1982-02-16

ROUTINE PROCEEDINGS


Mr. Gus Mitges (Grey-Simcoe):: Madam Speaker, in view of the fact that the United States Centre for Disease Control has issued a strong warning that aspirin, also known as ASA- acetylsalicylic acid-should not be given to children with chicken pox or for any influenza-like illness, because such medication can cause Reye's Syndrome, a disease which can be fatal to young children, or leave them mentally retarded, I move, seconded by the hon. member for Esquimalt-Saanich (Mr. Munro):
That the Department of National Health and Welfare take all necessary steps to alert the public and the medical profession about this very serious problem.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


TELEVISION
Mr. Bill Wright (Calgary North):: Madam Speaker, last week the Prime Minister (Mr. Trudeau) was interviewed by David Frost for a forthcoming television program which will be called "Frost Over Canada". In view of the Prime Minister's 13 years of mismanagement of Canada's affairs, I move, seconded by the hon. member for Red Deer (Mr. Towers):
That this House recommend to Mr. Frost that the program be renamed
"Snow Job on Canada".


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
Mr. Gordon Taylor (Bow River):: Madam Speaker, Liberal government policies are full of contradictions.


An hon. Member:: Nonsense.


Gordon Edward Taylor: The Prime Minister (Mr. Trudeau) tells the working people to tighten their belts and not to ask for increases, and then increases the salary of the president of Canada Post to over $100,000 after only five months on the job. The government brags about free speech in the charter of rights, and then the Prime Minister puts zippers on the mouths of Liberal Members of Parliament. The Minister of Finance (Mr. MacEachen) talks glibly about restraint and then wastes $47 million on statues in Algiers, etc., etc. Therefore 1 move, seconded by the hon. member for Erie (Mr. Fretz):
That this House urges Liberal card carriers in Ontario and Quebec to tear up their membership cards and send the shreds to the Prime Minister.
If several thousand do this, the Prime Minister might be frightened into withdrawing the budget or, better still, into resigning.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HOLIDAYS ACT
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, the hon. member for Winnipeg North Centre (Mr. Knowles) has annually moved for the recognition of Heritage Day and, in his absence-which I now assume will be of a very short duration-I move, seconded by the hon. member for Beaches (Mr. Young):
That this House recognizes the third Monday in February as Heritage Day, congratulates all those who celebrated this occasion, and expresses its earnest hope that the government will soon recognize the importance of this day and declare it a national holiday.


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

February 16, 1982


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ECONOMY
Mr. Girve Fretz (Erie):: Madam Speaker, given that the rate of unemployment in the regional municipality of Niagara is a shocking 15.6 per cent, nearly double the national average, I move, seconded by the hon. member for Central Nova (Mr. MacKay):
That this House urges the Prime Minister to proceed with the immediate creation of two new programs to create employment in key sectors of the economy by stimulating domestic housing construction and by launching a program to enable private enterprise to hire young Canadians so that these deplorably and tragically high rates of unemployment can be brought to a more reasonable level.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


METRIC CONVERSION
Mr. Chuck Cook (North Vancouver-Burnaby):: Madam Speaker, I rise under the provisions of Standing Order 43 on an urgent and pressing matter. It is urgent, because every day that goes by means more waste of money. The education department of the province of British Columbia has conducted a massive test of over 90,000 British Columbia school children in grades four, eight and twelve, and has determined that their knowledge of metric is sadly lacking. Indeed, the grade four students, who have been taught nothing but metric, still indicated, by a 60 per cent majority, a preference for imperial measures. Therefore I propose, seconded by-who else?-the hon. member for Peterborough (Mr. Domm):
That this House condemns the public education program of the Metric Commission and demands its recall for further consideration, as it has proved to be expensive, ineffectual and completely discredited.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


BILINGUALISM
Mr. Dennis Dawson (Louis-Hebert):: Madam Speaker, pursuant to the provisions of Standing Order 43, I seek the unanimous consent of the House to move a motion related to an urgent and important question which, I feel confident, will gain the support of the House, particularly of the hon. member for Joliette (Mr. La Salle) and the Leader of the Opposition (Mr. Clark).
For the second time in ten days, we have heard the Leader of the Opposition repudiate the remarks of the hon. member for Winnipeg-Assiniboine (Mr. McKenzie) who is waging war against bilingualism just as he had against democracy in South Africa. Considering that the Leader of the Opposition claims to support the bilingualism policy and to have the Progressive Conservative caucus under control, I move, seconded by the hon. member for Sainte-Marie (Mr. Malepart):
That the House urge the Right Hon. I.eadcr of the Opposition to stop uttering line words and act immediately by asking for the resignation of that hon. member whose anti-French bias is already well known, just as his predecessor, the Hon. Robert Stanfield, had done in a similar case, namely that of the former mayor of Moncton.


Madam Speaker:: Pursuant to the provisions of Standing Order 43, presentation of such a motion requires the unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE JUDICIARY
Mr. Peter Elzinga (Pembina):: Madam Speaker, in our 115 years of existence as a country no woman has ever been appointed to the Supreme Court of Canada, even though qualified women have served with distinction in the superior and supreme courts of the provinces since 1969. I therefore move, seconded by the hon. member for Kingston and the Islands (Miss MacDonald):
That in Tilling the vacancy that now exists in the Supreme Court of Canada, the government redress the imbalance of 115 years of Canadian history by appointing a qualified woman to the Supreme Court of Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
February 16, 1982


POLITICAL PARTIES
Mr. Doug Anguish (The Battlefords-Meadow Lake):: Madam Speaker, I rise under the provisions of Standing Order 43 concerning statements made by the Finance critic for the Conservative Party during the weekend in Toronto and yesterday in Montreal, in which he praised the discredited and heartless economic doctrine known as Reaganomics as "something that we would be doing if we were a government", and agreed with the high interest rate policy of the federal Minister of Finance (Mr. MacEachen). I move, seconded by the hon. member for Selkirk-Interlake (Mr. Sargeant):
That this House thank the hon. member for Etobicoke Centre for finally clarifying his party's stand on this important issue, even though it contradicts his leader's call for expanded government programs, such as housing, and urges his colleagues to take note of this clarified position and drop their hypocritical opposition to MacEachenomics which is really just a made-up-in-Canada form of Reaganomics.


Mr. Clark:: Where were you for the vote?


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADA POST
Mr. Hal Herbert (Vaudreuil):: Madam Speaker, my motion is on a matter of urgent and pressing necessity and is proposed under Standing Order 43. Many persons living in towns and not eligible, by Post Office regulation, to have the benefit of home mail delivery, are now being subjected to a 200 per cent increase in the charge they must pay for the use of a convenience box to pick up their mail at the post office. I therefore move:
That the Post Office be instructed to discontinue forthwith the usurious charge for not having a postman, and further, that the Post Office cease immediately the obligatory charge for a change of address card for persons like myself who have lived in the same house on the same street in the same town for the last thirty-five years.


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


Some hon. Members:: Agreed.


CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION REGULATIONS GOVERNING SERVICE TO HEARING-IMPAIRED TELEVISION VIEWERS-MOTION UNDER S.O. 43
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, given that the Minister of Communications (Mr. Fox) promised a year ago that CRTC regulations would be amended quickly to allow Canadian cable television companies to substitute simultaneously an American signal for a Canadian signal where circumstances warranted it in order that hearing-impaired Canadians could enjoy closed captioned programs broadcast by U.S. stations, and whereas these amendments have still not been passed and many Canadians continue to be deprived of this unique and useful communications aid, I move, seconded by the hon. member for Fraser Valley West (Mr. Wenman):
That this House direct the Minister of Communications to expedite promised amendments to the broadcast regulations so that hearing-impaired Canadians may soon be able to enjoy television and the benefits of closed captioned programming which are presently available on a widespread basis in the United Slates.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ENVIRONMENTAL AFFAIRS
Mr. Simon de Jong (Regina East):: Madam Speaker, I rise under Standing Order 43. Last week several of my colleagues and I inspected some of the chemical waste dumps in Niagara, New York, that are already responsible for pollution in Lake Ontario. If that is not enough of a scandal, the senior management committee of Environment Canada has accepted in principle a plan to curtail drastically the technical ability of its four testing laboratories by centralizing their work in Burlington, Ontario. I therefore move, seconded by the hon. member for Beaches (Mr. Young):
That this House condemn the creeping Reaganism in the Department of the Environment and that this House urge the minister to reject this proposal that will diminish the effectiveness of the department to work with regional universities and to respond to regional problems and conditions.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Some hon. Members:: No.

February 16, 1982
Oral Questions



ORAL QUESTION PERIOD


Mr. Pat Nowlan (Annapolis Valley-Hants):: Madam Speaker, my question is directed to the Minister of Transport. As the tragedy of the Ocean Ranger and the tragic loss of lives unfolds, there is obvious confusion over jurisdiction between the federal, provincial and United States governments. Would the minister agree that this accentuates the need for responsible ministers in these three jurisdictions to sit down now and work out a de facto management system for control and safety of offshore drilling activity, to prevent any further loss of lives?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, this is exactly what the government has been trying to achieve with the government of Newfoundland for several months. I would argue, however, that the third jurisdiction, the United States government, should not be a party to the discussions relating to the management of the Canadian offshore. I agree with the hon. member it is important that we arrive at a negotiated agreement on the management of resources and revenue sharing.


UNITED STATES ROLE IN SAFETY CERTIFICATION
John Patrick (Pat) Nowlan: Madam Speaker, if the United States government will not be involved in a meaningful de facto way in the operations of offshore drilling rigs in waters which may not be territorial but have been claimed for us under our economic management zones, why was an American coastguard inspection team going to the rig to try to update a certificate of safety which had a two-year validity period and evidently was two months overdue? If there is not some part for them also, what are we supposed to be doing in relation to the safety of oil rigs?
Hon. Marc Lalonde (Minister of Energy, Mines and
Resources): Madam Speaker, I remind the hon. member that beyond our 12-mile limit, our territorial waters, we are in international waters, and that Canada has a responsibility for fisheries and the management of resources, and the countries in which the ships or drilling rigs are registered also have responsibility under the Canada Shipping Act and under international conventions with regard to the flag of registry of those installations, whether they are ships or drilling rigs. Thus, there is a United States involvement because this particular drilling rig was under the American flag.


DEPARTMENTAL RESPONSIBILITY
John Patrick (Pat) Nowlan: Madam Speaker, my question is really directed to the Minister of Transport.
Without arguing the point of the Minister of Energy, Mines and Resources and the fact there is a third jurisdiction involved outside territorial waters, the government of the United States, I direct my question to the minister concerning apparent confusion of jurisdiction within departments. I should like the minister to explain just what is his responsibility as Minister of Transport for the safe operation of drilling rigs in Canadian waters, especially in view of the fact that a recent report on the evaluation of search and rescue, dated February 1, 1982, made no mention of offshore drilling activity and highlighted jurisdictional problems within departments. At page 21, referring to departmental responsibility, it reads:
The resultant split in the functional responsibilities for safety within the CCG does not appear to the team-
That is the study team.
-to be an effective way to use resources.
At page 30 it indicates even more directly:
Finally, in the absence of a convincing demonstration that current marine response capability is inadequate and that better marine postures are not feasible-
And I interject here that the whole tenor of this is marine response for pleasure craft and fishermen, and not a word about offshore activity.
-the team would give lowest priority to the provision of new resources for marine response.
In view of this current report which is being studied and is supposed to go to cabinet on March 17, 1982, will the minister start to exercise some responsibility, so that deaths in the future are prevented and that someone takes control to save Canadian lives and starts to direct attention to the reality out there, rather than worrying about offshore pleasure craft and/or just fishermen?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, under the Canada Shipping Act my department has no jurisdiction over foreign-registered ships past the 12-mile zone; that is pretty fundamental. Thus, as Minister of Transport, I cannot go and inspect rigs or ships in that area.
With respect to seaworthiness of ships or rigs, a general principle in marine transportation, as well as in air transportation, is to accept the system of the foreign country involved. If my hon. friend wants to read the Dubin report, for example, Mr. Justice Dubin repeatedly recommended that we should not try to second-guess the system of another country, particularly if it is one that is as evolved as the United States of America is in this matter. The principle of reciprocity applies here in matters of marine transportation as well as in matters of air transportation.


CANADIAN JURISDICTION AND RESPONSIBILITY
Charles Joseph Clark: Madam Speaker, what we are speaking about here is the loss of Canadian lives. The principle here is that there must be some
February 16, 1982

Canadian jurisdiction exercised over a situation that involves the loss of Canadian lives. It was known that a U.S. coast guard commander, who inspected the Ocean Ranger two years ago, is quoted as saying that another routine inspection was two months overdue. My question to whichever minister is accepting responsibility is: why was it two months overdue? What was the Government of Canada doing to ensure the safety of Canadian lives?
Hon. Marc Lalonde (Minister of Energy, Mines and
Resources): Madam Speaker, there are at least ten different inspection certificates for a rig such as this. Most of those certificates are issued by the American Bureau of Shipping. These certificates deal with safety of construction, the international load line, and a number of other subjects. According to certain reports it appears that the certificate of the inspection that is carried out by the U.S. coast guard had not been renewed before the expiry of the previous one. No doubt this is a matter the commission of inquiry, which the government has announced it will create, will want to examine. At the present time I have no information to provide the hon. member other than what is already public.


Charles Joseph Clark: Madam Speaker, what the minister has confirmed is that the Government of Canada has been exercising no jurisdiction, nor official interest, over the safety of Canadian lives, 83 or 84 of which have been lost. That is what the Minister of Energy, Mines and Resources has said.


DEPARTMENTAL JURISDICTION
Charles Joseph Clark: Madam Speaker, I have a supplementary question for the Minister of Transport. I refer to the document cited by my colleague, a report on an evaluation of search and rescue. Not to get confused here about a conflict of jurisdiction between governments, on the basis of this report there is clearly a very serious confusion within the federal government itself. Will the Minister of Transport give us an assurance now that this confusion will not continue to put more Canadian lives at risk?


Jean-Luc Pepin: Madam Speaker, on the subject of inspection, that is not what the Minister of Energy, Mines and Resources said. There has been inspection by his department on that rig.


Marc Lalonde: Every two weeks.


Jean-Luc Pepin: Every two weeks, I am informed.
On the subject of division of responsibility between departments, I think there is an inevitability about it. The only alternative would be to put everything under the jurisdiction of a single department of government.
There will always be a division of labour between the Minister of Energy, Mines and Resources and the Minister of National Defence and the Minister of Transport on matters of transportation. The implication should not be that there will come a day when everything can be put in one department.
Oral Questions
The question is really, is the co-ordination among different departments, good enough? Between the Minister of National Defence and the Minister of Transport on the matter of search and rescue there is a good working relationship. That it can still be improved is beyond doubt, and efforts are made to that effect.
The report which has been leaked by a dedicated civil servant, who felt the world was waiting for his brown envelope-


Some hon. Members:: Oh, oh!


Mr. Lewis:: Very funny.


Jean-Luc Pepin: -at a certain hour last night, indicates only- no, no, this is not funny-that efforts are made to improve that co-ordination. The group in question in the Secretariat of the Committee on Foreign Affairs and National Defence came up with ideas on the subject that are being reviewed now, and departments and ministers will soon be made acquainted with these views.


SAFETY INSPECTOR'S REPORTS
Charles Joseph Clark: I trust the minister did not intend to joke about a situation which has cost-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: No, no.


Mr. Lawrence:: Well, what was he doing, then, if he was not joking?


Charles Joseph Clark: I say this seriously. I trust the minister did not intend to joke about a situation which has resulted in the loss of 84 lives. 1 hope the minister will deal directly with the urgency of ensuring that confusion within the federal government, which may have led to this loss of life, will be stopped before it leads to the loss of any lives in the future.
Let me ask a question of the Minister of Energy, Mines and Resources whose inspectors were there for a limited purpose. In answer to a question I asked yesterday about inspection into ballast problems, the minister indicated that he would inform me about the contents of the reports on the inspections which had been carried out. I would like to have that information, but I would also like to know whether the safety inspector from his department was only on the Ocean Ranger to assess the safety of the drill hole and was not there to inspect the safety or seaworthiness of the drilling rig.


Marc Lalonde: The Leader of the Opposition asked me for information yesterday. I have that particular information, the two reports of the safety inspections which took place in the last month. An inspection takes place every two weeks. If the Leader of the Opposition wants to read these reports I would be happy to table them when we come to tabling of documents.

February 16, 1982
Oral Questions
He will discover that those reports cover a number of issues of a general nature such as equipment, operations-


Mr. Nielsen:: What about seaworthiness?


Marc Lalonde: -covering a wide aspect. The certificates of seaworthiness are issued by international organizations so recognized by the International Maritime Council Organization, IMCO. In this particular instance they were issued by the American Bureau of Shipping, an internationally recognized organization which is responsible for certifying the seaworthiness of ships or shipping installations carrying the American flag.


SAFETY TRAINING AND REGULATIONS
Mr. Sid Parker (Kootenay East-Revelstoke):: Madam Speaker, my question is also to the Minister of Energy, Mines and Resources. Yesterday he indicated to the House that the safety of workers on ocean rigs fell under federal jurisdiction and was exercised under the Canada Oil and Gas Act. He indicated that he was satisfied with the work carried out under that act. Surely, then, the federal government must also have been aware that in June, 1980, organized labour in Newfoundland issued a report which said that most workers on oil rigs had no right to negotiate safety issues, and which called for much stronger health and safety regulations, inspection and training on the oil rigs, and also called for the workers to be placed under the protection of the health and safety legislation of Newfoundland.
In view of these problems which have been public for two years, and the recent tragedy, could the minister tell the House what steps he has taken to ensure adequate safety inspections and training, and will he table in the House relevant sections of the agreements with the oil companies dealing with safety, as well as safety training manuals used, and reports indicating what sort of inspections were done and what was found?


Marc Lalonde: Madam Speaker, first of all the hon. member raises the question of the unionization of those workers. Obviously that is a decision for the workers to take under the laws of Canada, or the laws of Newfoundland if those laws apply. As the hon. member knows, this matter is before the courts at the present time and I cannot prejudge the conclusions of the court.
We have taken the view, as the federal government, that we have the responsibility and jurisdiction, and we have acted accordingly. Whether the courts will confirm this is not for me to decide at the present time.
As far as the question raised by the hon. member is concerned, for the time being I will merely refer him to Section 8 of the Canada oil and gas drilling regulations which go very extensively into all the requirements which are exacted from applicants who want to go ahead with a drilling program.
There he will find all the questions which the one who proposes to drill is required to answer.
Concerning the details the hon. member is requesting, I suggest to him that this would more properly be a matter which should be examined by the commission of inquiry which the Acting Prime Minister and the Minister of Transport announced yesterday.


Sidney James Parker: I was not referring to the unionization of these people. I was referring to a report presented by the Newfoundland and Labrador Federation of Labour, dated June 2, 1980, describing their concerns.


INVESTIGATION OF DRILLING RIG OWNERS
Sidney James Parker: Madam Speaker, my supplementary question is also directed to the Minister of Energy, Mines and Resources. Given the fact that the Minister of Energy, Mines and Resources indicated in the House yesterday and today that he was satisfied that safety laws were adequate in the case of the Ocean Ranger and that inspections were adequate, and given the fact that it is unlikely that the minister would try to shift the blame for the tragedy onto the unfortunate crew members, could the minister tell the House if he is prepared to urge that a criminal investigation be undertaken to determine the possibility of criminal negligence on the part of the owners of the vessel with respect to their handling of maintenance, design and training, and to pursue charges if negligence is suspected?


Marc Lalonde: Madam Speaker, the hon. member is attributing statements to me which are not quite correct, and I suggest that he look back to the record of yesterday. I indicated that we, as the federal government, had responsibility for the inspection, and that to my knowledge inspections had been carried on regularly and according to the rules. I can confirm today that those inspections were indeed carried out, and today I have the last two reports.


John Patrick (Pat) Nowlan: Not for seaworthiness.


Marc Lalonde: Concerning the point raised by the hon. member, we have indicated that there will be a full-scale inquiry into this particular tragedy, and out of that inquiry I am sure that conclusions will be reached. If there is critical liability or criminal liability which might be involved, 1 assume that this will be the subject of a conclusion by that commission of inquiry. At the present time I would not want to prejudge who is responsible or liable in a particular instance. I think it would be very premature to attribute blame to any particular party.


Sidney James Parker: I would like to thank the minister for his assurance that he will pursue it and do it with an open mind.
February 16, 1982


REQUEST THAT ONE MINISTER BE DESIGNATED RESPONSIBLE FOR SAFETY OF WORKERS
Sidney James Parker: Madam Speaker, my final supplementary question is directed to the Prime Minister. I feel it is necessary to go to the Prime Minister since so many of his ministers are involved in this tragedy through conflicting jurisdiction.
The Prime Minister is aware that in late December seven men died on the St. Lawrence River because of-


Madam Speaker:: Order. I am afraid that the hon. member is going into questions which are too lengthy. He has asked two lengthy questions, and I allowed him to do that because he wanted to quote a report, but he must understand it was a tolerance on my part. However, at this particular point, on his third question, he must be brief.


Sidney James Parker: Madam Speaker, 1 will then go directly to the question. Could the Prime Minister tell this House when he will finally take the recommendations of the labour movement and an NDP safety committee which has travelled this country for the last year, and even the recommendations of his own former minister of labour, and bring forth legislation which will make health and safety the responsibility of one minister, dealing with one piece of legislation, with an adequate inspectorate?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, 1 was discussing that matter this very day with the Minister of Labour. I have indicated to him that the provisions of the draft Canada Labour Code would be studied with a view to achieving the end that the hon. member mentions.


Some hon. Members:: Hear, hear!


NATIONAL HARBOURS BOARD
Mr. J. R. Ellis (Prince Edward-Hastings):: Madam Speaker, the Minister of Transport will be aware that he recently participated in the decision to buy Japanese equipment for Ridley Island, despite the fact that the Canadian bid was $1 million lower and could provide better delivery and better guarantee, and it is the only company in the world, to date, which has built a 60-metre boom. Will the minister table the three memos on which the decision was made?


Jean-Luc Pepin: Madam Speaker, my hon. friend is referring, I presume, to the purchase of a piece of equipment called a stacker reclaimer, by the National Harbours Board for the coal development at the port of Prince Rupert. Am I right? As the hon. member well knows, because he has been watching me for at least three days with regard to that matter, this was the object of great preoccupation on the part of the Minister of Transport. I did my best to ensure that the offer made by a company in his
Oral Questions
riding, called Stephens-Adamson, was fully considered by the National Harbours Board and the consultants of the National Harbours Board. I think he will pay me tribute for having done that.
The decision was based on technology and timing considerations. I have arranged that the consultant and the National Harbours Board would meet with the company to give a full explanation of the decision. Therefore the choice of a Mitsubishi piece of equipment in the case of the port of Prince Rupert is not a reflection on a Canadian firm; far from it. The Canadian firm still sells in Canada and abroad. What happened to the drilling rig off the coast of Newfoundland is not a reflection on the quality of Mitsubishi equipment, either.


REQUEST FOR TABLING OF MEMORANDA
John Raymond Ellis: Madam Speaker, I did not mention any reflection on the firm with regard to the rig which just went down. It happens that they are made by the same company. The fact is that 300,000 man-days of work will not be used in Canada because the National Harbours Board, in conjunction with the minister, made a decision to buy Japanese equipment over Canadian equipment.
The minister says there was a technical disagreement. 1 again ask him will he not give us the memos upon which the agreement was reached? The management from Stephens-Adamson went to the west coast, and they were not told a single thing.


Jean-Luc Pepin: I can only repeat what I have said.


Mr. Baker (Nepean-Carleton):: Be forthcoming!


Jean-Luc Pepin: This was a decision of the National Harbours Board on the basis of recommendations made by their consultant. The timing in this matter is of particular essence, because if the port facilities are not built on time in Prince Rupert, my hon. friend will not take the blame for it; I will be blamed for it. Therefore, in view of that, I decided to follow the advice of the National Harbours Board on this subject.


Walter David Baker: Give him the memos. That's what he wants.


Jean-Luc Pepin: I made sure that full explanation was being given. I also made sure that the Canadian content in that particular project was very high, and it is 80 per cent at this time.


Walter David Baker: Three hundred thousand
man-days?


Jean-Luc Pepin: Through agreement with Mitsubishi, 53 per cent of the piece of equipment in question will be built in Canada. I extended myself fully, short of second-guessing the National Harbours Board, and I will not do that, particularly in view of the importance of the timing factor.


John Raymond Ellis: Show me the memos.

February 16, 1982
Oral Questions


PRESENCE IN GALLERY OF THIRTY-THREE MAYORS FROM MIRABEL AIRPORT REGION
Madam Speaker:: I have the honour to draw the attention of the House to the presence in our gallery of 33 mayors from the province of Quebec who, I understand, come from the Mirabel airport area and to whom I extend our welcome.


Some hon. Members:: Hear, hear!

[English\


INDUSTRY
Thomas Edward Siddon: Madam Speaker, my question is related to a question asked a moment ago, and it is directed to the Minister of Industry, Trade and Commerce. The minister knows that Canadian manufacturers of mining equipment have been quickly losing ground to foreign competitors in supplying our rapidly growing demand for mining equipment. In fact he knows that between 1970 and 1980 the percentage of Canadian-manufactured mining equipment dropped from over 70 per cent to a mere 29 per cent, giving rise to a $167 million trade deficit in 1980, compared to only a $48 million trade deficit a decade earlier.
Will the minister explain why his government has allowed the Canadian content in mining equipment to slip to rock bottom levels over the past ten years? Instead of speaking in pompous platitudes, as he did yesterday, what specific plans is he prepared to announce today in this House in order to rectify the kind of problem we heard about a few moments ago and to substantially increase the manufacture of mining equipment here in Canada?


Hon. Herb Gray (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, it is true that in 1980 Canada produced $342 million worth of mining equipment and imported $372.4 million worth. When you look at the exports of $205 million, you come up with the figure my hon. friend mentioned. The over-all picture is somewhat more positive than he suggested in light of these statistics.
At the same time, jurisdiction over most mining projects is in the provinces in which they are found. Therefore, we have to work in a way which takes that into account in achieving our objective of having a much higher production in Canada of the equipment used by our mines. A recognition of this development problem, as I said yesterday, is why we convened the Opportunities in Mining Conference in Vancouver last year to begin a process whereby Canadian mining companies can
become more aware of Canadian capacities and so there will be much higher purchases of Canadian equipment.
Second, one of the objectives of the office of industrial regional benefits, working with respect to projects on the Canada Lands, and voluntarily with the provinces, and with respect to projects there, would be to achieve a much higher level of Canadian content in mining equipment. This is our objective. I think we are making progress.


CONTRACT AWARDED TO JAPANESE COMPANY
Thomas Edward Siddon: Madam Speaker, platitudes, programs and conferences do not solve problems. In fact the minister has not responded to my question. Why was the situation allowed to deteriorate over the past ten years to the extent that less than one third of our mining equipment is manufactured in Canada? Does the minister condone the kind of contract award that his seatmate just announced whereby the Mitsubishi company of Japan will take a contract away from a Canadian company which was actually the low bidder? Does he condone that? Where are his specific proposals?


