1982-07-20

ROUTINE PROCEEDINGS


Mr. Ron Stewart (Simcoe South):: Madam Speaker, "it is ours", price-cutting PetroCan, although it has not pumped a barrel of oil and the Canadian taxpayer has paid double its worth, and the so-called Canadianization program saw government sponsored Dome Petroleum become insolvent and now may have to sell shares to a Japanese company. This is the government's Canadianization in action. Therefore I move, seconded by the hon. member for Bow River (Mr. Taylor):
That because of the failure of the megaprojects in the tar sands and Dome Petroleum, the government re-work the National Energy Program's policy and, because "it is ours", issue shares in Petro-Can to all Canadians immediately.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. Arnold Malone (Crowfoot):: Madam Speaker, noting that on page 6 of the June 28 budget, the Minister of Finance (Mr. MacEachen) stated:
Canadians investing funds in new plans for purchase of common shares of Canadian corporations would not be taxed on that part of the capital gain on such shares that only reflects inflation.
And since every member of this Parliament, who has either or both farmers or small business persons as constituents, would realize much of the capital gain those persons pay is not in fact gain but rather a reflection of inflation, I therefore move, seconded by the hon. member for Medicine Hat (Mr. Hargrave):
That the government in keeping consistent with its capital gains policy ensure that the same treatment is offered to farmers, fishermen, and small business persons as was committed in the budget for those purchasing common shares.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FITNESS AND AMATEUR SPORT
Mr. Bruce Halliday (Oxford):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of both urgent and pressing necessity, which is non-partisan in nature. The Pan-American Wheelchair Games scheduled for Halifax next month, involving some 500 wheelchair athletes from 17 countries, are threatened with cancellation due to rules limiting the number of wheelchair passengers who may be carried on commercial aircraft in Canada. Therefore I move, seconded by the hon. member for Saint-Michel (Mrs. Killens), and the hon. member for Beaches (Mr. Young):
That the government, while recognizing that it must ensure safety in the event of evacuation, take whatever steps possible to assist in providing appropriate transportation to fly the 500 wheelchair athletes to the Pan-American Wheelchair Games in Halifax.


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


Some hon. Members:: Agreed.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Lome Nystrom (Yorkton-Melville):: Madam Speaker, whereas the passenger train service between Montreal and

July 20, 1982
Farnham has been abolished by the federal government and whereas the new provincial program for transportation financing will not apply to this route, I move, seconded by the hon. member for Winnipeg-Birds Hill (Mr. Blaikie):
That the federal government, in co-operation with the provincial authorities, take action as necessary to provide the people of Farnham with an efficient and reasonably priced transportation service.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

[DOT] (MIO)


SHIPBUILDING
Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. As members of this House will undoubtedly agree, many good things come from the Parry Sound area. Recently yet another feather was added to the cap of the region. Canada I, a yacht now being constructed by McConnell Marine Ltd., in Parry Sound, and this nation's first entry in more than 130 years in yacht racing's prestigious "America Cup", was formally christened on Monday. Canada I will be launched later this summer and then sent to Newport, Rhode Island, site of the famous race, to compete in the September, 1983, event. I move, seconded by the hon. member Prince Edward-Hastings (Mr. Ellis):
That this House wish the crew of Canada 1 every success in a race which has been dominated by the United States for more than 130 years.
Perhaps now Canada will have a ship of state which bests the Americans.


Madam Speaker:: Perhaps the House will want to applaud this motion.


Some hon. Members:: Hear, hear!


PUBLIC SERVICE
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, I rise to propose a motion under the provisions of Standing Order 43. It would now appear that perhaps 10,000 senior public servants in the upper income brackets will be able to escape the 6 per cent restraint limitation on increases to their salaries because of being awarded performance pay, or
bonuses, which could allow them up to a total 15 per cent increase in year over year salary. In other words, clerks and stenos in the public service are limited to a 6 per cent increase, while senior mandarins get an escape hatch that allows them a 15 per cent increase. I move, seconded by the hon. member for Nepean-Carleton (Mr. Baker):
That performance pay, merit pay, or bonuses paid to senior civil servants be included in the over-all salary increase of 6 per cent proposed in Bill C-124.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SHIPBUILDING
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. Whereas Canadian taxpayers recently helped bail out Dome Petroleum to the tune of $110 million, and undoubtedly the government will be bailing it out for more; whereas Dome indicated that it was considering construction of a west coast shipyard and building two of the four LNG carriers in Canada required for the Rim gas project; whereas it was announced last week that all five LNG carriers for the Pacific Rim gas project will likely be constructed in Japan, and whereas there are tens of thousands of unemployed British Columbians who could use these jobs, I move, seconded by the hon. member for Skeena (Mr. Fulton):
That this House condemn the government for allowing Dome to proceed with the shipbuilding contracts, and ask the government to consult immediately with Dome to assure Canadians that the shipbuilding contracts will be placed in Canada and that Canadians will have a fair opportunity to capture the spin-off benefits.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
V V *


HUMAN RIGHTS
Mr. Roland de Corneille (Eglinton-Lawrence):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas this House has condemned any and all forms of terrorism, and whereas the so-called Provisional IRA has boasted responsibility for the
July 20, 1982

cruel and despicable slaughter of innocent people in London, I move, seconded by the hon. member for Etobicoke North (Mr. MacLaren):
That this House condemns the terrorists of the so-called Provisional IRA which has boasted responsibility for the cruel and despicable slaughter of innocent people in London and sends its condolences to the people of Great Britain and especially to the relatives of those killed and wounded.


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


Some hon. Members:: Agreed.


Roland de Corneille: Madam Speaker, I am very grateful for the support of the House at this time on this resolution. I believe the House has gone on record repeatedly against any and all acts of terrorism throughout the world. In this particular case, as members of the House are probably aware, bombs went off beside the Horse Guards of Her Majesty and killed many innocent bystanders. I believe it would be helpful if in some way you, Madam Speaker, could convey our condolences to members of the Royal family and to the relatives of those injured and killed.


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


Some hon. Members:: Agreed.
Motion agreed to.



ORAL QUESTION PERIOD


Hon. David Crombie (Rosedale):: Madam Speaker, my question is directed either to the Prime Minister or the President of the Treasury Board. Last night the President of the Treasury Board revealed that the government's wage restraint program falls far more heavily on low-income public servants than it does on high-income public servants, particularly senior managers and those who enjoy executive salaries. Why do they think that is fair? Why the double standard? How is it that the government can discriminate against low-income workers in the public service?


Hon. Donald J. Johnston (President of the Treasury Board):: Madam Speaker, 1 would like to advise the House that, with respect to the management category to which the hon. member made reference, it has never been contemplated that they would receive increases of the magnitude suggested last night by the hon. member for Kingston and the Islands. In fact cabinet has decided that there will be no increase beyond 6 per cent for senior managers in the system.
Oral Questions


Some hon. Members:: Hear, hear!


Donald James Johnston: Not only will there be no merit pay for two years, but senior managers in the management category will not even enjoy any more than the 6 per cent wage increase. In other words, there will be no incremental wage increases toward job rates. If I may continue in that vein, when the hon. member for Rosedale speaks of the people in the lower echelons, referred to by the hon. member for Kingston and the Islands as the clerical group, that group will also clearly receive the 6 per cent wage increase and, in addition, the incremental increases provided for in their collective agreements, in effect giving the clerical group or those who are at less than the job rate somewhere between approximately 8.7 per cent and 9 per cent. The objection that people at the lower end are being discriminated against is quite the reverse. It is people at the high end of the scale who will definitely not receive more than 6 per cent.


QUERY RESPECTING BONUS PAY SYSTEM
David Edward Crombie: Madam Speaker, last night the minister, and certainly the minister's chief official, indicated that the traditional performance bonus for senior managers would remain in place. That would take them up to 15 per cent, beyond the 6 per cent and the 5 per cent guidelines. Indeed, that is what the minister, and certainly his chief official, said. Is the minister now saying the opposite from last night, that mandarins in the public service will be able to share the load with low-income workers in the public service? Is that what he is now saying?


Donald James Johnston: Madam Speaker, what I am saying-and I thought I said it just a moment ago-is that it has never been contemplated by the government that there would be large increases at the upper end of the management scale. The issue was raised last night. I took it up with my colleagues this morning.


Some hon. Members:: Oh, oh!


Donald James Johnston: It was decided that yes, indeed, the management group was to receive no more than the 6 per cent wage increase, not only those at the job rate who would normally be entitled to a merit bonus under the previous compensation system which has been in effect, and which I am advising the House is being suspended for two years, but also for those who are at less than the job rate. This is something which does not apply to the other categories in the public service at lower levels.


APPLICATION OF GOVERNMENT POLICY
David Edward Crombie: Madam Speaker, it goes without saying that it would have been very helpful if the minister had had that information before the committee last night. In fact, last night the policy of the government was an entirely different story. It is very nice to know that somehow
July 20, 1982

Oral Questions
the committee system does work sometimes, because the government simply reversed itself in 18 hours.


Donald James Johnston: Madam Speaker, 1 am not sure whether or not that was a question. The government certainly has not reversed itself in 18 hours. The matter was discussed last night. I challenge the hon. member for Rosedale to point to any statement on the record which indicated that any senior manager in the public service would receive a 15 per cent merit increase. That statement was never made.
What was discussed was the merit increase plan which was introduced by the government upon the creation of the senior management category in accordance with the recommendation of the Lambert Commission, in accordance with the recommendation of the former auditor general, and in accordance with the recommendation of the advisory committee to the Prime Minister on executive compensation. What I am saying today is that those merit increases will be suspended for the two years of this program.


TIMING OF CABINET DECISION
Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, we had one policy last night and a different policy today. The President of the Treasury Board has said that cabinet has decided. Will he tell the House when cabinet decided?


Donald James Johnston: Madam Speaker, I am sorry that I am taking up the time of the House by repeating myself, but I also mentioned in my reply to the hon. member for Rosedale that that issue had been raised last night and I discussed it with my cabinet colleagues this morning. The decision which I have announced is a firm decision of the government with respect to that senior management category.


Charles Joseph Clark: The translation for that is that the decision was made this morning. The position was reversed this morning. The committee system forced the government to stop its cushy deal for senior public servants, by its questions last night.


Some hon. Members:: Hear, hear!


BONUS PAY
Charles Joseph Clark: Madam Speaker, it still is not clear what is exactly the position. The President of the Treasury Board was careful to deny that there was going to be any 15 per cent increase. He focused on that figure. Will he tell us that there will be no bonus of any kind in excess of the 6 per cent available to any federal public servant?


Donald James Johnston: Madam Speaker, I believe that the Right Hon. Leader of the Opposition probably does not understand the wage structure of the public service. The statement I made with
respect to the senior management group is that those who are at the job rate are entitled to 6 per cent because the wage movement is 6 per cent. There will be no bonus whatsoever paid to the senior management category.


QUERY RESPECTING POSSIBLE LOOPHOLES
Charles Joseph Clark: Madam Speaker, the government says that it has embarked on a crusade. It is a new kind of holy war. It is a war that has holes in it.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: The government is not sure whether or not the 6 per cent will apply to Crown agencies like CMHC. Last night it did not apply to bonuses, this morning it does apply to some bonuses.
Will the President of the Treasury Board tell us what other loopholes exist in this highly flexible 6 per cent rule that is being imposed upon some public servants?


Donald James Johnston: Madam Speaker, this is very difficult because the Right Hon. Leader of the Opposition clearly does not understand how the wage structure functions. Bill C-124, if 1 may take the time of the House, provides for a 6 per cent limitation on wage rate increases. I want to make sure the Right Hon. Leader of the Opposition understands that. That is the first year, and it is 5 per cent in the second year. This means that anyone who has obtained the job rate under a compensation plan in effect with the federal public service-the same kind of plan which exists with major employers in this country-would be limited to that 6 per cent, and 5 per cent in the second year.
Last night in committee the hon. member for Kingston and the Islands raised the question with respect to merit pay increases which were introduced with the creation of the senior management category, a distinct management category. These increases were designed to provide an incentive for a certain small percentage of superior performers in the public service. She made the point that, if that plan were to be applied, if some management were to take advantage of that plan, then senior managers could indeed receive in excess of the 6 per cent. Last night I agreed with her that that had been the plan that was introduced, but I never made the statement, nor did any of my officials, to my knowledge, that senior managers would receive 15 per cent, or anything like it.
This morning the issue was raised in cabinet with my colleagues because it is clearly not the intention of the government, and never has been, that senior managers should receive more than 6 per cent. It was decided that not only would the job rate of senior managers be limited to 6 per cent, but also that those who have not yet attained a job rate would receive only the wage rate increase. I think the Leader of the Opposition understands that point at this stage.
July 20, 1982


Mr. Ouellet:: Don't count on it.


Some hon. Members:: Hear, hear!


Donald James Johnston: When the Leader of the Opposition says to me that the committee system works, I would like to say that there is no stronger supporter of the committee system in this House than myself and other hon. members on this side of the House.


Some hon. Members:: Oh, oh!


Donald James Johnston: The point raised by the hon. member for Kingston and the Islands last night with respect to abuse that might take place is precisely the point I raised with my cabinet colleagues and the Prime Minister this morning. It was decided to make it absolutely clear, as a statement of government policy, that the management category would not receive in excess of 6 per cent. I also pointed out in my earlier answer to the hon. member for-


Some hon. Members:: Order!


Mr. Cousineau:: They don't want to hear that.


Madam Speaker:: Order, please. The Right Hon. Leader of the Opposition.


CABINET DISCUSSION
Charles Joseph Clark: I would like to direct a short question to the President of the Treasury Board with regard to this little group of 10,000 public servants for whom a special, cushy deal had been arranged, until the committee system in the House of Commons stopped it.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Will the President of the Treasury Board give the House of Commons his word that the question of this loophole was never discussed by cabinet before this morning?


Donald James Johnston: Madam Speaker, I do not regard this matter as being a loophole. This was a compensation plan. I was under the impression that all hon. members, certainly those in the Conservative Party, had approved of merit pay increases for superior performers in the management category.


Flora Isabel MacDonald: Not when you are in a restraint program.


Donald James Johnston: When the hon. member asks me whether this has ever been discussed as a loophole, I say to him that it was certainly not my intention, nor do 1 believe was it the intention of any of my cabinet colleagues, that senior managers would receive these merit pay increases of 15 per cent on top of the wage increase of 6 per cent which was provided for in Bill C-124.


Charles Joseph Clark: Up to 15 per cent.
Oral Questions THE ECONOMY


REQUEST FOR STEPS TO REDUCE INTEREST RATES AND PRICE OF ENERGY
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, this morning we were all pleased to find that the year to year inflation rate had ebbed downward ever so slightly.


Some hon. Members:: Hear, hear!


Nelson Andrew Riis: But we were disappointed to find that, while inflation was attempting to fall, the two areas buoying it up were directly related to the government's policy, namely, the fact that the year to year rise in interest rates for mortgages had increased by 25.1 per cent, and the price of energy had increased by 18.1 per cent over the same period. If the government is serious about its 6 per cent world, I would like to ask the Minister of Finance whether it is not appropriate that the government take steps to reduce interest rates and the price of energy so that, by its policy, the government, too, can participate in the 6 per cent world.


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, the hon. member has acknowledged that there has been an improvement in the inflation rate. A year ago the inflation rate in Canada was at 13 per cent. It is now 11.2 per cent. Some progress has been made, but not enough. We must have much more significant drops in the next year if we are to move into a better situation in the country.
The hon. member has made reference to the admitted 18 per cent increase in the price of energy that occurred in the past year. He will realize that the Government of Canada negotiated with the producing provinces for a long time in order to get the best possible deal for the consumers. We finally did succeed in reaching agreements with the producing provinces which are binding on us, and which provide energy prices or prices for oil and gas which are still significantly below international prices. This was one of the objectives of the Government of Canada.
[DOT] (M30)


REQUEST FOR RE-OPENING OF ENERGY PRICE AGREEMENTS WITH PROVINCES
Nelson Andrew Riis: Madam Speaker, I want to emphasize the point that, in spite of the marginal decrease, it was the areas of government policy where regulatory powers exist where the increases took place that were the greatest. My question to the Minister of Finance is along the lines of the energy increase.
We know that the pricing of energy will result in increases of over 30 per cent for the next year. The government has indicated its willingness to break collective agreements or contracts with individuals unilaterally. Will the minister give the people of Canada some hope by saying, yes, the federal government will take the initiative to reopen negotiations with the producing provinces to see whether some cap can be placed on energy price increases which will see us into the 31 per cent

July 20, 1982
Oral Questions
world next year, at least in the cost of energy, recognizing especially the ripple or domino effect that energy price increases would have in the economy?


Allan Joseph MacEachen: Madam Speaker, the hon. member misunderstands the wage restraint program. The Government of Canada is not making a unilateral move to change the terms and conditions of collective bargaining in the public service. It has made a proposal to the Parliament of Canada. That proposal is before the standing committee. If it comes out of the committee and receives third reading, it will be an act of Parliament passed by Members of Parliament that will determine the regime in the country.


PUBLIC SERVICE
Mr. Rod Murphy (Churchill):: Madam Speaker, the Minister of Finance should recognize that the wage bill does outlaw collective bargaining.
My supplementary question is directed to the President of the Treasury Board. Last night he made admissions about two loopholes, one with regard to the performance increases for top senior public servants. In that particular area he appears to have reversed himself this morning. Second, he indicated that consultants, who often do work normally done by the civil service, will not be limited to a 6 per cent increase. If consultants, who are, to quote a Liberal MP on the committee, "members of the old boys' network", are not legislatively tied to a 6 per cent increase, how can the Liberal government justify a 6 per cent limit for workers earning between 89,000 and $15,000?


Mrs. Mitchell:: What about the old girls?


Some hon. Members:: Hear, hear!


Donald James Johnston: Madam Speaker, my recollection of the exchange last night, subject to my verification of the transcript, was simply to the effect that this wage restraint bill does not extend to service contracts. I take exception to the assumption upon which the question is based, because Treasury Board ministers have taken some pains to establish guidelines for the awarding of consultant contracts to ensure that the kind of abuse to which the hon. member alludes does not in fact take place.


PRESENCE IN GALLERY OF PARLIAMENTARY DELEGATION FROM FRANCE
Madam Speaker:: I have the honour of drawing the attention of the House to the distinguished presence of a delegation of French parliamentarians, headed by Mrs. Veronique Neiertz, a member of the French National Assembly, and attending the Fifteenth Annual Meeting of the Canada-France Interparliamentary Association.


Some hon. Members:: Hear, hear!


PUBLIC SERVICE
Hon. Ron Huntington (Capilano):: Madam Speaker, I would like to address a supplementary question to the President of the Treasury Board in light of the answers given to the hon. member for Rosedale and the Leader of the Opposition. Can he explain why the Public Service of Canada, Language Training, National Capital Region, is advertising to fill a position at a salary range of $41,500 to $45,500 which will be revised and increased in September, 1982, with a some 14 per cent increase? This is in an ad in The Globe and Mail of Thursday, July 15. Can he explain the variations between the statements he has made in the House today and what the government is advertising, in light of the restraint in the June budget?


Donald James Johnston: Madam Speaker, I have not seen the advertisement in question. I will certainly have my officials look it up, unless the hon. member cares to send it over to me. It is not clear to me how the 14 per cent to which he refers comes about in the part of the ad he read. I will certainly look into that matter and accept the representation made by the hon. member.


CROWN CORPORATIONS
Mr. Pat Nowlan (Annapolis Valley-Hants):: Madam Speaker, my question is directed to the President of the Treasury Board. In an attempt to develop some credibility for the six and five program, has the minister responsible made an assessment of how many Crown agencies, boards or corporations require the governor in council to approve their filing for rate increases, toll increases or fare increases? Of those that
July 20, 1982

require governor in council approval, how many have been or will be approved?


Donald James Johnston: Madam Speaker, the government today will be releasing a statement on the issue of administered prices, which I believe is the point to which the hon. member makes reference. I can assure him that it is the government's intention to take a hard line on the 6-5 policy to which the hon. member refers in terms of dealing with all prices that are under federal jurisdiction.


CANADIAN GRAINS COMMISSION-PROPOSED INCREASE IN STORAGE RATES
John Patrick (Pat) Nowlan: Madam Speaker, my supplementary question is directed to the Minister of Agriculture. We are tyring to find out if the government has as much interest in prices as it does in six-fiving wages. Is the minister aware that the Canadian Grains Commission has filed notice of intent to increase the rates for storage of grain by 33 V5 per cent effective August 1? If so, what does he intend to do about it?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, we are very much aware of it. We gave notice of this three months ago. I believe discussions took place that long ago. This is nothing new to the grain trade. If there are any changes, they will be notified. Earlier in the year we had discussions about cost recovery with all of these people . If they are now saying they are surprised, they are not expressing the facts.


TOURISM
Mr. Alexandre Cyr (Gaspe):: Madam Speaker, my question is directed to the Minister responsible for Tourism. On July 8, I said in the House that this year the number of tourists in Eastern Quebec, and especially in the Gaspe, had dropped 25 per cent. My information is that the Canadian Government Office for Tourism, in its twenty offices throughout the world, has no advertising material on the Gaspe and Eastern Quebec. My question is as follows: Could the minister tell the House whether he intends to take steps to correct this situation and obtain the material required to promote tourism in the Gaspe, particularly in view of the 1984 festivities in honour of the 450th anniversary of the discovery of Canada by Jacques Cartier, who came here from St. Malo in France?
Oral Questions


Hon. Charles Lapointe (Minister of State (Small Businesses and Tourism)):: Madam Speaker, I realize that the hon. member is very keen to promote tourism in his area, which is one of the major tourist attractions in Canada. Regarding the absence of material on the Gaspe in our tourism offices throughout the world, the hon. member is, unfortunately, entirely correct. The fact is that after getting in touch with the Quebec government last April, asking them to send us some
50.000	tourism brochures on the Gaspe for distribution throughout the world, we have as yet received only 350 of the
50.000	brochures requested. When I read the statistics on tourism in the Gaspe this week, I immediately ordered the Canadian Government Office for Tourism to reiterate its request to the Quebec government for as much material as possible to promote the Gaspe in our offices abroad.


CRIMINAL CODE
Mr. Neil Young (Beaches):: Madam Speaker, my question is directed to the Minister of Justice, if I can catch his ear. The minister knows that over the last several years there has been a frightening increase in the incidence of violent crimes against women. In the last several weeks in Toronto four women have been murdered in the course of sexual attacks. In addition to that, the Rape Crisis Centre in Toronto has reported that there is a 15 per cent increase in the incidence of rape already this year compared with last year.
There is a number of ways this can be dealt with. One of the ways has been suggested by women's groups themselves; they have volunteered to form a task force to look into this whole matter to try to find solutions to this very serious problem which is of crisis proportions. Could the minister tell the House whether he would be in agreement with that suggestion, and would he provide funding to such a group to look into this extremely important matter?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, I think the House could do much to improve the situation if it were to proceed quickly with consideration of the amendments to Bill C-53 that contains provisions regarding acts of violence against women and especially rape. The bill has been before the House for several months and is now in committee, and we hope that the committee will soon be able to report back to the House. I am convinced that if the clauses respecting rape were amended to make it easier to convict the accused and to make

July 20, 1982
Oral Questions
the process less traumatic for the victim, this would be a major step towards reducing the number of violent crimes, and that is why I hope the committee will finally adopt our proposals concerning Bill C-53.


REQUEST THAT COMMITTEE BE ESTABLISHED
Neil Young: Madam Speaker, my supplementary question is directed to the same minister. The threat of violence to women in Toronto has become very real as a result of increasing incidents of violent crime against them. Women are becoming very nervous and are also getting damned mad. I think they are totally fed up with the platitudes and pats on the head the Minister of Justice just gave the women of this country. Will the minister at least agree to give a positive response and establish such a committee, which these women feel could provide a solution to this problem?


Joseph Jacques Jean Chrétien: Madam Speaker, I think we have done more in the last two years to enhance the rights of women in Canada than ever before. If the hon. member's colleague, the hon. member for Burnaby, would co-operate a little more in the committee, we could make more progress on Bill C-53. The hon. member should do that because his colleague has been talking for months. If he could shut his colleague up for a few days, we could pass some legislation.


Some hon. Members:: Hear, hear!


NORTHERN AFFAIRS
Hon. Erik Nielsen (Yukon):: Madam Speaker, I have a question for the Minister of Indian Affairs and Northern Development. Are the future rate increases of the Northern Canada Power Commission to be held to an amount not exceeding 6 per cent, or will the Commission be allowed to apply for rate increases, as it did at the last consideration, of some 30 per cent?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, as the hon. member knows, I answer to Parliament for the Northern Canada Power Commission.


Erik Nielsen: That is why I asked you the question.


John Carr Munro: I understand Mr. Smith, the chairman of the Northern Canada Power Commission, has the confidence and support of the hon. member for Yukon. The chairman is aware of the policy of the government with respect to increases in the budget.


Erik Nielsen: Yes or no.


John Carr Munro: Surely the hon. member would be the last one to suggest that a man of Mr. Smith's calibre-a man who has the backing of the hon. member for Yukon-would ignore this very worthy fight against inflation and the fact that a price increase of 6 per cent is a reasonable limit.


REQUEST FOR ROLL BACK IF RATES INCREASED MORE THAN SIX PER CENT
Erik Nielsen: If the Northern Canada Power Commission attempts to increase its rates more than 6 per cent, will the government roll them back to 6 per cent?


John Carr Munro: Madam Speaker, I have tried to indicate to the hon. member that 6 per cent is the rule for everybody, and I would expect the Northern Canada Power Commission to abide by it.


Erik Nielsen: Good. Thank you.


MANPOWER
Hon. Roch La Salle (Joliette):: Madam Speaker, my question is directed to the Minister of Employment and Immigration. Considering the new national program for occupational training and the fact that the minister informed us at the committee stage that he intended to continue discussions with the Government of Quebec-it seems the program will be starting on September 1-could the minister inform the House today whether he has had discussions with the Government of Quebec since the bill was passed, and whether he is at all optimistic about Quebec benefiting from the new program?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, the development and passage of the National Training Act was done in a genuine spirit of co-operation not only with hon. members opposite but also with the provincial governments. Since the passage of the bill two weeks ago we have had very close negotiations and discussions with the province of Quebec in looking toward the signing of an agreement by September 1 so that we can allocate the money there. However, it is really a matter of the provincial government's deciding whether it wants to sign the agreement. If it is prepared to look at the conditions we have put forward, I have certainly instructed my officials to approach the matter in a very open and co-operative manner. I am very optimistic that we will be able to develop an agreement so that we can get a new training program started in that province as well as across the country.
July 20, 1982


INDUSTRY
Hon. George Hees (Northumberland):: Madam Speaker, 1 have a question for the Prime Minister. Canadian productivity in all commercial industries, measured in production per manhour, increased, on average, between the years 1967 and 1971 by 4.2 per cent a year; by 2.6 per cent a year between 1972 and 1976; by 0.9 per cent a year between 1977 and 1981; and by 0.2 per cent last year, a very, very serious drop in productivity. Would the Prime Minister reconsider the negative answer he gave to me a couple of weeks ago in this House on this very important matter and, instead, give serious consideration to providing generous tax incentives, to be paid in direct proportion to increases in productivity, so that Canadian producers can find it practical and worth their while to buy the new machinery, plant and production systems necessary to increase productivity, and thereby lower costs and selling prices, and in this way, increase sales, production and jobs?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, the hon. member is at it again with his remarks that productivity in Canada has dropped. The fact is, and I have told him this before, that productivity has dropped in most industrialized countries, and economists are trying to analyse the many reasons for this slowdown. Most people agree that it is at least partly due to a restructuring of our economies as a result of the OPEC or energy crisis. Indeed, the statistics quoted by the hon. member appear to indicate that the slowdown has been particularly visible since the OPEC crisis in 1973.
Regarding the hon. member's suggestion that further tax incentives be introduced, I would remind him that these measures have been adequate in the past, before we got into a recessionary period. Of course, all countries are now suffering from the recession we are experiencing today, and there is reason to believe that when we get out of this recession, the Canadian tax system, which is basically more generous to business than the American system, will again have a positive effect and that productivity will increase.


