1982-07-08

ROUTINE PROCEEDINGS

[Stage Direction]
[English)

Mr. John McDermid (Brampton-Georgetown):: Madam Speaker, whereas those who sponsored immigrants prior to 1967 remain responsible for the immigrants for life, and whereas those who sponsored family members between 1967 and 1978 remain responsible for them for life, and whereas those sponsored after 1978 remain the responsibility of their sponsor for ten years, it is obvious that a great discrepancy has been created for new Canadians and their sponsors prior to 1978 who are not being treated equally before the law. Therefore I move, seconded by the hon. member for Edmonton North (Mr. Paproski):
That the government give immediate consideration to making the ten-year responsibility period retroactive for all immigrants sponsored prior to 1978.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


DEMAND THAT THREE BYELECTIONS BE HELD-MOTION UNDER S O. 43
Mr. John Bosley (Don Valley West):: Madam Speaker, the Prime Minister (Mr. Trudeau) has a double standard regarding the calling of byelections, to wit, two minutes for his friends and as long as 16 months for everyone else. In contrast, the government of Ontario has followed the sterling example set by the Clark government and speedily called the byelection in York South, an opposition-held riding. Therefore I move, seconded by the hon. member for Cambridge (Mr. Speyer):
That the House demand that the Prime Minister today follow the example set by the Clark and Davis governments and announce dates for byelections in Timiskaming, Leeds-Grenville, and Broadview-Greenwood. And further, that, should the Prime Minister refuse to do so, the Liberal associations in those ridings be urged to ensure speedy elections by nominating Martin Goldfarb, Michael Pitfield, and Arthur Erickson.


Some hon. Members:: Oh, oh!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
Mr. Jim Fulton (Skeena):: Madam Speaker, I too rise under the provisions of Standing Order 43. Liberal and Conservative popularity has dropped again this week due to their common policies of protecting banks, oil companies, and high interest rates. It is a well-known fact in Canada-except amongst the media and a few Tories-that the Conservatives support the policies put forward by the Liberals in Ottawa. There can be no clearer indication of this support than in the actual voting record on legislation which stands as of this date: Conservatives with the Liberals 33 times, NDP with the Liberals only 19 times.


Some hon. Members:: Oh, oh!


James Ross Fulton: They do not like the truth, Madam Speaker.
Therefore I move, seconded by the hon. member for Saskatoon East (Mr. Ogle):
That the great pretender, the Leader of the Tory Party, rise in his place today with the unanimous consent of this House and explain to the people of Canada why the Tories have voted to keep the Liberals in office on 33 occasions this session alone.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

July 8, 1982


HAZARDOUS SUBSTANCES
Mr. Jean-Guy Dubois (Lotbiniere):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
Whereas Bill C-109 which concerns victims of urea formaldehyde foam insulation must be passed before UFFI victims who qualify can obtain the $5,000 federal grant; whereas many victims have been making representations to a number of members of this House in order to have the bill passed; and whereas the New Democratic Party has been refusing to allow the debate on second reading and yesterday refused to support a motion concerning this bill and is therefore still ignoring the urgency of this legislation, although it will probably give its consent today, I therefore move, seconded by the member for Beauce (Mr. Lapointe):
That the House, at its next sitting, consider and adopt Bill C-109 at all stages with one speaker per party, and that to do so, the House sit outside its normal hours, namely, during the lunch or dinner hour.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Joe Reid (St. Catharines):: Madam Speaker, Lech Walesa has been held in internment since the military takeover in Poland last December when martial law was proclaimed and the Solidarity movement suspended. About 3,000 Poles demonstrated peacefully in Poznan on the anniversary of the 1956 disturbances, requesting his release and thereby showing that Solidarity in Poland is still alive. I therefore move, seconded by the hon. member for Niagara Falls (Mr. Mac-Bain) and the hon. member for Hamilton Mountain (Mr. Deans):
That in the interest of the greater peace and security of Poland, this House urge the Polish authorities to release and restore freedom of movement to Solidarity leader, Lech Walesa.


Madam Speaker:: This motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, during the past few weeks there have been two hostage-taking incidents in the city of Saskatoon which have been successfully resolved by the courageous and efficient efforts of a dedicated Saskatoon city police force. In light of the alarming growth of hostage-taking incidents across Canada recently, 1 move, seconded by the hon. member for Kindersley-Lloydminster (Mr. McKnight):
That this House express its appreciation to the Saskatoon city police for its effective handling of the recent hostage-taking incidents, and voice its endorsa-tion of appropriate and continued support by governments of the specialized training required by the police forces of Canada in this delicate area.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HOUSING
Mr. Roger Simmons (Burin-St. George's):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. The Housing and Urban Development Association of Canada has recently responded positively to the initiatives contained in the budget to stimulate housing throughout Canada, an attitude which clearly exemplifies the sort of positive approach necessary for all Canadians to take in order to ensure that inflation in Canada is brought under control. I move, seconded by the hon. member for Cape Breton-The Sydneys (Mr. MacLellan):
That this House commend HUDAC for its positive response and express the hope that this public statement will encourage others to work together in cooperation with all levels of government in order to bring down the rate of inflation.
July 8, 1982


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE PRIME MINISTER
Mr. Vince Dantzer (Okanagan North):: Madam Speaker, 1 rise to move a motion under the provisions of Standing Order 43. During the last election the Prime Minister promised to keep the growth of government spending to less than the growth rate of the Gross National Product. The Prime Minister broke this promise when his first budget increased government spending by 24 per cent. The Prime Minister again broke his promise this year when government spending increased 20 per cent, for a two-year staggering total of 44 per cent, twice the rate of increase of the Gross National Product. Therefore I move, seconded by the hon. member for Okanagan-Similk-ameen (Mr. King):
That this House demand the Prime Minister stop the flim-flam and start acting with reason, with responsibility, and even with sanity, and immediately reduce this uncontrolled spending growth to an increase of 6 per cent as he is asking the poor and elderly of this country to do.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HAZARDOUS SUBSTANCES
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, I rise on matter of urgent and pressing necessity and seek unanimous consent under the provisions of Standing Order 43 for the following motion. The NDP and the UFFI home owners in Canada favour setting up a special parliamentary committee to investigate outstanding questions on the UFFI issue. The NDP and the UFFI home owners in Canada support clarification of the sources of additional funding and commitments that will be used to tap those sources. The NDP and the UFFI home owners in Canada support the calling of one or more meetings of the advisory council to clarify commitments. The NDP and UFFI home owners in Canada recognize that there is sufficient time left in this session to clarify the government's position on additional funding. Therefore I move, seconded by the hon. member for Skeena (Mr. Fulton):
That the government and the official opposition recognize their responsibilities to home owners with UFFI insulation and that the government and official opposition stop trying to stampede the UFFI bill through the House until the minister's position on extra funding and on the special parliamentary committee is made abundantly clear.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


LABOUR RELATIONS
Mr. John Evans (Ottawa Centre):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas the Prime Minister will be meeting with senior labour officials and members of the Canadian Labour Congress tomorrow to discuss economic matters, and whereas the Leader of the New Democratic Party has already indicated to the House his very negative attitude toward this meeting and its outcome, I move, seconded by the hon. member for Burin-St. George's (Mr. Simmons):
That this House advise the hon. member for Oshawa that, rather than continually sow the seeds of discontent and dissension, the NDP should show some responsibility to the Canadian people and use their good offices to encourage the labour leaders to meet and discuss the government's initiatives in good faith.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CRIMINAL CODE
Mr. Arnold Malone (Crowfoot):: Madam Speaker, my motion under the provisions of Standing Order 43 is not partisan, and I am sure it will receive the support of all members. Since many police forces are hesitant to lay charges of assault in instances where women have been beaten by their husbands, and their frequent failure to lay charges places a heinous burden on a wife who has to ascertain whether or not it is prudent for her to have charges laid, and since the allparty parliamentary committee on wife battering recommends "that police regularly lay charges in wife assault cases", and because the police department of the City of London, Ontario, has adopted a very commendable policy of laying assault charges in all wife battering cases where they have "reasonable and probable grounds", I therefore move, seconded by the hon. member for Wetaskiwin (Mr. Schellenberger):

July 8, 1982
Oral Questions
That this Parliament encourage all Canadian police forces to establish a practice of having the police regularly lay charges in instances of wife beating, as they are inclined to do with any other case of common assault.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.


Hon. Sinclair Stevens (York-Peel):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. Would the minister indicate to the House whether the government, or any agency of government, has received a request from the Dome Petroleum group with respect to additional financing assistance, additional to the $100 million which it has already received? If they have received this request, would the minister indicate in what form the government might respond to the request? Would it be a loan guarantee, a straight loan, or further equity financing?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, the government was approached some time ago both by Dome and by the banks financing some of the loans to Dome Petroleum, which have asked that there be consultations. These consultations have been going on at the official level for several weeks, but I have nothing further to announce in that regard.

Ferguson like amount, and the possible giving of hundreds of millions of dollars of assistance to Dome Petroleum, it would appear that if you are big enough you get some help from the government, but if you are too small it does not want to hear from you; you just go bankrupt.
[ Translation]


Hon. Charles Lapointe (Minister of State (Small Businesses and Tourism)):: Madam Speaker, I can see why the hon. member is asking this question, because when the government gives loan guarantees to large corporations such as Massey-Ferguson or Chrysler, these transactions get the headlines. However, I can inform the hon. member that the Small Business Development Bond program, which has a loan guarantee mechanism or component, applies in most cases to small businesses, and this goes for both the grant and the loan guarantee components. Thus, the same mechanisms apply to small and large businesses, with this difference, that loan guarantees given under the Small Business Development Bond program to small businesses do not get the headlines.


CORPORATE AFFAIRS
Sinclair McKnight Stevens: Madam Speaker, if the government is interested in making headlines, perhaps I could direct my next question to the Minister of Consumer and Corporate Affairs. Consolidated Computers has cost the government $125 million to date. It has now been announced that there will be no legal proceedings taken with respect to that fiasco. Would the Minister of Consumer and Corporate Affairs indicate when there will be a full disclosure to the House of what actually transpired, and perhaps a reference to an appropriate committee, so that the Canadian public can see what, in fact, is the mismanagement in which the government engaged?


SMALL BUSINESS
Sinclair McKnight Stevens: Madam Speaker, my supplementary question is directed to the Minister of State for Small Businesses and Tourism. In view of the fact that there are some 900 small businesses going bankrupt in the country every month, would the minister indicate what exactly are the criteria used by government in deciding who does get aid and who does not get aid? Bearing in mind the bail-out of Consolidated Computer to the tune of $125 million, the Massey-
[ Translation]


Charles Lapointe: Madam Speaker, the hon. member is aware that this matter has been referred to the Minister of Justice, who asked a private law firm to review the case. The law firm has advised the minister that there were no grounds for legal action. Now, as the hon. member is also aware, the President of the Treasury Board appeared before the committee of the House to answer questions regarding Consolidated Computer.

July 8, 1982


TRANSPORT
Mr. Pat Nowlan (Annapolis Valley-Hants):: Madam Speaker, in the absence of the Minister of Finance my question is for the Minister of Transport. In the cabinet committee this morning was there consideration of the Maislin request for assistance to the tune of $35 million to $50 million? If so, has a decision been made, and will the minister please assure the House, contrary to what the Minister of State for Small Business said, that there will be amendments to include all trucking firms and/or service industries for such help when they are in dire straits?


Hon. Jean-Luc Pepin (Minister of Transport):: No, Madam Speaker, a decision has not been made in the Maislin case. I am aware that a decision is to be made in the coming days, or approximately a week. When a decision is made, my hon. friend will be informed.


ECONOMIC CONSIDERATIONS
John Patrick (Pat) Nowlan: Madam Speaker, in the consideration of the Maislin request for assistance which will break new ground for government loan guarantees to service industries or trucking companies, will the minister assure the House that economic factors will be the deciding issue rather than Liberal political fortunes in and around Montreal?


Jean-Luc Pepin: Madam Speaker, the answer is obviously yes. Economic matters will be the only ones considered.


FINANCE
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, my question concerns the government's 6 per cent dream and is therefore directed to the Acting Prime Minister. In his budget speech the Minister of Finance stated very clearly that the government's measures to bring down inflation were not directed at any one particular group. However, using the government's own figures, we find that low-income earners will see their taxes increased by as much as 50 per cent, whereas those earning $100,000 will see only a 3 per cent increase, and if you are earning $200,000 you will actually have a decrease in taxes. Is this the government's idea of fairness and equity?


Jean-Luc Pepin: Madam Speaker, the budget papers contain on page 26, if my memory serves me correctly, an analysis of the effects of the budget on different groups of people. For example, for married individuals with two dependants under age 18,
Oral Questions
who are earning $10,000, increase disposable income as a result of the budget by $41, which is 0.4 per cent of their disposable income. If the income is $25,000, the charge of the budget to such people is $72, which represents a decrease of 0.3 per cent of their disposable income. It seems to me, and to all of us here, that this is a relatively low price to pay for getting out of the recession and inflation in which we are now.
The answer is in the budget papers if my hon. friend would like to consult them. I am sure he could find the page himself.


Nelson Andrew Riis: The facts actually speak for themselves. If an individual earns more than $200,000, he or she will actually receive a $ 10,000 decrease in taxes as a result of this particular budget.


Some hon. Members:: Shame!


CALCULATION OF GOVERNMENT REVENUE
Nelson Andrew Riis: Madam Speaker, my supplementary question to the Acting Prime Minister again refers to the budget which points out that if the limits to indexation are at 6 per cent the government will receive an extra $1.3 billion in revenue. That assumes, of course, that inflation will be higher than that in order to make that revenue possible. Is that not admitting that the 6 per cent world will not be achieved if the government is actually counting on making $1.3 billion because of it?
[ Translation]


Hon. Pierre Bussieres (Minister of State (Finance)):: Madam Speaker, I would say to the hon. member that the objective of the government is to ensure the economic recovery by bringing the rate of inflation down to 6 per cent. In my opinion, the hon. member ought to carry on with his calculations and he would realize indeed that if we do manage to lower the inflation rate to 6 per cent or even less, there would then be a significant upturn of the economy, higher government revenues, lower interest rates as well as a reduced deficit. That is the appeal for solidarity and economic recovery which the Minister of Finance made in his budget speech and which the government is now promoting.


BUDGET FORECAST OF INFLATION RATES
Nelson Andrew Riis: Madam Speaker, it is probably because of this kind of rhetoric, as opposed to addressing the serious economic ills of the country, that we find the headlines today predicting an economic collapse in Canada. My supplementary question to the Acting Prime Minister is with regard to the 6 per cent guideline. The budget presumes that an 11 per cent inflation rate will occur in 1983 and a 9 per cent rate in 1984. Is this not in itself an admission that the 6 per cent goal will not be achieved and that it will

July 8, 1982
Oral Questions
therefore permit the Prime Minister the opportunity to bring in complete wage controls?


Pierre Bussières: Madam Speaker, I would suggest that the hon. member refer to yesterday's oral question period and heed the appeal made by the government to all economic agents instead of attempting to create or aggravate the climate of uncertainty or to spread fear. All together we need to show courage, energy and determination to prove to the people that we can present a common front to restore a favourable economic climate. We will do that if we succeed in lowering the rate of inflation, if we show solidarity, a spirit of sharing and especially courage, instead of hiding our heads in the sand and withdrawing before false fears, as the hon. member is doing.


TRANSPORT
Mr. Scott Fennell (Ontario):: Madam Speaker, my question is directed to the Minister of Transport with regard to the Lakespan Corporation which is 50 per cent owned by CN Marine and 50 per cent by Rideau Shipping. They discontinued operation on April 20 on the basis that this was a suspension for review. Subsequent to that date they fired their employees, abandoned their office, and cancelled their telephones. Madam Speaker, I have to get to my question. There are nearly 100 small creditors out there with $700,000 of debt owed by this corporation. The shareholders who own the corporation are trying to sell the boat before July 23 to recoup their investment before looking after the small business people. This leaves them out in the cold.


Madam Speaker:: Order. Does the hon. member really think it is reasonable to have such a long preamble?


Thomas Scott Fennell: I will ask my question, Madam Speaker. Is the minister aware of the action taken by one of the Crown corporations for which he is responsible?


Jean-Luc Pepin: Madam Speaker, I am not aware of the case, but I shall immediately get in touch with my hon. friend and he will have the opportunity to complete his expose.


POSITION OF MINISTER
Thomas Scott Fennell: Madam Speaker, that shocks me. The minister should be aware of the fact that there is an admiralty writ on a boat owned by the Crown corporation. Does he encourage Crown corporations to be so blatantly unethical in transactions with small business?


Jean-Luc Pepin: Madam Speaker, 1 sincerely believe that if the hon. member had wanted to get a full answer from me on this question, with his knowledge of the scope of the Department of Transport, he would have had the generosity, the kindness and the civility to give me notice of the question he intended to ask.


Some hon. Members:: Hear, hear!


Mr. Clark:: What nonsense! What cowardly nonsense!


INDIAN AFFAIRS
Mr. Fred King (Okanagan-Similkameen):: Madam Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. What immediate and effective action is the minister undertaking in direct response to the urgency noted, first, in the unanimous recommendation of the standing committee for an independent inquiry into the affairs of the Westbank Indian Band and of the Pacific Region office in Vancouver, second, in the many grievances expressed in letters and briefs to the minister concerning the same, third, in the recommendation of his own departmental officials for an immediate and thorough four-point investigation and, fourth, in the interest and urgings of the premier of British Columbia?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, 1 am fully aware of the concern of the hon. member and of many of his colleagues from British Columbia with respect to the actions of Chief Derrickson and the band council of that reserve. There is no question but that it has aroused great concern. We are now conducting an investigation, concerning which 1 have already spoken with the hon. member yesterday, and I will apprise him of the full details of that investigation as it proceeds.
As I have already told the hon. member, I am inviting Chief Ron Derrickson down here to go over some of the allegations which have been made with respect to the way he and the band council handle matters there. I have also indicated to the hon. member that I will be pleased to consult with him with respect to that particular meeting with Chief Derrickson.


Frederick John King: I would like to say that there are aspects of this review that could be ongoing right now, before the meeting with the chief.


REQUEST THAT BRITISH COLUMBIA AND MANITOBA REGIONAL OFFICES BE AUDITED
Frederick John King: My supplementary question is for the same minister, Madam Speaker. Is the minister willing to follow the recommendations of the officials in his department, namely, to close the B.C. and Manitoba
July 8, 1982

regional offices for three months for the purpose of conducting an external audit?


John Carr Munro: Madam Speaker, I will have to raise that particular matter further with the hon. member a little later. If he is asking us to do something about the Westbank situation, I do not know whether the resolution of that matter pertains to closing all the offices of the department in the Province of British Columbia. I will be pleased to look into it.


EMPLOYMENT
Mr. Lloyd R. Crouse (South Shore):: Madam Speaker, 1 wish to direct my question to the Minister of Employment and Immigration. With some million and a half Canadians unemployed, Canadian registered ships are still operating out of Canadian ports, with licensed engineers and other senior officer personnel coming from outside Canada. I therefore wish to ask the minister is there a shortage of properly certified engineering and navigation officers in Canada and, if so, is the minister giving any thought to designing a program whereby unemployed Canadian ships officers, many of them living in my riding, would be placed as observers on supply vessels, oil rigs, tankers, icebreakers and bulk carriers, giving them experience and requiring companies to hire them when openings exist following their certification?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, I would like to point out to the hon. member that last December we announced, as part of a general program of measures to deal with the current economic situation, the basic restriction on the application of foreign workers who want to come to Canada, and there is no longer the possibility of foreign workers coming into Canada on open applications. They must now have job validations demonstrating that there is absolutely no Canadian available for those jobs anywhere across the country. That particular program has been in place since early December. I would be very pleased to send the hon. member details of it because I think it is a direct answer to the question about which he is concerned.


TRAINING OF OFFICERS TO COMMAND SHIPS AND MARINE DRILLING RIGS
Lloyd Roseville Crouse: Madam Speaker, my supplementary question is directed to the same minister. Since Petro-Can and Bow Valley Resources are presently building oil rigs and a supply vessel in Marystown, Ranger Oil plans to charter an oil rig for five years, Husky Oil is constructing six supply vessels for 1983, Gulf Canada is bringing a fleet into the Arctic during 1983-84, and Balder offshore and K. D. Marine of Halifax are planning to bring in more supply vessels during the next year, I would like the minister to tell me what
Oral Questions
steps he is taking to make certain that Canadians are trained to command these rigs and ships.


Lloyd Axworthy: Madam Speaker, I thank the hon. member for that supplementary question. It gives me the opportunity to point out to him and to other hon. members of the House that the legislation establishing a new National Training Program was given Royal Assent last evening. That means that we can now put over $1 billion into new training programs across Canada. Part of that program is specifically designed to aid the whole area involving the development of highly trained engineers and technicians in the marine industry. We have already held discussions with a number of marine colleges, both out west and on the east coast, to help them buy new equipment and facilities so that we can ensure that Canadians will be trained for those jobs of the future.


ASSISTANCE TO EASTERN REFINERIES
Mr. Maurice Harquail (Restigouche):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. On May 31 of this year the minister announced that the Canadian government would be willing to consider providing financial assistance to eastern refineries in order to increase the market for western crude oil which would otherwise be shut in. Today, can the hon. gentleman officially inform this House and all Canadians whether such arrangements have been finalized with the eastern refineries and what the benefits will be to Canada in terms of oil costs and our balance of payments?


Charles Joseph Clark: Order!


Maurice James Harquail: Exactly how much will it represent to the Canadian economy?


Some hon. Members:: Hear, hear!


Marc Lalonde: Madam Speaker, the government recently
announced a number of steps to reduce the quantity of shut-in oil in Canada. In May and June there has already been a very, very substantial reduction in shut-in oil. As a matter of fact, at the end of June the quantity of shut-in oil was well below historical levels. We have reason or good cause to believe that the problem of shut-in oil will be very substantially taken care of by the latter part of this year. We are holding discussions with the refiners in eastern Montreal to ensure that they will take more Canadian oil. We have already reached an agreement with Irving Oil whereby Irving Oil will purchase 31,000 barrels per day of Canadian oil, the net result being a savings of about $500 million in the petroleum importation payments, benefits of about a quarter million dollars a day in royalties to the government of Alberta and about a million and a quarter

July 8, 1982
Oral Questions
dollars a day in benefits to Canadians, particularly in western Canada, in terms of additional revenue and work.


Some hon. Members:: Hear, hear!


PENSIONS
Mr. Neil Young (Beaches):: Madam Speaker, my question is directed to the Minister of National Health and Welfare. Last week the minister told the House that, as a result of the deindexation of old age security benefits, pensioners would lose a mere $55 in 1983. Now that the minister has had an opportunity to examine and study the budget in detail, would the minister confirm for this House that the net loss of purchasing power of pensioners over the next two years will, in fact, be four times what the minister told the House last week-


Marc Lalonde: Nothing, if inflation is at 6 per cent.


Neil Young: -and that the 6 per cent dream world that the government is trying to promote will actually be an economic nightmare for those pensioners?


Hon. Monique Begin (Minister of National Health and Welfare):: Madam Speaker, I do not recall having said this in the House, but 1 said last week, and 1 will repeat it here, that in 1983 pensioners not in need, those who receive only the basic old age pension, less than half the pensioners in Canada, will receive increases in their pensions, but not as much as anticipated. That will be equal to a loss of anticipated increase of $55. In a few days they will get $239 for this month, and next January they will get $249. So, I cannot answer the question of the hon. member positively.


QUERY RESPECTING PENSION REFORM
Neil Young: Madam Speaker, my supplementary question is directed to the same minister. Anyone who has studied the budget knows that it is not $55; these people's real incomes will be reduced by over $230.
For the last 18 months the minister and other members of the cabinet have been touring the country raising expectations among seniors about pension reform. If pension reform means cutting incomes for seniors, that indicates the minister has no clout in the cabinet and should resign.


Monique Bégin: Madam Speaker, the cabinet is fully committed to pension reform. The hon. member does not seem to realize that the budget is proof of that. The majority of pensioners in Canada will get double indexing. All those who receive the supplement will get double indexing to make sure they do not lose a penny. They will see the full value of their dollar protected. We have always said that we would target for those most in need, and we will continue to do so.


FINANCE
Mr. Don Blenkarn (Mississauga South):: Madam Speaker, my question is directed to the Acting Prime Minister. The Acting Prime Minister will know that both the current Auditor General and the former auditor general have said that the country faces imminent economic collapse unless the government takes decisive action with respect to its deficits. Indeed, the former auditor general has suggested that government expenses be priorized into essential expenses, desirable expenses, and non-essential expenses. Would the Acting Prime Minister, together with the President of the Privy Council, appoint a special committee of this House to priorize government expenses?


Jean-Luc Pepin: Madam Speaker, the position the ex-auditor general has taken is exactly the same position as the one the government has taken. We agreed that the present situation is serious, and we presented to Canadians a real challenge in the budget which the Minister of Finance introduced the other day.
On the subject of selectivity of federal government expenditures, I have been in committees regularly in recent years. I have regularly listened in the House, and I have not heard anyone suggesting to me as Minister of Transport that there should be cuts. As a matter of fact, each time I come out with something dramatic, be it with regard to VIA, coastal services in Newfoundland, or some other matter, hon. members are extremely reluctant to agree with this approach. If we all were more responsive to the message of reducing federal government expenditures, I suggest that would make life easier, at least for the Minister of Transport.


Sinclair McKnight Stevens: What about Mirabel?


