1982-07-06

ROUTINE PROCEEDINGS


Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, the riding of Timiskaming in northern Ontario has been without representation in the House of Commons for six months since the tragic accidental death of Bruce Lonsdale. Therefore I move, seconded by the hon. member for Prince Edward-Hastings (Mr. Ellis):
That the Prime Minister set a date immediately and call a bye-election so the people of Timiskaming can have a Member of Parliament to represent them.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


BILINGUALISM
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, recently the hon. member for York East (Mr. Collenette) was quoted as saying that Canadians, particularly in the Toronto area, have a cry-baby attitude with regard to the recession and recent budgets. What the hon. member and his colleagues fail to understand is that, if Canadians are crying, they are shedding tears of rage and frustration caused, for example, by such actions as sending the likes of Ed Clark of the Department of Energy, Mines and Resources to Paris on a year's sabbatical, and Ms. Janet Smith of the Privy Council Office to the south of France for four months to study French, both at the expense of the taxpayer, at a time when the government is cutting the incomes of old age pensioners. Therefore I move, seconded by the hon. member for Bow River (Mr. Taylor):
That the government start listening to what Canadians are really saying and cut wasteful and extravagant spending such as that mentioned in the examples above.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FITNESS AND AMATEUR SPORT
Hon. Bud Cullen (Sarnia-Lambton):: Madam Speaker, 1 rise under the provisions of Standing Order 43. This week world class athletes will be competing in Sarnia. The Ontario Games for the Physically Disabled will commence July 8. I move, seconded by the hon. member for Don Valley East (Mr. Smith) and, I am sure, by the hon. member for Brandon-Souris (Mr. Dinsdale) and the hon. member for Hamilton Mountain (Mr. Deans):
That Madam Speaker be directed by this House to forward congratulations to all participating athletes and organizers of this splendid event.


Some hon. Members:: Hear, hear!


Madam Speaker:: The House may want to applaud the motion, but I cannot put it to the House.


PETRO-CANADA LOAN GUARANTEE TO DOME PETROLEUM-MOTION UNDER S.O. 43
Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, I too rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas Dome Petroleum has massive debts, which are reported to be up to $7.7 billion, and seems to be selling off assets even in Canada, including ships-one of them from Davie Shipbuilding in Quebec-and whereas it has been suggested that a large Calgary law firm has prepared a bankruptcy proposal for presentation to the federal government, which has probably already been presented, and whereas the federal government has just guaranteed a $100 million loan through Petro-Canada for Dome Petroleum, I move, seconded by the hon. member for Beaches (Mr. Young):

July 6, 1982
That this House instructs the government to make public any bankruptcy or bail-out proposals put to it by Dome Petroleum and reminds the government that it is not the objective of Petro-Canada-at least that the Canadian people can see-to guarantee loans to private companies and, finally, that if there is to be a bail-out provision for Dome Petroleum, the Canadian people, through Petro-Canada, get equity in the company.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


DOMINION DAY
Mr. Doug Neil (Moose Jaw):: Madam Speaker, on Thursday, July 1, Dominion Day, residents of the village of Belle Plaine, in the constituency of Moose Jaw, handed me a $1,250 Government of Canada cheque which they had received to celebrate Dominion Day and asked me to deliver the cheque and a letter to the Prime Minister (Mr. Trudeau), which I intend to do later this afternoon, asking for the government's resignation. In view of the serious concern expressed by the citizens of Belle Plaine with respect to the budgetary deficit of almost $20 billion, and the failure of this government to exercise fiscal restraint, I move, seconded by the hon. member for Assiniboia (Mr. Gustafson):
That the government immediately cancel all give-away programs, work toward a balanced budget and build up a feeling of optimism and confidence in our country so it will not be necessary to bribe citizens to celebrate Canada's birthday in future years.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. Len Gustafson (Assiniboia):: Madam Speaker, I rise under the provisions of Standing Order 43. As a result of the Devine PC government recently elected in Saskatchewan, the consumers of Saskatchewan now enjoy the cheapest gasoline prices in Canada. I move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That the Minister of Finance take a positive lead from the Saskatchewan government and begin to reduce non-productive taxation of the consumers of Canada which, in turn, would stimulate the sagging economy of this country.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


VETERANS AFFAIRS
Mr. Joe Reid (St. Catharines):: Madam Speaker, 170 Canadians were among the over 700 Allied airmen who suffered severe burns during World War II and who did thereafter volunteer their assistance and co-operation on a continuing basis to the study of burn treatment methods and techniques. Forty of those 170 Canadians are to be honoured today and tomorrow in Calgary at a special reunion of that Canadian Wing of what is now called the Guinea Pig Club. I therefore move, seconded by the hon. member for London-Middlesex (Mr. Bloomfield):
That this House join in the tribute honouring those 40 veteran airmen and commend them for their unselfish dedication in the interest of their country and medical science.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE PRESS
Mr. Stanley Hudecki (Hamilton West):: Madam Speaker, 1 move the following motion under the provisions of Standing Order 43, seconded by the hon. member for Scarborough West (Mr. Weatherhead):
That the attention of the print media in Canada be directed to the confidence building measures taken by a Canadian magazine called "Today" in publishing 115 best things about Canada judged by world standards, about which Canadians can boast. Such positive factual information is long overdue in order to balance the indifferent reporting so commonly practised.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
July 6, 1982


PUBLIC SERVICE
Mr. David Orlikow (Winnipeg North):: Madam Speaker, I should like to move a motion under the provisions of Standing Order 43. Recently the Minister of Labour circulated employers across Canada urging them to eliminate overtime for their employees in order to share all the available work and so reduce unemployment. At the same time as the Minister of Labour was making this appeal, Revenue Canada was hiring temporary employees who were told that they would only be employed for 18 weeks even if they had to work overtime to finish their work. The only possible purpose for such a directive was to prevent these employees from qualifying for the unemployment insurance benefits they would be entitled to if they had worked for 20 weeks. I move, seconded by the hon. member for Winnipeg-Birds Hill (Mr. Blaikie):
That the Minister of National Revenue be instructed to direct his department to rescind that very unfair decision which is so detrimental to the rights of the employees hired to process income tax returns.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


UNITED STATES PROPOSAL TO LOWER EXPORT PRICES-MOTION UNDER S O. 43
Mr. Jack Murta (Lisgar):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. There is a threat of a grain price war if the United States government goes ahead with its export credit buy-down program that would subsidize commercial credit rates by up to four percentage points. This move would have, as its ultimate effect, the lowering of grain prices for all grain exporting countries. I therefore move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That Canada communicate its concerns at once to the United States Department of Agriculture and that Canada, in conjunction with other grain exporting countries, impress upon the U.S. administration that a lowering of grain prices will not necessarily sell more grain but will only sell grain at lower prices, causing hardships for producers in all exporting countries.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ROYAL FAMILY
Mr. Gus Mitges (Grey-Simcoe):: Madam Speaker, according to a recent media report, as Canada's official gift to Britain on the birth of the Royal baby, Prince William, the Government of Canada commissioned a distinctly Canadian gift, a sculpture of an Indian woman noted for her devotion to motherhood. However, for unknown reasons, this gift was commissioned not from a Canadian artist but one from Trenton, New Jersey, in the United States. Therefore I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That the government make sure that preference is given to Canadian talent and Canadian expertise when such decisions are made in the future.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. G. M. Gurbin (Bruce-Grey):: Madam Speaker, I rise under the provisions of Standing Order 43. Forty-seven per cent of Canada's total petroleum consumption is in the transportation sector, and 20 per cent of Canada's total petroleum consumption occurs within urban boundaries. Reasonable and significant reduction in petroleum consumption can be achieved through proper urban public transit. The Urban Transportation Assistance Program terminates next year, and if discontinued will seriously affect the ability of provinces and municipalities to provide suitable mobility for their citizens, as well as failing to take advantage of the possible decreases in need for imported oil. I therefore move, seconded by the hon. member for Peace River (Mr. Cooper):
That the Minister of Transport and the Minister of Energy, Mines and Resources ensure that the Urban Transportation Assistance Program be continued and strengthened to benefit Canadians who live in urban areas, to benefit the Canadian economy, and to benefit energy self-sufficiency.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

July 6, 1982
Oral Questions



ORAL QUESTION PERIOD


Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, the loss of $2.3 billion in Canada's foreign exchange reserves last month, almost equivalent to our total reserves, demonstrates the total failure of the high interest rate policy of the government in defending the Canadian dollar. Since Canadians cannot afford to lose another $2.3 billion, and we certainly cannot afford the high interest rates which are killing many of our industries, has the Minister of Finance any new proposals for the House to head off the impending fiscal and monetary crisis?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, of course the hon. member again has used false terms in describing this situation when he talked about the loss of currency. That, of course, is an error; it is wrong, a mistake, misleading, and totally false. I have pointed out more than once that when U.S. dollars are spent from our reserves, Canadian dollars are acquired. These dollars become part of our cash balances and are used to finance the requirements of the government. To call them a loss is an error that the hon. member ought to get out of his head.


Michael Holcombe Wilson: I suppose the minister is going to tell us that the $2.3 billion spent to support the Canadian dollar was not spent, that it stayed there all on its own, and that the high interest rates which have been kept much higher than they should have been by the minister's policies were not high at all-they were just low, low, low, in comparison to the United States. He knows interest rates in this country are two or three percentage points higher as a result of his policies.


INTERNATIONAL MONETARY FUND
Michael Holcombe Wilson: Madam Speaker, since there is some speculation in the markets today to the effect that the government is going to call in the IMF to bail it out, would the minister state whether or not any approaches have been made to the IMF and whether or not this is an option the minister is holding as an ace in the hole?


Allan Joseph MacEachen: Absolutely not, Madam Speaker. That allegation is as inaccurate as the hon. member's first question. There is absolutely no intention and there has been absolutely no contemplation of any such action. We have substantial holdings of foreign exchange at the present time in the amount of almost $3 billion. We have access to $7.5 billion U.S. in the form of standby credits. In addition to that we have gold
reserves in our foreign exchange holdings with a market value of almost $7 billion U.S. So why go to the IMF, I wonder.


Michael Holcombe Wilson: Because it would be the ultimate cop-out on the part of this government, because it does not have policies to deal with the situation.


QUERY RESPECTING POSSIBLE INTRODUCTION OF ALLEMBRACING CONTROL PROGRAM
Michael Holcombe Wilson: Madam Speaker, clearly the budget has been a flop, a disaster, and has done nothing to restore the confidence needed in the marketplace to get the economy turned around. Is the minister considering the possibility, as the President of the Treasury Board and some government backbenchers have indicated, of a full-blown control program for wages, prices, profits and foreign exchange, sometime in the fall when the budget he brought forward has proven to be the disaster that it is?


Allan Joseph MacEachen: Madam Speaker, the hon. member was wrong on his first question, he was wrong on his second question, and he is wrong on the third.


Some hon. Members:: Hear, hear!


RAILWAY FREIGHT RATES-APPLICATION OF GOVERNMENT GUIDELINE
Hon. Don Mazankowski (Vegreville):: Madam Speaker, my question is for the Minister of Finance. In the minister's budget speech last Monday night he said that price increases for services provided under federal jurisdiction would be restricted to the 6 per cent and 5 per cent two-year guideline. Since transportation was specifically mentioned, can the minister tell the House whether railway freight rates will be restrained to that 6 per cent and 5 per cent level, since there is a clear perception in the minds of the public that that is what the minister intended?


Allan Joseph MacEachen: Madam Speaker, what 1 intended to say was that the government expected the regulatory agencies, in establishing rates in the various fields mentioned, including transportation and communications, would observe the 6 per cent and 5 per cent rule unless justification existed for a contrary course of action. That is the policy, and it will be implemented in various ways by the government.


ROLE OF CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION
Donald Frank Mazankowski: Madam Speaker, I am sure the minister knows that the CTC does not regulate freight rates. They are merely filed and published. Is the minister intending to bring in legislation to effect the 6 per cent and 5 per cent guideline?
July 6, 1982

Furthermore, since public communication was specifically mentioned, can the minister tell the House whether he intends to instruct the CRTC to limit the latest CN-CP Telecommunications application, which is calling for increases at the level of 25 per cent to 30 per cent? Is the minister going to ask the CRTC to restrict those increases to the 6 per cent and 5 per cent guideline level?


Allan Joseph MacEachen: Madam Speaker, we have already indicated to the regulatory agencies, including the CRTC, that we wanted the 6 per cent and 5 per cent guidelines to be observed. As I mentioned yesterday, in the normal course these boards will examine applications and make their findings. If in their conclusions they exceed the 6 per cent or the 5 per cent rate, then it will be up to the government to determine whether any such abridgement of the rules is justified. If it is not justified, it will be overturned where the law permits the government to do so.


Donald Frank Mazankowski: Madam Speaker, we would be very interested to know how this will be implemented inasmuch as many of the regulatory agencies do not have that residual power in legislative form to dictate what the rates will be.


REACTION OF PROVINCES TO GUIDELINE
Donald Frank Mazankowski: Madam Speaker, I would like to address another supplementary question to the Minister of Finance. Inasmuch as the minister is calling upon the provinces to invoke similar action with services which are provided under provincial jurisdiction, what sort of response did the minister receive from the provinces in the recent meeting held last week as a result of his budget? Are the provinces going to comply with the minister's suggestion that the 6 per cent and 5 per cent guideline should be followed in those services which are provided under provincial and/or federal jurisdiction?


Allan Joseph MacEachen: Madam Speaker, I regret that I cannot throw light on that question because I was not present at the meeting between the Prime Minister and the premiers of the provinces.


INSTRUCTIONS TO REGULATORY AGENCIES
Hon. Edward Broadbent (Oshawa):: Madam Speaker, 1 want to follow up on the questions which the minister has been dealing with concerning the important matter of prices. Could the minister tell us whether the cabinet has sent quite specific guidelines to all the federal regulatory agencies to ensure that prices will be kept, in terms of increases, within the 6 per cent limit? More specifically, can the people of Canada rest assured that Bell Canada's rates will not go up more than 6 per cent; that CN's and CP's train tickets and Air Canada's plane tickets will not go up more than 6 per cent, and that that institution endeared by every Canadian, the Bank of Canada,
Oral Questions
will be forced to hold its increases within the prescribed rates laid down by the government?


Allan Joseph MacEachen: Madam Speaker, the general policy was established in the budget speech. The hon. member has asked whether a direct instruction or a direct message has been sent to the regulatory agencies. That is in the process of being done at the present time, with specific indications as to the expectations of the government. I believe the hon. member would agree that where Parliament has provided for due process in establishing prices, that due process ought to be observed in such a case as Bell Canada, for example.


John Edward Broadbent: The government did not wait to see if the men and women who work as public servants in the country would voluntarily negotiate contracts within the 6 per cent limit the government deemed desirable, and it brought in legislation to control those increases.


QUERY RESPECTING INTRODUCTION OF LEGISLATION GOVERNING PRIVATE SECTOR
John Edward Broadbent: Madam Speaker, since we have seen the bill-it has been tabled already-which sets a ceiling on wage and salary increases in the public sector, when can we expect a bill to be introduced which will set the same kind of precise, enforceable ceiling for price increases within federal areas of responsibility?


Allan Joseph MacEachen: Madam Speaker, the hon. member spoke about volunteerism, or that the government did not wait for workers to accept voluntarily wage improvements of 6 per cent and 5 per cent, and of course that would be the preferred approach. We will be meeting with representatives of organized labour later this week, and if there is any indication that there would be a voluntary acceptance of 6 per cent and 5 per cent, then of course that would be another matter and a very much preferred option for the government.


REQUEST THAT LEGISLATION BE INTRODUCED TO CURB PRICE INCREASES
John Edward Broadbent: Madam Speaker, I hope the minister will at least deal with the question this time. We are talking about prices now. No one in the House is under any illusion about what the government intends to do in terms of controlling the incomes of ordinary Canadians, but we would like some fairness when it comes to prices. Will the minister assure the House that the government will bring in a bill which will ensure that price increases within federal jurisdictional authority will be held within the 6 per cent limit?


Allan Joseph MacEachen: Madam Speaker, I believe our approach

July 6, 1982
Oral Questions
is to use every possible lever at our disposal to ensure that a 6 per cent and 5 per cent regime will operate in the Canadian government and its agencies with respect to the costs that were mentioned in the budget. It is not intended to introduce legislation to achieve that, because there are considerable ways in which that can be developed within the current system.


PRESENCE IN GALLERY OF PARLIAMENTARY DELEGATION FROM JAMAICA
Madam Speaker:: May I draw the attention of the House to the distinguished presence in our gallery of a delegation of parliamentarians from Jamaica which is led by Mr. Granville Williams, Parliamentary Secretary, Minister of Labour, Public Service.


Some hon. Members:: Hear, hear!


THE BUDGET
Hon. Roch La Salle (Joliette):: Madam Speaker, I also have some questions for the Minister of Finance, since the answers he gave just now were far from clear. If I remember correctly-perhaps the minister will agree that I am right, unlike my colleague whom the minister accused of being wrong three times just now-the November budget was based on the principles of equity and justice. How can the minister invoke these principles today, when he is putting a ceiling of 6 per cent on wage increases for federal employees and is unable to give us the assurance that the same ceiling will apply to price increases, particularly those made by fedeeral agencies? In the circumstances, could the minister inform the House whether he still believes in or supports the principles of equity and justice with respect to people who are being penalized because of a lack of sufficient measures to control price increases?


Allan Joseph MacEachen: Yes, Madam Speaker, I take it for granted that the hon. member also subscribes to the principles of equity and justice. I do. Yesterday his leader stated that the proposals which we made with respect to wage restraints, in his view, were a step in the right direction. 1 wonder if the hon. member shares the view of his leader on that point. I did not hear his leader suggest that we bring in an over-all system of price controls, which seemed to the implication in the hon. member's question.


REQUEST THAT GOVERNMENT TAKE JUSTIF1ABLE SALARY INCREASES INTO ACCOUNT
Roch La Salle: Madam Speaker, I have a supplementary.
This is not the first time the minister has failed to answer a question. He knows perfectly well that Canadians are very worried about the possibility of price increases. Yesterday the minister, in referring to federal agencies and Crown corporations, said that in cases where there was sufficient justification, the matter would go before the regulatory body, which would determine whether or not there would be an increase. If inflation does not go down to 6 per cent next year, could the minister inform the House whether he is willing to justify, before the regulatory body, wage increases that are now subject to restraint and have been reduced by the budget? Is the minister prepared to reconsider wage increases on the same terms as a price increase that would seem to be justified?


Allan Joseph MacEachen: Madam Speaker, it is our conviction that if we get the co-operation of all the partners in the economy it will be possible to bring down price increases to 6 per cent. That is a possibility that can be achieved if we do receive the co-operation that is required. Then, of course, the impact of all these changes that have been mentioned, including the wage restraint, will be minimized as we get ourselves into a 6 per cent world of recovery, rather than remain as we are now in a 12 per cent world of stagnation and recession.


John Edward Broadbent: You have really got that phrase down pat.


FISHERIES
Lorne Everett Greenaway: Madam Speaker, my question is directed to the Minister of Fisheries and Oceans. It concerns the western fishery. On May 10 the Standing Committee on Indian Affairs and Northern Development held hearings in Vancouver, British Columbia. During the testimony we heard from native people that over the last several years the department has had 66 court cases involving the native food fishery and lost 64 out of those 66 cases. Would this not indicate to the minister that there is something dreadfully wrong with his native food fishery policy in British Columbia?


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, I do not accept the hon. member's arithmetic without checking it very carefully. There is no doubt that these are cases which are very difficult to prove, and in some cases witnesses have been subject to intimidation. However, my feeling is that the Fisheries Act is there to conserve the species and the fishery and also to allow the native food fishery to be
July 6, 1982

pursued properly and legally by those who want to respect the conditions under which the permits are given.


Lorne Everett Greenaway: I am sure that the figures will check out. I do not think that the fact that 64 out of 66 cases have been lost says much about the lawyers in the Department of Fisheries and Oceans.


BAN ON SALMON SPORTS FISHING IN UPPER FRASER AND THOMPSON RIVERS
Lorne Everett Greenaway: Madam Speaker. my supplementary question concerns the freshwater salmon anglers in British Columbia. The minister will know that for the last three years there has been a total ban on salmon fishing in the Upper Fraser River watershed and the Thompson River. Yet, Saltwater fishermen are allowed a bag limit of 30 salmon per year. Why can the minister not allow freshwater anglers-there are only a few of them-to catch a small percentage of salmon, instead of having the whole load of conservation dumped on them? Why can he not take some of the bag limit away from the saltwater fishermen and give some to those who angle in fresh water?


Roméo LeBlanc: Madam Speaker, the problem of allocation between those who use the resource is one which we recognize always has immense difficulty. However, the matter which the hon. member raises is one where the fish have moved beyond the commercial and native food fishery barriers and are practically on the spawning grounds. Of course, when this occurs the requirement of escapement and spawning must be the priority.
We have consistently tried to respect the needs of all groups. There are some cases where this presents a difficulty, and the hon. member has underlined one of them.


PUBLIC WORKS
Hon. Elmer M. MacKay (Central Nova):: Madam Speaker, my question is directed to the Minister of Public Works. I want to thank him for the letter I received about a half hour ago in which he acknowledged that indeed problems had occurred in the Montreal area postal depot but they were in the process of becoming resolved.
Will the minister go a step further and give the House some specifics? Could he inform us whether the cost increase of $210 million for the construction of the postal plant, which is the difference between the $61 million estimated at the time of project approval and the $271 million paid out by March, 1979, was due entirely to inflation, or were there other causes?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, without notice of those specifics which I asked the
Oral Questions
hon. member for in the letter to him, I have no way of commenting on the accuracy of them this afternoon. But if the hon. member, a minister in the former government which was nine months in office in this country, was interested in that question, why did he not bother himself to talk to his colleagues to find out what those facts were?


Elmer MacIntosh MacKay: I anticipated the minister would give me an answer like that.


ROYAL CANADIAN MOUNTED POLICE INVESTIGATION
Elmer MacIntosh MacKay: Madam Speaker, would the minister confirm that, as of last November, some time since we left office, there were still some 6,500 change orders of the contract unresolved, that out of these orders 200 cases were subject to criminal investigation, and finally, that the investigation led by Sergeant Whitson of the commercial crime squad of the RCMP was called off by government order?


Some hon. Members:: Oh, oh!


Paul James Cosgrove: No,
Madam Speaker, again without request for specific information and without notice of the facts-or supposed facts- introduced by the hon. member, I could not confirm that. Hopefully I will not have to confirm, and hopefully, if the facts as introduced by the hon. member are incorrect, he will apologize.


MIRABEL LAND COMPANY-INQUIRY WHETHER RENT CEILINGS WILL BE APPLIED
Mr. Robert Gourd (Argenteuil-Papineau):: Madam Speaker, further to the government's excellent proposal aimed at getting inflation finally under control and keeping it down to 6 per cent, my question is directed to the Minister of Public Works, responsible for administering the Canada Lands Company (Mirabel) Limited.
Could the minister inform the House whether he intends to recommend that the company put a 6 per cent ceiling on rent increases at Mirabel?


Paul James Cosgrove: Madam Speaker, I doubt that the terms of the mandate of the Mirabel Land Corporation, being a subdivision of the Public Works Land Company, falls within the definition of the administrative body in the statement made by the minister. However, in order to follow the spirit of the government initiatives in this area, yes indeed, I have already communicated with the land company and 1 have confirmed that in the case of commercial and agricultural leases the 6 per cent and 5 per cent rule will be adhered to voluntarily and, as far as residential properties are concerned, of course that corporation in that jurisdiction is governed by provincial legislation, and we will honour the provincial laws as we do in all jurisdictions.

July 6, 1982
Oral Questions NATIONAL DEFENCE


PURCHASES FROM CANADIAN COMPANIES-DEPARTMENTAL POLICY
Mr. Terry Sargeant (Selkirk-Interlake):: Madam Speaker, my question is directed to the Minister of National Defence, who, I am sure, is not used to receiving questions of an economic nature. Does his department play a part in the government's efforts to stem the flow of capital from Canada during the current recession when unemployment, bankruptcies, and interest rates are at an all-time high and the dollar is at an alltime low? Specifically, does the Department of National Defence, as a matter of policy, buy its goods and services, wherever possible, from Canadian companies?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, it is always interesting to listen to questions on defence from NDP members, especially since their policy on defence seems to be pretty vague. In any case, as far as this economic question is concerned, I can inform the House that in all defence-related contracts and undertakings that come under our jurisdiction, whether purchasing or contracts, we always try to maximize Canadian content. That is the Canadian government's policy.


