1981-11-17

ROUTINE PROCEEDINGS


Mr. Len Gustafson (Assiniboia):: Madam Speaker, I rise under Standing Order 43. The November 12 budget of the government has been a direct attack against farmers in the area of capital gains tax, annuities, and retirement savings plans, bringing to an end for many the only retirement plan they have. I move, seconded by the hon. member for Bruce-Grey (Mr. Gurbin):
That this House call on the government to reverse this action with regard to farmers.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Bud Bradley (Haldimand-Norfolk):: Madam Speaker, I rise under the provisions of Standing Order 43. Massey-Fergu-son has now essentially closed down its Canadian operation, stating interest rates and the sliding economy as the cause. Surely the government can read the signs. If drastic steps are not taken immediately, and I do not mean a pittance like in the so-called budget, many more agricultural related industries are going to follow Massey-Ferguson. In fact, agriculture itself as we know it in Canada could well be at an end. I move, seconded by the hon. member for Assiniboia (Mr. Gustafson):
That this government immediately take steps to force a massive drop in interest rates and offer agriculture some incentives before it is too late for agriculture-related industry, its workers, and agriculture itself.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE BUDGET
Mr. Peter Elzinga (Pembina):: Madam Speaker, whereas the Minister of Finance (Mr. MacEachen) has presented a budget which calls for an increase of 22 per cent in government expenditures while at the same time doing absolutely nothing for the poor, the pensioners, and does next to nothing to alleviate the desperate situation facing home owners, small businesses and farmers, I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That this House condemns the Minister of Finance for holding out false hopes to Canadians as they waited for the budget to be presented, and that because of the little impact the budget will have in alleviating the serious problems facing farmers, home owners, small businesses and pensioners, that the Minister of Finance do now resign.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


TAX EXEMPTIONS FOR NORTHERN RESIDENTS-MOTION UNDER S.O. 43
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, since the Minister of Finance (Mr. MacEachen) stated in his budget speech that "I am extending for another year the special tax remission to employees working in the north and isolated posts," and since once again the minister in his speech did not give a full accounting of the truth, in that any collective agreement signed after November 13, 1981, will not be allowed to grant tax-exempt benefits for northern residents in the coming year, and all tax arrangements after January 1, 1983, are cancelled, I move, seconded by the hon. member for Skeena (Mr. Fulton):
That this House condemn the government for removing tax-exempt benefits for northern residents without providing an alternative, and that this House notes the addition to parliamentary language of the term "a MacEachenism", meaning a half-truth, a statement which has the effect of leaving a false impression, and notes further that this budget literally sparkles with such "MacEachenisms".


Some hon. Members:: Hear, hear!

November 17, 1981


Mr. MacEachen:: Madam Speaker, I rise on a question of privilege.


Madam Speaker:: Order, please. I cannot hear what the minister is saying.


Allan Joseph MacEachen: Madam Speaker, I am rising on a question of privilege to state that the hon. member is making a false statement. The full details were laid out in the budget documents tabled in the House at the time of the budget. You are not going to get away with half-truths, "Boy-Bob".


Madam Speaker:: Order, please. The minister may raise a question of privilege, but not at this time.
Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SMALL BUSINESS DEVELOPMENT BOND PROGRAM-MOTION UNDER S.O. 43
Mr. Don Blenkarn (Mississauga South):: Madam Speaker, in the budget the Minister of Finance (Mr. MacEachen) gutted the Small Business Development Bond. Growing small business offers to Canadians more opportunity for employment than any other economic activity in our country. By allowing small business to borrow on a preferred basis for new capital equipment, we create jobs and stimulate productivity. 1 therefore move, seconded by the hon. member for St. Catharines (Mr. Reid):
That the Minister of State for Small Businesses take his responsibility seriously, negotiate with the Minister of Finance, and reinstate at least for a one-year period the Small Business Development Bond.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Jack Shields (Athabasca):: Madam Speaker, figures released yesterday show a 25 per cent increase in farm bankruptcies in the ten-month period beginning January, 1981, over the same period one year ago. The measures taken by the government to extend the Small Business Development Bond to assist unincorporated farmers in financial distress, and the addition of $50 million to the lending capital of the Farm Credit Corporation, again to assist farmers in financial distress, will at best help approximately 250 farmers across the country. Whereas there are over 5,000 farmers across the country on the verge of bankruptcy who need assistance now, I
move, seconded by the hon. member for Peace River (Mr. Cooper):
That the Minister of Finance be directed to implement immediately a program to assist those estimated 5,000 farmers across the country who are on the verge of bankruptcy or forced sale.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE BUDGET
Mr. Dan Heap (Spadina):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas the Minister of Finance (Mr. MacEachen) announced on November 12 in his new budget that taxpayers will no longer be permitted to claim any deductions in respect of their non-resident dependants other than their spouse and children; whereas Canada continues to bring in immigrants and migrant workers to do the hardest and lowest paid work, knowing that many do this in order to assist their parents, brothers, sisters and other needy dependants back home; whereas the minister's proposed law, therefore, discriminates against workers in Canada with dependent relatives overseas and mocks our claim to be a multicultural society; and whereas the minister's accusation of fraud would be more justly directed at high-income-tax-evaders, I move, seconded by the hon. member for Broadview-Greenwood (Mr. Rae):
That this House direct the minister to delete the clause that prohibits tax deductions for non-resident dependants other than spouse or children.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
Mr. Stan Schellenberger (Wetaskiwin):: Madam Speaker, early last spring the Minister of Indian Affairs and Northern Development (Mr. Munro) undertook a joint review with the Minister of Justice and Attorney General (Mr. Chretien) to determine whether the spirit and intent of the James Bay Agreement had been breached. In view of the fact that this
November 17, 1981

review is now many months overdue, and because of the great implications that it will have for all future land claims settlements. I move, seconded by the hon. member for Athabasca (Mr. Shields):
That the Minister of Indian Affairs and Northern Development act immediately to table the joint review of the implementation of the James Bay Agreement, and make a special reference to the Standing Committee of Indian Affairs and Northern Development to study the report.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENSIONS
Mr. Neil Young (Beaches):: Madam Speaker, I also rise under the provisions of Standing Order 43. In view of the government's failure in last week's budget to relieve the financial crisis that most of Canada's senior citizens find themselves in as a result of inadequate retirement income policies, even after the much hyped National Pensions Conference held earlier this year, and in the absence of the hon. member for Winnipeg North Centre (Mr. Knowles), I move, seconded by the hon. member for Oshawa (Mr. Broadbent):
That this House condemn the government for ignoring the needs of senior citizens in last week's budget and for not raising retirement incomes to a level beyond poverty levels.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Tom Cossitt (Leeds-Grenville):: Madam Speaker, my question is directed to the Minister of Finance. I shall refer to a newspaper advertisement headed "Attention Home Owners" placed by Canada Mortgage and Housing Corporation, over the name of the minister of housing. It provided details of the budget's housing interest and grant provisions, sent out the day before the budget to a number of newspapers by Vickers and Benson of Montreal. By admission of this agency to my office
Oral Questions
by telephone a few moments ago they stated that they were desperately trying to cancel the ad a day later by telegrams, after it had arrived camera-ready for printing at newspaper offices, and it actually had already been published in some papers by Friday noon, one of which I have here.
This is an obvious leak of budget material. Would the minister explain this sordid situation to the House of Commons?


Allan Joseph MacEachen: Madam Speaker, I did not place the ad. Canada Mortgage and Housing Corporation is not under my jurisdiction. If the hon. member wants me to make further inquiries, I would be glad to do so, but I cannot give him the information at the moment.


REQUEST THAT MINISTER CONDUCT INVESTIGATION
Thomas Charles Cossitt: Madam Speaker, is the Minister of Finance prepared to conduct a full investigation not only on that, but to have this referred to a parliamentary committee? If it is established that there has been a leak of the budget or of any of the provisions in the budget, is he prepared to stake his office and resign, which is the commendable and usual procedure? Is he prepared to do that?


Allan Joseph MacEachen: Madam Speaker, I would be quite happy to make further inquiries. Maybe the hon. member would ask the minister of housing the question and the matter then could be cleared up quickly.


STATEMENTS MADE BY MINISTER RESPONSIBLE FOR CANADA MORTGAGE AND HOUSING CORPORATION
Thomas Charles Cossitt: Madam Speaker, I would like to direct my question to the minister of housing. He stated, in reply to a question in this House last Tuesday that was asked by the hon. member for Simcoe North, that:
I do not know what will be in the budget on Thursday night.
Later he added:
-as the minister reporting to this House for Canada Mortgage and Housing, 1 do not know of the contents of the budget affecting housing.
In view of the advertisement which I have just mentioned, will the minister of housing tell the House whether he was misleading the House last Tuesday, and did he indeed know what the provisions were? Is he so weak in cabinet that the housing program was not known to him and was simply thrust into his hands afterwards? Finally, did he play a part in what is an obvious sordid leak in the budget?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, I learned generally of the provisions of the budget as they pertain to housing at a briefing of the cabinet by the Minister of Finance on Thursday afternoon. I learned specifically and saw the budget documents a few minutes before they

November 17, 1981
Oral Questions
were presented by the Minister of Finance in the House. My officials worked from five o'clock in the afternoon, through the evening, and early the next morning, and produced for my inspection that document which had been worked upon. It was authorized at noon on November 13 as a result of a meeting of the communications cabinet of the Government of Canada, as I say on Friday, November 13.


TIMING OF PREPARATION OF ADVERTISEMENT
Thomas Charles Cossitt: Madam Speaker, I have a final supplementary question. I do not wish to question the minister's integrity because that is not the honourable thing to do. How can he explain, if this was not authorized until noon on November 13, that it was in the hands of The Recorder and Times of Brockville on the morning of November 13, and prepared by Vickers and Benson in Montreal on November 11, the day before the budget? How can he explain that?


Some hon. Members:: Shame! Shame!


Thomas Charles Cossitt: If he wishes, madam Speaker, I can give him later the name of the person in Vickers and Benson who told me this.


Madam Speaker:: Order. Order. We have had the question.


Paul James Cosgrove: Madam Speaker, I would be repeating my answer to say that the officials of Canada Mortgage and Housing Corporation worked on the material after I was made knowledgeable of the material on the afternoon of November 12.


Mr. Nielsen:: You are caught.


Paul James Cosgrove: That material was circulated. Approval for the printing and the release of the material was not made until noon on November 13. At that time we advised people who may have had the material on November 13 whether or not it could be printed.


REQUEST FOR EXPLANATION FROM MINISTER
Hon. James A. McGrath (St. John's East):: Madam Speaker, my supplementary question is directed to the same minister. I would caution him that we are dealing with a convention which Madam Speaker identified on November 10, that is the convention whereby a minister resigns if there is a budget leak. But there is another convention which is equally important, if perhaps not more important, that is, that an hon. member resigns if he is found to be misleading the House. I put that caution to the minister, because he assured the House, as reported at page 12690 of Hansard on November 10, of the following:
I do not know what will be in the budget on Thursday night.
Yet I have an advertisement which was placed in the hands of an advertising agency, Vickers and Benson, on Wednesday, November 11. It is over the authorization of the minister
responsible for Canada Mortgage and Housing Corporation, and contains clear details of the housing provisions of the budget. Can the minister explain to the House how such an ad over his authority could go out without his knowledge?


Paul James Cosgrove: Madam Speaker, I would be repeating myself, and I will do it once again-


Some hon. Members:: Oh, oh!


Paul James Cosgrove: I was advised generally of what was in the budget at a briefing by the Minister of Finance on the day of the budget, in the afternoon. I did not know the specifics of that until later in the afternoon, some few moments before the budget was presented by the minister in the House. I had presented, as hon. members will find, advice and recommendations to the government to be prepared to advertise, to be prepared to let the public know of any relief that the minister would grant, any relief that the government would ensure through the budget process. That material was obviously prepared. A number of suggestions were made to the minister; not all of them appeared in the budget. Some of them were prepared in advance, on the option that it would be one of the ones that was adopted by the government.


Some hon. Members:: Oh, oh!


ACQUISITION OF INFORMATION BY ADVERTISING AGENCY
James Aloysius McGrath: Madam Speaker, that reply coming from even this minister boggles this House. That is stretching coincidence beyond the point of credibility. I want to ask the minister if he can tell the House how Vickers and Benson Ltd. got a copy of the precise details of the minister's housing provisions which were contained in the budget of November 12. How could Vickers and Benson Ltd. have those details on November 11 in order to get them into the hands of the press?
Second, may I ask the minister if, when he became aware of the provisions of the budget early on Thursday, he discussed them with anybody in Canada Mortgage and Housing Corporation, with anybody in Vickers and Benson Ltd., or with anybody else?


Paul James Cosgrove: Again, Madam Speaker, I did not now the specifics of the plan that is referred to in the ad the hon. member has before him until a very few moments before the minister read the budget in this House. Later on, and during the presentation by the minister, obviously officials at Canada Mortgage and Housing-and I would guess at this-communicated that that ad probably met the provisions of the budget, but no doubt they were checking.


Some hon. Members:: Oh, oh!


Paul James Cosgrove: Further, I have indicated to the House that it was not until a meeting of the cabinet communications com-
November 17, 1981

mittee of this government at noon on the thirteenth that that ad was authorized to be put out for advertisement in the newspapers the following day.


PRESENCE IN GALLERY OF MINISTER OF STATE FOR INTERNATIONAL COMMERCE OF ROMANIA
Madam Speaker:: I wish to call to the attention of the House the presence in our gallery of Mr. Alexandru Margaritescu, who is Minister of State for International Trade of Romania.


THE BUDGET
Mr. Edward Broadbent (Oshawa):: Madam Speaker, my question is adressed to the Minister of Finance. The minister knows that Canadians will face the largest number of pre-Christmas lay-offs in the history of the country since the Great Depression. He also knows from his own budget that unemployment is going to increase in 1982, 1983 and 1984. Considering that the government has decided to increase its advertising budget by some 50 per cent, up to some $100 million, why could the government not find room in its budget for a single new job-creation program?


Allan Joseph MacEachen: Madam Speaker, there are within the Fiscal plans proposed in the budget very substantial expenditures for job creation. The hon. member will realize that there is a Community Employment Program that will be in place this winter and will assist the unemployed. There is a sum of about $300 million available for adjustment programs in this particular winter. If he had looked at the fiscal plan itself, he would have noticed, for example, that this year the expenditures in the budget of the economic development envelope have increased by about 30 per cent. So it is not true, as the hon. member alleges, that no attention has been paid to job creation. Substantial funds will be available this winter to assist the unemployed.


THE ADMINISTRATION
John Edward Broadbent: Madam Speaker, I have a question for the Prime Minister. I would say at the outset that the Minister of Finance knows there is a net reduction in the amount of stimulus going into the economy with this
Oral Questions
budget, not an increase. He should know that better than anyone else.
My question to the Prime Minister is on a different aspect of the government's alleged concern about the economy. I refer specifically to his urging Canadians to practice restraint. Yesterday the Minister of Finance entertained a dozen journalists, at public expense, at a luxury luncheon costing some $2,000.


Some hon. Members:: Oh, oh!


John Edward Broadbent: Two thousand dollars for one luncheon, I say to the Prime Minister, is the same amount a pensioner would spend all year on his or her food bill.
I would like to ask the Prime Minister does he not think that this extravagance at public expense totally undermines the government's appeal for restraint. If he does agree with that, what does he plan to do about it?


Allan Joseph MacEachen: Madam Speaker, I am happy to answer that question on behalf of the Prime Minister, first of all because I know the facts. It is obvious that the hon. member does not know the facts; but the facts, as I know them, are quite unacceptable. It is true-


Some hon. Members:: You're right!


Mr. Kempling:: We agree!


Allan Joseph MacEachen: It is true that yesterday I hosted a luncheon for a number of my colleagues and for a number of journalists.


Some hon. Members:: Why?


Allan Joseph MacEachen: I want to give the facts to the hon. member. Unfortunately, I did not select the menu, nor the site.


An hon. Member:: Who did?


Allan Joseph MacEachen: I do admit that I am highly embarrassed about the situation as it was much too lavish. When I returned to my office directly after the meal, I issued instructions that the bill be sent to me, because in no way would I ask the taxpayers to foot the bill for a lavish occasion which I had not anticipated.


Some hon. Members:: Hear, hear!


REQUEST FOR MINISTER'S RESIGNATION
John Edward Broadbent: Madam Speaker, it is obvious to everyone on this side of the House, and to the people of Canada, that the minister would not be paying that bill if he had not been caught.


Some hon. Members:: Hear, hear!

November 17, 1981
Oral Questions


John Edward Broadbent: If the government is now going to pay for that luncheon which he should never have had in the first place, to be consistent with this new-found morality in the Liberal Party, will it now pick up the $30,000 tab, the cost to the taxpayers to fly three ministers by jet to Winnipeg?


Some hon. Members:: Hear, hear!


John Edward Broadbent: Will the government do that? Will the Liberal Party do that? More specifically, I would like to ask the Prime Minister, since there is nothing in the budget for the unemployed and not a cent for pensioners, and since we have a hypocritical minister who goes around doing the opposite to what he is preaching, why does the Prime Minister not show just a little integrity for once on this issue, and demand his resignation?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, I just want to clear up one or two points made by the hon. member. The first is that he has used totally exaggerated cost figures for that luncheon. It was bad enough the way it was.


Mr. Andre:: How much did you pay?


Allan Joseph MacEachen: When I get the bill, I will be glad to send a copy to the hon. member with a copy of my personal cheque. However, let me tell the hon. member that there is no question of getting caught, because when I returned to my office I issued instructions immediately that the bill be sent to me. I did not have to wait for his moralizing, or reports in the press. I knew my responsibility the moment I attended that event.


Some hon. Members:: Hear, hear!


THE BUDGET
Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is directed to the minister responsible for housing who has indicated to us the date of the authorization of this ad by a committee of cabinet. That is not the date in question. The date in question is the date on which budget information was made available to an advertising agency in advance of the publication of the budget.
Is the minister telling the House of Commons that he authorized CMHC, or that CMHC acted on its own, to prepare several ads setting forth various options of policy that might appear in the budget and that those several ads were set out? Is that what the minister is telling the House? If it is, will the minister tell the House of Commons how many ads were
sent by Vickers and Benson on behalf of CMHC to the Brockville Recorder and Times.


Paul James Cosgrove: Madam Speaker, the ads to which the Right Hon. Leader of the Opposition refers set out in very brief form the two points of the mortgage renewal plan.


Erik Nielsen: How many ads?


Paul James Cosgrove: The first is interest deferral, and the second is a grant provision.


Erik Nielsen: How many ads?


Paul James Cosgrove: That ad was prepared and authorized on November 13 to appear in the weekend newspapers. I thought it was important that Canadians should know what was proposed in the budget, vis-a-vis assistance to home owners across Canada.


Donald Alex Blenkarn: That is not correct.


Paul James Cosgrove: I say that because this House has received, and your office, Madam Speaker, has received in the last few weeks petitions containing over 10,000 signatures of Canadians. These people are inquiring about the government's position.


Erik Nielsen: How many ads?


Paul James Cosgrove: Inasmuch as I personally had to take it upon myself to respond individually to over 11,000 of those people, by writing over 30 hours over the past week-


Erik Nielsen: How many ads?


Paul James Cosgrove: -when the hon. member did not respond, I felt that was the only way by which we could communicate effectively and immediately to the Canadian public.


Some hon. Members:: Hear, hear!


Erik Nielsen: How many ads?


NUMBER OF ADVERTISEMENTS ISSUED TO NEWSPAPERS
Charles Joseph Clark: Madam Speaker, what the minister is now saying is, first, that he is admitting that the detail in the ad was the precise detail that occurred in the budget. If I understand him correctly, he is also suggesting that the advertisement was prepared after it was received by the Brockville Recorder and Times. That stretches credibility even of this minister to some degree. He did not tell us whether or not other ads were sent to that newspaper or to any other newspaper. That is the question I put. How many other ads were sent by Vickers and Benson, authorized by the minister or by CMHC, to the Brockville Recorder and Times or to any other newspapers? How many ads?
November 17, 1981


Paul James Cosgrove: Madam Speaker, I do not know how many ads.


Some hon. Members:: Oh, oh!


Paul James Cosgrove: Whether there were different ads sent to one of some 140 newspapers across the country on the twelfth or thirteenth of this month, the end of last week, I do not know.


An hon. Member:: Squirm.


Paul James Cosgrove: But I repeat once again that the provisions of that ad were reviewed by the cabinet committee on communications on Friday the thirteenth.


Some hon. Members:: Oh, oh!


Paul James Cosgrove: A number of suggestions were made regarding changes. None were made. The ad was authorized during that meeting.


RELEASE OF INFORMATION TO ADVERTISING AGENCY
Charles Joseph Clark: Madam Speaker, we now know that the breach occurred not simply in one newspaper but, by the minister's own admission, in some 140 newspapers across the country. We do not know whether the contents of the ads were the same in all cases. The House has not yet been informed whether other budget information was released to Vickers and Benson prior to it becoming public to Canadians through the budget presentation, and consequently was a breach of budget practices.
My question is for the Minister of Finance. Who gave the precise details of the budget proposal on housing to Vickers and Benson in time for them to have the advertisement prepared on November 11? Who gave that information? If the minister cannot give me an answer today, will he give us an undertaking that he will come back with details tomorrow and tell us precisely who gave that information, at what precise time, and on whose authorization?


Erik Nielsen: Gerry Regan.


Allan Joseph MacEachen: Madam Speaker, I already indicated that I do not have the responsibility for advertising, either in that department or in any other. I have no information on the subject. I think the minister to whom questions have been addressed has been answering them very fully. I would recommend that the Right Hon. Leader of the Opposition ask him for further information.


QUERY RESPECTING DRAFTING OF ADVERTISEMENT
Mr. Chris Speyer (Cambridge):: Madam Speaker, my question is also for the minister responsible for housing, and it is very specific. I would like to know whether or not it was Vickers and Benson who drafted the ad. Specifically, who drafted it, on whose instructions, and at what point in time
Oral Questions
prior to the release of the budget did instructions go to Vickers and Benson that this ad could be released?


Paul James Cosgrove: Madam Speaker, I would be repeating myself to say that the ad was not authorized until following a meeting of the cabinet committee on communications, Friday, November 13, at approximately 12.30 p.m. After reviewing that ad with suggested changes, authorization then was given for the use of that ad in advertisements the following day, November 14.


TIMING OF RELEASE OF ADVERTISEMENT
Chris Speyer: Madam Speaker, my supplementary question is for the same minister. I point out that the ad actually appeared on the morning of November 13. When was this ad prepared and when was it authorized by the minister or by an official of CMHC to be released to Vickers and Benson?


Paul James Cosgrove: Madam Speaker, my information, once again, is that all of the ads for all of the papers were authorized on Friday, November 13. If the member has information that the ad was published or was released prior to that time, I would like to have the particulars of that, and I would like to have the time to look into the matter.


AGRICULTURE
Mr. Vic Althouse (Humboldt-Lake Centre):: Madam Speaker, my question is for the Minister of Agriculture. In light of rising farm bankruptcies, an increase of 150 per cent over the last two years, and the need for funding by many farmers, including some dairy and turkey producers along with beef and pork producers, who the minister has admitted are in trouble, could he inform the House what guidelines are being put forward so that bankers and farmers can determine eligibility for the new Small Business Development Bond and that definitions, such as financial distress, can be defined and administered in practical terms?


Hon. E. F. Whelan (Minister of Agriculture):: Madam
Speaker, I understand that all of the district officers from the Farm Credit Corporation are meeting in Ottawa today, tomorrow, and possibly for part of Thursday, to review the program to determine what they can do and to determine how they can work the Small Business Development Bond program with the other lending institutions that are involved. We think they can assist many of these people.
I am surprised at what the hon. member says about dairy farmers. Of the hundreds of letters that I have received, only one or two have come from dairy farmers. These letters generally come from young dairy farmers who bought farms

November 17, 1981
Oral Questions
and borrowed money from a lending institution through a floating or demand note. They are finding themselves in great difficulty because of the high interest rates at the present time. Lending money on a floating or a demand note should not have been done in the first place. The banks should have loaned farmers the money in the form of a long-term type of mortgage. We have assisted some farmers under the present Farm Credit program with the funds that were available at that time. I would be glad to review those cases with the hon. member at any time.


ELIGIBILITY CRITERIA
Victor Fredrich (Vic) Althouse: Madam Speaker, this side of the House has no problem with the minister's analysis for the requirement for fixed interest rates. That was the point that we were trying to make in the debate on the Bank Act some time ago.
Would the minister define for the House, or commit himself to making a statement later if he does not know the answer now, what distinctions there are between those producers who are eligible for the Small Business Development Bond under the new provisions, and those who would not quite make that category but would, as is implied in the budget, be eligible for assistance under the Farm Credit Corporation additional funding? Could the minister tell us what the distinction is? Which farmers would manage to make the one cut-off, and which would be eligible for further assistance under FCC?


Eugene Whelan: Madam Speaker, I met the chairman of the FCC yesterday and we are meeting again tomorrow morning. We hope to have criteria that can be outlined. If one reads the budgetary papers they fairly well explain how the Small Business Development Bond is going to work.
Some members have made statements that the small business development bond will not assist many people. Already it is assisting many people even under the proposal that some of the banking institutions made, that the government make it possible for unincorporated farmers to borrow through Small Business Development Bonds, and they were lending in the hope that the government was going to do that. The government has already come through on that proposal and there has already been over $100 million, I am told, loaned to farmers in distress. We will outline the provisions they will have to abide by before the end of the week.


COMMUNICATIONS
Mr. Robert Daudlin (Essex-Kent):: Madam Speaker, my question is directed to the Minister of Communications. Given the interest and strong representations by representatives of
the Canadian Association of Broadcasters earlier this year regarding international negotiations on the ten-kilohertz spacing of AM radio channels, and given the expressed intent of the government, after consultation with the industry, to press strongly at the international level for the retention of the present ten-kilohertz spacing system, thus avoiding the dramatic effect the change to nine-kilohertz spacing would have on more than 300 Canadian broadcasters, would the minister advise this House of the state of negotiations, the stance that has been taken by Canada, and what the chances of success might be in terms of those negotiations?


Hon. Francis Fox (Minister of Communications):: Madam Speaker, this is a question that has been of considerable interest to all Members of Parliament. I have perhaps received more representations from Members of Parliament on this question than on any other over the past six to ten months. The position taken by the Canadian government, in close consultation with the Canadian Association of Broadcasters, a position endorsed by members on both sides of the House, was that Canada should take the lead in trying to maintain the ten-kilohertz spacing for AM radio stations.
I am delighted to say that the advice I just received from my officials is that the international convention under way in Rio has accepted the Canadian position, and the Canadian position has been able to carry the day over the position of a number of other countries which were supporting the move to nine-kilohertz spacing, a move which would have cost the Canadian broadcasters a great deal of money.


THE BUDGET
Miss Pat Carney (Vancouver Centre):: Madam Speaker, my question is addressed to the Minister of Finance. Yesterday while the minister was hosting his luncheon featuring scallops, filet mignon and endive salad, thousands of Canadians were laid off construction sites, and thousands more will be without homes because of changes in the budget that affect deductibility of soft costs. By polling developers across the country we have identified 13,000 rental units which have been cancelled or are in limbo since the minister brought down his budget. About 8,000 of those rental units are in Vancouver where 1,200 people have been sent home from work sites.
Since the government is blowing away more than $1 billion worth of new construction in return for only $30 million of new revenue in the next four years, will the minister at least postpone the date on which the new measures take effect, from November 12 to January 1, 1982, to allow those projects which are now under construction to go ahead? There are at least 2,500 under construction or ready to break ground. Will he delay the implementation of that budget measure?


Allan Joseph MacEachen: Madam Speaker, I notice that the hon.
November 17, 1981

member raised this question in the House yesterday and notice was taken of it by the Minister of State for Finance. Since that time the Solicitor General, the Minister of Public Works, the hon. member for Mississauga North and hon. member for Parkdale-High Park have also raised the same question.
I am pleased to answer her today in a positive way and say that I will be proposing in the implementing legislation that a deduction be provided for costs incurred, namely, soft costs, after November 12, 1981, relating to any building providing the installation of footings or any other base support of the building is commenced before the end of this year and that the construction of the building proceeds without delay.
In addition, with respect to interest expensing, Madam Speaker, I will be proposing that interest expenses will be fully deductible on any funds borrowed by the First purchaser of a multiple unit residential building from the builder or developer as the case may be.
I wanted to use these precise words in order to clarify the situation and to ensure that those soft costs related to projects as I have described will be covered, so the projects that have been identified by the hon. member and the members on this side of the House whom I have enumerated, will be dealt with, and proceed. I am grateful to provide that clarification.



