1982-06-29

OFFICIAL REPORT


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31 Elizabeth II

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Published under authority of the Speaker of the House of Commons by the Queen's Printer for Canada
Available from Canadian Government Publishing Centre, Supply and Services Canada, Hull, Quebec, Canada K1A 0S9.
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Tuesday, June 29, 1982


Mr. Albert Cooper (Peace River):: Madam Speaker, I believe I have unanimous consent for this motion. Whereas the House of Commons just yesterday passed the freedom of information bill, and whereas my predecessor, Mr. Gerald Baldwin, worked tirelessly toward and supported the principle of freedom of information, I move, seconded by the hon. member for Notre-Dame-de-Grace-Lachine East (Mr. All-mand) and the hon. member for Nepean-Carleton (Mr. Baker):
That this House unanimously commend Gerald Baldwin for his unceasing work for freedom of information legislation, and further, for his years of dedicated service to his fellow countrymen.


Some hon. Members:: Hear, hear!


Madam Speaker:: Does the House want to applaud this motion? The hon. member for St. John's East.


Mr. Nielsen:: There was no negative.


Madam Speaker:: No one said "no", but I did not put it to the House because it is a congratulatory motion.


FISHERIES
Hon. James A. McGrath (St. John's East):: Madam Speaker, I rise under the provisions of Standing Order 43. Last night the finance minister announced a special farm financial assistance program which provides for $200,000,000 over the next two years to assist farmers in financial distress. Naturally, we welcome such an announcement, but at the same time we fail to understand why similar assistance was not provided for the fishing industry which employs 80,000 Canadians and forms the backbone of the economy of the Atlantic provinces. Many companies have been forced into bankruptcy and the industry still faces an uncertain future. I would therefore
move, seconded by the hon. member for Vancouver South (Mr. Fraser):
That this House direct the Minister of Finance to provide immediate assistance to the fishing industry in a program similar to that which is now being offered to the agricultural industry.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Vic Althouse (Humboldt-Lake Centre):: Madam
Speaker, under the provisions of Standing Order 43 I wish to move a motion. Since the majority of Canadian farmers continue to face an intolerable burden because of high interest rates, and since the budget last night did nothing to cope with credit charges on operating loans and on existing credit, even though the additions to Farm Credit Corporation loans will be welcome, I move, seconded by the hon. member for Dauphin (Mr. Lewycky):
That this House calls on the Minister of Agriculture to resign because of his unwillingness to deal with the number one problem for farmers in Canada-high interest rates.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


BILINGUALISM
Mr. Bill Domm (Peterborough):: Last night the Minister of Finance (Mr. MacEachen) said that "the private sector and the provinces could not be expected to accept income restraints unless the Government of Canada showed leadership in the conduct of its own affairs." During the past few days, the national press has reported that the assistant secretary to the cabinet for economic development policy, who receives a salary of approximately $75,000 a year, is to be sent to the south of

June 29, 1982
France for bilingual language training. This four-month joyride will cost Canadian taxpayers, whom the minister has asked to show restraint, some $11,800. While many Canadians and, I dare say, many hon. members opposite would be pleased to see one of the architects of the present budgetary fiascos deported, banished, or otherwise disposed of, I move, seconded by the hon. member for Cambridge (Mr. Speyer):
That if this government is truly serious about showing leadership, and if it is serious about restraint, then the President of the Treasury Board should launch an immediate review of all such ridiculous and inexcusable examples of wasteful government spending.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


WESTERN DEVELOPMENT FUND
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, the 1982-83 allocation in the 1980 budget for expenditures under the Western Development Fund was set at $750 million. Under the 1981 budget this allocation was cut by 75 per cent to $182 million. Under last night's budget the people of western Canada are further insulted, as the 1982-83 allocation receives a further massacre of 50 per cent. Now a further $92 million has gone from the pockets of westerners. Therefore I move, seconded by the hon. member for Red Deer (Mr. Towers):
That this House censure the Minister of Finance for his apparent lack of understanding in failing to appreciate the hopes and aspirations of westerners and his lack of honesty in failing to admit that this fund was a fraud from the date of its conception.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENSIONS
Mr. Neil Young (Beaches):: Madam Speaker, I, too, rise under the provisions of Standing Order 43. In view of the fact that the minister responsible for pensions has stated that the first priority of the Liberal government with regard to pension reform was to bring all senior citizens above the poverty line, and in view of the fact that single pensioners are still more
than $800 below the poverty line, I move, seconded by the hon. member for Vancouver East (Mrs. Mitchell):
That this House condemn the minister and the Liberal government for abandoning this commitment and instead cutting basic pension benefits by deindexation, which will require more and more pensioners to submit to a means test just to ensure that they fall no further below the poverty line than they are already, and that if the minister does not rescind last night's budgetary measure, she should resign.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


VOLUNTARY ORGANIZATIONS
Mr. Walter McLean (Waterloo):: Madam Speaker, last night's budget once again ignored a matter of urgent necessity. Following "Consultation 81", the government made a public undertaking to act on the give-and-take tax proposals of the national voluntary organizations. Last week the Minister of State for Social Development (Mr. Chretien) told this House that he had personally raised this matter before the cabinet. Last night's budget, as well as November's discredited budget, demonstrated an abysmal ignorance of the potential caring contribution of Canada's voluntary sector during these times of social and economic hardship. I therefore move, seconded by the hon. member for Brampton-Georgetown (Mr. McDermid):
That this House urge the government to admit to Canada's three million volunteers that it has no intention of encouraging a working partnership with the voluntary sector, and that its distrustful, interventionist grant policy was intended to undermine the time-proven ability of non-government agencies to deliver their sorely needed caring services.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE MINISTRY
Mr. Gordon Gilchrist (Scarborough East):: Madam Speaker, up until last night Canadians at least had hope. When Canadian workers asked for legitimate job creation, when Canadian businesses asked for tax reform to aid industrial recovery, when the Canadian economy demanded investment encouragement for plants, processes and opportunities, when
June 29, 1982

Canadian youth cried out for higher education and better training and when senior Canadians asked only for stable costs and a dignified retirement, this government gave them higher taxes, higher interest rates, higher debt, higher inflation, and higher unemployment. I therefore move, seconded by the hon. member for Lethbridge-Foothills (Mr. Thacker):
That the Minister of Finance and the Prime Minister do the only worth-while remaining act of which they are capable, namely, resign before the downward economic spiral becomes a national economic disaster.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CALL FOR RESIGNATIONS OF MINISTER OF FINANCE AND LEADER OF THE OPPOSITION-MOTION UNDER S.O. 43
Mr. Rod Murphy (Churchill):: Madam Speaker, in light of the fact that the Minister of Finance (Mr. MacEachen) has forced public employees with low incomes to accept wage controls at the same percentage level as cabinet ministers and other senior bureaucrats and appointees earning over $100,000 a year, and since the Minister of Finance has encouraged other Canadians to accept this unjust system of sharing the economic burden, and in view of the support for these measures last night by the Leader of the Conservative Party (Mr. Clark) who, on previous occasions, admitted he would also retain the high interest rate policy of the Liberal government, I move, seconded by the hon. member for Beaches (Mr. Young):
That the Minister of Finance immediately offer his resignation to the Canadian people and, to be consistent with the Liberal-Conservative concept of sharing and solidarity, that the Leader of the Conservative Party also tender his resignation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NORTHERN AFFAIRS
Mr. Bill Yurko (Edmonton East):: Madam Speaker, the allparty report by the subcommittee on the Northern Canada Power Commission was an excellent documentation of the problems of electrical power generation and distribution north of the 60th Parallel. The recommendations are sound and embody the thinking and direction of all those groups which are affected and involved in this complex matter. The report
Oral Questions
was tabled in this House several weeks ago. Therefore I move, seconded by the hon. member for Cochrane-Superior (Mr. Penner):
That the ministers in charge evolve and table in this House at the earliest opportunity a target time frame or schedule during which the recommendations made in the report are to be implemented.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


METRIC CONVERSION
Mr. Gordon Towers (Red Deer):: Madam Speaker, I, along with my fellow Canadians, am disappointed with the horrendous budgetary deficit projection of $19.6 billion plus and the disconcerting failure of the federal government to curb its own spending. Federal government demands on the borrowing market cannot have other than an inflationary effect on interest rates generally. This government has a double standard, one for the taxpayer and another for itself. It was delinquent in not ferreting out spending cuts which become obvious, extravagant foreign aid giveaways, language programs, rising executive staffs, the metric program, plus $5 million worth of firecrackers. I therefore move, seconded by the hon. member for Assiniboia (Mr. Gustafson):
That since Alberta has become the fourth province to exhibit formally its opposition to the forced metric program, by moving to assist Calgary resident Mrs. Kasparian, who has been charged because she used imperial, the government declare a moratorium on advancing the forced metric program, thereby saving at least $10 million this year alone in federal overhead costs and countless millions to retailers and consumers who will be hardest hit by the forced program.


Madam Speaker:: Oral Questions.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is directed to the Minister of Finance, who has just had his third strike, and in any honest or honourable government would be out by now. We have had the reaction of the market and the dollar to his budget. The dollar is sliding; the market is slumping dramatically. A lot of Canadians do not yet understand that last night, among other

June 29, 1982
Oral Questions
things, they had a massive tax increase imposed upon them of an average of $100 per taxpayer, at least.
The November budget, part of which still remains, talked a great deal about equity. I wonder if the Minister of Finance could tell us what has happened to that concept of equity, when he is forcing millions of lower and middle-income Canadians into higher tax brackets, by his changes in the indexation proposal, while those with incomes above $50,000 per year will continue to pay the same rates? Why in these massive new tax increases is he socking it to lower and middle-income Canadians, and why is he sparing the rich?


Some hon. Members:: Hear, hear!


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, I would just say in reply to the Right Hon. Leader of the Opposition that the concept of sharing is fully evident in the budget provisions. In the budget, it is true that we have asked certain Canadians to yield some of their benefits in order to help Canadians who are out of work or unemployed or who are faced with the loss of their homes or their businesses. We believe that it is reasonable in these circumstances to ask Canadians who are employed to share with those who are unemployed, so that we all can get through this difficult situation in a spirit of equity and sharing. That is the principle underlying the budget.


Some hon. Members:: Hear, hear!


EFFECT ON PENSIONS
Charles Joseph Clark: Madam Speaker, the problem with the minister's answer is that some Canadians share more than others. Lower and middle-income Canadians are being asked by this government to share, in the minister's words, more of the burden than are the rich. That does not meet any standard of equity which the country can recognize. Let me come to a particular group of Canadians who are being asked, if I might use the minister's word, to yield certain of their benefits. Even taking account of the changes in the Guaranteed Income Supplement, the 1.2 million Canadians who are receiving the old age pension will have their benefits, that they could have counted on, reduced because of the minister's action last night.


Some hon. Members:: That is not true.


Charles Joseph Clark: That is to say, 1.2 million elderly Canadians will be affected. Liberal members opposite say that is not true; I suggest that they read the budget, before they say that.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Let me ask the Minister of Finance why the elderly are singled out to pay for this government's mistakes?


Allan Joseph MacEachen: Madam Speaker, I first want to underline to the Leader of the Opposition that the purpose of the
whole strategy of the government is to bring down the economy-


Charles Joseph Clark: To its knees.


Allan Joseph MacEachen: -from a high level of inflation, at present very close to 12 per cent, to 6 per cent. If the Right Hon. Leader of the Opposition and others in the country join in this national campaign to reduce inflation to 6 per cent, the incomes of those persons about whom he speaks will suffer very little damage, or the damage will be minimized, so there is a basic incentive for all Canadians to move to the 6 per cent level, if their concern is about the impact of the cap either on the personal income tax side or upon old age security.
However, it is vitally important to underline that no recipient of the old age pension who is in need is affected by this particular provision. It is the attempt of the Right Hon. Leader of the Opposition to instil anxiety in the minds of our senior citizens. I want to give the absolute assurance that no pensioner in need will be affected in any way by these measures.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, either the minister will amend his budget, or he is not telling the truth. The minister refuses to tell us why his tax proposals of last night spare the rich and hit low and middle-income Canadians, and why he is imposing special taxes upon 1.2 million elderly Canadians. He refuses to tell us why they are being singled out.


TAXATION OF EMPLOYEE BENEFITS
Charles Joseph Clark: Madam Speaker, why is the minister continuing the tax upon Blue Cross contributions, upon dental care provisions, and upon other employee benefits?


Erik Nielsen: Including northern benefits.


Allan Joseph MacEachen: Madam Speaker, the Right Hon. Leader of the Opposition has again repeated that we are putting a special tax on the elderly. That is totally false.


Charles Joseph Clark: Madam Speaker, once again we hear no answers from the Minister of Finance, who is taxing low-income Canadians, taxing middle-income Canadians, taxing the elderly, and sparing the rich.


UNEMPLOYMENT INSURANCE
Charles Joseph Clark: Madam Speaker, let me turn to the Minister of Employment and
June 29, 1982

Immigration. Since last night's budget shows an $800 million increase in the take from unemployment insurance premiums next year, can the minister tell the House how large an increase he is contemplating in this hidden tax which the Minister of Finance failed to mention last night?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, as the Right Hon. Leader of the Opposition knows, the standard practice is for the assessment of any change in premium rates to be made after the third quarter of the year when we can more accurately determine what the exact numbers will be. The figures provided in the budget last night are a forecast. We are prepared to continue the conventional practice and to look at what the reality is in the third quarter, at which time I am sure the Minister of Finance will be glad to tell the Leader of the Opposition and others what changes might have to be made in the premium rate for unemployment insurance.


SOCIAL SECURITY
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, I too want to direct a question to the Minister of Finance. The meanest move in his budget last night was to reduce sharply the indexing of old age security for those who do not receive the supplement. In other words, that means that an elderly person who receives just over $8,000 a year in total income-which is what the minister receives every month- will receive $100 less next year, thanks to the minister. Is this what the minister interprets as the urgent pension reform about which he and the Minister of National Health and Welfare have been talking so much?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, again, obviously, the hon. member is misleading the House by saying that next year recipients of old age security will get less. They will get more. Obviously they will get more. When the hon. lady understands that, perhaps she will be able to put a proper question.


Flora Isabel MacDonald: Madam Speaker, there was a time when the Minister of Finance would not have moved against the old age pensioners of this country.


REPORTED STATEMENT BY MINISTER OF NATIONAL HEALTH AND WELFARE
Flora Isabel MacDonald: Madam Speaker, I want to direct my supplementary question to the Minister of National Health and Welfare who last night was quoted as saying, concerning this cutback, "I can live with it and they", the pensioners "can all live with it as well." It is
Oral Questions
easy to live with when you are making $100,000 per year, but it is not so easy to live with when you are making $8,000 or $9,000.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: I want to ask the minister what she means by saying, "They can live with it." What kind of Liberal arrogance is this? Is this the new Liberal approach to social policy?


Hon. Monique Begin (Minister of National Health and Welfare):: Madam Speaker, what I tried to express last night, and which I will reiterate today, is that all Canadians, in times of crisis, are ready to make serious sacrifices provided it makes sense to them, when it means creating jobs for their own children on the one hand, and providing for those most in need by making sure they are fully protected, on the other hand. That is what the budget of last night does. The pensioners who get only the basic OAS, which means 45 per cent of over two million pensioners, because they are not in need, this month will get $239 as I announced a few days ago, but next January will get $249 instead of $251.


Some hon. Members:: Oh, oh!


Monique Bégin: I want to repeat, because of the seriousness of family budgeting, they will get $239 this month and next January they will get $249 instead of $251.


Mr. Broadbent:: Madam Speaker, if the minister can have pride in that slight increase it just proves that a Liberal in this country is reduced to the point where he or she will take pride in anything.


LABOUR CONDITIONS
John Edward Broadbent: Madam Speaker, my question is also directed to the Minister of Finance. Last night we had a no hope budget, with reduced pensions, reduced family allowances and taxes increased by more than $1 billion. If the backbenchers opposite will be quiet I would like to put my question to the Minister of Finance. Considering that all of this will take money out of the economy and lead to more bankruptcies, and more losses of jobs, will the minister confirm what one of his senior officials said during the lockup last night, namely, that unemployment in Canada, which is already at a disastrous high level, will remain virtually unchanged throughout this year?


Allan Joseph MacEachen: Madam Speaker, I think that, first of all, I have to appeal to the hon. member's sense of honesty and ask him to admit that when he states that the old age security and family allowances will be reduced next year, he is not making a factual statement. The old age security and family

June 29, 1982
Oral Questions
allowances will be increased next year by six per cent. That is not a decrease. 1 want to tell the hon. member also, that if he joins with the rest of us in trying to bring inflation down to six per cent, then, of course, he will minimize the effect of that move on all groups in the country.
If I may answer the final question of the hon. member, I should like to draw to his attention the various measures in housing and in job creation that will add substantially to job opportunities in the economy this year and next. I believe that that is a very solid contribution that was made last night in this budget.


John Edward Broadbent: Madam Speaker, I say it is the Minister of Finance who is trying to mislead the people of Canada. He knows as well as anyone in this House that every pensioner in the country who will not get the GIS will get less of an increase than he or she would have without this budget.


Some hon. Members:: Oh, oh!


Madam Speaker:: Order.


John Edward Broadbent: Madam Speaker, it would be nice if every pensioner in this country, rich, poor or average, could see the smirking faces in the Liberal caucus.


Some hon. Members:: Hear, hear!


REQUEST THAT SCHEDULED OIL PRICE INCREASE BE POSTPONED
John Edward Broadbent: Madam Speaker, I have another question about one of the main concerns of ordinary Canadians, namely, inflation. Considering that the thrust of the budget, according to the minister, was to bring down inflation, and considering that not one price increase was stopped and not one rollback took place, my question this time is to the Prime Minister who will be meeting with the First Ministers tomorrow.
On Thursday oil prices are scheduled to go up 10 per cent at the wellhead, which increase will lead to a 1 per cent rise in the cost of living and 22,000 fewer jobs in Canada. At that meeting will the Prime Minister urge the premiers of the producing provinces to forgo, along with the federal government, the 10 per cent increase on Thursday?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I first want to thank the Leader of the New Democratic Party for having recognized in posing his question that there will be no decrease, as seems to have been alleged, in old age pensions and that there will be an increase-not as large as might otherwise have been expected, but there will be an increase, not a decrease, and I thank him for having put the record straight on that.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: As regards the price of petroleum at the wellhead, the hon. member knows that price was reached after long and arduous discussions between the producing provinces and the federal government. I would be happy to carry the representations of the hon. member to the premiers tomorrow, but naturally that is not an area in which we can assert jurisdiction alone. It is a negotiated agreement which, incidentally, was adhered to by the former New Democratic Premier of Saskatchewan. I repeat, I would be happy to carry that representation to them, but 1 certainly would not want to indicate that the federal government alone would go back on that contractual arrangement.


POSITION OF GOVERNMENT
John Edward Broadbent: Madam Speaker, so that we are perfectly clear on this point, the agreement, as the Prime Minister knows, was negotiated late last summer or into the fall and, as this whole country knows, things have changed considerably for the worse since then. Is the Prime Minister saying to the House, on behalf of the federal government, that in his meeting with the premiers tomorrow he is prepared to forgo the federal government's share of that proposed increase? I would like him to make that very clear, and in so doing will he be then saying to the premiers and the oil industry that he expects them to do the same so that at last we can have some concrete action which will be a positive step to reducing inflation in this country?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, I find the suggestion a little bit bewildering because for months the New Democratic Party, indeed the members of the official opposition, argued that what this country needed was the certainty and security of knowing what the prices would be. The hon. member knows that not only were those prices reached after long and arduous negotiation, but in some cases there was a refusal to continue production by the producing provinces. He knows that the agreement meant prices for Canadian consumers substantially below world prices, and I do not see it as being in the public interest to reopen that contract at this time.
I can understand the suggestion now made by the Leader of the New Democratic Party, but I think he has to bear in mind the some 18 months of difficulty during which these negotiations took place. He has to bear in mind the consequences of the Alsands project being stalled and eventually stopped for that period of time, the consequences of the fact that eastern Canadian refiners and importers had to sign contracts for offshore oil, and the consequences due to the fact that therefore a lot of the production was shut-in in Alberta and Saskatchewan. I do not think that I can, simply on the basis of a question, now say that these 18 months of arduous negotiations will be swept away just because the Leader of the New Democratic Party has a suggestion in mind.
June 29, 1982


PRESENCE IN GALLERY OF MINISTER FOR THE CAPITAL TERRITORY, OF AUSTRALIA
Madam Speaker:: I would like to draw the attention of the House to the presence in our gallery of the Hon. William Michael Hodgman, Australian Minister for the Capital Territory and Minister assisting the Minister for Industry and Commerce.


Some hon. Members:: Hear, hear!


PENSIONS
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker,
I am pleased to see that the Prime Minister has finally admitted that the energy negotiation delays were the key factor in the cancellation of the Alsands project. He never admitted that before, and now we know.
I have a very simple question for the Prime Minister regarding pensions of senior citizens. Will he explain to this House how a pensioner is better off when inflation is up 11 per cent, as is projected, and his pension cheque will be up only 6 per cent?


Pierre Elliott Trudeau: Madam Speaker, in so far as what the hon. member calls an admission about the cancellation of the tar sands is concerned, I do not think he has to feign surprise in that regard. It is certain that for a period of many months the federal Minister of Energy, Mines and Resources was saying that we were prepared to go ahead with the tar sands. He said this in answer to many questions in this House, and the hon. member knows that the answer was that the Premier of Alberta said that he would not go ahead with the tar sands unless the whole energy agreement was settled. Therefore, the stalling on the Alsands was not by the federal government; we had made the concessions needed there. The reason why they did not proceed 18 months before was because the Premier of Alberta, as is his right, wanted to look at negotiations as a whole package. That is the reason why Alsands did not proceed earlier.
In so far as the question on pensions is concerned, Madam Speaker, I am afraid the Minister of Finance did not succeed in convincing the opposition of what is behind this whole budget when he talks of a 6 per cent future. I am confident the people of Canada will have got the message and that they, and many of the economic decision makers in this country, the businessmen and even labour leaders, will be prepared to recognize that it is in our interest to bring inflation down to 6 per cent next year. If we can do it-and we can only do it collectively-there will be no reduction even in the speed of the increase in old age pensions. Six per cent is what they will get, 6 per cent will be the CPI if we have co-operation-


An hon. Member:: If!
Oral Questions


Pierre Elliott Trudeau: If! IP. I know it is a lot to ask the opposition to co-operate in bringing this country back to its feet.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: Madam Speaker, all we are trying to do with these questions is to expose the dishonesty of the previous answers which were that the pensioners will be getting more. They will not be getting more; they will be getting less in real terms.


THE ECONOMY
Michael Holcombe Wilson: Madam Speaker, one of the other very important concerns of Canadians is the question of high interest rates. The federal government budgetary deficit of $20 billion is clearly a major obstacle to achieving low interest rates, and when you combine that with the $44 billion of government debt coming due between now and the end of the year, the obstacle is almost insurmountable. What measures is the minister proposing to lead this country to a lower level of interest rates in the face of those two obstacles?


Allan Joseph MacEachen: Madam Speaker, it is obvious the hon. member has not yet grasped the central message of the budget-


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: -that is, to bring inflation down to 6 per cent. That is the surest way to bring down interest rates. It is the hard way, but it is the surest way and the one that will have lasting results.


REQUEST FOR TAX INCENTIVES FOR INDUSTRY
Miss Pat Carney (Vancouver Centre):: Madam Speaker, my question is for the Minister of Finance. Today the stock market dropped like a stone because the minister has failed to recognize that this country faces a full-scale financial crisis. Major corporate bankruptcies are pending because companies are staggering under their debt load and they cannot generate cash to keep their doors open. Instead of bringing in major tax savings and tax incentives, the minister is proposing to consult with industry over the next few months on a variety of proposals, which is like consulting with a home owner whose house is burning down on whether to get a pail of water.
Why does the minister not introduce tax incentives and savings incentives now, immediately, when the economy desperately needs them? Why is the minister waiting until later when all these companies will be broke and the jobs will be lost?

June 29, 1982
Oral Questions


Allan Joseph MacEachen: Madam Speaker, here again obviously the hon. member has either not read the budget or has not understood it. We have provided for interest assistance to small businesses, farmers and fishermen. We are providing a total of $400 million under a special program to reduce interest rates by 4 per cent to all these groups in the community.


Mr. Blenkarn:: On new purchases only.


Allan Joseph MacEachen: That is a direct, immediate measure to relieve the burden of interest rates on small businesses, on farmers and on fishermen. That seems to me an element of the budget that escaped the hon. member's attention.


Pat Carney: Madam Speaker, in the past we have heard the Minister of Finance explain how our economic troubles are the fault of U.S. policy or are the fault of policies in Europe. Now I suppose he will say it is the stock market's fault for wiping $2.5 billion from the value of stocks because of his budget.


TAXATION OF EMPLOYEE BENEFITS
Pat Carney: Madam Speaker, my supplementary question is also for the Minister of Finance. The November 12 budget slapped an additional tax increase on construction and resource industry workers by taxing their job-related expenses, such as health and dental plans, transportation, and room and board. In British Columbia these tax increases amount to about $3 an hour for each worker. How can the minister expect these workers, who were hit with these tax increases only seven months ago, to limit their wage demands to 6 per cent? Why does the Minister of Finance not remove these unfair taxes if he really expects workers in the resource and construction industries to accept these kinds of limits?


Allan Joseph MacEachen: Madam Speaker, I believe that the choice I stated last night is very clear. If Canadians generally want to live in a world of recession they will insist upon wage settlements and income demands of 11 and 12 per cent. If Canadians want to move into a world of recovery and an economy of growth, they will in their own self-interests-


Donald Alex Blenkarn: Demand your resignation.


Allan Joseph MacEachen: -take steps to reduce these income demands. It seems totally inconsistent to me for the hon. member to be suggesting, in order to get Canadians to behave in their own best interests that I ought to make tax changes as a way of providing them, in a sense, with a bribe in order to take that course of action.


Mr. Baker (Nepean-Carleton):: You are having as much trouble as you had in November.


Mr. Paproski:: You could help by resigning.


AIR TRANSPORT
Mr. Jack Burghardt (London West):: Madam Speaker, my question is for the Minister of Finance. Can the minister tell us whether or not the government has further reviewed its decision concerning the transportation fuel compensation recovery charge? This charge was levied on exported aviation fuel between May, 1981, and January, 1982. Can the minister tell us whether or not any decision has been taken regarding a refund to the domestic air transportation industry?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, this matter has indeed been reviewed following representations from the Air Transport Association of Canada as well as many representations from members of the Liberal caucus.


Some hon. Members:: Oh, oh!


Marc Lalonde: Following those representations, the Minister of Finance and myself have agreed to ensure that the money be fully remitted to Canadian carriers as well as to foreign carriers.


HOUSING
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, my question is for the Minister of Finance. Prior to last evening the major problems that confronted Canadian families were high interest rates, high unemployment, the large deficit of the government, and inflation. As of last evening we will continue to have high unemployment, as witnessed by the official statement put out by officials of the minister's own department. The government has done nothing about the high interest rates that affect every single home owner across the country.


Some hon. Members:: Right on.


Ian Deans: We will not have as much money in the economy as a result of the government's determination to extract $1.3 billion in additional tax revenue from Canadians. How can the government expect the economy of Canada to recover if Canadians will have less money to purchase the goods and if Canadians will not be able to buy the homes they are capable of building, or will not be able to keep the homes they now have?


Allan Joseph MacEachen: Madam Speaker, I am pleased the hon. member raised the question of housing. Last night I announced a five-point package in a new and expanded housing program.
I would tell the hon. member, because he has raised the question of interest rates, that the government will provide grants of assistance not only to first-time purchasers of new
June 29, 1982

homes, but also to buyers of existing homes. 1 believe that is assistance to the home owner and also to the construction industry.
However, I can also tell the hon. member that we have enriched the application of the Canada mortgage renewal plan. If he will look at the budget papers, the hon. member will find that any home owner who is spending more than 30 per cent of gross income as a result of mortgage renewal will be eligible for a grant up to $3,000. It will be no longer necessary to defer interest before becoming eligible for such a grant. It seems to me that is a very important step that has been taken in the budget to assist the home owner faced with renewal who has a burden higher than the normal burden carried by home owners. Has the hon. member noticed that particular provision in the budget statement?


