1981-12-16

ROUTINE PROCEEDINGS


Mr. Charles Mayer (Portage-Marquette):: Madam Speaker, prior to the November 12 budget the Minister of Agriculture (Mr. Whelan) implied that, if there was no help for Canadian farmers in the budget, he would resign. The budget just passed in this House provides for approximately $15 per farmer in direct assistance, as a result of the budget. I therefore move, seconded by the hon. member for Lisgar (Mr. Murta):
That this House takes note of the fact that the Minister of Agriculture must therefore be satisfied with this amount of assistance, $15 on average per farmer, or he would have followed through with his previous threat and resigned.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HOUSING
Mr. John McDermid (Brampton-Georgetown):: Madam Speaker, through the November 12 budget we were given to believe that the Government of Canada was offering assistance to home owners facing mortgage renewal at current interest rates. If their payments exceeded 30 per cent of their total income, home owners would be eligible for interest deferrals up to $3,000. This was proclaimed by the minister of housing and the Minister of Finance (Mr. MacEachen) to be a guarantee to the lending institutions. However, banks and trust companies are not honouring this plan because no direction has been given to them on how the plan will work. Therefore I move, seconded by the hon. member for Rosedale (Mr. Crombie):
That the government immediately inform all banks and trust companies that this plan is to be implemented forthwith, how it will work and assure them that the guarantee will be honoured so that home owners facing the prospect of losing
their homes can be assured that the assistance offered in the Liberal budget will in fact be passed on to them and then they and their families can have Christmas without fear of eviction.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN ARMED FORCES
Mr. Andre Maltais (Manicouagan):: Madam Speaker, 1 rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
Considering the exceptional work done by the Canadian Forces at La Romaine this past weekend, I move, seconded by the hon. member for Roberval (Mrs. Beauchamp-Niquet):
That this House congratulates unanimously Canada's Armed Forces for their efficiency and their humanism in rescuing one civilian and in evacuating some 160 Montagnais Indians from the lower north shore of Quebec.


Madam Speaker:: Under the provisions of Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Madam Speaker:: The House has heard the motion. Is it the pleasure of the House to adopt the motion?


André Maltais: Madam Speaker, I want to take advantage of this opportunity to tell the House that I have just come back from La Romaine, a village where one of the large Montagnais Indian reserves is located, and I wish to stress the complementary role of the Canadian Forces in providing for the safety of civilians and especially in providing transportation to areas that are literally shut off from our larger urban centres. I also wish to take this opportunity to ask the Department of Transport to give close consideration to the issue of municipal airports in this area, because this past weekend I had to stay two days longer, at the expense of the House of Commons, because it was necessary to rent a helicopter in order to get out. I should also like to congratulate Father Alexis Jovenot, a missionary who has been in La Romaine for 28 years and

December 16, 1981
takes care of the spiritual needs of all the Indians and whites living in this village which is 350 miles east of Sept-Iles. Without the quick thinking of this missionary Father, it would have been impossible to evacuate the Indians. Second, Madam Speaker, I wish to ask the co-operation of the Department of National Health and Welfare, in taking specific action in these areas, because, for instance in St. Augustin, it was impossible to treat a twelve-year-old girl who had been sick with appendicitis for five days. I want to ask the Department of National Health and Welfare to increase its presence in these areas, because we depend on them for medical care. Once again, I wish to congratulate the Canadian Forces, and I want to thank the House for giving me an opportunity to express my views on this subject.


Madam Speaker:: Does the hon. member for Esquimalt-Saanich want to debate this motion?


Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, just one moment, if I may. I would like to join with the hon. member in congratulating the members of the Canadian Armed Forces on their heroic endeavours. I just wish that that same unanimity had been shown yesterday when we were congratulating the Armed Forces with a standing ovation, with one single exception in the person of the Prime Minister, for their heroic rescues off Sable Island.


Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, I should like to join with the hon. member who moved the motion congratulating the Canadian Armed Forces, and also express our concern from this corner of the House that this kind of rescue undertaking had to be undertaken. There ought to be some measures available to ensure that in the future this is not necessary. However, I cannot allow the comment of the previous speaker who was speaking on behalf of the Conservative Party, to pass. I personally noted that the Prime Minister was not the only member who did not rise, because there were members in the Conservative Party who did not rise either.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Lloyd R. Crouse (South Shore):: Madam Speaker, I rise under the provisions of Standing Order 43 to move a motion. In view of the fact that the Canadian fishing industry is facing a potentially disastrous marketing situation, and given the position of other major producing countries such as Denmark,
Norway, Iceland, the Faroe Islands and Greenland, that ship fish into the European Economic Community at little or no tariff, while Canada faces a 15 per cent tariff, I move, seconded by the hon. member for Halifax West (Mr. Crosby):
That the Canadian government contact officials of the European Economic Community requesting that the tariff on Canadian fish exports to that market be eliminated.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIRPORTS
Mr. Lome Nystrom (Yorkton-Melville):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
Whereas the federal government has expropriated 90,000 acres in the Mirabel area, of which only 17,000 acres are being used for the airport, and whereas local representatives have joined together to ask the federal government to end its control over the area, I move, seconded by the hon. member for Spadina (Mr. Heap):
That the House require the Minister of Public Works (Mr. Cosgrove) to publish the report of the Canada Lands Company (Mirabel) Limited and to honour the commitment he made in February to sell back all property expropriated in excess to the local people, as soon as possible.


Madam Speaker:: Under the provisions of Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AUDITOR GENERAL
Mr. Bill Wright (Calgary North):: Madam Speaker, in the 1981 report of the Auditor General he stated that the Department of Secretary of State had failed previously to remedy reported inadequacies in controls over the Canada Student Loans Program. He added that it is unacceptable that an operation the size of the Canada Student Loans Program should continue to have inadequate control procedures, resulting in defaulted loans of SI73 million. Therefore I move,
December 16, 1981

seconded by the hon. member for Lethbridge-Foothills (Mr. Thacker):
That the Department of Secretary of State immediately undertake to review the Canada Student Loans Program and develop adequate control procedures for its operations and management.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


REGIONAL ECONOMIC EXPANSION
Mr. Arnold Malone (Crowfoot):: Madam Speaker, I should like to commend the Department of Regional Economic Expansion which has worked to the advantage of a number of developing regions in Canada by giving a stimulus to otherwise slow growth areas.


Some hon. Members:: Hear, hear!


Arnold John Malone: However, in view of the fact that marginal areas of economic growth which are not supported by DREE feel discriminated against by the fact that many of their normal, local industrial projects are siphoned away by the attraction of DREE's financial support elsewhere, 1 therefore move, seconded by the hon. member for Medicine Hat (Mr. Hargrave):
That this House urge the Minister of Regional Economic Expansion to undertake a study to ascertain the scope and significance of the negative impact on those regions not assisted by DREE but because of DREE programs elsewhere lose their potential and are robbed of the opportunity to grow.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADA POST
Hon. W. G. Dinsdale (Brandon-Souris):: Madam Speaker, the 60 days for the review of the proposed exorbitant increase in postal rates has expired without any changes being made by the Canada Post Corporation. It is now incumbent upon the Governor in Council to accept or reject the 30-cent rate. Because of the hardship the increases will impose on all Canadians, in particular upon senior citizens, voluntary chari-
Oral Questions
table organizations, and small businesses, at a time of growing economic distress, I move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That before Parliament adjourns for Christmas the government accepts its responsibility and announces changes in the postal rates to bring them to a more reasonable level, and especially that the Secretary of State takes the necessary action to cushion the shock of these rates to pensioners and charitable organizations, as has been suggested by the president of the postal corporation.


Madam Speaker:: Is there unanimous consent for the presentation of this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question is directed to the Minister of Finance. There is speculation that the ongoing saga of change in the minister's ill-fated budget will continue this Friday with some announcement in the House. Would the minister care to confirm that speculation today? Would he comment on the nature of the changes which he is proposing to make? Would he also say whether this would be part of an ongoing series of change that we can expect during the Christmas break?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I think, to be brief, the answer to each question is no. As the hon. member knows, I have been involved since the weekend with the provincial finance ministers at a conference, which has interrupted my intensive consideration of the representations that I have been receiving on the budget. Therefore it is not possible for me to indicate today when 1 may be making any announcements. All I can say, as I said to the Leader of the New Democratic Party last week, is that if I am prepared to do that before the House rises, I will certainly draw it to the attention of the House. But I am not prepared yet to say to the hon. member when that will be possible. When it is possible, I will certainly let him know.


PRE-BUDGET DISCUSSIONS
Michael Holcombe Wilson: Madam Speaker, many people in the past month have seriously questioned the competence of the Minister of Finance as a result of the budget which he introduced. There is tremendous opposition to the budget. I think this is apparent in the many representations which have been made to him in the past few weeks. My question relates to the process which the minister used in

December 16, 1981
Oral Questions
preparing his budget this year. Why did the minister introduce such a wide-ranging change in tax policy without drawing on the normal sources in the private sector which have been drawn on in the past, before the budget was prepared? Why did he avoid discussing this with an expert in his own caucus, the President of the Treasury Board, particularly when tax officials in the department are not as strong or as experienced as they have been in the past? Why did he follow this process, rather than introducing these wide-ranging changes through a white paper?


Allan Joseph MacEachen: Madam Speaker, it has not been the custom, as the hon. member knows, prior to tax measures being produced in the budget to have the kind of consultation the hon. member mentioned.


Mr. Nielsen:: Tell that to Walter Gordon.


Allan Joseph MacEachen: We have had a good deal of comment about the question of budget secrecy. Certainly that convention obviously precluded any meaningful consultation on specific measures prior to budget presentation. It seems to me that that is an issue which Parliament may want to examine as to how it may be possible in the future to alter that convention to have specific consultation before tax measures are introduced. In the past the practice has been to hear representations following the budget presentation and, where justified, to make changes. That has happened frequently in past budgets and it is something that I am quite prepared to contemplate in the present circumstances.


ADVICE GIVEN TO MINISTER
Michael Holcombe Wilson: Madam Speaker, I would suggest to the minister that he brief himself on the past practices because, in the past, the knowledge of experts in the private sector was drawn upon. I should like to draw the attention of the House to the fact that this was done in this case as well. It appears that the only outside expert who was used in the preparation of this budget was a Professor Neil Brooks of Osgoode Hall. Professor Brooks is a well-known left wing tax adviser who, in the past, has advised the NDP on their tax proposals.
It is becoming more clear every day why the minister defends this budget that has been so misguided-


Madam Speaker:: Order. Order, please. Does the hon. member have a question?


Mr. Baker (Nepean-Carleton):: Sure he does; so does the country.


Michael Holcombe Wilson: Madam Speaker, I do have a question and I hope I get an answer. By ignoring the outside advisers who have assisted in the past, was the minister introducing a distinct shift in the philosophy of the government by relying
only on Professor Brooks this time, who clearly has a different point of view from that of many people in this House?


John Horton McDermid: From the majority of people in this House.


Allan Joseph MacEachen: Madam Speaker, I want to assure the hon. member that I received no advice from Professor Brooks prior to the budget. I do not know what consultations my officials may have had with various persons. I hope that they did consult a wide group of people, as I did, on general matters. On the face of it I do resent the notion that any particular person with expertise in the field should not be consulted simply because the hon. member might describe him as a left winger. I am told there are some left wingers in the Tory party.


Some hon. Members:: Oh, oh!


IMPACT OF PROVISIONS ON EMPLOYERS' CONTRIBUTIONS TO HEALTH BENEFIT PROGRAMS
Hon. David Crombie (Rosedale):: Madam Speaker, my question is also for the Minister of Finance.


Mr. Broadbent:: That is the whole left wing!


Some hon. Members:: Oh, oh!


David Edward Crombie: I am sure the Minister of Finance is aware that one of the truly socially beneficial developments in the past number of years has been the negotiation of health and welfare benefit plans within collective agreements. This has allowed ordinary working people to gain coverage with respect to long-term disability, health and dental plans, group life insurance and so on. One of the great incentives of these plans has been the fact that employers' contributions have not been taxable. All that has changed in the budget and it has put those plans at risk. I know that the minister has received a number of representations from unions across the country and, indeed, from the Minister of Labour. I should like to ask him when he intends to announce a revision of this aspect of his budget.


Allan Joseph MacEachen: Madam Speaker, am I justified in concluding that the hon. member is the left wing to which I referred earlier?


Walter David Baker: Take your choice, but answer the question.


Allan Joseph MacEachen: The answer to the question is that if any revisions are made to any particular aspect of the budget they will be announced in the regular way.


REQUEST THAT MINISTER REVISE TAX PROVISIONS
David Edward Crombie: Madam Speaker, this is no small or laughing matter to lots of people. These plans cover
December 16, 1981

750,000	men, women and children in this country. They were not negotiated as loopholes. They are not diversions for the rich; they are social programs for working people. I want to know, and they want to know, whether the minister is going to revise his budget and make sure that he keeps faith with these plans.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, when the hon. member is contemplating the question of social justice he should ask why it is that he would support the proposition that employer contributions in the hands of a particular group of workers should be taxable, and not in the hands of other groups. That is the question of equity which is raised in the budget, concerning which the hon. member has said very little.


David Edward Crombie: They made agreements.


Allan Joseph MacEachen: Maybe justice is not an important part of his approach to social affairs.


NEGOTIATION OF EMPLOYEE BENEFITS
David Edward Crombie: Madam Speaker, the question is a clear one, and it ought not to be dealt with simply in that casual fashion. These agreements have already been negotiated, and negotiations are coming up again next spring. Union leaders, in their negotiations, will have to determine whether or not they can negotiate those benefit packages again. The minister owes them an explanation so that they can do their job.


Allan Joseph MacEachen: Madam Speaker, is the hon. member saying that any benefit-


Erik Nielsen: Never mind the rhetoric. Let's have an answer.


Allan Joseph MacEachen: -which is negotiated should not be taxable? Surely wages and salaries are negotiated, and they are taxable. Why is the hon. member drawing that red herring into the discussion?


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


ANNOUNCEMENT OF POSSIBLE CHANGES
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, when one's left wing is not working, one tends to fly around in circles a great deal.


Walter David Baker: What part of the chicken are you?


Some hon. Members:: Oh, oh!
Oral Questions


Bob Rae: Easy, now! Easy, boys!
My question, which is directed to the Minister of Finance, relates to the speculation about changes in the budget. Over the past couple of weeks the minister has made it clear to the House that he intends to make some changes, and that he intends at least to try to give the House of Commons an opportunity to hear about these changes and to debate them before they are put into effect. Will the minister advise us concerning these changes before Friday and, if not, why not? The implication is that several changes will be taking place throughout the months of December and January when this House will have no opportunity to discuss them.


Allan Joseph MacEachen: Madam Speaker, I answered that question in response to a question put by the hon. member for Etobicoke Centre. As soon as I have completed the process of hearing representations, giving consideration to the matter and, indeed, discussing any proposals with my colleagues, I will then make an announcement. If the House is here, 1 will certainly ensure that changes are drawn to the attention of the House.


Bob Rae: Madam Speaker, the House will be here, but the question is whether we will all be here or whether the minister will be here. That is the problem. The fact is that he did make a commitment over the last couple of weeks that he would bring these matters before the House, but now he seems to be backing away from the commitment. This is yet another retreat by the minister.


FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS PROPOSAL TO DROP REVENUE GUARANTEE
Bob Rae: I would like to direct a supplementary question to the Minister of Finance arising from the meetings which he had with the provincial finance ministers on Monday and Tuesday of this week. In view of the figures which were released today by the Conference Board of Canada which show that growth in every one of the provinces will be down and that unemployment will be up, significantly, in all of the provinces, how can the minister possibly carry on with a plan of dropping the revenue guarantee, which will have the effect of reducing the transfer payments and the possibilities of social investment, not only in one part of the country but in every single province of Canada?


Allan Joseph MacEachen: Madam Speaker, the hon. member is aware that in the proposals I have made to the provinces, I have suggested the dropping of the revenue guarantee. I have also made it clear to the provinces that in no way would the dropping of that particular guarantee have an effect on their capacity to support health services or post-secondary education.

December 16, 1981
Oral Questions
In addition to that, I provided, through the budget, that the loss of the revenue guarantee would be offset to a great extent by revenue flows to the provinces as a result of the tax changes.


Bob Rae: The minister is carrying on as though the economy were not in a recession. It is unbelievable that the minister would persist in his plans to reduce the over-all federal commitment to social spending and to social investment at a time when we are in a recession which, according to all the figures and indications, is becoming worse.


BANKS AND BANKING
Bob Rae: Madam Speaker, my final supplementary question is addressed to the Minister of Finance and is concerning bank profits. The minister gave statements to the House on June 12, 1980; March 13, 1981; April 9, 1981; May 29, 1981; December 2, 1981; and December 7, 1981, in which he indicated that he was still considering the question of whether or not an excess profits tax would be appropriate. The minister wants to make the banks bleed. It is clear that he intends to gum them to death, and that is the only way in which he is doing it. Does the minister not think the gumming has gone on long enough, and that it is time to take action with respect to excess profits of the banks?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, the hon. member has asked three questions and has described them as supplementary questions. I wonder how one can ask a supplementary question when one's first question is on tax changes-


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: -one's second question is on fiscal arrangements, and the third question is on bank profits. To what are they supplementary? Are they supplementary to the gumming which this hon. member has been practising as a profession for the last several months?