Hon. Bill Jarvis (Perth):: Madam Speaker, my question is directed to the Secretary of State as the responsible minister and chairman of the cabinet committee on communications which apparently, according to the minister for housing, was the government vehicle used to release the budgetary information to Vickers and Benson. Will he confirm what has been suggested by his colleague, that in fact that cabinet committee did authorize the release and, more important, will he indicate who communicated the information to Vickers and Benson, precisely on what day, and as close to what time as the minister's recollection will permit was the information released to Vickers and Benson?


Hon. Gerald Regan (Secretary of State):: Madam Speaker, 1 am unable to help my hon. friend in relation to when information was passed to Vickers and Benson because of the fact that this ad came before the cabinet committee on communications in a meeting-


An hon. Member:: That's when it was in the newspapers.


Some hon. Members:: Oh, oh!


An hon. Member:: It was already in the papers by then.


Gerald Augustine Regan: -at a meeting during the noontime period, and this committee had no prior involvement with that ad.
Oral Questions


ROLE PLAYED BY CABINET COMMITTEE
William Herbert Jarvis: If that is the case, Madam Speaker, that the cabinet committee was advised of an advertisement that had been placed even before the cabinet committee met, was there no questioning by that committee and no effort to stop the breach of secrecy regarding budgetary information? Did the committee do absolutely nothing once it had been informed that this was the ad that had been sent out to over 140 newspapers? Is that what the Secretary of State would have us believe?


Gerald Augustine Regan: I appreciate the histrionics of the hon. member, Madam Speaker, but he should-


Some hon. Members:: Oh, oh!


Gerald Augustine Regan: -he should well remember that many ads are placed by government that do not go through that particular committee, and if he listened carefully to my words he should also be aware of the fact that that ad came before cabinet committee for approval on Friday, which was after the budget had been delivered, and we were concerned with the question of whether the message in that ad should be quickly put forward at that point to the people.


An hon. Member:: It was already out.


Some hon. Members:: Oh, oh!


An hon. Member:: It was in the newspapers.


Gerald Augustine Regan: In my view it was extremely important that the public have information in relation to that type of help as rapidly as possible.


An hon. Member:: They already had it, even before you did.


Gerald Augustine Regan: We approved publication thereafter. I am not aware of any publication before it came to our attention.


REQUEST THAT MINISTER MAKE STATEMENT ON MOTIONS
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, 1 should like to return now to the minister of housing and direct a question to him. I know I will be repeating myself with respect to questions that have been asked by members of our party on this matter, but I would ask him to deny categorically that the information he received in advance with respect to the budget was prematurally given to Vickers and Benson.
The minister has made reference to a number of scenarios prepared by his department. You will recall that he said there were a number of scenarios. In order to get this matter off the floor of the House will he do two things; First, will he undertake to table in this House the different scenarios that had been prepared by the department so that members and the people of Canada can compare them with what exactly appeared in the budget? Second, will he be prepared to make a statement on motions outlining the full investigation and cir-

November 17, 1981
Oral Questions
cumstances leading to the premature release of budget information?


Some hon. Members:: Hear, hear!


Paul James Cosgrove: Madam Speaker, 1 would be happy to repeat that I did not know the specifics-even the generalities of the-


Charles Joseph Clark: Who knew?


Paul James Cosgrove: -provisions of the budget respecting housing until the minister briefed the cabinet on the afternoon of the delivery of the budget, on the twelfth. I did not know the specifics until later on, nor did Canada Mortgage and Housing Corporation, for which I report to Parliament, know the specifics that were in the budget until afterward. Any release of any information was authorized after that time. I am quite surprised that while we have comments of members opposite who complain that the relief offered was not adequate and does not answer people's needs, they now complain and say the government is not even permitted to advertise what they-


An hon. Member:: Before the budget was prepared.


Paul James Cosgrove: -what they consider to be inadequate relief.


REQUEST THAT INVESTIGATION BE CONDUCTED
Ramon John Hnatyshyn: Madam Speaker, the point is, and the minister will understand this, that this advertisement was printed on November 13. It had to be in the hands of the printer in advance of the time the budget was brought down.


An hon. Member:: The eleventh.


Ramon John Hnatyshyn: I understand he will want to investigate this whole matter, but 1 want to know if he will in fact have an investigation carried out. It is a matter of responsibility for the Minister of Finance who has to ensure there are no leaks. It is the Minister of Finance who has to resign if there are any leaks. If the minister responsible for housing is concerned about his own skin, all I want him to do is to investigate the facts within his own department, lay them before Parliament and make a statement on motions. Will he at least do that so we can say that the minister is an honourable gentleman, rather than leave this House with another impression?


Paul James Cosgrove: Madam Speaker, the hon. member indicated as he rose to ask the question that he would be repeating a question. I will repeat my answer. I was not aware of the provisions in the budget pertaining to housing until the Minister of Finance released it in this House, or almost simultaneous with that.


An hon. Member:: You should have been.


Paul James Cosgrove: Nor was the Canada Mortgage and Housing Corporation knowledgeable as to what was in the budget, nor were they authorized to release or request publication of any advertisement that had to deal with the budget prior to that time.


EXTERNAL AFFAIRS
Mr. Marcel Prud'homme (Saint-Denis):: Madam Speaker, my question is directed to the Secretary of State for External Affairs.

In light of the recent announcement by the government of El Salvador that the election in that country has been set for March 21, will the minister tell the House the view of the Canadian government on the election process?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, the announcement by the government of El Salvador of its election is a domestic decision, on which I do not believe we are entitled to comment directly.
I can tell the House that in a meeting, held at the request of the El Salvador ambassador to the United States approximately two weeks ago, I discussed the El Salvador situation fully, and also the proposed election call. I proposed to the ambassador that the El Salvador government should consider having negotiations with the rebel forces, not over the general political situation, which the government refuses to contemplate, but specifically over provisions for a free and fair election without pre-conditions on either side.
I offered the good auspices of our government to the El Salvador government to facilitate such an encounter in any way, to act as a mediator, or to provide Canadian territory or Canadian embassies in Central America as a locus for such talks.


JAMAICA-POLICE RAID ON CUSO OFFICE
Mr. Bob Ogle (Saskatoon East):: Madam Speaker, I have a similar question for the Secretary of State for External Affairs. It concerns an incident which happened in the nongovernment organization CUSO. CUSO is a non-government organization doing excellent work in many countries around the world. It has particularly good programs in Jamaica, reaching people at the grass roots level and involving many Jamaican nationals in its programs.
Last Thursday there was a police raid on the offices of CUSO in Jamaica, in which a CUSO member of the board was held at gun point while police went through the files of the CUSO office. At the same time the Hon. Iona Campagnolo, while not present in the office, was working in Jamaica for
November 17, 1981

CUSO fund raising. Would the minister tell this House what he and the government have done to protest this serious incident?


Mark R. MacGuigan: Madam Speaker, I have received a full report on the incident. I can confirm that it took place very much as described by the hon. member. Since that incident, the Canadian High Commissioner to Jamaica has spoken with Prime Minister Seaga to express our dismay, and we are now awaiting an early report from the Jamaican government.


CONCERN FOR SAFETY OF CUSO WORKERS
Robert Joseph Ogle: Madam Speaker, I personally have grave concerns about the safety of people working in the program in Jamaica, namely, Carl McKenzie and Satish Sachdeva, two people from there. Would the minister tell us what he is prepared to ask of Prime Minister Seaga to guarantee the security of CUSO workers in Jamaica, as well as the continuation of these very excellent programs?


Some hon. Members:: Hear, hear!


Mark R. MacGuigan: I think we will have to wait for a reply by the Jamaican government to see what the apparent reason for this raid was, and if circumstances warrant such a request we would certainly be prepared to make that request. We have no reason to believe that the safety of any CUSO workers, either Canadians or non-Canadians, is in any way in peril.


THE BUDGET
Hon. John A. Fraser (Vancouver South):: Madam Speaker, my question is for the minister responsible for housing. The minister has said that the advertisement which has been the subject of discussion in this House was not approved until after a noon cabinet committee meeting held on the thirteenth. Would the Minister tell this House when this ad was written, by whom, and on whose instructions?


Paul James Cosgrove: Madam Speaker, I do not have those specifics available at this time.


QUERY RESPECTING MINISTER'S KNOWLEDGE OF ADVERTISEMENT DISTRIBUTION
John Allen Fraser: Madam Speaker, I want to ask the minister if he knew, at the cabinet meeting on the thirteenth, that the substance of this advertisement which he and others approved was already in the hands of the newspapers. I also ask if the minister will come into the House tomorrow and give exact details in answer to the question I asked previously?
Oral Questions


Paul James Cosgrove: I would
be repeating myself-


Some hon. Members:: Oh, oh!


Paul James Cosgrove: -to indicate that at the meeting of the cabinet communications committee held on the thirteenth we reviewed the advertisement as to whether the wording was adequate and reflected the provisions of the budget, and upon deciding that it did and that it could convey the information on the mortgage renewal plan to as many Canadians as quickly as possible the next day, that ad was then authorized and I instructed an official of Canada Mortgage and Housing who was present at the meeting that the ad should go forward and they should by telephone-


An hon. Member:: It was already gone.


Paul James Cosgrove: -let the newspapers know that the ad could be printed.


THE CONSTITUTION
Mr. Jacques Olivier (Longueuil):: Madam Speaker, my question is directed to the Minister of Justice and Minister of State for Social Development, who is responsible for constitutional affairs. I do not know whether he is in the House. If he is not, my question is directed, Madam Speaker, to the Prime Minister of Canada.
Following frequent appeals made by the Minister of Justice to the PQ government of Quebec to reopen negotiations and to negotiate in good faith with a view to reaching an agreement, and also considering very specific offers made by the Prime Minister of Canada this weekend in Quebec, can the Minister of Justice tell us whether the government of Quebec has shown any willingness to negotiate or if there has not been any response as yet to his request for negotiations?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, last week I was in touch with two ministers of the Quebec government, the Minister of Justice and the Minister of Intergovernmental Affairs. I offered to meet them and discuss the proposals made by the Prime Minister on the day the agreement was signed, November 5, when he offered the government of Quebec various alternatives. The answer was that they did not want to talk to me until the resolution had been tabled in the National Assembly, and since then, no one has been in touch with me. We are still willing to talk to the government of Quebec and try to reach an agreement on the three points Mr. Levesque could not sign on the day of the agreement, but unfortunately,

November 17, 1981
Privilege-Mr. Cossitt
as yet no indication has been given the Canadian government that they want to negotiate.


PRIVILEGE
Madam Speaker:: The hon. member for Leeds-Grenville (Mr. Cossitt) rising on a question of privilege on Wednesday, November 4 last, brought to the attention of the House a matter concerning questions he had asked of the minister, the response he received and the subsequent report of the McDonald commission bearing on the question and answer.
In his question No. 2,332 asked of the government in 1975, there were allegations by Igor Gouzenko that he received no government pension from the time of his defection in 1946 until such pension was instituted by the government of Mr. Diefenbaker in 1962, and the government was asked why it was not provided. The reply by the then solicitor general, the hon. member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand), was in part that "from 1946 to 1962 Mr. Gouzenko was looked after entirely by the Canadian government."
The relevant part of the report of the McDonald commission quotes from this reply given by the government and, after indicating that it reviewed the history of the matter carefully as it was disclosed by the RCMP files, says "it is not true that from 1946 to 1962 Mr. Gouzenko was looked after entirely by the Canadian government." Under these circumstances, the hon. member for Leeds-Grenville alleges that a contempt of the House occurred because, in the reply in 1965, the House was given false information by the government and the hon. member was therefore obstructed in his parliamentary work.
First of all, the hon. member correctly sets out that a contempt committed against one Parliament may be raised and punished in another. With respect to the alleged contempt, it is correct to say that it is a breach of privilege or a contempt of the House to present or cause to be presented to either House, or to a committee of either House, falsified or fabricated documents with intent to deceive such House or committee. That is to say, where the government as represented by one of its ministers, or by an officer of a department or of a government agency, admits that the information given to the House was deliberately false, the House may treat that as a contempt of the House. Such was the case in this House in 1978 in the matter referred to by the hon. member.
The distinction between the situation put forward by the hon. member here, however, is that while the McDonald commission is an emanation of the government, it is not an instrument of the government or government policy. Thus, an admission in the 1978 precedent by a former Commissioner of the RCMP that "very often ministers' letters were not exactly
drafted on precise statements of fact" was an admission for purposes of privilege in that case.
In the present case, however, a statement by the royal commission in its report that the government's response to question No. 2,332 in 1975 was not true is not an admission for purposes of privilege. Moreover, the report itself states at pages 341 and 342:
Our examination of the files has not disclosed that there was any sinister design that may reasonably be attached to the answer given in the House of Commons.
In other words, under the doctrine of ministerial responsibility a minister may be expected to answer to the House for acts of those of his officials; but the government is not responsible for the acts or statements of a royal commission, although the government may take some action following upon the report it receives from the royal commission. Accordingly, I cannot find a prima facie case of privilege in this presentation.


POINT OF ORDER
Madam Speaker:: Further, on Wednesday, November 4, 1981, the hon. member for Leeds-Grenville (Mr. Cossitt) raised a point of order, this time concerning the answer to written question No. 3,236 which is recorded in Hansard on November 3, 1981, at page 12450.
The hon. member is aware of Citation 363 of Beauchesne's fifth edition which stipulates that a member may put a question but has no right to insist upon an answer.
Furthermore, the quality of the answer as given is not generally within the responsibility of the Speaker, who should not be asked to pass judgment on the substance of an answer to a question, be it oral or written. In this connection, I would like to quote a sentence of a ruling given by my predecessor, reference to which was made by the hon. member for Leeds-Grenville and the hon. member for Yukon (Mr. Nielsen), and which can be found in Hansard of June 19, 1978, at page 6528:
-since the Chair has not procedural grounds upon which to compel an answer, it is impossible for the Chair to say that an answer given on procedural grounds is not, in fact, an answer.
Therefore, I regret I cannot find that the hon. member has a point of order.


PRIVILEGE
Thomas Charles Cossitt: Madam Speaker, I filed notice, which I trust reached you, an hour or so before the House met of my intention to raise a question of privilege, if
November 17, 1981

you would afford me the opportunity, as soon as possible this afternoon.
My question of privilege will be brief. It deals with the subject which I raised during question period concerning an advertisement prepared by Vickers and Benson Ltd. of Montreal and sent out to various newspapers across Canada for publication.
I am alleging that a breach of the privileges of members has occurred here in that at least Vickers and Benson, the employees thereof, and I do not know who else, were privy to information in the budget before members of this House had that information. That is a distinct breach of the privileges of the members of the House of Commons.
The information to which I refer is contained in the advertisement sent out by Vickers and Benson headed "Attention Home Owners". I think the first sentence says it all. It says: "Check if you are eligible"-


Madam Speaker:: Order, please. I think I have a good idea of what the hon. member is trying to put before the House. I remind the hon. member that privilege is not at issue in this particular question. What is at issue is the matter of secrecy of the budget, which is not to be dealt with under privilege. Budget secrecy is merely a convention which the Chair is not in a position to enforce. I suggest that unless the hon. member has something new to raise, he and other hon. members have dealt properly with the matter by asking questions during question period.
I cannot deal with this question under privilege because the matter of secrecy of the budget is a convention which is not enforceable by the Chair. If the hon. member refers to cases in Great Britain, to which he has referred previously in this House, he will recognize with me that the matters were not discussed under privilege but were discussed under other headings and dealt with in the House through questions to ministers. The Chair has no authority whatsoever to enforce a convention.


Thomas Charles Cossitt: Madam Speaker, I will leave the subject you said is taboo and proceed to the latter point I was going to make, which I think is a question of privilege. It was said in this House by the minister responsible for housing, and I will quote from Hansard because it reflects on all our privileges. On November 10, 1981, the minister said:
I do not know what will be in the budget on Thursday night.
Later he said:
-I do not know the contents of the budget affecting housing.
It is obvious from what happened in this House today that those are false statements. They are not accurate. The minister was either misleading this House due to incompetence, or intentionally misleading this House. If it was the latter, it is a very serious matter. I think it is certainly a question of privilege for me to raise at this time, that a minister gave this House information which obviously was not correct-


Madam Speaker:: Order.
Privilege-Mr. Cossitt


Thomas Charles Cossitt: -and therefore could have been lying to this House.


Madam Speaker:: If the hon. member feels that the minister has intentionally misled this House, he has to say that in those words. The Chair cannot deal with a question in a hypothetical form. The hon. member said "if' the minister has intentionally misled this House, that is a serious matter. I would have to agree with the hon. member that it is a serious matter. We have to be sure that the hon. member is intending to say exactly that, that the minister has misled the House. I am afraid the hon. member is continuing to debate the question which I said does not come under the heading of "Privilege".


Thomas Charles Cossitt: I rise on a point of order, Madam Speaker. I want to give notice, depending upon what the minister says tomorrow, that I reserve my right to move a question of privilege and to say that he has misled the House, if that is the case.


Madam Speaker:: Order, please. Hon. members do not have to give notice to such things. If the hon. member feels tomorrow that he has a point to raise, then he can raise it. He does not have to give notice of his point. But if it is a question of privilege, then the hon. member knows that the usual statement and notice is required.


Erik Nielsen: I rise to seek clarification from the Chair with respect to your ruling, Madam Speaker, on the first part of the question raised by the hon. member for Leeds-Grenville (Mr. Cossitt).
Do I understand correctly that the ruling of the Chair was, in effect, that it is not a breach of privilege of the members of this House if the government released budget information to Vickers and Benson before that information was released to members of this House, as it was, in the budget speech? Is that what the Chair is ruling?


Madam Speaker:: No, I was not ruling on that point. I do not have the specifics as to whether or not something was released by the minister before the budget speech was made.
The hon. members are trying to elucidate whether there was a budget leak. I have had no such indication. I would not be the one who would judge whether there was a leak or not. I am saying that if hon. members are discussing a possible budget leak, it cannot be discussed under privilege. Budget leaks have to do with a convention which is not enforceable by the Chair.


Erik Nielsen: That was the precise point I was seeking to clarify, may it please the Chair. It has always been my understanding of the practices of this House that when information, particularly budget information, is released prior to members of the House of Commons being informed of its contents, that in the past has constituted a very serious breach of members' privileges.
Half way through the Chair's response to my question seeking clarification, I was quite happy because you, Madam

November 17, 1981
Point of Order-Mr. McGrath
Speaker, were not saying that you would not treat that matter as a breach of individual and collective members' privileges. However, upon hearing the Chair's closing remarks I became rather alarmed. It seems to me that the past practice of this House has long been that individual and collective members' privileges are, indeed, directly affected deleteriously by the release of budget information before that information is released to members of this House.
On that specifically focused point, I would suggest very strongly to the Chair-and certainly the Chair's ruling was not specific on the point-that we would be following past practices, proper practices, if it were to be considered a breach of individual and collective members' privileges were budget information to be released prior to its first being given to members of the House of Commons. That is the whole purpose of a lock-up.


POINTS OF ORDER
James Aloysius McGrath: I rise on the same point of order, Madam Speaker. First of all, I want to identify myself with the remarks of the hon. member for Yukon (Mr. Nielsen). Perhaps I can assist the Chair if I were to tell you, Madam Speaker, that I am prepared to lay before the House a substantive motion. My substantive motion is based on a precedent of your predecessor, the Hon. Speaker Jerome, in dealing with a matter which referred to an alleged leak of the budget by the hon. member for Kenora-Rainy River (Mr. Reid). At that time, Madam Speaker, your predecessor, Speaker Jerome, ruled that there was a prima facie case and the matter was then referred to the Standing Committee of Privileges and Elections, which dealt with the matter at that time. In other words, Madam Speaker, it was the House and not the Chair that determined whether or not there had been a breach of the privileges of this House.
My point of order is based on the information contained in an advertisement which was in the hands of the advertising agency, Vickers and Benson, on November 11, prior to the delivery of the budget in this House. That advertisement contained precise details, word for word, of the budget's references to housing. There is no question about the fact that what appears in the advertisement, which was sent to 150 newspapers across the country by the minister's own admission, is identical to the information that was given to the House by the Minister of Finance (Mr. MacEachen) in his budget of November 12. That information was in the hands of the agency on November 11; it was in the hands of the newspapers prior to that information being released to the members of this House, thereby constituting a violation of the privileges of this House.
If the Chair rules that there is a prima facie case of privilege, I am prepared to move, seconded by the hon. member for Rosedale (Mr. Crombie):
Thai Ihc subject matter of the advertisement which appeared over the authority of the minister responsible for housing and which contains information pertaining to the budget and was released prior to the budget, be referred to the Standing Committee of Privileges and Elections.


Some hon. Members:: Hear, hear!


Madam Speaker:: Hon. members are arguing a matter about which they tried to seek more clarification during question period. I am not in a position to determine whether there has been a leak of budgetary secrets. If there had been a leak of budgetary secrets, and if that was clearly established, then I do not feel it falls under the heading of privilege. I will not repeat to the House what is the definition of privilege because I have done that often enough. As I listened to the arguments of the hon. member, I do not find there is a prima facie case of privilege. I remind hon. members that if they want to deal with the fact that there was a leak of budgetary secrets, then they would have to deal with it in another way, but not under the heading of privilege.


An hon. Member:: What about the precedent?


James Aloysius McGrath: I am not permitted to question the Chair's ruling in any way and I do not attempt to do that. However, I seek clarification, Madam Speaker. I am faced with the precedent of your distinguished predecessor, because 1 was involved in the matter concerning the alleged leak by the hon. member for Kenora-Rainy River. In fact, this matter was referred to committee under privilege. Perhaps the Chair could tell me what new avenue I now have open to me in order that I may bring this matter before this House or a committee of this House to determine whether or not there has been a violation of the privileges of the House. All I am asking the Chair to determine is whether or not there is a prima facie case. On the basis of the advertisement I submit to the Chair that there is a prima facie case. If the Chair agrees, then it is up to the House or a committee of the House to determine whether, in fact, the privileges of the House have been violated.
[ Translation]


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, there are a number of factors here that should be pointed out. First of all, you have made a ruling where you expressed the opinion quite clearly and simply, that when we refer to secrecy of the budget, it is not a matter of privilege but a political convention over which you have no authority. That should be quite clear, even to those who are shouting on the Conservative side. In addition, Madam Speaker, the member for St. John's East (Mr. McGrath) referred to the case of the member for Kenora-Rainy River (Mr. Reid). I should like to remind you, if I may, that the facts are not the same. In the case of the member for Kenora-Rainy River, an article was published in The Gazette alleging or insinuating
November 17, 1981

that the member was guilty of breaching the secrecy of the budget. In that case, a motion was presented by the member in question, which is not the case here. The member for Kenora-Rainy River himself said, "My privileges as a member were abused because of a false report published in a newspaper, and I, as the victim of this report, move that the question be considered by the Committee of Privileges and Elections," and that is what happened, with the consequences of which the House is aware.
Now, Madam Speaker, if I may be allowed, since my colleagues on the opposite side seem to be far more interested in indulging in petty politics than in actually referring to parliamentary practice or conventions, the convention which forms the basis of any debate on a breach of budget secrecy is that a member who wants to make a formal charge should rise and charge the person in question, thereby risking his seat. That is the political convention that has always governed the matter of budget secrecy in the House, and it is this type of convention that the members opposite should have the courage to follow if they truly have reason to believe that a parliamentarian has breached the secrecy of the budget.
Madam Speaker, obviously, they lack that fortitude and moreover the facts, namely, the answers given here in the House, clearly show that there has been absolutely no impropriety on the part of parliamentarians.
So what do they want to do? These are innuendoes, but they are not supported by any valid precedents because there are none. I challenge any member, those to my left who were shouting just now-the member for Calgary Centre (Mr. Andre) who was shouting as well-I challenge any one of them to dare rise and make a formal charge, therefore putting his seat in the House in jeopardy and to quote a single precedent justifying a motion for referral to the Committee of Privileges and Elections, on the basis of a breach of budget secrecy.
I repeat, the case of the member for Kenora-Rainy River does not apply to this situation, because he was the victim, he presented the motion himself and his personal privilege was involved. In any case, I do not think there is a single Progressive Conservative member here in the House today who has enough guts-they shout a lot, they hurl abuse, even those who are not in their seats, but there is not a single member who has the courage to rise, to observe the parliamentary or political convention, and say: I accuse a parliamentarian of breaching the secrecy of the budget and I am prepared to stake my seat on it.
Madam Speaker, the House is waiting for a demonstration of bravery. I ask any Progressive Conservative member to be bold enough to rise, to make that formal charge. If the Progressive Conservatives refrain from doing so we shall draw our own conclusions.
Point of Order-Mr. McGrath


Madam Speaker:: That is really the way to deal with this matter. I want to reply to the hon. member for St. John's East (Mr. McGrath), who has offered a precedent in order to enlighten the Chair as to the manner in which this matter should be dealt with. I believe the hon. member referred to the precedent of the hon. member for Kenora-Rainy River (Mr. Reid). As the minister just said, the precedent was not exactly the kind of situation which was described today. The hon. member for Kenora-Rainy River himself brought up as a question of privilege an interpretation of some of his actions which had been described in a newspaper. I believe it was dealt with in a committee, the hon. member wanting to have his reputation cleared.
The hon. member asked me what recourse he has if he cannot deal with this matter through a question of privilege. I think he knows the recourse he has. If he feels that there has been a breach of budget secrecy and that he can substantiate this breach with the proper facts, he knows that he can put a substantive motion to the House with a 48-hour notice. That is the proper procedure in order to deal with such a matter.


James Aloysius McGrath: Madam Speaker, are you saying that the motion I have put forward, which I now have in writing, is out of order? If so, I want to say with great respect that I reserve the right to check the precedents in detail on this matter and to raise it again at the first opportunity.


Yvon Pinard: You are free to do what you want, but there has been a ruling.


Madam Speaker:: The hon. member may do that. I cannot receive the hon. member's motion because I did not find a prima facie case of privilege. I refer the hon. member to two precedents in Great Britain, one in 1947 with Mr. Dalton and one in 1936 with Mr. Thomas. These two precedents show quite clearly that the matter was dealt with in another manner and not under privilege. The Speaker did not give priority to this discussion by finding privilege. The discussion may take place, but not under the heading of privilege, where priority is given to a certain matter because the Speaker, for reasons which have been given to her by hon. members, finds that there is a prima facie case.
The hon. member may reserve his right to come back on this question or to look at the precedents to enlighten himself as well as the Chair. But for the time being, on the basis of what I have heard today, I am afraid I cannot hear this matter discussed under the heading of privilege.


Erik Nielsen: Madam Speaker, there is one further recourse which perhaps missed your attention. It is closely allied with the course followed by the hon. member for Kenora-Rainy River (Mr. Reid). After today's questions and answers appear in tomorrow's written media, that will give the opportunity to the Minister of Public Works (Mr. Cosgrove), the minister responsible for housing, to follow the same honourable course tomorrow which the hon. member for Kenora-Rainy River followed on that occasion.

Point of Order-Mr. McGrath


Bob Rae: Madam Speaker, I rise on the same subject. I wonder whether you could clarify the nature of your ruling. If it can be established that the minister made a statement to the House to the effect that he did not know the contents of the budget, and subsequent to that there arises a series of events which give rise to the possible inference-not in any sense a personal accusation- that the minister or someone on his staff must have known the contents of the budget in order to place the advertisement in question, I would ask whether this in itself does not raise a matter which should be referred to the Standing Committee on Privileges and Elections, since there is a clear contradiction which could lead to the conclusion that something was amiss with respect to what the House was told, even though it was told inadvertently.
In regard to this matter, I refer Madam Speaker to the question raised by the hon. member for Durham-Northumber-land (Mr. Lawrence) some time ago wherein Mr. Speaker Jerome made a ruling with respect to a minister unintentionally having said something on the basis of information and advice he received from his staff which turned out to be incorrect. There was a ruling by Mr. Speaker Jerome which was overturned by the majority at that time; it was not allowed to proceed. Would Madam Speaker not agree, if there is on the face of it a prima facie conflict between two matters of fact admitted to by the minister, that there needs to be a reference to the committee in order to clarify how it is this matter was brought to the attention of the House in a way that could only produce the wrong effect?


Madam Speaker:: In answer to the hon. member's query, I hope I can clarify the situaton by saying that if, subsequent to reading Hansard and the exchanges which took place in the House, some hon. member feels he could make a definite charge-not just an inference, or fishing for some information, or making a vague allegation, but a definite charge with the consequences attached to that process-then yes, the hon. member may bring in a substantive motion which might or might not be debated in the House. That is the procedure.


