1982-10-27

OFFICIAL REPORT


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31 Elizabeth II

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Published under authority of the Speaker of the House of Commons by the Queen's Printer for Canada
Available from Canadian Government Publishing Centre, Supply and Services Canada, Hull, Quebec, Canada K1A 0S9.
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Wednesday, October 27, 1982

Madam Speaker:: I have the honour to inform the House that the Clerk of the House has received from the Chief Electoral Officer certificates of the election and return of the following members:
Of Mrs. Jennifer Cossitt, for the electoral district of Leeds-Grenville.
Of Miss Lynn McDonald, for the electoral district of Broadview-Greenwood.
Of Mr. John MacDougall, for the electoral district of Timiskaming.


NEW MEMBERS INTRODUCED
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Jennifer Cossitt, Member for the electoral district of Leeds-Grenville, introduced by the Right Hon. Joe Clark and the Hon. Walter Baker.
Lynn McDonald, Member for the electoral district of Broadview-Greenwood, introduced by the Hon. Edward Broadbent and Mr. Neil Young.
John MacDougall, Member for the electoral district of Timiskaming, introduced by the Right Hon. Joe Clark and Mr. Paul Dick.

Mr. Gordon Taylor (Bow River):: Madam Speaker, 1 rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas the work stoppage on the West Coast is paralysing the grain industry in western Canada and actually crippling the economy throughout Canada, I move, seconded by the Hon. Member for Crowfoot (Mr. Malone):
That the Government order everyone involved in the West Coast work stoppage back to work at once and back to the bargaining table immediately and,
if agreement is not reached in 90 days, the matter should be brought back to Parliament for appropriate action.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


HOSTING OF 1986 WORLD CUP SOCCER CHAMPIONSHIP TOURNAMENT
Mr. Joe Reid (St. Catharines):: Madam Speaker, the withdrawal of Columbia from the hosting of the 1986 World Cup Soccer Championship opens the way for Canada to focus world spotlight on this nation in a favourable way, and to promote a sport experiencing phenomenal growth here at home and internationally recognized as one permitting mass participation with significant benefits to the health and fitness of all those who do participate. I therefore move, under the provisions of Standing Order 43, seconded by the Hon. Member for Erie (Mr. Fretz):
That the Government of Canada make every effort to assist and co-operate with the Canadian Soccer Association in bringing to Canada the 1986 World Soccer Cup Championship Tournament.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Madam Speaker:: The Hon. Member for Leeds-Grenville (Mrs. Cossitt).


Some Hon. Members:: Hear, hear!


UNEMPLOYMENT
Mrs. Jennifer Cossitt (Leeds-Grenville):: Madam Speaker, I rise on a matter of urgent and pressing necessity. Given that a number of my constituents who have never before been unemployed are now being laid off in record numbers in Leeds-

October 27, 1982
Grenville, I move, seconded by the Hon. Member for Nepean-Carleton (Mr. Baker):
That the Prime Minister respond immediately to this devastating, deplorable and tragic situation by introducing concrete, specific employment measures to halt this disastrous trend of increasing unemployment and also to put the people of Leeds-Grenville and this nation back to work.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


LABOUR CONDITIONS
Mr. Les Benjamin (Regina West):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the adverse effect the lock-out in the British Columbia ports is having on many sectors of an economy that is already depressed, we welcome the news that the employer's association and the longshoremen are resuming negotiations this afternoon. I therefore move, seconded by the Hon. Member for Vancouver East (Mrs. Mitchell):
That this House calls upon the two parties to carry out continuous negotiations un*il a settlement is reached.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Jesse P. Flis (Parkdale-High Park):: Madam Speaker, I rise, seeking the attention of all Hon. Members of this House, on a matter of urgent and pressing necessity under the terms of Standing Order 43. Recent events in Poland have been shocking. On October 8, 1982, the Polish Government de-legalized the Solidarity Union in Poland, a union which received widespread support from the Polish people. In view of Canada's strong support of major international human rights agreements, I move, seconded by the Hon. Member for Edmonton North (Mr. Paproski) and the Hon. Member for Dauphin (Mr. Lewycky):
That this House express its strong concern and indignation at the action of the Polish Government with regard to the de-legalizing of the Solidarity Union Movement.


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


Some Hon. Members:: Agreed.


Jesse Philip Flis: I would just like to take this opportunity to thank all three parties in this Parliament for supporting this motion. Two years ago the whole world rejoiced as the Polish government recognized the independent union, Solidarity. This month people around the world were shocked because Solidarity unions were delegalized. Mr. Walesa is still interned. Many of the Solidarity members are still interned. The country is still under martial law.
I know, Madam Speaker, it is not up to this Parliament to tell the Parliament of Poland what to legislate and what not to legislate, but it is the duty of this Parliament to express our strong objections when another country signs agreements on protecting people's human rights and then does not live up to these agreements. This is why, Madam Speaker, I thank all parties for supporting this motion.


Hon. John C. Crosbie (St. John's West):: I rise, Madam Speaker, to support the motion and, of course, it is with a feeling of regret that it is only a motion moved by a government backbencher and seconded by backbenchers on this side. We lament and regret the total lack of action by the Government of Canada as represented by the Prime Minister (Mr. Trudeau) in connection with the dissolution of Solidarity by the Polish government several weeks ago, and the failure to express any opposition to it.
I refer, Madam Speaker, to a release that was issued by the Government on February 23, 1982, in connection with the Polish situation. After applying some very weak sanctions to the Polish government because of the situation in Poland, ministers urged the Polish government to live up to its declared intention to re-establish civil liberties. They called upon the Polish authorities to end the state of martial law. They called upon the Polish government to release those arrested. They called upon the Polish government to restore immediately a dialogue with the Church and Solidarity.
Since the government made those pious statements it has taken no action to try to encourage the Polish government to take any of those steps. None of those steps have been taken, to the regret of us on this side of the House who feel that much sterner sanctions should have been taken. Now we have a situation where, despite these pious platitudes by the Government of Canada and the Secretary of State for External Affairs (Mr. MacEachen), not only are civil liberties not re-established, not only is there no dialogue between the Church and Solidarity, but Solidarity is abolished. Lech Walesa is still in prison, martial law is still in effect, and our government takes no further steps to indicate our disapproval of the Polish authorities for ignoring their obligations under the Helsinki Agreement.
We have already made suggestions that some more effective sanctions should have been taken, so we support this resolu-
October 27, 1982

tion. We regret that the resolution is not one that apparently finds favour with the government in the sense that it is going to take any action to express abhorrence or to impose further sanctions that might be effective in encouraging the Polish government to re-establish civil liberties in that country.


Mr. Laverne Lewycky (Dauphin):: Madam Speaker, the New Democratic Party welcomes this opportunity to support this very positive motion. I think it indicates that our Parliament is concerned. We want to demonstrate this concern.
We are grateful that all three parties have supported this motion. I think we do have a moral responsibility. There are many Canadians who have friends and relatives in Poland, and they are legitimately concerned. Therefore, for our part we want to express our wholehearted support for this motion.


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


Some Hon. Members:: Agreed.


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Motion agreed to.

Mr. Girve Fretz (Erie):: Madam Speaker, whereas the rate of unemployment in the constituency of Erie is currently at an intolerably high level, and the number of unemployment insurance claimants has dramatically risen in the communities of Port Colborne and Erie by 112 per cent since October, 1981, due to the failure of the Liberal Government's policy to provide stimulus to the economy, 1 move, seconded by the Hon. Member for St. Catharines (Mr. Reid):
That the Liberal Government immediately formulate an industrial strategy designed to increase employment and stimulate the economy, thereby helping to ease the suffering of those who have been victimized by the Government's failure to take this action in the past.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


PADLOCKING OF BUSINESS DOORS
Mr. Fred King (Okanagan-Similkameen):: Madam Speaker, the Prime Minister, in his third address, made a direct appeal to bankers, who see small business men struggling to keep the doors open, to ask themselves what will be served by a bailiffs padlock. I therefore move, seconded by the Hon. Member for Prince George-Bulkley Valley (Mr. McCuish):
That, taking note that at this very moment officials of Revenue Canada and of the Federal Business Development Bank are in the process of padlocking business doors in Okanagan-Similkameen and throughout Canada, this House enjoins the Prime Minister and the Government of Canada to instruct officials of
Revenue Canada, the Federal Business Development Bank, and other agencies of government, to heed the Prime Minister's admonition to, and I quote the Prime Minister, "Take a chance on a Canadian."


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


UNEMPLOYMENT
Mr. Blaine A. Thacker (Lethbridge-Foothills):: Madam Speaker, between 1951 and 1966 seven million Canadians were born and are generally known as the "baby boom". The Liberal Government has known about them for years, yet the National Energy Program and all of the budgets since 1980 have destroyed the business climate and reduced the number of jobs for them to fill. As a result, youth unemployment is now 21 per cent. Therefore I move, seconded by the Hon. Member for Don Valley West (Mr. Bosley):
That the Liberal Government and Liberal Party stand condemned for their arrogant and callous disregard for the future of our young Canadians.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Bob Ogle (Saskatoon East):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity.
The Inter-American Development Bank will soon be voting on an $18 million loan to Guatemala. As a member of the Bank, Canada is able to vote on that loan. In Guatemala in recent months human rights violations have increased, and I specifically cite the horrifying increase in extra-judicial executions. In view of this fact I move, seconded by the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie):
That the Minister of External Affairs instruct the Canadian Executive Director at the Inter-American Development Bank to vote against the granting of the proposed $18 million loan to Guatemala.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.

October 27, 1982
Oral Questions EMPLOYMENT


APPOINTMENT OF NEW MINISTER REQUESTED
Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, on Monday of this week a press release was issued by the office of the Minister of Employment and Immigration designating the week of November 1 to November 7 as Canada Career Week.
It is sad that on a day when the over-all level of unemployment has passed the 1.25 million mark, when the number of discouraged Canadians who have given up even looking for work is estimated to have risen some 95 per cent on a year-to-year-basis, when the vast majority of the potential work force of Canada is thinking not in terms of a career but just in terms of a job, a pay cheque-anything-one really must condemn the Minister's slip out of reality, passing through his own private looking-glass to the happier, more pleasant domains of the land of make-believe.
I therefore move, seconded by the Hon. Member for Timis-kaming (Mr. MacDougall):
That the Right Hon. Prime Minister be requested to bring in, in his place, a minister of employment and immigration who is at least aware of what is going on in the country around him.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is directed to the Prime Minister who will be aware that over the next nine months over 600,000 Canadians will be exhausting their unemployment insurance benefits and be forced to go on welfare or take other extreme action. The Prime Minister will know that today, and every day this month, 175 Canadians a day are already being forced to turn to welfare because their unemployment insurance benefits have run out.
The Prime Minister has recently spoken of co-operation. He would know about the all-party report on federal-provincial fiscal relations in Canada. In the spirit of co-operation and of helping Canadians in need, will the Prime Minister agree now to accept the all-party committee recommendations, first, to create a special job-creation fund for those provinces where the welfare rolls are higher than average and, second, to increase
the federal government's contribution to the Canada Assistance Plan in those provinces?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, the Leader of the Opposition has drawn attention to a very serious problem affecting the country, the economic performance and, certainly, the welfare of thousands of people. The Government has been addressing this question very seriously in the past weeks. The Minister of Employment and Immigration and the Minister of Finance particularly have enjoined the Government to act in this direction.
I cannot assure the Leader of the Opposition that we will follow exactly the ways recommended by the all-party committee, but I do want to assure him that that problem will be addressed no later than today by the Minister of Finance and, on subsequent occasions, by the Minister of Employment and Immigration.


Charles Joseph Clark: Madam Speaker, it is the Prime Minister who is in the practice of drawing attention to problems. I have drawn attention to two specific solutions that were proposed unanimously by an all-party committee of this House. It is time that the Prime Minister of Canada, instead of simply outlining the problems of the country, began to address specific solutions to those problems.


FINANCE
Charles Joseph Clark: Let me
make another specific, constructive proposal to the Prime Minister and see if he will respond to it. The Prime Minister will know that the budget provisions of his Government have driven billions of dollars of investment out of the country and have caused the loss of hundreds of thousands of jobs. In light of the number of jobs lost to his policies, will the Prime Minister agree to change the budget provisions in his Government's budget respecting capital cost allowances as a means of generating jobs and growth in the country?


Pierre Elliott Trudeau: Madam Speaker, the Right Hon. Leader of the Opposition misunderstood my answer. I did not intend merely to indicate that I was aware of the problems of which the Leader of the Opposition is aware. I did say, it seems to me rather clearly, that the Minister of Finance and the Minister of Employment and Immigration would be bringing forward solutions to those problems. I pointed out that they might not be exactly the ones recommended by the Leader of the Opposition but, as he knows, there will be an occasion to debate those solutions. I can assure him that, if his solutions are better than ours, we will adopt them and we will be very happy for his co-operation.
October 27, 1982

In so far as the other question about budgetary measures is concerned, I would just ask the Leader of the Opposition to wait for a few minutes. The Minister of Finance will be making a statement this afternoon bearing on the economy and he may find some way of addressing some of the problems about which the Hon. Leader of the Opposition is concerned.


THE ECONOMY
Charles Joseph Clark: Madam Speaker, I have a question that is very clearly in the Prime Minister's field, and he cannot leave it up to someone else to answer for him. He will have to take his reponsibilities as leader of the government in this House.
The Prime Minister has mentioned the need for Canadians to work together, and I would like to know whether he is still opposed to the unanimous request by the provinces to have a first ministers' conference on the economy.


Pierre Elliott Trudeau: No, Madam Speaker, I am not opposed to such a conference being held, but I must say that this request by the provinces has not been repeated lately, on the contrary. For instance, the Premier of Ontario, if I understood correctly the tenor of yesterday's telegram, is proposing bilateral meetings with his ministers and members of his government. Some of these meetings have already taken place. The House is aware that the Minister of Employment and Immigration has also scheduled several meetings with his provincial counterparts, so that together we can deal with the problem of job creation, especially in sectors where unemployment is very high. The House is aware of this, and a number of provincial ministers have already commented that they were pleased with the co-operation that had already begun to materialize.


MINES AND MINING
Mr. John MacDougall (Timiskaming):: Madam Speaker, my first question in the House is directed to the Minister of State for Mines. I would ask the Minister what hope or encouragement she could hold out for the 390 miners at the Adams Mine in Kirkland Lake who will be laid off for the second time this year on Friday, and can look forward to only two paycheques between now and what promises to be not a very Merry Christmas.
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Hon. Judy Erola (Minister of State (Mines)):: Madam Speaker, while I sympathize with the plight of the miners, I would remind the Hon. Member that this is a temporary layoff and that they will be off work, as I understand it, for just that short period before Christmas. There are a great many miners in Canada who are facing much longer lay-offs than the ones at Adams Mine.


Some Hon. Members:: Shame.


PROCESSING OF UNEMPLOYMENT INSURANCE CLAIMS
John Alexander Frances MacDougall: Madam Speaker, perhaps I could ask the Minister if she will talk to her colleague, the "Minister of Unemployment", to ensure that these victims of Government policy can rely on prompt and effective handling of their unemployment insurance claims rather than just being more numbers in the computer.


Judith A. Erola: Madam Speaker, I can assure the Hon. Member that there is a special team in place to handle all these claims and that the claims are being handled faster than they ever have been before. We intend to speed up that process.


INCOME TAX
Hon. Edward Broadbent (Oshawa):: Madam Speaker, I have a question for the new Minister of Finance and I express the hope, I am sure of Hon. Members on all sides of the House, that we will get better answers than we got from his predecessor.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Since the House last met in August, we have lost no fewer than 100,000 jobs from the Canadian economy. Considering that the Government in last fall's budget cut the taxes of upper income Canadians by some 9 per cent, and considering that the Prime Minister went on television recently and talked to Canadians about the need for sharing and caring, my question to the Minister of Finance is this: will the Government now practise what the Prime Minister preaches, by bringing in a surtax on Canadians who can afford to pay it, in order to obtain millions of dollars to put back to work thousands of Canadians who would like jobs?


Hon. Marc Lalonde (Minister of Finance):: Madam Speaker, my first wish would be to provide the Hon. Member with as good and as competent answers as my predecessor gave him.


Some Hon. Members:: Hear, hear!


Marc Lalonde: In reply to his question I would answer that I have read his proposals in that regard in a speech which he made recently in Hamilton; I have examined them. I will take

October 27, 1982
Oral Questions
these as a suggestion that will be considered as part of the budget which I hope to introduce in the House in early 1983. I invite him to work hard at it again, because the analysis I have made seems to indicate that the figures he mentioned as being produced by that tax are barely half the amount he is talking about. I hope his research assistants and my officials can sit down and work out any discrepancies which there might be in his proposals, but generally I look forward to proposals from all sides of the House, having in mind the preparation of the next budget. I can assure him that I will not discard his proposals even if they come from a Member of the Socialist Party.


Some Hon. Members:: Oh, oh!


John Edward Broadbent: Madam Speaker, the only difference between this Minister and his predecessor when it comes to evasion is that at least this Minister smiles.


Some Hon. Members:: Oh, oh!


THE ECONOMY
John Edward Broadbent: Madam Speaker, my supplementary question is directed to the Prime Minister. In his address to the nation last week, the Prime Minister talked about trust and attitude, which everyone on this side of the House, and indeed the vast majority of Canadians, think are important at this time. Since the same Prime Minister about two years ago promised the people of Canada that his Government would produce for our nation what has been taken for granted by industrial nations in Europe for a long time, and by Japan for a long time, namely, an industrial strategy, and has not in those two years produced it, will the Prime Minister again implement his own call for trust by telling Canadians now that, by Christmas at the latest, the Government of Canada will produce an economic strategy for the long term for the nation?


Pierre Elliott Trudeau: Madam Speaker, the Hon. Member talks about an industrial strategy and an economic strategy. I believe his question related to an economic strategy. Yes, I can assure him that my statements on television last week were meant to set the background and hopefully the mood for precisely that. Already today the Minister of Finance has decided to take the initiative and begin to lay the groundwork and give precision to the elements of such an economic strategy.


REQUEST THAT MANUFACTURING STRATEGY BE PLACED BEFORE PARLIAMENT
John Edward Broadbent: Madam Speaker, I will return to the term which the Prime Minister used in the past, as indeed we have, namely, an industrial strategy. More
specifically, he talked in the City of Windsor about a manufacturing strategy for the country as a whole. Will the Prime Minister give his unequivocal assurance that by Christmas the Government of Canada will have before Parliament a manufacturing strategy for the nation which, for the first time, will have a time frame that is longer than the next election?


Pierre Elliott Trudeau: Madam Speaker, I want to indicate to the Hon. Leader of the New Democratic Party that an industrial strategy, in the sense that he is asking for, is something that cannot be given in one statement. I think there has been a misunderstanding which has been entertained for a long time on the thought that there can be one industrial strategy for Canada.
There is division of jurisdiction between the Federal and Provincial Governments. There are many industries in Canada-some in manufacturing, as the Hon. Member said, and some having to do with natural resources and with services. Therefore, I do not envisage that there ever could be one industrial strategy for Canada. There can be many and, indeed, the Government has been employed since the 1980 election in announcing many elements of that industrial strategy. The Minister of Transport, just to take one example, has already by his initiatives in the area of the Crow taken a very important step in the area of industrial strategy, in the area of transportation, and so it goes for all the other areas.


PRESENCE IN GALLERY OF HON. ROBERT TlfcBLE N'DAW, MINISTER OF ENERGY AND MINES, OF MALI
Madam Speaker:: I have the honour of drawing the attention of the House to the distinguished presence in our gallery of His Excellency Mr. Robert Tieble N'Daw, Minister of Energy and Mines, of Mali.


Some Hon. Members:: Hear, hear!


