1982-12-01

MOTIONS UNDER S.O. 43   PIPELINES PROPOSED NATURAL GAS PIPELINE TO MARITIME PROVINCES

['Surely the Hon. Member is not serious. That kind of request is not appropriate under the provisions of Standing Order 43.']
Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, in order to put the matter to rest, i move, seconded by the Hon. Member for Mississauga South (Mr. Blenkarn):
That the Government admit what everyone knows anyway, that it has no intention, and never had any intention to cross the St. Lawrence River with the natural gas pipeline, and that the whole thing was a political bamboozle designed to take in the Maritimes.


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



Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. While the Government calls for equity and restraint and sets limits on wages and salaries of 6 per cent, the Minister of Finance (Mr. Lalonde) extends the provision for oil companies to write off virtually 100 per cent of their exploration costs. Therefore I move, seconded by the Hon. Member for Beaches (Mr. Young):
That the House hereby calls upon the Minister of Finance to restore the capital cost allowance for small business to its pre-November 1981 level, since if any sector requires help these days it is Canada's small business community, not the major oil companies.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


THE JUDICIARY
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, whereas the workload of the single Supreme Court Justice of the Northwest Territories has reached inhuman proportions; whereas the backlog of cases is increasing daily, so that justice is being delayed to the extent that justice is being denied; and whereas the Minister of Justice has been aware of the problem for five years but has not acted to effect its remedy, I move, seconded by the Hon. Member for Simcoe South (Mr. Stewart):
That a second Supreme Court Justice for the Northwest Territories be appointed immediately.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


GOVERNMENT EXPENDITURES
Mr. Don Blenkarn (Mississauga South):: Madam Speaker, this morning there was delivered to my office, and to the offices of other Members, an expensively-bound annotated book of propaganda material claiming to be the semi-annual report on the progress of the six and five program, from the Davey-Joyal Committee. The Committee has no parliamentary authority whatsoever, yet it apparently spends public money. Therefore I move, seconded by the Hon. Member for Fundy-Royal (Mr. Corbett):
That this House notes with dismay the enormous waste of money expended by the Davey-Joyal Committee, operating under the orders of the Prime Minister, in producing and delivering propaganda material for the Liberal Party, including the TV musings of the Prime Minister, and that this House calls upon the Prime Minister today on motions to explain to the House under what authority a committee designated as the Davey-Joyal Committee should be entitled to expend public money.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.

December 1, 1982


MACDONALD ROYAL COMMISSION
Mr. Ron Stewart (Sintcoe South):: Madam Speaker, the establishment of the Macdonald Royal Commission on the economy was a shrug of the shoulders in the direction of the more than 1.5 million Canadians out of work, and a slap in the face to the already excessively tax-burdened workers who will have to pay the estimated $10 million to $15 million cost of the Commission. If the Government is allowed to continue its destructive economic policies, in three years the number of unemployed will have doubled and those Canadians actually able to pay their spiralling taxes will have become an endangered species. I move, seconded by the Hon. Member for Simcoe North (Mr. Lewis):
That the Government immediately disband this cosmetic and costly Commission and, to demonstrate its trust in Canadians, call a general election which would permit the people of Canada to choose the right solution to our economic ills.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


SHIPBUILDING
Mr. Howard Crosby (Halifax West):: Madam Speaker, at a time when the Government proposes to spend $500 million to create 60,000 temporary jobs, the Canadian shipbuilding industry, with the capacity to create 15,000 permanent jobs, is deprived of a supportive government policy and faces unfair competition from foreign shipbuilders. Accordingly I move, seconded by the Hon. Member for Fundy-Royal (Mr. Corbett):
That the Government give urgent priority to the formulation and implementation of a shipbuilding policy that will foster a viable Canadian shipbuilding industry and create jobs for Canadians.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


POLITICAL PARTIES
Mr. Les Benjamin (Regina West):: Madam Speaker, in order to be of aid and comfort to my good friends and colleagues to my right, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of
the fact that the Saskatchewan Minister of Agriculture said that the Saskatchewan Conservative caucus and Cabinet is split down the middle on the Crow rate, and in case the split might apply to the seven Conservative Members of Parliament from Saskatchewan, at a time when the federal Liberal Cabinet is drawing up plans to cancel the rates, I move, seconded by the Hon. Member for The Battlefords-Meadow Lake (Mr. Anguish):
That the House request the Minister of Labour to appoint three and a half Conservative MPs from Saskatchewan and that well-known Crow opponent, the Hon. Member for Lisgar, to a four and a half member mediation commission chaired by that Hon. Member to help Saskatchewan Conservatives resolve their disunity so that we can see where the heck they stand.


Some Hon. Members:: Oh, oh!


Madam Speaker:: The Hon. Member for Red Deer (Mr. Towers).


FINANCE
Mr. Gordon Towers (Red Deer):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. My motion is a plea on behalf of millions of Canadian home owners whose home heating costs have escalated because of the taxation policies of the Government. It has been estimated that excise taxes comprise almost one-third of the total costs of home heating fuel and farm energy. I move, seconded by the Hon. Member for Cariboo-Chilcotin (Mr. Greenaway):
That the Minister of Finance ease the burden for millions of Canadians by eliminating the excise tax on fuel used for home heating and for agricultural production. No Christmas present could be more welcome by Canadians.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


MINES AND MINING
Mr. Sid Parker (Kootenay East-Revelstoke):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. In view of the fact that the employees of Wabush Mines at Wabush and Labrador City in Labrador were laid off for more than 18 weeks last year, in a lay-off that was extended from an announced ten-week lay-off, and in view of the fact that these miners and their communities are concerned that they may face lay-offs again this year but have
December 1, 1982

been unable to get information from the company, I move, seconded by the Hon. Member for Churchill (Mr. Murphy):
That the Minister of State for Mines pressure Wabush Mines to communicate their planned production schedule for the coming year to the union and to the communities involved, and that further, the Minister of Labour introduce legislation which forces companies to provide adequate notification of temporary lay-offs in the same way that they are required to give notice of terminations.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


PARKS CANADA
Mr. Mel Gass (Malpeque):: Madame Speaker, I rise to move a motion under the provisions of Standing Order 43. In 1976 Parks Canada constructed a toll booth system for entrance into the Prince Edward Island Park. This toll booth system has been of great concern to the area residents who base their living on the tourist traffic in the National Park. This decision, made by Parks Canada, without any consideration for the local people, has had an adverse effect on their businesses. These people should have some input into the decision made by Parks Canada. Therefore I move, seconded by the Hon. Member for Fundy-Royal (Mr. Corbett):
That the Minister responsible take action on the views expressed by the Barckley-Stanhope-Dalvay Tourist Association by eliminating the toll booths at the National Park and reopening previously closed entrances.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


CANADIAN TRANSPORT COMMISSION
Mr. Bill McKnight (Kindersley-Lloydminster):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. In light of the Government's proposed changes in the statutory rates for the movement of grain, I move, seconded by the Hon. Member for Crowfoot (Mr. Malone):
That this House instruct the Minister of Transport to remove the legal requirement of the Canadian Transport Commission to hold hearings on Prairie branch line abandonment by using the Railway Act to freeze all branch lines, the same Act which the said Minister used to abandon 50 per cent of VIA Rail in western Canada.
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Madam Speaker:: Is there unanimous consent for this motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


POLITICAL PARTIES
Mr. Dan Heap (Spadina):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. I have received a request from a Grade 11 student at Langley Secondary School in British Columbia. This student writes:
My concern is Liberal representation (or the lack of) in western Canada. My question is: why are the Liberals not represented in Parliament in the three western Provinces? What policies or programs should the Liberals put forth in order to gain the support of the western voters?
I move, seconded by the Hon. Member for Beaches (Mr. Young):
That the Prime Minister write to the people of Langley and explain that there are Conservative Members in British Columbia who vote with the Liberals on all essential policies.


Some Hon. Members:: Oh, oh!


Madam Speaker:: Surely the Hon. Member is not serious. That kind of request is not appropriate under the provisions of Standing Order 43.



ORAL QUESTION PERIOD


Hon. Allan Lawrence (Durham-Northumberland):: Madam Speaker, my question is for the Prime Minister in his capacity as Chairman of the Cabinet Committee on Security and Intelligence. Has Professor Hugh Hambleton of Laval University been working as a security agent for the Canadian Government for the last two decades for the purpose of infiltrating the KGB?


Hon. Bob Kaplan (Solicitor General of Canada):: Madam Speaker, the Hon. Member might be referring to statements that have apparently been made in Great Britain on that subject during a trial that is taking place today. I think the fact that such statements were raised at that trial makes it even more obvious that no statements on that subject should be made in this place.

December 1, 1982
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Allan Frederick Lawrence: As the Solicitor General would appreciate, that question concerns what is reprinted in the London papers, not what transpires here in Canada.


QUERY RESPECTING DOCUMENTATION
Allan Frederick Lawrence: Madam Speaker, my supplementary question is directed to the Minister of Justice. Would the Minister of Justice tell us if there has been any evidence, documentation, or any correspondence by the Government of Canada to Mr. Hambleton or anyone on Hambleton's behalf, indicating that he has been working as a security agent for the Canadian Government at any time?


Hon. Mark MacGuigan (Minister of Justice):: Madam Speaker, not to my knowledge, but I am not sure that that type of knowledge would come to my attention. I would like to reiterate the point made by the Solicitor General. We understand that this very issue has been raised in the trial in the United Kingdom. The Hon. Member may say that what is said here will not be repeated in Britain, but how do we know that? This is a trial in a country which has a long tradition of fair trials, like our own. It would be extremely ill-advised for any statement to be made here which would in any way affect the course of that trial.


BANK OF CANADA
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, my question is directed to the Minister of State for Finance. On Monday an extraordinary admission was made by the Governor of the Bank of Canada that the monetary policy which had produced 20 per cent-plus interest rates had been wrong and totally misguided. The Minister of Finance agreed with this yesterday. He said nothing about how a new interest rate policy would be followed in order to avoid this past disaster. Would the Minister say now what that new policy will be, so that Canadians can judge better for themselves whether these disasters of 20 per cent-plus interest rates will be repeated in the future?


Hon. Paul J. Cosgrove (Minister of State (Finance)):: Madam Speaker, I was in the House of Commons yesterday when the Minister of Finance answered that question. I must admit that I do not agree with the Hon. Member's introduction to his question. I certainly do not agree with his interpretation of the answer given by the Minister of Finance, I would refer the Hon. Member to his answer and to the speech which was given by Mr. Bouey in which he expands upon those other criteria which the bank will be taking into account in the future in addition to M1.


Michael Holcombe Wilson: I read that speech. I could not find anything in it which gives any indication of what the future monetary
policy will be. That was the question I asked the Minister just now. That is the question which he did not answer.


FINANCE
Michael Holcombe Wilson: Madam Speaker, the previous Minister of Finance continually blamed high interest rates on the United States. The recent statements by the Governor, not only in his speech but at the IMF meetings in September as well, indicated that interest rate policy will be even more dependent in the future on what happens in the United States. What is the Government doing to decrease the dependency of our interest rate policy on the United States in order to avoid the gross errors of the 20 per cent interest rates that we have had in the past two years?


Paul James Cosgrove: Madam Speaker, the Hon. Member began his question by saying that he had read the speech of the Governor of the Bank of Canada and the answer of the Minister of Finance. I find that difficult to believe because, if he had read them, he would have his answer before him.
I cannot do better than to draw to the Hon. Member's attention the response given by the Minister of Finance to that question yesterday. He said, as reported at page 21117 of Hansard:
The policy remains the same. The policy of the bank is to try to encourage a reduction in the rate of inflation. We have met with considerable success in the last few months in that regard. We hope we will continue to meet with success, and reduce inflation in this country-
It is quite apparent that the Government's policy of six and five, introduced in the June budget by the former Minister of Finance, as illustrated by reports, including that of the Conference Board of Canada today, has had some good success in bringing down inflation and, hence, that is a made in Canada aspect of controlling inflation and thereby controlling interest rates.


Michael Holcombe Wilson: Madam Speaker, I might just refer the Minister to that Conference Board report because, far from saying that it was six and five that resulted in the drop in inflation, it said that the private sector was bringing the inflation rate down before the six and five program was introduced, and the six and five was a late starter.


MORTGAGE RATE POLICY
Michael Holcombe Wilson: Madam Speaker, the question I want to ask the Minister now is in connection with the Lortie Commission conclusion that the proposal to reduce mortgage rates by using the Income Tax Act should not be introduced, and the Minister of Finance has confirmed that
December 1, 1982

it will not be introduced. Since the Minister himself, as well as the Prime Minister and the Minister of Finance, urged Canadians to buy new homes in anticipation of this new policy, what is the Minister proposing to do to avoid the double wrong that he has done to Canadians, the wrong in encouraging them to buy homes and then reneging on the policy, and also following an interest rate policy which was dead wrong?


Paul James Cosgrove: Madam Speaker, it is quite apparent that the Hon. Member is being quite selective in his use of material that is available to him, in his questions today. I think, if he were fair, he would point out that in the Conference Board report, to which he made reference, it is found that somewhat less than a majority of those who were canvassed said that they had made plans to reduce their wage increases below 6 per cent. As a matter of fact, the majority of those who were canvassed said that they had made plans to hold their wage increases down after the six and five policy was announced. Therefore, 1 wish the Hon. Member would at least-


Michael Holcombe Wilson: Talk about the inflation rate, Paul.


Paul James Cosgrove: -be forthright in having all the material made available.


Mr. Baker (Nepean-Carleton):: You have a selective memory-


Paul James Cosgrove: In answer to his last question, since the Lortie Report was commissioned all Canadians have become aware, including, quite obviously, those Canadians who have been buying homes in record numbers in the past three months, that interest rates have been reduced by some 6 per cent and-


Michael Holcombe Wilson: You reneged, Paul.


Paul James Cosgrove: -the proof of the confidence of Canadians in the marketplace is evidenced by the fact that they are buying homes in unparalleled numbers, certainly compared to the last few years.


Some Hon. Members:: Hear, hear!


UNEMPLOYMENT INSURANCE
Hon. Edward Broadbent (Oshawa):: Madam Speaker, my question is directed to the Prime Minister. On Monday the Minister of Finance refused to extend unemployment insurance benefits to unemployed Canadians whose benefits had expired but who are still unable to get jobs. Since then I have learned of a case in British Columbia involving a particular worker who worked for 13 years but who has lost his job and is now losing his home, and whose unemployment insurance benefits are about to run out. This man, like thousands of other workers, first wants a job. If he cannot get that, then he
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would like the right to unemployment insurance and not be forced onto welfare.
Will the Prime Minister take the opportunity, before we recess for Christmas, to correct the Minister of Finance and assure the people of Canada that the Government wiil extend U.I. benefits so that workers will have the right to them, at least, and will not be forced to go onto welfare?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I cannot add anything to what the Minister said yesterday. We have attempted to deal with the so-called exhaustees by trying to find work for them so that they could qualify for regular jobs or, failing that, re-enter the unemployment insurance rolls. However, insofar as providing jobs for every unemployed worker in Canada is concerned, whether or not he or she has been on unemployment insurance, I am afraid that the Minister of Finance conceded that we did not have that kind of money. So-


John Edward Broadbent: Madam Speaker, I wish the Prime Minister would listen with care to the question. The question was not about jobs, as such. The question, in this instance, was about unemployment insurance benefits.


REASON FOR NOT EXTENDING BENEFITS
John Edward Broadbent: I would therefore like to come back to the Prime Minister and say that, before Christmas, thousands of working families will be forced, for the first time in their lives, to go onto welfare because they are not entitled, according to the law as it now exists, to unemployment insurance benefits. Considering the fact that the federal Government already picks up the major share of welfare costs, and considering the fact that workers would rather have unemployment insurance, why does the Government not do the appropriate thing, which makes sense and is socially desirable, and extend the unemployment insurance scheme for all the workers who, unfortunately, will need financial assistance?


Pierre Elliott Trudeau: Madam Speaker, if the Hon. Member refers with care to the answer I gave, I think he will find that I dealt with that. It is a question of making money available to do what the Hon. Member suggests, and we do not have that money available.


FINANCE
John Edward Broadbent: Madam Speaker, I would like to ask the Prime Minister another question. Since many Canadians saw him on television a few weeks ago talking to the people of Canada about sharing, if I remember the phrase correctly, about the strong perhaps being required to

December 1, 1982
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help the weak in our difficult times. The Government cut taxes by over a billion dolllars for the top one-seventh of income earners last year. Will the Government practise what it preaches in this instance by restoring those taxes to the top one-seventh and using the more than one billion dollars to create jobs for Canadians who need them?


Pierre Elliott Trudeau: Madam Speaker, the Hon. Member refers to our hope for sharing in Canada. He will realize that the safety nets, and the Canada Assistance Plan is one, are a way of sharing. It is unfortunate that we have to resort to that type of assistance, but it is an application of the principle of sharing between Canadians. As the Hon. Member knows, the federal Government pays 50 per cent of all costs incurred by the Canada Assistance Plan programs.
Increasing taxes is a suggestion which I am sure the Minister of Finance will note in the budgetary context, but there is an argument that to increase taxes is not particularly conducive to an economic revival at this time. The argument will go on, I am sure, between the Hon. Member and other economists.