Mr. Nowlan:: That is absolutely wrong.


Bob Rae: Madam Speaker, all I would say is that it seems to me strange, if I may put it that way, that one of us would have to make an accusation which could be in its consequences very unfair for the individual involved. Not wanting to make those kinds of accusations, we can nevertheless see a discrepancy in terms of what has been said and what has been done, and it needs to be clarified.
Is it the ruling of the Chair that it is required that an individual member necessarily has to accuse another individual member of wilfully misleading before it is deemed a question that is to be referred to the standing committee? That seems to be an unduly harsh requirement.


Madam Speaker:: I will read to the hon. member a ruling from Speaker Michener on this particular point. He said that the House should not set in motion its power to try to judge the conduct of a member unless such member is charged with a specific offence. It is further urged that not only must he be charged, but that he must be charged by a member of the House of Commons standing in his place.
So it is not a fishing operation and it is not vague allegations; the hon. member presenting his case would have to make a very specific charge and be prepared to back it up with facts.


John Patrick (Pat) Nowlan: Madam Speaker, so far as I know the ruling you just referred to pertained to members, and we are all members of this House. The initial complaint referred to a minister of this House. I was not going to get overly involved in this but my privilege has been affected if a minister has, inadvertently or deliberately, caused a budget leak. Madam Speaker, you-


Madam Speaker:: Order, please. The hon. member is again dealing with a hypothetical question-"My privilege has been affected if." I have ruled that this is not a question of privilege and should not be discussed under privilege. If hon. members want to pursue this discussion, I have indicated the proper way to do it. I would appreciate it if hon. members would follow that course if they want to.


John Patrick (Pat) Nowlan: The only reason-


Madam Speaker:: Order, please. The hon. member for Etobicoke Centre (Mr. Wilson).


John Patrick (Pat) Nowlan: Madam Speaker, I am standing on a question of privilege that arises out of what happened in this House before you spoke.


Madam Speaker:: Order. Order, please.


John Patrick (Pat) Nowlan: Madam Speaker, I stand on a question of privilege in view of what the President of the Privy Council (Mr. Pinard) said-


Madam Speaker:: Order, please. The hon. member is again referring to a question that we have been discussing for half an hour. I have said that it cannot be discussed under-


John Patrick (Pat) Nowlan: You cut me off before I even started, with respect, the same as you did the hon. member for Leeds-Gren-ville (Mr. Cossitt).


Madam Speaker:: Order, please. Order.


Some hon. Members:: Order.


John Patrick (Pat) Nowlan: Order? She has to have some order.


Madam Speaker:: I am willing to listen to hon. members. It is my duty to listen to hon. members and I do. But I ask hon. members, when they are discussing privilege, to let me know in the first two or three sentences what the question of privilege is all about. That is a rule I am going to enforce in this House. If
November 17, 1981

hon. members cannot tell me in the first two or three sentences that they have a privilege, then I suppose the privilege does not exist. It has to be stated in the very beginning what the privilege is; then I hear hon. members. I then have the discretion to decide whether I feel there is a question of privilege or not, and I may interrupt the hon. member at that point or continue hearing him.
If the hon. member feels that 1 have not listened to him long enough and that he has something very important to tell me, will he please tell me what it is in the first two sentences.


John Patrick (Pat) Nowlan: Madam Speaker, with respect, when I stand on a question of privilege it has to be something important, especially something like this.
You yourself, in the chair, referred to the Kenora precedent where the member felt himself to be a victim and therefore moved a motion. You distinguished that from my rising on a question of privilege, when I feel victimized by knowing that if the facts of the hon. member for Leeds-Grenville (Mr. Cossitt) are correct-and I have to say "if' because I do not have the facts, and with respect, Madam Speaker, you cut off the hon. member for Leeds-Grenville before he established the facts. Quite frankly, we will most likely have to wait until tomorrow to see what some of the answers are. With respect, I could not sit idly by with, in effect, your ruling in part, after the President of the Privy Council laid red herrings all over this green chamber by raising this question of "Lay a charge or else suffer your seat."
Your Honour referred to two precedents in England. We all know, unfortunately, that political morality in England in terms of principle is sometimes a little higher than in other chambers. It obviously is within the power of the Prime Minister (Mr. Trudeau) to do something about this if the facts are correct.
On your own words, with respect, the hon. member for Kenora-Rainy River (Mr. Reid) felt he was victimized and he raised a motion. I say to you, Madam Speaker, that if another member on this side, and especially the hon. member for Leeds-Grenville, does not present a substantive motion, then if his facts are correct I will present a motion, because I feel just as victimized. In effect, there could very well have been a breach affecting my privilege as a member-


Madam Speaker:: Order, please. I think at this point I can interrupt the hon. member. He is speaking of two different privileges. He is speaking now of a privilege that he might have because he cannot make out in the discussion we have just had whether there has really been a breach of budget secrecy that would affect his privilege. It is all "iffy." Is it or is it not?
Through the discussions that we have just had, can the member establish to me that his privilege has really been breached? That is quite different from the privilege of the hon. member for Kenora-Rainy River to which we were referring whose actions were interpreted, if my memory serves me correctly, as having breached a secret of the budget. That is
Point of Order-Mr. Domm
quite different and I am afraid there is no equation between the two kinds of privileges.
I have heard the hon. member and I think I have been patient with him. We are not discussing this question under privilege any longer. I have said that it is not a question of privilege and the fact that he is now protesting that I did not listen to him long enough is not a question of privilege either.


Erik Nielsen: Madam Speaker, like you, I would not want to see an undesirable precedent find its way into our records. I do not think I heard you give credence to the submission of the government House leader when he stated that the practices of this place were that before a question of privilege could arise, a specific accusation had to be made. I have no quarrel with that part because many Speakers have ruled on it. You went on to say that embodied in that principle, if the charges proved to be unfounded, was that the member making those specific charges forfeited his seat.
Mr. Speaker Jerome and many Speakers before him have ruled that that is not part of our practices. It is not a convention. I personally had cause to go into that question very carefully myself in 1963. That is not part of our practices, Madam Speaker, and I hope I did not hear you say that it was.


Madam Speaker:: I did not say that. I just agreed to the first part of the hon. member's intervention. What might happen afterwards, I suppose, is a matter of the personal ethics of the people involved in these incidents. It has nothing to do with the Speaker; it is a matter of personal ethics.


MR. DOMM-ALLEGED BREACH BY MINISTER OF BUDGET SECRECY
Mr. Bill Domm (Peterborough):: Madam Speaker, I am interested in gaining from the Chair some clarification on a point of order dealing with the possibility of a leak of information that would prove to be, in my assessment, a very definite breach of privilege.
On November 10, as reported at 12704 of Hansard, when I rose on the question of privilege that we have been discussing today Your Honour did, in essence, according to your response, reserve judgment. I rose in the House on that date and put the following proposition to Your Honour:
If budget information is being prematurely passed on to certain individuals by the minister, information which Parliament must necessarily be advised of in the first instance by means of the budget speech of the Minister of Finance (Mr. MacEachen), then the law of contempt of Parliament should clearly be cited and my rights as an individual member are surely being circumvented.
I refresh everyone's memory with Your Honour's response to my concern, because that gave me grounds to pursue this matter rather than having to stand up in this House, as the House leader for the government has stated, and lay a charge. Your Honour answered very specifically and said:
It is quite puzzling to me that most of the facts brought forward in the question of privilege seem to be of a hypothetical nature.

November 17, 1981
Point of Order-Mr. Domm
This is hypothetical. No one knows whether the minister did or not. I now suggest, with all due respect, that there is certain information which would lead a great number of us in this House to know that it is no longer hypothetical. It disturbs me no end to feel that I have to stand up in this House, if we can prove, as Your Honour has asked us, that we can remove this matter from hypothetical circumstances to factual circumstances, and charge the minister with what was obviously a leak of confidential information prior to budget time.
I would hate to think that Your Honour is now stating that this is necessary. I would rather assume, after bringing this to a conclusion, that I would be able to pursue these phone call conversations with constituents across Canada by the minister's office, since they clearly indicated to these constituents that what was in the budget was going to save their homes. Now we have a situation where he has communicated that information, not only to constituents of mine and to others, but also to the media. If one is going to tell newspapers across Canada what is in the budget before it is actually announced, then it goes back to my original question of privilege when I said the following:
It is my understanding that a valid question of privilege is a question as to whether the law of contempt of Parliament-
Surely I do not have to rise in my place on a matter of contempt of Parliament and charge a minister. If there is contempt of Parliament, then it is up to Parliament to decide.
That is my intervention and I am pursuing the case. I hope when I come back in with a written question of privilege, which I intend to do, that I do not have to ask for the resignation of the minister responsible for housing but, rather, that I can ask the Speaker to look into the matter by referral to committee to investigate facts and not fiction. Within the next week I propose to bring facts into this House of Commons which clearly indicate that the minister has leaked confidential information, not only to the people of Canada, but to the media as well. What could be more blatantly against convention?


Madam Speaker:: Of course, the hon. member is not serious when he is saying that I can allow hon. members to allege certain things against the minister, or allege a breach of budget secrecy and not make a formal charge.
There is a period during the sitting of the House, the question period, where hon. members can ask questions in order to elucidate a situation which they might want to pursue further as a question of privilege or in another fashion. However, a fishing operation cannot take place without a charge.


An hon. Member:: Not even for a red herring?


Madam Speaker:: An hon. member cannot stand in his place in the House and vaguely accuse another hon. member of something without substantiating it with facts. Therefore, the answer I gave the hon. member remains.
I cannot deal with a question of privilege based only on a hypothetical situation. On the other occasion the hon. member said "If the minister or an official had said such and such to
my constituency, then I would have a question of privilege." I cannot rule on hypothetical situations or statements. The hon. member must come into the House and say: "These are the statements and this is the situation." However, when all of this is prefaced by "if', the Chair is not in a position to rule.
If I do find, after the facts have been presented to me, that there is a prima facie case of privilege, then, of course, the hon. member is right. It is up to the House to find if there has been contempt of the House. That matter of contempt of the House is dealt with by the House after the Speaker has found a prima facie case.


PRIVILEGE
[Stage Direction]
MR WILSON-BUDGETARY CHANGE RESPECTING INVESTMENTS IN MURBs
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker,
I have a question of privilege on a related and very specific topic. It concerns the announcement made by the Minister of Finance in his place today to the effect that there will be a significant change-


Erik Nielsen: A major change.


Michael Holcombe Wilson: -a major change in the treatment of investments in MURBs as it was first presented in the budget. This change that he announced while the stock markets were open will have a significant effect on the operations, and possibly the market value, of certain listed companies.
The reason I say it is a related point is that the whole question of budget secrecy and the timing of the release of the budget is of so much importance. The tradition and the convention is there to avoid possible financial or personal gain on the part of individuals receiving this information-


Madam Speaker:: Yes, but again, that is a convention. The hon. member is rising on a question of privilege. The stock markets and companies which might be affected by a statement have no privilege in this House. Therefore, the hon. member cannot raise that matter under the heading of a question of privilege. They do not have privilege in this House. The hon. member has privilege in this House. If he tells me that his privilege has been affected by this, although I do not see how it can have been affected, I will hear him.
[ Translation]
He did not state his question properly.


Michael Holcombe Wilson: My specific reason for raising it today was to give Your Honour notice as soon as I possibly could after the announcement by the minister. At this point I wish to study the transcript and also the press.


Madam Speaker:: The hon. member may study the transcript and he does not have to give me notice. He can do that tomorrow. I am afraid that hon. members are taking the time
November 17, 1981

of the House to give me all sorts of notice which I do not need. If the hon. member has a question of privilege, he should send written notice to my office with a brief statement.



ROUTINE PROCEEDINGS

[Stage Direction]
Order Paper Questions

Mr. Corbett: 1.	Was an assistant regional director appointed for the new Gulf region directorate of the Department of Fisheries and Oceans and, if so (a) what was his/her name (b) by whom or by which department was he/she previously employed (c) what are his/her qualifications?
2.	Was he/she hired through a public service competition, either in-house or public, or by ministerial appointment?
3.	What is the job description for the position of assistant regional director?


PETITION
Mr. Bob Corbett (Fundy Royal):: Madam Speaker, I wish to place before the House two petitions containing over 900 names of citizens of the community of Chipman and other regions in New Brunswick protesting the cut-off of passenger train services in that region. Many of these folks will not be visiting with their loved ones over the Christmas holiday this year, compliments of the compassionate and little understood Minister of Transport (Mr. Pepin).
*
 *


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: 1.	Yes. (a) Jean-Eudes Hache, (b) Department of Fisheries and Oceans, (c) Mr. Hache has the following academic qualifications: B.A. (Moncton University), B.Soc.Sc. (Ottawa University), M.A. (Ottawa University).
Employment qualifications: 1968-1972, Prime Minister's Office, regional desk officer, Atlantic provinces, 1972-1974, Veterans Affairs, executive assistant to the minister, 19741976, executive assistant to the Minister of State for Fisheries, 1976-1977, policy advisor, resource allocation branch, Fisheries, 1977-1979, manager (eastern Canada) resource allocation branch, Fisheries, 1979-1980, Fisheries and Oceans, senior staff officer, resource utilization, 1980-1981, Fisheries and Oceans, director, resource allocation.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 1,487, 2,708, 3,064, 3,165, 3,246, 3,252, 3,283 and 3,284.


Mr. Cossitt: During the past three years, has any security branch or any other branch of the government, directly or indirectly, been responsible for the placing under surveillance, electronically eavesdropping on in any way whatsoever, tapping telephones, using devices to listen to automobile conversations, etc. of any member of the House of Commons and, if so, in each case (a) what was the name of the member and the constituency (b) what was the purpose of such action (c) on what dates, by what means and in what locations was such action taken?


Hon. Bob Kaplan (Solicitor General):: In so far as the
Security Service of Canada is concerned, it is not considered in the national interest to attempt to answer such a question. If such a question were answered in the affirmative, it could provide information about security operations which might prejudice their success or unnecessarily prejudice the reputation of an individual; if in the negative such information could provide comfort or aid to those involved in ongoing violations of national security.
2.	Appointed through a public service competition (in-house). The assistant director general is accountable as deputy to the regional director general for the ongoing co-ordination, orchestration and delivery of regional fisheries management and support programs and activities; in order to achieve federal and departmental objectives and satisfy the mandates for the management of the aquatic and marine renewable resources of the Gulf of St. Lawrence.


Mr. Cossitt: 1.	What are all the details of the methods used by the government to purchase automobiles for the use of cabinet ministers?
2.	Are tenders called and, if not, for what reason?
3.	Are tenders invited and, if so, who draws up the list?
4.	Is it customary to permit a cabinet minister to purchase a new vehicle from a dealer of his or her choice in his or her constituency or anywhere else?


Hon.   J.-J. Blais@Minister of Supply and Services: 1. All automobiles for the use of cabinet ministers are purchased, on behalf of departments, by DSS from franchised dealers. Depending on the availability of the vehicle requested, bids are solicited by telephone from dealers located in the immediate vicinity of where the automobile will be used. It is customary however, for ministers to choose whether the vehicle is to be purchased in the National Capital Region or in their constituency.

November 17, 1981
Order Paper Questions 2, 3 and 4. See above.


Mr. McKinnon: Is the Department of National Defence buying socks from Hanson-Mohawk Inc. under contract number 13GA.2511007 (2GA81-00224) for the amount of $1,107,975 and, if so, how many pairs?


Hon.   J.-J. Blais@Minister of Supply and Services: The
Department of Supply and Services has awarded a contract on behalf of the Department of National Defence in the amount of $1,107,975 for 671,500 pairs of socks.


Mr. Cossitt: 1.	Is the government aware of an increase in the number of persons or groups acting as lobbyists with members of Parliament on Parliament Hill?
2.	Is the government aware that lobbyists in the United States must be registered or licensed and has the government considered or will it be considering establishing a similar system in Canada?


Yvon Pinard: 1. The
government does not maintain statistics on this subject.
2. The government is aware of the system in the United States and has had many suggestions made about possible adaptations for the Canadian context but does not expect to be able to make any proposals in the very near future.


Mr. Cossitt: 1.	What is the estimated cost of answering Question No. 3,239 on the Order Paper in the name of the hon. member for Kitchener asking the cost of answering questions by the hon. member for Leeds-Grenville regarding use by cabinet ministers of Department of Transport aircraft?
2.	Was the question suggested for drafting by a member of the government for inclusion on the Order Paper by the hon. member for Kitchener?
3.	Is the government trying to discourage questions from the opposition by emphasizing that it costs a certain amount of money to prepare an answer, rather than emphasizing freedom of information to the Canadian people?


David P. Smith: I. $125 plus costs of translation and printing of the question and answer in the Order Paper and the Debates.
2.	No.
3.	The government encourages all of its employees to make available as much information as is consistent with the security of the nation and is amused when Members of Parliament put down questions on the Order Paper to which they have obviously the answers but not the courage to make the information public themselves. The government is not amused, however, by the expense thereby incurred by the public. The government does not regret the discomfort of hon. members who so abuse the system when other more diligent hon. members point out this behaviour.


Mr. Cossitt: 1.	With reference to the answer to question No. 3,029 which stated in part that the government will not answer questions concerning complaints about public servants (a) did it answer such questions in the past (b) has there been a change in government policy to bring about the present attitude and, if so, on what date was the policy changed and by whose orders?
2.	Is the government following a policy of attempting to discourage members of Parliament from using the Order Paper to obtain information where a public servant was allegedly rude and crude with the staff of a Member of Parliament as well as with the Member of Parliament?
3.	Is the government now following a policy of permitting bureaucrats to insult Members of Parliament and to deny them information?


David P. Smith: 1, 2 and 3. The government does not approve of public servants insulting or abusing any person, whether or not this person is a Member of Parliament. As stated in the answer to Question No. 3029, any such abuse, if reported to the minister concerned, will be acted upon. The government does not regard the posing of a question on the Order Paper as a serious route of seeking correction of an unsatisfactory situation involving a citizen and a public servant.



Mr. Cossitt: With reference to the answer to question No. 3,029 concerning the actions of a public servant by the name of Mr. Ed Webster (a) which department completed the answer to this question (b) was this question ever referred to the Department of Industry, Trade and Commerce and, if so, for what reason was the answer not signed by that minister (c) was the answer signed by the Parliamentary Secretary to the President of the Privy Council and, if so (i) under whose authority (ii) what part, if any, did the President of the Privy Council or anyone on his staff play in the preparation of the answer?


David P. Smith: (a), (b), (c)(i) and (ii). The Office of the President of the Privy Council is responsible for co-ordinating the answering of Questions on the Order Paper. In accordance with section 3 of the Parliamentary Secretaries Act, this function is a particular assignment to the Parliamentary Secretary to the President of the Privy Council. In order to improve the provision of information in response to questions intended to seek information rather than to proselytize or complain, questions in the latter category will continue to be dealt with in the most expeditious manner possible.


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


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


Some hon. Members:: Agreed.
November 17, 1981



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, November 16, consideration of the motion of Mr. MacEachen that this House approves in general the budgetary policy of the government, and the amendment of Mr. Wilson (p. 12752).
Hon. George Hees (Northumberland):: Madam Speaker, the budget which was presented by the Minister of Finance (Mr. MacEachen) to the country last week was far more notable for the things which it did not do than for the things which it did. I believe that a principal weakness of the budget is that it will do nothing to stimulate the economy or bring down the cost of living. The minister admitted that both unemployment and the cost of living will remain at their present high level or go even higher during the next few years. By failing to stimulate the economy, the budget will do nothing to lift the country out of this serious recession which we are experiencing today and which is predicted to get even worse during the winter months. Economic stimulation is urgently needed.
In planning to stimulate the economy it has become obvious during the last five years that if a government wants businessmen to do something which it believes is necessary for the good of the country, it must not simply hand them a gift in the form of a tax reduction and hope that they will make use of it in the way the government would like them to. What a government must do is to tell businesses what the government wants to accomplish, and it will reward efforts to bring about that aim in proportion to the effort that is made.
What, then, do we want businesses to accomplish in order to get our economy moving at a satisfactory pace? First, we must make our products more attractive in price, quality and design so they will be preferred by Canadians and foreign buyers to the ones they are now buying. No Canadian, or anyone else, is going to buy a Canadian product if they can find a foreign-made product of equal quality and at a lower price, or one of better quality at the same price.
Second, we must sell our products more aggressively in the export market.
Third, we must turn more of our raw materials into finished products here in Canada.
I am convinced that the only practical and effective way to accomplish these three objectives is to develop an incentive strategy which will bring about substantial improvements by increasing productivity, increasing research and development, expanding export trade and processing more of our primary products in this country.
To increase productivity, we must offer incentives which will persuade producers that they will be able to pay for the new plant, machinery and production systems they will need to buy
The Budget-Mr. Hees
in a reasonably short space of time. This will make it as easy as possible for them to make the usually high expenditures involved.
The kind of incentive I have in mind would be one whereby
(a)	all capital expenditures may be written off in one year; and
(b)	a plant would be rewarded in the form of a cash bonus at the end of the year in proportion to its increase in productivity during the year, compared to the base year, the last full year before the plan goes into operation.
This form of incentive has been very effective in increasing productivity in such countries as Japan and West Germany, where spectacular results have been achieved since the end of the Second World War. I am convinced there is no reason why such an incentive would be any less successful in this country today.
Next I would like to deal with the steps which I think should be taken to increase the amount of research and development which is carried on by industry in this country. One of the reasons we have had to rely so heavily on foreign investment in the past is that investment brought with it technology which was produced by research done in the country where the capital originated. To be less reliant on foreign investment, to capture new markets which are looking for new and better designed products and to lower costs and become more competitive, it is obvious that we must carry out a great deal more research and development in this country.
To bring this about, we should allow industry to write off 200 per cent of the cost of current and capital expenditures on research and development in excess of those made in the base year, the last full year before the program is introduced. In addition to writing off the full cost in one year, it will put a considerable cash reward in the pocket of the company undertaking the research.
This kind of program has been successful in significantly increasing the volume of industrial research in countries where it has been introduced. I am convinced it will prove equally effective in Canada.
The third incentive with which I would like to deal is one designed to promote greater sales in the export market. Because of this country's great dependence on the United States market, where 70 per cent of our export sales go, together with the steady move of that country toward protectionism, the development of additional markets has become particularly necessary if we are to increase our volume of exports or even maintain our present level of export sales.
Making sales in other countries depends, to a very large extent, upon doing four things successfully. First, going abroad and making personal contact with potential buyers; second, finding out what is required to meet the competition in those markets; third, returning to Canada and producing a product which can compete successfully; and fourth, displaying the product effectively before potential customers.
The incentive I suggest would allow producers to write off 200 per cent of all expenses connected with making sales trips abroad, displaying their products at foreign trade fairs, and

November 17, 1981
The Budget-Mr. Hees
any other expenses incurred in sales promotion in the export market in excess of those made in the base year, the year before the plan goes into operation. Not only would all such expenses be completely written off in the year when they are made, but a considerable cash bonus will accrue to the company for its additional sales promotion activities. The kind of incentive I have mentioned will greatly encourage the kind of activity which is essential if increased sales are to be made.
Another thing which the government should do to help increase the sale of Canadian products abroad is to organize "Fly and Buy" missions whereby the important buyers from the principal foreign markets would be brought to Canada once a year to see Canadian products displayed in giant trade shows in Montreal, Toronto, Winnipeg and Vancouver, and our heavy machinery in the factories where it is manufactured. Such operations have produced spectacular results where they have been used and have paid for themselves many times over by the additional business generated.
Finally, I would like to discuss the need for this country to process more of our raw materials to their finished state, and what should be done to bring this about. For far too long, we have been shipping out of Canada a much too large proportion of our primary products to be processed to their final stages of production in other countries, which thereby gain the many advantages of employment, taxes and profits which accrue from this further processing. We have in Canada the skilled manpower, managerial skill, cheap power and excellent transportation facilities which are needed for this further processing. It is about time we started doing something about getting more of this work for Canada.
Now, what should and can be done? Forty years ago, the government of Ontario introduced a plan which has been largely responsible for the spectacular expansion of the pulp and paper industry in that province during the intervening years. It required companies to process in the province a far higher proportion of the logs which they cut, a large proportion of which they had been shipping in the raw state to paper mills in the United States.
What has worked so well in the case of the pulp and paper industry in Ontario can work equally well in other primary industries right across the country. It should apply to all raw materials which we ship to other countries for further processing. It can succeed equally well because of the great dependence of other countries on our primary products to feed their manufacturing processes.
It is obvious that a certain proportion of the raw materials we produce must be exported in the raw state, but not nearly the proportion that is the case today. The Department of Industry, Trade and Commerce should now undertake an intensive study of our primary industries to determine what proportion of the primary products we produce can reasonably be required to be processed to their finished state in this country.
Having decided what proportion of our various primary products should be further processed in Canada, we must produce an incentive sufficiently attractive to persuade those
who normally export our raw materials that it will be profitable for them to build the plants necessary to carry out this additional processing in Canada.
It has become painfully obvious that the grants now provided by the Department of Regional and Economic Expansion, although useful, have not proved sufficiently attractive to bring to our areas of slow growth sufficient new industry to reverse the dangerously high rates of unemployment that have persisted in those areas for many years.
I believe that in addition to the DREE grants which are now available to areas of slow growth, we must also make available an additional incentive in the form of a graduated scale of federal taxation which will permit a new plant processing primary products in an area of slow growth to pay no federal taxes in the first full year of operation, and gradually increase its tax payments until it is paying full taxation in the fifteenth year. My conversations with leading businessmen across the country have convinced me that this incentive, added to the present DREE grants for slow growth areas, will prove sufficiently attractive to accomplish what has to be done.
The four incentives which I have outlined will pay for themselves many times over in years ahead in the following ways. First, we can drastically cut the presently far too high expenditure on unemployment insurance, which is more than $4 billion a year, by stimulating the economy and enabling people to find work. The potential in this regard is at least $2 billion of the more than $4 billion a year we are at present paying out in unemployment insurance premiums.
Secondly, we can greatly increase tax revenues because more people will be working and paying income taxes, more commodities will be sold and will be subject to additional commodity taxes, and the increased volume of business will lower unit cost of production and make available more profits to tax.
What we need is an incentive strategy to get the economy moving at a satisfactory pace, and I think I have outlined such a program.
Another serious weakness in the budget is that there is no attempt to ensure that Canadian industries and workers will be able to compete on a fair basis with those in the low wage countries of Africa, Asia and Eastern Europe. Those countries pay wages which are a small fraction of those paid in Canada and other industrialized countries, and they are thus able to pay transportation charges and duty, make a very satisfactory profit and sell their products in Canada at prices considerably below the Canadian cost of production.
What we need are import quotas similar to those imposed by the United States and countries of the European Common Market. Those countries require that 80 per cent of domestic needs be supplied by domestic producers, and thus leave the remaining 20 per cent of the market to be competed for by offshore producers.
November 17, 1981

In Canada, in almost all cases, the government allows foreign producers to compete for any share of the market which they wish. This means that much of our high unemployment today is the result of the kind of unfair competition which is not tolerated by other industrialized countries.
Several years ago those of us who have footwear producers in our ridings persuaded the government to impose import quotas to enable our producers and workers to compete on a reasonable basis with those low wage imports. These quotas worked very well and our footwear industries were able to survive. Those quotas must be renewed by December 1 or they will expire and the footwear industry in Canada will be in chaos. 1 have pointed this out to the Minister of Industry, Trade and Commerce (Mr. Gray) very strongly on several occasions during the past few months, but so far he has failed to act. I again very strongly urge him to do so in order that a very important industry, the Canadian footwear industry, can survive.
Probably the greatest weakness of the budget is that it will do nothing to bring down the present high interest rates which are doing so much harm to our householders, our businessmen and our farmers. A great many of these people simply cannot maintain their mortgages or finance the operation of their businesses or their farms at the present very high rates being charged today. The government can and should bring these interest rates down to about 13 per cent, which is very slightly above the rate of inflation, without further delay.
Something which I was glad to learn from the budget was that the minister had listened to those of us who had spoken to him and his advisers regarding the harm which would be done if income taxes were raised, or if the indexing of incomes for income tax purposes was discontinued. By not doing these things he has followed a sensible course.
I feel sure that all Canadians were disappointed to learn that the federal government is cutting back substantially on the contributions it has been making to post-secondary education and health care. Without this federal assistance, university and community college education will be a great deal less available to our young people who need this additional education and training as the need for higher skills becomes more evident each day.
The federal cutbacks in the field of health care will greatly reduce the health services available to our people, and this is something which should not be done at any time.
In conclusion, Mr. Speaker, I would say that this budget, while providing some relief in several fields, has failed to deal effectively with the three main problems facing the country today; unemployment, high interest rates and the cost of living. I strongly urge the minister to start correcting these serious weaknesses without further delay.