UNEMPLOYMENT INSURANCE
Hon. David Crombie (Rosedale):: Madam Speaker, my question is directed to the Minister of Employment and Immigration. It concerns a story which was published at noon today on CP Wire. The short paragraph which I wish to bring to the attention of the Minister and ask him to comment upon concerns unemployment insurance benefits. It reads:
Officials have said the Government cannot afford to carry that deficit indefinitely. Axworthy is said to be looking at various ways to cover it, including cuts in benefits-
October 27, 1982

I should like to give the Minister the opportunity to deny that part of the story and to assure the House that he and his Government have no intention of cutting unemployment insurance benefits.


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, I think the Hon. Member has been in politics long enough to know that he should not put much trust in unverified stories. I have not seen this particular article, but I can tell him that we certainly have no intention of cutting benefits. What we have been working on is a program to ensure that the unemployment insurance system continues to work as it has been working to provide basic income support for many Canadians who need it during these very difficult times. The Minister of Finance will be issuing a statement later today which will explain how the Government intends to go about doing that. I can tell this House that the unemployment insurance system is something which this Government is here to protect and to continue to maintain as a way of providing that security for Canadians.


ASSURANCE SOUGHT ON GOVERNMENT POLICY
David Edward Crombie: Let me ask a short supplementary for assurance, Madam Speaker. I am aware, as all of us are, of the strain which the fund is under, and we are going to be listening with some anticipation to what the Minister of Finance will be saying later on with respect to the fund. 1 want it clearly understood from the Minister that there is no policy under consideration now or in the foreseeable future in the Minister's understanding that would involve a cut in insurance benefits.


Lloyd Axworthy: Madam Speaker, I will just repeat what I have said. We are here to protect and maintain the system. In fact we have been able to use the unemployment insurance system to provide a number of very creative initiatives in job creation and work sharing. We now have over 170,000 people involved in work-sharing programs through UIC, which shows that we are broadening the use of the system, and not trying to reduce it.


THE ECONOMY
Hon. Roch La Salle (Joliette):: Madam Speaker, my question is also directed to the new Minister of Finance. The minister knows as well as I do what the unemployment rate is
Oral Questions
in the province of Quebec. He knows that the number of unemployed workers is gradually reaching the half-million mark, and in the circumstances, and also considering the fact that relations between the two governments have been less than satisfactory during the past twelve months, may I ask the Minister of Finance whether he firmly intends to restore relations with the Quebec ministers responsible for economy-oriented projects, so that both governments can work together in order to achieve what is best for Quebec?


Marc Lalonde: Madam Speaker, it is not up to us to take further steps in order to restore relations. The Prime Minister, myself and my colleagues have repeatedly made it clear that the door was open, that we are prepared to co-operate with the Quebec government and Quebec authorities, to make the joint effort required on the part of both governments in order to remedy the unemployment problem and stimulate the Quebec economy. There is not one minister in this House who has refused to co-operate, and I would ask the hon. member to take note of the fact that the Government of Canada and the federal ministers in this House have always been prepared to co-operate with the government of Quebec. As for the few incidents which may have taken place, I think that if my hon. colleague would take the trouble to check these very carefully, he will realize that generally speaking, any refusal to co-operate did not come from the federal government.


REQUEST THAT CO-OPERATION BE ESTABLISHED WITH QUEBEC
Roch La Salle: Madam Speaker, I have a supplementary, and regarding the minister's suggestion, I would like to remind him that not long ago, the new Minister of Energy, Mines and Resources was quite categorical in a statement to his Quebec counterpart regarding payment of the $200 million in the Laprade affair, saying that if Quebec did not reach a decision, he would proceed unilaterally to allocate these funds. I do not call that co-operation. My question may be similar to the first one: Can the Minister of Finance give us the assurance today-and I think this is very important to Quebecers-that he will take steps to achieve co-operation between both governments and that provincial priorities which are not necessarily incompatible, and I am thinking of job creation objectives, be given due consideration, insofar as doing so is not incompatible with the philosophy of the federal system?


Marc Lalonde: Madam Speaker, I can assure my hon. colleague that that would be the case and I have no trouble doing so. However, regarding the matter of the Laprade fund I would remind him that this fund was formed by the Canadian government which took the initiative

October 27, 1982
Oral Questions
of setting aside $200 million to be used in assisting this area in Quebec's heartland, when the heavy water plant we had started to build had to be abandoned because of a drop in demand for heavy water, and the Quebec government decided not to proceed with the nuclear energy project. So the plant was abandoned because there was no demand for heavy water, and subsequently the Canadian government set aside $200 million to help the area in question. I would like to point out that for three or four years we have been ready to discuss the matter and to have consultations, and it was impossible to reach an agreement quickly. In any case, the fund was set aside for the benefit of the people of the area, and the gover-ment of Canada will decide how its own funds will be spent for the benefit of the area, and my colleague, the Minister of Energy, Mines and Resources is looking into this matter at the present time. We already allocated nearly $10 million from the fund a few months ago, and my colleague intends to proceed quickly with further allocations in the months to come. This may be done in consultation, there is nothing against that, but I would like to make it clear that the Minister of Energy, Mines and Resources and the government of Canada will decide how these funds are to be allocated.


FORESTRY
Mr. Lyle S. Kristiansen (Kootenay West):: Madam Speaker, my question is addressed to our new super star in waiting, the Minister of State for Economic Development. With our number one export industry, the forest industry, now operating at less than two-thirds of capacity across Canada with over 30 per cent of forest workers unemployed, and in view of the government's self-admitted failure regarding the Employment Bridging Assistance Program which has in B.C., for example, created only 15 per cent of the promised 10,000 jobs, what new programs, if any, does the Minister and the Government now have to get forestry workers through this winter, and what new policies does the Minister now propose to ensure that there is employment and needed forestry work done in the industry next spring to meet both Canada's wood supply shortages and future market expansion needs?


Hon. Donald J. Johnston (Minister of State for Economic Development and Minister of State for Science and Technology):: Madam Speaker, in these new responsibilities which I have assumed, Members may rest assured that the regional sensitivities of all areas of the country-and the Hon. Member refers particularly to his own-are under most serious consideration by all the Departments that can make a contribution within the area of economic development and within the Committee on Economic and Regional Development, of which I am the Chairman. With respect to specific programs, they will, of course, be announced from time to time, as they have been and will continue to be, by the Ministers who have specific responsibilities in these areas.


FOREIGN INVESTMENT REVIEW AGENCY
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, my question is for the new Minister of Industry, Trade and Commerce. Crown Zellerbach, the second-largest forest producer in Canada, is now being sold. This is the third major forest company controlled from the U.S. to be abandoned by a U.S. parent. The fire sale of U.S. companies operating in Canada appears to be the prelude to a collapse of the Canadian forest industry rather than a prelude to a period of recovery. Would the Minister investigate the loss of international marketing of Canadian forest products in Canada, and would he further be prepared to intervene through FIRA to investigate whether this sale of Crown Zellerbach is being undertaken in the best interest of Canadians?


Hon. Ed Lumley (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, I was just advised of this take-over this morning. As we all know, all foreign take-over applicants must go through the FIRA process. I will be discussing this matter with the FIRA officials in the next couple of days.
With respect to international marketing in forest products, the industry and the Government have made substantial progress in the last couple of years. My colleague, the new Minister of State for International Trade, and I will be working very closely together to expand international markets for Canadian forest products.


LABOUR CONDITIONS
Mr. Charles Mayer (Portage-Marquette):: Madam Speaker, my question is for the Minister of Labour. It concerns the work stoppage on the West Coast that has halted the exports of Canadian grain, sulphur, potash and coal. The Minister will know that in addition to the jobs lost in the port areas there are presently thousands of other Canadians who have lost their jobs. This situation unfortunately is at a time of record unemployment. First, does the Minister specifically think that the difficulties between labour and management justify the damage that is being done to the total economy? Second, how long is the Minister prepared to wait before the Government gets involved directly?


Hon.   Chas. L. Caccia@Minister of Labour: Madam Speaker, in reply to the Hon. Member's question, because of the concerns he expressed about the repercussions, not only on the incomes of the harbour workers' families, but also on the incomes of those in the affected industries, including the ones the hon. member mentioned, I sent a telex on Monday to the two parties involved urging them to reconvene their meetings
October 27, 1982

to try to resolve the dispute on their own. It is my understanding they are meeting in Vancouver this afternoon, and I hope that their efforts will lead to some positive results ending the dispute.


Charles James Mayer: Madam Speaker, we appreciate that, and it is my understanding that the parties are meeting at two o'clock Vancouver time, which is five o'clock Ottawa time. I would like to suggest to the Minister that talk is certainly not enough.


REQUEST THAT MINISTER ORDER RESUMPTION OF WORK
Charles James Mayer: Is the Minister prepared to get directly involved to the extent of instructing the parties to go back to work while the negotiations are under way? His lack of action, again at a time of record unemployment, is causing very serious damage to the total Canadian economy and especially to the western grain farmers. 1 would therefore urge the Minister to accept his responsibility as Minister of Labour and to become directly involved with this unfortunate dispute.


Hon. Chas L. Caccia (Minister of Labour):: Madam Speaker, perhaps the hon. member does not realize that a Commissioner was appointed in March of this year, that he consulted with both parties and produced a report in August this year, and that the two parties have exhausted all possible means available to themselves. 1 hope that, with good will and determination, the two sides can resolve the matter. If not, the only final recourse would be to bring the matter before Parliament.
 * *


EXTERNAL AFFAIRS
John Carnell Crosbie: Madam Speaker, my question is directed to the new Secretary of State for External Affairs. On February 23 of this year, the then Secretary of State for External Affairs made a belated and half-hearted statement on behalf of the Canadian Government in connection with the situation in Poland. He announced certain very minor sanctions that the Government was imposing because it objected to what had happened in Poland concerning the crackdown on Solidarity and the human rights abuses there. Among those, for example, a program of Canadi-an-Polish academic exchanges was suspended. Since that time none of the objectives set out by the Government in its release have been met.
I would like to ask the Secretary of State for External Affairs is the Government enforcing even those minor sanctions. Since these have been unsuccessful and the Polish Government has gone on to further violations of the Helsinki Accords to dissolve Solidarity legally, is the Government now planning further sanctions of a more meaningful nature? If so, what are those sanctions, and will the Government do more
Oral Questions
than have its backbenchers practise rhetoric concerning this situation?


Hon. Allan J. MacEachen (Deputy Prime Minister and Secretary of State for External Affairs):: Madam Speaker, I believe that the Canadian Government has been extremely outspoken about the plight of the Polish people who recently, as was indicated by the motion presented earlier, were deprived by law of the possibility of maintaining free trade unions. Certainly Solidarity was banished and we have protested that action, not only because it is at variance with the wishes of the Polish people but also because it is in total contradiction to the international obligations undertaken by the Government of Poland.
The Hon. Member asks whether we propose any further sanctions. I want to tell him that if in present circumstances there could be a concerted way by which additional pressure could be brought upon the Polish Government to bring about changes, then we would consider any such action; but in present circumstances it seems to me, in view of the turbulence which is accepted by the Government of Poland within its own country, and in view of the demonstrations by the Polish people which have been turned back by the Government, that the effect of additional sanctions in the field of exchanges would likely be very ineffective indeed. If the Hon. Member can produce a series of proposals which would have an important effect in changing the attitude of the Polish Government, then I would certainly be the first to consider them.


John Carnell Crosbie: Madam Speaker, the Minister's foreign policy is as clear, concise and effective as his financial policy was. I would refer him to my statements of March 24 and October 15 of this year for a concise program of action that he might take.


SALE OF GRAIN
John Carnell Crosbie: My supplementary question is as follows; the Prime Minister of this country gave implicit endorsement to what happened in Poland last December and early January, and the Government has done nothing effective since then. Specifically, will the Government renew the agreement entered into with the Polish Government which expires on December 21 and which provides extremely generous credit terms concerning the sale of grain to Poland? I understand that by December 21 we will be out approximately $1.25 billion under that agreement. Will the Government renew that agreement with these generous credit terms, or not? Will it take any action with respect to the quotas given Polish trawlers to take fish within our 200-mile economic zone, which is not required by treaty nor any other way, but given at the discretion of the Government? Will it do anything convincing at all? Will it act at all, or make decisions at all?


Allan Joseph MacEachen: Madam Speaker, the Hon. Member has asked whether a decision has been taken with respect to the provision of credit to Poland for the purchase of agricultural products. I must tell the hon. member
Oral Questions
that no decision has been taken on that point as of now, but i would certainly take the interests of the Canadian farmers into account before reaching a decision. I would take into account whether sanctions of that kind would have any effect on the Polish Government before I would adopt the rather simplistic proposals made by the Hon. Member, whose foreign policy in his new post as critic of external affairs is as turbulent and explosive as were his unsuccessful financial policies.


FISHERIES
Mr. Tom Siddon (Richmond-South Delta):: Madam Speaker, my question is directed to the Minister of Fisheries and Oceans. The Minister knows that British Columbia has been hit harder by unemployment than any other Province west of the Ottawa River and that the resulting economic hardship is particularly serious in the West Coast fishing industry. In his Final report to the Government, Commissioner Dr. Peter Pearse stated that his findings point inescapably to "deficiencies of federal government policy", and noted that "the cost of this disarray has been staggering". Dr. Pearse's report contained a host of innovative recommendations which he says are essential if the B.C. fishing industry is to be restored to good health. Will the Minister agree to refer Dr. Pearse's report immediately to the Standing Committee on Fisheries and Forestry so that Parliament may take decisive action on behalf of West Coast fishermen?


Hon. Pierre De Bane (Minister of Fisheries and Oceans):: Madam Speaker, I have had an opportunity to meet the commissioner, and Dr. Pearse and I had a long conversation. I intend to visit the west coast shortly to meet industry representatives and fishermen to discuss the recommendations and how they have been received. I hope that in a few months, in fact as soon as possible, I will be in a position to make my own recommendations to cabinet, and the government will then make its decisions.
However, Madam Speaker, I do not want to sit down before taking this first opportunity I have had to say a few words in praise of my predecessor, who brought about the extension of the 200-mile zone, which I feel is one of the Canadian government's greatest diplomatic achievements since the Second World War, and furthermore, if we look at the statistics for exports on the west coast since 1977, we see that remarkable progress has been made, thanks to my predecessor.


Thomas Edward Siddon: In other words, Madam Speaker, the Standing Committee on Fisheries and Forestry is not to have any opportunity to deliberate upon and make recommendations arising out of this report. 1 say, for shame!
October 27, 1982


BOYCOTT OF CANADIAN FISH PRODUCTS
Thomas Edward Siddon: Madam Speaker, my supplementary question to the same Minister deals with another factor which is jeopardizing the jobs of West Coast fishermen in the planned boycott against Canadian fish products in British and European markets. The Minister knows that this boycott is being promoted and supported by Canadian groups which do not seem to concern themselves with the economic plight of Canadian fishermen or their families. What steps has the Minister taken to prevent this boycott which is already damaging our international markets for Canadian fish?


Pierre De Bané: Madam Speaker, on the first point raised by the Hon. Member, I will tell him that it is not my custom to give instructions to parliamentary committees. If the Parliamentarians on all sides want to discuss an issue, this is their responsibility. I will not be giving them instructions.
With respect to the second question, the question of marketing, that will be among the priorities that I have set for myself during my tenure as Minister of Fisheries and Oceans. All that I hope is that I will see some consensus between the different players in that regard, and I expect the support of the Hon. Member.

[ Translation]


THE CONSTITUTION
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Madam
Speaker, my question is directed to the Secretary of State and it concerns federal assistance granted to minority groups in the case of appeals to the courts. We all know that since February 1978, the federal cabinet has been authorizing financial support for cases challenging provincial legislation as it concerns Sections 93 and 133 of the British North America Act. Since the Constitution Act, 1982 was passed, educational rights for members of official language minority groups have been governed by Section 23 of the Charter of Rights. Considering these facts, can the minister inform the House whether the government is prepared to expand its financial support so as to cover Section 23 of the Charter of Rights and Freedoms, in addition to Sections 93 and 133 of the British North America Act, in the case of appeals to the courts?


Hon. Serge Joyal (Secretary of State of Canada):: Madam Speaker, I wish to thank the member for Ottawa-Vanier for his question. 1 agree that this is one of the priorities the Department of the Secretary of State should consider. I have asked the people concerned to assess as soon as possible the


October 27, 1982

impact of the request formulated by the hon. member today, and I shall then be in a position to report to the House on the financial assistance to be provided and the accompanying conditions, so that Canadians who want to exercise their rights to equal access to French or English schools under the law can receive assistance from the Canadian government.


THE ECONOMY
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, my question is for the Prime Minister. The Prime Minister has spoken considerably about co-operation. I am sure he would know that the downturn in the automobile industry, the construction industry and many other industries has now settled to the point where it has affected the basic steel industry very dramatically.
Would the Prime Minister consider asking the provinces and the municipalities, in addition to his own ministries, what projects they could expect to go ahead with but have delayed as a result of economic conditions, and then meet with them and others to try to find ways to accelerate the process in order to get those projects under way so that the steel industry will not have to get to the rock bottom stage that it anticipates it will get to during this coming winter?


Pierre Elliott Trudeau: Madam Speaker, much was done by the Minister of Finance in regard to the Hon. Member's leader. I want to say that this is a very constructive suggestion indeed. I think that the Hon. Member will be pleasantly surprised when he will see that it is exactly the form of action that we are contemplating. The discussions to which he refers have already begun between the Minister of Finance and some of his counterparts and, of course, the Minister of Employment and Immigration, which I referred to earlier.
It is crucial to our thinking, as I believe it is to the Hon. Member's, that the federal funds be used wherever possible to lever or to assist municipalities or the private sector, public and private corporations and provincial governments, so that they will be prepared to take risks now investing money which will be needed to build an infrastructure which Canada will use very effectively when recovery does come.
In the meantime, the suggestion made by the Hon. Member for action is exactly one of the ways in which we intend to act.


Ian Deans: I am sure that the Prime Minister will recall that I made the same suggestion about 18 months ago. Perhaps if it was acted on then we would not be in the mess we are in now.
Oral Questions


SUGGESTED CONSTRUCTION OF SASKATCHEWAN WATER PIPELINE
Ian Deans: Madam Speaker, the Prime Minister is aware that in the city which I represent we will have unprecedented levels of unemployment, perhaps as high as during the Depression, maybe higher in fact than during the Depression.
Let me give the Prime Minister a specific example of something that might be done and get his assurance that it will be done. There is a demonstrated need for a water pipeline from Lake Diefenbaker to Regina and Moose Jaw. Ipsco has indicated that it is prepared to provide the steel at cost. Will the Prime Minister sit down with the Government of Saskatchewan and work out those ways necessary to take advantage, to provide that project now in order that in the steel industry at least they will be able to have some work during the winter? It is one idea on how we might be able to deal with the current economic problems.


Pierre Elliott Trudeau: Madam Speaker, the Hon. Member refers to the fact, as he put it, that he mentioned this idea 18 months ago. I accept that. I would remind him that many of the actions of the Government in the previous year have been precisely an implementation of that kind of thinking.
Let me give him an example once again of the action of the Minister of Transport in the area of transportation, particularly in the west. The suggestion that has been worked at in very lengthy consultation between the Minister and his provincial counterparts and the private sector, as I recall it, is that the Minister was prepared to put forward something like S3 billion in order to assist the railways to get on with some of these projects, which would have meant spending by the railways of perhaps some $15 billion, meaning work not only in the west, not only better transportation, but work throughout Canada for all those industries which are related to the railways, including steel and so on. That is one example.
Another example is the announcement by the former Minister of Finance in the Budget of some $400 million for housing. The Hon. Member shakes his head. I want him to understand that we are trying that idea precisely.


Ian Deans: What about the water pipeline?