[ Translation]


AIR TRANSPORT
Mr. Jean-Guy Dubois (Lotbiniere):: Madam Speaker, my question is directed to the Minister of Transport and concerns Quebecair. When the Minister of Transport announced his solution for Quebecair, the company's employees made it clear that they intended to meet with the Minister. I should like to know whether they still intend to do so, and also whether the Quebec spokesman, Mr. Leblond, has been in touch with the Minister of Transport. What is the present status of the Quebecair question?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, the Quebec Minister of Transport, Mr. Clair, has stated publicly that he was satisfied with my explanations regarding a number of areas. However, there is still one question on which we have not been able to agree, and that is whether negotiations should focus on creating a new company or on restructuring the existing one. My thoughts on the issue are quite clear. I think that if we try to restructure the previous company, with all the financial obligations with which it is burdened, including its debt to the Government of Quebec, to Mr. Webster, to Mr. Hamel, to Mr. Provost, and so on, the company will never get off the ground. On the other hand, I can hardly refuse to give Mr. Clair an opportunity to defend the opposite view. It will not be easy for him but I can hardly prevent him from doing so. So that is where we are now, and we are going to try to clear up our differences this afternoon. As far as the status of Quebecair employees is concerned, in the note I sent Mr. Clair a few days ago, I undertook on behalf of the Government to give them some form of protection. Of
course, I was not very specific, and for good reason, since I must be careful to avoid making any commitments we cannot honour in other cases as well. So that is where we are now with the employees. Mr. Leblond was appointed by the Quebec Government as the intermediary in this question, and we shall have our own negotiator as well on this task force which is to be created very shortly.


FINANCE
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, my question is directed to the Minister of State for Finance. For the better part of a year the Government has been making interest rate policies based on what the Governor of the Bank of Canada now admits was an unreliable guide. As a result, thousands of Canadians lost their homes, not through any fault of their own but because of the Government's mistaken high interest rate policy. What explanation does the Minister have for these thousands of Canadians who lost their homes because of the Government's misguided interest rate policy?


Paul James Cosgrove: Madam Speaker, I do not believe that the policy of the Governor of the Bank is any different this year than it was last year, or during the year the Leader of the Opposition was Prime Minister of the country. The Hon. Member asking the question has not really characterized the policy of the Governor of the Bank and the posture of the Government of Canada in so far as interest rates and financial policy are concerned. In his statement the Governor of the Bank said that for a number of months the Bank has not used Ml exclusively as the only criterion in applying the policy against inflation and the difficulties that inflation has visited on our economy, including high interest rates and the difficulties that they bring to many people in Canada, not only to home owners but to small-businessmen. The Governor indicated that the M1 characterization was only one of the criteria at which the bank was looking.


REQUEST FOR ASSISTANCE TO HOME OWNERS
Flora Isabel MacDonald: Madam Speaker, I agree with the Minister that the high interest rate policy affected not only home owners but farmers, owners of small businesses, and many other Canadians. It was wrong. Not only did it cause thousands of Canadians to lose their homes, but many hundreds of thousands of others are today carrying interest rates at 20, 21 and 22 per cent because of a policy the Governor of the Bank of Canada said was wrong for more than a year. What does the Minister intend to do to
December 1, 1982

compensate those persons who are carrying much higher interest rates and mortgages rates than they should be because of the Government's mistaken policy?


Paul James Cosgrove: Madam Speaker, I indicated in a previous answer that, since the June budget, interest rates have fallen by approximately 6 per cent. This means that a person with a mortgage of around $50,000, with the interest rates being reduced by 6 per cent, is paying $200 a month less in carrying charges. There has been a remarkable improvement in so far as interest rates are concerned.
It would be trite for me to remind the Hon. Member that the Government, in response to the plight of people during the period of time when interest rates were high, announced a number of programs to assist not only home owners but small businessmen. In the field of home owners renewing their mortgages, there was the Canada Mortgage Renewal Plan, a plan to protect those people who had to pay more than 30 per cent of their income under their newly renewed mortgage contracts. That was a sensible and sensitive response. It was sensitive to people facing that difficulty. It was sensible in that it did not encourage the expenditure of billions of dollars which some people would have had us expend at that time.


SHIPBUILDING
Hon. Roch La Salle (Joliette):: Madam Speaker, my question is directed to the Minister of Transport. Last Sunday, workers at Davie Shipbuilding in Lauzon brought out a majority vote against the 6 and 5 policy. Since the Minister knows perfectly well that this company is awaiting the Government's decision regarding a subsidy of $30 million for the construction of a ferry, could the Minister inform the House whether it is true, that if the union failed to support the Government's 6 and 5 policy, it would not only be in danger of losing but would, in fact, have lost, the $30 million subsidy altogether?


Jean-Luc Pepin: Madam Speaker, I shall be happy to answer this question, because it is the first time Hon. Members have acknowledged that my Department is the client in this case. CN Marine has, in fact, decided to invest $100 million in the purchase of this ship. However, the price quoted was in excess of our ability to pay, and we therefore required an additional grant of $30 million from the Department of Industry, Trade and Commerce. For three months, the Government said that it could not be done because an exceptional contribution by the Government of Canada is necessary to make construction at all possible,
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unless Davie Shipbuilding employees are themselves prepared to make a sacrifice, and we have been repeating this to all and sundry for three months. Well, we are now in a position where we are about to say: This is the deadline, and if you cannot reach a decision before that deadline, we shall have to withdraw our order.


CO-OPERATION OF PRIVATE ENTERPRISE
Roch La Salle: I had understood that the Government's policy vis-a-vis the private sector was one in which the private sector was asked to co-operate with this program, and 1 did not think it was compulsory. Now, if 1 understand the Minister correctly, this policy which was voluntary for the private sector would now be compulsory, according to the Minister's reasoning, namely, that either they agree to observe the 6 and 5 ceiling and they get a contract with a subsidy of $30 million, or they do not, and then 1,000 employees lose out on this construction job. Is that more or less what was meant by the Minister?


Jean-Luc Pepin: I think we all have to realize that this is a case where the Government is using public funds in an effort to remedy a particular situation, namely, to prevent these employees from being laid off. Since the Government is making a special effort to accommodate the interests of these employees, it feels it also has a case for asking or demanding, if my hon. friend prefers, that these employees make a special effort as well. The whole point of the policy is to keep inflation at 6 per cent, and in doing so, they too are helping to achieve this goal. Therefore, 1 do not have the impression, and I do not think Canadians have the impression, that we are taking a particularly hard line with these employees. We are proposing an arrangement that will benefit both sides, and in any case, they will have an opportunity to make up their own minds on the matter.


EXTERNAL AFFAIRS
Mr. Bob Ogle (Saskatoon East):: Madam Speaker, in the absence of the Secretary of State for External Affairs my question is directed to the Minister of State for External Relations. I am sure that the Minister is aware of the present conflict between the supporters of the former Nicaraguan Dictator Somoza, who are being aided by the Governments of the United States and Honduras, and the legitimate Government of Nicaragua. I am also sure that the Minister is aware of an initiative by Mexico and Venezuela to resolve the conflict through peace talks. Has the Government of Canada protested to the Government of the United States about its destabilizing interference, and will the Minister assure this House that the

December 1, 1982
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Government will support the Mexico-Venezuela initiative and meet with officials from Mexico and Venezuela to ascertain the details of the initiative and the role that Canada can play?


Hon. Charles Lapointe (Minister of State (External Relations)):: Madam Speaker, regarding the joint proposal by Mexico and Venezuela, the Prime Minister has already given the Heads of State of Mexico and Venezuela the assurance that the Government of Canada fully supports this peace initiative as an attempt to bring about greater stability in this area. As for the second part of the Hon. Member's question, namely, whether we have made representations to the Americans to express our concern and consternation vis-a-vis destabilizing interference by foreign powers in Nicaragua's domestic affairs, such representations have been made several times through the United States Embassy in Ottawa and through our own diplomats posted in Washington. We have reiterated to the Americans our grave concern about any foreign interference in the domestic affairs of foreign countries, and this obviously includes Nicaragua.


SUGGESTED OTTAWA DISCUSSIONS
Robert Joseph Ogle: I thank the Minister for the answer. In an effort to expedite an end to this conflict and restore peace and stability to the area, would the Minister take the initiative of inviting the Foreign Minister of Nicaragua, Miguel D'Escoto, and the Foreign Minister of Honduras, Dr. Edgardo Paz Barnica, to Ottawa to discuss a possible solution to this conflict?


Charles Lapointe: Madam Speaker, last spring, it was agreed that the Minister of Foreign Affairs of Nicaragua would pay an official visit to Canada. However, this summer, the Government of Nicaragua had to cancel the visit. We have now reiterated our agreement in principal with the visit of the Minister of Foreign Affairs of Nicaragua, and we are trying, through diplomatic channels, to find a date that would be agreeable to both Ministers of Foreign Affairs. As regards an invitation to the Minister of Foreign Affairs of Honduras, I shall have to find out about this and answer the Hon. Member's question later on.


SHIPBUILDING
Robert Alfred Corbett: Madam Speaker, my question is for the Minister of State for Economic Development. The Minister recently held a round of consultations in
Saint John, New Brunswick, on economic and regional development issues. Among those he met with were representatives of the shipbuilding industry. I would ask the Minister to tell the House who accompanied him on his delegation, and ask him to advise the shipbuilding workers what they can expect, in a tangible way, as a result of those meetings?


Hon. Donald J. Johnston (Minister of State for Economic Development and Minister of State for Science and Technology):: Madam Speaker, we had a very stimulating session with Local 3 of the Union and with management. I was accompanied by the Hon. Member for Saint John. He was largely responsible for bringing together management and labour with ourselves and the Minister of Public Works, who is the responsible Minister for that region. It was an extremely interesting and frank discussion, and it is a beginning, I believe, of actually bringing together in the same room representatives of labour, management and Government to try to arrive through consultation and co-operation at a solution to some of the very difficult problems which face that particular industry and which also face all industries in this country coast to coast.


Robert Alfred Corbett: I asked the Minister what the shipbuilding workers could expect, in a tangible way, from that meeting, and it is obvious that they can expect much more of the same thing-nothing.


GOVERNMENT POLICY REVIEW
Robert Alfred Corbett: Madam Speaker, my supplementary to the same Minister is with regard to his discussions with the shipbuilding industry in Saint John. Would he advise whether the matter of the Government's shipbuilding policy review was raised and, if so, what was the Minister's response? Will he make a firm commitment to use his good offices to set a date and to release the contents of that very critical report?


Donald James Johnston: First of all, Madam Speaker, the decision to release any report with respect to that industry will be made by the responsible Minister in due course. I am sorry the Hon. Member was not present at the meeting which took place in Saint John, because he demonstrates such an interest in it. The meeting was to review the history of the industry in that area to acquaint the delegation, and myself in particular, since 1 was not as familiar with it as my two colleagues, with the very proud history of achievement of that particular industry in Saint John, its expectations for the future, and the very significant technology team which they have been able to bring together and which has made that particular industry one of the most efficient in this country.
December !, 1982


CANADIAN ARMED FORCES
Mr. Doug Neil (Moose Jaw):: Madam Speaker, in the absence of the Minister of National Defence I would like to address my question to the Right Hon. Prime Minister. The Prime Minister is undoubtedly aware that, effective today, thousands of members of the Armed Forces who occupy PMQs are faced with increases in their utilities, in particular in Moose Jaw of approximately 100 per cent, and 1 understand in the Maritimes the increases are 200 per cent or 300 per cent. Could the Prime Minister advise why, in the light of the Government's six and five program, such exorbitant increases have been authorized?


Mr. Stanley Hudecki (Parliamentary Secretary to Minister of National Defence):: Madam Speaker, I am pleased on behalf of the Minister of National Defence to make the following statement. There is a meeting today between the officials of the Department of National Defence and the Treasury Board, and that particular issue is under active discussion right now.


EMERGENCY MEASURES
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Madam Speaker, my question is directed to the Government House Leader. It has to do with the emergency planning orders and the confidential memo sent to him by Mr. Snarr, the Executive Director, in which he quotes letters from three different provincial Governments which indicate their concern that the Government would suspend rights guaranteed under the Charter, that it would invade provincial jurisdiction in localized situations, and it would permit a subtle takeover in control by the federal Government. He goes on to give the strategy for making this an acceptable plan for the country. One of his plans to make it succeed is and I quote:
-in dealing with the Provinces we would 'soft-pedal' peacetime activation and for the time being concentrate on wartime interfaces between NEAs and provincial Government facilities.
If this plan is as good as the Government thinks it is, and if the Government wants to establish trust, why is it necessary to be devious?


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, I am not going to comment on memos that are confidential, since that was the preamble to the Hon. Member's question. However, I can assure the Hon. Member that the Government never intended to go against the Charter of Rights, and we certainly do not want to encroach on areas that fall under provincial jurisdiction.

Oral Questions ROLE OF PROVINCES


Benno Friesen: My
supplementary is directed to the same Minister. The memo goes on to say that, if a Province adamantly refuses to undertake any role at all in civil defence preparedness, the federal Government would then cut off all the funding allocated to the Province for those purposes, and then move in and do what otherwise would be the role of the Province to do. How does the Minister square that with the need to carry on harmonious federal-provincial relations? Is he trying to undercut the Provinces again?


Yvon Pinard: Madam Speaker, the answer to the last part of the question is no.
* *


RAILWAYS
Mr. Len Gustafson (Assiniboia):: Madam Speaker, my question is for the Minister of Transport. I am given to understand that the canola crushers and growers have been notified that the freight rates for canola products are going to be increased by 41 per cent to 42 per cent, both on the CPR and CNR lines. How does the Minister justify this increase to the western farmers in light of the five and six guidelines that the Government has laid down?


Jean-Luc Pepin: Madam Speaker, it is quite simple. The Railway Act, Section 276, states that the cost of transportation must exceed the variable costs. In other words, rates cannot ever come under the variable costs. If the CTC had not passed the order that they have passed to increase the minimum compensation rate by 42 per cent, they would have been in violation of the law. The law being the paramount authority in these matters, I think it should prevail.


EFFECT OF INCREASES
Leonard J. Gustafson: Madam Speaker, the Minister of Finance yesterday said that five and six was the law of the land. Is it the law of the land, or is it not? In addition, I would like to know whether this will affect imports from the United States coming into eastern Canada, putting the canola growers in western Canada to an unfair advantage in terms of competition? And does the Minister expect that these types of guidelines, 40 per cent and 50 per cent increases, will roll over into the Gilson Report, and other products shipped in western Canada?

December 1, 1982
Oral Questions


Jean-Luc Pepin: Madam Speaker, 1 think the rate is a West to East rate only. I could not swear to that. I am not knowledgeable on that, so I will check, but again I think it applies only to transportation from the West to the East.
The effect that this will have on Gilson is a rather complicated matter. The present rate for transportation of rape-seed or canola oil and meal to the East is the minimum compensatory rate. Gilson recommended that from the West to Thunder Bay it should be the statutory rate in due course. But he did not indicate what it should be from Thunder Bay on to the East. The logic of the system would indicate that it should be commercial rates at that point. It so happens that if you put the statutory rate to Thunder Bay and the commercial rate from Thunder Bay on East, you have a higher rate than the rate you have now, which is the minimum compensatory rate all the way. There is an obvious problem with that, and we will try to solve it in due course, when we make our announcement on the implementation of the Western Rail Transportation Initiative.


CORPORATE SHAREHOLDING LIMITATION ACT
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, I should like to put a question to the Prime Minister with regard to Bill S-3I which regulates provincial involvement in transportation. The Province of Quebec has indicated that it is opposed to the legislation, the Province of Alberta has indicated that it is also opposed to the legislation, and Pierre Lortie has also indicated that he is opposed to the legislation. Mr. Lortie, of course, is an adviser to the Government on other matters.
It appears that only Canadian Pacific is vitally concerned about the passage of this legislation. Why is Canadian Pacific's vested interest more important than the expressed interests of the Provinces most affected and the interest of the President of the Montreal Stock Exchange?


Pierre Elliott Trudeau: Madam Speaker, the main purpose of the legislation is to discourage Provinces from exercising extraterritorial jurisdiction. The Provinces, under the Constitution, cannot make laws or adopt policies having to do with interprovincial or international transportation. They would become enabled to do so if they were able to acquire control of, and to issue policy directives to, an interprovincial or international corporation. They would be going around the Constitution in a way that the federal Government finds it undesirable to allow.


REGULATION OF CONTROL
Ian Deans: Madam Speaker, I will put a supplementary question to the Prime Minister. He knows full well that the federal Government has the power to
regulate, at any time, in the national interest. Given that, if there appeared to be a problem developing, the federal Government could establish such regulations as to make sure that the problem did not mature, why would the Government think it more appropriate that foreign investors from any part of the world should be able to own the interprovincial trucking and transportation industry in Canada, if they so desire, and not feel it appropriate that the duly elected representatives of the Provinces, who are responsible to the Canadian public, ought to be able to make decisions, similarly, to have investment in Canada's future?


Pierre Elliott Trudeau: Madam Speaker, it is because, presumably, the foreign interest or, for that matter, the private sector interest in operating a railway or exercising a degree of control over an interprovincial or international industry, is to make money, to make profits. The purpose of the federal Government is to issue policies which ensure that that objective does not enter into conflict with the national good of the Canadian people, in other words, that the service be provided. If the control is exercised by a provincial Government, I presume the Member would agree that the first purpose of the provincial Government is not to make money or to make profits for its shareholders, but to exercise political directions. If this is the objective of the provincial Governments, to exercise political directions on interprovincial railways, we feel this is regrettable.
The Hon. Member is, of course, correct. The federal Government could step in and start a fight with the Provinces and sort of say, "You should not be running the railway which you control in this way because, for instance, you are asking to move the head office of the CPR from Montreal to some other city in Canada", and we would get into an interprovincial conflict in an area-


Ian Deans: Oh, oh!


Pierre Elliott Trudeau: Madam Speaker, I understand that the Hon. Member does not want to hear my answers but I want to assure him that it is an important subject of ensuring that there is no extraterritorial application by the stronger Provinces against the weak ones. This would happen if they can control an interprovincial transportation company.