Gerald Augustine Regan: Mr. Speaker, in entering this debate I am privileged to follow the very distinguished hon. member for Northumberland (Mr. Hees) whom I always admire greatly, even though I may not agree with all of the views just expressed.
The Budget-Mr. Regan
I want to say at the outset that congratulations are in order to the Minister of Finance (Mr. MacEachen), who produced what I think is a very worth-while budget in difficult times.


An hon. Member:: That's a good neutral word.


Gerald Augustine Regan: It is not a neutral word. Let me make it quite clear that hon. members opposite, in their efforts to assess the budget or talk about it, tend to concentrate on what they can find that can conceivably be negative. I noticed, for instance, that they used the whole question period to talk about a luncheon yesterday or about the time that ads were placed, instead of asking constructive questions about the contents of the budget, or making comments on those measures which are important to the people and the commerce of this country.
Let me point out very quickly that the Minister of Finance, in difficult financial times, not just in Canada but in the United States, in Europe and in other countries of the western world, was able to come in with a budget that had no personal income tax increases. Indeed, it contained cuts for most people in relation to the amount of income tax they pay. There was also the important element of equity. By plugging loopholes the minister was bringing about a result in which all people would be taxed on something certainly closer to the same basis, rather than allowing those who happen to be smart enough to know of loopholes to take advantage of them, with other people not being able to do the same. Therefore, I think these achievements of the minister are important.
Then we have the fact, ignored by the opposition parties, that for the second year in a row the minister has been able to produce a budget which includes a substantial reduction in the deficit. At other times they and many people in this country recognize the importance of Canada moving closer to a balanced budget. That is not very easy to achieve, particularly in such times as these. The minister, in doing that for the second year in a row, is probably the only Minister of Finance in this country for a very, very long time, at least as far as I can remember, who has succeeded in that achievement.
I want also to say that the fact that this budget was brought forward with no cutback in financing for health or education is another very important achievement.
I would like to talk about the question of post-secondary education, which I think is a subject of considerable importance and of interest to many people. Canada is at a stage in its history where fundamental choices must be made with respect to the direction that our colleges and universities are heading. I think we have to stand back and examine what skills and general learning we want our young people, and indeed people of other ages who return to education, to derive from their years at university or community college. The choices of which I have spoken must be made by the colleges and universities themselves as well as by individual students and faculty members. At the governmental level, the Constitution gives primary responsibility for education to the provinces, but I am sure every member of this House will quickly
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The Budget-Mr. Regan
recognize that our colleges and universities are national as well as provincial bodies. They are an asset to the nation as a whole.
For a university to achieve any success at all in achieving its primary purposes, it must be more than provincial in its nature. These universities provide strong links among the regions of Canada and with the international community. For these reasons, as well as its involvement in areas such as research, official languages in education and occupational training, the federal government has for some time played a growing and important role in post-secondary education.
This budget marks an important milestone in support by the federal government of post-secondary education and of human resource development generally. It allows us to get on with the job of strengthening the structure of federal support of postsecondary education and human resource development generally. I include under the term of human resource development, federal support of students and support of the colleges and universities in carrying out their central responsibility for creating and transmitting knowledge and critical capacity across a broad spectrum of disciplines as well as for their professional and more occupationally related programs.
During the past year, there has been intensive discussion on the future of post-secondary education and human resource development in our country. Much of this discussion has centred, of course, around the activities of two very important parliamentary task forces; one on Federal-Provincial Fiscal Arrangements, the other on Employment Opportunities for the '80s. The reports of these two task forces are based on a wide spectrum of views expressed by individuals and groups from across our country. As well, a number of conferences and studies have explored the financing of post-secondary education in the future.
During this period of consultation and discussion, a growing understanding has emerged throughout Canada that a major review is needed of the ways in which the colleges and universities which are faced with financial uncertainty are to maintain excellence in their core undertaking of creating and disseminating knowledge. Similarly, a review is needed of the way in which Canadians are to be provided with the knowledge, skills and critical capacity that they will need in order to take full advantage of the opportunities which will be offered by Canada in the eighties and the nineties.
The challenges facing the educational and training system are considerable. Demographic change suggests that the participation of young persons in post-secondary education may slow down and decline over the next decade. If that happens, there will be new demands in areas of continuing education and in the retraining of mature persons. Projections indicate that demand for occupational skills will likely change markedly in the 1980s.
This brings me to what I consider a very important point. Many people today feel they should only be concerned about training and education that is directed at a particular trade or skill. I do not believe that is correct. We are told by the experts that technological change occurs at such a rate today that
many people who enter the work force may have to be retrained two, three or four times for other occupations during the span of their 40 years of work because of technological change doing away with the opportunities provided in their first or second chosen field.
I believe very firmly that a broadly-based general education for as many of our citizens as possible provides the best base upon which retraining can be undertaken. I contend that those people who have had as much general education as possible, liberal arts education, for example, are better equipped to take retraining in unrelated skills compared to the field they were formerly in.
I am also constantly reminded of the fact that in this century the United States, as a result of its higher per capita number of university graduates than other countries, has been a leader in technological innovation.
I think the value of education can be found in many ways. I believe we would be dead in the water, as we say in shipping, if we allowed general learning to be eroded. That is not to say that there is not much more that needs to be done. Emphasis will have to be placed on research and the training of researchers in the universities if Canada is to have the capacity to meet its research and development targets. Major demands will likely be placed on colleges and universities to produce graduates who are able to operate effectively in both our official languages. In this respect, I do not know of anything more important in relation to employment opportunities.
For example, if you look in the newspapers of any major city in this country-and I am not talking about government employment advertising, I am talking about the private sector-there are more and more cases in which having a command of both official languages will result in obtaining a better chance of employment, and in many instances it is an absolute prerequisite for obtaining a job.
Important challenges still remain for the educational system in the area of Canadian knowledge and understanding. Technology is bringing about significant changes in the nature of education and training itself. Major institutional adjustments will be needed as a result of the blurring of lines of demarcation among education, work, training, culture and communications.
These challenges which we face in the development of our human resources are becoming widely understood. There is an equally widespread confidence, I think, among interested groups and individuals that we can successfully meet these challenges, but there is no tendency to underestimate the problem of doing so. The federal government intends to maintain its financial commitment to human resource development and to strengthen the way that support is provided for that area.
In recent weeks there have been those who questioned the federal government's commitment to post-secondary education. They predicted massive cutbacks in federal spending in this area. Advertisements were circulated and those claims were made before the budget came out. The budget has
November 17, 1981

proved, as I have stated since becoming Secretary of State, that those fears are groundless. In particular, I believe the advertisements by the Conservative Party in campus newspapers did a great disservice to students in colleges and universities by raising such needless fears. I also say, from the point of view of practical politics, that the Conservative Party was shortsighted because they have harmed their credibility on the campus to a considerable degree as a result of the students discovering that these were groundless claims.
The federal strategy for strengthening its support of postsecondary education in the eighties can be stated under three headings. The first heading is strengthening federal programs and policies directed to specific national objectives, particularly in providing Canadians with the knowledges and skills needed to exploit the many opportunities offered by our developing economy, in strengthening support of research, in strengthening programs related to official languages in education and to Canadian knowledge, and in support of students and trainees with respect to accessibility, equity and mobility.
The second heading is maintaining a significant level of federal indirect support of the post-secondary infrastructure through the provinces, the students, and the institutions when this is appropriate, given the nature of the federal role. Such indirect support would be provided in a way that ensures accountability to the Parliament of Canada and that money from federal taxpayers is used in the manner indicated. There have been cases where, unfortunately, this has not occurred. I believe that in the negotiations with reference to the future of post-secondary education and the financing thereof in this country, these are matters that must be strengthened and stressed by the Government of Canada.
The third heading is strengthening the mechanisms for effective decision-making and wider participation.
I wonder if I might now comment on each of the elements of this strategy. The first element I referred to is to strengthen federal support of manpower, social and other specific national objectives.
In his presentation to the Parliamentary Task Force on Federal-Provincial Relations, the then secretary of state began the process of defining specific national objectives. The national objectives that should go with federal participation in the cost of post-secondary education that he identified at that time have been well received and appeared to be a solid base on which to build federal policy and programs in the eighties. 1 intend in the near future to issue a somewhat revised statement of objectives that takes into account the comments we received on those that had been previously made and which I think will provide for more public input into our approach. I then plan to consult with interested groups and individuals with respect to these revised objectives, with respect to the basic principles that underlie federal policy and programs in support of postsecondary education, and also with respect to other matters relating to the achievement of national objectives in the area of education and human resource development.
The Budget-Mr. Regan
In some areas we are already starting the process of strengthening federal programs in support of these national objectives. A federal-provincial task force has already identified ways in which student aid programs need improvement. I will be meeting soon with my provincial counterparts to discuss federal official languages in education programs. Development will continue in these areas along with an over-all review of all federal programs in support of human resource development.
The second element of the strategy is to maintain strong federal support of the post-secondary infrastructure. The achievement of human resource development objectives ultimately rests on strong, autonomous and flexible colleges and universities, on a post-secondary system which itself has the incentives and means to provide opportunity for the development of individual talent and the pursuit of national objectives.
Given our constitutional arrangements, it is primarily the job of the provinces to provide the needed financing of the post-secondary infrastructure. However, the federal government, in the interests of ensuring a high standard of postsecondary education and training across the country, has over a considerable number of years supported and will continue to support that infrastructure.
This support has been delivered via the provinces, and also through direct support to students and, where appropriate, given the nature of the federal role, to post-secondary institutions themselves. With respect to support via the provinces, the government finds considerable merit in the recommendation of the Parliamentary Task Force on Federal-Provincial Fiscal Arrangements that the post-secondary and health portions of the established programs financing arrangements be separated into individual programs, and that federal financing earmarked for each program area not be used for other purposes. That not only will result in the intentions of those in this House who vote money in approving budgets being carried out, but it will assure Canadians that dollars intended for education are not being diverted at the provincial level for other purposes.
A review is needed of the amount of federal support that should be provided in this way. Under established programs financing, the federal share of post-secondary infrastructure financing has been rising rapidly. In some provinces the provincial share has been decreasing sharply. We must seriously examine arrangements that have the effect of shifting the burden of infrastructure financing away from the provinces, which have primary responsibility for education, and to the federal government.
If an increasing amount of available federal funds is being used in this manner, correspondingly less can be spent on vital national human resource development programs that can by their very nature only be provided by the federal government. The budget notes that unless satisfactory progress is made by March 31, 1983, in jointly developing better federal-provincial arrangements in the areas of education and human resource development, the government could be forced to freeze future per capita EPF cash transfers for post-secondary education at

November 17, 1981
The Budget-Mr. Regan
the 1982-83 level or forced to follow other methods of providing support to post-secondary education. I want to express confidence that it is quite possible for the provinces and the national government together to work out satisfactory answers to these problems so that we can achieve a new agreement and a plan for improving the funding and the very structure of post-secondary education before the deadline of April, 1983.
The final element of the strategy involves taking action at the federal level to work toward more effective decision-making and a wider participation in developing policies relating to post-secondary education and human resource development. As part of this review, the process of policy-making in the area of human resource development has too often suffered from a lack of mechanisms whereby all the relevant interests could be represented. The two parliamentary task force reports that I referred to have addressed the problem of decision-making in this area. The recommendations of these reports will be considered very carefully.
In the immediate future I am undertaking a comprehensive review of federal support of post-secondary education. I plan to consult with provinces, with post-secondary organizations and with student and faculty organizations with a view to establishing a means of allowing all parties to have an input to federal policy in this area and with a view to ensuring that stronger national voices are brought to bear upon decisionmaking in the field of post-secondary education. I also want to say that we are keenly interested in encouraging a somewhat larger involvement by the private sector in post-secondary decision-making.
I would like to conclude by noting the same concern that has been expressed to me by students and representatives of colleges and universities about the future of the post-secondary education system in our country. They all know that there must be changes, that for the system to be relevant it cannot stand on the status quo now any more than at any time in the past. It is a system that has grown and evolved as our needs as a nation required. There have been cutbacks in post-secondary spending in some provinces and there is evidence of deterioration in some aspects of the post-secondary capacity. The federal government recognizes the difficulties that are being faced and we are determined to help overcome them.
The federal government, the Government of Canada, will not cut back on the budget it devotes to human resource programs. It sees them as a great priority in relation to the future wellbeing and wealth of our nation and our citizens. Indeed, by making changes which ensure that federal funds actually reach the education system, and by encouraging others to maintain an equitable share in financing, federal action could increase the total funding devoted to human resource development in Canada. Further, the federal government is prepared to consider strengthening its programs to aid those students that are faced with legitimate financial difficulties. In times of inflation that can be a special problem.
I also want to note that I am concerned, from a point of view of accessibility, with regional inequities and the fact that there are regions and provinces in Canada which have not been able, for one reason or another, to produce as high a percentage of university graduates or highly skilled people as others. I think that is a problem that needs to be addressed.
I also think that the formula under which money has been distributed has perhaps been unfair to some provinces that have tended to have an influx of students from other areas. Adjustment is inevitable and needed. The post-secondary system must remain flexible to meet the changing needs of the Canadian economy and of society.
All developed countries today are facing important challenges with respect to human resource development, not just Canada. The same type of reassessment and policy review is happening in many countries. At a recent OECD conference, for example, participants discussed common challenges resulting from tightened budgets in post-secondary institutions, from ensuring that the post-secondary education remains responsive to the needs of society, and from the growing demands for continuing education for adults.
In Canada, we are addressing these challenges and opportunities from a special position of strength. Our post-secondary system underwent a remarkable and successful expansion in the 1960s and, despite setbacks in some areas, the system remains basically strong. Canada is a leader in many of the technologies that are changing the nature of education and training. With our abundance of natural resources, the economic benefits of a qualified labour force are especially strong in Canada.
In cultural terms, the benefits of a strong education system are also especially high in Canada, where graduates are able to live and work in a multicultural, bilingual country that has a strong network of social and cultural institutions. The strengthening of Canada as a nation and the enhanced wellbeing of Canadians depends on the success of our collective approach to human resource development. The federal government is determined to play a strong and responsible role in this collective endeavour. As I have stressed, we are anxious that the provinces also meet their responsibilities.
The message from this budget on education is that the Government of Canada is committed to the improvement of post-secondary education. It places a high priority on postsecondary education and is determined to elicit a similar commitment from the provinces.


Mr. Thacker:: Mr. Speaker, would the minister permit one short question?


The Acting Speaker (Mr. Blaker):: Let me settle a couple of matters first. The minister had completed the time allotted to him. Therefore, I would have to seek the consent of the House in order to allow a question to be put to him.
There may be an offer to defer to the President of the Privy Council (Mr. Pinard), who also wants to raise a point of order. Therefore, if I see a nod of agreement from hon. members,
November 17, 1981

maybe we can short circuit the matter and proceed immediately to the President of the Privy Council.


BUSINESS OF THE HOUSE
Yvon Pinard: I am sorry to interrupt the hon. member at this stage, but I think it is important for my colleagues across the floor to know in advance what the business of the House will be for Thursday of this week.
The business for this Thursday will be an allotted day, upon the request of the Conservative Party. If we give notice of the resolution on the Constitution tomorrow-and I hope we will be in a position to do so-then Friday will be the first day of debate on the Constitution. We will know for sure tomorrow. At this point I am in a position to confirm that Thursday will be an allotted day.


Erik Nielsen: I thank the government House leader for that advice. I should point out to the hon. member, as I am sure he will readily agree, that when I suggested November 19 for an allotted day, that was before we knew that the budget would be introduced on November 12 and that we would be debating the budget. I find it rather surprising that we would not continue with the remaining two days of the budget debate. Is there a reason we will not do that, as opposed to proceeding to an allotted day and interrupting the budget debate at a stage when it only requires two days to complete it?


Yvon Pinard: The explanation is very simple: the last two days of debate on the budget can be postponed until one or two days after December 10. I still have three supply days to allot before December 10. Because of the time restraint I have to allot a day very soon, and I am now doing that. November 19 was the date suggested by my hon. colleague. I understand his suggestion was made a long time ago, but I thought he would welcome this opportunity, since Thursday is a long day and all the Conservative members will be present this week when we have so many non-confidence votes. So I still designate Thursday as an allotted day and I am sure it pleases my hon. friend.




[Stage Direction]
FINANCIAL STATEMENT OF THE MINISTER OF FINANCE The House resumed consideration of the motion of Mr. MacEachen that this House approves in general the budgetary policy of the government, and the amendment of Mr. Wilson (p. 12752).
Blaine Allen Thacker: Mr. Speaker, will the minister permit one short question with regard to his speech?
Adjournment Motion


The Acting Speaker (Mr. Blaker):: Is there unanimous consent for the hon. member to pose the question?


Some hon. Members:: Agreed.


Blaine Allen Thacker: This concerns an issue that is current around the country affecting many Canadians, particularly students, namely, whether or not the government, as a matter of policy, is considering or actively planning a move into the voucher system where government payments would be made directly to students, who would then choose the university they wished to attend. Will the minister clarify for the House what the government policy is with regard to that at this point in time?


Gerald Augustine Regan: I thank the hon. member for Lethbridge-Foot-hills (Mr. Thacker), who has always shown a very keen and sincere interest in post-secondary education, for his pertinent question.
The voucher system is something that has been suggested by a number of groups, individuals and institutions. It has been examined throughout the country. At the present time it is not part of government policy to use the voucher system. I think that it is one of the options that should be examined in the course of the oncoming negotiations between the provinces and the federal government. But 1 do not think it is a panacea of answers to the problems which exist. From the point of view of all hon. members of the House who would desire that a student recognize what percentage of the funds for his or her education comes from the national taxes of the Government of Canada, it would achieve that.
On the other hand, there are some downsides to it. There is a problem where institutions might almost be bidding against each other for students who carry around such a value to their coffers in their person by way of vouchers. I would say today that there are circumstances which should be examined to see whether it is capable of being improved to overcome the downsides which seem to exist. I have not taken any policy position in favour of or against the voucher system at this point.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Blaker):: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Simcoe North (Mr. Lewis)-Housing-Guidelines used by officials contacting home owners on mortgage renewals, (b) Advice given by officials. (c) Request that minister make statement on motions; the

November 17, 1981
The Budget-Mrs. Mitchell
hon. member for Surrey-White Rock-North Delta (Mr. Fries-en)-Human Rights-Reported plan to establish civilian internment camps, (b) Terms of Standing Order published in The Canada Gazette; the hon. member for Algoma (Mr. Foster)-The Environment-Increased grants for construction of municipal sewage treatment systems.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. MacEachen that this House approves in general the budgetary policy of the government, and the amendment of Mr. Wilson (p. 12752).
Mrs. Margaret Mitchell (Vancouver East):: Mr. Speaker, on behalf of the New Democratic Party and as its housing critic, I join with most Canadians in expressing my deep concern that the Liberal budget has denied the realities of the economic crisis in Canada, has refused to take positive steps, particularly in the area of interest rates and unemployment, and is totally insensitive to the very serious social consequences for workers, for children, for the elderly, for average families and, particularly, for poor Canadians.
Before addressing the question of housing, I want to speak first on behalf of Canada's children. I should like the record of the House to show that the budget deliberately ignored the recommendations of the Commission on the International Year of the Child and of the Standing Committee on Health, Welfare and Social Affairs which concerned the urgent needs of Canada's children. These recommendations submitted to the House last spring urged immediate federal action and federal leadership to deal with poverty as it affects young children and their families. The Minister of Finance (Mr. MacEachen) completely ignored this very important and urgent report. Because of this budget omission, millions of Canadian children will continue to be deprived of adequate nutrition, decent shelter and necessary child care. Many are being damaged and abused because their parents simply cannot cope with the continuous stress, insecurity and unemployment which the budget predicts will continue. The plight of native children is a national disgrace. The government continues to ignore situations which would be intolerable even in Third World countries.
The minister said that the budget was concerned with equity. If the hon. member for Broadview-Greenwood (Mr. Rae) were here, I think he would say that this is another "MacEachenism", a half-truth. I ask the Minister of Finance whether this neglect of Canada's children is equitable, moral, or even financially feasible? The budget should have contained major reforms to the child tax credit system as a first step
toward an adequate guaranteed income. The $3 increase per month in favour of lower-income families, which the minister said is a reform of the child tax credit system, will not even cover the cost of babies' diapers.
Low-income men and women who stay at home to perform parenting roles with young children, especially many single parents, suffer considerable loss of necessary income. We believe they should receive higher tax credits and Canada pension coverage. Also the budget should allow expanded income tax deductions for the cost of daycare for working parents. Federal assistance should be expanded greatly to make good quality daycare services available in every community across the country. Surely this would have been a wise investment in Canada's future generation. Are human resources less important than gas and oil and national defence? We will pay the social cost of this negligence. It will cost far more than prevention would have cost had it been included in the budget.
As the NDP housing critic I want to concentrate on the budget as it affects Canada's serious housing crisis. In preparation for a study of the document, I listed several questions related to housing concerns in Canada. Let us take a look at the answers which are now apparent. First, would there be relief for home owners facing mortgage renewals? We know now that the government offered merely a crumb, and a pretty crummy crumb it is.
Second, would there be help for renters? There was nothing in the budget for renters-no shelter allowances or increases in non-profit housing, which is about the only affordable type of rental shelter.
Third, would the budget stimulate rental construction? We know that MURBs are out now, thank goodness, and that the government offered no-interest loans of $7,500 for some 15,000 rental units over the next two years.
Fourth, would there be increases in RRAP funds for renovations and home repairs? No, there was none.
Fifth, would the government help victims of urea formaldehyde foam insulation? This is a government obligation since a government-sponsored program encouraged the use of this poisonous type of foam. There was no help for UFFI victims.
Sixth, would the CMHC budget be increased, even increased to the amount allocated in 1976? No. It was not.
Seventh, would there be a lowering of interest rates, particularly mortgage interest rates, the major cause of the housing disaster? Of course not.
Eighth, what about no excess profits tax on banks and increases in capital gains tax? Of course there were no taxes on bank profits and capital gains tax remains the same.
Ninth, would there be a reinstatement of the community grants program for land banking which is also urgently needed for affordable housing? This is something about which municipalities were particularly concerned over the past year. No, again. All we have is a token amount in the budget for rental
November 17, 1981

construction; that is all there is which is positive. The budget made no impact at all on Canada's housing crisis.
The minister responsible for CMHC has left the House; one can understand why. He should hang his head in shame, not brag about the budget as he did the other day. He does not make any sense. He has not read the budget, to be bragging about it. He told home owners that this long awaited budget would help solve their mortgage problems. Hon. members will recall that he said it would help some 100,000 people renewing mortgages at over 30 per cent of their incomes. That is just for mortgage, interest and taxes; forget about the high cost of fuel and other household costs. He said that it would help them out of their dire straits and would save their homes for them. He was wrong, very wrong. The government decided to rescue Canadian home owners from the disaster created by high interest rates by imposing on them a certified disaster-the Canada mortgage renewal plan. This is a reincarnation of the old AHOP. We know how disastrous that was. It would put home owners in bondage for their lifetime.
We expected the Minister of Finance to make the banks bleed a little. He certainly did not do that in this budget. It is a bloodbath all right but not for the banks; it is the home owners who will be the blood donors. Bankers are laughing all the way to their banks. Instead of lowering mortgage interest rates, the government will subsidize continuing high mortgage interest rates. That hardly gets at solutions. Instead of requiring the banks to establish an affordable mortgage lending portfolio from their billions of dollars of profits-$1.4 billion in the first three quarters of this year-the government will guarantee mortgage interest deferral plans. This will bring in thousands more dollars to the mortgagors but will keep home owners in debt for the rest of their lives.
The Canada mortgage renewal program in this budget is a program for guaranteed usury, sponsored and encouraged by government. It is no solution at all. The tragedy is that many home owners-and I am sure hon. members know many of them-have no choice but to use the interest deferral scheme. They cannot sell their home without considerable loss, since prices have dropped and there are few buyers. Even if they could sell, where would they live? In most localities there are few rentals available for families, and those that are available have very high rents. There are long waiting lists for co-op housing which the government did nothing to increase in this abominable budget.
I want to illustrate the hopeless situation that a family of four in my riding of Vancouver East finds itself in today. This family has an income of about $30,000. The head of the household came from Calgary to Vancouver East in 1980. He is the principal of a local school and had saved $25,000 for a down payment which he put on a very modest three-bedroom home. He took out a $68,000 mortgage for the balance at 13 per cent and is paying $774 per month. Although that represented a little over 30 per cent of the gross family income, they could manage it. His wife has to remain at home because she
The Budget-Mrs. Mitchell
has a very small infant to look after. On November 1 this year the family was forced to renew the mortgage at 22 per cent. This shot their mortgage payments up to a phenomenal $1,248 per month, or over 50 per cent of their gross income. I wish the minister was in the House because I think his own mortgage is at 14 per cent.
Because the family had used their savings for the down payment, they have equity in their house and therefore will not qualify for a government grant. Yet even with an income of $30,000 per year, this family will not have enough left in the budget for food with an increased mortgage. They allocate $320 per month for food, and of course they cannot make it on that. They will probably have to arrange to defer interest of $250 per month through this Canada mortgage scheme. They will not get this as a grant because they have equity in the house. This still leaves them with $1,000 to pay, or close to 40 per cent of their income. A year from now they will lose the $250 deferral arrangement and will go to the maximum rate. In addition, the deferral amount will be added to the principal so their debt load will increase rather than decrease.
This mortgage deferral scheme offers nothing to this family, Mr. Speaker, and I am afraid that is pretty typical. Perhaps the rates are not quite as high in some other cases but the penalties will certainly hold true for most hardship cases across the country. Recently this man said he works harder and harder and gets less and less. He thought that he would probably have a better chance buying a lottery ticket.
I should like to quote from a statement by Jack Munroe to the IWA regional convention held recently in Vancouver. He said:
About 10,000 IWA members from B.C. (8,000 spouses, 18,000 children) have lost their livelihoods as a direct consequence of the staggering interest rates imposed by Canadian and U.S. federal governments. Some have lost their homes, and virtually all are paying hundreds of dollars per month more for their mortgages or rents. For a principal of $50,000-modest in light of B.C. housing prices-renewed September 1, 1980, for one year, the increase alone in interest charges effective this September absorbs $3.20 per hour in pre-tax earnings if the borrower is lucky enough to work full time. Negotiated wage increases are ranging from $1.25 to $1.90 per hour.
The Minister of Finance complained about wage increases. What does he expect when workers have to face this kind of expense? As my hon. friends says, they are working for the banks.
Only $35 million has been allocated for the mortgage deferral grants this year. It is a mere pittance and will not meet the needs of the 40,000 people whom the minister himself said are in danger of losing their homes. Many people will not qualify for the grant even though they cannot afford to live on their incomes. Any way you look at it, Mr. Speaker, it is an inadequate answer to mortgage problems.
We in the NDP do not agree with Liberal budget proposals to deal with the critical mortgage interest problem. Mortgage interest deferment adds to the total debt load of the home owner. As with the AHOP disaster, it is based on a faulty assumption that incomes will go up after a year when, in fact, we know that real incomes for most workers hardly keep pace with inflation. It places no obligation on financial institutions