REFERENDUMS
Mr. Gaston Isabelle (Hull):: Madam Speaker, my question is directed to the Prime Minister. Following a number of more or less obscure and convoluted statements by the leader of the
separatist government in Quebec, concerning the same old, rather unrealistic, question of sovereignty or sovereignty with association, French Canadians living in their formerly "belle" province are now totally confused and they are suffering from acute anxiety and are extremely concerned about their own future and especially their children's. Can the Prime Minister inform the House whether the federal government intends to consider the possibility of asking the citizens of Quebec, once and for all, and by whatever means, whether or not they, in the free exercise of their democratic rights, wish to separate from the rest of a country as free, as vast, as peaceful and as prosperous as Canada is?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, the proposal is, of course, worth considering, but it seems to me that, to a considerable extent, the people of Quebec gave their answer when they replied to an ambiguous question put to them in May, 1980, and the majority made it clear that they did not even want to discuss the possibility of sovereignty associated with something else. We all know that the Parti Quebecois did not consider the will of the people of Quebec at that time, and therefore I am not so sure that, if the people of Quebec express their views in the way suggested by the hon. member, these views will be respected any more than they were after the last referendum.


NATIONAL SECURITY
Hon. Allan Lawrence (Durham-Northumberland):: Madam Speaker, my question is for the Prime Minister. It also relates to a situation within the province of Quebec, specifically the whole question of the security service investigations in that province involving the Parti Quebecois and Quebec cabinet ministers. A Canadian Press wire story is appearing across the country today in which the Solicitor General of Canada has some statements attributed to him. They are quite short, Madam Speaker. I quote:
-any political information discovered by the RCMP during the course of it-
The word "it" refers to the investigation. The sentence continues:
-will not be passed on to the federal government-
This is reiterated in the final paragraph in this story which reads:
If the RCMP happened to uncover any political secrets, it would not pass them on to the government.
Will the Prime Minister tell this House who will be making that judgment as to whether it is a political secret or not? Will it be the RCMP or will it be a member of the ministry of the federal government?


Pierre Elliott Trudeau: Madam Speaker, I have not had the advantage which the hon. member
December 16, 1981

has had of reading the comments of the Solicitor General. I can restate the policy of this government, as I did just a few days ago, and maybe that will satisfy the hon. member. The RCMP have no authority or mandate to investigate political parties as such, neither his party nor mine, nor any other provincial party. When evidence comes to the police that there has been purloining of confidential documents, whether by a political party, by an individual or by the hon. member himself, I think it is their duty to try to stop such practices and ensure respect for the property of the federal government. Therefore, if in doing that, they have to investigate political people, I think they will just do their duty and do so.


Allan Frederick Lawrence: Madam Speaker, before I address my supplementary question to the Solicitor General, I must say to the Prime Minister that simply because some clerk in the Privy Council office happens to stamp a political document confidential that is not going to stop anyone else, Official Secrets Act or not, from attempting to get something which should be legitimately in the public realm, and that includes the hon. member for Durham-Northumberland as well.


INSTRUCTIONS ISSUED TO SECURITY SERVICE
Allan Frederick Lawrence: Madam Speaker, my supplementary is for the Solicitor General. What instructions, if any, has he issued to the security service-not just the RCMP in general, but to the security service-which is being utilized in these investigations, to make sure that there are some guidelines, some parameters, or some definition about political information for them to follow?


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, I have not issued any new instructions because the instructions have been long standing. They are as follows. In the course of a legitimate investigation under the mandate of the security service, it often happens, I understand, that unrelated information comes to the attention of the security service. I have indicated that political information of the sort I described in that article is not brought to the attention of the government, and that it is the security service itself which makes that decision.
The recommendation of the McDonald Commission on that subject was precisely that, that the government, and ministers in particular, should not be given that kind of political spillover information. The McDonald Commission described the existing situation, which is rigorous, and that is the situation that will continue.
It is always inevitable that if a legitimate investigation is being conducted by the security service, spill-over information will be included in it and will come to the attention of the security service. Their responsibility is to act as a screen, and to protect the privacy of individuals and to protect the political secrets and objectives, if you like, of their targets that are not related to the national security. That they have done, and that they will continue to do.
Oral Questions HOUSE OF COMMONS


DURATION OF CHRISTMAS RECESS
Hon. George Hees (Northumberland):: Madam Speaker, my question is for the Prime Minister. In view of the fact that there are a great many matters that are of tremendous importance to the country which must be dealt with immediately by Parliament for the country's good, will the Prime Minister advise the House and the country why it is that this House is to be in recess for a full five weeks instead of being recalled on Monday, January 4, to deal as quickly as possible with revisions that are vitally necessary to the budget, and also with the economy which is sliding steadily into recession every day?


Pierre Elliott Trudeau: Madam Speaker, I am somewhat puzzled by the hon. member. He is making a suggestion which contradicts the motion which was supported by his own party and, I believe, by the hon. member himself, to have an agreed adjournment date to January 25. I imagine if the hon. member voted for that, either silently or vociferously, it is because he has plans to go skiing at that time.


Some hon. Members:: Oh, oh!


REASON FOR LENGTH OF RECESS
George Harris Hees: Madam Speaker, 1 can assure the Prime Minister that I am not planning to go skiing and, if Parliament is recalled on January 4, 1 will be here, as I hope he will.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


George Harris Hees: As the Prime Minister has not made any attempt to give an answer to a very important question, and is quite happy to see Parliament recessed for a full five weeks, when it should be sitting for the last three of those five weeks, will he not admit that the real reason Parliament being recessed until January 25 is the fact that the government is trying to avoid, for as long as possible, the embarrassing questions which the opposition puts to it every day on the worst budget that has been presented to this country for more than 30 years, and on the great harm that is being done to the economy of this country by that simply terrible budget?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, I am sure the hon. member has not forgotten that after the last budget put forth by his party there was a long recess, too.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!
14122

December 16, 1981
Oral Questions


INCOME TAX
Mr. Normand Lapointe (Beauce):: 
Allan Joseph MacEachen: Madam Speaker, the hon. member's question gives me the opportunity to assure him that current policyholders presently in possession of such policies are not affected at all by the tax measures in the budget. The system of accruing taxes will continue for policyholders presently in possession of such policies. This has been a misunderstanding that has been widely conveyed, namely, that somehow the tax treatment of current policyholders would be changed. That is not the intention.
1 should add further that I have had consultations with representatives of the insurance industry, and certainly in my discussions with them they have acknowledged the particular effort of the budget to prevent the use of policies for tax avoidance or for tax deferrals. But they have raised the special question of the tax treatment in the future of new whole life policies. I have undertaken with them to continue the discussion, and they have undertaken to provide further information and to make further suggestions. That is the process under which I am operating at the present time.


DEVELOPMENT OF TAR SANDS PROJECTS IN ALBERTA
Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, my question is for the Prime Minister and it involves government policy on the tar sands. In light of the fact that Canadi-anization seems to be at the heart of government policy on energy, and in light of the fact also that the Alberta-Ottawa agreements are at the heart of the new policy, and with respect to those agreements both Mr. Leitch for Alberta and the federal minister of energy here have said there is enough money in the agreements for the oil companies to develop the tar sands, why is the minister now negotiating with Alberta and with the oil companies to give more money to foreign-con-trolled oil companies to develop those tar sands?


Pierre Elliott Trudeau: Madam Speaker, I do not remember the hon. member or his party supporting the energy policy of the minister, and it is obviously true that some of the corporations on the other side do not support his policy, but in the same way as he has listened to representations from members of that party he is probably now listening to representations from members of the tar sands corporations.


REQUEST THAT ADDITIONAL FUNDS BE PROVIDED FOR CONSERVATION
Ian Gardiner Waddell: Madam Speaker, surely the Prime Minister must understand that he is being inconsistent in policy on this matter. Let me put another question to him that is perhaps more in his realm. The fact is that these projects are now going to cost something like $13 billion a project-$26 billion for Cold Lake and for Alsands- by foreign controlled companies. The government has been sitting on the Energy Alternatives report for months and has done nothing about it. As a matter of government policy would the Prime Minister be prepared to put more money into and more emphasis on alternates and on conservation, especially in light of the fact that we have some evidence now that Canadians are starting to respond and conserve energy? Is he prepared to put more government money and energy into that and perhaps less into the tar sands development by foreign-con-trolled oil companies?


Pierre Elliott Trudeau: Madam Speaker, the oil sands, as the hon. member knows, are a very important part of the reserves on which Canada's energy self-reliance will depend, and it is important that those projects proceed; it is important that they proceed on a basis that would be profitable to the Canadian consumer, making it worth while for the producers in effect to produce that oil. That is the substance of the matter.
The hon. member, as usual with his party, always has suggestions for more spending, but I can assure him that in so far as alternate energy is concerned, and in so far as conservation is concerned, this government has already made those an important part of its policies. Once again the hon. member is in the comfortable position of criticizing everything we do, always ending up by saying we do not do enough of the very thing he is criticizing.


THE BUDGET
Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question to the Minister of Finance is supplementary to a question asked by a member of his own party. The minister announced a clear policy that involved the taxation of the accrued income on life insurance policies issued in the future. Is the minister telling the House of Commons that he is
December 16, 1981

now considering pulling back from that policy announced in the budget?


Allan Joseph MacEachen: No, Madam Speaker. What I have said, in order to clarify the situation, is that insurance coverage presently in effect is not brought under the new tax regime proposed in the budget. What 1 have said is that I have had representations from the insurance industry which has recognized that the provisions and the practice which existed prior to the budget provided significant opportunities for tax avoidance and deferrals by high income individuals. They were quite prepared to co-operate and to draw a line between that group and those who may be in possession of whole life insurance, and we undertook to further our consideration of that problem, but no decision has been taken as to any alteration at the present time.


Charles Joseph Clark: Madam Speaker, with regard to that clarification, and just to translate it into English, it means that the minister has decided to change part of the policy he announced in the House of Commons but he will not tell the House of Commons what part of the policy he intends to change, or how he intends to change it.


MEDICAL AND DENTAL PROGRAM BENEFITS
Charles Joseph Clark: Madam Speaker, I want also to ask the minister a question supplementary to that posed by my colleague, the hon. member for Rosedale. The minister will know that yesterday his colleague, the Minister of National Revenue, indicated that the government of Canada has a policy on parking lot benefits. They are not going to be taxed. That is the policy announced by his colleague. Yet the minister, if 1 understood correctly, indicates that while they have a policy on parking lot benefits they do not have a policy yet as to whether they are going to impose taxes on employee benefits respecting dental care and other health and welfare services which are now part of contracts and which affect, in the construction industry alone, some
450,000	Canadians. Those people might be denied the opportunity to take advantage of medical and dental care programs.
Will the minister tell the House of Commons why in his priorities he puts parking lots ahead of the health and dental care of 450,000 Canadians working in the construction industry?


Allan Joseph MacEachen: Madam Speaker, I think the hon. member has introduced the subject of parking lots. 1 have never discussed parking lots in the House of Commons, so I do not know what the relevance is. 1 have stated in the budget the tax treatment of employee benefits, to introduce similar treatment to all employees in the country. That concept of justice does not appear to sit well with the Leader of the Opposition. Well, that is his responsibility.
Oral Questions


STATEMENTS MADE BY MINISTER OF NATIONAL REVENUE
Charles Joseph Clark: Madam Speaker, let me ask the minister whether the Minister of National Revenue was speaking the policy of the government yesterday when he said the government would not be having its policy apply to parking lot benefits, that it would not be applying to servicemen in respect of flights back to Canada or in relation to other specifics he mentioned in the House of Commons? If the Minister of National Revenue was speaking for the government on that matter, would the Minister of Finance give consideration to allowing the Minister of National Revenue to speak to the question of the health and dental care packages that the minister now proposes to deny to approximately 450,000 Canadians working in the construction trades?


Allan Joseph MacEachen: Madam Speaker, the Leader of the Opposition is quite confused about this whole area, which is evident from his questions.


An hon. Member:: We heard him say it.


An hon. Member:: Read Hansard. He said it.


Allan Joseph MacEachen: There were only two items mentioned in the budget with respect to this particular subject, namely, board and lodging, and transportation passes. No other subject was raised in the budget. All the other items which have been thrown into public debate have arisen from speculation in the newspapers and other media-[DOT]


An hon. Member:: From your colleague, the Minister of National Revenue.


Allan Joseph MacEachen: -and from questions raised by the members of the opposition. It has not been raised in the budget. The question of employee discounts has not been raised in the budget. The question of parking lots has not been raised in the budget.


Mr. Epp:: Ask Rompkey.


Allan Joseph MacEachen: The question of alleged taxation of clergymen has not been raised in the budget.


An hon. Member:: What about dental plans?


Allan Joseph MacEachen: Madam Speaker, all of these questions have been raised by members of the opposition who are drawing conclusions which are not justified by the budget proposals.

December 16, 1981
Oral Questions AGRICULTURE


NATIONAL BEEF STABILIZATION PROGRAM
Mr. Bill McKnight (Kindersley-Lloydminster):: Madam Speaker, my question is for the Minister of Agriculture. My question is with regard to the national stabilization plan for beef which the minister has so often repeated is necessary. 1 am not talking about a supply management program, I am talking about a national stabilization system. Has the minister had communication with the province of Saskatchewan regarding the implementation of national beef stabilization program?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, I do not know what the hon. member means when he asks if 1 have had communication with the province of Saskatchewan. I have an office in Regina and we are in communication with them every day. I do not know how long back he wants to go, whether it is the full eight years 1 have had the office there, or not.
Yes, we had communication as late as a week ago today when the minister of agriculture for Saskatchewan was here. I am sure the hon. member knows that they have initiated a provincial program. They, too, want some kind of national program, but they want it their own way. We proposed in 1977 a 100 per cent income insurance program.


Some hon. Members:: Oh, oh.


Eugene Whelan: They do not want to hear about that, Madam Speaker, because they say that we did not offer them anything. We offered them a plan that guaranteed 100 per cent of the cost of production. They turned it down in Saskatchewan.


INQUIRY RESPECTING CONSULTATION WITH SASKATCHEWAN
William Hunter (Bill) McKnight: Madam Speaker, the Minister of Agriculture can answer my supplementary question with a yes or no. Has the minister consulted with the province of Saskatchewan within the last two to three weeks in order to implement a national beef stabilization program and, if so, has Saskatchewan agreed to accept the proposal?


Eugene Whelan: Madam Speaker, the hon. member knows very well that we have sent out 142,000 letters to beef producers in Canada. They are still coming in by the thousand. We have not put them through the computer to see what the response is. The agriculture committee in the other place has just finished hearings. Senator Hays, the chairman, will be making recommendations. I have a two-person committee who has studied all the reports on beef marketing, etc. It will be sending in a report. As soon as all that is finished, we will be presenting a report to the Parliament and people of Canada.


EXTERNAL AFFAIRS
John Edward Broadbent: Madam Speaker, my question is for the Secretary of State for External Affairs. The minister is aware of the unanimous report tabled by the 15-member sub-committee yesterday on Canada's relations with Latin America and the Caribbean. In that report they approached the important question of elections in El Salvador from the fundamental perspective of human rights, stressing that in the present circumstances of "murders, tortures and disappearances" the circumstances are not right for democratic elections. Does the minister now agree that the unanimous recommendation contained in this report that there first should be negotiations between the parties involved in the conflict, then a supervised cease-fire, and finally an internationally supervised election, should be the order of priority?


Some hon. Members:: Hear, hear!


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, the report of the committee is one of great interest to members of the House and to government. I admire the idealism of the members of the committee.


An hon. Member:: It is called democracy.


Mark R. MacGuigan: In many ways, we share that idealism. However, the situation with which we are confronted is not whether we approve of something which another government might do, or whether we do not. The government of El Salvador has already called elections for a certain date, so the hypothetical situation which the members of the committee have set up, which would reflect the ideal, is not the one which we face in reality. Therefore, we have to make a decision in the real world as to what we will do in response to this situation.
We have continually said that we favour a political settlement and negotiations among the parties. We have even offered to make our territory available for such negotiations. We will continue to pursue that line. We will do our best to influence El Salvador and the rebel forces, both of whom I will be meeting shortly, in the direction of a peacefully negotiated settlement. It is not for us to interfere in the internal affairs of another country and to determine the manner in which one of their election campaigns will be run. We can give advice, and we will.


Some hon. Members:: Hear, hear!


REQUEST THAT GOVERNMENT ATTEMPT TO PROMOTE NEGOTIATED SETTLEMENT
John Edward Broadbent: Madam Speaker, the minister says that it is not for the Government of Canada to approve. I point out to him that several times in this House in the past that he has given approval for elections at this time. Therefore I ask the minister, following the unanimous report from members of all parties, and the lead given by the Presidents of both France and Mexico, as well as the 632 to 43
December 16, 1981

vote by the Inter-Parliamentary Union Conference saying that elections now would be totally inappropriate, will the minister offer assurances to the House that he will make a determined effort to obtain a negotiated settlement between the two parties involved in this conflict, and then set the stage for democratic elections?


Mark R. MacGuigan: Madam Speaker, 1 do not know why the hon. member cites the authorities which he thinks he has. I do not know why he does not look at the vote of the Organization of American States.


An hon. Member:: Almost all of which are dictatorships.


Mark R. MacGuigan: Only last week they voted 22 to 3 in favour of the election to be held in El Salvador. My comments to which he refers were made at an earlier time when conditions of the election were still to be determined, and we had hopes that more of the usual guarantees would be present. Subsequently we endeavoured to ensure that they would be present by proposing that negotiations take place between the parties. We will do our best to influence the parties in El Salvador in that direction.