CUSTOMS AND EXCISE
Hon. Bud Cullen (Sarnia-Lambton):: Madam Speaker, 1 have a question for the Minister of National Revenue. Last week representations were made to the Minister by all Members of the House, and I believe a question was directed to him by the Hon. Member for Brampton-Georgetown about the "Custer's Last Revenge" cassettes. The Minister undertook to study this and to give us a reply. Has he had an opportunity to do this?
December 1, 1982

[Translation}


Hon. Pierre Bussieres (Minister of National Revenue):: Madam Speaker, as I mentioned to the House before, I asked the Deputy Minister of National Revenue to act under the provisions of Section 46 of the Customs Act and investigate this video game called "Custer's Revenge", which has aroused the indignation of many groups, including many parliamentarians here in the House, women's groups and representatives of native peoples. I am pleased with this opportunity, which the Hon. Member has provided, to inform the House that after a thorough review of the case, the Deputy Minister of National Revenue has decided to prohibit entry into Canada of the video game "Custer's Revenge".


EXTERNAL AFFAIRS
Hon. John C. Crosbie (St. John's West):: Madam Speaker, my question is for the Prime Minister. The Hon. Member for Chateauguay said, a day or two ago, that the federal Government is "pussyfooting" around the recognition of an independent Palestinian state, that the Liberal caucus is "overwhelmingly sympathetic" to the Palestinian cause, and that the Government has to "move now to support the establishment of an independent Palestinian state". He also said that all of the Quebec caucus, except for two or three, and the majority of the Liberal caucus, want that policy put into effect.
May I ask the Prime Minister if there has been any change in the Government's policy with respect to the Middle East and with respect to the question of Israel and the Palestinian situation, or not? Is that now under review and might there be a change? What exactly is the position? Is the Liberal Member for Chateauguay right, and is the Government following his advice and that of the majority of the caucus? Just what is the position?


Pierre Elliott Trudeau: Madam Speaker, there are changes which have been announced from time to time by the Government in the evolution of the policy on the Middle East. For instance, around the Beirut events and the invasion of Lebanon there was a new policy announced which is shared 100 per cent by the Hon. Member, since he himself moved a motion in the House to that effect. So there are some changes and they are all well known to the Hon. Member and the Canadian public. They are on record, to be read.
As far as the Hon. Member for Chateauguay is concerned, he is a Member of caucus, a very Hon. Member, and he puts points of view forward in caucus. I am not aware of particular phrases quoted by the Hon. Member, but certainly there is no attempt on the part of the Government to prevent Members from developing their thoughts on any future event.
Oral Questions


STATEMENT ATTRIBUTED TO LIBERAL MEMBER OF PARLIAMENT
John Carnell Crosbie: Madam Speaker, my question to the Prime Minister was about his Government's policy. A prominent Member of his caucus has made certain statements which lead the public to believe that the Government is going to recognize an independent Palestinian state. He went on to state, by the way, that he favoured high level contacts with the Palestine Liberation Organization. The public is entitled to know if this is the policy of the Government, or not. If it is not, will the Government clearly say that it is not going to have high level contacts with the Palestine Liberation Organization which exists for the purpose of destroying the State of Israel? It has never revoked that purpose.
It is up to the Government to say whether it is now going to recognize an independent Palestinian state. Apparently a majority in the Liberal caucus was told by the Hon. Member for Chateauguay that he believed this should be the policy. Is the Prime Minister stating that that Member of Parliament is wrong on both counts, that the Government is not now going to recognize an independent Palestinian state, and that the Government is not now going to have high level contacts with the Palestinian Liberation Organization? The public is entitled to know.


Pierre Elliott Trudeau: The Hon. Member stated that the alleged statements by the Hon. Member for Chateauguay would "lead the public to believe". I believe what is happening is that the Hon. Member for St. John's West is attempting to get the public to believe that a statement by a Member of this caucus becomes Government policy. If that is the case, 1 could ask the Hon. Member whether it is the policy of the Tory Party that bilingualism should be destroyed in Canada and that there should be only one official language. These are statements made by Members of his caucus. I have never asked him if this is the position of the Tory Party, and I do not attempt to lead the public to believe that either.


John Carnell Crosbie: The Prime Minister could clear the matter up very easily.


NATIONAL SECURITY
Mr. Chris Speyer (Cambridge):: Madam Speaker, my question is directed to the Solicitor General. It does not have to do with Hambleton himself but pertains to the attitude of the Security Service. After the Security Service had amassed its evidence and submitted it to the RCMP, could the Minister tell me why the Security Service was prompted to warn

December 1, 1982
Petitions
Hambleton that if he went to Great Britain he would meet a hostile reception?


Robert Phillip Kaplan: Madam Speaker, I answered that question yesterday, and 1 stand by the answer I gave then. The Hon. Member has to recognize that the Security Service is not primarily in the business of catching crooks, seeing them tried, and seeing them punished. The objectives of the Security Service are much broader. They are to protect the national security of the country.
Often there are very good reasons for establishing relationships with individuals which result in the production of information of very great value to the national security. Without referring specifically to this case, as the Hon. Member has asked me not to do, in many cases there are very good reasons for maintaining relations with individuals which result in benefits to the national security of our country, for example, in gaining information about the way counter-intelligence is being operated by hostile security services in our own country or in other friendly countries.
The Hon. Member should not be surprised that the Security Service would engage in the gathering of intelligence, in establishing relationships with individuals and not having them result in every case in the matter being referred to the CIB and having charges laid.


PETITION
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the three hundred and forty-second report of the Clerk of Petitions, stating that he has examined the petition presented by the Hon. Member for Peterborough (Mr. Domm) on Tuesday, November 30, 1982, and finds that the petition meets the requirements of the Standing Orders as to form.



ROUTINE PROCEEDINGS


Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, it is my duty to present a petition signed by 293 citizens of the Cariboo-Chilcotin riding in British Columbia. The purpose of the petition is to express the clear and strong opposition of the citizens of Cariboo-Chilcotin to Bill C-85, the legislation to establish Canagrex. In particular, the petitioners protest the buy and sell provisions of Canagrex, as well as its wide-ranging powers.
The nature of the petition is to halt the passage of Bill C-85 and to prevent approval of Canagrex at third reading and thereby prevent the establishment of Canagrex. Therefore, the petitioners call upon Parliament to halt the passage of Bill C-85 and to prevent approval of Canagrex at third reading.


Mr. Fred King (Okanagan-Similkameen):: Madam Speaker, it is my duty and privilege to present a petition to the House on behalf of 2,023 persons, most of whom are residents of Okanagan-Similkameen in British Columbia. This petition is similar to the one I presented to the House on December 14, 1981 which contained 5,903 signatures, for a combined total of 7,926 signatures in protest of all nuclear-related activities and in support of the efforts of an organization in Westbank, British Columbia, called "Candu Won't Do".
The nature of the petition is to pray and beseech the House to consider this vital issue which concerns all life and to introduce a Bill in Parliament to stop all nuclear-related activities, including uranium mining, production and sales of Candu reactors, and to decommission all nuclear reactors with due respect to life.
We trust and pray that Madam Speaker will find the petition in order and that the House will take appropriate action.


BUSINESS OF THE HOUSE
Miss Begin:: Madam Speaker, I wish to inform the House that there have been consultations among representatives of the parties and that it has not been possible to reach agreement in respect of the proceedings at the second reading of Bill C-131, an Act to amend the Old Age Security Act (No. 2). Therefore, I wish to give notice that at the next sitting of the House I shall propose a motion, pursuant to Standing Order 75C, to allocate one sitting day to the said stage of the Bill.


Mr. Nielsen:: Madam Speaker, I rise on a point of order. 1 am somewhat surprised that this notice comes today. I learned of it about a half hour ago when I spoke with the Government House Leader (Mr. Pinard). We had a discussion last evening with respect to the disposition of Bill C-131 and Bill C-132. It was my understanding upon leaving that discussion that we would have the opportunity today of discussing the matter in caucus to see whether or not we could come to some agreement. That was the extent of the consultation. Then I spoke
December 1, 1982

with my colleague, the Hon. Member for Hamilton Mountain (Mr. Deans), with respect to the attitude of his Party concerning the disposition of Bill C-131 and Bill C-132.
I have not had the opportunity today, since my discussion with the Government House Leader, of again discussing the matter with the Hon. Member for Hamilton Mountain. In the hope that we might be able to save some of the time of the House, rather than triggering this motion which will take up time tomorrow and move Bill C-131 to Friday, I should like to inform the House, as I informed the Government House Leader but have not had the opportunity to inform the Acting House Leader of the NDP, that we are prepared today to deal with Bill C-132, to deal with the measure through second reading and into committee, and that we are prepared tomorrow to deal with Bill C-131 and send that matter to committee.
If that is acceptable by unanimous consent to the New Democratic Party, it would save a day of House time, or at least a minimum of two hours, give us the opportunity of dealing with other matters on Friday, and obviate the necessity of the Government imposing closure, as was notified by the Minister just now.
It seems to me that the Government House Leader would probably be in accord with that suggestion and perhaps it might meet favourably with the NDP that we proceed in that fashion-Bill C-132 today and Bill C-131 tomorrow.


Ian Deans: Madam Speaker, this is the first time that a suggestion of that kind has been put to me. Without attempting to analyse the motive, I want to make clear that we are unalterably opposed to the passage of Bill C-131. We will do everything in our power to ensure that the aged population of Canada who are in receipt of pensions do not have their pensions reduced one single, solitary cent. We will not, therefore, agree to the passage of the Bill.


Yvon Pinard: As you can see, Madam Speaker, the Minister of National Health and Welfare (Miss Begin) was quite right to say that there has been no agreement under the provisions of Standing Order 75A or 75B. That is why we are serving notice today that, unless there is an agreement, we will proceed with that motion tomorrow. However, my office door is wide open and whenever my colleagues opposite decide to come to such an agreement, we will go along. Otherwise, we will move the motion tomorrow.


Erik Nielsen: Madam Speaker, it is not a question of being a Liberal stooge-


Mr. Kristiansen:: No question about it.


Erik Nielsen: -whoever it was in the New Democratic Party who made that accusation, because our sympathies with respect to Bill C-131, the Old Age Security Act, are precisely the same as those of the NDP. We intend to vote against the measure. All we are suggesting is that we deal with Bill C-132
Order Paper Questions
today, bring it to a vote, send it to a comittee and then we will deal with Bill C-131. I thought the Acting House Leader for the New Democratic Party was in sympathy with this proposal when I spoke to him last night, that we deal with Bill C-131 tomorrow and bring it to a vote. We intend to vote against both of those measures, but let us vote on Bill C-132 today and Bill C-131 tomorrow. That will save the time of the House.


Ian Deans: Madam Speaker, I will be brief. I do not intend either to disclose or in any way to make reference to the comments that I had with the House Leader for the Conservatives last evening. His interpretation of our exchange is not in keeping with my recollection. However, voting against a piece of legislation is one way to indicate opposition. We are not only opposed to the point where we want to vote against it, but we are opposed to the point where we do not want to facilitate its passage in any way.
[ Translation]


Yvon Pinard: Madam Speaker, I want to make one thing clear about the business of the House for today and tomorrow. Indeed, we will be studying Bill C-132 today, but tomorrow, even though we are planning to move the motion to limit the debate on Bill C-131, we will continue the debate on Bill C-132 after the division on the motion. It is therefore possible that a vote could be called on Bill C-132 tomorrow evening.


Erik Nielsen: Madam Speaker, that requires some clarification. Let us assume for a moment that there might be a disposition in the House to dispose of second reading debate and reference to committee of Bill C-132 today. What will be the business for tomorrow?


Yvon Pinard: Bill C-136, Madam Speaker.


WAYS AND MEANS
Paul James Cosgrove: Madam Speaker, pursuant to Standing Order 60(1), I wish to table in both official languages a notice of a Ways and Means motion to amend the Income Tax Act.


Mr. Lewis:: One year later.


Paul James Cosgrove: Madam Speaker, I would ask you to designate the required order of the day for consideration thereof.


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. 3,201, 3,203, 3,439 and 3,615.
21 174

December 1, 1982
Order Paper Questions


Mr. Cossitt: 1.	With reference to the answer to Question No. 2,564 which stated in part that "no statistics are available" in regard to the number of income tax returns by Members of Parliament that were in any way re-examined or re-assessed by the Department of National Revenue, are the tax returns of all Members of Parliament and Senators in the hands of one specific individual in the Department of National Revenue and, if so, for what reason is it impossible for the government to have statistics available on the number of such returns that have been dealt with over and above the original assessment?
2.	Is the government aware that the Member for Leeds-Grenville possesses the name and position of the person in the Department of National Revenue who holds such files in his custody and is the government also aware that no one else in the Department is permitted access to the files except by government order?


Pierre Bussières: 1.
The tax returns of Members of Parliament, like those of any other taxpayer, are filed in various District Offices and Taxation Centres according to the place of residence of the taxpayer and therefore are not in the hands of one specific individual. However, all returns of Members of Parliament filed in the Ottawa District Office are in the custody of a single individual as a matter of local practice. Statistics on the total numbers of reassessments are maintained and the number of reassessments by board occupational groups, but not for small groups such as Members of Parliament.
2. Access to the tax files of Members of Parliament is not made by government order. Access is accorded as required for the same reasons as apply to all files of taxpayers and is restricted to officials as authorized under Section 241 of the Income Tax Act.


Mr. Blenkarn: 1.	(a) Did the Department of National Revenue pay interest at the rate of 12 per cent on income tax overpayments when the interest on Canada Savings Bonds was raised to 12 per cent (b) does the Department intend to pay 19.5 per cent on income tax overpayments now that the interest on Canada Savings Bonds is at 19.5 per cent and, if so, on what date?
2.	Are citizens, who were to receive tax rebates before the postal strike but who received their cheques only after the postal strike, entitled to interest at the rate of 12 per cent up to the date they received their cheque and, if so, does the Government intend (a) to inform them of this right (b) to send them, under separate cover, a cheque for interest on the amount involved?


Pierre Bussières: 1.
(a) The rate of interest is set by regulation under the Income Tax Act and for the calendar year 1981 has been set at 12 per cent per annum. This rate applies to overpayments as well as to arrears of tax and deficient instalment payments, (b) The rate prescribed for income tax overpayments and arrears is set independently of the rate fixed for Canada Savings Bonds.
2. Yes. Taxpayers entitled to refunds are eligible for refund interest at the prescribed rate for the period commencing with the latest of the day the overpayment arose, the statutory filing date for the return in question, the actual filing date of the
return in question, and ending with the day of refund or application to other taxes.
During the period of the postal disruption the Department of National Revenue, Taxation, made arrangements whereby taxpayers could pick up refund cheques at their local district taxation offices. This special pick up arrangement was publicized through the media and many thousands of taxpayers were able to obtain their cheques in this way. No further measures are planned.


Mr. Cossitt: With reference to the Budget of November 12, 1981, which announced that free airline transportation provided by employers would be considered taxable as income, will this provision apply to Cabinet Ministers using such transportation to go to and from their constituencies or elsewhere, when not on Government business and when exceeding the quota of trips permitted for Members of Parliament to and from their constituencies, and (a) if so, what will be the effective date (b) if not, for what reason?


Pierre Bussières: Subparagraph 6(l)(b)(i)(A) of the Income Tax Act excludes from income from office or employment amounts received in the year as an allowance for personal or living expenses or as an allowance for any other purpose that is expressly fixed in an Act of the Parliament of Canada. Subsection 43(1) of the Senate and House of Commons Act refers to transportation and travelling expenses as each House may by order prescribe. Therefore, the value of any transportation or reimbursement of transportation and travelling expenses specifically prescribed and covered in the latter mentioned Act is not taxable. In addition the value of any transportation or reimbursement of such specific expenses to Members of the Senate and House of Commons incurred while on government business is not taxable. When the transportation is for personal as opposed to business use, a taxable benefit arises.


Mr. Herbert: Does the Government provide copies of personal income tax returns to the Government of the Province of Quebec and, if so (a) under what conditions (b) how many copies of individual returns were supplied in each of the past five years?


Pierre Bussières: Subsection 241(4) of the Income Tax Act permits the exchange of information with a Province on a reciprocal basis for the purpose of administering a taxing statute similar to our Act. Conditions are also contained in Part XXX of the Income Tax Regulations dealing with such exchanges.
Information is exchanged with Quebec on a regular basis but copies of individual returns are not normally given to that Province, although there is nothing in the law which would preclude this being done. In the circumstances we have no statistics on the provision of copies of individual returns.
December 1, 1982


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


Mr. McKenzie:: Madam Speaker, I would just like to ask the Parliamentary Secretary about two questions that I have had on the Order Paper for a considerable time. One of them has been on the Order Paper for over a year. It is a question with regard to the Minister of Supply and Services (Mr. Blais), the Minister of Industry, Trade and Commerce (Mr. Lumley) and the Minister of Indian Affairs and Northern Development (Mr. Munro) who took a JetStar flight to Winnipeg for the official opening of a new firm. I asked how many aircraft, how many ministers and how many staff were on that trip. I am quite sure it does not take over a year to compile that type of information.
1 have another very important question, No. 4,175, which I placed on the Order Paper on March 24. It reads:
Was there correspondence between a R. W. B. Bailey, Chairman, SGPE SubGroup and a Mr. R. Gagnon, Assistant Deputy Minister, Department of Consumer and Corporate Affairs, dated February 17 and February 19, 1982 respectively on the subject of a hiring team to recruit Francophone employees?
A further part of my question reads:
For each of the departments and the Corporation listed in Part 4, what schools and universities are the hiring teams visiting in each province and territory?
1 would like an answer to this question because I want to know whether any federal Government hiring teams are coming to the Province of Manitoba to hire students from the University of Winnipeg or the University of Manitoba, and also what nationality they will hire. This is a very important question to me, and it is important to the country to find out where all of these hiring teams are and whom exactly they are hiring for the federal Government.