INSURANCE CONTRACT WITH UNITED STATES COMPANIES
Terence James (Terry) Sargeant: Madam Speaker, 1 would like to ask the minister why the Department of National Defence contracts the Serviceman's Income Security Insurance Plan, a plan which would involve some 40,000 members and tens of millions of dollars, from American-owned companies? Will the minister commit himself at this time to reopening that contract, and limit the bidding to Canadian companies?


J. Gilles Lamontagne: Madam Speaker, I was expecting this question, since the matter had been raised by the hon. member in a motion under Standing Order 43 some time ago. I can only say that the contract was awarded a few years ago, under the public tender system, and that although the headquarters of some insurance companies are in the United States, most of these companies have branches in Canada and employ Canadians.


THE ECONOMY
Hon. George Hees (Northumberland):: Madam Speaker, I would like to direct a question to the Prime Minister. As the
latest OECD report pointed out, Canada rates fifteenth among industrial nations with regard to annual rate of increase in productivity, a situation which must be very materially improved if we are to be able to sell our manufactured products in competitive world markets, and stop the serious decline in our economy at the present time. Would the Prime Minister and the government give very serious consideration to introducing generous taxation incentives, to be paid in direct proportion to increases in productivity, as a means of persuading Canadian producers that it will be worth their while to invest the very large amounts of money usually necessary to buy the needed machinery, production systems and new plants required to increase productivity, and thereby reduce costs and selling prices and, as a result, increase sales, production and jobs?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, on previous occasions the hon. member has indicated his interest in increased productivity and he will recall some of the answers given by the various ministers and myself to the effect that the problem of productivity is not quite as simple as the suggestion makes it seem. I do not have the list of 15 to which he refers, but I am sure that if he looks at the list he would find some of our strongest and most important competitors way down low on the list, and that relates to the age of the economy and the fact that some economies were rebuilt after the war and they have more updated machinery. There are many explanations for that. As to the suggestion of tax incentives, the hon. member will realize, of course, that there are incentives in the corporate tax structure for companies to invest in equipment, and that is their purpose.


LEVEL OF PRODUCTIVITY
George Harris Hees: Madam Speaker, one does not have to look around the world to find out that Canada's progress in productivity is a very sorry one indeed, that our rate of increase in productivity, year to year, was formerly relatively good, but it has steadily decreased year by year, until it is now something of which to be thoroughly ashamed, forgetting all other countries, just examining Canada as a country on its own.
Would the Prime Minister not agree that the incentives which he has mentioned, which are very hard to recognize, have been ineffectual in the job that they should have done to increase Canadian productivity, and will he not constructively look at the possibility of doing something a whole lot better, which could be done, and has been done in the past, and can be done by him and his government if they want to do it? Would he please give consideration to that constructive thought?


Pierre Elliott Trudeau: Madam Speaker, I point out to the hon. member that in his first question he suggested that we rank fifteenth.


George Harris Hees: We do.
July 6, 1982


Pierre Elliott Trudeau: In his second question he said that we should forget about all other countries and look at Canada on its own.


George Harris Hees: I did not. I said we are bad, no matter what.


Pierre Elliott Trudeau: He should make up his mind.


George Harris Hees: Madam Speaker, 1 said we were disgraceful, no matter what other countries are doing.


EXTERNAL AID
Mr. Ron Stewart (Simcoe South):: Madam Speaker, my question is directed to the Minister of Finance, whose 6 per cent society brings austerity to centre stage in this House, especially on the backs of public servants and pensioners. Concurrently, foreign aid, much of it dubious, such as megamillions to Algeria for a monument to socialism at a 10 per cent rate, a sweetheart loan to the Soviet Union for a gas pipeline, and loans, grants and gifts to communist-leaning nations, is growing at an alarming rate. Within two years, despite the piddling little bit that was in the budget-


Some hon. Members:: Oh, oh!


Ronald Alexander Stewart: -the cosmetic cuts announced in his budget, the total program will eclipse $2 billion, and then $2.5 billion by 1985-86.


Some hon. Members:: Question!


Ronald Alexander Stewart: Yes, I have a question, and it is simply this: will the minister assure this House and the people of Canada that his department will review the so-called aid programs and eliminate all those outside the purview of humanitarian and emergency relief until such time as we Canadians can put our own house in order and then extend charity beyond our borders?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, as 1 understand the hon. member's question, he is suggesting that we review our total foreign aid program and eliminate all its projects with the exception of humanitarian and emergency assistance. If that were implemented, I gather that it would involve almost the total dismantling of our foreign aid program because a very high proportion of the foreign aid program is not humanitarian nor of an emergency nature. It is intended to assist in the economic and social development of other countries. Therefore, I do not believe that the hon. member's suggestion would be supported, even by hon. members in his own party. I certainly hope it would not be supported by the hon. member for Kingston and the Islands.
Oral Questions


Ronald Alexander Stewart: May I add economic reasons as well, Mr. Minister, economic and humanitarian, but not wasted money on communist countries.


INCREASE IN AID
Ronald Alexander Stewart: Can the minister justify his nickel and diming of the farmers and home owners of this country? Can he justify the high interest rates? He takes away the indexing from pensioners, yet foreign aid is indexed. It is indexed at .05 per cent of the GNP to .07 per cent of the GNP by 1990. We are wasting $100 million on loans for statues.


Some hon. Members:: Order!


Ronald Alexander Stewart: How about grants of $78 million to Tanzania? Mr. Minister, does the 6 per cent society belong only to Canadians?


Allan Joseph MacEachen: Madam Speaker, as 1 understood the hon. member's second question, he began by a special request that we somehow cease our commercial relations with communist countries. I believe that if he thought about it a little bit, he would understand that our commercial relations-


Mr. Lalonde:: No wheat sales?


Allan Joseph MacEachen: -with the Soviet Union, for example, are extremely important, that our sales of wheat are of great benefit to farmers, and that all of these aspects would have to be considered before adopting what I would regard as a very irresponsible suggestion by the hon. member. 1 believe that most of his colleagues are rather embarrassed at his questions this afternoon.


Some hon. Members:: Hear, hear!


THE ECONOMY
Mr. Chris Speyer (Cambridge):: Madam Speaker, my question is directed to the Prime Minister and it is identical to the one directed by my colleague, the hon. member for Vegre-ville, to the Minister of Finance.


Marc Lalonde: Out of order.


Mr. Baker (Nepean-Carleton):: It is the same subject area.


Marc Lalonde: It is the same question he says.


Chris Speyer: What commitments has the Prime Minister received from the provinces with respect to regulatory agencies and the provinces' jurisdiction to curtail prices within their own jurisdictions?
19044

July 6, 1982
Oral Questions


Pierre Elliott Trudeau: I did not hear the question through all the noise, Madam Speaker.


Chris Speyer: Since last Wednesday what commitments has the Prime Minister received from the premiers of the provinces to regulate their own agencies with respect to prices within the provincial jurisdictions?


Pierre Elliott Trudeau: Madam Speaker, I think the hon. member and some of his colleagues have missed a little of the thrust of the discussion I had with the premiers. Indeed, the motive of the budget itself is to try to get all Canadians to co-operate in establishing a lower rate of inflation. We have given that example by bringing forth legislation which will be before the House for discussion very soon. I have asked the premiers-as
I	asked the parties opposite-if they would like to see inflation come down to 6 per cent rather than stay up at 10 per cent or
II	per cent. They are suggesting regulatory means which can be used. The Leader of the New Democratic Party was suggesting controls on prices and so on. The House should understand that we are not attempting to do it that way. We are trying to get Canadians to understand that 6 per cent inflation is better than 12 per cent inflation, and that 6 per cent inflation can only be reached voluntarily if people cooperate. Otherwise, there will have to be legislation. That is the message we are trying to get across.


Some hon. Members:: Hear, hear!


POSITION OF PROVINCES ON CONTROLLING PRICES
Chris Speyer: Madam Speaker, as the Prime Minister knows, the Minister of Finance gave a very specific undertaking that the federal government would ask the provinces to take similar action. What commitments did the Prime Minister receive on Wednesday, or since Wednesday, that action will be taken to control prices within provincial jurisdiction of provincial regulatory bodies? What commitments did he receive?


Pierre Elliott Trudeau: Madam Speaker, several provincial premiers discussed the subject at our meeting last Wednesday. They indicated that in some cases it would be very difficult, because costs of regulated industries are going up very high. Of course, the point I am making is that if we can bring inflation down to 6 per cent then costs will not go up so high. And if we are to bring inflation down to 6 per cent in a voluntary way, it does call for leadership not only from this government but from the provincial governments. The first place to try to do it is in the cost structure, the prices, the salaries, the wages to the public sector. If we can do this, then we will have gone a very long way indeed to bringing prices down. That is the sequence in which you do it. Otherwise, you bring in controls, you forget about voluntary restraint, and you say that it cannot be done because Canadians do not believe in freedom, that they must be regulated.


THE CHARTER OF RIGHTS
Mr. Sid Parker (Kootenay East-Revelstoke):: My question is also to the Prime Minister. Madam Speaker, last week the government tabled Bill C-124 which removed the right to strike and bargain collectively from the Public Service for two years.
Last year our party attempted to have these rights included in our new Charter of Rights. At that time we were told by the Acting Minister of Justice that the government's position on the suggestion that there be specific reference in the Constitution to freedom to organize and bargain collectively was that "that is already covered in the freedom of association that is provided already". Could the Prime Minister tell us how he justifies breaking his new Charter of Rights? Or has he celebrated Canada Day by turning our new Charter of Rights into just another piece of scrap paper?


Pierre Elliott Trudeau: Madam Speaker, surely the hon. member in asking his question should reflect on the fact that there are many areas where the right to strike does not exist in Canada, and it does not exist in many other countries. That does not mean that there is not freedom of association. The right to strike is a right which is given in special circumstances. The member's very own party has frequently voted against that right to strike when we take it away in a particular strike, when it is necessary for the common good.


Some hon. Members:: Hear, hear!


PUBLIC SERVICE
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, I believe it was a question of collective bargaining, not the right to strike, that was the matter in question.
My question is directed to the President of the Treasury Board. The minister knows that most lower wage earners are women and therefore they will be the most hard hit by the government's 6 per cent curtailment of the cost of living indexing. These are increases that many single parents need to put food on the table.
Even more serious is the fact that women, through this legislation in Bill C-124, will in effect lose all their bargaining power for equal opportunities in the work force. Does the President of the Treasury Board believe that this bill will curtail their bargaining for affirmative action, for equal pay for work of equal value, for maternity leave benefits, and for health and safety measures essential in these times of high technological change? I want to ask him also is this what the minister wants. Does he want to curtail equal opportunities for


July 6, 1982

women? Will he withdraw this bill in order to enforce the Charter of Rights, which supposedly is to guarantee equal opportunities?


Some hon. Members:: Hear, hear!


Hon. Donald J. Johnston (President of the Treasury Board):: Madam Speaker, with respect to the preamble to the question and the reference to the 6 per cent, as the Minister of Finance has said, and as the Prime Minister has just said, the intention is to bring inflation down to 6 per cent next year, in which case no one will suffer. That is the whole thrust of this approach regarding increases, as the hon. member knows.
With respect to the other aspect of the question, as it relates to equal pay for work of equal value, it was certainly not my intention in introducing this legislation to deprive working women-or for that matter, working men-who might be discriminated against under Section 11, of rights that they would have under the Human Rights Act. That is not the intention. The bill, of course, is subject to legal interpretation, but I can assure the hon. member that that is not the purpose of it.
In addition to that, I would hope that during this period when the right to strike is suspended, the National Joint Council will continue its deliberations; that in each department the management-union teams will continue to work out mutually satisfactory solutions in such instances as conditions of health and safety in the workplace, and so on.


Some hon. Members:: Hear, hear!


EXTERNAL AID
Hon. Erik Nielsen (Yukon):: Madam Speaker, I have a question for the Minister of International Trade, following on that which was put by my colleague, the member for Simcoe South. Is the Canadian government, or any of its agencies, supplying, directly or indirectly, any financial aid to the Soviet Union for the construction of a natural gas pipeline from Siberia to western Europe? If it is, could the Minister indicate the extent of that aid; and indicate how such aid benefits Canadians?


Hon. Ed Lumley (Minister of State (International Trade)):: Madam Speaker, I am not aware of any Canadian Company bidding on a present contract to supply a natural gas pipeline in Siberia.


REPORT OF FISCAL ASSISTANCE
Erik Nielsen: Madam Speaker, that was not my question. It is my understanding that at least a quarter of a billion dollars of fiscal aid is being supplied to the Soviet Union, to assist the Soviet Union in the construction of that natural gas pipeline. Would the minister look into it and report to the House at the earliest opportunity, as to the details.
Oral Questions
While he is doing so, would he also look into the circumstance that the Government of North Vietnam has shipped one half million political prisoners from South Vietnam to work on the construction of that pipeline? Would he indicate how that is-


Marc Lalonde: What would you do about it?


Erik Nielsen: I hear the Minister of Energy, Mines and Resources ask what I would do about it. I know what I would do about shipping one half million, or one half billion, political prisoners from one country to another, assisted by Canadian financing. Would he please look into the matter and report to the House at the earliest opportunity?


Edward C. Lumley: Madam Speaker, as I said in my original answer, I am not aware of any Canadian companies providing assistance, financial or otherwise, for the natural gas pipeline. I am aware, as are hon. members of the House, over five years, a Canadian consortium of western businessmen, Quebec businessmen and Ontario businessmen has been bidding on a sour gas plant which will create about 8,000 or 10,000 jobs in Canada.


THE ECONOMY
Mr. Paul E. McRae (Thunder Bay-Atikokan):: Madam Speaker, my question is directed to the Minister of Finance, and it has nothing to do with the magnificent trade surplus this month-


Some hon. Members:: Oh, oh!


Paul Edmund McRae: -which the opposition has not mentioned. It has to do with the belief of a lot of Canadians that our deficit proportionately will be double the American deficit. Has the minister looked at the OECD figures yesterday, which indicate that the American deficit will be something like SI47 billion, and also at the effect of that deficit on the very, very small saving ratio or gross fixed investment that the American government has, as compared to Canadian growth fixed investment or the gross savings ratio?


Allan Joseph MacEachen: Madam Speaker, I have indeed looked at the OECD figures and have seen its estimates of the proposed deficit in the United States. I believe the hon. member is aware that some forecasts of the gross national product in the United States are very optimistic in their magnitude and that that affects many of the comparisons. However, I point out, as the hon. member has mentioned, that the savings rate in Canada is substantially higher than in the United States. It is in excess of 13 per cent, and on any comparison this country can finance its financial requirements and its deficit more easily than can the United States, if one takes the comparison

July 6, 1982
Committee Reports
between financial requirements and gross domestic savings. That is a fact that is often overlooked in comparing this country with the United States.
* *
*


PETITION
Madam Speaker:: 1 have the honour to inform the House that the Clerk of the House has laid upon the Table the two hundred ninety-second report of the Clerk of the Petitions stating that he has examined the petition presented by the hon. member for Victoria (Mr. McKinnon) on Monday, July 5, 1982 and finds that it meets the requirements of the Standing Orders as to form.
* *
*


POINT OF ORDER
Terence James (Terry) Sargeant: Madam Speaker, I rise on a point of order arising out of the answer 1 received today from the Minister of National Defence (Mr. Lamon-tagne). 1 have information which shows that with respect to the Canadian Forces insurance program the lowest bidder was in fact Confederation Life, which company did not get the contract, contrary to the claim made today by the minister.


Madam Speaker:: Order. That is not a point of order. I am sorry, I cannot hear that.



ROUTINE PROCEEDINGS


Mr. Thomas H. Lefebvre (Pontiac-Gatineau-Labelle):: Madam Speaker, I have the honour of tabling the first and second reports of the Special Committee on Standing Orders and Procedure.
[Editor's Note: For above reports, see today's Votes and Proceedings.]


PETITIONS
Constantine George (Gus) Mitges: Madam Speaker, I have the honour to submit a petition today on behalf of a number of residents in the riding of Grey-Simcoe and adjacent areas condemning Bill C-103, as 1 do, because it allows for a huge ongoing increase in the price of gasoline to consumers. The petitioners do not oppose a modest tax, but it is felt that through Bill C-103 the tax increases proposed place a totally unnecessary burden that is completely unwarranted.


Mr. Bud Bradley (Haldimand-Norfolk):: Madam Speaker, I have the honour and duty to present a petition on behalf of my constituents. The purpose of this petition, signed by 843 constituents of mine and individually submitted to me by groups from the Dunnville, Lowbanks, Port Rowan, St. Williams and Simcoe areas, is to indicate to the government the great concern of the petitioners about the implementation of Bill C-451, which deals with gun control. The nature of the petition is to ask our government's insistence that this bill not be approved, as the petitioners feel it would infringe upon the rights and privileges of law-abiding citizens who own and use guns for legitimate purposes.
The petitioners hope, Madam Speaker, that in your examination of their petition you will find it in order, sense its urgency and allow its reading in the House.


Mr. Bill Domm (Peterborough):: Madam Speaker, it has been brought to my attention that there are a number of federal ridings across Canada collecting petitions and that they have found it increasingly difficult to get hon. members on the government side to present them to the House. So it is my pleasure at this time to present a petition signed by 883 petitioners from ridings across Canada represented by government Members of Parliament in the hope that their plea that the pace, degree and nature of change to System International, metric, should and must be determined voluntarily in the various sectors of trade and industry by the individual firms or industries directly concerned and with minimal government intervention. It is their hope that these petitions will be reviewed, and they wish them to be presented to Your Honour at this time.


Mr. Jim Fulton (Skeena):: Madam Speaker, I rise to present a petition to the House. It is signed by residents of the Queen Charlotte Islands including Tlell, Sandspit, Tartu Inlet and Queen Charlotte City. The petition expresses concern about Canada's continued use of nuclear reactors and the sale of

July 6, 1982

nuclear fuel bundles to Argentina. It also calls on the government to stop the testing of weapons on Canadian soil.
In light of the reckless decision of the Secretary of State for External Affairs (Mr. MacGuigan) yesterday that the Liberal government will allow the nuclear deal with the military dictatorship in Argentina to go ahead, we trust that the Prime Minister (Mr. Trudeau) will instruct the Secretary of State for External Affairs to cancel the project immediately. Canada should not be exporting this kind of material to a country which has the record Argentina has and which publicly espouses the use of the Candu reactor for military purposes.


[Stage Direction]
Mir. Jesse P. Flis (Parliamentary Secretary to Minister of Transport): Madam Speaker, it is my duty to table on behalf of 956 Canadians the following petition: That the government permit postage-free or postage-reduced deliveries of packages and parcels that contain food and medical supplies to Poland while that country is under martial law. Such an arrangement would speed up delivery and, to some degree, alleviate the hunger and pain experienced by the people of that country.
The petitioners hope Your Honour will find the petition in order and that the appropriate ministers of the Crown will consider this request.
Hon. Pierre Bussieres (Minister of State (Finance)) moved: for leave to introduce Bill C-125, to provide supplementary borrowing authority.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 4,220 and 4,241.


Mr. Crosby: 1.	Under what specific written legal authority was the code of conduct for employees of the Department of Employment and Immigration prepared, established and enforced?
Order Paper Questions
2.	Does the (a) President of the Treasury Board (b) Prime Minister approve and condone the code for employees of the department?
3.	Are the employees of the department subject to different rules of conduct than employees of other departments and, if so, for what reason?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: 1. Section 7(1 )(f) Financial Administration Act; Section 106 Public Service Terms and Conditions of Employment Regulations.
2.	(a) and (b) not applicable since authority lies with deputy head.
3.	Generally, Canada Employment and Immigration Com-mission/Department employees are subject to the same rules of conduct as are employees in other departments; however, under the authorities noted in part (1) above, each deputy head may establish rules of conduct or standards of discipline which more specifically and precisely relate to his/her departmental organization and operations.


Mr. Herbert: 1.	What amount was paid or is estimated to be paid in the fiscal year 1981-82 as alternative payments to Quebec under the student loan program?
2.	Are the payments conditional and, if so, what are the conditions?
3.	Does the government require that all Quebec students have equal access to the Quebec student loan program and, if not, does any other government initiative attempt to ensure that there is no discrimination by course of study, university of student, residency requirement or language?


Hon. Gerald Regan (Secretary of State):: 1. The amount was $17,452,507.63.
2.	A province must operate a provincial loan program and so notify the minister in order to qualify for an alternative payment. Section 12(1) of the Canada Student Loans Act specifies this condition.
3.	The terms and conditions of a provincial loan program are entirely within the jurisdiction of the province concerned hence the federal government does not require any particular eligibility or mobility conditions. As far as the government is aware, all Quebec students have equal access to the Quebec student loan program for the considerations mentioned in the question. The program would, of course, require that applicants be financially means tested for eligibility.


Madam Speaker:: The questions enumerated by the parliamentary secretary have been answered.


Mr. Taylor:: Madam Speaker, I rise on a point of order. I would like to ask the parliamentary secretary when we might expect an answer to question No. 2,329. This question was tabled on April 2, 1981. The list surely should have been

July 6, 1982
The Budget-Miss Nicholson
prepared even at that time. What is the difficulty in getting an answer to question No. 2,329?


David P. Smith: Madam Speaker, I am not able to assist my friend offhand, but I will be happy to look into that matter on his behalf.
I ask, Madam Speaker, that the remaining questions be allowed to stand.


