cost $1.49. A loaf of bread cost 85 cents. A pound of margarine cost 95 cents. A pound of round steak-that is the sort you
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have to stew in order to eat it because it is generally tough- cost $3.49. A gallon of fuel oil in the city of St. John's today costs 96 cents. That is reality.
During the last three months when old age pensions, OAS, the guaranteed income supplement and the family allowances were last indexed, there has been a sharp increase in costs over that three-month period. You can gather from that how irrelevant indexing actually is. For example, let us examine what we mean by indexing in real dollars and cents terms, in terms which relate to the price of a dozen eggs, or a pound of round steak, a pound of margarine, a loaf of bread or a gallon of home heating oil. Coincidentally, the Minister of National Health and Welfare (Miss Begin) issued a press release today announcing the amount of indexing to take effect in January. As of January, the basic old age assistance cheque will increase from $196.83 to $202.14, an increase of $5.31 over three months. What, Mr. Speaker, can you buy for $5.31? What difference does that amount make? It will not even buy a pound of sirloin steak or a ticket to a movie in St. John's.
Let us take the guaranteed income supplement. As of January it will go from $197.60 to $202.94, a grand increase of $5.34. That is the sheet anchor upon which the Minister of Finance (Mr. MacEachen) bases his compassionate feelings and his compassion for the poor of this country. What compassion? In January, the guaranteed income supplement for a married couple will increase from $152.36 to $156.47, for a total increase of $4.1 1. A couple will receive an increase in the guaranteed income supplement for the three months' indexing of $4.11.
Mr. Speaker, come back to that 95-cent quart of milk, that $1.49 dozen of eggs, that 85-cent loaf of bread, that 95-cent pound of margarine, that $3.49 per pound for round steak or the 96 cents for a gallon of fuel oil and you get the story. It has been said that Christmas is cruel to the lonely, that it is a difficult time for people who are alone. I would like to project that thinking just one step further and say that Christmas is a cruel time for the low-income earner of this country. Christmas is a cruel time for the working poor and a cruel time for the old age pensioner who is trying to get by on his pension and guaranteed income supplement. It is cruel because he sees around him all the material things of this seemingly affluent society. He sees them in the Christmas trappings of the marketplace at this time of the year. He sees them on his television set portrayed in glittering terms with slick advertising and selling techniques. Imagine the aggravation that person must feel as he sees the succulent butterball turkey presented on television knowing he must depend on the gift of a utility turkey from some charitable organization. Imagine also what such a person must feel when he sees the opulence of a typical middle-income family at Christmastime, then looks around at his family and realizes he cannot provide them with these things. That, to me, is a more cruel situation for him than if he were alone.
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That is what this debate is all about, Mr. Speaker. If we can reach the government opposite and signal to it a message that this debate reflects the concern of the country over what is happening to the economy, then perhaps it might consider bringing in a shelter allowance and some relief for those who have to buy fuel oils to heat their homes. If not, then the situation will only get worse.
I have referred to only one group of the three. I have referred only to the fixed income, old age pensioner. I have not touched on the working poor except in terms of their inability to be able to meet the demands of this consumer-oriented society in so far as their children are concerned. I have not touched on the unemployed, the third group. There are one million people unemployed in this country today. In official terms we can say 800,000, but in real terms it is over one million if one takes into account the hidden force of the unemployed who have stopped looking for jobs out of sheer frustration.
The Minister of Finance, raised in the tradition of Cape Breton and educated in the tradition of Monseigneur Coady, has said, "Well, we have indexed unemployment insurance". I would ask him to consider getting by on an unemployment insurance payment of $ 130, $ 140 or $ 150 a week. That is what it averages in Cape Breton or Newfoundland. Could he get by and feed a family on that with inflated prices for food and the anticipation that he will have to pay more for vegetables because of the interest rate and the steep increase in the cost of imported food?
If one thinks about the increases in the cost of fuel oil, one gets some idea of the frustration of the person who is unemployed through no fault of his own. One realizes how realistic it is to consider the social consequences of unemployment which often lead to suicide. I must feed eight people and I know what it is to go to the supermarket every week and fill up that basket. I see the change week after week. I come from a background where I was one of 15 children, so I have some idea of the struggles and the problems which low-income families face.
What 1 cannot conceive even with that experience is what unemployed persons must have to go through. Generally speaking, they are unskilled and they usually have large families. How in the name of God they manage to feed their families is beyond me. I sometimes believe we are isolated from reality in this place. The only chance to get to see the real world is when we go to our constituencies. I am convinced the government has isolated itself from reality.
I know how easy it is. From my brief experience as a cabinet minister I know, as do my colleagues, how quickly one becomes isolated from the real world, the world of the unemployed and the person who is trying to get by on old age assistance and the guaranteed income supplement, the world of the widow referred to by the hon. member for Kingston and the Islands and those who are trying to get by on a maximum income of $350 a month because they are unemployable and that is all the state will provide.

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That is the real world and the world we are trying to bring into this place by means of this debate. If we achieve that, then this whole exercise will have been worth while. A nation's culture and civilization is measured by its compassion for its disadvantaged people. We like to pride ourselves on having a good system of social security. We have a good basic system, but we tend to look upon it as the be-all and the end-all in itself.
Therein we make a great mistake and therein we do a great disservice to our fellow men and women who must get by on unemployment insurance, on fixed incomes or on the minimum
wage.
A man called me the other day from my constituency. He is a supervisor with a security firm, and he has five children in his household. He is being paid $3.40 an hour and he has to work a 44-hour week. He has to buy his own uniform. This is not an isolated case. How in the name of God can that person get by having to pay 96 cents for a gallon of fuel and having to pay the inflated prices for goods which I have just given? It is not that the farmers are gouging the country, because we know that farm incomes have gone down. We know what is happening to farm incomes and what impact that can have on food production in this country. We know of the consequences for further inflation of food prices. If this situation is not corrected, we will become more and more dependent on imported food and, as the economic crisis deepens, we will have to pay more and more.
1 believe we should keep this debate going because I think by doing that we will get the message across to the government and we will dramatically reflect the concern felt in this country. I, for one, have put in many hours on the constitution committee. I consider that a privilege, and I look forward to returning here on January 5. But I find it somewhat difficult to reconcile a three-week recess in the midst of this crisis. I am not unmindful of the fact that that was a factor which influenced the Chair in granting this special debate under Standing Order 26.
We are facing a serious crisis. It is a grave economic crisis, probably the worst this country has faced since the great depression. Somehow it does not seem right we should close down this institution. It seems to me we should come back here and stay so that we can hold the government accountable day by day. In that way perhaps we might be able to reach the government and get the message across. We might just be able to arouse that compassion which I know is in the heart of the Minister of Finance, and perhaps the government may even be moved to do something about this crisis.


Some hon. Members:: Hear, hear!


Mr. Paul E. McRae (Thunder Bay-Atikokan):: Mr. Speaker, I am pleased to be able to participate in the debate this afternoon, partly because I wish to present some of my own thoughts in this matter and partly because I wish to refute some of the statements which have been made over the last 20
hours, some of which I think contain the height of cynicism. I refer to statements which have come from the Tory opposition. They fit into this particular pattern although I would exclude the statements made by the hon. member for St. John's East (Mr. McGrath). Over the last eight years I have observed him to be a person who is extremely consistent in his thinking. I know he is one of those who have spoken out for improverished Canadians and those at the bottom of the barrel and in the lower-income brackets. I think what he says is very honest, and I believe we should provide cushions for those people.
1 disagree, however, with his colleague from the same city, the hon. member for St. John's West (Mr. Crosbie). I think there is a great deal of cynicism there. The hon. member for St. John's West is great with his expletives and his kind of barnyard humour, but I do not think he would know, since he was once minister of finance, that there are no simple answers to what has occurred.
I am particularly annoyed at the efforts of the former minister and at the efforts of the Tory party in general because I feel they were moving on a path worse than the one they are criticizing our government for following. Allow me to explain that. Last fall when the hon. member for St. John's West was minister of finance, we were studying interest rates. He appeared before the finance committee along with the governor of the Bank of Canada. I just want to convey to the House what was happening at that time. We were trying to show the interest rates which really counted were those we called "real" interest rates; that is to say, the rate minus the inflation rate. At that time Canada's real interest rate was about four to five percentage points higher than the real rate in the United States. In other words, the United States government rate was something like 16 per cent and its inflation rate was something like 15 per cent. I cannot give the exact figures which existed at that time, but they were in that area. Our interest rates were 16 per cent or 17 per cent. They were higher than the American rate and our inflation rate was something in the order of 10 per cent. We had a real interest rate about five or six percentage points higher than the American rate at that point.
We asked the governor of the Bank of Canada and the minister about this. They said, "Yes, it is true, real interest rates are lower but we are going to bring in a budget; we are to have higher gasoline and oil taxes and higher prices. Therefore, our inflation rate will go up; it is justified to have a higher rate than the Americans now have." That is what he said in committee. That was the kind of answer we were getting. Basically, the real interest rate was considerably higher than the American rate at that time.
Let us compare that with the present situation. The American real interest rate, the American inflation rate and the Canadian inflation rate are fairly close, with less than a percentage point between them. It is roughly 4 per cent higher than the Canadian prime rate. The real interest rates are roughly 3 per cent apart and our rate is roughly 3 per cent lower than the American rate. Yet members come here and flail us for what we have done. Obviously, interest rates are where they are because the Americans have decided, and I think stupidly, that they can solve inflation by raising the
December 19, 1980

prime rate to 20 per cent, 21 per cent or 25 per cent. It does not make sense. I do not know of any progressive economist in the world today who would say that it makes any sense, but that is the direction they are taking.
Now the minister, and certainly the governor of the Bank of Canada, have in the past followed that kind of economics. 1 am not convinced that we should continue to follow them. The minister is beginning to change that when he talks about the dollar dropping slowly and he is talking about a change in that direction.
What bothers me about this debate is the simplicity of it. All of a sudden it is claimed we could do something simple and the problem would go away. There are no simple answers. There is one thing we can do; we can let the dollar go. We should do that more often, let the dollar drop. That is not as bad as a lot of people say, but certainly there are some problems when we do that. 1 agree with the minister when he says that is the course to follow, but it must be done slowly, not rapidly as some would advocate. But there are no simple answers.
On the other side of the House you will find the same kind of simplicity in the NDP. They think that you can adopt the Keynesian idea of demand economy and that it would just work fine. All we have to do is spend more money, put out more money and that would solve the problem. But there is just no evidence I can find among progressive economists that says it will work.
That has worked in the past but under different circumstances. The reason it will not work today is that the notion of stagflation gives the opposite effect to the one you would normally expect. If you increase demand, you increase inflation; a whole series of things happen and you end up with more people unemployed. That kind of answer is not working. It is not working because we are in a lot of trouble in this country. This is because we have a budget deficit of $12 billion, $13 billion, or $14 billion. If that is not increasing demand, 1 do not know what is.
1 have real difficulties with this question because of the cynicism of members opposite. I do not think there are simple answers. Although I do not say it has to be this way, I would like to see the government move toward a lower dollar for some very strong reasons. My community would probably be most affected by this. Thunder Bay on a per capita basis is, if not the largest, certainly one of the largest exporters in this country. The pulp and paper industry supports between 80 per cent and 90 per cent. We have a large company which manufactures rail cars and they export at least 50 per cent of their product. We are the largest grain exporting city in the world; therefore, exports are very important to us.
I do not believe that a 77, 78 or 79-cent dollar will create a lot of problems. If interest rates are kept at a lower level, that is what should happen. However, that is not what the last minister of finance, the hon. member for St. John's West, was
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saying. In the past, he said that rates have to go up because they were going to induce more inflation.
Like the hon. member for St. John's East, I am concerned about the kinds of cushions we have to support those Canadians who need support. A lot of pressure is coming from the Conservative party, the business community and other places, to cut away some of the programs we have brought in over the past ten to 15 years. They would like us to cut family allowances and deindex other programs. There is a lot of pressure on programs such as medicare. Over the years, we have brought these kinds of programs into this country. More and more of them have been indexed. I can foresee family allowances and like programs having their indexation taken away, and this worries me.
Hon. members have talked about the kind of cushion that has been put in. They refer to the mortgage scheme they intended to set up. 1 read their mortgage scheme quite carefully. I spent a lot of time going through it. It was for the upper middle class, not those with low incomes who do not have mortgages.
Hon. members talked about a cushion for the increased price of oil and gasoline. We must not forget that it was the government which was defeated before last Christmas which brought in the 18-cent gasoline tax. That tax was not imposed because the government was defeated on the issue.
It is said we are putting in a cushion for lower-income families. 1 agree there is a cushion, but it is the type of cushion one would receive when walking into a store which is having a big sale. The sign may say "Reduced 50 per cent", but the article is 10 cents higher than the regular price in the store next door. This is the kind of cushion you put in after you have raised the price.
Almost daily 1 read all the literature relating to energy. I am convinced that if the Tories were in power, we would be paying more for our oil and gas because they keep asking for more and more. The Tories keep saying that they had a settlement with Alberta. However, neither the Alberta government nor anyone on the Tory benches has ever said what that settlement was. I do not believe there was a settlement. I defy them to tell me what it was.


