1982-12-07

AUDITOR GENERAL'S REPORT


Madam Speaker:: 1 have the honour to lay upon the table the Report of the Auditor General of Canada to the House of Commons for the fiscal year ended March 31, 1982.
1 would remind Hon. Members that, pursuant to Standing Order 65(1 )(q), this report is deemed permanently referred to the Standing Committee on Public Accounts.


MOTIONS UNDER S.O. 43   ENVIRONMENTAL AFFAIRS CHEMICAL POLLUTION OF NIAGARA RIVER-LAKE ONTARIO BASIN
Mr. Joe Reid (St. Catharines):: Madam Speaker, I rise on a matter of urgent and pressing necessity. Recent reports indicate that the flow of chemical contaminants into the Niagara River-Lake Ontario basin is now such that municipalities using these waters are urged to consider the development of emergency alternative sources of water supply. I therefore move, seconded by the Hon. Member for Parry Sound-Mus-koka (Mr. Darling):
That the Government of Canada, through its Department of the Environment, directly intervene in the present court proceedings already initiated and requiring immediate remedial measures to be taken with respect to the S-Area dump, the major source of this contamination.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


SEARCH AND RESCUE
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, whereas the SARSAT emergency location system, which uses
satellite pinpointing of ELT equipped aircraft or vessels, has already been credited with the saving of several lives, besides reducing search and rescue costs, I move, seconded by the Hon. Member for Surrey-White Rock-North Delta (Mr. Friesen):
That the Department of National Defence be mandated to extend SARSAT coverage to the West Coast and the Far North by establishing additional ground receiving stations.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


OBSERVANCE OF ANTI-BOYCOTT POLICY BY GOVERNMENT AGENCIES
Mr. David Orlikow (Winnipeg North):: Madam Speaker, 1 rise to move a motion under the provisions of Standing Order 43. It was recently revealed that the Canadian Dairy Commission wilfully broke Government rules forbidding Government agencies to support the Arab boycott of Israeli goods and services. The Canadian Dairy Commission admits having entered into agreements that clearly accepted the principle of the Arab blacklist against Israel, in order to get contracts from Libya. Inasmuch as the action of the Canadian Dairy Commission violates both the letter and spirit of the Government's own guidelines, declared first in 1976 and put into regulations in 1977, and inasmuch as the move by CDC is even more deceitful by its attempt to use an intermediary business, I move, seconded by the Hon. Member for Winnipeg-Birds Hill (Mr. Blaikie):
That this House urges the Government to take action to ensure that its antiboycott policy is respected by all Government agencies. Departments and Crown corporations.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.

December 7, 1982


STATUS OF WOMEN
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, I rise under Standing Order 43 to move the following motion. On December 6, 1982, the Supreme Court of Canada ruled that, in the event of marriage breakdown, a woman who has worked outside the home during some, or all of the period of the marriage, is entitled to a share of non-family assets, but that a woman whose work has been solely in the home can receive no such benefits. Therefore I move, seconded by the Hon. Member for Parry Sound-Muskoka (Mr. Darling):
That this House urge that all legislatures and courts develop, administer or interpret family law in such a way that the woman who works in the home is not discriminated against, as she is in this most recent ruling of the Supreme Court of Canada with regard to non-family assets.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


SHIPBUILDING
Hon. J. Robert Howie (York-Sunbury):: Madam Speaker. I rise under the provisions of Standing Order 43. Whereas the Canadian shipbuilding industry in a period of decreased world demand is faced with increased competition from subsidized foreign shipyards, with resulting widespread unemployment in the shipbuilding and marine communities in Canada, I move, seconded by the Hon. Member for Fundy-Royal (Mr. Corbett):
That the Government be directed to bring in its shipbuilding policy now, and that such policy contain tax incentives for building, buying and leasing Canadian built and registered ships to enable Canadian shipyards and ship operators to compete in world markets, and further be directed to bring in a policy that requires that vessels for resource exploration and transportation in the Canadian Arctic be built in Canada.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


ADMINISTRATION OF JUSTICE
Mr. Gordon Towers (Red Deer):: Madam Speaker, 1 rise under Standing Order 43 to bring to the attention of this House of Commons the alarming rise in the rate of criminal
activity related to break-ins, robberies, and other crimes of violence, as a result of the severe economic recession into which Canada has drifted. I therefore move, seconded by the Hon. Member for Fundy-Royal (Mr. Corbett):
That the Government give police forces the required manpower and support staff to control criminal activity adequately and that the highest priority be granted to staving off lay-offs and cutbacks in positions involved with public safety by the wise use of job creation of job-retention funding programs.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


MUNICIPAL AFFAIRS
Mr. Bill Yurko (Edmonton East):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Yesterday the Minister of Finance (Mr. Lalonde) stated that municipalities across Canada should initiate and undertake capital works programs by borrowing on the capital market. To encourage such action without imposing any immediate revenue requirements on the federal Government, I move, seconded by the Hon. Member for Red Deer (Mr. Towers):
That the Government bring forth legislation immediately to permit municipalities to issue tax-free bonds to raise capital for needed municipal capital works projects and thus generate jobs.
Such a policy would use tomorrow's potential federal Government tax dollars to create jobs today.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


POLITICAL PARTIES
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Madam Speaker, in view of the fact that yesterday the Justice critic of the New Democratic Party, the Hon. Member for Burnaby (Mr. Robinson), stated on the "Jack Webster Show" that the official position of his Party is to legalize prostitution and license brothels in certain areas of the city, and in view of the fact that the NDP have only recently acquired an interest in the endeavours of the small business person, I move, seconded by the Hon. Member for Cariboo-Chilcotin (Mr. Greenaway):
December 7, 1982

That when the Member for Burnaby returns from his wanderings in Washington, D.C., this House call upon him to explain whether his Party also favours government grants and loans to assist those wishing to open businesses in human flesh; whether subsidies will be made available to those of less fortunate means who would like to but cannot afford to ensure the viability of the businesses, and whether his Party proposes to amend the Income Tax Act to make such business transactions tax-deductible expenses.


Some Hon. Members:: Oh, oh!


STATUS OF WOMEN
Ms. Lynn McDonald (Broadview-Greenwood):: Madam Speaker, I rise under the provisions of Standing Order 43. Whereas the highest court in the land yesterday announced its decision in the Leatherdale case, to the effect that the only value a woman brings to her marriage is the monetary value of her wages or salary earned, I move, seconded by the Hon. Member for Beaches (Mr. Young):
That this House express its profound regret for this decision, especially for its failure to recognize the contribution of Canadian women to the family in raising children.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


SUPPLEMENTARY RETIREMENT BENEFITS ACT
Mr. Sid Parker (Kootenay East-Revelstoke):: Madam Speaker, I rise under the provisions of Standing Order 43. In view of the fact that several backbench Liberals recently said they would vote against Bill C-133 because it would cut the pensions of retired Public Servants, and in view of the fact that several of those Members changed their minds when the Government offered to reduce that pension cut by a chintzy one-half of 1 per cent, I move, seconded by the Hon. Member for Prince Albert (Mr. Hovdebo):
That this House express its disappointment that these backbench Liberals, in changing their minds and accepting the half a per cent solution, have betrayed thousands of retired Public Servants and condemned many of them to lives below the poverty line.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.
Oral Questions


THE ADMINISTRATION
Mr. Howard Crosby (Halifax West):: Madam Speaker, the Government's six and five program creates a law for the rich and a law for the poor in that public servants and pensioners, children and senior citizens, are deprived of statutory benefits granted by Parliament, while an executive like Michael Pitfield is given a substantial retroactive pay increase and unearned pension benefits which could cost over SI million. Other Government executives are given similar benefits. I move, seconded by the Hon. Member for Dartmouth-Halifax East (Mr. Forrestall):
That this House condemn the Prime Minister of Canada and his Government for robbing poor Canadians to reward rich friends like Michael Pitfield, Joel Bell, Pierre Juneau, Maurice Strong, Jack Horner, Donald Macdonald, and on, and on and on.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Sinclair Stevens (York-Peel):: Madam Speaker, my question is directed to the Minister of Finance, who must have noticed the report coming from the European Management Forum which reviewed the records of 22 countries and found that Canada, in terms of business confidence within Canada, ranked 12 out of 22, compared to other nations. In terms of innovative forward orientation, Canada ranked 16. In terms of outward orientation with the rest of the world, Canada ranked 17. Would the Minister of Finance indicate, bearing in mind that his Party has been in power in Canada for 19 of the past 20 years, what has gone wrong in this country?
[And the Hon. Member for Nunatsiaq having taken his seat:]


Some Hon. Members:: Hear, hear!


Hon. Marc Lalonde (Minister of Finance):: Madam Speaker, I apologize for the interruption in the answer to the Hon. Member, but it was a worth-while interruption since we are welcoming, on the Government side, the presence of the Hon. Member for Nunatsiaq (Mr. Ittinuar). I would say that if there are Members as good on the Opposition side, we would
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December 7, 1982
Oral Questions
be happy to consider their candidacy, not the Hon. Member from Edmonton who is smiling over there, but some others.


Some Hon. Members:: Oh, oh!


Marc Lalonde: Madam Speaker, the study to which the Hon. Member refers is one that includes a number of very subjective criteria. The ones he has indicated, for instance, are indeed in that category of very suggestive criteria which are very difficult for anyone to evaluate in a scientific way. I would like to remind the Hon. Member, however, that, over all, that agency has come to the conclusion that, of all the countries analysed, Canada ranks number six in the world. It is not a bad performance, I would suggest to the Hon. Member, taking into account that we are in competition with all the other industrialized countries in the world, that Canada could stand up in that regard compared to other industrialized countries.
If the Hon. Member wishes to have supplementaries, I could go into some of the points he has mentioned and draw to his attention that this Government in the last year has taken a number of steps, for instance, having to do with research and development, which indicate quite clearly that we are attaching a lot more importance to this whole issue of innovation, and we look forward to making sure that the Canadian economy is going to be one of the most progressive in the world. We are determined to make sure that the Canadian economy is going to remain in the vanguard of industrial progress in the world.


INDUSTRIAL TRENDS
Sinclair McKnight Stevens: Madam Speaker, my supplementary is directed to the Minister of Finance. To be specific, in The Globe and Mail this morning it was reported that:
Manufacturers reported lower orders and further cutbacks in both production and jobs in November. The Conference Board of Canada states that production was down again in the third quarter. Canadian farm prices are reported to be dropping still. The slump in the steel industry has prompted the Dominion Bond Rating Service to lower the rating of two steel companies in Canada, and Canadian pulp producers continue to take a beating.
In view of this continuing industrial slump, has the Minister given any consideration to reversing the move made in the November, 1981, budget which called for a lower depreciation allowance for industry, a move which has cost, this year and last, Canadian industry $2 billion in money grabbed by Ottawa?


Marc Lalonde: First of all, Madam Speaker, I would dispute some of the statements made by the Hon. Member. Indeed, the situation is serious, the recession is quite serious, but as the Conference Board report to which he alludes indicates, there are also some encouraging signs. For instance, the Conference Board is estimating that there will be 156,000 housing starts next year. They also note a significant decline in the inflation rate, and forecast a moderate recovery in the U.S. as well as Canada. That will have a
significant impact on all the industries that the Hon. Member has referred to, particularly the steel and forest industries, to mention only two of them.
The specific measure that he is referring to is one that has been carefully examined and studied. We have come to the conclusion that the depreciation rate in Canada compares favourably with that found in most of our competitors, and that the solution is to try to create an environment for general economic recovery, rather than making small adjustments here and there on specific items having to do with the tax system. We have made a number of adjustments but, as far as the capital cost allowance is concerned, I have indicated that the decision has been to keep the proposal in the November budget.


SMALL BUSINESS BOND PROGRAM
Sinclair McKnight Stevens: Madam Speaker, let me try the same Minister again, who apparently has no wish to help business in Canada create needed jobs.
In the November, 1981 budget, the small business bonds were changed so that they would only be available to small businesses in financial difficulty. In view of the fact that small businesses have now been caught in a Catch 22 situation where they apply to a bank and the bank says, "Are you in financial difficulty?" If they say yes, the bank says, "We do not want to make a loan to you." In short, there is no further sizeable activity in small-business bonds at the bank level.
Will the Minister change this, bearing in mind we have lost almost 600,000 jobs in this country in the past year, a rate of job loss running at 1,900 Canadians per day thrown out of work because of the misdirected policies of the Government?


Marc Lalonde: Madam Speaker, I would have to point out to the Hon. Member that the business community in general has not passed the same judgment as he has about the measures we have announced in this House since last October. As a matter of fact there has been quite a lot of support for the decisions announced by the Government since that time, and particularly since the six and five program contained in the budget of last June.
As far as the small business sector is concerned, I would remind the Hon. Member that we have made a change, for instance to the 12.5 per cent tax on dividend provision whereby that tax is not going to apply to past dividends but will apply only in the future. This is going to be of significant benefit to the small business sector.
We have decided not to proceed at the present time with the wholesale tax. This is going to be of great benefit to the small business sector which was very concerned about the implementation of this proposal at this particular time.
Finally, the significant interest rate reduction program that we have for small business is still in operation, and a large
December 7, 1982

number of small businesses are benefiting from these measures.
I should like to point out, Madam Speaker, that over the last few months we have succeeded, through the co-operation of all sectors, in reducing inflation. This has also allowed us to reduce interest rates by over 5 per cent for the entire business sector. That is what is important in the sense of creating a favourable environment for further investment. Everyone is now able to borrow at a much cheaper cost than they were able to a few months ago.


SHIPBUILDING
Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, my question is for the Minister of Industry, Trade and Commerce. The Minister will know that at the end of last March there were 18,000 shipbuilding jobs in the country, and at the end of October there were less than 12,000 jobs, and that this is a serious problem. The contracts are drying up fast and the bottom of the well is in sight.
While the Minister's Department has been lollygagging over releasing the shipbuilding review policy, and while the Minister has been doing the same thing for the past two and a half years, $1.1 billion worth of domestic shipbuilding has gone to foreign markets.
My question is the same one that I put to the Minister of State for Economic Development last week, to which he was unable to give an answer. When is that policy coming forward and what encouragement will it contain for unemployed shipbuilding workers?


Hon. Ed Lumley (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, as I indicated in the House the other day in answer to a question from a colleague of the Hon. Member, we spent a great deal of time last summer and fall on the shipbuilding policy and we hope to make an announcement shortly. Even while that policy was being discussed, several contracts were landed by Canadian firms with the assistance of the Government of Canada. As I think 1 indicated to the Hon. Member several weeks ago, the Saint John shipyard landed a $100 million plus contract for a semi-submersible drilling rig. The company was assisted in that, to a large degree, by the Government of Canada.


CONSTRUCTION OF FISHING TRAWLERS
Robert Alfred Corbett: Madam Speaker, my supplementary question is for the same Minister who apparently did not hear my original question too well. I asked him what is going to be included in that shipbuilding review. I will give him a little help. Will it contain provisions that will alter, for instance, current policies of the Department of Fisheries
Oral Questions
and Oceans regarding the purchase of trawlers offshore in foreign markets for use in the fishing industry in the Atlantic provinces? Or, on the other hand, will it espouse policies such as those recommended by the Hon. Member for Saint John, that the private sector must start stockpiling unusable vessels like so many sticks in the lumberyard, before the Government is prepared to step in and take an interest in the plight of unemployed shipyard workers?


Edward C. Lumley: Madam Speaker, when the policy is announced by the Government of Canada the Hon. Member will be one of the first to see what it will encompass in the shipbuilding industry.


AUDITOR GENERAL'S REPORT
Mr. Doug Anguish (The Battlefords-Meadow Lake):: Madam Speaker, my questions relate to the Auditor General's Report, tabled today. My first question to the Minister of Finance is one that I put to him on October 29 regarding the Public Accounts of Canada.
The Auditor General again points out the very serious situation that has arisen because of the Government not having its books in order. Some $14.5 billion in statutory appropriations are not recorded, international development assistance loans have been overvalued by $3.9 billion, and the total understated liability of the Government of Canada is shown as $17.9 billion. If any business or individual submitted an income tax return on the basis of books kept as the Government of Canada keeps its books, they would be nailed for income tax evasion.
1 would like to know what the Government is going to do to put the books of the country in order so that they will fairly reflect our financial situation.


Marc Lalonde: Madam Speaker, 1 answered this question some time ago, and my answer still stands. It is a complex issue on which there is a division of opinion. Different accountants have different points of view on the matter. Perhaps the Hon. Member would care to note that not all the assets belonging to the Government of Canada are calculated either. For instance, what value would he put on our national parks such as Banff or Jasper or to go even further, how would he calculate the value of the Yukon and Northwest Territories, which belong to the Government of Canada? What value would he put on offshore resources? There is no evaluation being done of these assets, and it is something the books do not show either. So once again, it is a technical and a complex issue which is still being debated by the accounting profession.

December 7, 1982
Oral Questions


Douglas Keith Anguish: Madam Speaker, I was hoping the Minister would have answered the question.


ACCOUNTABILITY OF CROWN CORPORATIONS
Douglas Keith Anguish: Madam Speaker, my supplementary question is directed to the President of the Treasury Board. One of the main thrusts of the Auditor General's report concerned Crown corporations and their lack of accountability. Earlier some $25 million was advanced to CN Marine for the purchase of a new ferry. This money was put in a trust account in the name of the shipbuilding company, and some $163,000 has been withdrawn from the account for the shipbuilding company. Is this a practice which would be condoned by Treasury Board?


Hon. Herb Gray (President of the Treasury Board):: Madam Speaker, 1 have not yet had a chance to study the report in depth. I will be consulting with my colleague, the Minister of Transport, about it. With respect to the Hon. Member's question regarding Crown corporations, as he knows, the Government presented a Bill to the House designed to create a stronger accountability and responsibility framework respecting Crown corporations. Certainly 1 hope that before too long we will be able to make progress in considering this matter. It is certainly my desire and that of the Government to have an improved and stronger framework of responsibility and accountability with respect to Crown corporations.


DEPARTMENTS' PEAK SPENDING MONTH
Douglas Keith Anguish: Madam Speaker, again my question is directed to the President of the Treasury Board. Something which the Auditor General also pointed out in his report was that the peak spending month for every year in Government was the month of March. In fact some months it doubles other months in which the Government makes expenditures. It is certainly a time when many Government Departments spend off the fat within their Departments or their agencies. Would the Minister take a very serious look at this? Instead of robbing old age pensioners, would he take a look at carving some of the fat from departmental budgets which is very obvious by the peak spending in the month of March?


Herbert Eser (Herb) Gray: Madam Speaker, 1 reject completely the premise of the Hon. Member's question with respect to robbing pensioners. There is nothing of the kind in anything we are doing. At the same time I will certainly study the views of the Auditor General with respect to peak spending, as the Hon. Member alleges, in the month of March. I hope when we have examined it that my hon. friend will not rise and complain that any spending we are reducing is for programs he is seeking.


NATIONAL SECURITY
Mr. Chris Speyer (Cambridge):: Madam Speaker, my question is directed to the Solicitor General. This morning in the Old Bailey the spy, Hugh Hambleton, was convicted and sentenced to ten years' imprisonment. In making representations as to sentence his counsel stipulated that full disclosures of his activity had been made to the RCMP and that he had been granted immunity from prosecution. This was not disputed by the prosecutor, and it was taken into consideration by the trial judge.
In addition, his defence counsel brandished a letter to the court, said that it contained the promise of immunity from prosecution, and said that he had been requested not to file the letter as an exhibit at the trial. Who was the author of that letter? What information did it contain? How does the Minister reconcile any of this with his statement in the House that, "I can assure this House that no deal was made with Hambleton"?


Hon. Bob Kaplan (Solicitor General of Canada):: Madam Speaker, I have no personal knowledge of the existence of such a letter or of its contents.


Some Hon. Members:: Oh, oh!


Robert Phillip Kaplan: 1 can assure the Hon. Member that no letter was sent by me or any official on my behalf, offering immunity. I explained to the House exactly what the circumstances were under which the RCMP informed Mr. Hambleton that there would be no prosecution, the basis of confidence that was established, the information that was obtained on the basis of that confidence, and what was done with it. I have verified with the Security Service Officials that they would have been prepared to go back to the Department of Justice and put a case to them again, if at any time subsequently evidence was developed which would have supported the laying of charges against Hambleton in Canada.
I remind the Hon. Member that when evidence is taken from an individual, without any caution being given to him, after he has been informed that no charges will be laid against him, it would be very difficult for that evidence alone to be brought forward in a court, and that the opinion of the experienced investigators of the Security Service was that some independent other evidence would have been required before they could go back to Justice and present a case again.


Chris Speyer: I say through you, Madam Speaker, to the Minister that the reality is that a parking meter violator or a shoplifter is treated in a far harsher fashion than our spies.


Some Hon. Members:: Hear, hear!
[Editor's Note: At 2.35 p.m. the lighting in the Chamber failed.]
December 7, 1982


Madam Speaker:: Order, please. If 1 may have the indulgence of the House, perhaps we could wait a while so that I can find out what is the cause of the problem.
An Eton. Member: We are in the dark anyway.


Mr. McKnight:: Stick around, Pierre, and you will see the light.


Madam Speaker:: I am just finding out whether the lights can be activated right away. Otherwise we shall probably have to suspend the sitting for a while.
[At 2.40 p.m. the lighting resumed in the Chamber.] AVAILABILITY OF INFORMATION


Chris Speyer: Madam Speaker, it is impossible for anyone to believe that some type of deal, that some type of immunity, would not be granted for this spy to tell everything concerning the information he had. In light of catching Hambleton red-handed in November, 1979, with the most sophisticated type of Soviet-made espionage equipment, and in light of the fact that we knew he had been a spy for 30 years, did the Minister or the Security Service know that documents which were important to NATO were being passed to the Soviet Union or whether we were aware prior to the prosecution in Great Britain that the highest grade of intelligence, namely "Cosmic" classified documents, were passed to the prosecution? What information did we not have that the British had in order to enable them to prosecute Hambleton?


Hon. Mark MacGuigan (Minister of Justice):: Madam Speaker, this question appears to be directed at the information which was in the hands of the Attorney General at the time the decision was made on April 25, 1980, not to prosecute. Perhaps I might draw to the attention of the House that the first count in the trial just completed in London, on which Mr. Hambleton was convicted, was one of communicating to a Russian agent top secret, secret, and confidential material belonging to the North Atlantic Treaty Organization. I can inform the House that at the time the decision was made by the Attorney General there was no information of this kind concerning Mr. Hambleton's passing information of this type.


Chris Speyer: What about the second count?


ACTIVITIES IN CANADA AFTER 1961
Hon. Erik Nielsen (Yukon):: Madam Speaker, my supplementary question is directed to the Minister of Justice. The first count concerned offences which were committed between 1956 and 1961. I am sure that the Minister has informed himself as to the elements of the second count which was withdrawn.
Can the Minister say whether his Department is considering recommending the laying of charges with respect to offences committed subsequent to 1961, and especially within Canada?
Oral Questions


Mark R. MacGuigan: Madam Speaker, in case my previous words were not sufficiently clear,
I can confirm that there was no evidence before us of transmission of NATO secrets at any time.
With respect to other evidence which may have been revealed at the trial in London, one of our senior Justice prosecutorial officials has been at the trial and I am looking forward to consulting with him on his return as to whether the interest of Canada is further involved in any way in this matter.


POSSIBLE LAYING OF CHARGES
Erik Nielsen: Madam Speaker, with respect to the possibility of offences having been committed subsequent to 1961, will the Minister be discussing with his representative, upon his return from Great Britain, the possibility that those offences were committed, quite apart from supplying NATO secrets, but offences of any kind, against the Official Secrets Act? If found to exist, will his Department be considering the laying of charges against Mr. Hambleton?


Mark R. MacGuigan: Madam Speaker, I would not want to prejudge the result of our inquiries, so I think that it is best to say that we do not know the evidence at this point which was presented in the United Kingdom. In fact some of it was presented in secret and may not be available to us. I certainly will consult with my official on his return to attempt to ascertain whether the interest of Canada is further involved.


AUTOMOTIVE INDUSTRY
Mr. Derek Blackburn (Brant):: Madam Speaker, my question is directed to the Minister of Industry, Trade and Commerce. In view of the fact that Statistics Canada reported today that both exports and imports in the automotive industry are at an all-time low, in view of the fact that an Ontario report states that the automobile industry is in dire straits and that the auto pact is no longer effective and may, indeed, be obsolete, and in view of the fact that Japan now has 27 per cent of the automobile sales market in Canada, which makes us the third largest consuming nation of Japanese cars, what will the Minister do to force the Japanese to come to a quota, to cut back on imports, or to ensure that Japanese cars are sourced in Canada because of the thousands of Canadian workers who are unemployed and the many thousands who will never go back to work?
Hon. Gerald Regan (Minister of State (International
Trade)): Madam Speaker, of course the Hon. Member touches on a very difficult subject. It is the question of the incursion of Japanese motor cars into what had been considered the traditional Canadian market. I believe the Hon. Member will

December 7, 1982
Oral Questions
recognize that sales of all types of motor cars have fallen off as a consequence of the downturn in the economy and as a consequence of energy costs as well.
However, the question of the number of vehicles being imported into this country from Japan is a matter of discussion between Japanese officials and our officials. As well, representations in relation to the utilization of parts from Canadian parts manufacturers in Japanese cars is another very topical and, in my view, important subject.



MINES AND MINING


Mr. Dan Heap (Spadina):: Madam Speaker, my question is directed to the Minister of State for Mines. As the Hon. Minister already knows, the city of Sudbury, which already has 28.5 per cent of its work force unemployed, learned today that another 1,050 workers who were scheduled to go back to work in April will never be recalled.
In an international struggle to secure larger shares of the world market, Canadian workers are the primary victims as their jobs disappear with Canada's declining share of the market. In order to halt this devastation of the Canadian industry and the lives of workers in communities like Sudbury, if the Minister will not consider taking Inco and Falconbridge into public ownership, will she consider a proposal to provide price support or stockpiling incentives to Canadian producers until world prices begin to recover, in the long-term interest of securing our markets in the world and jobs for our workers in Canada?


Hon. Judy Eroia (Minister of State (Mines)):: Madam Speaker, the answer is no. 1 would suggest to the Hon. Member that he consult with the Leader of the New Democratic Party, because it was the Leader of the New Democratic Party who said he would have to consider very carefully all proposals, and was leery of endorsing a stockpiling program.



AUDITOR GENERAL'S REPORT


Mr. Bill Clarke (Vancouver Quadra):: Madam Speaker, my question is directed to the President of the Treasury Board. The Auditor General's Report, which was tabled today, complains of a lack of accountability in the more than 300 Crown Corporations. He refers to them as a sub-government which employs 263,000 people and spends $33 billion. Six years after the Auditor General reported weak and ineffective financial management and control, and in spite of recommendations by the Public Accounts Committee, which is an allparty committee controlled by Government Members, the
Auditor General now reports that, "The legislative framework urgently required is still not in place."
Where is the proper Crown Corporation legislation, and when will it be debated? 1 hope the Minister will not use Bill C-123 as an example, because that Bill was introduced over five months ago. It is an omnibus bill and has not had one word of debate in the House.