Ian Deans: Madam Speaker, I did in fact notice that provision in the budget. It was very interesting, although I expect it will be about as effective as the provisions brought in last November.


QUERY RESPECTING GOVERNMENT TAX POLICIES
Ian Deans: Madam Speaker, 1 have a direct question to ask the Minister of Finance. Why did the government decide to tax Canadians even higher than they are now being taxed in order to find money to give away, rather than direct that the interest rate levels currently being charged for mortgages be reduced to a level that is manageable on a monthly basis for Canadians earning dollars in Canada today?


Allan Joseph MacEachen: Madam Speaker, it is true that we will be collecting more revenues as a result of the budget last night. We are collecting these revenues in order to provide assistance to the unemployed. For example, the hon. member's leader has been calling for a job-creation program. As a result of these new revenues, and the reallocation of other resources, we will be spending, as a result of last night's budget, more than $750 million to generate jobs in the economy.


Ian Deans: Purchasing power generates jobs.


Allan Joseph MacEachen: That is one of the ways in which these revenues will be spent at the present time.


FISHERIES
Hon. John A. Fraser (Vancouver South):: Madam Speaker, my question is for the Minister of Finance and it concerns fishermen and fish processors. Why does the budget not appear to include any relief for fishermen or fish processors who are in serious difficulty-I want the minister to hear exactly what I have to say-meeting present interest rates on
Oral Questions
past investment or current operating expense? There is absolutely nothing in the budget to help these people.


Allan Joseph MacEachen: Madam Speaker, as the hon. member knows, interest assistance for small businesses, farmers and fishermen was announced last night. As I stated earlier, $400 million will be allocated to this program. The eligibility for recipients of this program will be identical to the eligibility rules for the Small Business Development Bond, and the Small Business Development Bond in the November budget was expanded to include unincorporated businesses, including fishermen.


POSITION OF FISHERMEN AND FISH PROCESSORS
John Allen Fraser: The minister said earlier in reply to a question that he did not want questioners to mislead the House. Of course we do not want the minister to mislead the House unintentionally. However, looking at the speech which the minister made last night, under the heading "Interest Assistance for Small Businesses, Farmers and Fishermen", the small business investment grants described there, and to which the minister has just alluded, are clearly stated to be only available if the person or the corporation is undertaking new investment.
I also point out that on page 9 of the printed portion of the minister's text it is again in reference to new investment. I point out as well that according to page 5 of the "immediate release communique" in which the minister talks about this, it is again only available to finance purchases of new depreciable property for use in Canada. Now that the minister has the facts straight, why is there nothing to help fishermen and fish processors in this country who are going under now because they cannot maintain the interest rates on past investment and current operating expenses?


Allan Joseph MacEachen: Madam Speaker, 1 certainly do not want to mislead the hon. member on this point. Perhaps there is a misunderstanding between us. If he will read the budget speech he will see that the small business bond tax provision continues. The program now being introduced is a new direct expenditure program which will supplement the financing available under the Small Business Bond Program to firms in financial difficulty. As I heard the hon. member describe the firms which he has in mind, they are in financial difficulty and will be eligible for this type of assistance.


HOUSING
James Aloysius McGrath: Madam Speaker, my question is directed to the Minister of Finance. In his

June 29, 1982
Oral Questions
reply to the hon. member for Hamilton Mountain, the minister made reference to the $3,000 first-time home buyer grant. Given that the average price of a Canadian home with a 20 per cent down payment would require mortgage payments at 17 per cent of $842 a month, if that $3,000 is to be used to buy down the mortgage it means a decrease in that mortgage interest payment from $842 a month to $800 a month, a 5 per cent decrease. The minister knows that that will be taxed back as a result of an increase in taxes by virtue of decreased indexing. How does the minister see this as a stimulus to housing and a means of making housing more affordable to Canadians?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, the hon. member makes reference to average prices. The $3,000 grant is available not only to single family home owners but to those in duplexes, town houses, and those purchasing condominiums. For example, we believe that the $3,000 as applied to a purchase of a condominium at $50,000 is a significant contribution to a young couple who are entering the home purchase market for the first time. We believe that it ranges anywhere from 3 per cent to 6 per cent, and could be higher in some cases.
We believe that is a significant contribution in view of the way the government has had to look for resources and has had to allocate resources in a budget that does not increase the deficit. It appears that the industry seems to agree, and it would appear that this program will indeed result in a stimulus to the industry of a minimum of 25,000 housing starts in the country.


James Aloysius McGrath: It seems to me that we have heard that song before on the last housing policy brought in here by the government; we heard the same song from that minister. He has failed to address himself to the question of how that person can afford to meet his mortgage interest payments when it is a one-time grant for one year and when mortgage interest payments are continuing to rise. That is the question he does not understand.


IMPACT OF BUDGET ON CONSTRUCTION INDUSTRY
James Aloysius McGrath: Madam Speaker, following the announcement by the Minister of Finance last night, real estate companies on the Toronto Stock Exchange fell by 9.5 per cent. So much for confidence in the minister's policy! The Urban Development Institute said, "Our biggest concern is that a number of Canadians will hold off their purchases until they have a clearer indication of what the legislation will be." That refers to the fact that the mortgage interest deferral has been put off until consultation takes place. I would ask the minister how the budget of last night addresses itself to an industry that is crippled and on the verge of collapse. Let him answer that question.


Paul James Cosgrove: Madam Speaker, I would urge that the industry representatives and Canadians inform themselves on the total budget and all of the
$400 million allocated in last evening's budget to assisting the housing industry. For example, the hon. member does not indicate that the $3,000 is intended to be an immediate stimulus. It is effective today to people who will be out looking for houses on the weekend. It will not wait for the four months of delay, for example, that we experienced in the House through delay by the opposition with the previous budget.


Some hon. Members:: Hear, hear!


Paul James Cosgrove: As well, I would remind the hon. member that, also provided in the budget, is an increase for non-profit and co-op housing, 2,500 units, and we raised that to 27,500, which is 27,500 units more than the Conservative Party recommended to Canadians when they had the same responsibility.


Some hon. Members:: Hear, hear!


FORTHCOMING INCREASE IN OIL COSTS
Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, my question is for the Minister of Finance. In his budget last night the minister proposed to hold federal regulated prices to 6 per cent. The Thursday oil price increase itself will be an increase of 10 per cent, and next year consumers will face a whopping increase of 31 per cent in energy costs. In view of the fact that the Prime Minister today, in response to our suggestions for postponement of oil price increases, said that it was not in the public interest to reopen the oil deal, would the minister agree that he is being unrealistic and misleading when he expects airlines and marketing boards, which are all affected by these increased energy prices, to hold the 6 per cent guidelines? How will they do that?


Allan Joseph MacEachen: Madam Speaker, I indicated in the budget statement last night that the government is requesting all regulatory agencies to keep their price increases at 6 per cent unless they can be justified as necessary.


Some hon. Members:: Oh, oh!


John Edward Broadbent: What about wages?


Allan Joseph MacEachen: The government itself will monitor all the price increases that will take place by regulatory agencies, or which will be submitted by the departments, to ensure that only in those cases where solid justification can be brought forward will these increases take place. It is a serious part of our program and we intend to enforce it to the very limit.


EFFECT ON RETIRED CITIZENS
Neil Young: Madam Speaker, my question is directed to the same minister. As the minister knows, oil and energy costs form a large part of all family budgets. However,
June 29, 1982

Petitions
they place an extra pressure on households that rely on retirement incomes. How, in the name of all honesty, can the minister justify allowing the oil industry to grab another 10 per cent in a price increase this Thursday, while saying to 50 per cent of those Canadians who rely on retirement incomes that their incomes will be restricted, in terms of cost of living increases, to 6 per cent and 5 per cent?


Allan Joseph MacEachen: Madam Speaker, 1 believe that the Prime Minister has already explained the nature of the agreement that exists affecting the energy industry. I do not think that I can add anything further to that aspect of the question.
I would tell the hon. member that, as far as recipients of old age security are concerned, where these recipients are in receipt of the guaranteed income supplement, that guaranteed income supplement will be fully indexed at whatever the rate of inflation happens to be. In addition to that, any amount that would be lost to them as a result of the reduction from 11 per cent to 6 per cent will be made up under the special compensation to recipients of the guaranteed income supplement so that no pensioner in need will be affected by this particular action of the government.


NATIONAL SECURITY
Hon. Allan Lawrence (Durham-Northumberland):: Madam Speaker, my question is directed to the Solicitor General. Could the Solicitor General confirm or deny the rumour that the gentleman known as Mr. Igor Gouzenko, to whom this country and the western world owe so very, very much, has died and is being buried here in Ottawa, today?


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, I received numerous press inquiries before the question period on this subject. I have had inquiries made, and I hope to be able to have that information and make it public shortly, if, indeed, I can confirm or deny that rumour.


PETITIONS
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the two hundred and eighty-fourth report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for Selkirk-Interlake (Mr. Sargeant) on Monday, June 28, 1982, and finds that the petition meets the requirements of the Standing Orders as to form.



ROUTINE PROCEEDINGS


Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Madam Speaker, I have the honour to present the thirteenth report of the Standing Joint Committee on Regulations and other Statutory Instruments, in both official languages.
[Editor's Note: For above report see today's Votes and Proceedings.]


PETITIONS
Mr. John McDermid (Brampton-Georgetown):: Madam Speaker, it is my duty to present a petition signed by 5,159 citizens of Brampton-Georgetown and surrounding districts in Ontario. The purpose of this petition is to urge the government to offer some relief from the increased burden of postage rates to senior citizens of Canada, co-ordinated by Mrs. Sybil Watts of Brampton who has been the driving force behind this petition; it requests the House to look into the possibility of offering cheaper postal rates to seniors whose active and essential correspondence has been so severely curtailed because of the increase of postage rates to 30 cents a letter.
The petitioners hope that in your examination of the petition you will find the petition in order, and that you will exercise the powers vested in the office of the Speaker of the House to refer the matter to the appropriate body for consideration at the earliest possible time in order that this serious burden to many seniors can be alleviated.


Mr. Bob Ogle (Saskatoon East):: Madam Speaker, I have a petition to the honourable the House of Commons of Canada in Parliament assembled. The petition of the undersigned residents of the city of Saskatoon in the province of Saskatchewan, who now avail themselves of their ancient and undoubted right thus to present a grievance common to your petitioners in the certain assurance that your Honourable House will therefore provide a remedy, humbly sheweth: That the world involvement in nuclear armaments will lead to the probable destruction of the human race; wherefore the undersigned, your petitioners, humbly pray and call upon Members of Parliament to express their fears and concerns for the future of all mankind. And as in duty bound your petitioners will ever pray.


Some hon. Members:: Hear, hear!

June 29, 1982
18898_________________________________
Point of Order-Mr. McGrath


Mr. Dan Heap (Spadina):: Madam Speaker, I have the honour to present a petition from the residents of the city of Toronto requesting Parliament to call upon the Prime Minister (Mr. Trudeau) to refuse to allow the testing of Cruise missiles on Canadian soil.


Some hon. Members:: Hear, hear!


Hon. Elmer M. MacKay (Central Nova):: Madam Speaker, on a point of order, further to what the Solicitor General (Mr. Kaplan) has said I think the House should know that the death of Igor Gouzenko has in fact taken place. I would hope that the government, at a suitable occasion, will pay a tribute to Mr. Gouzenko, perhaps by awarding posthumously the Order of Canada in recognition of the risks he has taken.


Some hon. Members:: Hear, hear!


Madam Speaker:: That is not a point of order.



POINT OF ORDER


James Aloysius McGrath: Madam Speaker, I hope you will entertain this as a point of order because I believe it does speak to the issue of order in the House. On a number of occasions the Minister of Public Works (Mr. Cosgrove), who is responsible for housing, during the course of the question period has accused the opposition of delaying Bill C-89 by four months.


Some hon. Members:: Order!


James Aloysius McGrath: That was the subject of a point of order on two or three previous occasions when we sought to correct the record. We tried to point out, by way of a point of order, that the minister was-


Madam Speaker:: Order. I think the hon. member knows that I cannot entertain this as a point of order. It is really a point of debate. Hon. members on both sides probably have different opinions about these particular circumstances, but it is debate, and I do ask the hon. member not to insist on raising it as a point of order, if he is interested in keeping order in the House.


James Aloysius McGrath: Madam Speaker, could I ask for your guidance? If the minister persists in saying that we did something which we say we did not, then that obviously creates a disorder in the House. If the minister insists on doing that, I
have the right to question whether or not the minister is, in fact, deliberately misleading the House.


Some hon. Members:: Order!


Madam Speaker:: Order, please. The hon. member is asking for my guidance. I do not think he needs it. He knows he can take the occasion, when he is making a speech or when he is asking questions again in the House, which he does very often, to try to elucidate those points; but he certainly cannot convince me that it is a point of order.


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. 3,751,4,107 and 4,271.


Mr. MacKay: 1.	Were contractual arrangements made between the government and the province of Nova Scotia for the policing of that province by the Royal Canadian Mounted Police affected by the withdrawal of services of other police forces and the consequent supplying of emergency policing by the RCMP and, if so, in what respect?
2.	Under whose authority and by whom are invoices sent for the services rendered by the RCMP where other police forces have withdrawn their services?
3.	Were the invoices paid in full?
4.	During the past five years in Nova Scotia, in what instances did city, town or municipal police withdraw their services resulting in RCMP involvement and, in each case, what was the cost of the RCMP services and the amount paid?


Robert Phillip Kaplan: 1. No. As all contracts for provincial policing services are required to be tabled pursuant to Section 20(3) of the Royal Canadian Mounted Police Act, they are therefore public documents.
2.	Such invoices are forwarded to the Attorney General by the Chief Financial Officer under authority of Sections 12, 13 and 14 of the Provincial Policing Agreement.
3.	Yes.
4.	Westville from June 9, 1978 to October 17, 1978, New Waterford from July 5, 1978 to July 8, 1978, Truro from October 19, 1979 to October 24, 1979, New Glasgow from October 18, 1979 to October 25, 1979, Amherst from October 22, 1979 to October 25, 1979, Trenton from September 11, 1980 to November 14, 1980, and Halifax from May 29, 1981 to July 23, 1981. The cost of performing emergency police services at the aforementioned municipalities is unknown as all such costs were incorporated in the over-all provincial policing invoices sent to the province in the respective year.


Mr. Cossitt: With reference to the answer to question No. 3,066 stating that Mr. Don Marriott, director of restaurants and catering at the National Arts Centre, did not directly or indirectly purchase a cash register for the National Arts Centre (a) from whom was the cash register purchased and was it purchased from Mr. Marriott or from any establishment in which he had an interest (b) on what date was it purchased and for what amount (c) what were the names of all the persons involved in the transaction?


Mr. Jack Masters (Parliamentary Secretary to Minister of Communications):: I am informed by the National Arts Centre as follows: (a) the cash register was purchased from Jonny's Antiques Ltd. of Shakespeare, Ontario, a company in which Mr. Marriott did not hold an interest; (b) the actual date of purchase is unknown, however the cash register was shipped from Shakespeare, October 30, 1979 and invoiced November 5, 1979, for the amount of $1,700 including provincial sales tax, handling and shipping; (c) purchase of the cash register was negotiated by Mr. Marriott and the principals of Jonny's Antiques are Jonny Kalish and James Bisback.


[Stage Direction]
The Budget
April 2009-March 2010 April 2010-March 2011 April 2011-March 2012 April 2012-March 2013 April 2013-March 2014 April 2014-March 2015 April 2015-March 2016 April 2016-March 2017 April 2017-March 2018 April 2018-March 2019 April 2019-March 2020 April 2020-March 2021 April 2021-March 2022 April 2022-March 2023 April 2023-March 2024 April 2024-March 2025 April 2025-March 2026 April 2026-March 2027 April 2027-March 2028 April 2028-March 2029 April 2029-March 2030
The foregoing amounts include short term Crown-lease contracts and long-term lease-purchase contracts, the latter normally covering a period of up to 35 years. This explains the abrupt reduction of commitments in the year 2014. Moreover, the amounts exclude operating and other costs which can only be committed on an annual basis at the start of each fiscal year. A further point is that commitment values change from month to month due to new leases entered into and old leases
-Mr. Wilson
44.839.374.35
44.839.374.35
26.880.573.98
26.880.573.98
26.880.573.98
282.15
282.15
282.15
282.15
282.15
282.15
282.15
282.15
282.15
282.15
282.15
282.15
282.15
282.15
282.15
282.15
Mr. Baker (Nepean-Carleton): Does the government maintain records showing the extent to which it is contractually committed for each fiscal year beyond 1982-83 for leases and other goods and services and (a) if not, for what reason (b) if so, for each year, what is the dollar value of those contractual commitments?


David P. Smith: 1 am informed by the Departments of Public Works and Supply and Services as follows: for leases: yes, for goods and services: no.
(a) The Department of Supply and Services, as the main contractor of government goods and services, does not keep records of the global amount of long-term commitments. In order to provide a global amount, each department would have to look to individual transactions which in time and money would be prohibitive.
Contractual Commitments-Leases	Dollar Value
April 1983-March 1984	240,649,000.24
April 1984-March 1985	193,989,551.91
April 1985-March 1986	154,243,091.50
April 1986-March 1987	127,048,015.78
April 1987-March 1988	95,459,364.28
April 1988-March 1989	92,774,399.10
April 1989-March 1990	86,264,472.60
April 1990-March 1991	81,862,320.85
April 1991-March 1992	79,953,171.91
April 1992-March 1993	55,848,466.45
April 1993-March 1994	53,793,799.77
April 1994-March 1995	52,707,329.03
April 1995-March 1996	47,087,742.62
April 1996-March 1997	45,168,763.89
April 1997-March 1998	44,839,404.33
April 1998-March 1999	44.839,404.33
April 1999-March 2000	44,839,374.35
April 2000-March 2001	44,839,374.35
April 2001-March 2002	44,839,374.35
April 2002-March 2003	44,839,374.35
April 2003-March 2004	44,839,374.35
April 2004-March 2005	44,839,374.35
April 2005-March 2006	44,839,374.35
April 2006-March 2007	44,839,374.35
April 2007-March 2008	44,839,374.35
April 2008-March 2009	44,839,374.35
terminating.


David P. Smith: Madam Speaker, 1 ask that the remaining questions be allowed to stand.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday June 28, 1982, consideration of the motion of Mr. MacEachen that this House approves in general the budgetary policy of the government.
Michael Holcombe Wilson: Madam Speaker, when I finished my remarks last night I was commenting on the fact that we have a full-scale crisis of confidence in our country today, and this budget comes nowhere near addressing that crisis of confidence. It is another run at the same iceberg that we ran into last November and we are going to have the same damage that we had at that time.
We have a projected $20 billion budget deficit. In the discussions that 1 have held with some of the economists in this

June 29, 1982
The Budget-Mr. Wilson
country, that $20 billion projection is probably low. I think anyone who understands estimates knows that when something is put at $19.8 billion, just below the $20 billion level, it will rise to that $20 billion level.
There is no plan in this budget for economic recovery. The minister does not seem to understand that we have a confidence crisis in the country. Canadians are desperate. Canadians are hanging on to small businesses. They are suffering around a 25 per cent or 50 per cent loss of capacity. People are in desperate need of leadership in the country today. Seventy-five per cent of the people are worried that they or the immediate members of their families will lose their jobs over the next year. That is the state we are in today.
The response of the minister is to put the boots to those who are hardest hit in the economy today, the low-income people and the pensioners. We could not even get a straight admission from the minister today that he was putting the boots to the pensioners. Let me quote what this same minister said when he was the minister of national health and welfare. He said:
Clearly, we owe it to our older people, who have borne the burdens of the past half century, to ensure that they have a decent and adequate income for their retirement years.
That is the same minister who just last night took away half of the inflationary increase of their pensions next year. This is the same minister who is desperately looking for help in fighting these problems. Let me just remind you, Mr. Speaker, of a pathetic line in his budget last night. He was looking around for help. Talking about other industrialized countries, he said:
Their governments are unable or have not chosen to design their economic policies to help us get out of the recession.
Is the Minister of Finance (Mr. MacEachen) seriously expecting other countries in the world to help us get out of our recession, to design their policies so that he can have his problems solved for him? This man is sitting with his head deeply in the ground wondering where the help is going to come from. He is looking all over the place, except right here at home. That is where we have to start to solve our economic problems, not grasping at straws in other countries of the world, but facing up to the reality at home.
Is it any wonder that Canadians shake their heads in bewilderment when they think of this minister and the total lack of new policies and directions that have been indicated in this budget? The budget was simply tinkering with some of the policies that got us into the problems that we have today. It is too little, too late and many Canadians will suffer as a result of it.
I ask you, Mr. Speaker, to step back a little and look at this budget in the context of what has happened in the past two and one half years since February, 1980. This is a record of an inept government, a record of failure that is unparalleled in Canadian political history. Let us go through the litany of these failures.
The Constitution, which was declared illegal by the Supreme Court, had to be changed in order to meet the requirements of the provinces and the people of Canada. The National Energy Program was wrong right from the start. It was first changed in September, 1981, changed again in May, 1982 and is still not right.
Let us now come to the Foreign Investment Review Agency. A major change was heralded in the 1982 election. It was going to increase significantly the amount of intervention in the economy by this agency. It has been presided over by the most extreme of the nationalist members of the cabinet. This agency is not working. It has led to an incredible degree of uncertainty on the part of foreign and domestic investors. It has become a symbol of the lack of understanding of the need for job-creating investments in this country on the part of the government. The changes in the budget last night were not enough, but the fact that changes were made recognizes that the directions that were chosen in February, 1980, were wrong for the country.
The budget of last November was a disaster from the start. The economic direction in that budget was all wrong. Since then we have had at least 35 changes in the income tax provisions. That represents a tremendous amount of uncertainty; uncertainty means delay of economic activity, and that means fewer jobs. There are still more changes to come. The minister has not yet put that one to bed and he is on to his next budget.
The energy security act which heralded the introduction of an omnibus bill, which was going to hijack the rights of Parliament, was forced to be changed by the opposition members. This is a consistent pattern of failure. It is a consistent pattern whereby this government is being forced to change the direction it wanted to follow for a direction that this opposition party was pressing for.
The official opposition, the Progressive Conservative Party of Canada, has been the only entity in this country that has kept the federal government on a reasonable track. Consider the damage that would have been done if there had not been an opposition party fighting for the rights of Canadians and fighting for changes in these policies. Think of the damage that would have been done and the position we would have been in today if that government, with its pattern of failure, had continued on in the same direction. This government cannot continue to lead us in that direction. The country cannot afford to pay the price of the irresponsible and incompetent actions of the government, egged on by the New Democratic Party in many of the directions it is proposing to go. It has only been brought on track by this official opposition. The damage to the country has been too great. The delays in changing these policies have meant a tremendous increase in the amount of unemployment. I will come back to that in a minute.
Divisions have erupted with splits between the east and the west and Quebec and the rest of Canada as a result of the high interest rate policy, the energy program, the Constitution and so on. Why is it that this government continues to take
June 29, 1982

Canadians to the edge of the cliff and push some of them over?
It is irresponsible and it has to change. Canadians want better than that. They want a change. That is why we believe that today an election is necessary to give Canadians the opportunity to rid this country of this government of failure.
The government has been beaten by the country. It has been beaten back by the opposition parties time and again. The budget of last night is not an isolated event; it is part of a series of failures. The government must go to the people to let the people decide. The budget of last night is the sixth major failure since February, 1980.
Let us look at the damage that has been done since that date. Interest rates in general are up three percentage points. More important, mortgage interest rates are up six full percentage points since this government took office. The inflation rate is up two and one half percentage points, close to 12 per cent, almost the all-time high.
The most important number of all is the number of people who are unemployed today who were not unemployed two and one half years ago. There are 300,000 additional people unemployed today. With their families, that means about one million have been directly affected.
From time to time we hear about the number of bankruptcies that have occurred. It does not mean too much unless you have been through a bankruptcy. It is a very debilitating experience to know people who have gone through a bankruptcy. They have lost their confidence and the dream they have been working toward. Since February, 1980, 18,000 businesses have gone bankrupt. During that period 18,000 dreams have been shattered. There are 55,000 individuals who have declared personal bankruptcy.
This government must begin to realize that it is individual people who are being hurt. It is not the political game that we are playing here in the House of Commons that is important; we must deal with the real world. We cannot stay here in an ivory tower in Ottawa; we must deal with individual Canadians who are losing their jobs and their businesses. That is the damage that has been done in the past two and one half years.
Last night I sat back and considered whether this budget would change things and there would be a change in the direction of the country as a result of the budget. The answer I had to come to was no, and the minister knows that. The signal that he does not intend to do that is the fact that he did not give us any projections in the budget last night. There were no five-year projections. There were not even one-year projections. The only projections that we got were what is going to happen in this current fiscal year. We could not even get an unemployment figure or inflation figure past the current figure. Either the minister does not know what he is doing or he is afraid to tell Canadians the truth. He wants to hold back the truth from them.
What will the interest rate be this time next year? What will the inflation rate be this time next year? How many people will be unemployed? We have been trying to find out from the Minister of Employment and Immigration (Mr. Axworthy)
The Budget-Mr. Wilson
how many people who are unemployed today will run out of benefits by the end of the year. These are the sort of figures, that is the sort of information, that we are trying to get out of the Minister of Finance, but he was afraid to give it. He did not want to put that information in front of the Canadian people because of the further damage it would do to his reputation as a Minister of Finance. That is the damage that has been built up over 15 years. That is the damage to the credibility of this government and the damage done to the people of Canada today who are unemployed, who are suffering from high interest rates, who have to roll over their mortgage today at 20 per cent. This is what has happened over the past 15 years of economic mismanagement. That is what we have to turn around and I want to put on the record some thoughts about how we can turn that around later in my remarks, Mr. Speaker.
Let us look at what has happened since the time when we were standing in this House last November after the last budget. In that budget the minister said that the growth rate was going to be 2.2 per cent. Last night he told us that this year the growth rate would be down 2 per cent. That is a change of minus 4.2 per cent.
The unemployment rate last year at this time, or last November, he said would be 7.8 per cent. This year we know it is 10.2 per cent and it will probably be higher before the end of the year. That is how much difference we have seen in a short period of time, partly because of the bad estimations he made at that time, but partly because of the disastrous policies that were brought in in that budget.
The budget deficit indicates there has been an incredible miscalculation. Last year, in the November budget, it was going to be $6.6 billion. This year it is going to be $19.8 billion. That is a difference of $13 billion. It is incredible that he could have been so far wrong. When you think of that, how can any Canadian have any confidence whatsoever in any of the numbers, any of the projections that he puts forward? It may be that that is why, Mr. Speaker, he did not want to give us any estimates of what is going to happen next year- because he just does not know.
This is the crisis of confidence that I was referring to in my opening remarks, and it has not been addressed by this patchwork quilt of a budget. It has not been addressed in any way at all. We need to have a change. We need to have a change in some of the very high profile policies that have been associated with this government and that have had such an impact on the confidence level of people inside the country and outside the country.
The National Energy Program, the way the Foreign Investment Review Agency has been administered, last November's budget, and the budgetary deficit which I have just referred to, are symbols of mismanagement and excessive government intervention that are causing incredible damage to the country