PROCEDURE IN DETERMINING PRIORITIES
Donald Alex Blenkarn: Madam Speaker, 1 am pleased the Acting Prime Minister at least recognizes the problem. Yesterday the Prime Minister suggested that the Public Accounts Committee could inquire into this matter, but the Acting Prime Minister will know that the Public Accounts Committee is limited in its inquiries to past expenditures and past deficits. I wonder what can be done with respect to current expenses.
The situation has changed dramatically in the last eight months with respect to the deficit figures in the previous budget. What proposals do the Acting Prime Minister and the government have with respect to going over existing expenditures approved in the estimates already with respect to this
July 8, 1982

year, and priorizing those expenditures so that when changes have to be made in the expenditure program this House will have real input into those changes?


Jean-Luc Pepin: Speaking as a minister, Madam Speaker, the process of priorization is with us with a vengeance at this moment. We have limited resources and, obviously, choice is paramount in our minds.
On the subject of the committee work of the House of Commons, every budget of every department goes before a committee, and it is really the responsibility of the committees to force members of cabinet to justify their expenditures.


RAILWAYS
Mr. Bill McKnight (Kindersley-Lloydminster):: Madam Speaker, 1 would like to put a question to the Acting Prime Minister. The Gilson report on grain transportation recommends increasing costs to grain producers in western Canada by 15 per cent a year, a total of 45 per cent in the next three years. Could the minister inform producers and members of this House whether 6 per cent and 5 per cent will apply to the movement of grain in western Canada, or is that an exemption because he feels producers have more money than his department?


Jean-Luc Pepin: Madam Speaker, my hon. friend has not read the fine print of the Gilson report. If he had done so, he would know that in the first year of implementation there is no increase to the farmer at all. He would also know that in the second year the increase is at a level of 14 per cent for transportation costs, which represent 2.5 per cent of the cost of production of a bushel of wheat. In due course we will have to address the problem of the second year.


TWO-PRICE WHEAT SYSTEM
William Hunter (Bill) McKnight: Madam Speaker, with respect to the costs which will have to be borne by the producers of grain in western Canada, can the Acting Prime Minister, who is responsible in this House for the Canadian Wheat Board, inform the House whether he has had an opportunity to review the two-price wheat system, which will expire at the end of this year, which provides a minimum of $5 and a maximum of $7 a bushel? If he has had an opportunity to review that, would he inform the House whether this will be increased to keep pace with increasing costs or whether it will be dropped and the producers made to suffer?
Oral Questions


Jean-Luc Pepin: Madam Speaker, we have not reviewed the two-price wheat system yet.


HAZARDOUS SUBSTANCES
Mr. Jack Burghardt (London West):: Madam Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. In light of the refusal on the part of the NDP on two occasions to agree to passage of Bill C-109, I wonder what the minister can do to facilitate the operation of the program to provide funds to UFFI home owners who are experiencing difficulty.


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs):: Madam Speaker, it is clear that it is urgent that we pass the bill, which in fact would provide for three things. First, it would authorize the government to pay home owners a certain amount of money. Second, the money they receive would be non-taxable. Third, the home owner who receives this money would retain the right to sue the government if he wanted to sue the government at a later date.
I hope through consultations among House leaders, and with my critic in the official opposition, the hon. member for Hamilton-Wentworth, and the hon. member for Comox-Powell River, we will be able to arrive at an agreement for speedy passage of the bill. Indeed, the Conservatives have already indicated that they have no more speakers to discuss the bill at second reading, and I hope the NDP will have no more than one or two speakers and then that we could take the bill to committee, where 1 am prepared to sit morning, afternoon and night so that we could report the bill and allow home owners to receive the money they certainly deserve.


Some hon. Members:: Hear, hear!


TELECOMMUNICATIONS
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, 1 would like to return to the wonderful world of 6 per cent and address a question to whichever minister is apologizing for the Minister of Finance today. The Minister of Finance has repeatedly sent smoke signals to regulatory bodies such as the CRTC that they should hold the line at 6 per cent, yet the Minister of Communications is quoted as backing Ma Bell's application for a whopping 25 per cent increase in residential telephone service. To whose signals should the CRTC listen?


Hon. Francis Fox (Minister of Communications):: Madam Speaker, since my name was taken in vain by the hon. member, I would like an opportunity to reply. At no point have I endorsed an increase for Bell Canada of that nature. My

July 8, 1982
Oral Questions
response in answer to questions is to the effect that the Minister of Finance in his budget indicated quite clearly that in the area of public communications the regulatory organizations responsible to Parliament would be expected to follow the 5 per cent and 6 per cent guidelines unless there were "exceptional circumstances". That was indicated in the budget. I would fully expect that that guideline, which is in the budget, would be followed by the various regulatory agencies of the governments.


Mark Willson Rose: Madam Speaker, I am glad that the minister has had the chance to clarify his remarks because they seem to contradict what I read in the press.


GOVERNMENT POLICY ON REGULATED PRICES
Mark Willson Rose: The minister defended the Bell hike, on the grounds that no company could be held to 6 per cent when it could get 16 per cent by investing in bonds. Given that rationale, there appears to be no authority and no ceiling on any price regulated by the federal government.
1 should like to ask whichever minister will respond, how we can really believe that the government is serious or that it intends it own regulatory bodies to hold the line. Who is going to believe that in the country? No one.


Francis Fox: Madam Speaker, once again, it is quite clear that under its statutory obligation the CRTC must receive rate applications from Bell Canada, must hold hearings on those applications, and must come to a decision on what rate of return ought to be allowed to the company. It is also clear that there is an appeal from the decision of the CRTC to the federal cabinet. If the cabinet feels that the rate increase awarded by the CRTC is not justified, it can return the matter to the CRTC or indicate which way the decision ought to go.


IMMIGRATION
John Horton McDermid: Madam Speaker, I have a question for the Minister of Employment and Immigration. The sponsors of immigrants before 1967 have to be accountable for them for life. The same applies to people who came in under the family sponsorship program before the new act went into effect in 1978. Sponsors of immigrants after 1978 are only responsible for them for ten years. Would the minister consider making such sponsorship retroactive so that all sponsors are accountable for immigrants for a ten-year period?


Lloyd Axworthy: Madam Speaker, I appreciate the hon. member's question which obviously relates to a case which has
come to light recently in the Toronto area, regarding an application for welfare under provincial rules. I would point out to the House, first of all, that eligibility for welfare is a provincial decision and has very little to do with any decision being made under the federal jurisdiction. It is within provincial rights and responsibilities.
The Immigration Act provides that sponsorship is very much a moral obligation for those who have undertaken to sponsor a relative. In effect, it is a special privilege to come into this country under relaxed criteria, but sponsor responsibility is not legally enforceable under the old act. It is enforceable under the 1978 act. A judgment has to be made by the municipality as to whether it will consider the provisions of the 1978 act as part of the criterion for eligibility.


GOVERNMENT POSITION
John Horton McDermid: Madam Speaker, the provincial governments and municipalities are hanging their decisions in this particular case and, I understand, in other cases, on the agreement that was signed by the sponsors pre-1967 and pre-1978. Is the minister telling the municipalities that they should not hang their decision on that, and that the ten-year sponsorship applies to everyone in Canada at the present time?


Lloyd Axworthy: Madam Speaker, I am indicating that the whole question of the enforcement of the sponsorship provisions is only legally enforceable under the provisions of the 1978 Immigration Act. It was not established in any statutory form under the previous immigration legislation. We do not therefore have the power to enforce it, other than by whatever persuasion or moral suasion that can be applied. We are saying to the municipalities that in this case their judgment on who is eligible for welfare benefits should be based upon the usual criteria applied. There is, however, obviously a moral obligation on the part of those families that undertook sponsorship to adhere to their undertaking.


AGRICULTURE
Mr. Tom McMillan (Hillsborough):: Madam Speaker, may I put a question to the Minister of Agriculture. The minister has consistently told this House and the country that the federal government was totally committed to meeting its share of the cost of a veterinary college in the Atlantic provinces, provided that the four premiers could get their act together and decide among themselves on a site.
Now that all four provinces have finally agreed on Charlottetown as the site for the veterinary college, following sensitive negotiations and diplomacy, why has the federal
July 8, 1982

government reneged on its promise by recently announcing that it will not have anything to do with funding this veterinary college which is so badly needed?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, what the hon. member says is not true because the facts are different. I received no confirmation and no authority. I sent a telegram, and I hope to meet Premier Buchanan next week at the provincial ministers' meeting in Halifax. I could find nothing on record that is different from what he said before, that he is going to have tuition, etc. I am waiting for him to say something firm that will be placed here, the same as the Premier of Prince Edward Island, the Premier of New Brunswick and the Premier of Newfoundland have done, but there is nothing like that before us at the present time.


REQUEST FOR GOVERNMENT COMMITMENT
Thomas Michael McMillan: Madam Speaker, if the premier of Nova Scotia places a firm commitment on the minister's desk next week, to the effect that he will support a veterinary college for the Atlantic colleges in Charlottetown as agreed by the other Atlantic provinces, will the minister in the House today give a firm commitment that the federal government will meet its share of the cost of this facility?


Eugene Whelan: Madam Speaker, the hon. member has stated that things are different from what they really are, or as I have stated them. He said that I said emphatically that when they got agreement, we would go ahead. I have repeatedly said that I had the money in the blue book. We withdrew it from the budget when they could not agree. That is what was said, Madam Speaker.


Some hon. Members:: Oh, oh!


Eugene Whelan: I said we would have to find new funds for it. It was delayed for how many years? They were five years without making up their minds. We had the money in the blue book. We know that a veterinary college is needed. We said it was needed, but they could not agree amongst themselves on how it should be funded.


Some hon. Members:: Hear, hear!


FISHERIES
Miss Coline Campbell (South West Nova):: Madam Speaker, I should like to direct a question to the Minister of Fisheries and Oceans. In view of the fact that the herring fishery in the Bay of Fundy should be well under way but is not, because the parties have not been able to negotiate a price, would the minister appoint an independent person to see if a solution can be found to the problem as soon as possible?


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, I would hesitate to give an affirmative
Oral Questions
answer to the hon. member because the fishermen and the processors are engaged in a normal negotiation. I hope they find a solution. I would hesitate to move between the processors and the fishermen who, I think, are seriously negotiating for the first time to my knowledge.


CORPORATE AFFAIRS
Charles Joseph Clark: Madam Speaker, I have a question for the Acting Prime Minister related to the case of Consolidated Computers where the Canadian public lost $125 million. A Department of Justice study has been conducted into the narrow question of legal culpability. There has not, however, been a public study into the question of how the Parliament of Canada can prevent future $125 million losses or other multimillion dollar losses as a result of circumstances similar to those which pertain to Consolidated Computers.
Would the Acting Prime Minister give us an undertaking that the government is prepared to consider a reference to an appropriate committee to allow Parliament to study the Consolidated Computers case with a view to ensuring that we put safeguards in place to guarantee that the public will not be forced to lose or risk millions of dollars of public money because of errors made by the bureaucracy?


Jean-Luc Pepin: Madam Speaker, it is my understanding that the President of the Treasury Board has already appeared before a committee of the House to account for what went on in this particular instance. I do not see why another committee could do better.


REQUEST THAT ANDERSON REPORT BE TABLED
Charles Joseph Clark: Madam Speaker, the reason why another committee would have the opportunity to go further is that the minister was reporting briefly on information brought to his attention. I may say in passing that he has not yet tabled the Anderson report into the Consolidated Computers matter, and the House would like to have that. I am sure the minister would not want us to have a situation existing where the people of Canada run the risk of losing another $125 million as a result of another Consolidated Computers case.
The inquiries to date have not been adequate. Will the minister give us an undertaking at least to consider giving Parliament the opportunity to inquire into Consolidated Computers with an eye to establishing safeguards to stop future multimillion dollar losses to the Canadian taxpayer, and will he undertake that the full Anderson report will be tabled and not hidden from Parliament?

July 8, 1982
Business of the House


Jean-Luc Pepin: Madam Speaker, obviously I cannot give this undertaking before 1 have spoken to the minister responsible. I will do so and report.


HOUSING
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, I have one question for the Acting Prime Minsiter. Why did Canada Mortgage and Housing Corporation increase the price of homes it had listed for sale in Hamilton by almost $3,000 two days after the budget was introduced?


Jean-Luc Pepin: Madam Speaker, I am really not informed on this particular matter. I regret that the minister responsible for CMHC is not here, but I will bring it to his attention immediately.


PETITION
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the two hundred ninety-eighth report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for Skeena (Mr. Fulton) on Wednesday, July 7, 1982 and finds that it meets the requirements of the Standing Orders as to form.


BUSINESS OF THE HOUSE
Mr. Nielsen:: Madam Speaker, I would like to address the usual Thursday question to the government House leader. The question of Bill C-109 was the subject of an exchange three times today during question period and motions under Standing Order 43. The Minister of Consumer and Corporate Affairs is in the House and I presume the government House leader has had the opportunity of conferring with the minister. As he knows, we said yesterday that we were prepared to deal with C-109 through all of its stages tomorrow provided that, as the minister stated to our critic, the hon. member for Hamilton-Wentworth, the subject matter of the bill would be referred to the Standing Committee on Health, Welfare and Social Affairs, including the reference of the board of inquiry into the hazards of UFFI.
Can the government House leader say that we will see that bill tomorrow so that we can deal with it on that basis expeditiously? Having disposed of that, will we be passing to Bill C-124 and, if so, what will follow into next week as far as the government House leader can take us, please?


Ian Deans: Madam Speaker, the House leader for the official opposition raises an interesting point with regard to the UFFI bill. I do, however, want to point out that we have received communication-myself as late as today in a telegram-from representatives of home owners with UFFI from across the country asking that the bill not be proceeded with immediately. Therefore, in the face of these home owners' request, we cannot give unanimous consent.


Some hon. Members:: Shame, shame!


Ian Deans: However, like the minister and the Conservative Party, we want to see the matter resolved and 1 am hoping that the minister will sit down in earnest with our critic and discuss the serious problems and deficiencies.


Erik Nielsen: Madam Speaker, surely the government House leader is going to answer my general question, which is the normal practice on Thursday. What will be the business tomorrow and next week in light of the obvious absence of the co-operation of the NDP?
[ Translation]


Mr. Pinard:: Madam Speaker, tomorrow and in the following days, we will study Bill C-124, an Act respecting compensation in the public sector of Canada, and after that Bill C-125, an Act to provide supplementary borrowing authority.


Erik Nielsen: Madam Speaker, does the government House leader intend to deal with C-124 until second reading is complete and then pass to C-125?


Yvon Pinard: For the time being, yes, Madam Speaker. [English]


Raymond John Skelly: Madam Speaker, I wonder if I might addres a few short remarks to the government House leader-


Some hon. Members:: No!


Raymond John Skelly: -on the matter of C-109?


Madam Speaker:: Order. The hon. member may ask a question about government business but this is not the time to negotiate any arrangements which might be made among the leaders of the different parties on the passage of certain bills.


Raymond John Skelly: Madam Speaker, I recognize the requirement but I would like to know for my edification whether the government intends to continue with this absolutely back door approach, or whether Bill C-109 will be dealt with once the

July 8, 1982

minister has clarified the outstanding issues. Since we recognize that this bill will not be proceeded with and this session will continue for some time, there is certainly time to clarify the outstanding matters.
The question of a special parliamentary committee is vitally important, as well as identifying the sources of funding. Is it the government House leader's intention to have those matters clarified so that we can then bring forward the bill and deal with it as expeditiously as we would like to?


Yvon Pinard: Madam Speaker, the situation is very simple and very clear. All Canadians know by now that the New Democratic Party is against the speedy adoption of the bill on houses insulated with urea formaldehyde and it will have to shoulder that responsibility. As to whether it is common practice in the House to use a motion under Standing Order 43 to score political points, I must say that the example is set by members opposite.


ANNIVERSARY OF CLASS OF 1974
Mr. Gilbert Parent (Welland):: On a point of information, Madam Speaker, perhaps you would be interested in knowing that today is the anniversary of the class of 1974. I simply wanted to go on record as saying to those of us elected in 1974: Happy Anniversary.


Some hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


Mrs. Celine Hervieux-Payette (Montreal-Mercier):: Madam Speaker, I have the honour of tabling the fifteenth report of the Standing Committee on Finance, Trade and Economic Affairs.


PRIVILEGES AND ELECTIONS-PRESENTATION OF FOURTH AND FIFTH REPORTS OF STANDING COMMITTEE
Mr. Maurice Foster (Algoma):: Madam Speaker, I have the honour to present the fourth and fifth reports of the Standing Committee on Privileges and Elections, in both official languages.
Order Paper Questions


FINANCE, TRADE AND ECONOMIC AFFAIRS-PRESENTATION OF FOURTEENTH REPORT OF STANDING COMMITTEE
Hon. Bryce Mackasey (Lincoln):: Madam Speaker, I have the honour to present the fourteenth report of the Standing Committee on Finance, Trade and Economic Affairs, in both official languages.


JAMES BAY AND NORTHERN QUEBEC AGREEMENT
Mr. Ray Chenier (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Madam Speaker, under the provisions of Standing Order 41(2), I wish to table in both official languages copies of the James Bay and Northern Quebec Agreement Implementation Review.

[ Translation]


CANADA-GERMANY TAX AGREEMENT ACT, 1982 MEASURE TO AVOID DOUBLE TAXATION
Yvon Pinard: that Bill S-24, an Act to implement an agreement between Canada and the Federal Republic of Germany for the avoidance of double taxation with respect to taxes on income and certain other taxes, be read the first time.
Motion agreed to and bill read the first time.


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. 3,009, 3,251, 3,253, 4,310, 4,342 and 4,347.


Mr. Cossitt: 1.	At the time Mr. James Coutts resigned as Principal Secretary to the Prime Minister for the purpose of contesting the by-election in the constituency of Spadina, did the Prime Minister give him an assurance that he would receive an appointment if he were defeated in the by-election and, if so, what was the appointment?
2.	Is it government policy to appoint to a position anyone who is referred to as "a backroom Liberal" who resigns his post with the government and subsequently loses a by-election?

July 8, 1982
Order Paper Questions
3.	(a) Was it government policy that the Prime Minister should arrive back in Ottawa from Africa as he did on August 17, 1981 because it was the date of the by-election in Spadina (b) had the Prime Minister or anyone acting on his behalf prepared a congratulatory message or statement regarding Mr. Coutts and, if so, who prepared the statement and does the government intend to release the wording of the statement?


Right Hon. P. E. Trudeau (Prime Minister):: 1. No. 2. No.
3.	(a) No. (b) No.


Mr. Cossitt: Did Mr. Tom Axworthy, Principal Secretary to the Prime Minister, hold beer and sandwich parties in his office at public expense on the occasion of telecasts of one or more Montreal Expo games and, if so (a) what were the names of all members of the Prime Minister's staff who attended (b) what was the total cost and what are all the reasons justifying such expenditures?


Pierre Elliott Trudeau: No. (a) Not
applicable, (b) Not applicable.


Mr. Cossitt: To the knowledge of the government, while Mr. James Coutts was Principal Secretary to the Prime Minister, was a special table reserved for him at public expense in the Canadian Grill of the Chateau Laurier Hotel and were any expenses incurred paid for from public funds and, if so, what was the total amount?


Pierre Elliott Trudeau: The government never paid to reserve a special table for Mr. Coutts while he was Principal Secretary to the Prime Minister. Mr. Coutts was reimbursed from time to time for expenses incurred on official business.


Mr. Robinson (Burnaby): 1.	On what date was the most recent report of the RCMP Security Service to the Cabinet Committee on Security and Intelligence given, as required by paragraph (b) of the 1975 Cabinet Directive on "The Role, Tasks and Methods of the RCMP Security Service"?
2.	How many reports were there since the second report, which covered January 1977 to April 1979?


Pierre Elliott Trudeau: 1. The most recent report, covering the April 1, 1980 to March 31, 1981 period was submitted to the Solicitor General on March 4, 1982 and will be considered by the Cabinet Committee at the earliest opportunity.
2. Two.


Mr. Howie: 1.	In the past three years, was the National Harbours Board involved in any lawsuits with respect to its operations in New Brunswick and, if so, what were the names of the litigants?
2.	Were any outside lawyers employed by the board and, if so, what was the total amount paid to them to date?


Mr. Jesse P. Flis (Parliamentary Secretaty to Minister of Transport):: The National Harbours Board advises as follows:
1. Yes. Brunswick Petroleum Transport; Peter Kiewit and Sons Co. Ltd.; Maritime Testing Ltd.; Jos. A. Likely Ltd.; Furncan Marine and Empire Stevedoring Co. Ltd.; Vessel Astra; Salt Co. 2. Yes. $143,541.92.


Mr. Shields: 1.	Was a competition called for an architectural design for a new Canadian embassy in Washington, D.C.?
2.	Was it a public competition and, if so, what were all the details, including the names of the firms that responded?
3.	Was the competition by invitation only and, if so, what were all the details, including the names of the firms that were invited to compete?
4.	(a) What were the terms, conditions and guidelines given to the firms and architects entering the competition (b) who was eligible to enter the competition?
5.	Was it indicated in the terms of the competition that the cabinet was to make the final decision as to which architect would be chosen and, if not, what selection process was outlined to the contestants?
6.	Prior to the decision being made to construct the embassy, was a need-study conducted and, if so (a) by whom (b) at what cost (c) is the study available (d) was the study made available to the architects submitting proposals for the design of the embassy?
7.	Are there preliminary estimates of the cost of constructing a new Canadian embassy in Washington, D.C. and, if so (a) who did the estimates and at what cost (b) are the estimates in Canadian or American funds?
8.	Which departmental budget does the capital cost of the construction of this embassy come out of?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: 1. No. An architectural design competition as such was not called for in the case of the Canadian embassy in Washington, D.C.
2 and 3. All registered architectural firms in Canada were notified, by their provincial associations, of the government's intent to select an architectural consultant for the proposed new Canadian Chancery in Washington. From this initial contact, 318 firms expressed interest in being considered further. Questionnaires were sent to them, and 71 firms responded providing additional data on their experience and capabilities. The names of the 71 firms are contained on the list below.
4.	(a) All interested firms were provided with a plot plan, photograph and map locating the site in Washington together with other data sufficient to allow each applicant to prepare and present a submission suitable for an evaluation of their experience, design philosophy, managerial capabilities and cost and budget control procedures, (b) All firms registered in Canada were eligible to enter this stage of the competition and 71 decided to do so.
5.	The terms of the qualification competition do not refer specifically to how the final decision was to be made.
6.	A "need-study" was conducted by the firm Woods Gordon of Toronto at a cost of $118,000. The study dealt with options available to Canada in resolving its Chancery needs and supported the selection by the department of a site on Pennsylvania Avenue. The study is considered an internal
July 8, 1982

document by the department and involves more detail particularly on sites which have since been rejected and therefore was not presented to architects submitting proposals.
7.	(a) There are preliminary estimates of the cost of constructing a new Canadian embassy. The preliminary estimates have been prepared by the technical staff of the Department of External Affairs with no cost supplementary to those associated with staff salaries, (b) The estimates take into account the cost in both Canadian and American funds.
8.	The Embassy project will be a charge to the budget of the Department of External Affairs.
Firms:
Adamson Associates
Annau Associates
Arcop Associates
Arnott McPhail and Associates
Barry Cline, Architect
Beinhaker Irwin, Architects/Planners
Bemi, Pye Richards, Architects
Bobrow-Fieldman, Architects/Planners
Boga Group, Architects and Planners
Boigan and Armstrong, Architects
Capital Consortium
Murray and Murray Page and Steele Scholer and Heaton Carmen Bennett, Architect Chandler Kennedy Group Clifford Laurie, Bolton, Architects Colin Bent, Architect
D.	Owen and Associates Da Roza, Architects
Della Lana Griffin, Architect Diamond, A.J., Architects Dimitri, Dimakopoulos and Ptnrs.
Downs/Archambault, Architects Dubois Plumb and Associates
E.	George Kneider, Architect Erickson, A., Architect
E. J. Gaboury and 10 Arch. Group, Architects
E. R. Baldwin, Architect
Fliess, Gates, McGowan and Ptners.
Freschi, Bruno Architect Frost, Brammer and Associates Gardiner/Thorton, Partnership Gene Dub, Architect Hamilton Kemp, Architect J.P. Thomson and Associates
Johnston, Maragna, Stark and Temporale, Architects
Kachmaryk, Novick and Johnston, Architects
Keith L. Graham and Associates
Kelton and Lacka, Architects
Laslo/Nemeth, Architect
Lazosky/Stenman, Architects
Lee, Elken, Beckstead, Architects
Lennis/Trotter, Architects
Lippert Svidris, Architect
Littlewood, Alan, Architect
Luc Durand, Architect
Markson, Jerome Architects
Mid-Canada Consortium
Norman Dobell, Architect Moffat, Moffat, Kinsohita, Architects Moriyama and Teshima, Architects Myers/Rounthwaite and Associates Neish, Owen, Rowland, Roy P.L.L. and Associate Papineau, Gerin, Lajoie, Architects
Order Paper Questions
Parkin Partnership
R.	D. Lines, Architect
S.	R. Pakarnyk, Architect
Safdie, Desnoyers, Larose, Laliberte and Patrucci, Architects Sankey Partnership & Blouin, Blouin and Associates Shore, Tilbe, Menschel, Irwin, Peters, Architects Smith Carter and Fiset Miller Stetcheson Katz, Architect Strasman/Dunlop, Architects
T.	Vancouver, Architect Tawadros Architects
The Davies/Leggat Partnership Thompson/Berwick/Pratt, Partnership V. W. Kuchar and Associates Wade Williams, Partnership Webb, Zerafa, Menkes White/Bushman, Architects Wiens/Johnstone, Architects Zeidler Roberts Ptnrshp


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


Mr. Beatty:: Madam Speaker, I wonder whether the parliamentary secretary might tell the House what procedures he follows on points of order on written questions on the Order Paper which are brought to his attention. It was some weeks ago that I brought to the attention of the parliamentary secretary question No. 4,041, which deals with the reports of the Standing Joint Committee on Regulations and other Statutory Instruments, of the Economic Council of Canada and of the Task Force on Regulatory Reform. I have been informed they were supplied to the President of the Privy Council's office some weeks previous to that by the President of the Treasury Board, but for some reason they have never emerged to see the light of day. Does the Parliamentary Secretary to the President of the Privy Council in fact make any inquiries as a result of these points of order raised in the House? If so, can he tell me what he has done in the past month or so with regard to this particular question?


