1982-01-26

Mr. Bill Domm (Peterborough):: Madam Speaker, I move, seconded by the hon. member for Brampton-Georgetown (Mr. McDermid):
That this House condemns the current puppet government of Poland controlled from Moscow, that we support as a government the spirit of freedom demonstrated by the national and international members of Solidarity, that this House urges the Soviet Union, through diplomatic channels, to cease its present military and political intervention in the affairs of a sovereign nation, and that it censures the Prime Minister of Canada, the Neville Chamberlain of our day, for his deplorable attitude of appeasement toward a totalitarian government.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ADMINISTRATION OF JUSTICE
Mr. David Kilgour (Edmonton-Strathcona):: Madam Speaker, Clifford Olson, a career criminal, murdered 11 young people in British Columbia but recently received only 25 years in prison, and his family received a large sum of money for information he provided. 1 therefore move, seconded by the hon. member for Fraser Valley West (Mr. Wenman):
That an independent federal inquiry assess the matter comprehensively, including the probable effect of the payment on Olson's trial if he had not pleaded guilty, how the offender was on the street at the time of his murders despite indications of repeated violations of his parole conditions, and the effects of the entire incident from the standpoint that justice should not only be done but be manifestly seen to be done by Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE BUDGET
Mr. Jack Shields (Athabasca):: Madam Speaker, whereas the Minister of Finance (Mr. MacEachen) has shown a complete lack of compassion and sensitivity to the plight of the ordinary Canadian by blindly sticking to his most unpopular and incompetent budget; whereas his budget, by upholding the government's high interest rate policy, which is now contributing to, and not fighting, inflation, is causing untold suffering amongst farmers, businessmen, home owners and, indeed, all Canadians; and whereas these policies are pushing up unemployment figures to an all-time high, which translates into an increase in personal despair, depression, crime and suicide rates across the country, I move, seconded by the hon. member for Pembina (Mr. Elzinga):
That the Minister of Finance do the only honourable thing left to him to do, that is, to tender his resignation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN BROADCASTING CORPORATION
Mr. Lome Nystrom (Yorkton-Melville):: Madam Speaker, my motion arises out of the refusal of the CBC to carry certain anti-smoking advertisements prepared by the Saskatchewan Department of Health on the ground that the ads go beyond the concerns of health, and emphasize certain social considerations. In light of the contradiction that the CBC does not hesitate to run ads from tobacco companies which promote smoking by relating it to images of mountain streams and macho cowboys, I move, seconded by the hon. member for Winnipeg-Birds Hill (Mr. Blaikie):
That this House requests the CBC censors to review their unfair and contradictory policy and decision and allow the Saskatchewan Department of Health to advertise in order to discourage a very unhealthy practice.

January 26, 1982


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

[ Translation]


INDUSTRY
Hon. Roch La Salle (Joliette):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
Considering that the Canadian people are suffering increasing trauma and stress as a result of factory closings and the loss of hundreds of thousands of jobs; considering that a study by the Canadian Manufacturers' Association shows that we can expect an additional loss of 100,000 jobs within the next two months in this vital sector of our economy; and considering that the budget brought down on November 12 is only going to exacerbate the recession, which was confirmed by the Minister of Finance (Mr. MacEachen) in Toronto yesterday, when he admitted that unemployment would increase, I move, seconded by the hon. member for Don Valley West (Mr. Bosley):
That the House unanimously urge the Minister of Finance (Mr. MacEachen) to propose an emergency plan aimed at stopping immediately this rash of plant shutdowns and permanent lay-offs, thereby recognizing the fact that Canadians cannot afford the luxury of losing 100,000 jobs.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, South Korean President, His Excellency Chun Doo Hwan, has again called on North Korea to adopt a joint constitution committed to the ideals of nationalism, democracy, liberty and individual well-being, in his unswerving commitment to Korean unification. As Canada is committed to these same ideals of nationalism, democracy, liberty and individual well-being, I move, seconded by the hon. member for Athabasca (Mr. Shields):
That this House commend and support the people of South Korea in their efforts for a united Korea and in so doing pay tribute to those Canadians who fought and some who died in Korea to achieve the goals of freedom.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


DISASTERS
[Stage Direction]
5.0.	43
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, following the tragic and needless deaths of crew members in the sinking of the Hudson Transport in the Gulf of St. Lawrence last month, and other recent maritime disasters during which 18 Canadians perished in the last two years, I move, seconded by the hon. member for St. John's West (Mr. Crosbie):
That a reference be provided to the Standing Committee on Transport so that that committee may develop recommendations on the whole range of safety standards required of commercial ships sailing in Canadian waters, and in particular the need for survival suits for all members of the crews.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


MEDICAL CARE
[Stage Direction]
5.0.	43
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, I rise pursuant to Standing Order 43. It is a year and a half since the Hall Report recommended the banning of extra billing by physicians, and six months since the task force on Federal-Provincial Fiscal Arrangements recommended likewise. Yet all we have had up to date from the Minister of National Health and Welfare is bluster and rhetoric, while the enemies of medicare, from certain doctors to certain provinces, detecting that this government has no courage or spirit for the defence of medicare, are having a heyday. The extra billing that is going on in Alberta, and the hospital policies of the Ontario government, are examples of what 1 mean. Therefore I move, seconded by the hon. member for Broadview-Green-wood (Mr. Rae):
That this House instruct the Minister of National Health and Welfare, first, to table proposals for the clarification and enforcement of national standards for
January 26, 1982

health care; second, outlaw extra billing immediately before it goes any further and, third, tell the Minister of Finance to withdraw his irresponsible proposals for cutbacks in federal transfer payments to the provinces.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EDUCATION
Mr. Jesse P. Flis (Parkdale-High Park):: Madam Speaker,
I rise seeking the attention of all hon. members of this House on a matter of urgent and pressing necessity under the terms of Standing Order 43. In view of the fact that the Minister of Employment and Immigration announced on January 6, 1982, a new national training program designed to overcome skill shortages, to accelerate economic growth and development, and to facilitate industrial adjustment, and in light of the fact that this morning's Globe and Mail states that an Ontario manpower commission indicated that the education system in that province failed to produce skilled workers for industry, I move, seconded by the hon. member for Roberval (Mrs. Beauchamp-N iquet):
That the government take the appropriate steps to establish a national educational council whose main function would be to encourage uniform educational standards and recommend programs which would meet the demands of the skilled labour market.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE BUDGET
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam
Speaker, a well concealed provision of the November 12 budget, Resolution 53, has put Canadian veterans directly in the taxman's firing line when they can ill afford to be anywhere near the battlefield. This measure will, in effect, be taxing the veterans' families where they have never been taxed before. I move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That this House instruct the Minister of Finance to rescind Resolution 53 of the budget which would add veterans' pensions to their total calculable income, thus making them ineligible as dependants for their working spouses to claim the corresponding $3,500 tax deduction.
Oral Questions


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Madam Speaker:: Oral questions.



ORAL QUESTION PERIOD


Hon. Michael Wilson (Etobicoke-Centre):: Madam Speaker, I would like to say "Welcome home!" to the Minister of Finance. What a surprise to see him in the House today! In his speech the minister said that it would be wrong to stimulate the economy. He forgot that over a million Canadians are out of work and that many more stand to lose their jobs in less than a month. Behind these statistics are the countless personal tragedies that are taking place throughout the country. Why did the minister decide this year to remove so many investment incentives which had, in fact, been introduced with a view to creating employment?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I thank the hon. member for his welcome. I am delighted to be welcomed back after one day's absence. He would obviously be weeping with delight if I stayed away a week and then came back.


Some hon. Members:: Oh, oh!


Mr. Broadbent:: Try retirement.


Allan Joseph MacEachen: The hon. member in his statement suggested that somehow the approach of the government is antiinvestment. It seems to me that the central message of the budget-


An hon. Member:: Is inequity.


Allan Joseph MacEachen: -is anti-inflation. It is intended to do what is required to remove the main obstacle to investment and growth in the country, namely, high inflation rates.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: How in the name of Heaven does the hon. member think we can have growth and investment in the country-


Mr. Nielsen:: By your resigning.

January 26, 1982
Oral Questions


Allan Joseph MacEachen: -unless we bring down the inflation rate which is presently bedevilling the investment process? That message has not got into the hon. member's head yet.


Some hon. Members:: Hear, hear!


THE BUDGET
Michael Holcombe Wilson: Madam Speaker, the central message of many Canadians which I heard across Canada over the past three weeks-I was working, not in a lair in Cape Breton brooding-was that this was an anti-job budget.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: The inflexibility of the minister in the entire budget process is unprecedented. The tax increase which he has imposed upon Canadians is also unprecedented. We are in a recession which is the worst since the depression.
Yesterday the minister said that he thought it was the wrong time to stimulate, that he wanted to wait until July when things might be better. But all experts-and I do not include the minister in that category of person-are telling us that it will be worse by July. Does the minister have the same people advising him now as he had advising him on the budget?


Allan Joseph MacEachen: Madam Speaker, the hon. member is again contradicting himself. He has accused me of great rigidity in my approach to the budget and economic measures. When 1 announced on December 18 changes to the budget in response to representations received-


Mr. Epp:: Just withdraw it, Allan, and get on with it.


Allan Joseph MacEachen: -from across the country, the hon. member was on his feet instantly demanding my resignation because of this enormous retreat which he now describes as rigidity.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: You do not remember what you say from one day to the other.


REQUEST FOR REFERRAL OF CERTAIN PROVISIONS TO PARLIAMENTARY COMMITTEE
Michael Holcombe Wilson: Madam Speaker, the minister knows as well as all his backbenchers know that he was forced into that retreat because of the stupidity of the budget.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: The budget is a tax grab which is robbing many Canadians of worth-while and widely accepted social and economic programs. This change has shaken the faith and confidence of many Canadians that the government understands what is going on. "Do they know what they are doing"; that is what we were asked in the past couple of weeks. Will the minister explain why he will not withdraw and cancel those tax changes which affect programs, such as the dental and health programs, savings incentives, and taxation of pensioners, and refer them to a House committee?


Allan Joseph MacEachen: Madam Speaker, if the hon. member is relying on the statistics which were put before the House by his leader yesterday, then no wonder he is in the blind alley that is revealed by his question. The Leader of the Opposition stated yesterday that millions of Canadians would have their taxable income increased by $500 as a result of the budget. That is false, and it is as false as the other allegations in the hon. member's question.


Mr. Clark:: You prove it.


An hon. Member:: That is the way to go.


FINANCE
Mr. Charles Mayer (Portage-Marquette):: Madam Speaker, my question is for the Minister of Finance. It has to do with what is going on in the farming community. Could I please have the minister's attention?
For the first time we have farmers who are going out of production for reasons of man-made uncertainties having to do with the economy. This does not have to do with weather or with markets, and it will result in substantially increased prices for food to the consumer, in turn affecting inflation.
Specifically, can the minister give any hope to producers that there will be some government assistance so they can stay in production and thereby contribute to holding down the price of food? In that regard, I have a specific suggestion to offer. Would the minister consider increasing the rebates on farm fuel used for the production of food? That seems to be quite reasonable when one considers that the government is currently taking between 40 cents and 60 cents a gallon-


Madam Speaker:: Order, please. Does the hon. member have a question?


Some hon. Members:: Oh, oh!


Charles James Mayer: Madam Speaker, I asked the minister if he would consider a rebate on farm fuels used in the production of food. I pointed out to him that the federal government is
January 26, 1982

currently taking between 40 and 60 cents a gallon in tax on that same fuel.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, the hon. member has put forward a suggestion with respect to a particular rebate. Obviously all suggestions are given consideration, but I would remind the hon. member that there is presently before the House a bill affecting the farming community on which debate began yesterday.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: We have given notice with respect to the Farm Credit Corporation.


Charles James Mayer: Madam Speaker, that bill had to do with increasing exports. If we lose our production at home we will not have anything to export. That will not be of much help to producers at home.


Some hon. Members:: Hear, hear!


FARMERS' ACCESS TO SMALL BUSINESS DEVELOPMENT BOND PROGRAM
Charles James Mayer: Madam Speaker, let me make another specific suggestion to the minister having to do with the budget if 1 may. The minister changed the provisions of the Small Business Development Bond. Some of the changes were welcome. But we have problems with the one that has financial difficulty as a constraint. Would the minister be prepared to consider removing that financial constraint provision from the Small Business Development Bond so that farmers can have access to at least a limited amount of financing in the 10 to 11 per cent range?


Allan Joseph MacEachen: Madam Speaker, the financial difficulty provision of the Small Business Development Bond was there when it was first introduced by the former minister of finance. It is still there and it is applied in present circumstances to firms and unincorporated businesses, including farmers in financial difficulty, so that the available funds will go first to those who need them most, namely, farmers and small businessmen who, because of high interest rates, are facing these difficulties. 1 believe the hon. member's suggestion would make it possible for those in a much better position to get the available funds at the expense of those who need them most, namely, firms in financial difficulty. Therefore 1 cannot accept his suggestion.
Oral Questions THE ECONOMY


ESTIMATE OF FUTURE LAY-OFFS
John Edward Broadbent: Madam Speaker, in his speech made yesterday in Toronto the minister flatly refused to consider any further stimulus to the Canadian economy. In the same speech, however, he made it clear he expected that the disastrous circumstance leading to thousands of Canadians being laid off would continue for some time in the future. We made a forecast of the number of people who could be anticipated to be laid off, but more recently the Canadian Manufacturers' Association attached a precise figure to its estimate. The Association stated that some 100,000 Canadians would lose their jobs in the next few months. Does the minister agree with the Canadian Manufacturer's Association estimate and, if not, what is his estimate?


Allan Joseph MacEachen: Madam Speaker, if the hon. member wants to get statistical information, I suggest he put a question on the Order Paper.


Some hon. Members:: Oh, oh!


John Edward Broadbent: 1 suggest, Madam Speaker, that answer reflects precisely this government's total lack of concern about the human lives affected by unemployment.


Some hon. Members:: Hear, hear!


LAY-OFFS IN INDUSTRIAL SECTOR
John Edward Broadbent: Madam Speaker, we have seen the minister's lack of concern about lay-offs in general. My next question concerns the industrial sector specifically.
We have lost 235,000 manufacturing jobs in the last four months. In the province of Quebec alone unemployment in manufacturing is at 12.7 per cent, and this morning Cameo announced 1,400 additional lay-offs in Montreal and Hamilton.
My question is straightforward, and 1 hope this time the minister will answer. Does he not agree that most of the 235,000 lay-offs in manufacturing, and in particular those laid off from Cameo this morning, are directly related to the high interest rate policy which has caused a fall off in investment on the one hand, and a decline in consumer spending on the other?


Allan Joseph MacEachen: No, Madam Speaker, I think the hon. member is off the mark. The basic cause for a good deal of the trouble in our domestic industry is a fall-off in foreign markets. It is due in large part to the decline in purchasing power of all our trading partners. The hon. member has to get into place the idea that other countries, not only Canada, are in the
14314


Michael Holcombe Wilson: Why do you make it worse?


Allan Joseph MacEachen: -at the present time of the situation we are facing. What I am attempting to avoid is worsening-


Michael Holcombe Wilson: You have already.


Allan Joseph MacEachen: -the situation by undertaking the massive stimulus the hon. member is advocating, which would have the result of pushing interest rates up further and making Canada less competitive than it is at present.
I ask the hon. member what solution does he have now for a situation where in the United States price inflation and wage increases are much less than in Canada? How do you expect to compete in the future unless Canada gets its inflation rate down? That is the central message of the budget.


Charles Joseph Clark: Get rid of you.


EFFECT OF INTEREST RATES ON INVESTMENTS AND PURCHASES
John Edward Broadbent: Madam Speaker, the rhetoric was interesting; it is just too bad the minister did not answer the question. He knows full well that most Canadian manufacturing is intended for the domestic market, not for export, and the question pertained to the decline in manufacturing jobs.
I would like to ask the minister, assuming he has a million dollars to invest, would he put it in a job-creating business project given the markets as they are now in Canada, or would he, because of the high interest rate policy, be more inclined to put it in a bank or trust company where he could get 15 per cent without risk. Alternatively, if he were a consumer would he now buy a television set, a car or refrigerator, when interest rates on consumer loans are at 19 per cent, or would he put off such purchases indefinitely?


DELIVERY OF MUNICIPAL TAX BILLS
Mr. Bud Bradley (Haldimand-Norfolk):: Madam Speaker, my question is directed to the minister responsible for the Canada Post Corporation. The self-delivery of bills by municipalities has become an area of discontent since the Canada Post Corporation has threatened court action. The minister knows that this has always been an accepted practice, and restrictions will not increase employment in Canada Post Corporation but, in fact, will cause unemployment as countless senior citizens, handicapped persons, students and boy scouts, etc., will lose their jobs in part-time delivering of bills.
In order to clarify this situation, is the minister at least willing to introduce an amendment to the Canada Post Act, reinstating the exception in question, and thus allowing the continuance of this practice by municipalities?


Some hon. Members:: Hear, hear!
[ Translation]


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Madam Speaker, this matter was discussed at length when Parliament was debating the bill to establish the Canada Post Corporation. The hon. member should have taken part in the discussions in committee at the time, especially since representatives of his own party discussed the matter at the time and voted with the government for the bill to establish the Canada Post Corporation, a bill that does not give charitable institutions the right to encroach on the exclusive letter delivery monopoly of the corporation.


T.A. Bud Bradley: Madam Speaker, we were not talking about charitable institutions. We all know, on this side, how bills are passed in this House. I might remind the minister, if he is taking cheap shots, that it was not this side which said that small business should not depend on Canada Post.


Some hon. Members:: Oh, oh!


T.A. Bud Bradley: This leads me to another area concerning storekeepers and their bills.
Will the minister answer that question, because surely the answer is he will put the money in the bank and put off purchases, and that is why we have massive unemployment?


Allan Joseph MacEachen: The hon. member answered his own question and it is the kind of answer I would expect from a comfortable socialist who does not believe in the free enterprise system.


Some hon. Members:: Oh, oh!


DELIVERY OF MERCHANTS' BILLS
T.A. Bud Bradley: Will the minister at least confirm that section 15(5) of the act grants storekeepers and other merchants the right to send out their bills using their own employees?
[ Translation]


André Ouellet: Madam Speaker, it is not customary for a minister of the Crown to give a legal opinion. The hon. member can read the act as well as 1 can.
January 26, 1982


ADMINISTRATION OF JUSTICE
Hon. Allan Lawrence (Durham-Northumberland):: Madam Speaker, my question is directed to the Solicitor General. Could the minister advise whether the moneys paid by the RCMP to convicted killer Olson have been physically removed from Canada and may therefore be outside of the jurisdiction of the Canadian government in the event of any recovery attempt?


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, the trustee who was originally in possession of those funds has not been totally forthcoming in reply to inquiries made to him.


Mr. Hnatyshyn:: That makes two of you!


Robert Phillip Kaplan: My understanding is that that fund is still in Canada and in the hands of a trustee.


An hon. Member:: What is FIRA going to say?


DETAILS OF PAYMENT AGREEMENT
Allan Frederick Lawrence: My supplementary question is directed to the same minister, Madam Speaker. As well as the payment of moneys at Olson's request, were there any other inducements, benefits or considerations held out to Olson in the RCMP agreement with him, or, for that matter, even outside of the agreement?


Robert Phillip Kaplan: Madam Speaker, there were no other inducements offered to him of which 1 am aware.


HUMAN RIGHTS
Mr. Ian Watson (Chateauguay):: Madam Speaker, I have a question for the Minister of External Affairs. Two weeks ago, in a vote in the Fifth Committee of the United Nations, the U.S., Canada and Turkey alone, among members of the Western Alliance, voted to cut specially allocated funds for the United Nations' "missing persons" group which has been responsible for focusing world attention on the disappearance of some 20,000 people, more than half in Latin America, in some 20 different countries. Diplomatic observers at the United Nations attributed the U.S. vote to the policy of the U.S. administration to ease up human rights pressure on allies in Latin America. 1 would ask the minister whether Canada, as well, is easing up on its support for human rights in Latin America. If not, will the minister instruct his officials at the United Nations to continue full support for this vital UN human rights function?
Oral Questions


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, I can assure the hon. member and the House that human rights remain one of the foremost priorities of Canada in our foreign policy.


An hon. Member:: Right after martial law.


Mr. Crosbie:: We saw that!


Mark R. MacGuigan: To the best of my recollection, with respect to that vote, and 1 will subsequently check our vote, it was not cast on the substance of the matter at all, but was cast with respect to budgetary considerations which were not being observed.


Some hon. Members:: Oh, oh!


Mark R. MacGuigan: However, I will review that file and, if I have the opportunity, 1 will subsequently report to the House. In any event, it certainly does not reflect any lessening priority, on our part, for human rights.


THE ECONOMY
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, my question is directed to the comfortable capitalist, the Minister of Finance. Yesterday, at the Canadian Club, the minister said that he anticipated a recovery in the world economy in the next six months; but he also said, concerning the American economy, that interest rates in the United States could rise again if there were a strong recovery and if there were government borrowings there they would put heavy pressure on financial markets.
1 would like to ask the Minister of Finance to try to resolve this contradiction for the House. Is he saying that he expects American interest rates to go down, or is he saying that he expects them to go up? If he is expecting them to go up, can he tell us what this will do to Canadian interest rates and what this will do to potential recovery of the Canadian economy over the next six-month period?


Allan Joseph MacEachen: Madam Speaker, 1 did state in the speech that it was the opinion of most public and private forecasters that there would be a widely-based recovery in the United States and in Europe. In fact 1 pointed out that there is already a recovery taking place in Europe, and, to some extent, in Japan, a slight recovery. The expectation is that that recovery will gain momentum by the end of the second quarter of 1982.
I did add what I consider to be the wise observation that this type of recovery could be impeded by another surge in interest rates, particularly if there were very heavy borrowings by the United States; that, of course, relates to their deficit and how they will deal with that. We will probably know more about

January 26, 1982
Oral Questions
that when the President makes his statement tonight. However, it seems to me that yesterday, in attempting to assess the economic situation as thoroughly as 1 could, it was my obligation to point out the risks which were also involved; and, in this case, I pointed them out with respect to American possibilities.


John Carnell Crosbie: You tell Turner he was at fault. That's what you did.


Bob Rae: Madam Speaker, 1 am sure that President Reagan will appreciate the detailed economic management advice on how to deal with deficits from the Minister of Finance. However, I would point out to the minister that it was Calvin Coolidge, in 1928, who said that he anticipated the future with optimism, and 1 suggest to the minister that that is the kind of answer we are getting. However, he did not actually deal with the question I asked him with respect to Canadian interest rates.


REQUEST FOR ASSURANCE ON INTEREST RATE MOVEMENTS
Bob Rae: 1 would like to ask the minister for a flat statement. If American interest rates go up as a result of the policies of the American government and conditions in the United States, can he at least give us the assurance, this time, that we will not join the Americans on that roller-coaster which will have the effect of devastating our real economy and throwing hundreds of thousands more Canadians out of work? Can he give us the assurance that he now intends to follow a made-in-Canada interest rate policy which will respond to conditions in this country and not to policies followed elsewhere?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, the hon. member knows, I am sure, that every week there is a public tender of treasury bills in the market, in Ottawa-


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: -in Canada, and that the interest rate, the bank rate which results from that, is totally made in Canada, to that extent.


Mr. Stevens:: By the Bank of Canada.


Allan Joseph MacEachen: Except, Madam Speaker, the hon. member always-


An hon. Member:: You know better than that!


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: -overlooks the fact that Canada is part of an international financial market, that it is part of an international trading system, and that Canada gets a great deal of benefit from participating in that international trade and payments system. What happens in the United States
affects Canada, as it does West Germany, the United Kingdom, Italy, and every industrialized country.


An hon. Member:: What are they doing now?


Allan Joseph MacEachen: There is no way by which it is possible to insulate Canada against interest rate changes in the United States without paying a very heavy price in the form of short-term capital movements from Canada and in the form of very heavy depreciation of the Canadian dollar. That is the trade-off that the hon. member never mentions.


Some hon. Members:: Hear, hear!


THE BUDGET
A. Daniel McKenzie: Madam
Speaker, my question is for the Minister of Finance. The minister will be aware of a tax provision. Resolution 53, which will drastically reduce a war veteran's annual income. A Canadian veteran can ill afford to lose a potential $3,500 income which is gained by having the working spouse claim him as a dependant for income tax purposes. Will the minister agree to rescind immediately this extremely punitive tax measure which will see veterans and their pensions being put front and centre on the taxman's firing line?


Allan Joseph MacEachen: Madam Speaker, the hon. member has raised another question with respect to veterans. Yesterday the Leader of the Opposition alleged that the taxation of employee benefits would have a direct effect on veterans pensions. I would like to say with regard to one type of veterans pension, namely, veterans allowance as determined by the recipient's income and means, there is no impact whatsoever of the taxation of employee benefits upon the receipt of veterans pensions. I want to clear up that allegation made yesterday by the Leader of the Opposition. The hon. member has given an interpretation of a particular resolution which we will be examining in the Committee of the Whole when we get there. If the hon. member wants to make representations then I will be very glad to consider them.


THE ECONOMY
Hon. George Hees (Northumberland):: Madam Speaker, I would like to address a question to the Minister of Finance. Inflation in the United States decreased from an average of 12.5 per cent in 1980 to an average of 8.9 per cent in 1982. Inflation in this country increased from an average of 10.1 per
January 26, 1982

cent in 1980 to an average of 12.5 per cent in 1982, a new record for this country. Tax rates for individuals in the United States were lowered on January 1 by an average of 83/4 per cent, making it possible for a family of four earning $20,000 a year to pay $203 less in taxes this year than last year. Has the minister seriously considered introducing the same kind of economic policies, which are doing a far better job of reducing inflation and giving hard-pressed taxpayers a break in the United States than his policies are doing here in Canada?


Allan Joseph MacEachen: No, Madam Speaker. I believe it was some months ago that the hon. member for St. John's East asked me if I would implement the Reagan policy in Canada in order to achieve so-called beneficial results. I stated at that time that one of the major characteristics of the Reagan policy was the elimination of very important social programs which 1 could not recommend to the House of Commons. I would say to the hon. member that it surprises me that he would point to the United States as a source of tax reductions which are undertaken annually in Canada through the indexation system which we all support.
In the last budget, in addition to the retention of indexing, reducing the tax rates and lowering the marginal tax rates, all of these things have been done with the effect that 12 million Canadians will pay less tax in 1982 than in 1981. That is Canada. I would like the President of the United States to top that in his budget address tonight.


QUERY RESPECTING MINISTER'S APPROACH
George Harris Hees: Madam Speaker, the fact that taxes for ordinary people in the United States are going to be considerably lower this year than a year ago seems to bear no weight with the minister at all. The minister has said time and time again that the number one project that his government has is to lower inflation. The United States has materially lowered inflation during the last year. The minister and his policies have materially increased inflation, as I have outlined to the House, and he has not commented upon that because he knows the facts are true and that his policy is a failure. Is it not now safe to describe the minister's approach to economic affairs as simply this: everybody is out of step but Allan?


Allan Joseph MacEachen: Madam Speaker, may I for a moment return to the previous question which the hon. member asked, comparing the tax situations in Canada and the United States. 1 would like to tell my hon. friend that the average industrial wage in Canada this year will be about $22,000. At this income level, the tax savings from indexing, the marginal tax rate cuts and the increased federal tax credit, are $625 for a single-earner married couple with two children-that is not bad-and $220 for a single person. I think that is considerably better than the statistics which the hon. member ascribed to the United States.
Oral Questions


George Harris Hees: What about inflation which the minister says is the number one problem? He never even mentioned that.


THE BUDGET
Mr. Bill Clarke (Vancouver Quadra):: Madam Speaker, 1 want to ask the Minister of Finance about his unprecedented budgetary attack on some 15 million Canadians who are covered by health and dental plans. Are his proposals to tax employer contributions, which will discourage Canadians from buying their own dental and health insurance and result in higher costs for lower-income Canadians, just part of a broadside attack on all worth-while social objectives, or will he come to his senses and reverse these provisions?


