1981-01-30

ROUTINE PROCEEDINGS


Mr. Stan Schellenberger (Wetaskiwin):: Madam Speaker, I rise under the provisions of Standing Order 43. In view of the serious loss of health services to the Indian people of the James Bay region which were promised under the James Bay agreement, and because of the need for Parliament to know whether the government is upholding that agreement, I move, seconded by the hon. member for Cariboo-Chilcotin (Mr. Greenaway):
That the minister immediately state on motions the reasons why the act has not been followed with regard to the yearly submission of a report on the implementation of the provisions of the act to Parliament.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL VOLUNTARY ORGANIZATIONS
Mr. Walter McLean (Waterloo):: Madam Speaker, since the Prime Minister (Mr. Trudeau) boycotted the opening session last night of the National Voluntary Organizations' meeting here in Ottawa, after a date had been postponed from last November to suit the government, and since the government was not represented by a minister or even a parliamentary secretary, I move, seconded by the hon. member for Yukon (Mr. Nielsen):
That this House express its appreciation for the contribution of Canada's national voluntary agencies and its regret at the failure of the government to clearly signal its intention to work closely with these organizations.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


BANKS AND BANKING
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In light of information contained in a recent Economic Council of Canada report which demonstrates conclusively that Canadian households and businesses are being overcharged by hundreds of millions of dollars each year by Canada's chartered banks, I move, seconded by the hon. member for Broadview-Greenwood (Mr. Rae):
That this House instruct the Minister of Finance to introduce legislation this year that will allow trust companies and credit unions to compete more effectively with the chartered banks in an effort to eliminate these massive and excessive overcharges.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NEW DEMOCRATIC PARTY
Mr. Doug Lewis (Simcoe North):: Madam Speaker, I rise under the provisions of Standing Order 43. Whereas David Lewis, the former leader of the NDP, has publicly condemned the whole referendum process as proposed in the resolution as "immoral", I move, seconded by the hon. member for Kinders-ley-Lloydminster (Mr. McKnight):
That this House join the former leader of the NDP and condemn the NDP for its support of immoral practices.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

January 30, 1981


ROYAL CANADIAN MOUNTED POLICE
Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, it has been brought to my attention on several occasions that RCMP detachments throughout the country are not accepting cash money as legal tender for the procurement of firearms permits. Since this is a very serious situation, 1 move:
That the Solicitor General issue an order to all detachments of the RCMP throughout the country requiring them to accept cash money as legal tender for payment of firearms permits, and in cases where there are officers who cannot be trusted with the handling of such legal tender, that they be commissioned to duties which will not bring them in contact with it.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
[Stage Direction]
5.0.	43
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, pursuant to Standing Order 43, I seek the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
in view of the unanimous consent given by the House on January 16 to a motion calling for approval without change of the U.S.-Canada east coast fisheries treaty, and in view of the visit to Washington of the Secretary of State for External Affairs (Mr. MacGuigan) today, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the House reaffirm its previous support and its total rejection of any change in the fisheries treaty concluded in good faith by both countries.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PROPOSED CONFERENCE AT STORNOWAY-MOTION UNDER
[Stage Direction]
5.0.	43
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, I rise under the provisions of Standing Order 43 on a
matter of urgent and pressing necessity. Inasmuch as it was reported yesterday in The Globe and Mail that a women's conference will be held at Stornoway in February and a spokesperson said, "We'll be asking the NDP and the Liberals if they can contribute something in the form of sandwiches, perhaps, so they can have non-partisan participation", I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the minister responsible for the status of women interfere again to conduct a national survey of Canadian women to determine what type of non-partisan sandwiches should be served at Stornoway, and in particular, should we serve barefaced Liberal chicken or two-faced Tory baloney.


An hon. Member:: Or NDP hash.


Mr. Paproski:: Axworthy said no.


An hon. Member:: He is not even here.


CANADIAN NATIONAL RAILWAYS
Mr. Tom McMillan (Hillsborough):: Madam Speaker, I rise under the provisions of Standing Order 43. The president of Canadian National has promised to pursue with the Minister of Transport a proposal to continue CN Express service on Prince Edward Island. The termination of that service would not only throw many of the 41 CN employees out of work, but also impose severe hardship on the people of P.E.I., especially people in business, farmers and fishermen. I therefore move, seconded by the hon. member for Malpeque (Mr. Gass):
That this House calls upon the Minister of Transport to make a statement on motions in the Commons early next week in respect of his decision on this urgent matter.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Douglas Grinslade Lewis: Madam Speaker, my question is for the Minister of Public Works. The minister will know that the Department of National Health and Welfare has banned use of urea formaldehyde foam insulation. CMHC authorized its use and gave it credibility by including it in the CHIP program. The government is therefore directly respon-
January 30, 1981

sible for its use in the homes of thousands and thousands of Canadians. What responsibility is the government prepared to accept for their financial and physical well-being?
[DOT]	(1115)


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, I have indicated twice in answer to the very same question that the government, as a result of an interagency or interdepartmental study, temporarily imposed a ban on the use of urea formaldehyde as a material for insulation. We are awaiting the results of an in-depth report from the ministry of health. I understand that report is imminent. Quite frankly, until such time as we know what significance there is in the use of the material, I think that to jump ahead and answer hypothetical questions at this point is premature.


Douglas Grinslade Lewis: Madam Speaker, I am somewhat concerned that there are no provisions for testing. My supplementary question is this. In the United States it was agreed that the safety of the material would be proven before it was included in their fuel conservation program, which is similar to CHIP. Why does the Government of Canada do things backwards? Is this the reason that responsibility for CHIP is being taken away from the minister's department?


Paul James Cosgrove: Madam Speaker, I understand that the issue of the safety of the material is one which is difficult to determine, even for people who are professional and qualified to entertain an investigation of it. It has been a very difficult problem and is one which still rages. I understand that even in the United States there is opinion on both sides of the issue.


Douglas Grinslade Lewis: Madam Speaker, it may rage but it has not been included in their program.
Suppliers and installers are also suffering from the government's indecision. First, the government initiated the program without final installation standards. Then the government banned the product. As late as January 13, 1981, installers were writing government examinations on a product which they could not instal. Does the government not feel any responsibility for leading installers down the garden path and for throwing thousands of Canadians out of work?


Paul James Cosgrove: Madam Speaker, the hon. member by his last question raises the point that the implications Of a ban are complicated. The impact upon those people who have used the material is a significant one, and so is the impact upon people who are engaged financially in the introduction of that material. However, I suppose the bottom line is, what is the responsibility of government generally when it is interfaced with the private sector? I would submit that the bottom line is that government cannot be the protector for all people engaged in all kinds of economic activities in this country.
Oral Questions


CONCLUSIONS OF STUDY ON TOXICOLOGY OF THERMAL INSULATION
Hon. James A. McGrath (St. John's East):: Madam Speaker, in the absence of the Minister of National Health and Welfare, my question is directed to the Minister of Consumer and Corporate Affairs. Since the minister was the joint author of a statement on December 17 announcing the ban on the use of urea formaldehyde as an insulating material, is the minister aware of the study published in June, 1980 by the department of health entitled "Toxicology of Thermal Insulation"? The conclusions reached in that study on urea formaldehyde are exactly the same, word for word, as those reached six months later by the non-government expert committee on UFI, chaired by professor Campbell of the University of Ottawa, on which the government's decision to ban UFI was based.
[ Translation]


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs and Postmaster General):: No, Madam Speaker.


James Aloysius McGrath: Madam Speaker, I am surprised at the lack of interest and knowledge of the Minister of Consumer and Corporate Affairs, who felt strongly enough about this in December to be the joint author of a press release banning use of urea formaldehyde. Perhaps he might be a little more concerned when I tell him that his seatmate, the Minister of Energy, Mines and Resources, has urea formaldehyde installed in his home. He is one of the 60,000 Canadians so affected.


Some hon. Members:: Oh, oh!


Steve Eugene Paproski: You had better check it out, Marc.


James Aloysius McGrath: Given the fact that the basis for the ban was supposedly the Campbell study, which is identical word for word with the study commissioned by the department six months earlier, why was the ban not implemented in June? Second, is the Minister of Consumer and Corporate Affairs reaching for the silver bowl to absolve himself of all responsibility, or will he live up to his responsibility to the consumers of this country and institute a testing program in order to put at ease the minds of the hundreds of thousands of Canadians whose health could be affected by this material?


André Ouellet: Madam Speaker, before I get worked up as the hon. member seems to be doing, I will wait for the conclusions of the inquiry commission established by my colleague the Minister of National Health and Welfare.

January 30, 1981
Oral Questions


EDUCATION
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, I have a question for the Minister of Finance concerning the established programs financing legislation and reports that officials in his department have made recommendations to the cabinet social development committee which is meeting this week and next to discuss these recommendations. Will the minister confirm whether his department has made recommendations to the cabinet committee on social development which would have the effect of cutting funding for our universities by some $1.5 billion and total over-all cuts in established programs financing of some $2 billion? Can he simply confirm whether these discussions are taking place?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, i can confirm that discussions are taking place, certainly within my department, with respect to the upcoming negotiations on the fiscal arrangements. We have not yet formulated recommendations to the cabinet. That is something which is in play but has not yet taken place. There have been no proposals agreed upon by the cabinet as of this date. What we said in the budget speech is that we intend to seek significant savings in intergovernmental transfers, but we have not carried the decision-making beyond that point.


Bob Rae: The question is not fiscal arrangements but established programs financing. That should be clear because we are, in a sense, talking about two different animals. How does the proposal, which the minister has neither confirmed nor denied is actively being discussed, to cut some $1.5 billion from the budget of our universities right across Canada, from Newfoundland to British Columbia, jibe with statements made by his colleague, the Minister of State for Science and Technology, that the government attaches the greatest importance to increasing Canada's research and development capacity? How does it make any sense to cut back so substantially on funding for our universities when we are told there is a shortage of skilled manpower and that the government places the greatest importance on research and development?


Allan Joseph MacEachen: Madam Speaker, what I said about fiscal arrangements also applies to the established programs financing. The matter obviously has to be under discussion and consideration by the government, but the decision-making stage has not been reached. I think it would add to the speculation for me to begin to comment on rumours that we have reached conclusions about cutting here or there. It is part of the negotiation process. When we have made up our minds as to what we are going to do, we will put our general position before the provinces. That has not yet happened.


Bob Rae: In light of the dramatic effect which a unilateral change of funding of this magnitude would have, not only on the provinces but on these institutions, will the minister agree
that it would be in the best interests of the country and his government to establish a parliamentary task force which would have responsibility for looking not only at the fiscal arrangements between the provinces and the federal government, but at the established programs financing legislation? We would then be in a position as a Parliament to do a review of these things and give the institutions which are going to be cut so drastically by the government an opportunity to put their cases before Parliament.


Mr. Clark:: Where did you get that idea, Bob?


Allan Joseph MacEachen: Madam Speaker, the fiscal arrangements expire in March, 1982 and, in accordance with custom, we will be attempting to renegotiate a new set of arrangements with the provinces. The EPF arrangements will not terminate, but if no new agreement is entered into the government can establish its own decisions, and that is the situation in respect of both these arrangements. The suggestion has been made that Parliament be given some opportunity to examine, possibly through a task force, this whole question of intergovernmental transfers, equalization and EPF. Something I want to discuss with the leader of the government and the House is whether it would be possible to put this subject before a parliamentary task force and to receive their conclusions before negotiations with the provinces would be concluded. That is a matter that is under consideration at the present time.


PRESENCE IN GALLERY OF MINISTER OF NATURAL RESOURCES OF SOLOMON ISLANDS
Madam Speaker:: May I draw the attention of hon. members of the House to the presence in our gallery of the Hon. Paul Tovua, Minister of Natural Resources of the Solomon Islands.


Some hon. Members:: Hear, hear!


AGRICULTURE
Mr. Robert Gourd (Argenteuil-Papineau):: Madam Speaker, my question is for the Minister of Agriculture, but in his absence, I shall put it to his parliamentary secretary. In view of the overproduction of apples in Canada, more specifically in Quebec, Ontario and British Columbia, and in view of the brief submitted to the minister on January 5 by the Quebec Federation of Apple Growers, can the parliamentary secretary tell us whether quick action will be taken in this area to enable
January 30, 1981

the producers to market their apples in CA or controlled-air storage?


Mr. Marcel Ostiguy (Parliamentary Secretary to Minister of Agriculture):: Madam Speaker, since the department has received several briefs on this matter, as the hon. member has just said, it is therefore well aware of the inventory surpluses of apples in cold storage following a bumper crop in 1980, showing an increase of about 20 per cent. The policy that we are trying to implement is in three parts. First, there will be an advertising campaign to urge Canadians to eat more apples. We would like to reach the figure of six pounds, per capita. This publicity campaign should be launched within a few weeks. Second, a purchasing program by the Farm Products Agency will aim at disposing of the stock of refrigerated apples. Third, the Agricultural Stabilization Board will provide additional assistance to Canadian apple growers.


INDIAN AFFAIRS
Mr. Albert Cooper (Peace River):: Madam Speaker, my question is for the Minister of Indian Affairs and Northern Development. The minister is well aware that last October he had signed a $5 million agreement with the Dene Tha' band of northern Alberta which was then cancelled by his department because it had no funds available to fulfil his promise. Is it the policy of this government to make spontaneous promises while in the presence of Indian band leaders, only to cancel such agreements once the minister is safely tucked away in his Ottawa office?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, I think the hon. member should check his facts. There were problems with finding moneys, there is no question about that, but there was an agreement which was nullified both by the band in question and myself on behalf of the government. It was a mutual agreement-and they had independent legal advice before they agreed-based on the fact that they felt if they had legal recourse they would do better with previous agreements signed at the regional level under my predecessor.


Albert Glen Cooper: Madam Speaker, as a result of the difficulties between the department and the minister, the Dene Tha' band has now reacted by closing off all rights-of-way through their reserve. As a result the Mackenzie highway may well be shut down, which will limit and isolate the city of Yellowknife and other northern communities. What action is the minister planning to rectify this situation and to try to bring it under control before we have a very volatile situation on our hands?


John Carr Munro: Madam Speaker, we are obtaining a legal opinion as to whether the band has that
Oral Questions
authority at the present time. When I have that legal opinion, naturally I will be in a better position to respond to the hon. member. I hope, through discussions and so on, that this type of confrontation can be avoided.


HEALTH CARE SERVICES TO JAMES BAY CREE
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, in the absence of the Minister of National Health and Welfare, I should like to direct my question to the Minister of Indian Affairs and Northern Development. It concerns the lack of health care available to the James Bay Cree. I am sure the minister is aware that since last October 7,000 Cree in the James Bay territory have been virtually without health care and that clinics and hospitals are closed down because medical staffs have been laid off. The minister will remember that last summer at least ten children under the age of two years died of a disease which was probably gastroenteritis. A task force recommended that immediate action be taken. Would the minister tell us what action has been taken by the government to ensure that there will not be a repeat of this situation next summer?


John Carr Munro: Madam Speaker, I should like to check on the progress of that matter and get back to the hon. member in the early part of next week.


THE CONSTITUTION
Hon. Jake Epp (Provencher):: Madam Speaker, I should like to direct my question to the Right Hon. Prime Minister. On what date was the Prime Minister of Great Britain informed by the Government of Canada that it was its intention to include a charter of rights binding on the provinces in its patriation proposals?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, it was toward the end of June when I was returning from the Summit in Venice that I met with the British Prime Minister and members of her cabinet. I explained to them what was in the package we had put to the premiers at the beginning of June-the people's package, patriation, the amending formula and the charter; that there were many other things we were discussing as well; that the June meeting with the premiers had not been conclusive, except to the point where we had all agreed-


Charles Joseph Clark: The September meeting.


Pierre Elliott Trudeau: No, the June meeting with the premiers was not conclusive except to say that we had, among the premiers and myself, agreed to have many meetings over the summer in order to achieve results by September. The hon. member will

January 30, 1981
Oral Questions
recall that the premiers wanted a communique indicating that the matter would be finalized by September.


Arthur Jacob (Jake) Epp: Madam Speaker, my supplementary question is directed to the Right Hon. Prime Minister. Has the government been officially and specifically informed by the British government, after the exact nature of the Canadian government patriation package became known on October 2, that Britain would push the package through Parliament at Westminster?


Pierre Elliott Trudeau: No, Madam Speaker. The British contacts which have been made, not by myself but I believe by the Minister of the Environment and the Secretary of State for External Affairs who met in Britain early in the fall, indicated that the inclusion of the charter would make it more difficult, which we know.


INQUIRY RESPECTING BRITISH COMMITMENT ON PEOPLE'S PACKAGE
Charles Joseph Clark: Madam Speaker, the Prime Minister, today and in a press conference on January 22, when asked as to the date on which he specifically informed the British government of the intention of Canada to include a charter of rights, spoke about general conversations in June regarding a people's package. In his January 22 press conference he said that Mrs. Thatcher was informed in general terms of the interest in a people's package. It is quite important for the House to know exactly what was known by the government of Great Britain at the time it gave any commitment. When was the government of Great Britain advised for the first time in specific terms of the intention of the Government of Canada to include a charter of rights in the patriation package?


Pierre Elliott Trudeau: Madam Speaker, information was given to the British Prime Minister that we were discussing a people's package-equalization, the question of the offshore and the demand of one province to have self-determination written into the Constitution. I cannot assure the Right Hon. Leader of the Opposition that I went into details on each of the many, many items which were discussed during the summer. I told her what the agenda was, what we had discussed at the beginning of June, and they came under all these general headings.
The British Prime Minister did not ask for details or put subquestions. She took the position that if the Parliament of Canada put an address to Her Majesty, the British Parliament would have no choice but to take it as a government measure and to assure its passage. This was not done in ignorance; this was done as a result of British governments, including the former government of Mr. Callaghan, having been asked repeatedly what their position would be when they received the resolution from the Canadian Parliament. I did not seek to justify to the British Prime Minister any of the measures in there. I just said that these were the measures with which we were proceeding and that I would attempt to justify them to
the Canadian Parliament, not to the British Parliament or British government.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, what is germane here is that the Prime Minister has been relying for some time upon what he claims was an agreement by Britain to give passage to a measure proposed by the Parliament of Canada. We need to know whether, when the British gave that agreement, they had been fully informed as to the contents of the proposal to which the Prime Minister was making reference. The Prime Minister has indicated that there is now some considerable doubt whether or not Mrs. Thatcher knew in June, when she gave whatever commitment she did give, that a charter of rights would be involved as well as substantial provincial dissent in this country. Could the Prime Minister tell us the specific date on which Britain knew for the first time the specific contents of what the British government was being asked to approve?