Madam Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, July 5, 1982, consideration of the motion of Mr. MacEachen that this House approves in general the budgetary policy of the government, and the amendment of Mr. Wilson (p. 18905).
Miss Aideen Nicholson (Trinity):: Madam Speaker, in introducing his budget, the Minister of Finance (Mr. MacEachen) said:
The government has pointed the way to recovery, but it alone cannot get Canada on the move. We must tackle this task together.
Canada is one of the most fortunate nations in the world. We have tremendous natural resources. We have well-educated and competent workers, and we are better equipped than many countries to survive the worldwide recession. However, we want to do more than merely survive. We want to work our way out of the present difficulties in a way which leaves us well positioned to take full advantage of the upturn in the world economy when it comes.
The budget measures in themselves are worthy of serious attention, but before addressing them I would like to echo the minister's call for all Canadians to involve themselves in serious consideration of how best we can shoulder our responsibility to work our way out of current difficulties and prepare for better times.
Budget bashing is a traditional Canadian occupation. It is traditional that special interest groups respond with more and more requests to help their particular situation; it is traditional that opposition parties attack and give no credit for positive measures. In our present situation, budget bashing can easily become Canada bashing. Financial markets are skittish and respond in an exaggerated way to any evidence of political division or uncertainty.
But Canadians have a remarkable ability for compromise, for working together to overcome difficulties, for balancing the
need of regions, of minorities, of conflicting groups so as to arrive at the common good. This is a time that calls for all our goodwill and all our patriotism and pride in Canada.
Two years ago, on May 21, 1980, this House was united in a way we rarely see. Statesmanlike speeches on the Quebec referendum results were made by the Prime Minister (Mr. Trudeau), by the Leader of the Official Opposition (Mr. Clark) and by the Leader of the New Democratic Party (Mr. Broadbent), and it may be useful today to remind ourselves of that spirit and of some of the statements made then.
The Leader of the Official Opposition described the referendum vote as "an expression of pride and belief in this country in which we can all joyfully share" and spoke of uniting Canadians in "a common determination to build a renewed federation which can make this a stronger country, a richer country, and a better country in years ahead".
The Leader of the New Democratic Party said:
We have ... reached a level of political maturity of which all civilized nations of the world are envious. . . . last night we showed that we can get along together despite deep differences.
Later in his speech, he said:
Fishermen in Newfoundland, farmers in Saskatchewan, miners in Sept-iles and people in every region of Canada must see the federal government as an ally, as their government. This is our objective.
The spirit which animated this House on May 21, 1980 is needed again as we face difficult times to which we can find solutions by working together.
At this time of very delicate balance, it is important that we all play a constructive role-otherwise, to quote the Financial Post, "The extreme and the implacable, egged on by the excitable in the media and unable to see merit in a middle way, may blindly help precipitate" a crisis for Canada.
Canadians are concerned about inflation, about high unemployment, about the deficit, about high interest rates; consumer, business and investor confidence are at a low ebb. To deal with all these problems requires a careful balance and mix of policies.
Most people who talk to me are more concerned about unemployment than about inflation. As long as people are working, they usually can manage in one way or another to deal with increases in the cost of living, but being unemployed takes the heart out of people. Yet we know that if inflation goes unchecked we will lose our competitive position in world markets and the long-term result will, in fact, be more unemployment. Therefore, inflation must be addressed as a high priority.
In inflationary times people try to protect themselves by negotiating higher wages, but when wages and prices chase each other, purchasing power does not increase; a 12 per cent increase does not improve the situation of a family if prices have also gone up 12 per cent.
July 6, 1982

One measure that the government proposes in the budget is to limit increases for Members of Parliament, civil servants and staff of Crown corporation to 6 per cent next year and 5 per cent the following year. It is hoped that provincial governments and the private sector will follow this example. To be sure, public servants have not caused inflation and have no responsibility for it any more than other Canadian citizens. Those who were expecting increases higher than 6 per cent next year will naturally be disappointed, but this country has been built on sharing and on working for the common good, and if limiting an increase to 6 per cent helps to create jobs for Canadians who are unemployed, helps to protect our future, I think most people will agree to that limit.
Federal regulatory agencies are being asked to restrain prices of the goods and services that they control. The provinces are being asked to do the same in their jurisdictions as part of a two-year national effort to reduce inflation.
Unemployment is at a higher rate than most of us have seen in our lifetime; the expectation that Canadians may find and hold a job and plan their future on that basis is threatened. It is important that we move quickly to deal with unemployment, not only because of the distress to the individual and family but also in terms of the economy as a whole. Unemployed people do not pay taxes as they did when they were employed; businesses which are in difficulties do not pay taxes and contribute to the economy as they do when they are prospering; and in fact, much of the increase in our deficit now is a direct result of the recession. The deficit is not growing because of increased federal spending; expenditures have been held in check, but revenues are down and unemployment payments have greatly increased.
Therefore, the government has to take prudent, selective measures to support the economy and preserve jobs and so, ultimately, help to contain the deficit. The November budget allocated some resources to job creation and the budget before us targets further resources for that purpose.
However, while direct job creation relieves immediate distress, helps people to maintain skills and perhaps acquire new skills, and can have other values in terms of improving communities, for long-term job creation we must look to a dynamic, confident private sector, and particularly to small business which has traditionally played an important role in job creation.
High interest rates, depressed sales, production cost increases and other factors have presented our private sector with difficulties that have challenged all its resources and ingenuity.
To help business cope with the present and prepare for the improvement in world markets which must come, the budget includes a set of tax proposals that lower the tax on interest income and on capital gains on selected investments. The measures proposed will result in significantly lower interest rates in priority areas-the housing sector and borrowings for new investment by small businesses, farmers and fishermen.
The Budget-Mr. Blackburn
The proposals also increase the attractiveness of equity investment for individual Canadians. These proposals have received less attention than they deserve in the discussions on the budget so far. Perhaps they are not regarded as being firm since a committee has been established to examine them. Indeed, some have said that these measures should be put in place immediately. However, since they are quite innovative and involve new financial instruments, surely it is wise to test them with experienced accountants, lawyers, economists and business people before they are actually put in place later this year.
Canadians can feel just pride in our private sector whose enterprise has made possible a standard of living and social security system which is the envy of many countries. Success in revitalizing the private sector will also protect Canada's advanced medicare, unemployment insurance, pension, education and other programs essential to social justice and social progress. Over the past 20 years Canadians put in place a social security system which avoids the excesses or shortfalls of some countries while reaching out in support for all Canadians.
In difficult times there is all the more reason for society to help those in need. That is why, although this budget will hold the increases in old age security to 6 per cent and 5 per cent in the next two years, those senior citizens in need who qualify for the guaranteed income supplement will continue to receive fully indexed increases and they can also receive a supplement in order to offset fully the limitation on indexation of their old age security payment.
Similarly, while family allowances will for the next two years increase by 6 per cent and 5 per cent rather than by the full cost of living, in order to ensure that this limitation does not hurt families with modest incomes the child tax credit will continue to be fully indexed and increased by $50 for the 1982 taxation year.
In conclusion, Mr. Speaker, may I say that difficult times always bring with them requests for radical reappraisal of all our economic programs and policies. This is a healthy and constructive exercise. The more one understands of constraints, international and domestic, the better the chances of being able to advance practical solutions. This budget represents a sane middle-of-the-road approach which tries to reduce inflation, increase confidence, create jobs and hold the line on the deficit while protecting social programs.
If all Canadians can work towards those goals, we will survive the present recession, we will be prepared to take advantage of world recovery when it comes and make full use of our great advantages so that we continue to be one of the most prosperous, stable and progressive nations of the world.


Mr. Derek Blackburn (Brant):: Mr. Speaker, the speech I just listened to reminded me of speeches I used to hear from Buckingham Palace on Christmas Day 25 years ago. Smooth sounding but with very little substance; reassuring, but nothing substantive to prove an argument. The hon. member, in defending the Liberal budget, said that if we remain calm-I am paraphrasing her now-and all segments of the community

July 6, 1982
The Budget-Mr. Blackburn
get together and restrain themselves, then inflation will come down and happy days will be here again. However, she neglected to say-and I hope this does not sound like a cheap shot because we are all in this bag together-that it is a lot easier for her, the Conservatives and myself with incomes around $60,000 to $65,000 gross a year to give that advice to our constituents than it is for them to follow.
So 1 just hope that the Liberal backbenchers realize that they cannot go home to their constituencies and tell the unemployed, those who are on mother's allowance and welfare, to hang in, tighten their belts, restrain themselves and happy days will return. That is not the way it is done. The Canadian constituency has grown very old and very wise in the last two years. They realize that most of their financial problems, in a personal way, are directly related to the non-thinking which has been going on in the Liberal cabinet since the last election.
Until June 28, Mr. Speaker, the majority of Canadians who were hurting at least had hope. They thought there was some light at the end of the tunnel. But as a result of the June 28 budget most of that hope is gone because most of the light at the end of the tunnel has disappeared.
I am very briefly going to touch on three or four major issues in the budget and then I want to pinpoint three major aspects which are either in or not in the budget.
1 think it is absolutely cruel that at a time of tight and expensive money, when consumer demand is down with the resulting massive lay-offs and unemployment of about 1.5 million, the government has decided to constrict consumer spending power even further by taking some $2.6 billion out of circulation, money which is badly needed to stimulate the economy in a recession which is bordering on an absolute depression. For example, tax increases of the order of $1.3 billion; the scapegoating of the public sector by saying that civil servants-and by implication all wage and salary earners-are the major cause of this inflation. That is nothing but patent nonsense and the Minister of Finance (Mr. Mac-Eachen) and his cohorts opposite know it. Real wages, in terms of purchasing power, have declined by 10 per cent over the last six years. Now the government is saying that purchasing power is going to decline another 5 per cent or 6 per cent in the next year because it admits that inflation is going to remain at 9 per cent or 10 per cent.
Another very cruel aspect of this budget is the partial deindexing of family allowances and deindexing of pensions. I should add here that former government employees now retired paid an extra 1 per cent contribution to their pension plans as a hedge against inflation but now that has arbitrarily, and 1 think illegally, been withdrawn. And they have no clout and no way in which to fight back.
On the supply side, again we are slavishly following President Reagan. But maybe we should not blame President Reagan; we should go back to Mr. Bouey, Governor of the Bank of Canada, in 1975 when he started it all with this supply side economics. We are going to give tax breaks to business. Well, normally tax breaks do result in an increase in investment in business, but at a time when more than 30 per cent of our plants is underutilized, those tax incentives are going to
fall on barren ground. There is no possible way that those small tax incentives will fill that manufacturing and productivity gap of between 69.2 per cent and 100 per cent capacity. There again is another major blunder on the part of the Minister of Finance.
Now we come most certainly to the focal point of the budget and the focal point of our economic woes today. That, of course, is the interest rate in this country which is absolutely outrageous. It is the principal cause, almost the sole cause, of business bankruptcies, farm foreclosures, massive unemployment, a general malaise in the economy and an emotional depression that is spreading across our country. This budget as of June 29 has only exacerbated the problem of high interest rates, about which I will go into detail a little later.
Suffice it to say that high interest rates are strangling our economy and the finance minister has sluffed off the whole problem. He has put it into the hands of so-called experts who often cannot agree among themselves. They are to report back in three months' time, three lost months as businesses slide under, as farms go out of business and as unemployment increases. The Minister of Finance has again sluffed off the whole problem of interest rates for another three months, supposedly to be included in yet another budget next fall.
There are other inequities, such as controls in public sector salaries and later in private sector salaries, as I have mentioned. There is to be a reduction in pension increases, a reduction in family allowances and so on.
This budget lacked a new economic strategy. There is no new economic program in it. Senator Olson came forth with a paper in 1980 in which he outlined a prescription for recovery and prosperity. This was based on resource megaprojects. These projects are all down the tube. They were all highly capital intensive at a time when the cost of money was skyrocketing. They were low labour intensive. They did not create the jobs which the manufacturing sector normally would. The megaprojects are, at least for the time being and for the foreseeable future, finished.
This budget which the Minister of Finance had the nerve to introduce on June 28 makes no reference whatever to an alternative economic strategy to bring us out of our economic doldrums. There is nothing whatever. Again, the minister has used the band-aid, quick-fix approach so characteristic not only of the Minister of Finance but indeed of the government which has ceased to govern. That is why the New Democratic Party has called repeatedly since the budget was introduced for the Liberals to have the common decency to step down from power and hand it over to those who are not only willing to govern but have some intelligence about how to govern this country.


Some hon. Members:: Hear, hear!


Derek Nigel Ernest Blackburn: Mr. Speaker, there are three major parts of this budget to which I want to make reference in some detail.
July 6, 1982

First is the premise on which the budget is based. Repeatedly in the House of Commons during question period the Minister of Finance has said: "Look, fellows, we do not have a high interest rate policy, we have an anti-inflation policy. If we bring down inflation, interest rates will come down, businesses will get turned around, unemployment will drop as the demand for goods and services increases." I say balderdash to that because the Minister of Finance also likes to make reference to things which happen south of the border. The Liberals are great ones to blame others. From the day the Prime Minister was elected, I do not think he has ever admitted he was wrong about anything.
Let us take a look at what is happening in the United States. Inflation in that country on an annual basis has now declined to 6.5 per cent. But where are the interest rates? The prime interest rate in the United States of America is still over 17 per cent. Where is unemployment now that inflation is down in the U.S.? Unemployment in the United States is just under 10 per cent. Yet the Minister of Finance has premised the logic of his budget on the United States model. The U.S. model is not working. Interest rates are remaining high, businesses are remaining strapped financially, and unemployment is high, widespread and causing considerable anguish in that nation. So much for the minister's model and so much for his reference to fighting inflation which in turn will automatically, according to him, bring down interest rates and unemployment, all of which is nonsense.


Mr. Riis:: I think he believes in fairies too.


Derek Nigel Ernest Blackburn: Second, there is no new economic strategy in the budget. There is nothing to replace the failed resource-based projects which, as I said earlier, were highly capital intensive when money was very expensive. There was no hint of a move to an industrial strategy to end the branch plant approach.
I would like to expand on the branch plant approach right now. I was very gratified last Wednesday evening when our Conservative friends supported us in our subamendment to the budget calling for a stronger FIRA. That was a complete turnaround on the part of the Conservatives. I am overjoyed that members such as the hon. members for Mississauga South (Mr. Blenkarn), York-Peel (Mr. Stevens) and Etobicoke Centre (Mr. Wilson) joined with socialists in this corner and said "Enough is enough: we cannot afford to have our industrial sector bought out any more by loosening up FIRA." We were united on this side of the House to strengthen FIRA. It is the Liberals who now want to loosen FIRA.


An hon. Member:: The Tories would vote for anything to dump the Liberals.


Derek Nigel Ernest Blackburn: Somebody has just said the Tories would vote for anything to dump the Liberals. That shows how much creative thinking they put forward in the House these days.
On page 7 of the budget we find the following:
First, the threshold for review under the small business procedures will be raised from $2 million and 100 employees to $5 million and 200 employees for new investment or direct acquisitions in Canada.
The Budget-Mr. Blackburn
Second, where a foreign-controlled Canadian company is acquired in the course of the acquisition of its parent or another foreign-controlled company, the small business procedures threshold will be $15 million and 600 employees.
FIRA has been greatly abused, but there is one thing FIRA has done. It has reduced the acceleration of a U.S. takeover of our industrial sector here in Canada. The reason we in the New Democratic Party are opposed to loosening FIRA's regulations is because the branch plant economy is not good for Canada.
In the 1950s and 1960s it is true the branch plant economy gave us an accelerated rise in our standard of living. It produced jobs, it built warehouses and distribution centres, and in a limited sense it was beneficial. A recent study has strongly indicated that since 1976 the branch plants in this country have created a net outflow of $1.5 billion in capital. So it has not been beneficial as far as capital intensity and capital investment in this country are concerned.
Second, branch plants are very soft indeed on research and development. Most research and development is done by parent companies back home, and "back home" is usually Indiana, Ohio, Iowa, Chicago or wherever.
Third, when times get tough it is branch plants which shut down first or lay off First or pull in their financial horns and say: "We have to close." There is no way that branch plants will compete with their parent companies back in the United States.
With respect to the Foreign Investment Review Agency, we have heard many Conservatives, some Liberals and many businessmen in the country say that the Americans do not like FIRA and therefore it is shutting out capital investment in Canada. This is more of a perception than a fact or reality. Since FIRA was implemented, 91 per cent of all applications have been accepted. I think it is atrocious, it is sad and it is deplorable; I do not know why we hear all the whining on the Conservative benches, all the whining by their business colleagues and their corporate friends outside the House. It just does not make any sense.
Let us look at the other side of the coin or, more appropriately, the other side of the border. I should like to refer to an article which appeared on page 9 of The Financial Post of March 13 entitled: "U.S. stringent on foreign investment." It was written by Nicholas Patterson and reads in part:
First a look at some of the federal restrictions.
He was referring to United States federal restrictions with respect to foreign investment in that country. He continued:
The report says: "There are a number of U.S. restrictions which prohibit direct investment by non-resident aliens in enterprises engaged in intercoastal shipping, domestic radio, television, telegraph, domestic air transport, mining on federal land, hydroelectric power and atomic energy."
This means that in the U.S. it's illegal for a Canadian company to control a telephone company. In Canada, a U.S. company. General Telephone & Electronic Corp., controls British Columbia Telephone Co. Does that sound like investment reciprocity? In the U.S., the policy is that a foreigner, including a Canadian, can't get an offshore oil or gas exploration licence. In Canada,

July 6, 1982
The Budget-Mr. Blackburn
offshore exploration is dominated by U.S. companies. The same goes for uranium mining. Where is the reciprocity in that?
The article continued and was very enlightening. I hope Conservatives and business people across the country realize that the Americans have even tighter restrictions on foreign investment in their country than FIRA ever had.
The Americans have a Buy America Act which was brought in at the time of the great depression by Franklin Roosevelt. It means that a very large percentage-and I believe it is 50 per cent at the federal level and at the state and municipal levels very often it is higher-of all government procurement of goods, products or whatever it happens to be must be from American companies. We still do not have such a provision in Canada.
We have listened to the Conservatives, who have gone full circle historically. They used to be the protectionists, traditionally and historically. The Conservatives now want to sell out every square foot of factory space in the country for a quick buck to help us out of a time of economic distress. But we in this party are saying we should tighten FIRA laws, otherwise when the recession is over in the next two or three years, if it is over, we will end up with 65 per cent or 68 per cent of our manufacturing sector owned by foreigners, not 57 per cent, as at present. Let us not be foolish at this time of economic restraint.
There are two ways of approaching our major problems as we in the New Democratic Party see them. First, there must be a long-term structural change in the economy, a transfer of emphasis from resource-based megaprojects, most of which are based upon non-renewable resources, to a reindustrialization of the country which is job or labour-intensive and produces jobs at the rate of about $100,000 per job rather than the several millions of dollars per job that it costs in resource industries.
Second, in the short term we are talking about injecting capital into the economy at a time when there is plant underutilization to the tune of 31 per cent and at a time when there is an extreme downturn. On the one hand we are calling for a restructuring of our economic goals or a redirection away from the resource-based megaprojects to the employmentintensive industrial sector. On the other hand, in the short term we are saying, "Let us pump money into the economy now to get it moving again." This is not inflationary. It will not overheat the economy because, as I said a moment ago, we are underutilizing our plants.
The traditional Liberal policy is to gain short-term prosperity by selling off our resources to pay for our imports. That is the historical Liberal approach. But the megaprojects have fallen victim to the recession and the government must recognize the manufacturing sector as the engine of economic growth and recovery. Last year there was a $21 billion deficit in trade and manufactured goods alone. This helped to pressure the dollar down, and the government also failed to create the 200,000 jobs represented by that deficit. In the United States 24 per cent of the work force is in manufacturing; in Canada it is only 19 per cent. Again this is caused by reliance
on imported manufactured goods and selling off unprocessed or semi-processed resources to other countries.
Imports also drive down the value of the dollar. Incidentally, at the present time the government is bragging about its positive balance of trade. The reason for the net favourable balance of trade in this quarter and in the previous quarter is that Canadians cannot afford to buy imports. We are not importing the way we were during more prosperous times. This is not because of any great genius sitting on the treasury benches; it is not because of the Minister of Finance or any deliberate plan.
The plight of the country today is that we cannot afford the imports we would normally purchase. In the long run this may be a good thing. If the dollar dropped to 70 cents, we might then have to use our own initiative and creative capacity. We might have to start thinking about a change and we might return some backbone to government which is responsible to the people of Canada. Indeed, we might begin to manufacture goods which over the years we have allowed to slip away because it was easier and for a while cheaper to import them from offshore. I think those days are over.
Also the fact that we have to import so much in the way of manufactured goods drives up interest rates, which is another major cause of the depression that I mentioned at the outset. We would target certain industries where we have the largest deficits, such as the machinery industry. In 1981 Canada had an appalling deficit of $6.9 billion in its trade of machinery, or a loss of 69,000 jobs just in machinery industries alone. I represent the federal riding of Brant where there are two major farm implement manufacturers, Massey-Ferguson and White Farm. The government has made great efforts to try to keep these two companies afloat. I appreciate it personally and on behalf of my constituents. There was an ILAP designation for Brant. There were loan guarantees to Massey-Ferguson and several millions of dollars to White Farm for research and development. There will probably be in excess of $50 million of capital infused into the local economy as a result of ILAP.
The long-term prospects for my constituency are good, but let me look at the two agricultural industries. Last year, 1981, in the agricultural equipment field alone we had a net deficit of $1.3 billion, which represents a loss of 13,000 jobs in Canada despite a trade agreement with the United States. 1 notice that the Minister of Agriculture (Mr. Whelan) is listening to my remarks at this point. He would be interested to know that when Massey-Ferguson and White Farm were going full steam ahead a few years ago, their combined workforce in Brantford was approximately 5,000. As well, there were approximately another 2,000 workers in Toronto, which made a total of 7,000 workers.
If we did not have this net deficit in trade and agricultural equipment vis-a-vis the United States, we would be employing twice the number of agricultural implement workers than we are just in the City of Brantford, and this was during the good times. Today, Massey-Ferguson is down to about 1,400
July 6, 1982

workers from a workforce of 3,000 or 3,200. I understand this morning that White Farm is down to approximately 400 from a workforce of 1,200. This is one area where much can be done to return jobs to Canada without being protectionists or economic nationalists. We simply say that during tough times you must look after yourself first and then, if you have enough left, go abroad.
The story of the mining and construction equipment sector is a sad one, too. Finland mines about one-third of what we mine in Canada but our mining companies buy two-thirds of all their heavy underground mining equipment from Finland and Sweden. What a loss and embarrassment that is. What the hell has this government been doing for the last ten years? Not much. It has been plastering one band-aid on to another and pretty soon the whole bag will fall through. In fact, it already has.
There is a $563 million deficit in power generation equipment. There is a $898 million deficit in industrial machines. There is a deficit of $1 billion in machine tools. Last year these deficits were higher than Canada total balance of payments deficit and this is all in the manufacturing sector.
We would target the transportation equipment industry. We would establish Enterprise Canada, a Crown Corporation capitalized initially at $2 billion, to promote research and development in those healthy industries. We would promote those forward-looking, third wave industries in high technology in order to hold on to them, because I very much fear that if the Foreign Investment Review Agency is tampered with as a result of this budget, we will lose those small but up-front, state of the art, third wave high technology industries in Canada, as suggested by the hon. member for Yorkton-Melville (Mr. Nystrom) during question period yesterday. Those businesses are small and vulnerable, and as sure as I am standing here, "Silicone Valley North" will rapidly become "Silicone Valley South", controlled or owned outright by the Americans.
Finally, we would then force agreements on the multinationals if we could not make amicable agreements to make sure that for every dollar of sales that the multinationals enjoy in Canada, we must have a dollar's worth of production here. What is wrong with that?
I see that you are rising, Mr. Speaker, to indicate that my time is up. I could go on but I will not seek the indulgence of the House for extra time. I simply want to say what the classical Greeks said, that those whom the Gods hate, they first make mad. The gods obviously must hate this government.