David P. Smith: Madam Speaker, I will be happy to look into both of those matters on behalf of the Hon. Member.


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


Some Hon. Members:: Agreed.


David P. Smith: Madam Speaker, 1 ask that all notices of motions for the production of papers be allowed to stand.


Mr. Hal Herbert (Vaudreuil):: Madam Speaker, would you be good enough to call notices of motions Nos. 77 to 81 inclusive?


Madam Speaker:: Notices of motions for the production of papers Nos. 77 to 81 transferred for debate.
Family Allowances Act, 1973


[Stage Direction]
Motion No. 77-Mr. Herbert:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House a copy of the latest signed agreement between the Government and the Province of Manitoba under the Canada Assistance Plan.
Transferred for debate.
Motion No. 78-Mr. Herbert:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House a copy of the latest signed agreement between the Government and the Province of Saskatchewan under the Canada Assistance Plan.
Transferred for debate.
Motion No. 79-Mr. Herbert:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House a copy of the latest signed agreement between the Government and the Province of Alberta under the Canada Assistance Plan.
Transferred for debate.
Motion No. 80-Mr. Herbert:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House a copy of the latest signed agreement between the Government and the Province of British Columbia under the Canada Assistance Plan.
Transferred for debate.
Motion No. 81-Mr. Herbert:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House a copy of the latest signed agreement between the Government and the Province of Prince Edward Island under the Canada Assistance Plan.
Transferred for debate.
Madam Speaker:: Shall the remaining notices of motions for the production of papers be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


Monique Bégin: that Bill C-132, an Act to amend the Family Allowances Act, 1973, be read the second time and referred to the Standing Committee on Health, Welfare and Social Affairs.
She said: Madam Speaker, I am pleased to introduce Bill C-132. This Bill is one of a series of initiatives which were announced in the budget of June, 1982. The changes in the Family Allowances Program which are outlined in this Bill,

December 1, 1982
Family Allowances Act, 1973
together with similar changes to the Old Age Security Act, the Income Tax Act and a number of other related Acts, comprise what has now become known as the Government's "six and five" program. The changes to these Acts were offered only after the most careful consideration on the part of the Government, but with the full realization that the way to defeat inflation for Canadian families and the way to economic recovery requires some degree of sacrifice by all Canadians. Family Allowance recipients-in other words, mothers-are among those many Canadians being asked to make this sacrifice. 1 repeat the expression I used for the Bill reducing the indexation for seniors who do not need the supplement- that they are being asked to make a sacrifice with others.
Although the modifications in child-related benefits contained in this Bill are relatively modest, we are confident that the example being set by Family Allowance recipients, by mothers across the country-which means by lots of families-and by pensioners, civil servants, Members of Parliament and taxpayers, as part of a national will to fight inflation, will be followed by all Canadians.
What does this Bill do? 1 will say exactly what it does in the hope that Opposition colleagues who want to speak on the Bill will limit their speeches, as provided for by the rules of the Fiouse, to the Bill in question and not carry on with misinformation in the way that took place during the discussion on the Bill concerning old age pensions.
Specifically, this Bill proposes to limit, only for those who can afford it, the indexation of Family Allowances to a 6 per cent cost-of-living adjustment in 1983 and a 5 per cent adjustment the year after. Right now, the Family Allowance payment is $26.91 per month per child. When families receive their cheques on approximately January 20, the amount payable for each child will be $28.52. This will rise to $29.95 the year after.
Flon. Members will recall that Alberta and Quebec have opted on their own to vary the federal rate. Therefore, the amount per child will differ somewhat in those Provinces.
As a consequence of this Bill, only one-third of Canadian mothers receiving Family Allowances will get a smaller increase than anticipated for their child benefits in the coming two years. 1 want to emphasize the fact that this Bill permits an increase in all Family Allowances for the next year, indexation has not been eliminated completely; the principles of universality and indexation are maintained. Furthermore, we have acted to ensure that all families in the low income range and younger families in the middle income range will not be adversely affected by this two-year measure. The previous Minister of Finance stated this clearly in his June budget, and 1 also explained in an insert which was mailed with the Family Allowance cheques at a later date that the Child Tax Credit in 1982, which is to be received early next year, will be fully indexed to the cost of living.
In addition, all recipients of the Child Tax Credit, which are two-thirds of Canadian mothers, will receive a one-time special
increase of $50 which will be added to the credit in order to compensate for the capping of indexation of their Family Allowances. This means that the two-thirds of all mothers who receive the full Child Tax Credit will receive $343 in the coming months instead of the indexed $293 that they would have normally received. They received far less last year. While they would have received $293 in the forthcoming year, they will receive $343 in Child Tax Credits per child. This is nontaxable. Two-thirds of the Canadian women who receive the Family Allowance will benefit from this increased Child Tax Credit. This represents approximately two and a half million recipients.
Families with incomes, including combined family incomes where applicable, which are less than $26,330 in 1982 will receive the full Child Tax Credit. Families whose income is above that level will also qualify for the Child Tax Credit but only partially. The Child Tax Credit will vary on a decreasing scale, losing 5 per cent of income above that amount. The increase is being applied in such a way as to allow all those receiving the Child Tax Credit in any amount under the present system to receive an extra $50. For example, a mother with two children will receive an extra $100 up to a family income of approximately $38,000. This is how the present Child Tax Credit system functions. I will comment later on the ceiling at which the full Child Tax Credit is no longer applicable.
This additional $50 credit will commence at the beginning of the two-year special restraint period toward achieving a rate of inflation of only 6 per cent and 5 per cent. 1 have insisted that this credit be given immediately because it is important for mothers to know how their family budget will be affected.
The first Family Allowance cheque to come next year will be delivered at the end of the third week of January. While the amount for all those who receive Family Allowances will be more, the amount that one-third of those families who are more financially stable will receive will be more, but less than anticipated. That is why we have indicated that this legislation particularly affects mothers in high-income families.
For this reason I was surprised to hear the Fiouse Leader for the Official Opposition (Mr. Nielsen) announce a few minutes ago that his Party will vote against the Bill. 1 do not quite understand their reasoning for such a decision. I want my explanation to be clear in the event that some dimension of the Bill has escaped some Members of the House. Mothers will receive their Family Allowance cheques in a slightly lesser amount than would be the case with full indexing. At the beginning of January they can immediately apply for their Child Tax Credit. I point out that the mothers who can apply for Child Tax Credit immediately are those without income or with very low income. They do not really come under the income tax system. They are the ones most in need. These mothers will be the first to have their returns processed by Revenue Canada and will be the first to receive their Child Tax Credit in the mail. They will receive these Child Tax Credit cheues by March. The cheques which they will receive
December 1, 1982

in January and February will be more than, they are now, but slightly less than anticipated. The amount for January and February will be $28.52 for each child. However, two months later and continuing until the end of the usual income tax period they will receive a non-taxable Child Tax Credit which will be much larger than anticipated and far greater than last year's amount.
In other words, I think it is fair to say that, with the exception of the months of January and February when families will be missing $1.40 per child on each of their Family Allowance cheque, their Child Tax Credit cheques will be greater in the months of March, April or May.
There is another group that will not be affected by this Bill. They are the children who fall within the jurisdiction of welfare agencies, Government Departments or institutions. They are the children who fall under the category we call Special Allowances. These special allowances are paid on behalf of children under the age of 18 who are maintained by the agencies I have mentioned.
Since we have been very careful and have had the proper tools to protect not only the low income families but the middle income families as well, the savings from this restraint measure are relatively modest. They represent $70 million over two years. This could be explained by the fact that there will be a reduction in Family Allowances of $320 million over the two-year period; however, there will be an additional cost to make up for the loss which the Child Tax Credit will cost the Treasury, amounting to $250 million.
It seems to me that through this Bill we are clearly asking those families who can afford it to make some sacrifices, and not for the purpose of saving money. I want to insist that it has nothing to do with saving money, which was often stated as being the purpose of the Bill touching on the old age pension because of the Government deficit and all the rest. Rather, it is to bring about economic recovery and growth which will directly benefit all families far more by protecting them against the ravages, the erosion of their budgets simply as a result of high inflation. This is the purpose of the Bill.
1 have been here for days and have listened to horror stories which told of the results if Family Allowances were capped in the same way as were old age pensions for those who did not need the supplement. I think I will hear all sorts of arguments from Hon. Members opposite. They will make a long shopping list of everything that is wrong, to their way of thinking, in the child benefit system in Canada, or of any unmet need or problem that they recognize concerning families and children.

I know, because this is what happened during the debate on the bill to cap indexation of Old Age Security benefits of people who do not need the supplement. I am also aware that some Hon. Members will rise and have the nerve to say that by capping indexation of family allowances for families who are well off, and I am not referring to middle-income families but
Family Allowances Act, 1973
wealthy people, we are undermining the principle of universality. Hon. Members in both opposition parties said this when we were applying the same procedure to the pensions of individuals who do not need the supplement. It is quite clear, however, and I would like to remind-

-in particular, I would like to remind the leader of the New Democratic Party that, contrary to what he said publicly a few days ago, universality will not be affected at all by Bill C-132, which we are discussing right now. It will cap the indexation for families which are quite relatively well off. To say that Bill C-132 is part of an attempt to change the fundamental nature of family allowance is as ridiculous as saying that the six and five program, applied to increases in, say, the Bell telephone system, is an attempt to get rid of the telephone system. The logic is approximately as brilliant, as far as I can see.
Perhaps Hon. Members opposite think that when we applied the six and five program to ourselves, to our salaries as Members of Parliament, it was done to get rid of the Opposition. Maybe that was a wish expressed by some people in some quarters, but the logic is quite weak. I think everyone will see that it is not a very reasonable attempt to harm the Government, to pretend that the six and five program applied to the Family Allowances of those who do not need it in the first place, those who do not need the special help of the state, means a major change in the program.

I think people ought to know that Canada has one of the best child benefit systems in the world and that many countries in this present day and age would not be able to afford the benefits we have been providing for the children of Canada for years. For instance, France, which the Province of Quebec is always so eager to copy, France does not pay any family allowances to families with only one child, no matter what the circumstances are. In addition, the present Government in France is looking at new taxes as a way to cut its expenditures. Details are now being discussed, and there were reports last week in French weeklies including Le Point, L'Observateur, L'Express and in the newspaper Le Monde. France is now looking into a new tax measure under which families will be paying directly for their own family benefits, and this in addition to the present tax burden on all French families. I am not saying this to critize a foreign country, especially a country like France. In fact, I could say the same thing about West Germany, for instance, which also has family allowances. Just recently, I read that the West German Chancellor announced a proposal that will substantially reduce family allowances, and the worst part is that it will apply to families with more than two children. Belgium has just announced a temporary reduction in its family allowances, and there is a possibility that family allowances for the first child will be dropped. In other words, many countries are having to cope with the same economic difficulties as we are. I think it is very unfair, but I suppose it is to be expected in politics, that the Opposition is

December 1, 1982
Family Allowances Act, 1973
blasting the Government for poor management. Although there may be a difference in degree, the economic situation is pretty much the same in all western countries, and each country is making adjustments according to the ideology of the party in power.
We have decided that people who need help must get it. We have said time and time again that our first priority is to help those whose needs are greatest. 1 could add another word that could or should be the basis for any future changes in the family allowances program, and it is the word "redistribution". I think everybody knows what this means, but in any case, redistribution means taking from groups that have a lot and then making sure that they do not get anything until those who do not have anything at all have received a fair share. Perhaps 1 should be a little more specific with respect to family allowances.

When we speak of children and the federal Government, we speak of only one program, Family Allowances. In the recent past, but not for the first time, many rumours have fed a public debate which never took place except among the media or through editorials. However, the public debate which really never took place in our country was with regard to what is called being for or against universality of Family Allowances. I submit that this is not the proper terminology and is not the concept at stake at all. Universality is a problem in medicare. That is where it really applies. However, to my way of thinking as Minister of National Health and Welfare, what really applies, because of our social policies, is the objective of equity and redistribution and caring for those most in need. If we had the appropriate equipment in Parliament, I would be able to give Members a graphic, visual presentation of the three levels of child benefits that flow to families from the Government of Canada at the present time. We would see that the total sum of benefits received by families are not well distributed in terms of equity and redistribution.
Another question is, if it is not suitable, why do we not change it? That is another question which I will address shortly. There are three elements in the system. One is the well-known Family Allowance which is taxable and goes to every child in the country through his or her mother. Another is the Child Tax Credit, of which I must say we are very proud and which was introduced in 1978. It is a mechanism to distribute the benefits only to those with the least income. We could ask ourselves if it is "normal" that it is available up to such high income levels. I will ask that question in a few minutes. However, the concept is surely the best we could have worked out.
[ Translation]
When it was introduced, the child tax credit went to all families earning less than $18,000, and over and above that amount, the tax credit gradually dropped to zero. However, as a result of indexation, we have reached the point where the
child tax credit applies to children in families earning as much as $26,000 or more. That is a lot of money, and as a result, two-thirds of Canadian families are receiving the child tax credit. Low-income families receive the full family allowance, while in other cases, the allowance tends to be less, since it is taxable for other Canadian families. The child tax credit is received in addition to the family allowance. Both low- and middle-income families receive the full child tax credit, which gradually drops down to zero for families who do not need it at all. In addition to all this, and there is a problem here, we have what is called the personal deduction for dependent children, which is part of the income tax system. Either parent, depending on family circumstances, may claim the deduction. I do not remember the exact amount, but I think it is fairly high. I cannot find it in my notes, but I think it is substantial, and if I remember correctly, the exemption is at least $600 per child, or about that amount . . . $670 per child on the next tax return, I am told by my colleague from Kingston and the Islands (Miss MacDonald) and I thank her for this information. A tax exemption is the opposite of a tax credit. With a tax credit, the less you earn, the more you get, and with the tax exemption, the more you earn, the more you benefit, and this means that practically speaking, mothers with a family income of less than $10,000 never even see this money. The tax credit concept, a relatively modern one in the taxation system, was introduced about ten years ago and is gaining acceptance, although there is considerable resistance among fiscal experts. Thus, the child tax credit is extremely important because with it we have introduced an entirely new element in the fiscal system, a measure that is judged to be very significant in redistributing wealth and removing some of the social injustice in our society.
This is also the mechanism we will need one day to establish and deliver a guaranteed annual income. Speaking about the child tax credit, there are two matters about which I would like to say something. These changes may be an improvement, and this is what I want to ask. We also have to consider whether such a decision would be appropriate at this time when Canadians are very worried about the economy, when they need to tighten the family budget and to know where they are going. This is not an easy question to answer. The other change which I think might be an improvement has to do with the child tax credit and a double scale of benefits. The first thing we have to ask ourselves is whether or not it is right in our society that families with an income over $26,000 receive the full child tax credit. I do not ask this question because I think there is something wrong in making $26,000 or $27,000 a year. Quite the opposite, I am very happy for those who do and the more there are, the happier I will be, because it means that our society as a whole is richer. This has to be mentioned because it is important. I ask the question because of something I said in my speech on old age pensions and which, to my knowledge, was not picked up by any Member of the Opposition. Obviously, no federal or provincial Minister of Health and Welfare in this country or in other Western countries will
December 1, 1982

be able in the next few years to get more money from the Consolidated Revenue Fund, in other words, from the taxpayers' money to add to his or her programs. This is what I am trying to explain.
The hundreds of millions of dollars which I used to obtain for this purpose no longer exist. We shall have to rely increasingly on a method which I have used myself. I do not recall how the votes divided, but 1 presume-my colleagues will correct me if 1 am wrong-that it was with the agreement of whole House that the bill creating the child tax credit was passed late in the Fall of 1978. You may remember that everyone supported the bill, at least I think so. Everyone voted. 1 am not sure how the Progressive Conservatives voted, but I shall check on it and I hope for their sake that they had enough common sense to vote for it. I am sure that they would support it today, but 1 do not remember what they did at the time. 1 presume they supported the bill. With regard to the financing of the child tax credit Hon. Members will remember that I had to withdraw a special exemption of about $50 for each child and that I was also forced to limit family allowances that same year. We considered it better to make the redistribution within the child benefit structure than to delude ourselves that we could find hundreds of millions of dollars elsewhere. At the time, as Hon. Members will recall, I had to agree with the indexing of the ceiling for families eligible to the full child tax credit. The ceiling was $18,000.1 left it at $18,000 because each year it would allow a greater redistribution to poorer families. However, since politics is the art of the possible, this amount was indexed and it is now over $26,000, which means that two thirds of all Canadian mothers receive the child tax credit. I now ask this question and I ask it in earnest: Is this what we want? Because among those receiving the child tax credit many are over the poverty line. I have asked the other question to various groups who represent what we call small wage-earners and people on welfare.

As the Child Tax Credit is now such a large amount, mothers may tell us that it would be better for them to receive it more than once a year, possibly three or four times a year, or one day each month, because of the need in the family budget.
I resisted that, against much advice from professionals in the field when the Child Tax Credit was created because I thought, and mothers confirmed to me, that a large amount distributed once a year is precisely something for which low income families can never budget properly. It goes either for bicycles for the children, a washing machine or something else that is needed in the family.
Now that the amount is double what it was three years ago, it is worth asking the question. I asked the Anti-Poverty Organization to look into that problem and advise me accordingly.
Family Allowances Act, 1973
I have repeatedly touched upon what I believe could be improvements in the child benefit system. I again stress there is no point in dreaming about hundreds of millions or billions of dollars, which only God knows where to find, to add to the budgets of these statutory programs. Instead, in the future we will have to look to improvements from within. The Family Allowance costs Canadians about $2.2 billion, of which close to half a billion dollars comes back through income taxes. The value of the Child Tax Credit is close to $1 billion in benefits. The Child Tax Exemption would be around $800 million.