David P. Smith: Madam Speaker, when I undertake to look into a matter on behalf of a certain member of Parliament as a result of an inquiry, I do follow it up; the appropriate ministers' offices are contacted, and the matter is pursued.


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


Some hon. Members:: Agreed.

July 8, 1982
19132____________________________________
The Budget-Mr. Demers



GOVERNMENT ORDERS

[Stage Direction]
[ Translation]

[Stage Direction]
The House resumed, from Wednesday, July 7, 1982, consideration of the motion of Mr. MacEachen that this House approves in general the budgetary policy of the government.
Mr. Yves Demers (Duvernay):: Madam Speaker, thank you for giving me this opportunity to speak to a subject as important as this budget. As everyone in this House is aware, for several years, and especially during the last year or year and a half, industrialized countries have been faced with very serious problems. What happened to our economy, which had been doing so well in the years from 1970 to 1974? Well, we all know that around 1973 or 1974, oil prices increased by an incredible 700 or 800 per cent. Inevitably, the increased price of oil was reflected in production and transportation costs, and oil consuming countries have all had to raise their prices tremendously in order to continue to make a profit or just to break even. With the oil crisis came inflation, which started in 1974-75 at between 6 and 7 per cent and now, in 1982, in Canada, has risen to nearly 12 per cent. Because of inflation, in every collective agreement negotiated subsequently, employees have demanded wage increases at least equivalent to the rate of inflation, in other words, between 8 and 12 per cent. Producers had to pass on these increases in the prices for their products and we have been in this inflationary spiral for a number of years, which is one of the reasons we are now in a recession.
Furthermore, a few months ago the powerful United States decided to raise interest rates to previously unheard-of levels, namely 18, 19 and even 20 per cent. The reason: the U.S. wants to bring back petro-dollars invested throughout the world. Petro-dollars are invested in Canada and also in France, Great Britain and Italy, and it is a fact that people with money to invest, whether it is $100,000, $10,000 or $10 million, are going to invest it in countries where they can get the best return on their investment. In this case, they are taking their money to the United States which is paying the highest rates in the world. That is why millions of dollars have been pouring in to the United States. Here in Canada, if we do not want our economy to be bled dry for the benefit of the U.S., like many other countries we must raise our interest rates to compete with U.S. rates.
One often wonders why the United States is trying to bring home all those petro-dollars. I am not sure about the reasons, but I do have a question. As we all know, a number of European countries, including Germany and France, are negotiating with the U.S.S.R. for the construction of a pipeline from Siberia to Europe, which will carry Siberian natural gas to energy-hungry Europeans. Obviously, the United States is not very happy about this, because in the event of a serious conflict between the U.S.S.R. and our countries, the first thing the
U.S.S.R. will do is cut off the supply of natural gas to our allies, namely Germany, Italy, France and Great Britain. Is this why the U.S. wants to repatriate its petro dollars, to prevent the financing of a megaproject that is going to cost several billion dollars? I am not sure but it might be one of the reasons. What I do know, however, is that in the short term, the U.S. economy will certainly benefit from the situation, because with all this money, the Americans will be able to build a lot of factories, and subsequently provide jobs for their people. Even if in the U.S. unemployment is also running at about 10 per cent, an increase in the number of jobs may be expected in the short term. I am not so sure about the longterm effects, however, because the U.S. dollar is already worth 25 or 28 per cent more than the Canadian dollar, and European currencies have fallen about 50 per cent, in terms of the American dollar, from where they were about two years ago. This means that as time goes on, the U.S. will find it increasingly difficult to export its products and, conversely, other countries will find it much easier to export their goods to the U.S. Nevertheless, I am not too worried about the U.S. I am sure they realize what is involved, and they had reasons for taking the action they did.
Where does Canada stand in these difficult times of very high interest rates? As 1 said earlier, we have almost matched U.S. rates, while our Canadian dollar has fallen. Today, our dollar is worth about 78 cents in terms of the U.S. dollar, which does not look too good. However, if we compare the performance of our Canadian government with that of all other industrialized countries, including economically strong countries such as France, Germany and Japan, we realize that our dollar is very strong, because although it is worth 78 cents in U.S. terms, currencies in European countries have fallen by 50 per cent compared with the American dollar. And if we draw a comparison with the Canadian dollar, two years ago, one franc was worth 28 or 29 cents, while today, in 1982, although our dollar is down to 78 cents in U.S. terms, one French franc is worth only 17 or 18 cents in Canadian money. So we can say that Canada's policies have still been quite satisfactory, and that today, although our dollar may be weaker than the American dollar, it is much stronger than the currencies of all other industrialized countries.
People tell us that paying 18 per cent interest is outrageous, and I agree. If here in Canada we wanted to have a 12 per cent rate, while U.S. rates are as high as 18 per cent, on the face of it, it might make things easier for our industries, but we all know that investors in Canada would transfer their Canadian funds to the United States, and there would be no capital left in Canada to finance our Canadian industries. In fact, the initial improvement would be followed in a few months by a definite worsening of the situation. It would not be impossible

July 8, 1982

to reduce interest rates, but if we were to do so, we would have to prevent an outflow of Canadian capital toward the United States and other countries. The procedure to be followed in this regard would be the adoption of an exchange control law. With such legislation Canadians could not take money out of Canada to invest it in other countries at their will. I must admit that, in the short term, this could solve the problem for a few months. However, we know quite well that, in Canada, we not only need money from Canadians, but also, from foreigners in order to develop our country, whether it be the tar sands projects which are now facing problems, the James Bay project, which has cost us $18 billion, or other major Canadian projects. If we did implement exchange controls, no foreign company would be interested in investing in Canada since it could not get back the profits to its own country, and the situation would be even worse.
Compared with what is happening in the United States, our economy is at a standstill. In addition to interest rates, there are certainly several reasons for our economic ills. I do not want to describe them all today, because some of them are obvious, others are apparent and others are more subtle. However, I would like to mention a few of them because I believe that we, the elected representatives of the people, on all sides of the House, have a duty to make suggestions so that all Canadians may discuss them and gain the best possible understanding of the problems. One important problem is the fact that wages have increased more quickly in Canada than in the United States, which means that our production costs are often higher than in the United States. This is a problem, but it is not the worst one because I agree that Canadian workers should earn a good living. However, Canada is dangerously and obviously lagging behind in the area of productivity. If we compare Canadian and American productivity, we find that ours is about 20 per cent lower. Who is responsible? The various government levels are partially responsible. Because of their abusive wage demands and working conditions, labour unions heavily share that responsibility. Consequently, the workers who make up the membership of these unions are also responsible. I would like to give a few examples. In Quebec, for instance-and I suppose that the situation is similar in many Canadian provinces-if you are a carpenter working on construction sites, you have a certain territory where you can work, let us say the area of Montreal. If your contractor accepts a building contract in Trois-Rivieres, for each employee he hires in Montreal to work in Trois-Rivieres, he will have to hire a certain number of local workers. This means that if a Montreal contractor needs 100 employees for a job in Trois-Rivieres and hires 50 employees in the Montreal area, he will have to hire 50 workers in the Trois-Rivieres region. As everyone must realize, the best workers from these regions already have a job because the best workers in any field can always find a job. This contractor will therefore have to hire workers who are not as good, and therefore not as productive. When he makes his submission, he takes this fact into account
The Budget-Mr. Demers
and increases his prices by 10, 15 or 20 per cent to compensate for a lower productivity.
We are now going through a public transport strike in Montreal. Those who sell tickets have been asked to give change to the public. This is part of their job, they must collect the money and give change to the public. They believe that this is not their job, that they do not have to do the work, and they are even talking about going on strike. This would not give them any more money, but they are putting obstacles in the way. I went to the hospital very recently because my youngest son had an operation, and I witnessed something which surprised me. A nurse dropped a bottle on the terrazzo floor. Two and three-year-old toddlers were playing around the glass. The nurse had no right to pick up the shattered glass, she must make a call because the union says a cleaning attendant must pick up the glass. So, according to union instructions, the nurse called the cleaning attendants. Fifteen minutes later, for some reason, the glass was still on the floor, with the children around. I took a sheet of paper and picked up the glass; because I am not unionized, nobody can stop me from doing it. Such situations are utterly stupid. First of all, children could have been harmed, and this is very important; second, the nurse could have picked up all the glass in two minutes. Just imagine! She called somebody that started from the other end of the building, who may have walked half an hour or fifteen minutes to get there, then he took five or ten minutes to pick up the glass and had to walk another quarter of an hour to get back to work.
It is because of such nonsense that no salary increases are granted, but productivitywise, each one of us Canadians has to pay for these mistakes with our taxes. In that context, I feel that we Canadians all have to start thinking, because we must understand that today we are in competition with the United States, Japan and every other nation. If we are to protect our jobs, we will not do so by asking Canadians to put in terrific hours, to work on the double, but simply by requesting that within those eight or seven and a half hours people work, they give a full day's work, and I am convinced that with the level of education in Canada and our mining potential, this country can make for very pleasant living and can compete very easily with any other nation.
Workers are not the only ones at fault. Our businessmen also share the responsibility. Quite recently the Canadian government had to guarantee several million dollars to Chrysler because that corporation was in serious difficulty. We guaranteed several million dollars to protect those jobs. But how come that since 1973, since the oil crisis, when we all realized that automobiles should be smaller, the Chrysler Corporation kept on producing cars that were exceedingly large, exceedingly heavy, and that guzzled a lot of gas? Consumers, of course, were aware of this and sales went down. Therefore, that corporation was clearly at fault. I could refer

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to other cases, of which there are several. This points to the responsibility of management, especially in the case of large corporations and, amazingly, in the case of that corporation.
1 mentioned earlier that governments have a goal, the federal government, provincial governments, municipal governments. We have so many regulations and paperwork that we require businessmen and employees to spend part of their working hours completing forms, complying with regulations and all kinds of things. This is hindering productivity. We, as government, realized this and, some time ago we set up a committee to look into all these demands on industry, with a view to reducing them as much as possible. An industry that must use 5 per cent of its time completing forms has a 5 per cent productivity loss. As I said, all governments are guilty to some extent. These include provincial governments, and I should like to state a few facts which affect me most as a Quebecer. Our province of Quebec is making mistakes, tremendous mistakes. Very recently, it bought the Asbestos Corporation. Everybody has been aware for several years that asbestos will face great difficulties in the future, that asbestos will become difficult to sell, that it has been banned in several countries because some studies have demonstrated a direct link between its use and cancer. Sales have been going down for several years. Yet, the Quebec government stuck to its idea of spending several millions of Quebecers' money to purchase this corporation. Now, it has bought it, paying top dollar for it, and the directors of this corporation, who in my opinion are very clever businessmen, played their cards extremely well. They behaved as though they did not want to sell to push the price upward, as though they felt very badly about it. But 1 suggest that, when they sold their company, they were the happiest directors in the world. As a matter of fact, Quebec has had to lay off several hundreds of its asbestos workers. Quebec is the new owner of the corporation, but its workers are no longer working, something which had been foreseen! Quebec residents pay between 20 and 25 per cent more income tax than their Ontario counterparts because of mistakes such as this one and because of a lack of restraint in their economy. The Quebec government has just bought, as I said, the Asbestos corporation, just as it had bought the Sidbec steel plant a few years previously, the Sidbec steel plant which is accumulating millions of dollars in deficits every year; now, it is anxious to get rid of it, even at a loss. It would have been better advised not to buy Asbestos and to keep the Sidbec steel plant.
If you compare the budget of Quebec with that of Ontario, you can come up with interesting findings. In 1974-75, Quebec spent $7.9 billion and Ontario $9.6 billion. Ontario clearly spent more than Quebec, but Ontario has a population of approximately 9 million and Quebec 6 million. In 1980-81, Quebec spent $19 billion and Ontario $17 billion. If there are some of you who could explain to me how Quebec with a population of 6 million could spend $19 billion, while Ontario with a population of 9 million managed to spend only $17
billion, that is, less than Quebec with 9 million population I would be pleased to hear them!
Comparing totals is always difficult. But if you determine the spending on an individual basis, you will find that in 198081, the per capita spending in Quebec was $3,018, and when I say on an individual basis, I include pensioners, children, handicapped people, everybody who is not working. The per capita spending in Ontario was $2,071. Quebec, therefore, for every person living on its territory spent $947 more than Ontario did for its own people, while it spent only $109 more in 1974-75. An increase of 900 per cent over six or seven years. If this keeps up, Quebec residents, needless to say, will continue to pay more taxes than their Ontario counterparts, not only during this generation, but during many generations to come.
To continue in the same vein, I would point out that since the present government came to power in the province of Quebec, civil servants have been hired by the ton. A slew of new departments were set up to accommodate friends of the party and, naturally, the bill is now being paid which makes things pretty rough. Now, to come back to the over-all situation in Canada, Canadians lack certain things, of course; but despite our weaknesses, and we must speak of them too-it is a good thing to speak of them-we must not become overly pessimistic. Canada and Canadians should feel confident that we will soon have worked our way out of this crisis.
Still, the fact is that when we compare the potential of Canada with that of other countries, we realize that all in all we are privileged. Canada is a country where the level of education is just about the highest in the whole world, and therefore where science and technology are also extremely advanced. We are lucky, not because we are Canadians, but because we have been lucky! We live in a country where there is an abundance of oil, part of which is in oil sands and hence very costly to extract; but it is still there. It gives us a measure of security, and considering those countries which have none at all, that is an asset. In addition to oil, we all know we have natural resources such as forests, water, both salt and fresh, iron, zinc in fantastic quantities. In light of those factors, we can look to a very promising future and as Canadians, we should stop being pessimistic and look to the future with confidence. Indeed, the last budget brought down by the Minister of Finance (Mr. MacEachen) demonstrated vividly that the country is now going through difficult times over the short term and that steps must be taken to help our industry.
This year of course, we know that the inflation rate in Canada will reach 11.8 per cent while south of the border it will be 6 or 7 per cent. We can easily understand that if those conditions were allowed to prevail for two or three years, we would no longer be competitive. Canada must therefore bring its inflation rate down so that it is roughly the same as that in the United States. Accordingly, the matter which came under
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consideration was not a salary freeze, but a 6 per cent reduction in the forthcoming year and a 5 per cent reduction the year after, which would contribute to reducing our own inflation rate to a level comparable to the American one. And why are the United States so important? They are impotant because 75 per cent of our national trade is done with the Americans. Our companies are experiencing difficulties and this is understandable when we have to pay 18, 19 per cent interest rates. It is quite difficult for those companies to make profits and quite often they incur losses which are serious enough to bring them to the verge of bankruptcy.
Well, the government and the Minister of Finance have decided that the federal government would pay 4 per cent of those interest rates to reduce them by 4 points and this will first of all help the construction industry. The construction industry is the most Canadian of all industries because all its employees are necessarily Canadians. All building materials are manufactured in Canada whether it is lumber, gyproc, asphalt shingles, cement, electric wire, or plumbing equipment. This economic sector is entirely Canadian and I think it is the first one which should be assisted. Well, buyers of new homes will be eligible for a $3,000 grant, but they actually will get more than $3,000, because $3,000 is not a very high amount compared with the prices of houses today. What is more significant is the fact that the mortgage rates on houses will be reduced by 4 per cent and this is a lot, because it means 4 per cent this year, next year, the following year and every year as long as the same individual remains the mortgagor of his house.
We know quite well that in the near future, maybe in an unforseeable but near future, the interest rates should stabilize and become much more normal. To a prospective buyer of a new house concerned about economic restrictions, we say: You will pay 4 per cent less interest than the normal rate throughout the period when it will remain high and we know that to own a home has been for several years the best investment that can still be made in Canada.
I think that those measures will stimulate the construction industry and help Canadians become home owners. We will also help all small and medium-size businesses by reducing their interest rates by 4 per cent. Of course that will make a big hole in the Canadian budget. The deficit had to be increased to meet those requirements. But there is one thing to be said, namely that a government is administered exactly the opposite of the way a family budget is administered. In a crisis when everything is going very badly, a government must spend more to help create jobs and to help businesses invest, expand and hire people. With the creation of those jobs, there will be lots of work in two or three years and practically all the unemployed will have found work. By then the government will collect many taxes from the labour force and from businesses that will be making profits, so we should do the contrary
The Budget-Mr. Yurko
and pull in the purse strings because full employment often fuels inflation. I said it was exactly the opposite of a family budget because a family has to tighten its belt when things go badly and it must immediately act with caution. But the government must spend money for a specific purpose, and that is to create jobs for Canadian workers.
Another innovation in the budget is aimed at encouraging all Canadians to invest-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member, but I must inform him that his time has run out. However, he may continue if there is unanimous consent.


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: The hon. member for Duvernay may continue his remarks.


Yves Demers: Mr. Speaker, I do not intend to take up too much of the time of the House, so I will say in conclusion that even if we are going through difficult times, I think that all members of the House have a message for Canadians. We must tell them to work hard because Canada is experiencing difficulties, but we have to tell them as well that Canada has a tremendous potential and that if we all pull together the situation will be back to normal in the very near future.


Mr. Bill Yurko (Edmonton East):: Mr. Speaker, I feel privileged to participate in this debate. I wish first to speak briefly about the domestic economic climate and perhaps, if I have not been too windy, to touch on the international economic situation if time permits. I do not wish to abuse the privileges of the House, so I will try to limit my remarks to less than 20 minutes.
Canada today is in the midst of cost-push inflation, sustained primarily by high cost money, the high cost of governments and the very high costs of overhead, management salaries and skilled labour in the private sector.
Our nation is living beyond its means and adjustments are desperately needed. The brutal force of inflation is the result of living beyond our means. The nation has two choices: to continue to live beyond its means and thereby live on debt and an accelerating cycle of inflation, eventually resulting in the short-term collapse of the economic cycle, or by self-imposed restraint and Draconian government measures to lower temporarily the expectations of all Canadians, cut the inflationary cycle and then follow with a cycle of confidence and growth.
It is easy to heap the blame upon the federal government or a successive number of governments for the economic disaster facing Canadians today. Although the federal government must shoulder much of the blame, it is not the only culprit. All present provincial governments are living on debt, meeting their obligations with borrowings, as are most Canadians. All governments in Canada, regardless of political persuasion,

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have simply become too big, not necessarily in the economic planning sector but certainly in the administration of a massive variety of programs which people often could and would much rather do for themselves.
All governments in Canada are taxing away for redistribution some 45 per cent of the gross national product of this nation, and this figure is going up. The federal government accounts for one-third and the provinces and municipalities the other two-thirds.
All governments are redistributing borrowed wealth. As the Minister of Finance (Mr. MacEachen) told us in his recent budget, the federal government deficit in this fiscal year will be $19.6 billion. The budgetary deficits of all the provinces together this fiscal year are projected to be $9.4 billion. I suspect that the actual figure will be more like $12 billion.
At the end of the current fiscal year, the debt structure of the federal government will reach about $145 billion and that of the provinces about $70 billion. This is a debt load of about $9,000 for every woman, man and child in Canada. With interest rates in the region of 20 per cent, this is just too much for the Canadian people and the Canadian economy to sustain for too long. Therefore, the first order of a federal budget and indeed every provincial budget is fiscal restraint. Governments simply must restrain themselves. The alternative is economic collapse and chaos and a long drawn out cycle of recovery. It is the next 12 to 24 months that are critical. Some of us have seen clearly this economic scenario that was developing over the last several years and indeed the last several months.
During the last few months I have tried to be constructive. I introduced a series of motions and made several speeches in this House with regard to needed economic policies and strategies. Permit me, Mr. Speaker, just to review a few of the motions 1 introduced under Standing Order 43. On May 6 I moved a motion stating that I felt certain that the Minister of Finance may wish to second it, and the Speaker actually put the motion. At that time I said:
Madam Speaker, the federal government's fiscal and economic policy cannot expect solely the private sector to cure the inflationary ills of the nation. The public sector must bear its share of the burden as it takes some 45 per cent of the GNP with little or no positive influence on productivity. Therefore I move:
That the government immediately adjust its economic strategy to:
(1)	allow the dollar to drop by at least 5 per cent of its value and then maintain a new level through the appropriate fiscal and monetary policy;
(2)	immediately call a federal, provincial and municipal conference to stabilize for at least two years the salaries and benefits of all public servants whose income is greater than $25,000 per year;
(3)	cut government expenses in a Draconian fashion and introduce a new budget incorporating the necessary incentives for growth;
(4)	restructure the National Energy Program immediately;
(5)	undertake with the provinces a massive public works program on a national basis to create jobs.
I moved that motion on May 6. It is interesting that the dollar since then has dropped by 5 per cent, wages in the public sector are being stabilized for two years, a new budget has been introduced, the National Energy Program has been significantly and beneficially changed and construction programs are being undertaken.
On February 17 I gave a speech in this House asking for selective stimulation of the housing industry for job creation. In the same speech, I asked "that a task force be put together at the earliest opportunity to come forth with a whole series of programs by governments for selectively stimulating the Canadian economy and creating jobs without necessarily increasing inflation". All of this is being done in the new budget. I was certainly pleased to hear HUDAC's recent response to the stimulative housing initiatives in the budget.
On May 11 and again on May 20, I moved a motion "that all Members of Parliament voluntarily accept a 10 per cent cut in their basic salaries", to show leadership in this House and to the nation. I followed these motions by a private members' bill to limit MP's increases to a maximum of 6 per cent. Some opposition members accused me of grandstanding and all sorts of insincere motives. Well, this budget has both an MP salary reduction and a limitation on increases to 6 per cent and 5 per cent in the next two years. I have heard no one scream against these budgetary provisions.
Again on June 9 I introduced a motion. I stated:
-equity investment pessimism is pervasive in Canada. Canadians are investing their money outside Canada and in high-interest-bearing bonds and certificates. This has substantively curtailed the ability to generate equity capital in Canada and has jeopardized the survival of small business in Canada because of the high cost of debt capital. A new budget is necessary to create confidence in the Canadian economy, and it must contain incentives for equity investment. Therefore I move, seconded by the hon. member for Bow River (Mr. Taylor):
That any new budget abolish capital gains taxation on all equity investment
in Canadian registered companies.
We recognized, as so many of us have, the massive transfer of equity capital to debt capital in the nation, also imported capital. Effectively, the Minister of Finance has basically introduced such measures in the budget. He proposed indexing the gains to inflation for equity investment in Canadian owned companies, but he might just as well have gone the full mile and totally removed capital gains on investments in Canadian companies. He increased the amount of paperwork which is becoming extensive in the area of capital gains taxation.
I am asked what is my position on the June 28 budget. First, let me say that it was desperately needed. Second, its intent and purpose is short term. It cannot be otherwise in this very turbulent economic cycle. Third, its goals are to cut inflation, hopefully to 6 per cent in two years, bottom out the recession cycle, sustain a short-term economic holding action and, finally, initiate the beginning of a new and dynamic growth cycle, and to do this without massive and sweeping government legislative action across the entire society. Voluntary restraint is still partially our choice. The government has finally whipped up enough courage to provide some desperately needed economic leadership to the nation.
It is my intention to support the restraint measures embodied in Bill C-124 and vote for the principles in that bill. Rounded out, the budget has three basic elements. First, public sector restraint; second, investment stimulation through equity
July 8, 1982

incentive financing and lower debt financing; third, job creation through a variety of fiscal juggling. In the first element, the budget goes as far as the government dare go on wage restraints, but this must surely be looked upon only as the beginning of public sector restraint, both at the federal and provincial levels. Surely it must be followed by employment reduction through early retirement, as the Imperial Oil Company did so adequately in the last few days, and a reduction in the unproductive expenditures in all areas of government.
In the second element, which is investment stimulation, the government could have gone even further, although I expect that the special advisors committee will be pushing like hell.
In my estimation, the third element of job-creation is marginal and much help is needed from the provinces in this area. I hope that the government will continue discussions with the provinces to initiate an increasing variety of job-creation programs, particularly in the construction industry.
I know that it is easy, as has been done by many, to say that the budget measures are not enough that some elements are inequitable, that some elements are missing, that the emphasis is misplaced and that it may be tricky or deceptive. 1 listened to the speeches of the leaders of the two opposition parties with mixed emotions. I was particularly impressed with some of the thoughts of the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton). Much wailing and gnashing of teeth was directed toward the government's over-enthusiasm at fiscal restraint in some areas, particularly in areas like reducing the indexing of old age pensions to 6 per cent and 5 per cent in the next two years. On Canada Day, or Dominion Day, I had the occasion to meet two groups of senior citizens in Edmonton, all of whose members were pioneers, totalling some 600. Not a single one of these hardy pioneers complained that 6 per cent and 5 per cent increases in the next two years was too little. In fact, they were more concerned about the young men and women who are unemployed and they wished they could somehow help.
There are many other aspects of this budget that one could debate positively or negatively, but allow me to look backward a little bit. During the decade of the sixties, I worked mostly out of New York and also Arizona in the United States. What a decade the sixties was for North America! The sixties was an era of magic, when we of the technologically trained society held the world in our hands, when technology and the world economy exploded in a decade of development and growth, and human interaction and peace. There seemed to be no limits to our imagination or to our dreams as scientists, engineers and politicians. We were certain that we could change the world in but a few decades and build a paradise on earth.
Then we left the sixties behind and cautiously entered the seventies. I remember writing the following for a speech that I gave to the Man and Resources Conference in Toronto in 1974. In that speech I said:
This century has fostered revolution in science and technology, in the generation and use of energy, in industrial productivity, in population growth, in urbanization and in destructive potential which have buffeted humanity at a rate too quick for the human mind to adequately comprehend and absorb.
The Budget-Mr. Yurko
The spiritual, social and intellectual consequences of these revolutions are profound and not entirely determinable. Our present day cultures are increasingly beset by an oppressive sense of fragmentation and instability. We are beginning to question and even doubt our own continuity as a progressing civilization. We derive from our awesome technological complexity both a confidence of power and a sharp premonition of vulnerability.
Yes, the seventies became a decade of doubt and readjustment both worldwide and in Canada. The western world built a mobile society based on cheap oil. The oil then became expensive, and this triggered a world economic whirlwind which brought inflation, a halt to world economic growth, protectionism and pessimism. In retrospect, Canada would perhaps have been far better off today if we had gone quickly to world energy prices, as the United States did. However, that is wishful thinking.
This pessimism and inwardness catapulted into the eighties with disruptive force and affected Canada so much that today one must ask what has happened to us as Canadians. What has happened to our dreams? What has happened to our ideals? What has happened to our will to be in the forefront of world nations in productivity, in sharing and in helping each other and all the less endowed people of the earth? The great idealism of the sixties and early seventies has crashed, trampled in the wake of our own riches. We lost our initiative, our drive, our determination and even our will to excel both nationally and internationally. We have exchanged political co-operation for political intransigence. Federal-provincial cooperation has given way to upmanship and gamesmanship, although I am encouraged by the posture and attitude of the ten Premiers since the recent first ministers' conference. In particular, I am encouraged by the actions of the Progressive Conservative Premier of Nova Scotia who accepted the federal restraint guidelines.
We have traded productivity and pride of accomplishment for slothfulness and laziness, and now I see labour leaders publicly advocating more of the same as a strategy for fighting restraint. The figures on lost time in the Canadian work force released today are alarming. At times we seem to have become a people without purpose, without compassion and with dubious honesty, and this House is a representative microcosm of the Canadian fabric today. Here we bicker like children and throw verbal frisbees back and forth. We distort, we delay and we belittle each other. The intent is to be destructive and disruptive rather than constructive and efficient. This House has become a place of negativism and pessimism. Through television we provide a daily diet of our characteristics in this House to the nation, and people often ask me when I go back to my constituency if we will ever agree on anything again, as we agreed when we debated the Quebec referendum in this House. "Can you people down there not agree on some direction or on some few things which should be done in this nation?" That is what I am asked.
We must agree, and we must develop a new optimism and a new perspective with regard to the magnificent country we have. So few of us enjoy this wealth like no other peoples of the world. I know every Member of Parliament deals with immigration problems in his constituency because there is not a soul