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I have listened with dismay to the attacks which have been made against the budget in the past week. I have read Hansard as well as the newspapers. I personally believe that this budget outlines a positive course of action toward economic recovery. This is true whether I look at it from the viewpoint of my constituents in Essex-Windsor, from the viewpoint of the
The Budget-Mr. Whelan
food and agriculture industry or from the viewpoint of the nation as a whole.
My constituency is one that generally represents the content of Canada on a percentage basis. It is approximately 95 per cent urban and 5 per cent rural. I believe that I have a good understanding of what is happening in our country.
As my colleague the Minister of Finance (Mr. MacEachen) pointed out last week, the task before us is to bring down inflation and increase productivity in order to get our economy going again. I will reiterate some of the proposal the Government of Canada has made to lead the country toward this very desirable goal. I realize that some of these proposals have already been mentioned but I do not think it hurts to repeat them again.
Some of the proposals involve cutbacks in pay increases to cabinet ministers, MPs and senators; ceilings on pay increases for more than one-half million federal employees; limits on indexation of personal tax exemptions, family allowances and old age security benefits; restraint in price increases regulated by federal agencies; $750 million in spending for job creation and economic development incentives as well as $300 million to help Canadians buy homes. There is an extension of programs to stimulate home renovation.
With respect to co-operative housing, I was very much involved with co-operative housing in a co-op organization I was associated with before I came to this place. It had rough times and tough sledding then. I remember when we allowed people in co-op housing to establish their rent as a downpayment over one year and rent was about $60 a month at that time. Therefore, you know how long ago it was, Mr. Speaker. I was in the Toronto metropolitan area when we were involved in those operations at that time.
Another proposal provides for the construction of new rental units and to offset problems with mortgage renewals. As well, there is $400 million to reduce interest costs for small business undertaking new investment. There is $200 million to be made available through the Farm Credit Corporation for farmers to refinance debts at lower interest rates. Consultations are to take place with the private sector on proposals that could be implemented this fall to reduce taxes on Canadian investment and to reduce interest rates for small business, farmers, Fishermen and buyers of new homes.
This is a comprehensive and positive package. A number of these measures are of particular interest and benefit to the agri-food industry and I would like to explain them in a bit more detail.
First, the special farm financial assistance program. The government recognizes the severe economic difficulties facing many farmers in certain sectors of our agricultural community. In the past year interest costs have grown to become the leading input cost in Canadian agriculture, accounting for almost 20 per cent of total production costs. Last November we set aside $50 million to help farmers desperately in need to refinance their total debt load. Under this program, 382 farmers were given much needed interest rate reductions. Now

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The Budget-Mr. Whelan
that assistance will be offered to a further 1,600 to 1,800 farmers over the next few years.
This should be measured against bankruptcies. It is said that the maximum you must save from bankruptcy is 261 farmers who needed assistance last year, who did not receive it and went bankrupt. Some of them, no matter how beneficial a program could have been worked out, could not have been assisted anyway because they were that far down the road. Some of the economic plight or conditions they found themselves in took place before high interest rates, as shown if one checks their financial statements. As I said, this measure could help at least 1,800 farmers.
That does not mean that we will not continue with the right of the Farm Credit Corporation to enter the private money sector even in a bigger fashion than it has been involved before. Loans will be made at the going FCC interest rates for this special program to which I have just referred. Now the going rate is 16.5 per cent, but with an interest rate rebate of four percentage points for the First two years of the loan, and loan limits for the individual farmer, he or she will be able to borrow $300,000. Jointly, a farm partnership will be able to borrow $500,000. That is the maximum which will apply under those conditions.
The funding for this program comes from the budget allocation of $100 million and a reallocation of $116 million from existing Farm Credit Corporation funds. That is not all. Farmers will be able to continue to borrow money from other places.
Second, there is the small business investment grant. Both incorporated and unincorporated Canadian businesses, including farmers, are eligible to share in this $400 million federal interest subsidy program. Interest rate reductions under this program of up to four percentage points will be available for loans for new assets, such as farm buildings, machinery and equipment. The program covers loans of $10,000 to $500,000 for purchases made between June 28 this year and March 31, 1983.
One of the very important aspects of this program which has received little publicity so far is the fact that expenditures for scientific research are also eligible for interest rate reductions. I would certainly hope that the agribusiness and food industry firms take advantage of this provision to boost their research efforts in the next few months. The grocery products manufacturers of Canada spend less than one tenth of one percentage point on research. 1 hope they are listening. I hope they study this legislation. Maybe we can get them up to 1 per cent. Anyhow, they spend very little, so little that one can hardly measure it. They spend the least amount of any group in Canada. I hope they grab on to this incentive and go ahead with it because research in food production is our most important tool.
The small business bond, as set out in the November budget, will remain in place until the end of the year to help farmers and other small businesses refinance debt at reduced interest charges. The federal government is offering tax concessions to
commercial lenders which should enable these lenders to make refinancing loans at just a little over half the normal lending rate. We know from experience that these programs can be worked out and be very beneficial for many people in the farming community and in the small business operations of this country.
The new budget also contains a new capital gains reserve provision that answers many of the concerns expressed by farmers following the November budget. Anyone studying the ways and means motion will see what I mean. This provision is more liberal than the one proposed last December 18 and was modified from the November 12 budget. So, I think what is being offered at the present time is pretty darned good and that most in the farm community will be well satisfied with it.
I know that the agricultural community also has a special interest in the proposal to change the tax system to permit significantly reduced interest rates, perhaps three to six percentage points below the prevailing rates, on loans for new capital investment in this country. At the time we were debating the recent amendments to the Farm Credit Act in this House, many members of this House, many members on the agriculture committee and many farm groups indicated their support for special tax concessions to investors in farm mortgages. I am sure this support will again be voiced during the consultations which will take place, as outlined by the Minister of Finance last Monday night.
Wherever possible, the federal government will hold price increases in regulated sectors to 6 per cent in the coming year and 5 per cent in the following year. This could affect industrial milk producers and egg and poultry farmers, but not in the way in which many people think it will. Many think that those who are in regulated agencies or marketing boards will suffer tremendously. Let me tell Your Honour that the people in marketing boards are inflation fighters. They have accepted a form of control that no one else in our society will accept. Through Your Honour, 1 intend to outline to the House why and how this is taking place.
So many people in our society condemn marketing boards but they do not know anything about them. The only thing they know about them is what someone else said about them. They have never studied them. 1 recently addressed over 300 people at a meeting in British Columbia. Before the meeting I asked them for their opinions on marketing boards. Nearly everyone condemned them. When I then spoke to them in a forum, I asked: "How many of you have ever studied a marketing board?" Only two out of the whole group had so studied. The remainder were basing their opinions on editorials or radio commentaries. I would say that 99 per cent of the people who make those comments or write those articles have never ever studied marketing boards and what they do.
Let me just go into a few details as to how these price ceilings will be applied. For instance, concerning the regulated agencies, they are still being worked out, but 1 would offer a few observations on this point. Prices in the regulated sector which we are discussing have been below the general inflation
July 6, 1982

rate in the past year. Therefore, if everything else were in the same category, we would probably be asking people to accept these rates.
I will state some figures. Retail prices for dairy products in May were 10.9 per cent more than a year ago, but that is below the national rate of inflation. Poultry products were only 1.48 per cent more expensive than in May, 1981, and eggs were actually 2.66 per cent cheaper than a year ago. Therefore, how will a regulated agency be affected? Some farm leaders said: "What a terrible thing this will be!" Some of them should check what is going on in the regulated industries because, for instance, whole milk production in Ontario only increased 5 per cent for the whole of last year, and that is below what we are asking them to accept for the first year. We are asking that for the second year. Therefore, if the input costs are down, if everyone is productive and these people will meet some of the production figures, we will be inflation beaters and be very productive at the same time.
Producer prices for eggs have dropped four cents a dozen in the past 12 months. I am referring to producer prices, not retail prices. Producer prices for chicken and turkey have dropped three to five cents per kilogram. Producer prices for industrial milk have increased by $4.01 per hectolitre, or 11 per cent in the last year. That is also below the national rate. Because of the current weakness of feed grain prices, we do not expect the formula prices for eggs and poultry to trigger increases of more than 6 per cent in the coming year.
As I said, many people in our society, even in some farm organizations and some who are going bankrupt, are actually the biggest condemners of marketing boards. Many consumers think that marketing boards lead to higher and higher food prices, but that is just not so. Canadian marketing boards have a good track record as inflation fighters. I do not mind repeating that over and over again. That is because it is contrary to what some of our so-called brilliant economists in the country say. I know that Your Honour is very familiar with brilliant economists. I believe you obtained your economics degree from the University of Wisconsin. For instance, the Ontario vegetable marketing board has many members, some of them from the constituency of the hon. member for Elgin (Mr. Wise) who is present in the House, and some from my own constituency of Essex-Windsor. They have negotiated prices for processing vegetables this year which, on the average, are only about 5 per cent higher than they were in 1981. These farmers are doing that because they recognize some of the problems in our nation. Provincial marketing boards are doing this. How many headlines or commentaries have hon. members seen about what they decided to do this year?
At the same time, Ontario producers are increasing productivity, mainly because an incentive was provided by the federal government and by the Ontario government. For instance, we have placed a tariff on tomato paste to give tomato growers protection of 13.4 per cent, plus a devalued dollar. The province came in and gave outright grants of several million dollars to build tomato paste facilities. That means there will be thousands of acres of tomatoes, hundreds of thousands of
The Budget-Mr. Whelan
dollars will be spent, more jobs will be created in southwestern Ontario, and it will cost less than anyone ever estimated, not a 9 per cent, 10 per cent, 12 per cent or 14 per cent increase but, rather, a 5 per cent increase.
Take the price of pumpkins. Some people get $30.75 per tonne. If any of you ever buy a pumpkin, you will find you will pay $2 or $3 for it. Weigh it and then see how much the farmer receives for that pumpkin. He receives only 3.4 per cent more than last year, that is all.
Carrot prices are $72.30 per tonne. That is 4.8 per cent more than in 1981. The highest increase was for green and wax beans, up 7.5 per cent at $226 per tonne. These are products that are for canning, for processing.
Overall food price increases for 1982 are expected to be less than 10 per cent, and this easing in food price inflation is certainly good news for Canadian consumers. Individuals can keep their own food budgets from rising by even this amount by substituting seasonal Canadian fruits and vegetables and frozen and canned produce for costly imports of fresh produce. For instance, many Canadians think they have to have their head lettuce from Florida, Arizona or California. They might as well just take a good drink of water. There is no food value in head lettuce whatsoever. It has a little cellulose in it. If you want to eat something that is good and nourishing, many people say: "Who are you to tell us what to eat?" Well, we make a study in our department of what people should eat. The scientific evidence is there that cabbage will do you much more good and has many more proteins, vitamins and minerals than the costly head lettuce that you bring into Canada from the deep south about seven months a year. You can store it, you can keep it under controlled temperature storage. The temperature-stored cabbage will last for one year and it will be all Canadian. I see the member from Fraser Valley West (Mr. Wenman) opposite. He knows that in Agassiz and in Saanich-ton on Vancouver Island they are growing cauliflower all year round, except for six weeks in the year. If that industry expands, as we think it will, a big part of western Canada can be supplied by cauliflower all year round. It is excellent cauliflower; I have eaten it. They have shipped it here and I have eaten it there. Right in the stores in British Columbia there is Canadian cauliflower for two-thirds the price of American cauliflower, but because people are not used to eating Canadian cauliflower, they do not think it is as good. We know it is better, because those things that grow in the northern climate grow more slowly and it takes more time to take the nutrients out of the soil. Those products are better for you than those products that grow down south very fast. They have more of the things that you and I need to make a healthy living. How do you think I have grown so strong and feel as young as I do as the Minister of Agriculture? And I have been in politics in Canada for 20 years! It is because you are what you eat.


An hon. Member:: Right on!

July 6, 1982
The Budget-Mr. Whelan


Eugene Whelan: If I last as long as the former member for Prince Albert, that means that perhaps for 26 more years you will have to put up with me!
I am just saying that we have the potential for production here in Canada. Canadian farmers and food processors know first-hand the problems that inflation has caused in our industry. I know that they support the government's effort to bring down the inflation. General Foods, which is one of the largest produces in North America, has sent us a telegram saying: "We are prepared to do that kind of thing; we are prepared to co-operate with the government." That is the kind of thing that you like to hear.
I am sure the hon. member knows full well the potential for productivity in this product. The member for Fraser Valley West and those for some of the other parts of Canada, such as Saint Jean in Quebec and similar areas, know the potential for producing this Canadian food for our own consumption and for export.
The Minister of Finance has called on the provinces, on private industry and on all Canadians to share in the fight on inflation. Canadian farmers, as I said, have already been in the front lines in this fight. Some can say that they are bearing the cost of inflation. They are still surviving, though.
I see here an hon. member from Saskatchewan. Fast year in that poor province of Saskatchewan land values went up 25 per cent! That government in Saskatchewan did such a good job of making people so rich they all turned Conservative!


Some hon. Members:: Hear, hear!


Eugene Whelan: They left them with a big deficit, but I see that they are not going to get rid of the finance corporation; they have to have that Crown corporation so they will have more money to lower gasoline prices.


Mr. Althouse:: Mr. Speaker, I rise on a point of order. I would just point out to the hon. minister that there was not a big deficit left in Saskatchewan. I would prefer that the minister would keep his speech correct.


Eugene Whelan: There was not a big deficit? He knows that I know that they left it in such good financial condition that that is why they turned Tory. Those across the way have not made one suggestion to help the Government of Canada. As good Canadians they should be making some constructive suggestions about what we should be doing. They have not made one that I have heard, and I have checked the record very thoroughly, too.


Mr. Kempling:: Stick to the truth. Put it in high gear. You have a big lead.


Eugene Whelan: We are talking about the provinces and what they should be doing. I am told that the provinces are ready to do this. Premier Buchanan of Nova Scotia has already taken a step in the right direction. That is not a rich province; it is a province which has great financial difficulty. But that Premier has recognized the need across the country, to make sure that Canada stays alive.
When we talk about fighting inflation, we find that in the front lines there are the farmers there, and there are many others willing to join them in the front lines. Cost increases have outstripped price increases in many commodity sectors. Farmers not practising supply management have had little protection against the ravages of inflation. They have not had the 10 per cent, 12 per cent or 15 per cent wage increases that public servants, Members of Parliament and private industry employees have had in the past year. And yet, if other sectors of the economy had the same kinds of increases in productivity as the agricultural industry has had, we would have a much stronger economy today. So what is the member talking about? To listen to the member from Brant (Mr. Blackburn), you would think that no one in Canada was increasing productivity.
Just the morning after the budget was brought down, Mr. Speaker, my colleague the minister responsible for Statistics Canada and I announced the findings of the 1981 census of agriculture. We talk about efficiency. You hear some economists and other people talk about inefficiency because they are in a marketing board. Milk production rose by 7 per cent in the last five years, not went down, as some of the figures given by a previous speaker would suggest. Yet Canadian farmers produced that milk with 12 per cent fewer cows! Is that what you call inefficiency? There were 1.77 million dairy cows in 1981 compared with 1.99 million dairy cows in 1976.
In the poultry sector the number of laying hens declined by 12 per cent in the past decade, but the number of eggs rose by 10.5 per cent from an annual average of 209 eggs per bird to 241. Efficiency in agriculture is increasing all the time, Mr. Speaker.
Many words have been spoken and written about the budget in the past eight days. This House has heard a mixture of praise and criticism, statistics and economic theory, political rhetoric and personal opinion. In light of these varied observations, it is easy to be blinded and to fail to see the forest for the trees.
Some of the members opposite are concentrating their vision on the size of the deficit; the deficit should be lowered by massive cuts in government spending, they say. Others are looking at the number of housing starts; there should be a tax cut on construction materials, they say. More? Where? How? Where are the trade-offs these critics would make? Is it easy? It is easy for the opposition to say they would not have a $19.6 billion deficit, but they did not tell the public what increases in taxes and cuts in programs they would have to make to accomplish this. This past Sunday in my constituency in a little village called Comber, a rural community, the Tilbury West council under Reeve Jack Morris decided to give leadership to go ahead and build a senior citizens' complex, self-contained apartments. I do not know why the press did not report it, but at the meeting I said that it had cost $600,000 for these 27 units and that the majority-97 per cent-of the interest rate is subsidized by the federal government; so that the total
July 6, 1982

interest rate a tenant would pay on a subsidized unit was 2 per cent. I knew many Conservatives in the audience. Many Liberals were there. There were probably a few New Democrats, but they did not say they were. However, I asked whether they wanted us to cut that out. Did they want us to stop that expenditure? We were building those homes for senior citizens who had made such a great contribution to our nation. Did they want us to stop that 14.5 per cent or 15 per cent interest subsidy we were giving on these units? I asked them, please, to tell us if they wanted us to stop those government expenditures we are so bad at making.
Do hon. members opposite want me to cut expenditures for the Farm Credit corporation or for beef stabilization? What cuts would they make in Agriculture Canada's program? Many times in recent months hon. members opposite have criticized me for not spending enough on agriculture. The budget for which I am responsible has decreased from 2.4 per cent of the federal budget to about 1.5 per cent of the federal budget, but has agricultural efficiency decreased? No. Agricultural production has increased. The incomes of farmers who have looked after themselves have not suffered very much. Some have said I should have a $1 billion budget for the Farm Credit Corporation, and I have said I would like to have that. It has been said that I should spend hundreds of millions of dollars to help beef producers.
My department is making very good economic use of taxpayers' money. We are improving our services to the agricultural industry every year, yet our share of the federal budget is declining. We are able to do this by being efficient and by having a good economic ship with a good crew. We have an excellent crew in the Department of Agriculture, which is the most decentralized department and knows probably better than any-better than many; that is for sure-what is going on in this country. That is the way it has been since confederation. Agriculture Canada has been spread across the country. There are over 10,520 employees. About 2,500 of them are here in the capital area, and the rest are all over Canada. The people in my department understand what is going on in Canada and report to us what is going on. As I said, we are able to do this by being efficient, and I do not believe hon. members or the public could find much to cut out of my already very lean budget.
It is all very well for another political party to say it would not put a ceiling on civil service wage increases and that it would create more jobs, but it does not tell the public how. What alternatives are hon. members opposite offering? I remember when the right hon. member from High River was Prime Minister. High River is where he was born; I forget the name of his riding.


An hon. Member:: Yellowhead.


Eugene Whelan: The Toronto Star of October 20, 1979 said: "Clark backs more interest rate hikes". The other day the Leader of the Opposition (Mr. Clark) said, I believe on a
The Budget-Mr. Nowlan
hotline program in Montreal, that he has no alternatives. That is what was reported to me. When he was Prime Minister he backed the Governor of the Bank of Canada. I never heard that he sued the Toronto Star or reporting what he said incorrectly.
I see, Mr. Speaker, that you are ready to rise. I want to refer to one other matter, and I will be as brief as I can.
Who is Pierre Bourgault? He was a leading separatist in Quebec. What did he say, as recorded in the Montreal Gazette? He wrote an article in his own hand. It was copied in the Ottawa Citizen. It was not copied in the Windsor Star. Why? The Windsor Star did not copy it because it was too positive for a separatist to say. This is what he said:
Let's count our blessings.
Did I say blessings? Yes I did, because by comparison, we are blessed beyond reason.
I add "in Canada".
A transportation strike? A doctors' strike? Irrelevant. Interest rates? Unemployment? Inflation? The Quebec budget? Insignificant. The fall of the dollar? The economic crisis? Trudeau, Levesque, Drapeau? Mere incidents.
Who are we to complain?
And yet we complain. And not without reason. We're not used to so many problems hitting us at the same time. We're used to being spoiled. We're used to our big and small privileges. And if we're deprived of some of them, we tend to imagine that we're deprived of our most basic needs.
I'm half-joking. Of course we're in a mess. But, at the same time, we musn't cry too loudly, because the rest of the world has every reason to be envious of our problems.
The kids on the Falkland Islands (British and Argentine alike) would rather suffer a Metro strike. I'm quite sure of that.
The population of El Salvador would rather go without doctors for a few days-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. minister, but his time has truly expired.


Eugene Whelan: It goes on and on, Mr. Speaker. This was written by a separatist who would have torn this budget apart, and he tells us about our blessings in Canada. Thank God for our blessings.


Mr. Tousignant:: Mr. Speaker, I rise on a point of order. The minister asked what programs should be cut. Hon. members opposite want programs to be cut. They all have the-


Mr. Deputy Speaker:: Order, please. The hon. member for Temiscamingue (Mr. Tousignant) is not raising a point of order.


William James Kempling: Make a speech. Get into the debate.


Mr. Pat Nowlan (Annapolis Valley-Hants):: Mr. Speaker, 1 must say I enjoyed the performance of the Minister of Agriculture (Mr. Whelan) here today. He is usually an entertaining speaker. In the farm halls of the nation and across the fields of the nation he can make quite a contribution.


William James Kempling: And in the barnyards.


John Patrick (Pat) Nowlan: I am not exactly sure what the minister eats on a day to day basis, but I certainly know what he spreads

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The Budget-Mr. Nowlan
around in this House. We are supposed to be talking about the budget, not the estimates of the Department of Agriculture, but the minister used most of his speech to discuss the estimates of his department. The estimates of the Department of Agriculture are not before the House.
When it comes to agriculture, I think hon. members on this side of the House would tend to agree with the minister, knowing full well that he has not been able to get the necessary funding for many agricultural programs. I certainly do not want to see any cuts in agricultural programs. The industry is basically a very productive and progressive segment of our economy, but we are not supposed to be talking only about one segment of our economy.
When the minister gets out of the hallowed halls of Ottawa and gets away from the insulation of Ottawa and goes about the country-I admit he does that a little more than many other ministers-and when the country is as perplexed, troubled and sick as it is today, I do not think people would appreciate a speech of buffoonery and faint sarcasm like the speech of the minister here today.
Every segment of our society is sick, but we in this House, whether in the opposition or on the government side, would not underestimate the bounty of Canada. What makes us feel so badly is that in spite of our bounty we have had a government for 14 years under the present Prime Minister (Mr. Trudeau)-except for a brief interval of six months-which has put our economy into dire straits, to coin the Prime Minister's own words.
I do not intend to belabour the Department of Agriculture estimates reviewed by the minister. There is little in the budget for the farm community except, to use the minister's own words, a reallocation.
I listened to the minister, and I wish he would stop grumbling and belching now. As I said, I do not know what he eats, but it certainly produces a lot of gas. I would just as soon he spread what he is spreading here across the fields of the nation. Farm productivity would certainly be enhanced.
The fact is that the little help in the budget for the farm community is mainly a reallocation of existing funds. In order to qualify for the small amount of assistance in the budget, a farmer would have to be in dire straits. If what the minister was talking about today is so good, why was it not in the November 12 budget or even in the first budget of the Minister of Finance (Mr. MacEachen)? No matter how sincere the Minister of Agriculture is-and I give him credit for being sincere in the interests of the farm community-the fact is that in the cabinet of which he is a member he does not have enough clout to get the funds necessary for agriculture.


Eugene Whelan: Mr. Speaker, I rise on a point of order.


John Patrick (Pat) Nowlan: What is the problem?


Eugene Whelan: I have a point of order. Mr. Speaker, the hon. member is trying to tell the House I have done nothing. In his own riding we built a research centre at a cost of some $20
million. And the hon. member is not even on the government side of the House.


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


Mr. Fisher:: But it is an important point.


John Patrick (Pat) Nowlan: Mr. Speaker, the minister knows well-and he is now making his exit-the history of that research centre. It took about 11 years from the time it was first conceived in the Department of Agriculture to the time it was finally built. It was on stream in 1957, 1958 and 1962 when a former member from that riding who happened to be of the same political stripe as I am had it finalized. It was the change of government in 1962-63 that deprived the farm community of Atlantic Canada of the much needed research station at Kentville, Nova Scotia. It became entangled in the political cross-currents in the land and it was only after two other research stations were built, due to the concerted efforts of the people, that the station was finally built. And I am proud it was, Mr. Speaker.
But enough of this distraction and diversion. The agricultural budget is not the subject of this debate. Today we are talking about the budget-the third confessional of the Minister of Finance of Monday, June 28. It may be appropriate that this is the ball season because I liken the Minister of Finance to that eminent batter of old called Casey, who swung three times. When he swung and missed the third time there was gloom in Mudville. What we heard from the minister on Monday, June 28 was certainly a message that cast gloom right across the country. It did not live up to the expectation that the minister stimulated when he announced the budget in a hurried fashion in the House not so long ago. Because of those expectations of a budget that was supposed to address some of the fundamental problems of the country, the dollar, the stock market and the buoyancy of the Canadian economy are all much worse today than before the budget.
If we need an example of the reason for this crisis of confidence, it was illustrated in the answer that the Minister of Finance gave to a question put by the hon. member for Etobicoke Centre (Mr. Wilson) in question period today, who referred to yesterday's headline to the effect that Ottawa borrow $2.3 billion to prop up the dollar. The minister gave the most amazing answer and tried to suggest that this was an unusual thing and that it was not a loss when you had to borrow $2.3 billion to prop up a dollar that was sagging. If he could have given a full answer I suppose he might have tried to turn the loss incurred by the interest payment on that $2.3 billion into a profit by his figuring. Most of us cannot begin to appreciate sums of such magnitude and this is part of the problem.
The minister reminds me of the character in Alice in Wonderland. Alice was talking to Humpty-Dumpty who told her that when he used a word it meant just what he chose it to mean and nothing more or less. Alice said that the question
July 6, 1982

was whether he could make a word mean so many different things but Humpty-Dumpty replied that the question was which was to be master, that was all.
A headline in the business section of the Montreal Gazette today refers to the $2.3 billion that is needed to prop up the dollar. We must also consider the run there has been on the dollar since January and the money we have had to borrow to prop it up. Since January the government has taken action in the financial markets to defend the dollar by selling off $1.5 billion in foreign reserves, by borrowing almost $1 billion in standby credits from Canadian banks; by arranging standby borrowing from foreign banks of $1.5 billion; and by arranging for a new bond issue of $500 million, a total of $4,347 billion U.S. since January in order to try to keep our dollar at an artificial level.
Notwithstanding that massive injection of billions of dollars which cost our taxpayers a lot of money, our dollar has fallen three cents in that period. Of the $2.9 billion that there were in foreign reserves at the end of June, $2.4 billion or 82 per cent is represented by funds borrowed from abroad.
We are in dire straits with regard to our foreign reserves and that affects interest rates. This question was not addressed in the budget the other night. The Minister of Agriculture, who has left the House, can talk about stop-gap programs, but 1 agree with him that it is interest rates that is killing the economy, not this hocus-pocus of band-aid and postage stamp solutions.
1 want to come back to the matter of foreign reserves and put in simple terms what that $4.3 billion represents.
In his first budget the minister struck at the oil companies and at the energy program. In the next budget on November 12 he struck at foreign investment. I suggest that in this budget, as my leader suggested earlier in this debate, he struck at the people of Canada. By removing the indexing, in effect he is imposing a $1.3 billion tax increase.
As has been repeated ad infinitum in the House, senior citizens will find that their old age pension is capped. Anyone who suggests that a senior citizen whose income is just above the GIS qualifying level does not need help, does not understand the plight of our senior citizens. Not only will the old age security payment be partially indexed, but pensioners will be paying more tax due to the deindexing of income tax. Old age pensioners not eligible to receive the guaranteed income supplement, that is single people with total incomes above $8,500 and married couples with total incomes of about $14,300, will receive $80 less per person or $160 less per couple in 1983-84 because of the 6 per cent cap on indexing in 1983 and the 5 per cent cap in 1984. They may also have to pay more income tax because of the partial deindexation of the tax system. Meanwhile, upper-income taxpayers earning more than $30,000 per year continue to enjoy the full benefits of the reduction in marginal tax rates in the budget of November 12, 1981.
I suggest that the coach of this team that has the Minister of Finance throwing the pitches had better start finding a substitute for the world series in the fall. This capping of old age pension payments will come home to haunt the Minister of
The Budget-Mr. Nowlan
Finance and every member of the government as they go around their constituencies, if and when we ever have a summer adjournment.
It is not just senior citizens who are affected, of course, but those who receive family allowances with a 6 per cent cap. Anyone bringing up a family is faced with escalating food prices. The Minister of Agriculture may talk about some kind of program to maintain the price of food and may extol the virtues of marketing boards, but I should like to know how he will try to control the cost of the imported commodities that go into our food.
The question of unemployment was really not touched upon in the budget. We all know that very soon unemployment insurance premiums are to be revised. A story in The Globe and Mail of July 2 dealt with the sad state of the unemployment insurance fund. Last month payments from the fund showed a 41 per cent increase over the same period last year. More than $2.75 billion was paid out. I will read the whole story because it was tucked in to the back pages of the financial section of a lot of Canadian newspapers which were still trying to digest the budget. The Canadian Press story, which has not been refuted, reads:
The federal Government paid out more than $2.75 billion to unemployed people from January to April this year, a 41 per cent increase over the same period last year. Statistics Canada said yesterday.
Preliminary figures show that for the week ended April 17, claimants qualifying for benefits totalled 1.16 million, a record number.
The count was also 3 per cent more than for the previous month-when a drop is usually recorded-and 45 per cent more than for April, 1981.
That follows release of federal budget figures on Monday that forecast a $2.2 billion deficit for the unemployment insurance fund for 1982 instead of the $218 million shortfall predicted last November.
I will come to the deficit, Mr. Speaker. In fact, there is so much to say about this budget that time really becomes of the essence. The article goes on:
Employment Minister Lloyd Axworthy also confirmed on Tuesday that unemployment insurance premiums will have to be increased because of the soaring jobless rate which now stands at 1.25 million or 10.2 per cent. Mr. Axworthy said the Government would not announce the new premiums until the fall when more complete figures become available.
But Finance Department officials say premiums could rise to $2.50 next year for each $100 of insurable earnings, up from $1.65 this year. Rates for employers, currently $2.31, could rise to $3 or more, the officials said.
That is certainly an increase far above the 6 per cent that the minister is trying to get us to swallow. Then we have the really staggering punchline, because I was in this House when the unemployment bill went through and we warned about some of these problems. It says:
Earlier this year, StatsCan reported that Ottawa paid a record $4.8 billion in unemployment insurance benefits in 1981, a 10 per cent jump over 1980. The fund registered a $360 million surplus last year.
Payments this April amounted to $691 million, down 12 per cent from March but up 51 per cent from the $458 million disbursed in April, 1981.
The previous prediction of a $218 million deficit was based on Finance Department forecasts last November estimating average unemployment in 1982 would be 7.8 per cent.