AGRICULTURE
Hon. Roch La Salle (Joliette):: Madam Speaker, my question is directed to the Minister of Agriculture. The minister is no doubt aware of the concern among dairy producers, and of the possibly harmful effects, both for the consumer and for the producer, if milk subsidies are not maintained. In the circumstances, could the minister inform the House today whether he can give the dairy industry the assurance that the subsidy program will remain the same as it has been for a long time? 1 feel that the dairy industry needs a reply by December 31.


Eugene Whelan: Madam Speaker, the hon. member knows as well as 1 do that the dairy review is still under way. By his wish to see the program continued, the hon. member shows that he agrees that the dairy program has been a very good one. 1 am not in a position to tell him, or anyone else, what will be the new program. 1 can only tell the hon. member that we will make sure that it is a very good program for the dairy farmers of Canada. They want a good program and we want a good program.
Point of Order-Mr. Clark


INQUIRY WHETHER FIVE-YEAR AGREEMENT WILL BE SIGNED AND WHETHER $2.66 SUBSIDY WILL BE MAINTAINED
Roch La Salle: Madam Speaker, the minister may wish to reassure dairy producers, but he is certainly not doing so with the kind of answers he is giving today. The minister knows perfectly well that the Dairy Producers' Federation has to have his signature on the five-year plan. Can the minister inform us today whether he will sign the five-year plan by December 31, and also, can he inform us whether he has personally recommended that the subsidy be maintained at $2.66 per hundredweight?


Eugene Whelan: Madam Speaker, it is not a problem with us signing. At the present time it is a problem of getting all the provinces to sign that agreement. Some provinces have a concern about increasing their production for the domestic needs in their area of jurisdiction. They have not all agreed to sign that. That suggestion has been made to them. We have no problem with it. It does not necessarily have to be signed to continue on with the program. Some changes have been made by the majority of the producers and the provincial governments across Canada. The dairy commission has been negotiating that with the provinces.
I met with one of the dairy commissioners last week. I believe there are two or three provinces that have not yet signed because they have certain reservations about parts of the agreement. I remind the hon. member that we have the best dairy policy in the whole world, and he knows that.

[ Translation]


PETITIONS
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the table reports of the Clerk of Petitions stating that he has examined the petitions presented by hon. members on Tuesday, December 15, 1981, and finds that they meet the requirements of the Standing Orders as to form.



POINTS OF ORDER


Charles Joseph Clark: Madam Speaker, I rise on a point of order to draw to the attention of the Minister of Consumer and Corporate Affairs (Mr. Ouel-let) an inaccuracy in a statement he made to the House which

December 16, 1981
Point of Order-Mr. Clark
I am sure he offered to us involuntarily and will want to retract in accordance with your ruling yesterday. In relation to urea formaldehyde foam, the minister said yesterday and I quote:
[ Translation]
... the quality of this product was first questioned under a Conservative government. Nevertheless, the Conservatives did not ban the product while they were in power...

The minister knows very well that on August 4, 1978, Dr. Richard Viau, acting head of the chemical and fire safety program of the minister's department, issued a warning to Canadians through the medium of the public press about the dangers connected with UFF1. Now that this has been drawn to his attention and now that I am prepared to indicate that I believe his misrepresentation to the House yesterday was not intentional, will the minister take the opportunity to set the record straight?
[ Translation]


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Madam Speaker, the argument of the Leader of the Opposition is based on an interpretation of the comments made by Dr. Viau. He is quoting a journalist, who, according to Dr. Viau himself, had misquoted him. As for my statement of yesterday that the Progressive Conservative government had an opportunity to deal with this product when it was in power, I may remind the Leader of the Opposition that on November 18, 1979, on a television program called Market Place, the commentator, Mr. Paul, who was discussing problems caused by UFFI. said the following, and 1 quote:

With Dr. Anderson's concern in mind and the victim's concerns in mind, 1 went to Ottawa this week and showed our report to two federal ministers, the then Minister of Consumer and Corporate Affairs-
Today the hon. member for Durham-Northumberland (Mr. Lawrence).
-who said that because the foam is mixed on site it falls under the municipal and provincial jurisdictions for control of licensing and installation. Secondly, I went to the Minister of National Health and Welfare-
Today the hon. member for Rosedale (Mr. Crombie).
-who said, responding to the request and the questions of the commentator, he had a suggestion. If you think you have a problem, first see your doctor. Then let his ministry know about it.
That is what two ministers of the then Prime Minister did. [Translation]


Madam Speaker:: Order, please! In my opinion this is not a point of order. I thought the minister wanted to set the record straight, and that is why I gave him the floor, but this is, in fact, a debate.



MR. WENMAN-REQUEST THAT PETITION BE READ AND REFERRED TO COMMITTEE

Mr. Robert Wenman (Fraser Valley West):: Madam Speaker, I rise on a point of order relating to your acknowledgement that the petitions were in order. I would ask that the petition I submitted yesterday be read.


Madam Speaker:: I am sure the hon. member knows he needs unanimous consent for the petition to be read. Does the House agree that this petition be read?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Robert Lloyd Wenman: Under the provisions of Section 695 of Beau-chesne's, I would ask that the petition be referred to the committee on rules and procedure.


Madam Speaker:: The hon. member is asking me to proceed to stage two of a procedure when stage one has been refused by the House. If we are to proceed logically, it is difficult for me when directing the debates in the House to proceed to the second stage. I do not even feel 1 can ask the House if it will give its consent to stage two. Since the petition has not been read, 1 do not see how it can be referred to a committee or even how the House can be asked to refer it to a committee.


Robert Lloyd Wenman: Madam Speaker, since it has been received and found to be in order, I say you can refer the subject matter to the committee should you so wish or should the House so wish. Further on the point of order I wish to quote Beau-chesne's Citation 698(2) which reads:
Petitions affecting the House will at once be taken into consideration in accordance with parliamentary usage in all cases of privilege.
The petition yesterday in fact referred to the privilege of reading petitions in the House of Commons. It relates to my privilege directly. Therefore, under that provision I ask that this matter be now taken into consideration.


Madam Speaker:: I have had occasion to tell the hon. member what the procedure is concerning petitions. These are the usages and customs of this House. A petition can only be read if the House gives its unanimous consent for the petition to be read. The hon. member has not received that unanimous consent. He would now like me to proceed to stage two which allows that once a petition has been read, it might be referred to a committee or dealt with in another fashion, again with the unanimous consent of the House.
The petition has not been read because the hon. member has not received unanimous consent. I am afraid that ends the procedures which the hon. member can invoke in order to have his petition dealt with, except in the usual way when it is presented to the House, registered, and recorded in Hansard.


Robert Lloyd Wenman: Madam Speaker, the citation I am referring to now does not refer to whether the petition is read, received, or any other matter. It refers to a petition that has now been


December 16, 1981

received by the House of Commons. It says that when that petition has been received, as it has been received, and when it is examined by yourself and, in fact, you find that it does involve a case of privilege, my personal privilege to read it, then in fact it should be taken into account. It is a different procedure which I have not previously brought to your attention. It is isolated from the other two. I would therefore ask Your Honour to rule on the basis of Citation 698(2).


Madam Speaker:: 1 did rule on that previously at the request of the hon. member. Petitions in the House are dealt with subject to the usages and practices of the House. The discretion to which the hon. member refers has never been resorted to except by unanimous consent of the House.
If the hon. member is asking me to change this custom and usage in the House, I say to him that I will not change it unless a discussion takes place between the leaders of the parties in the House and they include that new practice in the usages of the House. The petition has been received but not read because the hon. member has not received unanimous consent for that. 1 repeat, it has been received. I said that it conforms as to form, as to what is required to present a petition, but I am afraid that ends the procedures which the hon. member can invoke at this time.



ROUTINE PROCEEDINGS


[Stage Direction]
Second report of Special Joint Committee on Official Languages in both official languages-Mr. Corbin.

Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Madam Speaker, I have the honour to present the tenth report of the Standing Joint Committee on Regulations and Other Statutory Instruments in both official languages.
[Editor's Note: For above report see today's Votes and Proceedings.]


PETITIONS
Mr. Gordon Gilchrist (Scarborough East):: Madam Speaker, I have a duty to present a petition on behalf of my constituents. The purpose of this petition, which is signed by
Petitions
642 concerned citizens of Scarborough East, is to protest in the strongest possible way the 761/2 per cent increase in postal rates from 17 cents to 30 cents which is said to be forthcoming immediately when there is absolutely no improvement in postal delivery, nor of any guarantee of continuity of postal service against strike action offered by the Post Office.
The nature of the petition is to demand that the postal rate increase be put off until the aforementioned conditions have been met and greater postal efficiency is achieved by the new Crown corporation. If the need for an increase is proven, then the rate increase should be much lower than 13 cents. It is hoped, in your examination of their petition, Madam Speaker, that you will find it in order and that you will understand and sympathize with the concern of the petitioners for the grievous distress caused by the much too large increase, which will add to the already intolerable cost of living increase being borne today by all Canadian citizens, especially senior citizens. I personally applaud their initiative in bringing this important matter to Parliament's attention.


Mr. Vince Dantzer (Okanagan North):: I also have a petition, signed by 152 residents of Enderby, British Columbia. It is to indicate to the government that the proposed postal rate increase is outrageous and it will affect most low-income families and those on fixed incomes. The nature of the petition is to register with the government the concern of these citizens and to demand rejection of the proposed increase.


Robert Lloyd Wenman: I have the duty and responsibility to present more petitions on behalf of 414 constituents. The nature of this petition is to protest against the high interest rate policy of the government. It is especially burdensome to home owners and those on low and fixed incomes. The purpose of this petition is to demand changes to the policy so that home-owning citizens get the equitable treatment they deserve. They ask that interest rates be reduced and that either mortgage interest rates be made a tax deduction or that limits be placed on mortgage interest increases upon renewal. Their concern about this matter remains unabated, Madam Speaker, because nothing has been done by this irresponsible government to protect and uphold the basic right of home ownership for Canadian citizens and to alleviate this despicable situation. The petitioners hope, Madam Speaker, that in your examination


Madam Speaker:: Order, please. The matter of presenting a petition should not be the occasion to make a speech on the subject. The only thing that hon. members can do is to tell the House what the subject matter of the petition is and to make a statement as to the subject matter of the petition, and that is all. Members are really abusing the amount of time they are allowed to take in presenting petitions.

December 16, 1981
Order Paper Questions


Robert Lloyd Wenman: Madam Speaker, I was just getting to the portion of the petition that prays or hopes. These petitioners hope that in the Chair's examination of their petition, you will find it in order, will heed the urgency and desperation of their plea and will use the discretionary powers vested in your office, Madam Speaker, to allow discussion and referral to a committee at the earliest possible moment.



ADMINISTRATION OF JUSTICE


Allan Frederick Lawrence: for leave to introduce Bill C-645, to abolish writs of assistance.


Some hon. Members:: Explain.


Allan Frederick Lawrence: Madam Speaker, writs of assistance are extraordinary powers which have been given for life to certain officers of both the RCMP and the Department of National Revenue under four federal statutes: the Food and Drugs Act, the Narcotic Control Act, the Customs Act and the Excise Tax Act. This bill will not only abolish the authority for the issuance of writs of assistance, but it will also abolish the use of writs of assistance.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.

[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. 3,098, 3,275, 3,308 and 3,314.


Mr. Clarke: 1.	During the period 1970-80 did Defence Construction (1951) Limited acquire shares or other ownership interest in any other corporation, limited liability company or unincorporated company and, if so, what was the (a) name of the corporation, limited liability company or unincorporated company and any subsidiaries thereof (b) percentage of equity acquired (c) cost of acquisition (d) book value of the acquisition?
2.	Does Defence Construction (1951) Limited have a plan to change the present portion of ownership in any of these enterprises and, if so, what is the plan?


Mrs. Ursula Appolloni (Parliamentary Secretary to Minister of National Defence):: 1. No.
2. Not applicable.


Mr. Cossitt: 1.	Does the medical services of the Department of National Health and Welfare or the Department of National Defence medical centre provide information, documentation or interpretations to the Parliamentary Health Unit or other parliamentary offices in relation to illnesses reported by physicians on form NHW 500 concerning Members of Parliament or parliamentary staff?
2.	To what extent are the operations and activities of the Parliamentary Health Unit concerning Members of Parliament and parliamentary staff supervised, co-ordinated or complemented by any government agency and are the channels and records of any such information, documentation or interpretations supplied or made accessible to other than duly-qualified physicians who are licenced provincially to practice medicine?
3.	Are any of the data collected by or on behalf of the Parliamentary Health Unit or other parliamentary offices transmitted to the medical services of the department and, if so, for each of the past five years, do they reflect increases or decreases in the incidence of illnesses and related sick leave absenteeism and what are the relevant figures?
4.	What disposition is ultimately made and at what point is the disposition made of forms NHW 500 completed by private doctors for their patients who are Members of Parliament or parliamentary staff and what are any statistical records or analyses compiled therefrom?
5.	Will the government include provision in the estimates for qualified physicians to be responsible and accountable for the Parliamentary Health Unit?


Hon. Monique Begin (Minister of National Health and Welfare):: 1. No.
3. The answer to the first part of the question is no. The second part, therefore, does not apply.
2, 4 and 5. These matters fall under the jurisdiction of the Speaker of the House of Commons. The hon. member should therefore address these questions to the Speaker.


Mr. Cossitt: 1.	What is a complete history of employment in the Public Service of Mr. J. R. Gaudet?
2.	Is he presently employed as a counsellor with the Department of Employment and Immigration in Prescott. Ontario, in the constituency of Leeds-Gren-ville and. if so. w hat are his duties?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: I. In so far as the Canada Employment and Immigration Commission/department records indicate, the reply is:
December 4, 1972-Appointed on a term basis as a CR 6 senior examining officer at the Toronto International Airport;
March 30, 1973-Tenure of employment changed from term to indeterminate status;
April 1, 1976-Position and incumbent reclassified to the PM 1 level;
March 3, 1977-Promoted to the PM 2 level as an immigration counsellor, Canada Immigration Centre, Prescott.
2. Yes. Mr. Gaudet is presently employed as an immigration counsellor at the PM 2 level at the Canada Immigration Centre, Prescott.
His duties are to select and counsel prospective immigrants in Canada and to assess applications by Canadian citizens or residents for sponsorship of relatives; to control and prevent
December 16, 1981

violation of immigration laws; to investigate status of persons in Canada.


Mr. Cossitt: |. Is Mr. Maurice Goguen the deputy director of personnel security in the Department of External Affairs and, if so (a) on what date was he appointed (b) what were the names and job designations of all those who played any part in the decision to make the appointment (c) what are all the qualifications that Mr. Goguen possesses for the position?
2.	Was Mr. Goguen formerly a member of the Royal Canadian Mounted Police and was the government aware that at the time he was appointed to the department he was to be charged by the attorney general of Quebec, as a result of the Keable commission report?
3.	Is the government aware that he was one of eleven persons charged by the Quebec justice department with conspiracy and breaking and entering?


Mark R. MacGuigan: 1. Mr. Goguen is a deputy director of the security division, and responsible for personnel security, in the Department of External Affairs.
(a)	April 21, 1981.
(b)	The position was filled by means of a competition, which Mr. Goguen won, held under the Public Service Employment Act and regulations; the following officials comprised the selection board: Miss R. Bernier (chairperson), Public Service Commission; Mr. A. P. Sherwood, director, security division, Department of External Affairs; Mr. J. P. L. Bibeau, deputy director, security division, Department of External Affairs (on loan from the RCMP).
(c)	Extensive experience in law enforcement and personnel security, supervisory experience, the requisite abilities and linguistic requirements.
2.	Mr. Goguen is a former member of the Royal Canadian Mounted Police. At the time of his appointment, no charges had been laid against him.
3.	Subsequent to his appointment, the attorney general of Quebec laid charges against him. The government is aware of this development.


David P. Smith: 1 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 be allowed to stand?


Some hon. Members:: Agreed.


Mr. McKinnon:: Madam Speaker, I would like to ask the Parliamentary Secretary for the seventh time what is holding up question No. 2035 and question No. 2519, which are now some nine and eleven months old. The Parliamentary Secretary has assured me on half a dozen occasions that he would take notice of my representation and make inquiries, but he has never been able to give me any of the results of his inquiries. Will the Parliamentary Secretary tell me if they are
Motions for Papers
held up in the Department of National Defence, the Department of Transport or at the Privy Council office?


David P. Smith: Madam Speaker, I have made inquiries as a result of previous representations. 1 will continue to make further inquiries and hopefully I will be able to provide an answer to the hon. member before too long.


Arnold John Malone: Madam Speaker, 1 should like to ask the Parliamentary Secretary to the President of the Privy Council (Mr. Smith) when he intends to answer question No. 2410 which has been on the Order Paper since April of this past year, which is a period of some eight months, and especially in light of the fact that it was a question directed toward administration within the Department of Agriculture and on which the Minister of Agriculture (Mr. Whelan) in today's Ottawa Citizen is making comment by specifically naming me, talking about the questions that I asked and giving excuses, such as last summer's recess, as part of the reason the answer is not being given. All hon. members know that when we returned to the House this fall there was a long list of answers to questions on the Order Paper because of the summer recess.
I want to know from the Parliamentary Secretary when that question will be answered.


David P. Smith: Madam Speaker, I will look into the matter and see what I can do to expedite the answer to that question.


David P. Smith: Madam Speaker, notice of motion for the production of papers No. 41 in the name of the hon. member for Vaudreuil (Mr. Herbert) is acceptable to the government.
1 ask, Madam Speaker, that the other notices of motions for the production of papers be allowed to stand.