Herbert Eser (Herb) Gray: Madam Speaker, the equipment my hon. friend is talking about, if I am not mistaken, is not, strictly speaking, mining equipment but equipment to enable the loading of coal on ships which take it abroad. At the same time, this is the kind of equipment we want to see built and used in Canada to the extent it is technologically sufficient and available within the time required. We have been working with the National Harbours Board to make sure full attention is given to Canadian capacities.
I might add that my hon. friend's reference to this example does not support his contention that only one third of the content comes from Canada. The Minister of Transport said that over 50 per cent of the content of this equipment comes from our country. We have to do better, and that is what we are working to achieve.


AIRPORTS
Mr. Robert Gourd (Argenteuil-Papineau):: Madam Speaker, my question is directed to the Minister of Transport.
At a meeting last year with the members for Duvernay. Laval, Terrebonne. Labelle, the Minister of Communications representing Blainville-Deux-Montagnes and our mayors and councillors, the minister said that an expression of political will would be necessary if there were to be a transfer of activities between Dorval and Mirabel.
February 16, 1982

Can the minister inform us today, since we have 33 mayors and some 80 councillors from the area north of Montreal, whether that in itself constitutes an expression of political will and, if so, could he inform us when a decision will be forthcoming from his department?


Jean-Luc Pepin: Madam Speaker, I would be the first person to admit that will plays a very important role, but it is also important to understand the subject. What I mean is that regarding the future of Mirabel we now have two highly contradictory views, one of which is represented, and 1 would say remarkably well, by the mayors in our visitors' gallery. Next week, I shall probably have as many or more mayors who represent a different point of view. Thus, the Mirabel issue is not a cut and dried case.
1 put the problem to my colleagues a few months ago, and 1 intend to do so again in even more specific terms within the next few days. I can assure our present and future visitors that a decision will be made within the next two or three months, since a consensus has been reached on the need for a decision.


INDUSTRY
Mr. Derek Blackburn (Brant):: Madam Speaker, my question is directed to the Prime Minister. Recently Senator Olson stated, and I quote:
We're going to stop propping up mature industries that will never be competitive in this generation, like clothing, textiles, footwear and a number of others.
It appears that our minister responsible for economic development is unaware that there are approximately 300,000 Canadians working in these industries, many of them in the province of Quebec. From all reports some Liberal MPs know and are concerned that we have more than 1.2 million Canadians already searching for jobs that do not exist. Is it government policy to disregard the pleas within its own caucus and the plight of these Canadians and, instead of creating jobs for the people who desperately need them, to start spelling out who is next on its lay-off hit list?


Pierre Elliott Trudeau: Madam Speaker, the hon. member is showing a little bit of misunderstanding of the policy announced by the government in recent months in the areas of textile, clothing and the shoe industries. Rather than force workers out of work, as the hon. member seems to suggest, we have continued the protection to these industries. At the same time, rather than having the reactionary approach which is so typical in many things of the NDP, we have created a Canadian Industrial Renewal Board to ensure that in an industry where workers are generally paid far below the Canadian industrial average, that industry is reinforced and strengthened in some areas and, in those areas where it is not competitive, that new industries are brought in
Oral Questions
which would be technologically more advanced and which would provide for higher wages. Something less than $300 million has been allocated to that board, composed of industries and eminent businessmen from the private sector in several provinces, including Quebec, so that this joint task, government working hand in hand with the industry, management, and workers, would provide a much better future for the workers presently employed in those industries.


Derek Nigel Ernest Blackburn: I gather from the Prime Minister's answer we can look forward to a very rosy future in those three industries, footwear, textile and clothing. I hope that comes true.


BILATERAL DISCUSSIONS-INQUIRY RESPECTING CANADIAN POSITION
Derek Nigel Ernest Blackburn: Madam Speaker, my supplementary question is to the Secretary of State for External Affairs. In the past few months 20,000 workers have lost their jobs in the clothing and textile industries and countless others have had their jobs reduced to part time. On Thursday, Canadian negotiators are leaving for Hong Kong to start a new round of bilateral trade discussions. Will the minister assure this House that the mandate of these negotiators is not to weaken further the position of these industries in Canada, but to protect their workers by requiring that our negotiators bargain for the maintenance of actual import levels of 1981, or the restoration of the import quotas of 1979, whichever is the lower?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, it is not customary to reveal the exact mandate of negotiators for the Canadian government before negotiations take place, but I can certainly assure the hon. gentleman that the purpose of those negotiators will be to protect the interest of Canadians and Canadian jobs.


AIRPORTS
Hon. Roch La Salle (Joliette):: Madam Speaker, my question is directed to the Minister of Transport, considering the presence today in our visitors' gallery of a delegation of mayors who are, of course, interested in air transport. The minister has confirmed that he is expecting another delegation next week. More importantly, Madam Speaker, the minister has just told us today, on television in front of thousands of Canadians, that a decision is to be made within two or three months. Can the minister give us the assurance that the decision will be made public not later than June 1?

February 16, 1982
Oral Questions


Jean-Luc Pepin: Madam Speaker, I have been doing some mental arithmetic. Let us take today's date, which is February 16, and add two or three months, and the answer is obvious: April or May. So I can confirm that what I said earlier was indeed what was implied in the question put by the member for Joliette.


INQUIRY WHETHER FUTURE OF MIRABEL WILL BE KNOWN BY JUNE I
Roch La Salle: Madam Speaker, considering the fact that in the case of Nordair, for instance, there were a number of extensions, and I see that three months from today would be May 16, I want to ask the Minister of Transport whether he can give the House the assurance, before the group of concerned citizens here today and the group that is expected to come next week, that it will be told what is to be done with Mirabel and Dorval on June 1?


Jean-Luc Pepin: Madam Speaker, my hon. friend, who was himself a minister for a few weeks, knows perfectly well that I cannot give him the physical assurance that this will be the case, because it obviously depends on a number of my colleagues who may decide otherwise. As far as I am concerned, and I think I can commit the cabinet as well-assuming that the important thing is to have a decision, and the mayors are going to let me know in a few minutes-1 believe I can give the hon. member the assurance that I shall do my utmost to provide an answer within the next two or three months, as I just said.


FINANCE
Hon. Jake Epp (Provencher):: Madam Speaker, I would like to direct my question to the Minister of Finance but, in his absence, I will direct it either to the Prime Minister or to the Minister of State for Finance. While the November 12 budget seriously eroded the effectiveness of the Small Business Development Bond, it at least gave some hope to owners of small businesses and farmers that there might be some relief from high interest rates. Could the minister explain why it is that while that budget provision is now in effect, the banks of Canada have cut off all funds for Small Business Development Bonds?
[ Translation]


Hon. Pierre Bussieres (Minister of State (Finance)):: Madam Speaker, the hon. member is making very serious allegations when he says that Canadian banks have definitely cut off all funds for Small Business Development Bonds. I
think that the situation should be monitored very closely and the Minister of Finance will get in touch with representatives of the banking institutions to check these allegations, and should they turn out to be true, find out the reason for such behaviour.


REQUEST FOR REPORT
Arthur Jacob (Jake) Epp: Madam Speaker, I wish those allegations would be checked. If the Minister of State for Finance checks with the banks he will find that, for instance, as of February 10 the Royal Bank withdrew those funds. Canadians have gone to some expense. They have retained accountants to find out whether they are eligible for Small Business Development Bonds. Time has been spent but, more important, this is another aspect of the budget which has just gone by the boards. It is another discredit to the Minister of Finance.
When will we have an answer? Is the Small Business Development Bond in effect? Is there funding and, if there is not, will the government give Canadians an answer tomorrow? Is there money for Small Business Development Bonds?
[ Translation]


Pierre Bussières: Madam Speaker, the hon. member who claims to be well informed, seems to forget that by its very nature this bond requires the involvement of our financial institutions through our taxation system. As I said, we will check whether funds are still available and encourage banks to help us maintain in operation the Small Business Development Bond program.


AIRPORTS
Mr. Marcel Roy (Laval):: Madam Speaker, my question is directed to the Minister of Transport. It concerns the plans for Montreal International Airport at Mirabel. There will be an impact on the economy, not only of the North Shore but of the entire province. We must know when the decision will be made, so that the mayors will be able to plan accordingly. My question is as follows: Would the government consider creating an administrative area that would cover the airports of Dorval, St-Hubert and Mirabel in order to avoid this political conflict between two areas, since the economic impact will affect the entire province?


Jean-Luc Pepin: Madam Speaker, no proposal of this kind is under consideration, but I can assure the hon. member that the problem only concerns Mirabel and Dorval, and that St-Hubert is not in the picture. 1 am told that things are running smoothly in St-Hubert and
February 16, 1982

that there are no plans for any transfer to Dorval, if a new division of activities between Dorval and Mirabel is put through. In other words, I am told that St-Hubert is not a problem in the present situation, where we are considering the feasibility of transferring certain routes from Dorval to Mirabel.


RAILWAYS
Mr. S. J. Korchinski (Mackenzie):: Madam Speaker, I have a question for the Minister of Transport. Now that the minister has announced his intention to upgrade the Crow rate, what iron-clad guarantees has he received from the railways that they will maintain service, rail lines and rolling stock adequate to meet the requirements of grain growers?


Jean-Luc Pepin: Madam Speaker, in the announcement I made in Winnipeg the other day it was specifically indicated that the guarantees that the railways would have to give in return for a more compensatory rate would be defined by the "Gilson exercise", as I call it.
Second, these guarantees would be part of the statute that would be passed in this House-next fall, I hope-to replace the present statutory rate. In other words, the obligation of the railways to provide guarantees of service would be in the law which would replace the statute we now have.


ROLE OF MINISTER
Stanley James Korchinski: Madam Speaker, since the railways have made profits from hauling grain for at least the last 75 or 85 years and have left many rail lines abandoned without adequate maintenance and without adequate rolling stock, I would like to ask the minister whether the Canadian Wheat Board will be using farmers' money to contribute to buying rolling stock, and what clout does the minister have now that he did not have up until now, to force the railways to provide this necessary service?


Jean-Luc Pepin: Madam Speaker, I have not found too many people in the west who will not accept the proposition that at the moment and in recent years the railways have not been properly compensated. There is agreement on that. People may disagree as to who should pay the difference between what they should receive and what they now receive. The first point is generally accepted.
In the announcement I made on behalf of the government last week, I indicated that the program for branch line rehabilitation would continue at the expense of the Government of Canada as a sort of compensation for what the railways have lost in the past and cannot recover now or in the future.
Oral Questions
With respect to hopper cars, I did make a commitment on behalf of the government that a first purchase of 1,280 hopper cars will be made very, very soon. These are the different ways in which the government is moving in an effort to rebalance the contribution the government, farmers and the railways will make to grain transportation.


DISASTERS
Miss Coline Campbell (South West Nova):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. In view of the concern of all members of this House, can the minister tell the House when a commission of inquiry will be set up to look into the tragic loss of lives and the sinking of the Ocean Ranger off the coast of Newfoundland yesterday morning?


Marc Lalonde: Madam Speaker, we are in the process of finalizing the terms of reference for that commission of inquiry, but 1 am pleased to announce to the House that the Chief Justice of the Supreme Court of Newfoundland, the hon. Alex Hickman, has agreed to chair that commission. I am sure all members of this House will want to express their appreciation to the Chief Justice for having accepted this very important task.


Some hon. Members:: Hear, hear!


ROYAL CANADIAN MOUNTED POLICE
Mr. Svend J. Robinson (Burnaby):: Madam Speaker, my question is directed to the Solicitor General. It concerns the government's response to the recommendations in the McDonald commission report which was tabled last August. Since the first revelations of RCMP wrongdoing in 1977, not a single disciplinary action has been taken or prosecution commenced by the federal government, making a mockery of the rule of law in Canada. Will the Solicitor General now confirm that the RCMP commissioner received some time ago the reports of former judges Culliton and Potvin on possible disciplinary action, and will he explain why his colleague, the Attorney General of Canada, has taken no proceedings whatsoever on violations of federal law and why, apparently, the RCMP commissioner has now decided not to take any disciplinary action at this time?


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, I accepted the recommendations of the McDonald commission and referred matters to attorneys general, federal and provincial, and to the commissioner, to consider whether, in their

February 16, 1982
Petitions
prosecutorial discretion charges should be laid and, in the case of the commissioner, whether disciplinary proceedings should be embarked upon. The commissioner has not yet reported to me on the question of disciplinary proceedings, but he has not yet got the results of the decisions made by attorneys general, federal and provincial, on the question of whether charges will be laid. I am in no way critical of the commissioner nor do I consider him dilatory in not responding yet to the recommendation that he consider disciplinary charges.
The attorneys general have their own responsibilities; they are not accountable to me. It was my duty to bring matters to their attention and I did so. I suggest that if the hon. member has concerns about the way they are performing their responsibilities, provincial or federal, he should ask them.


IMPLEMENTATION OF HI.E-DESTRUCTION POLICY
Svend Johannes Robinson: Madam Speaker, apparently there is one rule in Canada for the postal workers and another for the RCMP, an attitude which was just condemned by the Canadian Civil Liberties Association.
In view of the fact that one of the most serious revelations of the McDonald commission was the fact that the RCMP holds files on over 800,000 Canadians, many of which should never have been opened, when is the minister going to keep the promises he has made on many occasions, to implement a file-destruction policy and put an immediate end to this gross violation of the privacy of thousands of innocent Canadians?


Robert Phillip Kaplan: Madam Speaker, I have indicated that I consider 800,000 individual files an excessive number to be held by the security service of the RCMP and that many of those files should be destroyed. However, with the prospect of prosecutions or disciplinary proceedings that may well involve matters contained in those files for all I know, and defences may be raised that require production of those files, I felt it in order to postpone any file-destruction policy which I fully intend to implement in due course. I consider it proper to postpone that destruction until the possibilities of prosecution and discipline are dealt with. Considering that hon. members opposite must surely want fair trials to be available to those who become defendants, I think those files should be preserved until then.


PETITION
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the one hundred and eighty-first report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for Simcoe North (Mr. Lewis) on Monday, February 15, 1982, and finds that it meets the requirements of the Standing Orders as to form.


POINT OF ORDER
Madam Speaker:: I should also like to give the result of the inquiry I made into the request of the hon. member for Calgary West (Mr. Hawkes) for information about the delay in publishing Hansard the other day. My information is that a computer broke down in the Printing Bureau when printing French Hansard and consequently, according to our practice, the distribution of English Hansard was delayed. The Hansard was ready at 11.25 a.m. and some copies were put at the doors of the House of Commons. Usually the pages deliver copies to the leaders of the parties in the House and also to members who request them. Eventually we ran out of copies and only some 25 members were able to get a copy of Hansard for the question period.
We apologize, but the delay was due to a breakdown in the computer in the Printing Bureau. We hope that will not happen too often.


PRIVILEGE
Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, I gave you notice that I wished to raise a question of privilege with respect to the statements made in the House yesterday by the President of the Privy Council (Mr. Pinard), as reported at pages 14996-7 of Hansard, and a subsequent press release dated February 15, 1982 under the authority of the Minister of Transport (Mr. Pepin) and the Minister of Energy, Mines and Resources (Mr. Lalonde).
Yesterday in the House, as reported at page 14996 of Hansard, the hon. member for Oshawa (Mr. Broadbent) raised a point of order because an announcement was to be made that afternoon establishing a formal inquiry into the Hibernia matter and was not being made properly, that is, in the House of Commons, giving hon. members an opportunity for reply.
At page 14997 of Hansard, after an intervention by the hon. member for Yukon (Mr. Nielsen), the President of the Privy Council said:
-Minister of Energy, Mines and Resources (Mr. Lalonde) has just told me there will be no announcement today. Under the circumstances, there is no problem.
Later yesterday afternoon, after a press conference, Members of Parliament received a copy of a press release which reads as follows:
Transport Minister Jean-Luc Pepin and Energy Minister Marc Lalonde today announced that the federal government will hold a formal inquiry to investigate all aspects of the loss of the drilling rig Ocean Ranger off Newfoundland early today.
February 16, 1982

I raise this question of privilege in a reluctant way, Madam Speaker, because in my short experience in the House I have found the President of the Privy Council to be an honest, straightforward, honourable member. Nevertheless, I take the opportunity to raise this question of privilege so that he can clarify his statement to the House. His statement was clearly misleading: it clearly said that there would be no announcement. Then suddenly, two hours later, there was an announcement. 1 will send it up to you so that you can see it for yourself.
My question is that I and perhaps other hon. members, perhaps inadvertently, have been misled by the statement made by the President of the Privy Council.


Madam Speaker:: Unless the hon. member tells the House that he was intentionally misled by the House he does not have a question of privilege. If he feels that he might have been misled inadvertently, then of course he knows that there is no foundation for a question of privilege. If the press release, in his view, was not in conformity with statements made in the House, that is a debatable question and, of course, he may debate it. Even if the hon. member wanted me to look at all of these statements to determine whether there were discrepancies in them, it is not for the Chair to establish discrepancies.
If these statements, in the mind of the hon. member, do not seem to conform with what was said in the House, unless he is prepared to tell me that the minister has intentionally misled him-and he has not done that-I cannot find the basis for a question of privilege.


Ian Gardiner Waddell: Madam Speaker-


Madam Speaker:: 1 do not know why the hon. member always rises when I make a ruling on a question. He has to accept the ruling. Once in a while I may allow that he may have a point of order, but the hon. member is in the habit of rising every time I make a ruling.
This is the ruling; there is no question of privilege. 1 do not see what we can add to that discussion.


Ian Gardiner Waddell: A point of order, Madam Speaker. I understood from what you were saying that you were not making your formal ruling but were asking me if I was saying that the minister perhaps had-


Madam Speaker:: No, 1 was not saying that. It was quite clear that I was ruling.


POINT OF ORDER
Mr. Jim Fulton (Skeena):: Madam Speaker, my point of order is really a question for the Parliament Secretary to the President of the Privy Council (Mr. Smith). On June 19, 1981, I placed on the Order Paper Motions Nos. 62, 63 and 64 for
Tabling of Documents
the production of documents related to the Amax project. It is eight months since I requested this material yet it has been released to people who are not members of this House, members of the general public. I wonder if the parliamentary secretary could tell me when these documents are likely to be tabled, since the motion has been on the Order Paper for some eight months.


Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, 1 will look into the question. I recall that last week and, 1 think, the week before, we were prepared to deal with one of the items standing in the name of the hon. member on the day scheduled for the production of papers. He was not here so we did not proceed. I shall have to inquire whether that is the one he refers to. I will look into the matter.



ROUTINE PROCEEDINGS


Marc Lalonde: Madam Speaker, I should like to table two safety inspection reports on offshore drilling operations that were referred to in the House yesterday and today. Unfortunately 1 have only the English text, but I understand that hon. members want to have this urgently. I would be willing to attach a translation to this text, if the House agrees, as soon as we can get a translation done.


Madam Speaker:: Shall it be tabled in one language only?


Erik Nielsen: Madam Speaker that is agreeable, and we thank the minister. Could he tell us whether these constitute the entire number of inspection reports on the Ocean Ranger?


Marc Lalonde: Madam Speaker, in the House yesterday there was reference to two inspections last month. There is an inspection every two weeks. There is a pile of inspection records on all drill ships which have operated off the east coast. I suggest that all other reports should be referred to the commission of inquiry, which has been set up today, and be the subject of evidence, if the commission counsel and the chairman of the commission wish to have access to those documents.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Madam
Speaker, I agree with this procedure on the condition that the

February 16, 1982
Order Paper Questions


David P. Smith: Madam Speaker, the following questions will be answered today: Nos. 2,250 and 3,007.


GESTAPO AND NAZI PARTY MEMBERS
Mr. Blackburn: 1.	How many (a) former (b) suspected SS, SD, Gestapo and Nazi party members (i) entered Canada after World War II (ii) took up permanent residence?
2.	Were former SS, SD, Gestapo or German Nazi party members arrested, charged or deported from Canada since 1945 and, if so, how many and what were their names?
3.	Are attempts being made to track down and/or prosecute former SS, SD, Gestapo or German Nazi party members living or suspected of living in Canada?


David P. Smith: I am informed by the Department of Justice Canada and Employment and Immigration Canada as follows:
1.	Canada did not admit for permanent residence any person who admitted or was suspected of having an affiliation with the organizations mentioned. There is no way to determine the number of persons who may have been admitted to Canada without knowledge of such an affiliation.
2.	No.
3.	No.


PRIME MINISTER'S RESIDENCE
Mr. Cossitt: What is the name, job description, annual salary, date of appointment and details of any previous government employment of all persons paid in whole or in part from public funds who are employed in connection with the operation of the Prime Minister's (a) official residence at 24 Sussex Drive, Ottawa, Ontario (b) summer residence at Harrington Lake, Quebec from July 20, 1977, to the date the answer to this question is prepared?


Pierre Elliott Trudeau: Previous Government
Name	Job Description	Annual Salary	Date of Appointment	Employment
(a) Prime Minister's Residence				
S. Baptista	Maid	$11,707-12,704	23-10-79	NoneH. Bennet	Household Co-ordinator	$26,212-29,168	03-03-80	Secretary of StateJ. Deschambault	Chauffeur	$17,599-19,247	03-03-80	Regional Economic Expansion Industry, Trade and Commerce External Affairs Canadian Armed Forces House of CommonsL. Lafrance	Maid	$11,707-12,704	13-06-79	None1. Lecointe	Governess	$12,175-13,212	14-08-81	None
French translation is appended to today's Votes and Proceedings and that not only the English version is published today.


Madam Speaker:: The House has agreed that the documents be tabled in English only with the assurance that as soon as they are available-but no one said that it would be today. I would agree to have this done today, but the assurance has been given that these texts would be translated into French.


Marc Lalonde: Madam Speaker, we do not intend to publish these papers but simply to table them, and I undertake to have a translation available as soon as possible. The thing is to have them translated as soon as possible.


EXTERNAL AFFAIRS AND NATIONAL DEFENCE
Mr. Maurice Dupras (Labelle):: Madam Speaker, I seek unanimous consent of the House to move, seconded by the hon. member for Kingston and the Islands (Miss MacDonald):
That four members of the subcommittee on Canada's relations with Latin America and the Caribbean of the Standing Committee on External Affairs and National Defence be authorized to travel before March I, 1982. to Mexico and El Salvador, and that the necessary staff accompany the members.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
February 16, 1982
[Stage Direction]
Taxation
Nairn*	Job Description	Annual Salary	Date of AppointmentL. Melville	Maid	$11,707-12,704	19-05-81R. Poltier	Cook	$15,506-16,955	05-09-78Y. Vincent	Chef	$24,728-27,517	01-10-75H. West	Senior Maid	$12,815-14,004	01-01-73(b) Summer Residence	A. Desjardins	Maid (Part-time)	$ 5,853- 6,952	28-10-76
Previous Government Employment
None
None
National Arts Centre
Governor General Prime Minister's Residence
Revenue Canada-Taxation
David P. Smith: Madam Speaker, if question No. 1,340 could be made an order for return, this return would be tabled immediately.
[ Translation]


Madam Speaker:: The questions enumerated by the hon. parliamentary secretary have been answered. Is it the pleasure of the House that question No. 1,340 be deemed to have been made an order for return?


Some hon. Members:: Agreed.
[ Text]


Mr. Cossitt: 1.	Is Mr. Kenneth Backwell employed by the Department or Public Works and, if so (a) in what capacity (b) what is his annual salary (c) is he connected with the property management division?
2.	Has the Department of Supply and Services or any other government department or corporation given contracts to Mr. Backwell and/or Ultimate Courier Ltd.. 880 Wellington St., Ottawa, and, if so. what arc the complete details of all contracts or of any other business done with Mr. Backwell and/or Ultimate Courier Ltd. even if not by contract?
3.	To the knowledge of the government, is Mr. Backwell the president or an officer of Ultimate Courier Ltd. and, if so, is there a conflict of interest in his being a government employee and doing business with the government simultaneously and, if so, what action will the government take?
Return tabled.


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


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


Some hon. Members:: Agreed.



AN ACT TO AMEND THE STATUTE LAW


[Stage Direction]
On the Order: Government Orders:
February 10, 1982-Second reading and reference to a Committee of the
Whole of Bill C-93, to amend the statute law relating to certain taxes and to provide other authority for the raising of funds.
Madam Speaker:: On Wednesday, February 10, 1982, the hon. member for Yukon (Mr. Nielsen) raised a point of order in relation to Bill C-93, to amend the statute law relating to certain taxes and to provide other authority for the raising of funds. The hon. member expressed concern that the bill contained matters based on ways and means motions and other matters of substance, namely, the authority to borrow money. The hon. member claimed that for that reason the bill is an omnibus bill. It was further argued that each of the two features of the bill calls for two different modes of proceeding through the legislative process.
As hon. members will recall, the practice prior to 1969 was to include a provision for borrowing authority in supply bills. Such bills were discussed under a different supply procedure, giving hon. members ample opportunity to debate all aspects of those bills. This procedure was changed with the adoption of the new supply procedures currently in effect which introduced certain limitations into that process. It was for this reason that my predecessor ruled in favour of removing the borrowing provisions from supply bills.
The same limitations in debate do not prevail under the ways and means procedures. Recently the borrowing provisions were included in bills based on ways and means motions, which 1 do not find objectionable. As I indicated to the House on January 19, 1981, I have no quarrel with the practice of combining in the same bill taxation matters based on ways and means motion with the borrowing authority, provided the notice provision was respected. In the case of Bill C-93, this requirement has been met, I can find no objection to the bill being proceeded with, and I so rule.