July 6, 1982
The Budget-Mr. Nowlan
There are estimates that up to three million people could be unemployed at some time during the year.
We all know, Mr. Speaker, that the minister predicted just seven months ago a deficit of $10.2 billion and then came into the House on June 28 and admitted-and goodness knows what it is going to be at the end of the fiscal year-that it is going to be close to $20 billion. Then we have a prediction for the unemployment insurance fund, which is a special account and not part of the total deficit, of a $218 million deficit; but in fact it is going to be more than $2.5 billion. Anyone in private industry or carrying on business by himself who was so out of kilter in his projections would have gracefully resigned, let alone be fired, for making such irresponsible projections.
I want to come to the point of just what is a billion and how you can relate to the billions the minister talks about in the deficit and the UIC fund. I went back and did a little research on Canada's budgets. There was a minister of the Crown who used to say "What's a million?" That was the Hon. C. D. Howe when he was being chastised for being so loose with public money. Now, of course, it is easier to say "What's a billion?", since we are into that realm. The billions just boggle the mind.
When I first came here as a member in 1965 the total budget was $6.5 billion. With supplementary estimates it got up to $7 billion. When the present Prime Minister took over, the total budget-not the deficit-was $10.2 billion. They were horrendous figures then, yet now we are talking about a deficit of some $20 billion. That is equivalent to someone overspending by almost 30 per cent. No wonder we are in difficulty; interest charges on the debt will be $45 million a day, which is equal to 9,000 taxpayers paying $5,000 in taxes every day.
This budget deficit is more than the total of all federal budgets for the first 74 years of this country's existence. We did not go over $16 billion in total budgets until the 75th year, the war year of 1942, when it went over $18 billion in total. That is the type of monstrosity we are talking about in terms of deficits and debt that this country is carrying. In effect, the debt represents 22 per cent of the budget, or $700 per person, $1,800 per taxpayer. When you stop to think that the average taxpayer pays approximately $4,000 in federal and provincial taxes, then almost 45 per cent of those taxes goes to service the debt. Is it any wonder that we have real problems in this country today when spending has gotten so out of control? We did not have a budget in excess of $2 billion until the fourth year of World War II, 1943, when we had a $4.3 billion budget. And all this money spent to service the debt does not provide one pension, make one medical payment, or help postsecondary education. It is, in effect, money out the window.
1 know my time is running out, Mr. Speaker, but one has to stop and look at the fact that it takes 75 years to exceed the $18 billion figure in total budgets, and then in one seven-month miscalculation the Minister of Finance comes into this House to report a $20 billion deficit and then has the nerve to stay on as Minister of Finance. That just shows the enormity
of the problem, one that is not going to go away with a waving of the wand like Merlin the Magician.
If things were not so serious, one might call this Minister of Finance the court jester of the finance ministers of the world. He likes to pretend that he is King Canute and can hold back the waves. For years, especially the last two or three, we have heard every possible answer to the problem of interest rates. Up until June 28 the minister has said there is nothing he can do about interest rates in this country. The problem is caused by other countries or the ugly Americans to the south. That was his answer month after month and year after year to the dilemma of high interest rates, certainly since the Liberals took power after the last election. The minister always said it was factors offshore that affected interest rates. Now out of the blue, realizing the deficit has risen to $20 billion in seven months from a $10 billion prediction-a 100 per cent miscalculation-let alone the run on the dollar of $2.75 billion, and the over $4 billion since January, those two factors most likely forced the minister to come into this House with a budget. Then he tried to bamboozle the people. But the people will not be bamboozled when the minister's answers for two years have been that interest rates were always a result of offshore events.
When we look around we see that interest rates in the United States are still 16.5 per cent. In Germany interest rates are 13 per cent and Japan is the only one with an interest rate of 6 per cent. France's interest rate is 14 per cent, as is Great Britain's. Switzerland's interest rate is 9 per cent and Italy's rate is 22 per cent. Canada's interest rate is anywhere from 17 per cent to 18 per cent to 19 per cent, depending on how preferred a customer you are. Some people pay over 20 per cent on their bank borrowings. Yet the minister brought in this 6 and 5 per cent tangle, about which he is supposed to excite Canadians and perhaps have them believe in him when Canadians have no reason to believe in him in view of the fact that he has struck out on two previous occasions. I suggest the way the stock market has reacted and the way the dollar has reacted since the Monday night budget means that the minister has also struck out again.
The only way this crisis of confidence in Canada can be resolved is to have a cleansing of this government. If this government is so proud of everything it has done, then it should go to the people with an election. The motion we are voting on tonight is that the government resign. Certainly if the Minister of Finance had any political integrity at all after he has led the Canadian people for two years down this deadend street of high interest rates which are crippling the economy, he would resign.
You can talk about all the billions of dollars worth of programs you want, Mr. Speaker, but there is one item which really focuses attention on the mentality which affects this place in terms of spending other people's money, that is, spending taxpayers' money. The other day my colleague, the hon. member for Peterborough (Mr. Domm), gave an example
July 6, 1982

of this. It is almost impossible for the public to appreciate what billions of dollars are. Even we cannot appreciate billions of dollars. But when you get some human story involving dollars misspent perhaps the figure can be multiplied and someone can understand what is meant when you talk about billions of dollars. The hon. member for Peterborough moved a motion under the provisions of Standing Order 43 on June 29, 1982. It was not approved, of course. He discussed the case of one Janet Smith, an economic adviser in the Privy Council Office. An article was written about Janet Smith in the Peterborough Examiner on June 28, 1982. This was the same day as the budget. The article is entitled "Stop Janet Smith". It reads:
Public criticism of government's excessive spending has been less effective than it should have been. The reason in our view is that it lacked focus.
No more.
Last week the Privy Council Office announced that it will send Janet Smith to the Riviera to learn French. She will be there for four months. The bill to the Canadian taxpayer will be $11,800, plus her full salary.
Now, Ms. Smith is an economic adviser to the Privy Council. She is paid a salary of $75,000 a year. She is not, however, bilingual, as the job requires. Not for want of trying. She has tried and failed, a number of times.
The government felt that sending Smith to the federal language school in Quebec City would not work. She would be aware there of the issues of the day, and that would detract from her ability to learn.
Four months in the South of France, at public expense, was the obvious alternative. No issues, no money worries to distract her at Nice or Cannes or St. Tropez or whatever.
We make this suggestion with no tongue in cheek:
Every Canadian capable of writing a letter in either official language, or telephoning a government office or a Member of Parliament, should do so and issue the order clearly understandable in either English or French: STOP.
We should make it our business to see to it that Janet Smith, no matter what her difficulties with French, no matter what contribution she has made as an economic adviser to the present economic mess, does not get four months holiday in France at public expense.
We should make it our business to stop these gross abuses of public money.
I will not read any more, Mr. Speaker, because I see you have indicated that my time is up. But it is an interesting, ironic twist that on the very day of the budget this story breaks of an economic adviser in the Privy Council Office, well paid by any standard, going at taxpayers' expense, in the amount of almost $12,000, to France to try and develop a facility in French, for which we all commend her, when we have language schools in Canada that certainly should be able to do the job. That is absolutely symptomatic of the waste of taxpayers' money.


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: The situation will not be changed until we are able to change this government. The sooner we have that opportunity, the better it will be for the people of Canada.


Some hon. Members:: Hear, hear!


Mr. Leonard Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, at times such as these when we have several areas of international tension, pressures from international economic difficulties and dislocations in the marketplace, high unemployment which has become the mark of industrialized countries, and high interest rates accompanied by high inflation, governments must have underlying, long-term goals to overcome these enemies of man and management. While we talk
The Budget-Mr. Hopkins
about long-term goals, governments must also be flexible in their policies to make sure that they arrive at those goals to recovery. If a policy does not work, then it should be changed and adjusted and no finance minister or any government should be hidebound or glued to interim policies that are not contributing to the long-term goals of recovery for the economy and smoother times for people in all walks of life. The major aims of the June 28 budget are to lower inflation and interest rates. In my view, interest rates are one of the biggest curses of all times. The budget is designed to help Canadians who are most in need of lower interest rates and the complimentary reduction in the Canadian rate of inflation. People buying new homes, whether they be existing ones or new ones, will get outright grants. Parents will receive a bigger child credit cheque. Business people will get significant relief from the high cost of money at the bank. Government tax revenues will be reallocated this year and next to activities that create jobs now and encourage new investment now. The thrust of this budget is to restore confidence, confidence in a future where inflation is reduced, and a future where new investment creates the jobs we need. If that confidence is not restored, you will not have money going into the economy and into development.
The size of the deficit is not due to massive government expenditures as some would have everyone believe. It is due to a lessening of revenues at the bottom and inflationary costs at the top. Therefore, unless inflation can be decreased the deficit will continue to increase at the top, and unless interest rates decline, the deficit will continue to grow at the bottom because there will be fewer taxpayers to provide for revenue.
It is important, then, that the June 28 budget set out to achieve the following: an attack on high interest rates; an attack on inflation; reallocation of funds to create jobs; a new housing package and new tax proposals. As a result, buyers of new homes will get a $3,000 grant on their purchases which will lessen interest charges. I am sure that other member's offices, like my own, have had many calls about this $3,000 grant. The forms will not be ready for ten days to two weeks but people will apply for the grants in the normal way through Canada Mortgage and Housing Corporation.
Small business people will be able to get money at an interest rate 4 per cent less than the going rate for investment in plant and equipment. Farmers and fishermen, too, will be able to get money at this lower interest rate.
Long-term planning by any government is not complete unless we take into account some of the obvious issues or problems that lie ahead. We cannot always look at tomorrow morning. Whether or not we recognize it, we are in the middle of another industrial revolution. We are rapidly moving along in the change-over from manpower to the fast-moving era of high technology. Computerization is simply a household term. We are rearing children today who may have to be retrained two or three times during their lives. Education systems across Canada must be upgraded to meet the requirements of the

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The Budget-Mr. Hopkins
times, or they will be guilty of contributing to future unemployment, an unsettled work force and more costly production because many will have to continue to be trained on the job.
What about security? There will be very little security in many areas of employment unless we revamp and reform the diversity and the plethora of private pension plans across the country. Right now there are private pension plans in Canada from which a person cannot collect even in part until he or she has served the full required number of years. There are pension plans which do not pay the spouse a cent if the employee dies in the last year of service. The use of the survivor option must be put into practice even for surviving spouses to collect as little as 40 per cent. Some plans pay a flat rate benefit or so much for each year of service. There are other plans where an employee can work for 20 years, but if she or he is not 45 years of age, the person is deemed not to have a vested right in the plan and therefore, if laid off permanently, walks away from the job with nothing. This is true in plans where the employer contributes 100 per cent to the plan, but surely employees must feel that they have earned that money. Portable pension plans are a must if we are to look in a realistic way at the future which our children will face. Some provinces and the federal government have made minor moves in pension reform at their levels, but a major overhaul by the two senior levels of government is a necessity.
At the beginning of 1980 there were 14,600 private pension plans in Canada, covering 48 per cent of paid employed workers or 4.5 million employees. This coverage ratio remained virtually unchanged from 1978. The figures indicate that 54 per cent of males were covered by these plans and 38 per cent of females. For almost 60 per cent of private sector plan members pensions were based upon average earnings over the entire period of employment, even though it might be 35 or 40 years, or they were on a flat rate amount per year of service. By comparison, 95 per cent of public sector plans were based upon the higher earnings in the years just prior to retirement, for example the last six years. Two thirds of public sector plans had indexing provisions, while less than 5 per cent of private sector plans had automatic indexing which was generally limited to less than 3 per cent annually or a fixed dollar amount.
In 1979, $3.3 billion in private pension or superannuation benefits was paid to 829,000 beneficiaries, for an average of $3,930 per person. That is not a very big income, but $4,516 was the average for males and $2,929 was the average for females. An additional $8.2 billion was paid by old age security, guaranteed income supplement and the Canada and Quebec pension plans. Employee and employer contributions to all employer-sponsored pension plans amounted to $7.6 billion during 1979. Nearly two thirds of this amount was paid into trusteed pension plans with funds amounting to $52 billion at book value at the end of 1980. There is no danger of those pension plans going broke. This $52 billion in trusteed pension plans means cheap borrowing for governments and others who borrow from them. It is no secret that governments borrow from them. In Ontario the provincial government borrows
heavily from them. The CNR is known to borrow funds from its unions' pension plan. Other Crown corporations and provincial governments across Canada do it. As a result they are able to roll over their debt at very cheap rates of interest.
One does not need to be a great mathematician to realize that pension plans are wealthy and will continue to become wealthier if only a little more than $1 out of every $3 taken in on average is paid out in benefits. A Department of National Health and Welfare study entitled "Pension Plan Coverage by Level of Earnings and Age, 1978 and 1979" confirms that private pension plan coverage is low, although it increases with level of earnings. While 48 per cent of Canada and Quebec pension plan contributors are members of employer-sponsored pension plans, only 11 per cent of those people at the lowest income levels are covered by an employer-sponsored pension plan. However, 84 per cent of those with earnings in excess of $30,000 are protected by employer-sponsored pension plans.
Reform of pension plans across Canada will mean more money in circulation and less sitting in pension funds. In the long run it could also mean less demand on public funded pension plans and greater justice and fairness in pension plans themselves. Therefore it is incumbent upon us to move quickly in meeting the challenges of pension reform. The Prime Minister (Mr. Trudeau) and the Minister of National Health and Welfare (Miss Begin) listed four main goals of pension reform-all people should be able to belong to pension plans, private pensions must be portable, all pensioners should be protected from inflation, and women must be treated more equally.
The Minister of National Health and Welfare has stated on many occasions that one top priority of government is to increase the guaranteed income supplement for single pensioners. She stated that this would be done as soon as resources permitted. This point now made, I must state that the most fundamental pension reform issue facing us is the continuing lack of adequate pension coverage. Without significant improvements in this area, other reforms will be meaningless for many Canadians. This kind of reform is in the true tradition of the Liberal Party of Canada, and we should act.
Some time ago a "W5" program on CTV gave a rather warped view of the activities of the Department of National Defence. It is important that the updating of defence equipment be placed clearly on the record. Because the Department of National Defence is very important in relation to any budget, I would like to turn my attention to a subject which is not often given the attention it merits. Of course, I refer to the Department of National Defence and the work of the Canadian military.
It must be greatly apparent to all hon. members that the current international environment is fraught with conflict- tensions in the Middle East, the Russian invasion of Afghanistan, tensions in Eastern Europe and in the Americas are rising, and there is renewed mutual suspicion in East-West relations. Although the SALT or START process, Strategic Arms
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Reduction Talks, is continuing and the UNSSOD II is still in session at the United Nations, there remains an uneasiness in the western alliance. This uneasiness has been translated into a new awareness of the needs of national military requirements.
I am happy to note that the Canadian government acted responsibly in recognition of the changing strategic setting and has allocated substantially increased financial allotments to the Department of National Defence over the past two years. The minister told me that he is confident that when the strategic overview is presented to cabinet his department will continue to receive a substantially larger share of the federal budget than in previous years.
This year, the share of the federal budget to be devoted to defence expenditures is 9.6 per cent, which is not a bad share when considering there are approximately 32 government departments and many Crown corporations. This will allow the Department of National Defence to pursue its re-equipment program with vigour. The Minister of National Defence (Mr. Lamontagne) is to be complimented for his efforts to re-equip the Canadian Armed Forces. It is obvious that he has some clout in cabinet and that is important to the members of our armed forces wherever they may be in the world.
The CF-18 Hornet fighter aircraft project is on schedule. The first of the 138 aircraft is due for delivery in October of this year. The final aircraft delivery is scheduled for late 1988 and the cost in today's dollars is expected to be about $5.2 billion.
The Canadian patrol frigate project is moving ahead. The two consortia involved in the design drawings for these are Saint John drydock in New Brunswick and Scan Marine in Longueuil, Quebec. All proposals will be presented to the department for approval and for a decision to award the contract. Some of the lessons learned by the British navy in the Falklands will be taken into consideration. New defence mechanisms to combat missile warfare will be included.
The next real milestone is in October of this fall, at which time proposals from the two contractors will be considered and the cost of these six frigates is expected to be approximately $2.6 billion in 1981 dollar value.
The Canadian Armed Forces and the militia units now have their full complement of general purpose armoured vehicles, such as the Grizzly, Cougar and the Husky. Those yet to come are for the logistics reserve. To date, 475 of the 491 vehicles contracted for have been delivered at a cost of $317.9 million.
As everyone knows, the Canadian Armed Forces have had an aging fleet of trucks to work with for some time. 1 am sure that no one was more pleased than defence personnel when they heard that a total of 2,767 of these vehicles have been ordered and the project is on schedule. The first one came off the assembly line on April 30 this year. The last one is to be delivered by mid-1985. The cost of this order will be $234 million in 1980 Canadian dollars.
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All 128 Leopard tanks which were ordered some time ago have long since been delivered but a small quantity of support spares are to be delivered by December, 1983. Most of these tanks are now in Europe and the total cost was $261.5 million in 1980 dollar value.
All 18 long-range patrol aircraft, well known as the Aurora, have been delievered and are operating very successfully. Support spares are expected to be received until December, 1984 at which time the project will be completed. To date $450 million has been paid out for these out of a total cost of $582.6 million to 1984.
The present authorized military person-years for the Department of National Defence is 81,148 in the regular forces and 21,372 in the reserve forces. The authorized civilian person-years is 36,893. The Department of National Defence budget provides for a military personnel payroll of $2,168 billion or 31 per cent of the total budget. The civilian payroll is $834 million, or 12 per cent of the total. Operating costs are $1,789 billion. The capital cost program for the department is $1,511 billion. Grants for contributions come to $196 million. Statutory government contributions to benefit plans amount to $543 million, for a total budget in 1982-83 of $7,041 million.
This year's budget represents a 19.6 per cent increase over lat year's budget. During the 1983-84 and 1984-85 fiscal years, the budget for national defence in Canada will increase by 37 per cent over those two years. The department is quite confident that it will be able to live up to the 3 per cent commitment that NATO ministers agreed to and that their home governments agreed to some time ago. That is a real increase in budget in terms of new equipment for NATO forces.
There has been considerable speculation with regard to the announced reduction in departmental spending estimates of $100 million over each of the next two years. I would like to repeat what the Minister of National Defence said last week on this subject. The reduction of $100 million per year will not be a loss to DND in strict terms. More to the point, there will be a saving. This year the DND budget is 7.041 billion. Included in this was a projected 13 per cent increase for military pay. The final agreement with Treasury Board that was negotiated ended up at an 11 per cent increase. Therefore, there will be a 2 per cent savings which amounts to some $40 million. Next year the military will be held to a 6 per cent increase and 5 per cent the following year, as outlined by the Minister of Finance (Mr. MacEachen). Therefore, the savings to DND will be in the area of $120 million to $140 million each year based on the fact that there is a saving of about $20 million for every 1 per cent increase in pay allocation. There will be no negative impact on any of the department's operational, maintenance or personnel requirements and none of the current capital euqipment programs referred to already will be affected.
The main thrust of the June 28 budget of the Minister of Finance is to reduce inflationary pressures. The Department of National Defence and the Canadian military have accepted

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their share of the collective Canadian burden. As they demonstrate their commitment to the economic battle ahead, I hope that other Canadian employers will follow suit so that it will be fair to all.
Before leaving the subject of defence, I would like to mention the work of the Standing Committee on External Affairs and National Defence during recent months, especially the excellent report on the reserves in Canada. Reserve allocations were again increased this year and improvements to equipment and support for our reserve units are proceeding. Improvements, however, must be made in concert with our over-all defence needs and the question in this regard is not simply one of funding, even though implementation of the major recommendations of the committee would require fairly large doses of additional funds to be allocated to defence. It is rather a question of how Canada, as a member of the North Atlantic Alliance, is to respond to the still emerging security requirements of a changing and far from encouraging strategic setting. I am encouraged that we will meet this challenge and the government will continue to provide the defence department with the resources to do so.
There is one item I want to mention before I close the subject. It is a matter which I would like to bring to the attention of the Minister of Employment and Immigration (Mr. Axworthy). It concerns the fact that members of the armed forces can be posted in Canada for 10 or 12 years and then suddenly be posted overseas. The member's spouse may have been in the labour market for the course of those years, but the moment the spouse leaves Canada to be with the partner overseas they have no claim for unemployment insurance benefits whatsoever. There should at least be an adjustment payment to such people when they leave the country. This is because their chances of employment at the locations they are going to are very slim indeed. As I said before, the Minister of Finance mentioned in his previous budget that the 3 per cent real increase in the NATO budget, our contribution to NATO as agreed to by NATO defence ministers and their respective governments, will be met.
I now want to turn to how farmers benefit from the budget of June 28. The budget provides numerous measures of interest to farmers, including financial assistance, investment incentives and other measures which will benefit farmers through their effect on the economy. Special farm financial assistance is a new loan program under the Farm Credit Corporation which provides $100 million in 1982-83, and a further $100 million in 1984-85 for farmers in financial distress. Through an interest rate rebate these loans, which should benefit some 1,600 to 1,800 farmers, will be provided at four percentage points below the regular FCC lending rate in those first two years.
The small business investment grant is an interest subsidy program for both incorporated and unincorporated small businesses, including farms, and it provides $400 million over two years to reduce interest costs by up to four percentage
points on loans for new investment. The loans are limited to $500,000 and exclude financing of land, leased property and automobiles. Subject to such limitations, loans under the Farm Credit Corporation could qualify.
The small business bond program, introduced in the November, 1981 budget, is continued in its present form to refinance small businesses, including farms in financial difficulty. The taxation of investment income and interest rates is an important subject. Proposals have been made to reduce the taxation of the inflationary component of interest income and capital gains earned on new investments. Such approaches, if implemented, would reduce the cost of borrowing to farmers and other small businessmen as well as home buyers. The 12.5 per cent tax on dividends paid by small corporations, including farm corporations, is postponed to January, 1983 and clarification is provided on the application of the reserve and forward averaging provisions.
The general thrust of the budget is to bring down inflation by wage and price restraint and stimulate investment and job creation while containing the deficit. This will hopefully help economic recovery, and thus the prosperity of agriculture. When agriculture does not prosper, neither does the implement dealer, nor the car dealer, nor the small business operator in that area. There are many offshoots.
How many farms will be assisted by the $100 million provided to the Farm Credit Corporation in the June 28 budget? The program is expected to last for a period of two years with loan approvals of $100 million expected in 1982-83 and $100 million in 1983-84. This should assist about 700 farmers. What are the benefits of the program to the farmer? The farmer receives an interest rebate of four percentage points for two years to reduce his effective cost of credit. Loans approved under the FCC's current interest rate of 16.5 per cent would actually cost the farmer 12.5 per cent for two years.
On the matter of the road to recovery, in these times of international, political and economic instability, we as Canadians must face harsh realities. We must all join in to fight inflation, to boost confidence, to take steps to create jobs and to deal squarely with the deficit. The government has outlined a viable and functional program of recovery. It has set specific guidelines to deal with every facet of the economy, both short term and long term. As I said initially, those short-term policies must be flexible and the government and the Minister of Finance must be prepared to change if the long-term goals are not seen in the light in which they should be seen. Cooperation is the keynote of this schedule of recovery and only co-operation will lead to its successful implementation.
Canadians have responded positively to many other emergencies or crises in the past and I have faith that they will do so again as long as they perceive that all is being done fairly, and this word is the key. The government has identified factors which have combined to make Canadian businesses reluctant to expand. They include idle capacity of equipment, falling profits, heavy interest costs and expanding debt.
July 6, 1982

In order to boost confidence in the marketplace, the government has presented the following proposals: Canadians investing funds in a new form of term deposit would not be taxed on that part of interest which reflects only the rate of inflation. Canadians investing funds in new plans for purchase of common shares of Canadian corporations would not be taxed on that part of the capital gain on such shares that reflect only inflation.
I have others listed which 1 would like to put on the record, but I see that my allotted time has expired, and I want to thank hon. members of this House for their attention.