Allan Joseph MacEachen: Madam Speaker, the hon. member has raised the question of the taxation of employee benefits, particularly health and dental plans. I ask the hon. member to consider the situation where certain employees receive part of their compensation in the form of employer contributions toward these plans, all non-taxable, and other employees receive their total compensation in the form of regular income which is fully taxable. It is in order to bring that situation into line that it was decided to tax these particular benefits.
I want to tell the hon. member that the tax reductions which 1 just mentioned, $625 for a married couple with two children, and a single earner family, will in most cases more than compensate for the increased taxes that arise from the taxation of employee benefits. 1 have the average specific numbers. The hon. member will see that the tax to be paid by the average employee is much less than the tax reduction that he will experience.


REPRESENTATIONS MADE BY CONCERNED ORGANIZATIONS
Hon. David Crombie (Rosedale):: Madam Speaker, my question is supplementary to the previous question. The minister may recall that I asked a question of him on December 16 with respect to dental and health benefits. At that time he suggested it was a "red herring".
Since then the minister has received a number of briefs from the Canadian Life and Health Insurance Association, the Canadian Labour Congress, from the Building Trades Council, and the Canadian Construction Association. At the time the minister indicated that he would look into the consequences of the suggestions in those briefs. They make two points, first, that his budget affects the credibility of the future of those private health and dental plans and, second, that there will be increased extra costs to millions of Canadian working people.

January 26, 1982
Oral Questions
Why does the minister still refuse to deal with those briefs and those suggestions from those very reputable organizations?


Allan Joseph MacEachen: Madam Speaker, I have examined briefs which have been received. I have given a good deal of consideration to this particular problem. I intend to receive further representations which I am sure 1 will be getting later in the month when I resume my meetings with the interested parties.
As the Leader of the Opposition said, the resolutions will be before the House of Commons and they will all be examined in detail, at great length. I also understand and believe this will be an opportunity to delve into this question, to make the comparisons that I have attempted to make-


Michael Holcombe Wilson: How long do you need?


Allan Joseph MacEachen: In answer to the question put by the hon. member 1 want to assure him that I am giving very careful consideration to all these matters and 1 respect the parliamentary process which provides for detailed examination of all these measures by the House of Commons. That has not yet taken place and I think that is an appropriate place for us to go into these matters in very great detail.


EXTERNAL AFFAIRS
Miss Aideen Nicholson (Trinity):: Madam Speaker, my question is for the Prime Minister. In view of the Prime Minister's meeting with the president of the Canadian Polish Congress and other representatives of Canadian Polish associations yesterday, could the Prime Minister tell the House what the outcome of the meeting was, and particularly whether there was agreement on Canada's position in relation to the very distressing situation in Poland now?


An hon. Member:: Just like you wrote it, Pierre.


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I would not want to speak on behalf of the members of the Polish Congress.


Some hon. Members:: Oh, oh!


An hon. Member:: You are speaking for Jaruzelski.


Pierre Elliott Trudeau: It is not my habit to report the position of others. I think they are able to do that for themselves.
My impression is that we agreed on three fundamental points, the ones that Canada has defended both in the NATO forum and since I made my statement on December 30. The points are that, first, there should be a relaxation and cessation of martial law; second, that dialogue should resume between the Polish government, members of Solidarity and the Catholic Church; third, that there should be a release of the prisoners who were put in jail following the imposition of martial law.


Some hon. Members:: Hear, hear!


ADMINISTRATION OF JUSTICE
Mr. Svend J. Robinson (Burnaby):: Madam Speaker, my question is for the Solicitor General and it again concerns the payment of $90,000 in blood money by the RCMP to Clifford Olson-an unprecedented agreement which the Solicitor General now admits he did not even know about until it was beyond his control.
In view of the fact that the Solicitor General originally stated that there was no federal money involved whatsoever, and then gave varying percentages, including 75 per cent, I would ask the minister what was the specific source of these funds. Was there some special informer fund? Precisely what percentage was paid by the federal government? Also, despite his statement that the word of the RCMP is their bond, even to convicted killers, what steps is the federal government taking to recover these funds?


Robert Phillip Kaplan: Madam Speaker, as to the recovery of the funds, that matter is under consideration between the attorney general of British Columbia and the "E" Division of the RCMP, as I have indicated before. I am looking forward to hearing from them at the conclusion of those discussions.


GUIDELINES GOVERNING PAYMENTS TO ACCUSED PERSONS
Svend Johannes Robinson: Madam Speaker, I note that the minister still appears to be unable to answer what percentage of this was paid by the federal government, or whether anything was paid by the federal government.
Yesterday the Solicitor General refused to assure Canadians that similar payments to those made in the Olson case would not be paid in the future, saying that he would continue to authorize them in accordance with the professional code of the RCMP.
Recognizing the possibility that this practice could lead to disturbed individuals killing for profit, or possibly being induced to confess to crimes that they may not have in fact committed, what are the specific guidelines in the RCMP professional code governing the authorization of such payments in the future?


Robert Phillip Kaplan: Madam Speaker, with regard to the percentage, I know that the hon. member was sounding off yesterday to the effect that, in his legal opinion, these payments would be entirely from the account of the federal government. That was not my view. My view was
January 26, 1982

that they were part of the provincial policing funds, like all other funds disbursed on account of that contract. In the current year those payments are billed and shared between the federal and provincial governments in the ratio of 56 per cent provincial and 44 per cent federal.
1 checked with the province of British Columbia and they confirmed that they did not view this as a federal responsibility, notwithstanding the legal advice of the member opposite, and that they too considered it to be part of the general provincial contract.
As far as payments in the future are concerned, the House will be interested to know that the New Democratic Party critic of the attorney general in the province of British Columbia has approved these payments, and I understand has said that if he were attorney general of the province he would have made the same agreement.
As I indicated recently, the position on agreeing to payments in the future is the same as the position on payments in the past; that is, that it is a matter of administration of justice within the province. I would want to assure that in the future the RCMP would bring such a demand from an accused or other offender to the attention of the attorney general of that province, as they have done in the past, so that that attorney general would have the same authority to deal with it as the attorney general of another province not served by the RCMP.


Some hon. Members:: Hear, hear!


FISHERIES
Hon. John A. Fraser (Vancouver South):: Madam Speaker, my question is for the Minister of National Revenue. According to press reports the minister has been involved in an anguished attempt to salvage the Fishery Products Limited plant at St. Anthony. Could the minister tell us how much federal money is available to help, how much the minister thinks it will cost, and how soon will some action be taken?


Hon. William Rompkey (Minister of National Revenue):: Madam Speaker, if you intend to allow that question I will simply say that 1 have represented St. Anthony for ten years and 1 do not intend to stand by and see the people of St. Anthony suffer in any way.


Some hon. Members:: Hear, hear!


DIFFICULTIES FACED BY EAST COAST FISHERIES
John Allen Fraser: In view of the fact that the government has now set up Michael Kirby as the minister for fisheries, and that the Minister of Fisheries and Oceans himself seems to have absolutely no role to play in the salvaging of the fishing industry on the east coast, and in view of the fact that Mr. Kirby said that our estimate of what it will
Order Paper Questions
cost is all wrong, and in view of the fact that the Minister of National Revenue cannot answer the question, I would like to put the question to the Minister of Fisheries and Oceans. Would the Minister of Fisheries and Oceans tell us how much money is needed, how soon it will be paid, and whether he, the Minister of Fisheries and Oceans, has any ongoing responsibility whatsoever for the financial difficulties of the east coast fisheries?


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, the hon. member's rhetoric should remind the House that he has discovered Newfoundland in the last month.


John Carnell Crosbie: When will you start?


Roméo LeBlanc: The first thing the hon. member did when he discovered the Newfoundland situation was to write a letter to me suggesting that we spend $100 million without any conditions-simply spend it. I believe that some of his colleagues on that side of the House might find that somewhat irresponsible.
The fact is, Madam Speaker, that before Christmas cabinet made a decision to give some assistance to the industry in the form of deficiency payments. That was very gratefully received. I think it was a good formula. Cabinet also made another decision for the purpose of protecting the communities of Gaultois and Grand Bank. The Lake Company should be encouraged to present to us a business plan that would allow us to help them in their recovery. That is already proving to be productive and very useful.
The matter of St. Anthony is more recent. We are looking at this subject, and 1 might tell the hon. member that he really should go to Newfoundland again. He might learn something else.


Some hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


[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. 2,728, 2,767, 3,021, 3,056, 3,060, 3,062, 3,148, 3,291, 3,292, 3,325, 3,341, 3,524, 3,561 and 3,567.

Order Paper Questions


Mr. Beatty: 1.	For 1980 and 1981, in how many instances did a commercial aircraft pass another aircraft in the air with fewer than 500 feet between them and, in each case (a) what were the aircraft in question, including the origin and destination (b) on what date and at what time did the incident occur (c) was an investigation conducted and, if so, what were the results?
2.	Is it a requirement that an investigation take place where near-misses of aircraft occur and, if so, what is the procedure followed?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: 1. An exact method to determine spacing between aircraft in flight in such critical measurements, does not exist at this time. Normally, Air Traffic Control Services conducts an investigation when aircraft under their control are involved and it is alleged that flight safety may have been jeopardized and/or less than the required minimum separation between aircraft may have existed. Within this process, investigations are conducted into both technical and critical losses of separation.
A technical loss of separation is defined as an occurrence in which less than the authorized separation minimum existed
but no evasive action was considered necessary by the aircraft or controller.
A critical loss of separation is defined as an occurrence in which less than the authorized separation minimum existed and one or both aircraft took evasive action, or would have instinctively done so had there been sufficient time or knowledge of the situation.
For 1980 and until July 1, 1981, of the critical losses of separation recorded, ten involved commercial aircraft which may have passed in close proximity to other aircraft.
See attached list for:
(a)	Aircraft in question; origin and destination.
(b)	Date and time of incident.
(c)	Results of investigation.
2. In all cases of suspected loss of separation or incident, where the involvement of air traffic control is indicated, a team is convened to investigate the occurrence. Such investigations are conducted under specific guidelines and a report is filed accordingly.
Place	(A) Aircraft	(B) Date	(C) ResultsVicinity of Hudson ST 27 Dorval-Hcights (Quebec) Kingston	SW 4 Ottawa-Dorval	Jun. 26/80	0946 L	Human error (forgetfullness) on the part of the air traffic controller.Vicinity of Victoria B737 Seattle-(British Columbia) Victoria	BE 90 Local at Victoria	Jul. 4/80	1009L	Air traffic controller counselled by United Management regarding adherence to procedures.Near Toronto Airport (Ontario)	LI011 Landing Toronto	MO 21 Landing Toronto	Sept. 6/80	1327L	Procedures revised and the air traffic controller counselled by Unit Management prior to return to duty.Vicinity of Thunder Bay (Ontario)	DC 9 Toronto-Thunder Bay	BE 90 Local at Thunder Bay	Oct. 15/80	1450L	Air traffic controller counselled by Unit Management on control service prior to return to duty.Vicinity of Broadview (Saskatchewan)	B727 Vancouver-Winnipeg	C500 Regina-Winnipeg	Nov. 7/80	1200L	Internal procedures revised and air traffic controller counselled by Unit Management prior to return to duty.100 miles south of Whitehorse (Yukon)	B737 Whitehorsc-Fort Nelson	B747 Anchorage-New York	Nov. 28/80	2002 L __	Pilot error on the part of the B737.Near Vancouver Airport (British Columbia)	DC 9 Departing Vancouver	C3I0 Local at Vancouver	Mar. 6/81	2142L	Traffic mix addressed by management and flow control measures initiated. Ground control procedures revised.Vicinity of Moncton (New Brunswick)	BE 200 Local at Moncton	PARD Local at Moncton	Apr. 22/81	1057L	New inter-unit agreement reviewed and implemented. Co-ordinator position installed in control tower.Vicinity of Empress (Alberta)	DA 10 Winnipeg-Calgary	C500 Regina-Calgary	Apr. 30/81	1655L	Direction issued to air traffic controllers to comply with existing separation minima.Near Quebec Airport (Quebec)	DC 9 Landing Quebec	DHC 2 Departing Lac St. Augustin	May 15/8)	1520L	Procedures published for traffic operating from Lac St. Augustin and, air traffic controller counselled by Unit Management regarding control practices prior to return to duty.
January 26, 1982


Mr. Herbert: 1.	With reference to the answer to question No. 2,419, of the amount received by the Department of National Revenue for 1980, what portion was received after the initiation of court proceedings?
2.	What is the estimated cost of collection of the reassessed amount?
3.	What percentage of companies filing tax reports were audited?
4.	What percentage of companies audited were reassessed increased taxes?


Bill Rompkey: 1.
This information is not available. Our records do not break down amounts received in corporation reassessing increases between receipts after the initiation of court proceedings and receipts prior to any court proceedings.
2.	No estimate is available for the costs of reassessing corporations alone. The total cost of all enforcement for all classes of taxpayers is estimated to be $1 for every $4.7 in additional taxes assessed.
3.	Year ending March 31, 1980: 4.7 per cent.
4.	41.2 per cent.


Mr. Cossitt: 1.	Is the government funding an abortion drug known as "Depo-Provcra" through the Canadian International Development Agency in certain countries and, if so, which countries?
2.	Was the drug thoroughly researched by the Department of National Health and Welfare and, if so, what were the findings and what is a complete description of the manner in which the drug works?
3.	(a) To the knowledge of the government, was the drug banned by the United States Food and Drug Administration for use in that country and, if so, for what reason (b) does the government consider the administration to be a leading authority on drug administration and distribution and, if so, for what reason is the government promoting a drug that was banned by that authority?


David P. Smith: I am informed by the Canadian International Development Agency and Health and Welfare Canada as follows:
1.	At present, CIDA is not involved in the funding of Depo-Provera (which is a contraceptive and not an abortifa-cient) to any countries. Several years ago, CIDA, in a joint program with the World Bank, contributed financially to the purchase of two million doses of Depo-Provera at the express request of the government of Thailand as one of several components in a family health project in that country.
2.	The Department of National Health and Welfare does not carry out premarket developmental research on drugs: a notice of compliance is issued provided the manufacturer has supplied data meeting the requirements of the Food and Drugs Act and regulations. Depo-Provera is a long-acting progestogen which has been marketed in Canada since 1961 for endometriosis in non-pregnant women and for palliative treatment of advanced endometrial carcinoma.
3.	(a) Depo-Provera is marketed in the United States for the palliative treatment of inoperative, recurrent and metastatic endometrial and renal carcinoma.
Order Paper Questions
(b) The drug is not banned in the United States.


Mr. McKenzie: 1.	With reference to section 10.43 of the 1980 Report of the Auditor General, what is the projected budget requirements to carry out home support services for the 50 per cent veteran population which will be over 65 by 1985?
2.	Has the department of Veterans Affairs developed any other long-term projects to service the aging veteran population other than the visiting homemakers and meals on wheels and, if so, what are they?
3.	Has the Department made any plans regarding a veterans health card plan and (a) if so, what are they and how would the system work (b) if not, for what reason?


Hon. W. Bennett Campbell (Minister of Veterans Affairs):: 1.	For fiscal year 1984-85, it is estimated that $3,100,000 will be required for home support services for disability pensioners of all ages, to whom the Aging Veterans Program applies.
2.	Veterans Affairs instituted the Aging Veterans Program in response to the needs of the aging veteran population. Services include domiciliary care, ambulatory health care, home modifications for the handicapped, and home care services. Included in home care services are professional health care and assistance such as personal care, preparation of meals, housekeeping, groundskeeping and other necessary tasks required in the upkeep of a home. Currently the program is available to disability pensioners where the need arises from a pensioned condition.
3.	No. DVA did study the feasibility of a health card plan and found it to be impractical.
(a)	Not applicable.
(b)	A standard health card system is not practical. For disability pensioners, it is not always possible to list all pensionable conditions on a wallet-size card, and the listing of certain conditions would not be in the best interest of the veteran. As eligibility of non-pensioners for treatment is dependent on the level of their income, it is not possible to issue a health card which would certify that treatment costs are payable by DVA.


Mr. McKenzie: With reference to section 10.49 of the 1980 Report of the Auditor General, was a formal evaluation procedure instituted within the Department of Veterans Affairs to serve as a basis of modifying future health care initiatives and, if so (a) who carries out the evaluation and to whom is it presented (b) is the evaluation made public (c) how are the recommendations acted upon and is there an established action procedure?


W. Bennett Campbell: Section 10.49 of the Auditor General's report refers to the project work preceding the introduction of the Aging Veterans Program which commenced April 1, 1981. The scope of this project is limited to a relatively few disability pensioners. Formal evaluation of projects of this nature are only meaningful when the programs have been in full operation for 3 to 5 years.

January 26, 1982
Order Paper Questions
A formal evaluation plan is being developed for use in assessing the results of the current limited initiative.
(a)	future impact evaluations will be carried out by the Departmental Directorate of Policy Planning and Evaluation and presented to the deputy minister;
(b)	evaluations are available to the public within the relevant government guidelines;
(c)	the program is established by regulations, therefore approved recommendations for altering the program will, as a minimum need, take that form for implementation.


Mr. McKenzie: With reference to section 10.55 of the 1980 Report of the Auditor General, what were the results of the quest of the Department of Veterans Affairs into the potential need for extending the scope of an automated client database information system?


W. Bennett Campbell: All studies and experience to date have concerned both the viability and necessity of maintaining and extending Veterans Affairs automated client database information. It is considered an integral element in Veterans Affairs' program of improvement and modernization. Since the Auditor General's review, the client database has been extended to provide management information to the Canadian Pension Commission on its high volume processes such as application and appeals. This information will assist the commission in the monitoring and control of these processes.
The primary current activity is to extend the use of the client database in the Pacific region of the veterans services program. This will be followed by an active program planned for the next two years to further extend both the content and use of this database to other regional and district offices supporting Veterans Affairs activities.


Mr. Neil: By province, what revenue is derived by the government from excise and customs?


Bill Rompkey: This information is contained in the "Report of the Department of National Revenue, Customs, Excise and Taxation, for the fiscal year ended March 31, 1981" tabled in the House of Commons October 27, 1981.


Mr. Dantzer: 1.	How many individuals made Canada Pension Plan contributions in the (a) third quarter of 1980 (b) fourth quarter of 1980 (c) first quarter of 1981 (d) second quarter of 1981 ?
2.	(a) How many CPP contributory accounts are on file (b) are they filed by social insurance number and, if not, what filing mechanism is used?
3.	Was the list of CPP accounts ever cross-checked with the Department of Employment and Immigration's list of social insurance numbers to ensure accounts were not set up for non-existent persons?


David P. Smith: 1 am informed by Health and Welfare Canada and Revenue Canada as follows:
1.	Revenue Canada advises that these figures are not available by quarters. The monthly remittances of employers of Canada Pension Plan contributions do not identify the number of contributors involved. The number of individuals who contributed to the Quebec Pension Plan and Canada Pension Plan in the calendar year 1980 as determined from the T1 1980 individual income tax returns assessed to the date of the question totalled 10,447,982. The structure of the T1 is such that it is not possible to break out a separate figure for the Canada Pension Plan at this time.
2.	(a) Health and Welfare Canada has at present 13,481,434 individual contributory accounts on the file, known as the Record of Earnings File.
(b) They are filed by social insurance number.
3.	Before posting entries to the Record of Earnings File, the social insurance number of each record is checked against a copy of the Canadian Employment and Immigration Commission's file of social insurance numbers.


Mr. Dantzer: 1.	How many individuals, according to Canada Pension Plan files, contributed more than their yearly maximum last year?
2.	Does the Department of National Revenue notify the CPP of the number of persons who claim refunds for overcontribution to the plan?


Bill Rompkey: 1.
The number of individuals who overcontributed to the Canada Pension Plan in 1980 is not yet available. The number for 1979, derived from the number of refunds through the 1979 T1 individual income tax return system, totalled 2,792,715.
2. Yes.


Mr. Herbert: Will any bonus amounts be payable in 1981 to SM and EX groups and, if so (a) will the amounts be allocated to the appropriate departments (b) arc any such expenditures covered in the Main Estimates?


Mr. Norman Kelly (Parliamentary Secretary to President of the Treasury Board):: Performance award payments were made in 1981 to employees in the EX groups. The amounts paid by departments were charged to the relevant vote of the department out of moneys provided for payment of salaries and wages. No payments were made in the SM group as conversion to this group has not been completed. It should be noted that some employees currently in the upper levels of some groups, that may be converted to the SM category, may
January 26, 1982

have received an exceptional bonus payment under existing pay plans.


Mr. Munro (Esquimalt-Saanich): 1.	How many hovercraft are on service with the Coast Guard on the west coast and where is each located?
2.	How many additional hovercraft are on order for service with the Coast Guard on the west coast and where are they to be located?
3.	(a) What is the (i) primary (ii) secondary task of the hovercraft operating on the west coast (b) are there to be any further tasks and, if so, in what order of priority (c) at whose command are these hovercraft used as resources in each task?
4.	(a) What is the cost of each hovercraft and are they all of the same type (b) what is the crew size of each (c) how many crews are in place or are to be put in place to man these hovercraft?
5.	What is the size of the administrative tail for this stable of hovercraft?


Robert Theodore Bockstael: 1. Two hovercraft CG021, CG039 are stationed at Vancouver International Airport terminal. A third hovercraft CG045 entered service temporarily as a backup unit on November 1, 1981, at Vancouver International Airport terminal. In the near future, CG045 will be stationed in the Gulf of Georgia area to assume its new search and rescue (SAR) role.
Order Paper Questions
2.	None.
3.	(a) (i) Air and Marine Search and Rescue, and civilian and humanitarian incidents.
(ii) Aids to navigation maintenance work, emergency operations (oil pollution), SAR prevention activities, co-operation with local authorities, transport of peace officers, steamship inspectors, and fisheries officers, co-operation with provincial emergency program (flood relief).
(b)	No. The primary function of the hovercraft is search and rescue. Secondary functions other than those mentioned above in 3 (a) (ii) cannot be considered in order not to compromise the hovercraft's primary role.
(c)	The responsibility to direct the use of and to allocate SAR forces, both primary and secondary, during a SAR incident rests with the Rescue Co-ordination Centre at Victoria.
In the event the hovercraft is used for secondary tasking, managers of other departments must request permission from the regional manager, search and rescue who is primarily responsible for the operation of these units. In any event the Rescue Co-ordination Centre at Victoria is always informed on the whereabouts of the hovercraft when assigned on secondary taskings.
4. (a) Type	Cost	CrewCG02I SRN5 (38.5 ft.)	$350,000 (July-1968) (Purchase price)	3CG039 SRN6 (48.5 ft.)	$1,100,000 (Mar.-1977) (Purchase price)	3CG045 SRN6 (48.5 ft.)	$500,000 (Nov.-1981) (rebuilt cost)	3(b) Crew:	1 seaman rescue specialist
2 craft operators to share duties pilot/and navigator and communications
(c) 7 crews of 3; total: 21 persons
5.	One officer-in-charge and one secretary/typist for administrative duties, both located at the hovercraft base. Financial and staffing support functions provided by regional manager, search and rescue and Coast Guard regional headquarters at Vancouver.


Mr. Hnatyshyn: Is the government giving consideration to establishing a consulate in Kiev in the Ukrainian Soviet Socialist Republic?


Mark R. MacGuigan: Given the large number of Ukrainian-Canadians in Canada and the strong ties which understandably bind them to their relatives and friends in the U.S.S.R., the Canadian government has long given consideration to the opening of a consulate in Kiev. In times of government fiscal restraint, however, it is unlikely that funds could be set aside for this purpose in the immediate future. Budgetary limitations have forced the government to carefully re-examine Canadian overseas
representation and to limit the expansion of foreign operations except in those areas which there is an urgent and overwhelming demand for a Canadian presence.
If a decision were taken to open a second mission in the U.S.S.R., Kiev would clearly be the preferred site. Unfortunately, until such time as funds are available and a consulate in Kiev becomes a top priority, the government must continue to monitor developments in the Ukraine from our embassy in Moscow.


Mr. Cossitt: What is a current list of all Soviet diplomats accredited to Canada and, in each case, what was his/her date of arrival, what is his/her diplomatic position and where is he/she stationed?


Mark R. MacGuigan: Soviet diplomats accredited to Canada are stationed at the embassy of the U.S.S.R. in Ottawa or at the Consulate General in Montreal. They are stationed as follows:

Order Paper Questions
Embassy of the U.S.S.R. in Ottawa
Name	Position	Date of arrival
His Excellency		
Dr. Alexander N.		
Yakovlev	Ambassador	July, 1973Mr. Alexander S. Novikov	Minister-Counsellor	December, 1977Mr. Igor Konovalov	Counsellor (Commercial)	April, 1980Mr. Alexey Makarov Mr. Vladimir I.	Counsellor	July, 1980Mechulayev	Counsellor	December, 1976Mr. Evgueni A. Pozdniakov	Counsellor	November, 1980Mr. Valentin F. Fomitchev	Counsellor	June, 1978Mr. Nikolai N. Plechanov	Attache (Agricultural)	December, 1977Mr. Alexandre F. Tretiakov	Attache (Scientific and	Technological Affairs)	December, 1978Mr. Anatoli G. Arsenko	First Secretary	November, 1979Mr. Anatoli K. Balashov	First Secretary	September, 1980Mr. Vladimir 1. louchine	First Secretary	January, 1980Mr. louri M. Sournine	First Secretary	August, 1979Mr. Sergei Krouglov	First Secretary	September, 1981Colonel Boris G.	Military, air and	Samorodov	Naval Attache	October. 1981Commander V. Ignatiev Lieutenant Colonel	Assistant Naval Attache	October, 1980Vladimir 1.	Assistant Military	Vakhruchev	Attache	September, 1978Lieutenant Colonel Y.A.	Orine	Assistant Air Attache	February, 1981Mr. Evgueni Goussarov	Second Secretary	October, 1981Mr. Serguei M. Kachtanov	Second Secretary	February, 1981Mr. Boris P. Smirnov	Second Secretary	January, 1979Mr. Alexandre Podakine Mr. Vladimir G.	Second Secretary	October, 1981Mukharkin	Third Secretary	June, 1978Mr. Valeri Safonov	Third Secretary	February, 1981Mr. Andrei Tchoupine	Third Secretary	October, 1980Mr. Andrei A. Plavinski	Attache (Commercial)	November, 1976Mr. Vitaly P. Tkachenko	Attache (Commercial)	Mav, 1977Mr. Serguei Bulgakov	Attache	July, 1979Mr. louri M. Demkine	Attache	October, 1978Mr. Valeri Delendik	Attache	April, 1981Consulate General of the U.S.S.R.	in Montreal	Name	Position	Date of arrivalMr. Alexandre S. Ycreskovski	Consul-General	March, 1980Mr. louri 1. Strijov	Consul	December, 1977Mr. Lev M. Romanov	Consul	October, 1981Mr. Valeri P. Matvee*	Vice-Consul	April, 1979Mr. Serguei 1. Kozlov	Vice-Consul	May, 1979Mr. Teimuraz G. Alassania	Vice-Consul	May, 1980Mr. Gleb P. Perepiliak Mr. Vladimir F.	Vice-Consul	January, 1980Kouznetsov	Vice-Consul	July, 1981Mr. Vladimir 1. Rechetilov	Vice-Consul	February, 1981


Mr. Herbert: 1.	Does the Department of the Environment intend to locate daycare centres before the end of the fiscal year 1982-83 and, if so, in which locations?
2.	Has construction work started at any of these locations and, if so, what is the estimated cost?


Mr. Roger Simmons (Parliamentary Secretary to Minister of the Environment and Minister of State for Science and Technology):: 1. The Department of the Environment plans to locate a daycare centre at the Downsview, Ontario, headquarters of the Atmospheric Environment Service before the end of fiscal year 1982-83.
2. No.


David P. Smith: Madam Speaker, if question No. 2,498 could be made an order for return, this return would be tabled immediately.


Madam Speaker:: The questions enumerated by the Parliamentary Secretary have been answered. Does the House agree that question No. 2,498 be made an order for return? The return would be tabled immediately.


Some hon. Members:: Agreed.


Mr. Crouse: What is the number of consultants employed on contract by the Department of Energy, Mines and Resources and. in each case (a) what is his/her name, salary and job description (b) what is the length of the contract (c) what arc the terms of the contract?
Return tabled.


