1982-07-12

ROUTINE PROCEEDINGS


Mr. John Evans (Ottawa Centre):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas yesterday in Madrid, Spain, the Italian soccer team won the World Cup in a decisive 3-1 match, and whereas their tremendous team spirit in this event captured the enthusiasm of sports fans throughout the world, 1 move, seconded by the hon. member for Bourassa (Mr. Rossi):
That this House share with Canadians of Italian descent their pride in their country of ancestry on this momentous occasion.


Madam Speaker:: Perhaps the House would want to share in that by applauding.


Some hon. Members:: Hear, hear!


THE ECONOMY
Mr. Girve Fretz (Erie):: Madam Speaker, a constituent in my riding of Erie, who has invested in the lift truck sales and services business, has once again written to me concerning the rising prime interest rates. His letter reads in part, "The government apparently really does not want to help the small businessmen survive this terrible crisis in which they find themselves." His letter concludes, "So, why do we write? It is merely to let you know that we are still out here bleeding and hoping against hope that somebody will be able to do something."
In light of the desperation that lies behind these words of my constituent, words which are being repeated all over Canada, I move, seconded by the hon. member for St. Catharines (Mr. Reid):
That the government reverse its policy of "state intervention" and "government ownership", and introduce policies to restore investor confidence in the Canadian private sector.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AID
[Stage Direction]
5.0.	43
Mr. Gordon Towers (Red Deer):: Madam Speaker, 1 rise to protest CIDA's recent boner in providing $21 million of Canadian taxpayers' hard earned dollars for a useless silo project and other unwarranted expenditures in Haiti which, according to W5, was totally unnecessary. The sad irony of the matter is that it might never have been brought to light save for the diligent spade work by CTV's W5. Therefore I move, seconded by the hon. member for Pembina (Mr. Elzinga):
That all agencies of the federal government be required (a), to justify the need for individual projects; (b) report full disclosure of intended spending projects to Parliament, and that the government immediately embark on a review of all aid programs in order to weed out dubious ventures.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC SERVICE
[Stage Direction]
5.0.	43
Mr. Jim Fulton (Skeena):: Madam Speaker, I also rise under the provisions of Standing Order 43. In view of the fact that the government, supported by the Conservatives, intends to limit the wages of the public servants in Canada to 6 per cent next year and 5 per cent in 1984, and in view of the fact that 1,340 public servants travelled by air out of Ottawa every working day between May 3 and June 10 of this year, and that 58 public servants travelled by air out of Ottawa internationally every working day of that period, that being an entire planeload of international, five-mile high junketeers en route
19204

July 12, 1982
5.0.	43
to the Caribbean, Las Vegas, the Riviera and Katmandu, every single day, making a total of 36,180 in 27 days, I move, seconded by the hon. member for Hamilton Mountain (Mr. Deans):
That the Treasury Board immediately cancel all travel of public servants until such time as an evaluation of the cost effectiveness of that travel can be weighed against the cutting of wages in the public sector and tabled in the House.
1 am also providing, in French and in English, copies of the Bell publication, "Today's Way to Operate", to the President of the Treasury Board.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


VIA RAIL
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, in view of the government's decisions to terminate VIA Rail's Super Continental, to restrict group accommodation severely on the only remaining Rocky Mountain train, the Canadian, and to frustrate Japanese industrial workers by using childish delaying tactics against the Japanese auto industry, which have all contributed to a severe reduction in the number of Japanese tourists visiting western Canada this year, and will next year as well, I move, seconded by the hon. member for Bow River (Mr. Taylor):
That the federal government accept full responsibility for the damage caused to the tourist industry of western Canada which has lost millions in tourist revenue and hundreds of jobs this year because of misguided federal policies which openly discourage visitors from abroad while causing severe hardships to many resort centres such as Banff and Jasper, Alberta.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
[Stage Direction]
5.0.	43
Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, the June budget of the finance minister marked the third time that he and the government attempted to infuse some life into the economy of the country and instill some confidence in people over its financial and business acumen. It marked the third time such an attempt failed. Therefore I move, seconded by the hon. member for Prince Edward-Hastings (Mr. Ellis):
That the finance minister and the government follow the advice of the late W. C. Fields when he advised, "If at first you don't succeed, try again. And then if you don't succeed, quit!"


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
Mr. Norman Kelly (Scarborough Centre):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas the Ontario federal Liberals held their conference at Queen's University in Kingston this past weekend, and whereas the delegates showed their overwhelming support of our leader, the Right Hon. Prime Minister-


Some hon. Members:: Hear, hear!


Norman Kelly: -I move, seconded by the hon. member for Don Valley East (Mr. Smith):
That the Tory caucus members consider having the date and location of their own upcoming convention changed to Kingston in order that the cohesive and unifying atmosphere we demonstrated at Queen's may rub off on their delegates, and that they will abandon their critical attitude towards their leader, a leader whom we on this side of the House appreciate and support, and give him their unqualified support.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Madam Speaker, it is considered regular accounting procedure for businesses to file income tax on a quarterly basis. However, when people retire it is not necessarily known that National Revenue requires those with additional income to file tax on a quarterly rather than on an annual basis. When those senior citizens fail to do so, they are made to pay a penalty for late payment. I move, seconded by the hon. member for Okanagan-Similkameen (Mr. King):
July 12, 1982

That the government, when it issues the first OAS cheque to a newly retired person with additional income, give that person the choice of paying income tax annually or quarterly.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SEARCH AND RESCUE
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, I also rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43. The motion relates to the sinking of the Arctic Explorer and the subsequent loss of 13 lives. Whereas DOC has failed to implement and enforce regulations of the operation of on-board ship auto alarms, whereas there are continuing conflicts between the Department of National Defence, the Canadian Coastguard, and vessel traffic management, and whereas there is no in-service training program for refreshing and upgrading Coastguard radio operators and no effective operational plans for delivery of search and rescue services on either the east or the west coast, I move:
That this House regrets the attempt by the Government of Canada to scapegoat the Coastguard operators instead of developing and enforcing a complete and effective operational plan for the delivery of search and rescue services on the east coast of Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ECONOMY
Mr. Bill Domm (Peterborough):: Madam Speaker, I am not accustomed to supporting Liberal resolutions, but since 1 am about to do just that, this will probably be the first time I will ever have had a motion under Standing Order 43 accepted in this House. I would like to support one resolution presented this weekend by the federal Liberals of Ontario. I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That the government substantially reduce its budget deficit by exercising more restraint in expenditures.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Joe Reid (St. Catharines):: Madam Speaker, 170 years ago the Village of Sandwich in Upper Canada was the centre of North American attention. After months of indecision, it was on July 12, 1812, that General Hull ordered his American troops to cross that water boundary which separated our two young and growing nations. I therefore move, seconded by the hon. member for Erie (Mr. Fretz):
That, whereas the border separating Canada from the United States of America is the longest undefended border in the world; and whereas disputes, incidents and irritations have arisen between our two countries from time to time since the cessation of the 1812-1814 war, the governments and the peoples of our two nations are to be commended for their fine example to the world in the resolution of those differences by peaceful means, keeping the border open at all times for regular business.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Madam Speaker:: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Hon. John A. Fraser (Vancouver South):: Madam Speaker, I, too, rise under the provisions of Standing Order 43. In view of the fact that the public sector compensation restraint legislation, which is now being debated in the House, treats Canadian National Railways employees as public servants, yet excludes Canadian Pacific employees, and in view of the fact that, as a consequence of joint bargaining in the rail transportation industry, Canadian National employees will lose the benefit of the second-year increases in their contract while Canadian Pacific employees, with whom they bargain jointly, will receive the benefit of their contract, I move, seconded by the hon. member for Prince George-Peace River (Mr. Oberle):

July 12, 1982
Oral Questions
That this House direct the Minister of Transport to meet immediately with the President of the Treasury Board and advise that the president's statement that public employees are exempt from lay-offs does not apply to Canadian National employees and that Canadian National employees are not "a privileged community within the country" and that immediate steps be taken to amend Bill C-124 which in its present form will destroy joint bargaining on the railways.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question is directed to the Prime Minister. It is no surprise that last week business leaders supported the government's position on wage restraint in the public sector. It was also clear, as a result of those meetings and arising out of those meetings, that they in no way supported the other elements of the recent federal government budget. In fact they expressed shock at the size of the federal government deficit. They indicated that their greatest single disappointment was the fact that nothing had been done to change the National Energy Program in a fundamental way. What action is the Prime Minister planning to take to respond to these deeply held concerns of the business community leaders? In particular, what action is he proposing to take to reduce the size of the federal government deficit and to reduce the size of the increase in government spending which this year will have a second consecutive increase of 20 per cent?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I am somewhat puzzled at the report that the hon. member has been given of that meeting. It is true that some of the participants expressed surprise at the size of the deficit, but others pointed out to them that they should not have been surprised if they had looked at the slowdown in the economy and had done their calculations. Some of the participants, and indeed some of the premiers the week before, indicated that they had anticipated a deficit of that size basing it on their own deficits which had almost doubled from one year to the next.
If my memory is correct, just a few weeks before the budget the hon. member was predicting a deficit of something between $16 billion and $20 billion. Therefore, why would he now think they were surprised unless they had been very much misinformed?


INQUIRY RESPECTING GOVERNMENT ACTION
Michael Holcombe Wilson: Madam Speaker, the Prime Minister has again totally ignored the question that I asked him. I asked him what he was proposing to do to reduce the size of the federal government deficit which is keeping upward pressure on interest rates, and in the words of the Minister of Finance, high deficits and high increases in government spending, running at 20 per cent per annum two years running, will increase inflation and increase the level of interest rates. What is he going to do to meet those concerns?


Pierre Elliott Trudeau: Madam Speaker, the hon. member is arguing economic policy. The answer to his question was given by the Minister of Finance, that this deficit is one which is essentially due to the automatic stabilizers. It is due to the fact that the economy has slowed down, as everyone knows. Therefore, the revenues of the government on one hand have been reduced, and its expenditures have been increased in order once again to pay for the automatic stabilizers. Therefore, as the Minister of Finance has indicated, and I have not heard the hon. member gainsay it yet, when the economy recovers, this deficit will be automatically reduced.
It is not a deficit which is planned, such as in other countries which are cutting their taxes and increasing their expenses. It is a deficit which came in spite of the fact that we did not increase our expenditures in any substantive way.


REPORT OF PROJECTED INCREASE IN DEFICIT
Michael Holcombe Wilson: Madam Speaker, the Prime Minister is dealing in probably the worst flim-flam we have heard in the House in months. The government is increasing its spending by 20 per cent. That was the shock to business people. They thought there would be a program of restraint in the face of the size of the government deficit, which is bound to increase interest rates. They were also surprised that again the government increased taxes-in the second budget in the row-at a time of deep recession in the country, which is bound to deepen that recession further and therefore increase the size of the budget deficit.
What is the government going to do about the size of the budget deficit? Last week Maclean's magazine reported the projection of Department of Finance officials that the budget deficit would be $22 billion next year. What is the government going to do to reduce that deficit?


Pierre Elliott Trudeau: Madam Speaker, the hon. member would like me to repeat my previous answer. I answered him about our approach to the deficit. He talks about increased government expenditures. I point out to him that it is true that in the last budget expenditures of some $2.3 billion were forecast for this year and next year in order to create direct jobs and in order to increase assistance to housing, small businesses, fishermen, farmers and others. It is true that such expenditures were announced in the budget.
July 12, 1982

However, if the hon. member looks at the other side of the budget, he will see that that money is not increasing the deficit. As the hon. member himself says, there is a redistributive effect, and that money is the result.


Mr. Clark:: Cutting old age pensions.


Pierre Elliott Trudeau: The Leader of the Opposition wants to get into this. I hope, Madam Speaker, you will recognize him before three o'clock, because we generally do not see him before three o'clock.
The reasoning behind the budget is not a Conservative reasoning. That is why hon. members opposite do not understand it. What we are doing is saying to those who have jobs, security and incomes, that they should share with those who do not have jobs, security and incomes. That is the philosophy behind the budget, and Canadians are open to that kind of thinking, even though it is foreign to the Tory Party.


Some hon. Members:: Hear, hear!


DEFINITION OF NATIONAL EMERGENCY
Mr. G. M. Gurbin (Bruce-Grey):: Madam Speaker, my question is also directed to the Prime Minister. The question really is what proportion of the economy of the country the government is taking, and it is clear the government is taking an increasing share at the expense of all Canadians, pensioners included.
The Prime Minister has indicated he would like Canadians voluntarily to follow the wage control program he has imposed on employees within the federal jurisdiction. In answer to a question during a news conference following the first ministers' meeting several weeks ago, he indicated he did not have the power to impose general controls except in the event that, and 1 quote:
-we would have to use our emergency powers and in order to have those emergency powers stick in front of the courts there has to be a recognized emergency.
Would the Prime Minister classify a failure by his government to achieve the co-operation of the provinces and the business and labour sectors as a failure which constitutes a national emergency?


Pierre Elliott Trudeau: Madam Speaker, the hon. member prefaced his question by indicating that the federal government was increasing its share of the gross national product by its spending. I point out to him that the share spent by the government directly on goods and services has fallen slightly over the past ten years. What has increased enormously is transfers to the provinces and, of course, service of the public debt. Perhaps the hon. member would like to refer to those statistics before misleading himself into believing that the federal government is suddenly occupying a larger part of the economic spectrum. It is not.
As to the question about recognizing an emergency, the hon. member knows the Constitution. He knows the judgment of the Supreme Court on the price and wage control program adopted in 1975. He will recall that that decision was that it is only in a national emergency that the federal government is
Oral Questions
constitutionally able to impose over-all wage and price controls. The definition of that emergency, according to some judges, depended very much on the attitude of the provinces. If the provinces themselves are not in any sense urging the federal government to use those powers, what I indicated at the press conference and in this House in response to the Leader of the New Democratic Party, is that it would probably be quite difficult to make it stick in the courts.


POSITION OF PRIME MINISTER
Gary Michael Gurbin: Madam Speaker, my supplementary question is also for the Prime Minister. In 1974 when the Prime Minister felt there was a national emergency, interest rates were about 11 per cent, the inflation rate was about 11 per cent, the national deficit was about $1.6 billion, and 514,000 people were unemployed. Today interest rates and the prime rate are around 18 per cent, the inflation rate is around 11 per cent, the national debt is $20 billion, and 1,300,000 people are unemployed. And there is a liquidity crisis today in business. During all but nine months of the last eight years the Prime Minister has been the leader of this country. Would he tell the House what his bottom line is for economic indicators before he considers that there is an emergency? What are his options, except for the complete control of the Canadian economy?


Pierre Elliott Trudeau: Madam Speaker, after arguing that there is a kind of emergency that would justify complete controls, the hon. member then asks what my options are except complete controls. I think he is like certain chickens that lay beautiful eggs, but then turn around and eat them. He should review his question.
I am not sure if he is arguing for controls or if he is arguing that there is a kind of emergency now which gives us constitutional power to impose controls. If it is the latter, then I would refer him to my previous answer and to the fact that in 1975 when this Parliament adopted over-all price and wage controls there had been two meetings of the premiers in August, 1974, and August, 1975, when they had urged the federal government to take its responsibility to bring inflation down. They have not done that in the recent meetings or in recent public statements. Perhaps they will at their August meeting; I do not know. They have not taken that point of view to date. That is the difference between 1975 and 1982.


HOUSING
Hon. Edward Broadbent (Oshawa):: Madam Speaker, I have a question for the Prime Minister which concerns a new confusion in government policy which affects both would-be home owners and the building industry. In his budget speech

July 12, 1982
Oral Questions
the Minister of Finance announced the appointment of a blue ribbon committee which would examine the feasibility of a mortgage reduction scheme which, to use his words, if implemented would bring down mortgages by 3 to 6 per cent. On the weekend the minister responsible for housing took an entirely different approach. He said categorically that there would be such a scheme. In fact he urged Canadians to buy new homes now.
Will the Prime Minister clear up this confusion? Is the government certain that it will proceed with the 3 to 6 per cent mortgage reduction scheme, or is it still up in the air?


Pierre Elliott Trudeau: Madam Speaker, I have not read the speech of the hon. minister responsible for housing but, knowing him as I do, I suspect the confusion is probably in the questioner rather than in the minister. The Leader of the New Democratic Party knows that the new credit instrument the minister talked about is only to be reported on some time in late September. Consideration of implementing it would follow that. That is known to every minister and every member of the House, and certainly to the minister responsible for housing. The Minister of Finance brought in bridging financing which would make it profitable for people to buy a house now rather than wait for the report of the blue ribbon committee.
The Right Hon. Leader of the Opposition shakes his head negatively, Madam Speaker. He is misinformed. The Minister of Finance announced a $3,000 grant for first-time home buyers or buyers of new homes. That is available now. The other measure, if implemented, would presumably take place much later this year.


John Edward Broadbent: Madam Speaker, I say to the Prime Minister that it is he who is confused in his facts, not I.


REQUEST FOR GUARANTEE TO HOME PURCHASERS
John Edward Broadbent: Madam Speaker, this is important in light of what the minister responsible for housing said on television last night to the people of the country, when he urged them to go out and buy a home now. He was talking about the mortgage reduction scheme, not the $3,000 grant in this instance.
A difference of between 3 per cent to 6 per cent in the price of a home, as the Prime Minister should know, could mean hundreds of dollars per month in terms of payments. Therefore I should like the Prime Minister to speak in terms of government policy now. Is the government committed in principle to the scheme which will reduce mortgages by 3 per cent to 6 per cent, in line with what the minister told people in the country to do yesterday-to go out and buy on that assumption? If so, is he, as Prime Minister, prepared to guarantee to home purchasers that their mortgages will come down by 3 per cent to 6 per cent?


Pierre Elliott Trudeau: Madam Speaker, the hon. member calculated quickly that 3 per cent to 6 per cent would mean hundreds of dollars per month. Well, if he calculates quickly he will find that a couple of hundred dollars per month is something like $3,000.


Some hon. Members:: Oh, come on!


Mr. McDermid:: You have never had a mortgage, I can tell you that.


Pierre Elliott Trudeau: They have not found that over there. The $3,000, it is stated quite clearly in the budget, is something which goes into effect here and now.


Mr. McGrath:: It is a one-time payment.


Pierre Elliott Trudeau: Yes, it is a one-time payment, because the expectation is that the other measure will be recommended and implemented. But until it is, the House can give no guarantee.
The minister deliberately set up a consultative mechanism partially in response to the criticism after the November budget that he had not consulted enough. In this particular case he set up this mechanism to ensure that he would have the support of the financial community and of other interested parties. But, in the meantime, he gave this offer of a one-time $3,000 grant. The two are distinct, but both are meant to help home owners.


MINISTER'S STATEMENT ON PROPOSED SCHEME
John Edward Broadbent: Madam Speaker, I ask the Prime Minister to listen with care to the question. There are two different schemes. The Prime Minister is talking about one. I am talking about the one the minister discussed on television last night and discussed in an interview with The Toronto Star, namely, the mortgage reduction scheme. In Saturday's Toronto Star the minister is quoted as saying, "There is no question of chance. The plan will be implemented. The government is committed to it". That scheme is the mortgage reduction scheme. Will the Prime Minister, and therefore the government, not simply the minister, guarantee to Canadians who purchase homes now that they will benefit from the 3 per cent to 6 per cent reduction mortgage scheme which the minister promised?


Pierre Elliott Trudeau: Madam Speaker, the hon. member is again referring to a speech which I have not read or heard. Therefore, what 1 answered in response to the first question is subject to me verifying it. But the hon. member knows that I could not give the guarantee which he is seeking. I do not think the minister himself would have given it.


Mr. Epp:: He did on television last night.


Pierre Elliott Trudeau: Certainly it is the hope and the policy of government that it will be found acceptable and that it will be
July 12, 1982

implemented. If this is what the minister was saying, certainly he was stating government policy. But if it was a guarantee that such and such a project will be adopted by this blue ribbon committee and then voted by the House, the hon. member is presuming on both the decision of the committee and on the decision of the House, which I know he would not do.


John Edward Broadbent: That is what Cosgrove did.


VIA RAIL
Mr. Pat Nowlan (Annapolis Valley-Hants):: Madam Speaker, my question is directed to the Minister of Transport. Undoubtedly he has now had time to have perused the very comprehensive and constructive Senate report on the unilateral action of the minister last year to cut VIA Rail by 20 per cent. Since we are in the summer period again, would the minister give an unequivocal assurance and commitment to the House, following along recommendation No. 2 of the Senate report, that there will be no further cutbacks to VIA Rail operations or rail line abandonments unless and until the public forum route is followed?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, strangely enough the negative aspects of the Senate report have been emphasized, but I would say that I agree with 75 per cent of what the Senate report indicates. When it talks about fixed costs, for example, I would agree. When it talks about the need for legislation, I agree. It is really on the assessment of the capacity of the government to increase the subsidies going to VIA that the agreement between the Senate and myself breaks down. I simply do not think that it is possible for the government to go on adding to those subsidies until they reach $1 billion or more. That is why the government took the action that it took last year. I am also a bit surprised that the Senate report seems to imply that I was acting illegally when I took that action, as it was taken under Section 64 of the National Transportation Act. With respect to future cuts, I can say very simply that this is not the intention of the government at this time.


PRESENTATION OF DISCUSSION PAPER
John Patrick (Pat) Nowlan: Madam Speaker, coming to the last part of the answer in terms of future cuts at this time, we are talking possibly of another summer, or autumn, adjournment, whenever the House adjourns. Can the minister not give an assurance that there will be no cuts until the public forum route is followed?
I will not get into a debate on the substance of subsidies. Obviously if subsidies have to be paid out and the traffic is not there, one has to be responsible and to take action after a public discussion. That was part of the central theme of the
Oral Questions
Senate report, it being critical of the minister being able to discontinue unilaterally the passenger train service of the country. Perhaps that is the minister's wish; 1 do not know.
If the minister cannot give an assurance about any future cuts regardless of public discussion, when will the minister bring in the VIA Rail act and/or the discussion paper which he said would precede the VIA Rail act? Could we at least have that on the Table of the House before we get out of here?


Jean-Luc Pepin: Madam Speaker, I already said to the Standing Committee on Transport that 1 would be submitting a VIA paper. I was hoping to do so during the summer, but I can assure the hon. member that it will be there awaiting him to study it in committee in the fall. That is on the first point.
On the second point, I can only repeat that the National Transportation Act under Section 64 gives the government the right to do what it did. There are circumstances when it can be justified. I explained myself 100 times on that subject last summer. I cannot say that Section 64 of the National Transportation Act will never be used. I can only say, as I did a moment ago, that this is not the intention of government at this time.


QUERY RESPECTING THE HOLDING OF PUBLIC HEARINGS
William Henry (Bill) Domm: Madam Speaker, my question is directed to the same minister. It flows out of the conversations, press releases and press stories over the past two or three days. Is the minister leading the House to believe that he has no intention of going to the public hearing process before termination of VIA Rail services in the future, or is the minister agreeing with the all-party Senate report that there should be public hearings before the implementation of future rail cuts?


Jean-Luc Pepin: Madam Speaker, I have already indicated my intention, the intention of the government, but under the law it is possible for government to take either one of those two avenues. One is to proceed through hearings through the Canadian Transport Commission; the other one under Section 64 is to proceed by order in council. This is the law. The law has a purpose. The purpose is that when something concerns more than a single line it is proper for the government to use Section 64. I will repeat that it is not the intention of government at this time to go the massive way, the way we did under Section 64 last July.


HAVELOCK-PETERBOROUGH-TORONTO SERVICE
William Henry (Bill) Domm: Madam Speaker, since it is the minister's intention not to go the route of unilateral action, and where possible to review it before committee and have hearings, would he at least give some credibility to that statement by agreeing not to terminate the VIA Rail service slated for September 6 from Havelock to Peterborough to Toronto, until he has at least fairly assessed the situation

July 12, 1982
Oral Questions
before proper hearings and has allowed those hearings to take place, in support of the Senate committee decision and recommendation that that process be followed, or will the minister continue on with unilateral action on September 6?


Jean-Luc Pepin: Madam Speaker, I do not intend to give such an assurance. In the statement issued last July we said specifically that the three routes in the Toronto area were essentially commuter routes. The Government of Ontario has taken over responsibility for the Barrie and Stouffville routes. The Havelock route, which goes through Peterborough, has been the subject of a mixed approach. Some of it will become part of the metropolitan commuter service, the other part will disappear because there is not enough traffic of an inter-city nature to justify its existence. But the Government of Ontario, I am quite sure, will very responsibly make sure that travellers in the area are served by other modes of transportation, for example, buses.


LAW REFORM COMMISSION OF CANADA
Mr. Alexandre Cyr (Gaspe):: Madam Speaker, my question is directed to the Minister of Justice. In March 1976, the Law Reform Commission of Canada submitted a report on the Lord's Day Act, in which it concluded that the federal government should repeal this legislation and transfer responsibility for legislating on the observance of the Lord's Day and other holidays to the provinces. I would like to ask the Minister of Justice whether, after the summer recess, he intends to table a bill to repeal the Lord's Day Act and transfer the right to legislate in this area to the provinces and the territories?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, we received a recommendation from the Law Reform Commission a few years ago, and we are discussing the matter with the provinces, because we cannot repeal the legislation until the provinces have formally decided to pass their own legislation. Our discussions with the provinces are continuing, and if they wish to take over this jurisdiction, we are willing to withdraw from this area.


HOUSING
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, my question is for the Prime Minister who indicated last week that
the government was sending instructions to federal agencies to hold the line within the general framework of 6 per cent and 5 per cent on any increases they approve. Did the Prime Minister include Canada Mortgage and Housing in the list of agencies which received those instructions, and does he condone CMHC, over the last two weeks, increasing the prices of homes it has available for sale in many parts of Canada by $2,000, $3,000, and sometimes more than $4,000 per unit, in spite of the fact we are trying to put downward pressure on the inflationary spiral?


Pierre Elliott Trudeau: Madam Speaker, there are two questions, the first on the government's directive. 1 did indeed write to all ministers and instruct them to the effect that regulatory bodies under their jurisdiction should be urged to stay at the 6 per cent and 5 per cent limits, with the exceptions which were indicated by the minister in the House.
In the particular case of Canada Mortgage and Housing, I would have to take the question as notice in order to deal with it. However, this is obviously a case where we are dealing with the cost of money to CMHC, which is just as high for that corporation as for anyone else. If it is attempting to-the hon. member looks puzzled. CMHC has to obtain its money from the government or the private sector, and that will bear on the price at which it can resell houses in its possession. The hon. member may be rightly puzzled; I would have to take notice of his question and see if I misunderstood it, and obtain an answer for it.


INCREASE IN SELLING PRICES
Ian Deans: Madam Speaker, while the Prime Minister is looking into the matter he might consider whether it does not seem rather ridiculous to raise the price on a home, which could not be sold at the lower price, in an effort to move it in the marketplace? Does he feel it is reasonable to increase the price, first, by approximately the amount of the government grant for the purchase of homes, new or old; second, to do this on homes which have been on the market for six or eight months in some cases, at a time when we are trying to put downward pressure on inflation, not upward pressure as CMHC is doing?