William Herbert Jarvis: There was a settlement.


Paul Edmund McRae: If there was, the price would be a good deal higher. Even the New Democratic Party says we should do more negotiating with Alberta. But if we do that, the price will go up. Negotiating means giving more, not less.
I do not blame the Alberta government. They are doing what they should do. However, if we sit down with them, we will get less. We argued this issue all last week. I am convinced that under the present regime, our offer will be a better deal for lower-income Canadians. No one has been able to convince me differently.
I wish to spend the few minutes I have left talking about the oil and gas bill. It is part of this budget and part of the whole

December 19, 1980
Economic Conditions
financial discussion we are now having but I will not spend too much time on it.
1 am particularly disturbed about the NDP opposition to this bill. In this country there is a progressive movement. There are progressives in all political parties in this House. There arc progressives in the Tory party. I am convinced the hon. member for St. John's East is a progressive. There are certainly progressives in the NDP. In fact, in my opinion most of them are progressive. There are a large number of progressives in this party who spent many years working toward a stronger Canada, stronger nationalism and economic nationalism.
I joined the Committee for an Independent Canada as soon as I heard about it, which was very soon after it was formed. The chairman of the local committee for the first national convention, which was held in Thunder Bay, was a very active member of that group. I am still on the board of advisers in a sort of way, but the organization is not as strong as it used to be. For years, I have been concerned about economic nationalism, about who owns Canada and how Canadians can recover lost ground in terms of Canadian ownership.
The result of all the efforts by members on this side, including the Minister of Energy, Mines and Resources (Mr. Lalonde), is that we finally got a package of which we could be proud. We could really do something about Canadian ownership. I am convinced that we will have the support of the Canadian nationals. It is not as much support as I would have liked. It is not as good a deal as the minister would have liked, but it was the best we could get.
When one sits on the opposition side, one thinks that the governing party has just one single idea, that it is in the head of the Prime Minister and that is it. However, that is not what this is all about. The party in power, as the Tories would have probably found out had they been in power longer, is a party with a lot of ideas coming into it. There are people who are right-wing, people who are left-wing, people who are ambivalent and so on.
These people come together and apply pressures. The things they hear from their constituents and from various regions of the country are what make up the government in this country. Many people have views about Canadian nationalism. They want to see the oil industry Canadian controlled. They want to see this 50 per cent thing. They come together and agree to put on some real pressure. That is what happens inside a government. Individually and collectively we keep this up, and the result, of course, is a bill which says that we are going to move toward 50 per cent ownership and that we are going to move fairly rapidly. We will not move as rapidly as the NDP would like, but then we could not afford to move that rapidly, and the country is not with us to that extent.
However, what I am saying is that the pressure was there. The minister, who was the leader of this movement, also wanted this desperately, and so we have a Canadian bill which is good for Canada. I used to sit in the Standing Committe on
National Resources and Public Works with Tommy Douglas and people like that. I worked side by side with him when we were considering the Petro-Canada bill. We used to work together on this kind of thing.
At this point we have a chance to make a breakthrough, but it is difficult because the oil industry in this country is not happy. Indeed, many people in this country are not happy about that bill. The official opposition is to the right of that bill. Its members say we are going too far, and at this point our friends who are supposed to be the Canadian nationalists desert us because they do not think the bill is good enough. This has bothered me. I cannot say how much I have been perturbed by that. The NDP should take the attitude which I am sure they would have taken under the leadership of Mr. Douglas. If they do not like certain aspects of the bill, and if they think it should go further, then they should say they will support it in principle, allow it to go to committee and fight like hell there to get some decent amendments.
I really wonder about this debate. I wonder whether we are just grandstanding. It seems to me that there are no simple answers to the problems we are facing. The problems we have are not the result of somebody who is vicious or stupid. They are problems the whole world is facing, and rather than sit here and condemn this and yell about that, we should sit down and talk about the kinds of solutions which should be sought. They will not be simple because the problem is not simple.
I hope I have concluded on a reasonably positive note. I hope that somewhere along the line in the new year the cynicism of this kind of debate and particularly the cynicism 1 see in question period will disappear.


The Acting Speaker (Mr. Blaker):: Order, please. Yesterday I made an error because I was working with a list, and I was not too sure of it. I think I ought to recognize the hon. member for Vancouver East (Mrs. Mitchell), but if the hon. member for Esquimalt-Saanich (Mr. Munro) would advise me that I may be in error, I will listen to him. If I am correct, then I will recognize the hon. member for Vancouver East.


Mr. Munro (Esquimalt-Saanich):: Mr. Speaker, I will defer.


Mrs. Margaret Mitchell (Vancouver East):: Thank you, Mr. Speaker, and I thank my colleagues.
We have heard very many speeches over the last night and day. I think they were important speeches. 1 do not quite agree, with all due respect, with my colleagues across the floor. I think there have been important speeches in this emergency debate on the drastic state of our economy.
Speeches have been made about the intolerable interest rates, and speeches have been made deploring the fall of the government last December. There have been speeches about the high cost of fuel and food, and I share the concern which was expressed by the hon. member for St. John's East (Mr. McGrath).
There have also been references to the constitution, to energy policy and to the high cost of interest rates for small businesses.
December 19, 1980

The Liberals extolled Liberal economic policies, and the rest of us condemned non-Liberal non-policies. Last night we even heard speeches about Russia and about Christmas shopping. However, 1 say again that 1 feel that although this has been tiring, it has been a very worth-while exercise. It has certainly been a record-setting debate in the Canadian House of Commons.
We have reached a record flow of words. 1 think that is because we really do care about what is happening to ordinary people and to the people for whom the hon. member for St. John's East has just so eloquently spoken. I think we care very much, because we are concerned not just about the very poor but also the sons and daughters and people in almost every economic sphere who are affected by the very drastic situation in Canada today.
1 am not going to waste time criticizing. Well, I suppose 1 will be doing a little bit of criticizing. That is my job, but I hope I will not be chastising my political opponents in too negative a way. I think we are really all equally concerned, and we know that it is very difficult to find solutions.
At the request of my colleagues 1 would like to speak specifically and concentrate specifically on the very serious housing situation in Canada. There is a serious housing situation for both tenants and home owners as a direct result of the very high interest rates and the lack of planning by the government and due also to the increasing speculation we see in very crowded parts of our country. We say-and I think we believe very strongly-that owning a home has always been a Canadian dream. 1 think those of us who have homes which we got into some years ago are very fortunate. This is certainly still the dream of many people. It is a dream which will not be fulfilled, of course, for many Canadians. However, it is certainly one of the best hedges against inflation for those who do own homes or have paid off a good part of their homes. It is also very much easier for people who are unemployed and laid off or perhaps on unemployment insurance if they have a home which is paid for or almost paid for. Indeed, it is the one asset which many, many people have. I refer to people on average and low incomes. It is an asset which is there to provide security in retirement and old age.
Home ownership is not just keeping up with the Jones's. It is really a basic part of our economic security. This was particularly brought home to me last spring on a housing tour in northern Newfoundland. I visited the northern peninsula as a guest of the national anti-poverty group. My colleagues from that area of Newfoundland would agree that it is one of the poorest areas in Canada. There is a very high rate of unemployment there. Many fishermen work just the minimum number of the weeks in the year to qualify for unemployment insurance. Many others are on welfare year-round, yet I was impressed that in these small fishing villages in remote areas, because the people own their homes-and some of them we might call shacks or small cottages-they really were in a much better situation than many other poor people across Canada. They had been able to get their land at cheap rates. They are still able to get it fairly cheaply and, of course, they
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put their own labour, often in a co-operative way, into the building of their homes. I was impressed by federal government programs. The RRAP and the home repair programs were particularly suited to this area because the incomes are low and the people could take full advantage of them.
In Nova Scotia as well as in New Brunswick I was impressed with the very high percentage of home ownership, which is a tradition there. Of course, we know that in that part of Canada, unlike the part I come from on the west coast, the population is somewhat stable and perhaps even decreasing in some communities, whereas our population is increasing with a great inflow of people by the thousands each month. It is great that people own their homes, but it is also great that they have built them themselves. Some of them had very innovative kinds of arrangements. In former years they could have shell houses and finish them off themselves. I was particularly interested in building co-operatives which no longer are possible because of interest rates and insecure mortgage programs. Lormerly, in these building co-operatives, labour was shared. The co-ops were able to buy supplies collectively and share expertise as well to keep down the cost of housing.
These are things which are not just a dream. They are surely things which by some really innovative program could be brought about. There is a human value involved, and this is a very practical approach to housing which we should make sure we get into again.
The big change, of course, in the maritimes, as in every other part of Canada, is the fact that in the larger cities now it is almost impossible for young people to purchase a home of their own. I should like to mention also a trend which I noticed in the Atlantic region and which worries me because I think it is prevalent in older cities as well, and that is the trend to rehabilitate the downtown areas of cities using heritage funds. Whitewashing, as it is called, or blockbusting, is a kind of move intended to improve the appearance of the downtown core but it often ends up by removing houses, particularly family houses, and low-cost rental homes. This creates high-priced housing for professional people and for people who can be called swingers. It means that the poor people who have traditionally lived in the centre of our cities are pushed to the suburbs and often to areas without transit and with a high cost of energy. This is happening, I think, in Saint John where there is a great increase in population.


Mr. Forrestall:: Why don't you talk about B.C.? You know more about it.


Margaret Anne Mitchell: Yes, I know considerably more about British Columbia but I hope, with respect, Mr. Speaker, that I can show concern for all of Canada as well.


Some hon. Members:: Hear, hear!