GOVERNMENT ORDERS


Pierre Bussières: that Bill C-93, to amend the statute law relating to certain

February 16, 1982
Taxation
taxes and to provide other authority for the raising of funds, be read the second time and referred to Committee of the Whole.
He said: Madam Speaker, this bill implements a number of commitments which had been made to the energy producing provinces. The bill also provides for several technical changes in the federal excise tax system and, as you just said, its purpose is also to obtain new borrowing powers for the fiscal year 1982-83.
Hon. members will recall that last fall, the Government of Canada entered into agreements with Alberta, Saskatchewan and British Columbia on the pricing of oil and natural gas and the sharing of revenue from those resources. The five-year agreements established a price scale for oil and natural gas and provided a sound basis for achieving Canada's energy goals. The bill before the House today consists of three parts. In the first part, the government is seeking borrowing authority for the fiscal year 1982-83. Part II amends the Excise Tax Act by implementing several changes resulting from the energy agreements, as well as technical changes in the federal sales tax system. Part III of the bill amends the Petroleum and Gas Revenue Tax Act according to the agreement concluded by the Government of Canada and the oil producing provinces.
Thus, in the first part, the government is seeking borrowing authority for $6.6 billion. Mr. Speaker, the House will recall that all unused borrowing authority, granted under the Borrowing Authority Act, 1981-82 and in excess of $3 billion, will lapse on March 31, 1982. Without new borrowing powers, the government will be unable to obtain the necessary funds to meet its financial requirements for 1982-83. The new borrowing authority for $6.6 billion will cover budgetary and nonbudgetary financial requirements for 1982-83 as estimated in the budget tabled in the House last November. We are seeking borrowing powers now so as to have the authority when the new fiscal year starts on April 1, 1982.
Since this borrowing authority bill is directly connected with the budget, I think it would be useful to review the budget's main objectives in light of the economic situation and thus provide a background for evaluating the merits of the bill. The budget's main theme, as hon. members will recall, was that rapidly rising inflation was the main problem in our economy. Inflation tends to push up interest rates, destroy investor confidence and generally slow down economic activity. This in turn leads to a number of problems: rising unemployment, erosion of real income and borrowers saddled with the burden of ever-increasing interest rates. This has indeed been confirmed by the phenomena we have been seeing in Canada; during the past years inflation has accelerated while labour market conditions have failed to improve. To cope with these problems, the government decided to adopt its present policy of waging a persistent battle against inflation. We must reduce inflation if we want our country to realize its growth potential.
The budget has stressed the need for gradually and substantially reducing the government's deficit. With a lower deficit, the government will be able to cut back its demands on the capital markets and leave more room for other borrowers, while relieving pressure on interest rates. The next tax and expenditure control measures set forth in the budget will prevent the deficit from rising to intolerable levels, thus reflecting the government's commitment to fiscal restraint. I recall, Mr. Speaker, that the government has been able to reduce its cash requirements while at the same time providing tax cuts for the vast majority of Canadian citizens. A substantial drop in marginal income tax rates, changes in the federal tax rebate system and continued indexation of individual income tax-all these measures have resulted in lower taxes for most Canadians. Of course, Canadians who have benefited from various tax exemptions, especially those in the higher income bracket, and also some of the large corporations will be paying more taxes as a result of the budget. However, some tax increases were necessary, and they are mostly affecting those Canadians who are best able to absorb them.
The government has also made an effort to restrict growth of government expenditures. It is always difficult to apply such restrictions, especially at a time when the economy is flagging, since government programs tend to meet a wide range of both social and economic needs which are all equally important. Thus, while keeping its expenditures within reasonable limits, the government did not want to make indiscriminate cuts in its budget. The need for a firm but fair policy to fight against inflation, like the one adopted by the government, has become even more apparent in the light of the events that have taken place since the budget was tabled in this House. Inflation rates similar to those experienced last year are keeping interest rates at high levels and causing a pronounced slump in economic activity. Other countries are having to cope with the same problems, and the recession has also affected the United States, Great Britain, Germany, France and Japan. Like Canada, and almost without exception, these countries have admitted that inflation was at the root of their problems, and they have maintained anti-inflationary tax and monetary policies.
In the United States, where the impact of energy prices has been cushioned more quickly than in Canada, inflation has already started to slow down. Of course, this means that with a higher rate of inflation in Canada, our industry is beginning to be less competitive than American companies. We must therefore make every effort to check inflation, otherwise the Canadian industry will lose some of its export markets for good, all the more as further energy price increases are expected in Canada.
Because of higher unemployment in recent months, certain critics have asked the government to provide massive economic incentives. However, they take no heed of the lessons of the recent past which show that there is no quick answer to such

basic problems as inflation. These critics would have the government show substantial deficits, unmindful of the consequences that this would have on inflation and on already excessive interest rates. This would mean that the government would have to borrow more money on capital markets, which would create additional upward pressures on interest rates. These same critics reply that this would not necessarily occur since the Bank of Canada can increase the money supply and devaluate the Canadian dollar. However, the government believes, as we have often repeated, that such a policy is shortsighted. It would lead inevitably to a much higher rate of inflation, to higher interest rates and to worse unemployment than is now the case.
The reasonable solution is the one we have chosen. We must not only look at today's figures, but we must also lay the foundations of tomorrow's economy. As I have stated, Mr. Speaker, budgetary and non-budgetary financial requirements for 1982-83 amount to a total of $6.6 billion. In addition to forecast financial requirements, we shall need as usual some margin for contingencies resulting for instance, from exchange operations. In the last few years, this contingency fund has fluctuated around the figure of $3 billion and has normally been added to the total borrowing authority requested. This year, however, these $3 billion or what remains of the borrowing authority for 1981-82 if the difference is lower than $3 billion will not lapse automatically at the end of the fiscal year and may therefore be carried forward. The amount carried forward will therefore represent the contingency margin required for the 1982-83 fiscal year.
The provision to the effect that the government may borrow and repay amounts in a foreign currency is of a technical nature. It was included in the last four borrowing authority bills. Throughout the years, Canada has borrowed and repaid amounts in a number of foreign currencies. This provision was, however, added in the last few years to confirm the right of Canada to borrow any amount in foreign currencies. The government intends to introduce in the near future a bill to amend the Financial Administration Act, including a provision to define the power of the government to borrow and repay any amount in foreign currencies.
Once the amendment has been introduced and passed by Parliament, there will be no need for that kind of provision.
Mr. Speaker, I would like to comment briefly on government borrowing operations since the beginning of the current Fiscal year, and the extent of borrowing authorities that have been used. The act that granted borrowing authority for 1981-82 brought new borrowing authority for $14 billion. Hon. members will recall that it was given royal assent on April 8, 1981. From April 8, 1981 to February 1, 1982, the government raised a total of $9,700 million in new funds on the domestic markets. Of that total, $9,600 million came from
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Canada Savings Bonds and $2 billion from marketable bonds, while net redemptions of treasury bonds lowered by $1,900 million the amounts borrowed that I have just been referring to.
The government raised $300 million on foreign markets through private placement of an issue with the Saudi Arabian monetary authority. Drawings had been made earlier in the year on our renewable line of credit with Canadian banks, but they were all repaid. There is currently no drawing in process on that line of credit nor those opened with U.S. and international banks. Taking into account the bond issue in foreign currencies, by February 1, the government will have used $10,100 million of borrowing authority, leaving an unused balance of $3,900 million. This summary of borrowing operations of the current balance of borrowing authorities should provide hon. members with the information needed for their assessment of this first part of the legislation. Clearly we will have an opportunity, during later discussions, to answer more precise questions and supply further data on these various operations, as called for in the Standing Orders, at a later stage of our proceedings.
Part II of the legislation, as I said in my opening remarks, implements the first ways and means motion, dealing with the Excise Tax Act, which the Minister of Finance (Mr. Mac-Eachen) brought down in his budget on November 12, 1981. It provides for three technical amendments concerning the federal sales tax, and also proposes changes to the natural gas and natural gas liquids tax. The hon. members and the public had an opportunity to hear wide discussion of the principles underlying the energy policy of the government of Canada. They are also aware that, thanks to the remarkable work of the Minister of Energy, Mines and Resources (Mr. Lalonde), the Canadian government reached an agreement with the main oil producing provinces. The agreements and understandings required certain amendments to the oil and gas taxes, and further to the income tax on oil revenues.
In the bill, federal tax on natural gas exports has been removed, except on natural gas from Canada lands. The zero rate will be in effect during the period from October I, 1981, until December 31, 1986; in other words, for the duration of the agreements concluded with the producing provinces. The bill also provides for refunding tax on ethane exported during that period. The tax on domestic sales of natural gas will be set in such a way that the wholesale price including tax and cost of transportation to wholesalers in Toronto is about 65 per cent of the average price paid for crude oil by refiners in Toronto. This will be a strong incentive for conversion to natural gas, while consumers already using natural gas will continue to enjoy substantial benefits.
As of January 1, 1982, the tax rate was 42 cents per gigajoule, and it was raised to 63 cents per gigajoule on February 1, 1982. The legislation as it stands now provides for a rate of 56 cents per gigajoule for the entire year. Thus, the

February 16, 1982
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rate will largely depend on the blended oil price, which in turn varies according to the international price of oil. The following technical changes have been made in the sales tax system. First of all, the excise tax rate has been lowered on wines of all kinds containing not more than 1.2 per cent absolute ethyl alcohol by volume. Small manufacturers can apply for refunds of sales tax paid on machines and equipment purchased for use in their manufacturing operations.
Finally, the penalty on default of payment of federal sales and excise tax will be raised from 1 per cent to 1.5 per cent per month. Hon. members will recall that in his last budget, the Minister of Finance announced a major change in the sales tax system, namely, that the tax would be applied at the wholesale instead of at the manufacturer's level. This change in the Canadian sales tax system will be considered by hon. members at a later date. In fact, last week, the Minister of Finance said that when the bill was tabled we would have an opportunity to discuss in greater detail all the aspects of this major change in the application of the federal tax. Part III of the bill amends the Petroleum and Gas Revenue Tax Act. The tax on oil and gas production revenue which was introduced in the National Energy Program on October 28, 1980, will, or rather has been raised from 8 per cent to 16 per cent as of January 1, 1982. However, taxpayers will be able to take advantage of a new resource deduction on all oil and gas production revenue subject to this tax.
The bill also contains a provision allowing for reduction of tax on synthetic oil production projects during the initial years of production. The bill also provides for a tax on incremental oil revenue, which will be applied to production of oil found before 1981. As of January, 1982, this tax will be 50 per cent of incremental revenue, after deduction of related Crown royalties. Incremental revenue occurs because prices for old oil are higher than the prices established in the National Energy Program announced in 1980. Revenue thus taxed will be exempt from income tax. In addition the same tax will be reduced with respect to wells producing less than 20 barrels per month. This reduction, also known as the adjustment for low productivity wells, will be of substantial benefit to producers in Saskatchewan, where many such wells exist.
Mr. Speaker, the bill also includes several minor technical changes designed to lessen the impact of the tax on oil and natural gas revenue. Although removal of the export tax on natural gas will reduce revenue drawn from this resource, all changes included in the energy agreements concluded with the producing provinces will increase revenue received under the Petroleum and Gas Revenue Tax Act. Thus, the net effect of all these changes will be to reduce the government's financial requirements in the future. The bill will also help bring about a more equitable distribution of the revenue generated by oil and gas production and will provide the industry with sufficient liquid assets while removing the uncertainty that existed
before the energy agreements with the provinces were finalized.
In the final instance, Mr. Speaker, the bill constitutes a major component of the government's long-term financial plan, and one of its major aspects as it relates to the energy agreements signed with the producing provinces. I believe that this bill, which implements a number of fiscal changes that have been approved by the provinces and whose purpose is also to seek borrowing authority for the next fiscal year, is fully deserving of the support of this House.


Hon. Michael Wilson (Etobicoke Centre):: Mr. Speaker, today I have carefully listened to the minister discuss the direction that this borrowing authority should take, and some of its other, more technical, aspects. Before the minister breaks his arm while patting himself on the back, I just want to ask him to reflect on a few things which are related to this bill and the budget out of which the bill arises.
The budget has put thousands of people out of work. The interest rate policy has been caused over the years by runaway spending and massive deficits. It has forced thousands of people to be laid off and has forced bankruptcies of farmers, fishermen and small-business men. It has caused individual home owners to suffer huge increases in the interest rates on their mortgages. It has caused disruption of their personal budgets as they try to find $200, $300 or $400 to meet their payments. The anger, frustration and anxiety this has caused in the country should be enough to show the minister that he has no grounds whatsoever to justify this display of self-congratulation and self-righteousness. He thinks this is a good bill.
The bill contains the same mistruths as those contained in the budget, the mistruths which do not address the fact that spending is up by 22 per cent. The minister repeated the same statements, the same mistruths which are in the budget, when he said that this is a budget of restraint and that the government has tried to hold back spending. Surely, a 22 per cent increase in government spending while the national economy of a country is growing at a rate of 14 per cent or 15 per cent per annum shows no sign of restraint. The government has been making the same attempt to mislead Canadians by repeating again and again that 12 million Canadians will pay less taxes. Surely by now, all Canadians know that is not true, as people are paying hundreds of dollars more each year through energy taxes, and those are the taxes which they cannot avoid paying. The minister continues to repeat this, even after we have shown his boss, the great deceiver, the Minister of Finance (Mr. MacEachen), that Canadians do not believe and will not accept those mistruths.


Ian Deans: How about interest rates?


Michael Holcombe Wilson: I will come to interest rates in a few minutes, so do not leave the House.


Ian Deans: Don't worry!
February 16, 1982


Michael Holcombe Wilson: Today we are once again hearing words with no substance. The minister has made a totally irresponsible statement because he has not addressed the questions which should be addressed by any minister who comes to the House to ask permission to borrow $6.6 billion worth of taxpayers' money. That is what was missing from the statement given today.
There were many questions left unanswered, and I will pose some of those questions to the minister. I hope that when we reach Committee of the Whole and discuss these matters, there will be answers to the questions that I will pose; because if there are no answers, there will be no passage of this bill in the House.
Let us focus on the need for this borrowing authority. I think the fundamental question all Canadian taxpayers are asking themselves is whether the government is effectively using the taxpayers' money and using it with care. There is no indication in the budget or in the statement the minister has just given that the government has any understanding of what is going on out there in the real world. It does not seem to realize that people are losing jobs and are being forced to cut back this spending at the same time as this government is increasing its spending by 22 per cent.
The reason for the deficit and for the borrowing requirement which the minister has requested today on behalf of the government is because spending is increasing by 22 per cent.


Mr. Evans:: That's nonsense.


Michael Holcombe Wilson: I will come to that. The reason for this spending increase and the deficit which that causes is that there has been a 31 per cent increase in revenues which places a tremendous burden on all Canadians. It is slowing down the economy.
The parliamentary secretary just raised the question of the 22 per cent increase in spending. Again and again, I say to the minister from Hamilton Mountain-


Ian Deans: Thank you! Just a member!


Michael Holcombe Wilson: I will repeat the reason I use the figure of 22 per cent. The minister uses the figure of 16 per cent. He knows that the national accounts increase is 22 per cent. He will not deny that. That is in the budget papers in black and white. Any economist, and I believe that the parliamentary secretary is an economist, will say that that is the broadest way of measuring the impact of the government on the economy.


John Leslie Evans: True.


Michael Holcombe Wilson: He will also note that in recent years the government has used the device of pulling tax or government spending out of the normal public accounts and putting the money off into many little ones, such as the petroleum compensation fund, the Canadian ownership fund, the Syncrude charge fund and the unemployment insurance fund, and all these little funds which are off here on the side. They are still financed by taxes which all Canadians pay. It is the amount of
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spending in all those funds, plus the amount of government spending, which has gone up by 22 per cent.
If the minister likes to use 16.3 per cent, which is the figure for public accounts, I ask him to be fair and honest, if that is possible, with the people of Canada and to compare the two years on a comparable basis. He knows that in the year 1980-81, the figure to finance the costs of the import subsidy was something like $2.3 billion. He also knows that for 198182, that has been taken out. He cannot deny that, can he?


John Leslie Evans: It was still on the same basis, though. They were put in both ways.


Michael Holcombe Wilson: Then if we take out the $2.3 billion from the 1980-81 figures and compare the resultant figure for 1980-81 with the comparable figure for 1981-82, what do we come up with? It amounts to a 22.3 per cent increase. Therefore, either way one looks at it, whether it is on public accounts or national accounts, there is still a 22 per cent increase. I challenge hon. members of the government, as I challenged the minister on a couple of occasions and as I challenged the Minister of State for Finance (Mr. Busssieres), to deny that figure. That is the figure that Canadians believe because they know it is the right figure, and that is the one we will continue to use.
Part of the reason we have been opposing this figure of 22 per cent is that the size of the national economy has been growing by only 14 per cent in this current year. Therefore, people ask what causes inflation. Clearly, if the government is growing 50 per cent faster than the size of the economy, that is inflationary. That has got to put pressure on the resources of this country.
That is why we say there has to be a cutback in government spending. There must be a cutback into the range the minister has talked about for a number of years now, namely, that we must have government spending growing within the rate of growth of the national economy. When has it ever happened? In 1979 when the Progressive Conservatives were in power. Other years it has been way out of whack.


Miss Begin:: When they wanted to cut family allowances.


Michael Holcombe Wilson: We never cut family allowances and we still had a figure inside the rate of growth in the economy. The minister should know better than that, if she can understand figures.
There has been no indication in the budget and no indication in the minister's statement on Bill C-93, the borrowing authority, of any attempt to hold back the growth in the spending of the government. It appears to be business as usual.
The minister says they have control of spending, that certain restraints have been put in. What are those restraints? What are the solid indications that this government has any concern at all as to the inflationary impact of the growth on spending that it introduced for this year? There has been no attempt to cut back. When we get to Committee of the Whole, we will

February 16, 1982
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want some indication that there is a degree of concern on the part of the government in this area.
1 want to know where the government has cut back in the 1981-82 and 1982-83 figures that it had not anticipated in the 1980 budget projections. 1 would like to know where the cutbacks have taken place, the total amount of the cutbacks and in which individual departments they have taken place. Then we can judge whether the government means what it says when it says this is a budget of restraint.
1 would like to know whether they are embarrassed or worried about the 22 per cent increase. I recall a committee meeting before Christmas when the Minister of Industry, Trade and Commerce (Mr. Gray) was presenting supplementary estimates. He told the sorry story of the Consolidated Computer Company. He came to committee to ask for approval to write off $124 million, the total government involvement in that company. At that meeting I asked the minister who were the people responsible for this loss. I asked him four or five times in different ways. Each time 1 received fuzzy answers. Finally I said to him, "I guess you do not want to tell me who it was, but let me ask you one question: Did you ask who was responsible? Did you ask who had given the advice which led the government to take this large loss of $124 million?" I had to ask the question four times. Each time 1 received basically a no answer.
The conclusion I came to was that the Minister of Industry, Trade and Commerce could not care less about losing the $124 million. All he was interested in was finding a way of sweeping that loss under the carpet so that he would not have to be embarrassed in front of the committee or the media. That is the attitude of this government, that is the attitude reflected in the 22 per cent increase and it is the attitude of the minister when he presents this request for $6.6 billion. He is not concerned about the spending increases of the government. He is just asking for money so he can throw more money after the money he has already spent.
What are the cash requirements today? I listened carefully to the minister who said we need this money to cover the cash requirements in the budget of something like $6.6 billion. Since that time the minister has indicated that the deficit will be increased. He indicated that the economy is growing more slowly than it was at the time the budget was put together. The minister indicated there would be more payments of unemployment insurance and fewer payments coming in as revenue as a result of the weak economy. The tax will not be there because the profits are not there. What has happened? Do we still only have $6.6 billion worth of cash requirements, or is there a change in that figure? The minister did not address himself to that.
This also bears on the question of established programs funding. Since the budget we have had two mistakes by the government concerning what those numbers are. I thought we might have had an update on those. What are the current figures on the established programs funding?
I also wonder about the post office. Are we looking at the same figures? I am told that the president of the Canada Post
Corporation said this morning, "Those are not my figures, they are the figures of the Minister of Finance. The Minister of Finance never asked us what deficits in the post office the government would have to cover." Let us look at what the numbers are before the minister asks us for borrowing authority for that amount of money.
We have seen the Minister of Employment and Immigration (Mr. Axworthy) using a little sleight of hand, taking some money out of the unemployment insurance fund, all legitimate and legal, shifting it from here to put in programs there. What impact will that have on the cash requirements of the government? We have no understanding, no sense of confidence that the government is on top of the cash requirements it has today.
On December 18-I am sure members on the Liberal side will remember this for many, many years-they sat embarrassed listening to the Minister of Finance withdraw 17 or 18 parts of the budget which affected 52 or 53 areas of the ways and means motions. Surely that has an impact.


John Leslie Evans: Withdraw?


Michael Holcombe Wilson: Withdraw. They were massive changes.


John Leslie Evans: How many were withdrawn?


Michael Holcombe Wilson: I ask the minister to consider what the impact of those changes was and what the dollar amount was. Does it still mean the same cash requirements or will that increase? From my understanding of some of those changes, there will be a substantial increase in the amount of money.


John Leslie Evans: He gave you that in the House?


Michael Holcombe Wilson: I am looking for the dollar amount. He did not reply to the question as to what the change was going to be for this current fiscal year or the next fiscal year. That is the question we need answered. It has not been answered.


Mr. Blenkarn:: He won't answer.


Michael Holcombe Wilson: fully at what prices additional sources of oil and additional sources of alternate energy besides oil and natural gas will be brought on. For that reason we should expect there will be some lower prices than was expected at the time that agreement was signed. That again is going to affect the spending and the revenues of the government.
We have no confidence at all that the deficit-the cash requirement-indicated in the budget of November 12 will hold. We have no confidence because of the flip-flopping of the minister and because of the weakness in the economy which he was not on his toes enough to understand would occur, although it already was occurring right below his very feet. These are the questions which must be answered. It is totally irresponsible of the minister to come to the House today and ask for a borrowing authority of $6.6 billion and give us no answers at all to the questions I have just posed.
When I listen to the minister speak, I do not think there is any understanding on his part of what the government will need to borrow by the end of the next fiscal year. I would like to put the government on notice that there will be no approval for this borrowing authority from this side of the House until we get some answers to these questions.
I do not know where the minister has been. When he comes into the House and ignores the basic questions, it is clear that he has missed the message and the furore which have been the result of the budget. The minister has missed that message totally. Canadians are frustrated and angry and they want answers. To date answers have not been given by the minister. Government spending will increase by 22 per cent at least.


Mr. Thacker:: That is before supplementary spending.


Michael Holcombe Wilson: That is before supplementary spending. But when we get to the bottom line, Canadians will have to pay 31 per cent more in taxes this year and, over a two-year period, 50 per cent will be the increased tax load on Canadians over all. I refer in this respect to this current fiscal year and the next fiscal year. Canadians want answers. The minister is irresponsible because he has not brought those answers to us today.


Blaine Allen Thacker: Canadians need an election.


Michael Holcombe Wilson: Let me quote from the economic and financial outlook of Pitfield MacKay Ross because I think it is an important backdrop to what we are talking about today. Pitfield MacKay Ross say:
The economy is firmly locked into a very serious recession. In a display of monumental bad timing the Canadian authorities have chosen precisely the wrong time to slam on the fiscal and monetary brakes. In the circumstances we expect the current recession to produce the most severe economic setback of the post-war era.


Mr. Peterson:: You want to increase the deficit, do you?


Michael Holcombe Wilson: What we are talking about here is the level of confidence in the economy as reflected in that statement and
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as reflected in the concern of Canadians about the outlook for the economy.


John Leslie Evans: Who wrote that?


James Scott (Jim) Peterson: You want to increase the deficit, do you?


Michael Holcombe Wilson: That was written by a firm, the brother of a partner of which is secretary to the Privy Council.


John Leslie Evans: McLeod Young Weir?


Michael Holcombe Wilson: Pitfield MacKay Ross. Pitfield. The hon. member has heard the name before.


Mr. Cullen:: A great Canadian.


James Scott (Jim) Peterson: Do you subscribe totally to what they are saying?


Michael Holcombe Wilson: A question the minister merely touched on but did not really address is the Canada Savings Bonds debacle of last year. We as Canadian taxpayers were asked to support a 19.5 per cent interest rate on Canada Savings Bonds. In October, before the Canada Savings Bonds campaign was well along, we asked in this House whether the rate could be changed. We asked if it could be reduced because, we said, otherwise it would cause tremendous problems. The minister said it could not be reduced. He kept the interest rate at 19.5 per cent. He forced interest rates up and kept them up on other instruments. As a result of that very generous rate, he also sucked an abnormal amount of savings out of the private sector where they would have created jobs and reduced the unemployment level we have today. That money was used for government spending. That decision was very inflationary.
That Canada Savings Bonds move created an enormous debt management nightmare. Canada Savings Bonds were issued in 1978, 1979, 1980 and 1981 and, as a result, the total amount outstanding is now about $20 billion. We had a policy-and this goes back five or six years-of reducing reliance on Canada Savings Bonds in over-all debt management operations because it is effectively demand money, and I believe it was in 1979 that the Conservative government got into a box because of the debt management problem left to it by the Liberal governments of previous years. During the period from, I believe, 1975, the proportion of Canada Savings Bonds to the national debt dropped from 38 per cent to 20 per cent. It got down to a more manageable figure. However, what has happened as a result of the debacle last fall? The proportion of Canada Savings Bonds as a percentage of the over-all debt outstanding is now back up to 38 per cent. We are back to where we started. Canada Savings Bonds are costing us 19.5 per cent and will present to future governments a tremendous debt management problem as they try to manage this great big lump which will have to be renewed each year, year in and year out, at a very substantial cost to the taxpayers of this country. 1 was hoping the minister would respond to that concern. I thought we might hear some explanation as to whether this is a new policy of the government and whether it is planning to return to the bad old days of a heavy reliance on