REQUEST THAT PRIME MINISTER CONSIDER PROVISION OF INCENTIVES
George Harris Hees: Madam Speaker, if the Right Hon. Prime Minister would sit down and talk to any businessman, he would learn that the only way, and the best way, to get productivity up in this country is to offer a direct incentive, payable in exact proportion to the effort made. There is no other way it will be done, if we are going to work with businessmen. If the Prime Minister is more interested in doing something for his country in this regard than making excuse after excuse for doing nothing, would he take into consideration the suggestion I have made, which has been used
Oral Questions
with success in the past, and which has increased productivity, and in this way try to slow down the very fast slide this country is taking every day, not into recession, but right into depression?


Pierre Elliott Trudeau: Madam Speaker, I think the hon. member recognizes that productivity is very directly linked to investment. He knows that there is a very generous tax credit in Canada, particularly in the manufacturing industry. The hon. member shakes his head, no. He has obviously not informed himself recently.


George Harris Hees: Your incentive is not working.


Pierre Elliott Trudeau: The hon. member usually asks questions and listens to the answers. Today, for some reason-he must have friends in the gallery-


George Harris Hees: No friends in the gallery. No cheap cracks!


Pierre Elliott Trudeau: No friends in the gallery, and probably less and less in the country, Madam Speaker.


Some hon. Members:: Oh, oh!


CITIZENSHIP COURTS
Mr. Walter McLean (Waterloo):: Madam Speaker, my question is directed to the Secretary of State and also relates to the matter of the senior echelons of the civil service. He will know that a citizenship judge, Jack Ferguson, was moved at departmental expense earlier this year from Thunder Bay to Vancouver. Will the minister confirm that the judge has been paid at an annual rate of $40,000 since the end of March without being appointed to the position for which he was intended? Why is the judge not working in an area where there is an obvious need for an additional judge?


Hon. Gerald Regan (Secretary of State):: Madam Speaker, I thank the hon. member for the question. He seems to be confused. He probably needs a more reliable source of information than he presently has. Judge Ferguson has been in the British Columbia area, if I recall correctly, for a period of two years. He was not moved there earlier this year. He served out the normal period of time and has been reappointed, if I am recalling correctly, and has been made the regional co-ordinator of citizenship judges in that part of Canada. He is an outstanding judge, doing an excellent job.
The other part of the question was about the financial details of his move more than two years ago. That may well have been before this government came to office so I am not sure of that. I will inquire, and give the hon. member the information.

July 20, 1982
Oral Questions


CRITERIA FOR APPOINTMENT OF JUDGES
Walter Franklin McLean: Madam Speaker, a few moments ago we heard about the matter of performance bonuses. The performance seems to have been services rendered to the party. I should like to ask the minister if he will confirm that there is a need for a judge, that he is a judge, that there is a conflict, and that at this moment he has not been placed in that position. In clarifying the confusion which there obviously is across the country, would the minister indicate the criteria for the appointment of citizenship judges? Many people who are at the moment unemployed on the west coast wonder why a judge who is not in place is being paid.


Gerald Augustine Regan: Madam Speaker, I can only conclude that while I was giving the first answer the hon. member was thinking about what he was going to say next, instead of listening to what I said. The hon. member should know that Judge Ferguson has been in place in Vancouver for over two years.


Charles Joseph Clark: As a judge?


Gerald Augustine Regan: As a judge. He is continuing in that work in British Columbia now. The hon. member has bad information. Indeed, he has recently been appointed as regional co-ordinator.
On the question of the qualifications necessary to be appointed a citizenship judge, he was appointed long before 1 was in the department, but the basic qualifications are those that have always applied, that is, that a person be an outstanding Canadian, have a knowledge of citizenship requirements, be interested in the field, and that they be prepared to serve the country.


Mr. McDermid:: You left one out.


Gerald Augustine Regan: What is that?


John Horton McDermid: That they be a Grit.


INDIAN AFFAIRS
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Madam Speaker, my question is for the Minister of Indian Affairs and Northern Development. Since last fall we have been waiting for some word on the $345 million promised for Indian economic development. We received that word. In the June budget it was announced that the funds are to be cut by over 50 per cent-cut or deferred this year and next. Will the minister explain to the House why economic development funds have been cut for a group that suffers from an unemployment rate of up to 90 per cent on reserves? Indian people need jobs this year and cannot wait another five or ten years. Why are Indian people being asked to live in a world of minus 50 per cent?


John Carr Munro: Madam Speaker, I do not agree with the premise of the hon. member's question. Despite the fact that there are many elements of the budget that preach restraint, it shows the concern of the government for the native people that there was no cut-back with respect to economic development moneys for native people. Rather, if there was a deferral, there was a shortfall this year over what had previously been committed and that was tacked on to the back end of the commitment. The same amount-in other words, $345 million-is committed, only the period over which it is to be spent is extended by two years.


TIMING OF APPROVAL OF PROJECTS
James Douglas Manly: Madam Speaker, the fact remains that there is going to be $30 million available this year instead of $75 million for economic development for the Indian people. That means that those jobs will not be available. The native people have been waiting for a long time to know what the government's plans are.
I should like to ask the minister if he would indicate to the House when these projects will be approved and what mechanism will be put in place to ensure maximum Indian participation in allocating these funds.


John Carr Munro: Madam Speaker, I expect that we will be able to deal with the time frames when the mechanism is in place to consider applications.


James Douglas Manly: When?


John Carr Munro: Very soon. Madam Speaker. May I also indicate to the hon. member that when he talks about only $30 million, and so that no misunderstandings permeate the House, he should remember that this money of course is in addition to the economic development moneys available in my department through the estimates. The hon. member is aware of this because he has been at the standing committee.
He should also be aware that regional development moneys have been available and are being taken advantage of by native people in the provinces-what we used to call DREE moneys are available. My colleague, the minister responsible for employment, also has moneys which he zealously tries to make available to the native people. So it is far more than the limited amount the hon. member indicated in the House a few moments ago.


HUMAN RIGHTS
Mr. Bill Clarke (Vancouver Quadra):: Madam Speaker, my question is for the Prime Minister, and it concerns Mr. Kim of
July 20, 1982

South Korea. A year and a half ago, after world-wide expressions of concern, including the unanimous vote of this Elouse, the death sentence on the former opposition leader, Kim Dae-Jung, was commuted to life imprisonment.
The North American Coalition for Human Rights in Korea reports that Mr. Kim is being kept in deplorable conditions. Not only has he been in solitary confinement since his arrest in 1980 but the cells around him are empty and the guards are forbidden to speak a word to him. He is allowed no newspaper, radio, or visits from clergy or others, and only two 20-minute visits from his wife each month. He has been denied badly needed medical attention for a leg problem.
Will the Prime Minister take the opportunity when President Chun is here in August to make a special appeal on behalf of Mr. Kim for some relief, or even amnesty?


Pierre Elliott Trudeau: Madam Speaker, 1 must confess that I have not been briefed on the state of Mr. Kim in recent times. I will look into the suggestion of the hon. member and discuss the matter with the Secretary of State for External Affairs.

[ Translation]


HAZARDOUS SUBSTANCES
Mr. Jean-Guy Dubois (Lotbiniere):: Madam Speaker, my question is directed to the Minister of Consumer and Corporate Affairs and concerns homes insulated with UFF1. Could the minister inform us whether he has received Mr. Lamou-reux's report on this product and whether he could give the House any details?


André Ouellet: Madam Speaker, this morning I received a letter from the chairman of the UFFI Review Board. Although I was going to do so at the time of tabling documents, I shall now, with leave of the House, table the document I was sent this morning. Very briefly, in one paragraph the letter confirms that one of the Board's members, Dr. Sutherland, has had a major operation and is now convalescing, and that unfortunately, the Board will be unable to finish its report within the agreed time-frame. However, because of the importance of the subject, the Board has decided to make public immediately its decision concerning the ban on the use of UFFI. The reasons for its decision will be announced in the weeks to come, as soon as the three members of the Board are able to finish the report. In any case, I can inform the House that as a result of the Board's decision, this product remains banned.
Point of Order-Mr. Pinard


PUBLICATION OF REPORT'S FINDINGS
Charles Joseph Clark: Madam Speaker, is the minister telling us that he is going to publish the results of the report but he will not publish the report because they have not finished preparing it?


André Ouellet: Madam Speaker, perhaps the Right Hon. Leader of the Opposition did not entirely grasp my meaning. I was saying that 1 received a document signed by the three Board members, Messrs. Lamoureux, Lu and Sutherland, and that the Board's decision has now been made public. When the Chair calls for the tabling of documents later on, 1 shall be tabling this correspondence, in both official languages.


INQUIRY WHETHER MINISTER WILL TABLE DECISIONS WITHOUT AUTHORITY
Charles Joseph Clark: I have a supplementary, Madam Speaker.
If I understand correctly, the minister is informing the House that he wishes to table, first of all, a letter and second, the text of a decision, without the reasons for that decision, since for the time being, the Board has not finished its work. Is that correct? If so, why is the minister now tabling the text of a decision without giving his reasons for doing so?


André Ouellet: Madam Speaker, the official opposition's critic asked me in the House to make public immediately any communications I received from the Board, and that is what 1 am doing.


POINT OF ORDER
Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, 1 refrained from raising a point of order during question period out of respect for our practice that members do not interrupt the question period to raise a point of order. At this point, however, I may, very briefly, draw your attention to two provisions contained in Beauchesne, fifth edition, regarding the nature of questions that may be put to a minister in the House.
You probably noticed that at the beginning of question period, the President of the Treasury Board (Mr. Johnston) was asked questions referring to a statement he made outside the House and to the proceedings of a standing committee of

July 20, 1982
Point of Order-Mr. Forrestall
this House. In Beauchesne, on page 135, Citation 359(10), it says, and I quote:
A question ought not to refer to a statement made outside the House by a Minister.
And 1 will also quote Citation 360(3):
Some further limitations seem to be generally understood. A question may not:
(3) seek information about proceedings in a committee which has not yet
made its report to the House.
There is also Erskine May, nineteenth edition, on page 146, which formulates the same principle and the same limitations.
In the circumstances, Madam Speaker, since Bill C-124 is now before a standing committee of the House, and in view of the provisions I just quoted which are, in fact, an integral part of our parliamentary practice, I would like to draw the attention of the Chair to these points and ask that the rules of the House be strictly applied during the next few days, since as long as the bill has not been reported back to the House, questions about the bill and about statements by the minister before the committee are out of order.


Madam Speaker:: I am quite aware of the citations quoted by the hon. minister, but during question period, that particular question seemed entirely legitimate. It is true that there is a reference to things that were said at a meeting of a parliamentary committee, but it seems to me that the question stood on its merits. I am sure that during the debate on the Constitution, a number of issues were raised that were similar to those being discussed in committee. Finally, I have the impression that hon. members abided by the rules of the House. The hon. minister may have a different opinion, but now that the moment has passed, I can assure him that I shall be more vigilant. However, it did not seem obvious at the time that there had been a breach of the rules of the House.


TOURISM-REFERENCE TO QUESTION OF MR. CYR
Mr. J. M. Forrestall (Dartmouth-Halifax East):: On a point of order, Madam Speaker, the hon. member for Gaspe (Mr. Cyr) would not want left standing on the record the inference that it was Champlain who discovered Canada. On behalf of every Norwegian in this country may I correct the record.



ROUTINE PROCEEDINGS


[Stage Direction]
Hon. Andre Ouellet (Minister of Consumer and Corporate
Affairs): Madam Speaker, 1 wish to table correspondence received from members of the UFFI Board of Review.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 4,249, 4,259, 4,270.


Mr. Crosby: 1.	Does the Department of Employment and Immigration have written rules or regulations governing the conduct or standards of behavior for employees of the department and, if so, are they embodied in a code of conduct or other specific document and is the code or document available to the public?
2.	In the five years preceding April 1, 1982, were any employees of the department disciplined by way of suspension, dismissal or otherwise for violations of any rules or regulations governing the conduct or standards of behaviour for departmental employees and, if so, in each case, what was the name of the employee and the date of the disciplinary action?


Lloyd Axworthy: 1. Yes. Standards of conduct expected by the Canada Employment and Immigration Commission/Depart-ment of its staff are set out in the "Code of Conduct for Commission/Departmental Staff'. This document is applicable only to Canada Employment and Immigration Commis-sion/Department employees and, as such, it is an internal Commission/Department publication which is not normally requested by members of the public. It is available to the public on request.
2.	On the basis of the available data, the reply is as follows: Yes, April 1, 1977, to March 31, 1980, information not available. In accordance with the provisions of collective agreements dealing with employee files, all documents related to disciplinary actions are destroyed once two years have elapsed from the time that the disciplinary action was taken, provided that no further disciplinary action has been recorded in the meantime.
April 1, 1980, to March 31, 1981: Employees suspended, 38; employees discharged, three.
April 1, 1981, to March 31, 1982: Employees suspended, 47; employees discharged, five.
July 20, 1982

To be consistent with the provisions of the Canadian Human Rights Act we are not providing names.


Mr. Crosby: 1.	Does the Department of Labour have written rules or regulations governing the conduct or standards of behavior for employees of the department and, if so, are they embodied in a code of conduct or other specific document and is the code or document available to the public?
2.	In the five years preceding April 1, 1982, were any employees of the department disciplined by way of suspension, dismissal or otherwise for violations of any rules or regulations governing the conduct or standards of behaviour for departmental employees and, if so, in each case, what was the name of the employee and the date of the disciplinary action?


Hon.   Chas. L. Caccia@Minister of Labour: 1. Yes, Labour Canada does have several departmental directives which relate to the above mentioned question. These directives are widely issued and held in the department and are available to all employees, and thus by extension to the public. The pertinent directives are: Conflict of Interest: Policies and Guidelines; Application of Discipline; Telephone Service to the Public; Hours of Work; Employee Assistance Program; Employee Performance Review and Appraisal.
In addition to the above, the collective agreements and compensation plans, applicable to all public servants, provide a good deal of guidance with regard to accepted standards of behaviour. Also the Personnel Management Manual, which is readily available to employees, provides a wealth of information on standards of conduct, conflict of interest, hours of work and discipline, etc. Information on standards of conduct is also provided in the Staffing Manual, the Treasury Board Administrative Policy Manual for subjects such as contracting for services, travel and removal regulations etc., and in various other publications and directives available to employees.
2. According to our records, 11 employees were disciplined during the past five years for a total of 22 incidents. This figure does not include oral reprimands. We do not maintain cumulative records on discipline, as it has not been a large problem in this Department.
To be consistent with the provisions of the Canadian Human Rights Act we are not providing names.


Mr. Crosby: 1.	Does the Department of Veterans Affairs have written rules or regulations governing the conduct or standards of behavior for employees of the department and, if so, are they embodied in a code of conduct or other specific document and is the Code or document available to the public?
2.	In the five years preceding April 1, 1982, were any employees of the department disciplined by way of suspension, dismissal or otherwise for violations of any rules or regulations governing the conduct or standards of behaviour for departmental employees and, if so, in each case, what was the name of the employee and the date of the disciplinary action?


Hon. W. Bennett Campbell (Minister of Veterans Affairs):: 1. Veterans Affairs has a document entitled "Standard of General Conduct". This document outlines the basic rules of
Order Paper Questions
behaviour for Veterans Affairs employees. The document is part of Veterans Affairs policy on discipline and is included in the Personnel Management Manual (PMM), Chapter 060-1. It is available to the public.
2. Most collective agreements contain provisions stipulating that documentation of disciplinary measures must be destroyed after two years where there is no recurrence of the same misconduct. Accordingly, active disciplinary files are not normally kept for more than two years. In the past two years, only two employees were dismissed as a result of their misconduct; based on partial returns for fiscal year 1981-82, it is estimated 100 employees were suspended for the same two year period.
To be consistent with the provisions of the Canadian Human Rights Act we are not providing names.


David P. Smith: Madam Speaker, if question No. 4,267 could be made an order for return, this return would be tabled immediately.


Madam Speaker:: The questions enumerated by the parliamentary secretary have been answered. Is it the pleasure of the House that question No. 4,267 be made an order for return?


Some hon. Members:: Agreed.


Mr. Crosby: 1.	Does the Department of Supply and Services have written rules or regulations governing the conduct or standards of behavior for employees of the department and, if so, are they embodied in a code of conduct or other specific document and is the Code or document available to the public?
2.	In the five years preceding April 1, 1982, were any employees of the department disciplined by way of suspension, dismissal or otherwise for violations of any rules or regulations governing the conduct or standards of behaviour for departmental employees and, if so, in each case, what was the name of the employee and the date of the disciplinary action?
Return tabled.


Mr. Taylor:: Madam Speaker, may I ask the parliamentary secretary if he is having any success in finding out when I might receive an answer to question No. 2,329?


David P. Smith: Madam Speaker, I am always delighted to make inquiries on behalf of the hon. member. I have done so in this instance, and while I do not have a report right in front of me, it is under way.
I ask, Madam Speaker, that the remaining questions be allowed to stand.

July 20, 1982
Supplementary Borrowing Authority Madam Speaker: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, July 19, 1982, consideration of the motion of Mr. Bussieres that Bill C-125, to provide supplementary borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs, and the amendment of Mr. Clark (p. 19456).
Mr. Jack Shields (Athabasca):: Mr. Speaker, the government is asking under the present borrowing authority for what amounts to a $4 billion slush fund. This is over and above the amount of money required to run the government this year as has been projected. The government projected financial requirements in the amount of $17.1 billion for this year. It has already had $10.2 billion in borrowing authority this year and it also has $3.6 billion in unused authority from previous years. Bill C-125 proposes to give the government an additional $11 billion.
As a businessman I recognize the need for borrowing and the need to pay bills and accounts. But I also know that if I walked into my bank and asked for a borrowing requirement of $17,000 and I told the bank: "Just for the fun of it I want a little bit of a slush fund, so lend me $21,000", the bank would tear up my loan application.


An hon. Member:: They would give it to you.


Jack Wendele Shields: An hon. member on the other side says the bank would give me the money. Hon. members over there are not bankers; you can certainly tell that, Mr. Speaker.
If a small-business man went into a bank for a loan, he would show the bank his requirements. Take, for example, a small-business man who asked his bank for a loan of $1.7 million but said to his banker: "Mr. Banker, that is the requirement but 1 want $2.1 million because I need a $400,000 slush fund in case something goes wrong." The banker would certainly throw him out of the door. The banker would tell him that he did not know what he was doing and that he did not know how to run his business.
If I were responsible for a public company and as president went to the board of directors asking for the same kind of borrowing with a slush fund attached to it, the chairman and some member of that board would move a motion of nonconfidence and say to me: "Mr. President, get out; you do not know what you are doing."
The people of Canada are saying, and they are saying the same thing to their representatives in this House, that this government does not know what it is doing when it asks this House to approve a $4 billion slush fund. This is a way for the government to avoid its responsibilities and its accountability to the people of Canada through this very important green room.
During the past two years that I have been here, we have continually seen a hiding from the public of what the plans of the government are and what the government is going to do. We have seen a blue ribbon committee appointed. This committee has been appointed to discuss a budget that was brought into this House and introduced by the Minister of Finance (Mr. MacEachen). The budget may be changed as a result of the findings of this committee. The government is treating the budget as a white paper. The government is treating the budget as a document that has not been tabled in this House of Commons as a budget or a plan of operation for the country. The government has done it to the exclusion of every member in this House, including its own backbenchers. In fact, the government's backbenchers are being treated shoddily. They are treated worse than the government treats the opposition benches.
Every time I pick up a newspaper or a magazine I see the following kinds of headlines: "Canada's economy in decline; Canada's economy is now in crisis; Crisis situation faces Canada; Canada in severe recession; Worst unemployment facing Canadians since the dirty thirties". These are the headlines that we read every day. What about these: "Is it a depression? Canada faces sick economy; bankruptcies at an all-time high; investment at an all-time low"?
Then we read what the very cavalier Prime Minister (Mr. Trudeau), the very arrogant Prime Minister of this country, says: "We have had the hell scared out of us." The Prime Minister should not be saying that. He should be saying: "The Liberals under me have scared the hell out of Canadians right across the country." The Liberals have created a Canadian nightmare.
Yesterday in this House, I asked a question of the Minister of Energy, Mines and Resources (Mr. Lalonde). I pointed out to him what the national energy policy had done to the country. And what was his reply? The minister said: "I am not responsible for that member's nightmares." I was only telling the minister what is happening. To get a reply like that to a very legitimate question to him shows the arrogance of this government, a government that can come into this chamber and arrogantly place before this House of Commons an order-an act-requesting or saying-because the government knows it will be able to pass the bill-that it wants a $4 billion slush fund. The situation is absolutely ludicrous.
I ask all hon. members to reflect for a moment on why in this country, with our vast, abundant resources, with our natural God-given resources, with our wealth, our highly educated work force, a very highly productive work force, a
July 20, 1982

highly skilled work force, with people who desire to get out and build our country, we are in the economic mess that we face today. We have everything going for us, Mr. Speaker. Why has the economy gone the way it has? Why is unemployment at an all-time high? Why are bankruptcies at an all-time high? Why do companies have liquidity problems? Why are workers being laid off every day? Why do we have people frightened that they will lose their homes? Why are people feeling threatened with the loss of their life savings? Why are all these things happening?
What do we hear in our debates? We hear from government members that it is because of world conditions. We hear the Prime Minister say it is all a result of world conditions. We hear the Minister of Energy, Mines and Resources say the same thing. We hear the Minister of Finance say it is because of world conditions or it is because of the situation in the United States. We also hear that it is because of Reaganomics. That is what we hear from the red rump, the New Democratic Party, the "Liberal Party west". We hear about Reaganomics and that it is Reagan in the United States who is causing all of this mess. We hear that our problems are caused by the United States high interest rate policy, and because the U.S. economy is not moving, ours cannot move.
Then we hear other members say that our problems are caused by a lazy work force and that Canadians are not productive. The Prime Minister has the audacity to stand up and say that Canadians' expectations are too high, that Canadians have to bring the level of their expectations down. We have heard him say that Canadians have been living off the fat of the land for too long and Canadians now will have to tighten their belts.
Those are the kinds of things we hear. We hear that Canada's problems are the fault of unions, that union demands have been too high. Then we hear the problems being blamed on civil servants and that their wage increase will be held to 6 per cent this year. But most of all we hear the problems being blamed on the general public, because it wants too much and wants too much for nothing.
I agree there is a general downturn in world economy which is bound to affect to a degree what is happening here in Canada. I agree that our economy is tied closely to that of the United States and that as a result we in Canada are going to feel the effects of an economic downturn in the United States. Certainly that happens, but of all the countries in the western world, Canada is the best equipped to face an economic downturn. Why are we not facing it? Why are we not surviving the economic downturn? Why are we not a model for the rest of the world? It is because of lack of trust and confidence.
For 30 unprecedented years Canada was looked upon worldwide as the place in which to invest. Canada was looked upon as having a stable government; it was the land of opportunity. When people in European money markets talked about investing in the new world, Canada was the place to go because it had a stable political climate. It was the land of the future.
Supplementary Borrowing Authority
Do my hon. friends remember ten years ago when the Prime Minister said that the eighties belonged to Canada, that the next two decades were ours, that we would become a world leader? Well, we have become a world leader! We have become a showplace for the rest of the world to look at as an example of how not to run a country, of how not to rob from every individual in the country to run a bureaucracy like we have in Canada.
My hon. friends should read the publications of respected economists in Great Britain. They should read what they have to say about the Canadian economy. It will make them ashamed. They should read what has been written in German and French publications. I am talking about publications in France. They should read what they say in the European Economic Community. Canada has now been relegated to the position of a Third World country for investment opportunities, with an unstable government, a government which cannot keep its promises, a government which will say one thing one year and change its mind the next.
Let us look at the confidence which the government inspired with the national energy policy. It was outright theft of investment. We in Canada have always had a policy of inviting foreign investment into the country and of saying to investors: "Please come in and help us develop our resources. Please come in, these are the kinds of things we will give you: we will allow you to write off some of your investment against income". Various incentives were put in place.
The very first budget introduced in the House of Commons by the Minister of Finance was in the disguise of a national energy policy. It was disguised document. It was a document which actually stole; it was out and out theft of interest and investments of foreign companies. The government might just as well have come forward and confiscated entire companies. Every large investor, every foreign investor in Canada, saw what the national energy policy was doing. It was clearly the most shameful document to come before the House of Commons in the two years I have been here.
What was the result? Well, investment flow stopped. There was no more investment by foreigners in Canada. They said that they could not trust Canadians. They do not look solely at the Prime Minister, the National Energy Program, the Minister of Energy, Mines and Resources, the Minister of Finance or the Minister of State for International Trade (Mr. Lumley). They also look at Canada and say that Canadians can no longer be trusted because they have elected an unstable government which does not keep its word.
I have roamed the world. I represented Canada in the armed forces overseas. I was proud to walk down the streets with the inscription "Canada" on my shoulders. I was proud, but I do not have that pride today when I visit the United States or Europe. Do hon. members remember when we all used to wear little lapel pins depicting the Canadian flag so that everyone would know that we were Canadian? Many Canadians are not wearing them now because they know that the government stole investment from people who took us at our word when they were promised a stable climate for investment.