J. Michael Forrestall: Talk about something you know about.

December 19, 1980
Economic Conditions


Margaret Anne Mitchell: 1 think that in the Christmas spirit, members of Parliament should be concerned about all Canadians, not only the region in which they live. I could very well speak for several hours about the terrible conditions in British Columbia.
Across the country there is a zero vacancy rate in rental housing in most urban centres. I raised this in the House as a question the other day. This occurs in St. John's, Toronto, Winnipeg, Saskatoon, Regina, Calgary, Victoria and yes, in Vancouver. Most of these are centres of economic growth, as we know, with a large influx of newcomers due to migration across Canada and very heavy immigration as well, so that the housing stock is seriously depleted and there is considerable overcrowding.
We also know that most cities, particularly cities of large growth and fast growing cities, suffer from lack of long-range planning. 1 would like to mention particularly the lack of long-range planning by the federal government in co-operation with the provinces and municipalities to provide adequate shelter for people who are needed and who are looking for jobs and looking for a better future, and who move to these parts of Canada. This comes at a time when we have escalating interest rates and 1 will get back to the subject in a minute. It is also of considerable concern that the community service grants and the neighbourhood improvement programs which were to help developing communities have been cut off, that federal assistance for land banking programs, which is very important in my view, is no longer available, and also that there are very scarce federal funds now going into public housing which is still needed as the only form of housing that can meet the needs of poor communities. We know, of course, that the high and unstable interest rates are forcing up the price of housing at a drastic and deplorable rate.
In addition, in my city of Vancouver-if the hon. gentleman would like me to talk about that-there is excessive speculation. It is not unusual for a house to be purchased in the morning and sold with a mark-up of about $15,000 later in the same day. We had a concern, as expressed by our new mayor in Vancouver, about considerable speculation on the part of foreign investors which we feel should be curtailed by some specific programs. Certainly the federal government should intervene in such areas as Vancouver and other cities to develop affordable housing. Of course, we need provincial involvement, but it cannot be done without a much greater input from the federal government. That is absolutely essential. However, unfortunately, very little help is available.
1 would like to speak, first of all, about home ownership. High interest rates and soaring land costs are devastating for would-be home owners. The dream of home ownership which I mentioned earlier, is dead, particularly for Canadians under the age of 35. Members of this House who have children in that age group are finding, I am sure, that it is literally impossible for them to own a home today.
We calculated that at the current mortgage interest rates, which are now 16 per cent to 20 per cent for a mortgage on a new home, it will cost close to $1,000 per month for the
mortgage payments and for fuel and taxes, on which the prices are also going up. This means that a person wishing to purchase a home must earn a net income of about $40,000. Even members of Parliament are not quite in that income bracket so far as take home pay is concerned. This is a really deplorable situation. The only way in which home ownership is made possible, at least in my area, is for two wage earners, and now three wage earners, to purchase a house collectively. Adult children live at home with their parents or help out their elderly parents, and houses are being converted into duplexes for extended families and group living. There is pretty serious overcrowding. Our whole lifestyle is changing because of the terribly high cost of housing. Those of us who own homes and have almost paid them off are very fortunate, because our children will not have this chance.
The next area I wanted to mention was AHOP home ownership. We have heard a lot about this in the House as well.
Unfortunately, this is the only response the Liberal government has made to try to develop lower-cost mortgages for people on lower incomes. By lower incomes 1 do not mean very low incomes, ! mean average income people and young people coming out of university who want to own a home. I have spoken of this several times in the House and 1 am sure hon. members know how fallacious AHOP was and how it has bombed. Purchasers who were offered low down payments and low interest rates for the first five years found that they could not afford to refinance after this period. Many low-income people and struggling young families lost their homes as a result. Some found it cheaper to walk away from these AHOP houses and leave them to the creditors. As a result, CMHC has acquired a good deal of real estate and, of course, it has a good deal of money invested in these homes when the mortgages were foreclosed. We find that the financial situation of CMHC is worse than ever. It has cash flow problems and money invested in these houses which should really be invested in non-profit housing for people with the greatest need.
I am concerned also about complaints I have received, and I imagine other hon. members have also had them, that selling prices of some of these AHOP houses acquired by CMHC have been below market value. We like lower-cost housing but I do not think it is quite fair to price these houses at a considerably lower cost and sell them in a non-competitive bidding situation.
The minister said in the House several times that the government would act to help AHOP home owners, those in the greatest need. However, we have a great deal of difficulty finding out just what he has done. It is somewhat apparent that he has done very little. We finally learned yesterday that short-term assistance was offered to only 420 home owners, and I think there are something like 800,000 home owners with mortgages coming up for renewal. With the present cost of living and high interest rates, it is hard to agree that these are the only people who are suffering as hardship cases.
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The investment of CMHC in this kind of subsidy for people to keep their homes is about $1,200 per house. So, it is a relatively small expenditure on the part of the federal government. Perhaps the intentions of the minister were good, but certainly his idea of hardship is far from being close to reality. Of course, we know that it is not just AHOP home owners who are facing renewals and foreclosures. Other members have spoken about this matter in our long debate. However, because of the government's fluctuating interest rate policy, people are now having to gamble on their homes. We are finding that people are being advised to take out only six-month or perhaps one-year mortgages, hoping that the rates will change and that the Minister of Finance (Mr. MacEachen) will be good to them in the new year. We know that he has not been good to them and has no intention of being good to them. In fact, the rates have risen considerably over the 12-month period on which these people have been gambling.


An hon. Member:: Interest rate roulette.


Margaret Anne Mitchell: That is a good phrase. Research shows that many people who renewed their mortgages last year in December at 14.7 per cent for a one-year term now have to renew their mortgages and face the prospect of a second renewal at close to 18.5 per cent. This is some gamble, but what can people do? They have no choice under our present system. A $50,000 mortgage amortized over 25 years at 18.5 per cent costs $752 or more per month. Families were faced with a 27 per cent increase in their financing costs last year. This year the increase is more likely to be 56 per cent, if they renew mortgages at the high rate of 18.5 per cent, which is the average rate today.
This is why I begged the Prime Minister (Mr. Trudeau), in the absence of the Minister of Finance, to consider a mortgage assistance program. We have talked about a mortgage assistance plan for some time.


An hon. Member:: It is called a mortgage tax credit.


Margaret Anne Mitchell: I do not quite agree with the proposal of the Conservative party.


William Herbert Jarvis: You voted against it.


Margaret Anne Mitchell: That is right, we voted against it for very good reasons.


Mr. Deputy Speaker:: I am sorry to interrupt the hon. member but her allotted time has expired.


Donald W. Munro: Mr. Speaker, as we enter the twenty-second hour of this debate it is worth reminding ourselves of what brought this debate on and the target of the debate. The target is pretty sparse on the other side, but there has been an attempt by opposition members to get through to the government some of the critical features of our present economic plight.
We must remember the background. It was brought on in the beginning because we had been watching the value of the
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Canadian dollar drop from 84 cents to 83 cents, and gradually down until it reached a 47-year low of 82.56 cents on Wednesday. The next matter in sequence which caused concern was the inflation rate. It was announced that the inflation rate had increased on a yearly basis by 1.2 per cent from the previous month. The third element was the recorded high interest rate for borrowing from the central bank. It was announced around noontime yesterday to be 18.25 per cent, following the tracking of the rate in the United States.
These three elements-the dropping Canadian dollar, the high inflation rate, and the escalation in the interest rate- caused the two parties in the opposition to table motions requiring an emergency debate on the economic situation in which Canada finds itself. As 1 say, we are now starting the twenty-second hour of that debate.
I should like to refer to page 5446 of Hansard when the hon. member for St. John's East (Mr. McGrath) was questioning the Prime Minister (Mr. Trudeau) concerning the economic recession. The Prime Minister referred to people who are confronted with the problems to which these particular indicators point and which have created serious economic recession and inflation. In answer to the question, the Prime Minister said:
-it is a common sense matter when you have a set budget to spend more or less of it on the aspects which are more necessary to your daily life-
As far as I can make out, the Prime Minister never had a set budget. This is the advice the Prime Minister offered to those persons on fixed incomes.
What figures were released yesterday which prompted this remark? Leaving aside the effect of the declining dollar and high interest rates, what actually occurred with respect to the cost of living? The change between November, 1979, and October, 1980, was an over-all increase of 11.2 per cent on all items. I should like to single out some of the elements of that basket. On food alone, the increase over that same period was 13.7 per cent, and on housing it was 9 per cent. During the course of my remarks I will break down those two items even further. Bearing in mind what that represents and the index as of November, 1980, it now stands at $220. It has risen from a base in 1971 of $100. In other words, it is now 2.2 times the cost of the basket which could have been bought for $100 in 1971; now it would cost $220. That is a rough way in which to describe it.
On food the index is $273.90 on the base index of $100 in 1971 and housing is $208. So, all costs have at least more than doubled. Those are very important elements to bear in mind when one is on a fixed income, particularly when asked to shuffle one's priorities so as to buy more food or a little more fuel oil, or a little less dog meat and a little more bread. Perhaps it would be a little less bread and a little more dog meat; I am not quite sure.

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An hon. Member:: Dog meat is too expensive.


Donald W. Munro: Dog meat may be too
expensive, as my colleague reminds me.
In this index, because of the weightings of the various components that I have mentioned, the energy aspect of housing deserves special treatment. On average, the energy element that goes into the consumer price index has increased over the last year by 20 percentage points. For example, fuel oil, 26.7; gas for heating and cooking, 20.7; electricity, 9.6. I remind the House that food has increased from overa year ago 13.7 per cent.
In face of those essential components-I am not talking about clothing or housing, but the very bare essentials such as food and warmth-the Prime Minister has the gall to say to this House as advice to people on fixed incomes that it is a common sense matter, when you have a set budget, to spend more or less of it on the aspects which are more necessary to your daily life. What elements are there which are more necessary than food and warmth, assuming that you start the day with some clothing itself?
My colleague, the hon. member for Kingston and the Islands (Miss MacDonald) referred to the state of a widow on pension. She used the figure of $350 a month. In the CPI the weighting for heat and energy is 2 per cent. This means that 2 per cent of $350 allows that pensioner $7 per month for heating. On the food side, 21 per cent of $350, which is roughly one-fifth, is $70 per month. How can the Prime Minister expect anyone to shift these figures from that which is less important to that which is more important? Hon. members in this House have been talking about the lack of compassion of some members of this party, but 1 suggest, Mr. Speaker, that if there is anyone who lacks compassion, it is the person who uses those terms to those on fixed incomes.
I would like to examine a little more closely the consumer price index to see what room there might be for manoeuvre. The consumer price index is built up of a basket of goods which in total involves elements such as food, which is 21.5 per cent, housing, which is 34 per cent, clothing, 10 per cent, transportation, 15.8 per cent, health and personal care, 3.96 per cent, recreation, reading and education, 8 per cent, tobacco and alcohol, 6.24 per cent. Unless I have missed one or other of these elements, those figures total 100 per cent. Each of the elements is broken down even more. When the index is being devised, 1 see that the weighting for beef alone is 2.5 per cent, or about one-fortieth of the whole basket. Other meat is .85 per cent, poultry is .80 per cent, and fish is .40 per cent.
I compare this with some of the other elements. For example, the basket is composed of fish at .4 per cent, and then I see the item of pet care, .4 per cent. I wonder if that is a realistic way to devise an index for those on fixed incomes. I am sure that those who are on Fixed incomes and living alone would be very happy to have a pet to keep them company, but whether they spend the same proportion of their income, small as it is, on pet food as they do on coffee and tea, 1 think is questionable. Health and personal care is almost 4 per cent. I am sure that those who are on fixed income are normally elderly and will be paying more than that, even if they are on a health plan.
One of the more charitable and compassionate suggestions that I think the Prime Minister might have made is that he was prepared to ensure that there would be a different sort of index applicable to those on fixed incomes, not this general index which happens to be built up in a way that is, perhaps, not well understood. It is a basket of goods and services purchased by families and unattached individuals, a spending unit, living in private households in urban centres with populations of 30,000 or over. Not all people on fixed incomes live in those circumstances. They do not all live in urban centres where the population is 30,000 or over. Therefore, I find this CPI completely unrealistic.
1 have argued this case before but I have found that in this place it is necessary to go back and repeat some of the speeches which were made earlier; and I urgently request the government to look into the matter of having a special consumer price index for those on fixed incomes, so that when their pension is indexed it will be indexed more realistically and in line with the actual purchases which they make. Therefore, I say that the CPI as it now stands is hardly a valid basis on which to base indexation for those on fixed incomes.
I should like to break it down further, but in this particular debate I think there is room to broaden the ambit somewhat and give it a philosophical connotation, if you like. I believe there has been altogether too much attention given by this government to building up expectations which cannot be fulfilled. I was absolutely staggered the other day. We were on an international delegation and one of my colleagues who was with me, not of my party, said, "I think it is so evident that the government will look after me for the rest of my life that 1 should be spending everything I earn. There is no reason in the world for me to save it." That sort of attitude is what has driven the government. Government ministers produced the attitude for one thing. They have not encouraged or given this person any incentive whatever to invest in his own country, and it is what is moving the government at the present time to do this person's investing for him and nationalizing enterprise in this country.
One particular instance comes to mind, and it is the very recent takeover by Petro-Canada of Merit Oil. There were a number of outlets and it was one of the original economy cut rate gas purveyors in British Columbia in the lower mainland. There were about 40 outlets run entirely by Canadians, supplied from Canadian sources. PetroCan, in the interest of Canadianization, bought it out. There will not be any more cut rate fuel available from that firm. That is not Canadianization. It was Canadian before it was taken over. That is nationalization. Let the government be honest at least, if that is what it is intending to do.
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The hon. member for Thunder Bay-Atikokan (Mr. McRae) mentioned some suggestions. I can produce several suggestions on how we can improve pride in our country. There should be an incentive for individual investment. Why should individuals who were being serviced by the Merit outlets, for example, not help to keep that company afloat? Now it is being throttled by Petro-Canada which joined the other suppliers of gasoline they were selling. Gradually it took over.
The government could also reopen negotiations with the producing provinces to keep enterprise in this country instead of driving it out, and driving the dollar down. One of the great problems of driving the dollar down is that all the imports, even the orange juice which we have in the morning, will cost us more as the dollar goes down. The ripple effect of keeping industry here in Canada will obviously be felt here in Ontario.