February 16, 1982
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demand money, but there is complete silence. Why were there no comments on that today?
I wonder whether part of the answer to this is to be found in the section of this bill dealing with the excise tax and the production tax, or the PGRT. I do not think the minister commented on this. I missed part of his comments, but I do not think he even made reference to this. In the excise tax section of Bill C-93 we see that the maximum tax per giga-joule of natural gas is increased from 75 cents to $4. I do not believe the minister gave us an explanation as to why, but the import of this is that that $4 tax will raise $8 billion in taxes from Canadian taxpayers. What is the reason for raising this tax now? I could understand increasing the tax from 75 cents to $1.25 or $1.50 or perhaps even $2. However, at $4 the ceiling clearly is too high, unless the government has something in its hip pocket with which to surprise us. There is no discussion of the reason. There is no explanation to the taxpayers of this country. The minister ignored this matter-or chose to ignore it-and to me that is the height of arrogance. It is the ultimate insult to the Canadian taxpayers to increase this tax and to give absolutely no reason for doing so. That surely is another question which could be discussed by members of the Liberal Party in Committee of the Whole.
In the 1980 budget these two taxes, the excise tax on natural gas and the production tax-the PGRT-were introduced. At that time members of the Conservative Party opposed those taxes. We said they would be very damaging to the future outlook for energy in this country. We said that the energy security of this country would be severely damaged by the extent of those taxes. We fought hard, but we lost because we have a majority government. However, I would like at this time very briefly to review the impact of the national energy policy and those two taxes on the energy industry in the country today.
Drilling completions are down 26 per cent from 1980 to 1981; exploration spending is down 22 per cent from 1980 to 1981; production per day is down a small amount, 100,000 barrels per day. The impact of this lower spending on exploration and drilling will be seen perhaps not this year, but two, three, four or five years from now. Future generations will suffer from the shortcomings of these policies.
The reason for the setback in the development of the industry is that the cash flow of the industry has dropped by 35 per cent. Money that had previously been spent to develop future natural resources has been translated into government spending dollars which have been wasted. It is just throwing good money after bad with this 22 per cent increase in spending.
In principle we support the Canadianization policy but we cannot support the fundamental approach that has been taken by this government because it has scared money out of the country in a serious way. I will come back to this subject later, Mr. Speaker.
There has been a small increase in the amount of Canadian ownership of the industry but it has been at vast cost to Canadians because of the way it was done. I shall also come back to that subject.
The rigs that have left the country represent about $1 billion of investment that has moved quietly from Alberta to Wyoming, Texas or Oklahoma and other states where those rigs are wanted and will be good for that country. They left this country because there is no work here. At the present time, 73 rigs are down and 187 have left the country, making a total of 260 either sold or shut down. That represents 40 per cent of the rigs that were in Canada on the night the National Energy Program was introduced.
In addition, the Cold Lake heavy oil project has been put on the back burner. About a year ago I said it was cancelled but the minister said it was just postponed. It has been effectively cancelled. The Alsands project is hanging in the balance as a result of the heavy tax load and other circumstances that have changed. These are two major projects and would represent about 10 per cent of our national income if they were to go ahead.
The government has frittered these opportunities away and this will cost jobs in Alberta, in Hamilton, in Toronto, in Windsor, Montreal, Ste. Therese and other places in eastern Canada. This is important now that so many people have been laid off, and the conclusion is that it has been a tremendous disaster for the whole country.
For years the Liberal Party and the New Democratic Party have ignored the problem of the deficit. The statements of the Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion, the Minister of Justice and Minister of State for Social Development (Mr. Chretien), the Minister of Finance and the Prime Minister (Mr. Trudeau) about our policies when we formed the government are still ringing in my ears. They said that we had too great a preoccupation with the size of the deficit; that we had a fixation on the size of the deficit; that we spent too much time concerning ourselves about it. They ridiculed the 1979 budget because we were concerned about living within our means and getting the deficit down to a reasonable size.
I think it is clear to all Canadians today why we felt getting that deficit down was so important; it represents a tremendous weight on the economy of the country and for too many years now we have seen it grow. Some time ago the cost of financing the deficit and the accumulated debt was some 10 per cent or 12 per cent of government spending. In the current year the cost of financing the federal government debt is 21 per cent, so one dollar out of five is dead weight money.
Any Canadian who has seen the cost of financing his own debt, whether it is a mortgage, a loan on a car, a Visa account or whatever, knows the problem of debt load and the cost of financing it. Spending on interest provides no satisfaction; it does not put food on the table, a roof over one's head, a car in the garage, clothes on one's back or anything like that. It is dead weight spending. Canadians now understand that one
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1506!
dollar in five is spent by this government on dead weight deficits that have been accumulating over the years.
Canadians all across the country are scrambling to get out of debt. They are paying their debts off, any chance they get. But there is a 22 per cent increase in spending by the government which has not learned what it is like to live in the real world where debt has to be financed without raising taxes.
Let us examine what is going on in the United States where they are terrified at the level of their deficit this year and predict that next year it could be in excess of $100 billion. They are trying to find ways to cut expenditures and keep down the size of the deficit. With the normal ten or 12 to one relationship between the United States and Canada, a $100 billion deficit in that country would mean about a $13 billion deficit in this country. Yet there is no sense of our government trying to find ways to save money. That is why I have asked the minister, and I hope he will listen, if he can demonstrate where efforts are being made to cut spending. All we have are the empty words in his speech and in the speech of the Minister of Finance.
I should also like to refer to the spending growth in the United States because I think that is instructive as well. In 1981 it was 13 per cent and in this country it was 22 per cent; in 1982 it was 10 per cent in the United States and 13 per cent or 14 per cent here; and according to forecasts we may even face higher figures.
The federal government is the largest single entity in the country, the largest borrower. When it has to borrow large sums of money it crowds out individuals, small business, medium-sized business, farmers, fishermen and even big business, and these people become afraid of the situation.
1 should like to quote some comments made by the Governor of the Bank of Canada. I think it is important that we understand why it is necessary to cut back on government borrowing-so that we can free up the resources of the country that the private sector may borrow. The Governor of the bank said that restraint on investment is felt through various channels, one of which is that the fiscal deficit absorbed savings that could otherwise be channelled by financial markets into financing the expansion of plant and equipment. He said that this could militate against the increases in productivity and income that capital formation makes possible.
What he is really saying, Mr. Speaker, is that borrowing by the private sector-individuals, small, medium and large-sized companies-enables those companies to make themselves more competitive, more productive, more able to employ people and more able to create jobs in this country. Surely the government understands the importance of creating jobs when there are 1.1 million people out of work today. Business survives on longterm capital.
We heard the Minister of Agriculture (Mr. Whelan) talk about the importance of lower cost and stable capital to the agricultural community. Those same words can be used in respect of any sector of the economy. What has happened in
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recent years, because huge deficits were built up by the government, is that the stability, availability and cost of long-term capital has been thrown totally out of whack. If businessmen, farmers, fishermen and individuals do not have access to capital, it will make for a very disruptive economy.
In order to draw this down to a level which anyone in the House can understand, today we heard complaints about the fact that mortgage money is not available for 20 or 25-year terms. It is my understanding that there are only three institutions which will make five-year money available in the form of mortgages for the purchase of homes. If Canadians are faced with the possibility of buying homes but not knowing what the mortgage rate will be in one year or two years, it is similar to playing Russian roulette; it is a large crap shoot in Las Vegas. They do not know what will be the cost of their biggest asset.
This is why we must have stability in the financial markets of the country. It is not big business people who suffer in this regard; it is people who borrow to purchase homes, or small businessmen who must finance businesses which provide employment for people. If they do not have the benefit of stable financial markets, it will make a very difficult economic environment within which to operate. The real crunch is on farmers, fishermen, small-business men and home owners. We should be concerned about those people. It is very clear to them why the Conservative Party has stressed the importance of keeping the federal government deficit within the bounds of the financial markets of the country and within its financial capacity. Clearly it has not done so for a number of years.
I should like to talk about one other aspect of federal government deficits, and that is its impact upon future generations. We all know that a deficit is simply a deferral of taxes. The government has expenditures of some $70 billion and it has revenues coming in of $57 billion. Clearly tax revenues are not sufficient to cover spending, thus $13 billion of deficit is borrowed. Is it lost forever? Not on your life! What happens when $13 billion is borrowed this year at 15 per cent per annum? In five years' time, in 1987, it will become $26 billion; by 1992 it will become $52 billion; by 1997 it will become $104 billion. One could apply that calculation to next year's deficit or the deficit of the year after. They pile up one on top of the other. Some of us who are in the House today may not be around in the year 2000 to pay the load of these deferred taxes; it will be our children who will pay. The legacy we are leaving for younger people, who are having a hard enough time finding jobs because of the shortcomings of government policy, is that they will be suffering from the shortcomings of the same policy in 1995, 2005, and so on. This is why we must get on top of the deficits of today.
Again I ask the minister why the government is so casual about its attitude toward deficit and spending control. I looked at the home owner renewal program of the recent budget wherein the government very generously provided a guarantee for a home owner if he does not have sufficient income to pay his mortgage payments because his payments are more than 30 per cent of his income. The government said that it would provide a guarantee so that he could borrow. 1 think Canadi-

February 16, 1982
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ans are too smart for this. They have seen the government doing it year in and year out, and they have seen the impact of a government which now pays $1 in $5 in interest. They know that if they defer some of their interest payments for one, two, three, Five or ten years at 15 per cent, 18 per cent or 20 per cent, the same thing will happen to them. But they understand why the government is so casual in presenting such a program; it is the manner in which the government has lived for the last ten years. It encourages the home owner to put himself more and more into debt, as has the government.
I think this is the best illustration we can give to government of why it is wrong to present a bail-out program for individual home owners. Surely it should look no further than at what happened with its own financial position before asking individual home owners to put themselves in the same financial position by deferring debt and expenses for years into the future and by letting them compound at 15 per cent or 20 per cent per annum. It is criminal to ask Canadians to do this. I do not think any home owner will be too anxious to take this snake oil because they know the results.
I should like to talk about some of the problems we are facing and about some of the ways of solving them. We on this side of the House have been asked on a number of occasions what we would do differently or how we would attack the problems of today. I think the difference becomes clearer every day. On many occasions I have referred to increasing attempts by the Liberal government to gain more and more control or power over the big levers of the economy. We have seen how pushing the economy into the dirt, raising interest rates to enormously high levels and forcing cutbacks in the economy have forced people into positions where they must come to the government to ask for help and for programs to tide them over these very difficult times. We do not want to see it done that way. We want to reverse the direction we have been going in recent years. We want to make a change which will return spending power to Canadians and will release the tremendous energy of the free enterprise system. We have confidence in the free enterprise system.
How can we do this? How can we come up with a way which will lead to a reduction in inflation, to an increase in growth in the economy and to more job creation? There are no perfect solutions or comparisons, but I should like to look at what happened in Japan and Germany for some inspiration. During the 1970s, these two countries had the strongest currencies and the lowest levels of inflation of any industrialized country in the world. This is no real surprise because those two factors are mutually supportive. We know that a strong currency is a sign of good government. Canada by contrast has seen its currency drop from a value of $1.03 in 1976 in terms of the United States dollar to 80 cents in the current market. We also saw last year, in contrast to these other currencies, that Canada suffered a massive capital outflow, some six times the levels of the 1970s. I should point out that a large part of that outflow was dynamic equity capital, the capital that creates jobs. It is the entrepreneurial, risk-taking capital that has left the country. To offset that Canada has had to put up
interest rates two or three percentage points higher than they should be to attract not the entrepreneurial capital but fixed income. This is passive capital, the capital that does not create jobs anywhere near the extent the risk-taking capital does, the capital that has left the country.
The reason for the outflow of this capital is federal government policy that has been in place for the past two years. We have seen the energy program and what that has done for the country. We have seen the tremendous lack of confidence which investors, businessmen and individuals have in this government on the policies it has been pursuing over the past two years. We have seen the unfriendly attitude of this government toward risk-takers, and capital formation has forced that money out of the country. As a result a tremendous load has been put on all Canadians. Canada has to keep those intest rates two or three percentage points higher than they need be. That is a tremendous burden, not only upon the people who have been forced to take the money out of the country and upon all Canadians who are financing a business or a mortgage, but also upon large companies that are trying to build major projects. The toll is measured in human suffering. It is measured in the loss of a job, bankruptcy or the renewal of a mortgage at ten or more points higher. In addition to this we have the broad slowdown seen in the economy.
Some people have said let the dollar drop. Some people have said let the dollar go and do not worry about the inflationary aspects of doing that. I say that is the wrong way to go. That is the easy way out. It might shield us from those problems for one or two years, but then we will be back to where we started unless we introduce fundamental policies that will get us back on the rails again.
We need those policies today. We should not give ourselves the short-term palliative of letting the dollar drop and letting interest rates drop. If we do that and the dollar drops as low as 75 cents in terms of the U.S. dollar, then we are faced with having to get interest rates back up. What have we changed? We have changed nothing except for a large increase in costs in the imports that are needed in Canada.
We should introduce some policies to restore the level of confidence in the country that will encourage Canadians and foreigners to bring back that money which they took out over the past year or year and a half. We can then revive our dollar, giving us the flexibility to drop interest rates to the level they should be and so they are more consistent with the economic circumstances in this country. That is the direction we should be going. We should take the pressure off our dollar and have our own made-in-Canada interest policy.
How can we do this? First, we have to maximize the involvement of the private sector. The private sector is the sector in this country that creates jobs. If we look at every statistic in Canada we will see that employment growth in the government sector has been pretty well flat over the last ten years. Growth takes place in the private sector. It is in the private sector now where job creation has dropped out of sight
February 16, 1982

as a result of all the lay-offs caused by the interest rate policy of this government. We have to avoid the direct massive spending programs which the New Democratic Party would have us introduce. They will lead only to more inflation in this country. Let us encourage the private sector.
Second, we have to recognize the anti-investment nature of this budget. It will continue to push money out of the country. That direction must be reversed. We have to reintroduce some of the incentives that were taken away by the budget, incentives that have performed a valuable role over the past five or ten years.
How do we do that? Again, I have to keep coming back to the runaway spending that we have in this country. If we can cut back a little on government spending, more money will flow to the private sector where it will create more jobs, not more taxes.
Next we have to get on with megaprojects. These projects are tremendously important to all parts of the country. Let us have a positive attitude on the part of the Minister of Energy, Mines and Resources (Mr. Lalonde) and get these projects moving. He should not sit back and concern himself too much with legal aspects and the nuts and bolts of negotiations. He should be taking the broader view of what these projects can do for Canada.
We have a crisis in housing. In my view we have to reverse four key budget measures which have done so much damage to the housing industry. We should enhance the capital cost allowance. We have to take a look at the Foreign Investment Review Agency. We should try to change the nature of FIRA. The government is playing a schizophrenic role. We have heard from the Minister of Energy, Mines and Resources and the Minister of Finance. On the one hand, they say we have tremendous capital requirements in this country. On the other hand, they make statements that scare foreign money away. Let us take a look at what our objectives are with foreign investment. We should get our act together. If we have money coming in from other countries, we should bring it in under our terms and encourage it. We should not be discouraging it through these malicious statements being made by members of the government.
Federal-provincial relations in this country are probably at an all-time low today, if they are not already at that point. I would say that is the single, most important element in the lack of confidence of individual Canadians and foreigners who consider investing their money in Canada. When people see that the Government of Canada and the provincial governments cannot get together and agree on some of the basic requirements of this country, people say "Let's try elsewhere". That is one of the reasons so much money left Canada last year.
We have to recognize the tremendous importance and the potential of research and development in this country. Canadians can compete. We have proven ourselves through companies such as Mitel Corporation, Northern Telecom Limited and Canadian General Electric. These companies have competed worldwide.
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Jack Sydney George (Bud) Cullen: What about Petro-Canada?


Michael Holcombe Wilson: Petro-Canada has not competed yet with the rest of the world. These other companies have competed and they have proved they can do it. We heard in the special committee on the budget that the environment for risk-taking investment-and we have to recognize that research and development entails a tremendous degree of risk -is poor and the budget has made it worse. We have to reverse the measures in the budget which have had that effect. We have to turn them around. We have to get a positive attitude in that industry so that we can see some growth and development coming from that part of the industry.
I see the Minister of State for International Trade (Mr. Lumley) is in the House. One of the other areas in which we should do better is in trade promotion. I congratulate the Minister of State for International Trade on the efforts he has made in improving the profile of the government in that Field.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: 1 think the minister will agree with me when 1 say that the government's profile was dismal prior to May, 1979. We have to recognize that we still have a long way to go in the manufacturing sector. We now have a $23 billion deficit, up from $3 billion ten years ago. That represents a tremendous loss of jobs and development. The same thing is taking place in the United States, Germany, Japan and so on. We have to change that situation.
So, Mr. Speaker, I believe that if we can turn the atmosphere around and increase the confidence level through a combination of these policies, Canadians will start believing in their country again and that we have and can build a future in Canada. We can increase productivity and see a higher value Canadian dollar, which will allow us to drop interest rates. That combination of factors will result in lower interest rates, lower inflation and certainly a much more productive economic environment. That is the direction we have to go. We have to get hold of ourselves to go in that direction, and I think the combination of policies I have set out will allow us to reach that potential.
Now, Mr. Speaker, the reason 1 believe Bill C-93 and the minister's statement are so disappointing, so irresponsible today, is that the bill does nothing to rebuild that sense of confidence which has been so shattered in recent years and which is so necessary if we are to attain that growth. We have to have a return of confidence if we are to see a return of capital into this country. The return of dynamic job-creating capital to Canada would allow us to reduce these painful lay-offs which have been so damaging to our economic future. I say to you: Is it any wonder that Canadians, faced with this picture and with the statement that has just been made, are asking themselves why the Minister of Finance does not resign?

February 16, 1982
Tabling of Documents



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Nepean-Carleton (Mr. Baker)-Municipal Affairs-Application of grants in lieu of taxes program; the hon. member for Mississauga South (Mr. Blenkarn)-Education-Federal funding for post-secondary education (b) Level of funding; the hon. member for Skeena (Mr. Fulton)-Mines and Mining-Loan to Peru for copper mining venture (b) Creation of jobs in Canada.


Marc Lalonde: Mr. Speaker, this afternoon I tabled two documents which were supposed to be the last two safety inspection reports relating to the Ocean Ranger drilling platform. I inadvertently tabled the report of January 6 rather than January 21. Consultations have taken place with the opposition parties and with your permission I would like to revert to tabling of documents and have the authorization to table this third document.


Mr. Deputy Speaker:: Is there unanimous consent for the minister to revert to tabling of documents?


Some hon. Members:: Agreed.



ROUTINE PROCEEDINGS


Marc Lalonde: Mr. Speaker, I wish to table a document dated January 21, 1982, entitled "Safety Inspection Report on Offshore Drilling Operations", to be added to the two documents tabled this afternoon.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Bussieres that Bill C-93, to amend the statute law relating to certain taxes and to provide other authority for the raising of funds, be read the second time and referred to Committee of the Whole.
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, I rise with pleasure this afternoon to speak to Bill C-93. I must say that I enjoyed listening to the comments of the lonely cheerleader, the Minister of State for Finance (Mr. Bussieres), as he attempted to pat himself and his party on the back by outlining the positive nature of seeking authority to borrow $6.6 billion. I must say, Mr. Speaker, that while he went on to indicate that the Liberal way of approaching the financial problems facing Canada is the way of reason, I am certain I speak for all members on this side of the House when I say it appears to us that their approach is the way toward economic treason in terms of combating the financial challenges facing us today.
Since this bill, Mr. Speaker, includes three quite separate areas for consideration, and considering the time constraints placed on us, I am going to focus my attention on only one section of the bill, that having to do with the borrowing authority for $6.6 billion. I think anyone who is appreciative of the financial and economic concerns of Canada today, anyone aware of the assumptions which went into the creation of the budget, will recognize that current money supply is certainly inadequate to meet the government's cash requirements for the 1982-83 fiscal year.
There is, Mr. Speaker, an old song we would all recognize which extols the virtue of the west. One of the lines in that song is "Where seldom is heard a discouraging word". Well, I can guarantee, Mr. Speaker, that that no longer applies today in western Canada, eastern Canada, northern and central Canada. Discouraging words are the words of the day. Words of pessimism, disillusionment, unbelief and anger are the kinds of words you hear spoken throughout our country when it comes to discussing, describing and explaining the economic programs of the Liberal government.
I have just returned from four days in my riding, a riding which is famous for its rather frontier-like mentality. By that I mean an atmosphere of enthusiasm, optimism, faith in the future by people who assume that next year will be better than this year, that the lives of their children will be better than their own lives. It is a real and built-in sense of optimism which has prevailed in our part of Canada for many, many years. However, Mr. Speaker, that atmosphere of optimism and hope in the future has been thoroughly dashed by the
February 16, 1982

policies of this government, particularly the November 12 budget.
During the last four days, Mr. Speaker, I had an opportunity to meet with a number of young people in my riding. I want to tell you it was very disappointing to talk with them and hear that they plan to drop out of school, that they see little hope in continuing their formal education because people they see with advanced degrees and professional and technical training are unemployed, and there appears to be little room for optimism over future employment. These people are despondent and thoroughly fed up with the kind of economic and political leadership coming from their leaders throughout the country.
I talked with senior citizens also, Mr. Speaker, and the central theme of their gatherings is people discussing and describing today's conditions as they relate to their memories of the 1930s, that in fact these are depression years. They talk about the eventuality of soup lines, about the loss of farms and homes, the kind of discussion they recall from their youth.
I have spoken with miners, loggers and cattlemen. A level of frustration exists in their area of the country which is quite different from other parts of the country. These people are directly attached to the resources of Canada, the grasslands, the mines and the forests, and they know what potential exists in those resources. The mills are closing, the mines are closing, and the cattlemen are unable to make any decent return from their grassland operations. This has resulted in an incredible level of frustration, anger and bitterness directed at governments and political leaders generally.
1 spoke with women and heard their tales of woe concerning their attempts to keep their families from falling apart, how they worked to keep some semblance of a home and family life when the main breadwinner had been thrown out of work, and when their children were disillusioned with their school studies. Women have attempted to assist the economics of their family operation by attempting to find work but have been unable to do so.
Again, the level of family strain was reflected in a report this morning in The Globe and Mail concerning the city of Kamloops. The report described the unbelievable situation concerning crime rates. In the major population centre of Kamloops, the crime rate is now twice the provincial average. Sexual offences have jumped by 71.8 per cent over last year. Weapons offences jumped by 71.4 per cent over last year. Robberies were up in excess of 10 per cent. The local RCMP detachment, which blames the economy for the increase in robberies, solved only about one in four of the more than 10,000 crimes in a city of less than 70,000 folks. The mayor blamed the economic stresses of the Kamloops area for the increase in sexual and violent offences. Again, this kind of straining of the social fabric of Canadian society is a direct result of the economic conditions in which we find ourselves today.
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If one meets with the officials in human resources and the CEICD offices, they will outline the difficulties they face while trying to provide for people qualified for unemployment insurance. They are experiencing backlogs of hundreds and hundreds of cases. People are forced to go to the welfare offices when, in fact, they ought to be receiving cheques from the UIC. A strain is placed on the provincial coffers as a result of federal inaction and inactivity. When one speaks with small-business men, one finds that there is no longer any discussion of expansion of small business. There is no more discussion with regard to hiring and moving into new areas or attempts at new entrepreneurial activities. It is really a matter of survival, just hanging on and praying that those interest rates will be dropping in the next few weeks or months. However, these businessmen know full well, from what they read or hear in the media, that interest rates are likely to go even higher in the forthcoming months.
These are direct human responses to the economic challenges and problems facing us. I suppose another aspect which is becoming more interesting all the time is the underground economy, as people work to do an end run around the traditional economy and move away from the recording of transactions into a cash society, again to avoid the tax man and to avoid being part of the regular economy.
Why do people want to avoid paying taxes? Why is it that most popular bestsellers in the bookstores at this time of the year outline ways and means to beat tax men and avoid paying taxes? The reason is that the people of Canada have lost faith in what the government is doing. They have lost faith that the $6.6 billion which is being requested here today will be well spent in the best interest of Canadians. They feel it will be spent in the best interests of a select group of Canadians.


John Leslie Evans: Do you think it could be because tax rates are too high?


Nelson Andrew Riis: The Liberals wanted a fiscal policy which supported their tight money policy. Indeed, in this budget we have seen a fiscal policy which does compliment the monetarist policy. Their high interest rates deterred investment in housing, and we all know that accommodation is not being built today across Canada. Just this morning, HUDAC indicated another drop in construction of thousands of units over the same period last year, which again was a year in which housing starts were at an all-time low.
What does the budget do? It makes the situation worse. The budget brings in measures to reduce housing starts further by eliminating the deduction for soft costs and the deduction of interest in excess of investment income. In other words, the fiscal policy compliments the monetarist policy by strangling any potential for accommodation construction in Canada.


John Leslie Evans: What in the world are you doing down in that corner of the House?


Nelson Andrew Riis: We have a monetary policy in our country which results in increased indebtedness to foreigners.


John Leslie Evans: What's he doing in the NDP?

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Nelson Andrew Riis: We have a monetarist policy which makes it attractive for foreigners to come into our country to invest, and the government brings in a budget which makes it attractive for foreigners to come in to purchase small firms and large firms in Canada. The Liberals like to increase the indebtedness of our country for the sake of reducing the indebtedness of the government. They bring in a monetarist policy which results in unfair and inequitable distribution of wealth. Money goes from the borrowers to the lenders. The budget results in a concentration of corporate ownership. Again, one could say that the Liberals prefer to see an increase in inequality in society for the sake of supposedly greater equity in the national income accounts.
Our government's fiscal and monetary policies are absolutely perverse. We have heard from the previous hon. member that incentive for investment has certainly been destroyed in our country. There have been rather cavalier attempts at destroying incentives here and there simply for the sake of curtailing a number of extreme abuses. Again, there was an attempt at tax reform which was certainly introduced in a rather ad hoc way through the November 12 budget.
We see in the policies of this government a real paradox and hyprocisy. The Liberals proudly display their bookkeeping accomplishments, or, in other words, their reduced borrowing requirements, while the same policies which make such reduction possible greatly increase the borrowing requirements and debts of ordinary Canadians. We have seen a massive transfer of debt from the federal sector to the municipal and provincial sectors. I do not think that the wool has been pulled over anyone's eyes.
I listened with great interest to the Tories who spoke on this borrowing authority bill, and 1 must say that 1 hear their howls as rather hollow howls-


Some hon. Members:: Hear, hear!


Nelson Andrew Riis: -in that just the other day, the finance critic for the Tories said, in a sense, that they support the approach of the Minister of Finance (Mr. MacEachen), that they support the high interest rates, and that if they had the opportunity to be in government they would make them even higher.


Donald Alex Blenkarn: He didn't say that at all. You know that is not so.


Nelson Andrew Riis: He said that they would cut back even more because they pursue the policies of Ronald Reagan in the United States.


Donald Alex Blenkarn: He didn't say that, either.


Nelson Andrew Riis: I will quote him.


Donald Alex Blenkarn: Quote the whole thing, now.


Nelson Andrew Riis: He said, "What we would be doing, and will do once we are in power, is to follow the policies of Ronald Reagan".


Some hon. Members:: Oh, oh!


Mrs. Mitchell:: Shame on you!


Nelson Andrew Riis: 1 think that makes it pretty clear. 1 think it clarifies what we in the NDP have been saying for a long time. We have been saying there is very little difference in the monetarist policies from across the way and those of our friends here to the right.


Robert Phillip Kaplan: They've just been saying the opposite.


Nelson Andrew Riis: I noticed with interest that the Tory finance critic said that we must pray. God knows, we must pray. He said we must pray that Ronald Reagan is successful because, if not, we will have a tough time selling our policies to Canadians. You bet he will, and they will. They will have a tough time selling Reaganomics to Canadians at the rate they are going in the United States. That is an appropriate term-"at the rate they are going in the United States". Most financial analysts and economists are now predicting that interest rates this summer could be as high as 25 per cent in the United States. With the trends that we see across the way and from our colleagues to our right, our rates will be closer to 30 per cent if that is the case.
It is all right to say that we must hang in on those particular policies. That is okay for some folks, but what about the 1.8 million people who are not working today? What about the hundreds of thousands of people on fixed incomes? Are they able to ride out another two or three years of this policy as we experiment with people's lives to see if this economic policy works?
Our monetary policy has been in place in Canada since 1976. It has been in place because we wanted to bring down the rate of inflation. I ask anyone in this House, has the rate of inflation come down during that period? As interest rates have gone up, so has inflation. Surely we are not prepared to continue with this mindless approach to solving our economic problems, as the Liberals suggest we ought and as the Tories suggest we ought to accelerate.
We have a long way to go. Perhaps the best indication of the serious problems facing us when it comes to investor or consumer confidence is that people know the government is not spending their tax dollars wisely. How do they know? They know that from reading the Auditor General's report for the period ending March 31, 1981. The Auditor General makes a number of interesting comments. Let me quote just a few. He said:
In my view, the accounting policies which the government follows result in a significant overstatement of reported assets and understatement of reported liabilities.
That is why we say that the deficit is increasing. While at this moment we are asking for authority to borrow $6.6 billion, because of this statement we know full well that that figure will be much higher. The Auditor General went on to say:
-since many government activities are carried out by organizational entities which are not "departments", significant assets, liabilities, revenues and expenditures are excluded from the financial statements.
February 16, 1982

That was the point being made an hour ago by the finance critic for the Conservative Party. He indicated that a number of the figures that we heard from the government benches in terms of government spending are in fact inaccurate and that government spending is occurring at a rate much higher than they are prepared to admit.
The Auditor General also said no generally accepted accounting principles are appropriate for governments in Canada. He goes on to say his own office has been presenting its estimates in such a way that he was struck immediately by the fact that our stated objective was incomplete and out of date.
What are the objectives of this government? What are its objectives in terms of spending $6.6 billion? We heard the other day that the government felt it was in the best interests of the taxpayers of Canada and the Canadian economy to invest $100 million in a copper mine in Peru. The 1,500 people in the copper industry who have been laid off will find that hard to understand.


James Ross Fulton: It is 4,000 now.