[Stage Direction]
Motion No. 41-Mr. Herbert:
That an Order of the Flouse do issue for copies of all regulations and instructions in the Department of Transport, concerning the publication of tender calls for construction work, including all references to the amount and form of deposits that may accompany such tenders.
Motion agreed to.
Mr. Herbert:: I call motions Nos. 34 and 54, Madam Speaker, and 1 ask that they be transferred for debate.

December 16, 1981
Small Businesses Loans Act (No. 2)


[Stage Direction]
Motion No. 34-Mr. Herbert:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House, copies of all correspondence, telegrams, minutes of meetings and other communications during the last year, between the government and the communities of the Commonwealth Caribbean that relate to the exchange of commodities and technology, the exchange of students, tariff changes and other measures to improve trade, tourism and cultural exchanges between Canada and the Caribbean area.
Madam Speaker:: Transferred for debate.


[Stage Direction]
Motion No. 54-Mr. Herbert:
That an Order of the House do issue for a copy of any agreement signed between the Enterprise Development Board and General Aluminum Forging Ltd. of Hamilton, Ontario, including copies of all communications and minutes of meetings between the two parties prior to the signing of the agreement.
Madam Speaker:: Transferred for debate. Shall the remaining notices of motions for the production of papers stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Tuesday, December 15, 1981, consideration of the motion of Mr. Lapointe (Charlevoix) that Bill C-84, to amend the Small Businesses Loans Act (No. 2), be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Peter Elzinga (Pembina):: Madam Speaker, in speaking to the bill that is before the House today, let me begin by paying tribute to my colleague, the hon. memberfor Cambridge (Mr. Speyer) for leading off the debate for our party and for doing an excellent job of outlining the position of our party in support of this legislation. Let me also share this with the House, that in the short period of time he has been in the chamber his speeches have always made good reading and have always made good sense.
As the majority of hon. members are aware, the amendment will increase the maximum of all loans which may be guaranteed during the two-year period ending June 30, 1982, from $850 million to $1.5 billion. This is an increase of some $650 million on the ceiling which may be guaranteed by the Government of Canada.
Small business plays a vital and essential role in the economic, social and community lives of all Canadians. I should like to share some facts about the small business sector with the chamber in support of the significant role it plays and the significant contribution it makes to the economic wellbeing of Canada. Over 95 per cent of all business is small business. Small business provide jobs for close to 60 per cent of the work force. Two-thirds of all new jobs are created by small business. Small business contributes over 30 per cent to the gross national product. Small business is the largest employer outside government. Agriculture is a renewable resource and is Alberta's number one industry. It is comprised almost totally of small businesses. Small business develops more new products and services, builds more new outlying communities, replaces more imports and generates more exports than any other segment of the economy. The important goal of small business is obvious, but let me review how the Liberal government reacted to this sector.
It has always been my belief that if business were given the opportunity to expand and flourish the way it should, we would have a thriving economy. I have always believed that business was founded on the idea of private enterprise, that if one built a better mousetrap, the world beat a path to one's door. But if one builds a better mousetrap today, the government comes along with a better mouse. There is no better example of that than the recent budget which was tabled in the House on November 12 by the Minister of Finance (Mr. MacEachen). I will have more to say about the budget shortly, but first I wish to review some more important aspects of the small business sector and the vital role it plays in our social wellbeing. Small business provides more funding and volunteer public service than any other source. It fills the needs of all persons, whether they be residents or visitors. Small business is independent and self-supporting. For every new enterprise in the community, the spin-off benefits create additional new enterprise. Small business provides the greatest source of improved skills training, more than any other segment of the business world. It unites the spirit of every community, providing a common bond to all residents. The majority of revenue produced by small business is recycled within its own trading area. Small business is responsible for the creation of more competition than any other source. It provides the greatest opportunity for innovation. Small business is truly big business.
It appears that there is a wave of contempt, almost hatred born of ignorance, for the free enterprise system of today; a system sparkplugged by the hope of economic reward which has lifted more burdens from the backs of those who toil than any other system the world has known. Some people today would curtail private property rights; others declare that the word "profits" is synonymous with evil. Both groups have
December 16, 1981

forgotten that profits, property and freedom are inseparable and that one cannot have the third unless one has the first two.
It takes a special type of person to become involved in the business sector. He or she faces no regular paycheque or any possibility of ever collecting unemployment insurance. Yet, hundreds of thousands of Canadian men and women are there by choice. They are the small, independent operators who have relinquished most of society's security blankets to take a fling at making it on their own. At times the rewards can be great, but most likely the average business operator does no better working for himself than he would as an employee of someone else, despite the risks he takes. As we know, small business is the backbone of the Canadian way of life. Because of this we as legislators have an obligation to foster a climate which encourages the small business sector. The present Liberal government has fostered a trend whereby the public sector has been playing an ever-increasing role in society. The truth of the matter is that the government violated the principles of the free enterprise system and then blamed the system for its failure. At a time when restraint was required, the government printed more money. When economic restraint was required, it bragged about the country's wellbeing and encouraged "the good life". Now we are paying for these mistakes. We face high unemployment, thanks to the present government not to the free enterprise system. Today we need decision and action, but we are faced with indecision. The government is hoping that the American recovery will pull us out of our economic recession; it hopes that some of their positive responses will spill over into Canada.
We in this party look forward to an over-all policy and economic guidance. We find that hon. members opposite can only talk about economic diversification, but they have no over-all program by which this can be achieved. The government has not stated its policies and does not know the economic consequences of its actions. I feel Canadians wish to get back to basics. They do not expect something for nothing. Indeed, the history of this great nation has shown this to be true. But what they want and expect from government is leadership and guidance.
At this time I think it is noteworthy to review the record of hon. members opposite. Let us consider for a moment what they have done over the last number of years. They have given us record inflation, record unemployment, record trade deficits, record budgetary deficits, record interest rates, record mortgage rates and record high prices. They have contributed to a situation wherein Canada has the highest level of foreign borrowing of any western nation. This is contrary to what they campaigned on during the 1980 election. I should like to review for the record what the Prime Minister (Mr. Trudeau) said in Toronto on January 12, 1980. He indicated that members of the Liberal Party would not simply stand by and let the recession come, that they would fight it and overcome it. He also indicated that they had an economic program for the 1980s which would enhance dignity, create opportunity and provide security.
Small Businesses Loans Act (No. 2)
Let me review what has happened. Economic growth in 1980 was only 0.1 per cent, the worst in 26 years. Productivity fell by 1.5 per cent last year. Inflation has skyrocketed since the Liberals came into power and now stands at 12.4 per cent, the highest level in six years. Housing starts fell to their lowest level in 13 years. Statistics Canada reports that the economy went from bad to worse since the summer and that the deteriorating trend seems to be intensifying. This was indicated in the monthly review. The report also indicated that demand for retail goods and housing, which began to slip in early summer, "will likely be further depressed as employment fell sharply in September and October and as interest rates remained near record levels." It went on to say that the weak national economy has lowered business investment in machinery and equipment. This is the result of destructive Liberal policies, Mr. Speaker.
I sympathize with the Minister of State for Small Businesses and Tourism (Mr. Lapointe). He is living in a policy vacuum. The small business community is slowly becoming aware that he is offering nothing more than lip service. I do not blame the minister himself. 1 blame the government and the Prime Minister for creating a lame duck department which does not have the power or the right to deal directly with the problems and potential solutions of the small business community.
The budget appears to have been influenced by three beliefs. The first belief is that for a private citizen to make money is sinful; the second belief is that there is one law to restrict the governed and another much less restrictive law for the government itself; and the third belief is that governments may increase the tax burden upon the population without limit and without hindrance.
To illustrate this I should like to quote from a paper which was sent to all members of this chamber by the Canadian Federation of Independent Business. The paper includes a letter addressed to the Minister of Finance, which begins as follows:
The tax measures in your November 12 budget are causing and will continue to cause serious damage to the economy and the small business community.
It goes on to say that the proposals of the Minister of Finance are more pervasive and that this time there is no opportunity provided for public input. That is exactly what we on this side of the House are asking for. We want the public to have an opportunity to participate in policy discussions since the budget entails in excess of 160 changes to the Income Tax Act.
The paper contends that the budget will close off access to the risk capital markets for new small business ventures and high growth medium sized enterprises which are the major source of new jobs; it will restrict the cash flow for businesses facing excruciating pressures by financing capital expenditures at high interest rates, and it will also increase the tax burden on investors in small corporations.

December 16, 1981
Small Businesses Loans Act (No. 2)
In addition, the government has gutted the Small Business Development Bond program, which was advocated by this party when it was in government so that the small business sector could further expand and develop. The government has made it more or less a bail-out bond, as the hon. member for Cambridge suggested yesterday, rather than a development bond; it has increased taxes on the small business sector; it has reduced by half the capital cost reduction; it has destroyed most possibilities of employee stock ownership, and it has limited the provisions whereby one could deduct interest for business purposes.
If this government truly wanted to do something for the small business sector which would be considered constructive not only by that sector but by all areas of our community in Canada, it would reduce the record high rates of interest and the high rate of inflation. More important, it would offer Canadians an efficient postal service. The small business sector relies on this very heavily for its cash flow.
The record of the government speaks for itself, Mr. Speaker. If we compare the bankruptcies in November of this year with those that occurred in November last year, we find they have increased by some 50 per cent. If we compare the first nine months of 1981 to the first nine months of 1979, we see that in the primary sectors bankruptcies have increased by 108 per cent and that in the farming sector bankruptcies have increased by 133 per cent.
When a certain small town was having its annual charity drive, the chairman for that year went to a leading citizen of the town to solicit a contribution. He said that the record indicated the citizen had never contributed to the charity although he had an income of some $90,000 per year. The citizen replied as follows: "Do your records also show that my widowed sister with four children has no means of support? Do they show that my brother who was wounded in World War I is totally disabled? Do they show that I have an aged mother who is unable to provide for herself?" The canvasser replied that the records did not show this information, and the citizen said, "Well, 1 don't do anything for them so why should I do anything for you?" That is exactly what the Minister of Finance is saying to the small business community of this country, Mr. Speaker. He is saying, "I am not doing anything for Canada so why should I do something for your sector?"
If we want the small business sector to survive in our society-and I am sure we all do-then the federal government must take immediate action. The small business community is what the free enterprise system is all about; it is what this country was built upon and it is the base upon which this country will prosper.
My concern regarding the problems of the small business sector is so genuine that I hope the seriousness of those problems can be dealt with by the government. The small business sector cannot wait any longer; it has waited long enough. I am not talking about government intervention but about governments fostering a productive climate for the small business sector.
It cannot be denied that public opinion has been moulded into an anti-capitalist mentality. John Kenneth Galbraith who, in my opinion, is living proof that economics is an inexact science, has written a book entitled "Economics and the Public Purpose". He has researched the market arrangements of our economy and says it has given us inadequate housing, a terrible mass transit, poor health care and a host of other miseries. Mr. Galbraith comes out from behind the white cloak of liberalism and openly proclaims that the only answer to our problems is socialism. He deals in fairy tales just as do our Liberal friends opposite.
Under this system of ours, in the early 1900s the majority of the people in this country lived below what we consider to be the poverty line. Two-thirds lived in sub-standard housing. Today, both figures are less than 10 per cent. Ninety-five per cent of the people in Canada have a daily minimum intake of nutrients essential to maintain health, 99 per cent of Canadian homes have gas or electric kitchen appliances, and 96 per cent of the homes have TV sets. Thousands of automobiles and trucks are owned by Canadians. Some people will point out that this is evidence of our materialism; but we have been the most generous of people. We have shared our wealth widely. We support with voluntary contributions churches, libraries, symphonies, operas and non-profit theatres.
If Mr. Galbraith is right and socialism is the answer, we do not have to theorize about it; we have a concrete example we can look at for comparison. We can be just like that great nation, Russia, rich in natural resources, with millions of capable people and 60 uninterrupted years in which to fully implement socialism in their nation.
As 1 say, we could be like them, but it will require just a little doing. We would have to cut our paycheques by 75 per cent, move thousands of our workers back to the farm, abandon two-thirds of our steel-making capacity, destroy thousands of TV sets, tear up miles of highway, junk 19 out of 20 automobiles, tear up miles of our railway tracks and demolish 70 per cent of our houses.


Mr. Gustafson:: They don't produce enough food to feed themselves.


Peter Elzinga: Then we would only have to find a capitalist country which would sell us wheat on credit so that we would not starve.
In my brief presentation, I attempted, more or less to outline my philosophy concerning what should be done for the small business sector. However, let me just state once again in closing that we do support the intent of this legislation. We on this side hope that our Liberal friends opposite would take a more constructive and positive approach in dealing with the small business sector in Canada.


Some hon. Members:: Hear, hear!


Mr. Bruce Lonsdale (Timiskaming):: I thank Your Honour for the opportunity to speak on the amendments to this bill. I
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believe these amendments are of fundamental importance to small business in Canada. To date, there have been over
91,000	applications for loans under this program which was introduced in 1961. That has provided much help for small business and many jobs for Canadians. However, the more important numbers are those which show the increasing demand in the last year alone. In response to these demands, there has been an increase of 48.6 per cent in the demand for loans and funding under this program. Indeed, in the last three years since 1977, there has been an increase in demand for these funds in the neighbourhood of 400 per cent. This indicates that the program is very popular with the businessmen and business women of Canada.
Since 1961, the government has loaned out $1.8 billion under the Small Businesses Loans Act, a program which has been administered with less than six or seven staff members in the Department of Small Businesses and Tourism. It is a remarkable record for the administrative procedure of any government, and perhaps of any department in this government, that less than seven people have administered all those funds since 1961. I think it is a remarkable tribute to the program's operation, the simplicity under which it was established, and the structure which allows small-business men easy access to this kind of insurance.
We hear criticism from many quarters that the government is giving these guarantees but that it is not doing enough for the small-business men. However, we should look at where those guaranteed funds under the Small Business Loans Act went in 1980 alone. Forty-seven per cent of the guaranteed funds went to the service industry and 25 per cent of the funding went to assist small-business men in the retail trade. Twelve per cent went to the energy sector; nine per cent went to the transportation sector; ten per cent went to the communications sector of small business; and a total of five per cent went to wholesale trade and construction. One will see, considering the funds administered in 1980 alone, that there was a wide dispersement of assistance, protection and guarantees for loans across the small business sector.
Where did the benefit of this funding go, and how did it assist small business? About 58 per cent went to the purchase of movable equipment, equipment which these small businessmen were able to use. That loan, as it spread through the economy, generated a tremendous amount of work, a tremendous amount of jobs, and a great deal of buying power which assisted small businesses that were not even included under the small business loans provisions. There were improvements and modernization of plants, equipment and premises, including construction and the purchases of premises for modernization purposes, in the neighbourhood of 29 per cent. Eleven per cent went toward the purchase of fixed equipment, and approximately 1.8 per cent went toward the purchase of land.
Since 1961 when this program was introduced, the default has been less than one hundredth of one per cent. The government had to pay $9.7 million in defaults as a result of guarantees that it gave under the Small Businesses Loans Act.
Small Businesses Loans Act (No. 2)
That is a remarkable tribute to the Canadian government in that it had sufficient confidence in our Canadian businessmen to know that they would take out responsible loans which they would be able to repay, and that they could manage their businesses to the extent that the government's guarantees would never be called by the banks. Less than one hundredth of one per cent of loans guaranteed by the government were actually in default. Until December 31, 1980, the government only had to come forward with $9.7 million to repay loan guarantees. Therefore, I want to say that that is certainly a remarkable tribute to the foresight of the government, but it is an even more remarkable tribute to the management, skills, productivity and incentives of small business in this country.
We have spoken about the recent budget and what it has done for small business in this country. We have heard a great deal of criticism to the effect that the budget has not done anything for small business. I want to speak about the Small Business Development Bond program itself.
The Small Business Development Bond program has continually been extended. First of all, it was introduced and wasto close out on March 31, 1980. That time was extended to December 31, 1981. In November, the Minister of Finance (Mr. MacEachen) introduced his budget which included an extension of the Small Business Development Bond program for another full year. In essence, the government has responded to those needs.
However, let us look at some of the things in the budget and what has been done. The small business deduction, the annual limit on income qualifying for the special low tax rate for small business corporations, will be raised from $150,000 to $200,000, and the cumulative limit will be raised from $750,000 to $1 million. To target the benefits of this incentive to the growing small businesses, corporations will no longer be able to maintain their eligibility of this benefit by paying out dividends. That provision has been extended to a point where one could accumulate up to $1 million in income, and the annual limit is up to $200,000. That will provide $50 million in assistance to small business in this country.
The other item about which we spoke was the two-year extension of the corporate surtax which will now apply to corporate income which qualifies for the low small business tax rate. We have now increased the limit to $200,000 and the cumulative limit has been increased to $1 million. Those small businesses will now be eligible for the low tax rates for another two years, which will contribute over $100 million in tax savings to small-business men over a period of two years. This will enable approximately 175,000 corporations to qualify for the lower tax rate.
Therefore, there are certainly some significant and major incentives in the budget which will assist small businesses. Indeed, the structural change in the federal sales tax provisions will mean that tax will be applied at the point at which goods are sold for retail rather than at the manufacturer's level. The change will take effect on July 1, 1982, and the tax rate will be reduced from 9 per cent to 8 per cent to keep the revenue yield

December 16, 1981
Small Businesses Loans Act (No. 2)
unchanged. What does that mean? What is the impact of that change?


Some hon. Members:: Oh, oh!


Bruce Lonsdale: I notice that the hon. member for-


John Horton McDermid: Brampton-Georgetown!