Pierre Elliott Trudeau: When we offer each new home buyer $3,000, that is a matter of using federal money in order to permit the private sector, home owners and builders, to get on with projects which are much larger. In other words, the federal money is used in order to lever the private sector to do something beneficial for the individual and for Canada.
As far as the specific example mentioned by the Hon. Member is concerned, it has already been mentioned by the members of the Western Affairs Committee in the federal Government, and it is being discussed. If it is something that the Government of Saskatchewan sees as a priority, we will be very anxious to discuss it with that government.
Petitions


EMPLOYMENT
[Stage Direction]
October 27, 1982

Mr. Jack Shields (Athabasca):: Madam Speaker, 1 would like to direct a question to the Minister of Employment and Immigration. The allocation of funds to the Athabasca riding under the Canada Community Development Program is down considerably from last year, and this during a year of high unemployment in the Athabaska area because of the disastrous shutdown of the Alsands and Cold Lake projects. Will the Minister be allocating more funds to the Athabaska riding?


Lloyd Axworthy: Madam Speaker, as always, I am prepared to look at the allocations on the constituency level. I would remind the Hon. Member that under the $300 million program that we announced last July, which is just now coming into effect, there is a special allocation called the Special Response Fund which is designed to be allocated to those areas particularly hard-hit by immediate or recent changes in the employment picture. If the Hon. Member would like to prepare a dossier for me concerning the conditions faced by his riding, he knows I would give a sympathetic hearing, as always.


PROJECTS FOR NATIVE PEOPLE
Jack Wendele Shields: Madam Speaker, I would like to direct a supplementary question to the Minister of Employment and Immigration. As the minister is aware, northeastern Alberta contains most of the area covered by Treaty No. 8 and a number of reserves where employment is probably hitting 90 per cent or 95 per cent. Will some of that special allocation fund be made available for employment projects for native people in the Athabasca riding?


Lloyd Axworthy: Madam Speaker, I have to remind myself exactly of where the money has been allocated in that portion. I would again point out that as part of the community development job creation effort, we do have a special stream for native people, an additional $10 million which is designated according to where there are large concentrations of reserves or native communities. I am sure that that portion of the money has been allocated in that area, but 1 will check to make sure that it has been done in an equitable way.


PETITIONS
Madam Speaker:: I have the honour to inform the House that the Clerk of the House had laid upon the Table reports of
the Clerk of Petitions stating that he has examined the petitions presented by Hon. Members on Wednesday, August 4, 1982, and finds that they meet the requirements of the Standing Orders as to form.


Madam Speaker:: 1 have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following bills without amendment: Bill C-201, to amend the Holidays Act, and Bill C-127, to amend the Criminal Code in relation to sexual offences and other offences against the person and to amend certain other Acts in relation thereto or in consequence thereof.



THE ROYAL ASSENT

Madam Speaker:: I have the honour to inform the House that a communication has been received as follows:
Rideau Hall Ottawa
Government House
27 October, 1982
Madam,
I have the honour to inform you that the Honourable Brian Dickson, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 27th day of October, 1982, at 5.55 p.m., for the purpose of giving Royal Assent to certain Bills.
I have the honour to be,
Madam,
Your Obedient Servant,
Edmond Joly de Lotbiniere Administrative Secretary to the Governor General



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Mr. Keith Penner (Cochrane-Superior):: Madam Speaker, I have the honour to present the seventh report of the Standing Committee on Indian Affairs and Northern Development.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]
October 27, 1982


TABLING OF ORDER IN COUNCIL RESPECTING ACTING MINISTERS
Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, in accordance with recent practice, I am tabling in both official languages copies of Order in Council P.C. 1982-3255 designating Acting Ministers, as well as a list of the Members of the Committees of Cabinet.
Also, in accordance with recent practice, 1 ask that these documents be appended to today's Debates.


Madam Speaker:: Shall they be appended to today's Debates?


Some Hon. Members:: Agreed.


Madam Speaker:: It is so ordered.
[Editor's Note: For documents referred to above, see Appendix "A".]


ADVISORY COUNCIL ON THE STATUS OF WOMEN
Judith A. Erola: Madam Speaker, pursuant to the provisions of Standing Order 41, I am tabling the Annual Report, 1981-82, of the Canadian Advisory Council on the Status of Women, in both official languages.


BUSINESS OF THE HOUSE
Yvon Pinard: Madam Speaker, we have had consultations with representatives of the various parties who are responsible for the business of the House, and it would seem that if you are patient and are flexible in applying the provisions of Standing Order 15(3), there will be no complaints. The Minister of Finance (Mr. Lalonde) is expected to speak for about 45 minutes, perhaps for as long as an hour, in making his statement, and we on this side of the House will certainly have no objection to members being given at least equal time to reply and ask questions as they feel appropriate. However, there is also an agreement and we would certainly not want this practice to be considered as a precedent. There is an agreement, Madam Speaker, that before the statement by the Minister of Finance, the latter will be authorized to introduce today, for first reading, the bill intituled: An Act to provide supplementary borrowing authority (No. 2), which will enable the House to proceed with second reading tomorrow. And since the following will be at the request of the Conservative Party House Leader, I would
The Economy
like to specify right away that tomorrow, we intend to proceed with the debate on second reading of the bill which will be introduced in a few moments by the Minister of Finance (Mr. Lalonde); Friday will be the second and Tuesday the third day of this great debate on the economy. Monday will be an opposition day, and tomorrow I intend to be more specific as to the business of the House for the remainder of next week.


Mr. Nielsen:: Yes, Madam Speaker, that substantially reflects the agreement reached with respect to the borrowing bill, which will be called on Thursday and debated on Thursday, Friday, and the following Tuesday. With respect to today's statement, as long as the Opposition is given equal time to the minister in proportion to the number of seats held by the Official Opposition and the New Democratic Party, we are happy with that arrangement.


Ian Deans: Madam Speaker, I wonder if I might for clarification ask the Hon. House Leader for the Conservative Party just exactly what he means by that.


Erik Nielsen: No problem, Madam Speaker; it means that normal, equitable practices prevail in this House.


Ian Deans: Madam Speaker, that is, of course, the agreement that we came to, that normal, equitable practices would be maintained.


Madam Speaker:: The House then agrees unanimously that the Hon. Minister of Finance (Mr. Lalonde) will have leave of the House to introduce a bill?


Some Hon. Members:: Agreed.
 * *


SUPPLEMENTARY BORROWING AUTHORITY ACT, 1982-83 (NO. 2) MEASURE TO ESTABLISH
Marc Lalonde: for leave to introduce Bill C-128, An Act to provide supplementary borrowing authority (No. 2).


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

Marc Lalonde: Madam Speaker, my purpose this afternoon is threefold. First, I want to report on Canada's economic performance this year and on our
COMMONS DEBATES_________________October 27, 1982
The Economy
prospects for 1983. Second, I wish to inform Parliament and the people of Canada of the fundamental principles that will govern me and my actions as Minister of Finance. Third, I will indicate some additional and immediate actions the Government is proposing to ease further the hardship inflicted on Canadians by the recession, speed economic recovery and enable Canada to take full advantage of the development opportunities that will materialize as the world economy recovers.
Last week the Prime Minister (Mr. Trudeau) reviewed with the people of Canada the extraordinarily difficult situation in which we find ourselves. He did not promise a quick and easy solution because none exists, but he charted a course we must follow to restore our country's capacity to survive economically, in a world where the survival of the fittest has become a rule of life.
The world-wide recession has cut our economy to the bone. We have lost half a million jobs during the past year. Almost a million and a half among us are looking for work. Many others have temporarily given up the search for gainful employment. Virtually no Canadian has been untouched by the recession. In every region of the country, those who have been spared the worst have relatives, friends or neighbours who are struggling to cope with hardship and insecurity-be they unemployed textile workers in Quebec, grounded fishermen in the Atlantic Provinces, idle lumbermen in British Columbia, laid off miners or auto workers in Ontario.

Throughout the country, in union halls and boardrooms, in factories, shops and offices, Canadians are struggling to protect their livelihood, to preserve the basic comforts of their families, and to keep alive their hopes for a better future. All too few will have any respite from this struggle during this coming winter. But Canadians know that recovery is possible and that the next few months will be decisive ones in our effort to turn the economy around. They know that adversity has caused us to set aside our differences and to approach the management of our economy with a growing sense of realism and national purpose, and a renewed spirit of cooperation.
The people of this country recognize that the recession is a global problem. They are all too aware that Canada, as a major trading nation, has been hit more heavily than many other countries. But people also know that we are not simply drifting on the tide of world events. They are also aware that we can mobilize our energies to make Canada a tougher, more resilient country, that we can emerge from the recession in a position to compete, prosper and fully develop our considerable economic potential.
We have made remarkable progress since last June in implementing the 6 and 5 program introduced by my predecessor, the Secretary of State for External Affairs (Mr. Mac-Eachen), to break inflation and lay a solid foundation for a durable recovery. The response of provincial governments and the private sector to federal leadership in this regard has been
effective and broadly based. Inflation, interest rates and mortgage rates are coming down. Our prospects are by no means as bleak as they were at the beginning of the summer.
Last week Canadians were given by the Prime Minister the strongest assurance that the Government of Canada will not kick the social props from under them and abandon them to struggle alone. This government will not tighten the screws on the economy, cut billions from Government spending, or seek to eradicate inflation by brute force. The Government will continue to act decisively to ensure that the strong and the more affluent among us help the weak and the more vulnerable through these difficult times. As my predecessor said last June:
Solidarity and sharing built Canada. That sharing is what the unemployed, the many firms in trouble, and the thousands threatened by lay-offs now need. I count on the willingness of all Canadians to bear their share of the collective effort to bring down inflation.
1 subscribe without reservation to this basic principle of Liberal Government. That is why I am proposing today the reallocation of over $1 billion from existing spending programs to finance a new employment program, provide more stimulus for the housing industry, and speed up the expansion and modernization of rail capacity in the west. That is why I am announcing arrangements designed to relieve the workers and employers of this country from the full burden of mounting unemployment insurance costs. And that is why 1 am proposing to Parliament a series of tax adjustments to ease the financial and administrative burden on individuals and on businesses.
1 have been Minister of Finance for 48 days now. I must say 1 have received ten times that many suggestions and proposals.
I want to reflect on these and to pursue a good many of them in further consultations. There may be some who believe that an immediate budget is imperative, indeed, who would demand a new budget every three months if the last one has not resolved all of our economic ills. But I can say that in all of the consultations 1 have had, no one has urged me to bring in an immediate budget, and some have even suggested that I should wait until spring.
1 will not be rushed into action for the sake of appearing to act. Many urgent bills from previous budgets are still before the House and must be dealt with. To be sure, other critical issues need to be addressed and decided upon. But I intend to arrive at decisions that are sensible, constructive and durable, and I will take the time that is required to do so.
Since my appointment to this portfolio I have had extensive consultations with business, labour, co-operatives, women's organizations, economists, professionals, provincial Ministers and many others. I am grateful for their views. I have also received helpful advice from Members of Parliament from all parties. I wish to express my particular appreciation for the work of the House committee that has examined the detailed ways and means motions resulting from the last two budgets.
October 27, 1982

1 also want to thank the officials of my Department who have worked beyond the call of duty in the past few weeks to assist me and the Government in our deliberations. I express particular gratitude to my Deputy Minister, Mr. Ian Stewart, who is in all respects an outstanding public servant and an outstanding Canadian.
These consultations have been most valuable and 1 intend to pursue them in a spirit of openness, candour and co-operation. Over the next few months, as 1 work towards my budget, I will be seeking advice on how we can build on the six and five program to develop a full-fledged strategy for national recovery. Throughout this process, indeed throughout my tenure as Minister of Finance, I will be guided by the following principles.
First, we must continue to practise fiscal responsibility. We must persist in restraining spending. We must strive to contain the rise of the deficit even while the recession cuts into Government revenues and raises public expenditures. This means that we must rigorously review our priorities to ensure that existing programs continue to serve valid objectives. It also means that we must not hesitate to trim existing programs to fund new initiatives.
Second, we must not abandon the victims of the recession in the mistaken belief that such callous action might speed our recovery. This Government has worked consistently over several decades to develop a social security system that effectively supports Canadians in need of help. We will not put the axe to that system at the very time when Canadians need it most. More constructively, we will continue to look for ways to improve our social programs and to make them more effective for those who need help.
Third, we must continue to rely primarily on the dynamism and creativity of the private sector as the engine of growth in Canada. The government will be seeking areas where it can act in close co-operation with business and labour to improve the financial health of the private sector as well as its ability to expand and prosper. I intend to foster the certainty and stability that are basic preconditions for a favourable economic climate.
Fourth, we must remain outward-looking as a nation and recognize that our future well-being depends critically on order and stability in international economic arrangements. The depressed level of economic activity throughout the world has increased the risk of financial disorder and growing reliance on protectionist measures. It has also dealt a heavy blow to the aspirations of developing countries. Not only must we not turn inwards ourselves, but we must use our counsel and influence in world affairs to assist in the process of repair.
Fifth, we must continue to develop effective mechanisms for consultation so that the broadest range of organizations and institutions, as well as provincial governments, may participate in the continuing revision and improvement of our economic policies. We have made significant progress in this direction over the past year, but it is imperative that we persist in our
The Economy
efforts. It is my fervent hope that we will find ways to involve labour organizations more productively in this process of consultation.
In this connection, it is my intention to appoint a panel of economic advisers made up of outstanding Canadian economists to advise me on the broad and complex range of economic policy issues that we must face as a nation. I will announce the membership and terms of reference of this panel in the next few days.
Sixth, and most importantly, we must build on the spirit of the six and five program to devise and implement an effective strategy for national recovery and economic development. As the Prime Minister emphasized last week, six and five is not an end but a beginning. It is not a solution to all our programs but a standard, a goal that we can all accept and, by doing so, make it possible to find together workable solutions to the many other challenges we face.
We all know what these are. Our productivity performance continues to lag. New production techniques must be developed and implemented. This requires development of our technological base, increased investment, and new and innovative approaches to organizing work and labour-management relations.
Infrastructure development is required across the country. Our railway system in particular desperately needs to be upgraded. There is little point in cutting our production costs and increasing our productivity if we cannot deliver our goods to the markets where they are sought.
We have an abundance of resources that need to be developed. Markets for our energy may not be very buoyant today. But the lead times of development are long, our energy will be needed in the 1980s and 1990s, and planning ahead can give us an important advantage in an increasingly energy-reliant world. Likewise, our forests need replenishing and our fisheries careful husbanding if we are to sustain our resource base over the longer run.
These are some of the things we need to do. There are many others. We must undertake them together, as Canadians, if we are to succeed. Just as governments cannot break inflation by themselves, so they cannot bring about economic recovery by themselves. But just as the public and the private sectors are now implementing jointly a national program to break inflation, so we can join together to strengthen our economic system, sustain our recovery and enhance our future growth prospects. And just as the Government has shown its willingness to lead in the fight against inflation, so it is prepared to lead wherever necessary and to co-operate with business, labour and the Provinces to promote economic growth.
I would like now to comment on the economic and financial outlook. The recession has been deeper and longer lasting in Canada than the Government anticipated when the June budget was presented. We are going through the most severe period of recession since the 1930s. The publication of the National Accounts in late August confirmed that the gross national product declined by 2.1 per cent in the second quarter

October 27, 1982
The Economy
of this year, bringing it 6.2 per cent below the level it has reached in the second quarter of 1981. Subsequent monthly information suggests that the economy continued to be weak through the third quarter and may have declined by a further 1 per cent, although national accounts data will not be available for several weeks.
Nevertheless, there are signs that economic recovery will begin in the current quarter. Inflation is abating. This has accelerated since the introduction of the six and five program. On a year-over-year basis, the consumer price index increased by 10.4 per cent in September compared to 11.2 per cent in June and 12.5 per cent on average in 1981. And over the three months ending in September, the average monthly increase, seasonally adjusted, was under six-tenths of 1 per cent. This contrasts with an average monthly increase of nine-tenths of 1 per cent in the first six months of 1982.
The moderation in inflation we have had, together with prospects of continuing improvement, has made it possible for Canadian interest rates to decline as U.S. interest rates have fallen. The bank rate has come down for ten consecutive weeks. It is now more than five percentage points lower than it was at the end of June, and almost ten percentage points lower than the peak level reached in August of 1981. Other interest rates have followed the bank rate down. Mortgage rates have also fallen by five percentage points since last June. What this means is that the monthly payment on a $50,000 mortgage amortized over 25 years, to take one example, has declined by $200 a month during the same period. These lower interest rates are also easing the difficulties faced by businesses and helping to stimulate economic recovery.
For 1982 as a whole, real gross national product is now expected to fall by 4.4 per cent and the unemployment rate to average about 10.9 per cent. Given the high rates of inflation recorded in the first half of the year, the consumer price index for the whole of 1982 will likely rise by 10.9 per cent. Nevertheless, the trend is clearly downward, and I expect inflation to be running at less than 10 per cent by early next year.
Looking forward to 1983, the recovery should gradually gather momentum. Real growth of about 3 per cent may be expected next year. Broad adherence to the six and five program should bring the increase in the CPI down to an average of about 7.5 per cent in 1983 and to about 6 per cent by the end of 1982. Our trade balance with other countries, which has already attained record highs this year, should be even stronger in 1983. Continued strength in our trade position, together with the prospect of continuing decline in U.S. interest rates, will make possible further lowering of interest rates in Canada as our inflation gains are consolidated.
The area of greatest concern in 1983 will be the labour market. I expect employment growth to resume soon. The number of Canadians at work should increase by 2.5 to 3 per
cent from the fourth quarter of 1982 to the fourth quarter of 1983. However, as economic and employment growth resume, many people who have temporarily left the labour force over the past year will once again begin to look for work. As a result, the labour force will also grow strongly through 1983, and the unemployment rate will decline only gradually. Unemployment is expected to decline, reaching a level slightly above 11 per cent of the labour force by the end of the year; but for 1983 as a whole, the unemployment rate will likely be slightly above 12 per cent.
The unemployment outlook therefore remains distressing and demands continuing efforts to improve employment prospects and help those most in need. That is why I am announcing today a number of measures that go beyond the additional $1.4 billion the government has already allocated for these purposes over the past year.
I now report to the House on the government's fiscal position for the past and the current fiscal year. The Public Accounts for fiscal year 1981-82 have just been tabled. I am tabling with this statement the standard summary statement of transactions for fiscal years 1981-82 and 1982-83. Financial requirements excluding foreign exchange transactions were $8.3 billion in 1981-82, virtually identical to the estimate made at the time of the June budget. This is almost $2 billion lower than in 1980-81. The budgetary deficit in 1981-82 was $13.6 billion, about $1 billion higher than in the previous fiscal year. Total outlays were $68.9 billion, up 17.6 per cent from 198081. The major factor accounting for this large increase was interest on the public debt, which grew by 42 per cent. Outlays other than public debt charges were $53.7 billion, reflecting an increase of 12.2 per cent over the previous fiscal year. Budgetary revenues stood at $54.1 billion, 19.1 per cent higher than in 1980-81.
In 1975, the government pledged to hold federal spending to the trend rate of growth of GNP. From 1975-76, the fiscal year in which this commitment was made, to 1980-81, total outlays declined from 22.9 per cent of GNP to 20.1 per cent of GNP. The Public Accounts show that total outlays in 1981-82 increased slightly as a share of GNP to 20.8 per cent. But I emphasize that this increase was more than totally accounted for by an extraordinary and unavoidable increase in interest charges. Exclusive of interest charges, total outlays on government programs have fallen continuously from 20.5 per cent of GNP in 1975-76 to 16.4 per cent of GNP in 1980-81 and, further, to 16.2 per cent of GNP in 1981-82. Those who assert that federal expenditures are "out of control" should check the record of the past seven years.
My predecessor reported in June that the fiscal position of the government in 1982-83 had deteriorated significantly from what was anticipated in November of 1981, essentially because of the onslaught of the recession. 1 must report today that further weakening of the economy in the intervening months has aggravated this deterioration. The budgetary deficit was
October 27, 1982

then projected to be $19.6 billion. I am now estimating it at $23.6 billion. About 70 per cent of this slide is directly attributable to the impact of the recession on anticipated revenues.
Total outlays are now expected to be almost $80 billion, about $1.1 billion higher than projected in June. Interest charges are now forecast to be more than $900 million lower than in June. This has been more than offset, however, by major increases in the costs of statutory programs, such as the government share of unemployment insurance, the Canada Assistance Program, Equalization, and Railway Act payments, which are related in substantial part to the depressed levels of economic activity. The net increases in statutory program costs total some $1.5 billion. We have also faced increases in costs due to other government undertakings. These include the just announced decision to provide $400 million to strengthen the equity bases of Canadair and de Havilland and an increase in payments to Via Rail. In many cases such increases also reflect the state of the economy and the desire to minimize further adjustments which are imposed on labour and other markets under current conditions. In planning its expenditures, the government does, of course, provide reserves which, in more normal times, should be adequate to cover such contingencies. However, they have been substantially exceeded this year. The new outlays projection does contain an allowance against further possible upward revisions in existing program costs.
Outlays as a share of GNP will rise this year, reflecting both the low rate of GNP growth and the pressures of the weak economy on government expenditures. This is primarily a cyclical phenomenon, however, and the government remains committed to containing spending growth to rates below the trend rate of GNP growth over the medium term.
While outlays have increased by slightly more than $1 billion since June, revenue estimates have fallen by almost $3 billion. This is almost entirely due to the weakness of the economy, and reflects the operation of "automatic stabilizers". Our tax and expenditure systems have been deliberately designed so that spending for major social programs rises more rapidly and government revenue more slowly when the economy falters. This is precisely what is now happening. Indeed, total budget revenues are expected this year to grow by less than 3 per cent. The net effect of these adjustments is to support economic activity in times of recession.
The government's financial requirements, which were estimated in June to be $17.1 billion, are now expected to be closer to $22.2 billion. Some $4 billion of the increase is attributable to the increase in the budgetary deficit, the reasons for which I have just spelled out. Most of the remainder-about $700 million-is due to increases in the deficit in the Unemployment Insurance Account, partly in response to much higher than anticipated unemployment rates, and partly as a result of the government's decision on unemployment insurance premiums for 1983 to which I will return in a few moments.
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Personal savings are at an historically high level and private borrowings have been very weak through the first half of the fiscal year. Consequently I do not anticipate problems in meeting the government's borrowing requirements. Moreover the government is of the view that in current circumstances the federal deficit provides appropriate support to economic activity and individual Canadians suffering from the recession.
As you know, Mr. Speaker, the government is presently seeking a $4 billion increase in its borrowing authority under the provisions of Standing Order 72A. I have outlined the factors leading to this request. I have also made it clear by the estimates I have presented that further borrowing authority will be required before the end of this fiscal year. In the budget I intend to present early in 1983, I will review again the fiscal situation for the current fiscal year, set out estimates for 198384 and future fiscal years, and then seek additional borrowing authority as required.