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


Madam Speaker:: The remaining questions shall be allowed to stand.



GOVERNMENT ORDERS


Charles Joseph Clark: That in the opinion of this House the opposition of Canadians from all walks of life, as expressed to the Members of Parliament of all three parties, proves conclusively that the budget of November 12, as amended by the statement in this House by the Minister of Finance on December 18, should be withdrawn and immediately replaced by a new budget.
He said: Madam Speaker, the purpose of this motion is straightforward and simple. It asks that the government withdraw a budget which was a mistake and that it bring in a new budget to create jobs for the Canadian people and, if not to create confidence, at least to bring a halt to the despair that is stalking the country.

The minister today may defend his budget by saying that this is a time for hard decisions and a time to be tough enough to stick by those decisions. Everyone across the country accepts the need to make tough decisions in our present economic circumstances. The issue about this budget is not whether the government is tough. The issue here is whether the government knows what it is doing, and the issue in this debate is whether, in the face of overwhelming evidence that this budget does not do what the government pretends it does, the government will have the courage to pull the budget back or whether it will push this budget through, whatever the damage, whatever the costs to individual Canadians and whatever the costs to the integrity and the strength of this country.
If I may say so, for individual Members of Parliament on the government side, many of whom have been heard over the last several weeks expressing their views and the views of their constituents on this budget, members who were sent here in a party's name but with a deeper responsibility to a nation and to its people, the issue, if the minister ignores the facts that we all know and inflicts this terrible harm on millions of Canadians, is whether the Liberal Members of Parliament will put their country's interests first or slink subserviently into obeying their political masters.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: As you know, Mr. Speaker, when the government failed to show the slightest interest in how the budget was affecting Canadians in their daily life, my party's caucus set up a committee to seek the opinion of the Canadian people. During the last three weeks, 62 members of our caucus held hearings in 15 communities across Canada. One hundred and sixty-eight people were heard by our committee and gave their views on the budget and the economy. These people represented Canadians from all walks of life, including pensioners and Indian bands, professional associations and consumer groups, business and labour. All were unanimous in their opposition to the budget. Everywhere the same message was heard: The budget must be withdrawn before Canada goes under! When the caucus committee's report is made public, the members of this House will realize how great the opposition to the budget actually is. They will understand the frustration of small businessmen upon realizing that the government has completely changed the rules of the game. They will hear the anger of pensioners who see their insurance plan is being taxed before they even get the money to which they are entitled. They will realize that the Canadian people are deeply disappointed in this government which no longer deserves their confidence. [English]
Mr. Speaker, all of us in this House know the dismal statistics about Canada's economy. From August to December last year 235,000 Canadians lost their jobs across Canada, and in a presentation to our committee the Canadian Manufacturers' Association gave its estimate that another 100,000 jobs will be lost in the manufacturing sector in the next few months
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alone, a crisis aggravated by this lay-off budget of the Liberal government. A record 8,055 Canadian businesses were forced to declare bankruptcy in 1981. Farm bankruptcies were 18 per cent higher in 1981 than they were in 1980, and they were 109 per cent higher last year than they were in 1979.
Canada Mortgage and Housing estimates that as many as
40,000	Canadian families may lose their homes because of high interest rates. Indeed, the prospects are that this situation will get worse. The November Conference Board forecast was as follows:
Next year holds a bleak prospect for the Canadian economy and for households in particular. . . continuing double-digit inflation, interest rates, increasing unemployment, declining business investment and the weakness in the United States all combine to rule out the possibility of a quick turnaround in the pace of economic activity.
As dismal a story as those statistics tell of a government wantonly squandering the potential of one of the richest nations in the world, those figures do not begin to describe the individual hardship and despair of countless Canadians. Many of those people came to our committee because they had despaired of the government's listening, but they hoped Members of Parliament might carry their case and their concern there to the floor of the people's Parliament.
The gross numbers on housing shortages and the cost of housing just cannot describe the fear, for example, of many young couples that the working wife may become pregnant, because if she does, they will have to give up the home they worked so hard to buy since one salary will not be able to support that home.
The gross numbers on lay-offs cannot describe the fear of the plant worker in Ontario, in Quebec or anywhere across the country who is out of a job now after more than 20 years and has nowhere to turn. It cannot describe the fear of those people who wonder if their number is among the 100,000 other jobs that the Canadian Manufacturers' Association expects to be lost in the Canadian manufacturing sector. The gross numbers on inflation and interest rates cannot describe the despair that, according to testimony received in Nepean, has doubled calls to the suicide prevention centre in Ottawa.
These are but a few of the examples given to our budget committee across the country. I know that such stories are not limited to members on this side of the House. The tragedy of this budget is that its author either did not know or, worse, did not care about the impact on hardworking Canadians who are simply trying to hold on to their houses, to hold on to their jobs, to hold on to their small businesses or farms and to pass something better along to their children.
It is clear that this budget was prepared on false premises and introduced under false pretences. It was written in September, before we felt the full force of the recession that is now gripping Canada. The budget was written for conditions that had passed before it was presented. On those grounds alone the government should introduce a new budget which would respond to the current reality in Canada.

January 26, 1982
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As I said in November, it is a budget which was dishonest in its presentation. It was put forward as being equitable but the evidence is overwhelming that ordinary working men and women or Canadians who want to work are punished terribly by it. The budget helps multimillionaires but takes all or part of the child tax credit away from at least 60,000 Canadian women. It lowers pensions received by Canadian veterans. It attacks the security of some 13 million Canadians depending on insurance policies for future security. Beyond the economic damage inflicted by this budget on literally millions of Canadians, the injustice extends to creating among many of our citizens, such as Canadians who had taken up investment incentives or Canadians who had followed plans for their own security, the sense that they have been betrayed by their own government.
The budget was described as a weapon against inflation. The one certain thing this budget will do is feed inflation. The proposal to tax employee benefits guarantees that hundreds of thousands of Canadian workers will demand higher wages in new contract negotiations, to make up in cash what they have lost in benefits.
John Fryer, the president of the National Union of Provincial Government Employees who appeared before our committee, estimates that 90 per cent of his 240,000 members will face increased federal taxes as a result of this budget. That is because the budget will artificially raise taxable incomes by taxing dental and extended medical care programs that his union has already negotiated to be paid by employers. That alone will immediately boost the taxable income of a British Columbia civil servant, to take the example of one province, by $498 a year, and the federal tax grabbers will take, on average, $166 of that.
The result is simple and is evident to all of us. It should have been evident to the Minister of Finance (Mr. MacEachen). Mr. Fryer says his members are telling him that whatever they had been demanding to catch up with their losing battle against inflation will have to be raised by one or two percentage points, come the next round of negotiations. Those union members-like the British Columbia loggers who will have to pay an extra $18 per day in tax for remote living allowances- will demand more money. So will their counterparts in unions in various fields across the country. Costs will go up with no increase in productivity. Inflation is automatic. It is guaranteed by this aspect of the minister's budget.
But the minister has built inflation into his budget in other ways. He airily dismisses a major change in the federal sales tax as having no effect. He might think it has no effect but the experts for the Retail Council of Canada calculate that the shift of the tax from the manufacturing to the wholesale level, despite a cut in the rate, will add up to 6 per cent to the cost of almost everything we buy in Canada.
Think of that. According to the figures of the Retail Council of Canada, with this one so-called technical change the price of an $800 refrigerator will increase by a minimum of $13 and a maximum of $48 at a time when refrigerator manufacturers are closing down.
And those increases do not even consider the turmoil and costs of shifting the collection and calculation of the sales tax from the manufacturer to the wholesaler. One major wholesaler estimates the changeover itself will cost $1 million with an added $100,000 per year for compliance. Those costs, too, will be passed on or else more companies will go bankrupt and more Canadian jobs will be lost.
In the interests of ivory tower theory, then, the minister is building inflation into this budget. There could be two explanations for that kind of deception-the pretence that it fights inflation when it feeds it, or the pretence that it is equitable when in fact it imposes an unbearable burden on lower and middle-income Canadians across the country.
This budget is the result either of incompetence or design. If it was simply incompetence-if the minister genuinely did not know what he was doing-an honourable minister would swallow his pride and draw back the budget. Because, 1 remind the minister, he is not debating parliamentary procedure here. He is damaging lives, he is literally driving people to suicide, he is destroying trust in government, he is destroying investment plans and savings plans that people have built up painstakingly over decades, he is driving Canadians out of jobs, and he is destroying both the means and the will to create future jobs in our country. Those are the stakes here. That is what has happened and it is known to every member who has been listening to his or her constituents over the Christmas break.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: It could be incompetence but we cannot rule out the possibility that this budget had exactly the result the government seeks. Certainly, the one unquestioned impact of this budget is to put even more of the nation's money and wealth in the hands of the central government.
Between the third quarter of 1980 and the third quarter of 1981, over one third of the increase in the gross national product was absorbed by increases in federal government revenues. The government now proposes, during this fiscal year and the next fiscal year, to increase its revenues by $27.5 billion. That means it plans to take another $1,100 from every man, woman and child in this country. By the end of that two-year period, the federal government revenues will have increased 52 per cent above what they were in 1980-81. After excluding transfer payments to provincial and local governments, the amount of money at the disposal of the federal government will increase by 63.1 per cent in that two-year period.
While this budget abandons equity, Mr. Speaker, it feeds inflation. It clearly achieves the government's purpose of a major tax grab by the federal government, taking money, wealth and power from the people of this country and concentrating them within a government that is stupid enough to bring in this kind of budget and now tries to defend it in the name of equity or in the name of economic advance.
January 26, 1982


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The measures introduced by this budget are extremely harmful, that we know. What makes it even worse is that the budget is based on principles that are disastrous for the future of this country. With this budget, the government is making a profound change in the nature and orientation of Canada. As a rule, Canadians are not hostile to government. They understand that there is a need for reasonable regulations, for fair and just taxation, for protecting the environment and for creating social programs for the handicapped and those who are unable to work. Now, however, the Canadian people have a government that is so eager to extend its influence and control that it has gone completely overboard. The mandarins at the Department of Finance have got their way at last. They now have a Minister of Finance who is so oblivious to the real world he did not even ask the basic questions: what will be the impact of the budget on the average person? What will be the impact of the budget on personal initiative? How will the budget affect investment? What will it do to encourage people to save for the future? What will it do to further justice and equity? What will it do to make Canadians feel their government knows what it is doing?
When the budget was brought down, obviously the members on the opposite side did not ask those questions. Instead, they relied on experts, the same experts who are helping the government to concentrate economic and political power in Ottawa, away from the provinces and from the Canadian people. This unhealthy urge to centralize power was visible in the constitutional proposal and in the energy pricing agreement, and is now surfacing again in the budget.

The condemnation of the budget by Canadians in all walks of life and in all parts of the country is unanimous and is scathing. Perhaps the minister has not heard from the same people which our budget committee heard from over the past three weeks, so I thought I might give him a sample or a taste of what Canadians think of his budget. From Charlottetown:
Today's government seems to have a complete lack of understanding and concern for the role of the business sector in our economy.
From Winnipeg:
The budget does not soak the rich but harms the poor.
From Vancouver:
British Columbia has gone from a prospect of high growth to one of high unemployment in one year.
From the National Union of Provincial Government Employees:
That budget was no damn good and it should be thrown out and we should start again.
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From Toronto, a citizen standing and asking plaintively:
Why should I save for my old age? I'll spend it all now and let the government take care of me.
From the Canadian High Technology Association:
They're not backing winners . .. they're bleeding winners.
From home builders:
They've already got us down and now they've stomping with hobnailed boots.
The quotations go on and on from the story of agony of individual Canadians, the story of outrage of people who feel betrayed. I notice some Liberal Members of Parliament on the other side of the House smiling. I am convinced that if they were at home listening to their constituents over this past Christmas period, they would have heard the same kind of testimony from individual Canadians who are being damaged by the budget.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The test for them will be whether they will put the interests of their constituents ahead of the interests of their party. When these matters come up for voting in the House, or when the matter comes up for voting today, the test will be whether they will put the political future of the Minister of Finance ahead of the economic future of the country and the individual well-being of countless Canadians. We have heard from some of those members. I almost hesitate to quote one of them, the hon. member for Ottawa West (Mr. Francis), who indicated that he knew of at least a dozen government Members of Parliament who will "sure as hell" criticize the government's economic decisions. The hon. member for Hull (Mr. Isabelle) said:
I've been in politics 17 years and I've never seen people so mad about a budget.
The hon. member for Cochrane-Superior (Mr. Penner) said:
It is not a happy situation and we're in deep trouble. Our economic policies just aren't working. The interest rates are just loansharking with an official sanction.
The hon. member for Thunder Bay-Atikokan (Mr. McRae) said:
I think we should throw the basic part of this budget out.
I presume he was speaking of the Minister of Finance. The test for those members and for other Liberal members will be whether they put their votes where their mouths are, whether they are prepared to put the interests of their people ahead of the interests of their party, when this question comes to a vote tonight, and if the motion is defeated today, when budget measures come to a vote later on.
We are dealing with not simply a question of a budget which is the worst budget brought in in the history of the country in terms of its impact upon ordinary Canadians.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!

January 26, 1982
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Charles Joseph Clark: I hear some across the way questioning that. I would ask those members to go back to Sarnia, to go back to Scarborough or to go back even to Ottawa Centre, to go out and hold public hearings of their own, and to ask their own voters what their citizens or their electors think about the budget. Let them do that, let them do that.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: We are dealing with not simply a budget that is bad and is causing Canadians, many of them for the first time in their lives, actually to consider cheating. The testimony has come before our committee. They say that the government has ignored the rules by which they have all worked. "If my government ignores the rules, why should 1 obey them?" is the kind of question which is being asked by Canadians across the country. It is not simply an attack upon the economy of Canada; it is an attack upon the ethic of Canada and it is an attack which flows directly from the budget brought in by the Minister of Finance.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Again there is the question of representation. There is the question of for whom does Parliament speak or with what mandate does the government act? 1 remember a great deal about the February 1980 election campaign. I do not remember very many Liberal Members of Parliament going out and proposing to tax Blue Cross benefits. 1 do not remember very many Liberal Members of Parliament or Liberal spokesmen going out and proposing to bring in changes which affect 13 million policyholders of Canadian insurance policies across the country. 1 do not remember any of the measures of the budget being proposed by any of the Liberal spokesmen as they sought the vote of the Canadian people. The reason for that is clear. If they had been honest then about what they intended to introduce now, they never would have been elected to office. If they asked their constituents today for their view in a general election, both they and their budget would be thrown abjectly out.


Some hon. Members:: Out, out!


Charles Joseph Clark: I would invite the Minister of Finance to hold a public hearing in his own constituency-and if he will not do it, I will do it for him-


Some hon. Members:: Hear, hear!


Charles Joseph Clark: -so that the people of his constituency could express themselves directly about how they feel about a budget which denies them their future, which throws them out of work, which denies their plans for security, which denies their ability to plan for themselves and to stand on their own.
What we have here is not simply a budget which is bad economically, not simply a budget which is bad morally, we also have a budget which raises fundamental questions about democracy in the country. This is a budget for which the government has no mandate at all. It is a budget which tries to change fundamentally the rules of the game as they have
existed in the country. It is a budget which changes understandings upon which Canadians have planned and built. It is an illegitimate way for a government to act. If they do not have the courage to withdraw it, they should have the courage to seek a mandate directly from the people of Canada for the budget which they are trying to impose upon the people of Canada.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: We would welcome that option, but there is an easier one available, and that is for members of the House simply to accept this motion, which is quite straightforward. It allows the minister to rise and say, "Yes, we made several more mistakes than we admitted last December;" "yes, the budget is bad;" "yes, we have heard from the people of Canada;" and "yes, we withdraw it." That is what the government should do if it has the interests of the people of Canada at heart. That is what I devoutly hope the government and the House of Commons will do today.


Some hon. Members:: Hear, hear!


Erik Nielsen: Mr. Speaker, I rise on a point of order. I hope the Leader of the New Democratic Party (Mr. Broadbent) will forgive me for interrupting, but 1 believe in my wildest gesticulations when Madam Speaker was in the chair and she was searching for a seconder that she has on the record the motion of the Right Hon. Leader of the Opposition seconded by the hon. member for Etobicoke Centre (Mr. Wilson). With the consent of the House, I would like the record to reflect my name as the seconder of the motion.


John Edward Broadbent: Mr. Speaker, before we adjourned for the Christmas recess and during the early stages of the budget debate it was clear to everyone in Canada, certainly outside of the House of Commons, that we were in a state of economic crisis. It became clearer during the Christmas break that the crisis was not only real and serious but was deepening. During the last 48 hours, as we have listened to the Prime Minister (Mr. Trudeau) reply to questions in the House of Commons, as Canadians have witnessed the speech delivered by the Minister of Finance (Mr. MacEachen) in Toronto and as we have heard him answering questions in the House today, it is also clear that the Government of Canada is either unaware of the crisis or does not care about it. Indeed, I would go further and say that I suspect both things are true.
In terms of the current crisis, if I may speak personally, I think the aspect of it that concerns me most is the effect it has on men and women in their search for the human dignity that can only come from work. If there is one constant truth about human nature throughout the history of mankind, it is that men and women at any period in history have found it a psychological necessity, no matter what other theorists may have said, to gain a sense of dignity and self-worth from making some contribution not only to their own economic well-being, but to that of their families and their community.
January 26, 1982

Many people, indeed many Canadians, may think or espouse something to the contrary. Some have been known to think that they would live contentedly at a young age-1 am talking about pre-retirement years-if only they had enough money to get by. I do not believe that is true. 1 do not believe that men and women at the productive stage in their lives in any society-and I am talking about ours in particular-can be happy human beings without some sense of earning their own way in society, without some sense that they are working, as I have said, not only to make a contribution to maintain their own existence, but to contribute also to society.
What should be concerning us now in that light more than anything else is that our government has embarked on a budget policy that has built right into it from the outset an increase in unemployment levels. There was a commitment to the people of Canada not to change their economic circumstances so that more men and women could work; it was a policy that said to the people of Canada that in 1982, 1983 and 1984 unemployment would get worse. At this point in our history as a society I regard that as a complete abdication of moral and political responsibility to the people of our country.
Like members of the Conservative Party, my colleagues on the special task force and I spent a good part of the Christmas period listening to the people of Canada. 1 will not list all the instances I could, but I want to mention to the House, and I hope this might get through to the government side, some of the instances that came directly to my attention. They will stand out in my memory as long as 1 live.
The first is a young logger in Vancouver. 1 would guess he is in his early thirties. He told me that he had been working since he left high school and for the first time he had been laid off. He was confronted simultaneously with almost a doubling of his mortgage payments. This was December. He told me that when this increased payment came into effect in January he was going to lose his home. It was as clear as that because he could not maintain the mortgage payment on unemployment insurance. He would not likely have been able to maintain the mortgage payment even if he had remained on the job.
My second example is a 53-year-old man in Thunder Bay, who also told me that at 53 he had been unemployed only once in his life but now was being laid off, in this case by the Canada Steamship Lines Ltd. because of a complete shutdown of operations. What was tragic about this man was, first, he had no pension and, second, he was 53 years of age. Of all those affected by the lay-offs there were only five or six in that particular enterprise who would be getting a pension. Here is a 53-year-old man in Canada in the middle of winter being laid off with no pension. His is a permanent lay-off and he has no other job to go to in the Thunder Bay region, that is for certain.
My third example is a mother on welfare with two children in Brantford, Ontario. This is part of the country that is so devastatingly affected right now by lay-offs in the industrial sector. The Right Hon. Leader of the Opposition (Mr. Clark) cited the figures that many of us have used recently, some
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235,000	lay-offs in the manufacturing sector since August, just four months ago.
Last month in Ontario alone lay-offs have been occurring at the rate of 3,000 per working day. At a meeting in this community, so typical of what is happening in the industrial sector where we found this young mother with two children living on welfare, someone spoke and attacked people like her implicitly-and we have heard this line before-by saying that there is a job out there for anyone who really wants it. All you have to do is make the effort. I am pleased to say as a Canadian that we do not hear that nearly so often as we used to. But that mother's reaction to that statement was very profound. She was in the audience. She was not scheduled to speak at all, but she got up and said: "I am a young mother with two children. I am living on welfare and I work two hours a day". I think she said a day, it might have been two hours a week, but the two-hour figure stands out in my mind. But what really stands out is that she said she wanted work and she wanted a 40-hour-a-week job, just like everyone else, because that would give her some dignity.
Fourth, there was someone in my own constituency of Oshawa: in this case 1 am speaking about a 41-year-old mother. I learned about her after I left the meeting in Oshawa. She spoke with a reporter. She did not say anything of the unemployed at the meeting. But what she said was reported on the front page of The Oshawa Times. This 41-year-old woman actually attempted suicide by jumping into the Oshawa harbour. She said this: "There was just no work, not even cleaning." Clearly, this woman was desperate. She happened to have been saved by a friend who was on the scene.
The final instance is a case from Cape Breton. Cape Breton, as we all know, has persistently suffered high levels of unemployment. I say persistently because this government, which we have had for years, has lacked the political willpower and the long-range economic sense to take that community with its iron resources, with its harbour and with its steelworkers, and create a first-class steel industry. I will not elaborate on this. In reading about the lay-offs all over Canada this man said to me that if the rest of Canada had unemployment levels the way we have experienced them in the past decade, there would be a revolution in this country. 1 think he is certainly very close to being right, if not totally right. If we all experienced real levels of unemployment of 20 per cent to 25 per cent for the past decade, then even the Liberal government would have been forced to respond or there would have been something approaching a revolution.
I said, Mr. Speaker, that was the last instance I would cite, but there is one other which came from one of the meetings and was simply that men and women ought to have the right to work. That says it all, Mr. Speaker, and whatever the Government of Canada feels or believes in terms of economic policy- and I am going to come to that in a minute-we in the New Democratic Party believe that every Canadian, man or

January 26, 1982
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woman, who wants to work ought to be able to work, and the government should make that possible.


Some hon. Members:: Hear, hear!


John Edward Broadbent: 1 have mentioned the human circumstances; I now want to give some statistics on what this level of unemployment costs the Canadian economy.
A special committee of this House was set up to look at unemployment, chaired by a Liberal member, and it said a target of 4 per cent unemployment is a reasonable objective. We will take that as a reasonable objective. Japan has achieved it, as have Austria, West Germany and other countries. Only Canada under the Liberals has managed, with our resources, not to achieve it.
I would like to take unemployment figures beyond the 4 per cent level and see what they mean in terms of lost production. If unemployment were down to that level it would mean another 514,000 men and women would be employed, which in turn would mean we would have an additional $4.7 billion in tax revenue. They are not employed so we lose it. In addition, if they were employed the GNP would be up by some $15.2 billion annually. They are not, so that is a loss to the economy.
Because they are unemployed it is costing us $2.3 billion in unemployment insurance payments to people who would rather be paid for jobs. So, Mr. Speaker, the economic costs are very real and substantial, which the government should be concerned about even if it is not concerned about the human dignity associated with the right to work.
What we need then, Mr. Speaker, if we are concerned, as we are in this party, about the human and economic aspects of unemployment, is aggressive economic action now. We need to demonstrate the will to act, as other countries have as recently as last week, to stimulate the economy. The Minister of Finance knows very well that that will has now been asserted in France, Germany, even in Great Britain. It was demonstrated at the same meeting in Europe last week by the government of Japan, which said yes, these countries are affected by what has happened in the United States, by high interest rate policies, that they are part of the international community. But unlike the Government of Canada, these countries have the political will to say they are going to establish a lower interest rate policy on their own and stimulate their economies. That is precisely what the Government of Canada should be doing for the people of Canada.


Some hon. Members:: Hear, hear!


John Edward Broadbent: In the Minister of Finance's speech yesterday in Toronto, Mr. Speaker, he made it clear that he has learned nothing since he brought down his disastrous budget.


An hon. Member:: Since 1930.


John Edward Broadbent: His few tinkering responses, and they have been few indeed, have been aimed directly at the privileged in Canadian society. Most significantly, when we need stimulation in the economy because we are only running at 80 per cent
capacity-we are not going to inflate if we stimulate, or it will be minimal-we need a significant tax cut for middle and low-income Canadians. Instead, the tinkering we got from the Minister of Finance benefited those who need assistance least.
I want to get at the reasoning, as I understand it, behind the budget because it is precisely the same reasoning used in President Reagan's budget approach during the past year in the United States. Without using the terminology, what we have in this budget, Mr. Speaker, is supply-side economics, and this is directly related to the fact the two top tax brackets in Canada were given major tax reductions. That is precisely what was done by President Reagan in the United States, with the thinking that if you cut the marginal tax rate at the top, then the people will take their tax savings and reinvest it in the economy.
Well, Mr. Speaker, I do not know if the minister's advisers have been telling him this, but I do know simply from reading a newspaper such as The New York Times that in the United States the supply-side economics, with tax cuts for the upper-income earners, has simply not worked. This is because, as 1 indicated in my questions to the minister this afternoon, which he ignored, when you have a high interest rate economy and you give millions of dollars in benefits to the rich, they do not invest it in job-creating ventures, they salt it away in the banks. So the direct result of supply-side economics in the U.S., as in Canada, although the minister has not dared to use the same name, is to make the rich richer. Therefore, Mr. Speaker, we in this party categorically reject supply-side economics both because it is unjust and it does not work.


Some hon. Members:: Hear, hear!


John Edward Broadbent: What we want, to use the technical jargon, is demand-side economics. We happen to believe that with this level of unemployment, the worst since the great depression, now is precisely the time to stimulate demand and give middle and low-income earners a tax break. That is the kind of action which would create jobs in our economy.
The unswerving commitment, Mr. Speaker, to this most conservative kind of economic policy now pursued by this government has been demonstrated by its solidly entrenched and locked-in policy of preoccupation with the level of the deficit. It began to reduce the proportion of the GNP going to government spending a number of years ago and has continued with this single-minded preoccupation right up until today. That same policy was maintained in the minister's speech yesterday in Toronto, as it was in the answers today in this House.
We in this party say that there is a time to be concerned about government deficits and about government spending, and social-democratic governments, whether here in Canada or elsewhere in the world, have the same concern when appropriate. But I say to the Minister of Finance that when we have more than a million Canadians unemployed, people who are losing their human dignity, and we are losing millions of dollars in the GNP because of that unemployment, now is the
January 26, 1982

time we should have more, not less, government spending.
' That makes economic sense.
Having made that point, I must say I listened to the speech of the Leader of the Opposition with care and there was not one sentiment-and I choose that word with care-with which 1 disagreed because there is no question in my mind that his fears are genuine. Those expressions of concern about unemployment are the same as those we have expressed in this House. However, I also want to say that in politics and economic policy it seems to me that sentiment is not good enough; the debate in this House, as important as that sentiment is, must also deal with economic policy. Economic policy, as demonstrated even in this debate and certainly by past Conservative governments, is almost exactly the same as we are getting from the Liberal government today.
In the short run, the two questions which are of decisive importance are interest rates, on the one hand, and government spending on the other; and they are related. As recently as Sunday night past, Sinclair Stevens, the man sitting four seats just over to my right here-


Sinclair McKnight Stevens: "York-Peel".


John Edward Broadbent: -the hon. member for York-Peel (Mr. Stevens), was weighing in heavily against government spending. There he was, speaking through the television set to the people of Canada. He said: "Now, we cannot have more government spending." At least he has the merit of being consistent, if he also has the equal merit of being wrong in terms of what is needed for the people of Canada. In fact, just a few years ago, the same gentleman made the following comment, and I will quote.


An hon. Member:: Sink with Sine.


John Edward Broadbent: Just listen to what the hon. member said in the middle of the twentieth century:
Deficit financing by the federal government must be outlawed by a change in Canada's Constitution that would require the federal government to balance its budget every five years.
That, and I put it bluntly, is economic lunacy, as almost everyone in the modern world knows.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Tell the Germans that! How about Germany?