Bruce Lonsdale: -Brampton-Georgetown (Mr. McDermid) laughs at that. However, one further, important advantage of that switch is that wholesalers will be able to apply their inventory of goods without the payment of the sales tax. It is estimated that this will lower their inventory financing. We have spoken about inventory financing and the tremendous costs of interest rates to inventory financing. It is estimated that inventory financing requirements will be lowered by as much as $400 million. I think that is a considerable and important incentive which will lend assistance to the small-business men who are trying to maintain a reasonable inventory control at a cost they can continue to finance.
One talks about flexibility in government and how the government responds. I have just given three examples showing how the government has responded to the interests of small-business men in this country. However, let us look precisely at the Small Businesses Loans Act which was introduced in 1961. Since then, there have been five significant changes in that legislation to respond to the needs, requests and demands of the small business community in this country. Since 1961, there have been a number of changes to the legislation, of which the most significant are as follows: In 1974, first of all, the maximum loan amount outstanding to any one borrower was increased from $25,000 to $50,000, and a small business was defined as one with a gross revenue of less than $1 million. Again, in 1977, the legislation was amended so that the total amount permitted to be outstanding by the borrower was increased from $25,000 to $75,000, and the size of an eligible business was increased to $1.5 million in gross revenue. Again, on February 8, 1978, the interest rate formula was changed to permit a lender to charge a maximum of a bank prime plus one per cent, and the rate was permitted to float with the prime rate for the term of the loan. However, this time the criteria defining eligible businesses was widened even further to include the real estate business, which was booming, and the insurance agents and brokers. Again, in 1978, the administrative responsibility for the act was transferred from the Department of Finance to the Department of Industry, Trade and Commerce, so the board could be more closely attached and attuned to the business community. That was a significant move in 1978. Again, on July 1, 1980, the maximum total outstanding available to a borrower was increased from $750,000 to $1 million. I do not think I have ever seen such flexibility on the part of the government. Nor have I ever seen a mechanism whereby the government actually responded to the small business needs and concerns as it does with the Small Businesses Loans Act.
We are making recommendations today to allow the Small Businesses Loans Act to raise the loan ceiling so there will be adequate funding over the next year and a half.
I think it is important to get on with this bill so we can allow our small-business men access to the kind of funding they require. What we have to do now is to stop the shallow criticism of this important legislation, legislation which has contributed $1.8 billion in small business loans assistance to the small business community in this country. It would be much more helpful to the government if members opposite would look at the positive things which the government has been doing for small businessmen, not only in the area of the Small Businesses Loans Act but also in the area of the $550 million worth of incentives outlined in the November 12 budget. These incentives will ease the tax burden on small business corporations across this country.
Bill C-84 is the first step of many steps that have been taken in the past in the small business financing review program and it is now being reviewed by the federal cabinet. We hope to have that review in the very near future so that we can provide even more incentives and assistance to the small business community in Canada. If we do not approve this bill today, the spin-offs needed in other manufacturing sectors will not occur in the next six months. It is important that we continue to have this program financed to allow the small business people in Canada the opportunity to have access to funds that will hold them over until the small business financing review is complete and a new policy with respect to small business financing is announced by the cabinet in the new year.
I want to say that the small businessmen and women of this country need this money. They need this extra funding to allow them to continue to create the jobs that this country needs.


Mr. Ron Stewart (Simcoe South):: Mr. Speaker, it is a pleasure for me to rise to support Bill C-84. As we are all aware, the small business loan had its genesis in the government of the late John Diefenbaker. The man who was responsible for the legislation there is in the House today, namely the hon. member for Northumberland (Mr. Hees). He was then minister of industry, trade and commerce. I might add that he was the best minister of industry, trade and commerce that this country has ever seen. The hon. member for Northumberland saw the picture from all sides of the spectrum, as a manufacturer, as a politician, as a member of Parliament and as a minister. I understand, although I was not here at the time, that when he was minister, one of his first acts was to call all of his trade commissioners together. He took them home for a pep talk and gave them some plays from the bench, which are so badly needed by this government. To each of the trade commissioners he gave a set of cuff links with the initials "YCDBSOYA" imprinted on them, which translates loosely "You can't do business sitting on your posterior". The hon. member for Northumberland knew the name of the game. The name of the game is sales, competition, profits, as little
December 16, 1981

government interference in the marketplace as necessary, and as much help to small business as the government could give.
I would like to commend my colleague, the hon. member for Pembina (Mr. Elzinga) on his excellent interpretation of what small business is all about. I would like to commend my colleague, the hon. member for Cambridge (Mr. Speyer) who is responsible for this bill and who has followed the traditions of the hon. member for Northumberland.
Bill C-84, although needed, is synonymous with this government's ineptness. As usual, it is too little and too late. This bill evidences a paltry increase to the most important segment of our society, our small business. If the government wanted to do something really useful, it should have expanded the amount available to small business along the lines of the business development bond.
To equate the problems of small business, we must look at the recent budget and the horrendous implications it has on the middle class. The middle class is not the rich class but the class which represents small business, the people who make our nation.
Hon. members have heard figures quoted a few moments ago by the hon. member for Pembina. He demonstrated just what small business means to this country of ours. This budget is aimed cruelly at the middle class and the small business person. It is another plank in the socialized doctrine being enforced by the government in power on the Canadian people. It will damage our middle class. It will take us unmistakable towards the elimination of the middle class. It will make us a socialist, classless state, more dependent upon the government. This budget takes us away from free enterprise which built this nation. The government's only role in the business world should be to aid its endeavours, not to tax it out of existence, not to reward those with little or no incentive to work and produce, while punishing those who work, innovate, achieve and produce.
This budget is a destroyer of initiative. It is a destroyer of any form of elitism. It is the work of warp-minded bureaucrats who cannot define the meaning of the word risk and who have never met a payroll. I am including the so-called finance minister, unfortunately. Any self-respecting minister of finance in the federal system of government that we know, any self-respecting minister who has had such public opposition of the budget and its contents from the public and from business, any minister who has made such wide-ranging changes in the tax system without consulting small business, any minister who has made a $600 million mistake, any minister who has made three major changes as an admission of error, would and should resign.
An article that appeared in the Edmonton Journal for December 11, 1981, has as its heading "The budget disaster". Edmonton is one of the great bastions of our free enterprise system. My son-in-law has moved there recently taking my daughter with him. He happily toils with the Bank of B.C., and I am very proud of that. The article reads:
The budget Mr. MacEachen read a month ago portrays a vision of an homogenized, grey, spiritless Canada where initiative is discouraged, thrift is
Small Businesses Loans Act (No. 2)
punished and the enterpreneurial spirit is laughed at by visionless men with tight little smiles.
The budget does three things:
It brings in major tax reform without public debate-
It proposes punitive legislation that is retroactive-
It is grossly inequitable. Meant to close the tax "loopholes" used by wealthy Canadians, it helps them by reducing maximum marginal tax rates from 64 per cent to 50 per cent.
This article goes on to point out why we should have MURBs. Without them $500 worth of condominium construction will be killed. It points out the errors of income deductibility which destroys a valuable incentive to invest in Canada. It goes on to point out the taxing of life insurance. This bleeds the source of capital for the mortgage and construction industry.
I have not received ten letters, nor 20 letters, but probably up to 100 letters from the insurance industry. 1 am sure all members of the House have received a similar letters in similar numbers. It is incredible to see what has happened to the small business people and other Canadians by the unforeseen surprises in this budget.
If this budget is hurting the rich, then I would like to read a letter that I have received just today. It is addressed to the Hon. Allan J. MacEachen. It reads:
Dear Mr. MacEachen,
I am writing to you with regard to my non-registered deferred annuity policy for which I shall be required to report accrued investment income on income tax every three years at a time when my investment income is not available to me, so the tax will have to be paid out of other income.
I have been a clergyman for twenty-five years and have never tried to gain financial advantages in any way during my service in this calling, regarding any call on my energies as my sacrifice for my Lord and it has not been easy for my wife and family who have shared in everything.
However, due to careful management we have been able to set aside a small amount toward our retirement years. (It may interest you to know that after a lifetime of service we can look forward to a very small church pension.) Now I am going to be penalized by having to take some of my current income to pay income tax on money I do not receive.
There are thousands like me, so please, Mr. MacEachen, let's have some fair play. Change your budget immediately.
I say this says it all for the insurance industry, for the pensioner, for the person who has put money away for income later on, and for small business.
There is an improving tax climate in the United States, and the Minister of Finance (Mr. MacEachen) is also ignoring that, but many Canadians are not. This too is disastrous. The changes are being made, as usual, by the government without any public discussion. I urge the Minister of Finance to consider most of his proposals again and to hear the people affected, then change them, not for the sake of change but for the good of Canadians, particularly small-business men.
The proposition to restrict interest expense deductions to the amount of income earned from investments during the year will cut to a trickle the borrowing done by small businesses to invest in productive business enterprises. The 12.5 per cent tax on dividend planning for small business seriously dissuades the common folk like you and me from starting a small free

December 16, 1981
Small Businesses Loans Act (No. 2) enterprise, which is the real genesis of this country. If we want to aid small businessmen then the minister should withdraw these things at once.
Let us consider the Small Business Development Bond program for a second. The Small Business Development Bond is a means to expand, to innovate, to research and develop. This program provides capital for capital expenditures and growth which in turn increases productivity. That is the name of the game, and it is the only way to pay for the expensive social programs that come from the other side of the House. Let us have the programs, but we must have expansion of productivity in order to pay for them. The whole bond structure was changed. Now it helps only those in dire financial straits. What straits! What a statement! The bill was garrotted, gutted and gored. The one real help to small business was the bond, and I suggest the minister should reinstate this program at once.
Hidden taxes on individual Canadians prior to this budget amounted to approximately $100. It is now estimated they will be $200. As a small businessman I have many salesmen driving company-owned cars. These salesmen, contrary to the opinion of the hon. member for Timiskaming (Mr. Lonsdale) who just spoke, will now be charged 2.5 per cent per month for driving their cars for any type of pleasure. What will that do to the big car sales in the riding of the hon. member in front of me from the Oakville area? This is a tax on the capital cost of the automobile, not its depreciated value. This is the way usury is applied to people. Old "greedy guts" government wants more and more tax for its bottomless pit appetite. A salesman making a sales effort and increasing productivity will be taxed out of his skin for his efforts. On the basis of a $15,000 automobile, this works out to $4,500 taxable income, and even at only 28 per cent it is $1,260. That is some reward for productivity. The government is taxing the producer and stifling initiative.
The government is now taxing employee benefit extended health care plans. The Minister of Finance said we were not reading the budget correctly. That is what he said in the House today. That is the way I read it, and I call it folly.
The insurance industry is gnashing its teeth at the unthinking, uncaring tax policies of this government. It is taxing money that has not been received, a tax to be paid with after-tax dollars. I call that a real shame. A person will not be able to have a pension income deduction in a year in which he has made a contribution to an RRSP or a pension plan unless the payment was deducted at source from his income.
Is small business being helped by the discontinuance of the use of income-averaging annuities? This government is eliminating the device for postponing income tax on capital gains as a tax deferral. This measure has been used in respect of the sale of small businesses and family farms and now it is gone. Capital cost allowances have been reduced by half. This again is something that has been an incentive and has helped to make this country grow. This does not help small business. It does not increase productivity and it does not give confidence or inspiration to small business.
Why does this government not do something constructive, such as encouraging profit sharing in small businesses? Why does it not provide incentives so that small businesses will continue to grow in this country the way they should? Small businesses form the backbone of this country. They still provide the most jobs. This industry should not be garrotted, it should be stimulated in order to obtain increased productivity.
This budget will not help export-geared high technology. It does not help resource exploration and it does not help transportation. It does not cut interest costs. Small businesses need help. Small businesses need the Crosbie Small Business Development Bond. This program should be expanded. Small businesses need alternatives which will allow people to buy shares in those small businesses, and small businesses in my view need an incentive with regard to profit sharing. Small businesses need a far-reaching, expansive and imaginative approach in order to show some light at the end of the tunnel for the small-business man. This industry requires this kind of help quickly. Bill C-84 just does not do enough, although we support it.
This is supposed to be a budget in equity. In reality it is a budget of infamy. It is the planned destruction of the middle class. As a past-president of the National Association of Tobacco and Confectionery Wholesale Distributors of Canada I am appalled at the finance minister's decision to impose the excise tax at the wholesale level instead of at the retail level. Again I would draw my remarks to the attention of the hon. member for Timiskaming, because on the basis of what he just said he has a total lack of understanding of what is going on.
As a representative small-business man I would like to speak on this matter at some length because it is a subject that has been almost ignored.
The tobacco and confectionery association, the grocery distributors association and others have forwarded discussion papers to the Minister of Finance, specifically in 1975, opposing this move, as well as the 1977 report of the commodity tax review group. Successive ministers have been advised repeatedly by small and large-business men for the past six years not to do this, but this government taxes, taxes and taxes, ignoring the small-business man. That is what has been happening.
The tax at the wholesale level will create an administrative nightmare for the small wholesaler, and it will be nothing but inflationary. It will hurt the small-business man. The paper burden will be astronomic. The firm I was associated with before entering this area of enlightenment had some 2,000 customers. The invoicing system is not computerized. This change will result in a paper nightmare and will require the addition of more employees to implement. This firm is just one small wholesaler among 300 tobacco and confectionery distributors. This will also apply to 300 wholesale grocers, as well as wholesale hardware people and wholesale building materials people, just to name a few. Up will go the cost of building material because the difference in the tax will have to be added on from the manufacturer to the wholesaler and then to the product. Do not sit there and tell me this is not going to mean increased costs and taxes amounting to millions of
December 16, 1981

dollars to the federal government. The consumer will end up paying again. This move will add millions of dollars to corporate costs, and that cost will have to be passed along to the consumers of Canada.
Like the rest of this infamous, deleterious budget, this move has not been thought through carefully. The ministry has not yet determined how it will put the proposal into effect. Small business wholesalers will have heartaches galore in sorting out the items to be taxed, adding that tax to the selling price, not the cost price, and then having to put out more investment capital to collect the government's tax. This is a senseless business practice. This practice cannot be compared to any now followed by manufacturers, wholesalers and others in this country. Why does the government not collect from the few as it has done previously? In this way it would be easier to administer with fewer wholesale employees. How many more federal bureaucrats will it take to collect this tax and to police it? If the government needs the money, why does it not increase the tax by one half of one per cent, instead of lowering the tax to 8 per cent and placing the burden on the small wholesaler and ultimately the consumer? This whole drill is inflationary. When this tax is removed from the manufacturers, it will be much easier for them to increase prices without the normal protest from their customers, the small business people.


An hon. Member:: What about you in 1979 when you were there?


Some hon. Members:: Oh, oh!


An hon. Member:: Why didn't you change it?


Ronald Alexander Stewart: Let us look at the surtax on the purchase of retail-


An hon. Member:: More jobs for more Liberals.


Some hon. Members:: Oh, oh!
[ Translation]


The Acting Speaker (Mr. Laniel):: Order, please! I wish to remind the hon. member for Bourassa (Mr. Rossi) that if he wishes to have the floor, he must be in his seat.