Herbert Eser (Herb) Gray: Madam Speaker, Bill C-123. does contain an important section which is designed to address concerns on both sides of the House over the need for a stronger framework of accountability with respect to Crown Corporations. I am informed by my colleague, the House Leader, that he has been holding discussions with House Leaders of Opposition Parties about the possibility of dividing Bill C-123 so that the portion with respect to Government reorganization and the portion with respect to Crown Corporations could be debated separately. I hope that the Government House Leader and his colleagues will soon reach a mutually acceptable understanding on proceeding with this matter at an early date.


William Hillary (Bill) Clarke: The Minister's predecessor and the Auditor General know very well that even that part of Bill C-123 does not address the problems described by the Auditor General.



DEBATE ON LEGISLATIVE MEASURES

William Hillary (Bill) Clarke: Madam Speaker, what we need is legislation that will deal correctly and properly with classification, the comprehensive audit, the appointment of auditors, and the duties and reporting abilities of auditors of Crown Corporations. When will we get those measures?


Herbert Eser (Herb) Gray: Madam Speaker, I do not necessarily agree with my hon. friend that Bill C-123 does not address these issues, particularly when one looks also at the accompanying policy directive. At the same time, we can certainly consider the very useful recommendations of the Auditor General further and in depth when we are ready to proceed with discussion of the Crown Corporation section of Bill C-123. 1 hope that there will be an early mutually satisfactory conclusion to the discussions between House Leaders on this matter so that we can soon turn our attention to it.



ENVIRONMENTAL AFFAIRS


Joseph Lloyd Reid: Madam Speaker, my question is directed to the Minister of the Environment. The Minister will know that there was a very recent discouraging report issued by the New York State Department of Health, stating that contamination by toxic chemicals in the Lake
December 7, 1982

Ontario-Niagara River basin is increasing rather than decreasing. The Minister's own departmental officials say that more is escaping now than was anticipated. Dr. Becking of the Department of National Health and Welfare stated, "Canadian water treatment plants are not equipped to remove toxic chemicals from drinking water". Some of those toxic chemicals are deadly.
My question, and that of the four million Canadians who are using this as a source of water supply is: has the time not yet come for an emergency summit meeting and the establishment of an international task force, rather than leaving it to the Province of Ontario to fight the battles of this international waterway?


Hon. John Roberts (Minister of the Environment):: Madam Speaker, the Hon. Member is mistaken if he thinks we are simply leaving this question to the Province of Ontario. This is a matter of very grave concern to us, although the information I received from my officials is that there is no danger to water supply in the situation.
We have raised this matter on a variety of occasions, as the Hon. Member knows. I think there are court actions under way. We have been of great assistance to those who wish to intervene in the court cases to present their concerns. We are undertaking extensive studies and making great efforts in conjunction with the Department of National Health and Welfare to monitor and assess the situation. It is a matter of very great concern to us and we are pursuing every possible method in our attempt to ensure that the situation is properly assessed and remedied.



REPRESENTATIONS MADE TO UNITED STATES AUTHORITIES

Joseph Lloyd Reid: Madam Speaker, my supplementary question is directed to the same Minister. We know that what the departmental officials have done has been helpful, but it has had little impact. I would ask the Minister, is it not better to stop those chemicals from reaching the water supply we are now discussing? The Minister's officials know there has been a contamination of the bedrock structure along the Niagara River. He also knows that, since 1978, the faulty Niagara Falls, New York, system has been discharging contaminated water, raw sewage containing chemicals, into the Niagara River. Since the Minister has been saying that the federal Government is taking some action, will he table the representations which have been made in writing by either himself or the Department of External Affairs? If nothing more can be done, then what is the purpose and the effect of the 1978 Great Lakes Water Quality Treatment Agreement?


John (Moody) Roberts: Madam Speaker, the Hon. Member is correct. We would very much like to have those contaminated wastes removed by digging them up and having them destroyed. However, they are within the jurisdiction of the Government of the United States, as he
Oral Questions
has indicated. Therefore, we have been making continual representations of the most vigorous sort to have that situation remedied in the direction which he has described.
The Hon. Member has also raised a question involving the Niagara Falls sewage treatment plant, and our extremely vigorous representations have been very effective in leading the U.S. administration to unfreeze funds to be directed toward placing the Niagara Falls, New York, sewage treatment plant into a proper remedial state. There has been action flowing as a result of the kinds of representations we have made to the American authorities.
I would be quite happy to make available to the Hon. Member all the representations that I can. It may very well be a case that, in terms of the diplomatic exchanges between our two governments on this matter, those are matters of a confidential nature which cannot be treated in the way which he has described. However, it is certainly my interest to ensure that he is as aware as I hope Hon. Members are generally of the very strong representations that we have made in the past and will continue to make to American authorities with regard to this matter.



FINANCE


Mr. G. M. Gurbin (Bruce-Grey):: Madam Speaker, in the absence of the Minister of Agriculture my question is directed to the Minister of Finance. The Minister will know that net farm income is projected to be down 15 per cent in 1982 and that farm bankruptcies are up by 65 per cent this year. Since the Liberal Government took office in 1980, farmers have been required to pay $300 million in additional revenue to the federal Government due to increased energy taxes, particularly on gas and diesel fuels. Is the Minister aware of the impact of these additional charges? Is he aware that the Minister of Agriculture made an election promise of an energy tax rebate and, if so, what is he prepared to do about it?


Marc Lalonde: Madam Speaker, I am aware of the impact of energy price increases, not only on farmers but on all Canadian citizens. I would remind the Hon. Member, who I know is aware of the situation, that the price we are paying for oil in Canada is cheaper than in any other industrialized country in the world. We had to adjust gradually to higher prices, in order to get closer to the world price. My hon. colleague will recall that his own party wanted to impose the full world price on farmers. Thanks to the agreement we were able to negotiate with the Province of Alberta, we are now paying only 75 per cent of the world price for oil discovered before 1981. So the present price of oil provides protection for all consumers, including farmers.

December 7, 1982
Oral Questions


Gary Michael Gurbin: I think that what is at issue here, regardless of all the rhetoric about the difference in pricing regimes, involves Liberal promises. The Minister would not want to mislead the House, but he is clearly wrong on statements he has made. The issue here involves Liberal promises of cheap gas and energy rebates. Those are the basic questions.



APPLICATION OF FARM EQUIPMENT PURCHASE TAX CREDIT

Gary Michael Gurbin: My supplementary question, which is also directed to the Minister of Finance, concerns the very specific proposal which has been made by the Canadian Federation of Farm Implement Dealers. This proposal, which is for his consideration as Minister of Finance, is that the investment tax credit which can now be applied toward the purchase of new farm equipment also apply to the purchase of used farm equipment. This would help not only farmers but also implement dealers who are as severely affected as the agricultural sector. Will the Minister of Finance consider this proposal and ensure that it is implemented in his next budget?


Marc Lalonde: Madam Speaker, we promised to introduce an oil and gas pricing system that would be cheaper than the one proposed by the Progressive Conservative Government of 1979-80, and we have kept this promise. Today, prices paid by the Canadian consumer for oil and natural gas are still substantially lower than the levels projected by the Progressive Conservative Government of 1979-80. In this respect, we have kept our word, despite what the Hon. Member just said.
As for his suggestion, 1 have indicated that 1 would be pleased to receive suggestions from any Members of this House for my next budget. I am taking this suggestion as a proposal to be considered when the next budget comes up, and I shall give it my attention.



MINES AND MINING


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Madam Speaker, my question, which is directed to the Minister of State for Mines, involves the 600 workers to be laid off on January 2 by Cominco at its lead/zinc mine at Pine Point in the Northwest Territories. What action will the Minister take to ensure that the three-quarters of the workers who reside in company housing can remain there at reduced rents for the duration of the lay-off, as was the case during the lay-offs at Faro and Schefferville? Will the Minister implement regulations requiring this kind of consideration for workers laid off in
remote, single industry towns, to help keep families and communities together?


Judith A. Erola: Yes, Madam Speaker, I can inform the Hon. Member that we will make every possible effort to work with the company to see that the workers can remain in their homes. At this moment, I would like to remind the Hon. Member that the Cominco lay-off will be a temporary one.



AGRICULTURE


Mr. Vic Althouse (Humboldt-Lake Centre):: Madam
Speaker, my question is directed to the Minister of Finance in the absence of the Minister of Agriculture. Over the last day or so, the Outlook Conference for Agriculture has been taking place in Ottawa. We find that net farm income for 1983 is projected to be $3.7 billion, about the same as it was in 1974. Since those dollars in 1983 will buy between 40 per cent and 50 per cent of what they would buy in 1974, farmers are, in effect, facing a halving of their net income in eight years. What policies have been prepared by the Government to offset this violent decline in farm income? How will the Government turn this situation around?


Marc Lalonde: Madam Speaker, as the Hon. Member is aware, the Canadian economy is not alone in this respect. The economies of all industrialized countries and in fact, the entire world economy is going through a very severe crisis. All sectors, including the manufacturing sector and the mining sector, to name one of our primary resource sectors, have been substantially affected. Business profits are much lower than they were in the past, and unfortunately, not a single sector of the Canadian economy seems to have escaped the international crisis the world is going through today. So the solution is not to try and find some kind of arrangement for a specific sector, but to stimulate the entire economy so that all sectors will be able to benefit. That is why our goal is to reduce the rate of inflation and with it our interest rates, thus making it easier for various sectors to borrow and invest, and 1 hope that farmers will also be among those who will benefit.
As for the specific situation in the agricultural sector, the Hon. Member is aware that thanks to efforts by the Canadian Government, we have had record sales abroad this year. Our farmers will benefit even if prices are low, and at least we have succeeded in expanding our foreign markets and selling all the products we produce here in Canada. These efforts will be continued. The Minister of Agriculture has tabled in the House some very important legislation, namely the Canagrex Bill, and I hope that we can count on the support of the Opposition to expedite passage of this Bill.
December 7, 1982



NATIONAL SECURITY


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, I wish to direct a supplementary question to the Solicitor General. The Solicitor General earlier today, if I heard him correctly, and I believe I did, said he had no personal knowledge of a deal that might have been made with the convicted spy, Hugh Hambleton.
As reported at page 21118 of Hansard, on November 30 the Solicitor General said that after Hambleton had been told that no Canadian charges would be laid:
On the basis of having been given that information he agreed to co-operate with the Security Service and produced considerable additional information-
In other words, he was told there would be no charges. After he was told, he provided the additional information. How, having said that on November 30, can the Minister now stand up in this House of Commons and claim that he had no personal knowledge of a deal?
While I am on my feet, the Minister said he would not comment on this matter while it was before the Old Bailey. It has now been decided in Britain. Will he make a full statement on motions in this House of Commons indicating to the Parliament of Canada exactly what are the facts as known now and as known earlier to the Government of Canada, so that we may judge whether the Government of Canada carried out its responsibilities in this case.


Some Hon. Members:: Hear, hear!


Robert Phillip Kaplan: Madam Speaker, I meant in my first answer to make it very clear that there is no letter offering an immunity. I said I had no personal knowledge of that letter but I verified with those who might have sent such a letter on my behalf, or on anybody's behalf, and can assure the House that there is no letter offering an immunity. 1 have no idea what Mr. Hambleton has in that envelope. I am as interested as the Members opposite to know, but I can assure you it is not a letter from me or from anyone on behalf of the Government offering him an immunity.
As to the deal, I think it very important to understand that what the Security Service told Mr. Hambleton was not that the Department of Justice had decided that he would not be prosecuted, but that the Department of Justice had come to the conclusion that he could not be prosecuted because there was insufficient evidence.
Where a deal is created, one side furnishes consideration and the other side furnishes consideration. That was not the arrangement here because, having revealed, as the Security Service was authorized by the Minister of Justice to do, that a prosecution could not be brought because it would not succeed,
Oral Questions
they asked Mr. Hambleton if he would give them further information and he agreed to do it.
Why would Mr. Hambleton do such a thing that could work out to be against his interest? Why did he go to Britain? These are questions that are very difficult for someone to understand, without knowing Mr. Hambleton. I cannot help the House in understanding, for example, why, after being told of the reception he would receive in Great Britain, he would nevertheless decide to go to Britain. Why, when the Security Service was still interested in prosecuting him, if they could get admissible evidence, he would willingly, having been told simply that he could not be prosecuted on the basis of the evidence that they had-


Flora Isabel MacDonald: Peter Treu was.


An Hon. Member:: He is a spy.


Robert Phillip Kaplan: -why he would willingly give further evidence. He is not an easy person to understand-


Flora Isabel MacDonald: That is incredible.


Robert Phillip Kaplan: -and 1 cannot help the Members opposite in understanding him any better.



REQUEST THAT MINISTER MAKE STATEMENT TO HOUSE

Charles Joseph Clark: Madam Speaker, the Minister himself has used the word "deal". That is his language; he just used the word "deal". He is nodding his head to show that he agrees with that interpretation.


Some Hon. Members:: No deal.


Charles Joseph Clark: We will read Hansard. The Minister referred to the deal, and he indicated that, after an assurance was given that prosecution would not or could not proceed, Hambleton then took certain actions, as a consequence of that undertaking being given by the Government of Canada.
My question is simple. Will the Solicitor General give us an undertaking now that he will make a full statement to this House of Commons so that we can judge for ourselves what parts of Mr. Hambleton's situation are understandable to this House of Commons, so that we can make that judgment and not be held back by the confusion of the Solicitor General. Will he make the information available to Parliament?


Robert Phillip Kaplan: Madam Speaker, I have given forthright answers to the questions that 1 have been asked today. I am prepared to answer other questions that I am asked to the greatest extent possible, but I would like to remind Hon. Members that the KGB must very well now be doing a damage assessment on this matter, trying to see exactly what the Security Service has learned, what information the Security Service and other friendly Security Services now have about their operations, from Mr. Hambleton and from the information that he has given. I would ask

December 7, 1982
Petitions
the Hon. Members not to invite me or push me too far to assist	POINT OF ORDER
the KGB in making that assessment.



MR. MURPHY-S O. 43 MOTION

Some Hon. Members:: Oh, oh!


Mr. Epp:: They do not trust you, Bob.



PARLIAMENT'S RIGHT TO KNOW

Charles Joseph Clark: We have to give the Minister some credit for imagination. First, he was hiding behind the courts of Great Britain. Now he is hiding behind the KGB.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: This House of Commons has a right to know what deals were made by the Government of Canada with a Canadian citizen, a Canadian resident who has just been convicted of spying by courts in the United Kingdom. Will the Minister give a complete statement on motions to this House of Commons?


Robert Phillip Kaplan: Madam Speaker, when the Hon. Member says that the House has a right to know what deals, 1 have answered that question. 1 have indicated that there were no deals.


Flora Isabel MacDonald: That is not what you said before.


Robert Phillip Kaplan: I have explained the basis on which Mr. Hambleton gave his information, and 1 would also remind the House that that information was shared with the British Security Service-


Flora Isabel MacDonald: You said there was a deal.


Robert Phillip Kaplan: -with Ml-5, and it was an important contributing factor to the investigation and the prosecution which took place in Great Britain.
1 am prepared to answer other questions that were asked to the greatest extent possible to assist the House in understanding fully the circumstances under which the Security Service dealt with Mr. Hambleton; the basis on which decisions were made by the Department of Justice; advice given by the Minister of Justice; but beyond that I do not know how I could be more forthcoming about it.



PETITIONS

Mr. Rod Murphy (Churchill):: Madam Speaker, 1 wish to raise a point of Order on a statement you made in the House yesterday. Yesterday I was raising a motion under Standing Order 43 with regard to large numbers of Conservative Members being absent on a number of occasions. On each of those occasions a large number of Conservatives were absent, thereby allowing the Liberal Government to stay in power. You ruled that-


Madam Speaker:: Order, please. Precisely, that statement I made in the House yesterday was a ruling. Therefore, the Hon. Member should know that he may not comment on a ruling. That ruling is quite consistent with rulings made by my predecessors and I maintain that ruling; and I would ask the Hon. Member not to comment on it.



ROUTINE PROCEEDINGS


[Stage Direction]
Hon. Paul J. Cosgrove (for the Minister of Finance),
pursuant to Standing Order 60(11), moved for leave to introduce Bill C-139, an Act to amend the statute law relating to income tax (No. 2).
Motion agreed to, Bill read the first time and ordered to be printed.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 4,083 and 4,370.


[Stage Direction]
tabling OF reports OF CLERK OF petitions	
Question No. 4,083-Mr. Herbert:
Madam Speaker:: 1 have the honour to inform the House that the Clerk of the House has laid upon the Table reports of the Clerk of Petitions stating that he has examined the petitions presented by Hon. Members on Monday, December 6, 1982 and found that the petitions meet the requirements of the Standing Order as to form.
What is the approximate average cost of a letter-size postal delivery box as installed in Post Office lobbies and what is the average life of such postal boxes?


Mr. David Berger (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: 1 am informed by the Canada Post Corporation as follows: average cost: $9.50 each, average life: 20 to 50 years of service.
December 7, 1982


Mr. Manly: 1.	How many designated anchoring places for foreign vessels are in the Strait of Georgia and adjoining channels?
2.	Are foreign vessels anchored in these areas allowed to practise (a) chipping
(b)	maintenance (c) lightering (d) flushing?
3.	In (a) 1979 (b) 1980 (c) 1981 (d) 1982, how many charges under the Canada Shipping Act and other pollution-related Acts were laid against foreign vessels anchored in the Strait of Georgia and adjoining channels?
4.	What is the role of the Coast Guard with respect to the enforcement of regulations under the Canada Shipping Act?
5.	How many persons are involved in the enforcement of these regulations in British Columbia waters?
6.	For (a) 1979 (b) 1980 (c) 1981 (d) 1982, what was the average length of time that foreign vessels stayed in designated anchoring places in British Columbia waters?
7.	Are crews of foreign vessels allowed to come ashore to dig clams and, if so, what are the regulations governing this and other Fishing activities of foreign crews?


David P. Smith: I am informed by the Departments of Employment and Immigration, Fisheries and Oceans, National Revenue and Transport Canada as follows:
1.	There are no anchorage areas specifically designated by regulation in the Strait of Georgia and adjoining channels, except for anchorage areas designated by the National Harbours Board within port areas under its jurisdiction. There is one area in which vessels are prohibited from anchoring except with the permission of the Minister, that is the area designated by the Parry Bay Anchorage Regulations. There are 28 anchoring places designated by the National Harbours Board within Vancouver Harbour and four off Nanaimo Harbour.
There are at least eight other areas which are not officially designated but are commonly used for anchoring; such as Houston Passage, Cowichan Bay, Ladysmith Harbour, Trin-comali Channel, Pylades Channel, Plumper Sound, Squamish Chemainus. Other suitable anchorages may also be used by ships at their discretion.
2.	(a), (b) and (d) Chipping, maintenance and flushing are not restricted except that the vessel must not contravene the provisions of the Garbage Pollution Prevention Regulations or the Oil Pollution Prevention Regulations.
(c)	Foreign vessels would be permitted to lighter cargo from designated anchorage points direct to authorized customs ports, provided such were the continuation of an international voyage and all applicable customs reporting and control requirements were met.
3.	The charges laid under the Oil Pollution Prevention Regulations against foreign ships in the Strait of Georgia are as follows:
Year
Reported	Prosecutions
Incidents	Initiated
(a)	1979	5	2(b)	1980	4	3(c)	1981	3	2(d)	1982 (to date)	1	0
Order Paper Questions
4.	The Canadian Coast Guard enforces regulations made under the Canada Shipping Act by inspection and certification where required. Certain regulations may also be enforced by peace officers, and by Harbour Masters. Any person may "lay an information" under these regulations.
5.	In British Columbia, the Coast Guard has 39 Ship Safety officers and 75 Vessel Traffic Management officers involved with enforcing regulations. Additional Transport Canada and Communications Canada personnel are involved with the enforcement of the Ship Station Radio Regulations.
6.	Vessels may anchor for a matter of minutes or may be at anchor under exceptional circumstances for months, therefore it is impossible to establish a meaningful "average length of time". Typically vessels remain at anchor from three to seven days, (probably closer to three days).
7.	Crew members of foreign fishing vessels authorized to enter the Ports of Vancouver or Victoria must be customs cleared before disembarking on Canadian soil and are entitled to the same rights and privileges as any non-resident visitor. Crew members of foreign vessels are required by the Immigration Regulations, 1978, as amended, to obtain Employment Authorizations (work permits) if they are intending to engage in any commercial fishing operation, including the digging of clams, while in Canadian waters. Such authorizations would be issued only where it could be established that the employment of Canadian citizens or permanent residents would not be adversely affected by the activities of such crew members. If the individual is clam digging for personal consumption (not for sale or barter) a licence is not required. However, he must abide by regulations relative to catch limits, closed times, etc.
If the foreign fishing vessel is anchored in an isolated area along the coast, departmental policy, in the form of a condition of the licence issued to a foreign fishing vessel, is that crew members are not permitted ashore in accordance with Customs and Immigration regulations. Therefore, clam digging would not be permitted. Crew members of foreign vessels, other than fishing vessels, may sport fish subject to their taking out a sport fish licence. Regulations governing other fishing activities of foreign crews are the Coastal Fisheries Protection Regulations and the Foreign Vessel Fishing Regulations.
[English)


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


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


Sinclair McKnight Stevens: Madam Speaker, I am compelled once again to ask the Parliamentary Secretary why he has not replied to a question I asked on January 29, 1981, almost two years ago, that simply requested the total cost of the Prime Minister's

December 7, 1982
Supplementary Retirement Benefits Act (No. 2)
December-January world tour and what percentage of the full cost would be paid for by Canadian taxpayers. As we all know, the Prime Minister has taken several jaunts since that world trip. Recently he was in Moscow. Now he is planning to go in the other direction. Surely the people of Canada are entitled to know what are the total costs to be borne by them with respect to these capers.


David P. Smith: Madam Speaker, I am shocked by the use of the word "caper". These were official visits undertaken by the Prime Minister as the representative of the Government of this country. I regret the Hon. Member has chosen to inject that tone into this question. Nevertheless, I have made inquiries since he raised this with me a few days ago and I will continue to pursue the matter on his behalf.


Madam Speaker:: Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, December 6, consideration of the motion of Mr. Gray that Bill C-133, an Act to amend the Supplementary Retirement Benefits Act (No. 2), be read the second time and referred to the Standing Committee on Miscellaneous Estimates, and the amendment thereto of Mr. Baker (Nepean-Carleton) (p. 21305).
Mr. Gordon Taylor (Bow River):: Madam Speaker, last night I had about four minutes before ten o'clock. 1 was dealing with a comment by the Hon. Member for Churchill (Mr. Murphy) in connection with Bill C-124. Today I have the benefit of Hansard and I want to pursue the matter further. It would be bad for this to remain in Hansard, because it is not correct. At page 21328 the Hon. Member for Churchill said:
-Bill C-124 that set the stage, that announced the Government's basic principle of limiting wages, old age pensions, Family Allowances and the pensions of retired civil servants, to six and five.
As I mentioned last night, there is not one word in Bill C-124 about the old age pension, the child allowance or superannuates. When the Hon. Member for Churchill says that we supported those items by voting for Bill C-124, he is completely in error. The Hon. Member should have read Bill C-124 before coming to that conclusion. If he had read Bill C-124, he certainly misled the House and the people out there in the great beyond.
I want to tell the Members of this House and the people of Canada that the Progressive Conservative Party did not support the reduction in indexing of the old age pension, child
credits or the superannuates. I suppose when a Party is drowning, it will grab at any straw. That appears to be what the Hon. Member was doing last night. I hope I have put the record straight.
A little further in the Hon. Member's speech last night he said something to which I objected, but I did not have his exact words. He said, and I quote:
I remind the Conservatives of some of the things their Leader said. He said, in reaction to the budget of June 28, 1982, which announced the particular six and five regime:
He then quoted our Leader as having said:
We are relieved that it is beginning to accept that Government spending is a major cause of current economic problems ... it is a step in the right direction.
How in the world the Hon. Member for Churchill can equate that with a reduction in indexing for old age pensioners is beyond me. There is no relation whatsoever. Our Leader and this Party have been calling for reduced expenditures on the part of the Government. Government expenditure is one of the major causes of inflation. The NDP may want more expenditures, but we want less and we want Canadians to know that. The Government cannot go on spending money that it does not have. That is one of the major causes of inflation.
If anyone can find the items in Bills C-131, 132, 133 or 124, I will apologize to the House, but they are not there. Bill C-124 reduces the wages of MPs, Senators and judges, those who have jobs. The NDP opposed it. In fact, they bragged about that last night. They did not want a reduction in wages for Members of Parliament or Senators. They could not have or they would have voted for the Bill. They do not want a reduction for those in the high income brackets of the Public Service or for judges. Nobody likes a reduction, but when things are tough those with jobs should suffer the reductions first, not those who are retired or without a job. Bill C-124 did not have anything to do with Bill C-133. I repeat that I oppose Bill C-133.
I now want to deal with some of the provisions of Bill C-133. The first item that bothers me is an item that 1 raised in this House on July 27 in questions to the then Minister of Finance. The reply that he gave should be repeated. People should know what is involved. My question to the then Minister of Finance on that day is recorded at page 19086 of Hansard, July 7, 1982, and 1 quote:
It involves about 120,000 retired public servants, 30,000 retired armed forces people, and 5,000 retired members of the RCMP. Given that former public servants who worked from 30 years to 50 years for the federal Government contributed 6.5 per cent of their earnings for basic pensions plus one per cent for indexing in order to secure full pensions when they retired-this was not only a condition of their employment; it was confirmed by law in the Supplementary Retirement Benefits Act-and given that the June budget has capped the indexing of these pensions at 6 per cent, under what authority is the Government doing this? Why is the Government breaking its promise to former employees who are in the sunset years of their lives, by cutting off part of their pensions when many of these people are barely making both ends meet now?
December 7, 1982