John Edward Broadbent: My colleagues in the Conservative Party cannot have it both ways. They cannot demand a budget which would stimulate the economy, which would move us in new directions, which would create new jobs, and still have the old hang-ups and fallacious theories about economic spending by the government.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Then there is the related question. The hon. member never did say when they do want government cut-
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backs, which is what the hon. member for York-Peel called for. Did he want a cutback in programs for farmers? Did he want a cutback in programs for fishermen? Did he want a cutback in programs for pensioners? They are the unstated questions which must be followed. It is irresponsible of the Progressive Conservative Party of Canada to call for cutbacks in general and in government spending if it is not prepared to say where.


Some hon. Members:: Hear, hear!


John Edward Broadbent: The hon. members to my right should learn that.
I address the next point particularly to the Leader of the Official Opposition, who movingly spoke about all the lay-offs in the manufacturing sector. The question pertains, in my judgment, to the fundamental short-run problem with those lay-offs, 235,000 in manufacturing during the past four months and 1,400 lay-offs which were announced in Montreal and in Hamilton today which are directly related to the high interest rate policy of the government. I have in my hand a number of quotes from the former prime minister, the present Leader of the Opposition. On October 29, 1979, when he was prime minister, he said:
-it was the view of the Governor of the Bank of Canada, concurred in by this government, that the only responsible action open to Canada at this time was to accept, in the intermediate term, an increase in interest rates . . . that is our position, it remains our policy.
That is what the Leader of the Opposition said when he was prime minister. His former finance critic, the hon. member for St. John's West (Mr. Crosbie), repeated that same position just a few months ago on television. Therefore, I say to the Conservatives that they cannot, either in terms of their interest rate policy or in terms of their attitude toward government spending, offer a credible alternative to what the Government of Canada is doing.


Some hon. Members:: Hear, hear!


John Edward Broadbent: That is as clear as anything could be in terms of economic policy at this time.


Ramon John Hnatyshyn: Why did you support the Liberals?


John Edward Broadbent: 1 will just let that comment go entirely.


Sinclair McKnight Stevens: Tell us!


John Edward Broadbent: I say to the Conservatives-


An hon. Member:: Because they had a look at you, that's why.


John Edward Broadbent: Obviously, I have touched a sensitive chord because the hon. member, who is no longer a cabinet minister, is calling from the back, behind the curtains, saying that we voted against a Conservative budget which forced the 1980 election because it was every bit as bad as the Liberal budget today.


An hon. Member:: Worse, worse!

January 26, 1982
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John Edward Broadbent: It is interesting that the Conservatives did not send a task force around to have a survey made of their budget when they brought it in in 1980. We would have been interested to hear that one.


An hon. Member:: We did! It was called an election!


John Edward Broadbent: I would now like to move an amendment, which will be an interesting task not only for the government but also for the official opposition, to see how serious they are about dealing in a serious way with the economic problems about which the Conservatives have just spoken. Therefore, I move, seconded by the hon. member for Broadview-Green-wood (Mr. Rae):
That the motion be amended by striking the period after the word "budget" and adding:
"which would provide that
(a)	a system of fixed lower interest rates for mortgages be made mandatory, and that
(b)	an excess profits tax be imposed on Canada's chartered banks to restore their marginal tax rate to the 1970 level."


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: That was a good year for them! You missed the point, Ed!


John Edward Broadbent: I would like to refer to the advantage offered by this amendment. I have already spoken about the direct advantages, in my comments on interest rates, concerning the implication of low mortgage levels for home owners or prospective home owners. However, I want to speak about the excess profits tax on banks. As the motion states, it would simply reduce their levels to what they earned based on the marginal rate of 1970. That would give us additional revenue of approximately $670 million. If we took only $500 million of that revenue and put it into the social housing budget, we could restore that housing budget to the level which existed six years ago when we did not have the housing crisis that we have today. Also, by using that money to produce social housing, we would produce an additional 93,000 jobs in construction, in the logging sector and in the appliance field, not to mention all the housing starts which would be created. This would have the effect of bringing down the price of housing, one would hope, by increasing the supply. Therefore, we would simultaneously deal with the housing crisis-not totally, but in a significant way-and the unemployment situation.
In mentioning this single program, I want to speak about how it could be used as a model for other sectors. Again I want to speak in terms of its technical economic effects. I hope the Minister of Finance will discuss the point. This kind of approach in this sector would have the following additional consequences to the ones that I have just mentioned: first, the economic activity generated would stay in Canada; second, it would not result in increased imports from abroad which might result from other kinds of stimuli. Therefore, in relation to that, the spending of millions of dollars in this way would not in the slightest exacerbate our country's serious international balance of payments problem which did result in a record $9.1 billion deficit last year.
Therefore, this kind of tax on a part of our economy, namely, the banks which have had excessive profits, would get revenue into the government sector where it could now be usefully used to stimulate growth of jobs which are badly needed. It would have a net positive effect in terms of our balance of payment situation and in terms of its ultimate effects on the level of the Canadian dollar. It is, I repeat, a model of what could be done by an imaginative government which cared about the people of Canada and was prepared to use the power of a modern government in a constructive way in the economy.
I want to conclude, because I note that my time has just about expired, by saying that what we need now in Canada is not a government concerned with rhetoric, whether of a progressive or a reactionary kind. What we need is a government which thinks very hard about the state of the Canadian economy. What we need is a government which has a genuine spirit of independence and courage, as demonstrated by western European governments and the government of Japan when they were caught in the same web of economic forces generated by the United States. Finally and above all else-because it is this which shapes the other points-what we need in Canada is a government that cares about the people of Canada.


Allan Joseph MacEachen: Mr. Speaker, I listened with a great deal of interest to the statement made by the Leader of the Opposition (Mr. Clark) and then to the statement by the leader of the New Democratic Party (Mr. Broadbent). I must say that they were distinctly different. The Leader of the Official Opposition concentrated principally on the tax side of the budget; he gave no prescriptions whatsoever for the general economic situation we face in this country.
I am the first to admit that we do face a serious economic situation, with very high inflation rates, rising unemployment and declining growth in the country. That is a very serious situation. It is a situation that is shared by all the industrialized countries of the world. Their situation is very similar to ours.
It is to that general economic situation that I addressed myself in the budget in an attempt to establish a correct macroeconomic response that would deal with the underlying reasons for the situations we face and would permit us to participate in a recovery. I laid out my position in the budget, and I laid it out in greater detail at the Canadian Club speech in Toronto yesterday. Hon. members have referred to that.
The Leader of the Opposition had nothing to say about what his alternative remedy would be. He did not differ with my analysis that inflation is the chief problem, that basically the question of inflation is a question of jobs and growth and that these concepts cannot be separated. I take it from the silence of the Leader of the Opposition that he has no objection to the
January 26, 1982

general economic policy of the government, although he does have some objection with regard to the tax policy. 1 will deal with that later in my speech.
The Leader of the New Democratic Party has stated clearly that he believes in massive stimulus. He believes that the way out of our difficulties is to spend, spend, spend. That is what he said. Even other modern social democratic parties have long abandoned that policy. When the former prime minister of Britain, Mr. Callaghan, was facing an economic crisis, he went before his party and told them: "In present circumstances, spend, spend, spend is not the solution".
That is what the Leader of the New Democratic Party has put before the House. 1 disagree with it. If he believes that massive stimulus at the present time is the answer, he is making a fundamental mistake. He is calling for higher inflation, more unemployment and less growth down the road. If that is his answer, he is careless about inflation. That is his problem. I disagree with him.
He said yesterday and again today that somehow the European and Japanese finance ministers have concerted in a new policy of massive stimulus. I had that checked out this morning. There have been no formal meetings and no formal decisions. Japan has not been part of any discussion. Whatever the Leader of the New Democratic Party is basing his statement upon is not information that we have been able to confirm through official sources.
I may have an opportunity to return to the macroeconomic question, but I want to begin by dealing with a number of the points made by the Leader of the Opposition. I found his speech rather weak, rather ineffective and rather unfocused. After all this accumulation of evidence that we expected to get from the Leader of the Opposition and all the hearings throughout the country, I expected that the Leader of the Opposition would pinpoint specific objections which he wanted to have repaired and which he wanted to form the groundwork in asking the House of Commons to remove the budget. What did he produce? Very few specifics, and when he did go into specifics, he made very great mistakes. I will deal with that later.
What has been stated again today by the Leader of the Opposition and the leader of the New Democratic Party is that the impact of this budget bears heavily upon low and middle-income Canadians. Last November the Leader of the Opposition said, "it was in fact a budget which will impose an unbearably hard burden upon countless average Canadians and has as its principal purpose the enrichment of the federal government." The leader of the New Democratic Party said that, "the vast majority of Canadians get no tax cuts at all."


John Edward Broadbent: I didn't say that.


Allan Joseph MacEachen: I refer to Hansard of November 16, page 12801, where the leader of the New Democratic Party is reported as saying:
-the vast majority of Canadians get no tax cuts at all.
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The "majority" must be Canadians. I find that one of the most incredible misperceptions and misrepresentations that has floated across this country since budget night.
I ask Canadians who have tax withheld from their pay cheques to compare their 1981 pay cheques with their 1982 cheques. I do not ask the Canadian people to believe the Leader of the Opposition, the leader of the New Democratic Party or the Minister of Finance. I ask them to look at their pay cheques. I ask them to look at the hard evidence.
I ask members of the House of Commons to look at the withholding tax table, 1981 and 1982. I am telling you, Mr. Speaker, that under the new 1982 tax rates, several million wage earners and salaried employees will have larger take home pay.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: In fact, several million will have larger take home pay.
The idea has been put about this country that the effect of the budget has been to bear heavily upon, and to increase taxes for, the low and middle-income Canadian people. That is false, Mr. Speaker.
Last night 1 was on a television program and I repeated the fact that 12 million Canadians would experience lower taxes as a result of the composite measures in the budget; for example, the marginal tax rate, the change in the federal tax credit, the indexation. Thus, 12 million Canadians will have less taxes to pay, about 3.5 million will pay the same amount and about
800,000	will pay more taxes. These are the facts.
I had a call from a friend of mine, a small employer, who said to me: "I am very pleased that you mentioned that, because based upon the statements made by opposition spokesmen, my employees were expecting to have their taxes increased as a result of the budget. When they looked at their pay cheques, they found there was a decrease."


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: I ask the Canadian taxpayers to look at what is happening. It is happening as a direct result of indexing and the tax measures in the budget. Anyone who wants to check it should simply compare the 1981 and 1982 tax withholding tables.


Mr. Baker (Nepean-Carleton):: On a point of order, Mr. Speaker, would the hon. minister permit a question?


Allan Joseph MacEachen: Mr. Speaker, I will deal with questions at the end of my speech. 1 do not think that 1 can deal with them now.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: I was able to bring that result about because, instead of increasing tax rates across the whole range of the system, I decided to broaden the tax base with the effect

January 26, 1982
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that lower taxes were available to the numbers I have mentioned with higher taxes for a very small number of Canadians.
The method 1 chose to raise the new revenues protected the vast majority of low and middle-income Canadians from higher taxes. Through indexing cuts in marginal tax rates and a redesign of the federal tax credit, millions of Canadians will pay less tax for 1982. I draw this fact to the attention of the leader of the New Democratic Party, that of the roughly 14 million Canadians with incomes under $30,000-that is the group that I was principally interested in-


John Edward Broadbent: What was their average weekly saving?


Allan Joseph MacEachen: -a full 95 per cent will pay less tax or have no tax increase.


John Edward Broadbent: Four dollars a week?


Allan Joseph MacEachen: That is quite a difference compared to the statements that have been made by the Leader of the Opposition and the leader of the New Democratic Party.


John Edward Broadbent: Four dollars a week.


Allan Joseph MacEachen: Indexing alone will reduce taxes for Canadians by more than $3 billion. This includes larger personal exemptions and an increase in the child tax credit from $261 to $293 for each child.
Very little attention has been paid to the change in the federal tax credit. That change targets benefits toward one-earner families with low and middle incomes. The tax credit will rise from $200 to up to $400 for approximately 1.5 million Canadian families. That has been virtually ignored. It was a very important step taken to flow some income into the budgets of this particular group of Canadian families and it was virtually ignored, Mr. Speaker.
1 have to accept the fulminations of the Leader of the Opposition on this matter when they are based upon false information and misrepresentation from the Leader of the Opposition. I welcome the opportunity to make this statement today. I am not seeking refuge at the Canadian Club to avoid the Leader of the Opposition. Let me tell him that I am delighted to have this opportunity to tell the House and all Canadians that I stand behind the budget, which has produced tax savings in a time of restraint for the vast majority of the Canadian people.


Walter David Baker: So do three or four others.


Charles Joseph Clark: You can come to my meeting in Port Hawkesbury.


Allan Joseph MacEachen: Yes, the Leader of the Opposition has been in Cape Breton Highlands-Canso before. I welcome him again, because the only time he was there my majority was the highest I ever had.


Charles Joseph Clark: You are invited to the meeting, Allan.


Allan Joseph MacEachen: The complaints that were made last December have disappeared from the statement made by the Leader of the Opposition. All we have heard today are some false statements about employee benefits and the child tax credit. Gone are the specific complaints that we heard last December.
The Leader of the Opposition has stated that this budget is anti-investment. 1 reject this assertion categorically.


Michael Holcombe Wilson: You never understood it.


Allan Joseph MacEachen: The fiscal stance in the budget is directed to removing the main obstacles to investment-inflation and high interest rates. The tax measures are also designed to channel funds to productive investment and to encourage investment through cuts in the marginal tax rate. Why is it that so many commentators and observers have virtually ignored the very important step taken in lowering the marginal tax rate? The lowering of the marginal tax rate reduces the maximum tax on capital gains from 33 per cent to 25 per cent. The maximum tax on dividend income is also reduced to 25 per cent. I would prefer to take the advice of authorities other than the Leader of the Opposition on this point.
With regard to marginal tax rates, the Business Council on National Issues states:
-the general reduction in tax rates combined with the tones and perspective offered in the paper "Economic Development for Canada in the 1980s", arc extremely encouraging steps.
That is not the language of the Minister of Finance but the Business Council on National Issues.
Steps which make the tax system simpler and which reduce marginal tax rates will enhance economic development and equity.
I believe that there is a whole series of measures within the budget that demonstrate its intent, namely, to encourage investment funds in productive and risky enterprises. It is clear that the tax system as it was constructed institutionalized private savings and concentrated decisions in the hands of financial institutions while discouraging participation of individuals in the stock market.
Not a word has been said about interest deductibility. What a chorus of protests! What thunderbolts were thrown at my head by the member for Etobicoke Centre (Mr. Wilson), the Leader of the Opposition and members in the opposition, with representations from elsewhere about interest deductibility. Again today the hon. member for Etobicoke Centre talked about my inflexibility. I listened to the representations I received in the House of Commons and to representations from other organizations, to the point where today not a word was said. We are depending upon false assertions about the child tax credit. That is the big plea and the false assertion made by the Leader of the Opposition.
As an illustration of the change of attitude on the part of business spokesmen, I refer to a statement-which, I must say, I did not like at the time-made on December 9 by the president of the Toronto Stock Exchange. Hon. members will
January 26, 1982

remember that coalition-I understand it is now disintegrating; certainly it has lost the president of the Toronto Stock Exchange-which came to Ottawa on December 9, staged a press conference and raised hell about the budget. It was a very impressive demonstration, temporarily, and on that occasion the president of the Toronto Stock Exchange stated that the budget hurt the capital investment process.


Mr. MacKay:: The market sure showed it, didn't it?


Allan Joseph MacEachen: He stated that the budget would create an advantage for foreign investors over domestic investors. For every rich Canadian hit by the budget there are 28 average Canadians who use the interest deductibility provisions and provide financing for new business.


Elmer MacIntosh MacKay: How is the market these days?


Allan Joseph MacEachen: Having listened to those views and the views of members of the House of Commons, I made changes to that provision on December 18.
Then on January 18 the same person, the president of the Toronto Stock Exchange, wrote me a letter saying that the December 18 amendment to the federal budget on interest expense deductibility-
-addresses the concerns expressed by the Toronto Stock Exchange and other representatives of the securities industry over the impact of the original proposal on investment in growth-oriented companies.
And industries.


Walter David Baker: Let's hear what the ordinary Canadian says about your budget.


Allan Joseph MacEachen: Anti-investment? That same old complaint is being repeated by the Leader of the Opposition today. On that general point I prefer the observations of the president of the Toronto Stock Exchange and the president of the Investment Dealers Association, both of whom have said they have no further issue to place on the point of interest deductibility.


Michael Holcombe Wilson: Why did they appear before our committee?


Allan Joseph MacEachen: Why do I raise this? 1 mention it because this was a great big issue. It was supposed to be the tremendous sign that we were anti-investment, and it has been removed. Everything has been straightened out, according to the views of these representatives, and still the Leader of the Opposition repeats that old refrain. So in this case I prefer the views of these particular persons to those of the Leader of the Opposition.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: Mr. Speaker, I listened very carefully to the Leader of the Opposition. He was given total attention by hon. members on this side of the House. I listened to the leader of the New Democratic Party and he was given total attention. Since I began to speak I have been heckled and barracked by members of both parties. My conclusion on that is that these
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points are striking home and that instead of silence they are reacting with their usual and customary demonstration in the House of Commons.


Elmer MacIntosh MacKay: Look at the expression on those faces behind you.


Arthur Jacob (Jake) Epp: Allan, don't look behind you.


Allan Joseph MacEachen: Mr. Speaker, I will say just one word about a statement made by the Leader of the Opposition on the child tax credit. He has said that the effect of the budget measures is to remove the child tax credit from 60,000 Canadian mothers. I find that an extraordinary statement to be made by the Leader of the Opposition. I would like him, if he can, to produce evidence which shows that the child tax credit has been denied to 60,000 mothers. The child tax credit is payable in full to families whose net income in 1982 is less than $26,330. For families with incomes above this threshold the tax credit is reduced by 5 per cent of income in excess of the threshold. This year the indexing of the credit has increased the threshold income level by some $2,850. The increase in the threshold more than offsets the effects of the inclusion of employee benefits in income computation. Including all the budget changes and indexing the effect in 1982 will be to increase over all the child tax credit from $900 million, which it would otherwise be, to over $1.1 billion.


Mr. Breau:: Wrong again, Joe.


Pierre Elliott Trudeau: Withdraw.


Allan Joseph MacEachen: On balance, these changes will increase the total amount of the child tax credit. Indeed, the impact of the budget change and indexing is to raise the credit by over $200 million. In general, the impact on employee benefits will be more than offset by the indexing provisions, but I would say that a few high income individuals who had been able previously to shelter their taxable income through large deductions for income-averaging annuity contracts, soft costs and the like will no longer qualify for the child tax credit.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: If hon. members had looked at the tax tables presented with the budget and scrutinized them carefully they would have found that very high-income people were eligible, because of the tax system, for the child tax credit. That certainly was not the intent. I know a wealthy professional who at the Canadian Tax Foundation said that the only impact of the budget on him would be that he would lose the child tax credit.


Charles Joseph Clark: His tax rate would go down.


Mr. Cousineau:: Good, Joe.


Allan Joseph MacEachen: Surely, it was about time somebody-even though it was difficult-took a look at the array of selective tax preferences in the tax system which benefited mainly high-income people, allowed large numbers of Canadians to pay no

January 26, 1982
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taxes and allowed groups of Canadians in high-income brackets to pay a lower proportion of taxes than others in lower income brackets. Surely it was time to take a look at that kind of system.


Sinclair McKnight Stevens: Who brought it in?


Allan Joseph MacEachen: I restructured the tax system in a way which, I believe, has maintained the investment incentives which are required in this country, but in a way which will ensure that there is fairness and equity in the tax system. I believe that every time the Leader of the Opposition mounts his attack in the House, he is speaking for a particular interest in the guise of the child tax credit and employee benefits.


Walter David Baker: He is speaking for the majority of Canadians.


Allan Joseph MacEachen: Why does he not speak out against the wrong features of the tax system that brought about the results that I have corrected in this budget? I do not think this is the day for the Canadian House of Commons to go back on justice in the tax system.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, someone who appeared before our special committee on the budget said that arguing numbers with anybody from the Department of Finance is like a shell game in New York City. I think we have had a good demonstration of that in the minister's speech this afternoon.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: I listened carefully to the numbers that the minister was throwing out on the question of 12 million Canadians paying lower taxes. I say to you, Mr. Speaker, that the minister has perpetrated borderline fraud on the House of Commons and the Canadian people by making this statement in the House today. It is a total misrepresentation. He is completely ignoring the fact that Canadians will be paying $1,400 per family per year for the next five years in energy taxes and that that will totally wipe out any reduction that might result from the indexation of personal taxes. Anybody who owns a home or who drives a car knows that the minister has misrepresented this situation because they have to pay the bills every time they go to the pump and every month to the gas company.
Every time the minister says that, he reduces his credibility even further. This makes no allowance for the increase in taxes that all Canadians will pay as a result of the taxation of benefits, such as dental and health plans, and from the taxation of pensioners, that come directly from this budget.
Yesterday the minister defended his budget in front of a blue chip audience in Toronto. His speech made interesting reading and 1 read it very carefully. He blamed the United States and he blamed international economic weaknesses for
our problems. His main conclusion was that Canada must not spend its way out of this current recession. He stated this as if it were the only alternative available. The speech is remarkable for its superficiality. It is the most shallow, superficial speech by any minister of finance that I have read or heard in the 20 years that 1 have been reading and listening to them.
The Canadian Club looks forward with great anticipation to this annual event when the incumbent minister of finance states what is on his mind. Mr. Speaker, next year it will have to peddle the tickets on the corner of King and Bay because no one will want to go to hear a speech like this one.
This reinforces one of the underlying themes that ran through the meetings of our special committee on the budget. Time and again we were told that the government does not know what it is doing, that the government and the minister are totally out of touch with what is going on in the real world. We all know that 200,000 Canadians have been laid off and we have heard from the Canadian Manufacturers' Association that another 100,000 will be laid off within the next two or three months. 1 hope I do not have to remind the minister that this represents human tragedy for each of those individuals.
All MPs, whether on this side of the House or on the side opposite, know of instances where individuals have lost a job. In my riding 1 saw a student who was laid off after three months in his first full-time job. Another gentleman came to my office. He is 62 years old and was laid off, and now he does not know where he will get another job because of his age. A young couple came to see me who were frightened that the wife would become pregnant and have to quit her job and as a result they would lose their house. That is the sort of thing that is going on in the country today. People cannot afford to do the things that they want to do. They want to own a house but feel they need two jobs in order to finance a mortgage. If only one has a job then they feel they might have to leave the house.
All these people are worried and frightened about the future. Fishermen, small businessmen and farmers told the committee that they were worried about losing their businesses and that the dream they had built up over the years would be shattered before their eyes because of the policies of this government. These people fear that they may soon become a statistic, one of those unemployed numbers or one of those bankruptcy numbers. That is the nature of what is going on in the country today, Mr. Speaker. That is the nature of what we heard before our special committee.
The speech the minister made yesterday represents the sum total of his explanation to the Canadian people of why he is following these policies. The minister makes no attempt to explain why revenues have to go up 31 per cent this year or why that additional burden has been laid on the economy in this time of the deepest recession we have had in the past 30 or 40 years. He does not explain why it is necessary to disrupt the personal and business lives of people with the so-called tax reform that is undercutting many of the good social and economic objectives which we have in this country. 1 will come back to that later, Mr. Speaker.
January 26, 1982

The minister gives no explanation why business is being totally undermined by this government and this budget. Investment is what would create the jobs we need so desperately in this country today. There is no secret in this. It has been proven time and again that job creation is directly linked to investment of funds by individuals and companies, and that when the investment process is undermined by government tax policies which destroy the confidence of the individuals making the investment decisions, all those people who are looking for jobs are affected. Investment is what we need in this country today.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: In this budget the minister has compounded the human misery of one million Canadians. The policies that he has brought in display a total lack of understanding of the problems of the economy. They illustrate his inflexibility-and I repeat that word for his edification, Mr. Speaker. He did not show any flexibility on December 18. He was forced to make those changes or he would have brought a greater disaster upon this country than has been brought upon it already.


Mr. Peterson:: Oh, oh!


Michael Holcombe Wilson: The hon. member for Willowdale (Mr. Peterson) knows that as well. Many of his friends have been making those representations to him and are still making them to him.


James Scott (Jim) Peterson: Oh, oh!


Michael Holcombe Wilson: This is a little light interlude from the hon. member for Willowdale.
The inflexibility of the minister in not considering other alternatives displays a total insensibility to those who have been hurt so badly by his policies.
Investment and stability, and I have said before, lead to more jobs. High taxation and lack of confidence lead to fewer jobs. That is the nature of the economy we are living with today. That is the nature of the economy so seriously affected by the budget of November 12.
This budget is far worse than simply a misguided economic policy. It is more than a tax grab on many, many Canadians. No one in this House and no one in the country has any quarrel with equity in the tax system. People say that is a good thing and that we should have it. As a result of the budget many worth-while social and economic policies have been undermined. These are not policies which we hold exclusively in the Conservative Party. These are policies and objectives which are sought by Canadians represented by all parties in the House. This is why there has been such a wholesale condemnation of the budget.
I should like to review, for the benefit of the minister and also for the benefit of backbenchers, some of the broad social objectives which have been undermined by the budget, because I think this might be helpful in their caucus tomorrow. All
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Canadians are concerned that pensioners should enjoy a comfortable retirement, free from worry and as self-reliant as possible. But the budget taxes individual pensioners-and we heard this from the Consumers' Association of Canada-in seven different areas. Let me refer to one example of the ridiculous nature of these changes. A pensioner who earns a little extra money because his pension is not sufficient to finance his needs today will now lose his $1,000 deduction. The reason for this is that the department and the minister were going after an exclusive group of Canadians who happen to have indexed pensions, who retired at age 55 and are earning money as consultants to the government. That is the direction the budget has taken. Instead of just going exclusively after that group, they have drawn in all pensioners who are earning a little extra money. It is taking an elephant gun to shoot a mosquito. The minister should have the expertise and the sensitivity to work differently than that.
There are many other parts of the budget which affect pensioners in the same ill-conceived fashion. Many people told us that there was some abuse, but that the abuse could be caught if the government knew what it was doing. Let me leave the minister with a comment made by a group which we met in Halifax called "Canadian Pensioners Concerned". They said that these financial shocks to pensioners will lead to ill health and earlier death; the minister should recognize this. Also he should be encouraging people to save for their retirement. That is the Canadian tradition; we have always been good savers. We want to develop the maximum degree of self-reliance among pensioners and the least reliance upon the government, but the budget taxes life insurance and makes loan interest to purchase RRSPs not deductible any longer. The average loan is a little over $2,000. Is that a rich person's loan to buy an RRSP for one year? No, it is not. This loan is taken out by a number of low and middle-income Canadians who do not have the ready cash to put into RRSPs. Deferred profit-sharing plans have been ruled out for many small businesses. Farmers who had looked forward to the use of incomeaveraging annuities as their means of retirement income have lost an important element of their future financial planning. The result will be that more people will be relying upon the government for support in future years.
We heard in Kitchener that the thrust of the budget penalizes those people who save and prepare for the future. We heard from another group in Kitchener that there was no link between the minister's statements at the pension conference a few months ago and the budget. In short, they said that the budget undermined the basic Canadian tradition of saving for the future. In this area of financial planning for the future, people preparing for retirement, there are abuses, but those abuses can be dealt with without killing the tradition of Canadians to save.


James Scott (Jim) Peterson: We have done that.