I have heard it said, Mr. Speaker, that statistics make good soporifics. I fully realize that the figures I have recited probably mean very little to the average Canadian. After all, numbers do not pay the rent or buy the groceries. The man in the street wants to know, quite rightly, what the Government will do for him, so I now turn to the additional actions the Government is proposing to protect Canadians from the worst effects of recession, enhance our prospect for recovery and position ourselves to take advantage of future growth opportunities.
The fiscal position I have just described clearly shows that the Government's room for manoeuvre is very limited. While 1 am prepared to accept the larger deficits resulting from our weak economic performance, the principle of fiscal responsibility prevents consideration of massive new spending programs.
Some have argued that the measures introduced to bring down inflation have extracted a heavy toll from Canadians. However, it is now recognized by virtually every responsible government in the world, whatever may be its political stripe or ideological bent, that failure to check inflation and the pernicious expectations to which it gives rise would leave national economics in an even more devastated state.
To change course now would be foolish and irresponsible. It would break the trust we have sought to build with Canadians. It would perpetuate the cynicism that inflation breeds. The people of Canada would feel betrayed because their Government, when it came to the crunch, lacked the resolve to persevere. I am confident that Canadians will continue to support and adhere to the Government's six and five program and that we will move into the 6 per cent world by the end of next year. I am determined to avoid any initiative that might compromise this achievement. The additional measures I am

October 27, 1982
The Economy
announcing today to meet pressing needs will accordingly be financed by spending reallocations.
To help those Canadians who have been directly hit by the recession, the Government is introducing a new Employment Expansion and Development Program.

The June budget recognized the need to take action to reduce unemployment and provide support to those hardest hit by the recession. My predecessor announced measures to expand employment programs, stimulate housing and other employment-intensive construction, and promote economic development. More than $1.4 billion is allocated for these purposes in the current fiscal year.
These programs are now in place and, along with unemployment insurance and other employment initiatives, provide an important line of defence against the hardship of unemployment. Through the Canada Community Development and special youth programs, close to $300 million dollars will be spent for job creation programs this winter, providing employment for over 60,000 Canadians. Most hirings will occur during November, December, January and February. These jobs will be targetted as much as possible on our most vulnerable communities.
However, it has become apparent since last June that additional help is required for those who face severe financial difficulty because of prolonged unemployment. The duration and depth of the recession have led to a significant increase in the number of people who will no longer have access to unemployment insurance benefits. Lacking employment and other sources of income, many people will be forced to seek social assistance, often for the first time in their lives. We cannot, as a nation, ignore their plight. It is to help these people that the New Employment Expansion and Development Program is being put in place.

Through this Program the Government will draw upon the abilities of all employers in Canada whether they be in the public, non-profit or private sectors to generate employment. We face a national problem requiring a national solution. The Federal Government cannot solve it alone. By working together we can find productive and socially useful jobs for those who are in greatest need of gainful employment.
The Federal Government is prepared to commit $500 million to this new Program. It is expected to provide jobs for 60,000 individuals over a period of 18 months. I am calling upon Provincial Governments to facilitate its implementation.
I am also inviting them, wherever possible, to supplement the federal contribution. Joint action can bring about a significant reduction in the number of people who would otherwise be forced to seek social assistance. My colleague, the Minister of Employment and Immigration (Mr. Axworthy), will contact his provincial counterparts in the next few days, and he will announce very shortly the details of the new Program.
Because of the importance of the construction industry in stimulating economic activity, I am announcing that an
additional $150 million is being allocated to two existing housing Programs-the Canadian Home Renovation Plan and the Canadian Homeownership Stimulation Plan.
Under the Canadian Home Renovation Plan, eligible home owners can receive a grant equivalent to a third of their costs for home repairs up to a maximum of $3,000. Indeed the Program has been very successful, and the $65 million allocated to date has been almost completely committed. 1 am announcing a further allocation of $50 million to the Program, and this should provide an additional 13,000 jobs.
The Canadian Homeownership Stimulation Plan introduced in the June budget provides relief from high interest rates for prospective home buyers. Grants of $3,000 are available to all purchasers of new homes on which construction started before December 31, 1982, and to first-time buyers of existing houses before that date. The Program has been very well received and close to 65,000 grant applications have already been approved. In addition, seven Provinces have home ownership assistance programs which complement the federal plan.
Since June mortgage interest rates have fallen considerably and home buyers are under less pressure. In addition, housing prices have come down. Statistics Canada's new house price index showed a year-over-year decline of 3 per cent in September, but the construction industry has still not recovered from its slump and this continues to be a matter of concern to the Government. I am therefore announcing that the $3,000 home ownership stimulation grant will be extended to the end of April, 1983 at a maximum cost of $100 million. There will be, however, one important modification. Starting on January 1, 1983 assistance will be extended to purchasers of new housing only to generate the maximum amount of activity and employment.
To better position Canada to benefit from world recovery, the Government is earmarking an additional amount of up to $400 million to speed up the expansion and modernization of rail capacity in the west and to facilitate an early, fair and balanced resolution of the Crow rate issue. The commitment of these funds will be contingent upon detailed proposals recommended by the Minister of Transport (Mr. Pepin).
The Government is determined to implement swiftly its comprehensive approach to expand the western rail transportation system and modernize the freight rate regime for grain. Early action will ensure that the railways will be in a position to increase rail capacity as required to move the substantially higher volumes of export commodities projected from the middle of the decade onward. This expansion is critical to Canada's economic development in the 1980s. It will pave the way for the exploitation of additional coal, potash and sulphur resources as well as increased exports of grain. The over-all plan will also stimulate western agricultural development and facilitate economic diversification.
Railway investments amounting to $11.8 billion in 1982 dollars are planned over the period to 1991 and will generate substantial economic activity, not only in the west but in
October 27, 1982

virtually every region of the country. In addition to major construction activity and sourcing of materials in the western provinces, the railways' requirements for steel rail, locomotives, rolling stock and electronic equipment will provide major stimulus over the period to the manufacturing sector, particularly in central and eastern Canada. As a result of the direct railway expenditures, it is estimated that some 400,000 jobs will ultimately be generated.
But to get the full benefits from the plan and to speed national recovery it is imperative that we get an early start. The Government will therefore seek firm and specific undertakings from the railways to commit funds for the expansion and modernization of their facilities in the west. If I receive assurance from the Minister of Transport that these undertakings are satisfactory, 1 will be prepared to extend the special additional capital cost allowances on railway track and other rail assets provided under the Income Tax Act beyond December 31.
While I am addressing the issue of transportation, I would like to say a word about the current situation in the west coast ports. The Government of Canada and the people of Canada cannot pour hundreds of millions of dollars into the modernization of our transportation system and see that system close down for extended periods of time by labour-management disputes. Such a situation is even more outrageous at a time when the country is in its worst recession since the 1930s and when such an interruption paralyses one of our most active and dynamic sectors. The Government in its anti-inflation battle has relied on voluntary participation and called upon the sense of responsibility and of solidarity of both management and labour. Unfortunately, this does not seem to have worked yet in the west coast ports dispute.
I am pleased to note that talks are now planned to resume between the parties today in Vancouver. However, 1 am giving notice on behalf of the Government that it would be in the interests of both parties to resolve their dispute in the next few days. If the dispute is not settled by Monday at the latest, the Government will carry out its responsibilities on behalf of the Canadian people and take decisive action.
The measures I have announced are being financed by reallocations of existing expenditures amounting to $1.1 billion. Consequently, they will not add to the deficit over the current and coming two fiscal years. I am pleased to confirm that this has been achieved without weakening in any way the social security system that is currently sheltering millions of Canadians from the full brunt of the recession.
From now through 1984-1985 some $660 million will be freed up in the energy area by scaling back funds allocated to a number of programs. The existing allocations for the Petroleum Incentives Program will nevertheless be maintained.
Outlays in the areas of defence and official development assistance will be reduced by $230 million and $245 million respectively from the dollar levels previously allocated. These reductions, which have been made possible by lower rates of inflation and GNP growth, will take place without prejudice to
The Economy
our ability to maintain our commitment to 3 per cent real annual growth in defence expenditures, or to achieve our aid commitment level of 0.5 per cent of GNP by 1985-1986. They will, however, require some adjustments in the nature of the programs we had planned to undertake.
Not only is the government freeing up funds for immediate new initiatives, but it is seeking to ensure that it will have the capacity to respond to contingencies likely to arise. Some reductions in other programs are therefore being made to provide for such contingencies and contribute to the financing of the new initiatives I have just announced.
This reallocation exercise has been very difficult. I want to thank all my colleagues for their co-operation in this regard. One billion dollars may not seem like very much in the context of total outlays of $80 billion. But roughly 75 per cent of total Government outlays is made up of transfers to persons, Provinces and other countries, grants or capital assistance to industry, subsidies, loans and interest on the public debt. Of the 25 per cent or $20 billion remaining, which accounts for the operating expenditures of the Federal Government inclusive of defence, some $11 billion is made up of wages, salaries and other personnel costs, which have already been restrained by the six and five program.
It has not been easy to make deep cuts in Government spending without hurting some group of Canadians already reeling from the impact of recession. But the Government, having urged Canadians to restrain their incomes, had no choice but to revise and pare down federal expenditures. The President of the Treasury Board (Mr. Gray) has introduced over the past few months stringent restrictions on spending in the Public Service. The Government has asked him to look again at departmental expenditures to ensure that no fat is left in the system and, even beyond this, that outlays are being pared down to the lowest level compatible with maintenance of adequate service to the public. He will soon report to the House on this issue.
I am also announcing today the Government's decision to set employee and employer unemployment insurance premium rates for 1983 at levels significantly lower than would be required to prevent the deficit of the unemployment insurance account from rising further next year. In effect, the Government will limit the increase in premiums to about half what would be required to balance the operations of the account in 1983.
In so doing, the Government is accepting the recommendation of the Canada Employment and Immigration Commission, which includes representation from both business and labour, and a similar recommendation made by the Economic Council of Canada. Effective January 1, 1983 premium rates will be set at $2.30 per $100 of insurable earnings for employees, and at $3.22 for employers.

Unemployment Insurance is the first line of defence of Canadians against temporary loss of income resulting from

October 27, 1982
The Economy
unemployment. Honourable Members are well aware that over the past year it has been drawn upon more heavily and extensively than ever before to meet the objectives for which it was designed. The program is financed through premiums paid by workers and their employers, and through contributions from the federal government. Over the years, premiums have moved up and down in response to general economic conditions and the consequential demands made on the Unemployment Insurance Account. Premiums were in fact reduced last year from the 1980 level of $1.80 for employees to $1.65 per $100 of insurable earnings-the same premium level as in 1976.
Unfortunately, we now face a very different situation. The severity of the recession has resulted in a very high number of claims on the Unemployment Insurance Account. It is estimated that by the end of 1983, in the absence of any increase in premium rates, the cumulative deficit could rise to more than $6.5 billion. Some increase in premium rates is therefore unavoidable. However, balancing the Account at this time would have imposed an intolerable burden on the private sector, requiring an employee premium rate as high as $3.75 in 1983.
To have raised premiums to such levels would have amounted to a massive tax increase on Canadian workers and businesses, an increase that would have jeopardized economic recovery. At the same time, keeping rates at their current levels could have added more than $3 billion to the government's cash requirements in 1983. It would also have required even higher rates in the future since the deficit of the Account would continue to mount.
The Minister of Employment and Immigration and I have both consulted with business and labour as to the fairest way to resolve this dilemma. There is a strong desire on the part of the private sector not to tamper with the basic insurance principle of the program. The government supports this principle. Yet a strong case can be made for sharing more widely the burden of unemployment insurance in current circumstances, thereby enhancing the stabilizing properties of the program and demonstrating the willingness of Canadians to help those among us who are most in need. Setting premium rates at the levels I have just indicated will require the government to advance more than $1 billion to the Unemployment Insurance Account in 1983, over and beyond its normal contribution as an employer. The government's borrowing requirements will increase by an equivalent amount. The government's decision will lead to an increase in the cumulative deficit in the Account in 1983-a matter of serious concern to all of us. Over the coming months, my colleagues and I will continue to assess closely the extent of the deficit and its implications, and to pursue the matter in further consultations with business, labour and other interested parties.
Mr. Speaker, I would now like to go into a number of taxation issues, particularly bearing in mind the decision 1 have just announced relating to unemployment insurance. Taxation policy has been hotly debated over the past year. Our tax system must balance the need for fairness, the need for incentives, the need to avoid distorting private sector decisions, and the need to raise revenues. Many commentators have emphasized the importance of tax simplicity. I agree. However, some degree of complexity is unavoidable if the tax rules are to reflect the real and very complex world in which we live, and if tax incentives are to apply only to those for whom they are intended.
The government has welcomed consultations and constructive suggestions on tax policy. A committee of this House has examined the tax proposals from the November 1981 budget. Several groups of outside tax experts and private sector representatives have been appointed to examine important tax proposals. I have personally held many consultations on taxation issues since becoming Minister of Finance and I plan to continue this process.
I have a number of announcements to make concerning certain measures from the November budget. Many of these respond to representations made by individuals and associations either directly to me or my predecessor, or before the House Committee.
In reviewing these representations I have been guided by three considerations. First, it is important to ensure that incentives extended to some taxpayers are fair, that they do not unnecessarily distort economic activity, or result in higher tax rates for others.
Second, I do not believe that the Government can continually pile incentive upon incentive without looking at the revenue loss involved, the overall government deficit, and the capacity of the country to afford these incentives. The November changes were in the right direction and I am not prepared to abandon that approach, as some have suggested.
Third, since last November the Canadian economy has been hard hit by the world recession and, for this reason, some adjustments in the government's tax proposals are warranted. Now is the time to remove uncertainty, to end the debate over the merits of this or that proposal, to reduce tax complexity, and to move on to the many pressing economic problems that confront us.
Working Canadians are faced with uncertainty in employment and restraint in their living standards. The government is asking them to share with other Canadians the burden of mounting unemployment insurance costs. I am therefore making two tax adjustments that will directly benefit working Canadians.
I will not proceed with the proposal to tax the health and dental plan benefits of employees.


Some hon. Members:: Hear, hear!

October 27, 1982


Marc Lalonde: We as Parliamentarians, must recognize, that while this proposal would have improved the fairness of our tax system, now is not the time to introduce it. 1 expect that this adjustment will reduce the administrative burden on employers.
1 am also responding positively to the numerous representations the Government has received on the taxation of housing and travel benefits extended to employees in northern Canada and other isolated locations. Such benefits are now tax exempt but the exemption expires at the end of this year. To continue to exempt all benefits would be unfair to other northern residents who do not receive such benefits, and to Canadians living in other parts of the country, who have to bear their full housing and travel costs out of after-tax income. An unlimited exemption would also encourage those affected to substitute tax-free benefits for taxable wages beyond what is reasonable.
However, there is a need for special rules for the valuation of housing and travel benefits that take into account the special circumstances of employees in these locations. Furthermore, 1 have concluded that, because of the very severe impact of the recession on communities in northern Canada, it would be inappropriate to begin subjecting such benefits to tax at the present time. 1 also recognize that northern employees and employers are being asked to adhere to the six and five program, and I do not want to impair their ability to do so.
Accordingly, I am extending today the current exemption of benefits by one year, to the end of 1983. I am also proposing a modified tax regime for benefits that will be phased in gradually, beginning in taxation year 1984 and ending in 1987. Full details will be provided in a document I will release shortly.
1 would now like to say a few words on taxation affecting business, Mr. Speaker. Canadian businesses are presently confronted with very serious financial problems. Profits are at very low levels and must be restored if investment and economic activity are to pick up again. The decline in interest rates that has occurred since the June budget and the measures that 1 am announcing today will provide much needed relief. But I have come to the view that reducing the complexity of business tax measures and removing the uncertainties still lingering would help businessmen concentrate more fully on managing their affairs in these difficult times. 1 am therefore announcing today several tax adjustments to ease the businessman's burden.
The Small Business Bond was introduced last year to assist eligible small businesses in financial difficulty. The program, which was due to expire on December 31, 1982, has proven to be effective and has been used extensively. 1 am pleased to announce today that the program has been extended for one more year to December 31, 1983.
The change in tax treatment of professionals' work-inprogress will not apply to professionals who are ineligible for the low small business tax rate, or to other professionals who would be ineligible if they were incorporated. This includes
The Economy
doctors, dentists, lawyers, accountants, veterinarians and chiropractors.
The Government has proposed that the federal sales tax be moved from the manufacturers to the wholesale level as of January 1, 1983. This change would greatly improve the tax structure and remove serious biases that work to the disadvantage of domestic manufacturers and in favour of imports. 1 have received representations from both small and large businesses on this issue. They have generally recognized the need to remove the biases in the current system but they have taken the view that now is not the time for a changeover.
Some groups, notably a joint task force of business associations that 1 recently met with, have requested the opportunity to explore further whether a modified proposal could meet these objectives. Accordingly, I have instructed my officials to work with industry to explore possibilities in this regard. I invite the interested associations to designate their representatives as soon as possible.
As I noted previously, in the current economic environment 1 am receptive to the notion that any change, no matter how beneficial, imposes costs and uncertainty on businesses. I want to minimize such costs while continuing the policy of making the structural changes in the tax system that are required. Consequently, I am also announcing that the date for implementing the proposal on the sales tax will be delayed until after the legislation has received Royal Assent and that, in any event, implementation of the new system will not commence before the middle of 1984. This will give adequate time for the Government and the private sector to consult further, for Parliament to review the legislation and for taxpayers to gear up for the new system.
The November, 1981 budget imposed a tax on dividend distributions by small business to correct a serious anomaly in the taxation of such firms and their shareholders. In my judgment, the objective of the tax is sound and many have agreed with its purpose. However, the original proposal was unduly complex. It was also criticized as applying retroactively to dividends paid out of income that small firms had earned before the measure was introduced.
In order to resolve these concerns, I have concluded that the tax should apply only to dividends paid out of corporate income earned in taxation years starting after the year 1982. Dividends paid out of business income will be considered to come first out of income earned after 1982. This change removes one of the features of the tax that small business and the tax community found objectionable, and together with other technical adjustments will simplify the tax quite significantly.
Before the November 1981 budget, tax on capital gains was deferred in various corporate reorganizations. That budget proposed to end these tax deferrals in certain circumstances. The application of the proposal has been deferred until 1983, pending consultation with a group of independent tax experts. The issue remains under study and it is my intention to publish a consultative document containing specific proposals.