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today. They must be changed. The budget should have shown Canadians that this government understands and is sensitive to the concerns of the people these policies are affecting.
The environment has been poisoned by these policies over the past two and a half years, but did we have any changes last night of any significance? No, we did not. We had a little bit more tinkering at the edges. But words are not enough, Mr. Speaker; the words and the tinkering on the part of the government last night are clearly not enough. It is clearly not enough to blame others, as the Prime Minister (Mr. Trudeau) did again in question period today. All this government can do is blame others. Every time this government blames the Government of Alberta, the Government of Quebec, the Government of the United States, or the gnomes of Zurich or the international markets or whatever, they rob Canadians of something they need and are looking for most, and that is the hope and the confidence that we can do something about our own problems here in this country. That hope was shattered again last night.
I say to the minister, Mr. Speaker, that Canadians know the last budget was wrong and they wanted to see a change in direction. They looked for some admission of error, for some acknowledgement that a change in direction was needed from last November, something that would give them a sense of confidence that things would change, that things would improve. They hoped that maybe the job situation would be better towards the end of the year, that there would be some light at the end of the tunnel. Canadians were looking for that-and they were disappointed. The minister robbed them of that hope with his budget speech last night. Confidence will not be turned around by a $20 billion deficit, almost three times the estimate a short seven months before. It will not be turned around by estimates that are totally out of whack with what the unemployment rate would be and how many people would be unemployed.
Canadians have spoken today. They have spoken in the marketplace where the dollar has dropped to about 77 cents. The stock market has dropped about 40 points today in the market. There is no confidence out there and the budget last night had no success in regaining the level of confidence that is so desperately needed in the country today.
People are frightened. They are frightened by that $20 billion deficit figure, because it is out of control. When the federal government has to compete in the marketplace for the scarce amount of money available-and it has increased its requirements by almost three times-Canadians know that that will mean higher interest rates. It will mean that some borrowers, some small-business men, some home owners, just will not be able to get the money that they need to finance their homes or their small businesses.
Canadians do not understand why, when the government calls for restraint, it increases it own spending by 20 per cent- not just this year but 20 per cent last year and 20 per cent again this year. They do not understand why this government cannot manage its funds better. Canadians do not understand why the government has increased personal taxes by $1.3 billion in this budget. At the same time, it withdraws the
indexation protection that has been given to Canadians for ten years now. They do not understand why that is done, particularly after the mistake that was made in last year's budget. In last year's budget the Minister of Finance raised taxes by $ 1.4 billion. He has raised them again by $1.3 billion, right in the middle of the most serious recession that we have had for years.
We know, Mr. Speaker, that 224,000 people are unemployed today, more than was the case back in November, 1981. We know that the growth rate has dropped from the 2.2 per cent estimate to a minus 2 per cent figure. It is partly the result of the actions taken in that budget of increasing taxes, of withdrawing investment incentives from the marketplace, job creating investment incentives that would have put some of those people back to work.
In question period today we had the Minister of Employment and Immigration admitting that there will be a further increase in unemployment insurance premiums. It has been estimated that that increase will be some $2 billion to $2.5 billion because of the high levels of unemployment in the country today. What does the Minister of Finance do? He did not put that in his budget statement, he did not talk about that. It was hidden there. We had to dig that out of one of the tables. He never mentioned that; he only talked about the $1.3 billion increase in taxes. That is the sort of trickiness that continues to undermine the confidence of people in the country today. It is no way to put business back on the books of small businesses. It is no way to create jobs. It is no way to turn the economy around. That increase in taxes just perpetuates the vicious circle that we are in today.
This budget is tricky in a number of other instances, Mr. Speaker. It is similar to the last one. I recall saying the same thing the last time I was speaking in the budget debate. This budget leaves the impression that some action will be taken, that things are being done. But much of that is in limbo. I want to refer to some of these things that are in limbo, Mr. Speaker. There is a large list; there are nine different items in that budget that are still in limbo. We got the impression in hearing and reading the minister's budget speech last night, that this was action that was being taken right away.
There is a plan to increase the investment of funds in term deposits through a tax gimmick, that of only taxing the real return and not the inflationary return. There is another program to increase the funds available for the purchase of Canadian corporation shares. There is a further provision to allow for lower interest rates in the purchase of a new home, for small business loans and also for Canadian corporations to receive a greater amount of risk capital.
These are all items we are pleased to see. Many of them are derived directly from policies this opposition party, when it was in government and at other times, has put forward as principal elements of economic policy. Hon. members will recall the mortgage and tax credit for home owners so that they could receive interest relief. Hon. members will recall the
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Small Business Development Bond we brought in two and a half years ago and the Canadian common stock investment fund. All these proposals of the Progressive Conservative Party of Canada would have had the same impact as the proposals put forward by the Government of Canada in the budget last night. We welcome those, but we wonder why there is a delay. Why can these not be implemented right away to do the job now when interest rates are at 20 per cent and when there is slow growth in the economy? Instead, they will be put away for a further three, four, five or six months-who knows?-for further study. We do not see action today.
Some provisions arising from the November budget are still hanging. There is the whole question of interest deductibility. That has not been decided yet. It will be carried forward, reviewed again and perhaps never implemented. That degree of uncertainty is still there and is causing businesses to slow down their investment activities.
The tabling of the Ways and Means motion last night should have been done in such a form that we could have dealt with it directly in this House and in Committee of the Whole so that we could get on with budget legislation. Instead, it is being referred to committees in the private sector for further review. How much further review of the November budget do we have to have? How much longer do we have to wait until that budget can be brought into the House of Commons and dealt with by Members of Parliament so that we can rid the country of the tremendous uncertainty that budget has caused? Does the minister not yet have the confidence to bring in that legislation so that we can deal with it?
The Canadian rental support plan was announced in the November budget. There was an incredible statement in the budget last night. The plan is not working, we know that. The minister has told us it is not working, but the government said in the budget papers of last night that it will show flexibility in relation to the amount of money over and above the $7,500 already offered. The government will show some flexibility, but members of the real estate community tell us that they feel that $7,500 will have to be $20,000 if it is to have any impact on getting housing starts going. We still have uncertainty. What does flexibility mean?
Two other elements of the proposals of the government with respect to restraining levels of pay are still hanging in the air. They are still not decided, and that again undermines the credibility of the government in getting on with the job and dealing with the problems we have.
In addition to that the government has been tricky in relation to the budget deficit. I said it probably was more than $20 billion. I am sure it will be more than $20 billion. I hope the minister will have his minister of state make clear just exactly how the number is arrived at so that we can judge whether it is another trick on the minister's part or whether the budget figure is really an accurate one.
Government spending will increase 20 per cent. Do hon. members recall hearing the Minister of Finance talking about a 20 per cent increase in government spending in his speech last night? No, that was not in the speech. The minister ignored that. 1 looked through the budget papers to try to find
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out what the figure would be. In the first line of one particular paragraph it was stated that government spending would increase by 15 per cent. Then I looked a little further down. Three or four paragraphs later buried in the middle of a paragraph I found that over-all government spending on a national accounts basis-the most accurate basis for measuring government spending-would be increased by 20 per cent. This is a very tricky budget indeed.
That raises another question, and that is the question of indexation. With his statement last night the minister took the first step toward removing indexation. Taxes were effectively increased by $1.3 billion, or 6 per cent, but the budget also removes a key element of discipline in government spending which was brought in on the suggestion of the Hon. Robert Stanfield.
However, more important than that discipline, which is very important at a time when government spending has been running away at 20 per cent annum for two years, is where this withdrawal of indexation stops. How far will we go? The minister has removed indexation from certain social programs and the pension funds of certain Canadians. Is this the beginning of the end? The minister calls this tax expenditure. What other tax expenditures are going to go? Does this mean we will be taxed on the imputed rent of our houses? Is that the next step? Will there be capital gains taxes on the principal residences of Canadians? What other taxation will there be to satisfy the greed and the unquenchable thirst of this government for Canadians' money? That is the question we are asking the minister today.
There have been some changes since the November budget. We are pleased with some of them, and I referred to some of them last night. I will not go through them again. I just observe that 35 changes have already been made. Is that not enough of a sign of the minister's incompetence and the lack of confidence that instils in the Canadian community?
If that is not enough, let us look at the changes which have not yet been made in the budget of last November. The minister did not explain last night why dental and health benefits are still being taxed. The dental association has told us that those increased taxes will hurt low and middle-income Canadians more than other Canadians. The minister did not tell us why employee benefits, particularly in the mining and natural resource sectors, will still be taxed. This past weekend we heard about problems in labour negotiations currently under way in British Columbia where employees have been taxed $3 an hour, or $19 a day. That amounts to about $3,500 or $4,000 in tax which has to be paid by those employees. Is it any wonder they are having trouble with their labour negotiations? That is the most inflationary element the minister could have put into that budget of last November, and we still do not understand why he has left it in.
The minister also has not told us why he has left in the proposal not to allow interest deductibility on loans made to purchase registered retirement savings plans. That is a very mean proposal by the minister. It is mean because again it hits

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low and middle-income people, the people who cannot afford to pay out of ready cash. They have to go to the bank and have forced savings plans. However, the interest paid will not be tax deductible.
There were seven elements of the November budget which I have identified by which individual Canadians over 65 years of age would be taxed additionally. I have not had an opportunity to check thoroughly on this, but I understand that of those seven elements, one has been withdrawn, one has been amended but five are still in place whereby senior citizens will continue to be taxed at a higher rate than prior to the November budget.
There are other parts of the budget of last November which should have been changed. One aspect is the capital cost allowance. At a time when we needed job creation, the minister withdrew large capital cost allowances from Canadian businesses. Other elements were the resource allowances in Canadian steel companies and the treatment of reserves on the sale of property, small businesses and farms. This has not been changed significantly, and certainly not in the budget of last night.
By leaving those last three matters in, the minister has ignored the fact that we should not just be looking at tax revenue; it is what that money can generate if it is left in the hands of private citizens to put to work in the economy. That creates jobs. The jobs created generate revenues for the government, but all the minister has chosen to look at is the fact that it represents tax revenues. When we remove those job-creating and investment tax incentives-what the minister calls loopholes-is it any wonder we have gone from a 2.4 per cent or a 2.2 per cent growth expectation to a loss of minus 2 per cent this coming year?
That budget should have been totally withdrawn. There was no reason why that abortion of a budget should have been left in place; it should have been taken off the books altogether. The minister should have started afresh last night and learned from the mistakes brought home to him day in and day out since November 12 last year and which he has totally ignored. The minister is not reading his mail, Mr. Speaker.
I should like to comment briefly on the public sector restraint program, Mr. Speaker. Prior to the budget, we in the Conservative Party said that we would support the public sector restraint program provided that it met two conditions. First, that it would take place within the context of a broad restraint program by the Government of Canada; and second, that the program would have some flexibility so that people on low incomes who are in the worst economic position today could be treated differently and those who warranted some merit increases could be treated differently.
Neither objective has been achieved in this budget. Clearly, no restraint program is being offered by the Government of Canada when it is increasing spending by 20 per cent this year. Obviously, there is no flexibility when a 6 per cent limit is placed on everyone, whether a clerk, SX3, a deputy minister or the president of a Crown corporation. Everyone, the good
employee and the not so good employee, is treated the same way. I urge the government to consider these proposals to extend government restraint programs and to put tighter control on government spending in order to bring it below 20 per cent.
I would also ask the government to consider capping wage and salary budgets to allow for some flexibility so that there could be different treatment for low-income employees in the government as well as for those who merit some increased remuneration because of good work.
Today's approach is inequitable, Mr. Speaker. It is too rigid and not appropriate to the circumstances. The public sector is being asked to make sacrifices but it is unlikely that it will feel part of a major recovery program that is so important to the country today.
I should like to return to the broad perspective that I discussed earlier and outline some of the Progressive Conservative Party's approaches within that perspective. In the 1980 election and following that, the Liberal Party, urged on by the New Democratic Party, took a major step to move the country toward more government, greater intervention and regulation and more government involvement in our lives.
We saw this in high profile programs such as the National Energy Program, the Foreign Investment Review Agency changes and the industrial policy which has been discussed by the government. These are high profile examples of this movement toward greater intervention. More pervasive and less obvious, however, are the increases in government spending which cover a number of smaller programs. In 1980, government spending rose by 16 per cent, in 1981 by 20 per cent and 20 per cent is projected for 1982. This will require tax increases. First, there were massive tax increases under the National Energy Program. In the November budget and in this budget the tax increases were not quite as obvious but they were there and the impact is being felt across the board.
More damaging than all that, however, is the method that the government has used to inject itself into the lives of Canadians. The government has removed those tax incentives and the so-called loopholes which used to encourage productive job-creating investment in the past and replaced them with direct, bureaucratically controlled programs, grants or direct subsidies, programs used extensively in research and development, by the Department of Industry Trade and Commerce, the Department of Regional Economic Expansion, and in this budget and the one before, in housing and in the oil and gas industry.
The policy of the Progressive Conservative Party is to change high profile programs such as the Foreign Investment Review Agency and the National Energy Program. We would keep the parts of those programs that could be of benefit to Canadians and throw out those parts which are obstacles to economic progress and are too arbitrary.
It is important to realize that if the government can provide a clear signal of change in the direction of its policy, that will
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be the key to recovery of the confidence that is missing and which is needed to encourage Canadians, whether individual investors or companies, to expand and embark on job-creating activities. The government's tinkering with the National Energy Program and the Foreign Investment Review Agency in the past few weeks is not enough. The two ministers concerned should be changed. Both have become associated with one of the key things that is wrong with the government, and that is excessive nationalism and excessive government intervention. Both should resign or be changed by the Prime Minister.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: The Conservative Party would also replace those direct grant programs with tax reductions, whether they be general tax reductions or some targeted incentives similar to those things that were removed by the budget of last November. This would encourage productive investment in research and development, training and export industries. The tax reduction way is less arbitrary. It does not require bureaucratic decision or a lot of red tape. It only requires an individual to decide whether he wants to take advantage of a particular program. He does not have to come to Ottawa, cap in hand, to ask the minister or one of his officials whether he can participate in a particular program. Last night we were told that one of the drawbacks of the program proposed for small businesses that was announced by the Minister of Finance is that small business does not have the time to take advantage of it. People are too busy to waste time fighting through the red tape in Ottawa.
We must also remember that if incentives for research and development, export promotion and job training can be put in place, the return to the government and to the people of Canada will be immense. Product development will improve and so will our competitive position, thus reducing inflation and equipping Canadians with the means of taking advantage of their opportunities and putting them in a frame of mind to grasp these opportunities aggressively and run with them.
The time is right for a major shift in the direction of government policy. We need to move toward less regulation and less government control. That translates into lower taxes. We must move toward more restraint and better management of government operations. We must also move toward less direct government grants and subsidies. These should be replaced with tax incentives that would generate productive job-creating investment.
I am convinced that this combination would lead to a stronger economy, more government revenues, less unemployment and lower interest rates. The time is right for this. Canadians have had too many examples of the government's failures and have lost all confidence in this minister and the government. They are tired of the government's trickiness, its approach to budget making and other policies. They can see a new direction in the Progressive Conservative Party of Canada, a move away from the Liberal-NDP coalition that has been in place for the last two and a half years.
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Some hon. Members:: Oh, oh!


Michael Holcombe Wilson: That direction relies on the energy, the initiative and the motivation of individual Canadians. It has less trust in the benevolence and paternalism of the state. That is the direction in which we should be moving.
It is for that reason that I move, seconded by the Right Hon. Leader of the Opposition (Mr. Clark):
That all the words after the word "That" be struck out and the following substituted therefor:
"because of widespread lack of confidence in the management of Canada's economy, aggravated by an incredible budgetary deficit of $19.6 billion and a totally unrealistic and intolerable increase in government spending of 20 per cent at a time when the government itself is calling for restraint at 6 per cent, all of which results in a squeeze on pensioners, mothers and the unemployed and perpetuates high inflation and high interest rates, this House is of the opinion that the only effective method of restoring confidence in the economy and giving Canadians hope for the future is the immediate resignation of the government."


Some hon. Members:: Hear, hear!


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, as we begin this budget debate today we can hear, if we are quiet, a ghost in these halls. The ghost of R. B. Bennett has returned. Fifty years ago he had a solution to the difficult economic times in this country. His solution was to increase taxes, and we know what happened.
I suspect that if this continues we will have in a few years the MacEachen buggy for transportation. I also want to remind the members opposite that any revolt in history found its roots in the people's concern about taxes and tax increases. The minister's first budget missed the mark, Mr. Speaker; the second time he was up he swung and missed; the third time the minister has struck out.
Yesterday, Mr. Speaker, the dollar closed at 77.70. This morning it dropped below 77 cents, and at one o'clock was worth 77.13 cents U.S. In other words, the money market's reflection of last night's budget indicated that investor confidence in this country has deteriorated.
As of two o'clock today the Toronto Stock Exchange composite index had gone down 40.78 points, a decline of nearly 3 per cent. The largest loss was in real estate and various construction issues which declined 219 points, or nearly 7 per cent. Oil and gas losses were second and the utilities were third. In other words, the economic barometers which quickly reflect the views of investors indicate that they have seen nothing to give them any encouragement.
This was a budget of betrayal. I do not expect that there has ever been as many Canadians in their homes and offices focus on their radios and televisions as there were last night, awaiting the good news, awaiting some indication of hope and new direction. But, Mr. Speaker, the people of this country were betrayed by this government. Instead of new policies and new directions, they received tax increases. Senior citizens are going to be asked to receive less benefits than they would normally receive next year. Single parent families are going to

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find that their family allowance will be less than they expected. The working people of Canada are being asked to pay the price of this Liberal government's economic mismanagement over the last number of years.
To get an indication of what this government feels the next number of months will hold, we look at the budget documents and what the government has projected. Every budget has a number of pages where the government projects the rate of inflation and unemployment, and what job opportunities will be like. But we note the absence of those pages in this budget. There is very little forecasting, and I wonder if that was not a conscious omission, Mr. Speaker. Knowing what is going to happen in the next six to 18 months, would any government want to describe the phenomena of more difficult economic and social times?
Just seven months ago, Mr. Speaker, we had a budget-so-called, because it has never seen the light of day in this House-which forecast unemployment of 946,000 in Canada this year. It was wrong, because today we have, according to Statistics Canada figures, 1,241,000 unemployed plus nearly
200,000	people who have given up looking for work. The budget suggested that the unemployment rate would be about 9 per cent, but today it stands at 10.4 per cent.
Real gross national product was predicted to be up 2.2 per cent. On an annualized basis it is now down 8 per cent. Seven months after the budget inflation is 11.8 per cent and destroying the purchasing power of virtually every single Canadian, and the prime rate today is 18.25 per cent. The dollar is at an all-time low, housing starts are off 50 per cent over last year, more than 1,000 construction companies have gone bankrupt in the last year, and the budget deficit is touching $20 billion. Because of this budget that deficit is likely going to be closer to $23 billion by the end of this year.
The reason for that is that this budget assumes a major economic recovery in this quarter and the following quarter. Anyone with any economic understanding or with financial know-how will know that as a result of this budget economic recovery is not about to occur. We also find that the decline in industrial capacity will likely continue for a number of months according to all projections, having fallen now for ten consecutive months.
Since the last federal election 18,000 businesses have gone bankrupt. What does that mean? It means that, not counting those who have gone through the process of receivership or all those businesses which simply closed their doors, boarded up their windows and walked away, we are talking about tens of thousands of Canadians who have lost their hopes and dreams along with their life savings as a result of the economic conditions this government has been perpetuating for the last number of years.
However, statistics do not clearly describe the human tragedy and suffering which is occurring in Canada today. They do not describe the fear that people have, the want that so many Canadians are experiencing, or the anxiety and despair. When you have nearly two million people, Mr. Speaker, caught in the web of enforced idleness, what does
that do to the health and morale of the country? What does that do to the household where the breadwinner is sitting idle with no hope of finding a job in the immediate future? I suspect that as a result of these conditions, which will be aggravated by the budget of last night, we are going to see an overwhelming wave of protest of discontent and anger unprecedented in Canadian history. It is an understatement to say that the economy is not healthy.
I listened with interest to a number of premiers who were commenting on the budget and saying how it would affect the provinces. Most premiers said they were afraid Canada was heading into a very serious depression, that some sectors of our economy are too far gone now ever to recover properly because they have fallen beyond the point of no return.
If you visit shopping centres and walk up and down the main streets of Canada today, you will notice an absence of people purchasing commodities in businesses, shops and small factories. People do not have the purchasing power they had a year or 18 months ago. People are not buying today because they are unable to do so.
Industrial capacity in our country is operating at less than 70 per cent. Plants are laying off employees and are closing down because no one is purchasing their goods. Offices right across Canada are closing their doors. They are cutting back on staff because no one is using their services. Half of our mines are closed because people are not producing their goods for manufacturing purposes. The saw mills have been laying off employees from one end of Canada to the other. Today in the province of British Columbia nearly one quarter of the IWA membership is laid off because people cannot afford to buy or to build new homes and factories.
People cannot afford to buy goods and services in this country. But how does the government react? The government reacts by raising taxes, by restricting wages and salaries which will keep more money out of the marketplace. This situation reminds me of the old medieval doctor whose idea of assisting his patient was to take a knife and insert it into him to make him bleed. That is kind of methodology the Minister of Finance (Mr. MacEachen) is using today. Dr. Allan is asking us to bleed a little more.
I received a telegram this morning from the Community Business and Professional Association of Canada. This telegram states that it is high time workers are not again singled out to take the rap and that well-paid workers are their best customers. The business community of this country is concerned when their customers are no longer employed or are being threatened with lay-off. We know what is happening to the business community of this country. Some token assistance was included in the budget for those businesses interested in expanding, buying new plant equipment and machinery. But what businesses are able to do this? What businesses are in the process of expanding during these times to take advantage of these programs?
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Last April a survey was taken by the Canadian Federation of Independent Business. All of the participating businesses were asked how many were planning to expand their plants and how many were not planning to expand operations. Last April's statistics are very interesting. Thirty per cent of those participating said they would be reducing operations; 65 per cent said they would simply try to hang on-not expand-to where they were today; and 5 per cent said they wre considering expanding operations. We all know that things have worsened economically since April. I suspect we are looking at only 2 to 3 per cent of the Canadian business sector that is interested in expanding. That is the kind of percentage of business that may benefit from some of the token business support in this particular budget.
The crudest blow of all came in the area of taxes. Canadians surely felt betrayed when they saw tax increases. These increases are a result of the deindexation to be introduced following last night's budget. This deindexation step will cost Canadians $1.3 billion. I am sure that measure shocked people across the country. People were looking for some new direction and some new initiative. Instead they found they would be paying more in taxes and were being asked to bail out this government's mismanagement of the economy. Not only were taxes increased right across the board, but certain groups have been identified to pay a particular price and to carry an extra burden. These include our senior citizens, the "wealthy", group. They are the ones being asked to carry an extra burden. The increases they would have expected next year will be less than the rate of inflation. My mother and father are senior citizens. I know what "life of luxury" they lead. They have a difficult time getting by. Last night's news did not come in a very favourable way for them.
What about family allowances? It is interesting to consider that three out of every five working women in this country live below the poverty level, as evidenced in a recent report tabled by the government, and depend on family allowances to assist them in these difficult times. They are struggling to raise a family of one, two or three. They found out, too, that there was good news in the budget for them. They found out that they will not receive the same increases that they normally would next year. 1 admit the very poor will get a slight increase next year; they will gain 93 cents a week. The very poor will be able to purchase two thirds of a litre of milk extra a week thanks to this budget. That is the kind of progressive legislation which this government is prepared to introduce.
It is interesting that the average family in Canada-if there is such a thing, but I am thinking of two parents and two children with a family income of about $30,000 a year-will lose $ 125 a year because of the personal exemptions that they will cease to have. They will also lose about $72 a year in family allowances. That is not a major amount, but just the same, during these very difficult times with inflation chasing us at around 11 per cent, having $200 less in the average family income is not the news they were hoping to hear from the Minister of Finance last night.
The Budget-Mr. Riis
What is in this budget for the manufacturing sector? One thing all Canadians know is that long-term job security in this country is not in the resource sector, it is not in the energy sector, but in the manufacturing sector. What incentive and encouragement, hope and help did that sector get in this budget? It got absolutely nothing. The most critical sector of our economy got absolutely nothing.
What did the resource sector get? What do I tell my unemployed IWA people in western Canada? What did the budget have for them? What did the budget have for that sector of the economy? It had absolutely nothing.
What about the mining sector? What about the fishing sector? What about the tourist industry? I could go on and on, Mr. Speaker. There is very little in this budget that will assist any of the critical, strategic advantages that we have in some sectors of our economy.
One of the most disappointing features was that research and development have been largely overlooked. The research and development sector is where Canada holds a key in terms of its economic development and its long-term recovery program. We have a well-educated, well-trained population who are able to take advantage of research and development programs in our labs both in the private and public sector. But was there anything in this budget to encourage research and development in Canada, other than a very token amount attached to the Small Business Development Bond program? There was absolutely nothing. This was a real disappointment for those people who are looking for breakthroughs in terms of research and development through to production in Canada.
The Canadian small business sector got welcome news. They found that FIRA is going to be opened up so that more foreign competition can come into the country. Let me remind this House that the Canadian Federation of Independent Business feels very strongly about FIRA. They know that the small business sector of this country is the one sector that virtually is 100 per cent Canadian owned and is the job creator in Canada. This is where research and development takes place. But what assistance did it get in this budget? The floodgates were opened up for FIRA so that we can have more foreign takeovers and more foreign intervention in Canada.
We remind the House that one of the reasons we are facing difficult economic times today is that we have lost control of our economy. The decisions on the Canadian economy are being made in the boardrooms of Tokyo and Dallas instead of Toronto, Vancouver, Halifax and Winnipeg. Thanks to the Minister of Finance, this budget will make that problem even greater.
I recently received some devastating news. A small businessman in my riding who operated a firm which was participating in research and development in the satellite technology field indicated that he had been receiving a very critical component of their operation from a manufacturing firm in Mississauga. He told me that he was grateful for the Canadian involvement in the development of a new product which could be marketed

June 29, 1982
The Budget-Mr. Riis
both domestically and internationally. However, he received notice that the New York parent company had advised the Mississauga firm, which was a branch plant, that it could no longer supply the Canadian market because all of the components were needed in New York state. Therefore, this small business which had conducted research and development through to production programming suddenly discovered that it was no longer capable of delivering to its own domestic market as a result of the decision by the parent company in New York state. That is the kind of situation which we must start reversing in Canada and the opening up of the F1RA floodgates is not the direction in which we want to head.


Mr. Crosbie:: What inconsistent twaddle!


Nelson Andrew Riis: This budget has been misdirected in a number of areas. The government has found the cause of inflation in this country. It is called the public sector. It is the villain that has caused inflation. Of course, the response is to restrain wages and salaries to 6 per cent this year and 5 per cent next year. I would remind hon. members opposite that wage settlements for the last five years in the public sector have fallen behind the private sector and the private sector has fallen behind the rate of inflation. Anyone who says that the public sector is the villain in this inflationary spiral-


Mr. Kristiansen:: Is a liar.


Nelson Andrew Riis: -is missing the point. A leaked document intended for the cabinet which was written in January of 1981 called "Anti-Inflation Policy Option" said that for PR purposes restricting public sector wages is a good idea, but in terms of having anything to do with reducing inflation in this country it is totally useless. That was from the government's own advisers to the cabinet back in January of 1981.
What will be the result of these restrictions in those communities of Atlantic Canada which depend on the federal and provincial public sector for a major portion of their economic base? We have examples of how wage restraint can be effected. Many of us remember back to 1975 when the AntiInflation Board was introduced. The purpose was to reduce inflation in Canada. I remind hon. members opposite that when the Anti-Inflation Board was formed in 1975 the level of inflation was 7.5 per cent. When the guidelines were removed the inflation rate had not gone down but had increased to 9 per cent. Canadians all across Canada had taken devastating wage and salary cuts.
1 challenge anyone to show me a credible author, researcher or financier who says that wage controls are a reasonable or workable method of combating inflation, because I suggest they do not.
Of course, these restraints are across the board. But this will not be welcome news to those two out of three women whose incomes fall below the poverty line. Their $12,000 a year will receive a 6 per cent guideline, just as some of those across the way who are making $120,000.


Lyle Stuart Kristiansen: Governor Bouey.