Michael Holcombe Wilson: We heard from both management and labour about the entire area of encouragement to Canadians to look after their dental and health care by participating in dental

January 26, 1982
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programs. By the way, no federal public servant, with two exceptions in the postal union, has such a program. It makes one wonder why this has been attacked. The budget will tax these benefits. Today the hon. member for Rosedale (Mr. Crombie) noted the inflationary impact, but also the impact that the budget and its changes will have on the collective bargaining process, as both sides try to offset the cost of this at a time when there are many pressures in the collective bargaining process because of inflation and slow economic growth. The result will be more strikes and further slowdowns in the economy.
There is no doubt in anyone's mind that there is a housing crisis, but there are four areas in the budget which undermine the ability of people in the housing industry to do their job. The changes in the budget which hurt the housing industry compound the crisis and are not in any way offset by the $7,500 interest-free loan the minister announced in the budget. We hear time and again from people in the industry that it would not offset the loss of capital cost allowance, the loss of MURBs and so on. We were told by one builder who still has a sense of humour that he was not really concerned about the budget because he did not pay any taxes today; he did not make any money upon which he should pay taxes. This is the nature of things in the housing industry.
We heard yesterday the speech of the Minister of Agriculture (Mr. Whelan). He indicated that farmers are a great resource in the country. When one takes that speech and compares it with the attack of the Minister of Finance (Mr. MacEachen) through the high interest rate policy, through the change in the capital cost allowance, one realizes that the farmers have had incentive taken away from them in the farming industry. They see a very bleak future ahead. Someone in Regina said: "We see a real crunch coming." The budget must be withdrawn.
Also the minister referred to the Investment Dealers' Association as being associated with the letter from the president of the Toronto Stock Exchange. The association attended our hearings in Toronto and made a very eloquent representation for the reinstatement of a number of investment incentives as well as some of the basic saving incentives which have been an important part of job creation and economic growth to date.


Allan Joseph MacEachen: What about interest deductibility?


Michael Holcombe Wilson: That industry is not in support of the budget.


Allan Joseph MacEachen: Did they say anything about interest deductibility?


Michael Holcombe Wilson: 1 will answer the minister's question. The change in interest deductibility was welcomed by that industry as well as by the small business community. They welcomed it because if they had not received it the small-business community would have been killed. Many individuals and small businesses would have lost their operations completely; they would have gone bankrupt this year. This is why the minister was forced to respond. There was no flexibility: he was forced
to make that statement in the House, and there is no other way to express it.


James Scott (Jim) Peterson: We are the ones who made it deductible.


Michael Holcombe Wilson: Another witness indicated that charitable foundations are a source of major financial support for the total voluntary organization community within the country. One witness referred to them as the "bulwark of democracy", but the budget seriously undermines the capacity of charitable institutions to continue in existence. We were given the example of one foundation which in 1970 was capitalized at $14 million. At the end of 1980 it had grown, with inflation, to $30 million. During the course of that period it provided a significant amount of financial support for the voluntary sector. If this budget had been in place, we were told that that charitable foundation would have been capitalized at only $11 million compared with the $14 million in 1970.


James Scott (Jim) Peterson: That has been looked after.


Michael Holcombe Wilson: That is what the budget will do to charitable foundations. I could refer to a number of other areas such as mining, the budget's impact on productivity, the impact on students and on universities of cuts in the established programs financing, and the impact on the Canadianization process. I have tried to make the minister understand that. I do not think he understands it. 1 do not think he understands that whole investment process at all. Canadianization will slow down. There will be fewer Canadian shareholders and less Canadian ownership in five years' time than there is today, directly as a result of this budget. There are no two ways about that.
Another theme was evident in our meetings, and that was the question of process. 1 was interested to read what the minister had to say about process in the speech he made yesterday in Toronto. The President of the Treasury Board (Mr. Johnston) was part of a committee when he was in the private sector that proposed changes to the process. They fell on deaf ears. It is only the tremendous embarrassment of the minister in these past two months that has caused him to rethink this whole question of secrecy in budgets. It is very unlike him. He likes to carry everything in his arms so that no one else will know what is going on. He likes to spring things on the country without any opportunity for comment and without any opportunity to understand their impact.
This is what has caused the frustration and anger among so many people who appeared before our committee, individuals as well as those representing organizations. We heard them all say that this process has to change, that the government is operating in an ivory tower in Ottawa, and that the individuals who are to bear the burden of these changes and feel the impact directly must therefore have an opportunity to be heard. In fact, one gentleman said: "I have a right to be heard, but I am not being heard." He asked how the process could be changed to allow individual Canadians to be heard when inequities such as those contained in this budget are brought
January 26, 1982

out which cause such tremendous upset and disruption to the lives of individual Canadians.
1 should remind the minister that in the United States the Internal Revenue Service is required, any time it brings forth any changes equivalent to those in this budget, to hold public hearings. Following such hearings, the IRS is required to make a report to Congress, and it is on that basis that Congress acts.
Canada is doing it the wrong way round. Here we have the minister making a statement, setting an effective date on budget night, putting himself in a position where he cannot be pushed unless the tremendous groundswell of public opinion that we experienced over the past two months pushes him off the positions he has taken. This is the nature of the system right now. It must be changed.


The Acting Speaker (Mr. Blaker):: Order, please. There is a bit of difficulty. The hon. member's time has expired. I have allowed him a few minutes extra because I was under the impression that he may wish to present a subamendment. I do not know whether that is the hon. member's intention or not. However, if it is his intention, then the procedural solution to the problem would be for him to put the subamendment as quickly as possible and 1 can then extend his time by an additional ten minutes. If it is not his intention to present a subamendment, then I have to give him notice that his time has expired and perhaps he can wrap up his remarks in the next moment or two.


Michael Holcombe Wilson: Mr. Speaker, you are clairvoyant. 1 do have a subamendment. It is an amendment that I felt was necessary to amend the New Democratic Party amendment. I believe that what the NDP has proposed in its amendment does require further study. The impact of what the NDP has proposed on the housing industry is not at all clear. It is for that reason that I move, seconded by the hon. member for Burlington (Mr. Kempling):
That the amendment be amended by adding thereto the following:
"Provided that before final implementation these measures shall be put forward and elaborated in a white paper on government economic policy which shall be referred to a special committee of this House, with power to travel and hear representations from Canadians".
Let me wind up my remarks by drawing a broad conclusion. This budget has clearly undermined many worth-while policy objectives. It has undermined the will on the part of individuals to save and prepare for the future. It has undermined the ability of businesses to exist, to succeed and to create growth in this country. It has undermined the voluntary sector. It has undermined many of the productive elements in our society. It is ominous that this should happen when the government is preparing to be more interventionist with its reorganization which places under the umbrella of the Minister of Industry, Trade and Commerce (Mr. Gray)-I believe that is still his title today-the Department of Regional Economic Expansion. That will involve a much greater degree of intervention, of direct hands-on, big-lever pulling by one minister who is well known to be a very interventionist thinker.
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In addition, we have the Minister of National Health and Welfare (Miss Begin) making ominous noises about a greater degree of government participation and control of the pension industry.
Let me leave hon. members with the following thought. In 1975 the Prime Minister (Mr. Trudeau) said that the market system was not working. He said that we would have to become used to more government involvement and more government intervention in our lives. Many people at that time spoke out in opposition to that sentiment and the Prime Minister backed down. But this budget, when taken in the context of other things that have happened, other policy initiatives that have been instituted by this Liberal Party over the past few years, including the National Energy Program last year, indicates that what the Prime Minister said, and from which he backed down, is part of the underlying thrust and direction of this government.
This budget itself represents the greatest effort to undermine the private sector and to create a vacuum into which government will move, because it will say the private sector is not doing the job and that the government must step in and do it. There will be more government in our lives arising out of this budget than anything we have seen in the past ten or 20 years.
1 ask you this question, Mr. Speaker: was this budget sheer stupidity on the part of the government or is it part of a desire by the government to undermine a successful economy and bring on an unprecedented amount of government intervention in our lives? Whatever the answer in either case, this budget should be withdrawn.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Blaker):: Is the President of the Privy Council rising on a point of order with respect to the acceptability of the subamendment?


Mr. Pinard:: Exactly, Mr. Speaker, 1 refer to Standing Order 61.


The Acting Speaker (Mr. Blaker):: Perhaps I can save the
President of the Privy Council from the difficulty. I will hear hon. members who may wish to make contributions on the subject of whether or not the subamendment is in order. I will first read it and then I will read a citation from Beauschene. I think the House will possibly want to come to the same conclusion the Chair has, and that is that the subamendment is out of order. The subamendment reads:
That the amendment be amended by adding thereto the following:
"Provided that before final implementation these measures shall be put
forward and elaborated in a white paper on government economic policy
which shall be referred to a special committee of this House, with power to
travel and hear representations from Canadians".
I refer to Beauchesne's fourth edition, Citation 202(3), which refers to and deals with the matter of subamendments. It reads:

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Since the purpose of a subamendment is to alter the amendment, it should not enlarge upon the scope of the amendment but it should deal with matters that are not covered by the amendment; if it is intended to bring up matters foreign to the amendment, the member should wait until the amendment is disposed of and move a new amendment.
I note that the subamendment put forth by the hon. member for Etobicoke Centre (Mr. Wilson) brings to the attention of the House three considerations. The first is that he attaches to the amendment now on the floor of the House, a condition. Second, he calls for a white paper on government economic policy. Third, he calls for creation of a special committee. In each of these cases his subamendment would expand upon the amendment of the New Democratic Party.
I will, as I indicated, hear contributions if hon. members see fit. Otherwise, the disposition of the Chair would be to rule the subamendment out of order.
[ Translation]


Yvon Pinard: I would not want to complicate things, Mr. Speaker, but if ever you should reach the conclusion that one subamendment is in order I would respectfully submit that only one subamendment can be allowed under our Standing Orders when we are debating a business of supply motion. I draw your attention to Standing Order 61 which is quite clear on that subject and which reads as follows:
Only one amendment and one subamendment may be made to a motion proposed in the Budget Debate or to a motion proposed under an order of the day for the consideration of the business of supply on an allotted day.
Today happens to be an opposition day. It is a motion moved under Standing Order 58, so it has to do with the business of supply. It is covered by Standing Order 61, and only one amendment and only one subamendment are in order. So it matters little which amendment you will accept, it does not make any difference to me, but only one subamendment is in order and we object to any additional subamendment.


Erik Nielsen: Mr. Speaker, I will be brief because I do not want to impinge upon the members' debating time. Had the Chair gone on to read from the fifth edition of Beauchesne's, not the fourth, in paragraph 439 it sets forth by implication:
-two amendments can be proposed at the same time to a question.
That is the limit. Paragraph 440 says:
As the proposal of an amendment to an amendment originates a fresh subject for consideration, the new question thus created must, to prevent confusion, be disposed of by itself. An amendment, when undergoing alteration, is therefore-
The form and content of subamendments is set forth in paragraph 441, four separate subparagraphs. With great respect to the Chair I submit that the subamendment moved here does not enlarge upon the amendment moved by the NDP; and there is no rule, with respect to the Chair, that prevents a subamendment from placing a condition even if it were to be interpreted as such.
What the subamendment is attempting to do is to enable the substance of the amendment itself to be tested by the democratic process of public hearings, so that what members of this party have been trying to convince the government on will be conveyed directly to the government through the process of public hearings in committee. That, Mr. Speaker, does not detract one iota from the substance of the amendment put by the leader of the NDP (Mr. Broadbent). Indeed, it would be my speculation that the NDP would welcome the kind of public hearings the subamendment calls for and, indeed, one would think that even a government as stubborn as this one would welcome the kind of public hearings which this party alone has been conducting of its own volition.


Mr. Cosgrove:: We want action.


Erik Nielsen: Well, we want action too, I might tell the Minister of Public Works (Mr. Cosgrove), and that action is to withdraw the budget.
With respect to the Standing Order quoted by the government House leader, that simply confirms that subamendments are permissible. It has long been the practice in this House, particularly on opposition days, to accept subamendments. I have never heard of an objection being taken, whether by the Chair or the government, to the right of the opposition to move a subamendment, because if the logic of the government House leader, and of the Chair with respect, is to be followed it would mean that our amendment in this instance, or an NDP amendment on an opposition day allotted to them, might be completely distorted and given an entirely different sense unless it could be rectified by the subamendment process.
So my submission to the Chair is that the government House leader has simply bolstered my argument by citing the order he does. I might point out to him, in the remote event that the Chair might consider his argument has any logic at all, that we are dealing here with an allotted opposition day, the right of an opposition to test the continued confidence of the House in this budget, this minister and this government.
The subamendment is one which I submit most strongly is totally in order because it does not harm by one iota the substance of the NDP amendment, but merely puts in place a process which, if we can anticipate the evidence to be gathered by such public hearings, if that is acceptable to the House, will do nothing but good and will perhaps finally convince the government of the inadequacy of their budget measures and the deep wounds being caused to the Canadian public as a whole. For those reasons I submit that the Chair accept the motion.
While I am on my feet, Mr. Speaker, I might file a caveat here with respect to the procedures generally that are apparently being followed by the Chair in its interpretation of Standing Order 58(13), where it appears that the Chair is not applying the 20-minute limitation because of an interpretation of the word "motion" in that Standing Order as including an amendment.
If the logic of that interpretation is followed to its ultimate, it would mean, in the case of an amendment and a subamendment, that you would have three 30-minute speeches from that

side and three from this side, which totally defeats the intent of the order.
I am not raising that as a point of order now; I am simply filing the caveat that I may raise it as a point of order in future. My inclination, however, is to discuss it with the House leaders to see if we cannot find a consensus on that question.
Mir. Bob Rae (Broadview-Greenwood): Mr. Speaker, I suggest to you that the question you have to decide is whether or not the substance of the subamendment is in fact hostile to the purpose of the amendment itself. 1 submit that, judging from the comments just made by the hon. member for Etobicoke Centre (Mr. Wilson), the reference of our proposed amendment to a committee is indeed hostile to the proposal itself.
What we on our side want to see is a direct vote on two particular proposals we have made. We are prepared to stand by a vote on those two proposals and we do not want to see the clarity of those proposals blurred by a decision to refer it to a committee.


Erik Nielsen: You are not in favour of public hearings.


Bob Rae: It is clear from the remarks which have been made by the hon. member for Etobicoke Centre that the purpose of moving the subamendment is to bury forever the proposals which have been put forward by our party. It is for that reason that 1 think we must consider whether the subamendment, in a sense, explains the substance of the amendment or whether it substitutes an entirely new proposal.
Citation 438(2), on page 155 of the fifth edition of Beau-chesne, very clearly states that:
A subamendment must attempt to explain the substance of the amendment and may not substitute an entirely new proposal.
I submit to Your Honour that the suggestion that a matter or a group of matters should be referred to a committee and should then be developed in a white paper, and so forth, is an entirely different suggestion from the proposal which was put forward by the hon. member for Oshawa (Mr. Broadbent), which is to say, a very clear-cut proposal that a matter be voted on in the House. We are prepared to stand up and be counted on those two amendments, and we want other parties to stand up and be counted on those two amendments.
We are not prepared to accept the argument that this is a purely procedural matter which will simply be referred to a committee for procedural reasons, because we can distinctly tell, from what the hon. member for Etobicoke Centre said, that he is in fact hostile to the substance of our amendment. For that reason, I think that in following Citation 438(2), Your Honour should find that the subamendment is out of order.


Charles Joseph Clark: Very briefly, I must register some dismay that the New Democratic Party would consider that the process of public hearings is-
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Bob Rae: You guys are just afraid to say where you stand on the banks, that's all.


Charles Joseph Clark: -hostile to their interests or to the viability of any proposals which they would put forward. What is at issue here is whether or not it is in order for the Progressive Conservative Party, the official opposition, to move a subamendment on a separate matter, namely, the matter of the opportunity for the public to consider the measures proposed in the amendment moved by the New Democratic Party, which amendment, in itself, is a separate item from the substance of the motion which 1 had the honour to move earlier today.
It may well be that the New Democratic Party understands that the motion which it has introduced, in so far as the banks are concerned, goes much more easily on the banks than could be the case resulting from some amendments which might arise through a public hearing process. That might be the reason they are opposed to this procedure.


Bob Rae: is that what Bill Neville told you?


Charles Joseph Clark: But the question-


Bob Rae: Is that what he told you?


Charles Joseph Clark: 1 got that from Tommy Douglas.


Bob Rae: How much tax does the Canadian Imperial Bank of Commerce pay, Joe?


Charles Joseph Clark: The question for the Chair to decide is whether or not, in the separate measure proposed by my colleague, the hon. member for Etobicoke Centre (Mr. Wilson), there is anything hostile to the measure proposed by the leader of the New Democratic Party (Mr. Broadbent). I submit to Your Honour that they are separate measures. Just as the motion of the leader of the New Democratic Party is separate from the substance of my motion, so is the subamendment proposed by my colleague, the hon. member for Etobicoke Centre, separate from the amendment proposed by the leader of the New Democratic Party. There is no hostility between them. I hope that the Chair will respect the procedures which have been followed, by my understanding, in allotted days on previous occasions, will allow the motion to be put, and will require that the New Democratic Party go on the record as to whether or not it is in favour of or opposed to public hearings.


Bob Rae: We've held more hearings than you have, turkeys.


Charles James Mayer: Don't talk about turkeys.


The Acting Speaker (Mr. Blaker):: I think perhaps the Chair might first deal with the intervention made by the President of the Privy Council (Mr. Pinard) referring to Standing Order 61. I was left uncertain as to the purpose of the intervention. So far as I can understand, the point made by the President of the Privy Council can be satisfied if I review it in the following fashion; that is to say, if the subamendment offered by the hon. member for Etobicoke Centre (Mr. COMMONS DEBATES
January 26, 1982
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Wilson) were found to be out of order, then it would still follow that only one subamendment would be permitted to the main motion before the House. That is clear in the Standing Orders.
I refer back to the comments made by the hon. member for Yukon (Mr. Nielsen), who said that there has been some standing practice which might permit an exception to Standing Order 61.
If the Chair sees more than one subamendment coming to it, there will certainly be immediate research done to determine whether or not there are precedents to permit that. However, at the moment the Chair will be guided by Standing Order 61, which indicates that there is a limit of one subamendment. That does not preclude an effort by some hon. member to make a try at that. I will take a look at some of the texts on the subject while debate continues.
1 now want to refer to the next point raised by the hon. member for Yukon relating to Standing Order 58(13). That is the question of allowing each person, each Member of Parliament who replies to an amendment, a motion or a subamendment, a time allotment of 30 minutes. I understand quite well the point made by the hon. member for Yukon. The issue focuses on whether or not an amendment and subamendment are to be considered as motions within the meaning of Standing Order 58(13).
However, at the moment it is the Chair's view, after consideration, that this is obviously an opposition day with an opposition motion and an opposition amendment to that motion, and now an opposition subamendment to the motion. In the circumstances, each of these motions will be considered to entitle-because of the word "reply"-the government members to my right to reply for 30 minutes to each of the motions: the motion, the amendment and the subamendment. The Chair has some question as to that ruling.
1 appreciate the courtesy shown by the hon. member for Yukon in alerting the Chair that he wanted to raise that caveat. 1 have simply put my own words on record so that in future discussions between the hon. House leader for the opposition and other House leaders, perhaps those words will be of some use as being the thoughts of the Chair with regard to that matter.
I can now deal with the matter of the subamendment presented by the hon. member for Etobicoke Centre. Both in the case of the Right Hon. Leader of the Opposition (Mr. Clark) and in the case of the hon. member for Broadview-Greenwood (Mr. Rae), some discussion took place as to whether or not the subamendment is hostile or inimical to the amendment, and 1 will deal with that in a moment.
The hon. member for Yukon quoted a number of citations from the fifth edition of Beauchesne. In particular, he quoted Citation 440, which 1 have read with some attention. I do not find that the Chair is helped by a review of that citation. I might, in return, suggest to the hon. member for Yukon and other hon. members that they look instead at Citation 438(2), which states:
A subamendment must attempt to explain the substance of the amendment and may not substitute an entirely new proposal.
Therefore, we are now back to the issue as to whether or not the subamendment constitutes or puts forward an entirely new proposal. When 1 look for further assistance with regard to that matter, I go back again, as 1 did earlier, to Beauchesne's fourth edition, Citation 202(3), which states that a subamendment "should not enlarge upon the scope of the amendment".
1 find some further support in Beauchesne's fourth edition by going to Citation 203(5), which states:
An amendment was ruled out because it raised a new question which could only be considered on a distinct motion after notice.
Therefore, in one way or another, 1 am faced with the issue as to whether or not the subamendment raises a new question, a new issue or enlarges upon the amendment. I find that the proposition that there ought to be a government white paper and the proposition that there ought to be a special committee both constitute new matters, an enlargement upon the amendment. I invited hon. members to comment and I saw that there were no further hon. members who sought to be recognized by the Chair.
Accordingly, with regrets to those who may not be well satisfied with the decision, it is the decision of the Chair that the subamendment is out of order.
[ Translation]


Hon. Pierre Bussieres (Minister of State (Finance)):: Mr. Speaker, after listening for several hours to the debate on the motion by the Leader of the Opposition (Mr. Clark), I am tempted to establish at least a preliminary diagnosis, and that is that our colleagues on the opposite side are afflicted with chronic myopia. If we consider the speech by the Leader of the Opposition on presenting his motion and the speech made by the member for Etobicoke Centre (Mr. Wilson), they both concentrated mainly on specific tax measures contained in the budget. The attitude of the Leader of the Opposition, at a time when our primary concern is with the basic problems facing the economy, reminds me of the forester who was sitting on top of his fire tower and was so busy counting the different species of trees and calculating how much each had grown, that he did not notice the whole forest was on fire and suddenly realized that he should be warning the fire wardens. Because he was too concerned with details he forgot what he was actually supposed to do, which was to look at the general situation and, if anything was wrong, try to do something about it.
As for our colleagues farther to the right, 1 think we can say they are also suffering from chronic shortsightedness, since they were only too eager to pounce on the first scapegoat they could find and blame it for all our problems, that is, our financial institutions and especially the banks. If we look at the suggestion made by the member for Etobicoke Centre, who
January 26, 1982

was describing specific cases, we find that he did not draw the right conclusions from the specific cases he was using as an example. After enumerating various tax measures, he concluded that a white paper on the government's economic policy was necessary and that hearings should be held on the basis of this white paper. I would suggest that he first refer to the document he and his leaders are so eager to have withdrawn-the budget-which is in fact concerned with the government's economic policy. He should take another long, hard look at this document and if he wants to continue his so-called hearings, let him ask the people who come to the hearings what they think about this basic document. I would also draw his attention to the document on the government's economic policy for the eighties which accompanied the budget speech by the Minister of Finance (Mr. MacEachen). It describes how the government intends to support activity in the private sector to provide for the economic and industrial development of our country during the next ten years. It is an extremely interesting document which provides a perspective on the future and will help us to provide for our country's economic development as soon as the economy has been put back on the right track.
In my speech I would like to address myself to our budget policy and its orientation, in order to clarify its relevance as a solution to the problems facing the Canadian economy. My colleague, the Minister of Finance, has referred to the budget's general objective and the philosophy underlying the various tax measures introduced in this budget. The House will recall that the November budget contains three major themes: restraint, equity and economic renewal. These three themes form the basis for the budget's primary objective which is to fight inflation. Many Canadians and many members of this House have been wondering why this objective was chosen at a time when interest rates are extremely high and unemployment is particularly severe.
The decision to fight inflation was made after carefully weighing the pros and cons of the budget policy's orientation. In fact, this decision was dictated both by common sense and by the conclusions reached after an analysis of various economic indicators. Economic observers have recognized that inflation has become a way of life for Canadians, and that this inflationary context creates an attitude of uncertainty regarding the future. The result of this lack of confidence is that people are inclined to think twice about any investments they might want to make. As a result, investment projects that are necessary if our economic potential is to be utilized at full capacity are not carried through, which means there is a negative impact on the real growth of the economy and thus of employment.
There is therefore a direct relationship between the inflationary forces present in the economy and the underutilization of the factors of production in that same economy. The higher the inflation rate and the more unstable the inflationary
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pressures, the stronger this relationship. We must also remember that inflation did not appear all of a sudden in our economy. Just as it took some time for inflation to permeate into our economy, we shall need time and constant efforts to get rid of it.
What does this direct relationship between inflation and production imply for the government when it prepares and develops its budgetary policy and strategy? Recognition of this relationship causes a time-related dilemma for the government. It must choose between a necessarily restrictive antiinflationary policy which could increase unemployment in the short run while failure to fight inflation would jeopardize economic growth in the medium term, thus intensifying unemployment in the medium and the long term, bringing about permanent unemployment. The government must therefore choose between a short-term strategy and putting aside the fight against inflation, which would temporarily relieve pressures on the labour market, and a medium-term strategy including a short-term restrictive policy which will go to the root of the problem, bringing about a firmly based economic recovery.
When I listen to the comments of opposition members, I am forced to put them among those who favour the first option, namely, the short-term, short-lived, ephemereal solution. Perhaps for the sake of expediency they would rather promote the creation of temporary jobs instead of facing facts and supporting policies which go to the root of the problem and through which we shall be able to acquire all the assets necessary to achieve the full potential of our economy. I would be tempted to describe this short-term strategy as myopic, just as I said that certain comments were myopic in my earlier conclusion. It is economic myopia. Opting for this strategy reflects either a sense of political expediency or an unawareness of the effects of long-lasting inflation on medium-term employment. 1 use the word myopia because sooner or later, anti-inflation measures will have to be put into place and the effects that we would refuse to see today would then be only too obvious.
The second strategy, which was proposed by the hon. Minister of Finance and the government, aims on the one hand at putting an end to the vicious circle of inflation, and on the other hand, at putting in place the mechanism which will enable us in the medium term to better face the challenge of international competition and to put our productive potential to full use. By choosing this anti-inflation strategy and accepting responsibly its consequences, the government is not deceiving Canadians with irresponsible promises. It is not deluding them or giving rise to false hopes. Those who suggest that we can go on living unconcernedly in these inflationary conditions are nothing but dream peddlers and in fact they are merely advocating conventional remedies. It is quite hopeless to dream that it will be easy to come back to a situation of high growth. On the contrary, restoring a climate of comparative prosperity

January 26, 1982
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will be rather difficult and will require determined and constant efforts from each economic sector.
I should bring up again that problem of coexisting inflation and sluggish economy and dwell briefly on a special feature of the Canadian economy, that is the very wide and determined opening of our economy on international markets. We have to outdo our trade partners in our fight against inflation. So long as our inflation rate keeps higher than that of our partners, our competitive position is deteriorating and preventing us from reverting to the full use of our productive resources. Our industrial and economic structure is such that 25 per cent of our production is sold on the international markets compared to an average of 18 per cent in the case of our major partners. This feature of the Canadian economy compels us to strive harder to control inflation because the deterioration of our competitive position has tremendous impacts on employment in Canada. To show-
I find it rather strange, Mr. Speaker, that members should let themselves be easily carried away and lose their temper.


Roch La Salle: This has been said ten years ago.


Pierre Bussières: To show the effect of the above phenomenon on employment, the impact of exports, may I only indicate that during the last quarter of 1980 and the first quarter of 1981, and not ten years ago, our excellent performance abroad has enabled us to reduce significantly our unemployment rate and to reach very high rates of actual growth during those quarters. To the extent that we are competitive, we create jobs. The opposite, however, is also true. To the extent that we allow our competitive position to deteriorate because of a galloping inflation, we lose markets and permanent jobs in the short and medium term. The less competitive we become, the more jobs we lose. In 1980, our gross national product reached nearly $290 billion; $76 billion of which represented the value of our exports. Some 65 per cent of our total exports go to the United States. On the other hand, inflation in the United States reached 8.9 per cent, compared with 12.5 per cent in Canada over the same period. Should this trend continue, it is clear that we would lose ground in terms of the capacity of our own production to compete with foreign goods both on our domestic market and on the American market.
One must also realize that the recession, the economic slow-down of which affects Canada also affects our trading partners. I am not saying that we should rejoice at other people's misery. I am not saying either that we need only explain the phenomena to suppress their effects. I am merely saying that the economic slowdown is worldwide and that most leaders of industrialized countries are faced with the same dilemma as to the direction of their budgetary policy.
One must keep in mind that at the International Monetary Fund and OECD meetings, many participants have insisted on
the need to check inflation before tackling unemployment. It is also interesting to note the relationship between inflation and unemployment in every industrialized nation. For instance, in some cases where inflation is very low, so is unemployment. Although the immediate thrust of the budget policy is to reduce the inflationary pressures, one should not conclude that the government disregards the social consequences of the current economic situation. This government has deliberately opted for a gradualist strategy in the strength of the fiscal and monetary restraints it has implemented. It would have been socially unacceptable merely to eliminate a certain number of social programs with a view to drastically reducing the government's expenditures and deficit. Indeed, it has reinforced its inflation strategy by limiting the growth of expenditures and aiming at a gradual reduction of its deficit.
Despite the outcries of the opposition, the last budget leaves untouched the tax and social programs indexing system, which represents a purchasing power of more than $2.5 billion available to the taxpayers for the year 1982. The Minister of Finance has also given many examples of lower marginal rates of taxation and of other measures contained in the budget which will boost the purchasing power of Canadian taxpayers during fiscal year 1982. I hasten to point out as well that Canada is one of the very few countries that offer their taxpayers such an extensive indexation system as applied to tax schedules and basic exemptions. For instance, the United States have no tax rate indexation.
This budget also features an economic development strategy the purpose of which is to promote the long-term expansion of the Canadian economy. That strategy is aimed at making it possible to distribute equitably the benefits stemming from growth and development among regions, social groups and individuals as well. Hon. members will recall that it bears on five priority fields: industrial development, resources development, transportation, export promotion and maximum use of our human resources. Our approach is synchronized with the economic objectives of the provinces, since it is aimed at promoting the natural resources development industries and revitalizing the industrial structure in light of an ever stronger international competition. Our strategy also takes into account regional and national economic development, hence the expected closer co-operation between the Government of Canada and the provincial governments. In spite of the restrictive policy, the anti-inflation policy, between now and 1986 the Canadian government will spend about $60 billion for economic development. This includes close to $19 billion that will be allocated to energy development.
Some references have been made today to the difficulties faced by the manufacturing sector in Quebec and elsewhere in Canada. If I may, Mr. Speaker, I would like to refer to a number of measures taken by the Canadian government to help consolidate Quebec's and Canada's industrial structure.
January 26, 1982

Hon. members are aware that in Quebec some industries are particularly sensitive, the so-called "soft" sectors, namely, the textile industry, the clothing industry and the footwear industry. This government announced a major program, a five-year program. A budget in the area of $250 million that will be managed by the Canadian Industrial Renewal Board.