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The Budget-Mrs. Mitchell
to share the load and, indeed, adds to their long-term profit margin. This is what the minister has tried to do in his budget. While it may lessen monthly mortgage payments temporarily for a few home owners, it merely postpones the agony for another year. The Minister of Finance should not have listened to the banks. This is no real solution; it is a seduction by the banker.
For some months we in the NDP have been saying that the only solution to high mortgage rates for both home owners and landlords is positive government intervention. Mortgage interest rates should be removed from the risks and costs of a fluctuating interest rate policy. Stable, long-term mortgages should be reinstated. We used to have them through CMHC. This should again become a direct function of CMHC.
We have advocated, as my leader repeated yesterday, a freeze to maintain present mortgage interest rates for six months. During this period the government should bring in legislation to reduce interest rates for mortgages to the rate of inflation, at about 13 per cent or 14 per cent. We believe that affordable shelter is an essential commodity, a human necessity, which must not be subject to the exploitation and manipulation of the marketplace. That is the philosophy of both the Conservatives and the Liberals.
We also urge that there be controls on speculation in the housing field and an opportunity for young families to get into modest starter homes at 30 per cent of their incomes. This is a government responsibility and a bank responsibility.
The Minister of Finance talked about equity in tax reforms yet he took no steps in this budget to increase the capital gains tax on housing speculation, nor did he bring in an excess profits tax on banks. The NDP recommends that 100 per cent of the profit derived from the sale of properties which are not the primary residence of a home owner should be taxed. This capital gains tax would discourage the kind of speculation which caused extreme jumps in house prices in markets such as Vancouver. It would also avoid dramatic price slumps and the tragic losses which some people face today when they have to sell their homes at drastically reduced prices. Many people in my city, if they are forced to sell their homes, will lose everything they have paid into them because prices have slumped so much.
I want to briefly speak about housing starts and their relationship to jobs-no news to anyone in this House, I hope. However, the budget ignores the fact completely that there are spin-offs for workers and spin-offs to the economy generally when we have a healthy housing industry. Unfortunately, because of high interest rates, housing starts in Canada are predicted to fall to 135,000 in 1982. We need at least 220,000 simply to keep up with housing needs, let alone make up for the reduced starts in the last few years, the lowest level in recent history. Not only will it leave Canadians desperate for a place to live, but it will also contribute to the present mass unemployment that we have in the lumber and construction industries.
Ten thousand IWA workers are laid off today because of the lack of housing starts in Canada and the U.S. The plywood industry alone can bring thousands of jobs to Canadians if it is expanded for Canadian housing. It is predicted that unemployment will go as high as 100,000 workers laid off and lining up for unemployment insurance benefits at this time next year. Those lay-offs will be directly related to the high interest policy of this government.
The housing programs in this budget will help to build only 15,000 units of rental housing, which will be a mere drop in the bucket. It is good as far as it goes, but a government policy is needed to lower mortgage interest rates so that we can build at least 250,000 new homes. This is the minimum required for Canadians each year.
I would like to quote from a statement given by the Canadian Council on Social Development at a press conference this morning:
The treatment of low-income people in the budget is a complete disappointment .. . They have ignored the plight of over 500,000 families who pay more than 30 per cent of their gross income for rents.
The most serious housing problems, of course, are in the rental field. We think it is bad for home owners, but it is much worse for tenants. This was confirmed in the minister's CMHC report which he signed and forwarded to the cabinet; yet he has done boom-all about it in trying to persuade the Minister of Finance to put some teeth in this budget. Many tenants pay well over 60 per cent of their incomes on rents, and they have little security of tenure. Over 50 per cent of Canadians will remain tenants all their lives. This is a lifestyle which is now here to stay. High mortgage interest rates have been a major deterrent to rental construction as well as to housing starts. As a result of zero vacancy rates in many of our major cities from coast to coast, rents have skyrocketed and rent controls are ineffective in most cities. I might say that the minister responsible for CMHC favours doing away with rent controls.
What does this budget do to relieve the situation? Does the government introduce plans to lower interest rates? We know that it does not. This would, of course, encourage rental construction, and rental construction where we could be sure there would be adequate rent controls. Does the government increase the budget for non-profit and government-owned housing? Of course it does not. The only solution that we have is this program for low income and moderate-income families. Did it bring back programs to help land banking and to service cheaper land? That was another omission, as I mentioned earlier.
In this budget, the government offers no-interest loans of up to $7,500 per unit to stimulate some 15,000 rental units over the next two years. This hardly meets the demand in Vancouver where we need 20,000 units right now, today, let alone the rental needs for construction across Canada. Government loans should be applied only to rent control housing. It is essential that investors not be allowed to sell off subsidized rental stock as condominiums. This is what was done with MURB construction. Built into that program, we must be sure
November 17, 1981

that the minister is requiring that these remain affordable rental units.
I congratulate the Minister of Finance, who is also not in the House, for at least removing MURB tax write-offs. Once again, he overruled the minister for CMHC, who has been extolling the virtues of MURBs for the last year. He wanted tax write-offs for multiple unit residential buildings. Perhaps we can be modest and say that our continued criticism finally got through, at least to the Minister of Finance.
The government lost $45 million in MURB tax write-offs last year, and it gained very little increase in the stock of affordable rental housing as a result. It is true that it got some luxury apartments, and today in the House we heard that they are the kind which are going up because construction people rush to try and take advantage of MURBs. However, affordable rental accommodation was usually demolished in order to build MURB-type luxury apartments. This was no solution.
There are a number of very positive steps that we in this party feel should have been taken and could have been taken to improve the housing situation if this government only had the will to change its priorities. Most housing developments have spin-offs to create more jobs and reduce lay-offs in our building trades and our forest industry. We have the trees, we have lots of skilled tradesmen and skilled labour, and we have a desperate need for housing. What we lack, of course, is government initiative and long range planning.
The priorities of this government's budget are all wrong. How can the minister justify increased expenditures for defence? I hope hon. members in the House will listen to this. Defence expenditures will increase from $5.9 billion this year to $9.8 billion over the next five years. There is a five-year plan for defence, but there is not even a two-year plan for building. The minister allocates only $350 million for housing compared to $5.9 billion for defence. Why does the minister responsible for CMHC not come into this House with a five-year plan for housing with some teeth in it, such as the Minister of National Defence (Mr. Lamontagne) must have done for his department?
Housing is a social investment; it is not just a welfare program. We are investing in permanent structures for people. It is an essential commodity and a human necessity. Surely Canadians have the right to expect a decent, affordable place to live. Surely our country can afford to invest in housing if we can spend $9.8 billion on defence in one year.
The New Democratic Party will continue to press for the following housing priorities which we believe Canadians need and deserve. First of all, concerning interest rate policy, the government should freeze mortgage renewal rates, not subsidize increases. Legislation should be introduced immediately to require stable, long-term mortgages with interest paid at the rate of inflation. CMHC should get back into the direct lending field and financial institutions should be required under the Bank Act to establish an affordable mortgage lending portfolio.
The Budget-Mrs. Mitchell
Second, we need long-range planning. CMHC should, of course, come in with a five-year plan for housing development based on population movements to the areas of growth where we have the greatest housing problems. We have problems across the country in urban centres. It is interesting to note that most of the immigrants also settle in the urban centres which have the lowest available housing and a zero rental vacancy rate.
We should also be thinking of the increasing number of young people, documented in the budget papers, who are forming households and need homes. There should be integrated planning with other government levels. This is absolutely essential. There should not be little trips out to see the different ministers of housing to talk about mortgage referral; there should be real, comprehensive planning which will involve land banking and housing programs for the future.
Concerning land for housing, federal and provincial Crown lands should be assessed, released and serviced for affordable housing developments. We have land. We could trade some of it off, in certain areas, for land banking programs which are absolutely essential. Along with that, we need long-term leasing policies which are desirable to retain affordable housing in the future. This is a social investment; it is not a giveaway.
With respect to native and northern housing, the federal government must assist with infrastructure and servicing costs on Indian reserves and in the remote areas of our country. It must provide adequate funds for new housing and home repairs. Assistance should be given for home repairs, renovations and energy conservation. RRAP funding should have been increased by this budget and the funding spread more widely. However, the money in the home insulation fund for this year should go first for reparation purposes to urea formaldehyde insulation victims. These people should be compensated and given first priority in this year's budget. This assistance could come from the allocation for CHIP or RRAP. As I have already mentioned, rental and co-op housing is another priority of the New Democratic Party which must be adequately financed by CMHC.
Canada Mortgage and Housing Corporation financing should be beefed up. The level of financing should return to at least the 1976 amount, which was $1.8 billion. They need to decentralize operations and give practical help to home builders and non-profit developers so they can build and repair affordable housing. We hope the minister responsible for CMHC will somehow develop a conscience and show real leadership when he presents the proposed revisions to the National Housing Act. Palliatives for the minister's real estate friends are not enough. Canada needs and deserves a long-range plan for housing development with policies and a budget to support it. This is the time when the Liberal government must recognize that affordable housing is a social right for all Canadians. This is a mean and regressive budget and Canadians deserve better.

November 17, 1981
The Budget-Mr. Herbert


Mr. Hal Herbert (Vaudreuil):: Mr. Speaker, my remarks on the budget presented in the House last week by the Minister of Finance (Mr. MacEachen) will concentrate on fiscal transfer payments to provincial and municipal treasuries and also to groups and individuals. Particular emphasis will be placed on the extent to which the province of Quebec and all Quebecois directly benefit from federal funding paid from the taxes of Canadians in all provinces.
First, I have a couple of general observations. The Minister of Finance can certainly be said to be following a policy of moderate fiscal restraint. Faced with the possibility of a downturn in the economy and the obvious need to reduce the government's deficit, it was difficult to introduce new spending programs. To have undertaken an expansionary budget when inflation is so strong would have been irresponsible. Inflation is the key obstacle to achieving sustained improvement in growth, employment and living standards. A reduction in the deficit will relieve some of the pressure on monetary policy and interest rates and will create a climate conducive to lowering inflationary expectations.
Nevertheless, many Canadians are facing real hardship caused by high interest rates, inflation and unemployment. Those hardest hit have been home buyers, farmers and small businesses. Budgetary measures to alleviate hardship have been targeted at these groups.
For most taxpayers the federal tax will be reduced. Those who have been enjoying tax breaks and preferences will no longer be able to escape paying taxes as they have in the past. All Canadians will be treated equally. This is just and fair.
Members of Parliament have been receiving representations from groups expressing their fears that a cut in federal fiscal transfer payments to the provinces would result in cuts in the amounts that the provinces provide for various programs such as hospital and health care, social services and post-secondary education. It has always been my point of view that, even though these programs are administered exclusively by the provincial governments, a major part of the necessary funding should come from the federal treasury. 1 will be explaining later why I believe in this approach.
However, I saw no logical reason for a continuation of the revenue guarantee payments that were started in 1972 and I expressed this opinion to the Minister of Finance in an open letter in August of this year. The elimination of this payment, now contained in the budget, will reduce spending next year on this item alone by over $800 million.
Let me hasten to add that this does not mean less revenue for the provinces. As a result of the closing of the tax loopholes, the nine provinces which tie their personal tax system to the federal collection will receive additional revenues from personal income tax.
Mr. Jacques Parizeau, the Quebec Minister of Finance, has long maintained that the federal tax loopholes should be closed. If Mr. Parizeau now follows the federal example, with which course of action he is already in agreement, then Quebec's provincial personal tax revenues will also increase,
thus counterbalancing the ending of the revenue guarantee payments. While the federal government will realize savings of $915 million in 1982-1983, provincial and territorial revenues will increase by $1,084 million over the same period as a result of tax changes proposed in the budget.
I also suggested in my letter to the Minister of Finance that the present method of calculating equalization payments to the less wealthy provinces be revised. The system is antiquated and inequitable. Now the method is to be changed.
A vast number of programs that are exclusively the responsibility of the provinces are financed by huge federal transfer payments that put tens of billions of dollars into provincial treasuries. In every province, block funding or per capita payments are the cornerstone of support for health care, medicare and hospitals. In the case of post-secondary education, our universities receive well over half the moneys they spend from the transfer of federal funds. In other programs, tens of millions of dollars are transferred to the provinces to provide subsidies for projects ranging from public transportation to financial support for sewer and water works.
The Canadian government has provided three-quarters of the total of government grants for hundreds of municipal projects. For example, in the constituency of Vaudreuil, a large arena at St. Polycarpe and magnificent municipal libraries at Pierrefonds and lie Bizard have been built thanks to federal funding.
Rent subsidies for low-cost housing are shared by the federal and provincial governments, and in many of these projects the federal government has provided all or most of the financing or has provided a guarantee for the mortgage. In many cases the mortgage was provided at extremely low or subsidized interest terms.
A variety of other programs, for example, contributions for the development of provincial historical sites, have resulted in transfers into provincial treasuries with no requirement that they be detailed in provincial accounts, and accordingly with no accountability and almost no visibility. Federal transfers of funds are certainly not made exclusively into provincial treasuries. Municipalities receive considerable sums from the federal treasury in lieu of taxes. While almost all municipalities have a federal institution, such as a post office, many receive a financial benefit that is certainly far in excess of the cost of any services received in return. This is particularly true in the constituency of Vaudreuil at Ste. Anne de Bellevue, where the magnificent veterans' hospital is located, and at Rigaud, where there is a huge national revenue complex.
While mentioning these federal complexes, we should not forget the direct benefits the local communities derive from this practical decentralization of the federal presence. The number of federal departments represented is certainly not limited to the post office, veterans affairs and national revenue. Again, in Vaudreuil it includes such variety as a fisheries research station, a Parks Canada national historic site and federal offices of other government departments. All contribute directly to municipal revenues, provide employment and help to stimulate the provincial economy.
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A great number of other institutions that are considered a provincial responsibility are supported by federal funds, such as municipal and provincial museums, and there are capital cost grants for hospital construction. Subsidies are provided for housing for veterans and for tourist information centres. Funding is made available for the construction of underpasses, such as that at Dorion in my riding where such a tragic accident occurred so many years ago. More recently the underpass has been constructed at Ste. Anne de Bellevue, and funds are now being requested for an underpass at Terrasse Vaudreuil. All this massive federal funding I have mentioned so far is made available across this country on a per capita basis; that is, according to provincial population.
Now I want to turn to those programs that are of special benefit to the province of Quebec. The largest in dollar value is the equalization program, the unconditional transfer of federal taxes into the Quebec provincial treasury that has contributed in this one program alone some 10 per cent of Quebec's revenue this year, or over $1.7 billion. This generous sharing of Canada's wealth is to be enshrined in our new Constitution. Fifty per cent of the moneys distributed under the equalization program go to Quebec. Also, huge sums go into the provincial treasury to support second language instruction. Quebec is again the major beneficiary.
Support for industry as well as provincial works from the Department of Regional Economic Expansion is concentrated in Quebec as a targeted area for funding. The winter works programs of the Department of Employment and Immigration are also most heavily funded in Quebec, where the levels of unemployment are greater than the national average.
While speaking of unemployment, in large measure accentuated in Quebec by the uncertainties created by talk of separation and problems created or fostered by Bill 101, I would like to underline another benefit of national sharing. While contributions to the unemployment insurance fund on a per capita basis are approximately the same across this country, this is not the case when one looks at the benefits paid out. In 1979, for example, payments per capita in Quebec were over $240 while payments were less than half this figure in Ontario, and only one-quarter or $60 per capita in Alberta. For every $3 contributed in Alberta, only $1 is paid out. In Quebec $3 is paid out for every $2 contributed. One cannot be proud of high unemployment, but Mr. Levesque should not forget that the unemployed who cannot find jobs because of a lack of investment are receiving benefits that are paid in large measure by contributions from other provinces.
One can argue as to the reasons for the high unemployment in Quebec, but there are other groups of citizens in Quebec who receive a higher level of financial support than the national average. There are more persons receiving more money from the guaranteed income supplement of the old age security program. There are also more widows between 60 and 65 receiving the spouse's allowance. This is an historical characteristic that is financed by federal dollars.
The Budget-Mr. Herbert
At the other end of the scale, daycare centres, which are financed 50 per cent by the federal government under the Canada Assistance Plan, receive 2.5 times as much per capita in Quebec as their counterparts in the neighbouring province of Ontario.
I want to make reference to two other major support programs of particular benefit to Quebec residents. The first is the federal energy program that subsidizes the imported oil used in the province of Quebec. This ensures that Quebec car, truck and bus drivers pay no more for their gas than is paid in the western oil producing provinces. Likewise, the home owner and apartment dweller can heat their residences with heating oil heavily subsidized by a federal program. This federal financial support is Canadians sharing with Canadians and would certainly not continue in the event that Quebec separated.
Of special benefit to Quebec and to farmers in the constituency of Vaudreuil are the millions of dollars that subsidize the dairy industry, which is the backbone of the Quebec farming community.
All these programs, equalization, language training, energy subsidies, daycare centres, pensions, unemployment benefits, winter works programs, milk subsidies and many others, bring to Quebec residents federal contributions far in excess of any amounts that would be calculated solely on the basis of population.
The federal government has not touched any of these programs that are of special benefit to Quebec, despite the heavy pressure to reduce the deficit by reducing spending. In the past it has been Quebecers who have been able to contribute to the prosperity of our country. In the future it will again be the turn of Quebecers to play the part of big brother and to help those less fortunate. But today, faced with a climate of economic uncertainty that has been fuelled by talk of separation, Quebecers are able to share and participate in the benefits that flow from our federal system of government.
I would like to discuss another of the major benefits of the federal system of government in this great country of ours, the equalization that comes from a national system of tax collection.
Everyone is aware of the higher level of provincial taxation that is applicable in Quebec. A Quebecer, this year, pays on a $15,000 taxable income a marginal tax rate 30 per cent higher than the Ontario resident. The higher the taxable income, the greater is the amount that a Quebecer must pay in provincial income tax. Thus many high salaried Quebecers who have the option available to them have moved to Ontario. Airline pilots are an excellent example. Quebec loses not just the tax difference but the total provincial tax that would have been paid. In addition, of course, the economy suffers from the reduced buying of furnishings, food and services when a high salaried person moves out. Fortunately, the individual who moves to Ontario still pays the same federal tax and the moneys contributed help to pay for the programs that benefit all Quebecers.

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The Budget-Mr. Herbert
The tax base is smaller per capita in Quebec than in Alberta, for example. Because everyone pays federal income tax on the same scale, Albertans, whose average salaries are higher, make a bigger contribution to the federal treasury. However, the distribution of federal funds either treats everyone alike, such as is the case with medicare and post-secondary education funding, or it favours the less wealthy provinces, such as with equalization, unemployment insurance payments, work programs and regional economic expansion funding. Thus a federal system shares not only in the way it spends, but also in the way it collects taxes.
Incidentally, it may be of interest to Quebecers to have the precise figures on the amount of the reduction in federal income tax payable in 1982 attributable to the budgetary measures introduced last week. A family of four persons with one wage earner would pay $425 less on an income of $15,000, $463 less on an income of $20,000, $538 less on $30,000, and the reduction would be $798 in the case of the head of a family of four earning $50,000. In Quebec this year, provincial revenues fall well below provincial expenditures despite a massive input of federal funding. It is not an exaggeration to suggest that if Quebec were not a full partner in sharing Canadian wealth, it would be facing bankruptcy.
Can we not be proud that the provinces that have the least to lose from federal program cuts are so willing to continue to share their good fortune with their fellow Canadians in other parts of the country? These are the same provinces, ruled by Tory governments, that have deplored the federal deficit, but not one provincial spokesman has suggested program cuts that would directly impact the already hard-pressed and less wealthy provinces.
I want to turn, for a few minutes, to the question of what impact the budget will have on the individual. It is true, for example, that a doctor who earns $100,000, using tax shelters to the full, could now be paying $23,000 more in taxes. But it is equally true that the doctor with the same $100,000 income who was not using tax shelters will pay $5,000 less in taxes.
Some 12 million taxpayers will pay less and 800,000 will pay more. Almost all those earning $30,000 or less will pay less income tax as a result of the budgetary measures.
The Minister of Finance has attempted to make far-reaching budgetary reform of the personal tax system. A system which allows persons who earn $100,000 without having to pay a cent of income tax needs a radical overhaul. One columnist wrote, "They skipped, and slipped and slithered and hopped their way through tax loopholes."
I believe in equity, equality and fairness and I applaud the move by the Minister of Finance to end the tax shelters that were mostly of benefit to the high income individuals.
As the details of this budget are discussed, undoubtedly some minor inequities will be found and if past experience is any judge, modifications will be introduced. However, the broad principle of equitable treatment has been established and will be maintained.
While I can understand and be somewhat sympathetic toward the arguments of the members of the New Democratic Party, I have neither understanding nor sympathy for the Tory response. They indicated the continuing inconsistencies in their criticisms when they supported the New Democratic Party subamendment on Monday evening.


Some hon. Members:: Hear, hear!


Harold Thomas Herbert: In summary, Mr. Speaker, I wanted to see the federal deficit reduced but not placed on the backs of the provincial governments. The reduction in government borrowing resulting from a lower deficit will reduce the pressures on interest rates, ease the inflationary pressures and, to some extent, ease the borrowing problems of the business sector. I wanted to see a commitment to continue federal financing for health care, medicare and post-secondary education. I felt particularly that the present activities of our universities were threatened. I wanted to see an end to the revenue guarantee and I wanted a revision to the method of calculation of equalization payments.
The Minister of Finance has chosen an appropriate level of restraint during a difficult period when it would have been easy to loosen the purse strings. I have no hesitation whatsoever in expressing my full approval of the budgetary measures introduced in the House by the Minister of Finance last Thursday evening.


Mr. D. M. Collenette (York East):: Before I begin my remarks, Mr. Speaker, I would like to thank the hon. member for York-Peel (Mr. Stevens) who agreed to speak after the dinner recess so I could speak at this time.
Two of the main themes in the budget as laid out by the Minister of Finance (Mr. MacEachen) were restraint and equity. If restraint and equity, as prescribed in the budget, can be achieved together with the economic development strategy outlined by the Minister of Finance in the document that accompanied the budget, then this will form the basis for economic renewal.
I wish to deal with the first two themes in the context of the fabrications of the official opposition, particularly the fabrications contained yesterday in the speech by the Leader of the Opposition (Mr. Clark). We know that the central theme of the budget, which is to restrain government expenditures in order to reduce the borrowing of capital, is crucial to the government's strategy. A reduction of government expenditures will assist private sector borrowing by reducing pressure on credit markets and therefore easing interest rates.
The government estimates that the deficit will decrease from $10.1 billion in this fiscal year to $5.5 billion in the fiscal year 1983-84. This is indeed a laudable achievement and one for which I am sure the official opposition would be pleased to take credit if it were the government. The official opposition has been harping away for many years on the need for the government to pare its expenditures and operate in a more businesslike way. The government is doing this but in a way which restores and safeguards equity in the economic system.
November 17, 1981

In his speech yesterday, the Leader of the Opposition made what I consider to be an incomprehensible assertion: that there is no evidence of restraint on the part of the government and that government expenditures are growing by 22 per cent this year while revenues in the next two years will be up by about 52 per cent. Those assertions are not borne out by fact. These falsehoods expressed by the Leader of the Opposition were compounded when he further stated that the energy taxes this year will be up by $4.2 billion.
I would like to set the record straight. The increase in government expenditures and revenues this year and next reflect, on one hand, an increase in public debt charges and on the other hand, energy revenues. Government expenditure restraint is real and federal financial outlays, excluding public debt charges, are expected to grow by 11.9 per cent in 1981-82 and 11.1 per cent in 1982-83. This is less than the growth of the GNP, and this must be emphasized. Furthermore, compared with last year's budget, the total outlays as a share of the GNP are lower in each year of the fiscal plan to 1983-84. The drop in the share of outlays, excluding public debt charges, is particularly dramatic. It is true that energy revenues do grow $3.7 billion from 1981 to 1983 but not by $4.2 billion as asserted by the Leader of the Opposition. Moreover, it is misleading to suggest that this growth in energy revenue provides a significant reduction in the deficit. In fact, compared with energy revenues in last year's budget, energy revenues are down by $.7 billion in 1981-82 and up $0.9 billion and $1.5 billion in 1981-82 and 1982-83 respectively.
The Leader of the Opposition, who should be pleased that the government is restraining its expenditures, made another false accusation yesterday when he stated that as a share of the GNP, federal revenues are the highest since 1946. Again, this is just not true. Federal revenues on a national accounts basis accounted for 21.9 per cent of the GNP in 1946, and in 1981-82 revenues account for 20.9 per cent of the GNP. In the year 1982-83, they will be 21.2 per cent of the GNP.
A proper way of examining the extent of government activity is on a public accounts basis. Only net petroleum compensation payments and the government contribution to unemployment insurance benefits are recorded as budgetary expenditures to the extent that they are direct subsidies and transfers. Budgetary revenues declined from 18.7 per cent in 1974-75 to 15.7 per cent in 1980-81 as a result of discretionary tax decreases over this period. Over the course of the fiscal plan, revenues will rise to 17.2 per cent of the GNP in 1982-83 and remain at about this level to 1985-86. The burden of taxation is less than it was in the 1974-75 period.
That was a period, it should be remembered, that was marked by lower deficits than they are at present.
Another point that the Leader of the Opposition made yesterday which must be refuted is that essentially this is a recessionary budget. He maintains that because the budget documents show weak growth in the United States. A pre-condition to renewed growth is a sustained permanent reduction in
The Budget-Mr. Collenette
inflation. The strategy of deficit reduction and lowering of inflation and interest rates is intended to be pursued over the medium term.
In the short run, if the economy is somewhat weaker than assumed, the easing of interest rates will proceed more quickly. The pace of deficit reduction will proceed more slowly in response to the slowing of economic activity. I am confident the fiscal position is on track. It would be a mistake to try to fine tune the economy in response to one or two months of economic indicators.
I thought it useful to set forward those facts to refute some of the very questionable, erroneous and misleading assertions made yesterday by the Leader of the Opposition. One should not be surprised that he would twist the facts, read selectively from the budget documents and play on the fears of Canadians because he has been doing this for the last five years. Canadians are on to his game. Hopefully they will not be misled. Nevertheless it is important for those who are led down that path by him that the record be straightened.
I want to deal with the other theme of equity at more length in the context of the housing problem that we have in this country. In the government's programs of the last few years we have seen the Liberal approach, the approach of fairness and equity, being applied to housing contruction. It has been acknowledged by the OECD and other reputable outside analysts that Canadians are remarkably well housed. One has only to travel abroad, to European countries where economic growth is still high, to see that housing conditions there do not compare with those in our country.
I want to deal more particularly with the whole question of who should receive help in terms of mortgage assistance. Who in society should receive help, those who have mortgages on their homes or the renters, or a mix of both?
A lot of wild assertions have been made in this House in the last while that the government was not responding to the crisis being brought about by high interest rates. All of us on this side lament the high interest rates we have seen in August and September. It should be emphasized that these were of a temporary nature. The basic rate, the Bank of Canada rate, has dropped about 5 per cent in the last six weeks. It will drop even further if the measures outlined in this budget come to fruition. Inflation will be lowered and more economic activity will ensue.
I have been somewhat vexed in the last while. I have come to the House of Commons each day. I have heard wild allegations being made by members of the NDP and the Conservative Party about the need to assist those with mortgage renewals. Only four people in my constituency have come to me expressing those fears which the opposition asserts are rampant in the country.
One was a small-business man whom I know very well. Unfortunately he has suffered because of the high interest rates in his mortgage brokerage business. The other was a home owner whom I have known for many years. He admitted that he and his wife did anticipate that rates would not

November 17, 1981
The Budget-Mr. Collenette
increase, that they were out a little in their calculations, but they were prepared to make the lifestyle adjustments to accommodate the short-term surge in interest rates. Unfortunately, they renewed their mortgage at 22 per cent. As I said to him, when rates come down, if you have an open mortgage you can renegotiate rather than be locked in to these exorbitant rates for three or five years.
The impression is being given by the opposition that those who are renewing mortgages today at 20 and 22 per cent will be locked in and will suffer in the years ahead. Granted, there will be some short-term dislocation. That is the unfairness of the system of mortgage financing in this country. Some people who have had to renew their one, three or five-year mortgage in the last couple of months have really been dealt a heavy blow by the high rates.
The question has to be asked whether it is the government's obligation to subsidize people across the board, to give blanket subsidies for mortgages. Listening to the official opposition and the NDP, one would assume they want everybody in this country subsidized. My question to them is, who will pay for the subsidy? I will tell you where the revenues will come from. They will come from the ordinary taxpayers, many of whom do not have mortgages. Many are retired and their homes are paid for. Many are new Canadians who perhaps tried to pay off their mortgages in a short period of time. These are the people who will be paying for an across-the-board subsidy.
What about the renters? Half of those in my constituency in metropolitan Toronto live in rental accommodation. Would it be fair or just to expect those people from their general tax revenues to subsidize mortgage rates, as proposed by the leader of the NDP (Mr. Broadbent) who advocated the government should subsidize the spread between 15 per cent and the actual mortgage renewal figure? I could not look my constituents in the eye and say to them that is fair, equitable and just.
Who should we subsidize? Who should we help? The government said in the speech from the throne that assistance would be forthcoming. If you read the budget documents, there is no doubt that that promise has been discharged. I have no compunction or hesitation in telling my constituents that we have sheltered those Canadians who are on the verge of losing their homes.
That is what the minister responsible for housing has been saying in the House these past few weeks. He has been pilloried unfairly, unmercifully by the opposition in a callous way. They have been misrepresenting what he has been saying, twisting his answers. That minister has shown more compassion, sensitivity and understanding about the social needs of Canadians than will ever be shown by the likes of those characters on the other side.
That minister has suffered day in and day out. 1 say, and my colleagues agree, that that minister has shown compassion. He has fought long and hard for assistance for those who are in dire straits. He has delivered in this budget because this budget will help those who are in the direst of circumstances, those who but for this budget would be out on the street. I
believe the criticism directed at the minister is totally unjustified and is not one of the most pleasant things I have heard during my time as a Member of Parliament.
Is it the responsibility of the government to subsidize people across the board? Is it the duty of the government to subsidize the needy? Or is it the duty of the government to subsidize everyone irrespective of their lifestyle? Indeed, is it the duty of the government to subsidize lifestyle? I say, no. The Tories always talk about self-reliance and about standing on one's own two feet. There is an obligation that people have today when they enter into the purchase of a home. Surely they have an obligation to look at their own financial situation; how much money they have in the bank; how much is their down payment; how much their repayments will be on a monthly basis. Is it not also their obligation to foresee a downturn in the economy? Recessions are not new. Downturns in economic activity are not new. The people I described earlier, the seniors in my constituency went through the depression and have paid for their homes because they knew the good times could not always last. They knew that the carousel sometimes has to slow down. That is what has happened in the last few years. There are many who did not have the foresight to recognize the realities and uncertainties of life in general.
This government has ruled most of the past twenty years. We have seen some of the most prosperous economic growth in this period. We would like that unbridled economic growth to continue in the future. When we observe other countries we realize that we cannot deliver at the same level that we have been used to in the last twenty years. There has been some levelling off. We must now stop and regroup our economic policies and proceed forward and lay the foundation for economic renewal for the years ahead. That is what this budget addresses.
There is another side to the housing crisis in this country. There are legitimate problems, but the word crisis is used indiscriminately every day in the House. I do not really think Canadians take to heart these hyperboles from the opposition that are littering the carpet of this chamber every day.
Another issue with respect to housing is the amount of rental accommodation available. It is not a problem across the board. It is a problem in selected high growth areas. I should like to refer to the speech the Leader of the Opposition made yesterday. It can be found on page 12795 of Hansard. The Leader of the Opposition made his plaintive lament for renters who, he claims, are injured because of this budget. He was following up on a theme that was started by the member for St. John's East (Mr. McGrath), in his usual hysterical way, concerning the MURB program.
What did the Tories do for renters in this country when they ruled in 1979, in that hilarious hiatus, that brief fleeting moment, that incalculable interregnum of despair? What did they do for renters? I will tell you what they did, Mr. Speaker. They introduced a mortgage tax deductibility scheme. This would have raked the federal treasury of three or four billion
November 17, 1981

dollars. This would have to be paid for. Who would pay for the three or four billion dollars? It would be the general taxpayer. It would be the revenues from the renters in my constituency that would bankroll an extremely unfair mortgage tax scheme, and that would benefit only those at the upper end of the income scales.
The member for Burlington (Mr. Kempling) is leaving the chamber because he cannot face the music. The hon. member was part of that diabolical scheme that, luckily enough, did not see the light of day. The Conservatives are now ridiculing us. It was the Tories who demonstrated their feelings for renters. They care for renters in the same way as they care for everyone: looking after the privileged first and the poor and ordinary Canadians last.
What about their brethren in the province of Ontario who are about to lift the lid on rent controls? They would do so in one callous, uncharitable move. This has been predicted. They are trying to skate around it and not break their election promises. However, they will lift the lid on rent controls. Thousands of people in this country, in our province in particular and in metropolitan Toronto, and perhaps even hundreds in my constituency in York East, will be forced into the street. This is the Conservative philosophy. It does not matter whether one is a provincial or federal Tory. The Conservative philosophy is at least consistent, and that is, "to hell with the weak guy, let him fend for himself and we will look after number one, we will look after the tough people, the strong people".