Nelson Andrew Riis: Is that the kind of equity that we want?
Since the government has indicated that its own regulatory agencies will be following the 6 per cent and 5 per cent guidelines, a good test will involve the energy increases coming up in a few days. The price of oil will be rising 10 per cent on July 1 and the price of gasoline will be increasing by 25 cents per thousand cubic feet on August 1. This presents an excellent opportunity for those members opposite to demonstrate their commitment to this program. Do they have the courage to introduce a limit or a freeze or restriction of 6 per cent on that particular agreement?
Next year the government will have another opportunity to prove its commitment, because in 1983 energy costs will not rise by 10 per cent, 20 per cent or 30 per cent, they are going up over 30 per cent in one year. If that is not the cause of inflation in this country, then I do not know what is.


Some hon. Members:: Hear, hear!


Nelson Andrew Riis: Perhaps there is a better way to show its commitment. On Thursday we will likely see an increase in the bank rate. As investors around the world view this particular budget and the direction provided by the government, I believe we will once again see the need for the Bank of Canada to intervene and jack up interest rates. Why not have the Bank of Canada follow the same route and limit any increase in interest to 6 per cent? The bank rate on Thursday will likely be approximately 16.58 per cent. If that were limited to a 6 per cent increase, it would mean that next year the rate would be limited to 17.57 per cent. If the government is to show that kind of commitment to such a program, this would be the type of news that Canadians would probably enjoy hearing.


Michael Holcombe Wilson: Do you want interest rates at 17 per cent?


John Edward Broadbent: Even that is too high.


Nelson Andrew Riis: Of course that is too high. It would demonstrate a commitment of some kind, but the government is not prepared to do that.
It is our policy to reduce interest rates, because without any reduction in interest rates in Canada there is no hope of any kind of economic recovery program and absolutely no hope of any recessionary turnaround.
With respect to job creation, I do not know how the Minister of Finance had the courage to stand in the House and discuss a job-creation program which would create 100,000 jobs when there are nearly two million Canadians out of work.


Ian Deans: It is also a lot of nonsense.


Nelson Andrew Riis: It is nonsense. It is cosmetic, an ad hoc and band-aid approach. It pales when one considers that although
100,000	jobs may be created, there are nearly two million unemployed. It is MacEachenism all over again.
At this time I wish to propose an amendment on behalf of the New Democratic Party. I therefore move, seconded by the hon. member for Oshawa (Mr. Broadbent):
June 29, 1982

That the amendment be amended by inserting thereto, after the word "rates", the following:
"and further for failing to bring about an immediate reduction in interest rates; for increasing the tax burden on lower and middle income Canadians; for failing to implement a strategy to strengthen Canada's job producing industrial capacity; for failing to strengthen FIRA's ability to protect Canadian productive capacity and jobs; for further reducing the purchasing power of many Canadians by instituting wage controls in the public sector; and for reducing pensions and other social programs; therefore-"
I want to comment very briefly on the housing provision that was introduced. After much fanfare the impression was that the housing industry can now begin to take off. The program introduced was to result in a miraculous change with respect to the housing program in Canada. Again, I do not know how the Minister of Finance had the courage to stand up and say that the government was going to make a major commitment to the co-operative housing sector by adding 2,000 more units across Canada. The city of Vancouver alone will take up 2,000 more co-operative housing units, let alone the idea that this will have any meaningful impact across the country.
Considering the $3,000 grant, the problem is not to assemble a downpayment to buy a home these days but, rather, it is what on earth to do with the 20 per cent mortgage. That is what is keeping Canadians from purchasing homes, not the fact that they do not have $3,000 toward a downpayment.


Some hon. Members:: Hear, hear!


Nelson Andrew Riis: It is interesting to look at the figures. One finds that a typical home in Canada costs $67,500 today. It requires a 10 per cent downpayment which means that, in order to qualify for a mortgage, a family's income would have to be $45,000 per year. The average family income in this country is less than $30,000. What this means is that virtually no Canadian will be able to take advantage of this program. Perhaps there will be a handful of exceptions. I might also add that the government grant might cause some incentive to add $3,000 to the purchase price.
Is there anything in the budget for renters? Canada Mortgage and Housing Corporation itself states that half a million low-income renters pay more than 30 per cent of their income for shelter, yet when one considers what this budget will do for the renters of Canada, one finds that it will do very little indeed.


Some hon. Members:: Nothing!


Nelson Andrew Riis: "Nothing", as a number of my colleagues say, would be closer to the truth.


Ian Deans: Just adding to their tax burden.


Nelson Andrew Riis: As a westerner, I was listening very closely to what the minister had to say concerning the Western Development Fund. I remember that back in 1980 when it was introduced, $4 billion was devoted to assisting western Canadians. Then in the next budget it was reduced to $2.2 billion. In this
The Budget-Mr. Riis
budget the western development fund is totally non-existent. That is interesting.


John Edward Broadbent: It is the story of the Liberals of western Canada.


Nelson Andrew Riis: As the hon. member for Oshawa (Mr. Broadbent) indicates, it is the story of the Liberals of western Canada who have met with the same result as the Western Development Fund.
I suspect that in this budget we have seen the beginning of the end of indexing in Canada. It will take $1.3 billion out of the taxpayers' hands and put it into the government's hands, which means, of course, that the government will have a vested interest in inflation. That is very dangerous. This government cannot be disciplined if it has a vested interest in the rate of inflation assisting its cash flow. We see that the budget will protect one group, the investors of Canada. A number of provisions in the budget will assist investors in their problems with inflation, but there is nothing for the average working Canadian.
This was a missed opportunity. The people of Canada were looking to the Minister of Finance to provide them with some hope and a new direction. The opportunity to reduce interest rates was missed. The opportunity to initiate renegotiation of those oil and gas prices was missed. There was an opportunity to cut the taxes of Canadians to enable them once again to purchase goods and services from Canadian manufacturers and suppliers. There was an opportunity really to stimulate housing and to create jobs because of the massive spin-offs from that industry. But that was missed as well.
There was an opportunity to introduce serious procurement policies. When we look at the facts, we find that if Canadians were prepared to use one week's wages to buy Canadian goods as opposed to foreign imports, it would automatically create
25,000	jobs just by that one deed alone. We need to have strong "Buy Canada" programs in place, strong procurement programs in place and strong production agreements with some of the foreign multinationals as well. We should say to the foreign multinationals that if they are to carry on operations in Canada, then they must start providing jobs in this country, not simply use it as a marketplace. We should tell the Japanese auto industry that if it is to provide 200,000 vehicles to Canadian purchasers this year, then it must start sourcing some parts and components and assembling those vehicles in this country as well. In other words, if these multinationals are to gain profits in Canada, then they must start creating jobs in this country as well. That is our bottom line.


Some hon. Members:: Hear, hear!


Nelson Andrew Riis: Again, that was a missed opportunity.
There was a missed opportunity to introduce research and development incentives for Canadian companies, individuals and institutions. Of course, there was a whole number of changes for which we were hoping in relation to those who work in the northern parts of Canada. There should be

June 29, 1982
Adjournment Motion
changes in northern benefits for those who must travel and live away from home working in the resource sectors.
There should also be changes in tax deductions for those having to face the burden of child care costs. The budget should have included increases in child tax credits. There are a variety of measures which would be progressive, confidence building and which would send a clear signal to Canadians that this government has a policy and a strategy and that need the co-operation of Canadians from every region. But as a result of the lack of direction and the introduction of punitive measures, Canadians are now pitted against Canadians, regions are pitted against regions and virtually every Canadian is against the Government of Canada. This is the kind of solidarity we have in our country.


Some hon. Members:: Hear, hear!


Mrs. Mitchell:: MacEachen, solidarity forever.


Nelson Andrew Riis: I want to end by reading the following quote:
What we need today are progressive economic, social and financial measures, but we are not getting them. That is why all across this country at the present time there is a rising tide of discontent. We find it everywhere. Criticisms are being levelled against this Parliament; criticisms that in the main I think are unfair are borne out to some extent by this Parliament itself. Today, for example, we have the budget debate; but ... I counted at one time only 20 government supporters in their seats, and there were not very many more on the opposition benches. That goes to show that Parliament is apathetic, and 1 believe hon. members of this Parliament are disillusioned. The time has come, I say, when in the Dominion of Canada we need a forward-looking policy for the people of this country, and the government is giving neither the policy nor the leadership necessary to bring about the formation of it.
That was stated by Mr. M. J. Coldwell on April 28, 1939, and it applies today as it applied then.


Some hon. Members:: Hear, hear!



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand)-Official languages-Publicity issued by Montreal festival; the hon. member for Fundy-Royal (Mr. Corbett)-Canadian National Railways, (a) Announcement of lay-offs, (b) Request that minister make representations to cabinet; the hon. member for The Battlefords-Meadow Lake (Mr. Anguish)-Indian Affairs, (a) Delay in on-reserve housing program, (b) Construction of school at Dillon, Sask.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. MacEachen that this House approves in general the budgetary policy of the government.
Lloyd Axworthy: Mr. Speaker, let me begin by thanking hon. members of the opposition for their contributions this afternoon. We all know that this is a very serious time. It is a very important debate. We on this side of the House are certainly more than interested in hearing the proposals of hon. members of the opposition, as we are in hearing from all Canadians concerning the ways in which we can come to grips with the economic situation now facing our country. I only regret that in their rush to spill out the recycled speeches of days, weeks, months and years past, hon. members opposite have been neglectful in facing the reality of the present situation.
Once again, we have heard a grand litany of condemnation about the failure of the government and missed opportunity, without ever once referring to the kind of realism which must be faced by any government in this period of time. We heard all the gimmicks. It was like watching the snake oil salesman who has instant anwers to all the problems, except that once again hon. members did not find any way of bringing their remarks together with any consistency, rationality or purpose. In fact, once again we are faced with a very deliberate attempt to distort the basic reality of our economic situation and the answers that we have put forth. I can only say that it was deliberate, because they have done it before and we have tried to correct their indiscretion.
We have had, from the opening moments of the House today, attempts by members opposite in both parties to suggest that the measures introduced last night by the Minister of Finance (Mr. MacEachen) are somehow going inexorably to tax those with low incomes, that there will be an enormous burden upon the poor. We heard the last speaker from the NDP wax about single parent mothers who unquestionably in our society suffer the most in terms of income support and services. That hon. member neglected to mention, and we can only assume it was a deliberate omission because he is far too intelligent a person to forget such things, that of the 3.5 million women who receive family allowances, 2.5 million receive child credits. Those child credits will in fact be increased this year over and above what the normal increase was expected to be.
That, frankly, was irresponsible. I do not say that in any personal sense, but it is irresponsible of the hon. member to stand up in this House and try to foment fear and anxiety by the proclamation of false information. That is really an irresponsible act by someone who has taken an oath to be a
June 29, 1982

Member of Parliament and to try to maintain some degree of obligation to veracity when he speaks in this House. He was not alone. I do not want to single out that particular member, but that is an example of the kinds of things we have heard all week.
We heard the members from Saskatchewan hooting, hollering, and whooping in the backbenches saying that the western fund has disappeared. It has not disappeared. The very day the budget was released, we had the distribution of the Gilson report which has a $3.2 billion commitment from that western fund to totally modernize western rail transportation. That would create 10,000 new jobs in western Canada based upon that fund.
Members opposite say that fund has disappeared. Of course it has disappeared. It has been put on the table so that farmers, producers, and commodity people in western Canada can put it to work to modernize the railways system in western Canada so that we can move our goods to market, sell and create jobs in Canada. Somehow the hollow head from Churchill (Mr. Murphy) says that that fund has disappeared. The only time we know he is awake is when we hear his head rattle.


An hon. Member:: At least he has something in it.


Lloyd Axworthy: It is very loose. 1 do not think this House deserves that kind of misdirection and misinformation.
We are here today to talk about something which we think is important to Canadians, and that is the creation of jobs and work for Canadians. Every budget that is put together reflects or mirrors the reality of a society. It means that we have to make difficult choices. There are infinite demands.
Any one of us, whether within our personal ambitions or in our communities, province or region, have a shopping basket full of demands that we want answered. Unfortunately, the other side of the ledger is that for those infinite demands there is a limited amount of resources. That is the rough part of having to be in government and having to make these tough choices.
Perhaps the inexperienced members in that corner have never experienced, and those in this corner experienced only briefly, the knack of knowing how to provide leadership in this country and making difficult choices in a difficult period of time. There are hard choices, tough ones. We live in a world where there are no easy chances. There are no quick gimmicks.
We have confidence that Canadians are not going to be inveigled by those false prophets. They understand full well that the time has come in Canada to start making tough choices about where we want to go. It is not because we think there has to be some great depression as has been prophesied by members opposite. We realize that the only way we can restore our economy and rewrite the social fabric is to get busy and make those choices that must be made.
The choices are very clearly enunciated in this budget. We want to create work for Canadians. We realize that as events have unfolded and evolved in this country and around the world, one of the critical needs is to make sure that people have work. We feel for the 1.2 million unemployed in this country. There is not a member on this side of the House who
The Budget-Mr. Axworthy
has not visited the unemployed in his or her area and talked to unemployed lumberjacks, automobile workers or miners. We know the kind of suffering and anguish suffered by those without work. It is for that reason that the budget of this government has put $2.3 billion on the table which will create in immediate, direct terms 200,000 jobs. That is not something to be swept away, ignored and neglected. That $2.3 billion is a major commitment by this government.
We have heard wild cries of condemnation from members on the other side. They say we are changing the tax system, that we are deindexing down to 5 per cent or 6 per cent for certain tax brackets and changing the pensions and some of the allowances. Yes, we are doing that. We are doing it because we believe there are enough Canadians who feel compassion and concern for their fellow Canadians who are out of work. They are prepared to give up a small portion of their benefits and advantages to help 200,000 Canadians return to work.
We have confidence that there are enough Canadians who are prepared to share their benefits and advantages rather than hoard them in a selfish little pool as members opposite advocate. We strongly believe there are millions of Canadians who realize the time has come when we can no longer retreat into the shell of our own selfishness but must be prepared to share. We must be prepared to share the responsibility and share the resources because we realize that we live in a difficult world.
Members opposite say that somehow the problems faced by the lumber industry can be magically whisked away by one stroke of a pen in a budget. They ignore the fact that 80 per cent of lumber products manufactured in Canada are sold in the United States for housing. They do not seem to recognize that the United States housing market is down this year over last year by over 50 per cent. With the size of the market in this country, even if we spent $10 billion, we could not begin to match the demand of that kind of market in the lumber industry.


Mr. Kempling:: They have a million housing starts.


Lloyd Axworthy: Yes, but there were two million last year. If the hon. member would only wake up from his 20 years of sleep, he would realize the realities of the world we live in. The fact is that housing production is down 50 per cent. The hon. member will have the opportunity to refute those statistics.
The same is true in the automobile industry. We have internationalized our economies. We have all said it is to the ultimate benefit of our world that we provide for an economy in which there is free trade and a free flow of capital. However, there is a price to be paid for that. The price is that when interest rates go up in the United States, if we in this country do not have some parity in those interest rates, there will be a massive flow of capital out of our country that will provide an enormous deflation of any kind of investment.
The NDP say they would reduce interest rates. What would they do with the hundreds of billions of dollars flowing out of

June 29, 1982
The Budget-Mr. Axworthy
our country? What is their answer? What is their quick fix for that? There are no quick fixes in today's world. We do not want to listen to them any more. We are trying to convince Canadians that it is time to get away from gimmickry and to come to grips with having to make honest, realistic choices based upon the situation.
Let me talk about the whole question of restraint. The Minister of Finance and this government have repeatedly said that we can provide for stability in this country only if we get inflation under control. It is a corrosive, cancerous, deep-rooted sickness in our society that must be eliminated. It must be eradicated if we are to provide for any certainty in investment, any stability in our markets, any sense that one's income has a continuity to it. It is endemic to all countries in this world. We are simply saying that we have to find the ways to convince Canadians, whether it is business, labour, public servants or politicians, that we cannot always be on a happy joyride and that we have to come to grips with the eradication of our fundamental problems.
The federal government, Mr. Speaker, does not have the total dominance over the economy. We are only one aspect. The kind of impact that we can make has declined over the years. Some 20 years ago, 60 per cent of all public sector spending was at the federal level. That has reversed in that period of time; 60 per cent is now spent by the provinces and the municipalities.
What we notice with a great deal of sorrow and sometimes frustration is that their wage settlements are running at 13 per cent and 14 per cent, that they are not only above the private sector but way above federal sector settlements. Nevertheless, we still believe that we have to set some direction, some standard, some measurement, some purpose in society by giving leadership and showing where we can go.
We are not doing it by taking on public servants as victims or by picking upon them. We are simply saying that these are people in our society who have protection, who have job security, who have an advantage that many other workers do not have. As Minister of Employment and Immigration I go weekly to talk with people who are being laid off and are suffering the miseries of the market because the mining industry cannot sell its product or because the automobile manufacturers cannot sell their cars. They would like the same kind of security and protection that people in other industries have, including those in the public service. We are simply saying to those Canadians who have the advantage, who have the benefit of a degree of permanency, of security of income and of jobs, that surely they can be prepared to share some of their resources with those who do not have that same degree of security.
That is what we are putting on the table and saying that there is a trade-off to be made. We find it surprising, Mr. Speaker, that certain labour leaders-not all but some labour leaders-are saying they will fight this to the death. I find that
they are saying, in effect, that they are going to oppose measures that would give their own brothers and sisters in other unions a chance to go back to work. They are saying: "We are prepared to protect our own turf and territory and sacrifice other workers who cannot get jobs". That is really what they are saying. Mr. Speaker, that is a serious condemnation. That is the kind of attitude we must defeat. The kind of appeal we are making is for members opposite to forget the kind of partisan nit-picking they have been engaged in in this House. We need to recruit their responsibility and their co-operation in trying to change those attitudes.


Mr. Blackburn:: More jobs.


Lloyd Axworthy: We hear from the member from Brant (Mr. Blackburn), who, by the way, is a Member of Parliament who came to my office time and time again, saying: "Please create work in the high unemployment market in my community." This the government did, so that we now have a labour system and investment going in this community. And now he is being opposed to it.


Derek Nigel Ernest Blackburn: On a point of order, I would like to remind the minister that since he came to Brantford the unemployment rate has gone up and not down.


Mr. Deputy Speaker:: The point of order is not well taken. Members can only be recognized in their place.


Lloyd Axworthy: I would be glad to point out to the hon. member, and to his constituents in particular, that if he now wants to withdraw and let them have his resignation, I am sure they would be glad to respond to his request. I am sure that the people in his constituency would have a point of view very different from his.
We are making an appeal to Canadians, Mr. Speaker, to come to grips with the fact that we must deal with the problem of inflation. We must ask them to accept restraints not just on their wages but also on prices and allowances and on pensions. In that way we can provide some basic signposts, some directions for the others to follow. We have invited the premiers to Ottawa to ask them if they are prepared to do the same in their areas of responsibility. We hope that those who come will follow and that the private sector will follow as well.
We also realize, Mr. Speaker, that the turning around of the Canadian economy is like trying to steer a big ship; you can turn the wheel, but it has a long, long turning arc and it will take time. In the meantime, in between periods, there are many Canadians out of work. That is why we felt it was absolutely imperative that we put measures into this budget that provide for immediate job creation across Canada, that give Canadians the opportunity to begin going to work right away.
We have included in this budget, Mr. Speaker, a number of initiatives that can be applied to different regions, to different groups, to help them respond to the problem of unemployment. There is an increase of $450 million for direct job creation; that was put in the budget last night. It raises direct spending on direct job creation to its highest level ever in this country.
June 29, 1982

In this one fiscal year alone we will be spending over $658 million on direct job creation. The $450 million will create some 70,000 additional jobs. If we add that to the 131,000 jobs already being created over the period, we have in direct job creation measures over 200,000 additional jobs being offered to Canadians through the direct employment policies of this government.


Some hon. Members:: Hear, hear!


Lloyd Axworthy: Those 200,000 jobs are not thrown out at random, as advocated by the hon. member for Etobicoke Centre (Mr. Wilson). He asked that we just give tax credits, give tax credits to everyone. We do not believe in that, Mr. Speaker. We believe that at this time we must target our approaches; we must zero in on where the problems are most extreme and where they are most difficult. That is why we use direct job creation to go into the areas of chronic or high unemployment, where the work is seasonal, or where there have been a large number of lay-offs. We have used the Canada development project to go into areas where there have been major lay-offs, whether it is Windsor, Brantford, Newfoundland or Vancouver Island. We have done that in order to help those workers restore their benefit and to have work in between times.
We are using that type of project so that the native people can build housing. We have heard great cries of lament in the past: "What are you doing for the native people?" One of the purposes of the job-creation program is to deal with the labour component of major housing programs across Canada. Those community development projects are often scoffed at by some members, who say that they are only band-aids or make-work projects. What they are really doing, Mr. Speaker, is helping to rebuild our community. We are building shipping units, we are building fishing wharfs, we are putting money into housing, we are putting money into new community facilities. In fact, Mr. Speaker, over 60 per cent of the community development projects goes into construction-related activities.
Furthermore, Mr. Speaker, over 40 per cent of those who become enrolled in those projects are young people. They are perhaps those who need the greatest help at this point in time. These direct employment projects are particularly targeted to the needs of the young. They need that first-time job experience to get a job record in the employment market.
That, Mr. Speaker, is where the community development projects are going. It is our intention again this summer to meet with business and labour to talk about a new development strategy for young people, so that they can begin targeting in on how they can get jobs, new jobs, with the assistance of industry. We can set up new centres across the country, give special attention to that hard core of structurally unemployed young people. These are the people who too often are on the sidelines. We want to begin taking special measures for them and we now have the funds and resources that we can allocate to those kinds of programs.
That is why we ask other Canadians to help in these efforts, to help native people build housing, to help people in the Gaspe
The Budget-Mr. Axworthy
or in Newfoundland or on Vancouver Island to go back to work. That is the kind of measure that we are promoting.
That is not the only housing measure that we have created in this area. We also have within the budget a major stimulus in the housing market. I find it very surprising, Mr. Speaker, having listened carefully to remarks of members opposite, to hear them saying: "Do something for the housing market". Let me just give an example of what the budget will do. Between the rental units applied and cited last March by the Minister of Public Works (Mr. Cosgrove) and those announced today, something like 54,000 new jobs will be created over the next two years.
The Canada home renovation plan, which was mentioned last night, will create something like 20,000 new jobs. We launched last night a $300 million program for first time home buyers of existing homes and new construction that will provide direct assistance to close on 100,000 purchasers in this country and should create and stimulate 50,000 additional jobs. What this in fact totals up to over that period of time in the housing market alone is over 124,000 new jobs created directly by that stimulus in the housing construction market. Right now, the moment the budget was announced, those measures are available to go into place. One hundred twenty-four thousand additional jobs will be created because of those housing measures.
It seems odd that those facts were somehow forgotten by hon. members opposite. Somehow they managed to forget that particular stimulus. In addition to the 200,000 jobs which are being created through our direct employment measures, we are creating 124,000 jobs through the stimulus in this budget provided by its housing measures.
In addition to that a third part of the job creation initiative was an additional $300 million going to economic development programs. The hon. member asks what is going to research, what is going to manufacturing and what there will be by way of aids to industry. Is the hon. member indifferent to an additional $300 million going to various programs, going into productivity increases, going into investment programs and going into research and development programs? How do hon. members opposite think we are able to develop major programs like the Bombardier project which is providing 20,000 jobs? We are able to do that through the expenditures in the economic development envelope. The Minister of Finance has put an additional $300 million forward through the budget. The hon. member raised the question; we have just given him the answer. The money is going to create direct supports and incentives for private industry in those areas, to say nothing of the special grant going to small business. Hon. members somehow have conveniently overlooked and not talked about that; they do not want to talk about the truth or face the reality because that does not fit their own orthodoxes.


Michael Holcombe Wilson: The reality is there.

June 29, 1982
The Budget-Mr. Axworthy


Lloyd Axworthy: The reality is that we are again using resources. Hon. members ask what the money is going for. The $2.3 billion is going to create permanent long-term jobs through economic development programs, going into housing construction to create work in the housing field and the construction field across Canada, going into direct employment programs to help those young people who need first-time jobs and going into new ILAP programs so that we can help additional communities and the hon. member for Brant will not be the only one whose constituency gets those kinds of benefits, ungrateful as the hon. member may be. The fact is that that is the combination of programs we are providing for Canadians.
We are asked whether they are providing hope, direction and purpose. I think we should begin to look at what the figures really add up to. When we talk about jobs created in total by way of direct job creation in housing immediately in terms of this budget, we are talking about an additional
124,000	jobs, by estimate. We must add that to the previous programs announced, the existing job-creation programs already in our portfolios, plus the rental supply program and the renovations program. That is an additional 200,000 jobs. We are talking in terms of direct stimulus through this budget creating well over 300,000 additional employment opportunities to be provided to Canadians within this fiscal year.


Some hon. Members:: Hear, hear!


Lloyd Axworthy: That is by way of combination, but 1 point out that that has not been the only series of measures we have undertaken. We are just now going through the last stages of debate in the Senate of the training bill which was passed in this House last week. That legislation will put $1 billion into community colleges and industry and on-the-job training programs across Canada. It will provide new training opportunities for over 300,000 Canadians. That will provide for additional funds going into those places to provide new equipment and new facilities.
In terms of a larger growth strategy and in terms of the longer-term program of aiming at economic development, we must go back to the last November budget papers in which we put forward a series of measures. Those are also proceeding at the same time. The training bill provides $1 billion. The modernization of the transportation system in western Canada is a $13 billion program with $3.5 billion being contributed by the national government. Major programs are going ahead in the areas of research and the establishment of microelectronic centres across Canada to develop research and development in that critical area of microchip programs. The measures brought in in this budget to provide a special response and direction must be looked at in parallel with the measures introduced last November, which are proceeding and are now being implemented and brought into effect to provide for some direction.
One thing I will say is that this government does not believe it can do all this by itself. We cannot do it alone. We must have the co-operation of the other levels of government, which should also be prepared to provide restraints in their spending, restraints on their incomes and restraints on their prices so
that we do not have extravagant settlements which will price us out of international markets. We need the same kind of discipline, restraint and commitment to be shown by trade union leaders and business executives at bargaining tables and when it comes to decisions on pricing goods. There really must be a coalition to deal with the economic crisis. We must develop a basic sense of unity among Canadians.
I say in closing that the difficulties we have at this point in the history of our country can only be frustrated by the divisiveness and misinformation we hear from certain hon. members opposite who seem to have objectives in mind other than the objective of trying to come to grips with the economic problems faced by Canada. No one will deny them their partisan advantages and their reasons for trying to get a few more points here and there on some pool or other. But surely the time has come for all Canadians to pull together in this effort and not listen to siren calls. We must come to grips with the fact that if we are going to deal with the economic situation in Canada, we must deal with it together, working in a cooperative fashion and putting forward, each of us, our best talents and resources in the most effective way possible.
That is the kind of partnership we need in this country. We need a partnership toward progress and a partnership toward recovery. We must ignore the calls of depression and frustration we hear from hon. members opposite. It is time we heard calls for unity, purpose and progress. That is the one thing this government is prepared to provide to Canadians.


John Carnell Crosbie: Mr. Speaker, I just want to deal for a moment with the last speaker, who illustrates why this country is in the difficulties it is in and why the people of this country no longer have any confidence in this government. The minister who just sat down has told us all the things the government is doing for job creation. Why, then, do we have 1.2 million unemployed, if there is such a wonderful program? Why would the Minister of Finance (Mr. Mac-Eachen) not even put in his budget a forecast for unemployment if the government is so confident that it is going to create as many jobs as it says? For the first time in our history the Minister of Finance does not include in his budget a forecast of unemployment for the rest of this year or for next year, but we have this minion of his getting up in the House and telling us about the great job programs he has.
He has nothing. He tells us he is putting $2.3 billion on the table. Where did he get the $2.3 billion? He got it from the old age pensioners by stopping indexing of pensions for the old age pensioners. He stopped the indexing for those on family allowances. He stopped the indexing for the personal income taxpayers of this country, so that they are only going to be indexed next year to 6 per cent and then 5 per cent. That is where he got the money he says he is laying on the table, and then he juggles words in his budget and reannounces, two or three times, things already announced before.
What summarizes the Minister of Employment and Immigration (Mr. Axworthy) is this: he said in this House when he
June 29, 1982

was housing critic for the Liberal opposition on October 29, 1979:
If there is a requirement to raise interest rates, there is an equal requirement to help those people who are hurt by those interest rate increases.
The mortgage interest rate then was 12 per cent. That hypocrite has been in this House and in the government during times when mortgage interest rates went to 22 per cent, and he did nothing, nor did his government, to help those people interest rates were hurting. "An equal requirement to help those who were hurt by those interest rate increases." He is a mountebank, Mr. Speaker. He is a poseur, Mr. Speaker. He is a cheap bluff, Mr. Speaker. He is a trickster, Mr. Speaker. He is a man who does not practise what he preaches, and therefore his words in this House are utterly unconvincing to anyone who listens to him and knows what his shameful record is. It is shameful.