July 20, 1982
Supplementary Borrowing Authority
What has been the result? There has been a vast outflow of investment capital from Canada which is needed to develop our resources. It has gone to other countries. It has created a drain on our Canadian dollar. Immediately when that happens, our Canadian dollar gets weak. Then to keep the dollar from getting weaker and weaker, which contributes to inflation, the government in its wisdom must raise interest rates for shortterm borrowing to attract money back. The interest rate which we pay on investment coming to Canada is a reflection of how the investment community views the country.
We all know what first and second mortgages are. Do hon. members remember the days when we could obtain first mortgages for 12 per cent and second mortgages, because they were a little more risky, were available at 15 per cent or 20 per cent? We all knew if we went to finance companies to finance a car that they would look at our credit rating. We all knew that they would look at us as individuals and say: "Yes, he gets a preferred rate." It might have been 2 per cent or 3 per cent cheaper than the next man walking in the door who wanted to buy a car, because he was not as trustworthy and, therefore, had to pay more for his loan to finance his purchase. As a result of the national energy policy we are paying more to finance our country because the investment community no longer trusts Canadians, the Canadian government or the Canadian investment climate.
One country which has always been very similar to ours is Australia. It is much like Canada, a vast country, nearly as large as Canada, except for the Northwest Territories. It has a population of somewhere between 12 million and 13 million people. It is extremely nationalistic. Australia is as nationalistic as Canada, but it recognizes something which our government has failed to recognize, that the domestic supply of investment capital is not adequate. We do not have enough domestic supply of investment capital to develop resources in Canada to create a strong country. The Australians are very pragmatic. They have rolled out the welcome mat for foreign investment.
Let me turn to a list of names to see whether hon. members recognize them. They are: Carling O'Keefe Ltd., Canada Northwest Land Ltd., Coho Resources Ltd., Consolidated Live Star Resources Ltd., Hiram Walker Resources Ltd., Hudson's Bay Oil & Gas Co. Ltd., Medcon Resources Ltd., Norcen Energy Resources Ltd., Nu-West Group Ltd., Oakwood Petroleum Ltd., Ocelot Industries Ltd., PanCanadian Petroleum Ltd., Ranger Oil (Canada) Ltd., Sulpetro Ltd., United Canso Oil & Gas Ltd., Westburne International Industries Ltd., and Silverton Resources Ltd. Every one of those companies are Canadian companies which moved down to Australia during the past two years because of the economic climate, investment climate and political climate there. All told, there is approximately 30 Canadian companies operating in Australia at the present time with in excess of 1,000 Canadian geologists and approximately 2,000 well-trained rig operators, derrick men and floor men searching for oil and natural gas. And we wonder where the boys went? They did
not all go to the United States; many of them went to Australia.
These 30 companies were lost to Canada because we have a national energy policy in the guise of a budget, which virtually destroyed an industry. Australia has laid out the welcome mat. Mr. William Nixon, a Canadian, president of Medcon Resources has said that it is one of the last places where you have political stability and vast areas of relatively unexplored and interesting rock to play with. In other words, he is an entrepreneur who wants to discover and actively produce those resources. That man was driven from Canada.
I will quote another example. I have a report which says that the Australian government-
-staunchly supports both free enterprise and energy development. And, while the Fraser government as a whole is nationalist-minded, it's also pragmatic.
It recognizes that the domestic capital is just not there. Therefore, it has put out the welcome mat.
Another example concerns exploration permits in Australia which would make you think you were reading about Canada 10 or 15 years ago when articles of this type were written about Canada. They are now being written about Australia with Canadian players. The article states:
Exploration permits in Australia are like the old-style permits in the Arctic, says Medcon's Nixon. 'You get a large area and commit yourself to a certain work program. The production lease, what you eventually have to pay, is then defined around what you discover.'
The Australians have learned from Canada. God help them if they ever elect people there who think the way the people in the front benches of this Liberal government think.
I would like to continue with another quote about Australia. This also sounds curiously familiar:
As well, the Australians Foreign Investment Review Board (FIRB)-
We have LIRA, the Loreign Investment Review Agency.
-draws just about as much praise from oilmen as Canada's Foreign Investment Review Agency (FIRA) draws criticism.
'The Australian system is a much more workable one from everyone's point of view', says Deacon. 'They don't say everything has to be 50 per cent Australian-owned. They just want 50 per cent ownership once there's production. And once you have reserves, it's easy to get local partners.'
It is easy to get local investors to invest. Of course, that is what we had been doing in Canada for many years. The aim of the National Energy Program to make the oil industry Canadian was already, in fact, happening. It was happening because the Canadian players were becoming involved and were beginning to take over and expand.
People do not realize that we had some of the best technology for oil rig construction situated in western Canada. It was the best of anywhere in the world and we were shipping what was being produced in Canada to fields all over the world. Many people do not know that we developed a new pump in Canada for bringing out of the ground oil which is shipped all over the world. This technology was enabling us to expand the industry.
July 20, 1982

Canada now has the reputation of being unsafe as a place to invest funds. The world no longer trusts Canada. This has been happening over the last two or three years. The government has reneged on agreements with NATO. We have not lived up to our commitments to NATO. More important is the fact that we allowed a government to develop a policy and ram it through Parliament, since we were powerless to stop it, which actually committed outright theft of foreign investment in this country. That policy was the National Energy Program. Once you have had dealings with someone who has not kept his word, you are an absolute fool to return to that person and enter into another agreement. Any lawyer or judge will tell you that. For 30 years Canada was the place to invest. That is no longer the case because confidence and trust have been destroyed. Not only has that trust and confidence been destroyed in our foreign markets, it has been lost in Canada itself.
1 had occasion to walk into the lobby last night where two pages were sitting at a table discussing what would be the best occupation for a young person to take up. All members know these pages.


Mr. Kristiansen:: You said that last night.


Jack Wendele Shields: 1 know I said that last night, but it is worth repeating. We know these young pages. They are first year university students who are hopefully looking to what their future in Canada will be. These two pages came to the conclusion that they should enter into business dealings with bankruptcies, because that seems to be where the action presently is. That is a comment on our country. All across the country there are farmers, tradesmen and Canadian developers who have lost confidence in Canada. Canadian businessmen and those hardworking risk takers have lost confidence in Canada as a place to invest.
How do we restore confidence in our country? First, we must withdraw the National Energy Program. We must return to the pre-national energy policy days and restore a positive climate. We must phase out FIRA so that it works along the lines of Australia's review board of being flexible instead of saying to the world: "Foreigners stay out, Yankees stay out, because we do not want your investment." We must remove the taxes that were imposed in the second budget of the Minister of Finance. Those taxes hit every workingman and taxed everything he worked toward.
We must return to the concept that the government does not own everything. Everything should not be taxed. The government must move away from its concept that people cannot donate to charities because the money really belongs to it. Nothing is the government's unless the people want to give. Canadians have not lost confidence in Canada as a country. Canadians have not lost confidence in themselves as individuals. Canadians have not lost confidence in their own individual abilities. Canadians have not lost confidence in their skills, whether they be entrepreneurial skills or working men's skills. Canadians have not lost confidence in themselves to compete on an even footing with any other citizen of the world.
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Canadians know that the land is strong. Do hon. members remember that slogan, "The Land is Strong"? Well, Canadians know the land is strong. Canadians know that we will survive in this country, no matter what the present Liberal government does to the economy. But, hon. friends, Canadians have lost faith in the Prime Minister. Canadians have lost faith in the arrogant Minister of Energy, Mines and Resources. Canadians have lost faith in the Minister of Finance, who tries to tell us that things are one way when, in fact, they are not, when he dipsy-doos and plays a shell game every time he introduces a budget. Canadians have lost faith in the Minister of State for International Trade who, with his sleazy tactics, does not have the guts to stand up and work out an agreement with the Japanese on car imports but, rather, plays games at the border.
Canadians have lost faith in a government which continually works on brainwashing advertising across the country. Canadians instinctively know that with the God-given resources and talents in this country and our level of education, everything is going for us. But Canadians know that this government is probably the weakest government in the history of Canada and they pray for that group to be gone from this place. I say to all hon. members opposite, on behalf of Canadians across the country who have faith in their country and faith in their land but who have lost all faith in the present government, for God's sake, please do the honourable thing. Resign and go!


Hon. Michael Wilson (Etobicoke Centre):: Mr. Speaker, today we are debating the borrowing authority bill which is asking the House of Commons to give authority to the Government of Canada to raise another $11 billion. This is the second time the government has been to the trough and it is doing so because it must make good on the incredible error that it made in the budget of last November. Last November the government said the deficit would be some $10.5 billion. Just two weeks ago, seven months later, we heard that the size of the deficit is some $20 billion.
Let us analyze exactly what the government is requesting. Coming into this fiscal year, there was a carryover of $3.6 billion from the last year. Then, on June 15, the government asked for $6.6 billion worth of borrowing authority. When that is added to the $11 billion that it is requesting now, it amounts to a request for a total of $21.2 billion of borrowing authority, contrasted to the $17.1 billion worth of cash requirement of the government as stated in the budget. That is $4.1 billion more than is needed, a $4.1 billion cushion, or "slush fund", as my friend, the hon. member for Athabasca (Mr. Shields), said. That is a 24 per cent cushion or margin for error that the government says it needs in this borrowing authority. That may seem reasonable in light of the 100 per cent error it made at the time of the last budget, but it is not good enough for the taxpayers of Canada. It is not good enough when we consider the impact of that $20 billion deficit and it is not good enough when we see the impact which loose financial management over the last ten years has had on people in the country today.

July 20, 1982
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The figure of $17 billion or $20 billion is huge. It is very hard for anyone to understand the impact or the size of such figures. They are massive and must be put into some form of perspective so that people can get an understanding of exactly what we are discussing here. My colleague, the hon. member for Prince Edward-Hastings (Mr. Ellis), developed some very useful statistics which he put forward in the House a couple of weeks ago. They related to his riding, particularly the City of Belleville, but I have arrived at statistics for my own riding of Etobicoke Centre and the similarity of these statistics is surprising. They give us some idea of just how big $20 billion is.
We all pay municipal taxes in one way or another, whether through rent or as homeowners. Those who are homeowners must write cheques four, five or six times a year for the exact amount of their municipal taxes. Let us look at the $20 billion deficit in relation to municipal taxes. I am just referring to the deficit, not over-all federal government spending, which would be about four and a half times larger. The deficit is equivalent to about $840 per capita, per individual, per man, woman and child in the country today. For the residents of Etobicoke Centre, that works out to about $86.9 million. The total municipal bill in Etobicoke Centre for police and fire protection, for roads, garbage collection, snow removal, public transit and education, amounts to $67.5 million. In other words, our taxes could increase by nearly 30 per cent before the municipal taxes would be equivalent to our share of the federal government deficit. That is the magnitude of the problem which we are letting this government pass on to future generations. The government is spending money so fast now that it is spending the total share of the municipal budget of Etobicoke Centre in seven and a half hours.
Let me give hon. members one more figure. We have seen the government blow about $700 million on Mirabel Airport. The Minister of Transport (Mr. Pepin) is making a valiant effort to work out that problem right now and he is facing much conflict within his own caucus. That $700 million would pay for Etobicoke Centre's share of all municipal services for over ten years. We would not have to pay another nickel in taxes if that $700 million had been devoted just to Etobicoke Centre. It is easier for all of us to understand the magnitude of the problem when we consider it in terms of our own neighbourhoods. As I say, the Belleville figures are not far off from those of Etobicoke Centre, so I would imagine that there are many communities in Ontario as well as in other parts of Canada which could put the budget deficit in the same perspective and get a better understanding. It is more than equivalent to the municipal taxes all of us are paying across the country.
The Minister of Finance (Mr. MacEachen) is asking each Canadian taxpayer to sign a cheque for $2,000 to pay for his mistakes. All Members of Parliament should ask themselves how many of their constituents would be willing today to sign a cheque for $2,000 and send it to the Minister of Finance saying: "Here, Mr. MacEachen, this is to pay for your mistakes and for your shortfall." I do not think many Canadians
today would be prepared to do that. That is a question all Members of Parliament should be asking themselves on behalf of their taxpayers.
It does not stop there. This huge $20 billion deficit has to be financed through borrowing. These deficits are accumulating and have been accumulating year after year since confederation, but not at the alarming rate we have seen in the last few years.
In the early part of the seventies, the budget was just about in balance. There were some deficits, some surpluses. In the last four years, the deficit has averaged $9.5 billion per year. In the current year it will jump to $20 billion. According to an article in Maclean's Magazine, the deficit next year will increase to $22 billion. We have not yet been told those figures. We tried to find that out from the Minister of Finance but he would not tell us what will happen next year. He does not trust us. He does not want us to know the depth of the problem in this country.
Right now the total debt of the country works out to about $5,500 for every man, woman and child, or $14,500 for every taxpayer. As I said earlier, it will jump by another $2,000 after this year to $16,500. The critical element is that we are financing these deficits on an ongoing basis at interest rates between 15 and 20 per cent per annum. That debt accumulates in an alarming way. It doubles every four or five years.
Let us look at last year's deficit of $11.5 billion and this year's deficit of $20 billion and see what will happen to them by 1990 if interest rates stay at the same level they are at today. Those two years alone, nothing else, will build to $116 billion by 1990, almost the size of the total federal government gross debt today.
That is the magnitude of the problem we are dealing with here. That is why we have to do something to get this huge problem down to a size where we can deal with it. We are leaving this problem to our children and grandchildren. We are asking them to pay for the government waste and expenses that Canadians do not want to pay for today. We are mortgaging their future in a major way when the debt is accumulating at rates of interest between 15 and 20 per cent.
Eight years ago $1.00 out of every $9.00 of federal government spending was devoted to payment of interest alone, not repayment of debt but interest alone. Next year one dollar in four of government spending will be devoted to payment of interest on the public debt-no repayment of debt. The government has been asking Canadians to support its irresponsible fiscal policy for ten years.
Economic conditions are getting worse and there is still no effort to turn the matter around. The government is, in effect, asking us to steal from our kids. Each of our children who this year enters the work force will be asked to take on a debt of $14,500 to finance the fiscal mismanagement of the past ten years. That is what we are being asked to do today. That is what we have to change.
July 20, 1982

One of the major goals of this budget is to send a signal to the capital markets today to tell the markets how much of the country's financial resources are to be taken by the federal government. How strongly is the federal government going to compete with other more productive users of capital? That is the $20 billion shock of the budget of June 28.
Government spending this year as a percentage of the overall national income is at 25.3 per cent, a post-war high. This year the government will be taking the largest share of the total economic activity of the country it has taken since the war. That means more taxes for the future. It also means more borrowing in the future.
Let us look at it from the standpoint of the impact of borrowing. In 1980 the net new issues of all securities- federal, municipal, provincial governments, as well as corporations-was $31 billion. In that year the Government of Canada took 36.7 per cent. In 1981 the amount had decreased to $26.8 billion and the government took about 46.5 per cent of that amount. We do not know what the total new issues will be this year, but probably they will be a little lower because of the poor markets we have had. The markets have been devastated by the impact of government policies over the past few years.
However, the Government of Canada will be taking $17 billion of that and it will amount to 60 per cent of the total issues. That is what we mean by crowding out. Borrowers have been crowded out. They have been forced into the banking system as the only source of capital for them.
In 1980-81 the provinces and municipalities were not borrowing a considerable amount of money. In some cases the provincial governments in aggregate were in net surplus. They were not putting much pressure on the markets. This year the problem of crowding out will become compounded because of the increase in borrowing requirements. Therefore the small-business men, home owners, those who want to buy a car, farmers, fishermen and others who need money will have to compete against this massive government borrowing.
When the minister came back from Versailles, he had the audacity to tell us that the big problem in this country today was the huge size of the federal government deficit in the United States. He said if we could only get the United States to deal with its huge deficit problem, we would be better able to solve our problems here. Let us look at the size of the deficit in the United States. On a per capita basis it is about $475. In Canada, as I said a moment ago, it is $780. It is 65 per cent higher in this country than in the United States. That is why we have a problem with interest rates in this country.
Let us look at this in the context of one of the most serious problems we have today, the problem of the severe corporate liquidity squeeze in the country. The Bank of Montreal did a study which it issued last month. It is a very illuminating study because of the generally deteriorating picture across Canada and across industries in the area of corporate liquidity. I want to quote a few statistics. The ratio of interest to pre-tax income in the years 1977 to 1980 has been running at between 20 and 25 per cent a year. In 1981 that figure had increased to 66 per cent. It is bound to go up further this year because of the
Supplementary Borrowing Authority
continuation of high interest rates and the clearly depressed corporate profit position.
It was announced earlier this year that corporate profits were down between 40 and 50 per cent. Let us put it another way. The coverage of interest by earnings in those earlier years was about five to six times. In 1981 it dropped suddenly to two and one-half times. Various other ratios are quoted which give the same picture.
There is one important figure, critically important today in light of the bankruptcies that have been occurring across the country-the net working capital, the ready cash that keeps a company in business. When there is no working capital, once it has run out, the game is over and the company goes bankrupt. Net working capital in the first half of 1981 actually dropped by $1.7 billion, and that is widely spread across many industries. This report says that some industries are quite vulnerable. It also says: "Should present trends continue, the results will most certainly be disastrous." That is not political rhetoric. That is raw economic analysis based on the facts in the real world today.
For the future the report concludes that the deterioration is accelerating. It does not imply that any real pick-up in activity will be sustained, because of this problem. The response of industry is seen regularly. The clear objective of many companies today is survival. That means cost cutting. That means lay-offs. The struggle for liquidity is really being made on a panic basis. The necessity to preserve cash is essential to the maintenance of business, but the response of the government in the face of this problem is business as usual. "We increased our spending last year by 20 per cent; let's increase our spending this year by another 20 per cent." For two years running spending will increase by 20 per cent.
As 1 said before, Maclean's had told us that the budget deficit is forecast by some people in the Department of Finance to be another $3 billion. That means we will have continuing pressure on interest rates. It means that people who need to raise money for new cars, homes, rolling over mortgages or for the maintenance of small businesses will be under severe pressure when they have to raise money.
We in the Progressive Conservative Party have been very conscious of this sharp deterioration in the economy. We warned of it last September, and we are very conscious of the impact of the huge $20 billion deficit on the very weak position of Canadian industry today. We have continuously been proposing clear alternatives to the measures proposed by the Liberals and New Democrats in order to ease this situation. First, we have said there must be restraint in government spending. We must have a board program to cut discretionary spending by up to 10 per cent. The prime focus of this type of spending cut would be in areas such as government advertising, which clearly is not essential; in rental costs and professional and consulting fees; and in general materials rented by government departments across the board. This has to be done

July 20. 1982
Supplementary Borrowing Authority
in an equitable way. Let us not be fooled by the questions hon. members opposite put to us. They say, "Where would you cut?" Cuts cannot be made in one particular area or another; there has to be a broad attack on discretionary spending across the board. Back in 1979 we showed that it can be done. We have shown that the Conservative Party, with a commitment, an understanding of the problem and the necessary management skills, can do it. At that time we kept government spending 2.5 percentage points below the rate of growth in the national income.
The second point is that we could reduce the pressure on the Canadian dollar by changing the policies which have caused that pressure. My colleague, the hon. member for Athabasca, referred to the National Energy Program and clearly set out in his speech that that program is one of those policies which has caused that pressure on the Canadian dollar. The Foreign Investment Review Agency has policies which are scaring money away from the country. My colleague discussed that as well. It is clear to all Canadians that downward pressure on the Canadian dollar is leading to upward pressure on interest rates. High interest rates only aggravate the tremendous corporate liquidity problem we have today. That is causing the lay-offs which are swelling the unemployment ranks in the country today.
The third objective should be to create a more favourable investment climate by reversing those parts of the November budget which have undermined the investment climate in the country and have dulled the investment intentions of Canadian business.
All these policy initiatives would lead to a reduction in the deficit, a reduction in interest rates and an easing of our economic problems. The over-all result would be a reduction in the federal government deficit. Let me make it quite clear that the federal government deficit will not be cut just by cutting spending alone. It will be reduced only if we get economic activity going and if we bring about a reduction in interest rates.
The three-point program I have just outlined would go far in achieving the objectives of growth and lower interest rates, but cost cutting is also a very important element in sending a signal to the private sector that Canadians can understand. Canadians should expect that the government means business about controlling its spending and reducing the deficit. That signal has never come. The minister says that the Government of Canada will limit the growth in its spending below the growth in the economy. That is a cruel joke because government spending, two years running now, has been increasing 20 per cent per annum. But then the minister goes on and bleats about all the expenditures which are totally outside his control. He says he can do nothing about them because they are statutory or they are contractual. The minister has a point there, but those of us who have families and have to control our family expenses and those of us who have small businesses or large businesses and have to control our business expenses all have contractual expenses such as rent and interest. We
also have to eat, but if our over-all spending increases faster than we can afford, we cut back.
Let us look at the basis on which the government would judge itself. Let us look just at discretionary programs, the programs I said we would have to cut, in terms of spending, by 10 per cent. What has happened? The amounts spent on those programs have increased at a rate 2.5 percentage points faster than the rate of growth in the economy this year. So much for what the government says is its prime yardstick for judging whether it is restraining itself. That restraint is just not there.
Hon. members may wonder why I have been so concerned about government spending. Let me put it in the most simple terms I can. Government spending leads to higher taxes, higher taxes lead to more spending, and so on. It is a vicious circle. Just to illustrate my point, let us look back at the 1980, 1981 and 1982 budgets. They are perfect textbook illustrations. The 1980 budget imposed higher taxes through energy taxes. We found out that tax revenues were expected to increase 31 per cent one year and 50 per cent over a two-year period. However, that higher tax revenue led to slackness in control of government spending. As I said a minute ago, we have seen that government spending increased 20 per cent one year and then 20 per cent the next year.
What happened in last November's budget? One does not need to be a genius to figure it out. The government came to the trough and said: "We have to increases taxes $1.4 billion," and it did so under the guise of tax reform. What do we have as a result of the increased spending in the June budget? We have a $1.3 billion increase in spending under the guise of deindexation.
The tragic part of this $2.7 billion increase in taxes is that we are in a serious recession. This is the first time we have had taxes increased by this magnitude in a recession since the 1930s. There is no economic theory which calls for increasing taxes in the middle of a serious recession. I do not believe the goals of Canadians to generate economic growth, to reduce unemployment and to preserve our economic freedoms are met by increasing taxes in a recession. We have to make a fresh start by reducing government spending if we are to get off this vicious circle and meet the objectives I am sure all Canadians have.
Let me make one other thing clear. I say in all seriousness that the job of the Minister of Finance is to protect the fiscal integrity of the Government of Canada and to manage the nation's finances in a prudent and proper way. The Minister of Finance has failed in relation to those objectives. He has failed in his responsibilities. Inflation is running at 11 per cent to 12 per cent per annum. The value of the Canadian dollar dropped from 87 cents at the time the minister took over his job to 77 cents and then around 76 cents a few weeks ago. It is now bubbling along at about 79 cents. The human toll of this 10.9 per cent unemployment rate, representing 1.3 million unemployed, says it all. It shows where the minister has failed. All of these figures represent a devastating condemnation of the minister's performance on the job.
July 20, 1982

Let us consider what might happen next year, Mr. Speaker. We have no projections. The Minister of Finance has said that he cannot give us projections because he does not know what is going to happen and he does not trust his figures. At the same time he has enough contempt for this Parliament to come here and ask us to authorize $11 billion more borrowing to carry over to the next fiscal year when he has not even given us projections for that fiscal year.
Some of us have done the calculations, Mr. Speaker. Some of us have some understanding of what the figures for next year might be. We believe that the Maclean's magazine figure of $22 billion is correct and it is for that reason that we are resisting the government's request for another $11 billion borrowing authority.
This uncertainty in the future is the cause for real concern in business in Canada. Business fears that the $22 billion deficit figure for next year will be low and that the pressures on the market, on interest rates, for financing businesses and households, rollovers on mortgages, new cars and other goods that need a bank loan, will be even greater. Confidence is bound to remain low if people do not trust the government's ability to see ahead into next year.
Canadians want to hear the truth today. They want to know how serious the outlook is in the minister's view. He must tell Canadians what that truth is. It may be his last chance to tell the truth, Mr. Speaker.
Most of all, Canadians want the government to live within its means and not to ask the rest of the country to make sacrifices. From the June 28 budget we see that the country is in a real bind. The government wants all Canadians to move to the 6 per cent world of recovery, but at the same time it wants to stay in its dream world of 20 per cent spending increases. While the rest of the country has to suffer with a 6 per cent increase, the government is going to increase its net debt by a full 18 per cent.
The Minister of Transport and others in the government have expressed some doubts about whether Canadians will move to the 6 per cent world. This is why Canadians are reluctant, Mr. Speaker, because they do not feel they are being treated fairly. They do not believe the government is committed to deal with the problems of the country. It is either that or the government does not have the intelligence or the confidence in Canadians to understand that they are not treating them equitably, with a fair hand. That is the problem we are facing today.
I want to comment briefly on the amendment moved by my leader yesterday, Mr. Speaker.


Mr. McRae:: Mr. Speaker, on a point of order, I wonder if the hon. member for Etobicoke Centre would accept a question before he goes on to his next point, or at the end of his speech.


The Acting Speaker (Mr. Patterson):: Would the hon. member accept a question?
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Michael Holcombe Wilson: Mr. Speaker, I would prefer to defer the question until I finish my remarks. After that I would be prepared to accept a question.
The first amendment we offered was to decline second reading of this bill. There is a well established principle that Parliament only provides sufficient borrowing authority to a government to allow it to finance its operations within the current fiscal year. It is quite clear from the figures in the bill and from the statement by the Minister of State for Finance (Mr. Bussieres) in response to my question yesterday that the government has every intention of this borrowing authority spilling over into 1983-84.
This is all the more reprehensible because the government has not given us any projections about what will happen in 1983-84. If things are too uncertain for it to predict what is going to happen in 1983-84, then it is too uncertain for us to give it the carte blanche freedom to go on spending money like a drunken sailor. It is for that reason that we feel the government should withdraw this bill and offer something that will allow it to live within its means. This bill is clearly objectionable. I believe that amendment must be and will be supported by other members of the House.
The second part of the amendment put forward by my leader yesterday was to the effect that after this bill before us is withdrawn and replaced, we expect the government to reduce its borrowing requirement in view of what we have said about the level of increase in government spending. It is clear that the impact of this borrowing will lead to an increase in interest rates. Canadians do not need an increase in interest rates, Mr. Speaker. It is absolutely essential that the government embark on a program to cut its spending to reduce its safety cushion, the margin for error, the slush fund of that $4 billion requested in this bill. It is for that reason that we believe that, together with a reduction of some $2 billion in cash balances, the borrowing authority can be cut back to $5 billion through these three steps.
It is also very clear that the budget was a short-term response to our immediate economic and political problems. It is not a long-term solution. It is not part of any long-term plan. I believe a long-term plan will have to be presented to the House some time in the fall. Perhaps the Secretary of State (Mr. Regan) will give us an indication of that when he speaks.
At that time the government will give its projections for the next fiscal year and we hope it will get back to giving projections on a five-year plan as in previous budgets. At that time we should be asked to give the full borrowing authority that will carry the government through, based on those projections. In the meantime, the House should be asked only to provide borrowing authority until the end of November or possibly the end of December. The figure of $5 billion should be more than sufficient to meet those requirements.
The second amendment regarding future borrowing authority would provide greater protection for taxpayers. Currently there is no over-all limit on borrowings by Crown corporations and no limitation on the total amount of guarantees that the

July 20, 1982
Supplementary Borrowing Authority
government can give out in loans under the enterprise development program, for Canadair or for financial rescue operations such as Chrysler and Massey-Ferguson. For most Crown corporations the only authority necessary is the approval of the Minister of Finance.
Let us consider the loophole in the borrowing authority, Mr. Speaker. Many of the large Crown corporations, such as the EDC, Petro-Canada, Eldorado or the Federal Business Development Bank, can borrow directly from the government or go to the public market. If the government falls short in its estimate of what the deficit will be, then the minister will be under pressure not to come back to the Flouse but to push some of the Crown corporations into the open market and free borrowing room for the Government of Canada directly. Whatever happens, the net result is that the exposure of the taxpayer will be increased and Parliament will have lost control of the over-all borrowing by the government or of borrowing indirectly through Crown corporations.
Let us consider another possibility. Many companies are under severe financial pressure today. I discussed that matter earlier in my speech. Some of these will come to the government directly for help and some have done so already. We must have more control over this area, Mr. Speaker. The amendment asks for three things on this score: We want an over-all limitation on the amount of borrowing by Crown corporations-so-called off balance sheet borrowing; we want an over-all limitation on the total amount of government guarantees of loans; we want an annual report setting out in one place all the information on this type of financing which is supported by the government; or, to be more precise, which represents an indirect call on the resources of the taxpayer.
We do not know today what the total amount of Crown corporation borrowing is and we do not know what the over-all amount of government guarantees is. We feel that it is essential that taxpayers and voters have this information. We do not know either, in these hard times, how many government guarantees will be called on. We have had two examples in the last six or seven months, Massey-Ferguson and Consolidated Computer Corporation, involving an aggregate amount of around $350 million.
We are making these I believe very responsible requests because we believe this type of disclosure and control is necessary. I do not believe there is one taxpayer in the country who would not give us support. I call on members opposite to discuss these proposals with the Minister of Finance and encourage and pressure him to allow an amendment or, if not an amendment, a form of legislation which will provide this protection to the taxpayer.
I serve notice on members opposite and the three ministers present that this is not a frivolous request designed to waste the time of the House. It is a very serious and I believe very reasonable request for a much tighter degree of control over government financing. I also say to the ministers opposite that with that type of control they will be in a much stronger
position to resist the pressures which are bound to be applied to them in the months and years ahead.
The evidence is very clear, Mr. Speaker; this government must reduce the borrowing requirement. It does not need all the money it has requested. The government has hidden from Members of Parliament the complete picture of its over-all requirements and it has made no attempt to control spending. The already severe liquidity crisis which all corporations are experiencing is being added to enormously by pressures from the increased government borrowing, and it is also increasing the unemployment problem in the country today. The crowding out of private sector borrowers and the increase in interest rates due to competition from the government is intense. Finally, the forecast increase in spending is bound to lead to higher taxes as we get more and more engrossed in that vicious circle I referred to earlier.
The government must give serious consideration to the alternative policies we have put forward to ease this liquidity crisis and the pressure on interest rates. The government must amend the bill to remove those loopholes which allow unlimited borrowing by Crown corporations and unlimited guarantees by the government. For that reason, Mr. Speaker, I feel this bill must be opposed.