The Acting Speaker (Mr. Blaker):: Does the hon. member for Victoria (Mr. McKinnon) rise on a point of order?


Mr. McKinnon:: I only want to take a moment or so of the time of the House. I wonder if the hon. member would permit a question?


Leonard Donald Hopkins: Yes, I will permit a question, Mr. Speaker.


Allan Bruce McKinnon: Mr. Speaker, I believe the hon. member said that the minister had promised there would be no change in that 3 per cent commitment to NATO because of any cuts made in the budget. I know that he is chairman of the NATO Parliamentarians Association, but he is not a member of the Standing Committee on External Affairs and National Defence, and perhaps he does not know that the Minister of National Defence (Mr. Lamontagne) has already admitted in committee that it would not make it, even before the budget cut. With $100 million taken out of the budget, it is bound to fall 1.5 per cent lower, and it is down around a 1 per cent increase in real terms. I know that he would not want to misinform the House and the country.


Leonard Donald Hopkins: Mr. Speaker, in my speech I already mentioned that the $100 million taken out of the budget did not, in fact, affect equipment purchases. I know the hon. member knows, as we know, that one of the last witnesses we heard in the defence committee said that it was something like 2.95 per cent. But if the hon. member looks at the over-all budget from now through to 1987, the 19.6 per cent in the budget this year and an additional 37 per cent over the next two years is built into it, so that the average will come out to 3 per cent over that period of time. Therefore, we will be able to pay for all the equipment purchases 1 have listed in my speech here today.
Again, I think the Minister of National Defence has done an excellent job in lobbying with the cabinet for the necessary funds. We know that all departments like to be well financed, but he has been fortunate in seeing to it that the defence department is finally coming into its own and that Canada may stand proud with all of the new equipment that is coming on stream.


The Acting Speaker (Mr. Blaker):: Order, please. Before I recognize the hon. member for Fraser Valley East (Mr. Patterson), I should attempt to convey to the House that some difficulty has arisen with respect to the number of hon. members who will speak for each of the parties. 1 do not think it is necessary, unless hon. members wish to do so, to proceed by way of points of order to settle the matter. The Chair will be pleased to hear from those hon. members who may have a
The Budget-Mr. Patterson
comment to make in this regard, but in the meantime, because of the order of hon. members who have spoken thus far, it would now be the disposition of the Chair to allow the hon. member for Fraser Valley East to speak. Then, whether it be this evening or before six o'clock, I would proceed again to recognize an hon. member to my left in the Conservative Party. Unless the Chair is informed differently during the course of the evening, I will still be looking to my left later on.
There has been some disorganization of the order of members who have been speaking. I certainly will be pleased, as I indicated, to hear hon. members who may be able to assist the Chair in this regard. This is not to be seen as a ruling of the Chair.
I also suggest that it is not necessary to proceed by means of points of order. I will be pleased to hear those members who wish to make a point to me, in my ear, so to speak.


Douglas Glenn Fisher: Mr. Speaker, I believe that the first speaker today was the hon. member for Trinity (Miss Nicholson) followed by the member for Brant (Mr. Blackburn), followed by the Minister of Agriculture (Mr. Whelan), followed by the distinguished member from Nouvelle-Ecosse, the hon. member for Annapolis Valley-Hants (Mr. Nowlan), and then the hon. member for Renfrew-Nipissing-Pembroke (Mr. Hopkins). That seems to be the normal rotation. I am sorry, I do not understand what the difficulty is that has arisen.


The Acting Speaker (Mr. Blaker):: I will be pleased to discuss it with the hon. member or any other hon. member. May 1 say again that the Chair has not made a ruling as to the order in which speakers will be recognized. I have indicated that there is some disproportion that has occurred in terms of the usual procedure in the recognition of speakers. That is not an order of the Chair. There is no difficulty. The Chair can be corrected and educated at any time. In the meantime, I did want to indicate to the House that the disposition at the moment will be to recognize several speakers from the Conservative Party, because it appears to the Chair that there has been an imbalance. But it is not final and I would be pleased to be educated as we move along.
The hon. member for Fraser Valley East.


Mr. Alex Patterson (Fraser Valley East):: Mr. Speaker, the motion which provides the launching pad for this debate was introduced by the Minister of Finance (Mr. MacEachen) in the following words:
That this House approves in general the budgetary policy of the government.
The minister then proceeded with a litany of serious and growing problems confronting the people of Canada, which 1 believe have resulted in large measure from the government's ill-conceived economic policy over the past number of years. He was absolutely right in stating:
Canadians want to know how we can get our economy growing again, how we can get industry to invest, expand and provide the jobs our people need. A million

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two hundred thousand among us are unemployed. Still more are struggling to make ends meet in the face of high inflation and high interest rates. We are still suffering, one way or another, from the recession that is battering our economy. We are all searching for a way out of it.
The minister's gloomy assessment is certainly well-founded. As one scans the picture of the past few months of this year, it will be noted that every indicator underlines the serious condition in which we find ourselves, and predictions for the future are anything but encouraging. The Canadian economy is in a tailspin. The gross national product fell by 2 per cent in the first quarter, the third consecutive quarter of negative growth, and the largest quarterly decline in 28 years. The Statistics Canada leading indicator has fallen for nine consecutive months. Corporate profits in the first quarter of 1982 were only 41 per cent of the level recorded in the same period in 1981. Manufacturing output in the first quarter of 1982 was only at 70 per cent of capacity-the lowest level of capacity utilization since records were first kept in 1961.
The transportation industry was operating only at 51 per cent of capacity. According to the Conference Board, consumer confidence is at the lowest level in the 20 year history of the consumer attitude index. Business confidence is at the lowest level in the five-year history of the business opinion service. In the past five months of 1982, 4,429 businesses have declared bankruptcy-up 36 per cent from the same period in 1981, and up 55 per cent from the same period in 1980. Farm bankruptcies are up by 61 per cent from last year's level and up 111 per cent from 1980. The unemployment rate in May was 10.2 per cent. A record 1,241,000 Canadians were unemployed. I believe that in effect it was greater than that. There has been a net loss of 320,000 jobs since August and 157,000 in manufacturing alone.
This would indicate, Mr. Speaker, that the minister's gloomy statement has been very well proven. Of course, when the members of the opposition are charged with being prophets of gloom, then, I guess, that will have to tie in the Minister of Finance as well, because that was the statement, those were the indications, that he gave to us in the outline that I present.
Interest rates have started to climb again as the government attempts to support the dollar. The chartered banks' prime rate is now 18.25 per cent compared to 16.5 per cent in the United States. At the time of the 1980 election, the Canadian chartered bank prime rate was 14.75 per cent. Ten years ago, it was 6 per cent. Consumer prices in 1982 were 11.8 per cent higher than in 1981. In contrast, the United States inflation rate is only 6.7 per cent. The main factors behind the May inflation rate were housing, up 13.4 per cent, and transportation up 16.1 per cent on a year over year basis. On a month to month basis, meat prices were 7.5 per cent higher in May than in April. The Canadian dollar is trading for about 78 cents, U.S., and has been as low as 76.86, U.S., in recent days. In October, 1976, the dollar was worth $1.03 U.S. At the time of the November budget the dollar was worth 0.85 U.S.
Now, Mr. Speaker, let me continue to support the statement of the minister. I would not like to disappoint him and take exception to what he said, because these figures do point out
the very serious condition that the minister outlined in his introductory presentation.
Since the election, gasoline prices have risen by 86 cents per gallon. Since the October, 1980 budget, 270 drilling and service rigs, worth a total of $1.1 billion, have left Canada. The Alsands project was shelved. The recession has made a shambles of the spending and revenue forecast made in the November budget. Spending will be more than the forecast $75.5 billion and revenues will be significantly less than the forecast $65 billion. As a consequence, Mr. Speaker, it is expected that the deficit originally forecast to be $10.5 billion this year will be somewhere in the range of $18 to $20 billion, and possibly higher.
This is the picture, Mr. Speaker, that has brought us to the present time. This is the backdrop to the picture and the presentation that the minister made just a few nights ago. Now, what are the projections for the future? In November, the Minister of Finance told us that in 1982 there would be real growth in the economy of 2.2 per cent, that the unemployment rate would be 7.8 per cent and that inflation would rise to 11.7 per cent. Now, less than seven months later, he tells us that we will have to endure a drop in the real gross national product of 2 per cent-the worst record of any OECD country-that the unemployment rate will be 10 per cent and that despite the oil glut and lower than expected food prices, inflation will remain at 11 per cent. The projected negative growth rate of the economy, minus 2 per cent, is the worst since 1962.
The government does not tell the Canadian people or the financial markets what it dares to project for the future. This is the same Minister of Finance who told us that between the second quarter of 1981 and the second quarter of 1982 real output would increase by about 1.5 per cent, yet during the first months of that period it had fallen 4 per cent.
I could go on with this litany of problems and the steps downward and backward as far as the economy is concerned, but I do not think it is necessary to do so at the present time. Those Canadians who have been speaking out regarding the budget provisions have been very disappointed and very pessimistic. Articles appearing in foreign periodicals have also indicated that there is little hope for the Canadian economy.
On the evening of Monday, June 28 the minister brought down another budget which failed dismally to present any policy that will in any way solve our major problems.


Mr. Paproski:: Disaster.


Alexander Bell Patterson: Perhaps some of the provisions in the budget have some value, but in the over-all picture it is difficult to understand how the minister has the gall to ask the House to approve in general the budgetary policies of the government when the response from the public is that the budget is a compounding of our problems rather than a cure and when the answers to questions directed to the government are devoid of any real hope and confidence.
July 6, 1982

I would like to place on the record one or two statements which have appeared in newspapers. An article in the Ottawa Citizen of July 3 states that the Canadian Chamber of Commerce has backed off from its initial acceptance of the federal budget by saying that the measures introduced will not bring down inflation or boost sagging investor confidence. The chamber also repeated the statement made by the president that the chamber is concerned about the anticipated $19.6 billion deficit this coming year. The article says that the magnitude of the deficit is alarming and that the mere existence of such a large deficit will continue to fuel inflationary expectations and erode investor confidence. That was one statement. Mr. Charles Lynch, who is rather well known in media circles, stated that it now seems clear that the budget is two and a half years ahead of its time and that the Minister of Finance is trying to catch up, having fiddled while the economy was burning and the deficit was eating up everything in sight.


Steve Eugene Paproski: Brutal, brutal government.


Mr. Parent:: Don't listen to the guy behind you.


Alexander Bell Patterson: I heard a comment. I am not quite sure what was said.
As I said, many commentators have expressed the very same views and launched the same criticisms regarding the present budget as those which were launched against the budget of last November.
As I indicated, there are several components of this budget which warrant some degree of support. Such components are retraining programs and assistance to home owners, small business, agriculture, fisheries and so forth. These are good, but in the over-all picture they will do little to ease the feeling of disillusionment and distrust with which Canadians view the policies and actions of this government. I say there is some degree of support, but a close analysis of even the seemingly more worthwhile proposals demonstrates that they are so fraught with uncertainty and vagueness that even now the result is skepticism and anger across the nation.
We all remember that the leader of my party appointed a task force to go across the country and give the people an opportunity to express their views in connection with the previous budget. Of course, to a large extent the philosophy of the previous budget and also many of the policies of the government are being carried on with the present budget. The people who appeared before our task force came to some conclusions, and one of them was that the November budget- and I say possibly the present budget-was completely inappropriate for the then current state of the economy, and indicated clearly that the government had embarked on a course designed to remove incentives for the achievement of economic and social goals from the taxation system and to replace them with direct government grants and subsidies. It seems to me that the direction in which we are going is to make everybody more and more dependent upon government not only for their livelihood through being employed by
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governments but also through being dependent upon governments for those assistance programs of which they are desperately in need because of the economic conditions in which we find ourselves.
In the course of the hearings of our task force certain individuals and groups requested that their identities be not revealed because they were afraid grants or contracts would not be forthcoming. Although they were critical of the government, they said, "We have to work with these fellows." They also pointed out that in connection with applications under various programs they were afraid their applications would be denied because of the criticism they were launching. Is this the kind of society we want in Canada? Are our people to be brought to heel by the fear that the political system might be used to destroy them unless they bow submissively at the feet of a dictatorial government? There is real fear across the country that our society will become so regimented, regulated and dominated by government that political and economic freedoms will soon be things of the past.
I mentioned the fact that some views were gleaned at the hearings held by the task force. The task force listened to Canadians expressing their views on the situation with which they were confronted. There was and is a growing feeling that the government has closed its ears to the voice of the people and has closed its ears to the needs of the various areas of the country. This committee provided a vehicle by which citizens could be heard and their views on the November 1981 budget considered. I want to tie all that in with the budget that is now before us which, while it gives assistance to a few people in several different sectors, does absolutely nothing to meet the challenge of the major problems facing the country at the present time which are making the programs which the government has proposed necessary.
The spokesmen for the government have said a number of times, and it was repeated by the Minister of Agriculture (Mr. Whelan) today, that they have never heard a positive suggestion come from members on this side of the House. Someone across the aisle says that that is right, Mr. Speaker, but that must be someone who is not often in the House.
Just the other day the leader of this party outlined some of the basic principles that would be necessary if we are to turn the economy around. Certainly this is what the Minister of Finance said must be done-that we have to change and improve conditions, that we have to improve employment and investment and a lot of other things. My leader stated categorically what the steps and the important principles were that must be underlined in any program to achieve these objectives.
Apparently hon. members opposite who are chiming in today did not hear the hon. member for Mississauga South (Mr. Blenkarn) when he spoke the other day and presented some of the changes that would be brought in under the direction of a Progressive Conservative government. I will enumerate some of them. We would eliminate the provisions of

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the November budget. The Minister of Finance has not done this; he has skirted around it and changed certain things. What he should have done was to say that the budget was a disaster, as the Solicitor General (Mr. Kaplan) said, and that it is to be changed and the government will start all over again.
The hon. member for Mississauga South said that if we were the government we would change the National Energy Program, and he outlined some of those changes. This is one of the things that has caused havoc in the business community of the nation. It has brought untold hardship and unemployment to thousands of workers; it has scared off investment and has been a disaster in total. My colleague also said that we would attack government spending and that an all-party committee would be appointed to consider priorities in government spending. He enumerated some of the things that are in question and suggested the elimination of the capital gains tax and of many other things.
I suggest that we on this side of the House have made many positive suggestions to the government, but it has not listened. Once in a while it takes up one of our suggestions and brings it forward in another guise but it has not repudiated this disastrous budget although my leader and my colleagues have pointed out what should be done to bring about a readjustment in the economy.
One of the recommendations of this committee of which I spoke was to restore individual and investor confidence by establishing a climate for careful development and expansion. This recommendation was the result of discussions held across the nation. Another recommendation was that we should get moving with major projects to stimulate the economy, to create jobs and to meet urgent national and regional needs. It was recommended that the November 12 budget be withdrawn and replaced with an economic plan to provide job creation and economic development to the private sector. Instead of that, the government depends more and more upon the public sector to bring people under its control where they are robbed of the opportunity of making their own decisions and living their own lives.
Now the government asks what should be done? The Minister of Employment and Immigration (Mr. Axworthy) pleaded with the opposition to help the government. Time and time again the government says that we must work together to beat the demons of inflation and unemployment. In November of 1979 it never thought of co-operation or working together. It had only one thing on its mind and that was to get back into office. Now it is back and it pleads for us to work together for the good of the nation. I wish there was more consistency in the government benches.
The government has failed to keep its promises to wrestle inflation to the ground, to beat unemployment, to bring interest rates down and to introduce equity and fairness in taxation and housing. It has failed, Mr. Speaker. A few changes have been made, but nothing substantial enough to meet the challenge.
The minister lacks confidence in his own declaration to the extent that he would not make any projections in his budget. He was ashamed to do that because he has been wrong so often and did not want to risk being wrong again.
The policies of the government have been disastrous and there is no confidence in the economy, in the government or in our ability to pull ourselves up. That has been reflected in the value of the Canadian dollar. The government is borrowing billions of dollars to try to bolster our dollar. Surely there is a positive way to meet these challenges and solve national problems, that is through the competent management of our affairs that Canadians have a right to expect.
This government cannot do it, so it should resign and let someone else take over.


Douglas Glenn Fisher: It may be completely unnecessary, Mr. Speaker, but in light of the current confusion, can we call it six o'clock?


The Acting Speaker (Mr. Blaker):: It being six o'clock I do now leave the chair 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.
The Acting Speaker (Mr. Blaker):: When the House rose at six o'clock the hon. member for Fraser Valley East (Mr. Patterson) had completed his remarks. I am given to understand that over the dinner hour the matter of the speakers on the floor during the evening has been settled. If that is not the case, then of course the Chair is prepared to assist in any way. The hon. member for Welland (Mr. Parent).


Gilbert Parent: Mr. Speaker, I just cannot refuse the thunderous applause which invites me to speak. You were correct, Mr. Speaker, when you said the hon. member for Fraser Valley East (Mr. Patterson) had just finished speaking at the break. He quoted a number of facts and figures, which I agree with for the most part. If I may say so, there are a few things which merit our looking at as members and, hopefully with our eyes open, as Canadians. I say that in the hope that the debate tonight will not be as partisan as it was earlier and that we can look at some of the problems and some of the solutions we on this side have to offer.
Today in Canada, Mr. Speaker, over 1.2 million Canadians are without jobs. That is a fact. Throughout the industrial world some 30 million people are unemployed. These numbers are not mere statistics. Each of them represents a personal tragedy of immense human costs.
About three months ago I had the occasion to speak to an audience at Centennial High School in Welland. There a young gentleman, who was the leader of a group called Coalition of the Unemployed, said, "Look at us, we are not mere statistics. We are humans. We have families. We want to
July 6, 1982

work." I believe that this young gentleman was saying precisely what the 1.2 million unemployed Canadians would be saying if they were here.
Earlier this month the Prime Minister (Mr. Trudeau) attended the economic summit with the other leaders of the leading industrial nations of the free world. At the Versailles Summit, the Prime Minister used the word "crisis" to describe the state of the world's economy. Surely that description is no exaggeration. All of our summit partners hope for a recovery. All of the leaders came away from Versailles determined to work within their own countries for that recovery. But they left with little assurance that there will be the kind of concerted economic action the world situation so desperately demands. Realizing that the beginning of recovery would therefore be further delayed, the Government of Canada concluded that it must act, and it must act at once. To that end a new budget has been brought down.
The Prime Minister, just last Wednesday, asked all the premiers to join as full partners in the battle for economic renewal.
The road back to recovery must begin with a realistic assessment of what this country can control and what we cannot control. Canada cannot deal with its economic problems in isolation; we can ease, if not eliminate, the impact of some problems, but the solutions to other difficulties depend on events beyond our borders. I do not think there are many members here who would disagree with these statements. We must know what we can realistically change and what is beyond our power to change by ourselves.
Canada is a trading nation. If our partners are suffering from a worldwide recession, then the international market for our products will be weak. That is an economic fact of life we cannot change by ourselves.
Canada is a resource exporting nation, and commodity prices have experienced their steepest decline in decades. At 58 cents a pound, for example, copper is at its lowest price since the 1930s. Lead, zinc and other minerals are not far behind. There is little that the government can do about the fall in worldwide commodity prices.
Finally, interest rates in the United States are hurting the whole world economy, and that is what the Prime Minister told President Reagan at Versailles. We all know that. The Canadian dollar, like every other western currency, is captive to the extraordinarily high real rate of interest in the U.S. These are the hard realities of a worldwide economic interdependence.
Yet, while recognizing the force of world conditions, we must acknowledge too that many of our problems originate here at home. Our inflation rate of 11.8 per cent is far too high. Our cost structure is becoming prohibitively expensive. To put it simply, we are pricing ourselves out of world markets. We are losing our competitive edge. All this we have done to ourselves. And what we have done, we can reverse.
I believe that expectations are at the heart of our inflation problem. In the past decade, it was natural for us to believe
The Budget-Mr. Parent
that our prosperity would continue to spiral upwards. We never questioned the roots of our prosperity. We did not look at the world situation and our impending vulnerability, but once again Canada is a trading nation and is affected by the ups and downs of the world economy. For a long while, a few Canadians-the poor, the aged, the helpless, the weakest, paid the price of those inflationary demands. Today only a few groups can pursue their expectations-the powerful, the protected and the privileged. It is the many who pay the cost in unemployment, in bankruptcy and in lost opportunity, not the few I have mentioned.
The charge of having excessive expectations can no longer be laid at the door of the unemployed logger in B.C., the struggling small-business man in Welland or the young homeowner renewing his mortgage in Newfoundland. The expectations of the 1.2 million unemployed have certainly been shattered.
To overcome the twin problems of uncertainty abroad and recession at home, the government has introduced an economic recovery plan in Parliament. We do not believe that everyone in the House is going to agree with it, but we do hope that all members will consider what we have put forward before passing final judgment on it. Three principles are central to that plan. These principles formed the foundation of the budget and the proposals the Prime Minister made to the premiers.
Our first principle is that every Canadian must play his or her part. To deal with our economic difficulties we need the support and co-operation of all. Government can provide leadership, but it is only through the individual decisions of many thousands of Canadians that progress will be made.
It is in times of national challenge and crisis that the mettle and magnitude of our national will is truly tested. I respectfully suggest that this is such a time.
Our second principle is that if we all have a stake in the outcome, we all must share in the effort, each according to his or her ability. Canadians are willing to make sacrifices so that others can be helped. Nobody wants to see his neighbour without a job, nor does any Canadian want to see his neighbour without hope and confidence for surely herein lies the greatest sickness, the greatest disease, because when a nation is without hope and without confidence it atrophies. It pulls back and it is unwilling to reach out to help those who cannot help themselves. We must ask those who are secure to help those who are not as secure. We must ask those who are working to assist the jobless. We must continue to protect the weak, the aged and the helpless. That is a commitment of the Government of Canada. I dare say that that is a commitment of every Member of Parliament who has been elected to come here and represent his or her constituents. But more than that, the commitment of the Government of Canada is a fundamental tenet of our society. We will not fight our economic problems at the expense of the aged, the poor or the unemployed. That would not be right. That would not be acceptable to us as Canadians.