Mr. Fisher:: What about giving us a few ideas?


John Carnell Crosbie: Just wait. There is a great wind rushing around in the head of the hon. member and coming out of his two ears because there is nothing in there to fill the gap, Mr. Speaker. If he will listen he will hear a few things.
In the Ottawa Citizen today there is a report of a housewife, I believe, called Kathy Lafrange who summed up the situation perfectly. She says, "It's the poor buggers like us, and all the others, who feel it when they have to renew mortgages." She says that the Minister of Finance has not really changed a thing but has just shuffled some things around and now has a deficit of nearly $20 billion. That sums it up. The public knows what this budget is. It has not changed a thing. Poor Mac-Eachen has just shuffled some things around and now he has a deficit of $20 billion. The public knows what is being attempted.
I was minister of finance briefly and I brought a budget into this House on December 11, 1979. I have nothing to be ashamed of, thank God. It was fair, it was square shooting and when you heard it you understood it. There was no peculiar language in it. There was nothing tricky. You did not have to comb through every word to see what was there. You knew there was a tax increase if there was a tax increase and you knew there was not if there was not. You knew there was a new program if there was a new program. Had that budget been implemented and not stopped by the Liberal-NDP coalition who were together then and are together now, although the NDP want to absolve themselves from responsibility, we would not be in the economic situation we are in today. We would be in far better economic shape. We would not have 1.2 million unemployed, a cost of living increase of 11.8 per cent and interest rates of 18 and 20 per cent.
The minister did not wear new shoes last night, Mr. Speaker, he wore sneakers. That is his technique-the sneaking technique, the tricky technique. That is the hallmark of this budget: it is tricky, it is complicated, it is devious, it decreases understanding, it is the old shell game so that you do not know
The Budget-Mr. Crosbie
which shell the pea is under. Every word has to be watched and in order to get the real meaning you have to leave the budget speech and go to the details of the budget. It is just like his last two budgets.
The tragedy is that there is no longer any thrust or any pretence of a thrust or strategy to get us out of this economic chaos. There is no longer a pretence that the government has a plan, no longer a pretence that it has a hope. All it has done is devise two or three little programs so that its members can go back and pretend to the farmers, the small-business men and the unemployed that it is doing something for them when it is doing nothing.
Just seven and a half months ago it told us what its philosophy was. It told us it had the answer. I refer to page 11 of the budget of November 12, 1981, where the following passage occurs:
The fundamental response of the government to the interest rate problem has been the basic deficit-reduction strategy of this budget. By tightening fiscal policy and reducing the deficit even more than had been planned a year ago, the government is strengthening the over-all thrust of its anti-inflation strategy and relieving the burden which would otherwise fall upon the Bank of Canada. In recent weeks there has been some decline in interest rates, amounting to about 4 percentage points for short-term rates. The mortgage rate has fallen below 20 per cent. The government is confident that its policy will gradually bring down the rate of inflation and that this will be reflected in further declines of interest rates.
Seven and a half months ago the government's fundamental strategy was said to be a deficit reduction strategy and everything else hinged on that. What has happened since? In that budget the minister said we would have a deficit of $10.5 billion, but now, seven and a half months later, the deficit has increased by $9.1 billion to about $20 billion. Everybody in his department should be fired for making an estimate seven and a half months ago that the deficit would be $10.5 billion when it is now almost double that. Can such incompetence or such deliberate deceit be tolerated? It is either monumental incompetence or deliberate fraud and deceit that has been practised upon the Canadian people.
What has happened to the deficit reduction strategy? In the last budget the deficit was $10.5 billion and now it is $20 billion. According to the budget of seven and a half months ago, the government was going to borrow $6.6 billion in the public debt market for financial requirements. Now it is going to borrow $17.1 billion, an increase of $10.5 billion or 2.5 times more than it was. In just seven and a half months the government's borrowing requirements have increased 2.5 times to $17 billion. It will compete with the provinces and the private sector and the person who wants a mortgage to borrow that money and will force interest rates up.
The Prime Minister (Mr. Trudeau), the Minister of Finance and the Secretary of State for External Affairs (Mr. Mac-Guigan) went to Versailles where they told President Reagan that he would have to reduce his deficit because that was the only way the world could be saved economically. They told him that he could not bring interest rates down unless he brough his deficit down. Mr. Speaker, the deficit in the United States is $103 billion and its economy is ten times the size of
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June 29, 1982
The Budget-Mr. Crosbie
ours! In U.S. terms, our deficit would be $200 billion. Yet our representatives told the President of the United States what he had to do. Now we see what they have done. They have a deficit twice that of the United States. So much for their strategy of seven and a half months ago.
In the lockup we asked about the government's strategy to overcome inflation and bring down interest rates, but no one could tell us what it was. There is no strategy. The government is in a whirlpool. It has Canada in the centre of the pool. We are becalmed and the government does not know what to do. All it can offer is a few little political palliatives in an effort to satisfy its sheeplike backbenchers and get them through the summer so that they will continue to vote with the government and keep it in power. All it wants is to be in power, event though it is bankrupt of ideas, bankrupt of action and is bankrupting this country.
Never has a minister of finance of this country so demeaned himself as has this minister from Cape Breton. On page 2 of his budget speech he referred to the United States and all the industrialized countries of Europe, saying that they created additional hardship for Canadians. He said: "Their governments are unable or have not chosen to design their economic policies to help us get out of the recession." Imagine, Mr. Speaker; the Minister of Finance says that the governments of the United States, Germany, Belgium and Luxembourg have not designed their economic policies to help us out of the recession! Of course not. They devise their economic policies to get themselves out of recession and it is up to the Government of Canada to devise policies to get us out of the recession. But the Minister of Finance complains that the other countries have not devised policies to get us out of the recession. This is how we are led, Mr. Speaker. This group is leading us blindly to disaster and does not even have the good grace to take the blame and responsibility but wants to blame everything on the United States and the western European countries. The Parliamentary Secretary to the Minister of Finance (Mr. Fisher) is looking bedazzled. He does not know what it is all about but he will when the next election comes around.
You will notice, Mr. Speaker, that there is not a word in the budget about monetary policy. I think it is peculiar that the government should bring in a document which deals with our financial and economic position, in which high interest rates form the cross upon which Canada is being crucified, but the budget does not once discuss monetary policy or say whether the government will continue to support the Bank of Canada or direct it to reduce interest rates or even print more money to meet this gigantic deficit. Monetary policy is not discussed in this document. It is a complete admission that the government is bankrupt of ideas.
Today the markets are shaky, the dollar is down and all our other problems continue. The government has admitted that the gross national product will decrease by 2 per cent this year. The Parliamentary Secretary to the Minister of Finance yawns. He does not care if the gross national product declines by 2 per cent. That means that the goods and services manufactured in Canada this year will decrease. There will be less
for all at the end of 1982 under the stewardship of the government, but it does not care. As long as it can remain in power and have the perks and the executive jet aircraft-and two new ones have been ordered at a cost of $27 million to fly members opposite around Canada so that they can look down and see the carnage below-it does not care.
There is no forecast of unemployment in the budget. That is the devious Minister of Finance; if you do not like the forecast your people give you, you do not include a forecast in your budget. There is no forecast for inflation or just about anything else.
The interest on the public debt, Mr. Speaker, has gone up 21.1 per cent this year. Just seven months ago the minister forecast interest costs of $16.5 billion; it has now gone up by $1.1 billion. Just about one out of every five dollars that the government spends will be spent on interest. That is where we are headed. We look at the paper today and see the latest figures on what Canada owes the rest of the world. Canada was $90 billion in the red on its balance of payments in 1981, up from an estimated $78 billion one year earlier. The $90 billion is the net balance that we owe the rest of the world, which is a record. We are sliding further and further into debt to the rest of the world.
Is there any plan to deal with that in the budget? Not at all. Is there any concern? Not at all. This budget does not even revoke last November's budget; it is still there. That budget, the most hated document ever delivered in this House in our history, still lives. Departmental officials have told us that there were 25 changes up until yesterday, and eight more in last night's budget. There have been 33 backward steps taken by this minister but he has still left intact many damaging items from the last budget which increases the uncertainty.
For example, Mr. Speaker, there is not a word said about northern allowances. The minister is still determined to tax northern allowances, as he promised to do in his budget of seven months ago. Just look at how uncertain he remains. Instead of trying to make everything clear and certain so that the public and the investor can understand, if we look at page 6 of the budget we see the minister saying first that he has proposals to reduce the taxation of investment income and interest rates to borrowers. There is a new form of term deposit and a new scheme which applies to common shares of Canadian corporations so you will not be taxed on your inflationary gains. But then he says these measures are not going to be implemented now; there is going to be a committee which will look at them. That, of course, creates tremendous uncertainty from now until the end of September when that committee is supposed to report and the government is supposed to make a decision. So there is no certainty for the investor here. They are going to hold their money, not knowing whether these devices will come into effect.
Then at the top of page 7 we see he is only going to postpone for one year the 12.5 per cent corporate distributions tax. Then we see that the proposals related to the deduction of interest expense will be reviewed. Just reviewed. A little further down
June 29, 1982

we see that the precise drafting of these income tax amendments affecting life insurance and charitable foundations are delayed. On and on it goes, Mr. Speaker-uncertainty. The people who have money to invest, foreign and domestic, will not invest it while all this uncertainty remains. No one can estimate the damage that this uncertainty is doing to Canada.
I tell you, Mr. Speaker, that this country is in the middle of a full-blown financial crisis. Long-term debt markets are all gone, no one will lend money long term. There is a crisis of confidence. Both the stock market and the bond market are in great trouble. Yet instead of encouraging a new high level of savings by encouraging, for example, the RRSPs, the government has done the opposite and is going to borrow two and a half times what it said it was going to borrow. At the same time it is doing nothing to encourage savings.
The financial requirements of the government as a percentage of our GNP have reached the highest in our history. With this uncertainty and with the condition of some of our major companies such as Dome Petroleum, to which the government had to give a $100 million guarantee several days ago because it is on the verge of going under as a result of this government's energy policy and its own impetuosity urged on by the government, anything can happen in the markets. If there is an emergency, a fire, you do not discuss it for three or four months, you do not consult with the person whose home is burning down; you hand them a bucket of water immediately. Our financial markets are burning down and the government wants to spend from now until the end of September discussing what is to be done during the emergency. It is just the opposite of what is needed.
This whole budget document is riddled with deception. But one of the worst pieces of deception is the deindexing of income tax which the government has now engaged in. That was instituted by Mr. John Turner in his budget of February, 1973 and he adopted the principle which was suggested by Mr. Bob Stanfield. At the time Mr. Turner brought in indexation the inflation rate was 7.5 per cent. Today it is 11.8 per cent, more than 4 per cent higher, so people are suffering far more from inflation today than they were in the days that John Turner brought in this reform which was suggested and urged on him by Mr. Stanfield. He said in his speech:
1 am deeply concerned about inflation and the effect that inflation has on a tax system which is based on a progressive rate schedule. I therefore propose to take steps now to provide a lasting solution to this problem should inflation continue.
Well, it certainly has continued under this government. He then went on to say:
-an increase in a person's income may be real or simply the result of inflation. Put another way, if a man gets a five per cent raise in salary, but the cost of living has also increased 5 per cent, he has the same real purchasing power he had before, and nothing more. Yet, the progressive tax system can leave him worse off than he was before because he has entered a higher tax bracket. What I want to do is eliminate that unfair and unintended result from our tax system.
If it was unfair in 1973, it is even more unfair now in 1982 with inflation far worse than it was then. But this Minister of Finance is now going to go back to unfairness; he is going to cap the indexing of income tax to 6 per cent this year and 5 per cent the year after. Mr. Turner went on to say:
The Budget-Mr. Crosbie
The indexing of rates and exemptions will produce a tax liability which will no longer erode a person's purchasing power as a result of inflation interacting with the progressive tax system. A person will no longer pay tax at a higher marginal rate simply because inflation swept him up into a higher tax bracket. For a person on a fixed income the result of indexing would be to reduce his taxes each year if prices rise.
That is all now going to be reversed. He went on to say:
-this new system will be recognized everywhere as a bold and sensitive response to a rather fundamental tax problem.
Well, the boldness and insensitivity are not recognized by the present Minister of Finance and the government of which he is part. Here is this very bold and sensitive reform which the government is now reversing just at a time, Mr. Speaker, when President Reagan and the United States of America are adopting the indexing of the income tax system. It is also a fact that the effect of this move is going to be felt most by those on lower incomes. They will suffer the largest percentage increase in tax. Next year the government is going to take $1,300,000,000 more from Canadians in income tax than this year because of deindexation. Of course, it is also going to make those who receive family allowances and old age pensions suffer.
This is the start of the doing away with deindexing. Why is this so? Because the government is unable to control its spending. The government is forced to deindex because it is unable to control its spending. In the year the Prime Minister came to power, the total spending of the Canadian government was less than the budget deficit this year of $20 billion. Canada's total spending in 1968-69 when this profligate wastrel Prime Minister took over was less than the deficit this year because of the government's inability or unwillingness to control its spending. Now the government is going to take it out on the ordinary person.
Has the government indexed energy prices? My friends to the left have mentioned that the government has not done that. Energy prices will rise far beyond 6 per cent this year and 5 per cent next year. Has the government deindexed energy taxes-the petroleum compensation charge, the Canadian ownership charge and all of the other indirect taxes? The government is collecting $8 billion more in indirect taxes from the Canadian people this year than it did last year. Has the government reduced those taxes? No, the government has not. The government has not reduced anything. It has not deindexed anything. The government has deindexed the only benefits people receive.
Now let me talk about unemployment insurance. The minister in his usual devious way does not tell us that by the beginning of the next calendar year he will have a huge deficit increase in the UIC fund. This year it is $5.6 billion. There will be a projected deficit of something like $2.2 billion according to the minister's documents. When the government sets the rates at the end of this year for 1983, there will be a huge increase in the rates to be paid by the employer and by

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The Budget-Mr. Crosbie
all the millions of people employed in Canada. That is a tax increase about which the government has not told the Canadian public. This will add about $2,600,000,000 to the tax increases which the people who face deindexation will have to stand and bear next year. There is not a word about that in the budget. There is no frankness, there is no honesty, and there is no willingness to tell the public what it faces. There is a pretence that the minister is being bold and that he is asking us all to share equally in the sacrifices. But he does not tell us what the sacrifices really are.


Mr. Taylor:: Heaven help Canada.


John Carnell Crosbie: I am looking at page 12 of the Budget Papers. It is shocking what the English language has come to. By the way, the government's new expenditures this year add up to $700 million, not $2.3 billion. The government is just jiggling its numbers to get to $2.3 billion. But do you know what one of the savings is that this government has, Mr. Speaker? One of the areas of saving, we are told, is in military pay savings and defence spending; reprofiling. What the hell is defence reprofiling? How do you achieve a saving by reprofiling? Who are we supposed to be? How innocent and stupid are we supposed to be to believe that there is some great saving to come from defence spending reprofiling?
1 referred earlier to other examples where deception is practised on the people of Canada. For instance, the $3,000 grant for housing aid. The government does not say that in order to qualify for this grant of $3,000 you have to have a 10 per cent downpayment. That is not mentioned in the budget speech given here last night to which the people of Canada were listening. That item is in the Budget Papers where some of the conditions are itemized. Do not look for a $3,000 grant to buy a new house this year unless you have a 10 per cent downpayment. This is the kind of thing practised throughout that document.
Then we are told there will be great benefits for small business and farmers, and fishermen. The same thing happens with the section on small business. Small business is led to believe that great things will happen. But when you look at the Budget Papers, particularly page 23, and you get down to brass tacks, you will see that the loans and grants promised will only be available if you buy new depreciable property to be used in an active business in Canada. If you are in financial difficulty, you are not in any position to buy new depreciable property or to finance expenditures on scientific research. How many small businesses in this country will rush out to finance expenditures on scentific research in order to get the 4 per cent interest rate reduction which this government promises? When you look at the small print, it is not at all what it seems.
Fishermen were told by the Minister of Finance last night that they were included in all of these wonderful things. They are not. The fishermen are only included, in so far as they are small-business men, if they want to buy depreciable property. How many fishermen in Newfoundland this year can afford to buy depreciable property for which they will get a grant equal
to 4 per cent of the 18 per cent, 20 per cent or 22 per cent interest rate? There is no help for fishermen.
There is a special section for farm financial assistance which gives a little bit to the farmer. Out of $200 million, the government is allocating $100 million to the program. But even there it is not what the minister pretends it to be in the budget speech-that tricky and deceiving budget speech in which he specializes. You will see all through this document the practice of deceit and deception by the minister. He cannot give an honest report to the people of Canada. He cannot bare his chest and really share with us. He has no program of recovery. All he can depend upon now is this little pea under the shell game that promises hope for farmers, fishermen, small-business men and people who need housing, but they will be sadly disappointed. Where is the help for the person who has already lost his or her home? Is that $3,000 grant for a new house going to help the person who has lost his home? Where is the help for the small-business man who is already bankrupt or the small-business man now going bankrupt? What about the farmers who have gone out of business? It is all a charade. There is no hope for recovery.
Then we hear the so-called Minister of Employment and Immigration speak. He is the minister of unemployment. He announces all his job-creation programs. These programs were already announced in Newfoundland. One Member of Parliament put out a household bulletin listing some of the projects before the budget even came down. That is how honest that announcement is. Government members announce things five or six times. They let a few days pass by and they announce programs again. People are supposed to believe that this is a great new burst of funds for job-creation programs.
There is no hope for recovery. This country has no hope for recovery whatsoever with the persons who are now in power- the Prime Minister, the Minister of Energy, Mines and Resources (Mr. Lalonde) and the Minister of Finance. I call them the economic horsemen of the apocalypse. Never has a Minister of Finance so abused his trust. He reminds me of the ancient mariner. I want to conclude my speech by quoting from the great poem "The Rime of the Ancient Mariner" as follows:
Alone, alone, all, all alone,
Alone on a wide wide sea!
And never a saint took pity on
My soul in agony.
That will be the hallmark of this Minister of Finance. This Minister of Finance, like the ancient mariner, has an albatross around his neck. That albatross is the economic corpse that he has left in this country. It is the economic condition of this country that is around the minister's neck as he goes through the rest of his life "alone, alone on a wide wide sea" with the economic albatrosses that are found in every part of Canada from Newfoundland to British Columbia, to the Yukon to the Northwest Territories. This is a country full of economic damage which the government could have prevented. Even now it will not reverse its course or admit that it is wrong. The only thing it can do is to get out and let the Canadian people put someone in who can do the job, and honest job for them.
June 29, 1982


Hon. Bryce Mackasey (Lincoln):: Mr. Speaker, 1 will not, of course, attempt to answer the observations of the hon. member from Newfoundland for whom I have a great admiration and a certain envy, I suppose, for his facility with words and his colourful expressions. I am sure when he spoke about deception that he was not referring to his definition of deficit in comparing it to per capita rather than to the GNP. 1 am sure the hon. member will not mind if I put some facts in Hansard dealing with the deficit, although that will not be my main thrust today.
However, it might be of interest to members here to know that in 1942 and 1943 the deficit in this country represented over 20 per cent of the GNP. The only meaningful ratio when defining or discussing a deficit is in its relation to the GNP, which is the ability to repay that deficit sooner or later.
It might surprise some hon. members to know that after the budget last night the OECD papers indicate that that ratio in Canada will be 5.2 per cent next year and that in the United States the ratio will be 5.4 per cent. Our ratio compares favourably with that of most trading partners. As I have already mentioned, it is but a fraction of a ratio in relation to the GNP which prevailed during the war years of 1942 and 1943. I do not become overly concerned about a deficit, an attitude which, I admit, may be unorthodox. I would only worry about the deficit if we printed money to offset it, because this would be inflationary.
In what little research I have conducted I have failed to come across any concrete examples in North America, Canada or the United States, where the government and private enterprise have had to fight for the same pool of capital. I want to talk in a serious vein because as the former minister of labour and manpower, one who really cares for this country, I have always had a concern for the unemployed. I am old enough to remember the hungry thirties. When I tend to get callous around this place, I reread the book entitled "The Ten Lost Years" to remind me of the impact of the recession or depression in the west. I want to say to those people who are listening that the first thing that we must do to move toward recovery is to appraise realistically what we can do as a nation and a government. For instance, there is nothing the government can do about the price of commodities. There is nothing the government can do about the fact that copper is selling at 58 cents a pound, which is a historic low that has been unmatched since the 1930s. This situation exists as well for resources such as zinc, lead, and lumber. While this is of very little consolation to our hard-pressed mining industry and to those who live on the production of natural resources, I do not believe that even our greatest critics would presume for a moment that there is anything we can do as a country to increase the cost of these commodities. Sooner or later the economic fortunes of our trading partners will improve. Copper, silver, gold, zinc and lumber will increase in price. Therefore, the very important question for the country to ask is: will we be in a position to take advantage of the economic resurgence of our trading partners? Will we be competitive in six months, nine months or one year from now, or even sooner,
The Budget-Mr. Mackasey
when our traditional trading partners turn to Canada to see what the cost of our raw materials will and should be?
We will not be competitive with a 12 per cent inflationary rate, and this is the message which I think must be echoed again and again in Canada. With a 12 per cent inflation rate we are running the risk of pricing ourselves out of the competitive market. I believe that most Canadians appreciate and understand that fact.
Inflation is something that we cannot ignore, although most of us do. Ironically, unlike unemployment where everyone is a loser, there are winners and losers in the fight against inflation. My favourite economist, Lester Thurow, wrote a book just two years ago. I know that the hon. member who just sat down read that book. Thurow talks about a zero-sum society. He lists the winners and the losers in the fight against inflation. It is very easy to discern who the winners are at the present time. They are very decent Canadians who are listening to this debate. They are those people with money in the bank; senior citizens, young people, people who have saved money which they have earned or have invested. Their money is in the bank earning 16 per cent, 17 per cent or 18 per cent interest rates. They are the winners right now. Ironically, inflation works to their benefit.
Other winners are those who have their wages or income totally insulated from the negative impact of inflation through COLA clauses. Other winners are those with job security who are hardly affected by inflation. I do not begrudge them their insulation. I derive no pleasure from categorizing them as winners, and I do not use it as a derogatory term. Perhaps it is just my way of stating the facts.
The losers in the fight against inflation are the ones who concern me. They are obvious to all of us who care. They are the 1.2 million Canadians who are unemployed through no fault of their own. They are the ones whom Thurow described as the inflation fighters. They are the 1.2 million Canadians out of work because of the tight monetary policy of this government-a legitimate tight monetary policy which exists in virtually every industrialized country of the world.
It is not hard to tell who the losers are. Other losers are the small-business men who, because of the American interest rate policy and our inability to ignore that policy, must borrow to survive, to meet their payroll and cash flow, let alone just expand their businesses. Unless things improve small-business men are destined eventually to go bankrupt in large numbers, if it has not already happened. As well, larger business concerns-some of them household names-have cash flow problems. I could go on and on listing the losers, according to Thurow.
The point I am making is that the Liberal government made it very clear last night in the budget that we feel it is time to share the burden in the fight against inflation. It is time for those of us who are fortunate enough to be categorized winners to assume our moral and legal obligation to spread the impact of inflation in Canada. I do not regret for one minute the increase in my taxes or the deindexation if that money, when

June 29, 1982
The Budget-Mr. Mackasey
pooled with that of all other members of the House and other Canadians who may not have to be concerned about inflation or unemployment, can assist in providing funds at least to soften the negative impact of inflation on less fortunate Canadians.


Nelson Andrew Riis: What about people making $12,000?


Bryce Stuart Mackasey: The hon. member, one of my favourites, should not interrupt, because when we subsidized interest rates last night for the small-business man, the farmer and the fisherman, we subsidized those people who until last night had to fight against inflation in Canada by themselves.
What we did last night is in good Liberal tradition and overdue by my standards, if I may say so. Some of the real losers in the fight against inflation were those young Canadians who purchased a home. I have bought homes in my day when it was necessary to pool our money, when two spouses who went out to work had to cut expenses in order to put down a downpayment on a home. We knew we could meet those downpayments as long as no unforeseen circumstances arose. In the old days it was sickness that you did not want to happen. Today, you are suddenly faced with renewed mortgage rates which five years ago would have been considered usurious. Those people are the real victims of inflation.
What did the Minister of Finance (Mr. MacEachen) do? How did he tackle inflation? Once again I depend on the people who know, and I return to Thurow's very excellent book, "Five Economic Challenges" in which this leading economist reminds us that inflation has been around since before Christ, that there is no great magic to fighting inflation, and that if you want to create a major recession, you can reduce inflation to zero. In fact, West Germany and Switzerland did it a few years ago when they dramatically cut down the money supply. This drove its unemployment rate sky high, so then sent the unemployed back to Portugal, back to Greece, back to Italy. We do not have that luxury. That is out.
Thurow said that mandatory controls could be imposed. In a federal system, we all know of the undesirability of wage and price controls, although they will work in time. However, there could be voluntary control. If every single Canadian listening were to reduce his or her expectations voluntarily, and voluntarily limit his or her income to 6 per cent, inflation would drop dramatically. But this is utopian. We do not live in a perfect society. No one has ever been able to create that kind of atmosphere.
"We can balance the budget" is one of the favourite cliches of the business community. For 20 or 30 years, Portugal has balanced its budget. It also had the lowest standard of living in Europe, no roads, no schools, no hospitals, no quality of life. It was never quite able to find the money to finance these necessities in the same year that it wanted to balance the budget. What is left? Obviously, and I think properly, the minister has tried to combine voluntary restraint, which we exercised to some degree last night, mandatory control, while we have some
control, some influence, some public service, and a continuation of a reasonably tight money policy in the hope that the mixture will have the desired results. It will, because as Thurow reminded us, even an abnormally absurd tight money policy such as that in Great Britain will work in time. Mind you, it will create social unrest, destroy the economy, reduce capacity to about 30 per cent and eliminate productivity, but it will certainly cure inflation. I do not think that we want to go that way in this country, particularly when it is within the capacity of Canadians, by practising a little self-restraint, to make such an undesirable option unnecessary.
Thurow identified inflation fighters, and I enumerated some of them. Many people are affected by abnormally high, usurious interest rates, such as the couple, one of whom is suddenly out of work, the farmer who is going bankrupt because he cannot find money for seed, the fisherman who cannot finance new nets, or the businessman who cannot meet payrolls. We cannot go on in this way. We must share the burden. What we did last night was legitimate and overdue. It was liberal policy, and I mean small "1" liberal. It was something which should appeal to anyone out there who has any concern for his fellow man. The government, through the minister, by imposing some extra income tax on those of us whom Thurow classifies as the victims or the winners of inflation, by asking us to share $800, $1,000, $200, or whatever the amount is per year, depending on one's tax bracket, has provided a billion or so dollars which can be used, at least to relieve the agony and suffering of those who have willingly or unwillingly been the legitimate fighters against inflation. When we subsidized the interest rates of the farmer, the fisherman or the small-business man through the budget last night, we gave him hope. We provided him with some direction and leadership. We said, "We care. Although we cannot bring your interest rate down to zero, because of the selfishness of the Americans, we can at least subsidize you and share your burden through our taxes." It is common sense. We find it in the Bible, in either Testament. It is logical, from a selfish point of view, and in everyone's interest, including that of the business community. When we said we would provide some seed money, if you like, we would help provide the down payment for people who want to buy a home, we were taking the first legitimate step toward restimulating the economy and reducing the level of unemployment in this country.
I am proud that the minister did not bow to the temptation of increasing the deficit, not because I think it is bad but, rather, because I can hear the whole reactionary group out there condemning the minister if he were to increase the deficit. That would be a tragedy. He did not bow to the temptation of interfering with automatic regulators, reducing the unemployment insurance benefits, or any of those alternatives. He stuck to Liberal philosophy. He stuck to his care and concern, for which he has been well known in his 20 years of public record in this House.