Pierre Elliott Trudeau: The hon. member asks me if it seems reasonable. The way he puts the question, Madam Speaker, it does not seem reasonable to hope-


Ian Deans: That is what I thought.


Pierre Elliott Trudeau: -that a house which will not be bought at a certain price will suddenly be bought at a higher price. But this is a theoretical question as far as I am concerned.


Ian Deans: No, it is real.


Pierre Elliott Trudeau: Well, if the hon. member assures me it is real, I will look into the matter. It is perhaps something we should
July 12, 1982

review. But the hon. member will understand that unless 1 get notice of the questions, 1 cannot possibly know everything which is done by everyone, everywhere, all the time, on everything.


John Edward Broadbent: Some of the time!


NATIONAL DEFENCE
Hon. Allan B. McKinnon (Victoria):: Madam Speaker, my question is directed to the Minister of National Defence. The budget papers contain a reference to expenditure savings resulting in part from "defence spending reprofiling". Would the minister tell the House what exactly is meant by that phrase, and particularly the curious word "reprofiling"?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, the definition of "reprofiling" is, I suggest, using your judgment to see how you can save $100 million each year on the defence budget.
I know the second question of the hon. member is probably going to be how are we going to save $100 million on the defence budget, and I will answer it right away. I think this will be done through savings between the projected increase in remuneration paid to the forces, and the actual amount paid. I would like to mention too that the pay increase given last April to the forces remains in effect until next April. However, the projection was around 13 per cent, and we gave about 11 per cent, which means a saving of about $20 million for each percentage point.
Next year we have projected something like 10 per cent or 11 per cent, and according to the policy of the government, which we intend to abide by, we will give 6 per cent. We will save 5 per cent or 6 per cent, and this saving does not affect procurements or result in the cutting of personnel. It does not affect anything in the defence budget itself; it is strictly a saving.


OBSERVANCE OF RESPONSIBILITY TO NATO
Allan Bruce McKinnon: Madam Speaker, the minister knows full well that the budget referred to military pay savings and defence spending reprofiling, and he has spoken only about the pay savings. He also knows full well that there will be no cuts in pay for the forces this year, yet the budget papers call for a $100 million reduction in the defence budget. Has the minister pointed out to our NATO allies that we are not going to be able even to come close to the 3 per cent increase in defence spending that we promised them and, for the fourth time in five years, Canada will not be living up to its promises?
Oral Questions


J. Gilles Lamontagne: Madam Speaker, 1 do not think the allegation of the hon. member for Victoria is exact. I think the 3 per cent has always been taken by all our NATO allies as an objective, on the condition that economic conditions prevail so that we can reach it. You have a good example in West Germany which is probably going to have a negative increase in defence spending this year because it cannot afford it. However, 1 can assure the hon. member that for the last seven years, as I have mentioned before, we have averaged about a 2.7 per cent or 2.8 per cent increase in the defence budget, which I think is a good performance on the part of this government.


CANADIAN WHEAT BOARD
Thomas Gordon Towers: Madam Speaker, my question is for the minister responsible for the Canadian Wheat Board. It has been reported for some time that there has been a multimillion dollar wheat deal consummated with Russia, but it would appear that the government is keeping the wraps on this deal. Has the deal been consummated, and is the government keeping the wraps on it?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, there is nothing particularly secret about this deal. We gave advance notice of it to the United States and, although it is for a short-term credit, it is at market rates. In fact, according to its terms, it is considered by the OECD international rules to be a cash transaction. It is entirely a benefit to Canada. There is nothing shady, suspicious, or reprehensible about it.


Thomas Gordon Towers: I am somewhat mystified about the new spokesman for the Canadian Wheat Board.


EXTENSION OF CREDIT TERMS
Thomas Gordon Towers: Madam Speaker, would the minister be in a position to tell us whether or not there are credit terms being given to Russia, whether or not this is the first time this has ever happened, and what those terms are?


Mark R. MacGuigan: Madam Speaker, I believe this is the first time that any form of credit has been given to the Soviet Union. As I pointed out, it is on terms which are considered by international rules to be equivalent to cash. It is on the same kind of terms as are given by the Australian Wheat Board and also by private dealers in the United States itself.


Mr. Nielsen:: What are they?

July 12, 1982
Oral Questions


INDUSTRIAL AND LABOUR ADJUSTMENT PROGRAM
Charles Joseph Clark: Madam Speaker, would the Minister of Industry, Trade and Commerce tell us why the ILAP program has approved $17 million of loans for his own city and less than $1 million in loans for the whole province of Quebec?


Hon. Herb Gray (Minister of Industry, Trade and Commerce and Minister of Regional Industrial Expansion):: Madam Speaker, the program responds to demands from business people. The decisions are made by a panel of the Enterprise Development Board which is composed of a majority of private sector businessmen. I am sure they would be happy to respond to demands from firms in any of the designated communities, and there are a number in various provinces, including Nova Scotia and New Brunswick, as the applications come forward.


EMPLOYMENT OF OFFICIALS
Charles Joseph Clark: Will the minister explain to the House of Commons why, since solicitation of inquiries is a fundamental part of the success of this program, there are two full-time officials soliciting projects in his own city and only two part-time employees of his department soliciting proposals in all of the province of Quebec which is the province where the phenomenon of job loss has been most acute?


Herbert Eser (Herb) Gray: Madam Speaker, there are three communities designated in Quebec. The officials that he has mentioned-I think that one of them is full-time-are working not on soliciting proposals but on facilitating the analysis and presentation of the cases to the board. The two officials based in Windsor also deal with proposals from Chatham and a number of communities in the general Windsor area. So the balance, I think, is about the same.


REPORTED STATEMENT BY OFFICIAL
Charles Joseph Clark: Madam Speaker, the minister would have read the report in La Presse which cites a public servant in his department as saying-
[ Translation]
-that businesses in Ontario are being treated differently under the program.

The public servant went on to say that there is an old boy's network that works in Ontario to get grants for Ontario but does not work in Quebec to create jobs in Quebec. Will the minister tell us why that is the case?


Herbert Eser (Herb) Gray: Madam Speaker, the suggestion in the La Presse report has a number of inaccuracies. What my hon. friend has mentioned is not attributed to anybody identified.

And I can assure my hon. colleague and the members of this House that the program is as active in the province of Quebec as it is in other provinces where communities have been designated. If he cares to check up on this, he will realize that most of the programs of the Department of Industry, Trade and Commerce are very well represented in the province of Quebec, in relation to its population. All I can say is that the article in La Presse is full of inaccuracies, and I am rather surprised the hon. member should have based his question on this inaccurate source.


Charles Joseph Clark: One of the statements in that article was to quote the Liberal Member of Parliament for Shefford as saying that the government should stop blaming public servants and should put the blame on ministers where blame belongs for the failure to deal adequately with unemployment in that province.


FUNDING OF HOTEL CONSTRUCTION
Charles Joseph Clark: Madam Speaker, since we have now changed the provisions of the ILAP program to allow the federal government to fund hotel construction in the minister's home city, will the minister indicate to us whether the government is now prepared to fund hotel construction in other cities, and when will he be laying before the House of Commons a change in the terms of reference of the ILAP program?


An hon. Member:: Gray is in!


Herbert Eser (Herb) Gray: Madam Speaker, my hon. friend, the Leader of the Opposition, is dealing with matters that were actually discussed in question period here some months ago. It must indicate that he is very pleased and satisfied with the budget policy of the government since, instead of basing his questions on matters of that sort, he is dealing with a matter that was fully discussed and explained in the House some time ago.
The provisions of the ILAP program have not been changed. The rules as announced at the time the program was announced said that, while the focus was on manufacturing and processing, commercial projects could be considered and decided on by the special panel of the Enterprise Development Board if the minister indicated they were of a commercial nature of such importance that they could be considered. This has always been the case. There have been projects other than in Windsor that have been the subject of the same exercise of
July 12, 1982

discretion. In any event, the final decisions are made by the panel, not by the minister.
If there are hotel projects elsewhere that meet the same criteria as the one in Windsor I would be happy to exercise my discretion to make sure they are considered by the Enterprise Development Board. Once again, I hope the House will recognize that my right hon. friend is completely satisfied with our budget and our economic policy because he chose not even to raise a question about that over-all economic subject.


LABOUR CONDITIONS
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, I understand that, in the absence of the Minister of Employment and Immigration, I am to direct my question to the Minister of Labour. There are 19,000 forestry workers in British Columbia out of work. That is 37 per cent of the work force. After numerous delays, the bridging program which is to provide emergency tree planting and the like, finally came about with federal and provincial agreement. Of the 19,000 who are out of work, only 117 have been employed through the bridging program. Is the government satisfied with this progress and, if not, what will the government do about it?


Hon.   Chas. L. Caccia@Minister of Labour: Madam Speaker, as the hon. member should know, the Minister of Employment and Immigration is never satisfied with the progress that he can make.


Erik Nielsen: Neither is anyone else.


Mr. Caccia:: He has repeatedly asked the members of the NDP to co-operate with him in improving the programs he is making available, particularly in the forest industry in British Columbia. We are very grateful that the hon. member has raised this matter today. I will certainly bring it to the attention of the minister so that he can personally reply to the hon. member.


Mark Willson Rose: I am interested to know that the minister of unemployment is never satisfied with his progress. I think he joins a cast of thousands in that.


Erik Nielsen: Millions.


Mark Willson Rose: Perhaps even millions.


REQUEST FOR ADDITIONAL ASSISTANCE FOR UNEMPLOYED WORKERS
Mark Willson Rose: Madam Speaker, since my riding has 22 per cent of its work force down, and the city of Port Alberni has only 500 people working out of a work force out of 6,000, what will the minister do? When will he announce further emergency programs or announce extended benefits for UIC so that thousands of British Columbia forest
Oral Questions
workers will not be forced into the indignity-when they would prefer, need, and want to work-of accepting welfare?


Hon.   Chas. L. Caccia@Minister of Labour: Madam Speaker, the hon. member's question implies that emergency programs have already been announced. The hon. member is asking for further programs. I would urge him first to take advantage of the existing programs that the Minister of Employment and Immigration has already made available.


MINES AND MINING
Thomas Edward Siddon: Madam Speaker, my question is to the Minister of State for Mines. The minister will know that in the last two weeks we have seen shut-downs in most major mining communities across Canada, affecting over 40,000 workers. Last week she claimed that she was meeting with senior mining company officials. Is she prepared to tell the House today that those officials told her that those shutdowns which have taken effect in recent days will now likely be projected through the fall because of the first quarter losses of those mining companies and the major downturn in the economy since Easter, and that it will be, in fact, a very bleak Christmas for more than 40,000 mine workers in many mining communities from one end of Canada to the other?


Hon. Judy Erola (Minister of State (Mines)):: Madam Speaker, since the hon. member was obviously not present at the meeting he will not know that this is not what we talked about although we recognized the difficult situation of the mining industry in this country. We had a far more positive approach to the problems we face here and the possibility and probability of designing programs that would put men to work and, perhaps, allow the industry to respond more quickly to an upturn in the market when it does come. They were most helpful.


JOB-CREATION FUNDING
Thomas Edward Siddon: Madam Speaker, it is interesting that the minister is wearing blue today. Last week it was green, and then pale green. It looks like it will be a very blue, blue Christmas for the mineworkers of Canada because she has once again failed to present to this House one positive initiative. I am surprised that she did not raise Section 38.
I want to ask the minister why it is that there is no designated relief for mineworkers in the approximately $500 million worth of job creation funding announced two weeks ago by the Minister of Finance, and why it is, in fact, that there is only a pittance going toward general relief in those resource sectors, which will create, as we heard a few moments ago, a few

July 12, 1982
VIA Rail
hundred or a few thousand jobs here and there. There is nothing to alleviate the $600 million worth of income loss which will occur in the mining sector alone because minework-ers will not be employed between now and Christmas.


Judith A. Erola: Madam Speaker, the colour of my clothes is better than the egg all over the hon. member's face.


Some hon. Members:: Hear, hear!


Judith A. Erola: If the hon. member understood Section 38, he would be making for better use of it in the area of the country from which he comes. This section requires a great deal of cooperation from the industry, from the labour unions and from the communities. I urge all those hon. members who have mining communities within their jurisdiction to come forward to ask us about Section 38, and make it work in their communities.


Some hon. Members:: Hear, hear!


PETITIONS
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the table the reports of the Clerk of Petitions stating that he has examined the petitions presented by hon. members on Friday, July 9, 1982, and that he finds that they meet the requirements of the Standing Orders as to form.



VIA RAIL


Mr. Ron Stewart (Simcoe South):: Madam Speaker, the Minister of Transport (Mr. Pepin), the minister in charge of destroying rail commuter service to the City of Barrie, stated in answer to a question by my colleague, the hon. member for Peterborough (Mr. Domm), that the province of Ontario was terminating the Barrie to Toronto train. I know that the minister would not want to mislead the House. There is no longer any such thing as a provincial Barrie to Toronto train. It is a Toronto to Bradford train.


Madam Speaker:: That is obviously not a point of order. Statements by ministers or by hon. members may be corrected only by themselves, not by other hon. members.



POINT OF ORDER


Mr. Gordon Taylor (Bow River):: Madam Speaker, my point of order involves another example of the sloppy, sneaky, arrogant way in which the Liberal government governs our country. Today I received a notice advising that Bill C-201, an act to amend the Holidays Act, would be before the House during private members' hour on Friday last, July 9. The notice said that second reading would be resumed, but the notice has not yet been posted on the members' bulletin board. I found that this bill received second reading, went through Committee of the Whole and received third reading on Friday last, all in a matter of five minutes without a quorum in the House.


Mr. Cousineau:: You were not here! You would not know!


Gordon Edward Taylor: I take exception to that. This is an improper way in which to pass legislation. I question the propriety and the legality of a law passed by fewer than 12 members out of 282. It is a sneaky, arrogant way of governing the country.


Mr. Marcel Prud'homme (Saint-Denis):: Madam Speaker, on this point of order, I would just like to say that as for the debate lasting only five minutes, we can assume that this is because the members of this House realized it was high time we took action. When hon. members are really determined, they can show the Canadian people that this House is able to proceed expeditiously with the passage of a bill that has been under discussion for some time, especially since no objections were raised by the Progressive Conservative members who were in the House.


Madam Speaker:: As far as I know, all the proceedings which took place Friday afternoon were entirely in line with the procedure of the House of Commons, and unless the hon. member can show me that mistakes were actually made and that there was a breach of parliamentary procedure, I do not think the House will want to reconsider the action it took Friday afternoon.


Gordon Edward Taylor: Madam Speaker, I suggest that hon. members should be notified in ample time when these bills are to be debated so that they can prepare to be here. This is simply another attempt to take everything that is biblical, and everything that is Anglo-Saxon, out of the laws of this country.


Some hon. Members:: Oh, oh!
[ Translation]


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, on the last point of order, first of all, it is true, unfortunately, that I was not aware of what happened Friday, although I was very happy to hear the excellent news that our colleagues who were present in the House had the
July 12, 1982

very good judgment to realize that the time had come, that Canada was sufficiently mature to want to call the first of July Canada Day.
Regarding the comment by the hon. member that members did not receive advance notice of the bill presented by the hon. member for Vaudreuil (Mr. Herbert), I can say that this is absolutely false. The hon. member must know that the list of bills to be debated during private members' hour is distributed in advance, and that Thursday, the day before, notice had been given to the representatives of his party, the whip and the deputy leader in the House, and the same applies to the New Democratic Party as is customary. Again, personally, I did not know about this, since I delegate private members' business to my parliamentary secretary (Mr. Smith), but once again, I was very pleased the bill was passed. In fact, we had hoped the bill would be passed during one of our very late nights but, unfortunately, the members present at the time were not yet mature enough; now, a few days later, it seems a miracle has happened and we have results at last. Therefore, Madam Speaker, there was not trickery involved. Hon. members received proper notice, parliamentary procedure was strictly followed, as you yourself indicated, and I think we should all be happy that from now on, we can celebrate the first of July as Canada Day.


Mark Willson Rose: Madam Speaker, I would like to point out two things concerning the business that came before the House during private members' hour last Friday afternoon. I did not see any bars on the doors to keep hon. members out.


Some hon. Members:: Hear, hear!


Mark Willson Rose: I do not think anyone was prevented from coming in here. If anyone suggests that there was a linguistic or racist motivation behind this matter, I think a question of privilege should be raised on the other side. Such francophone names as "Rose", "Baker", "Knowles", "Herbert" and "Smith" were among the people who were present.


Some hon. Members:: Hear, hear!


Madam Speaker:: In reply to the hon. member for Bow River (Mr. Taylor), I must say that if he or anyone on that side did have objections of this nature, they should have been raised at the time the business was proceeding through the House. If proper notice had not been given concerning the business of the House, I am sure that some hon. member of the House would have thought of raising it. Furthermore, the hon. member said there was not a quorum. Having looked at the record of the proceedings, I do not know of anyone who called for a quorum. Therefore, the quorum did exist and unless anything to the contrary was recorded in Hansard, the House must accept the fact that there was a quorum when that particular bill was passed in the House. I am sorry, but there is no point of order.
Order Paper Questions



ROUTINE PROCEEDINGS


Joseph Lloyd Reid: Madam Speaker, this afternoon I have the pleasure of presenting a petition on behalf of 111 Niagara residents who are incensed with the November 12 budget and the proposal to tax employer-sponsored health, dental and vision care plans. They feel that this is an unfair tax at the expense of the ordinary working people of Canada and seek some rectification of this wrongdoing.


Claude Girvin (Girve) Fretz: Madam Speaker, it is my duty to present a petition signed by 25 members of the Pentecostal Tabernacle in Port Colborne. The purpose of this petition is to protest the government's proposed changes in Bill C-10, which will allow a court of law to interfere in the affairs of the church body. The nature of the petition is to urge the government to drop the provisions in Bill C-10 which would infringe on the rights and privileges of the church to take a moral stand on matters concerning membership of that church body.
The petitioners hope that in your examination of the petition you will find the petition in order, and that you will exercise the discretionary powers vested in the office of Speaker of the House to allow discussion and referral to committee at the earliest possible time in order that the sanctity of the church in Canadian society can be preserved.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 3,488, 4,172, 4,307, 4,335, and 4,385.


Mr. Reid (St. Catharines): 1.	Was a reception hosted by the Fitness and Amateur Sport Branch held at the Hyatt Regency Hotel in Montreal on November 17, 1981?
2.	Was the reception hosted by a group other than the branch and, if so, by whom was the invitation extended?
3.	Was the promotion of the reception handled by a public relations firm and, if so, which firm or organization ?
4.	Who is the "Houston Group" and did the group have any relation to or connection with the 1981 Grey Cup festival and, if so, what was the relationship or connection?

July 12, 1982
Order Paper Questions
5.	Was this the first time the government held a pre-Grey Cup reception and, if not, on what dates and at what cost were the previous receptions held?
6.	(a) What was the purpose of holding a reception this year (b) what was the itemized cost (c) what categories and numbers of persons were invited?
7.	Was the pre-game show at the 1981 Grey Cup game paid for solely by the Canadian Unity Office and, if not, which other departments or agencies were involved and at what cost?
8.	Did the government put on pre-game shows in the past and, if so, during which years and at what cost?
9.	What was the total itemized cost to the government for the 1981 pre-game show?
10.	What was the cost of the half-time show presented at the 1981 Grey Cup game and did the Canadian Unity Office pay the entire cost and, if not, what was the total itemized cost and who shared it?
11.	For how many years did the government, or any agency thereof, sponsor such shows and at what cost?


Joseph Jacques Jean Chrétien: 1. Yes.
2.	The invitations were extended by Fitness and Amateur Sport; the Canadian Unity Information Office assisted the department.
3.	The reception was promoted by the 1981 Grey Cup Festival Committee as part of their festival activities. JRB Communications handled the organization of the reception for the Government of Canada.
Teleglobe Canada Sun Life Assurance The Royal Bank
Bell Canada
Hudson's Bay Gas & Oil Imasco Limited
Air Canada Texaco Canada Ltd. Canadian Imperial Bank of Commerce Bank of Montreal SNC Group Lavalin International Dominion Textile
8. 1977 Fitness and Amateur Sport
(including half-time show)	$ 76,862.00
1980 Canadian Government Office of Tourism
(including half-time show)	$118,104.49
9. 1981 pre-game show costs were as follows:
Choreography	$ 3,000
Supervisors	2,500
Equipment	6,000
Costumes and accessories	5,350
Singer National Anthem	500
Total (excluding 10 per cent administration and 15 per cent production costs)	$17,350
10. No, the Canadian Unity Information Office did not absorb all the costs of the half-time show; its financial assistance included:
4.	The "Houston Group" is a Montreal public relations firm and it had no relation to or connection with the 1981 Grey Cup Festival.
5.	This is the first year the Government of Canada hosted a reception as part of the Grey Cup Festival.
6.	(a) The purpose of the federal government's reception, as were those organized by provincial and municipal governments, was to promote awareness of Canadian amateur athletes and their teams and the role of fitness and amateur sport at an opportune time when a unique high visible Canadian sporting event was taking place; the 1981 Grey Cup.
(b) Food including tax and service	$5,500.00
Beverages including tax and service	2,407.05
Decorations	172.80
Staffing	871.00
Total	$8,950.85
(c) Four hundred people were invited; these consisted of:	
Choreography	$ 14,000
Supervisors	8,100
Costumes	21,600
Accessories	10,700
Participants	6,400
Organization	11,850
Total (excluding 10 per cent
administration and 15 per cent
production costs)	$72,650
Other related costs were shared by private sector donations and sponsorships, participating were:
General Motors of Canada	Canadian Automobile Association
Sherwin-Williams	Adidas
Suzy Shoes.
11. 1977 Fitness and Amateur Sport
(including half-time show)	$ 76,862.00
1979	Canadian Government Office of Tourism
(half-time show only)	$	7,500.00
1980	Canadian Government Office of Tourism
(including half-time show)	$118,104.49
(i)	Accredited reporters (300)
(ii)	Senior members of the Canadian Football League Executive
(iii)	Senior members of the Grey Cup Festival Committee
(iv)	Major sponsors of the CFL, the Festival Committee and of the pre-game and half-time shows
(v)	Senior members of the Canadian Football teams
(vi)	Politicians and select federal, provincial and municipal civil servants.
7.	The pre-game show was not entirely paid for the Canadian Unity Information Office; other related expenses for junior athletes from across Canada were shared by private sector sponsorship. Participating companies were:


Mr. Robinson (Burnaby): 1.	Since August 1, 1978, what was the number of requests from members of the RCMP to the Solicitor General for warrants under Section 16 of the Official Secrets Act?
2.	How many of the requests were rejected?
3.	How many of the rejected requests were then accepted upon reapplication and the provision of additional information?


Hon. Bob Kaplan (Solicitor General):: 1. The provisions of Section 16(5) of the Official Secrets Act require the Solicitor General of Canada to table annually a report to Parliament
July 12, 1982

which identifies the numbers of warrants issued pursuant to the provisions of Section 16(2), Official Secrets Act in the immediately preceding year. As previously reported to Parliament, the numbers of warrants issued pursuant to Section 16(2), Official Secrets Act for the following years were:
1978	- 372 warrants
1979	- 299 warrants
1980	- 340 warrants
1981	- 380warrants
2 and 3. It is not considered to be in the public interest to amplify information already contained in the parliamentary reports on Security Service operations involving the utilization of the provisions of Section 16 of the Official Secrets Act.


Mr. Robinson (Burnaby): Docs the Solicitor General (a) agree (b) disagree with the McDonald commission's criticism that the annual reports to Parliament required by Section 16(5) of the Official Secrets Act, regarding the use of warrants issued pursuant to Section 16 of the act, are inadequate because they provide only a bare minimum of information and, if so, for what reason?


Robert Phillip Kaplan: The matters referred to in this question will be given consideration in the context of the government's review of the relevant portions of the reports of the McDonald Commission of Inquiry.


Mr. Neil: 1.	How many issues of the publication "How The People of Saskatchewan Can Make More Use Of The Government of Canada" were published?
2.	What is the (a) circulation (b) cost of publishing of each issue?
3.	Is it the intention of the government to circulate similar publications in other provinces and, if so, what is the estimated cost?


Joseph Jacques Jean Chrétien: 1. 285,000 copies were published.
2.	(a) 250,000 copies were circulated, (b) approximately 50 cents per issue which includes all production costs.
3.	The Canadian Unity Information Office has produced this publication as a pilot project and is presently considering the feasibility of producing similar publications for other provinces. It is difficult to calculate the estimated cost as cost per copy declines according to the number circulated.


Mr. Domm: Was a contract in the amount of $109,000 given by the Department of Supply and Services to Canadian Canners and, if so (a) what was the purpose of the contract (b) is Canadian Canners a wholly-owned Canadian company?
Public Sector Compensation Restraint Act Hon. J.-J. Blais (Minister of Supply and Services): (a) A
contract in the amount of $109,913 was awarded to Canadian Canners Limited for testing a new low energy mechanical system for peeling tomatoes to determine its suitability for processing tomato varieties grown in Canada and to compare the energy requirements of this system with other peeling systems such as caustic and steam, (b) Canadian Canners is not a wholly-owned Canadian company.


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.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Friday, July 9, 1982, consideration of the motion of Mr. Johnston that Bill C-124, respecting compensation in the public sector of Canada, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Hon. Bryce Mackasey (Lincoln):: Madam Speaker, I am more than happy to participate in the debate.


Erik Nielsen: Filibuster!