Paul Edmund McRae: Mr. Speaker, I asked the hon. member earlier if l could ask him a question. I am a little puzzled about one statement he made, that the Canadian deficit is about 65 per cent higher than the U.S. deficit on a per capita basis. 1 hope he is comparing the same years because, do not forget, the American fiscal year is October to September and ours is April to March.
What figures is the hon. member using? OECD uses a figure of about $150 billion; some of the figures coming out now in the U.S. show the deficit this year could be $125 billion, and up to $170 billion or $180 billion next year. The figures I get seem to indicate that the deficits of each country are very close to each other on a per capita basis.


Michael Holcombe Wilson: Mr. Speaker, the figures I am using were arrived at by a bi-partisan compromise in the United States Congress, which has been put to the President as the basis for a budget for the next fiscal year starting in October. That budget will develop a deficit of some $110 billion. If the hon. member wants me to use another figure, I could use the $22 billion deficit projected for next year by people within the Department of Finance, as was indicated to Maclean's magazine, and that would probably move it up to about 175 per cent.


Paul Edmund McRae: You are using two different fiscal years there.


Michael Holcombe Wilson: The fiscal years cross. The fiscal year I am using started in March, 1982. If the hon. member wants me to use the one starting March, 1983, I am happy to do it, because then the figure is 175 per cent, not 165 per cent.


Gerald Augustine Regan: Mr. Speaker, in view of some of the speeches we heard yesterday and today in
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this debate, 1 think it is important to remember that we are dealing with a borrowing bill, not with a budget and specifically not with the deficit. It is money that government needs to meet its commitments for pensions, family allowances and other programs which hon. members feel are important to the country. In due course I will be talking about why such a deficit exists at the present time, but the distinction must clearly be made between the excellent budget which the Minister of Finance (Mr. MacEachen) has presented and the question of the deficit, which results not only from what has happened to our economy but also what has happened to the economies of the United States and other countries of the free world.
Without question we are confronted today with a serious recession both here and in the U.S. Even in West Germany, a country which ever since its recovery after World War II has seemed to be immune to unemployment, the recession has brought a higher level of unemployment than has been experienced in North America.
Having said that we are dealing with a borrowing bill, 1 want to start by saying a word about the speech made in this debate by the Right Hon. Leader of the Opposition (Mr. Clark) yesterday. He is a man for whom I have considerable respect, as I have said on a number of occasions, but he does have a habit or custom of falling into error and mishaps rather frequently and easily. If one were to read yesterday's Hansard and conclude that he is as accurate in everything he said as he was in the very first paragraph, then 1 think we will have to write off his remarks in relation to this bill rather quickly. If you do not mind, Mr. Speaker, I am going to go off on a sharp tangent and just read the opening paragraph of his speech yesterday. He said:
Mr. Speaker, I am a baseball fan-
So he qualifies himself as an expert right off the bat on that subject!
-and I remember when the changes were brought into the American League; assuming that a Editor's note: The word "batter" appeared incorrectly in daily Hansard. See page 19452. batter was not quite up to being able to knock the ball out of the infield, they brought in a designated hitter. It is pretty clear that the Minister of Finance (Mr. MacEachen) felt he was not able to come in and defend the atrocious $20 billion deficit and the demand for money which the government does not need and cannot justify . . . We do not have a designated hitter here. We have a designated apologist-
I imagine, Mr. Speaker, most members of the House, unlike the Right Hon. Leader of the Opposition, know exactly what a designated hitter is. What the Leader of the Opposition was talking about was a pinch hitter, a person sent in to replace a batter who is thought unable to hit the ball particularly well. The designated hitter rule is one which provides that the pitcher never comes to bat in the American league regardless of whether he is a particularly good or particularly bad hitter.
Perhaps the Right Hon. Leader of the Opposition could be forgiven that he did not designate himself at the beginning as being a baseball fan and therefore somewhat knowledgeable. The hon. member from Quebec who is standing at the back
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would know the difference very clearly. But when I read what the Right Hon. Leader of the Opposition said on the subject yesterday, I have to conclude that his understanding of the economy is the same as his understanding of baseball. The baseball judgment that would be made of him would be "Fair field; no hit." In other words, when he is in opposition, he is able to talk against things; but we have already seen when he has been in government that he had some problems coming through and doing the things that are so easily said can be done when in opposition.


Michael Holcombe Wilson: But we did it.


Gerald Augustine Regan: You sure did it.


Michael Holcombe Wilson: We cut spending right away.


Gerald Augustine Regan: The hon. member for Etobicoke Centre (Mr. Wilson) who has just spoken said they did it when they were in office. They did it in such style that after only eight months the electorate threw them back into opposition where they so justly deserve to be. Not only did the Tories achieve that, but they set a record of some sort. I do not know of any new government coming into office on such an auspicious occasion, when other people had been in for 16 years, that was disposed of in such short order.
How about contrasting that occasion with the last time the Conservatives were in power? When the Conservatives came to power in 1957 with a minority government, after being around for about eight months Mr. Diefenbaker called an election. The public said: "We may not agree with everything these people have done, but they deserve a chance to show what they can do as an alternative." The Conservatives were given an overwhelming majority. Does it not gnaw a little bit at the innards of the hon. member opposite? What a contrast that was to when the Tories came in under the leadership of the present Right Hon. Leader of the Opposition. This time, after eight months in office, when the public was faced with the opportunity to give the Tories a full term and a full chance at a majority government, the reaction was very different from what it was in Mr. Diefenbaker's day. The public said "that is enough". They said "no more".


Michael Holcombe Wilson: What about a small wager? Your seat against mine in the next election?


Gerald Augustine Regan: The hon. member wants to wager my seat against his. He can make up his mind whether he would like to run against me in my riding or whether he wants me to run against him in his riding. I would win in either case.


Some hon. Members:: Oh, oh!


John Patrick (Pat) Nowlan: Hope springs eternal, 18-cent-a-gallon lover.


Gerald Augustine Regan: In his remarks today, the hon. member for Etobicoke Centre seems to have ignored what has happened in relation to the budget of Canada, the United States and other countries since last fall. He would leave the impression that the size of this deficit flows from a tremendous increase in government spending. He would have us believe that the government

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spent a great deal more money than it had projected, and that is why the deficit is such a size. While he is saying that, he is not being totally honest with the people. It is a case of not having full disclosure. He knows as well as I do that the problem has been not just in Canada but in the United States and other areas which were hit by a recession last fall and which has unfortunately deepened since then. Governments have not been spending more money. The question has been a tremendous fall off in revenues. Fewer people and companies have been making profits and less money has been coming in through taxes. That is quite an unusual difference.
In saying that these are unusual times, I will say something further later on about the question of comparing what happened in Canada with what happened in the United States. But it is interesting to note immediately that in this question of decreased revenues, and therefore larger deficits, the same thing that happened in Canada under this government happened in the United States under a Conservative government; has happened in France under a socialist government; has happened in England under an arch right-wing government; and has happened in Germany under a social democratic government. Those are the facts that need to be remembered in these circumstances. In such times as a temporary decrease in revenues, whatever government is in office must either borrow more or simply fail to pay its bills, simply fail to pay the money transferred to the provinces for provincial programs or fail to pay the money transferred to people for people programs.
If the government does not receive this money-if this bill does not pass-and if the government does not borrow the money, does not borrow the necessary funds in such unusual times, it will mean provinces will not receive their transfer payments, pensioners will not receive their pensions and other worthy government programs will not be carried out.
The Right Hon. Leader of the Opposition, after being caught off first base on baseball yesterday, after being picked off there, went on to say that he would cut this borrowing bill by $5 billion. He did not say which programs of the government he would cut off.


Mr. Fulton:: External affairs.


Gerald Augustine Regan: The Tories would cut external affairs.


Roch La Salle: We would have $4 billion more.


Gerald Augustine Regan: The isolationist attitude would return. We would be putting our heads deep in the sand and we would have no relations with other countries. Therefore, as a trading nation we would not be able to carry out our trade to advantage and the standard of living in Canada would collapse.
So much for that idea of the Leader of the Opposition. He has not said what other programs he would cut. But do you know, Mr. Speaker, what I suspect he would do? I suspect that what the leader would do would be to cut the programs that would help the ordinary working people of this country, pensions and things like that. That is the way he allowed the
hon. member for St. John's West (Mr. Crosbie) to talk before the public took away the chance and took the rug right out from under him, preventing him from doing what he would do in that regard. That is the way the Tories were talking. They were talking just like Reagan was talking in the United States, which was to cut back on the support for the disabled and the people who simply have a disadvantage in our society.


Mr. Althouse:: But Reagan is your brother.


Gerald Augustine Regan: No, his name is Reagan. Mine is spelled differently, thank heaven! I must not be drawn aside by these comments from the other side, Mr. Speaker.
I want to say that the situation that we are in today with reference to borrowing more money in such times is something that people in business often experience. People in business often find themselves in similar circumstances. I am not talking about the salaried people, people who receive a pay cheque each week as employees. They always face a threat in hard times. They may lose their jobs or find themselves working only part-time, and that is a terrible threat. I am referring to people who are themselves in business. Those who operate any sort of business know that, if their income depends on sales, there are years and trends in business when they do not take in as much money as they need in order to pay themselves a salary and operate their business. In those circumstances, they have to borrow. As long as they have the credit and the resources behind them to justify the credit, businessmen weather economic downturns and their business continues and goes on to better days making good profits. That is a parallel to be drawn.
Hon. members opposite who have participated in this debate would have us believe that this is not an unusual year, that there is nothing extraordinary about the circumstances. They would not look across the fence at the United States or at the rest of the world to see that the problems we have are in common with other areas.
What about our situation? Is this government doing the right thing to allow such a deficit to exist when revenues have fallen off to this extent? Or is there some other reasonable alternative? I believe that the government is doing the right thing. It is not following the course of the arch-conservative government of the United States, but is following the course of maintaining important government programs of support to people rather than cutting them. I think most responsible groups in office would do the same. We will not interrupt worthy programs of support to people, but we must practise restraint. This is why the Minister of Finance came forth with a program which can lead us to a 6 per cent society and recognizes that in these times we must all sacrifice if we are to prosper thereafter. Also the program recognized that we must work together as a nation to ensure that the restraint does not rest heavily on the shoulders of any one group but, rather, that all share in the sacrifice.
July 20, 1982

I believe there are many expenditures which can and should be cut. This is the case not only in relation to this government but in relation to every government, whatever its political philosophy, of every large territory, province or country anywhere in the world. Also we will find that this is the case in normal times in very large companies. We find that the same duplications will sometimes occur in any large organization. As a minister of government I want to say I recognize in these times that it is the responsibility of all of us who have such assignments to be particularly vigilant in watching our departments and in finding where cuts can be made and money can be saved.
I do not have the exact figure, but we must remember that only about 20 per cent of total government expenditures relates to the operation of government, the employment of all people who work for government and all associated activities. The vast majority of the money handled by government, which makes up the budget and contributes to the deficit, is expenditures in transfers to people and in transfers to other levels of government. We are reluctant to cut these for the reasons I have indicated. We are in the position of having to borrow substantially more money than was anticipated last fall on the eve of this very serious recession.
We are not the only government in that position. We have a deficit which is favourably comparable on any basis to those of the United States, of Japan and of Germany, and indeed on the basis of our resources and our population, to many of our provinces. I have said elsewhere-and 1 ask hon. members to think about this fact-that when we examine how a government is doing, when we try to decide whether people who have responsibilities of management and administration are out of line in their practices and their policies or are doing reasonable jobs, it is a good test to look and see how our neighbours are doing. If I found that we were running up a much higher deficit than had been expected and that the United States, Japan and the European countries were reducing their deficits, then I would say that there was something wrong, that this government was doing something wrong. But that is not the circumstance in which we find ourselves today. Hon. members opposite conveniently ignore that fact when participating in this debate.
The deficits in Japan, the United States and Germany have greatly increased over what they anticipated. I think that is the first area of comfort, because while the deficit is much larger than 1 would like to see it, this can be attributed a great deal to international circumstances and therefore requires international remedies. The problem exists in other countries, regardless whether they have Conservative, socialist or Liberal-type governments. Whether a person, a company or a government borrows for capital purposes, the amount which can be advantageously or safely borrowed depends upon what is available by way of assets to the lender. If persons go to banks or credit unions, they want to look at their level of income, their assets, and their potential for using their assets to achieve a cash flow for the future.
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I wish I had not said that the Right Hon. Leader of the Opposition was kicked off first, because if he was it is hard for him to be also caught stealing second. What the Leader of the Opposition said yesterday on this subject was a case of his being caught stealing or trying to steal second base; heaven only knows how he got to first.


An hon. Member:: He did not even get to first.


Gerald Augustine Regan: He stood and participated in this debate. He compared the Canadian and American government deficits on a per capita basis without knowing what the deficit would be. He made his comparison strictly on a per capita basis. He did not apply any other test in determining what is an appropriate comparison of the level of deficits between that of our country and that of the United States.


Mr. Gustafson:: It is much higher here; it is ten times higher.


Gerald Augustine Regan: The hon. member opposite says that it is much higher here on a per capita basis. I should like to put a proposition to him. If he says, as did the Right Hon. Leader of the Opposition with his rather shallow understanding of the economy, that it is safe to carry a deficit in unusual times based upon the population of the country divided into the deficit, there is no question that the two countries in the world which should be able to carry the biggest deficit would be Bangladesh and India. I do not believe the hon. member would have the temerity to suggest that India and Bangladesh, with their lack of resources, with largely uneducated and untrained work forces, with their other problems and very low levels of savings, could carry much larger deficits because they have larger populations than other countries. The per capita comparison of the Leader of the Opposition, the idea that the size of deficit a country can safely carry relates to the size of its population, is unmitigated nonsense.
Let me tell the House what matters. It is the same as a person going to a bank to obtain a loan. The bank wants to know the assets, the future potential and the level of security one can provide. The first thing in making a comparison between the situations in the United States and in Canada is that statistically the level of savings, as a percentage of the nominal gross national product in Canada, is today, and always has been, much higher than in the United States. Total savings in Canada today run far above those in the United States. For 1983 it is projected at 20.1 per cent in Canada and at 12.5 per cent in the United States.
Next it is a question of assets. Thank God we are fortunate enough to live in a country with incredible natural resources. Our natural resources are the assets which we have at the bank. We have natural resources which are the envy of the world. We are not a Bangladesh. We are not a poor country without resources. We are a country that is rich in natural resources. We are a country that is rich in human resources because we have a well educated and trained work force. Thanks to medicare, we have a fine health system in our country which is the best in the world. When Canada goes to the bank to borrow money it does so on the basis of being able

July 20, 1982
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to provide a good credit rating. That credit rating is not based just on the per capita comparison which the Right Hon. Leader of the Opposition made. 1 think he knows better than that, but sometimes when we are in opposition we attempt to put the best face we can on the case we have to make.


Mr. Baker (Nepean-Carleton):: You will soon experience that.


Gerald Augustine Regan: Occasionally, even those in governments may do that. However, I firmly believe that we have a very sound case on these matters which we are comparing today.
1 think it is unfortunate not to be frank about that case. If being fair is a problem in a recession, if establishing confidence is part of the future prosperity in our country, a future which I know hon. members opposite want our citizens to have as much as we do, let us then put the real facts forward to show that the size of this deficit is not something for Canadians to worry about when one considers the depth of the recession, and that it is not a case of increased government spending but almost entirely a case of reduce revenue of a temporary nature, when considering what is happening in relation to deficits of other countries and considering as well the level of savings.
In our present situation it is not necessary to make the kind of cuts that the Leader of the Opposition would have us make. Yes, we do need to find areas of restraint and areas where we can become more efficient. We must strive for this goal harder than we have in the past. We do not need to ride out the recession on the backs of the poor.
1 compared our situation to that in other countries. We should also make a comparison with the provinces of Canada. Is it only at the federal level that the amount of money governments spend is increasing year by year? Unfortunately, both within Canada and internationally it has been a situation where the cost of governments meeting their statutory responsibility to provide public services has been increasing. Over the past 20 years-beyond the Diefenbaker days-every group that has been in opposition has pointed to the vast changes which have occurred in the level of a budget in the previous three or four years. Not only have budgets constantly gone up-largely due to inflation-for federal governments but they have for governments in all parts of the country, whatever their political complexion, as well as internationally. The Financial Times of July 5 indicates that provincial expenditures for 1982-83 will be up at least 14.1 per cent across the country and for some it will be a great deal more than that. I suggest that at the end of the year, judging from the deficits the provinces are running, it will be more than that. Many of these provinces are running substantial deficits and simply saying that Ottawa should give them more money.
1 think that one of the most serious problems and one of the greatest areas of malaise in our country is the ability of the provincial governments to blame Ottawa for their own shortcomings. 1 am not just talking about blaming this government,
which happens to be a Liberal government. The provinces did it in the days of Mr. Diefenbaker, they did it in Mr. Pearson's day and the provinces are blaming Ottawa today. This shifting of blame to the federal government for things that are provincial problems would continue even if the Conservatives came to government or the NDP came to government. After the honeymoon period they would blame Ottawa because it is a safe distance away.
1 want to say that I think the provinces must practise restraint in the same manner as the federal government must practise restraint during these times. In order to make my point about growing budgets, I would like to use my own province of Nova Scotia as an example. When I ceased to be Premier of Nova Scotia in 1978, our total budget was $1,650 million. I remember that in the years preceding that the then leader of the opposition and present Premier of that province, Mr. Buchanan, continually railed about the growth of expenditures, as every opposition does. Yet today, three and one-half years later, their budget is now $2,709 million as compared to the $1,650 million. That is an increase in compounded annual growth rate of 13.2 per cent. In that little province their deficit is $387 million. This year they will receive $590 million in equalization from the Government of Canada, which is $85 million more than last year. But they scream that their problems are caused by Ottawa. They get away with this because most of the people accept it.
This applies to other provinces as well because of Ottawa's distance. I said that Nova Scotia had a $387 million deficit. I want to tell hon. members of the House speaking on this subject today that when 1 defend the necessity and safeness of a deficit at the federal level in the present situation, 1 do not do so from the background of having supported deficit financing. It is a matter of record that the government I led in Nova Scotia from 1970 to 1978 had a balanced budget on current account and funded sinking fund arrangements for capital borrowings in each and every one of those eight years. Since 1978, however, there has not been one balanced budget in Nova Scotia and as a result Nova Scotia had its credit rating cut back last week due to the Tory government.


Walter David Baker: You should be Minister of Finance.


Gerald Augustine Regan: 1 believe that provinces, not having the monetary and fiscal tools available to a national government, should strive to balance their budgets except in extraordinary circumstances. 1 might point out that it is always easy to take that path of deficit financing. Indeed, I would like to think that if I had done that in Nova Scotia, against my best judgment, instead of being faced with the huge power rate increases in one year, I might still be in government there. But I am sure that the hon. member oppoisite would have missed me in that circumstance.


Walter David Baker: Dreadfully.


Gerald Augustine Regan: At the national level we should move toward balance, but not in a recession and not at the expense of vital
July 20, 1982

programs. We must practise restraint and not make inflationary demands. Of course, that is what the restraint program is all about. The civil servants of this country, along with Members of Parliament and cabinet ministers, have been asked to lead the way in restraint for this country by restricting their increases to 6 per cent and 5 per cent over a two-year period. 1 believe that the contribution being asked of public servants should be recognized because they are being asked to make a very important contribution. 1 believe that is part of the responsibility of working with the government. There are certain securities and advantages that go with working with government, but 1 also believe by the same token that there are certain responsibilities.
If we can make this restraint program work, then everyone will benefit from it. It will work if all Canadians recognize the importance of restraint and try to ensure that no one group fails to sacrifice or attempts to take special advantage. If we could establish the attitude in Canada that it is unpatriotic for an individual or a group to take more than their share. I think we would be doing Canada a great service.
1 sometimes think we are too partisan in Canada. In constantly knocking one another we end up knocking and hurting the greatest country on earth. It would be better if we could reserve our divisiveness for election time and let the voice of faction be more hushed when, as at present, it is important to the country that we all pull together to fight inflation. I know that all hon. members of the House, regardless of their party, are here with the intention of helping the country.
This debate has demonstrated different points of view. Last night there was a very good speech by the hon. member for Yorkton-Melville (Mr. Nystrom). I thought it unfortunate that the hon. member for Simcoe South (Mr. Stewart), in expressing his philosophy, had to add the old poison pen trash which has been circulated by the ultra right-wing for 15 years. Nevertheless, their speeches were interesting. They were a contrast, yet one could see a belief and certain virtues in both their positions. The hon. member for Simcoe South strongly said: "I do not want more government." We can have the feeling that government is sometimes too interventionist and that we wished things could be more simple. But having felt something in both of their positions, is perhaps why we Liberals are considered to be in the middle, in between, or having the virtues of both without the evils of either, if that is possible.


Walter David Baker: You are in the middle of the road.


Gerald Augustine Regan: People are very easily marked down as being either right-wing or left-wing. However, I have found that most politicians have right-wing views on certain subjects and left-wing views on others. It reminds me of the time my young son heard a political discussion at home and came to me and asked; "Dad, how can anyone be very right-wing?" He was
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thinking in hockey terms. He asked; "Are you not either right-wing, centre or defence?"


Michael Holcombe Wilson: Gerry is a rover.


Gerald Augustine Regan: But I suppose we so quickly say that one is very right-wing or very left-wing without recognizing that one may have very different views on different subjects. I believe, as do most Liberals, that a pragmatic approach best serves the interests of our country. 1 find that economic circumstances force socialist France to follow similar policies to right-wing England in many ways, and that that comparison could also be made with many provinces across this country. By the same token, every government, Liberal, Tory, NDP and Social Credit, has experienced the same growth in the costs of meeting their responsibilities of public office. They all yell when in opposition and they are unable realistically to prevent an increase, year by year, in the level of budgets when they are in office. That, of course, is something that the hon. member for Etobicoke Centre should keep in mind.
We all need to work together to find ways to police waste. I think the opposition has an important role to play. I appreciate it every time an example of waste that occurs somewhere in the government is brought to the attention of ministers, because that not only helps to spot where improvements can be made, but also helps to keep the ministers on their toes. The consultation process that is going on with labour and business in this country under the auspices of the Minister of Finance is very important. I hope that it becomes a very permanent part of our system. There are many other things we can do to improve the government and I hope that all efforts will be made in that direction.
While we deal with this bill and other important legislation, such as the restraint legislation which has gone to committee, the official opposition appears to be carrying op on the basis of a platooned vacation. There are too many cases of opposition members coming here, making one speech and then disappearing for two weeks.


Walter David Baker: Name them.


Gerald Augustine Regan: I could. 1 will tell the hon. member opposite that he is certainly not one of them.


Walter David Baker: Oh, thank you!


Gerald Augustine Regan: Mind you, he is not far from his constituency, either. There were only 55 hon. members of the official opposition here for the budget vote.


Some hon. Members:: Name them!


Gerald Augustine Regan: That was not a good show. Today there were 57 here during the height of the question period, which is not too good.


Walter David Baker: They were in committee.


Gerald Augustine Regan: When they are here they have the same highly paid assistants and air conditioned offices as those government
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members, to which the Right Hon. Leader of the Opposition was referring yesterday. It must be remembered by hon. members opposite, when considering ways to cut, that tremendous facilities are also provided to the opposition, and that should also be carefully taken into account when considering the question as to how restraint can be applied.
I have used a considerable amount of the time of the House.
I want to say that I believe 1 have used it to greater advantage than the hon. member who just preceded me. I want to stress that what we have in the size of this deficit and in the need for borrowing authority is the automatic stabilizer system that the Minister of Finance spoke about in his budget. It is working as it should. When there is a recession, more spending should take place to alleviate hardship. Increased amounts reflect the downturn in the economy, not a relative increase in government expenditures.
The hard question for those who oppose the bill concerns what services should be abandoned. That question has not been answered.


Michael Holcombe Wilson: That is not the point.


Gerald Augustine Regan: They have not said where the cuts of the magnitude about which the Leader of the Opposition spoke can be achieved. The position of the government is that we ought to maintain services to people who need those services and carry on a restraint program aimed at lowering inflation and thus helping all Canadians. I hope that all hon. members will support the bill.