Nelson Andrew Riis: What will happen now?
June 29, 1982


Bryce Stuart Mackasey: What will happen? We will come out of this recession the moment we get rid of the gloom and doom which prevails in the opposition.


Some hon. Members:: Hear, hear!


Bryce Stuart Mackasey: The hon. member is one of my close friends for whom I have great admiration. I think he does care. This country cannot forget the fact that we are one of the greatest, wealthiest countries in the world today, despite the fact that we have a 10 per cent unemployment rate. Let us look at it in another way. Nine people out of ten in the work force are working. Our unemployment insurance is supplying an income for healthy, well-educated, articulate workers who are out of work through no fault of their own. I laugh when I hear people speaking like the hon. member who just left, about the huge deficit in the unemployment insurance fund. That fund belongs to the workers of this country and their employers, and to no one else. No matter how many times the federal government has reached in to steal a little more, it is still viable, desirable, and progressive legislation. The Liberal Party did nothing in last night's budget to minimize, destroy or curtail any of the basic social policies with which this government is proud to be associated. That is significant, because the temptations are there.
I am neither pleased nor happy that we have had to deindex the tax brackets to protect incomes. One of the problems in fighting inflation today, as opposed to 20 years ago, is that we have built so many regulators into the economy that they do not react quite as swifty to supply and demand as they once did. I am not suggesting that we should destroy those regulators. Those of us who have studied the hungry thirties know that textile workers would work for 90 cents a day in Montreal, but people would come along and offer to work for 85 cents a day if they could have the job. People remember that in the west one could not receive welfare if one had a radio in one's house. One certainly could not get help in Manitoba if one had a driver's licence, and God help the unemployed on welfare who was not a worker. The whole puritan ethic was that a man must work by the sweat of his brow. One could not get any kind of relief without putting in any kind of backbreaking work, such as digging ditches, so that someone else could fill them. We do not want to go back to those days, nor do we as a government want to put our head in the sand and turn our backs on those people out there for whom we should show the greatest sympathy, those who have been the victims of the war against inflation.
I listened to the critic for external affairs and I suspect he does better in that field than in the field of finance. When he spoke, he did not suggest one positive step. His whole speech was meant to attack the personality of the minister, who has done more for the poor of Cape Breton than the hon. gentleman will ever do or ever did when he was minister of finance in Newfoundland.


Some hon. Members:: Hear, hear!


Bryce Stuart Mackasey: People who protest too much have guilty consciences at times, and perhaps the hon. gentleman is
The Budget-Mr. Mackasey
concerned that he left nothing of distinction when he served in the House. This minister has. Nobody can erase the history books.
Last night the minister asked for the co-operation not just of those in the House, but of Canadians from coast to coast, those who by good fortune, accident or design have not so far had to share any of the burden in our determined effort to bring inflation down to 6 or 7 per cent. That is not new. That has been the history of the fight against inflation for decades. That is why economists like Thurow who study history remind us that there are winners and there are losers. If we do not get inflation down from double-digit figures, at the time when the world recovery commences and our partners start nibbling for our copper, zinc, lead and lumber in competition with the Americans, the Australians and many others, if we have to build into our price the 12 per cent inflation, we are not going to recover. We will not recover nearly as fast as we would if we got inflation down to a reasonable level.
If you did not care for the less fortunate and were not prepared to share the burden with the unemployed, those on fixed income and those who traditionally suffer from inflation, such as the businessman, the farmer and the fishermen, it would make only common sense to care, if we are to maintain the standard of excellence and standard of living for which this country is famous.
I do not intend to run over my time. I believe that Canadians, to a much greater degree than members of the opposition and some members of the press think, understand what we are trying to say. They understand what the minister and the Prime Minister (Mr. Trudeau) are saying.
This country was built on sharing. There is nothing new or novel about asking Canadians to share the risk and pool their resources. This is why Canada is the greatest country in the world. This is why we have been able to develop our own language policy, culture, traditions and distinct way of life side by side with the United States. This is why we are distinct in every way, shape and form from our best friends. Somehow Canadians have always met the challenge.
One of our problems is that there has been no national dream, no building of our railroads, no building of our seaway, nothing to unite us. There has been nothing to make us forget those things that normally disturb people in a country so vast and with such regional differences.
Perhaps it is a bit simplistic on my part, naive I suppose, to think that Canadians may be prepared to get together this time and over the next six months or year to unite in the fight against inflation. When we look at it this time, let us have the courage to do those things we need to do to insulate us from the influences of other countries in the future.
Young Canadians understand that, those who will be pouring out this month from our universities, CEGEPs and high schools. New Canadians, perhaps first generation Canadians in many ways, want to roll up their sleeves and do things.

June 29, 1982
Royal Assent
There is a tremendous pool of goodwill and positive nationalism out there that needs to be tapped and used. I cannot think of a better cause than a united effort on the part of all of us to lick inflation, and we can. If each and every one of us today has to share a burden that we did not have this time yesterday, so be it. It is in the Canadian tradition, the best tradition. May I call it six o'clock?


The Acting Speaker (Mr. Ethier):: Is it agreed we call it six o'clock?


Some hon. Members:: Agreed.


MESSAGE FROM THE SENATE
The Acting Speaker (Mr. Ethier):: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following bills without amendment: Bill C-112, an act to amend the statute law relating to certain taxes; Bill C-101, an act to amend the Petro-Canada Act; Bill C-102, an act to amend the Department of Energy, Mines and Resources Act; and Bill C-104, an act respecting petroleum incentives and Canadian ownership and control determination and to amend the Foreign Investment Review Act.
It being six o'clock, I do now leave the chair until eight o'clock this evening.
At 6 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

Mr. Deputy Speaker:: I have the honour to inform the House that a communication has been received as follows:
Government House Ottawa
Madam,
I have the honour to inform you that the Hon. W. R. McIntyre, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today the 29th day of June, 1982, at 8.00 p.m., for the purpose of giving Royal Assent to certain bills.
1 have the honour to be.
Madam,
Your obedient servant,
Edmond Joly de Lotbiniere Administrative Secretary to the Governor General



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion (Mr. MacEachen) that this House approves in general the budgetary policy of the government, and the amendment of Mr. Wilson (p. 18905) and the amendment to the amendment of Mr. Riis (p. 18908).
Hon. Sinclair Stevens (York-Peel):: Mr. Speaker, in joining in our budgetary debate, I felt I would like to make a few comments that i hope the members will find relevant. I say that Mr. Speaker, because I think we have reached the juncture in Canada's economic history when this House must stop playing political games. It must, Mr. Speaker, accept the reality for the state of our economy at the present time. The truth is that Canada economically needs major surgery, it needs major treatment.
I believe that the budget that we were introduced to last night is not going to help in the operation that I see must be done with respect to the Canadian economy. In fact, Mr. Speaker, it is going to hinder, it is going to hurt the economic revival of this country still further. I say that and, I suppose, as my evidence I could offer the fact that the marketplace- which is the best judge of whether the public is responding with confidence, whether the public is saying "Yes, Mr. Trudeau", "Yes, Mr. MacEachen", "Yes, the government of the day has some answers and our confidence is renewed"-is, I would suggest, the best barometer. The fact is, as we know in today's trading on the Toronto stock exchange, the composite index fell 50 points by the time it closed. That is a day when our index falling 50 points is in sharp contrast to the Dow Jones that actually went up today in New York.
The apologists for the Trudeau government to my left, the socialists to my left, say that happens often.


Ian Deans: It does.


Sinclair McKnight Stevens: You see, Mr. Speaker, how eager they are to rush in and defend this government that they have propped up for so many years. I think it is absolutely incredible that the socialistic rump to my left, having led, if you like, this government into the whorehouse that they now find themselves in, are rushing out, looking back into the House and saying: "What on earth are you fellows in the government doing in that house of ill-repute?" The fact is that they have egged on the members of this government to their present economic plight. They have told them, when they have already been spending too much money, to spend still more.
In short, Mr. Speaker, I suggest that it is a joint responsibility that we must deal with in this House when we are considering the economic malaise we have fallen into. That joint responsibility is between the Trudeau Liberal government and the NDP rump group to our left. Mr. Speaker, I say that
June 29, 1982

because many of us can remember sitting through that minority Parliament of 1972 to 1974 when the Prime Minister of the day, eager to be propped up, eager to stay in power, responded to every whim and every demand of the socialists to our left. That was their price for giving the Prime Minister at that time the support that he received.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: In short, Mr. Speaker, what happened during that period was that programs were put in place, ongoing expenditures were somehow put into statutory form, and there was no realization as to what the ultimate cost to the Canadian public was going to be with respect to those expenditures.


Some hon. Members:: Oh, oh!


An hon. Member:: Tell the truth for a change.


Sinclair McKnight Stevens: We are living with the repercussions of that honeymoon.


Some hon. Members:: Oh, oh!


William James Kempling: Who has the floor?


Mr. Deputy Speaker:: Order, order.


Sinclair McKnight Stevens: I would suggest to you, Mr. Speaker, that, when we are considering this budget before us, we not consider it merely as the budget of the present government that is in power, that it is really a budget that is being jointly presented to the Canadian people, if it were being presented fairly, by the Trudeau Liberal government, with their almost coalition partners, the NDP itself.


William James Kempling: That is right.


Some hon. Members:: Hear, hear!


Ian Deans: This is a horrible speech.


Sinclair McKnight Stevens: Every time I hear these socialists going forth, going out to the hustings, with their crocodile tears about how they want to help the poor, to help the elderly, to help those who have been downtrodden, I can only end up concluding that that is a hyprocritical approach for any group to be taking.


William James Kempling: Amen.


Sinclair McKnight Stevens: The fact is that they have hurt the senior citizens of this country perhaps more than any other group in the political arena. They have done the unforgivable, they have egged the government of the day on to spending programs that the nation now finds it cannot afford.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: Imagine, Mr. Speaker, to be stunned last night with the realization that spending has got so out of control, as far as this government is concerned, up to $90 billion per year, that the net result is that almost $20 billion has to be put on
The Budget-Mr. Stevens
the cuff somewhere. Literally, the government has run out of money; it cannot finance these programs.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: Mr. Speaker, when I say that, the repercussions are twofold. To the degree that spending is out of control it is putting pressure on our system. It puts the pressure on our system in the form of inflationary pressures and in turn, I would suggest, it drives up the interest rates that we are now living with. Is that helping the poor of this country? Is that helping the old age pensioner? Is it helping the man who is out of work to have this conspiracy between the NDP and the Trudeau Liberals driving up interest rates in the country to the near breaking point, the 20 per cent level?


Lyle Stuart Kristiansen: Get off it, Sine.


Ian Deans: It was the Tories who supported the Liberal high interest rate policy, and you know it.


Sinclair McKnight Stevens: Every time the NDP advocates still more spending, I think every other member of this House should go out to where the voters are and explain the inflationary repercussions and the high interest structure the NDP is virtually insisting should be put in place.


Ian Deans: That's a lie.


Neil Young: That's a lie.


Mr. Epp:: Order, Mr. Speaker.


Neil Young: It is a plain, outright lie.


Sinclair McKnight Stevens: Mr. Speaker, it is funny when you hit the quick-


Neil Young: Tell the truth.


Ian Deans: If you know it.


Sinclair McKnight Stevens: When you hit the quick, it is always interesting to see-


Ian Deans: Get out of the gutter, Sine.


Sinclair McKnight Stevens: [DOT]-how the rabbits come out of their burrows so
fast.


Ian Deans: Deal with the facts, if you know them.


Sinclair McKnight Stevens: There are those in the socialist ranks who still believe their program might work. I would like to ask them when. We have had 15 years of it now. We have had 15 years of trying to spend our way out of problems. When is the Valhalla going to come? The British have been ravaged by the type of experimentation about which the socialists love to talk. The British found that this orientation toward government spending and government involvement and interference only led to two things. On the one hand, it artificially triggered

June 29, 1982
The Budget-Mr. Stevens
consumption, it artificially built up the buying power of the nation, which resulted in the inflation which plagued Great Britain for many years. On the other hand, that same force-


Paul James Cosgrove: Mr. Speaker, I rise on a point of order. I have been troubled for the last two or three minutes about a comment used and language used by the-


Arthur Jacob (Jake) Epp: They are coming to get you, Paul.


Mr. Deputy Speaker:: The hon. member will have to delay his point of order.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, Mr. Deputy Speaker with the House went up to the Senate chamber.
And being returned:
Mr. Deputy Speaker:: I have the honour to inform the House that when the House did attend His Honour, the Deputy to the Governor General in the Senate Chamber, his Honour was pleased to give in Her Majesty's name Royal Assent to the following bills:
Bill C-l 12, an act to amend the statute law relating to certain taxes-Chapter No. 104;
Bill C-l01, an act to amend the Petro-Canada Act, Chapter No. 105;
Bill C-l02, an act to amend the Department of Energy, Mines and Resources Act, Chapter No. 106;
Bill C-l04, an act respecting petroleum incentives and Canadian ownership and control determination and to amend the Foreign Investment Review Act, Chapter No. 107.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion (Mr. MacEachen) that this House approves in general the budgetary policy of the government and the amendment of Mr. Wilson (p. 18905) and the amendment to the amendment of Mr. Riis (p. 18908).
Mr. Deputy Speaker:: Order, please. The hon. Minister of Public Works (Mr. Cosgrove) was rising on a point of order.


Paul James Cosgrove: Mr. Speaker, at the first opportunity after listening to a descriptive word which was used by the member who has the floor in this debate, I looked through the rules for what words are permissible and what words are not permissible in this House. I am not anxious to repeat the word because I found it indecent. I thought it unbecoming to this Parliament and I thought it unbecoming that it be uttered in a public place. The word was a description of what is known as a house of ill repute. It is not shown in the section on language that is not permissible, but I would not want the occasion to go by lest it be thought that all members who were in the House at the time the word was used, found it acceptable or becoming to this institution. There are children in the gallery this evening and there may be some children in Canada watching these proceedings on television.
I object to the use of that word as unbecoming to this place and I would ask that you consider whether the word is indecent and therefore not permissible as parliamentary language.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: The matter of deciding what is parliamentary or unparliamentary is sometimes difficult. In the opinion of the Chair the language was offensive but it was not unparliamentary. I would call to the attention of the hon. member who has the floor that the language he used hardly brought dignity or credit to the House of Commons, and I ask that he refrain from such language.


Sinclair McKnight Stevens: Thank you, Mr. Speaker. I will not comment on your ruling. During the dinner break I had an opportunity to read the relevant section in Beauchesne and of course I consulted the Oxford dictionary. I think it would be most enlightening for all members of the House to look to the Oxford dictionary for the word I used and upon which you commented.


Mr. Deputy Speaker:: Order, please. I would invite the hon. member to proceed to the debate. I do not think it is to the advantage of the hon. members or to the House to have a discussion on the matter.


Sinclair McKnight Stevens: Mr. Speaker, I should like to continue with the main thrust of what I was saying. We have had a scenario in which the government, starting in 1968, has consistently put expenditure programs in place. In this it was substantially aided and abetted by the NDP. The culmination of all this is the type of budget that we received yesterday evening. I think it would be relevant to put a few statistics on the record. The net result of the budget is that we will now find that government spending this year will equal $8,251 per taxpayer, compared to only $1,692 per taxpayer in 1967-68, the year
June 29, 1982

before the Prime Minister took office. On a per capita basis, government spending this year will amount to $3,175 for every man, woman and child in Canada, compared to only $549 per capita in the 1967-68 period.
Many methods could be used to show the true impact of what the government's spending, which is virtually out of control, has led us into. It has very dramatically sopped up the available investment money that would normally be routed into various plant expansions and business investments which in turn, would create jobs for Canadians. This money has now gone into relatively nonproductive activities.


Lyle Stuart Kristiansen: You mean things like private takeovers.


Sinclair McKnight Stevens: My socialistic friends want to get into the act. They ask about private takeovers. Perhaps they are forgetting that the parent of the takeover craze was their own prize Crown corporation, Petro-Canada. In one fell swoop it laid out $1.4 billion U.S. for Petro-Canada. On an after tax basis, that money alone cost the Canadian taxpayers $70 million. That could be regarded as part of the almost $20 billion deficit in the budget now before us.
I almost hope that the socialists to our left will keep putting in these little comments because I think they so neatly substantiate my point. It was they, in effect, who set these poor critters up and left them carrying a very, very dangerous piece of baggage, namely, an economy and budgetary fiscal position that is virtually out of control.
When I say that, Mr. Speaker, I think it is only relevant to remember that not only were we presented with a budget last night, but we were presented with one year's forecast of what the picture ahead of us looks like, namely the 1982-83 period, and nothing more. We were not given the benefit of seeing fiscal year 1984 or fiscal year 1985. On inquiry I found the reason we were not given the benefit of that information to see what lies in store if this government, heaven forbid, should continue in power is that they do not know. The government brought in a budget last night which literally does not project the ongoing expenditure-revenue figures beyond fiscal 1983. That leads me to comment on the fact that this budget was thrown together in the last four weeks, and I think we have to ask ourselves what triggered it. We were assured in the November, 1981, budget that they had the solution, all was in place and the government was going to lower inflation and basically get our economy turned around. So what triggered this sudden panic so that within four weeks the government felt it necessary to bring in the budget last night in a half-baked form? I ask that, Mr. Speaker, because I think the government of the day, irrespective of whether it is Conservative or Liberal, has to control expenditures, not in an immediate sense but in the long term. If there is to be a meaningful reduction in government spending you have to start looking at not just the present 12-month period, but the spending two, three, four or five years down the road. For example, I can give you figures of what our spending levels would have been had
The Budget-Mr. Stevens
we been able to stay in power and maintain those levels. By 1981-82, for example, the total projected spending under the Clark government was to be $61.5 billion. It turned out to be under this government $67.5 billion, almost $6 billion more than our projections when we were in power. But when we shift into the present fiscal year, 1982-83, we find that the November budget projected expenditures this year to be roughly $75.5 billion. Our spending for that same period was to be $67,218 billion. However, last night we found that $75 billion had moved up to $78.1 billion, a jump of almost $3 billion in federal government spending between last November and last night.
The reason I stress this, sir, and you are faster in arithmetic than I am, but you can see that with our expenditure level at $67 billion and the present government spending level at $78.1 billion, there is a difference of over $10 billion. That, Mr. Speaker, is part of the dilemma we are now faced with.
This government, Mr. Speaker, because it did not care to cut costs and try to run a tight ship as we proposed to do, has now subjected the nation to a $10 billion expenditure this year that we would not have run into. The net effect of the lack of confidence which has arisen from coast to coast is that production activities, the gross national product as it is sometimes referred to, has gone negative, and not only have we these higher expenditures but revenue has started to fall off. The net result is that while we anticipated our financial requirements to be $5.6 billion, we now find that the financial requirements of this government are $17 billion. There is the $10 billion difference, and it is simply overspending by this government compared to the Crosbie-Clark spending program which was brought in in December, 1979.
We all recall, Mr. Speaker, what happened. Absolutely horrified by the word "restraint" and a government which was trying to run a responsible fiscal and monetary position, the socialists moved a motion of no confidence in our spending program. Of course, always eager to get back into power for their own reasons, the Liberals supported the socialists, and the net result was the election which led to the return of the Trudeau Liberal government. I mention this, Mr. Speaker, because surely that is part of the substantiation which is needed when I say we should not just criticize the present government for the dilemma we are in. The truth is that it was a joint effort on the part of the socialists to my left and the near-socialists in front of us, the Trudeau Liberals.


Some hon. Members:: Hear, hear!


Ian Deans: You went to the public, they voted you out, and you still bleed about it.


Arthur Jacob (Jake) Epp: You guys are pretty sensitive tonight.


Sinclair McKnight Stevens: Mr. Speaker, any time my friend to the left wants to go to the public, I say, let us go to the public and have an election.


Some hon. Members:: Hear, hear!

June 29, 1982
The Budget-Mr. Stevens


Sinclair McKnight Stevens: Mr. Speaker, how quickly the House leader of the socialists forgets that when we had the last vote of confidence in this House every member of my party turned out to vote this government out of office, but only 80 per cent of his party turned up.


An hon. Member:: Save the Liberals.


Ian Deans: No respect for the democratic process.


Sinclair McKnight Stevens: Mr. Speaker, we can see who really believes in democracy in this country. On the vote tomorrow those who believe in democracy and want to let the Canadian public speak on this budget will have an opportunity to stand up in the House and support our amendment which will result in the defeat of this government. For once they can let the Canadian public decide who should bring in the next budget and govern in Canada.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, the NDP is saying that it is their amendment on which the vote will be taken tomorrow. Well, I hope they vote for their own amendment because sometimes they do get things a little mixed up.
Let me touch on another point in the budget which was rather disturbing. It concerns the minister's proposal to reduce taxation on investment income and interest rates to borrowers. 1 think it is generally agreed that in the lack of confidence climate in our country some type of stimulus is needed to get the investing public eager to build plants and facilities that we need to give more employment to Canadians. It is unfortunate that what the minister has really done is to introduce into an already confused picture still more confusion. Instead of giving certainty he has in effect said that this is the game plan we feel should win over the next two, three or four years. We have come up with a bright idea to have some type of inflation-indexed term deposit instrument. We are not too sure what form it should take, but we think it would be a good idea to have a so-called blue ribbon committee look over the idea in the next few months and come back to report to us. Having said that, I think the government underestimates the consternation developing in the investment community. As investors are trying to make up their minds whether or not to invest any money in Canada, a new idea is introduced. Investors are asked how they would like some type of indexed-for-inflation instrument of which they have never heard before.
Those who know how businessmen react will tell you that a feeling of dismay abounds. Why do they need to be treated to more guinea pig approaches or more test tube experiments at a time when a more fundamental return to the basics is needed? In short, there will be an attitude on the part of businessmen addressed to the government that had the government come up with a policy to show a smaller, not a bigger deficit, to show less spending than anticipated, and that along with less regulation, less intervention in the energy, mining and manufacturing fields, that would have given Canadians the confidence to get
on with the job of creating more employment. People do not want the government to start playing games using Canada as some type of a test tube or an experimental area for a program that apparently has never been put in place before in any country in the world.
When I asked where this kind of indexed-for-inflation instrument had been tried, Denmark was the only country mentioned. Today I checked this out, but no one knew anything about this type of thing being in place in Denmark, and we have to continue checking. However, a departmental official suggested to me today that the only place he knew where this type of thing had been tried was in one or more of the Latin American countries in South America. We are now taking our guidance, if you like, from countries that have had inflation levels as high as 5 per cent or 10 per cent per month. This shows to me the very sad, almost bankrupt, position which the government is in regarding new ideas to solve our problems.
A constituent suggested to me that the only reason Canada can still say it is not a banana republic is the fact that we do not happen to grow bananas in Canada. However, we meet all other tests.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: Mr. Speaker, I would suggest it is time for Canadians to become more concerned about what we are discussing tonight. Forty cents of every dollar earned by Canadians is taken by some government to be respent on his or her behalf. It has often been said that a slave is a person who is taxed 100 per cent. In Canada, we are 40 per cent on the way there. It is time we told our socialist friends to the left and our near socialists opposite that Canadians have had enough of this big spending deficit approach and we should stop doing this. If the Liberals are not willing to stop, let us go back to the Canadian public as soon as possible and find out who they want to govern this country in the future.


David P. Smith: Mr. Speaker, I am very happy to have the opportunity to speak in this debate. This debate is very important. We are in a crucial period in Canada's history and it is not an easy time to be in government. It is, however, a challenging time. What we must do is try to discuss what it is necessary to do in this budget. We have to do it in an honest, fair and responsible way.
It was necessary for this budget to spell out Canada's economic problems responsibly, honestly and candidly. It was necessary to spell out the economic problems and not gild the lily. We have to face up to the fact that Canada at the moment is in a recession. There is no getting around that. It is also fair to say that western industrial countries are also in a recession. Canada is a major trading country. We would like to expand our trade with other countries. Canada's economy is intrinsically linked with the economy of other countries, particularly that of the United States. I think it is fair to say also that the tail does not wag the dog.
June 29, 1982

The other day the chief economist for the Conference Board of Canada said that realistically it is not practical to suggest that Canada by itself and its government could solve all the problems of the western economies. The United States has high interest rates. Canada has high interest rates. Unemployment is high in the United States, and we too have high unemployment in Canada. Fortunately for the Americans, some success has been achieved in reducing inflation. The Americans have had more success than Canadians in this area. If Canada is to pull itself out of the recession, we have to do what is necessary to resolve inflation. We have to bite the bullet. This will not be easy, but that is honesty and responsibility in government, and that is what the Minister of Finance (Mr. MacEachen) did last night.
We cannot escape the fact of our deficit. The minister was most candid about the deficit and the size of it last night. Canada's deficit is $19.5 billion. At present over 20 per cent of federal expenditures go toward debt servicing.
Let us be honest and examine what options the government has before it in terms of trying to pull this country out of a recession. First, can we spend our way out of it? If we are to listen to what the hon. member for York-Peel (Mr. Stevens) said, I guess we cannot spend our way out of it. I do not think we can afford to let the percentage of federal expenditures allocated toward servicing the debt go up indefinitely. Were we to do that and were we to wind up with bigger and bigger deficits, we would find ourselves in a sink hole from which we might never recover.
Now, what would the NDP have us do? I suggest that they are consistent. They would tell us to spend, spend and spend. They would have us create more jobs and if, in the process, we go deeper in debt, the dollar drops lower, the cost of imports were to go up and, if necessary, we would have to put restraint controls there, it would be fine. They seem to be prepared to do that. I do not happen to think that that is a responsible approach to bringing the country out of a recession.
Is it possible for the government to provide everyone in the country who is unemployed with a job? I am sure we would like to be able to do that through direct job creation, but the simple fact of the matter is that we cannot afford it. However, what we can attempt to do is to employ a reasonable program that can try to provide some stimulus to some areas in particular that are hardest hit by unemployment. In the long run, if we wanted to shift the nature of Canadian society to a socialist society, perhaps everyone would have a job, but we may wind up in the position of a country like Poland. I was amused to read an article about the recent economic crisis there in which a worker is reported to have said, "Here we have several myths. The government pretends that everyone gets paid, and everyone in return pretends that they work."
That is not what the Liberal Party is all about. Contrary to what you may believe, if you listen to the hon. member for
The Budget-Mr. Smith
York-Peel, this is not a socialist party. This is a party and a government which believes in social justice. We believe in social justice within a free enterprise fabric.


Mr. Huntington:: That is not so. That used to be so.


David P. Smith: Let us review some of the other suggested options. What about artificially lowering interest rates? We hear about this day in and day out from the official opposition. If we were to accept what the hon. member for York-Peel just said at face value, we should not be interfering in the laws of supply and demand. We should not be interfering in market forces. But, on the other hand, we hear from some of his colleagues in his caucus on a daily basis that we should artificially lower interest rates. I suggest that we should all recognize that for every person who borrows, someone is lending. The simple fact is that if you can get a higher return for your money in the United States than in Canada, most people will move their money out of the country to the States where they can get a higher return.


Arthur Ronald Huntington: What about Switzerland? What about Japan?