What was the answer of the then Minister of Finance? I quote from the same page of Hansard:
-the Hon. Member referred to the full pensions which are being received and will be received by retired public servants. Obviously there is no intention to affect the pension rights of retired public servants.
I repeat that: " . . . there is no intention to affect the pension rights of retired public servants." The Minister went on to say that "what is intended is to cap the indexation". The Minister obviously considers that part of the indexation is not part of the pension. But when a pensioner receives his money, he feels the whole amount is his pension. He needs it all to make both ends meet. The Minister is simply grasping at straws when he says the indexation is completely different from the pension. They are one and the same thing.
The Minister continues his answer at page 19086 of Hansard, and I quote:
Public servants will obviously receive increases in subsequent years, but the increases will be 6 per cent and 5 per cent. The impact, of course, of that capping of indexation can be minimized, and will undoubtedly be minimized as we make progress toward the 6 per cent target for inflation.
Again, the Minister is using what we call rationalization. We used to do that, Mr. Speaker, in mathematics. If you have an irregular item with which to deal, then you try to rationalize; you dispose of that irrational quantity by rationalizing. That is exactly what is being done here. The Government is trying to dispose of the information with which it is going to index the pensions. This Bill proves I was correct at that time and the then Minister of Finance was not.
The Minister continues his answer at the same page of Hansard as follows:
Obviously that authority will be sought from Parliament by way of legislation in order to achieve the objectives of the Government.
And here and now is the legislation which he mentioned at that time. My reply to him was:
Changing the law might make it legally right, but it will not make it morally right. This is actually a doublecross of people who worked from 30 years to 50 years to build up pensions and who are not now in the $30,000 bracket which the Minister mentioned but are having a hard time making both ends meet; and the minister will now take some of that away from them.
My supplementary question again dealt with the funding of indexing. I said:
-will this not really make every public servant of the federal government today wary of the fact that they are now contributing toward pensions and make them worry about the future when some future government may suddenly cut their pensions in half? This is not playing the game with former employees. The act makes present employees wary of this particular thing. I suggest to the minister that this is confiscation of something that does not belong to the government. Is not the index fund already able to carry full indexing?
The Minister replied:
1 am not quite sure what the question was because I did not hear the peroration of the Hon. Member. However, I would tell him that I do not believe that public servants will be wary of this action because 1 think that retired public servants will understand the reasons for this change, and the reasons why a sacrifice is asked of them. If the Hon. Member has read some newspapers he will have noticed that a number of retired public servants were quite prepared to accept this policy and not accept the rather defeatist attitude of the Hon. Member.
Supplementary Retirement Benefits Act (No. 2)
I would remind the Hon. Member that while the pensions of the public servants are indexed and will continue to be indexed, the pensions of most retired persons from the private sector are not indexed at all.
Again, that is rationalization. In the private sector, if any individual paid part of his wage towards indexing, no employer in this country would have the gall to reduce the indexing after the man retired. No court would permit an employer to do that. The Goverment is doing something which a private industry just would not be permitted to do. These people contributed to this fund. They have a right to it. It is not the Government's money; the Government should get that into its head. It has no authority to handle this money except as set out in the legislation which was put on the books when an agreement was made with those who contributed.
1 would like to deal with the fund briefly. For instance, the public service superannuation fund on March 31, 1981, as mentioned yesterday, was $4.7 billion. The Canadian Armed Forces superannuation fund was $9,327 billion, or altogether a little over $14 billion. But the pensioners themselves, in their own literature, say it is altogether different. They say the public service superannuation account had a credit balance at the end of the fiscal year, March 31, 1981, of almost $13 billion. Then they put in brackets, to be exact, $12,705,719.
The Member for Churchill said yesterday he had been waiting for an answer to a question as to how much was actually in the fund. He has been waiting for over a year and still the answer is not supplied. On July 8 I wrote a letter to the then Minister of Finance because I wanted that information also and thought the fastest way to get it was to send a letter to the Minister of Finance directly instead of putting a question on the Order Paper and waiting month after month to receive an answer. I wrote to the Minister on July 8, 1982, the day after I asked him the question how much was in these funds. I asked him what was the balance as of March 31, 1982? What portion of the amount was earnings through interest? What portion of the amount was contributed by the employer? What authority is there for the Government to restrict the indexing of these pensions? What use is being made of the unused portions of the funds collected from the public servants and retired public servants, and what is happening to the fund now? 1 have not even had an answer. I might just as well have put the question on the Order Paper.
I thought I was going the fastest route. The Hon. Member for Churchill did not get an answer for over a year. 1 did not get an answer to my letter of July 8, 1982. What is wrong? Are we not entitled to know the exact amount of money in these funds? Are we not entitled to know the exact amount of interest which has accrued in these funds? Why are we not permitted to know what constitutes each fund? Which fund includes public servants? Which one includes the RCMP? Which one includes retired Armed Forces personnel?
Mr. Speaker, this is public information and I think everyone is entitled to know what use is being made of this fund. The Government has this fund sitting there, the $12 billion or $25 billion, whichever way you look at it, the two together or the one. That is a lot of money. The superannuates have said that

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the exact amount was $12,705 billion. If that figure is correct, and 1 have no reason to doubt it, what rate of interest have they been getting? It is the duty of the Government to get the highest possible rate of interest on these funds. If it was only 4 per cent, then that is over $480 million added per year. If it was 6 per cent, it would net over $700 million a year. If it was 8 per cent, it would be about $1 billion a year.
During the last two or three years, Mr. Speaker, the Government could have placed this money in short-term contracts which earned up to 13 per cent, 14 per cent, 15 per cent or 16 per cent. They could have had a tremendous amount of money in this fund. I think the superannuates particularly are entitled to this information. Members of Parliament are entitled to this information but we are not getting it. If we do not get it very soon, I think this should be a special item for the Auditor General to look at. Let us find out what is going on with this money, who is responsible for the administration of the money, and what they are doing with it. Are they getting proper interest rates? Is the Government using this money for some other purpose? I want to know. If the Government is not, all it has to do is open up the books. There should be no reason the books are not open in that regard. If we do not get this information very soon, all I can say is that the Government must be trying to hide something. If not, the Government should provide this information to the House before debate on this Bill comes to a conclusion.
Let me now deal with some of the comments made by some Hon. Members on the other side of the House. I mentioned a few moments ago that most of what they had to say was rationalization. The exception was one Member who said he was not supporting the Bill, that he was going to do what his constituents told him. I admire him for that but I will admire him a lot more if he stands up when the vote is called and votes against it. That will be the proof of the pudding. I have no reason to believe he will not, but I have heard Liberal Members talking against Bills before and then stand up and support them. I have heard Liberal Members in debate make very terrible comments about some legislation and then stand up and support it. I would like to see what exactly they are going to do on this particular Bill, because it is not good enough to rationalize.
This Bill will affect the lives of men and women and their families-because some of then still have families and relatives to support. There was a contract with the civil servants that when they retired they would get their extra money from indexation. In other words, it is more than just a contract, it is actually a deferred payment. The money is put into a fund and there are people who are supposed to make sure that that money is going to be there when these people retire. Yet here we have the Government by legislation dipping into those funds, money it does not own, and that simply should not be tolerated by any member of this House.
What did the President of the Treasury Board (Mr. Gray) say about this? Any reduction of full indexation is an outright breach of faith with those already retired. That is what it is, Mr. Speaker. It is their superannuation plan-that is what the
Minister called it-and consequently any reduction in full indexation is an outright breach of faith. Surely this Government does not want to be forever labelled as one which breaks its word to those people after they have retired, having contributed for many years.
When the superannuation plan was introduced, the Government said it would be non-negotiable, Mr. Speaker. "We will put it into law", the Government said. So this Act was set up and that satisfied people because it was on the law books of the country. No Government is going to change that. Then the Government went on to say that no changes would be made without consultation. To date there has been no attempt at consultation. The superannuates have not even been called in to discuss the matter. Any meetings held have been called by the pensioners themselves, in order to bring this matter to the attention of the public. The Government has not consulted with them, and this is becoming all too common. The Minister of the Environment (Mr. Roberts) puts a complex in the middle of a park without consulting the people involved. That is not democracy; that is not the kind of Government we want in this country.
The former President of the Treasury Board, who is now Minister of State for Economic Development (Mr. Johnston), and the Government of the day on numerous occasions proclaimed indexation of pensions to the CPI as a minimum benefit. These guarantees were clear, straightforward and unconditional. Pensioners contributed to the plan and many took early retirement based on the Government's promise of full indexation. How can the Government alter the agreement under which these workers retired after they have retired?
If there has to be some change, give the pensioners who are now contributing a choice as to whether they want to contribute; do not tell them they have to, as these former public servants had to. Interfering with their pensions after they have retired is a disgraceful thing for any employer to do.
The Government says that the public service superannuation account stands at $15 billion, Mr. Speaker.


Mr. Baker (Nepean-Carleton):: More like $17 billion.


Gordon Edward Taylor: It earns interest at the rate of 10 per cent annually, or $1.5 billion. Let us look at that for a moment. How much is it costing to do this? The fund should have been built up considerably because payments out were a maximum of $470.6 million, and the interest received would have been $1.5 billion. This whole thing needs to be pretty carefully looked at by the Auditor General, Mr. Speaker, or perhaps by the Public Accounts Committee. The difficulty with the Public Accounts Committee is that it is after the fact, a year too late. We do not want indexation to come after the fact. We do not want the indexation reduction to take place at all. Retired civil servants, retired RCMP and retired Army personnel were given a promise and we do not want to see that promise breached. We do not want these people to be double-crossed. We do not want this thing to go into effect at all. Some Hon.
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Members have said that that will depend on the Liberal side of the House. If the Liberals support this Bill after what some of them have said about it, that will be a pretty sad thing.
People across the country will not be fooled by the rationalization offered in the speeches by Members of the Government. People take a promise to be a promise and they expect the Government to keep that promise. If the Government wants to change things now it should talk to people who are presently in the civil service and not go behind the backs of those already retired. If this indexation must be reduced, then let the Government reduce it for those people who are working and contributing so that they will know how things stand before they retire. It would be a shame if they took early retirement and then found they did not have enough to live on.
The Minister of Finance and one or two other Members have said that the pensioners are quite happy to do this. Just the other night in a different debate, I told the House about an old aged pensioner who kept his thermometer down low because he was trying to co-operate with the Government. He wanted to do what the Government asked, so he was half freezing. He wore a heavy sweater and his wife wore a kimono because the room they were in was so cold they could not stand it. They said they wanted to co-operate. Of course, they would co-operate to the fullest extent. No retired civil servant should be asked to co-operate with a Government which breaks its contracts or by a Government which breaches the promises it made to him when he was working.
I have received a lot of letters and I wish I had time to read them all, but I shall only read a few excerpts. These letters are from people who need the money, not from people whose incomes are $50,000 or $60,000. Undoubtedly some people have quite a bit of money. It may come from an inheritance or luck in gambling or in business-or someone may have married a rich widow! I do not know why they are rich but some people have high incomes, although not as high as Ian Sinclair's which is in the $600,000 per annum bracket. I suppose some people are well fixed and are quite able to look after themselves, but the vast majority of ordinary, every day people depend on the total pension, including indexing, in order to maintain the standard of living to which they have been accustomed.
A letter that I have in front of me reads in part as follows:
Bill C-133 proposed by your majority Government will not only break this legislated contract but permit actual theft of money held in trust by the Government.
That letter was written to the Minister of the Environment (Mr. Roberts), who said the other day that he would not break a contract in order to save a park in Banff. Apparently he agreed in Cabinet to break the contract with our aged, our kids and superannuates, and to cut their allowances. That is pretty sad, Mr. Speaker.
Another pensioner wrote to me from British Columbia as follows:
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You can tell the Hon. Allan J. MacEachen that we are wary of this Government. I'm sure anyone who has retired from Public Service, Cdn. Forces or RCMP are just as wary as 1 am.
People are wary all right. I think it is probable that more people who are now contributing will become pretty wary as well. They had better watch what is happening or they might find themselves in this position a few years from now.
The Government claims that it has to get the money. I can offer a few suggestions as to where it could get the money without taking it from the crippled, the aged, the superannuates and the kids. There are a number of other ways and I will list three or four of them. So many times the Government complains that we just vote against everything and do not offer any alternatives. The trouble is that the Government does not listen to the alternatives that we suggest.
One alternative was offered to the Government just the other day by the Hon. Member for Peterborough (Mr. Domm) involving $89,000. If someone on a pension wants to keep a total of the following figures, they will see just how much is involved in my three or four suggestions. Why are we paying $89,000 to someone to write metric into a sports book? Did any football player ask that yards be changed? Did any baseball player or tennis player ask for this? This $89,000 is being spent at the whim of the Government in order to incorporate metric into a sports book. I suppose the next thing is that it will be hiring somebody to incorporate metric into the operation of auction marts. That would destroy the whole thing, as the Hon. Member for Crowfoot (Mr. Malone) has said.


Mr. Hovdebo:: They already do that.


Gordon Edward Taylor: The Hon. Member for Prince Albert (Mr. Hovdebo) says that they already do that. I am not so sure that they do it in the Province of Alberta but I suppose some places feel that they have to do it. That is the way metric was brought in. People were told that they were going to have to do it and they just might as well agree with it. Then the Government claims to have the agreement of the people. As the Hon. Member for Winnipeg-Assiniboine (Mr. McKenzie) says, Members of the Government ought to be thrown in jail. It is going to cost $89,000 to produce this useless, nonsensical, silly book on metric to tell football players that they cannot play in yards any more.
Last year the Metric Commission received $12 million but this year it will receive $26 million. Why are we doubling the amount available to the Metric Commission and cutting back on old age pensions? Why are we doubling the amount available to the Metric Commission and taking it off the kids of this country who will not have enough money to buy their books? Why are we taking it away from retired RCMP personnel who risked their lives trying to protect us? We are going to cut their pensions because they can no longer contribute but we are going to double the vote for the Metric Commission.
Do Hon. Members opposite know what is going on? How can they support that kind of thing? The Metric Commission

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should be thrown out, not have its allotment doubled. The people of Canada do not want it. Let us go back to free choice and use metric if we want to or Imperial if we want to use that. That would not cost a cent or, at least, it would cost very little. So there is $89,000 for the book and another $14 million for the Metric Commission.
Another problem is the provision for 28 more Members of this House. Mr. Speaker, will the people of this country be any better represented with 28 more Members? The elections of 1979 and 1980 were run with the present boundaries, but now those boundaries are to be changed. People will just be confused. Who will pay for all this? Will it be the Government? No, the people will pay. Normally the Boundary Commission receives $1 million each year to carry out its work and keep everything ready for an election at any time. I do not complain about that but I certainly complain about the cost of changing the boundaries and the advertising inserts that came with some newspapers.
I do not know how much extra all this will cost, but let us take a minimum figure of $1 million, although it will probably be more like $5 million or $9 million. Another $1 million for the Boundary Commission plus the cost of 28 new Members will add up. I am told it costs the people of Canada $100,000 for every MP at present, so 28 times $100,000 means that those new Members will cost us another $2,800,000. And it is completely unnecessary, Mr. Speaker. Canada does not need them and the House of Commons does not need them.
The Hon. Member for Red Deer (Mr. Towers) introduced a Bill in an attempt to bring some common sense and ordinary thinking into the matter, but they threw it out; they would not support it.
The price of milk will rise because we now have to buy jugs of milk in litres. The money for the kids will go down; they will have a reduced amount.
What are they doing to the people of the country? How can Liberal Members support this type of legislation? I just cannot understand it. Let us keep our figures to a minimum so that no one will say that we are being liberal with our figures. We will be conservative with our figures-another million could have been saved.
There is another item to which I could refer concerning the use of the money that the Government has. The Government does not have a very good record. When the Prairie Farm Assistance Act came to an end, there was $9,060,000 in the fund. The Hon. Member for Moose Jaw (Mr. Neil) cried and cried about this, trying to get some sense put into the system. But what has happened? The money sat there year after year drawing no interest. This was not fair to farmers. The money belonged to them, but they did not even get any interest from it as it sat in the fund for years.
Then I could talk about the trip of Janet Smith to the Riviera.


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member but his allotted time has expired. He may continue with unanimous consent of the House. Is there unanimous consent?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Mr. Deputy Speaker:: There does not appear to be unanimous consent.
[ Translation]


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, it is with some hesitation, but also with the support, 1 believe, of many of my constituents, that I am taking part in this debate on second reading of Bill C-133. I should like to start by providing some background for the debate. 1 have been called a rebel on this issue, and I assume that it was meant as a negative assessment and not as a word of praise. Mr. Speaker, Bill C-133 which deals with the indexing of pensions of federal public servants is an issue that has provoked considerable response at our offices in the riding and on Parliament Hill, in the form of letters, telephone calls and comments from my constituents and other people who do not necessarily live in Ottawa-Vanier. The House will recall that since 1977, the indexing issue has been raised from time to time. It was given serious consideration in the House in 1978 and 1979, and a report on the subject was tabled at the committee stage, a report that had the unanimous support of all parties, and which, as I thought at the time, made some valid, equitable and very reasonable proposals for resolving the thorny issue of maintaining the purchasing power of the elderly during retirement. Unfortunately, the report died on the Order Paper, elections were held in 1979, the Progressive Conservatives came to power and the whole issue was shelved and not heard of again. Now, in 1982, we are discussing Bill C-133, legislation which is aimed at capping indexation of public servants' pensions.
Mr. Speaker, to get back to the far from praiseworthy term applied by a number of newspapers to my position on this issue, namely, that I am a rebel, I would refer to certain debates reported in Hansard in 1978, and I am going to quote some comments by Robert Andras who was President of the Treasury Board at the time. At page 3623 in Hansard of March 9, 1978, when Mr. Andras was introducing a Bill concerning indexation of pensions, he explained why he wanted to maintain indexation. 1 quote, from page 3623:
In the government's view, it is unjust and unfair to allow the rate of inflation to determine arbitrarily the real value of pensions, and that is exactly what happens when pensions are not adjusted for changes in the cost of living.
In short, the principle of maintaining the purchasing value of pensions so that pensioners can maintain their access to the same basked of goods and services is a principle to which the government is committed, and remains committed.
I also want to mention several comments made by the Prime Minister of Canada (Mr. Trudeau) at the National Pensions Conference held in March and April of 1981. The Prime
December 7, 1982

Minister recalled that the Canadian Government under Mackenzie King had established a modest pension plan, which was gradually expanded in subsequent years. Under Prime Minister Pearson, the Government added an income supplement for people lacking any other source of income, and as you know-i am quoting the Prime Minister-my Government has indexed these pensions to cost-of-living increases.
In his opening statement, the Prime Minister went on to urge participants to look at important issues, such as what would constitute a decent retirement income, and should there not be special consideration for people on middle incomes who, all things being equal, often suffer a very substantial loss of income upon retirement.
Finally, the Prime Minister invited participants to consider another important point, and I am quoting from page 12 on the Conference proceedings:
Pensions which are not protected against inflation naturally tend to dwindle over the years. People who thought they had purchased protection for the rest of their lives find that they have more serious financial problems the older they become. The unfairness of that situation, particularly when the savings pool to which they have contributed may have been reaping inflationary interest premiums, is not tolerable in a nation which believes in social justice.
Mr. Speaker, 1 could quote a number of passages from various speeches that have been quoted in the House during the last few years. However, I am confident that being a rebel does not mean forsaking a principle as basic as that of protecting people who because of circumtances are unable to defend themselves. They cannot ask for a raise and are often unable to seek gainful employment.

Before discussing my concerns about this unfortunate piece of legislation, I wish to review briefly the history and present status of the Public Service pension plan. The first Superannuation Act was passed in 1870, only three years after Confederation. It provided for annual allowances upon retirement because of age or disability, based upon the average salary for the last three years of work. However, there was no provisions for what are now called survivor benefits.
The next milestone came in 1924 with the passage of the Public Service Superannuation Act. Coverage was broadened to include departments, commissions, corporations and others designated by the Act or by the Governor in Council. Benefits were granted by the Governor in Council for age, disability or abolition of position and after ten years of service for resignation or dismissal.
The Civil Servants Widows Annuities Act passed in 1926 provided first benefits to widows of contributors who had retired or died prior to 1925. A requirement for ten years' service as a condition for granting benefits was lowered to five years in 1944.
Our present Act, the Public Service Superannuation Act, was passed in 1953. Among other things, the Act broadened the coverage and removed the distinction between permanent and temporary employees. Of special significance was the
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recognition in the Act of benefits as a right rather than as a discretionary grant by the Governor in Council. 1 repeat that benefits are a right. This is a point which may have been overlooked by at least some of the present advisers to the Government.
The Supplementary Death Benefit Plan was added as part of that same Act in 1955. Part III of the Act was added in 1970, to deal with contributions needed to finance the escalation of pensions in response to inflationary pressures authorized by the new Supplementary Retirement Benefits Act of 1970.
In the interim period there had been a number of technical changes arrived at providing for the integration of certain provisions of the Act with those of the Canada Pension Plan, the Quebec Pension Plan and the Pension Benefits Standards Act, including the matter of pension portability.
In 1967, employees leaving the Public Service after age 45 and ten years' service automatically became entitled to pension benefits. In 1975, the equality of status for male and female contributors was legislated by Bill C-52 for both contributions and benefits. That was not 50 years ago; that was in 1975.
The Supplementary Retirement Benefits Act initially provided that benefits would increase in relation to the cost of living with a maximum increase of 2 per cent per year. Contribution rates for both employee and employer were set at a half of 1 per cent. In 1974, the 2 per cent ceiling on increases was removed and, in 1977, the supplementary contribution rates were increased from one-half per cent to 1 per cent for both the employees and the employer.
Today, the Public Service Pension Plan requires that public servants pay 6.5 per cent of their annual salary into the superannuation fund account. In addition, they pay 1 per cent of their annual salary into the supplementary benefits accounts to cover indexing of cost of living increases after retirement. Of course, the employer matches these contributions plus interest earnings of only 4 per cent.
1 was told today that that has increased to 6.5 per cent, but I have not had a chance to verify that figure. Therefore, I will stay with the 4 per cent figure.
It is important to note that these contributions go into separate accounts, an account for pensions and an account for indexing, credited to individual civil servants. Pensions and indexing supplements are paid from these individual accounts.
The President of the Treasury Board (Mr. Gray) has overall responsibility for the public service superannuation account with detailed administration being provided by the Department of Supply and Services. The Minister of Finance (Mr. Lalonde) is responsible for the financial management of the superannuation account.
The Minister of Finance, through the Department of Insurance, is also responsible for making actuarial evaluations of the account every five years. Since the last available evaluation date is 1977, it would have been reasonable, in my opinion, to expect the Department of Insurance to have conducted

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an evaluation in 1982, as required. If that had been done it would have been made available to us and would have been most useful in this debate on both sides of the House. In my opinion, this is unfortunate, since the results could have been of assistance in our deliberations on Bill C-133. Perhaps the Minister of Finance could indicate to the House if the 1982 evaluation has been done and, if so, when it will be made available to Members so that we may have it before us in committee.
I now wish to tell the House of my main concerns about this ill-conceived piece of legislation. First, I am concerned that the Government has been the recipient of some bad advice about this Bill. Its advisers apparently could not see any real difference between imposing a ceiling on salary increases, as we did in the spring, and imposing a ceiling on pension benefits which are already paid for. In other words, a ceiling on salary or earnings increases in the future and the imposition of a ceiling on pension benefits that are already paid for. I suggest that there is a difference.
As a result, if the Government proceeds with this Bill in its present form, it may be open to charges that it is trying to redirect pension contributions and the accrued interest without the permission of the other parties, namely the pensioners and the present employees. This may be an approach which is so legally questionable that it should be tested in the courts. Even if it is found to be legal in the narrowest sense, it would be completely unethical, in my opinion.
Should the Government persist in its present course, 1 believe it will do considerable harm to its credibility, not only in the eyes of its employees but in the eyes of many other Canadians as well. Since 1970, Ministers of the Crown and the Prime Minister have stated their strong support for the principle of full indexation of Public Service pensions.
The Prime Minister himself, at the National Pensions Conference in 1981, put the case for indexation when he said in his opening remarks in the report of which I read another section in French a few moments ago:
The unfairness of that situation, particularly when the savings pool to which they have contributed may have been reaping inflationary interest premiums, is not tolerable in a nation which believes in social justice-
Suddenly, Canadians are being told that this principle should be ditched, but only temporarily. In my opinion, this represents a rather disturbing view of the nature and importance of a principle.
I have heard it suggested that public opinion would be generally supportive of any move to restrain the pensions of those "fat cat" public servants. According to the very reliable Government sources from whom I have received these statistics, 70 per cent of those pensioners, those same "fat cat" public servants, receive less than $8,100 annually. The Public Service Alliance of Canada estimates, as indicated in their recent brief, that the annual pension of the average retiree to be $6,900 as of November, 1982. To attempt to portray such a group as "fat cats" is, to put it mildly, somewhat dishonest. In my opinion, far more Canadians would recognize this proposed action for what it really would be, namely, a breach of trust on the part of a previously trustworthy employer. I would be
surprised if most Canadians will look favourably on such an action.
In the light of this credibility problem, we would also be asked to believe that the measures would be of a temporary nature. No doubt at this point in time, the Ministers involved, and probably most of their advisers, honestly intend that the measures would last but for two years.
However, as anyone in the House knows, experience with the Ottawa scene tells us that temporary measures can become remarkably durable. For instance, consider the Halifax Relief Commission which was established as a result of the explosion in Halifax in 1917. The Government was finally able, with some difficulty, to phase it out in the mid-1970s as part of an austerity program.
Many of us in Ottawa remember the notorious temporary buildings which were erected in the early 1940s. They finally came down some 35 years later under the demolition program of the federal Government's public works in Canada.
If these temporary measures are adopted, the same old pressure groups will re-emerge and begin beating the drums once again to do something about indexation per se, preferably by eliminating it. 1 suggest that the President of the Treasury Board look back at the amount of time and effort the Government has had to spend since 1970 in defending the principle of full indexation. I am assuming, of course, that the Government still wishes to defend the principle. Perhaps the President of the Treasury Board could indicate to the House the credible safeguards he would adopt to ensure that the measures are indeed temporary. Otherwise, despite all their good intentions today, Ministers two years hence will find themselves once more being accused of breaking their word to their employees.
I do not want to hold it against one Minister, because we all know they come and go. In the last five years, we have had five Presidents of the Treasury Board. There has been Mr. Buchanan, Mr. Andras, Mr. Stevens, Mr. Johnston, and the present Minister. I fail to see how we can have continuity in such an important dossier as indexing, and that is possibly one of the reasons we are having some difficulties with this subject every so often.
As I understand it, advisors to the various Presidents of the Treasury Board had indicated to Ministers that capping pension indexation for the next two years, 1983-84, would save the Government about $180 million. That was prior to the amendment tabled yesterday. I suppose that a cynic could say this gives us some indication of the price they would place on a principle. However, 1 do not believe that this is the whole story. Presumably after two years of restraint, pensions would be lower than if full indexation had remained in effect.
As I see it, this could be seen as a savings of sorts to the Government. Could the Minister of Finance indicate to the House the approximate annual savings the Government would expect to achieve as a result of this Bill from 1985 onward? What would the Government propose to do with these savings? Further, could the Minister also indicate to the House the
December 7, 1982