Bryce Stuart Mackasey: The opposition House leader says filibuster. I suspect I had just fallen asleep for a few moments. I had intended to participate, but anticipated it would be much later in the day.
The other day I spoke on the budget noting, as I am sure most people have, that the budget was directed primarily to the problem of inflation. I suggested, and I repeat very briefly, that noted economists such as Thurow and others have always pointed out that in the case of inflationary trends there are winners and losers. These winners and losers achieve that status more often than not by misfortune rather than by good management. Winners are very obvious among Canadians fortunate enough to have savings in the banks and earning remarkably high interest. They are considered as winners. A company that can indiscriminately pass on its high interest rates as a cost of doing business to an element of captive consumers does not suffer abnormally from inflation. People whose salaries are totally indexed do not bear a fair burden of inflation. Nor do Canadians who for one reason or another

July 12, 1982
Public Sector Compensation Restraint Act
find their income to be relatively insulated from the effects of inflation.
The losers are much more evident. They include many business people who for one reason or another have to borrow at rates considered usurious two years ago in order to meet the payroll and provide a cash flow to stave off a recession in their plant for whatever reason. Also, the farm community must borrow money to buy seed. The fishermen must borrow either to repair or buy new nets. Then there is the home owner who innocently and in good faith bought a home one, two or three years ago and is now faced with the problem of mortgage renewal.
There are no winners and losers in unemployment. Everybody loses in periods of high unemployment. That is what is happening in this country. We now have close to a million and a half people out of work, people who for the most part would prefer to work. They cannot quite understand why in the space of 24 months a healthy, wealthy country finds itself with the type of economic problems we have before us.
As I mentioned last week, there are some areas in which nothing can be done by the Canadian government. We cannot control the price of commodities. We cannot restore the price of $1.20 per pound for copper rather than the present world price of 60 cents. We cannot do anything about the price of lumber, lead, zinc, gold or silver. Those prices will be increased and improved as the general economy of our trading partners improves. Our problem is that when their recovery begins, we must be in a competitive position to take advantage of their resurgence.
I do not think anyone considers an inflation rate of 12 per cent to be very competitive compared with that of the Americans, our largest trading partner. Therefore, it is imperative that all of us look at the problem of inflation to see what we can do both as a collective society and as individual Canadians.
Having suggested in the budget the other evening that there are winners and losers, we have tried to do something about the plight of the losers by deindexing our income, providing more money for the Minister of Finance (Mr. MacEachen) to allocate and distribute. He was able to indicate an increase in housing starts, giving financial help to that industry, which is one of our traditional ways to recover in this country. He was able to indicate some interest relief from high mortgage rates for people facing mortgage renewals as well as those who want to buy a home.
The minister was able to allocate funds to the business community, the farm community and the fishermen. He was able to do that because he asked other Canadians more fortunate, those who have an income that can be taxed, to share the burden with these less fortunate people. He asked us to do that by paying increased taxes and reducing to some extent our total protection against inflation through indexing in order to provide moneys to the government to help these people in such a way that we do not increase the deficit, which is of concern to some people.
Thurow and other economists quite often remind us that inflation has been an issue, a phenomenon if you like, which goes back thousands of years. In pure economic terms, the solution is fairly simple. Thurow pointed out four or five ways that inflation can be controlled. He quite properly points out that each and everyone of them requires a political decision. As one man's income is increased, another man's income must be reduced. The problem that all of us face is whose incomes are to be curtailed and whose are to be protected? How do we help the less fortunate? The budget has gone a long way toward doing that.
Thurow points out that not too many years ago Germany and Switzerland were able to curtail dramatically expansion money in those countries. This drove their unemployment levels very high, brought their inflation rates down and protected their currencies. They exported their unemployed back to their countries of origin, which were Portugal, Spain and others. He pointed out that the tight monetary policy in vogue now in industrial nations will in time produce the effect of reducing inflation, but he also pointed out that because of the time factor there will be damage, harm, stigmatization and unemployment. Those are the byproducts of this policy of absurdly tight money. When combined with the selfish attitude of the Americans with their high interest rates, which bear little or no relationship to their level of inflation, the problem is compounded for Canadians in all walks of life.
Thurow pointed out, quite logically, that voluntary controls are as effective and fair a way of controlling inflation as anything else devised. He also pointed out that this is not a perfect society and that everybody is in favour of restraint, provided they do not have to practise it.
In its budget this government has asked Canadians to restrain their demands and expectations voluntarily. Parliamentarians from all parties have answered that challenge, and that is reflected in the bill we are discussing, Bill C-124. Members of Parliament and members of the Senate have voluntarily agreed to reduce their pay increases to 6 per cent and 5 per cent over the next two years, recognizing that if this spirit of voluntary restraint can be extended across the nation to other public servants and other groups in society, this can go a long way to bringing inflation down.
No one has suggested, least of all the Minister of Finance or the President of the Treasury Board (Mr. Johnston), that the movement toward this voluntary restraint is something that is being accepted without question. However, it is encouraging to note that Thursday and Friday leaders of the business community and leaders of the labour movement gave some support- in fact, more than just a little support-to the concept. There is growing evidence on hot lines and radio programs and from the feedback we are getting that yes, Canadians are prepared to put a little water into their wine, as French-speaking Canadians are apt to put it, to restrain their demands and to accept less than full compensation for inflation in their pay increases, if they can be convinced that that money will be
July 12, 1982

used to help the less fortunate, to stimulate the economy, to get the housing market back on track and to recreate jobs rather than add to unemployment.
One point raised by some labour leaders-and with justification-is that they want some evidence that they will not be the only group making a sacrifice. They want some evidence that, if they curtail their demands, the business community will curtail prices. It is significant that as inflation drops 3 per cent or 4 per cent over the next year, there will be less and less rationale or reason for regulated industries and services to plead before regulatory bodies for increases in their rates to offset inflation.
The concept of sharing and voluntary restraint is something I think Canadians can live with. They are in fact a little intrigued with it and are prepared to adopt and support it. Nobody should attempt to tell the Canadian public that this is much more than rough justice, that there will not be some imperfections in the concept and that there will not be some people who will have to bear a different burden-unintentionally-from others. However, let us weigh the alternative. A million and a half Canadians are out of work, many for the first time. Many people have never known the need to restrain. Many have never lived in a period of recession or depression. What we are starting here could very well bring an end to growing unemployment and stimulate the economy. Slowly but surely it could create more jobs over the next six months and reduce unemployment.
I think people will respond. The challenge of the front benches is to make that message clear and with some passion and conviction. It is very, very hard to ask Canadians to join in a crusade against inflation if for some reason they think we are not fully behind it ourselves or if we do not think it can work. It can work.
In one of his later books, "Five Economic Challenges", Thurow drew the analogy between voluntary restraint and attending a football or baseball game. In the excitement of the game or a play people in the first ten rows inevitably stand, blocking the view of the people behind them. The people behind say, "If only they would restrain themselves, we could all see." In many ways this situation is the same. If we all restrain our demands over the next year or two, inflation will come down and we will all be in the same relative position. It will be painless but effective.
Are Canadians prepared to take this step? 1 think so. The alternatives are price and wage controls at some time-always difficult in a federal system-and more unemployment, until finally inflation drops with a thud and we start all over again the laborious, time-consuming and difficult job of restimulating the economy, reducing unemployment and putting people back to work.
I do not intend to get into the specifics of Bill C-124. I am not sure to what extent the President of the Treasury Board will want to amend certain provisions of the bill in committee. It seems to me that rather than deny collective bargaining in its entirety he might want to look at the arbitration route for
Public Sector Compensation Restraint Act
settling not only grievances but also other provisions in collective agreements dealing with safety, health and other conditions, which in many collective agreements are more important than money.
I suppose the one thing that motivated me to participate in this debate was that I have been somewhat appalled and concerned about some of the things I have been reading and hearing, both in the House and on radio and on television, which reflect total ignorance of the competence, sensitivity and humanity of our public servants. Perhaps I grew up in an era when no one challenged the fact that the Canadian public service was the best in the world. I still have that view because I have dealt with the Canadian public service for the last 20 years both as a minister and as a backbencher. Perhaps it is because I am a former minister of labour that I know the components of the public service. Public servants are not all Ph.Ds earning $75,000. They include the messenger and the cleaner-we used to cal! her the charlady-the jitney driver, the printer in the printing plant, the clerk and the stenographer. These are people we take for granted. They are fellow Canadians. They are decent people, but their earnings come closer to $10,000 than to $20,000 or $30,000.
It is unfortunate that somehow we think we have to stigmatize our public servants. I hear from people who should know better, in my own party and in the House, people who fail to understand that if you treat the public service as an equal, which it is, if you put your problems to them in a fair way, if you say that Canadians are not doing their jobs and remind them of it, you will find that they will respond in a very positive way.
When I first joined the Department of Labour, Mr. Speaker, it was a pretty rundown, demoralized department that was given to me. I found within weeks that the senior officials in that department could be stimulated, could respond if challenged and were prepared to participate in decision-making and in policy-making. I found to my surprise that 40 or 50 of them at least held a Ph. D. in economics, particularly in the research field. More than once I tried to probe as to why they had remained silent and why they were not participants. Sooner or later it came out that they tried in the past but found that nobody really cared, so why should they, they said.
We are bringing forward a bill to limit the salary increases of our employees, for very good reasons-because our employees are the people of Canada. There are employees, too, in the House, and the people of Canada, the taxpayers, pay them salaries as public servants, in increasing numbers. There are well over a million persons at the moment who have no income from jobs, so it is only logical and normal that those employees who have job security in the public service should restrain their demands and accept the provisions of Bill C-124.
I would hope that, in rationalizing the provisions of Bill C-124, the reasons for it, somehow we do not give the impression that we should reduce the salaries of public servants because generally they are overpaid and underworked and making a mess of it. Nothing is further from the truth. If you go into the

July 12, 1982
Public Sector Compensation Restraint Act
unemployment insurance office at the moment or into the Department of Manpower or into any of the places where people are dealt with, you will find tired, weary, polite, efficient people, whose workload increases as our population grows and as we demand more and more. I would be very upset if, somehow, at the end of all this exercise, we were left with the mistaken impression that somehow our public service is second to that of any other country in the world.
In conclusion, Mr. Speaker, I would plead with workers across the country to realize that voluntary restraint can be justified if for no other reason than that it works. Hundreds of thousands of unfortunate Canadians, fellow workers, want to get back to work sooner rather than later.
I mentioned this to a friend on the weekend who promptly referred to some labour leaders in a rather derogatory form. It is vital that the politicians should understand that there is a great similarity between Members of Parliament and union leaders. Union leaders must get elected too. They have to say some things sometimes in a rather harsh way. They have to generalize in their statements. They have to satisfy the majority of their members. They are elected by employed people, not by unemployed people. So when they appear selfish sometimes in their statements, they are speaking for their constituents, who are the employed, not the unemployed. That does not mean that they must not take into consideration the problems of the less fortunate. Probably many thousands of those who are out of work now would not have been so if this government had not been forced into a very tight monetary position. When people say there must be a better way, the better way is that we as Canadians agree to restrain our demands a little and bear some of the burden of the less fortunate.
Like everyone else, Mr. Speaker, I want to see some visible evidence of co-operation on the part of the business community. We want to see that this is not a one-way exercise but that they fully intend to restrain prices, that they fully intend to get behind the concept. Fortunately, their balance sheets or their profit and loss statements taken in the first three months indicate that the business community are very anxious and will have to be anxious about their falling profits and will cooperate with government and labour.
I would recommend, Mr. Speaker, that Bill C-124 be adopted as quickly as possible, so that it can go to committee stage. The minister may want to look at some of the clauses that appear to make the bill a little more difficult than it has to be. He may want to explore the possibility of referring certain matters during the life of a collective agreement to arbitration rather than freeze them entirely.


John Allen Fraser: Would the hon. member permit a question, Mr. Speaker?


Bryce Stuart Mackasey: Yes.


John Allen Fraser: I ask the question of the hon. member because his experience in labour matters is well known to all members of this House and he served in that capacity with some distinction in the past. I wonder whether the hon. member has
considered the effect of Bill C-124 on the joint bargaining tradition which has existed now for many years within the railway transportation business in Canada, in the industry. As the hon. member will know, Canadian National employees bargain jointly with Canadian Pacific employees. The result of that is that they have for all practical purposes the same contract.
Under this particular bill-and I will be very short, Mr. Speaker-on January 1, 1983, Canadian Pacific employees will take the benefit of the second year contract-


Mr. Deputy Speaker:: The hon. member will have an opportunity to participate in the debate. If he wants to put a question, he should put his question.


John Allen Fraser: Thank you, Mr. Speaker, I am in your hands. I appreciate that I have been overly long. The effect will be that Canadian National employees will be under the limits proposed by this bill. I am asking the hon. member if he is including that particular anomaly as one of the things that he thinks should be referred for special consideration.


Bryce Stuart Mackasey: I have no hesitation in answering that, Mr. Speaker. The member's facts are quite accurate. However, although the parties bargain jointly it would be wrong to think that the collective agreements are identical. In fact, it came as a surprise one year when I was negotiating a settlement in the railways to find that the CNR collective agreement was different in the west than in the east.
It was due to tradition, to particular problems, to problems of geography and the Fraser canyon, and many other things. As a general rule, as the hon. member said, the bargaining sessions are collective. In hard agreements such as of wages particularly, and things of that nature, they are always identical. In fact, the railways have always insisted that one group should be the same as the other rather than be different. This is a very valid issue to be raised at the appropriate moment with the minister in the hope that it can be resolved. The hon. member will appreciate, I am sure, as a former postmaster, that the same thing occurs in the post office. We try to have the same wages and the same basic conditions.
The whole point is that this bill cannot be expected to be introduced-and I said this earlier-at such short notice, as it had to be, and be totally equitable across the board. It cannot be. There will be winners and there will be losers. We have an obligation to minimize that negative impact or imbalance, but the situation which the hon. member has mentioned is certainly deserving of some deeper thought on the part of the minister.


Hon. David Crombie (Rosedale):: Mr. Speaker, I am pleased to be able to speak on Bill C-124 today. I agree with the hon. member for Lincoln (Mr. Mackasey) that it would be wise to get the bill into committee as soon as we can. There are some specific amendments which should be helpful to those affected and which indeed may be instructive to those who may be affected down the road.
July 12, 1982

At this stage, however, on second reading we are dealing with the principles behind the bill. I will not take the time of the House today to deal with some of the specifics that we will be dealing with in committee. I want to spend my time, Mr. Speaker, looking at what 1 think are the significant principles involved and some of the problems that arise from those principles.
I think the principles are three in number. Obviously, the first principle of the bill involves the question of restraint; second, the bill involves the principle of collective bargaining; third, the bill involves the principle of equity and fairness. I wish to deal with these three principles as expeditiously as I can. It might be helpful to spend more time on the principle of restraint than hon. members opposite have.
These days, restraint is in the air. Just the other day the President of the Treasury Board (Mr. Johnston) indicated that he thinks restraint is so important that he is calling for a national crusade for the government's restraint program. The new banner line of the government has become sharing and cooperation. We hear those words daily from ministers of the Crown. All of those things are considered to be important in what the government and many people in the country regard as the problem of what to do about restraint.
Restraint is not a word or a concept that we have spent much time considering in the past 35 years. There is one simple, sole reason for dwelling on the question of restraint in the past year or two and perhaps for the next few years. Obviously we are concerned about restraint because of inflation.
Inflation is the problem of the eighties in the same sense that the depression was the problem of the thirties. There are some people who, for whatever reason, paid little enough attention to it. Inflation is the one economic category that steals from everyone, that destroys our ability to protect our future; it is the one economic category that hurts poor people and middle-income people far more than it does rich people. It is absolutely essential, if Canadians are asked by the government to join some national crusade, that they understand what causes inflation and that they see whether the proper remedies for it are being proposed.
Inflation is not new, we have had it for centuries. It was caused by wars, by bad harvests, by the infusion of gold and silver into the marketplace, by waste and mismanagement of governments and enterprises. We have always had inflation and the classic pattern was always the same. In good times, economic boom times, production went up, employment went up and prices went up. In bad times, in times of economic recession, prices went down, production went down and employment went down. What was new in the latter part of the seventies and the early part of the eighties was that employment is down, production is down and prices are up. That is the essential dilemma. Economists have no clear answer for dealing with it.
Public Sector Compensation Restraint Act
In this part of the twentieth century we have arrived at a time when we can no longer make clear sense of our economic situation. Employment is down, production is down and prices are up, so we have met the essential economic dilemma of our time. Moreover, inflation of that order is worldwide. Indeed, inflation throughout the western world and in many other parts of the world has become chronic, endemic, escalating and uncontrollable.
If it has become all of those things, then why do we not understand it better? If it hurts us so much and it has become so difficult to deal with and to root out and cure, why do we not understand it better? I am no economist but I know that, if we look back over the past 35 years since World War II, we see some changes which have taken place which would lead us to see what steps could be taken to curb inflation.
There are a number of reasons for inflation, Mr. Speaker. The first, and I think the most important, is our attitude to growth after the war. We felt that we should always have growth and that everyone should enjoy growth. The idea of growth became important. Everyone wanted it and for the first time in our history government assumed responsibility for it.
In 1949 the Government of Canada took responsibility for the level of employment in this country. Up to that time it had been left to the normal changes of the business cycle.
Why did this change take place? It was in part because of the depression in the thirties and in part because of the war. People wanted good times, not bad times. They wanted never-ending growth. During the latter part of the depression, during World War II and the late forties, we felt that through the economic theories of Lord Keynes we could control the business cycle and get rid of the chronic economic problem of boom and bust. As well, we were interested in never-ending growth because of the cold war. There was competition between economic systems. The result was that our attitude toward growth and our demand that the government deliver it was such that as the size and importance of government increased, its share of public spending and of the gross national product escalated.
By the mid-fifties we had established the essential link that the government was responsible for growth. At the same time we began to see the emergence of inflation as a chronic problem. That is the first reason for inflation, the attitude toward growth and the demand that the government deliver it at all times to all people.
The second reason is less clear but is perhaps more important in the long run. In the last 35 years we saw a new climate of expectation created. We established the idea of more, that everyone should have more. Everyone's family, friends and neighbours should have more. The idea of more began to be the significant attitude, the predominant attitude of most people. It began to replace some older virtues. We began to drop them off during the fifties, sixties and seventies. Hard work, thrift and frugality began to be submerged by the need for more, to the extent that even if we could not pay for more we sought ways to borrow in order to get more. That was true

July 12, 1982
Public Sector Compensation Restraint Act
not only for people but for institutions as well-banks, for example.
I remember going into a bank when I was a lad. It was a very formidable institution with a high oak table and a little cage. Behind that cage and looking very severe was the teller. I was taking the money earned on my paper route to put it in the bank. I was taught that if I put it in the bank and saved it, I would learn the magic of 5 per cent. I would learn that if I worked hard and saved my money, I would get money in return. I knew that if I put it into that bank they would do the same thing, invest it. I went back to that bank about 20 years later, in the early sixties, and I noticed that all the oak tables had gone. The very severe teller had gone and the cage had gone. It was all very colourful. They had colour on the walls, people were happy and cheerful; but what really caught my eye was that there was a boat right in the middle of the bank floor. The bank was running a raffle, and the bank said that if I bought a ticket for $1 I could win the boat. I could get something for nothing. All I had to do was get the right number. I did not have to work for it, I did not have to guess, I just had to buy the right ticket. Our institutions and our people, Mr. Speaker, over 35 years slowly changed the traditional economic attitude that we had and moved into the concept of "more".
The third reason for inflation, Mr. Speaker, is that we began to feel we could control the imponderables of economics. We could control the business cycle. The war and the post-war period taught us that. We were unable to accept the proposition that bad times might come, that busts for businesses might come. We decided that was not acceptable and that we could control the business cycle.
Fourth, businesses learned that it was essential to control prices and stabilize markets; competition was not a good thing and was to be avoided by whatever method within the law. In short, the government began to provide a net not only for people but for business enterprise as well, and slowly the concentration of economic power by large corporations and large unions began to make a mockery out of the fact that you could manipulate prices by the simple mechanism of the market.
The fifth reason for inflation, Mr. Speaker, was that in order to have the other four grow, governments had to expand liquidity. They had to create money. The grease for "more" was money. So they began to expand the money supply.
All of those factors established the reality of inflation. It is worthwhile mentioning them again so it is clear, because I find very few of these addressed in the bill before us. Maybe there is more coming, but very few of these causes of inflation are reflected in this bill. First is the attitude towards growth and government responsibility for it, and therefore government's growth. Second is the philosophy of "more". Third is the assumption we can control the business cycle to suit our purposes. Fourth is the concentration of power, by both
business and labour. Fifth is the constant increase in the money supply to keep the rest going.
That, I think, is the shortest way 1 can point out what has happened, and the result of it all, I repeat, has been that inflation in the early 1980s has become chronic, endemic, accelerating and uncontrollable. Anyone not willing to face that fact is neither serving themselves nor indeed the people they represent.
We began in the late seventies and now in the early eighties, Mr. Speaker, to look at policies which might fix it up. These were policies which were used in various countries, more in some than in others, and different in some places than in others. Squeezing the money supply was used in a number of countries. There was cutting back on government spending, and raising taxes to limit consumption. Wage or price controls were imposed, or guidelines given. Economic co-operation was sought through an incomes policy. We lived, if I can describe it this way, and are living now in a world of stop and go. We have stop policies and go policies. The stop policies are to bring inflation down, but what they do is increase inequities and frustrations in people. When those inequities and frustrations get too high, we quit the stop policies and put in the go policies which allow us to deal a little more with the inequities and frustrations; but they, of course, cause inflation to go back up to where it was before. So we have gone around and around on the merry-go-round. That is our basic dilemma, Mr. Speaker, which we have not yet been able to deal with.
So the government has announced it is going to have a program of restraint, a national crusade. In order for it to work, Mr. Speaker, the government, like anyone else, has to answer the ancient economic problem posed in these two questions: Who gets to work? Who gets how much? Those are the fundamentals of economics.
As for who gets to work, in a period of growth we do not have to worry too much about it because new entrants and those displaced by technological change can get jobs. So the question of who gets to work is answered by growth.
As for who gets how much, when the pie is increasing and everyone's slice is increasing, that question is not a big problem. But when we have slow growth or no growth, when we have restraint, then we have to figure out what will be just and fair in terms of who gets how much. A program of restraint, therefore, requires the inclusion of two principles: one, that we have freedom of choice; two, that it be fair and equitable. A program of restraint which does not offer freedom of choice and fairness and equity will not succeed.
That brings me to the second principle, Mr. Speaker. This bill not only deals with the principle of restraint, it deals with collective bargaining. Since 1872 collective bargaining has been the way in which we in this country have solved the economic problem of who gets how much. This is not a happy time for the principle of collective bargaining because people have found it an easy scapegoat, aided somewhat by the abuse of the right to strike and confrontation tactics between labour and management.
July 12, 1982

Interestingly enough, however, most of the great successes in collective bargaining go unreported and unheralded. Year after year tens of thousands of collective agreements are signed and they become the way in which we decide who gets how much. In a free society it is the mechanism of collective bargaining which we have used to determine that question. I hope we never underestimate the value of the principle of collective bargaining. It struck me that those who have never been great supporters of that principle fail to understand that at the root of the whole question of Poland some months ago- let Poland be Poland-was the desire on the part of Solidarity to have the collective bargaining rights and privileges which Canadians have enjoyed for decades.
1 want to know why the government wants to throw out the principle of collective bargaining or why it wants to freeze collective bargaining. I am not talking about the right to strike here; I am talking about the way in which collective bargaining was used traditionally in the country so that people were able to see it as fair and equitable. For example, the government is saying that it wants to restrain compensation by 6 per cent in the first year and by 5 per cent in the second year. At the same time it is saying that that restraint will be applied to everyone, whether one happens to be a corporate president or a charperson, whether one happens to be earning $9,000, $10,000 or $109,000. It assumes rather sloppily that the progressive income tax system will take care of the inequities. It will not, and the government knows it.
Why does the government not add up the total amount which the 6 per cent and 5 per cent restraints give and then let the collective bargaining system distribute it, rather than impose it? The government will not obtain co-operation by imposing it. It could have exactly the same effect but allow the collective bargaining system to work so that it can be distributed fairly to people.
The collective bargaining system has allowed for stability in our industries. Anyone can obtain stability without freedom, anyone can obtain freedom without stability, but it takes years of learning, co-operation and tradition to create a system which allows both stability and freedom to exist side by side. For example, the country has benefited immensely for the past 90 years in the railway industry beause there has been the growth of the tradition of collective bargaining. In the railway industry there are 16 unions, 11 railroads, and 90,000 people. We have industrywide bargaining in the railway business, so there is one joint agreement.
I have here a number of agreements current over the next two years. They involve Canadian Pacific Railway, Canadian National Railways, Dominion Atlantic, Ontario Northland, Quebec Central, Algoma Central, Toronto, Hamilton and Buffalo Railway, Esquimalt and Nanaimo, Toronto Terminals, Grand River Railway Company, Northern Rail, Shawinigan Falls and VIA Rail. Those agreements are with non-operating unions. I have another agreement involving the Shop Crafts and Locomotive Engineers. All railway agreements work
Public Sector Compensation Restraint Act
toward a joint agreement. That fact developed by railways and unions has given us stability over these many years. We should not underestimate this because the country is built on the railroads. We need for normal commerce, both internal and external, a transportation system which provides stability at prices we can afford. It has been worked out over the years by management and by labour. Indeed, there have only been three strikes in this century in the railway business.
Unless this bill is changed, it will bring to an end industrywide bargaining in the railway industry because it requires that CN operate under the 6 per cent and 5 per cent wage restraints, while CP and all other railroads do not. It not only affects the wages of employees, but it affects their benefits, their health and welfare schemes and their pensions. We will have people working side by side in the same job in the same shop and on the same locomotive for years at different prices and with different benefits, because different unions will be negotiating with different railroads for different workers at different times. They will never get it back.
When the bill goes to committee it is absolutely essential for the government to listen to what railway unions, management and the railroads have to say. Collective bargaining is a principle that is not only a nice one, it gives freedom and stability. At the same time it gives the economic stability we require for the normal operation of the commerce of the country.
My friend has just given me a telegram which is testimony to the points I have made with respect to the railroads. It is from the Vancouver Board of Trade and concerns the situation faced by railroads. It reads:
We fear that, if inequities develop in compensation paid by the two railways, there could be critical rail service disruptions. We ask your assurance that legislation will provide safeguards against this serious threat.
We must bear in mind that we are talking about unions which are the most responsible in the country. Unless there is a change in the bill, we are heading for short-term instability and long-term chaos in the transportation industry. The bill not only affects railroads, including CNR affiliates and wholly-owned subsidiaries, but the trucking industry as well.
The hon. member for Lincoln said that the bill was rushed through in a difficult time. This may well be, but it does nothing for people's confidence in the government because it is putting through a bill which will destroy 90 years of collective bargaining in the most significant industry in the country. It angers people that the government is not competent enough to think this through. When it comes to committee stage of the bill, I hope government members will go beyond their normal "Yes, we agree with cabinet", and think clearly about what witnesses on behalf of the railway unions, management and the railroads have to say.
Aside from the principle of restraint and the principle of collective bargaining, this bill touches upon the principle of equity. The government will not restrain anyone unless the person thinks it is fair and other people are being dealt with in the same manner. This is why people worry as they look at

July 12, 1982
Public Sector Compensation Restraint Act
how the government conducts itself with respect to other people.
It is not fair that the government can deindex income tax and cap wages, which make it harder for low-income people. It is not fair that the corporate president, as I mentioned earlier, is treated the same way in terms of the 6 per cent and 5 per cent as the charlady. It is not fair that those who receive perks of office-and we know who they are and what they are-such as hidden income, are not treated the same way as other people who are affected by the 6 per cent and 5 per cent caps. It is not fair that the government can put 6 per cent and 5 per cent restraints on the salaries of some people and we do not even know what are the salaries of presidents of corporations. Surely equity requires that the government put its cards on the table and tell us what these people earn; they are being paid by the public. It is not fair that the 6 per cent and 5 per cent cappings do not include fees of consulting and professional services directly for the government.


Miss MacDonald:: That is $1 billion worth.