Ronald Alexander Stewart: I did not understand what you said, Mr. Speaker, but I would say that the hon. member is an expert at the game of "river"; he continually runs out at the mouth. Let us look at the surtax on purchases by retail chain stores from manufacturers. The chain buys at the same price as the wholesaler. The Minister of Finance says he will impose a tax of 1 per cent or 2 per cent on the corporate chains in respect of non-food items. To me, this is a crass admission that the new system is not fair, equitable or right and does not work at the wholesale level.
Small Businesses Loans Act (No. 2)
Tobacco products, however, will be taxed at the manufacturers' level, not at the wholesale level as the rest are. I wonder why that is. In 1980, the federal excise and sales tax was $934 million. This was collected predominantly by four major tobacco manufacturers. It showed them an estimated $5 million profit in cash flow. That is the reason why. They are probably avid supporters of the members on the other side. Imagine the benefit to the small wholesalers if this profit was in their cash flow. It is fish for one and fowl for the other. Obviously it is easier to collect from four manufacturers instead of the 600 or
1,000	wholesalers. However, the government is still willing to collect the balance.
The omission of tax collection on tobacco at the wholesale level is another admission that the surtax at the wholesale level is discriminatory, inflationary, patch-worked and wrong-by a government that is supposed to be a champion of human rights. It is costing independent businessmen millions of dollars.
The whole plan should be eliminated in favour of raising the tax minimally or else by reducing the tax on wholesale sales to independent businessmen to make it equal to the tax on the manufacturers' sales to the giant corporate chains who have every advantage over the independent businessman already.
This budget will have a deleterious effect on investment in industry at a time when we need more investment, not less. It comes at a time when we must have more productivity and employment, when we should be encouraging small business and not penalizing it. This budget takes away the incentive for small business to take the risks necessary in an expanding economy.
It seems to me that shifting the incidence of the federal excise or sales tax from the manufacturers' level to the wholesale level will cause confusion and unnecessary paperwork. Does the government realize that there were 21,597 merchants in Canada classed as wholesalers who were small businessmen? The volume of total sales then was almost $71 billion. These figures were reported by Statistics Canada in 1978. Does the government not realize that in addition to those classed as wholesale merchants, there are also about 5,000 establishments classed as agents and brokers, and in 1978, the last reported year, their accumulated gross sales amounted to $16.3 billion? Given the growth over the past ten years, it would be safe to assume that today we have between 26,500 and 30,000 wholesale establishments in this country made up of wholesale merchants, agents and brokers, and under the provisions of this bill a whole new world of bureaucratic interference will open up for them. Most of these establishments are small businesses which are already over-burdened with paperwork. Small businesses today are fighting hard to stay alive and keep afloat. The fight to survive in the wholesale industry is an ongoing one. I am personally involved with this industry and can say that we operate on a low mark-up and depend on volume sales for a small margin of profit. We know what it is like to have to work. We know what it is like to have to live with a .5 per cent net profit. We depend on volume sales

December 16, 1981
Small Businesses Loans Act (No. 2) with such a small margin of profit. We make it in spite of the tough, large corporate competition. Elowever, we do not need more government interference.
That small profit is jeopardized by any small fluctuation in the marketplace. The current high interest rates have been murderous for my industry. The competition is fierce and the small-business man is being squeezed between a rock and a hard place by the corporate chains and giants who buy direct and in some cases are involved in the wholesale business themselves. Many have their own stores, and we have to compete with their gasoline stations which must now compete with the government.
I cannot understand why the government would disrupt the tax system and thereby create an administrative nightmare for the small businessman. I doubt very much that wholesalers will be compensated for acting as tax collectors for the government. Will they be expected to absorb the additional costs involved in collecting federal taxes in addition to the already excessive overhead costs they bear? The result of this end-run is obvious. The government will extract new revenues from the difference between the manufacturers' sale price and the wholesalers' sale price. Where the tax was at one time levied at the manufacturers' level-at the wholesalers' cost price-it will now be levied at the wholesale level-at the wholesalers' selling price. That is a big difference.
In 1978, the last year for which we have complete statistics, wholesalers bought $53.9 billion worth of goods. They sold those goods for $70.6 billion. Had the tax been in effect then, wholesalers would have had to pay the federal sales tax on the difference. That difference, three years ago, was approximately $17 billion. That is, $17 billion between the buying price and the selling price. There is no doubt that this shift in the incidence of taxation will mean higher costs to the consumer. It discriminates against the small retailer and the small wholesaler.
The large chains have the purchasing power to buy directly from the manufacturer which in effect, makes them a wholesaler and retailer combined. They eliminate the middle man. In the same fashion, this budget helps to eliminate the middle
class.
In the past 15 years there have been marked drops in the number of manufacturers in Canada. The wholesaler has been having a more difficult time. In 1974 there were 1.3 million production and related workers. In the following three years the production lines were down from 1.3 million to slightly more than 1.2 million. In 1978, the last year for which we have statistics, employment came up again to 1.3 million, and I shudder to think what the figures are now. Plant closings and lay-offs have been occurring at an alarming rate over the past year. The litany of blue chip companies which have closed their doors is awesome and is testimony to the economic policies of this government, or lack of them. So how does it think small businesses can survive?
I would like to close, Mr. Speaker, by reading a quote which relates directly to small business and this budget. It goes like
this:
You cannot bring about prosperity by discouraging thrift.
You cannot strengthen the weak by weakening the strong
And you cannot help the wage-earner by pulling down the wage-payer;
You cannot help the poor by destroying the rich.
You cannot establish sound security on borrowed money.
You cannot keep out of trouble by spending more than you earn And you cannot build character and courage by taking away man's initiative and independence;
And you canot help men permanently by doing for them what they could and should do for themselves.
Mr. Speaker, those are not the words of Churchill, not of Kennedy and not of Diefenbaker. They are the words of Abraham Lincoln, and they are as true now as on the day he said them.


Some hon. Members:: Hear, hear!


Mr. Dan Heap (Spadina):: Mr. Speaker, I rise to support Bill C-84, the Small Businesses Loans Act and I wish to indicate the importance of it, not only to the constituency of Spadina but to the rest of the country as well.
Spadina is made up primarily of people who earn their living by working for others. But we also have a good many of the others there-that is to say, the small entrepreneurs. We have the needle trades industry-it is one of the two major centres in Canada for the needle trades. We have the printing industry, a great deal of the retail industry and the entertainment industry. For many of these people, the small-business men, the present situation is one of disaster. This increase in the ceiling of the small business loans total is a good move, but for most of them it is insignificant. According to what they have told me, most of them have found this program to be of not much help. There is too much red tape about it. The banks are not interested since they are offered higher interest opportunities elsewhere. The restrictions on the purpose for which the loan is to be used cuts out many potential borrowers. That is to say, they cannot use it for operating costs when they run into inventory troubles and things like that. They could only use it for expansion, and at a time like this many of them were not able to entertain the idea of expansion. They are trying to survive and the small business loans program is not available to them. As a result, of all the loans made to small business last year, only about 2.8 per cent came under this program-in other words, it was significant to only about 2.8 per cent of the needs of small business in general.
In Spadina the major small business concern is the textile industry. Hundreds of small manufacturers of textiles, clothing, footwear as well as wholesalers and retailers are in those trades. There are many, many of them in grave difficulty. The small business loans program does not seriously address the problem of high interest rates because it is only 1.5 per cent lower. If you are paying 9 per cent or 10 per cent, going down 1.5 per cent makes quite a difference. But if you are paying up to 20 or 25 per cent then 1.5 per cent relief is not that much. As well as being hit by high interest rates, they have been hit a second time by this government within the past few weeks by the dropping of import quotas, particularly in the leather footwear industry. For the major industries of Spadina, the
December 16, 1981

textile, footwear and clothing industries, this is a time of disaster.
For the other retailers of Spadina, the retailers along Kensington, Bloor, College, Queen, Dupont, Yonge, King and the other commercial streets of Spadina, sales are down, credit is tight. If they ought to have any help, it is not primarily to expand at this time but to survive. This program excludes them from obtaining loans directed toward their survival.
It was very interesting on Monday to hear a similar note in the city of Montreal. Along with other members of the NDP caucus, 1 attended a hearing where a number of people from Montreal and Quebec told us their view of the economy as it relates to the government's budget. Le Conseil des Gens d'Affaires du Quebec was one group which spoke to us. They had this to say:
[ Translation]
Consequently, the Council would appreciate it if you would explain and defend its views on the economy in the House of Commons in Ottawa.

In other words, they asked the NDP to bring this message. The message in part as it relates to this bill is that they are being killed. The footwear industry is being killed by the dropping of the quotas on leather footwear, a decision made by this government a couple of weeks ago. Up until that point they still had 70 per cent of the Canadian manufacturing market in that field and still used 70 per cent of the product of Canadian tanners. Now they are afraid they will lose a great deal of that because of the dropping of the quota on leather footwear. At a time when the industry is in trouble, the government has made a decision that is disastrous to them. They will not be helped, unfortunately, even by this Small Businesses Loans Act. They will not be able to make use of it.
I am sure all members have received the brief of the Federation of Independent Businessmen commenting on the budget. They point out, for example, how family firms and farms that are being sold by instalment as retirement plans are being hit by the budget. They will not be helped by the Small Businesses Loans Act.
We heard comment on the Small Business Development Bond. There was the same problem last year, too much red tape and too few people who could make use of it. A comical incident occurred in Spadina this past summer. The Liberal candidate tried to ride on the SBDB program, claiming that the government was really helping small-business men. He used that at public meetings. He used it disastrously for himself. He is not here now.
The SBDB, as has been pointed out, is limited to bailing out businesses in dire straits, wherever that may be. I guess it is in the same place as the home owners the minister of housing was going to help. Apparently the banks are afraid to lend to people who, in order to be eligible under the new rules, must define themselves as being on the point of going broke. When they go to the bank at that stage, the banker looks elsewhere.
Small Businesses Loans Act (No. 2)
The Small Business Development Bond gives about the same amount of help as the famous cure for measles. The quacks advertise, "Send in your dollar, follow our directions and if you do not get rid of the measles, we will send your dollar back". The directions are, "Gather all spots together into one spot and step out of it". The SBDB is about as much use to the merchants of Spadina and elsewhere.
The biggest threat to small-business men are the high interest rates of this country. Last summer one of them said to me, "At 12 per cent interest rates, Trudeau was a winner; at 20 per cent, he is dead". That was referring to last summer's by-election in Spadina, and he was right. Bankruptcies are up over a year ago and the small businesses loans program will not make a noticeable difference.
The fact is this government has done something unusual. It has brought together this country's working people, home owners, farmers and small-business men around one major concern. A few weeks ago, 100,000 out on the Hill told the government to bring down interest rates. They wanted no more fooling around with picky little subsidy programs for this or that little group. They simply want the interest rate brought down. That is what the home owners and businessmen of Spadina said last summer, and that is what they are still saying.
Of course we have to support this program to increase the potential of the Small Businesses Loans Act. It will not rescue hundreds of small-business men and others who are going under because of this government's policies. It will not stop them from going under. They will not remember with any gratitude an increase in a program they were not able to use. We have to adopt this bill, but it is irrelevant to the needs of the country at this time.


Mr. Claude Tessier (Parliamentary Secretary to Minister of National Revenue):: First of all, Mr. Speaker, I am under no illusion-I think that all hon. members are in perfect agreement on the principle and objectives of Bill C-84 because of the proposed increase in the lending ceiling for small business loans from $850 million to $1.5 billion. In fact, the increase has become necessary because of the program's popularity and its usefulness, and since the demand is there, our government is prepared to meet it and it will.
As do other members of the House who take advantage of a debate to discuss other subjects, I ask the House's leniency, but I shall be very brief. I wish to take this opportunity to suggest to the government of Quebec that it be more co-operative, because I feel Quebecers and especially the government of Quebec, should understand that when the federal government takes various measures to help businesses, it is not particularly helpful or efficient if the government of Quebec, with its counter-strategies, manages to cancel or wipe out completely any measures that the federal government wants to take. I think the House should also be made aware of this. The opposite side is often all too eager to defend the interests of

December 16, 1981
Small Businesses Loans Act (No. 2)
Quebec, and often the interests of the Parti Quebecois. I feel that from now on we must make this very clear distinction. In this respect, the Right Hon. Leader of the Opposition (Mr. Clark) must have realized what the situation was when he approached Mr. Levesque to try and make him listen to reason, and he soon realized that Mr. Levesque was a separatist-sometimes he seems to forget-but still a separatist!


An hon. Member:: Quite true!


Claude Tessier: I would like to say a few words about Quebec's refusal to take part in the federal-provincial conferences on agriculture and on tourism. I may add that although not hopeless, it is certainly becoming very difficult, for instance, to work on a farm; we may have the best policy in the world, and 1 am referring to our dairy policy, which in my opinion and that of many experts, is the best dairy policy in the world. But if the Quebec Agricultural Marketing Board does not do its job as it should and fails to supervise the quotas, which has resulted in thefts and fraud, how can we as representatives of the federal government play an effective role to meet the needs of the producers in the agricultural sector?
The government of Quebec ought to take note of this, and so should indeed the Quebec agriculture minister. It is growing more evident every day that he is a lot better at selling independence than at providing producers with the infrastructures they need or promoting in Quebec a dynamic and progressive agricultural sector to serve producers and consumers alike. He was once looked upon as the only champion of producers, and indeed there was a time when too many Quebecers thought he was just that, but he is now making a fool of himself practically every day. We in the federal government want to say to all agricultural producers that we would much rather make sure that they earn a decent income and benefit from a dynamic and prosperous agricultural sector. In that respect, I hope, and I am even convinced, that we will be successful in particular in restoring more stability and more confidence in the future by maintaining our current dairy policy. I dare hope that early in 1982 we will be able to give the producers the policy they want now, which they have questioned in the past, all that in the best interests of the agricultural sector, the economy and Canada as well.
We are not quite sure when we wonder about the participation of the government of Quebec in federal-provincial conferences, and we have every right to ask what the economy represents for the Levesque government, for Mr. Levesque himself and for his set of intellectuals. Mr. Speaker, 1 would like to refer to our tourist industry. I suggest that the statistics speak for themselves and that we can really wonder when the Quebec government tells us that the tourist industry has nothing to do with the economy. And yet we know that Canada's tourist industry generates in excess of $15 billion in annual revenue for Canada, that is 5 per cent of the gross
national product, and provides one million jobs for Canadians in over 100,000 undertakings.
Mr. Speaker, I wish someone would reassure me about the economic theories of the Levesque government, and I wish he would explain to the people of Quebec why they were not represented at the tourism conference which was held this week in Ottawa. It is about time that Mr. Levesque, the Premier of Quebec, the leader of the Pequistes, the head of the Parti Quebecois, stopped sorting out his gang of genuine and false separatists, that is the liars and the hypocrites, and concentrate instead on the economy of Quebec. In addition, Mr. Speaker, Mr. Levesque should not be playing the association game. We know that his new challenge is to play with-


Mr. Jelinek:: I rise on a point of order, Mr. Speaker. I thought hon. members were talking about the Small Businesses Loans Act, and I feel the hon. member opposite is not speaking to the subject.


The Acting Speaker (Mr. Blaker):: I recognize the hon. member for Halton (Mr. Jelinek). His microphone is not on.


Otto John Jelinek: Mr. Speaker, I merely wanted to bring to the Chair's attention that we are supposed to be discussing the Small Businesses Loans Act and that the hon. member is totally way off base. He is not discussing anything related to small business at all. I wonder if the Chair could interfere.


The Acting Speaker (Mr. Blaker):: I should indicate to the hon. member for Megantic-Compton-Stanstead (Mr. Tessier) that I had taken notice of that issue because there was some question in my mind as to how relevant he might be to the bill.
I have also given some thought to the subject matter of the small businesses bill, and it seems to me that the small businesses bill is so wide-ranging that earlier in the day I recognized hon. members and allowed them to have that wide scope. In fairness, while the hon. member for Megantic-Compton-Stanstead might consider the point that was made to him, I have during the day allowed other speakers the same latitude that I propose to allow him.


Claude Tessier: Mr. Speaker, I can assure you 1 am quite prepared to co-operate. I also want to inform the hon. member on the opposite side that he proved in his point of order that he does not quite understand the implications of policies that conflict with other provincial policies. In fact, my purpose here is to make hon. members opposite realize where Quebec is heading, and that all Canadians are paying for this diversion and dispersal of energies, and I feel that is all part of what 1 have just been saying.
Hon. members opposite are proving that, in their own way, they too are real separatists. However, we have to live, day in day out, with the separatists in Quebec, but I want to get back to my subject to point out that as far as helping businesses is
December 16, 1981

concerned, we must become more consistent and we must make Quebecers and the Quebec government realize this. Mr. Speaker, 1 would like to go on, to say that Mr. Levesque has again started to talk about association, although the PQ convention made it clear that it was not interested in association. Mr. Levesque told us: It is high time we got back to the association concept, because in civilized countries, in the industrialized world, association and sovereignty must go together. I think we should also realize that what counts for Quebecers is not that Mr. Levesque, as premier or as leader of the PQ, enjoys playing with the hyphen, but that he can provide an argument that is clear enough for them to realize that he is deceiving them, every day of the week. If Mr. Levesque is a separatist, if he wants to break up Canada, let him say so! As representatives of Quebec, we know that Quebecers are not interested in separation, that they are willing to take up the Canadian challenge, and that this challenge will benefit all Canadians and not only Quebecers. Perhaps the opposition should start realizing this.
Mr. Speaker, I also wish to say a few words about energy. When Mr. Parizeau decided to raise the provincial tax on gas by thirty cents a gallon,-my constituency lies outside of the major urban centres, the population density is very low and distances are enormous-how can businesses be expected to come and settle in my constituency when now not only distance, but cost, has become a deterrent. Mr. Speaker, that too is an example of counterstrategy by the Levesque government, and it is these counterstrategies that are helping to weaken and destroy our industrial framework, especially in Quebec. 1 would also like to say a few words in particular about the problems now facing car dealers. In the past, it was said that the footwear industry had to be protected, and that the sales tax would be abolished.
The same minister, Mr. Parizeau, already told us that this method was ineffective. Six months later, however, he used this same approach to help shoe manufacturers and retailers. Through their association, the dealers have now asked Mr. Levesque to consider removing the sales tax to help the automobile industry, but Mr. Parizeau replied that such action would help Ontario and that the dealers would therefore have to live with the present economic conditions. Because of this, more dealerships have to close down every day! Mr. Speaker, this is another example of a counterproductive economic strategy which is harming small businesses, with the complicity of the Quebec government.
In closing, Mr. Speaker, I would simply like to point out to the Quebec government that we, in the federal government, believe that of necessity Quebec should diversify its industrial structure as it now relies too much on industries as such as textile and clothing, and that it should also have high technology industries, increase its productivity in key sectors, such as the pulp and paper industry, and improve its infrastructures, not only in the area of transport, but also in communications,
Small Businesses Loans Act (No. 2) computer technology and research and development. In this regard, I wish to assure those who still want to work effectively to promote Quebec economy, whether in the Quebec government, in the National Assembly or in the rest of the province, that the federal government is willing to take every possible action to help Quebec to take its rightful place and its rightful share in the Canadian economy so that we can finally solve our economic problems among Canadians without being faced every day with the issue of separation, which some people always put forward to win their point.
I therefore believe, Mr. Speaker, that it was proper to say that we, of the federal government, can afford to help businesses by granting loans and by increasing the amounts of these loans, but that both levels of government must learn that the economy is their responsibility and that they should cooperate if they want to be successful in this regard. In closing, Mr. Speaker, I would like to move, seconded by my colleague, the hon. member for Scarborough-Centre (Mr. Kelly):
That the motion be amended by deleting the words "to the Standing Committee on Finance, Trade and Economic Affairs" and substituting the following therefor: "to a committee of the whole".
I hope that the House will support this amendment.