anticipated magnitude of lost revenues as a result of the reduced spending power of pensioners brought on by Bill C-133? Is it possible that the two-year savings to the Government might be less than $180 million? In the House yesterday, the Minister gave notice of his intention to amend Bill C-133 and thus reduce anticipated savings to $165 million, over two years.
According to available information, as of November, 1982 there were about 122,500 persons, contributors and survivors, receiving pension benefits. The average annual benefits paid out were, as I indicated earlier, about $6,900 per individual. I must say I have a great deal of difficulty in believing that reducing the growth in their incomes could have any real effect on the outcome of the Government's battle with inflation and unemployment. Put another way, I for one would find it distasteful to ask anyone at such an income level to give up any part of income to which they are entitled. More and more I am driven to the conclusion that Bill C-133 might be intended more for cosmetic or other purposes than to make a real contribution to our economic recovery.
The proposed savings, as I understand it, are forecasted to be about $60 million in 1983 and about $105 million in 1984. Unless the Government intends to spend these savings before they have been achieved, I fail to see how they could make any significant immediate contribution to job creation, particularly since the Minister of Finance has told us he expects recovery to be well under way in 1983.
It has been argued many times by some outsiders in the past that the Government's total contribution to the pension plan has been too high and that a period of restraint such as today requires that it be reduced. The facts indicate a somewhat different picture. I refer back to our 1978-79 debates in committee, because that is where I gained most of my information. If we look at PSSA and SRBA revenue sources, including special employer payments made from the CRF pursuant to Section 8(2) of the SRBA, for the period 1966 to 1981 we find that the percentage provided by employee contributions has remained around 20 per cent to 22 per cent; the percentage provided by interest earnings has gone up from 36 per cent to 50 per cent; and the percentage provided by the employer, the Government, has dropped from 42 per cent to 30 per cent. Present trends suggest that the Government is on the way to becoming a minority contributor.
A study done in 1974 by Statistics Canada and the Department of Insurance, which we used during our committee hearings, compared the level of employer contributions by the federal Government and for private sector pension plans with the same basic formula, that is, benefits of 2 per cent of average salary during the last or best years multiplied by the number of years of service. In the federal Government the maximum is 35 years, which would give 70 per cent of one's best six years. The study showed that the Government's contribution percentage was about 13 per cent lower than that of private sector employers.
Treasury Board, in its review "The Basic Facts about Pensions in the Public Service of Canada in 1976", noted that for the same year, 1974, the contributions of public servants
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were about 14 per cent higher than for employees participating in all pension plans with the same basic formula under federal jurisdiction. Unfortunately, there does not appear to be any more current information available. However, I would be greatly surprised if the essential situation had changed markedly.
We appear to have a situation in which the Government contributes considerably less than its private sector counterparts and the employees contribute considerably more than their private sector counterparts. Could the President of the Treasury Board advise the House whether this situation comes about because of gross inefficiencies in the management of the Public Service plan or, as is more likely the cause, because the Government finds this a convenient way to reduce its contributions?
Despite their relatively high levels of contributions, Public Service employees have been satisfied to leave the management of their pensions completely in the hands of the Government. I say "the Government" because 1 make the distinction between the Crown, which can be many things, and the Government, which in this case is the employer; and, in my view, sometimes there is a conflict.
Up to now, these employees have been able to trust the Government to manage the fund in the best interests of present and prospective pensioners. Bill C-133, representing as it does a unilateral changing of the rules, would effectively destroy that trust. If this Bill is passed, it would be reasonable to expect that employees would demand a more active role in the management of their pension fund in order to protect themselves from their employer.
What we are seeing today is the result of a fundamental conflict of interest in the Government's position. In the private sector, a contributory plan under the force of law would have to be administered by a third party in order to protect and to be seen as protecting the integrity of the pension fund. The same rules do not apply here. The Crown, which literally can do anything it wishes, is also the employer, which should be concerned with the interests of its employees. The temptation to use the pension fund and its proceeds for purposes of political gain must, at times, be very strong. The absence of an independent third party makes it almost impossible to provide assurance that such does not happen.
1 am quite sure that retired public servants, like most other Canadians, are prepared to make some contribution to the restoration of the health of our economy. They would ask only that their leaders set a good example and that there be some equity in the contributions sought. For instance, pensioners might have felt somewhat reassured about the seriousness of the Government's intentions if the Government had shown more interest in restraint, or lack of it, on the part of federal agencies. I am thinking of numerous Crown corporations and of the news which is going around the country concerning some of them. There is a growing body of evidence that suggests that increases in federally regulated prices have been major contributors to our problem of inflation. I am sure that

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pensioners would welcome evidence of the same diligence in controlling these prices as in controlling their pensions.
1 am in no position to know whether or not the Government has indeed exhausted every other possible avenue of potential savings and thus has no choice but to tinker with its employees' pension fund. However, 1 do know that the Government has not yet made the case as to why this present course of action, Bill C-133, which if not illegal is certainly immoral in my view, is so crucial to its efforts to stimulate the economy. How does reduced spending power inspire consumer confidence? I do not understand it.
As the President of the Treasury Board knows, the annual rate of indexation for Public Service pensions is established based on changes in the consumer price index for the month of September in the preceding year. If the Government is successful with its six and five program during the coming months, it seems to me that the problem, if there is one, of the level of indexing for 1984 would be taken care of without the need for Bill C-133. On the other hand, some pensioners have expressed the view to me that Bill C-133 represents, among other things, a lack of confidence on the part of the Government about its ability to achieve its six and five targets. Possibly the President of the Treasury Board would like to comment on those points of view.
As 1 have indicated, I continue to be a strong believer in, and supporter of, full indexing of retirement pensions based on employee contributions. Accordingly, I cannot support Bill C-133 in its present form, which I view as nothing more nor less than the sacrifice of a long-held principle by the Government for the sake of what, in the larger scheme of things, would be a relatively small, immediate contribution to creating new jobs. I find it somewhat ironic that a Government which for so long has devoted its time and energy to improving pension arrangements and Old Age Security for all other Canadians, should be so ready and apparently willing to downgrade the quality of protection afforded to its own employees.
Whether or not the Government can afford to continue full indexation for the next two years should not be the issue. Its own public statements on a number of occasions have clearly shown that the Government has not considered its contributions to be excessive. In any case, there exists a mechanism whereby these matters are supposed to be reviewed and, as required, changes to the rates of employee contributions introduced. I think Members of this House would agree that it is indeed most unjust to penalize the recipients of pension benefits merely because the responsible bureaucrats have been unable to advise the Government effectively on the appropriate balance between contributions to, and expenditures from, the two pensions accounts.


Walter David Baker: Right on.


Jean-Robert Gauthier: Although I am strongly opposed to Bill C-133 in its present form, at the same time I am equally strongly supportive of Government efforts to reduce inflation through its six and five program. Obviously, this poses something of a dilemma. Nevertheless, I think an answer can be found.
I would like to take the time of the House to outline one of possibly several solutions whereby the Government's six and five objectives can be met and the principle of full indexation remain protected.
Briefly, what 1 think we should consider is that for the next two years the contributions of the Government would be held at 6.5 per cent and 5.5 per cent. The shortfall, if there is one, could be made up through a temporary increase in the level of employee contributions for the same two-year period. Time has not permitted any of us to develop the detailed calculations, but a preliminary assessment suggests that it might call for an increase in contributions from the present level of 1 per cent to about 1.7 per cent for two years, or to about 1.5 per cent for three years.
For the public servant earning $25,000 a year, this would represent an added contribution of less than $125 to $175 annually, before taxes. I would be the first to agree that this might be construed as in the nature of a special tax on public servants. To this I would say that it could also be seen as a measure of the willingness of public servants to act in order to protect the principle of full indexation.
Assuming the Government can demonstrate the absolute impossibility of maintaining full indexation for the next two years, I still believe that the situation could be better handled. For instance, the inclusion of a "sunset clause" in Bill C-133 would go some distance towards re-establishing the Government's credibility, especially if it were coupled with a provision that, with the demise of this Bill, pension levels and increases would be determined using, after December 31, 1984, today's formula.
A precedent for this type of action was set in the period 1976-1978, when under rules set by the Anti-Inflation Board annual pension increases were capped at $2,400. At the end of that period, pensioners were able to make up what they had lost.
In conclusion, I would like to draw the attention of the House to what is a notable if not historic occasion, namely our present debate on Bill C-133. After all, it is not every day that the Government introduces a piece of legislation which, if passed, would result in all of the parties involved becoming losers. Pensioners would lose a significant part of the indexation to which they are entitled. Eligible federal employees would see the base level of their future pensions reduced, even though their contributions remain unchanged. Finally, the Government would lose the trust of their past and present employees, as well as losing credibility in the eyes of the Canadian public at large.
I fervently hope, in the next stage of our deliberations, that we are successful in finding some equitable way to protect the
December 7, 1982

principle of full indexation, while at the same time aiding in the achievement of the Government's anti-inflationary objectives.
I would like to end this short speech by referring to a rather unusual coincidence of numbers. I said at the beginning that this issue raised a serious question in my mind. Some Hon. Members will recall that Section 133 of the Constitution Act also raised serious concerns, which I had to deal with. The constitutional number was also 133. For those who did not see or did not notice, we opposed vote 133 on the Bill that became the Constitution of this country. Bill C-133, as you can well imagine and appreciate, also gives me great difficulty. So 133 is not my better number!


Mr. Simon de Jong (Regina East):: Mr. Speaker, before proceeding with my remarks I wish to comment on the courageousness of the Member for Ottawa-Vanier (Mr. Gauthier) in the remarks he has delivered to us this afternoon. 1 think Members of all political Parties will agree with me that the difficult stand that he took will be appreciated by all Members in the House.
Like him, it is with a great deal of sadness that 1 also join in the debate on Bill C-133 because this Bill, like Bill C-131, C-132, and Bill C-124 that was debated last spring, constitutes a backward step. They take away from ordinary working people, from mothers and from pensioners, certain basic protections and basic rights.
These basic rights and basic protections were not easily won. It took many years of pressuring reluctant Liberal and Conservative Governments for public servants to be able to bargain collectively for their wages. The protection of pensions from inflation was also a victory which took many years to accomplish. Bill C-124, Bill C-131, Bill C-132 and now this Bill that we are debating today, Bill C-133, are attacks on those hard-earned rights. They are backward steps.
Bill C-133, an Act to amend the Supplementary Retirement Benefits Act, sets out to limit the amount by which the pensions of retired civil servants, military and RCMP personnel will be increased over the next two years. For example, next year the pensions will only increase by 6 per cent rather than the 11.5 per cent called for under the present pension formula. It is estimated that over $100 million will be taken from the pensioners in 1983 and 1984.
1 know that Government speakers have contested the figures as to how much mothers, pensioners and workers will lose under the six and five program. The truth is that no one can accurately state how much these people will lose; it all depends upon the inflation rate for 1983 or 1984. Who knows what that is to be? The Government has consistently been wrong in its economic forecasts during the last three budgets. We are living in a period of economic anarchy. For the Government to claim that it is able to forecast the inflation rate for the next two years is, to put it mildly, dishonest.
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The essential point with this Bill, however, is that it reduces the protection retired public servants now enjoy. It will make them more vulnerable to the economic shifts and changes of our times. What makes Bill C-133 even more repugnant is that the protection it takes away was protection that public servants paid for.
Public servants contribute 6.5 per cent of their wages for pension purposes, plus an extra 1 per cent to the supplementary retirement benefits account, an account to pay for indexing and to protect the purchasing power of their pensions. Bill C-133 is robbery. It breaks agreements, it is a double-cross and it is unforgivable.
The Government justifies removing this protection under the guise of fighting inflation. It claims that 120,000 or more retired public servants who receive an average $6,900 per year, a little over $500 a month, must reduce their standard of living in order to wrestle inflation to the ground. How cynical the Government is to claim that, in order to fight inflation, the people who have the most to lose from inflation must give up what little protection they have against it. This is a cynical Government indeed.
Does the Government really believe that the money it will save by reducing the indexing of pensions and mothers' allowances will bring inflation down by a fraction of a point? Does it really believe that restricting Public Service wages will make a dint in the inflation rate? I doubt that even one Liberal Member seriously believes that.
The Government needed someone to blame for the economic mess we have today, so it commissioned Mr. Goldfarb to do a study. I imagine Mr. Goldfarb told them that as far as the public was concerned, an attack on public servants and their pensions would be acceptable, that it would create the image that the Government was doing something about inflation. I am certain that Government Members do not seriously believe that inflation will be stopped by the actions of Bills C-131, 132, 133 and 124.
The Government has elected workers, mothers and pensioners to share the blame for inflation. The burden of pain in the fight against inflation is being laid on those who are the least to blame. What is happening is that the victims are being blamed.
The Conservatives have gone along with this. Despite the protestations of Members like the Hon. Member for Bow River (Mr. Taylor), they supported Bill C-124 earlier. That clearly indicates that they have bought the basic Government argument that Canadian workers are to blame for inflation. According to a report in The Globe and Mail of November 22, 1982, a survey of world labour costs by the Citibank of New York stated as follows:
In addition, the commonly expressed view that wage demands by Canadian workers are inordinately high is more myth than reality, the study finds.
It shows that Canadian industry on the whole is competitive and that, for the past decade, the work force has been a model of restraint. With the single exception of the United States, there is no industrial economy where wage rises have been less or where the growth in hourly manufacturing costs has been lower.

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This is from the Citibank of New York, but yet the Conservatives have gone along with the Liberals in perpetuating the myth that the reason we are in an economic mess is that Canadian workers are getting too much. That is why the Conservatives went along with the Liberals in support of Bill C-124 which blamed the workers for inflation.
Despite Conservative objections to Bill C-133, the record shows how the Conservatives went along with the six and five program last spring. They go along with the Liberals in blaming working Canadians. The Conservatives are now opposed to Bill C-133. I say good. However, is there any reason to believe that if they were in power today they would not cut pension benefits?
Do not the Conservatives also believe in restricting public spending? Do they not give lip service to Reaganomics? Do they not believe, like the Liberals, that only the private sector can get our economy back on track and that corporate taxes should be reduced in order to create a good climate for business?
Let us see how well the corporations have been looked after in the last three decades. In 1950 federal and provincial Governments collected about the same amount in taxes from corporations as from individual Candians. Let us look at what has happened since then. In 1950, there was a rough equality between corporate and private individual taxes being paid to governments. By 1960, individuals accounted for 58.6 per cent of total Government revenues whereas the corporate sector contributed only 41.3 per cent. By 1970, 71.3 per cent of Government income came from individuals whereas only 28.6 per cent came from corporation taxes. In 1980, individual taxes contributed 76.6 per cent to the public purse whereas the corporate sector was down to 23.3 per cent.
The major shift from the corporate to the individual occurred during the seventies and eighties. I am somewhat amused when the Conservatives charge the Prime Minister (Mr. Trudeau) with being a socialist. Some socialism when corporate contributions to the public purse during the last two decades dropped from 41.3 per cent to 23.3 per cent whereas individual income taxes increased from 58.6 per cent to 76.6 per cent!
Another area of agreement is that the Conservatives, like the Liberals, say that we must reduce the Government deficit. 1 agree, but I disagree with them as to how we should reduce it. Let us talk about deferred income taxes, which never really shows up on the books as a tax expenditure. These are the tax loopholes that are provided. In 1979, total deferred taxes amounted to some $30 billion, almost the same as the deficit that we are running this year. Again, these are taxes that never show up on the books. It is true that the amount of money we collect from taxes is not enough to pay for all the social programs we want, but that is not because we spend too much money on these programs. It is because we spend too much money on loopholes.
Our tax expenditures are too high. For example, between 1976 and 1979, the federal Government's restraint program
managed to limit direct spending increases to some 30 per cent. The cost of tax expenditures, however, went up 42 per cent. The Government made a great public show of trying to save, all the while quietly giving away more and more to the rich and powerful. That is why in 1978 there were 2,316 individuals in Canada who had assessed incomes of more than
50,000	but paid not one penny of income tax. Seven hundred and forty of those individuals made over $100,000 and 96 of them had incomes of over $200,000 or more, and they did not pay one cent of income tax. That, Mr. Speaker, is how we can start reducing our deficit.
The Conservatives, together with the Liberals, basically agree that it is the Canadian workers who are to blame for inflation, and that it is the expenditures of the Government on social programs that are to be blamed for our deficit and for inflation. I suggest the Canadian public is being hoodwinked. We are being hoodwinked into accepting the blame and, therefore, they are preparing us to accept the pain. It is not our social programs which are to blame for Government deficits and inflation, and it is not the workers' incomes which are to be blamed for inflation. It is the amount of profits which have increased over the last decade or so. That is the major contributor to the inflation spiral which we find ourselves in.
The increase in the prices of oil in 1973, a major money grab by the oil industry and by oil-producing countries, set off a series of actions where by everyone got into the act and made major money grabs. The profit increases in the 1970s were obscene. That is the major reason we ended up in the inflation spiral. Yet are they asked to share any of the blame or any of the pain of the six and five program? Has anyone asked industry or the corporate sector to restrict their price increase to six and five, to restrict their profit increases for next year and the year after to six and five? No, Mr. Speaker; the people who are really to blame for the inflation spiral are the ones who are not being asked to share the pain. In this, both the Liberals and the Conservatives must share the responsibility of trying to hoodwink the Canadian public.
The distribution or redistribution of income in this country has never been fair, even in good times. In these bad times, those at the bottom of the income level are being asked to make the greatest contribution in fighting inflation. For example, in 1965 the top 20 per cent of income earners in Canada took home 41.4 per cent of all the money which was earned while the bottom 20 per cent got a bare 4.4 per cent for their efforts. By 1980 things had gotten more lop-sided. The top 20 per cent pocketed 42.5 per cent of all the money earned and the bottom 20 per cent had dropped to 4.1 per cent. The rich do get richer and the poor do get poorer, Mr. Speaker.
The six and five program which this Government has introduced and which was supported by the Conservatives this spring is a further reduction of the incomes of average Canadians. 1 suggest that when the figures are compiled in terms of income redistribution for 1982, 1983 and 1984, it will even be more lop-sided than the figures I have quoted today.
I have received correspondence, from my constituents, as other Members have from theirs, concerning Bill C-133. I would like to put some of this communication on the record.
December 7, 1982

For example, I have a copy of a letter which was sent to me. The original letter was sent to the President of the Treasury Board (Mr. Gray) on November 2, 1982. It states as follows:
I have just received from the Prov. Rentalsman, notification that my rent is being increased by 13 per cent. The cost of rent, utilities, clothing, food, are all allowed to increase substantially. Why then is the federal Government restricting the indexing of our superannuations by a 6 per cent margin? It would appear that those of us who formerly worked for the federal Government are being forced to carry more than our share in an effort to restore a neglected economy.
1 would be interested in knowing why the superannuation fund now being used by your Government as a lucrative source of revenue, in that the actual interest earned by this fund is not credited to the fund. You, as our former employers, guaranteed complete indexing, provided that the current employees contributed an additional 1 per cent of their wages to keep the fund viable.
Surely such a positive guarantee should be honoured. How can the Hon. Pierre Trudeau expect us to trust each other when he allows the above situation to become law?
An excellent question, Mr. Speaker. We sent a copy of this letter to the Prime Minister and I am very anxious to hear how the Prime Minister answers it. How can he expect us to trust each other when he allows the above situation to be come law?
I talked about the cynicism of this Government in introducing Bill C-133. They know it will not reduce inflation. They know it goes against everything which they have paid lip service to in the past-social justice, social equality, indexing of pensions, protecting the poor, the old and the weak. They do it, Mr. Speaker, because they feel they are in political difficulty. They believe that the Canadian public will accept this as some measure of action by the Government to control the economic situation, to bring inflation to the ground. It is all appearance. It is show and tell. It is mirrors and fog, because it will not bring inflation to the ground.
It is so sad that the cynical Government is using the aged, mothers, clerks and other civil servants, people who earn money that is barely enough to pay the rent and the utilities. The Government is using these people in order to project an image of itself as a Government with a definite economic recovery program.
The cynicism of this Government has hit a new low. A number is being done on the Canadian public. We see business pointing the finger at Government for over-spending to satisfy the whims of a pampered public. The Government says that business must share the blame for caving in to exorbitant wage demands. Both are agreed that it is the plain people with their unrealistic expectations who have the most to do with bringing us to where we are today. Both agree on laying the blame for the economic mess we are in on the victims, on the ordinary working Canadians. But ordinary working Canadians do not cause economic disasters; they are the victims. Today they are being victimized by the very people who really are to blame for the economic mess we are all in-the rich and the powerful.
I will join with other Members of the NDP caucus to oppose this legislation, as we opposed Bills C-131, C-132 and C-124. We will argue that other measures must be taken to end the economic anarchy which Canada finds itself in. We will argue that restricting wages and pension benefits will not lead to
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economic recovery, but rather that the whole Reagan economic theory will only make matters worse. Reaganomics will reduce the spending power of ordinary Canadians, which in turn will reduce economic activities, which in turn will only lead to greater unemployment. The New Democrats will try to present to the Government and to the Canadian public some semblance of sanity. We will argue that it is not the average Canadian that is to be blamed for the economic mess we are in, and we will encourage them to take political action to punish those who are in fact to blame.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Blaker):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The Hon. Member for Yorkton-Melville (Mr. Nystrom)- Trade-United States subsidization of wheat exports; the Hon. Member for Fundy-Royal (Mr. Corbett)-Shipbuilding- Meeting with industry representatives in New Brunswick; the Hon. Member for Bow River (Mr. Taylor)-National Parks- Banff land exchange-Request that housing permit be cancelled. (b) Request for Minister's resignation.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Gray that Bill C-133, an Act to amend the Supplementary Retirement Benefits Act (No. 2), be read the second time and referred to the Standing Committee on Miscellaneous Estimates: and the amendment thereto of Mr. Baker (Nepean-Carleton) (p, 21305).
Mr. John Evans (Ottawa Centre):: Mr. Speaker, I have indicated on a number of occasions, as have my colleagues from the Ottawa area and others, that we had difficulty with Bill C-133, that to us the Bill was unacceptable in its form when it was introduced.
I want to start out by repeating my over-all strong support for the six and five program, a support which has been in place since day one. Indeed, I recommended to the Minister a concept along the lines of general restraint to bring the public