David Edward Crombie: As the hon. member for Kingston and the Islands (Miss MacDonald) says, it is $1 billion worth of business. Why are they not included? I realize that they are part of the government's patronage system, but why should they not be part of the 6 per cent world?
Ministers of the Crown have restraint under this bill only because they are Members of Parliament. They earn $104,100. As an example, they receive a $2,000 car allowance. Ministers of the Crown receive that allowance which was introduced as a restraint measure in 1930 to replace a car and chauffeur. Now they have the car and chauffeur back and still receive the $2,000.


Norman Kelly: Did you hand yours in?


David Edward Crombie: When the public service is to be brought under a restraint program, the government-not just this government but any government-has an obligation to see how it conducts itself, and not just the people who serve it.
It is also not fair that just before Bill C-124 was introduced, Bill C-123 was brought in, which allows for the reorganization of certain government departments with the addition of four new parliamentary secretaries-four new Liberal backbenchers-which means an additional $6,900 each. Why is that fair? If those members are sincerely interested in showing some moral leadership in the restraint program, they would indicate that they would be willing to do the work without the extra compensation. However, I do not believe that is what we will see.
Even if it can be justified, is it wise or fair that, days before the budget was introduced with wage restraints proposed for the public service, ministers' staffs received increases of 10 per cent, not 5 per cent or 6 per cent? Lawyers in the Justice Department had increases of 11 per cent. It is these actions
which question the government's moral authority to implement this restraint program.
I might say that I agree wholeheartedly with the comments of my friend, the hon. member for Lincoln, that civil servants are easy to categorize and shunt around. But one can have nothing but respect for the people you work with who are working for the Canadian government on behalf of the people of Canada.
This brings me to the question of equity in terms of the public service. There is one figure which has always impressed me. Women fill only 4.3 per cent of senior management positions but comprise 82 per cent of the lower paid administrative and clerical positions.


Flora Isabel MacDonald: Right on!


David Edward Crombie: They will be hard pressed to understand that any affirmative action programs within the public service that will be of any benefit to them will no longer be operated through the collective bargaining system, since it has been frozen by the government through this bill. Are we to think that this will contribute to the sense of fair play that the government's program is supposed to provide?
My colleague, the hon. member for Nepean-Carleton (Mr. Baker) talked about the national crusade and the crusaders. As we look at the national crusade of restraint we have to look at the tainted wings of the crusaders, because in the final analysis many people do not understand all of the program and the numbers, its applications and effects. For example, very few people understand that this is a bill not only dealing with restraint but one which takes away collective bargaining as well. People do not understand the consequences of the entire bill. That is why they very often do not judge by what is being said but by who is saying it; not by what is promised but by who is promising it. That is why, when it comes to the ability of the government to put through a wage restraint program in the public service, its chance of success is directly related to whether or not people regard what the government has to say as honest and believable. In short, whether or not they have any confidence in the government to carry out wage restraints.
That confidence has been undermined by government policy and government statements. For example, the fact that the deficit in the budget went up to $19.6 billion is not the most important factor. It is the fact that eight months ago the government said its deficit would be $10.5 billion. It is very difficult to have confidence in a government which makes a mistake in its understanding of the future of the economy in saying that its deficit would be $10.5 billion and it ends up at $19.6 billion. It is not only the fact that the deficit has doubled; the government could not see or did not know this would happen. It is bad enough that it doubled, but it is worse that the government did not foresee it.
The government showed its lack of leadership when it came in with a budget on November 12 which called for restraint and put its own spending at 22 per cent. It came in with its next budget on June 28, which again called for restraint and, indeed, wage restraint for the public service, when its own
July 12, 1982

spending for 1982-83 was increased by 20 per cent. People take their lead not from what is said but from what is done. This government has shown that it may be one thing for it to preach restraint but that it does entirely the opposite.
I conclude by saying that this bill is more than meets the eye. It is far less than meets expectations. It is not purely and simply a bill to restrict the wages of public servants to 6 per cent and 5 per cent. What is at stake is whether or not the government itself will be able to change in order to muster its own moral authority, which the country needs in order to have a restraint program. There is nothing wrong with restraint. There is nothing wrong with people recognizing again that the only way to progress is to exercise some frugality, and that the only way to make use of the country's natural resources is not by squandering them but by husbanding them.
While some people believe that we must exercise growth and optimism or else the belief will be that we will head in the other direction, most people in running their lives realize that if they do not look after their own resources and husband them, and if they do not discipline themselves, they will not be able to depend in the future on the bounty coming forward.
The Prime Minister (Mr. Trudeau) has said that he is challenging Canadians. I have never heard such arrogance in my life-that we need the Prime Minister to say that his job is to challenge Canadians into restraint. Anyone who walks along the street and goes into stores, factories or shops knows that for the last two or three years people have slowly begun to change. Canadians have said, "Sure, I want more, but I know that in order to have more I must remember some of the older virtues of working hard, thrift and saving.'' They also know that much is dependent upon themselves in their communities. That is why this bill, and this Prime Minister, I might say, are not on the cutting edge of change. That is insipient arrogance which words fail me to describe.
All the government is doing is desperately trying to catch up to Canadians, who understood long ago that if there is to be any salvation for this country it depends on them and their ability to change their habits and be able to make the country work. As they watch this government they know for sure that they cannot depend on it to do either of those two things.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Blaker):: Before I recognize the hon. member for Mission-Port Moody (Mr. Rose), 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 South West Nova (Miss Campbell)-Fisheries-Bay of Fundy herring fishery; the hon.
Public Sector Compensation Restraint Act
member for Bow River (Mr. Taylor)-Public Service- Authority for capping indexation of pensions, b) Funding of indexing; the hon. member for St. Catharines (Mr. Reid)- Automotive Industry-Canadian content in imported vehicles, b) Consequences of government policy.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Johnston that Bill C-124, respecting compensation in the public sector of Canada, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Mark Willson Rose: Mr. Speaker, before I begin my remarks I would like to congratulate the hon. member for Rosedale (Mr. Crombie) on an excellent analysis of the problems of world inflation. However, I think he failed to add two very important points to the five points he mentioned. What he did not say was that the world has been practising the lunacy of spending $500 billion of its income each year on armaments. If that kind of money is to be spent on armaments, it will not be used to feed, clothe and shelter hungry people or to provide them with warmth, sustenance and medicine.
I consider the other point he did not mention to be a very important factor. If it has not already made itself felt, it will affect our children in the future. For years, perhaps for even a century of industrialized society, we have been passing the social cost off to future generations. Future generations will pay for the frivolity with which we have treated our environment. We have used our air as a sewer and we will pay the cost in acid rain. We have used our rivers as sewers and we are paying the cost right now. This year, the Fraser River in British Columbia had to be closed to fishing, and there are probably many similar examples which could be cited.
We are concerned over the number of people who have been and will be deprived of jobs in Canada and perhaps throughout the world. We have not begun to have a glimpse of the impact of the technological society, the automated society, and what it will do to us in a relatively short time.
Bill C-124, derived from the budget, has all the earmarks of some attitudinal survey, as if it were based on something that pollsters like Martin Goldfarb or Allan Gregg might have come out with. Those pollsters have probably gone out and discovered that certain buzz words are accepted in society, buzz words such as "sharing", "co-operation" and "solidarity". These words are supposedly reassuring to the masses. They seem to pop out of every Liberal speech as if they were there because they had a particularly confident, caring sound. I could not prove it but I certainly suspect that

July 12, 1982
Public Sector Compensation Restraint Act
that is how it happened. The surprising word is "solidarity". The expression "solidarity forever", formerly had a mildly leftwing taint to it, but not any more, not since Lech Walesa. It is now perfectly acceptable and even polite in society; it has found a new respectability.
I think that if someone were to suggest that this budget was sort of whomped up, he would probably find that he was wrong and that this is part of a policy which probably goes back two or three years. Some would say that it is a conspiracy. I would not be so extravagant as to use such excessive language, but I believe it goes back at least two or three years. Its purpose was to soften us up for this day, when we are told "Tighten your belts and lessen your demands. We are threatened. Lower your expectations." The only thing the government has not said is "Tote that barge and lift that bale".
That is the sense of what we are being asked. The people of Canada are being asked to participate in a crusade. Guess who wants to lead us in a crusade to the promised land to slay whatever is slain in the promised land, such as dragons or infidels? The very infidels who got us into this trouble now want to lead us out of it, and they ask us to have confidence. The dragons are at the helm.
On the other hand, I hear an accusation from the Liberal side concerning anyone who has the audacity to complain that we do not want to become part of the 6 per cent world, the wonderful world of 6 per cent. I think all of us would accept that world if we felt is was a 6 per cent world of prices and profits, not just a 6 per cent world of wages. If we say that it will not work, as it did not work the last time, or that it is unfair or inequitable, we are almost accused by some of being disloyal Canadians because we will not fall for Bill C-124. I, for one, will not be accused of being a disloyal Canadian because I happen to analyse the bill and its intention somewhat differently from that of the government, the desperately cornered government which has made a mess out of everything.
We are told by the President of the Treasury Board (Mr. Johnston) that we cannot get ahead of our trading partners. What does he mean by that? Our trading partners in what? What do we sell, besides auto parts, with a high wage component? Wheat? That is 3 per cent of the economy. Lumber and pulp is perhaps 16 per cent. Does that have a high wage component? Ore is 11 per cent. The rest of it can be forgotten; that is, most of it. Who are these trading partners? They are the United States to whom we sell 73 per cent, Japan to whom we sell 6 per cent, and Britain to whom we sell 3 per cent. I do not understand how it can be said that our wages might get ahead of those of our trading partners, because what do we sell with a high wage component, to justify the stand that the government is taking? The only exception is auto parts and we are behind the United States in comparative wages.
People have a right to make judgments about the government, and they do make judgments about the government. I know that Your Honour's attitude will be that of an objective speaker. What would Your Honour think of a government that
allowed wages to fall behind inflation for five years in a row and then blamed the workers for inflation? There has been no wage-push inflation in Canada, but we are certainly paying for it with the loss of 1,200 jobs a day. A small community of jobs is going down the drain each and every day. In the last six months 100,000 manufacturing jobs have been lost in Quebec alone.
Let us compare our wages with those of our trading partners. In 1980, manufacturing wages were about $11.94 per hour in West Germany. In the U.S. they were $9.92 per hour; in Canada they were $9.06; in Japan they were $5.88; in Britain, they were $7.07. What were the increases in the period since 1975? Wages in West Germany have gone up 91 per cent; in the U.S. 56 per cent; in Canada 48 per cent; in Japan 95 per cent; and in Britain 116 per cent. Canada has fallen behind for five years in a row. We have the lowest wage increase since 1975, but we are told that we have wage-push inflation. We are told that we must somehow lessen our demands, we must do with less and have less security. More of us must be out of work and more of us must pay high interest rates.
What is the situation in Japan? That is a major competitor for manufactured goods. The Japanese have a lifetime job promise not to be fired at the whim of a company such as B.C. Tel or Bell Canada. They receive bonuses every six months if a company earns a profit. Whoever heard of bonuses here? All one sees is confrontation. Japanese who work for corporations receive low-interest loans when buying homes, and the use of vacation cottages if they need a summer holiday, as probably most of us do. There is much government-industry planning. Those are the privileges in Japan compared to the type of security of the average Canadian or, for that matter, American worker. It is no wonder that the Japanese are willing to cooperate.
Supposing we do all of this and supposing we accept the 6 per cent solution, what will be the quid pro quol What will the government do for us? Will it guarantee, for instance, that we will have lower land prices or lower prices for anything that we purchase? Of course not. It will do exactly what it did the last time: it will freeze workers' wages at 7.5 per cent and let inflation go to 9 per cent. We did that in 1975. That is why some people are a little cynical about joining this crusade. It is a little hard for us sometimes, just a little bit difficult. That is one example.
What would you think, Mr. Speaker, of a government which robs people of their homes and businesses through high interest rates and then brings in a budget which does nothing about that? We heard the musings of the minister of housing about lowering interest rates when he appeared over national television on the weekend. When the Prime Minister (Mr. Trudeau) was asked about that today, he either feigned or proved that he did not know anything about it. I do not know what people feel about their promises.
Julyl^l982

A lady in my constituency sold her house on May 28. She put in $25,000 and got out $1,900. She says at least they do not owe the credit union anything. That family took a bath. She is a school teacher and cannot afford that kind of expense.
1 listened to what high interest rates have done to one businessman. Tie has been in business for 25 years and has a $1,200,000 mill. He pays the bank $6,000 a month in interest. The bank shut him down. That put 56 people out of work. That is what high interest rates have done. We are asked to take less, to limit our demands to 6 per cent, no matter who it is. What is the government going to do about prices or interest rates? Silence, deafening silence.
In 1980 bank interest was 2.6 per cent above the inflation rate. Today it is 8 per cent above the inflation rate. We now hear that some banks are in trouble, that their profits are down. They certainly deserve to be down; they have almost had a Roman carnival for the last two years. If their profits are down slightly these days, I do not think anyone should worry too much about that. As the Minister of Finance (Mr. Mac-Eachen) said a few months ago, the banks ought to bleed a little.
What would you think of a government that signs deals to increase petroleum prices 30 per cent per year, 10 per cent on July 1 alone? It is taking $1.8 billion more out of the hides of consumers. It wants us to limit our demands to 6 per cent, but refuses to try and negotiate energy deals. These 10 per cent, 10 per cent, 10 per cent increases every six months will mean that by 1986 the same people who are frozen to 6 per cent and 5 per cent will be paying $1,900 to heat the average home and $1,700 to drive a car. At the same time, world oil prices are tumbling, falling from $40 a barrel to $32.50. We are still pumping up our prices. Esso is in bad shape. It had to lay off a lot of people. A year ago its profits were $140 million; now they are only $40 million. Esso is really hurting. That is the third example I would give when asked to make comparisons and join a crusade.
What do you think of a government that is prepared to give away billions in order to push Candu reactors on every tinpot dictatorship in the world? This government was prepared to give the Mexicans two $6 billion Candu reactors, depending on the life of the contract, up to $1 billion each in export development or payment subsidies, interest subsidized loans. The government was going to borrow at 14 per cent and give it to the Mexicans at 7 per cent, simply for financing.
The school teacher in my constituency was paying 22 per cent interest on her home. She would like the equivalent of a Candu reactor deal that we are prepared to give to Mexico, to Rumania-Argentina is completed-to Korea, or to anyone who wants to line up. We do not care, we will sell them one. As a matter of fact, we will help them buy it so that we can rescue an industry that nobody needs right now because we are beginning to conserve electrical power. Nobody wants nuclear energy because it is poisonous. You cannot get rid of the waste material. We could make plutonium into a nice chummy little bomb.
Public Sector Compensation Restraint Act
What do you think of a government that would pump billions into nuclear energy, billions into armaments and billions to poke holes in the Beaufort Sea but has no money or very little for conservation, alternative energy or any kind of different lifestyle? The party is over on those biggies. If you have nothing but a megastrategy such as Alsands, Cold Lake, a big coal deal, nuclear strategy, and those flop, you do not have anything. In the meantime we have allowed our manufacturing base to wither away.
What would you think of a government that chisels old age pensioners out of $300 million, $300 each over the next two years, by limiting indexing? That pension which was fought for for years and years is threatened. Universality is threatened. It is on its last legs. It is out. If you have a 10 or 12 per cent inflation rate and indexation of 6 per cent, you have destroyed universality. You have cost every old age pensioner who receives OAS $300 in the next two years, totalling $300 million because there are roughly one million old age pensioners.
In the two years that follow, the cumulative loss will be $900 million. If you want to shell-game that money into some other program, that is one thing. However, if you do not do that, you have deprived the economy of that much money because these old people do not squirrel it away, they spend it. They have very little disposable income.
Some will say that the old age pensioners have all kinds of money. There may be 200 or 300 millionaires in Canada who do not need it. It will not hurt them a bit. That amounts to admitting that your tax system is inadequate to recapture. In other words, it favours the rich. You cannot have it both ways. You cannot say they do not need it and you will recapture it, because you will not do it. This stunt, and that is all it is, is an admission that the tax system discriminates in favour of the rich.
As a result of this budget, low-income earners will have a 50 per cent tax increase. If you earn $100,000, you will get a 3 per cent tax increase. If you earn $200,000 like the heads of some corporations, and I could name them, the captains of industry, the industrial maggots of Canada-sorry, the magnets-you will now be paying less tax under the new budget.


Miss Jewett:: The typhoons!


Mark Willson Rose: It is not that they do not create jobs, not that they are not nice fellows or worthy people. The point is that if their income is limited to 5 or 6 per cent for the next year and they are making $500,000, it does not mean very much. Five per cent is $25,000. That is probably double the income of a sweeper working for the civil service in Winnipeg. That is a big deal for them. If they earn $12,000 a year, 5 per cent of that will be $600. That is not enough to pay the rent and the groceries. That is the fifth point.
What do you think, Mr. Speaker, of a government that, in addition to those five obscene things, goes on to break contracts with public servants? Retired public servants paid 1 per

July 12, 1982
Public Sector Compensation Restraint Act
cent for their indexing all the time they worked for the government so that the inflation factor would be looked after in their retirement. If you do not have some sort of indexing, every day you are retired your purchasing power drains away. Those opposite will argue that it will drain away anyway if we do not counter inflation. I do not think we will counter inflation by this technique. In any event, these people have paid for this. Who are they? What are their incomes? Can they afford to be without that indexing or to have their indexing reduced to 6 per cent while they paid for 12 per cent or whatever rate would prevail? I will tell you who they are. They are people who have an average of $7,900 income per year. That is below what a lot of people regard as the poverty line. Some of them are spouses on survivor benefits, and the average for them is $2,171.
What niggardly, chiselly, small-mindedness, possessed the government to do that is beyond me. I just do not understand it. Someone said, I think it was the hon. member for Rosedale (Mr. Crombie), that we have got to get this bill to committee. We sure do. I hope the government will be flexible. I am not in that great a hurry to get the bill to committee, because my colleagues and I think that there is a good deal more to be said on this bill. We are not going to hustle it on. We want everyone to know what is happening and what is being done to people. These are people who paid for their inflation protection all the time that they worked.
What would you think, Mr. Speaker, of a government that has embraced policies that have destroyed the value of our dollar? What does that mean? It means that everything we import, whether a can of tomatoes or whatever, costs us more. You may say that we do not need to import tomatoes. The fact is that we do import tomatoes, and canned tomatoes too. That is because we sold out all our canning industry 20 years ago; there is not one left except Canada Packers. The rest in Canada are the big five from the United States.
We have resource-based policies, but there is no market for resources so there are deficits. We have foreign investment policies which mean that every time some people invest here in an equity situation they buy out more of our country. When things get tough they take the research and development, they take the foreign-owned subsidiaries and hustle them back to the United States or somewhere else. This is the kind of policy that we are talking about.
These are the policies that have destroyed our dollar. Instead of hustling along with the pipeline to take Canadian oil to the Atlantic provinces, we are still spending $10 billion each year on oil compensation. Those are the policies, and they are the people who want to lead this crusade to the promised land.
For the first time in months, Mr. Speaker, our balance of payments is on the plus side. We should all be happy about that. Do you know why it is on the plus side? Because imports are down, not because exports are up. That is to say, we are less able to buy things we want to buy from abroad. Keep this up and we will have a terrific balance of payments. We will have a tremendous balance of payments, really favourable; all
we have to do is pauperize Canadians some more so that they will not be able to buy anything imported. Of course, the country will be broke, but our balance of payments picture will look good. This is what we have got, this is what we will have, and this is what these crusaders want us to be proud of and to follow. But we are not going to let them do this.
What would you think, Mr. Speaker, of a government with a policy that forces 4,500 businesses into bankruptcy this year, smashing the dreams of thousands of people? It is putting more people on the dole because more and more money has been snatched out of the economy so they cannot buy things. There are 5,500 people out of work in the forest industry in Port Alberni and they are not going to be very good customers at the local dry goods store or the 15-cent store.
What has been happening in this society is that the rules have been changed. We have a credit crisis. People would like to buy homes, they would like to buy cars, they would like to buy farm machinery, but they are afraid to do so because they do not know what the payments will be like. They do not know whether they will be able to meet the payments. That is the credit crisis. That is forcing 25 bankruptcies of small businesses per day. It was once just the small-business man who was having trouble with financing. Now it is the large ones, too.
What would you think of a government, Mr. Speaker, that singles out public servants as scapegoats? That means taking public servants as merely the shock troops, I suppose, in our battle against inflation. Who are these people? I mentioned the sweeper; 6 per cent of a $12,000 wage means $600. I mentioned the deputy minister earning $100,000; he gets $6,000. Then there are the sweepers, the janitors, the messengers, the waitresses, the hospital workers, all on an average of about $ 11,000 or $ 12,000 a year.
If there is one point, Mr. Speaker, that I think has to be made, and I think it is going to be made and needs to be made over and over again, it is that equality of treatment is not equity. To be equitable is not to treat the janitor the same way as the deputy minister, because the janitor has far less disposable income. Therefore, he has far higher fixed costs and can control his life far less. It is more difficult for him.
The President of the Treasury Board, when he spoke on this matter, said that he wanted to preserve the pecking order. He said he did not want to alter the ladder system, so that when the great new world came about two years down the road we would be able to pick up and carry on with our contracts. In other words, he wanted to freeze the existing inequities. If there is anything that needs to be changed, it is the pecking order. That is what needs to be changed.
If the minister walked in here and said: "Look, under $30,000, full indexing; $30,000 to $50,000, partial indexing; and freeze every salary over $50,000," we still would not vote for it. I still would not vote for it, because I do not agree that this is going to work anyway. We still would not vote for it, but it would make a lot more sense than what we have got.
July 12, 1982

I could go through the winners and losers in this thing. 1 could name them. They are all in the Ottawa Citizen today, or some time recently. Believe me, the big winners are not the people on the low end of the scale. They are never big winners. This time they risk being big losers.
What would you think, Mr. Speaker, of a government that breaks contracts with its own employees, especially women? The government says, in essence, that in order to make democracy work we have to take away your democratic rights. That is essentially what they say. They say: "For two years we are not going to negotiate anything; you are frozen at 6 per cent. Maternity benefits are out; affirmative action, equal pay for equal work, health and safety, those things are not negotiable, because for two years we are not going to negotiate anything." And it is the same with anything else that may come up, such as technological change.
Who are these people? About 80 per cent of the women in the civil service are low paid or relatively low paid. They are secretarial staff, janitorial staff, and those in that kind of clerk position, in 80 per cent of the cases. About 4 per cent of female workers belong to management.
The people who bear the brunt are the poor people, the old people, the women and the young people. The young people will not even be able to get a job. It will be very difficult to face a graduating class next year. We have seen what this government has done. It has broken faith with its own workers. It has contracts coming up that we negotiated in good faith and what is the government going to do with them? It is going to cop out on them; that is what it is going to do. So collective bargaining is out.
What do you do about Air Canada and CP Air, Mr. Speaker? The flight attendants belong to the same union, as do the railway workers who were mentioned too. But no one has mentioned the Dairy Commission; it has a raise coming up. And those concerned with grain handling have coming up in September a negotiated raise of 10 per cent. All the national marketing agencies are getting raises. Are there any guidelines? Or did this government simply walk in on this 6 per cent idea without thinking of federal-provincial agreements or agreements with marketing agencies? That factor is gone, or at least it has not been mentioned, it has not surfaced.
I asked the Minister of Communications (Mr. Fox) the other day what he was going to do about regulatory bodies and were they going to be frozen to 6 per cent. I am speaking of regulatory bodies like the CTC and the CRTC. I was told that Bell was different. It was quoted in the press: "Bell is different." Why should anyone invest in Bell, says the minister, if they can get 15 per cent on their bonds? That is true. Why should you? But Beil wants a 25 per cent increase. The doctors of Ontario want a 25 per cent increase. The nurses of Ontario want a 25 per cent increase.


Mr. Orlikow:: And they will get it.
Public Sector Compensation Restraint Act


Mark Willson Rose: B.C. Tel employees just received an 18 per cent increase, and we are told we cannot feeeze the profits of those people to 6 per cent because that would not be good for the investment climate. Bell said, "We will limit our people earning over $100,000 to 6 per cent". These are Bell's middle-management people. Bell wrote to me and told me that. I thought that sounded pretty good. It sounded terrific.
I know these managers will really suffer if they lose $6,000 a year, but if Bell really wants to help the country, why does it not lower its subscriber rates? That would put millions of dollars more into the economy. Perhaps people would buy things at the grocery store, or even the phone mart store. I do not know, but lowering rates might be a real help. But Bell will not lower its rates. B.C. Tel not only will carry on with the 18 per cent increase it was granted recently but it now also promises to lay off 2,000 workers. If this government does not roll back that last increase and if B.C. Tel proceeds to lay 2,000 workers off, then we will know. We will know that this 5 per cent and 6 per cent inflation fight will be borne by the average worker and not by the corporate sector. In any event, this is what the Financial Post says:
Greenshields analysts also believe the telephone industry's future is "very favourable." Preferred buy: Bell Canada, "although we see strong merit in B.C. Telephone."
Of course they see strong merit in B.C. Tel, because B.C. Tel will lay off workers and continue with increased subscriber rates. B.C. Tel will also continue to provide rotten service.
There is something else. What about a government which favours investors and savers over salary earners and spenders? Our savings have never been so high, due to the policies of this government. The government came out last year with Canada Savings Bonds carrying the interest rate of 19 per cent. Why in the name of sanity would anyone invest in a mine or business to get a 15 per cent return when he can get that much out of Canada Savings Bonds? So what happens? We close mines in Newfoundland and other places. These people have all their money tied up in cash. There is no enterprise in that. We must bring interest rates down to at least 1 per cent above the inflation rate. If we are not prepared to do that, all schemes are useless and there will be a lot of suffering producing no results.
We have never mentioned prices, profits, the professional fees of doctors, lawyers, surveyors and accountants, and incomes from investment. Are they to be limited to 6 per cent? Of course not. We have to make the pot richer.
However, what we will do is reduce the effectiveness of FIRA. The Foreign Investment Review Agency is supposed to help our country, according to some people, including hon. members on my right. If we want to sell this country out really fast, we can weaken FIRA. We will get more foreign investment and more foreign purchasing. A small-business man in my riding makes canopies for trucks. The Foreign Investment Review Agency which does not publish what it is doing, nor does it give reasons for doing what it does. In any event, it let an American canopy firm go to Annacis Island in the riding of

July 12, 1982
Public Sector Compensation Restraint Act
my colleague, the hon. member for New Westminster-Coquit-lam (Miss Jewett), and that put two Canadian canopy firms out of business. Does the operator of the canopy firm in my riding want to see FIR A weakened? Of course he does not. The United States has far tougher buy-U.S. and invest-in-U.S. laws than we do. The Americans keep foreign subsidiaries out by many means. But what are we going to do? If a company is worth $2 million and has 100 employees, we say that is too restrictive and we cannot have FIRA piddling around with that little stuff. What little stuff, the high-tech industries or the small sawmills in the riding of my colleague, the hon. member for Kootenay West (Mr. Kristiansen), which are to be purchased holus-bolus by foreign investors because we are going to change the criteria to $5 million and 200 employees?
What should we think of a government which indulges in the old shell game of steal from social programs? That is what it has done. It did that in relation to block funding for universities and medicare. Where did this $3,000 loan for houses come from? People can get $3,000 grants. Did that come from the old age pensioners? I think it is a good program. I think the small business program is not a bad program either, but what is it doing for interest rates? Somebody mentioned that the Americans have an inflation rate of 7.5 per cent, but their interest rate is 17 per cent. Did a low inflation rate bring interest rates down in the United States?