Mr. Deputy Speaker:: I regret interrupting the hon. member but his time has expired.


Thomas Edward Siddon: Mr. Speaker, it has been a long 22 hours or so, and 1 would like to commend those members on both sides of the House, especially those on this side, who, I think, have spoken with far greater frequency. I want to commend them for the effort which they have put into this debate which has important implications for Canada. Our country is faced with economic calamity, indeed with a dangerous crisis.
We are discussing here the plight of home owners and businessmen-relatively affluent groups in our society-but especially the plight of the poor, the underprivileged and the impoverished in our society. We are addressing the impact of inflation and high interest rates on farmers and fishermen, auto workers, steel workers, school teachers and even Speakers of the House of Commons. The rise in the interest rate of recent days, coupled with a collapsing dollar, both speak in condemnation of the policies of the Liberal government over these past years.
I would like to read from a letter which I received from a constituent of mine. It is typical of the sentiments expressed by thousands of constituents of all members of Parliament. It reflects sentiments which members opposite will have to face up to and contend with during the Christmas holiday period. It reads in part:
Dear Mr. Siddon:
I work in an industrial plant in Vancouver as a so-called skilled tradesman. I am telling you. Sir, that the average man employed on that shop floor docs not give a (blankety-blank) about repatriating the constitution. Furthermore, few Canadians understand the meaning or the implications of such an undertaking. Most of my friends out west here are far more concerned with unemployment, inflation, increase in crime in metropolitan areas, decline of law and order, etc., and not necessarily in that order.
In responding to a question which I asked my constituents about the government's tendency to accumulate massive deficits, this gentleman writes:
The average working stiff, the so-called middle-and upper-middle class Canadian pays the brunt of personal income tax in this country. As far as myself and friends are concerned, we need every break we can get from the irresponsible fiscal planners in Ottawa.
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1 believe that those last few words are reflective of the plight which faces our nation. 1 would like to illustrate by drawing reference to another specific situation. Before doing that, however, I should say that I was most intrigued to pick up the Householder mailed out by the hon. member for Longueuil (Mr. Olivier) to his constituents. In it he has chosen to expound on all the great benefits that have accrued to his riding and his people as a consequence of the return of the Liberal government. There is a long list of million dollar programs and employment opportunities which have been created in his riding. In particular, I notice that he makes a big issue of a $4.8 million grant to a Mont Tremblant tourist centre, from the Department of Regional Economic Expansion, as well as $137 million for job creation, and aid to municipalities. He claims that over 2,000 municipalities will receive $25 million in federal aid. There was also a $9.4 million grant to an aircraft company in his riding.
1 cannot offer those kinds of Christmas presents to the people in my riding. I am afraid that it is time there was an accounting for this sort of thing. I must go to the people in my riding and explain why it is that the Minister of Public Works (Mr. Cosgrove) has terminated the Community Services Development Program. And here we have this member for Longueuil bragging about the millions being dropped in his riding. The government wonders why the people in my part of the country and other more distant parts of the country feel alienated.
I have a great Christmas present to explain to the people in my riding. Yesterday the tenants of the Kiwanis Senior Citizens Housing project in Richmond, British Columbia, received a bill. This bill is being received by people all across British Columbia, including the residents in all the non-profit housing projects. The bill is from British Columbia Hydro. It is a bill for natural gas and it includes a supplementary surcharge, arising out of the federal budget. These are people who are living in social housing projects and they are only there because their income is less than $5,000 a year.


David Michael Collenette: Call Bill Bennett.


Thomas Edward Siddon: It has nothing to do with the Premier of British Columbia, but it has a lot to do with the government opposite. The supplementary surcharge printed on this bill will be received by every home owner in British Columbia who heats his or her home with natural gas. The surcharge is clearly stated to be a direct consequence of the federal government's natural gas tax. This supplementary surcharge, which arrived just the day before yesterday, virtually on Christmas eve, will impact on single people, old people, sick people buying drugs and medicine and having to contend with the cost of food, clothing and shelter. These poor souls are getting dinged an extra $3 a month because of the natural gas tax. That is how direct the impact has been. It is but one small aspect of the federal budget. The compounding effect of all the various taxes imposed upon the oil industry of this country, the energy industries, is destroying the well-being and the standard of living of all Canadians.

December 19, 1980
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I do not know how I will explain this to my constituents. Prior to the budget announcement, some 32,000 residents of British Columbia had expressed their objection to an export tax on natural gas. So the government came back, in all its sanctimony, and sent the Minister of Finance (Mr. Mac-Eachen) into this House where he announced that the government had decided to abandon an export tax on natural gas. Instead ministers had decided to tax all natural gas, he told us. At the same time, of course, the government decided to restrict the export price of natural gas and announced that it would not provide for any increase in that. So where will the money come from to pay the extra tax on natural gas? Well, half of it will come from the pockets of the consumers, the private individual home owners and the industrial consumers of British Columbia. This will amount to S50 million for the present fiscal year, and $130 million for 1983. An additional $180 million will be lost to the B.C. economy in relation to export sales.
That money is coming out of the pockets of the consumer, Mr. Speaker. And that is just as a consequence of that one small measure-a tax on natural gas. It amounts to over $200 million a year out of the B.C. economy, to be taken from the residents of British Columbia, by the end of 1983. And if 1 were to add up all the composite effects which the federal energy taxes impose on British Columbia, it would exceed a billion dollars. A billion dollars lost to British Columbia by the end of 1983! Now where does that money come from? It comes finally and ultimately from the incomes earned by British Columbians. And British Columbia is not a resource-wealthy province in the sense of oil and gas when compared with some other provinces.
We are dealing here today with the question of high interest rates. I ask the members of this House why they think it is that the interest rate is 20 per cent in the United States today. The fact of the matter is that the Americans are not self-sufficient in oil; they do not have nearly enough oil to meet their own requirements. They are short to the tune of some 50 per cent plus. So they are exploring all over the continental United States for oil and gas. They are trying to develop hydrocarbon resources from shales, and they are looking into alternative energy technologies. All of that takes capital. To attract capital and to get the United States off its dependence on foreign oil they are having to pay interest rates of the order of 20 per cent and higher.
If you lived in a country, Mr. Speaker, where the inflation rate was running at 10 per cent or 12 per cent, such as Canada, and you had to compete with the demand for capital from a large neighbour to the south where the interest rate is 20 per cent, what interest rate would you need? That is the problem. In order to earn a fair rate of return on investment in Canada, the interest rate has to be where it is. That is what we are told by the economists. Well, why have we gotten into that situation? Why are we so tightly linked to the Americans, and why do we not find ways to make it attractive for Canadians to keep their capital at home, and for others to invest in this
country, in order that we may produce jobs here? Why must we go instead with our hands out, to the Americans and elsewhere to borrow money, as a means of continuing to finance our accustomed lifestyle? That is merely trading on the future equity of our natural resources, and selling out the future of our children.
It is not fair to blame the Americans. The blame starts with a country and a government which has allowed runaway inflation. Inflation eats away at the return which can be earned on investment. Profits have also been eaten away by unconscionable tax levels imposed, not only on our industries, but on individuals in this country.
I heard the hon. member for Ottawa Centre (Mr. Evans) say last night that high interest rates are caused by inflation. I agree with that to a degree, but the other side of his argument was that high interest rates do not contribute to inflation. To that I say, some economist! At this particular point in our history, high interest rates are having a very profound effect upon inflation in our country. There is a synergetic effect; there is a linkage between interest rates and inflation, so that one reinforces the other, and it in turn reinforces the first. This puts the economy into an unstable cycle, as it is at the present time. In that unstable cycle you have a continual amplification of both interest rates and inflation, unless you take drastic action to bring that situation under control. The budget of the government takes no such drastic action, except to make Canada much more isolationist.
Mr. Speaker, 1 expect the government will soon start wage and price controls; perhaps foreign exchange controls. These are not my recommendations but I think these perhaps are the concepts that the government is going to be forced to consider-more isolationism, more protectionism, more socialism, more government intervention and, ultimately, further down the road, another form of government which many of us in the House dread.
We have heard some talk about the concept of the Laffer curve, which is a plot relating the productivity of our economy to the percentage of the gross national product which is taken away by governments in the form of taxation. Economists now know that when we have a level of taxation which exceeds a certain optimal level, the productivity of a country will begin to decline. When you are on the high side of that Laffer curve with tax levels exceeding the optimum value and governments are grabbing and groping for more and more wealth, which ultimately has to be earned by the people who work, you then get into an unstable situation where companies and individuals have less and less room to manoeuvre.
Consider a company in a fairly healthy, buoyant, free enterprise economy, which has a fairly comfortable profit margin. Well, if the interest rate were to rise suddenly because of some anomaly, that company would have enough cushion to absorb such an increase for a period of time, and weather the rise out. It would have some cushion in its profit margin to absorb higher interest rates, so it would not have to pass that increase directly on to the consumer. But if the profit margin has been reduced to zero, or near zero, because of the imposition of excessive taxation upon the operation of that venture,
December 19, 1980