Some hon. Members:: Hear, hear!


David Michael Collenette: That is why they are now objecting. How about their attitude towards the MURB program? In the last few days hon. members have been complaining about the program. Yesterday the hon. member for St. John's East wept his river of Newfoundland tears and complained bitterly about the MURB program. It has to be remembered that the MURB program has been used by many as an artful tax dodge to erect luxury condominiums in such places as Victoria, Vancouver, Toronto and Ottawa. It is this kind of attitude that is denuding metropolitan Toronto of decent, affordable housing for its citizens. It is forcing the average people of metropolitan Toronto to go out to the suburbs to take what is left over, while all the white painters, all the artsy crowd, all those with money in the bank, all those who can write off everything in their incomes move back downtown into condominiums that cost between $150,000 and $400,000 for a two bedroom unit in a constituency like Rosedale. What does the hon. member for Rosedale (Mr. Crombie) have to say about that? Where has he been in the last couple of days? The hon. member was not present in the House when the budget was introduced. Do you know why he was not here, Mr. Speaker? He could not stomach what the hon. member for St. John's East said about the MURB program. The hon. member knows what these tax dodgers will do. They will drive out affordable accommodation in ridings like his. The member for Spadina (Mr. Heap) is present in the House and is unresponsive in this matter. The
The Budget-Mr. Stevens
hon. member knows that I am speaking the truth with regard to this matter.


Some hon. Members:: Hear, hear!


David Michael Collenette: I should like to tell hon. members more and I am getting wound up. However, I do not want to deny members their dinner period.
Tory economics is Reaganomics, Thatcher economics. We have made tough decisions with regard to this budget, but we have kept the basic social programs, the underpinning of the economic system in this country, intact in tough times. 1 lament the laying off of people at Massey-Ferguson Industries Limited. But they will be protected because there will be unemployment insurance. Their pensions are indexed, their family benefits are indexed. These are Liberal programs. Those are Liberal economics.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Blaker):: Order, please. It being six o'clock, I do now leave the chair until eight o'clock this evening.
At 6 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
The Acting Speaker (Mr. Blaker):: Order, please. When the House rose at six o'clock, the hon. member for York East (Mr. Collenette) had the floor. I presume he has finished his remarks, so in his absence I will recognize the hon. member for York-Peel (Mr. Stevens).


Hon. Sinclair Stevens (York-Peel):: Mr. Speaker, in rising to speak on the budget I do so with very mixed feelings. Certainly I have had an opportunity to hear the Minister of Finance (Mr. MacEachen) in his budgetary address to the House. I heard certain ministers add further governmental comment to the budget. I should like to try in a fairly neutral fashion to put the budget into proper perspective. I say that because I was rather startled today to hear the Secretary of State (Mr. Regan) say that he felt he should compliment the Minister of Finance on the budget. Presumably it is not just the Minister of Public Works (Mr. Cosgrove) who did not know what was going into the budget up until the time it was virtually delivered. But obviously the Secretary of State, in order to make that comment in the House, has not even listened and certainly has not read what is in the budget. How anyone could possibly say with a straight face, especially someone from the province of Nova Scotia, that he wanted to compliment the Minister of Finance on the budget, I find hard to understand.
The hon. member for York East (Mr. Collenette) waxed eloquent at the end of his remarks about the evils of MURBs

November 17, 1981
The Budget-Mr. Stevens
and why he was pleased that they were finally stricken from the record and presumably would not be available in the future. The hon. member for York East spoke of the debate on the budget of the Minister of Finance in October 1980. As the House will recall, that budget renewed MURBs. In fact it was said at that time that in order to help reduce shortages of rental accommodation and to provide a needed stimulus to the construction industry, the tax incentive for multiple unit residential buildings which expired on December 31, 1979, would be reintroduced effective for construction starts after October 28, 1980. Why were we told by the Minister of Finance in October 1980 that a person is a hero if he puts money in the form of a tax shelter investment into certain types of residential accommodation, only to find that on November 12 that same person is suddenly an enemy of the state, that somehow he has been ripping off society and that the minister feels there is a loophole which he must plug? It is something which no longer holds together. The reason I find it most inconsistent for the minister to take that attitude, as well as presumably other ministers and the member for York East, is that we were told on budget night that it was a budget of restraint, of equity and of renewal. I should like to explore why it is equitable to say that tax shelters designed to give Canadians accommodation are evil and that they must be stricken from the record. At the same time the same government wants to preserve tax shelters for the promotion of circuses such as Circus Tivoli. If it is right to have tax shelters to promote circuses, films and related activities, certainly something must be totally wrong with a government that on the other hand indicates it does not want to see rental accommodations for Canadians built under the same tax shelter plan.
As I go through my remarks, I will be able to cite many examples of the lack of restraint in the budget, despite what the minister told us. In fact, there is no equity and no renewal other than whatever hope the minister might have of renewing his own fortunes in the country as a political animal and as a member of a political party. Before getting into that, I should like to make a special comment about a partner in the government's actions who seems to be almost bashful about taking full credit for what the country is going through at the present time. I refer of course to the fact that it is not only Dr. Trudeau who is prescribing this economic medicine; it is Dr. Broadbent. We have two doctors who are in grand alliance, working in virtual conspiracy as far as the Canadian public is concerned. I believe the Canadian public must be told in no uncertain terms that the rump NDP not only triggered the election of this government, but in truth is working hand and glove with the governemnt in giving us economic irresponsibility-


Mr. Pelletier:: Stick to your text.


Sinclair McKnight Stevens: I heard a Liberal member ask why I called them Dr. Trudeau and Dr. Broadbent.


Irénée Pelletier: No. I said, "Stick to your text."


Sinclair McKnight Stevens: Anyone who comes from my area of Canada, from Newmarket or from York-Peel, knows what doctor stands for. It is a Ph.D. It means piled higher and deeper.
Having said that, I feel it is important to attempt to get some perspective of where in fact Canada has been going in terms of other economies among western nations. I find this area startling. When the present government took power, Canada was third among world nations as far as the gross national product was concerned. In 1968 we stood third in terms of per capita gross national product in Canada; we were topped only by the United States and by Sweden. You will know how much we have slipped when you read in the World Bank atlas that we have dropped to number eight position. How many on the government side are willing to acknowledge that in the last set of statistics issued by the World Bank we have slipped to thirteenth position among world nations? The nations that on a per capita basis have a better GNP than Canada are Switzerland, Luxembourg, Sweden, Denmark, Germany, Belgium, Norway, Iceland, Netherlands and France.


An hon. Member:: Kuwait.


Sinclair McKnight Stevens: My prompter on the Liberal side says Kuwait. If he wants to add the oil rich countries, then he will find that we rate nineteenth in the world, not thirteenth. I am glad that at least one Liberal member is aware that not only are we behind the industrialized nations that I have referred to but in fact we are nineteenth if you add the various oil-rich countries of the world.
What is most interesting is not just those figures but the fact that if you start examining the relative gross national product figures on a per capita basis, not just on the average in Canada but with respect to provinces in Canada, you find some startling facts.
I referred, to the Secretary of State who comes from Nova Scotia as, of course, does the Minister of Finance. The next time they have an opportunity in this House, I should like one of them to stand up and explain to his people and to Canadians at large why he is content that Nova Scotia should have a per capita gross national product of about $6,200 compared to the gross national product on average for every person in Greenland of $7,990. Why, for example, do the five eastern provinces of Canada, including Quebec, all have a lower gross national product on a per capita basis than Greenland? Prince Edward Island has less than half the gross national product of Iceland.
Instead of being complacent and, if you like, rhetorical, and simply saying, "We are doing well and somehow or other it is a budget of restraint and equity and renewal," I think it is time that the government came to its senses. It is time it realized that it has taken Canada, a prosperous country and one that had great wealth and great earnings, and relegated it to a position well down on the list of prosperous nations of the world.
November 17, 1981

Let me touch on something else now, Mr. Speaker. When we compare Canada to other countries, 1 think it is interesting to note the October issue of the Euromoney Magazine which has an analysis of the 85 larger western countries. For example, it has what it calls the performance of economies between the years 1974 and 1981.
Canada has fallen to number 30 among the 85 countries listed. In the current year we have fallen still further, to number 39 among the 85 countries listed. I suggest to members of the House that it is time we stood up and said to this government. "We have had enough. This does not have to occur in this country, and we want you to give us a budget which will produce the economy to get prosperity renewed in this country."


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Not only is our economic performance deteriorating, but we find that our credit in the rest of the world has fallen until we are thirteenth among the nations surveyed. We used to be in the upper bracket, in the top five, and now we are number 13, just ahead of Papua New Guinea. That is the Canadian credit rating for the current year and as far as the Euromoney Magazine is concerned.
Members on the other side may ask why we blame them, but I find that they are very ingenious themselves when it comes to finding somebody to blame. Surely they will pay attention to one of their own members, the Minister of Industry, Trade and Commerce (Mr. Gray). When he appeared before a committee of this House in October, 1979, he warned that a high interest rate policy would slow down the economy, mean the loss of thousands of jobs, an increase in the cost of living, probably bring the housing and construction industry to a halt with thousands of jobs lost in those sectors, put housing beyond the reach of most middle and lower-income Canadians, hurt small business which depends on bank borrowings to operate, hurt farmers who have the same dependency on bank borrowings and would, therefore, add to the cost of food.
Many of us heard the minister make that statement before the Commons finance committee on October 30, 1979, so hon. members opposite cannot say that they are not aware- because certainly one of their ministers is-of the consequences of the high interest rate policy. The budget shows that absolutely no steps have been taken to relieve the high interest rates, a phenomenon we have been living with in Canada.
In that context, how can a minister stand up with any degree of honesty and tell us that he thinks the Minister of Finance should now be complimented, the same Minister of Finance who pointed out on budget night that he anticipated that the real growth in our economy would be 2.2 per cent in 1982?
Where will that put Canada, Mr. Speaker? It will mean that we no longer hold thirty-ninth place in the list of economic performance of countries in the world; we will be down to number 40. An advance of 2.2 in the real growth of our economy will mean that if the Euromoney Magazine estimate of world economies is correct, Canada will be fortieth, tied
The Budget-Mr. Stevens
with India and coming behind Turkey, Greece, Haiti, New Zealand, Spain, France, Portugal, United States, Austria, Guatemala, Argentina, Yugoslavia, Uruguay, Finland, Cuba, Luxembourg, Ireland, Panama, Venezuela, Brazil, Australia, Japan, Ecuador, Dominican Republic, Colombia, Peru, Philli-pines, Chile, Thailand, Trinidad and Tobago, Hong Kong, Indonesia, Singapore, Malaysia, Taiwan, Barbados, Paraguay and Nicaragua. Those are the countries that we will be trailing if the estimate of the Minister of Finance of our real growth next year is accurate, based on the Euromoney Magazine line-up of how those economies will grow next year.
I would point out that certain of those economies are anticipated to have a real growth of over 10 per cent next year. Here we have a pitiful Minister of Finance coming in and telling us we should be proud of a 2.2 per cent growth in our economy in the coming year. Having said that, I would like to emphasize that I believe that the continuation of the policy that we see in the minister's budget has not only been tragic for Canada, but has been totally unnecessary as well.
Let me put these figures on the record. The Minister of Finance forecasts that if one wants to take the period from 1981 to 1987, the average real growth in our economy will be 2.7 per cent. If he is correct, again it will mean that since this government took power, not only have we had a steady decrease in the real growth in this country, but that, in addition, the next five or six years will be even worse than any previous five or six years that we have experienced under this government.
The fact is that when we take a look, for example, at the real growth in Canada on average between the years of 1964 and 1969, we find that it was 5.8 per cent. In the next five years, it was 4.6 per cent, and in the last five years, it has slipped to 2.9 per cent. We are now told that in the next five or six years it will be down still lower, at 2.7 per cent. That is why I am suggesting to all hon. members that they owe it to the Canadian public to be a little more candid, to lay it on the line and to admit that the economic policy followed by this government to date has not been working and that it must be stopped and reversed at the earliest possible opportunity.
I realize, having recommended that, that the government's allies to my left, the NDPers, the socialists, headed by the vice-president of Socialists International, the hon. member for Oshawa (Mr. Broadbent)-


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: -will do all in their power to try to ensure that their partner, the Liberal socialist party of this country, not reverse their trends.


Mr. Deans:: How did you vote on our amendment?


Erik Nielsen: What amendment was that?


Ian Deans: How did you vote on our amendment? Did you stand up and vote for our amendment last night? Well, for

November 17, 1981
The Budget-Mr. Stevens
heaven's sake! How could you stand up and vote for an amendment of all these people you don't agree with?


Sinclair McKnight Stevens: Mr. Speaker, I always notice that when one touches on something that is as dear as the-


Ian Deans: Like truth?


Sinclair McKnight Stevens: -partnership relationship between the government and the NDP, it always gets them very rattled.


Ian Deans: Why did you support us last night, Sir?


Sinclair McKnight Stevens: What I would be very curious to know-


Margaret Anne Mitchell: Oh, you were in bed last night.


Sinclair McKnight Stevens: -is the full plan that the socialists to my left and the socialists-


Erik Nielsen: To your left.


Sinclair McKnight Stevens: -the Liberal Party in front of us-have for Canada. For example, if they believe that we should be still more socialized in this country-


Ian Deans: Ernest Manning would be to your left!


Sinclair McKnight Stevens: -would they do this for us in the House, Mr. Speaker? Would they tell us where their type of socialism is working to their liking in any country of the world?


Margaret Anne Mitchell: How about Saskatchewan?


Some hon. Members:: Oh, oh!


Ian Deans: I would be happy-is he asking a question?


The Acting Speaker (Mr. Blaker):: Order. Is the hon. member for Hamilton Mountain (Mr. Deans) rising on a point of order?


Sinclair McKnight Stevens: Mr. Speaker!


The Acting Speaker (Mr. Blaker):: I have no choice but to recognize the hon. member if he stands, and I have to assume that he is rising on a point of order.


Ian Deans: Thank you, Mr. Speaker. The hon. member has asked me a question, and I would be delighted to answer him. I think he could take a look at the province of Saskatchewan-


Some hon. Members:: Order, order!


Ian Deans: -to see where that brand of socialism is working.


The Acting Speaker (Mr. Blaker):: I do not think that intervention quite qualifies as a point of order.


Ian Deans: Point of view, though.


The Acting Speaker (Mr. Blaker):: If the hon. member for York-Peel (Mr. Stevens) wants to entertain a question, I suppose he can; otherwise, the floor is his.


Sinclair McKnight Stevens: Mr. Speaker, again, of course, the hon. member was not listening to what I said. I asked him to show us any country in the world where socialism is working to his liking.


Ian Deans: In Saskatchewan, in Canada!


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Oh, we now have an admission from the left wing element of this government that we have, in fact, socialism in Canada!


Ian Deans: In Saskatchewan.


Sinclair McKnight Stevens: And they are liking it! What I would like to hear-


Ian Deans: In about half an hour, in Manitoba!


Margaret Anne Mitchell: Manitoba, tonight!


Sinclair McKnight Stevens: What I would like to hear them expand on is whether they also like what they see in Poland?


Ian Deans: No.


Sinclair McKnight Stevens: Oh, they do not like that type of socialism in Poland. I see.


An hon. Member:: That's communism.


Sinclair McKnight Stevens: Perhaps it is what Cuba lives with that they like or perhaps their model is England.


Ian Deans: Do you mean under Maggie Thatcher?


Sinclair McKnight Stevens: In any event, let me assure Your Honour that the budget now before the House is bringing massive government intervention into your life, into my life-


Margaret Anne Mitchell: Oh, we wish it were.


Sinclair McKnight Stevens: -and into the life of every Canadian citizen.


Ian Deans: That is why you voted for the amendment.


Sinclair McKnight Stevens: I would suggest to Your Honour that, in so doing, it is not a question of restraint because if one takes a look, one will find that the actual increase in government spending on a national accounts basis is 22 per cent. One will find that personal taxation is jumping up 31 per cent. One will also find that indirect taxation is up over 50 per cent.


Mr. Darling:: Another point there, too.


Sinclair McKnight Stevens: How can a minister of finance pretend that figures such as those to which I have referred, expenditures up 22 per cent, revenue sources jumping 30 per cent, indirect sources jumping over 50 per cent, are somehow equitable and
November 17, 1981

restrained? In short, they are not. I would suggest to Your Honour that we should endorse the motion before us, because I believe it will be tragic for Canada if we allow a situation to continue in this country where, on the same day, one finds stories in the newspapers spelling out that there are industrial lay-offs at plants such as Admiral, where 2,400 employees have been laid off, Massey-Ferguson with a lay-off of 1,700, Budd Canada with a lay-off of 800 automotive workers, International Harvester with 1,200, McDonnell Douglas with 550, de Ha-villand with 750, Chrysler with 2,100, the Ford plant at Oakville with 3,500, the Pratt & Whitney plant in Montreal with 610, and General Motors at the Ste-Therese factory laying off 3,500 people. That is the reality of this government. Those are the kinds of lay-offs with which we are faced in Canada where the total number of people employed in our manufacturing sector fell by 5 per cent in two months. The number of people employed fell by 110,000 in two months alone.
What is the response of the government? We find that the ministers who are responsible for our present economic climate take themselves over to Hull for a lavish lunch, so lavish that it ended up embarrassing the host when he saw the bill; in short, a $100 plate dinner or lunch for those who seem to be totally indifferent to the plight of the thousands of Canadians who are being laid off, such as those to whom I have just referred.


Some hon. Members:: Shame, shame!


Sinclair McKnight Stevens: Let us put this into perspective-


An hon. Member:: Shame on MacEachen!


Sinclair McKnight Stevens: -because the same budget states that what the government once said it might do with FIRA is being postponed and that somehow it does not want to touch that whole question any more. I would suggest that there is something which must be rectified in this country if we intend to get people back to work, especially in the manufacturing sector. Surely, even this government will acknowledge that there is something which is not equitable, considering the fact that Mitsui, the 39th largest company in Canada, has $1,541 million worth of sales in Canada, and yet it employs only 140 people. To put that into perspective, we find that the 38th largest company in this country, Defasco, does an almost identical amount of business in Canada, and employs 14,100 people.
Can Your Honour tell me why, on the one hand, it is consistent to say that if one wants to open up a manufacturing plant in Canada one must go through a lengthy process of investigation and screening, running the risk of being eventually turned down, but that if, on the other hand, one simply wants to manufacture the items any place else in the world and ship them to Canada, that is free trade? We like that, notwithstanding the fact that very few Canadian jobs result from that activity.
The Budget-Mr. McCain
Unless this government starts facing those realities, we will see not just a recession, not just a great depression, but we will see the greatest depression that Canada has ever had. I think it is time that we did our best to bring the government to its senses before it is too late.


Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, this debate might better be termed a wake. There are some of us at least who have some perception of what discouragement this new tax structure extends to Canada's most ambitious people, whether they are in the work force or self-employed, whether they be earners or producers of jobs. The whole crew in Canada received a discouraging message when it got this budget.
I was rather interested in a document which was leaked not too long ago, and I would like to quote from it. We read that much of our industrial capacity in Canada, no matter where its location, is fast falling behind the rest of the world in improving its productivity.
This morning we had an opportunity to talk to some people who are instrumental in creating jobs in Canada. I am referring, of course, to food processors. I have discussed the subject of our food processors on many occasions in this House. On each occasion I have had to say, regretfully, that if any new investor in this country had money on which he wanted to get a return, the food processing industry would probably be the last industry in Canada he should choose on which to spend his money. The existing processors came in under a climate much more favourable than the climate presently in existence. In this budget, the food processors got an additional kick in the teeth because they conform to the definition of the public servants who made this recommendation and the notation that the industrial capacity no matter where in Canada is fast falling behind the rest of the world in improving its productivity.
In this day and age if you have a 2.5 per cent profit you cannot keep pace with the requirements of modernization and replacement. What happens? The tax rate goes up and depreciation goes down without any incentive whatever extended to this important group of people to conduct the necessary modernization. There are farmers or farm-oriented individuals from Ontario who sit in the government caucus. Surely they must get the message loud and clear that the processing industry will suffer. This industry is vital to people in Ontario as it is vital to the people of New Brunswick. If they do not suffer, the farm producers will. But in every case the consumers will suffer. If ever anything was inflationary with respect to the price of food, it is this government which has removed any encouragement to the food processing industry to improve its capabilities.
I want to warn those same people in Ontario because there will be further GATT negotiations in the next 18 months. If we are as generous to all other countries in the world as we were in the last series of GATT negotiations, the farmer and the processor will suffer seriously from the trade considerations which will be extended to other countries in the world

November 17, 1981
The Budget-Mr. McCain
without any reciprocity of other markets for our food producers. That has happened. We removed the duty on red meat coming into Canada, and then had to introduce a bill to regulate the flow of imports. That bill has been considered for quite a period of time, and it is still subject to approval in this House. That is but one example of the steps that we may have to take. If we continue to give away our own market to other people, Third World countries or others, the food processing industry of Canada cannot help but suffer more and, as a result, so too will the farmers of Canada. The disincentive is there in the industry. The employment opportunity may very well decline, or the consumer will pay more, or the farmer will get less. I ask hon. members opposite to read what is in the budget and they will understand what 1 mean.
I would like to refer to another question raised in the same document. It asks whether in those cases where new policies will require expenditures, we should seek in general to redeploy government spending by discontinuing those programs now focused on our prime objectives, or should we alter the government's fiscal stance by raising taxes? The answer obviously was that we shall raise taxes.
Here is something which the provinces must worry about. The conclusion suggested in the document is that there should be management of the resources development, and industrial reorientation projects will be of considerable and possibly mutual interest to provincial governments. The extent to which a joint planning approach is followed is likely to affect the speed and ease with which we conclude our major new projects. Should we actively endeavour to pursue a co-operative planning effort with maximum federal visibility on delivery-and I emphasize that phrase "maximum federal visibility"-or should we primarily rely on federal spending and prerogative as the means to pursue these policies?
I draw your attention to those remarks, Mr. Speaker because it was only last week that we heard a delayed budget. It was delayed because the premiers of the provinces were meeting with the Prime Minister (Mr. Trudeau) to discuss the Constitution. The Prime Minister very adeptly avoided bringing in this budget prior to the discussion of the Constitution. Here we have a document which was then in the hands of the government advising the government about resources, which is a provincial field. The question was, should the government go with joint projects and demand the co-operation of the provinces, or should the federal government get the highest visibility it could by going it alone to develop resources, the property of the provinces?
It is incredible, it is bad faith and it is treachery to have demanded that the premiers meet before the introduction of this budget which was going to curtail their future to the degree that it has. Whether you come from Quebec, which disagrees in principle, or whether you come from any other province in Canada which has disagreed in philosophy with the proposals put forward, to find this kind of treachery introduced in the House as a confrontation to those provinces which we represent here is incredible treachery. These are low-level procedures at best.


Mr. Tousignant:: Who represents the federal government?


Fred Alward McCain: Who represents the federal government where? The Prime Minister represented the federal government, and he committed treachery by insisting that this budget come in only after the meeting. When it begins to hurt, you begin to squeak. I do not know how your wheel was greased so that you did not squeak when you were in caucus, but do not squeak now, it is too late. It is out in the open. There is negligence there in your province and mine as evidenced in the budget and the treachery of the budget succeeding the federal-provincial meetings. I think it is rather significant that the provincial first officers wanted to meet on the economy long since, and I would not want to be the finance minister, the minister of health or the minister responsible for education who has to come to me as the provincial minister and discuss finances of this nation after this budget was brought down, and you will hear more about that a little later.
The treacheries have been committed. I never thought we would have traitors to the concept of Canada, but we have and they are here among us.


An hon. Member:: On which side?


Fred Alward McCain: Mr. Speaker, when a member asks a question to which the answer is so obvious he is only asking for deprecatory remarks in response, and I do not choose to address them to him.
This afternoon we heard the Secretary of State (Mr. Regan), the minister from Halifax, discuss the future of education in Canada as this government would like to conduct it. Again I want to refer to resources, one of which is forestry, and I will do so without quoting from the document which was leaked.
In this document prepared for the government forestry is referred to as a renewable resource, and the question is how the Government of Canada could gain the highest possible profile by spending money in the forest industry. The advice of the bureaucrats to the government is, well the trees themselves are provincial property. If we spend money on the trees in the forests, we will not get the profile because they are provincial. But, if perchance we happen to spend some money on education, and that is a mere pittance in terms of the financial response compared to what the forests really need, we would have a profile which would give us the credit we need in the political world. That in effect is what that document said. We find there that the government is advised to play politics with two things at the same time; with the renewable forestry resource and with education with respect to the resource- neglect the resource and get the profile from education. That is a rather ridiculous suggestion when Canada needs the whole deal.