Walter David Baker: Mr. Speaker, it is a great pleasure to follow the Secretary of State (Mr. Regan) in this debate. As I listened to him extol the virtues of his administration in Nova Scotia, virtues which eventually drove him into federal politics, I was wondering whether or not he was preaching a call to become the minister of finance of the country when he told us that he was remembering the financial position of the government of Nova Scotia when he was Premier. That concerns me because from time to time 1 hear that they are about to shuffle the deckchairs on the deck of the Titanic. There will be a cabinet shuffle at some period and adding to the speculation, perhaps we will see the name of the Secretary of State on the list.
If in his speech the minister was arguing-and he was coming awfully close to it-that it is impossible to find areas in which legitimate cuts could be made, or an overview of spending could be undertaken, then I would beg to differ with him because there are decisions which have to be made by governments from time to time, some of them wise and some of them unwise; but they are there. That is one side of the equation.
I go back to the argument that he raised with respect to the necessity for revenue, which is a justification for this bill, the need for money. I put it to him and to the House, through Your Honour, that one of the problems which has caused us to suffer is that for over two years we have faced general government economic policies, augmented certainly by conditions elsewhere, but policies of the government which have succeeded immeasurably, beyond the wildest dreams of even enemies
of the country, in driving investment out of Canada, in discouraging investment, in encouraging people not to invest or to build or to grow.
It is no accident that the unfortunate statistics in the rise of unemployment insurance payments go on and on and add to the fiscal burden. Government policies have caused that. Of course, there are areas in which a prudent government would not venture to begin with, let alone maintain itself in that position. Those decisions are pretty difficult ones but some of them could be made. I will give the minister an example of one which could be taken right now. It will save millions and millions of dollars of public money that would unnecessarily be committed to a program that, in terms of the efficiency of the delivery of services of the particular department, could mean great savings, if one could measure efficiency in the public sector. I have in mind the announcement made July 13, 1982, of the decentralization of the incomes security program by the Minister of National Health and Welfare (Miss Begin).
It is very interesting to note that in the decentralization program is the move of the existing large incomes security Ontario regional office located in Toronto to four places, Peterborough, Chatham and Timmins, with one part remaining in Toronto. Also the Canada Pension Plan operation for the processing of Ontario benefits will be dispersed from the national capital area to those same four regional offices, including Toronto. Also, the incomes security regional office for Nova Scotia, which is in Halifax, is going to be relocated to Sydney, Nova Scotia.
It is interesting that when that announcement is made there is no corresponding statement about what it is going to cost. I wager I am low when I suggest that that move involving moving expenses of families, the acquisition of land, the development of buildings and equipment, the purchase of equipment, etc, etc, ad nauseam, will cost $75 million. If it does not, I will apologize to this House. There is one suggestion.
When we were in office, we looked at the decentralization program. The hon. member says I am interested in it. Of course I am. I have always said that if it is rational to have bits and pieces of departments and agencies in the regions, that is an excuse for a regional development program. When I was minister of national revenue, in only one case did I not recommend against the decentralization program of a department, because it made sense to bring the components of that department out into the country. However, there were 19 others we looked at which we stopped. It would have involved millions and millions in government expenditures. Some finality had to be given. There was a demand upon the public purse which was not as great as it is today.
That the government should continue that program in the face of a $20 billion deficit borders on the immoral. If the minister wants to know where to begin a tremendous savings programs, that is the place. He asked for a beginning. There is
July 20, 1982

one. It could save the country a great deal of money, not just in raw dollars but in terms of loss of efficiency.
Members of Parliament should ask their colleagues in cabinet to show them the cabinet documents that exist with respect to the advice from the public service as to the inefficacy in terms of administration and delivery of services as well by the decentralization program. If my friends opposite, on seeing those documents, believe that is the way to spend our money, I would suggest that their judgment is pretty far gone. My suggestion to the government is to stop that silliness. There are other priorities in the country that are much more important and there could be savings of a tremendous amount of public money.
There is a second area I want the government to look at. It is important that we look at some of the decisions made by certain agencies. 1 hope that members opposite understand the tremendous losses of CMHC and thereby the public of Canada with respect to some projects. I invite my friends opposite to look at this one. CMHC lost over $100 million on the 1981 property sales it made. It had a sizeable inventory of housing units acquired as a result of defaults and abandonments. It sold off a significant amount of property at far below the market value. As I said, the losses for 1980 are estimated at $100 million. The principal beneficiaries of those sales have not been the taxpayers of Canada. They have been the developers and housing speculators. I will give two examples.
In September, 1980, 1,130 CMHC housing units in the Outaouais area of west Quebec, valued at $45,000 per unit, were sold to a group of businessmen for $7,079 per unit. Consider whether it might have been more prudent to have kept those on inventory.
In early 1981, Steveston Enterprises of Vancouver paid $18,500 per unit for 42 London, Ontario townhouses with market values of $23,300 to $59,000. They paid $14,700 per unit for 50 Oshawa, Ontario, townhouses valued at $30,000 to $33,000 per unit. The average loss on the sale in London, Ontario, was $20,000 per unit. The average loss on the sale in Oshawa was $25,000 per unit. Think of it. CMHC did not have to sell those properties. However, as a result of making that so-called business decision there was that loss not only of the units into the hands of speculators but loss to the taxpayers of Canada. Somewhere in the $20 billion deficit must be shown those figures. I could go on. Some of the things that have happened are almost unbelievable.
Can you imagine the Canadian National Railways spending $64,244 to purchase advertising space to wish its competitor, CPR, a happy birthday? Can you imagine that kind of expenditure by a Crown corporation, a public agency? Can you imagine paying two chefs $110,000 in 1981 for cooking lessons? Bruno Gerussi and Madame Benoit were given six-week television contracts worth $110,000 to promote metric cooking.
I want members to imagine the thinking which goes into that kind of a decision. Just imagine it. Then we in this House are asked to approve of a bill authorizing the borrowing of an amount which the minister admits is far more than he needs. It
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is no wonder that the Leader of the Opposition (Mr. Clark) moved the following amendment in the House yesterday:
-this House holds the opinion that the granting of an authority for the borrowing of a sum greater than that amount which is required to meet the government's needs to the end of the current fiscal year is objectionable in principle and this House therefore declines to give second reading to Bill C-125, An Act to provide supplementary borrowing authority.
What is implicit in that amendment by the Leader of the Opposition is whether this government, which has demonstrated year after year its failure internally to put some harness on expenses and on the letting of public contracts and to provide some judgment with respect to that matter, which is apparent to the Canadian public, ought to be trusted with more money than it absolutely needs.
The Secretary of State discussed what a banker would ask a person wishing to borrow money from his bank. A banker asks what assets a person has. Certainly the firm called Canada is rich in assets; no one will argue about that. That is in every high school essay that was ever written. It is also in every ministerial speech ever given. The banker would ask about the future potential prospects of the business enterprise called Canada. I would like to believe what Sir Wilfrid Laurier said. I have not seen much of it in the latter part of the twentieth century, but he said that the twentieth century belongs to Canada.
Most Canadians are beginning to think that the twentieth century belongs to our creditors, and that is one of the problems, but I would like to believe that in the long term there is a future because the people of Canada always have the ability to change the government. Then the banker would ask about security. No one would argue that Canada cannot provide security, but there is not a member of the House of Commons who does not know of a business which has had great assets, great potential and a great level of security but which, as a result of poor management, poor policies and bad investments, has gone down the drain.
The minister did not mention one other question that banker would ask the person coming in and looking for a line of credit: What about one's attitude? What is the attitude of the business enterprise called Canada and its board of directors toward proper management? I have some documents about bad management, and I have seen others, which would make the hair of the hon. member from Middlesex turn greyer than it is. I have mentioned some examples of bad management.
We are in a period of restraint which is so bad that the government is attacking the pensions of ordinary senior citizens and reducing indexation by 6 per cent. It is so bad that the government is going to breach the contract it made with federal public servants with respect to recognizing increases in the cost of living. In this situation can hon. members imagine that an agency of the government, the National Capital Commission, in November of 1981 decided to change the colour of its trucks from green, black and white to brown and beige-a matter of tremendous public importance!-at a cost of $1.4 million?

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1 am hearing from the senior citizens who were attacked by the budget of the Minister of Finance (Mr. MacEachen). They now feel a sense of insecurity because increases in their incomes are being limited to 6 per cent. They are asking who is trying to kid whom. What those people are paying for-and they know it-is year upon year of inefficiency and year upon year of wrongheadedness. They are now paying the piper for the tune called a long time ago, which was wrong. These people will remember. They remembered the "six-buck boys" when Walter Harris was minister of finance. That is all he could give for old age security. Pensioners today will remember the "six per cent boys and girls" when the next election is called, because this government has removed from the senior citizens of this country that sense of security which was very important to them and which, by the way, was one of the bottom lines of the great humanists in the Liberal Party of Canada.
There are other victims of the foolishness of the government, which asks other people to pay the price of its stupidity. The government asks this of people who are not protected and who no longer are in the work force. I want to put their case here today in the context of a bill in which this government asks for more money than it needs to finance the foolishness of the past. That is exactly what this bill requires. I think it is absolutely wrong, in the context of the waste and extravagance which has gone on, for the Minister of Finance to announce on budget night that the government will finally breach an agreement made many years ago with the federal public service of Canada. That agreement was with respect to the pensions of public servants. By agreement over a long period of time, those pensions were to reflect the cost of living. Public servants made contributions in relation to that agreement. The federal government also made contributions over the years pursuant to that contract.
I think what is happening now is wrong, and I want members of this House of Commons to consider what is happening. I refer particularly to members who represent public servants, including the Secretary of State. I refer also to members from the National Capital Commission area on both sides of the Ottawa River who represent public servants. I hope they are successful in ensuring that the bill-it has to be a bill-never sees the light of day, because it is wrong.
1 want to put some things on the record because I want members of this House to understand how wrong it is. Not only are retired public servants to be subject to the reduced indexing of their old age security payments and of their income tax exemptions; they are, if the budget proposal is not withdrawn, to have payments out of the several superannuation accounts to which they and the government as their employer have contributed treated as though they were subject to appropriation at the whim of the government rather than administered in accordance with the terms established by Parliament and communicated to public servants before they retired. All of the government's indexing proposals, with the sole exception of the indexing of public service pensions, relate to the government's budgetary revenue and expenditure accounts. The limitation on the indexing of public servants'
pensions, however, is the only proposal which will affect a trust or pension account held by the government for the benefit of a specified group of citizens. That was money committed by public servants through deductions for that indexing provision and money committed by the government, impressed with a trust. That is the way that should be regarded.
The understanding which retired public servants have of their pension entitlements in so far as indexing is concerned is summed up in a booklet from the Treasury Board entitled "Your Superannuation Plan, 1974 Edition," and I will quote from that as follows:
There is no means test and all in receipt of pensions, whether former employees or their widows and dependants, benefit from the Supplementary Retirement Benefits Act's provisions. In any year where there is an increase in the cost of living, pensions will be increased in an amount directly related to the increase in the Consumer Price Index, without limit. The percentage increase payable each January represents the increase of the average of the Consumer Price Index for the twelve-month period ending on the preceding September over that for the twelve-month period of the previous year.
The President of the Treasury Board (Mr. Johnston) put it even more simply about a year ago when he said that the federal government remained dedicated to the principle that public service pensions are to be protected from inflation. But there goes the commitment of the government, blasted away by the budget of June 28.
On the basis of guarantees made over the years, pensioners planned their retirement and entered into all the commitments associated therewith. We believe that they had every reason to count that their expectations would be met. Even in the depression the government of the Right Hon. R. B. Bennett, while reducing salaries of public servants by 10 per cent and withholding all annual increases, held the existing pension arrangements in respect of retired employees inviolate.
Those who would cheer this proposal of the government ought to remember that it has been recognized for years that pension rights accumulated during the period of employment form part of the total compensation package earned by the employee. Time and time again the President of the Treasury Board has said that this is deferred wages, that it is earned income. Now, because it is short of funds, the government decides to breach an agreement.
I have talked to people who were involved in the early days of the negotiations and asked them what the attitude was at that time. Mr. Leslie Barnes, during the time he was President of PIPS and afterwards when he was executive director, was present during the negotiations when Arnold Heeney was involved in the public service. At that time the Public Service Employment Act was being amended. The staff associations wanted pensions to be a bargainable issue but Mr. Heeney, quite properly, pointed out that was a difficult thing to do because it was difficult to bargain certain things that were fixed by statute. A consensus was arrived at.
A gentleman's agreement was reached to the effect that, while pensions as such would not be bargainable, the right to
July 20, 1982

them would be enshrined. That meant that any amendment to a pension scheme would be done by mutual consent, not unilaterally. This recent action was a unilateral move on the part of the government. Some people think that this is not such a terrible thing, that the public service will go to a 6 per cent pay increase and, as pensions reflect income, they will be increased as well. Any one who has thought about the matter knows that any amount lost to a public servant as a result of a change in indexing is lost forever. It will never be recovered. The contribution is really the premium for an insurance scheme. If inflation came down to zero and there was no indexing of pensions, the 1 per cent contribution of the public servant would continue to be paid and the 1 per cent contributed by the government would continue to be paid. The public servant would receive no benefit, yet his contribution would continue.
The government must think about what it intended. Unlike members of the active work force, pensioners have no way of recovering this loss in the future. They cannot bargain, so they must look to Parliament. They can look to the government, with despair, but they must look to Parliament to be fair and reasonable and keep agreements that have been made.
The typical public servant who retired on pension in the last financial year, after about 25 years' service, received a pension of about $8,000 per annum. If the government's proposals are implemented, that will reduce the real value of such a pension to about $7,200 for the rest of the pensioner's life. One third of all those who retired during the same period on pensions of $5,500 or less will suffer a permanent 10 per cent cut while the surviving spouse's meagre pension of about $2,000 will shrink in real terms to $1,800.
More than money is involved, Mr. Speaker; there is a question of morality. I suppose the government has a legal right to act fraudulently. Some people say that Parliament can turn a woman into a man and a man into a woman if it is necessary; if it cannot do that, it can come close to it. Parliament can do all kinds of things, some that are legal but also some that are immoral.
I believe this will be an immoral act, Mr. Speaker. I believe also that this particular aspect should be fought for what it is-a fraud on the thousands and thousands of people in the Public Service of Canada who made a contribution for that extra benefit, in good faith.
The President of the Treasury Board told me in the House and at the miscellaneous estimates committee that the government was going to deal with this question in the total consideration of pensions and that it did not intend to deal with it in isolation. Now it has dealt with it in isolation, Mr. Speaker. There is no way that any right thinking member of this House can support this kind of double dealing, shot in the dark, stab in the back approach to the employees of the government.
The people who are now asking serving public servants to accept a decrease in their income of 6 and 5 per cent know that they are to be involved in a two-year program. The government said so, if it can be believed. People are suspicious about other things but they know that. They also know that they belong to bargaining units which can bargain at the appropriate time. I
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believe that it is important that the government and its supporters consider the difference between its serving public servants and those who are retired.
The calls that I have received were not with respect to the 6 and 5 per cent, Mr. Speaker. People are not happy with that any more than I am happy with Bill C-124, but there is a latent anger in the public service about the pension system to which they have contributed and about which a solemn undertaking was given by the government of the day and repeated by successive governments. Public servants and their families know that throughout the years an abatement was reflected in salary negotiations because of a contribution made to the total compensation package paid to public servants, including the pension.
I ask the government to reconsider its position because I think this is important. If it needs any help I can supply it. I have here a letter from the wife of a retired public servant who lives on Evergreen Drive in the city of Nepean. This is what she writes to the Minister of Finance (Mr. MacEachen):
I was shocked to hear in your Budget speech on Monday evening that you are putting a ceiling on indexing the public servants' superannuation for two years.
I feel that this action would be a serious breach of contract with public service pensioners. Indexing pensions to inflation has already been paid for jointly by the employee and employer, by mutual agreement. To use these funds for other purposes would be dishonest in the extreme.
I trust that you will reconsider this proposal.
Another retired public servant from Richmond, Ontario wrote to the Minister of Finance, and this is what he said:
The general reason is that this government for the past several years has ignored economic issues, with the sole exception of the NEP, and is now up to its eyes in debt. Instead it has sloganeered on national unity, Constitution, bills of rights, Quebec separation etc. It hoped that the U.S. would recover from its recession and bring Canada up with it. Tough luck for us that it has not.
The specific reason pensioners are to be penalized is because they are as a group weak, inarticulate and not politically active. They tend to be loyal and maybe a little old fashioned, and are now being punished for being so. Their votes can be bought just before the next election by raising the index a little. And they will be grateful.
The letter concludes this way:
Further, pensioners do not have a Chamber of Commerce, a John Bulloch or a professional association to speak for them. It is significant that the only pensioners who have not been caused to take a pension loss are the veterans, who have the Canadian Legion to defend their interest.
Referring to the Minister of Finance it says:
You know as well as I that inflation will be closer to 20 per cent than 6 per cent in the next year. Meanwhile, pensioners will still have to pay proportionately more of their income to dentists ($68 for a '/: hour) and extra billing surgeons ($220 for a % hour) than the general population, in addition to basic necessities. And that on a lower income and higher taxes.
In conclusion, referring to the hon. member for Bow River (Mr. Taylor), he says:
Mr. Taylor was correct when he said the government's actions were "legally right but not morally right".
I ask every member of the House to consider that particular position. Mr. Speaker, members ask where we can save money. Everyone knows where we can save money. The work of the
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July 20, 1982
Supplementary Borrowing Authority
committee dealing with parliamentary reform is to provide within this Parliament ways in which members can appropriately scrutinize government programs. It is not there to tear out the guts of programs necessary for the people of Canada, but surely there is no one in the House, given the litany I just began to recite, because it goes on for page after page of examples of foolishness, stupidity and extravagance, who could ever trust this government with the extra money over and above what the Minister of State for Finance (Mr. Bussieres) says is needed. Therefore, I support the motion of the right hon. Leader of the Opposition (Mr. Clark). I do not believe any right thinking member of this House could do anything but say to this government: get your own act together, look after your own people properly, and do not blame your foolishness on others. Do not ask of Canadians that which you do not need, and do not do to Canadians what you promised you would not do.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Blaker):: It is my duty pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Surrey-White Rock-North Delta (Mr. Friesen)-Emergency Measures-Query respecting Crown prerogative, (b) Powers of Prime Minister; the hon. member for Bow River (Mr. Taylor)-National Parks-Banff- Proposed increase in land rents, (b) Rents charged to park employees; the hon. member for Kindersley-Lloydminster (Mr. McKnight)-Canada Post Corporation-Number of provinces served, (b) Provision of one-day service.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Bussieres that Bill C-125, An Act to provide supplementary borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic
Affairs.
Nelson Andrew Riis: Mr. Speaker, I am pleased to have the opportunity to rise today to participate in the debate on Bill C-125, the supplementary borrowing authority, 1982-83, with which once again the government has to come before Parliament-this time rather unexpectedly-to
ask for authority to borrow such a vast amount of money to see us through the remainder of this particular fiscal year and well into the next. I have had the opportunity to participate in a number of these debates in this, the Thirty-second Parliament, and I remember that in its first borrowing authority bill the government asked permission to borrow $12 billion. A number of months later a second request to borrow $14 billion came along, and then just a few weeks ago the government again came to Parliament feeling that it needed $6.6 billion. That request received Royal Assent on June 17, 1982, and four weeks later the government is back asking permission to borrow $11 billion to see us through the remainder of the year. In one session, so far, the government has asked to borrow $43.6 billion. What has been the result? Presumably that money has resulted in a variety of government programs serving the people of Canada well, providing opportunities for Canadians to be productive, and meet their obligations to their friends, families and the economy generally. However, when we review the facts, we find that quite a different picture emerges.
I do not have to remind members of the House that today we are experiencing in Canada an unemployment situation which has not been duplicated since the hungry thirties. Nearly two million Canadians find themselves in a state of forced idleness. People who normally have led productive lives and contributed to the development of the Canadian economy all their lives, now find themselves for the first time in a situation where they are no longer able to provide as they would like for themselves, their families and their country. We are experiencing a situation in which the Auditor General himself, Kenneth Dye, is quoted as saying, "The country is close to being on its economic knees." That is the Auditor General of Canada, a man responsible for overseeing the fiscal affairs of government and a man who presumably has to inform Canadians as to how well the government is doing. This man, who is in a very serious position and knows full well that his words are going to be considered very seriously by every Canadian, says that the country is close to being on its economic knees. The former auditor general, Mr. James Mac-donell, made a similar comment recently when he said, "We are going down the bloody drain if we don't do something about it." He actually said that, the former auditor general of this country, that we are going down the bloody drain. I suppose that means one thing to one person and something quite different to another. Being "on its economic knees" might be interpreted in different ways by different people, but one thing that everyone agrees on is that our economy is in an economic crisis. It would not be difficult to add that it is in a social crisis as well.
Earlier today one of my colleagues raised in the House the matter of a social phenomenon which is taking on unprecedented dimensions, that of violence to women in our society.
July 20, 1982

While one might have difficulty in making the direct connection between that and our economic crisis, one would have no difficulty in recognizing some relationship between those two phenomena. Of course, we could add to that the rising incidence of child abuse, wife battering, drug and alcohol abuse, and a long litany of other social problems which indeed have a very direct relationship to our economic recession, or depression as more and more people are calling it.
The $43.6 billion which the government has asked this Parliament to provide for its economic mismanagement has resulted not only in two million people being unemployed or in a state of forced idleness but also in the economy being generally on the ropes. It has resulted also in such things as a 60 per cent increase in farm bankruptcies in the first six months of this year compared to the first six months of last year, and last year was bad enough.
Mir. Miller: Last year was terrible.


Nelson Andrew Riis: Last year was terrible, as my colleague has just indicated. Last year was a very bad year for those in the food producing industries. Business bankruptcies generally are up 37 per cent in the first six months of 1982 compared with the same period in 1981. That is only the tip of the iceberg, Mr. Speaker. When we speak of business bankruptcies, we do not mention the receivership proceedings that are in place. It is estimated that between three and five times the number of bankruptcies occur in the receivership form. Of course, that does not touch those thousands of small businesses and medium-sized businesses that are simply closing their doors nor their owners who are walking away from their hopes and their dreams. By the end of this year, I suspect that if the figures could be obtained, we would find that in excess of 20,000 businesses have folded as a result of the economic crisis which this government has perpetuated. Indeed, I think we have to recognize that there is an unholy alliance between the Progressive Conservative and the Liberal parties of Canada. When one considers that we are dealing with the federal government, one must note that we are also dealing with the mismanagement that has happened in a variety of provincial jurisdictions. It is not surprising that those provincial jurisdictions are almost exclusively Tory in terms of their leadership.
The situation with respect to the economic capacity of this country at the moment is very serious. We have a 69 per cent operating capacity in our manufacturing productive sector, which is resulting in shutdowns, cutbacks, freezes, lay-offs, threats of lay-off and threats of closure. When you walk through the shops of Canada, you find they are largely empty. People do not have the purchasing power that they had. Those who are fortunate to have jobs today or those who have a few dollars in their savings account are not going to risk spending that money with the uncertainty that prevails across this fine land today. With no one buying goods or services, the government came in with a new budget in June saying, "We have an answer. The reason our factories are not at full capacity and our shops are not producing as they should is that people are not buying the goods and services as they did in the past." The
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government told us it had the answer. The government said, "We are going to raise taxes across the board." But that measure will take more of the purchasing power out of the hands of Canadians. The government said, "Listen, we want to focus in on certain groups. The senior citizens are a good group. Let us reduce the benefits going to senior citizens. That will help the economy surely." Then the government looked at increasing energy costs. The government's increasing the costs of energy will improve the situation. The government said, "We will jack up the energy costs this year by 20 per cent and by 31 per cent next year." The government said that it will keep interest rates high so that no one will be encouraged to expand his plant, factory, shop or build a home.


James Ross Fulton: Eighteen cents a gallon turned out to be a buck.


Nelson Andrew Riis: Those are the kinds of solutions, if you can believe it, Mr. Speaker, that this government has brought to Canadians, saying, "Here is the way to get out of our economic recession or the beginning of a serious depression." What a way, raising taxes, hitting senior citizens, jacking up interest rates and energy costs. That logic escapes me.


Mr. Deans:: That logic is illogical.


Nelson Andrew Riis: As my colleague, the hon. member for Hamilton Mountain suggests, rather than logic there is a certain amount of illogic involved in the suggestion that this is the way to get us out of our economic malaise.
It is the human suffering, the human tragedy, the pessimism, the gloom and doom, and the down and out syndrome that prevails now in all parts of Canada as a result of improper policies having been introduced by this government in difficult times. That is the real price this country is paying today. People have lost faith and they have lost trust in this government.
Let us look at a few facts, Mr. Speaker. Often when government members stand up in their places and present us with the picture as they see it, it is easy to manufacture facts. It is easy to manufacture statistics or slant statistics in a certain way or to create a certain impression by leaving out certain numbers in a statistical review. Let us be very straightforward and let us keep the numbers to a minimum.
Let us review what has happened in the last little while. Canada's accumulated debt is now over $108 billion. That, in more personal terms, is $4,400 for every man, woman and child in the country, or over $10,000 for every person who is lucky enough to be employed in this country today. That debt will cost Canadians $17.7 billion to service this year. That is over 25 per cent of the projected revenues for this year, from 22 per cent last year and from 19 per cent the year before. Thirty years ago it was only 9.7 per cent. This government is putting us further and further into an economic mess.
The government's expenses rose by $400 million due to increases in the cost of UIC alone. However, the burden on taxpayers is much greater. Premiums on employees and employers account for 80 per cent of UIC financing. With

July 20, 1982
Supplementary Borrowing Authority
high unemployment UIC will accumulate a deficit of at least $2.2 billion this year. This means premiums for UIC will have to be raised this fall between 50 per cent and 100 per cent. That is the kind of program which this government appears to be interested in perpetuating, that of a deficit and, of all things, in the unemployment insurance fund.
One could go on and on. Projects for income from corporate taxes have fallen from $2.75 billion in the November to June period. The revenue expected from federal sales taxes has fallen $820 million in the last seven months because the economy has slowed down to such an extent. What makes matters worse is that the imaginative program of the 6 per cent world, to which the Minister of Finance (Mr. MacEachen) refers repeatedly and the fact that he feels the solution to our problems is to restrict wages and salaries to federal employees, will take $500 million per year out of the economy of the national capital alone. What does that say to the small business people in the national capital of Canada, that $900 million will be taken out annually from their pockets as a result of this decision of the government?
Quite simply, with so many people out of work and so many businesses failing, tax revenue obviously will not be as high as was expected even six months ago. There will be $595 million less in personal income taxes coming in for 1982-1983 than was projected back in November. This will be in spite of the fact that personal taxes will be increased by $160 million in 1982 because of the deindexation provision introduced in the last budget.
In seven months the projected revenues for 1982-1983 fell $6.4 billion while expenditures increased $2.6 billion. That is the kind of tragic situation in which Canadians find themselves today.
May l call it six o'clock and return after the dinner hour, Mr. Speaker?


The Acting Speaker (Mr. Blaker):: It being six o'clock, I do now leave the chair until 8 p.m.
At 5.59 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Mr. Deputy Speaker:: When the House rose at six o'clock, the hon. member for Kamloops-Shuswap (Mr. Riis) had the floor.