then what is going to happen if interest rates go up? What is going to happen is that prices will have to rise, and that is precisely what is happening in this country today. There is no longer any flexibility in the private sector economy, because the government has taken away all the room to manoeuvre.
It all starts with oil, Mr. Speaker. We have a budget now that started out, on October 28, with a 9 per cent excise tax on gasoline, and an export tax on oil. Then the government added to that a natural gas tax, an 8 per cent producer tax, and income tax on net profits, if there are any. But before calculating net profits the industry must pay an import compensation charge, a Canadian ownership charge, and the required provincial taxes both at the producer end and at the consumer end of that chain. If an industry wants to produce oil and gas in the frontier areas, under the provisions of the Canada Lands Act, Bill C-48 presently before the House, then there is also a producer royalty of 10 per cent, with a 40 per cent progressive additional royalty. Mr. Speaker, if you compound all these taxes, there is not enough left to make it worth while to be in the oil and gas business in this country. I submit that this is at the heart of the problem in Canada today.
We could go back and make comparisons between the famous Crosbie budget of a year ago and the present one. If 1 have a few moments left I would like to do that. We recognized a year ago that it was essential to pay for the high cost of imported oil in order to equalize the price of gasoline and oil to all Canadians. So the Crosbie budget provided that it be paid for by a surcharge on gasoline, which is a discretionary commodity. We burn too much and waste too much of it anyway. And that 18 cents a gallon excise tax would have raised revenues close to $2 billion each year in order to pay the price of the import oil compensation. Instead of taking that approach, the present government chose to impose a corresponding tax at the wellhead, a tax which affects heating oil, a tax which affects plastics, a tax which affects the costs of producing pulp and paper, steel and every commodity which goes into our basic manufacturing industry. In addition, every time that tax moves one stage through the system it is compounded by surtaxes upon taxes. So rather than taxing a discretionary commodity like gasoline, to pay the price of import compensation, we have a government here which is taxing everything, including the heating oil the retired couple have put into their tank to heat their home. That is the basic discrepancy between the two budgets. The means by which they chose to deal with the high cost of energy is totally incorrect.
There is one other important distinction between the budget of the Conservative government and the budget presented here by the Minister of Finance a few weeks ago. That has to do with housing. The mortgage tax credit which was proposed under the budget of a year ago would have provided a 25 per cent direct deduction from income tax of the cost of mortgage interest on a $50,000 mortgage. That effectively reduces the interest rate by 25 per cent at the end of four years. Starting January I, 1981, that credit on your mortgage interest cost would have been half as much and would have reduced the
Economic Conditions
interest rate by more than 2 per cent. That is 2 per cent relief we are not getting from the government opposite through its budget. It is as simple as that. It was a direct subsidy on the interest paid by home owners.
There was assistance in that budget for the high cost of energy to Canadian families with an income less than $21,000, through an energy tax credit. There was also a small business development bond and investment incentives for investment in Canadian enterprise. There were a number of means of sheltering low income Canadians from the burden of inflation. Instead, we are confronted with a Liberal budget which fuels inflation through the entire economic cycle and which ultimately we will all have to absorb.
Why can't we be masters of our own economy in this country? One reason is that there is no money to be invested in Canada. If the government wants to buy out the petroleum industry, it will be going to New York, West Germany, and elsewhere. Money in Canada is tied up in Canada Savings Bonds, financing a portion of the federal government's $70 billion or $80 billion debt; recycling money through Canada Savings Bonds. It is tied up in term deposits, in secure long-term loans, and government pension plans to the tune of $18 billion. This pension money is non-existent because the government has spent it to Finance its squandering ways.
1 do not know whether hon. members realize it, but in this country we have an equity in the appreciation of housing over the past ten years of more than $300 billion. If the interest rate goes up 1 per cent, what is the additional carrying charge on that $300 billion to Canadian home owners? It is $3 billion. If the interest rate goes up 7 per cent, as it has in the last year or two, the carrying charge is increased by $35 billion.
Where is that amount of money to come from? Ultimately it has to come out of the household budget of Canadians, thereby reducing their discretionary income. It must come out of our gross national product. That product is the heart of our problem today. Our money is tied up as a consequence of government deficit squandering and irresponsible management of the economy of the country.


Mr. Rene Cousineau (Gatineau):: Mr. Speaker, the hon. member for Esquimalt-Saanich (Mr. Munro) called the attention of the House earlier to the number of members on this side who were present, but he forgot to mention how many Progressive Conservatives were here last Wednesday at midnight. Strangely enough, I cannot speak to him since he has now left the House.
Mr. Speaker, I do not intend to make this debate go on indefinitely and my intervention will therefore be brief. The hon. members have been here since eight o'clock last evening and the House has been sitting without interruption since that time. It is now 5.45 p.m., which makes more than 20 hours of sitting. We are now discussing a motion to adjourn the House
80094 - 13

December 19, 1980
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under the provisions of Standing Order 26 to debate the Canadian economy.
I have had the opportunity to listen to many of the speeches made by the hon. members opposite. They have discussed the economic situation in Canada. Some have talked about inflation, some have talked about the high interest rates, some have talked about unemployment, some have talked about local and regional problems in their constituencies. This is all to their credit. I believe that they were only doing their duty.
It is true that we have problems, Mr. Speaker. Nobody denies this. If it is not the problem of separatism in Quebec, it is the problem of inflation. If it is not the problem of inflation, it is the problem of an oil agreement with Alberta. If it is not the problem of oil, it is the problem of high interest rates. I do not believe that a single member on this side would deny these facts. Unfortunately, however, some have taken it upon themselves to talk about other subjects than inflation, interest rates and unemployment.
Some members have taken it upon themselves to make charges and insinuations about the role of our Prime Minister (Mr. Trudeau). This has nothing to do with politics, it is not a conflict of ideas, it is not a difference of opinions. I shall give you an example which occurred this afternoon. The hon. member for Central Nova (Mr. MacKay) noted in his speech that our Prime Minister should have more contacts with our friends than with the Soviets. Yet, on page 25 of the issue of December 22 of Maclean's, we can read the following:

The abiding impression left by the Soviet leader was that of an old, tired, sick man, with not long to live. But he did show the occasional small spark. At the ceremonial arrival, members of the diplomatic corps were introduced to him. He shook their hands in silence-until he was presented to Canadian High Commissioner John Hadwen. Brezhnev's eyes lit up. "Trudeau!" he said. "Wheat!" replied the high commissioner.

Why, Mr. Speaker? What was the point this afternoon during a debate on the economy to quote the example of a visit by Mr. Brezhnev to India? As long as members make personal attacks against someone in particular in the House and call other members all sorts of names, they will only make the debates more acrimonious.

I do not think hate has any place in this chamber. Opinions, yes; debate, yes; respect, yes.
[ Translation]
Mr. Speaker, if 1 may, I would like to give an example which concerns the visit of the Right Hon. Prime Minister to Saudi Arabia. Certain jokers on the side of the opposition referred to this trip, but not one of them noted that Saudi Arabia intends to spend $280 billion within the next five years. No one mentioned this fact on the other side. All the companies throughout the world want a share of this pie. This is why the Prime Minister went there, Mr. Speaker. He wanted to
open the door to our Canadian companies so that they may also have a taste of this pie worth $280 billion.
Mr. Speaker, the year 1981 will not be easy. We have not left all our problems behind, they are still before us, but for my part I have confidence in the future of this country; 1 have confidence in the good will of some of the members opposite. I know that some of them have shown their good will, have intellectual integrity and make constructive criticisms. Mr. Speaker, to show some holiday spirit after such an arduous, lengthy and tiring debate, I would like to say that I hope that 1981 will be a year of peace and that all the hon. members, whatever their party, will work in the best interests of the Canadian people. Is this not why we are here?
[ English ]


Nelson Andrew Riis: Mr. Speaker, 1 must say that, as we approach the twenty-fourth hour of continuous debate, it was with a sense of discouragement and shame that we were forced into this kind of discussion tonight. It is a direct reflection on the leadership and the ability of hon. members opposite to come to grips with some of the problems facing Canadians today. 1 am proud that it was my leader, seconded by the financial critic for the New Democratic Party, who provided us with an opportunity to discuss some of these crucial issues facing Canada in this emergency debate.
1 have listened with a great deal of interest to our colleagues to my right. 1 listened very carefully to many of the positive proposals they have put forward in the last 22 hours. I have been very pleased to be part of a party of representatives who also put forward a vast array of solutions, suggestions and proposals for the government to use to meet this crisis which is upon us in 1980.
I must say that I was distressed at some of the comments 1 heard from across the way, and at some of the performances across the way. Early this evening when the Leader of the Official Opposition (Mr. Clark) wanted to raise with the hon. member for Kitchener (Mr. Lang) a number of questions about his speech, the hon. member for Kitchener said that he was not interested in entering into a dialogue at all and was more interested in pursuing a game of squash.


Walter David Baker: That is what he said.


Nelson Andrew Riis: That is what he said. We have noticed as we have sat here on the opposition side for hours and hours the absence of some prominent persons across the way. Where are the cabinet ministers? Where is the Minister of Finance (Mr. MacEachen)? He has been absent from this chamber for hours and hours. Where is the Minister of State for Finance (Mr. Bussieres)? He has been absent.


Arthur Ronald Huntington: Where are the parliamentary secretaries?


Nelson Andrew Riis: Where are the parliamentary secretaries? Where are the backbenchers? I am proud to say that attendance on this side of the House has been large. That has shown that
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concern for this country exists on this side of the House. What on earth is going on across the way?
Why was it that we were prompted to take this special action under Standing Order 26? Put very simply, it was because the last nine months and 19 days have seen Canada enter into what could only be called a devastating and pathetic situation.
Let us look at some of the facts. We now have a prime interest rate of 18.25 per cent, and rising on a weekly basis. It is the highest ever in Canadian history. It is the highest rate ever, and we have been listening to the pathetic responses of the Minister of Finance for the last week that he intends to do nothing about it, it is out of his hands and there is nothing that can be done. That is the kind of commitment, initiative, and solution we get from the present government.
The consumer price index in Canada has now increased 11.2 per cent. In the food sector the increase is 13.7 per cent. Bankruptcies in small businesses across Canada today in some provinces are occurring at a 130 percentile rate over the same period last year. In the last year we have seen not tens of thousands of Canadians laid off but 200,000 Canadians laid off, primarily in central Canada. In relation to the United States dollar the value of the Canadian dollar is at its lowest ebb since 1933, since the depression years. We have a deficit now in excess of $14 billion, a current accounts deficit of approximately $6.2 billion.
We have a housing crisis in this country. In numbers like never before, young people are finding it impossible to qualify for mortgages. People are facing difficulty. Even people in this House are facing difficulty when they go to banks to renegotiate mortgages, only to find that their incomes are insufficient. They cannot qualify for the new rates which the government's policies have created. This is to say nothing of rental housing. People who are out now attempting to purchase homes find that there are no homes being constructed to meet the demand across Canada.
The rental housing situation is worse. In my own city of Kamloops, British Columbia, the vacancy rate is virtually zero. In other major metropolitan areas across the country serious rental accommodation shortages are forcing people to live in vans, converted crawl spaces, and converted garages. That is the kind of situation in which we are finding ourselves in Canada. Indeed, it is a housing crisis.
Of course, those who can least afford it are those who are being hit the hardest. I refer to the elderly on fixed incomes and on pensions, veterans on pensions, and the handicapped. I refer to people experiencing regional disparities across the country. Of course, the most dramatic picture of all where this problem focuses very clearly, in terms of the real problem in Canada, is seen when we look at the unemployment level in Canada. In Canada 1,320,000 people are without jobs. That is approximately 8 per cent of the total work force, and here in Canada we are asked to accept, presumably, that 8 per cent unemployment is acceptable, to say that more than one million Canadians being out of work is quite acceptable. That is the
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kind of response we are hearing from across the way when inquiries are raised in the question period as to what is going to be done. The infamous shrug comes from across the way. Presumably 8 per cent is acceptable.
1 would like to remind hon. members opposite that the unemployed in Canada are not purchasing a great number of Canadian goods. The unemployed do not build and create a sound basis for our Canadian economy. They are unable to play a committed and meaningful role in our various communities and neighbourhoods. They cost Canadians money. They cost all of us in this House money, and I think most of us are getting fed up with having to pay for the unemployed of Canada, because there is no reason to have unemployed in Canada. Other western industrialized countries would never begin to accept an 8 per cent unemployment rate if they had the richness and the opportunities which exist in our country.
One serious side of the employment question which is often overlooked is the social impact of unemployment. What does it really mean when more than one million Canadians are unable to find work, and when more than one million Canadians are unable to provide for their families in a respectable way? One does not have to quote those Canadian and American analysts who have found correlations between rising unemployment and the increased incidence of suicide, homicide, mental illness, family breakdowns, prison sentences and so forth. One can simply examine the contents of a recent analysis with respect to the social impact of job lay-offs prepared by the Metropolitan Toronto Social Planning Council. In this report that council indicates the following:
Social interaction patterns can be very much disrupted by unemployment. The loss of social contact through the work setting is further aggravated by the tendency of unemployed persons to withdraw from friends, relatives and community life . . . Within the family, social interaction patterns can be upset since the loss of a job and income may diminish the unemployed person's status and authority. Shifts in roles within the family, coupled with changes in the unemployed worker's personality, can provoke considerable stress and in extreme cases can lead to family breakdown.
Turned inward, these feelings of bitterness, rage, and powerlessness may result in depression that becomes further exacerbated by the self-doubt and blame that develop when job hunting is not successful. Anxiety over financial difficulties, both now and in the future, also contributes to the depressed mental state that has been found to characterize many laid off workers.
The impact of the economy on family life is further illustrated by the following comments from the National Council on Welfare:
Anything that widens the gap between income and need-the loss of breadwinners wages because of unemployment or illness, escalating rent, sudden rises in fuel and grocery costs, any unexpected and unavoidable expense-can plunge a poor family into crisis.
Specific evidence on personal and family crises due to unemployment is increasingly being catalogued in Canada. In Windsor, Ontario, a city which has experienced major lay-offs in the automotive sector, the mayor's committee on services for the unemployed reported that:
Inability to make credit payments, inability to make unemployment or welfare payments stretch to the end of each month, has brought about uncontrollable

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stress and pressures and resulted in increased use of alcohol and tranquillizers and other drugs to ease stress.
The mayor's committee also found that social agencies in Windsor have experienced increases in caseloads ranging from 25 per cent in some months to 377 per cent in other months. In this regard it said:
The human tragedy associated with unemployment is also reflected in the committee's statement that having to go on welfare after other benefits are exhausted is having "a devastating effect on individuals and their families."
One tragic result of prolonged unemployment can be an increase in family violence.