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The Budget-Mr. Cyr
anywhere in the world who does not want to emigrate to this country which has such vast potential. We must find the enthusiasm, the desire and the optimism necessary to build this nation again. We must agree to work together to solve the economic malaise facing and punishing all Canadians, and I know we can do better from here on than we have done in the past.
[ Translation]


Mr. Alexandre Cyr (Gaspe):: Mr. Speaker, I may say it is a pleasure and a privilege to be taking part in this budget debate. I would like to take a few minutes to talk about those of us who were expecting miracles and those Canadians who are convinced that all the problems our country is facing today are the result of errors, past and present, of the Government of Canada. I also have some comments on the state of the economy in the riding of Gaspe and I shall explain how weak international markets are responsible for the shutdown of several factories, and that the world economic situation must improve if we are to revive our copper, paper and seafood industries.
First of all, Mr. Speaker, I should like to quote from an editorial by Claude LeVergne, published on July 4 under the heading: "The budget as a reminder of reality". It says, and I quote:
In fact, the Finance Minister, who, it is generally conceded, had very little room to manoeuvre, opted for an economic sermon rather than radical corrective measures. To that extent, his speech may prove to have been worth while provided it was understood. Without wishing to overestimate this last budget, the fact is that opposing factions both inside and outside Parliament have been extrapolating the proposed measures in a very negative manner, without actually suggesting any real alternative solutions. It is always easy to say too little too late, but it would seem to be incumbent on the critics to come up with real guidelines for corrective action, which they have failed to do. If Mr. MacEachen succeeds in making Canadians aware of the present crisis situation, his speech will not have been in vain.
Mr. Speaker, all around us today, we see signs of great upheaval which have been characteristic of the North American scene during the last twenty years. We have seen the spectacular growth of an economy with an almost limitless capacity for expanding production suddenly turn into an inflationary monster gone completely out of control. The goal of the June budget is to restore public confidence in a future when inflation will subside and new investment will create the jobs we so urgently need. Mr. Speaker, the appeal for national solidarity made by the Minister of Finance (Mr. MacEachen) must be heard by all Canadians. Many, far too many people, including politicians, businessmen, labour leaders and educators, are claiming that any system of government that has failed to get rid of unemployment, exploitation and inflation is a failure and should be eliminated.
According to this kind of reasoning, we should destroy all our hospitals and shoot all the doctors because they have failed to wipe out disease. Mr. Speaker, before destroying one system, I think they should suggest another that will be able to resolve the problems of unemployment, exploitation, undue profits and inflation. As Leo Rosten said: "Anyone can
promise Utopia if he does not specify a program." Our system of government is ideal, and the objective of the Minister of Finance will be achieved and our way of life preserved, provided enough Canadians show sufficient concern for the national interest in their daily decisions. In the years to come, Canadians will have to spend more time and energy on resolving the nation's problems. Excessive wage demands and unreasonable profits increase the cost of goods, and consumers will have to pay the bill. Canadians must condemn every purely egotistical decision. Indifference to poverty is inexcusable in a society that is dedicated to the dignity of the individual.
Mr. Speaker, I would now like to discuss the economic situation in the riding of Gaspe and the distributive justice we are asking for, which is the philosophy of the Liberal Party but is too often ignored by certain departments. The needs of each community and its individual members are multiple and complex. They include basic requirements such as survival, as well as more complex psychological aspirations such as personal development. These needs truly represent the basic goals of individual Canadians. Socially, they correspond to two essential goals, namely well-being and equity. All the intermediate goals help toward meeting these basic aspirations. Well-being is measured by the extent to which material, sociocultural and other needs are met. On the other hand, equity consists in the fair redistribution of the assets of society. It is probably the idea of equal opportunities which best illustrates the most significant and universally accepted concept of equity at the present time. Its aim is to provide everyone with the same opportunities to achieve well-being. Another aspect of equity is the equality of results.
In the Gaspe area, and especially in my constituency of Gaspe, we have neither equal opportunities nor equal results. The standard of living in a country or a region depends on the income of the population, the cost of living and the economic benefits. We are well aware that we have many non-economic benefits in the Gaspe area. However, the average salary is 40 per cent lower in that area than in Quebec as a whole. In the Gaspe region, the majority of the experienced labour force works at unskilled jobs in the resource sector, for instance, in the mining and forest industries. In fact, the Gaspe region has proportionately twice as many workers in these industries as the Quebec average.
As you know, Mr. Speaker, the present world recession is felt more badly in economically weak and disadvantaged regions where the economy is supported by the resource industries. In my constituency of Gaspe, the regional unemployment rate is 40 per cent, among the highest in Canada. To make the situation even more confused, many industries are now experiencing financial problems. On June 30, Mines Madeleine Ltee closed down their mining operations in Sainte-Anne-des-Monts. This is a permanent closure which has thrown 110 people out of work. The Marsoui sawmill has been
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closed for 18 months. Over 100 workers are now unemployed, in addition to 125 forest workers. Gaspesia Ltee of Chandler and Mines Gaspe Ltee of Murdochville are closing down temporarily because of newspaper and copper stock surpluses. A total of over 4,000 workers are directly affected by these temporary shutdowns.
In view of the economic situation, manpower centres do not find it advisable to set up relocation committees for workers who have lost their jobs since mines and plants are closing down everywhere. The tourist industry is also very important in the Gaspe region. I am told that there were 25 per cent fewer tourists in June 1982 than in June 1981. Mr. Speaker, I urge all Canadians to visit the Gaspe area this summer because prices are very reasonable there and, as you know, the people are very hospitable. As a matter of fact, Mr. Speaker, even though the Gaspe constituency is economically depressed, the people there still enjoy life and are eager to work. The job creation and economic development initiatives announced by the Minister of Finance will certainly improve the situation for the Gaspe people, but more than stopgap measures are needed. The Industry Development and Industry and Labour Adjustment Programs are two initiatives which could help our regional economy to recover if the required infrastructures were in place. The people of the Gaspe area agree that they have to share the burden and the responsibility of getting Canada out of the recession, slowing down inflation and increasing productivity. Many economists have explained that the lack of social capital, that is the infrastructures, is the main reason behind the lagging economic development in Gaspe and other similar regions. Here is how I would sum up my proposal: there can never be equity among individuals and a truly just society unless the Government of Canada implements measures which are better tailored to meet regional needs and peculiarities.
It is of the utmost importance that governments set up mechanisms and infrastructures in regions such as the riding of Gaspe so that Canadians not be exclusively consumers, but producers as well. The people of Gaspe want a place under the sun in our beautiful and great country and they urge the governments to subsidize employment rather than unemployment.
The budget refers to a program aimed at boosting the building industry. I dare hope that it is only the first of many more stages. We in the riding of Gaspe have to cope with inflation like everybody else and, as I said at the outset, we have to think in terms of adequate infrastructures to spur the economic recovery of our region and encourage investors to set up shop there.
We have nothing against massive investments in such designated centres as Montreal and Quebec City. Still, the products of Gaspe must find their way to those centres and that is why we urgently need adequate infrastructures. Right now, I have in mind the improvements that will have to be made to the airports of Sainte-Anne-des-Monts, Pabos and Gaspe so as to promote the industrial expansion of those regions and centres. I also have in mind the construction of a
The Budget-Mr. Cyr
multiple purpose harbour in the Sainte-Anne-des-Monts and Cap-Chat region, as well as the improvement and upgrading of harbour facilities in Gaspe. Finally, what can I say about the small marinas along the coast of the Gaspe Peninsula? A cursory examination of existing facilities and the lack of infrastructures throughout the region vividly reflect the fact that fishermen are so hard pressed to earn a living at their trade.
Mr. Speaker, I do not want to ask the government for more money than we can rightfully expect. However, within the scope of the programs mentioned in the June 28 budget and others already implemented, I would like that very careful consideration be given to the reallocation of available funds while keeping in mind the particular needs of the people of Gaspe and especially the needs of the whole electoral riding of Gaspe which I represent. That is what is called distributive justice. A good many citizens of the Gaspe area look favourably upon the budget proposals aimed at appreciably lowering the interest rates. Whether buying a new house or beginning construction before next December 31, the first-time home buyer will be eligible for a $3,000 grant. Small businesses as well will be able to get working capital for development and construction at 4 percentage points under the prevailing rate, and fishermen will also qualify for the reduced rate to finance new capital equipment. All those people greatly appreciate the effort of the government and will certainly benefit from those budget measures. As far as 1 know, two businesses in the riding of Gaspe have already applied to avail themselves of the rates at 4 percentage points lower than prevailing rates. Those measures will certainly give a boost to businessmen, fishermen and farmers anxious to run a sound operation, and they will dispel their fears about risks and overly high investment costs.
Mr. Speaker, we all know the major cause of unemployment-the idling construction industry.
The construction industry's multiplier is 3.5. This means that for each dollar invested in the building industry, we are expending $3.50 in other industries such as logging, mining, furniture, textiles, appliances, etc. I am therefore happy that the budget includes various types of proposals to help to stimulate housing. The five-point package may not have in the Gaspe Peninsula the social and economic impact they will have in other areas. However, it will help the lumber industry to recover and provide jobs in sawmills and logging operations.
There is also a $30 million funding increase for the Canada Home Renovation Plan (CHRP), a program that certainly will have a very significant impact in the Gaspe Peninsula as soon as people in that area are aware of the terms.
And of course, Mr. Speaker, the needs are great. People are willing, but there must also be a political will for the whole of Gaspe rather than just one or two cities east of Quebec to experience harmonious development. This is the distributive justice of the Liberal Party, Mr. Speaker.
Recently, I was reminded of Hamlet's monologue that goes like this:
To be, or not to be: that is the question:
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The Budget-Mr. Ellis
Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous fortune.
Or to take arms against a sea of troubles,
And by opposing end them?
People in Gaspe have always had to fight to earn their living. I feel 1 am speaking on their behalf when I say that once more they would be ready to go all out to get the most from the prevailing situation to ensure the welfare of their community. However, they want to make sure that government authorities, under the budget tabled June 28, will ensure that the maximum available funds are used for a consistent economic recovery and reallocation of funds, based on the particular conditions that make Gaspe an area where resource development is slow because of a blatant lack of infrastrutures in various fields. Mr. Speaker, once more we are faced with a challenge. It is the duty of every Canadian to do his part to obtain the security we all are looking for. This budget is a call to reality that every Canadian should answer.


Mr. J. R. Ellis (Prince Edward-Hastings):: Mr. Speaker, I have not taken part in some of the major debates in this House recently, for a number of reasons. The debate on the National Energy Program was skilfully handled by some of my colleagues who have a particular expertise in that area. In addition, I found it necessary to spend a great deal of my time working with individuals and companies in my constituency in an attempt to shield them from the vagaries of this government. Even then I was unsuccessful in my attempt to commit the government to buying better quality, Canadian-built and lower-priced equipment, rather than Japanese.
As for the debate now taking place on this excuse for a budget presented to us on June 28, there have been a number of speakers from my party who have very capably covered the major points and it would be quite easy for me to sit back and allow them to speak on this occasion. Indeed, I would be quite comfortable with most of what has been said to date by my colleagues. There is, however, a facet of this budget which has not, to my knowledge, been dealt with.
My colleagues, by and large, have dealt with the over-all impact of the budget on Canadians. Let me deal for a few moments with its impact on individuals and attempt to add a human scale to this latest travesty by the Minister of Finance (Mr. MacEachen). Let me attempt to break it down and point out what it means to individuals in the riding of Prince Edward-Hastings, a small but I expect typical riding in eastern Ontario.
We have been told that the budget deficit for 1982-83 is a figure of $19.6 billion. That is just a number, Mr. Speaker, one which is very hard for the majority of my constituents to reconcile. I know that I cannot think of it in terms of real dollars. However, when you break it down to an amount of $840 for every man, woman and child, newborn or centenarian, it is a number I can relate to.
Prior to this budget the national debt incurred by the Liberal government was $135 billion, another figure which is just as difficult to understand. It is more manageable when broken down to $5,700 for each person. For people living in the city of Belleville, where I live, this means that the deficit the federal government will incur this year in their name alone amounts to $29.5 million. It is interesting to note that that is exactly the same amount that the entire city administration will spend this year.
Let us look at that figure again, Mr. Speaker. All of the money collected by the city of Belleville this year to pay for the entire administration-the city council, staff, police and firemen, snowplowing, garbage collection, road repairs, street cleaning and maintenance, and the myriad of services provided by the city-will be equalled by that part of the federal deficit owed by the citizens of Belleville. Does anyone really believe there is any comparison between the services received by the people from the municipalities and those from the federal government? I am confident that most would agree they get a far better deal from their city.
Over the years the city of Belleville, like most municipalities, has spent money on capital projects on which in their wisdom they have deferred payment. These include major roads, bridges and other large capital expenditures. This means the city has a debt, and it is roughly $13 million. The federal government has also not paid its way over the past few years and the consequences are, as I said a few moments ago, a debt of $135 billion. In terms of the people in the city of Belleville, that works out to $200 million, or 15 times the debt Belleville has incurred for its own capital works budget. Once again, does anyone really think that there is any benefit to the people of Belleville from that particular debt?
Let me take a moment, Mr. Speaker, to relate the figures to those rural parts of the Quinte district which I represent. If you apply this year's federal deficit to the residents of Prince Edward County, they owe $19 million on top of the $131 million already incurred by the federal government. Compare that to the total Prince Edward County budget for this year of less than $4 million. For Hastings County, if the current deficit were going to be paid this year, it would amount to $88 million. The debt incurred by the Liberal government on their behalf before this budget was some $600 million, and that is still unpaid. These are astronomical figures, very difficult to understand, and even more difficult when you consider that the entire Hastings County budget for 1982 is only $14.5 million. In all of these cases that I have outlined, these are just the deficits. These are just the amounts which the federal government has spent but has not collected.
The federal government spends money at the rate of $214 million a day, $9 million an hour or $150,000 a minute. Thus, when the federal government spends, it spends in two hours and eight minutes as much as the whole of the city of Belleville spends in one year. In 17 minutes and 20 seconds the federal government spends all that Picton will spend in one year. In
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five minutes and 15 seconds the federal government spends the entire budget of Deseronto. The federal government would spend the entire budget of the little village of Tweed, through which many members from Ontario drive on their way to Ottawa, in four minutes. The federal government would gobble up the budget of the pretty village of Wellington located on the south shore overlooking Lake Ontario in Prince Edward County in two minutes and 28 seconds.
How does the federal government spend this money? Some of it goes to items such as Mirabel airport. Mirabel airport has cost the taxpayers of Canada some $700 million to date. That is equivalent to the budget for the whole of the city of Belleville, the whole of Prince Edward County and the whole of Hastings County, not just that portion I represent. It includes the portions represented by my colleague the hon. member for Northumberland (Mr. Hees) as well as by my colleague the hon. member for Hastings-Frontenac-Lennox-Addington (Mr. Vankoughnet). The cost of operating Mirabel airport would be the equivalent of covering all of Hastings County budgets for 15 years.
The federal government has an advertising budget of nearly $235 million. In other words, the federal government spends on advertising alone more than the city of Belleville spends in its whole budget for eight years. Perhaps it is better to leave those figures in the impersonal billions of dollars, because when I get them down to real terms it frightens the hell out of me.
Let me try to relate some of the major items in the budget in more human terms that would apply to the people of a riding such as Prince Edward-Hastings. Many of my colleagues have made the point that senior citizens have been hit hard, in fact hit twice by this budget, once by having their pensions dein-dexed and second by having their income tax deindexed, resulting in their having to pay higher income taxes. I suppose the Minister of Finance knew that those people in their sixties, seventies and eighties were those who came through the dirty thirties; they know what a real depression is like and would probably not complain as much as some younger ones would.
Let me tell the Minister of Finance that these are the same people who have watched this Liberal government over the years, have watched its wasteful spending, have seen the lack of responsibility, have heard the disparaging remarks made about the Parliament of Canada by the Prime Minister (Mr. Trudeau), and have seen cabinet minister after cabinet minister show favouritism to one part of Canada over another. They know how much a $20 million contract to a Belleville firm would mean, or what $30 million in assistance would mean to a Windsor factory. Those things would provide jobs. Our senior citizens also know there was no chance of those things happening because the businesses are located in Ontario.
Yes, the senior citizens are the ones who know how to tighten their belts better than most Canadians. But also better than most Canadians, they probably appreciate that it would not have been necessary had it not been for the action of this government.
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When it comes to restraint, this government has long since forgotten what the word means. I want to go on record as being quite prepared to see cuts made in the salaries of Members of Parliament and senior civil servants. As far as Members of Parliament are concerned, since there are so few it is a token gesture in any event. Senior civil servants, many of whom make twice as much as Members of Parliament and who are fully protected against inflation, could stand a cut both in salary and in real numbers.
How can there be any credibility left for a government whose projections could be so wrong? We have all heard that projections made in the November 12 budget are now admitted by the Minister of Finance to be in error. The authors of those projections should have been fired. Instead, they received major raises.
Why would any businessman want to invest in Canada? Whether it is a Canadian businessman or one from offshore- who would first of all have to fight all of the FIRA regulations-these businessmen have no idea what the tax climate is going to be from day to day. Businessmen who were operating under one set of rules prior to November 12 had those rules changed, even though the legislation was never brought in. In June of this year another change came about. It is doubtful whether that legislation will be passed before another budget is brought in later this year in the fall.
Let me return again to the city of Belleville. When I was mayor of that city I had to prepare a five-year budget for its citizens. I know that my successors continue to do the same thing. Thus it is that if someone wished to know what the city of Belleville is going to spend over the next few years, he or she need only go to the city hall and ask a competent civil servant or a dedicated member of council to get an answer. With over 500,000 civil servants, should the Government of Canada be allowed to do less?
The federal government spends a lot of time advertising what it is going to do and spends a lot of money on programs to provide jobs. What the federal government should do is emulate one young farmer in Prince Edward County who last week alone had nearly 400 students on his payroll on a parttime basis. He had no help from the federal government. He and his wife had to stay up nearly all of Thursday night to make out the pay cheques for his employees. These cheques were in payment for work ranging from a few hours to a full week. The total payroll was over $10,000. If the federal government would spend only a portion of the money it wastes in helping farmers and small-business men do their jobs, there would be far less unemployment.
And how about a small successful businessman in Belleville, who by supplying merchandise at fair prices and excellent service has built a good business over the past 25 years? Even now with a much weakened economy his sales this year will probably equal those of last year. The problem is that with the extra costs imposed on him by all levels of government he will show a loss in his operations this year. He must cut back his staff. He must take advantage of work-sharing programs in order to stay alive, and he will stay alive only with no profit

July 8, 1982
The Budget-Mr. Gray
and little incentive to continue. Is this any way to treat a businessman who has dedicated his entire life to building his business, to hiring and training people and to providing benefits for a number of employees? Is this how to provide incentives for prospective businessmen?
This government has lied to the people of Canada in so many different ways that it is difficult to enumerate them all. Can one really believe that the budget deficit will be only $19.6 billion, given the track record of ministers of finance to date? Would a person really start a new business knowing that he has to compete with the federal government for available dollars in order to run that business? Could one plan one's retirement knowing that one's pension is at the whim of this government? Would you even buy a car, Mr. Speaker, knowing that this government two years ago said that an 18-cent increase in the price of gasoline was too high? The answer, of course, to all of those questions is a flat no.
The few stop-gap measures in this budget that are of some value may well be turned around before the end of this year. Nowhere in the budget does it say that the statements in it are the policy of the federal government and will remain so. There is really only one answer that taxpayers can give this government. It is very simple. For the sake of Canada, for the sake of all Canadians, and in the name of God, this government should go. It should get out and let someone else do the job.