Nelson Andrew Riis: Mr. Speaker, earlier today a number of members referred to the Minister of Finance as a baseball player, to their experiences in baseball, to the fact that he had been up once and struck out, up twice and struck out, up three times and should be out of the ball game, and so on. Upon reflection, although I played ball in my youth, I think a more appropriate game would be hockey. I remember watching a hockey game last winter. I will not mention the teams because what I am
about to describe is something of which I am not particularly proud. Half way through the hockey game, one player who was particularly rambunctious found himself encouraged to jump up into the stands and start beating someone over the head with his hockey stick. It was a fan who had aggravated him. Eventually the player was thrown out of the game. I suspect that that probably describes the Minister of Finance more aptly than a baseball player. He is up today with his hockey stick bashing Canadians over the head and is about to be pulled out of the game, if Canadians had an opportunity to make that decision today via a federal election.
Today we are debating Bill C-125, a bill to give the government the authority to borrow $11 billion. It must be seen in a certain context. When the Thirty-second Parliament first began, the government eventually came to Parliament asking for permission to borrow $12 billion. At that time many difficult questions were asked about how the money would be spent and so on, and hesitantly approval was eventually received. A few months later the government said that it needed another $14 billion to continue on because it was a little short; its revenues were not as much as its spending. The government needed authority to borrow another $14 billion. Then a little later it came before us again and asked permission to borrow $6.6 billion. That $6.6 billion request just received royal assent on June 17. Today, virtually four weeks later, the government has the audacity to come before Parliament and say, "Listen, we have erred in our judgment. Things have not gone quite as we expected. We are not asking for $6.6 billion this time. We are asking for $11 billion". It is asking for $11 billion only four weeks after the last request. If that does not describe a government which is out of control, if that does not support the Auditor General's claim that the economy is on its knees or the previous auditor general's comments that we are going down the tubes, I do not know what does. The government has had to come to Parliament to seek authority to borrow $43.6 billion because of its misjudgment and mismanagement of the economy. It is a sad state of affairs in the wealthiest country in the world.
If positive things had occurred as a result of this borrowing, that would have been one thing. I do not think that we can consider a 60 per cent increase in farm bankruptcies in the first six months of this year as any kind of positive program. I do not think we can consider the 37 per cent increase in business bankruptcies as any kind of positive program. I think we should be ashamed when we learn that plant capacity in the country is operating at 69 per cent of its capacity. That means there is a 30 per cent idleness in the factories of Canada.


James Ross Fulton: It is the same level of idleness as in cabinet.


Nelson Andrew Riis: I think the hon. member for Skeena (Mr. Fulton) is wrong. I think it is a lot higher than that.
In the last number of days we have been presented with a debt which requires servicing of $17.7 billion. That accounts for 25 per cent of all projected revenues of the government. It
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is a clear indication of the sickly financial position of the Government of Canada. Our net debt is up 18 per cent. We must remember that this is a 6 per cent world. Hon. members on the government benches, hour after hour, are saying, "6 per cent, 6 per cent". We notice that the net debt is up 18 per cent and that debt servicing is up to 22 per cent of total federal expenditures. Where is this 6 per cent world? Only when it serves their purposes do we have a 6 per cent world. But that is not the worst of it. We are being asked tonight to authorize the borrowing of $11 billion. We ask hon. members opposite whether they require $11 billion. The chorus ought to be, "No, we do not; $4 billion of that we do not need right now but we would like to have it just in case".


James Ross Fulton: The minister admitted it.


Nelson Andrew Riis: That is right. The minister stood in the House a few hours ago and said that they do not really need $4 billion of the $11 billion at this point but that they would like to have a slush fund or a contingency fund. Can one imagine borrowing $4 billion one does not have to borrow at the interest rates of today? Mr. Speaker, can you imagine what would happen if a small business person, farmer or consumer walked into a bank, credit union, caisse populaire or trust company and said, "I want to borrow some money but I want to add an extra 35 per cent in case I need it some time in the future"? Can you imagine what the financier would say to such a person?


James Ross Fulton: He would probably be a Liberal.


Mr. Fisher:: He would ask whether you could pay for it.


Nelson Andrew Riis: That is right. Hon. members opposite say that they can pay for this. They believe in fairies. They believe in unicorns as well if they think they can repay this. They are here today on bended knee asking to borrow an extra $ 11 billion, four weeks after their last request received royal assent. It is unbelievable. Also we hear them refer to the world economy and that we must compete. They indicate that we exist in the world and that Canada is like every other country.
I should like to refer to a few figures. Of course, inflation is a critical factor in understanding the economy of Canada and its health. Let us compare our inflation rate with the inflation rates of some of our major trading partners. 1 do not want to bore hon. members opposite, but I would like to share with them some facts about our inflation rate and their inflation rates. In the United States of America the inflation rate today is 6.7 per cent; in the United Kingdom it is 9.5 per cent; in West Germany, 5.3 per cent; in Japan, 2.3 per cent; in Switzerland, 5.9 per cent; and in the Netherlands, 6.4 per cent. Do you know what ours is Mr. Speaker? Members opposite were ecstatic today about the fact that our level of inflation moved down to 11.2 per cent on a seasonally adjusted year to year basis. We do not compare ourselves at all with any of our major trading partners. If we wanted, we could now relate that figure to the interest rates in those countries. It is not surprising to find that the lowest interest rates occur in those countries with the lowest rates of inflation. Is that not a coincidence?
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James Ross Fulton: Except for the United States.


Nelson Andrew Riis: As my colleague says, except for the United States which has a monetary policy designed to strangle the life out of the economy and to stop growth. That is the purpose of MacEachenomics as well. He wants to strangle the life and growth out of our economy. He has done this magnificently because there is no life left in the Canadian economy.
The government also says that we cannot have high wages in this country because we must compete with other countries, especially our trading partners. Presumably the assumption is that our wages are much higher. They must be much higher if the government is concerned about reducing them in order to be competitive.
Let us look at the facts. Let us discuss manufacturing wage rates. The manufacturing sector is a critical part of our economy in which labour intensive productivity must be built. How do these figures compare with the countries I have mentioned? For example, the hourly wage rate in Belgian, which is a major trading partner of Canada, is $13.18. In Sweden, the average manufacturing rate per hour is $12.60. It is $12.18 in the Netherlands, and in West Germany it is $11.94. The rate in the United States is $9.92. In France it is $9.46. In Canada it is $9.06. We have a lower hourly manufacturing wage rate than France, the United States, West Germany, the Netherlands, Sweden and all the other countries I mentioned.
Let us examine the increases in those wages. Since 1975 the manufacturing wages in West Germany have increased by 91 per cent. Since 1975 in the United States, the manufacturing wages there have increased by 56 per cent. For the same period in Canada they did not increase 91 per cent or 56 per cent as did the manufacturing wages of our two major trading partners; they increased by 46 per cent. These are the facts which speak for themselves.


Mr. Crosby:: Whose facts are they?


Nelson Andrew Riis: They were put out by Statistics Canada.
When hon. members opposite say that they want wages decreased in order to compete internationally, who is it they want to compete with? Do they want to compete with Taiwan, the Philippines, Brazil or Equador? If that is what they want, then our effective wage rates must be $ 1 an hour in order to be competitive with those countries. Surely the government does not advocate lowering our wage rates so we can compete on an equitable basis with Bangladesh and India. Those facts speak for themselves.
While I do not want to bore the House with too many figures, I would like to set forth another set of statistics. These figures concern the value of the Canadian dollar between June of 1970 and June of 1982. I would compare our dollar with the currencies in a number of other countries. This is a comparison of our dollar over the 12-year period with the currencies of other countries with which we are closely involved. These

July 20, 1982
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figures are based on an indice of 100. In 1975, the United States dollar has increased very slightly. The Japanese yen is up significantly. The German Deutsche mark has risen significantly. The Swiss franc is up significantly. The Dutch guilder is up significantly and the Belgian franc is also up significantly. However, the Canadian dollar has dropped from $1.06 on an index of 100 to 85 cents on that same ratio. There has been a drop in the value of the Canadian dollar relative to these other countries. That is an indication of the health of our economy.


Some hon. Members:: Oh, oh!


Nelson Andrew Riis: There is a lot of yelling from across the way. If I were part of that disastrous group I would be yelling at the statistics also. But they speak for themselves.
I recall that the day after the budget, when presumably the confidence of this country was lifted and the situation improved, was the day the dollar dropped to 76.8 cents U.S. That was the day after the budget. I also remember that the stockmarket plummeted as well. It is a sad day for Canada.
Those members opposite are not the only ones to blame. We must be fair.


James Ross Fulton: Blame the Tories as well.


An hon. Member:: Who put the Liberals in there?


Nelson Andrew Riis: The hon. member in the Progressive Conservative Party beside me asks who put them in there? I must say that we provided the opportunity for the people of Canada to speak. It is a free and democratic country where Canadians have the opportunity to decide whom they want to govern. If we had the opportunity, we would do it tonight as well. The people of Canada decided that they did not want the Conservatives to lead the country, and they thought that the Liberals had the answers. Let us hope there is an opportunity for Canadians to decide once again.


Leonard J. Gustafson: Are you going to support the Liberals this time?


Nelson Andrew Riis: My hon. friend in the Progressive Conservatives asks if we would support the Liberals. I would remind him of the voting record of the House. It is the voting record which counts, not the rhetoric that we hear down there on a continuous basis. How many times have the Progressive Conservatives supported and voted with the government?


James Ross Fulton: Thirty-four times.


Nelson Andrew Riis: They have voted with them 34 times. Let us put that into context. How many times have the New Democrats votes to support this government? Nineteen times, Mr. Speaker. The Conservatives has supported this government 34 times.
Just the other night I recall the debate as to whether we should restrict the wages of public employees and use them as the scapegoat or someone to blame. Who supported the government? The Progressive Conservatives stood up hour after hour to criticize the bill but they voted for it anyway.
It is a sad day, Mr. Speaker, and the people of Canada are sick and tired of the rhetoric they are hearing from the Progressive Conservatives because they know who Tweedledee and Tweedledum really are.
As I said, I do not want to blame the Liberals for all the difficulties facing Canada today. The provinces have to carry some of these responsibilities as well. This is evident when one looks at the budgets of the various provincial governments for which an interesting set of figures emerge. Every provincial government has had a deficit except one. Let us review these figures. The budget deficit for Alberta this past year was $2.5 billion. The deficit in British Columbia was $359 million. In Manitoba it was $334 million. In New Brunswick it was $422 million. In Newfoundland it was $168 million. For Nova Scotia, it was $375 million and in Ontario the deficit was $2.23 billion. In Prince Edward Island the deficit was $33 million. What is interesting about these statistics is that I have virtually described the financial affairs of all the Tory premiers in this country. While every Tory government has had a major deficit, the one province that has not had a deficit for many years-a fact which my Progressive Conservative friends from the prairies will know-is the socialist province of Saskatchewan which has had balanced books year after year. Is it not interesting how that one province alone seems to have the desire to balance its books and the capability of achieving it?


James Ross Fulton: Devine will wreck that.


Nelson Andrew Riis: My colleague says that Premier Devine will wreck that. I was interested to read Mr. Devine's recent statement that, "It looks as though we could be looking at a deficit of $200 to $300 million this year." That is the first year of Progressive Conservative operation in the province of Saskatchewan, and for the first time in many, many years, there will be a deficit. Surely that tells us something. Oh, but then they say that there must be many civil servants in Saskatchewan, that if it is a socialist government, the civil service must be very large.
It is interesting to look at the percentage of public employees in the work force. In Nova Scotia, it is 2.3 per cent under a Tory government. In New Brunswick, it is 3.7 per cent under a Tory government. In Alberta, 2.6 per cent of the work force is comprised of public employees under a Tory government. But in Saskatchewan, which has been under a socialist government for decades and decades, it is only 1.9 per cent. On a per capita basis, it is the lowest percentage in Canada.
There has been much rhetoric shared around these areas during the last little while. I listened carefully to the Tories telling us what they would do under these circumstances. Their previous finance critic, the hon. member for St. John's West (Mr. Crosbie), made it very clear when he said, "Listen, if I were to tell you what we would do if we were in government,
July 20, 1982

we would never be elected." He is a very honest man. He said that the Progressive Conservatives would never be elected if the people of this country knew what to do. I do not blame him, then, for keeping quiet about it. 1 suppose that if that is the kind of policy that we can expect, again we do not want to hold our breath waiting for the Progressive Conservatives to act.


Leonard J. Gustafson: Elect an NDP government and see the dollar fall.


Nelson Andrew Riis: It is a surprising day for me as a new Member of Parliament, just a small boy from western Canada-


Neil Young: Oh, you are doing well, though.


Nelson Andrew Riis: -listening to hon. member after hon. member speaking for the Conservative Party, saying they are against the 6 per cent-


Mr. Deputy Speaker:: The hon. member for Surrey-White Rock-North Delta (Mr. Friesen) rises on a point of order.


Mr. Friesen:: When the hon. member said he was a new boy from western Canada, that was the first point with which I agreed.


Mr. Deputy Speaker:: The hon. member is not making a point of order.


Nelson Andrew Riis: It is that kind of brilliance, Mr. Speaker, that- anyway, I will not pursue it.


Neil Young: For a Tory, he made a good speech.


Some hon. Members:: A typical Tory.


Nelson Andrew Riis: I want to make one further comment about my friends to the right. I do not like to pick on them, because it is so easy. But the Leader of the Official Opposition (Mr. Clark) in his speech, which was a good speech, went on at some length about the problems of Crown corporations and how the government had moved too much into this one area. It was interesting, because while I was listening to his speech, I happened to be reading the Alberta Report of July 5, 1982.


James Ross Fulton: A Socialist publication.


Nelson Andrew Riis: The Alberta Report went on to explain what is happening in that Tory bastion of Canada, namely, the government of Peter Lougheed. It stated:
-the oil industry was . . . surprised last month by the news that the ... provincially owned Alberta Energy Company Ltd. (AEC) was seeking a majority interest in Edmonton-based Chieftain Development Co. Ltd.
So I read further and I was interested to find out that this Crown corporation in the Province of Alberta, which is held up by all MLAs in that province, stated that this is the Alberta Energy Corporation's empire, which includes only certain things, such as 28 per cent of British Columbia forest products, 100 per cent of Blue Ridge complex, 100 per cent of Suffield oil and gas and 100 per cent of Primrose oil and gas. It also includes a 10 per cent investment in Syncrude, a 30 per cent investment in Western Basin oil and gas, 67 per cent of AEC
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Power Ltd., 50 per cent of Steel Alberta, 25 per cent of the Coal Valley project, 100 per cent of the Alberta Oil Sands Pipeline, 100 per cent of the Ethane Gathering System, 100 per cent of the Cold Lake Bitumen Pipeline, 50 per cent of Pan Alberta Gas Ltd, 50 per cent of Zimpro-AEC Ltd, which is involved in heavy oil extraction, and 100 per cent of Petalta, which is involved in the petro-chemical industry. But I guess that was not enough, because the corporation felt that it must expand and it went on and bought Chieftain Development Co., 100 per cent ownership of Tri-City Drilling, 100 per cent of Chieftain International, 100 per cent of Armstrong Drilling, 100 per cent of Hartfield Chieftain Leasing Ltd, 100 per cent of Chieftain Explorations, and 100 per cent of Chieftain Minerals, plus a little bit of the action in Texas, North Dakota, the North Sea, the Arabian Gulf and western Australia.


James Ross Fulton: What kind of government is that?


Nelson Andrew Riis: That is the Progressive Conservative government in Alberta. So I hope that when my colleagues to the right rail and rant about the role of Crown corporations in the country, they will remind themselves of the fact that their colleagues in Ontario and especially their colleagues in Alberta are into this business very deeply indeed. That is just a calm reminder.
I want to end by saying that there are two ways to eliminate a deficit. One is by abolishing the Defence Department, by stopping family allowances, by cancelling all spending on the environment, industry, trade, commerce, labour, agriculture and DREE, and also by removing all the support for the CBC, the National Research Council, the RCMP and prisons. Of course, that would still leave it a little bit short, so the government would have to cut out the old age pensions by about 30 per cent. That is one way of reducing the deficit. Another way, just as a round-up, is by raising taxes. We could, for example, eliminate the deficit by nearly doubling everyone's personal income tax. But we in this party feel that there is another way to reduce the deficit. That way is to stimulate the economy to get growth going again in the country, so that revenues start to flow into the government and so we can start taking care of the debt. That is our proposal.


Mr. Louis Duclos (Montmorency-Orleans):: Mr. Speaker, I have been a member of this House for a little over eight years, and I am used to the show of rhetoric displayed by members of the New Democratic Party. Our friends on the left of the Canadian political spectrum are usually very fond of demanding more elaborate social programs, and they obviously tend to favour a more expansionary budget policy. To them, budgetary deficits are not a problem but a routine instrument of the government's economic policies. That is why I was quite astonished when I saw the position being taken by that party on Bill C-125, legislation that will provide the government with borrowing authority for $11 billion. 1 am particularly

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surprised, Mr. Speaker, since, as the House is well aware, the New Democratic Party has already shown its true colours with respect to Bill C-124, pursuant to which wage increases in the federal public sector will be limited to 6 per cent in 1983 and 5 per cent in 1984. The effect of this policy will be to allow the government to save some $800 million over the next two years. That is why I have some doubts as to the logic of the position taken by the New Democratic Party on Bill C-125 since, if, as they claim, a budget deficit of nearly $20 billion is too high, I am surprised they should take a position that would have the effect of adding another $800 million to the deficit.
As for the official opposition, the Progressive Conservative Party, as usual, it is convinced that by repeating over and over again that the budget deficit is too high and is causing inflation, it will be making a useful contribution to the debate in the House and towards solving our country's economic problems. Mr. Speaker, I would like to know whether our friends in the New Democratic Party or in the official opposition have any constructive ideas and any sound and well thought out alternatives.
Only yesterday, the Leader of the Official Opposition (Mr. Clark) wanted to set a ceiling of $5 billion on the government's borrowing authority under Bill C-125. Mr. Speaker, I have no objection at all, but 1 would have appreciated it if the Leader of the Official Opposition had used his speaking time in the House to explain which budget items he would cut to manage a reduction of $6 billion in the government's total budget. He should have told the House which taxes would have to be raised and which expenditures would have to be cut. With the exception of some vague references to the National Energy Program and hospitality-related expenditures by senior officials, he mentioned the purchase of briefcases for public servants and finally said that if these budget items were eliminated completely, it would be possible to save about $25 million. Well, that is not going to do much for a $78 billion budget. Predictably, he quickly got on to his favorite subject, namely, the privatization of Crown corporations, and I hope the Leader of the Opposition will recall the reaction he got from Canadians on February 18, 1980, after he started toying with the idea of eliminating a number of Crown corporations which had served our country well for some twenty or thirty years.
Mr. Speaker, there are only so many ways to reduce a budget deficit. In fact there are three ways: increase taxes or reduce expenditures or a combination of the two. So the first question is: Is the Official Opposition in favour of higher taxes? No, of course not. In fact, they are just slavish imitators of the Reaganomists in the U.S., and like them, they tend to favour tax cuts. In fact, Mr. Speaker, we must not forget that, since the budget was brought down on June 28, they condemned the 6 per cent ceiling on the indexation of personal tax exemption, which, if inflation remains higher than 6 per cent,
would, of course, constitute a form of tax increase. So a tax increase is out of the question. We may now ask whether they favour a reduction in expenditures, since they do not want to raise taxes. One would think that our friends in the Official Opposition would be in favour of a reduction in expenditures. Not so, Mr. Speaker, and except for a few vague references 1 mentioned earlier and which were made yesterday evening by the Leader of the Opposition, the latter has no definite or detailed proposals regarding government programs that could be cut-and justifiably so in some cases-in order to reduce the government's expenditures. Mr. Speaker, when the Minister of Finance (Mr. MacEachen) brought down his budget on June 28, he proposed a ceiling on the indexation of various social programs, more specifically family allowances and old age security. For the government, this would mean a $360 million reduction in expenses. How did they react? The next day during question period, the New Democratic Party members and members of the Official Opposition accused the government of fighting inflation by exploiting low-income groups in our society.
Mr. Speaker, at this point I want to set the record straight, because the members of the opposition have been mouthing worse than half-truths, they have been practically telling falsehoods about this question. As far as old age security is concerned, is a government that, starting in 1983, will put a ceiling of 6 per cent on increases in old age security benefits, is such a government using these people as hostages in its fight against inflation? The facts are simple enough. Among the elderly, 47 per cent receive only old age security benefits, that is, they receive no guaranteed income supplement, and in their case it is true that if inflation were to remain at 11 per cent- which is far from certain, since 1 think the measures taken by the government should, in the months to come, bring about a substantial drop in inflation levels-but assuming that inflation remains at 11 per cent, Mr. Speaker, for the 47 per cent of Canadians who are not eligible for GIS because they have other sources of income, that would represent a loss of $55 per year or a little over $1 per week, which would enable the government to create jobs for their children and grandchildren and thus put our economy on the road to recovery. As for the 53 per cent who, in addition to the base pension, also receive GIS, they will continue to have their benefits and pensions completely indexed, so that in their case, the 6 per cent and 5 per cent policy will not apply.
Now a few words about family allowances. There are basic allowances which all families receive, and there is also the child tax credit that is received by 70 per cent of the 3,600,000 familes with children in this country. Obviously, in the case of the 30 per cent who do not receive the child tax credit, namely, families with above average incomes, they will have to do without a certain amount, which may vary according to the number of children, but average out to $16 per year. I repeat, these are families that belong to the 30 per cent that are
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financially well-off. In the case of the 70 per cent group, there will, of course, be an average loss of $16 per child annually but, to compensate, the government has announced in the budget a $50 increase in the child tax credit. I think it is clear the government, in this recession, wanted to continue in its role of providing for social justice in this country. Mr. Speaker, I would ask the Official Opposition two things. First of all, I would ask it to act responsibly and tell us once and for all how it would bring down the budget deficit: by increasing taxes or reducing expenditures. I want to know, once and for all, and I am sure many Canadians feel the same way. I also would like to know, Mr. Speaker, what the opposition would feel is an acceptable deficit.
In these circumstances, what would be an acceptable deficit? One of these days members opposite will have to lay their cards on the table and for once come up with constructive suggestions.
Mr. Speaker, what I deplore about this debate on the budget deficit is the fact that they lead people to believe that in itself a budget deficit is unacceptable and is bad for the country's economy, whereas I think one has to be more openminded and discriminating. Mr. Speaker, a budget deficit is not necessarily bad in itself, for it can even be used as an instrument of economic policy. One does not have to be a leading economist to be able to understand a few notions of the Keynesian economic theory. According to that theory, governments can be expected to record budget surpluses when the economy is growing and the unemployment rate relatively low; conversely, during an economic recession such as we are now experiencing and when unemployment is high, too high it is true, governments have to resort to deficit financing.
Why should governments resort to deficit financing in circumstances such as those now prevailing? Simply because the government must take over from the private sector which, given the idle productive capacity and overblown inventories, does not make enough investments to keep the economy on an even keel. In fact, Mr. Speaker, what is a deficit? In our case, it means that the government borrows from Canadians through Canada Savings Bonds, other securities and treasury bonds rather than raise taxes. We ought to keep in mind the fact that the major part of the debt of the Canadian government is money borrowed from Canadians. To put it another way, Mr. Speaker, Canadians owe money to themselves. I suggest there is nothing catastrophic about that. Of course, I will be reminded that, although what I am saying is true, the fact remains that government deficits-and they say this without a shred of supporting evidence-fuel inflation and therefore push up interest rates. Well now, Mr. Speaker, let us see if that is true. Is there any way to show that there is indeed a link between the level of government budgetary deficits on one hand, and the rates of interest and inflation on the other?
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Let us compare Japan and Canada. As everybody knows, Japan's current inflation rate is a shade over 3 per cent and its rate of unemployment is roughly the same. And yet, Mr. Speaker, during the six-year period between 1975 and 1981, year in and year out the budgetary deficit of the Japanese public sector has always accounted for a larger share of their gross national product than was the case in Canada. In 1975, Mr. Speaker, it was 2.8 per cent in Japan and 2.5 per cent in Canada. In 1976, 3.8 per cent against 1.7 per cent in Canada. In 1977, 3.7 per cent against 2.4 per cent in Canada. In 1978, 5.5 per cent against 3.2 per cent. In 1979, Japan's public sector deficit was 4.8 per cent of the gross national product compared with 1.9 per cent in Canada. In 1980, 4.2 per cent against 2.1 per cent and, in 1981, 4 per cent against 1.2 per cent. I might also mention the borrowing requirements of the governments, the percentage of the gross national product, and make a comparison between Canada and Japan. In 1980, Japan's public sector borrowing requirements amounted to 10.8 per cent of the gross national product.
In Canada, the figure was 4.5 per cent. We can do the same for 1979: 10.6 per cent for Japan compared with 4.4 per cent for Canada. Mr. Speaker, since we know the rate of inflation in Canada and in Japan, I think we also know that it is difficult to find a relationship between budgetary deficits on the one hand and the rate of inflation and the level of interest on the other.
Let us make another comparison, Mr. Speaker. It has become popular in the last little while to compare Canada with the United States, our powerful neighbour to the south. In 1981, the government deficit represented 2.4 per cent of our GNP. In the United States, the budgetary deficit of the federal administration amounted to 2.1 per cent of the GNP. For all practical purposes, the difference was therefore minimal, Mr. Speaker. Yet the rate of inflation in Canada is still something over 11 per cent compared with 6.5 per cent in the United States. What we may conclude from this, Mr. Speaker, is at the very least that no one can establish a relationship between government budgetary deficits and levels of inflation and interest rates. The situation in Japan proves this very clearly and very definitely, as does the comparison between Canada and the United States for the year 1981.
Mr. Speaker, I believe that because of the very high level of savings in Canada-as we all know, nearly 14 per cent of the available personal income is now invested in savings in Canada-the deficit of just under $20 billion can be financed without putting any upward pressure on interest rates. Nevertheless, we must remember one thing, namely that businesses and the government compete to a certain extent on the money markets, and 1 believe that we should look very closely at the possibility of using the tax system to make businesses much less dependent on the money markets so that they can generate their own investment sources through their own profits. I believe, Mr. Speaker, that in view of the present situation, it is

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time to review very closely the possibility of abolishing the taxes on corporate profits and of taxing these profits when they are transferred to shareholders as dividends. Of course, some will say that this would encourage businesses not to pay out dividends and to reinvest instead, but in my opinion, it would be a marvellous invitation to reinvest and it would make businesses much less dependent on the money markets. This would mean less upward pressure on interest rates, but I think it would also have the very beneficial result of increasing significantly the value of corporate shares and the loss of earnings by shareholders because fewer dividends would necessarily be paid out. This would be more than compensated by the significant increase in the value of shares. As I said before, Mr. Speaker, this would tremendously encourage reinvestments, especially in the case of small and medium-size businesses which would have the choice of distributing dividends that would be taxable or of simply reinvesting their profits, thus creating employment and contributing to the economic recovery, a great advantage to the Canadian population as a whole. Of course, Mr. Speaker, we would have to consider other factors as well. I am thinking in particular of all our business grant programs, many of which I think simply promote inefficiency.
Mr. Speaker, I believe that, with the exception of regional development grants, if Canadian businesses really want to play the game of free enterprise and of the capitalist system, the government should stop paying grants to businesses, so as to cut its spending, of course, although lower corporate profits would certainly affect federal tax revenues. Of course, the implications of such a reform under the capital gains tax system would have to be considered.
Mr. Speaker, while there is no evidence of a cause and effect relationship between government deficits and inflation and interest rates, I believe that it is nevertheless vital for the future of our economy to reduce inflation. Otherwise, we run the risk of finding ourselves with higher inflation and more unemployment than at the present time. It is often said, especially by labour leaders, that the government has overemphasized the fight against inflation and neglected the fight against unemployment, and that by simply inverting these priorities, the government could promote an economic recovery tomorrow, even though this might create a bit more inflation. Mr. Speaker, I find such talk irresponsible because the economy is not so compartmentalized. It is a bit like communicating vessels, and even more so in Canada, Mr. Speaker. Since Canada exports 30 per cent of the goods and services it produces and since two thirds of our exports go to the United States, 20 per cent of all jobs in Canada are directly dependent on our capacity as a country to compete on the American market.
If, because we stopped fighting inflation, we found ourselves with an inflation rate of 15 or 20 per cent, which is not impossible-some Latin America countries have inflation rates of 50
and 100 per cent, and it could easily happen here-it is obvious that labour unions would then call for wage increases of 15, 20 or 25 per cent, which would obviously affect our production costs. As we know that in the United States, with an inflation rate of about 6'/2 per cent, collective agreements are now being signed at 5, 6 or 7 per cent or even less, it is obvious that we would very quickly find ourselves in a noncompetitive position on the American market, and that we would have not only a much higher inflation rate, but also an even greater unemployment problem than at the present time.
Mr. Speaker, I was reading today the comments of the Leader of the Official Opposition (Mr. Clark), and I was struck by his repeated attempts to undermine the anti-inflation policy of the government. Several times in his speech, he mentioned the fact that the government had decided under Bill C-124 to restrict wage increases for public servants to 6 per cent next year and 5 per cent in 1984. He made a subtle attempt to undermine that policy. Mr. Speaker, I would like the Leader of the Official Opposition and the members of his party to make up their minds and to have the courage to practise what they preach when Bill C-124 is put to a vote. However, we know that the Leader of the Official Opposition is aware that all the poles show that 50 per cent of all Canadians support our budgetary and anti-inflation policies. Of course, he reads the poles. And we all know that the depth of his beliefs is equalled only by the depth of his political philosophy, which is saying a lot.
In concluding, I would like to say a few words about the need for a new philosophy in the public service if we truly want to reduce the growth rate of government spending. To anyone who is more or less familiar with the public service, how careers are developed and powerful mandarins are made, the system encourages behaviour that is not helpful at all in slowing down federal spending. A young and ambitious bureaucrat, who wants to have a brilliant career and be promoted in a matter of years, must have an increasing number of staff under his direction, and responsibility for increasingly larger budgets. This is one of the criteria used to evaluate our federal public servants and managers, and to determine whether a young or middle-aged public servant should or should not be promoted. Mr. Speaker, I think that in the months and years to come some serious changes will have to be made in this respect. I think that a feeling for sound economic management and financial restraint will have to become a way of life in the federal public service because, otherwise, I feel that we are only fooling ourselves, no matter which party is in power, if we believe that we can actually control the growth of government spending.