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However, 1 want to remove uncertainty for businesses which are currently in the process of or are contemplating reorganizations. I am thus announcing that the pre-budget rules on corporate reorganizations, with the exception of the changes contained in the June 28, 1982, ways and means motion, will continue to apply after the end of this year. As well, any new proposals arising from ongoing studies and consultations will not apply to reorganizations that are substantially advanced on the date that new proposals are announced.
1 have one adjustment to announce concerning taxation of the investment income of individuals. My predecessor referred a proposal to restrict tax deductibility of interest expenses to a committee of prominent tax professionals. That proposal would have limited tax deductions for investment interest expense to the amount of a person's investment income that was taxable in the year. I have received the report of the committee. Their recommendation is not to proceed with the proposal and I accept it.
However, in any move to eliminate tax on the inflation-related portion of capital gains or interest income, it may well be necessary to enact rules to ensure that taxpayers would not also be able to obtain a tax deduction for the inflation-related portion of borrowing costs they incur to make the investment. This matter will be further reviewed.
On April 21 my predecessor announced disbursement rules for private charitable foundations that met the objectives of both the foundations and the Government. These rules require the distinction to be maintained between charitable foundations and charitable organizations. In many cases this distinction in unnecessary. Accordingly, 1 am examining the possibility of applying the same rules to both charitable foundations and charitable organizations. 1 propose to make public later this fall draft legislation which would apply the rules proposed to both types of charities and to delay passage of the legislation until consultations with interested parties are completed. In any event, the new rule would apply only in taxation years commencing after 1983. However, the special rules concerning non-qualified investments, as announced on April 21, will apply at that time to all charities.
[ Translation]
Mr. Speaker, I would like to comment briefly on the recent report of the Ministerial Advisory Committee on Inflation and the Taxation of Personal Investment Income, chaired by Mr. Pierre Lortie, the President of the Montreal Exchange. The Committee's report was released to the public on October 20. I wish to thank its members for the considerable and impressive work they have done on important tax issues. I have found the consultative process and the Report itself most useful. The Committee has supported the general thrust of the government's proposals to base taxation of investment income on real ability to pay. It has stressed the paramount need to reduce inflation. It has recommended that the Registered Shareholder Investment Plan proposal to exempt the inflation portion of capital gains from taxation be proceeded with in a modified form. It has recommended against adopting a proposal to
adjust for tax purposes the interest income of individuals on funds lent to farmers, small business, and homeowners.
Since early June, interest rates have declined by five percentage points and are now at levels comparable to what they were two years ago. As we persevere in our efforts to reduce inflation, they will go even lower. Moreover the federal government and many provinces have introduced assistance programs for homebuyers, mortgage renewers, small business and farmers. I have just announced additional support for housing. In the light of these facts, I accept the Committee's recommendation that the proposal for indexed term deposits and indexed loans not be proceeded with.

I do not need to be persuaded of the crucial importance of encouraging the revival and growth of equity markets in Canada. 1 therefore intend to proceed, as recommended by the Committee, with the Registered Shareholder Investment Plan under which tax will apply only to the real portion of capital gains on common stock of public companies.
In my judgment, it is important to ensure that the details of the approach the Government will put forward take into account the Committee's suggestions and not prejudice any possible move to adjust the taxation of business income for inflation. I also believe it is desirable to work out the full details of this approach in the form of draft legislation available for public comment prior to implementation. It is my intention to table such draft legislation before the end of this year.
The Committee has recommended that a major study be undertaken to determine the desirability of adjusting the taxation of business income for inflation. I am well aware of the distortions and disincentives to investment that can arise when the tax system does not recognize that inflation affects the measurement of business income. I am therefore receptive to this recommendation and will consider how such a study could be conducted.
To sum up on tax issues, the over-all effect of the changes I have just announced, exclusive of the Registered Shareholder Investment Plan, will be to reduce federal revenues by $45 million in the current fiscal year and by approximately $300 million on a full-year basis. This financial impact is included in the financial statement I presented earlier. The revenue effect of the Registered Shareholder Investment Plan will depend on the exact details of its structure and when it comes into effect.
I will be releasing soon the draft legislation on the taxation of investment income and life insurance. I plan to table in the first two weeks of December final legislation to implement the proposals from the November and June budgets, as revised today. The legislation has benefited significantly from comments that have been made on the draft that was made public last June. I thank those who took time to send comments to me, my predecessor and my officials.
October 27, 1982



Madam Speaker, I did not attempt today to paint a rosy picture for Canadians. The world recession has severely weakened our economy. Recovery will take time, and unemployment will not come down overnight. But if the best is by no means assured, neither are we inevitably fated for the worst, as the Right Hon. Prime Minister has reminded us so often, quoting his favourite Portuguese proverb. The strong support that individual Canadians, private sector organizations and most provinces have given to the 6 and 5 program introduced by my predecessor last June has significantly improved our economic prospects. As a result, inflation has abated and interest rates have come down over the last four months. These hopeful trends point to an early recovery. The measures introduced in the June budget and those I have just outlined will sustain activity and help those among us hardest hit by the recession until recovery makes it possible for them to find jobs.
Last week the Prime Minister formally committed the government to maintain and improve the social programs put in place over the past 40 years to counter the effects of unemployment, poverty, bad luck and economic disruption. The measures 1 have just announced bear witness to the fact that this was not empty rhetoric. Expenditure reallocations will enable us to devote over a billion dollars to employment support, housing assistance and modernization of our railway system without adding to the deficit. Moreover, the government will absorb next year half of the additional cost of unemployment insurance to make sure that workers and employers are not saddled with an intolerable burden. The tax changes 1 have proposed will likewise ease the burden of taxpayers and make it possible for them to devote their full attention to essential tasks: to produce more efficiently and more cheaply, to improve their products and techniques of production, to fully exploit markets at home and abroad-in short, to make the Canadian economy more competitive and better able to prosper as world growth picks up. This is the challenge we will have to meet together, and it will remain my first priority as Minister of Finance.

As some of you may know, I come from a farming family. My ancestors worked the land on lie Perrot for almost 300 years. I still make my home on that farm. Because he depends so directly on the land for his livelihood, the farmer is more closely attuned to nature's quirks, the too sudden winter or late-arriving spring.
I have seen that the shrewd farmers use the long winter to their advantage. They sharpen and repair their equipment and tools, take account of their stock, store their grain and protect their animals. They know that they will be ready for spring.
Well, the next few months will test our collective strength as a nation. Like the wise farmer, let us use the time wisely, together laying the groundwork for the spring that awaits us.


Some Hon. Members:: Hear, hear.


Hon. Michael Wilson (Etobicoke Centre):: Mr. Speaker, today is not a happy day for Canadians. It is not a happy day
The Economy
for the former minister of finance. It is not a happy day for the new Minister of Finance (Mr. Lalonde). The former minister of finance has seen a good part of his last two budgets thrown right into his face.
This is the first budget of this Minister of Finance, and let us call it a budget, because that is what it is. It is not an economic statement or financial statement, it is a budget. It is the third budget that we have had in the House of Commons in less than 12 months.
This Minister of Finance has been asked to carry the can for his predecessor. He has told us that the economy is still in a downturn. The drop in the national income is at least 71/4 per cent during this recession and may go still further down. The budget deficit is an astonishing $23.6 billion, $4 billion higher than the Minister's predecessor estimated some three and a half months ago. I hope these figures are correct.
I hope they are not going to be worse than that when we have the next budget which the Minister is going to bring down some three months from now. The advice the Minister has been getting is coming from the same place that gave us the estimates of the $10.6 billion deficit, the $19.6 billion deficit and now the $23.6 billion deficit. They are the same people. And Canadians, Mr. Speaker, cannot take many more shocks like this. I fear that if these projections that the Minister has put forward for the balance of the year are still on the low side, then Canadians are going to be deeply disturbed and deeply affected by the effects of this Minister's statement, I hope I am wrong. I hope he is on target. Hon. Members and Canadians must be stunned by the magnitude of these Figures and by the magnitude of the problems that we are facing, as set out by the Minister. The Minister seems to be trying to turn over a new leaf. He is trying to put those Cape Breton days behind us. But Canadians must all recognize that the Minister has not presented this statement without having some blood on his hands, because it is his National Energy Program and the collapse of the oil industry that have led to the increase in unemployment in the country today and the significant drop in revenues that have caused the deficit problems we have.
Members are probably looking at this seat over here and wondering where the Deputy Prime Minister is. They must have seen him leaving the House with that look of guilt, that sheepishness on his face, as he saw all those budgets, the November budget, the June budget, disappearing before his very eyes. It was a sight to behold, the embarrassment of that man.
The Minister of Finance, in one simple act today, has acknowledged that the November, 1981 budget of the Deputy Prime Minister was a total disaster and the worst budget the country has ever had in its financial history. No less than eight more pieces of that budget have been cancelled. That is in addition to the 36 changes that have already been made in the

October 27, 1982
The Economy
budget. These latest changes, Mr. Speaker, have caused significant concern and hardship to many Canadians, Canadians who feared that they were going to be losing their dental and health plans, as well as small business men, professionals, accountants, the retailers of the country, charitable organizations and northerners.
I should point out, Mr. Speaker, that the treatment of the northerners still is not much improved over what was in the budget. There is still a great deal of uncertainty as to what is going to happen to the people living in our north and who are suffering so much with the current economic downturn. These were proposals that hurt our economy. They caused uncertainty, they caused a tremendous amount of time lost by people fighting these proposals at a time when the economy can least afford that diversion.
I welcome this new-found sense of co-operation that the Prime Minister spoke of today in Question Period, that he will accept openly any proposals that the opposition suggests which will improve the situation. But why has the Prime Minister taken so long? Why has it taken a full year to get these changes into effect? We welcome the tax changes. We should, because we have been fighting for them for approximately 12 months alongside those people who are affected.
Last January, some 62 Members of the Conservative caucus travelled across this country meeting with Canadians from coast to coast, seeking out their concerns, seeking out their ideas as to how the situation could be improved upon, what changes should be made in the budget. We made a full presentation of this in a report that was issued some eight months ago, but it has taken all this time for the Government to come to its senses and understand the nature of the changes that were proposed last November, the impact that it was having on the social fabric of the country, as well as the economy. Why did we have to wait so long? Why were the original proposals made and why did it take such a long time to change them?
This enormous flip-flop, this incredible admission of incompetence, of lack of understanding, is not complete. There are still more changes to come. There are still more changes that we will be fighting for in committee, changes which will affect farmers, small businessmen and home owners. There is still the uncertainty because the number of changes and proposals that the Minister has made has pushed the decision out one or two years into the future. The uncertainty is still there, and if there was one message that came through loud and clear in all the hearings we have had on the budget proposals this year, it is that the uncertainties are just killing people's ability to make decisions, killing our ability to fight the recession that we are in now.
The Minister said in his speech that we have been demanding budgets every three months. We did, Mr. Speaker, and I make no apologies for that. We did, because that budget of November, 1981 was wrong. Canadians wanted a change. We wanted a change. And it has taken almost 12 months to get those final changes made. One has to ask oneself a question: do we have a new standard of ministerial responsibility being presented to the country today? We have the Deputy Prime
Minister, the author of that budget, still in the Cabinet, when the Deputy Minister of Finance has quit, when the Principal Secretary to the Cabinet, who is very much a part of that budget, has also quit. But where is the Deputy Prime Minister? He is still in his seat in the House of Commons. This in other parliamentary democracies would just not be accepted.
I would like to comment now, Mr. Speaker, on the substance of some of the presentations that the Minister made today. He talked about tight control of Government spending as being one of the answers to reducing the size of the government deficit. Those are only words. They are words we have been hearing for three years now, but they are words without any substance, because, again, in this budget, Government spending is still increasing at 20 per cent per annum, the same as it increased last year. The figures in the budget for the period from 1976 to 1982 are misleading, and 1 will debate that with the Minister any time he wants to debate that point. They are misleading. They are comparing apples and oranges, and Canadians are being misled by them.
I want now to discuss the impact of something that is quite within the control of the Government: Government spending on the administrative costs of departments. The minister has said there are statutory increases in spending that cannot be controlled without changing the laws. Let us look at some of the administrative costs. In the 12 largest departments of the government, the administrative costs in the estimates for 198283 compared to the forecast expenditures for last year are projected to increase some 17.1 per cent.
Let us look at some of these departments: Agriculture, 22.8 per cent; Employment and Immigration, 40 per cent; Indian Affairs, 14 per cent; National Health and Welfare, 32.5 per cent; Transport, some 20 per cent. That is not an indication of a government that is serious about controlling its expenditures. That is where the Government can take some action, but they have shown no indication that they understand the importance of displaying some spending control. They continue to spend money without any regard to what is going on in the country, without any regard to the fact that they have put forward a six and five program, calling on other Canadians to hold themselves to 6 per cent, but still going blithely along at 17.1 per cent.
In this budget that the Minister has just presented, unemployment insurance premiums are going to increase by 40 per cent. This is purely and simply a tax increase. It is a tax increase when it can be least afforded and it is another colossal error of the previous minister of finance in that November budget. You will recall, Mr. Speaker, the unemployment insurance premiums at that time were reduced, reduced at a time when we were facing record high unemployment, when we knew that there would be record demands on the unemployment insurance fund. If those premiums had been held level last year instead of being reduced, the shock to the economy would have been far less severe than this 40 per cent increase now, and could probably have been held to something in the 15 per cent range.
October 27, 1982

The Minister announced a 500 million dollar job-creation program. 1 guess we have to say, Mr. Speaker, it is a step in the right direction. They have addressed the problem of unemployment in this budget, but it is a very small step. Five hundred million dollars sounds like a lot of money but it is S300 per unemployed worker and amounts to some one quarter of one per cent of the total size of our economy today. It is a step in the right direction but we have a long way to go, and we on this side are convinced that the only way to achieve true, permanent job creation is a set of policies, which I will come to later, which will address the problem of 1.5 million people unemployed, not 50,000 here or 30,000 there.
Now, the Minister also announced that the government is going to spend some S400 million on the west. Mr. Speaker, I may be hard of hearing, my memory might be short, but I seem to have some recollection that the previous minister of finance was talking about another figure, and I think this Minister forgot a zero. I think we were talking about a $4 billion Western Development Fund some two years ago. There is another aspect of this. Perhaps the Minister is simply saying to us: when we tell you that we are going to do something, we discount it by 90 per cent.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: Now, Mr. Speaker, we also welcome the decision that the Minister has made on the Lortie Commission to accept its recommendation to provide some relief on the capital gains tax to Canadian public companies. This is the right direction to take and we are pleased that he has taken that step. We are also pleased that he is not proceeding on the indexed term deposit. This would have been a very dangerous step. It would have led this country directly into wide-scale credit allocation by a small coterie of bureaucrats and politicians in Ottawa doing things that the broad economy should be doing.
So that is the right decision. However, having taken that decision, the Minister has to acknowledge-and he did not in his statement-that those who proceeded to take the advice of the Prime Minister (Mr. Trudeau) and the Deputy Prime Minister (Mr. MacEachen) and the Minister of Finance and the Minister responsible for housing, who is in the House today and who encouraged Canadians to go ahead and buy a home because this proposal was going ahead-in the words of the Minister of State for Finance (Mr. Cosgrove) "there is no question of chance, the plan will be implemented". Canadians responded to that, they bought houses, they put their money on the line, and the minister has a responsibility to tell those Canadians what he is going to do to protect them after taking on that high cost mortgage three or four months ago. That is a responsibility that the minister has not discussed today.
Now, the Minister today, and the Prime Minister last week, tried to tell Canadians that we are doing better in this country than many other countries in the world. But let us take an objective look. Mr. Speaker, 1 want to give you some of the facts that the Prime Minister did not lay on the table last week
The Economy
in his fireside chat and that we did not hear from the Minister of Finance today, facts which will help Canadians understand why we have 1.5 million people unemployed today.
Euromoney, a respected international financial journal, sets out annually a survey which has a composite indicator of all the broad measures of the economic performance of 81 countries; economic growth, inflation, exports and exchange rates are all included. Where do you think Canada fits into this survey of 81 countries, Mr. Speaker? It is No. 40, over a period from 1974 to 1982. This is not Progressive Conservative research material, this is Euromoney material, an objective observer of the international scene. In the most recent 12 months we have slipped from No. 40 to No. 55. Who do you think is beating us? Saudi Arabia, sure. Germany, Japan, the United States. We would expect that. But how about Cyprus, Burma, Honduras, India, Pakistan, Papua and New Guinea? These countries are all ahead of us. I can produce that chart for any member of the House of Commons who wants to read it.
The reason we have suffered so much in these past two years from the international stresses and strains in the economy is that No. 40 position. For 15 years now our economy has been gradually weakened, year in and year out, by successive Liberal Government policies which have gradually eaten into the strength that we enjoyed some ten and 15 years ago. So that when interest rates in the United States shot up, our rates shot up even further, to as much as four to six percentage points over those in the U.S. Why? Because our inflation rate was higher and because we were suffering a record outflow of capital over the past two years. When the international economy slumped, our economy slumped further. Why? Because our productivity rate has been the lowest of the industrialized countries for the past eight years, and this has been compounded by the attack on productive investment in the November, 1981 budget.
When high interest rates and slow growth have caused 1.5 million people to lose their jobs, the federal government has had little resources to draw on to fight unemployment. Why? Because for ten years we have had reckless Liberal spending and a total disregard of the deficit problem, which has resulted in the staggering budget deficit the Minister told us today of some $23.6 billion.
Now, Mr. Speaker, this mess did not just start in 1980 with the National Energy Program or the budget of November, 1981. It started back in the early 1970s when Edgar Benson brought in his tax reform which favoured redistribution of wealth and ignored the creation of jobs and technology and economic growth.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: The tax reform favoured consumption and discouraged job creating investment. Then, with John Turner, this whole thing continued because he presided over a period of reckless government spending, increasing in one year by 26 per cent; uncontrolled monetary policy where the money supply