Pierre Elliott Trudeau: Madam Speaker, I do not know on what date the Prime Minister of Great Britain informed herself in detail of the contents of it. I can tell the hon. member that she was informed of the contents on that day at the end of June when I sat down with her at Downing Street. The Leader of the Opposition should not say that my previous answer left that in considerable doubt. It was made quite clear to her that we were proceeding with this package, hopefully with the consent of the provinces, but the whole point of discussing it together was that perhaps we would not have the consent of the provinces; that was quite clear. The Leader of the Opposition should not try to twist my words and make them sound the contrary.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, I would not want to twist the Prime Minister's words or his intention. Is it a fair interpretation of what the Prime Minister said that Prime Minister Thatcher knew in June the Government of Canada intended to include a charter of rights in its package?


Pierre Elliott Trudeau: Well, Madam Speaker, unless she was not listening while I was talking or not informed by her people of what all Canadians and the ten premiers knew-because it had been made public in Canada-then the answer to the question is that she did know.


AUTOMOTIVE INDUSTRY
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, my question is directed to the Deputy Prime Minister and Minister of Finance; it concerns the future of Chrysler. I am sure the Minister of Finance is aware of the vote taken by workers in Canada on the aid package initiated in the United States. I
January 30, 1981

think the minister would agree the vote was indicative of the deep-rooted unease the workers in Canada feel about Chrysl-er's future and the ability of the government to protect their jobs.
I should like to ask the minister whether the government will take steps to require that Chrysler manufacture in Canada, in proportion to Canada's share of the market, the so-called world car on which they are basing their survival in the future, and that the investment necessary for that production be made in Canada concurrently with the investment they propose to make in the United States.


Mr. Gerald Laniel (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: I hope, Madam Speaker, that the hon. member will accept my attempt to answer this question. All I can do at this time is to repeat the words of the minister of a couple of weeks ago when he said that the federal government had a commitment from Chrysler. At that time there were talks with the unions following which the minister met with Chrysler management. I wish to inform the hon. member that at five o'clock this afternoon the Minister of Industry, Trade and Commerce will again meet with Chrysler officials.


Some hon. Members:: Hear, hear!


Ian Deans: Today, when the minister is meeting the Chrysler officials, would it be possible for him to impress upon them that if they hope to gain any kind of support in Canada for their package, they must invest in Canada at the same time as they are investing in the United States in product lines which they believe will be the basis for their survival in North America?


Gérald Laniel: The hon. member is aware of the commitment of the Minister of Industry, Trade and Commerce to the maintenance of jobs in Canada and to Canadian workers getting a fair deal. I am sure that the minister is aware of the preoccupation of the hon. member and of all the points he has made on the whole question. They will be part of the negotiations this afternoon, and the interests of Canada and of Canadian workers will be well defended by the minister.


PRODUCTS FROM LESS DEVELOPED NATIONS
Hon. George Hees (Northumberland):: Madam Speaker, I have a question for the Prime Minister. During his recent visits to certain underdeveloped countries, did he put forward the point of view to those with whom he conferred, as it is reported he did, that the best way the developed countries can help the underdeveloped countries improve their standard of living is by helping them to increase their export trade, and that the most effective way in which this can be done is by the developed
Oral Questions
countries reducing tariffs and other import restrictions on the products which the underdeveloped countries want to export in greater quantities? If that is the case, would the Prime Minister indicate to the House to what broad categories of products which are also produced in Canada he feels this program of reducing tariffs and import restrictions should apply?


Pierre Elliott Trudeau: Madam Speaker, as a result of the policy of the Canadian government and of GATT, particularly at the Tokyo Round negotiations, as the hon. member will know having been such a distinguished former trade minister himself, some 80 per cent of the products of the less-developed countries enter Canada duty free. All of the so-called tropical products enter Canada duty free, that is products from the south, and those countries the goods of which are subject to duty have the advantage of the generalized system of preferences. So there is no doubt that the Canadian government and the people of Canada are making a genuine, across the board effort to facilitate the progress of the developing countries by trading with them. Canada in that respect, even in the difficult areas of textiles, clothing and shoes, has a record that is immensely better, for instance, than that of the nation to the south of us in terms of importing for our consumption goods coming from Third World countries as opposed to those made domestically.


George Harris Hees: As the Prime Minister knows, there is a tremendous pressure on Canada and on all developed countries to allow these underdeveloped countries to increase their exports, particularly of textiles, footwear and things of that kind. Does he feel that this country should take the lead, as I believe he was reported to have indicated to those with whom he spoke on his trip, and would Canada undertake such a program and make it possible to import more of those products into this country?


Pierre Elliott Trudeau: Madam Speaker, as to taking the lead, I believe my previous answer indicated that Canada is indeed taking the lead ahead of our major partners in providing access to producers from the Third World, even with respect to these goods. But I must point out to the hon. member, as I did to some of my interlocutors who were asking for increased quotas of these particular goods coming into Canada, that they are essentially produced by three of the Third World countries, namely, Taiwan, South Korea and Singapore, and that if we were to increase the quotas, we would be helping Taiwan, South Korea and Singapore, some of which have higher national per capita revenues than some of the so-called northern countries, members of the OECD.
If the object were to help several of the African countries, it would not be achieved that way unless we continued to discriminate against South Korea, Taiwan and Singapore; or, to put it more accurately, not through discrimination but through bilaterally negotiating quotas with them.

January 30, 1981
Oral Questions


MCDONALD ROYAL COMMISSION
Mr. Svend J. Robinson (Burnaby):: Madam Speaker, I have a question for the Right Hon. Prime Minister. The Prime Minister will know that the major report of the McDonald commission was finally submitted to the cabinet earlier this week and is at present being reviewed by his friend, the Clerk of the Privy Council, Michael Pitfield. In view of the fact that this report examines, among other things, the extent of possible Liberal government involvement in illegal activities by the RCMP and of the lack of accountability by previous solicitors general for the activities of the RCMP security service, what action does the government intend to take to ensure that the report is not effectively censored solely by that very Liberal government in an attempt to remove any potentially embarrassing or damaging references to Liberal cabinet ministers, including the Prime Minister?


Pierre Elliott Trudeau: Madam Speaker, the question seems to me a little tendentious when the hon. member says that the report will be reviewed by one of my friends. I have many friends-not many, but some friends-


Some hon. Members:: Oh, oh!


An hon. Member:: Mr. Canada.


An hon. Member:: You don't have them in England.


Pierre Elliott Trudeau: Madam Speaker, the report of the McDonald commission will not be reviewed by any single individual but rather by a group composed of representatives of the Privy Council Office, of the RCMP and, I believe, of one or two other departments. They will attempt to publish a broad and full report of what Mr. McDonald and his commissioners have said. The hon. member knows that much of the testimony was taken in camera and many meetings were held in camera by the commissioners. On the one hand we wanted them to make a full report without keeping anything secret from the government, and on the other hand we had to make sure we respected the secrecy provisions as the McDonald commission wished, and that is the difficult task which is being undertaken now.
I remind the hon. member that the same thing happened with the report of the Mackenzie committee some 11 or 12 years ago. It was impossible to publish it in its entirety because many of its parts were covered by secret classifications which were accepted by the commissioners themselves, namely, Mackenzie, Coldwell and Pratte. So the same thing will happen this time.
The hon. member will recall that last time, after the abridged version had been released, the commissioners were asked, I believe by the opposition members or by the media people, whether the abridged version was hiding anything which was of partisan interest to the government, and the answer was no. I expect that the same procedure will take place this time.


Svend Johannes Robinson: Madam Speaker, the Prime Minister knows very well that there was no suggestion at the time of the Mackenzie commission of possible substantial wrongdoing on the part of Liberal government cabinet ministers. The Prime Minister seems to be suggesting that somehow, because he has friends in the RCMP who are also reviewing this document, that will assist in the independent review. I suggest that certainly does not restore the confidence of Canadians in that review process.
My supplementary question is this, Madam Speaker. The Canadian people know only too well of the solid Liberal pedigree of the McDonald commissioners themselves. For example, Commissioner Gilbert donated very generously to the Liberal party, while he says-


Some hon. Members:: Question.


Svend Johannes Robinson: My question, Madam Speaker, is this. In view of what some would call this unholy alliance between the McDonald commission and the Liberal government, will the government give serious consideration to permitting at the very least the all-party justice committee of the House of Commons, representatives of all parties on that committee, examination of the full unexpurgated report of the McDonald commission, at an in camera session if necessary?


Pierre Elliott Trudeau: Madam Speaker, it seems to me the hon. member is putting himself in something of a Catch-22 situation. First, he does not think the abridgement will be right or fair. He then points out that the report itself probably will not be fair because those who wrote it have, as he says, Liberal pedigrees.


Mr. Nielsen:: There is no such thing.


Pierre Elliott Trudeau: Well, Madam Speaker, we are proud to be a party of the common people.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: It seems to me the hon. member is questioning the integrity of the commissioners, something which I do not do, and something which I think no one on this side did when we named a prominent NDPer, Mr. Berger, to head a royal commission. We did not discount the results of his inquiry because they were written by a former NDPer. Nor did we discount the Mackenzie report of 1969 because it was written by M. J. Coldwell. I think the hon. member should think a little about what he says before he speaks.


VETERANS AFFAIRS
Hon. Bud Cullen (Sarnia-Lambton):: Thank you, Madam Speaker.


Some hon. Members:: Hear, hear!
January 30, 1981


Jack Sydney George (Bud) Cullen: Madam Speaker, I have a question for the minister responsible for veterans affairs. At one time or another every member in this House has dealt with veterans' concerns and the latest one, which has been a continuing one for some time, is with respect to the length of time it takes to get a hearing before the Pension Commission or the War Veterans Allowance Board. This is not a knock at Dr. Solomon, Mr. Jutras or Don Thomson, all of whom are working hard and who have a good group working with them. But there must be some obvious bottleneck because of the length of time it takes to be heard. As a member of Parliament one hesitates to recommend to a veteran that he go through the appeal procedure, since it takes so long.
Would the minister give some consideration to having an investigation conducted to ascertain just where the bottlenecks are occurring? Do these delays occur with respect to obtaining the medical reports or are they taking too long in getting out the decision? Frankly, can the minister find out why it is that veterans are discouraged from filing applications for relief?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, I am sorry that I have a bad voice this morning; I probably need a spray of some kind!


An hon. Member:: As long as it isn't Agent Orange!


Mr. Lamontagne:: Madam Speaker, very briefly, I had a meeting yesterday with Dr. Solomon, the president of the Pension Commission. We tried to find out exactly where there were delays. I can assure the hon. member that the backlog will most likely be eliminated within six or eight months.


CANADIAN NATIONAL RAILWAYS
Mr. Mel Gass (Malpeque):: Madam Speaker, my question is for the Minister of Transport. It is a follow-up to my question of last Friday regarding the meeting which was to take place this week between Dr. Bandeen of CNR and the minister to consider proposals with regard to the retention of CN Express offices in Charlottetown and other maritime centres. I have been informed that the meeting took place yesterday. My question to the minister is: will he now tell this House if the Express offices in Charlottetown and some other maritime centres will remain open and what level of service can be expected?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, at the request, indeed, of many members, and following a vote in the Standing Committee on Transport of the House of Commons, 1 asked CN to review the situation. They have. I met Mr. Bandeen yesterday for a couple of hours and we went through the entire application of the program with which CN Express is involved. As the hon. member knows, workers who will be laid off will be protected. Some 90 per
Oral Questions
cent of them will be relocated, retrained or pre-pensioned. Great efforts are being made to protect the interests of the communities affected. Agreements and contracts are being signed with truckers. In Sydney, for example, there are 28 truckers and in Amherst ten. In all these efforts I think CN Express is showing great sensitivity in what they are doing.
Of course, a number of municipalities and communities are hurt, Sydney and Charlottetown being two. After these discussions we decided to do something special for Charlottetown, since the only terminal on the island is located there. We also decided to do something special for Sydney, in view of events which have taken place there in recent months leading to a great unemployment situation. So in these two places the terminals will be maintained, but at a reduced level of employment. We have developed a formula for each community, which will be announced on Monday.


Melbourne Alexander Gass: Madam Speaker, I would like to ask the minister how many of the 41 employees in Charlottetown will be allowed to retain their jobs.


Jean-Luc Pepin: That is what will be revealed on Monday when we disclose the formula which will be used in the two localities, Charlottetown and Sydney.


NATIONAL VOLUNTARY ORGANIZATIONS
Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, my question is for the Secretary of State, who I understand is attending the National Voluntary Organizations' meeting today in Ottawa. Can the minister confirm whether that is so, how many of his colleagues will be going with him, and who they are?


Hon. Francis Fox (Secretary of State and Minister of Communications):: Madam Speaker, I am delighted to have the opportunity to respond to the hon. member's question. I thank him for putting it, since I understand there was a motion under Standing Order 43 put earlier this morning which was perhaps misleading. I would like to put the facts before the House.
Basically, the government and the NVO consultation is to take place this afternoon from lunchtime until approximately 4.30. The Minister of National Health and Welfare, the Minister of State for Multiculturalism, the Minister of Consumer and Corporate Affairs, the Leader of the Government in the Senate, the Parliamentary Secretary to the Solicitor General and the Parliamentary Secretary to the Minister of the Environment will be attending this afternoon. There will also be a number of senior officials from the government participating in this meeting with the NVO. I will be addressing the group myself tomorrow at lunchtime. I would be delighted if the hon. member would attend to listen to the remarks I have to make at that time.
6736

January 30, 1981
Oral Questions


Some hon. Members:: Hear, hear!


Walter David Baker: Madam Speaker, I shall probably have his speech in advance.
I have a further question for the hon. gentleman. When he is lingering over dessert at that luncheon, would he put to the officials of that organization the proposition whether or not it would be acceptable to them to have a parliamentary task force, or a select committee of this House of Commons, conduct an inquiry under the appropriate auspices with respect to the volunteer sector?


Francis Fox: Madam Speaker, I think there were a number of proposals which were initiated by our government a few years ago in connection with the National Voluntary Organizations. I know that when the hon. member's party was in power it also had a number of recommendations. These recommendations were not acted upon, in good part because of the successive elections which occurred in this country. We are looking at a whole series of possible initiatives which we would like to take with the NVO, because of the great importance the National Voluntary Organizations play in this country.


INDUSTRY
Mr. Bernard Loiselle (Vercheres):: Madam Speaker, my question is for the Minister of Industry, Trade and Commerce. Can the minister inform this House of the terms of the federal assistance for the Dash-8 and the new PT-7 aircraft engine, of the financial implications of this assistance and of the number of jobs to be created?


Hon. Herb Gray (Minister of Industry, Trade and Commerce):: Madam Speaker, the manufacture of the Pratt & Whitney PT-7 engine will create 1,000 jobs during the life of the program. Federal assistance will be provided through the government's DIP program for the Dash-8 program in the form of guaranteed loans amounting to $450 million, and this program should create 3,000 jobs. What is most important, subcontractors across the country for both projects will get approximately 40 per cent of the contracts under this program, which is very important for the economy of Canada as a whole.


POST OFFICE
Hon. John A. Fraser (Vancouver South):: Madam Speaker, my question is for the Postmaster General. In view of the fact that complaints about mail delivery service to members of Parliament are increasing, and in view of the fact that a great many of these complaints, which come from all parts of the country, result from delays in delivery during the Christmas period-many of which complaints are still coming in-would the Postmaster General be prepared to make public the records showing the percentage of the next day, second day or third day delivery of first-class mail to the different regions of the country, noting the distinction between those delivery rates in the big urban centres and especially the delivery rate between small communities and large urban centres?
Would the Postmaster General be prepared to give an undertaking to this House that he will have prepared for the public a review of the situation and that the review will be conducted on a continuing basis, so that what may be isolated problems of delivery do not create the image of a complete breakdown of delivery? The public is becoming very angry and would like to know the facts.


André Ouellet: Madam Speaker, I shall gladly follow up the suggestion of the hon. member. There is within the Post Office Department a performance rating of postal workers, which shows us just how efficient they are. Of course, there are delays now and then in the daily handling of tremendous volumes of mail. But for each letter which may be delivered late, there are 90 or 92 which reach the addressee on time. I think that once these figures are known, people will understand the extent of the problem and will probably be more tolerant when they hear the bad publicity made in certain quarters against postal workers.


John Allen Fraser: Madam Speaker, I have a supplementary for the minister. Would he be prepared, after suitable discussion, to come before the appropriate committee with officials from both management and, possibly, from the labour unions to answer questions directed specifically at this review as to whether or not the delays and bottlenecks of which the public is complaining arise primarily because there is insufficient personnel to do the work, or because certain parts of the system do not work, perhaps because of inadequate design, because of factors which were not considered, or because there are mechanical or other difficulties? Would the minister be prepared, along with his officials, to discuss with representatives of the opposition before the appropriate committee questions directed toward resolving the difficulty?
January 30, 1981


André Ouellet: Madam Speaker, each year the estimates of the Post Office Department are referred to a parliamentary committee. Obviously, I would not want to shirk that obligation, and 1 will be pleased to appear before the committee along with department officials to answer any question from hon. members on both sides of the House.


PROHIBITION ON PUBLICATION OF PHOTOGRAPHIC &quot;REACTION SHOTS&quot;
Madam Speaker:: I have received inquiries from several hon. members about a photograph taken in the House of Commons which appeared in several newspapers this morning and yesterday. The taking of this photograph is a breach of the agreement which was made between the Canadian Press and the photographers who have been allowed to come into the House. In terms of the electronic journal, the picture constituted what is called in the trade jargon, a reaction shot. Since such shots are not allowed to be taken by the electronic journal, they cannot be allowed to be taken by the photographers who take pictures in the House.
The first thing I did this morning was to contact the director of the Canadian Press. I let him know that 1 felt such photographs could not be taken in the House, that only the hon. member who is addressing the House may be photographed and that, although we allow shoulder shots, those shoulder shots must be taken from the front, that we want the face of the hon. member who is addressing the House to show, and not the back of the hon. member. To answer the queries I received from hon. members, I have dealt with the matter.