Having said that, Mr. Speaker, I simply want to repeat that the universality or indexation of family allowances will not be affected. We are not doing away with indexation, we are keeping it for everybody. It is only being capped for all families that are relatively well-off, which means in fact only one third of all Canadian mothers. I should not have to apologize for this, because both the rich and the poor in our society are affected, the families in which a son, a brother, a husband or a wife may have lost his or her job due to the hard times, a main cause of which is the fact that the shopping dollar of every family is being eroded by inflation. What is better then for the people? To feed inflation and keep it at the 12 or 13 per cent level with full indexation or to take the bull by the horns and attack inflation head-on? Of course, it is to attack inflation, and anyone involved in public administration is aware of the need for psychological persuasion and a general mobilization, if inflation is to be wrestled to the ground. And this general mobilization, we in Canada have decided to achieve it through the six and five program. These figures, of course, have been chosen arbitrarily, but they should make it possible for us to cut the 12 and 10 per cent inflation rates by half and bring them down to 6 and 5 per cent. These are our objectives, and in order to achieve them, we are asking all those responsible for various areas in our society to follow suit.
That is why I am asking-and I make no excuse for it-all Hon. Members, including those in the Opposition, to join forces with us to vote in favour of Bill C-132, with the assurance that both Quebec and Alberta are prepared to amend their legislation accordingly, since Family Allowances Act of Alberta is different from ours. This type of co-operation between governments-I insist on this, because it is important-reflects a common effort to bring about an economic society in which inflation is under control.


Flora Isabel MacDonald: Mr. Speaker, I listened with care to the comments the Minister made in opening the debate on this Bill. One statement she made was that she anticipated that Opposition Members would make a shopping list of everything they think is wrong. I have to tell the Minister that if we were to prepare a shopping list of everything we think is wrong with what the present Government is doing, we would be sitting here for days on end. She would really have to move to impose closure, because

December 1, 1982
Family Allowances Act, 1973
there is no end to what is wrong with what this Government is doing.
1 also say to her that it is not only Members of the Opposition who are making shopping lists of what this Government is doing wrong. Canadians from one end of the country to the other are making similar shopping lists. They are waiting for the opportunity to present them to the Government when it gets around to calling a general election. Then they will show this Government what it is doing wrong.
As the Minister said, this Bill is part of a package of three linked together which deal with limiting the indexing of Old Age Security, Family Allowances and superannuated public servants. It is one of three Bills which affects pensions and benefits to children. The Minister spoke about pensions and benefits to children, both in this House and in broadcasts outside this House.
When the first of these three measures was introduced-Bill C-131, which limited the indexing of old age pensions-in her remarks in the House the Minister told the senior citizens of this country that they should be the ones to lead the fight in the battle against inflation. That was her charge to the senior citizens of this country. In the course of that debate and in responding to the Minister, I made the point that what is needed is not a series of ad hoc Bills like this, but a comprehensive reform of our income security systems and our retirement income system. There should be a comprehensive analysis and reform of those systems so they meet the goals they were designed to meet, not only now but in the future.
It is clear to anyone who has looked at the income security system and the retirement income system that at the present time they are not meeting the goals for which they were designed. How can they when in this country over three million people are living below the poverty line? Those security systems are just not working. Much of the assistance is not being targeted to those most in need. In her remarks, the Minister made some reference to that. She said that through the security systems the income is not well distributed. I agree with her. Therefore, I urge her to get on with a comprehensive review of these programs.
But instead of reforming these systems, what does she do? Instead of reforming these systems so they better fulfil their purposes, the Government tries to impose a series of ad hoc measures which, unfortunately, will further distort and complicate those systems. What they will end up with as a result of these three Bills is that the anomalies and inequities presently in the system will be increased rather than diminished.
Having said that, I would like to proceed to the specifics of Bill C-132, an Act to amend the Family Allowances Act, yet another part of the so-called six and five restraint package which was announced in the budget last June. It sets monthly Family Allowance payments at 6 per cent above the 1982 level beginning January 1 of next year, and 5 per cent above the 1983 level, beginning January 1, 1984. Had the normal indexing procedure been followed, and assuming a 10 per cent
inflation rate in 1983, then Family Allowances would have been $1.48 per month more in 1983 and $3.05 per month more in 1984 that they would be if this Bill had not been introduced. What that amounts to, Mr. Speaker, is that over the two-year period this Bill will be in effect, mothers will lose $54 per child which they otherwise would have received.
Through this measure, as the Minister has said, the Government expects to save $320 million over the next two years. However, although it is not part of this Bill but was given extensive reference by the Minister in her comments, there is another measure which the former Minister of Finance introduced in his budget last June. That additional measure was that there would be a temporary increase of $50 per child in the refundable Child Tax Credit for the 1982 taxation year. On the one hand we have a program of deindexing Family Allowances, which is supposed to save the Government $320 million. Off-setting that is a temporary Child Tax Credit increase for next year which will cost the Government $250 million. The $50 increase, that one-shot temporary increase, will be available to mothers early in 1983.
These two measures, the deindexing of the Family Allowance which is incorporated in this Bill and the temporary increase in the Child Tax Credit, will mean that all families who qualify for the full Child Tax Credit-that is, those families with incomes below $26,300-will come out $32 per child ahead in 1983, and they will lose a little over $4 per child over the entire two-year period. Families who qualify for a partial Child Tax Credit will lose something between $4 and $54 per child over the two-year period. Those who do not qualify for any Tax Credit will lose the full $54. There will be, of course, a further loss when full indexing resumes in 1985: the base payment will have been permanently lowered.
I do not intend to speak at length on this Bill, but I would like to reiterate one point 1 made in speaking to the Bill on old age pension indexing just a few days ago, and that is that the Government's six and five restraint program is being applied in a most capricious and inequitable fashion. We have only to compare the treatment which the Government is meting out in the way it addresses the deindexing of old age pensions and the deindexing of Family Allowances to see this. The disparity between the sacrifice being asked of senior citizens and families with children betrays the callousness and lack of thought which went into these Bills.
1 spoke of this in the debate on the Bill on old age pensions, which took away the full indexing from the pensions of senior citizens, but it does bear repeating because the cold hard numbers which you associate with it clearly make this point. Assuming a continuing 10 per cent inflation, single old age pensioners with incomes of $9,000 will be asked to sacrifice $290 over the next two years. Not only that, they will continue to sacrifice in 1985 and after because the base for their future pensions will have been permanently lowered. The $290 which they are being asked to sacrifice represents, perhaps, a month's rent which they will have to find from some other source, if they can do so. That is what they are being asked to sacrifice.
December 1, 1982

What is the Minister asking a family with two children and an income of $26,000 to sacrifice? Under Bill C-132 which we are looking at today and its related budget measures, these families will be asked to sacrifice $8 during the same period. Moreover, the maximum sacrifice any family will be asked to make, no matter how high its income, will be $54 during the period that this Bill is in effect.
What a comparison of the impact of these Bills shows, Mr. Speaker, is that some families with children in Canada will be slightly better off in 1983, assuming the one-year increase in Child Tax Credit. Yet no senior citizen will be any better off than they are now, and this includes the 360,000 who have no income other than Old Age Security and the Guaranteed Income Supplement, because there are no off-setting measures for those at the lowest income levels as there are in the case of families with children. One is given a special benefit, the other is not. In addition, the 1.2 million senior citizens who do not receive the income supplement will be considerably worse off. That is the difference in the way this Government is approaching these two Bills. It simply will not accord the same treatment to the senior citizens of this country that it does to families with children.
1 ask the Minister, where is the equity there? How can the Minister justify this disparity? The answer, surely, Mr. Speaker, is that she cannot. In fact, she does not even try. What the Government does is ignore the difference in the way that it is imposing the six and five restraint program. It is pretending that no differences exist. And I may say the Government is becoming quite good at that because it has had lots of practice at that kind of hypocrisy.
The Government claimed earlier this year that it was not reducing its commitment to medicare and post-secondary education. At the same time, its own estimates showed that almost half a billion dollars less was being spent for these purposes, but it chooses to ignore that.
Take another case. The Minister of National Health and Welfare (Miss Begin) claimed several times recently in this House that negotiations were proceeding with the Provinces on a new Canada health act.
Yesterday, the November 30 issue of the respected trade newspaper, The Medical Post, was sent to every Member of Parliament. It quoted several provincial Ministers of Health to the effect that there had been no negotiations on the new Canada health act since last September, and further quoted the federal Minister's own press secretary, Bernard Dozier, as saying: "At the moment there are no actual physical discussions going on between Ottawa and the Provinces".
The point I want to make is that what they say and what they do bear little resemblance to each other. Nowhere was this more evident than in a statement specifically related to this Bill, a comment which the Minister of National Health
Family Allowances Act, 1973
and Welfare made in an interview on "Canada A.M." on November 4, when she said:
All social programs, that means in particular pensions and all benefits for children, will remain the way they are.


Monique Bégin: That is true.


Flora Isabel MacDonald: The Minister says that that is true. Bill C-131, which deals with pensions, Bill C-132, which deals with Family Allowances, and Bill C-133, which also deals with pensions, are on the Order Paper. What are they doing there if the Minister says that benefits for children and pensions will remain as they are?


Monique Bégin: They will.


Flora Isabel MacDonald: The Minister says they will. These Bills cut those programs back. Is anyone really trying to pretend that these three Bills do not affect pensions and benefits for children? Is the Minister really saying that they will have no effect on those programs?
[ Translation]


Monique Bégin: Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Laniel):: The Hon. Minister of National Health and Welfare (Miss Begin) rises on a point of order.


Monique Bégin: Would the Hon. Member accept a question? [English]


Flora Isabel MacDonald: When I am through with my speech, certainly I will accept a question from the Minister and 1 will have her statement right here in order to answer it, Mr. Speaker.
I really want to pose the question to her, after having made that statement, is she really trying to pretend that these Bills do not have any effect on pensions or on Family Allowances? The Bill before us is entitled "an Act to amend the Familly Allowances Act, 1973". Perhaps we are to take the Minister's statement as a pledge that there would be no further changes. Perhaps that is what she wants to explain. The truth is, Mr. Speaker, that the Government is backing out of its obligation-wherever it can conjure up the ghost of a pretext for doing so.
With the enormous deficits we now face, the need for restraint in expenditures is, of course, clear. What is inexcusable, however, is the series of Bills before us with these ill-conceived, ad hoc measures for restraint. These Bills ignore such basic principles-to which I thought the Minister was committed-as contractual obligations, the distinction between essential and non-essential expenditures, and the necessity to graduate the levels of sacrifice required from different income groups. The Bills ignore these principles.
These are the principles this Party has consistently fought for in responding to the Government's restraint program. I would say to the Minister that we will continue to fight for these principles through all stages of this Bill and through all stages of Bill C-131, which deals with old age pensions, and
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Family Allowances Act, 1973
Bill C-133 which deals with pensions of superannuated civil servants.


The Acting Speaker (Mr. Blaker):: Before 1 recognize the Minister of National Health and Welfare (Miss Begin), it has been indicated to the Chair the Minister of State for Finance (Mr. Cosgrove) has requested permission to revert to motions.


Some Hon. Members:: Agreed.



ROUTINE PROCEEDINGS


Paul James Cosgrove: Mr. Speaker, I should like to draw to the attention of the House that I rose earlier today to table a motion to amend the Income Tax Act. The Table officers have brought it to my attention that the motion should have included the Income Tax Act Application Rules, 1971.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Miss Begin that Bill C-132, to amend the Family Allowances Act, 1973, be read the second time and referred to the Standing Committee on Health, Welfare and Social Affairs.
The Acting Speaker (Mr. Blaker):: The Hon. Minister of National Health and Welfare (Miss Begin) had a question.


Monique Bégin: Mr. Speaker, the Hon. Member for Kingston and the Islands (Miss MacDonald) had the courtesy to let me ask a question. I shall do so to try to correct some important misinformation that she gave without permitting me to reply. This is a very simple question and I would like her to answer it.
The measure under discussion is a Bill capping, through six and five, the Family Allowances of those who do not really need them. Were the Bills on pensions not included in the budget at the end of June? The Hon. Member has the date of my broadcast; I do not because I did not know that she would bring this up today. Did 1 not speak on "Canada A.M." at the end of October or November, in which case I was absolutely right in what I said?


Flora Isabel MacDonald: Mr. Speaker, the Minister made the following statement:
All social programs, that means in particular pensions and all benefits for children, will remain the way they are.


Monique Bégin: When? I ask you, When?


Flora Isabel MacDonald: The statement was made on November 4. These Bills were introduced and put on the Order Paper at that time, so I ask the Minister how she could make the statement when she had bills on the Order Paper which were going to change the Family Allowance and the old age pension?


Monique Bégin: I am sorry, I am waiting for the answer to my first question. Were these measures not announced clearly in the budget at the end of June? Does the Hon. Member not know what a budget is?


Mrs. Margaret Mitchell (Vancouver East):: Mr. Speaker, I rise on behalf of the New Democratic Party to oppose Bill C-132. This Bill, to amend the Family Allowances Program, is another imposition by the Government of six and five restraint. In Bill C-125 last spring, the Government attacked workers with the six and five restraint. Recently we debated Bill C-131, an attack on senior citizens with its restraint on the old age pension. Bill C-132 is an attack on Canada's children, our most important national resource. It is an attack on families who are suffering from the highest unemployment rate in our history. They need every cent of their monthly Family Allowance cheques to pay the extra cost of clothing and feeding their children.
The Bill is also a slap in the face for women. I am sorry that the Minister is not in the House at the moment to listen to this point. The Family Allowance cheque is sometimes the only cheque that many women in Canada receive in their own name. This has great significance, even for mothers in high income families.
Even more harmful from the point of view of this Party- and I did not hear the previous speaker refer to this matter-is the fact that this Bill, following upon Bill C-131 which capped indexing and eroded the universal old age pension, is a deliberate Liberal strategy to erode Canada's universal social security system, in this case Family Allowances.
The Minister denied this but then she quickly said that the purpose of the Bill was to gear the Family Allowance to lower income people. Of course, we are in favour of adequate support for low income people, but we are also in favour of a universal Family Allowance.
I strongly suspect the motives of the Government in this matter. The basic monthly Family Allowance has been a right in Canada since 1945 when, as a result of CCF pressure, it was first introduced in the House. It is not something that can be taken away at the whim of an uncaring Liberal Government or, for that matter, a Tory Government. The federal Government, by reducing the cost of living on Family Allowance
December 1, 1982

cheques, is signalling that it no longer gives priority to the maintenance of the Family Allowance Program to cover all families in Canada.
The Minister repeatedly denies this, but at the same time her application of this proposal enforces the point I just made. Last June 29, the Minister of National Health and Welfare (Miss Begin) claimed that the June budget "fully protects the lowest income Canadians and the working poor". Only persons "who are not in need will be asked to share in the serious sacrifices which are required to bring our country out of the economic crisis". We agree with the National Council of Welfare which indicated that the social policy aspects of the June budget would adversely affect thousands of low income Canadians.
Family Allowances until now have been fully indexed, but the budget first, and now as expressed in Bill C-132, will limit indexation to 6 per cent in 1983 and to 5 per cent in 1984. If there had been no budget and no Bill C-132, Family Allowances would have been $358.44 per child in 1983. However, with the budget cutback it will now amount to only $342.24 per year. This reduction means a great deal to many families with children, including middle-income families. Let us not kid ourselves; it is not only low income families who are having trouble these days. Middle income families are suffering from the high cost of living, are being threatened with unemployment and are probably paying off mortgages at exorbitant interest rates. They are hit hard as well. If they have two or three children, of course it is difficult for them to manage.
The Minister stated that she chose to protect the Child Tax Credit which goes to low and middle income families by retaining full indexation to the cost of living. However, she failed to point out that the Child Tax Credit is an annual refund, whereas most families depend upon monthly Family Allowance cheques to cover the costs they face in purchasing clothes and school books and in putting food on the table for their children.
The $26.91 per child is little enough as a Family Allowance to help with the costs of raising children each month. It does not even pay for the cost of a pair of jeans which most children need today, or the expensive runners which they also require. Of course, the price of these items will increase far above 6 per cent during next year. I know many families who do not seem to be known by the Minister that urgently need their Family allowance cheques, not at the end of the month but before the end of the month, to put food on the table. I know many mothers who simply do not have food to feed their families. Their welfare cheques are gone on rent and other costs, and they desperately await their Family Allowance cheques to put food on the table. I am sure there are many people who are working part-time or on unemployment insurance who have the same problem. The Minister does not seem to realize how important this is.
Also I should like to say that even higher income families use the Allowance as an essential part of their monthly income, often as an allowance for teenagers or for educational expenses. With unemployment reaching the highest level in our history, there are many families who normally would not
Family Allowances Act, 1973
have relied on Family Allowance for basic survival but now really need it just to keep food on the table and clothe their children.
Children are a state responsibility; they are not only the responsibility of individual families. I refer back to the report of the National Agenda for Action in a book called "For Canada's Children", which was a result of a study by the Standing Committee on Health, Welfare and Social Affairs. It was put out by the Canadian Commission for the International Year of the Child. I see the Hon. Member for Laval (Mr. Roy) has left the House. He chaired that Standing Committee. He will recall that the Committee committed itself, and it thought the Government, to some major steps. This is what it said about children:
Children should be a first priority, but in the structure of the Government of Canada there is no place where they are a primary concern.
The Minister has given several examples of this recently. It continued:
Children are the responsibility of all levels of Government we elect to represent us. Children are not independent economic entities: they depend on the family for their economic welfare. The normal working of the economy and the economic policies of Government therefore tend to affect the child indirectly through the family.
Also it said:
Since the quality of life of Canadian families is inextricably linked with the economic decisions made by governments, a concerted effort should be made to ensure that the economic decision making process takes into account the wellbeing of the family and the child.
Unfortunately, the Government has ignored this sound advice from the Canadian Commission for the International Year of the Child. It has ignored it by not establishing a secretariat for children which the Commission recommended that could have certainly taken a stand on the matter before us today. Also the Government ignored the Commission Report in the development of its program of restraint and, in particular, in drafting the Bill before us.
The Family Allowance cheque traditionally recognizes the importance of children and families in Canada. It is the only means by which pay cheques and Unemployment Insurance cheques are topped up to allow for the cost of feeding and clothing children each month. Under our system a single person receives the same pay cheque as a married man or woman who has several mouths to feed. We have developed as a Canadian tradition, of which most of us are very proud, a way to adjust to additional size and responsibilities of families with the monthly Family Allowance cheque indexed to the increase in cost of living and with tax deductions for dependants.
Of course, the Family Allowance cheque is very important to all families, not only low income ones. Also I should like to say that the cheque is of particular significance to women, as I mentioned earlier. It is usually mothers who are the main parenting persons in the home. They are the persons who receive the Family Allowance cheque. For women who are full-time homemakers, often the Family Allowance cheque is the only one they receive in their own names. Perhaps many

December 1, 1982
Family Allowances Act, 1973
Members sitting in the House do not realize the significance of this, but I ask them to think for a moment about how they would feel if they had worked hard all their lives raising children and looking after a home, with no pay, no benefits, no pension, and were now being faced with a reduction in the one cheque which comes in their own name.