An hon. Member:: What is your suggestion?
November 17, 1981


Fred Alward McCain: My suggestion is that the government go back to the era of Liberal government when the Government of Canada recognized the need for federal research input and when the Government of Canada put money where its mouth was. It knew that with a depreciating resource it must give some consideration to helping the provinces, such as with regard to the budworm spray. Fifty per cent of the cost of spraying was contributed by that Liberal government, but this government backed away from it completely.
That is what I am talking about and that is what I mean. The Liberal government used to put its money where its mouth was, but now it has things all mixed up with woolly politics. If it is not political, do not spend it; that is what this document said and that is what this budget practises.
In Atlantic Canada we need, for the benefit not only of Atlantic Canada but of all Canada, a forestry complex. This has been discussed and I am not going into the details. It has been discussed by all the Atlantic provinces, it has been discussed by the federal government and it has been shelved by the federal government. To this moment in time there is no money coming forth for the forest rangers' school, which is a joint maritime school. It needs to be renewal and repairs. Has that fallen through too? Are we not going to get any federal input, even in education where the profile is the highest? Do not forget that your Quebec forest is similar to the New Brunswick forest, that the Quebec lumber supply is rapidly approaching the point where capital is being depleted and the government should be concerned about that forest complex as well as the educational and research centre which would help all of eastern Canada, including Quebec, in having a healthier forest industry. Do not play politics with this as the cabinet minister from Halifax has proposed we should do.


Henri Tousignant: On a point of order, Mr. Speaker. [Translation]
I rise on a point of order, Mr. Speaker.


@Acting Speaker: The hon. member for Temiscamingue (Mr. Tousignant) on a point of order.


Henri Tousignant: Mr. Speaker, the member who has the floor does not seem to be aware of the strategy for forestry development which has just been released by the Minister of the Environment (Mr. Roberts). He should find out about things.


Fred Alward McCain: The message is not worthy of comment, Mr. Speaker.
We have these needs and these political uses of these needs which I have discussed. Let us go on down the line.
This afternoon the minister suggested that there should be some emphasis on research, that we should adjust and rearrange education. This comes from a member from Atlantic Canada, the area which may virtually claim to be the seat of original education in this nation, where its first schools were
The Budget-Mr. McCain
formed, where some of the first colleges were formed and where there has been a standard of education which attracts to the University of New Brunswick alone 862 members from west of New Brunswick. For a maritime member, who knows that all other colleges in Atlantic Canada have populations which are pretty much constituted in the same way, to suggest that the Government of Canada should start to manipulate education, is to me an utterly and totally incredible suggestion. He is saying we must plan because we must have certain skills and we have to re-educate. So what is new? Doctors have been saying for 20 years that they virtually have to re-educate themselves by going to seminars, classes, courses or whatever. Lawyers, chartered accountants and other skilled people such as welders, blacksmiths, whatever they may be, have had to re-educate themselves to keep up with technology, so what is new?
Are universities flexible? I submit they are very flexible and able to react to the needs of the day. They were able to react to them after World War II. They expanded their facilities, they improvised and they taught. They continue to expand, and when the demand was more for skills other than college skills they were able to cope, even with a very distinct decline in student population. Now because the technical skills do not seem to be in the same demand, the population in the postsecondary schools and colleges is going up again, and they can cope even if this government reduces its contribution.
What right have we as politicians to suggest to the educators of this land that we know more about their subject matter than they do? What an insult to the educators of this land. Is this for political gain? We have heard statements this afternoon that the provinces are not spending as much on education as the government has issued to them for that purpose. Let me tell you that the Minister of National Health and Welfare (Miss Begin) prior to 1979, during the campaign in 1979 and early after the election in 1980, accused the provinces of misappropriating funds in respect of health. She called on the ministers of health in Canada, since then we have not heard a peep from that minister about how the provinces are using their money.
I am now going to make a statement about the province of New Brunswick. The province of New Brunswick not only spent all the money which was eartagged for education within the province, it had to supplement that substantially from its own treasury and it added more in that one field than in any other. This government assured all provinces which would undertake bilingual efforts in education that they need not fear nor want for funds. The province of New Brunswick, unlike any other province in Canada, undertook that program, but then the guidelines were changed and the province had to find its own funds for the most part to conduct the program which the federal government promised to finance. If that is wrong, I challenge the minister from Halifax to tell this House that I am wrong and he can give me the figures to prove it. That is a false and improper accusation against the provinces of Canada.

November 17, 1981
The Budget-Mr. McCain
An hon. member said in the House that I was a provincial member. I deny that categorically. I am a Canadian. I want to see a mechanism for the adjustment of the wealth in Canada so it can be harmoniously distributed, instead of the conflicts we will have if this budget is passed.
During the course of the debate one can be tempted to be deflected from those issues most important to one's constituents. Most of my constituents are interested in the forestry industry, something which I have already discussed. There is nothing but discouragement for those in the forest industry because there has been no indication from the Government of Canada, which receives close to $2 billion in revenue from the forest industry, that it will provide any more money for research or reforestation or any project other than education from which the government will enhance its political profile. This is clearly indicated in the budget document.
Canada's fishermen have been given a false anticipation of what their earning capabilities might be, whether they are processors or active fishermen or workers in the fish plants. They have been encouraged to believe that their incomes would far exceed their expectations. The Government of Canada has a policy which puts no emphasis on the quality of the product. It has refused to help the fisherman upgrade his boat so he could deliver better quality produce. It has refused to put grading standards on fish to encourage better quality. As a result, we have lost markets which should not have been lost. These markets should have grown in the last five years, but now they are gone.
The government has failed to realize that old boats need to be replaced, that young fishermen need a chance to get into the fishing industry. Instead, the government has made regulations which deny the young fisherman, who has to buy a boat to get a licence, the opportunity to do so. Because of the regulations, a young fisherman may find himself with a licence but with a boat that is not safe to sail. Since he has not operated that boat for two years, he cannot get a safe boat to use with his licence. If he does not sail the boat, even in jeopardy of his life, he loses the licence because he has not used the boat to fish for two years and the licence has not been used. That is how the regulation works. I know of about six young fishermen in my constituency who are sailing death traps because of idiotic regulations placed on replacement of boats by our Minister of Fisheries and Oceans (Mr. LeBlanc). This is with the blessing of members from Atlantic Canada who should know better.
I wish I could tell a happy story, and I believe it could be much happier if we could get an improved boat replacement program, a proper marketing thrust and leadership instead of misguidance from this government and its Minister of Fisheries and the people in that ministry.
I would like to turn now to the farming structure. The problems in the food processing industry and the fish processing industry are the same. My constituency probably contains the highest level of food processing of any other constituency
in Canada. For this reason I am concerned about the health of the food processing industry for both fish and farm produce.
There have been some very hard times in the agricultural industry, and if the member for Chicoutimi (Mr. Dionne) were here he could confirm what I am saying. The inflationary process in the field of potato agriculture is such that since 1971, had I grown an acre of potatoes, planted in May of one year and delivered in April or May of the next year, the interest costs on that acre of potatoes in 1981 would exceed the total cost of the acre of potatoes ten years earlier. That is the impact inflation has had.
Here is a government which is prepared to put up to S300 million into Chrysler-I do not quarrel with that because we need the industry-but is proposing to put only $50 million into a depressed agricultural industry for all of Canada. The government is going to help up to 10,000 people in Ontario and it is going to throw the farmers of Canada to the wolves with $50 million. Relatively speaking, Mr. Speaker, the government should not even go to church with that little cheque for the collection plate when you look at its relative value to the tens of thousands of Canadian farmers, some of whom are destitute.
Furthermore, $5 million of that $50 million will be used to pay interest on what would have been helpful to the farmers in the first place. Therefore, the farmers only get $45 million.
I believe I can say to you, Mr. Speaker, without any challenge, that there are enough farmers in an emergency position in Atlantic Canada that the $45 million would not go halfway around. What does that do for the beef feeders or the pork producers in the rest of Canada? It does nothing. The government says to let Atlantic Canada have it and let the rest of Canada sit around and wait, just to see.
The minister has expressed his problem of the day that he has to consult all his regional directors to determine how he will spread this $45 million among the tens of thousands of farmers who need it. It is of no use for anyone on that side of the House to complain about food costs if they are to let agriculture suffer the fate that has been extended to it by a minister who stays in office while the agricultural industry is abused in its time of need.
Last weekend I was talking to a widow who lives on a fixed income. She expressed how proud she and her husband had been that they had been able to save money and did not have to go on welfare. She was using virtually all of her income to exist in the state of care which she needs, and that proud lady told me that because of this new tax structure her fixed income will not be adequate. She will have to seek help from the public purse. That is the impact, which has been brought about by the change in the income tax structure, on those who live on fixed incomes. My God, Mr. Speaker, has this government no conscience? Did members opposite think, as they approved this budget-if they ever heard of it in their caucus-of what they were doing to the people on fixed incomes, who were relying on interest or dividends to have a decent standard of living? Did they think about the old couples who are paying the full impact of the tax on gas, oil and fuel or the
November 17, 1981

cost of substitution? That may not be important in the rich areas which members opposite represent-metropolitan Canada-but down in Atlantic Canada it means a lot. Yet down there you are going to take just as much from them as you are prepared to take up here. Your conscience must have gone with the budget.


An hon. Member:: They do not have a conscience.


Fred Alward McCain: Consider the plight of the fixed income people. My God, Mr. Speaker, we have heard about the needs of those people from members over there. For 20 years we have heard them say they would improve their old age pensions, they would improve this, that and the other thing. But it is they who are now cutting off some payments to the provinces which are already supporting many of these people who are on welfare because of the total negligence and lack of consideration of this government.
We have talked in this House about the tax structure. Now I would like to point out that the minister from Halifax, knowing Atlantic Canada and its needs, was sort of bragging about the fact that the provincial governments can, if they adjust their taxes in a certain way, collect another $1,400 million from provincial taxpayers. That is on top of the additional take which the federal government plans to get through its adjustment of income taxes and the closing of certain loopholes which they talk about. So provincial and federal taxpayers of this land will pay an extra $3 billion merely as a result of the adjustment in income tax. But the beauty of it, Mr. Speaker, is that the federal government is going to cut its payments to the provinces and will collect more money for itself, while it is the provinces that will be accused of imposing additional taxation. It gives a bad reputation to the provincial governments which are trying to economize, and fattens the purse of the Liberal Party.
My time is growing very short. However, I would like to talk for a minute about industrial strategy. I appeal to this government, as I did when I spoke the other day, to recognize that there are certain assets which we could develop. We could be exercising all incentives to get extra drilling off Sable Island and Hibernia. We could supply all kinds of incentives to get the tar sands into production. Our imports of oil could be reduced by 250,000 barrels a day within a three-year period. We could reduce expenditures today by $10 million a day; $3,650 million a year two or three years down the road, and keep our money at home. We would increase the tax base for the Government of Canada without increasing the rate. We could put 100,000 people to work directly or indirectly on those megaprojects which would generate another billion or so in tax revenues for the Government of Canada. Why punish us? Why deliver disincentives? This is the land of opportunity. We need leadership from this government. When is it going to come? When are we going to supply incentives rather than disincentives?
The Budget-Mr. Blais


Hon.   J.-J. Blais@Minister of Supply and Services: Mr. Speaker, I have now listened to two members of the opposition and I can understand they are frustrated at having to sit on the other side of the House, to listen to the debate on a budget we have brought down, while in fact, they should or would have brought down not only the budget that was defeated but additional budgets, if they had not made the mistakes they did, which are now history.
I should like to start by congratulating the Minister of Finance (Mr. MacEachen) for his humanitarian approach, for his insight and courage. He was faced with difficult economic conditions and he has done a good job. The themes he announced in his budget are restrictions, equity and economic renewal, and I intend to review each of these themes in turn and highlight their positive aspects. The opposition has highlighted the negative aspects of each of these themes, and I want to look at the positive side.

Although we claim that this is a budget that addresses restraint, we hear comments from the opposition that there was no restraint. I call the attention of the House to the facts, the truth. The restraint envisaged by this budget is not only restraint that we face in the future, but restraint that we have already exercised.
I will cite some figures for the House. Yesterday we heard the Leader of the Opposition (Mr. Clark) quoting a series of figures he had pulled out of hats. He did not substantiate them. I will substantiate mine because these figures can be found within the budget papers.
Last year's experience was a decrease in our deficit as measured by the cash requirements. Our projection was $12.2 billion in cash requirements. In effect, we needed $10.1 billion, a reduction of $2 billion in our cash requirement.
In 1982, $11 billion had been projected in cash requirements. We envisage that our cash requirements this year will be in the vicinity of $9.8 billion. For 1982-83, according to the budget papers, we will require $6.6 billion in cash. That is a $4.4 billion cash requirement reduction over what had been prognosticated last year.


Sinclair McKnight Stevens: You are just taxing more.


Mr. Blais:: In effect, we are substantially reducing our cash requirement. The hon. member for York-Peel (Mr. Stevens) knows that two years ago we came to the House requesting a $14 billion borrowing authority. That was what had been envisaged in terms of our cash requirement as well as our contingency. Let us talk about spending targets.


Sinclair McKnight Stevens: Up 22 per cent.


Jean-Jacques Blais: Spending targets are going to be maintained at a level lower than the GNP.


Sinclair McKnight Stevens: When?

November 17, 1981
The Budget-Mr. Blais


Jean-Jacques Blais: In 1981-82 our expenditures are envisaged as being 20.6 per cent of our GNP. If the hon. member for York-Peel looks at the budgetary documents, he will see that the forecast for 1985-86 is that our spending target will be 19.2 per cent of the GNP.
Let us talk about cash outlays. Excluding the debt charges, our cash outlays will increase in 1981-82 by 11.7 per cent. In 1982-83 our cash outlays will be 11.1 per cent. Yesterday the Leader of the Opposition spoke of an increase in cash outlays as something in the vicinity of 52 per cent as forecast in the budget. I cannot find where he got those figures. One can see the discrepancy between the figures he advanced and the ones I quote.
Our budgetary revenue decreased from 18.7 per cent in 1974-75 to 15.7 per cent in 1980-81 as a result of discretionary tax decreases over this period. Over the course of the fiscal plan, revenues will rise to 17.2 per cent of GNP in 1982-83 and remain at about this level until 1985-86. Thus the burden of taxation is less than in the 1974-75 period, a period of lower deficits than the present period.
Let me address the second point, the aspect of equity in this budget. Undoubtedly that is the aspect that has attracted the most attention because everybody likes to hear the term "loophole", that somehow we are removing loopholes within the tax system. In effect, this is exactly what has happened.
When I congratulated the Minister of Finance earlier in my talk, I addressed the humanity of the man. It is manifest in this budget because in closing the loopholes, we see the Minister of Finance in his small "1" liberal stance, a man who is in search of equity, who is in search of fairness. He has addressed that directly in this budget. I fail to understand why the opposition does not give him that credit. I just cannot understand it. I quote from an article in the Toronto Star dated October 23, 1981, which reads:
Thousands of rich Canadians don't pay any income tax because of massive loopholes in the tax system, New Democratic finance critic Bob Rae charges.
Poor and middle-income earners already staggered by high interest rates, are forced to shoulder an extra load because they must pick up the tab for the tax giveaways to Canada's wealthiest individuals and corporations,' Rae (Broad-view-Greenwood) said.
In 1979 alone, 3,467 people who earned more than $50,000 paid no income tax, he said, which was a 50 per cent increase over 1978.
"Giveaways" allowed 160 Canadians earning more than $200,000 a year to avoid paying any taxes during the same year, he added.
Speaking to reporters yesterday Rae-a candidate for the Ontario NDP leadership-contended that Finance Minister Allan MacEachen must include sweeping tax reforms in his next budget, now expected about Nov. 10.
We did exactly that. We plugged the loopholes. We redistributed the tax burden. Have we heard any sort of congratulations from the hon. members of the opposition? Not a peep, Mr. Speaker; but there has been, I shall point out to you, generally in the population of Canada a great deal of appreciation in terms of the equity that has been built in with regard to the tax system.
There are other tax adjustments. I would like to address those tax adjustments as they will affect my constituency. Based on the estimates of the Department of Finance, the average family savings will be $210. Because of the reduction in the marginal tax break, the 20,564 families in the constituency of Nipissing will save over $4,318,500 next year, which will provide for a positive stimulus for the area.My riding has a large number of small-business men and a large number of farmers throughout northeastern Ontario. They will take advantage of the tax measures that are contained in the budget.
In addition, a matter that has not been identified by the hon. members of the opposition is indexation. Indexation represents $3 billion of direct tax removal or tax credit for individual Canadian taxpayers. The indexation is retained. Personal exemptions, for example, for a family of four will be increased from $7,230, as it was in the past fiscal year, to $8,110, which is nearly $800 more in exemptions as a results of maintaining indexation.
The child tax credit will be increased for each child from $261 to $293 in this budget. In effect, we are talking about substantial assistance to medium and low-income earners.
[ Translation]
The third theme of the budget is economic renewal. Contrary to the claims of the opposition, the government has addressed economic development, and I am thinking of the document that was tabled in the House and which bears the title Economic Development for Canada in the 1980s. The opposition members do not want to give this document any consideration-that is very unfortunate, because it contains a wealth of interesting information on the potential of our country. It says that within the next five years, the Government of Canada will spend $42 billion on economic development. In addition, $18.2 billion will be spent on energy development during the same five years, and that does not include all investments that will be made, Mr. Speaker.
After all, Canada is the second largest country in the world and it has splendid potential. Even members of the opposition will agree on that. And when we look at this document, we realize how vast this country's potential is.

The economic development of Canada in the 1980s indicates that the megaprojects will amount to $440 billion, between now and the end of this century. All members have read the document and are surely impressed. In addition to that it reflects a secondary economic potential, that is in terms of supplying these megaprojects. We will require a full infrastructure of supply industries that will provide additional revenues for Canadians, additional job opportunities and additional economic activity. The third area is the exploitation of high technology and high productivity goods and services.
I should like to address each one of the three areas. First of all, let me deal with the question of resources. All members will agree that Canada has a rich tradition in terms of the
November 17, 1981

exploitation of its resources. Undoubtedly Canada has been living off the dividends of those resources since before confederation. In effect, Canada is a net energy exporter. In 1979 Canada exported $1.8 billion more in energy than we imported. In foodstuffs Canada is a major food exporter. We know this year there has been a bumper crop. The crop of grain in western Canada will surpass 41 million metric tons. In terms of fish, we also know that since 1977, since the 200-mile limit, Canada has become the largest exporter of fish in the world. If I might bend your ear, Mr. Speaker, in terms of value, in 1975 we exported some $426 million worth of fish. In 1980 that figure trebled to $1.2 billion worth of fish exported to the international markets. You can imagine the potential! I am talking about relatively new export potential.
I am from northern Ontario and in northern Ontario mining and forest products are major export commodities. We earn our livelihood with those two basic resources and their exploitation. In those traditional Canadian resources the potential is immense. When we talk about the $440 billion it tends to be a conservative figure, when you consider the immense potential of Canada.
As the population of the world increases and becomes wealthier, as the Third World becomes wealthier, the demand will increase by quantum leaps for all of the commodities I have described. We have just provided federal incentives to develop the northeast coal deposit in British Columbia. We freed some 30 million tonnes of coal a year for the export market as a result of that particular initiative that the federal government has launched in co-operation with the provinces. The list goes on. I could talk to you about potash, asbestos and the other commodities with which we are familiar. All these particular projects will generate investment.
In terms of Canada's manufacturing sector and its industrial development, what is important is the supply industry that will be required in order to service and provide material, equipment and machinery for these projects we are developing.
In the fish industry it means additional shipping; it means commercial development of the shipping industry. In terms of wheat, it means additional development of transportation systems; it means additional investment in the transportation
area.
In the two areas with which I am most familiar one can see the potential quite readily. Let us examine the pulp and paper industry and the forest products industry and the mining industry. Unknown to members of this House, 73 per cent of the goods and services supplied to the mining industry, so that they can exploit their resources, are not purchased in Canada. They are of foreign origin. In terms of the pulp and paper industry and the forest industry, which is one of the oldest industries in the country, there is still an immense demand for the service and the supply that can be provided by that industry in the Canadian marketplace. Approximately 49.5 per cent of their requirements are purchased offshore. We can see the tremendous potential.
The Budget-Mr. Blais
I should like to talk about the shipbuilding industry. The Canadian Shipbuilding & Shiprepairing Association did a survey of what the requirements would be in Canada in that trade. It ascertained that in the next ten years, before the end of this decade, it would have a potential order book of $33.64 billion. I see the hon. member for Victoria (Mr. McKinnon) smiling; he has a satisfied expression. He is seeing the surge of the shipbuilding industry in his area and he knows its tremendous potential. Canada has the longest coastline in the world. We are developing an international expertise in terms of icebreaking capacity and navigation through ice. We look forward to a very vibrant industry in that area.
I should like to mention as well the rail transportation industry in Canada. All hon. members know that we are fast approaching full capacity on our rail system. Both CP and CN officials will tell us that what they perceive in terms of investment ranges in the billions of dollars. If we start adding shipbuilding, rail, mining supplies and pulp and paper supplies, the amount of money which will be going into the economy in the very near future is immense.
In terms of job creation I should like to give a nice rule of thumb which we use in the Department of Supply and Services. We have calculated that for every million dollars we spend for supply and services in my department, we create 30 direct jobs and 39 indirect jobs in the Canadian economy. If we start doing our sums and start dividing them by millions, we will have the total amount of job creation which will be generated within the economy.
In terms of all investments which will be forthcoming, we have put in place for the first time an office of industrial and regional benefits. Within the Department of Industry, Trade and Commerce, under the Minister of Industry, Trade and Commerce (Mr. Gray), there will be for the first time an office which will be able to co-ordinate all these activities. First it will be a point of focus for consultation and exchanges between the private sector and the government. As well it will be a point of focus to permit us to maximize the Canadian content of those major investments.
The third area of interest in the economic development paper is the development and exploitation of advanced technology. Last week we were all very proud when we saw the Canada wordmark on the Canadarm which flew with the American shuttle in space. The only outer marking was the Canada wordmark. In effect, the Canada wordmark saluted the world. Canadians were immensely proud because we were there in the leading edge of space technology. That did not just happen yesterday. Back in 1962 when the first Allouette was launched, Canada became the third nation in the world to reach the area beyond the atmosphere.


Blaine Allen Thacker: Thanks to John Diefenbaker.

November 17, 1981
The Budget-Mr. Blais


Jean-Jacques Blais: We can talk about the Arrow if the hon. member wants to talk about something for which John Diefenbaker was responsible.


Some hon. Members:: Hear, hear!


Jean-Jacques Blais: When we are talking about the Canadarm, it is an expression of Canada's potential in the area of high technology. We accept that. I was in France recently and they said how great they were because they had the potential of establishing a satellite telecommunications network for France, that they were one of the first countries in the world to do that. I said, "My God, we have been in the telecommunications game in this country for close to 20 years". We can show the French, we can show the British and we can show the Americans the level of our own technology. We have to take a back seat to no one. Recently I was involved in the Telidon development, again a Canadian piece of technology which is at the leading edge of the videotext industry. Canadians are immensely proud of that. I could go through a whole list ranging from MacDonald-Dettwiler in Vancouver, British Columbia, to Northwest Industries Ltd. in Alberta, to Bristol Aerospace in Winnipeg, to de Havilland in Ontario, to Canadair or Pratt & Whitney in Montreal, to Mitel in Buctouche, or to Hermes Electronics in Nova Scotia. Throughout the whole country there is a tremendous high technology potential. Hon. members opposite will ask what I know about it. I know a lot about it because I have contracts with those fellows and I use my $3.2 billion per year to ensure that the capacity is in place.


Some hon. Members:: Hear, hear!


Jean-Jacques Blais: That capacity is in place. We are able to use it and we are able to develop it. I do not care what the opposition moans and groans, dooms and glooms about. This country has the world by the tail and we know it.
When we consider all the investments which have to be made in the next generation, in the next 20 years, we know that there is no size of any government budget that is able to spend the money to provoke those investments, each and every one of them. There must be an economic state in the country which provides price stability in order to boost investor confidence. The opposition recognizes that hon. members of the opposition have said that we must bring down inflation and interest rates, that we must restrict our spending. We have done that responsibly. We have removed a necessity in the Canadian marketplace. We have made available in the next fiscal year more than $4 billion to private investors in order to bring down the rate of interest, to bring down inflation and to create stability. That is the only way we will be able to take advantage of that immense potential.
There is absolutely no assistance from members of the opposition who cite partial statistics, who try to mislead the House-undoubtedly unintentionally because they do not know what they are doing in the first place-in terms of the arguments they present in order to provoke confrontation. The country does not need confrontation. The country needs cooperation. The government has been aiming at co-operation
with the agreement on energy prices which we signed with the three western provinces, and in terms of negotiating a constitutional arrangement which will provide for the first time in our history our own made-in-Canada Constitution, approved by Canadians. This is the sort of fearless leadership we are providing to the people of Canada. This is why I commend the budget to the House and I commend the Minister of Finance for his wisdom and perspicacity.


Some hon. Members:: Hear, hear!


Hon. Flora MacDonald (Kingston and the Islands):: Mr. Speaker, I have just listened to a Liberal cabinet minister bragging about the budget of the Minister of Finance (Mr. MacEachen) at a time when public confidence in the government is at its lowest level in 20 years of our history. I should like to ask the minister where he spends his time.
Is he locked up in his cabinet office and does he not get out in public where he can hear the comments the people are making? I cannot remember a time, in the some 25 years I have been around this institution in one position or another, when a budget has been so universally panned. Economists, pundits, editorialists, labour leaders, the business community large and small, all received it with rage, ridicule or both. It is the business of these groups to analyse this misbegotten offspring of a finance minister's delusion, of course, and to expose its weaknesses.
Their criticism is not surprising. What is surprising is the near-unanimous reaction of hundreds of thousands of Canadians in every part of this great country who have treated this budget with similar anger and scorn-anger at the con job that the Minister of Finance tried to perpetrate on them by pretending to offer them something when he did not. They saw through his dishonesty, his deceit and his cupidity. There was scorn on the part of Canadians for a minister who so underestimated their intelligence that he thought he could get away with his efforts at deception. The Canadian people are not as gullible as the minister's own backbenchers.
How I would love to see the Minister of Finance take that budget into an election campaign. Even his toadying backbenchers, who support it publicly but criticize it privately, would run away from it.
The tragedy of this budget with all its take and no give approach, is that it comes at a time when the country is in the grip of a severe recession. The Minister of Finance and his seatmate are old enough to remember the searing effects of the Great Depression, although the Prime Minister (Mr. Trudeau) was isolated from it all by a cocoon of wealth in the higher reaches of Outremont, an isolation he has steadfastly maintained throughout his lifetime. Should they remember the 1930s they will know of the anguish and hardship and worry that haunted people's lives. Today's recession, and we see it all around us, is beginning to resurrect these fears and uncertainties of that earlier era.
November 17, 1981

Canadians are worried. Canadians are concerned. They wonder if anyone in government has a hand on the helm of this country. The last thing they need at this time of uncertainty and worry is a con job from the Minister of Finance or a thinly disguised tax grab at their dwindling resources.
The minister walked in with a budget that allowed him to grab what he could-$1.4 billion in higher revenues for the federal government-and then ran off to bury his head in the sand in the hope that he could escape the escalating financial storm and would hold that ignominious position until the storm was all over.
The Minister of Finance came in here on budget night and prated about equity. The 1.5 million Canadians living in poverty, almost a week after the budget, are today asking, equity for whom? Certainly it is not for those in the lower income bracket.
In a recent speech in Toronto the Prime Minister eulogized Liberal compassion, but for the more than one million unemployed Canadians forced out of jobs by the government's high interest rate policy, Liberal compassion has a deceptively hollow ring to it. Never once in the speech in Toronto did the Prime Minister deal with unemployment. Surely equity and compassion must be directed first and foremost to alleviating the problems of the neediest in our society, be they the unemployed, pensioners or families about to lose their homes.
Is this what the budget does? Is this what it addresses itself to? Not on your life, Mr. Speaker. It aggravates the problems of those people. It provides neither help nor hope. It condemns millions of Canadians already in straitened circumstances to greater hopelessness and despair. Long gone are the days of the "just society" or, indeed, of social justice.
If you need proof of that Mr. Speaker, just look at the social development envelope. The federal government expenditure on social programs will not keep pace with inflation next year as only $30 billion has been allocated to social affairs. That is, indeed, an 8.9 per cent increase from this year, but inflation is running at 12.9 per cent so, in real terms, social development programs have to undergo a cutback, a decrease of 3.8 per cent. That means a cutback of the programs for the ill, the elderly, the disadvantaged. Programs such as those would be put on the back burner by this government.
Where is the social compassion the Prime Minister spoke of? Where was the minister responsible for social development when the Minister of Finance was carving up and cutting back the social affairs envelope? I have no doubt he was out peddling the Constitution and not paying attention to the social programs of those who vitally need them.
At a time when the country is in the throes of a severe depression, the minister has turned his back on those Canadians least able to help themselves. They are the real victims of this budget.
One of the Liberal backbenchers laughs about that. It is no laughing matter for the people who are ill, elderly or without jobs this winter or who are about to lose their homes. It is no laughing matter for them.
The Budget-Miss MacDonald


Erik Nielsen: Thunder Bay-Nipissing.