Erik Nielsen: Madam Speaker, in regard to my concern over the lines of authority required for the release of those photographs, I am informed by some of the photographers behind the curtain that the photographs are released only upon your authority. Since the entire exercise takes the nature of an experiment, it seems to me that before any hon. member's picture is published in the press the hon. member should be consulted or, at least, give blanket permission. I am concerned about this area because some still photographs may be taken which are not reaction shots but yet are not in keeping with the principles of electronic Hansard, and which an hon. member may not wish to have published.
Perhaps, Madam Speaker, you could consult with the House leaders some time in the near future with regard to guidelines for the release of any of the still photographs which are being taken during the experimental stage.


Madam Speaker:: I share the concern of the hon. member. While 1 suppose it is true that those photographs are published under my authority or with my permission, I do not believe that I could check on a daily basis what photographs will be
Privilege-Mr. W. Baker and Mr. Nielsen
sent out. This being an experiment, obviously there will be some incidents of this nature, and I hope that they will not recur. We were able to determine with the photographers what we consider to be in conformity with the principles of electronic Hansard.
I was not in the chair at the time television was introduced into the House, but 1 suppose that from time to time there was some exchange between those responsible for the broadcasting of the proceedings in the House, the Chair, and the House leaders, as to what was acceptable and what was not acceptable. We will have to follow this same procedure with regard to the still photographs. I can assure the hon. member that even before I received inquiries from hon. members with regard to this particular photograph, I was on the phone to the director of Canadian Press. I saw the photograph while reading my paper early this morning, and I immediately came to the conclusion that we could not allow the taking of such photographs. I will accept the suggestion of the hon. member and discuss the matter with the House leaders, and also with the Canadian Press authorities.


PRIVILEGE
Madam Speaker:: I am prepared to rule on the two questions of privilege which were raised this week, one by the hon. member for Nepean-Carleton (Mr. Baker) concerning an exchange which occurred during question period, and the other by the hon. member for Yukon (Mr. Nielsen), which was rather closely related to the first question of privilege, although it was phrased in more general terms, indeed it was of a rather general nature.
I must say that the arguments I heard Wednesday did not sway the ruling I was prepared to make on that day, but I delayed the announcement of my ruling because the hon. member for Nepean-Carleton was not in the House at the time. Last Tuesday the hon. member for Nepean-Carleton rose on a question of privilege concerning statements reflecting upon the trustworthiness, the integrity, the honesty and the reliability of certain ministers of the Crown. However, it is quite clear that the hon. member did not make any definite accusation in that sense.
As I am bound to do, I listened very carefully to the remarks of hon. members-several took the floor to enlarge upon this question of privilege-more particularly upon that raised by the hon. member for Nepean-Carleton who, it would seem, rested his arguments on a statement allegedly made by the Solicitor General (Mr. Kaplan) before the Special Joint Committee on the Constitution of Canada. The hon. member also

January 30, 1981
Privilege-Mr. W. Baker and Mr. Nielsen said that the Solicitor General's statement had later been denied by the Right Hon. Prime Minister (Mr. Trudeau).
Essentially the question raised by the hon. member for Nepean-Carleton, which was debated by other hon. members as well, including the right hon. Leader of the Opposition (Mr. Clark), deals with conflicting statements made before a committee by two government members. It is relevant to point out that the ministers' statements which gave rise to the difficulty mentioned in the House were made before the committee.
That question therefore places the Chair in a rather delicate situation since it would seem that I am being asked to make a ruling on the proceedings of a committee. Obviously I cannot and I do not want to do that. The fact is, however, that during question period on Tuesday, January 27, the problem was brought to the attention of the House and there is no doubt that hon. members did the best they could. They were very careful not to comment on the proceedings of the committee. It is therefore in light of the remarks heard in the House that I must rule on the question of privilege which confronts us today.
Now, nothing was said during last Tuesday's debate which might indicate that the privileges of hon. members have been affected or that there might have been contempt for the House. Hon. members will agree, I think, that the rules or conventions governing relations between ministers of the Crown are not included in that part of parliamentary law relating to privilege. The same thing applies to commitments which are announced by ministers now and then and which are sometimes changed in a later statement. That may give rise to more or less well-founded complaints or grievances, but it does not constitute a breach of privilege.
As hon. members know, parliamentary privilege is very limited and is essentially restricted to freedom of speech, access to Parliament Buildings, immunity against arrest or molestation, and exemption from serving as juror or witness. In my opinion the point raised in the House by the hon. member for Nepean-Carleton may be a grievance, but it cannot be considered a question of privilege.
On Wednesday the hon. member for Yukon raised a new question of privilege which he described as probably overlapping the preceding one. He presented his argument and raised four questions, each of which asked the Chair to determine whether or not privileges would be breached under certain circumstances.
On the one hand, the House will understand that if these circumstances related to an incident in a committee, the Chair cannot rule unless there has been a report from the committee to the House, and no such report has been made. On the other hand, if the hon. member is raising these questions in general terms, without reference to a specific case, again the Chair cannot rule, since the Chair cannot be asked to rule on a
hypothetical matter. I quote Beauchesne's fifth edition, citation 117, as follows:
Hypothetical queries on procedure cannot be addressed to the Speaker from the floor of the House.
Therefore I cannot find a prima facie breach of privilege in the arguments presented by either the hon. member for Nepean-Carleton or the hon. member for Yukon.
At the same time, however, a number of points were raised in the elaboration of the arguments which claim some attention from the Chair. First, the hon. member for Yukon cited certain passages from Erskine May, for example "Conspiracy to Deceive either House or Committees of either House'', as being examples of what we consider contempt; "Presenting Forged, Falsified or Fabricated Documents to either House or Committees of either House"; "Conspiracy to Deceive either House or Committees of either House"; "Misconduct of Members or Officers of either House as Such-Deliberately Misleading the House"; and "Corruption in the Execution of Their Office as Members".
I agree with the hon. member that these passages describe actions which would be contempts, but i have examined his arguments very carefully and cannot find that he adduced any evidence whatsoever to support any charges of this nature. It is one thing to state the law, it is another thing to offer evidence that a transgression has occurred. Obviously a link has to be established between the two.
Again, in elaborating the argument, the Right Hon. Leader of the Opposition appealed to the Chair as the ultimate guardian of the rights and privileges of Parliament. He is really asking me to disregard the decision of a majority, and this I cannot do, since that decision was arrived at in conformity with the rules of the House. I would point out that it is up to the House itself to determine whether or not a contempt has been committed, and the Speaker's finding of a prima facie case is still subject to the final decision of the House, arrived at through the votes of a majority of members.
The hon. member for Edmonton West (Mr. Lambert) suggested an analogy between procedures in a Committee of the Whole and a standing or special committee. In both cases the Speaker acts only upon a report from the committee, and in both cases matters affecting privilege can be dealt with only by the House itself. I quote again from the fifth edition of Beauchesne, citation 80, as follows:
A question of privilege, on the other hand, is a question partly of fact and partly of law-the law of contempt of Parliament-and is a matter for the House to determine. The decision of the House on a question of privilege, like every other matter which the House has to decide, can be elicited only by a question put from the chair by the Speaker and resolved either in the affirmative or in the negative, and this question is necessarily founded on a motion made by a member.
Finally, the hon. member for St. John's East (Mr. McGrath) appealed to the Chair to protect the rights of the minority, by referring the matter to the Standing Committee on Procedure and Organization. Again I would say that the Speaker protects the rights of all members but protects these rights under the existing rules. I have no choice but to apply the rules. It is not up to me to change them. Any alleged
January 30, 1981

shortcomings in our rules must be dealt with in the normal process by the House itself.


MR. NEIL-NOTICE OF INTENTION TO RAISE QUESTION OF PRIVILEGE
Madam Speaker:: I have a question of privilege in the name of the hon. member for Moose Jaw (Mr. Neil). I have had notice of it but it is not detailed and does not contain the necessary statement to allow me to hear his question of privilege today. I will quote the rule to the hon. member. Standing Order 17(2) reads as follows:
Unless notice of motion has been given under Standing Order 42, any member proposing to raise a question of privilege other than one arising out of proceedings in the chamber during the course of a sitting shall give to the Speaker a written statement of the question at least one hour prior to raising the question in the House.
The notice arrived, but there was no statement of what the question was about. I would be glad to hear from the hon. member at another time, on another day, if he would give me that statement.


Mr. Doug Neil (Moose Jaw):: Thank you, Madam Speaker.
1 wonder if I could have the opportunity to file a special statement on Monday, so that I can bring the matter to the attention of the House at that time.


Madam Speaker:: Exactly. That is what the hon. member should do if he wants me to hear his question of privilege.


POINT OF ORDER
Donald W. Munro: Madam Speaker, I have a point of order which arises from that portion of the proceedings dealing with motions under Standing Order 43. I proposed a motion relating to the agreements between Canada and the United States to which this House had given unanimous consent on the sixteenth day of this month-its concurrence in the agreements as they now stand and its objection to any changes in those agreements.
What I was seeking today was merely a reaffirmation of that earlier unanimous consent. I did not hear or observe any no from any side of the House and yet the matter was not apparently agreed to. Someone must have heard some noes.
If we accept that there were objections to this particular motion, Madam Speaker, it would suggest that the earlier unanimous consent given to that same motion has been nullified. I am at a loss now to understand how, one day, we can agree unanimously, and another day we can disagree on the same motion. I would just like some explanation as to how the situation is to be reconciled, if not in House records at least in my mind.
Order Paper Questions


Madam Speaker:: The hon. member will have to work that out by himself or with other members of this House. The Chair has nothing to do with the substance of these motions. Obviously I heard some noes. The hon. member did not get unanimous consent for his motion. I am not sure whether it was in exactly the same terms as the one which was accepted at a prior date. However, this is a matter for the hon. member to resolve for himself. 1 am afraid the Chair cannot help him.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 1,204, 1,526 and 1,896.
I ask, Madam Speaker, that the remaining questions be allowed to stand.


Mr. Cossitt: With reference to the Solicitor General's answer on May 23, 1980 at page 1350 of Hansard, relating to Professor Hugh George Hambleton of Laval University and which states in part, that Canadians can "cavort with whomsoever they want, etc." is this official government policy and does this include members of KGB and, if so, for what reason?


Hon. Bob Kaplan (Solicitor General):: The full answer given on May 23, 1980, at page 1350 of Hansard states "Canada is a free country, and anyone can talk to whomsoever they want and cavort with whomsoever they want without necessarily breaking any Canadian laws". This statement is a manner of expressing official government policy and should not be quoted out of context as it implies in certain circumstances that Canadian laws could be broken.


Mr. Mazankowski: 1.	What is the estimated loss for each of the next five years on Mirabel Airport?
2.	Is action being planned to reduce the losses and, if so, in what way?
3.	Does the Minister of Transport agree with the proposals to transfer large portions of Dorval's operations to Mirabel?
4.	Is any further expansion planned for Mirabel and, if so, at what cost and over what period of time?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: 1. The anticipated deficit for 1980-81 is $21 million including depreciation of $17,675,000. The deficit for the next four years is expected to be approximately the same in constant dollars.

January 30, 1981
Order Paper Questions
2.	The airport management is making a serious effort to control and reduce operations and maintenance expenditures. Fundamental changes in the Montreal area airports system, which could result in reduced losses at Mirabel, are under consideration.
3.	The proposal to transfer certain flights from Dorval to Mirabel is now being assessed in order to determine the costs associated with this course of action (as well as several other possible options).
4.	No expansion is currently planned at Mirabel. Future plans will take into account the results of the assessment described above.


Mr. Blenkarn: 1.	How many persons are employed at the Great Lakes Forestry Research Centre located at Sault Ste. Marie, Ontario?
2.	Did the government negotiate with the province of Ontario to turn over the research centre to the province?
3.	Does the province contribute to the cost of operating the research centre?
4.	Is the government infringing on provincial responsibility by attempting to provide management services through its facilities in Sault Ste. Marie and, if so, for what reason?
5.	What is the total cost, including depreciation on land and buildings, involved in managing the research centre?


Mr. Roger Simmons (Parliamentary Secretary to Minister of State for Science and Technology and Minister of the Environment):: 1. The Great Lakes Forest Research Centre currently has 152 full-time person years.
2.	There are no negotiations with the province of Ontario to transfer the centre to the province.
3.	The province does not contribute to any operational costs.
4.	There is no infringement on the province by the centre. The Canadian Forestry Service at the Great Lakes Forest Research Centre does not provide forest management services. The Canadian Forestry Service undertakes a forestry and environmental research and development program, co-ordinates federal forestry activities in Ontario, participates in national programs including the Forest Resource Data Program and the Forest Insect and Disease Survey, and provides technical information to the province of Ontario in support of its forest management responsibility.
5.	The total budget for 1980-81 for operating all programs at the Great Lakes Forest Research Centre is $4,583,200.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS

[Stage Direction]
[ Translation]

Hon. Pierre Bussieres (for the Minister of Finance) moved: that Bill C-59, to provide supplementary borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Madam Speaker, Bill C-59 now before the House seeks borrowing authority of $14 billion for the 1981-82 fiscal year. One of its provisions provides that all outstanding and unused borrowing authority provided by the new act, to the extent that it exceeds $3 billion, will expire on March 31, 1982. The bill also seeks explicit authorization for the government to borrow in foreign currencies as well as in Canadian dollars.
Mr. Speaker, much of what I have to say now was said earlier by the Minister of Finance (Mr. MacEachen) when he spoke in the House on second reading of Bill C-54. As hon. members will remember. Bill C-54 contained a provision, Clause 1 if I am not mistaken, that requested precisely that borrowing authority. However, following Your Honour's ruling, the government had to introduce a separate bill that has become Bill C-59, the Borrowing Authority Act. Even though the Minister of Finance has already made those comments, I want to reiterate the main points that he made earlier relating to borrowing authority so that there remains no doubt about why we are seeking $14 billion of new borrowing authority for the fiscal year 1981-82.
All unused borrowing authority for the fiscal year 1980-81 provided by the Borrowing Authority Act 1980-81 will expire on March 31, 1981. Without new borrowing powers the government will be unable to implement its debt program for 1981-82. As hon. members are aware, the size of the borrowing authority is related to the size of the government's financial requirements. It will be recalled that the budget which was introduced to Parliament on October 28, 1980, indicated that programmed budgetary and non-budgetary cash requirements for 1981-82 were expected to be about $11 billion. The basis for the request for $14 billion of new borrowing authority for the next fiscal year is, therefore, this cash requirement along with a $3 billion margin for such contingencies as the possible need to borrow in foreign currencies.
As hon. members will recall, the budget of last October clearly set out the government's strategy of reducing the deficit through restraint in the rate of growth of expenditures. The budgetary deficit is expected to decline from $14.2 billion this fiscal year to $13.7 billion next year and to $11.8 billion by 1983-84. Throughout this period, there are rising sources of funds from non-budgetary accounts that help to finance the budgetary deficit. The most important of these sources is the
January 30, 1981

superannuation accounts which are expected to provide a source of funds of $2.3 billion in 1980-81 and $2.9 billion in 1981-82, growing to $3.9 billion in 1983-84. As a consequence, financial requirements decline more rapidly than the budgetary deficit. They decline from $12.2 billion this year to $11 billion next year and reach $7.2 billion in 1983-84. As a percentage of GNP, the drop is expected to be from 4.3 per cent in 1980-81 to 3.5 per cent in 1981-82 to 1.8 per cent in 1983-84, the lowest level since 1974-75.
The financial requirements arise from the basic fiscal stance and the over-all budget strategy, a strategy which has been justified by the recent economic developments. During the fourth quarter of 1980 particularly, the main economic indicators have shown moderate strength and the actual outcome for 1980 as a whole is likely to be stronger than expected in the fall of last year. This improved economic performance has sustained employment growth in the fourth quarter with a rise amounting to 1 per cent.
Unfortunately, not all the economic news has been good news. The budget speech warned of the possibility of some deterioration on the price front due to rapid rates of increases in food prices or other factors. There are now indications of somewhat more pressure on food prices than had been anticipated, mainly related to crop yields which were below average and lower marketings of livestock.
It will be recalled that in the budget speech, the Minister of Finance emphasized the need to deal with inflationary pressures, and it seems clearer now than it was at that time that inflation is the most serious and intractable problem facing the Canadian economy. Canada, like other countries, is facing a difficult economic situation and therefore the balanced package of measures contained in the budget, with its gradualist approach aimed at progressively bringing down the rate of inflation and promoting employment and productivity growth, provides the only sensible basis for dealing with the present economic situation. To opt for more economic stimulus at this time would inevitably lead to further aggravation of current inflationary pressures and would require abandoning the policy I mentioned earlier of bringing the size of the government's deficit under control.
The other extreme of excessively restrictive policies would also have major disadvantages. Such policies would have high costs in the form of lost output and unemployment. Moreover, implementing such a policy would require some combination of increased personal and corporate taxes or drastic expenditure cuts which would lead to disruptions to important public programs.
Mr. Speaker, I would like to explain now why the legislation proposes that $3 billion of the borrowing authority provided for 1981-82, or whatever amount remains unused if it is less than $3 billion, be exempt from automatic cancellation at the
Borrowing Authority
end of fiscal 1981-82. As the Minister of Finance explained the other day, in recent years most borrowing authority legislation has carried a clause which automatically cancels any unused authority at the end of each fiscal year whether or not new authority has been obtained. In the past when this occurred and new borrowing authority had not yet been passed by Parliament, the government was able to continue with its borrowing program on unused authority obtained in earlier years which was not subject to automatic cancellation.
Since it was not always possible to foresee when Parliament would be sitting or what the parliamentary legislative calendar might be, these old borrowing authorities provided a useful degree of flexibility. During the first four months of the current fiscal year, however, almost all of this non-lapsed borrowing authority was used up as was discussed when we debated earlier the borrowing authority legislation that was adopted by Parliament some months ago. To provide some degree of flexibility in the future, the legislation proposes that all unused borrowing authority provided by the new act, only to the extent that it exceeds $3 billion, will expire on March 31, 1982. So any unused borrowing authority of less than $3 billion will not be cancelled and will be usable after March 31, 1982.
The $3 billion margin for contingencies being requested is in line with the margin that has been provided and deemed necessary in recent years. The financial requirements for 1981-82 referred to earlier exclude requirements for foreign exchange transactions. These transactions can be large and in either direction and can have a substantial impact on the borrowing requirement of the government. A strengthening Canadian dollar gives rise to purchases of foreign exchange and a consequent need to raise Canadian dollars in the domestic market for this purpose. A weakening Canadian dollar, on the other hand, could give rise to the need to borrow foreign currencies to replenish official holdings of foreign exchange which are depleted through foreign exchange operations.
Mr. Speaker, the clause referring to the ability of the government to borrow and repay loans in foreign currencies is a technical one and, as was explained the other day, is similar to a clause that was first included in a borrowing authority bill introduced by the former government in 1979. Over the years, Canada has borrowed and repaid funds in a number of currencies. However, in 1978, Canada made a number of large foreign loans and established standby lines of credit with a number of foreign banks.
The clause was added to confirm Canada's right to borrow in foreign currencies. The Financial Administration Act is currently under review and a clause clarifying the government's ability to borrow and repay in foreign currencies would be included with any amendments to that act. Once such an amendment has been passed, there would no longer be a need for this clause in borrowing authority bills. Recently during the debate on Bill C-54, Clause 1 of which requested borrowing