Nelson Andrew Riis: Up to 4,000 when you consider the auxiliary areas. It is hard to understand in my own riding, the copper centre of Canada. We have hundreds of people unemployed. There are hiring freezes in all the mines. A number of small mines are looking toward government support to enable them to open their operations. They find that $100 million at 11 per cent is going to help the Peruvians. It is hard to understand the logic behind that; indeed, there probably is no logic at all.
The one area where we in the NDP differ from the other parties is that we have some viable solutions. I want to talk about the most fundamental solution to our economic crisis today. We have heard a great deal about the need for increased confidence in the economy, that we must send a clear signal out to our domestic capital markets as well as foreign markets that Canada is a good place in which to invest. At the moment that is about as far from the truth as it could possibly be. Who has confidence in the next ten years in our country, or even in the next ten weeks? There is so much indecision, instability, unknown factors, a continuously changing economic climate as a result of government policy, that no one is particularly interested in investing in the future of this country right now. Why should anyone be with the returns one can get on their money from Canada Savings Bonds or simply from putting their money in short and long-term deposits? Why take a risk? Why take a chance when you can be guaranteed returns of 15 per cent and 20 per cent?


Donald Alex Blenkarn: How about 1916 per cent from the government?


Nelson Andrew Riis: Or 19'/2 per cent from the government, as the hon. member indicates. Why take a risk when you can simply put your money into a secure situation and collect that kind of return?
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We can be confident that there are solutions and that we can act very quickly. I ask hon. members to consider for a moment that when our country finds itself in a state of war, in a matter of hours we bring into effect a whole set of contingency plans. Things begin to happen overnight. I suggest it is time to declare war on the economic crisis facing this country, and move accordingly.
Something we must do before all else is to clearly map out an economic or industrial statement, strategy or blueprint for our country which has the co-operation of not only the federal government, but of all provincial governments, local governments, industry and labour.
As we sit here today, it is relatively clear in our own minds what that particular economic and industrial strategy ought to include. It must include three key factors. It must include what I like to call a key input industry sector, those industries supplying input into key sectors of our economy. There are three-housing, transportation and food. I choose those three sectors because that is where between 80 and 85 per cent of investment goes-food, housing and transportation. If we were to identify those three critical sectors as sectors where government investment will be taking place alongside private investment, it would send a clear signal out for all people interested in investing in the future of Canada.
My friends to the right claim that we in the NDP are interested in spending money, always taking money and throwing it away. I would like to challenge that. What we are advocating is not a need to spend money but to invest it. There is certainly a difference. We might class $100 million to Peru as spending money, but $100 million invested in the food industry of Canada would be a financial investment, not financial spending. It is not a matter of additional dollars but a reallocation of funds. The money is there now, being used in rather peculiar ways. What we advocate is that that money be reallocated into areas where we are bound to receive a productive return.
A second proposal in terms of a comprehensive economic strategy would be the strengthening of basic "building block" industries. Many are located outside the country, but these industries supply inputs to other industries which supply final products. I refer to the chemical industry, the creation of telecommunications equipment, the creation of industrial machinery and equipment, the forest industry, mining and small-scale power generation. We in the New Democratic Party are not convinced that the economic future of Canada depends on megaprojects. The best investment in our energy future is not necessarily a massive influx of both private and public funds into megaprojects at this point. Putting all our eggs into that one basket in these particular times is taking a great risk indeed. With these "building block" industries we could move into a third area; Canadians would be able to specialize and develop export-oriented industries.
We in this country have a number of strategic economic advantages other countries do not have. We can identify areas

February 16, 1982
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in the energy sector. We can identify areas in the resource sector. We have financial ability. We have human expertise. There is a number of areas in which Canadians have a natural strategic advantage in terms of developing specialized products which serve not only our domestic market but also markets around the world. We have seen that we can compete in a number of areas. Telecommunications is one of the obvious ones. Transportation is another one. Canadians have been world leaders in relation to both rail and aircraft. With a very clearly articulated strategy which would have the support of industry, labour and the three levels of government, I suspect that would send a clear signal out to investors both within Canada and beyond that this is the place to invest money and that such investment would result in long-term and stable returns.
At the same time we could begin talking about reduced interest rates. The fear of many people is that by reducing interest rates, let us say to one point above the inflation rate, the result would be a mass hemorrhage of capital out of our country. Why is there not a mass hemorrhage of capital out of Japan? Why would anybody invest in Japan where interest rates are in the 6 per cent to 8 per cent range, when they can invest in Canada with our interest rates being what they are?


John Leslie Evans: Because their inflation rate is 2 per cent to 4 per cent.


Nelson Andrew Riis: One of the reasons, of course, is that when we invest in major manufacturing enterprises in Canada and when we invest in our resources sector, we are investing our money not for two weeks or two years, but for 20 years or 50 years into the future. I say that interest rates are simply one factor in that decision-making process. If we in our country can provide an atmosphere of confidence, if we can provide very clear signals that we have a very well thought out and clearly defined and credible industrial strategy, and if we reduce interest rates to one point above the rate of inflation, I suspect investors will be falling all over themselves to get into Canada, knowing full well the returns they can expect.
There is a need for research and development; that is well known to all of us in this House. Why is it that research and development is not going on at the moment? Is it because Canadians are ill equipped to carry on adequate research and development through to production? In many cases we are because many of our best minds are leaving the country, but I suspect that the real and fundamental reason research and development through to production does not occur in Canada is because we have more foreign ownership here than any other western industrialized nation. Why would a branch plant want to conduct research and development in competition with other plants of its mother company or with the mother company itself? If a person wanted to invest in research and development and could put his funds into his head office in Japan or a branch plant in Canada, where could that research and development be expected to take place? Obviously it would not take place in the branch plant. There is no incentive
to do research and development in the branch plant. That plant is there to serve a small market.
As the previous speaker said, we lack the incentive to get out and market our resources and the goods we manufacture. Again I ask why a branch plant would want to market its goods aggressively in competition with its own mother company. As long as Canada maintains its international reputation as a country with more foreign ownership than any other western industrialized nation there will be little incentive for research and development. There will be little incentive to open up new markets for our manufactured products.
Therein, of course, lies a challenge to us. We need to patriate more of our economy, but not along the lines of the national energy policy and the move into the oil industry. The theory is good, but what is happening is impractical. I suspect that the national energy policy is ill conceived.
With a clearly thought out economic strategy and a monetary policy to complement it there would be no need for discussions on foreign control and no need for additional government spending, because government spending would be focused in such a way as to make some sense. I will use the example of tourism in our country. There could be tourist activity in almost every corner of the country. A message should go out to the private sector that the federal government, in co-operation with provincial and local governments, feels that tourism is a priority and a key element in our industrial strategy. The private sector would respond if the federal government were to redirect and reallocate funds to tourism.
At the moment the situation is rather pitiful. We should be reallocating existing funds to tourism. The federal government should do its share, perhaps by way of international marketing or providing low-interest loans to certain kinds of entrepreneurial activities. The provinces should be co-operating within that same framework. All ten provinces plus the territories should agree that if the federal government is going to provide leadership in the development of tourism, they will complement that activity and develop infrastructures-in ski areas, for example. The provinces and territories should assist in the development of beachfront marinas and so forth. Local and regional governments could also participate in this same context. They should agree to participate and assist in developing the necessary infrastructures. Then the private sector would come in with the construction of hotels, ski lodges and whatever. With that kind of co-operation and economic leadership coming from all three levels of government, we could provide a creative environment. The clear message that would be sent out to Canadian and perhaps foreign entrepreneurs would result in a very sophisticated tourist industry of which we could all be very proud.
We should apply the same policy to a number of other sectors, particularly where Canada has some strategic edge in terms of national and international competition. That is the kind of solution we in the New Democratic Party recommend for consideration. When we have our discussion in the Committee of the Whole, I hope the Minister of State for Finance will take into consideration the option I have just laid out.
February 16, 1982

That is the kind of thing that the federal government should be developing at the moment rather than simply following, in a mindless way, certainly not a very independent way, with the support of its Tory colleagues, the policies of Mr. Reagan in the United States.


Donald Alex Blenkarn: Mr. Speaker, this is a bill that attempts to deal with three totally different measures. It is an omnibus bill and, despite the ruling of Madam Speaker earlier today, 1 must say in disgust that it is difficult to debate a bill that deals with three principal problems, three types of taxation-borrowing being a form of taxation I suppose-all in one package. I shall attempt to deal first of all with the borrowing authority, then with the excise tax bill and then with the amendments to the Income Tax Act.
If you or I went to our bank or credit union and said we wanted to borrow money, Mr. Speaker, I suspect the manager would ask how we propose to repay it. Yet the minister has come to this House of Commons for the third time this session asking to borrow money, with no plan to pay it back. He came to the House with Bill C-30 and asked for $12 billion; he came to the House with Bill C-59 and asked for $14 billion-and he got it; and today he comes with Bill C-93 and asks for $6.6 billion. That is a total of $32.6 billion in less than two years, and he expects us to give it to him.
It is a disgrace that a government elected in February, 1980, now less than two years into its mandate, should come to the House of Commons to ask for a total of $32.6 billion. Did it tell the people of Canada that when it promised honest, decent, straightforward government? Did it say to the people of Canada that within two years it could be coming to the House of Commons demanding to borrow $32.6 billion? Yet that is what it is doing.
The government brought in a budget which it said was based on equity, restraint and renewal.


Thomas Edward Siddon: Equity for whom?


Donald Alex Blenkarn: The hon. member asks, equity for whom? For those who make more than $53,000 per year, the tax rate is reduced to a maximum rate of 50 per cent. For the 54 per cent of the people earning $30,000 or less per year, the tax rate is increased. That is Liberal equity!
And what about renewal? Sixty-two members of this party travelled across Canada holding public hearings on the question of renewal. They did not find a single business, business organization, social service agency, trade union or group of any kind anywhere that was prepared to say it was optimistic about Canada, that it would build in Canada or create in Canada because it was enthused about the renewal offered in this budget. The way this government uses the word, "renewal" means renewal of expense, bigger government, more state interference. That is the kind of renewal this government offers. There is nothing to stir the people up, nothing to stir the soul or make people get up and build a country.
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I am reminded of what happened in this House of Commons 110 years ago today when a bill was introduced to finance the greatest megaproject this country has ever seen. I refer to the bill to finance the Canadian Pacific Railway. At that time there was a government that had enthusiasm, that was prepared to lead, to offer projects that would build a nation from sea to sea. Today we have a government prepared to ask for another $6.6 billion to put us further into the red, to figure out another move to tax oil and gas wealth-and I shall talk about that later-with its Henry VIII type of tax system. We have a government that has no sense of renewal, no sense of building Canada, no sense of the worth of Canadians. All it does is create an ivory tower for itself.
And what about restraint, Mr. Speaker? In December, 1979, a budget was introduced in this House which indicated in its projections for the year 1981-82 that the Government of Canada would spend, on a national accounts basis, $66.2 billion and would tax from Canadians in the same fiscal year $59.6 billion.
Let us look at the restraint proposed by this government which now asks us for more money. Let us look at what in fact is happening due to the totally inept management of the economy of Canada and the waste and throw-away programs of the government.
The government this year will spend $76.6 billion; this government this year will tax $69.2 billion. But the government of the Right Hon. Joe Clark, the government that had the hon. member for St. John's West (Mr. Crosbie) as its minister of finance, would have spent in total $66.2 billion. If we had MacEachen for fund raising and Crosbie for spending, we would not need to borrow any money; we would have a surplus of $3 billion. Instead, what do we have? We have a deficit that gets larger and larger and carries on without any effort being made at restraint at all. The government asks for another $6.6 billion, and if we look at the records we know that it could have a surplus of $3 billion if it exercised the type of restraint that was evident in the budget planning process of two years ago. There is absolutely no reason that this House, at any time, should consider this type of bill.
When you or I go to our banker to borrow money, we normally show need, Mr. Speaker. I decided to look, as we all should every week, at where the money is in Canada. The Government of Canada has on deposit with the chartered banks of Canada $6,947 billion at the present time. The minister can see that in the Bank of Canada statement of February 11, issued last Thursday. The Government of Canada has on deposit with the chartered banks right now nearly $7 billion.
Does the government need to borrow money? The minister said that the spending requirements for the year will be only $6.6 billion. The government has all the money it needs on deposit with chartered banks. What more money does it need? Why does it need more money when it has that kind of money available right now? Let me point out that when the Govern-

February 16, 1982
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ment of Canada deposits money with chartered banks, it receives on the amount of over $100 million a rate of interest 10 per cent less than the rate of 90 day treasury bills.
The Government of Canada was prepared to pay people 19.5 per cent on Canada Savings Bonds. The same government is prepared to lend money to the banks at 13.4 per cent this week. The government has $7 billion with the banks on which it is prepared to make 13.4 per cent, yet the minister who is supposed to be in charge of financial institutions comes into the House of Commons and says, "I need to borrow $6.6 billion". He does not need to borrow it at all; he has it on deposit at 13.4 per cent. What a travesty, what an error!
This reminds me of the errors in the budget-there have been 25 changes so far, and there are many more to come. Is a $600 million mistake when dealing with the provinces a minor one? The bill is for $6.6 billion, yet the government has nearly $7 billion on deposit in the banks at the same time.
I should like to look at the rationale for giving this government this money. Last year the government came to the House seeking $14 billion. It said it wanted some elbow room or freedom. Out of the $14 billion it still has borrowing authority for $3.9 billion, so it has lots of freedom within which to borrow. It wanted elbow room, so we gave the government more money than it could conceivably need. What did it do? It went out on the market last September and offered Canada Savings Bonds at 19.5 per cent. At the time the government made that offer, all indicators showed that interest rates were dropping rapidly, yet it held the 19.5 per cent offer open for people to lend money to the Government of Canada until November 6. On November 6 it could have borrowed all the money it required, including the cost of borrowing, for approximately 16 per cent. However, this government, which is supposedly careful with our money, entered into a borrowing arrangement to borrow, as the hon. member for Etobicoke Centre (Mr. Wilson) indicated, on-demand money at 19.5 per cent. My calculation of the cost of borrowing that money, including the commissions paid for one year, is 20.5 per cent.
In reorganizing its loan, the government increased interest rates on all outstanding Canada Savings Bonds to 19.5 percent, for a real cost of about 20 per cent. It could have borrowed the money on November 6 for 16 per cent. It cost the Government of Canada, and therefore the people of Canada, 4 per cent extra on $25 billion for a year. The Minister of Finance (Mr. MacEachen) and the Minister of State for Finance (Mr. Bussieres), the man who is in charge of financial institutions, cost Canadian taxpayers $1 billion in that move alone. Now the Minister of Finance is called, "The billion dollar man". Should we give these people the freedom of financial movement in order to borrow $6.6 billion, when the history of their borrowing is such that they are totally irresponsible in their use of the borrowing authority and paid $1 billion more in interest for a $25 billion debt than should have been paid? It is unconscionable to ask the House to support this portion of the bill.
Let me turn to some of the figures. When the government took power on February 18, 1980, for the fiscal year ending
March 31, 1980, the total amount paid in interest on the Government of Canada debt was $8.6 billion. This year the "glorious" Minister of Finance is saying that the cost of carrying our debt will be $14.7 billion. Did Liberal members promise Canadians during the last election campaign that the result of their inept management would be to increase interest charges in two years by $6.1 billion per year? Is that what they promised? Do Canadians recognize what they have in terms of inept, stupid and incompetent management? Also the minister went on to say that the interest costs will be $16.5 billion next year and nearly $18 billion the following year. Did he tell Canadians in the February, 1980, election campaign that the country owed $67 billion in that year and that we would owe $92 billion as of February 1 ? Did he tell Canadians that it would cost them borrowings of $25 billion in two years to support the government? Did he tell them that this was restraint and that it was in the budget program of the government?
The government comes to the House of Commons, and we are really its bankers, because we allow it to borrow money on the credit of Canada. When Liberal members sought office, did they tell their bankers that they would run the debt up by $25 billion in two years? There is no justification for this bill.
I should like to deal briefly with the interest rate policy of the government. Actually it is not an interest rate policy. I have difficulty in even suggesting that it is a policy. It is really a mishmash of effort. We all remember when the Governor of the Bank of Canada said that he would allow an increase in the M-l, that is the monetary targets, to be between 4 per cent and 8 per cent. In order to keep up the exchange rate of the Canadian dollar last year, they cut down the increase in the money supply so that, in fact, it was negative. Of course we wondered why there were huge interest rate increases. The reason was that investment confidence was driven out and hot money at the highest rates the country has ever paid was imported. They passed on that cost in order to keep the exchange rate high and, to ensure that it worked, they deferred our monetary policy to an exchange rate policy.
It is not a government of tight money; it is a government of no money for anyone. It is a government which operates with short-term palliatives, which has no sense of where it is going, which struggles from pillar to post, which has driven out longterm markets for financing so that they no longer exist. It is a government that says interest rates shall be determined every Thursday by some sort of phony auction of Government of Canada treasury bills. It is a government that makes sure there is no long-term money in its budget provisions; a government that destroys one of the few long-term sources that are built into our system, namely, the insurance and annuity industry. With the budget the government makes sure that the insurance and annuity industry will be robbed of a long-term investment cash flow of $1.75 billion this year alone. How much more will it be the following year?
February 16, 1982

It is almost impossible, if not quite impossible, for a person to obtain a five-year mortgage. The kind of loans people get today are those that bear an interest rate that can be changed on three days' notice. We wonder why there is no confidence in the system. The Prime Minister (Mr. Trudeau) and the minister have both said that this is to counter inflation. Let me tell you, Sir, there is no countering of inflation with this kind of monetary policy. This is not a high interest policy. This is no policy. This is a policy of pillar to post. This is a policy of Thursday interest rates. This is a policy where there is no confidence in the supply of money at all.
We do not know what the rate will be this week. It may be higher, it may be lower. We do not know what it will be next week. It depends on what is going on in the United States. Maybe it will be higher or maybe it will be lower. In any event, there is no confidence.
How can a person invest, build a plant, buy equipment and create productivity in the country? I see the minister responsible for housing standing up. I ask, how can a person build or buy a house? You have to be an idiot to buy a house in this market because you cannot get a mortgage for any length of time. If you do, you play Russian roulette. Think of a young couple who buy a house with an 18 per cent mortgage on it. They think they can pay that mortgage, but they do not know what the mortgage rate will be in August when it comes due. Will that mortgage rate be 22 per cent, 30 per cent or 35 per cent? Who would have thought ten years ago that the government would pay 19.5 per cent for the money it borrows itself? Who would have thought that the rates at Household Finance a short time ago would become today's prime rate at the bank?
People have no sense of confidence in the monetary direction of the country. Does this bill give us that? Does this borrowing authority? Does the government's financial policy do the things that are supposed to be done under the financial policy of the government and does it come to grips with this problem? Not at all. The government leaves the unmistakable impression that it does not know where it is going.
Last Saturday 1 listened to a young Greek lad speak to a policy panel hearing. He dispassionately and rationally talked about what had happened to the Canadian dream. He is a young economist. He mentioned the inflation caused by the Vietnam war, the changes that happened as a result of OPEC and the international problems with the United States essentially losing track of the cost of gold. Then he talked about Canada. He said that, instead of coming to grips with these international problems, we were making things worse; deliberately making things worse. We were not taking advantage of our resources. We were not taking advantage of the entrepreneurial nature of our people. Indeed, we were driving out business. We were turning away ideas. We were preventing research and development. With our budget, our fiscal policy and our interest rate policy, we were making sure that the country would be less successful than it would otherwise be. Without the government at all, we would be better off. The
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policies of this government make things worse. That is what we must address.
He mentioned that one of the major causes of our problems was the National Energy Program. Part of the national energy policy is in this bill we have before us. It is a bill in connection with the Excise Tax Act to increase the taxes on natural gas. The minister says that the bill has something to do with an agreement between the federal government and the government of Alberta.
This bill ought to have something to do with fairness, with honesty and with where we are going. That is where the problem comes with the bill. The bill sets out the tax rates on natural gas to January 31, 1982. The bill then goes on to create a new paragraph 25.19 (a) through to (e). In order to figure out what happens, you have to turn over to page 8 of the bill. The bill sets out what can be charged per gigajoule for gas, per cubic metre of methane, per cubic metre of propane and per cubic metre of butane. All of a sudden you see what we are getting into with this bill. Whereas the rate for natural gas was 63 cents a gigajoule, there is now the authority to increase the tax on natural gas from 63 cents to $4. Next we come to ethane. We get the authority to increase the tax from $11.65 to $75 a cubic metre. When we get to propane, we get the authority to increase the tax to $105 per cubic metre from $16. For butane we can increase the tax to $115 a cubic metre from $17.85. This is a Machiavellian type of section. It establishes the limits to which the minister can increase the taxes. This is the first time in my experience that I have ever seen a tax law which says that taxes can be anything up to a certain limit that the minister by order would like to make them. That is what it says. The taxes can be anything up to a limit that the minister wants to order them.
For example, the price of ethane goes up a possible total of 543 per cent. In other words, the minister can put his hand in his pocket at any time and say, "I have decided today that ethane is worth more tax and I can increase the taxes 100 per cent, 200 per cent, 300 per cent or whatever I feel like and not come back to Parliament."
Now, how can we as members of the House vote for a bill which would conceivably allow the Minister of Finance to levy any tax he wants up to a maximum level. We have a tax right now where the rate is 63 cents per gigajoule, or $16 per cubic metre, or $17.85 per cubic metre, and then all of a sudden it can be increased, in the case of pipeline gas, to $4 a gigajoule; in the case of ethane, to $75 a cubic metre from $11.65; in the case of propane, from $16 a cubic metre to $105. This can be done without reference to the House. The minister may increase the tax by order in council.
Now, Sir, if King John at Runnymede had proposed that type of arrangement to the barons, I suspect the same thing would have happened to him as happened to Charlie. I suspect, Sir, that even if Henry V111 had suggested this type of tax arrangement to Parliament, the strongest of the Tudors would have lost his throne. However, we have a government which

February 16, 1982
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comes in the name of Parliament and democracy and says that we should authorize the government at any time to increase the tax on a product such as ethane by 543 per cent, or 556 per cent for propane, 544 per cent for butane and 534 per cent for natural gas. How can we as Members of Parliament vote for that bill? It does not really matter whether you are a Liberal or a New Democrat. No matter what you are, how can you as a Member of Parliament vote for a bill which would enable a minister of the Crown to increase taxes by ministerial order in any amount and at any time he wants to? Now I want to leave that part of the act for a moment and go to that part which deals with the PGRT.
That, Sir, is probably the most complicated piece of statute work that 1 have seen for some time. Clearly, it is the type of thing that must drive business right out of the country. We talk about encouraging people to come to explore for gas and oil and that type of thing, but we wind up with the most convoluted and complicated clause of a bill that one has ever seen in Clause 3. We wind up with terms such as "incremental oil revenue", "incremental payouts", "incremental production royalties", "incremental resource royalty". I do not know what an incremental royalty is on incremental production. Presumably "incremental" applies to old oil. I do not know. Sir, whether you have ever seen a jar of old oil and a jar of new oil to determine if there is any difference. Old oil is oil which comes from fields discovered some time ago, or even fields which have not been drilled but were discovered prior to the first of this year.
Now if you drill in those fields and get oil, then you pay the 16 per cent PGRT tax on everything you take out, subject to certain deductions for Crown royalties. In addition to that, if there is any incremental revenue-in other words, the price is higher than it used to be-then you pay 50 per cent of whatever that is. In the name of whatever is holy, there must be some method by which the law officers of the Crown can simplify the law or do something, because this tax, in its computation and application, is so complicated that it can only be of benefit to the accounting profession and those who come from Philadelphia and practise law.


An hon. Member:: That lets you out, Don.


Donald Alex Blenkarn: It sure does. The last thing I want to talk about in the time remaining is the criticism which has been hurled across the floor, all too often: What would you do? Well, in our 1979 budget we clearly set out what we would be doing. We clearly set out where we could restrain government expenditures, and we declared-this is on the public record- that we would have spent no more than $66.2 billion this year.
What would we have done? Well, we would not have got into the mess in the first place, and we would now be working our way out of it. We would be cutting back on the overhead of government. They say, where is that overhead? Well, the Auditor General talked about a measly thing like the $50 million spent on excess photocopy costs. We have the minister of propaganda over there and he spends a $100 million.
However, there is a whole host of other things. We know that in our offices, we know it when we go down to the photocopying room, we know it when we order paper around here. We as Members of Parliament know what goes on just in the House, that these things are nice but do they have to be there? We know it when we go to government offices and see a series of people there reading novels, when we do not hear a typewriter going. I have pointed this out to ministers, 1 have told them that I have been to their offices and did not hear the sound of a typewriter in a half hour while in the waiting room. There is a lot of fat in this government. There are a lot of things we are doing that could be cut back. That is the first thing we would do.
Second, we would turn the budget around 180 degrees. Instead of discouraging business and driving it out of the country as they have done-at least six times as much money left Canada on average last year as did throughout the 1970s-we would be bringing it back in. We would be giving businessmen something to cheer about, something to get enthusiastic about. We would be operating like the government of Sir John A. Macdonald did 110 years ago when he said to Canada that we can grow, we can build and become a nation from sea to sea. That is how we would operate, with enthusiasm, encouragement, with less government and more trust in Canadians.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Blaker):: 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):: When the House rose at six o'clock this evening, the hon. member for Mississaugua South (Mr. Blenkarn) had the floor. The Chair will now recognize the hon. member for Grey-Simcoe (Mr. Mitges).


Some hon. Members:: Hear, hear!


Constantine George (Gus) Mitges: Mr. Speaker, I am very glad to have the opportunity to contribute to the debate this evening because the second reading of Bill C-93 gives me an opportunity to voice my very strong opposition to the economic policies being pursued by the government. I believe it is the same overwhelming opposition expressed by Canadians everywhere, by farmers, small and large businesses, home owners, consumers, economists, opposition parties and, yes, even some government members and Members of Parliament; yet the government continues to hold fast to its position, content to remain unaware of what is going on around it in the real world.
February 16, 1982

What we have before us is legislation which would further implement a budget which is in no one's interests or continued economic wellbeing and, quite rightly, is opposed by just everyone, as I mentioned earlier, including some members of the federal cabinet. For this reason, this bill to borrow $6.6 billion of taxpayers' money is very hard to accept.
We must ask, what does the government intend to do with this money? Will it raise money to help those Canadians who need help, such as our farmers, our small businesses, our home owners, the poor, the elderly and the unemployed? No, in this budget there is very little evidence of substantive relief being offered to those Canadians who need it most.
We hear constant talk from the government about tight money supply and that we must continue to tough it out regardless of what happens. If things get worse, and surely with the government's economic policies they will, the minister says, "So be it, because sooner or later we will hopefully be better off'. This promise is not good enough for us. Flow long do we have to wait? How long do Canadians have to swallow the same old story and continue to watch their economic livelihood and their future fall to pieces?
Mir. McDermid: 1984, election year!


Constantine George (Gus) Mitges: One would think that after seven or eight years of miscalculated economic and monetarist policies, and a policy of deliberately high interest rates, that the government would finally get the message that its policies are just not working and that they will not work in the future. Everyone except the government is in agreement with this point.
All this talk of economic restraint and belt tightening would be easier to accept if the government practised what it preached. While it increases its spending by 22 per cent, increases the deficit and raises taxes, all in the name of restraint, it is quite willing to punish those Canadians who spend, who wish to invest or take risks or save for the future. This, to me, is a double standard. In other words, the Minister of Finance (Mr. MacEachen) is saying, "Do not do as I do; do as I say, and we will all be better off for it". This is really nonsense. What we do have before us is an economic policy which is a blueprint for recession. As if this were not enough, we have a government which is deliberately bringing the economy to a complete halt. It is deliberately creating a recession. I believe the government is prepared to create such a recession and create unemployment, and it has deliberately raised interest rates in pursuit of an absurd and nonsensical policy. At the very least, if the Minister of Finance is going to stick to this ruinous economic policy, he should be prepared to help those Canadians now who are suffering the most from those policies.