Mr. Kelly:: You are being silly.


Margaret Anne Mitchell: The Hon. Member says that 1 am being silly. He should hear from some women across Canada as we have, such as those on the Task Force on Older Women who do not think that this is silly at all. It is very basic from the point of view of women.


Some Hon. Members:: Hear, hear!


Margaret Anne Mitchell: The Family Allowance cheque is of particular significance to women. Increasingly in today's world homemakers and mothers who are in the home full-time or during a good part of their lives receive no recognition, and recognition today is usually in the form of remuneration, unlike it might have been in previous generations. About the only thing they get is a card on Mother's Day and the Family Allowance cheque. To reduce the cost of living by discontinuing the indexing of Family Allowance cheques is a slap in the face to the women of Canada and to full-time mothers. The Liberals in effect are telling mothers that they are not important. In other words, mothers are the ones who can be made to pay for inflation in Canada today. They are telling mothers that they can buy second-hand clothes for their kids at lower cost because they are not going to maintain indexing to keep up with the real cost of living. This is what the Liberals are saying to many mothers and families. It is a callous Liberal Government that says that. There are many other ways the Government could have saved money, and indeed brought money into the coffers, other than by taking this means in a period of recession.
In the future, if our economy improves-if it ever does-I would like to see us consider the possibility of increasing the Family Allowance to an amount which more adequately would recognize the parenting role of a mother or a father in the home. An increased allowance, when we can afford this, could help cover the cost of daycare for a working parent or could be a means for full-time homemakers to pay into the Canada Pension Plan in their own names. We will be debating this point when we get around to the Green Paper on pension reform.
Recently I attended hearings of the New Democratic Party Task Force on Older Women. These hearings were held in every province of Canada. A woman in Fredericton proposed that the monthly Family Allowance should be raised to a minimum of $200 per family per month so that women could have the choice to remain in the home to care for family members full time and have some financial recognition, not a full wage, but some recognition for this labour. It could also
provide the means for some homemakers to pay into the Canada Pension Plan on their own behalf. For mothers who work it could help to pay for daycare costs. If we believe that children are our greatest resource and that parents should have a choice of how they care for their children, this is indeed a very interesting proposal. One caution in that regard is that we do not want changes which would increase the ghettoizing of women in the home and would further exploit their labour as has traditionally been done in the case of homemakers.
We in this Party believe that we must retain the full Family Allowance, paid monthly, and that a monthly payment is essential for each child. It should increase as soon as the economy can allow for this. In order to finance this universal allowance more equitably, we have a proposal which I did not hear the Minister mention at all, nor did I hear the Hon. Member from the Conservative Party mention it. We propose that the financing of this universal program-and the same thing applies to old age pensions-could be paid for more equitably through a reform in the tax system. The highest income people in society would repay the full amount through a more realistic income tax system. We are opposed absolutely to a means test for Family Allowances for the same reason that we oppose a means test for old age pensions. A means test stigmatizes people. It adds to bureaucratic costs. It is far better to reform the tax system and tax back the allowances from wealthier families while maintaining a universal Family Allowance Program as a right.
Both the old age pension cheques and Family Allowance cheques are not socked away in the bank. The money received from them goes immediately into consumer goods and is recycled within our economy. Indeed, this is a stimulus to small business and certainly helps to maintain jobs. Those allowances are important from an economic point of view as well as a social right.
The NDP stands solidly behind universal social security for Canadians. We fought for adequate pensions, pensions above the poverty line, and we will continue to do so by resisting the imposition of six and five on the basis of the old age pension.
We fought for the right of workers to unemployment insurance and disability coverage. We are proud that we have a Program now. Compare the tragedy we would be in if we were back in the same situation as workers were in the 1930s.
Universal medicare was pioneered by Tommy Douglas in Saskatchewan. Medicare is now available to all Canadians. Finally, in 1945 after considerable pressure from the CCF and the labour movement, universal Family Allowances were initiated. These allowances became taxable in 1973, but their being taxable meant that only a portion of the allowance is returned through our income tax system.
We know that the wealthiest people in society pay no income tax at all. That is where the Minister of National Health and Welfare (Miss Begin) can get more money for her restraint program instead of taking the money from the backs of children and families.
December !, 1982

1 repeat, Family Allowances are a right. Family Allowances must not be considered welfare. They must be fully indexed to the real cost of living, not to a six and five reduction in the cost of living beginning next year. Since the Liberals want to target those most in need, why do the Liberals not reform the tax system and have the higher income people pay more and the lower income people receive more? Of course, we are in favour of the Child Tax Credit system. In fact, we would like to see this system expanded to a guaranteed annual income. That is not to say that we should not have a universal Family Allowance Program as we have described it.
The Liberals, through Bill C-132, are signalling to us and to Canadians their willingness to erode the universal Family Allowance system in Canada. The Minister can deny this, but we have quotes from the former Minister of National Health and Welfare who is now the Minister of Finance (Mr. Lalonde). On November 3, 1982, he said:
The Government may end universality of the family allowance program but will not cut old age security benefits.
According to the article, we find:
Lalonde said in an interview he disagrees with some of his colleagues who say universal social programs are a basic principle of Liberal philosophy.
And he believes Canadians may be ready to swallow an end to universality of family allowance in which all parents, regardless of income, receive monthly benefits. He thinks they may be ready to accept that such benefits should go to those most in need.
Another sentence from this article reads:
But he said family allowance is an open issue on which he hopes there will be a cool-headed, rational debate.
When our leader questioned him in the House a few days later, the Minister began to back down and waffle and said that he was not abandoning the principle of universality but he still was going to keep an open mind on this question.
The Minister of National Health and Welfare can say all she likes about retaining universality, but that does not sound like a very permanent commitment to us.
We also know from press reports that the Liberal Government during the summer, and the Cabinet in particular, was considering the whole concept of universality as it affected old age pensions as well. The Liberals, being very pragmatic, did not have the guts to go against the political reality, and when they heard from their supporters, even Liberal Members from right across the country as well as middle-income and higher income people, that they would not tolerate a cut in the Family Allowances, this is when the Liberals backed down. It is not because they believe in the Family Allowance in principle. No, that has never come into the question at all. It is simply political pragmatism, as it is with the Conservatives.
Speaking of Conservatives, 1 would like to know what their position is on universal social programs. The Hon. Member for Kingston and the Islands (Miss MacDonald) said not a word about this. All she talked about was the ad hocery of programs and the specific amount. She did not once affirm that the Conservative Party believes in universal Family Allowances for Canadians. Indeed, we have information which indicates that when the Tories were in Government very briefly in 1969, they
Family Allowances Act, 1973
had already begun a process to dismantle the universal Family Allowance Program.


Philip Derek Lewis: That is a lie.


Margaret Anne Mitchell: Let us have a statement to the contrary.


Philip Derek Lewis: You produce it. You made the statement.


Margaret Anne Mitchell: I would like to hear from the Hon. Member for St. John's West (Mr. Crosbie) the Minister of Finance at that time. What hypocrites both the Tories and the Liberals are. What a shame it is that political expediency is their only reason for retaining the Family Allowance Program at all.
We in the NDP will not tolerate an erosion of the Family Allowance Program in Canada. We do not say this because it will get us votes or it is politically expedient, but we believe that this is a basic principle of a democratic and enlightened society. It is the foundation of our social democratic philosophy. If one examines the practical governments and the practical economic and social achievements in the Scandinavian countries, West Germany and Austria which have had social democratic governments, one will see that it has worked well both from an economic and social viewpoint.
We will not join the Liberals to victimize Canadian children. We insist that there must be a retention of full indexing on Family Allowances. As I said earlier, we believe that Canada's children are our number one resource. They are the responsibility of society as well as a family responsibility. I heard one Conservative Member laughing and making a joke of this remark when I said it earlier.


Philip Derek Lewis: Which one?


Margaret Anne Mitchell: Family Allowance is a right. It is not a gift. Its purpose is not simply to give children a nice present so that their parents will vote for the Liberals or the Tories. The Family Allowance is needed to cover the extra cost of having and raising children. Surely in today's world it is needed more than ever.
Our regret is that the payments cannot be higher at this time. We also regret that the Liberals will do nothing to implement a more just tax system to recover some of the costs of that Program from those who need it least.
Let us discuss dollars and cents for a moment and review the Government's spending priorities. The total cost of Family Allowance is approximately $2 billion. The amount that the Government will save by imposing this reduction in the cost of living index under Bill C-132 is approximately $320 million. In view of all the other priorities and areas where cuts could be implemented, I wonder if the Minister believes that she has chosen and supported the proper program to cut. For example, one can consider our obsolete F-18 fighter planes. One plane costs $37 million. We have ordered 138 of them at a total cost of $5.2 billion. Are these airplanes more important than Canada's children and a universally protected Family Allowance Program?

December 1, 1982
Family Allowances Act, 1973
The Hon. Member for Broadview-Greenwood (Ms. McDonald) referred to federal Government advertising programs that cost $60 million when she was talking about old age pensions. This money would pay for the funds the Government is trying to bilk out of the hides of senior citizens under the other Act. We can suggest other examples, such as embassies which are not needed at this time.
The amount which is paid to approximately 3.5 million mothers on behalf of seven million children covers children under the age of 18. We know that our birth rate in Canada is declining and certainly the cost of raising children is a major factor in that decrease.
As 1 mentioned in the House the other day, the only group in which there is a large increase in the birth rate is among adolescent mothers. This tragedy, which I pointed out in the House, was not responded to in a positive way by the Minister, and it must be recognized by the Government. Since the majority of these adolescent mothers unfortunately keep their children and raise them by themselves, in many cases the Family Allowance is basic to their survival and that of their parents who often take over the responsibility of raising the children.
The Family Allowance Program covers approximately 50 per cent of our population who have children under 18 years of age. 1 have indicated that it is very important that this allowance be paid on a monthly rather than yearly basis. 1 was very surprised that the Minister of National Health and Welfare talked about perhaps making changes to the Child Tax Credit so that it be provided two or three times a year. 1 believe she indicated that she thought this Child Tax Credit was a nice bonus at the end of the year which might allow families to buy a refrigerator or some other item. 1 wonder where she has been. Has she recently talked to any families on welfare or families who are trying to live on unemployment insurance? Has she talked to any families who are trying to pay off a mortgage? They do not need that money for a new refrigerator. They need to put food on the table, and in many cases toward the end of the month it is very little food.
We feel that the Liberals and the Tories-I would like to hear from Conservative Members if they disagree-would like to establish a means test for most social programs, targeting these programs primarily to families in need. If this is true I would suggest that they are the mean Party. We believe that we must have universal Family Allowances just as we must maintain fully indexed old age pensions. These can be partially paid for by a reform in the tax system. However, there must be an adequate income support system as well. This is where 1 think the child tax system is justified. We would like to see further steps taken in that direction. It is the beginning of a guaranteed income system, but is presently far below the poverty line.
We do not favour the present punitive welfare system which essentially imposes a means test on Canadians. The welfare system does not provide incentives and, in fact, acts as a disincentive for many people, particularly single mothers, to finding alternatives and working for independence.
The present welfare system does not integrate the administration of national and provincial income support programs.
There are many varied programs with different eligibility requirements. Each Department has its own "fraud squad" which attempts to develop ways to deny people's requests. There are many highly paid bureaucrats who administer these programs since they are not integrated. Our Party suggests that there should be a reform of social programs. The whole question of Child Tax Credits and Family Allowances should be an integral part of this review.
The debate on Family Allowances cannot be limited to past and present economic circumstances only. We must retain a fully indexed Family Allowance but we must continue to look at the future. It is important that we consider all our social programs and policies with respect to future trends which, in some ways, are quite frightening for us to consider. In view of revolutionary societal changes which will take place, if they have not already happened, we must be prepared to re-evaluate and redesign the entire Canadian income support system. The micro technology revolution is displacing workers permanently and eliminating obsolete jobs in many sectors of our economy, particularly in the service, sales and clerical sectors which employ so many women. Massive layoffs, which are causing so much suffering at the present time, may prove to be permanent. It is frightening to think of workers in the forest industries, in many other resource industries and in the automotive industry in this country who were on unemployment insurance. They have exhausted their benefits and are now facing the need to apply for welfare. If we do not correct this situation they will remain on welfare. Of course, they lose all their savings and assets before they can apply for welfare benefits. Fully indexed Family Allowances are essential to their survival. However, from a long range point of view, we must do everything we can to create more jobs immediately and to plan for economic recovery, which will create whole new areas of jobs with different time arrangements. However even with the best of plans, one wonders if full employment in the traditional sense will ever be achievable again in Canada. Meanwhile, families will suffer and Family Allowances must be sustained and, hopefully, increased.
It is also urgent that we redesign and update our income support system and integrate the Child Tax Credit so that it will be available in a positive way as a right to supplement part-time wages. Part-time jobs may very well become a permanent way of work for many families in future. Hopefully, with planning, the robots which will come as a result of our technological revolution will be able to increase our gross national product so that we will be able to pay adequate income support supplements to retain families above the poverty line. We also need new kinds of work which are fulfilling and meaningful to society. Unfortunately, time does not allow us to debate futuristic matters further today. However, I would urge that all Parties put this on the agenda for full debate of social policy at a future time.
December 1, 1982

In closing, 1 want to summarize again the NDP's position on Bill C-132. We strongly support the continuation of universal family allowances and strongly request that full indexing of these allowances be continued and that they not be restrained by six and five cutbacks. We believe that old age pensions and Family Allowances are now considered by Canadians to be the basic foundation of our Canadian society. There is no doubt about it. They represent an economic stabilizer as well, and certainly will fill an economic need. We believe that we must not retreat from universality or apply a means test which relegates such programs to being welfare benefits rather than as a basic human right.
Therefore, we oppose Bill C-132 which imposes six and five restraints on Family Allowances because it is the first step by the Liberal Government in eroding universal Family Allowances. It asks families, particularly mothers, to pay for Liberal mismanagement of the economy, providing very little financial recovery in exchange for the damage which it may very well cause. It ignores tax reforms and other Government economies which would provide needed income and savings during this time of economic recession.
We will oppose the Bill for the same reasons that we oppose Bill C-131. It is a senseless attack on the basic social security programs. It turns people with children into scapegoats. It increases the value of the income tax tested portion of the program, the child tax system, at the expense of the universal portion, the Family Allowance. It permanently reduces the level of benefits to families at a time when two million Canadians are unemployed, three million Canadians live at poverty levels, and the costs of raising a family are the highest in our history.


Some Hon. Members:: Hear, hear!