Mr. Deputy Speaker:: The hon. member for Nepean-Carle-ton (Mr. Baker) wishes to rise on a point of order?


Walter David Baker: Mr. Speaker, you may have some apprehension about the fact that the clock has reached 6 p.m., which is the normal time of adjournment for supper. I apologize to the hon. member for Kamloops-Shuswap (Mr. Riis) for interrupting him but since this is an emergency debate I wonder, Mr. Speaker, if you could canvass the House.
I think there might be unanimous consent to carry on through the normal dinner adjournment hour so that members can participate in the debate.


Yvon Pinard: Mr. Speaker, I do not think unanimous consent is required. I thought the rule obliged us to go on. In any case, we wish to proceed with the debate during the dinner hour.
While I am on my feet, may I raise a point of order? I have spoken to my colleague in the Conservative party and 1 understand he agrees with the procedure. We wish to seek unanimous consent to table a notice of ways and means motion to amend the Income Tax Act under the provisions of Standing Order 60( 1).


Mr. Deputy Speaker:: I assume there is unanimous consent to the two propositions, first, that we continue the debate throughout the dinner hour, and second, that the President of the Privy Council (Mr. Pinard) has permission to table the document.


Some hon. Members:: Agreed.




Yvon Pinard: Mr. Speaker, in accordance with Standing Order 60(1), I am tabling a notice of ways and means motion to amend the Income Tax Act.


MOTION TO ADJOURN UNDER S.O. 26   THE ECONOMY EFFECTS OF RISING COST OF LIVING AND 1NTF.REST RATES
[Stage Direction]
The House resumed consideration of the motion of Mr. Broadbent:
That this House do now adjourn.
Nelson Andrew Riis: Mr. Speaker, it is certainly clear that a serious problem is facing us, which is unemployment with the many serious social implications which perhaps we still do not fully understand or appreciate. I have listened with interest as many previous speakers have attempted to define why it is that we find ourselves in this dreadful situation. The most obvious answer is the ineptitude across the way. What is behind this? Why is it that our interest rates, for example, are chasing those in the United States in a rollercoaster effect? When theirs go up, ours go up and when theirs come down, ours come down.
The Minister of Finance (Mr. MacEachen) has indicated that what happens in the United States has an influence on what happens in Canada. Of course, that is the case. What else would one expect of a country with a branch plant economy which is closely intertwined with the economy of the United States? What would one expect of a country which is essentially a colony of the United States? What would one expect from a Liberal government and, I would add, from the Tory conti-nentalist approach to the economic systems within North America which is to see Canada and the United States as one, an approach which has essentially ignored the existence of the forty-ninth parallel? As a result of this continual progression toward a continentalist policy, and there is no indication that that is changing at all, we have had high interest rates that have chased those in the United States which are now likely to go to 2.0 per cent and above. This does not have to be the case. If we had an economy which was a Canadian economy, if we were in control, we would be more like Japan, West Germany or Switzerland. The interest rates in Japan are around 8.8 per cent, the interest rates in West Germany are around 11.5 per cent, in Switzerland they are about 5.7 per cent and in the United Kingdom they are in the 15 per cent area.
In other words, we do not have to have the high interest rates that obtain today in Canada. They are a reflection of the leaderless economy in Canada and its close ties to the United States. That is the reason that our prime rate today is 18.25 per cent. 1 suggest that the government's priorities in dealing with these problems are completely out of whack with reality. The government's main concentration of activity and interest is on the constitution, and yet when one travels across the country or to my riding of Kamloops-Shuswap and asks people what is foremost on their minds, what their major concerns are today, no one ever mentions that the constitution is their major concern. Their major concern is the cost of food, the cost of housing, the cost of travelling to and from work, whether their
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children should go to college, and whether it is worth it as the future is so uncertain.
There is a frightened feeling out in the land. Those are the things that are on people's minds today, not whether or not the constitution should be patriated and whether or not it should have a certain kind of amending formula.
The people of Canada have received a great Christmas present from the government in 1980-an economic crisis, an economic catastrophe. If there is one sector of our economy that suffers dearly during these times, it is the small business sector, the sector which provides 50 per cent of the work force of Canada, the sector which provides essentially the new jobs that are being created today. The growing sector of our economy is the small business sector, not the branch plant sector. That is where the research and development is occurring, sometimes about 14 per cent of the value of sales in some of these small businesses. That is the sector that is exporting the finished goods and products from Canada to overseas markets. That is the creative, innovative sector-not the branch plant sector but the small business sector. That is where the creative instincts are played out. It is the sector of our business community which has a commitment to this country, which has a commitment to the communities in which it is found and to its neighbourhood. These are the firms that are providing assistance to the Little Leagues, and providing funds to allow the Boy Scout movements to exist.
This is the aspect of our economy that reflects the flavour of Canada, the personality of Canada. The Liberals and their policies are assassinating this sector, bringing it to its knees. They say they have lots of plans for the small business community, lots of schemes, lots of programs. Of 200 business programs in Canada, how many cater to the business sector? Two programs out of 200 are for the business sector, and those two are rather minimal. One is the Small Businesses Loans Act. The banks do not tell anybody about these programs. The small business development bond, because of its excluding clauses, makes it applicable to only 5 per cent of Canada's 940,000 small businesses. That is the kind of assistance that is available.
The Minister of State for Small Businesses (Mr. Lapointe) has the gall to rise in the House of Commons and say, "We are studying the matter and we will study it for the next number of months." A businessman cannot meet a payroll with studies. He has to go to the banks and is forced to borrow at high interest rates. When a small entrepreneur or a contractor does a job for an individual, he often has to wait 30 or 60 days before he is paid. To meet his costs he has to go to the bank and borrow at today's interest rates, and that is 18.25 per cent, depending on the risk. That is the kind of support that is available to the small business sector.
Mr. Speaker. I see my time has run out. To conclude, 1 should like to quote from the Scriptures and say, "Lord forgive them for they know not what they do."
Economic Conditions


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, 1 appreciate the opportunity to take part in this debate. I should like to express appreciation to my leader for initiating this debate on the economy and on the tragic failure of the government to act.
This debate is important for two reasons. First, it is important that we take every possible opportunity-no matter how small it is-to make the Liberal government face up to the consequences of its inactivity. This is a slender hope, but we must hold on to it. Perhaps we might wake the government up to the crisis we are facing. Second, if we fail to wake up the Liberals, at least we want to let Canadians know who is responsible.
Other speakers have already outlined the basic situation and the disastrous combination of factors which creates the present crisis. There is high unemployment. Over 853,000 people are officially unemployed, but when we add to that the number of people who have given up actively looking for work, we realize that the figure is actually 1.3 million people. Also, the Bank of Canada interest rates are the highest in our history. The rate announced yesterday was 17.63 per cent and today the prime interest rate is 18.25 per cent. As all members of the House know, most people must pay a much higher rate than that. We have also experienced the greatest increase in the cost of living in the last five years. Today, it costs people 11.2 per cent more to live than it did last year at this time. The price of food increased 13.7 per cent in November, 1980, over what it was in November, 1979. As the American poet, Randall Jarrell said, "It is a sad day at the supermarket".


Gerald Augustine Regan: Couldn't the poet do better than that?


James Douglas Manly: Hon. members opposite should think about it- it is a sad day at the supermarket for the people of Canada. 1 should like to see the Liberal government do better than that. All these factors have a multiplying effect in the economy. There were 6,000 bankruptcies in the first 11 months of 1980, manufacturing was operating at 78 per cent of capacity. Housing starts are down 20 per cent from last year. This is at a time when most of our cities have a minus zero vacancy rate. Each of these conditions represents the failure of the Liberal government to keep its promises. But, when we take these conditions together, they constitute a massive betrayal of trust.
During this past week we watched the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) indicate his inability to do anything about the gathering crisis. It reminded me of some lines which were written by a Canadian socialist poet who was killed during World War II, Bertram Warr. His poem was entitled: "Working Class" and reads:
They have gashed the lands with cities
And gone away afraid when the wounds turned blue.
We are left with the politicians who think poorly of us And who stand back with chaos in their pale old eyes Whimpering, "That is not what we wanted.
No, it was not to have gone that way".
They are very old but we have been very ill And cannot yet send them away.

December 19, 1980
Economic Conditions
During the past week we have seen chaos in the eyes of the Minister of Finance, who whimpers and says, "This is not what we really wanted".
i should like to make a few remarks concerning the effect of this situation upon Indian people. During the past week the constitutional committee heard several Indian organizations talk about the threat to their survival as a people. Development projects and government policies have taken Indian people away from their traditional economy which has been based on the land. More and more Indian people today are being brought into a cash economy. But, too often they have been brought into a cash-economy situation without being given the means to obtain the cash, except as welfare recipients. We all know welfare does not keep up with inflation. Too often large-scale developments have not bothered to hire or train local Indians for all but the most casual jobs, those jobs where they are the last hired and the first fired. The government has not made sufficient money available to Indian bands for economic development, and what money is available requires so much by way of front end equity that the bands which need it most are least able to get it. In spite of inflation, funding to Indian bands has been frozen at the 1975 level. We expect Indian people to manage their affairs with 1975 dollars.


An hon. Member:: The government cannot manage its affairs with 1980 dollars.