October 27, 1982
The Economy
increased at a rate approaching 20 per cent, and this fed the inflation problem in a most serious way and resulted in the anti-inflation program that came in two weeks after he jumped ship. Also during that time we had a total loss of control of the collective bargaining process in the public sector.
As 1 said, this led into the Anti-Inflation Board. Period under Donald Macdonald and the current Minister of Energy, Mines and Resources (Mr. Chretien), a period of government regulation and intervention which has been unsurpassed in Canadian history, except in wartime, regulation which produced bottlenecks and discouraged investment. It was a period during which the government was going to address the structural problems, it was going to solve some of those structural problems which were leading to inflation in the country. But nothing was done during that period and the result has been runaway inflation and the high interest rates of the past two years.
Finally, we have the period under the current Deputy Prime Minister, the former Minister of Finance, who presided over the destruction of our oil and gas industry following his first budget, and the rest of the small and large business community in his second budget.
Now, a common thread, Mr. Speaker, through all of these Ministers of Finance was that none of them had a business background prior to becoming Minister of Finance. They did not understand management.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: They did not understand the importance of the economic problems, they did not understand the importance of the deficit or the importance of investment in new technology. That is the background we are looking at today, Mr. Speaker, which tells us why we have the current mess that we have today. And what the Prime Minister and the Minister of Finance neglected to say is what I have set out before the House today. All the Prime Minister said was, "Trust us. Trust us and we will win. We will beat inflation". But we are going to beat inflation, Mr. Speaker, not because of six and five; that has hardly taken effect. We are going to beat inflation because the economy is so desperately weak that there is no demand to push prices up. The six and five in fact may even hurt the economy because if it is not administered in an equitable way, people are going to turn away from the desire that the government has set out of people pulling together to beat this thing called inflation.
If people think they are being tricked because some civil servants are getting six and five and others are getting nine and ten, if TransCanada Pipelines are getting 16 per cent and Bell Canada getting 6 per cent, if we have the beer excise tax going up by 15 per cent-if all these inequities are allowed to slip into the system, people are going to ask whom they can trust in this Government if that is the way it is playing the game.
The problem with inflation today is not the private sector; the problem with inflation is Government regulated prices, prices for government services and excise tax on various commodities. The Minister of Finance knows that since the beginning of this year the federal excise tax on natural gas has gone up some 80 per cent. That is the problem with inflation in this country today.
Economists are predicting that inflation will drop, that it will be down to well below 10 per cent next year because of that weakness in the economy. What we need today is not a continued fight against inflation-we have to maintain the pressure there-but a shift in direction to free up and encourage the private sector to invest and to create jobs. The problems today are with the million and a half people who are without a job; the problems today are with the 500,000-odd people who are running out of unemployment insurance entitlements because they have been out of work for too long.
And the Prime Minister asks us to trust him. The Prime Minister says that if we trust him everything will be all right. When Canadians across this land wake up in the morning and ask themselves, what is this Government going to take from us next, confidence is replaced by suspicion and trust is overwhelmed by fear. That is the tragedy of the Prime Minister's three-part series last week. That is the misfortune of the statement of the Minister of Finance today. That trust is gone. The response is empty. Today's rhetoric is not enough. Canadians are saying, "Don't tell me, show me". Canadians want opportunity; They want security. These goals are linked because opportunity leads to growth and growth brings security.
People ask me how the private sector creates jobs. Fet me illustrate by telling of two Canadians-not big businessmen, but two Canadians who are trying to build a good life, Canadians who thought they had a secure future and were providing secure jobs for other Canadians.
One of these Canadians appeared before our budget committee last January. He told us he left a major U.S. subsidiary some ten years ago and competed against it in a small way quite successfully and built a nice business which employed 55 people. I asked him if ten years ago there had been the same tax environment as there is today, would he have left the company with the higher salary, the perks and the security of a larger company to go out and risk it all and try to build this business. He thought for a moment and said, no, he would not have left that company. If he had not left that company, 55 people working for him today would not be working for him, they would not have those jobs.
The other man is a constituent of mine. He employs 26 people. Three times since the November budget, which hurt him very, very badly, he took specific steps to move his business to the United States. If things do not change, if there is not a better environment, if he does not see opportunities here, he will leave and the 26 people currently working for him will be out of jobs because he is the driving force in the company.
October 27, 1982

This is the way jobs are created by the private sector-by individual Canadians who are working hard but who are fragile individuals. We have seen how the goals and lives of these people have been seriously hurt by government policies in the past year.
Budget deficits of the size of $24 billion can destroy jobs and undermine security in the country today. The budget deficit we have seen today causes the Government to panic and grab money from people wherever it can get it. Tax incentives are removed, small businesses dry up, jobs are lost, health and post-secondary funding is cut back and health care and education suffer, pensions are cut and universal social programs are threatened.
When the elderly and the unemployed need the safety net and security which governments can provide, at a time when Canadians need government assistance the most, the Government cannot produce because it is broke. It cannot find any more money.
For years the Liberal Government has ignored or never understood the problem of the deficit. I can still remember that in 1979 the Prime Minister, the finance critic of the Liberal Party at that time and the NDP as well, asked why the Conservatives were so preoccupied with the Government deficit? They asked what the problem was with the Government deficit.
We now know, Mr. Speaker. It was because successive Liberal Governments have attacked the private sector, the producing side of our economy, for 15 years. The results are clear in that No. 40 position which I showed in the Euromoney study. The results are clear in that position in the economy today.
I said earlier that Canadians want opportunity and security. When opportunity is blunted, security is threatened. The nation's elderly can never be secure unless the nation's productive workers are encouraged to seek opportunities. That statement is more true today than ever before. Since 1976 our population over age 60 has grown by 800,000 people. Our population under age 20 has declined by some 700,000 people. What is missing from the Prime Minister's statement last week and the Minister's statement today is a plan on how to encourage people, how to challenge people to create jobs, to develop a productive side of the economy-the people who will provide the security for our seniors.
We must start now to change the policy direction of the government, to strengthen our economy, to avoid being battered by international pressures as we have over the past few years, to develop a strong private sector and to encourage job-creating productive investment.
We must set an environment to stimulate growth to help Canadians face the future with confidence and optimism. These are the policies we have been setting forward for a number of months and I should like to summarize them now.
A Progressive Conservative government would reduce the deficit and the size of government. We would redirect and limit government spending.
The Economy


An Hon. Member:: How?


Michael Holcombe Wilson: The Hon. Member asks how. I set out just two minutes ago that the administrative costs of government have been going up by 17 per cent. Surely even the NDP can understand and see where a little money could be saved.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: We would simplify the Income Tax Act and encourage risk-taking investment. We would create a positive and open investment climate by reforming the Foreign Investment Review Agency and rewarding the creation of job opportunities and economic growth. We would amend the National Energy Program to reduce government red tape and eliminate government confiscation.
We would reduce the burden of government and unnecessary regulation. We would assist Canadians to reach the forefront of new technology with aggressive research and development policies. We would support Canadians, particularly those who are out of work today, in training and education programs to take advantage of this new technology so that they will see it not as a threat to their jobs but as a path to a better job. We would encourage small business to start new businesses.
People have said we need lots of megaprojects in this country. What we need are mini projects; small businesses starting up and creating jobs, as did the two men I referred to a minute ago. We must continue to reduce interest rates through sensible monetary policy and a tight control of Government-regulated prices which, as I said a minute ago, are at the heart of our inflation problem. Finally, we must expand Canada's trade potential, particularly in the Pacific Rim countries.
There is no magic in this Program, there is no quick fix, and there are no major government spending programs here. We know where we want to go and we know how to get there. The combination of these policies will set a clear framework for success, a clear change of direction from the past 15 years. It will send a clear message to businessmen, such as the two small businessmen to whom I referred, that they can build and grow and prosper in the country.
Governments cannot fine tune an economy. We have learned that painful lesson time and again as the Liberal Government has drawn more decision-making into the bureaucracy, and it has not worked. Governments can set the environment. We have seen how bad management, runaway deficits, tax laws and a lack of understanding of the importance of investment can kill an economy.
The Progressive Conservative approach provides a clear change in that environment. It will lead to more economic growth and more jobs. The Liberal policies have led us into a zero-sum world. It is a world of factionism and mistrust; one man's gain is another man's loss. That is the fatal flaw of the message of the Prime Minister last week. He says that we must

October 27, 1982
The Economy
have trust and that we must be generous with our neighbours. But when people are struggling for survival, when people fear that they will lose their jobs or that their children cannot find that first job, there is not much trust and generosity. Rhetoric will not produce the harmony we all want, but a healthy economy will.
We must reject the zero-sum world of the Liberal Government. We must move in a new direction where Canadians are encouraged by a government which understands the value of risk investment, investment that will create jobs, a government which understands the importance of competent management, and a government which knows that security only comes with a healthy economy.
Last week Canadians in three ridings rejected the zero-sum world. These Canadians confirmed recent Gallup polls. Canadians want this new direction. Canadians want to be proud of our country. We were proud of our country in 1967, of our people, of our way of life, of our industries and of our position in the world community. But Canadians have been robbed of this pride in recent years by 15 years of neglect and mismanagement.
Hon. Members today must take the first steps to regaining that pride, that hope for the future, that opportunity to rebuild the country of which we were so proud 15 years ago. The Minister's statement is a start, but it is only a very small start; we must go much further.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, before I comment upon the observations of the Minister of Finance (Mr. Lalonde) this afternoon, I should like to put this debate in the context of what the country is facing right now. Up to this point in 1982 we have had somewhere between 9,000 and
10,000	businesses which have gone bankrupt. In real numbers we have had something like one and three-quarter million Canadian men and women unemployed, people who would like to be obtaining cheques for working, not cheques from the Unemployment Insurance Commission or the welfare office. Because of the Liberal Government's total lack of concern with the seriousness of the economic situation, 1 want to indicate to the Minister that between now and Christmas we will have the loss of probably between 80,000 and 100,000 more jobs. Also we will have-and it is a conservative estimate-about 2,000 more businesses which will have gone bankrupt. Every region and every sector of the Canadian economy is affected by the recession that we are going through. That is the situation in which the Minister made his statement that went on for 25 or 27 pages.
What has the Minister come up with for the men and women who are looking for some hope? They are not looking for a pie in the sky or a quick fix. They want to believe that between now and Christmas there is some reason for economic hope; they are looking for that. What did the Minister come up with? I ask the Conservative critic to check his numbers. If he looks at the direct spending program and reads the fine print of the Minister, it is for 18 months, not 12 months the $500 million allocated for direct job creation would not even be adequate for 12 months. If we add the slight changes that were
made in housing spending to the changes in fiscal outlay which the Minister said we will now get for direct job creation, we will have a total, in an economy measured in billions of dollars, of $480 million being allocated for job creation. This will create at the most some 60,000 jobs. What we need in a crisis, because surely that is what we have, is a crisis program. In Canada right now we need a national recovery program, not the pittance thrown out by the Liberal Government this afternoon.
I will return to the Conservative Party in a minute, but all I can say at this point is that if cliches were a substitute for policy, we certainly heard them from the group on my right today. Having said that we must address those concerns, I want to underline it for those of us who have jobs. For some of us in the House of Commons they will be temporary jobs, I am convinced, but those of us who are working must consider the effects of the unemployment crisis. Michael Harrington of the United States wrote a book a number of years ago about the hidden poor. In a human sense we have in Canada the hidden unemployed. There is a great tendency for us to think in this land of ours that because we have unemployment insurance and the social fabric of the welfare state, not completed but at least in place in a way that it was not in the 1930s, somehow the men and women who are unemployed are not really suffering. There are Hon. Members on all sides of the House who have talked to the unemployed, but I do not know if there are Cabinet Members who have done so. The kind of unemployment we are experiencing now has a corrosive effect on the affected people, of which anyone who is at all sensitive is fully aware.
Men and women in this country want jobs, as we have said on other occasions. It is true that they want jobs; they do not want handouts. They do not want from their national Government 25 or 27 pages of so-called analysis. They would like to see a 25-page program which could be implemented now; that is what they want. There is a human concern out there which we must address. It is very real. Rather than coming up with a Program which is a drop in the bucket in the short run of less than $500 million, we are proposing a spending Program in the short run of more than four times that amount. We do so and do not hesitate to do so. If the Tories are afraid to mention dollars because of some kind of perceived backlash, I can say that we in this Party are not afraid to talk about the need for spending to meet a human requirement right now-to create jobs. We say that by spending $2.2 billion, using the same multiplier the Minister used in his figures earlier today, we would be able to create a minimum of 250,000 jobs for the men and women who need them.
Again unlike the Liberals and unlike the party on my right we are prepared to say concretely that those who are in a position to help pay now should be out there in the front of the line with their pay cheques, because the time for rhetoric about
October 27, 1982

justice, the time for rhetoric about caring and the time for rhetoric about co-operation is over. It is time to start implementing the socially desirable goal right now.
Therefore, we are prepared to say-and I did not hear the Tories talking about this nor did I hear it coming from the Liberals-that it was a social injustice of high proportions that we put a six and five wage and salary control guideline on the people in the federal public sector urged the provinces and urged the private sector to follow suit-which the Tories supported-and at the same time cut by over $ 1 billion the tax paid by the wealthiest people in this country. That is a disgrace.
We say there is a source of revenue.


Mr. Gamble:: Another illusion.


John Edward Broadbent: Another illusion, says a Tory. 1 say to the member who just spoke, after having heard the Tories' speech, there has been one Government in the world that has implemented the Canadian Progressive Conservative Party's program and that is the Government of Margaret Thatcher. Britain's unemployment rate has risen 38 months in a row under Margaret Thatcher, and the same thing would come from the Tories here.
We say that if we need money to create jobs, we are prepared to start practising a little of the equity that other parties talk about. We would rescind the tax cut that was provided by the Liberals last fall for upper income Canadians, and we would say "Yes, indeed, if workers are going to be holding down their incomes to six and five and if pensioners in this country are going to pay income tax, then it is time to put a surtax on upper income Canadians to get money to help create jobs that are needed now."
At the same time we are saying that if the Government had looked with some imagination at federal spending programs- and again I did not hear any specifics from the Tories-it would find that there are areas in which cuts could take place that under normal times I say would not necessarily have to be cut at all. If, however, there are areas of federal Government spending that do not have as their leading priority job creation, then we in this party say that many of those areas should be cut out, and we do not hesitate to say it.
Therefore, in this context we have proposed that the planning under way to spend money on embassies abroad in the coming year be cut. Also, of money that is being spent in the National Unity Information office we say that one-third of the over-all budget which the Government allocates for publicity for its programs could be cut. If we did that, we would have a saving in public spending already allocated of some $400 million, and $1.3 million would come from surtax.
Finally, we would take another program introduced by the Minister. I see the Minister questions the surtax figures, but we have checked and double checked, and we stand by our figures. I say to the Minister that his department is the last in this country that should try to correct anybody else's figures at this time.
The Economy


Marc Lalonde: It is National Revenue then?


John Edward Broadbent: I come to another proposal. It came in last fall's budget which came from the Minister who was then the minister of energy. He provided a special kind of handout to the oil companies. I refer to the PIP grants. We said at that time when we voted against them-the Tories, of course, voted for them-that it would lead to irrational investment. We said that, if we wanted to Canadianize the oil industry, we should do it as do most other energy producing countries in the world, that is, use the public sector to do it and not the taxpayers' money to finance private investment. We voted against that Program.


An hon. Member:: Really?


John Edward Broadbent: I tell my hon. friend to check the voting record. We voted against it, not only because we have a public instrument which we say is a better way of dealing with the energy sector, but also because we said it would lead to irrational investment, even if you wanted to go the private sector route.


Some hon. Members:: Oh, oh!


John Edward Broadbent: If the Tories would calm down, I will tell them something about what happened. They should know, among others because I have heard some of them complain, that a monumental disaster occurred, the biggest private disaster in Canada since the Second World War. I am speaking of the Dome Petroleum situation. That bail-out, which was inappropriate, was the direct result of this Government's program, supported by the Tories. We say to that cut that out.
We say that if the Government will not cut it out, at least let it give us $500 million out of it and put that money into direct job creation.
I want to say something now about the way we will spend the money. We have the naive view on this side of the House, unlike the Party to my right, literally, figuratively, and in every other way, that an opposition Party, particularly at this point in our history, has an obligation to say what we would do. That is an obligation.


An hon. Member:: You have not had a single idea.


John Edward Broadbent: We would take this money now, recognizing that there is unemployment from British Columbia in the west to Newfoundland in the east, and put some $220 million into reforestation programs that will not be "make work" but would do for our reforestry what western Europe has done for its forests for decades, that is to manage forests in a sensible way so that when the market picks up in very significant proportions at the turn of the century in the United States, we will have the trees to service the market. In short, we could create jobs now for an immediate benefit, but also we would have a long-run economic benefit for our forests. That makes sense.
Similarly, we would not put the pittance in housing which the Minister has talked about; we would immediately inject some $500 million into housing to create more jobs in many
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October 27, 1982
The Economy
sectors of the economy. In particular, we would deal with those one-industry towns, normally in the resource sector, that are so terribly affected now, whole communities like Port Alberni, like Sudbury, like Faro in the Yukon, like Rouyn-Noranda in Quebec, like Bathurst, and like the Miramichi region in New Brunswick. I am talking about communities totally dependent upon one sector of the economy that are now experiencing horrific social consequences as a result of this recession.
In the short run we would allocate part of the moneys that I have just talked about to these communities. On behalf of my colleagues, starting on Friday in Sudbury I will be announcing very specifically what can be done in one-industry towns where there is a crisis problem now. Things can be done Mr. Speaker, and I looked for a little imaginative action coming from the Minister on that side of the House about what can be done for these communities.
Another example is the situation concerning the fisheries on both coasts. We would use part of the money for fishery enhancement programs that many Members on all sides of the House have talked about. We in this party believe money should be allocated for that purpose now.
These are just some of the areas and sectors on which in the short run we think money should now be spent to create jobs that are badly needed by men and women, young and old, who want to work.
But having said that, what we have heard from the new Minister of Finance is just a repetition of his predecessor's crisis management, just stumbling from one situation to another. If the short run program is so in adequate, in human or in economic terms, as I think it is, then I ask you, what about the long run? Here is a Minister who used to pride himself in trying at least to address the long-run interests of the country. There were a number of aspects of the National Energy Program which this party supported because some contents in that program did have the long run in mind. I want to say that he, as Minister if Finance, has revealed himself as the ultimate Liberal once again, because we have no perspective at all of what lies beyond the end of this year, let alone beyond the next election.
In the next couple of minutes I want to address an unstated assumption, both by this Minister in his presentation today and also by the Conservative Party to my right, because I think it is a very serious one. The unstated assumption is really that the marketplace must be relied upon to get us out of our very difficult situation.


An hon. Member:: Good idea!


John Edward Broadbent: One of the Conservative Members says, "Good idea!". I would ask that hon. member to compare what has been happening in Great Britain for the past 38 months with what has been happening in other western European countries. Only one country has had 38 months of perpetual
increase in unemployment. That has been under Margaret Thatcher, because she has relied entirely upon the marketplace. That is what happened.
Through Your Honour I want to urge the people of our land, particularly right now, to think historical terms and to keep in mind that this not 1932, it is 1982. Much has gone on in other countries in the world in the past 50 years. If the Party to my right wants to take us back in history and if the Liberal Party is already doing that, they can go that route. There is one Party in this land that believes we should learn a little from history and from what is going on in other countries so that we can create a country which will be decent and exciting in the future. We do not want the past.


Some hon. Members:: Hear, hear.


John Edward Broadbent: Therefore, I would ask a rhetorical question of my friends in the Conservative Party and in the Liberal Party opposite as individuals. Many are friends in this House even though we have profound differences about policy. I would ask them to really think about what they are saying and to consider whether it has been our overwhelming emphasis on the private sector alone in this country in the last 30 to 35 years which has got us into a situation where we do indeed have low productivity, where we are not carrying out research and development, where "management in this part of the world, unlike western Europe and unlike Japan, is too preoccupied with the short-run buck, not enough concerned with long-run investment". I do not quote from a socialist source but, rather, from the Harvard Business Review.
If the private sector alone has created this mess that we are now in, why, in heaven's name, should we turn back to the private sector to get us out of the mess? That is the question.


Some hon. Members:: Hear, hear.