John Horton McDermid: Mr. Speaker, I rise on the point of order. I did not want to interrupt the hon. member for Megantic-Compton-Stanstead (Mr. Tessier) during his remarks. All of us in the House understand the passion which Quebec members have for their province and their country; there is no question about it. But I would ask the hon. member to withdraw his remarks, if in fact he made them-the translation could be wrong-wherein he indicated that we on this side of the House were the real separatists. I do not think there is anyone like the right hon. gentleman who leads my party who has tried harder to bring Quebec into the constitutional agreement. I do not think this has been questioned anywhere. Hon. members opposite should take the time to read the editorial which appeared in Le Devoir this morning. I think it was very well laid out. I think it is a fallacy to accuse hon. members on this side of the House of being separatists or of promoting the separatist cause, and I ask the hon. member to withdraw those remarks.


Claude Tessier: Mr. Speaker, if I had made such a statement, I would have no hesitation in withdrawing my comments. I would like to point out to the hon. member that we, the members from Quebec, often think some opposition members make Quebecers feel that too often they associate with people who are but separatists. I am not accusing them of being separatists, but I could say that we feel they are playing in the hands of the separatists, and as a Canadian, I greatly deplore this.

December 16, 1981
Small Businesses Loans Act (No. 2)


The Acting Speaker (Mr. Blaker):: I take it that the point of order is settled. The hon. member for Megantic-Compton-Stanstead seeks the unanimous consent of the House to put an amendment to deal with all stages of the bill today, in effect to move to Committee of the Whole rather than to refer the bill to a particular standing committee. Is there unanimous consent for the hon. member to put the motion?


Some hon. Members:: Agreed.
Motion (Mr. Tessier) agreed to.


Otto John Jelinek: Mr. Speaker, 1 should like to raise a point for clarification. Does this mean that we will continue second reading debate until some time around 5.50 p.m., then go to Committee of the Whole and through all stages today?


The Acting Speaker (Mr. Blaker):: The Chair must put it in a way that does not imply that hon. members must continue until 5.45 p.m. As I understand it, there is an agreement between parties that all stages of the bill will be disposed of today. Whatever time suits hon. members will be the time that it is disposed of, but there is no lessening of the hon. member's rights or anyone's rights by this motion.


Otto John Jelinek: Mr. Speaker, now that we have heard the dissertation on the other side about the Quebec situation, which indeed is very important, the point 1 was attempting to make in my earlier point of order was that, according to the rules of the House, we were discussing the Small Businesses Loans Act which deals with small business and extends into the budget and other measures.
I should like to talk about Bill C-84 and the Small Businesses Loans Act. This amendment would increase the maximum of all loans which may be guaranteed during the two-year period ending June 30. 1982. from $850 million to $1.5 billion. Obviously this amendment is only keeping up with inflation. There is absolutely no new added advantage or incentive to small business. Previously this bill was amended every three years; now it will be amended every two years.
As Your Honour is aware, it was first introduced by a Conservative government in 1961. It was one of the first bills ever introduced for the benefit of small business. Naturally we all support the bill, but as I said, it merely keeps up with the inflationary situation which is plaguing the entire country.
Since the bill was first introduced in 1961, this party, which introduced the original Small Businesses Loans Act, has attempted month after month and year after year to bring forward incentives for the benefit of the small business sector that we all know is important to the economy of the country. Sometimes it was like pulling teeth to get those incentives out of the Liberal government, but over the years we managed to get them until finally the Minister of Finance (Mr. Mac-Ea'chen) brought down the budget on November 12 and in one fell swoop decreed that those incentives would no longer be called incentives but would be called loopholes and would be plugged. Now we must start from scratch again unless and
until the budget is replaced, which the majority of Canadians hope will happen.
During debate on this bill yesterday nine Progressive Conservative members spoke but only two Liberal members participated. The reasons for this are quite simple. First of all, the Liberals are embarrassed by the budget and they do not have anything positive to say about it so they stay away from the House when economic matters are being discussed. Second, nothing new and positive is forthcoming from that side of the House. When introducing the bill yesterday the minister had the audacity to say that, besides extending the Small Businesses Loans Act provisions, the budget will also extend the Small Business Development Bond program. That is the program that was introduced in the Crosbie budget but was voted against by the Liberals and the New Democratic Party. Then the Liberals watered it down till it is now totally ineffective. In these times of high interest rates, it would have been helpful to many small enterprises but now the extension is only available to businesses that are in dire straits.


An hon. Member:: Whatever that means!


Otto John Jelinek: That means someone who is in trouble and who is on the verge of bankruptcy. Would any lending institution advance capital to a business which is on the verge of bankruptcy under any circumstances? Under this program a chartered bank must consider the credit-worthiness of a customer, as it must under any other program, before a loan is granted.
I took the liberty of calling officials in the head offices of the Toronto-Dominion Bank, the Bank of Nova Scotia and the Royal Bank this week to find out what instructions were given to their managers across the country regarding this extension of the Small Business Development Bond. I was told that the same basic criteria will be applied for the SBDB program as for any other program. If a business is on the verge of bankruptcy, then obviously a chartered bank will not risk advancing funds to keep it going for two or three months until it goes into bankruptcy. I say shame to the Minister of State for Small Businesses and Tourism (Mr. Lapointe) for having the audacity to stand up in this House yesterday and brag about the phony extension of this program.
Why has this measure that would benefit small business virtually disappeared? Cost cannot be the reason. I should like to read into the record an extract from a study commissioned by the Canadian Federation of Independent Business on the economic impact of the Small Business Development Bond. This computer econo-model study was conducted by Infomet-rica. This new equipment is well respected and some departments of the federal government use it from time to time to find out what is going on. Perhaps it should have been used prior to the introduction of the budget! One of the findings was as follows:
There is no net cost to the federal treasury for the SBDB, but an actual gain of $77 million in the first year of the program-
December 16, 1981

The government should pay heed to this finding but instead it virtually eliminated the program in the budget.
I do not know why the incentives are deemed to have become loopholes. Either Liberal members do not understand the budget or they are two-faced hypocrites who say that good measures for small business are included when they know damn well that they are not. It is either that or they are a bunch of gutless wonders who support what the Minister of Finance says and then automatically follow suit. How can they go back to their constituencies and talk to the small business people, the farmers and the fishermen there after the introduction of this disastrous budget and then come here and vote in favour of it? When they do that, then I say they are two-faced hypocrites.


An hon. Member:: Oh, come on!


Otto John Jelinek: The hon. member says "Oh, come on". I should like him to stand up and tell us what positive reaction there has been from small business. I should like him to come to my riding and tell the small business people there what positive measures this government has taken in the last several years, and specifically what positive measures there are in the November 12 budget.


Mr. Kelly:: Set a date and 1 will be there.


Otto John Jelinek: It is no wonder that the trend of this government has been a negative one as far as it affects free enterprise, and specifically the small business sector which is the backbone of our economic way of life. Not too long ago the Prime Minister (Mr. Trudeau) said:
We haven't been able to make it work ... the free enterprise system. The government is going to have to take a larger role in running institutions ... It means that there is going to be not less authority in our lives ... but more.
Is it any wonder that the Prime Minister says that the free enterprise system will no longer work? The trouble is not that the free enterprise system no longer works, Mr. Speaker, but that the government will not allow it to work. It is strangled with regulations, directives, controls, the paper burden and must overcome all sorts of other hurdles. The government should leave the small business sector alone, and let it prosper in a free market system. It should replace the directives and controls with incentives, not loopholes. But that will not happen because of who wrote the budget.
It will not happen, because by whom is the budget really written and devised?


John Horton McDermid: A good question.


Otto John Jelinek: A colleague asks who wrote it. The budget is devised by academics; the budget was supported by academics; the budget is endorsed by academics and it is put into operation by academics. I submit that the academics who supported, endorsed and wrote this budget do not have a clue as to what is going on in the real business world outside of their ivory tower here in Ottawa. That is obvious from the state of the budget.
Small Businesses Loans Act (No. 2)
Those academics should and must be replaced with people who have some inner knowledge of what goes on in the business world, whether in a small business sector, in a medium-sized sector, or even in large businesses. Surely the time has come when this country, this government and this Parliament should not just depend on academics telling us how the country should be run; there should be some input from businessmen.
I see that some Liberal backbenchers are smiling. They should smile, because every-


An hon. Member:: Because it is Christmas!


An hon. Member:: You'd never know it by this budget.


Otto John Jelinek: The hon. Liberal member says it is Christmas. It is certainly not Christmas for the unemployed or for the record number of businesses which are going bankrupt, and certainly not for the people who cannot afford to house themselves or to buy cars, food or refrigerators as a result of Liberal mismanagement of the economy.


Some hon. Members:: Hear, hear!


An hon. Member:: What do you suggest?


Otto John Jelinek: What we suggest is that we follow many of the recommendations this party has submitted over the years, many of which were accepted by the Liberal government as incentives. These same recommendations have now been changed to loopholes by the Minister of Finance. That is what we recommend, and hon. members are laughing. However, every business organization in Canada, be it the Canadian Federation of Independent Business, be it the Canadian Chamber of Commerce, be it the Canadian Manufacturers' Association, the Retail Council of Canada or the Federation of Agriculture-and the list goes on-is totally and absolutely opposed to the bill which was presented by the Minister of Finance on November 12. I will just read what one of these organizations states. Moss, Lawson and Company Ltd., a member of the Investment Dealers Association of Canada, states:
The budget released Thursday, November 12, 1981 by the Federal Government raises great concern over its ability to perceive reality. We hesitate to call it a budget because it does not address this country's economic needs nor does it recognize the possibility of a severe recession over the next 12 months-indeed the impact of the document has every chance of deepening the recession now underway. The Finance Minister set out to make the tax system more equitable, to capture in the tax net those high income individuals who, through mostly government approved tax deferral methods, sheltered this income from taxes.
Instead of using a 'surgeon's scalpel' on this minority, the Minister chose to use a 'meat axe', gutting a whole host of long established procedures. The impact of this approach fell most heavily, not on the rich, but on the productive and aspiring middle class, removing much of their incentive and removing the corporate means of attracting and retaining competent managers and executives. This policy strategy was probably initiated after the last budget, and put together by the civil service bureaucracy who, with indexed pension plans and the security of tenure, do not have to assume market risk and the pressures of the real business world. In other places and in other times it would be sufficient cause for revolt.
And revolt there is, by all sectors of Canadians and not only the business sector. There is revolt by the Canadian Labour Congress and by others. The budget introduced by the finance

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Small Businesses Loans Act (No. 2)
minister hurts many Canadians, including employees, employers, people approaching retirement, tenants and consumers. The budget is also a restrictive budget. It results in a massive tax increase at a time when the economy is in a tailspin. I believe that it is inappropriate for the economic circumstances of today and that it should be withdrawn and replaced, and the sooner, the better.
The budget is not only bad, it is also dishonest. It is a dishonest budget because the minister, for example, when introducing it, stated that the poor will benefit and the rich will suffer. That is a joke, because the fact is that anyone earning $20,000 or less will receive a benefit, after the new budget, amounting to a savings somewhere under $200. However, someone earning $40,000 will have a savings of $624; someone earning $60,000 will have a net savings of $1,215; someone earning $80,000 will have a net savings of $1,808; someone earning $100,000 will have a net savings of $2,989.


An hon. Member:: That's in your class.


Otto John Jelinek: The government is trying to tell us that the rich and the poor will benefit. The facts speak for themselves. The government says that taxes will be reduced, but that is not the truth, either. In fact, taxes are being increased, if one takes all the taxes into consideration. There has been an increase of $1,400 in federal energy tax alone per family per year. That is what this budget and this government has now proposed to tax the Canadian people. It amounts to $1,400 a year for every family in Canada.


An hon. Member:: Untrue.


Otto John Jelinek: Tax increases will be felt through the erosion of take home pay because of the imposition of a tax on employee benefits, such as private health plans, dental care contributions, day care, the use of a car and travel passes, as well as the immediate taxation of retiring allowances. If take-home pay is reduced and employers make up the lost pay, the result will be higher costs for the company and probably higher prices to the consumer. There will be taxation of income accumulated in life insurance policies during the life of the policy. Life insurance is now considered to be investment rather than protection. Life insurance is to be taxed every three years and the policy holders will pay tax on income which will only be paid out if they die.
The biggest lie in that budget was when the finance minister said that government spending will be reduced. Again, upon examining the budget, the facts speak for themselves. Government spending in this year will increase by 22 per cent and, in the following year, by a whopping 43 per cent. The government calls that restraint. It is telling Canadians to restrain themselves while it increases its spending by 22 per cent in one year and 43 per cent in the next. I say it is shameful and it is time that the budget be replaced.
Before I close, I will read one last quote from today's Globe and Mail editorial. In brief, it states:
Mr. MacEachen's budget is also a disaster. The budget would hurt almost all Canadians except the very rich. It would injure business and eliminate jobs. A
Department of Finance which could forecast in the budget papers that unemployment this year would be 7.2 per cent when it already stood, according to Statistics Canada, at 8.3 per cent is not to be trusted with shaping Canada's taxation future all by itself.
Whether stated by editorials, business associations, individuals, labour or anyone else, the conclusion is that this budget is the most disastrous budget in the history of this country. I repeat, for the third time in my own remarks today, that the time has come for that budget to be withdrawn and replaced with incentives.


An hon. Member:: Are you speaking on the bill or on the budget?


Otto John Jelinek: The hon. member said I should speak on the bill. We have been speaking on economics and small business, and on budgetary measures. I am not speaking about Quebec, Ontario, disassociation or separatism, which has increased under the guidance of the Liberal government in this country over the last 12 years more than in the history of this whole nation.


Charles James Mayer: If you had a decent budget, you wouldn't need this bill! If you had a decent Minister of Finance, you wouldn't need this bill!


An hon. Member:: Would you be quiet? Show a little decorum in this House.


Some hon. Members:: Hear, hear!


Mr. Tousignant:: Mr. Speaker, I rise on a point of order. The hon. member just mentioned that separatism has increased while we have been in power. I remind him that if his government had been in power, we would be separated already.


Charles James Mayer: Sit down.


John Horton McDermid: That's rubbish.


Otto John Jelinek: Mr. Speaker, I will not even comment on the remarks of the hon. member for Temiscamingue (Mr. Tousignant).
As one who came to this country from behind the iron curtain some years ago, I came because of what Canada had to offer. Canada offered opportunities and hopes for everyone, for new Canadians and for Canadians who have been here for many generations. Canada is blessed. Canada is rich in natural and human resources and it is rich in technological know-how. Canada probably has the potential of becoming the number one country in the world. There is no question about that.
Everything is not lost. We still have our natural resources. We still have the technological know-how. We are building on that. We still have our human resources and we are building on those. We must replace the stranglehold that has developed around the free enterprise system with incentives. These incentives were built over the years until the presentation of this last budget. Once we replace those strangleholds with incentives,
December 16, 1981

then we can build on what we have to offer for all Canadians and for Canada itself, and we can achieve the great potential of which this country is capable.