Mr. Blackburn:: No way.


Mark Willson Rose: Of course it did not.
What about a government which plans, as the minister announced, to raise unemployment insurance premiums paid by everyone who works to pay for the enforced idleness of those who have been put out of work? Even in the minister's own riding of Cape Breton Highlands-Canso there are 18,000 people collecting unemployment insurance but only 9,000 people listed as being unemployed. How could 18,000 people be collecting unemployment insurance when only 9,000 are listed as unemployed? I suppose the worst thing is the spread of fear among those who have jobs to soften them up so that we will accept less. It makes lay-offs acceptable!
I do not know the man who wrote the following article in the Vancouver Sun. It is a sarcastic article. It says:
Canadian workers would be better off if they were paid less.
Poor people must be given less money to make them work harder.
Rich people need more money to expand the economy.
The free market causes land prices to soar, which allows speculators to buy hockey teams and baseball teams and football teams, which is good.
High interest rates are necessary to reduce inflation, make work for bankruptcy lawyers, and create opportunities for the happily unemployed.
Unions are going to destroy this country by fighting for better pensions, proper health and safety legislation, medicare, equal pay, the minimum wage for farmworkers, and decent maternity leave.
Tighten your belts, Canadians, 'cause we have to compete with three-dollar per day militarized, beaten, tear-gassed South Koreans.
Expand the military!
Cut back social services!
Isn't free enterprise the greatest?
I have been told the reason the last budget was a failure was that it was prepared by bureaucrats. Perhaps they are sitting up in the gallery. It was not political enough; there was no input from the caucus. But this time there is. If members of the Liberal Party ever get home for the summer, they can say they have had their input. They had their Kingston conference, and we were told the bureaucrats were not even allowed to see the budget. I do not know what hon. members opposite will tell their constituents after they have told them there is some aid in the budget for small business. Some of the provisions for housing are good, but I wonder if they will tell their constituents that their government broke contracts with the public service and raised taxes, except for the very wealthy, and that it chiselled old age pensioners out of $300 million over the next two years. The government did nothing about interest rates. There is little for job expansion, and Canadians are left with an $18 billion deficit.


Ronald Alexander Stewart: Twenty.


Mark Willson Rose: In fact, the government has guaranteed a bigger deficit because as incomes fall, government costs for welfare, UIC and lack of taxes paid are bound to rise. That will make the deficit even greater.
Hon. members opposite are jubilant about this so called political budget. I hope they will go out and tell the whole truth to their constituents about what this budget and Bill C-124 are really designed to do. The design is to have a massive redistribution of income away from working people and into capital and profits for corporations. And hon. members opposite ask the people to join in that crusade! It is not equitable, it is not fair, it probably will not work because it is a hoax.


The Acting Speaker (Mr. Blaker):: Hon. members will note that the Chair is not following the usual practice of alternating between left and right. If no other hon. member stands, the Chair will recognize the hon. member who is standing, the hon. member for Kootenay West (Mr. Kristiansen).


Mr. Lyle S. Kristiansen (Kootenay West):: Mr. Speaker, in the circumstances perhaps 1 may be forgiven for saying that it would occur to an objective observer that there is a certain lack of commitment evident in the feelings of some of those who have suggested that they see something unfair in the legislation before us. The manner in which they are jumping at the opportunity of expressing the grievances of those who will suffer as a result of Bill C-124 shows that their fervour is somewhat lacking. That is not surprising in view of some of the contradictory statements we have heard from members of the official opposition in the last while. I hope it is simply an aberration and that they will find their consciences and their feet in the next few hours and days.
In commencing my remarks on what I consider to be one of the most damnable and discriminatory pieces of class legislation that I have had the misfortune to consider since being elected to this chamber of horrors, I feel compelled to warn
July 12, 1982

you, Mr. Speaker, and any other possibly faint-hearted member that the deep feelings I hold on the nature of the subject before us may cause me to slip or, perhaps to put it more appropriately, to escalate into what might be described as lunchroom terminology, backwoods vocabulary or just plain speaking.
I shall try to restrain myself but these feelings are not mine alone; they are those of many people I have worked with over the years. They are so strong that it may be difficult to restrain some of the more volatile expressions and terminology that may be appropriate. I make no apology for that because, in spite of the fact that I have been a member of what is sometimes ludicrously called this House of Commons-and I have to wonder at the word "Commons" when we deal with legislation of this kind-for some two and a half years, I am still an industrial worker and a trade unionist in conscience and at heart. I am proud of that. I feel compelled, in spite of the sometimes phony sophistication of this place, to call a spade a bloody shovel.
As a prelude to the statements and accusations to come, I should also say that the Conservative Party will invoke my wrath and anger every bit as much as the Liberal government, because in spite of its mealy-mouthed and hypocritical effusions of mock protestation, Bill C-124 is a classic example of that party's thin blue line of knee-jerk reactionary conservatism in practice.
When it comes to the rights, needs and legitimate aspirations of honest, hard-working people, the shallow, hollow little men and women of the Conservative Party to my right are every bit as mean, deaf, dumb and blind in the political and economic sense as are the overstuffed apostles of Liberalism across the way.
Bill C-124, an act respecting compensation in the public sector of Canada, is bad law. It is unfair, it is unwise, it is discriminatory and it is counterproductive. It is based upon a lie and it is wrong. Quite simply, it is an attack upon the very spirit and soul of a democratic society. It seeks to place the burden for our society's ills on the shoulders of those who are the servants, not the masters, of Canada's governmental and economic system.
I should like to quote from a document that is rather well known in the annals of western democratic evolution, the Magna Carta of 1215. Part VI of that document reads as follows:
Clauses to control the behaviour of royal officials, particularly those of local government. No town or individual shall be forced to make bridges or maintain river banks-
Nothing could be more clearly designed to show the absolute moral bankruptcy of a government that chooses as a scapegoat for its own ineptitude and failures the servants of the people, the public employees of this nation. The Magna Carta was presented to King John in the year 1215. Because some of those opposed to him were referred to as those who robbed the rich to give to the poor, one can only assume that what he was representing, and what this government which is acting like him represents, are those who would steal from the poor to give to the rich. Relatively speaking, that is exactly what this bill is about.
Public Sector Compensation Restraint Act
We have heard a lot of talk about crusades. Perhaps we need some more crusaders but different from those of 1215. Perhaps we need someone who will attempt to seek some form of redress or an appeal for justice on behalf of those rendered powerless, either to help themselves, or to have any significant say in what to do or how to do it for the majority of their waking lives, namely, when they are at work.
The actions of the Liberal government and the Conservative opposition in this situation remind me of a parable related to me and the leader of this party, the hon. member for Oshawa (Mr. Broadbent), by an old Doukhobor gentleman who called in to us during an open line show in Trail, British Columbia, some two and a half years ago. He told us that the Russian people have a saying that, "no one ever mentions the wolf; it was the goat that ate the sheep." That may be very simple but it is surprising how close it is to the truth in the present situation. No one is talking about the wolf being to blame for the present situation but somebody sure is looking for a goat.
We are in a desperate situation in this country, Mr. Speaker, and we all recognize that. I gather from some of the things that were said at the meetings between the government and the provincial premiers, between representatives of the federal government and the business and corporate leaders and between leaders of the Canadian Labour Congress and the government in the last few days, that things may be more desperate than anyone has admitted up to this point. We would be among the first to agree that if times are as tough as they appear to be, it is going to require much more of a coming together and much more of a spirit of true compromise between the different interest groups in our society and representatives of political parties than has been normal over the past few years. If we are to achieve that in a constructive way, then there must be some acceptance of good faith on the part of all parties involved.
It is a hollow appeal to ask of working people in particular but also ask of those who have not had the opportunity for some months and years to engage in remunerative work to make the first sacrifices.
A young plywood plant worker from my home town of Nelson, B.C., wrote some words on the subject last November, about the time some 100,000 people gathered on Parliament Hill to protest the high, avaricious and usurious level of interest rates that were threatening to drive many people out of their homes. His words say a lot about attitudes justifiably held by many people at this point. I should like to take the opportunity to put on the record of the House the words to a song that this young man wrote. In clear and in more understandable terms than many of us are capable of expressing, they recount the horrors and feelings of anger and frustration of many people. This song was written in November, 1981, by Chris Hart, a single parent with a little boy:
Interest rates are giving my soul a beating I don't know how long I can keep on eating I've got a little boy back home in B.C.

July 12, 1982
Public Sector Compensation Restraint Act
And I tell you Pierre He's counting on me
To give him breakfast in the morning
And a lunch to take to school
To buy him warm boots for the winter
And now I feel like a fool
Cause Santa Claus stays in the trunk this year
It's never been this bad before
It's a sorry situation my friend
When a working man can't make a living no more
I used to have a job in a plywood mill
If I had my choice I'd be there still
I made the best plywood I could you see
There was no good reason this happened to me
But nobody's buying plywood
To build houses they can't afford
It seems that everybody's had to stop what they're doing
Since the interest rates have soared
We're just looking for a little leadership
You're supposed to be good at that
I'm ready to practice some civil disobedience
Against the ones still getting fat
Bankers are reporting record profits
They've sure got their fingers deep in my pockets
The Feds say it's all going according to plan
They're gonna lay the blame on the working man
But a quiet people anger
Slowly at the start
I feel the anger rising quickly now
Soon to blow apart
If the banker takes my home away
I'm not sure what I'll do
But if I fight with him and lose Pierre
I'm coming after you, Yes I am
I'm coming after you.
Those are not phony words, Mr. Speaker. They were written by a young single parent who last week was not only told that he was going to continue to be laid off after having worked for not more than two or three weeks since last fall in the plywood plant in which he has some eight or nine years' seniority, but that the mill was closing permanently. That mill is one of only two major industrial operations in my home town and his. He is angry and his neighbours are angry.
If people think-not only some people in government but some people in some corporations-that they can use this opportunity to squeeze concessions on working conditions, safety and many other things won by hard struggle over the years, then I think the operative phrase is "every dog has his day". Any employer who has been in the industrial relations business knows that it does not pay to milk everyone for everything you can get because of a temporary advantage, because they will find a way to get even. They may have to hurt themselves in the process, but they will do that because they are very human.
The government thinks that by Bill C-124, Mr. Speaker, it can impose a law which will not only restrict incomes of public servants but will also eliminate for that period of time the
entire process of collective bargaining. I do not know what kind of mentality it is which makes the government think it has the right to take away fundamental human rights in this manner. Even if one was to concede that there is a right in desperate times to put a ceiling or a cap on wages, there is absolutely no excuse for them denying the very process of jointly attempting to determine the conditions of your work, whether you are going to live or die on the job, and all of those other matters so vital to the interests of ordinary people. By so doing, the government will sow and reap the whirlwind.
In trying to analyse the kind of mind which gives rise to this sort of action, one can only assume that there are many in the government who think, "Well, we gave them these rights so we can suspend them." The right to withdraw one's labour, Mr. Speaker, was not given to anyone by government. It was won on this continent when working men and women found that by exercising their right to withdraw their labour they could gain some appreciation and recognition of their problems and appropriate grievances-without laws setting out when and how they could do it. When that right was found to be effective, not only by working people themselves but by the rest of society, that is when governments across this land and in the republic to the south began to recognize that right in law. The right was not given, it was simply claimed and recognized, and in being recognized it was thereby limited and structured.
I am not debating here whether or not that was an appropriate action. In a civilized society we attempt to structure our conflicts in ways which allow for an appropriate peaceful method of decision-making among different sectors. Industrial relations and employer-employee conflicts have been stabilized in a better and healthier way for society at large than what we see in some countries in Europe, particularly eastern Europe, which have never adopted the necessary democratic structures to allow ordinary working people to freely determine their own destinies and the conditions under which they work and live. Instead, they have had the kinds of explosions such as we have seen in Poland simply because they have never come up with the kinds of structures necessary for people to sort out their problems in a democratic and reasonable way.
The spokesman for the Conservative Party who spoke prior to the hon. member for Mission-Port Moody (Mr. Rose) made some very constructive comments, Mr. Speaker. He again drew attention to the irresponsibility of the provisions contained in this bill which eliminate collective bargaining within the public service and for employees of Crown corporations, and the impact that may have on joint council collective bargaining. Such joint collective bargaining, to the extent it takes place today, is a relatively recent innovation. It is still rather fragile and I and many of my colleagues and members of the official opposition-and surely there must be some in the government as well-tremble at the fact that something that new and fragile, but which has also been very useful, can perhaps be put to death by an unwise law which has been poorly considered and poorly thought out.
July 12, 1982

I would hope that even if the government is determined to proceed with its 6 per cent dream world and the unfair manner in which it has been imposed, it will at least see the error of its ways in possibly wiping out the kind of joint bargaining councils and joint approaches to industrial relations which have served many of our industries so well over the period of the last few years. I am also thinking particularly, Mr. Speaker, of Canada Post, our new Crown corporation. We have for years and years attempted to bring the post office out of its former shell, a shell which was made up of government interference in labour-management relations and other matters. One minister after another used to involve himself in the situation. The minister used to change as often as we change our shirts; they used to butt into the internal workings of the post office. Only last year Canada Post was established as a new independent postal corporation. By so doing, the government allowed its managers and employees to bargain under the provisions of the Canada Labour Code. Thus they could work out, as free men and women, various problems which could not freely be worked out previously because they were subjected to a different piece of legislation. I am thinking about problems regarding technological changes particularly.
One major problem which developed in the post office as a result of the imposition of highly technical machinery 10 or 15 years ago-


An hon. Member:: Much of which did not work.


Lyle Stuart Kristiansen: Yes, that is true. The introduction of highly mechanized machinery resulted in mechanical problems as well as human ones. When the nature of jobs was changing, the labour-management process had to undergo a change because there was a high degree of automation in which people did not have any say. For these reasons they started tearing themselves apart, both employee against employee and employer against employee. They were frustrated because they did not have and were not allowed to have the mechanism under the laws of the land which other employees and managers had. They have just now been given that freedom.
We have heard the testimony of the new president of Canada Post that the incidence of lost time due to industrial disputes has now dropped rather dramatically since the inception of that corporation. At last here was some evidence that perhaps there was a chance for those people to work and live together within the confines of that Crown corporation. Perhaps they would have been able to begin to develop a more mature relationship than has been the trademark of the corporation for many years. Now the government will throw that freedom right out of the door. It is coming down with a heavy hand which could not be better calculated to throw this entire mechanism, upon which much of the country is dependent, right back into the dark ages from whence it came.
It is not my role at this point to point the finger of blame at whether it was the government, management or unions which caused the conflict that took place within the post office. After
Public Sector Compensation Restraint Act
a while it becomes an academic argument as to which came first, the chicken or the egg. Apart from any value judgments, one began to feel that both the union and the management came to deserve each other. But, recently they were looking forward to a new relationship, and there has been some evidence of that relationship developing. Things such as that do not happen magically overnight when dealing with human beings in very intricate set-ups. This sure as the devil is not the way to do it. It is counterproductive to the work of many former ministers. I see at least one of them across the way today. In fact, he spoke in the debate a little earlier. Several former ministers and hundreds of people in labour, in management and in the House have worked for years in an attempt to get the postal service back into a position where it could do the job it was intended to perform on behalf of Canadians.
I beg some of the saner minds which I am sure must be over on the other side of the House to take a second look, if they insist despite the arguments upon keeping caps on levels of incomes, I suppose it is their right because they are the majority and form the government. I ask them to consider some of the arguments we have made and at least one argument of the colleagues to my right. I ask them to remove the carte blanche crackdown on the entire process of collective bargaining which can do much damage for years and decades into the future.
1 am hopeful, because of the tone of the remarks of representatives who attended meetings with members of the government on Friday, for instance, that perhaps their thoughts are not etched in stone. Perhaps they will think some of these things through. I hope that is the case. During the course of committee study 1 hope saner heads will prevail and that we will come up with legislation which, while it still may do some damage in the short run, will not lock us into the long-term holocaust which I am afraid might otherwise be forthcoming in industrial relations within much of the government service.
My comments are based upon an assumption that some of the drive toward this legislation took place in good faith. But some of the evidence of the past, such as our experience with the Anti-Inflation Board in the 1970s, causes us to wonder about the motivation of this bill's attempt to move into the entire area of collective bargainning. The current Minister of Transport (Mr. Pepin) had a role to play in the Anti-Inflation Board in one of his previous lives before his latest reincarnation. I was fairly involved in that whole affair in both the East Kootenays and the West Kootenays at the time. The present Minister of Transport in his role as chairman of the AIB visited the East Kootenays to meet with representatives of United Steelworkers and United Mine Workers because of some joint bargaining process. I cannot even recall the percentages in question at that time, but I think they were something like 7.5 per cent or 8.5 per cent limits. They were a little more intelligent than those in this bill. At least they had some freedom in terms of bargaining and to sort out their priorities within those limits, which is a little more sensible than what is before us today.

July 12, 1982
Public Sector Compensation Restraint Act
In any event, the Minister of Transport sat down with the parties at the bargaining table. He suggested-and I am paraphrasing his remarks-that there might be some way to see the way clear to giving those people an extra percentage point, if only they would remove some of the restrictive provisions within their collective agreements. Someone asked him what he meant by restrictive provisions or restrictive clauses. He leafed through the contract and said, "Here is one here; it is entitled 'contracting out'At that time the chairman of the A1B had the job, according to the government at least, of restraining the level of remuneration. He attempted to obtain what he thought was a more rational sharing of wealth in the country. We did not agree with that, but that was one way in which it was suggested that it should be done. He was willing to give away more money in exchange for those workers giving up some of the very clauses in their agreements which gave them job security. Since that gentleman is still in cabinet today, one has to wonder whether that kind of thinking is there at this time.
What is the purpose of having the entire area of collective bargaining placed under these controls? Is it to prevent working people, at a time when they are faced with unprecedented plant closures and long-term lay-offs, from utilizing their ability to bargain for perhaps better severance pay provisions or other protections against the real threats and dangers they see heading straight at them today? Some people say, "It cannot be that way because we are just talking about the public service and we know that people in the public service do not get laid off." That is not true. This legislation also involves employees at CN and CP, Air Canada and CP Air. CP happens to be a private corporation and Air Canada is a Crown corporation. Are they suggesting that there will be no more cutbacks in CN or its trucking firms? What pattern is being established when the government appeals, as it did to the business community, to transfer these policies to the private sector as well?
What should we read into the Prime Minister's (Mr. Trudeau) remarks last week, which I believe were quite schizophrenic if anything, when he said that he had no intention of imposing controls, even in co-operation with the provinces, across the private sector, and then suggested a few minutes later that if it does not work he may have to consider doing that? He has everyone guessing, and I suppose that is part of the game. But do we need that insecurity added to the insecurities which Canadians have already been feeling during the last few months? It makes one wonder.
One also has to wonder when the Minister of Finance (Mr. MacEachen) is apparently telling leaders of the business community and particularly the leaders of the Canadian Labour Congress and the labour movement during private meetings in Ottawa-I am paraphrasing a news report I read-that he and the government were not suggesting that we were pricing ourselves out of markets via the increasing cost of
labour, while at almost the same time the Minister of Employment and Immigration (Mr. Axworthy) was saying exactly the opposite in the House. That minister said, as reported at page 19173 of Hansard on July 9, 1982, last Friday, in answer to a question from the member for Vancouver Centre (Miss Carney):
Madam Speaker, I would first like to point out to the hon. member for Vancouver Centre that 1 visited British Columbia recently, and I will be there again on Monday to talk to employers and unions about job creation and labour market programs. It was clear in those discussions, when you talked with both employers and members of the unions that the greatest danger to the competitive position of the lumber industry in British Columbia in disposing of its product is the fact that our wage settlements are running substantially ahead of those in the United States.
I took issue at that time, in a rather unparliamentary way, with the words of the minister, because it is just plain hog-wash. While it does not suit the purposes of the government, the fact is that leaders in the forest industry in British Columbia have said as much in very recent months.


An hon. Member:: How about steel?


Lyle Stuart Kristiansen: This minister was talking about the lumber industry. I do not have the statistics in front of me about what the hon. member is are talking about. I do not know the figures as intimately.
However, his statement is absolute hogwash. Even without considering the differences between the Canadian and the American dollar, the unit cost of labour in the Pacific northwest of the United States and western Canada is virtually identical and, if anything, there is approximately a ten-cent higher margin of difference in the Pacific northwest of the United States. The minister's statement was simply untrue.
No one in his right mind would suggest that the markets for our Canadian lumber will increase at the present time by having a wage deferral or wage cut among the woodworkers in British Columbia. More houses will not be built by driving more consumer purchasing power out of the economy and by doing nothing about interest rates across the board. That cannot be accomplished through that action. Perhaps the government could be persuaded to expand some of the housing initiatives it began and to do something drastic through other measures that have been urged by many members on the opposition benches. For several months the government has been urged to turn around the situation with regard to demand in the housing, construction and forest industries. Perhaps the government can encourage more demand for housing.
Perhaps the government of the republic to the south can also stop acting in such an asinine way as that displayed by its veto of recent initiatives proposed by Congress in the last few weeks, and start to take action which would spur the demand for much needed housing in the United States as well. This would produce more jobs and allow some of the mills in British Columbia and other parts of Canada to either remain open or to reopen. The introduction of a wage deferral, which only provides for a variance of a small percentage on a wage cost item which comprises 20 per cent of the cost at most, will do nothing to increase demand for housing or for lumber and will
July 12, 1982

do little to help create a healthier industry in British Columbia.
We should review the situation as a whole. The budget was brought down on June 28. Bill C-124 is an important part of that budget. This bill is combined with other budget measures which are certain to draw even more money out of our economy in terms of purchasing power, resulting in even less domestic business for our own industries and enterprises. This will reduce consumer demand for many of our retail merchants across Canada and drive even more into bankruptcy. I fail to see how this can be seen as the beginning of a turnaround, which has been touted by some on the Liberal side of the House. To believe that would require some stretch of the imagination.
Canadians in our constituencies all across the country fail to see this turnaround as well. This is obvious when one sees their reaction in telegrams, letters and surveys and when one listens to them on the telephone, as I did in the last few weeks.
In conclusion, I would appeal once again to what, hopefully, is the conscience of many of the members on the government side of the House and to the ministers to realize that even if they wish to persist in what appears to be the major objectives of this legislation, they ought to listen carefully and study the information they were given in the meetings on Friday as well as hear the many representations which have been and will be made to the House. When this bill goes to committee let us reason together in an attempt to remove at least those measures which will bring untold long-term harm to the employees of the Government of Canada and its corporations as well as to the very fabric of industrial relations in this society and to the freedom and welfare of Canadians as a whole.


Derek Nigel Ernest Blackburn: Madam Speaker, I feel constrained to enter into this debate because of the blatant inequities in Bill C-124. I would remind the government at the outset that the last time they brought in wage and price controls, the year following the lifting of those controls the government was defeated. I think that is something which the treasury benches should take into consideration at this time, if not publicly then certainly privately in caucus and cabinet discussions.
Of late, there have been many references to the fact that we are no longer in a recession but, rather, in a depression. In many respects, the recession or depression that we are in today is even worse than the great depression of the 1930s. The stockmarket crash took place in October, 1929, as we went into the winter of 1929-30, and the bottom had fallen out of everything by 1931. Wages had gone down to virtually nothing and there was massive unemployment. Prices fell to rock bottom as well. The vast majority of the people of this country, of the United States and of western Europe felt that they were all in the same boat. Oh, the very rich weathered it quite nicely in Capri, in Nice and in West Palm Beach, but they were such a small, insignificant group in the western world in terms of numbers that people seldom thought about them except when
Public Sector Compensation Restraint Act
they went to the nickel movie in the afternoon and saw how the very rich were living. Generally speaking, virtually the entire population felt the depression and suffered as a result. Consequently, across our country there developed a sort of esprit de corps. People said, "We are all badly affected by this great depression and we will have to pull together on our own." They said this because the damned government under R. B. Bennett was doing nothing, like this government here in Ottawa. So they decided to pull together by themselves.
1 can recall those days of hardship back in the 1930s. They were days of hardship, but also days of togetherness when families got together and shared. I can recall growing up in Sault Ste. Marie, which was one of the hardest hit areas in central Canada. If there was one empty seat in a car heading out to Lea's Bay or Pointe-aux-Pins on a Saturday or Sunday, one called up a neighbour and made sure that that seat was filled by a person who could not otherwise get away to the beach. My father was the head of a Gilbert and Sullivan operatic society and he was able to call dress rehearsals for 10 o'clock on a Monday morning because the non-professional cast had no work and there was all kinds of time to work together and to play together. In that depression, as severe as it was, with the soup kitchens and bread lines, there was a feeling of common suffering. Everyone was adversely affected and therefore everyone on the block, in the neighbourhood or the community was pulling together. There was no feeling of alienation toward some groups in society, although some were hurt more than others. There was no feeling that someone in Ottawa was trying to rip off something from them or that people in some parts of the city were better off than those in other parts.
Today, however, we are in a very pernicious kind of depression. We have widespread unemployment, with 1.3 million officially unemployed. There are probably 1.7 million or 1.8 million in total who are unemployed. Yet we still have 10 million people working in this country. Also, we have rising prices at a time of mass unemployment. There are also some professional or self-employed people who are making more money in 1982 than they made in 1981.


Mr. Nickerson:: Good for them.


Derek Nigel Ernest Blackburn: A Conservative over there says, "Good for them." So much for sharing, so much for a deep appreciation of the suffering that is going on in this country when a Tory can shout out and say, "Good for them", if they are making more money this year than last year, and that Tory will stand up and vote for controls on wages.


John Horton McDermid: Are they producing more?


Derek Nigel Ernest Blackburn: This is a time, gentlemen, when those on the Tory benches should show understanding and compassion. If we expect those who are making lower incomes to accept lower wages, it is time for all of us to show some compassion and understanding for those who are earning less.


John Horton McDermid: Oh, you sanctimonious pup.
19236

July 12, 1982
Public Sector Compensation Restraint Act


Derek Nigel Ernest Blackburn: I am not trying to be sanctimonious. I am being realistic. The hon. member is embarrassed by the remarks of his colleague. If he is upset, he should rise when 1 am finished and make a speech on this subject because he has all kinds of time, so he should not get upset.


John Horton McDermid: Tell the truth.