Hon. Herb Gray (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Mr. Speaker, I suspect that by this time in the budget debate Canadians will be reacting with dismay to the kind of rhetoric which we have been hearing from hon. members opposite. While I realize that we refer to hon. members opposite as the opposition, it seems in this case that "opposition" has meant anything but the constructive alternatives which one expects in our parliamentary system. Instead, members of the opposition are like artists who use only black paint; an unusual concept, perhaps, but difficult even to know when the work is completed, let alone what it is meant to convey.
Certainly Canada, along with the rest of the industrialized world, has serious economic problems. Equally obvious was that for these difficulties to be overcome, a course for Canadians to follow had to be charted. An example of leadership had to be given, and the Minister of Finance (Mr. MacEachen) certainly described that course and set out that example of leadership in his budget.
Now, we do not claim that pointing the way to the solution of our country's problems in the budget presented last week immediately solves those problems, as some opposition members wish Canadians to believe is possible. As the Leader of the Opposition (Mr. Clark) said in his recent interview with La Presse of Montreal before the budget, he has no alternatives. In his speech in this debate he certainly proved this to be absolutely true. In reviewing the remarks of opposition members in this debate, there have been the usual kinds of contradictions-at one and the same time calling for increased expenditures and urging a reduction in the deficit.
The budget proposes a balanced route to full recovery, one that calls on Canadians to work together. It calls on those in a better position to do so to aid those most in need, as Canadians have done on so many occasions in our past history. The government in the budget is pointing the way by setting an example for others which I believe must and will be followed. The budget outlined the basic choice-working together for economic recovery or having to continue on a course of high costs, high inflation and lack of international competitiveness, efficiency and productivity.
In a world in which Canada would be isolated from all around us, we might well see our problems dramatically reduced without action by government and the private sector working together; but we do not live in such a world. We are part of the global economy and, as such, we suffer to a substantial degree from the problems of others. Within these kinds of constraints, the government has presented a program in the budget aimed at restoring the Canadian economy while protecting those most in need.
One could say that one of our country's problems is that our successes-and there are many-are obscured by the more strident, the more fearful and the less confident among us, especially those on the other side of the House. Certainly the budget does not ignore the general problems of our economy. The program proposed by the Minister of Finance directs help to those most seriously affected, and it urges everyone to contribute to the solution through government, business and labour working together. The budget could not and did not try to do everything for everyone, but it has asked that everyone do their part. This was in the firm belief that Canada's success is based upon all of us working together in a sense of solidarity and sharing.
I believe that request to be a positive aspect. There are those who speak only of the restraint which is required while ignoring that the reasons the restraint has been requested are to increase assistance and support for those in need, particularly those seeking employment, and to help get the entire economy back on a track of productivity and growth.
Much has been said in this debate about the deficit. We recognize the deficit to be a serious matter. We have not agreed with those who say that the deficit should be increased even further. Also we have not agreed with those who call for steps to lower substantially the deficit at this time, because to do so would only mean pulling substantial purchasing power out of an economy where market demand is already far too weak. It would mean putting even tighter restraint on an economy in which growth of gross national product has already stalled and needs to be encouraged.
Our deficit increase came from the operation of automatic stabilizers in our government expenditure and revenue system. Government tax revenues fell as corporate profits and personal incomes fell. The government spent more but mainly on programs such as unemployment insurance and job creation. Without the operation of automatic stabilizers, the effects of
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the recession would be worse, the hardship even more severe. The funds provided in the budget will be spent on productive activities to create jobs, to combine with private sector initiatives and investment, and to provide needed assistance to sectors like small businesses, farms and fisheries. As an economic recovery comes about, the basis for correction of our deficit situation will be there as well. As profits and incomes improve, government tax revenues will also improve. As more people get off the unemployment rolls, expenditures on programs like unemployment insurance will decrease.
We have in this budget a number of measures aimed at directly assisting the recovery of the economy. Thus the Minister of Public Works (Mr. Cosgrove) set out measures described generally in the budget aimed at greatly improving the housing sector. These measures will have a tremendous multiplier effect, encouraging not only the construction of houses but also activating sectors such as appliances, furniture, textiles and forest products. These measures will be the source of more than 100,000 jobs. They will also provide additional help to those who could be spending an excessive amount of their income on home renovations or on renewal of their mortgages and the interest costs involved therein.
The Minister of Employment and Immigration (Mr. Axworthy) has given details of the measures generally set out in the budget aimed at direct job creation through government programs which will have the effect of maintaining incomes while the economy recovers and permanent jobs are created through private sector activity.
In addition, the Minister of State for Small Businesses and Tourism (Mr. Lapointe) has provided a more detailed description of the budget measures to provide new assistance to small businessmen, fishermen and farmers through the new program of direct grants aimed at reducing the interest costs of money borrowed for new capital expenditure by up to four percentage points.
The measures to help the housing sector, to help home owners deal with high mortgage costs and to help workers maintain income through participation in government job creation programs are aimed at bridging the gap before implementation can take place of the far-reaching and very innovative proposals for new kinds of measures for all lenders of savings and purchasers of shares in Canadian companies to help them be free of tax on the portion of their interest or their gain represented by inflation. These new measures would make it possible for small business people, farmers and fishermen to obtain funds at interest rates several percentage points lower than prevailing market rates. I am confident the government will want to implement these measures as soon as their feasibility and design are confirmed by the special private sector committee headed by Pierre Lortie, president of the Montreal Stock Exchange.
1 want to ask the House to give special attention to the programs in the budget which add some $300 million to the economic and regional development envelope to assist the
The Budget-Mr. Gray
private sector in the creation of long term, permanent jobs through existing programs like the enterprise development program, the defence industry productivity program, the regional development fund and the program in support of technology-enhanced productivity.
There are a number of good examples that can help to demonstrate why this funding has been added and to illustrate the potential of such funding. Just look back, Mr. Speaker, at some of the announcements I have made over the past five or six weeks. 1 announced that Control Data of Montreal, with the assistance of the enterprise development program, would be developing a new super mini-main frame computer with a world product mandate for its production in Canada, and this is expected to create some 600 jobs.
Then, not long afterward, I announced that again with the support of the enterprise development program of my department Mitel of Ottawa would be developing and marketing a new advanced private automatic branch exchange system, the SX-2000. This could well be providing more than 1,000 jobs both in the Ottawa area and Quebec for people making this new advanced product which would provide the nerve centre for equipment in the new offices of the future.
Not long after that I announced that, again with the support of one of my department's programs, the defence industry productivity program, Litton Industries of Toronto would be manufacturing, once again on a world product mandate basis, a new type of inertial guidance system for commercial aircraft using the new ring laser gyro technology, and this is expected to provide some 1,000 jobs. I was happy to take part in the ceremony marking the delivery of the first such system to Aerospatiale of France. Incidentially, this indicates how we already have the potential for leadership and competitive access to world markets for equipment like those connected with aerospace, electronics and the telecommunications sector.
Just a few days ago I announced that Leigh Instruments of Carleton Place, not far from Ottawa, would be making some very important new components for the new CF-18 fighter plane in association with Lear Siegler of the United States, again with the help of the defence industry productivity program of my department. This is also expected to create a substantial number of new jobs.
What we are talking about here is assistance to lever high-quality additional jobs and advanced technology activity in ways that support new Canadian-controlled advanced technology firms and, yes, foreign-controlled firms operating here on a world product mandate basis which are bringing substantial benefits in terms of jobs, technology and exports to the Canadian economy.
When I refer to developing our own economy I think it important to refer to the role of the Foreign Investment Review Agency. There are those who continuously and perhaps-although I hope not-even deliberately misunderstand or misrepresent the agency and its function. 1 want the House to remember that FIRA has served to ensure that the limited areas of foreign investment it deals with are of significant

The Budget-Mr. Gray
benefit to Canada. That is its basic mandate. 1 would hope that there is no one in the House or in the country who would wish foreign investment to be otherwise for the Canadian economy.
The recent changes announced in the budget, changes of an administrative nature, are based on the work of an interdepartmental committee under my direction, in a process of administrative review that was announced in the economic development document tabled with the last budget. I have long believed that administrative improvement in FIRA was essential to the efficient and effective functioning of the FIRA process. My work as minister has certainly strengthened this belief I held before I assumed this present responsibility.
As the Minister of Finance said in his budget:
The Foreign Investment Review Act must be administered to adhere to the objectives established by Parliament. Its procedures must be timely and efficient. In particular, efforts must be made to avoid red tape and extended delays.
The measures announced have been developed to deal with these issues. We do not want to have administrative impediments making it difficult for FIRA promptly and efficiently to help the government on behalf of the Canadian people to ensure that, to the extent it is needed, investment from abroad is in fact of significant benefit to Canada. We certainly welcome such investment, but we want to encourage and ensure that it is of significant benefit for Canadians. I suggest that the rhetoric about FIRA somehow frightening off that investment is simply that, just empty rhetoric not based on fact because the number of applications to FIRA has been steadily rising. The United States department of commerce said in a recent survey that affiliates of U.S. parent firms in Canada intend to invest more in this country than in any other country in which subsidiaries of U.S. parent companies operate.
As many have said, businesses operate best when they have confidence. However, I believe the essential element to business confidence is confidence that they will be able to make a profit. The Foreign Investment Review Act is certainly not intended to be a roadblock to investment aimed at creating employment which does not simply operate to perpetuate the branch plant environment that has been of so much concern to so many people.
We have a responsibility to Canadians to ensure that the Canadian economy is vibrant and growing and certainly, as in the past, the Foreign Investment Review Act which was a mandate created by Parliament will play a very important and positive role in that regard in the future.
I want to conclude by reminding the House of the basic concepts of the very important budget presented by the Minister of Finance a few days ago. First, the minister pointed out that we must work together in order to enter an era of growth based upon 6 per cent increases in costs in Canada. We must move away from the present 12 per cent world of inflation and into a 6 per cent world of growth. We must operate on a basis of government leadership and example. We are certainly doing this. We must operate on the basis of government, labour and business working together in a co-operative and consultative way. As well, we are certainly doing this. We
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must make major efforts not only in support simply of direct job creation, important as that is, but in support of efforts by the private sector to create permanent, long-term jobs. We are making a major commitment of government funds toward this purpose.
I think it has been clearly demonstrated during this debate that the budget presented by the Minister of Finance a few days ago is a courageous and much needed effort to chart a course of leadership to bring the Canadian economy back on a path of full growth and development and all that this means for Canadians and their families. Therefore, in order to help Canadians achieve this goal, I ask the House to vote conclusively and overwhelmingly in support of this budget in the interests of all Canadians and future generations.


John Raymond Ellis: Mr. Speaker, on a point of order, would the minister allow one brief question?


The Acting Speaker (Mr. Ethier):: Is that agreed?


Herbert Eser (Herb) Gray: Mr. Speaker, if there is time I would be happy to do so.


John Raymond Ellis: I will be very brief. My question has two parts. Could the minister who spoke so glowingly about the new programs and concepts tell me first-since it was not indicated in the budget speech-if this is the policy of the federal government; and second, can I tell businessmen in my riding that these new concepts and policies will be in place a year from now so that they can count on them?


Herbert Eser (Herb) Gray: Mr. Speaker, if my hon. friend will have the common sense to speak, work and vote for the budget, they will be. I hope he will have that common sense.


Henry Perrin Beatty: Mr. Speaker, would the minister entertain a second question?


The Acting Speaker (Mr. Ethier):: That can be done with unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Henry Perrin Beatty: The minister spoke of the deficit. Could he indicate to what extent he accepts personal responsibility for the deficit because of the Consolidated Computer fiasco, where he urged the continuation of spending on Consolidated Computer which cost Canadian taxpayers $125 million?


Herbert Eser (Herb) Gray: Mr. Speaker, I would ask my hon. friend why he did nothing for the nine long months the Clark government was in office to correct the situation. That situation had built up for ten years before I became minister. He let the problem go on. I brought it to an end, while preserving the technology base and the 300 jobs involved. If anybody has to take responsibility, it is my hon. friend and his government for their negligence which I had to correct.


Mr. Blaine A. Thacker (Lethbridge-Foothills):: Mr. Speaker, I rise to speak to the June budget. It never ceases to amaze me how the Liberal cabinet would put the entire blame for the
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nation's problems today on the nine months that the Progressive Conservative Party was in power. One would think that the whole nation collapsed during that nine-month period whereas in actual fact it took nine months to find out all of the graft, corruption and evil that they had hidden away in the closets. They were so numerous it took nine months to count the skeletons in the closet before we could even start to address the problem. Fortunately for them they were able, in coalition with the New Democratic Party, to bring down the Clark government, and once again the cloak of secrecy has fallen over the affairs of the nation. They can continue to add skeletons where the others lie.
I want to speak to the Canadian people and other members of this House about the underlying philosophy of this budget. Canadians have now come to realize that there is an economic philosophy in this country. The great Liberal Party of years past has now become really a party like the NDP. It is really a philosophy of socialization.
There is a difference between the parties, and I want to discuss that. Regretfully, Canadians now have to pay the price for having elected successive Liberal-NDP coalition governments. It is a truism that the sins of the fathers are visited upon their children. That is what the Canadian people are suffering today.
It is my thesis that the Liberal Party has changed fundamentally from that party of reform of the early forties and fifties, a party that many people fell in love with because it was going to redistribute and create genuine justice and equity. It no longer is that. It is merely a centralist, socialist and nationalist party. I will show how that has not worked to the benefit of individual working Canadians.
Ordinary working Canadians are now injured and in a position where they are worse off then they were in 1968. That should always be where we start because the true test of any government should be the condition of ordinary Canadians.
I challenge any member of the Liberal Party or the NDP to name even one socialist state where the ordinary people are better off than the Canadian people were in 1968 but not today. In 1968 we had a very low unemployment rate. There was basically full employment. The unemployment at that time of 3 per cent to 4 per cent was the ordinary case of people moving to new jobs. Youth unemployment was low. Inflation was 4.2 per cent. The bank rate was 7.5 per cent. Government spending totalled about $12 billion compared to financial requirements today of over $17 billion. The government deficit was small.
However, at that time we had a solid country. This was an exciting nation. 1 graduated in 1968. All the young people had jobs to go to. This was truly a dynamic nation. There was the unity of Expo '67. We had a health insurance program and a medicare program that was sound. We had post-secondary education that was expanding. It was really a treat to be part of it. We had old age security, the Canada Pension Plan and a solid private entrepreneurship base that was creating wealth, bringing in technology and developing modern ways to search for oil in the west.
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We had a research and development component that was adding new cereals, grains and alfalfas. For example, canola has returned billions of dollars to this country. We had all of that in 1968. We were respected internationally and we were clearly charging ahead.
Then this Prime Minister (Mr. Trudeau) was elected who, by his own admission, is a socialist. The Prime Minister has never denied that. Members on the government side try to deny that, but not once has the Prime Minister. He has always been straight up and honest with Canadians. He honestly believes that a small cabinet and a bureaucracy around it can make decisions that are far wiser than having millions of individual entrepreneurs make those decisions. One need only review his writings at university to find that. He has never denied it. Not once has the Prime Minister denied any of his writings, and nor should he because he has never tried to deceive the Canadian people. He has always told them the situation exactly.
Since that date we have a steady march toward government involvement. That is what socialism is. It is the taking over of the marketplace where millions and millions of decisions are made and reducing it so that the decisions are made by one group. That is a government in power. They have done that by way of Crown corporations. Over the last 14 years the number of Crown corporations has increased by well over 200 so that the total now is over 400 Crown corporations in the country.
One need only look at Bill C-124, the government restraint bill, which lists all of the Crown corporations, all of the regulatory agencies and other agencies that respond to government, to find that the bulk of them came in during the last ten to 14 years. During that period the nation has seen a steady decline in vitality. I do not believe it is an accident that Canada faces the problems it does today. It is the direct result of the centralization of power and the nationalization of decision making in this nation.
At the same time, the tax system has changed dramatically. Under the old system, if a person started a business and incurred an expense in the process, it was automatically deductible against whatever income the business earned. That is not the case today. Today all of the money goes into the centre. We must come to Ottawa with hat in hand and on one knee. The government will decide whether you get a grant. That is a different system from what we had before.
Previously in the oil industry you would bring together a skilled group of engineers and scientists that would do the seismic work. They decided where to drill based on the scientific data. When they drilled they would deduct the cost from the revenue if they found oil. Now they first have to come to Ottawa. Depending on where they are going to drill and depending on their rate of Canadian ownership, they might get a grant that goes from 90 per cent if they drill where the governments wants them to, down to less than 50 per cent if they drill where they decide. We are going to have wells being drilled in areas where the government wants them drilled, not necessarily where the oil is. When you drill a dry hole, which averages about $5 million, that money is gone. There is no

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recovery from a dry well. The billions of dollars that will be lost to this nation as a result of that process is a tragedy. It makes anyone who knows the oil industry weep.
The ordinary Canadian citizen is always at the end of the whip. No matter how the government tries to say they can pull money out of the air, that money basically comes from Canadian citizens. If you look at the statistics on the amount of money that is put up by citizens, Mr. Speaker, you realize that we truly are back to the days of feudalism and that we are all serfs. A slave is really just someone who is taxed 100 per cent. Therefore, as an economic creature, all of his economic rent goes into the hands of another person who decides how to spend it. The slave has no decision-making powers.
That is what is happening today. If one adds up municipal, provincial and federal taxes, one will find that well over 50 per cent of one's economic rent goes into the hands of other people who decide how it should be spent rather than you. That is the difference between the parties. The Liberal Party, which is clearly with the NDP, very much wants that economic power to come into the centre and then the cabinet will decide how it will be distributed, as compared to our party which would leave it with millions and millions of individual people. We believe that the collective result of millions and millions of decisions is far wiser than one made in the middle.
Then there is the deficit. Clearly, $20 billion is almost intolerable. We then find Bill C-125, which the government wants us to approve, a bill which would let it borrow $11 billion. Just a few days ago I stood up to oppose a previous bill which would have allowed the government to borrow $6 billion. I suppose that in another three months it will be up to another $15 billion, because the government now must go out into the marketplace. Over and above all the billions of dollars it collects from people through income tax and other direct taxes, whether sales taxes or corporate taxes, the government must go out and raise an additional $17 billion. It is no wonder that interest rates are high, because the government needs the money. Therefore it jacks up interest rates. If we did not have the deficit we would not be paying the interest. That is the lesson that people have to learn in their own lives. If one does not get into debt, one does not have to pay the interest.
Where are we? As a result of this administration, we now find, in 1982, that health insurance is in real trouble. We find that the medicare system is failing. We find that post-secondary education is weak and getting weaker when at this time it should be stronger. In terms of the international sphere, never have we more needed trained, high technology people, yet in the last fiscal agreement the federal government cut its contributions.
We are losing indexing of old age security payments. People receiving benefits under the Canada Pension Plan are in real jeopardy because their premiums came into Ottawa, but did Ottawa put that money into a fund which would generate wealth for them? No. It lent the money out to the provinces and at a very low rate of interest, the theory being that when more people were taking out than putting in, the provinces
would pay back the loans to the federal government which would then distribute it under the Canada Pension Plan. But seven provinces east of Saskatchewan all have enormous deficits. They took the money, spent it on programs and do not have it now. They are in a deficit position. Therefore, we are in the absurd position that when the pay-out from the Canada Pension Plan is greater than the premium income, the provinces will be called to pay the debt back. Where will they get the money? They will have to increase taxes on the very same people who in earlier years paid their premiums. So they will be doubly taxed. It is incredible but that is the burden the Liberal administration has put on this nation.
Again, in 1982 unemployment affects 1.3 million people. Canada is no longer an exciting, dynamic place for young people to come out to as it was in 1968 when I was graduating along with many other members. There is a real uncertainty among our youth because their unemployment rate is 17.5 per cent nationally. It is over 40 per cent in some specific provinces.
We then get back to the National Energy Program which single-handedly destroyed the most exciting and dynamic industry in the west, one which would have carried this whole nation through these tough times because thousands and thousands of young people were coming from across the country to take jobs in Alberta. Had that Alsands plant gone ahead and had the Cold Lake plant gone ahead, with the petro-chemical upgrading plants they could all have had jobs. Now there are no jobs. Interestingly enough, it is the young people from Ontario and Quebec who are having to go back to their homes and say that they do not have jobs, although there is still enough economic development in Alberta to absorb the Alberta graduates. So ironically it is not hurting the very people whose province the energy program has hurt.
Of course, from a narrow, selfish point of view, Albertans would be entitled to say: "The longer the oil stays in the ground, the better it will be for our children and for our grandchildren". The only reason they were producing that oil in the first place was for the good of the nation, not for any selfish need on their part. Inflation is now at 11.8 per cent. The deficit is at $20 billion. What does that do? Governments operate around balanced budgets. Therefore, in bad times they would go into debt in order to make the capital investments that would make capital available for industry to create jobs and then, in the good times, the tax revenue would flow and they would pay back the debt so that they could go around that zero line. Sometimes there is a deficit in good years; it is paid back and a surplus may even be built up. Then in bad years it goes down. What happens when one gets into a deficit position is that one will always go around the line.
Now the Liberals are going around the line of annual deficits of about $20 billion and a net deficit of about $20 billion and a net deficit of something over $100 billion. The problem is that one is still going around that line, but out of the revenue one must pay interest on that deficit. Therefore, something like 25 per cent or 26 per cent of every revenue
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dollar is simply servicing the debt. What that does is to concentrate wealth. People who have money in the bank were doing just fine. I have invested my cash. Some people have even sold assets and put the money in the bank because that wealth is concentrating the interest on $100 billion. What that does is create a class society. It simply means that the rich become incredibly rich, the poor have no chance of getting out and the middle class is being eroded from the bottom. It is becoming smaller and smaller. Pretty soon we will be in a situation similar to that found in India and all the other Third World countries where there is either a fascist dictatorship on the top or a socialist-communist dictatorship. There will be incredibly rich people and incredibly poor people. Well, that is not what Canada is all about. If one speaks to ordinary citizens, one finds that that is not what they want; but that is exactly what is happening to this nation and it is happening because of deficits.
I can say to hon. members opposite that the parents of those of us from the west learned that lesson, because during the thirties the province of Alberta had to default on provincial bonds and that was such a humiliation to the people of Alberta at that time that they put in a Social Credit government, and British Columbia very quickly followed. There is a public populist feeling that they will not tolerate government deficits.
I come from that milieu, I can see the history of it and I believe that to be correct.
I will be presenting a private member's bill to change the Constitution so that governments cannot take us into deficit positions. For years, the Liberal government has been able to offer programs like this, good programs, but with a low capitalist tax. It says, for example: "Relax; here is the program and your taxes will not change. We will then borrow it all at the same time." First at 10 per cent, then at 15 per cent and then at 20 per cent. Now, over 25 per cent of our revenue services that debt, so we are now getting socialist taxes to meet the socialist programs. But in the meantime people have gone out and bought houses that are too big, they have huge mortgages, they have paid too much for land and they have paid too much for businesses. With the combination of high taxes to meet these programs, they are just falling like flies. There are tens of thousands of bankruptcies in this nation, and that is unnecessary. When a government offers a program, it should be forced to say to the people: "Flere is the program, here is the tax. What do you think? Do you want it?" If that were done, people would give their views and governments would not get themselves into such trouble.
It is no accident that we are where we are. It is not the fault of the United States of America; it is not the fault of the European Economic Community; it is not the fault of the Premiers. We are in trouble because the Canadian people elected a Liberal-NDP coalition. They had the right to do that and that is what they did. That coalition is governing with its majority. I am naturally hopeful that in the next election the people will realize that in the long term the nation should not
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permit a concentration of power. It does not matter to me whether it is a Liberal government, a Conservative government or an NDP government; any time a nation permits the concentration of power into too few hands, there will be trouble. That is exactly what the battle for Parliament was about. Kings had absolute power. The power of those kings is now exercised by the executive-the cabinet-and the cabinet is supposed to be responsible to all of us. That is the part of our form of government which has failed. Because of party discipline, individual government backbenchers have not stood with sufficient vigour against the tendency of the cabinet to concentrate power.
The alternative thesis is that they agree. Perhaps Liberal backbenchers agree with everything the Cabinet has done. Perhaps they agree with the National Energy Program in total. Perhaps they agree with the budget and its deficit. If that is so, the only solution for the Canadian people is to turf them out on an individual basis. I suppose that is exactly the solution.
What is this socialism about which we talk? Some people laugh and hoot, as if socialists were communist in the sense of Brezhnev and his crew. That is not the model of socialism about which I speak. I speak about socialism as the economic system whereby there is public ownership and control of the means of production. That is exactly what has been happening in this country.
1 explained earlier the operation of the oil industry and that prior to the National Energy Program entrepreneurs made decisions about where they would drill. Now it is government which decides. It is government and bureaucracy which decide where driling will take place. Bill C-85 is legislation to establish a corporation called Canagrex to promote, facilitate and engage in the export of agriculture and agricultural food products. This legislation is in exactly the same position as the Petroleum Administration Act some years ago when the government decided it wanted to move into the oil industry. This Canagrex legislation will mean the ultimate takeover of food production in this country. When we have powerful government, what happens is that it causes problems, and the solution is not to have less government but more. As we get more problems, we get more government.
It becomes a circle, and ultimately we end up with a country like Russia. The classic example is eastern Europe, where they used to export food but people now stand in food lines. Bureaucrats and politicians in Russia decide that there will be so many million hectares of wheat, so many million hectares of barley, oats and so on. A mechanism has been put into place whereby seed is distributed to farms at the "right time". But they always forget that mother nature plays a hand. Sometimes there are late rains. On July 15 when farmers should be sowing barley, because some bureaucrat has said they should sow wheat, in goes wheat. Farmers at the state farm level know it will freeze off, and it does. Under our system, if it rains here or hails there, the individual farmer can make the instantaneous decision to change his crop. Therefore, we invariably have a huge surplus, which contributes some $6 billion to our trade balance.

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To the extent that Canagrex takes decision-making away from individual farmers we will be in trouble, and 1 have no doubt at all but that Canadians could be standing in food lines too, because when we get beyond the export of cereal grains, Canada is a massive importer of food. It is not at all beyond the realm of possibility that Canadians could be standing in food lines. If there ever is a blockage of that line of trucks coming in from the United States of America, Canadians could be standing in food lines within three days.
Somehow we think we can kick the United States around all the time. We live under its nuclear umbrella, yet we stand up and say we are nuclear free. We forget that we are involved in guidance systems and testing of Cruise missiles. We seem to think we can kick the Americans and still live under their protection. We are going to learn a hard lesson.
The prime vehicle on the road to socialism has been Crown corporations, of which I said there are over 400. In Bill C-124 we can see the details. I explained how we are using the tax system to make us more socialist. Unfortunately, the defect is that socialism simply does not work because the government causes problems and then creates more government to solve them. The classic example I mentioned on an earlier occasion is Petro-Canada. Some years ago it started with $300 million or $400 million. Every year since then it has come back, and the Liberal government has procured hundreds of millions more into it. Direct total investment was some $2 billion cash, but Petro-Canada still was not working so we gave it a 25 per cent back-in provision respecting oil lands in the north. That was not working, so we just outright confiscated 25 per cent of the oil lands from other companies and gave them to Petro-Canada. It is still not working, so now we have the ultimate provision. Every time any citizen drives up to the gas pump, he pays approximately four cents per gallon off the top, which goes to Petro-Canada. Petro-Canada will succeed if it takes every penny out of every Canadian's pocket. It cannot fail because it was created by a political cabinet; it has to succeed. It does not matter whether the cabinet is Liberal, Conservative or NDP; their reputation is at stake, so Petro-Canada will succeed no matter what. As the years go by, we will see more and more money being poured into Petro-Canada, and it simply will not work.
Another way governments hurt people is by reneging on agreements. The classic example is the treatment of federal superannuates by this budget. There are approximately 120,000 retired federal public servants who have average incomes of just over $7,000. The surviving spouses of retired civil servants have average incomes of about $2,100. Those men and women worked 20 or 30 years and paid premiums in order to be entitled to their pensions. That is fair enough; private industry does the same thing. However, federal public servants paid an extra 1 per cent in order to have their pensions indexed. Throughout the course of their lives they gave up an extra 1 per cent of their incomes in order to have protection from inflation in the future.


Mr. Kristiansen:: You opposed it.