January 30, 1981
Borrowing Authority
authority, for the information of hon. members, the Minister of Finance set out the government's debt program so far in the current fiscal year and the amount of borrowing authority that has been used. In order to inform hon. members of our current position with respect to borrowing authority, 1 will take the liberty of repeating what the Minister of Finance said at that time.
Up to January 23, 1981, in domestic markets the government has borrowed a total of $8.8 billion, $5.3 billion through the issue of marketable bonds and $4.6 billion through the issue of Treasury bills, while net Canada Savings Bonds redemptions reduced the amount borrowed by $1.1 billion. In foreign markets, on balance the government has drawn the Canadian dollar equivalent of $10.8 billion in Canadian dollars on its standby lines of credit with Canadian and foreign banks. This amount comprises $1.1 billion drawn in December and currently outstanding and a $0.3 billion repayment on these lines earlier in the fiscal year.
Since borrowing authority for the fiscal year 1980-81 was not obtained until July 17, 1980, borrowing up until that date was charged to $2.9 billion of non-lapsing borrowing authority obtained earlier and carried forward. This was reduced to just over $100 million by July 17 when $12 billion in additional authority became available under the Borrowing Authority Act, 1980-81. As at January 23, the amount still available under this act was $5.1 billion. This is more than enough to complete the planned debt program in the final quarter of this fiscal year and a considerable portion of this amount will likely expire on March 31, 1981.
I believe that the information I have just provided along with the information in the recent budget provides members with the pertinent information with respect to borrowing authority for serious consideration of this bill. It goes without saying that when we discuss the bill in committee, much more information will be provided in answer to hon. members' questions.
In closing, I would like to note that this bill is directly and closely related to the budget brought in by the Minister of Finance. I would like to emphasize that when the committee studied the preceding borrowing authority bill the hon. member for Broadview-Greenwood (Mr. Rae) had suggested that such bills ought to be tabled earlier and introduced at the same time as the debate on bills which flow from the budget. I believe that the Minister of Finance did get the message sent by the hon. member and this bill is introduced at the appropriate time along with other budgetary measures.
As such the fiscal policy and general economic policy issues have been debated by this House on a number of occasions in September. There were six days of debate following the budget and a lengthy debate on economic conditions on December 18 before the Christmas recess. In addition there has been some further discussion of these issues as part of the second reading debate on Bill C-54 and in Committee of the Whole we
continued to debate the various income tax measures which in a way are all related to the general economic situation.
Some hon. members may recall that on recent occasions the borrowing authority bill has been the occasion for a quite lengthy debate. I might point out, however, that on these occasions the borrowing authority has not been linked to the budget in the way this bill is, as I said earlier.
The borrowing authority bill may also raise issues relating to the government's borrowing program but I will not discuss these matters in any detail now since, as members well know, all of the details of the government's market borrowings are readily available on the public record. I repeat that there will also be ample opportunities for an examination of the government's borrowing activities when this bill goes to committee.
If hon. members grant leave, I would like to table two copies of a document entitled "Background information concerning borrowing authority for fiscal year 1981-82" which hon. members might find useful to prepare the work in committee. Mr. Speaker, I ask for the permission of the House to table those documents.


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Blaker):: The hon. Minister of State for Finance (Mr. Bussieres) has requested agreement of the House to the tabling of certain documents. Is there agreement?


Some hon. Members:: Agreed.


Pierre Bussières: In conclusion, Mr. Speaker, my wish is that the House deal with this bill expeditiously and adopt it as early as possible.


Bob Rae: Mr. Speaker, I want to thank the hon. member for Calgary Centre (Mr. Andre) for the courtesy of allowing me to speak first in order to keep an appointment in Toronto.
I want to focus my remarks, dealing with the question of the borrowing authority, on the questions I raised earlier during the question period concerning the determination on the part of the federal government to deal with what it regards as the very unique problem associated with a large deficit, a deficit which produces the borrowing requirements the minister has put before us today.
In respect of this unilateral determination on the part of the federal government to change its role in the financing of certain programs which, up until the present time, have been financed by the federal government, I want to urge upon the minister the importance we attach on this side, as he will know from conversations I have had with him over a period of weeks,
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to the establishment of a parliamentary group with the responsibility for studying fiscal relationships, financial economic relationships, and the question of transfers from one level of government to another.
Word has come to us that the Department of Finance has made certain proposals in respect of the funding of higher education.


An hon. Member:: Was that a mole?


Bob Rae: The hon. member asks whether that is a mole. 1 can assure him it is not a mole, it is a number of people in the community who are deeply concerned about statements which have been made. In fact, in answer to the hon. member for Don Valley East (Mr. Smith), it is not a mole, it is the Minister of Finance (Mr. MacEachen) himself who, in his budgetary statement at the end of October, told us that the government intends to achieve net savings in this area, referring to social policy, to help finance initiatives in the other envelopes. He went on to say that because of the statutory nature of much of the spending in this envelope, savings are not assumed to begin until 1982-83. Savings are expected to include reductions in federal transfers to provinces relating to areas coming under provincial jurisdiction. Obviously those people working in areas like education, which is clearly under provincial jurisdiction according to the constitution, read the statement by the minister as a clear warning that the federal government was so concerned about simply reducing its overall economic commitment to the process of transferring from its own jurisdiction to the provinces, that it was university spending which seemed to be the most attractive target.
We now have word that the social development committee of the cabinet is actively considering a proposal which would cut the federal contribution to higher education by $1.5 billion and would lead to a cut over all in the EPF program of some $2 billion.
The accountants in government appear to be in the process of winning out over those people-and I hope there are still some in the government who would include themselves in this group-who look to the substance of the programs being funded and ask the question, not in an abstract way that something must be cut, but what programs need to be funded and how they will be funded. It is not the time for the federal government to suggest that it will unilaterally remove itself from the funding of universities and university research when the Minister of Industry, Trade and Commerce (Mr. Gray) is saying that an industrial strategy is one of the top priorities of the government, at a time when the Minister of State for Science and Technology and Minister of the Environment (Mr. Roberts) is saying that research and development will be beefed up, and at a time when the chairmen of the NRC and other research groups have made it very clear that we face a crisis in funding, planning and strategy in the entire field of scientific research and development.
The federal government should not decide unilaterally to withdraw from this area. We know what is happening in the
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real world and in the real economies of the universities. The federal government has decided to withdraw because it feels it must cut somewhere so it might as well cut where there are no universal programs to worry about.
The Minister of National Health and Welfare (Miss Begin) was quoted outside the House. I do not know whether the quotation was accurate or not, but apparently she was quoted as saying that maybe the university program will be cut because, after all, it is an elitist program; she used the word "elitist". I realize that not everyone of university age goes to university, that in fact the numbers indicate that it is very much a minority. There are those who do not see that the world of science, research, universities and higher education goes beyond simply provincial jurisdiction of education and is directly linked to the industrial strategy of a country. They are making a very serious mistake by not seeing the federal government has a responsibility.
If the accountants and the accounting mentality of the Department of Finance win out over the people who look at the substance of the programs, I think it will be a real tragedy for our universities, our young people and our researchers who will inevitably go to the United States and elsewhere if they do not receive the governmental infusion of support which they so desperately need. It will be a tragedy for the whole country.
It appears the government has taken a decision to get out of these programs, according to the minister's own words in the budget. When one looks at hospitalization, medicare, the Canada Assistance Plan and all the transfers which make up approximately 22 cents of the federal government dollar, which is a very substantial amount of money, I suppose university education appears to be the most convenient target. But it would be a mistake to assume that this will happen without a fight. It will be not only a fight on the part of the provinces, because of the assumption that all of the provinces are wealthy and can equally afford it, but I can assure the minister that it will be a fight from this party.
It is our position that the over-all social policy envelope should not be reduced in its role and in its importance because of the importance of maintaining adequate levels of service, indeed more than adequate levels of service. Also we are concerned about the future of higher education in Canada, of research and development, and the role the federal government must play in the financing of higher education. If the department, the ministers responsible for social development, or cabinet are under the illusion that they can make this surgical incision without a very definite political response, I want to assure them they are mistaken.
It is extremely important to understand that the renegotiation of the EPF and the fiscal arrangements involve not only the relationship between the federal government and the provinces, but also the question of the level of service for specific programs which the government must decide as a political decision will be maintained.
Mr. Justice Hall expressed concerns about the integrity of the medicare program because of the fact that there was no way effectively to establish national standards. It is a dilemma;
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we must all start to appreciate and understand the dilemma of establishing national standards at the same time as having a provincially administered federal program. Of course it is a problem, but also I point out to the government that it will be a very difficult problem in the area of university education. Just as the Pearson government recognized a national concern about medicare and its level of service, there must be a national concern about university education which goes beyond provincial jurisdiction. We should focus on that problem and ask ourselves what are the needs of universities and research institutes from a national perspective.
The government very mistakenly indicated, in the field of urban affairs, that it overstepped the mark and that it would move back. To continue that retreat, faced with some provincial rhetoric, is a very serious mistake. Not only is the relationship between the federal government and the provinces at stake, but also the over-all service and quality of the programs are involved.
Not only is the government cutting back on the activities in the province of Quebec at the University of Laval or the various universities and CEGEPs throughout the province, but it is cutting back on the activities in the province of Ontario at its various universities. For example, it is cutting back $100 million from the University of Toronto. If the federal government thinks it can cut $100 million from the budget of the University of Toronto, or $600 million from the higher education budget for the province of Ontario, without a fight from those of us who are concerned about the quality of education in the province of Ontario, it is sadly mistaken. We think the federal government has a role to play in maintaining the quality of higher education and of research and development.
In closing, I ask the minister to pass on to his colleagues the importance we attach to the establishment of a task force with responsibilities for the fiscal arrangements and various economic transfers between the federal and provincial governments. It would also have the jurisdiction to look into the question of the levels and types of services being provided. In the name of financial responsibility the government may very well be cutting off its own left arm in order to satisfy the concerns of government accountants who look at deficits, and bottom lines, but not at the real nature and importance of the programs being provided.


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


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
The Acting Speaker (Mr. Blaker):: Order, please. Before 1 recognize the hon. member for Calgary Centre (Mr. Andre) I should like to ensure that there is no confusion about the proceedings we are about to follow. After the minister introduced Bill C-59 for second reading and as a result of discussions between some hon. members, I recognized the hon. member for Broadview-Greenwood (Mr. Rae) because he needed to catch a plane this afternoon. He was, therefore, speaking out of turn and not under the provisions of Standing Order 31(1) relating to hon. members replying to the minister. That position, with the rule of unlimited time, now belongs to the hon. member for Calgary Centre.


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, today we commenced the debate on Bill C-59, which is a surprise addition to the government's legislative program as a result of a decision by the Chair with regard to the original version of Bill C-54, the Income Tax Act, to which was attached the borrowing authority. We raised the point that we thought it was out of order, and the Chair concurred. So now we are commencing the debate on second reading on Bill C-59, which is a very simple bill consisting of a single sheet of paper folded over, containing two clauses and four subclauses.
I suppose you have noticed, Mr. Speaker, as I have, that it is always the simple bills which have the most profound impact upon the country. In fact one could almost measure the importance of legislation in inverse ratio to the thickness of the act. The other day we had no trouble in dispensing in about half an hour with a thick bill designated to remove anomalies from existing legislation, but I think it will take a little bit more than half an hour to discuss this question of a $14 billion borrowing authority. This is a colossal sum of money, a sum of money which literally is beyond the comprehension of normal people. It is about 50 per cent more money than was spent by the Government of Canada when the present administration was first elected some 12 years ago. It represents a staggering new edition to the national debt.
Mr. Speaker, I want to address my remarks today to this question of the deficit and the national debt and to what I think needs to be done, and done quickly, if we are not to saddle future generations of Canadians and future governments with obligations and restrictions which will preclude them from making life as comfortable as Canadians and the government of this era is attempting to do.
The total deficit of the Government of Canada, as published in the latest edition of the Public Accounts for the fiscal year ending March 31, 1980, shows the liabilities of the government at that point as a colossal $106 billion. The accumulated deficit is $68,600,000,000, with apparently some $37 billion of reported assets. But, Mr. Speaker, when you look at the assets you wonder if, in fact, $37 billion is real or realizable. For example, the Canada Mortgage and Housing Corporation has $10 billion worth of assets. As everyone well knows, those assets are sitting idle in many cities right now because of the fact that the owners of CMHC mortgaged homes have simply walked out of them. Indeed, previous auditors general have pointed out that the assets of the Government of Canada, as declared in the Public Accounts, are inaccurate. Mr. Mac-
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donell made quite a point of that in a report of his a few years ago. It has not been rectified yet.
As I said, the accumulated deficit is a colossal $68,600,000,000. If we translate that into the situation of an individual Canadian, it would represent a personal debt equivalent to something in the order of 25 per cent more than his annual income. That is not disposable income I am talking about but annual gross income, given obligations and so on.


Mr. McRae:: Not nationally, gross national product though.


Harvie Andre: The hon. member opposite says "Not nationally, gross national product". We have not quite reached the stage in this country where the government has total control over every penny of gross national product. We are talking about the government. That gross national product to which the hon. member was referring is my income, his income, and the income of other citizens. The Government of Canada has not yet reached the point at which it has first call on every single dollar of a citizen's income. At least not yet.


Paul Edmund McRae: It is a smaller percentage than in Diefenbak-er's time.


Harvie Andre: The hon. member talks about it being a smaller percentage than in Diefenbaker's time. He is again utilizing the fictitious and phony comparisons which have to do with the fact that when the war ended there was no question that Canada had a larger debt proportionally than we do today, as did all free nations of the world which fought against totalitarianism. The battle cost money, and they had a deficit. Since the war that deficit has been steadily reduced, until about 1975. Until then the Diefenbaker era, to which the hon. member was referring, saw the total national debt on the same downward plane, being reduced year after year. Since 1975 the opposite has been occurring. If the hon. member would like to see for himself I would refer him to the Public Accounts. For March 31, 1980, there appears a chart in the Public Accounts which shows the accumulated deficit as a percentage of gross national product. In 1976 it was 14.1 per cent; in 1977 it was 15.5 per cent; in 1978 it was 18.9 per cent; in 1979 it was 24.3 per cent; and in 1980 it was 26.4 per cent. Based on the deficit of the year we have just finished it will be in excess of 30 per cent at the end of this fiscal year. So the hon. member ought to look at the facts before making those specious comments.
The reality is that the deficit, as a proportion of national debt, is increasing at an alarming rate. The government's deficit this year is $14.5 billion. By comparison, the United States is looking at a deficit of perhaps $40 million. And they consider that astronomical. Both the Democrats and the Republicans consider that an unacceptable deficit. All U.S. politicians during their last election were saying they had to bring that deficit down. And their economy is ten times the size of ours. If they had the same kind of deficit which Canada has, they would be looking at a deficit in excess of $160 billion. They consider $40 billion, which is one-third of ours in relative terms, as astronomically high about which something must be
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done. Yet the hon. member opposite says, "What the heck. We only have a $14 billion deficit. That is not a serious problem." I hope he was just exchanging partisan debate there.


Paul Edmund McRae: We will get up later on and explain.