Mr. McDermid:: That's right!


Constantine George (Gus) Mitges: Yet the minister has stubbornly chosen to ignore these legitimate concerns and calls for relief. It seems to me that the government is obsessed with only one thing; that is, centralizing economic power and decision-making here in Ottawa and wrestling as much power as possible away from
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the provinces. The Constitution represented the first stage, the political power grab, and the budget represents the second wave, the economic power grab. The government has failed to keep its election promises to lower interest rates, to wrestle inflation to the ground, to fight unemployment, to ensure cheap energy prices, to lower the budget deficit and to help Canadians suffering from economic hardship. The government has completely failed to even address these problems. When we are asked to look at a bill which seeks to borrow over $6 billion-


John Horton McDermid: Billion dollars!


Constantine George (Gus) Mitges: -we have an obligation to look at the government's over-all economic policies.
It is very clear that the Minister of Finance did not look closely at the policies he introduced on November 12 because on a number of occasions since then he has either withdrawn or revised several measures, realizing the mistakes and miscalculations he tried to push on Canadians. How many changes does it take for the minister to realize the budget is a complete failure?
In spite of what the government may say both inside and outside the House, the November 12 budget introduced a major increase in personal taxation. Canadians can expect no less than an average $1,400 federal tax increase in energy costs per family, such as the increased taxes on gasoline and home heating fuels, for each year over the next five years.
We also have a massive increase in federal spending. Government spending is going up by 22 per cent this year while the deficit will remain at $13 billion, higher than the figures forecast by the government.
Not only will Canadians feel the bite of higher taxes in the energy field, but through a series of underhanded tax changes, Canadians will be taxed on many employment benefits such as private health care and dental plans, daycare, the use of car and travel passes, as well as the immediate taxation on retirement allowance, all in the name of closing tax loopholes.
The insatiable drive for more revenue also extends to life insurance policies and registered retirement savings plans. In the case of RRSPs, Canadians can no longer deduct the interest on loans taken out to buy into the plan, meaning there will be a major drop in savings for retirement, not to mention investment initiatives in the economy.
Tax changes toward annuity contracts and life insurance policies strike at the very heart of the principle of encouraging Canadians to work toward their retirement income and life insurance protection. If this provision is retained, it will put Canada in the embarrassing position of being the only industrialized country that taxes life insurance.
For some strange reason the government seems opposed to the principle of Canadians planning and providing for retirement. This development should concern Canadians all the

February 16, 1982
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more because the federal government's own pension plan, the Canada Pension Plan, is in very deep financial trouble.
There are other areas of the federal government's economic policies which have created massive opposition and severe crticism. I am speaking here of the Small Business Development Bond. The government boasts that it has extended the bond program to unincorporated farmers and small-business men. However, the rule changes made this assistance less than what farmers and small-business men had hoped for or what they clearly need.
The bond has been completely emasculated and does not really resemble the previous Small Business Development Bond program before the presentation of the budget. This program has, quite simply, been switched from a development bond to a survival bond, intended only for businesses in desperate financial difficulties. No farmer or small-business man who wants to expand his operation will get a Small Business Development Bond. In fact, he is not eligible for a bond unless and until he is on the verge of bankruptcy.
There is no question that those who face immediate foreclosure need help and need it now, but what about those businesses that are in a position to expand operations and create badly needed jobs? Should they not be encouraged and helped? Not so, says the Minister of Finance. They have been left out in the cold to fend for themselves.
As if these changes were not enough to cause frustration and anguish, it has become clear from what many constituents have said that the banks which administer the Small Business Development Bond are reluctant to process applications because there is considerable confusion on the part of the banks and the government over how the new bond works.
The Minister of Finance has given very little evidence of his willingness to help in solving this problem. A more active intervention here is essential in order to make sure that those who need assistance receive that assistance now. Otherwise we will see more farms and businesses fade into oblivion.
Quite a number of my constituents have expressed to me problems they have encountered with their farm credit applications. While the government has introduced legislation which offers badly needed but very limited financial aid, applications continue in some cases to be processed too slowly. This is very distressing, given the fact that many farmers are in need of immediate financial relief but are going under because of these delays.
The bankruptcy figures speak for themselves. The government's high interest rate policy is driving an ever-growing number of farms and businesses into foreclosure. In the first 11 months of 1981, some 7,261 businesses were forced to close their doors for good, while 258 farming bankruptcies occurred during the same period, an increase of 133 per cent over the first nine months of 1979.
One sector of the farming industry that is particularly hard hit is the beef producer. Rising production costs, increased machinery prices, higher interest rates and depressed beef
prices have all combined to force this industry into a depression with very little hope of recovery in the foreseeable future.
With well over 1.2 million Canadians out of work, coupled with thousands of bankruptcies, common sense should indicate that the federal government would see the light and take concrete and positive action to alleviate these hardships. However, the government insists beyond all reason that the road to economic recovery lies in a tight monetary policy so as to bring down inflation and interest rates. But, as I said earlier, this policy simply has not worked. Inflation is over 12 per cent, unemployment continues to rise and interest rates are on their way up again.
On the matter of unemployment, the Minister of Finance refuses to listen to the calls of some of his own cabinet colleagues who ask that the government stimulate the economy and create new jobs. No substantive programs have been announced to help our unemployed.
There is no question the government's economic policies have to be changed to reflect our national and pressing concerns. The budget is already out of date. It was written last fall and placed on the shelf gathering dust until the debate on the constitutional resolution was over. By the Minister of Finance's own admission both inside and outside the House, the figures used are out of date and are therefore inaccurate and misleading.
In conclusion, I urge the Minister of Finance to introduce a new economic policy that more accurately reflects the current economic problems we are now experiencing. Without substantive changes, Canadians will be faced with a detailed blueprint for a depression, a depression as devastating as anything we have seen since the 1930s. I do not think that even this government would like to see that.


Frederick William Wright: Mr. Speaker, I rise this evening to speak on Bill C-93, an act to amend the statute law relating to certain taxes and to provide other authority for raising funds. This bill combines the more conventional borrowing authority bill with a number of other amendments to the Excise Tax Act arising out of the November 12, 1981, budget, and amendments to the petroleum and gas revenue tax which implement the Ways and Means motion to amend the Petroleum and Gas Revenue Tax Act tabled by the Minister of Finance (Mr. MacEachen) on January 7, 1982. In looking at the bill, I find approximately three pages on the borrowing authority and approximately 30 pages on the rest. This indicates that perhaps the government is trying to sneak something by us. Perhaps this is in keeping with the way this government operates.
Until about five years ago, borrowing bills were introduced mainly as part of supply. Five years ago it was decided that borrowing bills would be introduced separately. Now we find that included in this borrowing bill are two other amendments to acts. I have looked through the bill, and I cannot find one single link between the borrowing part of the bill and the
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amendments to the Excise Tax Act and the PGRT Act. I wonder why the government decided to include those provisions and borrowing authority in the same bill at the same time.
I will deal just briefly with the Excise Tax Act and the PGRT and finally with the borrowing provision in the bill. An excise tax is a tax on a specific commodity, and in this case the commodity involved is energy, oil and gas. The federal government has agreed with the provinces that it will not tax exported natural gas, but that is only in relation to natural gas taken from provincial lands. The federal government retains the right to tax exports of gas taken from federal lands. I wonder why the federal government wishes to retain that right.
The Petroleum and Gas Revenue Tax Act was implemented by a ways and means motion on January 27, 1982, and one wonders what connection that act has with borrowing authority. The PGRT is basically a tax to increase revenues to the federal government. By this tax the federal government will take in approximately $23.1 billion over the next five years. With that amount of additional revenue coming in, 1 wonder why the federal government will need to borrow.
By the excise tax alone the government could raise up to $8 billion a year. This bill would raise the tax on natural gas per gigajoule from 57 cents to 63 cents, but the bill provides for a limit of $4. If the government were to increase the tax to the limit of $4, it could raise up to $8 billion a year. The government will not have to come back to Parliament if it wishes to increase this tax over the years.
One wonders whether the government is attempting to sneak some of the provisions in this bill by the House. I understand they will be debated in the Committee of the Whole and not in a standing committee. This means we will be able to question the minister, but we will not be able to call witnesses. We could do that only if the bill were to go to a standing committee.
The three pages of this bill dealing with borrowing authority would provide the government with the authority to raise $6.6 billion in Canadian or foreign funds. As I said in my last speech on a borrowing authority bill, I wonder why the government is interested in borrowing in foreign funds.
The financial critic of the New Democratic Party made an interesting speech today. He questioned the policies of my party and suggested they are similar to those of Mr. Reagan in the United States. We agree with Mr. Reagan in many respects. We agree that deficits must be decreased. We agree that there must be control over government spending. We agree that governments spend too much money and that there must be control. However, I wonder whether the New Democratic Party financial critic thinks it might be better if we agreed with some of his party's friends, such as the Cubans. We all remember that millions of dollars were given to the Cubans a few years ago-


Derek Nigel Ernest Blackburn: By John Diefenbaker.
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Frederick William Wright: -until we found out what was happening to the money.


James Ross Fulton: It was John Diefenbaker who gave them the money.


Frederick William Wright: Many members of the New Democratic Party agree with some of the policies of Russia.


An hon. Member:: That was Joe Clark.


Frederick William Wright: I wonder what would happen if any of the members of the New Democratic Party were to visit Siberia. Perhaps that would be a good place for them to go.


James Ross Fulton: Tell us about Jerusalem.


Frederick William Wright: Members of the New Democratic Party are having a difficult time selling their policies. That is why the people will never elect them to govern Canada.


James Ross Fulton: Tell us about Sterling Lyon.


Frederick William Wright: Some of their policies and the way they say things remind me of some of the religious cults in Canada.


Derek Nigel Ernest Blackburn: Are you afraid of us or of the Liberals?


Frederick William Wright: No matter what people say about them, they keep pressing on.


Mr. Kristiansen:: What tree did you climb down from?


Frederick William Wright: I heard that remark. It certainly was not the same tree from which that individual climbed down. Some of the policies of the New Democratic Party remind me of another socialist party called the National Socialist Party of Germany. We all remember the big lie of Adolf Hitler.


Derek Nigel Ernest Blackburn: Now we are fascists.


Frederick William Wright: One would not have to look very far to see some similarity of policy, since both parties started out as socialist. The New Democratic Party believes in state ownership, centralized control and more bureaucracy. What more would bureaucracy do to small business? I cannot believe the financial critic of the New Democratic Party would even talk about this; he was the small business critic. Small-business men are shaking their heads about the problems they are having these days with government bureaucracy.


James Ross Fulton: They shake their heads because of mental midgets like you.


Frederick William Wright: We must also remember that the New Democratic Party is a party which does not believe in property rights.


Lyle Stuart Kristiansen: Mr. Speaker, 1 rise on a point of order. All of us in this place and anyone in political life is used to hearing gibberish from time to time. It often is not meant seriously-

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The Acting Speaker (Mr. Blaker):: Order, please. If the hon. member has a point of order, would he state it now, please.


Lyle Stuart Kristiansen: Mr. Speaker, is it appropriate for one member of the House to say of another member what in any court in the land would be considered libel or slander? Is that appropriate language in the House?


John Horton McDermid: If you cannot stand the heat, get out of the kitchen.


The Acting Speaker (Mr. Blaker):: The Chair is not disposed to give legal advice on what constitutes libel and slander.


James Ross Fulton: Mr. Speaker, my point of order is very brief. I should like to point out to hon. members of the Tory party that national socialism has nothing to do-


The Acting Speaker (Mr. Blaker):: Order, please. I think it would assist the Chair, if an hon. member wants the floor on a point of order, if he could advise the Chair which Standing Order is relevant.


John Horton McDermid: He doesn't even know where to look.


Michael Holcombe Wilson: It is the little green book.


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


Lyle Stuart Kristiansen: I am not quoting a particular Standing Order but I would suggest to you that the language being used is as unparliamentary as one could use in the House or in any free society. To imply that someone is a Nazi, when it is the friends of that party who embraced Adolf Hitler and slaughtered the people who were in the party that we represent, is libel. I have as much sense of humour as anybody else. If someone wants to slash the guts out of somebody-go outside, that is enough of that.


An hon. Member:: What is the matter, you Commie?


The Acting Speaker (Mr. Blaker):: Order, please. The Chair promises to pay a great deal of attention to the hon. member's speech which seems to be having considerable effect in one part of the House, but there is no point of order.


Frederick William Wright: Mr. Speaker, I should like to remind the House, that some men, like wagons, rattle most when there is nothing in them.
I should like now to come to a part of this borrowing bill that mentions what it is for-to spend money for public works and other purposes. It seems odd that in today's issue of The Globe and Mail an article about HUDAC, the Housing and Urban Development Association of Canada, carried the headline, "13 per cent drop in housing starts is forecast". The article states that HUDAC has estimated that the need for housing units in Canada has declined from 220,000 last year to
200,000 and that this is because of the high interest rates that this government has supported.
We must never forget why we have this budget today, Mr. Speaker-it is because the NDP voted to put the Liberals back in power!


Mr. Skelly:: A point of order, Mr. Speaker. Let the record reflect that it was the people of Canada who threw that party out.


An hon. Member:: Right on!


The Acting Speaker (Mr. Blaker):: Order, please. It is not the responsibility of the Chair to comment on an hon. member's speech, but in fairness, if the hon. member keeps on being interrupted by points of order that the Chair cannot really qualify as points of order, then it is very difficult for him. Perhaps this may encourage the hon. member to make further comments.


Frederick William Wright: To follow on your comment, Mr. Speaker, speaking closer to the truth might be of more benefit to the hon. member also.


Nelson Andrew Riis: Mr. Speaker, a point of order. I should like to know whether the present speaker would entertain a question.


Frederick William Wright: Mr. Speaker, I will be very happy to entertain a question at the end of my speech.
The article in The Globe and Mail went on as follows:
The demand figure has dropped primarily because of continuing high interest rates-many consumers have been frozen out of the market because they simply cannot afford houses at current interest rates.
The article goes on to say that the figure of 177,000 housing starts registered in 1981 was inflated by the MURB program which was rushed to completion at the end of 1981. It states that HUDAC expects huge rent increases because a number of rental projects were built under the federal government's Assisted Rental Program, and that half of them had mortgages in the 10 per cent to 11 per cent range which will now go to the 17 per cent to 18 per cent range.
The bad news continues, Mr. Speaker. HUDAC also predicts that the provisions of the recent federal budget will exert upward pressure on rents. The president has stated that rent increases of up to 60 per cent will be common on many of these units. The article states that the low number of housing starts will add substantially to Canada's high unemployment rate. This is contrary to what the Minister of Public Works (Mr. Cosgrove) has stated in the House.
One has to ask why the government needs to borrow $6,6 billion. It has $7 billion in the chartered banks and it has $1 billion in the Bank of Canada. Why does it need $6.6 billion now? Does it have some patronage to look after? We are told that patronage by the Liberal Party amounts to over $2 billion per year-a figure that the Liberals refuse to confirm!
Does the government have some secret loans to cover? Just recently in the House a member asked a question about a loan being made by the Export Development Corporation to Al-
February 16, 1982

geria for a tower structure which will contain a restaurant and an observation deck. The middle floor will contain many things, including film clips-I expect even a clip of the Prime Minister (Mr. Trudeau) dancing when he was in Algeria last fall. This loan of $47.25 million will cover 85 per cent of the total construction costs.
It is impossible to get any information on this loan, however. The government will not state the rate of interest, the term of the loan, or the term of repayment. The Export Development Corporation states that Algeria has an unlimited line of credit. In other words, it will not tell us how much money it can lend to Algeria but has stated that if Algeria came to the corporation tomorrow for an additional loan, the government would automatically give it.
That is the type of loan the government is giving out to other countries when there are hundreds of thousands of people without adequate housing in this country, people who cannot renew their mortgages, yet we are prepared to lend $47.25 million to a socialist nation.
What does the Auditor General think of the spending of the national government? In his report dated March 31, 1981, he stated:
The national debt now stands at $82.8 billion. Servicing the debt in fiscal year 1980-1981 cost more than the total of all corporate income taxes collected. It accounts for more than one-fifth of every tax dollar, and its load burdens all the people of Canada like a huge, high interest mortgage.
It is an albatross around the necks of Canadians. Sometimes it is difficult to put this matter into perspective-and I will return to the Auditor General in a moment-but let us look at a situation wherein average Canadians, without taxes and without the payment of various benefits, could perhaps live on $20,000 per year. I use this as an example only, but when Canadians start paying income taxes, taxes on highways and medical benefits, something different happens. If we look at the latest report of the Economic Council of Canada, we find that out of every dollar spent in Canada all forms of government spend 50 cents. If individual Canadians could live on $20,000 without any benefits and then give half of it to government, we assume that they could still live comfortably because the government would be providing other benefits.
Chapter 9 of the Auditor General's annual report dated March 31, 1979, contained perhaps the most serious evidence of inadequate management of human resources from the standpoint of economy and efficiency by reporting the results of performance measurement tests in levels 1 to 4 of the clerical and regulatory occupational groups which consist of some 50,000 employees across government. The test concluded that government employees operate at 60 per cent efficiency. Thus, to return to my point, if average individuals could live on $10,000 per year and the government collected $10,000 per year, we assume that individuals would be receiving $10,000 in benefits, but in actual fact the Auditor General may be correct when he assumed that we are only receiving 60 per cent efficiency out of the $10,000. This means that we are paying $10,000 to governments to provide certain benefits, and we are
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only receiving $6,000 in the way of benefits. In effect, 20 per cent of the $20,000 to which I referred is being wasted. It is another example of government inefficiency.
If one looks at government revenues and expenditures, one finds where the money is going and what is happening. One finds that government revenues are 16 per cent less than its expenditures. As the Auditor General stated, the government is not spending money efficiently. This is something to which we must address ourselves over the next number of years. Why do Canadians have to live with high interest rates? The Minister of Finance rose in his place time and again to say that it was due to inflation and that we must reduce inflation. As I have stated previously in the House, there has been a massive outflow of long-term capital over the last two years. If one examines the national accounts balance, one finds there has been an outflow of $17 billion in long-term capital in the last two years. During the same period there has been an inflow of $16 billion in short-term capital, money which will remain in Canada for a period of anywhere from 30 days to one year. In the investment business it is commonly known as hot money. Hot money moves around, based on high interest rates. If our rates are higher than those of other countries, it will flow in; if our rates are lower, it will flow out. In effect the government is hiding the true reasons. It has created conditions whereby investment in Canada has been discouraged and the outflow of capital has been encouraged.
What can the government do? It could encourage investment in the country. The United States was built upon foreign capital, yet it controls its resources at the present time. Canada is a young country and needs foreign capital. Government officials travelling abroad have to defend it and say that Canada really wants foreign capital, but when they come to the House of Commons they fall in behind the government line which says that we want to control our own destiny and to nationalize all energy companies. What else could the government do? It could allow the dollar to float.
The Minister of Finance stated that a decline in the dollar would be inflationary. What does he think high interest rates are if not inflationary? In 1976 the government brought in the current policies, and the Bank of Canada carried them out. The government could reduce interest rates by 3 to 4 percentage points, which we on this side of the House have recommended. The government could encourage the export of various commodities such as natural gas. The province of Alberta estimates that it could export surplus gas of up to $2 billion per year. This would help the western provinces; but since the government does not presently have any seats west of Manitoba-and in the next election it will have none west of Ontario-it decided that it did not want to help western Canada.
At present the Bank of Canada holds approximately 20 million ounces of gold valued at $8 billion. Some of that gold could be sold off to provide support for our dollar. Certainly the situation is not hopeless. One must ask how many more firms must go bankrupt before the government comes to its

February 16, 1982
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senses, or how many more farms must fail before the government wakes up.
We do not need a budget that contains a multitude of economic tax changes. We need a budget that is a blueprint for the future, not a maze. There are many fiscal and monetary measures that take time to implement. A decrease in the deficit takes time. While the dollar could decline, it will not decline immediately, it will decline slowly if we implement some of the measures we suggest. There will be a higher cost for imported goods. Everyone understands that. But in addition to that, there will be an increased amount of exports, which would be of benefit to Canadian manufacturing firms. That is understood by many Canadians. Why the Liberals do not understand it, I will never know. It takes time to reduce inflation. We understand that, but we must start to do something. There are things we can do immediately, such as providing a real housing program. The housing program we have now provides nothing.
We need 100,000 rental units next year. The government is providing help for 15,000. We have over 1.2 million people who will be renewing their mortgages over the next two years, and the government is going to help fewer than 50,000 of them; that is very little help. If the government were to provide real incentives for housing we would see higher employment, therefore lower unemployment. The president of HUDAC stated today that because of government policies there will be a loss of jobs this year to the tune of 90,000. That is an astounding figure, and it is shocking that we have to live with higher unemployment in the coming year.
An opinion has been put forth by the government, supported by the NDP, that the banks are responsible for these high interest rates. Let us see who makes the high interest policies. From where do they come? Your interest rates and my interest rates are decided by five people. These five people are the Governor of the Bank of Canada, the deputy governor of the Bank of Canada, two directors of the Bank of Canada and the deputy minister of finance. From where do all these decisions come? They come from the other side of the House. Those are the people who implement these high interest rates.
As we look to the future, the next couple of years do not look very prosperous for Canadians. This government has brought forward a budget that does not help ordinary Canadians. If government has brought forward a borrowing policy of $6.6 billion, and we do not know what it is going to do. If government comes forward with two other pieces of legislation in the bill. Why are these two pieces of legislation joined together when there is no link? Obviously there is something the matter with what the government is presenting. I would be surprised if any legal mind in government employ could find a legal link between these pieces of legislation before us now.
In conclusion, we in the Conservative Party would like to hold out some hope for people that life will not be all downhill. But what we see coming from policies across the floor are higher interest rates, higher unemployment, no growth, more
bankruptcies and more farm failures. In the short term it looks like disaster. But we hope at the next election people will decide that they have had enough of this Liberal government.


Some hon. Members:: Hear, hear!


Nelson Andrew Riis: Mr. Speaker, I trust that I will be permitted one quick question. If so, I would like to ask a double decker question. Assuming interest rates will rise in the United States, does the hon. member for Calgary North (Mr. Wright) suggest that he would encourage an upward lift of interest rates?


Arthur Jacob (Jake) Epp: Is this question period, Mr. Speaker?


Nelson Andrew Riis: Second, would the hon. member change the Governor of the Bank of Canada if he had the opportunity?


Some hon. Members:: Oh, oh!


Frederick William Wright: Mr. Speaker, would the hon. member repeat his question, please? I did not hear it.


Nelson Andrew Riis: Mr. Speaker, I would be very glad to repeat the question. If the hon. member had the opportunity, would he change the Governor of the Bank of Canada? Second, assuming the interest rates in the United States increased, would he advocate a drop in the interest rates?


John Horton McDermid: That is four different questions.


An hon. Member:: Those are not the same questions at all.


Frederick William Wright: Mr. Speaker, the question put by the hon. member for Kamloops-Shuswap (Mr. Riis) begs another question. Would be give me the opportunity to do something about this?


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Raymond John Skelly: Mr. Speaker, what we have here tonight is recognition, and that is the first step to a cure. It is unfortunate that it came at the end of a speech rather than at the beginning. I think with a little work with our Finance critic we could bring the member from Calgary right around.


An hon. Member:: The finance critic has left you.