Blaine Allen Thacker: The most recent budget did away with all that. We have confiscated 1 per cent from our retired federal civil servants. It is just gone. There was no point in their having paid it at all. They might as well have paid just the ordinary premium. One might think a government truly committed to equity and fairness would at least say to federal public servants at this time, "We will not collect the 1 per cent from you", but the government will continue to collect the extra 1 per cent during this two-year restraint period. Alternatively, one might think the government would feel some obligation to pay the 1 per cent back. It could say, "Look folks, we cannot honour our part of the agreement; therefore, we will at least give you back your money". If I sign a contract with somebody who does not perform his part of it, surely I am entitled to damages or at least to get my investment back. The government stopped that. There is no shame on the government benches, Mr. Speaker.
I have examined what happens with other nations because I was interested in the extent of centralization of power and socialism that there has to be before a system breaks down.
We all know that in Poland people have to stand in line to get food. Some people may think that this is because the government took over the farms, but that is not so; over 90 per cent of the farmland in Poland is owned by individuals. The government has taken over all the support services, however, such as the distribution of fertilizer and seeds as well as the processing of crops. So even if ownership of land is left in the hands of individuals, they will still have to stand in food lines if there has been nationalization of the infrastructure of farming. That is what happened in Poland.
We have an example of this in Canada that members of the New Democratic Party should be glad to-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but I have to inform him that his allotted time has expired.


Mr. J.-Roland Comtois (Terrebonne):: Mr. Speaker, it is a real pleasure for me to take part in the budget debate this afternoon. I would like to remind my colleagues that in the last few days, all the media have been saying that while the November budget was prepared by public servants, the latest budget was prepared by politicians. That reminds me of a saying that is rather popular in my area: The experts are always right except when things go wrong, and then we call in the politicians. Let me give you an example. In October 1981, I wrote to the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) to submit a proposal for a Canadian interest rate policy. I thought he might find it useful in preparing the November budget, but coming from a member and a politician-and since the budget was apparently prepared by public servants-obviously my proposal was not accepted.
July 8, 1982

It is some consolation to me today that the Minister of Finance probably decided, this time around, to put his hand in, and I see that the budget contains most of my recommendations. This is rather interesting because, at the time, I told him how important the interest rate issue was to Canadians, and I also told him about the uncertainty caused both by inflation and high interest rates, especially for farmers, the housing industry and small and medium-sized businesses. I tried to draft a policy statement, in very simple terms, that would deal with inflation and interest rates while at the same time protecting investor profits. I knew my concept could be further refined but, in any case, the important thing was to propose a truly Canadian policy on interest rates that would apply to very specific areas such as agriculture, housing and small and medium-sized businesses.
I therefore proposed a formula that dealt both with the rate of inflation and investor returns, and I told the minister that interest rates should never be in excess of 75 per cent of the market rate. I submitted a series of tables, and this is all in line with what the minister put into his budget. For instance, with an inflation rate of 3 per cent we have an interest rate of 9 per cent, and an inflation rate of 12 per cent could raise the interest rate to 18 per cent. The minister is proposing more or less the same thing, although with a different formula. And that is why this evening I am very pleased, Mr. Speaker, with this opportunity to inform the House that the June 28 budget meets my expectations, especially in the areas I mentioned.
I should like to go over what the budget means to the average Canadian citizen. I believe that the budget is made for Canadians as a whole. It will help those who most need lower interest rates. Parents who have trouble making both ends meet will receive higher tax credits. Purchasers of new houses will receive a grant. Businesses will pay less to borrow from the banks. Of course, government tax revenues will be reallocated during the next two years to activities that will create jobs and promote investment immediately. This budget aims at restoring confidence, which was on the decline, as everyone agrees, confidence in a future when inflation will be lower and new investments will create the jobs needed. With this budget, the government is taking the lead in a two-year national effort. It wants to join with the other levels of government, businesses and workers to reduce inflation and promote economic recovery.
What are we doing exactly? Instead of letting wage settlements attempt to catch up with inflation, the government has decided to limit salary increases in the public service to 6 per cent this year and 5 per cent next year. What does this mean exactly? It means that the 500,000 people who work for the government and Crown corporations will get a maximum increase of 6 per cent. This will represent a saving of $250 million this year and $550 million next year for allocation to programs designed to stimulate the economy and create much
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needed jobs. Who will be affected by this initiative? Everyone who works for the government and for most Crown corporations, ministers, Members of Parliament, Senators, deputy ministers and senior public servants, or about 500,000 people.
It is to be hoped that this decision will make provincial and municipal governments reflect on their own approach. Let us hope also that big companies, utility companies and labour unions will consider this suggestion carefully. If all sectors of society could agree voluntarily on a ceiling of 6 per cent, inflation would be reduced and more jobs would be created before long. What is the government trying to achieve in the June 28 budget? First, to tackle high interest rates-the highest priority, of course-at the same time to tackle inflation, to reallocate funds in order to create jobs, to help the housing industry and to introduce tax proposals. These are the five important points to remember. How does the budget tackle high interest rates? In order to promote the housing industry, the purchasers of new homes will receive a $3,000 grant on purchase. This is a positive measure since we know that housing is the prime industry to get the economy moving.
I can tell you, Mr. Speaker, that in my constituency of Terrebonne, contractors used to be able to build from 2,500 to 3,000 new homes a year. Last year, only 400 to 500 homes were built. This year, only a few hundred homes have been built to date. Thanks to this measure and others, it will be possible to boost residential construction without delay, and this will create thousands of jobs and generate economic benefits throughout Canada.
Second, small businesses will be able to secure loans at interest rates 4 percentage points lower than prevailing rates to invest in new plants and equipment. As you can see, Mr. Speaker, this is very much like the proposals I submitted to the minister last year. Farmers will also be able to secure loans at interest rates 4 percentage points lower than prevailing rates to finance new equipment. As for fishermen, they will also be able to secure loans at lower interest rates to finance new equipment.
Another way of fighting high interest rates will be the creation of a new type of indexed term deposit certificate with a competitive interest rate. Income tax will be paid only on that part of interest income that exceeds the inflation rate, and here again I could give examples. If for instance a person bought a $1,000 indexed term deposit certificate with a 16 per cent interest rate while the inflation rate is 11 per cent, his or her interest income would be $160 but he or she would be taxed only on $50, the difference between the inflation rate and the interest rate. Again, it can be seen that these factors are taken into account, as I had suggested.
These new indexed term deposit certificates should attract $3 billion a year that will be available for reduced interest rate loans, through that tax relief, to new home buyers because the big problem for buyers is high interest rate and the unavailability of long-term loans. Currently, this is the real cause of the

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slump in residential construction. When the proposed plan matures, small businesses, farmers and fishermen will be in a position to borrow some $12 billion to $15 billion a year at reduced interest rates, through that tax relief, to invest in new plants and equipment.
Second, while stimulating employment, residential construction, the expansion of small and medium businesses, farming and fishing, we must try to reduce inflation, and to that end, we have decided to place a 6 per cent ceiling on the indexation of deductions and personal income tax brackets for the 1983 tax year, and of 5 per cent for 1984. In order to set the example for provinces and private industry, the government is putting a limit on pay increases throughout the Civil Service. Mr. Speaker, it is my view that examples will be followed, and hopefully other sectors in this country will follow suit and fight inflation also. Therefore, these specific measures on public servants, salaries, transfer payments and administered prices show that the government is embarking on a two-year fight on inflation. This, in my view, is the message we must put across to our people.
There is also the $1.4 billion funding for direct job creation and other programs. Much criticism is being levelled at the government deficit that will total $19.6 billion. That criticism borders on obsession. If we can reduce our expenditures generally, instead of directly reducing the deficit, let us invest those expenditure reductions into the most dynamic areas. I feel there should be a review every two or three months, following which the most buoyant industries in our economy would receive more assistance in order to stimulate job creation while those which are lagging behind should of necessity receive less. This is the right way, in my view, to promote economic growth efficiently in this country. I believe that the best way to reduce the deficit is to generate higher revenues instead of cutting left and right through our often essential programs, in social services for instance. Therefore let us generate more economic activity, more revenues for the government, and the deficit will reduce itself, without making cuts that are too harsh for most Canadians. We should encourage competition between the most aggressive businessmen in this country. For this reason, I wholeheartedly support direct job-creation programs in some specific sectors. We have allotted, among others, $300 million to existing incentive programs to create employment in private industry. Two hundred million dollars more will be allotted to direct job-creation and $400 million to housing. As I said earlier, this plan can be very quickly and very easily carried out. Mr. Speaker, there are many builders in my area. Last week I met one who told me that in Canada we have all we need. We have concrete, steel, lumber, all kinds of materials and trained labour, nevertheless the construction industry is in trouble. Why is that? The problem is uncertainty, excessively high interest rates, inflation, the investor's reluctance to get involved in development programs and buyers' fear. But I
think that the steps included in the budget will succeed in restoring confidence, which is vital to economic recovery.
In addition, $400 million will be earmarked for the reduction of interests charged to small businessmen who are borrowing to make new investments in job creation and $100 million for the reduction of interests charged to farmers who are experiencing financial problems. I feel that it is an excellent measure. Our farmers need those funds to survive the recession.
Housing assistance is divided into five specific points. First, buyers of a new house, the construction of which started before December 31, 1982 will receive a $3,000 grant. Any first buyer of a house is eligible for the $3,000 grant. That is absolutely essential in our program. In addition, the Canada Home Renovation Program has been given an additional $30 million. Once again, such a program can easily be implemented.
To meet the special needs of low-income families, the NonProfit Housing Assistance will be increased from 25,000 to 27,500 units this year. There will also be more flexibility in the interest-free loans made available under the Canada Assisted Rental Program which has been experiencing some problems; but with more flexibility, I am sure the program will quickly receive a new impetus. Lastly, the Canada Mortgage Renewal Plan is extended to December 31, 1983 and owners who have to pay more than 30 per cent of their gross income on their mortgage as a result of a mortgage renewal after the tabling of the budget will be eligible for a $3,000 grant. They will no longer have to defer their interests to become eligible.
In addition, tax proposals, if implemented, would allow Canadians who invest in a new form of term deposit to pay tax only on that part of the interest that exceeds the rate of inflation. The money could be channelled, at rates from 3 to 6 percentage points lower than prevailing rates, to buyers of new houses as well as to small businesses, farmers and fishermen who invest in new plants and equipment. A new registered investment plan is proposed providing for the purchase of publicly traded common shares of Canadian corporations. Half the capital gains would be taxable each year as in the past, but only to the extent where gains exceeds the rate of inflation.
So, Mr. Speaker, the public is invited to study those proposals and make their comments known as soon as possible. A committee of prominent financiers, accountants and economists has also been set up to look into the feasibility of the various proposals. I believe, Mr. Speaker, that this advisory committee on inflation and the taxation of personal investments is to report at the latest next September 30.
I think we should insist that this committee table its report as soon as possible, on the 15th of August if at all possible, to do away with the uncertainty that will once again exist about this new program during coming weeks. I am sure the committee could meet every day, if need be, for two or three weeks, then report on August 15, so that the government and the



July 8, 1982

Minister of Finance can announce their decisions with regard to the new program that will be implemented.
Mr. Speaker, I do not wish to keep my hon. colleagues any longer. In closing I should like to say that Canadians expected the Minister of Finance to take rather drastic measures. All in all, this budget meets their hopes. I am convinced that if each and every Canadian wants to co-operate by lowering his or her expectations, we can not only get the economy back on track but also reduce our deficit, create thousands of jobs and once again give our fellow-citizens all the services they can rightly expect. In a society such as ours, a society built on sharing, which is what Canada is, to be shared goods must first be generated. I believe the budget sets us on the right track. I am convinced its effects will soon start to be felt and that as early as next September and October, statistics and reports will tell that the budget has achieved its goal allowing the economy to gather steam for a major recovery.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, the budget we got from the Minister of Finance (Mr. MacEachen) last November deepened the recession that this country was experiencing at that time. The budget we got a few days ago from the same Minister of Finance guarantees that we will have a continuing and an even more serious recession to come.
When the minister delivered his budget last November we had 891,000 people unemployed, which represented 7.5 per cent of the labour force. He forecast then that in 1982 we would have 946,000 people or 7.8 per cent of the labour force unemployed. Instead, when he presented his budget a few days ago, we had 1,241,000 people or 10.4 per cent of the labour force unemployed. Members of Parliament know that the figure of 1,241,000 does not reflect accurately the number of unemployed. Members of Parliament know that there are in many parts of this country tens of thousands, indeed, hundreds of thousands of Canadians who have given up looking for work. They have given up looking because in their one-industry towns there simply is no work, we not only have 10.4 per cent of our labour force unemployed but we have almost double that percentage of our young people who are unemployed. A whole generation of young Canadians, the best educated and the best trained that we have ever produced, are being consigned to the scrap heap by the mistaken policies of the government.
When the Minister of Finance delivered his budget last November the cost of living was rising at 12.7 per cent per year. When he delivered his most recent budget, the cost of living was 11.8 per cent and is still rising. Wages are rising by 11.2 per cent. In other words, wages are rising by less than the increase in the cost of living. That situation has been going on for five years. The real income of ordinary Canadians has gone down, yet we are told by the government that the way to stop inflation is to cap by law the wages of public servants. The government hopes that other employers in the public and private sector will follow suit despite the fact that real earnings, the real living standard of ordinary Canadians, has gone
The Budget-Mr. Orlikow
down in recent years rather than up. To blame ordinary Canadians for inflation is patent nonsense.
Business bankruptcies were running at 642 a month last November at the time when the Minister of Finance presented his budget. Business bankruptcies are now running at 886 a month. That is an increase of 38 per cent, and it is continuing to increase.
We are told that the deficit which the Minister of Finance estimated would be $10 billion last November is now estimated to be $19 million. We should ask ourselves, and the minister should ask himself, why the deficit has almost doubled in a period of just a few months. The reasons are not very difficult to find. It is not because of poor management, although there is poor management according to members of the official opposition. The deficit is up because of the recession we are in, because of the 1.25 million people who are unemployed, who by virtue of not working are not paying income tax and are not purchasing the goods and services which they need and on which they would be paying sales tax. Companies are not making profits, therefore they are not paying the amount of corporation tax they used to pay. Government revenues are way down. At the same time that government revenues are way down, expenditures are rising. Of course, they are rising because if you have more people unemployed than ever before unemployment insurance benefits will escalate. Unemployment insurance benefits are up over 40 per cent, I believe, over last year. When the unemployed run out of unemployment insurance benefits they go on welfare, and costs to the federal government, the provinces and municipalities go up. Of course, the deficit is up.
I predict that in the fall we will get another borrowing bill which will be even bigger than the one we are going to have to deal with in the next week or so. Last November when the Minister of Finance presented his then budget, manufacturing capacity utilization was running at over 73 per cent. In other words, Canadian plants were running at over 73 per cent of their ability to produce. When the minister presented his budget a few days ago plant capacity was running at less than 70 per cent. Obviously, when plants are running at less than 70 per cent capacity what is needed to get them working at a higher capacity and what is needed to get Canadians back to work is to increase the purchasing power of Canadians. If the people had more purchasing power they could buy the goods and services they need produced by other Canadians. As a result there would be a reduction in the number of people unemployed. But instead of following policies which would increase the ability of Canadians to buy the goods and services we can produce, ordinary Canadians get a tax increase. The partial deindexation of income tax would take $1.3 billion, that is $1,300 million, out of the pockets of Canadians. If you add wage controls in the public sector, about which I will speak later, and the partial deindexation of family allowances and pensions, you add another $1.3 billion which the government proposes to take out of the pockets of Canadians in the next 20 months.
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The Budget-Mr. Orlilcow
That is the wrong policy to follow if we want to get people back to work.
May I call it six o'clock, Mr. Speaker?


The Acting Speaker (Mr. Ethier):: Order, please. 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.
David Orlikow: Mr. Speaker, in the few moments in which I spoke before the supper break I made the point that as a result of the deindexing of income taxes, of the capping of the indexation of pensions and of the restraint put on public service wages and salaries, Canadians will have a reduction in their take-home income in the next two years of $2.6 billion. However, not all Canadians will suffer as a result of the last two budgets brought forward by the present Minister of Finance. The people at the top will pay substantially less in income tax than they paid before last November's budget because of the sharp reduction in their marginal tax rate which the Minister of Finance put into effect; it was reduced from over 60 per cent to 50 per cent.
According to this week's edition of The Financial Post, a taxpayer with a wife and two children and a taxable income of $20,000 would have paid, before last November's budget, $2,502 in income tax. After the November budget and after the budget of a few days ago, he will have to pay $2,434, a reduction of less than $100. Before last November's budget, the taxpayer with a $200,000 income would have paid $98,000 in income tax. After the November budget that tax would have been reduced to $87,276. After this last budget it was increased to $87,860. Therefore, the taxpayer with an income of $200,000 received a reduction of over $10,000. That is typical of the Liberals, "To those who have shall be given".
I would like to make a few remarks about what the government is doing to our old age pensioners. I say this with great regret because we in our party had great respect for the Minister of National Health and Welfare (Miss Begin). We applauded the speeches she made all across Canada when she talked about the tens of thousands of pensioners, particularly women pensioners, who are living on old age pensions and GIS. She pointed out that many of them live in poverty. Now she has caved in and given up the fight. She has agreed to the disastrous decision of the Minister of Finance.
We should study what will happen to our pensioners and consider for a few moments the history of pensions in Canada. It has taken generations to develop pension plans. I believe our first pension plans began in 1926. It has taken all these years to lay the foundation for a pension system which would permit our retired people to live in some dignity and comfort. In 1926
we started with a pension of $20 a month for people 70 years old. In order to receive that pension they had to pass a means test. Gradually over the years the age for pension eligibility was reduced.
A few years ago indexing was introduced. I know that our Conservative friends did not like indexing and thought it was detrimental. But where would our pensioners be now if indexing was not implemented during what the Conservatives felt was the terrible minority Parliament of 1972 and 1973? At the present time, pensioners who receive old age security benefits receive $239 a month. Until the capping of indexation in last week's budget they were receiving the full indexation. The cost of living will rise by more than 11 per cent this year. The government has indicated that old age pensioners will receive an increase of only 6 per cent in the coming year, regardless of what rise occurs in the cost of living, and they will receive 5 per cent the following year, regardless of how much the cost of living will go up for that year. If the quarterly increases in 1983 for old age pensioners with full indexation was worked out at an annual rate of 10 per cent-we must remember that we have inflation of 11.5 per cent-rather than cap it at 6 per cent, at which it is now, the loss will be $77 in the next year, rather than the $55 the minister is talking about. But in the second year, with a 5 per cent ceiling on old age security payments, the real loss will be $218. Therefore, over the next two years, old age security pensioners will lose approximately $300, or $12 a month.
However, this is not the most serious effect. The fact is that if full indexing starts two years from now-one must ask oneself if we will ever see full indexing again once it has been taken away-but if full indexing starts in 1984, it will start at the lower amount. The pensioners will never catch up to what they would have received if indexation had not been capped as is proposed by the minister.
If we had the actuaries calculate the loss to pensioners over their whole lives-as I say, they will never make up that $300 which is to be taken away from them by the government in the next two years-I have been told that over the whole of their lives they will be shortchanged by several billion dollars. In view of the views which the Minister of National Health and Welfare has expressed so frequently, she should never have accepted this. I suggest that she should have resigned rather than accept it.
The government has put a 6 per cent limit on increases permitted to public servants in the coming year. The government implies that they will not lose too much because the cost of living will be brought down to 6 per cent. There is no evidence that can be given by the government that the 11 per cent cost of living today can be reduced to 6 per cent. The government cannot reduce the cost of living because it continues to follow the monetarist policy of high interest, antiintervention, anti-full employment and anti-demand and management policies which have been endorsed by this government for many years and unfortunately endorsed by the short-
July 8, 1982

lived Conservative government. That government kept following the same course. It retained the same head of the Bank of Canada and brought in a deputy minister whose views must be similar to those of the Liberals since he is one of the so-called experts on that team which advises the Minister of Finance.
There will be no substantial decrease in interest rates. The budget does nothing to end the strangulation of the economy which has been caused by high interest rates. This is due to the government's insisting on following the advice of the Bank of Canada in tying our dollar to the American dollar. We must keep in mind that, on the advice of the Governor of the Bank of Canada, the government made desperate efforts to keep the dollar at 85 cents U.S. When that did not work it made strenuous efforts to keep the dollar at 80 cents U.S. Now it is making the same kind of efforts-probably just as futile-to keep the dollar above 75 cents, U.S.
In order to do this, interest rates for Canadians have to be kept high. Therefore, individual Canadians such as farmers, home owners and small-business men now have to pay interest rates at 20 per cent or higher. Farmers, businessmen and home owners have repeatedly told the government and other members when they appeared before the finance committee which was looking into bank profits that they cannot live with interest rates which are 20 per cent or more.
Bankruptcies are at an all time high. Farmers are going out of production. Home construction is now at an all-time low. There are less than 120,000 units per year being built. This is half of the number of units being built a few years ago.
Given the interest rates which we have today there can be little, if any, reduction in the cost of living. How can interest rates be lowered and how can people be encouraged to invest in productive ways when they can do so much better by simply depositing their money in the bank or purchasing Canada Savings Bonds? Although many companies need to be modernized, expanded or computerized, what Canadian who has some savings will invest his money in the stocks of some company or buy long-term bonds when he can get 14 per cent or 15 per cent from term deposits? A year ago Canadians were able to get 19.5 per cent interest on Canada savings bonds. The result is that investment in Canadian companies has dried up. We now see Canadian companies which used to be able to sell shares or long term bonds being forced to go to the banks to borrow hundreds of millions of dollars, indeed billions of dollars, from the bank on short-term loans.
A couple of weeks ago The Financial Post listed approximately 15 of the largest companies in Canada which are paying anywhere from 75 per cent to 150 per cent of their entire cash flow in interest payments. Those companies are hanging on for dear life. Many of those companies would now be bankrupt if it were not for the banks carrying them.
Let me give hon. members another reason that it is ridiculous to talk about bringing the rate of inflation down to 6 per cent. The government said that it could not honour the contracts which it had signed with its employees in good faith, which gave the employees more than 6 per cent in wage and
The Budget-Mr. Orlikow
salary increases. It must bring in special legislation to restrict wage and salary increases to 6 per cent in the coming year and to 5 per cent the next, but the Government of Canada made an agreement with the producing provinces about the price of oil. On July 1, a few days ago, the price of a barrel of oil went up $2.25. On January 1 of 1983 it will go up $4 a barrel, and on July 1, 1983 it will go up another $4 a barrel. That is $10.25 in one year. Every increase of a dollar in the price of a barrel of oil adds half a percentage point to the cost of living. So, when we are speaking of a $10 increase in the price of a barrel of oil, we are looking at a 5 per cent increase in the cost of living in the next year, just because of the increased cost of energy. When the leader of our party suggested to the Prime Minister (Mr. Trudeau) that he should go to the producing provinces and ask them to give up some or all of that price increase to help keep the cost of living from rising, the Prime Minister said, "We have an agreement. We cannot vary it". So it obviously depends upon whom one has the agreement with. An agreement with our employees can be ignored, can be overruled, however, can that be done with an agreement with the producing provinces or the oil companies? It cannot be done.
Let us look for a moment at the limits put on the salaries of public servants. The government will limit them to 6 per cent in the coming year and to 5 per cent in the following year. As I have said, the cost of living will go up much more than 6 per cent. I have a friend who likes to do some modest wagering, and he has asked me to ask Liberal Members of Parliament who really believe the government will get the rate of inflation down to 6 per cent to contact me. He will cover all the money they would like to bet that the cost of living will come down by that amount. But let us look at what 6 per cent limit means. For the civil servant who is making $90,000, of whom there are some, it means an increase of between $5,000 and $6,000, but for the hundreds of thousands who make between $11,000 and $12,000 it means an increase limited to between $600 and $700. That is the Liberal idea of equity.
We are told that this budget will help create new jobs. Keep in mind that we have over 1.25 million unemployed. So what does the government propose in the way of job creation? It will give a $3,000 grant to purchasers of new homes under certain conditions, but it has put a limit of $300 million on the amount of money allocated for that purpose. The government itself estimates that this will provide 50,000 jobs in two years; in other words, 25,000 jobs will be created in each of the two years. The $3,000 grant can, of course, be passed along in the form of higher prices, and we have already seen some evidence that that is happening.
The problem of the prospective home purchasers is not, and has never really been, his inability to make the downpayment. The problem of the home purchaser is that he cannot afford the monthly mortgage payments with the present interest rates of 20 per cent or more. Therefore, the incomes of 90 per cent of Canadians are below what is necessary to be able to afford a house. We have the home renovation plan to which $30 million has been allocated. Again, it is hoped that it will create 10,000 jobs in the next two years.

July 8, 1982
The Budget-Mr. Orlikow


Ian Deans: Not a chance.


David Orlikow: Then we have the Canada mortgage renewal plan which makes it possible for people who formerly qualified only for interest deferrals to get grants now of up to $3,000 or whatever is required to keep their mortgage payments at 30 per cent of their gross income. That will not help much because only $25 million to $50 million has been allocated to the program. When that money runs out, they will be back in the same box they were before, as they will not be able to afford the monthly payments. Then, of course, we heard the announcement by the minister in charge of housing that we will have 2,500 more non-profit or co-operative housing units. That will not meet the need in one of the big cities in Canada, let alone all across the country. All together, if ail these housing proposals work, and that is very doubtful, we will provide 57,000 jobs in the next year and 61,000 in the following year.
What are the other job-creation programs proposed by the government? The Canada community development projects have been allocated $200 million, which will provide 23,000 jobs this year and 23,000 jobs next year. Then $300 million is supposedly to be allocated for economic development initiatives. We have heard this song before.
Let us look at one which is supposed to be a jewel in the government's arsenal, the ILAP program, announced a year and a half ago, to which $350 million was allocated. It was set up supposedly to help those communities devastated by layoffs and initiate economic resurgence. In a year and a half, less than 10 per cent of the $350 million allocated to this program has been used and only 10 per cent of the workers in some of the designated communities, which were supposed to benefit from the adjustment measures, are eligible.
Let us look at the total package the government is proposing. All of its programs together will provide 80,000 jobs this year and 84,500 jobs next year. That comes at a time when we have more than 1.25 million unemployed. What we need are real programs to put people back to work, not temporary jobs. We have 165,000 unemployed construction workers, sitting at home drawing unemployment insurance, when they want to be out working. We need a real housing program. We need to set ourselves the objective of doubling the number of houses we are building right now and building 225,000 homes in the next year. But to do this, the government would have to allocate the money or tell the banks to set aside from their investment portfolios the money required, the $2 billion required for this kind of program, at interest rates which the Canadian people can afford to pay, and that is not 20 per cent plus.
The government and the experts have spoken about the tremendous increase in our exports: 50 per cent more wheat, 100 per cent more potash and 350 per cent more coal. Our transportation system barely meets its present shipments. We need to modernize the system. We need to double track, a promise the Prime Minister has forgotten. We need to bring the signal system into the twentieth century. We will not be able to achieve those objectives we discussed because our transportation system cannot do it. We need to start now, but
the railways, instead of hiring new people and buying new equipment, have major lay-offs. The government needs to be serious. It needs to deal with unemployment as the first objective on which it will go to work. It needs to stop conning the Canadian people that this program or any other program it has enunciated will really bring down the cost of living. That will not happen, and I think hon. members on the government side know it; but, of course, they cannot afford to admit it because they cannot take the political consequences. Therefore, we say to the government, be serious. Do the things which need to be done. The people in this country want to work. We have the manpower and the natural resources. We can put the people of Canada to work at meaningful jobs if we have the desire.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: The hon. member for Ottawa Centre.