Mr. Bill McKnight (Kindersley-Lloydminster):: Mr. Speaker, before I make my general remarks on the matter before the House I should like to refer to the figures quoted by the hon.
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member for Kamloops-Shuswap (Mr. Riis) who was speaking when I came in. Last evening the hon. member for Yorkton-Melville (Mr. Nystrom) used the same figures regarding the Province of Saskatchewan. One could forgive the hon. member for Kamloops-Shuswap for not being too aware of the figures that apply in Saskatchewan, but we should not have to make excuses for the hon. member for Yorkton-Melville.
He stated, as I believe did the hon. member for Kamloops-Shuswap, that in Saskatchewan 1.9 per cent of the people are civil servants. Mr. Speaker, the correct figure is 2.9 per cent, that is, approximately 29,000 people in Saskatchewan are on the public payroll. I think that is something which should be brought to light.
The other subject I found interesting was that of the per capita debt of the province of Saskatchewan. It amounts to $2,831, the third highest in Canada. It was mentioned last night, Mr. Speaker, that after the Conservatives came to power in Saskatchewan they increased the salaries of executive assistants from about $36,000 to about $40,000 or $50,000.
Let us talk about what has actually happened. Mr. Sinclair, deputy minister to Mr. Blakeney, had a salary of $69,936. I can understand why those hon. members are not aware of these figures because it was not until the new government came into power in Saskatchewan that they were made public. I forgive them for not knowing them. Freedom of information may not work in this House, but I think it will work in Saskatchewan. Mr. Blakeney's cabinet secretary received a salary of $62,376. Under the Progressive Conservative government- 1 will give you the numbers because there is nothing to hide- the deputy minister to Premier Devine receives a salary of over $80,000, but he replaces the cabinet secretary at $62,000 and the deputy minister at $69,000. 1 do not think you could call that exorbitant.
When we talk about government restraint, Mr. Speaker, when we talk about the debt we are facing and the borrowing we will have to do as we are discussing it tonight under Bill C-125, being a farm boy from Saskatchewan it seems strange to me to have a piece of paper 8 inches by 10 inches in my hands which represents $11 billion. I cannot really visualize or understand $11 billion. The budget of June 28 was the aftermath of the November budget from last year, which in turn was the aftermath of a previous budget. Putting all those budgets together, Mr. Speaker, it is obvious that the Minister of Finance (Mr. MacEachen) had to attempt to draw his party and his career back from the brink of oblivion. Both the November budget of last year and the June budget of this year were full of mistakes. I am sure they were not deliberate mistakes, but they were mistakes in philosophy concerning what the Canadian people really want, what they would accept, what they would like to build and how they would like to have this country grow. Some of the mistakes were very obvious. The November budget forecast an unemployment rate of 7.8 per cent in 1982. The most recent figures available from StatsCan are that in fact 10.2 per cent of the country's labour force is out of work. That is 1.25 million Canadians, Mr. Supplementary Borrowing Authority
Speaker. According to the Minister of Finance in his November budget the deficit was to be held to 10.5 billion. We find out from the June budget that the deficit is going to be $19.6 billion; almost 100 per cent wrong in eight months.
We now have the minister coming to the people of Canada through this House asking to borrow $11 billion. Mr. Speaker,
I can tell you what my bank manager or any other bank manager would say to a businessman who went in and said "I am sorry, Sir, I was 100 per cent wrong." My bank manager would tell me that I am not capable of managing my business. That is what any bank manager would say, and that is what the people of Canada are telling the Minister of Finance. He is not capable of managing the business of Canada or of Canadians.
We are talking about billions of dollars. Not C. D. Howe's word "millions", but billions. That is many more zeros, Mr. Speaker. That is the way it works, one thousand million. This means that there will be one borrowed dollar for every $3 of revenue this government is going to bring in, one borrowed dollar for every $4 spent. To put it in perspective, Mr. Speaker, this deficit is twice the size, on a per capita basis, of the deficit being discussed by the Reagan administration in the U.S. The U.S. economy is about ten times as large as ours, but the $20 billion deficit of this Minister of Finance is the equivalent of over $200 billion in the U.S., twice as large as the deficit which has preoccupied Washington in the past few months.
There is no sign of economic recovery in Canada, but there is in the U.S. Their inflation rate is half of ours. Why the difference? In the last two or three years the Americans became deadly serious about doing what was necessary to bring down the rate of inflation. Most segments of American society showed more willingness to trim unrealistic expectations, and those unwilling to do so were pushed into it. I think we all recall the air traffic controllers strike in the U.S. They made unrealistic demands and the people, through their government, denied them those demands.
Our Minister of Finance tends to blame everything on everyone else in the world. He blames our problems on the Americans, on the global recession, or on the hon. member for Central Nova (Mr. MacKay). I can understand the necessity for that, but the one thing he did not do last November or this June was to accept the responsibility for the mistakes. He is the Minister of Finance in Canada, no one else, and he bears the responsibility for the shape we are in. There has not been the slightest admission of guilt.
According to Charles Lynch, Mr. Speaker, members on the government side applauded the Minister of Finance 34 times during his budget speech. I cannot find anything to applaud in the speech. Well, perhaps I could applaud two or three times, but certainly not 34 times. It just shows that as long as the minister is delivering a budget, members on the government side are bound to find something to applaud. As a matter of fact, some of them even went around saying, "Hey, we helped draw this budget up". I would not say that, guys and gals. I

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would not go home and tell that to my constituents if I were you. My goodness, you have to be more careful about your health. You should not be telling your constituents that you helped draw up this budget. That is very dangerous, I think, Mr. Speaker.


Mr. Deputy Speaker:: With all due respect to the hon. member, the Speaker did not participate in the drawing up of the budget.


William Hunter (Bill) McKnight: I accept that, Mr. Speaker. Let us go on and look at where inflation in Canada stems from. I believe it is government induced and government sponsored. StatsCan, the federal government's own department, has revealed figures which I hope some of the members on the government side and the Minister of Finance will soon have an opportunity to read. StatsCan reports that while all consumer prices rose between May, 1981, and May, 1982, many prices which are controlled or heavily influenced by government rose far faster than those in the private sector. For example, energy costs are up 23.8 per cent and transportation costs are up 16.1 per cent. By the way, transportation costs will rise even further when the Minister of Transport (Mr. Pepin) implements his Crow proposal. For the producers of grain in Western Canada these costs will increase about 45 per cent over the next three years and they will double in the next five years. Tobacco and alcohol costs, also controlled by governments, are up 15.6 per cent. But the other components of our economy, those not controlled or influenced by government rose far less. For instance, clothing rose by 6.3 per cent. According to a recent Statistics Canada study, private sector inflation was 9 per cent while the rate for government and government regulated industries was 18 per cent, twice as high as private sector inflation.
What about the postal rate? There was a postal rate increase of 72 per cent. It is not bad to have an increase of 72 per cent if you can have mail delivered to your door and if you can use the new Priority Post. But in my riding of Kindersley-Lloydminster, Saskatchewan, 95 per cent of the people drive to pick up their own mail. They drive 10, 15 or 20 miles one way. They suffered a 72 per cent increase just to get their letters out, but if they happen to go on a Saturday morning, the post office is closed. I cannot see why, when the government is trying to assess the blame for inflation, it does not look within itself and at some of the policies it has brought forward.
We have listened to the Mi lister of Transport speak. Fie stated that Canadians were .poiled and that we had to be pushed into line. We have heard the same thing from the Prime Minister (Mr. Trudeau) and from the Minister of Finance. To back up my statement, the hon. member across the way, the hon. member for Montmorency-Orleans (Mr. Duclos), said that Canadians are saving. That means individual Canadians are living well within their means. If you can save from your after-tax income, you are not overspending. In 1979, individual Canadians saved 11 per cent of their after-tax income. In 1980 they saved 11.2 per cent; in 1981 they saved
12.4 per cent and in the first three months of this year Canadians saved 13.3 per cent of their after-tax income despite rising unemployment and inflation. That is living well within your means.
I cannot say the same thing for the government. Where is the fairness of imposing dictatorial government policies upon individuals who are saving their own money to protect themselves against the government that runs their country? Canadians are saving because they are scared stiff of what is ahead for them under this government. They want to try to save everything they can so they can be protected from what they see this government doing and what they have seen it do in the past.


Mr. MacKay:: They should try buying pawn shop stocks.


William Hunter (Bill) McKnight: What is the government going to do with this additional $11 billion in borrowing authority? It has not even told us what it is going to do with the money. I have not heard one proposal from the government about what it is going to do with the extra money. I have not heard what the government is going to do with the $21.2 billion spending authority it will have. The $21.2 billion is considerably higher than the $17.1 billion, which the Minister of Finance told us he needed in his budget in June. Where is the extra money to go?
Liberals tell Canadians to come into the 6 per cent world. Do hon. members remember the statement, "Welcome to the 1980s"? I am sure some hon. members opposite were at the Chateau Laurier in February, 1980 when the Prime Minister said "Welcome to the 1980s". I do not see anyone over there very happy about what they have found in the 1980s.


Elmer MacIntosh MacKay: They were out about 50 years.


William Hunter (Bill) McKnight: Now we hear the words, "Welcome to the 6 per cent society". We have heard the minister say, "Tighten your belts". How do you tighten the belt on a skeleton when you have nothing left to tighten and when people in Canada are losing their homes, their farms and their businesses? How do you tighten your belt then? That is not something the people of Canada are not prepared to do. They are well prepared, but they have to have some leadership, not forced direction.
Let us take a look at uncontrolled growth in government. The government started out in the early 1970s. At that time it wanted to have a window on the oil industry.


Elmer MacIntosh MacKay: The government has broken the window.


William Hunter (Bill) McKnight: The Liberals called this policy Canadianiza-tion. But actually it is nationalization. Petro-Canada advertising states "Buy Petro-Canada, it's ours". But it is not really ours. It is more the property of the banks and the other lending institutions that lent the money to the Crown corporation to acquire Petro-Canada. It has not yet been paid for by the people of Canada.
The original proposal to establish Petro-Canada was sound. It was to be a window on the industry. I would like to quote
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what Mr. Donald MacDonald said in May, 1974. He said that Petro-Canada would likely be nothing more than a small player in the domestic oil patch so the federal government could learn how the energy sector works. Although it might be empowered to refine and retail petroleum products, Mr. MacDonald deemed that role unnecessary and rather inappropriate.
Let us take a look at some of the history and just where some of this money has gone which the government has spent. Petro-Canada came into existence in January, 1976. Its federal shareholder, the federal government, did not know what to do with it. But Mr. Strong did, and his successor, Mr. Hopper, did. They started with not a bad chunk of capital of $383 million, which is a nice little start for a company. At the end of 1976 PetroCan had 400 employees and the rights to 88 million acres of land.
In 1977, Ottawa infused additional cash of $155 million. It also passed on to the corporation 25 per cent of all, promising federal prime lands in the Arctic not hitherto leased, allowing PetroCan up to seven years to select what it wanted. As well, PetroCan was allowed to appropriate-appropriate is a nice word-up to 25 per cent in Canada land holdings of foreign-owned companies. At the end of that year PetroCan had 649 employees.
The pace picked up in 1978. The corporation bought Pacific Petroleums Ltd. for $1.5 billion, partly out of production earnings and partly out of a further federal contribution of $240 million. It finished that year with a B.C. oil refinery, interest in coal, uranium and various other minerals, minority shares in two pipelines, 426 gas stations and 2,038 employees.
Then there was a brief lull. But with the return of the Liberals in 1980 Petro-Canada speeded up again. It began undertaking state to state oil purchases with Mexico and Saudi Arabia. Petro-Canada had a hand, and in fact it had an employee who was an executive assistant to the Minister of Energy, Mines and Resources (Mr. Lalonde), helping to draft the national energy policy. When the Liberals drafted that energy policy it worked out that instead of losing 25 per cent of its cash flow, as did any other oil company outside of Canada, Petro-Canada its cash flow by 23 per cent. Then what happened? The federal government in that year contributed $80 million. In 1981 the company bought Petrofina for $1.5 billion. This was financed in part by a 4 cent per gallon surcharge on all Canadian sales on gasoline and home heating fuel. At year's end, this corporation that would not interfere extensively in the private sector, this corporation that was going to be a window on the world, this corporation that was going to have the ability to refine and retail-but Mr. MacDonald in 1974 said that he did not really think that it was really necessary-had $6.6 billion in assets, 169 million acres of land, 5,800 employees and 1,500 gas stations. This is where some of the money which we are discussing this evening has gone.
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The hon. member for Montmorency-Orleans asked where we on this side would start. We cannot start in June 1982 or in November 1981. We would have to go back and start 14 years ago. These things which we see inflicted upon our economy and upon Canadians today did not just happen in six months or twelve months. They have built up over 14 years.


Elmer MacIntosh MacKay: It is difficult to unscramble an egg.


William Hunter (Bill) McKnight: The hon. member for Central Nova is absolutely correct. I think we could attempt it and be successful because it is very evident that the people of Canada have lost their trust in the party opposite. They really do not trust the government. It is not individual people, it is not individual members; it is the trust which a society should have in its government. The government has broken faith far too many times with the electorate of Canada. That is why there is no trust or faith at this time.
There is one area where we could save a little bit of money. Right now we are paying more for imported oil than we are for Canadian oil. Is it not funny that a country with vast oil reserves is paying more money to someone in Mexico than it is paying to someone in Saskatchewan or Alberta? It does not make a lot of economic sense. It certainly does not make political sense.
There are several examples of what happens when a party has been in government for so long that it forgets the money it is spending is not its money, that it is money held in trust for the people of Canada to be spent wisely. The Liberal government is spending $111,851 to study the spreadability of butter. I think the hon. member for London-Middlesex (Mr. Bloomfield) who is sitting opposite, could study the spreadability of butter tomorrow morning when he spreads it on his toast. That would cost a lot less than $111,851.
In February, Canadian National Railways spent $64,244 to purchase advertising space wishing CPR, its chief competitor, a happy birthday. It is nice to be friendly with one's competitor, but I do not think it is worth over $64,000 to the taxpayers of Canada to wish a happy birthday to the CPR.
Canadian taxpayers will shell out $4,000 per month over the next five years for rent on the Vancouver apartment of a senior government bureaucrat. The apartment has been rented by the Department of Public Works for Pat Reid, the Commissioner General of Transpo 1986, a world fair on transportation and communications. The justification for the expense is that the apartment is being used for entertaining. An aid to the Secretary of State for External Affairs (Mr. MacGuigan) has called the amount "chicken feed". It is not chicken feed to someone who is having a great deal of difficulty paying $700, $800 or $900 per month in mortgage payments. Four thousand dollars per month for an apartment in Vancouver for an employee of the people of Canada, an employee of the taxpayers of Canada, is really not chicken feed.
Between April 1, 1980, and June 30, 1981, the government spent $674,972 to supply public servants with briefcases. After

July 20, 1982
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I was elected to this place and before I even had an office, I was given a briefcase. Apparently not only Members of Parliament receive briefcases from the taxpayers of Canada; so do public servants. In any job in which I have been involved I have been able to supply my own briefcase; so can all hon. members. I see them shaking their heads indicating that they would. They do not want them, but they got them.
It will cost $400,000 to provide business cards to 25,000 public servants.


An hon. Member:: No.


William Hunter (Bill) McKnight: Yes, it will cost $400,000 because now we have two Canadian flags on the business cards of public servants. The "word mark" is what it is called, and there is not room to put the telephone number and address on one side; now we must print two sides. We know that that costs money.
Of course we know about the flying in formation to Winnipeg by three ministers. They flew into Winnipeg in three separate Jetstars which cost approximately $27,000. First-class return air fare would have been $1,777.
I saw the Minister of Employment and Immigration (Mr. Axworthy) here a while ago. In the spring of 1982, with a record 1.2 million Canadians out of work and the economy in a recession, the minister and his department spent $5 million to tell Canada that the economy was working. God help us if it really had been working; would they ever have been able to spend money!
Then we come to Miss Janet Smith, an assistant secretary to the Liberal cabinet, who was sent to Nice, France for four months to learn French at a cost to taxpayers of $12,000.


An hon. Member:: Yes, yes.


William Hunter (Bill) McKnight: I hear an hon. member saying, "yes, yes". It is not Janet Smith's problem. It is a real lack of caring or lack of understanding when people are having difficulty financing their homes, Finding jobs, looking after their families and putting their children through college-everything we all want to do. Someone does not understand that there is a real world out there and sends a member of the public service to France to study French. That I do not understand.
We all live in Ottawa and know that it is difficult to get around. Between March 1, 1980, and May 31, 1981, the government paid out $3.5 million in taxi fares. We have participaction on the one hand, but we have $3.5 million in taxi fares on the other. At the current Ottawa taxi rates, it is enough to go around the world 120 times.
Where is the restraint? I do not see any restraint in what I have outlined. We have heard of restraint. We have talked about lack of growth. We have heard restraint discussed on the other side, but we have not seen it. Every time someone mentions the public service, government members ask, "Why are you picking on the public service?" We are not. I am certainly not picking on the public service this evening. I do not blame anyone for wanting to work for the government.
There are many dedicated, intelligent, hard-working public servants, but it does not mean that it has to expand and grow.
At the end of September 1976, the Treasury Board reported that it had 311,284 continuing employees. One year later it had 316,547, and in September 1978 it had 317,210. The latest estimate in September 1981 was 322,414. There is a lack of understanding. The government must understand that people in Canada are hurting. People are having a great deal of difficulty with more than 1,250,000 Canadians out of work, or over 10 per cent of the work force. That figure does not include the people who are tired of walking the streets, walking into factories, knocking on doors and asking for jobs. If we took into account the people who have absolutely given up, who are hopeless and in despair, and if we took away the public service, we would find that probably 15 per cent of our work force is unemployed. That is, 15 per cent in total unemployment, and unemployment in the public sector is about 6.4 per cent.
Our debt this year will be $122.7 billion. The cost of servicing that debt will take up 22 per cent of all government spending. That is almost one quarter of government spending which is to be used for servicing the debt. I hear members opposite saying that we should not worry about the deficit because it is money we owe to ourselves. It is not money that we owe ourselves, it is one quarter of the government spending which goes to service the debt. If it is our money, why do we service it? Why do we not just keep that 22 per cent? Everyone realizes that money is not free.


An hon. Member:: It belongs to our grandchildren.


William Hunter (Bill) McKnight: As my colleague says, it is our grandchildren's money. It is our children's, our grandchildren's and their children's.
I fail to understand how some people think that we are doing very well. In 1982 the net farm income is expected to decline by 17 per cent. Farm cash receipts will increase marginally by 2 per cent. The net farm income in 1982 in Saskatchewan is expected to decline by 35.6 per cent. Farm bankruptcies are up 60 per cent this year.
Since I have had the privilege of being a Member of Parliament, I have had phone calls for the First time in the last seven months from young farmers in my riding who say that they are up against the wall. They cannot finance and pay for their spring operations, they are in arrears on their land payments, and they cannot meet their machinery payments. This is the first time since I have been a Member of Parliament that calls like that have come to my office. I know it is happening to every member in the House as well.
What will the government do about this? I have not seen it do anything tangible nor do I believe that Canadians have seen any concrete action taken by the government. The budget proposes to provide $750 million for job creation. Economists tell us that $1 billion is required to lower the unemployment rate by one per cent through job creation. When I look at the
July 20, 1982

budget, the clear implication is that the $750 million in new spending is not there. At best, there is $267 million of new spending, and at worst there is $117 million allocated for new homes this year in job creation.
There is nothing mentioned in the budget about the tax increases in UIC which will be imposed upon Canadian employers and employees. The implications of that tax could mean that each employee in Canada could pay up to $142.50 more per year for UIC payments. As a group, employers could pay $1.2 billion more this year.
While the government talks about borrowing money, it introduced a budget which increased taxation. Once again this shows the inequity. For example, the 1984 federal and provincial tax increases which will come about as a result of capping indexing at 6 per cent will mean, for a single taxpayer with no dependants who makes $10,000 earned income, a tax increase of 14.7 per cent. However, the single taxpayer who makes $100,000 a year will have an increase of 2.5 per cent. If we take the example of a married taxpayer with two dependants under the age of 18 who has $20,000 earned income, we find that his increase in taxes will be 21.7 per cent. However, a similar taxpayer who earns $100,000 a year will have an increase, under the deindexing that has taken place under this government, of only 3.2 per cent. Is that a just society? It is not just nor is it fair, and the members opposite know that.
During the last election campaign, members of the Liberal Party promised to keep the rate of government spending below the growth in the GNP. The government is spending twice as fast as it promised during the election campaign. Yesterday in the House we heard the Minister of Agriculture (Mr. Whelan) give his government's policy on upholding election promises. My colleague, the hon. member for Vegreville (Mr. Mazan-kowski) asked the Minister of Agriculture what happened to his election commitment for a special structure on farm fuels which would be exempted from federal taxes. At the present time the government takes 60 cents, or 40 per cent, for every gallon of gasoline used in the production of food in the agricultural industry in this country. However, what did the minister say on behalf of his government? He said that the speeches used during an election campaign were not prepared speeches; they were made in the heat of an election campaign. We now hear directly from the minister what many people in Canada are beginning to believe, that the Liberal Party and the government will say anything during an election to get elected. They do not feel any commitment to fulfill those promises.
The hon. member for Montmorency-Orleans spoke about capital gains during this debate. I agreed with some of the points he made about that subject. But the Minister of Agriculture during the 1980 election campaign promised all farmers a once-in-a-lifetime capital gains exemption. It is not there. It is not there for small business and it is not there for farmers. He also promised to provide an option to change the valuation day. We have seen nothing about that. When the hon. member for Vegreville asked the minister how he was
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proceeding with these promises, the minister answered that he was coming along slowly.
We have an appointed member in the Senate, from the Province of Saskatchewan, Senator Argue. He is a cabinet member who is responsible for the Wheat Board and he is assistant to the Minister of Transport. After the budget which made this $11 billion borrowing authority bill necessary, he said that Canadians face a confident future. He said that the government has given leadership with this budget, providing a sense of direction and a target for Canadians to aim at. If anyone knows the Senator from Saskatchewan, he is some target.
What was the reaction to the budget? The best indication is investor interest. Share prices plummeted 13.14 per cent on the Toronto Stock Exchange under hectic trading the day after the budget. The day after the other budget in October of 1980 the market dropped 0.89 per cent. After the November budget the market went down 1.99 per cent.
If hon. members want to talk about confidence we should make comparisons with the budget of the former minister of finance, the hon. member for St. John's West (Mr. Crosbie), in the winter of 1979. That budget, which was later defeated by the NDP and the Liberals, caused the market to rise by 1.9 per cent, a rally on the market.
I heard the members from the Liberal Party west, the NDP, talk about how to expand the economy. I would like to draw to their attention some remarks made by the predecessor to their finance critic, the hon. member for Kamloops-Shuswap (Mr. Riis) since he left the House. Mr. Rae began by saying that Ontario's unemployment rate last month was 9 per cent. He wanted the treasurer of Ontario to do what the finance minister in this House had done. He said that he should reassess his policies and bring in a new budget. He wants to double the deficit and tax the corporations. He wants to tax those who have the ability to pay. That is what the leader of the NDP in Ontario wants to do. He wants higher taxes. The reason there is so much unemployment is that we have fewer corporations which are able to employ people. That will not work.
As I draw my remarks to a conclusion I would like to read to hon. members opposite the words of a prominent Canadian stated in 1965. He said: "It must never be forgotten that in the democracies that we know the political party is not an end but a means, not a goal but an instrument. He who enters a political party, then, is choosing a tool. We do not repudiate any of our convictions. We have only resolved to pursue elsewhere and in other ways the intellectual and social struggle which has always claimed us."
I have just quoted the Prime Minister of Canada. I would like to quote another-


Mr. Deputy Speaker:: I hesitate 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?

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Some hon. Members:: Agreed.


Some hon. Members:: No.


Stan Darling: Mr. Speaker, the bill before us today clearly and chillingly illustrates the serious financial problem being faced by this nation. We are deeply in debt, and the interest we pay on that debt pushes us even further in the hole, a hole dug for us by the government with its abysmal fiscal and economic policies and its arrogant and wasteful spending.


Mr. Lalonde:: Now, be nice.