Flora Isabel MacDonald: I am told it is the hon. member for Thunder Bay-Nipigon (Mr. Masters). I suppose in his riding there is no unemployment.
If the minister feels that my comments along this line are biased, let me refer him to another objective source. Earlier today the Canadian Council on Social Development released its analysis of the budget. In a damning indictment headed, "Budget shows loss of direction in social policy", the council excoriated the minister for his lack of planning capability in the social field.
The council had this to say:
The contradictions inherent in the treatment of social program funding, the inequitable treatment of low-income people, the counselling of distressed home owners to incur higher debts, and the tolerance for increasing unemployment, all indicate a loss of planning capability. It seems to us that Mr. MacEachen has formed his entire budget around the hope that interest rates will decline miraculously over the next couple of months. I don't think we can depend upon either U.S. policies or the Bank of Canada to guide our response to the social and human needs of Canadians.
Later, it had this to say:
The treatment of low-income people in the budget is a complete disappointment. Not only did the government not return some of the revenues from the extremely regressive energy taxes in the form of a tax credit, but they have ignored the plight of over 500,000 families who pay more than 30 per cent of their gross income for rent.
When that report came down today, Mr. Speaker, the Canadian Press covered it and, in moving the story of the council's critical analysis of the budget, used this headline: "Budget Takes From the Wealthy to Give to the Rich." It explained that the budget closed loopholes used by high income taxpayers to avoid taxes in the past. In return, it cuts the tax rates from high income individuals. There is not much commendation there for the Prime Minister's talk of Liberal compassion or the finance minister's vaunted equity. The cold comfort-and it is indeed cold comfort-that the Minister of Finance offers Canadians is that unemployment will get worse before it gets better and that the cost of living will go up before it begins to come down.
Let me first turn to unemployment and the prospect of a long, bitter winter which one million Canadians will face in the coming months. In October, 989,000 Canadians were out of work. Since then, lay-offs have increased dramatically. Tonight, the headline in the paper in my home city of Kingston, the Kingston's Whig-Standard, stated that 4,100 people have been laid off since the budget. Four thousand one hundred more Canadians have lost their jobs since the budget was brought down. The prospects for employment in the weeks and months ahead have certainly not been made any brighter by this budget.
No new job incentives were introduced, despite the 8.3 per cent unemployment rate. That was not considered by the government to be a priority in this budget. The government will spend only $154 million on direct job creation this year as compared with $336 million ten years ago when unemploy-

November 17, 1981
The Budget-Miss MacDonald ment was running at six per cent. Already government employment forecasts have proven that the figures in the minister s appended documents the other night are incorrect. They have proven to be incorrect because the budget projected a 7.8 per cent jobless rate for 1982 and 8.3 per cent for the following year.
We have already reached the rate forecast by the budget for 1983. It is already running at 8.3 per cent, and the worst of the winter's jobless figures are still before us. We have 10 per cent unemployment! We have another Liberal backbencher who does not believe that unemployment exists. At the present time it is at 8.3 per cent. Sadly, it may well go to 10 per cent in the months immediately ahead. We have great concern and we greatly care about that figure. 1 only wish the hon. member opposite would have the same care and concern. What does the Minister of Finance have to say about all of this? What does he say to the thousands who are unemployed? He says that they must wait until inflation comes down. That is cold comfort indeed for individuals who are struggling to feed their families or to keep roofs over their heads.
Unemployment and a stagnant construction industry are very closely linked. It is obvious to just about everyone in this country, except to some hon. members opposite, that we face a severe housing crisis. We need about 220,000 homes each year just to keep up with new family formations. Next year, Canada Mortgage and Housing Corporation forecasts that the level of housing starts will be 135,000. Last month it was only
104,000.	However, that is only 60 per cent of the number needed in this country. That will be a shortfall of some 85,000 homes next year, and at what cost to the economy?
The Housing and Urban Development Association of Canada estimates that such a shortfall in homes would cost the country $4.2 billion. That is what we are talking about in the way of a housing crisis. It also translates into 30,000 fewer jobs in the construction industry alone. Every job in the construction industry, analysts say, translates into three in related industries, and 11 more people out of work throughout the general economy. The housing crisis indeed reaches out like the fingers of a hand and touches every aspect of our economy, particularly lumbering and manufacturing. Thousands of workers in our lumber mills or in firms which manufacture household appliances and furnishings and building supplies are idle, and at what social cost to the nation, both in terms of lost productivity and in terms of higher pay-outs in unemployment insurance benefits?
Last Friday we received the news that Admiral of Canada laid off 2,400 employees. In my own riding of Kingston and the Islands, Du Pont has recently laid off 200 workers. This is a plant which manufactures synthetic fibres for carpets and drapes. Millhaven Fibres, another plant in that riding, has laid off 36 people. Canada Cement has laid off 110 people and Alcan has laid off 102 people. What kind of a winter can they look forward to? Thousands and thousands of Canadians have to face a long, cold winter without work. It will not be the grinch who steals Christmas this year, but it will be the
Minister of Finance, with the kind of budget that he has brought down this past week.
Unemployment and a housing crisis are closely linked indeed, and the social costs are very hard to measure. How can we calculate in dollars and cents the human toll which will be exacted? As people are forced to move out of their homes, we might logically expect to see increases in family breakdowns through divorce and separation, and increases in alcoholism and anti-social behaviour, whether that be family-centred violence or crime in the streets. The home, which is the traditional foundation for a strong family life, is under attack. We have seen evidence in the minister's own document that it has been stated and proven to him that people will have to double up and share homes with others. What kinds of strains and tensions will that create in our society?
The home was certainly under attack when the minister responsible for housing attempted to mislead the hundreds of thousands of Canadians facing mortgage renewal. He led them to believe that there would be assistance for them in the budget. He gave them every indication that there would be widespread assistance. Home owners came here on September 15 to protest the high mortgage rates, and he told them to grit their teeth and hang on until the budget. They gritted their teeth and they hung on, at great cost to themselves, until the budget. What did they Find when that budget came down? What did the budget offer them? It offered a measly $38 million in assistance to home owners, to be spread out among some 12,500 home owners considered to be in dire straits. Who will choose which ones of the many hundreds of thousands who are in difficulty will be among that select 12,500?
The budget does not begin to meet the needs of the more than 100,000 home owners who will have to spend more than 30 per cent of their income after renewing their mortgages this year. The minister responsible for housing has toyed with the emotions of Canadians, holding out some hope where there was none for them, buying time to save his own job. After today, I doubt that he will be able to do that.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: What a cruel joke it is to raise people's expectations only to dash them to the ground when it suits one's purposes!


Mr. Laniel:: That's what the opposition has been doing for months.


Flora Isabel MacDonald: I would like to point out some of the people to whom that hope was held out, and to ask whether they will be included in the select group to which the minister will be doling out meagre assistance. I cite one example of a couple living in the city of Kingston who have a $45,000 mortgage. Previously they paid $424 a month for this mortgage. Now they pay $683 a month. Their monthly net income is $1200. The two people living in this home are an elderly couple over 60 years of age. Their mortgage payments now represent some 57 per cent of their monthly income, whereas previously their mortgage payments represented 35 per cent of
November 17, 1981

it. After paying the mortgage, taxes, heating, etc, they have $18 remaining in their monthly budget for food. Will they be among the 12,500 people to receive the minister's meagre assistance? Will they be among the select few? What about another couple who have a mortgage of $38,000? They used to pay $356 a month in mortgage payments. Now their payments are $635 a month. In this home live a husband and wife, four children and an invalid mother. Are they going to be among those who receive assistance? How will we know? What criteria will the minister use to spread among the people who are so desperately in need? That is the question thousands of Canadians are asking tonight right across the country.

The Minister of Finance has ignored the House of Commons since he brought down the budget. He rarely appears. If the government and the minister will not pay attention to the advice of the opposition, perhaps it will listen to one of its former cabinet ministers. Goodness knows, there are enough former cabinet ministers to fill a whole town in dire straits. To quote the Hon. Eric Kierans, who was the first to leave but not the last, he said:
The budget as a whole reflects a complete ignorance of, or refusal to deal with the economic reality of Canada-the enormous social and economic costs imposed on 90 per cent of a population living with soaring prices and the deliberate use of high interest rates to restrict production when 8.3 per cent of the work force is unemployed.
I ask what this government offers and what this budget offers to the youth of Canada. Their prospects of employment are bleak indeed in one of the world's richest countries.
Unemployment for young men and women between the ages of 15 and 24 has increased. In a country of such vast potential in both human and natural resources, the government offers them little hope for a better future.
At a time when we should be developing the potential of Canadians through post-secondary education, cutbacks in transfer payments are on the finance minister's menu of restraint.
A federal task force set up by the government warned of severe shortages of highly-skilled workers in Canada today. Government cutbacks now as a result of this budget will undermine the long-term development of a work force essential to our country's economic growth and position in the world community.
We recognize, however, that when it comes to talking about cutbacks, the Minister of Finance has a talent for cosmetic surgery and the budget attempts to mask his real intentions. As hon. members will recall, the minister said on budget night that there would be no cutbacks to post-secondary education or to health and medicare programs. That is just an example of more deception. There will be cutbacks, and there will be long-term cutbacks at that. The minister proposes massive cuts known as the revenue guarantee. He can dismiss it, but I would say to you, Mr. Speaker, "a rose by any other name", because eliminating the revenue guarantee will seriously
The Budget-Miss MacDonald reduce the funds available for education, for health and for hospital care.
Since 1972 the revenue guarantee has been used to finance these programs. Its elimination directly translates into a reduction of $5.7 billion in transfer payments over the next five years and $915 million in 1982-1983. As hon. members may remember, the all-party parliamentary committee on federal-provincial fiscal relations concluded that the revenue guarantee must be considered part of the health and education package.
Cutting out that huge amount of money will mean that the provinces will likely have to increase taxes or reduce services or both.
The minister talks of equity in his budget. Cutbacks to post-secondary education will be devastating to the lower-income groups. The vibrations from university, students across the country are clear. There are organized lobbies on every campus and student protests on the Hill. Students are up in arms. Their futures are at stake.
At Queen's university this fall, I addressed 500 students, fearful and anxious about their future. The budget confirmed their worst fears. The Minister of Finance has closed the door on thousands of students.
Cutbacks mean that services and facilities will inevitably be cut. Enrolments will fall. Institutions will close. Higher tuition fees will mean higher education only for those who can afford it. Why is the minister at this point undermining Canada's future by denying our youth the opportunity to develop their potential through higher education? He should be paying attention to the students' slogan: "Mind power is Canada's energy," instead of doing all that he can to destroy it.
Not only will thousands of students lose their right to a decent education, but the budget has also ensured that thousands of pensioners will continue to eke out a meagre existence below the poverty line.
Of Canada's elderly, 575,000 live below the poverty line. As the minister responsible for the status of women knows, just over 400,000 of these are women, mostly widows.
Many of these people have worked hard all their lives only to arrive at a time when they see their savings eroded by inflation, their minimal pensions unable to keep up with rising costs. Pensioners spend about 80 per cent of their incomes on four basic necessities; shelter, food, home heating fuel and transportation. And the cost of each of these items goes up faster than the quarterly cost of living to which their pensions are indexed. Thus their pensions buy less and less with every passing month. There is no equity for the pensioners living below the poverty line.
This minister is content to lavish far more attention and money on things such as Mirabel airport than he is on Canada's elderly citizens in need. He is far more prepared to spend $2,000 on a luncheon than he is to worry about the diets of the elderly poor. There is no equity in this budget. There is

November 17, 1981
Adjournment Debate
no fairness. There is no social justice. The minister would be well advised to go back to square one and start all over again.


Some hon. Members:: Hear, hear!



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Mr. Doug Lewis (Simcoe North):: Mr. Speaker, I rise in this adjournment debate to bring to the attention of the House the answers of the minister responsible for housing to the questions which I raised on Tuesday, November 10. At that time I asked the minister responsible for CMHC what guidelines his officials were using when they contacted home owners facing mortgage renewals immediately prior to the budget. The minister responded, to the surprise of everyone in this House, that officials from his office and he personally had responded by telephone in approximately 200 cases. He said that they had been able to obtain deferrals of contracts and contract renewals until after Thursday or Friday of that week. When the minister made that statement he was talking about budget week and budget day.
We submit from this side that the minister had absolutely no business, himself or his officials, telling any Canadian about the details of the budget prior to budget evening. That is the job of the Minister of Finance (Mr. MacEachen), not members of the minister's staff or other ministers. Our party has been very concerned about budget secrecy and preferential treatment.
Today we had an even greater demonstration and cause for concern. We want to know what the minister's office was telling the institutions involved that would persuade them to hold off mortgage renewals until after the budget. Did the minister's office attempt to secure the same deferral for all home owners who had directly or indirectly contacted his office?
My colleague, the hon. member for Peterborough (Mr. Domm), has dramatic proof that the minister was very selective about whom he or the members of his office called. That hon. member brought forward 31 names of individuals who had not been contacted by the minister or his staff, although they had been brought to his attention.
We want to know, and that is why we asked the question and ask it again tonight, what criteria the minister's office was using to determine who should get the deferrals and who should not. Was the minister's office just picking names out of a hat? Where were the guidelines drawn from? The minister replied to one of the supplementary questions with the statement that he unequivocally did not know what was in the budget. That was on Tuesday.
It is interesting to note in retrospect that on Tuesday the minister said he did not know what was in the budget; on Thursday evening we found out what is suggested he was told, yet almost instantly after the budget presentation CMHC presented a detailed document outlining the establishment of a centre dealing with mortgage renewals, complete with longdistance phone lines and a manager. Is not the age of high communications wonderful when a minister of the Crown can establish such procedures within two days? It is inconceivable that a minister could state in this House that he did not know what was in the budget when officials from his office were telling people in Delta, B.C., and Oakville, Ontario, not to renew until after the budget when a whole new departmental structure should appear in an instant.
My question to the minister was prompted by evidence which came to our attention from Delta, B.C., where an individual faced with an increase in mortgage interest from 13.75 per cent to 20.25 per cent was called by an official of the minister's office and told that if the renewal did not have to be signed, he should hold off until Friday, after the budget.
The gentleman I spoke to in Halton, Ontario, was also contacted and told that he should delay renewing his mortgage until after the budget. There will be help in the budget for people like him who are having trouble renewing their mortgages, he was told.
We have information which suggests that, although the minister stated he did not know what was in the budget, employees of Vickers and Benson, the Liberal Party's favourite advertising agency, were certainly well informed. This information will come forward as the week unfolds. The minister stated unequivocally that he instructed his officials specifically to make no reference to the budget and to hold out no promise. We can well understand the minister's embarrassment at the revelation on budget night. The so-called assistance in the budget was a cruel joke. It was certainly nothing that anybody would bother to call anybody about. The minister dashed the hopes of Canadian home owners all across this country.
We are not so concerned about the lack of substance in the budget as we are about the process which was followed. We are concerned about over-all budget secrecy. That is a tradition in Canada. We want to know, Mr. Speaker, how much information was revealed to the minister's officials. What did they do with it and how secret did they keep the information which they obviously had? We saw today the Secretary of State (Mr. Regan) who is in charge of advertising, cut loose and run. We saw the Minister of Finance, who has left the
November 17, 1981

minister responsible for housing swinging in the wind for months, continue to do so. We were also prompted in our efforts today by an unbelievable exhibition from the government House leader when he suggested that, instead of pursuing our democratic right to raise questions in this House, we should resign. Well, we know how long it takes them to call byelections on certain occasions and we have no intention of following the cheap hysterics of the government House leader.
Once again, Mr. Speaker, I invite the minister responsible for housing to rise in his place and do the honourable thing and announce an inquiry to get to the bottom of the leaks of information and the lack of direction given to his officials in his department. I suggest the inquiry could also be broadened to encompass the events of today, so that the true facts could be made available to this House.


Mr. Raymond Savard (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, I should like to get back to the comments made by the minister responsible for the Canada Mortgage and Housing Corporation (Mr. Cosgrove) regarding the question raised by the hon. member on November 10, 1981, on the subject of advice given to home owners whose mortgages had come up for renewal. May I point out, Mr. Speaker, that he kept the promise he made earlier in the House and that he has taken a number of measures to help those who, when their mortgages come up for renewal, are hard put to meet their monthly payments because of interest rates. The minister's staff and the minister himself have answered 366 telephone calls, and the minister has answered 193 letters. In many cases, he was able to get lenders to make alternative arrangements for financing. In other cases, he obtained a deferral of interest payments. Often, Mr. Speaker, members of his staff were able to help home owners to get organized by referring them to ombudsmen appointed by some banks to deal with mortgage renewals.
1 also wish to say a few words about the hon. members comments on the secrecy of the budget. Mr. Speaker, the hon. member will agree, I am sure, that to people who are in a difficult situation, it was only natural to wait until the budget was brought down to see if it did not contain some form of assistance. As the hon. member knows, help was in fact announced in this budget. The government has established a Canadian mortgage renewal program under which the government undertakes to help Canadians who are in great need. It is also very encouraging, Mr. Speaker, to see that interest rates have fallen during the last few weeks, because there lies the real answer to solving the problems of home owners. Finally, Mr. Speaker, I would like to give the hon. member for Simcoe North (Mr. Lewis) the assurance that the government has done and will continue to do everything in its power to help home owners who are in great need.
Adjournment Debate


HUMAN RIGHTS-REPORTED PLAN TO ESTABLISH CIVILIAN INTERNMENT CAMPS. (B) TERMS OF STANDING ORDER PUBLISHED IN &quot;THE CANADA GAZETTE&quot;
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Mr. Speaker, I have always felt that with this Prime Minister (Mr. Trudeau) and his government, one should not listen to what he says, but should watch what he does. On September 10 of this year the Ottawa Citizen quoted the Prime Minister as saying-and you understand, Mr. Speaker, that the Ottawa Citizen is always very kind to the Prime Minister and quotes him accurately, I am sure-and here I will read what it says:
The record of intolerance in Pacific Canada, in the decades around the turn of the century, was not a proud one. No more exemplary was the decision taken by the federal government, in the heat and fright of World War II, to evacuate Japanese Canadians inland from coastal communities and to deprive so many of their civil rights.
That is what the Prime Minister said.
The Minister of Justice (Mr. Chretien) during the debate on the Constitution, justifying the provision of the charter of rights for Canada on February 17 said in defence of that charter, and I quote from page 7374 of Hansard'.
I want to examine the charter both in terms of what it holds out for tomorrow and also in terms of how it fits into the stream of Canadian history. While our history is one in which we can take pride, it is not without its stains. Some of these were brought out very clearly during the hearing by the joint committee of testimony from representatives of our native people, of the National Association of Japanese-Canadians, Francophone groups outside of Quebec, of Anglophone groups in Quebec, of the National Black Coalition, of women's groups, of the handicapped.
Part of our task is to recognize the injustice of the past, to say "never again shall rights be trampled upon''. Part of our task is to ensure that the enormous evolution in our values is reflected in our Constitution. That is what we are doing today. We are building a modern Canada for tomorrow.
That is what the Minister of Justice said on February 17. At the same time in cabinet, and I emphasize that, the Prime Minister, the Minister of Justice, the Solicitor General (Mr. Kaplan) and other cabinet ministers were formulating Privy Council Document No. 1305 which was Gazetted on June 10. I quote as follows from that document, Schedule, Part II, under the powers assigned to the Solicitor General:
6.	Establish, administer and operate civilian internment camps.
7.	Facilitate the selective reduction and transfer of prison populations to provide for the establishment of civilian internment camps.
On the one hand the Prime Minister and the Minister of Justice say never again. At the same time they are providing powers for themselves to establish civilian internment camps. "Never again shall rights be trampled upon."
The question arises, if never again, why does the cabinet make provision for civilian internment camps? I think it is safe to say there is a truism about politics. Governments do not make provision for powers they do not plan to use. Does the government plan to use the provisions in this act? Of course it does. The question is who will be the candidates? Who will be in those civilian internment camps?

November 17, 1981
Adjournment Debate
It is important to note that in 1970 we did not need a war to have wholesale imprisonments. The provisions of this act, which are an addendum to the War Measures Act, are supposedly to be enforced in case of war. However, the Prime Minister has already proved to us that we do not need a war to invoke those provisions.
What will trigger the use of those powers to bring about the civilian internment camp? Why did the Solicitor General when I asked this on October 29 lie to me when I first presented that matter to him?


Mr. Deputy Speaker:: With all due respect to the hon. member, it is unparliamentary to say that another member has lied. I wonder if the hon. member would reconsider his words on that point.


Benno Friesen: I respectfully suggest, Mr. Speaker, that the rules of the adjournment debate do not permit that kind of interruption.


Mr. Deputy Speaker:: The language that the hon. member used is not acceptable at any time in the parliamentary proceedings. I invite the hon. member to rephrase his remarks.


Benno Friesen: I will rephrase it and ask why does it appear that the minister lied to me when he said "there are no such orders in council"? Either he seemed to be misleading the House or he does not know what is going on in cabinet and does not deserve to be a minister of the Crown.
When I asked the minister in the House why he did that, the Solicitor General replied "the presence of illegals or foreign agents of that foreign power in Canada." Is the Immigration Act not adequate to deal with that? Is the Criminal Code not adequate to deal with that? Is the court system not adequate to deal with that?
The provision in this order in council is for civilian internment camps. That refers to citizens and to landed immigrants who have been denied due process of law and habeas corpus. In the short history of the tenure of the Prime Minister we have had one example where 450 citizens of the province of Quebec were imprisoned without due process of law and without habeas corpus. The present Speaker in the other place said that it was silly to imprison those people because logically they were not harming our country.
I have asked serious questions and I should like to have an answer tonight.
[ Translation)


Mrs. Celine Hervieux-Payette (Parliamentary Secretary to Solicitor General):: Mr. Speaker, I shall be happy to answer the question put by the hon. member for Surrey-White Rock-North Delta (Mr. Friesen). I might add that this will also be an opportunity for me to explain what the situation is in cases where the order in council on contingency plans is to be implemented. The first circumstance would be in case of war.
The second would be in case of a breakdown in public order preceding the outbreak of a war or in case of terrorist acts. The third circumstance would be an emergency following a disaster resulting from natural causes.
As Parliamentary Secretary to the Solicitor General of Canada, I can say that we would be in charge of the two first situations only, because they come under the jurisdiction of the Department of the Solicitor General. The purpose of this order in council will, in fact, be to prevent occurrences such as those that took place during the last World War, which were mainly due to a lack of staff and of regulations such as the one we would like to have adopted. Mechanisms for enabling the government to meet its responsibilities still have to be worked out; they will be made known shortly and will be the subject of the customary debate.
Mr. Speaker, once more I would like to say that the new measures are primarily aimed at striking a balance between the rights of the individual and national security, and they will become effective only after proclamation before the House. For the information of the House, I would like to add that an additional margin of safety will be provided so that citizens can protect themselves against any abuse of human rights, since this House will soon be asked to pass a motion to entrench a charter of rights in the Constitution of Canada. The individual will therefore have the protection of the charter of rights, and finally, the government's action will be structured as described in the order in council.


THE ENVIRONMENT-INCREASED GRANTS FOR CONSTRUCTION OF MUNICIPAL SEWAGE TREATMENT SYSTEMS
Mr. Maurice Foster (Algoma):: On October 27 the Minister of the Environment (Mr. Roberts) announced a program called "Great Lakes Water Quality Agreement" which will provide some $65 million for municipal infrastructure for sewage treatment plants and associated facilities over the next three years. I want to indicate my appreciation and good feelings toward the minister for announcing this program. It will be of great benefit in my constituency where some $5.6 million will be expended by this program during the next two or three years. The Great Lakes Quality Agreement approved the expenditure to Elliot Lake of some $2.8 million, to the town of Spanish of $1.45 million, to Little Current of $1,263,000 and to Blind River of $42,000. These were new commitments in the case of Spanish and Blind River. In Little Current and Elliot Lake it involved funds that were replacing those provided by the community services contribution program that was terminated at the end of last year. The funding under the program is very much appreciated. However, in the circumstances in the town of Elliott Lake which is rapidly expanding, where they are into a multimillion dollar sewer and water development program, not only to serve the existing town but to serve a new town undergoing construction right now, the amount of funding provided under the Great Lakes Water Quality Agreement does not totally cover the commit-
November 17, 1981

ment we envisaged or planned under the community services contribution program. In fact, there was a shortfall of some $1,236 million from that program. The minister indicated that he hoped to meet with the provincial minister of the environment, Mr. Norton, in the very near future to work out a very suitable arrangement to cover the shortfall. I hope the parliamentary secretary in responding this evening will be able to report further to us on that meeting and the developments from it.
Equally important to that matter is the question of the payment of these funds. I should like the parliamentary secretary to report on that tonight. Under the previous program, the community services contribution program, the municipality would construct the infrastructure, the sewer and water system, and then wait sometimes six months or a year to actually be reimbursed for it. In the days when interest rates were 3, 4, or 5 per cent, that procedure may have been acceptable. But in this day and age when small municipalities are paying up to 20 per cent and more for money to carry massive projects like this one, involving more than $1 million for a year, they are faced with several hundreds of thousands of dollars in interest and carrying charges.
I put the question to the minister in the House on October 27, which happened to be the same day on which the minister announced the program. I asked whether the minister would consider advancing the payments from the federal government under this program as the work progressed which would save municipalities, many of which are strained to capacity attempting to finance major projects, literally hundreds of thousands of dollars. The minister said that he had not had an opportunity to work out the exact details of the program with the provincial government, but that he would certainly take my representations into consideration.
I hope the parliamentary secretary in responding in the House tonight will respond in a positive fashion to that suggestion. It is not only desirable, it is absolutely essential. We are not talking about only three or four municipalities in my constituency. We are talking about literally dozens of them across the province of Ontario, all of which will take advantage of the Great Lakes Water Quality Agreement during the next three years.
I plead with the minister and the parliamentary secretary to follow the suggestion I made in the House a few days ago and to ensure that no more additional costs are loaded on to these hard-pressed municipalities by requiring them to carry large financial burdens of high interest rates over a period of six months or a year or, in some cases, even longer.
Adjournment Debate


Mr. Roger Simmons (Parliamentary Secretary to Minister of the Environment and Minister of State for Science and Technology):: Mr. Speaker, first of all I should like to thank the hon. member for Algoma (Mr. Foster) for raising this issue again tonight and also thank him on behalf of the minister for his words of commendation to the minister both tonight and on October 27 when the minister made the announcement of increased assistance to municipalities for sewage treatment facilities under the Great Lakes Water Quality Agreement. This federal assistance will enable Ontario to put in place those facilities needed to honour Canada's commitment under the Canada-United States Great Lakes Water Quality Agreement with respect to municipal sewage treatment.
The hon. member raised the question of whether the minister of the Environment (Mr. Roberts) will consider paying the grants to the municipalities concurrent with the pace of construction, rather than at the end of construction, so as to avoid the municipalities having to finance these grants in the interim period. It is a viewpoint with which we have considerable sympathy. On October 27 the minister undertook to raise that issue with his provincial colleague, Mr. Norton. I am not in the position tonight to say whether that discussion has taken place.
The proposal of the hon. member for Algoma introduces a problem by virtue of the nature of the agreement under which we are funding the cleanup of this municipal pollution. The federal agreement will be with the province of Ontario, not with the municipalities.
Under the Canada-Ontario agreement it is the provincial government which undertakes to fulfil certain of the obligations of the Canada-United States agreement, and hence the implementation of the program lies with the province and the flow of federal grants is through the provincial government.
I would like to indicate that through our agreement with Ontario, the province will ensure the completion of municipal sewage works costing approximately $355 million in support of the international water quality agreement. Canada's share of this amount will be $65 million, which brings to more than $600 million the amount of federal money expended in the cleanup of municipal pollution.
The provincial government will submit to the Government of Canada certified statements of account for eligible expenditures on or about the end of April, July, October and January of each fiscal year. Interim financing charges incurred by the municipality during construction constitute one of the eligible project costs for which assistance under this program is provided.
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Adjournment Debate
To the extent that the municipalities are able to present their claims and to the extent that these in turn are presented to Canada in a prompt and efficient manner, financing costs relating to the federal grant contribution will be kept at a minimum.


Mr. Deputy Speaker:: A motion to adjourn this House is now deemed to have been adopted. Accordingly this House stands adjourned until tomorrow at two o'clock.
At 10.28 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, November 18, 1981