Derek Nigel Ernest Blackburn: Today we are in a situation where those who are in dire straits are being told to tighten their belts, to deprive themselves even more, and we all face rising prices and costs. Now we have unemployment insurance and welfare, two things that we did not have in the 1930s. I can guarantee that without welfare and unemployment insurance, we would have soup kitchens and bread lines in many cities across Canada today; in fact, in most cities. Therefore, when we compare the depression of the 1930s with the depression of the 1980s, I believe those who are suffering today are suffering more than those who suffered in the 1930s because they know of the inequity which is being perpetrated and advanced by Bill C-124. It states that all federal public servants will receive an increase of 6 per cent this year, 5 per cent in 1983 and 5 per cent in 1984. Therefore, those at the top will not suffer nearly as much. In fact, they will not suffer at all from the decrease in their income from 1982 to 1984. But those clerks and those who clean out our public buildings, those who do menial work in federal service, will have relatively bigger cutbacks or losses in revenue next year, and they will hurt even more. The bill is simply not fair.
Of course, the primary aim of Bill C-124 is not directed at the federal civil servants. It is directed at provincial and municipal civil servants and the entire private sector. However, the private sector employees have already been hurting. As an example, I could name but three companies in my own constituency, in my home town of Brantford, namely, White Farm, Massey-Ferguson and Trailmobile, which have been suffering from wage constraint for the past year and a half. Their employees work for regular wages for three or four months and then they drop down to unemployment insurance for another two or three months. Then they are back on regular wages when called back for three or four months, and then again they are back on unemployment insurance. As a matter of fact, it has been estimated that if a White Farm employee had worked a full 12 months in the past year, his income would have been roughly $21,000 or $22,000, but with all the lay-offs resulting in the collection of unemployment insurance benefits, his gross income has dropped to about $15,000 or $16,000. That is a wage constraint. Yet the Prime Minister (Mr. Trudeau) says that it is greedy businessmen and greedy workers who are forcing the government to curtail the increase to our old age security recipients. How much nonsense does the Prime Minister think that this side of the House can continue to endure? We will certainly not accept it as an argument. As a matter of fact, it is the spuriousness of the government's arguments with respect to this recession or depression which causes us to refuse to accept virtually anything it now says on that side of the House.
The government goes from one public relations disaster to another. It does not have its financial and economic act together. I say that because in order to find a new solution or way out of this recession, the government has again resorted to a failed program which it attempted in the seventies, the AntiInflation Board of 1975.
Let us look at some of the figures at that time as far as the Anti-Inflation Board is concerned. In 1974-75 also, the government blamed wages for forcing up the cost of living and prices. We know that not to be true. At that time the New Democratic Party said it was not true. It was later proved not to be true, that we were right.
We are asking the same thing today. The government says that wages have to be lowered in order to bring down inflation. We have the data to support our argument that wages are not causing inflation in this country today. It is not a wage-push inflation. The government is resorting to this as a spurious argument, a cheap means of bringing in controls.
Let us look at the failure of the previous controls exercise of the seventies. Whan the Anti-Inflation Board was introduced in 1975, the rate of inflation was 10.6 per cent. The target of the AIB for bringing inflation down was 8 per cent in 1975, 6 per cent in 1977 and 4 per cent in 1978. Those were the targets. Instead, inflation was only slightly moderated. When controls were removed in 1978, lo and behold the rate of inflation was 9 per cent. It was down about 1 per cent after three years of wage controls and some price controls.
Price controls were not equitably enforced. I recall listening to some businessmen and professionals joking in 1976 and 1977 that their incomes were actually going up much more rapidly than the AIB was permitting because they were getting phony job promotions. That was the most common way of circumventing the wage controls at that time.
In 1975 the annual rate of unemployment was 6.9 per cent. During the control period, it moved steadily upward. Controls caused unemployment; 7.1 per cent in 1976, 8.1 per cent in 1977 and 8.4 per cent in 1978. One reason for this is very obvious. When you take money away from consumers through lower increases in pay, you are taking high velocity money out of the marketplace and are depressing demand. When you depress demand, you cut back on productivity. When you cut back on productivity, you increase unemployment. It is a vicious downward spiral. This stupid government cannot get this through its thick head. I do not know how much pressure we in the opposition and the people of Canada have to bring upon this government to make it see some common sense and understand some basic, fundamental economics.
Let us look at some wage settlements under the AntiInflation Board. According to a government paper, wage settlements during the AIB program were brought down from almost 20 per cent in 1975-it was actually 18.6 per cent in the second quarter of 1975-to 7 per cent in 1978. According to a Conference Board study on the AIB program, controls resulted in the loss of several thousand jobs, a drop of 8 per
July 12, 1982

cent in wages and a break in the inflation rate of a paltry 1 per cent. That was over three years. There was a break in the inflation of 1 per cent for a year compared to the rate of rise without controls.
I have just given the facts. We have a model to go by, the Anti-Inflation Board from 1975 to 1978.


David Orlikow: It at least pretended to deal with prices.


Derek Nigel Ernest Blackburn: Bill C-124 does not even mention prices. Even worse, the government and the President of the Treasury Board (Mr. Johnston) do not have the courage to admit that what is putting inflation up today and raising the cost of living, the consumer price index, is interest rates. There is no mention in the budget of bringing down interest rates. In any event, there is no plan to bring them down.
Second, energy and fuel costs are escalating. They will continue to escalate in 1982, 1983 and 1984. At the very time when the President of the Treasury Board is telling Canadians they will be held to a 6 per cent increase, their gasoline, home heating fuel, and hydro bills will all be going up between 20 and 30 per cent. Is that equitable? Is that reasonable? Is it any wonder the President of the Treasury Board is having problems trying to sell his package?
Is it any wonder that the CLC is saying to the government that if it wants their support, that if it wants organized labour to shoulder its share of the burden, then the government has to co-operate, share some of the burden and demonstrate that consumers will not have to pay 30 per cent more for home heating fuel in 1983, 20 or 25 per cent more for gasoline and 25 per cent more to Bell Canada for their telephones. If the government wants to regulate increases, it will damn well have to go after the CRTC and CTC to make sure that freight rates, passenger rates and telephone rates are held.
What is the President of the Treasury Board going to do about marketing boards? Farmers are already hard pressed. They have virtually no cash flow. To follow logically the argument of the President of the Treasury Board for restraint, we should be holding the price of eggs, poultry and all dairy products at 6 per cent. How in the hell is the minister going to sell that to the farmer who cannot afford to buy machinery?
This is why in my city about 7,000 agricultural implement workers are out of work. 1 wish the minister would stand up and try to at least bring some logic to his argument. He cannot do that because it is spurious argument. He and his cabinet colleagues are constantly saying we have to break the inflation psychology. Whatever inflation psychology we had died a year and half ago. The vast majority of Canadians are not buying frivolously. They count every penny that comes into their household. They are worried about meeting their mortgage payments with rising interest rates. They are worried about not being able to pay their gas bill or their home heating bill. They are afraid they will not be able to pay their taxes.
The budget of the Conservative government at Queen's Park brought in by Mr. Miller a few weeks ago will result in at least a 7 per cent increase in municipal taxes in 1983.
Public Sector Compensation Restraint Act
I see that it is six o'clock, Mr. Speaker. I believe I will have another ten minutes at eight o'clock.


The Acting Speaker (Mr. Blaker):: It being six o'clock I do now leave the chair until eight o'clock.
At 6 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Derek Nigel Ernest Blackburn: Mr. Speaker, before we took recess for dinner, I was trying to impress upon the government that its approach to fighting inflation by trying to control public sector wages was the wrong approach. I tried to point out to the government that the major causes of inflation today are basically threefold. The first reason is the very high interest rates or the real interest rates that are running around 8 per cent or 9 per cent above what they should be. That is a major cause and accounts for slightly in excess of two percentage points of the consumer price index. The second is energy taxes, on everything from home heating fuel, natural gas, diesel fuel and gasoline, a 30 per cent increase last year, another built-in increase of 27 per cent in 1982-1983. Again, this accounts for about three percentage points of the consumer price index. And, of course, the third reason is the cost of imports. In fact, imports are becoming so costly that Canadians cannot afford to buy a lot of the imports and that is why we have a favourable balance of trade with the United States-it is not because we are selling them more but because we are importing less. The reason we are importing less is that we have less money and we simply cannot afford it.
In those three areas alone we have at least six percentage points of the consumer price index. If it is running at about 11.5 per cent, it would have us down to about 5.5 per cent of real inflation. It would be as low as the average annual inflation rate in the United States. Instead of this the government once again is looking for a scapegoat. It is very typical of our Prime Minister to blame someone else. The Prime Minister says: "I never made a mistake in government." The Prime Minister never would admit to making a mistake. So, as we did in the year 1975 with the Anti-Inflation Board, again now in 1982 the government says: "It is labour, organized or unorganized."
But this time they cannot get a consensus right across the country. The provincial premiers will not agree, so he cannot invoke that section of the old British North America Act that allowed him to impose wage and price controls in 1975. Instead of that, he is attacking the federal public servants, hoping it will spin off into the provincial civil services and then to civil or municipal services and to the private sector.
When we come to the private sector, Mr. Speaker, we realize that honestly, even there the wages have not been inflationary. As late as 1980, Canada was seventh in hourly compensation, that is, wages and benefits in manufacturing, in

July 12, 1982
Public Sector Compensation Restraint Act
terms of the United States dollars. Belgium in 1980 stood at $13.18 an hour, an increase over 1975 of 100 per cent. Sweden stood at $12.60 an hour; Netherlands at $12.18; West Germany at $11.94; United States at $9.92; France at $9.46; and Canada at $9.06 an hour. That was just five cents an hour above Italy. And yet we hear a lot of right wingers in this country saying, "It is wages; our wages are so high that we are pricing ourselves out of world markets." That is absolute nonsense. I am putting that on the record and I am challenging any Liberal sitting opposite me right now to stand up after I sit down and challenge my statement based on the data I have just presented.
Also, Mr. Speaker, while we are speaking of the private sector I would like to read into the record a notice that was sent to employees in a certain factory in the city of Brantford just last week. These are non-union, salaried employees. They have no organization to fight their battle with management. Management may be right in this case, the company may be in dire straits-I would not be at all surprised. We are talking about legislation wage controls. This is not a legislated wage control: it amounts to a decrease of 19 per cent in their wages. This is what it says:
First, the general increase which became effective on April 19, 1981 will be rescinded. On the other hand, the $52 per month cost of living adjustment which was eliminated at that time will be restored in full, put into the basic salaries. There will be no cost of living adjustments in the future. Second, no salaried overtime payments will be made except as required by law. Third, all salaried employees will work a 40-hour week. This change which affects those salaried employees now working 37.5 hours will be accomplished by the addition of one-half hour to the end of the current working day.
I love this one. These are just salaried non-union workers, supervisory staff and office personnel. Four-minute rest breaks are eliminated. Employees will, however, be permitted time for refreshments to be consumed at their normal working stations. It is almost like reading something out of Charles Dickens in the nineteenth century.
Fifth, the merit increase program will be frozen. Sixth, the current sick-day program is to be eliminated. In its place the following schedule of short-term disability benefits will apply and will represent the maximum available in any 12 month period.
Then it gives a list here of how many days each employee has off. If you worked between one year and three years you would have one week full pay if you are sick.
As far as I know, in the House of Commons if a Member of Parliament becomes ill he can be ill on the first day of a Parliament and never really show up again before his salary is substantially reduced. Here in this factory case, after the employee has been there three years, he or she will get one week full pay if sick.
Life insurance to the amount of $10,000 will be provided for each salaried employee, the opportunity to purchase attractive group rates additional insurance at totals of one time to two
times less the basic $10,000, the annual salary, will be afforded each employee, and so on. That is based on reduced salaries.
That represents a 19 per cent cut in pay. It need not be legislated. The market forces presumably forced this upon the company, which in turn forced it upon the employees. This is the kind of mess that the government has got the business community into.
Specifically, Mr. Speaker, with respect to Bill C-124, the most pernicious and most contentious aspects of it are not really the compensation aspects. What is going to happen if this bill is passed without any changes in committee? For one thing, there will be no collective bargaining for two years on any issues-not just on money matters or income but on any issues. There will be no negotiations on technological change, on job categorization, on work loads, on overtime, on maternity leave, on any affirmative action groups.
We know, Mr. Speaker, that those who will be most adversely affected by this lack of ability to negotiate will be those at the bottom, the women in the federal work force. They are those with the lowest paid jobs, the most menial work, the least skilled. Once again, they are those who will have to take it on the chin. The professionals at $50,000 and $60,000 a year, I am quite sure, are not going to suffer all that much. But those earning under $20,000 or $25,000 a year will certainly be hurt a great deal.
Another matter which really angers me has been raised in the question period. I was absolutely outraged when I read in the newspaper that on the very day the budget came down 473 lawyers in the federal Department of Justice received a 10 per cent increase in pay. They received that increase just a matter of hours before the budget was introduced. As I said in my speech, earlier this afternoon, this government is going from one public relations disaster to another. It is as if hon. members opposite have no experience in government. And to make matters even worse, the inequities in this bill simply bring out their warped approach to the economic problems facing the nation today.
How could hon. members opposite possibly allow 473 lawyers a 10 per cent increase in pay just a few hours before the budget was introduced and then turn around and expect civil servants, who have already settled their contracts, to have their salaries knocked back to a 6 per cent increase when their contracts terminate? This is reprehensible behaviour by the government and cannot be allowed to go unnoticed and unchallenged.
The average Canadian is prepared to accept his or her responsibility in fighting inflation and in trying to get the economy moving again, but the average Canadian is not prepared to allow this government to be deceitful and dishonest in its approach, first, to the causes of inflation and, second to the cure. In the first place, we have a perfect example of a government refusing to admit that it should share a great deal of the responsibility for causing our inflation instead of blaming every other country in the world for it. Second, I
July 12, 1982

challenge the government to accept that the major causes of inflation today are high interest rates, energy taxes and the high cost of imports, and to come clean with the workers of Canada and say: "We appreciate it is not mainly your fault and that there are other causes, but we are asking you to do your share to get the economy going again." If hon. members opposite took that approach, they would probably get a more sympathetic reaction across the country. However, by bringing in Bill C-124 and legislating wage controls, the government is blaming the men and women workers of this country for the mess we are in today.
The most depressing problem of all is what to do when controls come off. Everyone, naturally, will want to scramble to catch up; the economy will get going full steam again and overheat. If we are to have wage and price controls-and I am not saying we should-for heaven's sake, let us bring them in at a time when the economy is overheating. The economy is not over heating right now. It is dying. It is almost stone cold. We have 31 per cent underutilization in our plant and manufacturing sectors. Is that the time to constrict further the money supply in the country? Hardly. This is the time to increase demand and increase spending so that we can increase productivity and get more people back to work. That is the argument I have used throughout the budget debate, and 1 use it again in this debate on Bill C-124.
My time is almost up. 1 am very dissatisfied with the intent of this bill. I am fed up with the all-encompassing aspect of the bill. I am fed up with the deceit of the government, the spurious economic arguments of the government and the reason the government gives for bringing in wage controls. The government is still dodging the major fundamental economic problems facing Canada and individual Canadians.
Until we get the real interest rate down to about 2 per cent, which is 2 per cent above the inflation rate, we will not stimulate the economy. We will not stimulate investment. People will not be prepared to expand their businesses or open new ones. Until we get some control over skyrocketing energy costs, we will have very high inflation, and as long as we have to rely on imports with a 77-cent or 78-cent dollar, again we will have inflation.
The government has addressed the wrong reason for inflation. It refuses to accept any degree of culpability for causing inflation, and it is not really attacking the main causes of it. Instead, it is making scapegoats of workers once again.
When I began my speech before the supper break, I said that the government is wrong in its approach. Just one year after AIB wage controls were removed the government was defeated, and I can very easily predict this evening that one year after these controls are removed, in 1984, the government will be defeated again.
In conclusion, I will paraphrase Shakespeare by saying the following: when is the winter of our discontent ever going to be made glorious summer by a change in government?
Public Sector Compensation Restraint Act


Dave Nickerson: Mr. Speaker, I am pleased to have this opportunity to speak, and I will be fairly brief. I hope I will not take quite as long on this important topic as the hon. member for Brant (Mr. Blackburn) did.
I want to divide my presentation this evening into three parts. Hon. members might like to call the first part a rebuttal of some of the remarks made by the hon. member for Brant. The second part will be a description of the differences in political philosophy between hon. members on this side of the House and hon. members opposite with respect to the problems presently afflicting the nation and the problems which have caused hon. members opposite to bring in Bill C-124. Third, I would like to deal with some of the specifics of Bill C-124.
Before saying one or two unkind things about the presentation made by the hon. member for Brant-of course, not about him personally-I would like to compliment him on his presentation tonight. 1 think it was one of the best speeches that hon. member has ever made, at least from a technical point of view. I have difficulties with some of his reasoning, but he did make some good points.
I think the hon. member summed up the socialist approach to problems when he said quite explicitly that it was deplorable that some self-employed entrepreneurs had made more money in 1982 than they had in 1981. How terrible it had been-


Derek Nigel Ernest Blackburn: I said some people.


Dave Nickerson: -that some people had made more money this year than last year.


Derek Nigel Ernest Blackburn: I said some people.


Dave Nickerson: How shameful it was that some people had done better this year than in the past.


Derek Nigel Ernest Blackburn: I did not say it was shameful.


Dave Nickerson: This just illustrates the socialist ideology that everyone should be reduced to the same level of mediocrity and to the same level of misery.
1 take quite the opposite point of view. Any businessman or entrepreneur who made more money in the difficult times of 1982 than in 1981 deserves to be congratulated. In my opinion people like that have accomplished something. Anyone who has managed to do this must be possessed of a disproportionate amount of good luck or, if not that, a superior ability. Such a person must have worked harder and with more diligence than the very many people who, because of conditions beyond their control, lost money during that period and did not make as much as they did in previous times.
What are the benefits derived from people who, because of the extra effort they expended, were able to do better for themselves and, consequently, for the nation? Who pays the taxes in this country? It is not the people who are out of work and it is not the businesses on the verge of failure; it is the successful people who work hard for what they have. They pay the taxes that enable us to give subventions to the people not as

July 12, 1982
Public Sector Compensation Restraint Act
fortunate. Who is hiring workers in the country today? It is not the businesses on the verge of failure; it is the successful ones that are providing the few jobs that there are. They are paying better wages than those on the verge of bankruptcy. They pay better wages to get the people they want, and that is good. Who are the people making investments so that Canada will be strong in years to come? It is not the people who are losing money but the people who are making money. If the hon. member for Brant had his way, presumably the few remaining successful people would be taxed out of business. They would do what many other Canadians have already done, vote with their feet! They would be forced to leave the country, taking their money and investments with them. If that were the case, everyone would lose.
What we need to do in this time of economic hardship is to give all the encouragement possible to those people who are proving that in difficult times they can still make a go of things. We should not be telling them that they are not wanted in Canada because they are doing a little better than anyone else. Instead, we should be encouraging them and making it as easy as possible for them to do better. That would benefit the government and the citizens of Canada.
This afternoon I listened intently to the speech of the hon. member for Lincoln (Mr. Mackasey), a distinguished member of the House for many years. But I took exception to some of the ideas he presented. He seemed to be saying that what we are engaged in is a zero sum game; that in order for any one group of people to benefit, those benefits have to be extracted from another group. It reminds me of a poker game where people play for so long, and after an allotted time the winnings of some will balance the losses of others. I do not agree with that idea at all. We should be promoting the increase in the general wealth of the country. We are not engaged in a poker game. We should be engaged in the development of the resources and the people of this country.
The hon. member for Lincoln stated that controls are necessary. That is a favourite idea of hon. members opposite and of hon. members to my left. When it comes to controls and the influence that the state should have in the lives of people, their ideas are not very different; they both want controls.
This afternoon members of the NDP pretended to be against Bill C-124. I guess they have to say that because they think they have a lot of political support from organized labour, although I am not so sure; organized labour thinks for itself and does not do everything the NDP tells it to.
I listened carefully to what members of the NDP had to say. They were not saying that they were against controls. They were saying "Controls would be fine if we had wage controls here and price controls there. We just love those controls. Give us all the controls you are capable of." That is the way they really think. The NDP would just love to be welcomed back to the bosom of Beryl Plumptre. I can see that in their eyes, Mr. Speaker.
Let us consider what effect this zero sum approach and consequent controls have had over the lifetime of Liberal governments for 30-odd years. They are the reason we are in the state that we are in today. This is not something brought about by two or three months of action or inaction; it has developed in this country as it has in many others, as a result of policies pursued for decades.
Social services are a good example of my point, Mr. Speaker. Everyone in this House wants to ensure that people who are not so well off as some others get a break. I do not think that anyone in the House would be against that idea, although we have different approaches on how to accomplish it. Very little good has come from the leftist policies over a 30-year period with respect to increasing the incomes of people who receive the lesser proportion of income in the country. In 30 years there has been no significant difference in the proportion of income those in the lower 10 or 15 per cent of the population receive. The figures provided by the Welfare Council of Canada and similar organizations show that the only appreciable difference is that 30 years ago a larger proportion of the income of the lower 10 or 15 per cent of the population came from wage employment. Today, the biggest proportion of their income comes from government transfer payments. The wage component has been reduced.
In making this rather minor change we have built up a huge administration to handle the various transfer payments. We have accomplished a transfer from productive Canadians not to the poorer sector of the economy but to the administrative class, that is, government. The administrative class has a vested interest in controls. There is nothing that would make them want to change the system.
1 believe in the principle of expanding wealth, Mr. Speaker. If we are to generate the expanding wealth of the nation we do not need more controls put on society by the state, but less controls. There must be more freedom for individual initiative. That is the direction we must take, Mr. Speaker. There must be a reverse policy to that which has occurred in Canada and in many other countries over the last 30 years.
One of the differences between the depression of the thirties and the Liberal depression of the eighties must be kept in mind if we are to devise solutions to the problems facing us today. In the thirties, the depression was associated with chronic deflation. The prices of farm products, manufactured goods and labour were continually going down. In those days, with that type of problem, it is quite possible that it might have responded to the policy of deficit spending, printing more money to prime the pump. I have my doubts as to whether that really worked in the later 1930s, but at least it made sense to make the attempt because it might have resulted in beneficial effects. However, what has happened is that after times got good again the government, instead of taking more by way of taxes to build up reserves so that when times became bad again, when the business cycle had turned full circle, it could pump those funds back into the economy-which 1 understand
July 12, 1982

was John Keynes' hypothesis-the government said, "Look, we have run up these deficits, we have printed money during bad times and we should continue to do it through good times to make those good times even better." That is what we have been doing for decades. It is like a drug addiction, you keep having to have more and more of the drug of deficit spending and consequent inflation in order to get the same kick. We have gone about as far as we can go now, and in the Liberal depression of the 1980s we cannot use that same technique anymore. We have such a high debt now and we are running such high deficits-a projected $20 billion this year and probably higher-that we cannot print more money to bail ourselves once more out of the problems that this government has got us into. We have to think of different solutions to that problem because the Liberal depression of the 1980s is one associated with chronic inflation, not the deflation of the 1930s.
As 1 have said before, in the 1930s it made sense for governments to try new initiatives to get the world out of that situation, but in the present situation I think that government is more of a hinderance than a help. The government is already too far involved in society, in particular the economic aspects. If we are to cure this problem, it is not by more deficit spending, more inflation and more controls, but by the very reverse.
I think only the private sector of the economy can get us out of the mess this government has got us into.
As to Bill C-124 itself, Mr. Speaker, I personally do not like it. I think the government, on which should fall the responsibility for this economic situation, is asking Parliament to bail it out. Public service salaries are not really a matter for legislation. Parliament should not be asked to dictate what salaries and terms and conditions of employment should be. That is a matter which rightfully belongs, in my opinion, to the executive branch of government. It is their baby, Mr. Speaker. But what has happened? The President of the Treasury Board (Mr. Johnston)-and I do not condemn the person presently holding that office because it has happened over many years- and his staff, his senior negotiators, have failed. They have allowed things to get ahead of them. They have not exercised the proper restraint in their collective bargaining. So what they are doing now is admitting failure. The government is saying, "Look, we cannot do the task that was rightfully ours." It is now coming to Parliament and saying, "We have entered into all these agreements, and we should not have because we cannot keep them. Please, Parliament, save us from ourselves by passing legislation to undo the wrongs we have done."
I think, Mr. Speaker, that Bill C-124 is a con job. All the policies that go with it, the so-called budget of June 28, are con jobs. It is a con job when you ask business and labour to co-operate in the fight against inflation and at the same time the government is running up a deficit of $20 billion, possibly more, which will guarantee that inflation will continue into the foreseeable future. The likely result of this type of policy is an even greater portion of the national income being transferred from labour and business to government. It is a con job which will result in even more interference by government and a
Public Sector Compensation Restraint Act
greater proportion of the gross national income being spent by government. This will lead to a worsening of the problems, it will not help to make them better.
I dislike the blanket approach of Bill C-124. I think proper management, a function of the executive branch not the legislative branch, requires flexibility. Each task which must be done has to be judged on its own merits. If this were done correctly, perhaps we would find there should be increases given in some places, and reductions in other places. The government should keep in mind the market forces as they affect the rest of society and perhaps use that knowledge to determine what public service salaries should be. But the blanket approach of 6 per cent this year and 5 per cent next year will not increase the effectiveness or fairness with which the Public Service of Canada is treated. I think one of the things we could do to increase the efficiency of the public service is to rid ourselves of many of the levels of command which have been built up in the last 15 years or so. It would be better if many of these levels were reduced and there was much closer association between, say, the deputy minister and the people in the public service who are actually providing the services. The bill has been gone into by many of my colleagues and members on the other side. They have come up with a number of very specific problems contained in the bill. The inequities between CN and CP employees, the question of indexed pensions for public servants when the premiums have already been paid and the question of non-wage negotiations, will undoubtedly be dealt with in committee.
In conclusion, Mr. Speaker, I want to say that as far as I am concerned the whole package means one thing: the Liberal government has failed, and the public no longer has any confidence in this government. What we want, sir, is not wage or price controls, or any other control. What we need in this country is a Conservative government which appreciates the way the economy operates.