Harvie Andre: I hope his comments do not represent the mood of the government and its supporters. Indeed, it will be very tragic if something is not done about this deficit, and done soon. The disturbing thing about this deficit and the accumulating debt is that they are not as a result of apparent policy. Mr. Speaker, you were here in this House, as I was, in 1974-75. 1 can recall the then minister of finance, John Turner, and subsequently Donald Macdonald, saying that the government was engaged in a program of restraint. They said they were determined to keep spending below the growth in the gross national product. Since that time the deficit has gone from 14.1 per cent of the GNP to over 30 per cent. It has more than doubled, as a percentage of GNP, during a time when every single finance minister emphatically stated in the House that he was dedicated to government restraint and to holding the deficit in line. They were either not telling the truth or they were simply not backed up by the apparatus of government and by their party. No one provided any back-up to these policy statements. In a sense, it was a kind of lie as well.
What is the problem with a deficit? Why is it not a good thing? After all, it does not hurt you or me immediately. The money which is being talked about is meaningless. Once you get past talking about a few thousand dollars most of us cannot comprehend these large amounts. After all, no one is digging into my pockets for it, nor into the pockets of my constituents. Apparently government is able to get it somewhere so why should we worry about it?
Is it really a matter about which Canadians are concerned? It most definitely is, in a democracy. We either need a government which recognizes the problems and concerns itself and then acts in accordance with the best wishes of the nation, or we need a concerned public which forces government to act in the best interests of the nation. Based on the performance of this government we need that informed public. We need a public which is aware of what is happening, aware of the damage that this kind of continuous deficit financing can cause. We need a public which will bring pressure to bear because, if it does not show up at the polls as something the government should do, it will not get done. We know that much from watching the operations of this particular party which is in power.
The Economic Council of Canada in its Seventeenth Annual Review, its most recent review, discusses the question of deficits. In fact I am about to refer to a section entitled "The Question of Deficits". The section holds out some arguments for and some against, without taking a view one way or another. It states:
The simplest and perhaps for some the most forceful argument against deficits is that future generations must pay for them and that they ought not to. If the

January 30, 1981
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deficit is directly or indirectly financed through foreign borrowing that is not used for productive investment but for immediate consumption, then future generations will be burdened.
And the section goes on. There is no question that it is fundamentally immoral for the government to run up deficits which will burden the next generation of Canadians with the obligation of paying off those deficits. It is especially disturbing when we burden those generations not for capital investments or investments in research and development, the results of which would be of benefit, but burden them with the costs of paying for the gasoline which we are using today.
The Liberal party has made a decision that we shall subsidize crude oil which is imported from offshore. By running a deficit we are asking the next generation to pay for the gasoline which we are using in our cars today, and that generation would like to have money left over to buy some gasoline for themselves. Is that moral? Is that the proper behaviour for responsible governments or Parliament to countenance and accept? I submit that it is not.
Another argument against deficit financing is that it pushes out other forms of financing. When the government borrows money from the market, then clearly it makes that money unavailable for other purposes such as investment in new plant or equipment which would generate jobs and so on. By taking this money out, the government drives up interest rates and reduces the savings which are available for investment in capital equipment.
Granted there is the view, which some members of the New Democratic Party support, that deficits are stimulative, that if the government increases its deficit by borrowing it will spend more, thereby increasing demand in the economy and causing growth in the economy which results in more people working, which generates more money and therefore more savings, and the savings provide the money which the government uses to finance that extra deficit. So the net effect of increasing the deficit is to the benefit of the economy, and we are merely using our money over and over again.
The problem with that reasoning can be illustrated through the pyramid schemes which people dream up from time to time. For example, one receives a letter in the mail which says, "Here is the address of the person who sent the letter and if you send that person a dollar and send this letter to ten other people each one will send you a dollar." Of course, those people will extend the letter on to another ten people. It is a marvellous scheme because one only pays a dollar and receives dollars from ten other people, thereby making a very good profit.
The person who starts the scheme makes money, but common sense indicates that at some point in time the pyramid must collapse because an infinite number of people is required to make the system work, and they must have a dollar in their pocket and 17 cents for a stamp. That is what the government is promoting. It is saying that it must increase the deficit which will enable it to spend more, which will put more people to work, which will cause the economy and savings to grow and this will create money to finance the increased deficit,
since it is our money anyway. And as a result of the whole ball of wax, we are better off.
This is the theory which we have been following for the last six or seven years. It is a pyramid scheme. And each new finance minister who comes along says that we must cure our current unemployment situation so we must spend more money. And there is a raft of ministers, 33 of them, each with hundreds of civil servants who are dreaming up beautiful schemes to generate employment, schemes such as LIP, LEAP, LAP, community services and so on. There are tons of these schemes which are all marvellous in terms of their impact.
These proposals come from civil servants who say, "If only we would spend another $350 million here and $400 million there, and another $600 million there, we will generate so many jobs and these jobs will generate taxes and save money which brings in more financing. For seven years we have been running this pyramid scheme. Unfortunately, countries are no more immune to the realities of that kind of scheme than are our families, businesses or individuals. It cannot be done. The Canada Gazette is full of individuals who try to work their financing in this manner.
People obtain a Chargex from the Royal Bank and spend to the limit. When the bank asks for the money, these people merely go to the Bank of Nova Scotia and get another card and use the proceeds of that card to pay off the card of the Royal Bank, and then they go over to the Bank of Montreal and obtain a Master Charge and then back to the Bank of Nova Scotia. They keep going and thinking that it is a marvellous deal because they merely have to ask for more money. Eventually these people who are asked for the money say, "Whoops! No more, sorry". Then the collapse comes and they are off to the debtor's court.
This scenario also applies to countries. There is a limit. I am not suggesting that we are at the limit, but I am suggesting that by carrying on in this manner of borrowing more and more each year, and increasing the deficit year after year, we will reach that stage. There are countries in the world which are at that stage right now. On the face of it these countries should be as prosperous as we are, but they are not, simply because of the feeling of their governments that they could spend their way to prosperity. The reality is that there is no way one can spend oneself into prosperity. One must earn one's way to prosperity, and this applies to individuals, families, businesses or countries.
The Keynesian theories which are quoted and utilized by the apologists to justify these deficits simply do not work. Most responsible economists recognize this fact. Perhaps the theories were never given a chance to work because while governments have to increase the deficit or spend more to put the economy on the rise, they hate to run surpluses or, in other words, spend less to slow things down. Thus the government is always working on one side of the equation and never on the other side. In defence of Lord Keynes, he said that we must work both sides of the fence and that we must be prepared to
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run a surplus and hold down spending in order to take some of the heat out of the economy.
Probably more important is the fact that the Keynesian idea of deficit financing for growth is fundamentally inflationary. It has an inflationary bias because it works on the concept of putting out more money to stimulate demand which brings on more supply; supply increases to satisfy demand; that brings on jobs, economic growth and so on. The reality is that if you increase demand the price goes up and, as a result of that price increase, more people get into the business of supplying the goods. The price increase itself is inflationary. We all know that prices do not go down; they go up. The Keynesian approach is fundamentally wrong. I should not say it is fundamentally wrong but it is not the most appropriate because it has that inflationary bias.
I should like to consider now the question of how this deficit is financed. We have a borrowing bill which authorizes the government to borrow domestically and to borrow foreign savings. There are three ways available to the government and two of them are available to you or I.


Mr. Knowles:: You or me!


Harvie Andre: To you or me, Mr. Speaker. I apologize to the hon. member.


Stanley Howard Knowles: That is worse than splitting an infinitive!


Harvie Andre: That is right, and I could have committed that error. The deficit can be financed through borrowing from you and me who have saved our money. The deficit can be financed by borrowing the savings on the foreign market which is money that non-Canadians have saved. The deficit can also be financed by the federal government borrowing from the Bank of Canada, in other words, by printing money.
None of these methods is cost free; every one of them carries a burden. Every one is an obligation that has to be borne by those who come after us, the next generation of Canadians, the next government.
The same rules apply to the Government of Canada as apply to Chrysler, Massey-Ferguson, or the Andre family. The only difference is time. Because it is so large the government has the inertia that can carry it on. It moves at glacial speed. When standing still it is difficult to recognize what is happening without fine instruments. For individuals it can happen quickly and they can feel it. Business has a little more inertia than individuals but less than government.
In borrowing the savings of Canadians to finance this deficit, the Government of Canada is almost involved in a fraud. Let us consider what is happening today. To finance part of this deficit the government is selling savings bonds to provide the needed cash. Canada Savings Bonds pay roughly 12 per cent per annum interest. A rough average marginal tax rate in this country is 331/3 per cent. Let us take one third of
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income as being a rough marginal tax rate. Today the inflation rate is 10 per cent.
If you start the year with $1,100, an inflation rate of 10 per cent will leave you with $1,000 at the end of the year; otherwise you are going backwards. If you put that $1,000 into Canada Savings Bonds you will have $1,120 at the end of the year, but the government designates that $120 as income, as so it is taxable. If your marginal tax rate is the average, that means you pay $40 tax on the $120 interest, so you are left with $80. You have actually lost $20 of your capital to the government. It has defrauded you of your capital.
It is absolutely amazing to me that we Canadians save as much as we do. We are very good savers so the government is fortunate. It is able to continue with its profligate ways and spend, spend, spend, because millions of Canadians are willing to save their money and let the government use it. The government is defrauding them because at the end of the year they have less than when they started.
That is immoral to begin with, Mr. Speaker, but it is also extremely dangerous, and that fact is becoming widely known.


Mr. Evans:: The first $1,000 of interest is tax-free.


Harvie Andre: The hon. member said that the first $1,000 is tax-free. Let us then take savings of $100,000 as an example. I am sure that as a responsible economist the parliamentary secretary would not argue with the fundamental premise I was putting forward. I notice he is shaking his head affirmatively.
It is very dangerous for the government to rely on people being willing to have their capital taxed away year after year after year. It is immoral, but it is also dangerous and that danger is being recognized.
In the Public Accounts the amount of Canada Savings Bonds is shown to be decreasing. In 1979, $19 billion worth of Canada Savings Bonds was outstanding; in 1980, $18 billion was outstanding, and I have forgotten the latest figure but I know it is less. The public is starting to wise up to the fact that the government is defrauding it of some of its capital, and the amount of money being put into that debt instrument is decreasing. The government then has to pay more interest for money, and in turn that means that debt management becomes much more difficult.
Foreign savings are worse in many ways than domestic savings as a means of financing the operations of government. When the interest is paid on foreign savings, it leaves the country altogether. The cash is collected in this country, it leaves, and so is not available to finance projects that would provide jobs and growth in the country. We are suffering considerably right now-


An hon. Member:: Let the multinational oil companies take over.


Harvie Andre: The hon. member talks about national oil companies. What about a national automobile company? What is sauce for the goose is sauce for the gander. Recently I received a letter from an individual which I hope to put on record one

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day. He suggested a national automobile program which would assess each automobile a $500 fee. The money would be given to "Auto Canada", a new Crown corporation which would use it to buy a multinational automobile company. That sounds like a great idea. We could do the same thing with textiles, mines, petrochemicals-you name it. It is a heck of a deal, and I cannot understand why this government has not extrapolated the National Energy Program into these other methods.
The third option, that of financing the deficit by printing money, is a fraud. If the amount of money in this country increased by 10 per cent tomorrow it would mean that everything was worth 10 per cent less immediately. Money is just not a medium of exchange for goods and services. When the government decides it needs cash in order to operate and do all the good things it has in mind, and asks the Bank of Canada for the cash, all it is doing is dipping into the pockets of Canadians and defrauding them of part of their assets. It is stealing assets from individual Canadians for its own political purposes. Obviously it is highly inflationary and, as everyone knows, the level of inflation always falls hardest on those who can least afford it, the elderly, those on fixed incomes, and so on.
There is no pain-free way of running these kinds of deficits. There is no pain-free way of reducing them. The longer the government goes on accumulating deficit after deficit and adding to the national debt, the more difficult and the more burdensome will be the eventual repayment. No matter how imaginative governments might try to be, no matter how imaginative programs of the bureaucracy might be, the reality is that there is no pain-free way to reduce these deficits. If we finance our gasoline today while running this deficit, there is no alternative for future generations. They will have to pay. That fundamental fact cannot be dismissed. If we were using the money to invest today in an infrastructure or something of long-term benefit to the country, for instance, science and technology, education, what have you, that would be a different story. If that were done, then there is a payout, Mr. Speaker. It is the difference between an individual going to the bank and borrowing $10,000 for a trip to Tahiti or borrowing $10,000 to buy a backhoe. He is in debt $10,000 in both circumstances. But, after his trip to Tahiti, all he has are his memories. After his backhoe is in operation, he has something which can generate income and use to pay off his loan.
What this government has been doing to the country is going into debt year after year after year to finance the equivalent of trips to Tahiti. What we have are wonderful memories but no fundamental strength or investments from which to generate income to pay off these debts.
I come back to the area of science and technology as being a classic example of the foul-up. Nothing is more tragic, and nothing will be as damaging to our future ability to sustain growth and opportunity in this country than the failure of the government over the last ten years to invest substantially in
science and technology in Canada. Surely there could not be a thinking person anywhere who does not recognize that technology is the base upon which we have to build as a nation. There are three fundamental strengths which Canada has: technology, our resources, and our food. We have neglected the technology side terribly, and right now we are kicking the blazes out of the energy side. Because of this neglect, future generations will have to pay a tremendous price.
How do we go about handling this deficit? How do we go about ensuring that next year we do not come back with a borrowing bill that says the government wants to borrow $17 billion, and the year after that $22 billion, and the year after that $25 billion? On and on and on it will go, which is just a repetition of the pattern we have been going through. How do we make sure that does not happen? I know in the budget address of October 28 the government said that that is not the plan, that it will be spending less. But that is what John Turner said in 1974. That is what Donald Macdonald said in 1975. That is what Jean Chretien said when he was minister of finance. They have all been saying that since I have been here. It has been a constant theme of every single finance minister. All we have heard from ministers of finance is, "We are going to bring down the deficit. We are going to hold government spending below the GNP. We are going to bring Canada's finances into good working order." Every minister of finance since I have been here has said that. Yet here we have a deficit of $14 billion. Last year the deficit was $11 billion. The year before that it was $8 billion. These are the amounts they were looking for in terms of borrowing authority. The record says that next year the amount will be $17 billion. That is what the record says, and that is what it will be unless something changes.
How do we reduce this deficit? How do we start paying off the national debt? There are two alternatives. We can either raise taxes-raise money, raise revenues-or reduce expenditures, or both. How do we raise revenues? Can you raise taxes, Mr. Speaker? Is that method available to us? I do not think it is. I do not think raising taxes will in fact generate any more income. On the contrary it will probably result in a loss of income. The explanation for that is perhaps not that simple, but it is based on the concept that we are already collecting more revenue. The taxes in this country are already higher than Canadians are willing to pay. We are already trying to collect out of the hides of Canadians for the benefit of the national government more money than the people are willing to pay. In a democracy, that cannot be done. It probably cannot be done under a dictatorship or under a tyrannical regime. The theoretical base for this, as many in this House would be aware, has recently achieved some prominence among economic schools of thought, which are sometimes referred to as neo-conservatives in their approach. They are sometimes referred to as supply-side economists. There are other names.
If one were to make a graph of government revenues versus tax rates, one thing you know about that graph is that it goes through zero at zero per cent and 100 per cent. In other words,
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if the government tax rate were zero per cent, obviously government revenues are zero. The same thing is true at the other extremity. If the government tax rate is 100 per cent, revenue is zero as well. Obviously a government cannot tax at a 100 per cent rate. That is a theoretical extreme which is never achievable. If the government takes it all, there is nothing left.
In between those two extremities is a curve of some sort. It means there is an apex of some sort. There is a point beyond which increasing taxes actually result in a reduction in revenues. Where is that point? I do not know. Karl Marx said that apex was 30 per cent. He said that once governments start taking more than 30 per cent of what people earn, society starts to break down and fall apart. I do not think that Karl Marx was right in that theory, as in most other things, because we have now reached the 40 per cent level and we have not quite reached the breakdown stage. But then, who knows? Societies move at glacial speed. Maybe we are on that path and it is simply occurring because we are a part of it and we do not recognize what is happening. The anecdotal evidence to support that contention is everywhere. Former U.S. President John Kennedy, when he reduced taxes in the United States in response to a political promise, was somewhat surprised and gratified to find out that in fact revenues went up. The reduction in taxes was such a stimulus to the economy that income from that reduction more than made up for the loss of revenue due to that reduction.
The ending of slavery and the slave economy was based upon this concept as much as anything. It was not quite as moral a question as sometimes we think it was when we look back. The reality is that the British plantation owners in the early 1800s discovered they could get more work out of the slaves by paying them a salary than keeping them as slaves. As slaves they were essentially taxing their efforts at a very high percentage, probably 80 per cent, because they fed them poorly and sheltered them poorly. In essence, each slave was paying to his owner a very high marginal tax rate. When they abolished slavery and put them on salary, they found they were a lot more productive. It was the same as reducing the tax.
Nikita Khrushchev found the same to be true in Russia. When he told the farmers on the communes that, if they wanted, they could have small patches to grow their own vegetables, either for their own use or for sale in the markets, lo and behold vegetable production shot up. That was nothing but a reduction in taxes. They were telling them they could use part of their time to generate income, that they did not have to devote 100 per cent to the communes. Being able to devote that time to their own activities was, in essence, a reduction in taxes.
Further evidence that we are now taxing people beyond their willingness to pay is the growth of the underground economy, as it is referred to. This is the barter system or cash economy which is beyond the reach of the tax man, because there are no
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records. In a study by a University of Michigan economist, he found that 27 per cent of the United States economy was an underground economy. The GNP of the United States was a lot larger than their equivalent to StatsCan had assessed it to be because of this underground economy.
Every individual knows of instances such as the lawyer saying to the carpenter, "I will make up a will for you, if you will put a new bar in my basement." They work out that little deal and the transaction does not show up in any one's income tax statement. No tax is paid. It does not show up in the GNP because it is part of the underground economy.
That kind of bartering goes on everywhere. I wonder how many families have maintenance or cleaning people who are willing to work for them at a salary less than the going rate, provided they are paid in cash. That goes on everywhere in this country, and we all know it. The reason governments and economists started to pay attention was because of the strange phenomenon that was occurring with the growth of plastic credit cards. In theory that should have resulted in less need for the folding green stuff, yellow, orange or whatever we are now using, but in fact the amount of cash in society was actually increasing. It is being used by people operating in this cash economy which is beyond the reach of the tax man.
Why are they doing that? It is because the tax man is collecting more than they are willing to pay. It is as simple as that. In a democracy you just cannot tax people more than they are willing to pay.
Something else which concerns me is that governments are collecting what I refer to as sneaky taxes. Those are tax expenditures forced on individuals and the economy which never show up in a budget, in the estimates of government spending or in any other way by which the public can become aware of them. A good example of what I mean by a sneaky tax is the PetroCan tax. Petro-Canada has today made an offer to buy out Petrofina. Where will they get the money? They will get it through a special tax of up to $4 on a barrel of crude oil in this country.
The government says it cannot afford to negotiate a higher price with the producing provinces because of inflation and so on, but it has found a way of putting on this special PetroCan thing. It will not be a tax in the sense that it will show up in the Public Accounts or in the Blue Book, the estimates we get each year. It is going into a special account. No one will see that tax on their T-4 slip or have any measure of it. This is money the government has decided to spend instead of us as individuals.
When the press reports on government spending, that figure will not be in there. The minister will be able to say the government is holding down spending, that it has only grown by so much. That will be because it has decided not to count this other figure. It will just be put off on the side.
The crude oil import subsidy program is exactly the same. It is a special little account off on the side which never shows up. There are scores of these things.


Paul Edmund McRae: It is part of the $14 billion debt.

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Harvie Andre: The hon. member ought to do his homework. It is a special account. It does not have anything to do with this $14 billion, or with the Public Accounts of Canada. It will not show up in public accounts. It is a separate item. It would show up if we had a national account, something we should have.


John Leslie Evans: We do.


Harvie Andre: The parliamentary secretary says "We do", but you have to be a real ferret to find it. The government has no interest in having the people base their spending on national accounts.


John Leslie Evans: It is in the budget.