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sector in line with the private sector. 1 admit that, and quite frankly I think it was the proper thing to do. Indeed, if we look at the reality in the private sector today, the just released Conference Board study indicates wages and salaries from the senior executive level right down to the clerical level will probably come in in the range of 5 per cent to 6 per cent next year.
My support for the six and five program was based on a firm belief that the Government must constrain the outflow of taxpayers' dollars, and all of my constituents are taxpayers. The restraint of government expenditure is terribly important for a large number of reasons. First of all, there is the federal deficit. All of us in this House, including the New Democratic Party, are terribly concerned by the size of the deficit and we are afraid that it will constrain economic recovery. We must bring it under control over time because we must reduce the present and future burden on Canadian taxpayers. The Government has said this, the opposition parties have said this, and the six and five program, I think, is consistent with the need to reduce the expenditure of taxpayers' dollars.
Second, we must free up funds to help those in greatest need. We have 12.7 per cent unemployed, and youth unemployment is running up to 25 per cent. We are talking about the pension field, but there can be no question that the youth unemployment problem is probably the most critical part of our unemployment problem because who indeed is going to pay the pensions of the future if the youth of our time do not have employment opportunities?
Third, Mr. Speaker, we must reduce the tax burden on firms which are in financial difficulty and close to bankruptcy. Funds for housing must be freed up. So in addition to the need to reduce the deficit, there is a need to free up funds without increasing the deficit so that they can be used in other areas of extremely high priority.
Then we must constrain pressures on the capital markets. If we hold down taxes by simply borrowing money, we will put upward pressure on interest rates. We know what that does to people with mortgages to renew; we know what it does to consumer and investor confidence. If we do not restrain, the economy will simply not get back on the track to economic growth.
Fourth, Mr. Speaker, we must break the inflationary psychology. Certainly that is a terribly important thing and the six and five program has contributed to that goal.
Finally, Mr. Speaker, we have to spread the burden of this recession through our society as broadly as we can. We certainly cannot expect those in one sector or another, whether they be construction workers or woodworkers, unemployed miners in Sudbury or others, to carry the entire burden of the recession while the rest of us continue to increase our demands on the system.
For all those reasons, Mr. Speaker, I think the six and five program is a major step in accomplishing these objectives, and for those reasons I continue to be a strong supporter of the program. However, I think there is a distinction which must be
made. Six and five should not be seen as a program of restraining incomes. It should rather be seen as restraining the expenditure of taxpayer dollars, and there is a fundamental difference between those two notions which is terribly important to the argument I wish to develop.
1 think all of us in this House, in the Senate, in the Public Service generally, federal or provincial, have to understand that we are employees of the people. We are paid from the taxpayers' purse. Any time we take increases in salary, justified or unjustified, it is an additional burden on the taxpayer. I am not saying that wage and salary increases in the public sector are not justified. What I am saying is that there has to be a fundamental realization that, when we do ask for more, it means that others in our society-including the taxpayer, which includes public servants-have to have less. When the taxpayer is suffering, it seems to me only fair and equitable to ask that those of us who are employed by the taxpayer have to share some of that burden.
So 1 have no problem defending or standing up for the six and five program as it applies to wages and salaries. As I indicated earlier, that sharing of restraint is taking place in the private sector, as the Conference Board study clearly indicates.
Now, Mr. Speaker, a second aspect of the six and five program is as it applies to transfer programs, direct transfers of taxpayers' dollars to members of our society where no contribution whatsoever is involved. I include in that category, for example, Old Age Security and the Family Allowances. These are pure transfer programs from the taxpayers' purse; they are not contributory programs.
I support and will vote and have voted in favour of restraint to six and five on these transfer programs where no contributions were made, but I make an exception, and indeed the Government made an exception. That exception is that we have to make sure that we maintain the incomes of those who are in greatest need. That is precisely why the Child Tax Credit and the Guaranteed Income Supplement were not touched. They are fully indexed because they are transfers to people in greatest need in our society. The Government said transfers generally, yes; but transfers to those in greatest need, no, the restraint program will not apply to those. A distinction was made with regard to which transfers would be restrained and which would not be restrained.
The final category is one which brings me to Bill C-133, and that is restraint as it is applied to contributory programs. 1 draw to the attention of Hon. Members that the Canada Pension Plan was not restrained. There are several reasons for that. One is that the people contributed to that Plan and the payments being made out of that Plan now are a return of contributions. Some time in the future we may have to increase the contributions to make sure that the Plan remains viable, but it is a contributory Plan and for that reason, among others, it was not subjected to the six and five program; nor should it have been.
There is another plan and that is superannuation. The difficulty that many of us had with Bill C-133 when it was
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introduced was that it did not recognize that superannuation and the indexation of superannuation were both contributory plans. It treated superannuation as a pure transfer program; it treated superannuation as though it were OAS or as though it were Family Allowance, both of which are pure transfers. That is the source of the difficulty that I have had.
Just the other day the Hon. Member for Nepean-Carleton (Mr. Baker) made some comments on this subject. I want to indicate that this has been the position I have taken all along and I come back to a speech I delivered in the House on July 8, 1982. At that time, as reported at page 19156 of Hansard, I said:
There is another aspect of the program, and that is deindexation. I support certain elements of that deindexation as well, but there is one element of deindexation about which I have serious questions. 1 intend to pursue those questions. I know you intend to pursue them as well, Mr. Speaker.
The Hon. Member for Ottawa West (Mr. Francis) was in the chair at the time. 1 continued:
-The element to which I refer is the element of deindexation of public service superannuation. The reason I have questions about that is that contractual payments are made to individuals who made contributions during their working lives to fund indexation. If it could be shown that the fund which has been built up by public servants to fund the indexation of their pensions is inadequate or insufficient, then I could see justification for saying. "Yes, restraint". I have not seen that evidence. I have not seen anyone put forward evidence or indicate to me that there is evidence which indicates that the funding of that indexation program is inadequate. I will have to see that evidence before I can support this particular element of the deindexation program. If public servants in our ridings, Mr. Speaker, and all across the country made contributions to that fund which are adequate to cover the indexation of their superannuation payments, then I do not think that should be part of the restraint program.
I do support the over-all restraint program, but I put forward the caveat that 1 do intend to pursue that one element of the program.
Indeed, Mr. Speaker, that is precisely what I have been doing. More recently, at the RA Centre, several of us met with a group of senior citizens and retired public servants. At that meeting I came out at the beginning and indicated my full and unequivocal support for the principles of the six and five program and for the vast majority of the six and five program itself.
Second, I stated at that time that Bill C-133 was not acceptable in the form it then was. I also stated that it was unfair in that it failed to recognize that public servants had made contributions, that it treated superannuation the same as a pure transfer program such as those 1 have mentioned, Old Age Security and Family Allowance. I committed myself to fight to have the Bill altered.
Bill C-133 was designed with the apparent intent to limit the increase in the income of pensioners, not to limit the expenditure of taxpayers' dollars. By its very formation, it was aimed at saying pensioners' increases shall not increase by more than six and five. At the same time, of course, that would mean that the transfer from the taxpayers' purse would not increase by more than six and five and would probably increase by less than six and five.
What has happened is that when the Minister introduced the Bill for second reading yesterday, he made a fundamental shift in philosophy. That shift in philosophy recognizes that contributions were made and that increases in pensions should reflect the effects of those contributions over and above the
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part contributed by the taxpayer. The Bill has been fundamentally changed. It is now designed to restrain the expenditures of taxpayers to six and five and not to restrain the increases in pensions to six and five. The whole target of the legislation has been shifted.
The numbers are not the important aspect at this point. What we have seen is a fundamental establishment of principles. It is not important that it is 6.5 and 5.5. The fundamental principle established in this Bill-and I am not sure whether the Department realizes this-is that it is the transfer from the taxpayer that is going to be restrained to six and five and not the increase, necessarily, in Public Service pensions.
That is a fundamental change and, as I said, it is not clear to me that all people realize that, including those who made the recommendation to the Minister. Whether the Department realizes it or not, it has now opened up a number of options for consideration by the committee of which the Hon. Member for Ottawa-Vanier (Mr. Gauthier) is Chairman.
First of all, if the increase in pensions is not the issue but rather the contribution from taxpayers' revenue, and if the fund contributed by public servants is inadequate to pay full indexation, then the rate of contribution should be increased until it is adequate to give full indexation. This is not an unusual thing; it has been done before.
Until 1977, public servants contributed one half of 1 per cent to the supplementary retirement benefits account to fund pensions. In 1977 that was changed and since then contributions have been at the rate of 1 per cent of salary. The Government should have no objection, I contend, to full indexation provided that the portion above six and five is paid for by public servants and not by the taxpayer.
Second, the Minister states that only 10 per cent of the cost of full indexation has been paid for by contributions from public servants. I suggest that this is not fully accurate. Specifically, the figure of 10 per cent relates only to the contributions and the earnings on those contributions that have been made to the supplementary retirement benefits account by those people now receiving a pension, and only by those who are now retired. It does not include contributions and the earnings on contributions which have been made by those public servants who are now employed in the Public Service. Since indexation was implemented for all retired public servants in 1971, even for those who never contributed anything to the supplementary retirement benefits account, it is obvious that the contributions of those now retired would be inadequate to fund their own indexation.
Third, the officials have contended that each public servant has a separate account into which his or her contributions are paid, both in the main fund and in the supplementary retirement benefits account. It is in that person's name. If this is so, then recent retirees have adequate amounts in their accounts to fund the indexation for this year, but early retirees prior to

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1971 or in the early 1970s who have been receiving indexation at accelerating rates over the last years do not have any balance in their accounts.
If these accounts are indeed individual and in the name of the employee or the retired person-and this is the reason given for not being able to shift funds from the contributions of those now working to those who have been retired to supplement the amount of money available to pay full indexation- then how can the funds be shifted between the accounts of retired public servants in order to give all retired public servants an equal amount of one-half of 1 per cent of their pension? If these accounts are indeed inviolable, how can they be inviolable when it comes to shifting money from working contributors to pensioners but not inviolable regarding shifts from one pensioner to another? That is a fundamental point. Either shifting can occur or it cannot occur. We will probe this matter in committee.
If funds can be shifted, what about the earnings on the main superannuation fund? Why can these funds not be shifted to fund higher indexation? The Hon. Member for Ottawa-Vanier indicated some points earlier. It is important that it be on the record what is the nature of the $15 billion or $17 billion fund. Also it is important to know why the employer, rightly so, reduces its contribution by the amount of excess earnings over and above the rate assumed actuarially.
The nature of pension plans, private or public, is such that one assumes there will be no increase in salary over the life of the pension plan or one assumes some actuarial rate of increase and then an actuarial rate of interest, usually one or two percentage points higher than that. Since the pensions are based upon the average of the last six years of earnings, and if incomes are going up and the pensions are based upon only the last six years but contributions have been made on the basis of early earnings, obviously with rising incomes there is what is called an actuarial deficit. The Public Service Pension Plan and private pension plans are set up so that employers have the right to use excess earnings over and above the actuarial rate of return to pay the actuarial deficit in order to fund fully the pensions.
That is fine, but one can get to the point where the rate of return on the assets so far exceeds the assumed actuarial rate of return that in fact the fund runs a surplus. I would contend-and 1 have been so informed by actuaries who do not have an axe to grind in this particular case-that while the main superannuation fund does not now run a surplus in a full actuarial sense, it is very rapidly coming to the point where it will run a surplus as a result of the very high rates of return which the fund has been able to earn in recent years.
Since the superannuation program includes an agreement indicating that the Government's contribution shall never be lower than the contributions of employees-the employer's shall not be lower than the employee's-it will mean that as soon as the employer's contribution has been reduced as far as it can, the excess earnings will simply create a surplus in the main superannuation fund. It seems to me at that point in time-and that is why an acturial assessment has to be donethose funds should be available to be used to fund other forms of retirement benefits, for example indexation.
Another point raised by officials was that this year the cost of indexation for people now retired would be somewhere in the range of $470 million, that is somewhat misleading as well, because it is the total cost of the cumulative indexation over the years which would be paid this year, as opposed to what would have been the case had there been no indexation at all. The really important figure is, how much in addition it will cost this year over what it cost last year? That figure is $139 million. This is the marginal increase in the cost of indexation this year.
Right now the increased contribution or the contribution of public servants who are working this year will be in the range of $ 180 million, so the contributions of working public servants this year will exceed the increase in the cost of indexation this year by some $41 million or thereabouts.
The point of all this is that we are now at the point where indeed six and five is working and inflation is coming down. If we take the last four months, for example, the annual rate of inflation has been running at around 6.5 per cent to 7 per cent; this is for the last four months, annualized. So it is coming down; we are beating inflation. That implies this year's indexation figure will probably be the highest that it will be for the next few years and hopefully for a good many years. If that is the case, if current contributions by working public servants are $180 million this year and the cost of indexing at 11.5 per cent is $139 million this year, and if indexing will be less next year but contributions of public servants will be more than $180 million next year because their salaries are going up and they pay 1 per cent, it seems to me that if it were possible to transfer funds from the accounts of working public servants to those of retired public servants, we could cover that amount this year. Also it seems to me that their accounts would continue to grow in the future as the amount of indexation went down but the amount of contribution by existing public servants went up. This is another point we will want to pursue in committee.
As I said, I opposed the Bill at the outset as tabled because it did not recognize the contributory nature of the plan. It now recognizes this and I can accept it in principle. It limits Government contributions to six and five. In other words, it is contended that it limits, as the numbers now stand, the Government's contribution from taxpayers' revenue to no more than six and five, and I agree with that principle.
Also as a result of the change brought it by the President of the Treasury Board (Mr. Gray), it recognizes that amounts reflecting contributions must be considered over and above six and five. I accept that principle. I do not necessarily agree that
6.5	and 5.5 are correct numbers to use, and I will pursue that matter vigorously in committee, as I am sure all my colleagues will. However, once these dual principles are recognized-the principle that six and five should be maintained as it applies to the amount that is taxpayer-financed, and the principle that contributory amounts should be considered over and above
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that amount-then the question of further increases based on additional contributions, as was suggested by my colleague, the Hon. Member for Ottawa-Vanier, must also be recognized.
The Government entered into an agreement with the Public Service, whether implicit or explicit, to provide indexed pensions. The Government reserved the right to alter contribution rates, and it has done so in the past. Indeed, it has altered the rate of indexation, as the Hon. Member for Ottawa-Vanier indicated. In the period during the AIB, there was a maximum transfer of $2,400, a maximum increase in pensions of $2,400, established, that established the principle of a cap on indexation, whether or not it was binding.
Further, the Government has established the right to alter the fundamental nature of the program. I would refer Hon. Members to Bill C-12, which was introduced in 1978. It received second reading, in other words, agreement in principle, by the Members of this House and provided that the Government could cap indexation, because that was precisely what the Bill accomplished. It said that there would be full indexation up to a certain figure, which I believe was $12,000, and that there would be reduced indexation beyond that level. This received approval at second reading and, when it returned to the House for report stage, it came back with the unanimous agreement of all Members of the Standing Committee on Miscellaneous Estimates. Therefore, there are grounds for doing what is being done. There are grounds for limiting.
However, while I contend that the Government has the right to alter, it also has the moral obligation to employ all avenues to meet its commitment to pensioners. I therefore feel that all avenues mentioned by myself and by my colleague, the Hon. Member for Ottawa-Vanier, must be considered to meet the two objectives I have outlined above. First, it would restrict the expenditure of taxpayers' dollars to no more than six and five; and, second, it would meet its moral obligation to provide indexed pensions to retired public servants based upon their contributions.
The change announced by the Minister in Bill C-133 would make both these objectives possible. The old Bill restricted pension income while the new Bill would restrict the outflow of taxpayers' dollars, recognizing increases in pensions funded by contributions as being outside the six and five program. With these two principles intact, I can support the Bill at second reading. I accept its principles, and I have indicated that I will continue to work in committee with my colleagues to see that all avenues are rigourously explored so as to meet our moral obligation to provide indexed pensions within the principles of the Bill.


Mr. Jack Shields (Athabasca):: Mr. Speaker, it is a privilege to take part in the debate today on Bill C-133. However, I would like to preface my remarks by complimenting most sincerely the Hon. Member for Ottawa-Vanier (Mr. Gauthier), who gave a very considered, well-researched, well-thought-out dissertation to the House today outlining some of the problems faced by the constituents of his riding.
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1 would also like to comment on the remarks of the Hon. Member for Ottawa Centre (Mr. Evans). I am not really sure whether he has swallowed himself whole, whether he has gone halfway or whether we must wait for another time to see what the outcome will be. He indeed said a number of things. In relation to the principle of six and five, he felt that expenditures of Government funds should be restricted and that those funds should be freed up to help those in need, such as youth, industry and so on. He also discussed how we would break up those funds to fight inflation and get people back to work, helping industry. He said the aim was not to restrain income but, rather, to restrain public spending. I wonder if the Hon. Member had taken the restraining of public expenditures into consideration. For instance, has he considered the $70 million to $100 million spent on advertising by the Government?
Has the Government considered the tens of millions of dollars which have been spent to promote the six and five program? Has it considered the cost of publishing binders containing the interim report on the progress of the six and five program, such as the one which was dropped off at my office and those dropped off at every Hon. Member's office, having been sent clear across the country? That probably cost somewhere between $100 and $200 per copy to produce. What earthly good was that? It was a flim-flam attempt to tell people across the country that something is working in the six and five program.
Indeed, I hope to see inflation come down because it underlies simply everything which happens in our country. We all know that and we all agree that we must fight it. However, to fight inflation, does one break the trust of one's employees, the civil servants?
The basic principle of the Public Service pension is being suspended. It was agreed that people who work for the Public Service and for the RCMP would contribute to their pension funds and people who went into the Armed Forces would contribute to theirs. It was agreed that when they retired they would receive their pension, which would be indexed so that their purchasing power would not be eroded. It is very simple and progressive.
I spent ten years in the Armed Forces and contributed to a pension fund. 1 constantly knew what I would receive as my retirement benefit when 1 retired from the Armed Forces if I spent the required number of years in the forces.
Part of the enticement to a career in the civil service is a pension. That plays a part, as does security of tenure, working conditions and amount of pay. As well, I knew that if I contributed to a pension, when I retired after faithful service I would receive the kind of income on which I could live for the rest of my life. People simply do not work 25 to 35 years for one employer, contributing to a pension plan, and then say at the end of that time: "Gee whiz, we get a pension". That is part of the over-all family planning, the retirement planning. Each one of us goes through this. I have seen Members of this House sit down in the dining room and discuss, if they retire or are forced to retire after the next election, what indeed their pension will be.

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They know that it is indexed; they talk about the purchasing power. It is trust. The Government hires civil servants for the Public Service. They go into the diplomatic core, the Armed Forces, or the RCMP. All these people trust their employer to do what he said he was going to do when they retire. There is no other issue at stake here, none whatsoever, except trust.
We teach trust, and trust is inherent in our society right across Canada. That trust is implicit in our teaching of children in school, or when you take them to the bank. You say you can trust this institution, you can put your money in the bank and when you want those funds you can write a cheque and withdraw those funds. The trust is there in the Bank Act, that if they say they are going to pay an interest rate on your account, it will be paid.
Our whole society is built on trust of the very basic things. If you go into the rural communities of Canada today you will find that people trust their neighbours not to infringe on their property, they leave their doors open in the rural communities. The trust is implicit-all that we have at stake here today.
When an individual first joins the Armed Forces, for example, or the RCMP, he immediately starts looking for a career. Perhaps he does not look at the retirement benefits until he is married and has children and is looking to secure his position when he does retire. But at certain points along the way when he is offered a job outside of the Armed Forces, the RCMP or the Public Service, that becomes a very, very strong inducement for him to remain; and all we do is break the trust.
It is sad to say, but I see this trust being broken continually in other areas, and I am sure that Hon. Members on the Government side do not want to go down in history as part of a Government that introduced mistrust into our whole system. That clearly is what is happening, in my view.
Where was the trust, for example, when the national energy policy was brought forward, and when they reneged on agreements with foreign companies, and with Canadian companies, who indeed were told that there is a certain tax regime set-up, and if they will invest their moneys, private moneys, to develop a certain industry, this is the kind of return, this is the kind of thing that will happen. The national energy policy actually came in with a back-in provision that allowed them to confiscate properties. I implore Hon. Members not to allow this mistrust to arise among the employees in the Public Service, the Armed Forces and the RCMP. It is wrong; it is dead wrong. I think all Hon. Members, if they will reflect for a moment, will realize that.
We heard the Hon. Member for Ottawa Centre say that we had to tighten the public purse, quit wasting money, quit spending money that we do not have. We cannot increase the deficit because if we do we are going to increase inflation because there will be a call on the money markets which will increase the interest rates, with devastating effect, right across the country. I agree. But how about restraining Crown corporations or Government corporations from expanding? An example is the purchase of BP by Petro-Canada. That is a cost to the taxpayer. It is a direct cost to the taxpayer when we allow a Government corporation, a Crown corporation or a
Government-owned operation to spend money. We hear we will increase the sales, et cetera, and we will be able to pay off BP in this respect, but that is not totally true. Some of it will be, possibly, but the Government is still paying in, transferring directly to Petro-Canada, millions and millions of dollars a year through the ownership levy at the pumps today. That is inflationary.
We have a new Macdonald Commission to look at the economy and come up with ideas on how Canada can fight inflation. At what cost? What is it going to cost taxpayers of this country to have this flim-flam Commission-$5 million, $10 million, $15 million? Certainly it is going to be at least $10 million. That in itself is inflationary.
What about the advertising we talked about earlier, Mr. Speaker, the advertising that is done by the Unity Office or the advertising that is now done by the six and five office? It created a bundle that was delivered to my office in hard cover, a very fancy document, a fancy book, that had to cost at least $100 and more likely $200 per copy. This was delivered to all Members and, indeed, probably across the country. How many copies were issued, 1,000, 2,000? Why not reduce in those areas?
The federal Government, the so-called people's Government, is the largest advertiser in Canada today, at a rate of $70 million to $100 million per annum. I do not think that people across Canada have to see all the advertising or to get a bound copy of the three dissertations that the Prime Minister made on his six and five proposals, et cetera, a few weeks ago.
There is something fundamentally wrong when we break the trust that we have with our employees, the employees of Canada, who have contributed, dedicated their lives and their working careers. In many cases Armed Forces personnel, RCMP and diplomatic corps people lived in situations they did not like. They remained because of a duty to their career or to their country. Often they were enticed to remain.
I left the Armed Forces after ten years' service. Canada or the federal Government had made an investment in my training and the expertise I had developed in certain categories. A real effort was made by the commanding officer, and later the personnel officer at the release centre, urging me not to leave the Armed Forces after ten years, telling me that if I remained for another ten years I would earn a pension and never have to worry. It was pointed out that I would still be a young man and could attain a higher rank. That is being said today to fighter pilots and to trained public servants. They have been in the past and will continue to be in the future talked into staying with their career, whether it be with the RCMP, diplomatic service or Public Service.
We cannot allow the trust relationship that has been built up over many years with the employees to be trampled in this way. This Government has an obligation. We cannot allow that trust to be broken. I hope that during the Committee
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stage all Members of Parliament will look clearly at their responsibility. In a small business, the employer's word is his bond. We have stated clearly that pensions will be indexed and not trampled on. That is in legislation. We have said to them that when they retire, they will receive a pension and that if inflation escalates, they will still have the same purchasing power from the day they retire until the day they die.
People have planned their lives around this principle of indexation of pensions. We cannot break that trust.


Mr. Pat Nowlan (Annapolis Valley-Hants):: Mr. Speaker, I am happy to participate in the debate on Bill C-133 although, as other Members have said, the subject matter does cause concern. The Hon. Member who just concluded echoed in very real terms the fundamental issue.
Before getting into what I want to say about this Bill, 1 want, without any hesitation or equivocation whatsoever, to pay a heartfelt compliment to the Hon. Member for Ottawa-Vanier (Mr. Gauthier) who spoke earlier this afternoon. It was one of the most constructive, reasoned and parliamentary speeches that I have had the pleasure of hearing for some time. After listening to the tone and timbre of that speech, I must say that it has affected what I intend to say today.
I was going to go further with this trust. 1 was going to refer to the classic article by the Prime Minister (Mr. Trudeau) in Cite Libre where he chewed out Liberals as docile sheep. There were many other interesting epitaphs in that article. There has been the tremendous flip-flop with regard to nuclear arms and the acquisition of Bomarcs. Admittedly, that was in 1963 and the Prime Minister was not a Member of the House at that time. The article talked about spineless Members who go through the charade in this House of speaking for and against Bills, not worrying too much about conviction or principle.
This is an issue that one could talk about in a facetious way, but I will not be facetious. The issue in Bill C-133 contains many complexities with regard to pension funds. This is one place where I do not want to be confused with the facts. Frankly, I do not understand the shell game regarding the differences between one pension plan and another. I do not know which one is over-funded and which one is under-funded. I do not know where the surplus is. For years there has been an ongoing debate about what has happened to the contributions of federal public servants, RCMP and Defence employees. In effect it goes into an account, some goes into the national account and the Government pays out.
When it comes to the complexities of pension funds, Alice in Wonderland would be as confused today as she was at the Mad Hatter's tea party.
What stood out today was the contribution by the Hon. Member for Ottawa-Vanier. He researched the subject and spoke very carefully in a concerned way about his personal dilemma of trying to rationalize loyalty to the Party and the principle which he feels could be violated if the Bill came to a vote in its present form.
The most interesting part of the Hon. Member's speech was at the end. He proposed certain changes by which he and other
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Members might avoid the dilemma which so often hits Members. He very eloquently expressed that when he said that when you have a personal dilemma between what your conscience tells you to do and what your constituents would like and there is a Party label on an issue, you are supposed to vote the Party line.
That Hon. Member's contribution was one of the more interesting ones. There have been contributions by other concerned Members, in tremendously marked contrast with some of the speeches made by other concerned Members as to how they would wiggle out of the dilemma they now face.
There have been contributions by Members who spoke outside the House about their personal views on Bill C-133, how they do not intend to support the Bill in its present form. They have stated this at public meetings and so on. However, when the debate began yesterday-and I was here yesterday and today-some Members from the Government side, and I will not name each one, created an amusing situation. The mental gymnastics they went through of trying to rationalize the conflict they are in would make a professional acrobat seem like a piker. They moved around and hopped around the issue, which was squarely faced by the Hon. Member for Ottawa-Vanier.
I said do not confuse me with the facts because, as the Hon. Member for Athabasca (Mr. Shields) said, the issue is the fundamental principle of trust. I find it most ironic that we are talking about this type of Bill where trust is the fundamental issue. I will not get involved in all the facts and figures but I can mention a few. As my hon. friend, the Hon. Member for Nepean-Carleton (Mr. Baker) said so eloquently yesterday in trying to meet the canard, we are not talking about the "fat cat" who can fight inflation. We are talking about an economic group who are really on the low part of the totem pole, with an average income from these pensions of $6,900. Yet, because of show, cosmetic effect and propaganda, these retired pensioners from the federal Public Service are suppossed to carry their weight, even though so many of them carried their weight by receiving low incomes for so many of the years, let alone the fact that they have made a contribution to their pension since the Act was changed a few years ago and feel very much that there is a contract which binds the Government as a trustee not to meddle with these funds.
The Prime Minister (Mr. Trudeau) appeared on television, and what was his fundamental message? What he tried to preach to the people of Canada was trust. He said, "Trust me, trust the Government, trust Canadians". I find it fantastically ironic that the Prime Minister on that day was asking Canadians who were overdrawn at the bank to trust the Government, farmers to trust bank managers, all kinds of Canadians to trust each other in this new euphoria of trust. Yet, here today when he should be practising what he is preaching, his Government would not trust the most loyal Canadians which Government

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has, the retired public servant who has done his duty to his country until recent years at relatively low income scales. Certainly, when you average out the pensions at $6,900 you are not talking about fat cats who have milked the trough; you are talking about Canadians under the poverty line. They cannot fight back. And when you cap their pension at six and five, they cannot come back when this capping is over and renegotiate.
The Hon. Member earlier spoke about how permanent temporary things become in this House. If the Prime Minister wants Canadians to trust, he should start to practise what he preaches by changing this Bill. Frankly, there is a way out for every Member of Government in the motion which is on the floor at the moment. Many Hon. Members may not know about it. The motion of the Hon. Member for Nepean-Carle-ton is a six months' hoist to give Government time to iron out perhaps some of these problems, to study some of the suggestions which have been made, whereby Members, particularly Government Members, would not have to face this dilemma of in effect having their personal conscience and their loyalty to their constituency fly in the face of their loyalty to the Party. In the six months made available we can all talk about what the interpretation may be of that Bill.
Some of us have been in this House before when a Government has lost a tax Bill, and the next day the question was: you have lost a tax Bill, have you lost the confidence of the House? In 1968 in Mr. Pearson's day, in a constitutional parliamentary precedent, the Government which lost the tax Bill had not lost the confidence of the House. And I do not think, even with the losing of Bill C-133 or a six months' hoist to Bill C-133, with all Members present, that the Government would in fact have lost the confidence of the House.
I am glad to see the Government House Leader (Mr. Pinard) here because 1 know he has been very interested in reform. My hon. colleague was the Vice-Chairman of the committee for reform and, quite frankly, that committee has done some very good work in starting down the road to reform. You can talk about reform all you want in terms of rules and technicalities of procedure, but unless and until we start to reform Hon. Members in their conduct so that we are not always playing the political game and talking rhetorically, which we can all do fairly well, some of these technical reforms will not matter very much. Of course, the one I believe in, which I am not going to repeat, is a fundamental reform which is obviously the reform on confidence motions. If we change that, we will have Members saying what they really believe, really helping their constituents and helping redress this alienation which the public feels for this institution.
That was the essence of the speech from the Hon. Member for Ottawa-Vanier today. He spoke about what he believed in and, interestingly enough, posed the rhetorical question: that he did not feel he was a rebel, running away from principles that he and his Party had believed in for years, mainly because they have been in Government so long, and the inference from what he said was that the import of Bill C-133 is really going against the principle.
Frankly, and I say this seriously, if there was ever a black mark on the social conscience of the Liberal Party it is contained in the implications of Bill C-133. And there are good Liberals, in the Liberal sense of this word, outside of this House who must be squirming at the implications of Bill C-133, and certainly those dead must be turning in their graves. Bill C-133 is in effect breaking trust with retired employees who have served, and served well. The other aspect is that this change was unilateral. It was made with no prior consultation, which is another reason why there is such negative reaction from retired public servants.
I do not have the number of retired public servants in my constituency that some Hon. Members who have spoken in this debate have in their constituencies, but I say seriously that if you want a whipping boy it might be easy to point to those "fat cat retired public servants".
Frankly, it would be easier for me perhaps to vote for this Bill, if I did not honestly believe that this fundamental principle of trust between employer and employee is being violated, and if you violate it once, you can violate it again in any area. And that is what this Government has done in so many ways.
I have in my hand, Mr. Speaker, a season's greeting message from the members of the Federal Superannuates Association of Nova Scotia who, in effect, are concerned about this matter. I see that the clock shows almost six. May I call it six o'clock and continue my remarks at eight o'clock?