Mr. Blaikie:: Just turn off the mike!


John Leslie Evans: Mr. Speaker, I would like to make a contribution to this debate on the budget, if the hon. member for Winnipeg-Birds Hill (Mr. Blaikie) would pipe down. I will get to him in a minute.
I would like to talk about the budget, the thrust of the budget, what it does, what we are attempting to do with it and why I think it is the appropriate budget for the times, one that will set us on the track back to recovery.
The budget was intended to do a number of things. First, it was intended to intensify the anti-inflation fight. I just heard the hon. member for Winnipeg North (Mr. Orlikow) say that we should effectively forget all other economic goals except unemployment. That just will not work. How are you going to get unemployment down? You will not beat the unemployment problem if you give up on the fight against inflation.
The hon. member talked about investment. He said that we need to have more investment. Why in the world would any Canadian invest money in this country with the kind of uncertainty that would be facing us if we allowed inflation to run to 20 per cent or 30 per cent? Countries that have followed a strategy such as the one outlined by that hon. member for Winnipeg North have reaped the whirlwind. They have had declining investment, declining growth and a declining standard of living. That policy is a bankrupt policy by a bankrupt party.
The budget was intended to intensify the fight against inflation, to bring inflation down to 6 per cent, to give a positive target as to where this government believes we can bring inflation over the next year. I think we can do it, but it will take the co-operation of all parties in our economic system. The government put forward a program that shows the leadership from the government sector. We are asking the provincial governments, the provincial public sectors, to join with us.
July 8, 1982

The federal government has put forward a program. Federal public servants, federal Crown corporations, federal regulated agencies as well as parliamentarians and senators will participate in that program. We are asking the provinces and municipalities to join with us. The public sector can show leadership. The people of Canada want leadership. They want to see action. This government has put forward a program which indicates that leadership. We are intensifying the fight against inflation. We are bringing forward more meaningful policies.
The second purpose of the budget is to try to restore some confidence, to put forward some programs that will lead to enhanced savings and investment in this country. If we are going to have increased productivity and an increased standard of living, we need to have increased investment. In order to have increased investment, we need increased savings.
There have been some innovative and creative proposals put forward that will be dealt with early in the fall when the House reconvenes and the committee reports back with regard to those programs for indexation of certain investment incomes.
Those are innovative ideas that are being well received by the investment community. The community indicates that when implemented, they will have a high chance of success. In addition, we have a program of restraint, a program to try to improve the investment climate so that we will have growth and development.
At the same time we have programs that were brought forward in the budget for specific assistance to those in greatest need. The Prime Minister (Mr. Trudeau) in the Speech from the Throne in 1980 indicated that one of the prime motivating forces underlying this government's policy would be to provide aid and assistance to those in greatest need. We are running a very large deficit. There can be no doubt about that. I will come to a more complete discussion of the deficit shortly.
With that situation facing us and the very real need for assistance to those suffering the greatest losses during this period of recession, moneys had to be freed elsewhere. That is the reason for the restraint program in the public sector. That is the reason for freeing funds from sources available to us in order to provide assistance.
That assistance is being provided by some $450 million in direct employment programs and $300 million in economic development assistance. The hon. member for Winnipeg North talked about the area of housing. I gained the impression that he thought these programs are frivolous. Last night the housing industry indicated that the housing package put forward in this budget will create upward of 65,000 new homes in Canada this year alone.
On the average, for every home built two to two and a half man-years of employment are created. Therefore, if you build 65,000 new homes, you create 130,000 to 150,000 jobs. Those are jobs in the area of home building. The housing industry, which will have to take the risks in building those new houses, has assessed those programs as being effective, having great potential for success, saying they will stimulate home building,
The Budget-Mr. Evans
home purchases by first-time buyers and the real estate and building sectors.
The other major area of assistance is the interest rate assistance, an increase of some $400 million to small businesses and some $200 million increase for farmers. Those are the basic areas to intensify the anti-inflation fight through pay restraints, changes to the indexing system and restrictions for the areas of administered pricing that fall within federal jurisdiction, through the program of restraint, 6 per cent restraint next year, and 5 per cent the year after. Through that program funds will be freed to be used to help those in greatest need in this country.
That is the Liberal tradition of sharing. That is the principle by which this government operates.


William Alexander (Bill) Blaikie: You share with yourselves.


John Leslie Evans: The hon. member says we share with ourselves. Sharing has been traditional in this country. Canadians have shared in times of difficulty. We are in a difficult period. The government is saying that if we share, the burden can be spread broadly. No one will have to give up much. As the burden is spread broadly, it will ensure that no individual suffers extreme damage during this period.
We heard a great deal of discussion about the deficit. We should look at what the increase is in the deficit and how it was caused. Is it, as some members opposite have said, an increase in government expenditure, an increase in program expenditures, a permanent increase in the level of the federal deficit? I will answer unequivocally, no, it is not.
Successive governments in the past have put in place programs to protect those in greatest need of assistance. From the forties to the fifties to the sixties, with the great depression in their memories, they have put in place programs so that when times are tough, those who are hardest hit by the economic downturns are cushioned. Liberal and Conservative governments of the sixties-primarily Liberal governments-put in place programs to ensure that there would be a social safety net under Canadians. That is the source of the increase in the deficit. When we go into an economic downturn, these automatic stabilizers, as they are called-expenditures for unemployment insurance, for social assistance, for the Canada Assistance Plan and expenses of that kind-increase automatically because more people are out of work. Those expenditures indeed increase. At the same time as the economy goes into a recession the revenues of the government drop. Tax revenues drop because profits go down. Fewer people are working and, as a result, tax revenues fall.
Let us look at those factors alone. The budget deficit in the 1981 budget was forecast to be $10.5 billion and the financial requirements were to be $6.6 billion. We have heard that the government is a terrible forecaster. I defy anyone in this House to bring forward a forecast made in October or November of 1981 which shows numbers different from those forecast by

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The Budget-Mr. Evans
the Department of Finance at that time. There were none because no one, not in this country or in any other country, had any notion that the western economic world would go into the deep and prolonged recession we have gone into. The numbers were $10.5 billion for the deficit and $6.6 billion for financial requirements.
Let us look at what happened to revenues. Revenues declined because of the recession. Expenditures increased because of the automatic stabilizers, which transferred money to people in greatest need. The deficit is up to $19.6 billion because tax revenues have been reduced by $6.5 billion as a direct result of the recession. Because of automatic stabilizers expenditures have increased $2.5 billion. If we put those together, we find the explanation for the difference between the deficit forecast in November and the deficit we forecast for this year. It is not a matter of an increase in permanent program expenditures which would cause a permanent increase in the deficit. Indeed, if we do not consider interest payments on the debt as a part of this, we find that program expenditures by this government are forecast to increase this year by 10.7 per cent, which is less than the current rate of inflation. That has been the case in the past. Program expenditures over which government have direct control have increased by less than the rate of inflation over the last three or four years. There has indeed been restraint. However, as a result of rapidly rising interest rates, because of the automatic stabilizers and as a result of the decline in output and productivity-and therefore tax revenue-we have had what I would call-and I think I am correct in this-a temporary increase in the deficit during this period of recession. As we come out of this period of recession and go back to a period of restored growth, tax revenues will flow back in, people will be going back to work, payments by the Unemployment Insurance Commission will decline automatic stabilizer payments will diminish, revenues will increase and the temporary increase in the deficit will be eliminated.
I contrast this with the situation in the United States, because it is different. The United States deficit is not a temporary deficit. It is a forecast deficit which will increase year after year. We are talking about perhaps $145 billion this year and perhaps $200 billion the year after. That deficit is the direct result of increases in program expenditures by the Reagan administration and especially increases in defence expenditures and direct tax cuts. Those two programs will mean that the deficit in the United States will be a chronic deficit. It will not disappear as the U.S. economy comes out of recession. Indeed, it will continue to grow.
There is a very large difference between the deficit situation in Canada and that in the United States. One is an increase in the deficit caused by increases in permanent program expenditures-structural changes in the expenditure patterns of the government-and the Canadian situation is a temporary increase in the deficit caused by a reduction in revenues due to the recession and increases in automatic stabilizer payments caused, again, by the recession. That is the difference.
We are very concerned about our deficit. There is no way anyone could be anything but concerned about the deficit, unless he was a New Democrat. New Democrats really do not care at all about deficits. We have to be concerned, but I think we also have to understand what we are talking about. We must understand the nature of our deficit and why our country can handle it. We must understand why our capital markets can handle the kind of deficit situation we are facing.
I would like to talk about the restraint program because it is a very important aspect of the policy of the government. It is especially important to the people in my riding. There are two aspects of the restraint program. The first is the restraint of wages and salaries of public servants, Members of Parliament and Crown corporation employees as well as the control of administered prices to the levels of 6 per cent and 5 per cent. 1 support that. There is another aspect of the program, and that is deindexation. 1 support certain elements of that deindexation as well, but there is one element of deindexation about which I have serious questions. I intend to pursue those questions. I know you intend to pursue them as well, Mr. Speaker. The element to which I refer is the element of deindexation of public service superannuation. The reason I have questions about that is that contractual payments are made to individuals who made contributions during their working lives to fund indexation. If it could be shown that the fund which has been built up by public servants to fund the indexation of their pensions is inadequate or insufficient, then I could see justification for saying, "Yes, restraint". I have not seen that evidence. I have not seen anyone put forward evidence or indicate to me that there is evidence which indicates that the funding of that indexation program is inadequate. I will have to see that evidence before I can support this particular element of the deindexation program. If public servants in our ridings, Mr. Speaker, and all across the country made contributions to that fund which are adequate to cover the indexation of their superannuation payments, then I do not think that should be part of the restraint program.
I do support the over-all restraint program, but I put forward the caveat that I do intend to pursue that one element of the program.


William Alexander (Bill) Blaikie: The one that affects your riding.


John Leslie Evans: I think the government had to show leadership. Public servants, ourselves and employees of Crown corporations are all employees of the people. We work for the taxpayer, and if the taxpayer is suffering under an increasing burden and if the taxpayer is suffering as a result of the recession, it certainly seems to me to be fair and equitable that the employees of those taxpayers should be willing to share some of that burden. The request is not for a large sharing. We are not saying jobs will be eliminated or that people will be thrown out onto the streets. Indeed, there is job security in the public service. Instead of full indexation of the salaries of public servants, Members of Parliament and Crown corporation employees, we are saying there will be increases, but the increase in the first year will be limited to 6 per cent and in the
July 8, 1982

second year to 5 per cent. After all, if we are successful and bring inflation down to 6 per cent, there will be no suffering by anyone as a result of that program. Even if we do not succeed in bringing inflation down to 6 per cent, I think it is only fair that those of us who work for the people of this country share the burden they carry. It is only fair, when 1.2 million people in the private sector are unemployed, that those of us in the public sector paid by the private sector, share, and that we free money to put those people back to gainful employment.
I find nothing wrong with asking that the public sector, the employees of the people, share the burden. 1 think it is totally sensible, equitable and honest for the public sector at the federal, provincial and municipal level to share the burden carried by the private sector. I think it is fair and equitable and I support that request.


Mr. Munro (Esquimalt-Saanich):: You would!


John Leslie Evans: I hear the hon. member for Esquimalt-Saanich (Mr. Munro) indicating that this is a terrible thing. It was not this government that proposed to cut 60,000 jobs from the public service; it was the government of the party opposite that proposed to cut 20,000 jobs a year. It was not a matter of asking for restraint in wage demands with job security; it was a matter of eliminating 60,000 jobs. One out of every five jobs in the federal public service would have gone. Today it is not just a matter of restraint, it is not a matter of having a job at all. The hypocrisy of hon. members opposite is totally incredible, Mr. Speaker-


Mr. Paproski:: Mr. Speaker, 1 rise on a point of order. Would the hon. member permit a question?


Mr. Deputy Speaker:: Would the hon. member for Ottawa Centre (Mr. Evans) accept a question?


John Leslie Evans: I will when I complete my remarks, Mr. Speaker.
I think that the program must be national in scope. The Prime Minister made an extremely important point in question period just the other day and-and I am not talking out of place here-in caucus as well. He indicated that we are going to try to achieve that national restraint in a Liberal way; that is, voluntarily. We will show leadership at the federal level and we will ask for restraint in the private sector.


Some hon. Members:: Oh, oh!


John Leslie Evans: Now members of the NDP are getting up on their hind legs. They talk about restraint in the private sector, restraint on business firms, restraint on bank profits and restraint on private sector profits, but what about restraint on union demands? We do not hear about that. We hear about restraint on everything else but not on union demands because the CLC funds the NDP.


An hon. Member:: You are showing your true colours now.
The Budget-Mr. Evans


John Leslie Evans: I think we must have restraint at all levels; the public sector and the private sector.


William Alexander (Bill) Blaikie: You are union bashing now.


John Leslie Evans: That is not union bashing. That is not what I am saying at all. Restraint is being imposed on all parts of the private sector. Just tonight we heard that corporate profits declined by 44 per cent in the first quarter of this year and by 51 per cent over the last year. That is restraint. That is imposing a burden on the private sector. We have heard that time and time again.


William Alexander (Bill) Blaikie: Is that voluntary?


John Leslie Evans: White collar workers and management are taking 10 and 15 per cent cuts in their salaries.


William Alexander (Bill) Blaikie: Is that voluntary?


John Leslie Evans: Yes, they are voluntary cuts in salaries. I wonder if there was restraint in the demands made by Mr. McDermott and his colleagues in the union leadership when the INCO workers were put out of jobs? I did not hear about any restraint there. I think it is important that we look at the situation in the labour market if Canada is to restore prosperity and growth. If we are to have an increase in employment-


William Alexander (Bill) Blaikie: You guys would have to resign.


John Leslie Evans: -we must have restraint in wage demands because they impose costs on business firms that cannot be passed on. As a result, profits are down by 44 per cent in the first quarter of this year and 51 per cent over last year. That corporate profit burden must be shared by owners and workers alike if this country is to see renewed growth, an increase in productivity and an increase in the number of jobs.
It is fine for workers or for leaders of the union movement to say that they will not give concessions. As they are saying that, the membership of their unions is becoming smaller and smaller. The people on the edges are being thrown out of work. Does that sound fair and equitable? It is not in the interests of the workers.
Finally, Mr. Speaker, I want to say a few words about the prices charged by regulated industries. We have a regulated sector in this country. Bell Canada, for instance, is asking for a rather substantial increase in rates; Consumers Gas is asking for a rather substantial increase in rates, and so is Ontario Hydro. I do not think that can be allowed. Firms in the private sector are facing a decline in demand for their goods and thus, a massive decline in profitability. They are unable to raise prices and indeed, in some cases, prices have been falling. But in the regulated sector prices have been increasing in the last two years by about 18 per cent per year when inflation was running at 11 or 12 per cent. That means that the private sector price increases were going up far less than 12 per cent. That is not fair, Mr. Speaker. The regulated sector has been granted virtual monopolies on various services because they are essential in the public interest.

July 8, 1982
The Budget-Mr. Mitges
We cannot have one sector of the economy operating on a cost plus basis. No matter what the cost increases are, they go to the CTC or the CRCT and say that costs have increased and therefore they must have an increase in price. That must not occur in the regulated sector because it does not occur in the unregulated sector, the private sector. What is fair for the unregulated sector must be imposed on the regulated sector. The 6 and 5 per cent must be imposed on the regulated sector not only at the federal level but also on the regulated industries at the provincial level. They must operate under the same conditions as the private sector.
It is not fair to ask the unregulated private sector employees to suffer unemployment and suffer bankruptcies when the public sector and the regulated sector go on imposing ever higher costs on the people of the country. We must restrain ourselves.
The government has introduced a program to spread the burden equitably and ensure that all of us share it. By doing so we will bring inflation down and set the stage for renewed economic growth in the country.


Steve Eugene Paproski: Mr. Speaker, would the hon. member permit a very short question?


John Leslie Evans: Certainly, Mr. Speaker. He is harmless.


Steve Eugene Paproski: Mr. Speaker, if the hon. member for Ottawa Centre (Mr. Evans) had a couple of children old enough to buy a new home today, would he advise them to buy a new house at present interest rates, even with the grants the government proposes to give?


John Leslie Evans: Mr. Speaker, I would advise my children to buy homes because I have great faith in the future of this country. I know we are going to recover and it is going to be a good buy for them.


Mr. Deputy Speaker:: The hon. member for Grey-Simcoe (Mr. Mitges).


John Horton McDermid: On a point of order, Mr. Speaker.


Mr. Deputy Speaker:: The time of the hon. member for Ottawa Centre has been exhausted.


An hon. Member:: He has exhausted our patience!


Mr. Deputy Speaker:: The hon. member for Grey-Simcoe.


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, I welcome the opportunity to take part in this budget debate. The hon. member who just spoke has shown by the desperate tone of his voice and his delivery that he is not quite sure whether he believes in what he was saying but desperately wants us to believe him. It reminds me of the story, Mr. Speaker, of the church janitor whose job it was to clean up after the minister had finished his sermon and the congregation had left. When the janitor approached the pulpit he came across the minister's sermon notes which the minister had forgotten. He observed
that the minister had bracketed a couple of paragraphs and noted this on the side of the page: "Argument weak here. Shout like hell". I believe that is what the hon. member was trying to do to us.


Some hon. Members:: Hear, hear!


Constantine George (Gus) Mitges: Mr. Speaker, I was under the impression that, because the November budget proved to be such a nonsensical fiasco, this new budget would have indicated that the government did indeed see the error of its ways and consequently would bring forth a budget which would have indeed clearly focused itself on the myriad problems facing all Canadians, that it would come forth with the needed solutions to help negate the anxiety and unemployment in the country, our gloomy economy and, above all, effectively reduce interest rates which are causing such great havoc, untold misery and fear among all Canadians, including the business, agricultural and industrial areas of our country.
This budget, Mr. Speaker, utterly fails to address itself to the real problems facing our country. It shows that the government has learned very little indeed since the November 12 budget. Nothing has been done to bring down the interest rates which are slowly but surely squeezing the life out of our economy and destroying the hopes and dreams of millions of Canadians. How high interest rates will go is anyone's guess. Neither the government nor the Bank of Canada have shown leadership in this regard. As far as I can see they are both floating as badly as our dollar, which is now facing an unprecedented devaluation, and which in turn has dumped Canada from the position of the third highest standard of living to fifteenth. The state of being low man on the totem pole has been exacerbated as well by our very high budget deficit of some S20 billion and our million-plus unemployment.
These are the real causes of our problems, Mr. Speaker, but the government, instead of directly addressing itself to those causes, is content to treat the symptoms with band-aid medication-nothing but short-term band-aid policies-hoping against hope that the economy might, just might have an upswing so that it can be bailed out. Better still, the government hopes that the American economy will improve so that it can snatch at the Americans' coattails like a drowning man going down for the third time, grasping wildly at anything to save himself.
Canadians are being told that this budget is one of restraint. How gullible does this government think Canadians are? How can a government ask for restraint from taxpayers when it refuses to get its own house in order? How can people be expected to show restraint when this budget will increase government spending by some 20 per cent and double the size of the deficit compared to last November? It is quite obvious, Mr. Speaker, that the government does not intend to practise what it preaches. There is no question that Canadians are still in shock over the large deficit. Not only that, the bottom line of the budget indicates quite clearly that the government has
July 8, 1982

totally abdicated responsibility in carrying out its mandate to govern.
The budget, Mr. Speaker, has been described as a flog, a dud, a wet blanket thrown over a dying patient. One businessman put it this way: "We have been holding on by the skin of our teeth waiting for Ottawa to do something, and now this. In another few months it won't matter any more. We will all be done like our over-cooked dinner." There is no question that since 1970 federal governments have borrowed their way to the very brink of disaster, and that the dam on federal spending has finally burst. Government debt as of the 1982-83 fiscal year will amount of $132 billion. Twenty-five per cent of the 1982-83 budget of $78 billion will be needed just to pay interest on the national debt. Behind all this borrowing, there has been an unlimited growth in the size of the government. To be fair, this also reflects the growth of provincial and municipal governments. That is why Canada is mired in the depths of high interest rates and a deep recession. The Bank of Canada's decision to restrict the money supply should have had the effect of bringing interest rates down, but as long as it refuses to reduce the deficit and continues to borrow, we will have high interest rates and high inflation. As long as governments compete with private enterprise for the limited supply of investment capital, there will not be economic renewal.
Massive government borrowing has put tremendous pressure on the money markets, Mr. Speaker, which only increases interest rates. The government's cash requirement this year is over $17 billion, which makes it the largest single competitor for the limited dollars in the money markets. Given this situation, no wonder interest rates are going up and up. The irony is that although this budget will raise an additional $1.3 billion in revenue, none of it will be spent to reduce the deficit. Nothing this government has done has convinced the international money markets that it is serious about reducing the deficit.
The saddest part of the budget, Mr. Speaker, is that the government has singled out those Canadians who are on spouses' allowance, disability pensions and old age pensions to help pay for its mistakes.


Donald W. Munro: Absolutely shameful.


Constantine George (Gus) Mitges: The Minister of Finance (Mr. MacEachen) is asking those Canadians who paid their dues, and who now deserve support, to shoulder the burden by deindexing their pensions to 6 per cent. Their pensions are no longer inflation-proof, so their income will now dwindle away. Also distressing is the deindexing of personal income tax, which is nothing short of an under the table tax increase of $1.3 billion. As we all know, by doing this the government is admitting that it has a vested interest in inflation because as incomes increase due to inflation, tax revenues rise. For this reason alone, any attempt to deindex should be condemned outright and withdrawn.
One of the most nagging concerns of the Canadian business world, Mr. Speaker, is the government's apparent indifference to foreign investment. It is doing practically everything it can to discourage foreign investment in our country, investment which is badly needed to reawaken our slumbering economy
The Budget-Mr. Mitges
and get us back on track again. The result is that we are seen by other countries as presenting a schizophrenic image in our negative attitude to foreign investment. The Foreign Investment Review Agency is of great concern to foreign investors. Despite eight years of operation there is still no clear understanding of what is meant by the term "significant benefit to Canada". Foreign investors still do not know what the ground rules of FIRA are. When it was set up it was originally intended that 60 days would be a sufficient period for the examination of a proposal, and that extensions would only be used in extraordinary circumstances. However, at the present time over 50 per cent of applications to FIRA take more than five months before they receive a definite answer. The lack of clarity and the long waiting period, do nothing but create an unhealthy element of uncertainty that distracts foreign investors. The bottom line on Canada's treatment of foreign investment is that we are being perceived as an inhospitable place in which to invest. Such an image once entrenched is not easy to change and would be very harmful to our long-term interests.
1 would like to turn for a moment to the Canadian dollar. The breaking of the Canadian dollar to below its 1931 level brought forth the usual government excuse, the strength of the American dollar. The strength of the U.S. dollar is just a convenient whipping boy for the government. The real problem goes much deeper. Canada's inflation rate is higher than the U.S. rate because the government has done practically nothing to reduce its deficits, thereby leading to "counterfeiting" more money each year. Government deficits and out-of-line union demands have eroded our dollar since the 1970s. But now we have a new force to reckon with which threatens to pull our dollar down toward the 70-cent level. Per capita, Canada is among the richest countries in raw materials. There is no question that our economy depends more on raw materials than do those of most other countries. However, the depressed economic situation has caused a slump in prices of many of the commodities we sell abroad. Grain, copper, nickel, and lumber are going at give-away prices. There is no question that years of high living by all governments beyond their means, and intrusions and interference into the free enterprise system on a scale that Canada simply cannot afford are now exacting their toll. They only aggravate the impact of weak commodity prices; no wonder "short sellers", sellers of the Canadian dollar, have a constant field day.
As I mentioned earlier, although this budget has totally failed to address itself to the underlying causes of our problems, it has offered some band-aid remedies which may bring forth some short-term assistance to a few taxpayers, to a few prospective home buyers and to a few farmers and businesses.
1 refer to the proposal to subsidize interest rates for farmers over the next two years to 4 per cent below the 16.5 per cent currently offered through the Farm Credit Corporation. Although it may be a case of too litttle too late, it is a start, and for that reason it is welcome. Offering a $3,000 grant to

July 8, 1982
The Budget-Mr. Fisher
first-time home owners and new home buyers also merits some support. One drawback is that the program is effective only until December 31 of this year. 1 believe that to help stimulate the housing industry the program should be extended. I hope that this proposal will nevertheless stimulate demand for new homes so that more jobs to build those homes will be created.
Also welcome is the $750 million that has been earmarked for direct job creation. Reducing interest rates by 4 per cent to small businesses is welcome news. The Small Business Development Bond in a new form will, I hope, help out this depressed sector of the economy to a certain extent. It goes without saying, Mr. Speaker, that this aid to farmers, to small businesses, and to home owners should be put into effect as soon as possible. There should be no more delays like the kind we saw over the last seven months since the November budget. Delays only result in more uncertainty, more bankruptcies, more businesses going belly up and more farmers losing their farms and livelihood, so I urge the government to make all haste in getting their programs in place as soon as possible.
The unfortunate part of these programs is that only a small percentage of Canadians, a handful-those who are in desperate need of assistance-will benefit from these programs. The rest will be left to their fate, to sink or swim, caught in this terrible situation through no fault of their own, brought on by forces over which they had no control, and now they have to suffer because of the mistakes of others. They have to suffer because of economic judgment from those advisers who should have known better, governments, the banking community and others whose advice and guidance proved totally wrong and totally inaccurate.
There is no justice when people have to suffer because of the gross mistakes of others. As I have mentioned, the government has borrowed a tremendous amount of money over the last ten years or so. We have seen an unlimited growth in the size of government and in the size of the government payroll. If the federal government does not wind down its own size and get its own house in order, if it does not curb borrowing and leave more disposable income in private hands for investment purposes then, Mr. Speaker, I am very much afraid that this government will be heading for total disaster, dragging all Canadians down with it.