Roch La Salle: Tell us about the footwear industry!


An hon. Member:: He knows nothing about it.


Roch La Salle: Are there industrial losses in the footwear industry?


Pierre Bussières: The hon. member for Joliette (Mr. La Salle) refers to the footwear industry. It seems the hon. member for Joliette does not know much about that industry. If he examined the anti-dumping tribunal's report, if he stopped speaking through his hat, like the Quebec minister of trade and commerce who contradicts Mr. Parizeau, he would know that the government policy concerning the footwear industry is a sensible one, one that will allow the Canadian footwear industry to step up its modernization drive and to become more and more competitive. The hon. member should stop howling and look at the programs put forward by the Canadian government in the past, like the Canadian Industrial Renewal Board, to ensure the development and survival of the footwear industry in Canada. He will find his rhetoric does not-


Roch La Salle: The hon. member for Drummond (Mr. Pinard) has admitted this, although he sits on the government side.


Pierre Bussières: -he will find his rhetoric does not come anywhere near this government's economic policies.


Roch La Salle: Have there been losses in the footwear industry? Eight thousand jobs lost?


An hon. Member:: He has led the Union Nationale to bankruptcy!


Pierre Bussières: Mr. Speaker, the hon. member for Joliette is well known for his ignorance-


An hon. Member:: His rudeness.


Pierre Bussières: -his rudeness.


Roch La Salle: Mr. Speaker, on a point of order.


The Acting Speaker (Mr. Blaker):: The hon. member for Joliette on a point of order.


Roch La Salle: Mr. Speaker, I do not accept those remarks. I am simply asking the minister to tell us whether or not, in the footwear industry, thousands of jobs have been lost. The hon. member for Drummond-
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The Acting Speaker (Mr. Blaker):: Order, please! I suggest the hon. member for Joliette knows full well he does not have a valid point of order. The Minister of State for Finance.


Pierre Bussières: Thank you, Mr. Speaker. 1 should also like to remind the hon. member for Joliette that the Canadian Industrial Renewal Board is concerned not only with ensuring that those industries, those vulnerable sectors, are brought up to date, but it also sees to the well-being of those Quebecers whose communities live off those industries. The Board was entrusted the care of creating new permanent jobs for the workers who might be affected by the over-all economic situation that deals a harder blow to those industries which by their very nature are more exposed to setbacks.
We are also very much aware that the Quebec shipbuilding industry, especially in the Sorel-Tracy area, is facing rough times. The pulp and paper industry, the primary processing of metals in the Schefferville, Port-Cartier and Sept-Iles regions must also face tougher competition on world markets. In order to help those industries and their workers to adapt, the Canadian government set up last January an industry and labour adjustment program which was allotted a five-year $350 million budget. That amount is in addition to the $135 million the Canadian government has earmarked for the updating of the Quebec pulp and paper industry throughout the province. The financial assistance provided through the industrial and labour adjustment program is also in addition to the amount of $225 million to be paid until 1982-83 under the shipbuilding assistance program to allow for the modernization of the shipyards.
I may add, Mr. Speaker, that thanks to the Canadian government's energy policy, Dome Petroleum has acquired the Davie Shipbuilding shipyards in Levis, which will double the number of permanent jobs at the Davie shipyards within the next few years. This, Mr. Speaker, is an example of the benefits of a realistic economic development policy.
In the high technology sector, where permanent jobs are being created, Quebec is one of the main beneficiaries of federal government aid. Between now and 1985, the Government of Canada will spend $476 million on the Canadian space program. Important projects for Quebec include the Canadarm for American space shuttles, the manufacture of satellites and also antennas and components for earth stations. Most of this equipment will be manufactured by Spar Aerospace Limited located in Sainte-Anne-de-Bellevue. Last month, $132 million was committed to the program and $50 million has been earmarked for Quebec. About 500 new jobs in the high technology sector will be created in that province. Here, Mr. Speaker, 1 am referring to permanent jobs. These are not stop-gap measures and certainly not a cataplasme sur une jambe de bois as Real Caouette used to say.
The Canadian government will spend more than $32 million between now and 1983 on improving the Telidon two-way videotex system developed by Canadian government research-
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January 26, 1982
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ers and successfully transplanted to the private sector. Quebec companies are taking part in certain aspects of the system's production and testing. Montreal cable subscribers are already receiving televised pages of La Presse via Telidon. A special fund of $70 million established to promote the development and use of microelectronic equipment was used to help the Mitel company build a major plant in Bromont, in the Eastern Townships, thus creating 640 permanent jobs, again in the high technology sector.


An hon. Member:: That's in Quebec!


An hon. Member:: Hear, hear!


Pierre Bussières: I would like to add that the Canadian government is also taking major steps in other industrial sectors, for instance, at Pratt & Whitney on the South Shore, where $50 million in Canadian government funds will be used to develop a new engine that will be used in the DASH-8 aircraft. Mr. Speaker, I could go on for some time to show how investment and the strategy for industrial economic development presented by the government in this budget are enabling Quebec and the Quebec and Canadian Economy to benefit from this development strategy and how many permanent jobs are being created. We must not let ourselves be tempted by short-term solutions and we must continue to develop policies that will enable the economy to become more and more productive and so bring down interest rates and unemployment.


Miss Pat Carney (Vancouver Centre):: Mr. Speaker, 1 am proud to have this opportunity to speak to this motion to withdraw the budget, as it allows me an opportunity to present to the House the views of many ordinary Canadians affected by this budget. These views were heard by our Conservative special committee on the budget and the economy, which visited 16 cities across the country and heard from 168 individuals and groups. As vice-chairman of the committee and looking back on the experience, I think our hearings had a twofold benefit. It gave members of our caucus who participated in these hearings an opportunity to learn how the budget affected individual Canadians and sectors of our society, and it also gave Canadians a forum in which to express their anger and their concern about this document which drastically altered the lives of many Canadians. Let me tell you what they told us. I will quote the comments of the people I report on.
The Canadian Consumers' Association declared it "outrageously unfair" to seniors. An Ottawa businessman said it was "an amalgam of stupidity and deceit." The Quebec Federation of Labour termed it "devastating." The B.C. Federation of Labour termed it "disgusting." The Association of Chartered Accountants in Alberta said, "It has created anger, frustration
and hostility among our members." An Ontario dairy farmer said, "It stinks."
Probably the best capsule summary of the budget came from B.C. entrepreneur Herb Capozzi who said: "This budget is a cure for which there is no known disease".
In fact, it is a disease for which there is a cure-and that cure is to withdraw the whole devastating document, to withdraw the entire budget, and bring in a new economic plan which reflects the realities of the current conditions in this country, which reflects the realities of crippling interest rates, massive unemployment, eroding consumer confidence, and the shambles of foreclosures and bankruptcies which are strewn over the economic landscape of our country.
The overwhelming hostility toward this budget reflects the two key emotions which it has generated in Canadians. One is fear and the other one is fury. Under the economic mismanagement of the Liberals, Canadians today increasingly fear for their jobs, for their homes, and for their future-both their own and that of their children.
They are faced with the realities of more than one million Canadians unemployed, the realities of unprecedented interest rates, the realities of closing businesses and bankrupt farms, and they worry about whether or not they will have a job next week, next month, or whether they can pay the mortgage.
One Ottawa resident who attended a town meeting summed up this prevailing fear when he told us: "To be honest, I'm scared. I'm scared because I do not know if I can keep a roof over my head. I'm scared because I'm just an ordinary Canadian and this budget considered me to be a wealthy one."
But along with this undercurrent of fear was the outright expression of fury and anger that a government could wilfully introduce so destructive a budget.
There are the people whose jobs have effectively been wiped out by the budget. One man, a life insurance underwriter for 28 years, told us, "I paid my price and I did my thing and now all of a sudden the curtains are falling."
And there is fury that the Liberal government could introduce a budget clearly designed, as one Canadian told us, "to break the pride and will of the Canadian people." This man, a car dealer whose business has just collapsed, told us in a town meeting, "I don't feel good. 1 don't feel like getting up in the morning and going to work. But I feel proud to live in this country which has so much to offer."
Referring to this attempt by the Minister of Finance (Mr. MacEachen) and his officials to break the pride of people in their jobs, in their businesses, in their country, another Canadian told us, "What an insult to a wonderful people and a wonderful country. What an insult this budget is to us."
There was the fury of the Albertan when she learned that the government planned to tax her life insurance before she even received the money, and she asked us, "How can you tax what you haven't received? How can that be?" It can be, if you are the Liberal finance minister.
January 26, 1982

There was the fury of the Albertan engineer who told us that under this budget he could see the economy grinding to a halt. He said, "All my work will be foreign, and I want to stay here at home."
In B.C., the Interior Forest Labour Relations Association told us that Canada is a country with probably the greatest potential for sustained economic growth of any developed country in the world. Yet, said its spokesman, as a country we appear to do our best to stifle this potential.
Town after town, meeting after meeting, the message was unrelentingly the same. Let me summarize some of the themes which came through the western hearings which form a kind of western perspective. It is interesting that they are very similar to those dealt with earlier by my colleague, the hon. member for Etobicoke Centre (Mr. Wilson).
One theme is the damage being done to the economy by the uncertainty introduced in the budget. Since the budget was first introduced by the finance minister on November 12, he has been forced to announce major revisions. Still more are expected in the future.
Many people have been doubly affected; once when they tried to adapt to the changes that were originally introduced and then again to the revisions to the budget.
A small-business man in Vancouver told us how he was unable even to make out his payroll for this month of January since the Department of National Revenue and the income tax branch could not clearly state the nature or the amount of the benefits to be taxed or how other rules should be implemented. He said: "Uncertainty is the most horrible risk you can experience and it can ruin a business because you can't plan your affairs ahead of time."
Today the Minister of Finance asked Canadians to check their paycheques to determine whether their taxes will be lower. A lot of people will not know yet, because their employers cannot figure out the new taxes. For hundreds of thousands of people, unemployment insurance cheques have replaced paycheques.
Another businessman told us how he had been forced to lay off staff before new revisions were introduced because, as he explained, "You can't keep bodies in a holding pattern."
An Ottawa businessman at our town meeting told us how he and his staff had exactly four working weeks to wind up their company's deferred profit-sharing employee-incentive plan and then had four working days to make new changes when the minister revised his budget. He told us, "This continual changing of the rules leads to so much uncertainty that it is much easier to move the whole damned company somewhere else."
Another theme which we heard continually was the budget's blow to the whole spirit of incentives-the incentive to take risks, to create, to reap rewards. But this loss of incentive does not apply only to business; it also applies to our incentive to save money or to provide for our own retirement.
Borrowing money from a credit union to invest in the future through RRSPs was very prevalent among middle-income
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Canadians, we found, because they do not have $2,000 or $3,000 in cash in the early months of the year after paying their Christmas and their winter heating bill.
We were continually told how the budget measures had devastated people's retirement incomes or their retirement plans by changes to the capital gains reserve or to the taxing of retirement income and the ending of income-averaging annuities.
One westerner perceived the budget as a document which gave little incentive to provide for oneself. She added, "We will all see welfare in place of pensions."
There was also the perception that the budget is antiCanadian because it actively permits foreign investors to carry out activities which Canadians cannot. This is particularly worrisome in Alberta which went through an era when Americans and other foreign investors had more ability to invest in Alberta's resources than did Canadians. They do not want to see that repeated. This fear arises from the restrictions on interest deductibility, a measure which no other western country has ever imposed on its citizens. We were continually asked why Canadians should be discriminated against while the new rules favour foreign investors.
Another theme is that this budget is unfair in that the wrong people are being hit. The Alberta Cattle Commission summed up this feeling in its brief when it said, "It appears to us that the budget has chosen the wrong target, the wrong weapon, and the wrong time."
It has chosen the wrong target, because the bulk of the measures in the budget will affect low and middle-income people who will find that their social benefits, such as their health and their dental plans, are now subject to tax.
It has chosen the wrong weapon, because budget measures such as limits to interest deductibility will quite literally starve industries of their lifestream of cash flow.
It has chosen the wrong time, because this restrictive budget, which adds to government revenues at the expense of the ordinary taxpayer, has been introduced in the most unprecedented hard times since the Great Depression.
May 1 call it six o'clock, Mr. Speaker?


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
The Acting Speaker (Mr. Blaker):: Order, please. When the House rose at six o'clock, the hon. member for Vancouver Centre (Miss Carney) had the floor.

January 26, 1982
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Pat Carney: Mr. Speaker, earlier 1 was talking about our Conservative task force visiting 16 cities to talk with people about the budget. 1 was reviewing some of the themes which had been brought to our attention about the budget. Also 1 was reviewing the assessment of the Alberta Cattle Commission that "the budget has chosen the wrong target, the wrong weapon, and at the wrong time." 1 outlined some of the reasons for that in discussing the themes which emerged from our hearings with Canadians. Another theme which emerged was the perception that under the direction of the Minister of Finance the government simply did not know what it was doing when it introduced some of the measures. This perception has been heightened by the forced retreat of the government on such measures as ending the MURB program which, of course, threw thousands of workers off the job and shut down construction sites.
In British Columbia representatives of the Interior Forest Labour Relations Association told us:
The budget is a prime example of the impact of a change in government policy and the failure to understand the impact before implementing the policy.
I think this viewpoint was stated in its simplest terms by the Ontario dairy farmer who said:
The perfect lax system is one which I don't even have to hear about, let alone think about. It is incredible that a family farm has to hire a tax consultant just to stay farming.
A major complaint about the budget regards the retroactivity of its measures. These have been well documented in the House by my colleagues. These measures affect the retirement plans of ordinary Canadians, the investment decisions already made by Canadians, the construction and equipment plans of Canadian companies, just to give some examples.
The Vancouver Real Estate Board appeared before us in Vancouver and made the point that taxpayers who have relied on well-established government policy as set out in the Income Tax Act should be morally entitled to proceed with their plans without being forced into crash programs to rearrange their affairs because of the proposed sweeping changes. Of course, that is what they have been forced to do. It is generally conceded across the western region of the country that the transitional measures proposed by the Minister of Finance do not resolve the problems which he created. The issue of taxation of employee benefits is of particular concern to the west because the booming western economy must be able to attract skilled workers if it is to develop its potential.
One man appearing before our town hall meeting described how his job had taken him to four different centres in the last two years and how adversely the budget measures could affect him in the future, particularly in regard to the proposal to tax housing loans made by employers to compensate employees for the high cost of shelter in the west. The Vancouver Real Estate Board indicated:
The minister proposes in one fell swoop and without warning to use a sledge-hammer to kill an ant. Countless employment arrangements are being disturbed without warning in the name of equity, and the small amount of the tax which would be collected is insignificant in relation to the unhappiness and unrest which have been created.
Labour unions and organized labour groups have attacked the failure of the budget to deal with job creation or to offset rising unemployment which is causing so much misery in the country. In British Columbia, unemployment increased last year by nearly 50 per cent, to 115,000 people. I would have thought this statistic would have been of some interest to my colleagues across the House.
Another recurring theme was the interventionist philosophy which the budget represents. One alarm bell was rung by the British Columbia & Yukon Chamber of Mines which wondered out loud whether the government was deliberately hammering the mining industry particularly by discouraging investment in order to promote an excuse for government participation in a "Mineral-Can" to stimulate the industry. The chamber suggested that the budget paper which outlined an economic development study for the eighties hinted that the government may want more direct involvement in the resource industry than is necessarily prudent or desirable. The chamber of mines pointed out that the experience of the mining industry is that its survival is not dependent upon any direct government action other than deregulation of legislation which has inhibited the industry's ability to be competitive.
This concept that the federal government will set the goals, the federal government will provide the investment vehicle, the federal government will be the operator and manager of job creation and resource exploitation, is particularly repugnant in the west. Of course, one reason is the depressing effects which the national energy policy has had on the petroleum industry in Alberta. The Canadian Petroleum Association told us that in 1981, following the introduction of the National Energy Program, exploration and capital expenditures fell by about $3.5 billion from their forecast level. The CPA indicated that this sharp decline in the level of activity was a reaction to the realities of the pricing and taxation regimes introduced in the National Energy Program in October, 1980. One result was the decline in the industry's cash flow by 35 per cent in 1981 and, as independent operators told us, cash flow is the industry's lifeblood, particularly for smaller companies which have no other profit centres from which to draw their capital requirements.
The negative impact of the NEP was further explained by the Petroleum Services Association of Canada which represents the service and supply sector of the petroleum industry. Its survey showed that 32 of the 85 companies which responded will have to close down if activity does not pick up. It estimated that nearly 8,000 people, or 20 per cent of the work force, will be laid off.
1 should like to explain to hon. members that we are not talking about the oilmen who hang out at the petroleum club or the ranchmen's club in Calgary; we are talking about the people who build airstrips, drilling pads, roads and usually their trucks from the frames up. They are the lifeblood of the entrepreneur of the west. They estimate that 20 per cent of their work force will be laid off, particularly after spring breakup at the conclusion of this winter's drilling program. They described the impact of the slowdown in activity on the
January 26, 1982

western towns of Lloydminster, Grande Prairie, Fort St. John, Dawson Creek and Peace River. They described the auction yards in Edmonton filled with equipment salvaged from bankrupt companies. They told us that the oil and gas industry is taking an incredible bath. They told us that they are losing their trained personnel. They told us that they would lose their equipment and their technology. Who else should be developing the technology in the Mackenzie Basin to work offshore, to work in the Canada lands? Why is the government shutting down this industry and cutting off the lifeblood supply of cash? Those are some of the questions that we were asked when we held our hearings.
In Calgary we also heard from HUDAC, which represents the house builders. They told us there is lots of housing available in Calgary. In fact, there are enough homes to house everyone moving in who can afford to buy a home. In order to qualify at today's interest rates for the average home in Calgary, a buyer must have an income of $45,000 a year. HUDAC estimated that 80 per cent of the apartment starts in Calgary were undertaken through the benefits provided by the MURB legislation and similar tax deferrals.
I think at this point 1 should indicate my intention to move another subamendment, which 1 am certain will meet the requirements of the NDP and of the Chair.
1 move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That the amendment be amended by adding thereto the following:
and that
"(c) One year after the date of coming into force of these measures the government shall review the said measures to ascertain their effect."
May I speak to that, Mr. Speaker?


The Acting Speaker (Mr. Blaker):: Yes.


Pat Carney: Mr. Speaker, 1 think it is clear from my description of the impact of some of these budget measures on the people and the industries in western Canada why we feel that a review after a year should merit the support of the NDP, the House and the Chair. For instance, just dealing with the withdrawal of the MURB legislation, it ensures that Calgary will lose 4,000 apartment and 2,000 rural housing starts. That is a loss of 6,000 units each year, capable of housing 10,000 people. In contrast, the Council of Forest Industries in B.C. told us that the federal government's program to provide 7,500 interest-free loans for some 15,000 units would keep one large plywood mill operating for about two months in B.C. and one large sawmill operating for three months. That is the effect of the government's housing program.
Finally, the major recurring theme throughout our hearings was the consensus that the timing of this budget could not be worse. Inflation, high interest rates, and previous government policies have put dampers on the booming western economy. The many harmful budget measures will only ensure that the recession will deepen.
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In British Columbia, where the depressed economy has been created by market conditions rather than the federal government's interventionist energy policy, the frustration is just as deep as in Alberta. We were told by the interior lumber manufacturers that the Canadian lumber industry is facing the worst market slump in more than 30 years. We were told that at least one fifth of the forestry workers are on temporary or permanent lay-off. We learned that price levels for lumber are the same as they were six years ago, and for many operators they are operating at below cost. There is no clear indication if any recovery might be expected or the extent of the recovery.
If conditions do not improve, some companies will face bankruptcy and more lay-offs will become permanent. That is why the forest industry is concerned about a number of budget measures which will affect its economic viability. These include the 12.5 per cent dividend tax-the minister asked for specifics and we will give him some-the elimination of employee incentives, such as deferred profit-sharing plans for shareholders, capital cost allowances, loans to non-residents and restricted interest expense.
Of particular concern to British Columbians is the proposed taxation of employee benefits, such as room and board in remote camps. The International Woodworkers of America say that this measure alone will add $18 a day to the tax of loggers living in a remote camp, which will make it very difficult to attract skilled workers to remote work sites.
They say that this will force loggers to pay an additional $3,600 in income taxes for the privilege of living in logging camps.
The Vancouver Board of Trade told us that the extra cost to a mining operator for employees earning about $38,000 a year in the north would be about $18,000 in payroll costs to compensate for the housing and transportation subsidies.
Similarly, the measures to tax social benefits, such as extended health and dental care, will encourage people to opt out of these plans, which will create further burdens on the health sector of the economy in the future.
The whole issue of the taxation of employee benefits is expected to generate labour unrest in most heavily unionized provinces in the country. Many union leaders told us that these benefits have already been won by unions at the negotiating table, and their members will likely seek to recover any additional income taxes they are forced to pay from the employers themselves.
This will create a stormy environment for labour negotiations since the large resource industries of B.C. are unable to pass on the costs in their severely declining markets. This is acknowledged by responsible labour leaders in the resource industries. Similar pressures on the public sector are emphasized by John L. Fryer, President of the National Union of Provincial Government Employees.
Mr. Fryer says that as a result of the budget measure to tax social benefits, 95 per cent of the provincial government employees who have some form of health and dental plan

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coverage will experience a reduction in their take-home wages. He said:
For the vast majority of our membership who earn between $15,000 and $24,000 annually there will be no tax reduction whatsoever.
I challenge the Minister of Finance, who keeps insisting that 12 million Canadians will benefit from his budget measures, to dispute Mr. Fryer's assessment.
Mr. Fryer says these facts cannot be denied. He asks:
Where is the equity for provincial government employees whose real wages have already declined in each of the last five years as a direct result of inflation. It is obvious that Mr. MacEachen's concept of fairness and equity differs sharply from those of working people in Canada.
Mr. Fryer admits that he is not a member of our party. However, he joins us in agreeing to the solution to the problems created by the budget. Mr. Fryer told us:
People who pay my salary say that the budget is no damn good. Throw it away and start again.
That is the intent of the amendment before the House today and also of the subamendment, Mr. Speaker.


The Acting Speaker (Mr. Blaker):: May 1 ask the hon. member for Vancouver Centre (Miss Carney) to provide a copy of the subamendment?


Pat Carney: Yes, Mr. Speaker.


The Acting Speaker (Mr. Blaker):: After deep consideration, I find the subamendment to be in order.


Mr. Deans:: Mr. Speaker, if the hon. member has time remaining, would she allow me to ask her a question with regard to her subamendment?


Pat Carney: Yes, Mr. Speaker.


Ian Deans: Mr. Speaker, I would like to be able to support this subamendment, but I am curious about the section that says "shall review the said measures to ascertain their effect." May I ask the hon. member, their effect on what, the banks, the economy, or the people involved? We will then be able to determine whether or not we should be supporting this change.


Some hon. Members:: All of those.


Pat Carney: Mr. Speaker, I would think that it was clear, even to the NDP, that the purpose of this subamendment is to review the effect of these measures introduced by the Liberal government on the people of the country and on the economy of the country.


An hon. Member:: Nothing is obvious to them, Pat.


Hon. Bud Cullen (Sarnia-Lambton):: Mr. Speaker, 1 welcome the opportunity to participate in this particular debate because 1 am satisfied, as are most Canadians who have read the budget and all the supporting documents, that home builders, small-business men, farmers and ordinary Canadians have the most to gain if the thrust of the budget is successful.
The Minister of Finance (Mr. MacEachen) indicated to us that his main concern and purpose in bringing in this particular budget is for it to have an impact on the invidious effects of inflation.


An hon. Member:: I wish 1 had said that.


Jack Sydney George (Bud) Cullen: Interest rates will not come down unless we get inflation under control. Recently, three leading economists appearing on that Conservative program "Canada AM"-


Some hon. Members:: Oh, oh!


Jack Sydney George (Bud) Cullen: -indicated, in answer to a question from Miss Pamela Wallen that the three leading indicators were such as to indicate that the cost of living as reflected in the consumer price index would in fact come down, much to the chagrin of the interviewer and of those who were trying to make a point that the inflation rate would rise even higher than 12.5 per cent. However, these three leading economists selected by the CTV network, not by the Liberal, Conservative or New Democratic parties, were unanimous in their view that the leading indicators indicate that the consumer price index would in fact be coming down; that the media were playing it ail wrong by talking about the four tenths increase in the last quarter as being aberrational.


An hon. Member:: Where else is it going to go? It has gone through the roof.


An hon. Member:: It cannot go any higher.


Sinclair McKnight Stevens: That was the U.S.; tell us about Canada.


An hon. Member:: You are so bad we will give you more time.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I was here this afternoon and listened very intently to the leaders of the two parties opposite, and 1 did not heckle once. 1 do not know what they are afraid of over there. It is one thing to be running a road show across the country telling everybody, "Oh, gee, that is too bad. 1 am sorry to hear that. Yes, we definitely agree with you. We will sure hammer it to them when we get back in the House." However, when they come back, they are not prepared to listen to the other side. They do not want to have a debate; all they can do is heckle.
This afternoon the two leaders of the opposition spoke, the Minister of Finance listened very attentively, but when he got up to speak about some of the inaccuracies in their particular approach, he was, of course, howled and hooted down because they did not want to hear the other side.


An hon. Member:: Poor fellow.


Jack Sydney George (Bud) Cullen: Mr. Speaker, the fact of the matter is that both the Minister of Finance and I can stand a little heckling, but the opposition cannot stand the heat when they are faced with the facts.


Sinclair McKnight Stevens: Well, try us.
January 26, 1982


Jack Sydney George (Bud) Cullen: I do not think the opposition would know the truth if it hit them in the face judging from what 1 have been listening to today.
Now, in keeping with the request of Mr. McDermott and the Canadian Labour Congress I, along with a lot of other Members of Parliament, agreed to meet with members of various labour unions from across Canada to hear about their particular concerns on the budget and the present state of the economy. One individual came to me and said he has been working all this time trying to get a home, trying to get it together, and now the government is taking it away from him. So I said, "well, what is your situation?" He bought a home for $39,000, with a $38,000 mortgage and paid $1,000 down. He did not like the floors in the house-remember that this is his first purchase-and so he went out to a credit union and borrowed more money so that he could put in the kind of floors he wanted.
At that time he was earning the minimum wage, as was his wife. In fact, his wife was pregnant. They had two children, the wife had not worked since giving birth to the baby, and because he was now working for the minimum wage he could not meet his mortgage and credit union commitments. Now if that is the kind of management that individual exercises, it is nice to have a scapegoat like the government to blame for your particular problems.
I was serious today, Mr. Speaker, when I said I listened very attentively because I also did that when 1 was in my riding, and I have also read very carefully letters not only from my constituents but from across Canada. Some of the points made were excellent but, Mr. Speaker, members of the Liberal Party did not wait for that first wave of complaint or criticism which follows every budget. We looked at it ourselves, studied it-


An hon. Member:: And said what a disaster.