July 6, 1982
The Budget-Mr. Parent
Our third principle is the firm conviction that if we have the will we can win this battle. It would be naive, even dangerous, to try to pretend that we are experiencing only a minor disruption. We are in a deep recession. We are in a crisis, as was stated by the Prime Minister at Versailles. But it would be equally wrong and equally dangerous to throw up our hands and say that all is lost, that we must sit helplessly by while inflation rages and unemployment grows. Despite our problems and despite all of the setbacks that we face now as a nation, Canada remains a land more blessed than most. It is true that it is probably in vogue today to knock one another here in the House. It is probably in vogue to try to dwell upon our ills. But in dwelling upon our ills we feed the sickness inside of us which says, "We cannot do anything." I for one, and I am sure many other members here, totally discard that assumption.
If we, Canadians, worked together, we could do more than simply preserve our economy. We could turn it around to upward growth. The three principles of responsibility, sharing and hope shaped the budget message. In it we proposed a four-part action plan designed, first, to bring inflation down to at least 6 per cent through a nationwide collective effort; second, to reduce the impact of high interest rates, especially for home owners, small-business men and farmers; third, to create over
300,000	jobs through direct government action and indirectly through improvements in the investment climate; fourth, to maintain the integrity of our social security system. The immediate objective of our society must be to cut inflation nearly in half, down to 6 per cent. We must move, as the Minister of Finance (Mr. MacEachen) said, from 12 per cent inflation to 6 per cent recovery. This seems reasonable, and the Government of Canada will lead the way by limiting to 6 per cent the indexing of income taxes and social programs such as family allowances.
With regard to income taxes, it should be noted that this is the first time since 1974 that there have been any increases in personal income taxes. Also, the Government of Canada will lead the way by cutting the salary increases of cabinet ministers and of Members of Parliament from 11 per cent to 6 per cent. I am talking about a cut, I am not talking about a freeze. That is in place now and will continue for the rest of the year. We will do this cutting while limiting the annual increase in public service pensions to the same figure. We know that these are drastic measures, but these measures must be taken.
Also, we will lead the way by ensuring that public service pay increases rise by no more than 6 per cent. It must be said that we realize public servants will be making a sacrifice. We acknowledge that sacrifice by them, but it does not in any way take away from the fact that they are doing good work for Canadians. That we ask them to share with us in carrying the burden is normal. They are at the forefront of the battle, as we are here in the House.
Finally, we will lead the way by holding regulated prices under federal jurisdiction to a 6 per cent increase. Through measures such as limiting the indexation of the tax system,
every taxpayer will be making a contribution to the inflation fight. If the 6 per cent figure we have imposed throughout the federal government becomes the norm in Canada, we will have made a great stride in restoring our international competitiveness.
The second part of our recovery plan is to provide relief from high interest rates. Again I refer to the meeting which I attended where groups representing ten different unions presented briefs at Centennial High School in Welland. The point stressed by all of them again and again-and especially by the Welland and District Labour Council-was that we must bring down interest rates. We must control interest rates or, in the end, they will control us; they will run our lives rather than our controlling them. Alexandre Dumas said in one of his speeches:

He said that like anything else, money is a good servant but a bad master. The same applies here to interest rates. If we let interest rates become our master, we are going to be the servants, we will lose our independence and finally, we will lose everything we have in this beloved country of ours, Canada.

A new and innovative indexed bond instrument will cut interest rates from between 3 per cent to 6 per cent for home owners, farmers, fishermen, small businessmen, home purchasers and investors in Canadian equities. To ensure that this major proposal is implemented properly, consultations will begin immediately with the private sector, and to bridge the gap until this measure becomes law, the Government of Canada will make available grants of up to $3,000 to help home owners with mortgage renewals costing more than 30 per cent of their income. The Government of Canada will now give relief to small business by reducing its borrowing rate by 4 per cent. Also it will provide more assistance for Canadian farmers by reducing their interest rate by 4 per cent through the Farm Credit Corporation.
I should like to quote from a news release of the Department of Industry, Trade and Commerce concerning Canadian small businesses. It reads:
Small businesses in Canada will benefit greatly as a result of Monday's budget . . . "The new budget has measures for dealing with the specific needs of Canada's small businesses"-
How will we do this? We will do it with reduced interest rate costs. It continues:
Direct grants will be made available to small businesses over the next two years to cover 4 per cent of interest costs on depreciable property, research and development. Incorporated and unincorporated small businesses as well as farmers and fishermen are eligible.
This new $400 million small business investment grant program is in addition to the ongoing small business bond program which provides interest relief in cases of financial difficulty.
Direct employment and economic programs will receive half a billion dollars of new money to provide jobs for Canadians. Of this $500 million, $300 million will expand programs such as the Enterprise Development Program, the Defence Industry Productivity Program, the Regional Fund, and the Industry and Labour Adjustment Program.
July 6, 1982

My riding of Welland has benefited on three different occasions by way of the industry and labour adjustment program. Many in Canada's small business community will benefit as Canadians move to take advantage of the new five-point housing package which was announced. Building trades will receive a major boost as housing programs begin to generate some 65,000 new jobs over the next two years. An additional 54,000 jobs are expected from the Canada rental support plan for the construction of new rental units. In total,
119.000	new jobs are expected. But perhaps what is the most exciting are the potential measures we will be taking to help small businesses and home owners.
The Minister of Finance tabled a consultative document containing proposals which, if implemented, would have the following effects. Canadians investing funds in a new form of term deposit would not be taxed on that part of interest which only reflects the rate of inflation. Canadians investing funds in new plans for the purchase of common shares of Canadian corporations would not be taxed on that part of the capital gain or on shares that only reflect inflation. Buyers of new homes will be able to secure mortgages from 3 per cent to 6 per cent below prevailing rates. Small businesses, farmers and fishermen will be able to secure loans for new capital investment at similarly reduced interest rates.
We are determined-and when I say "we" I mean hon. members on both sides of the House-to lower interest rates in the long term and to reduce their present impact upon the groups affected most. Lowering inflation and lessening the impact of interest rates will start the process of economic recovery, but to create the jobs Canada needs we must do even more. In my opinion jobs must come first. To that end we have ordered government departments to cut and reallocate their spending so that money can be freed for job creation. We will not add to the deficit through these measures, but the reallocation will be substantial. Our goal is to create more than
300.000	jobs over two years, many of them in the construction industry. We want this country to start building again. Through measures introduced this spring as well as in the budget our programs will create 150,000 jobs in the housing industry. Our goal is to put this country back to work.
Last week we protected our system of social benefits. Lower and middle-income Canadians who would lose because of cuts in family allowance indexation will gain a $50 increase in the child tax credit. For families making less than $25,000 a year there will be no loss of income. Similarly, those senior citizens who are receiving the guaranteed income supplement, the GIS, to the old age pension, will not have their benefits cut in any way. That point must be noted and repeated again and again so that we do not foster this type of anxiety among our pensioners. Indeed, the GIS will be fully indexed to the rate of inflation.
Our program of action does not end with consultation with the provinces. In the weeks ahead the Minister of Finance and
The Budget-Mr. La Salle
other ministers will ask leaders of business and labour to meet. Specific proposals will be made to them. As well, specific plans will be put before them. It is clear that we do not seek to use these discussions to identify culprits, to attach blame or to single out groups in Canada to bear the burden. Enough of that. We have had enough of trying to put the finger on someone else.


Roch La Salle: Who is it?


Gilbert Parent: Surely we should look at ourselves. The hon. member thinks that it is funny enough to make jokes when we have 1.2 million unemployed in Canada. I do not think it is a joke.


Roch La Salle: It is your fault.


Gilbert Parent: We have all been touched by economic adversity. Even the hon. member for Joliette (Mr. La Salle) who is the one who dares to make jokes on such a situation should realize that we have all been hurt. We are hurting now. If we do not act together, we will hurt more.
The interest of organized labour is the wellbeing of Canadian working men and women. That must be our interest also. The interest of business is the willingness of the investor to put his money to productive use in Canada. That is our interest as well.
Surely when factories are closing, when jobs are disappearing, when worldwide recession has reduced our export sales, individual Canadians should be able to rely on the leaders of the great institutions in their society to act together. I call upon all members here to do just that.
That is the message and the challenge we bring to Canadians. It is a message of hope and a challenge to share. We are confident that we can overcome our difficulties and return to better times.
Canada is like a family. In a time of personal tragedy the family can join together, stay together and either solve their problems or fall apart. This, then, is a challenge to us all as Canadians, to share in the sacrifices and join in the collective effort that will turn our goals into realities.


Some hon. Members:: Hear, hear!


Roch La Salle: Mr. Speaker, I hasten to take part in this debate which we owe to the government's bringing down its third budget in a matter of months, and 1 also hasten to comment on the remarks made by the member for Welland (Mr. Parent) before he sat down, when he implied that the member for Joliette was joking when he asked a simple question. Mr. Speaker, he said we should not try to find the culprit. I think we have every reason to ask who is responsible for this tragic situation. In fact, the hon. member admits the situation exists and that we are in the middle of a serious recession. He said, and it is perhaps the ultimate paradox I have heard in these several days of budget debate: when a nation is without hope and without confidence, it atrophies.

July 6, 1982
The Budget-Mr. La Salle
Unfortunately, the member for Welland fails to realize that he is one of the members of the team that put us in this situation in the first place. He also pointed out that after 15 years, the time has come to build this country. After 15 years, Mr. Speaker, I have heard and seen quite a bit in my time here in the House, and I am one of those Canadians who have deplored in every possible way the situation we happen to find ourselves in at the present time. And now members on the government side are telling us today that they are determined to put Canada on the road to progress!
How can Canadians as a whole believe such a statement when the Minister of Finance (Mr. MacEachen) has shown such unprecedented incompetence? How can the Minister of Finance, who was speaking about a deficit of about $9 to $10 million two or three months ago, confess publicly-and I can understand how embarrassing this must have been-this monumental deficit which quite legitimately frightens Canadian businessmen? Mr. Speaker, I have been sitting in this House for 15 years, if we exclude the few weeks when I was absent because I had the courage to offer something and to share the problems which were affecting all of Quebec. Nearly all businessmen and editorial writers consider this new budget the disaster of the century. I could quote a series of articles written by various English-speaking and French-speaking editorial writers. Everyone agrees on this point. The Canadian Prime Minister (Mr. Trudeau) is worsening the crisis of confidence and the new budget can only lead the country to depression and disaster. This is the type of comment made by nearly all editorial writers, and I find this rather exceptional.
1 believe that it is important to note that Mr. Ivan Guay wrote in La Presse:
The federal Minister of Finance, Mr. Allan McEachen, confirmed the predictions of all serious observers. He remained true to himself by bringing down a third budget which does not take our economy out of the rut where his two previous budgets have put it. He has indeed confirmed this-
To understand the situation, Mr. MacEachen did not bring down a new budget seven and a half months after the previous one to change the economic policy of his government, but rather to change the image of his government, which has been accused of a lack of leadership and whose credibility is rapidly going downhill. He has therefore attempted to give the people new confidence in his government and at the same time in the economy. However, as could be expected, he has failed on both counts.
Why do politicians keep on telling people just about anything as though we were all morons?
These are some of the comments made by this editorial writer about this government. He also adds, and I quote:
The federal government will inject $2.3 billion in the economy, but will take back $3 billion from your pockets.
This is the type of hypocrisy we are now witnessing. The hon. member for Welland (Mr. Parent) and many others are asking us to cooperate. In his budget, the Minister of Finance talked of sharing and said that the time had come to share the concerns and the problems of this government, this same government which has put the country in the situation we are now facing. The Minister of Finance asked us to share his
mistakes and his incompetence! This is too much, Mr. Speaker! I do not believe that the Canadian people would respect us or allow us-


An hon. Member:: Or forgive us-


Roch La Salle: -or forgive us if we were to cooperate with a government which has shown such incompetence in the last 15 years, and especially in the last three. Mr. Speaker, this debate on a second budget in less than six months is justified by the unprecedented failure of this government. The residents of the Joliette constituency are worried too and they live in a climate of uncertainty.
I share their concern, of course, and I submit that this government's wrong decisions, especially these last three years, have led Canada to bankruptcy. While the Canadian people was being deceived with constitutional reform, which anyway satisfies nobody and for Quebecers is a source of genuine indignation, the government, following the instructions of the current Minister of Finance, had deficits on top of deficits and increased government expenditures at staggering rates. Of course this put Canada in the situation we now have, the worst recession this country has ever known. And this with the complicity of his colleagues, including the Right Hon. Prime Minister and at least six dozen members from my province, and almost as many from outside. Being too weak to get the Minister of Finance or the Prime Minister out of their errors, they preferred through their weakness to share the errors of that government that led Canada into our current difficulties.
Not so long ago, Mr. Speaker, and it is important that Canadians remember this, this Prime Minister in his own province was boasting everywhere of the beauty of the land, its potential for development thanks to its territories and their resources.
How is it, Mr. Speaker, that those legitimate hopes faded so quickly? I will tell you, Mr. Speaker. From the solemn commitment of this Prime Minister in 1968 to a just society until the principle of fairness promised by the Minister of Finance in November last, is there any other term for this government than impostor in the current situation? Arrogance and hypocrisy replace co-operation between the provincial partners and compassion for this country's citizens.
I referred to the government's wrong choices over these last three years. I am thinking for instance of the government's excessive involvement in the energy area. The socializing attitude deep down in the Prime Minister's heart for more than 35 years was espoused by his party, unwittingly of course, because they are implementing the policies of the New Democratic Party which the Prime Minister was supporting before he joined the Liberal ranks. That government intervention, Mr. Speaker, equates to the loss of the megaprojects, which is
July 6, 1982

tremendously costly to Canada at this point, which cost billions of dollars of investments and the loss of thousands of jobs, with the direct complicity of the Minister of Energy, Mines and Resources (Mr. Lalonde). And they say they are capable of re-establishing a climate that is favourable to investment. The proof is there, Mr. Speaker. Those people have no respect whatsoever for free enterprise. By refusing to so admit publicly, they are forcing even the New Democratic Party to vote against the budget. I referred to the failure of the Minister of Energy, Mines and Resources. It is unbelievable the situation we are in, especially since these last three years. I listened today to the Minister in charge of Housing. He referred to something new, he would have us believe in new hopes, a recovery, when we know perfectly well he is responsible for the current housing situation.
Not so long ago, this government raked us over the coals because we had the intention of promoting the housing sector which is so vitally important for the economic development of our country. This minister is now talking about boosting the construction industry, but he is mainly responsible for the loss of 400,000 jobs in Canada because he refused to act and upgrade the major sector of construction. It is the same minister who even turned down ten of his own colleagues and a few ministers, failing to meet the emergency and to act quickly in that field. I was listening to him today when he spoke with the hyprocrisy which is the hallmark of that group of ministers, trying to raise the hopes of Canadians by telling them that the situation is not really as bad as we describe it. Mr. Speaker, we know full well that if we had primed the construction sector, the small and medium-sized businesses would not be in the mess they are in now. Small and medium-size businesses would have made profits and maintained a large number of jobs if the government had been attuned and had grasped the significance of giving a shot in the arm of the construction industry three years ago. Here again, the minister shirked his responsibilities and he is party to a bankrupt situation the likes of which Canada has never seen.
I heard the Minister of Agriculture (Mr. Whelan) who keeps on claiming that we have the best agricultural legislation, the best agricultural products and the best agricultural system. How can anyone explain, for instance, that farmers have never been as deep in debt as they have in the past five or six years as a result of policies which call for huge investments and unacceptable interest rates? Never have so many farmers been pushed to the brink of bankruptcy. But the Minister of Agriculture does not say one word about that. I might also refer to the Minister of State for International Trade (Mr. Lumley) who, as I am speaking to you this evening, has yet to solve the issue of shoes and footwear. The footwear industry is still waiting for an answer, but the Minister of State for International Trade makes it cool its heels. Along with his colleague the Minister of Trade and Commerce (Mr. Gray), he is responsible for the loss of nearly 10,000 jobs in that
The Budget-Mr. La Salle
leading sector and he is still preaching patience to that industry which employs between 10,000 and 15,000 workers and yet does not ask for handouts. It is not a question of going begging, we simply want the government to show respect for an industry which has proven itself and to have some regard for all businesses which operate in Canada.
For a number of months now, the Minister of Employment and Immigration (Mr. Axworthy) has been announcing programs worth millions of dollars and members opposite keep repeating that the government is investing millions in such and such fields. Why did they let the situation deteriorate to such an extent that the Minister of Employment and Immigration alone will probably have to spend close to $1 million this year? Mr. Speaker, all those programs are just another form of social welfare. They talk about occupational training programs for jobs which exist only on paper, and about retirement pensions at age 50, as if that was the end of life for a man or a woman. That is nothing more and nothing less than hidden welfare. And then, Mr. Speaker, they want us to cooperate and praise the efforts of the Minister of Finance and the appeal that the Prime Minister made to his provincial colleagues last week. How interesting to see the pathetic attitude of the Prime Minister today before the provincial premiers. Having shown such arrogance towards them, he must now ask them and beg them on his knees to be party to his monumental failure.
How is it that the Right Hon. Prime Minister never felt the need to call a meeting of the premiers before this budget was tabled? Is it necessary for the federal government to impose again its will at all cost? And now the Right Hon. Prime Minister, relying on public opinion, feels that the provincial premiers would never dare refuse publicly to work toward the economic recovery of Canada. If so many businessmen, economists and knowledgeable people find it difficult to support this policy it is because they feel such a disastrous budget is not likely to put the economy on the way to recovery. Businessmen in particular and the Canadian people in general cannot depend on promises of this kind from the Liberal Party, because they were disappointed so many times in the past. Under these circumstances, it is clear that most Canadians want a new government. Why? Because this deceitful government is unable to ensure the private sector and free enterprise their proper places. All the Right Hon. Prime Minister has told the Minister of Finance or the Minister of Energy, Mines and Resources on the role of private enterprise is an unforgivable falsehood. All the economic projections which the Minister of Finance has made were proven entirely wrong. So the Minister of Finance has lost his credibility, something he and all other members on the government's side are perfectly aware of.
I see the Minister of State for Finance (Mr. Bussieres) who is about to tell us once again that we do not know how to read

July 6, 1982
The Budget-Mr. La Salle
the budget, we do not understand the budget. If there is something that we do understand, however, it is the fact that there were only 300,000 unemployed in Canada 15 years ago, compared with 1,500,000 now. We know also that come December 31, Canadians by the thousands will no longer collect their scanty pittance, or rather, their unemployment insurance benefits. And these ministers have neither the courage nor the honesty to admit it. That is the predicament in which we find ourselves now! And we are being asked to cooperate with such an utterly incompetent government! It is impossible, Mr. Speaker! And if the government is truly convinced that Canadians are willing to trust them after a budget as disastrous as that which was tabled six months ago and another one last week, let them have the decency to go to the people and ask them if they can trust a government which has deceived them so often and so long. Such is our government and we are going to denounce it! The time to do it is right now! I cannot tolerate the hypocrisy of my hon. friends opposite who are perfectly aware of the situation and who feign surprise.
Yesterday and again today, I heard people say: we are indeed in an impossible situation. Should the Canadian people help us? Should the provinces help us? This government is mostly responsible for this abysmal failure. How can this government and the Minister of Finance who have lost their credibility in the eyes of business, create again a climate of trust? It is unthinkable, Mr. Speaker. And these people know that it is unthinkable. They will play with time at the expense of the Canadian people. And they claim they want to help Canadians! These people have destroyed Canada, have split the country with their Constitutional scheme and have placed it in a state of economic dependency. And in a while the Minister of State for Finance will make his little speech, claiming that we do not understand, what it means for thousands and millions of unemployed not to know whether they will be able to find a job tomorrow morning. And the housing minister would like us to believe that with his $3,000 grant, he will get the housing industry moving again, when Canadians can no longer afford to borrow at the current high interest rates. Why did the government deliberately create unemployment? Listen to this one! Last week, the Minister of Finance said in connection with his $20 billion deficit that he had not foreseen that he would be faced with a revenue loss, due to the
1,200,000	unemployed who, with all the others, are about 1,500,000! He had not realized that by deliberately creating unemployment, there would be a loss of income tax and the unemployment insurance fund would be depleted. Yet the Minister of Finance has the nerve to ask members of this House and Canadians in general to trust him. It is a disaster, Mr. Speaker, and his cohorts are supporting and commending him. I think that Canadians must realize the extent of their hypocrisy. Last week, I was surprised to hear the Minister of
Finance announce a reduction in our salaries. Well, of course it is quite fine, because we are showing some leadership. We ask Canadians to tighten their belts while the Minister of Finance is increasing his electoral expenditures by some 20 per cent each year. Now they are going to play the game and reduce the members' salaries with Liberal members applauding Mr. Speaker. It is the height of hypocrisy as though they were pleased and were going to make up the deficit of the Minister of Finance. Of course, if the deficit were made up, we would be delighted, but this will not be the case, Mr. Speaker. Under the circumstances, I have the impression that the time allotted to me is running out, but this government cannot rely on this speaker to support a pitiful budget, such a deplorable administration. I hope that enough members on that side are sufficiently scrupulous and honest to get rid of a minister who is bringing this country to the verge of bankruptcy and to invite Canadians to let us know what kind of government they want. I would like to know as soon as possible if Canadians really want to give their confidence to such a seedy and pitiable team.