Harvie Andre: I know the Minister of State for Finance (Mr. Bussieres) and the Minister of Finance (Mr. MacEachen) said it was in the budget. They said that on a public accounts basis our spending this year will be less than the increase in the gross national product, that it will only be 12.8 per cent, whereas it is anticipated the GNP will go up by 13.7 per cent. If you look at the national accounts basis, which they never mention in their speeches and which does not show up in press releases, you see that spending is going up by 15.9 per cent, which is quite a bit more than the increase in the gross national product.
That is a direct contradiction of promises made by the Prime Minister (Mr. Trudeau). Every year he repeats that spending will be held to less than the growth in the gross national product. It just is not true. It is not held to less than the GNP, it is more. We are not allowed to say that in this House because it is not parliamentary. However, if it waddles and quacks like a duck, it is a duck. I call it a lie.
There are all kinds of sneaky taxes which the government never talks about. Loans supposedly made to Crown corporations never show up because they are loans. We know they will never be paid back because a Crown corporation will not have the ability to do so. An example is the St. Lawrence Seaway. After the debt builds up the government says it will convert it to equity, and zippo, it disappears like magic, as though it were not really government spending.
Lotteries are a form of taxation. The government uses this money, which comes out of your pocket and mine, to spend. For some people it is a fun way of collecting taxes. Some may feel, 1 don't, that it is fun to bet on lotteries, but it is still a tax and does not show up in the government's spending.
There are other even more sneaky, almost sinister in their implication, taxes which the government imposes through regulations. For example, if you are going to build a pipeline or do some exploration work offshore, and this in fact is part of the National Energy Program, you have to contribute to a fund for environmental protection. I do not argue against that, but it is a tax. It does not show up in the accounts or the spending of Canada.
When the government appoints a new regulatory agency or tribunal before which people must apply and which must hold
public hearings, the result is they end up hiring scads of lawyers at $200 an hour, the going rate for a half decent lawyer these days. If you want a good lawyer, it will cost you $1,000 an hour.
There are hundreds, thousands, millions and, indeed, billions of dollars being forced on the economy by government decisions, and it is all non-productive expenditure. This is just like a tax. It does not produce goods and services individuals want. It has been estimated in Canada that this kind of government enforced expenditure accounts for $15 billion, at least $5 billion of which is waste, with $10 billion contributing to making life safer and so on.
The fact is that the over-all tax rate on our society imposed by governments is much more than 40 per cent, and that is the total government take that is talked about in this budget as being taken out of the economy. The fact of the matter is that it is well in excess of 50 per cent, given all the other hidden taxes, regulatory expenses and what have you.
If we can ever get to the reason, I suggest it is that the public just does not know; people are not aware of this. We have to work like dogs for weeks and months, spend all kinds of time in the library pouring over all kinds of books to try to get even a hint of what is going on. One can get a general picture, but it is very difficult to get any accuracy, and the access to information bill is not going to help.
The reality is that in order to bring down this deficit, avoid saddling future generations and let future governments have the possibility of some independent action, this government will have to do something about spending. It will have to bring spending under control, and not just by moving it off to other sectors, which is what it is planning to do in terms of this transfer elimination of $1.6 billion in assistance to secondary education. That will not do it. The government cannot get rid of it by putting it off into separate accounts-the PetroCan account or the import subsidy account-so it is beyond the public eye and claim it is really doing something about expenditures. That does not do anything. That does not work. It makes things worse.
Every single economist or group that has looked at the question of government spending has ultimately arrived at the conclusion that the first thing which needs to be done is the adoption of a policy of openness and honesty about the spending process. It is must be brought into the light of day so the public really knows the cost of things. If the public really knows the cost and really recognizes that it will have to pay, and still asks for whatever it is, that is fine because that is not inflation. When they do not really know and when they think they are getting a free lunch and, therefore, ask for these new government services without recognizing that they are paying for it themselves, then we get into this inflationary thing. People are not willing to pay then. They go to the underground economy. If they belong to a strong union, they demand that their after-tax salaries stay the same even though production does not go up. If they are businessmen, they add it on to the
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price. Everybody protects himself, so when the government tries to play these games, all it does is adds to inflation and again burdens the future generation.
The government must be open and honest about the spending process, and it must do that soon. I would have government members re-read the Auditor General's report of 1976, and re-read the 1974 annual review of the C.D. Howe Institute. They should re-read the final report of the Lambert commission on financial management and accountability and, for goodness' sake, start applying these recommendations soon. It is not enough to stand up here year after year after year saying we are in a period of restraint and the government is bringing government spending under control.
So help me, since I have been here, and certainly for the last five years, every single minister of finance and president of the Treasury Board has said the same thing: "We are bringing government spending under control, and we are going to reduce the deficit." Every single one of them has made that statement, yet the deficit keeps growing and growing, the burden on the Canadian public keeps growing and growing, inflation keeps growing and growing and unemployment keeps growing and growing. We are on a crazy treadmill that is leading to disaster. We are like Massey-Ferguson, fundamentally sound and fundamentally well managed, but in debt beyond our means to repay and no way to get out of it. Unlike Massey-Ferguson and Chrysler, we do not have a big brother to go to for help. I suppose we will not be here and it will be the next generation that pays, so what the heck? In the meantime the government will have received its pats on the back.
To this day John Turner and Donald Macdonald are said to be great fiscal conservatives because they made all those speeches about how they were controlling expenditures. I heard their speeches, as did everybody else. Those two are great fiscal conservatives; that is their reputation. Yet, if you look at the history of what happened when they were here, you will see that that is when the system really went to pot. These great fiscal conservatives were the ones who are now making life so miserable for the current Minister of Finance, who I think is a sincere and honest man and would like to do a good job in the portfolio he is now managing. He is finding it darned difficult because of the job done by those who preceded him.
Difficult or not, I hope the Minister of Finance has the backbone to make tough decisions without letting ambition get in his way in terms of future higher offices he might have in mind. I hope he will make the tough decision of bringing spending under control so that a year from now we are not back here again debating borrowing authority because the government needs a "mere" $17 billion to sustain itself and pay for those wonderful, marvellous programs the Minister of Employment and Immigration (Mr. Axworthy) has thought up such as LEAP, LAP and so on.
I close with that plea. I do not mean to cast aspersions on the integrity of the Minister of State for Finance or the Minister of Finance, but I for one have listened to speeches identical to his in terms of bringing spending down, reducing
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the deficit and all those things. 1 have listened to that same speech essentially at least five times over the last five years. The results have been directly the opposite. Quite frankly, 1 will wait to be shown because I cannot accept at face value the statements being made. 1 hope I am wrong; I hope they are right, and I hope for once we will have a Minister of Finance who will put political responsibility ahead of political expediency. But I doubt that, considering what he has done in terms of the National Energy Program. In that respect he has certainly put political expediency ahead of what is good for the country. Thank you, Mr. Speaker.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I hope we would have had a further intervention on the part of government at this stage. After all, it is the government that is trying to justify the authority to borrow. It is not up to the opposition to prove that it should not be given that authority. This type of bill has been pushed into this position because- and this is supported by my memory and participation in debates over a number of years-the government has decided to be cute. This year's effort is an attempt to tuck it into an income tax bill. I do not know where the mandarins in the Department of Finance got the idea that somehow or another they should be able to slide things past Parliament.


John Leslie Evans: It is a question of precedent.


Marcel Joseph Aimé Lambert: It is not a question of precedent, as the Parliamentary Secretary to the Minister of Finance (Mr. Evans) just said. There have been changes in the rules of the House. 1 remember the borrowing authority and appropriations bills which were debated in the House before 1969, when there was a habit of tucking into a bill and on rare occasions the government would admit to the necessity of increasing its borrowing authority. It is only with the advent of monetary and fiscal mismanagement that we have seen borrowing authorities grow and grow as deficit upon deficit have piled up. It is almost impossible to remember whether the accumulated deficit is $50 billion or $60 billion. What will we be looking at in the accumulative spending programs of the government for this year and next as a result of the pressures of inflation and the ever-present government attempt to scramble and scramble?
I remember in 1963 when the new Messiah on the financial horizon, Walter Gordon, came in with a total budget of $6.3 billion. Since that time we have experienced a continuing escalation of budgetary excesses, notwithstanding the supposed efforts of the present Prime Minister (Mr. Trudeau), who technically heads the administration of today. In a fiscal sense he does not care a tinker's damn what happens to the economy, so beset is he with chasing the greatest red rabbit-and I am not referring to a red herring-of constitutional change down the trail ahead of the Canadian public. Nero fiddled while Rome burned; in an economic sense the Prime Minister is playing entire symphonies of irrelevant music while the Canadian economy is being destroyed. Frankly, the whole

January 30, 1981
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exercise of this year has been a bitter joke upon the Canadian public.
Over the years I have made a number of speeches with regard to the perils of inflation and its results. Our 1971 dollar is now worth 45 cents, and I hesitate to think what our 1963 dollar would be worth. 1 doubt if it would be worth 25 cents, and that is within the living memories of many members of the House.	*
As a matter of fact, 1 hesitate to think what the 1944 dollar-that was when the hon. member for Winnipeg North Centre (Mr. Knowles) came to this place-would be worth today.


Stanley Howard Knowles: It was 1942.


Mr. Prud'homme:: It would probably be below zero.


Marcel Joseph Aimé Lambert: 1 am sure a dollar from that day would not buy a cup of coffee at the present time.


Mr. Rose:: He still has it.


Marcel Joseph Aimé Lambert: This helps to show the ridiculous position of our finances.


George Albert Proud: What about salaries?


Marcel Joseph Aimé Lambert: I am glad the hon. member for Saint-Denis (Mr. Prud'homme) is participating. He is suggesting that the salaries of 1942 were lower. That is so, but it is entirely relative; the position has not improved.
Under certain legislation before the House, a superior court judge will be paid $70,000 per year as of April 1, 1979. On the basis of the formula included in that bill-and this is the government's prediction of its control-a simple calculation increases that individual's salary to $195,000 per year, give or take a few dollars, in 15 years.
We must stop and assess what inflation has done. I know the general public has become immune to the thought of the amount of a million dollars. People do not understand what is a million or what is a billion. Government members of Parliament are all too happy to report that the government has committed millions of dollars in DREE grants to their various areas. If I were to try to boast to my constituents, or even to my neighbours, that the government spent that sum of money in our constituency in DREE grants, I would receive a slap in the face rather than an accolade. There is no pride in pouring hundreds of thousands or millions of government dollars into a particular area if it goes toward the establishment of industries without consultation with the concerned provincial government and if it is to the detriment of another area. We have seen, time after time, hundreds of thousands of dollars being spent in one portion of Ontario to establish a new plant which has only meant the closing of another plant. I have seen money spent in areas of Saskatchewan and British Columbia through slush funds, which has resulted in the closing of small factories such as one manufacturing trailers in a small city.
Bitter stories were reported to me by deputy ministers of industry. That was deemed to be progress; it was deemed to be necessary activity on the port of the federal government. It was the knife in the back of communities, because all too often new industry in an area lasted but a few years and then folded. The whole exercise has been a sorry chapter in attempts to alter the market bureaucratically. This cannot be justified, except that people received money and were able to subsist.
We always wonder how much $1 million is. 1 would say that the average individual has no conception whatsoever of what is $1 million. If a man were rich enough to say to his wife: "I will give you $1 million on condition that you leave and spend $1,000 a day", how many people in this country would love to have $1,000 a day to spend? But the condition here is that you cannot come back until you have spent it. If a person were to spend, on an average, $1,000 a day and stayed away until the whole $1 million had been spent, how long would it take? Do hon. members, and particularly those people who are listening to my voice at this time, have any idea how long it would take someone to spend $1,000 a day until he has spent $1 million? If I told them it would take two years and nine months, perhaps they would have a conception of what $1 million might be.
If, on the other hand, we were to play some other type of financial wizardry and we said to a person, "I will place $1 million in new $1 bills before you, and you can have it if you can tell me quickly how high the pile will be", you would discover that 1,000 new $100 bills would be about three and a half inches high. Now, 3,500 inches would be the height of a stack of $1 bills amounting to $1 million, and calculated in feet, it would be 292 feet. We look at skyscrapers in our average Canadian cities and we find that, apart from two or three major cities, there is no building which would be 292 feet high, because it would have to be a 29 or 30-storey building. That is how high $1 million is in $1 bills.
Then how much is $1 billion? One billion is one thousand million. How many billions of dollars have been asked for in this bill? The bill is asking for $14 billion. If we were to translate that into stacks of $1 bills-


An hon. Member:: It would be higher than Jack's beanstalk.


Marcel Joseph Aimé Lambert: What kind of a forest of skyscrapers across Canada would we have with these stacks of bills? Just imagine, there would be a 29 or 30 storey building for each $1 million, so there would be 1,000 such buildings for each $1 billion.


An hon. Member:: What would we use them for?


Marcel Joseph Aimé Lambert: Now we are saying there would be 14 times that number or 14,000 buildings 30 storeys high. I hope that the average listener can envisage just how much that represents. That is the borrowing authority; it is not how much is being spent. We are spending close to $60 billion a year at the federal government level, or 30-storey buildings of money.
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That in itself begs description. It is difficult to imagine 60,000 of such buildings across this country made up of stacks of $1 bills.


An hon. Member:: Let's hope there would not be a fire.


Marcel Joseph Aimé Lambert: In the judges' bill, Bill C-34, the proposed salary is $70,000, but 15 years hence, without any artificial review, it would be $195,000 a year, almost three times as much. That is a factor of 7 over 14, or 1.07 to the fourteenth. Some of us may not see it 15 years hence, but I trust that the majority of members of the House will. My goodness, we will have to have not one desk but two desks in order to accommodate the paper on which to write the numbers. We will have to do like they did in Europe after the war.
What did they do in France? They replaced the old francs with new francs. The same happened in Belgium and in Germany.
[ English]
So, what do you do? You take $10 and you make it into $1. You take the currency and immediately devalue it, or re-value it to one-tenth of its former value. It is like what happened with the lira and the yen. Over the years they have suffered from inflation. This year, as a result of uncontrolled inflation, governments of various countries have, for whatever reasons, absolutely abdicated the responsibility of controlling inflation. This week the British government decided to abolish the pound note, because the pound has become irrelevant in their monetary system. I recall, as a university student, when the pound note was worth $5. As a veteran and student from Canada attending a British university, I was paid my allowance at the rate of $5 to the pound. And 35 years later the pound note is being wiped out because it is irrelevant. It will become a seven-sided brass coin. Instead of showing 20 shillings it will show 20 new pence. That is what inflation does.
The bill before us is a reflection of this kind of inflation. The next thing we will see, possibly, is the 5-cent piece and the 10-cent piece being wiped out of our monetary system because they are irrelevant. The penny is already of no value whatsoever. Hon. members may say, "Why are you harping on inflation?" I am talking about inflation today as I talked about the insidious dangers of inflation back in 1968 when this God-forsaken administration started. The same man who heads the administration today was the head of the administration at that time. He was more concerned about the irrelevancies of what makes this land tick. The average Canadian is interested in his job and whether he has sufficient funds for three square meals a day for himself and his family. He is concerned about having a decent roof over his head. He is the man who represents the earning capacity of this country, not the non-earners, the pre-18s and the post-65s. The wage-earner is the one who bears the brunt of the productive requirements of this country. He is the one who must bear the brunt of supporting the social systems we have in this country.
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Depending upon how a country treats this productive force, so shall it succeed in taking care of the rest of its citizens. Frankly, here in Canada we have done a damned poor job. We face a problem over the next 15 years, the likes of which we have not seen hitherto. I am sure the Minister of Finance (Mr. MacEachen) lies awake at night, as do his officials, considering how on earth the Government of Canada will get the money it requires to fulfil its obligations. There never has been a social welfare program undertaken which has subsequently been diminished. Oh yes, it looks good to do these things, but it is like those people who buy automobiles which are beyond their means so they can drive to church and look a bit better than their neighbours, or take holidays which outdo their neighbours. All it means is they are sinking deeper into debt.
We have impoverished the Canadian nation to the extent that nationally we will bankrupt. The thing which bemuses us is the speed with which the carousel upon which we are embarked achieves that end. It is all very well for the government to bemuse the citizens of this country with bread on the one hand and circuses on the other. But the day comes when they have to be paid for, and there is no such thing as money in the sky. There is no magic money tree. Everything one spends has first to be earned. God only knows how it is that we have people in this country and elsewhere with the galloping heebie-jeebies who spend not only this year's money but also the money for the next decade as well. They will not be around to reap the whirlwind. Members of my generation, who came into this House 20 years ago and who, with a few exceptions, are no longer around here, can bear witness to the fact that we have before us a borrowing authority for $14 billion compared with the total budget of $6 billion of those days. At that time $6 billion was deemed to be inflationary. We know that the Walter Gordon years, up to 1967, were highly inflationary because the results of his policies came home to roost in 1968 and 1969.
1 recall that in July, 1969, the Prime Minister gave an extraordinary television address which he repeated on occasion thereafter. This was shortly after he had become leader of his party. I remember that in October, 1975, he introduced wage and price controls. I recall that in 1978, right after he returned from the summit conference in Europe, the Prime Minister again moved into the economic field. These three intrusions were unmitigated disasters for Canada. The man did not understand the situation. He spent most of his time offering the people of Canada bread and circuses to bemuse them. Instead of fighting inflation at its beginning, he merely put down cushions here and there. One such cushion is the indexing of pensions. The government has indexed pensions to the point that they are now so much a part of the system that they cannot be removed.
What is the cost for these indexed pensions in the public service and the armed services? When we have almost come to the point of minute-by-minute indexation of social security, the GIS and the war veterans' pension, the government still says that it does not matter, that we can funnel it in and feed

January 30, 1981
Borrowing Authority
the boiler. But the hard decisions with regard to taking hold of the economy and advising the people that they must make sacrifices to turn the situation around, rather than loading it onto their neighbours, would not win one vote in a barrel of votes. We saw last year the absolutely disreputable way in which the proposal to charge 18 cents for a gallon of gasoline to pay off that absolutely inane, insane subsidy which we pay on gasoline and home fuel oils which we import from abroad was rejected.
In the interval the government imposes price controls on our domestic producers for a resource which is non-renewable. This resource is owned by those producers and by nobody else, but suddenly we have become conscious of sharing when we never heard of sharing before. 1 have never heard of sharing by making a claim of ownership on my neighbour's assets.
Organizations such as the OECD and the organizations which belong to it say that Canada's policy of paying billions of dollars-and it will escalate-to subsidize people to overspend and over-use petroleum products is the height of human folly. Yet, this administration persists in carrying on with the mistaken view that by keeping prices down we can compete abroad. The proof of the pudding is that those abroad who pay $3 and $4 a gallon for petroleum products are out-competing us in our own backyard.


Ian Deans: Why?


Marcel Joseph Aimé Lambert: Because our unit costs of production are too high due to inefficiency of management, production, and distribution within this country and, in addition, in many instances we are a small market competing against the production of a large market. It is ridiculous. Why should the productive surplus of France, Germany, Italy and Japan be able to withstand the cost of transportation, even at the higher rates caused by the high price of transport across the ocean, come into our country and still undercut our own costs? All we have heard today is that this industry and that industry bleeds and import quotas are needed because the industries cannot meet the competition. It depends on whose ox is being gored.
Who says the automobile industry or the farm machinery industry in this country requires particular attention and support?