Mr. Maurice Foster (Algoma):: Mr. Speaker, I am glad to have an opportunity this afternoon to speak on Bill C-132. I would like to consider it particularly in the light of the Government's six and five program, a program which has been very well received by the Canadian people. I believe that the Gallup polls, which tested public opinion on the program in September, indicated that some 65 per cent or 67 per cent of the people supported the six and five program. I especially want to mention the legislation here this afternoon relating to Family Allowances in conjuction with the Income Tax Act because upcoming legislative amendments will ensure that low and moderate income families with children are compensated via the Child Tax Credit for the reduced cost of living increases in Family Allowance benefits over the next two years in which this Bill will be in effect. By this action, the Government is demonstrating that it is concerned about family incomes and about families with children.
Indeed, it is fortunate that the Government introduced a refundable Child Tax Credit in 1978. This progressive Program was born of difficult economic times, but not as difficult as those we face in the country today. Therefore, it is only fitting that this vehicle should help many Canadian families with children during the current economic struggle. This program has been tremendously successful in the past and I
Family Allowances Act, 1973
think the Government should be commended for bringing in the Child Tax Credit in 1978.
Hon. Members may wonder why I am speaking about the Child Tax Credit Program when the legislation before us this afternoon is Bill C-132, the Family Allowances Program. It is true that the increase in the Child Tax Credit will be accomplished through the amendments to the Income Tax Act. However, I very strongly feel that Hon. Members cannot responsibly debate the Family Allowances legislation without considering the corresponding changes which have been made to its close relative, the Child Tax Credit Program. Further, if the two pieces of legislation were examined in isolation, Hon. Members could inadvertantly mislead and, indeed, unnecessarily alarm Canadian mothers in low and moderate income families. I am quite sure that none of the Hon. Members here would not want to do that this afternoon, although I do not really recall the two Hon. Members opposite commenting that, in fact, two-thirds of the families and mothers would, in fact, receive as much or more under the two combined Programs. The Child Tax Credit was introduced into the tax system in 1978 because the Government recognized that not enough financial assistance was being directed to low and middle income families with children, especially when compared with the considerable tax advantage offered by the income tax system to those in the higher income category. The Government knew that the best way to increase assistance on behalf of children was through a re-allocation of resources from within the child benefits sector. This was accomplished, first, by reducing the Family Allowances, effective January, 1979, to $20 per month from the figure at that time, which was $25.68 payable through 1978; second, by phasing out, over a two-year period, the higher child tax exemption for children 16 and 17 years of age, starting with the 1979 taxation year and, finally by eliminating the $50 per child federal tax reduction for 1979 and subsequent taxation years.
When the Child Tax Credit Program first began, the maximum credit available on behalf of each child eligible for the Family Allowance was $200. Families in which the net income of both spouses was $18,000 or less in 1978 qualified for the maximum credit. In the case of a single-parent family, this $18,000 threshold applied only to the parent with custody. Families with incomes above the threshold received progressively smaller benefits as their incomes rose. Maximum benefits were reduced by 5 per cent of the amount by which the families' net incomes exceeded the $18,000 base line.
The Government certainly received some criticism when it introduced the Child Tax Credit Program in 1978. However, many of the doubting Thomases were proved wrong when they said that the Program would never work, that mothers would not obtain the required social insurance numbers and that mothers would not apply for the benefit if they were fortunate enough to hear about the Program at all. As we all know, those fears were unfounded. Not only did Canadian mothers prove the critics wrong, they even surpassed the Government's best expectations. The participation rate for the Child Tax Credit

December 1, 1982
Family Allowances Act, 1973
Program is among the highest for all Government Programs. Because of the Program's great success, it has not proved necessary to make major changes in the Child Tax Credit Program since its introduction.
There was, however, one minor but nonetheless important change in 1981. At that time the legislation was amended so that, effective with the credit program in 1981, payment could be tied to the eligibility for the Family Allowance in January of the year the credit is paid. Originally the credit went to the person who received or was eligible to receive the allowance in December of the preceeding year. This meant that in certain cases where a child went from the custody of one parent to the other in December, the credit was paid to the parent no longer having custody of the child; so obviously this was a good amendment which ensured that the parent having the custody of the child would receive the credit. It also meant that if a child was adopted, or returned to his or her parent from an institution in December, no credit was paid to anyone. As well as this minor change, the maximum amount of the credit and the level of the family income threshold have been increased each year in line with the increases in the cost of living. For instance, in 1980 the maximum credit payable was $238.00 per child for families with a net income below $21,380. In 1981 these amounts rose to $261.00 and $23,470, respectively.
Had the Government not been required to make adjustments to this Program in order to bring inflation under control, the maximum child credit for 1982, that is the credit payable in the spring of 1983, would have been $293.00 per child for families with a net income of $26,330 or lower, in 1982. However, as I said earlier, because of the strategy the Government adopted in the June Budget, the six and five program, the maximum child credit payable in 1983 will be increased by $50. This means that the maximum 1983 credit will be $343.00 per child. The income threshold will remain at the previously announced level of $26,330.
There are really three points in the Child Tax Credit change which I believe the Hon. Members must keep in mind when considering the implications of the Family Allowances legislation that is before us today. First, the $50 increase will be sufficient to make up completely for any loss due to the 6 and 5 per cent ceilings on Family Allowance indexation which the 2.4 million low and moderate income families with children will experience over the next two years. The Government does not expect and will not permit them with their five million children to undergo a loss because of the steps that have had to be taken to facilitate the recovery of the economy.
Second, the $50 increase will be paid in advance of almost the whole period during which indexation of Family Allowances is limited. To elaborate somewhat, the reduced or capped indexation of Family Allowances will first be effective with the January 1983 Family Allowance cheques. But most mothers will receive their 1982 Child Tax Credit, including the $50 increase, by March or April of 1983. This means that
most families receiving the credit will obtain total compensation for the limited allowance well in advance of most of the period during which the cap on Family Allowance benefits is in effect. I feel that this is an especially significant and positive feature of the legislation which should not be overlooked. It is no coincidence that the same approach was taken when the original Child Tax Credit legislation was introduced.
I should also point out that the $50 increase in the Child Tax Credit will approximately balance the loss in Family Allowance indexation only if inflation remains at the high rate we have seen during the past year. If the six and five program works in the way in which it is protrayed, the rate of inflation will be lower in 1983 and 1984. This means that in the second year of the six and five program, the effect of the cap on the Family Allowance rate will be minimized. Were this to happen, mothers receiving the Child Tax Credit would be more than compensated through the $50 increase, for the effect of the indexation limit over the two year period.
1 want to point out that no cost of living limits have been placed on the Child Tax Credit Program. This means that both the maximum amount of the credit and the income threshold will continue to be fully indexed. Thus, the maximum Child Tax Credit will be increased by the full rise in the cost of living, to arrive at the maximum Child Tax Credit to be paid in 1984. The income threshold of $26,330 will likewise be indexed fully. It is also very important to emphasize that full indexation of Family Allowances will automatically resume in January of 1985.
Obviously, if the increase in the Child Tax Credit is going to compensate mothers in low and moderate income families for the loss they will experience from the limits to be placed on the Family Allowance indexation, then the cost of this increase will also offset any family allowance savings from these groups. Thus, the savings to the Government over the two year period resulting from these program changes will basically come from upper income families who are in a better position to pay for it.
Clearly, it was with the greatest reluctance that the Government chose to place a limit on the amount of the annual increase in family allowances. The 2.4 million mothers receiving family allowances, who also receive the Child Tax Credit, will be fully protected over the next two years. However, the million or so remaining mothers who do not qualify for the credit have been asked to incur a slight loss, along with many other Canadians, so that together we can fight the battle against inflation. This loss will be just under $50 per child over the two years of 1983 and 1984.
The Government could have chosen a much more drastic course of action. It could have done what others have advocated, and slashed Government spending by eliminating whole programs. The Hon. Member for Kingston and the Islands (Miss MacDonald) talked about having these programs fully indexed while the Hon. Conservative Member for St. John's East, on the night of the Budget, when they asked him what he would have cut out, said that he was afraid to tell us because they would never be elected.
December 1, 1982


Flora Isabel MacDonald: The Hon. Member for St. John's East is Mr. McGrath.


Maurice Brydon Foster: Well, St. John's West (Mr. Crosbie). It is obvious that we have the full spectrum of the Tory Party there, Mr. Speaker.
We did not take those drastic actions, that others advocated, because it would have taken away the lifeline for Canadians who are dependent on this Program of Family Allowances and the refundable tax credit. I think that the Government should be commended for maintaining the Program in spite of the very difficult economic times that we face.


Philip Derek Lewis: Which the Liberal policies have produced.


Maurice Brydon Foster: Most of us realize that in Canada we have one of the highest standards of living, social security programs and-


Philip Derek Lewis: What about Sudbury?


Maurice Brydon Foster: -and a lifestyle which is much better than many other areas in the world.


Philip Derek Lewis: Six out of work for every five workers.


Maurice Brydon Foster: This Program of maintaining a Child Tax Credit which will benefit those in low and moderate income families and give them more than what they would have received from full indexation, will ensure that they will continue to have the very best social security system during this very difficult time that we will face during the next couple of years.
If we all work together, as the six and five program is designed to promote, we will overcome these difficulties-


Philip Derek Lewis: How about the Minister of Finance?


Maurice Brydon Foster: -while at the same time maintaining one of the best social security systems anywhere in the world and, indeed, a good Family Allowance and Child Tax Credit Programs.
[ Translation]


Roch La Salle: Mr. Speaker, I have a few comments on this legislation which is specifically concerned with family allowances. I was just listening to the Member for Algoma (Mr. Foster), who was so anxious to inform the House that Canadians were delighted to support the 6 and 5 policy. This policy has a direct connection with the bill before the House today, since it is because of this policy that the Minister of National Health and Welfare (Miss Begin) has been obliged to introduce amendments. Obviously, if you ask businessmen and manufacturers, they are going to be very tempted to say yes to the 6 and 5 program.
Ask any employer whether there is anything he would rather do than restrict wage increases to 6 and 5. The answer is clear. But I am not convinced that employees are unanimously in favour of the 6 and 5 formula, when they do not know whether the cost of living is going to go up by 10 or 12 or 8 or 9 per cent. I do not think the elderly are particularly in favour of this
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formula either. So it is certainly not true to claim that Canadians are applauding the 6 and 5 program-in fact it is far from true. There is, of course, a category of people that supports this policy. And there is also more than meets the eye in this program, which was basically supported because of the present economic situation.
Perhaps we should ask ourselves why it is that the House is once more considering legislation that is a direct consequence of the poor administration of the last fifteen and especially the last five years, and of the wrong choices made by this Government. Why was it necessary to impose a policy on Canadians, and I mean impose, because although it was touted as a voluntary measure, I can prove today that it is no longer voluntary. I have been told in so many words that the Government is now requiring the private sector to apply the 6 and 5 plan. I think the voluntary concept has changed quite a bit, in only a few months. Of course, the Member for Algoma, like the Minister, mentioned the excellent social programs we have here in Canada. It is always the same old story, Mr. Speaker. When I listen to the Minister of Agriculture (Mr. Whelan), he tells us that Canada has the best farmers in the world and that our agriculture is healthy, at a time when the Farm Credit Corporation is facing an unprecedented demand for loans. Today, we are being told about our excellent social programs. It is true we have good ones in Canada. It is true that a few years ago, Canada seemed like a good place to live. There is no doubt about that, but that is not the point. We are certainly not challenging the significance of social programs or the need to maintain them, and we are certainly not questioning the family allowances program. We certainly have no intention of doing so. Mr. Speaker, I am sure that my colleague for Rose-dale (Mr. Crombie) would readily agree when I say that we acknowledge the merits of family allowances. The amounts of course have been increased through the years keeping pace with the cost of living and other changes. There is no doubt about that. What would happen, for instance, if we did not have our social programs, considering the disaster that we are now facing? It is true that the situation would be quite serious. Thank God that we have our social programs even though they too often give the impression of a kind of prosperity which is absolutely artificial because it is based on millions of dollars spent to some extent for non-productive purposes. I think that it would have been advisable to promote through research and development, an orderly industrial development which would allow us to save huge sums which are now earmarked for social programs. As I said, Mr. Speaker, we feel that our family allowance program is most important. But it is no use worrying the people silly by quoting the Prime Minister's comments. Earlier the NPD Member referred to the statement by the Minister of Finance (Mr. Lalonde). Last summer, as I vividly recall, the Prime Minister himself had stated he was loath to cut into social programs, even though the lack of money made

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such savings necessary. I clearly remember the public reaction to his statement. Even the Minister of National Health and Welfare (Miss Begin), if I am not mistaken, was reluctant to make such cuts. At any rate, the people were really worried. Maybe the intention was to get feedbacks through this particular Minister. When they got it, it took two cabinet meetings for them to decide against slashing social programs.
1 would also like to state that 1 very patiently listened to the Minister of National Health and Welfare winding her way around telling us that the legislation would not make much difference as it involves only as little as $4 to a maximum of $54. What she says boils down to this: We need not object so much, we need not worry. The whole thing amounts to $4, $8 or $54 at the most. But although she stated she was very comfortable in introducing the legislation, I have a feeling she is not so comfortable with Bill C-131, and quite understandably. I, for one, refuse to accept that the Government dump the cost of its mismanagement, the wrong courses it has taken, on the most helpless groups in our society. Today, naturally, no reference was made to the wrong decisions that may have been taken. Simply, they look to the future and say: Well, things are fouling up elsewhere, and so are they in Canada, and the Government, of course, is not to be blamed, everyone else, so to speak is except this administration that has been here for the last 15 years.
The Minister states there will not be much change, but finally had to admit that sacrifices will have to be made by everyone including mothers and children who are not responsible for this Government's wrong decisions and mismanagement. If the Bill really changes nothing, why ask some Canadian mothers and families, in significant number to accept selfdenial to pull the country out of its present mess? This country, as the Minister remarked, is in a rut and she wants mothers to make sacrifices which may be minor as far as this legislation is concerned, but which are very heavy in the case of senior citizens. And this Government does not only appeal to senior citizens and mothers, and finally children, to bear the brunt of a situation they did not create, it will force their cooperation willy nilly. So if the Minister is so eager to have mothers join in the national drive for sacrifices, it is because they are bound to lose something. I suggest this is indecent, it is unacceptable that the Minister should call on Canadian mothers to suffer the consequences of a mismanagement they are not responsible for. This is why I object to the principle of making those families, mothers and senior citizens pay for this Government's errors. I believe there is no one in this House so lacking in compassion as to accept with equanimity that helpless innocents be forced to shoulder the problems Canada is now facing. And we are asked, without any hesitation to cooperate with a Government which is leading us into bankruptcy. We are asked to co-operate with a Government which has made but the wrong choices, especially these last few months. How could we be willing to co-operate with a Government which is responsible for Canada's current situation? If only as
a matter of principle, 1 would reply by a firm no if a Minister or the Government were to ask me to support this Government's mismanagement with which we have been forced to live for so many years and for which it is mostly to blame. 1 do not want to waste the time of this House, Mr. Speaker, but I want to say that when a group has to pay even an insignificant amount-because while it is true, as the Minister said earlier, that the Bill does not represent a major change since it is simply changing four quarters for a dollar, as we say in Quebec, the principle remains the same whether we are speaking about four dollars or $50-when people who are certainly not responsible for this situation are asked to partly assume this responsibility for this Government's mismanagement and these people are certainly in no position to pay, I believe-


Monique Bégin: With $38,000, they cannot pay this?


Roch La Salle: -even if it is $4, for people with children who earn under $26,000-


Monique Bégin: They cannot pay with an income of $38,000?


Roch La Salle: The Minister is absolutely certain that they are able to pay. However, one thing is certain, the Canadian people know they will have to pay because the Government has no compassion for those affected by the legislation now under consideration, and I hope that 1 shall have the opportunity later to speak about Bill C-131 concerning senior citizens, who will certainly be affected. But the Minister has found a formula to shuffle $18 in here, $36 in there, to come up with $50 and say that after all this shuffling, the families involved will not have much to pay. However, the Minister has spoken about a sacrifice, therefore it implicitly means a loss. The Government is dealing severely with people who are not responsible and who should not be left holding the baby. And the Government could not care less who is going to suffer, whether they be mothers, children or senior citizens, all will have to pay for its failure. That is what I had to say, Mr. Speaker, and that is also why 1 shall vote against this bill, because I feel very strongly that some people who can hardly afford to pay are being squeezed by the Government. The Minister may feel differently, but it is not the first time I have to deal with the Government Members opposite. But the fact is that it is my duty to tell the Government that it is not only damaging the country as a whole, but is directly attacking people who deserve more compassion than they are getting today.


Howard Edward Crosby: Madam Speaker, let me first consider the basic provisions of Bill C-132, which amends the Family Allowance Act. The purpose and sole reason for this legislative action is the implementation of the Government's infamous six and five restraint policy. We are
December 1, 1982