The Acting Speaker (Mr. Blaker):: The Chair thanks the Hon. Member for recognizing the clock. I will now rise until eight o'clock this evening.
At 6 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
John Patrick (Pat) Nowlan: Mr. Speaker, I had the floor just before six o'clock, and over the dinner hour something happened which some Members here might not think is related to Bill C-133. In listening to the news 1 heard that the MX missile proposal of President Reagan was defeated in the Senate, and I am very happy about that. Quite frankly, I think the whole concept of dense pack MX missiles, ironically called the Peacekeeper system, is one of the greatest political perversions in the United States, just like the Maginot Line was in France because it was supposed to keep the Germans out of France, but the politicians forgot that the Germans could come through Belgium. It is ironic that it happened today, on December 7, when my young friend, the Hon. Member for Gloucester (Mr. Breau), who is not in his seat, perhaps forgot about that day, December 7, 1941, and about preparedness.
The reason this is relevant, Mr. Speaker, is that in the United States' political system a presidential decree, edict, or whatever it is, concerning the MX missile went down to defeat, and neither the Democratic Party nor the Republican Party
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are shattered. That is their system, they can vote the way they believe. That is why I come back to Bill C-133 and some of the Eion. Members opposite who, I believe, feel the same as I do about it. I paid the Eton. Member for Ottawa-Vanier (Mr. Gauthier) the justified compliment of saying that his speech was one of the more courageous, comprehensive and constructive speeches that I have heard since I have been a Member of Parliament. The point is, Mr. Speaker, when you get an issue like Bill C-133, it boils down to a simple but very challenging word, that of trust.
Before six o'clock I said it was ironic that we are discussing this Bill and its betrayal of the trust of people who have served this country better than perhaps a lot of Members or a lot of other Canadians across this land, that is the retired public servants. It is ironic because it was the Prime Minister who, two or three weeks ago, went on national television to talk about trust. You cannot have the Prime Minister of the land, in an interesting television performance, come on and ask Canadians to trust in Government, trust six and five, trust a Canadian, when the people who have served the country feel betrayed by Bill C-133. It just does not sell. And those are not my words.
1 could stay silent on this Bill. While I have a number of retired public servants in my riding because the Annapolis Valley is a nice place to retire to, the numbers are rather few in relation to the many thousands across this land. So it would have been easy for me to stay silent on this Bill. But, as I said before six o'clock, unless Members start to heed the example of the Hon. Member for Ottawa-Vanier and say what they feel, we are just kidding ourselves in our attempts to reform the House of Commons. Unless Members can reform their own performance, all the technical changes in the rules will mean very, very little. Because of television, the public can tune in to what goes on here. Because they are better educated than they were 20 or 30 years ago they are starting to expect Members of Parliament to speak about their belief in a cause. If they do not believe in the cause, let them shut up and sit down. This is one of the reasons why there is this alienation between the public forum of this Parliament of Canada and the public out there who wonder who is speaking for them.
I say to you, Mr. Speaker, as humbly as I can, that Bill C-133 to me crystalizes the issue which the Prime Minister talked about. I thought it was a relatively good performance on television, regardless of the partisan aspect where I could say he did not say too much in a concrete way. But his one message was trust. Trust me. Trust Canadians. And is it not a paradox that the one Canadian he is not going to trust is the retired public servant who has worked in many cases at a sub-par income level and in many cases has a sub-par pension level.
These are the people who feel betrayed by the leader of the land. We are not talking about the fat cats of the land; we are talking about retired public servants whose average pension is $6,900, and that is below the poverty line. They contributed to
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that pension from their salaries when they were working. These individuals, without form, without face, having given service, are supposed to be the front-line fighters in the trenches because the economic conditions in the country are very, very difficult today. We all understand that difficulty, Mr. Speaker.
The Hon. Member for Ottawa-Vanier quoted some words that the Prime Minister had used in an address to a pensions conference. I should like to read from a letter which is about trust. It shows why I think this matter is so fundamental. The letter is dated October 12, 1977. It is addressed to a Mr. Power, who at that time was national President of the Union of National Defence Employees, and it is signed by the Prime Minister. I will read the letter in its entirety But I want to bring the last paragraph in particular to your attention as that is the one on which I will make my case. The letter begins as follows:
Dear Mr. Power: Thank you for your telegram of September 27.
By the way, this telegram was sent because there was a question at that time about the right or the policy of indexing public service pensions. It continues as follows:
I have noted your concern that the indexation of government pensions be maintained.
In our society, pensions provide a means of sharing risk so that we can retire in reasonable security and dignity, without fear of the future. Protecting pensions from inflation by indexing them to increases in the cost of living should be an integral part of our pension schemes. Indexing does not give pensioners an increasingly larger claim on our economy's production, that is, more money to buy things they could not earlier afford. Rather, indexing merely enables pensioners to maintain, roughly, their same standard of living.
Even a modest rate-
This was written in 1977, when we did not have the ravage of inflation that we have today. It went on:
Even a modest rate of inflation destroys, at a devastating rate, the buying power of people on fixed incomes. Pensioners are out of the work-force and cannot bargain or strike for larger incomes. They are not the cause of inflation; they are its victim. We have an obligation to help protect them.
I have asked my staff to send a copy of our correspondence to the President of the Treasury Board, the Honourable Robert Andras.
In the remarks that I made before six o'clock this evening, I said that if there is any one Bill that is a blot on the social conscience of the Liberal Party, it is Bill C-133 which attacks pensioners who are out of the work-force, who cannot defend themselves and who will never again be able to negotiate or strike or make up what they are going to lose through the capping of a pension to which they contributed and which they were told-in contract form-was theirs.
This hocus-pocus on the part of the President of the Treasury Board (Mr. Gray) of playing around with one half of one per cent to try to get some of the mental gymnasts, in the parliamentary sense, to come on board, is not only all heart, it is a complete and total sham.
We have all heard that a woman cannot be half pregnant; she has to be pregnant or not. There either is a principle and a contract that cannot be changed unless there is consultation, or there is no principle involved here. You cannot play around

December 7, 1982
Supplementary Retirement Benefits Act (No. 2)
with the principle by trying to insult Members, as the President of the Treasury Board has done, by saying, "Fellows, come on board because we will recognize the six and five in terms of the 1 per cent contribution that people made. We will give a half per cent more so it will not be six and five, it will be
6.5	and 5.5"
This morning I heard a commentary which pointed out that the difference works out to $3 per month. Almost before you were born, Mr. Speaker, and in my early adolescence, there was another Government of Liberals. Walter Harris, a great Canadian in the true Liberal sense, brought in a budget. He just added $6 to the old age pension. The Government legitimately went down to defeat because of the "six buck boys".
We all know about Mount Rushmore National Park. Here we have the President of the Treasury Board whose face is carved-in the animate spirit that moves him-in chalk as if on Mount Rushmore. He is trying to delude certain Members on the other side who are faced with a legitimate problem- conscience versus loyalty to the Party. He is trying to seduce them in an insulting way with half a percentage point. That is how much he thinks of them. Three dollars a month-the price used to be 30 pieces of silver. Well, 30 pieces of silver today is more than $3 a month. For $3 of this Government's money he says, "Come on board. We have changed the Bill. It is no longer six and five. We are giving you half a percentage point more because there is a little different principle here. Some retired civil servants did help pay for an indexing clause." Thirty pieces of silver, or $3 in the Government's price, is supposed to seduce Members to come on board without change.
The Hon. Member for Ottawa-Vanier proposed some changes that the Government should consider. The motion that is before the House at the moment does not cut to the core of a Government. It does not mean that if it were adopted the Government would go down the drain and we would be fighting a winter election. As much as any of us love elections, winter is not necessarily a good time to have one.
The motion of the Hon. Member for Nepean-Carleton calls for a six month hoist. The Table officers might try to define what a six month hoist does to a bill. 1 was a Member of the House when another Prime Minister of the same governing party defied a vote on a tax bill and said it was not a vote of no confidence. So there is a way out for Members opposite faced with that dilemma. And they must face a dilemma if they have any political conscience at all.
You do not hit a little fellow when he is down, Mr. Speaker. Why should retired federal public servants who worked for the Government, believed in the Government and expected the Government to protect them, now be the guinea pigs because of economic conditions in the country and indeed, in the world? I will not try to lay all the blame on the Government, although I can lay a lot of it there. I do not care about blame. I care about the injustice, the inequity and the total anti-Libera! philosophy of Bill C-133 as it stands. It uses retired federal public servants as guinea pigs in order to introduce a psychology that six and five will be the salvation of all our economic ills.
When I spoke before six o'clock I referred to a "Season's Greetings" note sent out by the Federal Superannuates National Association of Nova Scotia. Members get oodles of paper coming across their desks. This is a mimeographed newsletter which, ironically, is financed by a New Horizons grant from Health and Welfare Canada. This is participatory democracy in a real way. It is an expenditure of public funds, but if they are to be spent, let the superannuates spend them. It is they who are going to get hit over the head if Bill C-133 goes through as it stands. This letter from the 16,000-odd superannuates of Nova Scotia presents their arguments against the Bill in summary form. They are as follows:
1.	Our pensions, including indexation, are a form of deferred remuneration and should not be altered at the whim of government or without prior consultation.
2.	Considering the statements made in the last three issues of the Treasury Board publication, "Your Superannuation Plan", any reduction of full indexation is an outright breach of faith with those already retired.
3.	The contributions made to the Supplementary Retirement Benefits Fund were mandatory-
This is the interesting thing which makes almost a lie of granite face from Mount Rushmore, the President of the Treasury Board. He started to play around with one-half of 1 per cent and to say that the one-half of 1 per cent was in effect a reward. He missed the whole object of the exercise. We all know that a 1 per cent payment from a federal Public Service salary will not pay for full indexation, but it is a form of insurance which they bought; it was part of the contract. Now this trustee of public funds will unilaterally change the contract and not give them their indexed pensions for which they have paid. Now he unilaterally says that they will be indexed at six and five. It has been said by other Members, more eloquently than I can say it, that if anyone else tried this they would be in criminal court for violating their trust to a trustee's account. That is the point in No. 3 in a simple form. The superannuates of Nova Scotia indicated:
3.	The contributions made to the Supplementary Retirement Benefits Fund were mandatory and represented a form of insurance of our pensions against rising cost of living. We paid the premium, we are entitled to the product.
That says it all. They continued:
4.	We understand that the Supplementary Retirement Benefits Fund is not sufficient in itself to pay for indexation of pensions, but we are entitled to a share of the excess earnings from the main fund, and if our share of excess earnings was credited to the SR BA there would be sufficient to pay full indexation.
5.	Lastly, if government is allowed to meddle with the pension funds, then a very dangerous precedent is being set.
1 agree with each of these five points. I think my time is coming to a close. Therefore, I will conclude in the usual manner, observing the House rules. If I do not observe the rules, Mr. Speaker will direct me to do so.
In conclusion, let me remind the House that we have the letter of the Prime Minister in 1977. If we are talking about a principle of indexation when pensioners are out of the work force and cannot bargain or strike for larger incomes, and if all that were true then, what has changed today in 1982 in terms of the principle of indexation? Many of us voted for Bill
December 7, 1982

C-124. We all know that one Party did not. We voted because we in the work force, public servants in the work force, should accept and react favourably to the Government program of six and five. We in the Conservative Party never intended that a vote on Bill C-124, which in effect approved of the Government trying to exercise restraint by example-and I will not get into the reasons it has not lived up to its example-would mean that we acquiesced with an inequity upon those who cannot defend themselves. The two cannot be connected. It is the same as the canard from the NDP which says that if one believes in God one is a Baptist or if one believes in God one is a Catholic. Often we believe in the same principle, for example that of disarmament, but we may have a very different way of going about it. That is how the MX missile was started; it was a crazy idea to begin with. I am glad that it was defeated. I think the world now will be safer. That is my thought about it. At least it was defeated and the world did not break down.
As Members of the House listen to the debate I hope they realize the inequity to retired public servants. Let me say, for those people who have just tuned in and do not know what 1 am talking about, we are considering Bill C-133, the Government Bill to cap the pensions of retired public servants as an example for all of us who are presently in the work force, to try to bring everything down to the six and five level. Quite frankly it is hocus-pocus because the economic, draconian methods of the Government with interest rates, the slow-up of the economy and the depression we are in, with 1.5 million unemployed, are bringing everything down to six and five and even below that level. It is no reason or justification to try now to pass a Bill affecting the pensions of people who have paid into them on a contractual basis and have worked faithfully for the Government. Now they are being betrayed by the Government of Canada. It is a mockery.
In conclusion I want to say that if the Bill passes in its present form, every Canadian should wonder why the Prime Minister, three to four weeks ago, interestingly enough preached, very well and eloquently in many ways, on trust. Yet we have a Bill in the House of Commons tonight which betrays the trust of one of the most fundamental groups in Canada, namely, retired public servants who have given their service and expect a better deal than they are getting from their former employer.


Some Hon. Members:: Hear, hear!


J. Robert Howie: Mr. Speaker, it is a pleasure to speak on Bill C-133. I am speaking in opposition to the Bill which limits indexing of Public Service pensions to six and five per cent. I thank Mr. Speaker for recognizing me and for giving me the opportunity to participate in this very important debate. I congratulate those of my colleagues who have already spoken, particularly the previous speaker, for their constructive and well-intended comments in the debate.
I am surprised the Bill was brought before the House because there has been such vehement and sustained opposition to it. Not only are my Party and the Party to my left determined to vote against it but, until the Government Whip tugged sharply on their reins, up to ten Liberal Members were
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also ready to help defeat the Bill and possibly their own Government.
This is another component of the six and five program; six and five Bills have been dangled before us over the past few months like a yo-yo. In fact, the entire program reminds me of a 99-cent novelty yo-yo-it is cheap, poorly constructed, and does not work very well; but it is gaudy and attracts a lot of attention when used in public.
This particular Bill is just as reprehensible as Bill C-131 because once again it puts pensioners, the sector of our society least able to give up buying power, on the front line of restraint. It has the added tinge of moral bankruptcy since it breaks the 1970 agreement between public servants and the Government, under which employees pay a percentage of their wages for protection of their pensions against inflation.
At the 1981 National Pension Conference, the Prime Minister (Mr. Trudeau) said in his opening remarks that the unfairness of a pension without inflation protection, particularly when the savings pool to which workers have contributed may have been reaping inflationary interest premiums, is not tolerable in a nation which believes in social justice.
In June 1981 the then president of the treasury board said that the federal Government remained dedicated to the principle that Public Service pensions are to be protected from inflation. Since 1971 Public Service pensioners, including federal Public servants, members of the RCMP, the Armed Forces and parliamentary employees, have paid one-half of 1 per cent of their salaries to protect their pensions against inflation. Since 1977 they have paid 1 per cent. In each case their employer, the federal Government, has matched those contributions.
In 1974, Public Service pensions were fully indexed to the rate of the consumer price index for all pensioners, including those who retired before 1970 and thus had not paid in at all to the supplementary retirement benefits account. It was only at this point that the Government had to begin drawing from the Consolidated Revenue Fund to cover the indexing of those pensions with little or no equity in the supplementary retirement benefits account. Until 1974, the indexing account had been self-sustaining. The 1974 Treasury Board handbook entitled "Your Superannuation Plan" stated:
In any year where there is an increase in the cost of living, pensions will be increased in an amount directly related to the increase in the consumer price index, without limit.
"Without limit" is the key phrase, echoed in the words of the President of the Treasury Board and the Prime Minister on the occasions I have mentioned, and on many others. Time and time again the President of the Treasury Board has been on record as expressing the concept that pension savings and employers' contributions to match those savings are deferred wages or earned income, part of the total benefits package. Now, because the Government is short of funds, it has decided to breach its obligations.
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The security of senior citizens has always been one of the touchstones of the Government, one of the policies of which it could be proud. Part of what it meant to be a Liberal was to uphold this principle. It is no wonder, then, that the backbenchers opposite are in revolt as this principle goes down the drain in the name of restraint.
If this Bill is passed without amendment, 190,000 retired public servants, RCMP and military personnel will lose 5.5 per cent of the indexing to which they are entitled in 1983 under the established terms, and probably more than that in 1984, when indexing is to be limited to 5 per cent. The former contributor who earned about $16,000 on average in his or her last six years of employment and worked for 25 years in the public sector received $8,100 in pension annuities last year. He or she will lose $1,409 over the two years while six and five is in effect. Surviving spouses and dependants who received an average payment of $3,200 in 1981-82 will sacrifice $557 during the two-year restraint period, a sacrifice of which this Government should not be proud.
Therefore, the average recipient of a Public Service pension who received $6,900 last year will lose $1,200 in purchasing power over the next two years. This is quite a blow in itself, but the sacrifice does not end in 1984. These decreased pensions will form a lower base for any future indexation. Public sector pensioners will find their pensions and their standard of living are reduced forever. The Government points to the $1.06 billion paid out of the Consolidated Revenue Fund from 1974 to 1982 for indexation of Civil Service pensions alone and states that it cannot afford to increase future liabilities for indexing. However, there was a fat balance of $1,215,769,000 in the supplementary retirement benefits account at the end of the fiscal year, 1981-82, of which $880 million was credited to public servants.
The reason that the Government must draw from the Consolidated Revenue Fund is simply to satisfy one of its more puzzling accounting practices. Since January of 1974, supplementary benefits paid to a former contributor are charged to the supplementary retirement benefits account only until the accumulated total of such payments equals the aggregate of all the amounts credited to that person under the account. Indexing paid in excess of that aggregate amount is then charged to the Consolidated Revenue Fund. If the Government persists with this practice, the burden on the Consolidated Revenue Fund will still diminish as time goes on because future pensioners will have more and more equity in the supplementary retirement benefits account to pay for the indexing of their pensions.
The pension plan itself is not and has not been funded. There are two thoughts on this matter. The first approach would be to consider that the amount would be used by the Government to create wealth in the country, which would be reflected over time in increases in the general revenue of the nation. This, in turn, would enable the Government to meet pension obligations as they became due. The other approach, and one which I am inclined to prefer, would be to fund the pension plan by lending the money out in mortgages or other
securities at current interest rates, allowing the interest to be compounded over a period of time in order to meet the obligations owing to pensioners as they became due. I feel that this latter approach would enable us to make the plan more accountable to pensioners, those paying into the pension accounts and the taxpayers.
Many pensioners point to the rate of interest which has been attributed to contributions over the years and make the claim that they have paid in far more than they will ever receive because of the inadequate interest rates applied to their contributions and matching contributions by their employer. With a fund in existence, bearing in mind that the fact that interest rates have always outstripped the consumer price index, it would be quite possible to adjust contributions to meet expectations with greater certainty and to remove the doubts and charges that are made from time to time. Clearly, a unilateral change in the rate of benefit imposed by the employer without consultation or agreement with the employee is a violation of trust and a violation of a contract which exists between the workers and the Government.
The breach of trust is possible in the present instance because the Government is not only the employer but also the trustee of the fund, which puts it in a conflict of interest position. It is this breach of trust which is unacceptable to me. I would urge the Government to reconsider its decision. I would also urge it, even at this late date, to commence the funding of pensions such as this by using a corporate trustee to ensure that the rights of all parties are protected and to ensure that the money will in fact exist to pay the pensions when they become due and to provide for the efficient operation of the program.
I think the Government should do everything it possibly can in both the public and private sectors to ensure that senior citizens who, in more difficult times than these, created for us one of the highest standards of living in the world, will be rewarded for their hard work and self-sacrifice with pension plans which will see that they enjoy a reasonable measure of happiness in their golden years, without the constant fear that their buying power will steadily erode and that next week and the week after they may have to get by with one less egg or one less orange.
1 support the concept of indexed pensions and 1 believe that when people pay for an indexed pension, it should not be unilaterally taken from them.


Some Hon. Members:: Hear, hear!


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, on October 28 the Government introduced Bill C-133, a Bill which, if passed, will have the effect of reducing the indexing of pensions paid to retired federal public sector workers to 6 per cent in 1983 and 5 per cent in 1984. If passed, Bill C-133 would roll back pension indexing to 6 per cent, effective January 1, 1983, in spite of the fact that under current legislation, public sector pensioners should receive 11.5 per cent in view of actual increases in the cost of living. The Bill sets the
December 7, 1982

indexation limit to 5 per cent in 1983, regardless of what happens to inflation in the meantime or what price increases will be likely at that time.
Over the next two years, this legislation would rob the average public sector pensioner of $ 1,200, and thereby considerably lower the already minimal standard of living which many pensioners are experiencing in their retirement years. As my colleague, the Hon. Member for Churchill (Mr. Murphy), said last night, the average annual pension paid to some 90,000 former contributors is about $8,100 a year, and there are some 32,500 persons being paid about $3,200 in survivor benefits, on the average, which brings the over-all average pension being paid out to about $6,900. This is hardly an extravagant amount in 1982, yet these are the people who are being lectured on sacrifice by the Prime Minister (Mr. Trudeau) and by, for instance, Ian Sinclair, the President of the CPR, who makes $556,000 a year. Things are not tough all over, Mr. Speaker.
Furthermore, the decreased indexation could create a lower base for all future indexation, and thereby set the structure for continuing losses in the future, when compared to what would be the case if this Bill had never been brought forward.
In addition to the unjust economic consequences of Bill C-133-because there are not just economic consequences of this Bill for public sector pensioners-there is also the moral question, which so many Members have dwelt upon, and quite rightly so, of the breach of trust which is involved in the Government's bringing this Bill forward in the first place.
Pensioners retired with a pension plan that they contributed to on the understanding that they would receive a fully indexed allowance upon retirement, and now they are faced with the Government unilaterally changing the rules, and in effect depriving them of their own income. There is no other way to describe this Bill.
This is a very important issue, this question of the breach of trust. In fact, the breach of trust which Bill C-133 involves is probably even more significant in the long run than the shortterm economic consequences of the Bill, however undesirable they may be. The same is true, at the moral level, of Bill C-131, the Bill to reduce indexing of the Old Age Security payments which is a breach of the trust that many other Canadian pensioners had when they planned their retirement years on the basis that whatever private pension they might have, if they were lucky enough to have a private pension, would be rightly complemented by a universal and fully indexed Old Age Security pension.
The effect of Bill C-131 will be a significant erosion of universality in our public pension system, and will mean that our pension system as a whole will become even more of an income-tested system.
Canada's pension system is already excessively reliant on income-tested benefits. More than 50 per cent of the OAS recipients, for instance, are also receiving full or partial GIS benefits, and by substituting special GIS supplements for the OAS increases that are eliminated by Bill C-131, we are
Supplementary Retirement Benefits Act {No. 2)
drawing more of Canada's elderly into the income range where part of their public pension benefits are income tested. This is a retreat from the victory won 31 years ago in 1951, the year 1 was born, when the means test was removed from the payment of Old Age Security as a result of the work done over the years by my esteemed colleague, the Hon. Member for Winnipeg-North Centre (Mr. Knowles).


An Hon. Member:: Hear, hear!


William Alexander (Bill) Blaikie: We in the NDP, and the CCF before us, believe that it is more desirable to provide public retirement benefits as a matter of right rather than on the basis of an income test. We are concerned that since 1964 OAS benefits have declined from 20 per cent of average wages and salaries to approximately 14 per cent in 1982. This, combined with the reported controversy in the Liberal Party over whether or not universal benefits like the OAS should be maintained makes us very anxious about the future. We will be even more vigilant in our defence of this aspect of our public pension system, as a result.
Bill C-131, an Act to reduce the indexing of Old Age Security pensions and Bill C-133, the Bill we are debating, an Act to reduce the indexing of Public Service pension, are both clearly unacceptable. They constitute an injustice against the pensioners of Canada and a double injustice against retired public servants. We in the NDP will continue speaking against these Bills in all stages, as well as Bill C-132 which reduces indexing for Family Allowances.
We believe that there is an urgent need for pension reform in this country, and we have waited long and not so patiently for it, because it is something we do not want to be patient about. We have waited long, nonetheless, for the Government's position paper on pension reform, and we are still waiting. We believe there is an urgent need for pension reform, for reforms which would guarantee that all Canadians over 65 have incomes over the poverty line; that all middle and low income Canadians have indexed retirement incomes that allow them to maintain their pre-retirement standard of living throughout their retired lives and pension reforms that would guarantee that income-tested benefit would form a smaller rather than a larger part of our pension system.
Bill C-133 and Bill C-131 move away instead of toward those goals, and set dangerous political and conceptual precedents. For this reason I hope that sufficient numbers of Members of Parliament will be moved to vote against these Bills. In this respect I would like to make a few comments on the position being taken by my Progressive Conservative colleagues to my right.
Last night a certain Progressive Conservative Member, and he is in the House tonight, became very upset when my colleague, the Member for Churchill commented on the fact that the Progressive Conservative caucus was playing both sides of the street on the Liberal six and five program. I want to return to this for a minute because I think it is crucial that the Canadian people know where each Party stands on the Liberal approach to our economic problems.

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It is true that the Progressive Conservatives are opposing Bill C-131 and Bill C-133. I believe most of them are doing this out of political expendiency because they are afraid to face the legitimate wrath of old age pensioners and Public Service pensioners, and because they do not want to be seen to be in bed with the Liberals. They would prefer the lights to be out all the time, Mr. Speaker, as they were for a short moment today, so that their relationship with the Liberals would be less visible. Only a few of them genuinely disapprove of these measures, and they are well-known to the House. I congratulate them for that disapproval.
The fact of the matter is that the Conservative Party has supported the six and five program in principle since the beginning.


An Hon. Member:: For people who are working, sure.


William Alexander (Bill) Blaikie: This last summer they voted overwhelmingly in favour of the initial and most all-encompassing of the six and five Bills, Bill C-124. Had they helped the NDP to oppose that particular Bill, instead of giving aid and comfort to the Liberals, we might not have ever been faced with Bill C-131 and Bill C-133.


An Hon. Member:: Hear, hear!


William Alexander (Bill) Blaikie: So 1 repeat the charge that my Conservative colleagues are trying to have it both ways on this issue by supporting the program in general, but then pretending to oppose it in particular, when there is a subsequent Bill which is part of the over-all program.
I maintain that the Liberals have acted so confidently to reduce indexation of pensions and Family Allowances because they correctly judged that the Official Opposition, the Progressive Conservative Party of Canada, would offer only token resistance to such moves.


An Hon. Member:: They made a deal with them.