Jack Sydney George (Bud) Cullen: -and determined that if we were going to support the budget, we were going to make representations to the Minister of Finance. We did so, and I am proud to say that he showed the flexibility for which he has become famous by agreeing to something like 17 amendments after previously having made three different changes.
The opposition cannot have it both ways. Some of them say it is a massive retreat, there is no budget left, it is decimated. Then others get up and say, oh, they were very minor technical changes. That is why I say you cannot depend on the opposition criticism because we cannot hear and understand from them what side of the coin they want. They cannot have it both ways. They tried that when they were in government. When I say government, they were in government for nine months but in this House for only something like three. Their arrogance is rather incredible since they could not handle the House for any more than three months, and yet they are now going to tell the country how a particular budget should be drafted.
They are afraid to listen. If they were prepared to listen at that time, which they were not, if they were prepared to count at that time, which they were not, they might conceivably still be in power, heaven forbid, and we would have had that worst
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of all possible budgets foisted upon us, the one brought in by the hon. member for St. John's West (Mr. Crosbie). 1 think he is happy today that he does not have that particular responsibility and is not accountable to the Canadian public for that particular mistake.


Michael Holcombe Wilson: Ask your constituents which was better, Bud.


Jack Sydney George (Bud) Cullen: Now, Mr. Speaker, it is my view that the criticism the Minister of Finance is receiving from this side of the House is more constructive and responsible. It is the sort of criticism which is appropriate for every budget, which is why some changes have been made and why some five or six items, if the minister can get the consent of the House, will be referred for further study, items such as insurance and corporate reorganization. I think that came about as a direct result of honest, solid representations, not only from Liberal members but from people who met with and wrote to the Minister of Finance who was prepared to listen.


Michael Holcombe Wilson: Who had to listen.


Jack Sydney George (Bud) Cullen: Well, the hon. member says, "a poorly-thought-out budget in the first place." I think there are some items in the budget that could maybe have been looked at more carefully.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Careful now, Bud.


Jack Sydney George (Bud) Cullen: It was for this reason, Mr. Speaker, that a Liberal group on this side got together and indicated to the minister those areas where we thought changes should be made. The minister was very quick, and properly so, to respond to these responsible and constructive critical comments that were made. However, in listening to the opposition today, I was looking for something that might be helpful, something that we might use to buttress our arguments for further changes we might like to see. All we heard were misrepresentations: Sixty thousand women will no longer qualify for a particular credit. We hear all of these tales of gloom and doom but we do not hear one solid, constructive thought.
We have heard from the NDP about exchange controls, but when they are challenged, it is not really exchange controls they are in favour of; it is a modified form of controls, without identifying what they mean by "modified". That is the old NDP trick, because when you do bring in something of that nature, and there are modifications made, those are not the modifications they were talking about, they would not have done it that way if they had been in power. They always leave that convenient loophole.
I listened very carefully, Mr. Speaker, for something positive from the opposition today which might be used in this particular budget.


Erik Nielsen: Withdraw it.

January 26, 1982
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Jack Sydney George (Bud) Cullen: Remember the "con" in Conservative, because they are endeavouring to do that to the Canadian public, trying to tell them that everything in this budget is bad. It is not, Mr. Speaker, and the thrust of this budget can be good if it has the impact the Minister of Finance wants, that of bringing down the cost of living.


An hon. Member:: Bud for cabinet.


Jack Sydney George (Bud) Cullen: A little louder? Now there is something to which I would like to refer, a change of emphasis, if you will, and that is the method which is used to bring in budgets. I do not care whether that is under a Conservative regime or a Liberal regime. The fact is that the present system is not working properly. It did not work very well for the Conservatives, so they have a little to be humble about, and we can be humble, too.


Some hon. Members:: Oh, oh!


An hon. Member:: You've got a lot to be humble about, Uriah Heep!


Jack Sydney George (Bud) Cullen: What I am suggesting is that the present system is not appropriate. There must be some changes. Frankly, when Walter Gordon brought in his particular budget, he tried to open the door a little bit. He tried to bring a little bit of light on the subject by bringing in people from outside.


Erik Nielsen: He did the respectable thing!


Jack Sydney George (Bud) Cullen: If that particular budget had not been such a bummer, and if individuals had not been subject to criticism that they might have been still on the payroll, that step would have been applauded by any responsible Member of Parliament. There was a minister who was prepared to go outside the civil service to bring in people with some knowledge of the subject and to use them to buttress arguments from civil servants and to help the minister in making up his mind concerning the kinds of programs that he wanted to bring in. 1 think something like that would have been appropriate, and I think it would have been applauded.
However, that particular budget was not a good one, and there was criticism that maybe one or two of the members might still have been on the payroll of the company for which they had worked. Therefore, all of the criticism was directed that way. Then, of course, when the budget turned out to be a bad one, as my history books seems to tell me it was, that whole process was lost. Therefore, there was a kind of a backing off or a kind of a closing in, and ministers of finance became a little wary and got back into this secrecy bit again, believing that everything had to be very secretive.
My next personal involvement with a budget was as parliamentary secretary to a former minister of finance, Mr. Turner. As a parliamentary secretary, one has the privilege of sitting around where these ideas are discussed. On and before the presentation of that particular budget, we were unundated with this concept of secrecy. 1 know what I felt sitting in there
when 1 looked around and members said, "We have never had a budget leak." I knew that I was the only new boy on the team and I thought, "My golly, if it happens, 1 know where the finger of blame will be pointed." Mr. Benson tried the white paper approach, covering a lot of territory. That approach was criticized because it was suggested that everything that was in there was what the government wanted to bring about. As a result of that, rather than having a dialogue about whether we should or should not put something in, with possible ramifications, we got into a political argument which simply destroyed, at least for the time being, the idea of putting something out to the general public for discussion.
All ministers of finance with whom I have dealt, including, I am sure, the hon. member for St. John's West, have shared the idea that there must be a better way to bring in a budget. There must be a better way to have a dialogue before a budget is brought in.


An hon. Member:: Right on.


Jack Sydney George (Bud) Cullen: Because with every budget, no matter which party brings it in, we have a situation where something comes down on budget night, and if we have a discussion afterwards, it is always with the idea that a Damocles Sword is hanging above us, that sooner or later things will take place, no matter what. In my opinion, that is not the right atmosphere for bringing in a budget which can be beneficial to all Canadians. 1 believe that everyone, perhaps with different emphasis, has that in mind concerning the manner in which budgets should work.
The present Minister of Finance used an approach, if you will, an econmic statement which is also a good move, in my view. It is a step in the right direction. I think we must find a way in which we can get the general Canadian public into the discussion about the kind of tax system we want. By that I do not mean right across the board; but we can surely pick the kind of representatives, who are making representations today and who have made representations in other budgets, who will be able to find out the ramifications of particular moves. If we do that, it will be for the benefit of all Canadians. I think it would be an appropriate step or an appropriate move to set up a group which could come up with some ideas about how we might better present budgets in the House of Commons.


An hon. Member:: Have us do it: That's the way!


Jack Sydney George (Bud) Cullen: We had you do it, and it lasted one day, I think.


An hon. Member:: Well, that was your fault.


Jack Sydney George (Bud) Cullen: It was not my fault. I was out earning a living.


An hon. Member:: Why don't you go back to making a living?


Jack Sydney George (Bud) Cullen: I think it was the hon. member for Yukon (Mr. Nielsen) who said to me when I came back that he could not believe it. There are only two ways out of here: to be defeated or to die. I came back, notwithstanding. That is the first piece
January 26, 1982

of advice I received from the hon. member for Yukon when I got back. I feel very much alive and very happy to be a part of this particular party.
However, 1 say to the hon. member, my friend across the way here, that if we do not find a better system, we will lose the confidence of the people, and we will make the House of Commons in effect irrelevant. Federal-provincial conferences, ministers' meetings, regulations, newspaper comments and all kinds of things will take precedence over the House of Commons unless we get the focus back here where it belongs.
For my part, if I were a minister of finance, there would not be an earlier lock-up. The Minister of Finance would deliver his speech on the night of the budget and let all of the Canadian people hear the comment, and then deal with them after. That is only a minor thought, but it seems to me that if we have a budget which is being presented by the Minister of Finance and it is meant for the Canadian public, surely it should not be discussed out here two minutes after the Minister of Finance is on his feet.
1 heard a comment by Dian Cohen. She was almost drooling over the idea that she would be able to get out there and attack this particular budget. Two minutes had not gone by after the minister stood up.


An hon. Member:: She's on your side.


Jack Sydney George (Bud) Cullen: If Dian Cohen is on our side, we are picking the wrong friends.


An hon. Member:: You're learning, Bud.


Arthur Jacob (Jake) Epp: Better take what you can get.


Jack Sydney George (Bud) Cullen: 1 think we have had good representation in some areas of this particular budget. I think the insurance industry, particularly the Canadian life underwriters, have been responsible in the kinds of representations they have made. They are a very well organized group. They know how to approach their policyholders. They have come up with some ideas which warrant consideration. It is my personal view that no one really purchases life insurance for the purpose of saving. If one wants to save money, one will do it in a different way. That is something we can consider, and that is why 1 welcome the minister's indication that this was an area he was prepared to consider.
I would like to refer to capital cost allowance. Here is an area in which there is no reduction in the capital cost allowance, but in the first year we are saying to Canadians, "You cannot have a full capital cost allowance. It will only be a portion of that. But you will stretch it over a longer and more extended period of time." There is nothing wrong with that approach.


Mr. Taylor:: Do you have a farm?


Jack Sydney George (Bud) Cullen: As the minister indicated, and as anyone who has studied this knows, in the United States the capital cost allowance does not commence when one buys a machine. It
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does not commence until one begins using the particular machine. That is when the capital cost allowance begins applying.


Gordon Edward Taylor: That's what happens on farms!


Jack Sydney George (Bud) Cullen: Our system will still allow a capital cost allowance but it will be spread over a longer period of time.


Gordon Edward Taylor: Oh, baloney! Did you have a farm? Did you have a farm?


Jack Sydney George (Bud) Cullen: If the hon. member would listen for 30 seconds and let me finish my point, which he has not had the courtesy to do-


Gordon Edward Taylor: Tell the farmer that when he is buying a combine!


Jack Sydney George (Bud) Cullen: One cannot deal with a dinosaur in the House of Commons. 1 guess that is the way it works. 1 will just carry on and ignore him.
My view on the capital cost allowance is that it may impact on people who are leasing equipment.


Gordon Edward Taylor: Oh, baloney!


Jack Sydney George (Bud) Cullen: Because here is an area where an individual buys a car at the beginning of the year or leases it through the whole year, and there is a capital cost allowance feature in the first year which may be appropriate, and 1 think is something we should be considering.


Gordon Edward Taylor: You fellows tell your farmers that!


An hon. Member:: Easy does it, Gordon. Watch your blood pressure.


Gordon Edward Taylor: Tell your farmers what he is saying!


Jack Sydney George (Bud) Cullen: I think the hon. member must have worked in a big field because we can hear him all the way across the back forty. There was a time when we understood that we would be courteous in the House of Commons and at least listen to what another individual had to say; but he is a new hon. member in the House, and I guess he has not learned his rules yet.


Sinclair McKnight Stevens: You should listen to him. He's right, Bud. Listen to him.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I understand that under the rules, and they are still being debated here, I would have approximately one-half hour in which to speak; but 1 know other hon. members want to make comments. However, I feel very strongly that there must be a better way to present a budget, one in which there is more input prior to the budget coming in than after the budget is already introduced. It is apparent to me as a person who loves this place, the House of Commons, that, as with every other single piece of legislation, a minister must bring that piece of legislation to caucus and get it

January 26, 1982
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through that caucus; and if he or she cannot get it through the caucus, that particular legislation does not see the light of day. However, if it gets into the House, and we are defeated on a section, or a part of it, it does not result in the fall of the government.
What is mystifying to me is that when the budget is introduced at eight o'clock in the House of Commons on a Thursday night or any other night, it is only at that time that the members of the party in power have the full information as to what is in the budget, yet we are expected to support that budget. When we find that we cannot, we move as quickly as we can to make whatever changes we are able to bring about. What a foolish way to do something. It is a bill that, if it were defeated in the House, could result in an election.
There should be more input and more discussion among Members of Parliament. 1 do not care which party is in power, it is not a good system for introducing a budget. I believe it should be changed. That is one point 1 wanted to make tonight.
The other point is that we are still, and this is an ongoing process, meeting with our constituents, with constituents and representative groups in Ottawa, in an endeavour to get as much information as we can in order that we can talk in a knowledgeable way about the panopoly of issues covered in this budget. That is a good and appropriate process.
I believe we would do a better job if there were a better way of introducing a budget so that when it comes into the House, if it does not have unanimous approval, at least we could debate the issues with some degree of knowledge or information and with some degree of dedication to a particular process.
I know that others want to speak. I understand the bells will ring in about an hour, so 1 will leave it at that. Maybe the member who has been shouting will make a speech and tell us how great this budget is.
[ Translation]


Roch La Salle: Mr. Speaker, 1 have a few comments to make, and first of all, I want to tell the hon. member for Sarnia-Lambton (Mr. Cullen) that I was very interested in what he had to say. 1 have the impression that his cabinet experience has been beneficial. This evening he has been giving us advice on how to present budgets, and 1 feel he would have no trouble stepping into the shoes of the Minister of Finance (Mr. MacEachen). We would certainly have no objection.
Mr. Speaker, 1 would like to make a few comments. A lot of statistics have been quoted on both sides of the House, but the fact remains that this afternoon the Minister of Finance solemnly stated that the situation was very serious. He did not, of course, go on to wonder who was responsible. Perhaps the Canadian people and perhaps the House should try to find out who is to blame for this disaster. And indeed it is one. We have
heard thousands of Canadians and hundreds of organizations discuss the absolutely pitiful performance of this government with respect to the economy. Again, we are being told about long-term projections. We are being told about government proposals and commitments, which is an attempt to have us believe they are willing to clean up their act which, to my knowledge, they have not done for 15 years.
How do they expect the Canadian people to believe projections which for 15 years have proved to be utterly wrong? And the Minister of Finance is talking about tax rebates as if he had managed to find some nice presents for Canadian taxpayers, but not a word about indirect taxes and increased energy costs which are making all these rebates cost so much more. In any case, the Minister of State for Finance (Mr. Bussieres) may have had the audacity to say that the member speaking to you now does not know what he is talking about, but at least we do not indulge in hypocrisy, Mr. Speaker. Hypocrisy is not on this side of the House. I feel this government should be made to show its true colours and that its actions should be made clear to all Canadians. At a time like this, Canadians are beginning to realize the kind of hypocritical policies this government has been churning out for 15 years, Mr. Speaker. There is a saying: Beware of Greeks bearing gifts, and Canadians have just about had enough. We are aware of this, Mr. Speaker, in my own riding as well as anywhere else in Canada. In my own province, the economy's performance has been pitiful during the 15 years this government has been in power, and the majority of government members are well aware of this. They feel uncomfortable and I would say depressed when faced with questions put to them by certain reporters. Last night, Mr. Speaker, I saw four Quebec Liberal members on television who had no idea what the solution should be.
What suggestion could they make to the House of Commons to get Canada clear of this fix, of this disaster of this abyss in which the government has hurled us? I will not mention any Liberal members this evening. I will come back to that later. These Liberals have been most outspoken with me. I wish to point it out to the Minister of State for Finance that Quebecers are concerned. They are dissatisfied with the behaviour of the Minister of Finance and would have paid a high price to have him stay in Toronto another three months or even another three years. Liberal members do not hesitate to say that they are unhappy about their present situation. They are unable to answer the questions asked by their constituents. What will the government do? We do no longer know. The government is exhausted, empty and devoid of ideas. This government is asking Canadians to remain confident. No way, Mr. Speaker, since more especially during the past two years this government has shown gross carelessness in the economic field. During the past two years, this government has been playing petty politics in its dealings with the provinces, especially in the field of energy.
January 26, 1982

This government could have brought about the oil agreement two years ago and given back some much needed strength to our economy and bolstered the Canadian dollar on world markets. This government preferred playing petty politics, through the minister concerned, the Minister of Energy, Mines and Resources (Mr. Lalonde), and confronting a government which could also justify its position. We must now pay very dearly for all this. This government scrapped the private sector policy that we, on this side of the House, had developed for Canadian businessmen. This government refused to support an interest rate policy that would have stimulated the construction industry which is the mainspring of our economy. And now, these people who defeated us because our proposal for home owners did not directly affect the tenants-


An hon. Member:: Ignorant!


Roch La Salle: Ignorant? Which side was the most ignorant, when we knew quite well that a policy favouring home owners would help to maintain normal rental costs? Because the government refused to grant a preferential interest rate to such an essential sector of our economy as the construction industry, we now have major problems and thousands of unemployed people in Canada. And these people say that we are playing petty politics when thousands of Canadians urge us to fight against this government. This is what Canadians are asking us to do today, Mr. Speaker.
The Minister of Finance says that he is flexible because he has been forced to back up on 18 points. This is gross incompetence, Mr. Speaker! I was on an open line program this morning with a Liberal Member of Parliament. I shall not give his name yet. I bet that you also know who he is, but you will not mention his name either. He admitted that the Liberal members had not been informed of the projections made by the Minister of Finance. They knew nothing about what the budget would contain. Is it possible that these government members were not at least aware of the main thrust of this budget? He confessed to it on an open line program on CKVL, Mr. Speaker, if this can help you identify this hon. member. This is impossible. These same people are now saying that they have succeeded in convincing the Minister of Finance to reverse his decisions. Mr. Speaker, this so-called flexibility is simply unacceptable incompetence which reflects on the whole Liberal Party. In the last two days I have noticed that the Prime Minister seems a bit out of sorts. He is not happy with his Minister of Finance. In view of the opposition that is felt everywhere, of the pressures which are exerted and of the comments which are heard from all sectors, I wonder how the government members can still honestly support, endorse and encourage this Minister of Finance. Only 20 of them were here to listen to his speech this afternoon. That is very few! Only 20! I understand that the great majority preferred to remain in
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their offices and I wonder if these same people will not remain in their offices when we vote this evening, and I believe that it would be the best thing they could do for Canada.


An hon. Member:: Do not count on it!


Roch La Salle: 1 believe that it is the hon. member for Saint-Jacques (Mr. Guilbault) who said that I should not count on it.
I know them, Mr. Speaker. Even if it hurts them, even if this is against the interests of their constituents, as they have been doing for the past 15 years, they will behave like sheep and blindly support the Minister of Finance whom they are not particularly fond of, something 1 can quite easily understand. But the example is a good demonstration of this and could not lie, in my opinion. This afternoon I merely asked the Minister of State responsible for finance, who was bragging about the fact that his government had taken steps to streamline the footwear industry-basically, that is a good thing, and we were quite happy about that. The Minister of State responsible for finance did not allow me to finish-


An hon. Member:: Are you not pleased now?


Roch La Salle: Of course we are pleased to see Canada promote the Canadian footwear industry. 1 simply and honestly asked the minister to tell us why-instead of calling us ignorant-I repeat that 1 have never been guilty of such hypocrisy-why it had suddenly decided to revive this industry, after waiting so long that jobs were lost by the thousands in Quebec. But the Minister of State would not answer. I was not asking anything else, Mr. Speaker. And the Minister of State is perfectly aware that we have indeed lost jobs by the thousands not only in Quebec, but in other parts of Canada as well, in the footwear industry. Jobs by the thousands! Because the government has procrastinated. It has waited so long that it will cost more jobs, especially in the province of Quebec. I remember that the hon. member for Drummond (Mr. Pinard) had given the Minister of Industry, Trade and Commerce a tongue lashing in public and, in my opinion, with good reason. And there is another member, I believe it is the hon. member for Shefford (Mr. Lapierre), although 1 am not sure-I believe he too is concerned with the problems of the footwear industry. We certainly are also affected by those problems in my riding.
The lack of action on the part of the government is costing us a pretty penny in that sector, and there are also others that are suffering. The Minister of State for Finance gave us a course in economics today. I had a feeling I was hearing again the speech the former minister of finance and present Minister of Justice made seven or eight years ago. He told us then about the same things. Still, the present minister did a better job of it because when the former minister of finance, now Minister of Justice, gave us that speech, I had a feeling he understood absolutely nothing about what he was reading. Today, the Minister of State for Finance gave me the impression he understood what he was reading. He tried to show us that two

January 26, 1982
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and two are four, and four and four are eight. I am convinced several members on this side are already aware of those mathematics.
But the Minister of State for Finance did not tell us that with projections over a five-year period, because that is what we are given here, projections over two, three or five years- the Minister of State seems to have forgotten it. We well remember that the last two or three ministers of finance, including the one I see before me and this will not be the first time we have been given projections that prove wrong later on, and not only false but so far from reality that they border on scandal, on hypocrisy; they even smack of lies. Of course, I am not accusing anyone of having lied to us deliberately. They did not know what they were saying: May God forgive them! But obviously we are dealing here with false projections. We are constantly told about the hundreds, the thousands of jobs that have been created right and left. But I say to you that in 1968-1 believe we came to this House at the same time- there were 300,000 unemployed, while there are now a million of them. It is a fact that over the last six months 235,000 jobs have been lost in the manufacturing sector, and 100,000 others will be lost according to the projections made by a very responsible association. I ask this government to come up with something positive, an emergency plan. Of course, they will ask whether we want the deficit to be reduced, inflation to be wrestled down. For the past ten years I have been hearing about wrestling down inflation. Unemployment is created to fight inflation, and inflation is created to fight unemployment. We are having both anyway.


Mr. Guilbault:: Read your sentence in Hansard tomorrow.


Roch La Salle: I submit we have both. Do we not? Of course, we do. And this is the result of projections as brilliant as those the hon. member for Saint-Jacques (Mr. Guilbault) should have made, but I am not aware he has made any for quite some time. Today we heard the Minister of Finance. I think we are in a serious predicament, a catastrophic one. There will be 100,000 jobs lost and the government gives us nothing. There is nothing in the budget to ensure that in the short term our economy will be redirected and strenghtened. The Minister of Finance confirmed this yesterday in Toronto. Such proposals will result in increased unemployment, to wrestle down the inflation we never could control these last ten years. Can we afford in Quebec to lose 100,000 jobs at this point? Should we not reassess our priorities and make political choices based on our moral and political responsibilities? On the humane level, Mr. Speaker, we have a hard-hearted government. It is willing to add to the misery of those who already are suffering and to add thousands worse to their numbers. This is unbelievable and unacceptable, Mr. Speaker. All categories are affected: farmers are unhappy, businessmen are dissatisfied, workers are penalized, the young are worried, and rightly so. And these people across the aisle are asking us to trust them. The Minister of Finance and the Minister of State
for Finance would have us believe there is a solution in the budget. Nothing could be further from the truth. They say we are making misleading statements. I am sorry, but I would like the government to prove the opposite right now.
I see on the government side, Mr. Speaker, hon. members from a province faced with those problems. I have in front of me members from Quebec who know perfectly well the budget does not meet the expectations of Quebecers. In front of me I have 74 members who, as usual, will not have the guts to face up to their basic responsibilities and their duties as Members of Parliament. And this is not the first time. I may be lucky to be the only one, but it is Quebec's tough luck to have 74 members on the other side. That is Quebec's tragedy, to have six dozen members of Parliament who do not meet their commitment and their promise.
Before concluding, 1 would like to recall that two years ago the same people were supporting their great leader who was saying in a short commercial: With an 18-cent increase in the price of gas, farmers cannot even afford to crank their tractors. In a second commercial aimed at another group, the Prime Minister (Mr. Trudeau) repeated this a hundred times during that campaign. With the 18-cent tax on gas, fishermen cannot afford to go where the fish are. So where are the fish today? How are the fishermen and the farmers doing? You people from Quebec and from ridings in other provinces, how are your farmers doing? At least we were honest enough to say exactly how much it would cost, but the previous government did not have the courage to apply those increases to meet the needs and the objectives we had set for ourselves, namely, self-sufficiency by 1990. You have failed there. Mr. Speaker, 1 would have many other comments to make. If they had honoured the agreement we had already concluded with Alberta, Canada would not be in the position it is in today. I conclude, Mr. Speaker. This is a catastrophic budget. This government has led us to the brink. We are in an economic slump the likes of which Canada has never seen before, thanks to the support of the Quebec Liberal members. 1 would urge those six dozen members, at least one dozen, to grasp the significance of their responsibilities and to act in such a way that this minister will not go on doing so much harm to Canadians and Quebecers.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, it gives me a great deal of pleasure to speak in favour of the motion before us tonight. The motion refers to the budget of November 12 and its amendment on December 18 and suggests that the budget should be withdrawn and replaced by a new budget. We in the New Democratic Party certainly support that and would look forward to a budget which would deal effectively with some of the economic challenges facing this country instead of the rather limp wrist budget we have before us presently.
January 26, 1982

I have also had an opportunity to peruse the amendment to the amendment which the Tories have put forward. We find it rather unnecessary, assuming that legislation is evaluated on a continuing basis. However, if in fact the Tories would like us to review it annually, we are quite in favour of the suggestion that profits taxes imposed on Canada's chartered banks should be restored to their marginal tax rate at the 1970 level. I think the point is that if this is what is required, we like the idea of this evaluation because we feel that perhaps after one year we will find that the excessive profits of 1970 were just that-they were excessive-and that they should be taxed even further. Or, perhaps the rate of 1970 will be recognized as an obscene and excessive rate. Perhaps it should be reduced even further, so we are certainly in favour of reviewing that at the end of the year.
As I watched the Minister of Finance (Mr. MacEachen) in the House today and as I listened to his statements on television the last time, I was reminded of a French monarch of the fourteenth century who was also out of touch with his country and countrymen. When approached and asked what he would do about additional hospital beds which were required throughout France, his response was, "Perhaps we should ask patients to double up in the beds." That was his "progressive" response, and 1 suggest that what we are hearing from the Minister of Finance today is similar.


Erik Nielsen: There is no more room.


M. Riis:: With whom did the Minister of Finance consult regarding this budget? Who supports this budget? Opposition members certainly do not. The provincial governments and local governments certainly do not. Industry, business, labour, students, the elderly and home owners certainly do not. Even a number of backbenchers in the Liberal party have indicated on a number of occasions that they do not support it. Who on earth does? I think it has become clear that there is probably only one person who supports this budget. It was brought in without the knowledge of his colleagues. Yet, in spite of overwhelming opposition, he continues to drive ahead like a lemming leaping into the sea. He gives the impression that the people of Canada are wrong and that he alone is right.
This reminds me of another man who sits quite near him, namely, the Prime Minister (Mr. Trudeau). When the Prime Minister was out in British Columbia recently, he made it very clear that as the Prime Minister of the country he felt that British Columbia does not understand Canada. I agree with him. We in British Columbia do not understand that Canada we see today, a Canada of 1.5 million unemployed, a Canada where business bankruptcies have increased by 22 per cent over last year, where farm bankruptcies are up 18 per cent and where in the interval between August and December of last year 235,000 people lost their jobs. As we heard earlier today, the Canadian Manufacturers' Association says that another 100,000 people will lose their jobs. We do not understand that Canada. We do not understand a Canada where there are all kinds of discouragements to investment and expansion, a Canada which has policies now to strangle growth, develop-
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ment and progress, a country where productivity is decreasing, a country where Canadians see their purchasing power in decline year after year, where there is a deterioration in the distribution of income among Canadians and a country which has a current account balance which has fallen to record deficit levels. No, we do not understand that Canada.
The Economic Council of Canada outlined Five goals for our Canadian economy. Those Five goals in a sense provide a signal to the government. One goal is to bring about full employment. The council said that unemployment should not be over 3 per cent of the labour force. Another goal is price stability. Prices should rise at most by 2 per cent a year. With respect to economic growth, the council said that real production should increase by 5.5 per cent a year. We should strive for a viable balance of payments, and we should attempt an equitable distribution of rising incomes. Those are laudable goals. Unfortunately, those goals were set by the Economic Council of Canada back in 1964. Eighteen years of federal Liberal policy initiatives have seen none of these goals realized. None of these goals have even begun to appear to be fulfilled. That is the kind of success there has been. That is the kind of budgeting success we have seen for 18 consecutive years.
Oh, we have a great deal of gloom about us. There is a great deal to be disappointed about, but one sector is doing exceptionally well, and that is the chartered banks of Canada. In the fourth quarter of 1981, the profits of the chartered banks of Canada varied from 42 per cent higher than the previous year up to a high of 114 per cent. One has to ask-and 1 am certain Canadians are asking-why it is that the Tories are mute on this particular point. Why is it that the finance critic for the Tories never stands up and draws our attention to profits which must be recognized as being obscenely high? Why is it we never hear anything about this from hon. members opposite? One could speculate on a number of reasons. I wonder if this has anything to do with the fact that among those who made political contributions to the Liberals and the Conservatives, each of the five major banks in Canada contributed $50,000 last year. Each of the five major banks contributed $50,000 to the Liberal coffers and to the Conservative coffers. I wonder if that is one reason why we hear little or no comment from the Tories or the Liberals on this question.