David P. Smith: There are a number of results from an outflow of capital from the country. The value of the dollar drops. The cost of imports rises. This triggers another inflationary spiral which, in turn, results in pushing interest rates. That is not a reasonable and practicable solution to the problem.
We occasionally hear as well that the economy can be stimulated by inflating the money supply, printing more money and combining that with lower interest rates. All of the conditions which I have just mentioned would occur if we took that approach and just abandoned caution with regard to the deficit. This would put us into a very deep sink hole.
However, these approaches are suggested rather glibly by some members opposite-1 am not suggesting by all of them- on almost a daily basis. I would suggest that if we took that approach, the cure would be worse than the disease. 1 would suggest that some members of the opposition do the people of Canada and the political process in Canada a disservice when they suggest that there is, in fact, a quick fix that is available, an easy answer or options to turn to. Those members are heavy on criticism from their side but very light on alternatives.


Elmer MacIntosh MacKay: We noticed that about you also.


David P. Smith: As I say, at least with the New Democratic Party you get the party line regularly, which is to spend and not worry about the deficit. They want more government hiring and more state control, which is not the route the government wishes to follow or this party wants to follow. However, when it comes to the Tories, you have to put your glasses on to see which ones are wearing a red shirt and which a blue shirt.
Another factor which I believe has contributed to the impression many Canadians have that there are in fact quick fixes and easy answers available has been the role of the

June 29, 1982
The Budget-Mr. Smith
media. While I do not mean to be critical of individual members of the media-


Mr. Munro (Esquimalt-Saanich):: You are safe. No one is up there.


David P. Smith: -I think there are collective impressions which are sometimes left in the minds of Canadians that sudden solutions do exist. You will see a build-up of hype about a certain event which would be taking place. For example, there was the annual cabinet meeting up at Meach Lake a couple of months ago. If you were to listen to the media and political pundits around Ottawa who started reporting on that Meach Lake meeting for about a month before it took place, you would get the impression there was to be a war council there which would receive wisdom from on high, and that they would suddenly come out with a new plan to solve all of Canada's problems. We saw all that hype being built up for that event until it finally occurred. Once the meeting was over we stayed on track, we continued to fight against inflation, and there is a big letdown from the expectations.
Another example concerns the Versailles conference. For several weeks leading up to that conference we got the impression that all the world's economic problems would be resolved at Versailles. I realize that members of the media all have a job to do and some would like to make their stories as dramatic as possible in order to have them circulated. However, the build-up does not reflect the real world. It is Alice in Wonderland.
The same thing happened last week as soon as we heard there would be a budget last night. All this hype took place again. I recently watched a television program on which there was a panel. One member of this panel was a small-business man. He was asked, "Would you like lower interest rates so it would be easier to operate your business?" He said, "Yes, 1 sure would." Then there was a home owner who was having difficulty meeting his mortgage payments. He was asked, "Would you not like it if your mortgage rates were a little lower so you would be able to carry on with the payments on your house?" He said, "Yes, I sure would." An unemployed person was then interviewed. He was asked, "Would it not be great if you could get a job out of this budget?"


Arthur Jacob (Jake) Epp: And feed your family.


William James Kempling: What is wrong with that?


David P. Smith: Who would not want that? The Minister of Finance is a decent man. He is a man of compassion who cares about Canadians. He has been here since 1953.


Mr. Nickerson:: Too long.


David P. Smith: He has given his life to Parliament and Canadians to try to improve their lifestyle. To listen to members opposite-be fair-you would get the impression that the Minister of Finance eats a bowl of nails for breakfast every morning, perhaps across the table from Mr. Bouey, and says, "What mean things can we do today?"
I ask hon. members opposite to be practical and fair. Do you not think that politicians like to be popular? What politician does not like to be popular? What politician would not like to be responsible for actions which would have everyone come and wave palm branches for him as he walks by. Everyone would like to do that if possible, but it is not responsible politics or responsible government. Do you not think that the Minister of Finance would like to wave a wand so that interest rates would go down? Do you not think that he would like to be able to push a button to decrease unemployment? Do you not think he would like to be able to simply pass a bill which would reduce the deficit?
The minister would like to see businessmen have lower interest rates for the operation of their businesses. He would like to see lower mortgage rates for home owners as well as jobs for the unemployed. However, in order to accomplish all of those goals we have to tackle inflation. We must be prepared to be honest and responsible enough in government to make Canadians aware of the reality that unless inflation is brought under control none of those goals will be obtainable. That is the fact, and everyone sitting in the House who is honest admits it and is aware of it. That fight against inflation is exactly what the minister took on as his major target last night.
The first point the minister made last night was the lowering of expectations of Canadians in terms of their income. He set a good example with respect to Members of Parliament since we will be taking a cut. That is acceptable, and I do not think any of us are complaining about that cut. He also indicated that we have to look at the federal government as a whole and the influence that the pay settlements of those in the federal public service have on the rest of the economy. He said that we will have to have a 6 per cent ceiling for the next 12 months and a 5 per cent ceiling for the following 12 months. We will be urging the provincial governments and the private sector to follow that example. Now that is responsible government. It may not be sugar-coated government, it may not be popular government, but that is responsible government, and that is what this minister, this party and this government are all about. This action is not punitive action; rather, it is necessary. We must all put the bit between our teeth, and we must all bite the bullet.


Arthur Ronald Huntington: It's all planned.


David P. Smith: I suspect that the Tories will support that legislation. I may be wrong, but 1 suspect that they will support it. I do not expect the NDP members to support it. Why will they not support it? The fact is that they are so wrapped up with big labour that they cannot get out of bed with them even when it is on fire, and that is the fact. The CLC and the NDP; the NDP and the CLC-it is hard to get them out of one's mind. It is one group. I am not really sure who the piper is who is playing the tune. One week it may be one side and the next week it may be the other side in that
June 29, 1982

dynamic duo. But in any event, they like the Alice in Wonderland approach that everyone can have a bigger slice of an ever-expanding pie and no one ever needs to worry about the long run and the future. That kind of pie in the sky approach does not get anyone anywhere, and it is not responsible. I happen to think that the NDP, because of its influence with big labour and the union movement, could really do this country a service by persuading them that they must show some leadership and responsibility to their own members, rather than inflaming them with rhetoric and stirring them up to storm the barricades, refusing to be responsible about fighting inflation like everyone else in this country. Will they do this? I hope they will, but I think I will be proven wrong. I think we will see the NDP fanning the flames-


Arthur Ronald Huntington: Crystal ball.


David P. Smith: -of labour unrest, not trying to resolve the problem of inflation in this country but, rather, trying to make it worse.
Another aspect of our attack on inflation relates to limiting indexation for Canadians. First, the indexing factor in the income tax system will be limited to 6 per cent in the first 12 months and 5 per cent in the following year. Indexed pensions will be subject to the same ceiling for the next two years, 6 per cent and 5 per cent. If we are really serious, we must do it across the board. All Canadians must make some degree of sacrifice, some perhaps more than others. Those who have the ability to pay will have to make the greater sacrifice. I think all Canadians must seriously respond to this literally in a partriotic way. Therefore, family allowances and old age security payments will be subject to those same limitations. But, following the Liberal tradition, that will not apply to those on the guaranteed income supplement and also those receiving veterans pensions, as we all know. I think that is a reasonable and responsible saw-off in the sort of situation we are in right now.


Donald W. Munro: You would!


David P. Smith: Now they ask, "Who would?"


Donald W. Munro: I said, "You would".


David P. Smith: There is a typical example-


Arthur Jacob (Jake) Epp: He said, "You would", not "Who would?"


David P. Smith: Oh, I would. Earlier today we heard some objections from hon. members of the Tory party about this policy. 1 will not get into the question of intent, but I would suggest there was some misleading rhetoric as to old age pensions being cut, and that, of course, is complete, utter nonsense. That is an irresponsible approach because we all know, and anyone who looked at this very thoroughly knows, that old age pensions will continue to go up.


Dave Nickerson: Now, now, tell the truth.


David P. Smith: They will not go up at the rate they would otherwise, but they will continue to go up. We have heard speeches from the hon. member for York-Peel, who complains
The Budget-Mr. Smith
all the time about government spending, but when it comes to the question of what he would cut, we never hear about that. Oh, he is all for cutting government spending, but what will he cut? I would like him to spell that out because that is something he always leaves out in his speeches.
As another part of our attack on inflation, we are considering the entire question involving those areas of the economy in which administered prices fall under federal jurisdiction. Those agencies which regulate those goods and services in the fields of transportation, communications, etc. will adhere to those guidelines, except in the most exceptional circumstances. At the same time we have launched an all-out attack on inflation by setting a good example ourselves, 1 would suggest, throughout the public sector, and at the federal level we are also taking action to shore up investment and confidence in this country. That is very important. We want to see private investment in this country. This is a party which does believe in incentive and the work ethic.


Some hon. Members:: Oh, oh!


David P. Smith: We want to see people investing in this country and creating jobs. If one looks at page six of the minister's budget address, it really spells it out in no uncertain terms. First of all, we have the new form of term deposit whereby those who invest funds in it will not be taxed on that part of the interest above the rate of inflation. What is that all about? Then we have this point about Canadians investing funds and new plans for the purchase of common shares of Canadian corporations, and the impact on the part of the capital gains tax. That is a typical example of a party and a government which does want to stimulate investment in this country, which does believe in incentives and encouraging people to take risks, take a chance on Canada and invest their dollars out in the country.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


David P. Smith: Buyers of new homes will be able to secure mortgages at significantly reduced interest rates, from three to six percentage points lower than the prevailing rates. Small businesses, farmers and fishermen will be able to secure loans for new equipment and investment at similarly reduced interest rates. Canadian corporations will have improved access to risk capital. It is all there.


Arthur Ronald Huntington: Where?


David P. Smith: I do not think the hon. member has read it. Well, I will tell him where it is. It is on page six of the minister's speech last night, right in the middle of the budget address. I can only conclude that they all had cotton batting in their ears last night, because, judging from their comments, they certainly were not listening.
This government has indicated flexibility and responsiveness by making some shifts to encourage investment in this country. That is all spelled out on the top of page seven of the minister's

June 29, 1982
The Budget-Mr. Smith
address last night. There are six points there relating to the November budget. The 12.5 per cent corporate distribution tax applicable to small business will be postponed for one year, to January 1, 1983. Why are we doing that? It is because we believe in small business and we want to help it. That is a reasonable and responsible way to do it. That is not sugar-coated government. That is responsible government.
The proposals related to the deduction of interest expense will be reviewed and their effective date will not be before 1983. Why? It is because we want to encourage investment and confidence in this country. The proposed automobile standby charge has been reduced from 2.5 per cent to 2 per cent. The rules on the restriction of interest expense will not apply to commitments relating to employee share purchase loans undertaken prior to November 12, 1981. We also have the provisions concerning forward averaging and corporate reorganizations. That is responsiveness. That is flexibility. That is responsible government, I would suggest.
There are also the aspects relating to foreign investment, relaxing the process in less than major acquisitions so as to encourage investment in this country. In addition to an all-out attack on inflation and an attempt to put investor confidence into this country, we are also taking a reasonable approach to create jobs and sustain growth in employment.
I turn to page eight of the budget speech. 1 would encourage hon. members opposite to do that. I am sure they have not yet read it. If one considers it long enough, some of the good things in it may sink in. There is a $200 million allocation to direct employment programs. Why are we doing that? It is because we want to stimulate growth in this country. But we are doing it in a reasonable amount. I am sure it will not be enough to satisfy the red Tories opposite, but of course the blue Tories think that we are spending too much money. It is too bad that they cannot get their act together and decide which side of the fence they are on. At least I know what side of the fence the NDP members are on. I do not agree with that side of the fence, but I know what side of the fence they are on.


Ian Deans: Leave us alone.


David P. Smith: I certainly cannot say that about the hon. members opposite.
Also, there is $150 million for increased spending on localized, employment-intensive projects under existing government construction and other programs. Together with more than $100 million available from existing employment and immigration allocations, this will provide more than $450 million for direct job creation. Combined with the $300 million for economic development programs that create permanent private sector jobs through levered investment incentives, there is a $750 million program. I suggest that is a very serious, responsible manageable commitment to stimulate jobs in this country.
Then we have the program which the minister responsible for housing talks about. I do not think I have to repeat what I said. What we have in this budget is a responsible approach, not a candy approach, but a candid honest analysis of what the immediate problems are and a responsible way in which to deal with them.
With regard to the Tories, we knew they did not like it even before they saw it. Perhaps that is a natural outcome of the parliamentary process which is by nature adversarial. However, I would find it easy to deal with the Tories if I knew whether they were taking the approach which we heard from the hon. member for York-Peel or the approach we heard from the hon. member for Yellowhead (Mr. Clark), or the hon. member for Rosedale (Mr. Crombie) and the hon. member for Kingston and The Islands (Miss MacDonald). One really does not know. You need a score card to tell whether they are wearing blue shirts or red shirts.
In conclusion, this is a responsible budget. It is an honest budget. It tells it like it is. What does it do? It points to a tunnel. However, there is a light at the end of the tunnel. If we stick to it and lick inflation, we will also lick the problems of unemployment, interest rates and the deficit. However, we will not do all those things unless we are serious, single-minded, supportive and try to make it work. That is why I believe we have a responsible minister bringing in a responsible and honest budget. I am happy to stand up in this House and speak in support of him and the budget he presented last night.


Arthur Jacob (Jake) Epp: Mr. Speaker, in speaking to the budget that was presented by the Minister of Finance (Mr. MacEachen) last night, a number of thoughts come to mind. One has to decide which one best reflects one's own inner attitude regarding the economy and the performance of the minister.
What is more important is, what are Canadians feeling like today? Do they have hope? Do they see the economy growing? Do they see the possibility of attaining the goals they set for themselves as individuals, heads of families, business people, farmers, ordinary tax-paying Canadians? Do they feel that the country and the government is more responsive to their needs than prior to the budget last night before it was announced?
I must say that I am a sad Member of Parliament in this House tonight. I am sad because I believe that this country is the best country in the world but it is not getting the government it so rightly deserves.
In 1981, Goldwin Smith, an observer of Canadian life, after having taken a look at our society at that time, some 90 years ago, said that if he had to put a salutation over Canada's door, it would be this epitaph: "Canada is a country that is resource-rich, policy-poor."
Possibly at no other stage has that attitude been more prevalent among Canadians. They believe this country is resource-rich, be they natural resources or human resources. At no other time have they felt that policies to meet and reach that potential have fallen so short of the potential that could be Canada's.
June 29, 1982

The hon. member for Don Valley East (Mr. Smith) is a good apologist for the government. Ele has a role to play. I accept that. However, for the first time from his mouth today and for the first time last night from the mouth of the Minister of Finance was there even a slight concession that Canada is in a recession.
Some Canadians may go further. Because of the lack of a job, loss of business or loss of opportunity, some Canadians are facing a personal depression. That is a strong word. However, all one has to do is to look today at the reaction of ordinary Canadians to the budget of yesterday to see that that is true.
Throughout the speech of the hon. member for Don Valley East or the budget that was presented last night, the reasons for the trouble in Canada were not laid at the doorstep of this government. What are the reasons? Their first reason was the United States and the policies in that country. When times were good, how many times did we hear members opposite railing against our neighbour to the south? Now, because the shoe is on the other foot, they use the argument that once the United States recovers, things will be better in Canada. They say there is a world recession. For example, base metal prices are low. When one looks at our mining industry and international markets, one sees that that is a fact.
A former minister of finance, in defending the performance of the Liberal government of that day, had the gall to say that the anchovy crop off the coast of Peru was causing difficulties in our economy. At no time do they say that largely because of government promises, government action or government decisions problems are created here in Canada by this government on the floor of this House. They will not accept that responsibility. They like to accept the perks of government, the power that comes with government, but how often do we see them taking the responsibility that comes with government?
The question for us tonight, is do you, can you, should you believe the Prime Minister (Mr. Trudeau) and the Minister of Finance? We have all heard the Prime Minister say that he was going to wrestle inflation to the ground. Unfortunately, many Canadians believed him. As of yesterday's budget, we are once again to believe that despite the National Energy Program, the November 12 budget and the changes of December 18, if we follow this drummer, we will move out of the recession, have a maximum 6 per cent inflation and good times will be back in Canada.
The government must face the reality of the little boy who cried wolf once too often. Today we have a crisis of confidence. The resources are still there and the potential is still there, but today people do not have confidence in their government. But today people do not have confidence in their government. They do not believe you, gentlemen and ladies, they do not believe you any more. They have heard that once too often.
While it may be tragic for you in an electoral sense-and only time will tell that-that is not the important issue today. The important issue is that because of this government's leadership Canadians today are unemployed. Because of its
The Budget-Mr. Epp
leadership Canadians are losing their homes. Because of its leadership people are losing their businesses. Because of its leadership people with 30 and 35 years of experience, who are 50 and 55 years of age and were hoping that in another five or ten years of employment they could take retirement, now, suddenly, ten years early, find themselves out of work. They go on the labour market and they say, "Can you give me a job?", and they are told they are too old.
That is the government's legacy, and no matter what rhetoric they use, no matter what they say, that remains, and Canadians will not forget it.
I was not here last night, Mr. Speaker, but I would have liked to have been here. 1 had given a commitment to a small community in my riding. I spoke at a high school graduation, a small graduation, there were 19 grade 12 graduates. That is not large by most high school standards anymore. At the banquet, I asked a number of those graduates, "What is your plan now that you are stepping forth, so to speak, into the adult world?" And what they said invariably was, "Give us a chance, give us work, show us the opportunities and we will go and get it and we will build this country." The spirit that developed this country is there with our young people. The tragedy of this government's economic leadership today is that young people who are looking for work cannot find it. At what stage do they say that the opportunities they hear us speaking about, the opportunities that they innately and inherently feel are in Canada, they cannot realize? What happens to those young people, in terms of their attitude to the country, to the institutions of the country-and yes, Mr. Speaker, in terms of their attitude to this institution and the democratic process? Those are serious words but I mean them tonight. It is a question all members, but especially the government members opposite, should answer.
We hear as well now that we can lick inflation, that we can beat inflation if we lower our expectations. Lower our expectations! Just think of that statement for a bit, Mr. Speaker. We are telling Canadians to lower their expectations-for Canada! Do you believe that in the period of John A. Macdonald, Cartier and Brown, they told Canadians that lowering their expectations would build the country? Do you think that Laurier and Sifton told people who were immigrants without anything, immigrants who came to western Canada and all they had was 160 acres, to till their soil, grow their own food, build their own homes, build the barn, did they tell them to lower their expectations? Surely this country has gone away beyond the vision of those people. Today we hear the government say, "Lower your expectations, and things will be better."
No, it should be the other way, Mr. Speaker. They should be able as a government to say: "Canadians, young people, middle aged, older people, this country is great, here are the opportunities, here is the climate, go out and get it." Surely that should be the policy.


Some hon. Members:: Hear, hear!

June 29, 1982
The Budget-Mr. Epp


Arthur Jacob (Jake) Epp: On the Peace Tower in this building, engraved in stone, is the statement: "Without vision the people perish." Without the vision of government, without the leadership, do not talk to me about the fact that you like government, that you are comfortable in the government benches. Talk to me about how you will lead Canadians, how you will give them vision once again. Because only as we are going to have economic development, economic success, will the matters of social justice again become valid in this House and in this country.


Some hon. Members:: Hear, hear!


Arthur Jacob (Jake) Epp: Only then. You cannot talk about social justice until such a moment as you give economic opportunity. Too many of us have people back in the Soviet Union. They hear a lot about social justice; they see very little of economic development as individuals, and so it becomes empty.
So, the first thing that has to happen, Mr. Speaker, is for this government to understand that it, and it first-not others, it-holds first responsibility to the economic crisis that we find ourselves in as Canadians. Should that happen, I think we would then be able to start on the road to recovery.
Canadians today are afraid. I said that today I was sad. Possibly people hearing me would say I am more angry than sad. I am both. But there is a myth that has gone through the Canadian public consciousness. I did not live in that period of time, but coming out of the 1930s there was an apology that "Tory times are tough times."


Mr. Breau:: They still are.


Arthur Jacob (Jake) Epp: And the hon. member for Gloucester (Mr. Breau) still believes that. There was the mythology, though, on the other side of that coin, that no matter what the Liberal Party did to you, they were good economic managers. Take a look at them now, Mr. Speaker. Any management expertise they might have had, any management reputation they might have developed at some time, surely has broken like shards at their feet. And the people who are most disappointed are Canadians.
We hear about the deficit. Jocularly, almost, they say: "We must do something about the deficit, it is serious, we have to do something." Let us look at the deficit. 1 remember a few weeks ago when there were rumours that the deficit was going to be substantially higher than the $10.9 billion projected in the November 12 budget. There were members in the House and commentators who were saying that the budget could almost go all the way up to $15 billion, maybe to $16 billion, and in some quarters some members were saying: "Oh, do you think it could go that high, do you think it could any higher?" None of us dared believe that the deficit could approach $20 billion. That $20 billion-or $19.6 billion-is projected on two other matters which the government does not want to talk about, and that is this: one, what will be the shortfall in the unemployment insurance fund-which we will know at the end of the third quarter, that will be January 1983. It could be, most likely, another $2 billion. Plus, the minister is banking
that the deficit will not go any higher because he is planning that there will be growth in the next two quarters. Does any Canadian who has looked at the situation today believe that we will have that kind of growth in the next quarter? Can you show me one reputable economist or investor who believes that? And this is the smoke and mirrors that the minister likes to play with. Somehow he feels that the light of truth will simply not sear away those words that he is so quick to use.
With respect to the deficit of $20 billion plus, there is no other single factor which will more quickly, more dramatically or more deeply erode confidence in our country than that deficit. If hon. members opposite individually were spending 33 per cent annually more than they earned, how long would their families survive? How long would they sit around their breakfast tables as families and make plans for the future? Is that the legacy they are leaving to Canadians?
I know there are many Canadians who have invested in Canada savings bonds. Last September the bond issue came out at 19 per cent plus. In my mind, at least, the setting of that rate set a target for interest rates for the next year. Why should a Canadian invest in Canadian business if he is guaranteed 19 per cent plus without risk?


Mr. Peterson:: How much did you pay?


Arthur Jacob (Jake) Epp: The hon. member opposite wants to be personal. He can do that, but I point out that the only way we are going to get our economy back in line is by rewarding risk-takers to a greater extent than we reward bond holders. What will be the rate for the bond issue this year? Is that a factor in the deficit? The government has to get into the bond market. It has to get $20 billion, and the more it can find domestically the better.


Arthur Ronald Huntington: They need $60 billion.


Arthur Jacob (Jake) Epp: With the rollovers the government needs $60 billion, but to get that what offer does the government have to make to Canadians, with inflation running at the rate it is today? What offer does the government have to make to Canadians, and what will be the cost? That is the legacy of hon. members opposite.
An interesting exchange took place in the House of Commons today during the question period. It was a rather sad exchange about old age security. The government was hanging on to the fact that old age security payments for next year would go up-not down-and from a strictly dollar point of view, that is correct. If OAS is to be inflated by 6 per cent, obviously the payments will be higher than they are this year. That is fair enough argument for the government to make. However, at no point was the government willing to concede that the amount pensioners will receive will be less than what they expected in terms of meeting inflation and the erosion of their buying power next year.


Steve Eugene Paproski: A heartless government.
June 29, 1982


Arthur Jacob (Jake) Epp: The Minister of National Health and Welfare (Miss Begin) likes to champion causes and create the image that she is always there working for the less fortunate in our society. She said the government would give pensioners $10 per month more. They will get $239 this year and $249 next year. Let us examine that for a moment. These are the people who were our pioneers. These are the people whose salaries almost invariably were substantially lower than salaries earned today-by those of us who have work. They are the people who saved for that time when they would be senior citizens. Is it valid to give them that kind of sleight of hand argument? Is it valid to give them smoke and mirrors and to say that, because it is more, they therefore should not ask for an explanation as to why it would otherwise be less?
The government is asking for confidence. The government wants the economy to start rolling. If that is the goal and that is the sincere aim, I say in all sincerity that the government should tell Canadians the whole story and not hold back that which might not be favourable. Only then will the government gain some credibility.
I also found it interesting that the hon. member for Don Valley East (Mr. Smith) blamed the media for the government's problems. He said the media had created a hype. At the time of the Meach Lake experience the government went to the mountain top. I suppose the members of the government wanted to get some revelation-perhaps not equal to the Ten Commandments, but some revelation nonetheless.


An hon. Member:: Water.


Arthur Jacob (Jake) Epp: If they went for water, that would have been better. After Meach Lake the response of members of the government to any questions in the House was, "Wait for Versailles, wait for Versailles." The response was that when the minister returned from Versailles-


David P. Smith: We never said that.


James Scott (Jim) Peterson: Nonsense.


Arthur Jacob (Jake) Epp: Was that not said?


James Scott (Jim) Peterson: No. Name one who did.


Arthur Jacob (Jake) Epp: I will name one: the Minister of Finance.


Steve Eugene Paproski: Pierre Trudeau.


Arthur Jacob (Jake) Epp: Or the Prime Minsiter.


James Scott (Jim) Peterson: What did he say?


Arthur Jacob (Jake) Epp: Then after Versailles the response was, "Wait for the economic statement", which became a budget. Hon. members opposite can blame the media all they want. Some days I take a certain jaundiced view of the media myself, but let hon. members be honest; they used every one of those events to hold off the inevitable, which came last night in the budget.
How can we turn the economy around? Is it possible? I believe it is because of our potential as a country. Tomorrow
The Budget-Mr. Epp
there will be what I suppose I can call a federal-provincial conference. There will be a meeting of the Prime Minister with the ten premiers of the country. The Prime Minister has told them, "We must co-operate." That is true, but when we look at the events of the past 18 months, can we say that the Prime Minsiter is the best person to preach co-operation in Canadian federalism?


Arthur Ronald Huntington: He said co-operative federalism is dead.


Arthur Jacob (Jake) Epp: I believe in co-operative federalism.


Mr. Rossi:: You are not the judge of that.


Arthur Jacob (Jake) Epp: Fair enough, but the Prime Minister said cooperative federalism is dead.


Carlo Rossi: Who are you to judge that?


Arthur Jacob (Jake) Epp: I am telling the hon. member what the Prime Minister said. What happened with the EPF? What happened in the constitutional debate? The Prime Minister said cooperative federalism is dead. How can he expect, after one short post-budget meeting tomorrow, that suddenly cooperation will be natural? The Prime Minister himself said today that the energy agreement with Alberta and Saskatchewan took 18 months to achieve. What about the Atlantic offshore problem?


James Scott (Jim) Peterson: What about the budget?


Arthur Jacob (Jake) Epp: These are all factors in tomorrow's meeting. Granted, we are in very difficult times and need co-operative federalism, but this Prime Minister is the only Prime Minister in the history of the country who has had such an abysmal record in dealing with the provinces.


Carlo Rossi: On account of you guys. On account of you, trouble-makers.


Arthur Jacob (Jake) Epp: I note the hon. member for Gloucester (Mr. Breau), who was the chairman of a committee which made a report which was totally annihilated and destroyed by the Minister of Finance, is in the House.


Herb Breau: You haven't read the report.


Arthur Jacob (Jake) Epp: If the hon. member for Gloucester wants to speak, he can ask his whip. His whip might even let him speak next year.


Herb Breau: Tomorrow at five o'clock.


Arthur Jacob (Jake) Epp: Is there any other factor? I believe that if we return to co-operative federalism, in time confidence can be restored. However, the federal government will have to recognize that the provinces are partners in federalism and that they have a role to play. That role should not simply be to answer a call by the Prime Minister to come to Ottawa 48 hours after the budget to be told, "That is what you will do, or else." The Prime Minister has taken that approach too often.

June 29, 1982
The Budget-Mr. Malepart
There are other aspects of the budget that I should like to touch upon. The Minister of Public Works (Mr. Cosgrove) spoke about the housing program, but, Mr. Speaker, to date every program he has brought forward has fallen well short of his projections. Now we hear about a $3,000 grant for first time home buyers and, on the face of it, it is a step in the right direction. It could increase house building, construction jobs and jobs in the subtrades. But let us analyse this, Mr. Speaker.
A family in Winnipeg buying a basic house at a cost of approximately $60,000 would have to put 10 per cent down under this plan. With their $7,000 and the $3,000 grant, they are left with a mortgage of $50,000. It does not take long to figure how much interest that young couple must pay, at 18 per cent. In the first twelve months, when they receive the $3,000, their interest payment, taxes and upkeep will amount to $9,000.
The government is in charge of one of the richest countries in the world, Mr. Speaker. We can turn this country around but, first of all, the government must come clean with the people. It has perpetrated a disaster on the country. The next election will put it back in its place and that is, out of office. Unfortunately, future generations will have to shoulder the deficit it has created.