Ian Deans: Me.


Marcel Joseph Aimé Lambert: Why does the textile industry require special support? Why does the furniture industry and the footwear industry require special support when they have the advantage of cheap fuel? This support does nothing but bleed us. The causes are elsewhere. The cause may be that there is too much time lost on down time due to industrial inaction, that management is golfing or curling too much or what have you. But the cost of production is there, and it is too high.
Or is it that our contribution to social services is too high and, as a result, the earning base is being asked to carry too heavy a load? I would warrant that within 10 years to 15 years the earning base of Canada, restricted to those people who arr
16 to 18 at the beginning and 65 at the end, will find it such an onerous burden to carry social services for non-earners that there will be a social revolution. Those social services are in the system, and that is why we are asking for borrowing authority of $ 14 billion this year.


Mr. Deputy Speaker:: Order. 1 regret to interrupt the hon. member, but his allotted time has expired. He may continue with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Marcel Joseph Aimé Lambert: 1 hope hon. members will allow me to speak until the hour of adjournment.


Some hon. Members:: Agreed.


Marcel Joseph Aimé Lambert: I appreciate the opportunity given to me by other hon. members, and I hope that on a future occasion I will have the same benign attitude toward their request.


Ian Deans: It is not benign, it is benevolent.


Marcel Joseph Aimé Lambert: I have not been overly partisan. I commend to hon. members the articles written by Don McGillivray who, as a member of the Press Gallery, has become one of the country's most respected economic writers.


John Leslie Evans: He seems to think so.


Marcel Joseph Aimé Lambert: I may not agree with him all the time, but we cannot all agree all the time.


John Leslie Evans: He knows as little about economics as anyone.


Marcel Joseph Aimé Lambert: I should like now to refer to the promises made in the last election campaign by the Prime Minister. Each of the few he made when he was allowed out of wraps has been broken or not fulfilled. First of all, he said that the Liberals would manage more vigorously the nation's finances in order to make more effective use of taxpayers' money. He promised to keep government expenditure growth under the rate of growth of the GNP. The rate of growth of government expenditures this year will be 11 per cent or 12 per cent. The rate of growth of the GNP in real terms will hardly reach 2 per cent. That is promise number one.
I have to laugh at the second promise. "We will achieve energy security at a fair price for all Canadians." The only people who are paying for energy today are the people of the three western provinces and primarily my home province. Under this harebrained program we are paying close to $4 billion to equalize the price of imported fuel, while on the other side of the ledger we are encouraging people to consume. I am sure the hon. member from Miramichi will agree that it has to rank among the most asinine of government policies from the point of view of inflation and within the limits of borrowing authority when we have to go out and borrow $4
January 30, 1981

billion additional because we want to make the weekend driver feel more comfortable and let him burn more gasoline.


Mr. Dionne (Northumberland-Miramichi):: It is not quite that simple.


Marcel Joseph Aimé Lambert: The hon. gentleman is twinned with Alberta, but ovbiously he has not been out there.


Maurice Adrian Dionne: Oh, yes, 1 have.


Marcel Joseph Aimé Lambert: Then he has not listened to what the people have been telling him. I should like to invite him to spend two or three weekends in my constituency. I will let him listen.
The third promise the Prime Minister made was to develop an industrial strategy which would provide jobs, growth and increased Canadian ownership and control.
I know what the hon. member for Hamilton Mountain (Mr. Deans) will speak about when his turn comes-industrial strategy. We have not seen one iota of industrial strategy from this government or a strategy which would promote jobs. We have seen a continuing increase in the number of jobs lost. In my province the foolhardy National Energy Program will mean that on a cumulative basis in this year we will lose some 40,000 high-paying jobs.
I listened to the fatuous remarks of the Minister of Energy, Mines and Resources (Mr. Lalonde) when he tried to convince us by reading from Oilweek about the number of drill rigs that are working. They are working on contracts from last year, Mr. Speaker. When the new 1981 programs come into effect, things will be different. It takes time to dismantle a rig. How long can a rig stand idle? The minister should listen to the drill rig people. Incidentally, these people are Canadians. Over 90 per cent of the drilling equipment in this country is owned and operated by Canadians, but they are going south of the border. That is denied by the ostriches opposite, those super-ostriches. They would not know what a drill rig looks like or what a service rig looks like. They are being shut down, and the men who take them to the United States cannot work there because the Americans do not allow Canadians to enter their labour market. So these men will be a double burden on the economy. First of all, they are losing high paying jobs, so their taxes are lost, but they still have mortgages to meet, and in the past they have made contributions to their communities. When they return, they will draw unemployment insurance benefits. It is a double whammy against Canada's economy.
We are living in the never-never land of preoccupation with the dross of our constitution and not paying attention to inflation, unemployment, job creation and industrial policy.


Stanley Howard Knowles: I rise on a point of order, Mr. Speaker. Even though they are not now in the House, I should like to congratulate the government whip and his deputy for having corrected a rather disgraceful situation that obtained most of this afternoon. It is true that more than 20 individual members have been in the House from time to time, but for most of the afternoon we were far below a quorum. I was tempted to call it
Private Members' Motions
but did not. 1 hope we will have 20 members here until five o'clock.


Marcel Joseph Aimé Lambert: You can share that blame yourself, Stanley.


David Michael Collenette: Mr. Speaker, I cannot let the comments of the hon. member for Winnipeg North Centre (Mr. Knowles) go without some reply. While it is true there may not have been 20 members in the chamber at any one time this afternoon, there are many members in the lobby. The rules certainly do permit those people to come in if a quorum is called. I would not want the hon. member to mislead the Canadian public-


Mr. Deputy Speaker:: Order, please. The Chair had no call for a quorum this afternoon. The discussion is not in order at this point. At this stage we shall proceed to private members' business.

It being four o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely notices of motions, public bills and private bills.


PRIVATE MEMBERS' MOTIONS
Mr. Deputy Speaker:: Shall motion No. 24 in the name of the hon. member for Durham-Northumberland (Mr. Lawrence) be allowed to stand by unanimous consent?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Shall motion No. 25 in the name of the hon. member for Cumberland-Colchester (Mr. Coates) be allowed to stand by unanimous consent?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Shall motion No. 27 in the name of the hon. member for York-Sunbury (Mr. Howie) be allowed to stand by unanimous consent?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Shall motion No. 28 in the name of the hon. member for Selkirk-Interlake (Mr. Sargeant) be allowed to stand by unanimous consent?


Some hon. Members:: Agreed.

January 30, 1981
Income Tax Act


INCOME TAX ACT
Mark Willson Rose: That, in the opinion of this House, the government should consider the advisability of amending the Income Tax Act to provide (a) an option for spouses to file either a one family form or two single forms depending on the tax benefit (b) a trigger mechanism which would eliminate the current discrimination against single parents who wish to work outside the home instead of remaining on welfare.
He said: Mr. Speaker, some hon. members may wonder why I have chosen to speak on income tax matters while we have an income tax bill before the House. I had no idea when 1 submitted this motion when it would be called. While it would perhaps have qualified under the rules of order to discuss it at another time, I am pleased to have the opportunity to do so this afternoon.
Both parts of my motion arise from letters that I have received from working people who feel aggrieved by our present tax system. Other members have spoken about the difficulties in our economy and the squeeze this puts on working people. I do not intend to go into that at the moment. However, I will say that even Canada's three support systems, the family allowance, the child tax credit and the tax-saving exemption, discriminate against those working people with families on low incomes. All these measures favour high-income people, as do many of the other systems we have for transfer payments-for instance, unemployment insurance, the Canada Pension Plan, federal and provincial home owner grants, the RRSPs, and the mortgage deductibility proposal of the previous administration. If I need to document those charges, I do not think 1 would have any difficulty in doing so.
Both parts of my motion deal with the need for quality child-rearing in a child's formative years and with the inability of our present tax structures to deal adequately with these pressing family needs.
Dealing first with the idea of what is called a joint tax return or an aggregate tax system-in some countries an aggregate family tax system-under our present laws there can arise a situation in which one parent working and doing a lot of overtime with only one source of income for the family can pay a higher tax rate than if two parents were working and the children were in some other facility, such as child care, day care, or with a neighbour, which is the more likely case. This motion seeks to amend or relieve what I regard, as do many other people, as an unfair condition.
I have a constituent who is the only breadwinner in his family. He and his wife have decided that while the children are small it would be in their best interests for the mother to remain at home. That is their decision and I would like to underline that point. The man is employed as a switchman in one of the towns I represent. He receives what is considered an adequate wage. By working a lot of overtime shifts he has what is regarded by many as an excellent wage. However, if both husband and wife were working and their combined
income totalled the same as his income alone, there would be a substantial tax saving.
What the act does at the moment is to discriminate against those families who prefer to have the mother stay at home and the father work overtime, compared to the situation where both mother and father are working and earning the same total income as the one-earner family. I shall quote briefly from a letter 1 received from my constituent. He makes some not too flattering comments about politicians and talks about the overtime he works. His letter, in part, reads:
Most politicians (who on the whole are better educated and more economically secure than the average wage earner) frown at people like me, simply saying I contribute to higher unemployment-
The paragraph goes on:
Politicians then turn face and complain of the lack of Canadian productivity in the labour force and yet, because I sacrifice my time with my family and work long, hard hours, I am consistently penalized in many, many ways by the government, without ever being given any incentive to work.
Here is a man who worked 80 overtime shifts last year, yet he is saying he has no incentive to work. He must have some, so I cannot agree with him all the way on that point. His letter continues:
Actually, the true welfare bums are laughing at my stupidity in being "Joe Citizen".
He goes on to recount what he does to earn his income. I will quote a few of the things that he had to say. His letter continues:
As a family unit, my wife cannot afford to work even part-time to supplement our income (instead of my working overtime) because:
a)	her wages are much lower than mine (on my overtime)
b)	she would not be a deduction on my income tax
c)	daycare is overly expensive and negates her income.
He goes on to say how concerned he is about his own children and the strain it might be on his family with the mother working outside of the home. He goes on to say:
I pay more income tax on $28,000 because of my overtime than would a husband and wife earning $14,000 a year each.
He says that at his income tax rate, because he is the only one who works, he pays some $5,800 a year with all his deductions allowed, as opposed to $4,500 if he and his wife were making that same total aggregate amount.
He then talks about what tax write-offs there are for executives and business people earning the same amount. They have transportation allowances and various tax loopholes. I have alluded to some of them. He says these people work eight hours a day whereas he works 16 to 17 hours a day because of his limited skills. His letter continues:
I lose almost all of the child tax credit because I must work overtime. Of my 80 overtime shifts, in fact 30 of those went straight to the government in income tax. I can't get any transportation benefits.
He tells me he lives 30 miles from his job. That might have something to say for those of us who are rushing headlong to raise gas prices. He continues:
The politicians say you choose where you live in relation to your work so that's your problem, despite the low vacancy rates.
January 30, 1981

He says he prefers to live in a more rural area and drive to work. That is his choice.
I think 1 have made some case that the Income Tax Act does discriminate. I am also aware that the family aggregate method of filing income tax is not unknown in other countries. I am not saying that it is widespread. It may even be diminishing because it is in the government's interest to collect at least $1,300 more from that man than if both he and his wife were working outside of the home and had their children in some daycare situation.
I do not think I need say much more about that; it deals in at least some ways with the (a) part of my motion. I am calling for the government to consider giving people the option of filing a single form or a joint family form in the aggregate, whether or not the wife is employed outside the home, simply because it is just and fair. If you do not do that, you penalize a lot of people who have made the choice that either the father or mother will remain at home and be involved in child-rearing, either because that is what they like to do or feel they do that best. In case anyone thinks this is somewhat of a slam against those who choose otherwise, I assure them it is not; but the tax system certainly does not favour the spouse for the purpose of child-rearing.
The second part of my motion has to do with a deduction and the way we handle our child care and day care system. I will deal briefly with section 63 of the Income Tax Act having to do with child care expenses. You can deduct child care expenses as long as they do not exceed $4,000. There are other details, but it is essentially a deduction. 1 wish to underline the point that it is not a tax credit, but a deduction off the top. It is not $4,000 you pay out for day care on the bottom, but a deduction from your tax payable at the top. If your income is $10,000 and you have four children each with a $1,000 deduction, your tax would be based on $6,000 rather than the other way, the tax credit, which I do not need to go into in detail. Most members are aware that the tax credit is much more favourable, favouring lower-income people, than the deductability system. It is my view and the view of many others-is it the hon. member's view?


Ian Deans: Yes.


Mark Willson Rose: The hon. member for Hamilton Mountain (Mr. Deans) shares the view that section 63 of the Income Tax Act does not, in terms of fairness, come to grips with the problem.
I have an independent study here. I will not quote from it at length. For an Ontario family of four with one child aged 12 and another 16, with a total income of $7,000 or less, the total benefits under the three family support systems I referred to earlier, the net family allowance, the tax savings for exemption and the tax savings for child credit, amount to $632. For the same Ontario family with an income of $50,000, the total benefit is $970. If that is not discriminating in favour of those with a higher income, I do not know what is. It is a fairly serious problem.
Income Tax Act
Forty-nine per cent of the women in Canada in the childrearing years are part of the work force. Of those between the ages of 20 and 44, over 60 per cent are in the work force. They represent parents of nearly three quarters of a million children under six years old. These mothers are working. That is a lot of children who are looked after by some kind of arrangement, often private.
Only 12 per cent of those children are in government day care centres. Where are the other 78 per cent? They are usually with their grannies, with neighbours or somewhere else. Some of the facilities may be excellent, but most are inadequate. They do not have trained child care workers to deal with these children.
There is a woeful lack of facilities. There is also a bias in the Income Tax Act which needs to be changed. The tax deduction system rises with the level of income. I already alluded to that in the quote I just gave. If you have little or no taxable income, you have little or no deduction.
The cost of daycare in Canada averages between $2,500 and $3,500 a year. That is far too heavy a burden for many families. They have gone the babysitter route due to the cost of government sponsored facilities. This is a serious problem.
Most of the money spent by governments through federal-provincial cost-sharing programs goes to the needy. Eighty per cent is used to support single parents in need of day care. We need to change the tax system from one of deductibility to one of tax credit in order to help other low and middle-income families.
I have with me, again supported by a great number of people, the Project Child Care study sponsored by the Metropolitan Toronto Social Council. Here are some recommendations from page 39. 1 direct this to the attention of Toronto members opposite. They suggest that alternatives to implementing the goals behind section 63 would be to replace section 63 with a tax credit and, second, provide an adequate supply of subsidized daycare. They say more than that, but I will not read any more of this study because time is getting on. They should encourage care-givers to view their operations as a small business by providing clarification of permitted deductions and help with preparing income tax returns.
In order to make the deduction you need to have receipts. As the hon. member for Calgary Centre (Mr. Andre) has said, there is a barter, an underground economy, in terms of tax or lack of tax collected through a cash system which does not allow for receipts. That is the reason it is done that way. That is why so few people can benefit from the deduction.
In both cases, the business regarding the joint return and the change in section 63 to allow for a tax credit, it is important because it has to do with tax advantages or tax discrimination against working people. I would be extremely grateful if the Department of National Revenue would study this and try to ameliorate some of these extremely serious problems on a personal level which have come to my attention. If my constituents are finding difficulty, I am sure the constituents of other members are as well. This is not like a $100 million incentive to somebody to poke holes in the Beaufort Sea; it is a

January 30, 1981
Income Tax Act
very human and very important personal matter for Canadian families, both married and single parents.
In summary, I strongly recommend consideration be given to offering a choice to families whether to file a joint return, even if one spouse is not in the labour force, and to making a change from the $4,000 deduction which favours those with higher incomes to a tax credit which gives a half decent break to the lower-income earners of which, unfortunately, there are many in Canada.


Mr. Rene Cousineau (Gatineau):: Mr. Speaker, the two separate propositions contained in the motion of the hon. member for Mission-Port Moody (Mr. Rose) cover a great deal of territory. In particular, the proposal that we adopt the family unit as the basic unit for personal income tax is an idea that is a bit like Pandora's box: it involves a lot more than appears on the surface.

Before discussing this matter, Mr. Speaker, I should like to deal first of all with the first part of the motion which calls for the provision of a trigger mechanism which would eliminate what my hon. colleague considers a tax discrimination against single parents who are seeking employment and want to work outside the home instead of staying home and remaining on welfare.
I think the general consensus is that any such discrimination is far from desirable. Our tax system should not make it difficult for single parents who are anxious to improve their situation to seek employment and eventually support themselves. Also, one should not conclude that it is distasteful or improper for single parents to remain at home and spend as much time as possible with their children so as to give them all the attention they require as well as a good family life. This is a most worthy cause which is fully supported by society. I do not think that the public would blame single parents who do this solely in their children's best interests. What must be emphasized is that single parents should have an alternative instead of their activities being hampered or restricted by discriminatory laws.
Having said that, I should add that the Income Tax Act does not create the kind of discrimination that seems to be referred to in this motion. I say "seems to be" because the motion is not clear.
There is a provision in the Income Tax Act which exempts from tax most welfare payments made on the basis of needs tests. This applies both to single parents and to all others receiving social assistance payments. However, I do not think it can be argued that the Income Tax Act is a deterrent to a single woman trying to get a paying job to support herself and her children.

Let us consider the basic exemptions and deductions allowed that woman as a wage earner; I will quote figures applying to the fiscal year 1980. Taking into account personal exemptions and other deductions like job expenses, unemployment insurance premiums and Canada Pension Plan contributions, a single person could earn up to $5,104 before having to pay income tax. A single person may also claim for a child the equivalent of a married person exemption. Thus, a single person with two children could earn a little more than $7,800 before having to pay income tax. 1 sincerely believe that a province would very seldom make welfare payments to single parents earning about $7,800 a year.
Therefore, it is not fair to say that the income tax system discriminates against single parents who are willing to seek jobs and forgo welfare. In fact, the Income Tax Act allows a single parent to deduct up part of his child care expenses while working. We provide assistance to make things easier for single parents willing to work outside.