John Edward Broadbent: Therefore, we in this party, like the Social Democrat movement in western Europe, would ask a question. There is not a country in western Europe with a Social Democrat Government which has an unemployment level which is even half of ours. I ask the Minister, and maybe he should ask the question: why is it that West Germany, Sweden, Norway and Denmark which, of course, are having difficulties now, have unemployment levels which are less than half our level?
I now come to the substantive point which I wanted to make to the Minister. He should understand it. I wish he would only act upon it. The point is that these societies in western Europe learned from the Depression. Overwhelmingly, they had Social Democratic Governments. However, there is another country on the other side of the Pacific Ocean, Japan, which has not a social democratic government. I say to the Minister and to the Tories that there is no major economic decision made in that country called Japan without the full involvement of the Government of Japan. The Japanese know what they are doing. They do not rely on the unfettered results of the marketplace.
*

October 27, 1982

1 say that what distinguishes us as a party from the Conservatives and the Liberals is that we want to deal with realities. We do not want to deal with myths about private enterprise. We want to deal with the reality of facing our mixed economy now, in 1982, because that is what it is, and finally to make it work for the people of Canada. We want to make changes to achieve that. Specifically, we say it is necessary that the federal Government show a little leadership. God knows, it has made bad decisions in the past. We should have a government which should commit itself to a plan for the future. It should consult with the Provinces, by all means, in a federal state. That is essential. It should consult with labour and with the private sector. But then, like the leading nations in western Europe, like Japan, the federal Government, the Cabinet, should bring before the Parliament of Canada a development plan for this nation and should say, "Over the next decade, this is where the money will go to create long term jobs for the people of Canada". That was totally lacking, of course, in the approach of the Minister today.
I want to say that we were not only concerned about the inadequacies of the short run and long run programs. What was more alarming in the sense of equity was the proposal to increase the U1C premiums. As I said, during the past year the Government cut the taxes of the richest people in our land by over a billion dollars. The Government has imposed a six and five guideline program on the working people of Canada at the same time. The Government reduces the cost to the rich with one hand and increases the burdens of the workers with the other. That is what it did between last October and last August. But now what is the Government doing? It is coming along and saying to working people, men and women, "We will increase your premiums by 40 per cent".


John Albert Gamble: And employers.


John Edward Broadbent: And that of employers, yes, but I am not referring particularly to the people who got it in the neck so far this year. The Government will increase it by 40 per cent. This is not six and five, which the Government keeps preaching. This is not a 6 per cent increase or a 5 per cent increase. It is more than a 6 per cent times 5 per cent increase. It is a 40 per cent increase. We must keep it in mind that this is really a form of taxation.
It was not recommended by the labour movement, Mr. Minister, and you can check your records on that. I listened to the Minister's wording with care. He said that he had consulted labour and management. I say, through Your Honour, that the Minister did not say that labour supported it, because he knows darned well that no labour movement in this country would accept such a regressive tax as a 40 per cent increase on the premiums paid by ordinary workers.


Marc Lalonde: You do not accept anything.


John Edward Broadbent: 1 do not think Your Honour could have a better example of the hypocrisy of the Prime Minister (Mr. Trudeau) than what we heard last week when he spoke of the need for fairness. I think one of the wonderful phrases was that
The Economy
the strong must help the weak. Of course, we reject the notion that unemployed men and women workers should seem to be the weak. They are unfortunate citizens who are out of work because we have not managed our economy appropriately. Surely we have had enough of this hypocritical rhetoric. If the Government of Canada is bringing in what can only be described in historical terms as a reactionary program, as a program which wants to take us back in the form of economic decision-making to a distant past, to take us back to a distribution of income which was inequitable and is becoming more inequitable, then for God's sake at least spare us the rhetoric about justice and co-operation. If the Government Members are to be reactionary, let them be honest reactionaries like those in the Party to my right.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, my question is directed to the Minister of Finance (Mr. Lalonde). I believe the Minister set out eight different items that he was withdrawing from the November budget. However, he did not make any change in two key areas. In particular because of the significance of the economic impact, why did the Minister avoid making a change in the capital cost allowance, which has clearly had an impact on reducing the level of investment in Canada?


Marc Lalonde: Mr. Speaker, obviously there are a number of areas where additional changes could have been made. All would have had significant impact on increasing the Government deficit and loss of revenue.
I examined this particular issue very carefully. I found that the changes which had been proposed are quite appropriate, and I support them.


Michael Holcombe Wilson: Investment activity creates revenue because it creates jobs. It provides people with employment and takes people off of the unemployment rolls. Surely, when the Minister was making that decision, he could have taken into account the revenue-generating impact on that and reinstated that particular credit because of its impact on job creation. Could he answer the question in the context in the investmentgenerating impact and the job creating impact?


Marc Lalonde: Again, one could decide to abolish the corporate income tax completely and decide that the companies will use the money for all kinds of good purposes for creating investment and jobs. One could do the same with personal income tax. People would find all kinds of uses for the money they would be left with. However, as long as you have a state, you have taxation, expenses and public programs. You need to raise funds.
In this particular instance, the Capital Cost Allowance is one of those benefits that could be adjusted, and this is what we have done. I completely support what my predecessor has done in that regard.

October 27, 1982
The Economy


David Edward Crombie: (Rosedale): Mr. Speaker, ! also have a question specifically relating to the program which the Minister has entitled the New Employment Expansion and Development Program, the NEED Program. I believe that most of us would have understood what the Minister was saying if he had said that the allocation of the $500 million was to create
60,000	jobs over one year. My question relates to the source of his data, that he could look after that need by creating 60,000 jobs over 18 months.
As 1 understand the rule of thumb used by the Minister of Employment and Immigration (Mr. Axwortny), the Government would have been at least technically in a position of having to create 60,000 over a 12 month period, not over an 18 month period. I am conerned that the Minister's data is faulty and therefore the allocation of funds will not be sufficient for the so-called exhaustees between now and June.


Marc Lalonde: The Minister of Employment and Immigration will be available to answer specific questions on that particular Program. I just want to point out that it will take a few months, first of all, to gear up the Program. We have to have consultations before the Program can begin to be implemented. The money is proposed today but I doubt funds will be available to start before the beginning of 1983.
Therefore, when you are calculating the time of this announcement and the time that the Program will come into effect, I think this adds a few months to the Program. 1 suspect that this is the reason why this period has been mentioned.
In addition, there are some expenditures that are incurred after the Program is technically terminated in the sense that you are not starting new projects, for instance. Even after the Program is stopped some projects still continue for a few months because they have come in before and are, let us say, three, four or five month programs.
I suspect the total expenditure of the Programs will be spread over 18 months, but 1 will ask the Minister of Employment and Immigration to address this particular situation and provide the Hon. Member with more specific information.


David Edward Crombie: My supplementary question relates to part of the problem he described in his answer. That is, when a program is gearing up he knows that between now and the end of the year more people coming off the unemployment insurance benefits will be going on welfare. The Minister indicated on page 14 of his statement this afternoon that he was going to have further consultations with business, labour and other parties. I wonder whether or not that included any discussions with provinces and municipalities with respect to any change in the Government's contributions under the Canada Assistance Plan which could assist municipalities with respect to welfare payouts?


Marc Lalonde: No, Mr. Speaker.


Mr. James A. McGrath (St. John's East):: The Minister announced that the Canadian Home Ownership Stimulation Program will only apply to first-time buyers of new houses as of next January. I can understand that in some respect because only 22,400 of the 63,000 applications taken up so far have applied to new houses. My concern is that Mr. Lortie, in his recommendations, recommended against the mortgage reduction scheme because it would apply only to new houses and would hence have a distorting effect on the marketplace. How will the Minister get around the distortion of the marketplace, which I think will happen, if he applies the Home Ownership Stimulation Plan as of January to new houses only and not to first-time home buyers?


Marc Lalonde: Mr. Speaker, the Hon. Member would have a very good point indeed if it was a permanent program, something that would be in operation for all time where one would have that kind of distortion in favour of housing at the expense of other allocation resources. But this is a short-term program. It will expire at the end of April. It is aimed at stimulating a sector of the economy that is extremely weak at the present time and which, as the Hon. Member knows, has significant impact in terms of tertiary job creation.
This is the reason why the program is continued, in order to try to prime up this particular sector which has been very weak this year indeed.
I agree with him that if this were a permanent program it would have the impact which he has mentioned. However, on the basis of a short-term program, to inject funds and encourage the consumer to buy new houses, we think this is a valid approach.
I would also say that, looking at the decline in interest rates which has taken place since June, and looking at the fact that the price of houses has declined on an average across the country, I would hope that we will see a resurgence of activity and that house builders will get into business. Inventory of new houses has been drawn back in the last few months. I hope that we will see a serious rise in that sector.


James Aloysius McGrath: We can only hope that the new Minister of Finance (Mr. Lalonde) is not taking his advice from the Minister of State for Finance (Mr. Cosgrove), the former Minister responsible for housing. We know the disastrous consequences of that.
Can the Minister tell us why he is proceeding with the Canada Rental Supply Plan? As the Minister knows, of the
30,000	units permitted for the Canada Rental Supply Plan in the last budget, less than 25 per cent have been taken up thus far. He made no provision for co-op housing. We are facing a problem of affordability. Housing starts are down. That speaks to availability. They were down into the 80,000 bracket in September and August. Why did the Minister not re-direct the money that is going into the Canada Rental Supply Plan, which has not been taken up across the country, and put that into co-op housing where there is immediate demand for
October 27, 1982

low-cost housing and which would provide a quick fix in terms of housing starts?


Marc Lalonde: I will be giving serious consideration to the suggestion put forward by my friend. 1 will examine this particular situation. I thank him for drawing it to my attention.


Mr. Nelson Riis (Kamloops-Shuswap):: Mr. Speaker, I listened with interest when the new Minister of Finance (Mr. Lalonde) was commenting on the six and five program and the fact that a great deal of concern on behalf of the Government is still over the question of inflation. I want to deal with an area which is very close to him because of his previous experience, the question of energy. Considering that the cost that Canadians will experience in the year ahead will certainly have a very definite impact on the rate of inflation in this country, when an increase in the price of energy has such an incredible effect when you consider a country as vast as Canada, will the Minister comment on his thoughts about re-entering negotiations with the producing Provinces in an effort to put a cap on the increases anticipated in the months ahead that will result in a number of percentage points increase in the rate of inflation?


Marc Lalonde: Mr. Speaker, having lived through that experience for a year and a half, particularly before reaching an agreement, I think I would invite my hon. friend to go ahead as an explorer. I would be very happy to give him letters of introduction to the various Ministers of Energy in the various producing Provinces. If he has some success, I will be ready to give him credit for that success.
Frankly, we have a firm agreement with the producing Provinces. Those agreements provide for adjustments in the price of energy, oil and gas in particular. In Canada we are still in a situation of catching up with the international prices for oil and gas. We will end up in a situation where for oil discovered before 1981, we will pay 75 per cent of the international price by next July when we have reached the ceiling. Therefore, we in Canada are benefiting. We have benefited and we will continue to benefit in Canada with oil and gas prices well below the international prices. Provincial taxes in particular have a significant impact from Province to Province, but fundamentally the price of oil and gas in this country will remain below the international prices, all over the country.
The solution is in trying to re-negotiate those contracts. Frankly, I do not think anybody would be well received in any of the provincial capitals concerned. I wish my hon. friend good luck if he wants to try his hand. If he has some success, I will put him in touch with the new Minister of Energy, Mines and Resources (Mr. Chretien). Maybe he will have great success.


Nelson Andrew Riis: Mr. Speaker, the western part of Canada, like all parts of Canada, is experiencing a devastation of the critical industry of forestry. I listened with interest to the statements tonight when the Minister commented on the extension of the
The Economy
existing programs that presumably are to assist and stimulate the housing industry and, therefore, the forest industry as well. We know how successful these programs have been in stimulating housing construction across Canada as well as the forest industry and related manufacturing industry-not very impressive.
My question is, why would people in Canada, who are very concerned about the forest industry, feel encouraged by what the Minister has said tonight? From what I have been able to gather, he has not said anything new in areas that would assist that very critical Canadian industry.


Marc Lalonde: On the forest industry, Mr. Speaker, I would like to point out to the Lion. Member that I have added to date $150 million for expenditures in the area of housing. Second, as the Hon. Member for St. John's East (Mr. McGrath) indicated, the change that I have made to the Home Ownership Stimulation Plan will be restricted after January 1 to new houses so that we will not have some of the takers who at the present time are just buying existing houses. The program will be geared to creating work and building new houses.
As far as the forest and lumber industries are concerned, and I am sure the Hon. Member knows this as well as I do, one should not be under any illusion about what we can do in Canada in terms of the forest and lumber industry.
I was rather surprised to hear his Leader talking about this a few minutes ago. We know in effect that we could close all the lumber plants in Canada, with the exception of two in British Columbia, and that would be enough to supply the Canadian demand. In effect, quite clearly the forest industry in Canada will start a real recovery when the housing industry in the United States has its recovery. There will be a world demand for it.
We have a world-size industry in the forestry field. That will not be true only for housing starts in Canada, but we will be able to sustain the forest industry we now have. It will have to come from a worldwide recovery because we have a worldwide industry.


Roch La Salle: Mr. Speaker, I would like to ask a question to the Minister of Finance (Mr. Lalonde), first of all, of course, about the matter of trust which cropped up so often in his own speech and the television address of the Prime Minister last week, and I would also like to know how the minister can ask employers, and especially employees, to pay 40 per cent more for their unemployment insurance premiums while asking these same employees and employers to accept the 6 and 5 per cent formula or else be penalized. When I think about the just society we were promised, I wonder how the minister can see any equity in imposing the six and five formula at the same time as a 40 per cent increase in unemployment insurance premiums to the same employees.


Marc Lalonde: I must say, Mr. Speaker, that I am rather surprised at the reasoning of the hon. member. First, unem-

October 27, 1982
The Economy
ployment insurance is, as its name indicates, a form of insurance, and insurance premiums increase or decrease according to the risk factor. The hon. member owns a car. His automobile insurance will increase or decrease according to the risks incurred during the year. The premiums are not related to the 6 and 5 formula or to anything else; it is an insurance program. When we lowered insurance premiums in 1981, we brought them down to the level of 1975. We did not ask the workers to take pay cuts because their insurance premiums were lower. Their collective agreements were maintained and the workers did not reduce their salary demands because they could say that unemployment insurance was a different matter, an insurance plan. If there are fewer unemployed, our premiums decrease and if there are more, our premiums increase. It is a simple as that and it has nothing to do with the 6 and 5 formula. Moreover, the hon. member says that we are now increasing the premiums by 40 per cent. What he forgets to mention is that the government of Canada has absorbed 60 per cent of the increase, which means that if all the Canadians are willing to contribute, the government will not increase taxes and will borrow $1 billion to help both businesses and workers so that they will have to pay only 40 per cent and not 100 per cent of the amount as provided under the unemployment insurance scheme. As I noted earlier, the Unemployment Insurance Commission, which includes representatives of labour and management, has specifically recommended the increase I have implemented. I believe that it is a matter of equity. The hon. member speaks about social justice and this is a very good example of social justice, since those who work share with those who are unemployed, and moreover, the government absorbs 60 per cent of the costs of this increase, which the employers and the employees would have to bear if the act were strictly applied.


Miss Pat Carney (Vancouver Centre):: Mr. Speaker, I have a question for the Minister of Finance (Mr. Lalonde). It involves the statement that he supported the income tax measures from the other two budgets that he has not addressed in his new budget. Several of these measures involve the concept which Canadians find unacceptable of taxing deemed income. For instance, the Minister did not address the issue of taxing capital gains reserves, although in many cases, particularly in farming communities to which he referred in his own background, farmers are taxed on money they do not have in their hands. Does he mean to imply in his statement that he
supports the measures he has not addressed, that he is continuing to support the concept of taxing deemed income or taxing money that people do not have in their hands?


Marc Lalonde: Mr. Speaker, the Hon. Member refers to a budget. I have not made a budget statement today.



THE ROYAL ASSENT

[Stage Direction]
[ Translation]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, Mr. Deputy Speaker with the House went up to the Senate Chamber.
And being returned:
["It being six o'clock, p.m. the House stands adjourned until tomorrow at two o'clock p.m.\nAt 6.10 p.m., the House adjourned, without question put, pursuant to Standing Order 2(1).\nOctober 27, 1982"]
Mr. Deputy Speaker:: I have the honour to inform the House that when the House did attend His Honour, the Deputy to His Excellency the Governor General in the Senate chamber, His Honour was pleased to give in Her Majesty's name the Royal Assent to the following bills:
Bill C-201, An Act to amend the Holidays Act: Chapter No. 124;
Bill C-127, An Act to amend the Criminal Code in relation to sexual offences and other offences against the person and to amend certain other Acts in relation thereto or in consequence thereof-Chapter No. 125.


Erik Nielsen: On a point of order, Mr. Speaker, I just want to reserve a point of order now. We are in the middle of discussions with the Government House Leader with respect to proceedings tomorrow. We had an arrangement which we fell somewhat short of this evening, in our view. The Government House Leader will be speaking to the Minister of Finance (Mr. Lalonde) this evening, getting back to me tomorrow, with respect to Routine Proceedings. I do not intend to raise the point tonight. But in the event that our discussions are fruitless, I will want to raise a point of order immediately when the House resumes business tomorrow.


Mr. Deputy Speaker:: It being six o'clock, p.m. the House stands adjourned until tomorrow at two o'clock p.m.
At 6.10 p.m., the House adjourned, without question put, pursuant to Standing Order 2(1).
October 27, 1982



[Stage Direction]
(See p. 20077)

[Stage Direction]
Certified to be a true copy of a Minute of a Meeting of the Committee of the Privy Council, approved by His Excellency the Governor General on the 26 October, 1982
The Committee of the Privy Council, on the recommendation of the Prime Minister, advise:
1.	that in the absence from Ottawa of the Prime Minister or in the event of his being unable to perform the functions of his office, the next senior minister who is in Ottawa and is able to perform the functions of the Office of Prime Minister, be authorized to act for the Prime Minister;
2.	that in the absence from Ottawa of a Minister whose name is set out in Column II of an item of the Schedule to this Minute, or in the event of that Minister being unable to perform the functions of his Office, the Minister whose name is set out in Column III of the item be authorized to act for the Minister named in Column II in respect of the Office set out in Column I of the item;
3.	that in the absence from Ottawa of the Ministers named in Columns II andlll of an item of the Schedule to this Minute, or in the event of both of those Ministers being unable to perform the functions of their Office, the Minister whose name is set out in Column IV of the item be authorized to act for the Minister named in Column II in respect of the Office set out in Column I of the item;
4.	that in the absence from Ottawa of the Ministers named in Columns II, III and IV of an item of the Schedule to this Minute, or in the event of all those Ministers being unable to perform the functions of their Office, the Prime Minister or, if the Prime Minister is absent from Ottawa or unable to perform the functions of his Office, the next senior minister who is in Ottawa be authorized to act for the Minister in Column II in respect of the Office set out in Column I of the item;
5.	that where an Office out in Column I of an item of the Schedule to this Minute is vacant, the Minister whose name is set out in Column III of that item be authorized to act in the Office of the Minister whose Office is set out in Column I of that item; and
6.	that where an Office set out in Column I of an item of the Schedule to this Minute is vacant, in the absence from Ottawa of the Minister whose name is set out in Column III of that item, or in the event of that Minister being unable to perform the functions of the Office set out in Column I of that item, the Minister whose name is set out in Column IV of that item be authorized to act in the Office of the Minister whose Office is set out in Column I of that item.