Some hon. Members:: Hear, hear!


Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, it is a pleasure to take part in the debate on the budget brought down yesterday by the Minister of Finance (Mr. MacEachen). Mr. Speaker, I sincerely believe, considering the difficult economic situation facing all industrialized countries, that the budget tabled by the Minister of Finance is a good budget and a realistic one, because it pursues two important objectives, namely to fight unemployment and inflation. The opposition parties, both the Progressive Conservative and the New Democratic Party, will say that it is not enough or that it is too little, too late, but if we look at this budget, still bearing in mind the economic situation and from a realistic rather than a political point of view, we must admit that it is a realistic budget, and I am confident that the measures announced in this budget will make a positive contribution towards helping Canadians who are facing problems at the present time.
Mr. Speaker, looking at the measures announced in the budget that will provide assistance to the unemployed, homeowners who are being squeezed by high mortgage rates, farmers, fishermen and small businesses, we shall see that the programs have met the expectations of Canadians. In fact, the government will spend $1.4 billion on financial assistance for these groups and on job creation.
And just how, Mr. Speaker, does the government intend to fight unemployment? First of all, the government will inject $200 million into local development programs which are
extremely important, not only for job creation but also for the kind of services they set up for Canadians in ridings across the country. In addition, the government will spend $300 million on economic development programs in the private sector for the creation of permanent jobs. Both types of programs will ensure that additional jobs are created quickly and targeted especially to areas which have been particularly hard hit by the recession. Mr. Speaker, the government has decided to fight unemployment by creating jobs through housing assistance programs. The minister has announced five major measures to respond to the needs of the housing sector, while at the same time creating employment. The following is a passage related to the first program, and I quote:
The government will provide grants of $3,000 to all purchasers of new houses on which construction starts before December 31, 1982, and to first-time buyers who purchase an existing house before that date. It is estimated that 100,000 purchasers will be eligible for this grant. The total cost of this new program is $300 million.
Under the second program, the government will add an additional $30 million allocation to the home renovation plan, thus increasing it to $60 million. Mr. Speaker, last Wednesday I had an opportunity to meet with Montreal representatives of the Canada Mortgage and Housing Corporation and city of Montreal officials, and I can assure the House that the program is greatly appreciated by the people of Montreal and that there are many applications, and I congratulate the minister on having given this program his special attention.
The third program also recognizes the needs of low-income Canadians. Under the program, the number of co-operative housing units will be increased by 2,500, thus raising the total number from 25,000 to 27,500 in 1982, in recognition of the housing needs of low-income groups. To demonstrate the importance of co-operative housing programs, Mr. Speaker, I would like to quote a letter from a member of a co-operative in my riding. I must say that in 1981 I saw 843 housing units under construction and, recently, I had the opportunity to attend the opening ceremonies of a co-operative which has managed to recycle or use an abandoned school and convert it into housing units. I can assure the House that the 31 families now living in those units built under the Canada Mortgage and Housing Corporation assistance program have nothing but praise for the minister's decision. I should like to quote a letter from someone in my riding who belongs to the co-operative movement:
Sir:
As a voter in the Sainte-Marie riding, Mr. Malepart, I want to congratulate you for supporting the co-operative formula. I should think that you will gain more support if additional units are built. Having lived through that experiment in the past two years, I can assure you that the formula ought to be put forward. Unlike the low rental housing alternative, it gives tenants a sense of autonomy; people residing in co-operative units talk to each other, contribute to the chores to be done, which promotes dialogue and security. The units are very well maintained and the rent is reasonable, which is why I joined the movement because I have a small income and I could hardly make ends meet. This housing unit formula was just what I needed and I am sure I was not the only one in that predicament. I am a member of a Quebec association for the protection of the
June 29, 1982

rights of people who are retired or about to be and I want to assure you that I am interested in anything that has to do with housing and I follow all programs very closely. Keep up the good work.
Yours truly,
Marie-Paule Langlois,
President
Rosemont Boulevard Co-operative Housing
Mr. Speaker, when people write letters like that, I think that one should stop criticizing-naturally, being permanently in the official opposition does account for a negative approach- and that after a series of programs such as that one, the Minister of Finance is to be congratulated. The programs which I have just mentioned should provide some 65,000 jobs during the next two years. I think that it is important. Moreover, the government is prepared to show some flexibility about the rental support plan which provides interest-free loans of $7,500. The government is prepared to increase that amount in some areas. It should be remembered that last March that plan was increased to 30,000 rental units and the creation of 50,000 additional jobs is anticipated. And I should add that this is another program of which the representatives from Montreal are proud and wish to make extensive use. Mr. Speaker, the Minister announced that the Canada Mortgage Renewal Plan introduced last November will be extended to December 31, 1983. Thus all home owners having to spend more than 30 per cent of their gross income on their mortgage payment, as a result of a renewal taking place after last evening, will be eligible for a grant of up to $3,000. It will no longer be necessary to defer interest before becoming eligible for a grant.
Mr. Speaker, I am convinced that the constituents of Montreal-Sainte-Marie will be pleased to take advantage of those housing and job-creation programs. I should like to mention that after consultation with my nine other colleagues from eastern Montreal, we asked for job-creation programs through housing construction and direct assistance to business. This was done after consultation with the people of eastern Montreal during a four-day tour on economic issues. Mr. Speaker, the minister also announced the injection of $500 million for interest assistance to small businesses, farmers and fishermen. This will reduce plant closures and job losses. Those are, Mr. Speaker, important steps to fight unemployment.
Now let us see the steps taken by the government to bring down inflation, an evil affecting everyone but especially small and middle-income Canadians. We must remember that the minister has asked all Canadians to work together to bring down inflation, but that he insisted on protecting low-income Canadians, including middle-income families receiving family allowances and the child tax credit and senior citizens who receive the guaranteed income supplement. As its first antiinflation measure, the government has decided to cut pay
The Budget-Mr. Malepart
increases to 6 per cent for the next year and to 5 per cent the year after for employees in the federal public sector.
The first affected will be members of the House of Commons, ministers of the Crown and senators. In addition to restricting salary increases to 6 per cent next year and to 5 per cent the following year, the minister has announced that our salaries will be reduced this year. In addition, pay increases for public servants and Crown corporation employees will be limited to the same targets of 6 per cent and 5 per cent for the next two years. Moreover, the government will limit the indexation of personal exemptions and tax brackets to 6 per cent for the 1983 taxation year and to 5 per cent for the 1984 taxation year. Effective January 1, 1983, indexation of the pensions paid to former Members of Parliament and public servants will be limited to 6 per cent for 12 months and to 5 per cent for the following 12 months. Effective the same dates, the indexing factor applicable to family allowances and old age security pensions will also be limited to 6 per cent and 5 per cent for the next 2 years.
However, Mr. Speaker, I am glad to note that the Minister of Finance has protected low income families by increasing by $50 the child tax credit for the 1982 taxation year which will continue to be fully indexed. This increase will raise the credit from $293 to $343 for each child. I believe that this decision is much fairer than that made by the Parti Quebecois government in Quebec on January 1, which was to grant no increase in family allowances, and I would like to remind my Progressive Conservative friends in this regard that when they were in power, they had created a committee to remove the universality principle from the family allowance program. Mr. Speaker, I would like to congratulate the minister for protecting senior citizens receiving the guaranteed income supplement in part or in full, which will continue to be fully indexed. Then again the Minister of Finance did not follow the example set by the Levesque government when they decided, on January 1, to index social benefits at 8 per cent rather than the amount of indexing, and in the case of mothers with children to index at 6 per cent only. He provided instead for increases in the federal family allowances and tax credit. I would also tell my Progressive Conservative friends that as far as the basic pension is concerned, they themselves had a committee looking into the abolition of universal pensions, let alone limiting indexation to 6 per cent. They should be honest in their comments today. Also, veterans' pensions will remain fully indexed.
Mr. Speaker, in order to fight inflation, the Canadian government is not content with limiting salary increases. It is also asking federal agencies that regulate the cost of essential goods and services, such as public transportation, public communications and food, to endorse the objects of this budget and to limit price increases. In addition, the Prime Minister will meet tomorrow with provincial premiers. He will ask them to limit price increases as well within their jurisdiction, and I hope they will agree to that.

June 29, 1982
The Budget-Mr. Deans
Mr. Speaker, the budget also includes a new interesting proposal to consider implementing a special program of interest rates lowered by 3 to 6 per cent for buyers of new homes. Mr. Speaker, in conclusion, this budget puts foward significant proposals to fight unemployment and inflation, and I am convinced that all my constituents in my Montreal-Sainte-Marie riding will make maximum use of these new assistance programs. I will make it a duty to help them get more, because I am convinced that Canadians across the country will use the programs made available by the Canadian government, despite the criticism voiced by the Progressive Conservatives and the New Democrats.


Ian Deans: Mr. Speaker, 1 am certainly pleased to have an opportunity to speak on this budget. I will not begin the major part of my speech now since there is only a minute or two left. I wonder if it might be considered ten o'clock in order that I could commence fresh tomorrow.


Some hon. Members:: No.


Ian Deans: Fine. Then let me deal very briefly with the remarks of the hon. member for York-Peel (Mr. Stevens) who devoted much of his time to putting on the record matters which were blatantly unsupportable by the facts. I want to make it quite clear that his comments were not only unkind and unjustified, they were untrue. I would suggest that if the hon. member were to be as honourable as he claims to be, he would be prepared to come into the House and retract many of the statements he made. However, knowing the calibre and quality of much of the comment made by the official opposition, I am quite sure he would not want to do that.
I want to put very quickly, sir, one matter on the record. A lot has been said about the deficit, and it is true the deficit has reached a level which must surely be causing every single member of the House of Commons great alarm. However, if we continue with the policies set out in the budget document presented to us by the Minister of Finance (Mr. MacEachen) on Monday evening, there is no doubt in my mind that the deficit we have today is but a pittance compared to the deficit we are going to have within the next year.



PROCEEDINGS ON ADJOURNMENT MOTION

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

[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, on June 21 I put a question to the Minister of Public Works (Mr. Cosgrove) with respect to an ad
which appeared in the Montreal Gazette on June 19. This was an ad published by the Festival du Vieux Port de Montreal, a federal Crown corporation which reports to parliament through the Minister of Public Works. This ad which was completely in the French language was published in an English-language newspaper, namely The Gazette, in a city where 20 per cent of the population is English speaking.
In my question I asked the minister why this ad was published in French in violation and in contradiction of the Federal Officials Languages Act and in violation of the provisions of the Charter of Rights and Freedoms in those sections dealing with language rights. 1 asked the minister to investigate why this ad had been published in such contravention and in such an insensitive way. I asked the minister what he would do to correct this situation. He responded that he had not been aware of the situation but he felt that it was an insensitive act on the part of those who did it and that he would look into the matter.
Following that answer in the House 1 learned through the press, not directly through my office, that the reason the ad was published only in French is that an English version had not yet been prepared. I do not think that is an acceptable reason. I might point out as well that all other publicity materials published by the federal Crown corporation Festival du Vieux Port de Montreal were also published solely and completely in the French language. I have here an invitation to a reception to announce the summer program of the festival. It is in French only. I have another invitation from Mr. Paul Gerin-Lajoie, president of the Crown corporation, with respect to another opening ceremony, which is completely in French. When the ad was finally put in the Montreal Gazette in English on June 26 a so-called translated ad was printed with some terrible mistakes in the English language. For example they translated the French which read: "Programmation a diviser et a conserver" as "unscrew and save". In other words I was to unscrew this from the Montreal Gazette and save it. I do not believe there is any excuse to violate the federal Official Languages Act in English or in French anywhere in this country.
This is not the first time I have complained about the federal public service in Quebec operating solely in French. I have done so before, and I have complained with respect to billboard programs only in French in parts of Montreal where the population is 80 per cent English-speaking. I have complained about places where federal public servants in Quebec refuse to speak English to English-speaking clients in the city of Montreal. It is my belief that the federal government through its ministers must make clear to the public service in Quebec that we operate in both official languages and that we serve the public in the official language of their choice.
June 29, 1982
[Stage Direction]
In 1977 the federal government made it clear in a published statement that the federal government does not come under the provisions of Bill 101 in Quebec. Bill 101 is a provincial law covering provincial matters and a provincial responsibility. All matters in Quebec that come under federal responsibility are subject to the bilingual provision of the federal law on that subject matter.
I might say that since my question was raised in the House the federal government has published a full page ad in the Montreal Gazette about which I was extremely pleased. This confirmed the federal government's policy on official languages. This ad is titled, "The Government of Canada Serving You in Both Official Languages in Your Area". It sets out all the departments in Montreal and where you can complain if there is any violation of language rights in the Montreal area. That is the sort of policy I want to see but it must be maintained in every area of the public service in Quebec and throughout Canada.
I also want to make it clear that I am not opposed to any measure which will fully protect and help the French language in Quebec flourish. However, one language is not helped by bringing punitive measures against another language, especially a minority language. I might also add that actions such as these by federal civil servants in Quebec are occurring at a time when there is a provincial government which is continually eroding minority rights of English speaking people in the province of Quebec. Therefore, this action, when added to the sins of the other government, are not well received.
I am pleased with this follow-up ad which was put in The Gazette on June 23 setting out our policy on official languages, but I want to urge very strongly that the government ensure that all their directors and top civil servants in Quebec are made fully aware of our policy on official languages in Quebec, and to ensure that the population of that province is served in the official language of choice, be it English or French, and that the same policy be pursued throughout the country with respect to the French language minorities in other provinces.
[ Translation]
Mr. Henri Tousignant (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, I am pleased to be able to reply tonight to the question the hon. member raised in the House on June 21. The minister had promised then to look into the matter. I understand that the minister has asked the officials of the Festival du Vieux Port de Montreal to provide him with detailed information concerning the publication of an ad completely in French in the English-speaking Montreal Gazette. The Festival du Vieux Port de Montreal is a federal Crown corporation which is listed in Schedule C of the Financial Administration Act and which reports to Parliament through the Minister of Public Works (Mr. Cosgrove). It was established in 1981 to update the waterfront in old Montreal.
Adjournment Debate
Its purpose is to promote, administer and develop the waterfront. It must comply with the Government of Canada's official language policy and, as a matter of fact, has always complied with them. It is unfortunate that the ad which was published in The Gazette of June 19 was in French only. This ad was designed to promote the Festival du Vieux Port this summer which was scheduled to begin on June 20. In view of the tight publicity schedule and last-minute changes to the French version, it was decided to publish the ad anyway to make sure that The Gazette readership would be aware of the event. On June 26, as the hon. member has just mentioned the ad was published again, in English this time, in The Gazette and the Ottawa Citizen.
Of course, errors will happen as they often do in French translation. I would also emphasize, Mr. Speaker, that this is an exceptional case, even a unique one. I want to assure hon. members that every effort will be made to ensure that the Canadian government's policy on official languages is strictly adhered to by the corporation of the Vieux Port de Montreal. In conclusion, Mr. Speaker, 1 would take this opportunity to commend the hon. member for Notre-Dame-de-Grace- Lachine East (Mr. Allmand) for his perceptiveness and pay tribute to his continuing vigilance, either in this House or outside. He never hesitates to defend our policy on official languages. I hope he is satisfied with this information.


CANADIAN NATIONAL RAILWAYS-ANNOUNCEMENT OF LAYOFFS. (B) REQUEST THAT MINISTER MAKE REPRESENTATIONS TO CABINET
Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, a few days ago I rose in the House of Commons and asked the Minister of Transport (Mr. Pepin) to assure the 3,000 CN workers who were being laid off that they will indeed be rehired, and that the lay-offs are only temporary. I asked him to advise these workers when they will be rehired. At that time the minister advised that the lay-offs were until October 15, 1982. However, he did not say if they would all be rehired. This only leads to scared speculation, not reassurance.
1 would like to ask the minister a question: if not all of these
3,000	CN employees, 750 of whom live in the Moncton area, are not rehired, where does the minister expect them to find alternative employment? In the Moncton area there is little hope they would find suitable employment because there are no jobs available. Much of the credit for this must go to the federal government.
Many of the actions initiated by this government and by the minister himself have cost the maritimes and the Moncton area thousands of jobs, jobs that are desperately needed and that simply cannot be found. In the past year the government is responsible for terminating the Atlantic Limited with the loss of hundreds of jobs and millions in revenues. This decision was taken on one of Canada's most popular and best used

June 29, 1982
Adjournment Debate
passenger trains. It is responsible for transferring the water quality control out of Moncton to Brampton, Ontario, thereby terminating several more jobs. It is undoubtedly responsible for the odious and questionable decision to close down CFB Chatham. This closure will cost the community 1,500 jobs and $30 million annually in lost revenues. CFB Chatham contributes over 40 per cent of basic employment in the Miramichi region. This is a move that will reverberate all the way to Moncton. This government is also responsible for postponing the multi-million dollar Mitel project.
Now, any hope that had been held to improve the Atlantic economy and relieve the massive unemployment of this region has been shattered by a budget that has completely ignored this rampant problem. The finance minister failed again to find an answer to the severe economic retardation and spiralling unemployment that afflicts Atlantic Canada. This region has the highest unemployment of any region in Canada-14.5 per cent-and it promises to get worse. In fact, all indicators suggest that the recent budget could very well aggravate the unemployment problem.
There is an alternative to these lay-offs; a very feasible and constructive alternative to these unwanted and apparently unnecessarily long lay-offs. The CN employees who are being laid off could well be kept on to maintain and repair the rail equipment and prepare it for the time when business is better. This is a policy supported and advocated by the CN employees who are eager and anxious to work.
A great deal of CN equipment is not being properly maintained and a slow period such as we are in would be an ideal time to repair and maintain the rolling stock as well as the tracks, bridges etc. Three bad derailments have occurred in the past eight months in the maritime region that are directly attributable to the poor condition of either the rolling stock or the beds. Human error was not responsible. These derailments cost millions of dollars in clean-up operations, lost cargo and lost equipment. Those same dollars could better and more safely be used to keep men working to maintain this equipment at peak condition.
If the men were kept working to maintain this equipment CN would be in a better position to handle increased goods when business improves. I trust they will not allow themselves to be caught in a position of having to turn away business because they do not have the equipment needed to handle the job. That is simply bad management.
I have a telegram I received from the New Brunswick Federation of Labour advising me of a motion passed by its brotherhood unanimously condemning plans by CN and CP railways to further extend the length of the earlier announced closure of the main shops. In the telegram the Federation says:
These lay-offs will cause thousands of railway workers across Canada to be unemployed, further compounding an already disastrous unemployment situation. Federal Liberal government support of this action demonstrates a total disregard for the dignity of those workers affected who want to be a productive part of society.
The effects of these lay-offs will undoubtedly compound the problems afflicting the economy. These CN employees are
being told they will be laid off for 13 weeks. That is 3 months and one week. We are talking about three months and one week during which families are required to tighten their belts and live without incomes, whereby additional dollars would be forever lost to the business community. These people want to work; they are proud and independent. They want the 13 weeks of work and the assurance they will all have jobs. I am hoping that the callous and insensitive attitudes offered the Canadian public are not perpetuated in this situation too.
Last night the Minister of Finance (Mr. MacEachen) stole the last hope a great many Canadians had for economic recovery and for new jobs. Economists predict the situation will get worse before it gets better. The nonproductive and avoidable lay-off of 3,000 employees will not help this situation. It will only worsen the predicament.
The Minister of Transport has an opportunity here to aid 750 people in the Moncton area and another 2,300 across Canada in maintaining their jobs, and preserving their pride and dignity, and to keep the economy of these affected regions from becoming worse. I recommend that the Minister of Transport urge CN and CP to put these workers to work this summer maintaining the rail equipment. It is a job that has to be done, one these workers have the expertise to do and one that will allow rail employees the dignity of working and earning a living.
This government also has a responsibility to Canadians to ensure a prosperous economic environment. To borrow the words of the Minister of Finance:
Canadians want to know how we can get our economy growing again, how we can get industry to invest, expand and provide the jobs our people need. There are 1,250,000 among us who are unemployed. Still more are struggling to make ends meet in the face of high inflation and interest rates. We are all suffering one way or another from the recession that is battering our economy. We are all searching for a way out of it.
The minister continued to say that the purpose of his budget was to offer Canadians a way to end the recession and to speed our progress toward recovery through immediate action. As the government elected by Canadians to do the job, the ball is in their court. I suggest they get on with it. Recovery cannot be aided by laying off 3,000 rail employees.
It seems that this government is determined to ride to glory on the backs of pensioners, the armed services, and those productively employed. My position as a Member of Parliament requires that, despite the deaf ears and petrified minds 1 am attempting to appeal to, I must continue to appeal to those minds on behalf of the people of the Atlantic region of Canada.


Mr. Jesse P. Flis (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I compliment the hon. member for Fundy-Royal (Mr. Corbett) for speaking so strongly on behalf of the constituents in that part of the country. However, I would remind the hon. member that Canadian National must compete in the marketplace the same as any private industry.
June 29, 1982

It is faced with the same financial pressures in times of declining business activity as other Canadian companies, whether publicly or privately owned. If, as a Crown corporation, CN is asked to isolate itself from the marketplace, the government would be expected to provide financial assistance, and on a very large scale.
In response to last night's budget, the hon. member's party criticized this government viciously for the deplorable deficits, yet he did not recommend tonight how the government will pay CN to cover these workers. Let us have some constructive suggestions, not just willy-nilly criticisms.
The hon. member is aware, because the minister has pointed out in this House and I have pointed out previously in this chamber, that CN lost $67 million in the first quarter compared to a $70 million gain last year. Revenue tonne miles for the first five and a half months of 1982 were down almost 15 per cent. Carloadings were down 16 per cent at the end of May and 9,500 cars are sitting idle.
It is in this context that CN was forced to take the difficult decision of extending the regular close-down of maintenance shops. I emphasize that it is a close-down. The planned recall date is October 15.
In conclusion, I want to repeat what I and the minister have said, that most workers will be receiving up to 80 per cent of their salaries during the close-down period. I hope the hon. member will look at this particular situation in the context of what the Minister of Finance said last night. Only through the spirit of solidarity and sharing are we going to improve the situation and get these employees back to work.
When the hon. member tries to shoulder the blame on the government, I remind him that in a democratic system of government the opposition is part of that government. The opposition has a role to play, to remind Canadians that we have to put our shoulders together, and work together to bring down this 12 per cent recession to a 6 per cent recovery.


INDIAN AFFAIRS-DELAY IN ON-RESERVE HOUSING PROGRAM. (B) CONSTRUCTION OF SCHOOL AT DILLON, SASKATCHEWAN
Mr. Doug Anguish (The Battlefords-Meadow Lake):: Mr. Speaker, the circumstances I want to bring up this evening have to do with questions I put to the Minister of Indian Affairs and Northern Development (Mr. Munro) on June 16 during question period. As yet I have heard nothing in reply from the minister. I am very concerned. If I cannot get answers to these questions this evening from the hon. parliamentary secretary, I would like him to at least take time to prepare a response very soon on this pressing problem.
The Buffalo River Indian Band in Dillon, Saskatchewan is very concerned about a school which is soon to be built in their community. The band is located in a remote area of northern Saskatchewan. Because of their situation they appealed to the Minister of Indian Affairs and Northern Development, asking that their school be built in accordance with provincial standards. Although it is not the case in all areas of Canada, it is a fact that in Saskatchewan standards set for building schools
Adjournment Debate
are far superior to the federal standard set by the Department of Indian Affairs and Northern Development.
After pressing the minister the band received a commitment that the school would be built according to provincial standards, and as a result these would be a much better facility to meet the needs of the local citizens.
Now that the time for the construction of the new school has come upon us, it is suspected that the minister is being pressured by some department officials to back out of his commitment. Some questions need to be answered and I respectfully ask that they be answered now or fairly soon.
First, will the minister keep his commitment and see that the school for the Buffalo River Band will be built to provincial standards, or at least an updated federal equivalent, which could be the case? This would help many other Indian bands in Saskatchewan as well.
Second, I would like to know when this information will be communicated to the band officials.
Third, if there are any problems, will the minister meet with the band to solve them?
Finally, when will construction of the new school actually commence?
These questions need to be answered, and answered soon, so that the children at Dillon will not have to face another year of going to school in a building in such decrepit condition. Part of the national media last year covered the situation of the parents at Dillon, members of the Buffalo River Band, pulling their students out of school and not allowing them to go back until the government made a commitment to build a school for them. The conditions are very bad in the present school.
I see that my time is quickly passing, so I would like to pose a second question. It is a question dealing with the on-reserve housing program in the province of Saskatchewan. I imagine this not only applies to Saskatchewan but extends throughout Canada. I am familiar with the Saskatchewan situation and this particular case. Of 505 units allocated to Saskatchewan this year, none has been started as of yet. The reason is that circular "J-l" was introduced and is being very strictly enforced, at least to this point in time. I would like to ask the minister, to have the "J-l" circular withdrawn, or at least have the rules relaxed, so that many bands-some of the bands, or all of them-can meet the criteria that will allow them to begin their housing projects now. It is very unpleasant for anyone with experience in trying to build a house during the winter months, to meet the very stringent budget the Department of Indian Affairs and Northern Development sets for the Indian bands.
I would like to point out in respect of the school situation for the Buffalo River Band, that the province of Saskatchewan set up the Department of Northern Saskatchewan a number of years ago, in the early 1970s. As a result, communities of similar size and structure, not on reservation land, were built to great standards by the Department of Northern Saskatchewan. They have never at any time had better educational

June 29, 1982
Adjournment Debate
facilities. They have sewer and water in almost all of their housing projects. They are modern communities in which people are very proud to live.
That is not so on Indian reserves in northern Saskatchewan, in particular, and in the entire province in general, and we would like to see the standards of reserves raised significantly above what they have been to this point. It seems that the department is getting more and more heavily structured and leaning away from allowing Indian people to control their own destiny. It seems they have become dependent on the federal government and dependent upon a welfare handout sytem. They have little hope of building their economies or the economic bases on reserves so that they can seek some kind of self determination and be responsible for their own affairs. I believe the present ratio is about 33 to one; there is one federal government employee for every 33 treaty Indians in Canada. That number is growing all the time. We must start moving away from that and begin putting more control of what happens to treaty Indian people on their lands into their own hands.


Jesse Philip Flis: Mr. Speaker, in the absence of the Parliamentary Secretary to the Minister of Indian Affairs and Northern Development (Mr. Chenier), let me say that I will not have time in the three minutes allotted to me to respond to all the hon. member's concerns, but I will address his last concern first, that is, his concern about "J" circulars.
The Minister of Indian Affairs and Northern Development (Mr. Munro) has been asked to suspend his department's "J" circulars which relate to the Indian on-reserve housing program. The reason given for this request is to allow the housing
program on Indian reserves in Saskatchewan to begin. First let me say there is nothing in the "J" circulars themselves which prevents the housing program from beginning in Saskatchewan or, for that matter, in any other region of this department.
Until very recently, the departmental guidelines concerning the Indian on-reserve housing program were contained in the department's circular No. 57. That circular has been updated and included in a series of departmental circulars with alphabetical designations. The designation for community services and housing is "J". This circular reflects the government's concern about Indian on-reserve housing and that the performance of the housing program on Indian reserves meets its targets.
In these circulars Indian bands are asked to identify all the funding sources to complete a housing project before appropriated capital is released to the band. This will avoid the situation where housing projects end up underfunded, resulting in incompleted houses. This identification of sources has been a requirement of the program for some time. This position was discussed with Indian leaders from Saskatchewan during the week of June 14. Meetings are being held now, and will continue in the near future, to familiarize departmental staff and Indian bands with these new program guidelines.
I recommend that the hon. member write directly to the minister about the particular band he was discussing tonight.


Mr. Deputy Speaker:: Order. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at two o'clock in the afternoon.
At 10.29 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, June 30, 1982