Mr. Douglas Fisher (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, I appreciate this chance to rise to speak and to offer my full support to a very good budget. It is a pleasure for me to take part in this debate tonight because some very notable speeches have been made over the last six days by members from all parties. I would like to extend my congratulations and thanks particularly to my colleagues who have been so helpful in the debate over the last few days.
I believe this is a budget which attacks the worst economic ills that we are currently experiencing in our economy.


Donald W. Munro: You made them.


Douglas Glenn Fisher: This is a budget which attacks inflation, the basis of it all.


An hon. Member:: It does?


Douglas Glenn Fisher: It reminds us that a 6 per cent world will restore our strength, but the 12 per cent world we are currently experiencing will continue to sap that strength.


Mr. Epp:: Who created it?


Douglas Glenn Fisher: This is a budget which attacks unemployment, the worst and most direct punishment that we experience from inflation.


Henry Perrin Beatty: You caused it.


Douglas Glenn Fisher: This budget offers $500 million right away for short-term job creation. This is a budget that offers interest rate relief.


Henry Perrin Beatty: How does it reduce inflation?


Douglas Glenn Fisher: This is a budget which offers almost $900 million for housing, for small business and for farms for shortterm interest rate relief.
This is a budget which offers a long-term answer to the horrors and the continued effects of high interest rates.


Mr. Wilson:: How?


Steve Eugene Paproski: It is a hoax.


Douglas Glenn Fisher: We have a bold new tax proposal in this budget that will help both the lender and the borrower to enjoy security and some reasonable level of interest on his borrowings.
This budget attacks the most basic economic ills that we are currently experiencing. I believe that this is a budget which has been well received across our country.


Some hon. Members:: Oh, oh!


Douglas Glenn Fisher: People need the 6 per cent target that we have offered them, and they welcome getting it from us. They welcome this leadership.


An hon. Member:: What leadership?


Douglas Glenn Fisher: People need the new jobs that were created and they welcome the new spending that we have directed into job creation.


Henry Perrin Beatty: They welcome the $20 billion deficit?


Douglas Glenn Fisher: People need the interest rate relief now. They support the grants that we are extending to business, to housing and to farmers. People need the long-term hopes that we are extending to our new tax incentives.
Let us take a look at what some of the people have said about the budget since we issued it a week ago. Let us go to
July 8. 1982

the newspapers. For example, the Citizen on June 29 had an article which reads in part:
John Bulloch, head of the 68,000-member Canadian Federation of Independent Business and outspoken critic of the ill-fated November budget, said Finance Minister Allan MacEachen "deserves full marks" for attempting to restrain federal public service wages.


John Horton McDermid: What did he say on the thirtieth?


Douglas Glenn Fisher: The article continues:
John Kyle, chairman of the economic policy committee of the Canadian Chamber of Commerce ... applauded the "signal to the rest of us" contained in the measures designed to hold the line on federal public service wages.


Arthur Jacob (Jake) Epp: Then what did he say?


Douglas Glenn Fisher: The same article continued:
But Alasdair McKichan, president of the Retail Council of Canada, said he expected Finance Minister Allan MacEachen's proposals to have an immediate beneficial effect on the level of employment and the Canadian dollar.
"It may also be the turning point in the breaking of the inflation psychology," he said. "My first reaction is that it was a pretty intelligent approach to a very difficult situation. He should get marks for ingenuity."
McKichan said he was particularly impressed by the proposals to partially abandon indexation of benefits.
"This showed the public sector they weren't the only ones getting hit."
Let me turn to the Canadian Press of June 29, as well, to see some of the comments which people have made. Jim Webber, deputy chief economist of the Toronto-Dominion Bank agreed by saying, "MacEachen has made all the right sort of moves". In the same report, Lloyd McGinnis, president of the Winnipeg Chamber of Commerce, said that the imposition of wage restraints on the public sector showed good leadership. He said that the move will provide a realistic position for wage negotiations in the private sector. This is an important piece of information.
Now I should like to turn to what Jack McArthur had to say in The Toronto Star on June 29. He said:
MacEachen is dead right about this: Inflation is the Number One enemy. Not so much because it means that prices rise for consumers as because:
Fast-rising prices result in high interest rates, which kill both economic growth and the new investment that creates it.
Further on in the same article he said:
Fast-inflating costs make us less competitive with producers in nations where costs are going up more slowly.
Also in the same article he said:
Short-term job creation-as promised by the finance minister-is meaningless unless the prices of the goods produced by the workers become attractive in the long run.
This reality is recognized in the MacEachen budget.
He went on to say:
MacEachen's objective of 6 per cent or less in annual inflation is right on.
He concluded the article by noting:
In the end, inflation will write the story. If it can be brought down, other good things will follow. If it can't, even a budget a month won't help.
There are other people across the country who have had things to say about the budget, and I should like to quote them. Turning to the Telegraph Journal of June 30, an article
The Budget-Mr. Fisher
appeared entitled, "Saint John Budget Reaction-Labour Official 'Sickened'; Businessmen 'Optimistic'". In part it read:
Patrick Darrah, president of the Saint John Construction Association ... and Keith Bowman, a tax consultant with Clarkson Gordon, both said they were gratified to see that the government is setting up an advisory board to consult on a number of economic proposals put forth last night. They said it was a sign the government is listening to what people are saying.
According to the articles, Mr. Bowman said:
Mr. MacEachen "did pretty well almost as much as he could do" considering the confines in which he was working. He said the public sector wage restraint program was good, but would need to filter over into the private sector-
Ronald Anderson wrote in The Globe and Mail under the heading, "Indexed loan plan is urgently needed" about our attack on interest rates. He said:
-Finance Minister Allan MacEachen has put forward one proposal that cuts to the heart of Canada's economic problems.
The single overriding constraint that is throttling the economy is the extraordinarily high level of interest rates.
The answer to this problem is, not to abandon the fight against inflation, and not for Ottawa to seal off the borders to keep money in the country while it orders a reduction in Canadian interest rates. But a practical and rational approach to the issue of high interest rates is offered by Mr. MacEachen's proposal for a system of new financing instruments that would be indexed to the rate of inflation.
He went on to note:
The important point to be noted is that the rising monthly payments under a fully indexed plan would not become more onerous if the borrower's income rises at the rate of inflation.
Finally at the end of the article he said:
The five or six percentage point relief that would come from exempting the illusionary inflation component of interest from taxation might, when it reaches the borrower, be just enough to save some major corporations from bankruptcy.
My last quotation is from The Gazette of Montreal dated June 29, 1982 under the heading, "Housing spokesmen see hope in MacEachen's grants plans". It reads:
The combination of measures in last night's federal budget looked "positive" for the future of the depressed housing industry, says John Sandusky, vicepresident of the Housing and Urban Development Association of Canada.
The article continued:
But he said a whole package of measures means "we've got a pretty good shot at renewed activity in our business."
Further on it indicated:
According to MacEachen, all home owners having to spend more than 30 per cent of their gross income as a result of renewals taking place from now on will be eligible for a grant of up to $3,000.
Sandusky said the grant will ease the worry for many home owners whose mortgages come up for renewal soon.
A final comment in the article read:
An official of the Quebec Provincial Home Builders Association predicted "things will move very fast" in the industry following MacEachen's announcement of grants to home buyers.
I think this is a very positive and a very representative sampling of reactions to the budget which we announced a week ago.
Now I should like to take a look at some of the details. Earlier I said that the budget sets out as its basis an attack on inflation. We regard inflation, as we have said regularly to

July 8, 1982
The Budget-Mr. Fisher
Canadian people, as the basic disease from which our economy is suffering. We have gone after that by providing for Canadian people a measure of leadership by restraining government wage costs to the 6 per cent and the 5 per cent indexing levels. In addition, we have asked Canadians to join in this effort by restraining indexing growth on some of our major costs and some of our programs. Then we can reallocate the funds from those programs into the stimulation of our economy so that other Canadians can have jobs and have relief from the heavy burden of interest rates on their businesses, farms and fishing efforts.
The major stimulation in the second part of the budget is a short-term piece of relief for those people most deeply hit by the impact of inflation, high interest rates and unemployment. Let me look at the way we have reallocated money inside our savings. We put $100 million into farming programs through the Farm Credit Corporation. Small businesses are getting $400 million through the small business investment grant, money which they can use to buy new equipment for research and development and for the all-important expansion we need to get our economy going again.
The housing package is one of the most exciting. Earlier I read a few comments from spokesmen in the housing industry. The renovation plan which was announced a few months ago has been so successful that we have found room to expand it and to double our contribution. We have given more flexibility and more leeway in the Canadian rental supply program so that developers can get involved and build the units which we consider so vital to take pressure off the rental housing market. Current home owners who are suffering under the difficulty of high mortgage costs can now obtain direct grants of $3,000.
Under the Canada mortgage renewal plan, people who spend more than 30 per cent of their gross family income can get the cost of their mortgages written down to a more intelligent and more bearable level. For new home buyers, for people coming into the home buying market in the first place, we are able to give an additional $3,000 grant to write down the cost of interest rates to encourage these people to come out into housing markets. First-time buyers are encouraged to buy older or new homes. Current home owners are asked to go out and buy new homes altogether. This gives us the double benefit of giving relief to Canadians who need the relief and of creating jobs for people who need the jobs.


John Horton McDermid: Nonsense.


Douglas Glenn Fisher: One member opposite expresses his admiration for high levels of employment by saying that any job-creation program is nonsense, obviously his high regard for any effort to take pressure off people who need some help.
The final proposal we are attempting to implement along this line is to throw another $3 million into our job-creation program and $200 million into direct job-creation programs.
All of this-$1.5 billion of expenditures-is short-term relief for our economy.
We do not pretend that this figure, massive though it is, is a permanent relief for the economy.


Raymond John Skelly: Let us go to the polls.


Douglas Glenn Fisher: We offer this relief to help Canadians who need that help now. These programs are now available. People can get the application forms. Businesses can receive the money and begin again now. This money is circulated inside the current level of government spending. This is how we have tried to take the sharing about which my colleague, the hon. member for Ottawa Centre (Mr. Evans) spoke so eloquently a few moments ago by asking people to share through giving small amounts themselves to create a large amount which we can use for those people who are most in need.


Steve Eugene Paproski: There is nothing left to share.


Douglas Glenn Fisher: The hon. member for Edmonton North (Mr. Paproski) says that there is nothing left to share. I would think that $1.5 billion is a lot of money to share. It is a small amount from each individual but it is a large pot.


Steve Eugene Paproski: One big deficit.


Douglas Glenn Fisher: The jobs which will be created will indeed be welcomed by the people who obtain them. Small businesses will welcome the grants they receive. The housing which will be created will be welcomed by the people who get it. Farmers who receive relief from interest rates will welcome that. These are measures which the hon. member for Edmonton North believes are not welcomed. He thinks they are indeed insignificant. Perhaps he should go out to the country to talk to some of those people who will benefit.
Once this short-term relief is finished this budget makes a proposal which will help businessmen to index their capital gains in order to stimulate investment in Canadian companies. We see in this budget an exciting new plan which will offer lower interest rates at first to people with mortgages, at first to farmers-


Mr. Huntington:: No one can make the payments.


Douglas Glenn Fisher: It is a plan that will allow people to lend their money with a great deal of security knowing that they will get a safe return. It will equally give security to those people who need to borrow money. It will help people who need to know how much interest rates will be for the next few years in order to make their long-term plans. They will be able to take advantage of this new proposal in the white paper. That proposal has been very well received indeed by the business community.
What is equally important is that the proposal has been put out for consultation to the business community, a process that has been welcomed in itself. The proposal of a major tax change has been submitted to the business community for the first time for its detailed study and scrutiny so that it may have public imput and allow the public to have a part to play in forming future tax policy. I believe this speaks well of the
July 8, 1982

government and of the deep concern that we have for reform in the tax process as announced in the minister's green paper.


John Horton McDermid: You are stealing that from Bob Stanfield. Be honest!


Douglas Glenn Fisher: Let us review what some of our hon. friends in the House have had to say about the budget in the last six days.


Some hon. Members:: Oh, oh!


Douglas Glenn Fisher: We can hear the enthusiasm they have expressed for it. In my judgment, the debate has taken a strange and false turn. I think it is time for some of us to come back to earth.


Arthur Jacob (Jake) Epp: Right on!


Douglas Glenn Fisher: Let us look for a moment at the position taken by our friends on the left.


Mr. Kempling:: There is no one further to the left than you.


Douglas Glenn Fisher: To my thinking they represent the all or nothing school of thought. Nothing could have illustrated that philosophy more clearly than the position taken by that party yesterday when they were given an opportunity to extend real relief on the UFFI problem.


Some hon. Members:: Louder!


Douglas Glenn Fisher: They stonewalled. Why did they do that? Because they said that relief was not enough. It was either an all or nothing proposition. If they did not get their way, no home owner or anyone suffering would get any relief. It was not enough, so no one would get help.


William James Kempling: Let us go to the people.


Douglas Glenn Fisher: That is the situation with this budget as well. They are predicting failure and thereby encouraging everyone to continue this game of all or nothing. They are saying over and over again that no one needs to take 6 per cent because the government will fail.


Raymond John Skelly: Because the government has forced it down their throats.


Douglas Glenn Fisher: This may be a great bargaining tool during prosperous times. Let us remember, however, that when times are tough and the game is all or nothing, the answer is far too often "nothing".


An hon. Member:: Tell that to the oil companies.


Douglas Glenn Fisher: The pie today is too small. It is neither compassionate nor sensitive to urge people to take more and more when the real answer will be less and less until it becomes nothing.
With the UFFI issue yesterday, they demonstrated the falsehood of their argument.


Some hon. Members:: Hear, hear!
The Budget-Mr. Fisher


Douglas Glenn Fisher: They said they will take nothing unless they have it their way, and they are saying the same thing today when they talk about wage levels and the fight against inflation. They are urging people to go for the moon-


An hon. Member:: We want you to go to the moon.


Douglas Glenn Fisher: -but instead people are going broke. I would welcome the kind of sanity and good judgment that was reflected by a union leader who is currently under great stress. The president of Inco workers, local 6500 Ron MacDonald who urged rejection of the earlier offer, reluctantly recommended acceptance of the new pact. Why? The answer is in The Globe and Mail issue of July 5, if members want to look it up. It reads:
'But after the company announced a four-month production shutdown on June 23, I had to start thinking we weren't hurting them, that maybe it was better to pick another time and another place to take the company on.
That man expressed very clearly and practically that you cannot always go for all or nothing.


Some hon. Members:: Hear, hear!


William Alexander (Bill) Blaikie: We do not feel that way. We will take you on any time.


Douglas Glenn Fisher: That reality is forcing itself on us. I thank that union leader for being much more realistic than my hon. friends here.
This government is not saying all or nothing. We are saying that everyone is in this together. We are saying that from the lowest to the highest pay scale, from the youngest to the oldest, companies and unions, the public sector and private sector, whether it is wages or prices, we are all in this together and we must break the 12 per cent cycle and restore health to our economy.
As a last warning to my all or nothing friends, I am reminded of an example I saw in the Caribbean during the winter where I visited a small country with limited resources. I was at a forestry station which the Canadian government was supporting. I was told that the forestry station was an utter failure that year. I asked why and was told that they were unable to bring the crops in. When I asked why this occurred, I was told that the previous government of just a few months earlier had given their workers a 100 per cent pay raise out of a deep sense of compassion. The government had run out of money and fired half of the workers. That is not compassion, it is not practical but it is a very good example of what happens when you ask for too much from a limited pie. Not only do the workers lose, the whole economy fails. The management and the whole country fails.
Let us now consider the position of the hon. members across from us. If the NDP are offering "all or nothing", then the Conservatives are offering us "divide and conquer". Again, they do it in the name of compassion. Again, they do it by error. One by one, they drag out the groups. One by one, they

July 8, 1982
The Budget-Mr. Fisher
try to tell us how each group will suffer if they take only 6 per cent. One by one, we are told that the government's plans will not work.


John Horton McDermid: Why do you not move back to your riding?


Douglas Glenn Fisher: They say that the government's plans will not work and that inflation will triumph. They are telling us that, one by one, individual groups will fall behind or suffer a crushing extra load, or be left at the side of the road to wither and die. One by one, they are dividing people in our economy. One by one, they are hoping to conquer. They are hoping to conquer because they know that without co-operation the government will fail. They know that if they continue that kind of division, then inflation will indeed continue and will run wild.
However, not everyone in our economy has gone along with them. They have offered their divide and conquer rule on behalf of some senior citizens and some former civil servants. Yet they only have to open the Ottawa Citizen to note the reaction of some of those very people. Let me quote from the Ottawa Citizen of June 30. This is not what I say, this is what the people themselves say. On June 30 page 31 of the Ottawa Citizen, under the title "We are citizens ... we'll cut back", Mr. George Wagdin, past president of the Senior Citizens' Council of Ottawa, stated:
-I think we all have to share the burden that MacEachen faces.
The article goes on to state:
Bert Hanmer, vice-chairman of the Ottawa-Carleton Council on Aging, is pleased those at the lowest end of the income scale eligible for guaranteed income supplements won't be affected . ..
He feels everyone who can afford to cut back, including seniors, should.
"We're citizens as well as seniors."
Dorothy Milligan, of the Senior Citizens Council and a retired public servant, said the changes may mean she has to give up a few luxuries, but they won't mean hardship.
Milligan said she would have been very concerned about the budget changes had the government not protected the lowest income seniors. But since they've been looked after, "1 think the rest of us ought to tighten our belts a little bit and get this thing licked."
We have all or nothing, we have divide and conquer, but this government will not take either course.


Steve Eugene Paproski: We have a big hoax and a big con job over there.


Douglas Glenn Fisher: This government is taking a middle of the road course which was best described by the advice given to us in The Financial Post-


Steve Eugene Paproski: it is Karl Marx's socialism over there.


Douglas Glenn Fisher: -the very pinnacle of business advice. Let me give some advice from The Financial Post to my hon. friends across the way.


Some hon. Members:: Oh, oh!


Douglas Glenn Fisher: The Financial Post of July 3, 1982, states:
The opposition, sensing weakness, may go for the jugular and forget that they, too, have a constructive role to play at times of very delicate balance.
The extreme and the implacable, egged on by the excitable in the media and unable to see merit in a middle way, may blindly help precipitate an even deeper crisis for Canada.
There are great risks facing us. And because they are so large, the minister's attempt to make a new start-and to make us all face the realities of the worldwide recession-should be treated seriously and dissected with restraint...
In these circumstances, there should be a pause for cool consideration of what is a very wide ranging budget, a thoughtful moment to examine where best interests do in fact lie over the longer term, and exactly how best Canadians can work their way out of the present crunch.
That is important advice for all of us from the July 3 edition of The Financial Post.
We are not asking Canadians to carry a huge burden. We are asking Canadians to contribute a small amount each. Why? It is so that they can share some of that with people in great need, people who need jobs, people who need houses, people whose businesses need some help. Those are the people whom we are anxious to help. If senior citizens and if ordinary people can go along with it, then surely it is not too much to ask that some of our colleagues here in the House go along with it.
I close on this advice, that all of us here should begin, perhaps, to make fewer of the gestures and comments which have been so eloquently directed to me tonight and, instead, we should lift our eyes and see that this country-


Arthur Jacob (Jake) Epp: To the hills.


Some hon. Members:: Oh, oh!


Douglas Glenn Fisher: -has need of unity and has need of some constructive advice.


Some hon. Members:: Hear, hear!


Douglas Glenn Fisher: Surely, if we can get the kind of enthusiasm and see the kind of assistance that ordinary retired citizens can give us, it is not too much to ask that all of us in this House, together, seriously consider the problems facing our economy and contribute as much as each of us can to their solution.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. It being 9.45 p.m., it is my duty pursuant to Standing Order 60(8) to interrupt the proceedings and put forthwith the question necessary to dispose of the motion now before the House.

Is the House ready for the question?


Some hon. Members:: Question!


Some hon. Members:: No!


Erik Nielsen: On division!
July 8, 1982


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


Erik Nielsen: On division! I rise on a point of order. We are prepared to adopt the measure on division.


Some hon. Members:: No, no!


An hon. Member:: Record your vote!


Mr. Deputy Speaker:: All those in favour will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the yeas have it.
And more than five members having risen:


Mr. Deputy Speaker:: Call in the members.
And the members of the Official Opposition having left the Chamber:


Ian Deans: Madam Speaker, I do not want to appear as if I do not understand the rules, but I wonder if you might explain to me exactly what is happening at the moment?


Madam Speaker:: There was a misunderstanding, apparently, about whether the Speaker would wait beyond the 15-minute bell. There was a misunderstanding as to whether or not it was a 15-minute bell. There was some confusion about the information that was given at the time. However, I am told that the members are now coming to the chamber to vote and I will wait a few minutes more.


Some hon. Members:: Oh, oh!


Denis Éthier: Madam Speaker, as an official of the chair I might be breaking with long-standing tradition when I ask to be recognized, but I have to dissociate myself from what is happening right now. We have long-standing practices here, and rules of procedure that we all obey. This is a 15-minute bell, and I cannot continue in my responsibilities if members are not going to obey the rules and procedures. Therefore, I am telling my Prime Minister (Mr. Trudeau) and the members of my caucus that I cannot serve as an officer of the chair because those members not present do not comport themselves according to the rules and procedures. They are not acting as true representatives of this country. I am very sorry I have to announce that now, but if the vote is not taken now, I am sorry, I cannot put up with that.


Some hon. Members:: Hear, hear!


Madam Speaker:: I can assure the hon. member that the vote will be taken momentarily.


Some hon. Members:: Now.
The Budget


Madam Speaker:: I would ask the hon. member to reconsider his decision. Perhaps he is not aware of what had transpired previously. I was informed just as I occupied the chair, that apparently there was some confusion concerning information given about the length of time the bells could ring. That is why some members are meeting and did not come down at the appropriate time. I will be taking the vote momentarily. I would very much regret the hon. member not wanting to serve again in the capacity in which the Chair has given him full confidence. I would ask him to reconsider his decision in light of what happened just before 1 occupied the chair.


Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, if I may, I would like to speak to the matter raised by the hon. member for Glengarry-Prescott-Russell (Mr. Ethier). I hope that, before he gives any finality to what he has indicated to the House today, he would consult very carefully with his seatmate, the Deputy Speaker, with the officers of the Table, with Madam Speaker and with one member in particular from my party, the hon. member for York-Peel (Mr. Stevens). By doing that he will understand exactly what occurred tonight. I do not want to make any point. Others will argue about it perhaps. But I wanted to say that to my hon. friend who, in the sense of my riding, is almost a neighbour. I hope the hon. member will reconsider the matter.


Denis Éthier: Madam Speaker, I appreciate the kind words of the hon. member for Nepean-Carleton (Mr. Baker). I meant what I said before; I do not speak with a forked tongue, and I stand by what I said. When an order of this House is given for a 15-minute bell and members are called to vote, if that order is not going to be obeyed, I cannot be an officer of the chair. I stand by what I said a while ago. I will not be an officer of the chair any further if members do not live by the rules and procedures that were given by them to the Chair. Therefore, I stand by what I said a while ago. Please accept my resignation, Madam Speaker.


Madam Speaker:: I would like to think about that, and before I accept the hon. member's resignation I would like to have a chance to discuss the matter with him to make him aware of the facts that preceded this particular circumstance. The question is the following-


Erik Nielsen: Madam Speaker, I rise on a point of order.


Some hon. Members:: Oh, oh!


Some hon. Members:: Sit down.


Erik Nielsen: Madam Speaker, I simply rise to suggest that the question be put on the assumption that the whips have appeared.


Mr. MacEachen:: There is no assumption.


Madam Speaker:: The hon. member has the knack of asking the Chair to do precisely what the Chair was doing.

July 8, 1982
The Budget
The question is on the main motion.


Madam Speaker:: I declare the motion carried.


[Stage Direction]
Motion agreed to.
It being past ten o'clock, the House stands adjourned until tomorrow at 11 a.m. pursuant to Standing Order 2(1).
At 10.26 p.m. the House adjourned, without question put, pursuant to Standing Order 2(1).
[Stage Direction]
Friday, July 9, 1982