Pierre Bussières: Mr. Speaker, in his speech, the hon. member for Joliette (Mr. La Salle) referred to the Minister of Finance (Mr. MacEachen) and the Prime Minister (Mr. Trudeau) who appealed to the spirit of solidarity of all Canadians, to their willingness to share and to their courage, urging them to work together in a common resolve to get through this recession. However, instead of urging Canadians to join in this common effort, the hon. member prefers to denigrate such appeals and makes cynical remarks instead of taking a responsible view, instead of showing the facts as they are and offering a more balanced picture of the present situation. To hear the hon. member talk, the Canadian government is to blame for the problem being experienced by Western economies. The hon. member for Joliette has quite a reputation for his simplistic analyses, and, true to form, in his speech tonight he showed his usual capacity for logic and his usual simplistic approach to the facts. In any case, I am not going to waste any more time on his rhetoric, and I know Canadians will judge what he said as they judged in the past the way he defended his party's policies.
Mr. Speaker, in the few minutes I have been allowed, I intend to discuss a document that was tabled by the Minister of Finance when he made his budget statement, a document that deals with inflation and the taxation of personal investment income. It is a relatively lengthy and complex piece of work, and I shall try to summarize it in simple terms, to give Canadians who may not have had an opportunity to read it for themselves, a general idea of the content and help them understand how these proposals can benefit Canadians by providing mechanisms that will help reduce interest rates.
July 6, 1982

It is widely recognized, Mr. Speaker, that inflation causes a number of distortions in the economy's various markets, distortions which lead to an inappropriate allocation of both financial and human resources and finally are instrumental in slowing down the economy. Although it is not always easy to visualize the real impact of inflation on the economy, we are all aware of the element of uncertainty that inflation has brought into our lives. In the present situation, where we are experiencing galloping inflation, it has become practically impossible to plan medium and long-term financial commitments. In fact, how can we save money for a rainy day, how can we borrow money to buy a house, how can we buy life insurance, if we realize that the value of our dollar is going to be constantly eroded year after year because inflation rates are going to continue at their present high levels or will even increase, so that we no longer know what the dollar we are investing today will be worth in five, ten, fifteen or twenty-five years?
Rising interest rates as a result of inflation can create serious cash-flow problems for borrowers and also disrupt the proper functioning of the financial markets. These problems have become particularly acute at the present time for people buying homes and for small businesses, and are thus contributing to the severity of the present recession. In the housing industry, inflation-related increases in interest rates have caused monthly payments of interest and principal on a mortgage amortized over twenty-five years to rise by 80 to 90 per cent. In the case of a long-term, fixed-rate mortgage, homeowners have to tighten their belts during the first few years and can subsequently benefit from a rapid decline in the real value of monthly payments as a result of the time they have gained. In the more frequent case of short-term mortgages, home owners must live with the fact that they may be faced with a sudden rise in interest rates, and as a result, prospective home buyers postpone the purchase of a first home to avoid this uncertainty and the need to cope with all these problems.
Cash-flow problems are even more serious in the case of businesses which borrow funds at a floating interest rate which subsequently rises due to an unanticipated increase in inflation. They are then required to increase their cash payments to lenders immediately by the full amount of the increase in interest rates, thus leading to serious cash-flow problems which may lead a business to bankruptcy. On the financial markets, the uncertainty caused by inflation makes long-term loans less attractive, both for borrowers and lenders. If inflation is higher than expected, the borrower will gain at the expense of the lender, while if inflation is lower than expected, the lender will gain at the borrower's expense. The effect of this uncertainty is currently seen in the shortening of the term of fixed rate mortgages and other loans and by the increased use of floating-rate term loans. The increase in the proportion of term deposits held in maturities of under one year reflects a similar reluctance for long- and medium-term commitments by
The Budget-Mr. Bussieres
lenders. Finally, the lack of long-term capital has brought about a decline in investment, thus contributing to the general decline in productivity and especially to the erosion of our competitive edge on international markets.
These are some of the reasons, Mr. Speaker, why the government has made a firm resolve to tackle the problem of inflation by announcing its objective in the present budget to bring down the inflation rate to 6 per cent and by appealing to the solidarity of all Canadians and all economic partners to work together to achieve this objective. Inflation also creates more specific problems in the tax system by introducing the distortions I mentioned earlier in the taxation of investment income. During an inflationary period, the investor makes a real profit on an investment only if the total return exceeds compensation for the decline in the real purchasing power of the money which he has invested, a decline in purchasing power as a result of high inflation rates. In fact, the rate of return on an investment could, and can, in fact, be divided into two components. The first component is the real interest that would be paid if there were no inflation, if the inflation rate were nil, and the return on an investment would be a real return, a real interest. The second part, the second element in an investment income is part of the interest or the return equivalent to inflation or compensation for the reduction in the purchasing power of my savings or investments.
In our present system, taxes are levied on both the return ascribable to inflation and the real return which I suggested was the first constituent or the first element of the total return on investments. In our taxation system, all surplus on the first outlay of capital is considered as directly taxable regardless of the reduced real value of the capital, a reduction which is ascribable to inflation. It involves reporting interest income as well as capital gain income and corporate income. The effective increased taxation rates on those incomes discourage savings and investments. In fact, in many cases, not only do investors get no return after taxation but actually lose money. This is what economists call in contradictory terms a rate of negative return. How can we illustrate such a negative yield rate or, to put it in clearer terms, an actual loss on an investment? Let us say, for example, that I have invested $1,000 of my savings at 12 per cent. After one year the investment income would be $120 and if I am in the 35 per cent tax bracket I will have to pay $42 on that $120 income. In other words, the net income on my original investment of $1,000 in savings will be $120 less $42 in taxes, or $78. If inflation is running at 10 per cent, anyone investing $1,000 of his savings will have to earn at least $100 in income if he does not want to lose to inflation, because $1,000 at 10 per cent yields a minimum of $100. So if I want an investment which offsets inflation, I need an income of $100 on an investment of $1,000. In the example I gave earlier, the net income after taxes was $78, therefore an actual loss of $22 for the investor who should get an income of $100 if he wants to keep up with the inflation rate. So he ends up with an actual loss of 2.2 per cent and he is
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July 6, 1982
The Budget-Mr. Bussieres
said to have had a negative yield of 2.2 per cent on his investment even though he was given an interest rate of 12 per cent on his SI,000 investment. This difference between real and apparent income causes distortions in the decisions of investors and a rather ineffective allocation of economic and financial resources, which are extremely limited at the present time.
All these problems are considered in the paper for consultation I mentioned earlier which is entitled "Inflation and the Taxation of Personal Investment Income". To eliminate the effects of inflation on the taxation of investment income, this paper proposes two schemes of limited indexation concerning interest income and capital gains to protect the amounts invested or the real investment income of individuals. The first would be the creation of indexed term deposit certificates. These certificates would offer the depositor a tax-free interest on the portion of the investment income which absorbs inflation. These savings would then be made available to homebuy-ers, small-business men, farmers and fishermen, in the form of indexed term loans by the financial institutions offering term deposit certificates. There would therefore be indexed term deposit certificates which would raise funds and provide the depositor with an attractive real return since it would be indexed, and the funds raised would be put at the disposal of the groups I mentioned earlier in the form of indexed term loans.
The second scheme proposed in the paper for consultation would take the form of a new registered shareholder investment plan, under which capital gains on shares purchased for the registered fund would only be taxed on the portion exceeding the rate of inflation. Mr. Speaker, if I may, I would like to take a few minutes to explain and illustrate these two proposed schemes which are now under review. First, I shall deal with the indexed term deposits and term loans which aim at reducing substantially, or up to 6 per cent, the interest rates for potential home owners, small businesses, farmers and fishermen.
What will an indexed term deposit consist of? Canadian financial institutions will be allowed to offer their depositors residing in Canada term deposit certificates for a minimum of one year, which deposit will be indexed. The principal of the term deposit will be adjusted periodically according to CPI variations. Interest will be calculated on the indexed principal at a real rate that would be fixed over the term of the deposit. This rate will be set by each financial institution administering the deposit in the same way as interest rates on conventional term deposits are now set. However, the fact that the deposit itself is indexed will be taken into account. The depositor will be taxed only on the real interest income and only the real interest will be deductible for the financial institution. Since only the real interest, in other words, the interest less the compensation for inflation, will be taxable, this will make the investment yield much more attractive for the depositor.
Moreover, since the financial institution will be able to deduct only real interest, it will be able to minimize its profit margin and reduce the interest offered borrowers on the loans for which the funds raised from these indexed term deposits would be made.
Since only the real interest income would be taxable, the depositor will be able to accept lower interest rates, as I noted earlier. Let us try to visualize or to get a better idea of how this system could work. For instance, let us take an ordinary deposit and a hypothetical inflation rate of 10 per cent. To come back to the situation mentioned earlier, let us take a conventional deposit or savings of $1,000. At the present time, with an interest rate of 16 per cent, the investment or interest income would be $160. Under the Income Tax Act at the present time, the taxable investment income would also be $160. At a tax rate of 40 per cent, the tax payable on this income would be $64, and the net investment income after taxes would therefore be $26. The minimal after-tax rate of return on an amount of $1,000 would therefore be 9.6 per cent and the real after-tax rate of return, if we consider the taxes of $64 to be paid, is of 0.4 per cent plus 0.4 per cent of real yield on a deposit of $ 1,000.
Now, if the deposit were indexed, by how much would my real income increase? I still have the same initial deposit or saving of $1,000. The inflation rate is still 10 per cent. The interest rate on my deposit would be 10 per cent for inflation, in addition to a real interest rate of 2 per cent, for a total of 12 per cent. What would be my income? My interest income would be $1000 to compensate for inflation, since the inflation rate is basically supposed to be 10 per cent, my real interest income would be $20, since the real interest on the $1,000 investment was 2 per cent, the tax to be paid, still with a 40 per cent taxation rate applicable to the $20 of real income, since my real interest is 2 per cent, would be $8, my income after taxes is therefore $1000 to compensate for inflation, 10 per cent of $1,000 in addition to $12 and $20 less $8 of income tax, the real intest income of $20 less $8 would therefore give me an income of $112 after taxes. My nominal return rate after taxes is therefore 11.2 per cent compared to the previous 9.6 per cent and contrary to the previous real return to 4/10 per cent, I will have a real return of 1.2 per cent on the same $1000 investment with that indexation proposal for the term deposit. It can clearly be seen, Mr. Speaker, how the real return on that $1,000 investment when the deposit is indexed to account for inflation allows me to reduce the interest rate on my savings while ensuring me a higher direct return, since the compensatory factor for inflation is subtracted from the amount charged.
So, that system should attract a large number of investors and enable financial institutions to set up a sizeable reserve of funds which they will obtain at low cost, because, as I indicated earlier, instead of paying 16 per cent interest on $1,000, that rate will be reduced to 12 per cent and even though it is
July 6, 1982

lower, the yield will be higher without the compensation for inflation set at 10 per cent for the purposes of our example.
As mentioned earlier by the hon. member for Welland (Mr. Parent), these funds will be made available to homebuyers, small-business men, farmers and fishermen in the form of term loans. And we now come to the second face of Janus, if I may say so, Mr. Speaker, because these indexed term deposits generate indexed term loans, thereby making money available to lend at interest rates up to 6 percentage points lower than market rates. On an indexed term loan, the real interest rate only would be deductible by the borrower as expense for income tax purposes. The same amount would be taxable in the hands of the lending institution. As in the case of indexed term loans, the initial principal would be adjusted periodically, based on consumer price index variations. Since interest rates are now wholly deductible, the people who will benefit the most from this initiative are firms with very little or no taxable income, and finally home owners who cannot deduct interest rates or loan charges on their mortgages from their taxable income. I would like to attempt once more to illustrate how these loans will be of benefit to all citizens. Assuming that the current interest rate is 19 per cent, the inflation rate 10 per cent and also that financial institutions are ready to lend at a 5 per cent real interest rate, they would have a 3 per cent real margin on the 2 per cent real interest paid on indexed deposits.
Well, for instance, on a loan to a home owner-I do not want to go into the details of loans that could be made to businesses with variable tax rates and I will only deal with home mortgages. To simplify, let us take a SI00 loan. The nominal interest at current market rates would be 19 per cent. The real cost after taxes of the borrowed funds would be $19. Now, let us return to our indexed loan; according to our original hypothesis, the amount of the loan is $100 and the inflation rate is 10 per cent. Included in the interest charged, there is as a first component in the inflation compensation of 10 per cent, as was seen in the previous example, the 5 per cent true interest rate of 5 per cent charged by the lending institution. The after-tax cost of the funds thus borrowed is therefore $15, that is, on $100, the equivalent of 4 per cent lower than the current rates allowed, due to the fact that the term deposit is indexed and that all the moneys collected this way are put again on the market as term loans which are also indexed.
Therefore, it can be seen that reducing the inflation part of investment incomes makes it possible to have a system whereby interest rates on loans are reduced from 0 to 6 per cent, depending on which income tax bracket the borrower is in. It can also be seen that the lower the income tax bracket, the more advantageous the measure is, particularly if your are unable to deduct interests from your income, which is the case for a home owner. Home owners just like small-business men, farmers, fishermen, would see a major reduction in their interest rates, which would be inversely proportional to their income tax bracket. At the current level of inflation, the tax on
The Budget
the inflation component of investment income may be from 3 to 6 per cent, depending on the tax bracket the lender is in, as 1 have just indicated.
That amount would be eliminated from funds invested in indexed term deposits. This reduction would benefit investors as well as borrowers. This system also has the advantage of reducing uncertainties on the real cost of financing, since it will remain fixed over the life of the contract, whatever the inflation rate.
I would like also, Mr. Speaker, to refer briefly to the second proposal in that consultation paper on inflation and taxation of Personal Income, which deals with a registered shareholder investment plan. Canadians could contribute funds to a registered shareholder investment plan with an investment dealer or a financial institution. These funds could then be used to purchase common shares of Canadian corporation taxable shares listed on a Canadian stock market. The sums contributed to the plan would be neither deductible in computing income tax purposes nor taxable when withdrawn. The moneys contributed to the plan would be defined as being the cost of the aggregate of shares held in a registered shareholder investment plan. At the end of each year, the amount contributed would be multiplied by the rate of inflation over the year or since the date of contribution to the plan. The shares would be valued at the end of the year and the inflation adjusted value would be determine the taxable amount. By applying the technique I explained earlier for term deposits, we would have on shareholder investments a real yield that would be higher than the current one. 1 see, Mr. Speaker, that you are getting impatient and I do not want to abuse the time of the House. I appreciate your patience and honourable members' kindness.


Mr. Deputy Speaker:: The hon. member for Vancouver Centre (Miss Carney). Is the hon. member for Kamloops-Shuswap (Mr. Riis) rising on a point of order?


Nelson Andrew Riis: Mr. Speaker, I have noticed, in looking at my calculations, that since my party last had a speaker in this budget debate, and if you recognize the hon. member whom you obviously intend to recognize, there will be eight speakers from other parties between speakers for the New Democratic Party.


Mr. Deputy Speaker:: Order. The debate is on an amendment standing in the name of the hon. member for Etobicoke Centre (Mr. Wilson). At 9.45 p.m. the bells will interrupt the debate, which will end the debate on the amendment, and any hon. member having the floor at that time will have to terminate his or her remarks. On resumption of the debate on the main motion tomorrow, the speeches will go back to the full 30 minutes.


Nelson Andrew Riis: I am quite aware, Mr. Speaker, that shortly there will be a termination of this debate. I guess what I am asking

July 6, 1982
The Budget-Miss Carney
for is some explanation of the fact that this will be the fourth Progressive Conservative speaking-


Mr. Deputy Speaker:: With all due respect to the hon. member, the Chair has exercised its discretion in regard to an amendment standing in the name of a member of the Official Opposition. The hon. member has a perfectly valid point, but 1 am calling his attention to the fact that there is only 15 minutes left for the next speaker at this point, and tomorrow the hon. member's party will be recognized first for a full 30 minutes.


Nelson Andrew Riis: Mr. Speaker, since we began discussing the budget today at three o'clock it has been our understanding that our speaker would be asked to rise at 9.30 p.m. this evening. That has been a clear understanding. It follows the records. It follows the numbers.


Mr. Deputy Speaker:: With due respect to the hon. member, the recognition of speakers is at the discretion of the Chair. At this point the Chair is exercising a discretion in recognizing the hon. member for Vancouver Centre (Miss Carney), having made careful note of the remarks of the hon. member for Kamloops-Shuswap (Mr. Riis).


James Ross Fulton: Mr. Speaker, I rise on the same point of order.


Mr. Deputy Speaker:: The hon. member cannot rise on the same point of order. The Chair has ruled in regard to that. The hon. member for Vancouver Centre (Miss Carney).


Miss Pat Carney (Vancouver Centre):: Mr. Speaker, I rise to speak to this amendment calling for the resignation of the government at a time of economic crisis in this country, a crisis which, judging by the tone of its debate, the government does not seem to recognize. I listened to the Minister of State for Finance (Mr. Bussieres) talk about an illusion, talk about rates of return, talk about savings plans and budget measures and I find he does not seem to have any understanding-in fact, he does not even have the courtesy to give me attention on this matter-that many sectors of our economy are going bankrupt. A financial fire storm is sweeping the country, consuming our jobs, our energies, our savings and our businesses. Yet the government refuses to recognize the seriousness of the situation. It refuses to act. It refuses to move in a positive and realistic way to lay any basis for positive economic recovery.
The problem is very simple. It has not been addressed by this government. The country is simply running out of cash. Our capital is being dangerously eroded. The reason is very clear. The cause of this critical situation, which is forcing the collapse of companies and the loss of jobs, is the failure of the Liberal government to deal with the problems of high interest rates by abandoning the anti-investment tax measures of the last three budgets, and also the Liberal government's failure to introduce tax policies that are firmly and forcefully redirected toward incentive-based savings programs.
The minister has outlined tonight one tentative step in that direction which is a series of tax proposals in the new budget. They have been circulated for study in the investment community. Further study of incentives for investment is like consulting a man whose house is burning to see if he would like a pail of water. The clearest evidence of this economic catastrophe- and for the people affected, it is a catastrophe-are the revised statistics showing the impact of high interest payments on cash flow, the lifeblood of the Canadian economy.
In the first quarter of 1982, all companies in Canada, large and small, paid on average 45.4 per cent of their cash flow on interest costs. One year ago these companies devoted only a quarter of their cash flow to these costs. The impact of interest costs on cash flow has doubled in a year. Smaller companies are hardest hit. This year they are paying on average about half of their cash flow on interest charges, compared to only one-third last year. That is on average, which meant that an awful lot of companies paid up to 100 per cent of their cash flow on interest rates. If you look at the ratio of the percentage of interest rates to entire pre-tax earnings for larger companies it rose to 83.3 per cent in the first quarter of this year. That means companies simply do not have the money to keep going. That is why William Mulholland, chairman of the Bank of Montreal, before the committee hearings on bank profits said the following:
The rolling impact of high interest rates on business must spell more bankruptcies and worse unemployment to come unless some action is taken.
That is why Cal Knudson, Chairman of MacMillan Bloedel, the largest forest company in Canada warns of:
Widespread bankruptcies, a weakening of our financial base and a major collapse that will imperil the financial structure of our country.
That is if the government persists with its policies.
Further evidence of this crisis that we face is the rate of bankruptcies. They are up 40 per cent over last year. The liabilities associated with those bankruptcies are up 100 per cent. Many major corporations, and I include Chrysler Canada, International Harvester, Dome Petroleum, MacMillan Bloedel, Inco and Falconbridge, are barely hanging on. At the same time some of the banks are dangerously overextended in executing some of this government's highly unrealistic policies. The government is going to be called upon to guarantee more loans like that of Dome Canada. Yet it refuses to recognize the peril facing the country.
One critical symptom of the crumbling economy is the emergence of hidden bankruptcies. These are a relatively new phenomenon which is surfacing in the B.C. business community. It serves to hide the fact that thousands of British Columbians are going to lose their jobs because their employers are secretly bankrupt.
During this recession these companies have not been declared legally bankrupt. They have been placed in a status called "soft receivership". No statistics are kept and the firms are never identified. Their status is often known to senior management and often unknown to their employees.
In British Columbia firms in soft receivership include real estate companies, forest companies, property developers and retail companies. When a company faces bankruptcy and has
July 6, 1982

no hope of operating profitably the banks instal a licensed trustee. In the case of soft receiverships, he is often called a management consultant or something which hides the purpose of his duties. He effectively takes control of the business. The management is retained to maintain the appearance that nothing is wrong and to sell off the assets in an orderly fashion. The aim of soft receivership is to avoid selling assets at fire sale prices, and thus secrecy is essential.
The incentive for the banks is to recover their loans. The incentive for business is to keep operating for as long as possible in the hope that enough money may be recovered from the sale of assets to pay off the debt load and to continue the company in a different form. But the fact remains that these companies are bankrupt, that these employees are losing their jobs, and that in the coming months these companies will be quietly, silently and secretly liquidated.
The reasons for this crisis, as I discussed earlier, are the high interest rates which have led to the cash crunch that I have already described. Another major reason is the government's spending which is at a post-war high of 25.3 per cent of GNP. This government has not lived up to the promises made by the Prime Minister (Mr. Trudeau) to restrain spending to no more than the growth of the economy.
As a matter of fact, if the government had followed that criteria, it would have to reduce its spending this year to match the drop in GNP. This government's policies have also led to the enormous deficit. It is now $19.6 billion instead of $11 billion which was forecast in November. It has led to the situation where one tax dollar in four goes to service the public debt. This has resulted in financial cash requirements this year in the market of $17.5 billion, which has led to the danger of crowding out in capital markets as government borrowing this year will exceed 50 per cent of net new securities placed in Canada. This pressure on the market will keep interest rates high and may send them even higher.
At the same time the government is stripping the savings of Canadians through its tax policies. One leading economist for Pitfield MacKay Ross has pointed out that corporate profits are actually exaggerated by inflation. They are actually at a post-war low, and the effective corporate tax rate is 75 per cent. In some companies, such as those in the forest industry, it exceeds 100 per cent. This profit squeeze is prolonging the recession. The result is the Canadian economy is dangerously under-capitalized because of a lack of adequate common equity and because of capital outflows which have followed this government's policy.
Because my time is limited, I want to refer to what this kind of policy is doing for British Columbia, and in this connection refer to letters I have received from some of my constituents about the impact of these policies on B.C. I have a letter here from an owner of a dance shop on West Broadway. This is a small shop serving the cultural industry. He writes, referring to the Minister of Finance (Mr. MacEachen), as follows:
He is leading not only business but individuals into bankruptcy. He is sucking not only those of us who work for ourlselves dry, but is gobbling up the savings of
The Budget-Miss Carney
many working people. People who lose their homes through job loss or high interest rates lose their savings and their pride.
I have another letter from a person in my riding who wrote to the Minister of Finance and sent a copy to me. This person writes:
Dear Mr. MacEachen:
This week I got the bad news from the bank that they are not going to lend me any more money and that they would force the sale of my house to pay off a loan. With market and interest rates where they are, the price 1 will get will completely wipe out everything 1 have managed to save since 1 graduated 15 years ago from university.
That is the kind of impact we are receiving as a result of this government's economic policies.
I have another letter here from a woman in my riding who writes:
Young couples today simply cannot afford to have children ... I have been married for ten years. For ten years my husband and I have struggled to get into a position where we can afford to raise a family. Yet the economic reality is that each year the situation gets worse.
She closes her letter to me by asking, "What is happening to our country?" I can tell her what is happening to British Columbia. Its two biggest industries, forestry and mining, are having the worse summmer since the depression of the 1930s. Already some 19,000 IWA workers are out of work, with more to come. Pulp and paper mills are closing and reducing their capacity. The interior forest industry, which is already running at 70 per cent of capacity, is anticipating dropping to 30 per cent or 40 per cent this summer. Peter Bentley, the head of Canadian Forest Products, says:
I see nothing positive for the second half of this year, nor the first half of 1983, even if interest rates were to go down because of the time lag before it gets to us. Prices might be marginally better but to me a turnaround means when you stop bleeding and start operating with positive cash flow.
Most companies in British Columbia are certainly not in that position. At the same time, its second industry, mining, is closing down. This summer there will be an estimated 10,000 workers affected by mines closing down on a temporary or permanent basis. At Cominco in Trail and in Kimberley, 6,300 workers have been affected. Craigmont in Merritt is closing down. Amax, the molymine, has closed down, throwing 432 people out of work. Noranda at Babine Lake is shut for a year. This copper producer will be shut from July 1982 to July 28, 1983. All along Highway 16, all through the interior of British Columbia and on the upper coast, mines which have been major employers have been shut down.
We know that the problem is not entirely domestically created, that it is partly due to falling metal markets and the lack of housing demand in the United States. These industries were looking to the budget as the last hope for some help, particularly with their cash flow. There has been no help for mines. IWA indicates that the housing assistance program will be of "minimal benefit" to employment in British Columbia. As a matter of fact, the housing program will barely take the production of one of our major mills.

July 6, 1982
The Budget
Recently in Prince George I visited a machine shop of a metal fabricator who employed 220 workers last year. This year he has laid off everyone except his core people. This man has been in business for 20 years. He has had no orders for two months, no orders at all. Of course this means that he has not been able to order steel from eastern Canadian mills. I told him that if he obtained an order he was to call us. I asked him to call us because he was our leading indicator, and if we knew that he was obtaining orders, we would know that the economy was starting to be revived. That was two weeks ago and we have not received a telephone call. He still has not obtained any orders. This man cannot believe what is happening to him. He did everything right. He spent 20 years of his life and 20 years of his energies, and he is going down the tubes. That kind of situation is developing all over B.C.
What was the Liberal response in the current budget to this kind of economic tragedy? It was mostly the same measures as last time, with a few changes. The measures were the same as those in the catastrophic budget which created many problems for the Canadian economy. This budget keeps the half-year rule for capital cost allowance, which is a measure that seriously affects many, many companies. It retains the taxation of employee benefits and northern allowances, which in British Columbia amount to $3 per hour in extra tax. No wonder we in British Columbia cannot be competitive when we have to bear that amount of extra tax load. There has been no resurrection of the MURB program. As a matter of fact, the budget measures are forcing the cancellation of many MURBs and the actual bulldozing over the MURB sites, with a loss of housing stocks and investor savings. Some measures were postponed, such as the insurance measure and the restricted interest expense which my colleague outlined. Many measures were referred to this new committee for study before implementation. The result is more uncertainty, more confusion and more delay.	.
There is still no leadership, no help for the economy and no direction. There has been merely a reaffirmation of damaging Liberal policies and the spreading by Liberals of false assumptions and misinformation. One false assumption is that Canadians will practise restraint when government spending soars. How can they? Another piece of misinformation and false assumption is that a recovery will occur in the third or fourth quarter.


Mr. Deputy Speaker:: Order, please. It being 9.45 p.m., it is my duty pursuant to Standing Order 60(7) to interrupt the proceedings and put forthwith the question necessary to dispose of the amendment now before the House.
The question is on the amendment (Mr. Wilson). Is it the pleasure of the House to adopt the said amendment?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Call in the members.


Madam Speaker:: I declare the motion lost.
Motion negatived.
It being past ten o'clock this House stands adjourned tomorrow at 2 p.m. pursuant to Standing Order 2(1).


[Stage Direction]
The House adjourned at 10.17 p.m., without question pursuant to Standing Order.
[Stage Direction]
until
put.
[Stage Direction]
Wednesday, July 7, 1982