Stan Darling: I am being nice to the minister, or I could say a lot more than that.
Like the sink holes which swallow up everything in their path, the hole created by the government has gobbled up homes, businesses, farms and jobs of thousands of Canadians in every community across the country, in large cities and small towns, and those who have been fortunate enough to own homes are losing them because of high mortgage interest rates which have nearly doubled their monthly payments. Right across the country, businesses, large and small, have been going belly up as business bankruptcies climbed to 5,383 in the first half of this year, 37 per cent higher than the previous year. Experts say that the number of firms going out of business may actually be five times greater than the recorded rate because most of them do not even bother to file bankruptcy. So we may have upwards of 25,000 employers losing their livelihood in the first six months of this year. Given an average of 11 employees per firm, some 275,000 employees will be out of work as a result and will be forced to join the ranks of more than 1.5 million already unemployed. In one way or another, millions of Canadians have toppled into the hole created by the government and thousands more are expected to vanish into the abyss.
The hole created by the government has become a seemingly bottomless pit and, into this bottomless pit, the government would have us willingly toss another $11 billion, just like that, no questions asked, or, if questions are asked, no answers will be given. That is because the government has a history of taking, not giving. What it takes is the taxpayers' money. It then takes more money so that the hole gets bigger and bigger.
Our gross national debt was $119 billion at the end of 198081 fiscal year, and it is expected to reach $135 billion this year. By comparison, when the Prime Minister (Mr. Trudeau) took office in 1968, the nation's gross national debt was $31 billion. The government has plunged the country another $104 billion into debt since that time. This gross national debt of $135 billion is equal to a debt of $5,560 for each and every Canadian, or $14,260 for each taxpayer. While the debt itself is shocking enough, the interest we pay on the debt is staggering. The cost of interest on the public debt this year will be $16.6 billion. This is the cost equivalent of $680 for every man, woman and child in the country, or $1,750 for each and every taxpayer. One tax dollar in five is now used to pay interest on the nation's debt.
Faced with these financial horrors, it would be reasonable to assume that the government would be drastically trimming its spending and working night and day to develop and implement policies for rapid and stable economic growth. Not so. The government's June budget forecast a record deficit of $19.6 billion this year, and the estimates are that it will be considerably higher than that. Deeper we go down into the bottomless pit.
The government adds to our deficit, and then finds itself only two options from which to choose to finance that deficit. First, it can print more money, and over the past ten years it has done so to cover up to $12.4 billion of its financial requirements. But putting the Mint's printing presses on overtime eventually just adds to the problem. The more dollars are printed, the less they are worth.
The other option open to the government, that is, to borrow money, is also fraught with financial penalties. In 1981, borrowing by the federal government accounted for 44 per cent of all net new security issues placed in Canada. Borrowing of this magnitude has an obvious effect on the supply and demand for money and, thus, on the interest rates that must be borne by the private sector. Simply put, this means that, with the federal government borrowing almost half the available money, what is left over is limited and costly, which is why interest rates remain so high and why Canadians are being forced out of their homes, forced to abandon their businesses and farms and forced onto welfare rolls as they lose their jos.
It is not that this government cares one whit for the plight of millions of Canadians. It wants the authority to borrow $11 billion and the devil take the hindmost. The $11 billion it seeks permission to borrow will be added to the $3.6 billion in unused authority from previous years, plus the $6.6 billion authorized last June. If the bill before us today passes, it will give the government the right to borrow a total of $21.2 billion, an amount significantly higher than the $17.1 billion financial requirement outlined in the budget.
There is no reason to assume that the bill will not pass. Despite the grief which excessive government spending and continued high interest rates have caused millions of Canadians, no one on the opposite side of the House seems to care about or understand the urgent need to place the welfare of people before political party loyalty, not even when most of them privately cringe over what occurs in their names.
Not one member on the opposite side of the House has risen in his or her seat to condemn publicly the record level of business bankruptcies in the country. Not one member on the opposite side of the House has risen in his or her seat to condemn publicly the financial hardship the June budget will impose on the elderly and low-income families because of increased taxation. Not one member on the opposite side of the House has risen in his or her seat to condemn publicly policies which have resulted in the unemployment of well over 10 per cent of the Canadian work force. Not one member on the opposite side of the House has risen his in or her seat to protest publicly either increased consumer costs or industry failures as a result of the disastrous National Energy Program. Those
July 20, 1982

hon. members opposite are not protesting the questionable and costly air trips, 36,000 in 37 days, taken by public employees out of Ottawa and Canada, or the cost to the taxpayer of ministers' use of government planes to and from their ridings. They are not demanding a halt to the millions of dollars wasted on government advertising, blowing their own horn to the tune of $73 million this year. We do not hear them speaking up on behalf of Canadians when the price of postage stamps more than doubles, with an increase of up to 72 per cent. Not a peep was heard from those on the other side when it was revealed that a staff member of the Prime Minister's office was being sent to the French Riviera at the taxpayer's expense to learn French.
It was not anyone on the other side of the House who bothered to unearth the fact that government spent $5 million on food, liquor and entertainment in the first six months of 1981. Nor did anyone on the other side of the House raise the question of why, during a period between March 1980 and June 1981, government employees ran up taxi bills of $7,000 a day. The total taxi bill for this 15-month period is almost $3.5 million.


Marc Lalonde: That's not true.


Stan Darling: What do you mean it's not true? I suggest that the Minister of Energy, Mines and Resources (Mr. Lalonde) look at the Auditor General's report. Who across the floor rose to object to the fact that during the same period the government spent more than $275,000 a day for telegrams and other message services? Who bothered to wonder why officials at Canada Post, who approved the spending of more than $260,000 on telegrams and other message services, are so determined to prevent other Canadians from using alternative services?
No one on the other side of the House has ever complained about the $65 million spent to date by the metric commission to implement a program which is costing business and consumers literally millions of dollars. Not a whimper of protest was heard from the other side when it was revealed last November that the National Capital Commission had decided to spend $1.4 million to change the colour of its trucks and signs.
I am sure many members will be aware that a few years ago the Department of Public Works decided to change all its signs. Depending on where the sign was located, originally the sign had English on the top and French on the bottom in the Province of Ontario and French on the top and English on the bottom in the Province of Quebec, as it should be. Millions of dollars were spent to change that to a rectangular sign so that both languages would be at the same level. That might have some merit, but not at a time of austerity. That kind of money should not be wasted. It continues on and on.
Then there is the $2,000 it cost the taxpayers for a hearing last September by the Canadian Transport Commission on why a Yukon railway should be given more time to instal
Supplementary Borrowing Authority
warning lights when those lights had already been up and working for a year at the time of the hearing.
It did not seem to bother anyone on the other side when last February Canadian National Railways spent more than $64,000 on advertising to wish its competitor, CPR, a happy birthday. Surely a nice letter from the president of CNR to the president of CPR would have been sufficient, and if he had wanted to send a telegram that, too, would have filled the bill quite well.
Members opposite blushed when it was revealed late last year that the Canadian Unity Information Office was spending as much as $500 to $700 a day to have same-day newspapers from other cities flown to Ottawa, even though one of the papers could have been purchased on the same day at a news stand in a local hotel within five minute's walking distance of the Unity office.
No one opposite bothered to hang his or her head in shame when it was learned that during 1980-81 the government was billed $26.3 million for telephone calls not placed on government rented lines or through government operators. The list of financial follies of this government is as bottomless as the financial holes it has dug.
Those opposite prefer to pretend publicly that none of these scandalous incidents have occurred. Canadians will not hear a word of complaint from those opposite, although in all fairness when the heat got pretty bad in their ridings, several members on the government side stood up and criticized the government and the budget, first the November budget and later the June budget.
A group from the Province of Quebec ten-strong held a meeting and then publicly stated they did not agree with the budget. More recently, the Solicitor General (Mr. Kaplan) very truthfully stated publicly that he did not agree with the budget. On his return to Ottawa, he was taken to the woodshed by the Prime Minister, and talked to in a very serious and fatherly fashion. We have not heard very much from him since. Members can smile, but that is true.


Mr. Hnatyshyn:: He was called unforgivably naive.


Stan Darling: Canadians hear very few complaints from the other side of the House. This tone of silence is particularly in place when it comes to giving a voice in this House to the constituents of three ridings where byelections have yet to be called:	Timiskaming, Broadview-Greenwood and Leeds-
Grenville.
No one on the opposite side of the House can even bear to think of the humiliation this government would receive at the polls if the byelections were held. A week or so ago I spoke to a distinguished member of the government. We were talking about other matters. I asked him when the byelection would be called for Timiskaming, which is in my area of northern Ontario. After telling him that two candidates had already been named, I asked when they were going to have their nominating convention. He looked at me and said, "Stan, you know, we may be crazy at times, but we are not stupid. We would be tarred and feathered."

July 20, 1982
Adjournment Debate
Mir. Rossi: Name him.


Stan Darling: No, I will not name him.


Mr. Rossi:: Name him.


Stan Darling: I certainly won't name him. I will name him to you privately and you can talk to him. I certainly will not reveal any confidence, but I thought it was worthwhile mentioning it here.


Carlo Rossi: Name him, Stan.


Stan Darling: I am touching a sore spot when I mention those three byelections. There is no doubt about that. We know very well that if those three byelections were held, the Liberal Party would not place better than third. I give the Prime Minister full marks.


Mrs. Hervieux-Payette:: We get elected.


Stan Darling: Don't worry, you won't get elected. I see it is ten o'clock. May I call it ten o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION

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

Benno Friesen: Mr. Speaker, it is now 13 months since the emergency planning orders passed by Order in Council 1305 were gazetted and legitimized. That was the order in council which drew national attention to the fact that the government was drawing power to itself so that in wartime it would be permitted to build and administer civilian internment camps. What drew national attention to that particular power was the fact that it was being passed at almost the same time as the Charter of Rights and Freedoms was being adopted by this Parliament. The government was billing and cooing to the Canadian public and indicating that never again under this new and great Charter of Rights and Freedoms would it be possible to intern people in internment camps.
When that order in council was passed, I think all Canadians would agree, it had the force of law. Yet the government House leader, the President of the Privy Council (Mr. Pinard), says that that particular order in council has to be legitimized and endorsed by statute in order to give it force and meaning. As I looked at that particular order in council as gazetted, I noticed that directly under the registration number and the date was the heading, "Other than statutory authority". If the government House leader says it needs to have statutory
authority to give it force, but the order in council itself says it gets its force from other than statutory authority, I think that leads us all to conclude that the only other force supporting that particular order in council is the Crown prerogative. The Crown prerogative is an almost mystical term in Canada. In many ways it has been narrowed by statute so that the Prime Minister (Mr. Trudeau) cannot in all instances assume dictatorial powers.
I turn now to a letter written by the President of the Privy Council addressed to the two chairman of the Standing Committee on Regulations and Other Statutory Instruments on March 25, 1982. In that letter the President of the Privy Council said:
If Parliament were dissolved, or if the pace of the crisis at hand did not allow the time to assemble Parliament, the government would be forced to act in reliance on the Crown prerogative, to the extent that it provided a legal basis for authority to act.
That was just nine months after the minister said in a speech to his provincial counterparts that if Parliament were not in session at the time an emergency arose the government would have to act extralegally.
In the summer of 1981 the President of the Privy Council said the government would act extralegally. In March he said it would have to rely on the Crown prerogative, which naturally then leads us to ask what the powers of the Crown prerogative are. I therefore wrote to the research department of the Library of Parliament and asked that department to undertake a study on the powers of the Crown prerogative. On April 27 of this year the research department sent me the results of its study. The report is entitled "Emergency Powers: Executive Action in the Absence of Legislation". Nothing could be more to the point than a title like that. I would like to quote what the research department of the Library of Parliament said on page 15 of its report:
Executive action without such legislation is always possible, but has very little legal basis. If a situation arose in which Parliament could not enact legislation, the government would act and the legality of the actions would be later determined by the courts under the common law, unless an indemnity Act were passed.
Those are some very operative terms.
Executive action without such legislation is always possible-
If a situation arose in which Parliament could not enact legislation, the government would act and the legality would be tested later.
My mind flips back to the year 1970 during the so-called Quebec crisis when 450 people were arrested in the Province of Quebec without charges being laid. Those people were never seriously questioned. They never stood trial, and most of them were released later without ever having been charged. It is now 12 years after that event but how many of those people have reached the point that they could legally challenge the government? The fact is that after the event those people are in no position to question the legality of that action; they either feel
July 20, 1982

too harassed or too impoverished to challenge the government. The government has the power to act extra legally under the powers of Crown prerogative and most of the people affected by that extra legal activity are in no position to check things later.
The government has had a full year since this was brought to light to draft legislation but that has not been done. No legislation has been tabled. We have no way of knowing what it will contain. There is no way of limiting the Crown prerogative, so one must conclude that the government does not want to, and certainly that it does not want the Canadian people to know the limitations of the Crown prerogative, if there are any.
The clue may rest in a speech made by the President of the Privy Council a year ago, Mr. Speaker. I should like to quote three paragraphs from it. Ele said:
But there are factors in addition to a concern for human righs that militate in favour of an emergencies statute. When we need authority during a crisis, we cannot afford lengthy discussion about "inherent powers" that may be implicit somewhere in precedent. When we need to act decisively within the law, we cannot afford to be burdened by real uncertainty about the law ...
And if the emergency arises when Parliament itself is dissolved, we would at present have no option but to act extralegally.
Later in the speech he said:
I believe that three general classes of emergency can, during peacetime-
And, Mr. Speaker, 1 underline, "during peacetime".
-threaten the "peace, order, and good government of Canada"-
First, there are emergencies in which the safety and welfare of large numbers of Canadians are threatened. An unexpected, serious shortage of essential commodities such as food or fuel provides one example of such contingencies-
If we think back to the energy crisis of a year ago, we will realize that now we have virtual nationalization of our energy. If we think of the possible emergencies that could arise regarding food, we realize that now we have the Canagrex legislation to deal with that problem. These are the kinds of emergency powers that are ominous for all Canadians, and they need to be dealt with by legislation that will explain clearly what the government is up to with this emergency powers legislation.


Mr. Jim Schroder (Parliamentary Secretary to Minister of the Environment and Minister of State for Science and Technology):: Mr. Speaker, the hon. member already knows the answer to his question, and he knew it before he asked it. The Crown prerogative to which he refers is, according to Dicey:
-both historically and as a matter of actual fact, nothing else than the residue of discretionary authority which in any given time is legally left in the hands of the Crown.
The prerogative amounts to no more than those powers that Parliament and the courts continue to allow the Crown to exercise alone. What remains of the Crown prerogative is a residue of royal discretionary authority following centuries of evolution during which the struggle for the supremacy of parliament was conducted.
Prerogative powers are non-statutory in origin and are always liable to be superseded by legislation. Indeed, the
Adjournment Debate
Crown prerogative exists as a source of legal power in the hands of the executive only to the extent that it has not been abrogated by statute.
Among its other uses, the Crown prerogative in Canada has often been relied on to change or clarify internal working relationships among federal departments and agencies. It has long been established that the prime minister of the day may assign responsibilities to Her Majesty's ministers and alter these to suit changing circumstances, provided this is done in a way which accords with duties specified by legislation.
A recent example of this use of the prerogative was the passage of Emergency Planning Order P.C. 1981-1305. As the hon. member well knows, the order assigns only planning responsibilities to federal ministers in order to enhance our over-all standard of emergency preparedness, and does not purport to convey any new powers to ministers or anyone else.
However, if I understand the hon. member correctly, he is concerned about an allegedly unlimited prerogative power being used to implement the emergency plans called for in the planning order in any time of proclaimed emergency.
In this context, Mr. Speaker, I can only repeat what the minister responsible for emergency planning has already indicated, namely, that no such unlimited prerogative power exists. Some limited authority does remain in the Crown prerogative as it might pertain to great national emergencies, but it is an enormous overstatement to characterize this residue as "unlimited".


NATIONAL PARKS-BANFF-PROPOSED INCREASE IN LAND RENTS. (B) RENTS CHARGED TO PARK EMPLOYEES
Gordon Edward Taylor: Mr. Speaker, the motto of this Liberal government in Ottawa is, "Don't do as I do, do as I say". The government is capping the wages of its employees and then taking much or all of the increase back by increasing land and accommodation rentals. The government is asking industry to keep prices down, and then increasing the rentals of land and accommodation for its employees. Employees' wages at Banff National Park have been capped at 6 per cent and 5 per cent; at the same time accommodation rentals are being increased for those employees by 15 per cent to 40 per cent, and higher. The continual increasing of prices induces inflation, makes it necessary for employees to bargain for higher wages in order to make both ends meet. The government should practise what it preaches, namely keep prices down in order that wages will not have to rise. But in the case of Banff, and I understand in other national parks, the government is keeping wages down, but putting up the rentals.
In Banff, for instance, in the case of one employee the minister himself stated in a letter, "your payments now constitute 13.1 per cent of your gross income from Parks Canada". The minister also stated in the letter that they have prepared a proposal which would allow the establishment of rents in Banff at approximately 10 per cent above the average

July 20, 1982
Adjournment Debate
rent charged at bordering parks. Big deal! Why should the rents be 10 per cent higher for the employees in Banff who must live there than it is for those who live outside the park? Why must they be penalized because they live close to a place like Calgary where rentals have skyrocketed?
When the minister was answering my question in the House he appeared to be completely confused; he was confusing staff accommodation with commercial accommodation. Did he do that deliberately so that he would not have to answer my question? The minister goes on to say in the letter that the rents are below those charged in the eastern part of the country. I question this very much and I ask him to publish the rentals in national parks in Eastern Canada.
The rental increase of which parks employees have been notified takes effect August 1 this year. The majority of the people there received a $100 rental increase on January 1, 1982, and they are now faced with another $100 increase on August 1. In one case this constitutes a 66 per cent increase.
When an employee is asked to accept wage controls, surely he should be able to expect some rental control as well, particularly when the landlord is the Government of Canada. How can a family live with a 66 per cent increase in rent and receive only a 6 per cent increase in salary the same year? This cannot be done without the family lowering its standard of living or borrowing money. The minister should try it, then he would not be quite so arrogant with his employees.
In the case of another employee, the rent increase required all of his 11.75 per cent wage increase. With the wage restraint of 6 per cent employees will be paying back to Parks Canada-more specifically to Revenue Canada-an even larger portion of their wages. This will leave them less for essentials like food and clothing. Is this being fair to the employees who live in Banff? In other words, this government is fighting inflation on the backs of its employees. It restrains the wages but grabs every cent it can get through rentals and taxes. Surely Crown-owned accommodation should be setting an example to industry if it expects industry to keep its prices down.
The government refuses to recognize the limited land base in Banff, deliberately limited by Parks Canada; and the explosive commercial growth and recreational accommodation demands which have combined to create a situation where affordable alternatives, such as purchasing a building lot or house, or renting suitable private accommodation, is simply beyond the means of park employees.
A survey by the Alberta Government released in February, 1982 indicates a snapshot of prices to enable comparisons between 14 locations. I refer to the item "shelter". Edmonton was set at 100 per cent, and in comparison Banff was 130 per cent; Calgary was 117 per cent, even with all of its skyrocketing prices; Medicine Hat was 72 per cent; Red Deer 101 per cent; Lethbridge 80 per cent; and the Crowsnest municipality 67 per cent. I ask hon. members to note well that Banff was the highest of the 14 places, which even included Fort McMur-ray, at 124 per cent, and Calgary, both of which were thriving until the introduction of the National Energy Program. This
clearly shows the injustice that Parks Canada has and is imposing upon its employees in Banff.
Now with restraint, wage increases are negated by rent increases. In some cases, Parks Canada will take back more than it is giving in the 6 per cent or 5 per cent increases. Employees have virtually been penalized by a government which should be setting an example. Parks Canada has been treating the employees, particularly those in low and medium-wage brackets in Banff, in a servile, arrogant way. Perhaps that is why there is such a heavy turnover of employees in the Banff National Park.
The very least the government should do is to cut the rental accommodation increases to 6 per cent. If it does not do this, it will simply prove that the government wants its pound of flesh irrespective of what it does to inflation and irrespective to what it does to lives of human beings who are working for the betterment of Canada as employees of the Banff National Park.
What I have said about the treatment of the average employee by Parks Canada is even excelled by the gigantic increases imposed by Parks Canada on the commercial and business places in Banff. The Government of Canada has been a government without a heart as far as the Banff area is concerned. Is the government proud of its motto "Don't do as I do. Do as I say"?


James Duncan Schroder: Mr. Speaker, may I reply to the hon. member by assuring him that there will be no general increase in the land rents for Banff for 1982 or 1983. The rents which were set in 1980, are based upon a percentage of the 1979 land value and will remain constant for ten years. The lessees will, for example, in 1989 be paying rent based on this 1979 land value.
The 1980 to 1990 rent is based on percentage of the independently appraised land value. The percentage capitalization rate used is 6 per cent and this rate has remained unchanged for the past two decades.
While the capitalization rate has remained constant, land values in most of the national parks have risen over the past decade, with the result that rents have risen proportionately. Recognizing the needs of residents who are required to live in the parks, the minister offered reduced rents to residential lessees starting in September, 1980. Lessees whose premises are occupied by persons who qualify as eligible residents pay a rent of one-half of 1 per cent of the land value, to a maximum of $250 per year. The hon. member should note that this represents a substantial rent reduction from 6 per cent of land value.
Residential lessees are not the only leaseholders who have benefited from reduced rents. In September, 1980, cottage lessees were offered a rental rate that was reduced from 6 per cent of the appraised land value to 4 per cent. The cottage
July 20, 1982

lessees were offered the choice of phasing in this 4 per cent of the appraised land value over the ten-year period.
The commercial leaseholders have not received the benefits of reduced rents as it is our view and that of Treasury Board that commercial lessees who gain from the private use of public land should pay an economic rent. While the basis of the commercial rent is 6 per cent of the appraised value of the land, the lessee is given the option of phasing in this amount in equal payments over the ten-year rental period. The lessee also has the option of negotiating a rent based on a percentage of the annual gross revenue.
I would like to point out that 6 per cent of the appraised land value has been the basis of rent determination for a number of years. This represents a low return on the use of the Crown's asset and is, in fact, below the capitalization rates charged by other government departments.
The issue of land rents in Banff is quite separate from the issue of rents charged to Crown employees for Crown-owned staff accommodation, such as for a house in a national park. These rates are controlled by Treasury Board and are based upon local market conditions as calculated by CMEIC.
Although Parks Canada can regulate the rents to a limited extent, depending upon several variables concerning the type of accommodation, it still must stay within these parameters. It can only set the rents according to a prescribed schedule given to it by Treasury Board.


CANADA POST CORPORATION-NUMBER OF PROVINCES SERVED. (B) PROVISION OF ONE-DAY SERVICE
William Hunter (Bill) McKnight: Mr. Speaker, I rise tonight during the adjournment debate to continue with a question I asked on July 15, 1982 of the minister responsible for Canada Post. The reason for my question at that time was that Canada Post, with many shiny brochures and much glossy paper, announced a new postal service called "Priority Post".
Priority Post consists of two methods. There is Priority Post programmed service which means that a person can have mail picked up on a regular basis, and it can be delivered on a regular basis for those companies and corporations which have a need for that type of service. There is also Priority Post "D" service.
I found it very strange that a Canada Post letter read:
Priority Post . . . now provides next day delivery for your time-sensitive items to major Canadian cities and many countries 'round the world-
It was not too long ago when we expected that. It was called "service"; service by the post office department. It was not too long ago that businessmen and women and operators in cities expected their mail to be delivered when they put it in mailboxes. They expected it to arrive the next day in cities in Canada. In some of those cities, thousands of miles apart, it arrived the next day. That was expected. It was not something special. That is the way they did business.
Adjournment Debate
After a few years the post office came along with those nice red, white and blue mailboxes. They were special mailboxes. If a person mailed a letter by a certain time, it arrived the next day. It was called "next day delivery". That was all done for the price of a stamp. At the time it was 6 cents and then 12 cents. It was expected. Now we have Priority Post which says that it can give next day delivery up to 33 pounds; that it can get it there on time every time.
The reason for my question was that this was Canada Post, which means all of Canada. It means every part of Canada should have access to this type of service. We all pay the same postal rates and the same taxes. The letter continued:
Just bring your important material to a post office counter ... fill in the distinctive Priority Post label provided, for next day "right to the door" delivery in Halifax, Quebec City, Montreal, Ottawa, Toronto, London, Winnipeg, Calgary, Edmonton and Vancouver.
But Canadians cannot use the service in Fredericton, St. John's, Charlottetown, Moncton, Regina, Saskatoon, Prince Albert, Whitehorse or Yellowknife. This is why we have a problem in the country understanding the directions of the government when it comes to serving all Canadians equally or serving them as they should be served. This is why I asked my question.
I find a great deal of difficulty accepting the same 72 per cent increase in the price of postage stamps in my part of Canada but not receiving the same service. I also find it strange that after I asked my question on July 15 I received a communication from Priority Post dated July 20, 1982, which in part read:
"D" service is currently being announced by direct mail to designated centres.
Additional expansion of "D" in Fall 1982.
Why was that information not made available before I asked my question? Why was I not told that Canada Post was considering providing the service to the cities of Regina, Saskatoon, Prince Albert, North Battleford, St. John's, Moncton and Charlottetown? Why was it not explained. I believe there was no intention on the part of Canada Post to serve those other cities in four provinces and two territories. That is what bothers Canadians about Canada Post. Right now in some parts of Canada we understand what other Canadians are going through with the withdrawal of Saturday delivery and Saturday morning closings.
In 1978 a Liberal member, Mr. Mclsaac, who represented Battleford-Kindersley, which is now in my riding, complained to the government about the closing of a post office on Saturday in Rosetown, Saskatchewan. The closure of post offices on Saturday is not a new phenomenon. That is why it is repugnant to people in my part of Canada, as well as to other Canadians, to be treated unequally and not have the same access to Canada Post and to Priority Post and Priority Class D service. I am sure that the parliamentary Secretary to the Minister of the Environment (Mr. Schroder) is quite familiar with Canada Post. I await his answer.

July 20, 1982
Adjournment Debate


James Duncan Schroder: Mr. Speaker, the hon. member's question suggests that the availability of Priority Post in only six provinces automatically excludes the remaining four from the universal postal service. Such a conclusion is based on fala-cious reasoning and shows no understanding of corporate business marketing methods.
Let me explain the expansion of the service to which the hon. member refers. On July 5 of this year, Canada Post launched the first phase of an important expansion of its courier service called Priority Post. Until that date, this special service was available between the cities of Vancouver, Calgary, Edmonton and Winnipeg, or between London, Toronto, Montreal and Ottawa. The new expansion now makes it possible to send material under 15 kilograms to any of the above cities by Priority Post, as well as to Halifax and Quebec. In addition, several new Priority Post counters were opened in each location.
The hon. member will be pleased that Canada Post has plans, beginning this fall, to provide for another substantial expansion. The next phase of the expansion will see Priority Post being available to all 10 provinces.
Instead of reproaching Canada Post for ignoring some provinces and favouring others, I think the hon. member should compliment Canada Post for its determination to directly challenge some of its more formidable competitors, the
private couriers. The expansion of Priority Post demonstrates that Canada Post can operate boldly, with flair and in a determined manner calculated to maximize its revenues while providing needed and superb premium service to Canadian business.
Canada Post expansion across Canada of this invaluable new service represents a phasing in by stages, a phasing in of a new service based on calculated, sound business practices. Soon Priority Post will be available in all Canadian provinces, but not before Canada Post is ready.
May I remind the hon. member that he has accused the Post Office of ignoring four of the ten provinces. I have already explained this falacious notion. The hon. member, however, did not address himself to Canada's two territories; the Yukon and the Northwest Territories. At present, let me remind the House that Canada Post has no plans to expand to the two territories, but when demand in the Yukon and the Northwest Territories reaches a point which makes Priority Post a viable business enterprise there, Canada Post certainly will consider introducing it there. Canada Post is cognizant of the postal needs of all Canadians.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow afternoon at two o'clock.
At 10.29 p.m., the House adjourned, without question put, pursuant to Standing Order.

Wednesday, July 21, 1982