William Alexander (Bill) Blaikie: Why? Why only token resistance? Because the six and five program is consistent with the general view of the Progressive Conservative Party about what needs to be done in order to produce renewed economic growth in Canada, and because the Conservative Party of Canada has a long tradition, broken only to an extent by John Diefenbaker, of having a negative rather than a positive attitude toward pensions and toward other universal programs like Family Allowance and Medicare. Indeed, when the Old Age Security payment first came into being in 1927, it was over the objections of the Conservative Party of Canada. Many Conservatives at that time seemed to think it would be vaguely immoral to do what that terrible radical, J. S. Woodsworth, was proposing, and have a means-tested pension of $20 per month for every Canadian over 70 years of age. To most of the Conservatives of that time, Mr. Speaker, that smacked of communism, the same kind of rhetoric that we hear so often from the benches to my right, even to this very day.
No group of people involved in politics in the last decade or so has done more to discredit the Public Service and universal social programs than the official spokespeople of the Progressive Conservative Party of Canada. The PCs have allowed Members of their Party, and I think of the Hon. Member for York-Peel (Mr. Stevens) as an example, to go around the country denouncing the public sector, blaming spending on social programs for all our economic ills, and arguing against the indexation of pensions as something we cannot afford and should not do. Yet tonight they are full of praise and compassion for the retirement incomes of the people who are retired from the very kinds of jobs that they wanted to cut by 60,000 in August 1979, according to an announcement made then by the Member for York-Peel when he was president of the treasury board in the short-lived Progressive Conservative Government in 1979. This is the kind of inconsistency to which we have been treated by the PCs in this debate on Bill C-133.
Tonight the Conservatives are great defenders of universal old age pensions and Family Allowances, but it was the PC minister of national health and welfare, the Hon. Member for Rosedale (Mr. Crombie), who in 1979 clearly was interested, indeed fascinated, with the arguments being advanced by his right-wing colleagues that the time had come to ditch the universal programs. 1 remember only too well his hedging on the future of universal programs like the Family Allowance when 1 asked him a question in the House of Commons on that issue as social policy critic for my caucus in that Parliament of 1979.
The general point I am trying to make is that the six and five program, in so far as it is presented as part of an over-all economic strategy, is exactly what the Conservatives have been advocating for years as a way of accommodating the Canadian economy to the changes which are taking place in the international structure of capitalism. As we move into the era of the consolidation of the power of global corporations and out of the era of national corporations, and before that family corporations, we are going to have to decide how we are going to deal with the mobility of capital that is now characteristic of the economic context in which we live.
The Conservatives in their own way have already faced up to this issue and they found it very easy. Because they worship market forces as the ultimate arbiter of human needs and human destiny, they seem to have decided some time ago that the Canadian response to this new reality should be not to question this mobility of capital and the reality of internationalization of capital, but to shape our own country in such a way as to make ourselves acceptable to the profit aspirations of these global corporations.
Capitulation and abandonment of the well-being of Canada is the only option available to those who worship the idol of free enterprise. The Liberals, of course, worship only power. Seeing as they cannot be guaranteed hanging on to power if they act in the long-term interests of the country instead of the short-term interests of their own political fortunes, they have
December 7, 1982

adopted the Conservative strategy, so naturally the Conservatives support them.
What is happening is that the formerly unchallenged industrial economy of the United States, of which we have been a branch plant thanks to Liberal policy over the last few decades, supported by the Progressive Conservative Party of Canada, is having to compete with advanced industrial bases in Europe and Japan, the Third World and even in Communist-bloc countries like China where the ideological purity of the multinationals is being compromised by the lure of endless cheap labour. The almighty dollar, after all, is really the only ideology that counts.
Global capital now flows to wherever the return is greatest, and returns will be greatest where wages are restrained and where taxes are low, generally due to the absence of social programs and the social and political equality and freedom which Canadians rightly feel that they should not have to sacrifice in order to be competitive in the modern world, yet that is exactly what they are being asked outright to do by the PC Party and duplicitously asked to do by the Liberal Party.
We in the NDP say the way out of the problems created by the global mobility of capital is not to accommodate ourselves, not to give up all of the things we have come to regard as important to the social and economic fabric of this country. We should devise a way of bringing our economy before the bar of the common good, bringing it under more Canadian control, and try to devise a strategy in which we could on one hand meet human needs and wants in this country, be competitive in the world economically, but not in the short-term have to give in to the demands of the international investment community that we curtail those things which have been important to the achievement of social justice in this country in order that they would continue to invest here.
That is exactly the kind of blackmail the Liberal Government has given into. That is what six and five is all about, and that is why the Conservatives support it. They believe the only way to get anywhere in this world is to capitulate to those market forces. We have long rejected the political and economic solutions based on capitulation to those forces, and we invite the Canadian people now, as we will in the next election, to join with us in trying to see our way out of that darkness instead of giving in to it.


Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, I want to intervene briefly in this debate. I want to set out and state clearly that when the Liberals introduced the six and five program, I supported it and still do. The reason 1 supported six and five was that it appeared that the Government was taking an initiative, that it was doing something and showing some leadership in trying to come to grips with the inflation which has been ruining this country for most of the 12 years the Prime Minister (Mr. Trudeau) has been in power.
However, once the cape was taken off the six and five program and we saw how they intended to implement it, it appeared that their implementation strategy was not one of showing leadership but one of following. 1 do not see how the Government can call itself a leader and say that it is giving
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leadership when in order to implement its six and five program it introduced the three Bills, C-131, C-132 and C-133.
In Bill C-131, which we discussed the other day, the Government is cutting back on the indexation of pensions to senior citizens of this country. At the same time, it is abandoning the principle of universality on senior citizens' pensions. Those who have worked 40 or 50 years are being asked to take the lead, carry the burden and show leadership in the six and five program. These people have done their bit. They have given to this country. They have turned it into what it is today. They should not be asked to head the fight once more.
The second Bill, C-132, with which the Government is implementing its six and five program, cuts back on the indexing of the baby bonus or Family Allowance, and the mothers of young children-and not all of them are wealthy- are being asked to lead the fight of six and five. They first called upon the senior citizens, then they called upon the mothers and children of this country as the next line. Now they have introduced Bill C-133, the Bill we are dealing with today, and have asked a third group if they would be the ones to lead the fight and support the six and five program so inflation could be handled, and that group is the public servants.
I would like to say categorically that I have not seen, and I do not believe there have been, any actuarial studies done to prove that indexed pensions are affordable and that we can have them. And I want to explain right now that I am skeptical that we can afford fully indexed pensions in this country. But, having said that, 1 must point out that the Government legislated in 1974 that it was going to index the Public Service pensions fully, and when it makes a promise, it should keep the promise. After those people, from 1974 on, have planned their retirement, their way of living, or the date of their retirement, depending on a fully indexed pension, they find they have been deceived by this Government. The Government is not showing leadership by attacking senior citizens or by denying mothers and their children. The Government has not shown leadership in taking away what it had already promised. In fact, I would go as far as to say that if the Government breaks a promise, breaks a contract which it imposed by legislation, if the Government breaks faith with those people, then the Government deserves no trust whatsoever. We heard the Prime Minister begging for trust three nights in a row earlier this year, but no trust is deserved by this Liberal Government because they have broken a contract, they have broken their promise.
Perhaps public servants from this day forward should not have their pensions indexed. That is, perhaps, open for debate. But the Government would not be breaking a promise if it so changed the rules. The fact is, it cannot go back, as it has in Bill C-133, and renege on a promise already made.
There are some things which the Government could do if it wanted to show leadership in the six and five program, which 1

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do want to support, but I certainly cannot support it in the way it is shown, by implementation of Bills C-131, C-132 and C-133. For example, if the Government had held its spending this year down to 6 per cent rather than increasing it by 22 per cent, 1 would have supported that. If the Government promises to keep its spending increases down to 5 per cent next year, I will support that. That would show some leadership, if the Government would do it. Maybe the Government would like to keep down the growth of our national debt to six and five per cent in the next two years, but I do not think there is any way it will do it, not the way it throws money around. After all, it sends civil servants to Paris for $200,000 a year. The Prime Minister takes a holiday across the country with his children at our expense, the taxpayers' expense.


An Hon. Member:: You're cheap. Come on!


Paul Wyatt Dick: That may be cheap. I wish he would go and have all the holidays he wants, young man, but not at my expense. He is a millionaire. Let him pay his own way, but do not make the taxpayers of this country pay for it. That is being cheap. The Prime Minister is a cheap man, and that is being cheap.
So I ask the Government to show some leadership by cutting its spending increases so they would only go up by 6 per cent and 5 per cent rather than calling upon the old age pensioners, the civil servants to whom they promised a different deal, and the mothers and children of this country with respect to the baby bonus. Only then will the Government be showing some leadership.
Having said that, Mr. Speaker, I can only say I will not support this Bill. 1 would be surprised if anyone with any sense of decency could support a Government breaking a contract, when the Government itself fails to show any leadership.


Mr. Tom McMillan (Hillsborough):: Mr. Speaker, since becoming a Member of Parliament some three and a half years ago, I cannot recall any labour-related Bill that is more odious than the one now before the House of Commons for debate. Bill C-133, an Act to amend the Supplementary Retirement Benefits Act, is not only misguided, it is immoral in every sense of the word. Seldom have we seen, even from this Government, such a blatant assault upon long established principles of fair play in management/labour relations. In this case, the Government is proposing to change unilaterally and retroactively pension arrangements for its employees, which it agreed to almost a decade ago and on which, since then, thousands of Canadians have planned their retirement. In one fell swoop, Mr. Speaker, those arrangements are to be changed in a way which will jeopardize the annual income of a sizeable proportion of individual Canadian pensioners, while effectively robbing a fund held in trust for them collectively.
In a nutshell, Bill C-133 seeks to undermine the indexing of the pensions of public employees, which are currently fully tied to the cost of living, by limiting increases to 6 per cent throughout 1983 and to 5 per cent in 1984, regardless of the inflation rate in those two years. Modifications to the legislation announced by the President of the Treasury Board (Mr. Gray) yesterday may well change the relevant percentages to
6.5	per cent and 5.5 per cent respectively, but the adverse impact on pensioners remains largely the same. Retired civil
servants, Armed Forces personnel, the RCMP and their survivors, among others, would be affected. The immediate impact, Mr. Speaker, would be to slash the real purchasing power of their pensions, thereby decreasing the standard of living of people who in many cases already live perilously close to the poverty line.
Other Hon. Members participating in this debate have detailed how the federal Public Service pension system works by demonstrating the injustice of the substantial changes contemplated by Bill C-133. Suffice it to say, for my part, the pensions are paid out of what could be described as a fund, which in effect is two funds. The main fund is the Public Service superannuation account. The second is the supplementary retirement benefits account. Each is covered by an Act of Parliament and attendant regulations and is backed by the resources of Canada itself. Every public employee contributes
6.5	per cent of his or her wages to the first account from which the basic pension is paid upon retirement. The individual also contributes 1 per cent of salary to the second fund which is set up to protect the purchasing power of the pension. That is a total of 7.5 per cent of salary thus contributed for a fully indexed pension. Since 1973, benefits in a given year have been hitched to the annual consumer price index of the previous year. Last year, for example, consumer prices rose 12.5 per cent. Therefore, pension benefits for 1982, the following year, increased correspondingly. By the same token, with inflation running at about 10.8 per cent in 1982, benefits for 1983 would ordinarily be hiked by that percentage. Bill C-133, however, proposes to limit any increase to 6 per cent.
The truth is that neither account is technically a fund in the sense that money is kept intact in a bank account, accumulating interest on a compound basis. But the money is, nonetheless, accounted for like a fund. Certainly, if all the money not paid out in pensions were kept in a bona fide fund to gather interest, instead of being used by the Government for its purposes, the two accounts taken together would generate enough income to pay for the full indexing of Public Service pensions. Indeed, the main account, notwithstanding the remarks of the President of the Treasury Board yesterday in his speech, now stands at something like $15 billion, equivalent to over $1.5 billion in interest annually. This is far more than enough to offset the $300 million by which the other account falls short each year in meeting the cost of indexing.
Last month, November, for example, the average annual pension paid to some 90,000 former contributors was about $8,100 annually. In addition, 32,500 individuals were paid an average of $3,200 in survivor benefits. The average annual pension paid as of November, 1982, was thus $6,900 per person, for a total annual cost of $746 million, or in that ballpark. In that context, then, pensioners have paid for and are continuing to pay for benefits which Bill C-133 now proposes to withdraw in part. While the Government proposes
December 7, 1982

to limit pension increases over the next two years to 6 per cent and 5 per cent, it does not intend to reduce the required contribution to the Pension Plan. So, current contributors will be paying more for less.
Sir, 1 sincerely hope the Government's six and five program, of which Bill C-133 is a part, will bring down inflation as is intended. On the whole, we on this side of the House support the principles and general objectives of the program. Any type of economic program from this Government is welcome after so long a period of inaction. But Bill C-133 is as immoral as it is self-defeating. It is one thing to impose the Government's six and five restraint program on, say, wages or prices in the public sector; it is an entirely different matter, however, to impose the same program retroactively and unilaterally on pensions to which the beneficiaries themselves contributed along with their employer. The rest of the six and five program, including partial indexing of Public Service wages, Family Allowances and the tax system itself, relates to Government budgetary revenue and expenditure accounts. The Government has therefore both the legal authority and the moral right to make changes in those areas, although I hasten to add that I personally found Bill C-124 repugnant and I went on public record as saying so.
By contrast, the imposition of limits on public employees' pensions is an altogether different matter. Affected is not the Government's fiscal position but, rather, a trust or pension account held by the Government for the benefit of a particular group of citizens. The indexing of Public Service pensions was not a gift by the federal Government to its employees, nor was it to be bartered from time to time in contract negotiations between the Government and the public sector unions. Neither was it to be altered at the whim of either side, depending on the mood or the fashion or the fad of the day. Public Service employees negotiated their pension benefits with their employer, the Government of Canada, with the full understanding by both parties-and I emphasize both parties-that any agreement was inviolable. For their part, the public employees have always viewed their pension agreement as a form of deferred remuneration for services rendered, or, expressed differently, as part of their pay package or compensation.
The public record, including Hansard reports of the relevant debate at the time, makes it clear that successive federal Governments have consistently taken the same position. Yet, boxed-in by a budgetary crisis of its own making, the present Government sees the public employees pension fund as an easy way out. It matters not to this Government that it is breaking faith with its employees in the process. The Government has long ago, Mr. Speaker, ceased to care about such principles as trust or due process or even old-fashioned honesty. As a columnist put it in a recent article in MacLean's magazine, this Government has been in power so long that it has begun to believe that whatever it does it has a right to do simply because of the fact that it has done it. He went on to say:
Because (the Liberal Party of Canada) does not steal money, does not stash graft away in unnumbered Swiss bank accounts, does not torture and does not openly bribe, it assumes that it is not corrupt. Corrupt in the Liberal mind applies only to money. But the real corruption is in the Liberal mind. The party is morally bankrupt.
Supplementary Retirement Benefits Act (No. 2)
Nowhere is that statement more true, Mr. Speaker, than in the Government's approach to its retired employees. 1 recommend, Sir, that every Member of this House take the time to read the excellent speech delivered in the House by the Hon. Member for Nepean-Carleton (Mr. Baker) on July 20, 1982, in debate on the Government's Supplementary Borrowing Authority. As he rightly pointed out, even at the height of the Great Depression in the 1930s, the R. B. Bennett government of the day, while reducing salaries of public servants by 10 per cent and withholding all annual increases, viewed as inviolate the existing pension arrangements for retired public employees. One wonders what the current Government considers inviolable, apart from its own divine right to cling to office at any cost to the Canadian public. If the Government will violate the rights and welfare of pensioners, Mr. Speaker, it is capable of violating anything.
The Government is doing much more than just denying a large group of Canadians full receipt of a benefit which they have, in the words of one maritimer, "bought and paid for". The Government is laying the groundwork for real economic hardship for many of these people.
I said a moment ago that the average full pension is only about $8,100 annually. Of course, and I would be the first to concede this, many recipients receive the basic old age pension as well, and some may have other income. But, given today's skyrocketing inflation, the total that most of them receive from all sources combined is no fortune, I assure you. In fact, by the definition of the Canadian Senate in its celebrated report on the subject of poverty, many retired public employees are certifiably poor. The Senate has stated that a two-person family earning less than $11,030 in 1980 lived in abject poverty. In my own province of Prince Edward Island there are 662 service annuitants and 234 others receiving survivor benefits. Their average gross employment pension is a mere $6,028.32 a year, or $502.36 a month. Like their counterparts in every other province, including the great province of Ontario and specifically the National Capital region,they now face the prospect of seeing their already limited income reduced each year in real dollar terms as inflation takes its cruel toll.
1 realize that public employees, active or retired, are not everybody's favourite group of people. Opinion polls have demonstrated that civil servants are currently out of favour with the public. Highly publicized strikes in certain sectors- notably the post office-have left a bitter taste. It does not matter that most labour disputes in the public sector are settled amicably and without strikes; the image of public employees is at an all-time low. True to form, the Government thinks it can reverse its plummeting fortunes coast to coast by flexing its muscles at the expense of public servants. Dr. Gallup and Mr. Goldfarb have told the Government that those people are unpopular. Consequently, the Government has decided to do battle with them in order to court public favour.

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That is exactly what Bill C-133 is all about. It is not law so much as a public relations job. After spending the country into bankruptcy over the last 14 years, the Government has suddenly chosen to make restraint the rallying cry in its fight to win back public support. People can see behind the facade of this feigned conversion. They are not easily duped. They can see the facade and duplicity for what they are. They recognize instinctively the essential unfairness of legislation like Bill C-133.
My riding of Hillsborough, which is in the capital city area of Prince Edward Island, contains many federal public employees, as well as provincial Government civil servants. I know a lot of them personally and others at least as acquaintances. My work as a Member of Parliament requires me to work hand in hand with these people and with their counterparts elsewhere in the Atlantic region, especially in regional head offices, and in Ottawa. My experience is that public employees are the most maligned group in society, no doubt in part because their own public relations leave a lot to be desired. They are commonly perceived as underworked, overpaid, and too plentiful for all the good they do. But the truth is, we in Canada have the best Public Service in the world, with the possible exception of Britain, from which ours has inherited much of its tradition of dedication and professionalism.
The extent to which the public takes the Public Service for granted is, in reality and paradoxically, a measure of how efficiently our public employees do their job-unobtrusively yet competently. By the same token, only when they are on strike do we sometimes realize how dependent we are on the services these people provide. Proportionately, Government harbours as many diligent and competent and qualified employees as can be found in any field in the country. I defy anyone to demonstrate otherwise.
Similarly, the machine-like efficiency typically associated with employees in large corporations in the private sector is no less out of whack with reality than the less favourable public image of public servants. I am convinced that just as the public wrongly perceives public servants as slackers, as underworked and overpaid and too plentiful, so also the public's perception of employees in the private sector, for different reasons, is wrong. I do not have the time on this occasion to delve into the issue, except to invite people who think otherwise to examine some of the literature in political science, in management studies and in sociology. Read the studies on North American corporate management that seriously throw into question the common assumption that private enterprise has a patent on competence. Some of the business giants most familiar to North Americans are, in fact, riddled with incompetents, from the lowest echelons to the million dollar-a-year chief executive officers. The Chrysler Corporation is a case in point.
By requiring public employees, including the retired, to bear the load of its restraint program, instead of including them in an over-all wage and price strategy, which would make more sense, the Government is both reflecting and contributing to the conventional myth that those people are responsible for the double digit inflation in the country. Nothing could be farther from the truth. The blame rests squarely with the political
mismanagers in the federal Cabinet, especially the Prime Minister (Mr. Trudeau), who has been calling the shots for the past 14 years. At the heart of the inflation problem, in particular, has been the Government's 14-year spending spree that has seen Government expenditures soar an incredible 630 per cent since the Prime Minister took office in 1968. The deficit of the federal Government this year is some $12 billion more than the total budget of the Government in the Prime Minister's first year in office.
The share of the total public debt of the country borne by each Canadian taxpayer, now amounts to $14,100, quite apart from their personal, individual debts. This year alone, the cost of servicing the public debt will be $700 for every man, woman and child in the country. Is it any wonder that the Government is now having to borrow money just to pay the interest on previous borrowings? Mr. Speaker, if you or I or any other Canadian conducted our personal finances the way the Government runs the country as a matter of course, we would have long since been forced into personal bankruptcy, or jail, or both.
Having increased its total spending this past year by some 20 per cent, having racked up a deficit of $24 billion in the current year alone-100 per cent higher than forecast as recently as seven months earlier-the Government now expects pensioners to settle for annual increases of no more than 6 and 5 per cent in the benefits which they themselves made possible through deductions in their paycheques when in the active work force.
A pension without built in protection against inflation is a prescription for poverty. Actuarial experts-and I do not pretend to be one-have made it abundantly clear that the average male retiring with a fixed income at age 65, with inflation raging at its current rate of 10 per cent per year, will have his real pension benefit slashed to one-quarter of its original value by the time he dies. A fully indexed pension is not a bonanza. It is not like winning the Irish sweepstakes. It is not like a Liberal appointment to the Senate. It is simply an assurance that a pensioner, struggling to make ends meet, will be able to purchase something close to the same basket of goods, through his or her retirement years. Is that too much to ask for someone who has served the country well over a long career? Surely a country as great, as wealthy and as inherently bountiful in its resources as Canada can do no less for its pensioners.
The concept of indexing has been allowed to become virtually a four letter word, especially when applied to public sector wages and pensions. The same thing is true with Family Allowances and other benefits which a civilized society should take for granted. Yet the very people who most vocally condemn the concept of indexing can and do in fact protect themselves in a similar, very analagous way against inflation. Business and professional people, for example, do so through
December 7, 1982

price, rate or fee increases. Employees, whether unionized or not, seek and usually gain wage increases which take inflation into account. But now the Government expects pensioners to accept something dangerously close to a freeze in their incomes at a time when inflation continues to cut in half the real buying power of the dollar every five years.
In my Province of Prince Edward Island, the price of home heating oil soared from 74.2 cents a gallon in 1979 when the Conservative Government was in office to $1.47 a gallon today. In my Province the price of electricity is the highest in the country. In the average household on P.E.I., it has gone from $33.84 a month to $53.76 a month, compared with only $12.15 a month in Calgary, in the same three-year period. Gasoline has leaped from $1.26 a gallon to $2.40 a gallon. Increases in prices of even locally-produced foodstuffs in the Province of Prince Edward Island-from eggs to fish to potatoes to fresh milk-have been stratospheric.
If current pensions are allowed to shrink in real value with each passing year, how are the people on Prince Edward Island, and other people across the country, to cope? Even the most optimistic independent analysts do not expect inflation to abate in the next two years to anything like the Pollyanna levels forecast by the Government.
The irony is that in a misguided effort to free up money for new job-creation programs, a commendable goal but misguided in execution, the Government may well be making the employment problem worse by its six and five program. Some retirees faced with deteriorating pensions are being forced back into the labour market merely to make ends meet. In the process, job opportunities which would otherwise go to younger and less experienced Canadians are being lost to them. This is why I say that, in the final analysis, the Government's six and five program is self-defeating and misguided.
Bill C-133, if passed, will rob the average retired public employee of $1,200 over the next two years, plunging many of them into real poverty. Some 12 Government Members of Parliament stated publicly that they intended to oppose the legislation. I hope that they will not view the miserly, stingy modifications to the Bill announced by the President of the Treasury Board on Tuesday as sufficient cause to reverse their position. I admire the courage which they have shown to date in opposing their own Government on the question. It is uncharacteristically courageous of them. Public sector employees and retirees in my riding, and in numerous other ridings in which there are sizeable Public Service populations, will watch anxiously as those Members of Parliament vote on every stage of the Bill. For my part I intend to join my Progressive Conservative colleagues in opposing this offensive, invidious legislation.
I urge other Hon. Members to do likewise. If we in the House of Commons, and Senators, all parliamentarians, will not fight for the rights of pensioners, who look to Parliament as their only line of defence against a callous and short-sighted Government, whose cause are we prepared to champion?
Supplementary Retirement Benefits Act (No. 2)


Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, it is a pleasure to participate in the debate this evening on Bill C-133. Basically I should like to speak on five short topics in relation to this Bill. My first point is to state that there is a general feeling that this particular piece of legislation on the part of the Government constitutes an outright theft, something along the lines of a lawyer dipping into trust funds held for the benefit of his clients.
My second point concerns the philosophy of the six and five program which the President of the Treasury Board (Mr. Gray) indicated was the underpinning and the rationale for this particular legislation.
My third point is perhaps to analyse some of the arguments put forward by the Liberal Government as a justification for the entire six and five program which led to the Bill before us and the series of Bills which have been before the House recently.
The fourth item with which I would like to deal concerns what 1 feel is the incredible position of the Conservative Party in doing an enormous sleight of hand trick in this House. The Tories back the six and five legislation. They defeat amendments which would exclude persons from the six and five program, and then the Tories turn around and harp continuously tonight on this position, in opposition to this Bill.
If Hon. Members of the Conservative Party who spoke tonight had in fact taken the 40 minutes to which they were entitled, the implementation of this Bill would have been delayed and certainly more Government Members would have had time to wrestle with their consciences and vote against the legislation.
The fifth point, with which I would like to deal very briefly, is what we in the NDP believe should be done. In addition to defeating this particular Bill the pension question is a very vital one, and this is a pension Bill before us this evening.
It was fairly interesting that, when the Bill was introduced by the President of the Treasury Board on December 6, he made a number of statements to justify the particular legislation. He said that the purpose of the six and five program was to show federal leadership. I would question the kind of leadership that Government is attempting to impose or show. The Government certainly wants economic recovery to come on the backs of working people. The Government has literally removed a right which we believe is a right in a free society- the right to bargain collectively for wages and working conditions. With a stroke of the pen the Government immediately dissolved this right of Public Servants. Further, the Government believes that the six and five program should be enforced on the backs of low and middle income families through the imposition of the capping of indexing of Family Allowances.
I have had constituents come forward lately to talk about soup kitchens. Soup kitchens are becoming a necessity in my riding. Some people regularly use soup kitchens as a source of nutrition. With the very bleak prospects in the forest industry and the economy on the West Coast of Canada, things such as soup kitchens are becoming a hard reality. At one point it was

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said that these soup kitchens should be more readily available. Another individual, a school teacher, pointed out that perhaps soup kitchens should be opened in the schools because children were showing up in his classroom who were not properly nourished or, for that matter, not properly clothed. This is the kind of attack the Government wants to execute against lower income families in this series of Bills.
The Bill before us attacks retired civil servants living on a pension income. It attacks the basic underpinning or the philosophy of most Canadians who believe that when one retires, one should retire with a decent pension income, and that that pension income should be protected from the ravages of inflation by an adequate indexing program. The President of the Treasury Board said that the federal Government wants to show leadership but it is doing it by using, as examples, people in our society who can least afford to be exposed to the kind of cutbacks and very negative, regressive action the Government has proposed. The President of the Treasury Board made a further statement and said that this is just one of the economic measures contained in the June budget, that the government wants to use this particular program against people who have security and jobs and that it feels that by dissolving their bargaining rights, by capping their salaries and refusing them the right to bargain effectively, this will be an economic measure which will lead to recovery in the economy. I would suggest that this is an incredible stunt and that the imposition of the six and five program on the salaries of public servants, on families through Family Allowances, and on pensioners has nothing to do with economic recovery. It will not put one logger back to work in British Columbia. It will not put one of the thousands and thousands of people laid off by MacMillan Bloedel back to work, and it will not put workers back to work in the shipyards of Canada. Only positive government action in our forestry industry and in our manufacturing and shipbuilding sectors will ever put people back to work or turn the economy around. Mark my words, Mr. Speaker. There has not been one positive act by the Liberal Government since the inception of the Thirty-second Parliament which would do anything toward putting the economy on the road to recovery.
Certainly, the question at hand concerns the six and five program. If it has nothing to do with recovery, what is its purpose? The purpose is simply to create a facade of action which, in reality, will create division in our society. The Liberal Party and the Liberal Government are held in such disfavour in this country that I do not think that after February 18, 1985, we will be worried about Liberals for a long time to come. However, in the impending two years, they have a serious problem, as do the people of Canada.
The Government was quick to perceive that the imposition of the six and five program would certainly turn the attention of many people away from the inadequacies of the Government and its lack of sound economic policies, and would direct attention toward an old kicking post, the Public Service. The
Public Service has been a public kicking post for too long, and one for both Parties Liberal and Conservative.
Therefore, we essentially have a situation in which the Liberal Government, strictly for the purpose of political gain and not for economic recovery, decided to impose a six and five solution. Management is now fighting labour, and people in Canada who are laid off are fighting with the public servants. The Government has essentially created the same kind of rift in our economy as it created when it imposed the wage and price controls in 1975 or, I should say, the wage controls. It has nothing to do with economic recovery, but it has everything to do with political deception and an attempt to increase its own position from the one of very low esteem in which it is currently held in the public opinion polls. Mark my words again, Mr. Speaker, that should the six and five program lead to management and labour unrest, it will certainly lead to a reduction in productivity and further spiralling down of the Canadian economy. This could turn out, in fact, to be some of the most destructive legislation produced by this Parliament since 1975.