Mr. Crosby:: Have you checked Royal Bank stock on the stock market? If it is so great, why don't you buy it? Put your money where your mouth is.
M0)


Nelson Andrew Riis: While government spent $72 million on advertising the budget and the advantages of the budget, some of us had a different idea. We in the NDP decided that a task force on the economy and the budget would be appropriate. 1 am pleased to see that a few weeks later the Tories followed suit; we were pleased to provide the example. Our task force visited 11 different cities; we received 120 different briefs representing a wide spectrum of Canadian society and representing all of the critical economic sectors of our economy.

January 26, 1982
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1 should like to indicate why we did that, Mr. Speaker. It allowed us to hear, first-hand, from people throughout the country who were knowledgeable about their particular sector of the economy or about a particular region of Canada. They commented on the budget and the way that they felt the government was handling the economic challenges that faced it. Canadians were provided with a forum in which to speak out on the budget and to let parliamentarians know how they felt about the budget brought in on November 12.
Canadians were enabled to present positive solutions to some of our economic problems and positive, credible, proven suggestions and alternatives to some of the economic bottlenecks that face Canadians today. The people of Canada knew that at least some parliamentarians were prepared to listen to them. What became very obvious was the lack of any Liberal task force on the economy or the budget. Where were the Liberals? Why were they not out providing an opportunity for normal, everyday Canadians to present their views on the budget and on the economy? The Liberals were noticeable by their absence.
I should like to quote from a number of briefs that we received, Mr. Speaker. The Council of Forest Industries of B.C. indicated very clearly that all of their expansions had been placed on the back burner. As a result of this budget and considering the economic climate, $200 million worth of expansion projects will have to wait until there is some indication of economic leadership being provided. The council stated that 15,000 forest workers had been laid off in the last number of months and not only because of the slump in the lumber markets in the United States. We must recognize that 25 per cent of British Columbia lumber is for the domestic market and 85 per cent of the plywood is for the domestic market. It is in the plywood industry that the major lay-offs have occurred.
HUDAC of Canada says that the government has killed the housing industry. Indeed, it maintained that we have a housing crisis. It mocked the government's efforts to provide a subsidy for rental housing. There was a generous offer to provide 25,000 rental units. Perhaps that would be enough for the city of Vancouver, but it is not even a drop in the bucket compared to the housing demand across the country.
The Canadian organization of small business suggested that the present high interest rate policy is reducing the number of small businesses and believes that the only economic growth that is occurring in Canada is the merging of large corporations at the expense of the small companies.
The Energy Services Association of Alberta indicated that the federal government had no idea of the realities of western Canadian economic development. Its spokesman told us that they never see Liberals in western Canada unless they drop in for a quick press statement or a quick ribbon cutting and dash out again. We were told of small resource towns in northern and central Alberta that just a few months previously had been boom towns and now are virtual ghost towns.
The Saskatchewan Federation of Agriculture stated that the number of farm bankruptcies will inevitably continue to increase. At a time when Canada should be expanding its
agricultural potential, instead, the farming community finds itself in a struggle for survival.
The City of Thunder Bay outlined to our task force the situation where nearly 1,000 employees in one firm had been laid off in the last few weeks due to the lack of any long-term planning for the country or the province.
The Council of Student Unions from Memorial University in St. John's indicated that there is no incentive for young people to continue post-secondary education. There are few jobs in their own province and fewer jobs beyond Newfoundland. Again, there is little incentive to continue.
It became apparent from the task force hearings that an aura of uncertainty prevails across Canada today. There is an atmosphere of declining confidence in our future. Recent Gallup polls have supported the view of some people that Canadians feel that things are going to get worse and that our economy will not improve in the near future. There is almost an atmosphere of disillusionment about the future, an atmosphere of distress, bordering upon fear. There is a recognition of the unfairness of this particular budget which is leading to a level of frustration that I do not think has ever been demonstrated before in Canada.
Time and time again at the task force hearings individuals who are used to public speaking would be so filled with amazement, anger and frustration that half way through their presentation they would be shaking and they spoke of the economy and the budget. They would have to stop to collect their wits because of the level of their anger and frustration which sometimes bordered on outrage.
There is no question that today our country is well on the way to an economic recession. All the indications are that this will continue for some time. Canadians are suffering; Canadian spirits have been dashed by increasing unemployment.
In the submissions made by the Tories so far today, they have not said what they would do about the situation. Indeed, I suggest it is clear that the Tory record shows that they support Governor Bouey and his high interest rate policy.


John Edward Broadbent: They reappointed him.


Nelson Andrew Riis: They reappointed Governor Bouey. The Conservative Party supports more cuts.
As was indicated by the hon. member for Oshawa (Mr. Broadbent), the NDP suggests that this is a time to stimulate the economy. It is not a time to spend more but to invest in the future of the country-in the infrastructure which is necessary to encourage the growth potential in western Canada in particular.
I recall with interest the remarks made on Wednesday, December 2, 1981, by the Parliamentary Secretary to the Minister of Finance (Mr. Evans) when he said that the Liberal government has no intention of trying to stimulate the Canadian economy, even if the current recession lasts until next summer. It has no interest in stimulating the economy, but we have, Mr. Speaker, because we recognize that inflation is a serious problem that plagues us.
January 26, 1982

There are two ways to counter inflation. One is to strangle the economy and drive it to its knees. That is essentially what this government and the Tories propose, but we have a different suggestion. We would provide the stimulus and provide the initiative needed to develop productivity in this country. I do not suppose there is another country in the world that has the economic potential of Canada. We have the ability to create a much more productive economy than we have at the present time. That is our proposal, Mr. Speaker.
Let it never be said that we have stood in the House of Commons and have not come up with very positive suggestions as to ways and means around our economic difficulties. Productivity is our way to fight inflation. Surely when we look at 1.5 million people unemployed, we realize that that in itself is fuel for inflation, with individuals draining the economy or draining the finances of our government and providing little productivity. Surely that is the inflationary process which must be fought and fought well.
Let me look at what the government is doing in terms of encouraging productivity. It is maintaining high interest rates in spite of the action being taken by Japan and a number of western European countries which, quite to the contrary, are saying that now is the time to make some changes and to stimulate their economies back to higher levels of productivity. The Minister of Finance taxes living-out allowances. How will this encourage people to go to the resource projects of western Canada and in the far north? Is that an encouragement or incentive for tradesmen to move up into the resource camps or for those in the forest industry to move up into the logging camps and be taxed an extra $18, $25 or in the far north perhaps closer to $50 per day, on income which they do not receive? Is that the kind of incentive which improves productivity?
We notice with interest that the government eliminated the development in the Small Business Development Bond program. Now in a sense it is just a bit of intensive care for ailing businesses and farmers, but it does little to encourage development and expansion. We know that $50 million went into the Farm Credit Corporation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: The President of the Treasury Board (Mr. Johnston).


Some hon. Members:: Oh, oh!


Hon. Donald J. Johnston (President of the Treasury Board):: Mr. Speaker, I would hope-


Bob Rae: Let us hear it for the loopholes.
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Donald James Johnston: I hope that I am able to have the attention of the House.


An hon. Member:: Only two glasses of water! Is that water in those glasses?


Donald James Johnston: I am sure I will have some difficulty with my friends in the NDP, but in any event I hope I have a certain amount of quiet and calm to make a sensible deliberation. 1, for my part, have listened with great interest to a series of speakers.


Mr. Murphy:: You were not here.


Donald James Johnston: I know I was not here, but I listened very intently in my office this afternoon to a series of speakers criticize the budget. I may have missed something, but I would ask my colleagues whether they heard any constructive criticism. I do not recall hearing any constructive criticism.


An hon. Member:: You have a bad memory.


Donald James Johnston: I do not recall hearing any suggestions as to how the income tax system might be improved. The bombast and sometimes purple rhetoric mixed with the odd truth seems to have pretty much dominated the discussions and debate in the House this afternoon.
We have heard a great deal today about the Conservative touring budget committee. 1 gather that it listened to the complaints of taxpayers across Canada, but nothing we have heard indicates that those members learned anything from this experience. If there are any lessons to be learned, they are certainly keeping them to themselves. I must say that that is not true of my friends in the NDP. They have been consistent; they believe in throwing money at problems. The usual bin full of money and a big shovel seems to be the cornerstone of their policies.
Before I talk about some of the microaspects of the budget-


Bob Rae: You are the microaspect.


Donald James Johnston: -particularly the amendments-


Bob Rae: They do not come any smaller than you, Don.


Donald James Johnston: I am sorry that more of that wit is not used in developing policies. I am referring particularly to the amendments tabled on December 18-and 1 will come to those-but I should like to address what some might refer to as the big picture.


John Edward Broadbent: Leave Allan MacEachen out of it.


Bob Rae: Is that the one with Roy Rogers and Dale Evans?


John Edward Broadbent: Is it on a 75 millimetre screen?


Donald James Johnston: I am sorry if I guffaw occasionally, but humour is about all they have to offer. The macroeconomic aspects of the budget appear to have either been forgotten or

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largely ignored in the wake of specific criticisms by specific groups on specific provisions of the budget which affect them. Mr. Speaker will recall from the budget speech of the Minister of Finance (Mr. MacEachen) that the budget had as its principal theme the principle of restraint.
[ Translation]
Mr. Speaker, this theme reflects the need for restraint, and 1 would like to quote the Minister of Finance who said in his budget speech before the House on November 12, and 1 quote:
The first is the need for restraint on the part of the government and restraint on the part of all Canadians. For our part, I believe we must reduce our deficit and our borrowing requirements substantially-even more than I proposed a year ago. This will take pressures off credit markets, ease interest rates and provide room for needy borrowers. The control of the money supply by the Bank of Canada is an essential element in our strategy to fight inflation, but it has to be supported by greater fiscal restraint.
While the increase in our energy revenues will make an important contribution to this objective, I have had to seek additional revenues from the personal and corporate tax, although there is tax relief or no tax increase in this budget for the vast majority of Canadians.
This is a point that should not be forgotten, Mr. Speaker.
Most fundamentally, we are committed to restraining the growth of our spending over the next few years to less than the growth of the economy as a whole while still exercising our responsibilities for leadership and for caring.

In the days, weeks and now months following the budget, I have yet to meet one businessman who disagrees with the macroeconomic thrust of the budget.


Mr. Fulton:: Come to Winnipeg.


Donald James Johnston: Unless the problem of inflation is tackled as indicated in the speech of the Minsiter of Finance on November 12, unless inflation is controlled, any budget would be meaningless.
I am very pleased to see that the financial critic of the Conservative Party is present in the House this evening, the hon. member for Etobicoke Centre (Mr. Wilson). In fact, he reinforced the validity of that position in his speech this afternoon, albeit inadvertently, namely, the objective to control inflation. He told the House this afternoon the story of a businessman he met during his budget committee travels throughout the country, to which I referred a moment ago and about which we have heard so much in the House today. The businessman allegedly said to the hon. member for Etobicoke Centre that he was not concerned about the budget, that he had no income tax to pay, that apparently interest rates had brought his building business to a stop, and that he was losing money.
The very point of the macroeconomic stance of the budget, namely, to control inflation and to reduce interest rates, is the thrust of the budget. If inflation is controlled, interest rates will fall. I suggest to the hon. member for Etobicoke Centre that his friend, the businessman, will then have taxable income and be glad of it. Of course, if he is like the rest of us, once he
has taxable income he will start complaining about the taxes he will have to pay.
In the absence of this macroeconomic stance, which I have described very briefly and which is so well described in the budget speech, more and more businessmen are bound to become unconcerned about taxes as they close their doors and join the list of the unemployed, and that will be solely because of inflation. Inflation is the villain that is being stalked by this budget.


Some hon. Members:: Oh, oh!


John Edward Broadbent: Do not smile now.


An hon. Member:: When did it happen?


Donald James Johnston: It is hard to resist smiling at my friends in the NDP, Mr. Speaker. But it is even easier for me to laugh at their policies.


Some hon. Members:: Oh, oh!


Donald James Johnston: 1 ask you what sensible, thoughtful Canadian-


John Edward Broadbent: Would vote Liberal?


Donald James Johnston: -present company on that side of the House excluded-could conceivably disagree with that macroeconomic stance in today's economic plight.


Bob Rae: Let's hear it from the heart.


Donald James Johnston: Let me talk for a moment about the tax measures themselves. Again, in a macro sense-


Some hon. Members:: Oh, oh!


Donald James Johnston: As I stated in fact during my earlier speech on the budget on November 16, I am supportive of the over-all thrust of the tax measures in that macro sense, particularly the lowering of marginal rates to not more than 50 per cent.


An hon. Member:: Especially for the rich.


Donald James Johnston: That, for me-


Bob Rae: Yes, for you.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


John Edward Broadbent: Tell us about those Liberals, Don.


Donald James Johnston: Mr. Speaker, if these jackals will hear me out, I will state again that there is much support, even probably from socialist economists.


An hon. Member:: Who?


An hon. Member:: I didn't know there were any.
January 26, 1982


Donald James Johnston: -for the view that a maximum rate of 50 per cent will have the effect of reducing efforts by taxpayers, as it has in the United States for many years, to circumvent the law and to take advantage of the wide variety of tax avoidance devices.
I also believe in the reduction of those tax shelters which have been part of our system for many years, the simplification of the statute, and 1 might say that in taking that position I am in no way critical of Canadians who have used tax shelters in the past and continue to use them-


An hon. Member:: You used to advise people about them.


Donald James Johnston: -or to exploit what my friend from Broad-view-Greenwood (Mr. Rae) refers to as loopholes. This is not a question of morality.


An hon. Member:: It is immorality.


Donald James Johnston: But there is a very real question of productivity. 1 am talking about productivity of brains and productivity of money. Because of the high marginal rates that we have had in this country combined with specific tax shelters and combined with the loopholes, as defined by my friend from Broadview-Greenwood, too many intelligent Canadians have devoted their energies and creativity to paper transactions, paper transactions which are designed to avoid taxation rather than engaging in productive transactions which are there to produce wealth and produce jobs. That is part of the thrust of this budget, and a very important part. I suggest to you that the maximum rate of 50 per cent will go a long way to achieving that objective.
I might say that 1 have had some experience in the area of taxation in the past.


John Edward Broadbent: Tell us about the Prime Minister.


Donald James Johnston: Some, I might say, have even accused me of selling out, as they say, because I have not, they claim, defended principles which I am alleged to have defended in the past. I deny that categorically, Mr. Speaker. 1 have always been supportive of a more comprehensive tax base, simplification of the law, improvement of its administration and, as 1 said, a reduction of the marginal rate to 50 per cent, with a number of other matters. I will certainly continue to support those principles and improvements within the over-all framework to approach some day the kind of system that was described by the Carter commission, the system the commissioners concluded that Canadians want. I would like to quote from the commissioners' report as follows:
A tax system can be judged from different points of view. Is the system fair?


John Edward Broadbent: Your government gutted that report.


Donald James Johnston: 1 shall continue:
Does it contribute as much as possible to the growth and stability of the economy? Are the rights and liberty of the individual protected? Does it help strengthen the federation? These questions reflect not only the many facets of taxation but also what we believe to be the principal objectives that Canadians wish to realize through their tax system.
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An hon. Member:: What did Edgar Benson do with that anyway?


Donald James Johnston: Listen carefully, my friends.


John Edward Broadbent: Your party gutted that.


Bob Rae: Are you reading from Xavier Hollander or somebody else?


Donald James Johnston: The paragraph concludes:
They want equity, more goods and services, full employment without inflation, a free society and a strong, independent federation.
That is the kind of system that Canadians want. 1 suggest to you that the over-all thrust of this budget and of its provisions are completely compatible with those objectives. Canadians want equity, they want more goods and services and they want more employment without inflation and, as 1 said a few moments ago, that problem has been addressed head on in this budget.
Since budget day-


John Edward Broadbent: Things have got worse.


Donald James Johnston: -I, and others, have received representations from many people-


Bob Rae: Richard Gwynn.


Donald James Johnston: -in my riding and from other parts of the country of concern about the budget and the impact that it might have on their particular circumstance.


Bob Rae: We got some letters too.


Donald James Johnston: 1, perhaps, received more than my share because I represent a riding which has a complete cross-section of business interests, people from all walks of life-


Mr. Lewis:: Used to represent.


Donald James Johnston: -many of whom saw themselves adversely affected by the budget.


John Edward Broadbent: Let us hear it for Westmount.


Donald James Johnston: Saint-Henri-Westmount, 1 might remind the hon. member.


Some hon. Members:: Oh, oh!


An hon. Member:: They don't know much about Quebec.


Donald James Johnston: Perhaps because of my interests in the area, I received representations from former clients, professional colleagues, associates and so on from across Canada. I also met with business groups in a number of Canadian cities.


Philip Derek Lewis: All favourable?


Donald James Johnston: I received quantities of material-


An hon. Member:: Name one.

January 26, 1982
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Donald James Johnston: -individual letters and thoughtful briefs.


Mr. Keeper:: What about Nassau and Maui?


Donald James Johnston: -such as that prepared by the joint committee of the Canadian Bar Association and the Canadian Institute of Chartered Accountants. From that review it seemed to me there were three areas-


Howard Edward Crosby: Think about the people, never mind about the Bar association.


Donald James Johnston: There are three general categories which these various representations addressed. Specifically, they addressed the retrospective application of certain provisions claiming that there were not adequate transitional provisions, the issue of the restriction on interest deductibility, some cash flow problems-


Some hon. Members:: Oh, oh!


Donald James Johnston: -which arose where tax liabilities existed without there being cash receipts available to discharge those obligations. Any of you who paid any attention to the amendments tabled in the House by the Minister of Finance on December 18 will realize how responsive the minister was to all serious representations.


An hon. Member:: All serious ones?


An hon. Member:: If you step on a dog, it might bite.


Donald James Johnston: Hon. members might have a look at the document, which many of you clearly have not, judging by the comments I have heard here today. The document is entitled "Transitional arrangements and adjustments relating to the tax measures of the budget".
I have these changes here with me this evening. I will not take the time of the House to repeat what should already have been considered by members prepared to criticize the budget. In fact, I would point out that extensive transitional provisions were introduced in response to that first area of representation to which 1 made reference. Major adjustments were made in the area of the interest restriction, and a series of changes were also set forth in this document to address the cash flow issue. Yet, is it not true that we still hear accusations of inflexibility?

And in fact, most of the opposition's comments fail to reflect any awareness of the changes that were made, as I just pointed out, on December 18 by the Minister of Finance. In fact, when he brought down his budget, the minister said that he would be willing to refer some of the measures to a committee of the House, as appropriate. Now that is flexibility, in my view, and demonstrates the willingness of the minister and the government to examine all these specific measures that are of special interest to certain Canadians and to certain sectors of our economy and our society.
This, Mr. Speaker, brings me to the question of budget process. I know this was mentioned during today's debate. The
hon. member for Sarnia-Lambton (Mr. Cullen) touched upon the subject this evening. It has been discussed at some length since the budget was tabled November 12, and I note that my colleague, the Minister of Finance, when he addressed the Canadian Club in Toronto yesterday stated: "I will have more to say in the near future not only about the impact of the tax measures, but also about possible improvements to the process of budget formulation".


Mr. Rose:: So will the people of Canada.


Donald James Johnston: Now, by referring certain matters to committee as the minister has indicated he may do, certainly an important step will be taken in the evolution of that process.
The Minister of Finance produced this budget in the tradition of budget secrecy, and as independent observers have often said, a tradition is harder to kill than a law.


An hon. Member:: Tell us about secrecy, Paul.


Donald James Johnston: Back in the mid-1970s, Mr. Speaker, this issue of budget secrecy was raised. I was then in private practice, and a committee was struck by the Canadian Tax Foundation to deal with the tax legislative process.


An hon. Member:: You should have kept the whole budget secret.


Donald James Johnston: A number of recommendations were made, and the problem of budgetary process is well described in that report. Mr. Speaker, are you signalling me that my time is up?


An hon. Member:: A long time ago, we hope.


Donald James Johnston: Do I have the indulgence of the House to-


Mr. Deputy Speaker:: There does not appear to be unanimous consent, and the hon. member's time has expired.


Howard Edward Crosby: Mr. Speaker, surely I have the greatest challenge of all the members who have participated in this debate, that of recording in a few minutes all the difficulties, deficiencies and defects of this budget. I cannot do that, so let me just take the time to credit the Leader of the Opposition (Mr. Clark) for providing to the Canadian people a process by which they can register their complaints and concerns about the budget through our special committee on the budget and the economy. 1 am very proud to have been a member of that committee. What we heard and now know is that the budget is based on a myth, a fiction, based on the idea that there is a class of people in Canada who, if they are taxed properly, will save the working people of Canada and will contribute to the economy in such a way that their taxes will be reduced.
We know that is not true. We found that out when the Canadian Trades Council and the Quebec Federation of Labour came before our committee and said that you are taxing the workers in this budget, not the rich. You are reaching out to the seven million Canadians participating in health benefit plans. You are taxing the 13 million people who participate in life insurance plans. The myth that the budget taxes the rich is false, and we found it to be false.
January 26, 1982


John Edward Broadbent: Faster, faster.


Howard Edward Crosby: That has given us the courage to come to the House and make that challenge that the Minister of Finance (Mr. MacEachen) is exposed in his budget, he stands before us naked-


An hon. Member:: Oh, oh!


Howard Edward Crosby: -by his own words. In 1980 he came before the House and said in his budget speech, with respect to the taxation system in Canada, that on the whole our tax system is one of the best in the world. Canada's individual and corporate taxes are lower than in many industrial countries, including the United States. A year later, on November 12, he came before this same House and said that many Canadians find our tax system unfair, and 1 agree with them. That is what he told the House but he cannot tell that to the people of Canada because-


Mr. Deputy Speaker:: Order. Order, please.


Howard Edward Crosby: The myth is defeated.


Mr. Deputy Speaker:: Order. It being 9.45 p.m. it is my duty to interrupt these proceedings and put every question necessary to dispose of the supply proceedings now before the House under the provisions of Standing Order 58(9). The question is on the motion of the hon. member for Vancouver Centre (Miss Carney). All those in favour of the motion, please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed, 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:: ment lost.	: 1 declare the	amendment to the amend-
The question is on the amendment (Mr. Broadbent). Is it the pleasure of the House to adopt the amendment?

Supply


Some hon. Members:: Agreed.


Some hon. Members:: No.


Madam Speaker:: All those in favour of the amendment, please say yea.


Some hon. Members:: Yea.


Madam Speaker:: All those opposed to the amendment please say nay.


Some hon. Members:: Nay.


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


Madam Speaker:: Shall I dispense with the bell?


Some hon. Members:: Agreed.


Madam Speaker:: 1 declare the amendment lost.
The question is therefore on the motion of the Right Hon. Leader of the Opposition (Mr. Clark). Is it the pleasure of the House to adopt the motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Madam Speaker:: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


Madam Speaker:: Ail those opposed will please say nay.


Some hon. Members:: Nay.


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


Madam Speaker:: Shall we dispense with the ringing of the bells?


Some hon. Members:: Agreed.
The House divided on the motion (Mr. Clark) which was negatived on the following division:

Althouse
Anguish
Baker
(Nepean-Carleton) Blackburn Blaikie Bosley Bradley Broadbent Cardiff Carney (Miss)
Clark
(Yellowhead)
Clarke
(Vancouver Quadra) Coates Cook Cooper Corbett Crombie Crosbie
(St. John's West) Crosby
(Halifax West) Dantzer Darling Deans Dick Do mm Elzinga Epp Fennell Fraser Fretz Friesen Fulton Gamble Gass
Greenaway
Gurbin
Allmand
Axworthy
Bachand
Baker
(Gander-Twillingate)
Beauchamp-Niquet
(Mrs.)
Supply
(Division No. 144)	Messrs.
YEAS Messrs.	Campbell	Gauthier	MacLellan(LaSalle)	Gimaiel	MalepartGustafson	Munro	Campbell	Gingras	MaltaisHalliday	(Esquimalt-Saanich)	(Cardigan)	Gourde	MasseHawkes	Murphy	Chenier	(Levis)	MastersHeap	Neil	Collenette	Gray	McCauleyHees	Nickerson	Comtois	Guilbault	McRaeHnatyshyn	Nielsen	Corbin	Harquail	NicholsonHovdebo	Nowlan	Corriveau	Henderson	(Miss)Howie	Nystrom	Cosgrove	Herbert	OlivierIttinuar	Oberle	Cote (Mrs.)	Hervieux-Payette	OuelletJarvis	Orlikow	Cousineau	(Mrs.)	ParentJewett (Miss)	Pa proski	Cullen	Hopkins	PelletierKeeper	Parker	Cyr	Irwin	PennerKempling	Patterson	Daudlin	Isabelle	PepinKilgour	Rae	Dawson	Johnston	PetersonKing	Reid	de Corneille	Joyal	PinardKorchinski	(St. Catharines)	Demers	Kaplan	PortelanceKristiansen	Riis	Deniger	Kelly	Prud'hommeKushner	Robinson	Dcsmarais	Killens (Mrs.)	ReidLambert	(Burnaby)	Dingwall	Lachance	(Kenora-Rainy River)La Salle	Roche	Dion	Lajoie	RobertsLawrence	Sargeant	Dionne	Lamontagne	RompkeyLewis	Schellenberger	(Chicoutimi)	Landers	RooneyLewycky	Scott	Dionne	Lang	RossiMacKay	(Hamilton-Wentworth)	(Northumberland-	Laniel	RoyMalone	Scott	Miramichi)	Lapierre	SavardManly	(Victoria-Haliburton)	Dubois	Lapointe	SimmonsMayer	Skelly	Duclos	(Charlevoix)	SmithMazankowski	Speyer	Dupont	Lapointe	TardifMcCain	Stevens	Erola (Mrs.)	(Beauce)	TessierMcCuish	Taylor	Ethier	LeBlanc	TobinMcDermid	Thacker	Evans	Leduc	TousignantMcGrath	Thomson	Ferguson	Lefebvre	TrudeauMcKenzie	Towers	Fisher	Loiselle	TurnerMcKnight	Vankoughnet	Fleming	Lumley	VeilletteMcMillan	Waddell	Flis	MacBain	WatsonMiller	Wenman	Foster	MacEachen	WeatherheadMitchell	Wilson	Francis	MacGuigan	Whelan(Mrs.)	Wise	Frith	Mackasey	Yanakis-129.Mitges	Young	Garant	MacLaren	Yurko-108.	NAYS	Messrs.	[Translation]Begin (Miss)	Breau	Madam Speaker: I declare the motion lost.Berger Blais	Bujold Burghardt	It being 10.30 p.m., I do now leave the chair under theBlaker Bloomfield	Bussieres Caccia	provisions of Standing Order 2(1).Bockstael	Campbell	At 10.30 p.m., the House adjourned, without question put,Bossy	(Miss) (South West Nova)	pursuant to Standing Order.
Wednesday, January 27, 1982