Let me turn now to a discussion of the first part of the motion before us which proposes the adoption of the family unit as the basis for levying personal income tax. This is a complex question, as the hon. member knows. The proposal raises many important issues, not only economic but also social.
There are arguments that can be made on both sides of the question, but there is one aspect of this motion which I suggest should be rejected out of hand, and that is the idea that married taxpayers should have an option between two different tax systems.
The suggestion is that they should have a choice between filing as a married couple or as individuals, depending on which gives them the most favourable tax break. This is a very unsound principle to introduce into our tax system because it is essentially unfair. It would create a serious discrimination against single persons, who would not have the opportunity this proposal would give married persons, that is, to choose between tax regimes depending on which gives them the best benefit.
It has often been said before that our tax system must be a fair one and that taxpayers must feel that it is fair. Without that feeling of confidence in the system the self-assessment approach on which our tax system is based just will not work. It does not require much imagination by hon. members to picture the wave of complaints there would be from single taxpayers if they were discriminated against in this way. No one enjoys paying taxes, but the process is at least tolerable if we feel that everyone else is paying tax on the same basis.
Turning to the central issue of the family unit as the basis for income tax, I think we must recognize the complexity of the matter. Making such a fundamental change in our taxation system would have widespread repercussions. Our present tax system tends to reflect not only our economic priorities and our
January 30, 1981

ideas of equity, but also to some extent our social system. The present system takes the individual as the basic unit for taxation. It reflects the historic social reality of the family unit in which there was one main wage earner.

Mr. Speaker, there is a tax table which applies to both single and married persons and which enables a married person to claim exemptions for his or her dependants. When a dependant starts earning income, the exemptions are reduced until such time the dependant makes enough money to pay tax on his own income. In fact, Mr. Speaker, a great number of regulations prevent the division of income so that two or more salaried persons in the same family cannot pay less tax by dividing their incomes among the members of the family.
We should recognize that our tax system has progressed in an effort to reflect the family and family income concept, and the best example is the child tax credit, a measure introduced by this government. But there are also other provisions in the Income Tax Act under which a spouse can take advantage of a transfer of income or deduction from the other spouse.

This growing legal recognition of the family as an economic unit has also been evident in recent years in some provincial legislatures which have acted to recognize the equality of the marriage partnership. For some people it might seem a logical extension to apply the same idea to our income tax, and to adopt the family unit and family income as the tax base. In fact, it is not that simple.
The Carter Royal commission on taxation recommended adoption of the idea and put forward a variety of principles it said should be followed in doing so. For example, it said that where an individual and a married couple have the same total income, the individual should pay more tax. But this proposal of the commission was not adopted in the eventual tax reform of 1972. One of the reasons was that, although the commission's various principles for family taxation were aimed at achieving tax equity, they also would have led to great complexities in our tax law.
Since the Carter commission reported, there have been other serious representations along the same line. Not long ago the joint taxation committee of the Canadian Bar Association and the Canadian Institute of Chartered Accountants said married couples should have the option of filing joint tax returns.

Mr. Speaker, this position is the subject of much controversy. Women's groups who work for equality of women are strongly opposed to a joint return for married couples, as they argue that such a system would benefit the wives. In a family where both spouses work, chances are that the wife's income will be lower than that of the husband, and under the present Income Tax Act, her taxes would be lower than her husband's. If their incomes are put together and taxed as a single income,
Income Tax Act
the result would be that the husband would pay less taxes and the woman would no longer pay any.
Women's organizations are also concerned that adoption of the family unit for taxation could mean a working couple might be paying a higher tax on their combined income than they would if they were earning the same income as single taxpayers. This so-called "tax on marriage" is just one of the social repercussions at which we would have to look very closely before adopting the policy advocated in the motion before us today.


Mark Willson Rose: That is not correct.


René Cousineau: 1 would ask the hon. member to listen to my remarks, as I listened to his.


Mark Willson Rose: You are very interesting.


René Cousineau: I thought I was, but it seems I am not.


Mark Willson Rose: You are, you are fascinating.


René Cousineau: This situation could grow even more complex when we come to write a legal definition of family. The tendency has been to think of the traditional family unit as husband, wife and dependent children. But in writing this new income tax law, there would be some tough questions when it comes to other family groupings. For example, there are common law unions. How should we treat adult brothers and sisters living together as family units? What about religious communities? All these units may be pooling their earnings and resources in mutual support in the same manner as the traditional family unit.
There are other questions which must be addressed. For example, where a spouse, generally a woman, works at home on behalf of the family, she is not generally paid for her housekeeping work, nor is any tax paid on the value of this contribution to the family. If we start taxing the income of the family unit, should we include the imputed value of these services? Many questions have been asked.

However, in closing, I would like to say that I do not pretend to know the answer to all these questions, but that all these arguments show what a complex social and economic impact the approval of this motion would have. On the other hand, and 1 ask my hon. colleague of the New Democratic Party to listen carefully to this, I believe that it would be premature to reject this whole concept of family taxation without giving it further consideration, as we would need a public debate before making such a basic change in our income tax legislation.


Ian Deans: Mr. Speaker, I do not intend to take a great deal of time, but I want to speak about one particular aspect of the problem confronting families

January 30,1981
Income Tax Act
which go from being two-parent families to being single-parent ones. In particular I want to speak about a very hypothetical- but obviously real in terms of the numbers in the country- single-parent family, mother-led, and the problems confronting her as she goes about trying to hold together the family unit with which she has been left, for whatever reason.
I want to begin my comments by reiterating what my colleague said in his speech today. It is important that we attempt, in whatever way we can, to encourage people to be involved in the economics of their own lives. We want to encourage people, wherever possible, to be a part of the work force and to be self-sufficient. We ought not to place impediments in their way. We ought to ensure, when we look at the combination of income support measures, together with the possibilities of employment within the work force, that there are no impediments. We ought to ensure that there are no unnecessary impediments in the employment system, the tax system, mother's allowance or other programs and that we do not lock people into poverty as a result of the systems we create.
The trauma for a woman who is suddenly faced with the problem of raising her family by herself is immense. The difficulties she must confront are almost impossible for many of us who have not had the experience to comprehend. Therefore, I want to suggest that we should do whatever we can in order to encourage that woman to get over the initial difficulties, to go on from there and to take her place in the work force. She must provide for her family during the time they are living with her as well as for her security in the future.
I should like to refer to the mother's allowance system of the province of Ontario. It pays a base amount for the woman and for each child. A woman with three children would perhaps receive $600 per month. I am not suggesting that is the actual amount; I use it only for the purpose of this argument. As the children grow up, the amount is decreased. When the children reach ages where they are seen to be self-sufficient, or as each child leaves the home, the amount is decreased.
If a child earns some money or the woman obtains a part-time job, the amount is decreased. The problem with the present system is that the woman is locked in; she is not encouraged to work. If she goes out to work, the amount of her mother's allowance is reduced if her income exceeds a very minimal limit. In the final analysis, by the time she pays her additional costs, she is no better off working. But, in the long run she would be better off working if she could see hope down the road.
If a woman in her late twenties or early thirties is left at home with three small children, she is given an allowance which is just enough to make ends meet. Her budget does not include setting aside money for a rainy day, to cover the cost of hockey sticks and uniforms for the children, to pay for the children's trips to and from the science centre, if they do not live in metropolitan Toronto, or for their trips to other attractions which other school children attend. She has only what is required to meet her day to day, week to week, or month to month commitments.
When she looks at the possibility of employment, she discovers that the income she will receive, particularly if she is working part-time because she wants to spend some time with her children, is lost on the allowance side. Therefore she chooses to stay on mother's allowance during the time her children are small in order to rear them properly because, as my colleague said, there are no proper daycare centres. It is very difficult to find them in many communities. Then the woman is in a bind every time a child reaches the age of being considered no longer dependent, the amount she receives is decreased. So, after a few years, the amount she receives for her three children is decreased to the amount for two, but she is still basically responsible for the same rental and costs of the necessities of life. When her next child grows up, her allowance is based on only one child in the home, and when the final child leaves, she ends up not qualifying for mother's allowance. By that time, instead of being 28, 32 or 34, she could be 48 years of age. Then where does she go to find a job? Her marketable skills when she was in her twenties, with which she could have found some part-time work, are no longer saleable.
She was not given the opportunity to maintain or further develop those skills so that they would be marketable and useful throughout her life and when her children leave home. So, at the age of 48 or 50 she ends up without the skills to find a job of any worth, and in fact on welfare, where she never wanted to be in the first place.
We have devised a system which does not take into account the problems faced by the single-parent family.
Most of us here think it would be better for the future of the woman to whom I referred, for her retirement years if nothing else, if she was part of the work force and therefore eligible to receive a pension and live in reasonable comfort. But aside from all of that, there is a problem which the children have to confront, because not only do they not have two parents like other children, but they are also faced with the fact that insufficient income is coming to the family to enable them to take part in the kinds of activities in which other children in our society take part.
When my colleague raises such a matter as this one and suggests we take a look at it, I am pleased at the government's response that it will not reject it out of hand, because we in the House have to sit down at some point and take a look at the way we develop programs for the support of people, and we must recognize that there are people who, through no fault of their own, are placed in situations for which they could never have planned and which do not fit into the system which currently exists.
In the case I mentioned, there is no reason why we cannot find a way to assist, in the case of a divorce. She will have to take on the burden of looking after the children by herself, of being her own handyman, of doing all the things which previously two people did. In the case of marital discord, in many instances there is at least a certain amount of opportunity to share the burdens of day to day life. I am suggesting
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that we should find time to take a look at the Income Tax Act and compare its impact with the social service programs which are available in all the provinces of Canada and in the territories. We should weigh that against the deduction system that is available in the Income Tax Act, and we should try to devise a way which will, in the first instance, provide a sufficient amount of money in the period immediately after the family has broken up, through death, separation or divorce, and beyond that, find a way to integrate the social service program with entry into the work force to avoid dramatic reductions in income at a time when people are trying to find their way.
Also, we should attempt to co-ordinate what goes on across the country so that we can enable people to feel comfortable in the post-trauma period in the knowledge that they will not be faced with unnecessary hardship, that they will be able to meet their obligations, that they will be able to turn their attention to providing for their children and themselves and to meeting their obligations. At the same time we must make sure they are encouraged to seek out new training to find jobs or to upgrade their own qualifications to fit into the marketplace or to find part-time employment relevant to the employment opportunities of the day so that they do not become trapped by a system which, in the final analysis, degrades them.
In essence, that is what my colleague refers to in the second part of his motion this afternoon. At least that is what I see as being a major problem for families. It often becomes an even greater problem particularly when the mother is the single parent. It is another kind of problem when the father is the single parent because he is expected, by conventional norms, to stay at work. No one responds in a positive way to a father who suggests he should stay home with his children and raise them, even though, when asked privately, everyone can see merit in having someone at home with children in their early years. On the other side of the coin, the father is required to find assistance in raising the children if he cannot find a nursery or a pre-school program, and he has to pay for it out of his income. Even though a tax allowance is granted at the end of the year, he has to find the money throughout the year, at considerable personal sacrifice, in order to reach the point at which he can claim it in his income tax return.
I do not think we have given nearly enough attention to those problems. What happens is that this sits badly on the conscience of people, it worries their minds, and either they do not work well at their place of work or they do not provide well for their children because of their ongoing concern about trying to meet their obligations.
In my contribution to this subject I want simply to say to you, Mr. Speaker, that we need more opportunities to address these kinds of problems. What my colleague has done today is open the door, thus allowing: for the consideration of one particular aspect of the problem of families as it relates to the income tax. I suggest that that door might be opened even further and that we should take a hard look at the difficulties of the mother who finds herself attempting to raise her children, who desperately wants to be a useful part of society and,
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who would like to work and use her skills and yet cannot enter the work force because she cannot afford it and is not encouraged either by income tax exemptions, employment opportunities or the social service system. In the final analysis, she ends up as a welfare recipient which, I might say, she never intended to be in the first place.
I hope that over the course of the next year we in the House might go, in more detail, into the integration of those systems, try to find out what happens in each province and how we can co-ordinate federal income tax provisions and federal assistance programs for employment in an attempt to rationalize them in order that every Canadian may be given the same kind of support when the same circumstances prevail and that every Canadian may be encouraged, in those circumstances, to believe that they will be back in the mainstream of society.
We would like to encourage Canadians to be self-sufficient, as most of them want to be, but they should also know that at least they have something on which to fall back in the event they are unable, temporarily or for some good reason, to meet their own expectations as well as those of others.
I certainly appreciate, Mr. Speaker, having had the opportunity to express my thoughts.


John Leslie Evans: Mr. Speaker, I found the remarks of the hon. member for Hamilton Mountain (Mr. Deans) to be somewhat confusing and perplexing, because I believe the hon. member was implying in his comments that there are some real points of discrimination against single parent families when the single parent is working outside the home, as compared to a person who is on welfare and by choice staying in the home to take care of children.
I know there are problems. Some of the social organizations have put before us their impression of what some of these problems are, and I think they have to be dealt with, but I suggest that the proper way to take care of these problems is not through modifications to the Income Tax Act because it seems to me that right now the Income Tax Act does not contain discriminatory provisions with regard to single parents, as was alleged by the hon. member for Hamilton Mountain.
I have looked at the act and have been doing some work with respect to it as of late. I cannot find the kind of discrimination which the hon. member alleges. It seems to me there is no single provision in the act which distinguishes between a single parent working outside the home and a single parent who is home on welfare. I think the point, put by the hon. member was that perhaps there should be some discrimination in favour of a person going out into the labour force, if I am reading him correctly. If that is the case, I might have some difficulty with that as well, because I would not say that the tax system should discriminate in such a way that a single person who wishes to stay at home and raise children should be discriminated against and that this should be incorporated in some way into the income tax system. If we wish to do that as

January 30, 1981
Income Tax Act
an explicit statement of social policy through the form of direct payment, that is one thing but it seems to me that a tax system should be as neutral as possible, and progressive at the same time. In other words, it should affect everyone in the same circumstances in the same way. It should not be used as a means of discrimination.
I know of a number of areas in which, over the years and through various forms of modifications to the tax system, possible areas of discrimination have crept into the tax system. I am sure hon. members opposite will bring that to my attention.
I agree with the hon. member's earlier comment that there should be a broad review of the whole income tax structure to ensure that it continues to be a good example of equity and giving equitable treatment to all Canadians who are in similar circumstances under the system.
As 1 was saying, there does not appear to me to be any discrimination in the act directly with respect to the two groups about which I was speaking, single parents working outside the home and single parents at home on welfare. To the contrary, there is a provision allowing for the deduction of expenses incurred by a single parent for the care of his or her child while that parent is working, within limits. So there is some provision there which would give relief to a parent who wishes to go outside the home to work. This provision is particularly aimed, of course, at helping single parents who wish to enter the labour force.
There is another provision under which a single parent can claim the equivalent of a spousal deduction for one of his or her children. The practical effect of this is to increase basic exemptions for such a person, thereby allowing higher levels of earnings to be tax-exempt, again encouraging entry into the work force.
I should also note that for both the single working parent and the single parent on welfare there is no difference in personal exemptions allowed. So there is no discrimination on that point.
The only other relevant provision in the Income Tax Act is an exemption provided for most welfare payments which are made on the basis of a needs test, as was mentioned by the hon. member for Gatineau (Mr. Cousineau). This provision applies to all recipients irrespective of whether they are on social assistance or whether they are single parents, working or not.
I suggest that if there are legal discriminations or discouragements against single parents getting off welfare and getting out to work, they do not lie in the Income Tax Act. As I said, there may well be problems relating to the way provincial programs of social assistance are applied and the way in which such payments are cut back to reflect job earnings of the person who has been on welfare. I think that is a serious problem. In some cases we see in our welfare laws mechanisms whereby if a person decides to take on work, earning additional dollars, there is a one-for-one offset against the welfare payment.
Effectively, if you are earning $6,000 or $7,000 a year on welfare and if you go out to work, for every dollar you earn you lose a dollar of welfare benefit. Where, then, is the incentive to work?
Mir. Deans: That is what I was saying.


John Leslie Evans: The hon. member says that is what he was talking about. The question I ask him is this: should the tax system take the approach that if a person is on welfare and if he goes out to work to earn additional money, those additional moneys should be taxed in a different way? I would like to address the subject of joint filing, about which the hon. member for Mission-Port Moody (Mr. Rose) was speaking, in a moment, but let us suppose what I said a moment ago was the case. Let us suppose a husband is out earning $5,000 and the wife goes out to work. Then, effectively, you have a joint system set up whereby the family would be taxed as if it made $10,000. But if the person was on welfare and went out to work, you could have a system whereby that person, although they made $10,000 through welfare and through work, the welfare would not be reduced by the amount earned and the tax would not apply. So you could have a system of discrimination set up in that way.


Ian Deans: We need to have another forum for discussion. There must be an exchange.


John Leslie Evans: I agree with the hon. member, we should have another forum for discussion. I hope that opportunity will arise.
I would like to turn now to the proposition put forward by the hon. member for Mission-Port Moody with regard to the tax structure and the possibility of individuals being allowed the option of filing either jointly or as individuals. In some rare circumstances I can see where there might be an advantage if one were to have a system of joint filing as opposed to a system of individual filing. The hon. member put forward the possibility that this could be triggered on an optional basis, the choice being made by the individuals involved. The hon. member for Gatineau, who spoke earlier, suggested that kind of choice in our tax system-where the individual selects the tax base which is most appropriate or in his best interest, from the point of view of which method leads to the lowest tax-would implement in our tax system a basic form of discrimination, which I do not think should be allowed, and which he also did not think should be allowed. Either we have a system whereby individuals file separately or we have a system whereby individuals file jointly. It does not seem to me to be in the interests of equity to have a system whereby the individual can select the basis upon which he will be taxed, from the point of view of which system will provide the lowest rate of taxation.
Given the progressive nature of our tax system, though, two people filing separately, as the hon. member for Mission-Port Moody pointed out, versus the same two people filing jointly, will pay lower taxes under the current system. The current system is, in fact, more favourable to two people filing separately than it would be if those two people filed jointly,
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because of the progressive nature of our tax system and the higher marginal tax rates as income increases. So if two individuals earn $15,000 and file separately, then they will end up with more after-tax income to spend than if they filed jointly and were taxed as though they were earning an income of $30,000. That is the situation we have now. It seems to me that is advantageous to the individuals. Of course, to a single parent it really has no relevance because there is only one income in that situation in any event.
I am sure the hon. member for Mission-Port Moody would not suggest that two people earning the same income as one-
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in other words, two people earning $15,000-should pay the same income tax as one person earning $30,000. That would seem to fly directly in the face of the progressive tax system which we have instituted to promote equity. 1 am sure Canadians would not feel that would be a fair tax system.


Mr. Deputy Speaker:: The hour provided for the consideration of private members' business has now expired. It being 5 p.m., this House stands adjourned until Monday next at 2 p.m. pursuant to Standing Order 2(1).
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, February 2, 1981