James Douglas Manly: That is correct. Indian bands face a continuing problem with funds arriving late, so they are required to go to the banks to borrow money at exorbitant rates which cut into their very slender resources.
I should like to refer to some of the concerns of the people in my constituency. Last night as I was preparing for this debate, I phoned some of these people and asked them how the conditions affected them. First I spoke with a millworker who told me about some of his fellow workers who had to renegotiate their mortgages. From payments of $500 or $600 per month, their rates would be increased to $800 or $900 per month out of a take-home pay of $ 1,400, $ 1,500, or $ 1,600 per month.
This is not an isolated situation which affects just those people. We know that high interest rates mean no housing starts. Millworkers realize that when there are no housing starts, there are no lumber sales and so their jobs are threatened. The mill in which he works, like most mills in British Columbia, is stumbling along. It has no firm orders, but it is cutting lumber in the hope that markets will pick up in the spring. This Christmas, at the very time when workers are concerned that they are falling behind in some of their payments, most mills will be facing longer shutdowns than usual.
The anxiety of woodworkers is reflected in the fact that they are not making major purchases at this time of the year, such as refrigerators, sofas or stereos. We know the multiplying effect this has upon the economy. My friend pointed out that the classic system of free enterprise had completely disappeared; that many companies no longer dropped prices when sales were down; instead they raised prices to keep their profits up. This millworker wondered why it was that lumber sales were down, but profits were up.
I also talked with a small troll fisherman about the multiplier effect of what is happening. He pointed out that every fisherman is concerned about interest rates because he has to finance his operations for next year. In another three months he will be getting ready for the 1981 fishing season. High interest rates are especially difficult for fishermen who are making payments on their boats. Because of the intense ongoing gear war, fishermen have been required to equip their boats with more and more gear. They have found it necessary to borrow money in order to do that, and now they are in a real bind.
Not only does this affect fishermen, but it affects the small businessman who does business with them. I heard of the situation where one small or medium-sized supplier gave out lines of credit to several fishermen so that they could purchase gear. This is a normal procedure, but when these fishermen lost their boats because they were seized, the supplier was unable either to get his payment or to recover the gear. In this case there were seven boats affected just from one supplier.
The federal government has raised the licence fees by 100 per cent. The cost of diesel fuel has risen by one third. On top of that, Mr. Speaker, salmon fishermen on the Pacific coast face a very poor year. The catch is down by one-third, and on top of that the price of salmon has been down one-third. Many fishermen just do not know what their future is going to be; they fear that many boats will be forced out of the industry and they will not know until next season.
I talked with an elderly couple who were nearing retirement age and had their own modest home and grew a great deal of their own food in their own garden. They are beginning to look forward to receiving old age security, but they are not looking forward to it with any hope. They find the whole situation rather scary. They wonder what inflation is going to do to them once they are dependent on that pension. They are very close to the margin right now and the cost of food today hits them very hard. They ask why governments cannot do something. They ask, what is the possibility of currency controls? Who does it benefit, they ask, to keep the value of the dollar up? They certainly feel that it does not benefit them.
Then they ask whether the constitutional issue is simply a smokescreen to keep the people of Canada from focusing upon their real needs. For example, I talked to a butcher who was wondering what effect high interest rates would have upon his business. He asked how he could justify borrowing money to carry on business when he had to pay 19 per cent or 20 per cent to borrow that money. He is very much aware of the way in which cost of living increases affect people on fixed incomes. They are buying cheaper cuts and smaller amounts. He told me about some of his elderly customers who ask him to weigh a particular cut of meat. Then when he tells them how much it will cost, in many cases they have to say they are sorry, they cannot afford it, and they ask him to show them something less
December 19, 1980

expensive. He told me that it hurts him to do that, but he has to survive as well. His rent is going up. The cost of wrapping material has almost doubled over the last two and a half years and, of course, the wholesale price of beef has gone up.
Then I talked to a woman on unemployment insurance. She receives $81 per week unemployment insurance, or something like $330 per month. She has been listening to the debate and had heard Liberals say that everything was indexed. As far as she was concerned, any indexing was a sham. She said there was no way that it had risen along with the cost of living increase. She is making very high payments on oil and on hydro, since the previous summer while waiting for her unemployment insurance payments to come through she fell behind in meeting her payments. The Lord help the person who begins to fall behind in this society!
Her son is also out of work. She pointed to the fact that there were many families who have traditionally depended upon more than one wage earner, yet all of them are now out of work. She referred to the cynical statement of the Prime Minister (Mr. Trudeau) with regard to how people had to rearrange their priorities. She said that the only way you can do any rearranging is to cut down on how much you eat and skip buying clothes altogether.
The general impression I got from talking to these sorts of people, Mr. Speaker, was that they were uncertain and anxious. They were even living in fear of the future. They wanted to know where their problems were going to end. It is just not good enough for the Liberals to say that the members on this side of the House are spreading doom and gloom, because they themselves have already done that. The people already sense what we on this side of the House have been documenting for the last day and a half; they sense the frightening fact that there is no one in control.
All of the people 1 talked to felt the effects of high interest rates and the increased cost of living, but they are also able to point to other people who suffer even more from these effects. They were concerned that those least able to look after themselves were getting left behind. They do not want to go back to a dog eat dog society.


An hon. Member:: The Liberals just do not care.


James Douglas Manly: They have a sense that the Liberals are constantly dragging in the constitution in order to evade the real problems that confront the nation, that the constitution is only a smokescreen. If the constitution is only a smokescreen, then the people of Canada are beginning to see through it. Or, rather, the horrifying reality behind that smokescreen is beginning to appear.
I say to the members of this House that the unemployed woodworker on Vancouver Island has a great deal more in common with unemployed auto workers in Windsor than with any of the fat cats who talk about western separatism. The homemaker in British Columbia faces the same problems and has the same struggle to make ends meet as any homemaker in the maritimes.
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Therefore, along with other members of my party I urge the government to take this crisis seriously and make themselves aware of the way it affects ordinary Canadians. We ask them to bring in a new budget in January which will provide some real relief and get the economy of Canada moving again. We ask them to bring in a fair prices commission with the power to roll back unfair price increases, and, finally, Mr. Speaker, we ask them to get working now on an industrial strategy which will put Canadians back to work, which will bring together the resources of this country and the skills of the people of this country, and thus create an economy which will be fit for the people of this country.


Pauline Jewett: Mr. Speaker, this debate now seems to be drawing to a close since the official opposition is not rising any longer to participate.


J. Michael Forrestall: We are going to have the last word.


Pauline Jewett: They have certainly taken a breather during the last two or three speeches of the New Democratic Party, but it is quite appropriate because it was the New Democratic Party which asked that this emergency debate take place, and it has been the New Democratic Party over the past several years that has most consistently addressed the economic problems that beset this country.
After the present Leader of the New Democratic Party (Mr. Broadbent) became leader, immediately the task was set for the whole party-not just the few in the top rank of the party, but the rank and file of the party-to address the economic problems facing this country. For three and a half, almost four years, that was done both in convention of the party as well as in the caucus of the party. It was done provincially as well as federally.
One of the what I may call satisfying and exciting things about being a member of this party is that the kind of attack, the kind of philosophy and approach which is taken to all problems, but specifically, for our purposes at the moment, to economic problems, is consistent. As a British Columbian I find that the general approach of the New Democratic Party in British Columbia to economic issues of the day is almost identical to that of the federal party. 1 suggest you will find this to be so in all of the provincial parties as well as in the grassroots of the party.
1 believe that one of the reasons the Liberals and the Progressive Conservatives have not evolved over the past several years a coherent economic policy or industrial strategy, a coherent policy for bringing women, for example, into the work force at the same level of wage as men, is that they do not sufficiently encourage, it seems to me, any policy discussion in conferences or conventions where the grassroots and the interested academics and others can participate and help shape policy.
As I say, it began with the industrial strategy policy of this party about four years ago, as a result of which it has been

December 19, 1980
Economic Conditions
possible for us to develop not just vague general outline policies, but coherent and, indeed, detailed policies in all the matters that are now the subject of this emergency debate. Industrial development, industrial incentives, industrial restructuring, interest rate policies and monetary policies, and generally tax policies have all been systematically addressed by all the parties in the provinces and in the federal convention.
1 suppose one reason this party does that is because it is a social democratic or socialist party which believes in the values of long-range planning, of thinking ahead and trying to shape our life, at least in its broadest outlines, and in many cases we try to shape policies that fit into a particular philosophy. Because it does have a particular philosophy it does engage in this kind of long-range planning.
The government is suffering now, as it has probably been suffering off and on in the last many years, from failure to engage in this kind of thinking and planning. I suppose one could argue that this country has never really had an economic development policy since Sir John A. Macdonald. Macdonald's national policy is obsolete, but neither of the major parties has produced anything comparable to it in the years since.
1 thought the beginnings were coming in the late years of the Second World War and in the early post-war period. For a time it really looked as though the government of the day would develop coherent, constructive, social and economic policies. What seems to have happened at least in the economics sphere, because some advances were made in the social sphere, is that the guru of the day, the late C. D. Howe, persuaded the prime ministers of the day, Mr. King, and Mr. St. Laurent, that the best direction for Canadian economic policy to take was to dismantle much of the very industrial structure that he had set up or had helped to set up during the Second World War. He wanted to dismantle it and turn it back to the private sector, whether Canadian or American. Indeed, he himself, as hon. members will see-1 am sure many have read the biography which was recently published on C. D. Howe-had a proclivity toward continentalism which has probably not been matched, even by the Liberals. Therefore, it really did not matter to him that you had something focused in Canada done by Canadians for Canadians, even though it had mattered to him in the war, because in the war there was no alternative; we had to do things ourselves.
It did not seem to matter after the war and, as a result, Canada started them on its continental drift it has been on ever since. One of the fundamental reasons we are facing this emergency today and the kind of economic problems we face today is because we sold out our economy and control over our economy, our resources, interest rates and all aspects of control in the economic sphere, despite efforts by the Hon. Walter Gordon and a few other Liberals who in my view really tried hard. There are approximately four who are still trying hard. But despite all their efforts, the sell-out continued and, indeed, it has worsened in the last ten years.
For example, there is the Gray report. The hon. member for Windsor West (Mr. Gray) is one of those who is concerned. But at the time of his report he thought the situation was
almost beyond recall. The situation is twice as bad today. We have nobody in power who wants us, as Canadians, to be masters of our own economy. This is not to say that our economy is not highly interdependent. Of course, it is. But we in Canada wanted to be the ones to say how we fit into the rest of the world and not have the U.S. or any other country for that matter-particularly the American multinationals- telling us how we fit into the rest of the world. That has just been lost.
The difficulty may be with the Prime Minister (Mr. Trudeau) because economic policy has never been his long suit. Indeed, he has vacillated from a pale imitation of John Kenneth Gailbraith, in the famous Christmas message of 1975, I think it was, and from the position that the free market system was not working-as indeed it was not-to one which can only be described in the last two years as a Milton Friedman approach. They defer to the Bank of Canada and most small "c" conservative economists in the country.
Starting around the late summer in 1978, the Prime Minister seemed to have suddenly embraced this incredible monetarism, to a greater extent even than Margaret Thatcher or the American democrats, and probably more, if one could think it possible, than is likely to come about under the republicans in their new administration. So how can a party be sure where it is, or whether it is going anywhere in terms of economic policy, when its leader does not know and vacillates from one extreme to the other in a two and a half to three-year period?
To my mind there have been two enormous difficulties. There has been a lack of grass roots participation in the development of economic policy in the Liberal party and there has been the lack of interest on the part of the leader of the party itself. And so it has continued. There was one short break. That was when the Liberal party decided to adopt our suggestion about the creation of Petro-Canada. That was a constructive step to ensure that at least we had a window on the resource industry. It did not work out quite that way, but it was at least an attempt to preserve the public interest as far as the resource industry of this country is concerned and, indeed, as far as the whole economic nature of this country is concerned.
Apart from this there is very little evidence that the government is willing, able or perhaps even concerned enough to start to become masters of our own House and to develop an economic strategy and an industrial strategy. It is not easy. One has to say which industries are good, efficient and able and which industries are not. One must have means of restructuring, of dealing with structural inefficiency; one must possess the will to do it and the means to relieve the difficulties which that process in itself will create, so as to ensure that Canada is a leading nation in the high technology industry and the electronic and communications industries. We are on the brink of an information revolution. It is here. Some people on the government side, I think, have even heard of Telidon.
But what help has there been? What policy has there been ? If one compares the government's record with that of the United Kingdom, France, Japan or the U.S. and the kind of
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encouragement they have given to high technology industries, our record is shameful. The government does not care, for example, if the banks in Canada decide they are going to have their data processing done in the United States. They do not care about the data processing firms in Canada.
They do not care to encourage the computer software industry and yet of all areas in which we should have been giving assistance, this is the one. Do not say that assistance is only given in countries where computer software is used for military purposes. Japan has given enormous assistance to this industry which was in no way for military purposes. It may have a lot to do with the military in the United States but not in Japan nor in many other countries where it has been developed. We would not be in this crisis today if there had been a little more forethought about where Canada had expertise and where Canada could move. I think we all agree we have the expertise in most of what I call the communications based industries.
The government is responsible for the situation we are in today. 1 believe this is the longest consecutive debate since 1913 and I hope that as a result, the government will now bring into its ranks those who think in terms of economic planning, forethought, restructuring and development by Canadians for Canadians. Surely it is not too late for that.