Mr. John Gamble (York North):: Mr. Speaker, I will not take much time in dealing with Bill C-124. However, I did wish to say that this is one of those rare occasions when I find myself in a position to support the government's intentions as expressed in this legislation. It is a rare occasion indeed because, for the first time since the election of 1980, I find myself in that position. I intend to speak in favour of the bill. I intend to vote in favour of the bill. I should like to explain some of the reasons and at the same time state my reservations with respect to this issue.
It is comforting that I could follow one of my colleagues in the House who has spoken very dramatically in opposition to this piece of legislation, and for very valid reasons. The difference of opinion and difference of intention are unique to this side of the House. While I am convinced that I have colleagues on the other side of the House who feel similarly split with respect to their views, I can assure Mr. Speaker that when the division bells ring there will not be a single member on the

Public Sector Compensation Restraint Act
government side, who may feel as the last speaker felt, who will vote against the legislation. Unfortunately that circumstance has weakened very substantially the principles upon which the House has been based. The absence of free expression of legitimately-held views by members of the House has led in many circumstances to a great deal of disrespect that the general public has for the way in which some of our functions are performed.
Let me simply say with respect to Bill C-124 that it is divided basically into two parts. There are three, but the two essential ones are those which deal with public service remuneration and those which deal with the remuneration of Members of Parliament, Senators and judges. If I may deal with the second part first, today we are faced, as Canadians responsible for the passage of legislation which will govern the affairs of our fellow Canadians, with a very serious responsibility. The country as a whole is suffering. There does not pass a single day while I am here or while I am at home that I am not confronted with genuinely expressed anguish from some of my constituents who are suffering from our economic troubles.
Last Friday before I left, I received a call from a constituent who until two weeks ago had been operating a business which employed 24 employees. There are now 12. Those 12 people have families, responsibilities and homes. They have built a future in my riding, as have 1,300,000 Canadians across the country, and now find themselves without genuine employment. For a period of about a year they are entitled to take what amounts in many cases to half remuneration in terms of a payment from the unemployment insurance fund, and after that has expired, they become recipients of welfare until that too expires.
This is no time for Members of the House to be insulated from the problems which exist in the country. For that reason, 1 find it incumbent upon me to show at least some personal restraint, and I accordingly applaud the government for having introduced a piece of legislation which bears down heavily on Members of Parliament and Senators, since we are the only group under this bill who will actually take a reduction in remuneration. It is appropriate because it is here, quite frankly, that the responsibility for the economic morass exists. Collectively we are responsible-on this side for permitting that side to ever form the government, and that side for creating the mess in which Canada finds itself. Accordingly we should not benefit from inflation which the government creates. After all, it is only with respect to a reduction in expectations for the future, subject, as I have said to the effect of an existing reduction in the actual salaries paid today to Members of Parliament and Senators. Others who are to benefit from the relative security of their positions because no job is secure-and now I wish to pass on to the first group affected by this legislation-in some way should be called upon in a fair and reasonable fashion to bear some of the burden. It is a small burden indeed that is imposed upon them. They are asked simply to take less of an increase-a 5 per cent or 6 per cent reduction in the increase which effectively would operate today, trying their known increases to 6 per cent and 5 per cent over ther next two years respectively.
July 12, 1982
I will not deal at this stage with the rather complex way in which the bill is drafted, setting out the year of commencement, the termination of the years and the way in which contracts currently in existence are to be protected until they terminate. But the principle is good. I seriously doubt that if one were to ask the average public servant in Canada-and I am not talking about the senior bureaucrat-"Do you, Sir, feel it appropriate, having regard to the special circumstances of your employment, to the fact that your employer will never go bankrupt officially, and to the fact that your fellow citizens cannot even find jobs, that you be called upon to restrain your demand upon the economy?" I am convinced that the average public servant, being reasonable, will respond in the affirmative. 1 know that there will be the Jean-Claude Parrots, interested in agitation, interested in creating conflict-and to that extent 1 suppose he finds good company in the Prime Minister (Mr. Trudeau)-and interested in promoting disharmony, who would love to generate that kind of motivational action, dissent and conflict among public service unions. 1 seriously doubt that the average rank and file member would follow the call because they recognize their privileged position in society.
Quite frankly, I have very little sympathy for the senior public servants who are similarly restrained, if we recall the fact that they were not very harshly treated by the bill, having regard to the fact that some of them managed to get an increase on June 17, others as late as the day the budget was introduced imposing this restriction, and that others, being employees of ministers, may indeed-and the ministers requested have failed to supply this information-have received a 10 per cent increase in remuneration as recently as March and another one as recently as June 17, which is not altogether surprising. These are the very people who should share the reduction in renumeration which is provided for Members of Parliament by this bill because, quite frankly, every member of the House, as well as the ministers, knows that the people who have established the policies of this country and who have led us to financial ruin are the highly paid bureaucrats who always look after their own best interests.
My colleague, the hon. member for Provencher (Mr. Epp), has made an excellent suggestion that it would be appropriate if these order in council appointees were changed when the governments change.


David Orlikow: Why did you not do it?


John Albert Gamble: I am asked by a member of the NDP, who would certainly do it because they have made all NDP appointments, why we did not do it. I urged those who had an opportunity in 1979 to, in fact, do that very thing. Having regard to the lessons we learned in the past, very painful lessons, I am convinced that the next time the opportunity comes we will implement the suggestion made by the hon. member for Provencher. If this were done we may have had a
July 12, 1982

fresh new group who, recognizing that their position was dependent upon the government, may have offered advice which would have helped sustain governments in power and which would have been beneficial to the general public. I must say that the current group of bureaucrats have expended their usefulness, a fact well recognized even by the Minister of Finance (Mr. MacEachen) who, in drafting the budget which gave rise to this piece of legislation, seemed to have very conveniently, fortunately for him, omitted to consult some of those bureaucrats.
I am rather amused by the provisions of the bill which would have the effect of prohibiting strikes. I would remind the House that when I introduced a bill of my own as a private member's bill last year which would have dealt with that issue but only as far as strikes in essential services are concerned, members of the government in debating that bill made light of the suggestion. However, the government is now in a position less than a year later where it would implement even more stringent prohibitions against normal labour activities among public servants. I believe that the general public would respond positively to legislation prohibiting strikes in essential services.
I do not believe that the general public is prepared to deal with the public service rendering non-essential services in the more stringent manner that the government now apparently believes ought to be the case.
When the government had an opportunity to take intelligent steps toward recovery the government and its backers refused to do it. Now, when the time has gone it looks upon the public service as an appropriate whipping boy for its own failures. However, it is significant that it has tried to do something. Personally 1 do not believe that what it is attempting to do will remedy the problems of inflation in Canada, but it may have a desired psychological effect.
The Prime Minister likes to talk about frightening the hell out of Canadians. I prefer to think that our severe economic difficulties have made Canadians, who are reasonable people, convinced that they each have a part to play in the regeneration of our economy.
I have indicated that I believe that the public service will respond positively. 1 also believe that this may have a beneficial psychological effect upon labour movement negotiations. We know that the UAW is about to enter into rather intricate and important negotiations with the automobile industry. We also know that our automobile industry in Canada is suffering. The Japanese, as a single source of imported automobiles, now occupy 25 per cent of the Canadian market with their automobiles. I believe that all Canadians have a responsibility and that they will positively respond to that responsibility. This is the extent of the effectiveness of this bill.
Without the co-operation of the general public, wage restraints and the $100 million to be saved next year and the $800 million the following year are but a drop in the proverbial bucket in which the government has sprung so many leaks.
Another cause of our dilemma has been government spending. Government spending currently exceeds $90 billion per year. Part of this has been brought about by the unfortunate economic situation in Canada. But we must ask ourselves how
Public Sector Compensation Restraint Act
this situation developed. It developed because of the government. In the heydays when the sun was shining and the treasury was full, the ministers of the government followed the general practice of squandering the heritage of Canadians. They are now trying to make up for it. That squandering cannot be made up as one would desire.
The interest charges on the national debt alone exceed $17 billion as anticipated by the budget papers delivered on June 28. If we cast our minds back, that figure was almost twice the entire national budget when the present Prime Minister came to office, pledging when he came that he would cut the spending on the public service. As my colleague says, we have heard a more recent comment that government spending would not exceed the growth in the GNP. That is the most ludicrous performance that we have witnessed. The last budget to which we had reference in November projected $75 billion in expenditures. We are now looking at approximately an additional $15 billion in expenditures.
This does not include everything. Our economic performance has been a disaster. The government disclosures have only been half of it. The public accounts disclose statements such as $1 in a contingent liability fund to cover the liabilities of some of the Crown corporations, some of which have liabilities exceeding $1 billion. In this respect I am thinking of Canadair with liabilities of $1,400 million. Quite frankly, this company would not exist were it not for the government guarantees. That liability is disclosed as having a value of $ 1.
The government has run wild with the public purse. It is endeavouring in this small, minuscule way to recover some of its credibility. The government is to blame for the circumstances which all Canadians are suffering from. It is to blame for the heritage of debt which will be carried by our children and grandchildren and for as long as anyone alive today will be able to forecast. That is the great bequest of the Liberal administration to future generations. That is robbery. It has pillaged the pockets of the children and the unborn of this nation. It has tied them down with burdens and provided nothing for the days of emergency such as we are in now. It has squandered the heritage which was left to us when we were young.
I support the bill. It is the only sensible piece of reasonable effort that I have seen from the present administration. It is regrettable, unfortunate and lamentable that this is all that the government has to offer. The Minister of Employment and Immigration (Mr. Axworthy) stood in his place on Friday and suggested that the public follow the lead of the government in its restraint program. If there is an average Canadian who is still employed and follows that lead of the government, restricting his income demands to 6 per cent and increasing his expenditures by 20 per cent, that individual will be bankrupt. The only thing that distinguishes the government from the individual is that it is able to look upon every asset that the public in Canada possesses and say, "I can call upon the assets of those Canadians who have saved them, who have inherited

July 12, 1982
Public Sector Compensation Restraint Act
them and who have worked for them, and I will use the assets to pledge against the debts of our ludicrously stupid administration". No one can follow the lead of this government on any road other than the road to insolvency.
Last week the Minister of Transport (Mr. Pepin) stood in this House and, when speaking for the Prime Minister in his absence during the question period, said that the government shares the views of both J. J. McDonnell, the former auditor general of Canada, and Ken Dye, the present Auditor General. I wonder to which comment he referred. Which one of the remarks made by these gentlemen was similar to the view of the Government of Canada? Was it the remark of Mr. Dye when he said, "Our nation is on its knees." Or was it the remark of J. J. McDonnell when he said, "The country is going down the drain." I wonder. Needless to say, we did not have any particulars.
1 question whether the people who occupy the front benches opposite know what ills they have wrought upon Canadians. I wonder whether they are prepared to do anything about it. I am anxiously looking forward to some legislation of the kind that the nation demands. I am looking forward to the day when that government will have the courage to admit that our businesses have failed and our unemployment has increased, because we, having ruined the economy, and having recognized the close relationship between interest rates which must be paid in Canada and the value of the Canadian dollar, have employed high interest rates to keep Canadian dollars at home and preclude Canadians and others from selling them in exchange for more attractive U.S. currency. Will they now admit that it is a farce that is perpetrated every Thursday, much to the agony of Canadians, wherein 90-day treasury bills establish the rate fixed by the Bank of Canada, which is then, in some magic way, used as a signal to the chartered banks to increase interest rates? The chartered banks do not borrow from the Bank of Canada either on Thursday or at any other time. All this government has done has been to shift the responsibility for interest rates directly from the Minister of Finance to the Governor of the Bank of Canada. That responsibility is one that has crippled not only small but also large businesses in Canada. That interest rate burden cannot continue to be borne by either industry, business or home owners. It is certainly true that the value of the dollar would be greatly enhanced if the government could cut its expenditures and if it did not have to rely upon the artificial fixing of high interest rates to maintain its credibility. Who, indeed, would want to invest in Canada when the government has done its best to drive Canadian business out of the nation and when it has done its best to add tax burden upon tax burden? In the November budget there was an increase in taxation. In the June 28 budget, there was a further increase in taxation. Curiously enough, both increases were equivalent to $1.3 billion. The voracious appetite for additional taxes, added to the Canadian ownership charge, the hidden charge on petroleum purchases, the shifting of the excise tax to an ad valorem basis, the shifting once again of the manufacturers' sales tax to a wholesale tax to gain further and further revenues, were all designed to leave less and less in the hands of the
consumer and the production sector of the economy and to put more and more in the hands of the government.
But the government has not shown any inkling that it has learned its lesson, that it must indeed pare its own expenditures. We on this side of the House have begged the government to refer the estimates to a special committee of the House for examination and reduction. There is not an hon. member on the government benches who does not believe that somewhere in those estimates is a fund that is wasted. We all know that they exist. Who is better able to take an axe, to take a chainsaw and to cut through that dead wood and actually reduce the expenditures of this government than hon. members of the House of Commons?
We have urged the Prime Minister and the Minister of Transport, when acting for the Prime Minister, to clearly show that the government's intentions are noble and that they will in fact do something positive to let the nation know that we are about to accomplish something, namely to accomplish the reduction of our own extravagance in this place. But it will not happen. They are too proud. They have never made a mistake in their lives. They are afraid to admit their errors.
There is not a Canadian who does not recognize that errors have been made. They look to those people on the government benches to stand up and say, "I insist upon cutting out the waste. I insist upon giving you good value for your money." Until that happens, the effort we go through here today with respect to this bill is a waste of time. However, as small as it is, as insignificant as it is in the total scheme of things, although it is deficient and inadequate, I feel compelled-since it is the first time and, having regard to the conduct of this government, it is probably the last time that I shall ever see anything worthwhile from it-to vote for it.


David Orlikow: Mr. Speaker, we have just witnessed an interesting thing, indeed, I would say, an amazing thing. We heard the Conservative hon. member for the Western Arctic (Mr. Nickerson) say that he would vote against this bill and we have just heard the Conservative hon. member for York North (Mr. Gamble) telling us that he will vote for the bill. This is one of the most important bills that this Parliament, or any Parliament in recent years, has had to vote on because we are debating what is supposedly the establishment of an incomes policy. Surely the people of Canada have a right to expect hon. members in the official opposition to have some principle, some consistent ideas, to be either for this or against this. There are only two possibilities, to explain the differences between the two members. Either they do not have a policy or they do not understand the purpose of this bill. I do not know whether or not they will support it. The alternative is to vote on both sides. In this way they can satisfy all the people of this country, those for it and those against it.
The members of our party have no doubts about this bill. We would support an incomes policy that is fair to all the
July 12, 1982

people of Canada. We cannot support an incomes policy which restricts only wages and salaries and does nothing about those who receive their incomes from investments, shares, property or any other way. We are going to vote against this bill.
I want to spend a few moments on some of the comments by the hon. member for Western Arctic. He said that the NDP always supports controls. That is not true. As I already indicated, our position is now as it was in 1975, that we could not support any program which did not deal fairly and equitably with all Canadians. That is why we opposed the AntiInflation Board. We said it would control and restrict wage and salary increases but not the incomes of the self-employed or those who derived their income from investment. It did not control prices. I will deal with that later.
The hon. member for Western Arctic was not here in 1975. He has a conveniently short memory. In the 1974 election it was the Conservative Party led by Mr. Stanfield which proposed that, if elected, it would institute a system of wage and price controls. Our party opposed it and pointed out that it would not work. The present Prime Minister (Mr. Trudeau) won that election by opposing wage and price controls.


Allan Bruce McKinnon: Mr. Speaker, I rise on a point of order. I hate to stop the flow of rhetoric, but I am sure the hon. member for Winnipeg North (Mr. Orlikow) would not want to mislead the Canadian public about their memories. The fact is that we did not have an election in 1974. We had it in 1975.


Some hon. Members:: Oh, oh!


David Orlikow: Mr. Speaker, the election was in 1974. As 1 was saying, the Prime Minister won that election by saying he would not implement wage and price controls. In 1975 he did exactly what he promised he would not do.
The hon. member for Western Arctic said that we need to give successful businesses the opportunity to do better. The fact is that the profits of Canadian corporations are down over 40 per cent this year over last year. The major corporations which were always the most successful have borrowed billions of dollars from the Canadian banks for the purpose of takeovers. They promised to pay the interest on those short-term loans. Many are now unable and are not paying that interest. Many of the largest mining corporations are now paying from 75 to 150 per cent of their total cash flow in interest payments on loans. They are hanging on by the skin of their teeth.
The hon. member for Western Arctic was critical about the $20 billion deficit. We all are. However, he did not ask the reason for the deficit. He did not ask why it had almost doubled in the last six months. If he were really interested and had looked into the matter, he would realize that the deepening recession has meant that unemployment has risen by almost 50 per cent.
There are now 1,300,000 unemployed who are no longer paying income tax. They cannot buy the goods they used to so they are not paying the sales tax. Because business is down, the corporations are not paying as much in taxes. Workers who
Public Sector Compensation Restraint Act
used to pay taxes are now collecting unemployment insurance benefits or are on welfare. That is why we have a deficit.
Both the hon. member for Western Arctic and the hon. member for York North criticized the deficit, saying that it had to be cut. However, they did not say how it should be decreased. We can see how the President of the United States could have got that country's deficit down if he were not increasing so substantially their military expenditures. He was getting down their deficit by cutting back on medicare, medicaid and hospital insurance, none of which are as good as the programs we have in Canada today. He also wants to cut back on social security. I wonder if the hon. member for Western Arctic wants us to cut back on old age pensions. The President is cutting back on assistance to universities. Those kinds of cuts would get our deficit down. If that is what the Conservatives want, they ought to say so.
I was surprised to hear the hon. member for Western Arctic compare, I thought favourably, the thirties with today. In the thirties there was no unemployment insurance, pensions, real welfare system, medical insurance or hospital insurance. The people suffered. Many starved. Now we have in place-not as much as we should have in my opinion-what President Reagan calls a safety net, the kinds of programs I have talked about. If I understood the hon. member for Western Arctic, and this is not a criticism but a statement of fact, he has a very high percentage of people in his constituency who are unemployed, who need assistance from the government such as unemployment insurance and welfare. I say that the hon. member for Western Arctic was not speaking in their interest when he made the kind of remarks he made this evening.
Let met turn now to the bill we are considering. What is the purpose of this bill? I read very carefully the speech last Friday by the President of the Treasury Board (Mr. Johnston). If I understood correctly, he was arguing that inflation is caused by high wages and high wage increases which workers have been able to negotiate, and that it is these high wages and high wage increases which have led to the present inflation crisis that we suffer.
Wage increases in the past few years have been less than the increase in the cost of living. How can we blame Canadian workers for inflation when their standard of living, their take-home pay has been reduced in the last five years rather than increased?
We are told that in order to get inflation down, we have to limit wage increases. The government proposes that we start with federal public servants and that we restrict their wages increases for the next two years to 6 per cent the first year and 5 per cent the following year. The President of the Treasury Board compared unfavourably the wage increases which Canadian workers have been getting with wage increases in the United States. He pointed out that their rate of inflation is 6V2 per cent and wage increases there are about 7 per cent. With 6'/2 per cent inflation and 7 per cent wage increases, workers in the United States, at least those who are working, are able to maintain their present standard of living. What the government is proposing for our public servants is that, at a time

July 12, 1982
Public Sector Compensation Restraint Act
when the rate of inflation is running at 11.6 per cent, their wages and salaries should be restricted to 6 per cent this year. That means a reduction in their real standard of living of over
5	per cent.
Let us keep in mind, Mr. Speaker, that bad as that is, despite the fact that the rate of inflation in the United States is down now substantially, a week ago interest rates in the United States were running at 17 per cent. We have been told that if we get the inflation down, interest rates will come down. That has not happened in the United States and it would not necessarily happen here.
Unemployment in the United States is running at about 10 per cent. Many of their basic industries-steel, auto, construction, housing-are dead or dying. We are told that if we bring wage increases down to 6 per cent this year and 5 per cent the next year, inflation will come down. In answer to a question last week the President of the Treasury Board suggested that if we did this, by this time next year inflation would be down to a
6	per cent rate. Mr. Speaker, that is not the experience we have had. I see the Minister of Transport (Mr. Pepin) is here. If I give the facts which I am going to give about the AIB period incorrectly, I am sure the minister will take the opportunity to correct them.
At least in the 1975-1978 period, when we had the antiinflation experiment of that time with the AIB, we were supposedly to get wage and price control. Wage increases were to be restricted, but the rate of inflation was to come down from 10.5 per cent, which it was in 1975, to 8 per cent the next year, to 6 per cent the following year, and to 4 per cent the year after. Mr. Speaker, that did not happen, of course. Sure, wages were restricted, salaries were restricted, there were limits, but there were also exceptions. The minister knows about them. There were no real attempts to put a cap on selfemployed people. Doctors, lawyers, architects and engineers did very well, but wages and salaries were controlled. What happened to the cost of living? There was a decrease, a fairly marked decrease in the first year or year and a half. But by 1978, when the rate of inflation was supposed to come down to 6 per cent or 4 per cent, the rate of inflation was running at 9.5 per cent.
This time, Mr. Speaker, in this proposal, we are not even pretending that we are going to do anything about prices. This time we are going to depend on goodwill, on good-heartedness. The Minister of Transport shakes his head, indicating that I am not correct. I would love to see him get up after I have finished speaking, to show me where I am wrong.
There is no evidence that the private sector will voluntarily restrain itself on prices. Of course, at the moment prices are coming down because the sales are not there. We cannot give away some of our products. Copper prices, nickel prices, zinc prices, are right down to the lowest point to which they have been, some of them, in this century. We cannot sell these products, not because the wages are too high or because prices were too high a year ago or two years ago. We cannot sell, Mr. Speaker, because the traditional purchasers in the United States find that their economy is even worse than ours and they cannot buy the things we used to sell them. They are not producing, they are not selling cars, they are not building homes. Homes are not selling, so the lumber and the nickel and the iron ore and all the other products which we used to sell to the United States are not being sold.
We are told that the government has directed the regulatory agencies to keep their price increases down to 6 per cent. What kind of cynical nonsense is that? The Government of Canada made an agreement with the Government of Alberta and the then Government of Saskatchewan, so that the price of oil went up $2.25 a barrel last July 1. It will go up $4 a barrel on January 1, 1983, and will go up another $4 a barrel on July 1, 1983. That is an increase of over $10 a barrel. Every one-dollar increase in the price of a barrel of oil adds 0.5 per cent to the cost of living. So we are looking at an increase of 5 per cent in the costs of living by next summer, just because of the increase in the price of energy.
When the Prime Minister was asked by the Leader of the New Democratic Party to try to get the producing provinces to forgo all or part of the agreed-on price of a barrel of oil, he said, "We cannot do that, we have an agreement with the producing provinces." It is interesting that we cannot change an agreement with the producing provinces on the price of oil, but we can bring in special legislation, which we are discussing now, which will wipe out agreements signed in good faith, after a good deal of bargaining, and made under the laws of this country, between the public servants and the Government of Canada.
What does this increase in the price of energy mean? I ask the Minister of Trransport, if the price of diesel fuel goes up 30 per cent by next July, how in the world can the people of Canada believe that freight rates will not go up by more than 6 per cent? The railways will not be able to absorb that kind of increase in oil prices without increasing the prices they charge for moving freight. How will the airlines not pass on that increase of 30 per cent in fuel which they use on the aircraft to the airline passengers? It will be more than a 6 per cent increase in the cost of travel to people travelling by air, by bus, by rail or by automobile. It has to be, if the price of gasoline goes up by 30 per cent. Telephone rates are going up. Bell Canada has asked for a 20 per cent or 30 per cent increase, as has B.C. Tel. Hydro rates are going up in every province because hydro rates relate to the cost of oil.
What about some of the products the prices of which are set by regulatory boards? We control the price of eggs, we control the price of chickens, we control the price of turkeys, we control the price of butter. In the production of those things, the same increases must occur as also for almost everything else which the farmers produce. Energy makes up a very large percentage of the cost of produciton. If the price of energy goes up by 30 per cent, as it will under the agreement between the federal government and the producing provinces, the price of the food which is produced by Canadian farmers will have
July 12, 1982

to go up; and it will go up by substantially more than 6 per cent.
As other speakers have already said, over 1.3 million people are unemployed. As I pointed out a few moments ago, that is an increase of 50 per cent over the number of unemployed this time last year. Some of our major industries, the backbone of Ontario-manufacturing, our auto industry, our steel industry, the mines and the forest industries-have suffered major layoffs. Why? Is it because wages have been too high? That is nonsense. The lay-offs have taken place because the economies of the industrialized world and the economy of Canada are in a recession, and so we cannot sell our nickel, our copper, our zinc or our lumber. This is not because the wages of workers are too high. We cannot sell them because there is no market, and there is no market because of the recession created, to a large extent, by the high interest rate policy of the U.S. government, a policy which is followed by the Canadian government on the advice of the Governor of the Bank of Canada, who could have been fired. In fact, he did not have to be fired. I think his term of office was up when the Conservatives were in government. If the Conservative government had had the sense to follow a suggestion the hon. member for Provencher (Mr. Epp) has recently made-that is, that there should be a major turnover of senior public servants when a new government takes over- perhaps we would have had a different Governor of the Bank of Canada who would have recommended different policies. I am not sure, because I note with interest that the man appointed deputy minister of finance by the Conservative government, who was fired as soon as the Liberals came back to power-


Mr. Clarke:: With your help.


David Orlikow: -is now a member of the blue ribbon committee which the Minister of Finance (Mr. MacEachen) announced the other day would be giving him advice. There does not seem to be much difference between these two breeds of cats.
As I have already indicated, because of the recession and because of the mistaken high interest rate policies of this government, some of the major corporations in this country are almost bankrupt. According to a recent issue of the Financial Post, some of them-about 15 companies were listed-are paying between 75 per cent and 100 per cent of their total cash flow in interest payments. There certainly is an understanding between the Government of Canada and the banks that these big corporations cannot be allowed to die. They cannot be allowed to go bankrupt like 10,000 small businesses will go bankrupt this year. These corporations will not be permitted to default on their obligations as thousands of Canadians will. Those Canadians must give up their homes because they cannot meet their mortgage payments.


Ian Deans: The more you owe, the safer you are.