John Horton McDermid: Mr. Speaker, I rise in this debate at the invitation of the Minister of State for Small Businesses and Tourism (Mr. Lapointe). The other day he yelled across the House and said: "If you want to say something, get up and speak." That is exactly what I am doing today. 1 shall talk about some of the things he mentioned the other day that are quite ludicrous. I have five or six points for the Minister of State for Small Businesses and Tourism. I have a great deal of admiration for him, but I think he should resign because he has no clout in the cabinet. He has been hung out to dry. 1 do not know how he can appear before his special interest groups, especially the small business groups. He has to appear with his tail between his legs because this budget is a disaster. Maybe Bill C-84 that we are debating today is the little crumb which the cabinet threw to him. Perhaps this is the little crumb that was handed to him so he could go back to the small business people and offer an amended Small Businesses Loans Act. We as a party are supporting this bill.
Let me tell hon. members what has happened with the FBDB. That bank needs money desperately; 1 understand that. The FBDB has come after a small-business man in my community for about $4,000. I shall explain the situation. This businessman wanted to buy a small business. He went to the FBDB to make the necessary arrangements. He started out very well with the FBDB and came to the point of signing an offer of commitment. At the same time the vendor of the small business met with the manager of the FBDB. They did not get along. They did not agree on the terms of the agreement. The manager of the FBDB, who I understand has since been fired, announced that in no way would he allow this deal to go through, yet a letter of commitment had been signed. The prospective purchaser was most concerned. He went to the vendor and pleaded with him to give him a larger first mortgage. The prospective purchaser then went to the bank. Because he had acquired a large first mortgage, he got a small second mortgage and purchased the business in that manner. That happened in October, 1980.
Last week this purchaser received a bill from the FBDB. A writ was issued on his small business for $2,300, on account of the letter of commitment. There was an interest charge of 20 per cent over the last year which amounted to some $600. A charge of $800 in costs was added, totalling $3,700. This bill of almost $4,000 from the FBDB was presented to the small businessman because the manager said that he would not let the deal go through. He scared the life out of the small-business man, who had to seek financing elsewhere.
The bank is so cash hungry that it is now issuing writs on small-business men, this at a time when small business should not be attacked. Where will this small businessman get $4,000 at this time of the year? 1 say let us get this bill through this afternoon and get some money into the hands of the FBDB so the bank does not have to drag money out of the pockets of
Small Businesses Loans Act (No. 2)
business people who cannot afford it right now. The minister should look into those things.
1 understand the FBDB have been issuing all kinds of writs. The bank has gone back years into its records and are issuing writs to small business people. Let us get this bill through the House this afternoon. Let us give the bank some money. Maybe the bank will then call off the hounds and leave the business people alone to do business.
Let us talk about the small business bail-out bond. We cannot call it a development bond any more; that is a misnomer. It does not develop a thing. There are companies in my constituency which took advantage of the Small Business Development Bond. They are very thankful that it was available. Industries have been created, some have expanded. The Small Business Development Bond was designed to help create and expand small businesses. It was, however, a watered down version from what the hon. member for St. John's West (Mr. Crosbie) introduced a couple of years ago, but it has played a very important part in small business. That has gone now.
Let me tell the House what that decision on November 12 did to another businessman in my riding. This businessman was in the midst of negotiations for a Small Business Development Bond when the edict came down from on high, from the Minister of Finance (Mr. MacEachen). This businessman went back to the bank the following week to tidy up the details on this bond, but the bank wanted more and more security. To my way of thinking, to his solicitor's way of thinking and to other people's way of thinking with whom I discussed the matter, the bank was asking for too much security. But what does the businessman do? If the businessman goes along with the bank, then he receives his bond under the old system. If, however, he goes to another bank which might accept the loan under a different security arrangement, what happens to him? He has to pay an extra 6 per cent interest. The businessman is caught between a rock and a hard place. The Minister of Finance did that to him.
The businessman does not thank the Minister of State for Small Businesses and Tourism and the Minister of Finance. The businessman looks to the minister of State for Small Businesses to plead on his behalf, but there is no response. I see the minister of state leaving the House. I hope he is going to plead on this man's behalf. The Small Business Development Bond is now gone. It is a sad state of affairs when we have to take a super development program like that and all of a sudden turn it into a welfare program. That is what it is now. If you are going bankrupt, then here we are. I notice some Liberal backbenchers nodding their heads and agreeing with me.
Let me talk now about taxing life insurance. A small businessman who wants some security for his wife and his family should anything happen to him will now have his life insurance policies taxed. What good does that do the small business person? The Minister of Finance says that if you already have life insurance policies you should not worry because they are not going to be taxed, but if you buy a policy from here on in it will be taxed. He talks about equity, but

December 16, 1981
Small Businesses Loans Act (No. 2)
where is the equity in that? There is no equity there. What about the small businessman who sells life insurance; where is the equity for him?
Where is the minister? He is not speaking out on behalf of these people. He is increasing the amount of money available under the Small Businesses Loans Act so more money can be loaned out, I might add at usurious interest rates. Where is the Minister of State for Small Businesses when it comes to discussing the exorbitant increase in postal rates, 30 cents for first-class mail? He is not standing up and saying to small-business men that he realizes that this is going to be a penalty to their businesses. No, he is not defending them, he is remaining silent. Where is the Minister of State for Small Businesses when we need him?
We find that interest rates on mortgages, which are subsidized by small and large companies, are now going to be a taxable benefit. Let me talk about that for a moment. I know many small-business people in northern Canada who offer accommodation at low interest rates to entice people to come up and work for them in these northern communities. This is something that attracts them to those particular areas. Now this is going to be a taxable benefit. These people cannot compete with the large companies.
Let me tell the House what is happening right now. A large company which I shall not name, a company I know very well and I think is known to all hon. members, provides interest-free or low-interest mortgages to entice people to move from one area to another, or to work in areas in the north. That is how people are enticed to work in the north. This will now be a taxable benefit. These companies have grossed up the salaries of every single person who comes within that category. Where is the equity in that? The big companies can do that and the consumers will pay.
The minister says he is plugging tax loopholes. He is not plugging anything. He is just encouraging people to get around his stupidity. That is all he is doing, and this just adds to inflation. This is an inflationary move.
Where is the Minister of State for Small Businesses when it comes to this measure? He is nowhere to be seen. Businesses are cash short today. For the Minister of Finance to come in with a budget such as this at a time when business needs encouragement is a disgrace to the Government of Canada and to the Liberal Party. He should resign immediately. In the name of equity and fairness, in the name of getting the rich guys and making them pay, he is hitting the middle-income earner. Making the rich pay sounds familiar; I think I have heard that expression before. The minister is hitting the middle-income earner, that guy who has a few extra dollars to invest in his company so it will grow and he will be able to hire more people. That is who he is hitting. He is not hitting the rich or the big boys. He keeps standing up and saying this is being done in the name of equity. No one is buying that. The little guy in the street is not buying that nonsense. The middle income earner and the small businessman are the ones who
will suffer, and because of this the economy will be in worse shape, not better shape.
The minister should take a completely new look at this budget and start again. As a member of the House for two and a half years and one who has been involved in political life for a number of years, 1 have never known an issue in respect of which I have received as many phone calls and as much mail as I have about this budget.
The Minister who very kindly invited me to get into this debate, and I thank him very much for that invitation, said the other day when talking about the tax rate for small business that in the United States small businesses with incomes between $50,000 and $75,000 were taxed at a rate of 30 per cent while in Canada they were taxed at a rate of 25 per cent; that businesses between $75,000 and $100,000 were taxed at 40 per cent; and those over $100,000 were taxed at 46 per cent whereas they were taxed at the rate of 25 per cent here. The one thing he did not tell us, and probably on purpose, although he would have to clarify that, was about the various write-offs available to small businesses in the United States-the various items that can be charged against income in order to run the business properly. The list is much longer than a similar list in Canada, and right at the top of that list is the right to write off interest on borrowed money for investment in a small business.
Let me wind up briefly with just three or four quick points. This government purports to support small business. I have example after example of how it does not support small business. Let me give one example since that great defender of the "buy Canada" policy is sitting in the House, the Minister of Supply and Services (Mr. Blais). I will keep this sticker down because I know one is not supposed to show things in the House. This is a sticker you are supposed to put on your door after you have participated in the CHIP program to announce your participation to your neighbours and anybody who comes to your door, such as the mailman or whoever. The only difficulty is that the sticky tape comes from Brokaw, Wisconsin, not from Canada. There are all kinds of companies in Canada who can provide this tape at a competitive price. The minister is sitting there with a smirk on his face as though this is a big joke. It is not a joke, Mr. Minister, and I tell you that right now. I have a small business in Brampton that can provide the same product cheaper than that outfit in Brokaw, Wisconsin, where the minister is getting that sticky tape for his CHIP program stickers. What a disgrace.


Mr. Blais:: On a point of order, Mr. Speaker, 1 want to indicate to the hon. gentleman that at the time he made that intervention I was deep in thought. I was not paying any attention to his ongoing drone, and there was absolutely no expression on my face.


An hon. Member:: That part is for sure.


Some hon. Members:: Oh, oh!


John Horton McDermid: There is a great line there, Mr. Speaker, but I will not jump in. I will resist temptation, I really will.


An hon. Member:: Go ahead.
December 16, 1981


John Horton McDermid: No, 1 cannot do it. 1 have already given him enough flak. I just hope he looks into this kind of thing that is going on in his ministry and all the others who support this great "buy Canada" policy.
Let me give another example of how this government is wasting money and not helping the small businessman. 1 have here a brochure put out under the authority of the Secretary of State for External Affairs (Mr. MacGuigan). This is a beautiful brochure with nice glossy pictures and glossy prints. It is entitled "Urban Transportation: The Canadian Experience". It is one of the best publications that has been put out by those people over there. It is going to help all kinds of small-business people in Canada who work on urban transportation. I think it is a terrific book and it was going to be circulated-here comes the hooker-right around the world, so we could sell our urban transportation to the world. But do you know what happened, Mr. Speaker? The minister for some reason-and we do know the reason-cancelled it after there was printed I do not know how many thousand copies. How many copies was it? I wish the minister would look into that question and let us know. I am sure it was thousands. Do you know, Mr. Speaker, what I was told as to why they were cancelled? It was because there were not enough pictures of Montreal in it.


An hon. Member:: You are kidding.


John Horton McDermid: No, I am not. There was too much of Ontario in it. That was the excuse that was given-there was too much of Ontario in it after they printed it. Look at this book-glossy pictures. That is an example of the waste that is going on over there. They are damaging small business people who could probably have gotten some advantage from this. It is just nonsense, Mr. Speaker.
I am supporting this bill, Mr. Speaker, but in closing, and in spite of all that I have been saying, I do want to acknowledge that the Minister of State for Small Businesses has a tremendous load on his shoulders, as do those Liberal backbenchers who did not have one iota of input into the budget. Not one iota, Mr. Speaker, yet they are the ones who have to go home and defend it. And they are having trouble defending it. We speak together privately and they have been telling us the problems they have. We know what they are going through and we feel sorry for them, but at the same time our challenge to them is to come back and tell their minister and the Minister of State for Small Businesses to clean up their act and to help small businesses, not damage them.


Some hon. Members:: Hear, hear!


Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, we are coming to the close of a debate which deals with a subject matter which is much broader than the single concept of small business. It must be considered as taking in the farmer, the fisherman, the small jobber in the forest, the small jobber in business, in a multitude of ways-the retailer, the small producer, etc. It covers a very broad spectrum. It is not to be considered in isolation.
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It is my wish to mention that some of the effects of the budget will generate a great need for this particular legislation and will generate a great need for the expansion of money supplies to other agencies of government where other small businesses are concerned, such as agriculture. For instance, one of the pieces of information which has crossed my desk indicates that a particular farmer who was in the livestock business has undergone a change in his tax requirement by virtue of this budget. How much is it? His taxable income has gone up by something in the the neighbourhood of $34,400- that is a 12 per cent increase. But his tax has gone up by 46 per cent, or $23,000. Just imagine what it means in an era when the Government of Canada, through its Outlook Conference, tables statistics which indicate that farm income in the crop year ahead is going down by 15 per cent and yet the farmer's tax load, in some instances, is going up 46 per cent. What a contradictory situation we now find ourselves in, Mr. Speaker. What people are saying is that most of the farmers in the area owe more to the bank or to the feed store than their farms are worth.
I quote from another source, a lady who says:
We are closing down. We're tired of spending money but not making any.
Time does not permit one to quote all the worthy letters one receives in a situation like this, but 1 do want to quote one more item. It reads:
The $45 million will in any case only refinance 450 farmers at $100,000 each, or 225 farmers at the $200,000 level. This is for all of Canada.
Might I add a comment, Mr. Speaker, and say that one district manager received two applications from family farms which, if he had approved them, would have absorbed the total allocation of additional money through the Farm Credit Corporation to his branch. That was in an area where, I submit, a multimillion dollar requirement existed and he could not look after two family farm operations with the extra money provided. I ask the gentlemen to your right, Mr. Speaker, to give some thought to the inadequacies of this situation.
The measure before us is just a drop in the bucket. To oppose it would be in opposition to the principles which we happen to support, namely, that there must be some recognition of this need in the country. Supporting it is an expression of our recognition of this fact, but it does not suggest, Mr. Speaker, to you or to anybody else in this nation, that it is in any way adequate to meet the needs which exist in such quantity in this country.
Not 48 hours ago, a friend of mine called me and said he wished to report something to me. He wanted me to know what the budget did to him. He said he had worked for a lifetime in a little business he owned and now had an opportunity to sell it to some of his family and to some who had served him loyally for a good many years. He said: "Last year I could have retired, but this year I cannot retire and sell it to those people". Why, Mr. Speaker? Because, as he said, "I have to pay my capital gains tax now. It would take my bank account and the first payment and I will have nothing, not a thing left on which to live in the next year. 1 must therefore seek out management and try to find some other means of retirement

December 16, 1981
Small Businesses Loans Act (No. 2) because I cannot sell my business and still enable myself and my wife to eat. They take it all."


An hon. Member:: Shame.


Fred Alward McCain: Do those to your right have no heart, Mr. Speaker? Suppose this man owned a small sawmill in the province of New Brunswick, and Domtar, or Bathurst, or Fraser's came along and said, "We want to buy your sawmill and your lands". There was another complication which I neglected to mention earlier-it was that those who would borrow the money to make the downpayment would have to pay for that payment in "after tax dollars", since interest would not count as it heretofore would have counted in such a case. So neither could the buyer afford to buy nor the seller afford to sell. But if some multinational or large corporation, Canadian owned, wanted to buy a sawmill under similar conditions, they would not have the same interest problem as a purchaser because it would not reflect in their books that they had borrowed money to buy. And you could not sort it out if you tried.
So the large corporations can now buy out the small guys, Mr. Speaker, and so it goes on and on and on. But private individuals, such as members of this House, cannot effectively get a loan to buy a business to become small business people because of the adjustment in the tax structure. Your interest paid is not a cost to your operation as an individual. This whole thing is quite ridiculous. This seems to be a sort of climax, Mr. Speaker. I have said much the same thing once before in this House. This seems to be the climax of a situation which started with Benson who was dumped, that was reintroduced under the Hon. John Turner, who began just gradually to bring this in. It was at that time that an individual who wanted to be a small-business man appeared before some of our members and told them he had a chance to go into small business. He said this business would help him to live a little more comfortably in his retirement. Then he said. "But when 1 look at what the capital gains tax would do, etc., in the Turner era, it just is not worth the risk to employ 14 people and I am not going to do it." Now, Mr. Speaker, if that was the attitude in the Turner years, what would that individual think about investing today? It has become ridiculous-but it was introduced at that point in time.
How much better it would have been had the government introduced an incentives budget. Then it could have reduced its expenditures. How much better it would have been if the commentary on this budget could have been, "There will be production. We will reach for more productivity. We will give incentive to business. We will give incentive to the development of the oil sands. We will give incentive to the development of the offshore resources on the east coast of Canada. We will inspire people to invest." And what would have been the difference? We would probably have had 200,000 or
250,000	less people unemployed. We would have had a tax base from those 250,000 people. We would not have had to scrounge every cent that every taxpayer has.
What is the government trying to do? I charge this government, Mr. Speaker, with establishing a tax base which encourages the inefficiencies of private enterprise, or discourages them to the degree that this government will be able to justify itself when it says: "We are going to socialize, we are going to nationalize, we are going to take this country over by virtue of the tax and regulation impact of the budget." Many people in this nation will be discouraged. Is that the base it is trying to lay to justify nationalization and further government interference?
A question was raised today by the hon. member for Joliette (Mr. La Salle). He asked why we do not have a definitive answer on what is to be the government's position in respect to a subsidy for the dairy industry. That has been under study and will be under study until the poor cow's udders have gone dry. This has been under study for months. The gestation period of that program far exceeds that of any bovine. No bovine needs as long a gestation period as the Minister of Agriculture (Mr. Whelan) requires. When in the name of all that is good and holy is he going to get on his toes, get this job done, report to the dairy industry and get it on its way?
I know one reason. It has reached the stage where the DREE committee is now considering grants for tourism, for agriculture, for fishing, for forestry and many other different items. This government and this Minister of Agriculture have no idea. One minister does not know what his colleague is doing. He does not know what is going into tourism, forestry, agriculture, mining, highways or public works because it is going through a dispersed structure of government which is so confusing that no one has a handle on the whole deal. Why not bring this back in place so that we can treat it as we should, intelligently and without having to look at the minister responsible for forestry to see what is being spent there and what is being spent through DREE. It is ridiculous. It is defeating.
It is in the bureaucracy where the additional expenditure is coming. Did it ever occur to the government that we might save $5 billion or $10 billion in Canadian money down the road, which we are going to give to the Arabs, if we had an incentive budget for the development of our resources in eastern and western Canada? Today somebody asked me what 1 wanted for Christmas. It was a puzzling question but I think I have the answer. I want an intelligent government that is interested in people employed, in providing incentives for production, in leading this country and laying it on the line to Canadians that we must have better productivity. I want a government that is more interested in productivity and incentive than in writing unemployment insurance cheques because it gives them a high profile, helping the poor people. They believe putting out unemployment insurance cheques gives them a high profile and that it would have a low profile if the country were prosperous. Is there an insidious seed in the mind of the government that it can destroy the country and develop a political profile by sending out aid? I have to feel there may be.
December 16, 1981	COMMONS DEBATES	14149
What 1 want for Christmas is an opportunity for this country to show its mettle without the degradation of excessive taxation. 1 want a government that will sit down with the provinces and municipalities and determine under what tax level this country can prosper. I want a long-term and intelligent assessment of this nation's capability to pay taxes. I want a government that understands that over-taxation and overexpenditure is degrading and debilitating to this country.
This situation is probably like the little girl blowing out the candles on her cake. She is told to make a wish. She knows dammed well she is not going to get it, but at least she has the right to wish. That is all we in this House have left, the right to wish for an intelligent appraisal of the capability of the nation. That is all we have left to wish for this Christmas.
I regret very much there has been a House agreement which requires that we stop this debate and proceed to finish this bill, which really does little if anything for Canada. However, it is a principle we will espouse. In co-operation with that agreement, I thank you very much.


Mr. Lapointe (Charlevoix):: Mr. Speaker, I understand that we will go through all stages and pass this bill before six o'clock, so I would now ask you to go into Committee of the Whole.
Small Businesses Loans Act (No. 2)


The Acting Speaker (Mr. Blaker):: There is no difficulty with what the minister proposes. We will dispose of that accordingly. Is the House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mr. Blaker):: Is it the pleasure of the House to adopt the motion as amended?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and, by unanimous consent, considered in committee, reported, read the third time and passed.
The Acting Speaker (Mr. Blaker):: 1 want hon. members to appreciate the fact that the Chair was so speedy that the Sergeant-at-Arms had to run to keep up with the Mace!


John Horton McDermid: Mr. Speaker, may I call it six o'clock.


The Acting Speaker (Mr. Blaker):: With the unanimous consent of the House we will call it six o'clock. I do now leave the chair until tomorrow at 2 p.m.
At 5.48 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, December 17, 1981