Raymond John Skelly: Not so, we have good depth in the caucus and lots of opportunities to bring new talent onstream, which unfortunately is not an option for the fossilized remnants of the former government members, who are not quite as lucky as we are.
Tonight I want to talk about the borrowing authority bill before the House. First I should outline some specific things, which this particular legislation, along with the entire government's financial policy, has meant to people in my riding. They reflect the millions of other Canadians who are not faring well under the present government's economic strategy.
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Since February, 1980, we have seen that problems have increased in this country. Unemployment has become more severe. People have lost homes because they can no longer handle high interest rates. The compounded effect of taxation and increased energy rates are wreaking hardship on people. Everything culminated in November when the Minister of Finance (Mr. MacEachen) presented a budget. The budget relates to borrowing authority. Unfortunately, the budget did not in any way address the real economic needs in this country.
I have had the pleasure of sitting in this Flouse during the time when two other budgets were presented. 1 felt there were some positive things in those budgets. The over-all thrust of these budgets were criticized, but nevertheless there were items that showed recognition of the problems and suggestions were put forward to address the problems. The last budget of 1981 completely failed to address the needs of Canadians. I think that view is a unanimous one across Canada. 1 suspect the government acknowledged its failings when it presented the transitional measures. Members of the government caucus recognized the failing when they start writing letters to the Prime Minister (Mr. Trudeau) advocating that some real measures to help Canadians be taken. It is interesting that the government can continue on a tack of self-destruction.
When I look back to the Thirtieth Parliament and what was happening in my area of the country, and I am sure it was happening everywhere, I note that the government thought that the answers to the economic problems of the people of Canada at that time were wage and price controls. Of course, that translated directly into wage controls. That program led to absolute chaos and reduced labour relations to a terrible state. It turned an enormous number of people against the government, and I am surprised-I guess I should not be surprised after watching this happen so many times-that a government could continue the mistakes of the past when everyone in the House, certainly on this side and perhaps some members on the other side, realizes what the outcome of those failed policies is going to be.
Another aspect of this bill is that the Minister of National Revenue (Mr. Rompkey) feels that he can grind more out of the working people of this country with these absolutely ridiculous proposals to tax these benefits which are designed to induce people to move to remote areas in order to harvest our natural resources. A complete disaster, Mr. Speaker, for which they will eventually pay the price at the polls.
Looking at their high interest rate policy for a moment- and I will deal with this in more detail later-I Find that there are many cases in my riding of individuals who are faced with losing everything they have ever worked for. I know members on that side are receiving mail identical to mine, and I do not understand why there is not more from the backbenches of the government to the effect that we have had enough, it is time we changed the policy. However, for the time being, believe me, they are getting this mail because we are getting copies of
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it and it is harmful. Those people are experiencing the same problems we are.
But we come tonight, Mr. Speaker, to the borrowing authority and again we find a consistent theme. I am not sure, along with many others, where we are headed. Possibly during this debate we will hear members on the other side come up with some idea of where they think we might be headed. I see the Minister of Employment and Immigration (Mr. Axworthy) is in the House, and perhaps that is as good a place to start as any. He is of course well aware of the events taking place in the Comox-Powell River riding and other areas of British Columbia and, I understand, other areas of Canada. Something like 60 per cent of the forest industry is unemployed in that area. As a result, we have a situation where there has been a tremendous demand on unemployment insurance. The Fishing industry has been saddled with tremendously complex regulations and punitive and discriminatory measures taken against Fishermen in those regulations. The end result is that there are enormous claims and the ofFices are not able to deliver unemployment insurance. Because people are required in some cases to wait three to four months for unemployment insurance, the burden has shifted. These individuals have been laid off, their income and savings are gone, they have nothing with which to pay rent, and many of them have nothing with which to buy food. In the end they apply for social assistance. In British Columbia unemployment insurance offices were telling people, "We cannot help you. It will be two to three months before your UIC claim can be processed. Go to the welfare office".
So, Mr. Speaker, essentially what happened is that this minister and his department were incapable of developing a program which the House felt was necessary, and the burden fell squarely on the province of British Columbia to deliver welfare. Unfortunately that burden in those offices was so great that to get a hardship cheque to put food on the table was taking three weeks. I had a man appear at a meeting in Campbell River who said he had not eaten for two days. His wife was in the hospital in Nanaimo and he had to leave his kids with a friend in Port Hardy because, as he said, he was down here in Campbell River sitting on the doorstep of the welfare ofFice to get a cheque to feed his kids. He said, "I have never been out of work before and never collected unemployment insurance".
I can assure you, Mr. Speaker, when it comes to having a chance to evaluate this government's performance by going to the polling stations, you know where he is going to be, and there are people like that in many of the ridings of the members opposite. It is time they did something. However, it is not just the unemployment insurance program. There are many other programs on which we will have to get cracking to see that they have adequate funds for staff resources, proper training, and distribution of those resources so they can serve the people of this country.
Returning to the subject of fishermen, the fishing industry in my riding is one of the basic resources and basic sources of employment. Many of the fishermen have worked at this all

February 16, 1982
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their lives; that is the only thing they know. Some are well on their way to the point where they will never be able to work at another task because fishing is all they have ever done. And because of what I would suggest is incompetent management of the fisheries resource, we would have to go back to the plan put in place by Jack Davis as they key to it. They felt they were doing people a favour by reducing overcapitalization of that fleet. In fact, they turned around and created a capitalization nightmare where it cost an enormous amount of money to buy licences. Those were, of course, financed on the assumption that interest rates would not rise beyond all reason. Those people, because of openings and closings and the strategies of the Department of Fisheries were forced to upgrade their equipment; bigger boats, faster motors, greater capacity. Essentially, they had to borrow money to enhance the capability of their vessels. More capitalization, more borrowing in order to stay in an industry that was being managed in a very poor and inefficient manner.
Having done that, the government then decided it was time to jack up fuel costs. Some of those vessels run 400 or 500 miles along the coast of B.C., they are very fuel intensive, if you will, and the cost of that fuel has risen significantly. Their return grows smaller and smaller each year. Then we have the real kicker, namely, interest rates. So what happened, of course, when the market for fish turned down, is that many of the fishermen were faced with foreclosures. The bankers appeared on their doorsteps and said, "We are going to have to foreclose on your vessel". The fishermen knew the banks were not going to get anywhere with that program because no one would buy a fishing vessel off the coast of British Columbia today. If you cannot fish, what is the point of having a high price boat? What the banks could do is to take away their opportunity to earn a living, and many of them are at a point in their lives when they have no other options.
So the banks said, "We will not take away your method of earning a living and we will not foreclose on you if you will put your house up as collateral". Now they have their house and fishing boat. Some of them went so far as to say, "Give us a co-signer, too, a friend with collateral behind you". And the fishermen, in order to stay in business, did it. Well now, there sits the bank with the government's high interest rate policy, with the home, the fishing vessel and the assets of friends and relatives on the line. In fact, the banks have now started to foreclose because the bank has an opportunity to retrieve their investment. People are now losing everything they have ever worked for, their fishing vessels, their homes, and friends and relatives are being badgered to pay outstanding debts. The consequences of that, Mr. Speaker, are going to be very serious. If it keeps on being as bad as it is, I think they will be asking for more than serious consequences at the polling stations.
If there is any doubt, I would suggest that any hon. member opposite, or the Minister of Fisheries and Oceans (Mr. LeBlanc), should pick up the phone to call any bailiff who would say what they are doing, straight out. An interesting
thing is that many fishermen did not have a good season this year. These fishermen went down to the unemployment office, but the regulations for obtaining unemployment insurance are so complex that one almost needs to be a Philadelphia lawyer to interpret the UIC regulations for fishermen. However, these fishermen are waiting three or four months for unemployment insurance benefits. Many have been put on welfare and many are having great difficulties by being forced into this position. The consequences are extremely serious. A very important resource is being poorly managed and a group of people are being very poorly treated. It is time that the government put up a fund so that these people can be at least protected from losing everything for which they have ever worked. This should be done, whether the government does it through the minister responsible for the Unemployment Insurance Commission, through the Minister of Fisheries and Oceans or the Minister of Finance.
I would like to speak for a few moments only about some of the things that this borrowing authority, putting aside government spending, could do for Indian communities. In my riding there are 18 basic Indian communities. Again, they face problems much like any of the others. I would select maybe two bands from the coastal Indians as examples to illustrate what the government could be doing instead of what it is doing right now.
It is my understanding that the government has developed an envelope system. The word is that the government has put $26 million into a social affairs envelope and has tried to hold the line on costs. At the other end of the process there is an Indian band at Bella Coola which draws a budget together at the beginning of the year. The band said it needs $1.8 million to run the band, and they are not fooling. That is their basic bottom line cost. That provides basic necessities for people on social assistance, because the government policy is not designed to help Indians create economic development or to put people in those communities to work. That is basically the amount of money required to hold them at the subsistence level. Many bands are budgeting at that level. However, the band at Bella Coola included provision for some economic development and housing development, and they arrived at a budget of $1.8 million. As this budget filtered through the system with no consultation and no real consideration, it joined the district budget in Vancouver with 51 other bands. It then joined the B.C. region, went to Ottawa, and Ottawa said it would chop $25 million off the region, just "bang". "Make it do", is what Ottawa said. When it came back to British Columbia, it went to the region, and the regional manager was stuck with accepting a budget which was $25 million short, and trying to feed people, build houses for them, and provide education for their children. It must keep the regional manager awake every night of the week to try to figure out how he will do that while dealing with human lives and misery. However, then it went down to Bella Coola, and the regional manager and the district manager eventually said to the chief and the 500 people who live at Bella Coola in the band and in the village, "You have to get by with $1.3 million".
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What will happen? Most of their population is under 18 years of age, and they will be forming families in the next few years, and the demand for housing will simply skyrocket. Their children have never graduated from high school. It has been a terrible situation. The education system is not acceptable. They have developed a band school, but there is no funding for it. They cannot meet the payroll for the teachers. The teachers will leave and the kids will lose this year.
However, there is another interesting matter for the minister responsible for unemployment insurance. It might pay if he were to take a look into this matter tomorrow morning. In Bella Coola there are many people with pending unemployment insurance claims. The band was counting on the fact that it would not have to pay welfare to those people who did work. However, there are unemployment insurance claims which have been pending for three or four months. This band is roughly 300 miles up the coast of B.C., and those people had to be paid welfare until their UIC claims were processed or until the band ran out of money. Right now, the band can no longer pay welfare, and its budget was to last until the end of the fiscal year. Now they cannot meet the payroll of band officers, and they can no longer pay schoolteachers to educate their children. They cannot even pay welfare to the people who are unemployed. Those people have no income, and in some cases there is nothing left to eat. Part of this situation has been caused by pending unemployment insurance, a matter which could be resolved if someone would pay some attention to that community. Basically, budget costs cannot be cut off at that level.
1 know that this borrowing authority is down from last year, and the Minister of Finance is expecting to get pats on the back. But, believe me, if he would get his butt up to Bella Coola and have a look at the reality of what those kinds of cuts are doing to people, then, by gosh, maybe we would have a different kind of borrowing authority before us.
Yes, when you get stuck in the ivory tower here, I think the world appears much different from the reality. Fishermen are now faced with losing everything for which they ever worked. Indian bands in Bella Coola are attempting to pay real, basic costs with money which does not exist. Senior citizens and handicapped people in those communities have the same problems as we do. However, they are told that they will receive $6,500 for all of those support services. If some of those ministers over there would go into those communities, they would come out without their hair, and that is the reality, and I would be there to help them.


An hon. Member:: That's what happened to Ron Basford.


Raymond John Skelly: It is not really so much worth a giggle as it is worth having a look at, and I am very sincere about that. 1 know that some of those ministers have gone into those communities, but it would surely pay them to go again to have a look at the effects of their present economic policies.
The next item which might be worth mentioning again is the forestry industry. I would say that roughly 60 per cent of the people in that industry in my riding have been laid off. That is
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not only true of my riding. Certainly constituents of other hon. members are dependent on the forestry industry. The forestry industry is in a very serious situation. We see a lot of money being produced in a lot of other areas to help out. We are finding that funds are being put up for work-sharing programs, and they are being directed to various communities. However, what we need is a strategy in areas like the one I represent, which will be of assistance to those communities. There is no possibility of work sharing when the mill is shut down and when lumber can no longer be exported.
However, there are other alternatives. The forest industry has upgraded the resource for years. We have carved trees out of river valleys, and now the trees are a long way up in the mountains and are extremely expensive to harvest. There have been fire burns, and disease has ripped through the forests. In those areas, there is a tremendous need for reforestation, and new jobs could certainly be created which would protect and enhance that resource for future generations. If we were to move seriously in that direction, some of the current dislocation in the forest industry could be currently offset by jobs created by federal-provincial co-operation in intensive reforestation and forest management programs.
There are options which are not being considered. This borrowing authority could include funds to provide for those kinds of projects. This would have an immediate impact on small business and communities in those areas.
I would like to indicate briefly how some of the small businesses are fairing in those communities because of the shutdown in the forest industry and because of the inability of fishermen to bring revenue into the communities. The other day, 1 had an interesting telephone call from an individual, a small-business man, who was attempting to collect overdue debts in one of those communities. His accounts receivable had risen to the point where his cash flow was very seriously affected. To his surprise, the small-business man found out, by phoning around to 20 businesses which owed him money, that none of those businesses were in a position to pay him. As a matter of fact, many of them said, "Forget it. I doubt if I will ever be able to pay you back a nickel because I am facing bankruptcy or receivership. My creditors are on top of me, and I cannot collect my accounts."
This malaise, this disease or disorder, has spread right through the entire economy. It is extremely important that the government become realistic and not fall back on economic theories, I guess, which have been gleaned from the nineteenth century or even earlier. We have been told time and time again that the cure of the disease arising from high interest rates will be certainly far worse than anything we ever expected.
The question of fiscal restraint in the government being applied now is complete foolishness. In some cases the government could create a stimulus or an investment in the community which frees and moves other dollars. The kind of government restraint now in place will not do anything except harm people further. We are back to the old suicide configuration.
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February 16, 1982
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the wage control package toward which, it seems, the Prime Minister is moving. It should not take anyone with half a brain on the other side of the House to figure out where that will lead both that party and this country.
In those remarks, I hope, I have put forward a positive suggestion or two, or a direction which the government may take that could help many of the individuals and specific groups being harmed.
There is one other area I would like to touch on in the short time remaining. It affects both coasts of this country and the industrialized areas of central Canada. I refer to the whole marine industry. It appears we are looking forward to a period of time in which offshore resources and the development of resources on Canada lands will lead to an enormous potential in the marine industries of Canada, shipbuilding and allied trades.
The Royal Bank of Canada, in its estimate of expenditures between now and the year 2000, states that resource development investment might go as much as a trillion dollars. We had billions projected in the megaprojects task force report. There is general consensus that the amount of money available for Canadian industry, if we plan properly, is enormous. In the marine sector in particular, the building of offshore platforms, supply ships, the infrastructure, the communities, the dredging, there is an enormous amount of money available to Canadian industry and an enormous job potential.
We talked of this for many months when Bill C-48 was before the Standing Committee on National Resources and Public Works. At one point, two ministers, the Minister of Energy, Mines and Resources (Mr. Lalonde) and the Minister of Industry, Trade and Commerce (Mr. Gray) appeared before the committee. They said they understood the problem, and that, as far as the law goes, they wanted us to leave it totally in their hands. They said they would take care of the problem because they recognized it. In a very candid way at a closed meeting, the Minister of Industry, Trade and Commerce suggested he had it well in hand with a committee of roughly 24 people, which he called the committee of industrial benefits. They were going to capture for Canadians the benefits of our offshore development.
The reality is that it is going to be a colossal failure. Time after time he was in the House when the matter of the ships being built offshore was raised. They are being built in Japan, Taiwan, Hong Kong, Europe and the United States. He agreed they were being built there, but asked us to look at what else the government has done. He was often proud to mention the Burrard drydock in which the government invested so heavily. Unfortunately, the drydock was built in Japan. He mentioned that the same had been done for Dome Petroleum. Of course, some of their vessels are being built in Japan.
A very different view of what Canadians were going to be able to do was given by the oil companies when they appeared before the Standing Committee on National Resources and Public Works. They stated that, in reality, Canadians are not ready. They want to move quickly. They have a need for
equipment and specialized personnel. They told us that, quite frankly, unless we moved yesterday, we are not going to be able to capture the benefits we would expect.
In Britain and Norway, roughly half a million jobs came out of the development of offshore oil. Half of those jobs were created in the United States. Another quarter were created in the industrial parts of Great Britain. The parts of the country in which the industrial activity or resource activity should have occurred were those areas which had been depressed for years, yet we found that very few jobs were created there.
Now we are looking at development off Atlantic Canada. Within a few years we will probably be looking at it off British Columbia. I say to the government that British Columbians and people in Atlantic Canada are looking for the benefits to accrue to this country. We want our shipbuilding industry to hire Canadians, not import help from offshore. We want those jobs to accrue in our yards. Frankly, this will not be done with 24 people in an industrial benefits office. The British used thousands of people. They used enormous numbers of engineers for evaluation and development of those programs. By the time the project had reached full speed, the British had managed to capture a large number of those jobs. Unfortunately, we do not show any inclination to do that.
In terms of government involvement, borrowing authority and economic programs, this is discouraging more Canadian involvement in our Canadian industry and opportunities for Canadian employment than we are getting. I believe that at the present time the Minister of Industry, Trade and Commerce has created more jobs in the marine industries in Europe, Japan, the Far East and the United States than he has in Canada with the programs he has in place.
There are many other areas in which that particular sector has been held down and depressed for years. My colleagues from the province of Quebec must express concern about the development of the shipbuilding industry in that province because it is an important one. However, it also affects Ontario, the maritimes and the west coast of this country.
For years we have said it is time this country got going on developing its own merchant fleet. We ship offshore enormous amounts of grain. We let the Chinese, Russians, Americans and Europeans haul it away. We do not carry the product.
The United Nations put forward proposals that 40 per cent of a nation's goods should be carried in its own ships. It would give a stable base for that operation. For years we have not seen a move on that. The government has fought it right, left and centre.
A few months ago, during the Grey Cup game, the Canadian Pacific Company, our old friends which have been intimately involved in hauling our goods in and out of the country, placed an ad on television. It showed the Beaverford, an old CP vessel which was an armed cargo ship during World War II. It conveyed goods back and forth across the Atlantic. I believe the Beaverford had two very small guns. That ship was attacked by a German pocket battleship. It managed to hold the German ship for five and a half hours while the rest of the
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convoy managed to escape. It was a miraculous feat. It was hit by a torpedo and all hands were lost.
Unfortunately, CP capitalized on that. It said this was their tradition in the past, fighting for Canadians. They were trying to link that tradition with their tradition of today. Their tradition today is to have their ships registered in foreign countries. They moved from Bermuda. 1 guess they were not getting a good enough deal there. They moved their ship registry to Britain and Hong Kong. They sail their ships with foreign crews. Frankly, neither I nor my children are interested in the future that CP has for this country until those ships are registered in this country, are sailed by Canadians, and the returns from those efforts come back to Canada.


Walter David Baker: That is because of the policies of the government you support.


Raymond John Skelly: The hon. member for Nepean-Carleton (Mr. Baker) says that is because of the policies of the government that we support. Unfortunately we notice that his government committed suicide before it was able to put any good policies in place.


Walter David Baker: You are going to eat those words.


Raymond John Skelly: There are a lot of words we may have to eat in this place. At any rate, the one thing on which the hon. member for Nepean-Carleton and I agree is that there should be a Canadian merchant fleet. Maybe there is a time in the future when he will be able to assist us to put that policy in place, because this government does not seem too interested. It is not just the CPR but many other Canadian companies that are in the same business. If we were to bring those on side, it is felt that the earnings would more than offset our current deficit in the balance of payments. Why the government does not move would escape anyone-unless it is paying off friends.
Basically, there is room to move. There are policies which could be put in place which would be far more effective and would not cause the kind of human suffering we see in this country. There are opportunities for full employment and fair employment for Canadians. There is a chance for people in this country to own their homes and to live with decent incomes in dignity. Unfortunately, this government has failed to adopt the proper policies and to move on them. Frankly, it is unfortunate it has not resigned.


Mr. Friesen:: Mr. Speaker, I wonder if the hon. member for Comox-Powell River (Mr. Skelly) would allow one short question.


Mr. Deputy Speaker:: Would the hon. member for Comox-Powell River (Mr. Skelly) accept a question?


Raymond John Skelly: Of course.
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Benno Friesen: The hon. member spoke with some enthusiasm about the future of the marine industry in Canada and in British Columbia, particularly when it comes to building offshore platforms and energy exploration. 1 wonder if the hon. member would tell the House whether he supports offshore oil exploration in British Columbia.


Raymond John Skelly: Mr. Speaker, proper studies must be conducted.


Walter David Baker: Yes or no.


Raymond John Skelly: Yes or no?


Arthur Jacob (Jake) Epp: Are you going to build a platform on a study?


Raymond John Skelly: Mr. Speaker, it is impossible to answer the question.


Mr. Deputy Speaker:: The hon. member for Comox-Powell River has the floor.


Raymond John Skelly: The hon. member for Surrey-White Rock-North Delta (Mr. Friesen) has asked a provocative question. However, there are jobs already available upon which we as British Columbians are not being given an opportunity to work. The rim gas project will deliver British Columbia gas to Japan. We are not getting an opportunity to build all those vessels. They are being built in Japan. We did not get a chance to build the Burrard drydock, although we were capable of building it. The Tories gave away that job to the Japanese.
With respect to offshore drilling and oil exploration on the west coast, what we need is some consultation with the people of British Columbia.


Arthur Jacob (Jake) Epp: Are you for it or against it?


Mr. Hnatyshyn:: Thank God this is not question period.


Arthur Jacob (Jake) Epp: Are you for it or against it?


Derek Nigel Ernest Blackburn: Only you simpletons can answer yes or no.


Raymond John Skelly: What is needed is proper environmental impact studies, proper social impact studies and an assessment of the proposals which are put forward, and at that point British Columbians would certainly be in a position to make a decision about the advisability of oil and gas exploration.
There is another option for B.C. shipbuilding though. The coast of B.C. is not the only place in the world where these B.C. built marine platforms could be used. They could be used in the Beaufort Sea and the opportunity certainly is there for jobs to be created for British Columbia in those areas.
I thank the hon. member for his question.


Peter Elzinga: Mr. Speaker, in dealing with Bill C-93, I wish to deal with Part I, the borrowing authority provision, which grants the government the authority to borrow some $6.6 billion.
Rather than dealing with the various economic theories and putting blame on the government for the record high inflation

February 16, 1982
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it caused, the record high interest rates it has caused, the record high government borrowing it has made necessary, the record high government budgetary deficits, the record high government spending, the record high unemployment and record number of bankruptcies, I would like to direct my thrust this evening to the plight of a segment of our society which usually does not get much attention from the House, yet it is the very foundation of our present society and, most certainly, the society of Canada in the future. I am speaking, of course, of the family unit.
As we are all too well aware, the family has had to endure enormous strains in the recent past, and this has brought about extensive changes to its structure. Some are for the better but, unfortunately, a great many of these changes are to its detriment. The changes are continuing, and no one can predict when the situation will stabilize.
The stresses of today stem from many causes, but one prevalent result is family breakdown. There has been an alarming increase in the number of divorces in Canada-a 70 per cent increase, in fact, since 1970-with no sign of a reversal of this trend. The number of single parent families in Canada has been growing, to the point that 10 per cent of all our families are now headed by one parent. Our statisticians tell us it is more than likely that that parent will be a woman, since the heads of eight of ten single parent families of every 100 will be mothers.
In the years between 1969 and 1973, there were close to
150,000	children involved in divorce actions, and the number affected has been rising yearly. These children will most likely be living with their mothers and this, far too often, means living in poverty and, frequently, on welfare.
Although a single father has some of the same problems as his female counterpart, he is not nearly as likely to be subjected to her most serious concern, that of poverty.
Poverty does not present just one problem, but many. The quality of life in general is affected by poverty. Some of those undesirable qualities are instability, alcoholism, mental strain and low educational achievement.
Since poverty is often at the root of these social ills, the lone woman parent is in a precarious position. Facing a heavy load of responsibility, she must continuously bear the pressures of child rearing and, as was pointed out, too often in poverty. These women run the overwhelmingly high risk of being poor.
Statistics show that nearly half of the mothers living alone with their children will find themselves existing below the poverty line, and nearly all of the half-a whopping 98 per cent-on welfare.
Along with the grinding poverty of welfare goes the feeling of inadequacy and the stigma of isolation and discrimination. Certainly this is not the emotional environment that fosters the self-reliant and stable kind of future citizens we want to see our children become.
The reasons for the economic deprivation of such a large proportion of households headed by women are many, and all levels of government and society must share the blame.
Efforts to provide income security and needed services in Canada have involved different kinds of legislation; some exclusively federal, some exclusively provincial and some cost-shared by the two levels of government.
Under the Canada Assistance Plan, the federal government shares costs with the provinces of social services provided by the provinces to persons in need. This includes mother's allowance, child welfare maintenance, health care services for the needy and the extension of welfare services in many other general areas.
However, the constitutional division of responsibilities has resulted in this "patchwork quilt" system. This system has succeeded in binding many of the poor, single women so tightly with bureaucratic red tape-with rules and regulations that are counterproductive-that they soon give up hope of ever becoming self-sufficient, contributing members of society.
Since our present economic climate almost necessitates that both parents work outside the home and since it takes two to keep the family solvent, the single mother and her children fare very poorly in such an environment. If she tries to find employment, she discovers that women's wages are considerably lower than men's. In fact, her pay will likely be 50 per cent less than a man's, and she will have little opportunity to upgrade her skills.
The most serious problem facing the single mother who wants to enter the work force-and indeed the major headache for all working parents-is to secure adequate care for children during the hours they are away from the home. The need for substitute child care has increased dramatically, but this need has definitely not been well met at any level.
Practically 90 per cent of working mothers must seek private arrangements for their children's care. These alternatives to a regulated centre have been documented in the book, "The Kin Trade", written by Laura Johnson and Janice Dineen. They say child care conditions in unsupervised homes are often profiteering and unsanitary, and that there is an epidemic of child neglect and widespread abuse. The care substitutes are too often grossly incapable of giving the children adequate care at its most basic levels, let alone any kind of stimulation or nurture which will enrich them.
There are 600,000 children under the age of seven who have no access to daycare. In the few areas where there is excellent daycare, it is available only to the very rich who can afford it, or to the poor whose fees are subsidized. All our children are entitled to the very best possible care that we can give them.
What of the centres that do exist? They are subject to few legal standards to ensure that enough staff is hired or that they have been properly trained and are adequately paid or that the physical environment conditions are suitable for children. We licence and supervise many things in our society. Our hospitals and restaurants come under severe and constant surveillance for the maintenance of sanitary and safety standards. The physical surroundings of our children who must be away from
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their own homes for many of their waking hours does not seem to matter very much.
We are told by experts in the Field of human development that the first few years of life are so crucial, so vital, that the whole of a person's future social development, self-esteem and ability to cope and contribute to society depends on that initial nurturing.
Let us ask ourselves what value we place on that fact. It is as important to our children-perhaps even more important to them-that they have adequate care as it is for them to have an adequate education.
We worship at the knee of higher education, yet ignore the very rock upon which the learning capability of a person is established, the early childhood experience.
Can you see something wrong, something very wrong with our priorities when we give our colleges and universities millions of support dollars and then dole out an absolute pittance to the care facilities of our youngest citizens?
How can we rationalize the monetary-value priority we place on university professors compared to that granted to early childhood educators who themselves must live on the brink of poverty?
Free education through high school is extended to every Canadian, and yet the very crumbs of our money, our interest, our concern and our support, go toward the initial step in the education for living. 1 contend, Mr. Speaker, that our emphasis is wrong. Not that secondary education is not important, but of what value is it if the students have been neglected in their formative years, with the resulting damage to personality and learning ability?
With the present high cost of child rearing, it is unrealistic to expect parents to manage the full financial responsibility of raising the next generation. To those with the mentality that says, "If they want children, let the parents pay for them", let me say that we need today's children and they are not to blame for having parents priced right out of their homes.
1 strongly suggest that this House pay serious attention to the national task force on daycare which has been recommending since April of 1980 that we pass a national daycare act.
This act would stipulate that provincial programs must have adequate child-staff ratios, adequate levels of staff competency and suitable physical environments before they can receive federal money, rather than being eligible for federal cost-sharing regardless of the standards of the daycare supplied.
The National Agenda for Action for Canada's Children, the report of the Canadian Commission for the International Year of the Child, states that the federal government has an important role to play both in directing more funds to the provinces for building and for the staffing of child care centres in order to improve the quality of those centres.
It recommends that federal funds be made available on a cost-shared basis for the construction and operation of nonprofit daycare centres meeting specified acceptable standards
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set by the provinces. National standards for the acceptance of the centres should be established too. Special grants should be made available to schools and other institutions wishing to adapt their facilities to provide for all-day care programs.
The report also recommends that federal subsidies be provided to the daycare agencies based on a sliding scale whereby the parent pays according to ability to pay.
It suggests also that the Income Tax Act be amended to provide tax incentives for all homes and institutions offering properly supervised, qualified, child care. The Income Tax Act could be amended to allow parents to deduct the full cost of child care up to $3,000 per child and taxable family allowances to be raised to the level suggested by the Royal Commission on the Status of Women in 1970.
The Agenda for Action goes on to state the following:
At present, child care workers and other care-givers, are chronically underpaid. Child care is important work and those who care for children should be valued accordingly. In addition to the remuneration of care-givers-


Margaret Anne Mitchell: Mr. Speaker, a point of order. I wonder if the hon. member would entertain a question?


Mr. Deputy Speaker:: Would the hon. member for Pembina (Mr. Elzinga) accept a question?


Peter Elzinga: In the event that I have any time left at the end of my speech, I will be happy to entertain a question.
The Agenda for Action continues:
-good child care is dependent upon well-developed programs and services provided by competent, trained personnel working under reasonable conditions.
The report recommends that child care should be available near the home or place of work and easily accessible to public transportation.
I should like to see tax concessions given to businesses and industries that provide on-site care facilities to the children of their employees.
Executives of businesses are beginning to realize that daycare is now a key management issue and is essential if women are to have equal opportunity in the work force.
As well as opportunity, women who must work are entitled to the least amount of physical and emotional strain possible in settling their children into their substitute home environment. At this point, I would like to congratulate several of the governmental departments which have made available such facilities for the children of their employees. May I add a word of personal commendation to Madam Speaker for providing such services for House of Commons employees. It is an enlightened step and one which I hope will be emulated by all government departments.
The wage-earning poor in Canada must be encouraged in every way possible to make it worth their while to work. If it is not, there will come a time when a top-heavy welfare class is going to topple our economic structures. Some serious thought has to go into tackling this problem head-on and some significant solutions must be found.