J. Michael Forrestall: Mr. Speaker, my intervention will be relatively narrow in its content. Hopefully the points made by the opposition in the last day have been of some importance to government and they will have an impact which can be measured. It is interesting to note, as the hon. member for New Westminster (Miss Jewett) just said, you cannot spend more than you earn and hope to own anything. Because of the phrase she used, I would suggest that most socialist teaching, modern economic socialist order, would seem to shore up the thought that socialists are not savers, but spenders. Taxation, which has not changed, is nothing more than a policy which gives people incentive. It gives people a reason for work and pride in their country and in their community. The last speaker, given her great love for order and planning, makes one wonder why she left her former job with such chaotic nightmares of administrative horror which caused some problems for her successor. I have an area of deep concern that I want to talk about. I regret the Minister of Transport (Mr. Pepin) is not in the House but I am pleased to see the government House leader is here. I want to take advantage of the few minutes that 1 have to talk about one of those infernal documents, most of which I put to one side and rarely peruse. I am speaking about one of those documents called Brown envelope documents. My concern has to do with a very high level move arising out of a dictate by this government involving air transport, which is facing massive federal expenditures. The air administrative branch of government has been charged with reducing costs and increasing user-pay fees. I believe they now call it revenue dependency, a phrase which seems to have current vogue on the other side. In any event,
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facing the developments in the Arctic with respect to Arctic air services, the government recognizes that the day of the beaver and the otter is rapidly coming to an end for extensive Arctic travel.
The government knows that runways will have to be extended to accommodate larger aircraft, including jets, and the facilities to support these aircraft will result in enormous expenditures on the part of government. The requirement for brand new facilities in the Arctic to accommodate these larger aircraft will in themselves be even more strenuous on the federal government purse. The Arctic air people, the Department of Transport and the air administration people, have been charged to get rid of all of the air facilities in the Arctic, in a recent briefing, it was proposed to drop the special Arctic airport classifications and using the national airport classification system. It proposes a new administrative arrangement investing full control over operations maintenance, upgrading and replacement in the territorial government's hands. If this is carried through, the impact is obvious. It poses two problems. First, while there is massive potential for revenue sources in the Arctic, the means of realizing that revenue are not yet in place. In fact, that is probably not possible before the end of this century. There is a requirement from the Treasury Board to the air administrative branch to divest themselves of all of that capital responsibility. Indeed, the information I have suggests even those aspects of air transport having to do with navigational aids, traffic control, local terminal control and so on, areas which are almost sacred with respect to single authority control, now vested and should remain vested in the federal authority of the Department of Transport, should be transferred to the territorial council. That in itself poses two problems. I cite the problems and the resolution to indicate to you how determined the government is to avoid spending money down the road on behalf of Canadians.
Let me preface it by saying this: having been charged with reducing costs, by increasing revenues-I suppose it is Otto Lang's user-pay principle which is now back in vogue, if only in higher internal circles-but let us look at the impact of this. Having been directed by TMAC to keep abreast of inflation and consider new sources of user-charges to the extent that such practice will "not create problems", in other words, the minister Jean has indicated that just to stay abreast of inflation increases of some 20 per cent across the board will be required. This is instead of recognizing that public transport policy must, simply stated, ensure that it does not in one way by not ensuring neutrality infer special services or capital advantages for any one mode, public or private, over any other. Competitive neutrality should be the goal, not user-pay charges and usury pay under the guise of revenue dependence.
The result of pursuing the policy that they are will force an undue competition, both advantage and disadvantage of the various modes, private and public operating in the Arctic.
1 mention these things because it seems to build into our system problems which we are not going to be able to overcome until we recognize a relatively fundamental fact. That is the problem-
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Economic Conditions
The only way to reduce core inflation is by reducing the deficit. I commend to the government and its supporters a new book which will shortly be in their hands entitled "A Way Out". Its authors will command, by their names and performance within government ranks in the past, their attention and concern.
With respect to transport facilities, we have to bring capital indebtedness into line. We should be considering, as we have done to some degree in the past, writing off all the old historical debt and bringing new capital assets closer into line, and on that basis eradicate the historic debt and determine what are the fair charges.
We should encourage competition within both the private sector and the public sector, as well as competition between the two sectors. When we do that, we can determine the degree to which we own and control our own destiny and our own country. Revenue raising in isolation has never worked. It will not work here in Canada.
With respect to the Arctic and what is proposed, as I indicated, the direction is to vest in the territorial government all control over operation, maintenance, upgrading and replacement of the air facilities. That poses a question. How do you vest in the right of Canada something that is already in the right of Canada? If the direction is to turn over all of these facilities to the territorial governments, how do you do it?
If time permitted, I would read the question put to the legal counsel beause the response to it is rather intriguing. The powers of the commissioner in council in the Northwest Territories and in the Yukon are under the Yukon Act and the Northwest Territories Act. As we all know, they are subject to the laws of the Parliament of Canada. Consequently, it does not seem possible for the commissioner in council to construct and maintain airports since his powers and duty are now and have always been vested in and assigned to the Minister of Transport.
There is no means we know of to do that sort of legislation in this House. The government does not want to do that. I am talking about the subterfuge and the way you go at these things.
The legal advice of the Crown to those who have to sort out how to get out from under this situation is for the governor in council, upon submission to the Treasury Board and the governor in council by Transport Canada and Indian Affairs and Northern Development, possibly under the Public Works Act, to transfer the existing B & C airports and the duty and maintenance attached thereto to the Minister of Indian Affairs and Northern Development.
This is where it gets very interesting. Then the minister could possibly, under the Yukon Act and the Northwest Territories Act, direct both commissioners to operate and maintain these airports and, second, under the Territorial Lands Act with the approval of the governor in council, transport these airports to the Territories.
Who is going to pay for them? How would the people of the Arctic pay for them? At one point it was acknowledged quite openly that the first, direct and recognizable result of such a policy would be the downgrading of the level of service to people living in the Yukon and in the Northwest Territories.
It was recognized that option two as well as option three would provide a lower standard of service than has been provided under the existing policy. Fuel facilities should be provided only where necessary to regulate operations. There is nothing about expansion, nothing about new runway requirements. The change is there, to be determined not by airport classification, but by critical requirement. In other words, are we handling 185 Cessnas or 737 Boeing jet aircraft? There is quite a difference.
These questions need a much closer review than can be brought to bear today in the limited time available. After the New Year when this session resumes, it will be the intention of several of us on this side to pursue the matter with respect to aircraft facilities because of the cost burden and stresses placed upon the territorial council and the Yukon. The point is whether the government, floundering around as it is, is justified in the action it has taken in many areas. They are the ones who have been here most of this century.
We must determine whether this subterfuge has been transferred to other sectors of our economy and other sectors of government. It is demonstrated in these documents, indeed, it is argued, that decisions such as this should not come before government, but rather should be handled internally at the ADM level. There is no need to bother the economic development committee because it is too busy. Wherever possible these should be made before getting remotely close to the responsible authority, which is government. I object to behind-the-scenes deals being cooked up which ultimately will cost the competitive market and cost dearly the people in the Arctic who have to use air service to maintain their livelihood and freedom to move around.
What every member on this side has talked about in the past two days has been relevant. What will make that relevancy credible can only come from direct action by government in areas of high interest and the impact it is having on our economy and on the free marketplace. It will only come when government moves and acts credibly in response to the suggestions. Dozens of good suggestions have come from this side of the House in areas of housing, underemployment, unemployment and community work. Above all, attention should be given to the fact that this government is only feeding and perpetuating the problem.
It is to be hoped that the time has not been lost and that the government has in fact paid attention. It has been demoralizing to sit here on this side of the House throughout the day and take note of the almost total absence of ministers, the number being down to one more frequently than not. There has very rarely been anybody on the treasury benches. In fact, at this time there are only two occupants.
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There are many things this government can do, I think we have been relevant in this debate. 1 think the credibility and the responsibility for the credibility of that relevancy lies now with the government. It is up to the government to take some positive steps and to do these things which have been suggested which may ease the burden on the people in this country. Above all, from the very narrow point I have been addressing this evening, the government should at least return some credibility to its process and structure and once again accept responsibility for decisions which directly affect people and the regions.


Stanley Howard Knowles: Mr. Speaker, 1 am sure that the House will be glad to know that I have been able to persuade a few of my colleagues and myself not to extend the debate any further. I rise simply to express the hope that was included in the closing words of the hon. member for Dartmouth-Halifax East (Mr. Forrestall), namely, that the government will realize how serious the situation in this country is when we have debated it for these 23 hours. We earnestly hope that the concerns which have been expressed by many members last evening, all night long and today, will be given the consideration they deserve by the government during the next two or three weeks.
We look forward with hope to some positive measures being brought before the House when we come back in January.


Walter David Baker: Mr. Speaker, I share those sentiments. I think history will note that this has been the longest debate under Standing Order 26. Subject to verification, I believe that is so, but in any event, I am glad to see at the closing of the debate that the government House leader is here, and I hope he will convey to his colleagues in cabinet the concerns which have been expressed in this House about the economic crisis in the country.


Yvon Pinard: Mr. Speaker, after listening to my colleagues and having heard most of the speeches made in the last two days, 1 believe that I can easily conclude that the lengthiest debates are not necessarily the most fruitful. Moreover, 1 believe that the many speeches made last night and today prove without a doubt that several members would have every advantage in rereading carefully our budget and energy policy since a better understanding of these policies would certainly have led them not to make the types of speeches that we have heard.
In any event, I have no objection to the procedure itself as this debate is absolutely legitimate and in order. The opposition exercised its fancy, or rather its privilege or its right, and the fact that this debate lasted for as many hours as it did should not be criticized. As government House leader, I have had to reply to several questions from my colleagues here and outside the House, and I now repeat publicly what I have told others, and that is that the opposition members should not be
Economic Conditions
blamed as the procedure was quite normal and legitimate. I do not want to make any judgment on the ruling of the Speaker to allow this special debate. However, as I said earlier, with all due respect for my colleagues, I must say that several members would have had advantage in reading more carefully our budget and energy policies and in giving these policies more time to become effective. We could then have avoided a debate which has been much too lengthy in my opinion and which history will show to have been nearly useless.
In closing, Mr. Speaker, I simply want to offer my best wishes to all the employees of the House of Commons who have had to work very long hours because of this debate and wish a Merry Christmas and a Happy New Year to all my colleagues on both sides of the House.

Mir. Baker (Nepean-Carleton): I make no comment on any other remark by the President of the Privy Council (Mr. Pinard) except that I would like to join him in the statement he made with respect to the staff of the House of Commons. As the House knows, there was a resolution earlier, but that was some time ago and the debate has since extended beyond that time. I think the sentiments of that earlier motion should be renewed now as this debate closes. In that sense I would like to join with the President of the Privy Council in expressing our thanks to the House and to the staff of the House of Commons. Some of them have laboured very long and very hard, and all of us should be grateful. I suggest respectfully that this is perhaps the best served legislative assembly in the world.
'Mr. Knowles: Now that we seem to be on a point of order, Mr. Speaker, I should like to join in associating the members of this party with the members of the other parties in wishing the very best for Christmas and the New Year to the staff of the House, to all those who occupy the Chair, to all those at the Table, and also our best wishes to all members of the House and their families.


Marcel Prud'homme: December 19, 1980


The Acting Speaker (Mr. Blaker):: In the absence of any other members who may wish to be recognized to enter debate I am pleased to inform the hon. member for Dartmouth-Halifax East (Mr. Forrestall) that he was the seventy-third and final contributor to the debate on this subject.
Motion (Mr. Broadbent) agreed to.


The Acting Speaker (Mr. Blaker):: Pursuant to order made on Tuesday, December 16, 1980, this House stands adjourned until Monday, January 12, 1981, at two o'clock p.m. pursuant to Standing Order 2(1).
Before we disperse may 1 extend on behalf of Madam Speaker her invitation to join her in the usual and traditional libation? This invitation is extended not only to those hon. members who are present but also to some who may still be in the precincts as well as others who have been involved in assisting hon. members.
Merry Christmas!


Stanley Howard Knowles: Same to you!
At 7.09 p.m. the House adjourned until Monday, January 12, 1981, at 2 p.m.

Monday, January 12, 1981