Mr. Kristiansen:: Cut off Tiny Tim's crutches next.


Raymond John Skelly: It is a very serious situation, but we must try to remember that this particular legislation is probably not the direct fault of the President of the Treasury Board. I think that in some former incarnation he actually had some very interesting views on the economy, before he was muzzled and before he did not resign his seat for certain commitments he made while in Opposition. Today, he is out justifying the six and five legislation of a predecessor to his position. It shows the intent and the determination of the Government to impose harsh conditions upon people in our economy who are least able to afford it, pensioners who have retired from the Civil Service, those who are depending on Old Age Security, and certainly those receiving Family Allowances.
I think that most Members of Parliament, most civil servants and most people in the economy today know that the imposition of the six and five solution, the removal of funds desperately needed by pensioners, is something which will certainly be dealt with in the next election. It will be an election issue. It is interesting to consider what the alternatives for the voters in that next election will be. When employed and retired civil servants come to vote in the next federal election there will certainly be a question in their minds. Will they support the Liberal Party and the Liberal Government which removed their right to bargain? Will they support that Government which removed the indexing on their pensions, on Old Age Security and on Family Allowances, or will they vote for the Official Opposition? It is a very curious situation. The decisions must be made by 1985, but a majority Government, whether it has been Liberal or Conservative in the past, has not served the interests of the majority of Canadians, least of all Civil Servants. What people are facing right now is a disastrous Government policy, but I am certain that they must very closely consider what the Official Opposition has done.


Mr. Lewis:: Oh, you have been doing well until now, so do not spoil it.
December 7, 1982


Raymond John Skelly: I notice that the Hon. Member for Nepean-Carleton (Mr. Baker) who ied off the debate, made a great fuss over the entire issue. I listened with great interest to his speech on this particular topic. He stood, full of sound and fury, blaming the Liberals for this Bill which would harm retired civil servants. He blamed the Government for the six and five legislation and its negative impact on families depending on Family Allowance. He went on and on, blaming Liberals and everyone he could find, but he never stated for the record what the Conservative Party would do. Not one time have the Conservatives put forward a constructive alternative to the very destructive programs of the Liberal Party.


Philip Derek Lewis: Just wait.


Raymond John Skelly: It is funny to hear the people to my right hollering, "Just wait, just wait". It is interesting to find that when it came to the six and five program, they supported its philosophy very clearly. The Hon. Member for Nepean-Carleton and other Hon. Members in the Official Opposition in the House tonight supported the six and five program. They knew full well what they were doing when they supported it. As a matter of fact, they called for speedy delivery of the rest of the legislation to implement that program. They wanted to get the legislation before the House so they could vote on it and get it in place, and that is part of the public record.
It is an incredible act of hypocrisy for Hon. Members of that party to stand up in the House tonight and say, as they are saying, allegedly in support of the Public Service of Canada, the retired members of the Civil Service and families who are having their indexing cut on their Family Allowances. It was absolutely astounding to hear those same people demanding that this legislation be brought before the House so they could deal with it quickly. Tonight they are speaking in short ten minute or 20 minute jabs to deal with it quickly. However, if they were to use the full time allocated to them to make their points, then there would be more Government Members who would consider opposing the legislation.
When we voted on the original legislation to implement the six and five program. Bill C-124, the Conservatives voted with the Liberals time after time. As a matter of fact, they voted against an amendment put forward by our Party which would exclude this six and five legislation from applying to the pensions of retired civil servants. The Conservatives voted against that amendment. They demanded that this series of Bills be brought forward quickly so they could deal with it expeditiously. What we have tonight, 1 guess, is the full circle, where the Conservatives are trying to tell the pensioners of Canada that they are supporting them, when in fact their actions very clearly eroded the position of those pensioners. The Conservative position was recorded in vote 245 when 26 NDP Members supported the protecting of pensions and excluding them from the six and five legislation, and the Liberals and Conservatives together voted against that motion.
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It is going to be an interesting act of hypocrisy when the Tories come forward and vote as they say they are going to, against this legislation. I will bet money that there are not enough Conservatives in this House when this vote comes to defeat the Liberals, even if 12 Liberal Members vote against this Bill. The Assistant Conservative House Leader is giggling at that prospect.


Philip Derek Lewis: At that idiot.


Raymond John Skelly: But I recall that on numerous other occasions they have failed to show up to vote when there has been an opportunity to defeat the Government. On August 3, for example 41 Conservative Members were absent from the House of Commons; 27 Liberals were absent and five voted against their Party. That is a very clear example of the Conservatives lack of-I would say-integrity on this particular issue, that they had a very clear opportunity to defeat the Government, and yet failed to show up to vote.
That is not the only opportunity that the Conservatives had to defeat the Government. On December 2 the same thing occurred; and on December 3. As astounding as it seems, when we deal with this legislation there will not be enough Conservatives in this House to defeat a Liberal Government which does not have enough Members in this House to carry that legislation.
So the incredible hypocrisy of the Conservative Party on this and many other issues in this Parliament is an extremely serious issue.


Some Hon. Members:: Oh, oh!


Raymond John Skelly: It is a problem that we cannot obtain-


Mr. Deputy Speaker:: Order, please. The Hon. Member for Comox-Powell River has the floor.


Philip Derek Lewis: He should do something constructive with it.


Raymond John Skelly: I wish to thank the Assistant House Leader of the Conservatives for his advice. I am going to do something constructive with it namely, to elaborate on the hypocrisy of the Conservative Party.
One of the big lies that the Tories have developed in Canada has been the theory that we in the NDP prop up that mess over there, that Liberal Government. Listen to them ranting and raving; but, travelling the country, the Leader of their Party suggests that it is us, who keep the Liberals in power, when in fact since the commencement of the Thirty-second Parliament, in 1980, on 69 occasions the Conservative Party voted with the Liberals on critical issues in this House of Commons, on amendments and procedures to protect consumers in the banking industry in this country. The Tories aided the Liberals to promote the give-aways and tax grants to the oil companies. On these kinds of issues, the Conservatives and the Liberals are locked together.


An Hon. Member:: And on six and five.

December 7, 1982
Supplementary Retirement Benefits Act (No. 2)


Raymond John Skelly: And on six and five, 13 times, the Liberals and Tories voted together, so we know where this Conservative Party is coming from. They are very upset this evening because it has been opened up to the light of day where these people in the Conservative Party are.
We know what kind of Government we have across the floor. We know ultimately what is going to happen to them by February 18, 1985, but it is time to talk about the electoral choices that people will have to make. One of the most serious mistakes that could be made in this country is on the six and five legislation, and the Bill before us tonight. The electorate has to make some judgment on what the Official Opposition has put on the record in relation to this Bill? According to the Tories it is everybody's fault. It is the Liberals' fault, but we have not had one constructive alternative from the Official Opposition, Mr. Speaker.
The remarks made by the Lion. Member for Nepean-Carleton are interesting. 1 must admit that within that particular caucus he is one of the real gentlemen, and I would suggest that he is probably constrained by the more exuberant right wing Members of that caucus who wish to drive the hammer down on the middle and lower income wage earners in this country. It is interesting, if we pursue the same theme, that they have refused to put forward a policy in this House of Commons, an alternative policy, on any of the legislation before us, except to support six and five. The Tory position since February, 1980, in this House has been summed up by the former Conservative finance Minister when he said, coming out of the Budget speech, "Well, the Liberals are a Government arift, and the Government has no answers". When asked what he would do, he said "If we told you what we would do, the people would never elect us". Ultimately, Mr. Speaker, that is the situation here.
If the Conservative Party told the people of Canada what they were prepared to do, they would never be elected and, ultimately, Mr. Speaker, they do not want to move another embassy to Jerusalem; they do not want to offer to destroy another Petro-Canada; they do not want to offer to get rid of
60,000	civil servants over a three year period, and that is exactly where they are today. The Tory Party is a bad alternative.


Mr. Deputy Speaker:: The Member for Moose Jaw rises on a point of order.


Mr. Neil:: Mr. Speaker, I wonder what the relevancy of this is. The comments being made by the Hon. Member have nothing whatsoever to do with the debate.


Miss Jewett:: It is beginning to hurt. They do not like the truth.


Mr. Deputy Speaker:: The Hon. Member's point is well taken. Would the Member for Comox-Powell River please take note.


Raymond John Skelly: Thank you, Mr. Speaker. The behaviour of the Official Opposition must be judged in the context of their full behaviour in the thirty-second Parliament, since 1980, to show that their performance tonight on this particular Bill is consistent over time. The electorate, if they place their trust in the Conservative Party to relieve them from the hardship and the dismal record of the Government opposite, then unfortunately they will be looking at five hard years ahead.
That brings us forward into the question of where we should be on this particular issue. It is interesting that clearly the Liberal Party, since the inception of this particular Parliament, has refused to address the needs of pensioners. The miserable amount of money that was put forward to boost the base rate of those pensioners in 1980 was extremely inadequate. The other interesting situation is that the Conservative Party has never put forward an alternative for pensioners.


Arthur Jacob (Jake) Epp: And you do not have one.


Raymond John Skelly: There is no doubt that our Party has placed firmly on the record a policy on pensions. It is a right, not a privilege, for every citizen in Canada to have a fair pension; every senior citizen who retires has a right to an income above the poverty line. They have a right to expect fair retirement income. It is basically a question of, as the gentleman opposite said, fair play in our society.
I notice, Mr. Speaker, that my time has not expired and yet it is ten o'clock, so with your permission I will take my remaining time when the debate resumes, and call it ten o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, on December 2 I put the following question to the Acting Prime Minister:
Last month the United States announced a Blended Credit Program, which is a new export program for subsidizing the exportation of wheat from that country. It is worth about $1.5 billion over the next three years, and is in contradiction to the position which the U.S. took at GATT. Has the Government or the Prime Minister petitioned the United States asking them to withdraw that very destructive program? If they have, and the answer is no,, can he assure us there will be a similar program for Canadian farmers so we do not lose our world markets?
1 asked that question because 1 believe the American program that was announced a few days ago could be potentially very destructive for the export of Canadian grain around the world. The reason is that the program is worth SI.5 billion, to be spent over three years. They have announced that during
December 7, 1982

the first year, 1983, they want to spend around $500 million and they hope that expenditure will increase the sale of grain in the United States by some $1 billion.
What will that do? First, I maintain that it may take away a number of markets from Canadians. Some of the countries the Americans will be subsidizing with regard to credit and interest rates are customers of Canadian grain. Indeed, some may be major customers. When a country is looking at a grain contract worth millions of dollars and the United States announces it will subsidize the interest rate by 2, 3 or 4 per cent, if Canada cannot afford to subsidize the interest rate, it is only natural and normal that that country will look to the United States. That could mean the loss of thousands of jobs in this country.
The second thing that concerns me is that if the Americans begin to subsidize the export of grain, the price of grain, particularly wheat which is already depressed, may drop even lower. Even before this program was announced, the projection for 1983 was that the price of wheat would fall by about 5 per cent. With this program, and because of a grain surplus in the United States, it is very possible that the price will fall even more than the dismal forecast for 1983.
This is a very important issue to Western Canada because agriculture is so important to the western Canadian economy. It is a very important issue to Canada because farming and agriculture is still number one. It is a basic industry. What the farmer wants is fairness. He does not want any special status or deal. Farmers expect their Government to go to the United States and say to President Reagan that the program he has introduced is unfair, dangerous and protectionist. Also, it could start a massive trade war. We had trade wars in the thirties and we could have another one. The people who will get hurt will be the farmers of Canada.
I would hope today, five days after raising the question on Thursday, that the Government has made official representation to United States officials asking that they cancel this very destructive and dangerous program which they commenced in their country.
Most people do not realize the importance of agriculture. Last year, for example, food trade had a net surplus for our country of $3.2 billion. There was $9.5 billion worth of food exports or expected exports for 1982. Export sales accounted for about 50 per cent of farm income. That is how important and vital this program is to Canadian farmers.
I was surprised to see the United States announce the program because at the recent GATT meeting in Geneva, it took a very strong position against the growing protectionism of subsidies in the European Common Market, against the closed market of the Japanese and many other such practices around the world. When U.S. representatives came back from Geneva, they announced a similar program of their own. I want to refer to what Agriculture Secretary Block said on October 20, and I quote:
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The program will be used in those markets where we are assured of the greatest return. We also will pay special attention to the opportunity to achieve long-term sales gains in the markets that we select. Long-term expansion in agricultural trade under normal commercial terms is a primary goal of this administration.
They will subsidize the interest rate and they will subsidize credit to try to undercut other grain exporters, including Canada, and that is not fair and it is not just.
Regarding the second part of my question, Mr. Speaker, if this fails and if we cannot persuade the Americans to play fair ball, then the federal Government, unfortunately, must come up with a similar program for Canadian farmers. If it does not, Canadian farmers in Canada will be hurt, not just in the short term but in the long term as well. We must do that because 30 per cent of our GNP is tied to trade and Canada's share of world trade is falling very rapidly. Back in 1970 it was 5.9 per cent of world trade. In 1979 it was 3.9 per cent of world trade. With a program like the blended credit program in the United States, that is now in danger of falling even further.
I plead with the Government of Canada, therefore, to make strong representationsto President Reagan in the United States in an effort to end this destructive program, to end what could be a serious escalation of a trade war which is potentially the most dangerous since the 1930s. But if we cannot persuade them, then we cannot live in an "Alice in Wonderland" world, leaving our farmers totally and absolutely unprotected.
[ Translation]


Mr. Jean Lapierre (Parliamentary Secretary to Deputy Prime Minister and Secretary of State for External Affairs):: Mr. Speaker, first of all, I would like to thank the Hon. Member for Yorkton-Melville (Mr. Nystrom) for his speech.

He says that this issue is very important. The Canadian Government agrees with him and is very disturbed that the U.S. government has chosen to reply to the current supply and demand situation in this manner. There is no other word than the one he used to say that we find also the whole program unfair, dangerous, a bit of protectionism, and it could start a trade war. That is why we are very concerned about the farmers of Canada and what they might suffer from that kind of a program.
I believe the Canadian authorities are very concerned that this initiative may put other exporters in a position where they have no choice but to introduce similar programs. The result, unfortunately for producers, is likely to be lower returns. This is particularly important under the current depressed price situation prevailing in world agricultural markets.
Canada has sought to contain the use of concessional financing as a competitive instrument in international trade, and the Hon. Member referred to GATT. We were impressing on the United States that we should not have that type of program and we should bring agriculture under international discipline. Unfortunately, a couple of days later, we find there

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is a little double talk on their behalf, and we are very concerned about that. Where 1 do not agree with the Hon. Member is that if they do not follow what we are asking them to do, we should embark also on a trade war and provoke the installation of protectionism. 1 think we would then be doing exactly what we are blaming them for doing. 1 think the Hon. Member is right. We have shown our opposition to the Americans. We have communicated our concerns to the U.S. administration, and we hope that they will react positively to our requests.


SHIPBULDING-MEETING WITH INDUSTRY REPRESENTATIVES IN NEW BRUNSWICK. (B) GOVERNMENT POLICY REVIEW
Robert Alfred Corbett: Mr. Speaker, over the last few weeks 1 have been attempting to extract from the Government the long overdue shipbuilding policy which has been under wraps for some reason or other. It has refused to divulge it. I can tell you, Mr. Speaker, there are a good many workers in this country who are rather resentful of the fact that the Government is reluctant to release the facts of this shipbuilding review policy. Indeed, it is affecting their very livelihoods and the futures of their families.
I think it is important to recognize that the shipbuilding industry is critical in the Maritimes. We have shipbuilding industries located on our Pacific and Atlantic coasts, as well as the St. Lawrence. These people are in dire need. They are becoming concerned that the Government is not addressing itself to their particular needs. They are aware that the Government has been in possession of a shipbubilding policy for the last two and a half years, and during that period of time they have seen at least $1.1 billion leave this country for foreign countries which are constructing ships that could have been constructed here. That is distressing to them.
1 was astounded to hear the Hon. Member for Comox-Powell River (Mr. Skelly) tell the House this evening that it was incredible hypocrisy for my party to be expounding a philosophy and theory in support of the Government, when he knows full well that his party is entirely responsible for the fact that this Government is in power today. That same Member has stood up in the House and shed crocodile tears on behalf of the workers in the shipyards of this nation knowing full well that his party is totally responsible for the fact that those people are in power and directing the policies of the shipbuilding industry.
There is information available, Mr. Speaker, that the Department of Fisheries is considering the purchase of trawlers from Europe for the fishery off New Brunswick and Nova Scotia. That is very distressing news to the workers in the shipyards of this nation generally, let alone those in Atlantic Canada. The news that the same department is anticipating the purchase of a freezer trawler in Japan for conversion to a research vessel is extremely distressing for shipyard workers across this nation.
Last March, Mr. Speaker, there were 18,000 workers involved in shipbuilding across this nation, and today there are substantially less. Those people are not going to have a very pleasant Christmas this year. Many of those individuals have
been thrown out of work because of the inactivity and inability of this Government in addressing itself to the industry's difficulties.
Why is it that British Petroleum is going to be purchased at a price in excess of $600 million, Mr. Speaker? This will not get one single job. But that is something that we should expect of this Government. Why is it that Dome Petroleum, which the Government is bailing out to the tune of millions of dollars, will purchase submersible rigs from foreign countries when they could be built in Canada?
The frustration that 1 and many of my fellow citizens in Atlantic Canada experience tonight is caused by the fact that, despite the insistence of this Party that the Government come forth with this shipbuilding policy review which has been in its hands and has been passed through Cabinet, there is no sign of it. 1 defy the Government to refute that statement. For two and a half years while people in this nation have been suffering, we have been exporting millions of dollars worth of work, but those problems will not be addressed this evening by the Parliamentary Secretary in his reply to the points 1 have raised. It is absolutely incredible that the Government can have so little respect for the plight of the workers of this nation.


Mr. Jim Peterson (Parliamentary Secretary to Minister of State for Economic Development and Minister of State for Science and Technology):: On the contrary, Mr. Speaker, I am very pleased to be able to rise tonight and respond to the Hon. Member for Fundy-Royal (Mr. Corbett). If he thinks that this country will be able to produce every type of ship and every type of boat that Canadians need, he is wrong. That is unfortunate, but as a country we will have to specialize and find needs in the international market which we can satisfy. This does not mean that we have achieved our full potential in the shipbuilding industry, but I do not despair to the extent that the Hon. Member for Fundy-Royal does.
On November 22, the Minister of State for Economic Development (Mr. Johnston) initiated an intensive round of negotiations on economic and regional development issues. He was in the Province of New Brunswick and met with Premier Hatfield who voiced his support for the program of reorganization, which the Minister has undertaken. He also met with union and management in Saint John. It was reported that those discussions were extremely frank and interesting.
The Saint John Shipbuilding and Drydock Company is an integral and, 1 believe, a very proud part of Canada's shipbuilding heritage. We should talk about some of the successes we have had instead of badmouthing Canadian industry all the time. This company has an order for a $100 million semisubmersible drilling rig that will create 1,500 person years of employment. It has a contract for the design of the new type 1,100 icebreakers. These ships are needed to replace the older ships. It has a $1.6 million contract to refit the Coast Guard's Louis St. Laurent. A federal contribution of more than $12 million was allocated to lengthen and renovate the drydock.
December 7, 1982

Saint John has been awarded a contract worth $39.4 million regarding the Canadian patrol frigate contract definition phase of the program. There is a $2.6 billion contract for the construction of six new frigates which is being bidded on by Saint John and its competitor Scan Marine. This contract alone has the potential of providing 30,000 person-years of employment or over 7,000 person-years of shipyard labour over a ten-year period.
There is room for improvement, but I would refer the Hon. Member to the Minister's comment that in the very near future we will have an announcement to make on this very important topic.


NATIONAL PARKS-BANFF LAND EXCHANGE-REQUEST THAT HOUSING PERMIT BE CANCELLED. (B) REQUEST FOR MINISTER'S RESIGNATION
Gordon Edward Taylor: Mr. Speaker, tonight we will discuss the desecration of a beautiful park in Banff, a desecration which was requested by Parks Canada, says the Minister.
The facts of the case are as follows. First, the Minister of the Environment (Mr. Roberts), in charge of National Parks, issued a permit for the construction of a 76-unit complex in the only treed park in the townsite of Banff which is located in Banff National Park. The Minister alleged that Parks Canada issued the permit and pretended that he had nothing to do with it. But, in a representative democracy under our form of Government, the Minister must take responsibility for the actions of his Department. If indeed the Minister had nothing to do with the issuance of the permit, why did he not freeze the project and fully investigate the entire matter when it was raised in the House? That is what any other government or any responsible government would have done.
Second, the Minister and/or Parks Canada did not notify the people of the area that a 76-unit complex was to be built in their park. In any town or village, even the smallest village in Alberta, before authorizing a public work in any area the council notifies the people of the area. They are given an opportunity to comment. They are told that an apartment building or whatever is being planned, and they are asked for comment. Parks Canada did not do this. The Minister well knows that this was kept secret for a period of months, and that the only way the people found out was from a leak published in the Crag and Canyon. Then the people knew, but not until then.
Third, the Minister justified the swap of land by saying that Banff needs affordable accommodation. Banff needs affordable accommodation for the workers in Banff, but the Minister secured no guarantee that accommodation in the 76-unit complex would be affordable. Now the people of the area have been advised by the company that the accommodation will be as affordable as possible, and rates like $500 to $800 are being suggested. Rates like $500, $600 or $800 per month will not be good enough. Such rates are not affordable for people who make only $800 to $1,200 per month. But the Minister secured
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no guarantee in regard to the rates, and now the company will charge all the market will bear.
Fourth, the land swap or the park was valued by Parks Canada at $1,368,000 for five lots which I consider to be worth about $600,000. The Minister claims they are worth $900,000. Taking the Minister's own figure, this leaves a difference of over $400,000 in favour of Buchanan and company. In other words, the Buchanan and company lots could accommodate at the very best 20 units, while the land given to the company by Parks Canada will accommodate 76 units. Is there any company in Canada that would not jump at an offer like that? What is more, the whole deal was done by negotiations, with no public tender and no auction.
Fifth, the Minister did not refer the deal to the Treasury Board. The Minister apparently was taken aback by the refusal of Treasury Board in December 1981, and was not taking any more chances in getting another refusal, particularly for a deal which the Minister alleges he knew nothing about.
Sixth, the Minister did not refer the project to the Federal Environmental Assessment Review Office, FEARO.
In conclusion, as I said to the Minister in Committee the other day, the deal was done under the table and he knows it. The Minister did not answer. As the development officer of Parks Canada in Banff said after he resigned, "The deal smells to high heaven". I beseech the Minister to save the park, call off the company, listen to the views of people expressed in the press from all parts of Canada, and build the project some other place in Banff; save the park.


James Scott (Jim) Peterson: Mr. Speaker, the Hon. Member for Bow River (Mr. Taylor) is a first-rate hockey player. Again tonight we have seen an example of the Opposition skating around the true issues which underlie the matter before us.
There have been many allegations in the House over the past few days regarding the land exchange in Banff National Park. Much of the information given by Hon. Members opposite has been mistaken, and questions have often been phrased in a manner of insinuation rather than on a clear, factual foundation. I should like to cite a number of examples of what I have just claimed.
First, the Hon. Member said that we should not have allowed a beautiful park to have been destroyed. What is this park? This is an area which has been zoned R3. This has been a matter of public record since 1972. It was publicized in 1972 and again in 1980. Therefore, this development can really be considered as being a fulfilment of the zoning purpose for that property.
There is another misconception, the second one. The Hon. Member stated that the swap, the exchanged property, should have been subject to public tender. In this particular instance a public tender would not have been possible since a land

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Adjournment Motion
exchange was at the heart of the proposal. An exchange was suggested by Parks Canada officials because of their wish to avoid having higher density development on the original land held by the developer.


Mr. Kempling:: Garbage.


James Scott (Jim) Peterson: Third, the Hon. Member has said that no environmental assessment was done. With respect, that is not true. An assessment was conducted in December, 1981 and certain of the resulting proposals and recommendations were incorporated in the conditions attaching to the building permit.
Fourth, it has been alleged that the matter was kept secret for two years before people found out about it, at the last moment. Quite apart from the fact that the zoning has been a matter of public knowledge for ten years, we have the minutes of the Banff Advisory Council, which are a matter of public record, which show repeated reference to the progress of this development proposal. The charge of secrecy is therefore unwarranted.
The fifth charge is that the permit was hastily issued. The permit was not rushed. It was not issued until the developer
had fulfilled all the requirements which are normal under the circumstances. This developer was treated no differently from any other. I would like to say, as the Minister has repeatedly stated in the House, that the approval process in this case followed its normal course and Parks Canada officials were satisfied that the development, which will provide badly needed housing, meets the interests of Parks Canada and the residents of Banff.
This has not been a battle of bulldozers and chain saws against the ecology and the people. It has been a matter seized upon for the narrow purpose of attempting to exacerbate partisan emotion and to make petty political gain.


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

Wednesday, December 8, 1982