February 16, 1982
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The welfare mother who works part-time is allowed to keep a very moderate sum of her earnings above her welfare benefits. This is soon eaten up in babysitting costs and, as has just been pointed out, too often in an undesirable environment.
There are transportation and work-related expenses too. She is faced with discouragement every step of the way in trying to lift herself out of the welfare treadmill. Every effort must be made by governments, social agencies and society as a whole, to get her into the mainstream of life again, to be self-sufficient and self-respecting as a contributing individual.
Can there be any greater irony than the fact that a mother's care for her own child is considered to be of less value than that of a surrogate parent? At present, a welfare mother with one child, in Ontario, lives on about $5,000 a year, and yet a foster or group home is paid between almost $7,000 and $13,000 for the care of one child.
Being forced to stay on welfare and out of the work force is not only damaging to a single mother emotionally, but economically, to her and eventually to the country at large. If she cannot enter the work force until her children are older, she too will be older and will find it even more difficult to find productive and rewarding employment. Add to that the endangered position in which she will find herself during her later years if she has not had an opportunity to contribute to a pension plan.
Once again, the public will have to contribute directly to her maintenance. How much better for all concerned if she could have had the opportunity to provide for her later years herself.
There are few financial incentives to part-time employees and to low-wage earners. We realize that a great many of their number is made up of single parents, and the federal and provincial governments could assist them greatly by introducing practical income supplement programs.
A few provinces have taken some positive action in this area, and Saskatchewan is to be commended. Manitoba has begun a child-related income support program. Quebec's work income-supplement program, granting tax credits through the provincial income tax system, has the positive aim of encouraging low-income earners to remain in the labour force and to motivate welfare recipients who are employable to join the labour force.
I hope that consideration will be given by the House to the recommendations of the National Council on Welfare that the federal government set guidelines as a pre-condition for cost sharing, to bring about additional improvements to existing welfare conditions. It would require provincial governments to introduce programs in which there would be a reduction rate of family benefit payments, the rate at which benefits are reduced for earned income. Lone parents would be encouraged to undertake part-time work with such encouragement.
As well as in the work situation, there is another area where single mothers fare badly. When children remain with their mothers after divorce, as most do, it has been found that child
support payments are generally inadequate, non-existent or uncollectable. The Law Reform Commission of Canada estimated that 75 per cent of all maintenance orders are not enforced. This means dependants are often pushed back on the welfare rolls, and we know who foots the bill.
The legislation proposed by the hon. member for Capilano (Mr. Huntington) early last year would have dealt directly with this sort of situation. It would have given some much needed rights of enforcement to the courts, making maintenance and other money orders pursuant to the Divorce Act. It is regrettable that Bill C-250 did not receive more serious attention in the chamber.
The province of Manitoba would like to see a central federal registry of all maintenance and custody orders, with Ottawa expanding its role to cover enforcement of these orders. It wants an order issued in one province to be valid, coast to coast, and it calls for a federal-provincial information bank which would be of immeasurable assistance in tracing defaulting spouses. Manitoba has been the spearhead in insisting that family law receive its rightful attention in constitutional talks. Authorities of the province claim that if the divorce law is allowed to come under provincial jurisdiction, there will be ten different divorce laws. This would precipitate the danger of some provinces becoming divorce havens, and enforcement of court orders would be hopelessly tangled with ensuing costly litigation.
The whole area of divorce, separation laws, child custody, maintenance and alimony, needs a complete reorganization. We should give thoughtful consideration to laws governing these situations being federal and enforced by provincially-appointed judges, as is the system now used in the field of criminal law. I urge my fellow members to give their concerned attention to the matter of family law and to the best interests of all Canadians. Canadians should have the right, no matter where they live, to consistency and uniformity in this critical area. Between present federal and provincial avenues of control and legislative jurisdiction, the situation of the divided family has become a hopelessly snarled mess. It is the persons in these families with whom we are dealing, persons who have endured conflict and children whose homes have been broken because of conflict.
The most valuable national product of Canada is not gas or oil, not wheat or fish or minerals; it is the children of the country. Tragically those children and their wellbeing are not a priority as far as the Government of Canada is concerned. Our children are the most important asset we have in Canada. They will be making the decisions for Canada in the future and will be directing Canadian affairs. They need to be carefully nurtured and trained for their role as leaders of the country. They must be given every opportunity to develop into healthy, stable, educated persons with positive self-images. Unfortunately, because of the social upheaval of recent decades, not enough of our children are receiving such an upbringing or that kind of support, direction and encouragement. To our national shame, too many children are being neglected and deprived.

Mrs. Landon Pearson, vice-chairperson of the Canadian Commission on the International Year of the Child, made recommendations to the Standing Committee on Health, Welfare and Social Affairs in February, 1981. I should like to quote some of her remarks before the committee, as they were so relevant, urgent and vital to the present and future wellbeing of all children. She indicated:
-we can do a great deal better than we are doing with respect to our children. It is a question of priority. The potential is there.
Children will always end up at the bottom of the priority list unless they are a first responsibility to someone, and there is at this stage within the federal government no place where the child is a first responsibility.
She went on to say:
-children are a national responsibility as well as a national resource . .. and the responsibility for safeguarding and developing this resource is something which must be shared for it is a national, as well as a provincial, a community and an individual one.
In making their presentation, Mrs. Pearson and her commission members went on to suggest some recommendations to the federal government as to how best it could exercise its considerable responibility for the welfare of its youngest citizens who cannot speak for themselves. They were concerned about lack of co-ordination and the fragmentation of existing structures of programs at all levels of government which are concerned with children. They pointed out that there is no national focus or federal body which is exclusively responsible for the wellbeing of children.
The Standing Committee on Health, Welfare and Social Affairs, upon studying the report, made recommendations which would further the basic goals of a strengthened family. This would help to create a climate of economic and emotional support for children, while promoting justice for them and defending their right to full development.
The committee was impressed with the need for the formation of a central mechanism to which the problems of children could be addressed in a continuing way. It saw a need for liaison among different levels of government and non-governmental organizations. This need would be best met by the formation of a specific structure for a secretariat for children's affairs, adequately funded at the federal level. Therefore it recommended that the government establish, within the mandate of the Minister of Justice and the Minister of State for Social Development (Mr. Chretien), a secretariat for children's affairs, and it urged the implementation of these recommendations as soon as possible.
I congratulate the Canadian Commission on the International Year of the Child for its thoughtful and dedicated report to the Standing Committee on Health, Welfare and Social Affairs. One third of our population is comprised of children, children who have no voice in their destiny, no vote, no clout, and whose interests are often ignored. We ignore them at our peril, for our future will be held in their hands, and we wish them as bright a future as we wish for all Canadians.


Margaret Anne Mitchell: Mr. Speaker, I should like to direct a question to the hon. member, if he agrees. I am wondering
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whether the hon. member, and government members as well, are aware of the fact that the subcommittee of the Standing Committee on Health, Welfare and Social Affairs, which received reports last year from the Commission on the International Year of the Child, worked for many months to prepare urgent recommendations for government action and presented them last July. Is he aware that the government has done absolutely nothing about the recommendations and that they have not gone to cabinet? Indeed, the Minister of National Health and Welfare (Miss Begin) appeared to have hardly read them when I spoke with her about them. If he is aware of these facts, I wonder what action he feels should be taken to awaken the government to the needs of children.


Peter Elzinga: Mr. Speaker, the hon. member has just confirmed her ignorance, because we served together on the committee. Had she listened to my presentation, she would have heard that that is exactly what I encouraged the government to do.


Blaine Allen Thacker: Mr. Speaker, the hon. member for Vancouver East (Mrs. Mitchell) should go back to sleep as she was before. I do not know why hon. members of the NDP always rise to ask questions. I have the feeling it is because they want to show their constituents that they are participating in the deliberations of the House.
I congratulate the hon. member for Pembina (Mr. Elzinga) for the finest speech given in the House on people who really care for other people.


Some hon. Members:: Hear, hear!


Blaine Allen Thacker: May I call it ten o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House deemed to have been moved.

Walter David Baker: Mr. Speaker, although the questions to the Minister of Public Works (Mr. Cosgrove) were asked some time ago, the whole question of grants in lieu of taxes must be in the minds of municipal taxpayers all across the country, especially in areas where there are concentrations of federal government departments and Crown corporations.
I put this matter down for debate tonight because in my own region of Ottawa Carleton which encompasses five municipalities and make up the constituency of Nepean-Carleton, the regional council is just now in the business of striking the

February 16, 1982
Adjournment Debate
regional rate which will impact on every taxpayer in the area whether that taxpayer is a home owner, a farmer, a commercial operator or an industrialist, if he either owns lands or rents property.
To the extent the federal government and Crown corporation properties are not valued for tax purposes in the same way as privately owned properties, the burden for providing municipal services in that area falls to a greater degree on the ordinary municipal taxpayer.
Perhaps, Mr. Speaker, you have read the interesting submission to the federal-municipal grants task force by the city of Kanata in my constituency, supported by the city of Ottawa, wherein it was recognized that a problem exists because the federal government still has an arbitrary right to decide what is fair in its opinion in terms of grants in lieu of taxes. I want to read part of the brief. In part, the second paragraph reads:
Presently, where there are differences in the evaluation placed on federal property as determined by the provincial assessment commissioner and the federal government, the federal minister has the right to unilaterally decide on the evaluation. It is the position of the City of Kanata, as well as many other municipalities, that federal properties should be valued in the same way as those owned by private individuals. Hence it is essential that there be an appeal procedure whereby an impartial ruling can be made on the value to be used for grant purposes.
I think that is quite a reasonable proposition and I hope the parliamentary secretary will speak to that this evening.
The city of Kanata brief then touched on the difficult problem of business tax, particularly the fact that in that municipality AECL has said it is not bound to pay business tax, although it has made some transitional grants to assist. The city of Kanata took the position that there should be an impartial process to determine whether a Crown corporation is one that is to pay business tax or whether it is not one to pay business tax. This is also a reasonable proposition. Now it is done arbitrarily by government by order in council.
The city of Kanata also raised in its brief the position of Canada Post. In that connection we find the following:
One further concern is the way in which new Crown corporations will be allocated to a schedule. An example of this is the newly formed Canada Post. It is the city of Kanata's belief that Canada Post, under its new mandate, is the equivalent of a private business corporation. As a result it should be paying payments-in-lieu equivalent to both land, building, and business tax. It is understood that Canada Post has been placed in Schedule 3.
It is therefore not liable for business tax. The paragraph continues:
If this is the case then there should be some appeal process to determine whether or not that schedule is appropriate.
The proposal in this brief is one way of settling the difficulty that exists. I hope the government will listen to the importance of that.
While I am on the subject, and I have the floor with respect to the problems that affect us here in this area, I want to remind the parliamentary secretary of the immense relocation of government buildings to Hull, Quebec. No one will fault Hull, Quebec, for its good fortune, least of all me. But I want to remind the government of the presence in this area, particularly in the city of Kanata and in the western end of Nepean,
of the very important high technology industry in the national capital area. I want to say to the government that when it is considering decentralization of government departments or agencies, the importance of maintaining those government departments and agencies here in an area that can provide appropriate service to those government buildings and agencies should be considered.
I have one thing in mind, and that is a proposal to move the mapping surveys branch of the Department of Energy, Mines and Resources to Sherbrooke, Quebec. This is what a constituent of mine wrote to me concerning this. He said:
As a concerned citizen, and one who is very familiar with this government organization, I very honestly fail to comprehend just how anyone could make such a decision that might eventually cause the relocation from Ottawa to anywhere in Canada for such a high technology government branch.
As I am sure you know the surveys and mapping branch has the responsibility of producing maps and plans in varying scales for all sectors of Canada, and to carry out their duties they require very sophisticated equipment, in large quantities, in the disciplines of geodesy, photogrammetry and cartography with strong support from computers.
What I am saying, Sir, is that with respect to taxation there be some good reason for relocation. The appeal process proposed by the city of Kanata is a good way to find out really how much is owed both for business taxes and whether or not it is applicable, as well as grants in lieu of taxes. Secondly, I ask the government, when it is considering any relocation, to remind itself that in the city of Nepean and the city of Kanata there are land-use plans available crying out for government agencies, particularly those-although not limited to this- that relate to the high technology field. In those two areas there could be a great benefit to those two cities.


Mr. Raymond Savard (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, I should be pleased to answer the question raised in the House by the hon. member for Nepean-Carleton (Mr. Baker) on February 20, 1981. The Minister of Public Works (Mr. Cosgrove) has managed to solve the problem, and in fact, on December 22, 1981, the Department of Public Works issued a press release which included the following:
The sum of $34,030,000 has been paid to the city of Ottawa as grants in lieu of taxes for 1980. This was announced today by the Hon. Jean-Luc Pepin, Minister of Transport Canada, on behalf of the Hon. Paul Cosgrove, Minister of Public Works Canada.
The amount of the grant, which constitutes an increase of $5,300,000 over 1979, covers all federal property in Ottawa included in the municipal grants program administered by PWC.
When it was announced that the amount of the grant would be increased for 1980, Mr. Pepin said he was pleased that lengthy negotiations by the federal government with the provincial and municipal governments had resulted in an agree-
February 16, 1982

ment on the status of grants in lieu of taxes in Ottawa. According to the British North America Act, federal and provincial property are exempted from property taxes. However, since 1950, federal legislation has provided for payment of grants in lieu of taxes, in order to reimburse municipalities for provision of local services.
In 1980, Parliament passed new legislation on municipal grants, which introduced major changes in the methods for calculating grants, the result being to increase the amounts being paid by the Government of Canada to more than 2,500 municipalities. The new Municipal Grants Act also expanded eligibility of property for the program. A number of properties formerly not affected by the program are now subject to a grant.
In Ottawa, properties that are now covered by the program include the Parliament Buildings, the National Arts Centre, the National Gallery, the National Museums and the National Library and Public Archives building. The Municipal Grants Division, formerly part of the Department of Finance, was transferred to Public Works in 1980. Finally, Mr. Speaker, I may point out that according to the media, the Mayor of Ottawa was very pleased with this announcement.


EDUCATION-FEDERAL FUNDING FOR POST-SECONDARY EDUCATION (B) LEVEL OF FUNDING
Donald Alex Blenkarn: Mr. Speaker, on November 12, the Minister of Finance (Mr. MacEachen) came to this House and said that he was going to radically alter the transfers to the provinces under established programs financing act by removing a portion of money called revenue guarantee from transfers to the provinces. That amount of money was originally represented by the minister to be $2.8 billion. This was subsequently revised by the minister in Halifax to $3.2 billion, and, when the provinces got their figures together, they determined that the reduction to the provinces amounted to $4.5 billion. This money goes toward established programs for health, and health concerns which we treat, I suppose, to be our right as Canadians. It also goes toward assistance for post-secondary education.
The question on February 10, which was directed to the Secretary of State (Mr. Regan), was in connection with the post-secondary part of those transfers.
On February 3, the Minister of National Health and Welfare (Miss Begin) indicated that there would be no cuts in the transfers she was making. On February 10, I asked the Secretary of State if there would be cuts with respect to post-secondary education. I asked him particularly if the $1.8 billion which he was transferring to the provinces in cash at that time would be increased in the way the Minister of National Health and Welfare indicated her transfers would be increased. I was not particularly happy with the answers I
Adjournment Debate
received, because the minister refused to come clean. It is my hope that tonight the parliamentary secretary will come clean.
There is no such thing as "revenue guarantee" in the blue book, the estimates filed for Canada. There has not been such a thing at any time, as far as I know, and certainly not under the terms of present established programs financing. Nowhere does "revenue guarantee" appear. The only place it appears, with respect to the whole problem before us, is in the budget of the Minister of Finance. However, the effect has been to drive concerns on the part of provinces, universities, health care institutions, doctors, and the like. The question must be settled. Is there to be a change in the transfers for post-secondary education and for health care?
The question the parliamentary secretary is to answer tonight is with respect to post-secondary education. Will the parliamentary secretary affirm tonight, in no uncertain language, that the funds which amount to $1,845 billion as set out in the current estimates for this fiscal year, in the manner they are presently transferred in the blue book for post-secondary education, will be escalated in accordance with the arrangements under established programs financing, in accordance with a moving average of GNP? The Secretary of State said that next year those transfers would be escalating approximately 12 per cent, and the Minister of National Health and Welfare said they would be escalating 13.4 per cent. In any event, will those transfers next year be escalated in accordance with the terms of the statute so that the transfers will be escalated in accordance with the moving GNP average?
I point out to the parliamentary secretary that the matter was fully considered by the task force on fiscal arrangements, and four members of the Liberal party, two members of this party, and one member of the New Democratic Party came to some pretty unanimous conclusions with respect to the allocation of moneys to the provinces. I point out that the committee dealt with the question of revenue guarantee and how that component was made up in the original calculations of 1976. The task force clearly indicated that revenue guarantee now formed part of the package for post-secondary education and health care. In particular, the task force stated:
It is our view that there is now ... no fat left in the system-no fat in post-secondary education, no fat in the health system, no excess spending in social assistance, little redundancy in social services. We accept the representations of those who argued before the task force that serious cuts in program funding would cut into muscle and sinew, not fat. Unless one could presume that federal reductions in funding would automatically be matched by corresponding increases in provincial expenditures-a presumption that may not be considered altogether plausible-then in order to maintain present standards, programs would have to be privately financed to a greater extent than at present. In health, this would mean greater appeal to user charges and more extra billing; in education, higher fees. In either case, basic national objectives of equity and equality of access would suffer.
I ask the parliamentary secretary tonight to come clean with the House of Commons, his colleagues on the government side and those on this side on the task force which unanimously recommended to the government that there be no changes in the formulae and that they proceed as they were. These are established programs. They are the programs on which the

February 16, 1982
Adjournment Debate
unity and social services of this country are based. They are based on a contribution by the federal government to postsecondary education, health care, extended health care and a formula in relation to GNP. It is time for the government, not to dance around any longer, but to come clean and tell us if in fact it plans to cut transfers to the provinces or leave them the way they are.
We do not want any gobbledygook about taxes or anything else. We want to know where we stand. Is the government prepared to fulfil the request of the task force, which was unanimous and which was supported by the Economic Council of Canada, or is it going to again dance around and say it is not cutting education, when it is in fact cutting education; not cutting health care, when it is in fact cutting health care; and as it removes certain formulae that it says exist, which in fact do not exist?
[ Translation]
Mr. Jean Lapierre (Parliamentary Secretary to Secretary
of State): Mr. Speaker, the member for Mississauga South (Mr. Blenkarn) is referring to the sum of $1.8 billion and expects us to accept word for word the report by the Task Force on Fiscal Arrangements. That is surprising, since he himself is aware the actual amount is closer to $3.2 billion, since his own task force asked us to continue-

-to calculate the equalized value of taxes transferred and that these amounts be earmarked for the program areas. We are talking about $3.2 billion. The hon. member must realize that since November 12 there has been a federal-provincial conference. The Prime Minister (Mr. Trudeau) offered to continue the present EPF program and give it a 12 per cent increase per year until March 1984. The hon. member may want to call an increase of 12 per cent a cut. 1 cannot rewrite the dictionary. The Prime Minister has placed an offer on the table. It is there. Discussions are now being held with the provincial ministers of finance. If they can reach an agreement, the 12 per cent will be added to the present amount. EPF, whether it is health care or post-secondary education-

-no cuts will be made. And I am sure the hon. member will agree that a 12 per cent increase, given our present economic situation, is quite reasonable. The condition set by the Right Hon. Prime Minister was that the provinces should do their share as well, instead of slacking on their contributions as they have been doing for a number of years. It is to be hoped that the provincial governments are also going to increase their contributions to post-secondary education, which would help to bring the system up to standard. In fact, the proposal provides for an increase of 12 per cent until 1984, so that negotiations can be continued, provided certain national principles are
adopted, with which I am sure the hon. member will agree. [English]


MINES AND MINING-LOAN TO PERU FOR COPPER MINING VENTURE (B) CREATION OF JOBS IN CANADA
James Ross Fulton: Mr. Speaker, my question arises from a deal that was struck December 11 between the government and a consortium which I am going to lay before the House tonight. It has been a litany of doubletalk, not only in terms of government policy but what the minister of mines has been telling the general public. The deal was apparently developed by Noranda Mines of Toronto during the past six months. They indicated publicly to at least some bankers that the cost for this deal to break even is about $1 U.S. a pound for the copper to be produced in Peru.
It is interesting that SNC group of Montreal will be supplying the engineering services, the design, the construction and the management for the project which supposedly is going to bring about $100 million of business to Canada, supposedly producing 2,900 person-years of employment. The Minister of State for Mines (Mrs. Erola) says 3,000 person-years. The EDC says 2,900 person-years. Neither can demonstrate to the House or to the public what any of those jobs are, even in terms of global categories. Hopefully tonight we will be able to get that from the minister.
The minister says that mine will come into operation in 1987. The EDC and the operators say it will open in about two years, in 1984. That is another discrepancy.
The minister says it will generate about $100 million in Canada, but the real question to which this House has to address itself-and I am sure many mining communities are wondering about this-is why the Government of Canada can lend $100 million to Peru at 11 per cent or less when our mining companies, particularly in the copper industry, from coast to coast are suffering, whether they be in Kamloops, Stewart, Newfoundland, Manitoba or Sudbury, where 850 jobs have just been lost. Those jobs are being lost, because of high interest rates, and because of a lack of capital to carry an inventory of copper or product, or because of a lack of manufacturing, either smelting or secondary processing.
To tie that into general government policy, on February 13 a very interesting government policy was outlined by the economic development minister, Senator Olson. He said;
From here on the national government will invest its capital in areas of prospective growth in the future-
He also said:
We're going to stop propping up mature industries that will never be competitive in this generation, like textiles, clothing, footwear and a number of others.
He went on to say:
We're not going to process every one of our natural resources into the final product. For one thing, we don't have the people. And there are lots of places in the world where they can manufacture products at a much lower cost.
February 16, 1982

That is this government's policy on economic development. The government says, "Do it somewhere else if you can make more money for somebody else."
On February 3 the Minister of State for Mines responded to a question I raised on this very issue. I pointed out that 4,000 jobs were lost in the copper mining and associated industries between the time of the announcement and the time I asked my question two weeks ago. Supposedly 2,900 person-hours of work will be created. We do not know what they are. Perhaps there will be 3,000, but we do not know what they are. Flowever, we know we have already lost 4,000 jobs since the announcement.
I asked the minister, "with the Canadian sector paying roughly double the foreign Liberal rate for capital, why does the minister believe that this kind of loan to foreign competitors is in the best interest of the Canadian copper mining industry?" The reason I asked that question was that the minister's office had informed me that the minister was opposed to this kind of deal. I certainly hope to hear from the minister tonight because she cannot go to one sector and say she is opposed and say to another sector that she is in favour. In Canadian politics and in politics around the world that is called double-talk. The minister answered and said that the loan, and I quote:
-affects a copper mine which will not come into production until roughly four or five years down the road-
That is not agreed to by the EDC.
-by which time we hope the copper situation will have improved and that the prices will have risen considerably. The fact is that that loan produces jobs in Canada immediately-
I hope to hear from the minister tonight what those immediate jobs are within the Canadian context.
The minister gave a response to the hon. member for Hamilton Mountain (Mr. Deans) on December 14 regarding this same deal saying:
Exporting the kinds of machinery and engineering techniques which are being exported is precisely what we should be doing in Canada.
I am somewhat puzzled. The Canadian mining machinery sector had a $1.5 billion deficit just last year. When we are already in a deficit position, I wonder whether we have to pay SNC Engineering from Montreal, whether we have to make a special deal for Noranda and whether we have to make all these special deals in order to export machinery. Perhaps the minister could answer very clearly whether she is in favour or opposed to this deal. She cannot have it both ways. What jobs are being created, where and for how long?
What would the situation be if the $250 million had been invested at 11 per cent in the Canadian copper mining industry, either in smelters or in actual ore extraction? What about the 4,000 jobs that have been lost, and the 850 at Sudbury? There have just been some more lay-offs in Stewart, British Columbia today. There have been lay-offs in Manitoba, in the Yukon at Whitehorse Copper, at Bethlehem Copper, Lornex, Granduc, Campbell Resources, Falconbridge, Gaspe, Asarco and Baie Verte. It is a litany. Our copper mining industry is in
Adjournment Debate
trouble, and the Government of Canada is sending capital out of the country at half the cost that industry can get it here.


Hon. Judy Erola (Minister of State (Mines)):: Mr. Speaker,
I would like to clarify a few points. I think the hon. member for Skeena (Mr. Fulton) is playing loose and fast with some figures. First, I would like to reassure the hon. member that the 850 lay-offs he reported to be taking place in Sudbury are indeed not taking place. That figure has been reduced to something like 250 at the moment, and, through close co-operation with a team from the CEIC, the provincial government and the local union we are convinced that number will be reduced to zero.
As to my opposition to this deal, let me assure the hon. member that I was not opposed to it, whatever he heard from my office. Perhaps he misconstrued the questions that I raised about the deal to be opposition. They were not; in fact, they were questions that every responsible member and every responsible minister asked of the EDC.
I should like to clarify the matter of the $250 million for the benefit of the hon. member for Skeena. The $250 million loaned to the government of Peru for the development of a new copper mine in that country is, in fact, to be provided by a group of 11 commercial banks, two of which are Canadian, at normal commercial interest rates, which leaves a balance of $100 million to be provided by the Export Development Corporation. I should like to assure the hon. member that this $100 million will be provided at normal consensus rate guidelines developed by the OECD, so that reduces the loan considerably.
The key purpose of the EDC loan is to generate export business for Canadian manufacturing and service industries from foreign developments that are expected to proceed, regardless of Canadian involvement. 1 should like to assure the hon. member that whether or not the Canadians he lists were involved in this deal, the deal would go on and the copper would be coming onstream four years from now, I guess. I rather doubt it will be onstream much sooner than that. This is certainly the case with the Tintaya loan.
With respect to jobs created in Canada, SNC Group of Montreal already has Canadians working on the project management, and a number of contracts for Canadian-produced mining equipment are expected to be signed this month. I am sure the hon. member appreciates the fact that these contracts must remain confidential until they are signed. As they become public, let me assure him that I will let him know about them as quickly as I am apprised.
Mining equipment and supplies to be purchased are to come from almost every Canadian province and are expected to create the 2,900 person-years of employment in Canada between now and 1985. Again, I should like to assure the hon. member that only the Canadian content is financed by the EDC-only the Canadian content! Those jobs have to be provided in Canada, or they will not be funded by the EDC.

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Adjournment Debate
There may be some confusion on the part of the hon. member for Skeena concerning this loan. The Peruvian copper mine in question will be developed for production by the mid-1980s whether or not Canadian financing is provided. In fact, the Export Development Corporation faced very stiff competition in winning the loan package so as to generate the $100 million in Canadian purchases.
This loan constitutes Canadian government Financial and technical assistance and I am sure the hon. member would
agree that it is important to provide this kind of technical assistance to Third World nations in support of long-term Canadian policy toward such nations.


Mr. Deputy Speaker:: 

Wednesday, February 17, 1982