David Orlikow: My colleague, the hon. member for Hamilton Mountain (Mr. Deans), points out that the more you owe, the
Public Sector Compensation Restraint Act
safer you are, which reminds me of the observation made many years ago by Lord Keynes that if one borrowed 100 pounds from a bank in Britain and could not pay it, that person was in trouble, but if a corporation borrowed one million pounds and could not pay it, the bank was in trouble. The bank could not let that corporation go down the drain. That is exactly what is happening in Canada.
If we want to get our rate of inflation down, as the government says we have to do, then the government has to do something about interest rates. However, there is nothing in this bill and there was nothing in the budget in June which gave any indication that we are likely to get our interest rates down.
Interest rates are likely to stay high or go even higher because when the U.S. government has to go to the market to borrow the $140 billion or $150 billion for the deficit it projected this year, it will drive interest rates up because there will not be enough investment money around to meet the requirements of both the American government and the private sector in the United States. When that happens, our interest rates will go up again.
What high interest rates have done and what they are still doing is to destroy any hope of industrial expansion. They have destroyed the construction industry. The housing industry in this country is dying. The purchase of farm machinery, automobiles and house appliances has dropped to a level we have not seen since the 1930s. Business bankruptcies are up by almost 40 per cent over last year. We are likely to see 10,000 business bankruptcies this year. Farm bankruptcies are up 60 per cent. What is alarming is not just that the number of bankruptcies of businesses and farms is up; what we are seeing is farms, which have been owned by the same families for the last 100 years, going bankrupt or selling out because they cannot meet the financial demands. What we are seeing is business, which grew and survived the great depression of the 1930s, going bankrupt in the recession of the 1980s. Our plants are working at less than 70 per cent capacity. It is pretty obvious to anybody who has any common sense and looks at things realistically that if we want to get our plants working to greater capacity and if we want to get more people back working in our plants, we should be increasing the purchasing power of the Canadian people so that they can buy the products which Canadian plants can produce.
Instead of doing that, what are we doing? The government proposes to reduce the purchasing power of Canadians by $2.6 billion. That is twenty-six hundred million dollars. How is the government going to do it? It is going to do it by capping the indexing of old age pensioners-those who already have so little-by deindexing income taxes and by capping and limiting the wage and salary increases of federal public servants to 6 per cent this year and 5 per cent in the following year. That will not bring down the rate of inflation. It will simply increase the number of unemployed in this country. Capping and limiting the wage increases of the 6 per cent of the labour

July 12, 1982
Public Sector Compensation Restraint Act
force in Canada which is employed by the federal government, by Crown corporations and by the armed services will not deal a body blow to inflation, so obviously the government is sending a signal to other jurisdictions. Obviously the government wants the private sector to follow suit. Obviously the government wants other public sectors to follow suit. In the private sector, where there are unions and where there is real collective bargaining, unions do not need to be told that they cannot demand from their companies more than their companies can afford to pay.
I wish the hon. member for York North would talk about labour negotiations with some knowledge and some understanding rather than with the prejudices he always brings to this kind of discussion. He implied that if workers are militant in their demands, if they go on strike occasionally and do not want to settle for less than the increase in the cost of living, this is the fault of their leaders. When he makes that kind of statement he shows how little he knows about the real world of workers and their unions. In recent years there has been case after case where union leaders have negotiated agreements, recommended them to their union, and the members have told them the agreements are not good enough. That happened twice in Sudbury. I am not saying that the workers were right or wrong; I am simply saying that they exercised their democratic rights. They were not led on or misinformed by their leaders. The hon. member for York North should find out more about the subject before he makes such statements.
Just as workers in the private sector will not voluntarily agree to a restriction on wage increases of less than they think industry can afford, neither will workers in the public sector employed in the provincial and municipal governments or the universities, schools and hospitals. The federal government would only see that restriction on wages and salaries if the provincial governments would pass legislation not only for their own employees but for those in the municipal and other publicly operated sectors of the community. Not many provinces will do that.
In my view this bill is a public relations operation, and a cynical one at that. The government knows that the public blames it for the economic disasters of high unemployment and high inflation. But the government has no programs to deal with inflation and unemployment. It knows it has to look as if it were doing something, however, so it proposed controls for the public sector.
Some people feel that public employees are all guaranteed lifetime employment, which is not true, and that they are all highly paid. They hear about deputy ministers who make $80,000 or $90,000 or $100,000 per year and about the Governor of the Bank of Canada who received an increase in salary to bring it up to $110,000 per year. They do not know about the tens of thousands of people who receive the same or less wages than they do, say $10,000 or $12,000 per year. The hon. member for York North assured us that if public servants were told why they had to make a sacrifice, they would be willing to do it. He certainly did not talk to any of the people like I did in the last week.
I am not concerned about whether the senior civil servants get a salary reduction or a freeze. Members of Parliament and senior civil servants are doing quite well. An increase of 6 per cent for senior public servants means that those making $80,000 to $90,000 or $100,000 per year will receive an increase of $5,000 or $6,000. In the budget of last November the Minister of Finance reduced the marginal tax rate for all big earners from over 60 per cent to 50 per cent, so they are already saving $5,000 or $6,000 as a result of that change.
At the time the senior civil servants had their income tax reduced, tens of thousands of public servants who earn from $11,000 to $20,000 per year will be restricted to a 6 per cent increase in the coming year. The President of the Treasury Board has predicted that the cost of living will increase by 6 per cent but it will probably go up by 9 or 10 per cent. Yet these people will be restricted to an increase of $500 or $600 in the year.
Last Saturday I took the time to meet some of the people who work for the federal government, Mr. Speaker. I will not suggest that I met a scientifically assorted sample that would give me a picture of everyone in the civil service. I was interested in the problems of the people who work for the federal government in the lower paid jobs, and I met half a dozen of them. Let me tell hon. members who have not met such people what it means to them.
1 met a woman who works as a cook in Winnipeg for the Department of National Defence. She is paid $10.43 per hour, $417 per week or $20,016 per year. She is married but her husband is unemployed. He had been taking a course which he has not finished yet. There are three children aged three, two and six months, and her husband looks after them while she works. She pays $450 per month for rent, so they cannot afford to go on holidays or go out for dinner. She told me they have not been out for dinner in the last four years.
Another woman is a cleaner also working for the Department of National Defence. She earns $8.06 per hour, $1,288 a month or $15,456 per year. Her husband works part-time for the City of Winnipeg in the works and operations department, but he has been able to get full-time work and is only employed for about five months of the year. They pay $172 per month for rent, $72 per month for heat, and $20 per month hydro. All these charges will increase in the next year. There are two children aged seven and four. They eat chicken and hamburger and cannot remember when they had steak or a roast. Of course they cannot afford to go on holidays, and with their income they do not qualify for day-care. They do not go out to eat and only occasionally go to the movies. Fortunately some of their relatives are better off than they and the children get hand-me-down clothes.
Another woman who is a single parent with one son works as a bilingual secretary. Her take home pay is $1,100 per month. She pays $365 per month rent, has no car and takes a bus to work. She has cut back on the kind of food they eat. For them, eating out means going to McDonald's. Her son has finished
July 12. 1982

high school and would like to go to university but will not be able to unless they get assistance.
These are people who are just getting by, not living high off the hog. This bill means a reduction of 4 to 5 per cent in their real standard of living. I have other examples but I do not want to take the time of the House with them now, Mr. Speaker.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Louis R. Desmarais (Dollard):: Mr. Speaker, 1 am particularly pleased to take part in the debate on Bill C-124, concerning compensation in the Canadian public sector, because with the member for Winnipeg North (Mr. Orlikow),
I believe this is probably the most important bill the House will be considering this session. Mr. Speaker, for forty years we have been working on income redistribution. This has been our principal concern. Our Department of National Health and Welfare, Employment and Immigration, Small Businesses, International Trade, Consumer and Corporate Affairs, Public Works, Agriculture, Energy, Mines and Resources and so on, Mr. Speaker, have been true to this specific concept. Mackenzie King started redistribution for the benefit of senior citizens and children, namely, the old age security pension and family allowances. St. Laurent redistributed income to students through subsidies to the universities. Pearson did the same for sick people when medicare or health insurance was introduced to pay for both medical and hospital expenses. Our Prime Minister (Mr. Trudeau) is concerned with redistributing our national wealth in the energy field by trying to Canadianize the industry gradually.
We have done an excellent job of redistribution. In fact, today, we are redistributing $2 billion per month through all these programs. To illustrate what $1 billion represents: If a man gives his wife SI million and asks her to spend $1,000 a day and to come back when she has spent all the money, she would not come back until three years later. If the husband gives his wife $1 billion and asks her to do the same, she would not be heard from for three hundred years. However, Mr. Speaker, with all our concern for redistributing our national wealth, we have tended to neglect the production sector. People forget that in order to spend money, someone has to make it. So, today we have a situation where 1,300,000 Canadians are looking for a job. We have an inflation rate of 12 per cent and our interest rates are absolutely horrendous.
Public Sector Compensation Restraint Act

We have to realize, Mr. Speaker, that inflation is at the root of our problems. Inflation is draining the savings of all Canadians, and if we let it go on as it is going today, our so-called middle class will be no more. It is making destitute those Canadians who are on fixed incomes. It is chasing away investors from this country. It is producing high interest rates and pricing Canadian manufacturers and their products out of both local and export markets.
We must defeat inflation, we have no other choice. How do we do this? Our economists have as many solutions as there are economists, but they do have a number of solutions for us. The government has to start somewhere. We know that there are 1.3 million unemployed today, but we sometimes forget there are also nine million Canadians who are employed and worried about their jobs. What we are doing in this bill is asking those nine million Canadians first to help themselves by protecting their own jobs, and second, to help their fellow Canadians who are seeking to regain their jobs. This is what Bill C-124 does. It sets an example, it leads the way.
One of the things mentioned today by the hon. member for Mission-Port Moody (Mr. Rose) was that there would be no possibility to rectify alleged discriminatory employment practices given the way in which the provisions of Bill C-124 have been formulated. I would like to remind the hon. member that the President of the Treasury Board (Mr. Johnston) has already stated in the House that it is not his intention to have the bill override the equal pay for work of equal value provisions of the Human Rights Act. The enactment of Bill C-124 will not prevent federal public service employees, or any other employee falling under the jurisdiction of the Human Rights Act, from filing "equal pay for work of equal value" complaints with the Canadian Human Rights Commission. It is quite obviously the intention of the government that alleged pay complaints under that act will be handled in the same way they have been since the act was proclaimed in 1978. Any inequities found to exist will be rectified.
To say that Bill C-124 consists of an attack on labour is a very shortsighted view. One cannot deny that a large wage increase would have been better received by our federal employees, but the federal government has not adopted this approach because it fully realizes, as I believe the majority of Canadians in their hearts realize, that, as Carl Beigie of the C.D. Howe Institute, put it: "short-term sacrifices are the only way to beat inflation." There will be a pay-off, he says, if Canadians accept 6 per cent wage increases. He says that "it will provide the necessary adjustments so that inflation will come down, interest rates will fall, and the Canadian dollar will strengthen."
Everyone has to co-operate, Mr. Speaker, and I am confident that everyone will. There is no other choice. Clearly this is not a public relations ploy, as is suggested by the hon. member for Winnipeg North (Mr. Orlikow). In response to CLC

July 12, 1982
Adjournment Debate
President Dennis McDermott, who said that he cannot understand how wage cuts are going to help get our economy moving again, 1 would like to quote portions of a recent article in the Financial Post entitled "Wage Restraint does Matter."



PROCEEDINGS ON ADJOURNMENT MOTION

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

Miss Coline Campbell (South West Nova):: Mr. Speaker, I posed my question to the Minister of Fisheries and Oceans (Mr. LeBlanc) last Thursday, at which time I asked that an independent person be appointed by the minister to look at all aspects of the herring fishery in the Bay of Fundy. It is kind of odd that at this late date, when the fishery should be well under way, both fishermen and processors have not reached a negotiated price. I say this knowing full well that the parties have been negotiating. I also know that the size of the fish and the red feed in the fish have meant that perhaps it has not been worth while for the plants to be processing them.
We have a quota and we have fishermen to catch it. We have capacity within the plants to process all the quota, yet at this late date we do not have a price for which fishermen feel they can go out and fish. I say this because 1 know that this same group of fishermen went to the Fisheries Prices Support Board last year in order to obtain assistance for last year's herring fishery. They were told to wait and see until the end of this season and until the Kirby commission made its report. We are entering a second year, and at the price of $143 per metric ton, the price to which fishermen have come down from $165, they do not feel they can meet their expenses. The processors are at $120 per metric ton. Plant workers are not working. Fishermen, the captains and their crews, are not working. The owners of the plants say that they have markets which they can fill.
What is the solution? I indicated to the minister that I feel very strongly that somewhere in the system all parties in the fishing industry should know what the prices are on world markets. There should be a system whereby we know what our fish will bring as a return. I have pressed this, and I feel very strongly that the marketing system within the Department of Fisheries and at the provincial level-and I speak mainly as far as Nova Scotia goes-are not being realistic and are not taking an active part.
We had a good example of a plant which opened last year to process herring sardines. It was an A-l product; there were no complaints about it, but market conditions forced the plant to close a year later, after having spent $6 million to open and to acquire a good work force. Here we are without that plant working. No one would have expected that product to have
found a place on the market shelf within one season of operation, yet when it came time for finding the money to operate the plant and to keep the 100 or more people employed in the area, there was no assistance for the plant and it had to go into bankruptcy. There does not appear to be anyone in the system who wants to open it and operate it at the height of the herring season which is upon us.
This just strengthens my position here tonight. We have both fishermen and processors in the Bay of Fundy who are not able to sit down and say that so many tonnes of herring will bring a return on the market and therefore fishermen should get "X" amount. The plants are saying one thing, the fishermen are saying another, but there is no system whereby one can verify against the other. It necessitates an over-the-side sales to help alleviate the problem.
There are many criticisms about over-the-side sales. This year in particular big companies in Nova Scotia are using them to send groundfish into the Portuguese market. We had these in herring in the Bay of Fundy last year. We have them in mackerel in some areas and we have them in Newfoundland with the oversupply of fish being caught there.
We are not directing ourselves to the importance of establishing a market for that 200-mile limit.
I have repeated the fact for many years that we must direct our marketing system to the capacity that exists, the capacity of the fishermen to catch all that is in the 200-mile limit, and the capacity of our plants to process it. We need an effective marketing strategy which requires the processors and the fishermen to know where that market is and what the returns will be in order to make an operation viable. Without that knowledge, we have the situation which presently exists, where fishermen cannot operate without incurring a direct loss at $120 a metric ton, or about $30,000 per boat for this year. It does not pay them to go out and fish. This relates to individual boats and there are many captains who are in that position. There are plant workers as well who would normally be working but are not.
What is the solution? Can we get an extra quota? The biologists say there is no surplus, and they have promised the fishermen that they would go down to verify if that is not the case. Everyone in the area knows that there is a mixed class of fish, of herring, which shows the strength of those stocks, but there are no biologists on those boats. We are entering the height of the season.
Perhaps the solution is to give them an extra quota. Perhaps another solution could be found through the Fisheries Prices Support Board. If this is the solution I believe the companies must open their books to show what they receive on the market for their fish.
I realize that my time is up. I appreciate being allowed to speak as this is a very critical situation which repeats itself every year.
July 12, 1982


Mr. Deputy Speaker:: 1 am sorry but the hon. member's time has expired.


Mr. Brian Tobin (Parliamentary Secretary to the Minister of Fisheries and Oceans):: Mr. Speaker, I first want to say to the hon. member for South West Nova (Miss Campbell) that I appreciate her concern in this matter, because I also represent a fishing constituency. I share some of the trauma of seeing plants not working that otherwise would be working at this time of year.
I want to point out that as of today the two parties involved are still engaged in negotiations. In fact, it is my understanding that there is a meeting scheduled for the next day or two to attempt to come to an agreement. It should be pointed out that the processors' and fishermen's representatives in this particular set of negotiations are about one cent per pound apart in the price being offered and the price that the fishermen are demanding at this point in time. Therefore, the Minister of Fisheries and Oceans (Mr. LeBlanc) is obviously hesitant at this stage of negotiations to intervene by appointing a third party.
I want to tell the hon. member for South West Nova that I appreciate, and 1 know that the minister appreciates, her comments on the marketing system presently being employed in the east coast fishery. There is no question that a more consistent and co-ordinated approach to the market place, so far as quality and price is concerned, is a matter that is receiving very serious attention by the department, in the fisheries committee where the hon. member does a very admirable job as chairman of that committee and, of course, 1 would assume and hope, in the Kirby task force as well. I simply want to say that while the Minister of Fisheries and Oceans sympathizes with both parties involved, it is the minister's hope that in fact an agreement can be reached in time for the total quota involved to be caught before the first week, approximately, of September.


PUBLIC SERVICE-AUTHORITY FOR CAPPING INDEXATION OF PENSIONS. (B) FUNDING OF INDEXING
Gordon Edward Taylor: Mr. Speaker, the national energy policy of this government started the economy of Canada on a tailspin. The November 12, 1981, budget accentuated the downward whirl. The June 28, 1982, budget braked the fall a little. But the $20 billion deficit and other items aimed this ailing Canada right at the rocks of disaster.
One of the other items that accentuated the spin was the announcement that the government intended to cap the indexation of the pensions of retired civil servants, retired army personnel and retired RCMP. It is to this doublecross policy which I address my remarks tonight.
During service to the public, these men and women were required to contribute 6.5 per cent of their salaries and wages to the basic pension fund, plus 1 per cent for the purpose of indexing their pensions in periods of inflation.
Adjournment Debate
The minister, in a weak attempt to justify this confiscation of part of the whole pension, said, "the pension of most retired persons from the private sector are not indexed at all". The minister should know that in the private sector, where there is no indexing, the employees were not required to pay into an indexation fund to provide for indexing. If they did pay into a fund for indexing, the company would not dare to cap the indexation after the employee retired, but such honour is foreign to the government. When asked what authority the government had to cap the indexing of these pensions, the minister said, "Authority will be sought from Parliament by way of legislation." Authority will be sought, indeed, when he knows that the trained seals of Mr. Trudeau, the Liberal backbenchers, will vote as they are told.
When I mentioned cutting off part of the pension of the retired, the minister misled the people by saying, "There is no intention to affect the pension rights of the retired." Who does the minister think he is kidding with such misleading predaci-ty? It is certainly not the retired RCMP who have risked their lives many times during their years of service to earn their pension. It is certainly not the handicapped who need every cent of indexing to exist, let alone live, and not the Armed Forces personnel who left part of their lives in the battlefields. The minister well knows that the retired depend on the basic pension plus the indexation which is, in fact, part and parcel of the pension when inflation exists.
When the Progressive Conservative member for Vancouver-Quadra (Mr. Clarke) spoke feelingly on behalf of needy working mothers, the Hon. Mr. MacEachen inferred that incomes of less than $30,000 were "fully protected". Is that not interesting? Let us look at the incomes of these retired army personnel, RCMP and civil servants. Are they in the $30,000 bracket or higher? The average pension of the 119,670 superannuated civil servants, the 30,000 retired soldiers, sailors and air personnel, and the 5,000 RCMP, is $7,915, and their spouses average only $2,100 per year, averages which indicate that many average incomes are under $7,900. The poverty line is generally below $8,000 per year. Here the government is capping indexations on persons living under the poverty line.
Another point is that the moneys contributed to the retirement funds do not belong to the government. They belong to the contributors. All these items did not deter the federal government from capping the indexing of pensions of this group. In effect, the government said, "They are retired; they have no unions; their working days are over. We do not need them any more. To hell with them!" So, in spite of their contributions, in spite of the work they have done, the retirement index of their pension is capped.
"I weep for Canada", one of the superannuates cried. "Do not weep for Canada", I said, "weep for Mr. Trudeau, Mr. Lalonde, Mr. MacEachen and the Liberal government"-

July 12, 1982
Adjournment Debate


Mr. Deputy Speaker:: Order. The hon. member knows that he should refer to hon. members of this House by their constituencies.


Gordon Edward Taylor: Weep for the Right Hon. Mr. Trudeau, the Hon. Mr. Lalonde, the Hon. Mr. MacEachen"-


Mr. Deputy Speaker:: The hon. member persists. He knows that the reference should be to the functions or to the constituencies.


Gordon Edward Taylor: "Do not weep for Canada", I said, "weep for the Prime Minister, (Mr. Trudeau), for the Minister of Energy, Mines and Resources (Mr. Lalonde), and the Minister of Finance (Mr. MacEachen), for the government, the government of the three destroyers, the government that, in spite of its promises, is capping the indexing of superannuates today." What will the government do next? Will it remove all indexing and confiscate some of the basic pension, as well?
The Liberal government wants every cent it can get, irrespective of who it hurts. But Canada will survive. The policy and the principles of the Right Hon. Louis St. Laurent and the Right Hon. Sir Wilfrid Laurier have been betrayed by the government, but Canada will survive. Once the people vote out the government so overwhelmingly that no government of the future will ever again do such a dastardly thing as cutting the income of the aged, of the retired, including the handicapped and the crippled, it will be evident to all. The Prime Minister, the Minister of Energy, the Minister of Finance and the government are with us for just a little while. Then, if there is any Canada left, the tailspin will be arrested and slowly but surely we will stabilize the economy and start building confidence, trust and honour into the federal administration once again.


Mr. Douglas Fisher (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, it is a real pleasure for me to have stayed tonight until this late hour to listen to the hon. member for Bow River (Mr. Taylor), who is one of my favourite Members of Parliament. I find on many occasions that even if his facts are thin, his rhetoric is great and fascinating. Tonight is one of those nights.
I find, for example, he is playing the old divide and conquer game again. He tells people that the government's attack against inflation is not going to work and, therefore, they will suffer. That is what he has done tonight, he thinks, on behalf of retired public servants. Fortunately, those people do not accept the line of thought which the hon. member has put forward. For evidence, I refer him to the Ottawa Citizen of June 3, page 71, where that newspaper diligently sought out the opinions of quite a few senior public servants, retired people here in Ottawa. They told that reporter they did not agree with the line of thought being put forward by the hon. member.
I ask the hon. member to remember a simple set of facts, namely that indexed pensions for public servants have only
been in effect since 1970 at a rate of one half per cent of salary and since 1977 at the rate of 1 per cent of salary. Therefore, we are not talking here about contributions that have been made throughout some 40 or 50 years of service, as the hon. member implies.
Finally, I ask him to remember the basic principle that if everyone shoots for 6 per cent, there will be no sacrifice for anyone. However, if everyone shoots for 12 per cent, the hon. member will be right and there will be some people who will suffer. That is why the government is suggesting that 6 per cent is a reasonable target and that the leadership being shown by the government and its employees and retired employees is vital for the whole economy so that we can all prosper. At 6 per cent we prosper; at 12 per cent we weaken. Therefore, we cannot follow the line of thought implied by my dear friend from Bow River who has been charming but, I hate to say, wrong tonight.


AUTOMOTIVE INDUSTRY-CANADIAN CONTENT IN IMPORTED VEHICLES. (B) CONSEQUENCES OF GOVERNMENT POLICY
Joseph Lloyd Reid: Mr. Speaker, my comments tonight arise out of questions I posed to the Minister of Industry, Trade and Commerce (Mr. Gray) on June 22 last. At that time I was asking for information dealing with the progress that this government was making with respect to the Canadian value added in the automobile industry and with respect to quotas that might be affixed to imported automobiles coming into this country, which now hold 25 per cent of the market. The minister's reply was the standard, usual, eloquent one; please be patient and, if you are patient, good deeds will follow. That answer is no longer adequate or acceptable. Not only have we been patient, but we have watched the automobile industry go into a serious decline to the point where it is now just about beyond recovery.
It might interest hon. members that over two years ago, on April 17, 1980, as recorded at page 94 of Hansard, the Minister of Industry, Trade and Commerce said, "our priority is to preserve Canadian jobs and to create more Canadian jobs". The minister went on to say that he was going to have formal consultations with the United States of America dealing with the relevant clauses in the Canada-U.S. trade pact. Those consultations were to include as well the matter of imported automobiles. What a track record that minister has. What a priority he set for himself.
Since then he has presided over the highest period of unemployment in the history of the automobile industry. The minister responds, better than two years after claiming auto industry jobs to be a priority, by telling the House, "I look forward to progress and hope to have announcements in the coming months". In other words, Mr. Speaker, he is giving us exactly the same kind of answer he gave us two years ago. In other words, no progress has been made with respect to changes in that trade pact, or quotas for imports, and we have no comments with respect to Canadian value added.
July 12, 1982

1 would like to spell out one or two of the problems that exist. The first is the long-standing problem with respect to the Canada-U.S. trade pact. The auto pact, now in existence for 17 years, has been a disaster for the Canadian auto parts industry. For the last three years there has been an auto parts deficit with the United States in excess of $4 billion each year.
For example, just today 1 received a letter from the president of an auto parts manufacturer in St. Catharines. He pointed out that one of the big three auto manufacturers has served notice on that company that it was going to shift its parts sourcing of a major item from St. Catharines to Detroit. The St. Catharines business offered a 30 per cent price discount. That same manufacturer in St. Catharines had a merit award, called a preferred supplier award. That award was given because of the quality control in that company. Clearly then, the issue of price, the issue of quality, the issue of historical relationship, meant nothing. That car assembler in Detroit was determined to shift the contract to Detroit. The St. Catharines supplier now stands to lose $12 million in lost sales and this country will lose another 80 to 100 jobs. The president of the St. Catharines industry said clearly and flatly that without Canadian control legislation, without Canadian value added, the automobile industry in this country will go down the drain just as badly and just as quickly as the economics of this country is now going down the drain.
That brings me, then, Mr. Speaker, to the question of Canadian value added. The Minister of Industry, Trade and Commerce has said that the Volkswagen agreement was the "harbinger of things to come." He also indicated that public pressure would bring about swift action in this matter. Since that time, there has been much evidence of public pressure on Canadians, who now appreciate that at least one in six jobs in Canada is automobile related.
The Minister of Industry, Trade and Commerce has taken the position that it is vital to Canada's economic well being that we have an automobile industry. 1 want to emphasize, Mr. Speaker, that this is an industry that can take a leading part in getting us out of the doldrums we are in now; getting us out of the recession or the depression we are in. If the minister and this government allow the automobile industry to die on a sea of platitudes, promises and empty rhetoric, then we are in a period of sad decline and depression.
It is time for action in the Canada-U.S. auto parts pact amendments and the Canadian context of Canadian value added to every automobile sold within this country. That time for government action, is now. I leave it to the minister or to his parliamentary secretary to give us a more positive response than that which we have had.


Douglas Glenn Fisher: Mr. Speaker, I
Adjournment Debate
must say that when I made my comments earlier about the hon. member for Bow River (Mr. Taylor) being one of my favourite people in the Conservative Party, 1 had forgotten about the member for St. Catharines (Mr. Reid). It is a real pleasure to hear a Conservative talk about building up Canadian industry instead of trying to tear apart some of the nationalization programs, or some of the Canadianization programs, or the support programs that we normally are developing for industries across the country.
The hon. member referred to the arrangement with Volkswagen. It is a very good model for Canadians and for other countries wishing to sell cars in Canada. Undoubtedly, as foreign vehicle producers reach decisions about their investment in Canada, they will be consulting with us on the terms available to them to achieve relief from duty in the same way as Volkswagen has. There currently are cases of this type under discussion, and we hope they can be brought to a successful completion in the months ahead.
Volkswagen operated for some years under a duty remission scheme whereby the duty paid on its imported vehicles was reduced in relation to the value of automotive parts purchased by Volkswagen in Canada for use in its assembly facilities in other countries. Once Volkswagen established an assembly plant in the United States, the company substantially increased its purchases of parts from Canadian independent parts producers, but under the formula of the duty remission program Volkswagen was still paying duty on vehicles it was importing into Canada.
The new arrangement involved the establishment of a parts production facility in Canada to employ almost 500 Canadians and to create increased parts purchases in Canada. These extra purchases will in turn create a further 1,000 new jobs. This will permit Volkswagen to import its vehicles duty free provided it obtains the established levels of Canadian content.
The duty remission program which, it seems, was particularly attractive to Volkswagen, is being used by other offshore vehicle producers. In the highly competitive automotive market in Canada today any savings on costs to an automotive producer must be attractive. The duty remission program reduces the level of duty the importer must pay. In the process it creates activity in the automotive manufacturing sector in Canada. It is not, however, possible to have 100 per cent of the duty payable remitted under this program. If a company, for competitive reasons, wants to reduce the amount of duty to zero, then the Volkswagen model should show it how some arrangement can be worked out to give it a similar opportunity. As I mentioned at the beginning, we hope other companies can be encouraged to bring such deals to successful completion within a few months.

July 12, 1982
Adjournment Debate


Mr. Deputy Speaker:: The motion to adjourn the House is At 10.26 p.m. the House adjourned, without question put, now deemed to have been adopted. Accordingly, this House pursuant to Standing Order, stands adjourned until tomorrow afternoon at two o'clock.

Tuesday, July 13, 1982