[Stage Direction]
COLUMN I	COLUMN II
	OFFICE	NAME
[Stage Direction]
1.
[Stage Direction]
Agriculture
[Stage Direction]
Mr. E. Whelan
[Stage Direction]
2.
[Stage Direction]
Communications
[Stage Direction]
Mr. F. Fox
[Stage Direction]
3a.
[Stage Direction]
Consumer and Corporate Affairs
[Stage Direction]
Mr. A. Ouellet
[Stage Direction]
3b.
[Stage Direction]
Canada Post Corporation
[Stage Direction]
Mr. A. Ouellet
[Stage Direction]
4a.
[Stage Direction]
Economic Development
[Stage Direction]
Mr. D. Johnston
[Stage Direction]
4b.
[Stage Direction]
Science and Technology
[Stage Direction]
Mr. D. Johnston
[Stage Direction]
5.
[Stage Direction]
Employment and Immigration
[Stage Direction]
Mr. L. Axworthy
[Stage Direction]
COLUMN III
[Stage Direction]
COLUMN IV SECOND ACTING
[Stage Direction]
ACTING MINISTER
[Stage Direction]
MINISTER
[Stage Direction]
Mr. J.-L. Pepin
[Stage Direction]
Mr. R. LeBlanc
[Stage Direction]
Mr. S. Joyal
[Stage Direction]
Mr. E. Lumley
[Stage Direction]
Mr. H. Gray
[Stage Direction]
Mr. D. Johnston
[Stage Direction]
Mr. H. Gray
[Stage Direction]
Mr. D. Johnston
[Stage Direction]
Mr. J. Chretien
[Stage Direction]
Mr. E. Lumley
[Stage Direction]
Mr. J. Chretien
[Stage Direction]
Mr. E. Lumley
[Stage Direction]
Mr. C. Caccia
[Stage Direction]
Mr. C. Lapointe
[Stage Direction]
October 27, 1982
[Stage Direction]
6,
[Stage Direction]
Energy, Mines and Resources
[Stage Direction]
Mr. J. Chretien
[Stage Direction]
Mrs. J. Erola
[Stage Direction]
Mr. J. C. Munro
[Stage Direction]
7.
[Stage Direction]
Environment
[Stage Direction]
Mr. J. Roberts
[Stage Direction]
Mr. P. de Bane
[Stage Direction]
Mr. J. C. Munro
[Stage Direction]
8.
[Stage Direction]
External Affairs
[Stage Direction]
Mr. A. MacEachen
[Stage Direction]
Mr. G. Regan
[Stage Direction]
Mr. C. Lapointe
[Stage Direction]
9.
[Stage Direction]
Finance
[Stage Direction]
Mr. M. Lalonde
[Stage Direction]
Mr. P. Cosgrove
[Stage Direction]
Mr. H. Gray
[Stage Direction]
10.
[Stage Direction]
Fisheries and Oceans
[Stage Direction]
Mr. P. de Bane
[Stage Direction]
Mr. J. Roberts
[Stage Direction]
Mr. W. Rompkey
[Stage Direction]
11.
[Stage Direction]
Indian Affairs and Northern Development
[Stage Direction]
Mr. J. C. Munro
[Stage Direction]
Miss M. Begin
[Stage Direction]
Mr. J. Chretien
[Stage Direction]
12a.
[Stage Direction]
Industry, Trade and Commerce
[Stage Direction]
Mr. E. Lumley
[Stage Direction]
Mr. W. Rompkey
[Stage Direction]
Mr. G. Regan
[Stage Direction]
12b.
[Stage Direction]
Regional Economic Expansion
[Stage Direction]
Mr. E. Lumley
[Stage Direction]
Mr. Rompkey
[Stage Direction]
Mr. G. Regan
[Stage Direction]
13.
[Stage Direction]
Justice and Attorney General
[Stage Direction]
Mr. M. MacGuigan
[Stage Direction]
Mr. R. Kaplan
[Stage Direction]
Mr. S. Joyal
[Stage Direction]
14.
[Stage Direction]
Labour
[Stage Direction]
Mr. C. Caccia
[Stage Direction]
Mr. F. Fox
[Stage Direction]
Mr. L. Axworthy
[Stage Direction]
15.
[Stage Direction]
National Defence
[Stage Direction]
Mr. G. Lamontagne
[Stage Direction]
Mr. A. MacEachen
[Stage Direction]
Mr. W. B. Campbell
[Stage Direction]
16.
[Stage Direction]
National Health and Welfare
[Stage Direction]
Miss M. Begin
[Stage Direction]
Mr. W. B. Campbell
[Stage Direction]
Mr. C. Caccia
[Stage Direction]
17.
[Stage Direction]
National Revenue
[Stage Direction]
Mr. P. Bussieres
[Stage Direction]
Mr. J.-J. Blais
[Stage Direction]
Mr. M. Lalonde
[Stage Direction]
18.
[Stage Direction]
Privy Council
[Stage Direction]
Mr. Y. Pinard
[Stage Direction]
Mr. A. Ouellet
[Stage Direction]
Mr. J.-J. Blais
[Stage Direction]
19.
[Stage Direction]
Public Works
[Stage Direction]
Mr. R. LeBlanc
[Stage Direction]
Mr. P. Bussieres
[Stage Direction]
Mr. P. de Bane
[Stage Direction]
20.
[Stage Direction]
Secretary of State
[Stage Direction]
Mr. S. Joyal
[Stage Direction]
Mr. J. S. Fleming
[Stage Direction]
Mr. F. Fox
[Stage Direction]
21.
[Stage Direction]
Social Development
[Stage Direction]
Mr. J. Austin
[Stage Direction]
Mr. J. S. Fleming
[Stage Direction]
Miss M. Begin
[Stage Direction]
22.
[Stage Direction]
Solicitor General
[Stage Direction]
Mr. R. Kaplan
[Stage Direction]
Mr. M. MacGuigan
[Stage Direction]
Mr. Y. Pinard
[Stage Direction]
23.
[Stage Direction]
Supply and Services
[Stage Direction]
Mr. J.-J. Blais
[Stage Direction]
Mr. R. LeBlanc
[Stage Direction]
Mr. G. Lamontagne
[Stage Direction]
24.
[Stage Direction]
Transport
[Stage Direction]
Mr. J.-L. Pepin
[Stage Direction]
Mr. L. Axworthy
[Stage Direction]
Mr. E. Whelan
[Stage Direction]
25.
[Stage Direction]
Treasury Board
[Stage Direction]
Mr. H. Gray
[Stage Direction]
Mr. M. Lalonde
[Stage Direction]
Mr. A. Ouellet
[Stage Direction]
26.
[Stage Direction]
Veterans Affairs
[Stage Direction]
Mr. W. B. Campbell
[Stage Direction]
Mr. G. Lamontagne
[Stage Direction]
Mr. E. Whelan
[Stage Direction]
CABINET COMMITTEES MEMBERSHIP
[Stage Direction]
Mr./M.
[Stage Direction]
Y. Pinard
[Stage Direction]
Mrs./Mme
[Stage Direction]
J. Erola
[Stage Direction]
Communications/Communications
[Stage Direction]
Sen./Sen.
[Stage Direction]
J. Austin
[Stage Direction]
Chairman/President
[Stage Direction]
Mr./M.
[Stage Direction]
J. Roberts
[Stage Direction]
Economic and Regional Development/Developpement economique
[Stage Direction]
Vice-Chairman/Vice-president
[Stage Direction]
Mr./M.
[Stage Direction]
S. Joyal
[Stage Direction]
regional
[Stage Direction]
Members/Membres
[Stage Direction]
Mr./M.
[Stage Direction]
A. J. MacEachen
[Stage Direction]
Sen./Sen.
[Stage Direction]
H. A. Olson
[Stage Direction]
Mr./M.
[Stage Direction]
A. Ouellet
[Stage Direction]
Chairman/President
[Stage Direction]
Mr./M.
[Stage Direction]
D. Johnston
[Stage Direction]
Sen./Sen.
[Stage Direction]
R. J. Perrault
[Stage Direction]
Vice-Chairman/Vice-president
[Stage Direction]
Mr./M.
[Stage Direction]
J. Chretien
[Stage Direction]
Mr./M.
[Stage Direction]
R. LeBlanc
[Stage Direction]
Mrs./Mmc
[Stage Direction]
J. Erola
[Stage Direction]
Mr./M.
[Stage Direction]
J.-J. Blais
[Stage Direction]
Mr./M.
[Stage Direction]
G. Regan
[Stage Direction]
Members/Membres
[Stage Direction]
Mr./M.
[Stage Direction]
J.-L. Pepin
[Stage Direction]
Mr./M.
[Stage Direction]
M. MacGuigan
[Stage Direction]
Mr./M.
[Stage Direction]
E. F. Whelan
[Stage Direction]
Mr./M.
[Stage Direction]
W. Rompkey
[Stage Direction]
Mr./M.
[Stage Direction]
A. Ouellet
[Stage Direction]
Mr./M.
[Stage Direction]
E. Lumley
[Stage Direction]
Mr./M.
[Stage Direction]
J. Roberts
[Stage Direction]
October 27, 1982
[Stage Direction]
	Mr./M.	F. Fox
	Mr./M.	P. De Bane
	Sen./Sen.	H. R. Argue
	Mr./M.	G. Regan
	Mr./M.	W. Rompkey
	Mr./M.	E. Lumley
	Mr./M.	L. Axworthy
	Mr./M.	C. Caccia
Foreign and Defence Policy/Politique elrangere et defense
[Stage Direction]
Chairman/President
[Stage Direction]
Mr./M.
[Stage Direction]
A. J. MacEachen
[Stage Direction]
Vice-Chairman/Vice-president
[Stage Direction]
Mr./M.
[Stage Direction]
G. Regan
[Stage Direction]
Mr./M.
[Stage Direction]
G. Lamontagne
[Stage Direction]
Members/Membres
[Stage Direction]
Mr./M.
[Stage Direction]
J.-L. Pepin
[Stage Direction]
Mr./M.
[Stage Direction]
J. Chretien
[Stage Direction]
Mr./M.
[Stage Direction]
E. F. Whelan
[Stage Direction]
Mr./M.
[Stage Direction]
J. Roberts
[Stage Direction]
Mr./M.
[Stage Direction]
J.-J. Blais
[Stage Direction]
Mr./M.
[Stage Direction]
F. Fox
[Stage Direction]
Mr./M.
[Stage Direction]
P. De Bane
[Stage Direction]
Mr./M.
[Stage Direction]
R. P. Kaplan
[Stage Direction]
Mr./M.
[Stage Direction]
J. S. Fleming
[Stage Direction]
Mr./M.
[Stage Direction]
C. Lapointe
[Stage Direction]
Mr./M.
[Stage Direction]
E. Lumley
[Stage Direction]
Mr./M.
[Stage Direction]
L. Axworthy
[Stage Direction]
Government Operations/Operations gouvernementates
[Stage Direction]
Chairman/President
[Stage Direction]
Mr./M.
[Stage Direction]
Y. Pinard
[Stage Direction]
Vice-Chairman/Vice-president
[Stage Direction]
Sen./Sen.
[Stage Direction]
H. A. Olson
[Stage Direction]
Members/Membres
[Stage Direction]
Mr./M.
[Stage Direction]
J.-L. Pepin
[Stage Direction]
Mr./M.
[Stage Direction]
A. Ouellet
[Stage Direction]
Mr./M.
[Stage Direction]
R. LeBlanc
[Stage Direction]
Mr./M.
[Stage Direction]
J.-J. Blais
[Stage Direction]
Mr./M.
[Stage Direction]
P. Bussieres
[Stage Direction]
Mr./M.
[Stage Direction]
C. Lapointe
[Stage Direction]
Mr./M.
[Stage Direction]
P. Cosgrove
[Stage Direction]
Mr./M.
[Stage Direction]
S. Joyal
[Stage Direction]
Mr./M.
[Stage Direction]
B. Campbell
[Stage Direction]
Labour Relations/Relations de
[Stage Direction]
travail
[Stage Direction]
Chairman/President
[Stage Direction]
Mr./M.
[Stage Direction]
Y. Pinard
[Stage Direction]
Vice-Chairman/Vice-president
[Stage Direction]
Mr./M.
[Stage Direction]
A. Ouellet
[Stage Direction]
Members/Membres
[Stage Direction]
Mr./M.
[Stage Direction]
J.-L. Pepin
[Stage Direction]
Mr./M.
[Stage Direction]
J. C. Munro
[Stage Direction]
Mr./M.
[Stage Direction]
H. Gray
[Stage Direction]
Mr./M.
[Stage Direction]
R. LeBlanc
[Stage Direction]
Mr./M.
[Stage Direction]
J.-J. Blais
[Stage Direction]
Sen./Sen.
[Stage Direction]
H. R. Argue
[Stage Direction]
Mr./M.
[Stage Direction]
G. Regan
[Stage Direction]
Mr./M.
[Stage Direction]
M. MacGuigan
[Stage Direction]
Mr./M.
[Stage Direction]
E. Lumley
[Stage Direction]
Mr./M.
[Stage Direction]
L. Axworthy
[Stage Direction]
Mr./M.
[Stage Direction]
P. Cosgrove
[Stage Direction]
Mr./M.
[Stage Direction]
C. Caccia
[Stage Direction]
Mr./M,
[Stage Direction]
S.Joyal
[Stage Direction]
Legislation and House Planning!Legislation et planification parlementaire
Chairman/President Vice-Chairman/Vice-president Members/Membres
Priorities and Planning/Priorites
Chairman/President Vice-Chairman/Vice-president Members/ Membres
Mr./M.	Y. Pinard
Mr./M.	M. MacGuigan
Mr./M.	J. C. Munro
Mr./M.	E. F. Whelan
Sen./Sen.	R. J. Perrault
Mm'/Mme	M. Begin
Mr./M.	F. Fox
Mr./M.	G. Lamontagne
Mr./M.	P. De Bane
Mr./M.	G. Regan
Mr./M.	R. P. Kaplan
Mr./M.	E. Lumley
Mrs./Mme	J. Erola
Mr./M.	S. Joyal
planification
Mr./M.	P. E. Trudeau
Mr./M.	A. J. MacEachen
Mr./M.	J. Chretien
Mr./M.	H. E. Gray
Mr./M.	M. Lalonde
Mr./M.	R. LeBlanc
Mr./M.	J. Roberts
Mr./M.	G. Regan
Mr./M.	Y. Pinard
Mr./M.	D. Johnston
Mr./M.	L. Axworthy
Mrs./Mme	J. Erola
Sen./Sen.	J. Austin
Public Service/Fonction publique
Chairman/President Vice-Chairman/Vice-president Members/Membres
Mr./M.	P. E. Trudeau
Mr./M.	Y. Pinard
Mr./M.	A. J. MacEachen
Mr./M.	J.-L. Pepin
Mr./M.	H. E. Gray
Mr./M.	M. Lalonde
Mr./M.	G. Regan
Mr./M.	D. Johnston
Mr./M.	S. Joyal
Security and Intelligence/Securite et renseignements
[Stage Direction]
Chairman/President
[Stage Direction]
Mr./M.
[Stage Direction]
P. E. Trudeau
[Stage Direction]
Vice-Chairman/Vice-president
[Stage Direction]
Mr./M.
[Stage Direction]
A. J. MacEachen
[Stage Direction]
October 27, 1982
Members/ Membres
Mr./M.	J. Chretien
Mr./M.	M. Lalonde
Mr./M.	G. Lamontagne
Mr./M.	M. MacGuigan
Mr./M.	R. P. Kaplan
Mr./M.	Y. Pinard
Mr./M.	L. Axworthy
Sen./Sen.	J. Austin
Social Development/Developpement social
Chairman/President Vice-Chairman/Vice-president
Members/Membres
Sen./Sen.	J. Austin
Mr./M.	J. C. Munro
Mr./M.	J. S. Fleming
Sen./Sen.	R. J. Perrault
Mr./M.	R. LeBlanc
Mr./M.	J. Roberts
Mm'/Mmc	M. Begin
Mr./M.	F. Fox
Mr./M.	M. MacGuigan
Mr./M.	R. P. Kaplan
Mr./M.	C. Lapointe
Mr./M.	L. Axworthy
Mrs./M1™	J. Erola
Mr./M.	S. Joyal
Mr./M.	B. Campbell
Special Committee of Council/Comite special du Conseil
[Stage Direction]
Chairman/President
[Stage Direction]
Mr./M.
[Stage Direction]
Y. Pinard
[Stage Direction]
Vice-Chairman/Vice-president
[Stage Direction]
Sen./Sen.
[Stage Direction]
H. A. Olson
[Stage Direction]
Members/Membres
[Stage Direction]
gen./Sen.
[Stage Direction]
R. J. Perrault
[Stage Direction]
Sen./Sen.
[Stage Direction]
H. R. Argue
[Stage Direction]
Mr./M.
[Stage Direction]
M. MacGuigan
[Stage Direction]
Mr./M.
[Stage Direction]
W. Rompkey
[Stage Direction]
Mr./M.
[Stage Direction]
P. Bussieres
[Stage Direction]
Mr./M.
[Stage Direction]
C. Lapointe
[Stage Direction]
Mr./M.
[Stage Direction]
P. Cosgrove
[Stage Direction]
Mrs./Mme
[Stage Direction]
J. Erola
[Stage Direction]
Mr./M.
[Stage Direction]
C. Caccia
[Stage Direction]
Mr./M.
[Stage Direction]
S. Joyal
[Stage Direction]
Mr./M.
[Stage Direction]
B. Campbell
[Stage Direction]
Treasury Board/Conseil du Tresor
[Stage Direction]
Chairman/President
[Stage Direction]
Mr./M.
[Stage Direction]
FI. E. Gray
[Stage Direction]
Vice-Chairman/Vice-president
[Stage Direction]
Mr./M.
[Stage Direction]
M. Lalonde
[Stage Direction]
Members/Membres
[Stage Direction]
Sen./Sen.
[Stage Direction]
FI. A. Olson
[Stage Direction]
Mr./M.
[Stage Direction]
A. Ouellet
[Stage Direction]
Mr./M.
[Stage Direction]
J.-J. Blais
[Stage Direction]
Mr./M.
[Stage Direction]
B. Campbell
[Stage Direction]
Alternates/Suppleants
[Stage Direction]
Mr./M.
[Stage Direction]
C. Lapointe Is' Alternate/ Ier suppleant)
[Stage Direction]
Mr./M.
[Stage Direction]
P. Cosgrove
[Stage Direction]
Sen./Sen.
[Stage Direction]
H. R. Argue
[Stage Direction]
Mr./M.
[Stage Direction]
W. R. Rompkey
[Stage Direction]
Mr./M.
[Stage Direction]
P. Bussieres
[Stage Direction]
Mr./M.
[Stage Direction]
J. S. Fleming
[Stage Direction]
Western Affairs/Affaires de l'Quest
[Stage Direction]
Chairman/President
[Stage Direction]
Mr./M.
[Stage Direction]
L. Axworthy
[Stage Direction]
Members /Membres
[Stage Direction]
Mr./M.
[Stage Direction]
J.-L. Pepin
[Stage Direction]
Mr./M.
[Stage Direction]
J. Chretien
[Stage Direction]
Mr./M.
[Stage Direction]
J. C. Munro
[Stage Direction]
Sen./Sen.
[Stage Direction]
H. A. Olson
[Stage Direction]
Mr./M.
[Stage Direction]
E. F. Whelan
[Stage Direction]
Sen./Sen.
[Stage Direction]
R. J. Perrault
[Stage Direction]
Mr./M.
[Stage Direction]
J. Roberts
[Stage Direction]
Mr./M.
[Stage Direction]
P. De Bane
[Stage Direction]
Sen./Sen.
[Stage Direction]
H. R. Argue
[Stage Direction]
Mr./M.
[Stage Direction]
G. Regan
[Stage Direction]
Mr./M.
[Stage Direction]
J. S. Fleming
[Stage Direction]
Mr./M.
[Stage Direction]
E. Lumley
[Stage Direction]
Sen./Sen.
[Stage Direction]
J. Austin
[Stage Direction]
*N.B. The Deputy Prime Minister, President of the Treasury Board and Minister of Finance are ex officio members of the Cabinet Committees on Economic and Regional Development, Foreign and Defence Policy, Government Operations and Social Development. All Ministers are free to attend meetings of these Committees.
*N.B. Le Vice-premier ministre, le President du Conseil du Tresor et le Ministre des Finances sont membres, de par leurs fonctions, des Comites du Cabinet charges du Developpement economique et regional, de la Politique etrangere et de la defense, des Operations gouvernementales et du Developpement social. Tous les ministres sont libres d'assister aux rencontres de ces Comites.
[Stage Direction]
Thursday, October 28, 1982