being asked to apply this policy to those families who have children under the age of 18 years. In specific terms, the Family Allowance payment, now fixed at $26.91 per month, will be increased to a limit of 6 per cent in 1983 and 5 per cent in 1984. As a result, the absolute limit will be $1.61, for a monthly payment of $28.52. This is slightly more than $19 for the full year.
On the face of this, Mr. Speaker, it may seem to be a very small amount with which we are dealing, but in the aggregate, across the whole of Canada, considering all the families involved, it becomes a very large amount. More important, it is not only its effect in dollars and cents upon Canadian families, but it is a signal that the Government of Canada is sending to lower income families across the nation. The signal is that it is going to reduce inflation at the expense of the ordinary, low-income Canadian, the very people we want to help in this time of recession. The Government of Canada is indeed sending out the signal, "We are going to take money from you in order to improve the economy of the country". We have to ask ourselves, is that what we want to do? Is that the kind of policy we want to support in this Parliament of Canada? We must ask the important question, why is the Government taking this action in the name and under the guise of "restraint"? The answer is quite simple. The Government is attempting to save $115 million in 1983 and $200 million in 1984.
This Government, which grandly proclaimed a policy by which it paid families a monthly stipend to insulate and protect them from the ravages of inflation, is now cancelling its contract with Canadian families. It is now saying, "What we told you since 1945, we are no longer prepared to implement. We are going back on our word to the Canadian people. We are going back on the promises which we made to provide a certain level of income to all Canadian families. We are reassessing the policy, and the reason we have to reassess it is our spending over the past decade has caused a massive deficit, so the first people we are going to cut off is the families of Canada, and next will be the old age citizens".
The Government of Canada has created the problem and now it asks Parliament to assist it to resolve the problem. It wants to cut off the benefits which are going to the people in Canada who are most in need of assistance.
There are 3.6 million Canadian families affected by Family Allowance, and the Minister tells us that only 1.2 million of those families who receive Family Allowances will be adversely affected. The families so adversely affected will be robbed by the Canadian Government to the extent of $17 in 1983 and $30 in 1984, for each child. Is it not a sad state of affairs, Mr. Speaker, when the Canadian Government has reduced the economy and its Treasury to such a point that it has to turn around and say to Canadian families, in addition to old age pensioners, "We now have to take back from you the statutory benefits which we conferred on you many years ago. We now have to take these benefits from you because we have the country in such a financial position that we can no longer carry these benefits"? In other words, the Minister of National Health and Welfare (Miss Begin) and the Government are
Family Allowances Act, 1973
making poor Canadians pay for its mismanagement of the financial affairs of this country.
Our difficulty in this Parliament is simply this: we realize and recognize the financial mess in which the Government has put this country, we realize the massive deficit which has built up over the years by the Government has to be dealt with, but at the same time, is this the right and proper way to deal with it? Is it right and proper that we try to save this kind of money by taking from the families of Canada what amounts to a very small portion of the family income, but in aggregate is very large? And this is done in the name of restraint, all in the name of getting the economy back on track, of reducing inflation so that, in turn it will reduce interest rates in Canada.
But what is the net result of this legislative action? The Government of Canada is going to spend $95 million more in this area. It is simply reallocating funds, taking it from one group of Canadians and giving it to another. One wonders how this machination came about. What counsels of Government recommended this change of policy in the case of Family Allowance after almost 35 years of continuous payments? We have to ask ourselves these questions. The Canadian people have to ask the Government, what is it doing? Has it lost control of the financial affairs of Canada to the point where it has to grab money wherever it can and take its chances, regardless of the effect on Canadians?
The Minister of National Health and Welfare has said that the funds will be reallocated and only a small number of the persons involved will be adversely affected because, in the case of families with incomes under $26,330, they will benefit from an increase in the Child Tax Credit. In the result, there will not be any bad effect on Canadian families. We have to ask ourselves this: if the net result is an expenditure of $95 million more in public funds and if, as the Minister proclaimed a moment ago in this House, the net result is that Canadian families will not be in a more difficult position as the result of the change, then why are we making the change? How does this help Canada as a nation? How does it help us come together to resolve our economic problems?
The answer becomes very clear, Mr. Speaker, and it is very unfortunate for the Canadian families directly affected by a tax measure of this kind; it is simply the Government's posture. It is trying to fool the Canadian people. It has said, "We have messed things up for ten years, but now we are going to resolve them. Here is how we are going to resolve them. We are going to cut back on this benefit. We are going to cut out that benefit. We are going to save money here. We are going to put those savings in another place, and all will come out right in the end."
If Canadians had any faith in the Government of Canada under the Prime Minister (Mr. Trudeau), if Canadians had any reason to believe that the Government had the capacity and ability to solve the problems it has created, there might be
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reason to support a measure like this. The fact is that Canadians have lost faith in the ability of the Government to resolve the problems that exist in Canada. They are starting to recognize that these kinds of solutions are not solutions, but merely a pretext. They are a public fraud.
The Minister of National Health and Welfare stands up in the House and tries to convince Members and the Canadian people that the Government is doing something right in this case; that by cutting back in this minute way on a small benefit, in talking about amounts like $1.61 per child per family, we are doing something to save the Canadian economy; that by applying the so-called six and five program in this way, some good is going to come about.
I am no economist, Mr. Speaker, but the people of Canada are not qualified as economists either. I do not think anybody really believes that. 1 do not think there is one person in this country, other than on the Government benches, who really believes that these kinds of measures are going to have any real effect on the economy of Canada. They will simply cause difficulty for those Canadian families who require this money. They will do nothing to advance or change the course of financial transactions or anything else related to the economy.
What we are dealing with, in a sense, is a public fraud. The Government of Canada, under the Prime Minister, has said, "We are going to deal with the problems that we created. We have now a policy that will reduce inflation. That is the great enemy in Canada. If we reduce inflation, we reduce interest rates; if we reduce interest rate, the economy will pick up and create jobs and opportunities for Canadians."
What are we to say to a Government which perpetrates that kind of fraud on the Parliament of Canada and on the people of Canada? How could this measure possibly change the course of the economy in Canada? It is nothing more than the word we are not allowed to use in Parliament but I can use it in another context. It is fraud. It is fraudulent. It is not going to accomplish anything.
What the Government of Canada is doing through the medium of the Minister of National Health and Welfare- whom I could easily believe is once again a dupe in this process because her knowledge in other fields is at such a low level that I can understand how her officials could convince her of the rightness of her course-what the Government is really trying to do is to create the idea and the perception that the Government is moving to solve the problems in the economy but cutting back on social service payments.
That only applies to the Canadian families affected by the cutbacks in family allowance, it applies to the health care system, the educational system and to senior citizens. There is an idea abroad in Canada that we have spent too much of the national resource on social services. There may be some basis for that idea, but what the Government of Canada is not doing is coming to grips with the real problem. It is reassessing its priorities and reassessing its ability as a Government to provide social services. It is dipping in here and there under the guise of an over-all policy called six and five. It is changing
this provision and that benefit and so on, to try to pretend to Canadians that it has a plan to solve the problems in Canada.
Let me switch to the economy and say that when there is a deficit in current spending of $26 billion and when that is added to a debt, to bring the total debt for Canada to over $130 billion, it must be recognized that some action has to be taken. There is no way that working Canadians across the country, 10 or 11 million of them in this fiscal year, can incur, as individuals, a further debt of over $1,000. That is the effect of a deficit of $26 billion spread over the work force in Canada.
We realize that something has to be done to stop that. What has to be done is to take effective economic action, not merely taking $100 million away from families through the reduction of the indexing of family allowances.
We are talking about a Government that is losing $500 million in the postal service when we could actually have a postal service that produces revenue. We are talking about a Government that over-spends by $300 million on a program to market dairy products. We are talking about a Government that loses $1 million per week or $52 million per year, on an airport in the Province of Quebec. Yet that same Government comes to the House of Commons saying, "We can accomplish something by cutting back to the extent of $1.61 per month on The Family Allowance."
1 defy any Member of the Government to justify that kind of action. I defy any Member of the Government to stand up in this House and say that they agree with that kind of action.
If the Government wants to save $100 million and reduce inflationary pressures through Government spending, I am sure it could find ways, if it used any kind of good sense or imagination to do so, and probably save another $200 million or $300 million, without affecting children, old age pensioners and senior citizens.
It does not want to do that. It wants to create a drama and say, "We are cutting back so hard that we are getting right to senior citizens and children right across Canada. That is how close we are budgeting. That is how fine we are cutting expenditures."
It is a fraud, Mr. Speaker, and I will tell you why. The six and five program hits 500,000 civil servants across Canada. The Government says it will cut salary increases to six and five, but what does it do with Michael Pitfield, the Clerk of the Executive Council? It gives him a 6 per cent increase so that he draws over $100,000. That is not all. It signs a separation contract with him and says, "Mr. Pitfield, when you leave the service of the Government of Canada, you have a pension for life." That is what it does with the public funds. I realize that when you add up the benefits to Mr. Pitfield, they only amount to a quarter of a million dollars. That is all Mr. Pitfield gets out of this Government for the ten or 12 years of service he has given it. It is a pittance. It does not make any difference, I realize that. It is the example. What it is willing to do for Mr. Michael Pitfield is to give him a quarter of a million dollars, but here is what it is willing to do for the children across
December 1, 1982

Canada. It wants to take $1.61 a month away from the children of Canada. What kind of thinking is that? I say to everybody across Canada that they should not think Mr. Pitfield is the exception. That is the unfortunate part of it. Tie is the rule of the Government of Canada. How can the Minister of National Health and Welfare stand in the House of Commons to try to justify such an action with the expenditures that she and others who sit in Cabinet have approved? Mr. Pitfield is only one example.
Let us talk about the jets which they just bought for $26 million. They are taking $100 million away from the children of Canada and they are spending $26 million or more than a quarter of that amount on jets. Does anyone in the House of Commons think that that is appropriate action? I ask any Minister whether that is the right and proper thing to do. Is that the way to finance things in Canada? They take $1.61 a month away from every child eligible for Family Allowance and spend a quarter of it on jets. They spend a quarter of a million on Michael Pitfield and on long-term superannuation contracts. They allow the postal service to lose $500 million a year.
I give up with this Government. I can stand in the House of Commons and point out these things, criticize and waste my time. I have statistics here whereby I could project the Government's deficit of $26 billion across the Canadian population and tell each working Canadian what it is costing him or her. I could do all these things, but what is the point? The Government is in control and it will not listen. It will not do anything. It has all the mannequins across the way who stand up when they are told to stand up to justify these policies, and we are left to criticize.
I know this thing has to be brought to an end. But they will not do it. They will take away $1.61 from each child in Canada. They will continue to spend to the extent of a $26 billion deficit. They will continue to give favourite public servants like Michael Pitfield increases, while cutting back on other public servants. They will continue to buy jet aircraft and fly them all over Canada. They will continue to spend $5 million on Canada's birthday and change the name from Dominion Day to Canada Day by mischief in the House of Commons. We will not stop them in the House of Commons, but I say to Government Members that we are putting it all down and I hope the people of Canada listen. I hope they are putting it all down, because the day of reckoning will come. When that day comes, even though the Minister of National Health and Welfare does not have to come out of her safe seat in the Province of Quebec and does not have to worry about a 44,000 vote majority, let me tell her that there are other ways for the people of Canada to get back at that kind of activity. There are other ways for the people of Canada to show the Minister and her whole Government what they think of the way they have governed the affairs of Canada.
I can only say to the people of Canada that they had better start thinking about it now and they had better not be fooled. When the day of reckoning comes, they want to remember things like the $1.61 taken away from the children of Canada.
Family Allowances Act, 1973
Also they want to remember things like the $26 million spent on jets. They want to remember the $5 million they spent on firecrackers on Canada's birthday. They want to remember all things like Michael Pitfield and his $250,000-plus benefit.
All Hon. Members on this side of the House, and certainly my Progressive Conservative colleagues, will remind them day after day what the Government is doing. It will not get this Bill through the House and passed without it being recorded and registered with the people of Canada what the Government is doing and why it is doing it. We will go on and on from this day forward.
Let me address the following remark to the Minister of National Health and Welfare. I have never had the chance to address her in the House. The Minister does not understand the situation in Canada. She stands up in the House of Commons and pretends to understand the problems in the health care field. What will she do to solve the problems in the health care field? She is going to get rid of the physicians of Canada. She is going to clamp down on physicians and make things more difficult for them, and they will want to move to the United States of America and other places. That is how she will control and improve health services, and this is what she will do with social services. She will stomp on anyone who gets out of line, because she and her Government are in control. I like them to do as much of that as they can because they are hurting the people of Canada, and the people of Canada are finally realizing how the Government is hurting them and how the Government has stooped to the level of taking away $1.61 per month from our children. They are taking it away to finance this nonsensical purchase of jets, nonsensical contracts with senior public servants like Michael Pitfield and a variety of unnecessary purposes.
Our job-and I am sure my colleagues share this view with me-is to point these out continually. We will not let them get away with that stuff. The people of Canada now realize, as we get into the economic crisis, the mistakes they have made. They cannot cover them up with some phony six and five program. They cannot pretend that they are being very careful with the income and assets of the Canadian Government-the property of the Canadian people-simply because they are cutting back on essential benefits and services like health care, Family Allowances and old age pensions.
This is what we are reduced to in the House. Perhaps we are pointing out the obvious, but I think Canadians will forgive us if, after all these years of Liberal rule and all the fraud they have committed on the Canadian public, we are not taking any chances this time.
We have another Bill before the House about Old Age Assistance. Let us remember the election campaign when they promised $35 a month to senior citizens. They said, "Look, this is what we think about senior citizens, those deprived persons in Canada-we will provide them with this benefit of $35". Then they turn around in the House of Commons and come up with Bill C-131 to reduce that benefit. I could refer to a long list of Government promises, but I do not have that

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much time. I could only summarize it by saying that we in this Party are fed up with the fraud practised by the Government of Canada on the people of Canada. We realize that they can, for a period of time, fool the people of Canada. We realize that that is what they are trying to do with the Bill before the House, where they take away $100 million from one set of children and pretend to give a benefit to another set of children, with a net increased expenditure to the federal Treasury of $95 million. And they call that restraint to fool those people in Canada who realize that they have over-spent and that there must be restraint!
I think one thing is becoming clear. Canadians are fed up with this kind of fraud. They recognize it, they realize what it is, and all the rhetoric, explanations and statistics from the Government side will not bail them out of this situation. When the Minister of National Health and Welfare rises again in the House to defend the little people in Canada and to say how the Government of Canada will protect them, I hope she remembers the $1.61 which she has taken away from the children of Canada. Let us remember that, let us talk about that. I hope she remembers about the physicians whom she is driving out of medical practice when she talks about improving medical care. It gets that personal; it has to get that personal. When we are dealing with fraud, we have to charge persons with fraud and convict them of fraud. That is what I am doing here today. I am charging the Minister of National Health and Welfare with fraud, and I have the evidence here to convict her.


Some Hon. Members:: Hear, hear!


Mr. Jim Schroder (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, after hearing the last speaker I think of a United Way slogan which I hesitate to steal, but it goes something like, "Because of you it is working". 1 believe that today we are seeing the essence of frustration in the Opposition. Opposition Members realize that the six and five program is working, that we will reduce inflation and that there is nothing they can do to stop it. What they are doing is using various kinds of subterfuge and spurious arguments to try to make it sound as if it is not working. I think they will fail in this process, because I do not believe Canadians buy it.
It is interesting to listen to Opposition Members because they talk as if they had Canadians in their pockets. I want to make it clear to them that I do not share that view; I do not think they have.
I know it is popular to be critical. After all, I think the job of the Opposition Members is to be objectively critical and to try to make sure that the right questions are asked and they get the right kind of answers. But what are they doing in this debate? Opposition Members are attacking this Bill with shotguns in their hands as though it were a target, firing off in all directions. Opposition Members are not really talking about the Bill and what it is all about. They are talking about us
taking things away when really what we are doing is giving something away.
The purpose of this Bill in a package and in the context of the six and five argument is to change the inflationary expectations and therefore to reduce inflation. It is not to save money or to change the system. Opposition Members are trying to suggest that we are trying to save a lot of money. They are saying, "Look at the pittance you are taking".


Flora Isabel MacDonald: That is what the Minister of Finance said.


James Duncan Schroder: We hear Opposition Members saying this will not save that much money and it really will not accomplish very much. It really will not do much to the deficit. But we are concerned about the fact that we want to reduce inflation. When we reduce inflation, then we make the indexing more realistic. What is the use of having an 11.5 per cent indexation if inflation takes all of it or more? Is it not better to have a program such as we have, which tries to reduce inflation, reducing indexation to 6 per cent so that we will end up with a very little, if any, loss in pension because we are stabilizing things? That is what the big complaint is about. What people want to know is why you cannot do something about stabilizing the situation. We are trying to do that with this Program.
Last evening I spoke in the debate. I said that none of these programs are in isolation. One cannot look at the deindexation of these programs in isolation. I said last night that if reducing Old Age Security payments were in isolation, none of us could support doing that. We probably could not support this Bill if it were in isolation, but when it is part of a package, which is designed not only to reduce inflation but also to accomplish what reducing inflation does, which is to promote economic recovery, we can. Without this economic recovery or economic growth, there will be even greater pressure in the future on these social programs so that we must work toward reducing inflation, generating economic recovery which in turn will help us to generate more jobs and complete the circle of restoring economic growth.
You would think, from the speeches we have heard, that this Bill is an attack on universality. I have already explained to you, Mr. Speaker, and to Members that this method of six and five or deindexing is not an attempt to change the system. The system is still there. We are saying to people that they will still get an increase but the increases are being reduced slightly, ever so slightly. But the system is still there. The system is still working. What we are attempting to do is to increase the real value of what people will get by reducing inflation. Therefore,
I come back to my argument that because this is working, this is why we are getting attacked from all directions in the form of spurious arguments about what is happening instead of hearing concentrated arguments on the Bill.
The Hon. Member for Vancouver East (Mrs. Mitchell), probably inadvertently, referred to this Bill as if it were a mother's pension, and the pension was the mother's. I would
December 1, 1982

draw to her attention that Family Allowances are payable to all children under the age of 18.
However, I am pleased to speak on behalf of Bill C-132 which extends the six and five program to Family Allowances. In other words, this Bill is another part of the package. Despite its brevity, a scant 17 lines, if I recall correctly, this Bill is an important part of the Government's economic recovery program. I have to emphasize that over and over again. I would like to focus my own remarks on the economic rationale behind this measure for this Bill represents much more than a shortterm cost-cutting exercise. It is part of a carefully balanced economic strategy and it is a good illustration that sound economics and sound social policy can work together.
We have heard many lectures on the economy and certain kinds of economics, but this is a good illustration of how sound economics and sound social programs can work together.
The Minister of National Health and Welfare has explained that the Bill is simple enough. The monthly Family Allowance will only be allowed to increase by a maximum of 6 per cent in 1983 and 5 per cent in 1984. After that, full indexation to the consumer price index will resume.


Melbourne Alexander Gass: You are talking out the Bill.


James Duncan Schroder: This is an illustration again that we are not disturbing the system. The system is still there.


Melbourne Alexander Gass: Question.


James Duncan Schroder: The scale of the Family Allowance Program best explains the importance of this measure.
Family Allowances Act, 1973
Family Allowances are paid monthly to 3.6 million families on behalf of 6.7 million children under the age of 18. Payments during the 1981-1982 fiscal year total led just over $2 billion. This is clearly a Program of such magnitude that it could not be ignored in any effort to restrain over-all Government expenditures. Goodness knows, we have heard enough about Government expenditures and that we should be doing something about controlling Government expenditures. Here we have a program which involves $2 billion a year, and we are attempting in a way to include this in our six and five program which is an attempt to establish economic recovery. Yet we are being criticized, and we hear said that it is not very much and we should not bother with it. Well, $2 billion is a lot of money.
Clearly a program of such magnitude cannot be ignored. The effect of Bill C-132 will be to generate savings of some $265 million over the two-year period, but that is not really that important. What is important is its effect on reducing inflation.


Mr. Taylor:: You are filibustering your own Bill.


The Acting Speaker (Mr. Corbin):: Order, please. [Translation]
Order, please! It now being six o'clock, the House stands adjourned until tomorrow at two o'clock, pursuant to Standing Order 2(1).
At 6 p.m., the House adjourned, without question put, pursuant to Standing Order.

Thursday, December 2, 1982